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04/29/2002 -----.----..,.---~----~~.-~----.---------~~-~~- , , , '" ~, l . :. .~': ,t, , I, I ~'. " . . .' , t' :". ,:\', ~::: .. \,.~ 'l' .~ ;~. < . '. i~r"/, /-.,: I'" ;.:('.. d ~.~.. -; 1,1.. .' ~~.~j\j~'~ f ~ ),1\ ' , ' 11~};, ,'\ .' ";' ';;~,.: : ~ < 1'~~:::'::" . ~. ' '. , ,~ . ,H ~ C, .' t, . ..1.... , "..' '. '. . /.:.'. .. I}... : .:',' ~{".~ : . ..~.'; " I . '. ,~~.~: : . .; ~ t , ' , ,. , I"" " . . ~~. Iii, ,,' .... ,t. '. ." i'" \,' " i' l~ . . ~ ~ f'~ , " ..).... h::' /, " '. 'I 'j-:q-/I .' -:~~ ',. ) < . It:' . . fjii;::\': ;;,,;';><;;:,-,.. l....H...J ....~~~.-;. ~. oF . ,. \~'.. ',j"' ,,' . .: I ;'. : , \' jt, '.' " .CI,..r' .; { '. C d' ~. .~', >.1 ...-- ,.' . .., . ~ ' ~ f'! I' I'>' ., . .. 'PRELIMINARY (WS) AGENDA MEETING j' 04/29/02 p " ., , , " / -", :/&~' .1', " .1:<.(. " ,f, '" ,I..., , . , , ':,\t .' ;II; PRELIMINARY AGENDA Clearwater City Commission Work Session - 9:00 A.M. Monday, April 29, 2002 "Convene as Pension Trustees: 1 ; Call to Order 2. Approval of Minutes: 04/15/02 3. Authorize staff to conduct a search for a custodian for the Employee Pension Fund, authorize Callan & Associates to assist with the search, authorize the cost of the searcht including staff travel of approximately $3,500 and Callan's fee of up to $30,000 to be paid from the pension fund. 4. Res #02-10 authorizing the conversion of 24,700 shares of Metro-Goldwyn-Mayer, Inc. common stock from physical form to Depository Trust Corporation eligible electronic form, approve the "Irrevocable Stock/Bond Power" form. 5. , Adjourn Reconvene Work Session PRESENTATIONS , 1. 9/30/01 Comprehensive Annual Finance Report 2. Certificate of Achievement for Excellence in Financial Reporting - Margie Simmons PUR, PURCHASING 1. Declare surplus and authorize disposal of vehicles and equipment OS DEVELOPMENT SERVICES 1. Award a contract to Kimmins Contracting Corporation in the amount of $141,100 for the demolition of the Cab;ma Club Restaurant to the lowest and most responsive ~id received. FN FINANCE 1'. Res #02-25 which designates the Finance Director as the city representative and the Deputy Finance Director and the Cash & Investments Manager as the alternate representative on'the First Florida Governmental Financing Commision. 2. Request for authority to settle the workers' compensation Claim of Claimant, Ronald Pownall, in its entirety to include medical, indemnity and attorney fees for the sum of $89,975. 3. Accept $115,571.01 from Peter E. Field Shelter Trust PR 'PARKS AND RECREATION 1. Approve an Amendatory Agreement between the City of Clearwater and t~e Phili;idelphla Phillles which will modify and amend the Agreement for Development, Sports Facility Use Agreement and Baseball Training Facility Lease Agreement to reflect the change in primary location for the complex and tlmeline for project events. 04.29.02 WS Agenda.doc 1 Revision I - \I '.s ;, , , ./ , . "< :'';' ~ ,/',~'~. ;/"" , , , , I ' ' , PO POLICE }~, .' 1. ,Award a three-year contract, beginning May 1, 2002 throuth April 301 20051 to B.J. 's 'Towing and Recovery, Inc. in the amount of $75,000 to provide adequate towing service. consistent ann unIform fees for the towing and storage of vehicles, and proper safeguards for the protection of property towed or relocated in accordance with terms of the contract. ClK CITY CLERK 1. ' Brownfields Advisory Board 2. 'NAHAS .Advisory Board ' 3.' Enterprise Zone Development Agency CA LEGAL DEPARTMENT Second Reading Ordinances 1. ' Ord 6950~02 ....; Annexation for 3010 Grandview Avenue (Kapok Terrace, lot 11 and a portion of Lot 12 in Section 097'29S-16E) (Thao and Vui Nguyen ANX 02-02-01) . Ord 6951-02 - land Use Plan for 3010 Grandview Avenue (Kapok Terrace, lot 11 and a portlon,of ~ot 12 in Section 09-29S-16E) (Thao and Vui Nguyen ANX 02-02-01) Ord 6952-02 - Zoning Atlas Amendment for 3010 Grandview Avenue (Kapok Terrace, Lot 11 and a portion of lot 12 in Section 09-29S-16E) (Thaa and Vul Nguyen ANX 02- 02-01 ) Ord 6953-0'2 - Zoning Atlas Amendment for 101 South Old Coachman Road (Post Court, Lot 1 less, the Northerly 920 ft, in Section 18-29S-16E) (Post Court I Keith , Brlcklemyer Z 02-01-01) \ Ord 692S-02 - Community Development Code Amendments 2. 3. 4. 5. First Reading Ordinances Resolutions Agreements, Deeds and Easements Other City Attorney Items City Manager Verbal Reports Commission Discussion Items , Presentation(s) for Thursday Night Other Commission Action Adjourn , 04.29.02 WS Agenda,doc ' 2 Revision I ., I, , .~ . . , , T);~.~ Of.. : ~.' ,. . ~ Work Session 4/29/02 See Agenda Booklet Presentations #1 CAFR- Comprehensive Annual Financial Report FY end 9/30/01 LA h „ Cite of Clearwater, Florida COMPREH SIVE ANNUAL FINANCIAL EPORT for Fiscal Year Ende -ptember 30, 2001 Certificate of Achievement for Excellence in Financial Reporting Presented to City of Clearwater, Florida For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2000 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. /elid4'r Pr sident Yil"; L Executive Director INTRODUCTORY SECTION City of Clearwater, Florida Comprehensive Annual Financial Report for Fiscal Year Ended September 30, 2001 Brian J. Aungst Mayor - Commissioner Ed Hart Whitney Gray Hoyt Hamilton Bill Jonson Vice Mayor - Commissioner Commissioner Commissioner Commissioner William B. Home II City Manager Margaret L. Simmons, CPA Financial Services Administrator Prepared by: City of Clearwater Financial Services CITY OF CLEARWATER, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30.2001 TABLE OF CONTENTS INTRODUCTORY SECTION: EAU Government Finance Officers' Association Certificate Title Page Table of Contents iii Transmittal Letter vii Organizational Chart xvi FINANCIAL SECTION: Independent Auditors' Reports: General Purpose Financial Statements 1 Compliance and Internal Control Structure 3 General Purpose Financial Statements: Combined Balance Sheet - All Fund Types and Account Groups, And Discretely Presented Component Units 6 Combined Statement of Revenues, Expenditures and Changes in Fund Balance - All Governmental Fund Types, Expendable Trust Fund and Discretely Presented Component Unit 10 Combined Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual (Non -GAAP Budgetary Basis) - General and Special Revenue Fund Types 12 Combined Statement of Revenues, Expenses, and Changes in Retained Eamings/Fund Balances - All Proprietary Fund Types 14 Combined Statement of Changes in Plan Net Assets - Pension Trust Funds 15 Combined Statement of Cash Flows - All Proprietary Fund Types 16 Notes to Financial Statements 18 Required Supplementary Information - Pension Trust Funds: Schedules of Funding Progress 47 Schedules of Employer Contributions 48 Notes to Schedules of Required Pension Supplementary Information 49 Financial Statements of Individual Funds: GENERAL FUND: 50 Balance Sheet 51 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Non -GAAP Budgetary Basis) 52 SPECIAL REVENUE FUNDS: 55 Combining Balance Sheet 56 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 58 Special Development Fund: Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 60 Community Redevelopment Agency: Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 61 DEBT SERVICE FUNDS: 63 Combining Balance Sheet 64 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance 66 CAPITAL PROJECTS FUNDS: 69 Combining Balance Sheet 70 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 71 iii CITY OF CLEARWATER, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30.2001 TABLE OF CONTENTS, Continued ENTERPRISE FUNDS: 73 Combining Balance Sheet 74 Combining Statement of Revenues, Expenses, and Changes in Retained Earnings 78 Combining Statement of Cash Flows 80 INTERNAL SERVICE FUNDS" 85 Combining Balance Sheet 86 Combining Statement of Revenues, Expenses, and Changes in Retained Earnings 88 Combining Statement of Cash Flows 90 FIDUCIARY FUNDS: 93 Combining Balance Sheet 94 Combining Statement of Plan Net Assets - Pension Trust Funds 95 Combining Statement of Changes in Plan Net Assets - Pension Trust Funds 96 Statement of Revenues, Expenditures, and Changes in Fund Balance - Expendable Trust 98 Agency Fund - Statement of Changes in Assets and Liabilities 99 GENERAL FIXED ASSET ACCOUNT GROUP: 101 Schedule of General Fixed Assets/Sources of Investment 102 Summary of General Fixed Assets by Function and Activity 103 Summary of Changes in General Fixed Assets by Function and Activity 104 COMPONENT UNIT - Clearwater Downtown Development Board: 105 Balance Sheet 106 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 107 SUPPLEMENTARY INFORMATION: 109 Continuing Disclosure - Gas System Revenue Bonds, Series 1996A 110 Continuing Disclosure — Water & Sewer Bonds, Series 1993 & 1998 114 Continuing Disclosure — Stormwater Bonds, Series 1999 117 Fire Services Program 118 STATISTICAL SECTION: 119 Table I General Governmental Expenditures by Function - Last Ten Fiscal Years 120 Table II General Revenues by Source - Last Ten Fiscal Years 122 Table III Property Tax Levies and Collections - Last Ten Fiscal Years 124 Table IV Assessed and Estimated Property Valuations Last Ten Fiscal Years 126 Table V Property Tax Rates - All Direct and Overlapping Governments - Last Ten Fiscal Years 128 Table VI Principal Taxpayers 130 Table VII Ratio of Net General Bonded Debt to Taxable Assessed Value and Net Bonded Debt Per Capita - Last Ten Fiscal Years 131 Table VIII Ratio of Annual General Debt Service to Expenditures - General Bonded Debt, General Revenue Certificates, and Mortgages and Notes - Last Ten Fiscal Years 132 Table IX Computation of Legal Debt Margin 134 Table X Computation of Direct and Overlapping Debt 134 iv t 1 f 1 l i 1 1 r I 1 t r I CITY OF CLEARWATER, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30.2001 TABLE OF CONTENTS, Continued Page Table XI Revenue Bond Coverage: Water and Sewer Revenue Bonds Coverages 135 Public Service Tax Revenue Bonds Coverages 136 Gas Revenue Bonds Coverages 137 Stormwater Revenue Bonds Coverages 138 Infrastructure Sales Tax Revenue Bonds Coverages 138 Table XIII Demographic Statistics - Last Ten Fiscal Years 139 Table XIV Property Value, Construction, and Bank Deposits - Last Ten Fiscal Years 140 Table XV Miscellaneous Facts 142 SINGLE AUDIT / GRANTS COMPLIANCE SECTION' 145 Report on Compliance with Requirements Applicable to Each Major Program and Internal Control Over Compliance in Accordance with OMB Circular A -133 147 Schedule of Expenditures of Federal Awards and State Financial Assistance for the Year Ended September 30, 2001 149 Notes to Schedule of Expenditures of Federal Awards and State Financial Assistance 153 Schedule of Findings and Questioned Costs for the Year Ended September 30, 2001 154 Management Letter as Required by Rules of the Auditor General 156 Management Advisory Comments 158 V CITY MANAGER CITY OF CLEARWATER POST OFFICE Box 4748, CLEARWATER, FLORIDA 33758 -4748 CITY HALL, 112 SOUTH OSCEOLA AVENUE, CLEARWATER, FLORIDA 33756 TELEPHONE (727) 562 -4040 FAx (727) 562 -4052 March 28, 2002 The Honorable Mayor - Commissioner and The City Commissioners City of Clearwater Clearwater, Florida Ladies and Gentlemen: The Comprehensive Annual Financial Report of the City of Clearwater (the "City") for the fiscal year ended September 30, 2001, is submitted herewith. Responsibility for the accuracy of the presented data and the completeness and fairness of presentation, including all disclosures, rests with the City. We believe the data presented is accurate in all material respects, and that it presents fairly the financial position and results of operations of the various funds and account groups of the City. We also believe that all disclosures necessary to properly interpret the data presented, and to enable the reader to gain an understanding of the City's financial activities have been included. The Comprehensive Annual Financial Report is presented in three sections: introductory, financial, and statistical. The introductory section includes a title page listing the principal government officials, this transmittal letter, and the GFOA Certificate of Achievement for Excellence in Financial Reporting awarded to the City for its fiscal 2000 Comprehensive Annual Financial Report. The financial section includes the general purpose financial statements and the combining and individual fund and account group financial statements and schedules, as well as the independent auditor's report on the financial statements and schedules. The statistical section includes selected financial and demographic information, presented on a multi-year basis for comparison. Also included is an additional section on the City's compliance with Federal and State grant requirements, including a report on internal control and compliance and the Management Letter. Reporting Entity Chapter 9710, Special Laws of Florida, incorporated the City of Clearwater, Florida in 1923, as amended. The City provides municipal services of police and fire protection; construction and maintenance of streets, bridges, sidewalks, storm drainage, public parks and recreation facilities; a City operated marina; a convention center; planning, zoning, subdivision and building code regulation and enforcement; supervised recreation programs; public libraries; redevelopment of declining commercial and residential neighborhoods; solid waste collection and recycling; natural gas distribution; water supply and distribution; waste water collection, treatment and disposal; stormwater management; and operation of the city-wide parking system. Reported herein are all funds and account groups of the City, including the Community Redevelopment Agency, which form the primary government. The Clearwater Downtown Development Board, fiscally dependent upon the City of Clearwater, has been reported in a separate column as a component unit due to governance by a separate board. BRIAN J. AUNGST, MAYOR- COMMISSIONER ED HART, VICE MAYOR- COMMISSIONER WHITNEY GRAY, COMMISSIONER HOYT HAMILTON, COMMISSIONER BILL JONSON, COMMISSIONER "EQUAL EMPLOYMENT AND AFFIRMATIVE ACTION EMPLOYER" Economic Condition and Outlook Clearwater is located on Florida's west coast, just north of St. Petersburg and west of Tampa. Clearwater is home to one of the most beautiful public beaches in the world and tourism is an important component of the economy. However, Clearwater also enjoys a diversity of manufacturing, service industries, high -tech companies, and a significant retirement population. Economic prospects for 2002 reflect the downturn in the national economy. The unemployment rate in Pinellas County is projected at 5.6% versus 3.5% for fiscal 2001. Additionally, housing starts and commercial construction are expected to be down from fiscal 2001 levels. This downturn in the economy is a major change from the robust economy that we have enjoyed in recent years. However, the City of Clearwater is well - poised to "weather the storm" due to its diversified revenue sources and conservative fiscal policy. Adequate fund balances and a legal debt limit well below statutory limits continue to provide the City of Clearwater with an additional margin of continued fiscal security. Major Initiatives - Current Year The Planning Department played a significant role in the development of three comprehensive area plans during fiscal 2001. The first, Beach By Deign, is a comprehensive blueprint with recommendations for the future development of Clearwater Beach. The second, the Downtown Clearwater Periphery Plan 2000, contains planning guidelines for the downtown periphery areas. Finally, the Downtown Redevelopment Plan, although not yet finalized, will guide the future of much - needed downtown redevelopment. Other major initiatives during the current fiscal year included the planning, design, financing, and solicitation of public input into several major projects, including a new main library, a new Memorial Causeway Bridge, a "Town Lake" in downtown Clearwater, North Greenwood neighborhood improvements, and additional fire stations. Planning for all of these projects was successfully completed during fiscal 2001 and the projects are discussed in the following section of future initiatives. Major Initiatives — Future Planning and financing for the new main library, the new Memorial Causeway Bridge, and the "Town Lake" project were finalized during fiscal 2001, with construction to begin in early 2002. The new 90,000 square foot main library, overlooking the Intercoastal Waterway in downtown Clearwater, is destined to become a focal point of downtown redevelopment. Expected completion is 2003. The new Memorial Causeway Bridge, which will also begin construction in 2002, will be a fixed, high span "signature piece" bridge to replace the current drawbridge. Expected completion of the bridge is 2004. Finally, the "Town Lake" project is a four acre stormwater treatment pond and park amenity in downtown Clearwater. The project is expected to be completed during 2002 and the accompanying residential development should play a key role in downtown redevelopment. Several projects will also be undertaken in the North Greenwood community during fiscal 2002. These include a new recreation and aquatics center, branch library, and North Greenwood Avenue corridor enhancements. viii Finally, construction of two new fire stations, a Sand Key fire station and a "Northwest" station, are slated to begin during fiscal 2002, with construction to be completed during fiscal 2002 and 2003 respectively. Internal and Budgetary Control Effective internal accounting control is a major emphasis in the City's accounting system. Internal control seeks to provide reasonable, but not absolute assurance that assets are safeguarded against loss from unauthorized use or disposition, that financial records are reliable for preparing financial statements and maintaining accountability for assets, and that applicable laws and regulations are complied with. In addition to annual reviews by the independent auditors as part of their audit of the financial statements, the City maintains an Internal Audit Department consisting of two professional internal auditor positions. Although the legal level of budgetary control is the individual fund, administrative budgetary control was maintained at the departmental level in fiscal 2001 by the encumbrance of funds when a purchase order is entered into the system. Pursuant to authority delegated to the City Manager, formal amendments are processed administratively when purchase commitments exceed available controlled balances. Quarterly budget status reports to the City Commission detail these adjustments. Open encumbrances are reported as reservations of fund balances at September 30, 2001. Governmental Funds Governmental Funds are used to account for primarily tax- supported services (as distinguished from those services supported from user charges). The governmental fund types include the General, Special Revenue, Debt Service, Capital Project, and Expendable Trust Funds. Following is a summary of revenues for all governmental funds for fiscal 2001 ('including the Clearwater Downtown Development Board, a discretely presented component unit), with comparative figures for 2000. All Govemmental Funds 2001 2000 Revenues: Taxes (Property, Utilities Services, and Franchise) $ 52,043,999 $ 49,205,277 Licenses, Permits, and Fees 4,408,637 5,432,799 Intergovernmental 33,105,406 26,073,855 Charges for Services: Administrative Charges to Other Funds 7,613,256 6,971,733 Other Charges 1,765,411 1,504,268 Fines, forfeitures and Penalties 2,015,067 1,921,448 Miscellaneous Revenues 7,028,322 3,996,658 Total Revenues $ 107,980,098 $ 95,106,038 Property Taxes remain the most important single revenue provided to Governmental Funds. Property taxes collected in 2000/01 totaled $27,856,905, which represented approximately 25.8% of total governmental revenues. Comparable figures from the previous year were $26,219,674 and ix 27.6 %, respectively. The current year increase in property tax revenue of 6.2% was due to a corresponding increase in the taxable assessed valuation, with no increase in the millage rate. Out of the total taxes collected, $1,738,590 was earmarked for capital improvements to the City's roads and is reported in the Special Development Fund, rather than the General Fund. Additionally $144,895 represented millage for the Downtown Development Board. The Downtown Development Board is reported as a discretely presented component unit in the accompanying financial statements. The January 1, 2000 assessed valuation, which is used as the base for levying fiscal year 2001 property taxes, was $5.209 billion after exemptions, versus $4.903 for the prior year. The property tax levy millage rate was 5.5032 per thousand of taxable value. There is no general obligation debt included in the millage, resulting in a non -voted millage rate of 5.5032. Since the City is permitted by state law to levy ten mills without referendum, there remains a legal millage margin of 4.4968, which would produce $23,423,000 of additional revenue based on the January 1, 2000 assessed valuation. Licenses, Permits, and Fees reflect a decrease of $1,024,162 due to a $1,503,000 "Fee in Lieu of Parking Spaces" received by the Special Development Fund from the Church of Scientology for their new downtown headquarters during fiscal 2000. Miscellaneous Revenues reflect an increase of $3,031,664 primarily due to improved unrealized interest earnings on the City's cash pool (approximately $2.2 million). This unrealized interest must be recognized pursuant to governmental accounting standards but does not reflect available resources due to the City's policy of holding investments until maturity. An analysis of General Fund data, as presented on pages 6 -12 of the financial statements, reflects an unreserved fund balance of $11,806,128 as of September 30, 2001. This amount represents 14.6% of fiscal 2001 expenditures and operating transfers, and 13.4% of the adopted fiscal 2002 budget. Both figures exceed the 8% "target" adopted by City Commission policy. Following is a comparative summary of Governmental Fund expenditures (including the Downtown Development Board): Expenditures: All Governmental Funds 2001 2000 General Government $ 9,486,088 $ 9,126,217 Public Safety 42,442,045 41,362,225 Physical Environment 2,221,979 2,245,047 Transportation 5,401,902 5,091,703 Economic Environment 2,466,515 2,319,156 Human Services 699,699 633,960 Culture and Recreation 18,301,610 16,932,942 Capital Outlay 42,676,646 16,885,678 Debt Service 2,257,198 2,141,246 Total Expenditures $ 125,953,682 $ 96,738,174 I I 1 1 1 1 1 1 t Capital Outlay expenditures increased by $25,790,968 primarily due to an expenditure of $23,645,638 to the Florida Department of Transportation to fund the new Memorial Causeway Bridge construction project. Enterprise Funds The following table presents a summary of significant financial information for the City's enterprise funds. Operating Net Income Total Assets Income (Loss) (Loss) (in thousands) (in thousands) (in thousands) 2001 2000 2001 2000 2001 2000 Water and Sewer Utility $ 210,430 $ 214,366 $ 3,308 $ 3,823 $ 1,776 $ 1,054 Gas Utility 47,587 45,589 4,125 3,397 2,470 1,113 Solid Waste Utility 14,878 13,198 1,564 1,524 1,719 1,306 Recycling Utility 4,182 3,785 174 558 375 672 Stormwater Utility 32,217 30,233 358 570 (270) 290 Yacht Basin and Marina 4,299 2,630 (71) 26 312 198 Parking System 8,761 6,294 1,208 981 1,480 1,119 Harborview Center 11,640 12,184 (726) (728) 1,388 (836) Total All Enterprise Funds $ 333,994 $ 328,279 $ 9,940 $ 10,151 $ 9,250 $ 4,916 Net income for all of the Enterprise Funds reflects the impact of nonoperating revenues and expenses. Included in nonoperating revenues is unrealized interest income. Recognition of this income /gain is required by governmental accounting standards. Due to a significant fiscal 2001 decrease in interest rates, all Enterprise funds reflected a significant increase in unrealized interest earnings. However, due to the City's intent and past practice of holding investments until maturity, we consider this to be a "paper" gain only and misleading for the analysis of operations. For that reason we are analyzing Operating Income (Loss) rather than Net Income, as follows. The Water and Sewer Utility System operating income decreased from $3,822,976 for fiscal 2000 to $3,307,499 for fiscal 2001, despite a 2.8% increase in operating revenues. The decrease in operating income was due to a 4.8% increase in operating expenses, primarily in the Personal Services and Professional Fees expense categories. Operating income for the Gas Utility Fund increased from $3,396,737 for fiscal 2000 to $4,124,684 for fiscal 2001. This 21.4% increase in operating income was due to a 43.6% increase in operating revenues, from $21,042,436 in fiscal 2000 to $30,223,615 in fiscal 2001, partially offset by significant increases in gas inventory costs and repairs and maintenance expenses. The Solid Waste Utility realized an increase in operating income from $1,524,418 in fiscal 2000 to $1,564,064 in fiscal 2001. This 2.6% increase in operating income was primarily due to increased Service Charges (roll-off) to Customers partially offset by related increases in Transportation and Operating Materials and Supplies expense categories. Xi Operating income for the Recycling Utility Fund decreased from $557,656 in fiscal 2000 to $174,494 in fiscal 2001. This decrease was caused by the weak markets for recyclable commodities reflected in the Sales to Customers revenue category. The Stormwater Utility Fund recognized a decrease in operating income from $569,516 in fiscal 2000 to $358,179 in fiscal 2001, despite an increase in operating revenues from $4,805,417 in fiscal 2000 to $5,041,822 in fiscal 2001. The decrease in operating results was primarily due to an increase in Personal Services expenses from $1,218,229 in fiscal 2000 to $1,504,608 in fiscal 2001, along with increases in the Transportation and Miscellaneous Expense categories. Operating income for the Yacht Basin and Marina Fund decreased from $26,486 in fiscal 2000 to an operating deficit of ($70,889) in fiscal 2001, despite an increase in operating revenues from $2,577,830 in fiscal 2000 to $2,813,147 in fiscal 2001. The improved operating revenues were negated by an increase in Personal Services from $600,120 in fiscal 2000 to $727,692 in fiscal 2001, along with increases in the Purchases for Resale, Operating Materials, and Depreciation expense categories. The Parking System Fund realized an increase in operating income from $980,722 in fiscal 2000 to $1,207,739 in 2001, due to a 13.3% increase in operating revenues, partially offset by related increases in operating expenses. Operating results for the Harborview Center Enterprise Fund remained relatively constant with operating deficits of ($727,674) and ($725,596) for fiscal 2000 and 2001, respectively. Net income for the Harborview Center improved dramatically from a deficit of ($835,482) in fiscal 2000 to a gain of $1,387,881 for fiscal 2001, due to an operating transfer subsidy from the Central Insurance Fund of $2,200,000 during fiscal 2001. Fiscal 2001 represented the fifth full year of operation for the Harborview Convention Center. Employee Retirement Systems The Employees' Pension Plan and the Firemen's Pension Plan are self - administered by the City. City contributions for the year were $4,255,484 to the Employees' Plan and $1,098,990 to the Firemen's Plan, and were in accordance with actuarially determined funding requirements. In addition, supplemental pensions exist for certified Police Officers and Firefighters under the provisions of Florida Statutes Sections 175 and 185. These plans are funded solely from excise taxes on certain insurance premiums covering property in Clearwater. The excise taxes are collected by the state and remitted to the City. Both plans require benefits to be adjusted to equal fund assets provided by the defined contributions. xii 1 1 1 1 1 t 1 t 1 1 1 1 1 1 t 1 1 1 1 Debt Administration At September 30, 2001, the City had total outstanding long -term debt of approximately $179.3 million. This debt included notes, mortgages, and contracts of $14.1 million, and revenue bonds of $162.5 million. The City had no general obligation debt outstanding during the fiscal year ended September 30, 2001. For debt obligations existing as of September 30, 2001, Clearwater's current ratings from national rating agencies are as follows: Standard Moody's and Poor's Investors Corporation Service Public Service Tax & Bridge Revenue Bonds Series 1985 (MBIA Insured) AAA Aaa Improvement Revenue Bonds Series 1995 (MBIA Insured) AAA Aaa Stormwater System Revenue Bonds Series 1999 (MBIA Insured) AAA Aaa Water and Sewer Revenue Bonds Series 1993 (AMBAC Insured) AAA Aaa Water and Sewer Refunding Revenue Bonds Series 1998 (FGIC Insured) AAA Aaa Gas System Revenue Bonds Series 1996A (AMBAC Insured) AAA Aaa Gas System Revenue Bonds Series 1997A&B (MBIA Insured) n /a* Aaa Gas System Revenue Bonds Series 1998 (AMBAC Insured) n /a* Aaa Infrastructure Sales Tax Revenue Bonds Series 2001 (FSA Insured) AAA Aaa * Ratings for the Gas System Revenue Bonds Series 1997A&B and Series 1998 were obtained from Moody's (as indicated) and Fitch IBCA rating service. Fitch IBCA assigned a rating of AAA to the Gas System 1997A &B and the 1998 issues. The computation of the legal debt margin imposed by City Charter (Table IX of the Statistical Section of this report) indicates a low proportion of indebtedness at September 30, 2001, in relation to the debt limitation based on property values at January 1, 2000. Table XI of the Statistical Section demonstrates that coverages for each of the City's revenue bonds are adequate. The City currently has no general obligation debt outstanding as indicated by Table VII of the Statistical Section. Cash Management As more completely described in Note (1C), the City employs a consolidated cash pool to facilitate short term investment of liquid assets for all City funds. The City believes that a conservative investment philosophy best serves the residents of Clearwater, and that the return of the investment principal is more important than the return on the principal. However, the City attempts to maximize the return, while maintaining a conservative philosophy, via accurate cash flow forecasting and competitive selection of investments. The cash pool earned an average rate of return of 6.18% on its investments during fiscal year 2001. Risk Management As stated in Note (1H), the City is self insured within certain parameters for losses arising from claims for general liability, auto liability, police professional liability, public official's liability, property damage, and workers' compensation. The transactions relating to the self insurance program are accounted for in the Central Insurance Fund, and are reported as an Internal Service Fund. The Central Insurance Fund recognized a net income of $70,472 for fiscal 2001 and total fund equity equaled $14,547,959 as of September 30, 2001. The City is not self - insured with respect to major medical coverage. Management believes that the amounts showing as claims payable and the unreserved retained earnings are adequate to cover all reasonable projected losses arising from events occurring on or prior to September 30, 2001. Independent Audit As required by Section 2.01(c)3 of the City Charter, by state law, and by various covenants relating to debt and pension obligations of the City, all funds and account groups of the City have been audited by independent accountants. The reports of Grant Thornton LLP. (pages 1-4 of this report) contain their opinion attesting to the fairness of the applicable financial statements included in this report, in conformity with accounting principles generally accepted in the United States of America. Awards The City has received the Certificate of Achievement for Excellence in Financial Reporting for the Comprehensive Annual Financial Report dated September 30, 2000, making twenty -two consecutive years that the City has received this prestigious recognition. This award is presented by the Government Finance Officers Association (GFOA) and is valid for a period of one year only. We believe this year's report continues to meet the applicable requirements and will again qualify for this special recognition. In addition, the City has received the GFOA's award for Distinguished Budget Presentation for the fiscal year 2001 Budget document, making the fifteenth consecutive year that this award has been received. In order to qualify, the City's Budget document was judged to be proficient in several categories including policy documentation, financial planning, organization, and communication. xiv Acknowledgement We wish to thank the many members of the Citywide Annual Financial Reporting (CAFR) team, which is composed of individuals in the Finance Department and other financial staff throughout the City, for their professionalism and dedication in producing this report. In addition, we thank the Graphic Communications Division for the professional printing of this report Sincere appreciation is also extended to the City's external auditors, Grant Thornton, LLP, for their advice and assistance in the preparation of this report. Finally, we would like to thank the City Commission for their interest, continued support, and leadership in planning and conducting the financial operations of the City in a progressive and responsible manner. Sincerely, 44.4.x.,--IX illiam B. Horne, II City Manager tifyytAlcuuct K. AnortoJ Margaret L. Simmons, CPA Finance Director CITY OF CLEARWATER ORGANIZATIONAL CHART City Auditor Fire Department Police Department Solid Waste Recycling City Commission City Manager City Attorney Assistant City Manager Office of Management & Budget City Clerks Office Customer Service Financial Services Gas System General Support Services Library Human Relations Marine & Aviation Human Resources Parks & Recreation Information Technology Public Communications & Marketing Public Works Administration Assistant City Manager Economic Development Planning Services Development Services Engineering Public Services Public Utilities sa as age imy as MI ea as imer ow me am gm ION OP FINANCIAL SECTION t t 1 1 1 1 1 1 1 1 1 1 Accountants and Management Consultants Grant Thornton T Report of Independent Certified Public Accountants Honorable Mayor - Commissioner, City Commissioners and City Manager City of Clearwater, Florida We have audited the accompanying general purpose financial statements and the combining, individual fund and account group financial statements of the City of Clearwater, Florida ( "City"), as of and for the year ended September 30, 2001, as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these financial statements based on our audit. We did not audit the financial statements of the Clearwater Downtown Development Board, a component unit. Those financial statements were audited by other auditors whose report thereon has been furnished to us, and in our opinion, insofar as it relates to the data included for the Clearwater Downtown Development Board, is based solely on the report of the other auditors. The financial statements of the City as of and for the year ended September 30, 2000, were audited by other auditors whose reported dated February 23, 2001, expressed an unqualified opinion on those statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As described in Note 6 to the financial statements, the City adopted the provisions of Governmental Accounting Standards Board Statement No. 33, Accounting and Financial Reporting forNonexchange Transactions in 2001. In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Clearwater, Florida as of September 30, 2001, and the results of its operations and the cash flows of its proprietary fund types for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the combining, individual fund and account group financial statements referred to above present fairly in all material respects, the financial position of each individual fund and account group of the City of Clearwater, Florida as of September 30, 2001, and the results of operations of such funds and the cash flows of the individual proprietary funds for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Suite 3850 101 E. Kennedy Blvd Tampa, FL 33602 -5154 813.229.7201 813.223.3015 W www.grantthornton.com grant Thornton LLP S Member of Grant Thornton International 1 Our audit was made for the purpose of forming an opinion on the general purpose, combining, individual fund and account group financial statements of the City taken as a whole. The accompanying schedule of expenditures of federal awards and state financial assistance on pages 149 through 152, as required by OMB Circular A -133, and Chapter 10.550 of the Rules of the Auditor General, is presented for purposes of additional analysis and is not a required part of the general purpose, combining, individual fund and account group financial statements of the City. Such information has been subjected to the auditing procedures applied in the audit of the general purpose, combining, individual fund and account group financial statements and, in our opinion, is fairly stated in all material respects in relation to the general purpose, combining, individual fund and account group financial statements, taken as a whole. The schedule of funding progress and the schedule of employer contributions on pages 47 through 49 are not a required part of the general purpose financial statements, but are supplementary information required by the Governmental Accounting Standards Board. We have applied to the schedule of funding progress and the schedule of employer contributions certain limited procedures prescribed by professional standards, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the schedule. However, we did not audit this information and express no opinion on it. The accompanying financial information presented as supplementary information on pages 109 through 118 and the statistical section on pages 120 through 144 is presented for purposes of additional analysis and is not a required part of the financial statements of the City. Such information has not been subjected to the auditing procedures applied in the audit of the general purpose, combining, individual fund and account group financial statements, and, accordingly we express no opinion on it. In accordance with Government Accounting Standards, we have also issued our report dated February 14, 2002, on our consideration of the City's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. G- iCAK t --11\Cl1V�t'6� LL' Tampa, Florida February 14, 2002 2 t r 1 1 1 1 1 1 1 1 1 1 1 Grant Thornton Accountants and Management Consultants REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GO VERNMENT A UDITING STANDARDS Honorable Mayor — Commissioner, City Commissioners and City Manager City of Clearwater, Florida We have audited the general purpose financial statements and the combining, individual fund and account group financial statements of the City of Clearwater, Florida ( "City ") as of and for the year ended September 30, 2001, and have issued our report thereon dated February 14, 2002. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contain in Government Auditing Standards, issued by the Comptroller General of the United States. We did not audit the financial statements of the Clearwater Downtown Development Board. Those financial statements were audited by other auditors, whose report has been furnished to us, and, in our opinion, insofar as it relates to data included for the Clearwater Downtown Development Board, is based on the report of the other auditor. As part of obtaining reasonable assurance about whether the City's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations contracts and grants, noncompliance with which could have a direct and material effect on the determination of the City's financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. Internal Control Over Financial Reporting In planning and performing our audit, we considered the City's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the City's financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statement being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operations that we consider to be material weaknesses. However, we noted other matters involving the internal control over financial reporting that we have reported to management in a separate letter dated February 14, 2002. Suite 3850 101 E. Kennedy Blvd ITampa, FL 33602 -5154 T 813.229.7201 F 813.223.3015 W www.grantthornton.com Grant Thornton LLP US Member of Grant Thornton International 3 This report is intended solely for the information of the Mayor - Commissioner, City Commissioners, City Manager, management, federal awarding agencies, pass- through entities, and State of Florida program officials and is not intended to be and should not be used by anyone other than these specified parties. Gxckva- LLP Tampa, Florida February 14, 2002 4 GENERAL PURPOSE FINANCIAL STATEMENTS 5 CITY OF CLEARWATER. FLORIDA COMBINED BALANCE SHEET - ALL FUND TYPES, ACCOUNT GROUPS, AND DISCRETELY PRESENTED COMPONENT UNIT SEPTEMBER 30.2001 WITH COMPARATIVE TOTALS FOR 2000 Governmental Fund Types Special Debt Capital General Revenue Service Projects Assets and Other Debits Assets: Cash on Hand and in Banks $ 20,925 100 Equity in Pooled Cash and Investments 10,773,512 12,456,989 1,652,215 67,103,931 Investments Receivables (Net Where Applicable, of Allowances for Estimated Uncollectible Amounts): Accounts and Contracts 313,371 Mortgages, Notes and Other Loans 3,370,799 Other Taxes 2,169,593 Improvement Liens 104,899 Interest and Dividends Rehabilitation Advances 51,001 Property Taxes 28,070,874 1,881,395 Other 102,316 Due from Other Funds Due from Other Funds (Deficit in Pooled Cash) 265,481 Due from Other Governmental Entities 986,337 2,069,523 Inventories, at Cost 6,004 Prepaid Expenses/Expenditures and Other Assets 13,101 Restricted Assets: Equity in Pooled Cash and Investments Investments Interest Receivable Due from Other Funds Due from Other Governmental Entities Advances to Other Funds Deferred Charges Net Pension Asset Property Held for Resale 1,171,328 Property, Plant and Equipment (Net of Accumulated Depreciation) Other Debits; Amount Available in Debt Service Funds Amount to be Provided for Retirement of General Long -Term Debt Amount to be Provided for Compensated Absences Total assets and other debits $ 42,353,717 21,103,451 1,652,215 67,474,311 See accompanying notes to Financial Statements. 6 1 I Proprietary Fund Types Internal Enterprise Service 24,217 2,050 17,547,173 24,409,072 I 8,408,656 77 I I 14,478,276 1,222,982 515,133 969,845 75,666 4,664 1,116,196 35,633,914 3,058,741 86,196 5,793 2,149,511 455,000 2,668,867 5,011,620 3,631,252 1,278,061 242,019,480 15,567,687 I 333,993,678 46,346,451 1 I I 1 Page 1 of 2 Component Fiduciary Primary Unit Fund Type Account Groups Government Clearwater Reporting Entity General General Totals Downtown Totals Trust and Fixed Long -Term (Memorandum Development (Memorandum Only) Agency Assets Debt Only) Board 2001 2000 15,594 4,890,601 429,353,416 62,886 62,886 72,740 138,833,493 98,648 138,932,141 94,381,385 429,353,416 429,353,416 526,529,519 8,722,104 8,722,104 8,507,049 4,493,208 7,864,007 7,864,007 7,367,003 2,169,593 2,169,593 2,314,185 104,899 104,899 127,362 2,295,165 2,295,165 2,295,165 2,302,415 60,731 111,732 111,732 128,625 29,952,269 29,952,269 27,449,051 39,392 141,708 141,708 232,442 15,701 ,258 15,701 ,258 30,305, 113 265,481 265,481 17,560,428 3,570,993 3,570,993 3,270,809 1,051,515 1,051,515 1,227,971 1,133,961 1,133,961 819,139 35,633,914 35,633,914 33,862,043 3,058,741 3,058,741 2,990,334 91,989 91,989 91,989 2,149,511 2,149,511 3,507,075 455,000 455,000 70,073 2,668,867 2,668,867 3,014,545 5,011,620 5,011,620 5,386,021 4,909,313 4,909,313 4,028,237 84,701 1,256,029 1,256,029 1,256,029 206,486,402 464 ,073,569 464,073,569 438,902,931 1,540,439 1,540,439 1,540,439 338,155 59,606,119 59,606,119 102,027 59,708,146 13,429,173 5,451,559 5,451,559 5,451,559 5,149,725 441,232,808 206,486,402 66,598,117 1,227,241,150 200,675 1,227,441,825 1,234,621,566 7 (Continued) CITY OF CLEARWATER. FLORIDA COMBINED BALANCE SHEET - ALL FUND TYPES, ACCOUNT GROUPS, AND DISCRETELY PRESENTED COMPONENT UNIT, CONTINUED SEPTEMBER 30.2001 WITH COMPARATIVE TOTALS FOR 2000 Governmental Fund Types Proprietary Fund Types Special Debt Capital Internal General Revenue Service Pro ects Enterprise Service Liabilities, Equity and Other Credits Liabilities; Accounts and Contracts Payable $ 113,390 84,336 1,571 1,455,758 3,311,034 844,300 Accrued Payroll 878,359 28,564 772,457 112,939 Accrued Compensated Absences 878,817 481,538 Accrued Interest Payable 110,205 155,394 Claims Payable 9,337,296 Due to Other Funds 24,925 103,892 17,283,479 138,473 300,000 Due to Other Funds (Deficit in Pooled Cash) 138,827 Due to Other Governmental Entities 8,149 510,908 Deposits 4,192 137,501 Construction Escrows 222,897 Deferred Revenue 28,380,221 1,983,508 784,478 Deferred Assessment Liens 104,899 Other Miscellaneous Payables Payable from Restricted Assets 10,773,540 Advances from Other Funds 74,775 926,596 1,098,426 571,070 Revenue Bonds Payable 105,970,250 Mortgages, Notes, Loan Pool Agreements and Acquisition Contracts Payable 1,644,685 7,683,929 Total Liabilities 29,482,011 3,999,328 111,776 18,844,136 125 640 853 19,331,072 Equity and Other Credits: Investment in General Fixed Assets Contributed Capital 115,507,501 4,539,428 Retained Earnings: Reserved for. Revenue Bond Requirements 22,682,243 Employees' Pension Benefits 3,631,252 1,278,081 Unreserved 66,531,829 21,197,890 Fund Balances: Reserved for: Prepaid Expenditures 13,101 Encumbrances 1,052,477 2,313 6,070,136 Debt Service Requirements 892,527 Advances to Other Funds Noncurrent Notes Receivable 10,000 Employees' Pension Benefits Special Programs 2,314,038 Unreserved: Designated for Special Programs 7,401,349 Designated for Debt Service 647,912 Designated for Capital Projects Appropriations 42,560,039 Undesignated 11,808,128 7,378,425 Total Retained Earnings/ Fund Balances 12,871,706 17,104,123 1,540,439 48,630,175 92,845,324 22,475,951 Total Equity and Other Credits 12,871,706 17,104,123 1,540,439 48,830,175 208,352,825 27,015,379 See accompanying notes to Financial Statements. $ 42,353,717 21,103,451 1,652,215 87,474,311 333,993,878 48,346,451 8 Fiduciary Fund Type Account Groups General General Trust and Fixed Long Term Agency Assets Debt 448,314 126,854 37,502 129,404 25,475 143,034 910.583 435,933,980 4.388.285 206,486,402 440,322,225 440 , 322, 225 206.488.402 5,451,559 58,481,988 4,684,570 66.598.117 441.232.808 206.486.402 68.598.117 Primary Government Totals (Memorandum Only) 6,258,703 1,790,319 6,809,714 265,599 9,337,296 17,850,769 285,481 519,057 179,195 352,301 31,153,880 104,899 143,034 10,773,540 2,668,867 182,452,238 13,993,184 284,917,876 208,488,402 120,046,929 22,682,243 4,909,313 87,729,719 13,101 7,124,926 892,527 10,000 435,933,960 2,314,036 7,401,349 647,912 42,580,039 23,570,818 635,789,943 962,323,274 1.227.241,150 9 Component Unit Clearwater Downtown Development Board 102,027 102.027 98,848 98,848 98,648 200.675 Page 2 of 2 Reporting Entity Totals (Memorandum Only) 2001 2000 6,258,703 5,486,882 1,790,319 1,305,794 6,809,714 6,885,607 285,599 9,337,296 10,883,393 17,850,789 33,812,188 265,481 17,560,428 519,057 289,807 179,195 180,023 352,301 148,502 31,153,680 28,022,942 104,899 127,382 143,034 171,310 10,773,540 8,756,878 2,688,867 3,014,545 162,452,238 119,728,708 14,095, 211 10,394,530 285,019,903 246,746,899 206,488,402 192,490,497 120,048,929 115,343,981 22,882,243 20,994,891 4,909,313 4,028,237 87,729,719 79,139,257 13,101 7,124,926 892,527 10,000 435,933,980 2,314,038 7,401,349 647,912 42,560,039 23.689.488 635.888,591 982.421.922 1.227.441.825 14,570 6,515,193 338,155 86,291 12,500 528,325,086 2,058,184 9,954,357 19,691,129 8.882.559 680,040,389 987,874,867 1.234.621.566 CITY OF CLEAR WATER.FLORIDA COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES, EXPENDABLE TRUST FUND AND DISCRETELY PRESENTED COMPONENT UNIT FISCAL YEAR ENDED SEPTEMBER 30.2001 WITH COMPARATIVE TOTALS FOR 2000 Governmental Funds General Special Debt Capital Revenue Service Projects Revenues: Taxes $ 50,160,514 1,738,590 Licenses, Permits, and Fees 3,495,192 913,445 Intergovernmental Revenues 13,797,228 13,566,826 634,465 5,100,000 Charges for Services: Administrative Charges to Other Funds 7,613,256 Other Charges 1,765,411 Fines, Forfeitures, and Penalties 1,550,505 464,562 Miscellaneous Revenues 2,314,275 4,516,049 48,866 95,850 Total Revenues 80,696,381 21,199,472 683,331 5,195,850 Expenditures: Current: General Government 8,806,187 679,901 Public Safety 40,503,177 1,938,868 Physical Environment 1,849,476 372,503 Transportation 5,401,902 Economic Environment 1,163,027 1,019,258 Human Services 570,849 128,850 Culture and Recreation 17,781,629 519,981 Capital Outlay 863,432 41,813,214 Debt Service: Principal Retirement 1,468,307 Interest and Fiscal Charges 788,891 Total Expenditures 76,076,247 5,522,793 2,257,198 41,813,214 Excess (Deficiency) of Revenues Over Expenditures 4,620,134 15,676,679 (1,573,867) (36,617,364 Other Financing Sources (Uses): Proceeds of Indebtedness 49,379,282 Operating Transfers In 4,040,154 898,775 2,776,151 19,765,391 Operating Transfers In - Primary Government Operating Transfers In - Component Unit 89,044 Operating Transfers Out (4,994,823) (16,592,978) (140,244) Operating Transfers Out - Primary Government Operating Transfers Out - Component Unit (39,851) (954,669) (15,645,010) 2,776,151 69,004,429 Excess (Deficiency) of Revenues and Other Financing Sources Over Expenditures and Other Financing Uses 3,665,465 31,669 1,202,284 32,387,065 Fund Balances, Beginning of Year 9,206,241 17,006,403 338,155 16,243,110 Residual Equity Transfers In 66,051 Fund Balances, End of Year $ 12,871,706 17,104,123 1,540,439 48,630,175 See accompanying notes to Financial Statements. 10 Component Primary Unit Fiduciary Government Clearwater Reporting Entity Fund Type Totals Downtown Totals Expendable (Memorandum Development (Memorandum Only) Trust Only) Board 2001 2000 51,899,104 144,895 52,043,999 49,205,277 4,408,637 4,408,637 5,432,799 6,887 33,105,406 33,105,406 26,073,855 7,613,256 7,613,256 6,971,733 1,765,411 1,765,411 1,504,268 2,015,067 2,015,067 1,921,448 36,020 7,011,060 17,262 7,028,322 3,996,658 42,907 107,817,941 162,157 107,980,098 95,106,038 9,486,088 42,442,045 2,221,979 5,401,902 203,641 2,385,926 699,699 18,301,610 42,676,646 1,468,307 788,891 80,589 9,486,088 9,126,217 42,442,045 41,362,225 2,221,979 2,245,047 5,401,902 5,091,703 2,466,515 2,319,156 699,699 633,960 18,301,610 16,932,942 42,676,646 16,885,678 1,468,307 1,375,978 788,891 765,268 203,641 125,873,093 80,589 125,953,682 96,738,174 160,734 (18,055,152) 81,568 (17,973,584) (1,632,136) 49,379,282 49,379,282 2,149,140 27,480,471 27,480,471 21,722,873 39,851 39,851 31,174 89,044 89,044 49,022 (143,737) (21,871,782) (21,871,782) (18,422,379) (89,044) (89,044) (49,022) (39,851) (39,851) (31,174) (143,737) 55,037,164 (49,193) 54,987,971 5,449,634 (304,471) 36,982,012 32,375 37,014,387 3,817,498 4,692,736 47,486,645 66,273 47,552,918 43,423,445 66,051 66,051 311,975 4,388,265 84,534,708 98,648 84,633,356 47,552,918 11 CITY OF CLEARWATER, FLORIDA COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL (NON -GAAP BUDGETARY BASIS) - GENERAL AND SPECIAL REVENUE FUND TYPES FISCAL YEAR ENDED SEPTEMBER 30.2001 Revenues: Taxes Licenses, Permits, and Fees Intergovernmental Charges for Services: Administrative Charges to Other Funds Other Charges Fines, Forfeitures, and Penalties Miscellaneous Revenues Total Revenues Expenditures: Current: City Commission City Manager Human Relations Legal City Clerk Public Communications and Marketing Finance Human Resources Non - Departmental Police Fire Public Works - Engineering Public Works - Transportation and Drainage Parks and Recreation Library Planning & Development Services Neighborhood Housing Services Marine Economic Development Internal Audit Office of Management & Budget Grant Writing Total Expenditures (Budgetary Basis) Excess (Deficiency) of Revenues Over Expenditures (Budgetary Basis) Other Financing Sources (Uses): Operating Transfers In Operating Transfers In - Component Unit (DDB) Operating Transfers Out Operating Transfers Out - Component Unit (DDB) Excess of Revenues and Other Financing Sources Over Expenditures and Other Financing Uses (Budgetary Basis) Excess of Revenues and Other Financing Sources Over Expenditures and Other Financing Uses for Non- Budgeted Funds Encumbered Purchase Orders, Beginning of Year Encumbered Purchase Orders, End of Year Excess (Deficiency) of Revenues and Other Financing Sources Over Expenditures and other Financing Uses (GAAP Basis) Fund Balances, Beginning of Year Residual Equity Transfers In Fund Balances, End of Year See Note 1G See accompanying notes to Financial Statements. 12 General Fund* Budget Actual $ 50,126,170 50,160,514 3,517,120 3,495,192 13,850,749 13,797,228 Variance Favorable Unfavorable 34,344 (21,928) (53,521) 7,582,590 7,613,256 30,666 1,761,330 1,765,411 4,081 1,565,160 1,550,505 (14,655) 1,694,235 2,314,275 620,040 80,097,354_ 80,696,381 599,027 219,170 699,850 577,578 1,236,310 993,110 817,900 1,811,040 1,039,990 1,007,330 25,547,824 14,055,640 2,117,240 5,296,310 13,146,360 4,440,488 3,632,580 624,510 483,210 718,410 138,200 258,850 66,180 78,928,080 1,169,274 4,271,495 (5,014,950) (743,455) 425,819 205,578 569,876 573,373 1,137,040 901,300 707,801 1,677,123 1,049,506 947,254 24,999,095 13,197,724 2,093,013 5,207,449 12,883,016 4,322,842 3,482,449 559,494 487,027 593,340 128,998 257,652 47,260 76,028,210 4,668,171 4,040,154 (4,994,823) 425,819 9,206,241 13,592 129,974 4,205 99,270 91,810 110,099 133,917 (9,516) 60,076 548,729 857,916 24,227 88,861 263,344 117,646 150,131 65,016 (3,817) 125,070 9,202 1,198 18,920 2.899.870 3,498,897 (231,341) 20,127 (954,669) (211,214) 3,713,502 3,287,683 (1,100,514) 1.052.477 (1,100,514) 1.052.477 3,665,465 3,239,646 9,206,241 $ 9,632,060 12,871,706 3,239,646 1 r 1 t 1 1 Totals Special Revenue Fund Types* (Memorandum Only) Variance Variance - Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unf avorable 1,728,820 1,738,590 9,770 51,854,990 51,899,104 44,114 887,520 913,445 25,925 4,404,640 4,408,637 3,997 9,774,494 9,528,154 (246,340) 23,625,243 23,325,382 (299,861) 7,582,590 7,613,256 30,666 1,761,330 1,765,411 4,081 1,565,160 1,550,505 (14,655) 821,812 2,547,095 1,725,283 2,516,047 4,861,370 2,345,323 13,212,646 14,727,284 _ 1514,638 93,310,000 95,423,665 2,113,665 219,170 205,578 13,592 699,850 569,876 129,974 577,578 573,373 4,205 1,236,310 1,137,040 99,270 993,110 901,300 91,810 817,900 707,801 110,099 80 (80) 1,811,040 1,677,203 133,837 1,039,990 1,049,506 (9,516) 1,007,330 947,254 60,076 25,547,824 24,999,095 548,729 14,055,640 13,197,724 857,916 2,117,240 2,093,013 24,227 5,296,310 5,207,449 88,861 13,146,360 12,883,016 263,344 4,440,488 4,322,842 117,646 3,632,580 3,482,449 150,131 345,448 194,226 151,222 969,958 753,720 216,238 483,210 487,027 (3,817) 718,410 593,340 125,070 138,200 128,998 9,202 258,850 257,652 1,198 66,180 47,260 18,920 345,448 194,306 151,142 79,273,528 76,222,516 3,051,012 12,867,198 14,532,978 1,665,780 14,036,472 19,201,149 5,164,677 320,913 320,914 1 4,592,408 4,361,068 (231,340) 89,698 89,044 (654) 89,698 89,044 (654) (9,682,325) (15,861,580) (6,179,255) (14,697,275) (20,856,403) (6,159,128) (39,850) (39,851) (1) (39,850) (39,851) • (1) (9,311,564) (15,491,473) (6,179,909) (10,055,019) (16,446,142) (6,391,123) 3,555,634 (958,495) (4,514,129) 3,981,463 2,755,007 (1,226,446) 990,164 990,164 990,164 (1,100,514) 1.052.477 990,164 (1,100,514) 1.052.477 3,555,634 31,669 (3,523,965) 3,981,453 3,697,134 (284,319) 17,006,403 17,006,403 26,212,644 26,212,644 66,051 66,051 66,051 66,051 20,562,037 17,104,123 (3,4571914) 30,194,097 29s 975,829 (218,268 13 CITY OF CLEARWATER. FLORIDA COMBINED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN RETAINED EARNINGS - ALL PROPRIETARY FUND TYPES FISCAL YEAR ENDED SEPTEMBER 30.2001 WITH COMPARATIVE TOTALS FOR 2000 Operating Revenues: Sales to Customers Service Charges to Customers User Charges to Customers Billings to Departments Rentals Operating Expenses: Personal Services Purchases for Resale Operating Materials and Supplies Transportation Utility Service Solid Waste Dumping Charges Depreciation Interfund Administrative Charges Other Current Charges Operating Income Nonoperating Revenues (Expenses): Earnings on Investments Interest Expense and Fiscal Charges Amortization of Bond Discount and Issue Costs Gain (Loss) on Exchange of Assets Losses from Writedowns and Replacements of Fixed Assets Recycling Program Incentive Grant Other Income Before Operating Transfers Operating Transfers In Operating Transfers Out Net Income Retained Earnings, Beginning of Year Residual Equity Transfers In Residual Equity Transfers Out Retained Earnings, End of Year See accompanying notes to Financial Statements. Proprietary Fund Types Entsrprlse $ 71,521,564 17,463,925 5,436,368 3,056,672 97,478,529 18,591,551 25,101,145 2,518,983 4,690,589 2,008,528 4,553,562 8,723,681 10,264,720 11,085,596 87,538,355 9,940,174 6,185,296 (5,511,550) (402,976) (6,479) (4,311) 141,235 802,811 1,204,026 11,144,200 2,239,486 (4,133,742) (1,894,256) 9,249,944 83,870,572 58,148 (333,340) $ 92845,324 14 Internal Service 28,907,080 28.907.080 6,986,717 2,120,987 420,009 150,679 445,472 3,481,305 219,080 11,975,292 25.799.541 3.107.539 2,651,211 (382,479) 374,760 147,541 2.791.033 5,898,572 Totals (Memorandum Only) 2001 2000 71,521,564 17,463,925 5,436,368 28,907,080 3,056,672 126.385.609 61,622,034 16,313,751 4,990,061 27,652,555 2,880,505 113.458.906 25,578,268 27,222,132 2,938,992 4,841,268 2,454,000 4,553,562 12,204,986 10,483,800 23,060,888 113 337 896 23,743,082 21,062,755 2,920,347 4,264,766 2,208,997 4,455,706 11,913,719 9,779,900 21,448,810 101 798 082 13,047.713 11,660.824 8,836,507 (5,894,029) (402,976) 368,281 (4,311) 141,235 950 352 3.995.059 5,432,111 (6,054,403) (401,245) 176,651 (5,716) 113,332 669 473 (69,797) 17 042 772 11.591.027 1,180,567 3,420,053 318,865 (4,895,000) (9,028,742) (3,619,359) (3,714,433) (5,608,689) (3,300,494) 2,184,139 11,434,083 8,290,533 20,291,812 104,162,384 95,871,852 58,148 (333,340) 22,475,951 115,321,275 104,162,385 1 1 1 1 1 1 A 1 CITY OF CLEARWATER. FLORIDA COMBINED STATEMENT OF CHANGES IN PLAN NET ASSETS PENSION TRUST FUNDS FISCAL YEAR ENDED SEPTEMBER 30.2001 WITH COMPARATIVE TOTALS FOR 2000 2001 2000 Additions Contributions: Contributions from Employer $ 5,354,474 5,466,579 Contributions from Employees 4,855,064 4,868,278 State of Florida 1,211,644 1,392,513 Total Contributions 11,421,182 11,727370 Investment Income (Loss): Net Appreciation (Depreciation) in Fair Value of Investments (101,095,884) 63,322,299 Interest 12,041,584 12,365,395 Dividends 2,170,157 2,249,697 (86,884,143) 77,937,391 Less Investment Expenses: Investment Management / Custodian Fees 1,866,947 2,065,152 Net Investment Income (Loss) Total Additions (Reductions) Deductions (88,751,090) 75,872,239 (77,329,908) 87,599,609 Benefits and Withdrawal Payments: Benefits 14,311,372 12,540,926 Withdrawal Payments 551,943 515,433 Total Benefits and Withdrawal Payments 14,863,315 13,056,359 Income ( Loss) before Administrative Expenses (92,193,223) 74,543,250 Administrative Expenses 197,903 87,113 Net Increase (Decrease) (92,391,126) 74,456,137 Net Assets Held In Trust for Pension Benefits: Beginning of Year 528,325,086 453,868,949 End of Year See accompanying notes to Financial Statements. 15 $ 435 933 960 528,325,086 CITY OF CLEARWATER. FLORIDA COMBINED STATEMENT OF CASH FLOWS - ALL PROPRIETARY FUND TYPES FISCAL YEAR ENDED SEPTEMBER 30.2001 WITH COMPARATIVE TOTAL FIGURES FOR 2000 Proprietary Fund Types Totals Page 1 of 2 (Memorandum Only) Internal Enterprise Service 2001 2000 Cash Flows from Operating Activities: Cash Received from Customers $ 97,291,922 97,291,922 85,104,451 Cash Received from Other Funds 28,907,080 28,907,080 27,652,555 Cash Payments to Suppliers (41,524,954) (15,979,801) (57,504,755) (48,528,566) Cash Payments to Employees (19,623,756) (7,242,105) (26,865,861) (27,290,377) Cash Payments to Other Funds (17,392,437) (1,066,998) (18,459,435) (16,815,536) Other Revenues 802,811 147,540 950,351 669,473 Net Cash Provided by Operating Activities 19,553,586 4,765,716 24,319,302 20,792,000 Cash Flows from Noncapital Financing Activities: Operating Transfers In 2,239,486 1,180,567 3,420,053 319,259 Operating Transfers Out (4,257,415) (4,895,000) (9,152,415) (3,619,359) Grant Revenue 1,051,308 1,051,308 113,332 Interest Paid (85,010) (85,010) (108,027) Receipt of Cash on Loans to/from Other Funds 17,573,165 138,561 17,711,726 9,270,660 Payment of Cash on Loans to/from Other Funds (9,955,199) (846,521) (10,601,720) (7,218,713) Net Cash Provided (Used) by Noncapital Financing Activities 6,568,335 (4,222,393) 2,343,942 (1,242,848) Cash Flows from Capital and Related Financing Activities: Principal Payments on Debt (5,979,470) (493,359) (6,472,829) (6,082,309) Interest Paid (3,162,180) (382,479) (3,544,659) (3,841,988) Acquisition of Fixed Assets (16,654,889) (4,307,311) (20,962,200) (15,471,073) Sale of Fixed Assets 81,166 1,978,274 2,059,440 659,102 Proceeds from Issuance of Debt 1,250,259 1,250,259 7,775,392 Payment of Bond Issue Costs (119,656) Retum of Contributed Capital (104,387) (104,387) (311,976) Capital Contributed By: Other Funds 934,633 26,326 960,959 Other Governmental Entities 890,950 690,950 455,829 Property Owners 80,188 80,188 106,185 Developers 1,066,276 1,066,276 226,075 Net Cash Used for Capital and Related Financing Activities (21,797,454) (3,178,549) (24,976,003) (16,604,419) Cash Flows from Investing Activities: Proceeds from the Sale and Maturity of Investments 67,625 Purchase of Investment Securities (2,378) Interest on Investments 6,543,324 2,651,212 9,194,536 5,597,237 Net Cash Provided by Investing Activities 6,543,324 2,651,212 9,194,536 5,662,484 Net Increase in Cash and Cash Equivalents 10,885,791 15,986 10,881,777 8,607,217 Cash and Cash Equivalents at Beginning of Year 42,339,513 24,395,136 66,734,649 58,127,432 Cash and Cash Equivalents at End of Year $ 53,205,304 24,411,122 77,616,426 66,734,649 Cash and Cash Equivalents: Cash on Hand and in Banks $ 24,217 2,050 26,267 19,300 Equity in Pooled Cash and Investments 17,547,173 24,409,072 41,956,245 32,853,306 Restricted Equity in Pooled Cash and Investments 35,633,914 35,633,914 33,862,043 Cash and Cash Equivalents at End of Year See accompanying notes to Financial Statements. 16 53,205,304 24,411,122 77,616,428 66,734,649 1 1 1 1 • 1 1 • 1 1 1 t 1 1 1 1 CRY OF CLEARWATER. FLORIDA COMBINED STATEMENT OF CASH FLOWS - ALL PROPRIETARY FUND TYPES YEAR ENDED SEPTEMBER 30.2001 WITH COMPARATIVE TOTAL FIGURES FOR 2000 Reconciliation of Operating Income to Net Cash Provided by Operating Activities: Operating Income Proprietary Fund Types Totals Internal Enterprise Service Page 2 of 2 (Memorandum Only) 2001 2000 $ 9,940,174 3,107,539 13,047,713 11,660,824 Adjustments to Reconcile Operating Income to Net Cash Provided by Operating Activities: Other Revenue from Nonoperating Section of Income Statement 802,811 147,540 950,351 669,473 Depreciation 8,723,681 3,481,305 12,204,986 11,913,719 Non -cash land rental expense 136,128 136,128 Provision for Uncollectble Accounts 382,401 382,401 229,472 Capitalized Labor and Interest (543,730) (543,730) (470,737) Construction in Progress Reclassified as Expense 152,970 152,970 Change in Assets and Liabilities: (increase) in Accounts Receivable (928,047) (51) (928,098) (1,139,791) (Increase) Decrease in Amount Due from Other Governmental Entities (82,980) (82,980) 300,821 (Increase) Decrease in Inventory 127,671 48,562 176,233 (51,995) (Increase) in Prepaid Expenses (158) (316,133) (316,291) (222,692) Increase (Decrease) in Accounts and Contracts Payable 515,362 (1,447,658) (932,296) 904,995 Increase in Deposits 109,173 109,173 137,069 Increase in Deferred Revenue 764,476 764,476 (Increase) in Net Pension Asset (658,298) (222,779) (881,077) (1,828,320) Increase (Decrease) in Accrued PayroU 111,952 (32,609) 79,343 (1,312,838) Total Adjustments 9,613,412 1,658,177 11,271,589 9,131,176 Net Cash Provided by Operating Activities $ 19,553,586 4,765,716 24,319,302 20,792,000 Noncash Investing, Capital and Financing Activities: Change in Fair Value of Investments $ (67,825) Contributed Utilities from Developers 338,172 Contributed Land from Pinellas County Government 922,900 Land Contribution to General Fixed Assets Account Group 79,041 79,041 Contribution of Vehicle from General Fixed Asset Account Group 12,394 12,394 Contribution of Debt Relief from General Long Term Debt Account Group 58,148 58,148 See accompanying notes to Financial Statements. 17 CITY OF CLEARWATER, FLORIDA INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2001 Note 1. Summary of Significant Accounting Policies 20 A. Reporting Entity 20 B. Fund Accounting 20 Govemmental Funds 20 Proprietary Funds 21 Fiduciary Funds 22 Account Groups 22 C. Pooled Cash and Investments 23 D. Inventories 24 E. General Fund Administrative Charges 25 F. Accrued Vacation and Sick Leave 25 G. Budgets and Budgetary Accounting 25 H. Risk Management 26 I. Statements of Cash Flows 27 J. Capitalization of Interest 27 K. Application of FASB Pronouncements to Proprietary Funds 27 L. Comparative Data 27 M. Combined Financial Information 27 N. Use of Estimates 27 Note 2. Long -Term Debt A. Summary of Transactions in Long -Term Debt 28 B. Summary of Debt Service Requirements 28 C. Obligations Under Lease Purchase Agreements 28 D. Long -Term Debt, General Govemment 28 E. Long -Term Debt, Proprietary Funds 29 F. Advance Refunding of Bonds 33 G. Long -Term Debt, Debt Service Funds 33 Note 3. Restricted Assets, Proprietary Funds A. Water and Sewer Utility Fund 34 B. Gas Utility Fund 34 C. Solid Waste Utility Fund 34 D. Stormwater Utility Fund 34 E. Parking System 35 F. Current Liabilities Payable from Restricted Assets 35 Note 4. Retirement Commitments A. Defined Benefit Pension Plans 35 B. Police Supplemental Pension Fund 39 C. Firefighters Supplemental Pension Fund 39 D. 401(a) Defined Contribution Plan 40 E. Deferred Compensation Plan 40 F. Post Retirement Benefits 40 Note 5. Fixed Assets 40 Note 6. Property Taxes 41 18 1 1 1 1 1 1 1 t 1 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2001 Note 7. Segment Information for Enterprise Funds 42 Note 8. Interfund Balances 42 Note 9. Contingencies and Commitments 43 Note 10. Individual Fund Notes A. Water and Sewer Utility Fund 45 Note 11. Fund Deficits and Expenditures in Excess of Appropriations 45 Note 12. Residual Equity Transfers Between Funds 45 Note 13. Contributed Capital - Proprietary Funds 45 Note 14. Pending Litigation 46 Note 15. Conduit Debt 46 Note 16. Subsequent Events 46 Required Supplementary Information - Defined Benefit Pension Plans 47 19 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2001 Note (1) Summary of Significant Accounting Policies The accounting and reporting policies of the City of Clearwater, Florida, "the City", relating to the funds included in the financial statements conform to generally accepted accounting principles for state and local governments. The following represent the more significant accounting and reporting policies of the City: Note (1A) Reporting Entity The City of Clearwater, Florida was incorporated in 1923 by Chapter 9710, Special Laws of Florida, as amended. As required by generally accepted accounting principles, these financial statements present the City of Clearwater (the primary government) and its component units. Component units are included in the reporting entity due to the significance of their operational or financial relationships with the City. The City has adhered to the standards set forth in Statement No. 14 of the Governmental Accounting Standards Board in reporting the primary government (including blended component units), discretely presented component units, the reporting entity, and related organizations. Blended Component Units - The Clearwater Redevelopment Agency (CRA), created by authority of Florida Statute Chapter 163, Part III, and City of Clearwater Resolution 81 -68, although it is legally separate, is reported as if it were part of the City (blended component unit) due to the City Commission serving as the governing board of the CRA. Separate financial statements for the CRA are not available. However financial statements for the CRA have been incorporated into the City's comprehensive annual financial report. Discretely Presented Component Units - The Clearwater Downtown Development Board (DDB) was created by authority of Florida Statutes 70 -635 and 77 -637, and City Ordinance 5347 -93, but is legally separate from the City and governed by a separate board. The DDB was created by City ordinance and the City is thereby able to impose its will on the organization. Additionally the exclusion of the DDB's activities from the City's financial statements would, in the opinion of the City's management, cause the financial statements to be incomplete. Consequently, the DDB is reported in a separate column in the combined financial statements as a discretely presented component unit of the financial reporting entity, in accordance with Statement No. 14 of the Governmental Accounting Standards Board. The DDB's financial statements have been incorporated into the combined and individual fund sections of the City's comprehensive annual financial report. Separate financial statements for the DDB can be obtained from the City's Finance Department located at 100 S. Myrtle Avenue, Clearwater, Florida. Note (1 B) Fund Accounting The accounts of the City are organized on the basis of funds and account groups, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for by providing a separate set of self- balancing accounts, which comprise its assets, liabilities, fund equity, revenues and expenditures, or expenses as appropriate. The various funds are grouped by generic type and three broad fund categories in the financial statements. The types of funds maintained by the City are as follows: Governmental Funds The City accounts for those traditional governmental activities financed primarily from tax revenues through the use of various governmental funds. The basic distinctions of governmental funds are: Measurement Focus: Governmental funds are accounted for on a spending or "financial flow" measurement focus. Thus, only current assets and current liabilities are generally included on their balance sheets. The reported fund balance representing net current assets reflects "available spendable resources" at the balance sheet date. The operating statements of governmental funds report the changes in net current assets (available spendable resources) during a period of time, the increases consisting of revenues and other financing sources and the decreases consisting of expenditures and other financing uses. Accordingly, long -term debt and fixed assets are segregated from the accounts of these funds and shown separately in the General Long -Term Debt and the General Fixed Assets Account Groups. Advances To Other Funds: Long -term advances receivable from other funds are reported on the balance sheets of governmental funds even though they do not constitute current assets. In order to exclude such assets from consideration as "available spendable resources ", an equivalent amount of fund balance is designated as reserved. 20 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2001 Encumbrances: Govemmental funds employ the use of encumbrance accounting wherein purchase commitments are recorded as they are made in order to reserve that portion of the applicable appropriations. Encumbrances remaining outstanding at year -end do not constitute expenditures or Liabilities. Fund balances are reserved in an amount equal to the total of outstanding encumbrances. As described in Note 1(G), the budget comparisons of certain funds are presented on the budgetary basis, which differs from generally accepted accounting principles. In these presentations, encumbrances are treated as expenditures in the year when the commitment is made rather than the year of liquidation. Depreciation: Depreciation is not recorded for the use of fixed assets in govemmental funds. Basis Of Accountina; Governmental Funds and expendable trust funds use the modified accrual basis of accounting, whereby expenditures, other than unmatured principal and interest on general long -term debt, are recognized in the accounting period when the liability is incurred, if measurable, and revenues and other resources are recognized in the accounting period when they become available and measurable. Revenues are considered to meet the availability test if they are collectible within the current period or soon enough thereafter for use in payment of liabilities of the current period. Grant revenues to be received as reimbursement for expenditures incurred in the current year are recognized as revenue. General Fund accrued revenues consist primarily of utilities service taxes and franchise taxes. Reserves and Desianations; Reserves represent that portion of fund balance committed by legislative action or legal responsibility, which restricts the use of funds to a specific purpose. Designations represent that portion of fund balance designated by City management for a specific future use. The following are the City's governmental fund types: General Fund: The General Fund is the general operating fund of the City. All financial transactions and special assessments not properly accounted for in other funds are accounted for in the General Fund. Special Revenue Funds: Special Revenue Funds are used to account for revenues derived from specific sources. Such revenues are usually required by law or regulation to be accounted for separately and spent for particular purposes. Debt Service Funds: Debt Service Funds are used to account for the accumulation of resources for, and the payment of, interest and principal on the City's General Long -Term Debt, which is not the liability of Proprietary Funds. Capital Proiects Funds; Capital Projects Funds are used to account for the acquisition and construction of capital facilities and other fixed assets. Proprietary Funds: Proprietary Funds are used to account for the City's organizations and activities that are similar to those found in the private sector. The basic distinctions of proprietary funds are: Measurement Focus: Proprietary funds are accounted for on a cost of services or "capital maintenance" measurement focus. Therefore, all assets and liabilities, regardless of whether they are current or noncurrent, are presented on the balance sheet. Fund equity, consisting of net total assets, is segregated into contributed capital and retained eamings segments. The operating statements of these funds reflect revenues, expenses, and other sources and uses, to account for changes in net total assets during the period. 21 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2001 Basis of Accountina: Proprietary Funds use the full accrual basis of accounting. Revenues are recognized in the period in which they are eamed, and expenses are recognized in the period in which the liabilities are incurred. Valuation Of Fixed Assets: Property, plant, and equipment owned by Proprietary Funds is stated at cost except for certain water and sanitary sewer lines of the Utility System which were donated to the City by contractors and subdivision developers. These lines are stated at their estimated cost to the contractors and developers, which should approximate fair value at the date of donation. Depreciation is recorded over the estimated useful lives using the straight -line method (see Note 5). Due to the immateriality of amortization of assets recorded under capital leases, it is included in depreciation expense. When property is disposed of, the related cost and accumulated depreciation are removed from the accounts, with gains or losses on dispositions being reflected as non - operating revenue or expense. Reserves: Reserves represent that portion of retained eamings committed by legislative action or legal responsibility, which restricts the use of funds to a specific purpose. The following are the City's proprietary fund types: Enterprise Funds: Enterprise Funds are used to finance and account for the acquisition, operation, and maintenance of govemmental facilities and services that are supported primarily by user charges. Jntemal Service Funds: Internal Service Funds are utilized to finance and account for services and commodities furnished by a designated department to other departments within the City or to other govemments on a cost - reimbursement basis. Fiduciary Funds: Fiduciary funds are used to account for assets held on behalf of outside parties or on behalf of other funds within the City. Either an expendable trust fund, a pension trust fund, or an agency fund is used under such arrangements. Expendable trust funds are accounted for in substantially the same manner as govemmental funds with a "financial flow" measurement focus and the modified accrual basis of accounting. Pension Trust Funds are accounted for equivalent to proprietary funds with a "capital maintenance" measurement focus and employment of the accrual basis of accounting. Agency Funds are not concemed with measurement of operating results, being essentially concemed with a custodial responsibility, assets and liabilities are measured on the modified accrual basis. Reserves for Retirements have been established for the payment of future benefits. Reserves for Retirements for defined contribution plans are equivalent to the net assets of the plan, and for defined benefit plans they are equivalent to the net assets of the plan, not to exceed the actuarial determined liability of such plans. Account Groups - General Fixed Assets and General Lona -Term Debt General Fixed Assets Account Group: This account group accounts for all fixed assets of the City's Governmental Funds. Assets purchased are recorded as expenditures in the General Fund, Special Revenue Funds and Capital Projects Funds and are capitalized at cost in the General Fixed Assets account group. Generally accepted accounting principles provide an option whether infrastructure improvements such as streets, bridges and drainage systems are capitalized in the General Fixed Assets account group. The City has elected to capitalize these improvements. No interest capitalization or depreciation is recorded on General Fixed Assets. Contributed assets are stated at estimated fair value on the date contributed, or in the case of assets contributed by developers, at estimated cost to the developer which should approximate fair value. 22 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2001 General Lona -Tenn Debt Account Group: This account group accounts for Long -Term Debt and Compensated Absences, which are liabilities of Govemmental Funds, but not payable from currently available expendable financial resources. Note (1 C) Pooled Cash and Investments The City utilizes a consolidated cash pool to account for cash and investments of all City funds other than those which are required by ordinance to be physically segregated. The consolidated cash pool concept allows each participating fund to benefit from the economies of scale and improved yield that are inherent to a larger investment pool. Formal accounting records detail the individual equities of the participating funds. The cash pool utilizes a single checking account for all City receipts and disbursements. All individual fund cash equity in a deficit (overdraft) position with respect to the consolidated cash pool is reclassified at year -end to short-term interfund payables to the Capital Improvement Fund. The Capital Improvement Fund is the fund selected by management to reflect the offsetting interfund receivables in such cases. The City has an agreement with its depository bank to provide that all excess cash is swept daily and automatically into an ovemight money market account which pays interest at .14% less than the daily federal funds rate (2.75% at September 30, 2001), with no requirement for a minimum compensating balance. This account is collateralized through the State of Florida Public Deposits Program. Under City Charter and the current Investment Policy, adopted by the City Commission on September 7, 1995, consolidated cash pool investments are limited to the following: United States Govemment Securities, Certificates of Deposit in Local Banks, Repurchase Agreements, Savings Account in Local Banks, Federal Govemment Agency Securities, Municipal Bonds (other than City of Clearwater issues), State of Florida Bonds, and Municipal Bonds issued by counties in Florida. The City utilizes a very conservative investment philosophy when it invests its pooled cash funds in that the retum of the principal is more important than the retum on the principal. The City does not actively trade its portfolio and generally holds investments until maturity. Through the use of a laddered approach to maturities and by timing maturities to cash needs, the City does not anticipate selling investments to meet cash flow requirements. Under the City's Investment Policy, a performance measure standard has been established. The performance measure chosen is a weighted average of: the ovemight interest rate; and three month, six month, one year, and three year Treasury rates respectively. For the fiscal year ended September 30, 2001, the performance measure weighted average is 4.64 %. The actual pooled cash eamings performance„ before bank charges, was 6.18 %. Investments being held outside of the consolidated cash pool include escrowed debt service investments and employee retirement investments. Permissible escrowed debt service investments are specifically defined in each individual debt instrument, but generally follow the same limitations which apply to consolidated cash pool investments. The City maintains four different employee retirement programs, and each one has its own list of permitted investments. Generally, each plan allows the same type of investments as the consolidated cash pool, but additionally allows some portion of its assets to be invested in stocks, bonds, and notes of corporations which are listed on one or more of the recognized national stock exchanges. Govemmental Accounting Standards Board (GASB) Statement Number 3 requires certain disclosures for deposits and investments, including management's determination of custodial credit risk, defined as follows: For deposits, the bank balance must be categorized as follows: Category 1: Insured or collateralized with securities held by the City or its agent in the City's name. Category 2: Collateralized with securities held by the pledging financial institution's trust department or agent in the City's name. Category 3: Uncollateralized. 23 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2001 For investments other than deposits, the following categories apply: Category 1: Insured or registered, or held by the City or its agent in the City's name. Category 2: Uninsured and unregistered, held by the counterparty's (purchasing agent's) trust department or agent in the City's name. Category 3: Uninsured and unregistered, held by the counterparty, its trust department, or agent, but not in the City's name. As described above, the City's depository banking agreement provides for the investment of all excess cash daily into a collateralized repurchase agreement, whereby all deposits deemed to be collected are automatically deposited. City deposits consist of relatively small cash balances held by Debt Service Trustees and Employee Retirement Custodians. The bank balances equal the carrying amount for these deposits, and management's classification of custodial credit risk is indicated in the table below. Because these amounts are part of the trustee's and custodian's composite account, they are classified along with investments on the balance sheet. Managed mutual funds and guaranteed investment contracts are not susceptible to classification by risk category and are disclosed but not categorized pursuant to GASB Statement 3. Management has classified all other investments into Category 1, with the exception of certain employee retirement investments that are being held by the financial institution also serving as investment manager, and certain escrowed debt service investments that are being held by the financial institution from which they were purchased. The carrying value for all investments is fair value in accordance with GASB Statement 31. Summary of deposits and investments, including management's assessment of custodial credit risk, follows: Investment Fair Deposit Credit Credit Value Risk Category Risk Category I. Cash On Hand and In Banks $ 62,886 1 II. Consolidated Cash Pool and Component Unit Deposits and Investments: U.S. Treasury Notes and Bills 18,469,428 1 U.S. Agency Securities 152,268,791 1 Money Market Account 4,918,627 1 Accrued Interest on Investments 2,314,057 n/a Less Outstanding Checks at 9/30/01 (3,404,845) n/a Total Cash Pool and Component Unity Equity 174,566,058 III. Construction and Debt Service Deposits and Investments: U.S. Treasury Notes and Bills 3,058,741 1 IV. Employee Retirement Deposits and Investments: Cash On Hand and In Banks 6,011,495 1 Money Market Accounts 43,571,752 1 Domestic Equity Securities 167,467,026 1 U.S. Govemment Bonds 113,088,435 1 Domestic Corporate Bonds 43, 164, 185 1 Mortgage Backed Bonds 12,161,677 1 Asset Backed Bonds 10,250,333 1 Intemational Equity Mutual Fund 33,654,108 2 Total Employee Retirement Investments 429,369,011 Total Deposits and Investments, All Funds $ 607,056,696 Note (1 D) Inventories Inventories of proprietary funds are stated at cost and valued on the first -in first -out (FIFO) basis. In governmental funds, the majority of inventory items such as materials and supplies, are accounted for under the purchases method, which provides that expenditures are recognized when the inventory item is purchased. The only govemmental fund inventory that is accounted for under the consumption method is the General Fund inventory of items for resale at the fishing pier. Under the consumption method, the expenditure is recognized when the inventory item is sold (or consumed). 24 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2001 Note (1 E) General Fund Administrative Charges The General Fund charges Proprietary Funds for their proportionate share of the costs of general govemment operations. The amounts charged to these Proprietary Funds are based on relative net expenditures (after deducting all interfund transactions). Note (1 F) Accrued Vacation And Sick Leave Full -time permanent employees eam a paid vacation period of two calendar weeks per year, increasing on a graduated scale to a maximum vacation period of four calendar weeks each year after 16 years of service. Generally, employees may accumulate unused vacation not exceeding 360 hours. Sick leave accumulation ranges from approximately 7 -10 hours each month. Generally employees may accumulate sick leave not exceeding 1,560 hours. Upon retirement from City service a qualified employee may be paid one -half of his accumulated unused sick leave. It is the City's policy in its Proprietary Funds to reflect on an accrual basis the amounts of eamed but unused vacation leave and that portion of eamed but unused sick leave estimated to be payable upon retirement. The City's reporting of accrued vacation and sick leave is in accordance with Statement No. 16 of the Govemmental Accounting Standards Board. Note (1 G) Budgets And Budgetary Accounting Annual budgets are legally adopted for the City's General Fund, the Special Development Special Revenue Fund, and the Community Redevelopment Agency Special Revenue Fund. The City of Clearwater observed the following procedures in establishing the budgetary data for the General Fund and Special Development Fund, as reflected in the financial statements: On May 31, 2000, the City Manager submitted to the Clearwater City Commission proposed budgets for the fiscal year commencing October 1, 2000 and ending September 30, 2001. Public Hearings were held on September 7, 2000 and September 21, 2000 at the Clearwater Commission Chambers to obtain citizen comments. On September 21, 2000 official budgets were legally adopted by Ordinance No. 6608 -00. Subsequent quarterly budget amendments were adopted on July 12, 2001 (Ordinance 6815 -01). The final amended budget was adopted October 4, 2001, (Ordinance 6844 -01). The budget for the Special Development Fund is adopted on a basis consistent with GAAP, and appropriations lapse at year -end. Appropriations for open encumbered purchase orders at year -end in the General Fund do not lapse, but rather continue until liquidated or otherwise canceled by City Commission action. On the General Fund budgetary comparison statements, actual expenditures have been adjusted to include end of year encumbrances and to exclude beginning of year encumbrances to provide for a meaningful comparison. Except for the treatment of encumbrances and certain transactions relating to interfund loans, the General Fund Budget is adopted on a basis consistent with GAAP, and all non - encumbered appropriations lapse at year -end. The level of budgetary control established by the legislative body, the level on which expenditures may not legally exceed appropriations, is the individual fund. In accordance with provisions of Ordinance 5025 -90 and with Section 2.519(4) of the Clearwater Code, the City Manager may transfer part or all of any unencumbered appropriation balance among programs within an, operating fund, provided such action does not result in the discontinuance of a program. Such transfers must be included in the next budget review presented to the City Commission. Upon detailed written request by the City Manager, the City Commission may by ordinance transfer part or all of any unencumbered appropriation balance from one fund to another. As established by administrative policy, department directors may transfer money from one operating code to another within a program without a formal written amendment. Formal requests for budget amendments from department directors are required for transfers in capital expenditures, transfers, and reserves. Thus, certain object classifications within departmental and/or program budget appropriations are subject to administratively imposed controls, in addition to the legal controls imposed by City Commission action described above. The annual budget for the Community Redevelopment Agency is adopted by the trustees of that agency in accordance with state law. The current year budget was officially adopted on September 18, 2000. The budget is adopted on a basis consistent with GAAP, the level of budgetary control is the total fund, and appropriations lapse at year -end. Budget amounts presented in the accompanying financial statements reflect all amendments adopted by the 25 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2001 City Commission and the goveming boards of component units. All amendments were adopted in conformance with legal requirements. Individual amendments, as well as the net effects of all amendments during the fiscal year, were not material in relation to the original appropriations for the govemmental funds in the aggregate. The Clearwater City Commission also adopts budgets for the Enterprise Funds, all Intemal Service Funds, the Capital Projects Funds, the Special Programs Fund, and the Local Housing Assistance Trust Fund. Budgetary comparisons for the Enterprise and Internal Service funds are not required by NCGA Statement No. 1 for the general purpose financial statements and are not included in this report. Budgets for the Capital Projects Funds, the Special Programs Fund, and the Local Housing Assistance Trust Fund are adopted on a multi -year completed program basis, where budgetary appropriations do not lapse at year -end, but may extend across two or more fiscal years. A comparison of annual results with these budgets would not be meaningful and is therefore not included in this report. The excess of revenues and other sources over expenditures and other uses for the Special Programs Fund and the Local Housing Assistance Trust Fund is shown as a reconciling item near the bottom of the Combined Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual. All City Commission adopted budgets are integrated into the formal accounting system to allow for monthly comparison of projected and actual experience in all funds for which budgets are adopted. The annual budget for the Clearwater Downtown Development Board Fund, a discretely „presented component unit of the City, is adopted by the members of that board in accordance with state law. The current year budget was officially adopted on September 13, 2000. Note (1 H) Risk Management The City is self - insured within certain parameters for losses arising from claims for general liability, auto liability, police professional liability, public official's liability, property damage, and workers' compensation. Insurance coverage has been maintained by the City to pay for or indemnify the City for losses in excess of certain specific retentions and up to specified maximum limits in the case of claims for liability, property damage, and workers' compensation. The liability excess coverage is $10,000,000 per occurrence (no aggregate applicable) with self- insured retention of $500,000 via two layers of $5,000,000 each with the second layer of $5,000,000 in excess of the first layer of $5,000,000. The workers' compensation excess coverage is statutory with $500,000 self- insured retention per occurrence, and the property damage excess coverage is $100,000,000 with a $500,000 self- insured retention. Settled claims have not exceeded excess coverage in any of the past three years. The transactions relating to the self- insurance program are accounted for in the Central Insurance Fund, an Internal Service Fund. The billings by the Central Insurance Fund to the various operating funds (the intertund premiums) are based on actuarial estimates of the amounts needed to pay prior and current year claims. The claims liability reported at September 30, 2001 is based on the requirements of Govemmental Accounting Standards Board Statement No. 10, which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Changes in the claims liability amounts in fiscal years 2000 and 2001 were: Self Insurance Balance at October 1, 1999 $ 10,217,997 Current year claims and changes in estimates 2,810,923 Claim payments (2,145,527) Balance at September 30, 2000 10,883,393 Current year claims and changes in estimates 629,391 Claim payments (2,175,488) Balance at September 30, 2001 $ 9,337,296 26 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2001 During fiscal year 1988 -89, the City Commission authorized the establishment of a special health insurance stabilization fund to guard against future substantial increases in health care costs. The current accumulated balance in this fund is $3,536,007, which represents refunds from insurance carriers and departmental billings during the current and ten immediately preceding fiscal years in excess of insurance premium expense actually incurred during those ten years. This fund is a component of the unreserved retained eamings balance of the Central Insurance Fund at September 30, 2001. The City is not currently self- insured with respect to major medical coverage. Note (11) Statements of Cash Flows For purposes of the statements of cash flows, investments with original maturities of three months or less are considered to meet the definition of cash equivalents. The majority of the investments in which the City's proprietary funds have equity are held by the Cis consolidated pool of cash and investments. Since fund equities in this cash management pool have the general characteristics of demand deposits in that additional funds may be deposited at any time and also funds may be withdrawn at any time without prior notice or penalty, each fund's equity account is considered a cash equivalent regardless of the maturities of investments held by the pool. Funds which have deficit (overdraft) positions within the consolidated pool report the deficits as interfund payables to the City's Capital Improvement Fund, as explained in Note 1(C). Note (1J) Capitalization of Interest In compliance with the requirements of Financial Accounting Standards Board Statement No. 62, it is the policy of the City to capitalize all interest costs of tax exempt borrowings, the proceeds of which are extemally restricted to the financing of the acquisition of specified qualifying assets, less any interest eamed on the temporary investment of the proceeds of such borrowings until the specified qualifying assets acquired with the borrowings are ready for their intended use. For other projects, the City follows the provisions of Financial Accounting Standards Board Statement No. 34 and capitalizes interest costs incurred during the construction period. This policy is applicable to the proprietary funds; it is not applied to general fixed assets. During the fiscal year, $6,355,706 of interest cost was incurred in the proprietary fund types. Interest capitalized, net of eamings on related investments was ($68,925). Note (1 K) Application of FASB Pronouncements to Proprietary Funds The City has elected to implement the provisions of GASB Statement 20 with regard to the application of FASB Pronouncements for proprietary funds. In accordance with the provisions of GASB Statement 20, the City has elected to not apply those FASB statements and interpretations issued after November 30, 1989. Note (1 L) Comparative Data Wherever possible, the accompanying financial statements include comparative total data for the prior year in order to provide a better understanding of changes in the City's overall financial position and results of operations. Certain prior year balances have been reclassified to conform to current year presentations. Note (1 M) Combined Financial Information The total columns included in the combined financial statements which are captioned "Memorandum Only" represent a summation of the amounts presented in the columns by fund type and account group. Such totals do not eliminate interfund transactions, and are included for informational purposes only. They are not intended to present financial position, results of operations, or cash flows for the govemmental unit as a whole, in conformance with generally accepted accounting principles. Note (1 N) Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from the estimates. 27 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2001 Note (2) Long -Term Debt Note (2A) Summary of Transactions in Long -Term Debt Notes, Mortgages, Loan Pod Aoaued Revenue Agreements Compensated General Long -Term Debt Account Group Bonds & Contracts Absences Total Debt Payable at October 1, 2000 $ 10,264,210 $ 3,393,243 $ 5,149,725 $ 18,807,178 New Debt Issued: Revenue Bonds Issued 46,445,000 46,445,000 Lease Purchase Contracts tor Equipment Acquisition 2,454,264 2,454,264 Transfers from Proprietary Fund 58,148 58,148 Net Change in Accrued Compensated Absences 301 ,834 301,834 Debt Retired (227,222) (1,241,085) (1,468,307) Debt Payable at September 30, 2001 $ 56,481,988 $ 4,664,570 5,45 ,559 $ 66,598,117 Note (2B) Summary of Debt Service Requirements (all outstanding Indebtedness as of September 30, 2001, including interest payments of $78,371,388) Notes, Mortgages, Loan Pool Revenue Agreements Bonds & Contracts Total 11,752,027 $ 4,717,356 $ 16,469,383 16,743,744 3,852,254 20,595,998 16,707,988 3,210,395 19,918,383 16,493,670 2,295,420 18,789,090 16,393,053 1,204,879 17,597,932 173,999,780 43,887 174,043,667 $ 252,090,262 $ 15,324,191 $ 267,414,453 Year Ending Sept. 30 2002 $ 2003 2004 2005 2006 Thereafter Notes (2C) Obligations Under Lease Purchase Agreements Future minimum lease payments under lease purchase agreements are as follows: Year Ending Seot. 30 Amount 2002 2003 2004 2005 2006 2007 Deduction of the Amount of Imputed Interest Necessary to Reduce Net Minimum Lease Payments to Present Value $ 4,717,356 3,852,254 3,210,395 2,295,420 1,204,879 43,887 $ 15,324,191 (1,331,007) $ 13,993,184 Obligations under capital leases are included as a component of the balance under the caption "Mortgages, Notes, Loan Pool Agreements and Acquisition Contracts Payable" on the City's Combined Balance Sheet. Note (2D) Long -Term Debt, General Government Accrued Compensated Absences Long -term portions of accrued vacation and sick pay for govemmental funds, as required by GASB Statement No. 16. 28 $ 5.451.559 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2001 Serial Bonds Payable Improvement Revenue Bonds, Series 1995, with serial maturities from $190,000 at 5.10% due February 1, 2002 to $590,000 at 6.00% due February 1, 2021. The bonds have term maturities of $1,565,000 at 5.88% due February 1, 2020 and $2,750,000 at 6.00% due February 1, 2025. Principal and interest payable from Public Service Tax revenues. Infrastructure Sales Tax Revenue Bonds, Series 2001, with serial maturities from $5,100,000 at 4% due December 1, 2002 to $6,620,000 at 4% due December 1, 2009. Principal and interest are payable from "Penny for Pinellas" one -cent discretionary infrastructure sales surtax. 5,455,000 46.445.000 Total Serial Bonds Payable 51.900.000 Term Bonds Payable Public Service Tax and Bridge Revenue Bonds, Series 1985, maturing December 1, 2005 with interest at 9.13 %. This amount represents 64.33% of the total undefeased term bonds outstanding for this issue. The remaining 35.67% of the undefeased term bonds is reported in the Parking System Enterprise Fund, in the amount of $142,249. After partial defeasance on September 27, 1995, a total of $550,000 in outstanding term bonds mature on December 1, 2005, with $415,000 remaining undefeased as of September 30, 2001. 266,988 Improvement Revenue Bonds, Series 1995, with term maturities of $1,565,000 at 5.88% due February 1, 2020 and $2,750,000 at 6.00% due February 1, 2025. The bonds have serial maturities from $180,000 at 5.05% due February 1, 2001, to $590,000 at 6.00% due February 1, 2021. 4.315.000 Total Term Bonds Payable 4.581.988 Lease - Purchase Payable Pursuant to certain Master Lease Agreements, the City has entered into Lease Purchase Agreements for the purchase of automotive and other types of equipment for the operating departments of the General Fund. These agreements provide for 20 quarterly payments ranging in amount from $692 to $97,983. The cost of the equipment at the inception of the leases was $8,112,954 with interest imputed thereon of $900,356; the effective rates ranging from 3.30% to 5.90 %. 4.664.570 Total General Govemment Long -Term Debt Payable 66.598.117 Note (2E) Long -Term Debt, Proprietary Funds Water and Sewer Utility Fund Water and Sewer Refunding Bonds, Series 1993; 4.80% - 5.63 %. Current Interest Bonds with serial maturities due in annual principal installments ranging from $140,000 to $5,715,000 from December 1, 2001 to December 1, 2018; interest is payable semiannually, net of unamortized discount of $39,241, collateralized by net revenues of the Water and Water Pollution Control System. 24,560,759 Water and Sewer Revenue Bonds, Series 1998; Capital Appreciation Bonds with an approximate yield to maturity ranging from 4.20% - 5.22% and having serial maturities due in annual installments (original principal amount plus interest earned to date of maturity) ranging from $460,000 to $5,875,000 from December 1, 2004 to December 1, 2018; interest is payable at maturity (or prior redemption date) on Capital Appreciation Bonds; net of unamortized discount of $274,945 and unearned interest included in the maturity amount outstanding at September 30, 2001 of $31,884,999 collateralized by net revenues of the Water System. 29 49,625,056 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2001 Pursuant to certain Master Lease Agreements, the City has entered into Lease Purchase Agreements for the purchase of automotive equipment for the operating divisions of the Water and Sewer Utility Fund, providing for 20 quarterly payments ranging from $693 to $6,150. The cost of the automotive equipment at the inception of the lease was $252,634 with interest imputed thereon of $31,933, with effective rates ranging from 201,652 3.30% to 5.62 %. Total Long -Term Debt, Water and Sewer Utility Fund 74,387,467 Less Current Portion of Long -Term Debt (5.210.825) Long -Term Debt, Excluding Current Portion 69.176.642 Cash has been restricted and reserves established in the Water and Sewer Revenue Bonds Debt Service Fund pursuant to the ordinances authorizing the two outstanding series of Water and Sewer Revenue Bonds. Amounts restricted are in compliance with the ordinances. Gas Utility Fund Gas System Revenue Bonds, Series 1996A; 4.80% — 5.75% Serial Bonds due in annual principal installments ranging from $85,000 to $270,000 from September 1, 2002 to September 1, 2014. 5.75% Term Bonds in the principal amount of $905,000 maturing on September 1, 2017; 5.75% Term Bonds in the principal amount of $1,460,000 maturing on September 1, 2021; and 5.80% Term Bonds in the principal amount of $4,465,000 maturing on September 1, 2026. Interest is payable semiannually. Long term debt is net of unamortized discount of $121,209. The revenue bonds are collateralized by net revenues of the Gas Division. Gas System Revenue Bonds, Series 1997A & B; 4.00% - 5.00% Serial Bonds due in annual principal installments ranging from $490,000 to $785,000 from September 1, 2002 to September 1, 2013. Also includes 5.25% Term Bonds in the principal amount of $790,000 maturing on September 1, 2017, and 5.30% Term Bonds in the principal amount of $4,560,000 maturing on September 1, 2027. Interest is payable semiannually. Long term debt is net of unamortized discount of $153,301. The revenue bonds are collateralized by net revenues of the Gas Division. 8,323,791 12,711,699 Gas System Revenue Bonds, Series 1998; 3.90% - 4.60% Serial Bonds due in annual principal amounts ranging from $35,000 to $50,000 from September 1, 2002 to September 1, 2013; and 4.75% - 4.90% Serial Bonds due in annual principal installments ranging from $620,000 to $755,000 from September 1, 2015 to September 1, 2019; 4.70% Term Bonds in the principal amount of $645,000 maturing on September 1, 2014; and 5.00% Term Bonds in the principal amount of $3,410,000 maturing on September 1, 2023. Interest is payable semiannually. Long term debt amount is net of unamortized discount of $144,261. The revenue bonds are collateralized by the net revenues of the Gas Division. 7.785.739 Total Long -Term Debt, Gas Utility Fund 28,821,229 Less Current Portion of Long -Term Debt (610.000) Long -Term Debt, Excluding Current Portion 28.211.229 Cash has been restricted and reserves established in the Gas System Revenue Bonds Debt Service Funds pursuant to the ordinance authorizing the three outstanding issues of Gas System Revenue Bonds. Amounts restricted are in compliance with the ordinance. 30 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2001 Solid Waste Utility Fund An intemal twenty year loan from the City's Central Insurance Fund for the construction of administrative, container maintenance, and truck wash facilities, in addition to a paved yard for use by all cost centers of the Solid Waste Fund. The loan provides for 20 annual payments of $82,474 together with interest at the cash -pool rate, due on September 30 of each year, commencing September 30, 1994. The cost of the construction was $1,686,759. 989,685 Pursuant to certain Master Lease Agreements, the City has entered into Lease Purchase Agreements for the purchase of equipment for the operating division of the Solid Waste Utility Fund. The agreements provide for 20 quarterly payments of $4,667 to $5,445. The combined total principal amount of the loan at inception of the leases was $270,800 with interest imputed thereon of $39,278, with effective interest rates ranging from 5.03% to 6.41 %. 123.492 Total Long -Term Debt, Solid Waste Utility Fund 1,113,177 Less Current Portion of Long -Term Debt (119.769), Long -Term Debt, Excluding Current Portion 993.408 Stormwater Utility Fund Stormwater System Revenue Bonds, Series 1999; 4.00% - 5.75 %. Current Interest Bonds with serial maturities due in annual principal installments ranging from $120,000 to $490,000 from November 1, 2001 to November 1, 2029. Interest is payable semiannually; amount is net of unamortized discount and issue costs of $77,733; and the issue is collateralized by net revenues of the Stormwater Utility System. Pursuant to certain Master Lease agreements, the City has entered into Lease Purchase Agreements for the purchase of maintenance equipment for the operating division of the Stormwater Utility fund, providing for 20 quarterly payments ranging from $693 to $11,107. The cost of the maintenance equipment at the inception of the lease was $762,957, with interest imputed thereon of $92,884, and effective rates ranging from 3.30% to 5.62 %. 7,317,267 607.558 Total Long -Term Debt, Stormwater Utility Fund 7,924,825 Less Current Portion of Long -Term Debt (258.715) Long -Term Debt, Excluding Current Portion 7.666.110 Yacht Basin and Marina An internal five -year construction loan in the amount of $298,011 from the City's Central Insurance Fund for construction of two aircraft T- hangars and one corporate hangar at Clearwater Airpark. The loan provides for payments due on September 30 of each year, bearing interest at the cash -pool interest rate and commencing September 30, 2001. Pursuant to certain Master Lease Agreements, the City has entered into a Lease Purchase Agreement for the purchase of equipment for the operating division of the Yacht Basin and Marina Enterprise Fund. The agreement provides for 20 quarterly payments of $1,929. The cost of the equipment at the inception of the lease was $33,825 with interest imputed thereon of $4,749, with an effective rate of 5.65 %. 245,214 1.902 Total Long -Term Debt, Yacht Basin and Marina Fund 247,116 Less Current Portion of Long -Term Debt (57.901) Long -Term Debt, Excluding Current Portion 189.215 31 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2001 Parking System Public Service Tax and Bridge Revenue Bonds, Series 1985, maturing December 1, 2005 with interest at 9.13 %, net of discount and issue costs (Parking Fund share only) of $5,762. This amount represents 35.67% of the undefeased term bonds outstanding. The remaining 64.33% of the undefeased term bonds is reported in the General Long Term Debt Group, in the amount of $266,988. After partial defeasance on September 27, 1995, a total of $550,000 in outstanding term bonds mature on December 1, 2005, with $415,000 remaining undefeased as of September 30, 2001. 142,249 Pursuant to certain Master Lease Agreements, the City has entered into a Lease Purchase Agreement for the purchase of equipment for the operating divisions of the Parking Fund. The agreement provides for 20 quarterly payments of $43,628. The cost of the equipment at the inception of the lease was $780,818 with interest imputed thereon of $91,751, with an effective rate of 4.33 %. 710.081 Total Long Term Debt, Parking System Fund 852,330 Less Current Portion of Long -Term Debt (171,697) Long -Term Debt, Excluding Current Portion 680.633 Cash has been restricted and reserves established pursuant to the ordinances authorizing the Public Service Tax and Bridge Revenue Bonds. Amounts restricted are in compliance with the ordinances. Garage Pursuant to certain Master Lease Agreements, the City has entered into Lease Purchase Agreements for the purchase of automotive and other types of equipment for the operating divisions of the City. These agreements provide for 20 quarterly payments ranging in amount from $7,766 to $79,218. The cost of the equipment at the inception of the leases was $11,548,903 with interest imputed thereon of $1,475,929, the effective rates ranging from 2.95% to 5.90 %. 6,924,234 Less Current Portion of Long -Term Debt (2,217,794) Long -Term Debt, Excluding Current Portion 4,706,440 Administrative Services Pursuant to certain Master Lease Agreements, the City has entered into Lease Purchase Agreements for the purchase of automotive and other types of equipment for the operating divisions of the Administrative Services Fund. These agreements provide for either 12 or 20 quarterly payments ranging in amount from $776 to $19,645. The cost of the equipment at the inception of the leases was $1,593,594 with interest imputed thereon of $211,446, the effective rates ranging from 2.95% to 5.90 %. 759,695 An intemal five -year loan from the City's Central Insurance Fund for the purchase and installation of a new Utility Customer Service system. The loan provides for five annual payments of $300,000 plus interest at the cash -pool rate, due on September 30, of each year. The loan commenced on September 30, 2000. 871.070 Total Long Term Debt, Administrative Services Fund 1,630,765 Less Current Portion of Long -Term Debt (566.287) Long -Term Debt, Excluding Current Portion 1.064.478 TOTAL PROPRIETARY FUNDS LONG -TERM DEBT, EXCLUDING CURRENT PORTION 112.688.155 TOTAL LONG -TERM DEBT, ALL FUNDS EXCLUDING CURRENT PORTION FOR PROPRIETARY FUNDS 32 $179286272 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2001 The official statements and Commission resolutions authorizing the issuance of the revenue bonds described above contain certain restrictive covenants. The City has covenanted that, on a monthly basis, it will deposit specified amounts derived from specific revenue sources into accounts and funds established by the resolutions. The deposits into these accounts and funds are used to repay principal and interest coming due on the bonds and to provide sinking funds established for the purpose of retiring term bonds due in future years. Certain covenants also require maintenance of specified coverage ratios. The City is in compliance with all bond covenants. Note (29 Advance Refunding of Bonds In prior fiscal years, the City entered into various advance- refunding transactions related to certain of its bonded debt. A portion of the proceeds of the refunding bond issues was placed in trust and used to purchase securities of the United States Govemment and related agencies at various interest rates and maturities sufficient to meet all debt service requirements of the refunded debt, of which $60,900,000 was outstanding at September 30, 2001. These assets are administered by trustees and are restricted to use for retirement of the refunded debt. The liability for the refunded bonds and the related securities and escrow accounts are not included in the accompanying financial statements as the City defeased its obligation for payment of the refunded bonded debt upon completion of the refunding transactions. Bond issues, which have been refunded and are payable from escrow accounts are: Utility Revenue Certificates, 1975 $ 1,800,000 Utilities Tax and Bridge Revenue Bonds, Series 1977 1,390,000 Utilities Tax Bonds, Series 1977 2,380,000 Special Obligation bonds, Series, 1978A 50,000 Utility Revenue Bonds, 1978 14,240,000 Public Service Tax and Bridge Revenue Bonds, Series 1985 975,000 Community Redevelopment Agency Bonds, Series 1986 1,190,000 Water and Sewer Revenue Bonds, Series 1988A 19,910,000 Water and Sewer Revenue Bonds, Series 1988B 4,995,000 Gas System Revenue Bonds 1991A 5,860,000 Gas System Revenue Bonds 1994A 8,110,000 $ 60,900,000 Note (2G) Long-Term Debt, Debt Service Funds Debt Service Reserves - General Lona -Term Debt The reserves have been established in compliance with the ordinances authorizing the debt and are equal to the amounts required by the ordinances. Reserves established to provide for the next succeeding maturities of principal and interest are as follows: Principal Interest Improvement Revenue Bonds, Series 1995 $ 126,667 $ 93,991 Public Service Tax and Bridge Revenue Bonds, Series 1985 41,189 8,121 Infrastructure Sales Tax Revenue Bonds, Series 2001 551.024 & 167.856 amuse A contingency reserve has been established pursuant to the authorizing bond ordinance to meet principal and interest requirements for the Public Service Tax and Bridge Revenue Bonds should other resources be unavailable. The General Long -Term Debt portion of this reserve is $71,535 as of September 30, 2001. 33 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2001 Note (3) Restricted Assets, Proprietary Funds Note (3A) Water and Sewer Utility Fund Assets in the Water and Sewer Utility Fund restricted for construction include: Water Improvement charges, the use of which is restricted by the authorizing ordinance to the construction of additions and improvements to the water system; assets remaining at September 30, 2001 are: Equity in Pooled Cash and Investments $ 1,091,317 Due from Other Funds 362,641 Sewer Improvement charges, the use of which is restricted by the authorizing ordinance to the construction of additions and improvements to the sewer system; assets remaining at September 30, 2001 are: Equity in Pooled Cash and Investments 3,596,068 Due from Other Funds 458,229 Assets of the Water and Sewer Utility Fund restricted under the provisions of the ordinances authorizing the issuance of Water and Sewer Revenue Bonds consisted of the following at September 30, 2001: Water and Sewer Revenue Bonds Debt Service: Equity in Pooled Cash and Investments 11,158,705 Investments (U.S. Govemment Securities) 3,058,741 Accrued Interest Receivable on Investments 86,196 Water and Sewer Revenue Bonds Renewals and Replacements: Equity in Pooled Cash and Investments 9,426,487 Due from Other Funds 1.328.641 530 Assets of the Water and Sewer Utility Fund representing Customers' Deposits and therefore restricted, amounted to $1,868,428 at September 30, 2001, consisting entirely of Equity in Pooled Cash and Investments. Note (3B) Gas Utility Fund Assets in the Gas Utility Fund restricted under the provisions of the ordinance authorizing the issuance of revenue bonds consisted of the following at September 30, 2001: Gas System Revenue Bonds Debt Service: Equity in Pooled Cash and Investments $175,581 Renewals and Replacements: Equity in Pooled Cash and Investments 300.000 $475.581 Assets of the Gas Utility Fund representing Customers' Deposits and therefore restricted, amounted to $1,110,172 at September 30, 2001, consisting entirely of Equity in Pooled Cash and Investments. Note (3C) Solid Waste Utility Fund Restricted assets in the Solid Waste Utility Fund designated for construction represent customer deposits in the amount of $707,799 at September 30, 2001, and consisted entirely of Equity in Pooled Cash and Investments. Note (3D) Stormwater Utility Fund Reimbursement due for land acquisition costs from the U.S. Department of Housing and Urban Development pursuant to a FY 2000 Economic Development Initiative Special Project Grant for Clearwater Town Pond; assets remaining at September 30, 2001 are: Due from Other Govemmental Entities $ 455,000 34 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2001 Assets in the Stormwater Utility Fund restricted under the provisions of the ordinance for the issuance of revenue bonds consisted of the following at September 30, 2001: Stormwater System Revenue Bonds Debt Service: Equity in Pooled Cash and Investments Construction: Equity in Pooled Cash and Investments Note (3E) Parking System Assets in the Parking System restricted under the provisions of the ordinance authorizing Public Service Tax and Bridge Revenue Bonds, consists of Equity in Pooled Cash and amount of $64,850 as of September 30, 2001. 275,622 5,858,885 the issuance of the Investments in the Note (3F) Current Liabilities Payable from Restricted Assets As of September 30, 2001, with comparative figures for 2000, the current liabilities payable from restricted assets of the Enterprise Funds were as follows: Construction Contracts Payable Accrued Interest Payable Current Portion of Long -Term Debt (Revenue Bonds) Customer Deposits September 30, 2001 $ 1,846,467 744,364 4,496,310 3,686,399 $ 10,773,540 September 30, 2000 $ 116,883 790,774 4,272,314 3,576,707 $ 8,756,678 Note (4) Retirement Commitments Note (4A) Defined Benefit Pension Plans The City contributes to the following two single - employer, self- administered defined benefit pension plans covering approximately three - fourths of all City employees. The Employees' Pension Plan covers all permanent, full -time City employees who successfully pass the required physical examination, except for firemen employed prior to July 1, 1963, and certain nonclassified (primarily managerial) employees. The Firemen's Relief and Pension Plan covers all firemen hired prior to July 1, 1963, who otherwise met eligibility requirements and is closed to new entrants. Neither of these plans issues a stand -alone financial report. The Employees' Pension Plan is authorized by and operates under the provisions of Sections 2.391 through 2.411 of the Municipal Code of the City of Clearwater. Plan provisions have been duly approved as required by the voters in referendums, the most recent of which was held on March 14, 2000. The plan provisions were changed effective January 1, 2000 to provide a 1.5% cost of living increase, an additional normal retirement age of 65 with 10 years of service, plus additional eligibilities and benefits for police and firefighters. The normal retirement benefit is a monthly benefit equal to 2 -3/4% of average monthly compensation for the final 5 years of service multiplied by the number of years of service to date of retirement. The minimum benefit under the plan is $300 per month. Eligibility for normal retirement occurs upon completion of at least 20 years of service and the attainment of age 55 or completion of 30 years of service for employees engaged in non - hazardous duty, or 10 years of service and age 65. For those engaged in hazardous duty, eligibility occurs upon completion of 20 years of service. The normal monthly benefits are payable for the life of the participant and continue, after the participant's death, to be paid at the same amount for 5 years to eligible sunriving beneficiaries; after 5 years, the survivor annuity is reduced to 50% of the original amount. The plan provides for an annual cost of living increase of up to 1 -1/2 %. The plan also provides for disability and death benefits, vesting after completion of 10 years of service and the refund of employee contributions in case of a non - vested termination. There are seven other options which are computed to be the actuarial equivalent of the normal benefit (life annuity; ten year certain and life annuity; 50% joint and survivor annuity; 75% joint and survivor annuity; and 100% joint and survivor annuity). Covered employees contribute 8% of their compensation. It is the city's obligation to provide a sufficient additional contribution to maintain the actuarial soundness of the fund but, in any event, not less than 7% of participating employee's compensation. The Firemen's Relief and Pension Plan is authorized and operated under the provisions of Subpart B, Article I (Laws of Florida, Chapter 30658, 1955 and amendments), Sections 1 through 27 of the Municipal Charter and Related Law of the City of Clearwater and Chapter 26, Article III, Sections 26.50 through 35 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2001 26.52 of the Municipal Code of the City of Clearwater. The normal retirement benefit is a monthly benefit in the amount of 50% of the prevailing wage at the date of retirement of the lowest rank held by the participant during the three years immediately preceding retirement plus 2% of such prevailing wage for each year of service in excess of 20 years up to a maximum of 60 %. Participants retiring at the age of 65 years are entitled to a benefit of 60% of the prevailing wage of the lowest rank held by the participant during the three years immediately preceding retirement. The ending rate of pay specified above may not exceed the highest rate of pay for the rank of Captain. Eligibility for normal retirement occurs upon completion of 20 years of service or attainment of age 65. The monthly benefits are payable for the life of the participant and continue, after the participant's death, to be paid to certain eligible surviving beneficiaries at an amount that is one -half of the amount received by the participant. Benefits are also provided for children of the deceased participant who is Tess than 18 years of age subject to certain limitations as to amount. The plan also provides for disability and death benefits and for vesting upon completion of at least 12 years of service. The plan provides for post retirement cost of living increases equal to the increase in the prevailing wage for the rank at which the participant retired with a limitation for those retiring on or after January 1, 1972 of 100% of the initial pension benefit for total cost of living increases. Participating employees are required to contribute 6% of their salaries up to the equivalent of the salary of a fireman holding the rank of Captain. The City is required to contribute a sufficient additional amount to maintain the actuarial soundness of the plan for a period of 35 years commencing January 1, 1972; this contribution is based upon, but not limited to, the amount of property tax that a levy of 0.6 mills would produce assuming assessed values of taxable property equal to the values of January 1, 1972. As of the date of the most recent actuarial valuations, January 1, 2001, the current membership of the plans is as follows: Retirees and Beneficiaries Currently Receiving Benefits Terminated Employees Entitled to Benefits But Not Yet Receiving Them Active Employees: Fully Vested Nonvested Total Number of Participants Employees' Pension Fund 533 40 711 827 2.111 Firemen's Relief and Pension Fund 48 48 For the fiscal year ended September 30, 2001, the covered payroll for the Employees' Pension Fund is $65,532,441. The City's total payroll for the same period is $69,209,284. Annual pension cost and contributions information for the last three fiscal years follows: Year Ended Sept 30 1999 2000 2001 Employees' Pension Fund Annual (a) Required Contribution $ 840,558 $ 0 $ 174,377 Employer (b) Contributions $ 3,904,950 $ 4,419,723 $ 4,255,484 Percent Contributed 465% N/A 2440% (c) (a) The actuarially determined contribution requirements for the City's fiscal year ended September 30, 2001, are based on actuarial valuations as of January 1, 2000. Since the City's contributions are made during its fiscal year (which commences nine months after the date of the actuarial valuation), the City, with approval of State regulatory authorities, is following the practice of adding interest to its required contributions at the assumed rate of retum on investments for a period of one year. (b) In some fiscal years the actual contribution may be less than the annual required contribution due to legally required contributions made in excess of actuarially required contributions for years prior to 1996, resulting in a net pension asset in the plan. The net pension asset balance as of September 30, 2001 totaled $15,845,929. 36 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2001 (c) Actual contributions for fiscal 2001 totaled $4,255,484, as required by City pension ordinance. See footnote 4A. Firemen's Relief Pension Fund Year Annual (a) Ended Required Employer Percent Sept 30 Contribution Contributions Contributed 1999 $ 1,003,758 $ 1,003,758 100% 2000 $ 1,046,856 $ 1,046,856 100% 2001 $ 1,098,990 $ 1,098,990 100% a) The actuarially determined contribution requirements for the City's fiscal year ended September 30, 2001, are based on actuarial valuations as of January 1, 2000. Since the City's contributions are made during its fiscal year (which commences nine months after the date of the actuarial valuation), the City, with approval of State regulatory authorities, is following the practice of adding interest to its required contributions at the assumed rate of retum on investments for a period of one year. The net pension asset at transition (October 1, 1997) was determined in accordance with GASB Statement No. 27, "Accounting for Pensions by State and Local Govemmental Employees ". The amount of the pension asset at transition was $3,503,365. The Employees' Pension Fund net pension asset at September 30, 2001 totaled $15,845,929. It was comprised of the following components: Annual required contributions (ARC) $ 174,377 Interest on the net pension obligation (870,965) Adjustment to annual contribution 1.548.497 Annual pension cost 851,909 Fiscal 2001 Employer Contributions 4.255.484 Increase (decrease) in net pension obligation 3,403,575 Net pension obligation beginning of year 12.442.354 Net Pension obligation end of year $1.5,845,929 Each pension fund is accounted for as a pension trust fund; therefore each is accounted for in substantially the same manner as proprietary funds with a "capital maintenance" measurement focus and the accrual basis of accounting. Fund assets, primarily investments, are valued at fair value for balance sheet purposes, in accordance with GASB No. 25. Investment values are determined using the estimated fair value determined by averaging estimated fair values obtained from three or more nationally recognized brokers. As of September 30, 2001, neither the Employees' Pension Fund nor the Firemen's Relief and Pension fund held investments (other than U.S. Govemment or U.S. Govemment guaranteed obligations) in any one organization comprising 5% or more of the net assets available for benefits. As of September 30, 2001, neither pension fund had investment type or similar relationships with any related party, including officers and employees of the Pension Plan, the sponsoring City of Clearwater, and organizations included in the reporting entity. Significant actuarial assumptions utilized in the actuarial valuations as of January 1, 2000, are as follows: Employees' Pension Plan (1) Assumed rate of return on investments of 7% per annum. (2) Projected salary increase at a rate of 5% per year, including both cost -of- living adjustments of 3% and merit or seniority increases at 2 %. (3) Mortality based on the 1983 Group Annuity Mortality Table for Males with female ages set back 6 years. (4) Pre - retirement withdrawals assumed to occur per standard scales of moderate tumover rates (Scale 255) for males and heavy turnover rates (Scale 355) for females. (5) Pre - retirement incidence of disability is assumed to occur in accordance with a standard scale of moderate disability rates (Class 1, 1952 Inter - Company); rates for females assumed to be twice that for males. 37 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2001 Firemen's Relief and Pension Plan (1) Assumed rate of retum on investments of 5.5% compounded annually. (2) Assumed benefits grow at an annually compounded rate of 2 %. (3) Mortality based on the 1983 Group Annuity Mortality Table for both active and retired participant; assumed disabled participants will experience mortality according to PBGC Tables 3 and 4 for males and females, respectively. (4) Assumed no withdrawals will occur. (5) Assumed probability of an active participant becoming disabled is zero. (6) Assumed value of one mill of ad valorem tax will increase at rate of 5% per year. As a result of a voter referendum on March 14, 2000, the Employees Pension Plan was modified to provide for a 1.5% cost of living increase, an additional retirement age of 65 with 10 years of service, plus additional eligibility and benefits for police and firefighters effective January 1, 2000. The Firemen's Relief and Pension Fund had changes in actuarial assumptions affecting the January 1, 1999 valuation. An investment yield of 5.5% was assumed whereas the prior valuation assumed 6.5 %. Additionally, benefit increases of 2.0% were assumed while the previous assumption was 4.0 %. It is the City's policy to fund pension costs accrued as determined on an actuarial basis. Annual required contributions (ARC) for the Employees' Pension Fund are calculated using the Entry Age Normal with Frozen Initial Liability method. The initial unfunded actuarial accrued liability determined at July 1, 1963, is being amortized over a 40 -year period; changes made in 1979 and subsequent years which have had the effect of either increasing or decreasing the actuarial liability are being amortized over a 30 -year period from their effective dates in accordance with State law. Annual required contributions (ARC) for the Firemen's Relief and Pension Fund are based on a variation of the aggregate actuarial cost method, under which the unfunded portion of the present value of the projected benefits is allocated over the present value of a 6.0% per year increasing annuity for the remaining years in the 35 -year funding period which began January 1, 1972, pursuant to an agreement between the City and the Plan participants. For this purpose, the unfunded actuarial liability is determined after consideration of the available assets at the valuation date. The increasing fixed schedule produced by this method was established in 1988 and will be modified in the future only to the extent that a current valuation indicates a higher required cost level, or if the resulting cost level exceeds 60% of a mill in a current year. Under the non - standard cost method used for this plan (due to the fact that there are no longer any active employees), all liabilities are unfunded actuarial liabilities and are being amortized according to the cost method. The actuarially determined contribution requirements for the City's fiscal year ended September 30, 2001, are based on actuarial valuations as of January 1, 2000. Since the City's contributions are made during its fiscal year, which commences nine months after the date of the actuarial valuations, the City, with approval of State regulatory authorities, is following the practice of adding interest to its required contributions at the assumed rate of return on investments for a period of one year in the case of the Employees' Pension Fund and for nine months in the case of the Firemen's Relief and Pension Fund. The net pension asset for the Employees' Pension Plan, representing excess contributions as calculated per GASB 27 requirements, is identical in amount to the plan "credit balance" as disclosed in prior years. A total of $10,936,615 of the current net pension asset balance is attributable to govemmental funds and therefore is not reflected in the financial statements in accordance with the modified accrual basis of accounting. The remaining $4,909,314 attributable to proprietary funds is reflected in the financial statements on the accrual basis of accounting. Govemmental Accounting Standards Board Statement Nos. 25 and 27 require the presentation, as supplementary information, of certain 6 -year historical trend information. These disclosures are presented on pages 47-48 of the City's Comprehensive Annual Financial Report. 38 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2001 Note (4B) Police Supplemental Pension Fund A supplemental defined contribution pension plan exists for all eligible policemen which is funded by earmarked revenues received from the State and is administered by the City. The revenues received from the State are allocated among eligible police officers on the basis of days employed as Clearwater Police Officers. These revenues, which comprise the plan contributions, amount to $658,179 in the year ended September 30, 2001, and are obtained from an eighty -five one hundredths of one percent (.85)% excise tax on the gross receipts from premiums collected on casualty insurance policies covering property within the City's corporate limits. The current year contributions represent 4.7% of current year covered payroll. The fair value of investments at September 30, 2001 totaled $9,940,614. The Police Supplemental Pension Fund is authorized by and operates under the provisions of Sections 2.471 through 2.480 of the Municipal Code of the City of Clearwater and Chapter 185 of Florida Statutes. Under the plan provisions, the total monies received during each fiscal year, after payment or provision for all costs and expenses of management and operation of the plan, are allocated to participants on the basis of the total number of shares to which each participant is entitled. Each participant is entitled to one share in the fund for each day of service as a police officer of the City. All police officers as defined in Section 26.70(g) of the Code of Ordinances of the City of Clearwater who are elected, appointed, or employed full -time by the City are eligible to participate in the plan. There are no employee contributions to the supplemental plan. Benefits are fully vested for a lump sum distribution after twenty years from the date of hire, with provision for partial vesting after ten or more years under the plan. Accumulated benefits are payable in full in case of death while employed by the City or in case of total and permanent job - related disability. Non - vested participants' account values upon termination of employment during any fiscal year are added to the monies received during that fiscal year for allocation to the remaining participants in the plan on the basis of total days worked. For the fiscal year ended September 30, 2001, the payroll of the covered officers' was $14,038,693; the City's total payroll for the same period was $69,209,284. During this period, amendments were made to the Investment Policy Statement intended only to complement the objectives and guidelines. These amendments were adopted as required by Senate Bill 372 to the Florida Statutes. As of September 30, 2001, the pension fund had no investment type or similar relationships with any related party including officers and employees of the Pension Plan, the sponsoring City of Clearwater, and organizations included in the reporting entity. Since the entitlement to benefits is based entirely upon the allocation of monies received by the plan to the participants' share accounts, there is no actuarial liability on the part of either the State or the City. Note (4C) Firefighters Supplemental Pension Fund A supplemental defined contribution pension plan exists for all eligible firemen, which is funded by earmarked revenues received from the State and is administered by the City. The revenues received from the State are allocated among eligible firemen on the basis of days worked during the previous year. These revenues, which comprise the plan contributions, amounted to $541,465 in the year ended September 30, 2001, and are obtained from a one and eighty-five one hundredths percent (1.85 %) excise tax on the gross receipts from premiums collected on property insurance policies covering property within the City's corporate limits. The contributions represent 6.34% of current year covered payroll. The fair value of investments at September 30, 2001 totaled $9,464,049. As the plan is described as a money purchase pension plan whereby contributions are allocated based on the number of days worked during the fiscal year ended September 30, and interest eamings allocated based on the beginning balances in each participant's account, there is no actuarial liability on the part of the State or City. The investments of the Fund are managed by the Salem Trust Company. The Firefighters Supplemental Pension Fund is authorized by and operates under the provisions of Sections 2.441 through 2.450 of the Municipal Code of the City of Clearwater and Chapter 175 of Florida Statutes. Eligibility requires two years of credited calendar year service as a firefighter with concurrent participation in the Employees' Pension Plan. There is no employee contribution to the supplemental plan, and benefits are vested for a lump sum distribution at ten years unless there is early retirement, disability or death. Non - vested participants' account values upon termination of employment are reallocated among the remaining participants on the basis of days worked during the previous year. 39 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2001 For the fiscal year ended September 30, 2001, the covered payroll was $8,545,939 the City's total payroll for the same period was $69,209,284. As of September 30, 2001, the pension fund had no investment type or similar relationships with any related party, including officers and employees of the Pension Plan, the sponsoring City of Clearwater, and organizations included in the reporting entity. Note (4D) 401(a) Defined Contribution Plan For all management employees not covered under either of the defined benefit pension plans, the City provides pension benefits through a 401(a) defined contribution plan. In a defined contribution plan, benefits depend solely on amounts contributed to the plan plus investment eamings. Employees are participants from the date of employment and are fully vested upon enrollment. The plan is totally contributory on the part of the City in an amount equal to 15% of compensation on behalf of the City Manager and the City Attorney; 12% of compensation on behalf of the Chief of Police; and 6% of compensation on behalf of all other management contract employees and assistant city attorneys. The City makes bi- weekly contributions to the Trust throughout the plan year to meet its funding obligations under the plan. The International City Management Association Retirement Corporation (ICMA -RC), the trustee for the defined annuity, offers participants a choice of investing in the Family of Funds, Model Portfolio Funds, or Mutual Funds Series. The City's total payroll for the fiscal year ended September 30, 2001, was $69,209,284. The Plan members' payroll for the same period totaled $3,934,142. The City's contribution, using the above referenced formula, totaled $249,556. The assets of the trust, at market value, totaled $1,117,636 at September 30, 2001. Note (4E) Deferred Compensation Plan The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, available to all City employees, permits them to defer a portion of their salary until future years. Participation in the plan is optional. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. Effective January 1, 1997, Federal legislation converted the Section 457 deferred compensation assets from City assets to employee assets. As a result of these changes, plan assets are no longer subject to the claims of the City's general creditors. The City has previously reported the assets and associated liabilities of the deferred compensation plan in the City's financial statements as an agency fund. Effective with the change in legislation these assets are no longer City assets and the fiduciary responsibility has been transferred to the third party plan administrator. Consequently, effective with fiscal 1997, these assets are no longer reported in the accompanying financial statements, in compliance with Governmental Accounting Standards Board Statement No. 32. Note (49 Post Retirement Benefits The City provides no material post retirement benefits to retired employees or to their beneficiaries other than those described in preceding Notes (4A) through (4D). Note (5) Fixed Assets General Fixed Assets: A summary of changes in General Fixed Assets follows: Land Buildings Improvements Equipment Construction in Progress Balance October 1. 2099 Additions $ 30,683,827 $ 4,913,704 38,085,326 4,215,478 83,120,396 5,009,053 36,859,725 4,514,804 3,741,223 759,064 Deletions $ 2,000 504,542 619,087 549,346 3,741,223 Balance Sept 30. 2001 $ 35,595,531 41,796,262 87,510,362 40,825,183 759,064 $ 192,490,497 $ 19,412,103 $ 5,416,198 $ 206,486,402 Donated Land: Land accounted for in the General Fixed Assets Account Group includes a number of parcels that have been donated to the City. With respect to certain parcels, the instrument conveying title to 40 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2001 the City contains restrictions as to the purpose for which the land may be used by the City, with the provision that title shall revert to the donor 11 such restrictions are not followed. Land subject to such restrictions is carried at estimated fair value in the hands of the donor immediately prior to the donation; therefore, the valuation used does not reflect the impact the use restrictions might have on the fair value of such land. Proprietary Funds: A summary of cost and accumulated depreciation of fixed assets of the Proprietary Funds at September 30, 2001, follows: Estimated Internal Useful Life Enterprise Sevice (Years) Land $ 10,286,240 $ 696,681 Buildings 20,841,190 3,210,003 10 - 40 Improvements Other Than Building 288,017,467 715,322 5 - 50 Machinery and Equipment 12,619,504 43,520,881 1 - 33 Construction in Progress 21,800,312 353,564,713 48,142,887 Less Accumulated Depreciation 111,545,233 32,575,200 $ 242,019,480 $ 15,567,687 Contributed Property: As of September 30, 2001, water lines having an estimated cost of $5,141,044, sanitary sewer lines having an estimated cost of $7,743,379, storm sewers having an estimated cost of $3,919,827, and land (for water quality and habitat restoration) having an estimated cost of $922,900 are reflected in the balances of the proprietary fixed assets. Assets Recorded Under Capital Leases: Assets recorded under capital leases and the accumulated amortization thereon (for proprietary fund assets) have been included under the appropriate categories in the summaries and schedules presented previously in this note in combination with similar information for owned assets. Note (6) Property Taxes Property tax revenue is recognized in the fiscal year for which the taxes are levied, provided the availability test is met, in conformance with NCGA Interpretation No. 3. Property taxes for the following fiscal year are levied by commission action in September of each year. This levy is apportioned to property owners based on the previous January 1 assessed values. Tax bills are mailed out on or about November 1, and the collection period runs from November 1 through March 31. On April 1, unpaid property taxes are considered delinquent and become a lien. Tax certificates are sold in June for real property with delinquent taxes. Effective October 1, 1999, the City adopted the provisions of Govemmental Accounting Standards Board Statement No. 33, Accounting and Financial Reporting for Financial Non - Exchange Transactions. Implementation of GASB Statement No. 33 resulted in an increase in accounts receivable and deferred revenue in the General Fund and Special Development Fund of $25,523,580 and $1,708,169, respectively, at September 30, 2000. The accompanying financial statements for the year ended September 30, 2000 have been restated to reflect the changes required by this statement. Since taxes are not collected prior to November 1, the City does not record revenue for advance collections. Uncollected taxes receivable at year -end are recorded, with an appropriate allowance for estimated uncollectible amounts. The net amount deemed to be collectible but not current (not expected to be collected within sixty days after the close of the fiscal year) is shown as a deferred revenue in the appropriate fund. Additionally, taxes assessed for the following fiscal year are recorded as a receivable and a deferred revenue in accordance with Govemmental Accounting Standards Board Statement No. 33. All delinquent property taxes, except those levied specifically for the restricted purposes of financing activities accounted for in the Special Development Fund, are recorded in the General Fund. Property tax revenues are recognized in the General Fund and the required transfers to the appropriate debt service or pension fund are recorded as operating transfers from the General Fund. 41 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2001 The City is permitted by State law to levy ten mills without referendum. Additional millage not subject to the ten mill limitation is authorized if approved by referendum. The tax rate of 5.5032 mills for the year ended September 30, 2001 was unchanged from the September 30, 2000 rate. Note (7) Segment Information for Enterprise Funds The City maintains eight Enterprise funds which provide utilities (water and sewer, gas, solid waste, recycling, and stormwater), marina, parking, and a combined retail center and convention center. Segment information for the year ended September 30, 2001 follows: Depreciation Net and Operating Operating Net Operating Amortization Income Transfers Income Revenue Expense (Loss) In (Out) (Loss) Water and Sewer Gas Solid Waste Recycling Stormwater Marina Parking Harborview Water and Sewer Gas Solid Waste Recycling Stormwater Marina Parking Harborview Contributions During Year 35,564,635 $ 5,194,097 $ 3,307,499 30,223,615 1,263,343 4,124,684 15,614,432 445,866 1,564,064 2,218,507 131,553 174,494 5,041,822 1,081,487 358,179 2,813,147 201,562 (70,889) 4,049,558 239,803 1,207,739 1,952,813 568,946 (725,596) 97,478,529 $ 9,126,657 $ 9,940,174 $ (1,654,171) $ 1,776,274 $ 1,711,111 (1,014,804) 2,469,977 (616,470) 1,718,646 (89,023) 375,185 (656,667) (270,072) 1,717,281 (63,121) 311,672 934,634 1,480,381 379,647 2,200,000 1,387,881 (1,894,256) $ 9,249,944 $ 4,742,673 Additions Deletions to to Property Property Plant and Plant and Equipment Equipment Total Assets Long -Term Debt Outstanding and Other Liabilities Unrestricted Net Working Capital (Deficit) $ 12,999,967 $ (2,816,390) 3,126,046 (19,791) 344,445 (4,311) 411,607 (221) 2,884,762 (44,883) 1,848,112 (5,041) 54,772 (81,165) 1,443 (1,703) $ 21,671,154 $ (2,973,505) $ 210,429,633 47,586,456 14,877,472 4,182,059 32,217,020 4,299,264 8,761,333 11,640,441 $ 333,993,678 69,176,642 28,211,229 993,408 7,666,110 189,215 680,633 $ 106,917,237 $ 8,915,814 7,429,181 7,532,120 2,915,038 1,895,039 1,054,891 4,603,536 (347,731) $ 33,997,888 Fund Equity $ 130,559,406 15,492,324 12,247,294 4,061,418 23,374,298 3,758,064 7,782,254 11,077,767 $ 208,352,825 Note (8) Interfund Balances As mentioned in Note (1 C), individual fund deficits in the consolidated cash pool have been reclassified as of September 30, 2001, as interfund loans from the Capital Improvement Fund, which was selected by management for this purpose. This reclassification results in a corresponding reduction in the cash equity in the Capital Improvement Fund, offset by an increase in interfund receivables. The amounts of the reclassified cash pool deficits, as well as other individual fund interfund payable and receivable balances (current), at September 30, 2001, were as follows: 42 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30,2001 Deficit in Other Deficit in Other Fund Pooled Cash Receivables Pooled Cash Payabies General Fund $ $ $ $ 24,925 Special Revenue Fund: Community Redevelopment Agency 138,627 103,892 Capital Project Fund: Capital Improvement 265,481 17,283,479 Enterprise Funds: Water and Sewer Utility 5,080,457 Gas Utility 5,643,813 Solid Waste Utility 1,514,496 82,474 Recycling Utility 1,425,418 Stormwater Utility 969,346 Yacht Basin and Marina 533,766 55,999 Parking System 1,460,491 Internal Service Funds: Garage 347,172 Administrative Services 217,748 300,000 General Services 64,886 Central Insurance 593,176 Fiduciary Funds: Rehab Loan Expendable Trust 126,854 $ 265,481 $ 17,850,769 $ 265,481 $ 17,850,769 Individual intertund advances (long -term) at September 30, 2001, follow: Advances to Fund Other Funds General Fund $ Special Revenue Fund: Community Redevelopment Agency Enterprise Funds: Solid Waste Utility Yacht Basin and Marina Internal Service Funds: Administrative Services Central Insurance Note (9) Contingencies and Commitments 2,668,867 2,668,867 Advances from Other Funds 74,775 926,596 907,211 189,215 571,070 2,668,867 Utilities Services Tax Revenues Public Service Tax Revenues of the General Fund are pledged as security for the Public Service Tax and Bridge Revenue Bonds, Series 1985 and for the Improvement Revenue Bonds, Series 1995. Sales Tax Revenues Sales Tax Revenues from "Penny for Pinellas" one -cent discretionary infrastructure sales surtax are pledged as security for the Infrastructure Sales Tax Revenue Bonds, Series 2001. 43 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2001 PACT. Inc. PACT, Inc. is a nonprofit corporation formed in 1978 for the purpose of financing, constructing, and operating a performing arts center. Per a Guaranty Agreement dated May 18, 2001, the City guaranteed $1,000,0000 on a $5,000,000 mortgage note for PACT, Inc., used to refinance a previous mortgage with a similar City guarantee. As of September 30, 2001, the remaining principal balance on the mortgage was $4,865,311. City management does not consider it probable that this guarantee will be called, and, accordingly, no amounts have yet been accrued or otherwise recorded in the accompanying financial statements to reflect this possibility. Contingent Loan Guarantee On March 30, 1992, the City Commission approved a contingent loan guarantee of $1,000,000 on a $2,500,000 note for the Chi Chi Rodriguez Youth Foundation, Inc. The proceeds of the note were used to refinance existing foundation debt incurred to construct a golf course on a parcel of City owned land. Subsequently, the note was refinanced with Variable Rate Demand Revenue Bonds (Chi Chi Rodriquez Youth Foundation Project), Series 1998 on August 1, 1998. The remaining principal balance on the bonds as of June 30, 2001, totaled $1,900,000. In the event of default, the City is obligated to contribute $1,000,000 out of legally available non -ad valorem revenues. In addition, the City has the option to retire the entire unpaid balance and assume ownership and operation of the golf course facility. At the present time, management expects the foundation to meet all debt service payments and does not consider it likely that the City's guarantee will be invoked. Outstanding Construction Commitments At September 30, 2001, material outstanding construction commitments were as follows: Construction Commitments Outstanding Capital Projects Funds $ 5,553,404 Enterprise Funds $ 12,814,153 Soil and groundwater contamination site The City owns a property, currently used by the City Gas Division as its administrative offices and operating facility, that has been identified as having soil and groundwater impacts in a June 1990 report prepared by a United States Environmental Protection Agency contractor. The contamination allegedly resulted from the prior operation of a manufactured gas plant. Contamination assessment activities by the City were initiated during 1995 and a draft Contamination Assessment Report was submitted to the Florida Department of Environmental Protection ( "FDEP") on December 29,1999. On March 20, 2000 FDEP requested further assessment be undertaken. On July 25, 2000, FDEP approved the City's proposed scope of work for additional on and off -site assessment activities. Additional field activities were initiated in December 2000. As of this date, all additional work has been completed. The supplemental contamination assessment results were submitted to FDEP as part of the May 2001 and July 2001 site status reports. The cost of this additional work, including preparation and submittal of the May and July 2001 site status reports, was approximately $39,462. Until FDEP has reviewed the Supplemental Contamination Assessment Report and issues its comments, if any, the City is unable to predict with any degree of certainty whether additional work may be necessary to delineate the extent of soil and groundwater impacts at the property. Approximately $487,500 has been recovered from City insurance policies to be applied to any required remediation. Grant Revenues During fiscal year 2001 and prior fiscal years, the City received revenues and contributions related to grants from the State of Florida and the federal govemment. These grants are for specific purposes and are subject to review and audit by the grantor agencies. Such audits could result in requests for reimbursement for expenditures disallowed under the terms of the grants. Based upon prior experience, City management believes such disallowances, if any, will not be significant. 44 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2001 Note (10) Individual Fund Notes Note (10A) Water and Sewer Utility Enterprise Fund Contractual Commitment Under the terms of a 30 -year contract between the City and Pinellas County which is effective through September 30, 2005, the City is required to purchase a minimum of 4 million gallons of water per day on an annual average basis from the County within each calendar year, with a maximum amount of water available to the City of 10 million gallons per day on an annual average basis. Effective October 1, 1995, the rate, which is set by the Pinellas County Board of County Commissioners, increased to $1.7902 per 1,000 gallons, including a $.60 per 1,000 gallon surcharge for funding capital projects. The cost of water purchased from the County during fiscal years 2000 and 2001 was $7,798,095 and $7,305,983, respectively. Note (11) Fund Deficits and Expenditures in Excess of Appropriations The Special Development Special Revenue Fund had "operating transfers out" in excess of appropriations due to an error in the budget document for this fund. The transfers were approved by the City Commission for the receiving fund's budget but not reflected in the Special Development Fund budget as transfers out. The Community Redevelopment Agency Special Revenue Fund had "operating transfers out" in excess of appropriations in the amount of $206,618 due to unbudgeted transfers to other funds. Additionally the fund incurred a current year deficit of $758 as a result of these unbudgeted transfers. The Harborview Center Enterprise Fund accumulated deficit of $3,056,705 is a result of unprofitable operations during its first five years of operation. Management is budgeting to fund this accumulated deficit in the coming years while continuing to closely monitor the performance of the convention center and its profit potential. Note (12) Residual Equity Transfers Between Funds Residual equity transfers for all funds consisted of a net $209,141 transfer out. Transfers include a return of contributed capital to the Special Development Special Revenue Fund (residual equity transfer in) from the Stormwater Utility Fund in the amount of $66,051; a residual equity transfer in to the Water and Sewer Utility Enterprise Fund in the amount of $58,148 (due to the assumption of lease purchase debt by the General Long Term Debt Account Group); a residual equity transfer out of the Water and Sewer Utility Fund to the General Fixed Assets Account Group in the amount of $183,579; a residual equity transfer out of the Stormwater Utility Fund to the General Fixed Assets Account Group in the amount of $70,720; and a residual equity transfer out of the Parking System Enterprise Fund to the General Fixed Assets Account Group in the amount of $79,041. Note (13) Contributed Capital - Proprietary Funds The changes in contributed capital for the proprietary funds during fiscal 2001 follow: Water and Administrative Sewer Stormwater Marina Parking Services Utility Fund Utility Fund Fund Fund Fund Additions Contributions from: Other Funds Federal and State Grants Developers Property Owners Other Governmental Entiites Total Additions Retum of Contributed Capital To Other Funds Net Additions Contributed Capital October 1, 2000 Contributed Capital September 30, 2001 $ $ 37,183 1,295,000 1,324,068 25,792 80,188 331,644 359,306 1,735,900 1,717,281 934,634 $ 934,634 $ 3,522 $ 26,326 (24,789) (66,051) 1,711,111 1,651,230 72,713,267 21,466,274 376,125 379,647 26,326 934,634 379,647 26,326 598,460 755,358 23,396 74,424,378 23,117,504 1,533,094 1,135,005 49,722 The City's other proprietary funds had no change in contributed capital during fiscal year 2001. 45 CITY OF CLEARWATER, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2001 Note (14) Pending Litigation In the normal course of operations the City is a defendant in various legal actions, the ultimate resolution of which is not expected to have a material effect on the financial statements, other than for amounts which have been reserved and recorded as liabilities in the Central Insurance Fund. Note (15) Conduit Debt The City has one issue of conduit debt outstanding as follows: Description / Purpose Original Amount Amount Issue Outstanding Outstanding Amount at 9/30/00 at 9/30/01 Drew Gardens Refunding Bonds / Residential rental facility $ 3,425,000 $ 3,140,000 $ 3,090,000 The bonds do not constitute a debt, liability, or obligation of the City of Clearwater, the State of Florida, or any political subdivision thereof and accordingly have not been reported in the accompanying financial statements. Note (16) Subsequent Events The City issued Improvement Revenue Refunding Bonds, Series 2001, in the principal amount of $11,470,000 during October 2001. The bonds were issued to defease the City's outstanding Florida Public Service Tax and Bridge Revenue Bonds, Series 1985 and Improvement Revenue Bonds, Series 1995. The Series 2001 Bonds and the interest thereon are payable solely from the Public Service Tax and do not constitute a general indebtedness of the City. The bonds are rated "Aaa" and "AAA" by Moody's and Fitch respectively. 46 i CITY OF CLEARWATER, FLORIDA DEFINED BENEFIT PENSION PLANS REQUIRED SUPPLEMENTARY INFORMATION - UNAUDITED Page 1 of 3 Schedules of Funding Progress: I Employees Pension Fund Actuarial Actuarial Actuarial Unfunded AAL Valuation Value of Accrued Liability Unfunded Funded Covered as a Percentage I Date Assets (a) (AAL) - Entry Age AAL Ratio ( Payroll ' of Covered Payroll (b) (b-a) a /b) (c) ((b-a) /c) I 01/01/96 $ 244,744,488 $ 271,124,381 $ 26,379,893 0.90 $ 44,208,964 0.60% 01/01/97 $ 272,346,200 $ 297,892,502 $ 25,546,302 0.91 $ 44,955,345 0.57% 01/01/98 $ 308,596,133 $ 333,250,492 $ 24,654,359 0.93 $ 47,281,198 0.52% I 01/01/99 $ 354,088,751 $ 377,788,731 $ 23,699,980 0.94 $ 49,666,523 0.48% 01/01/00 $ 414,826,422 $ 490,426,940 $ 75,600,518 0.85 $ 50,937,403 1.48% 01/01/01 $ 461,724,610 $ 535,672,208 $ 73,947,598 0.86 $ 54,864,584 1.35% I Firefighters Relief and Pension Fund Actuarial Actuarial Actuarial Unfunded ML Valuation Value of Accrued Liability Unfunded Funded Covered as a Percentage I Date Assets (ML) - Entry Age AAL Ratio Payroll * of Covered Payroll (a) (b) (b -a) (a/b) (c) ((b -a) /c) I 01/01/96 $ 3,360,076 $ 11,236,766 $ 7,876,690 0.30 $ 48,859 161.21% 01/01/97 $ 3,407,925 $ 11,014,979 $ 7,607,054 0.31 $ 49,044 155.11% 01/01/98 $ 3,626,850 $ 10,565,127 $ 6,938,277 0.34 $ 50,573 137.19% I 01/01/99 $ 3,963,395 $ 10,473,888 $ 6,510,493 0.38 $ 15,605 417.21% 01/01/00 $ 4,092,298 $ 9,746,671 $ 5,654,373 0.42 $ N/A 01/01/01 $ 4,668,572 $ 9,527,303 $ 4,858,731 0.49 $ N/A I I* Covered payroll is for the calendar year period used for the actuarial valuation. I I 1 1 47 CITY OF CLEARWATER. FLORIDA DEFINED BENEFIT PENSION PLANS REQUIRED SUPPLEMENTARY INFORMATION - UNAUDITED Page 2 of 3 Schedules of Employer Contributions: Employees' Pension Fund Year Annual (a) Ended Required Percent Sept. 30, Contribution Contributed 1996 $ 3,125,471 92% (b) 1997 $ 4,398,790 76% (b) 1998 $ 3,080,802 119% 1999 $ 840,558 464% 2000 $ - N/A 2001 $ 174,377 2440% (c) (a) The actuarially determined contribution requirements for the City's fiscal year ended September 30, 2001 are based on actuarial valuations as of January 1, 2000. Since the City's contributions are made during its fiscal year, which commences nine months after the date of the actuarial valuations, the City, with approval of State regulatory authorities, is following the practice of adding interest to its required contributions at the assumed rate of return on investments for a period of one year. (b) The contribution is less than the annual required contribution due to contributions in excess of required prior to 1996, resulting in a net pension asset with a balance as of September 30, 2001, totaling $15,845,929. (c) Actual contribution for fiscal 2001 was $4,255,484, as required by City pension ordinance. See footnote 4A. Firemen's Relief Pension Fund Year Annual (a) Ended Required Percent Sept. 30, Contribution Contributed 1996 $ 867,569 100% 1997 $ 910,559 100% 1998 $ 955,920 100% 1999 $ 1,003,758 100% 2000 $ 1,046,856 100% 2001 $ 1,098,990 100% (a) The actuarially determined contribution requirements for the City's fiscal year ended September 30, 2001 are based on actuarial valuations as of January 1, 2000. Since the City's contributions are made during its fiscal year, which commences nine months after the date of the actuarial valuations, the City, with approval of State regulatory authorities, is following the practice of adding interest to its required contributions at the assumed rate of return on investments for a period of nine months. 48 CITY OF CLEARWATER. FLORIDA DEFINED BENEFIT PENSION PLANS REQUIRED SUPPLEMENTARY INFORMATION - UNAUDITED Page 3 of 3 NOTES TO SCHEDULES OF REQUIRED PENSION SUPPLEMENTARY INFORMATION Annual required contributions for the Employees' Pension Fund are calculated using the Entry Age Normal with Frozen Initial Liability method. The amortization method is level dollar closed. The initial unfunded actuarial accrued liability determined at July 1, 1963 is being amortized over a 40 -year period; changes made in 1979 and subsequent years which have had the effect of either increasing or decreasing the actuarial liability are being amortized over a 30 -year period from their effective dates in accordance with State law. Annual required contributions for the Firemen's Relief and Pension Fund are based on the aggregate actuarial cost method, under which the unfunded portion of the present value of the projected benefits is allocated over the present value of a 6.0% per year increasing annuity for the remaining years in the 35 -year funding period which begin January 1, 1972, pursuant to an agreement between the City and the Plan participants. For this purpose, the unfunded actuarial liability is determined after consideration of the available assets at the valuation date. The increasing fixed schedule produced by this method was established in 1988 and will be modified in the future only to the extent that a current valuation indicates a higher required cost level, or if the resulting cost level exceeds 60% of a mill in a current year. The aggregate actuarial cost method does not identify or separately amortize unfunded actuarial liabilities. The actuarially determined contribution requirements for the City's fiscal year ended September 30, 2001, are based on actuarial valuations as of January 1, 2000. Since the City's contributions are made during its fiscal year, which commences nine months after the date of the actuarial valuations, the City, with approval of State regulatory authorities, is following the practice of adding interest to its required contributions at the assumed rate of retum on investments for a period of one year in the case of the Employees' Pension Fund and for nine months in the case of the Firemen's Relief and Pension Fund. Significant actuarial assumptions utilized in the actuarial valuations as of January 1, 2000, in the determination of the annual required contribution are as follows: Employees' Pension Fund (1) Assumed rate of retum on investments of 7% per annum. (2) Projected salary increase at a rate of 5% per year, including both cost -of- living adjustments of 3% and merit or seniority increases at 2 %. (3) Assumed inflation rate of 3% (4) Mortality based on the 1983 Group Annuity Mortality Table for Males with female ages set back 6 years. (5) Pre - retirement withdrawals assumed to occur in accordance with standard scales of moderate tumover rates (Scale 255) for males and heavy tumover rates (Scale 355) for females. (6) Pre- retirement incidence of disability assumed to occur in accordance with a standard scale of moderate disability rates (Class 1, 1952 Inter - Company); rates for females assumed to be twice that for males. Firemen's Relief and Pension Fund (1) Assumed rate of retum on investments of 5.5% compounded annually for both pre- and post- retirement. (2) Assumed benefits grow at annually compounded rate of 2% related to cost -of- living adjustments only. (3) Assumed inflation rate of 3 %. (4) Mortality based on the 1983 Group Annuity Mortality Table for both active and retired; assumed disabled participants will experience mortality according to PBGC Tables 3 & 4 for males and females, respectively. (5) Assumed no withdrawals will occur. (6) No active participants. (7) Assumed value of one mill of ad valorem tax will increase at rate of 5% per year. Significant changes affecting the presented 6-year trend information include: (1) Effective January 1, 1996, several Employees Pension Plan changes took effect. These changes include a benefit increase from 2.5% to 2.75% of average compensation for the last 5 years and a line of service disability benefit reduction from 75% to 66.67% of the average compensation for the last 5 years. (2) As a result of a voter referendum on March 14, 2000, the Employees Pension was modified to provide for a 1.5% cost of living increase, an additional retirement age of 65 with 10 years of services, plus additional eligibility and benefits for police and firefighters effective January 1, 2000. 49 GENERAL FUND The General Fund is used to account for the receipt and expenditure of resources traditionally associated with local govemment and which are not required to be accounted for in another fund. These resources are provided primarily from taxes and are used to provide services which are deemed not susceptible to a user charge financing method. 50 CITY OF CLEARWATER. FLORIDA GENERAL FUND BALANCE SHEET SEPTEMBER 30.2001 WITH COMPARATIVE TOTALS FOR 2000 2001 2000 Assets Cash on Hand and in Banks $ 20,925 21,775 Equity in Pooled Cash and Investments 10,773,512 6,534,260 Receivables: Accounts 313,371 440,417 Taxes 2,169,593 2,314,185 Property Taxes Receivable, Net of Allowance for Uncollectible Taxes of $554,496 in 2001 and $536,805 in 2000 28,070,874 25,723,598 30,553,838 28,478,200 Due from Govemmental Entities 986,337 1,323,636 Inventory 6,004 6,227 Prepaid Expenditures 13,101 14,570 Liabilities and Fund Balances 42,353,717 36,378,668 Liabilities: Accounts and Contracts Payable $ 113,390 130,533 Accrued Payroll 876,359 864,370 Due to Other Funds 24,925 Due to Other Govemmental Entities 8,149 10,969 Deposits 4,192 4,502 Deferred Revenue 28,380,221 26,162,053 Advances from Other Funds 74,775 Total Liabilities 29,482,011 27,172,427 Fund Balance: Reserved for: Prepaid Expenditures Encumbrances Unreserved - Undesignated Total Fund Balance See accompanying notes to Financial Statements. 51 13,101 14,570 1,052,477 1,100,514 1,065,578 1,115,084 11,806,128 8,091,157 12,871,706 9,206,241 42,353,717 36,378,668 CITY OF CLEARWATER. FLORIDA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON -GAAP BUDGETARY BASIS) FISCAL YEAR ENDED SEPTEMBER 30.2001 WITH COMPARATIVE TOTALS FOR 2000 Original Revised Budget Budget Revenues: Taxes: Property $ 25,832,120 26,018,720 Franchise 7,937,460 8,893,700 Utilities 16,167,360 15,213,750 49,936,940 50,126,170 Licenses, Permits, and Fees 3,215,970 3,517,120 Intergovernmental 13,974,190 13,850,749 Charges for Services: Administrative Charges to Other Funds 7,334,790 7,582,590 Other Charges 2,039,460 1,761,330 Fines, Forfeitures, and Penalties 1,498,060 1,565,160 Miscellaneous Revenues 1,209,300 1,694,235 Total Revenues 79,208,710 80,097,354 Expenditures: City Commission 204,950 219,170 City Manager 700,530 699,850 Human Relations 574,810 577,578 Legal 1,237,360 1,236,310 City Clerk 1,023,580 993,110 Public Communications and Marketing 798,660 817,900 Finance 1,812,510 1,811,040 Human Resources 989,580 1,039,990 Non - Departmental 1,007,330 1,007,330 Police 25,464,710 25,547,824 Fire 14,057,710 14,055,640 Public Works - Engineering 2,142,230 2,117,240 Public Works - Transportation and Drainage 5,271,970 5,296,310 Parks and Recreation 13,107,190 13,146,360 Library 4,394,520 4,440,488 Planning & Development Services 3,674,870 3,632,580 Neighborhood Housing Services 590,760 624,510 Marine 460,970 483,210 Economic Development 682,640 718,410 Office of Tourism Development Internal Audit 138,330 138,200 Office of Management & Budget 253,070 258,850 Grant Writing 66,180 66,180 Strategies For Success Total Expenditures (Budgetary Basis) 78,654,460 78,928,080 Excess of Revenue Over Expenditures (Budgetary Basis) 554,250 1,169,274 Other Financing Sources (Uses) (Budgetary Basis): Operating Transfers In Operating Transfers Out 4,381,290 4,271,495 (4,925,320) (5,014,950) (544,030) (743,455) Excess (Deficiency) of Revenues and Other Financing Sources Over Expenditures and Other Financing Uses (Budgetary Basis) 10,220 425,819 Encumbered Purchase Orders, Beginning of Year Encumbered Purchase Orders, End of Year Excess (Deficiency) of Revenues and Other Financing Sources Over Expenditures and Other Financing Uses (GAAP Basis) 10,220 Fund Balances, Beginning of Year 9,206,241 Fund Balances, End of Year $ 9,216,461 See accompanying notes to Financial Statements. 52 425,819 9,206,241 9,632,060 Actual Variance Favorable Unfavorable Actual 25,973,420 (45,300) 24,269,342 8,700,706 (192,994) 7,743,009 15,486,388 272,638 15,242,594 50,160,514 34,344 47,254,945 3,495,192 (21,928) 3,266,946 13,797,228 (53,521) 13,212,246 7,613,256 30,666 6,971,733 1,765,411 4,081 1,504,268 1,550,505 (14,655) 1,598,033 2,314,275 620,040 1,620,123 80,696,381 599,027 75,428,294 205,578 13,592 189,531 569,876 129,974 750,933 573,373 4,205 503,353 1,137,040 99,270 1,023,039 901,300 91,810 900,019 707,801 110,099 738,410 1,677,123 133,917 1,417,913 1,049,506 (9,516) 996,024 947,254 60,076 1,488,479 24,999,095 548,729 25,141,860 13,197,724 857,916 12,594,854 2,093,013 24,227 1,993,198 5,207,449 88,861 4,913,630 12,883,016 263,344 12,188,158 4,322,842 117,646 3,543,119 3,482,449 150,131 3,426,019 559,494 65,016 585,623 487,027 (3,817) 470,803 593,340 125,070 542,889 227,646 128,998 9,202 96,922 257,652 1,198 236,524 47,260 18,920 122,476 76,028,210 2,899,870 74,091,422 4,668,171 3,498,897 1,336,872 4,040,154 (231,341) 4,017,737 (4,994,823) 20,127 (5,965,994) (954,669) (211,214) (1,948,257) 3,713,502 3,287,683 (611,385) (1,100,514) (1,100,514) (772,462) 1,052,477 1,052,477 1,100,514 3,665,465 3,239,646 (283,333) 9,206,241 9,489,574 12,871,706 3,239,646 9,206,241 53 This Page Intentionally Left Blank 1 1 1 1 1 1 1 i 1 f 1 1 1 1 1 1 1 SPECIAL REVENUE FUNDS Special Revenue Funds are used to account for the receipt, custody, and expenditure of revenues from specific sources for which the City is required legally to limit expenditures to particular uses and to account separately for these resources. Special Programs Fund Special Development Fund Community Redevelopment Agency to account for grants and contributions, the use of which is restricted for certain projects. to account for impact fees, property taxes for road improvements, local option gas taxes, infrastructure taxes and other revenues which are restricted legally or by City Commission policy to be used for certain capital improvement projects. to account for receipt, custody and expenditure of property tax increment funds associated with related redevelopment projects. Local Housing Assistance to account for monies allocated to the City under the Local Housing Trust Fund Assistance grant program. 55 CITY OF CLEARWATER, FLORIDA SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET SEPTEMBER 30.2001 WITH COMPARATIVE TOTALS FOR 2000 Assets Cash on Hand and in Banks Equity in Pooled Cash and Investments Receivables: Notes - Noncurrent Mortgage Loans Rehabilitation Advances Property Taxes Receivable, Net of Allowance for Uncollectible Taxes of $ 69,828 for 2001 and $67,577 for 2000 Other Special Special Community Programs Development Redevelopment Fund Fund Agency 4,580,445 289 289 6,645,112 10,000 1,881,395 1.891.395 Advances to Other Funds Due from Other Governmental Entities: Grants 769,609 Other Governmental Receivables 1,299,914 769,609 1,299, 914 Land Held for Resale 100 102.027 102.027 1,171,328 $ 5,350,343 9 836 421 1,273,455 Liabilities and Fund Balances Liabilities: Accounts and Contracts Payable $ 84,336 Accrued Payroll 28,564 Due to Other Governmental Entities 2,262 508,646 Construction Escrows Due to Other Funds 103,892 Due to Other Funds (Deficit in Pooled Cash) 138,627 Advances from Other Funds 926,596 Deferred Revenue 1,881,395 102,027 Total Liabilities 115,162 2,390,041 1,271,142 Fund Balances: Reserved for. Encumbrances 2,313 Advances to Other Funds Noncurrent Notes Receivable 10,000 Special Programs 2,314,036 2,314,036 10,000 2,313 Unreserved: Designated for Special Programs 1,989,744 5,411,605 Undesignated 931,401 2,024,775 Total Fund Balances 5,235,181 7,446,380 2,313 $ 5,350,343 9 836 421 1 273 455 See accompanying notes to Financial Statements. 56 Local Housing Totals Assistance Trust Fund 2001 2000 100 100 1,231,432 12,456,989 12,945,137 10,000 12,500 3,360,799 3,360,799 2,784,839 51,001 51,001 51,901 1,881,395 1,725,453 102,316 111,440 3,411,800 5,405,511 4,686,133 86,291 769,609 469,770 1,299,914 1,285,247 2,069,523 1,755,017 1,171,328 1,171,328 4 643 232 21 103 451 20 644 006 84,336 221,745 28,564 13,099 510,908 278,838 222,897 222,897 120,150 103,892 89,875 138,627 39,913 926,596 1,038,569 86 1,983,508 1,835,414 222,983 3,999,328 3,637,603 2,313 3,071 86,291 10,000 12,500 2,314,036 2,058,164 2,326,349 2,160,026 7,401,349 9,954,357 4,420,249 7,376,425 4,892,020 4,420,249 17,104,123 17,006,403 41643,232 21,103,451 20,644,006 57 CITY OF CLEARWATER, FLORIDA SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FISCAL YEAR ENDED SEPTEMBER 30.2001 WITH COMPARATIVE TOTALS FOR 2000 Special Special Programs Development Fund Fund Revenues: Taxes $ 1,738,590 Licenses, Permits and Fees 913,445 Intergovernmental Revenues: Grants 3,061,578 Infrastructure Tax 8,385,149 Local Option Sales Tax 903,741 Other 3.061.578 9,288,890 Fines, Forfeitures and Penalties 464,562 Miscellaneous Revenues: Rental Income Earnings on Investments 410,358 2,469,991 Donations 244,647 Other 1,218,436 1,873,441 2,469,991 Total Revenues 5,399,581 14,410,916 Expenditures: Current: General Government 679,821 80 Public Safety 1,938,868 Physical Environment 372,503 Economic Environment 653,480 Human Services 128,850 Culture and Recreation 519,981 Capital Outlay 863,432 Total Expenditures 5,156,935 80 Excess of Revenues Over Expenditures 242,646 14,410,836 Other Financing Sources (Uses): Operating Transfers In 577,861 Operating Transfers In - Component Unit Operating Transfers Out (644,500) (15,368,573) Operating Transfers Out - Component Unit (66,639) (15,368,573) Excess (Deficiency) of Revenues and Other Financing Sources Over Expenditures and Other Financing Uses 176,007 (957,737) Fund Balances, Beginning of Year 5,059,174 8,338,066 Residual Equity Transfers In 66,051 Fund Balances, End of Year $ 5 235 181 7,446,380 See accompanying notes to Financial Statements. 58 Community Local Housing Totals Redevelopment Assistance Agency Trust Fund 2001 2000 239,264 239.264 977,094 977.094 1,738,590 1,818,306 913,445 2,165,853 4,038,672 3,174,989 8,385,149 903,741 8,285,884 239,264 1,082,428 13.566.826 12.543.301 464,562 323,415 9,463 9,463 8,103 66,196 95,513 3,042,058 1,551,164 244,647 248,272 1,445 1,219,881 433,578 77,104 95,513 4,516,049 2,241,117 316,368 1,072,607 21,1.99,472 19,091,992 679,901 408,051 1,938,868 1,542,112 372,503 446,037 194,226 171,552 1,019,258 756,795 128,850 130,093 519,981 477,819 863,432 1,118,203 194,226 171,552 5,522,793 4,879,110 122,142 901,055 15,676,679 14,212,882 320,914 898,775 1,084,050 89,044 89,044 39,022 (493,007) (86,898) (16,592,978) (12,203,427) (39,851) (39,851) (31,174) (122,900) (86,898) (15,645,010) (11,111,529) (758) 814,157 31,669 3,101,353 3,071 3,606,092 17,006,403 13,593,075 66.051 311.975 2,313 4,420,249 59 17 104 123 17 006 403 1 CITY OF CLEARWATER. FLORIDA SPECIAL DEVELOPMENT FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET (GAAP BASIS) AND ACTUAL FISCAL YEAR ENDED SEPTEMBER 30.2001 WITH COMPARATIVE TOTALS FOR 2000 2001 2000 Variance Favorable Actual Budget Actual (Unfavorable) Revenues: Taxes $ 1,728,820 1,738,590 9,770 1,818,306 1 Licenses, Permits, and Fees: Development Impact Fees 255,680 262,250 6,570 65,107 Fees for Drainage- Sidewalks 1,783 1,783 10,683 Fees for Parking 1,680 1,680 1,503,000 Open Space Fees 130,000 127,431 (2,569) 156,408 Recreation Facility Impact Fees 10,000 13,150 3,150 32,800 Recreation Land Impact Fees 21,840 13,478 (8,362) 127,443 Transportation Impact Fees 470,000 493,673 23,673 270,412 887,520 913,445 25,925 2,165,853 Intergovernmental 9,535,230 9,288,890 (246,340) 9,185,821 1 Miscellaneous: Earnings on Investments 800,000 2,469,991 1,669,991 1,181,393 800,000 2,469,991 1,669,991 1,181,393 Total Revenues 12,951,570 14,410,916 1,459,346 14,351,373 Expenditures: I/ Current: Central Government 80 (80) Excess of Revenues Over Expenditures 12,951,570 14,410,836 1,459,266 14,351,373 Other Financing Uses: Operating Transfers Out (9,395,936) (15,368,573) (5,972,637) (11,441,073) Excess (Deficiency)of Revenues Over Expenditures and Other Financing Uses 3,555,634 (957,737) (4,513,371) 2,910,300 Fund Balances, Beginning of Year 8,338,066 8,338,066 5,115,791 II Residual Equity Transfers In 66,051 66,051 311,975 Fund Balances, End of Year $ 11,893,700 7,446,380 (4,447,320) 8,338,066 ' I I See accompanying notes to Financial Statements. 1 60 1 CITY OF CLEARWATER. FLORIDA COMMUNITY REDEVELOPMENT AGENCY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (GAAP BASIS) AND ACTUAL FISCAL YEAR ENDED SEPTEMBER 30.2001 WITH COMPARATIVE TOTALS FOR 2000 Revenues: Intergovemmental Miscellaneous Revenues: Rental Income Eamings on Investments Other 2001 Budget Actual $ 239,264 239,264 11,812 10,000 21,812 Total Revenues 261,076 Expenditures: Current - Economic Environment Total Expenditures 345,448 345.448 9,463 66,196 1,445 77,104 316,368 55,292 Variance Favorable Unfavorable (2,349) 56,196 1,445 55.292 Actual 182,491 8,103 55,785 35,408 99,296 281.787 194,226 151,222 167,906 194, 226 151,222 167, 906 Excess (Deficiency) of Revenues Over Expenditures (84,372) 122,142 Other Financing Sources (Uses): Operating Transfers In Operating Transfers In - Component Unit (DDB) Operating Transfers Out Operating Transfers Out - Component Unit (DDB) 206,514 113,881 320,913 320,914 1 250,935 89,698 89,044 (654) 39,022 (286,389) (493,007) (206,618) (375,593) (39,850) (39,851) (1) (31,174) 84,372 (122,900) (207,272) (116,810) (Deficiency) of Revenues and Other Financing Sources Over Expenditures and Other Financing Uses (758) (758) (2,929) Fund Balance, Beginning of Year 3,071 3,071 6,000 Fund Balance, End of Year $ 0 ......2,313_. 071 See accompanying notes to Financial Statements. 61 This Page Intentionally Left Blank 62 DEBT SERVICE FUNDS Debt Service Funds provide separate accounting records for all debt interest, principal, and reserve requirements for all General Long -Term Debt. Debt of Proprietary Funds is serviced through restricted accounts maintained within the individual Enterprise or Internal Service Fund associated with the debt. Improvement Revenue Bonds Debt Service Fund Public Service Tax and Bridge Revenue Bonds Debt Service Fund Notes and Mortgages Debt Service Fund to account for the advance monthly accumulation of resources by transfer of Public Service Tax revenues from the General Fund and the payment of currently maturing installments of principal and interest during each fiscal year. to account for the advance monthly accumulation of resources by transfer of Public Service Tax revenues from the General Fund; the retirement of currently maturing installments of principal and interest during each fiscal year. As described in the notes to the general purpose financial statements, this fund is responsible for only a portion of the total debt service, with the remainder being allocated to the Parking Fund. to account for the advance monthly accumulation of resources by transfer of General Revenues from the General and Special Revenue Funds and the payment of currently maturing installments of principal and interest on the various note and mortgage obligations of the govemmental funds during each fiscal year. Spring Training Facility Debt to account for the advance monthly accumulation of resources and the Service Fund payment of currently maturing installments of principal and interest for debt to be issued in fiscal 2002 for a Spring Training Facility. Infrastructure Revenue Bonds Debt Service Fund to to account for the advance monthly accumulation of resources by transfer of Sales Tax revenues from the Special Development Special Revenue Fund and the payment of currently maturing installments of principal and interest during each fiscal year. 63 CITY OF CLEARWATER. FLORIDA DEBT SERVICE FUNDS COMBINING BALANCE SHEET SEPTEMBER 30, 2001 WITH COMPARATIVE TOTALS FOR 2000 Assets Equity in Pooled Cash and Investments S liabilities and Fund Balances Accounts Payable Accrued Interest Purchased Total Liabilities Fund Balances: Reserved for. Debt Service: Current Requirements - Principal Current Requirements - Interest Future Requirements Unreserved: Designated for Debt Service Total Fund Balances Improvement Revenue Bonds Debt Service Fund 220,658 220,658 $ 126,667 93,991 220,658 220,658 220,658 See accompanying notes to Financial Statements. Public Service Tax and Bridge Revenue Bonds Debt Service Fund 120,845 120,845 41,189 8,121 71,535 120,845 120,845 120,845 Notes and Mortgages Debt Service Fund Spring infrastructure Training Sales Tax Totals Facility Revenue Bonds Debt Service Debt Service Fund Fund 2001 2000 647,912 662,800 647,912 662,800 1,652,215 338,155 1,652,215 338,155 1,571 1,571 110,205 110,205 111,776 111,776 167,856 159,352 551,024 653,136 105,063 71,535 73,740 551,024 892,527 338,155 647,912 647,912 647,912 551,024 1,540,439 338,155 647,912 662,800 1,652,215 338,155 65 CITY OF CLEARWATER. FLORIDA DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES FISCAL YEAR ENDED SEPTEMBER 30.2001 WITH COMPARATIVE TOTALS FOR 2000 Revenues: Grants Earnings on Investments Public Improvement Service Tax Notes Revenue and Bridge and Bonds Revenue Bonds Mortgages Debt Service Debt Service Debt Service Fund Fund Fund 19,188 10,163 Expenditures: Debt Service Requirements - Principal 180,000 47,222 1,241,085 Debt Service Requirements - Interest & Fiscal Charges 569,166 27,858 191,867 Bond Issuance Costs Total Expenditures 749 166 75,080 1,432,952 Excess (Deficiency) of Revenues Over Expenditures (729,978) (64,917) (1,432,952) Other Financing Sources: Bond Proceeds Operating Transfers In 735,130 63,113 1.432.952 Excess (Deficiency) of Revenues and Other Financing Sources Over Expenditures Fund Balances, Beginning of Year Fund Balances, End of Year See accompanying notes to Financial Statements. 735.130 63,113 1.432.952 5,152 (1,804) 215,506 122,649 $ 220,658 120 845 0 66 1 i 1 1 1 i 1 1 1 Spring Infrastructure Training Revenue Totals Facility Bonds Debt Service Debt Service Fund Fund 2001 2000 634,465 634,465 13,447 6,068 48,866 19,894 1,468,307 1,375,978 788,891 765,268 418,265 418,265 418,265 2,675,463 2,141,246 647,912 (412,197) (1,992,132) (2,121,352) 418,265 418,265 544,956 2,776,151 2,125,021 963,221 3,194,416 2,125,021 647,912 551,024 1,202,284 3,669 338,155 334,486 647,912 551,024 1,540,439 338155 67 This Page Intentionally Left Blank 68 CAPITAL PROJECTS FUNDS Capital Projects Funds are used to account for resources to be used for acquisition or construction of major capital improvement projects including property acquisitions, a major construction undertaking, or a major improvement to an existing facility or property, with a cost greater than $25,000 and a minimum useful life of at least five years. Capital Improvement Fund to provide combined accounting presentation for all City capital improvement projects except those financed from proprietary funds or bond proceeds where bond ordinance provisions require the segregation of bond proceeds in separate funds. Sales Tax Revenue to provide separate accounting records for the financing and Construction Fund construction of the new entryway and roundabout at Clearwater Beach 69 CITY OF CLEARWATER. FLORIDA CAPITAL PROJECTS FUNDS BALANCE SHEET SEPTEMBER 30.2001 WITH COMPARATIVE TOTALS FOR 2000 Sales Tax Capital Revenue Improvement Construction Fund Fund Assets Totals Equity in Pooled Cash and Investments $ 52,257,818 14,846,113 67,103,931 41,433,040 Other Receivables 16,298 Improvement Liens 104,899 104,899 127,362 Due from Other Funds Due from Other Funds (Deficit in Pooled Cash) 265,481 265,481 17,560,428 $ 52,628,198 14,846,113 67,474,311 59,137,128 jjabilities and Fund Balances Liabilities: Accounts and Contracts Payable $ 777,352 678,406 1,455,758 911,504 Due to Other Funds 17,283,479 17,283,479 33,339,839 Due to Other Funds (Deficit in Pooled Cash) 8,515,313 Deferred Assessment Liens 104,899 104,899 127,362 Total Liabilities 18,165,730 678,406 18,844,136 42,894,018 Fund Balances: Reserved for Encumbrances 6,070,136 6,070,136 5,411,608 Unreserved: Designated for Capital Project Appropriations 28,392,332 14,167,707 42,560,039 19,691,129 Undesignated Deficit (8,859,627) Total Fund Balances See accompanying notes to Financial Statements. 34,462,468 14,167,707 48,630,175 16,243,110 $ 52,628,198 14,846,113 67,474,311 59137,128 70 CITY OF CLEARWATER. FLORIDA CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES FISCAL YEAR ENDED SEPTEMBER 30.2001 WITH COMPARATIVE TOTALS FOR 2000 Sales Tax Capital Revenue Totals Improvement Construction Fund Fund 2001 2000 Revenues: Intergovernmental Revenues: Grants $ 5,100,000 5,100,000 234,058 Miscellaneous: Eamings on Investments 42,033 42,033 (13,997) Special Assessments 31,045 31,045 54,087 Other 20,000 2,772 22,772 26,545 93,078 2,772 95,850 66,635 Total Revenues Expenditures: Capital Outlay Deficiency of Revenues Over Expenditures 5,193,078 2,772 5,195,850 300,693 17,813,105 24,000,109 41,813,214 15,767,475 (12,620,027) (23,997,337) (36,617,364) (15,466,782) Other Financing Sources (Uses): Proceeds of General Indebtedness 2,454,265 46,925,017 49,379,282 2,149,140 Operating Transfers In 19,765,391 19,765,391 14,496,065 Operating Transfers In - Component Unit 10,000 Operating Transfers Out (140,244) (140,244) (112,715) 22,079,412 46,925,017 69,004,429 16,542,490 Excess of Revenues and Other Financing Sources Over Expenditures and Other Financing Uses Fund Balances, Beginning of Year 9,459,385 22,927,680 32,387,065 1,075,708 25,003,083 Fund Balances, End of Year $ 34,462,468 See accompanying notes to Financial Statements. 71 (8,759,973) 16,243,110 15,167,402 14,167,707 48,630,175 16,243,110 This Page Intentionally Left Blank 72 ENTERPRISE FUNDS Enterprise Funds are used to account for the financing, acquisition, operation and maintenance of govemmental facilities and services that are supported primarily by user charges. Water and Sewer Utility Gas Utility to account for the financing, construction, operation and maintenance of the water and sewer services of the City from charges made to users of the service. The service area for water and sewer extends beyond the City limits. to account for the financing, construction, operation and maintenance of the gas service of the City from charges made to users of the service. The service area for gas extends beyond the City limits. Solid Waste Utility to account for the financing, construction, operation and maintenance of the solid waste service of the City from charges made to users of the service. The service area for solid waste is coterminous with the City limits. Recycling to account for the financing, processing, operation and maintenance of the Citys recycling service from charges made to users of the services and funds received from the sale of recyclable commodities processed to meet market requirements. The service area extends beyond the City limits. Stormwater Utility to account for the financing, construction, operation and maintenance of the stormwater management system of the City from charges made for each developed property. The stormwater management area is coterminous with the City limits. Yacht Basin and Marina to account for the financing, operation and maintenance of the 205 -slip City marina and associated real property on Clearwater Beach from rents collected from users. Parking System Harborview Center to account for the financing, construction, operation and maintenance of the Citys parking system, including on- and off - street parking on Clearwater Beach and Downtown Clearwater from parking charges. to account for the renovation, operation, and maintenance of a former department store building, creating a combined retail and convention center facility. 73 CITY OF CLEARWATER. FLORIDA ENTERPRISE FUNDS COMBINING BALANCE SHEET SEPTEMBER 30, 2001 WITH COMPARATIVE TOTALS FOR 2000 Water and Sewer Gas Solid Waste Recycling Utility Utility Utility Utility Assets Current Assets: Cash on Hand and in Banks $ 400 700 200 Equity in Pooled Cash and Investments 4,377,983 1,654,149 5,337,370 1,395,758 Accounts and Contracts Receivable: Billed 2,660,003 1,408,402 1,076,768 88,810 Unbilled Charges Estimated 1,156,400 957,900 559,806 83,507 3,816,403 2,366,302 1,636,574 172,317 Less: Allowance for Uncollectible Accounts (259,306) (145,587) (63,454) (4,989) Total Receivables, Net 3,557,097 2,220,715 1,573,120 167,328 Due from Other Funds 2,930,946 5,643,813 1,514,496 1,425,418 Due from Other Govemmental Entities 275,136 Inventories, at Cost 446,905 506,954 Prepaid Expenses and Other Assets 4,664 Total Current Assets 11,593,131 10,026,331 8,425,186 2,988,504 Restricted Assets: Equity in Pooled Cash and Investments 27,141,005 1,585,753 707,799 Due from Other Funds 2,149,511 Due from Other Govemmental Entities Investments 3,058,741 Interest Receivable 86,196 Total Restricted Assets _ 32,435,453 1,585,753 707,799 Deferred Charges 3,352,570 1,551,465 Net Pension Asset 1,406,662 761,849 816,007 160,313 Property, Plant and Equipment, Net of Accumulated Depreciation 161,641,817 33,661,058 4,928,480 1,033,242 See accompanying notes to Financial Statements. $ 210 429,633 47m J 14,877,472 4,182,059 assaleszwas 74 Page 1 of 2 Yacht Basin Totals Stormwater and Parking Harborview Utility Marina System Center 2001 2000 817 22,000 100 24,217 16,950 721,928 856,307 3,153,682 49,996 17,547,173 8,460,520 345,913 164,847 5,744,743 5,258,097 400,000 3,157,613 3,176,158 745,913 164,847 8,902,356 8,434,255 (20,364) (493,700) (367,648) 725,549 164,847 8,408,656 8,066,607 969,346 533,766 1,460,491 14,478,276 29,520,548 239,997 515,133 192,156 15,986 969,845 1,097,517 4,664 4,506 2,416,823 1,406,876 4876170 214,943 41,947,964 47,358,804 6,134 ,507 64,850 35,633,914 33,862,043 2,149,511 3,507,075 455,000 455,000 70,073 3,058,741 2,990,334 86,196 86,196 6,589,507 64,850 41,383,362 40,515,721 107,585 5,011,620 5,386,021 275,320 108,335 102,766 3,631,252 2,972,954 22,827,785 2,784,053 3,717,547 11,425,498 242,019,480 232,045,512 32,217,020 4,299,264 8,761,333 11,640,441 333,993,678 328,279,012 75 (Continued) CITY OF CLEARWATER. FLORIDA ENTERPRISE FUNDS COMBINING BALANCE SHEET, Continued SEPTEMBER 30.2001 WITH COMPARATIVE TOTALS FOR 2000 Water and Sewer Gas Solid Waste Recycling Utility Utility Utility Utility Liabilities and Fund Equity Current Liabilities (Payable from Current Assets): Accounts and Contracts Payable $ 1,100,167 870,935 352,498 8,299 Accrued Payroll 572,455 63,463 72,460 14,407 Accrued Compensated Absences 284,512 348,339 50,760 Accrued Interest Payable 98,037 57,357 Due to Other Funds 82,474 Due to Other Funds (Deficit in Pooled Cash) Deposits Deferred Revenue 761,716 Current Portion of Long -Term Liabilities: Revenue Bonds 860,833 559,167 Notes, Loan Pool Agreement and Acquisition Contracts 45,825 37,295 Total Current Liabilities (Payable from Current Assets) 2,677,317 2,597,150 893066 73,466 Current Liabilities (Payable from Restricted Assets): Construction Contracts Payable 1,429,726 Accrued Interest Payable 413,947 124,748 Current Portion of Long -Term Liabilities, Revenue Bonds 4,304,167 50,833 Customer Deposits 1,868,428 1,110,172 Total Current Liabilities (Payable from Restricted Assets) 8,016,268 1,285,753 Total Current Liabilities 10,693585 3,882,903 35,905 707,799 743,704 1,636,770 47,175 47.175 120.641 Long -Term Liabilities, Excluding Current Portion: Revenue Bonds 69,020,815 28,211,229 Notes, Loan Pool Agreement and Acquisition Contracts 155,827 86,197 Advances from Other Funds 907,211 Total Long -Term Liabilities 69,176,642 28,211,229 993,408 Total Liabilities 79,870,227 32,094,132 2,630,178 120,641 Contributed Capital: Other Funds 415,256 654,532 129,893 251,057 Federal and State Grants 17,837,194 90,194 Developers 39,145,430 Property Owners 5,145,306 37,005 Other Governmental Entities 11,881,192 _ 367 Total Contributed Capital 74,424,378 691,537 220,454 251,057 Retained Earnings: Reserved for: Revenue Bond Requirements: Debt Service 6,294,545 Sinking Fund - Term Maturities 2,878,376 Renewals and Replacements 13,173,996 300,000 22,346,917 300,000 Employees' Pension Benefits 1,406,662 761,849 Unreserved (Deficit) 32,381,449 13,738,938 Total Retained Earnings (Deficit) 56,135,028 14,800,787 Total Fund Equity 130,559,406 15,492,324 See accompanying notes to Financial Statements. 1 1 1 r 1 816,007 160,313 11,210,833 3,650,048 12,026,840 3,810,361 12,247,294 4,061.418 $ 210,429,633 47,586,456 14a 4182,059 76 Yacht Basin Stormwater and Utility Marina 254,388 25,358 103,323 138,715 521,784 369,566 165,262 120,000 654,828 1,176,612 7,197,267 468,843 7,666,110 8,842,722 18,704,249 1,345,000 87,462 2,980,793 23,117,504 Parking System Harborview Center 222,843 12,353 40,486 55,999 18,402 56,385 11,961 49,197 1,944 2,760 4,262 1,902 146,125 272,634 351.985 445,519 117,155 562.674 4,502 21,310 25,812 351,985 298,446 116,677 563,956 189,215 189,215 680,633 541,200 979,079 562,674 Page 2 of 2 Totals 2001 2000 3,311,034 2,972,077 772,457 314,381 876,617 1,222,740 155,394 138,473 82,474 8,858,319 137,501 138,019 764,476 1,424,262 1,355,463 369,862 226,030 7,950,076 15,169,503 1,846,467 116,883 744,364 790,774 4,496,310 4,272,314 3,686,399 3,576,707 10,773,540 8,756,678 18,723,616 23,926,181 104,545,988 108,109,035 1,274,823 466,368 1,096,426 1,075,976 106,917,237 109 651379 562,674 125,640,853 133,577,560 1,301,092 758,880 13,926,554 36,141,513 19,272,388 207,918 39,440,810 232,002 5,414,313 376,125 15,238,477 1,533,094 1,135,005 14,134,472 115,507,501 35,326 6,329,871 2,878,376 13,473,996 35,326 22,682,243 275,320 108,335 102,766 3,631,252 (18,526) 2,116,635 6,509,157 (3,056,705) 66,531,829 256,794 2,224,970 6,647,249 (3,056,705) 92,845,324 23,374,298 3,758,064 7,782,254 11,077767 208,352,825 32,217,020 4,299,264 8,761,333 11,640,441 333,993,678 77 35,257,014 17,977,388 37,767,308 5,657,767 14,171,402 110.830.879 6,329,871 2,875,664 11,789,356 20,994,891 2,972,954 59,902,728 83,870,573 194.701,452 328,279,012 CITY OF CLEARWATER FLORIDA ENTERPRISE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS FISCAL YEAR ENDED SEPTEMBER 30.2001 WITH COMPARATIVE TOTALS FOR 2Q00 Water and Sewer Gas Solid Waste Recycling Utility Utility Utility Utility Operating Revenues: Sales to Customers $ 35,109,081 28,935,853 797,713 Service Charges to Customers 455,554 1,287,762 15,511,855 9,726 User Charges to Customers 102,577 1,411,068 Rentals Total Operating Revenues 35,564,635 30,223,615 15,614,432 2,218,507 Operating Expenses: Personal Services 6,845,608 3,573,543 4,408,765 818,796 Purchases for Resale 7,305,983 15,249,937 27,538 189,170 Operating Materials and Supplies 1,857,035 161,417 208,295 70,158 Transportation 701,150 420,633 2,683,758 287,424 Utility Service 1,555,980 66,218 54,386 6,353 Solid Waste Dumping Charges 4,553,562 Depreciation 4,920,586 1,141,666 445,866 131,553 Interfund Administrative Charges 4,919,420 1,668,640 1,175,290 431,620 Other Current Charge s: Professional Fees 1,080,187 156,747 27,601 508 Advertising 410,950 5,837 333 Communications 93,318 161,185 48,078 4,918 Printing and Binding 5,584 Insurance 232,360 93,970 140,220 33,230 Repairs and Maintenance 2,010,560 482,332 63,723 25,546 Rentals 43,609 1,690 1,350 Miscellaneous 196,105 78,230 27,418 9,477 Data Processing Charges 363,451 287,322 123,410 26,900 Taxes 1,926,674 Provision for Estimated Uncollectible Accounts 175,393 170,274 54,931 6,677 Total Other Current Charges 4,151,374 3,816,877 492,908 108,939 Total Operating Expenses 32,257,136 26,098,931 14,050,368 2,044,013 Operating Income (Loss) 3,307,499 4,124,684 1,564,064 174,494 Nonoperating Revenues (Expenses): Earnings on Investments 3,848,458 774,181 625,826 254,829 Interest Expense and Fiscal Charges (3,524,905) (1,491,895) (113,308) (684) Amortization of Bond Discount and Issue Costs (273,511) (121,677) Loss on Exchange of Assets (4,555) (221) Losses from Writedowns and Replacements of Fixed Assets (4,311) Recycling Program Incentive Grant 105,445 35,790 Other 72,904 204,043 157,400 122,946 (639,903) 771,052 289,714 Income (Loss) Before Operating Transfers 3,430,445 3,484,781 2,335,116 464,208 Operating Transfers In 1,807 Operating Transfers Out (1,654,171) (1,014,804) (616,470) (90,830) (1,654,171) (1,014,804) (616,470) (89,023) Net Income (Loss) 1,776,274 2,469,977 1,718,646 375,185 Retained Earnings (Deficit), Beginning of Year 54,484,185 12,330,810 10,308,194 3,435,176 Residual Equity Transfers In 58,148 Residual Equity Transfers Out (183,579) Retained Earnings (Deficit), End of Year $ 56,135,028 14,800,787 12,026,840 3,810,361 See accompanying notes to Financial Statements. 78 1 1 t 1 1 1 r 1 1 i i 1 Yacht Basin Totals Stormwater and Parking Harborview Utility Marina System Center 2001 2000 5,011,354 1,667,563 71,521,564 61,622,034 30,468 168,560 17,463,925 16,313,751 52,284 3,870,439 5,436,368 4,990,061 1,093,300 10,559 1,952,813 3,056,672 2,880,505 5,041,822 2,813,147 4,049,558 1,952,813 97,478,529 85,806,351 1,504,608 727,692 712,539 18,591,551 16,876,283 1,327,201 1,001,316 25,101,145 18,969,250 70,085 76,531 58,163 17,299 2,518,983 2,189,866 520,517 8,015 57,553 11,539 4,690,589 4,081,598 150,428 38,881 136,282 2,008,528 1,820,571 4,553,562 4,455,706 1,075,362 201,562 238,140 568,946 8,723,681 8,540,339 1,063,530 198,130 802,770 5,320 10,264,720 9,640,300 142,926 15,892 686,902 774,579 2,885,342 2,633,052 12,980 1,272 29,941 461,313 394,652 16,004 23,380 13,613 21,078 381,574 348,665 2,432 4,832 12,848 8,846 26,440 13,650 12,760 28,353 580,983 527,199 37,402 48,131 20,870 43,929 2,732,493 2,280,648 1,080 171,440 1,191 220,360 177,233 141,504 49,158 6 14,883 516,781 417,639 60,910 27,420 26,910 916,323 788,610 354 16,329 1,943,357 1,272,168 24,355 2,592 434,222 232,889 449,541 194,477 933,773 937,707 11,085,596 9,081,601 4,683,643 2,884,036 2,841,819 2,678,409 87,538,355 75,655,514 358,179 (70,889) 1,207,739 (725,596) 9,940,174 10,150,837 271,755 131,782 278,465 6,185,296 3,788,635 (246,930) (18,445) (30,373) (85,010) (5,511,550) (5,652,095) (6,125) (1,663) (402,976) (401,245) (1,703) (6,479) (8,839) (4,311) (5,716) 141,235 113,332 9,716 332,345 26,213 190 802,811 550,106 28,416 445,682 272,642 (86,523) 1,204,026 (1,615,822) 386,595 374,793 1,480,381 (812,119) 11,144,200 8,535,015 37,679 2,200,000 2,239,486 (656,667) (100,800) (4,133,742) (3,619,359) (656,667) (63,121) 2,200,000 (1,894,256) (3,619,359) (270,072) 311,672 1,480,381 1,387,881 9,249,944 4,915,656 597,586 1,913,298 5,245,909 (4,444,586) 83,870,572 78,954,917 58,148 (70,720) (79,041) (333,340) 256,794 2,224,970 6,647,249 (3,056,705) 92,845,324 83,870,573 79 CITY OF CLEARWATER, FLORIDA ENTERPRISE FUNDS COMBINING STATEMENT OF CASH FLOWS FISCAL YEAR ENDED SEPTEMBER 30.2001 WITH COMPARATIVE TOTALS FOR 2000 Cash Flows from Operating Activities: Cash Received from Customers Cash Payments to Suppliers Cash Payments to Employees Cash Payments to Other Funds Other Revenues Net Cash Provided (Used) by Operating Activities Cash Flows from Noncapital Financing Activities: Operating Transfers In Operating Transfers Out Grant Revenue Interest Paid Receipt of Cash on Loans to/from Other Funds Payment of Cash on Loans to/from Other Funds Net Cash Provided (Used) by Noncapital Financing Activities Cash Flows from Capital and Related Financing Activities: Principal Payments on Debt Interest Paid Acquisition of Fixed Assets Sale of Fixed Assets Proceeds from Issuance of Debt Payment of Bond Issue Costs Return of Contributed Capital Capital Contributed by: Other Funds Other Governmental Entities Property Owners Developers Net Cash Provided (Used) for Capital and Related Financing Activities Cash Flows from Investing Activities: Proceeds from the Sale and Maturity of Investments Purchase of Investment Securities Interest on Investments Net Cash Provided by Investing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year Cash and Cash Equivalents: Cash on Hand and in Banks Equity in Pooled Cash and Investments Restricted Equity in Pooled Cash and Investments See accompanying notes to Financial Statements. Water and Sewer Utility $ 35,041,248 (13,001,649) (7,156,708) (6,781,101) 72.904 8,174,694 (1,745,042) 17,516,265 (6,328,393) 9,442,830 (5,081,722) (1,175,148) (8,623,600) 92,691 331,644 80,188 1,066,276 (13,309,671) 3,780,051 3,780,051 8,087,904 23,431,484 $ 31,519,388 $ 400 4,377,983 27,141,005 $ 31,519,388 80 Solid Gas Waste Recycling Utlltty Utility Utility 30,661,628 15,528,987 (18,199,201) (4,973,396) (4,081,589) (4,531,055) (3,025,696) (4,170,756) 204.043 157,400 5.559.185 (1,014,804) 2,237,754 (329,246) (848,206) (757,192) 2.011.180 303,110 1,807 (616,470) (90,830) 105,445 35,790 (1,425,277) (263,525) 132,299 (2,440,081) (774,550) 79,066 (580,000) (1,436,514) (2,685,571) (44,460) (77,403) (344,445) (25,735) (684) (364,432) (4,702,085) (466,308) (390,851) 774,181 774,181 (808,800) 4,049,402 625,826 254,829 625,826 254,829 1,396,148 246,154 4,649,221 1,149,604 3,240,602 6 045 369 1,395,758 700 1,654,149 1,585 200 5,337,370 1,395,758 707.799 3,240,602 6, 045 369 1,39=5,758 Yacht Basin Stormwater and Utility Marina 4,995,111 (483,112) (1,523,273) (1,573,247) 9,716 1,425,195 2,813,269 (1,675,618) (754,182) (74,896) 332,345 640.918 Parking Harborview System Center 4,052,828 1,961,097 (845,099) (2,017,633) (728,743) (917,719) 26,213 Page 1 of 2 Totals 2001 2000 97,291,922 85,104,451 (41,524,954) (33,810,821) (19,623,756) (19,635,946) (91,830) (17,392,437) (15,750,709) 190 802.811 550.106 1,587,480 (148,176) 19,553,586 16,457,081 37,679 2,200,000 2,239,486 (689,469) (100,800) (4,257,415) (3,619,359) 910,073 1,051,308 113,332 (85,010) (85,010) (108,027) 41,900 15,000 17,573,165 8,413,204 886,656 (56,617) (991,391) (1,908,951) (9,955,199) (4,804,331) 1,107,260 (119,738) (949,491) 221,039 (198,528) (422,920) (2,735,034) 447,487 (28,868) 359,306 (7,343) (18,445) (1,843,071) 934,633 (22,778) (31,066) (54,773) 81,166 710,081 (75,519) 6,566,335 (5,181) (18,904) (5,979,470) (3,162,180) (3,963) (16,654,889) 81,166 1,250,259 (5,472,121) (3,439,681) (11,994,265) 54,323 7,775,392 (119,656) (104,387) (311,976) 934,633 690,950 80,188 1,066,276 455,829 106,185 226.075 (2,578,557) (934,226) 607,111 (22,867) (21,797,454) (12,719,895) 698,190 131,782 278,465 698,190 131,782 278,465 652,088 (281,264) 1,523,565 6,204,347 1138,388 1,716,967 49,996 100 6,543,324 6,543,324 10,865,791 42.339.513 6,856,435 857,124 3,240,532 50,096 53,205,304 721,928 34,507 817 22,000 856,307 3,153,682 64.850 100 49,996 6,856,435 857,124 3,240,532 50,096 81 24,217 17,547,173 35,633,914 53,205,304 67,625 (2,378) 3,953,761 4,019,008 7,751,013 34,588 500 42 339 513 16,950 8,460,520 33,862,043 42,339,513 (Continued) CITY OF CLEARWATER. FLORIDA ENTERPRISE FUNDS COMBINING STATEMENT OF CASH FLOWS, Continued YEAR ENDED SEPTEMBER 30.2001 WITH COMPARATIVE TOTAL FIGURES FOR 2000 Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities: Operating Income (Loss) Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities: Other Revenue from Nonoperating Section of Income Statement Depredation Non -cash Land Rental Exp Provision for Uncollectible Accounts Capitalized Labor and Interfund Charges Construction in Progress Redassified as Expense Change in Assets and Liabilities: (Increase) Decrease in Accounts Receivable (Increase) Decrease in Amount Due from Other Governmental Entities (Increase) Decrease in Inventory (Increase) Decrease in Prepaid Expenses Increase (Decrease) in Accounts and Contracts Payable Increase (Decrease) in Deposits Increase in Deferred Revenue (Increase) in Net Pension Asset Increase (Decrease) in Accrued Payroll Total Adjustments Net Cash Provided (Used) by Operating Activities Noncash Investing, Capital and Financing Activities: Change in Fair Value of Investments Contributed Utilities from Developers Contributed Land from Pinellas County Government Contribution of Land to General Fixed Asset Account Group Contribution of Asset from General Fixed Asset Account Group Contribution of Debt from GLTDAG to Proprietary Fund See accompanying notes to Financial Statements. Water and Solid Sewer Gas Waste Recycling Utility Utility Utility Utility $ 3,307,499 72,904 4,920,586 175,393 (118,491) 146,004 (459,592) (82,980) (21,383) (158) 432,097 19,185 (249,100) 32,730 4,867 195 $ 8,174,694 82 58,148 4,124,684 1,564,064 174,494 204,043 1,141,666 170,274 (425,239) (386,647) 136,974 (114,313) 62,944 761,716 (139,203) 22,286 1.434.501 157,400 445,866 10,690 (68,767) (3,346) 27,563 131,553 1,689 24,235 549 (149,514) (29,849) 27,224 439 447,116 128,616 5,559,185 2,0 303,110 Yacht Basin Totals Stormwater and Parking Harborview Utility Marina System Center 2001 2000 358,179 (70,889) 1,207,739 (725,596) 9,940,174 10,150,837 9,716 332,345 26,213 190 802,811 550,106 1,075,362 201,562 238,140 568,946 8,723,681 8,540,339 136,128 136,128 24,355 382,401 229,472 (543,730) (470,737) 6,966 152,970 (46,711) 9,435 (928,047) (1,139,791) (82,980) 300,821 12,080 127,671 (53,225) (158) 267 15,993 192,188 (7,806) 515,362 563,450 122 510 (1,151) 109,173 137,069 2,760 764,476 (52,642) (18,995) (18,995) (658,298) (1,375,563) 33,977 (7,495) 2,791 111,952 (975,964) 1,067,016 711,807 379,741 577,420 9,613,412 6,306,244 1,425,195 640,918 1,587,480 148,176) 19,553,586 16,457,081 79,041 12,394 83 79,041 12,394 58,148 (67,625) 338,172 922,900 This Page Intentionally Left Blank INTERNAL SERVICE FUNDS Internal Service Funds are utilized to finance and account for services and commodities fumished by a designated department to other departments within the City or to other govemments on a cost reimbursement basis. Garage Fund Administrative Services Fund General Services Fund Central Insurance Fund to account for the cost of automotive and other motorized equipment of the City. The acquisition cost of new or upgraded equipment is financed through user departments and the asset value is simultaneously contributed to the Garage Fund. The cost of replacement of existing equipment is financed by the garage. to account for various support activities including purchasing and data processing for all City departments. The cost for these services is charged to user departments based on the cost of providing units of service. to account for various support activities including building maintenance, custodial, and radio communications for all City departments. The cost for these services is charged to user departments based on the cost of providing units of service. to account for the City's limited self- insurance program wherein all funds are assessed charges based on damage claims incurred and on management's assessment of individual funds' risk exposure. All claims and premiums are paid out of this fund, together with other costs necessary to administer the program. 85 CITY OF CLEARWATER. FLORIDA INTERNAL SERVICE FUNDS COMBINING BALANCE SHEET SEPTEMBER 30.2001 WITH COMPARATIVE TOTALS FOR 2000 Ama Current Assets: Cash on Hand and in Banks Equity in Pooled Cash and Investments Accounts and Contracts Receivable Due from Other Funds Inventories, at Cost Prepaid Expenses and Other Assets Total Current Assets Restricted Assets: Interest Receivable Total Restricted Assets Garage Administrative General Fund Services Services $ 2,050 3,186,897 789,173 747,078 77 347,172 217,748 64,886 75,666 3,609,735 1,009,048 5.793 5.793 142 812.106 Advances to Other Funds Net Pension Asset 357,707 632,965 232,997 Property, Plant and Equipment, Net of Accumulated Depreciation 12,662,162 2,664,125 183,086 $ 16 635 397 4 306 138 1,228,189 Liabilities and Fund Eauity Current Liabilities: Accounts and Contracts Payable $ 557,196 27,527 16,817 Accrued Payroll 27,211 57,947 20,760 Accrued Compensated Absences 93,397 272,893 73,557 Claims Payable Due to Other Funds 300,000 Current Portion of Long -Term Liabilities: Notes, Loan Pool Agreement and Acquisition Contracts 2,217,794 266,287 Total Current Liabilities 2,895,598 924,654 111,134 Long -Term Liabilities, Excluding Current Portion: Advance From Other Funds 571,070 Notes, Loan Pod Agreement and Acquisition Contracts 4,706,440 493,408 Total Liabilities 7,602,038 1,989,132 111,134 Fund Equity: Contributed Capital - Other Funds 3,754,841 49,722 6,415 Retained Earnings: Reserved for Employees' Pension Benefits 357,707 632,965 232,997 Unreserved 4,920,811 1,634,319 877,643 Total Retained Earnings 5,278,518 2,267,284 1,110,640 Total Fund Equity 9,033,359 2,317,006 1,117,055 See accompanying notes to Financial Statements. 86 $ 16,635 397 4 306 138 ====== 1,228,189 Totals Central Insurance 2001 2000 2,050 2,350 19,685,924 24,409,072 24,392,786 77 25 593,176 1,222,982 784,565 75,666 124,227 1,116,054 1,116,196 800,063 21,395,154 26,826,043 26,104,016 5,793 5,793 5,793 5,793 2,668,867 2,668,867 2,928,254 54,392 1,278,061 1,055,283 58,314 15.567.687 14.366.922 24,176,727 46,346 451 44,460,268 242,760 844,300 745,861 7,021 112,939 113,944 41,691 481,538 513,142 9,337,296 9,337,296 10,883,393 300,000 300,000 2,484,081 2,331,866 9,628,768 13,560,154 14,888,206 9,628,768 728,450 571,070 900,000 5,199,848 3,867,148 19,331,072 19,655,354 4,539,428 4,513,102 54,392 1,278,061 1,055,283 13,765,117 21,197,890 19,236,529 13,819,509 22,475,951 20,291,812 14,547,959 27,015,379 24,804,914 24,176,727 87 46 346 451 44 460 268 CITY OF CLEARWATER. FLORIDA INTERNAL SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS FISCAL YEAR ENDED SEPTEMBER 30.2001 WITH COMPARATIVE TOTALS FOR 2000 Garage Administrative Fund Services Operating Revenues - Billings to Departments $ 8,398,485 7,499,258 Operating Expenses: Personal Services 1,850,143 3,297,592 Purchases for Resale 2,120,987 Operating Materials and Supplies 55,921 133,031 Transportation 3,536 59,663 Utility Service 91,130 4,721 Depredation 2,619,015 830,523 Interfund Administrative Charges 215,080 4,000 Other Current Charges: Professional Fees 243,692 105,895 Advertising Communications 24,727 1,414,497 Printing and Binding 247 49,117 Insurance: Premiums 212,650 25,870 Claims Incurred 597,366 Repairs and Maintenance 638,476 Rentals 1,671 10,566 Miscellaneous 13,150 67,841 Data Processing Charges 116,130 227,100 Taxes 5,548 Total Other Current Charges 1,215,181 2,539,362 Total Operating Expenses 8,170,993 6,868,892 Operating Income 227,492 630,366 Nonoperating Revenues (Expenses): Earnings on Investments 163,294 91,411 Interest Expense (274,924) (107,555) Gain on Sale of Assets 374,760 Other 144,462 40 407,592 (16,104) Income Before Operating Transfers 635,084 614,262 Operating Transfers In 649,127 58,701 Operating Transfers Out 649,127 58,701 Net Income 1,284,211 672,963 Retained Earnings, Beginning of Year 3,994,307 1,594,321 Retained Earnings, End of Year $ 5,278,518 2,267,284 See accompanying notes to Financial Statements. 88 Totals General Central Services Insurance 2001 2000 2,857,028 10,152,309 28,907,080 27,652,555 1,408,748 430,234 6,986,717 6,866,799 2,120,987 2,093,505 226,469 4,588 420,009 730,481 78,832 8,648 150,679 183,168 349,621 445,472 388,426 29,413 2,354 3,481,305 3,373,380 219,080 139,600 91,320 440,907 648,794 950 47,279 11,601 1,498,104 1,069,310 224 1,475 51,063 46,590 14,800 6,810,036 7,063,356 5,691,550 573,879 1,171,245 3,343,928 550,826 10,520 1,199,822 994,457 13,073 1,150 26,460 21,274 16,337 25,269 122,597 182,763 37,890 15,070 396,190 362,670 5,548 4,923 680,429 7,540,320 11,975,292 12,367,209 2,773,512 7,986,144 25,799,541 26-6.---s- 83 142568 ,516 2,166,165 3,107,539 1,509,987 69,938 2,326,568 2,651,211 1,643,476 (382,479) (402,308) 374,760 185,490 3,039 147,541 119,367 72,977 2,326,568 2,791,033 1,546,025 156,493 4,492,733 5,898,572 3,056,012 472,739 1,180,567 318,865 (4,895,000) (4,895,000) (4,422,261) (3,714,433) 318,865 156,493 70,472 2,184,139 3,374,877 954,147 13,749,037 20,291,812 16,916,935 1,110,640 13,819,509 22,475,951 20 291 812 89 CITY OF CLEARWATER. FLORIDA INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS FISCAL YEAR ENDED SEPTEMBER 30.2001 WITH COMPARATIVE TOTALS FOR 2000 Garage Administrative Fund Services Cash Flows from Operating Activities: Cash Received from Other Funds $ 8,398,485 7,499,258 Cash Payments to Suppliers (3,332,463) (2,130,280) Cash Payments to Employees (1,941,922) (3,414,462) Cash Payments to Other Funds (288,178) (583,021) Other Revenues 144,461 40 Net Cash Provided by Operating Activities 2,980,383 1,371,535 Cash Flows from Noncapital Financing Activities: Operating Transfers In 649,127 58,701 Operating Transfers Out Receipt of Cash on Loans to/from Other Funds Payment of Cash on Loans to/from Other Funds (265,846) (380,448) Net Cash Provided (Used) by Noncapital Financing Activities 383,281 (321,747) Cash Flows from Capital and Related Financing Activities: Principal Payments on Debt (493,359) Interest Paid (274,924) (107,555) Acquisition of Fixed Assets (3,674,254) (571,156) Proceeds from Issuance of Debt 1,589,594 388,680 Capital Contributed by Other Funds 26,326 Net Cash Used for Capital and Related Financing Activities (2,359,584) (757,064) Cash Flows from Investing Activities: Interest on Investments 163,295 91,411 Net Cash Provided by Investing Activities 163,295 91,411 Net Increase (Decrease) in Cash and Cash Equivalents 1,167,375 384,135 Cash and Cash Equivalents at Beginning of Year 2,019,522 407,088 Cash and Cash Equivalents at End of Year $ 3,186,897 791,223 Cash and Cash Equivalents Cash on Hand and in Banks $ 2,050 Equity in Pooled Cash and Investments 3,186,897 789,173 $ 3,186,897 791223 Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating Income $ 227,492 630,366 Adjustments to Reconcile Operating Income to Net Cash Provided by Operating Activities: Other Revenue from Nonoperating Section of Income Statement 144,461 40 Depreciation 2,619,015 830,523 Change in Assets and Liabilities: (Increase) in Accounts Receivable (51) Decrease in Inventory 48,562 (Increase) in Prepaid Expenses Increase (Decrease) in Accounts and Contracts Payable 32,632 27,527 (Increase) in Net Pension Asset (58,612) (110,982) Increase (Decrease) in Accrued Payroll (33,167) (5,888) Total Adjustments 2,752,891 1 Net Cash Provided by Operating Activities $ 2,980,383 1 371,535 1 1 1 1 1 1 1 1 See accompanying notes to Financial Statements. 90 Totals General Central Services Insurance 2001 2000 2,857,028 10,152,309 28,907,080 27,652,555 (1,162,693) (9,354,365) (15,979,801) (14,717,745) (1,470,147) (415,574) (7,242,105) (7,654,431) (155,983) (39,816) (1,066,998) (1,064,827) 3,039 147,540 119,367 71,244 342,554 4,765,716 4,334,919 472,739 1,180,567 319,259 (4,895,000) (4,895,000) 138,561 138,561 857,456 (227) (646,521) (2,414,382) (227) (4,283,700) (4,222,393) (1,237,667) (493,359) (610,188) (382,479) (402,307) (7,782) (54,119) (4,307,311) (3,476,808) 1,978,274 604,779 26,326 (7,782) (54,119) (3,178,549) (3,884,524) 69,938 2,326,568 2,651,212 1,643,476 69,938 2,326,568 2,651,212 1,643,476 133,173 (1,668,697) 15,986 856,204 613,905 21,354,621 24,395,136 23,538,932 747,078 19,685,924 24,411122 24,395136 2,050 2,350 747,078 19,685,924 24,409,072 24,392,786 747,078 19,685,924 24 411 122 24,395,136 83,516 2,166,165 3,107,539 1,509,987 3,039 147,540 119,367 29,413 2,354 3,481,305 3,373,380 (51) 48,562 1,230 (142) (315,991) (316,133) (222,959) 16,817 (1,524,634) (1,447,658) 341,545 (40,703) (12,482) (222,779) (450,757) (20,696) 27,142 (32,609) (336,874) (12,272) (1,823,611) 1,658,177 2,824,932 71,244 � 4,765,716 4,334,919 91 This Page Intentionally Left Blank 92 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 FIDUCIARY FUNDS Fiduciary Funds are used to account for resources that are managed in a trustee capacity or as an agent for other parties or funds. Employees' Pension Fund to account for the financial operation and condition of the major employee retirement system containing approximately 1,461 active and 427 retired employees. Firemen's Relief and Pension to account for the financial operation and condition of the Firemen's Fund Relief and Pension Fund, closed to new members in 1962, containing 1 active and 51 retired members. Police Supplemental to account for the financial operation and condition of a supplemental pension plan funded by the State for swom police officers. Firefighters Supplemental to account for the financial operation and condition of a supplemental pension plan funded by the State for firefighters. Rehabilitation Loan Fund to account for an expendable revolving loan fund providing grants and low interest loans to qualified property owners to assist in redeveloping older residential neighborhoods. Treasurer's Escrow Fund to account for the receipt, custody, and expenditure of funds held temporarily in trust for other parties. 93 CITY OF CLEARWATER. FLORIDA FIDUCIARY FUNDS COMBINING BALANCE SHEET SEPTEMBER 30.2001 WITH COMPARATIVE TOTALS FOR 2000 Expendable Trust Fund Agency Fund Totals Pension Rehabilita• Treasurer's Trust Lion Loan Escrow Funds Fund Fund 2001 2000 Cash on Hand and in Banks $ 15,594 15,594 31,565 Equity in Pooled Cash and Investments 4,710,065 180,536 4,890,601 208,812 Managed Investment Accounts 429,353,416 429,353,416 526,529,519 Receivables: Mortgage Loans (Net of Allowance for Uncoflectible of $147,600; Due Within One Year: $223,602 for 2001 and $65,349 for 2000) 4,493,208 4,493,208 4,569,664 Interest and Dividends 2,295,165 2,295,165 2,302,415 Rehabilitation Advances 60 ,731 60,731 76,724 Due from Others 8,034 31,358 39,392 104,704 Total Receivables 2,303,199 4,585,297 6,888,496 7,053,507 Property Hell for Resale 84,701 84,701 84,701 $ 436,382,274 4,669,998 1�� 441,232,808 533,908104 Liabilities and Fund Balances Liabilities: Accounts Payable $ 448,314 448,314 482,760 Due to Other Funds (Deficit in Pooled Cash) 126,854 126,854 146,883 Deferred Revenue 25,475 25,475 25,475 Deposits: Property Owners 21,944 21,944 21,944 Developers 15,558 15,558 15,558 37,502 37,502 37,502 Other Miscellaneous Payables: Special Purpose Funds 8,097 8,097 8,397 Construction Escrows 129,404 129,404 26,352 Other 134,937 134,937 162,913 129,404 143,034 272,438 197,662 Total Liabilities 448,314 281,733 180,536 910,583 890,282 Fund Balances: Reserved for Employees' Pension Benefits 435 ,933,960 435,933,960 528,325,086 Unreserved - Undesignated 4,388,265 4,388,265 4,692,736 Total Fund Balances 435,933,960 4,388,265 440,322,225 533,017,822 $ 436,382,274 4,6 180,536 441,232,808 533,908,104 See accompanying notes to Financial Statements. 94 CITY OF CLEARWATER, FLORIDA PENSION TRUST FUNDS COMBINING STATEMENT OF PLAN NET ASSETS SEPTEMBER 30, 2001 WITH COMPARATIVE TOTALS FOR 2000 Defined Benefit Defined Contribution Pension Trust Funds Pension Trust Funds Totals Employees' Firemen's Police Firefighters Pension Pension Supplemental Supplemental Fund Fund Fund Fund 2001 2000 Assets Cash on Hand and in Banks $ 15,594 15,594 31,585 Equity in Pooled Cash and Investments 2,635,350 2,074,715 4,710,065 Managed Investment Accounts, at fair value 407,850,442 2,098,311 9,940,614 9,464,049 429,353,416 526,529,519 Receivables: Interest and Dividends 2,187,446 10,775 47,887 49,057 2,295,165 2,302,415 Due from Others 8,034 8,034 67,133 Total Receivables 2,187,446 10,775 47.887 57.091 2.303.199 2.369.548 Total Assets Liabilities: Accounts Payable Due to Other Funds (Deficit in Pooled Cash) Total Liabilities 412,673,238 4,183,801 10.004.095 9.521.140 438,382.274 528,930.632 448,314 448,314 482,760 122.786 448.314 448.314 805.546 Net assets held in trust for pension benefits $ 412,224,924 4,183,801 10,004,095 9,521,140 435,933,960 528,325,086 (a schedule of funding progress for each plan is presented on page 47) See accompanying notes to Financial Statements. 95 CITY OF CLEARWATER. FLORIDA PENSION TRUST FUNDS COMBINING STATEMENT OF CHANGES IN PLAN NET ASSETS FISCAL YEAR ENDED SEPTEMBER 30.2001 WITH COMPARATIVE TOTALS FOR 2000 Defined Benefit Defined Contribution Pension Trust Funds Pension Trust Funds Police Firefighters Employees' Firemen's Supplemental Supplemental Additions Contributions: Contributions from Employer $ 4,255,484 1,098,990 Contributions from Employees 4,855,064 State of Florida 12,000 658,179 541,465 Total Contributions 9,122,548 1 098 990 658 179 541,465 Investment Income: Net Appreciation (Depreciation) in Fair Value of Investments (98,649,085) 46,156 (2,336,469) (156,486) Interest 11,209,739 451,372 108,028 272,445 Dividends 2,072,966 97,191 (85,366,380) 497,528 (2,228,441) 213,150 Less Investment Expenses: Investment Management / Custodian Fees 1,675,825 90,720 100,402 Net Investment Income (87,042,205) 497,528 (2,319,161) 112,748 Total Additions (Reductions) (77,919,657) 1 596 518 (1,660,982) 654,213 Deductions Benefits and Withdrawal Payments: Benefits 10,943,307 951,705 1,229,989 1,186,371 Withdrawal Payments 551,943 Total Benefits and Withdrawal Payments 11,495,250 951,705 1,229,989 1,186,371 Income (Loss) before Administrative Expenses (89,414,907) 644,813 (2,890,971) (532,158) Administrative Expenses 185,022 4,000 5,946 2,935 Net Increase (Decrease) (89,599,929) 640,813 (2,896,917) (535,093) Net Assets Held in Trust for Pension Benefits: Beginning of Year 501,824,853 3,542,988 12,901,012 10,056,233 End of Year $ 412,224,924 4 183 801 10 004 095 9,521,140 See accompanying notes to Financial Statements. 96 Totals 2001 2000 5,354,474 5,466,579 4,855,064 4,868,278 1,211,644 1,392,513 11,421,182 11,727,370 (101,095,884) 63,322,299 12,041,584 12,365,395 2,170,157 2,249,697 (86,884,143) 77,937,391 1,866,947 2,065,152 (88,751,090) 75,872,239 (77,329,908) 87,599,609 14,311,372 12,540,926 551,943 515,433 14,863,315 13,056,359 (92,193,223) 74,543,250 197,903 87,113 (92,391,126) 74,456,137 528,325,086 453,868,949 435 933 960 528 325 086 97 CITY OF CLEARWATER. FLORIDA EXPENDABLE TRUST FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE FISCAL YEAR ENDED SEPTEMBER 30.2001 WITH COMPARATIVE TOTALS FOR 2000 Expendable Trust Fund Rehabilitation Loan Fund 2001 2000 Revenues: Intergovernmental Revenues: Home Housing Rehabilitation Grant $ 6,887 84,250 Miscellaneous Revenues: Earnings on Investments 436 130 Interest on Mortgage Loans 35,554 41,866 Other Miscellaneous Revenue 30 36,020 41,996 Total Revenues 42,907 126,246 Expenditures: Economic Environment 203,641 45,351 Total Expenditures 203,641 45,351 Excess (Deficiency) of Revenues over Expenditures (160,734) 80,895 Other Financing Uses: Operating Transfers Out (143,737) (140,291 (143,737) (140,24 Deficiency of Revenues and Other Financing Sources Over Expenditures and Other Financing Uses (304,471) (59,348) Fund Balances, Beginning of Year 4,692,736 4,752,084 Fund Balances, End of Year $ 4 38865 4 692 736 See accompanying notes to Financial Statements. 98 CITY OF CLEARWATER. FLORIDA AGENCY FUND STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FISCAL YEAR ENDED SEPTEMBER 30.2001 TREASURER'S ESCROW FUND Assets Equity in Pooled Cash and Investments Balance Balance October 1, September 30, 2000 Additions Deductions 2001 $ 208,812 168,854 197,130 180,536 Liabilities Deposits: Property Owners $ 21,944 21,944 Developers 15,558 15,558 Other Miscellaneous Payables: Special Purpose Funds 8,397 875 1,175 8,097 Other 162,913 167,979 195,955 134,937 $ 208,812 168,854 197,130 180,536 See accompanying notes to Financial Statements. 99 This Page Intentionally Left Blank 100 GENERAL FIXED ASSETS ACCOUNT GROUP The General Fixed Assets Account Group is a self- balancing account group established to account for the fixed assets of a governmental unit which are not accounted for in an enterprise, internal service or trust fund. 101 CITY OF CLEARWATER. FLORIDA GENERAL FIXED ASSETS ACCOUNT GROUP SEPTEMBER 30.2001 WITH COMPARATIVE TOTALS FOR 2000 Schedule of General Fixed Assets: Land Buildings Improvements Other Than Buildings Equipment Construction in Progress Sources of Investments in General Fixed Assets: General Fund Revenue General Obligation Bonds Revenue Bonds Notes, Mortgages and Other Obligations Special Assessments Federal and State Grants Gifts Contributions from Developers Undetermined Investments Prior to July 1, 1954 See accompanying notes to Financial Statements. 102 2001 $ 35,595,531 41,796,262 87,510,362 40,825,183 759,064 $ 206,486,402 $ 162,541,308 6,297,870 6,685,490 4,496,562 2,012,192 9,530,732 6,303,643 7,539,143 1,079,462 S "206 486 402 2000 30,683,827 38,085,326 83,120,396 36,859,725 3,741,223 192,490,497 157,726,668 6,297,870 6,685,490 3,372,144 2,012,192 9,075,434 2,276,564 2,841,044 2,203,091 192,490,497 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 CITY OF CLEARWATER. FLORIDA SUMMARY OF GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY SEPTEMBER 30.2001 Function Improvements Machinery and Other Than and Activity Total Land Buildings Buildings Equipment Fixed Assets Unallocated by Function $ 34,325,399 9,968,038 9,026,559 14,475,504 855,298 General Government: Legislative 25,166 25,166 Executive 640,801 1,528 639,273 Financial & Administrative 1,179,515 9,679 1,169,836 Legal 256,966 2,106 254,860 Planning 6,285 6,285 Comprehensive Planning 22,435 22,435 Other General Govemment 26,812,065 6,404,795 17,057,319 214,541 3,135,410 28,943,233 6,404,795 17,070,632 214,541 5,253,265 Public Safety: Law Enforcement 12,960,341 588,945 1,122,868 305,477 10,943,051 Fire Control 6,652,368 103,395 19,552 6,529,421 Protective Inspections 245,265 11,432 233,833 Emergency and Disaster Relief 450,005 88,482 361,523 Ambulance and Rescue Services 1,481,635 12,254 104 1,469,277 21,789,614 588,945 1.338.431 325.133 19.537.105 Physical Environment: Solid Waste / Recyling 59,445 43,505 15,940 Conservation and Resource Management 105,155 81,052 24,103 Other Physical Environment 569,218 (12,500) 1,042 523,506 57,170 733,818 (12,500) 1,042 648,063 97,213 Transportation: Road and Street Facilities 71,604,842 9,420,850 4,264,980 57,073,614 845,398 Airports 531,092 90,251 439,866 975 Parking 1,394,945 35,988 1,358,957 Other Transportation Service 792,160 171.262 236,253 384,645 74,323,039 9,456,838 4.526,493 59.108.690 1.231.018 Economic Environment: Employment Opportunity and Development 14,629 14,629 Industry Development 2,089,530 1,396,655 16,901 636,715 39,259 Housing and Urban Development 1,322,207 329,835 293,682 589,295 109,395 Other Economic Enviroment 34,738 33,125 1,613 3,461,104 1,759,615 310,583 1,226,010 164,896 Human Services: Other Human Services Culture and Recreation: Libraries Parks & Recreation Cultural Services Cultural Centers Special Recreation Facilities Total General Fixed Assets Allocated to Functions Construction in Progress 62,379 3.179 59.200 14,801,054 2,416,234 72,834 12,311,986 25,317,257 7,429,800 6,423,996 10,256,082 1,207,379 1,704 1,704 56,997 993 28,489 27,515 1,911,740 681,299 1 151 837 78 604 42,088,752 7,429,800 9,522,522 11,509,242 13,627,188 171,401,939 25,627,493 32,769,703 73,034,858 39,969,885 205,727,338 35,595,531 41,796,262 87,510,362 40,825,183 759,064 Total General Fixed Assets $ 206,486,402 See accompanying notes to Financial Statements. 103 CITY OF CLEARWATER. FLORIDA SUMMARY OF CHANGES IN GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY FISCAL YEAR ENDED SEPTEMBER 30.2001 Function and Activity Fixed Assets Unallocated By Function General Government: Legislative Executive Financial & Administrative Legal Planning Comprehensive Planning Other General Government Public Safety: Law Enforcement Fire Control Protective Inspections Emergency and Disaster Relief Ambulance and Rescue Services Physical Environment: Solid Waste / Recyling Conservation and Resource Management Other Physical Environment Transportation: Road and Street Facilities Airports Parking Other Transportation Service Economic Environment: Employment Opportunity and Development Industry Development Housing and Urban Development Human Services: Other Human Services Culture and Recreation: Libraries Parks & Recreation Cultural Services Cultural Centers Special Recreation Facilities Total Construction in Progress See accompanying notes to Financial Statements. General Fixed Assets 10/01/00 Additions $ 34,614,845 12,607 606,396 1,158,586 216,003 6,285 22,435 26,475,439 28,497,751 11,800,319 5,457,518 231,430 450,005 1,107,634 19,046,906 59,445 105,155 449,011 613,611 58,636,195 1,654,721 1,394,945 562,136 62,247,997 14,629 2,080,022 1,322,207 33,125 3,449,983 46,910 13,877,454 24,395,900 56,997 1,900,920 40,231,271 188,749,274 3,741,223 192,490,497 104 261,900 12,559 34,405 20,929 40,963 336,626 445.482 1,160,022 1,194,850 13,835 374,001 2,742,708 120,207 120,207 12,968,647 230,024 13,198,671 9,508 1,613 11,121 15,469 923,600 921,357 1,704 10,820 1,857,481 18,653,039 759,064 19,412,103 Deductions General Fixed Assets 9/30/01 551.346) 34,325,399 25,166 640,801 1,179,515 256,966 6,285 22,435 26,812,065 28,943,233 12,960,341 6,652,368 245,265 450,005 1,481,635 21,789,614 59,445 105,155 569,218 733.818 71,604,842 (1,123,629) 531,092 1,394,945 792,160 (1,123,629) 74,323,039 14,629 2,089,530 1,322,207 34,738 3,461,104 62,379 14,801,054 25,317,257 1,704 56,997 1,911,740 42,088,752 (1,674,975) 205,727,338 (3,741,223) 759,064 (5,416 ;198) 206,486,402 1 1 1 1 1 1 1 1 1 1 1 i 1 i 1 1 1 1 1 COMPONENT UNIT CLEARWATER DOWNTOWN DEVELOPMENT BOARD The Clearwater Downtown Development Board (DDB) is created by City Ordinance but legally separate from the City of Clearwater, and governed by a separate board. The DDB is accordingly reported as a discretely presented component unit in the combined financial statements. 105 CITY OF CLEARWATER. FLORIDA COMPONENT UNIT CLEARWATER DOWNTOWN DEVELOPMENT BOARD BALANCE SHEET SEPTEMBER 30.2001 WITH COMPARATIVE TOTALS FOR 2000 2001 2000 Assets Equity in Pooled Cash and Investments $ 98,648 68,675 Amount to be Provided for Retirement of General Long -term Debt: Obligation Under Participation Agreement 102,027 109,875 Total Assets Liabilities and Fund Balance Accounts Payable Participation Agreement Payable $ 200,675 178,550 $ 2,402 102,027 109,875 Total Liabilities 102,027 112,277 Undesignated Fund Balance 98,648 66,273 Total Fund Balance 98,648 66,273 See accompanying notes to Financial Statements. $ 200,675 106 178,550 CITY OF CLEARWATER. FLORIDA COMPONENT UNIT CLEARWATER DOWNTOWN DEVELOPMENT BOARD STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET (GAAP BASIS) AND ACTUAL FISCAL YEAR ENDED SEPTEMBER 30.2001 WITH COMPARATIVE TOTALS FOR 2000 2001 2000 Variance Favorable Actual Budget Actual (Unfavorable) Revenues: Taxes $ 142,572 144,895 2,323 132,026 Miscellaneous Revenues: Eamings on Investments 4,000 10,249 6,249 5,837 Other 7,013 7,013 1,056 4,000 17,262 13,262 6,893 Total Revenues 146,572 162,157 15,585 _ _138,919 Expenditures: Current - Economic Environment Total Expenditures Excess (Deficiency) of Revenues Over Expenditures 123,651 80,589 43,062 141,622 123,651 80, 589 43, 062 141, 622 22,921 81,568 58,647 (2,703) Other Financing Sources (Uses): Operating Transfers In- Primary Government 39,851 39,851 31,174 Operating Transfers Out - Primary Government (89,699) (89,044) 655 (49,022) (49,848) (49,193) 655 (17,848) Excess (Deficiency) of Revenues and Other Financing Sources Over Expenditures and Other Financing Uses (26,927) 32,375 59,302 (20,551) Fund Balances, Beginning of Year Fund Balances, End of Year See accompanying notes to Financial Statements. 66,273 66,273 86,824 $ 39,346 98,648 59,302 66 107 This Page Intentionally Left Blank 108 SUPPLEMENTARY INFORMATION 109 Page 1 of 4 CITY OF CLEARWATER. FLORIDA CONTINUING DISCLOSURE - GAS SYSTEM REVENUE BONDS SERIES 1996A, 1997A&B, AND 1998 SUPPLEMENTARY INFORMATION THE SYSTEM: Rates. Fees and Charges The City Commission has established a schedule of rates and charges by ordinance, which includes a purchased gas cost adjustment provision allowing the City to pass- through to customers any increase or decrease in the purchased price of gas. The City is not subject to regulation by any State agency in establishing or revising its rates. Where competitive fuel sources or transportation service are available to the customer, the City Commission has authorized the City Manger to enter into contract gas service rates at special rates and/or conditions as required to obtain /retain the customer load. Such contract service must meet the normal construction feasibility formula to insure profitable payback to the City. As of September 30, 2001, contract rates applied to 623 customer accounts and impacted Tess than 42.71% of total revenues. The rates charged by the System through September 30, 1996 were part of the Phase I Gas Rate Case implemented October 1, 1995, which was based on a comprehensive cost of service study performed by the Utility Advisory Services Group of the international accounting firm of Coopers & Lybrand, LLP (the "Rate Study"). This Phase I implementation resulted in an extensive overhaul of the Gas System customer rates, providing numerous classes of service and a modernized billing methodology. The new rates, effective October 1, 1996, were designed to be industry-based and responsive to the competitive energy challenges. The goal of the Rate Study was to establish rates which would be fair to all classes of customers, provide funding to implement planned expansion in both existing northern Pinellas County services area and into the newly acquired southwestern Pasco service area, and provide an adequate growth potential in return to the City of Clearwater to further offset the ad valorem tax rates (current impact is about .5 mills). As the result of experiences during the first seven months of the Phase I implementation, adjustments made to the Phase II rates were implemented October 1, 1996 and additional adjustments (Phase III) were implemented effective October 1, 1997. The total projected impact of both new phases of the rate case is $1.05 million or less than 7.9% of total gas sales revenues. The rate ordinance containing the Phase II and Phase III rate changes was approved by the City Commission on June 6, 1996. 110 M- i- NM M. MO i - MI N- NM OM MI - M Applicable Annual Therm Range or Other Rate Determinant Monthly Customer Charge Non -Fuel Energy Charge Energy Conservation Ati. (ECA) Environmental Imposition Adj. (EIA) Weather Normalization Adj. (WNA) Total Non -Fuel Energy Charge Purchased Gas Adjustment (PGA) Total Energy Charge/Therm Minimum Monthly Bill Compares to LP/Gallon Rate of with 6.0% Franchise Change from 10/99 Therm Rate % Change from 10(99 Therm Rate Utltity Tax Note: Fuel Rate per Therm 10(01/73 Non - Utility Taxable Fuel/Therm CLEARWATER GAS SYSTEM NATURAL GAS RATE BILLING FACTORS FOR SEPTEMBER 1, 2001 - SEPTEMBER 30, 2001 BASED ON APPROVED GAS ADJUSTMENT FACTORS Firm Natural Gas Rate Schedules _BS_ _SME- AWE_ JAE_ -MGS_ AGE. -.BAG_ GAG J.A. f1 ESL Si_ woks 8011 U NA (1 - NA (4 + NA (4 + NA (4 + 0 - 18,000- 100,000 NA (1 - NA (0 - NA (150 NA NA 3 Units) Units) Units) Units) 17,999 99,999 & up 3 Units) 149 tons) tons A +) $7.00 $15.00 $20.00 $50.00 $15.00 $20.00 $0.580 $0.580 $0.580 $0.580 0.200 0.200 0.200 0.200 0.000 0.000 0.000 0.000 0000 MX& 0 000 0.400 $0.760 $0.780 $0.780 $0.760 0564 4 584 0580 4.554 $1.340 $1.340 $1.340 $1.340 $7.00 $15.00 $20.00 $50.00 $ 1.226 $ 1.226 $ 1.226 $ 1.226 $ $ 1.300 $ 1.300 $ 1.300 $ 1.300 $ $0.470 $0.410 0.200 0.200 0.000 0.000 SUM IMO $0.670 $0.610 4.584 4.584 $1.230 $1.170 $15.00 $20.00 1.125 $ 1.071 $ 1.193 $ 1.135 $ $ 0.275 $ 0.275 $ 0.275 $ 0.275 $ 0.275 $ 0.275 $ 25.8% 25.8% 25.8% 25.8% 28.8% 30.7% Inter. mania NGY_ _MSS_ JS_ NA NA 100,000 &up $50.00 $7.00 if $15.0011 $15.00 if $15.00 $15.00 $7 Real./ not prey. not prey. not prey. $1513611 billed billed billed not prey. billed $0. 350 $0. 200 $0.150 $0.100 $0.200 $0.300 $0.100 0.200 0.200 0.200 0.200 0.200 0.200 0.200 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0. 044 0.044 4.000 0.444 0.404 0.040 OAK $0. 550 $0. 400 $0.350 60.300 $0.400 $0.500 $0.300 Mgt UM IRO 0.580 4584 4580 LOBO $1.110 $0.960 $0.910 $0.860 $0.960 $1.060 $0.860 $50.00 $7.00 O $15.00 0 $15.00 O $15.00 $15.00 $7 Real./ premise premise premise + FAC + FAC $15 GS O premise + FAC $25.00 $100.00 $0.470 0.200 0.000 0.044 $0.670 0.580 $1.230 $0.280 NA NA $0.280 IMO $0.820 $25.00 $100.00 + FAC + Non -Fuel Therm Rate for 250 therms X 4 Days inMo. 1.016 $ 0.878 $ 0.833 $ 0.787 $ 0.878 $ 0.970 $ 0.787 $ 1.125 $ 0.750 1.077 $ 0.931 $ 0.883 $ 0.834 $ 0.931 $ 1.028 $ 0.834 $ 1193 $ 0.795 0.275 $ 0.275 $ 0.275 $ 0.275 $ 0.275 $ 0.275 $ 0.275 $ 0.275 $ 0.230 32.9% 40.1% 43.3% 47.0% 40.1% 35.0% 47.0% 28.8% 39.0% 60.069 $0.069 $0.069 $0.069 $0.069 $0.069 $0.069 $0. 491 $0. 491 $0.491 $0.491 $0.491 $0.491 $0.491 BTU FACTOR • THERMS/188 CUBIC FEET /CCF1 IWO Firm Service Rates 1.049 interruptible Service Rates 1.028 11/00 i2L00 01 1 1.050 1.054 1.059 1.030 1.033 1.039 4x[41 43101 1.081 1.084 1.060 1.063 $0.069 $0.069 $0.069 $0.069 $0.069 $0.491 $0.491 $0.491 $0.491 $0.491 49CQ1 0521 4601 020 0601 0501 1.077 1.074 1.073 1.068 1.066 1.062 1.056 1.053 1.052 1.047 1.045 1.041 $0.069 $0.069 $0.055 $0.491 $0.491 $0.485 Contract IMAM NA By Contract By Contract NA NA 4.444 Contract + $0.000 Plus 0.544 $0.540 + Non -Fuel Customer Charge + Non -Fuel Therm Rate for Contract f of Therms $ 0.230 74.2% $0.069 $0.471 n 0 Z C co cn Z 6) v_ N n 0 -a m m' m cn U) 'gym 3 o DC om Zw 0 Z 0 Sn N m m CO J co cm VQIuOii 1131VMUIV313 JO A110 Page 3 of 4 CITY OF CLEARWATER. FLORIDA CONTINUING DISCLOSURE - GAS SYSTEM REVENUE BONDS SERIES 1996A, 1997A&B, AND 1998 SUPPLEMENTARY INFORMATION Service Area The Clearwater Gas System (CGS) is owned and operated as an enterprise utility by the City of Clearwater. CGS operates over 630 miles of underground gas main and handles the supply and distribution of both natural and propane (LP) gas throughout northern Pinellas County and western Pasco County. As a "full service" gas utility, CGS provides gas appliance sales, service and repair (both commercial and residential), installation of customer gas piping, construction and maintenance of underground gas mains and service lines, and 24 hour response to any gas emergency call within the service area. CGS is regulated for safety by the Florida Public Service Commission and the Federal Department of Transportation. CGS has been serving customers in the Clearwater area for over 78 years (since 1923) when operations were begun with a manufactured gas plant operation from coal and coke. In 1959, when natural gas transmission lines were finally extended to the Florida peninsula, CGS discontinued manufacturing gas and began receiving piped natural gas from Florida Gas Transmission. Clearwater Gas System serves over 15,500 customers in a 298 square mile service territory, which includes 17 municipalities as well as the unincorporated areas of northern Pinellas County and western Pasco County. The Pinellas County service territory is 181 square miles and extends generally from Ulmerton and Walsingham Roads on the South to the Pasco County line on the North and from the Gulf of Mexico on the West to the Hillsborough County line on the East. This includes all of the Pinellas beach communities south to Redington Beach. The Pasco County service territory is 117 square miles and extends from the Gulf of Mexico on the West inland about 10 miles to just West of State Road 41 and Land 0' Lakes (generally along the right -of -way of the Suncoast Parkway) and from the Pinellas and Hillsborough County lines on the South to generally State Road 52 on the North. The CGS service territory extends 42.3 miles from the southernmost to the northernmost points. Clearwater Gas System prides itself in being a competitive and public service - minded utility, providing safe, economical and environmentally - friendly gas, which is made in America, available in our communities for all of the homes and businesses in our service area, with special focus on the residential customers who make up over 86% of our customer base. 112 Page 4 of 4 CITY OF CLEARWATER, FLORIDA CONTINUING DISCLOSURE - GAS SYSTEM REVENUE BONDS SERIES 1996A, 1997A&B, AND 1998 SUPPLEMENTARY INFORMATION As of September 30, 2001 the System's active natural gas customers were located as shown in the following table: Location Belleair Belleair Beach Belleair Bluffs Belleair Shores Clearwater Dunedin Indian Rocks Beach Indian Shores Largo New Port Richey North Redington Beach Oldsmar Port Richey Redington Beach Redington Shores Safety Harbor Tarpon Springs Unincorporated Areas Pasco Unincorporated Areas Pinellas Total Meters Percentage 334 2.41% 104 0.75% 19 0.14% 18 0.13% 6,780 48.90% 951 6.86% 57 0.41% 25 0.18% 1,047 7.55% 126 0.91% 9 0.06% 42 0.30% 10 0.07% 1 0.01% 7 0.05% 590 4.26% 913 6.58% 506 3.65% 2,326 16.78% 13,865 100.00% The following table shows the five largest interruptible customers by peak monthly consumption and the percent of the System's revenues derived from such customers during the 12 months ending September 30, 2001: Peak Monthly Customer Name Therms Morton F. Plant Hospital Metal Industries, Inc. National Linen Services, Inc. Mease Hospital Coca -Cola Foods 98,975 82,788 86,317 59,270 22,961 % of Gross Revenues 2.44% 1.52% 1.72% 1.43% 0.67% The following table shows the breakdown of the System's customers by category as well as the volume of gas sold and the sales revenues generated by each category for the fiscal year ending September 30, 2001: Average No. Gas Customers Volume Interruptible 13 21.35% Residential 11,840 16.01% Commercial 2,012 62.64% 113 Gas Sales 11.01% 24.03% 64.96% Page 1 of 3 CITY OF CLEARWATER, FLORIDA CONTINUING DISCLOSURE — WATER AND SEWER REFUNDING REVENUE BONDS SERIES 1993 AND 1998 SUPPLEMENTARY INFORMATION HISTORICAL FINANCIAL INFORMATION WATER SYSTEM: Source and Volume of Water Pumped (in million gallons per clay, averaged over the Fiscal Year) FY City Wells County Total 1996 3.528 10.901 14.429 1997 3.448 10.412 13.860 1998 3.140 11.540 14.680 1999 3.070 12.094 15.164 2000 3.047 11.528 14.575 2001 3.067 11.260 14.327 Historical Growth in Number of Water Customers (all figures are as of September of the year indicated) Year Water Customers 1996 38,546 1997 38,294 1998 38,440 1999 39,931 2000 39,562 2001 40,167 Ten Largest Water Customers Fiscal Year Ending September 30, 2001 Water Used Revenues Name of User (in 100 Cubic Feet) Produced 1. Church of Scientology 111,155 $ 285,250 2. Morton Plant Hospital 70,627 215,039 3. Clearwater Housing Authority 59,210 144,467 4. AGH Leasing L/P 47,493 105,436 5. Sheraton Sand Key 45,655 105,861 6. Pinellas County Schools 36,124 124,879 7. Lewis Real Estate, Inc 31,691 75,809 8. 880 Mandalay Ave, Inc. 30,590 79,101 9. Lane Clearwater L/P 29,102 71,321 10. Countryside Mall 26.767 85.447 Total 488,414 $ 1,292,619 Page 2of3 CITY OF CLEARWATER, FLORIDA CONTINUING DISCLOSURE — WATER AND SEWER REFUNDING REVENUE BONDS SERIES 1993 AND 1998 SUPPLEMENTARY INFORMATION SEWER SYSTEM Fiscal Year 1995 1996 1997 1998 1999 2000 2001 Historical Growth in Number of Sewer Customers Average Sewage Flow (as of September of the year indicated) Annual Ave. Daily Fiscal Sewer Flow In MGD Year Customers 16.1 1995 32,787 15.8 1996 32,868 14.9 1997 33,017 17.9 1998 33,174 16.5 1999 33,383 15.4 2000 33,075 14.4 2001 32,933 Ten Largest Sewer Customers Fiscal Year Ending September 30, 2001 Sewer Used Revenues Name of User (in 100 Cubic Feet) Produced 1. Church of Scientology 88,710 $ 243,955 2. Morton Plant Mease Hospital 67,644 243,889 3. Clearwater Housing Authority 58,807 156,320 4. AGH Leasing UP 46,865 122,937 5. Sheraton Sand Key 38,920 102,215 6. Pinellas County Schools 36,110 143,804 7. Lewis Real Estate, Inc. 31,691 83,000 8. Lane Clearwater UP 26,434 69,421 9. Bay Aristocrat Village 25,320 66,058 10. Lake Starcrest Apartments Ltd. 23.611 61.766 Total 444 112 $1.293.365 RATES, FEES AND CHARGES The City uses a three- tiered rate structure for water and sewer usage. The base rate includes a minimum usage for residential and nonresidential water rates. Any usage over the minimum is billed at one rate per 100 cubic feet up to a designated level and at a second rate for usage over that level. For irrigation, there is a base rate, with no minimum, and a charge per 100 cubic feet of water usage up to a designated level and a higher charge for usage over that amount. The sewer base rate includes a minimum usage and a fixed charge per 100 cubic feet of water usage over the basic allowance. The minimum usage and second tier usage level vary with the size of the meters. For Fiscal Year 2001 there were no changes to the three - tiered rate structure for water or sewer usage. Effective October 1, 2000 the basis for billing was converted from cubic feet to gallons. 115 Page 3 of 3 CITY OF CLEARWATER. FLORIDA CONTINUING DISCLOSURE - WATER AND SEWER REFUNDING REVENUE BONDS SERIES 1993 AND 1998 SUPPLEMENTARY INFORMATION Residential and Nonresidential Water Rates Size of Meter October 1, October 1, October 1, October 1, October 1, 1997. Laki 1 2QQQ Cubic Feet Gallons Minimum- Under 1 inch 6.88 7.08 7.08 7.53 8.07 1 inch 15.48 15.93 15.93 17.57 18.83 1.5 inch 230.48 237.39 237.39 251.00 269.00 2 inch 534.92 550.47 550.47 584.83 626.77 3 or 2 inch manifold 825.60 849.60 849.60 901.09 965.71 4 inch 1,589.28 1,635.48 1,635.48 1,734.41 1,858.79 6 inch 4,081.56 4,200.21 4,200.21 4,455.25 4,774.75 8 inch 6,880.00 7,080.00 7,080.00 7,530.00 8,070.00 Additional charges are assessed for cubic feet of usage in excess of designated minimums. Rates for irriaation (Lawn) Meters Size of Meter October 1, October 1, October 1, October 1, October 1, 1997 199$ 12 =2 2ggi Cubic Feet Gallons Minimum- Under 1 inch 2.45 2.52 2.52 2.69 2.88 1 inch 7.35 7.57 7.57 8.07 8.64 1.5 inch 36.75 37.85 37.85 40.35 43.20 2 inch 102.90 105.99 105.99 112.99 120.96 3 or 2 inch manifold 203.35 209.45 209.45 223.27 239.04 4 inch 392.00 403.76 403.76 430.41 460.80 6 inch 1,183.35 1,218.85 1,218.85 1,299.29 1,391.04 Sewer Rates October 1, October 1, October 1, October 1, October 1, 1997 L„,Q$ 1999 2 1 Size of Meter Cubic Feet Gallons Minimum- Under 1 inch 9.44 9.44 9.72 10.38 11.10 1 inch 21.24 21.24 21.87 24.22 25.90 1.5 inch 316.24 316.24 325.62 346.00 370.00 2 inch 733.96 733.96 755.73 806.18 862.10 3 or 2 inch manifold 1,132.80 1,132.80 1,166.40 1,242.14 1,328.30 4 inch 2,180.64 2,180.64 2,245.32 2,239.86 2,556.70 6 inch 5,600.28 5,600.28 5,766.39 6,141.50 6,567.50 8 inch 9,440.00 9,440.00 9,720.00 10,380.00 11,100.00 Per 100 cubic feet of water used over that allowed in minimum 2.36 2.36 2.43 3.46 3.70 ADDITIONAL INDEBTEDNESS Additional indebtedness of $92,691 was incurred for the lease purchase of capital equipment. 116 CITY OF CLEARWATER. FLORIDA CONTINUING DISCLOSURE — STORMWATER SYSTEM REVENUE BONDS SERIES 1999 SUPPLEMENTARY INFORMATION Rates. Fees. and Charges The City uses a measurement of one equivalent residential unit or ERU as the basis for the stormwater management utility fee. The rate per ERU was unchanged from the inception of the utility on January 1, 1991 until 1998 when annual increases were adopted for five fiscal years beginning October 1, 1998. In November 2001, additional increases were adopted including a change to the increase previously adopted to be effective October 1, 2002. The monthly rates at inception and as adopted in 1998 and 2001 are: Effective Date Rate Per ERU January 1, 1991 $3.00 October 1, 1998 $4.00 October 1, 1999 $4.17 October 1, 2000 $4.35 October 1, 2001 $4.54 January 1, 2002 $6.13 October 1, 2002 $7.16 October 1, 2003 $8.01 October 1, 2004 $8.65 October 1, 2005 $9.35 Single- family homes, multifamily units, condominium units, apartments and mobile homes are rated as one ERU per dwelling unit. Nonresidential property is charged at the rate of 1,830 square feet of impervious area per ERU. HISTORICAL NET REVENUES Fiscal Years Ended September 30. 1996 1997 1998 (1) 1999 (2) Net Operating Revenues (Excluding Depreciation) Interest Income and other Non - Operating Revenues (Expenses) Total Net Revenues Maximum Annual Debt Service Coverage 2000 $412,283 $928,937 $325,376 $1,361,656 $1,622,157 205,016 130,103 125,815 46,209 132,921 $617,299 $520,974 1.18 $1,059,040 $451,191 $520,974 $520,974 2.03 .87 $1,407,865 $520,974 2.71 $1,755,078 $520,974 3.37 (1) From 1994 to 1998 total annual operating revenues have only increased from $3.40 to $3.46 million while total operating expenses (excluding depreciation) have increased from $1.68 to $3.13 million. With little undeveloped property in the City and no rate increase from the Utility's inception in 1991 until 1999, revenues remained flat while expenses such as personnel services, professional fees, interfund charges and repairs and maintenance have increased significantly. Rate increases of 33.3% for 1999 and 4.3% for each subsequent year through 2003 were approved in August 1998. In November 2001, to fund significant increases in the Stormwater System capital improvement program, rate increases to $6.13 effective January 1, 2002; to $7.16 effective October 1, 2002; to $8.01 effective October 1, 2003; to $8.65 effective October 1, 2004; and to $9.35 effective October 1, 2005 were approved. (2) The Interest Income and Other Non - operating Revenues (Expenses) category amount for fiscal 1999 has been restated in the current year. Fiscal 2000 interest income and other non - operating revenues (expense) of $132,921 was erroneously reported as fiscal 1999 in the above table for the prior year (fiscal 2000) comprehensive annual financial report. The amount has been corrected from $132,921 to $46,209, decreasing the fiscal 1999 debt service coverage ratio from the previously reported 2.87 to 2.71. 117 CITY OF CLEARWATER, FLORIDA FIRE SERVICES PROGRAM SUPPLEMENTARY INFORMATION Pursuant to agreements between the City of Clearwater, the Pinellas County Fire Authority and the Pinellas County Emergency Medical Services Authority, the City has provided fire and emergency medical services to the respective authorities. With respect to fire services, the services are provided for the benefit of properties located outside the corporate limits of the City, but within a designated service area. Emergency medical services are provided for the benefit of persons residing both inside and outside the corporate limits of the City, based on the Authority's nearest unit dispatch policy. With respect to the Fire Services Program, a budget was prepared by Fire Department personnel covering proposed expenditures for fiscal year 2000 -01 for the Fire Department as a whole. Since the funding for the Emergency Medical Services Program is based on the level fixed in prior years, the Fire Services Program budget is essentially the residual obtained by deducting the approved level of funding for the Emergency Medical Services Program from the budgeted amounts included in the total Fire Department budget. This budget was submitted to, and duly approved by, the relevant Authority prior to the commencement of the fiscal year. Income received from Pinellas County Fire Protection Authority and valid program expenditures for the Fire Services Program for the fiscal year ended September 30, 2001 are summarized below. Total Revenue Received from Pinellas County Fire Protection Authority 112512§§ Total Fire Services expenditures for fiscal 2000/01 X11.273.446 No Equipment Reserve is currently being utilized with respect to the Fire Services Program. 118 STATISTICAL SECTION STATISTICAL SECTION 119 CITY OF CLEARWATER. FLORIDA GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION (a) LAST TEN FISCAL YEARS Fiscal General Public Physical Economic Year Government Safety Environment Transportation Environment 1992 $ 7,008,971 $ 27,830,892 $ 1,434,840 $ 4,946,295 $ 1,041,651 1993 7,043,042 28,743,633 1,428,177 4,625,720 704,023 1994 6,944,313 30,348,800 1,461,345 4,485,318 1,104,261 1995 7,100,253 32,230,932 1,368,074 4,727,961 1,971,488 1996 8,422,146 32,473,158 1,448,830 4,935,058 2,074,079 1997 9,143,485 35,014,716 1,593,525 4,950,263 2,435,633 1998 10,149,047 36,269,061 1,926,168 5,017,921 3,046,352 1999 10,457,801 38,489,701 318,590 6,755,168 2,817,419 2000 9,126,217 41,362,225 2,245,047 5,091,703 2,319,156 2001 9,486,088 42,442,045 2,221,979 5,401,902 2,466,515 (a) Includes operating and capital outlay expenditures of all governmental funds, expendable trust funds and component units. General Governmental Expenditures By Function (a) Fiscal Year Ending September 30, 2001 Human Services 1% Culture and Recreation 15% Capital Outlay 33% General Debt 2% Economic Environment 2% Transportation 4% General Government 8% Public Safety Physical En . 34% 2% 120 TABLE I Culture Reporting Human and Capital General Entity Services Recreation Outlay Debt Totals $ 436,002 $ 12,127,429 $ 9,791,407 $ 1,393,674 $ 23,748,512 656,016 11,941,403 7,295,099 1,520,301 63,957,414 637,739 12,190,549 9,297,004 1,556,939 68,026,268 760,196 13,172,327 14, 059, 318 2,169,809 77,560,358 693,940 13,582,796 23,283,499 2,496,111 89,409,617 794,432 14,459,550 15,703,411 4,327,382 88,422,397 893,812 15,059,753 12,700,027 2,401,704 87,463,845 934,791 16,300,735 14,783,956 2,230,312 93,088,473 633,960 16,932,942 16,885,678 2,141,246 96,738,174 699,699 18,301,610 42,676,646 2,257,198 125,953,682 Millions Total! General Governmental :Expenditures Last . Ten Fiscal Years (a) 130 120 110 100 90 80 70 60 50 40 30 20 10 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Fiscal Years 121 CITY OF CLEARWATER. FLORIDA GENERAL REVENUES BY SOURCE (a) LAST TEN FISCAL YEARS Fiscal Taxes Ucenses Year Property Franchises Utility and Permits 1992 $ 20,648,733 $ 4,716,532 $ 9,954,853 $ 3,267,159 1993 20,648,283 5,113,368 10,740,616 3,010,049 1994 21,339,664 5,518,732 11,831,565 3,047,814 1995 21,016,108 6,276,054 12,736,282 3,620,891 1996 21,189,640 7,082,847 13,351,613 2,937,586 1997 21,775,181 7,149,054 13,557,358 3,403,879 1998 22,367,192 7,451,564 14,630,119 3,406,987 1999 23,429,794 7,498,426 15,238,156 4,241,747 2000 26,219,674 7,743,009 15,242,594 5,432,799 2001 27,856,905 8,700,706 15,486,388 4,408,637 (a) Revenues are those of all governmental funds, expendable trust funds and component units. (b) Includes Management Service fees charged by General Fund to Utilities System and other Enterprise Funds. General Revenues by Source (a) Fiscal Year Ending September 30, 2001 Utility Taxes 14% Ucenses and Permits 4% Taxes - Franchises 8% Fines and Forfeitures 2% Intergovernmental Revenue 30% Property Taxes 26% 122 Miscellaneous 7% Charges for Services 9% TABLE II Inter- Charges Fines and governmental for Forfeitures Revenue Miscellaneous Services (b) Total $ 1,709,010 $ 16,554,256 $ 5,126,454 $ 5,601,203 $ 67,578,200 1,765,097 17,533,919 3,159,785 5,505,849 67,476,966 1,822,424 18,118,364 3,632,962 5,523,544 70,835,069 1,756,680 19,814,366 3,838,285 5,695,288 74,753,954 1,736,731 20,617,058 4,430,681 6,289,164 77,635,320 1,592,702 23,744,019 4,593,352 7,564,833 83,380,378 1,598,936 24,615,308 5,532,108 7,677,873 87,280,087 1,989,510 26,551,416 3,260,380 8,127,038 90,336,467 1,921,448 26,073,855 3,996,658 8,476,001 95,106,038 2,015,067 33,105,406 7,028,322 9,378,667 107,980,098 Millions 130 120 110 100 90 80 70 60 50 40 30 20 10 0 Total General Revenues Last Ten Fiscal Years (a) 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Fiscal Years 123 CITY OF CLEARWATER. FLORIDA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Fiscal Total Current Percent Delinquent Year Tax Levy Collections (a) of Levy Collections Collected 1992 $ 21,369,980 $ 21,075,554 98.62 % $ 109,316 1993 21,408,489 20,947,194 97.85 199,638 1994 21,281,744 21,154,946 99.40 603,226 1995 21,458,160 21,388,692 99.68 159,918 1996 21,761,730 21,675,311 99.60 73,731 1997 22,410,181 22,281,502 99.43 80,253 1998 23,008,214 22,856,951 99.34 129,690 1999 23,951,878 23,854,396 99.59 226,812 2000 26,998,318 26,876,461 99.55 106,800 2001 28,664,112 28,567,429 99.66 77,716 (a) Collections are reported at the gross amount before any discount allowance. 124 TABLE Ill Percent of Total Percent of Total Collections Outstanding Delinquent Collections to Current Delinquent Taxes to Levy Taxes Current Levy $ 21,184,870 99.13 % $ 1,387,456 6.49 % 21,146,832 98.78 1,438,116 6.72 21,758,172 102.24 946,874 4.45 21,548,610 100.42 856,443 3.99 21,749,042 99.94 868,209 3.99 22,361,755 99.78 914,383 4.08 22,986,640 99.91 935,957 4.07 24,081,208 100.54 806,626 3.37 26,983,261 99.94 821,683 3.04 28,645,145 99.93 840,651 2.93 125 CITY OF CLEARWATER. FLORIDA ASSESSED AND ESTIMATED ACTUAL PROPERTY VALUATIONS LAST TEN FISCAL YEARS Assessed Valuations (a) Tax Collection Non - Exempt Personal Other Total Year Year Real Estate Property Property(b) Taxable 1991 1992 $ 3,799,734,064 $ 379,338,740 $ 509,202 $ 4,179,582,006 1992 1993 3,800,740,889 386,831,160 532,486 4,188,104,535 1993 1994 3,789,902,836 390,841,880 569,338 4,181,314,054 1994 1995 3,782,134,930 403,392,150 580,731 4,186,107,811 1995 1996 3,820,217,710 431,622,230 592,909 4,252,432,849 1996 1997 3,918,747,480 457,182,870 628,698 4,376,559,048 1997 1998 3,999,483,300 493,752,640 1,026,819 4,494,262,759 1998 1999 4,153,719,690 537,808,800 870,404 4,692,398,894 1999 2000 4,353,493,520 549,051,160 934,183 4,903,478,863 2000 2001 4,657,074,110 550,845,380 867,947 5,208,787,437 (a) Pinellas County Property Appraiser (b) Railroad and Telegraph Companies (c) Includes governmental, educational, qualified religious, literary, scientific, and health care properties and special exemptions for individual property owners. Qualified property owners are entitiled to a $25,000 Homestead Exemption based on residency requirement. 126 TABLE IV Percentages Assessed Total Total Values to Yearly Increases Exempt(c) All Estimated Market Taxable Total $ 1,296,139,766 $ 5,475,721,772 100.0 6.9 % 6.1 % 1,317,255,941 5,505,360,476 100.0 0.2 0.5 1,391,537,458 5,572,851,512 100.0 (0.2) 1.2 1,455,095,094 5,641,202,905 100.0 0.1 1.2 1,480, 760, 538 5,733,193,387 100.0 1.6 1.6 1,508,032,959 5,884,592,007 100.0 2.9 2.6 1,555,308,467 6,049,571,226 100.0 2.7 2.8 1,657,162,640 6,349,561,534 100.0 4.4 5.0 1,751,871,312 6,655,350,175 100.0 4.5 4.8 1,899,322,835 7,108,110,272 100.0 6.2 6.8 127 CITY OF CLEARWATER. FLORIDA PROPERTY TAX RATES ALL DIRECT AND OVERLAPPING GOVERNMENTS (PER $1000 OF ASSESSED VALUES) LAST TEN FISCAL YEARS Fiscal Downtown Year City Development (a) School 1992 5.1158 1.0000 8.6260 1993 5.1158 1.0000 9.0000 1994 5.1158 1.0000 9.0820 1995 5.1158 1.0000 9.3590 1996 5.1158 1.0000 9.3290 1997 5.1158 1.0000 9.1760 1998 5.1158 1.0000 9.1330 1999 5.1158 1.0000 9.1100 2000 5.5032 1.0000 8.6660 2001 5.5032 1.0000 8.4330 (a) A separate taxing district established by referendum which affects only downtown properties. (b) Other includes Pinellas County Planning Council .0225; Juvenile Welfare Board .8117; SW Florida Water Management District .4220; Pinellas Anclote River Basin .4000. 128 TABLE V Emergency Transit Medical County District Services Other Total 5.4950 0.5893 0.7000 1.0964 22.6225 5.4170 0.5893 0.7000 1.1560 22.9781 5.4290 0.6697 0.8500 1.1820 23.3285 5.5850 0.6697 0.8720 1.4221 24.0236 5.5140 0.6697 0.8060 1.6308 24.0653 5.5100 0.6697 0.7520 1.6561 23.8796 5.5380 0.6697 0.7410 1.6561 23.8536 5.5380 0.6501 0.7130 1.6561 23.7830 5.8540 0.6501 0.6470 1.6572 23.9775 6.0040 0.6501 0.7470 1.6562 (b) 23.9935 2001 2000 Operating 4.9732 4.9250 Debt Service 0.1505 0.1623 Road Capital Improvements 0.3452 0.3835 Comm. Redevelopment Agency 0.0343 0.0324 Total City Tax 5.5032 5.5032 129 TABLE VI Taxpayer CITY OF CLEARWATER. FLORIDA PRINCIPAL TAXPAYERS * SEPTEMBER 30, 2001 Percentage Type of Assessed to Total Business Value * Assessed Value Bellwether Prop. LP Ltd. Shopping Center $ 86,861,400 1.87% Grand Reserve at Park Apartment Complex 25,528,600 0.55 Excel Realty Trust Inc. Shopping Center 24,834,100 0.53 Taylor, John S. III Landowner 24,352,900 0.52 Branch Sunset Association Ltd Shopping Center 23,147,800 0.50 Clearwater Land Co. Adult Congregate Facility 31,486,700 0.68 Sand Key Association Ltd. Hotel 21,774,500 0.47 Northwood Plaza Shopping Center 19,966,500 0.43 ZOM Bayside Arbors Ltd. Apartment Complex 19,032,900 0.41 Walmart Stores, Inc. Shopping Center 16,865,100 0.36 Sub -Total 293,850,500 6.31 All Others 4,363,223,610 93.69 Total $ 4,657,074,110 100.00% * Based on non - exempt real property assessed taxable values. Source: Pinellas County Property Appraiser, 2000 tax rolls for 2001 collections. 130 1 1 J J d 1 1 1 1 t l CITY OF CLEARWATER. FLORIDA TABLE VII RATIO OF NET GENERAL BONDED DEBT TO TAXABLE ASSESSED VALUE AND NET BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS Ratio of Net Net Taxable Gross Net General General Fiscal Assessed General Less General Bonded Debt Bonded Year Population Value (a) Bonded Sinking Bonded To Assessed Debt (000) Debt Fund Debt Value Per Capita 1991 99,612 $4,124,564 $ 810,000 $242,050 $ 567,950 0.01 $ 5.70 1992 99,856 4,179,582 725,000 272,221 452,779 0.01 4.53 1993 100,768 4,188,105 635,000 286,522 348,478 0.01 3.46 1994 100,604 4,181,314 545,000 302,300 242,700 0.01 2.41 1995 101,162 4,186,108 450,000 316,403 133,597 0.00 1.32 1996 101,867 4,252,433 355,000 333,402 21,598 0.00 0.21 1997 102,472 4,376,559 255,000 90,000 165,000 0.00 1.61 1998 102,874 4,494,262 135,000 101,250 33,750 0.00 0.33 1999 104,281 4,692,398 0 (b) 0 0 0.00 0.00 2000 104,454 4,903,478 0 0 0 0.00 0.00 2001 108,787 5,208,787 0 0 0 0.00 0.00 (a) Values listed are for year of collections. (b) Final maturity of General Obligation Bonds, 1978 Series, was January 1, 1999 in the amount of $135,000. 131 CITY OF CLEARWATER. FLORIDA RATIO OF ANNUAL GENERAL DEBT SERVICE TO EXPENDITURES - GENERAL BONDED DEBT, GENERAL REVENUE CERTIFICATES, AND MORTGAGES AND NOTES LAST TEN FISCAL YEARS Debt Service General Obligation General Revenue Bonded Debt Certificates Fiscal Year Principal Interest Principal Interest 1992 $ 85,000 $ 43,445 $ 250,566 $ 365,516 1993 90,000 38,610 270,486 346,251 1994 90,000 33,615 297,058 325,441 1995 95,000 28,816 523,631 (a) 575,865 1996 95,000 23,114 476,857 910,321 1997 100,000 17,580 2,111,736 (b) 829,555 1998 120,000 11,280 368,269 655,292 1999 135,000 3,915 391,454 628,462 2000 0 0 216,120 608,062 2001 0 0 227,222 595,008 (a) Includes 1995 Improvement Revenue Bonds, commencing with fiscal year 1995. (b) Includes $1,600,000 defeasement of Community Redevelopment Agency Bonds, Series 1986. 132 Mortgages Paying and Notes Agent Fees $ 588,787 672,888 730,456 777,419 983,793 1,264,154 1,239, 805 1,067,805 1,308,349 1,432,952 $ 1,629 2,253 2,018 2,265 4,049 4,358 7,058 3,676 8,715 2,488 Total Debt $ 1,334,943 1,420,488 1,478,588 2,002,996 2,493,134 4,327,383 2,401,704 2,230,312 2,141,246 2,257,670 133 Governmental Expenditures $ 66,011,161 63,957,414 68,026,268 77,560,358 89,409,617 88,422,103 87,463,845 93,088,473 96,738,174 124,860,875 TABLE VIII Debt Service as a Percentage of General Expenditures 2.0% 2.2% 2.2% 2.6% 2.8% 4.9% 2.7% 2.4% 2.2% 1.8% TABLE IX CITY OF CLEARWATER. FLORIDA COMPUTATION OF LEGAL DEBT MARGIN SEPTEMBER 30, 2001 Assessed Valuation of Non - Exempt Real Estate (a) Times: Twenty Percent Limitation Per City Charter Equals Legal Indebtedness Limitation Debt Subject to Indebtedness Limitation: Revenue Bonds: 1985 Public Service Tax and Bridge Revenue Bonds 1998 Water and Sewer Revenue Bonds 1993 Water and Sewer Revenue Bonds 1995 Improvement Revenue Bonds 1996A Gas System Revenue Bonds 1997 Gas System Revenue Bonds 1998 Gas System Revenue Bonds 1999 Stormwater system Revenue Bonds 2001 Infrastracture Sales Tax Revenue Bonds Notes, Mortgages and Contracts Totals Legal Indebtedness Margin Gross Debt $ 415,000 49,900,001 24,600,000 9,770,000 8,445,000 12,865,000 7,930,000 7,395,000 46,445,000 14,095,211 $ 181,860,212 (a) Valuation listed is from 2000 tax year for 2001 collections. TABLE X Less Sinking Fund Assets $ 171,947 4,439,422 9,037,666 126,667 7,083 40,833 2,917 95,455 0 0 CITY OF CLEARWATER. FLORIDA $4,657,074,110 x 20% $ 931,414,822 Net Debt Subject to Limitation $ 243,053 45,460,579 15,562,334 9,643,333 8,437,917 12,824,167 7,927,083 7,299,545 46,445,000 14,095,211 13,921,990 $ 167,938,222 $ 763,476,600 COMPUTATION OF DIRECT AND OVERLAPPING DEBT SEPTEMBER 30, 2001 Governmental Unit City of Clearwater Pinellas County School Board Net Debt Outstanding 0 $ 46,960,000 Percent Amount 100% $ 0 14% $ 6,574,400 (a) Applicable Net Debt Percentage is based on ratio of City to County Taxable values for 2001 collections ($4,657,074,110 / $34,363,584,750). 134 TABLE XI CITY OF CLEARWATER. FLORIDA WATER AND SEWER REVENUE BONDS COVERAGE LAST TEN FISCAL YEARS Net Revenues Fiscal Gross Available for Year Revenues (a) Expenses (b) Debt Service 1992 $ 30,366,487 $ 17,932,368 $ 12,434,119 1993 32,961,135 18,963,260 13,997,875 1994 32,529,074 17,824,720 14,704,354 1995 33,058,297 18,495,960 14,562,337 1996 34,814,929 22,311,433 12,503,496 1997 35,816,439 23,417,605 12,398,834 1998 36,311,233 24,608,494 11,702,739 1999 35,850,799 24,806,085 11,044,714 2000 37,406,823 25,882,873 11,523,950 2001 39,485,997 27,336,550 12,149,447 Debt Service Requirements Debt Service Coverage (c) Fiscal Principal/Sinking Originally Year Fund Interest Total Corrected Reported 1992 $ 2,405,000 $ 4,846,939 $ 7,251,939 WA 1.71 1993 2,580,000 3,023,838 5,603,838 N/A 2.50 1994 2,880,000 3,916,263 6,796,263 N/A 2.16 1995 3,760,000 3,380,470 7,140,470 N/A 2.04 1996 3,990,000 3,186,295 7,176,295 1.74 1.51 1997 4,140,000 3,038,845 7,178,845 1.73 1.48 1998 4,305,000 2,869,738 7,174,738 1.63 1.38 1999 4,500,000 2,083,179 6,583,179 1.68 1.40 2000 4,705,000 1,581,403 6,286,403 N/A 1.83 2001 4,920,000 1,358,690 6,278,690 N/A 1.94 (a) Includes interest earnings and gross revenues of Water and Sewer Divisions of Utility System. Extraordinary Gain is excluded. (b) Excludes depreciation (and similar noncash expenses), amortization of bond discount and issue costs, bond interest, sinking fund and reserve requirements and extraordinary loss. (c) Debt Service coverage has been corrected for an error in the calculation of Net Revenues Available for Debt Service. The Bond required transfer of funds for renewal and replacement were previously included in error in the calculation for fiscal years 1996 through 1999. Note: In April, 1993, the City issued $53,445,000 Refunding Revenue Bonds to finance the cost of refunding entirely the series 1988A and 1988B bonds. In November, 1998, the City issued $43,642,690 Refunding Revenue Bonds to finance the cost of refunding entirely the series 1988 bonds. 135 TABLE XI Fiscal Year Utilities Service Taxes 1992 $ 9,954,853 1993 10,740,616 1994 11,831,565 1995 12,736,282 1996 13,351,613 1997 13,557,358 1998 14,630,119 1999 15,238,156 2000 15,242,594 2001 15,486,388 CITY OF CLEARWATER FLORIDA PUBLIC SERVICE TAX BONDS COVERAGE LAST TEN FISCAL YEARS Net Bridge Revenues Gross Revenues a) Expenses (b) $ 1 ,722,322 1,774,796 1,733,215 1,777,247 WA N/A N/A N/A N/A N/A (e) (e) (e) (e) (e) (e) $ 719,416 622,657 753,963 1,194,167 N/A N/A N/A N/A N/A N/A (e) (e) (e) (e) (e) (e) Net Revenues Available for Debt Service $ 1,002,906 1,152,139 979,252 583,080 Debt Service Requirements WA WA WA WA N/A WA (e) (e) (e) (e) (e) (e) Bridge Percentage Limitation (c $ 465,908 465,480 465,670 463,708 WA N/A WA N/A N/A N/A (e) (0) (e) (e) (e) (e) Principal Fiscal Sinking Year Fund (d) Interest Total Coverage 1992 $ 410,000 $ 493,729 $ 903,729 11.53 1993 440,000 462,898 902,898 12.41 1994 475,000 428,266 903,266 13.61 1995 510,000 389,460 899,460 14.68 1996 465,000 767,875 1,232,875 10.83 1997 495,000 733,549 1,228,549 11.04 1998 535,000 695,746 1,230,746 11.89 1999 575,000 655,825 1,230,825 12.38 2000 235,000 634,231 869,231 17.54 2001 250,000 612,622 862,622 17.95 (a) (b) (c) Includes interest earnings and gross revenues of Toll Causeway Bridge Fund. Total Pledged Revenues Available for Debt Service $ 10,420,761 11,206,096 12,297,235 13,199,990 13,351,613 13,557,358 14,630,119 15,238,156 15,242,594 15,486,388 Excludes depreciation (and similar noncash expenses), amortization of bond discount and issue costs, bond interest and sinking fund and reserve requirements. Bridge Net Revenues are pledged for debt service requirements only to the extent of the 'Bridge Percentage' of requirements pursuant to Section 16, Subsection A(2)(c) of Ordinance No. 3932 -85 (51.554% of total debt service requirements for each year). (d) Reflects par value amounts of sinking fund investments as well as serial principal retirements. (e) The 'Bridge Percentage' of the Public Service Tax and Bridge Revenue Bonds, Series 1985 was defeased on September 27, 1995. Note: In August, 1985 the City issued $7,155,000 Public Service Tax & Bridge Revenue Bonds, Series 1985, to finance the cost of refunding $3,290,000 Utilities Tax Bonds, Series 1977 and $6,060,000 Utilities Tax and Bridge Revenue Bonds, Series 1977, and to provide funds for land acquisition and for a city -owned and operated parking garage. In February, 1995, the City issued $10,720,000 Improvement Revenue Bonds, Series 1995, to finance the construction of a new police headquarters building and related parking facilities. 136 1 1 1 1 1 t 1 1 1 1 1 1 t 1 TABLE XI CITY OF CLEARWATER. FLORIDA GAS REVENUE BONDS COVERAGE LAST TEN FISCAL YEARS Net Revenues Fiscal Gross Available for Year Revenues (a) Expenses (b) Debt Service 1992 $ 11,586,605 $ 8,116,051 $ 3,470,554 1993 12,562,105 9,364,981 3,197,124 1994 13,316,619 10,220,164 3,096,455 1995 13,672,905 10,555,346 3,117,559 1996 16,423,147 13,199,962 3,223,185 1997 17,779,715 14,124,064 3,655,651 1998 19,438,030 14, 975,445 4,462,585 1999 18,772,104 14,701,728 4,070,376 2000 21,533,228 16,462,986 5,070,242 2001 31,211,839 24,575,414 6,636,425 Maximum Debt Fiscal Debt Service Requirements Service Year Principal Interest Total Coverage Coverage(c) 1992 $ $ 488,020 $ 488,020 7.11 1993 488,020 488,020 6.55 1.80 1994 488,020 488,020 6.34 1.74 1995 150,000 978,195 1,128,195 2.76 1.75 1996 240,000 1,052,923 1,292,923 2.49 1.81 1997 320,000 1,454,765 1,774,765 2.06 2.06 1998 455,000 1,379,358 1,834,358 2.43 2.05 1999 540,000 1,564,891 2,104,891 1.93 1.87 2000 560,000 1,543,494 2,103,494 2.41 2.33 2001 580,000 1,518,713 2,098,713 3.16 3.05 (a) Includes interest eamings and gross revenues from Gas System. (b) Excludes depreciation (and similar noncash expenses), amortization of bond discount and issue costs, bond interest, and reserve adjustments. (c) Maximum Debt Service coverage is presented for continuing disclosure on the Gas System Revenue Bonds, and is based upon the maximum debt service for all outstanding bonds and panty bonds. For fiscal 2001 the maximum debt service totals $ 2,176,810. Note: In September, 1994, the City issued $8,110,000 Gas System Revenue Bonds, Series 1994A, for additions, extensions, supplements or replacements of the existing gas system in Pinellas County, Florida. Approximately $1,340,000 was to be used to develop new gas markets. In July, 1996, the City issued $8,815,000 Gas System Revenue Bonds, Series 1996A, for additions and extensions to the gas system in Pinellas County and Pasco County, Florida, as well as supplements and replacements of the existing gas system in Pinellas County, Florida. During October 1997 the City issued $ 7,895,000 Gas System Revenue Bonds, Series 1997A, for additions extensions, supplements, or replacements of the existing gas system within Pinellas and Pasco Counties. Also during October 1997 the City issued $6,710,000 Gas System Revenue Refunding Bonds, Series 1997B, to advance refund the Gas system Revenue Bonds, Series 1991. During January 1998 the City issued $ 8,020,000 Gas System Revenue Bonds, Series 1998, to advance refund the Gas System Revenue Bonds, Series 1994A. 137 TABLE XI CITY OF CLEARWATER, FLORIDA STORMWATER REVENUE BONDS COVERAGE TWO FISCAL YEARS SINCE ISSUANCE Net Revenues Fiscal Gross Available for Year Revenues (a) Expenses (b) Debt Service 2000 $ 4,938,338 $ 3,183,260 $ 1,755,078 2001 $ 5,323,293 $ 3,608,281 $ 1,715,012 Debt Service Requirements Fiscal Principal/Sinking Debt Service Year Fund Interest Total Coverage 2000 $ $ 185,225 $ 185,225 9.48 2001 $ 105,000 $ 399,593 $ 504,593 3.40 (a) Includes interest eamings and gross revenues of the Stormwater Utility System. Extraordinary Gain is excluded. (b) Excludes depredation (and similar noncash expenses), amortization of bond discount and issue costs, bond interest, sinking fund and reserve requirements and extraordinary loss. Note: In November 1999 the City issued $7,500,000 Stormwater System Revenue Bonds for the purpose of paying the costs of capital improvements to the City's stormwater management system. Consequently only two years of data are available as of September 30, 2001. TABLE XI CITY OF CLEARWATER. FLORIDA INFRASTRUCTURE SALES TAX REVENUE BONDS COVERAGE FISCAL YEAR SINCE ISSUANCE Debt Service Requirements Fiscal Sales Tax Principal/Sinking Year Revenues (a) Fund (a) (b) Interest Debt Service Total Coverage 2001 $ 8,385,149 $0 $0 $0 (b) Note: City's share of the revenues derived by Pinellas County, Florida from the levy and collection of a one- cent discretionary infrastructure sales surtax pursuant to Section 212.055(2), Florida Statutes, as amended. First debt service payment due December 1, 2001, consisting of $991,844 interest payment. During June 2001 the City issued $46,445,000 Infrastructure Sales Tax Revenue Bonds for the purpose of paying the costs of certain capital improvements to the City, including, but not limited to, costs relating to road and bridge projects and a new main public library. Consequently only one year of data is available as of September 30, 2001. 138 1 1 1 1 1 t 1 1 t 1 a s TABLE XII CITY OF CLEARWATER, FLORIDA DEMOGRAPHIC STATISTICS LAST TEN FISCAL YEARS Per Capita Median School Unemploy- Year Populatlon(a) Inoome(b) Age(c) Enrollment(d) ment Rats(e) 1992 99,856 $ 22,958 42.3 11,921 5.4% 1993 100,768 24,470 42.3 11,584 6.1 1994 100,604 Not Available 42.9 10,043 5.5 1995 101,162 22,789 42.2 10,284 4.8 1996 101,867 24,696 42.1 11,960 4.2 1997 102,472 26,050 43.3 15,264 3.7 1998 102,874 27,311 43.6 13,714 2.9 1999 104,281 28,367 43.9 14,551 3.0 2000 104,454 30,633 44.2 15,978 2.7 2001 108,787 31,658 43.0 16,293 2.6 (a) 1992 - 2000, University of Florida, Bureau of Economic and Business Research; 2001 U.S. Bureau of the Census. (b) Data is for the County, but should also approximate Clearwater levels. 1992 - 1994, Florida Trend Magazine; 1995 -2001, University of Florida, Bureau of Economic Business Research, Florida Statistical Abstract. (c) County level data, but should also approximate Clearwater levels. 1992, U.S. Bureau of the Census; 1993, St. Petersburg Times Research Bureau; 1994, Sales and Marketing Mgmt, Survey of Buying Power; 1995 -2001, University of Florida, Bureau of Economic Research, Florida Statistical Abstract. (d) Clearwater Planning Department population pro rata estimate of County School Board County level data for public schools; 1992 -2001, Pinellas County School District. (e) Data is for the Tampa/St. Petersburg MSA. 1992 -1999 source of data is the Florida Bureau of Labor Market information; 2000 -2001, University of Florida, Bureau of Economic and Business Research, Florida Statistical Astrac Note: Data is for an unspecified point in each year, not specifically September 30. 139 CITY OF CLEARWATER, FLORIDA PROPERTY VALUE, CONSTRUCTION, AND BANK DEPOSITS LAST TEN FISCAL YEARS Commercial Construction Residential Construction Fiscal Number of Number of Year Permits Value Permits Value 1992 557 $ 32,765,807 1,137 $ 25,956,314 1993 1,693 42,051,081 3,885 29,296,168 1994 1,831 37,164,437 3,882 49,950,413 1995 1,775 77,486,099 3,747 53,614,754 1996 1,898 42,360,262 4,224 26,854,040 1997 1,702 49,385,937 4,172 75,997,890 1998 1,455 54,732,371 4,978 47,045,558 1999 1,690 48,849,409 5,544 95,713,246 2000 2,698 176,010,021 5,573 30,814,807 2001 2,267 152,059,409 5,390 34,084,137 (a) Includes institutional, church, seawalls, pools, and non - valued building permits. (b) Pinellas County Property Appraiser, values listed are for year of collections. (c) Includes balances in commercial, savings, and savings and loan banking institutions for Pinellas County. Data from the Florida Bankers Association Branch Deposit Report of Florida Bank and Thrift Institutions. 140 Miscellaneous Constuction (a) Number of Permits Value TABLE XIII Total Assessed Bank Deposits (c) Property Value(b) in thousands) 5,940 $18,020,294 $ 5,475,721,772 $ 14,360,597 6,799 20,113,175 5,505,360,476 13,853,289 6,063 17, 922, 023 5, 572, 851, 512 13, 274, 660 6,827 28,843,480 5,641,202,905 13,362,164 6,825 24,898,425 5,733,193,387 12,786,549 6,739 27,351,853 5,884,592,007 12,522,122 5,266 17,820,469 6,049,571,226 13,293,565 307 7,506,580 6,349,561,534 13,137,180 35 229,870 6,555,350,175 13,296,319 324 15,763,545 7,108,110,272 13,314,203 141 TABLE XIV CITY OF CLEARWATER, FLORIDA MISCELLANEOUS FACTS SEPTEMBER 30, 2001 1 Date of Incorporation: Town of Clearwater June 2, 1897 Municipal Corporation May 27, 1915 1 Form of Government Commission - Manager Fiscal Year October 1 to September 30 Population U.S. Census 1930 7,607 1940 10,136 1950 15,581 1960 34,653 1970 52,074 1980 85,170 1990 98,784 2000 108,787 Value of Building Permits Issued in Fiscal Year 2000/01 $201,907,091 Area: Land Water 26.66 Square Miles 8.61 Square Miles Streets: Paved 304 Miles Unimproved 10.5 Miles 142 t 1 1 1 1 1 1 1 1 1 i 1 I 1 1 1' CITY OF CLEARWATER. FLORIDA MISCELLANEOUS FACTS, CONTINUED SEPTEMBER 30, 2001 Sanitary Sewers: Sanitary Sewer Mains 322 Miles Storm Sewer Mains 123 Miles Treatment Plants 3 Daily Capacity 29 Million Gallons Water: Mains 523.3 Miles Accounts 40,167 Fire Hydrants 4,009 Gas: Mains 653.4 Miles Accounts 15,529 Police Protection: Stations Employees Fire Protection: Stations Employees 8 409 7 187 Total Municipal Employees 1,796 Libraries: Main 1 Branches 4 Collection 534,096 Marina 209 Boat Slips 143 TABLE XIV TABLE XIV CITY OF CLEARWATER, FLORIDA MISCELLANEOUS FACTS, CONTINUED SEPTEMBER 30, 2001 Recreational Facilities: Parks 1,130 Acres Playgrounds 31 Golf Courses (Land Owned By City Leased to Others) 340 Acres Beach 42 Acres Baseball 21 Diamonds Softball 15 Diamonds Tennis 64 Courts Basketball 22 Courts Horseshoe 24 Courts Soccer and Football 17 Fields Handball 12 Courts Swimming Pools 5 Pools Stadium 6,917 Seats Neighborhood Recreation Centers 4 Community Recreation Centers 6 Special Recreation Facilities 32 Nature Centers 1 Scenic Vistas 3 Picnic Areas 14 Recreational Paths 7.4 Miles Boat Ramps 10 Fishing Areas 21 Lawn Bowling 24 Rinks Shuffleboard 61 Courts Fitness Courses 8 Disc Golf Courses 2 SINGLE AUDIT SECTION SINGLE AUDIT / GRANTS COMPLIANCE 145 This Page Intentionally Left Blank 146 1 iAccountants and Management Consultants 1 1 1 1 1 1 1 1 1 Grant Thornton REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A -133 AND CHAPTER 10.550, RULES OF THE AUDITOR GENERAL Honorable Mayor — Commissioner, City Commissioners and City Manager City of Clearwater, Florida Compliance We have audited the compliance of the City of Clearwater, Florida (the "City ") with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A -133 Compliance Supplement and the requirements described in the Executive Office of the Governor's State Project Compliance Supplement that are applicable to each of its major federal programs and state projects for the year ended September 30, 2001. The City's major federal programs and state projects are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs and state projects is the responsibility of the City's management. Our responsibility is to express an opinion on the City's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; OMB Circular A -133, Audits of States, Local Governments, and Non - Profit Organizations and Chapter 10.550, Rules of the Auditors General. Those standards, OMB Circular A -133 and Chapter 10.550, Rules of the Auditor General require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program or state project occurred. An audit includes examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the City's compliance with those requirements. In our opinion, the City, complied, in all material respects, with the requirements referred to above, that are applicable to each of its major federal programs and state projects for the year ended September 30, 2001. The results of our auditing procedures disclosed no instances or noncompliance that are required to be reported in accordance with OMB Circular A -133 or Chapter 10.550, Rules of the Auditor General. Suite 3850 101 E. Kennedy Blvd ITampa, FL 33602 -5154 T 813.229.7201 F 813.223.3015 W www.grantthornton.com "'Grant Thornton LLP US Member of Grant Thornton International 147 Internal Control Over Compliance The management of the City is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs and state projects. In planning and performing our audit, we considered the City's internal control over compliance with requirements that could have a direct and material effect on a major federal program or state project in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A -133 and Chapter 10.550, Rules of the Auditor General. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major federal program or state project being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. This report is intended solely for the information of the Honorable Mayor- Commissioner, City Commissioners, City Manager, management, federal awarding agencies, pass- through entities and State of Florida program officials and is not intended to be and should not be used by anyone other than these specified parties. (VIA v■Ir 1 ,‘o ttA \ -e-)A LL Tampa, Florida February 14, 2001 148 City of Clearwater, Florida SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE For the year ended September 30, 2001 Federal Grantor/ Program Federal Pass - through Grantor / CFDA/CSFA Grant or Award Share of Program Title Number I.D. Number Amount (a) Expenditures FEDERAL AWARDS U.S. Department of Housing and Urban Development (HUD): Community Development Block Grant - Entitlement 14.218 B00 -MC -12 -002 $ 13,444,000 $ 735,266 Passed through Pinellas County: Home Investment Partnerships Program 14.239 M00 -MC -12 -0230 3,206,914 13,100 Passed through Clearwater Housing Authority: Homer Villas 14.854 FL29DEP0750199 385,346 85,657 Passed through Community Planning and Development Twin Pond 14.246 B- 00 -SP -FL -0088 1,295,000 1,295,000 Fair Housing Communication 14.401 FF204K954009 10,000 6,000 Total U.S. Department of HUD 18,341,260 2,135,023 U.S. Department of Justice: Local Law Enforcement Block Grant 16.592 97 -LB -VX -2739 274,031 Local Law Enforcement Block Grant 16.592 96 -LB -VX -3470 252,490 Local Law Enforcement Block Grant '99 16.592 98 -LB -VX -2739 316,739 Local Law Enforcement Block Grant '00 16.592 1999LB -VX -8125 308,250 150,708 Local Law Enforcement Block Grant '01 16.592 2000LB -BX- 0698 224,497 158,405 Weed and Seed Programs Official Site Recognition 16.595 96 -WS-QX -0003 35,000 Weed and Seed FY '97 16.595 96 -WS-QX -0053 71,092 Weed and Seed FY '98 16.595 97-WS-QX-0028 175,000 Weed and Seed FY '99 16.595 98 -WS-QX -0043 175,000 - Weed and Seed FY '00 16.595 99 -WS -QX -0039 175,000 50,499 Weed and Seed 16.595 2000 -WS -QX -0041 175,000 159,122 Weed and Seed Enforcement 16.595 97 -WS -QX -0013 43,322 - Weed and Seed Asset Forfeiture '98 16.595 97 -WS -QX -0028 100,000 Weed and Seed Asset Forfeiture '99 16.595 98 -WS -QX -0043 100,000 - Weed and Seed Asset Forfeiture '00 16.595 99 -WS -QX -0039 50,000 50,000 Weed and Seed Asset Forfeiture '01 16.595 00 -WS -QX -0041 50,000 25,027 Federal Forfeiture Sharing N/A N/A 113,297 - Community Oriented Policing Services (COPS) Universal Hiring Award 16.710 96 -UM -WX -0784 1,275,000 254,872 COPS More '98 16.710 1999 -CM-WX -2879 1,079,571 384,401 COPS Problem Solving 16.710 97PR -WX -0543 90,856 - Bullet Proof Vests 16.607 990036227 4,016 Bullet Proof Vests 16.607 00000868 3,464 - Bullet Proof Vests 16.607 01004247 2,941 2,941 5,094,566 1,235,975 149 City of Clearwater, Florida SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE - CONTINUED For the year ended September 30, 2001 Federal Grantor/ Program Federal Pass - through Grantor / CFDA/CSFA Grant or Award Share of Program Title Number I.D. Number Amount (a) Expenditures Federal Emergency Management Agency: Passed through State of Florida - Department of Community Affairs: Magnolia Street Dock 83.516 93- EO- 2U- 08 -62 -02 -070 155,966 Hurricane Georges 83.544 99- RM -05- 08 -62 -02 -276 289,452 Hurricane Irene 83.544 00- RM- CC-08- 62 -02 -0 2,188 Total Federal Emergency Management Agency 436,606 Other Federal Assistance: Passed through State of Florida - Department of Justice VOCA Grant 16.575 V9150 36,121 - VOCA Grant 16.575 V0164 34,910 34,398 Environmental Protection Agency: Brownfield - Federal Brownfield - Federal Brownfield - Federal Brownfield - Federal Total - Other Federal Assistance 66.811 8P- 98405396 -2 100,000 38,754 66.811 8P- 98405396 -1 100,000 66.811 V- 984053 -96 -0 100,000 - 66.811 BL984872 -99 -0 500,000 31,741 871,031 104,893 Total Federal Financial Assistance $ 24,743,463 $ 3,475,891 150 1 1 1 1 1 1 1 1 1 f 1 1 1 1 r City of Clearwater, Florida SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCE ASSISTANCE - CONTINUED For the year ended September 30, 2001 State Grantor/ Program State Pass - through Grantor / CFDA/CSFA Grant or Award Share of Transfers t Program Title Number I.D. Number Amount (a) Expenditures (b) Subrecipients c STATE FINANCIAL ASSISTANCE Department of Environmental Regulation: Cooper's Pt Restoration Passed through Pinellas County: Solid Waste Recycling Grant Waste Tire Grant Total Department Environmental Regulation Department of Community Affairs: State Housing Initiative Partnership 37.039 SP481 $ 50,000 $ 46,360 $ 37.011 RE01 -51 630,402 35,790 37.015 WT97 -52 337,472 105,455 1,017,874 187,605 (SHIP) 52.901 N/A 4,614,086 968,586 Local Mitigation Strategy Funding 52.008 OOCP- 05- 08- 62 -02 -2 22,012 18,180 Total Department of Community Affairs 4,636,098 986,766 Department of Transportation (DOT): T. Hangars Declared Distance Runway Overrun & Barn Bluff to Beach Guideway Master Plan Update Total Department of Transportation Law Enforcement Division: Project Next Stop Governor's Office of Tourism, Trade and Economic Development: Brownfield Grant Brownfield - Remediation Brownfield State Appropriation Funding Total Governor's Office of Tourism, Trade and Economic Development Department of State: Folk Art Festival Folk Art Festival 55.004 WPI#40300619401 Contract AI076 550,000 387,062 55.004 WPI 402 99118401 20,745 7,525 55.004 WP 40298619401 175,000 69,954 55.014 FRN 408405 -1 -84-01 Contract AI841 150,000 150,000 55.004 WPI 40297918401 Contract AE263 59,964 28,567 955,709 643,108 16.579 01-CJ-J1-08-62-02-0 78,500 39,688 31.011 V 984053 -96 -0 600,000 32,004 37.041 SP530 300,000 168,458 37.041 SP589 500,000 92,536 1,400,000 292,998 45.002 2K -0516 6,821 45.002 01 -0501 7,503 7,503 151 44„ 137 44,137 City of Clearwater, Florida SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCE ASSISTANCE - CONTINUED For the year ended September 30, 2001 State Grantor/ Program State Pass - through Grantor / CFDA/CSFA Grant or Award Share of Transfers to Program Title Number I.D. Number Amount (a) Expenditures (b) Subrecipients (c) Department of Business and Professional Regulation: School Proximity Tobacco Enforcement 79.003 00- 00204 -00 28,652 25,436 Total State Financial Assistance $ 8,131,157 $ 2,183,104 $ 44,137 Total Expenditures of Federal Awards And State Financial Assistance $_- 5,658 995 (a) Includes awards under prior year grants, which remain active. (b) Funded with State Grants and aids Appropriations. (c) State projects only. 152 1 1 1 1 1 1 1 t s 1 City of Clearwater, Florida NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE Year ended September 30, 2001 Note 1 — Basis of Presentation The above schedule of expenditures of federal awards and state financial assistance includes the federal and state grant activity for City of Clearwater, Florida and is presented on the modified accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A -133, Audits of States, Local Governments and Non Profit Organizations and Chapter 10.550, Rules of the Auditor General. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of the general- purpose financial statements. Note 2 — CFDA /CSFA Number CFDA numbers represent Catalog of Federal Domestic Assistance and apply only to Federal Awards. CSFA numbers represent Catalog of State Financial Assistance and apply only to State Financial Assistance. 153 City of Clearwater, Florida SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the year ended September 30, 2001 SECTION I — SUMMARY OF AUDITOR'S RESULTS Financial Statements Type of auditor's report issued (unqualified, qualified, adverse, disclaimer). Internal Control Over Financial Reporting: • Material weaknesses identified _Yes X No • Reportable conditions identified that are not considered to be a material weakness _Yes X No Noncompliance material to financial statements noted? _Yes X No Federal Awards Internal control over major programs • Material weaknesses identified? _Yes X No • Reportable conditions identified that are not considered to be a material weakness _Yes X No Type of auditor's report issued on compliance for major programs (unqualified, qualified, adverse, disclaimer). Any audit findings disclosed that are required to be reported in accordance with Section 510(a) of Circular A -133? Identification of major programs: Federal Programs CFDA Numbers 14.246 14.592 State Project CSFA Number 31.011 52.902 Yes X No Name of Federal Program or Cluster U.S. Department of Housing and Urban Development — Twin Pond U.S. Department of Justice Local Law Enforcement Block Grant Name of State Project Brownfield Redevelopment Grant State Housing Initiatives Partnership Grant Dollar threshold used to distinguish between type A and type B programs. Auditee qualified as a low risk auditee for Federal single audit purposes? Auditee qualified as a low risk auditee for State single audit purposes? 154 $300,000 X Yes No Yes X No City of Clearwater, Florida SCHEDULE OF FINDINGS AND QUESTIONED COSTS — CONTINUED For the year ended September 30, 2001 SECTION II — FINANCIAL STATEMENT FINDINGS NONE SECTION III- FEDERAL AWARD FINDINGS AND QUESTIONED COSTS NONE SECTION IV — STATE PROJECTS FINDINGS AND QUESTIONED COSTS NONE SECTION V — OTHER ISSUES • No summary schedule of prior audit findings is required because there were no prior audit findings related to Federal programs or State Projects. • No corrective action plan is required because there were no findings required to be reported under the Federal or State single audit acts. 155 Accountants and Management Consultants 1 Grant Thornton �,. i MANAGEMENT LETTTER REQUIRED BY SECTION 10.554(1)(g) OF THE RULES OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA Honorable Mayor - Commissioner, Commissioners and City Manager City of Clearwater, Florida We have audited the financial statements of the City of Clearwater, Florida (the "City "), as of and for the fiscal year ended September 30, 2001, and have issued our report thereon dated February 14, 2002. We have issued our Independent Certified Public Accountants Report on Compliance and Internal Control Over Financial Reporting dated February 14, 2002. Disclosures in this report, if any should be considered in conjunction with this management letter. We conducted our audit in accordance with auditing standards generally accepted in the United States of America, and Government Auditing Standards issued by the Comptroller General of the United States. Additionally our audit was conducted in accordance with the provisions of Chapter 10.550, Rules of the Auditor General, which govern the conduct of local governmental entity audits performed in the State of Florida and require that certain items be addressed in this letter. The Rules of the Auditor General (Section 10.554 (1)(g) la.) require that we comment as to whether or not inaccuracies, shortages, defalcations, fraud, and violations of laws, rules, regulations and contractual provisions reported in the preceding annual financial audit report have been corrected. There were no inaccuracies, shortages, defalcations, fraud, and violations of laws, rules, regulations and contractual provisions disclosed in the preceding annual financial audit report. The Rules of the Auditor General (Section 10.554 (1) (g) lb) require that we comment as to whether or not recommendations made in the precedi -'g annual financial audit report have been followed. The current status of the recommendations made in the preceding annual financial audit report are included under the heading "Current Year Status of Prior Year Comments ". The Rules of the Auditor General (Section 10.554 (1) (g) 2.) require that we comment as to whether or not the City has complied with Section 218.415, Florida Statutes, regarding the investment of public funds. The City has complied with Section 218.415, Florida Statutes. The Rules of the Auditor General (Section 10.554 (1) (g) 3.) require disclosure in the management letter of any recommendations to improve financial management, accounting procedures and internal controls. Recommendations for improvement are noted beginning on page 158. Suite 3850 101 E. Kennedy Blvd Tampa, FL 33602 -5154 T 813.229.7201 F 813.223.3015 W www.grantthornton.com Grant Thornton LLP US Member of Grant Thornton International 156 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 The Rules of the Auditor General (Section 10.554 (1) (g) 4.) require disclosure in the management letter of the following matters if not already addressed in the auditor's reports on the internal control structure or compliance: there were no violations of laws, rules, regulations and contractual provisions which may or may not materially affect the financial statements that were discovered during the audit; there were no illegal or improper expenditures which may or may not materially affect the financial statements that were discovered during the audit; there were no improper or inadequate accounting procedures (e.g., the omission of required disclosures from the financial statements) that were discovered during the audit; there were no failures to properly record financial transactions, or other inaccuracies, irregularities, shortages, or defalcations discovered by the auditor. The Rules of the Auditor General (Section 10.554 (1) (g) 5.) also require that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in the management letter, unless disclosed in the notes to the financial statements. The City, located in Pinellas County, Florida, was incorporated in June 1923. The legal authority by which the City was created and is governed is its charter, which was derived from Chapter 9710 Special Laws of Florida, as amended. The Clearwater Redevelopment Agency (CRA), a blended component unit of the City of Clearwater, Florida, was created by authority of Florida Statute Chapter 163, Part III, and the City of Clearwater Resolution 81.68. The Clearwater Downtown Development Board, a discretely presented component unit of the City of Clearwater, Florida, was created by authority of Florida Statutes 70 -635 and 77 -637, and City Ordinance 5347 -93. As required by the Rules of the Auditor General (Section 10.554 (1) (g) 6a & c.), the scope of our audit included a review of the provisions of Section 218.503 (1), Florida Statutes, Determination of Financial Emergency. In connection with our audit, we determined that the City of Clearwater, Florida, is not in a state of financial emergency as a consequence of the conditions described by Section 218.503(1), Florida Statutes. The financial condition assessment procedures pursuant to Rule 10.556 (8) were applied in this determination. As required by the Rules of the Auditor General Section 10.554 (1) (g) 6b.), we determined that the annual financial report for the City of Clearwater, Florida, for the fiscal year ended September 30, 2001, that was filed with the Department of Banking and Finance pursuant to Section 218.32 (1) (a), Florida Statutes, is in agreement with the annual financial audit report for the fiscal year ended September 30, 2001. This management letter is intended solely for the information of the City of Clearwater, Florida and management and the State of Florida Office of the Auditor General and is not intended to be and should not be used by anyone other than these specified parties. 6.-v.A.v■\-- —a\ en Tampa, Florida February 14, 2002 157 Accountants and Management Consultants Honorable Mayor - Commissioner, City Commissioners and City Manager City of Clearwater, Florida 1 Grant Thornton Si In connection with our audit of the financial statements of the City of Clearwater, Florida as of September 30, 2001, we noted certain matters that we believe you should consider. Our observations were formed as a by- product of our audit procedures, which did not include a comprehensive review for the purpose of submitting detailed recommendations. The accompanying pages summarize our comments and suggestions. We have previously discussed our comments and suggestions with various City personnel and would be pleased to discuss them further. 0 0 LL Tampa, Florida February 14, 2002 Suite 3850 101 E. Kennedy Blvd Tampa, FL 33602 -5154 T 813.229.7201 F 813.223.3015 W www.grantthornton.com Grant Thornton LLP US Member of Grant Thornton International 158 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 As the City's independent accountants, we are in a unique position to provide you with constructive ideas and insights. Despite our close working relationship, we are, in fact, outsiders to the City and can therefore be objective in presenting to you our observations and suggestions. As stated in our accompanying report letter, our comments relate to matters observed as by- products of our audit engagement, and are not based on a detailed study of all aspects of the City's operations. They are offered in the hope that they will lead to a creative exchange of ideas that will result in meaningful actions to benefit and strengthen the City. 159 CURRENT YEAR COMMENTS INFORMATION SYSTEMS PeopleSoft Observation: During our review of controls related to the use of PeopleSoft, we observed the following: • Security could be strengthened for PeopleSoft user accounts. Currently, the required minimum password length is two characters and the forced password change parameter is not used. Additional PeopleSoft security parameters have not been invoked. • A segregation of duties issue may exist within the Human Resources and Payroll departments in which one individual can perform all the functions within the PeopleSoft modules. • The PeopleSoft audit trail log for changes to the production database (records; tables; database) is not reviewed. • A backup PeopleSoft administrator does not exist. • A test database does not exist for the PeopleSoft application. Database or application fixes, patches or modifications are made on the production data base ( "on- the - fly "). • Tape backups are inadequate: daily backups are kept off -site for one day and weekly backups are kept for one week. Recommendation: We recommend that the City consider implementing the following procedures: • Establishing PeopleSoft user account parameters as follows: o Minimum of six alphanumeric characters o Passwords forcibly changed at an interval no greater than 60 days o Password uniqueness set to ten o Lockout invoked after five unsuccessful login attempts and require the system administrator to reset. o Conducting a review of user's access to the PeopleSoft application to ensure the individual's security rights are commensurate with their position. o Auditing of the PeopleSoft audit trail by management on a consistent basis to ensure only authorized changes are being made to the production environment. o Identifying an individual to act as the secondary PeopleSoft administrator and provide the necessary training to that they can provide the required support, especially when the primary cannot be contacted. o Establishing a separate test database for the PeopleSoft application. Implementing database or application modifications directly to the production (live) environment could adversely impact PeopleSoft's production and potentially corrupt data. All changes to PeopleSoft should be tested on a separate database and approved by management prior to loading the modification to the production environment. o Reviewing the PeopleSoft backup tape retention and rotation cycle. This review should be performed as part of the overall backup schema review. 160 INFORMATION SYSTEMS - Continued Management Response: Management concurs with the recommendation. We have already taken steps to address several of the specific issues mentioned, including identifying and training a backup PeopleSoft Administrator, managing the PeopleSoft audit trail, and making changes in the user account parameters to include more controls. Other specific issues related to the PeopleSoft system are being addressed as part of the planned upgrade that the City is involved with. This upgrade from PeopleSoft version 7.5 to 8.3 will include the addition of a separate Test environment for PeopleSoft, as well as the acquisition and deployment of a Storage Attached Network (SAN) solution. This SAN solution will address the concerns raised related to current back -up procedures and business continuity planning. It is expected that once we have deployed the SAN solution, the upgrade project will be on track to complete within six months. SECURITY Observation: We observed that network monitoring tools are not currently being used to indicate potential network attacks. Recommendation: To reduce the risk of unauthorized users gaining access to the network and/or applications, we recommend a real -time firewall monitoring application (Intrusion Detection System) be implemented as soon as possible. It is noted that a Cisco Security and Intrusion Detection device has been purchased, which will provide the required network monitoring functionality. Management should ensure the IDS has paging functionality to be able to notify the on -call network administrator of possible network attacks. Until the network intrusion detection system becomes operational, we recommend the current practice of reviewing the Pix firewall logs approximately every two weeks be increased to twice a week. Management Response: Management concurs with the recommendation. While the IT Department was originally planning on purchasing a Cisco Intrusion Detection hardware solution, we instead purchased GFT's software -based Lan Guard IDS solution. Additionally, we are deploying SNORT, a software -based real -time network intrusion detection system that can be used to notify an administrator of a potential intrusion attempt. It is expected that both of these solutions will be ready for deployment by the end of April 2002. 161 DATA PROCESSING POLICIES Observation: Current network backup and tape retention/off -site policies do not appear to be consistent across operating platforms, applications or remote offices. Recommendation: We recommend a complete review of all network and operating system backup processes and the corresponding backup tape retention /off -site storage policies be conducted so to ensure the backup system is satisfactory to prevent a loss of data. Leading best practices indicate that at a minimum: • Daily backup tapes be maintained for a period of 14 clays in a fire -proof container located away from the server room (off -site preferred, but optional). • Full weekly backups be kept off -site and be rotated (kept for no less than four weeks). • Full monthly backups are kept for one year at an off -site location. • Yearly backups should also be performed and kept off -site for any indefinite period of time. • Backup tapes be periodically tested to ensure the data is readable. Management Response: Management concurs with the recommendation. A comprehensive review of all current back -up and tape retention off -site policies is planned and is expected to be completed by the end of the fourth quarter 2002. DISASTER RECOVERY PLAN Observation: City management has acknowledged the importance of a disaster recovery plan (DRP) and is in the process of finalizing and approving a DRP that addresses the recovery of critical operating systems. It is critical for the City to have a complete disaster recovery plan for all critical applications and network connectivity so to ensure a timely and successful network recovery in case of a disaster. Without an accurate and documented recovery plan, the City is at risk of an untimely and inaccurate system recovery, impacting production and/or the execution of critical financial transactions. 162 1 1 1 1 1 1 1 1 1 1 1 1 1 1 s 1 1 DISASTER RECOVERY PLAN - Continued Recommendation: We encourage the staff to continue their efforts to ensure the recently documented disaster recovery plan is complete and approved by executive management. Leading best practices state a disaster recovery plan should include (at a minimum) the following: • Risk Assessment phase (identify and prioritize critical applications /functions) • Definition of a "disaster" and who can declare a disaster • Callout trees • Documented hardware /software requirements and specifications • Documented network and server configuration requirements and recovery process steps to restore critical applications in a timely manner • Responsibilities of individuals during the recovery • Designated recovery site(s) (hot versus cold site) • User and vendor contact numbers • A detailed disaster recovery test plan, outlining what is to be tested, the expected test results, who will be involved (IT and/or users) and the process to document and analyze the test results • A process to periodically review the plan to ensure it is current • Copies of the plan should be distributed to participants, stored at the off -site storage facility with the backup tapes, and at the hot site, if used Management Response: Management concurs with the recommendation. The City's IT Department has completed a preliminary draft of the revised Disaster Recovery Plan (DRP). It is expected that this will be finalized, approved by Senior Management and distributed by the end of May 2002. INTRANET Observation: Read access to the City's internal intranet is possible through the use of workstations located in the City's libraries. The data on the intranet does not appear to be confidential in nature nor if it were, the state's sunshine law would still permit such access, if requested. Recommendation: We recommend management review the appropriateness of allowing non -City employees access to the intranet. Management Response: The City has resolved this issue and public access to the City's Intranet is no longer possible from the City's public access computers in the City's libraries. 163 NETWORK CONTROLS Observation: The IT department has implemented controls over their network, such as the firewall and the incorporation of NAT to hide internal IP addresses, as a means to mitigate the risk of unauthorized access from the `outside'. An additional control that can be implemented to reduce the risk of an outside attack is the use of penetration testing. Recommendation: We recommend full penetration tests be performed on the City's entire network at least once a year. Such penetration tests and subsequent reports can indicate vulnerabilities of the firewall and network, the inherent risk(s) of the vulnerability and the necessary steps to control the risk of the vulnerability. Management Response: Management concurs with the recommendation. However, at this time, budget constraints prevent annual penetration testing. This issue will be addressed as resources allow. COMPUTER SYSTEM USAGE POLICIES Observation: The City has documented computer, email and Internal usage policies that are available on the intranet for review. However, not all City departments require that a new employee acknowledge acceptance and understanding of the policies. Recommendation: We recommend the IT department work in conjunction with Human Resources to ensure that all new employees are required to acknowledge acceptance of electronic usage policies. Alternately, IT on a yearly basis can email all users a reminder of the electronic usage policies and request an email delivery receipt. Management Response: Computer, e-mail and Internet usage policies are reviewed and employee acceptance is facilitated during new employee orientation that every employee is required to attend. Additionally, all computer usage policies are posted on the City's Intranet and are accessible to all employees with Internet access. 164 SYSTEM ACCESS Observation: The City does not currently review user access on a regular basis. Recommendation: We encourage a yearly review by data owners (management) of user access to their applications, libraries and files. A review of user access rights to data owners files reduces the risk of unauthorized access to data by former employees or contractors, or individuals that have changed positions. Thus, we recommend that IS review user security groups and security levels with the corresponding data owners for appropriateness on a semi - annual basis. Management Response: Review of user access to departmental applications libraries and files is conducted on an ongoing as needed basis. The city will evaluate the recommendation to develop bi- annual reviews. CISCO ROUTER Observation: There is no redundancy for the MSBWAS Cisco router 3640. If this router fails, remote sites will not be able to access the primary data center or Internet. Recommendation: We recommend that if this router is deemed critical, that management obtain a backup device or contract with a service provider to guarantee the replacement of the router within a specified time period. Management Response: Management concurs with the recommendation. This issue will be addressed as resources allow. 165 ESTABLISHMENT OF AN AUDIT COMMITTEE Observation: The City does not have an Audit Committee. Recommendation: Many organizations have formed audit committees of their governing board and have found that such committees have made a significant contribution. We strongly recommend consideration be given to establishing such an Audit Committee of the City Commissioners. The Commissioners have broad responsibility for the direction of the operational and business affairs of the City. The discharge of this responsibility is accomplished through designation of administrative officers and policy guidance given to such officers. However, the commissioners likewise have an important responsibility for the quality of the organization's financial reporting. The primary role of an audit committee is to plan for, evaluate and meet with the independent auditors. Management Response: Consideration will be given to establishing an Audit Committee of the City Commissioners during the current fiscal year. RECENTLY ISSUED ACCOUNTING STANDARD Observation: Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements And Management's Discussion and Analysis For State and Local Governments ( "GASB 34 ") is effective for the City's fiscal year beginning July 1, 2002. GASB 34 will require substantial changes to the City's financial statements and accounting records. Recommendation: The City should begin developing a plan for implementation of GASB 34 so that changes to the City's accounting records and budget process can be made by the required implementation date. Management Response: Planning for the current year implementation of GASB 34 is currently in process. 166 FUND BALANCES Observation: The City Commission currently requires that the General Fund maintain an unreserved fund balance of a minimum of 8% of the prior year expenditures. Recommendation: We recommend that consideration be given to establishing minimum fund balance requirements for other types of governmental funds as well. Management Response: The establishment of minimum fund balance requirements for governmental funds other than the General Fund will be taken into consideration during the fiscal 2003 budget process. 167 CURRENT STATUS OF PRIOR YEAR COMMENTS INFORMATION SYSTEMS Strategizing for eCommerce The City is evaluating the development of eCommerce strategies to enhance business processes as well as the services provided by the City. We commend the City on recognizing the need to formulate an eCommerce strategic plan and for developing an Information Technology Governance Committee. Within the government sector, cities and counties throughout the state have started to design and implement eCommerce plans that provide consumers and businesses the ability to purchase or renew permits and licenses, pay library finds, place deposits for animal adoption, pay water bills and other tasks. We recommend that the City continue to formalize its eCommerce strategy. We further recommend that the City address technology standardization and technology planning (e.g., planning for hardware and software obsolescence) within its Information Technology Governance Plan as technology. Standardization will enable the City to implement eCommerce solutions in a cost - effective manner. Technology standardization and planning across the City will also reduce total costs of technology ownership. Management Response Strategies for eCommerce will be developed for each individual department /business operations within the City and prioritized based upon need/demand and the potential cost /benefit of each application. The Information Technology department will partner with each department to develop a technology plan that will identify technology opportunities, resource requirements and establish priorities to guide budget planning for each business operation. Current Status Implementation is currently in progress. 168 ERP SYSTEM EVALUATION The City is in the process of evaluating ERP systems that would replace core Information Technology processing functionality in its separate financial applications. An ERP system may allow the City to reduce complexity in its Information Technology environment and ultimately reduce support and technology costs (e.g., backup and recovery, disaster planning, systems administration,etc.). Current generation ERP systems typically offer eCommerce functionality (e.g., eProcurement), which also may provide opportunities for the City. We further recommend that the City follow a formal systems selection methodology to ensure that the ERP system meets the City's needs (e.g., serviceability, scalability, maintainability, etc.). A formal selection methodology should provide for identification of critical success factors, key performance indicators, ROI targets, etc. Management Response The City will use the RFP (request for proposal) process to evaluate RTP system solutions for its financial applications. The thoroughness of the process is determined by the detail and scope of the request, as well as the level of research performed prior to its issuance. The use of a third party consultant to assist the City through the process of evaluating and selection is being contemplated by the Information Technology and Finance departments. An ERP system represents the operational "ideal" in Information Technology system solutions, however, implementation cost, maintenance, operational change, serviceability and cost of ownership are all significant factors that must be contemplated by the organization. While an ERP solution may simplify the Information Technology environment, such a system will require significant change in management and adjustment within departmental operations and employee skill development. Current Status Funds for implementation of this recommendation are not currently budgeted. 169 PROGRAM CHANGE CONTROLS We noted that documentation addressing the program change procedures and documentation that provides for evidence of program change testing, approval and authorization are informal or do not exist. Though the City does not make changes to application source code, formal policies and procedures that address upgrade processes, documentation standards and evidence of approval, testing and authorization of changes, should be developed and maintained. We recommend that the City design an overall program change policy and methodology and develop platform and application- specific detailed procedures consistent with this methodology. Detail change procedures should address both vendor provided upgrades /patches as well as "customizations" (including modifications to queries, database tables, application dictionaries, etc.). Processes should cover initiation, development, testing, installation of vendor - provided code, and implementation of changes as well as procedures for installing vendor - provided code. Management Response The City's current inability to develop and maintain a formal Change Control Program is largely due to a lack of committed resources for its systems operations. Two of the three major financial systems (ROSS and UMS) do have a viable test environment within which to test and approve vendor upgrades and patches. As a rule, the City has not invested in highly customized applications and rarely makes such requests to the vendor. Change of control for the UMS system is well documented by the owning department (Utility Customer Service) and upgrades /patches for the ROSS fmancial application are seldom received since this is an older, fully mature product with a minimum of customization. The Information Technology department will review current change control procedures for each system and establish uniform standards and procedures for each. Current Status Implementation is currently in progress 170 PEOPLESOFT UPGRADES During our review, we noted that PeopleSoft upgrades are installed, untested, in the People Soft production environment. Per discussion with the PeopleSoft Administrator, this has, on occasion, resulted in data corruption requiring the City to take actions to restore the application and data to its previous state (e.g., from system backups). Software vendors with a widely installed client base attempt to develop and market trouble free application software and upgrades. Although vendors such as PeopleSoft conduct extensive testing, they cannot be expected to ensure trouble free operation in all Information Technology environments due to the complexity and uniqueness of each software installation. Therefore, upgrades /patches that have not been independently tested by the City in a test environment that models the City's specific production environment (hardware, operating system, database software, etc.) can result in: • Unstable code • Incompatibilities with current hardware and software • Unexpected consequences or unintended results • Data corruption • Inaccurate results, reports, calculations • High volumes of urgent trouble tickets (requiring Information Technology staff to dedicate immediate resources to resolving issues that would otherwise be avoidable) Management is aware of the exposure but has been unable to implement a test environment due to budgetary constraints. We recommend that the City consider the risks /exposures identified above, as well as the cost /benefits if implementing test environments for all of its critical applications. Management Response Management concurs with this recommendation, however, at this time the City is uncertain of its future relationship with PeopleSoft. It is not likely that a significant investment in improvements to this system will be made until consensus is reached on the long -term future of this system application. Current Status The City has purchased the licenses to upgrade to Version 8.3 of PeopleSoft and will address the stated recommendations during this upgrade. 171 USER ACCESS CONTROLS Documentation of user access processes does not exist within the organization. The documentation of user access processes and controls helps to not only ensure that controls are in place and working as designed, but it also helps to ensure that business processes are not interrupted in the event of application administration turnover. We recommend that the City document formal policies and procedures that address user access controls. The documentation of such controls should address procedures for granting, modifying and terminating user access. In addition, formal policies and procedures should be documented to address continuous monitoring of user access. Management Response More formal access control procedures for the other core financial applications will be documented over the next twelve months. Current Status Implementation is currently in progress. PLATFORM SECURITY Management has committed resources over the past year to develop security around the Information Technology processing environment. Management has also invested in the necessary equipment for more secure remote access services. We commend management for working to enhance the security of the City's Information Technology infrastructure, and we encourage management to continue their efforts. During our review, we noted that UNIX security settings on production servers may expose their servers to unauthorized access. For example, certain enabled UNIX services (e.g., finger) are inherently risky as they may disclose information about the City's users or its network to unauthorized users and allow for exploitation of the City's network and information resources. Currently enabled services (e.g., echo, daytime and chargen) also may expose production services to denial of service attacks. As the City continues to enhance its security posture, we recommend that the City review its UNIX security environment and take actions to further enhance the security of its production systems as well as ensure that UNIX administrators are appropriately trained to understand the implications of security configurations and to identify potential exposures related to systems configuration. Specifically, we recommend that the City evaluate UNIX services that are enabled. If no business justification exists for these services, they should be deactivated. We further recommend that the City conduct periodic UNIX security review and run software tools (e.g., COPS, SATAN) on production servers to detect and correct vulnerabilities. The City also may wish to consider purchasing software tolls (e.g., security scanners, real time security monitoring tools) to facilitate security reviews and /or proactively detect vulnerabilities in its network environment. 172 PLATFORM SECURITY - Continued Management Response Management concurs with this comment and will continue to improve platform and network security within the resources provided. The Information Technology department will continue to implement and utilize the functionality of recently acquired network management tools. A forthcoming network architecture plan will more specifically identify network security protocols and maintenance procedures. Current Status Implementation is currently in progress. ENHANCING PASSWORD CONTROLS Passwords serve as the basis for providing controlled access to the City's information system resources. Adequate password controls should be in place to ensure access is properly restricted. The City has reasonable password parameters, however, modifying the current settings to those suggested by leasing practice guidelines can enhance system security. As suggested by leading practices, we recommend that the City set system parameters to: • expire assigned passwords on initial log -on • require that minimum passwords across all platforms and applications be at least six characters • force password changes every 45 -90 days • maintain at least five generations of password histories • lock accounts after three bad -login attempts, and require that access be reestablished through the help desk or system administrator • timeout user accounts after 30 minutes of inactivity • limit concurrent logins (i.e. one for typical users) We realize that some of the parameters suggested above are in place on various platforms and applications, however, we suggest that management review the suggestions and standardize the security parameters across all platforms and applications. In addition, we recommend that management develop a formal policy that addresses standard password and security requirements. This document should be distributed and reviewed with all City personnel with access to information systems. 173 ENHANCING PASSWORD CONTROLS - Continued Management Response Management concurs with these recommendations. A Governance plan and Network Architecture plan are scheduled for release within the next twelve months. These documents will outline standards and procedures for employees to follow, including security and password requirements. The mixed PC operating system environment is a significant detriment to efficiency and control since greater documentation and training for the user population is required. Additionally, migration to a uniform PC operating platform will greatly enhance the efficiencies in network administration and control systems. The Information Technology department will prepare a multi -year plan to facilitate the PC hardware and operating system upgrades. Current Status See current year comments. BUSINESS CONTINUITY PLANNING Many of the City's entities rely on the continuous business processing ability of the City's Information Technology environment. The City has documented a disaster recovery plan that provides for recovery of the data center, however, this plan does not address recovery of business processes. Additionally, this plan has not been updated or tested within the last year. Management understands the importance of maintaining a living document designed to address all aspects of business resumption planning. We recommend that the City dedicate the resources necessary to update its recovery plan as well as to prepare and plan for disasters that may impact Information Technology and non - Information Technology business processes. When updating the plan, management should ensure that the plan includes policies and procedures to be followed for both minor and major disruptions of business processes. We further recommend that management perform a business impact and risk analysis to determine the probability of possible natural or man-made disaster scenarios (hurricane, fire, bomb, etc.) and the impact of disasters or other interruptions limiting access to, damaging or destroying the data center. This will help to determine a minimum acceptable recovery period given the reliance management places on information systems and the impact on operations (e.g., downtime costs, additional staff required to perform manual processes or process backlogs, redeployment of key individuals, etc.) needed to perform manual processes and backlogs, etc. Based on these assessments, evaluate the current plan for adequacy. The City's plan should also include aspects of business recovery that are not currently addressed by the data center disaster recovery plan (e.g., recovery of critical business processes, initial response protocols, transitioning to normal operations, etc). We further recommend that the City designate a Business Resumption Coordinator (BRC) o ensure that the disaster recovery plan is updated as new technology is implemented; this will help to ensure that the plan provides for current recovery requirements. The BRC would be responsible for directing and coordinating testing efforts and training users to make certain that plans remain viable and users are prepared for their roles. The BRC should also be responsible for formulating communications strategies and protocols (e.g., establishing an incident command system) to be used during a disaster. 174 BUSINESS CONTINUITY PLANNING - Continued Management Response The City's disaster recovery plan will continue to be upgraded to incorporate as many aspects of post disaster recovery as possible within the resources allocated. The City requires each department to develop a disaster recovery plan for business operations within their area of accountability. The City currently has a designated emergency management coordinator and an incident command center that manage communications and recovery protocols during and after disasters. Current Status See current year comments. 175 This Page Intentionally Left Blank 176 ,,~r IJRO,JECT SITE LEGAL DESCRIPTIONS The legnl description lnbeled "Primary Site.11 as set forth below, has been prepared without benefit of a final field survey of said Primary Site (or the Home Depot Site or Bomber Field comprising said Primary Site). The partics agree that should a final field .survcy ofthe Primary Site (including surveys of the Home Depot Sitc and Bomber Field) disclose any errors or discrepancies in the legal description of the Primary Site set forth below, they will appropriately modify and amend the Primary Site legal description to correct any such etTors or discrepancies disclosed by such final field survey. Primary Site: Home Depot Site: Lot 1, THE CLEARWATER COLLECTION SECOND REPLAT, according to the plat thereof recorded in Plat Book 107. pages 24 and 25, Public Records of Pinellas County~ Florida. " ' TOGETHER WITH rights of ingress and egress as reserved in Warranty Deed recorded in Official Records Book ,1479, page 95, Public Records of Pinellas County~ Florida. TOGETHER WITH non-exclusive easements for ingress and egress, the passage and parking of vehicles, the passage and accommodation of pedestrians, separate . and common utility lines, construction, reconstruction, development, erection, removal and maintenance of building components and other matters over, on nnd under the land described in, and all as more particularly created, defined, located and limited in: (1) that certain Operation and Reciprocal Easement Agreement recorded in Official Records book 6440, page 2013; (2) Amendment to and Ratification of Operation and Reciprocal Easement agreement, recorded in Official Records Book 6735, page 217; (3) Third Amendment to an Operation and Reciprocal Easement agreement recorded in Official Records Book 6921, page 129; (4) unrecorded Third Amendment dated July 17, 1990, as referred to in the Fourth Amendment to an Operation and Reciprocal Easement Agreement recorded in Official Records Book 7541. page 849 which was re~recorded in ' Omcial Records Book 7561, page 2125; (5) Fourth Amendment to an Operation and Reciprocal Easement Agreement recorded in Official Records Book 7541, page 849 which was re-recorded in Official Records Book 7561. page 2125; and (6) Fifth Amendment to Operation and Reciprocal Easement Agreement recorded in Official Records Book 9664, page 451, Public Records of Pinellas Count'y, Florida; TOGETHER WITH non~cxclusivc casclllcnt rights as grunted by Parking and Driveway Ensement recorded in Official Records Book 6440, page 2002, as amended by Amended Parking and Driveway Easement recorded in Official' Records Book 6735. page 212, Public Records of Pinellas County, Florida. ,. , EXHIBIT "A" , ) , ' , , " '~ TOGETHER WITH a non-exclusive caselllent us described in that certain , Drainage Ensemcnt Agreement recorded in 0 fficial Records Book 6618, page 2 I 90, ,Public Records 0 f Pincllns County, Florida. LESS AND EXCEPT those portions of the above casement properties which lie within the properties taken, in fee simple, designated as Parcels 111 and 123 by Eminent Domain Suit No. 99-4965-CI, as evidenced by that Lis Pendens recorded in Official Records Book 10598, page 2406; Stipulated Order of Taking & Final Judgment recorded in Official Records Book 10714, page 617; and stipulated Order of Taking and final Judgment recorded in Official Records Book 10714, , page' 620; Stipulated Order. of T~lking and Partial Final Judgment recorded in Omcial Records Book 10714, page 624; Stipulated Order of Taking and Final Judgment recorded in Official Records Book 10714, page 628; Order of Taking recorded in, Official Records Book 10741, page 2041; Stipulated Final Judgment recorded in Official Records Book 11611, page 1495 and Amended Order of . Taking and Stipulated Final Judgment recorded in. Official Records Book] 1704, page 1408. Public Records of Pin ell as County, Florida. LESS ~ EXCEPT those portions of the abo~e casement properties which lie , within the properties taken; in fee simple, designated as Parcel 119 by Eminent Domain Suit No. 99-5089-CI, as evidenced by that Lis Pendens recorded in Official Records Book 10604, page 2207; Stipulated Order of Taking and Final Judgment recorded in Official Reco~ds Book 10662, page 353 and Stipulated ,9rder' of Taking and Final Judgment recorded in Official Records Book 10874, page 2276. Public Records of Pine lIas County, Florida. LESS AND EXCEPT that portion of said Lot 1 takcn, in fee simple, designated as PARCEL 120 by Eminent Domain Suit No. 99-4965-CI, as evidenced by that Lis' Pendens recorded in Official Records Book 10598, page 2406; Stipulated Order of Taking & Final Judgment recorded in Official Rccords Book 10714, page 617; and Stipulated Order of Taking and Final Judgment recorded in Official Records Book 10714, page 620; Stipulated Order of Taking and Partial Final Judgment recorded in Official Records Book 10714. page 624; Stipulated Order of Taking and Final judgment recorded in Official Rccords Book 10714, page 628; Order of Taking recorded in Official Records Book 10741, page 2041; Stipulated Final Judgment recorded in Official Records Book 11611, page 1495 and Amended Order of Taking and Stipulated Final Judgment recorded in Official Records , Book 11704, page 1408, Public Records ofPincllas County. EXIIIBIT II A" ii .-......d::.__ - , ' '. . , . ~ , , , " ,. ' .' '. I '.. t '. ;.'., I, " ': ' <,. :':':"<',~."" ,:':' ,\(. ,', : 'I' " ':., .'j ";"$' '.1' ..) , \ . >l!' . I' '<' . '1~).....,. \, .." c' '. ~ ?~. t ,7: " ':'~'" '-c~ l~,. .... ". , , , , " " , '. :',. . ; . , " ': .; c . I ~ , +.'. ~:', . . ',< ~'. .... .~ ',', ~ ". ".' ... .. : ~ ~ I . c. , ., :~y::.':I:::. " . . i::",r. '. . :rl/"""" ,[ {-'>,::;' . I ",. ~ \' ",,: ' " ,1' . : ~. ;" r:; ':, . ~':',. ", . ~ ',\ P. T " , -} c" .' \" , 1:.., . f,', .< "\ . "I' . ~, I . ". ~. ~ . J,' ,'" ,.c'" 'J '..\: < :, ",'- " . , L" '';'" ,. ,. '. <' ~" c....... 1-:. .~~.~~>.{:.~ . L~'j...... :. .:"\~ ".: .', , ~ ". .; , .' '~r': .' . .' . ,~ :~ . '>,~''-~ . 1~' j. ~ . I ~ ~~~~::~ ;::i'~;: .':: '.; Primary Site (continued): Bomber Field: - . Commence at the Northeast comer of Lot 1, The Clearwater Collccti,on Second Replat as recorded, in Pint Book 107, Pages 24 and ,25, of the Public Rcc'ords of, Pinellas County. Florida; thence N 89050' 51" W, 6.27 feet. to the Point of Beginning; thence N 89050'51" W, 993.48 feet; thence N 00043'26',' E, 436.73'; thenceS,89050'SP' E, 102.60 feet; thence S 66054'12" E, 114.96 feet; thence S' 89050'51" E, 790.19 feet; S 00054'50" W, 311.95 feet; thence 'g 05024'50" W) , 79.99 fcet, to the Point ofBcginni~g. ' ," , 'I . , I ,~ " , . " ~ " . , , , I '.), " . , .; 'r" . .', " " . ' " ' ,'., ", , , , , . EXHIBIT.'I A" " " ;1 . [I I . , . ~ " . , :\ iii ~ ,. ) , -, .',' ,"... '1.~' ..~" ;..', c :", :. ".~"I_" I:' . ....',:. . " ... CoUnternl Site: ' Parcell (Parking Lot Parcel): ~ " . 'A parcel of land within the Southwest 1,4 of the Southeast Y.. of Section 7J Township 29 South, Range 16 East, PineIIns County, Florida and being further described as roIIows: Commence at the Southwest comer of the Southeast v.. of said Section 7; thence along the West line of said Southeast y.. North 00 041 '47" EastJ for 50.00 feet to the North right-of- way line of Drew Street;' thence along said right-of-way line South 89040' 1911East for 542.36 feet to the Point of Beginning; thence leaving said line 'North 00~4114 7". East, for 435.00 feet; thence South 89040119" ~ast, for 761,.22 feet to the West right-or-way line of Old Coachman Road; thence along said right-of-way line South Qo047'54" West, for 435.00 feet to the intersection with said North right-of-way of Drew Street; thence along < 'said right-of-way line North 89040'19" \Vcst for 760.45 feet to the Point of Beginning. ! I I '! i :1 I " , . " Par~el 2 (Baseball and Soccer Fields Parcel): , A parcel of land within the Soutl1west y.. orlhe Southeast y.. of Section 7, Township 29 South, Range 16 East, Pinellas County, Florida and being further described as follows: 'Commence at the Southwest. corner of the' Southeast y.. of said Section 7; thence along the West line of said Southeast y.. North 00041 '47" East, for 485.00 feet to the Point of Beginning; thence continue along said line North 00041 '47" East, for 823.27 feet to the South right-of-way line' Sharkey Road (CR 2~9); thence along said right-of-way line' , South 89053'0211 East, for 1,305.1'0 feet to the intersection with the \Vest right~of~way line of Old Coachman Road; thence along said right-of.way line Souih po047'54" West, for , 828.12 feet; thence along said right-of-way line North 89040'19" West, for 1,303.58 feet to the Point of Beginning. h"" :1, I, .' ,. , " 'j . ~ '," =. . '.: ' " ' EXHIBIT" A" iv . ,". ':",. "IJ+.,~~~~" ~~ .." "'"'.!:...:1'~I~_~~~"'" ,'~" ". . u.. ..n....... I' . ." . I .. .~.' <l ..... ... J... "'rf'~ :., " .~, (" ,!,l "'., \~~~~"''''''!:''fIl~ · . _ ... ...(~\'~1f,~.A;;'c_~.;r.,~..a."t.......~~~i.w:.d' " .. '../ ~ ~n_. . :."i ~:-:~ ~~ EXHIBIT "A.1" ... ----... o ',' ,! ,'. i .:.I"'~ !. '.' . .. . .' ITEI\IIZA TION , OF INFRASTRUCTURE IMPROVEMENTS [", ,This is' the Itemization ofInfrastnlcture Improvements contemplated by Section 6.01 of the Agreement for Development Community Sports Complex, by and between the City , of Clearwater, Florida, ,and The Phillies, dated March 1, 2001. This itemization includes , those Infrastructure Improvements identified by the City as of March 1,2001, and is .' subject to change'by the parties as provided in tIle Agreement. Upon any such changes being approved then this Exhibit "I" will be amended, revised or replaced to reflect such changes. '.1. ' . . 'Construct southbound right turn lane '(storage and deceleration) from Old Coachman Road to project entrance. 0 / . Construct northbound left turn lane on Old Coachman Road from project entrance to Drew Street. ' ,,", . . Construct westbound right turn lane (storage and deceleration from Drew Street to , project entra,nce. , . Construct five-foot wide sidewalk on each side of Old Coachman Road from Drew Street to Sharkey Road. o ' o Provide striped pedestrian crosswalks at die Sharkey Road I Old Coachman Road intersection, and a pedestrian access points to the project site. ' ," EXHIBIT "I" , , " . ~~l:~;.i.\~~;~~';:;\\ ~,~ J- ,~~ ..,....,-,. '>~ .)., ~,b.. cO .~. L,....~,...'._ ,,-. ., . , . , , .. ~ ... .~ . ,,:. '. 11I11. ~ 1IIJ 'I , I I , I I I ; , , ' , ,...' , :.. '~'~""I -~ ''', '! -~ " .j'" I, . ~ t, ." . . .c. t , < , ~. ~,. " ~. !'t1" ,f;:: :~. t:'. r '';~;",~~+f ': I:" i :, , ' .,','. I ,- ,- .., .; 'j.' : , . ..... . I" ~ (::: !", . ~ :. . ~ ,I, " .- , " ~. " t..: J, - , .. :.' '. -, '" " i"" .' , ' , ' .;. . ~ ,: i ..:; " , 'e>' .. '. ' '" . " . ~.. . " " "'. ", - , . ~,. i/. It. --.... - .. " ,I I PROJECT SCHEDULE 'I: I; i~ i -, Below is the projcci schedule as it can be dctcmlined to date.. The project schedule is subject to update, change or adj~stment, by the parties, upon the completion of design work and as, other suc1~ information is obtained through the development ofthe proje,ct. Upon any such changes being approved then this Exhibit UGH will be amended, revised or , :replace~ to re~ect SUC~l changes. ' . April 02 - August 02 l\tIay 02,- June 02 , June 15,2002 JulyJ,2002 , September 2002 October 1, 2002 Oct. 02 - Nov. 02 J ao. 04 - Feb. 04 ~t"."fl;oJ~~)..t;-:~}"""~,,,,~"1~""""-:' ....>l. '. . ,.. , . Design work on stadium I ! :1 'I Surveys Work Completed Scope of Work Finalized . ' Project Site" Acceptability Detennination Date Site Work Commences Public Source Proj~ct Funding Deadline " , Construction commences , Occupancy or Community Sports Complex' . , I , EXHI,BIT uGIt, ' L >"'>h~'..""""""" +.,,~. ...,. ..._ i~ "',.J "'..'\ .~~ ".....~ '~l ."~.l ,,;:" ;t"'_. 'r\'o- , ,,: ",' ~ r~' ~4 , ,.. ... '.''! '.... .. ~ ... ..' " L Grant Thorntol1 m To the City Commio;sion<:rs City of Clearwatcr . Clearwater) Florida ::..)<:~~, ~'f;:',:,;j:: . ;" ";, '-"copies i"o;", . '". , , >:..',::,C9~~l~S.I'?N ,', , ~ ' . ....::,;'-"';...-t ~,....;.A> ':".'; ~"'., r'-,";.i ';' , .."."L ,...,'1" 't ':" ", ' : '-':",';':';':""::APR"~~2'~9' '~20':"'O'.'2" ,;,'; ':.,' " " . 't ~:,1;'l~~, .'..~.~l...i:. _,~...., I.. ..,'~ ":'. ~:..~.....~ ..... ..Jj,.l;:""....."".4":..r\f';...~~,_~l'. 1',,\: ~ , ft'" t.. 'J" 'I- ,~~...._... ":1-:llr, ...-.1 .....: .\.plJ....4... (i' . ./' -\0-. , , ,,1:,(._, .:,' . ~..III~,'?i~';1~'~<"~)'....~'~ ...,:, ',,' ,> \ ' . ' ,,"': :,.~~i '.l....~.~.,.~.;I~..fL~(~("'~E.;.S".S'.~',.....f\I".: :. .~... "..... ~ " . -I '~~4:-P' "'~lIll'7n .~" ~ ~'.'. : ,'.' ,',:'i~..':i;;i~ClERk.j ArrORN'EY'" ',.,',...,,: . . "",: '~' :,,:;\~,~'~',;:~;:~;":,~l<~~ ~~'~~ ~7" "~ ':/\'?' ,'l,:-:~. " :,:.',:": ' ; II" ,t,.'l,.~. ";'.': ~.~':f.1 ~"";-!~!;' -~}-Ci~"'.,J/t"";\ :~! ~ "fl~'l'~~:~- ,~~", .,"~\:~t~~tZ!~~~~iAi'~~~::r:~i)::", ;,;...~':. .'1' (I~~ A ,\, ~~;JJJ Accounlants and Managcmllnt CO"Iullants i i I I I' Professional standards, including Government Attdi~ing Standards, require that we advise you of the following matters relating to our recently concluded audit for the year ended September 30) 2001) on ~hich we reported under date of Fcbruary 14, 2002. The mattcrs discussed herei~ are those that we have noted 'as of February 14, 2002 and we have not updated our proccdurcs regarding these maners since that cbte to the currcnt date. ' Our Respo.lsibility under Auditing Standards Genenllly Acceptcd in the United States of America and Government Attditing Standards. As stated in our engagement letter da~ed May 17) 2001, our responsibility) as prescribed by professional standards and Government Auditing Standards, issued by the Comptroller General of the United States) is to plan and perform o~r audit 'to obtain reasonable assurance about whether the general purpose, combining)' individu~l fund and account group financial statements arc free of ' material misstatement, whether caused by error or fraud. An audit in accordance with auditing standards generally accepted in the United,States of America (US GAAS) and Government Auditing Standards does not provide absolute assurance or guarantee the accuracy of the financial statements and is subject to the inherent risk that errors, fraud or noncompliance with the provisions of laws, regulations) c'ontracts and grants, if existing) have not been detected. Such standards r~quir~ that we obtain a sufficient understanding of the City of Clearwater's (the "City)s") internal control structure to plan the audit.' However, such understanding and any tests performed with respect TO such internal controls) or as to compliance with laws, regulations) contracts and grants) were for the purpose of expressing our opinion on the City's fina,ncial statements and not to opine 01" provide any assurance concerning such internal control structure or compliance. We could) however, as a separate engagement) be engaged to perform agreed-upon procedures or examine and report on management's , written assertion about that internal control'structurc or that management complied with specified laws and regulations. Such engagements would be conducted in accordance with AICP A standards for attestation engagements. ' Suite 3850 101 E. Kennedy Blvd Tampa, FL 33602.5154 T 813.229.7201 F 813,223.3015 W www.granlthofnlOn.COm Grant Thomlon LlP US Momb9r of GIant Thornlon lnt,matloNI -- ...... -- - ',' , ~ ;', \x ,'.. . ...( '. ~. . : , " I\s required by Officc of rvlanagcl11clll ,1I1d Bud~~l ("0M BOO) Circular 1\-1 J3. Illte/its of StatL'S. Local Governments and Non.Profit O"gmm:,uio11$ and Ch.\ptcr 10.S50; Rules of the Auditor' General, we performed the following ,ldditional testing of internal controls and compliancc to suppbnem our financial statement audit procedures: ' , ' , .. o ,We considered the City's internal control over compliance with requirements that could h:wc a direct and matcri.,1 effect on,;l major federal, program or state project in order to determine our ,auditing procedures for the purpose of expressing our opinion on 'compliance and to test and , report on the internal control over compliance in .lccord.mce with OMB Circular A.l.B and " Chapter 1O.550t Rules of the Auditor General. !, I" · We audited the City's compliance with the types of compliance requirements described in the U.S.' Office of Management and Budget (OMB) Circular A-133 Compliance Supplement and in the Executive Office of the Governor's State Project Compliance Supplement that ~re applicable to its major federal progr;:.ms and state projects for the year ended September 30, 2001. Although such tests supplement our financial starement audit procedures, they were performed solely to meet the specified requirements of th,~ nforementioned regulations and do not constitute an examination directed toward the expression of an opinion with respect to the internal control structure or compliance ~ith such laws, regulations, contracts or grants. Accordingly; no such opini'on is expressed. Initial Selection oE Significant Accounting Policy As discussed in Note 6 of the City's Comp~ehensive Annual Financial Report, the City adopted the provisions of Governmental Accounting StandarJs Board Statement No, 3Jj Acmunting and Financial Reporting for Non Excbange Transactions ("GASB Statement No. 33") effective October I, 1999. The September 30, 2000 financial st;ltcments have been restated ro reflect the changes required by thi:; statement. Our Responsibilitv for Orher Information in Documents Containing Audited Financial Statements , Pursuant to professional standards, tile auditor's responsibility for other information in documents containing the City's audited financial statements docs, not extend beyond the financial information identified in the auditors' report, and the auditor is not required to perform procedures to corroborate . such other information. However; in accordance with Stich smndurds; we have read the information , in the introductory and statistical sections of the City's Comprehensive Annual Financial Report and considered whether such inform;ltion, or the manner of its presentation, was materially inconsistent with its pr~sentation in the financial statements. Our responsibility also includf:s calling, to management's attention any information that we believe is a material misstatement of fact. No such I c _ . . ~ inCOnSIstencies or rTIlsstatcmCnlS, came to 'our attenuon. , , . '. ~: . ............ .~ 'I '. I. I ':' . ~ ';~ "'..1,,' ' " \I' Manag9.!llent Juggments and Accountin~ Estim,ll~~ I I j' I ,Accounting estimates, based upon n1.ltlagcmcnt's juJ~ll1entst .w: an integral part of an entity's financial statements, Those judgments are nornlollly based on knowledge and experience about past .l,nd current events and ilssumptions .lboutfuture events. Certain 'accounting estimates ilre particularly sensitive because of their significance to \'he financial statements and, because of the possibility that future events affecting them may diffe'r markedly from management's current judgments, We believe that the City's allowance for uncollectible .lccounts for taxes receivable and other receivables and provision' for insurance claims payable represent such particularly sensitive accounting estimates. Management has informed us that in determining the appropriateness of these allowances and provisions, they reviewed all significant facts and circumstances. \VIe have performed tests' of these allowances nnd provisions to satisfy ourselves as to their reasonableness in rclation to the financial statements taken as ;l whole. ", For purp'oses of this letter, professional standards define a significant audit adjustment as a proposed correction of the financial statements that, in our judgment, may not have been detected except through our auditing procedures. The definition includes adjustments that were not recorded by the City because they arc not material to the current financial Statements but might be potentially material , 'to future financial statements. Management has represented to us that the uncorrected financial statement misstatements in' the attached schedule are immaterial, both individually and, in the aggregate) to the financial statements taken as a whole. i I I , I I i I , , " , ~nific:mt Audit Adiustments I ,j , Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a matter) whether or not resolved to our satisfaction) concerning a financial accounting) reporting) 01' auditing matter that could be significant to the City's financial'statements or the auditors' report. We are pleased to report that no such disagreements arose during rhe course of our audit. Cons~ltation with Other Accountants Management has informed usth,at they have not consulted with other accountants about auditing and accounting matters subsequent to our appointment as auditors for the City. , ' Maior Issues Discussed with Management Prior to Our Retention Prior to our'being retained as auditors for the current fiscal year, there were no major ,accounting and auditing issues discussed with management. ~. .1 - - -- ,1 I , I I," . " ,. + /' 4' 'I , , '., , , ". , ",r'.. ,,' . . ~ ..I , , c, . ,n '.: .' ,0 ~c. i" I , , !'" -I,' . . ..' . . ,,:;.,,":;' ..tf.~f~,:'::Lt):1 .... .:.1 ~:~~i~:" ::~ }.~: 'J ~. .:"~~" .' ~., " , ' , . ~ c '. ~ , Pifficultil's Enco\1lltered in Performing the Audit The c~rrent year's audit extended beyond the anticipated fieldwork completion principally due funds < not bei'lg "dosed out" by the planned due dates .md changes to prcvi~usly "closed funds" after audit ~chedules were prepared. However; the City's co~prehensivc annual financial report was prepare'd in good form by the City and completed before its statutory due, date. Additionally, we received good ,cooperation from the finance ?ep,artmem during the a'udit. ' 'Sh~~ld you ~es~re further infor~ation concer~ing 'these matters~ ,we will be happy to meet with you at your conveOlencc. This ietter is i'ntended solely for the iriformati~n and use of the Mayo~-Comrnissio'ner, Commissioners', 'I, and Man"gement of the' City and' is not intended to and should not b~ used by anyone other than , ' ' t~ese specified parties. i . . ~ , 'J:J,. . '../:. ,:'1,' , ' !f :.. ~. . i . . . . ," ~ .~ LLfl ,'.. . < ~ c,. . .' '. . , ' , ~ .' ' , ' T ~mpa, Florida FebnJa'ry 14, 2002 ' } '\' . " " " , .' , . , , ; 1< '.\ , . '.I II: ~l', . !' ,. , , , , .' " , , -. " .. ~ ' , " i :,~ :;' ..:',,','.~' ~ '.Ii! ::" ,.' ,',:"; i, ' """ , " .' , }, ", i ~' "';:..' ~, . , , City ofCJcarwater PAJEs 09/30/01 , ' . .: I P AJEs w/p Account Dr. ' Cr. I "('" "'. t. I ~ \ (1) , .7320 GF Utilities Expe~se (Fund 010) Utilities Expense (Fund 421) Utilities Expense (Fund 432) Utilities Expense (Fund 462) Utilities Expe'nse (Fund 565) , , Accounts Payable (Fund 010) Accounts Payable (Fund 421) Accounts Payable (Fund 432) Accounts Payable (Fund 462) A~counts Payable (Fund 565), 69.931 27.1 J3 3;029 3,488 6,102 : ....\ " .'. '. !.' . ~ '. I " ',' 69,931 , , 27.113 , 3.029 3.488 6,102 ,!, 'l.' '.~ f .' 1/ . . ~. ~ .' ,I. ~ . .~ , " 'J, , " ,I , , (fo accrue Rodda Power utility bill for services provided prior to year end.) " " , . (2)' 7300 #348 Capital Outlay' (Fund # 343) Capital Outlay (Fund # 348) Capit.'\J Outlay (Fund # 315) Retainage Payable (Fund# 343) Retainag~ Payable (Fund # 348) Retainage Payable (Fund # 315) 19,663 35.464 15.098 I'" \, 19,663 ' 35.464 15,098' , ',' (fo a~ctue retainage for A & L Underground invoice.) :,. . , ,', Net Effect , Increase E?tpense Increase Liabilities 179,888 . I ", 179.888 . , ~ ,I " " . \ , 'I ~.~ I "'- . .; ; r~\l: :: . 'l.' "1. .,~ ' c . :. fr,. ; I . . . ~ > '. 'It:t1~. ~_:"""""""'....w'J'''r_.''I~':'':',:",:",,:,,___'_~' r.,......~.~.-...."..~<I .. , " .... .- " ~..._..~-<.. .K........~.'..,... .flr.... ...." >"'l"~l"'''''-'''.'''''''''''"'''''''''."