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2017For the Fiscal Year Ended September 30, 2017 MIAMI SHORES VILLAGE, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2017 PREPARED BY THE FINANCE DEPARTMENT MIAMI SHORES VILLAGE, FLORIDA TABLE OF CONTENTS PAGE I. INTRODUCTORY SECTION (Unaudited) Letter of Transmittal i-v GFOA Certificate of Achievement vi List of Elected Officials vii List of Appointed Officials ix Organizational Chart x II. FINANCIAL SECTION Independent Auditors’ Report 1-2 Managements’ Discussion and Analysis (Required Supplementary Information) 3-13 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Position 14 Statement of Activities 15 Fund Financial Statements: Balance Sheet – Governmental Funds 16 Reconciliation of the Balance Sheet to the Statement of Net Position – Governmental Funds 17 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 18 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 19 Statement of Net Position – Proprietary Funds 20 Statement of Revenues, Expenses, and Changes in Fund Net Position – Proprietary Funds 21 Statement of Cash Flows – Proprietary Funds 22 Statement of Fiduciary Net Position – Fiduciary Funds 23 Statement of Changes in Fiduciary Net Position 24 Notes to the Basic Financial Statements 25-73 Required Supplementary Information: Budgetary Comparison Schedule: General Fund 74-75 Special Revenue Funds 76 Notes to Budgetary Comparison Schedule 77 Schedule of Changes in Net Pension Liability and Related Ratios – General Employees’ Retirement System (Village’s Reporting) 78 Schedule of Changes in Net Pension Liability and Related Ratios – General Employees’ Retirement System (Plan’s Reporting) 79 Schedule of Contributions – General Employee’s Retirement System (Village’s Reporting) 80 Schedule of Contributions – General Employee’s Retirement System (Plan’s Reporting) 81 Schedule of Investment Returns – General Employee’s Retirement System 82 Schedule of Changes in Net Pension Liability and Related Ratios – Police Officers’ Retirement System (Village’s Reporting) 83 Schedule of Changes in Net Pension Liability and Related Ratios – Police Officers’ Retirement System (Plan’s Reporting) 84 Schedule of Contributions – Police Officer’s Retirement System (Village’s Reporting) 85 MIAMI SHORES VILLAGE, FLORIDA TABLE OF CONTENTS PAGE II. FINANCIAL SECTION (Continued) Required Supplementary Information (Continued): Schedule of Contributions – Police Officer’s Retirement System (Plan’s Reporting) 86 Schedule of Investment Returns – Police Officer’s Retirement System 87 Schedule of Funding Progress – Other Post-Employment Benefits (OPEB) 88 Supplementary Information: Combining and Individual Financial Statements and Schedules: Combining Balance Sheet – Nonmajor Governmental Funds 89-90 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Governmental Funds 91-92 Schedules of Revenues, Expenditures and Changes in Fund Balances-Budget and Actual Nonmajor Governmental Funds 93-94 Internal Service Funds: Combining Statement of Net Position 95 Combining Statement of Revenues, Expenses and Changes in Fund Net Position 96 Combining Statement of Cash Flows 97 Fiduciary Funds: Combining Statement of Fiduciary Net Position – Pension Trust Funds 98 Combining Statement of Changes in Fiduciary Net Position – Pension Trust Funds 99 Statement of Changes in Assets and Liabilities – Agency Fund 100 III. STATISTICAL SECTION (Unaudited) Net Position by Component 101 Changes in Net Position 102-103 Fund Balances for Governmental Funds 104 Changes in Fund Balances of Governmental Funds 105 General Governmental and Excise Tax Revenues by Source 106 Assessed Value and Actual Value of Taxable Property 107 Property Tax Rates Direct and Overlapping Governments 108 Principal Property Taxpayers – Current Year and Nine Years Ago 109 Operating Property Tax Levies and Collections 110 Ratios of Outstanding Debt By Type 111 Direct and Overlapping Governmental Activities Debt 112 Legal Debt Margin Information 113 Demographic and Economic Statistics 114 Principal Employers Located in Miami Dade County – Current Year and Nine Years Ago 115 Village Employees by Function/Program 116 IV. COMPLIANCE SECTION Independent Auditors’ Report on Internal Controls over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 117-118 Management Letter In Accordance with the Rules of the Auditor General of the State of Florida 119-120 Independent Accountants’ Report on Compliance Pursuant to Section 218.415 Florida Statutes 121 INTRODUCTORY SECTION 1121050 N.E. SECOND AVENUE MIAMI SHORES, FLORIDA 331:38-2382 TELEPHONE: (3051 795-2207 FAX: (305) 755-8972 June 26, 2018 The Mayor and Members of the Village Council 10050 Northeast Second Avenue Miami Shores, Florida 33138-2382 To the Mayor and Members of the Village Council: Subject: FY 2016-17 Financial Report (CAFR) MacAdam Glinn MAYOR Sean Brady VICE MAYOR Jonathan Meltz COUNCILMAN Alice Burch COUNCILWOMAN Steven Zell-mwitz COUNCILMAN Tom Benton VILLAGE MANAGER Richard Sarafan VILLAGE ATTORNEY In compliance with Florida State Statute Chapter § 11.45, Chapter § 10.550 of the Rules of the Auditor General, and Chapter 34(3) of the Miami Shores Village Code of Ordinances, we are pleased to submit for your review and consideration the Miami Shores Village Comprehensive Annual Financial Report (CAFR) for the fiscal year ended September 30, 2017. The financial statements included in this report conform to generally accepted accounting principles in the United States of America ("GAAP") as prescribed by the Governmental Accounting Standards Board ("GASB"). The responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the Village. This report consists of management's representations concerning the financial condition of Miami Shores Village ("The Village"). Consequently, management assumes full responsibility for the complete presentation, reliability, and accuracy of all of the information presented in this report. To provide a reasonable basis for making these representations, the Village's management has established a comprehensive internal control framework that is designed both to protect the government's assets from loss, theft or misuse and to compile sufficient reliable information for the preparation of the Village's financial statements in conformance with accounting principles generally accepted in the United States. Because the cost of internal controls should not outweigh their benefits, the Village's comprehensive framework of internal controls have been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The financial statements have been audited by Caballero Fierman Llerena & Garcia, LLP, Certified Public Accountants. The independent auditor has issued an unmodified opinion that this report fairly represents the financial position of the Village in conformity with GAAP. Their audit was conducted in accordance with auditing standards generally accepted in the United States, Government Auditing Standards issued by the Comptroller General of the United States and the Rules of the Auditor General, State of Florida. The goal of the independent auditor is to provide reasonable assurance that the financial statements of the Village for the fiscal year ended September 30, 2017 are free of material misstatements. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the financial statements of Miami Shores Village for the fiscal year ended September 30, 2017 are fairly presented in conformity with generally accepted accounting principles (GAAP). -i- FY 2016· 17 Financial Report June 26, 2018 support for maintaining the highest standards of professionalism in the financial and operational management of Miami Shores Village. And, finally, we would like to express our sincere thanks and appreciation to the management and staff of our auditing firm, Caballero Fierman Llerena & Garcia, LLP. Their dedication to ensuring the accuracy of the data presented to you in this report was greatly evident during the past several weeks. Respectfully submitted, MIAMI SHORES VILLAGE THOMAS J. BENTON Village Manager -v- �� Holly Hugdahl, CPA, CGMA Finance Director Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to Miami Shores Village Florida For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2016 Executive Director/CEO vi Mayor Mac Adam Glinn Vice Mayor Sean Brady Councilwoman Alice Burch Councilman Jonathan Meltz Councilman Steven Zelkowitz MIAMI SHORES VILLAGE, FLORIDA LIST OF ELECTED OFFICIALS SEPTEMBER 30, 2017 vii MIAMI SHORES VILLAGE, FLORIDA LIST OF APPOINTED OFFICIALS SEPTEMBER 30, 2017 APPOINTED OFFICIALS Village Manager....................................................................................................Thomas J. Benton Village Clerk ............................................................................................ Ysabely Rodriguez, CMC Village Attorney....................................................................................................... Richard Sarafan DEPARTMENT HEADS Building Director ...................................................................................................... Ismael Naranjo Finance Director............................................................................................... Holly Hugdahl, CPA Library Director ...................................................................................................... Michelle Brown Planning & Zoning Director ...................................................................................David Dacquisto Chief of Police ............................................................................................................. Kevin Lystad Public Works Director .................................................................................................... Scott Davis Interim Recreation Director ...................................................................................... Angela Dorney VILLAGE AUDITORS Caballero Fierman Llerena & Garcia, LLP Accountants and Advisors ix MIAMI SHORES VILLAGE, FLORIDA ORGANIZATION CHART SEPTEMBER 30, 2017 MAYOR & COUNCIL MAYOR - MAC ADAM GLINN VICE MAYOR - SEAN BRADY COUNCILWOMAN - ALICE BURCH COUNCILMAN - JONATHAN MELTZ COUNCILMAN - STEVEN ZELKOWITZ VILLAGE CLERK YSABELY RODRIGUEZ, CMC VILLAGE ATTORNEY RICHARD SARAFAN, ESQ. VILLAGE MANAGER THOMAS J. BENTON BUILDING DIRECTOR ISMAEL NARANJO FINANCE DIRECTOR HOLLY HUGDAHL, CPA PLANNING & ZONING DIRECTOR DAVID DACQUISTO PUBLIC WORKS DIRECTOR SCOTT DAVIS CHIEF OF POLICE KEVIN LYSTAD DIRECTOR OF LIBRARY SERVICES MICHELLE BROWN INTERIM RECREATION DIRECTOR ANGELA DORNEY x FINANCIAL SECTION INDEPENDENT AUDITORS’ REPORT 1 4649 Ponce de Leon Blvd I Suite 404 I Coral Gables, FL 33146 T: 305.662.7272 F: 305.662.4266 I CFLGCPA.COM INDEPENDENT AUDITORS’ REPORT Honorable Mayor and Members of the Village Council Miami Shores Village, Florida Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Miami Shores Village, Florida (the “Village”) as of and for the fiscal year ended September 30, 2017, and the related notes to the financial statements, which collectively comprise the Village’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express opinions on these financial statements based on our audit. 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Village’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Village’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Village, as of September 30, 2017, and the respective changes in financial position and, where applicable, cash flows for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America. 2 4649 Ponce de Leon Blvd I Suite 404 I Coral Gables, FL 33146 T: 305.662.7272 F: 305.662.4266 I CFLGCPA.COM Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis on pages 3 through 13 and the Budgetary Comparison Schedules and related notes, Schedules of Changes in Net Pension Liability and Related Ratios, Schedules of Contributions, Schedules of Investment Returns, and the Schedule of Funding Progress– Other Post-Employment Benefits, on pages 74 through 88, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary and Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Village’s basic financial statements. The introductory section, combining and individual nonmajor fund financial statements and budgetary comparison schedules and statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and budgetary comparison schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and budgetary comparison schedules are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 26, 2018, on our consideration of the Village’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Village’s internal control over financial reporting and compliance. Caballero Fierman Llerena & Garcia, LLP Caballero Fierman Llerena & Garcia, LLP Coral Gables, Florida June 26, 2018 MANAGEMENT’S DISCUSSION AND ANALYSIS (Required Supplementary Information) MIAMI SHORES VILLAGE, FLORIDA MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2017 3 As management of Miami Shores Village, we offer readers of the Village’s financial statements this narrative overview and analysis of the financial activities of Miami Shores Village for the fiscal year ended September 30, 2017. Readers are encouraged to consider the information presented here in conjunction with additional information that is furnished in the letter of transmittal, which can be found on pages i to iv of this report. This discussion and analysis is designed to (a) assist the reader in focusing on significant financial issues; (b) provide an overview of the Village’s financial activity; (c) identify changes in the Village’s financial position (its ability to address the next and subsequent year challenges); (d) identify any material deviations from the financial plan (the approved budget); and (e) identify individual fund issues or concerns. The information contained within this section should be considered only a part of a greater whole. Financial Highlights for Fiscal Year 2017 • At September 30, 2017, Miami Shores Village assets and deferred outflows exceeded its liabilities and deferred inflows by $32.6 million (net position). Of this amount, $19 million was invested in capital assets, an increase of $462 thousand compared with the prior year. Additionally, $9.9 million was restricted by law, agreements, and debt covenants or for capital projects. The Village had an unrestricted net position of $3.7 million at September 30, 2017, a decrease of $1.6 million or a 31% decrease as compared with the prior year. The decrease in unrestricted net position was due to the purchase of capital assets and $1.1 million in costs associated with hurricane cleanup which are anticipated to be recovered in fiscal year 2018. • During fiscal year 2017, total net position decreased by $616 thousand, from $33.2 million in FY2016 to $32.6 million in FY2017. Of this decrease, $973 thousand was in governmental activities coupled with an increase of $357 thousand in business-type activities. • At September 30, 2017, Miami Shores Village’s governmental funds had fund balances totaling $13.2 million. Of the total fund balance, approximately $6.4 million or 48% was unassigned and $769 thousand or 6% was committed for future capital projects and encumbrances. The restricted fund balance of approximately $6 million, or 46%, is related to funds restricted by the contributing agency. The nonspendable fund balance of approximately $10 thousand is related to prepaid items. The net change in fund balances during the year was a decrease of $1.1 million attributable to hurricane cleanup. • The General Fund’s fund balance decreased by $510 thousand for the fiscal year ended September 30, 2017. This decrease was due to the purchase of a residence contiguous with an existing park. The decrease was less than anticipated as a result of departmental savings during the year due to unfilled vacant positions and other lower than budgeted cost savings. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the basic financial statements of Miami Shores Village. The Village’s basic financial statements comprise of three components: 1) government-wide financial statements; 2) individual fund financial statements; and, 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the financial activity of Miami Shores Village, in a manner similar to a private-sector business. The Statement of Net Position presents information on all of the assets and deferred outflows and liabilities and deferred inflows of Miami Shores Village, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Village is improving or deteriorating. MIAMI SHORES VILLAGE, FLORIDA MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2017 4 The Statement of Activities presents information showing how the government’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions of Miami Shores Village that are principally supported by taxes and intergovernmental revenues (governmental activities) as well as other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of Miami Shores Village include general government, public safety, public works, building, planning, zoning, code enforcement, parks and recreation. The business-type activities of the Village include Sanitation, Stormwater, and Water and Sewer operations. The government-wide financial statements may be found on pages 14 to 15 of this report. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. Miami Shores Village, like other local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of Miami Shores Village can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term cash flow and financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions and the impact on short term cash flow requirements to meet basic on-going operations. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balance provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. Miami Shores Village maintains thirteen (13) individual governmental funds. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures and changes in fund balance for the general fund and the three major funds. Data from the other nine governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report. The basic governmental fund financial statements may be found on pages 16 to 19 of this report. Proprietary funds. Miami Shores Village maintains three proprietary or enterprise funds. Enterprise Funds are used to report the same functions presented as business-type activities in the government-wide financial statements. Miami Shores uses enterprise funds to account for its Sanitation, Stormwater, and Water & Sewer operations. Internal service funds provide for an accounting method whereby the organization can accumulate and allocate costs internally among the other user divisions. The Village uses internal service funds to account for its risk management costs as well as its fleet operation. Because both of these services predominantly benefit governmental rather than business- type functions, they have been included within governmental activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Village’s Sanitation, Stormwater, and Water & Sewer operations, the Sanitation Fund is considered to be a major fund of the Village. Additionally, the Village segregates the financial reporting of both internal service funds to better distinguish the costs of each function. The basic proprietary fund financial statements may be found on pages 20 to 22 of this report. MIAMI SHORES VILLAGE, FLORIDA MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2017 5 Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the Village’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements may be found on pages 23 to 24 of this report. Notes to the financial statements. The notes provide additional information that is essential to fully understand the data provided in the government-wide and fund financial statements. The notes to the financial statements may be found on pages 25 to 73 of this report. Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the progress in funding its obligations to provide pension benefits to the employees of Miami Shores Village. Required supplementary information may be found on pages 74 to 88 of this report. The combining statements referred to earlier in connection with non-major governmental funds and internal service funds are presented immediately following the required supplementary information. Combining and individual fund statements and schedules may be found on pages 89 to 100 of this report. Government-wide Financial Analysis The difference between a government’s assets and deferred outflows and its liabilities and deferred inflows is its net position. The Village’s net position summarized below: 2017 2016 2017 2016 2017 2016 2017-2016 Current and other assets 17,474$ 17,481$ 8,122$ 8,792$ 25,596$ 26,273$ -2.58% Capital assets 21,429 21,594 7,043 6,655 28,472 28,249 0.79% Total assets 38,903 39,075 15,165 15,447 54,068 54,522 -0.83% Deferred outflows related to pension 3,342 3,955 237 258 3,579 4,213 -15.05% Total deferred outflows of resources 3,342 3,955 237 258 3,579 4,213 -15.05% Long-term liabilities outstanding 16,580 17,216 5,490 5,578 22,070 22,794 -3.18% Other liabilities 1,580 687 882 1,455 2,462 2,142 14.94% Total liabilities 18,160 17,903 6,372 7,033 24,532 24,936 -1.62% Deferred inflows on business license tax 497 566 1 1 498 567 -12.17% Total deferred inflows of resources 497 566 1 1 498 567 -12.17% Net investment in capital assets,15,915 15,399 3,258 3,123 19,173 18,522 3.51% Restricted 5,817 5,710 3,772 3,691 9,589 9,401 2.00% Unrestricted 1,856 3,452 1,999 1,857 3,855 5,309 -27.39% Total net position 23,588$ 24,561$ 9,029$ 8,671$ 32,617$ 33,232$ -1.85% Miami Shores Village Summary of Net Position (in thousands) Govermental activities Business-type activities Total primary govermental Total percentag e change MIAMI SHORES VILLAGE, FLORIDA MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2017 6 Net position may be used to assess the financial position of the Village. The Village’s combined net position as of September 30, 2017 was $32.6 million. Approximately 58%, or $19 million, of the Village’s net position represent net investment in capital assets. These assets include land, buildings, machinery and equipment, and infrastructure and are not available for future spending. Additionally, $9.8 million are restricted net position and are subject to external restrictions on how they may be spent. At September 30, 2017, Miami Shores Village had an unrestricted net position of $3.6 million. At the end of the current fiscal year, Miami Shores Village is able to report positive balances in all three categories of net position, both for the government as a whole, as well as for its separate governmental and business-type activities. Business-type activities 2017 2016 2017 2016 2017 2016 2017-2016 Revenues: Program revenues: Charges for services 3,747$ 3,741$ 2,938$ 2,886$ 6,685$ 6,627$ 0.88% Operating grants & Contributions 802 798 - - 802 798 0.50% Capital grants and Contributions - - 557 3,691 557 3,691 -84.91% General Revenues: Property taxes 7,924 7,326 - - 7,924 7,326 8.16% Other taxes 2,105 2,141 - - 2,105 2,141 -1.68% Intergovernmental revenues 1,109 1,092 - - 1,109 1,092 1.56% Interest earnings - unrestricted 60 26 11 57 71 83 -14.46% Miscellaneous 549 508 - - 549 508 8.07% Total revenues 16,296 15,632 3,506 6,634 19,802 22,266 -11.07% Expenses: General government 3,478 3,377 - - 3,478 3,377 2.99% Public safety 7,095 6,461 - - 7,095 6,461 9.81% Highways Streets 3,861 2,503 - - 3,861 2,503 54.25% Sanitation / Stormwater / Water & Sewer - - 2,795 2,828 2,795 2,828 -1.17% Culture & recreation 3,036 3,145 - - 3,036 3,145 -3.47% Interest on Long-term Debt 152 169 - - 152 169 -10.06% Total expenses 17,622 15,655 2,795 2,828 20,417 18,483 10.46% Increase(decrease) in net position before Transfers (1,326) (23) 711 3,806 (615) 3,783 -116.26% Sale of capital assets - - - - - - - Transfers 353 400 (353) (400) - - - Increase(decrease) in net position (973) 377 358 3,406 (615) 3,783 -116.26% Beginning net position 24,561 24,184 8,671 5,265 33,232 29,449 12.85% Ending net position 23,588$ 24,561$ 9,029$ 8,671$ 32,617$ 33,232$ -1.85% Miami Shores Village Changes in Net Position (in thousands) Total percentage change Governmental activities Total primary government Continued on next page MIAMI SHORES VILLAGE, FLORIDA MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2017 7 Governmental activities. Financial activities for the fiscal year are reported below. Key indicators, including revenues and expenditures by category are presented herein for review: Ending net position decreased 1.85% during FY2017. The decrease in ending net position is attributable to costs associated with hurricane cleanup which are anticipated to be recovered in fiscal year 2018. Continued on next page Figure A-1 Expenses and Program Revenues – Governmental Activities For the Fiscal Year Ended September 30, 2017 Figure A-2 Revenues by Source – Governmental Activities For the Fiscal Year Ended September 30, 2017 $- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 Revenues Expenses General government Public safety Public Works Culture/recreation Interest on long-term debt Property Taxes 48% Charges for services 25% Investment earnings 0% Other taxes 21% Other 6% MIAMI SHORES VILLAGE, FLORIDA MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2017 8 Business-type activities. The Miami Shores Village major business-type activities include the following enterprise funds:  Sanitation Fund  Stormwater Fund  Water & Sewer Fund Net position of business-type activities decreased by approximately $209 thousand. This decrease is due to increased costs in Sanitation and the continued implementation of GASB Statement No. 68, Accounting and Financial Reporting for Pensions – an amendment of GASB Statement No. 27. Under this Statement, the Village is required to record the net pension liability in the business-type-activities for the current year, as well as, having to restate the net position as of September 30, 2015. The amount of the restatement is $353 thousand. The ending net position at September 30, 2015 of $5.6 million is restated to the beginning net position of $5.3 million at September 30, 2016. The bar graph below summarizes the expenses and program revenues of the business-type activities. Figure A-3 Expenses and Program Revenues – Business-type Activities For the Fiscal Year ended September 30, 2016 Financial Analysis of the Government’s Funds As noted earlier, Miami Shores Village uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. Governmental funds. The focus of the governmental funds for Miami Shores Village is to provide information on near- term inflows, outflows and balances of spendable resources. Such information is useful in assessing the Village’s financing requirements. In particular, the unassigned fund balance may serve as a useful indicator of the governments net resources available for spending at the end of a fiscal year. As of the end of the current fiscal year, the governmental funds for Miami Shores Village reported combined ending fund balances of $13.2 million, a $1 million decrease compared to FY2016. Of this amount, $6.4 million reflects unassigned fund balance, which is available for spending at the government’s discretion. The remainder of the fund balance is committed or restricted to indicate that it is not available for new spending as those dollars have already been 1) committed to liquidate contracts or encumbered fiscal obligations (outstanding purchase orders) valued at $769 thousand, 2) restricted for funds which restrict how the funds may be spent of $6 million and 3) nonspendable for funds used to account for amounts which cannot currently be spent, such as prepaid expenses of $10 thousand. The General Fund is the primary operating fund of the Village. At the end of the current fiscal year, the unassigned fund balance for the General Fund was $7.5 million as compared with $7.9 million in the prior year. $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 Sanitation Stormwater Water & Sewer Program Revenue Expenses MIAMI SHORES VILLAGE, FLORIDA MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2017 9 The Village's General Fund balance decreased by $502 thousand during the 2017 fiscal year. This can be attributed to the purchase of a residence contiguous with an existing park increasing available green space for resident use. Although the Village had budgeted a $1.4 million deficit to purchase the residence, build a park, and hire additional police officers, departmental savings, due to unfilled vacant positions and other lower than budgeted cost savings, reduced the anticipated deficit. The Village has four other major funds, Excise Tax Fund, Police Forfeiture, General Trust Fund and Grant Fund. The Excise Tax Fund collects public service taxes, per loan requirements, and transfers the taxes to the General Fund. The fund balance of $766 thousand will be transferred to the general fund in future years. The Police Forfeiture Fund accumulates proceeds which are received from forfeitures related to ongoing investigations. The Village has one officer assigned to the federal program. The expenditure of these funds is restricted by strict governmental rules and approval of the Village Council. The fund balance of $1.5 million will be used for future projects for the Police Department. The General Trust Fund accumulates funds that are restricted for specific purposes, i.e. recreation, building department, library, and charter school repairs. During fiscal year 2017, the fund balance decreased $78 thousand dollars. These funds were used to upgrade software utilized by the Building Department. The fund balance of $1.2 million will be used for future projects. The Grant Fund accounts for the proceeds received from Federal, State, and other local sources in the form of grants that are restricted to expenditures for specific purposes. During fiscal year 2017, the Village accumulated expenditures related to hurricane cleanup costs and property damage. These expenditures are reimbursed to the Village by the Federal Emergency Management Administration (FEMA) and the State of Florida. The fund balance at year end was a deficit of $1.1 million. This deficit will be eliminated in fiscal year 2018 once reimbursement is received from the agencies discussed above. Proprietary funds. The Village’s proprietary funds provide the same type of information found in the government- wide financial statements, but in more detail. • Unrestricted net position of the Sanitation Fund at the end of the year totaled $1 million. Unrestricted net position will be used to fund future purchases of capital assets. • Unrestricted net position of the Stormwater Fund at the end of the year totaled $950 thousand, a $52 thousand increase in unrestricted net position. Unrestricted net position is maintained to fund future projects for the existing stormwater system. • Unrestricted net position of the Water & Sewer Fund at the end of the year totaled $26,560. Unrestricted net position is maintained to fund future maintenance of the system. General Fund Budgetary Highlights The Village adopts annual budgets by fund, general fund department and line item in compliance with Florida State Statute Section 200.065 (commonly referred to as the Truth-in Millage Legislation). The law requires municipal organizations to prepare and adopt annual operating budgets for the General, Special Revenue and Debt Service Funds following uniform time frames related to property tax levies. The balanced budgets may be revised throughout the year. The Village’s code allows for department level budget transfers without council approval; however, department and fund total changes require Council-approved budget amendments adopted by resolution. The Village’s policy is to adopt the budget following the second public hearing of each fiscal year, held in September for an October 1st year. The Village has also adopted a policy which provides for the reappropriation of committed fund balance for encumbrances. This amendment is usually adopted as the first budget amendment of each fiscal year and is normally presented at the first meeting in November of each fiscal year. Additional budget amendments may be presented to council at any time during the fiscal year. MIAMI SHORES VILLAGE, FLORIDA MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2017 10 Over the course of the year, the Village amended the General Fund budget five times. The budget amendments fall into two categories: (1) Amendments are approved for rollovers related to prior year encumbrances; and (2) supplemental appropriations to provide appropriations for various other needs which have arisen since the adoption of the budget. W ith these adjustments, disbursements were approximately $1.15 million below final budgeted amounts. Savings were realized in general government, $295 thousand, public safety, $410 thousand, public works, $114 thousand, and culture and recreation, $327 thousand. These savings in general government costs and various departmental costs were due to staff vacancies and conservative spending. The fiscal year 2017 final amended budget was $16.8 million, an increase of 6.6 % over the original General Fund budget of $15.8 million. Correspondingly, the Consumer Price Index (or inflation index) from the U.S. Bureau of Labor Statistics – All Urban Consumers for the past year was 2.2%. The final Adopted Budget is balanced with revenues of $12.3 million, $3.1 million in operating transfers from Excise Tax, Sanitation Fund and Stormwater Fund and $1.4 million from fund balance. Cost savings of $1.15 million, less the lower than anticipated revenues of $265 thousand, reduced the fund balance appropriation to $510 thousand. Capital Asset and Debt Administration Capital Assets. Miami Shores Village’s investment in capital assets for its governmental and business-type activities as of September 30, 2017 amounts to $28.5 million (net of accumulated depreciation). The increase of approximately $222 thousand is related to the $500 thousand purchase of a residence contiguous with an existing park, less annual depreciation. The investment in capital assets includes Village-owned buildings, equipment and other infrastructure (streets, sidewalks, easements, right-of-ways). The value of capital investments includes the cost of the Doctors’ Charter School of Miami Shores. The following table summarizes the components of the Village’s investments in capital assets. Miami Shores Village Capital Assets as of September 30, 2017 and 2016 (net of depreciation, in thousands) Governmental Activities Business-Type Activities Total Classification 2017 2016 2017 2016 2017 2016 Land $ 2,358,437 $ 2,358,437 $ - $ - $ 2,358,437 $ 2,358,437 Construction in progress 448,726 409,304 4,251,145 3,691,488 4,699,871 4,100,792 Building 9,993,093 9,782,782 - - 9,993,093 9,782,782 Land Improvement 1,198,508 1,408,375 - - 1,198,508 1,408,375 Infrastructure 5,740,212 5,867,489 1,809,471 1,075,103 7,549,683 6,942,592 Machinery and equipment 1,689,670 1,768,027 982,249 1,888,271 2,671,919 3,656,298 Totals $ 21,428,646 $ 21,594,414 $ 7,042,865 $ 6,654,862 $ 28,471,511 $ 28,249,276 Additional information on Miami Shores Village’s capital assets may be found in Note 6 on Pages 42 to 43 of this report. Long-term Liabilities. At September 30, 2016, Miami Shores Village had $22.8 million in long-term liabilities, which are summarized in the schedule below. The increase of $6.2 million is related to a note payable of $5 million for the construction of a water and sewer project in the Northeast Second Avenue Business District and GASB Statement No. 68, Accounting and Financial Reporting for Pensions – an amendment of GASB Statement No. 27. Additional information on the Village’s long-term debt may be found in Note 7 on Pages 43 to 46 of this report. MIAMI SHORES VILLAGE, FLORIDA MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2017 11 Miami Shores Village Outstanding Long-term Liabilities as of September 30, 2017 and 2016 Governmental Activities Business-type activities Total Primary Government 2017 2016 2017 2016 2017 2016 General obligation bonds $ 5,291,600 $ 5,596,900 $ - $ - $ 5,291,600 $ 5,596,900 Other debt 222,159 590,938 4,680,000 4,840,000 4,902,159 5,430,938 Total bonds and notes payable 5,513,759 6,187,838 4,680,000 4,840,000 10,193,759 11,027,838 Other liabilities: OPEB liability 819,636 731,251 145,533 129,839 965,169 861,090 Estimated insurance claims payable 340,000 340,000 - - 340,000 340,000 Compensated absences 803,287 688,081 134,637 109,796 937,924 797,877 Net pension liability 9,103,273 9,268,260 530,151 498,750 9,633,424 9,767,010 Total $16,579,955 $17,215,430 $5,490,321 $5,578,385 $22,070,276 $22,793,815 Economic Factors and Next Year’s Budgets and Rates Miami Shores Village is a single-family, residential community. As such, standard economic indicators used to determine the overall health of a community are slightly different for Miami Shores. Since the Village’s “business community” is restricted to a six-block area on Second Avenue and isolated pockets of business entities on Biscayne Boulevard, the Village must monitor property values and other residentially-related trends to determine the health and vitality of the community. Quality recreational activities, including the Village’s first-class aquatics facility, support the residents’ requirement for high standards and outstanding recreation and leisure activities. This, along with its own public safety department, provides a higher standard of living than that which is found in surrounding municipalities. The State of Florida, by constitution, does not have a state personal income tax and therefore, the State operates primarily using sales, gasoline and corporate income taxes. Local governments (cities, counties, and school boards) primarily rely upon property taxes and a limited array of permitted other taxes (sales, telecommunication, gasoline, utilities services, etc.) and fees (franchise, building permits, occupational licenses, etc.) for funding of their governmental activities. In addition, there are a number of state-shared revenues and recurring and non-recurring (one-time) grants from both the state and federal governments. On January 29, 2008, the Florida electorate approved an amendment to the Florida Constitution relative to property taxation. This amendment (referred to as Amendment 1) was placed on the ballot by the Florida legislature at a special session held in October 2007. With respect to homestead property, Amendment 1 increases the $25,000 homestead exemption by another $25,000 for the portion of assessed property value exceeding $50,000, except for school district taxes. Amendment 1 also allows property owners to transfer (make portable) up to $500,000 of their Save Our Homes benefits to their next homestead when they move. Save Our Homes became effective in 1995 and limits (caps) the annual increase in assessed value for homestead property to three percent (3%) or the percentage change in the Consumer Price Index, whichever is less. With respect to non-homestead property, Amendment 1 limits (caps) the annual increase in assessed value for non- homestead property (businesses, industrial property, rental property, second homes, etc.) to ten percent (10%), except for school district taxes. The Amendment also provides a $25,000 exemption for tangible personal property. Amendment 1 became effective on October 1, 2008 with the exception of the ten percent (10%) assessment cap on non-homestead property which became effective on January 1, 2009. Additional tax relief bills, which could further limit the extent to which municipalities can levy taxes, continue to be introduced by the state legislature. MIAMI SHORES VILLAGE, FLORIDA MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2017 12 Actual taxes levied by the Village in 2017 reflected an increase of $578 thousand, precipitated by an increase in property values of $73 million or 8.1% in property values as compared with 2016. Based on the current real estate market within the Village, it is anticipated that assessed values will continue to increase due to the desirability of the area and the close location to Greater Downtown Miami. Property values for fiscal year 2017 showed an increase of $73 million, increasing property tax revenues by $578 thousand. During the current fiscal year, unassigned fund balance in the General Fund was $7.4 million, a decrease of $500 thousand compared to the unreserved fund balance in 2016 of $7.9 million. This $7.4 million is approximately equal to 5.7 months of General Fund operating expenditures. Even though fair market property values are expected to increase; assessed property values are limited by the “Save Our Homes” benefits. This limits the increase in property tax revenue even when property values are increasing. Expenditures such as payroll and personnel benefits will continue to increase. Fiscal year 2018 budgeted expenditures and transfers are expected to be $15.6 million, or 1.3%, less than the fiscal year 2017 budget of $15.8 million. The Village, as can be shown in the following graph, is maintaining its unassigned fund balance so that a portion of unassigned fund balance will be available to preclude or moderate additional increases in operational expenditures, or be available to fund capital improvements. General Fund Unrestricted and Unassigned Surplus For the Fiscal Years ended September 30, 2008-2017 In 1995, the state of Florida limited all local governments’ ability to increase property assessments of homestead property in any given year to 3 percent or cost of living, whichever is lower. The graph below shows the millage rates over the past ten years. For many years, the Village, just like many cities across the country, had to face the challenge of keeping taxes and service charges as low as possible while providing residents with the level of service they have come to expect. 0 1000000 2000000 3000000 4000000 5000000 6000000 7000000 8000000 9000000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 MIAMI SHORES VILLAGE, FLORIDA MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2017 13 Miami Shores Village Total Village Millage For the Fiscal Years ended September 30, 2008-2017 Fiscal year 2018 budgeted expenditures and transfers are expected to decrease $200 thousand compared with fiscal year 2017. This decrease in expenditures is due to a reduction in debt service and capital transfers. Requests for Information This financial report is designed to provide a general overview of Miami Shores Villages’ finances to our citizens, taxpayers, customers, investors, creditors, and others with an interest in the Villages’ finances. Questions concerning this report or requests for additional financial information should be directed to the Finance Director, Holly Hugdahl, CPA, CGMA. MIAMI SHORES VILLAGE Finance Department 10050 Northeast Second Avenue Miami Shores, Florida 33138-2382 0 2 4 6 8 10 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Operating Millage Debt Service Millage BASIC FINANCIAL STATEMENTS Business- Governmental Type Activities Activities Total ASSETS Cash and cash equivalents 15,978,413$ 3,721,721$ 19,700,134$ Investments 303,658 - 303,658 Accounts receivable - net 965,219 291,323 1,256,542 Special assessment receivable - 4,039,007 4,039,007 Prepaid items 174,663 - 174,663 Inventories 51,953 63,753 115,706 Restricted assets: Cash and cash equivalents - 6,732 6,732 Capital assets not being depreciated 2,807,163 4,251,145 7,058,308 Capital assets being depreciated, net 18,621,483 2,791,720 21,413,203 Total assets 38,902,552 15,165,401 54,067,953 DEFERRED OUTLOWS OF RESOURCES Pension 3,342,776 236,480 3,579,256 LIABILITIES Accounts payable and accrued liabilities 1,500,763 95,265 1,596,028 Unearned revenues 63,593 787,274 850,867 Accrued interest payable 15,293 - 15,293 Noncurrent liabilities: The amount due in one year 539,454 193,659 733,113 The amount due in more than one year 16,040,501 5,296,662 21,337,163 Total liabilities 18,159,604 6,372,860 24,532,464 DEFERRED INFLOWS OF RESOURCES Business license tax 87,400 - 87,400 Pension 409,921 465 410,386 Total deferred inflows of resources 497,321 465 497,786 NET POSITION Net investment in capital assets 15,914,887 3,257,609 19,172,496 Restricted for: Water & sewer - 3,772,478 3,772,478 Public safety 1,504,837 - 1,504,837 Transportation 1,587,133 - 1,587,133 Debt service 1,157,487 - 1,157,487 Charter school 879,692 - 879,692 Recreation 922,113 - 922,113 Unrestricted 1,622,254 1,998,469 3,620,723 Total net position 23,588,403$ 9,028,556$ 32,616,959$ MIAMI SHORES VILLAGE, FLORIDA STATEMENT OF NET POSITION SEPTEMBER 30, 2017 See notes to basic financial statements 14 Operating Capital Business- Charges for Grants and Grants and Governmental Type Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Governmental activities: General government 3,478,191$ 1,211,656$ -$ -$ (2,266,535)$ -$ (2,266,535)$ Public safety 7,094,590 1,116,160 - - (5,978,430) - (5,978,430) Public works 3,860,624 62,144 801,908 - (2,996,572) - (2,996,572) Culture and recreation 3,036,354 1,356,565 - - (1,679,789) - (1,679,789) Interest on long-term debt 151,794 - - - (151,794) (104,944) (256,738) Total governmental activities 17,621,553 3,746,525 801,908 - (13,073,120) (104,944) (13,178,064) Business-type activities: Sanitation 2,464,762 2,623,010 - - - 158,248 158,248 Stormwater 224,695 244,936 - - - 20,241 20,241 Water & sewer 763 70,143 - 556,382 - 625,762 625,762 Total business-type activities 2,690,220 2,938,089 - 556,382 - 804,251 804,251 Total 20,311,773$ 6,684,614$ 801,908$ 556,382$ (13,073,120) 699,307 (12,373,813) 7,923,699 - 7,923,699 2,104,726 - 2,104,726 1,109,035 - 1,109,035 60,740 10,623 71,363 549,075 - 549,075 352,819 (352,819) - 12,100,094 (342,196) 11,757,898 (973,026) 357,111 (615,915) 24,561,429 8,671,445 33,232,874 23,588,403$ 9,028,556$ 32,616,959$ MIAMI SHORES VILLAGE, FLORIDA FISCAL YEAR ENDED SEPTEMBER 30, 2017 Program Revenues Net (Expense) Revenue and Changes in Net Position STATEMENT OF ACTIVITIES General revenues: Property taxes, levied for general purpose Public service taxes Intergovernmental (unrestricted) Investment income (unrestricted) Net position, beginning Net position, ending Miscellaneous Transfers Total general revenues Change in net position See notes to basic financial statements 15 Other Total Police Governmental Governmental General Excise Tax Forfeiture General Trust Grants Funds Funds ASSETS Cash and cash equivalents 6,943,660$ 389,076$ 1,477,938$ 1,614,996$ -$ 3,241,464$ 13,667,134$ Investments 303,658 - - - - - 303,658 Accounts receivable - net 241,187 376,665 11,632 - - 170,188 799,672 Due from other funds 373,105 - - - - - 373,105 Prepaid items 4,506 - - 5,174 - - 9,680 Total assets 7,866,116$ 765,741$ 1,489,570$ 1,620,170$ -$ 3,411,652$ 15,153,249$ LIABILITIES Accounts payable and accrued liabilities 266,117$ -$ 7,403$ 403,208$ 700,009$ 56,295$ 1,433,032$ Due to other funds - - - - 373,105 - 373,105 Unearned revenues 57,185 - - - 6,408 - 63,593 Total liabilities 323,302 - 7,403 403,208 1,079,522 56,295 1,869,730 DEFERRED INFLOWS OF RESOURCES Business license tax 87,400 - - - - - 87,400 FUND BALANCES Nonspendable 4,506 - - 5,174 - - 9,680 Restricted - 765,741 1,482,167 1,211,788 - 2,586,391 6,046,087 Committed - - - - - 768,966 768,966 Unassigned 7,450,908 - - - (1,079,522) - 6,371,386 Total fund balances 7,455,414 765,741 1,482,167 1,216,962 (1,079,522) 3,355,357 13,196,119 Total liabilities, deferred inflows of resources, and fund balances 7,866,116$ 765,741$ 1,489,570$ 1,620,170$ -$ 3,411,652$ 15,153,249$ MIAMI SHORES VILLAGE, FLORIDA BALANCE SHEET FOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2017 Major Funds See notes to basic financial statements 16 Fund balances - total governmental funds (Page 16)13,196,119$ Amounts reported for governmental activities in the statement of net position are different as a result of: Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. Governmental capital assets 41,907,244$ Less accumulated depreciation (22,396,876) 19,510,368 Deferred inflows/outflows of resources in the statement of net position will be recognized in future periods. Deferred outflows related to pension 3,281,993 Deferred inflows related to pension (409,826) 2,872,167 Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the governmental funds. Bonds and notes payable (5,513,759) OPEB liability (819,636) Net pension liability (8,974,930) Accrued interest payable (15,293) Compensated absences (781,306) (16,104,924) Net position of internal service funds are not reported with governmental funds 4,114,673 Net position of governmental activities (Page 14)23,588,403$ SEPTEMBER 30, 2017 MIAMI SHORES VILLAGE, FLORIDA RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSITION GOVERNMENTAL FUNDS See notes to basic financial statements 17 O t h e r T o t a l Po l i c e G o v e r n m e n t a l G o v e r n m e n t a l Ge n e r a l Ex c i s e T a x Fo r f e i t u r e Ge n e r a l T r u s t Gr a n t s Fu n d s Funds Re v e n u e s : Pr o p e r t y t a x e s 7 , 4 4 6 , 6 8 6 $ - $ - $ - $ - $ 4 7 7 , 0 1 3 $ 7 , 9 2 3 , 6 9 9 $ Pu b l i c s e r v i c e t a x e s - 2 , 1 0 4 , 7 2 6 - - - - 2 , 1 0 4 , 7 2 6 Li c e n s e s a n d p e r m i t s 1 , 2 1 2 , 0 2 9 - - - - - 1 , 2 1 2 , 0 2 9 In t e r gov e r n m e n t a l r e v e n u e s 1, 1 0 2 , 7 6 5 - - - 6 , 2 7 0 8 0 1 , 9 0 8 1 , 9 1 0 , 9 4 3 Ch a r g e s f o r s e r v i c e s 1 , 8 2 9 , 7 5 6 - - - - - 1 , 8 2 9 , 7 5 6 Fi n e s a n d f o r f e i t u r e s 5 5 4 , 0 6 8 - 1 4 0 , 2 5 8 - - 2 , 3 8 3 6 9 6 , 7 0 9 Mi s c e l l a n e o u s 3 7 1 , 3 0 9 - 7 7 , 9 1 9 9 7 , 7 0 1 3 0 0 1 , 8 4 6 5 4 9 , 0 7 5 In t e r e s t i n c o m e 4 2 , 0 2 3 - 4 , 1 0 1 3 , 3 4 2 - 5 , 9 5 4 55,420 To t a l r e v e n u e s 1 2 , 5 5 8 , 6 3 6 2 , 1 0 4 , 7 2 6 2 2 2 , 2 7 8 1 0 1 , 0 4 3 6 , 5 7 0 1 , 2 8 9 , 1 0 4 16,282,357 Ex p e n d i t u r e s : Cu r r e n t : Ge n e r a l g o v e r n m e n t 3 , 1 9 1 , 9 6 6 - - 9 0 , 7 2 6 6 , 2 7 0 4 6 , 5 2 4 3 , 3 3 5 , 4 8 6 Pu b l i c s a f e t y 6 , 5 2 0 , 4 9 4 - 1 2 9 , 8 9 0 - - - 6 , 6 5 0 , 3 8 4 Pu b l i c W o r k s 1 , 5 3 2 , 9 1 3 - - - 1 , 0 7 9 , 8 2 2 4 6 0 , 5 3 7 3 , 0 7 3 , 2 7 2 Cu l t u r e a n d r e c r e a t i o n 2 , 5 6 8 , 4 6 4 - - 2 7 , 3 4 3 - - 2 , 5 9 5 , 8 0 7 Ca p i t a l o u t l a y - - 8 9 , 2 4 4 6 1 , 0 3 1 - 1 , 0 6 5 , 5 0 2 1 , 2 1 5 , 7 7 7 De b t s e r v i c e : - Pr i n c i p a l - - - - - 6 7 4 , 0 7 9 6 7 4 , 0 7 9 In t e r e s t - - - - - 1 5 1 , 7 9 4 151,794 To t a l e x p e n d i t u r e s 1 3 , 8 1 3 , 8 3 7 - 2 1 9 , 1 3 4 1 7 9 , 1 0 0 1 , 0 8 6 , 0 9 2 2 , 3 9 8 , 4 3 6 17,696,599 (D e f i c i e n c y ) e x c e s s o f r e v e n u e s o v e r ex p e n d i t u r e s b e f o r e o t h e r f i n a n c i n g s o u r c e s (us e s ) (1 , 2 5 5 , 2 0 1 ) 2 , 1 0 4 , 7 2 6 3 , 1 4 4 ( 7 8 , 0 5 7 ) ( 1 , 0 7 9 , 5 2 2 ) ( 1 , 1 0 9 , 3 3 2 ) (1,414,242) Ot h e r f i n a n c i n g s o u r c e s ( u s e s ) : Tr a n s f e r s i n 2 , 5 9 3 , 0 5 8 - - - - 1 , 8 9 4 , 5 5 0 4 , 4 8 7 , 6 0 8 Tr a n s f e r s ( o u t ) ( 1 , 8 4 8 , 0 3 1 ) ( 2 , 1 9 3 , 0 5 8 ) - - - ( 9 3 , 7 0 0 ) (4,134,789) To t a l o t h e r f i n a n c i n g s o u r c e s ( u s e s ) 7 4 5 , 0 2 7 ( 2 , 1 9 3 , 0 5 8 ) - - - 1 , 8 0 0 , 8 5 0 352,819 Ne t c h a n g e i n f u n d b a l a n c e s ( 5 1 0 , 1 7 4 ) ( 8 8 , 3 3 2 ) 3 , 1 4 4 ( 7 8 , 0 5 7 ) ( 1 , 0 7 9 , 5 2 2 ) 6 9 1 , 5 1 8 ( 1 , 0 6 1 , 4 2 3 ) Fu n d b a l a n c e , b e g i n n i n g 7, 9 6 5 , 5 8 8 8 5 4 , 0 7 3 1 , 4 7 9 , 0 2 3 1 , 2 9 5 , 0 1 9 - 2 , 6 6 3 , 8 3 9 14,257,542 Fu n d b a l a n c e , e n d i n g 7, 4 5 5 , 4 1 4 $ 7 6 5 , 7 4 1 $ 1 , 4 8 2 , 1 6 7 $ 1 , 2 1 6 , 9 6 2 $ ( 1 , 0 7 9 , 5 2 2 ) $ 3 , 3 5 5 , 3 5 7 $ 13,196,119$ MI A M I S H O R E S V I L L A G E , F L O R I D A ST A T E M E N T O F R E V E N U E S , E X P E N D I T U R E S , A N D C H A N G E S I N F U N D B A L A N C E S GO V E R N M E N T A L F U N D S FO R T H E F I S C A L Y E A R E N D E D S E P T E M B E R 3 0 , 2 0 1 7 Ma j o r F u n d s Se e n o t e s t o b a s i c f i n a n c i a l s t a t e m e n t s 18 Amounts reported for governmental activities in the statement of activities are different as a result of: Net change in fund balances - total government funds (Page 18)(1,061,423)$ Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is depreciated over their estimated useful lives. Expenditures for capital outlays capitalized 1,229,845$ Less current year depreciation (1,499,633) Net adjustment (269,788) The net effect of various transactions involving capital assets (i.e., sales, trade-ins and donations) is to increase (decrease) net position.227,257 The issuance of long term debt (e.g., bonds, leases) provides current financial debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position.resources to governmental funds, while the repayment of the principal of long term. Principal payments 674,079 674,079 Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Change in net pension liability and other deferral amounts (363,574) Change in compensated absences (115,207) Change in OPEB liability (88,385) Change in accrued interest payable 10,664 Allocation of internal service funds' net income 13,351 (543,151) Change in net position of governmental activities (Page 15)(973,026)$ FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2017 MIAMI SHORES VILLAGE, FLORIDA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES See notes to basic financial statements 19 Governmental Activities - Internal Service ASSETS Sanitation Stormwater Water & Sewer Total Funds Current assets: Cash and cash equivalents 1,936,457$ 1,041,989$ 743,275$ 3,721,721$ 2,311,279$ Accounts receivable - net 271,922 19,401 - 291,323 165,547 Special assessment receivable - - 4,039,007 4,039,007 - Inventories 63,753 - - 63,753 51,953 Prepaid items - - - - 164,983 Restricted assets: Cash and cash equivalents - - 6,732 6,732 - Total current assets 2,272,132 1,061,390 4,789,014 8,122,536 2,693,762 Capital assets: Capital assets not being depreciated - 3,275 4,247,870 4,251,145 7,127 Capital assets being depreciated, net 982,249 1,809,471 - 2,791,720 1,911,151 Total noncurrent assets 982,249 1,812,746 4,247,870 7,042,865 1,918,278 Total assets 3,254,381 2,874,136 9,036,884 15,165,401 4,612,040 DEFERRED OUTLOWS OF RESOURCES Pension 220,909 15,571 - 236,480 60,783 LIABILITIES Current liabilities: Accounts payable and accrued liabilities 48,140 1,486 45,639 95,265 67,731 Unearned revenues 673,819 63,862 49,593 787,274 - Compensated absences 32,425 1,234 - 33,659 5,495 Notes payable - - 160,000 160,000 - Total current liabilities 754,384 66,582 255,232 1,076,198 73,226 Non-current liabilities: Compensated absences 97,276 3,702 - 100,978 16,486 Notes payable - - 4,520,000 4,520,000 - Net pension liability 485,690 44,461 - 530,151 128,343 OPEB liability 129,363 16,170 - 145,533 - Claims payable - - - - 340,000 Total noncurrent liabilities 712,329 64,333 4,520,000 5,296,662 484,829 Total liabilities 1,466,713 130,915 4,775,232 6,372,860 558,055 DEFERRED INFLOWS OF RESOURCES Pension 449 16 - 465 95 NET POSITION Net investment in capital assets 982,249 1,812,746 462,614 3,257,609 1,918,278 Restricted for: Capital activites - - 3,772,478 3,772,478 - Unrestricted 1,025,879 946,030 26,560 1,998,469 2,196,395 Total net position 2,008,128$ 2,758,776$ 4,261,652$ 9,028,556$ 4,114,673$ Enterprise Funds Business-type Activities - MIAMI SHORES VILLAGE, FLORIDA STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30, 2017 See notes to basic financial statements 20 Governmental Activities - Internal Service Sanitation Stormwater Water & Sewer Total Funds Operating revenues: Charges for services 2,623,010$ 244,936$ 70,143$ 2,938,089$ 1,931,143$ Operating expenses: Administrative and general 807,420 28,002 763 836,185 738,084 Personnel expenses 1,012,490 99,419 - 1,111,909 235,435 Depreciation 175,862 78,800 - 254,662 236,420 Contractual services 468,990 18,474 - 487,464 - Insurance premiums and claims - - - - 713,173 Total operating expenses 2,464,762 224,695 763 2,690,220 1,923,112 Operating income 158,248 20,241 69,380 247,869 8,031 Non-operating revenues (expenses): Interest income 4,297 2,363 3,963 10,623 5,320 Interest - special assessment - - - - - Interest expense - - (104,944) (104,944) - Other expenses - - - - - Net non-operating revenues (expenses)4,297 2,363 (100,981) (94,321) 5,320 Income before transfers and contributions 162,545 22,604 (31,601) 153,548 13,351 Transfers in - - 47,181 47,181 - Transfers out (350,000) (50,000) - (400,000) - Contributions - - 556,382 556,382 - Change in net position (187,455) (27,396) 571,962 357,111 13,351 Net position, beginning 2,195,583 2,786,172 3,689,690 8,671,445 4,101,322 Net position, ending 2,008,128$ 2,758,776$ 4,261,652$ 9,028,556$ 4,114,673$ Enterprise Funds Business-type Activities - MIAMI SHORES VILLAGE, FLORIDA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2017 See notes to basic financial statements. 21 Governmental Activities- Internal Service Sanitation Stormwater Water & Sewer Total Funds Cash flows from operating activities: Cash received from customers, governments and other funds 2,716,562$ 248,876$ 67,726$ 3,033,164$ 1,967,398$ Cash paid to suppliers (1,286,846) (84,747) (523,256) (1,894,849) (1,412,982) Cash paid for employees (937,924) (80,418) - (1,018,342) (215,614) Net cash provided by operating activities 491,792 83,711 (455,530) 119,973 338,802 Cash flows from non-capital financing activities: Transfers in - - 47,181 47,181 - Transfers out (350,000) (50,000) - (400,000) - Net cash (used in) non-capital financing activities (350,000) (50,000) 47,181 (352,819) - Cash flows from capital related financing activities: Acquisition and construction of capital assets (83,008) - (556,382) (639,390) (118,089) Special assessments received - - 132,088 132,088 - Proceeds from notes - - (160,000) (160,000) - Issuance cost - - - - - Interest paid on capital debt - - (104,944) (104,944) - Net cash provided by (used in) capital and related financing activities (83,008) - (689,238) (772,246) (118,089) Cash flows from investing activities: Interest on special assessment - - - - - Interest and other income 4,297 2,363 3,963 10,623 5,320 Net cash provided by investing activities 4,297 2,363 3,963 10,623 5,320 Net increase (decrease) in cash and cash equivalents 63,081 36,074 (1,093,624) (994,469) 226,033 Cash and cash equivalents, October 1 1,873,376 1,009,190 1,843,631 4,726,197 2,085,246 Cash and cash equivalents, September 30 1,936,457$ 1,045,264$ 750,007$ 3,731,728$ 2,311,279$ Reported in statement of net position as follows: Unrestricted 1,936,457$ 1,041,989$ 743,275$ 3,721,721$ 2,311,279$ Restricted - - 6,732 6,732 - 1,936,457$ 1,041,989$ 750,007$ 3,728,453$ 2,311,279$ Reconciliation of operating income to net cash provided by operating activities: Operating income 158,248$ 20,241$ 69,380$ 247,869$ 8,031$ Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 175,862 78,800 - 254,662 236,420 Change in assets and liabilities: (Increase) decrease in: Accounts receivable 92,168 3,580 - 95,748 36,255 Inventories 803 - - 803 (5,034) Prepaids - - - - 1,887 Deferred outflows of resources for pension 23,441 (1,474) - 21,967 (4,255) Increase (decrease) in: Accounts payable and accrued liabilities (11,239) (38,271) (522,493) (572,003) 41,422 Compensated absences 23,340 1,501 - 24,841 4,902 OPEB liability 13,950 1,744 - 15,694 - Due to other funds - - - - - Unearned revenues 1,384 360 (2,417) (673) - Net Pension Liability 14,143 17,258 - 31,401 19,255 Deferred inflows of resources for pension (308) (28) - (336) (81) Total adjustments 333,544 63,470 (524,910) (127,896) 330,771 Net cash provided by operating activities 491,792$ 83,711$ (455,530)$ 119,973$ 338,802$ Noncash capital related financing activities: Contributions -$ -$ 4,039,007$ 4,039,007$ -$ Total noncash capital related financing activities -$ -$ 4,039,007$ 4,039,007$ -$ Enterprise Funds Business-type Activities - MIAMI SHORES VILLAGE, FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2017 See notes to basic financial statements 22 Pension Private Trust Purpose Funds Trust Agency ASSETS Cash and cash equivalents 931,572$ 1,434,735$ 186,680$ Receivables: Accrued interest and dividends 66,277 - - Total receivables 66,277 - - Investments, at fair value U.S. Government securities 3,661,822 - - Municipal bonds 84,348 - - Corporate bonds 4,730,679 - - Mutual funds - equity 18,923,223 - - Common stocks 5,903,453 - - Mortgage backed securities 3,298,480 - - Foreign bonds 268,948 - - Total investments 36,870,953 - - Total assets 37,868,802 1,434,735 186,680 LIABILITIES Other liabilities - - 186,680 Total liabilities - - 186,680 NET POSITION Net position resticted for pensions and charter school 37,868,802$ 1,434,735$ -$ MIAMI SHORES VILLAGE, FLORIDA STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS SEPTEMBER 30, 2017 See notes to basic financial statements 23 Pension Private Trust Purpose Funds Trust ADDITIONS Contributions: Employer 1,548,956$ -$ Employees 397,185 - State of Florida 100,575 - Total contributions 2,046,716 - Investment income: Unrealized gains 2,336,451 - Realized gains 118,559 - Interest and dividend income 1,714,566 8,420 Total investment income 4,169,576 8,420 Less investment expenses (141,666) - Net investment income 4,027,910 8,420 Total additions 6,074,626 8,420 DEDUCTIONS Benefits paid 1,580,444 - Administrative expenses 105,645 - Total deductions 1,686,089 - Net increase 4,388,537 8,420 Net position resticted for pensions and charter school Beginning of year 33,480,265 1,426,315 End of year 37,868,802$ 1,434,735$ MIAMI SHORES VILLAGE, FLORIDA STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2017 See notes to basic financial statements 24 NOTES TO BASIC FINANCIAL STATEMENTS MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 25 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Financial Reporting Entity Miami Shores Village, Florida, (the Village) was incorporated in 1931 and is a political subdivision of the State of Florida located in northeastern Miami-Dade County. The Village operates under a Council- Manager form of government, with its legislative function being vested in a five-member council. The Village Council is governed by the Village Charter and by state and local laws and regulations. The Village Council is responsible for the establishment and adoption of policy. The Village provides the following full range of municipal services as authorized by its charter: public safety, streets, sanitation, stormwater, culture and recreational activities, public improvements, planning and zoning, and general administrative services. As required by generally accepted accounting principles, these basic financial statements present the reporting entity of the Village. Component units are legally separate entities for which the government is considered to be financially accountable and for which the nature and significance of their relationship with the primary government are such that exclusion would cause the Village’s combined financial statements to be misleading or incomplete. The primary government is considered financially accountable if it appoints a voting majority of an organization’s governing body and 1) it is able to impose its will on the organization or 2) there is a potential for the organization to provide specific financial benefit to or impose specific financial burden on the Board. Additionally, the primary government is required to consider other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity financial statements to be misleading or incomplete. Based upon the application of these criteria, there were no organizations which met the criteria described above. The financial statements of the Village have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting. The more significant of the Village's accounting policies are described below: B. Government-Wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the Village. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 26 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) B. Government-Wide and Fund Financial Statements (Continued) in the fund financial statements. All remaining non-major governmental funds are aggregated and reported as other governmental or other proprietary funds. C. Measurement Focus, Basis of Accounting and Basis of Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of the related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Village considers receivables collected within 60 days after year-end to be available and recognizes them as revenues of the current year. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Revenues for expenditure driven grants are recognized when the qualifying expenditures are incurred. All other revenue items are considered to be measurable and available only when cash is received by the Village. The Village reports the following major governmental funds: General Fund - This fund is the Village’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. Grant Fund - This fund accounts for the use of specific designated resources related to grant programs. Excise Tax Fund - This fund records revenues received by the Village for contractually-adopted franchise fee agreements and corresponding public service or utility taxes. The receipts of these funds are used to subordinate the Village’s General Obligation Bond Series 1999 should insufficient debt service revenues be received from ad valorem levies. Surplus proceeds are then transferred out of this fund and into the General Fund for operating purposes. Police Forfeiture - This fund accounts for proceeds obtained through the sale of confiscated and unclaimed property turned over to the Village through court judgments. Proceeds are to be used solely for law enforcement purposes. General Trust Fund - This fund accumulates assets for its employees, other governmental entities and/or funds, primarily for the recreation, library and police departments, as well as the charter school. MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 27 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) The Village reports the following major proprietary fund: Sanitation Fund - This fund accounts for the operations and maintenance of the Village’s sanitation system. Stormwater Fund - This fund accounts for the operations and maintenance of the Village’s stormwater system. Water & Sewer Fund - This fund accounts for the annual assessments to pay for the construction cost and maintenance fees for the NE Second Avenue Business District Water & Sewer Project. Future maintenance costs for the grind pumps will be paid from this fund. Additionally, the Village reports the following fund types: Internal Service Funds - The internal service funds are used to account for the financing of goods or services provided by one department to other departments of the Village, on a cost reimbursement basis. The Village has two internal service funds, the Risk Management Fund and the Fleet Maintenance Fund. Pension Trust Funds - The pension trust funds account for the activities of the Police Pension and General Employees’ Retirement Plans, which accumulate resources for pension benefits to qualified employees. Private Purpose Trust Fund - This fund accounts for a donation from a foundation to be held by the Village on behalf of the Doctors Charter School to assist with meeting the operating needs of the school. Agency Fund - The agency fund is custodial in nature and does not present results of operations or have a measurement focus. This fund is used to account for assets that the Village holds for others in an agency capacity. The financial statements of the Village have been prepared in accordance with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the standard setting body for governmental accounting and financial reporting. The financial statements of the Village follow the guidance of GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements for both the government wide and proprietary fund financial statements. Governments also have the option of following subsequent FASB pronouncements for their business-type activities and enterprise funds subject to this same limitation. The Village has elected not to follow subsequent FASB guidance. As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between the Village’s enterprise fund functions and various other functions of the Village. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 28 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, and 2) operating grants and contributions, and 3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proceeds from local option gas tax and Transportation Surtax are used to fund transportation related expenditures and therefore are reported as program revenues under the function “Public Works”. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the sanitation, and stormwater fund and internal service funds are charges to customers or other funds for services. Operating expenses for the enterprise funds and internal service funds include the cost of services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. When both restricted and unrestricted resources are available for use, it is Village policy to use restricted resources first, and then unrestricted resources as needed. D. Deposits and Investments The Village's cash and cash equivalents, for purpose of the statement of cash flows, include cash on hand, time and demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition. The Village maintains a cash pool that is available for use by all funds. Interest earned on pooled cash is allocated to each of the funds, based on the fund’s average pooled cash balance on a monthly basis. All of the Village’s investments are reported at fair value, which is based on quoted market prices. The Village’s investments consist of amounts placed with the State Board of Administration in the Local Government Surplus Funds Trust Fund (Florida PRIME) investment pool. The Florida PRIME is considered a SEC 2a-7-like fund, thus reported at its fair value of its position in the pool, which is the same as its value of the pool shares. The Plan’s investments are carried at fair value using quoted market prices to value investments. Differences between cost and market value are recorded as net unrealized gains or losses. Net realized gains or losses for securities which are sold are combined with the unrealized gains and losses and shown as “net appreciation (depreciation) in fair value of investments” in plan net position. Dividends and interest are recognized as earned. Purchases and sales of investments are recorded on a trade- date basis. The Village's investments in Florida PRIME are governed by the provisions of Florida Statutes Section 218.415. Investments in the Village's retirement plans are governed by the Plan's investment policies. MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 29 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) E. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (i.e. the current portion of interfund loans) or “advances to/from other funds” (i.e. the non-current portion of interfund loans). All other outstanding balances between funds are reported as “due to/from other funds”. Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.” F. Inventories and Prepaid Items Inventories are valued at cost using the first-in, first-out (FIFO) method. The costs of governmental fund-type inventories are recorded as expenditures when consumed rather than when purchased (consumption method). In the governmental funds, reported inventories are offset by fund balance reserve which indicates that they do not constitute available spendable resources. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded – in both, the government-wide and fund financial statements – as prepaid items by recording an asset for the prepaid amount and recognizing the expenditure in the year such item is consumed (consumption method). Amounts reported in the governmental funds are offset by an equal reservation of fund balance in the fund financial statements. This is an indication that these components of current assets do not constitute available spending resources. G. Property Taxes Property values are assessed as of January 1 of each year, at which time taxes become an enforceable lien on the property. Tax bills are mailed for the Village by Miami Dade County on or about October 1 of each year and are payable with discounts of up to 4% offered for early payment. Taxes become delinquent on April 1 of the year following the year of assessment and State law provides for enforcement of collection of property taxes by seizure of the personal property or by the sale of interest- bearing tax certificates to satisfy unpaid property taxes. Assessed values are established by the Miami-Dade County Property Appraiser. In November 1992, a Florida constitutional amendment was approved by the voters, which provides for limiting the increases in homestead property valuations for ad valorem tax purposes to a maximum of 3% annually and also provides for reassessment of market values upon changes in ownership. The County bills and collects all property taxes and remits them to the Village. State statutes permit municipalities to levy property taxes at a rate of up to 10 mills ($10 per $1,000 of assessed taxable valuation). The tax levy of the Village is established by the Village Council and the Miami-Dade County Property Appraiser incorporates the Village’s millage into the total tax levy, which includes the County and the County School Board tax requirements. The millage rate assessed by the Village for the year ended September 30, 2017 was 7.9000 mills ($7.9000 per $1,000 of taxable assessed valuation). MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 30 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) H. Restricted Assets Assets of the debt service fund have been classified as restricted because their use is restricted by a bond indenture agreement for the Village’s debt service requirements. Proceeds from forfeiture funds are classified as restricted in the Law Enforcement Training and Police Forfeiture Special Revenue Funds since these resources are specifically earmarked for law enforcement purposes only. Additionally, proceeds from the People’s Transportation Tax and Local Option Gas Tax are classified as restricted since these resources may only be used for road and transportation related expenditures. Assets held in the General Trust Fund are restricted primarily for recreation, library and police departments, as well as the charter school. I. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. The Village defines capital assets as assets with an initial, individual cost of more than $1,000 and an estimated useful life in excess of three years. Purchased or constructed assets are recorded at historical cost or estimated historical cost. Donated capital assets are recorded at estimated fair market value at the date of donation. Major outlays for capital assets and improvements are capitalized as projects are constructed. The costs of normal maintenance and repairs that do not add value to the asset or materially extend its useful life are not capitalized. Capital assets of the Village are depreciated using the straight line method over the following estimated useful lives: Assets Years Buildings and improvements 10-40 Land improvements 40 Infrastructure 30 Sanitation equipment 10 Vehicles 5 Other equipment, machinery, furniture and fixtures 3-10 J. Deferred Outflows/Inflows of Resources In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The Village has pension amounts that qualify for reporting in this category on the government-wide statement of net position in the amount of $3,579,256. MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 31 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) J. Deferred Outflows/Inflows of Resources (Continued) In additions to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as inflows of resources (revenue) until that time. The Village has local business licenses taxes and pension expenses that quality for reporting in this category in the amount of $ 87,400 and $410,386, respectively. Net position is the residual of all other elements presented in a statement of financial position. It is the difference between (a) assets plus deferred outflow of resources and (b) liabilities and deferred inflows of resources. K. Compensated Absences Village employees are granted vacation and sick leave in varying amounts based on length of service and the department which the employee serves. The Village’s vacation policy allows all regular non- temporary employees to accrue vacation leave on a monthly basis. Vacation leave accrued in previous year must be used prior to the next year’s anniversary date (unless authorized by the Village Manager). Upon separation from Village employment in good standing, employees shall receive a lump sum payment for any unused accrued vacation leave up to a maximum allotted for the employee’s length of service. The Village’s sick leave policy provides for the accumulation of one work day per month up to a maximum of 720 hours for a general employee. A general employee shall receive payment for one hundred percent (100% to a maximum of 720 hours) of accrued sick leave upon retirement and fifty (50%) upon separation in good standing. For both vacation and sick leave, there is no payout for an employee who is discharged for misconduct, termination or is not in good standing with the Village. All vacation and sick leave is accrued and reported as a fund liability when it is probable that the Village will compensate the employee with expendable available financial resources. Vacation and sick leave is accrued when incurred in proprietary funds and reported as a fund liability. All vacation pay is accrued when incurred in the government-wide and proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. For governmental funds, compensated absences are generally liquidated by the General Fund. L. Unearned Revenues Unearned revenues include amounts collected before revenue recognition criteria are met and receivables, which, under the modified accrual basis of accounting, are measurable, but not yet available. The unearned items consist primarily of license and permit revenues. Unearned revenues in the proprietary funds are related to billings for the 16-17 fiscal year. MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 32 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) M. Employee Benefit Plan The Village provides a separate defined benefit pension plan for its police officers and general employees. At September 30, 2017, for purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions and pension expense, information about the General Employees’ Retirement Plan and the Police Officers’ Retirement Plan are presented in the government-wide statement of net position. The net pension liability is a function of the annual required contributions, interest, adjustments to the annual required contribution, annual pension costs and actual employer’s contributions made to the Plans. Please refer to Note 10 for further information. N. Post-Employment Benefits Other Than Pensions (OPEB) Pursuant to Section 112.0801, Florida Statutes, the Village is mandated to permit participation in the health insurance program by retirees and their eligible dependents at a cost to the retiree that is no greater than the cost at which coverage is available for active employees. Retirees are required to pay 100% of the premium rates where premiums are determined based upon a blended rates used for active employees and retirees. These premium rates were adjusted to reflect differing utilization rates by age and gender and the impact of the Medicare program on claim costs. The blended rates provide an implicit subsidy for retirees because, on an actuarial basis, their current and future claims are expected to result in higher costs to the plan on average than those of active employees. The Village currently provides these benefits in accordance with the vesting and retirement requirements of the Village. The Village is financing the post employee benefits on a pay-as-you go basis. As determined by an actuarial valuation, the Village records a net OPEB obligation in its government-wide and proprietary financial statements related to the implicit subsidy. For governmental funds, the OPEB obligation is generally liquidated by the General Fund. The OPEB plan does not issue separate financial statements. O. Long-Term Obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond issuance costs are expensed as incurred except for insurance cost which are amortized over the term of the related debt. For proprietary fund types, bonds payable are reported net of the applicable bond premium or discount. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs are reported as debt service expenditures as incurred. MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 33 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) P. Net Position Total net position as of September 30, 2017, is classified into three components of net position: Net investment in capital assets This category consists of capital assets (including restricted capital assets), net of accumulated depreciation and reduced by any outstanding balances of bonds, mortgages, notes or other borrowings that are attributable to the acquisition, construction, and improvements of those assets, excluding unexpended proceeds. Restricted net position This category consists of net position restricted in their use by (1) external groups such as grantors, creditors or laws and regulations of other governments; or (2) law, through constitutional provisions or enabling legislation. Unrestricted net position This category includes all of the remaining net position that does not meet the definition of the other two categories. Q. Fund Balance As of September 30, 2017, fund balances of the governmental funds are classified as follows: Non-spendable Amounts that cannot be spent either because they are in non-spendable form or because they are legally or contractually required to be maintained intact. Restricted Amounts that can be spent only for specific purposes because of constitutional provisions or enabling legislation or because of constraints that are externally imposed by creditors, grantors, contributors, or the laws or regulations of other governments. Committed Amounts that can be used only for specific purposes determined by a formal action of the Village Council. The Village Council is the highest level of decision-making authority for the Village. Commitments may be established, modified, or rescinded only through ordinances or resolutions approved by the Village Council. Both ordinances and resoultions are equally binding. Committed fund balance also should incorporate contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements. Assigned Assigned fund balances are amounts that are constrained by the Village's intent to be used for specific purposes, but are neither restricted nor committed. Intent is established by the Village Council who has the authority to assign, modify or rescind amounts to be used for specific purposes. This is delegated to the Village Manager by the Council. This balance includes (a) all remaining amounts that are reported in governmental funds (other than the General Fund) that are not classified as nonspendable, restricted, or committed, and (b) amounts in the General Fund that are intended to be used for a specific purpose. MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 34 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Q. Fund Balance (Continued) Assigned (Continued) Specific amounts that are not restricted or committed in a special revenue or capital projects fund are assigned for the purposes in accordance with the nature of their fund type, Assignment within the General Fund conveys that the intended use of those amounts is for a specific purpose that is narrower than the general purposes of the Village itself. Unassigned This fund balance is the residual classification for the General Fund. The General Fund is the only fund that reports a positive unassigned fund balance amount. This category is also used to report negative fund balances in other governmental funds. The Village considers restricted amounts to be spent first when both restricted and unrestricted fund balance is available unless there are legal documents/contracts that prohibit this, such as grant agreements requiring dollar for dollar spending. Additionally, the Village would first use committed, then assigned, and lastly unassigned amounts of unrestricted fund balance when expenditures are made. Other Total Excise Police General Governmental Governmental General Tax Forfeiture Trust Funds Funds Fund balances: Nonspendable: Prepaids 4,506$ -$ -$ -$ -$ 4,506$ Restricted: Transportation - 854,073 - - 660,359 1,514,432 Library - - - 67,664 584,842 652,506 Recreation - - - 110,829 - 110,829 Building - - - 158,778 - 158,778 Charter School - - - 879,692 - 879,692 Public Safety - - 1,479,023 - 21,312 1,500,335 Debt service - - - - 1,127,918 1,127,918 Committed: Capital projects - - - - 581,630 581,630 Unassigned 7,961,082 - - - - 7,961,082 Total Fund Balances 7,965,588$ 854,073$ 1,479,023$ 1,216,963$ 2,976,061$ 14,491,708$ Fund Balances: Nonspendable 4,506$ -$ -$ -$ -$ 4,506$ Restricted - 854,073 1,479,023 1,216,963 2,394,431 5,944,490 Committed - - - - 581,630 581,630 Unassigned 7,961,082 - - - - 7,961,082 Total Fund Balances 7,965,588$ 854,073$ 1,479,023$ 1,216,963$ 2,976,061$ 14,491,708$ MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 35 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) R. Net Position Flow Assumption Sometimes the Village will fund outlays for a particular purpose from both restricted and unrestricted resources. In order to calculate the amounts to report as restricted-net position and unrestricted-net position in the government-wide financial statements, a flow assumption must be made about the order in which resources are considered to be applied. It is the Village’s policy to consider restricted net position to have been depleted before unrestricted-net position is applied. S. Fund Balance Flow Assumption Sometimes the Village will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It Is the Village’s policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance, if any, is applied last. T. Capital Contributions Capital contributions in proprietary fund financial statements arise from grants or outside contributions of resources restricted to capital acquisition and construction. U. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts of assets, liabilities, disclosures of contingent liabilities, revenues and expenditures/expenses reported in the financial statements and accompanying notes. These estimates include assessing the collectibility of receivables, the realization of pension obligations, OPEB and the useful lives of capital assets. Although these estimates as well as all estimates are based on management's knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results. NOTE 2 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY By its nature as a local government unit, the Village is subject to various federal, state, and local laws and contractual regulations. The Village has no material violations of finance-related legal and contractual obligations. Fund Accounting Requirements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Village, like any other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance related requirements, bond covenants, and segregation for management purposes. MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 36 NOTE 2 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (Continued) Revenue Restrictions The Village has various restrictions placed over certain revenue sources from federal, state, or local requirements. The primary revenue sources include: Revenue Source Legal Restrictions of Use Gas Tax Roads, sidewalks, streets Transportation Surtax Transportation and roads Police Forfeitures Law Enforcement Federal Emergency Management Agency Disaster mitigation For the fiscal year ended September 30, 2017, the Village complied, in all material respects, with these revenue restrictions. NOTE 3 - DEPOSITS AND INVESTMENTS Deposits In addition to insurance provided by the Federal Depository Insurance Corporation, all deposits are held in banking institutions approved by the State Treasurer of the State of Florida to hold public funds. Under Florida Statutes Chapter 280, Florida Security for Public Deposits Act, the State Treasurer requires all Florida qualified public depositories to deposit with the Treasurer or another banking institution eligible collateral. In the event of a failure of a qualified public depository, the remaining public depositories would be responsible for covering any resulting losses. Accordingly, all amounts reported as deposits are insured or collateralized with securities held by the entity or its agent in the entity's name. Investments The Village is authorized to invest in obligations of the U.S. Treasury, its agencies, instrumentalities and the Local Government Surplus Funds Trust Fund administered by the State Board of Administration (SBA). The investment policy defined in the statutes attempts to promote, through state assistance, the maximization of net interest earnings on invested surplus funds of local units of governments while limiting the risk to which the funds are exposed. The SBA administers Florida PRIME (“PRIME”), which is governed by Chapter 19-7 of the Florida Administrative Code and Chapters 215 and 219 of the Florida Statutes. These rules provide guidance and establish the policies and general operating procedures of the administration of PRIME. PRIME is not a registrant with the Securities and Exchange Commission; however, the SBA has adopted operating procedures consistent with the requirements for a 2a-7 fund, which permits money market funds to use amortized cost to maintain a constant net asset value (“NAV”) of $1 per share. The fair value of the position in the Florida PRIME is equal to the value of the pool shares. Additionally, the Office of the Auditor General of the State of Florida performs the operational audit of the activities and investment of the SBA. The SBA accounts are not subject to custodial credit risk as these investments are not evidenced by securities that exist in physical or bank entry form. MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 37 NOTE 3 - DEPOSITS AND INVESTMENTS (Continued) Investments (Continued) In accordance with GASB Statement No. 79, Certain External Investment Pools and Pool Participants, the Village’s investment in the Florida PRIME meets the definition of a qualifying investment pool that measures for financial reporting purposes all of its investments at amortized cost and should disclose the presence of any limitations or restrictions on withdrawals. As of September 30, 2017, there were no redemption fees or maximum transaction amounts, or any other requirements that serve to limit a participant’s daily access to 100 percent of their account value. Investments - Village As of September 30, 2017, the Village had the following investments: Investment Type Fair Value SBA - PRIME 303,658 Total 303,658 Interest Rate Risk Interest rate risk refers to the portfolio’s exposure to fair value losses arising from increasing interest rates. The Village does not have a written policy on interest rate risk; however, the Village manages its exposure to declines in fair values by limiting the weighted average monthly maturity of its investment portfolio to less than 180 days. The weighted average days to maturity (WAM) of the Florida PRIME as of September 30, 2017 is 51 days. Next interest rate reset dates for floating rate securities are used in the calculation of the WAM. The weighted average like (WAL) of Florida PRIME at September 30, 2017, is 80 days. Credit Risk State law limits investments in bonds, U.S. Treasuries and agency obligations, or other evidences of indebtedness to the top ratings issued by nationally recognized statistical rating organizations (NRSRO) of the United States. The PRIME is rated AAAm by Standard and Poor’s. Concentration of Credit Risk The Village’s investment policy does not stipulate any limit on the percentage that can be invested in any one issuer. GASB Statement No. 40 requires disclosure when the percent is 5% or more in any one issuer. As of September 30, 2017, the value of each position held in the Village’s portfolio comprised of less than 5% of the Village’s investment assets. Investments Pension Plans The Pension Board of Trustees has developed certain investment guidelines and has retained investment managers. The investment managers are expected to maximize the return on the investment portfolio and may make transactions consistent with that expectation within the Board's guidelines. The investment managers are compensated based on a percentage of their portfolio's market value. The Plans’ investment policy is determined by the Board who is responsible for directing the investment of the assets of the Plans to ensure that there will be adequate monies for future benefits. The policy has been identified by the Board to conduct the operations of the Plans in a manner so that the assets will provide the pension and other benefits provided under applicable laws, including Village ordinances, preserving principal while maximizing the rate of return. MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 38 NOTE 3 - DEPOSITS AND INVESTMENTS (Continued) Investments Pension Plans (Continued) Investment in all equity securities shall be limited to those listed on a major U.S stock exchange and limited to no more than 70% (at market) of the Plan’s total asset value. The equity position in any one company shall not exceed 5% of the Plan’s total asset value at the time of purchase. Investments in stocks of foreign companies shall be limited to 25% of the Plan’s market value. Investments in fixed income securities shall meet or exceed a rating of investment grade as determined by at least one major credit rating service. The market value of bonds issued by any single issuer shall not exceed 3% of the manager’s portfolio. Types of Investments Florida statutes and Plan investment policy authorize the Board to invest funds in various investments. The current target allocation of these investments at fair value is as follows: Asset Group General Employees Police Domestic Equity 50%50% International Equity 15%15% Domestic Bonds 35%35% Target Allocation Rate of Return For the fiscal year ending September 30, 2017, the annual money-weighted rate of return on pension plan investments, net pension plan investment expense, was 11.96% for the General Employee Retirement Plan and 11.22% for the Police Retirement Plan. The money weighted rate of return expresses investment performance, net of investment manager and consultant expenses adjusted for the changing amounts actually invested. Inputs to the internal rate of return calculation are determined on a monthly basis. As of September 30, 2017, the Plans had the following investments and maturities: General Employees' Retirement Plan Investment Type Fair Value Less than 1 Year 1-5 Years 6-10 Years More Than 10 Years Corporate/Foreign Bonds 1,730,567 98,056 793,314 420,799 418,398 U.S. government agencies 1,496,303 - 910,308 329,942 256,053 Mortgage backed securities 786,857 - - - 786,857 Municipal bonds 30,672 - - - 30,672 Collateralized mortgage obligations 308,979 - 218,211 16,817 73,951 Total 4,353,378 98,056 1,921,833 767,558 1,565,931 MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 39 NOTE 3 - DEPOSITS AND INVESTMENTS (Continued) Rate of Return (Continued) Police Officers' Retirement Plan Investment Type Fair Value Less than 1 Year 1-5 Years 6-10 Years More Than 10 Years Corporate/Foreign Bonds 3,269,060 130,575 1,509,730 827,884 800,872 U.S. government agencies 2,165,519 - 1,215,735 522,733 427,051 Mortgage backed securities 1,515,585 - - - 1,515,585 Municipal bonds 53,676 - - - 53,676 Collateralized mortgage obligations 687,059 - 400,941 148,809 137,310 Total 7,690,900 130,575 3,126,405 1,499,425 2,934,494 Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment the greater the sensitivity of its fair value to changes in market interest rates. As a means of limiting its exposure to interest rate risk, the Plan diversifies its investments by security type and institution, and limits holdings in any one type of investment with any one issuer with various durations of maturities. Credit Risk Credit risk is the risk that a security or a portfolio will lose some or all of its value due to a real or perceived change in the ability of the issuer to repay its debt. This risk is generally measured by the assignment of a rating by a nationally recognized statistical rating organization. The Plan’s investment policy utilizes portfolio diversification in order to control this risk. The Plan’s investment policies limit investments in fixed income securities to a rating of investment grade or higher. The following tables disclose credit ratings by investment type, at September 30, 2017: General Employees' Retirement Plan Moody's Percentage of Quality Ratings of Credit Fixed Income Risk Debt Securities Fair Value Portfolio A1 129,622$ 3% A2 123,804 3% A3 562,940 13% Aa2 28,404 1% Aa3 121,810 3% Aaa 1,718,994 39% Ba1 11,049 0% Baa1 350,117 8% Baa2 197,381 5% Baa3 187,203 4% NR 881,818 20% WR 40,236 1% 4,353,378$ 100% MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 40 NOTE 3 - DEPOSITS AND INVESTMENTS (Continued) Rate of Return (Continued) Police Officers' Retirement Plan Moody's Percentage of Quality Ratings of Credit Fixed Income Risk Debt Securities Fair Value Portfolio A1 247,941 3% A2 238,963 3% A3 992,287 13% Aa2 62,418 1% Aa3 223,447 3% Aaa 2,682,487 35% Ba1 19,085 0% Baa1 722,182 9% Baa2 379,861 5% Baa3 341,251 4% NR 1,705,537 22% WR 75,443 1% 7,690,900 100% Concentration of Credit Risk The investment policy of the Plan contains limitations on the amount that can be invested in any one issuer as well as maximum portfolio allocation percentages. As of September 30, 2017, no investment by any one issuer was above the 5% threshold required for disclosure. Custodial of Credit Risk This is the risk that in the event of a failure of the counterparty, the Plan will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. Consistent with the Plan’s investment policy, the investments are held by Plan’s custodial bank and registered in the Plan’s name. Risks and Uncertainties The Plan has investments in a combination of stocks, bonds, government securities and other investment securities. Investment securities are exposed to various risks, such as interest rate, market and credit risk. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risks in the near term would materially affect balances and the amounts reported in the statement of plan net position and the statement of changes in plan net position. The Plan, through its investment advisors, monitors the Plan's investments and the risks associated therewith on a regular basis, which the Plan believes minimizes these risks. The Village does not participate in any securities lending transactions nor has it used, held or written derivative financial instruments. MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 41 NOTE 4 - FAIR VALUE MEASUREMENT Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Village categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The following is a description of the valuation methodologies used for the Plan’s investments measured at fair value: Fixed income securities are valued using pricing inputs that reflect the assumptions market participants would use to price an asset or liability and are developed based on market data obtained from sources independent of the reporting entity. This includes government securities, corporate bonds, and mortgage backed securities. Equity securities traded on national or international exchanges are valued at the last reported sales price or current exchange rates. This includes equity mutual funds, common stock, and exchange- traded fund. The Plans have the following recurring fair value measurements as of September 30, 2017: General Employees' Retirement Plan Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs 9/30/2017 (Level 1)(Level 2)(Level 3) Investments by fair value level: Debt securities: U.S. government obligations 1,496,303$ $1,496,303 -$ -$ Mortgage backed securities 786,857 - $786,857 - Municipal bonds 30,672 - 30,672 - Collateralized mortgage obligations 308,979 - $308,979 - Corporate/foreign bonds 1,730,567 - 1,730,567 - Total debt securities 4,353,378 1,496,303 2,857,075 - Equity securities: Common stock $2,170,256 $2,170,256 - - Mutual fund equities 7,025,876 7,025,876 - - Total equity securities 9,196,132 9,196,132 - - Total investments at fair value 13,549,510$ 10,692,435$ 2,857,075$ -$ Fair Value Measurements Using MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 42 NOTE 4 - FAIR VALUE MEASUREMENT (Continued) Police Officers' Retirement Plan Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs 9/30/2017 (Level 1)(Level 2)(Level 3) Investments by fair value level: Debt securities: U.S. government agencies 2,165,519$ 2,165,519$ -$ -$ Mortgage backed securities 1,515,585 - 1,515,585 - Municipal bonds 53,676 - 53,676 - Collateralized mortgage obligation 687,058 - 687,058 - Corporate bonds 3,269,060 - 3,269,060 - Total debt securities 7,690,899 2,165,519 5,525,380 - Equity securities: Common stock 3,733,197 3,733,197 - - Mutual fund equities 11,897,347 11,897,347 - - Total equity securities 15,630,544 15,630,544 - - Total investments at fair value 23,321,443$ 17,796,063$ 5,525,380$ -$ Fair Value Measurements Using NOTE 5 - RECEIVABLES Receivables as of September 30, 2017 for the Village’s individual major funds and non-major funds in the aggregate consist of the following: Water & Non-major Internal Excise Tax Police Sanitation Stormwater Sewer Governmental Enterprise General Fund Forfeiture Fund Fund Fund Funds Funds Total Receivables: Accounts -$ -$ -$ 271,922 19,401$ -$ -$ 165,547$ 456,870$ Taxes 190,368 376,665 - - - - 169,816 - 736,849 Special Assessme - - - - - 4,039,007 - - 4,039,007 Grants and other 50,819 - 11,632 - - - 372 - 62,823 Total receivables 241,187$ 376,665$ 11,632$ 271,922$ 19,401$ 4,039,007$ 170,188$ 165,547$ 5,295,549$ MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 43 NOTE 6 - CAPITAL ASSETS Capital assets activity for the fiscal year ended September 30, 2017 was as follows: Governmental activities Beginning Increases Decreases Ending Capital assets not being depreciated: Land 2,358,437$ -$ -$ 2,358,437$ Construction in progress 409,304 53,489 (14,067) 448,726 Total capital assets not being depreciated 2,767,741 53,489 (14,067) 2,807,163 Capital assets being depreciated: Building and improvements 13,870,788 496,051 - 14,366,839 Land improvements 4,816,280 - - 4,816,280 Infrastructure 18,194,724 344,323 - 18,539,047 Machinery and equipment 6,150,272 454,069 (835,421) 5,768,920 Total capital assets being depreciated 43,032,064 1,294,443 (835,421) 43,491,086 Less accumulated depreciation for: Building and improvements (4,088,006) (285,740) - (4,373,746) Land improvements (3,407,905) (209,867) - (3,617,772) Infrastructure (12,327,235) (471,600) - (12,798,835) Machinery and equipment (4,382,245) (532,426) 835,421 (4,079,250) Total accumulated depreciation (24,205,391) (1,499,633) 835,421 (24,869,603) Total capital assets being depreciated, net 18,826,673 (205,190) - 18,621,483 Governmental activities capital assets, net 21,594,414$ $ (151,701) $ (14,067)21,428,646$ MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 44 NOTE 6 CAPITAL ASSETS (Continued) Business-type activities Beginning Increases Decreases Ending Capital assets not being depreciated: Construction in progress 3,691,488$ 559,657$ -$ 4,251,145$ Total capital assets not being depreciated 3,691,488 559,657 - 4,251,145 Capital assets being depreciated: Machinery and equipment 2,315,402 83,008 (60,860) 2,337,550 Drainage improvements 2,689,710 - - 2,689,710 Total capital assets being depreciated 5,005,112 83,008 (60,860) 5,027,260 Less accumulated depreciation for: Machinery and equipment (1,240,299) (175,862) 60,860 (1,355,301) Drainage improvements (801,439) (78,800) - (880,239) Total accumulated depreciation (2,041,738) (254,662) 60,860 (2,235,540) Total capital assets being depreciated, net 2,963,374 (171,654) - 2,791,720 Business-type activities capital assets, net 6,654,862$ 388,003$ -$ 7,042,865$ Depreciation expense was charged to functions/programs of the Village as follows: Governmental activities General Government 128,143$ Public Safety 212,405 Public Works 750,047 Culture and Recreation 409,038 Total depreciation expense – governmental activities 1,499,633$ Business- type activities Sanitation 175,862$ Stormwater 78,800 Total depreciation expense –business-type activities 254,662$ NOTE 7 - LONG-TERM DEBT Series 2013 Promissory Note In September 2013, the Village issued $1,645,000 Miami Shores Village, Florida, Promissory Note, Series 2013 to refinance the amount currently outstanding of the Village’s $3,500,000 Promissory Note, Series 2006. The note bears interest at a rate of 2.51% per annum. The Village pledged 25% of the local option fuel tax revenues and sanitation fund revenues to secure the note. The note matures in May 2018 and requires quarterly principal and interest payments throughout the life of the note. MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 45 NOTE 7 - LONG-TERM DEBT (Continued) Series 2013 Promissory Note (Continued) Debt service requirements to maturity for the fiscal year ending September 30, 2017 are summarized as follows: September 30,Principal Interest Total 2018 222,159$ 2,389$ 224,548$ 222,159$ 2,389$ 224,548$ Miami Shores Village, Florida Refunding General Obligation Bond, Series 2013 In February 2013, the Village issued the Miami Shores Village, Florida Refunding General Obligation Bond, Series 2013, in order to refund the cost of the Florida Municipal Loan Council Revenue Bonds, Series 1999. Principal is due annually (through 2029) at various amounts ranging from $128,000 in 2017 to a final payment of $169,000 in 2029. The bonds bear interest at variable rates ranging from 2.49 to 3.03%, payable semi-annually. The bonds are secured by ad-valorem revenues. Debt service requirements to maturity for the fiscal year ending September 30, 2017 are summarized as follows: September 30,Principal Interest Total 2018 131,000$ 43,456$ 174,456$ 2019 133,000 40,123 173,123 2020 136,000 36,834 172,834 2021 138,000 33,269 171,269 2022 145,000 29,697 174,697 2023-2027 770,000 91,682 861,682 2028-2029 334,000 8,494 342,494 1,787,000$ 283,555$ 2,070,555$ MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 46 NOTE 7 - LONG-TERM DEBT (Continued) Miami Shores Village, Florida Refunding General Obligation Bond, Series 2015 In June 2015, the Village issued the Miami Shores Village, Florida Refunding General Obligation Bond Series 2015, in order to refund the cost of the Miami Shores Village, Florida General Obligation Bonds, Series 2004. Principal is due annually (through 2033) at various amounts ranging from 177,300 in 2017 to a final payment of $263,700 in 2033. The bonds bear interest at a rate of 2.54% per annum. The bonds are secured by ad-valorem revenues. The refunding resulted in an economic gain of approximately $764,000 and a cash flow savings of approximately $947,000. Debt service requirements to maturity for the fiscal year ending September 30, 2017 are summarized as follows: September 30,Principal Interest Total 2018 180,800$ 89,016$ 269,816$ 2019 184,100 84,424 268,524 2020 191,400 79,748 271,148 2021 193,400 74,887 268,287 2022 200,300 69,974 270,274 2023-2027 1,067,800 271,612 1,339,412 2028-2032 1,223,100 128,156 1,351,256 2033 263,700 6,698 270,398 3,504,600$ 804,515$ 4,309,115$ Florida Local Government Finance Commission During fiscal year 2017, the Village entered into a pooled commercial paper loan agreement with the Florida Local Government Finance Commission (FLGFC) for total available funds of $5,000,000 to finance various capital improvements within the Village, including the water main and sewer system project construction in the downtown area. The loan is collateralized by the Village’s non-ad valorem revenues. The variable interest rate is paid monthly on the outstanding note balance. Other loan costs include various administrative fees and draw down costs of $2,000 for each $1,000,000 of draw down. During the year, there were two draw downs for $2,500,000 each. The outstanding balance under this agreement for the year ended September 30, 2017 is $5,000,000 which is due on September 1, 2020. MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 47 NOTE 7 LONG-TERM DEBT (Continued) Long-term debt activity for the fiscal year ended September 30, 2017 was as follows: Due Beginning Ending within Balance Increases Decreases Balance one year Governmental activities Bonds and notes payable: Promissory Note, Series 2013 590,938$ -$ (368,779)$ 222,159$ 222,159$ Refunding General Obligation Bond, Series 2013 1,915,000 - (128,000) 1,787,000 131,000 Refunding General Obligation Bond, Series 2015 3,681,900 - (177,300) 3,504,600 180,800 Total bonds and notes payable 6,187,838 - (674,079) 5,513,759 533,959 Other liabilities: OPEB liability 731,251 88,385 -819,636 - Claims payable 340,000 - - 340,000 - Compensated absences 688,081 668,584 (553,378) 803,287 5,495 Net pension liability 9,268,260 - (164,987) 9,103,273 - Total other liabilities 11,027,592 756,969 (718,365) 11,066,196 5,495 Governmental activity long-term liabilities 17,215,430$ 756,969$ (1,392,444)$ 16,579,955$ 539,454$ Business-type activities FLGFC Notes Payable 4,840,000$ -$ (160,000)$ 4,680,000$ 160,000$ Other liabilities: OPEB liability 129,839 15,694 - 145,533 - Compensated absences 109,796 67,762 (42,921) 134,637 33,659 Net pension liability 498,750 31,401 - 530,151 - Business-type activities long-term liabilities 5,578,385$ 114,857$ (202,921)$ 5,490,321$ 193,659$ 2017 MSV Audit Debt Rollforward Fiscal Year Ending 9/30/17 For government activities, compensated absences and other post-employment (OPEB) benefits are generally liquidated by the general fund. Claims and adjustments are liquidated by the Risk Management internal service fund. MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 48 NOTE 8 - INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS Interfund transfer activity for the year ended September 30, 2017 was as follows: Transfers In Transfers Out General Fund $ 2,593,058 $ 1,889,566 Excise Tax - 2,193,058 Sanitation Fund - 350,000 Stormwater Fund - 50,000 Non-Major Governmental 1,894,550 93,700 Internal Service Funds - - Total $ 4,487,608 $ 4,576,324 Transfers are used to (a) move revenues from the fund that statute or budget requires to collect them to the fund the statute or budget requires to expend them and (b) move unrestricted revenues collected in the General Fund to finance various programs accounted for in other funds in accordance with budgetary authorization. • The Excise Tax Fund transferred $2,193,058 to the General Fund for operating purposes after all debt service requirements have been made. • The General Fund transferred $1,800,850 to the Capital Improvement Fund as funding for various ongoing capital projects of the Village, including the purchase of the Archdiocese property for future use as a Village facility. NOTE 9 - EMPLOYEE RETIREMENT PLANS - PLANS’ REPORTING The Village maintains two separate defined benefit single-employer pension plans, the General Employees' Retirement Plan and the Police Officers' Retirement Plan which cover substantially all of its full-time employees. The Village accounts for these pension plans as pension trust funds. Basis of Accounting The Village's pension plans are accounted for using the accrual basis of accounting. Plan member contributions are recognized in the period in which the contributions are due. Employer contributions to each Plan are recognized when due and the employer has made a formal commitment to provide the contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of each Plan. Method Used to Value Investments Investments are reported at fair value. Securities traded on national or international exchanges are valued at the last reported sales price or exchange rate. Net appreciation (depreciation) in fair value of investments includes the difference between cost and fair value of investments held as well as the net realized gains or losses from securities sold. Interest and dividend income is recognized on the accrual basis when earned. Purchases and sales of investments are recorded on a trade date basis. MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 49 NOTE 9 - EMPLOYEE RETIREMENT PLANS - PLANS’ REPORTING (Continued) Membership The membership in the Plans as of October 1, 2015 (the date of the latest actuarial valuations) consisted of: General Inactive employees:Employees Police Retirees and beneficiaries currently receiving benefits and terminated employees entitled to benefits but not yet receiving them 57 28 Active participants:65 25 Total members 122 53 General Employees’ Retirement Plan Plan Description The General Employees' Retirement System (the Plan) is a single-employer defined benefit pension plan that covers all Village employees, except for police, and certain appointed employees. The Plan was established on January 1, 1957 by the Village Council. On December 31, 1999, the Plan was split between the general employees and the police officers. The Plan is governed by certain provisions of Chapter 112, Florida Statutes. The Board of Trustees for the Plan administers the Plan. Plan amendments must be authorized by the Village Council. The Plan provides retirement and death benefits to Plan members and beneficiaries. The Plan does not issue a separate financial report. Deferred Retirement Option Plan Effective December 5, 2006, current employees may elect to participate in the deferred retirement option plan (DROP) the first day of the month coincident with or next following the date of normal retirement. Election into the DROP is voluntary. The employee may elect to participate in the plan for a maximum of 60 months. Once participation in the DROP commences, such participation constitutes an irrevocable election. A member's continuous service and accrued benefit under the Plan shall be determined and frozen on the effective date of the employee's election to participate in the DROP. Additional continuous service or benefits under the Plan shall not be accrued. No payments are made directly to the employee from the Plan while the member participates in the drop plan. During the period of the member's participation in the DROP, the employee's normal retirement benefit shall be credited to the employee's DROP account. No further contributions to the General Employees' Pension Plan will be required by the Village nor the employee on behalf of any employee who has elected participation in the DROP. The member's account is invested as part of the corpus of the system by the Board and is credited with interest equal to the overall net rate of return on the fund assets during the reporting period during which the member participates in the DROP. MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 50 NOTE 9 - EMPLOYEE RETIREMENT PLANS - PLANS’ REPORTING (Continued) General Employees’ Retirement Plan (Continued) Deferred Retirement Option Plan (Continued) Upon termination of employment with the Village or 60 months of DROP participation, the balance of the DROP account will become payable in addition to the monthly normal retirement benefit (which is based on credited service and average monthly salary on the DROP election date). The DROP account is distributed to the member in a single lump sum payment or a direct rollover to another qualified retirement plan. If a member dies before the member's DROP account balance has been paid in full, distribution of the DROP account balance will be made according to the member's designation. DROP payments to a beneficiary will be in addition to any retirement benefits payable by the Plan. Under any option and in no event may the total benefit payments to the member or the beneficiary be less than the member's own accumulated contributions. As of September 30, 2017, there were 7 members in the DROP and their fair value of DROP investment was $635,558 which is included in the Plan’s net position. At the end of September 30, 2017, the Plan had no DROP Liability. Funding Requirement Plan members are required to contribute 6% of their annual covered salary. The Village contributes at actuarially determined rates that are designed to accumulate sufficient assets to pay benefits when due. Effective May 30, 2012, the Division of Retirement mandated that local governments confer with the Plan’s actuary to select and maintain contribution method (percentage of payroll or fixed dollar contributions) that best fits the funding requirements of the Plan. The Plan determined to use the “percentage of payroll contribution” method for the fiscal year ended September 30, 2017. The actual contribution from the Village for active members were actuarially determined using the actuarial valuation as of October 1, 2015 for the year ended September 30, 2017. The contributions consisted of the following at September 30, 2017: Actual Contribution Percentage of Covered Payroll Village $ 443,102 13.78% Members $ 186,555 N/A Net Pension Liability Total pension liability 15,939,690 Plan fiduciary net position 13,787,644 Net pension liability 2,152,046 Plan fiduciary net position as a percentage of total pension liability 86.50% MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 51 NOTE 9 - EMPLOYEE RETIREMENT PLANS - PLANS’ REPORTING (Continued) General Employees’ Retirement Plan (Continued) Significant Actuarial Assumptions The total pension liability was determined by an actuarial valuation as of October 1, 2017 and rolled forward to the measurement date of September 30, 2017 using the following actuarial assumptions: Interest rates: Single discount rate 7.50% Long-term expected rate of return 7.50% Mortality table RP-2000 Combined Healthy Participant Mortality Table for males and females with mortality improvement projected to all future years after 2000 using Scale BB. Long-Term Expected Rate of Return The long-term expected rate of return on pension plan investment was determined using the long-term nominal building block data less the long-term inflation assumption of 2.5%. The building block long- term real return projections were develop considering the long-term historic capital market returns, 10- 15 year expected capital market return assumptions, as well as, historical, current, and expected inflation data. Best estimates of arithmetic real return for each asset class included in the pension plan’s target allocation as of September 30, 2017 are summarized in the following table: Long-Term Expected Asset Group Real Rate of Return Domestic Equity 7.5% International Equity 8.5% Fixed Income 2.5% Discount Rate A single discount rate of 7.50% was used to measure the total pension liability. This single discount rate was based on the expected rate of return on pension plan investments of 7.50%. The projection of cash flows used to determine this single discount rate assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between the total actuarially determined contribution rates and the member rate. Based on these assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments (7.50%) was applied to all periods of projected benefit payments to determine the total pension liability. Regarding the sensitivity of the net pension liability to changes in the single discount rate, the following presents the plan’s net pension liability, calculated using a single discount rate of 7.50%, as well as what the plan’s net pension liability would be if it were calculated using a single discount rate that is 1- percentage-point lower or 1-percentage-point higher: MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 52 NOTE 9 - EMPLOYEE RETIREMENT PLANS PLANS’ REPORTING (Continued) General Employees’ Retirement Plan (Continued) Sensitivity of the Net Pension Liability to the Single Discount Rate Assumption 1% Decrease Rate Assumption 1% Increase 6.50%7.50%8.50% 3,967,802$ $ 2,152,046 632,986$ Current Single Discount Financial Information The Plan does not issue separate stand-alone financial statements, therefore, included below is the Statement of Plan Net Position and the Statement of Changes in Plan Net Position as of and for the fiscal year ended September 30, 2017. ASSETS Cash and cash equivalents 215,948$ Investments, at fair value 13,549,510 Accrued interest receivable 23,700 Total assets 13,789,158 LIABILITIES AND NET POSITION Due to Police Pension 1,514 Total liabilities 1,514 Net position restricted for pensions 13,787,644$ STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30, 2017 ADDITIONS Contributions 629,657$ Net investment loss 1,531,913 Total additions 2,161,570 DEDUCTIONS Pension benefits 630,350 Administrative expenses 42,936 Total deductions 673,286 Increase 1,488,284 Net position restricted for pensions: Beginning of year 12,299,360 End of year 13,787,644$ STATEMENT OF CHANGES IN PLAN NET POSITION FISCAL YEAR ENDED SEPTEMBER 30, 2017 MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 53 NOTE 9 - EMPLOYEE RETIREMENT PLANS - PLANS’ REPORTING (Continued) General Employees’ Retirement Plan (Continued) Tax Status The Internal Revenue Service has determined and informed the Plan by a letter on April 20, 2016, that the Plan is designed in accordance with applicable sections of the Internal Revenue Code, conditioned upon the adoption of certain proposed modifications. Further, the Village and legal counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Code. Police Officers' Retirement Plan Plan Description The Police Officers' Retirement System (the Plan) is a single-employer defined benefit pension plan that covers substantially all of the Village's certified police officers. The Plan was established as of the effective date of January 1, 1957 by the Village Council. It was amended on December 31, 1999, to split the Plan between General Employees and Police Officers. The Plan is also governed by certain provisions of Chapter 185, Florida Statutes. The Board of Trustees for the Plan administers the Plan. Plan amendments must be authorized by the Village Council. The Plan provides retirement, disability, and death benefits to Plan members and beneficiaries. The Plan does not issue a separate financial report. Deferred Retirement Option Plan Effective May 5, 1998, subsequent to the approval from the State of Florida, Division of Retirement, current employees with at least 25 but not more than 30 years of continuous service as a member of the plan may elect to participate in the deferred retirement option plan (DROP) for sworn police personnel. The employee may elect to participate in the plan for a maximum of 60 months before the employee attains 30 years of continuous service. A member's continuous service and accrued benefit under the plan shall be determined and frozen on the effective date of the employee's election to participate in the DROP. Additional continuous service or benefits under the plan shall not be accrued, except for cost-of-living adjustments provided to retirees under the plan. No payments are made directly to the employee from the pension plan while the member participates in the drop plan. During the period of the member's participation in the DROP, the employee's normal retirement benefit shall be credited to the employee's DROP account. No further contributions to the police officers' retirement system will be required by the Village nor the employee on behalf of any employee who has elected participation in the DROP. The member's account is invested as part of the corpus of the system by the Board and is credited with interest equal to the overall net rate of return on the fund assets during the reporting period during which the member participates in the DROP. MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 54 NOTE 9 - EMPLOYEE RETIREMENT PLANS - PLANS’ REPORTING (Continued) Police Officers' Retirement Plan (Continued) Deferred Retirement Option Plan (Continued) At the conclusion of the member's participation in the DROP, the member will receive a normal benefit calculated in accordance with the plan using an average monthly earnings and continuous service as of the effective date of the member's election to participate in the DROP. The DROP account is distributed to the member in a cash lump sum, unless the member alternatively elects to receive payments in approximately equal quarterly or annual installments over a period designated by the member. If a member dies before distribution of the member's DROP plan commences, the account balance is paid to the member's designated beneficiary in an immediate cash lump sum. Provisions of the plan do not allow for the distribution of a member's DROP account to begin later than April 1 following the later of the calendar year in which the member separates from service with the Village or attains age 70 1/4 years. As of September 30, 2017, there were 4 members in the DROP and their fair value of DROP investment was $1,050,437 which is included in the Plan’s net position. At the end of September 30, 2017, the Plan had no DROP liability. Funding Requirement Plan members are required to contribute 9% of their annual covered salary. The Village contributes at actuarially determined rates that are designed to accumulate sufficient assets to pay benefits when due. Effective May 30, 2012, the Division of Retirement mandated that local governments confer with the Plan’s actuary to select and maintain contribution method (percentage of payroll or fixed dollar contributions) that best fits the funding requirements of the Plan. The Plan determined to use the “percentage of payroll contribution” method for the fiscal year ended September 30, 2017. Pursuant to Chapter 185, Florida Statutes, a portion of all insurance premium tax monies received in excess of the threshold of $60,386 are to be utlized to provide future minimum extra benefits and may not be used to reduce or offset the contribution requirements of the employer. The actual contribution from the Village for active members were actuarially determined using the actuarial valuation as of October 1, 2015 for the year ended September 30, 2017. The contributions consisted of the following at September 30, 2017: Actual Contribution Percentage of Covered Payroll Village 1,105,854 47.25% State of Florida 100,575 4.29% Total contributions 1,206,429 57.24% Members 210,630 N/A Net Pension Liability Total pension liability 29,716,580$ Plan fiduciary net position 24,081,158 Net pension liability 5,635,422 Plan fiduciary net position as a percentage of total pension liability 81.04% MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 55 NOTE 9 - EMPLOYEE RETIREMENT PLANS - PLANS’ REPORTING (Continued) Police Officers' Retirement Plan (Continued) Significant Actuarial Assumptions The total pension liability was determined by an actuarial valuation as of October 1, 2015 and rolled forward to the measurement date of September 30, 2017, using the following actuarial assumptions: Interest rates: Single discount rate 7.50% Long term expected rate of return 7.50% Mortality table RP-2000 Combined Healthy Participant Mortality Table for males and females with mortality imporvement projected to all future years after 2000 using Scale BB. Long-Term Expected Rate of Return The long-term expected rate of return on pension plan investment was determined using the long-term nominal building block data less the long-term inflation assumption of 2.5%. The building block long- term real return projections were develop considering the long-term historic capital market returns, 10- 15 year expected capital market return assumptions, as well as, historical, current, and expected inflation data. Best estimates of arithmetic real return for each asset class included in the pension plan’s target allocation as of September 30, 2017 are summarized in the following table: Long-Term Expected Asset Group Real Rate of Return Domestic Equity 7.5% International Equity 8.5% Fixed Income 2.5% Discount Rate A single discount rate of 7.50% was used to measure the total pension liability. This single discount rate was based on the expected rate of return on pension plan investments of 7.50%. The projection of cash flows used to determine this single discount rate assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between the total actuarially determined contribution rates and the member rate. Based on these assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments (7.50%) was applied to all periods of projected benefit payments to determine the total pension liability. Regarding the sensitivity of the net pension liability to changes in the single discount rate, the following presents the plan’s net pension liability, calculated using a single discount rate of 7.50%, as well as what the plan’s net pension liability would be if it were calculated using a single discount rate that is 1- percentage-point lower or 1-percentage-point higher: MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 56 NOTE 9 - EMPLOYEE RETIREMENT PLANS - PLANS’ REPORTING (Continued) Police Officers' Retirement Plan (Continued) Sensitivity of the Net Pension Liability to the Single Discount Rate Assumption 1% Decrease Rate Assumption 1% Increase 6.50%7.50%8.50% 8,043,217$ $ 4,246,920 1,129,177$ Current Single Discount Financial Information The Plan does not issue separate stand-alone financial statements, therefore, included below is the Statement of Plan Net Position and the Statement of Changes in Plan Net Position as of and for the fiscal year ended September 30, 2017. ASSETS Cash and cash equivalents 715,624$ Investments, at fair value 23,321,443 Receivables 44,091 Total assets 24,081,158 LIABILITIES AND NET POSITION Accounts payable and accrued expenses - Net position restricted for pensions 24,081,158$ STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30, 2017 ADDITIONS Contributions 1,417,059$ Net investment income 2,495,997 Total additions 3,913,056 DEDUCTIONS Pension benefits 950,094 Administrative expenses 62,709 Total deductions 1,012,803 Increase 2,900,253 Net position restricted for pensions: Beginning of year 21,180,905 End of year 24,081,158$ STATEMENT OF CHANGES IN PLAN NET POSITION FISCAL YEAR ENDED SEPTEMBER 30, 2017 Tax Status The Internal Revenue Service has determined and informed the Plan by a letter on April 20, 2016, that the Plan is designed in accordance with applicable sections of the Internal Revenue Code, conditioned upon the adoption of certain proposed modifications. Further, the Village and legal counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Code. MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 57 NOTE 10 - EMPLOYEE RETIREMENT PLANS - VILLAGE’S REPORTING (Continued) Police Officers' Retirement Plan (Continued) As described in Note 9, the Village maintains two separate defined benefit single-employer pension plans, the General Employees' Retirement Plan and the Police Officers' Retirement Plan which cover substantially all of its full-time employees. The following details the disclosures as required by GASB Statement No. 68. Basis of Accounting The Village's pension plans are accounted for using the accrual basis of accounting. Plan member contributions are recognized in the period in which the contributions are due. Employer contributions to each Plan are recognized when due and the employer has made a formal commitment to provide the contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of each Plan. Method Used to Value Investments Investments are reported at fair value. Securities traded on national or international exchanges are valued at the last reported sales price or exchange rate. Net appreciation (depreciation) in fair value of investments includes the difference between cost and fair value of investments held as well as the net realized gains or losses from securities sold. Interest and dividend income is recognized on the accrual basis when earned. Purchases and sales of investments are recorded on a trade date basis. Membership The membership as of September 30, 2016 in the General Employees' Retirement Plan (as of October 1, 2014) and the Police Officers' Retirement Plan (as of October 1, 2015) consisted of: General Employees Police Inactive employees: Retirees and beneficiaries currently receiving benefits and 49 26 Retirees entitled to benefits but not yet receiving them 8 2 Active participants:70 25 Total members 127 53 General Employees’ Retirement Plan Plan Description The General Employees' Retirement System (the Plan) is a single-employer defined benefit pension plan that covers all Village employees, except for police, and certain appointed employees. The Plan was established on January 1, 1957 by the Village Council. On December 31, 1999, the Plan was split between the general employees and the police officers. The Plan is governed by certain provisions of Chapter 112, Florida Statutes. The Board of Trustees for the Plan administers the Plan. Plan amendments must be authorized by the Village Council. The Plan provides retirement and death benefits to Plan members and beneficiaries. The Plan does not issue a separate financial report. MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 58 NOTE 10 - EMPLOYEE RETIREMENT PLANS VILLAGE’S REPORTING (Continued) General Employees’ Retirement Plan (Continued) Deferred Retirement Option Plan Effective December 5, 2006, current employees may elect to participate in the deferred retirement option plan (DROP) the first day of the month coincident with or next following the date of normal retirement. Election into the DROP is voluntary. The employee may elect to participate in the plan for a maximum of 60 months. Once participation in the DROP commences, such participation constitutes an irrevocable election. A member's continuous service and accrued benefit under the Plan shall be determined and frozen on the effective date of the employee's election to participate in the DROP. Additional continuous service or benefits under the Plan shall not be accrued. No payments are made directly to the employee from the Plan while the member participates in the drop plan. During the period of the member's participation in the DROP, the employee's normal retirement benefit shall be credited to the employee's DROP account. No further contributions to the General Employees' Pension Plan will be required by the Village nor the employee on behalf of any employee who has elected participation in the DROP. The member's account is invested as part of the corpus of the system by the Board and is credited with interest equal to the overall net rate of return on the fund assets during the reporting period during which the member participates in the DROP. Upon termination of employment with the Village or 60 months of DROP participation, the balance of the DROP account will become payable in addition to the monthly normal retirement benefit (which is based on credited service and average monthly salary on the DROP election date). The DROP account is distributed to the member in a single lump sum payment or a direct rollover to another qualified retirement plan. If a member dies before the member's DROP account balance has been paid in full, distribution of the DROP account balance will be made according to the member's designation. DROP payments to a beneficiary will be in addition to any retirement benefits payable by the Plan. Under any option and in no event may the total benefit payments to the member or the beneficiary be less than the member's own accumulated contributions. As of September 30, 2017, there were 7 members in the DROP and their fair value of DROP investment was $635,558 which is included in the Plan’s net position. At the end of September 30, 2017, the Village had no DROP liability. Funding Requirement Plan members are required to contribute 6% of their annual covered salary. The Village contributes at actuarially determined rates that are designed to accumulate sufficient assets to pay benefits when due. Effective May 30, 2012, the Division of Retirement mandated that local governments confer with the Plan’s actuary to select and maintain contribution method (percentage of payroll or fixed dollar contributions) that best fits the funding requirements of the Plan. The Plan determined to use the “percentage of payroll contribution” method for the fiscal year ended September 30, 2016. MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 59 NOTE 10 - EMPLOYEE RETIREMENT PLANS VILLAGE’S REPORTING (Continued) General Employees’ Retirement Plan (Continued) The actual contribution from the Village for active members were actuarially determined using the actuarial valuation as of October 1, 2014 for the year ended September 30, 2016. The contributions consisted of the following at September 30, 2016: Actual Contribution Percentage of Covered Payroll Village $ 371,453 11.81% Members 188,786 N/A Net Pension Liability: The Village's net pension liability was measured as of September 30, 2016. The total pension liability used to calculate the net pension liability was determined as of that date. Significant Actuarial Assumptions The total pension liability was determined by an actuarial valuation as of September 30, 2015, using the following actuarial assumptions: Interest rates: Single discount rate 7.50% Long-term expected rate of return 7.50% Long-term municipal bond rate*3.06% Last year ending September 30 in 2116 the 2017 to 2116 projection period for which projected benefit payments are fully funded Mortality table RP-2000 Combined Healthy Participant Mortality Table for males and females with mortality improvement projected to all future years after 2000 using Scale BB. * Source: “20-Bond GO Index” is the Bond Buyer Index, general obligation, 20 years to maturity, mixed quality. In describing this index, the Bond Buyer notes that the bonds’ average credit quality is roughly equivalent to Moody's Investors Service’s Aa2 rating and Standard & Poor’s Corp.’s AA. The rate shown is as of September 29, 2016, the most recent date available on or before the measurement date. MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 60 NOTE 10 - EMPLOYEE RETIREMENT PLANS - VILLAGE’S REPORTING (Continued) General Employees’ Retirement Plan (Continued) Long-Term Expected Rate of Return The long-term expected rate of return on pension plan investment was determined using the long-term nominal building block data less the long-term inflation assumption of 2.5%. The building block long- term real return projections were develop considering the long-term historic capital market returns, 10- 15 year expected capital market return assumptions, as well as, historical, current, and expected inflation data. Best estimates of arithmetic real return for each asset class included in the pension plan’s target allocation as of September 30, 2015 are summarized in the following table: Long-Term Expected Asset Group Real Rate of Return Domestic Equity 7.5% International Equity 8.5% Fixed Income 2.5% Discount Rate A single discount rate of 7.50% was used to measure the total pension liability. This single discount rate was based on the expected rate of return on pension plan investments of 7.50%. The projection of cash flows used to determine this single discount rate assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between the total actuarially determined contribution rates and the member rate. Based on these assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments (7.50%) was applied to all periods of projected benefit payments to determine the total pension liability. MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 61 NOTE 10 - EMPLOYEE RETIREMENT PLANS - VILLAGE’S REPORTING (Continued) General Employees’ Retirement Plan (Continued) Changes in Net Pension Liability Total Pension Liability (a) Plan Fiduciary Net Position (b) Net Pension Liability (a)-(b) Reporting period ending at September 30, 2016 14,018,082$ 11,374,066$ 2,644,016$ Service Cost 315,449 - 315,449 Interest 1,079,053 - 1,079,053 Assumptions changes 317,996 - 317,996 Contributions - Employer - 371,453 (371,453) Contributions - Member - 188,786 (188,786) Benefit Payments (639,713) - (639,713) Net Investment Income - 1,074,730 (1,074,730) Benefit Payments - (639,713) 639,713 Administrative Expense - (69,962) 69,962 Reporting period ending at September 30, 2017 15,090,867$ 12,299,360$ 2,791,507$ Plan Fiduciary Net Position as a Percentage of Total Pension Liability 81.50% Covered Payroll 3,146,433$ Net Pension Liability as a Percentage of Covered Payroll 88.72% Increase (Decrease) Sensitivity of the Net Pension Liability to the Single Discount Rate Assumption The following presents the plan’s net pension liability, calculated using a single discount rate of 7.50%, as well as what the plan’s net pension liability would be if it were calculated using a single discount rate that is 1-percentage-point lower or 1-percentage-point higher: 1% Decrease Rate Assumption 1% Increase 6.50%7.50%8.50% 4,566,456$ $ 2,791,507 1,307,937$ Current Single Discount MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 62 NOTE 10 - EMPLOYEE RETIREMENT PLANS - VILLAGE’S REPORTING (Continued) General Employees’ Retirement Plan (Continued) Financial Information The Plan does not issue separate stand-alone financial statements, therefore, included below is the Statement of Plan Net Position and the Statement of Changes in Plan Net Position as of and for the fiscal year ended September 30, 2016. ASSETS Cash and cash equivalents 307,345$ Investments, at fair value 12,060,878 Accrued interest receivable 19,404 Total assets 12,387,627 LIABILITIES Accounts payable and accrued expenses 19,357 DROP Payable 68,910 88,267 NET POSITION Net position restricted for pensions 12,299,360$ ADDITIONS Contributions 629,657$ Net investment loss 1,531,913 Total additions 2,161,570 DEDUCTIONS Pension benefits 630,350 Administrative expenses 42,936 Total deductions 673,286 Increase 1,488,284 Net position restricted for pensions: Beginning of year 12,299,360 End of year 13,787,644$ STATEMENT OF CHANGES IN PLAN NET POSITION FISCAL YEAR ENDED SEPTEMBER 30, 2017 STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30, 2016 MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 63 NOTE 10 - EMPLOYEE RETIREMENT PLANS - VILLAGE’S REPORTING (Continued) General Employees’ Retirement Plan (Continued) Pension Expense and Deferred Outflows/(Inflows) of Resources For the year ended September 30, 2017, the Village will recognize pension expense of $723,550. At September 30, 2017, the Village reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows of Resources Deferred Inflows of Resources Difference between expected and actual experience 56,004$ 2,478$ Changes in assumptions 236,459 - Net difference between projected and actual earnings on pension plan investments 499,811 - Employer contributions subsequent to the measurement date 443,102 - Total 1,235,376$ 2,478$ Pension Expense and Deferred Outflows/(Inflows) of Resources (Continued) The Village contributions subsequent to the measurement date of $443,102 are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the fiscal year ending September 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Fiscal year ending September 30, Net Deferred Outflows of Resources 2018 295,323$ 2019 296,386 2020 243,542 2021 (45,455) 2022 - Thereafter - Total 789,796$ Police Officers' Retirement Plan Plan Description The Police Officers' Retirement System (the Plan) is a single-employer defined benefit pension plan that covers substantially all of the Village's certified police officers. The Plan was established as of the effective date of January 1, 1957 by the Village Council. It was amended on December 31, 1999, to split the Plan between General Employees and Police Officers. The Plan is also governed by certain provisions of Chapter 185, Florida Statutes. The Board of Trustees for the Plan administers the Plan. MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 64 NOTE 10 - EMPLOYEE RETIREMENT PLANS - VILLAGE’S REPORTING (Continued) Police Officers' Retirement Plan (Continued) Plan Description (Continued) Plan amendments must be authorized by the Village Council. The Plan provides retirement, disability, and death benefits to Plan members and beneficiaries. The Plan does not issue a separate financial report. Deferred Retirement Option Plan Effective May 5, 1998, subsequent to the approval from the State of Florida, Division of Retirement, current employees with at least 25 but not more than 30 years of continuous service as a member of the plan may elect to participate in the deferred retirement option plan (DROP) for sworn police personnel. The employee may elect to participate in the plan for a maximum of 60 months before the employee attains 30 years of continuous service. A member's continuous service and accrued benefit under the plan shall be determined and frozen on the effective date of the employee's election to participate in the DROP. Additional continuous service or benefits under the plan shall not be accrued, except for cost-of-living adjustments provided to retirees under the plan. No payments are made directly to the employee from the pension plan while the member participates in the drop plan. During the period of the member's participation in the DROP, the employee's normal retirement benefit shall be credited to the employee's DROP account. No further contributions to the police officers' retirement system will be required by the Village nor the employee on behalf of any employee who has elected participation in the DROP. The member's account is invested as part of the corpus of the system by the Board and is credited with interest equal to the overall net rate of return on the fund assets during the reporting period during which the member participates in the DROP. At the conclusion of the member's participation in the DROP, the member will receive a normal benefit calculated in accordance with the plan using an average monthly earnings and continuous service as of the effective date of the member's election to participate in the DROP. The DROP account is distributed to the member in a cash lump sum, unless the member alternatively elects to receive payments in approximately equal quarterly or annual installments over a period designated by the member. If a member dies before distribution of the member's DROP plan commences, the account balance is paid to the member's designated beneficiary in an immediate cash lump sum. Provisions of the plan do not allow for the distribution of a member's DROP account to begin later than April 1 following the later of the calendar year in which the member separates from service with the Village or attains age 70 & 1/4 years. As of September 30, 2017, there were 4 members in the DROP and their fair value of DROP investment was $1,050,438 which is included in the Plan’s net position. At the end of September 30, 2017, the Plan had no DROP liability. Funding Requirement Plan members are required to contribute 9% of their annual covered salary. The Village contributes at actuarially determined rates that are designed to accumulate sufficient assets to pay benefits when due. Effective May 30, 2012, the Division of Retirement mandated that local governments confer with the Plan’s actuary to select and maintain contribution method (percentage of payroll or fixed dollar contributions) that best fits the funding requirements of the Plan. The Plan determined to use the “percentage of payroll contribution” method for the fiscal year ended September 30, 2016. Pursuant to Chapter 185, Florida Statutes, a portion of all insurance premium tax monies received in excess of the threshold of $60,386 are to be utlized to provide future minimum extra benefits and may not be used to reduce or offset the contribution requirements of the employer. MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 65 NOTE 10 - EMPLOYEE RETIREMENT PLANS - VILLAGE’S REPORTING (Continued) Police Officers' Retirement Plan (Continued) The actual contribution from the Village for active members were actuarially determined using the actuarial valuation as of October 1, 2015 for the year ended September 30, 2016. The contributions consisted of the following at September 30, 2016: Actual Contribution Percentage of Covered Payroll Village 1,122,197 52.76% State of Florida 95,281 4.48% Total contributions from Village and State of Florida 1,217,478 52.24% Members 191,425 N/A Net Pension Liability: The Village's net pension liability was measured as of September 30, 2016 and the total pension liability used to calculate the net pension liability was determined by the October 1, 2015 actuarial valuation. Significant Actuarial Assumptions The total pension liability was determined by an actuarial valuation as of October 1, 2015 and rolled forward to the measurement date of September 30, 2016, using the following actuarial assumptions: Significant Actuarial Assumptions The total pension liability was determined by an actuarial valuation as of October 1, 2015, using the following actuarial assumptions: Interest rates: Single discount rate 7.50% Long-term expected rate of return 7.50% Long-term municipal bond rate*3.06% Last year ending September 30 in the 2017 to 2116 projection period for which projected benefit payments are fully funded 2116 Mortality table RP-2000 Combined Healthy Participant Mortality Table for males and females with mortality improvement projected to all future years after 2000 using Scale BB. * Source: “20-Bond GO Index” is the Bond Buyer Index, general obligation, 20 years to maturity, mixed quality. In describing this index, the Bond Buyer notes that the bonds’ average credit quality is roughly equivalent to Moody's Investors Service’s Aa2 rating and Standard & Poor’s Corp.’s AA. The rate shown is as of September 29, 2016, the most recent date available on or before the measurement date. MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 66 NOTE 10 - EMPLOYEE RETIREMENT PLANS - VILLAGE’S REPORTING (Continued) Police Officers' Retirement Plan (Continued) Long-Term Expected Rate of Return The long-term expected rate of return on pension plan investment was determined using the long-term nominal building block data less the long-term inflation assumption of 2.5%. The building block long- term real return projections were develop considering the long-term historic capital market returns, 10- 15 year expected capital market return assumptions, as well as, historical, current, and expected inflation data. Best estimates of arithmetic real return for each asset class included in the pension plan’s target allocation as of September 30, 2015 are summarized in the following table: Long-Term Expected Asset Group Real Rate of Return Domestic Equity 7.5% International Equity 8.5% Fixed Income 2.5% Discount Rate A single discount rate of 7.50% was used to measure the total pension liability. This single discount rate was based on the expected rate of return on pension plan investments of 7.50%. The projection of cash flows used to determine this single discount rate assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between the total actuarially determined contribution rates and the member rate. Based on these assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments (7.60%) was applied to all periods of projected benefit payments to determine the total pension liability. MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 67 NOTE 10 - EMPLOYEE RETIREMENT PLANS - VILLAGE’S REPORTING (Continued) Police Officers' Retirement Plan (Continued) Changes in Net Pension Liability Total Pension Liability (a) Plan Fiduciary Net Position (b) Net Pension Liability (a)-(b) Reporting period ending at September 30, 2016 26,177,937$ 19,054,943$ 7,122,994$ Service Cost 536,463 - 536,463 Interest 1,991,408 - 1,991,408 Change of Benefit Terms - - - Difference between actual & expected experience (51,582) - (51,582) Contributions - Employer - 1,217,478 (1,217,478) Contributions - Employee (Including Buyback Contributions)- 191,425 (191,425) Change of Assumptions 326,835 - 326,835 Net Investment Income - 1,818,553 (1,818,553) Benefit Payments (1,023,327) (1,023,327) - Administrative Expense - (78,167) 78,167 Other (Changes in State Contribution Reserve 65,088 - 65,088 Reporting period ending at September 30, 2017 28,022,822$ 21,180,905$ 6,841,917$ Plan Fiduciary Net Position as a Percentage of Total Pension Liability 75.58% Covered Payroll 2,126,944$ Net Pension Liability as a Percentage of Covered Payroll 321.68% Increase (Decrease) Sensitivity of the Net Pension Liability to the Single Discount Rate Assumption The following presents the plan’s net pension liability, calculated using a single discount rate of 7.50%, as well as what the plan’s net pension liability would be if it were calculated using a single discount rate that is 1-percentage-point lower or 1-percentage-point higher: 1% Decrease Rate Assumption 1% Increase 6.50%7.50%8.50% 10,502,232$ $ 6,841,917 3,844,022$ Current Single Discount MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 68 NOTE 10 - EMPLOYEE RETIREMENT PLANS - VILLAGE’S REPORTING (Continued) Police Officers' Retirement Plan (Continued) Financial Information The Plan does not issue separate stand-alone financial statements, therefore, included on the next page is the Statement of Plan Net Position and the Statement of Changes in Plan Net Position as of and for the fiscal year ended September 30, 2016. ASSETS Cash and cash equivalents 618,562$ Investments, at fair value 20,562,814 Accrued interest receivable 37,195 Total assets 21,218,571 LIABILITIES Accounts Payable and Accrued expenses 37,666 NET POSITION Net position restricted for pensions 21,180,905$ ADDITIONS Contributions 1,408,903$ Net investment loss 1,818,553 Total additions 3,227,456 DEDUCTIONS Pension benefits 1,023,327 Administrative expenses 78,167 Total deductions 1,101,494 Increase 2,125,962 Net position restricted for pensions: Beginning of year 19,054,943 End of year 21,180,905$ STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30, 2016 STATEMENT OF CHANGES IN PLAN NET POSITION FISCAL YEAR ENDED SEPTEMBER 30, 2016 MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 69 NOTE 10 - EMPLOYEE RETIREMENT PLANS - VILLAGE’S REPORTING (Continued) Police Officers' Retirement Plan (Continued) For the year ended September 30, 2017, the Village will recognize pension expense of $1,322,017. At September 30, 2017, the Village reported deferred inflows of resources related to pensions from the following sources: Deferred Outflows of Resources Deferred Inflows of Resources Difference between expected and actual experience 2,567$ 407,907$ Changes in assumptions 453,837 - Net difference between projected and actual earnings on pension plan investments 781,622 - Employer contributions subsequent to the measurement date 1,105,854 - Total 2,343,880$ 407,907$ The Village contributions subsequent to the measurement date of $1,105,854 are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the fiscal year ending September 30, 2017. Other amounts reported as deferred inflows of resources related to pensions will be recognized in pension expense as follows: Fiscal year ending September 30, Net Deferred Outflows of Resources 2018 302,173$ 2019 302,174 2020 267,329 2021 (41,557) 2022 - Thereafter - Total 830,119$ MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 70 NOTE 11 RISK MANAGEMENT The Village is exposed to various risks of loss related to torts, theft, damage to and destruction of assets, errors and omissions and natural disasters for which it has purchased commercial insurance. Prior to October 1, 2005, the Village was self-insured for these claims up to certain limits. As of September 30, 2017, there were two workers' compensation claims outstanding under the previous self-insurance program. The amount of settlements for each of the past three fiscal years did not exceed insurance coverage. Liabilities in the risk management internal service fund include amounts for claims that have been incurred but not reported (IBNR's) as well as known claims that existed prior to purchasing commercial insurance. Claim liabilities are calculated considering the recent claim settlement trends. Changes in the balances of estimated claims for the past three years ended September 30, 2017 are as follows: 2017 2016 2015 Unpaid claims, beginning $ 340,000 $ 340,000 $ 340,000 Incurred claims (including IBNR’s)--- Claim payments and disbursements - - - Unpaid claims, ending 340,000 340,000 340,000 NOTE 12- COMMITMENTS AND CONTINGENCIES Litigation Various suits and claims arising in the ordinary course of operations are pending against the Village. While the ultimate effect of such litigation cannot be ascertained at this time, in the opinion of legal counsel, the Village has sufficient insurance coverage to cover any claims and/or liabilities, which may arise from such action. The effect of such losses would not materially affect the financial position of the Village or the results of its operations. Grants Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies. Any disallowed claims, including amounts already collected may constitute a liability of the applicable funds. In the opinion of management, future disallowances of grant expenditures, if any, would not have a material adverse effect on the Village's financial condition. NOTE 13 - OTHER POST EMPLOYMENT BENEFITS Plan Description and Provisions Other Post-Employment Benefits (OPEB) are available to all employees eligible for Disability, Early or Normal Retirement, as above, after terminating employment with the Village. The OPEB benefits include access to coverage for the retiree and dependents under the Medical and Prescription Plans as well as participation in the Dental group plans sponsored by the Village for employees. The Village MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 71 NOTE 13 - OTHER POST EMPLOYMENT BENEFITS (Continued) Plan Description and Provisions (Continued) provides all financial information and required disclosures of its other post-employment benefit plan in this document; therefore, a separate audited post-employment benefits plan report is not available. Membership As of October 1, 2015 (the date of the latest actuarial valuations) health care and dental plan participants consisted of: Active participants 100 Retired participants 7 Total participants 107 Health-Related Benefits Eligible retirees may choose among the same Medical Plan options available for active employees of the Village. Dependents of retirees may be covered at the retiree’s option the same as dependents of active employees. Prescription Drug coverage is automatically extended to retirees and their dependents who continue coverage under any one of the Medical Plan options. Covered retirees and their dependents are subject to all the same Medical and Prescription benefits and rules for coverage as are active employees. Retirees who are over age 65 are only eligible to enroll in Medicare Advantage Plan. Retiree Contributions for Medical/Prescription In order to begin and maintain retiree Medical/Prescription coverage, premium contributions are required from the retiree. For dependent coverage, the retiree is required to pay a premium as well. If any required amounts are not paid timely, the coverage for the retiree and/or the dependent(s) will cease. The amount of the contributions required for retiree and dependent coverage may change from time to time. Medical Insurance Supplement Retired Police Officers are eligible for supplemental payments from the Village in the amount of $100 per month to help pay for the costs of health insurance, even if retired officers have coverage through a different health plan. Eligibility is conditioned upon demonstration that the Officer has health insurance coverage. The benefit stops at age 65. This benefit is partially funded during active employment with the Village – Police officers contribute $4.05 per pay period towards future payments from the Village. In the event of termination prior to 10 years of service, the accumulated employee contributions are forfeited. In the event of termination after 10 years of service but prior to OPEB eligibility, the member may request a refund of the employee contribution and forfeit the right to future coverage. The employee contributions are not held in a qualifying trust or similar arrangement. MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 72 NOTE 13 - OTHER POST EMPLOYMENT BENEFITS (Continued) Disabled Retirees Premium Contributions Members eligible for disability retirement are subject to premium payments the same as all regular retirees. An exception is made to Police Officers who had sustained catastrophic injuries in the line of duty. Premiums for health coverage of such officers, their spouses and any dependent children will be paid by the Village as prescribed by the Florida Statute Sections 112.19(2)(g)1 and 112.19(2)(h)1 respectively (first introduced as the Alu-O'Hara Public Safety Act). Funding Policy Benefits are funded on a pay-as-you-go basis. Annual Required Contribution (ARC) In accordance with GASB Statement No. 45, an actuarial study was prepared calculating the postemployment healthcare costs as of October 1, 2015. The actuarial valuation estimated the Unfunded Actuarial Accrued liability (UAAL) of $1,767,654 and an Annual Required Contribution (ARC) of $199,950. The ARC represents a level of funding that if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded liability amounts over a period not to exceed 30 years. The following table shows the components of the Village's annual OPEB cost for the year, the amount actually contributed, and the changes in the net OPEB obligation: Annual required contribution (ARC) $ 204,660 Interest on net OPEB obligation 30,138 Adjustment to annual required (39,140) Annual pension cost (APC) 195,658 Employer contributions made (91,579) Increase in net OPEB obligation 104,079 Net OPEB obligationt, beginning of year 861,090 Net OPEB obligation, end of year $ 965,169 Annual OPEB Costs The Village's annual OPEB cost, the percentage of annual OPEB costs contributed to the plan, and the net OPEB obligation for 2017 and two preceding years were as follows: Fiscal Year Ending September 30, Annual OPEB Cost Actual Contribution Percentage Contributed Net OPEB Obligation 2015 178,119 69,621 39.09% 745,161 2016 193,633 77,704 40.13% 861,090 2017 195,658 91,579 46.81% 965,169 MIAMI SHORES VILLAGE, FLORIDA NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 73 NOTE 13 - OTHER POST EMPLOYMENT BENEFITS (Continued) Schedule of Funding Progress The schedule of funding progress, presented as required supplementary information (RSI) following the notes to the basic financial statements, present multiyear trend information about whether the actuarial values of the plan assets are increasing or decreasing over time relative to the AALs for benefits. An analysis of funding progress based on recent actuarial valuation follows: Actuarial Valuation Date Actuarial Value of Assets (a) Actuarial Accrued Liability (AAL) - Entry Age (b) Unfunded AAL (UAAL) (b - a) Funded Ratio (a / b) Covered Payroll (c) UAAL as a % of Covered Payroll ([b - a] / c) 10/1/2008 $ - $ 1,597,598 $ 1,597,598 0% $ 4,767,200 33.51% 10/1/2012 - 1,273,964 1,273,964 0% 5,118,382 24.89% 10/1/2015 - 1,767,654 1,767,654 0% 5,607,408 31.52% Actuarial Methods and Assumptions Actuarial Cost Method:Entry Age Amortization Method:Level % Closed Remaining Amortization Period:23 Years Asset Valuation Method:Unfunded Actuarial Assumptions: Investment rate of return 3.50% (includes general price inflation at 2.50%) Projected salary increases 5.5% - 6.5% (includes general price inflation at 2.50%) Payroll growth assumptions 3.5% Initial per capital cost trend rate 6.60% 2nd trend rate 6.50% 3rd trend rate 6.25% Ultimate trend rate 4.69% (includes 0.45% estimated effect of the Federal Excise Tax) Initial per capital cost trend rate 6.60% REQUIRED SUPPLEMENTARY INFORMATION MIAMI SHORES VILLAGE, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE GENERAL FUND Variance with Final Budget - Actual Positive Original Final Amounts (Negative) Revenues: Taxes: Property taxes 7,331,246$ 7,331,246$ 7,446,686$ 115,440$ Licenses and permits: Business licenses - Village 95,000 95,000 - (95,000) Business licenses - County 25,000 25,000 28,964 3,964 Building permits 828,099 828,099 873,965 45,866 Certificate of reoccupancy 13,600 13,600 10,860 (2,740) Other licenses and permits 177,172 177,172 298,240 121,068 Total licenses and permits 1,138,871 1,138,871 1,212,029 73,158 Intergovernmental revenues: State shared revenues: State revenue sharing 268,000 268,000 275,137 7,137 Local government half cent sales tax 859,000 859,000 826,835 (32,165) Other 890 890 793 (97) Total intergovernmental revenues 1,127,890 1,127,890 1,102,765 (25,125) Charges for services: Physical environment 25,100 25,100 24,536 (564) Police extra duty 432,752 432,752 419,451 (13,301) Landscape maintenance 25,000 25,000 29,204 4,204 Culture/recreation 1,554,416 1,554,416 1,356,565 (197,851) Total charges for services 2,037,268 2,037,268 1,829,756 (207,512) Fines and forfeitures: Court fines and costs 52,000 52,000 19,890 (32,110) School crossing guards 17,000 17,000 18,466 1,466 Other 288,100 288,100 515,712 227,612 Total fines and forfeitures 357,100 357,100 554,068 196,968 Miscellaneous: Rents 265,000 265,000 279,510 14,510 Other 58,250 58,250 91,799 33,549 Total miscellaneous 323,250 323,250 371,309 48,059 Interest 8,000 8,000 42,023 34,023 Total revenues 12,323,625$ 12,323,625$ 12,558,636$ 235,011$ Budgeted Amounts FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2017 See notes to budgetary comparison schedule 74 MIAMI SHORES VILLAGE, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE GENERAL FUND Variance with Final Budget - Actual Positive Original Final Amounts (Negative) Expenditures: Current: General government: Village council 22,530$ 52,530$ 39,011$ 13,519$ Village attorney 268,055 356,055 352,443 3,612 Village manager 243,268 243,268 240,889 2,379 Village clerk 177,612 181,412 181,103 309 Code enforcement 186,857 186,857 159,690 27,167 Building department 601,329 601,329 559,552 41,777 Planning and zoning 194,414 222,977 189,618 33,359 Finance 643,863 643,863 607,636 36,227 Other general government 987,916 957,216 820,489 136,727 Total general government 3,325,844 3,445,507 3,150,431 295,076 Public safety: Law enforcement 6,675,472 6,888,099 6,475,304 412,795 School crossing guard 42,363 42,363 45,190 (2,827) Total public safety 6,717,835 6,930,462 6,520,494 409,968 Public works: Parks 362,777 362,777 321,548 41,229 Street maintenance 616,471 628,272 600,059 28,213 Public works administration 471,768 471,768 434,674 37,094 Recreation maintenance 184,354 184,354 176,632 7,722 Total public services 1,635,370 1,647,171 1,532,913 114,258 Culture and recreation: Recreation 2,424,481 2,431,492 2,191,433 240,059 Library 460,341 463,841 377,031 86,810 Total culture and recreation 2,884,822 2,895,333 2,568,464 326,869 Total expenditures 14,563,871 14,918,473 13,772,302 1,146,171 (Deficiency) of revenues (under) expenditures (2,240,246) (2,594,848) (1,213,666) 1,381,182 Other financing sources (uses): Transfers in 3,093,058 3,093,058 2,593,058 500,000 Transfers out (1,202,812) (1,889,566) (1,889,566) - (Deficiency) of revenues (under) other financing sources (uses)(350,000) (1,391,356) (510,174) 881,182 Fund balance appropriated 350,000 1,391,356 - 1,391,356$ Net change in fund balance - - (510,174) Fund balance, beginning - - 7,965,588 Fund balance, ending -$ -$ 7,455,414$ FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2017 Budgeted Amounts See notes to budgetary comparison schedule 75 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Public service taxes 2,347,050$ 2,347,050$ 2,104,726$ (242,324)$ Total revenues 2,347,050 2,347,050 2,104,726 (242,324) Other financing (uses): Transfers out (2,693,058) (2,693,058) (2,193,058) 500,000 (Deficiency) of revenues (under) other financing (uses)(346,008) (346,008) (88,332) 257,676 Fund balance appropriated - - - -$ Net change in fund balance (346,008) (346,008) (88,332) Fund balances - beginning - - 854,073 Fund balances - ending (346,008)$ (346,008)$ 765,741$ Budgeted Amounts MIAMI SHORES VILLAGE, FLORIDA BUDGETARY COMPARISON SCHEDULES SPECIAL REVENUE FUND - EXCISE TAX FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2017 See notes to budgetary comparison schedules 76 MIAMI SHORES VILLAGE, FLORIDA NOTES TO BUDGETARY COMPARISON SCHEDULES 77 BUDGETARY INFORMATION Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. The Village annually adopts operating budgets for the following governmental funds: General Fund, Excise Tax Fund, Local Option Gas Tax Fund, Half Cent Surtax Fund, the Capital Improvements Fund and Debt Service Fund. Budgets are also adopted for the Stormwater fund, Sanitation fund, Risk Management and Fleet Maintenance Fund. a) 35 days prior to the fiscal year end, the Village Manager submits to the Village Council a proposed operating budget for the fiscal year commencing the following October 1st. The operating budget is restricted to proposed expenditures and the means of financing them by means of appropriated revenues, other financing sources and appropriations of fund balances. Budgetary control over expenditures for the General Fund is legally maintained at the departmental level. For all other funds it is legally maintained at the fund level. b) Two public hearings are conducted to obtain taxpayer comments as required by Truth in Millage (TRIM) legislation. c) Prior to September 28th (unless preempted by TRIM) as stated in the Village's Charter, the budget is legally enacted through passage of a resolution. d) The Village Manager may at any time transfer any unencumbered appropriated balance or portion thereof between general classifications of expenditures within an office, department or agency. At the request of the Village Manager and within the last three months of the budget year, the Council may by resolution transfer any unencumbered appropriated balance or portion thereof, from one office, department or agency to another. e) Budgeted amounts are as originally adopted or as amended. There were supplemental appropriations in the General Fund totaling $321,215, during the fiscal year ended September 30, 2017 for funding outstanding obligations and unanticipated expenses f) Unencumbered appropriations lapse at year end. Excesses of Expenditures over Appropriations For the year ended September 30, 2017, expenditures exceeded appropriations in the Grant Fund by $2,827. These over-expenditures were funded by available fund balance. Reporting fiscal year ending September 30,2017 2016 2015 Measurement fiscal year ending September 30,2016 2015 2014 Total Pension Liability Service Cost 315,449$ 325,868$ 308,880$ Interest 1,079,053 1,018,010 960,279 Difference between actual & expected experience - 106,918 (7,788) Difference between actual & expected assupmtion 317,996 - - Benefit Payments (639,713) (655,520) (373,038) Refunds - - (28,655) Net Change in Total Pension Liability 1,072,785 795,276 859,678 Total Pension Liability - Beginning 14,018,082 13,222,806 12,363,128 Total Pension Liability - Ending (a)15,090,867$ 14,018,082$ 13,222,806$ Plan Fiduciary Net Position Contributions - Employer 371,453$ 371,453$ 261,966$ Contributions - Member 188,786 188,793 179,680 Net Investment Income 1,074,730 (160,205) 715,959 Benefit Payments (639,713) (655,520) (373,038) Refunds - - (28,655) Administrative Expense (69,962) (15,448) (29,411) Net Change in Plan Fiduciary Net Position 925,294 (270,927) 726,501 Plan Fiduciary Net Position - Beginning 11,374,066 11,644,993 10,918,492 Plan Fiduciary Net Position - Ending (b) 12,299,360$ 11,374,066$ 11,644,993$ Net Pension Liability - Ending (a) - (b)2,791,507$ 2,644,016$ 1,577,813$ Plan Fiduciary Net Position as a Percentage of Total Pension Liability 81.50%81.14%88.07% Covered Payroll 1 3,146,433$ 3,146,550$ 2,994,667$ Net Pension Liability as a Percentage of Covered Payroll 88.72%84.03%52.69% 1 This schedule is presented to illustrate the requirement to show information for 10 years.However,until a full 10-year trend is compiled, pension plans should present information for those years for which information is available. Covered Payroll was calculated by dividing the total member contributions for the fiscal year by the member contribution rate of 6%. MIAMI SHORES VILLAGE, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS GENERAL EMPLOYEES' RETIREMENT SYSTEM (VILLAGE'S REPORTING) (as required by GASB Statement No. 68) 78 Fiscal year ending September 30,2017 2016 2015 2014 Total Pension Liability Service Cost 345,113$ 315,449$ 325,868$ 308,880$ Interest 1,134,060 1,070,820 1,018,010 960,279 Difference between actual & expected experience - 115,151 - (7,788) Assumption Changes - 317,996 - - Benefit Payments (630,350) (639,713) (655,520) (373,038) Refunds - - - (28,655) Net Change in Total Pension Liability 848,823 1,179,703 688,358 859,678 Total Pension Liability - Beginning 15,090,867 13,911,164 13,222,806 12,363,128 Total Pension Liability - Ending (a)15,939,690$ 15,090,867$ 13,911,164$ 13,222,806$ Plan Fiduciary Net Position Contributions - Employer 443,102$ 371,453$ 371,453$ 261,966$ Contributions - Member 186,555 188,786 188,793 179,680 Net Investment Income 1,531,913 1,074,730 (160,205) 715,959 Benefit Payments (630,350) (639,713) (655,520) (373,038) Refunds - - - (28,655) Administrative Expense (42,936) (69,962) (15,448) (29,411) Net Change in Plan Fiduciary Net Position 1,488,284 925,294 (270,927) 726,501 Plan Fiduciary Net Position - Beginning 12,299,360 11,374,066 11,644,993 10,918,492 Plan Fiduciary Net Position - Ending (b) 13,787,644$ 12,299,360$ 11,374,066$ 11,644,993$ Net Pension Liability - Ending (a) - (b)2,152,046$ 2,791,507$ 2,537,098$ 1,577,813$ Plan Fiduciary Net Position as a Percentage of Total Pension Liability 86.50%81.50%81.76%88.07% Covered Payroll 1 3,109,250$ 3,146,433$ 3,146,550$ 2,994,667$ Net Pension Liability as a Percentage of Covered Payroll 69.21%88.72%80.63%52.69% 1 This schedule is presented to illustrate the requirement to show information for 10 years.However,until a full 10-year trend is compiled, pension plans should present information for those years for which information is available. (as required by GASB Statement No. 67) MIAMI SHORES VILLAGE, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS GENERAL EMPLOYEES' RETIREMENT SYSTEM (PLAN'S REPORTING) Covered Payroll was calculated by dividing the total member contributions for the fiscal year by the member contribution rate of 6%. 79 Fiscal Year Actuarially Contribution Actual Contribution Ending Determined Actual Deficiency Covered as a % of September 30,Contribution Contribution (Excess) Payroll1 Covered Payroll 2017 443,102$ 443,102$ -$ 3,109,250$ 14.25% 2016 371,453 371,453$ - 3,146,433 11.81% 2015 371,453 371,453 - 3,146,550 11.81% 2014 261,966 261,966 - 2,994,667 8.75% 1 Valuation Date 10/1/2015 Notes Methods and Assumptions Used to Determine Contribution Rates: Entry Age Normal Amortization Method Level Dollar, Closed Remaining Amortization Period 20 years Asset Valuation Method 5-year smoothed market Inflation 2.5% Salary Increases 5.50% Investment Rate of Return 7.50% Retirement Age Mortality Notes to the Schedule of Contributions MIAMI SHORES VILLAGE, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS GENERAL EMPLOYEES' RETIREMENT SYSTEM Covered Payroll was calculated by dividing the total member contributions for the fiscal year by the member contribution rate of 6%. (as required by GASB Statement No. 68) This schedule is presented to illustrate the requirement to show information for 10 years.However,until a full 10-year trend is compiled,pension plans should present information for those years for which information is available. Experience-based table of rates that are specific to the type of eligibility condition RP-2000 Combined Healthy Participant Mortality Table for males and females with mortality improvement projected to all future years after 2000 using Scale BB. Actuarial Cost Method Actuarially determined contribution rates are calculated as of October 1, which is two years prior to the end of the fiscal year in which contributions are reported. 80 Fiscal Year Actuarially Contribution Actual Contribution Ending Determined Actual Deficiency Covered as a % of September 30,Contribution Contribution (Excess) Payroll1 Covered Payroll 2017 443,102$ 443,102$ -$ 3,109,250$ 14.25% 2016 371,453 371,453 - 3,146,433 11.81% 2015 371,453 371,453 - 3,146,550 11.81% 2014 261,966 261,966 - 2,994,667 8.75% 1 Valuation Date 10/1/2015 Notes Methods and Assumptions Used to Determine Contribution Rates: Entry Age Normal Amortization Method Level Dollar, Closed Remaining Amortization Period20 years Asset Valuation Method 5-year smoothed market Inflation 2.5% Salary Increases 5.50%, including inflation Investment Rate of Return 7.50% Retirement Age Mortality This schedule is presented to illustrate the requirement to show information for 10 years. However,until a full 10-year trend is compiled,pension plans should present information for those years for which information is available. MIAMI SHORES VILLAGE, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS GENERAL EMPLOYEES' RETIREMENT SYSTEM (as required by GASB Statement No. 67) Covered Payroll was calculated by dividing the total member contributions for the fiscal year by the member contribution rate of 6%. Notes to the Schedule of Contributions Actuarially determined contribution rates are calculated as of October 1,which is two years prior to the end of the fiscal year in which contributions are reported. Actuarial Cost Method Experience-based table of rates that are specific to the type of eligibility condition RP-2000 Combined Healthy Participant Mortality Table for males and females with mortality improvement projected to all future years after 2000 using Scale BB. 81 Fiscal year ending September 30, Annual Money- Weighted Rate of Return, Net of Investment Expense 2017 11.96% 2016 8.73% 2015 -1.20% 2014 6.23% 2013 10.44% 2012 12.95% 2011 9.06% 2010 8.51% 2009 7.10% 2008 3.49% MIAMI SHORES VILLAGE, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF INVESTMENT RETURNS GENERAL EMPLOYEES' RETIREMENT SYSTEM 82 Reporting fiscal year ending September 30,2017 2016 2015 Measurement fiscal year ending September 30,2016 2015 2014 Total Pension Liability Service Cost 536,463$ 554,721$ 672,275$ Interest 1,991,408 1,937,284 1,796,408 Benefit Changes - (173,336) - Difference between actual & expected experience (51,582) (582,646) 5,315 Assumption Changes 326,835 307,647 - Benefit Payments (1,023,327) (941,093) (1,180,510) Other 65,088 - 113,175 Net Change in Total Pension Liability 1,844,885 1,102,577 1,406,663 Total Pension Liability - Beginning 26,177,937 25,075,360 23,668,697 Total Pension Liability - Ending (a)28,022,822$ 26,177,937$ 25,075,360$ Plan Fiduciary Net Position Contributions - Employer (from Village)1,122,197$ 1,249,668$ 1 1,207,161$ Contributions - Employer (from State)95,281 - 2 173,561 Contributions - Member 191,425 180,728 205,660 Net Investment Income 1,818,553 (201,097) 1,168,552 Benefit Payments (1,023,327) (941,093) (1,180,510) Administrative Expense (78,167) (11,783) (39,391) Net Change in Plan Fiduciary Net Position 2,125,962 276,423 1,535,033 Plan Fiduciary Net Position - Beginning 19,054,943 18,778,520 17,243,487 Plan Fiduciary Net Position - Ending (b) 21,180,905$ 19,054,943$ 18,778,520$ Net Pension Liability - Ending (a) - (b)6,841,917$ 7,122,994$ 6,296,840$ Plan Fiduciary Net Position as a Percentage of Total Pension Liability 75.58%72.79%74.89% Covered Payroll 3 2,126,944$ 2,008,089$ 2,285,111$ Net Pension Liability as a Percentage of Covered Payroll 321.68%354.72%275.56% 1 2 3 This schedule is presented to illustrate the requirement to show information for 10 years.However,until a full 10-year trend is compiled, pension plans should present information for those years for which information is available. MIAMI SHORES VILLAGE, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS POLICE OFFICERS' RETIREMENT SYSTEM (VILLAGE'S REPORTING) Covered Payroll was calculated by dividing the total member contributions for the fiscal year by the member contribution rate of 9%. Includes receivable Employer contribution in the amount of $32,922 for fiscal year ending September 30, 2015. (as required by GASB Statement No. 68) State contributions for fiscal year ending September 30,2015 were not received until after the end of the fiscal year (therefore not permitted to be used until next fiscal year). 83 Fiscal year ending September 30,2017 2016 2015 2014 Total Pension Liability Service Cost 660,242$ 536,463$ 554,721$ 672,275$ Interest 2,115,601 1,991,408 1,937,284 1,796,408 Benefit Changes - - (173,336) - Difference between actual & expected experience 101,437 (51,582) (582,646) 5,315 Assumption Changes (303,810) 326,835 307,647 - Benefit Payments (950,094) (1,023,327) (941,093) (1,180,510) Other 70,382 65,088 - 113,175 Net Change in Total Pension Liability 1,693,758 1,844,885 1,102,577 1,406,663 Total Pension Liability - Beginning 28,022,822 26,177,937 25,075,360 23,668,697 Total Pension Liability - Ending (a)29,716,580$ 28,022,822$ 26,177,937$ 25,075,360$ Plan Fiduciary Net Position Contributions - Employer 1,105,854$ 1,122,197$ 1,249,668$ 1 1,207,161$ Contributions - Employer (from State)100,575 95,281 - 2 173,561 Contributions - Member 210,630 191,425 180,728 205,660 Net Investment Income 2,495,997 1,818,553 (201,097) 1,168,552 Benefit Payments (950,094) (1,023,327) (941,093) (1,180,510) Administrative Expense (62,709) (78,167) (11,783) (39,392) Net Change in Plan Fiduciary Net Position 2,900,253 2,125,962 276,423 1,535,032 Plan Fiduciary Net Position - Beginning 21,180,905 19,054,943 18,778,520 17,243,488 Plan Fiduciary Net Position - Ending (b) 24,081,158$ 21,180,905$ 19,054,943$ 18,778,520$ Net Pension Liability - Ending (a) - (b)5,635,422$ 6,841,917$ 7,122,994$ 6,296,840$ Plan Fiduciary Net Position as a Percentage of Total Pension Liability 81.04%75.58%72.79%74.89% Covered Payroll 3 2,340,333$ 2,126,944$ 2,008,089$ 2,285,111$ Net Pension Liability as a Percentage of Covered Payroll 240.80%321.68%354.72%275.56% 1 2 This schedule is presented to illustrate the requirement to show information for 10 years.However,until a full 10-year trend is compiled, pension plans should present information for those years for which information is available. (as required by GASB Statement No. 67) MIAMI SHORES VILLAGE, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS POLICE OFFICERS' RETIREMENT SYSTEM (PLAN'S REPORTING) State contributions for fiscal year ending September 30,2015 were not received until after the end of the fiscal year (therefore not permitted to be used until next fiscal year). Includes receivable Employer contribution in the amount of $32,922 for fiscal year ending September 30, 2015. 84 Fiscal Year Actuarially Contribution Actual Contribution Ending Determined Actual Deficiency Covered as a % of September 30,Contribution Contribution (Excess) Payroll3 Covered Payroll 2017 1,136,047$ 1,136,047$ -$ 2,340,333$ 48.54% 2016 1,152,390 1,152,390 - 2,126,944 54.18% 2015 1,249,668 1 1,249,668 2 - 2,008,089 62.23% 2014 1,237,354 1,267,547 (30,193) 2,285,111 55.47% 1 2 3 Valuation Date Notes Methods and Assumptions Used to Determine Contribution Rates: Amortization Method Remaining Amortization Period Asset Valuation Method Inflation Salary Increases Investment Rate of Return Retirement Age Mortality MIAMI SHORES VILLAGE, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS POLICE OFFICERS' RETIREMENT SYSTEM Covered Payroll was calculated by dividing the total member contributions for the fiscal year by the member contribution rate of 9%. State contributions for fiscal year ending September 30,2015 were not received until after the end of the fiscal year (therefore not permitted to be used until next fiscal year). Includes receivable Employer contribution in the amount of $32,922 for fiscal year ending September 30, 2015. (as required by GASB Statement No. 68) This schedule is presented to illustrate the requirement to show information for 10 years.However,until a full 10-year trend is compiled,pension plans should present information for those years for which information is available. Actuarial Cost Method Notes to the Schedule of Contributions 10/1/2015 Actuarially determined contribution rates are calculated as of October 1, which is two years prior to the end of the fiscal year in which contributions are reported. Entry Age Normal 20 years 2.50% 6.50% 7.50% All actives are assumed to retire when first eligible for Normal Retirement. The rate of retirement is 1% for each year of eligibility for Early Retirement. Level Dollar, Closed 5-year smoothed market RP-2000 Combined Healthy Participant Mortality Table for males and females with mortality improvement projected to all future years after 2000 using Scale BB. 85 Fiscal Year Actuarially Contribution Actual Contribution Ending Determined Actual Deficiency Covered as a % of September 30,Contribution Contribution (Excess) Payroll Covered Payroll 2017 1,136,047$ 1,136,047$ -$ 2,340,333$ 48.54% 2016 1,152,390 1,152,390 - 2,126,944 54.18% 2015 1,249,668 1 1,249,668 2 - 2,008,089 62.23% 2014 1,237,354 1,267,547 (30,193) 2,285,111 55.47% 1 2 Valuation Date Notes Methods and Assumptions Used to Determine Contribution Rates: Amortization Method Remaining Amortization Period Asset Valuation Method Inflation Salary Increases Investment Rate of Return Retirement Age Mortality 6.5%, including inflation RP-2000 Combined Healthy Participant Mortality Table for males and females with mortality improvement projected to all future years after 2000 using Scale BB. For females, the base mortality rates include a 100% white collar adjustment. For males, the base mortality rates include a 90% blue collar adjustment and a 10% white collar adjustment. For disabled retirees, the mortality table used was 60% of the RP-2000 Mortality Table for disabled annuitants with ages set back 4 years for males and set forward 2 years for females, and 40% of the RP2000 Mortality Table for healthy annuitants with a 100% white collar adjustment, with no provision being made for future mortality improvements. These are the same rates currently in use for Special Risk Class members of the Florida Retirement System (FRS), as mandated by Florida House Bill 1309 (codified in Chapter 2015-157). All actives are assumed to retire when first eligible for Normal Retirement. The rate of retirement is 1% for each year of eligibility for Early Retirement. This schedule is presented to illustrate the requirement to show information for 10 years.However, until a full 10-year trend is compiled,pension plans should present information for those years for which information is available. (as required by GASB Statement No. 67) Level Dollar, Closed 5-year smoothed market 20 years 2.5% 7.50% Note:Covered Payroll was calculated by dividing the total member contributions for the fiscal year by the member contribution rate of 9%. Notes to the Schedule of Contributions 10/1/2016 Actuarially determined contribution rates are calculated as of October 1, which is two years prior to the end of the fiscal year in which contributions are reported. Actuarial Cost Method Entry Age Normal State contributions for fiscal year ending September 30,2015 were not received until after the end of the fiscal year (therefore not permitted to be used until next fiscal year). MIAMI SHORES VILLAGE, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS POLICE OFFICERS' RETIREMENT SYSTEM Includes receivable Employer contribution in the amount of $32,922 for fiscal year ending September 30, 2015. 86 Fiscal year ending September 30, Annual Money-Weighted Rate of Return, Net of Investment Expense 2017 11.22% 2016 8.97% 2015 -0.90% 2014 6.30% 2013 9.48% 2012 11.52% 2011 8.38% 2010 7.99% 2009 6.89% 2008 3.74% MIAMI SHORES VILLAGE, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF INVESTMENT RETURNS POLICE OFFICERS' RETIREMENT SYSTEM 87 Actuarial Valuation Date Actuarial Value of Assets Actuarial Accrued Liability (AAL) Entry Age Unfunded AAL (UAAL) Funded Ratio Covered Payroll UAAL as a % of Covered Payroll 10/1/2008 -$ 1,597,598$ 1,597,598$ 0%4,767,200$ 33.51% 10/1/2012 - 1,273,964 1,273,964 0%5,118,382 24.89% 10/1/2015 - 1,767,654 1,767,654 0%5,607,408 31.52% SCHEDULE OF FUNDING PROGRESS OTHER POST-EMPLOYMENT BENEFITS MIAMI SHORES VILLAGE, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION 88 COMBINING FINANCIAL STATEMENTS NONMAJOR GOVERNMENTAL FUNDS Special Revenue Funds Special revenue funds are used to account for specific revenue that is legally restricted to expenditure for particular purposes. Transportation Surtax – This fund accounts for the Village’s portion of the Miami-Dade County one-half percent transportation surtax approved by voters in November 2002. Local Option Gas Tax – This fund accounts for the revenues from the six cents and additional three cents sales tax levied on all petroleum products sold in Miami-Dade County. Law Enforcement Training – This fund accounts for proceeds obtained through fines designated specifically for training law enforcement officers. Brockway Memorial Library Fund – This fund accounts for donations to be applied toward the Library’s Children’s Wing Expansion Project. All funds in this account are available to be used in the renovation and addition slated as part of the expansion project. Debt Service Fund General Obligation Bonds – This fund accounts for the 1999 and 2004 General Obligation bonds issued to fund the design, developments and construction of the Miami Shores Aquatic Facility (1999) and for the charter school construction (2004) and other banking financing. Capital Project Funds Capital Improvement Fund – This fund accounts for major capital acquisitions and projects to improve the Village. Charter High School Construction – This fund accounts for all costs associated with the construction of the Doctors Charter School of Miami Shores which was substantially completed in 2005. Local Law Brockway Transportation Option Enforcement Memorial Surtax Gas Tax Training Expansion Total ASSETS Cash and cash equivalents 399,229$ 263,875$ 23,323$ 621,556$ 1,307,983$ Accounts receivable - net 141,113 28,684 372 - 170,169 Total assets 540,342 292,559 23,695 621,556 1,478,152 LIABILITIES Accounts payable and accrued liabilities 11,509 - 1,025 36,714 49,248 Unearned revenues - - - - - Total liabilities 11,509 - 1,025 36,714 49,248 FUND BALANCES Restricted 528,833 292,559 22,670 584,842 1,428,904 Committed - - - - - Unassigned - - - - - Total fund balances 528,833 292,559 22,670 584,842 1,428,904 Total liabilities and fund balances 540,342$ 292,559$ 23,695$ 621,556$ 1,478,152$ MIAMI SHORES VILLAGE, FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2017 Special Revenue Funds 89 (Continued) Debt Service Total Capital Charter Nonmajor Improvement High School Governmental GO Bonds Fund Construction Total Funds ASSETS Cash and cash equivalents 1,157,468$ 751,286$ 24,727$ 776,013$ 3,241,464$ Accounts receivable - net 19 - - - 170,188 Total assets 1,157,487 751,286 24,727 776,013 3,411,652 LIABILITIES Accounts payable and accrued liabilities - 7,047 - 7,047 56,295 Unearned revenues - - - - - Total liabilities - 7,047 - 7,047 56,295 FUND BALANCES Restricted 1,157,487 - - - 2,586,391 Committed - 744,239 24,727 768,966 768,966 Total fund balances 1,157,487 744,239 24,727 768,966 3,355,357 Total liabilities and fund balances 1,157,487$ 751,286$ 24,727$ 776,013$ 3,411,652$ MIAMI SHORES VILLAGE, FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2017 Capital Projects 90 Local Law Brockway Transportation Option Enforcement Memorial Surtax Gas Tax Training Expansion Total Revenues: Intergovernmental revenues 421,378$ 380,530$ -$ -$ 801,908$ Fines and forfeitures - - 2,383 - 2,383 Miscellaneous - - - 1,846 1,846 Interest income 1,154 555 - - 1,709 Total revenues 422,532 381,085 2,383 1,846 807,846 Expenditures: General government - - 1,025 39,624 40,649 Public works 218,572 209,421 - - 427,993 Capital outlay 120,891 - - - 120,891 Total expenditures 339,463 209,421 1,025 39,624 589,533 Excess (deficiency) of revenues over (under) expenditures before other financing sources 83,069 171,664 1,358 (37,778) 218,313 Other financing sources (uses): Transfers in - - - 350,000 350,000 Transfers out - (93,700) - - (93,700) Total other financing sources (uses)- (93,700) - 350,000 256,300 Net change in fund balance 83,069 77,964 1,358 312,222 474,613 Fund balances, beginning 445,764 214,595 21,312 272,620 954,291 Fund balances, ending 528,833$ 292,559$ 22,670$ 584,842$ 1,428,904$ FISCAL YEAR ENDED SEPTEMBER 30, 2017 MIAMI SHORES VILLAGE, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS Special Revenue Funds 91 (Continued) Debt Service Total Capital Charter Nonmajor Improvement High School Governmental GO Bonds Fund Construction Total Funds Revenues: Property taxes 477,013 -$ -$ -$ 477,013$ Intergovernmental revenues - - - - 801,908 Fines and forfeitures - - - - 2,383 Miscellaneous - - - - 1,846 Interest income 2,929 1,316 - 1,316 5,954 Total revenues 479,942 1,316 - 1,316 1,289,104 Expenditures: General government 5,000 - 875 875 46,524 Public works - - 32,544 32,544 460,537 Capital outlay - 944,611 - 944,611 1,065,502 Debt service: Principal 674,079 - - - 674,079 Interest 151,794 - - - 151,794 Total expenditures 830,873 944,611 33,419 978,030 2,398,436 Excess (deficiency) of revenues over (under) expenditures before other financing sources (uses)(350,931) (943,295) (33,419) (976,714) (1,109,332) Other financing sources (uses): Transfers in 380,500 1,164,050 - 1,164,050 1,894,550 Transfers out - - - - (93,700) Total other financing sources (uses)380,500 1,164,050 - 1,164,050 1,800,850 Net change in fund balance 29,569 220,755 (33,419) 187,336 691,518 Fund balances, beginning 1,127,918 523,484 58,146 581,630 2,663,839 Fund balances, ending 1,157,487$ 744,239$ 24,727$ 768,966$ 3,355,357$ MIAMI SHORES VILLAGE, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2017 Capital Projects 92 Variance with Variance with Final Budget Final Budget Actual Positive Actual Positive Original Final Amounts (Negative)Original Final Amounts (Negative) Revenues: Intergovernmental revenues 407,000$ 407,000$ 421,378$ 14,378$ 369,000$ 369,000$ 380,530$ 11,530$ Interest income 900 900 1,154 254 1,100 1,100 555 (545) Total revenues 407,900 407,900 422,532 14,632 370,100 370,100 381,085 10,985 Expenditures: Public works 228,187 291,567 218,572 72,995 331,520 338,720 209,421 129,299 Capital outlay 185,000 199,163 120,891 78,272 15,000 23,736 - 23,736 Total expenditures 413,187 490,730 339,463 151,267 346,520 362,456 209,421 153,035 Excess (deficiency) of revenues over (under) expenditures (5,287) (82,830) 83,069 165,899 23,580 7,644 171,664 164,020 Other financing (uses): Transfers (out)- - - - (93,700) (93,700) (93,700) - (Deficiency) of revenues (under) other financing (uses)(5,287) (82,830) 83,069 165,899 (70,120) (86,056) 77,964 164,020 Fund balance appropriated 5,287 82,830 - 82,830$ 70,120 86,056 - 86,056$ Net change in fund balance - - 83,069 - - 77,964 Fund balances, beginning - - 445,764 - - 214,595 Fund balances, ending -$ -$ 528,833$ -$ -$ 292,559$ Budgeted Amounts Budgeted Amounts Special Revenue Funds MIAMI SHORES VILLAGE, FLORIDA SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES-BUDGET AND ACTUAL NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2016 Transporation Surtax Local Option Gas Tax 93 Variance with Variance with Final Budget Final Budget Actual Positive Actual Positive Original Final Amounts (Negative)Original Final Amounts (Negative) Revenues: Property taxes 469,050$ 469,050$ 477,013$ 7,963$ -$ -$ -$ -$ Interest income 2,500 2,500 2,929 429 - - 1,316 1,316 Total revenues 471,550 471,550 479,942 8,392 - - 1,316 1,316 Expenditures: General government 8,000 8,000 5,000 3,000 - - - - Capital outlay - - - - 827,296 1,730,798 944,611 786,187 Debt service: Principal 692,300 692,300 674,079 18,221 - - - - Interest 151,750 151,750 151,794 (44) - - - - Total expenditures 852,050 852,050 830,873 21,177 827,296 1,730,798 944,611 786,187 (Deficiency) of revenues (under) expenditures (380,500) (380,500) (350,931) 29,569 (827,296) (1,730,798) (943,295) 787,503 Other financing sources: Transfers in 380,500 380,500 380,500 - 827,296 1,514,050 1,164,050 (350,000) Excess (deficiency) of revenues over (under) expenditures and other financing - - 29,569 29,569 - (216,748) 220,755 437,503 Fund balance appropriated - - - -$ - 216,748 - 216,748$ Net change in fund balance - - 29,569 - - 220,755 Fund balances, beginning - - 1,127,918 - - 523,484 Fund balances, ending -$ -$ 1,157,487$ -$ -$ 744,239$ Budgeted Amounts Budgeted Amounts MIAMI SHORES VILLAGE, FLORIDA SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES-BUDGET AND ACTUAL NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2016 Debt Service Fund Capital Improvement Fund 94 INTERNAL SERVICE FUNDS Internal service funds are used to account for the financing of goods or services provided by one department to other departments of the Village on a cost reimbursement basis. Risk Management Fund – This fund accounts for the accumulation and allocation of costs associated with insurance. Fleet Maintenance Fund – This fund accounts for all direct and indirect costs to maintain and operate the Village’s vehicles and equipment fleet. Risk Fleet Management Maintenance Fund Fund Total ASSETS Current assets: Cash and cash equivalents 763,014$ 1,548,265$ 2,311,279$ Accounts receivable - net 165,547 - 165,547 Inventories - 51,953 51,953 Prepaid items 164,983 - 164,983 Total current assets 1,093,544 1,600,218 2,693,762 Capital assets: Capital assets not being depreciated - 7,127 7,127 Capital assets being depreciated, net - 1,911,151 1,911,151 Total noncurrent assets - 1,918,278 1,918,278 Total assets 1,093,544 3,518,496 4,612,040 DEFERRED OUTLOWS OF RESOURCES Pension - 60,783 60,783 LIABILITIES Current liabilities: Accounts payable and accrued liabilities 9,921 57,810 67,731 Compensated absences - 5,495 5,495 Total current liabilities 9,921 63,305 73,226 Noncurrent liabilities: Compensated absences - 16,486 16,486 Net pension liability - 128,343 128,343 Claims payable 340,000 - 340,000 Total noncurrent liabilities 340,000 144,829 484,829 Total liabilities 349,921 208,134 558,055 DEFERRED INFLOWS OF RESOURCES Pension - 95 95 NET POSITION Net investment in capital assets - 1,918,278 1,918,278 Unrestricted 743,623 1,452,772 2,196,395 Total net position 743,623$ 3,371,050$ 4,114,673$ -$ -$ -$ MIAMI SHORES VILLAGE, FLORIDA COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS SEPTEMBER 30, 2017 95 Risk Fleet Management Maintenance Fund Fund Total Revenues: Charges for services 778,999$ 1,152,144$ 1,931,143$ Operating expenses: Administrative and general 66,199 671,885 738,084 Personnel expenses - 235,435 235,435 Depreciation - 236,420 236,420 Insurance premiums and claims 713,173 - 713,173 Total operating expenses 779,372 1,143,740 1,923,112 Operating income (373) 8,404 8,031 Non-operating revenues: Interest income 1,854 3,466 5,320 Total non-operating revenues 1,854 3,466 5,320 Income before transfers and contributions 1,481 11,870 13,351 Transfers in - - - Transfers out - - - Contributions - - - Change in net position 1,481 11,870 13,351 Net position, beginning 742,142 3,359,180 4,101,322 Net position, ending 743,623$ 3,371,050$ 4,114,673$ MIAMI SHORES VILLAGE, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2017 96 Risk Fleet Management Maintenance Fund Fund Total Cash flows from operating activities: Cash received from customers, governments and other funds 815,254$ 1,152,144$ 1,967,398$ Cash paid to suppliers (769,156) (643,826) (1,412,982) Cash paid to employees - (215,614) (215,614) Net cash provided by (used in) operating activities 46,098 292,704 338,802 Cash flows from non-capital financing activities: Transfers out - - - Net cash (used in) non-capital financing activities - - - Cash flows from capital related financing activities: Acquisition and construction of capital assets - (118,089) (118,089) Capital contributions - - - Net cash (used in) capital and related financing activities - (118,089) (118,089) Cash flows from investing activities: Interest and other income 1,854 3,466 5,320 Net cash provided by investing activities 1,854 3,466 5,320 Net increase (decrease) in cash and cash equivalents 47,952 178,081 226,033 Cash and cash equivalents, October 1 715,062 1,370,184 2,085,246 Cash and cash equivalents, September 30 763,014$ 1,548,265$ 2,311,279$ Reconciliation of operating income to net cash provided by (used in) operating activities: Operating income (373)$ 8,404$ 8,031$ Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation - 236,420 236,420 Change in assets and liabilities: (Increase) decrease in: Accounts receivable 36,255 - 36,255 Inventories - (5,034) (5,034) Prepaids 1,887 - 1,887 Deferred outflows of resources for pension - (4,255) (4,255) Increase (decrease) in: Accounts payable and accrued liabilities 8,329 33,093 41,422 Compensated absences - 4,902 4,902 Net Pension Liability - 19,255 19,255 Deferred inflows of resources for pension - (81) (81) Total adjustments 46,471 284,300 330,771 Net cash provided by (used in) operating activities 46,098$ 292,704$ 338,802$ MIAMI SHORES VILLAGE, FLORIDA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2017 97 FIDUCIARY FUNDS These funds account for assets held by the Village in a trustee capacity or as an agent for employees. Pension Trust Funds: Police Officers Retirement System – To account for the accumulation of resources for pension benefit payments to police officers who have retired from Miami Shores Village. General Employees Retirement System – To account for the accumulation of resources for pension benefit payments to employees, other than police, who have retired from Miami Shores Village. Agency Fund: Police Insurance Trust Fund – To accumulate resources on behalf of police personnel to partially cover retirement health insurance. General Employee's Police Pension Pension Trust Trust Total ASSETS Cash and cash equivalents 215,948$ 715,624$ 931,572$ Receivables: Due from GE pension - 1,514 1,514 Accrued interest and dividends 23,700 42,577 66,277 Total receivables 23,700 44,091 67,791 Investments, at fair value U.S. Government securities 1,496,303 2,165,519 3,661,822 Mutual funds - equity 7,025,876 11,897,347 18,923,223 Common stocks 2,170,256 3,733,197 5,903,453 Mortgage backed securities 1,095,836 2,202,644 3,298,480 Municipal bonds 30,672 53,676 84,348 Corporate bonds 1,640,247 3,090,432 4,730,679 Foreign bonds 90,320 178,628 268,948 Total investments 13,549,510 23,321,443 36,870,953 Total assets 13,789,158 24,081,158 37,870,316 LIABILITIES Due to Police pension 1,514 - 1,514 Total liabilities 1,514 - 1,514 NET POSITION Net position restricted for pensions 13,787,644$ 24,081,158$ 37,868,802$ MIAMI SHORES VILLAGE, FLORIDA COMBINING STATEMENT OF FIDUCIARY NET POSITION PENSION TRUST FUNDS SEPTEMBER 30, 2017 (Unaudited) 98 General Employee's Police Pension Pension Trust Trust Total ADDITIONS Contributions: Employer 443,102$ 1,105,854$ 1,548,956$ Employees 186,555 210,630 397,185 State of Florida - 100,575 100,575 Total contributions 629,657 1,417,059 2,046,716 Investment income: Unrealized gains 862,446 1,474,005 2,336,451 Realized gains 61,944 56,615 118,559 Interest and dividend income 668,472 1,046,094 1,714,566 Total investment 1,592,862 2,576,714 4,169,576 Less investment expenses (60,949) (80,717) (141,666) Net investment income 1,531,913 2,495,997 4,027,910 Total additions 2,161,570 3,913,056 6,074,626 DEDUCTIONS Benefits paid 630,350 950,094 1,580,444 Administrative expenses 42,936 62,709 105,645 Total deductions 673,286 1,012,803 1,686,089 Net increase 1,488,284 2,900,253 4,388,537 Net position restricted for pensions Beginning of year 12,299,360 21,180,905 33,480,265 End of year 13,787,644$ 24,081,158$ 37,868,802$ MIAMI SHORES VILLAGE, FLORIDA COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION PENSION TRUST FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2017 (Unaudited) 99 Balance Balance September 30, September 30, 2016 Additions Deductions 2017 ASSETS Cash and cash equivalents 179,739$ 6,941$ -$ 186,680$ LIABILITIES Other liabilities 179,739$ 6,941$ -$ 186,680$ MIAMI SHORES VILLAGE, FLORIDA STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2017 POLICE INSURANCE TRUST AGENCY FUND 100 STATISTICAL SECTION MIAMI SHORES VILLAGE, FLORIDA STATISTICAL SECTION This part of the Miami Shore Village’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the Village’s overall financial health. Contents Page Financial Trends 101-104 These schedules contain trend information to help the reader understand how the Village’s financial performance and well-being have changed over time. Revenue Capacity 105-109 These schedules contain information to help the reader assess the Village’s most significant local revenue source, the property tax. Debt Capacity 110-113 These schedules contain information to help the reader assess the affordability of the Village’s current levels of outstanding debt and the Village’s ability to issue additional debt in future. Demographic and Economic Information 114 These schedules offer demographic and economic indicators to help the reader understand the environment within which the Village’s financial activities take place. Operating Information 115-116 These schedules contain service and infrastructure data to help the reader understand how the information in the Village’s financial report relates to the services the Village provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant years. 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 Governmental activities: Invested in capital assets, net of related debt 15,914,887$ 15,398,737$ 14,140,442$ 14,460,317$ 13,445,077$ 13,160,184$ 12,279,776$ 11,507,713$ 12,276,631$ 11,255,620$ Restricted 6,051,262 5,710,324 5,953,557 5,521,292 6,042,082 5,834,992 3,975,983 3,509,136 3,025,933 4,112,366 Unrestricted 1,622,254 3,452,368 3,737,341 9,971,992 9,916,183 9,592,734 9,904,824 9,350,904 8,901,635 6,373,568 Total governmental activities net assets 23,588,403 24,561,429 23,831,340 29,953,601 29,403,342 28,587,910 26,160,583 24,367,753 24,204,199 21,741,554 Business-type activities: Invested in capital assets, net of related debt 3,257,609 3,123,374 2,785,010 2,195,243 2,252,711 1,921,615 1,924,061 2,043,795 558,671 624,398 Restricted 3,772,478 - - - - - Unrestricted 1,998,469 1,933,358 2,832,838 2,677,461 2,598,838 2,688,382 2,385,331 2,032,852 1,578,649 1,132,430 Total business-type activities net assets 9,028,556 5,056,732 5,617,848 4,872,704 4,851,549 4,609,997 4,309,392 4,076,647 2,137,320 1,756,828 Primary government: Invested in capital assets, net of related debt 19,172,496 18,522,111 16,925,452 16,655,560 15,697,788 15,081,799 14,203,837 13,551,508 12,835,302 11,880,018 Restricted 9,823,740 5,710,324 5,953,557 5,521,292 6,042,082 5,834,992 3,975,983 3,509,136 3,025,933 4,112,366 Unrestricted 3,620,723 5,385,726 6,570,179 12,649,453 12,515,021 12,281,116 12,290,155 11,383,756 10,480,284 7,505,998 Total primary government net assets 32,616,959$ 29,618,161$ 29,449,188$ 34,826,305$ 34,254,891$ 33,197,907$ 30,469,975$ 28,444,400$ 26,341,519$ 23,498,382$ (accrual basis of accounting) MIAMI SHORES VILLAGE, FLORIDA NET ASSETS BY COMPONENT FOR THE LAST TEN FISCAL YEARS Fiscal Year 101 20 1 7 20 1 6 20 1 5 20 1 4 20 1 3 20 1 2 20 1 1 20 1 0 20092008 Go v e r n m e n t a l a c t i v i t i e s : G e n e r a l g o v e r n m e n t 3 , 4 7 8 , 1 9 1 $ 3 , 3 7 7 , 2 1 8 $ 3 , 1 5 9 , 8 2 8 $ 2 , 7 6 0 , 9 0 1 $ 2 , 4 1 8 , 9 3 9 $ 2 , 3 3 6 , 7 6 3 $ 2 , 3 9 6 , 4 4 6 $ 2 , 3 9 0 , 7 1 9 $ 2 , 4 8 9 , 4 2 6 $ 2,325,019$ P u b l i c s a f e t y 7 , 0 9 4 , 5 9 0 6 , 4 6 0 , 5 8 3 6 , 0 8 8 , 6 0 8 6 , 2 0 6 , 3 4 9 6 , 4 2 5 , 4 3 2 5 , 5 0 9 , 5 0 8 5 , 5 9 6 , 6 9 2 5 , 2 1 6 , 7 2 4 5 , 0 5 6 , 5 7 3 4,649,985 P u b l i c w o r k s 3 , 8 6 0 , 6 2 4 2 , 5 0 2 , 7 9 9 3 , 4 9 2 , 1 3 6 2 , 2 3 9 , 0 5 6 2 , 3 8 5 , 3 3 8 2 , 3 4 6 , 5 7 5 1 , 9 4 9 , 9 6 0 2 , 2 0 1 , 6 6 7 2 , 2 3 7 , 9 6 2 2,407,032 C u l t u r e a n d r e c r e a t i o n 3 , 0 3 6 , 3 5 4 3 , 1 4 5 , 2 5 5 2 , 9 7 6 , 1 8 0 2 , 9 4 6 , 1 6 7 2 , 8 1 6 , 8 8 2 2 , 5 8 3 , 6 8 8 2 , 4 9 8 , 4 0 8 2 , 3 4 1 , 3 1 0 2 , 4 1 7 , 2 3 2 2,321,392 I n t e r e s t o n d e b t 15 1 , 7 9 4 1 6 8 , 8 1 1 2 7 2 , 3 7 4 2 8 3 , 8 4 0 4 3 2 , 9 9 7 4 2 5 , 3 5 5 4 4 3 , 5 4 2 4 6 5 , 6 7 2 486,658 500,045 To t a l gov e r n m e n t a l a c t i v i t i e s e x p e n s e s 17 , 6 2 1 , 5 5 3 1 5 , 6 5 4 , 6 6 6 1 5 , 9 8 9 , 1 2 6 1 4 , 4 3 6 , 3 1 3 1 4 , 4 7 9 , 5 8 8 1 3 , 2 0 1 , 8 8 9 1 2 , 8 8 5 , 0 4 8 1 2 , 6 1 6 , 0 9 2 12,687,851 12,203,473 Bu s i n e s s - t y p e a c t i v i t i e s : S a n i t a t i o n 2 , 4 6 4 , 7 6 2 2 , 5 2 8 , 6 6 6 2 , 2 2 3 , 6 9 5 2 , 2 9 4 , 3 9 9 2 , 1 1 9 , 7 2 3 2 , 2 0 8 , 5 8 5 2 , 2 5 7 , 2 8 5 2 , 3 8 2 , 8 9 3 2 , 2 6 2 , 4 4 6 2,260,374 S t o r m w a t e r 2 2 4 , 6 9 5 2 3 7 , 7 1 2 1 9 3 , 1 7 4 1 6 5 , 5 3 7 1 8 0 , 7 0 2 1 7 5 , 7 6 1 1 9 0 , 9 9 2 2 0 6 , 3 0 0 1 6 0 , 8 0 8 133,913 W a t e r & S e w e r 10 5 , 7 0 7 6 2 , 2 0 4 - - - - - - - - To t a l b u s i n e s s - t ype a c t i v i t i e s e x p e n s e s 2, 7 9 5 , 1 6 4 2 , 8 2 8 , 5 8 2 2 , 4 1 6 , 8 6 9 2 , 4 5 9 , 9 3 6 2 , 3 0 0 , 4 2 5 2 , 3 8 4 , 3 4 6 2 , 4 4 8 , 2 7 7 2 , 5 8 9 , 1 9 3 2,423,254 2,394,287 To t a l p r i m a r y gov e r n m e n t e x p e n s e s 20 , 4 1 6 , 7 1 7 1 8 , 4 8 3 , 2 4 8 1 8 , 4 0 5 , 9 9 5 1 6 , 8 9 6 , 2 4 9 1 6 , 7 8 0 , 0 1 3 1 5 , 5 8 6 , 2 3 5 1 5 , 3 3 3 , 3 2 5 1 5 , 2 0 5 , 2 8 5 15,111,105 14,597,760 Pr o g r a m r e v e n u e s : Go v e r n m e n t a l a c t i v i t i e s : C h a r g e s f o r s e r v i c e s : G e n e r a l g o v e r n m e n t 1 , 2 1 1 , 6 5 6 1 , 3 6 6 , 8 3 2 1 , 0 0 5 , 7 6 2 1 , 0 6 3 , 0 9 5 8 4 1 , 5 7 2 1 , 0 6 9 , 1 3 5 1 , 1 7 7 , 0 4 7 7 4 7 , 3 5 3 9 1 4 , 0 6 2 128,389 P u b l i c s a f e t y 1 , 1 1 6 , 1 6 0 7 9 0 , 5 9 8 1 , 0 2 7 , 5 5 0 1 , 0 8 7 , 0 5 5 1 , 5 5 3 , 1 6 8 2 , 3 2 6 , 3 7 6 7 7 7 , 6 5 5 7 3 3 , 9 2 6 7 4 6 , 0 5 5 424,353 P u b l i c w o r k s 6 2 , 1 4 4 1 9 4 , 3 4 9 2 0 0 , 9 7 7 1 1 7 , 8 1 5 8 4 3 , 2 1 8 7 2 7 , 1 6 0 8 1 4 , 6 0 0 7 5 0 , 1 4 5 1 , 0 8 2 , 6 6 7 644,197 C u l t u r e a n d r e c r e a t i o n 1 , 3 5 6 , 5 6 5 1 , 3 8 8 , 9 0 6 1 , 5 6 8 , 8 4 4 1 , 4 3 6 , 9 9 9 1 , 3 7 5 , 5 0 6 1 , 2 9 3 , 7 8 8 1 , 1 1 7 , 1 6 0 1 , 0 7 9 , 7 2 7 9 6 5 , 5 4 1 854,747 O p e r a t i n g g r a n t s a n d c o n t r i b u t i o n s 8 0 1 , 9 0 8 7 9 8 , 3 1 2 8 1 6 , 3 8 0 7 8 4 , 4 3 0 8 7 , 3 6 8 1 7 0 , 2 3 4 2 1 7 , 3 0 3 9 5 , 6 9 2 - - C a p i t a l gra n t s a n d c o n t r i b u t i o n s - - 3 5 , 5 6 4 4 7 4 , 0 7 9 3 5 , 5 6 4 4 7 , 4 4 7 6 5 , 9 2 1 1 7 1 , 5 4 9 - - To t a l gov e r n m e n t a l a c t i v i t i e s p r o gra m r e v e n u e s 4, 5 4 8 , 4 3 3 4 , 5 3 8 , 9 9 7 4 , 6 5 5 , 0 7 7 4 , 9 6 3 , 4 7 3 4 , 7 3 6 , 3 9 6 5 , 6 3 4 , 1 4 0 4 , 1 6 9 , 6 8 6 3 , 5 7 8 , 3 9 2 3,708,325 2,051,686 Bu s i n e s s - t y p e a c t i v i t i e s : C h a r g e s f o r s e r v i c e s : S a n i t a t i o n 2 , 6 2 3 , 0 1 0 2 , 6 3 3 , 0 1 3 2 , 6 3 9 , 1 0 6 2 , 6 4 1 , 2 8 4 2 , 6 6 7 , 8 4 3 2 , 7 6 5 , 7 7 5 2 , 6 6 5 , 0 4 1 2 , 8 8 6 , 1 0 7 2 , 7 8 1 , 7 0 0 2,729,793 S t o r m w a t e r 2 4 4 , 9 3 6 2 4 5 , 2 6 9 2 4 4 , 8 0 5 2 4 4 , 1 0 7 2 4 8 , 1 3 2 2 5 2 , 4 2 0 2 4 8 , 6 6 8 2 4 7 , 3 4 9 2 2 8 , 3 9 3 225,719 W a t e r & S e w e r 7 0 , 1 4 3 1 3 6 , 8 5 5 - - - - - - - C a p i t a l gra n t s a n d c o n t r i b u t i o n s 55 6 , 3 8 2 - 6 7 2 , 3 8 1 - - - - - - - To t a l b u s i n e s s - t ype a c t i v i t i e s p r o gra m r e v e n u e s 3, 4 9 4 , 4 7 1 3 , 0 1 5 , 1 3 7 3 , 5 5 6 , 2 9 2 2 , 8 8 5 , 3 9 1 2 , 9 1 5 , 9 7 5 3 , 0 1 8 , 1 9 5 2 , 9 1 3 , 7 0 9 3 , 1 3 3 , 4 5 6 3,010,093 2,955,512 To t a l p r i m a r y gov e r n m e n t p r o gra m r e v e n u e 8, 0 4 2 , 9 0 4 $ 7 , 5 5 4 , 1 3 4 $ 8 , 2 1 1 , 3 6 9 $ 7 , 8 4 8 , 8 6 4 $ 7 , 6 5 2 , 3 7 1 $ 8 , 6 5 2 , 3 3 5 $ 7 , 0 8 3 , 3 9 5 $ 6 , 7 1 1 , 8 4 8 $ 6,718,418$ 5,007,198$ Fi s c a l Y e a r MI A M I S H O R E S V I L L A G E , F L O R I D A CH A N G E S I N N E T A S S E T S FO R T H E L A S T T E N F I S C A L Y E A R S 10 2 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 Net (expenses) revenue: Governmental activities (13,073,120)$ (11,115,669)$ (11,334,049)$ (9,472,840)$ (9,516,115)$ (7,567,750)$ (8,715,362)$ (9,037,699)$ (8,479,225)$ (9,194,005)$ Business-type activities 699,307 186,555 1,139,423 425,455 615,550 633,849 465,432 544,263 590,839 561,225 (12,373,813) (10,929,114) (10,194,626) (9,047,385) (8,900,565) (6,933,901) (8,249,930) (8,493,436) (7,888,386) (8,632,780) General revenues and other changes in net assets: Governmental activities: Property taxes 7,923,699 7,326,125 6,893,572 6,406,843 6,255,087 6,078,085 6,143,806 6,583,883 7,275,746 7,224,338 Public services tax 2,104,726 2,141,094 2,199,772 2,214,451 2,045,767 2,098,267 2,137,473 2,222,743 2,113,032 3,076,198 Intergovernmental 1,109,035 1,092,365 1,027,237 1,002,183 929,762 918,034 936,215 797,773 789,922 895,188 Miscellaneous 549,075 507,592 827,991 469,614 415,330 493,243 1,019,320 950,040 447,741 562,941 Interest earning - unrestricted 60,740 26,210 29,568 20,670 32,015 61,071 36,378 38,978 100,429 242,563 Gain on sale of capital assets 523,164 - - - - - - - Transfers 352,819 400,000 400,000 395,000 395,000 335,000 235,000 (1,392,164) 215,000 215,000 Total governmental activities 12,100,094 11,493,386 11,901,304 10,508,761 10,072,961 9,983,700 10,508,192 9,201,253 10,941,870 12,216,228 Business-type activities: Investment earnings 10,623 4,701 5,721 5,708 5,994 1,756 2,313 2,900 4,653 14,451 Other general revenues - - - - - Transfers (352,819) (400,000) (400,000) (395,000) (395,000) (335,000) (235,000) 1,392,164 (215,000) (215,000) Total business-type activities (342,196) (395,299) (394,279) (389,292) (389,006) (333,244) (232,687) 1,395,064 (210,347) (200,549) Total primary government 11,757,898 11,098,087 11,507,025 10,119,469 9,683,955 9,650,456 10,275,505 10,596,317 10,731,523 12,015,679 Change in net assets: Governmental activities (973,026) 377,717 567,255 1,035,921 556,846 2,415,950 1,792,830 163,554 2,462,645 3,022,223 Business-type activities 357,111 (208,744) 745,144 36,163 226,544 300,605 232,745 1,939,327 380,492 360,676 Total primary government (615,915)$ 168,973$ 1,312,399$ 1,072,084$ 783,390$ 2,716,555$ 2,025,575$ 2,102,881$ 2,843,137$ 3,382,899$ Fiscal Year MIAMI SHORES VILLAGE, FLORIDA CHANGES IN NET ASSETS (Continued) FOR THE LAST TEN FISCAL YEARS 103 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 General fund: Reserved -$ -$ -$ -$ -$ 134,569$ 80,052$ 71,923$ Unreserved - - - - - 6,391,651 5,014,190 5,449,842 Nonspendable *4,506 7,786 3,741 11,698 32,305 33,480 1,885 - - - Restricted *- - - - - - Committed *31,562 31,562 45,947 77,512 63,109 - - - Assigned *- - - - - Unassigned *7,450,908 7,957,802 8,553,593 7,923,177 7,884,961 7,846,925 7,609,716 - - - Total general fund 7,455,414$ 7,965,588$ 8,588,896$ 7,966,437$ 7,963,213$ 7,957,917$ 7,674,710$ 6,526,220$ 5,094,242$ 5,521,765$ All other governmental funds: Reserved -$ -$ -$ -$ -$ 5,247,645$ 5,449,479$ 4,300,256$ Unreserved reported in: Special revenue funds - - - - - 201,327 348,194 229,152 Capital project funds - - - - - 566,251 603,735 551,837 Nonspendable *5,174 - 59,270 61,225 - - - Restricted *6,046,087 5,710,324 5,953,557 5,731,494 6,042,082 5,798,976 3,975,983 - - - Committed *768,966 581,630 578,434 649,494 611,766 955,728 1,748,148 - - - Assigned *- - - - - - - - - - Unassigned *(1,079,522) - - - - - - - - - Total all other governmental funds 5,740,705$ 6,291,954$ 6,531,991$ 6,380,988$ 6,653,848$ 6,813,974$ 5,785,356$ 6,015,223$ 6,401,408$ 5,081,245$ *During FY2011 the Village implemented the new fund balance classifications. Fiscal Year MIAMI SHORES VILLAGE, FLORIDA FUND BALANCES FOR GOVERNMENTAL FUNDS FOR THE LAST TEN FISCAL YEARS 104 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 Revenues: Taxes 7,923,699$ 7,326,125$ 6,893,572$ 6,406,843$ 6,255,087$ 6,078,085$ 6,143,806$ 6,583,883$ 7,275,746$ 7,224,338$ Public services taxes 2,104,726 2,141,094 2,199,772 2,214,451 2,799,637 2,795,688 2,851,593 2,874,645 2,906,861 2,925,431 Licenses and permits 1,212,029 1,257,228 1,237,435 1,018,301 841,572 914,833 1,052,626 658,833 671,674 682,951 Intergovernmental 1,910,943 1,890,677 1,879,181 2,219,683 1,052,694 1,135,715 1,219,439 1,065,014 1,290,223 1,837,400 Charges for services 1,829,756 1,732,617 2,059,389 1,980,381 1,941,090 1,734,095 1,542,432 1,460,451 1,310,257 1,101,300 Fines and forfeitures 696,709 517,648 613,743 629,524 858,753 1,955,837 423,905 444,944 495,503 267,435 Miscellaneous 549,075 507,592 827,991 555,417 415,330 493,243 986,649 950,040 447,741 529,163 Investment earnings 55,420 24,149 27,058 18,166 32,015 59,289 31,796 35,153 94,300 227,663 Contributions - - - - - - - - - 15,570 Total revenues 16,282,357 15,397,130 15,738,141 15,042,766 14,196,178 15,166,785 14,252,246 14,072,963 14,492,305 14,811,251 Expenditures: General government 3,293,951 3,045,728 3,073,851 2,627,454 2,500,274 2,291,190 2,391,556 2,235,855 2,284,775 2,131,535 Public safety 6,650,384 6,309,748 6,134,782 6,285,671 6,111,942 5,536,160 5,399,589 5,022,542 5,050,239 4,659,900 Public works 3,073,272 1,990,600 1,823,936 1,761,225 1,662,089 1,684,822 1,540,755 1,625,085 1,753,100 1,973,446 Culture and recreation 2,595,807 2,720,207 2,580,527 2,546,688 2,428,789 2,209,660 2,161,213 2,076,176 2,169,671 2,139,027 Capital outlay 1,215,777 1,927,324 1,526,136 1,613,488 1,115,631 1,449,486 1,173,423 1,398,405 1,651,286 1,015,184 Debt services: Principal 674,079 657,889 635,837 589,036 4,362,580 487,690 465,351 448,297 431,763 415,130 Interest 151,794 168,811 272,374 283,840 432,997 421,599 436,736 455,810 473,831 495,997 Total expenditures 17,655,064 16,820,307 16,047,443 15,707,402 18,614,302 14,080,607 13,568,623 13,262,170 13,814,665 12,830,219 (Deficiency) excesss of revenues over expenditures (1,372,707) (1,423,177) (309,302) (664,636) (4,418,124) 1,086,178 683,623 810,793 677,640 1,981,032 Other financing sources (uses): Proceeds from long-term debt 4,017,600 3,923,000 - Payment to refunding agent (3,890,000) - Sales of capital assets 523,164 Transfer in 4,487,608 4,474,312 3,269,070 3,264,673 3,028,480 2,983,374 3,331,180 3,283,369 6,066,843 3,308,918 Transfer out (4,176,324) (4,012,312) (2,837,070) (2,869,673) (2,688,180) (2,757,627) (3,096,180) (3,048,369) (5,851,843) (3,173,918) Total other financing sources (uses)311,284 462,000 1,082,764 395,000 4,263,300 225,747 235,000 235,000 215,000 135,000 Net change in fund balances (1,061,423)$ (961,177)$ 773,462$ (269,636)$ (154,824)$ 1,311,925$ 918,623$ 1,045,793$ 892,640$ 2,116,032$ Debt service as a percentage of noncapital expenditures 5.0%5.6%6.3%6.2%27.4%7.2%7.3%7.6%7.4%7.7% Fiscal Year MIAMI SHORES VILLAGE, FLORIDA CHANGES IN FUND BALANCES FOR GOVERNMENTAL FUNDS FOR THE LAST TEN FISCAL YEARS 105 Ad-Valorem Taxes Public Licenses Charges Fines and Interest Fiscal Year General Purpose Service Taxes and Permits Intergovernmental for Services Forfeitures Miscellaneous Income Total 2008 6,605,878 2,222,806 682,951 895,188 1,101,300 267,435 163,325 134,903 12,073,786 2009 6,699,188 2,263,799 671,674 789,921 1,310,257 495,503 161,227 30,488 12,422,057 2010 6,050,360 2,222,743 658,833 797,773 1,460,451 346,463 705,358 19,633 12,261,614 2011 5,614,746 2,137,473 1,052,626 912,421 1,542,432 329,906 633,318 12,859 12,235,781 2012 5,524,395 2,098,267 914,833 892,474 1,734,095 320,926 361,318 42,552 11,888,860 2013 5,719,016 2,045,767 841,572 964,755 1,941,090 609,029 276,811 18,746 12,416,786 2014 5,894,716 2,214,451 1,018,301 1,002,183 1,980,381 492,285 382,149 5,213 12,989,679 2015 6,383,317 2,199,772 1,237,435 1,062,801 2,059,389 499,777 449,445 14,281 13,906,217 2016 6,864,998 2,141,094 1,257,228 1,092,365 1,732,617 352,026 357,494 14,492 13,812,314 2017 7,446,686 2,104,726 1,212,029 1,102,765 1,829,756 554,068 371,309 42,023 14,663,362 Revenues included in the General and Excise Tax Funds General Governmental and Excise Tax Revenues By Source Last Ten Fiscal Years (accrual basis of accounting) MIAMI SHORES VILLAGE, FLORIDA 106 Fiscal Year Total Total Total Ended Personal Centrally Assessed Direct Tax Market September 30,Property Property Assessed Value Rate Value 2008 939,127,227 22,814,441 1,317,506 963,259,174 7.8164 2,214,199,534 2009 902,193,025 18,873,700 1,612,487 922,679,212 8.2929 2,047,175,031 2010 778,813,734 17,201,636 2,133,438 798,148,808 8.7059 1,524,554,727 2011 703,899,345 15,775,621 1,498,857 721,173,823 8.7762 1,283,953,769 2012 698,738,442 16,953,525 1,544,711 717,236,678 8.7855 1,243,667,012 2013 727,955,201 17,910,658 1,530,814 747,396,673 8.7500 1,284,277,736 2014 744,161,594 18,898,889 1,071,836 764,132,319 8.6949 1,294,780,508 2015 808,067,935 20,443,472 1,281,491 829,792,898 8.6392 1,483,377,513 2016 880,336,926 19,782,931 1,509,219 901,629,076 8.4289 1,692,889,026 2017 953,506,766 19,610,810 1,678,470 974,796,046 8.4054 1,879,247,396 Source: Miami-Dade County Property Appraisal Office. Note: Property in the Village is reassessed each year. State law requires the Property Appraiser to appraise property at 100% of market value. The Florida Constitution was amended, effective January 1, 1995, to limit annual increases in assessed value of property with homestead exemption to 3 percent per year or the amount of the Consumer Price index, whichever is less. The increase is not automatic since no assessed value shall exceed market value. Tax rates are per $1,000 of assessed value. MIAMI SHORES VILLAGE, FLORIDA ASSESSED VALUE AND ACTUAL VALUE OF TAXABLE PROPERTY FOR THE LAST TEN FISCAL YEARS 57.67% 56.17% 52.35% Assessed Value as a percentage 43.50% 45.07% of Market Value 51.87% 53.26% 58.20% 59.02% 55.94% 107 Fiscal Total Year Total Direct & Ended City Debt Direct County-Debt Overlapping September 30,Wide Service Rate Wide Service Fire Library School State Rates 2008 7.1400 0.6764 7.8164 5.0019 0.2850 2.2477 - 7.9480 0.6585 23.9575 2009 7.6351 0.6578 8.2929 5.2945 0.2850 2.2487 - 7.7970 0.6585 24.5766 2010 8.0000 0.7059 8.7059 5.3370 0.2850 2.2271 - 7.9950 0.6585 25.2085 2011 8.0000 0.7762 8.7762 5.9275 0.2850 2.5953 - 8.2490 0.6585 26.4915 2012 8.0000 0.7855 8.7855 4.8050 0.2850 2.4627 - 8.0050 0.9708 25.3140 2013 8.0000 0.7500 8.7500 4.7035 0.2850 2.4627 - 7.9980 0.9634 25.1626 2014 8.0000 0.6949 8.6949 4.7035 0.4220 2.4623 - 7.9770 0.9455 25.2052 2015 8.0000 0.6392 8.6392 4.6669 0.4500 2.4321 - 7.9740 0.9187 25.0809 2016 7.9000 0.5289 8.4289 4.6583 0.4586 2.4293 7.6120 0.8871 24.4742 2017 7.9000 0.5054 8.4054 4.6669 0.4000 2.4282 7.3220 0.8627 24.0852 (1)Overlapping rates are those of local and county governments that apply to property owners within the Village of Miami Shores. Additional information: Property tax rates are assessed per $1,000 of Taxable Assessed Valuation Tax rate limits: City 10.000 Mils County 10.000 Mils School 10.000 Mils State 10.000 Mils Source: Miami Dade County Finance Department, Tax Collector's Division Miami Shores Village County Special Districts MIAMI SHORES VILLAGE, FLORIDA PROPERTY TAX RATES DIRECT AND OVERLAPPING GOVERNMENTS (1) FOR THE LAST TEN FISCAL YEARS 108 Percentage Percentage Taxable of Total City Taxable of Total City Assessed Taxable Assessed Taxable Taxpayer Value Rank Value Value Rank Value Northern Trust Bank (Publix)8,245,000$ 1 0.85%9,476,894 1 0.98% Shore Square Properties, LLC 8,237,298 2 0.85%- Tropical Chevrolet, Inc.8,143,065 3 0.84%7,155,498 3 0.74% Florida Power & Light Co.7,115,648 4 0.73%5,582,682 4 0.58% Carol Invest USA, Inc 4,693,972 5 0.48%- Harbor Golden, Inc 4,400,000 6 0.45%- 88 Biscayne Management LLC 3,637,229 7 0.37%- Frederic Puren 3,535,361 8 0.36%- Bay Construction & Development LLC 3,491,989 9 0.36%- DVS LLC 3,322,068 10 0.34%- City National Bank of Florida - 8,649,044 2 0.90% Ramiro del Amo - 4,067,204 5 0.42% Camp Biscayne at the Grove - 3,591,813 6 0.37% Bellsouth Telecommunications, Inc - 3,018,536 7 0.31% Bujolo, Inc - 2,921,115 8 0.30% Jureen Vachefi - 2,597,354 9 0.27% Kenneth S Beck - - 2,567,305 10 0.27% Total 54,821,630$ 5.62%49,627,445$ 5.15% Source: Miami-Dade County Property Appraiser Office 2017 2008 MIAMI SHORES VILLAGE, FLORIDA PRINCIPAL PROPERTY TAX PAYERS CURRENT YEAR AND TEN YEARS AGO 109 Fiscal Year Total Levied Collections Ended for the Percentage in Subsequent Percentage September 30,Fiscal Year Amount of Levy Years Amount of Levy 2008 6,877,671 6,396,440 93.0%209,438 6,605,878 96.0% 2009 7,044,748 6,474,514 91.9%224,674 6,699,188 95.1% 2010 6,385,190 5,903,212 92.5%147,128 6,050,340 94.8% 2011 5,769,391 5,474,167 94.9%140,579 5,614,746 97.3% 2012 5,756,124 5,658,135 98.3%60,881 5,719,016 99.4% 2013 5,998,630 5,672,080 94.6%46,936 5,719,016 95.3% 2014 6,113,059 5,894,716 96.4%98 5,894,814 96.4% 2015 6,638,343 6,383,223 96.2%94 6,383,317 96.2% 2016 7,122,870 6,803,657 95.5%61,341 6,864,998 96.4% 2017 7,700,889 7,446,395 96.7%291 7,446,686 96.7% Source: Miami Shores Village Finance Department and Miami-Dade County Property Appraisers Office. Collected within the Fiscal Year of the Levy Total collections to Date MIAMI SHORES VILLAGE, FLORIDA OPERATING PROPERTY TAX LEVIES AND COLLECTIONS FOR THE LAST TEN FISCAL YEARS 110 Enterprise Percentage Fiscal of Actual Year General Taxable Percentage Ended Obligation Loan Revenue Value of of Personal September 30,Bonds Payable Bonds Total Property Income 2008 7,235,000 3,438,552 - 10,673,552 1.11%2.76% 2009 7,050,000 3,095,362 - 10,145,362 1.10%2.58% 2010 6,860,000 2,737,674 - 9,597,674 1.20%3.92% 2011 6,665,000 2,358,637 - 9,023,637 1.25%3.29% 2012 6,460,000 1,922,581 - 8,382,581 1.17%2.38% 2013 6,298,000 1,645,000 - 7,943,000 1.06%2.22% 2014 6,053,000 1,300,964 - 7,353,964 0.96%1.85% 2015 5,895,300 950,427 - 6,845,727 0.82%1.69% 2016 5,596,900 590,938 4,840,000 11,027,838 1.22%2.62% 2017 5,291,600 222,159 4,680,000 10,193,759 1.05%2.26% Governmental MIAMI SHORES VILLAGE, FLORIDA RATIOS OF OUTSTANDING DEBT BY TYPE FOR THE LAST TEN FISCAL YEARS 111 Percentage Amount Debt Applicable Applicable Governmental Unit Outstanding To City To City 701,809,370 Overlapping debt: Miami-Dade County, Florida (1)2,190,408$ 0.39%8,459$ Miami-Dade County Public Schools (2)920,008 0.34%3,172 Total overlapping debt 3,110,416$ 11,632 Miami Shores Village 5,514 100.00%5,514 Total direct and overlapping debt 3,115,930$ 17,146$ Sources: (1) Miami-Dade County, Finance Department - Bond Administration Division (2) The School Board of Miami-Dade County - Office of the Controller (3) The percentage of overlapping debt applicable is estimated using the taxable property value of the Village as compared to the taxable property value of the County and the School Board. MIAMI SHORES VILLAGE, FLORIDA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT AS OF SEPTEMBER 30, 2017 (in thousands) 112 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 Debt limit 92,188,005$ 84,566,008$ 77,083,990$ 70,360,232$ 68,441,667$ 65,491,549$ 65,452,382$ 72,954,881$ 72,117,382$ 92,267,921$ Total net debt applicable to limit 5,291,600 5,596,900 5,895,300 6,053,000 6,298,000 6,460,000 6,665,000 6,860,000 7,235,000 7,415,000 Legal debt margin 86,896,405$ 78,969,108$ 71,188,690$ 64,307,232$ 62,143,667$ 59,031,549$ 58,787,382$ 66,094,881$ 64,882,382$ 84,852,921$ Total net debt applicable to the limit as a percentage of debt limit 5.74%6.62%7.65%8.60%9.20%9.86%10.18%9.40%10.03%8.04% Legal debt margin calculation for fiscal year 2017: Assessed value 974,796,046$ Debt limit (10% of assessed value)97,479,605 Debt applicable to limit: Total bonded debt 10,193,759 Less: Revenue bonds (4,680,000) Installment loans (222,159) Total debt applicable to limitation 5,291,600 Debt limit 92,188,005$ MIAMI SHORES VILLAGE, FLORIDA LEGAL DEBT MARGIN INFORMATION FOR THE LAST TEN FISCAL YEARS Fiscal Year 113 Personal Per Income Capita Estimated (Thousand of Personal Unemployment Year Population (1)Dollars) Income (2)Rate (2) 2008 10,380 386,800 37,264 5.3% 2009 10,380 393,495 37,909 8.9% 2010 10,654 244,648 22,963 12.1% 2011 10,500 274,407 26,134 11.8% 2012 10,493 352,932 33,635 8.7% 2013 10,659 358,515 33,635 8.4% 2014 10,781 396,741 36,800 6.6% 2015 10,776 405,048 37,588 6.2% 2016 10,806 420,883 38,949 5.7% 2017 10,493 450,947 42,976 4.6% Sources: (1) State of Florida Department of Revenue (2) U. S. Census Bureau MIAMI SHORES VILLAGE, FLORIDA DEMOGRAPHIC AND ECONOMIC STATISTICS FOR THE LAST TEN CALENDAR YEARS 114 Percentage Percentage of Total County of Total County Employer Employees Rank Employment Employees Rank Employment Miami-Dade County Public Schools 33,477 1 3.02%50,000 1 4.47% Miami-Dade County, Florida 25,502 2 2.30%32,000 2 2.86% Federal Government 19,200 3 1.73%20,400 3 1.82% Florida State Government 17,100 4 1.54%17,000 4 1.52% University of Miami 12,818 5 1.16%9,874 8 0.88% Baptist Health Systems of South FL 11,353 6 1.03%10,826 6 0.97% American Airlines 11,031 7 1.00%9,000 9 0.80% Jackson Health System 9,797 8 0.88%10,500 7 0.94% City of Miami 3,997 9 0.36%- - 0.00% Florida International University 3,534 10 0.32%- - 0.00% Miami Dade Community College 6,500 10 0.58% Publix Super Markets 11,000 5 0.98% Total Civilian Labor Force Employment 1,107,441 1,118,568 Source: The Beacon Council, Miami Florida, Miami Business Profile 2017 2008 MIAMI SHORES VILLAGE, FLORIDA PRINCIPAL EMPLOYERS LOCATED IN MIAMI-DADE COUNTY CURRENT YEAR AND TEN YEARS AGO 115 Function/Program 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 General government: Administration: Full time 12 10 10 8 10 9 9 9 9 9 Part time 7 6 6 5 5 5 5 - - - Finance: Full time 6 6 5 5 5 5 5 5 4 4 Part time - - - - - - 1 1 1 Public works: Full time 44 43 39 43 41 40 40 47 45 44 Part time 1 1 1 - 1 - - 1 2 1 Culture and recreation: Recreation: Full time 13 15 13 12 12 13 13 13 11 12 Part time 63 67 63 72 51 30 30 51 56 48 Library: Full time 4 4 4 2 3 3 3 3 3 3 Part time 6 6 6 8 7 6 6 7 7 7 Public safety Police Full time 46 42 40 43 43 44 44 45 45 43 Part time 3 4 4 4 3 3 3 3 3 3 Total 205 204 191 202 181 158 158 185 186 175 Source: Village Finance Office MIAMI SHORES VILLAGE, FLORIDA VILLAGE EMPLOYEES BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Fiscal Year 116 COMPLIANCE SECTION 117 4649 Ponce de Leon Blvd I Suite 404 I Coral Gables, FL 33146 T: 305.662.7272 F: 305.662.4266 I CFLGCPA.COM INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Mayor and Members of the Village Council Miami Shores Village, Florida We have audited, in accordance with the 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, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Miami Shores Village, Florida (the “Village”), as of and for the fiscal year ended September 30, 2017, and the related notes to the financial statements, which collectively com prise the Village’s basic financial statements, and have issued our report thereon dated June 26, 2018. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Village’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Village’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Village’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Village’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of 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 or other matters that are required to be reported under Government Auditing Standards. 118 4649 Ponce de Leon Blvd I Suite 404 I Coral Gables, FL 33146 T: 305.662.7272 F: 305.662.4266 I CFLGCPA.COM Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Caballero Fierman Llerena & Garcia, LLP Caballero Fierman Llerena & Garcia, LLP Coral Gables, Florida June 26, 2018 119 4649 Ponce de Leon Blvd I Suite 404 I Coral Gables, FL 33146 T: 305.662.7272 F: 305.662.4266 I CFLGCPA.COM MANAGEMENT LETTER REQUIRED BY SECTION 10.550 OF THE RULES OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA Honorable Mayor and Members of the Village Council Miami Shores Village, Florida Report on the Financial Statements We have audited the basic financial statements of the Miami Shores Village, Florida (the “Village”), as of and for the fiscal year ended September 30, 2017, and have issued our report thereon dated June 26, 2018. Auditors’ Responsibility We conducted our audit 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, and Chapter 10.550, Rules of the Florida Auditor General. Other Reporting Requirements We have issued our Independent Auditors’ Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards; and Independent Accountants’ Report on an examination conducted in accordance with AICPA Professional Standards, AT-C Section 315, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports which are dated June 26, 2018, should be considered in conjunction with this management letter. Prior Audit Findings Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. There were no findings or recommendations made in the preceding annual financial audit report. Official Title and Legal Authority Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. The Village was created pursuant to the constitution of the State of Florida, Home Rule Charter of Miami-Dade County, Article 5, Section 5.05. There were no component units related to the Village. 120 4649 Ponce de Leon Blvd I Suite 404 I Coral Gables, FL 33146 T: 305.662.7272 F: 305.662.4266 I CFLGCPA.COM Financial Condition Sections 10.554(1)(i)5.a. and 10.556(7), Rules of the Auditor General, require us to apply appropriate procedures and communicate the results of our determination as to whether or not the Village has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and to identify of the specific condition(s) met. In connection with our audit, we determined that the Village did not meet any of the conditions described in Section 218.503(1), Florida Statutes. Pursuant to Sections 10.554(1)(i)5.c. and 10.556(8), Rules of the Auditor General, we applied financial condition assessment procedures for the Village. It is management’s responsibility to monitor the Village’s financial condition, and our financial condition assessment was based in part on representations made by management and the review of financial information provided by same. Our assessment was performed as of the fiscal year end. Section 10.554 (1)(i)(2), Rules of the Auditor General, requires that we communicate any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. Annual Financial Report Sections 10.554(1)(i)5.b. and 10.556(7), Rules of the Auditor General, requires the we apply appropriate procedures and communicate the results of our determination as to whether the annual financial report for the Village for the fiscal year ended September 30, 2017, filed with the Florida Department of Financial Services 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, 2017. In connection with our audit, we determined that these two reports were in agreement. Additional Matters Section 10.554(1)(i)3, Rules of the Auditor General, requires us to communicate noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. Purpose of this Letter Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, members of the Village Council and management of the Village, and is not intended to be and should not be used by anyone other than these specified parties. Caballero Fierman Llerena & Garcia, LLP Caballero Fierman Llerena & Garcia, LLP Coral Gables, Florida June 26, 2018 121 4649 Ponce de Leon Blvd I Suite 404 I Coral Gables, FL 33146 T: 305.662.7272 F: 305.662.4266 I CFLGCPA.COM INDEPENDENT ACCOUNTANTS’ REPORT ON COMPLIANCE PURSUANT TO SECTION 218.415 FLORIDA STATUTES Honorable Mayor and Members of the Village Council Miami Shores Village, Florida We have examined the Miami Shores Village’s (the Village) compliance with the requirements of Section 218.415 Florida Statutes during the period of October 1, 2016 to September 30, 2017. Management of the Village is responsible for the Village's compliance with the specified requirements. Our responsibility is to express an opinion on the Village's compliance with the specified requirements based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the examination to obtain reasonable assurance about whether the Village complied, in all material respects, with the specified requirements referenced above. An examination involves performing procedures to obtain evidence about whether the Village complied with the specified requirements. The nature, timing, and extent of the procedures selected depend on our judgment, including an assessment of the risks of material noncompliance, whether due to fraud or error. We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion. Our examination does not provide a legal determination on the Village’s compliance with specified requirements. In our opinion, the Village complied, in all material respects, with the requirements of Section 218.415 Florida Statutes during the period of October 1, 2016 to September 30, 2017. This report is intended solely for the information and use of management, the Mayor, the Village Council, others within the Village and the Auditor General of the State of Florida and is not intended to be and should not be used by anyone other than these specified parties. Caballero Fierman Llerena & Garcia, LLP Caballero Fierman Llerena & Garcia, LLP Coral Gables, Florida June 26, 2018