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2018-2019 PAFR1 Miami Shores Village VOL. 1 NO. 1 VOL. 1 NO. 1 2 This report is designed to be a more compact and concise view and picture of the Village’s finances. The information used in developing the PAFR was taken from the Comprehensive Annual Financial Report (CAFR) for the ffscal year ended September 30, 2019. The ffnancial statements included in the CAFR conform to generally accepted accounting principles (GAAP), and are audited by the Village’s independent auditor, Caballero Fierman Llerena & Garcia, LLP. The PAFR, however, is non-GAAP and unaudited. Miami Shores Village is excited to be presenting the Popular Annual Financial Report (PAFR) for the ffrst time, for the ffscal year ended September 30, 2019. Miami Shores Village, a predominately residential community which covers a 2.5 square mile area, was incorporated in 1932. The Village operates under a Council-Manager form of government. The Council is formed of ffve members. The Village Manager, Village Clerk and Village Attorney are appointed by the Village Council. Department Heads report to the Village Manager. Miami Shores Village provides a full range of municipal services while employing just under 200 employees, between part-time and full-time staff. At September 30, 2019, Miami Shores Village assets and deferred outflows exceeded its liabilities and deferred inflows by $28.8 million (net position). The Village had an unrestricted net position of $4.2 million, an increase of $2.6 million or 172% increase as compared to FY 2018. This increase is attributed to the transfer of capital assets to the county and an increase in pension assets due to changes in market position. Total net position decreased by $3.3 million in FY 2019 to $28.8 million; this decrease being made up of a $1.4 million increase in governmental activities and $4.8 million decrease in business-type activities. As of the end of the current ffscal year, governmental funds for Miami Shores Village reported combined ending fund balances totaling $11.3 million. Of this, $5.2 million was unassigned (which is available for spending at the government's discretion), $1.6 million was committed for future capital projects and encumbrances, and $4.5 million was restricted. The nonspendable fund balance of approximately $15 thousand was related to prepaid items. The net change in fund balance during FY2019 of $52 thousand is indicative of the ffnancial stability of the Village. The General Fund’s fund balance increased by $494 thousand for the ffscal year ended September 30, 2019. 3 This increase was a result of unfflled vacant positions and other lower than budgeted cost savings. At the end of the current ffscal year, FY 2019, the unassigned fund balance for the General Fund was $8.6 million as compared with $8.1 million in the prior year. Major Governmental Funds Excise Tax Fund - Collects public service taxes, per loan requirements, and transfers the taxes to the General Fund. General Fund - This is the primary operating fund of Miami Shores Village. It accounts for all ffnancial resources of the general government, except those required to be accounted for in another fund. General Trust Fund - Accumulates funds that are restricted for speciffc purposes, i.e. recreation, building department, library and charter school. 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 speciffc purposes. Police Forfeiture - Accumulates proceeds which are related to ongoing investigations. Expenditure of these funds is restricted by strict governmental rules and approval of the Village Council. Nonmajor Governmental Funds Capital Improvement Fund - Accounts for major acquisitions and projects to maintain and improve the Village. Charter High School Construction - Accounts for all the costs associated with the construction of Doctors Charter School of Miami Shores. Debt Service Fund - Bank ffnancing, as well as, the Miami Shores Aquatic Facility (1999) and the Charter School Construction (2004) General Obligation Bonds, are accounted for in this fund. Special Revenue Funds - Accounts for speciffc revenues that are legally restricted to expenditures for particular purposes. The following make-up the Village’s Special Revenue Funds: Local Option Gas Tax, Transportation Surtax, Law Enforcement Training and Brockway Memorial Library Fund. Proprietary Funds Enterprise Funds - The Enterprise Funds are the “businesses” of the Village. The Village has three Enterprise Funds: Stormwater, Sanitation and Water & Sewer operations. 4 Internal Service Funds - The Village has two Internal Service Funds, the Risk Management Fund and the Fleet Maintenance Fund. Internal Service Funds are used to account for the ffnancing of goods or services provided by one department to other departments of the Village on a cost reimbursement basis. Fiduciary Funds - Fiduciary Funds include Pension Funds for the general employees and police officers, as well as, a Private Purpose Trust Fund. The General Fund will be the focus of the PAFR. General Fund Revenues General Fund revenues increased $454,730 or 3.4% in FY 2019 from FY 2018, totaling over $13.8 million in fiscal year 2019. Property Taxes amounted to over $8.5 million, 62% of revenues. Actual taxes levied by the Village in 2019 reflected an increase of $520 thousand. The millage rate of 7.9 mills did not change from FY 2018 to FY 2019. 5 Licenses and Permits make up 9% of the General Fund revenues. Revenues, such as the Village’s local business tax and fees associated with building permits, which amounted to $1.2 million, are included here. The State of Florida transmits to the Village revenues, such as Sales Tax, which are included in Intergovernmental Revenues. Intergovernmental Revenues amounted to $1.1 million. The majority of the revenue, included in the $1.8 million received in Charges for Services, comes from Library and Recreation program fees. Traific ffnes, Code Compliance Violations, and other ffnes, included in Fines and Forfeitures, amounted to $251,004 in ffscal year 2019. The rents the Village receives from the Country Club and Charter School are included in Miscellaneous Revenues. Included here as well, are charges for lien searches, sales of surplus scrap and other miscellaneous transactions. $532,950 was received in this category. Interest income amounted to $162,557. 6 General Fund Expenditures In addition to the $15.1 million of expenditures in the General Fund, the General Fund had transfers out in the amount of $1.7 million. Of that amount, $193,179 was transferred to the Brockway Memorial Expansion Fund, $92,920 was transferred to the Water & Sewer Fund and the remaining amount of $1.4 was transferred to the Capital Projects Fund. The following expenditures relate to personnel and operations: The General Government Expenditures of $2.4 million include amounts for the following departments: The Village Clerk, Council, Attorney, Manager, Planning & Zoning, Finance, and Non-Departmental. Public Safety, which incurred $7.9 million, includes the following departments: Code Compliance, Building, Police, and School Crossing Guards. The $1.7 million spent in Public Works includes the divisions of Parks, Streets & Facilities Maintenance, Administration, and Recreation Maintenance. Culture and Recreation includes all of Recreation (Administration, Athletics, all Athletic Programs, Community Center, Aquatic Center and Tennis), as well as, the Brockway Memorial Library, which together total $2.8 million. 7 The Village adopts annual budgets by fund, general fund department, and line item, in compliance with Florida State Statute Section 200.65. 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. Over the course of the year, the Village amended the General Fund budget six times. With these adjustments, disbursements were approximately $769 thousand below ffnal budgeted amounts. Savings were due to unfflled positions and conservative spending. The ffscal year 2019 ffnal amended budget was $17.7 million, an increase of 8.6% over the original General Fund budget of $16.3 million. Revenues of $13.8 million, operating transfers from Excise Tax, Sanitation and Stormwater Funds of $3.5 million and appropriation of General Fund balance of $400 thousand, balanced the ffnal adopted budget for ffscal year 2019. 8 The two components that make the up the General Fund’s fund balance are nonspendable and unassigned. Nonspendable amounts cannot be spent because of form or because of legal or contractual requirements. The unspendable balance was $12,656 at the end of ffscal year 2019. Unassigned is the residual classiffcation for the General Fund and is an indicator of the governments net resources available for spending at the end of a ffscal year. At the end of the current ffscal year, the unassigned fund balance for the General Fund was $8.6 million as compared with $8.1 million the prior year. This $500 thousand increase can be attributed to unfflled positions and conservative spending. This $8.6 million is approximately equal to 6.1 months of General Fund operating expenditures. Stormwater, Sanitation & Water & Sewer Funds - Net position of business-type activities decreased by approximately $4.7 million during ffscal year 2019. This decrease was due to the transfer of the completed water and sewer system to the County. BUSINESS TYPE ACTIVITIES 9 Miami Shores Village’s investment in capital assets for its governmental and business- type activities as of September 30, 2019 amounts to $24.8 million (net of accumulated 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. 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 to refund the cost of the Florida Municipal Loan Council Revenue Bond, Series 1999 which was for the Aquatic Facility’s design, development and construction. Principal is due annually (through 2029) at various amounts. The bonds bear interest at variable rates, payable semi-annually. The bonds are secured by ad valorem revenues. The indenture contains a provision that in the event of default, outstanding amounts including accrued interest are due immediately. 10 Florida Local Government Finance Commission - During ffscal 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 ffnance 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. Other The Village implemented GASB 88 – Certain Disclosures Related to Debt, including Direct Bor- rowings and Direct Placements during the ffscal year ended September 30, 2019. The Village does not currently have an unused line of credit or assets placed as collateral for debt. The Government Finance Oificers Association of the United States and Canada (GFOA) awarded a Certiffcate of Achievement for Excellence in Financial Reporting to Miami Shores Village for its Comprehensive Annual Financial Report (CAFR) for the ffscal year ended September 30, 2018. 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, to refund the cost of the Miami Shores Village, Florida General Obligation Bonds, Series 2004 which was to build the Doctors Charter School Facility. Principal is due annually (through 2033) at various amounts. 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. The indenture contains a provision that in the event of default, outstanding amounts including accrued interest are due immediately. 11 A Certiffcate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certiffcate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certiffcate. For the ffrst time, the FY 2019 Award for the Outstanding Achievement in Popular Annual Financial Reporting (PAFR) has been submitted for review. As a predominately residential community with the “business community” restricted to a six-block area on Second Avenue and isolated pockets on Biscayne Boulevard, property values and other residentially related trends are monitored to determine the health and vitality of the community. Miami Shores Village not only relies on property taxes for revenue, but also other taxes and fees such as sales tax, gasoline tax, building permits and occupational licenses. Actual taxes levied by the Village in 2019 reflected an increase of $520 thousand. Property values increased 6.3% as compared with 2018. It is anticipated that assessed values will continue to increase due to the desirability of the area. The Village is experiencing a signiffcant amount of residential renovation and teardown/rebuild activity, with a net new taxable value of $1.1 million reflected in ffscal year 2019. Expenditures such as payroll and personnel beneffts will continue to increase. Fiscal year 2020 budgeted expenditures and transfers are expected to be $16.9 million while ffscal year 2019 was $16.3 million. This 3.7% increase is due to additional staifing to better meet the needs of the community. The Village is maintaining its unassigned fund balance so that a portion of it will be available to preclude or moderate additional increases in operational expenditures, reductions in revenues related to the COVID-19 pandemic, fund capital improvements, or be available to defray the outstanding costs associated with hurricanes or the costs of other natural disasters. Continuation of capital improvements throughout the Village is planned during ffscal year 2020. Being a Bayside Community, with susceptibility to sea level rise, a Septic to Sewer Conversion Study is being conducted. The design phase has been completed for a multi-modal pathway, installation of an automatic license plate reader camera system (ALPR) at signaled intersections within the Village is underway, and traific calming implementation along with road resurfacing and sidewalk repair continue. With regard to the COVID-19 pandemic, the Village is closely monitoring and taking a conservative approach in order to continue to provide basic services to residents and to ensure the high quality of life residents currently enjoy. 12 ADMINISTRATIVE OFFICERS Thomas J. Benton Village Manager Ysabely Rodriguez Village Clerk Richard Sarafan Village Attorney DIRECTORS Michelle Brown Library Scott Davis Public Works Angela Dorney Recreation Holly Hugdahl Finance Travis Kendall Planning & Zoning Kevin Lystad Chief of Police Ismael Naranjo Building Lazaro Remond Code Compliance Requests for Information Questions concerning this report or requests for additional ffnancial information should be directed to the Finance Director, Holly Hugdahl, CPA, CGMA. Miami Shores Village Finance Department 10050 NE 2nd Avenue Miami Shores, FL 33138-2382 The CAFR and PAFR are available at the Village Hall of Miami Shores and at www.miamishoresvillage.com. MIAMI SHORES VILLAGE CONTACT US Tel: 305-795-2207 Fax: 305-756-8972 www.msvfl.gov VILLAGE COUNCIL Crystal Wagar, Mayor Alice Burch, Vice Mayor Sean Brady Jonathan Meltz Stephen Loffredo Follow us on Instagram @miamishoresvillage1932 Follow us on Twitter @miamishores1932 Like us on Facebook at Miami Shores Village Official Government If you would like to visit the Miami Shores Village Website, please visit: www.miamishoresvillage.com