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Ma�'1�[" >�r,�s i,.;... ;, . �i4�e""�,,�� .I��1" (3� � � F�O�"1C�r� COMPREHENSIVE ANNUAL FINANCIAL REPORT For the fiscal year ended September 30, 2018 Prepared by: The Finance Department � ittei�;;�aw��wn�,. �� " �1 � , � � h z.,„. .y . „ �.,�. ��'.� �.aaa.m,r...�.,'�r�"..,:""" "°.�:"* — �'I��III'. - ky,. ��i i' U� �� I� ��A�� 'lor�da � This page intentionally left blank TABLE OF CONTENTS Paqe Introductory Section Letter of Transmittal III GFOA Certificate of Achievement VI List of Principal Officials VII Organizational Chart VIII Financial Section Independent Auditor's Report 1 Management's Discussion and Analysis 4 Basic Financial Statements Government-Wide Financial Statements: Statement of Net Position 15 Statement of Activities 16 Fund Financial Statements: Balance Sheet-Governmental Funds 18 Reconciliation of the Balance Sheet of Government Funds to the Statement of Net Position 19 Statement of Revenues, Expenditures and Changes in Fund Balances- Governmental Funds 20 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 21 Statement of Revenues, Expenditures and Changes in Fund Balances- Budget and Actual-General Fund 22 Statement of Revenues, Expenditures and Changes in Fund Balances- Budget and Actual-CRA Fund 23 Statement of Net Position- Proprietary Funds 24 Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary Funds 25 Statement of Cash Flows- Proprietary Funds 26 Statement of Fiduciary Net Position - Fiduciary Funds 27 Statement of Changes in Fiduciary Net Position—Pension Trust Funds 28 Notes to the Financial Statements 29 Required Supplementary Information (Unaudited) Schedules of changes in the City's Net Pension Liability and Related Ratios 62 Schedules of General Employees' Contributions 64 Schedules of Police Officers'Contributions 65 Schedules of Firefighters'Contributions 66 Schedule of changes in the City's Total Other Post Employment Benefit Liability 67 Combining and Individual Fund Statements and Schedules Nonmajor Governmental Funds—Fund Descriptions 69 Combining Balance Sheet- Nonmajor Governmental Funds 70 Combining Statement of Revenues, Expenditures and Changes In Fund Balances - Nonmajor Governmental Funds 72 Schedule of Revenues, Expenditures and Changes in Fund Balances- Budget and Actual—Nonmajor Special Revenue Funds 74 Schedule of Revenues, Expenditures and Changes in Fund Balances- Budget and Actual—Nonmajor Debt Service Funds 78 Schedule of Revenues, Expenditures and Changes in Fund Balances- Budget and Actual—Major Capital Projects Funds 79 Internal Service Funds—Fund Descriptions 81 Combining Statement of Net Position 82 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position— Internal Service Funds 83 Combining Statement of Cash Flows—Internal Service Funds 84 I Paqe Financial Section -Continued Other Supplemental Schedules—Fiduciary Funds—Fund Descriptions 85 Combining Statement of Fiduciary Net Position—Pension Trust Funds 86 Combining Statement of Changes in Fiduciary Net Position—Pension Trust Funds 87 Statistical Section (Unaudited) Table of Contents 89 Financial Trends Net Position by Component 90 Changes in Net Position 92 Fund Balances of Governmental Funds 96 Changes in Fund Balances of Governmental Funds 98 Revenue Capacity: Tax Revenues by Source of Governmental Funds 100 Assessed Value and Actual Value of Taxable Property 101 Property Tax Rates- Direct and Overlapping Governments 102 Principal Taxpayers 103 Property Tax Levies and Collections 104 Debt Capacity: Ratios of General Obligation Bonded Debt Outstanding 105 Ratios of Outstanding Debt by Type 106 Direct and Overlapping Debt 108 Pledged-Revenue Coverage 109 Legal Debt Margin Information 110 Demographic and Economic Information: Demographic and Economic Statistics 112 Principal Employers 113 Operating Information: Full-time Equivalent City Government Employees by Function/Program 114 Operating Indicator by Function/Program 115 Capital Asset Statistics by Function/Program 116 Other Reports: Schedule of Expenditures of Federal Awards 117 Notes to Schedule of Expenditures of Federal Awards 118 Schedule of Findings and Questioned Costs 119 Independent Auditors' Report on Compliance for each Major Federal Program and Report on Internal Control Over Compliance in accordance with the Uniform Guidance 121 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 123 Independent Auditors' Management Letter 125 Independent Accountants' Examination Report 127 Affidavit of Impact Fee Compliance 128 II I �� ( � � rM r � .�y tli o � � ..^�� e.�,�a"d': . �.: � , .:.r.��....� � C�� ,R._ . ..,. m � t �"'�J ity of ��G��or�AT�� March 08, 2019 To the Honorable Mayor, and Members of the City Council, and Citizens of the City of Edgewater City Charter and State law requires that all general-purpose local governments publish a complete set of financial statements presented in conformity with the generally accepted accounting principles in the United States of America (GAAP) and that they be audited in accordance with generally accepted auditing standards in the United States of America by a firm of licensed certified public accountants. Pursuant to the requirement, it is with great pleasure that we present to the City of Edgewater, the Comprehensive Annual Financial Report (CAFR) for the fiscal year ended September 30th, 2018. This report consists of management's representations concerning the finances of the City of Edgewater. Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making these representations, management of the City of Edgewater 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 City of Edgewater's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City of Edgewater's comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatements. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. James Moore & Co., P.L. a firm of licensed certified public accountants, has issued an unmodified ("clean") opinion on the City of Edgewater's financial statements for the fiscal year ended September 30, 2018. The independent auditor's report is located at the front of the financial section of this report. Management's discussion and analysis (MD&A) immediately follows the independent auditor's report. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designated to complement the MD&A and should be read in conjunction with it. Profile of the Government The City of Edgewater was incorporated in 1951 and has operated under the Council-Manager form of government since 1981. Primary responsibilities of the City Manager are to implement the policies of the elected officials. The City Manager assumes responsibilities of the day-to-day operations of the City, annual budget preparation, appointing/removing officers and employees. In addition to supervising the daily operations, the City Manager works with elected officials, committees and citizens to plan for the future of the community. The City of Edgewater is located in southeast Volusia County, primarily east of I-95 south of New Smyrna Beach, two miles west of the Atlantic Ocean and runs along 10.5 miles of the Indian River coastline. The City is within the economic zone of Central Florida, which roughly follows Interstate 4 from Tampa through Orlando to Daytona Beach and the communities along the Atlantic Coast in Volusia County. There are approximately 15,817 acres of land within the City with an estimated population of 23,319. III The City of Edgewater offers a full range of services to its citizens through multiple funds. The City uses funds to separate resources and assure that the City adheres to restrictions placed upon it by legislators, grantors, donors, and other outside parties (e.g. GASB, GAAP). The following is a list of services provided by each fund: • General Fund - provides planning and zoning, economic development, building (e.g. permits, inspections, etc), police, fire, fire rescue, animal control, parks, recreation, streets (new and maintained), code enforcement, and general administrative services. • Water and Sewer Fund - provides water and sewer services. • Solid Waste Fund - uses a combination of City personnel and assets along with private contracted companies to provide solid waste collection. • Stormwater Fund—provides and ensures proper water drainage from all properties. • Internal Service Funds — account for fleet management services, management information systems, general liability insurance, health insurance, and workers compensation insurance. • CRA Fund - account for the ad valorem proceeds for the redevelopment of the City's US1 and Park Avenue Corridor. Whenever possible the City seeks alternative sources of revenue to provide services, enhance services, and supplement the existing expenses in the budget. The most prominent example of alternative revenue is grants through the federal, state, and local levels. Local Economv Long established businesses such as Boston Whaler, Everglades Boats, Edgewater Power Boats, R.J. Dougherty Associates, Inc., Publix and Winn Dixie Supermarkets, as well as new businesses such as Northwest Lineman College provide employment opportunities within the City. NASA and related supporting enterprises at Cape Canaveral as well as the cruise industry located at Port Canaveral provide further employment opportunities. The County of Volusia currently has a 3.1 percent unemployment rate. During the last year, taxable assessment values of property in Edgewater increased 9.62 percent. The City continues exploring several options to increase economic growth within the City and improve economic development within southeast Volusia County. The Community Redevelopment Agency was created to encourage redevelopment along the City's US. 1 and Park Ave. corridor. The City continues to develop many partnerships between various economic development agencies and local businesses. The City of Edgewater's outlook for fiscal year 2019 is for modest gains in economic growth as the recovery and expansion from the financial crisis and Hurricane Mathew and Irma gain a small degree of traction in the local economy. With the modest gains, the City of Edgewater continues to apply for Federal and State grants to fund sidewalks, reclaimed water line extension, boat ramp replacement and other hazard mitigation identified projects. Without these funds, these projects would not have been completed within the foreseeable future. Financial Planninq and Budqetinq The City continued to stress expenditure control in preparing the FY2019 General Fund budget. The City ad valorem millage rate for FY2019 was 6.70, which was 8.82% more than the rolled-back rate. The millage rate of 6.70 will result in an anticipated property tax collections increase of 9.6% due to an increase in property assessments and annexations. The City adopts a five-year capital improvement plan that identifies future funding needs to maintain, repair and upgrade capital assets and infrastructure including road resurfacing, water line upgrades and vehicle and technology replacement programs within the funding constraints. It should be noted; however, that the CIP is not a fixed document but a flexible, evolutionary document that may change to reflect changing priorities, opportunities, costs, or different financing approaches. IV Relevant Financial Policies The City Council recognizes the need to meet seasonal shortfalls in cash flows, its susceptibility to emergency or unanticipated expenditures or the possibility of revenue shortfalls during any fiscal year. To address these issues, the City Council included in its Charter a requirement to maintain reserves at a minimum of 15 percent to a maximum of 25 percent of the general fund appropriations. The unassigned fund balance at September 30, 2018 was 18.9% which is within the range of 15-25% per the charter. For Fiscal Year 2019 operating expenditures budget show modest increases to allow for increasing operating cost while still maintaining our capital improvements. Budqetinq Controls The annual budget serves as the foundation for the City of Edgewater's financial planning and control. All departments of the City of Edgewater are required to submit requests for appropriation to the City Manager. The City Manager then uses these requests as the starting point for developing a proposed budget. The City Manager then presents this proposed budget to the City Council for review. The City Council is required to hold public hearings on the proposed budget and to adopt a final budget by no later than September 30, the close of the City of Edgewater's fiscal year. The apprdpriated budget is prepared by fund (i.e., General Fund), department (i.e., Fire Department) and division (i.e., Fire Operations). The City Manager may make transfers of appropriations within and between divisions and departments; however, any revisions that alter the total appropriations of any funds must be approved by City Council. Original and final amended budget-to-actual comparisons are provided in this report for each individual governmental fund. Certificate of Achievement Award The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Edgewater for its comprehensive annual financial report for the fiscal year ended September 30, 2017. This was the thirty- third consecutive year that the City of Edgewater has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility of another certificate. Acknowledqements The preparation of this report would not have been possible without the efficient and dedicated commitment of the entire Finance Department. The City departments, although not extensively involved in year-end audit activities, contributed significantly by ensuring the accuracy and integrity of the accounting information and statistics compiled throughout the year. Without their diligence, the work of the Finance Department would have been considerably more difficult. Appreciation must also be expressed to the City's external auditor whose suggestions and attention to detail enhanced the quality of this report. In closing, special thanks to the Mayor and City Council for their support and commitment to maintaining the financial integrity and sustainability of the City. Respectfully submitted, ,�j� �. �� k.' a .�_ �`� �.�' w'�<"� f Glenn A. Irby Bridgette King Interim City Manager Finance Director V (icar ernt�7ent F�n4�r�ce (7f�d icers ,nssc��i4�tic�r� �erti fi �cate of Achi��elner�� f�r �x��ll�r��e �r� Fin�n�ial l�epo�-tin� P�-��t�� t� Cxty of E�gewater Flarida Irur it5 C:Um�relzcr�4ive �n�1�i��I F�r��ncial n�par� for �he Fiscal Y�ar End�d Se�3tcm�cr 3(l, 2U17 �� xz�:ittiv� 1Ji�-��tk�r;'C;�-;(3 VI CITY OF EDGEWATER FLORIDA List of Elected and Appointed Officials September 30, 2018 CITY COUNCIL MAYOR Michael Ignasiak DISTRICT 1 DISTRICT 3 Christine Power Megan O'Keefe DISTRICT 2 DISTRICT 4 Amy Vogt Gary Conroy ADMINISTRATION CITY MANAGER CITY ATTORNEY Tracey T. Barlow Aaron R. Wolfe FINANCE CITY CLERK/ DIRECTOR PARALEGAL Bridgette King Robin L. Matusick FIRE CHIEF POLICE CHIEF Vacant David J. Arcieri HUMAN RESOURCES DEVELOPMENT SERVICES DIRECTOR DIRECTOR Julie A. Christine Darren Lear ENVIRONMENTAL SERVICES PARKS & RECREATION DIRECTOR DIRECTOR Brenda Dewees Samantha Bergeron VII CITY OF EDGEWATER FLORIDA City Organization Chart September 30, 2018 City of Edgewater Citizens Mayor&City Council Mayor-Micheal Ignasiak District 1-Christine Power District 2-Amy Vogt District 3-Megan O'Keefe District 4-Gary Conroy � City Attorney City Manager I City Clerk/ I � Paralegal Advisory Boards Aaron Wolfe Tracey T.Barlow ' Robin Matusick i Assistant to the City Clerk Kelsey Arcieri Operations Support Departments Departments i� � Environmental � Director of Public Parks& Finance Services Safety Recreation ��re�tor Director Director Bridgette King Dave Arcieri Brenda Dewees Samantha Bergeron ---- - ---I .1 _ I� ...__j �____ ull � Recreation w Information Technology Utilities ' Public Works Fire/Rescue Police Maintenance ' Economic „ Development �,�,�, �� Fire/Rescue � w Patrol Water Plant Fleet Samantha Bergeron Operations - - _ - --� WastewaterPlant�� ^^^ Solidwaste Life Safety � �� Crimal Investigation ��„„ Community Field O erations �^^^^^ ^^^^^^ Stormwater Redevelopment P Code � CitizensAssistingPolice Events/ Wastewater Enforcement (CAPS) Communications Collections °°°�° Street Animal Control �^� uu Human Resources AnimalShelter �� Director Julie Christine Development ' Services Director Darren Lear �� Building Planning VIII '� ��L i L�+�.J ��\J�� iri[il��ri Pii�:i�i: hr�aur...l��rks and ["ncai.11�arlc INDEPENDENT AUDITORS' REPORT To the Honorable Mayor, City Council, and City Manager City of Edgewater, 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 City of Edgewater, Florida (the City), as of and for the year ended September 30, 2018, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements The City's 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 entity'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 entity'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 ofthe financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. 12I Execut'r��e Cir�le 133 East lndiana Avenue �931 Nl�'lst Pface 24';Tim Gar�ible Pface.Suiie 200 Qaytona Beach,FL 3Z1 14-1 Ig� DeLand.FL 327<4-4329 Ga�nes�•ifle.Fl_32Gfl7-2Qb3 Taflahassee.Fl.32308-a38(� Telephorte:386-2�'-4100 TeEeE�hnne:3gG-'38-33�7� Te[eE�hnner 352-3;8-1331 Tefephone:&50-38(�-E�i£�•1 Wef�site:u�ww.jmro.cori7 EmaiL into ajrnro.rcrrii � ,�1emf�er c�t r'1Cal�' fntern��tinnaf wit}a crttices irr prinripal cities wcarldwide 1 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 City, as of September 30, 2018, and the respective changes in financial position and, where applicable, cash flows thereof, and the respective budgetary comparison for the General Fund and CRA for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Change in Accounting Principle As discussed in Note I(D)(6), I(D)(9),V(B), and V(I)to the financial statements,in 2018 the City adopted Governmental Accounting Standards Board (GASB) Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. The effects of these standards have also been applied to the financial statements as of and for the year ended September 30, 2017. See Note V(I) for the effect of GASB 75 on beginning net position. Our opinion is not modified with respect to this matter. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and required supplementary information, as listed in the table of contents, 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. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's financial statements as a whole. The introductory section, combining and individual nonmajor fund financial statements, budgetary comparison schedules, statistical section, and schedule of expenditures of federal awards, as required by the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), 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, budgetary comparison schedules, and schedule of expenditures of federal awards 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 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 2 with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects in relation to the basic financial statements as a whole. The introductory section and statistical section 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 March 8, 2019, on our consideration of the City'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 City's internal control over financial reporting and compliance. U�f�[ 4 �e• r �.�. f Daytona Beach, Florida March 8, 2019 3 Management's Discussion and Analysis As management of the City of Edgewater, Florida we offer readers of the City of Edgewater's financial statements this narrative overview and analysis of the financial activities of the City of Edgewater for the fiscal year ended September 30, 2018. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal. Financial Highlights • Net Position - The assets of the City exceeded its liabilities at the close of FY 2017-18 by $76,141,233, which represents an increase in net position of $4,944,718 or 6.95% from the prior fiscal year. The majority of this relates to the restatement of beginning net position which decreased 4,126,756 as a result of the increase in OPEB liability. • The City's governmental funds reported combined ending fund balance of $8,376,439, an increase of$33,816 from the prior fiscal year. • At the end of FY 2017-18, the General Fund unassigned fund balance was $3,180,919 or 21.16% of the budgeted FY 2019 General Fund expenditures, excluding transfers. This represents an increase of$162,173 from the prior fiscal year. • During the fiscal year, the City's total debt decreased by $2,386,779. Governmental debt decreased by $529,826 and business-type debt reflected a decrease of$1,856,953. Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to the City of Edgewater's (the City) basic financial statements. The City's basic financial statements comprise three components: 1) government-wide financial statements, 2) 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 City of Edgewater's finances, in a manner similar to a private-sector business. The statement of net position presents information on all of the City's assets and liabilities, with the difference between the two 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 City is improving or deteriorating. 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). 4 Both of the government-wide financial statements distinguish functions of the City of Edgewater that are principally supported by taxes and intergovernmental revenues (governmental activities) from 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 the City of Edgewater include general government, public safety, transportation/public works and parks and recreation services. The business-type activities of the City of Edgewater include water and sewer, refuse collection and stormwater management. The government-wide financial statements include only the City of Edgewater itself (known as the primary government). The City of Edgewater has one component unit, the Edgewater Community Redevelopment Agency (CRA). The CRA is reported as if it were part of the primary government as a major special revenue fund. The government-wide financial statements can be found on pages 15-18 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. The City of Edgewater, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. All of the funds of the City of Edgewater 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 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. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City of Edgewater maintains ten individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, the community redevelopment agency (CRA) and the capital projects fund, all of which are considered to be major funds. Data from the other seven 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 City of Edgewater adopts an annual appropriated budget for all of its governmental funds. Budgetary comparison statements have been provided for the general fund and community redevelopment fund to demonstrate compliance with their budgets on pages 22 and 23 respectively. Budgetary comparison schedules have been provided for the non-major, debt service and capital projects funds at pages 74-79. 5 The basic governmental fund financial statements can be found on pages 18-23 of this report. Proprietary Funds - The City of Edgewater maintains two types of proprietary funds, enterprise funds and internal service funds. Both enterprise and internal service funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City of Edgewater uses enterprise funds to account for water and sewer, solid waste collection and stormwater management. Internal service funds are used to account for management information systems, fleet servicing, and property and casualty, health, dental, life, and workers compensation insurances. 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 water and sewer, solid waste collection and stormwater management which are all considered to be major funds. The basic proprietary fund financial statements can be found on pages 24-26 of this report. Internal Services Funds — Internal Service funds are used to account for the financing of centralized services to the City departments on a cost-reimbursement basis. The basic internal services fund financial statements can be found on pages 82-84 of this report. 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 City of Edgewater's own programs. The accounting used for fiduciary funds is much like that used for the proprietary funds. The basic fiduciary fund financial statements can be found on pages 85-87 of this report. Notes to the Financial Statements The notes provide additional information that is essential to a more complete understanding of the data provided in the government-wide and fund financial statements. The notes to financial statements can be found on pages 29-60 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 City's progress in its obligation to provide pension benefits to its employees which can be found on pages 62-66. OPEB Liability and Ratios can be found on page 67.The combining statements referred to earlier in connection with non-major governmental funds are presented immediately following the notes to financial statements and required supplementary information. Combining and individual fund statements and schedules can be found on pages 69-73 of this report. Government-Wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the City of Edgewater, assets exceeded liabilities by $76,141,233 at the close of the most recent fiscal year. The following table reflects the condensed statement of net 6 position for the current and prior years. For more detail see the Statement of Net Position on page 15. City of Edgewater's Statement of Net Position (in whole dollars) Governmental Activities Business-Type Activities Total Primary Government Assets: 2018 2017 2018 2017 2018 2017 Currentandotherassets $11,018,202 $10,112,700 $14,139,651 $11,618,125 $25,157,853 $21,730,825 CapitalAssets 47,041,442 45,664,075 44,407,602 47,206,431 91,449,044 92,870,506 TotalAssets 58,059,644 55,776,775 58,547,253 58,824,556 116,606,897 114,601,331 Total deferred outflows of resources 2,873,560 2,603,766 545,145 554,373 3,418,705 3,158,139 Liabilities: Long term liabilities 18,381,451 16,891,501 22,008,916 22,735,496 40,390,367 39,626,997 Otherliabilities 1,073,152 1,092,880 1,238,405 1,405,543 2,311,557 2,498,423 Total Liabilities 19,454,603 17,984,381 23,247,321 24,141,039 42,701,924 42,125,420 Total deferred inflows of resources 1,061,146 310,779 121,299 - 1,182,445 310,779 Net Position: Net investmerit in capital assets 41,987,558 41,696,283 28,304,107 29,261,065 70,291,665 70,957,348 Restricted 2,077,678 1,438,666 1,641,390 1,386,492 3,719,068 2,825,158 Unrestricted (3,647,781) (3,049,568) 5,778,281 4,590,333 2,130,500 1,540,765 Total Net Position $40,417,455 $40,085,381 $35,723,778 $35,237,890 $76,141,233 $75,323,271 At the end of the current fiscal year, the government's liabilities increased by $576,504 which is mainly attributed to the net increase in OPEB Liability $3,955,874 which was offset by other decreased liabilities. Notes and Capital leases payable decreased $2,386,779 largely from decreases in Business-Type Debt. The City's net pension liability decreased by $437,739 during the current year. The City's Compensated absences decreased $367,986. Ninety-two percent(92%) of the City's net position reflect its investment in capital assets (e.g., land, buildings, improvements, infrastructure and equipment) less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of Edgewater's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the City of Edgewater's net position (5%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of Net Position is unrestricted and may be used to meet the government's ongoing obligations to citizens and creditors. � At the end of the current fiscal year, the City of Edgewater is able to report positive balances in all categories of net position except for Governmental unrestricted which is due to the City's net pension liability being reflected on the statements. The government's net position increased $4,944,718 in the current fiscal year. The government's restricted net position increased by $893,910 in the current fiscal year. This was mainly attributed to an increase of$534,879 in net position being restricted for public safety as well as an increase of $109,462 in net position being restricted for Community redevelopment. Further explanations of the decrease are detailed below. The following table reflects the condensed Statement of Activities for the current and prior years. For more detail see the Statement of Activities on page 16-17. City of Edgewater's Changes in Revenues, Expenses and Net Position (in whole dollars) Governmental Activities Business-Type Activities Total Primary Government 2018 2017 2018 2017 2018 2017 Revenues: Programrevenues- Chargesforseroices $ 1,600,772 $ 1,508,238 $15,507,691 $14,471,486 $17,108,463 $15,979,724 Operating grantsand contributions 754,837 3,899,222 - - 754,837 3,899,222 Capitalgrantsandcontributions 1,244,620 1,550,007 306,841 1,085,533 1,551,461 2,635,540 Generalrevenues- Propertytaxes 6,025,937 5,095,759 - - 6,025,937 5,095,759 Franchise and utilitytaxes 3,608,538 3,303,147 - - 3,608,538 3,303,147 Intergovernmental 2,327,579 2,144,426 - - 2,327,579 2,144,426 Investment income and miscellaneous 177,217 136,872 166,198 475,429 343,415 612,301 Totalrevenues 15,739,500 17,637,671 15,980,730 16,032,448 31,720,230 33,670,119 Expenses: Generalgovernment 2,445,179 6,430,834 - - 2,445,179 6,430,834 Publicsafety 7,583,092 8,109,942 - - 7,583,092 8,109,942 Transportation/publicworks 1,863,482 1,696,747 - - 1,863,482 1,696,747 Parksandrecreation 1,325,064 1,393,064 - - 1,325,064 1,393,064 Community Redevelopment 60,174 22,063 - - 60,174 22,063 Interestonlong-termdebt 227,505 190,935 - - 227,505 190,935 Waterand sewer - - 9,218,732 10,090,938 9,218,732 10,090,938 Solid waste - - 2,678,923 3,313,117 2,678,923 3,313,117 Stormwatermanagement - - 1,373,361 1,430,987 1,373,361 1,430,987 Totalexpenses 13,504,496 17,843,585 13,271,016 14,835,042 26,775,512 32,678,627 Excess(deficiency)before transfers 2,235,004 (205,914) 2,709,714 1,197,406 4,944,718 991,492 Transfers in/(out) 914,544 957,470 (914,544) (957,470) - - Increase (Decrease) in net position 3,149,548 751,556 1,795,170 239,936 4,944,718 991,492 Net Position - Beginning 37,267,907 39,333,825 33,928,608 34,997,954 71,196,515 74,331,779 Net Position - Ending $40,417,455 $40,085,381 $35,723,778 $35,237,890 $76,141,233 $75,323,271 8 Statement of Activities Governmental Activities- Governmental activities increased the City of Edgewater's net position by $3,149,548. Key elements of this increase are as follows: • The restated FY17 fund balance decreased by 2,817,474 as a result of the increase in OPEB liability. • Operating and capital grants decreased by $3,144,385 due mainly to $3,116,553 of FEMA/State reimbursement requests for Hurricane Mathew restoration costs. • General Government expenses decreased $3,985,655 from the prior year due mainly to 2017 Hurricane Mathew and Irma restoration costs. Business-Type Activities - Business-type activities increased the City of Edgewater's net position by $1,795,170. Key elements of this increase are as follows: • Charges for services reflect an overall 7.16% increase this year as compared to a 5.53% increase last year. Charge for services increased by $1,036,205 over the previous year. All of the rates are adjusted per continuing professional rate study analyses. • Water and Sewer expenses decreased $872,206 from the previous year. The primary components of the decrease include the prior year's increased pension expense of $772,964, and costs associated with an effluent discharge consent order compliance study of$156,949. • Solid Waste expenses decreased $634,194 due mainly to prior year hurricane recovery costs of$367,474 and pension expense of$248,382. • Stormwater expenses decreased $57,626 due mainly to a decreased Public Works Complex transfer of$74,388 being for 2017 and not 2018. The remainder of this page intentionally left blank. 9 Expenses and Pr�gram Revenues -Governmental Acti�ities $B,QQQ QQQ $7,583:092 �7,��,�� $6,0a�,00� �5,�Q�,a�Q $4,��,OOa $3,��,00� �z aa5��9 �� 6�s:7a7 $2.053.677 �Z,QQQ,QQQ $1,325,Ofi4 $9Q5,540 ��,��Q $2&3 228 $357,78d $60:174 $227:5d5 $0 �a � General govemment Public safet, Transportation:public Parks and recreation Communit, Interest an long�eim works redevelapmert debt oExpense ■Program Reuenues Revenues by Source—Governmental Activities Investrr�ent Incorr�e & Miscellaneous_ �Other Taxes 1% \\ �� 23% � Prograrr� �evenues_ 23% -- - __Property Taxes Intergovernmental�----——` ---- 38°/a 15% oPmpert}�Ta�es slntergovemmental oPmgram Reuenues olnuestment Incoine&Paliscellaneous ■Other Ta.ees 10 Expenses and Program Revenues - Business-Type Activities ��2,�4�,QQQ $10:523,474 $9:218:732 ,�,<. , ,, , � S��,��,�Q� �8,004,000 �6,00�,000 gs��_z.3.� �4,OQa,QQQ $2678,923 $1.37�3 361 1_?20��2:5 �z,�0�,000 r'S: ....y,�.. SV Waterand Sewer Solid Waste St�omwatemhelanegement oExpense sProgram Revenues Revenues by Source - Business-Type Activities Capltal Gran�s and Contributions� 2% 1 ;� i :` Iruvestment Ineome &_%'�� _____Charges farSeruiees M iscellaneous 97°/a 1% oCapital Grants antl Contributicans ■Chargesfor Seivices olnuestment Income&Rliscellaneous 11 Financial Analysis of the Government's Funds As noted earlier, the City of Edgewater used fund accounting to ensure and demonstrate compliance with finance-related requirements. Governmental Funds - The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of Edgewater's financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City of Edgewater's governmental funds reported combined ending fund balances of $8,376,439, an increase of $33,816 in comparison with the prior year. Approximately 38% of this amount or $3,180,919 constitutes unassigned fund balance, which is available for spending at the City's discretion. The City has assigned fund balance for the replacement of City Hall in the amount of $907,749, OPEB of $177,122 and subsequent year's budget of $670,789. Restricted fund balance of $2,988,017 is for scholarships, public safety, debt service, community redevelopment, capital projects. Nonspendable fund balance of$14,485 is held for inventories and prepaids. The General Fund is the chief operating fund of the City of Edgewater. At the end of the current fiscal year, unassigned fund balance of the General Fund was $3,180,919, while total fund balance was $5,438,700. As a measure of the General Fund's liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 23% of the total General Fund expenditures, while total fund balance represents 38% of that same amount. During the current fiscal year, the fund balance of the General Fund increased by $1,537,468. This increase can be attributed to the timing of various projects such as Hurricane repairs to Kennedy Park with funding identified totaling $966,035, paving and sidewalk projects in the amount of $122,470 in addition to $298,603 in other open capital projects and open purchase orders not yet complete at year end that were re-appropriated in the subsequent year budget. During the current fiscal year, the Capital projects fund has added or improved recreational facilities, and has completed a major highway median beautification project. Fiscal Year 2018 is the third year of activity for the City's recently established Community Redevelopment Agency Fund (CRA). This agency is established for the purpose of making improvements to core downtown properties to enhance economic activity in the City. Revenues are being collected from the County and City. Future expenditures are budgeted primarily for land acquisitions or qualified community enhancements. Proprietary Funds - The City of Edgewater'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 proprietary funds (including enterprise and internal service funds) at the year-end amounted to $6,349,268. The total increase in net position for these funds was $2,112,467. Other factors concerning the finances of the enterprise funds have already been addressed in the discussion of the City of Edgewater's business-type activities. 12 General Fund Budgetary Highlights The final revenue budget was increased from the original budget by $914,662 due mainly to increased utility and franchise fees of $330k, increased revenues from property tax collections in the amount of $261 k of which an estimated $190k related to the annexation of Boston Whaler property, and increased revenues for providing police security services of$137,949. Actual expenditures were $1,194,781 less than budgeted expenditures mostly due to holding positions open in various departments and reduction in operating costs in order to cover the costs of Hurricane damages. The final expense budget was increased from the original budget by $927,242 due mainly to Hurricane Irma expenditures in the amount of $650,917 in addition to $184,616 in capital outlay and capital projects identified and $77,023 for required railroad crossing maintenance. Capital Asset and Debt Administration Capital Assets - The City of Edgewater's investment in capital assets for its governmental and business-type activities as of September 30, 2018, amounts to $91,449,044 net of accumulated depreciation. This investment in capital assets includes land, buildings, improvements, machinery and equipment and infrastructure. The total decrease in the City's investment in capital assets for the current fiscal year was 1.5%. Cityof Edgewater's Capital Assets (net of depreciation)(in whole dollars) Governmental Activities Business-Type Activities Total Primary Government 2018 2017 2018 2017 2018 2017 Land $ 25,211,665 $ 25,171,845 $ 2,172,570 $ 2,172,370 $ 27,384,235 $ 27,344,215 Buildings 3,899,081 4,001,611 5,508,915 6,369,677 9,407,996 10,371,288 Improvements 7,040,016 7,649,971 33,226,393 34,334,112 40,266,409 41,984,083 Machineryandequipment 1,756,279 2,083,348 2,839,312 3,133,729 4,595,591 5,217,077 Infrastructure 6,087,773 5,382,158 - - 6,087,773 5,382,158 Constructioninprogress 3,046,628 1,375,142 660,412 1,196,543 3,707,040 2,571,685 Total $ 47,041,442 $ 45,664,075 $ 44,407,602 $ 47,206,431 $ 91,449,044 $ 92,870,506 Additional information on the City of Edgewater's capital assets can be found in Note IV E of the notes to the financial statements on pages 42-43 of this report. Long-Term Debt At the end of the current fiscal year, the City of Edgewater had total debt outstanding of $22,866,237. This debt includes notes payable, state revolving loan and capital leases. In FY 2018, the City borrowed an additional $32,155 in State Revolving Fund loan towards the design phase of the reclaimed waterline extension project in the Water & Sewer fund. The City is current on all required debt service obligations. 13 City of Edgewater's Outstanding Debt (in whole dollars) Governmental Activities Business-Type Activities Total Primary Government 2018 2017 2018 2017 2018 2017 Notespayable $ 6,291,638 $ 6,644,670 $10,430,362 $12,016,331 $16,722,000 $18,661,001 State revolving loans - - 5,635,033 5,894,078 5,635,033 5,894,078 Capitalleases 458,923 635,717 50,281 62,220 509,204 697,937 $ 6,750,561 $ 7,280,387 $16,115,676 $17,972,629 $22,866,237 $25,253,016 During the current fiscal year, the City's total debt decreased by $2,386,779 (9%). Additional information on the City of Edgewater's long-term debt can be found in Note IV G of the notes to the financial statements on pages 44-49 of this report. Reserve Policy In November 2016, voter's approved a charter amendment requiring the City to maintain reserves at a minimum of 15 percent of all operating funds (General, Water & Sewer, Solid Waste and Stormwater). The policy addresses that the City is required to maintain reserves at a minimum of 15 percent with a maximum of 25 percent of the respective fund. The reserve range is established based on a percentage of current years' budget. Reserve levels above the top of the range are deemed to be available for capital or other lawful purposes. The Reserve amount per Charter is currently set at $2,519,127 (15%) of the FY2017 — 2018 General Fund Budget. The amount available for capital or other lawful purposes less any reserves or set asides is $3,180,919 at September 30, 2018. Next Year's Budget and Rates The City Council adopted a conservative budget for Fiscal Year 2019. The proposed budget contains many ambitious work plan objectives that are intended to address the highest priorities in the community and the goals of the City Council. This budget also sets the financial foundation to establish an accurate and understandable assessment and tracking of the uses and sources of all funds. The 2019 budget presents a number of opportunities and challenges to improve overall service to the community while continuing to deal with the slow recovery as a result of the severe economic downturn and continuing recovery efforts associated with Hurricanes Matthew and Irma. By any standard this is a very aggressive program of work that will challenge the capacity of staff and the City Council to accomplish under the slow recovery. The proposed General Fund budget for Fiscal Year 2019 includes the following assumptions: • Modest increases in operating expenditures to cover increased health insurance costs, salary increases, and defined benefit pension plan increased costs. • Maintenance of service levels and programs to the extent possible and minimal reductions in service levels where appropriate. • OPEB set aside of$177,122 as the second year amount to be funded over the next five years. Requests for Information This financial report is designed to provide a general overview of the City of Edgewater's finances for those with an interest in the government's finances. Questions concerning any of the information should be addressed to the office of the Finance Director, City of Edgewater, P.O. Box 100, Edgewater, Florida 32132-0100. 14 CITY OF EDGEWATER,FLORIDA Statement of Net Position September 30,2018 Governmental- Business-type type Activities Activities Total ASSETS Cash and cash equivalents $ 4,882,255 $ 8,321,749 $ 13,204,004 Investments 4,221,380 838,371 5,059,751 Receivables,net 572,659 2,113,074 2,685,733 Special assessment receivable - 159,578 159,578 Internal balances (602,084) 602,084 - Duefromothergovernments 1,058,029 318,109 1,376,138 Inventories and prepaids 50,273 14,231 64,504 Net pension asset 835,690 - 835,690 Restricted assets: Cash and cash equivalents - 1,772,455 1,772,455 Capital Assets Nondepreciable assets 28,258,293 2,832,982 31,091,275 Depreciable assets,net 18,783,149 41,574,620 60,357,769 Total assets $ 58,059,644 $ 58,547,253 $ 116,606,897 DEFERRED OUTFLOWS OF RESOURCES Deferred oufflows related to pensions $ 2,723,528 $ 462,360 $ 3,185,888 Deferred oufflows related to OPEB 150,032 70,604 220,636 Deferred Loss on Refunding - 12,181 12,181 Total deferred outflows of resources $ 2,873,560 $ 545,145 $ 3,418,705 LIABILITIES Accounts payable and other current liabilities $ g27,220 $ 293,573 $ 1,220,793 Accrued interest payable 63,205 132,203 195,408 Unearned revenue 80,517 - 80,517 Due to other governments 2,210 - 2,210 Customerdeposits - 812,629 812,629 Noncurrent liabilities Due within one year Notes and capital leases payable 486,709 1,934,732 2,421,441 Compensated absences 745,924 355,747 1,101,671 Due in more than one year Notes and capital leases payable 6,263,852 14,180,944 20,444,796 Compensated absences 480,585 239,585 720,170 Net pension liability 6,991,010 3,691,614 10,682,624 OPEB liability 3,413,371 1,606,294 5,019,665 Totalliabilities $ 19,454,603 $ 23,247,321 $ 42,701,924 DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pensions $ 803,383 $ - $ 803,383 Deferred inflows related to OPEB 257,763 121,299 379,062 Total deferred inflows of resources $ 1,061,146 $ 121,299 $ 1,182,445 NET POSITION Net investment in capital assets $ 41,987,558 $ 28,304,107 $ 70,291,665 Restricted for: Debt service 71,005 973,897 1,044,902 Public safety 917,103 - 917,103 Capital projects 928,493 667,493 1,595,986 Community redevelopment 152,981 - 152,981 Scholarships 8,096 - 8,096 Unrestricted (3,647,781) 5,778,281 2,130,500 Total net position $ 40,417,455 $ 35,723,778 $ 76,141,233 The notes to the financial statements are an integral part of this statement. 15 CITY OF EDGEWATER, FLORIDA Statement of Activities For the Fiscal Year Ended September 30, 2018 Program Revenues Operating Capital Charges for Grants and Grants and Functions 1 Programs Expenses Services Contributions Contributions Governmental activities: General administrative $ 2,445,179 $ 197,951 $ 14,087 $ 71,190 Publicworks 1,863,482 507,365 696,982 849,330 Public safety 7,583,092 825,894 43,768 35,878 Culture and recreation 1,325,064 69,562 - 288,222 Community Redevelopment 60,174 - - - Interest on long-term debt 227,505 - - - Total governmental activities 13,504,496 1,600,772 754,837 1,244,620 Business-type activities: Water/Sewer 9,218,732 10,216,833 - 306,641 Solid waste 2,678,923 3,570,233 - - Stormwater 1,373,361 1,720,625 - 200 Total business-type activities 13,271,016 15,507,691 - 306,841 Total primary government $ 26,775,512 $ 17,108,463 $ 754,837 $ 1,551,461 General revenues: Propertytaxes Utility and franchise taxes Intergovernmental shared revenue-non-program Investment earnings Miscellaneous revenue Transfers Total general revenues and transfers Change in net position Net position-beginning,as restated Net posftfon-endfng The notes to the financial statements are an integral part of this statement. 16 Net(Expense)Revenue and Changes in Net Position Governmental Business-type Activities Activities Total $ (2,161,951) $ - $ (2,161,951) 190,195 - 190,195 (6,677,552) - (6,677,552) (967,280) - (967,280) (60,174) - (60,174) (227,505) - (227,505) (9,904,267) - (9,904,267) - 1,304,742 1,304,742 - 891,310 891,310 - 347,464 347,464 - 2,543,516 2,543,516 (9,904,267) 2,543,516 (7,360,751) 6,025,937 - 6,025,937 3,608,538 - 3,608,538 2,327,579 - 2,327,579 111,156 39,732 150,888 66,061 126,466 192,527 914,544 (914,544) - 13,053,815 (748,346) 12,305,469 3,149,548 1,795,170 4,944,718 37,267,907 33,928,608 71,196,515 $ 40,417,455 $ 35,723,778 $ 76,141,233 17 CITY OF EDGEWATER,FLORIDA Balance Sheet Governmental Funds September 30,2018 Other Total Capital Projects Governmental Governmental General Fund Fund CRA Fund Funds Funds ASSETS Cash $ 2,799,716 $ 257,173 $ 155,460 $ 691,338 $ 3,903,687 Investments 2,524,703 1,696,677 - - 4,221,380 Receivables--net of allowance for uncollectibles 545,341 - 21 96 545,458 Due from other governments 593,701 464,308 - 20 1,058,029 Inventories and prepaids 14,485 - - - 14,485 Totalassets $ 6,477,946 $ 2,418,158 $ 155,481 $ 691,454 $ 9,743,039 LIABILITIES Accounts payable $ 161,985 $ 324,854 $ 2,500 $ - $ 489,339 Accrued liabilities 192,450 - - - 192,450 Dueto otherfunds 602,084 - - - 602,084 Due to other governments 2,210 - - - 2,210 Unearned revenues 80,517 - - - 80,517 Totalliabilities 1,039,246 324,854 2,500 - 1,366,600 FUND BALANCES Nonspendable: Inventories and prepaids 14,485 - - - 14,485 Restricted for: Scholarships 8,096 - - - 8,096 Public safety - - - 81,413 81,413 Debtservice 42,182 - - 78,175 120,357 Community redevelopment - - 152,981 - 152,981 Capital projects - 2,093,304 - 531,866 2,625,170 Assigned to: SubsequentyearsbudgetappropriationoffundbalancE 1,108,147 - - - 1,108,147 City Hall 907,749 - - - 907,749 OPEB 177,122 - - - 177,122 Unassigned 3,180,919 - - - 3,180,919 Total fund balances 5,438,700 2,093,304 152,981 691,454 8,376,439 Totalliabilitiesandfundbalances $ 6,477,946 $ 2,418,158 $ 155,481 $ 691,454 $ 9,743,039 The notes to the financial statements are an integral part of this statement 18 CITY OF EDGEWATER, FLORIDA Reconciliation of the Balance Sheet of Governmental Funds To the Statement of Net Position September 30,2018 Total governmental funds fund balance $ 8,376,439 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and,therefore,are not reported in the funds-total less accumulated depreciation. Land and land rights 25,211,665 Buildings and improvements 28,667,139 Infrastructure 60,419,222 Furniture and equipment 5,185,016 Construction in progress 3,046,628 Accumulated depreciation (75,574,904) 46,954,766 Internal service funds are used by management to charge the costs of fleet,management information systemsand insurance activities to individual funds.The assets and liabilities of the internal service funds are included in governmental activities in the statement of net position. 592,853 On the governmental fund statements,a net pension liability/asset is not recorded until an amount is due and payable and the pension plan's fiduciary net position is not sufficient for payment of those benefits(no such liability exists at the end of the current fiscal year).On the Statement of Net Position,the City's net pension liability/asset of the defined benefit pension plans is reported as a noncurrent liability.Additionally,deferred oufflows and deferred inflows related to pensions are also reported. Net pension liability (6,991,010) Net pension asset 835,690 Deferred outflows related to pensions 2,723,528 Deferred inflows related to pensions (803,383) (4,235,175) On the governmental fund statements,an OPEB liability is not recorded unless an amount is due and payable(no such liability exists at the end of the current fiscal year).On the Statement of Net Position,the City's OPEB liability is reported as a noncurrent liability.Additionally,deferred outflows and deferred inflows related to OPEB are also reported. OPEB liability (3,262,781) Deferred outflows related to OPEB 143,413 Deferred inflows related to OPEB (246,391) (3,365,759) Long-term liabilities are not due and payable in the current period and,therefore,are not reported in the funds. Compensated absences 1,156,842 Long-term debt 6,685,751 (7,842,593) Accrued interest payable on bonds that is not recognized on the fund statements. (63,076) Net position of governmental activities $ 40,417,455 The notes to the financial statements are an integral part of this statement. 19 CITY OF EDGEWATER, FLORIDA Statement of Revenues, Expenditures,and Changes in Fund Balances Governmental Funds For the Fiscal Year Ended September 30,2018 Other Total Capital Projects Governmental Governmental General Fund Fund CRA Fund Funds Funds REVENUES Taxes: Property $ 5,625,376 $ - $ 112,081 $ 288,480 $ 6,025,937 Utility and franchise taxes 3,608,538 - - - 3,608,538 Intergovernmental 2,964,628 1,268,458 - - 4,233,086 Licenses and permits 499,510 - - - 499,510 Chargesforservices 2,011,630 - - - 2,011,630 Fines and forfeitures 137,202 - - 14,259 151,461 Investment earnings 56,365 52,321 187 1,331 110,204 Impact fees - - - 185,507 185,507 Miscellaneous revenue 108,149 - - - 108,149 Total revenues 15,011,398 1,320,779 112,268 489,577 16,934,022 EXPENDITURES Current: Legislative 103,794 - - - 103,794 Executive 521,481 - - - 521,481 Legal counsel 113,286 - - - 113,286 Community development 610,156 - 306 - 610,462 Publicworks 809,839 66,359 - - 876,198 Public safety: Law enforcement 3,928,928 - - - 3,928,928 Fire and emergency services 3,398,597 - - - 3,398,597 Code enforcement 142,907 - - - 142,907 Animal services 129,980 - - - 129,980 Culture and recreation 1,066,734 - - - 1,066,734 General administrative services 2,813,463 - - - 2,813,463 Debt Service: Principal 253,000 - - 267,000 520,000 Interest 64,587 - - 161,257 225,844 Capital outlay 180,041 3,152,582 2,500 - 3,335,123 Total expenditures 14,136,793 3,218,941 2,806 428,257 17,786,797 Excess(deficiency)of revenues over (under)expenditures 874,605 (1,898,162) 109,462 61,320 (852,775) OTHER FINANCWG SOURCES(USES) Transfers in 888,970 108,303 - 129,836 1,127,109 Transfers out (226,107) - - (14,411) (240,518) Total other financing sources(uses) 662,863 108,303 - 115,425 886,591 Net change in fund balances 1,537,468 (1,789,859) 109,462 176,745 33,816 Beginning fund balances 3,901,232 3,883,163 43,519 514,709 8,342,623 Ending fund balances $ 5,438,700 $ 2,093,304 $ 152,981 $ 691,454 $ 8,376,439 The notes to the financial statements are an integral part of this statement. 20 CITY OF EDGEWATER, FLORIDA Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds To the Statement of Activities For the Fiscal Year Ended September 30, 2018 Net change in fund balances-total governmental funds $ 33,816 Amounts recorded for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However,in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense.This is the amount by which capital outlays exceeded depreciation in the current period. Expenditure for capital assets 3,335,123 Current year depreciation (1,877,667) 1,457,456 The net effect of various miscellaneous transactions involving capital assets (i.e.sales,trade-ins,donations,CIP project abandoned)is to decrease net position. (19,963) 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 the governmental funds. Changes in compensated absences 354,236 The net revenue of certain activities of internal service funds is reported with governmental activities. 317,297 Governmental funds report contributions to defined benefit pension/OPEB plans as expenditures. However, in the Statement of Activities,the amount contributed to defined benefit pension/OPEB plans decreases(increases)the future net pension/OPEB liability(asset).Also included in pension/OPEB expense in the Statement of Activities are deferred inflow and deferred outflow amounts required to be amortized. C;hange in net pension liability/asset and deterred intlows/outtlows related to pensions 478,610 Change in OPEB liability/asset and deferred inflows/outflows related to OPEB 8,096 The issuance of long-term debt(I.e.,bonds and leases)provides current financial resources to governmental funds,while the repayment of the principal long-term debt consumes the current financial resources of governmental funds. Neither transaction has any effect on net position.Also,governmental funds report the effect of premiums,discounts,and deferred amount on refunding, when debt is first issued,whereas these amounts are deferred and amortized in the Statement of Activities. Principal payments 520,000 Change in net position of governmental activities $ 3,149,548 The notes to the financial statements are an integral part of this statement. 21 CITY OF EDGEWATER, FLORIDA Statement of Revenues, Expenditures, and Changes in Fund Balances--Budget and Actual General Fund For the Fiscal Year Ended September 30,2018 Variance with Budgeted Amounts Final Budget- Actual Positive Original Final Amounts (Negative) REVENUES Taxes: Property $ 5,364,153 $ 5,625,377 $ 5,625,376 $ (1) Utility and franchise taxes 3,277,865 3,607,872 3,608,538 666 Intergovernmental 2,786,422 2,948,704 2,964,628 15,924 Licenses and permits 433,100 499,511 499,510 (1) Chargesforservices 1,768,541 1,992,533 2,011,630 19,097 Fines and forfeitures 187,304 137,202 137,202 - Investment earnings 22,536 56,336 56,365 29 Miscellaneous revenue 220,164 107,212 108,149 937 Total revenues 14,060,085 14,974,747 15,011,398 36,651 EXPENDITURES Current: Legislative 124,981 124,981 103,794 21,187 Executive 576,534 576,534 521,481 55,053 Legal counsel 110,000 120,000 113,286 6,714 Community development 692,885 692,885 610,156 82,729 Publicworks 962,112 1,022,635 809,839 212,796 Public safety: Law enforcement 3,986,280 4,015,366 3,928,928 86,438 Fire and emergency services 3,752,937 3,664,736 3,398,597 266,139 Code enforcement 118,599 143,937 142,907 1,030 Animal services 131,293 138,293 129,980 8,313 Culture and recreation 1,252,607 1,253,166 1,066,734 186,432 General administrative services 2,324,663 3,000,337 2,813,463 186,874 Debt service: Principal 253,002 253,002 253,000 2 Interest 36,666 64,587 64,587 - Capital outlay 81,773 261,115 180,041 81,074 Total expenditures 14,404,332 15,331,574 14,136,793 1,194,781 Excess(deficiency)of revenues over (under)expenditures (344,247) (356,827) 874,605 1,231,432 OTHER FINANCING SOURCES(USES) Transfers in 879,178 878,244 888,970 10,726 Transfers out (134,433) (754,326) (226,107) 528,219 Total other financing sources(uses) 744,745 123,918 662,863 538,945 Net change in fund balances 400,498 (232,909) 1,537,468 1,770,377 Beginningfund balances 3,901,232 3,901,232 3,901,232 - Ending fund balances $ 4,301,730 $ 3,668,323 $ 5,438,700 $ 1,770,377 The notes to the financial statements are an integral part of this statement. 22 CITY OF EDGEWATER, FLORIDA Statement of Revenues, Expenditures, and Changes in Fund Balances--Budget and Actual CRA Fund For the Fiscal Year Ended September 30, 2018 Variance with Final Budgeted Amounts Budget- Actual Positive Original Final Amounts (Negative) REVENUES Property tax $ 106,178 $ 112,081 $ 112,081 $ - Investment earnings 66 188 187 (1) Total revenues 106,244 112,269 112,268 (1) EXPENDITURES Capital outlay 146,484 146,484 2,500 143,984 Other Services&Charges 10,325 10,325 306 10,019 Total expenditures 156,809 156,809 2,806 154,003 Excess(deficiency)of revenues over(under)expenditures (50,565) (44,540) 109,462 154,002 Net change in fund balance (50,565) (44,540) 109,462 154,002 Beginning fund balances 43,519 43,519 43,519 - Ending fund balances $ (7,046) $ (1,021) $ 152,981 $ 154,002 23 CITY OF EDGEWATER, FLORIDA Statement of Net Position Proprietary Funds September 30,2018 Business-type Activities-Enterprise Funds Governmental Major Funds Activities- Water/Sewer Solid Waste Stormwater Internal Service Utility Utility Utility Total Funds ASSETS Current assets: Cash and cash equivalents $ 5,734,748 $ 1,358,513 $ 1,228,488 $ 8,321,749 $ 978,568 Investments 386,252 187,645 264,474 838,371 - Receivables,net 1,415,803 467,591 229,680 2,113,074 27,201 Due from other governments 285,062 30,764 2,283 318,109 - Due from other funds 602,084 - - 602,084 - Inventories - - - - 24,207 Prepaid items 5,000 2,500 6,731 14,231 11,581 Total current assets 8,428,949 2,047,013 1,731,656 12,207,618 1,041,557 Noncurrent assets: Restricted cash and cash equivalents: Debtservice 1,104,962 - - 1,104,962 - Capital projects 667,493 - - 667,493 - Total restricted cash and cash equivalents 1,772,455 - - 1,772,455 - Capital assets: Land and land rights 966,228 936,903 269,439 2,172,570 - Buildings and improvements 73,791,775 69,075 9,856,202 83,717,052 60,684 Machinery and equipment 8,679,169 2,136,437 1,503,754 12,319,360 364,435 Construction in progress 465,440 150,490 44,482 660,412 - Less accumulated depreciation (47,482,362) (1,697,248) (5,282,182) (54,461,792) (338,443) Total capital assets(net of accumulated depreciation) 36,420,250 1,595,657 6,391,695 44,407,602 86,676 Special assessment receivable 159,578 - - 159,578 - Totalnoncurrentassets 38,352,283 1,595,657 6,391,695 46,339,635 86,676 Total assets $ 46,781,232 $ 3,642,670 $ 8,123,351 $ 58,547,253 $ 1,128,233 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pensions $ 330,621 $ 106,241 $ 25,498 $ 462,360 $ - Deferred outflows related to OPEB 46,334 15,445 8,825 70,604 6,619 Deferred loss on refunding 12,181 - - 12,181 - Total deferred outflows of resources $ 389,136 $ 121,686 $ 34,323 $ 545,145 $ 6,619 LIABILITIES Current liabilities: Accounts payable $ 100,283 $ 62,106 $ 15,285 $ 177,674 $ 237,358 Accrued liabilities 89,026 16,259 10,614 115,899 8,073 Compensated absences 247,252 59,237 49,258 355,747 33,116 Customerdeposits 812,629 - - 812,629 - Accrued interest payable from restricted cash 131,065 - 1,138 132,203 129 Capital leases payable-current 4,775 - 7,418 12,193 - Notespayable-current 1,591,324 - 42,985 1,634,309 10,062 Revenue bonds payable-current 288,230 - - 288,230 - Total current liabilities 3,264,584 137,602 126,698 3,528,884 288,738 Noncurrent liabilities: Compensated absences 185,209 34,060 20,316 239,585 36,551 Bonds,notes,and capital leases payable 13,923,896 - 257,048 14,180,944 54,748 Net pension liability 2,639,775 848,257 203,582 3,691,614 - OPEB liability 1,054,130 351,377 200,787 1,606,294 150,590 Total noncurrent liabilities 17,803,010 1,233,694 681,733 19,718,437 241,889 Totalliabilities $ 21,067,594 $ 1,371,296 $ 808,431 $ 23,247,321 $ 530,627 DEFERRED INFLOWS OF RESOURCES Deferred inflows related to OPEB 79,603 26,534 15,162 121,299 11,372 Total deferred inflows of resources 79,603 26,534 15,162 121,299 11,372 NET POSITION Net investment in capital assets $ 20,624,206 $ 1,595,657 $ 6,084,244 $ 28,304,107 $ 21,866 Restricted: Capital projects 667,493 - - 667,493 - Debt service 973,897 - - 973,897 - Unrestricted 3,757,575 770,869 1,249,837 5,778,281 570,987 Total net position $ 26,023,171 $ 2,366,526 $ 7,334,081 $ 35,723,778 $ 592,853 The notes to the financial statements are an integral part of this statement. 24 CITY OF EDGEWATER, FLORIDA Statement of Revenues, Expense and Changes in Fund Net Position Proprietary Funds For the Fiscal Year Ended September 30,2018 Business-type Activities-Enterprise Funds Governmental Major Funds Activities- Water/Sewer Solid Waste Stormwater Internal Service Utility Utility Utility Total Funds Operating revenues: Charges for sales and services $ 10,216,833 $ 3,570,233 $ 1,720,625 $ 15,507,691 $ 4,831,562 Total operating revenues 10,216,833 3,570,233 1,720,625 15,507,691 4,831,562 Operating expenses: Salaries and employee benefits 3,111,312 1,038,865 598,040 4,748,217 3,046,069 Supplies and materials 654,666 123,452 37,347 815,465 524,881 Contract services 417,554 898,214 24,497 1,340,265 206,167 Other services and charges 1,836,032 511,978 257,261 2,605,271 704,265 Depreciation and amortization 2,792,093 106,414 448,491 3,346,998 60,127 Total operating expenses 8,811,657 2,678,923 1,365,636 12,856,216 4,541,509 Operating income(loss) 1,405,176 891,310 354,989 2,651,475 290,053 Nonoperating revenues(expenses): Investment earnings 31,200 1,762 6,770 39,732 952 Miscellaneous revenues 99,854 20,663 5,949 126,466 - Gain(Loss)on disposition of capital assets (51,696) - - (51,696) - Interest expense (355,379) - (7,725) (363,104) (1,661) Total nonoperating revenues(expenses) (276,021) 22,425 4,994 (248,602) (709) Income(loss)before capital contributions and transfers 1,129,155 913,735 359,983 2,402,873 289,344 Transfers in 179,305 - 540,783 720,088 27,953 Transfersout (1,125,007) (224,850) (284,775) (1,634,632) - Capital grants 16,136 - - 16,136 - Capital contributions 290,505 - 200 290,705 - Change in net position 490,094 688,885 616,191 1,795,170 317,297 Total net position-beginning,as restated 25,533,077 1,677,641 6,717,890 33,928,608 275,556 Total net position-ending $ 26,023,171 $ 2,366,526 $ 7,334,081 $ 35,723,778 $ 592,853 The notes to the financial statements are an integral part of this statement. 25 CITY OF EDGEWATER, FLORIDA Statement of Cash Flows Proprietary Funds For the Fiscal Year Ended September 30,2018 Business-type Activities-Enterprise Funds Governmental Major Funds Activities- Water/Sewer Solid Waste Stormwater Internal Service Utility Utility Utility Total Funds Cash flows from operating activities: Receipts-customersandusers $ 10,149,987 $ 3,524,582 $ 1,689,774 $ 15,364,343 $ 4,816,138 Payments-suppliers (2,953,525) (1,557,591) (322,949) (4,834,065) (4,020,714) Payments-employees (3,143,575) (1,068,116) (587,125) (4,798,816) (422,182) Net cash provided(used)by operating activities 4,052,887 898,875 779,700 5,731,462 373,242 Cash flows from noncapital financing activities: Cash paid to other funds (584,224) (224,850) (284,775) (1,093,849) - Cash received from otherfunds (net) 1,318,313 - 179,305 1,497,618 27,953 Net cash provided(used)by noncapital financing activities 734,089 (224,850) (105,470) 403,769 27,953 Cash flows from capital and related financing activities: Acquisition and construdion of capital assets (393,923) (117,020) (88,922) (599,865) - Grant revenue 284,031 349,613 12,690 646,334 - Interestpaymentsondebt (367,603) - (7,948) (375,551) (1,680) Capital contributions and fees 390,359 20,663 6,149 417,171 - Proceeds from issuance of debt 32,155 - - 32,155 - Principal paid on debt (1,839,876) - (49,232) (1,889,108) (9,826) Net cash provided(used)by capital and related financing activities (1,894,857) 253,256 (127,263) (1,768,864) (11,506) Cash flows from investing activities: Interestoninvestments 31,200 1,762 6,770 39,732 952 Purchase of investment securities (386,252) (187,645) (264,474) (838,371) - Net cash provided(used)by investing activities (355,052) (185,883) (257,704) (798,639) 952 Net increase(decrease)in cash and cash equivalents 2,537,067 741,398 289,263 3,567,728 390,641 Beginning cash and cash equivalents 4,970,136 617,115 939,225 6,526,476 587,927 Ending cash and cash equivalents $ 7,507,203 $ 1,358,513 $ 1,228,488 $ 10,094,204 $ 978,568 Reconciliation of operating income(loss)to net cash provided by (used)by operating adivities: Operating income $ 1,405,176 $ 891,310 $ 354,989 $ 2,651,475 $ 290,053 Adjustments to reconcile operating income(loss)to net cash provided (used)by operating adivities: Depreciation and amortization 2,792,093 106,414 448,491 3,346,998 60,127 (Increase)decrease in assets: Accounts receivable (66,846) (45,651) (30,851) (143,348) (15,424) Inventories - - - - 6,754 Prepaid items 4,038 - (4,231) (193) 9,943 Increase(decrease)in liabilities: Accounts payable and accrued expenses (23,760) (23,947) 387 (47,320) 20,865 Compensated absences (10,743) (18,169) 13,864 (15,048) 1,297 Net pension liability (18,904) (10,209) (2,451) (31,564) - OPEB liability (2,616) (873) (498) (3,987) (373) Customerdeposits (25,551) - - (25,551) - Total adjustments 2,647,711 7,565 424,711 3,079,987 83,189 Net cash provided(used)by operating activities $ 4,052,887 $ 898,875 $ 779,700 $ 5,731,462 $ 373,242 Classified As: Cash and cash equivalents $ 5,734,748 $ 1,358,513 $ 1,228,488 $ 8,321,749 $ 978,568 Restrided cash and cash equivalents 1,772,455 - - 1,772,455 - Total 7,507,203 1,358,513 1,228,488 10,094,204 978,568 Non-cash investing,capital,and financing adivities: Capital assets transferred(to)from other funds $ (540,783) $ - $ 540,783 $ - $ - The notes to the financial statements are an integral part of this statement. 26 CITY OF EDGEWATER, FLORIDA Statement of Fiduciary Net Position Fiduciary Funds September 30, 2018 Pension TrustFunds ASSETS Cash and cash equivalents $ 1,179,475 Accrued interest 112,642 Bonds US Treasury notes 1,234,260 GNMA/FMNA 2,981,764 Municipal bonds 318,493 Corporate bonds 7,545,965 Equities 10,825,910 Mutual fund-equities 13,367,635 Total assets 37,566,144 NET POSITION Restricted for pensions $ 37,566,144 The notes to the financial statements are an integral part of this statement. 27 CITY OF EDGEWATER, FLORIDA Statement of Changes in Fiduciary Net Position Pension Trust Funds For the Fiscal Year Ended September 30, 2018 Pension Trust Funds ADDITIONS Contributions: Employer $ 1,915,482 Employee 213,254 State of Florida 314,962 Total contributions 2,443,698 Investment earnings: Interest and dividends 1,357,982 Net increase in the fair value of investments 1,972,829 Total investment earnings 3,330,811 Less investment expenses (151,277) Net investment earnings 3,179,534 Total Additions 5,623,232 DEDUCTIONS Pension benefits 2,906,309 Administrative expenses 149,881 Total deductions 3,056,190 Change in net position 2,567,042 Net position-beginning of year 34,999,102 Net position-end of year $ 37,566,144 The notes to the financial statements are an integral part of this statement. 28 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 I. Summary of Significant Accounting Policies The accompanying financial statements present the financial position, changes in financial position and cash flows of the applicable fund types governed by the City Council of the City of Edgewater, Florida ("the City") and 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 principles. The most significant of the City's accounting policies are described below. A. Reporting Entity: The City of Edgewater was originally incorporated under general law on October 20, 1924. The City became the City of Edgewater and incorporated in 1951 as a political subdivision of the State of Florida and a municipal corporation with a five-member Council, including a Mayor and Vice-Mayor. The registered voters of the City of Edgewater elect the Mayor and Council. The Council appoints the City Manager, who in turn performs as the administrator of the everyday operations of the City. The City provides a full range of municipal services as directed by the City Charter including general government, public safety, public improvements, planning and zoning, water and sewer service, solid waste collection, a recycling program, a stormwater management utility program, and related general and administrative services to 23,319 residents. In evaluating how to define the government, for financial reporting purposes, the City has considered all potential component units. The definition of the reporting entity is based primarily on the notion of financial accountability. A primary government is financially accountable for the organizations that make up its legal entity. It is also financially accountable for legally separate organizations if its officials appoint a voting majority of an organization's governing body, and either it is able to impose its will on that organization or there is a potential for the organization to provide specific financial benefits to, or to impose specific financial burdens on, the primary government. A primary government may also be financially accountable for governmental organizations that are fiscally dependent on it. A primary government has the ability to impose its will on an organization if it can significantly influence the programs, projects or activities of, or the level of services performed or provided by, the organization. A financial benefit or burden relationship exists if the primary government (a) is entitled to the organizations' resources; (b) is legally obligated or has otherwise assumed the obligation to finance the deficits of, or provide financial support to, the organization; or (c) is obligated in some manner for the debt of the organization. In applying the above criteria, management has determined there is one component unit to be included within the reporting entity. The City of Edgewater, Florida, Edgewater Community Redevelopment Agency (CRA) was created by Ordinance No. 2015-0-04 to account for the receipt and expenditure of property tax revenues from the tax increment financing district to support City redevelopment in the designated community redevelopment area. The CRA's focus is mitigation or correction of infrastructure and utilities deficiencies, revitalization of the Ridgewood Avenue (US-1) corridor, various transportation and urban design improvements, and pedestrian safety issues. Although legally separate the City Council declared itself to be the CRA Board, and provided for the appointment of two additional members. Since the City is financially accountable for the activities of the CRA, its governing board is the same, and its relationship to the City is significant, its financial activities are reported on a blended basis as if it were part of the primary government as a major special revenue fund. Activity began in the CRA Fund during the fiscal year ended September 30, 2016. 29 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 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 non-fiduciary activities of the City. For the most part the effect of inter-fund 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. Certain indirect expenses are included in the program expense reported for individual functions and segments. 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 as general revenues. Separate fund 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 in the fund financial statements. C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation: The government-wide financial statements are reported using the economic resources measurement focus and the full 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 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. Grant funds received prior to the incurrence of eligible expenditures are reported as deferred revenues in the fund financial statements and are included in accounts payable and other current liabilities on the government-wide financial statements. 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 City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. When grant terms provide that an expenditure of resources is the prime factor for determining eligibility for Federal, State, and other grant resources, revenue is recognized at the time the expenditure is made. 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 when payment is due. Property taxes, franchise taxes, certain other tax revenues, intergovernmental revenues, 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. All other revenue items are considered to be measurable and available only when the City receives cash. 30 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 The City reports the following major governmental funds: ■ The Genera/Fund is the City's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. ■ The Capital Projects Fund is used to account for the financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary and trust funds). ■ The Community Redevelopment Agency (CRA) Fund is used to account for the receipt and expenditure of property tax revenues from the tax increment financing district to support City redevelopment in the designated community redevelopment area. The City reports the following major proprietary funds: ■ The Water and Sewer Utility Fund is used to account for the activities of the City's water and wastewater systems, which are financed similar to private business enterprises, where the costs, including depreciation, of providing services to the general public on an ongoing basis are financed through user charges. ■ The Solid Waste Utility Fund accounts for the activities of the City's solid waste collection and recycling services. ■ The Stormwater Management Utility Fund accounts for the activities of the City's stormwater management, conservation, protection, control, use and enhancement of stormwater. Additionally, the City reports the following fund types: ■ Special Revenue Funds account for specific revenue resources that are restricted by law or administrative action to expenditures for specific purposes. ■ Pension Trust Funds account for the activities of the Police Officers Pension Fund, the Firefighters Pension Fund and the General Employees' Pension Fund, which accumulate resources for pension benefit payments to qualified employees. ■ Internal Services Funds account for fleet management services, management information systems, general liability insurance, health insurance, and workers' compensation insurance. As a rule the effect of inter-fund activity has been eliminated from the government-wide financial statements. Exceptions to the rule are payments-in-lieu of taxes and other charges between the government's water, sewer, and stormwater functions and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include: 1. Charges to customers or applicants for goods, services, or privileges provided, 2. Operating grants and contributions, and 3. Capital grants and contributions. Internal, dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. 31 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 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 Water and Sewer Utility Fund, the Solid Waste Utility Fund, and the Stormwater Management Utility Fund are charges to customers for sales and services. The Water and Sewer Utility fund also recognizes as operating revenue the portion of impact fees intended to recover the cost of connecting new customers to the system. Operating expenses for the enterprise and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. Sometimes the government will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted — net position and unrestricted — net position in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the government's policy to consider restricted — net position to have been depleted before unrestricted— net position is applied. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make use of estimates that affect reported amounts in the basic financial statements. Actual results could differ from estimates. D.Assets, Liabilities, Deferred Outflows/Inflows of Resources,and Net Position or Equity 1. Deposits and investments The City's cash consists of cash on hand, demand deposits, and equity in pooled cash. The equity in pooled cash represents a fund's share of a cash pool maintained by the City for the use of all funds except the pension trust funds and funds that require separate bank accounts. For the statement of cash flows, the City considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Florida Statutes and/or the City's investment policy authorize the City to invest in the Local Government Surplus Funds Trust Fund Investment Pool, United States Government Securities, United States Government Agencies, Federal Instrumentalities, Interest Bearing Time Deposit or Saving Accounts, Repurchase Agreements, Commercial Paper, High Grade Corporate Notes, Bankers' Acceptances, State and/or Local Government Taxable and/or Tax-Exempt Debt, Registered Investment Companies (Money Market Mutual Funds), and Intergovernmental Investment Pools. Florida Statutes and/or the pension plans' investment policies allow the City's retirement plans'trustees to invest in time deposits, savings and money market deposit accounts of a national bank, a state bank insured by the Bank Insurance Fund, a savings/building and loan association insured by the Savings Association Insurance Fund, a state or federal chartered credit union whose share accounts are insured by the National Credit Union Share Insurance Fund; Obligations issued by the United States Government or obligations guaranteed as to principal and interest by the United States Government or by an agency of the United States Government; stocks, bonds or other evidences of indebtedness issued or guaranteed by a corporation organized under the laws of the United States or the District of Columbia; foreign stocks, bonds or other evidences of indebtedness; and real estate investments made through participation in diversified commingled funds of real properties. Investments are recorded at fair value in accordance with GASB Statement No. 72, Fair Value Measurement and Application (generally based on quoted market prices). Accordingly, the change in fair value of investments is recognized as an increase or decrease to investment assets and investment income. Securities traded on a national or international exchange are valued at the last reported sales price at current exchange rates. FLCLASS securities are valued at the amortized cost of investments, 32 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 which approximates fair value. Real estate assets are reported at fair value utilizing an income approach to valuation. Changes in the fair value during the year are included in investment income. The Local Governmental Surplus Funds Trust Fund (LGSF) is governed by Chapter 19-7 of the Florida Administrative Code which identifies the Rules of the State Board of Administration (SBA). These rules provide guidance and establish the general operating procedures for the administration of the LGSF. The LGSF is not a registrant with the Securities and Exchange Commission. The LGSF Pool's investments are recorded at amortized cost. The fair value of the City's position in the pool is the same as the value of the pool shares. 2. 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/due from other funds" (i.e., the current portion of inter- fund loans) or "advances to/from other funds" (i.e., the non-current portion of inter-fund loans). All other outstanding balances between funds are reported as "due to/due from other funds". Any residual balances outstanding between governmental activities and business-type activities are reported in the government-wide financial statements as "internal balances". Accounts receivable balances are shown net of the allowance for uncollectibles. The allowances are determined based on management estimates of uncollectible amounts. Advances between funds, as reported in the fund financial statements, are offset by nonspendable fund balance in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. 3. 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. Payments made to vendors for services that will benefit periods beyond the current fiscal year are recorded as prepaid items. Costs are recorded as expenditures when consumed rather than when purchased. 4. Restricted assets Certain proceeds of revenue bonds, as well as certain resources set aside for their repayment, are classified as restricted assets on the balance sheet and statement of net position and their use is limited by applicable bond covenants. Restricted cash and investments in the enterprise funds represent debt issuance proceeds that are restricted assets for purchase of assets, construction and repayment of bonded debt respectively. In the enterprise fund statement of net position, bond issuance proceeds as well as other assets are set aside for their repayment and itemized in the restricted cash and investments. 5. Capital assets In the Government Wde and Proprietary Fund financial statements, capital assets purchased or acquired are carried at historical cost or estimated historical cost. Contributed assets are recorded at acquisition value as of the date received. Donated capital assets, donated works of art and similar items, and capital assets received in a service concession arrangement are reported at acquisition value. The City defines capital assets as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. The costs of normal maintenance and repairs that do not add to the value of the assets or materially extend asset lives are not capitalized. The City has implemented the provisions of GASB Statement No. 34. In this process, infrastructure assets are being accounted for using different methods. For governmental activities, the cost or estimated cost of roads and sidewalks are presented. The City compiled this information and recorded all roads and sidewalks acquired after June 30, 1980 during the fiscal year ending September 30, 2007. For business type activities, infrastructure assets have been capitalized at cost. Water and sewer utility improvements 33 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 are being depreciated over their useful lives. The City has recorded all drainage infrastructure acquired including pre-GASB 34 assets. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed, net of any interest earnings on specific project debt issued. In Governmental funds capital outlay (capital assets) are reported as expenditures and no depreciation expense is reported. Buildings and improvements, improvements other than buildings, and machinery and equipment (including assets amortized under lease purchase contracts) are amortized using the straight-line method over the following estimated useful lives: Infrastructure 20-30 Years Buildings and improvements 10-50 Years Improvements otherthan buildings 5-65 Years Machinery and equipment 3-35 Years 6. Deferred outflows of resources In addition to assets, the statement of financial 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 future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City has three items that qualify for reporting as deferred outflows of resources, reported in both the government-wide statement of financial position and the proprietary funds statement of financial position. The first item is a deferred loss on refunding of debt which will be amortized and recognized as interest expense through the year ended September 30, 2021. The other two items are the deferred outflows related to pensions and other post-employment benefits (OPEB) which are calculated in accordance with GASB Statement No. 68, Accounting and Financial Reporting for Pensions, and GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. The deferred outflows related to pensions and OPEB will be recognized as either pension/OPEB expense or a reduction in the net pension/OPEB liability, respectively, in future reporting years. Details on the composition of deferred outflows related to pensions and OPEB are reported in subsequent notes. 7. Compensated absences The City records the vested portion of accumulated unused compensated absences at year-end based on each employee's unused hours and rate of pay, including the City's share of Social Security and Medicare taxes and pension costs. All compensated absences are accrued when earned in the government-wide and proprietary fund financial statements as accrued liabilities. A liability for these amounts is reported in the governmental funds only if they have matured, for example, as a result of employee resignations and retirements. The liability for compensated absences in the Proprietary Fund Types is liquidated in the Proprietary Fund in which the liability originally incurred. 8. 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 premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are expenses when paid. 34 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 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. Issuances costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. The compensated absences, net pension liabilities, and OPEB liabilities are liquidated by the reporting units of the underlying employees, including the general fund, governmental funds, and all proprietary funds where the respective liability is reported. 9. Deferred inflows of resources In addition to liabilities, the statement of financial 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 future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. Currently, the City has two items that qualify for reporting as deferred inflows of resources, in both the government-wide statement of financial position and the proprietary funds statement of financial position. The first item is the deferred inflows related to pensions. The two items are the deferred inflows related to pensions and other post-employment benefits (OPEB) which are calculated in accordance with GASB Statement No. 68, Accounting and Financial Reporting for Pensions, and GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. The deferred inflows related to pensions and OPEB will be recognized as a component of pension/OPEB expense in future reporting years. Details on the composition of deferred inflows related to pensions and OPEB are reported in subsequent notes. 10. Fund balance Beginning with fiscal year 2011, the City implemented GASB Statement No. 54, "Fund Balance Reporting and Governmental Fund Type Definitions." This Statement provides more clearly defined fund balance categories to make the nature and extent of the constraints placed on a government's fund balance more transparent. The following classifications describe the relative strength of the spending constraints: Nonspendable fund balance - amounts that are not in spendable form (such as prepaid expenses and advances due from other funds) or are required to be maintained intact. Restricted fund balance - amounts constrained to specific purposes by their providers (such as grantors, bondholders, and higher levels of government), through constitutional provisions or by enabling legislation. Committed fund balance - amounts constrained to specific purposes by the City itself, using its highest level of decision-making authority (City Council). To be reported as committed, amounts cannot be used for any other purpose unless the City takes the same highest level action to remove or change the constraint. City Council establishes (and modifies or rescinds) fund balance commitments by passage of a resolution. Assigned fund balance - amounts the City intends to use for a specific purpose. Intent can be expressed by the City Council or as delegated to the City Manager. The City Council has by resolution authorized City management to assign fund balance. The City Council may also assign fund balance as it does when appropriating fund balance to cover a gap between estimated revenue and appropriations in the subsequent year's appropriated budget. Unlike commitments, assignments generally only exist temporarily. In other words, an additional action does not normally have to be taken for the removal of an 35 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 assignment. Conversely, as discussed above, an additional action is essential to either remove or revise a commitment. Unassigned fund balance - amounts that are available for any purpose. Positive amounts are reported only in the general fund. Disbursements of fund balances will first be made from restricted amounts when both restricted and unrestricted fund balance is available. Additionally, the City will first use committed fund balance, followed by assigned fund balance, and then unassigned fund balance when expenditures are incurred for purposes which amounts in any of the unrestricted fund balance classifications could be used. 11. Pensions For purposes of ineasuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City's defined benefit retirement plans, as described in Note C of the Other Matters section, and additions to/deductions from the pension plans' fiduciary net position have been determined on the same basis as they are reported by the pension plans. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with benefit terms. Investments are reported at fair value. II. Reconciliation of Government-wide and Fund Financial Statements A. Explanation of Certain Differences Between the Governmental Fund Balance Sheet and the Government-wide Statement of Net Position: The governmental fund balance sheet includes reconciliation between fund balance — total governmental funds and net position — governmental activities as reported in the government-wide statement of net position. B. Explanation of Certain Differences Between the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances and the Government-wide Statement of Activities: The governmental fund statement of revenues, expenditures, and changes in fund balance includes reconciliation between net change in fund balance— total governmental funds and change in net position ofgovernmental activities as reported in the government-wide statement of activities. III. Stewardship, Compliance and Accountability A. Budgetary Information: The annual operating budgets are adopted by City Council using the following procedures: ■ Annual budgets are adopted for all funds of the City except for the Pension Trust funds that are effectively controlled through governing agreements and related City ordinances. The annual operating budgets are prepared on a basis consistent with accounting principles generally accepted in the United States of America. Annual budget appropriations lapse at the end of each fiscal year, except for unexpended appropriations on open grant programs and capital projects, which are carried forward in subsequent annual budgets. ■ Encumbrance accounting is employed in governmental funds. Encumbrances represent open purchase orders and other commitments for goods/services that are not yet received and are recorded to reserve that portion of the applicable appropriation. Encumbrances are recognized as expenditures in the period in which the actual goods/services are received and a liability is incurred. Encumbrances outstanding at year-end are canceled and re-appropriated in the succeeding year's budget; such amounts, if material, are disclosed in the notes as commitments. 36 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 ■ Prior to the first day of August of each year, the City Manager prepares a recommended budget for the next succeeding fiscal year and submits it to the City Council. The recommended budget includes proposed expenditures and the source of receipts to finance them. ■ City Council holds a series of budget workshops in addition to a minimum of two public hearings on the proposed budget and adopts the official annual budget of the City, by ordinance, prior to September 30. ■ The budget, as adopted, may only be amended through formal approval by City Council. Budgetary integration is established in the accounting records for control purposes at the object of expenditure level; however, the City Charter establishes the level at which expenditures may not legally exceed budget at the fund level. Therefore, the City Manager may transfer budgeted amounts within and between departments of the City without formal approval by City Council. B.Ad Valorem Property Taxes: Under Florida law, the assessment of all properties and the collections of all county, municipal, and school board property taxes are consolidated in the offices of the County Property Appraiser and the County Tax Collector. Florida Statutes regulating tax assessment are also designed to assure a consistent property valuation method statewide. State Statutes permit cities to levy property taxes at a rate of up to ten (10) mills. For the fiscal year ended September 30, 2018, the millage rate in effect was $6.7000 and the Edgewater I&S 2005 voted debt millage was $.0445 for a total millage of$6.7445. The tax levy of the City is established by the City Council prior to October 1 of each year and the Volusia County Property Appraiser incorporates the millage into the total tax levy, which includes the municipalities, independent districts and the County School Board tax requirements. Property taxes are levied in November and attached as a lien on property as of January 1 of each year. All unpaid taxes become delinquent on April 1 following the year in which they are assessed. Discounts are allowed for early payment at the rate of 4% for payments received in the month of November, 3% for payments received in the month of December, 2% for payments received in the month of January and 1% for payments received in the month of February. The taxes paid in March are not subject to discount. Tax certificates on all property for which taxes are delinquent are sold on or about June 1 of each year. C. Connection Fees and Impact Fees: Water and sewer connection fees represent reimbursement of the costs incurred to perform the connection of the respective utilities. These fees are recorded as non-operating revenue at the time of service. Impact fees, which are not considered connection fees since they substantially exceed the cost of connection, are recorded as non-operating revenue in the period earned in the appropriate Enterprise Fund. D. Reserve Policy The City Council has approved a reserve policy, which was adopted within the City Charter. The policy addresses that the City is required to maintain reserves at a minimum of 15 percent for all operating funds. The reserve minimum is established based on a percentage of current years' budgeted operating expenditures and transfers out. Reserve levels above the minimum are deemed to be available for capital or other lawful purposes. IV. Detailed Notes on All Funds A. Deposits: At September 30, 2018, the carrying amount of the City's bank deposits was $14,976,459. The bank balance at September 30, 2018 was $15,037,750, all of which is held by a bank that qualifies as a public depository, as required by Chapter 280 of the Florida Statutes. All of the deposits were covered by the 37 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 FDIC or collateralized in accordance with the "Florida Security for Public Deposits Act". (Under the Act, every qualified public depository shall deposit with the Treasurer eligible collateral having a market value equal to 50% of the average daily balance for each month that all public deposits are in excess of any applicable deposit insurance. If the public deposits exceed the total amount of the regulatory capital accounts of a bank or the regulatory net worth of a savings association, the required collateral shall have a market value equal to 125% of the deposits). Of the bank balance, no amount was uninsured and uncollateralized in banks or savings and loans not qualifying under the Act at September 30, 2018. B. Investments: The City Council formally adopted a comprehensive investment policy pursuant to Section 218.415, Florida Statutes that established permitted investments, asset allocation limits and issuer limits, credit ratings requirements and maturity limits to protect the City's cash and investment assets. The City maintains a cash and investment pool for the use of all funds except the pension trust funds and funds that require separate bank accounts. The City's investment policy allows for the following investments: Local Government Surplus Funds Trusts (SBA), SEC registered money market funds, Interest- bearing time deposits or savings accounts, direct obligations of the U.S. Treasury, Federal agencies and instrumentalities, Securities of, or other interests in, any open-end or closed-end management-type investment company or investment trust registered under the Investment Company Act of 1940, Intergovernmental Investment Pools (FLCLASS), and Other investments authorized by ordinance. Investments of the defined benefit pension plans consist principally of debt and equity mutual funds, all of which are authorized by the plans. The City measures and records its investments, assets whose use is limited, and restricted assets using fair value measurement guidelines established by GASB Statement No. 72. These guidelines recognize a three-tiered fair value hierarchy, as follows: • Level 1: Quoted prices for identical investments in active markets; • Leve/2: Observable inputs other than quoted market prices; and, • Leve/3: Unobservable inputs. As of September 30, 2018, the City had the following investments, effective duration presented in terms of years, and fair value hierarchy level: Investment Maturities(in Years) Fair Value More Credit Hierarchy Investment Type Fair Value Less Than 1 1-5 6-10 Than 10 Rating Level Government-wide Investments Subject to Rate Risk: SBA LGIP $ 4,559,468 $ 4,559,468 $ - $ - $ - AAAm N/A FLCLASS 500,283 500,283 - - - AAAm N/A Total government-wide investments $ 5,059,751 $ 5,059,751 $ - $ - $ - Fiduciary Funds Investments Subject to Rate Risk: Moneymarketfunds $ 1,179,475 $ 1,179,475 $ - $ - $ - N/A 1 Bonds: US treasury notes 1,234,260 - - - 1,234,260 N/A 1 GNMA 2,981,764 - 321,109 274,060 2,386,595 * 2 Municipal obligations 318,493 154,699 163,794 - - ** 2 Corporate bonds 7,545,964 777,889 3,817,014 1,719,870 1,231,191 *** 2 13,259,956 $ 2,112,063 $ 4,301,917 $ 1,993,930 $ 4,852,046 Other Investments: Corporate equities 10,825,910 1 Mutual funds—equity 12,348,523 1 American Core Realty Fund 1,019,112 3 Total other investments 24,193,545 Total fiduciary fund investments 37,453,502 Total City Investments $ 42,513,253 38 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 * - The Standard and Poor's credit ratings range from BBB to A+ and Moody's credit ratings range from Baa2 to Aaa for the GNMA securities. ** - The Standard and Poor's credit ratings range from BBB+ to AA- and Moody's credit ratings range from A2 to Aa1 for the Municipal obligations. *** - The Standard and Poor's credit ratings range from BBB to AAA and Moody's credit ratings range from Ba2 to Aaa for the Corporate bonds. The following is a description of the valuation techniques used for assets measured at fair value: US treasury notes, GNMA, and Municipal obligations—Valued based on face value of the instruments adjusted for inflation and interest maturities. Corporate Bonds— Valued based on face value of the instruments adjusted for inflation and interest maturities. Corporate Equities and Mutual Funds—Valued at fair value based on quoted market prices at year end. Money Market Funds—Valued at the underlying fund balance. Units in the American Core Realty Fund (the Core Fund) are offered and sold by means of a private placement offering conducted in compliance with Rule 506 of Regulation D under the Securities Act of 1933, as amended. The Core Fund is an open-end diversified core commingled real estate fund that invests in private real estate and is structured as a Delaware limited partnership. As a result, the City of Edgewater Police Officers' Retirement Plan owns units in the Core Fund, and the Core Fund holds no securities on behalf of the Retirement Plan's account in the Core Fund. As of September 30, 2018, the Retirement Plan held 8.1568 units and the net asset value of the Retirement Plan's units on that date was $1,019,112. Units are purchased and redeemed through periodic transactions and the value of the units purchased or sold in such transactions is based on the unit value applicable to the valuation date at which each individual transaction occurred. As of September 30, 2018, all of the Core Fund's investments were categorized as Level 3. Valuation techniques used to determine fair value for the assets in the Core Fund vary based on the asset category, and include discounted cash flow, direct capitalization sales approach, and cash equivalency. Requests for redemptions of units in the American Core Realty Fund may be made at any time, with 10 business day's notification by submitting a Redemption Notice form signed by a representative of the City of Edgewater Police Officers' Retirement Plan, and are effective at the end of the calendar quarter in which the request is received by American Realty Advisors (ARA). The units that are subject to a redemption notice may be redeemed in full or in installments on a pro-rata basis as funds become available for such purpose and the redemption price will be the value per unit based on ARA's estimate of the fair value of the Core Fund's net assets as computed under generally accepted accounting principles at such time that each payment is made. Although ARA is required to use reasonable efforts to cause the Core Fund to pay the redemption price as soon as practicable after the effective date of the request, redemptions are subject to the availability of cash flow arising from investment transactions, sales and other fund operations occurring in the normal course of business. ARA is not required to liquidate or encumber assets or defer investments in order to satisfy redemption requests. As of September 30, 2018, there were no unfunded commitments. Interest Rate Risk The City's investment policy does not specifically address interest rate risk; however the general investment policy is to apply the prudent-person rule: Investments are made as a prudent person would be expected to act, with discretion and intelligence, to seek reasonable income, preserve capital, and in general, avoid speculative investments. The City manages its exposure to declines in fair values by investing primarily in pooled investments that have a weighted average maturity of one year or less, with a special provision allowing up to 20% of the investment portfolio to have a maturity of not more than five years. 39 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 Credit Risk The City's investment policy limits credit risk by restricting authorized investments to those described above. Also the policy requires that investments held are to be diversified to the extent practicable to control the risk of loss resulting from over concentration of assets in a specific maturity, issue, instrument, dealer or bank through which financial instruments are bought and sold. Custodial Credit Risk The City's investment policy pursuant to Section 218.415(18), Florida Statutes requires securities, with the exception of certificates of deposits, shall be held with a third party custodian; and all securities purchased by, and all collateral obtained by the City should be properly designated as an asset of the City. The securities must be held in an account separate and apart from the assets of the financial institution. A third party custodian is defined as any bank depository chartered by the Federal Government, the State of Florida, or any other state or territory of the United States which has a branch or principal place of business in the State of Florida, or by a national association organized and existing under the laws of the United States which is authorized to accept and execute trusts and which is doing business in the State of Florida. Certificates of deposits will be placed in the provider's safekeeping department for the term of the deposit. As of September 30, 2018, the City's investment portfolio was held with a third-party custodian as required by the City's investment policy. The City's investment policy requires that time deposit investments be made only with banking institutions that are members of the State of Florida collateral pool. Florida Statutes authorize, and the state administers, a collateral pool that ensures no loss of public funds. Concentration of Credit Risk The City's investment policy requires diversification, but does not specify limits on types of investments. C. Receivables: Receivables as of year-end including the applicable allowances for uncollectible accounts are as follows: Capital Nonmajor Governmental Funds General Projects CRA Funds Total Receivables: Accounts $ 550,590 $ - $ 21 $ 96 $ 550,707 Intergovernmental 593,701 464,308 - 20 1,058,029 Gross receivables 1,144,291 464,308 21 116 1,608,736 Less:allowance for uncollectible (5,249) - - - (5,249) Nettotalreceivables $ 1,139,042 $ 464,308 $ 21 $ 116 $ 1,603,487 Water/ Stormwater Internal Proprietary Funds Sewer Utility Solid Waste Utility Utility Service Total Receivables: Accounts $ 1,761,123 $ 566,484 $ 301,318 $ 27,201 $ 2,656,126 Intergovernmental 285,062 30,764 2,283 - 318,109 Special Assessments 159,578 - - - 159,578 Gross receivables 2,205,763 597,248 303,601 27,201 3,133,813 Less:allowance for uncollectible (345,320) (98,893) (71,638) - (515,851) Net total receivables $ 1,860,443 $ 498,355 $ 231,963 $ 27,201 $ 2,617,962 40 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 Governmental funds report deferred inflows in connection with receivables for revenues that are not considered to be available to liquidate liabilities in the current period. No deferred inflows are reported as of September 30, 2018. Governmental funds also defer revenue recognition and report unearned revenue in connection with resources that have been received, but not yet earned. At the end of the fiscal year, unearned revenue, in the amount of $80,517, reported in the major and non-major governmental funds was unearned business tax receipts. Such amounts have also been included as current liabilities on the government-wide financial statements. Approximately $300,000 of the intergovernmental receivable amounts relates to Federal and State reimbursements related to Hurricane Matthew, which impacted the City in fiscal year 2017. These amounts reflect management's best estimate of recoveries based on costs incurred and approved project worksheets, and are subject to change pending adjustments made by the respective Federal and/or State agencies. The City incurred expenditures of approximately $670,000 related to Hurricane Irma, which also impacted the City in fiscal year 2017. No intergovernmental revenue or receivable amounts have been recorded for Federal and State reimbursements related to Hurricane Irma because no project worksheets have been approved. While the City does expect project worksheets to be approved, the reimbursement amounts are not determinable and are subject to change pending adjustments made by the respective Federal and/or State agencies. D. InterFund Receivables, Payables, and Transfers: The composition of Interfund balances as of September 30, 2018, is as follows: Due from/to other funds and advances from/to other funds: Receivable Funds Payable Funds Amount Water Sewer General $ 602,084 The composition of Interfund transfers for the year ended September 30, 2018, is as follows: Transfers In Debt Capital Internal Service General Fund Service Projects Water Sewer Stormwater MIS Total Transfers Out: General Fund $ - $ 129,836 $ 96,271 $ - $ - $ - $ 226,107 Justice Assistant 2,379 - - - - - 2,379 Recreation Impact Fee - - 12,032 - - - 12,032 Enterprise: WaterSewer 575,424 - - - 540,783 8,800 1,125,007 Solid Waste 210,097 - - - - 14,753 224,850 Stormwater 101,070 - - 179,305 - 4,400 284,775 Total $ 888,970 $ 129,836 $ 108,303 $ 179,305 $ 540,783 $ 27,953$ 1,875,150 Transfers are used to 1) move revenues from the fund with collection authorization to the fund that statute or budget requires expending them and, 2) move unrestricted fund revenues to finance various programs that the government must account for in other funds in accordance with budgetary authorizations. Transfers from the enterprise funds to the general fund are in lieu of franchisee fees. 41 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 E. Capital Assets: Capital asset activity for the year ended September 30,2018,was as follows: Governmental activities: Beginning Balance Increases Decreases Ending Balance Capital assets not being depreciated: Land $ 25,171,845 $ 39,820 $ - $ 25,211,665 Construction in progress 1,375,142 3,123,108 (1,451,622) 3,046,628 Total assets not being depreciated 26,546,987 3,162,928 (1,451,622) 28,258,293 Capital assets being depreciated: Buildings 8,010,859 164,342 - 8,175,201 Improvement other than buildings 20,474,300 78,322 - 20,552,622 Machinery and equipment 5,634,378 174,295 (259,222) 5,549,451 Infrastructure 59,232,326 1,186,896 - 60,419,222 Total assets being depreciated 93,351,863 1,603,855 (259,222) 94,696,496 Less accumulated depreciation for: Buildings (4,009,248) (266,872) - (4,276,120) Improvement other than buildings (12,824,329) (688,277) - (13,512,606) Machinery and equipment (3,551,030) (501,364) 259,222 (3,793,172) Infrastructure (53,850,168) (481,281) - (54,331,449) Total accumulated depreciation (74,234,775) (1,937,794) 259,222 (75,913,347) Total capital assets,being depreciated, net 19,117,088 (333,939) - 18,783,149 Governmental activities capital assets,net $ 45,664,075 $ 2,828,989 $ (1,451,622) $ 47,041,442 Business-type activities: Beginning Balance Increases Decreases Ending Balance Capital assets not being depreciated: Land $ 2,172,370 $ 200 $ - $ 2,172,570 Construction in progress 1,196,543 114,124 (650,255) 660,412 Total assets not being depreciated 3,368,913 114,324 (650,255) 2,832,982 Capital assets being depreciated: Buildings 24,163,911 - (138,361) 24,025,550 Improvement other than buildings 59,114,864 632,329 (55,691) 59,691,502 Machinery and equipment 11,912,391 503,466 (96,497) 12,319,360 Total assets being depreciated 95,191,166 1,135,795 (290,549) 96,036,412 Less accumulated depreciation for: Buildings (17,794,234) (809,066) 86,665 (18,516,635) Improvementotherthanbuildings (24,780,752) (1,740,049) 55,692 (26,465,109) Machinery and equipment (8,778,662) (797,883) 96,497 (9,480,048) Total accumulated depreciation (51,353,648) (3,346,998) 238,854 (54,461,792) Total capital assets,being depreciated, net 43,837,518 (2,211,203) (51,695) 41,574,620 Business-type activities capital assets,net $ 47,206,431 $ (2,096,879) $ (701,950) $ 44,407,602 42 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 Depreciation expense was charged to functions/programs of the primary government as follows: Governmental activities: General government $ 53,293 Public safety 490,096 Transportation/public works 1,044,727 Parks and recreation 289,551 Capital assets held by the City's internal service funds 60,127 are charged to the various functions based on their usage of the assets Total depreciation expense-governmental activities $ 1,937,794 Business-type activities: Water Sewer Utility $ 2,792,093 Solid Waste Utility 106,414 Stormwater System 448,491 Total depreciation expense-business-type activities $ 3,346,998 F. Leases: Operating Leases — On March 3, 2014, the City entered into an operating lease agreement with the Volusia/Flagler Family Young Men's Christian Association, Inc. (the "YMCA") for the leasing and reimbursement for the expansion of, certain buildings and facilities located at Hawks Park Recreational Complex, which may be renegotiated and renewed at the request of the City Council or the YMCA Board at any time, provided any amendments are in writing and executed by both parties. Based on the terms of the agreement, the initial ten year lease began on April 1, 2014 and is scheduled to expire on March 31, 2024, with an option to renew for two additional ten year periods provided the parties mutually agree on the terms at the time of renewal. Annual rentals under the lease agreement include minimum monthly payments of $3,779. During the year ended September 30, 2018, amounts received totaled $49,129. Capital Leases - The City has lease agreements for financing the acquisition of rescue vehicles, other vehicles, and equipment. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of their future minimum lease payments as of the inception date. The assets acquired through capital leases are as follows: Governmental Business-type Activities Activities Assets- Machinery and equipment $ 1,004,768 $ 62,220 Less: accumulated depreciation (453,403) (26,260) Total $ 551,365 $ 35,960 The future minimum lease obligations and the net present value of these minimum lease payments as of September 30, 2018 were as follows: Year Ending Governmental Business-type September 30 Activities Activities 2019 $ 130,423 $ 13,213 2020 117,741 13,213 2021 117,741 13,213 2022 117,741 13,213 2023 - - Total minimum lease payments 483,646 52,852 Less: amount representing interest (24,723) (2,571) $ 458,923 $ 50,281 43 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 G. Long-term Debt: Notes Payable The General Obligation Note, Series 2017, was issued on April 5, 2017, in the amount of$3,436,000 to finance certain acquisitions and capital improvements consisting of the engineering, permitting, construction, expansion, and renovation of city recreational areas, facilities, parks, and related amenities. The loan will have annual payments due on July 1. The interest rate on the note is 3.06% and maturity is on July 1, 2036. The original amount of the note issued and outstanding at year-end is as follows: Balance Interest Rates September 30, Governmental Activities and Dates Maturitv Oriqinal Amount 2018 General Obligation Note- 3.06°k Series 2017 (7/1) 7/1/2036 $ 3,436,000 $ 3,262,000 TotalOutstanding $ 3,262,000 Annual requirements to amortize the General Obligation Note outstanding as of September 30, 2018, are as follows: Year Ending Governmental Activities September 30 Principal Interest 2019 $ 139,000 $ 99,817 2020 143,000 95,564 2021 147,000 91,188 2022 152,000 86,690 2023 156,000 82,039 2024-2028 856,000 335,529 2029-2033 995,000 196,299 2034-2036 674,000 41,647 Total $ 3,262,000 $ 1,028,773 The Capital Improvement Revenue Note, Series 2017, was issued on June 19, 2017, in the amount of $2,000,000 to finance the acquisition of approximately 27 acres of land for the construction of a public waterfront park and related amenities. The loan will have semi-annual payments due on June 1 and December 1. The interest rate on the note is 2.47% and maturity is on June 1, 2032. The original amount of the note issued and outstanding at year-end is as follows: Balance Interest Rates September 30, Governmental Activities and Dates Maturitv Oriqinal Amount 2018 Capital Improvement Revenue Note- 2.47°k Series 2017 (6/1 and 12/1) 6/1/2032 $ 2,000,000 $ 1,893,000 Total Outstanding $ 1,893,000 44 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 The Capital Improvement Revenue Note resolution provides for: 1) Establishment of a debt covenant to not issue additional obligations secured by the pledged revenues unless the aggregate amount of the pledged revenues received during the 12 months consecutive designated by the City within 24 months immediately preceding the date of delivery of such additional obligation equals at least 1.35 times the maximum annual debt service on all debt secured or payable from the pledged revenues, including debt service on the proposed additional obligations to be issued. 2) Pledged revenues consist of half cent state sales tax. Annual requirements to amortize the Capital Improvement Revenue Note outstanding as of September 30, 2018, are as follows: Year Ending Governmental Activities September 30 Principal Interest 2019 $ 115,000 $ 46,757 2020 118,000 43,917 2021 121,000 41,002 2022 123,000 38,013 2023 127,000 34,975 2024-2028 681,000 133,849 2029-2032 608,000 30,529 Total $ 1,893,000 $ 369,042 During the year ended September 30, 2017, the City executed an agreement with the Florida Department of Environmental Protection to borrow up to $336,500 at an interest rate of 3.15% through the State Revolving Fund loan program, for the purpose of financing the design of wastewater pollution control facilities. The agreement allowed the City to borrow up to $336,500 at an interest rate of 3.15%. The loan is payable semi- annually in the amount of Loan payments with payments beginning on September 15, 2018. The loan will have semi-annual payments of$9,178 on March 15 and September 15 each year until all amounts due under the agreement have been fully paid. The total amount of funding received during fiscal year 2017 was $305,848 with the remaining amount was received in fiscal year 2018. The amount of the loan issued and outstanding at year-end is as follows: Balance Interest Rates September 30, Business-Tvpe Activities and Dates Maturitv Oriqinal Amount 2018 Clean Water State Revolving Fund Loan Agreement 3.15°k (3/15 and 9/15) 3/15/2038 $ 336,500 $ 329,830 TotalOutstanding $ 329,830 Annual requirements to amortize the State Revolving Fund loan outstanding as of September 30, 2018, are as follows: Year Ending Governmental Activities September 30 Principal Interest 2019 $ 9,574 $ 1,026 2020 16,375 996 2021 16,478 944 2022 16,582 892 2023 16,687 840 2024-2028 85,027 3,403 2029-2033 87,744 2,045 2034-2036 81,363 643 Total $ 329,830 $ 10,789 45 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 The City issued the following revenue note in a prior year: Water and Sewer Revenue Refundinq Note,Series 2016 Original amount issued $10,000,000 Issue date February 29,2016 Final maturity October 1,2026 Interest due April 1 and Oct 1 Interest rate Fixed—2.30°k The Utility System Refunding Revenue Note is secured by a first lien on and pledge of the net revenues of the City's water,wastewater and stormwater utility systems and a first lien on and pledge of allowable impact fees imposed on new users of the systems. The Utility System Refunding Revenue Note resolution provides for: (1) Establishment and maintenance of various funds and accounts (2) Restrictions on the use of cash from operations in order of priority (a) Deposits are made to the operations and maintenance fund each month in an amount which will pay the costs of operation and maintenance for the next month; (b) Deposits to the sinking fund are made monthly in an amount equal to one-sixth (1/6) of the interest coming due on the next semi-annual interest payment date and one-twelfth (1/12) of the bond amortization installment coming due during the next year; (c) Deposits to the reserve fund are required to make up any deficiency in its balance as compared to the reserve equipment; (d) Deposits to the Renewal and Replacement Fund are required each month in an amount equal to one-twelfth (1/12) of five per centum (5%) of the gross revenues of the system for the previous fiscal year; provided, however, that so long as there shall be on deposit in the renewal and replacement fund a balance of at least five per centum (5%) of the value of the fixed assets of the system, no additional deposits shall be required; (e) Deposits will next be made into the rate stabilization fund for the amount budgeted for the then current period; and (fl Thereafter for any lawful purposes. Annual requirements to amortize the Utility System Refunding Revenue Note outstanding as of September 30, 2018, are as follows: Year Ending Business-Type Activities September 30 Principal Interest 2019 $ 876,000 $ 188,807 2020 896,000 168,429 2021 916,000 147,591 2022 938,000 126,270 2023 959,000 104,455 2024-2027 4,062,000 189,497 Total $ 8,647,000 $ 925,049 The City issued the following revenue note in a prior year: Guaranteed Entitlement Revenue Note,Series 2010 Original amount issued $750,000 Issue date November 23,2010 Final maturity October 1,2030 Interest due April 1 and Oct 1 Interest rate Fixed—2.77°k 46 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 The note is pledged by State Revenue Sharing monies received by the City and the proceeds were used to construct fire station number 55.Debt service requirements for this revenue note using interest rate of 2.77% at September 30, 2018 are: Year Ending Governmental Activities September 30 Principal Interest 2019 $ 35,000 $ 14,890 2020 35,000 13,957 2021 40,000 12,882 2022 40,000 11,740 2023 40,000 10,666 2024-2028 220,000 35,639 2029-2031 145,000 6,169 Total $ 555,000 $ 105,943 During the year ended September 30, 2006, the City signed a limited general obligation note payable for $500,000 to fund the construction of a new animal shelter. The note is secured by a limited pledge of ad valorem taxes. While the note is outstanding, the City will levy ad valorem taxes, not to exceed .06 mills to pay principal and interest on the note.Annual debt service requirements are as follows: Year Ending Governmental Activities September 30 Principal Interest 2019 $ 25,000 $ 9,420 2020 25,000 8,459 2021 30,000 7,498 2022 30,000 6,344 2023 30,000 5,191 2024-2027 105,000 8,075 Total $ 245,000 $ 44,987 During the year ended September 30, 2013, the City executed an agreement with the Florida Department of Environmental Protection to borrow up to $6,438,083 at an interest rate of 1.72-1.84% through the State Revolving Fund loan program, forthe purpose ofwastewatertreatment replacement and renewal. Capitalized interest added to the loan was $89,773. Repayment commenced on December 15, 2014, and is due semiannually thereafter on June 15 and December 15, each year until all amounts due under the agreement have been fully paid. Current debt service requirements are as follows: Year Ending Business-Tvpe Activities September 30 Principal Interest 2019 $ 288,230 $ 95,740 2020 293,526 90,443 2021 298,920 85,049 2022 304,413 79,556 2023 310,007 73,962 2024-2028 1,637,616 282,230 2029-2033 1,793,726 126,120 2034 378,765 5,205 Total $ 5,305,203 $ 838,305 47 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 During the year ended September 30, 2013, the City executed an agreement with a financial institution to borrow $4,507,000 at an interest rate of 1.79%, for the purpose of refinancing the capital lease with Johnson Controls, Inc. for water meters. Principal and interest payments are due quarterly on December 1, March 1, June 1 and September 1. The note is secured by non-ad valorem revenues of the City. Debt service requirements are as follows: Year Ending Business-Tvpe Activities September 30 Principal Interest 2019 $ 674,000 $ 18,878 2020 513,000 7,458 2021 115,000 516 Total $ 1,302,000 $ 26,852 During the year ended September 30, 2014, the City executed an agreement with a financial institution to borrow $1,300,000 at an interest rate of 2.41%, for the purpose of capital improvements. Interest only payments are due on September 1 St, while interest and principal payments are due on March 1 St. Debt service requirements are as follows: Year Ending Business-Tvpe Activities Governmental Activities September 30 Principal Interest Principal Interest 2019 $ 74,735 $ 10,700 $ 52,265 $ 7,483 2020 77,677 8,864 54,323 6,199 2021 80,031 6,963 55,969 4,870 2022 81,208 5,020 56,792 3,511 2023 82,973 3,042 58,027 2,127 2024 84,738 1,021 59,262 714 Total $ 481,362 $ 35,610 $ 336,638 $ 24,904 Changes in Long-Term Liabilities Long-term liability activity for the year ended September 30, 2018 was as follows: Beginning Ending Due Within Balance Additions Reductions Balance One Year Governmental Activities: Notes payable General Obligation Note,2017 $ 3,397,000 $ - $ (135,000) $ 3,262,000 $ 139,000 Capital Improvement Revenue Note, 2017 2,000,000 - (107,000) 1,893,000 115,000 Guaranteed Entitlement Note, Series 2010 590,000 - (35,000) 555,000 35,000 General Obligation Note,2007 270,000 - (25,000) 245,000 25,000 Capital Improvement Note 2014 387,670 - (51,032) 336,638 52,265 Capital leases Vehicles 33,074 - (33,074) - - Rescue 50,352 - (37,997) 12,355 12,355 AEBI 119,093 - (22,603) 96,490 23,195 American Capital 433,198 - (83,120) 350,078 84,894 Compensated absences 1,579,447 745,924 (1,098,862) 1,226,509 745,924 Total governmental activities long term liabilities $ 8,859,834 $ 745,924 $ (1,628,688) $ 7,977,070 $ 1,232,633 48 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 Business-type Activities Notes payable State revolving loan,2013 $ 5,588,230 $ - $ (283,027) $ 5,305,203 $ 288,230 State revolving loan,2017 305,848 32,155 (8,173) 329,830 9,574 Lease refunding note 1,959,000 - (657,000) 1,302,000 674,000 Capital Improvement note 2014 554,331 - (72,969) 481,362 74,735 Refunding Revenue note 2016 9,503,000 - (856,000) 8,647,000 876,000 Capital leases American Capital 62,220 - (11,939) 50,281 12,193 Compensated absences 610,380 355,746 (370,794) 595,332 355,747 Total business-type activities long term debt $18,583,009 $387,901 $ (2,259,902) $ 16,711,008 $ 2,290,479 Internal service funds predominately serve the governmental funds. Accordingly, $69,667 of compensated absences are included in the above governmental activities amounts. Also, for the governmental activities, compensated absences, net pension liabilities, and OPEB liabilities are generally liquidated by the General Fund. H. Other Commitments and Contingencies The City has entered into several agreements that are outstanding at September 30, 2018, which will result in future financial obligation as follows: Description Amount General Fund commitments $ 670,789 Capital Projects Fund commitments 2,767,552 Water and Sewer Utility Fund commitments 132,758 Stormwater Utility Fund commitments 7,780 Solid Waste Fund commitments 88,271 MIS Fund commitments 34,033 $ 3,701,183 V. Other Matters A. Risk Management: The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters for which the City carries commercial insurance. During 2018, there were no significant reductions in insurance coverage from the previous year or any settlements in excess of insurance coverage in the current year or the prior three years. B. Other Postemployment Benefits (OPEB): Plan Description—Effective October 1, 2017, the City implemented GASB Statement No. 75, Accounting and Reporting for Post-Employment Benefits Other Than Pensions, for certain post-employment healthcare benefits provided by the City. The City elected to implement the requirements of this statement prospectively. No assets are held in trust for payment of the OPEB liability as the City had no OPEB liability other than as arising from the implicit rate subsidy, as discussed in the following paragraph. Retirees and their dependents are permitted to remain covered under the City's respective health care plans as long as they pay a full premium applicable to the coverage elected. This conforms to the minimum required of Florida governmental employers per Chapter 112.08, Florida Statutes. The Other Post-Employment Benefit Plan does not issue a stand-alone report. Benefits Provided The Other Post Employment Benefit Plan is a single-employer benefit plan administered by the City. Retirees are charged whatever the insurance company charges for the type of coverage elected, however, the premiums charged by the insurance company are based on a blending of the experience among younger active employees and older retired employees. The older retirees actually have a higher cost which means the City is actually subsidizing the cost of the retiree coverage because it pays all or a significant portion of the premium on behalf of the active employee. GASB No. 75 calls this the "implicit rate subsidy." 49 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 Plan Membership–At September 30, 2017, the date of the latest actuarial valuation, plan participation consisted of the following: Active Participants 185 Retirees, Beneficiaries, and Disabled Members 17 Covered Spouses 5 207 Total OPEB Liability—The City's total OPEB liability of$5,019,665 was measured as of September 30, 2017, and was determined by an actuarial valuation as of that date. Actuarial Assumptions and Other Inputs The total OPEB liability in the September 30, 2017 actuarial valuation was determined using the following actuarial assumptions and other inputs, applied to all periods in the measurement, unless otherwise specified: Inflation 2.50% Salary increases 4.72% Discount rate 3.64% Initial Trend Rate 8.50% Ultimate Trend Rate 4.00% Years to Ultimate 55 Given the City's decision not to fund the program, all future benefit payments were discounted using a high-quality municipal bond rate of 3.64%. The high quality municipal bond rate was based on the week closest but not later than the measurement date of the Bond Buyer 20-Bond Index as published by the Federal Reserve. The 20-Bond Index consists of 20 general obligation bonds that mature in 20 years. The average rating of the 20 bonds is roughly equivalent to Moody's Investors Service's Aa2 rating and Standard & Poor's Corp.'s AA. All mortality rates were based on the RP-2000 mortality tables. All mortality rates are those outlined in Milliman's July 1, 2016 Florida Retirement System (FRS) valuation report. Changes in the OPEB liability for the fiscal year ended September 30, 2018, were as follows: Total OPEB Liability Balance at September 30, 2017 $ 5,387,638 Changes for a year: Service cost 118,498 Interest 165,495 Differences between expected and actual experience - Changes of assumptions (454,875) Benefit payments– implicit rate subsidy (197,091) Other changes - Net changes (367,973) Balance at September 30, 2018 $ 5,019,665 Sensitivity of the total OPEB liability to changes in the discount rate: The following presents the total OPEB liability of the City calculated using the discount rate of 3.64%, as well as what the City's total OPEB liability would be if it were calculated using a discount rate that is 1% lower(2.64%) or 1% higher(4.64%)than the current rate: 50 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 Current 1% Discount Decrease Rate 1% Increase Total OPEB Liability $ 5,848,501 $ 5,019,665 $ 4,371,057 Sensitivity of the total OPEB liability to changes in the healthcare cost trend rate: The following presents the total OPEB liability of the City as well as what the City's total OPEB liability would be if it were calculated using healthcare cost trend rates that are 1% lower (3.00%-7.50%) or 1% higher(5.00%-9.50%) than the current healthcare cost trend rates (4.00%-8.50%): 1% Current Decrease Trend Rates 1% Increase Total OPEB Liability $ 4,355,237 $ 5,019,665 $ 5,855,364 OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources For the year ended September 30, 2018; the City recognized OPEB expense of $208,180. At September 30, 2018 , the City reported deferred outflows of resources and deferred inflows of resources related to OPEB form the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Changes of assumptions $ - $ 379,062 Employer Contributions Subsequent to the Measurement Date 220,636 - Total $ 220,636 $ 379,062 Amounts reported as deferred outflows of resources (except for contributions made subsequent to the measurement date, which will be recognized in the succeeding fiscal year) and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Year ended September 30: 2019 $ (75,813) 2020 (75,813) 2021 (75,813) 2022 (75,813) 2023 (75,810) Thereafter - C. Employee Defined Benefit Retirement Pension Plans: Plan Description and Administration The City maintains three separate single-employer, defined benefit pension plans for full-time general employees, police officers and firefighters, which are administered by and maintained as the respective Pension Trust Funds and included as part of the City's reporting entity. The General Employees 51 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 Retirement Trust Fund was established by Chapter 13 of the City's Code of Ordinances. The Police Officers' Retirement Trust Fund was established pursuant with Chapter 185, Florida Statutes. The Firefighters' Pension Fund was established pursuant with Chapter 175, Florida Statutes. The applicable Ordinances or Statutes grant the authority to establish and amend the benefit terms to the Boards of Trustees. Separate boards of trustees independently govern each system. The General Employees' Pension Fund is Board of Trustees is comprised of two legal residents of the City, who are appointed by the City Council; two members of the Plan employed by the City and elected by the plan members; one member as a union representative, as appointed by the union. Both the Police Officers' Retirement Trust Fund and the Firefighters' Pension Fund are comprised of two Council appointees; two members of the department elected by the membership; one member elected by the other four members and appointed by the Council. The funding methods and determination of benefits payable are provided in the various acts of the Florida Legislature, the respective board of trustees and the City Council. Benefits Provided Each system provides retirement, disability and death benefits. All employees vest for full benefits after five years of service. Retirement benefits for general employees are based on the three consecutive years which give the highest average out of the last ten years. General employees will receive a benefit amount equal to 2% of that average multiplied by years of accrued service. Retirement benefits for police officers are based on the three years which give the highest average out of the last five years. Police officers will receive a benefit amount equal to 2% of that average multiplied by years of accrued service up to October 1, 1987, and 3% of that average multiplied by years of accrued service after October 1, 1987. Retirement benefits for firefighters are based on the five years, which give the highest average out of the last ten years. Firefighters will receive a benefit amount equal to 3% of that average multiplied by years of accrued service. All employees with 5 years of accrued service are eligible to retire at age 55. General employees may retire at any age after 25 years of service. Police officers and Firefighters may retire at any age after 20 years of service. All employees are eligible for non-service disability benefits after 5 years of service and for service-related disability benefits upon hire. Disability retirement benefits are determined in the same manner as retirement benefits but are payable immediately without an actuarial reduction. Death benefits for vested general employees prior to retirement and with a 50% qualified joint survivor annuity will be paid monthly. Death benefits are paid for vested police officers, prior to retirement and with a 100% qualified joint survivor annuity. Death benefits for firefighters are paid for 10 years. All nonvested employees do not receive a death benefit and the Plan refunds accumulated contributions without interest. An employee, that leaves the City prior to reaching 5 years of service, may withdraw his or her contributions, without interest. After 5 years, the employee may elect to receive the accrued benefit payable at retirement age. There are no annual cost of living adjustments. Employees Covered by Benefit Terms As of the latest actuarial valuation report, the following employees were covered by the benefit terms: General Police Fire Group Employees Officers' Fighters' Inactive plan members and beneficiaries currently receiving benefits 90 26 7 Inactive plan members entitled to but not receiving benefits 26 12 - Active plan members 5 27 32 Totals 121 65 39 The General Employees' Pension Fund was amended in October 1996, which closed off the plan to any new employees hired by the City after October 1, 1996. Employees hired after October 1, 1996, however, are eligible for the City's 401(a) Defined Contribution Plan. Employees hired prior to October 1, 1996, and not vested in the General Employees' Pension Fund as of September 30, 1997, may elect to participate in the 401(a) Defined Contribution Plan. 52 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 Wth the October 1, 2013 valuation, the General Employees Board of Trustees adopted changes to years of service, and the benefit limitation. Starting for the year ending September 30, 2014, funding requirements are now based on a dollar funding methodology as compared to the percentage of payroll methodology. Contributions Legislature grants the authority to establish and amend the contribution requirements of the City and active employees to the respective Boards of Trustees. The Boards establish rates based on an actuarially determined rate recommended by an independent actuary. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of the employees. For the year ended September 30, 2018, the average active employee contribution was 2.5% of annual pay for general employees and 6% of annual pay for both police officers and firefighters. The general employee pension fund requires a contribution from City based on a dollar funding methodology. For the year ended September 30, 2018, the total required contribution from the City was $747,522 for the general employees' pension fund. The City's average contribution rate was 37.54% and 20.65% of annual payroll for the police officers and firefighters pension funds, respectively. Investment Policy The pension plan's policy in regard to the allocation of invested assets is established and may be amended by the Board of Trustees by a majority vote of its members. It is the policy of the respective Board of Trustees to pursue an investment strategy that reduces risk through the prudent diversification of the portfolio across a broad selection of distinct asset classes. The pension plan's investment policy discourages the use of cash equivalents, except the liquidity purposes, and aims to refrain from dramatically shifting asset class allocations over short time spans. The following was the Board's adopted asset allocation policy as of September 30, 2018: General Employees Police Officers Firefighters Asset Class Target Allocation Target Allocation Target Allocation Domestic equity 40°k 45°k 50°k International equity 10°k 15°k 15°k Domestic fixed income 50°k 40°k 35°k Total 100°k 100°k 100°k Concentrations The plans did not hold investments in any one organization that represent 5% or more of the Pension Plan's fiduciary net position. Rese rves As of September 30, 2018, there are no amounts legally required to be reserved for the general, police and firefighter pension funds, respectively. Financial Statements The financial statements of the Employee Retirement plans are prepared using the accrual basis of accounting. Plan member contributions are recognized in the period in which the contributions are due. The government's contributions are recognized when due and a formal commitment to provide the contributions has been made. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. All plan investments are reported at fair value. These plans do not issue stand- alone financial reports. 53 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 Individual Fiduciary Fund Statements Individual statements of net position for the three plans included in the City of Edgewater fiduciary funds are as follows: Combining Statement of Fiduciary Net Position Pension Trust Funds September 30,2018 General Employees Police Officers Firefighters ASSETS Cash and cash equivalents Accrued income $ 444,618 $ 359,009 $ 375,848 Bonds 53,502 27,949 31,191 US Treasury notes 699,082 299,334 235,844 GNMA 1,923,641 946,073 112,050 Municipal bonds 114,201 59,591 144,701 Corporate bonds 3,051,358 1,514,683 2,979,924 Equities - - 10,825,910 Mutual fund-equities 6,250,696 7,116,939 - Total assets 12,537,098 10,323,578 14,705,468 LIABILITIES Accounts payable - - - Unearned Contributions - - - NET POSITION Restricted for pensions $ 12,537,098 $ 10,323,578 $ 14,705,468 Combining Statement of Changes in Fiduciary Net Position Pension Trust Funds For the fiscal year ended September 30,2018 General Employees Police Officers Firefighters ADDITIONS Contributions: Employer $ 747,522 $ 800,116 $ 367,844 E mp loyee 4,843 90,216 118,195 State of Florida 163,282 151,680 Total contributions 752,365 1,053,614 637,719 Investment earnings: Interest and dividends 755,714 351,811 250,457 Net increase/(decrease)in the fairvalue of investments 84,254 423,021 1,465,554 Less investment expenses (40,270) (32,896) (78,111) Net investment earnings 799,698 741,936 1,637,900 Total Additions 1,552,063 1,795,550 2,275,619 DEDUCTIONS Pension benefits 1,469,263 867,226 569,820 Administrative expenses 50,337 50,737 48,807 Total deductions 1,519,600 917,963 618,627 Change in net position 32,463 877,587 1,656,992 Net position-beginning of year 12,504,635 9,445,991 13,048,476 Net position-end of Year $ 12,537,098 $ 10,323,578 $ 14,705,468 54 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 Net Pension Liability Actuarial Assumptions: The total pension liability was determined with a measurement date of September 30, 2017 and an actuarial valuation as of October 1, 2016 updated to September 30, 2017, using the following actuarial assumptions to all measurement periods. General Employees Police Officers Firefighters Inflation 2.50°k 2.50°k 2.50°k Salary increases 4.00°k 4.20°k-7.50°k 5.00°k-6.50°k Investment rate of return/discount rate 6.75°k 7.50°k 7.50°k Mortality rates for the General Employee's Pension for healthy lives were based on the RP-2000 scale BB. Disabled lives are set forward two years for females and setback four years for males. The significant assumptions are based upon the most recent actuarial experience study dated June 13th, 2013. Mortality rates for the Police Officers were based on the RP-2000 scale BB. Disabled lives are set forward two years for females and setback four years for males. This assumption sufficiently accommodates future mortality improvements. The actuarial assumptions are based upon the most recent actuarial experience study dated September 13th, 2013. Mortality rates for the Firefighters were based on the RP-2000 scale BB. Disabled lives are set forward two years for females and setback four years for males. This sufficiently accounts for future mortality improvements. The actuarial assumptions are based upon the most recent actuarial experience study dated June 11th, 2013. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expenses and inflation) are developed for each major asset class. These ranges are combined to produce the long term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major class as of September 30, 2017 are summarized in the following table: Long Term Expected Real Rate of Return General Asset Class Employees Police Officers Firefighters Domestic equity 7.00°k 7.50°k 7.50°k International equity 3.70°k 8.50°k 8.50°k Domestic Fixed income 4.00°k 2.50°k 2.50°k Discount rate: The discount rate used to measure the total pension liability for the General Pension Plan was 6.75% and 7.5% for Police and Fire Pension Plans. The projection of cash flows used to determine the discount rate assumed the plan member contributions will be made at the current contribution rate and that City contributions will be made as rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. The components of the net pension liability of the pension plans at September 30, 2018, were as follows: General Employees Police Officers Firefighters Total pension liability $ 19,283,937 $ 13,364,601 $ 12,224,888 Plan fiduciary net position (12,497,882) (9,468,032) (13,060,578) Net pension liability(asset) $ 6,786,055 $ 3,896,569 $ (835,690) Plan fiduciary net position as percentage of total pension Ilablllty 64.81% 70.84% 106.84% 55 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 Changes in the Net Pension Liability General Employee's Retirement Trust Fund Total Pension Net Pension Liability Plan Fiduciary Liability (a) Net Position(b) (a-b) Beginning Balance $ 19,253,433 $ 12,266,682 $ 6,986,751 Changes for year: Service cost 53,793 - 53,793 Interest 1,254,173 - 1,254,173 Differences between expected and actual experience 176,321 - 176,321 Changes of assumptions - - - Contributions-employer - 667,440 (667,440) Contributions-employee - 6,091 (6,091) Contributions-buy back - - - Net investment income - 1,055,669 (1,055,669) Benefit payments,including refunds (1,453,783) (1,453,783) - Administrative expenses - (44,217) 44,217 Netchanges 30,504 231,200 (200,696) Ending Balance $ 19,283,937 $ 12,497,882 $ 6,786,055 Police Officer's Retirement Trust Fund Total Pension Net Pension Liability Plan Fiduciary Liability (a) Net Position(b) (a-b) Beginning Balance $ 12,679,398 $ 8,545,786 $ 4,133,612 Changes for year: Service cost 241,471 - 241,471 Interest 939,389 - 939,389 Share plan allocation 147,327 - 147,327 Differences between expected and actual experience 148,378 - 148,378 Changes in assumptions - - - Contributions-employer - 578,155 (578,155) Contributions-State - 147,327 (147,327) Contributions-employee - 96,436 (96,436) Net investment income - 950,106 (950,106) Benefit payments,including refunds (791,362) (791,362) - Administrative expenses - (58,416) 58,416 Netchanges 685,203 922,246 (237,043) Ending Balance $ 13,364,601 $ 9,468,032 $ 3,896,569 Firefighter's Retirement Trust Fund Total Pension Net Pension Liability Plan Fiduciary Liability(Asset) (a) Net Position(b) (a-b) Beginning Balance $ 10,828,680 $ 11,141,478 $ (312,798) Changes for year: Service cost 358,456 - 358,456 Interest 825,460 - 825,460 Share Plan Allocation 92,260 - 92,260 Differences between expected and actual experience 473,491 - 473,491 Changes of assumptions - - - Contributions-employer - 317,000 (317,000) Contributions-State - 147,551 (147,551) Contributions-employee - 117,483 (117,483) Contributions-buy back 8,544 8,544 - Net investment income - 1,734,571 (1,734,571) Benefit payments,including refunds (362,003) (362,003) - Administrative expenses - (44,046) 44,046 Net changes 1,396,208 1,919,100 (522,892) Ending Balance $ 12,224,888 $ 13,060,578 $ (835,690) 56 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 Sensitivity of the net pension liability to changes in the discount rate: The following presents the net pension liability of the City calculated using the discount rate of 6.75% for the General Employee's Pension and the discount rate of 7.50% for Police and Firefighters, as well as what the City's net pension liability would be if it were calculated using a discount rate that is 1% lower or 1% higher than the current rate: Current Discount 1°k Decrease Rate 1°k Increase City's Net Pension Liability 5.75°k 6.75°k 7.75°k General Employees Retirement Trust Fund $ 8,795,980 $ 6,786,055 $ 5,092,878 Current Discount 1°k Decrease Rate 1°k Increase City's Net Pension Liability(Asset) 6.50°k 7.50°k 8.50°k Police Officers Retirement Trust Fund $ 5,513,715 $ 3,896,569 $ 2,561,958 Firefighters Retirement Trust Fund 660,461 (835,690) (2,067,078) For the year ended September 30, 2018, the annual-money weighted rate of return on each pension plan investments, net of pension plan investment expense was as follows: General Employees Police Officers Firefighters Retirement Retirement Retirement Trust Fund Trust Fund Trust Fund Annual money-weighted rate of return 8.92°k 11.26°k 15.51°k The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions For the year ended September 30, 2018, the City recognized pension expense of $665,854, $774,326, and $248,030 in the General Employees, Police Officers, and Firefighters pension plans, respectively. At September 30, 2018, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: General Employees' Police Officers' Firefighters' Retirement Retirement Retirement Trust Fund Trust Fund Trust Fund Deferred Deferred Deferred Deferred Deferred Deferred Outflows of Inflows of Outflows of Inflows of Outflows of Inflows of Resources Resources Resources Resources Resources Resources Differences between expected and actual experience $ - $ - $ 226,551 $ 4,977 $ 405,852 $ 240,660 Changes of assumptions - - 122,470 - 98,167 - Net difference between projected and actual investment earnings 102,404 - - 17,808 - 539,938 Contributions made subsequent to measurement date 747,522 - 963,398 - 519,524 - $ 849,926 $ - $1,312,419 $ 22,785 $1,023,543 $ 780,598 Amounts reported as deferred outflows of resources (except for contributions made subsequent to the measurement date, which will be recognized in the succeeding fiscal year) and deferred inflows of resources related to pensions will be recognized in pension expense as follows: YearEnded September 30: General Employees Police Officers Firefighters 2019 $ 92,988 $ 179,768 $ (70,855) 2020 128,492 226,168 32,243 2021 (67,977) (17,657) (226,862) 2022 (51,099) (62,043) (146,389) 2023 - - 67,642 Thereafter - - 67,642 57 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 D. Employee Defined Contribution Retirement Pension Plans: General Employees- The City adopted a defined contribution plan effective October 1, 1996. The plan is a money purchase plan administered for the City by the ICMA. Eligible employees are employees hired effective October 1, 1996, or thereafter that would otherwise qualify for the General Employees' Pension Plan. Employees hired prior to October 1, 1996, and not vested in the General Employees' Pension Plan may also elect, instead, to participate in the defined contribution plan. Employee participation is immediate upon hiring and are 100% vested after five years of employment. Employees direct the investment of funds contributed to the plan on their behalf. Employer contributions of 12% of salaries made during the year amounted to $599,274. The City Council has the authority to amend the Plan's provisions including amending contribution requirements. E. Deferred Compensation Plans: The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457; i.e., International City/County Management Association (ICMA). The plan is available to all City employees and permit employees to defer a portion of their salary until future years. Participation in the plan is optional. Deferred compensation withdrawals are not available to employees until termination, retirement, death, or an unforeseeable emergency. In accordance with current professional pronouncements, the City has not included such funds in its financial statements. F. Tax Abatement: The City entered into an agreement with a local organization to abate certain ad valorem taxes in exchange for economic incentives. Article VII, Section 3 of the Florida Constitution and Section 16.1995, Florida Statutes, and the electorate of the City, have granted City Council the authority to grant property tax exemptions for new business and expansions of existing businesses. The City Council approved Ordinance 2017-0-22, granting the organization an ad valorem tax exemption for a term of ten years expiring in 2026. It is estimated that $5,931 in taxes were abated during the year ended September 30, 2018. G. Contingencies: The City has been involved in miscellaneous collections, lot cleaning, stormwater, and other liens. In addition, the City has numerous pending/threatened claims against it. In the opinion of City management the loss if any, resulting from these actions will not have a material adverse effect on the financial condition of the City. Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies, principally the federal and state government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time although the City expects such amounts, if any, to be immaterial. H. Subsequent Events: On December 6, 2018, the City entered into a State Revolving Fund loan in the amount of$4,533,200 for construction of the City's wastewater treatment facility. No amounts have been drawn on this loan to date. 58 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 I. Restatement of Net Position: Government Accounting Standards Board (GASB) Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions;was issued June 2015 and was implemented for the City, beginning with its year ending September 30, 2018. The primary objective of this Statement is to improve accounting and financial reporting by state and local governments for postemployment benefits other than pensions. This Statement replaces the requirements of GASB Statement No. 45, Accounting for Postemployment Benefits Other Than Pensions, as well as the requirements of GASB Statement No. 57, OPEB Measurements by Agent Employers and Agent Multiple-Employer Plan, for OPEB, as they relate to OPEB liabilities being recorded in the statements of net position. The City's implementation of this Statement has required the restatement of certain liabilities as deferred outflows or deferred inflows of resources in the Statement of Net Position. Statement No. 75 established standards for recognizing and measuring liabilities, deferred outflows of resources, deferred inflows of resources, and expenses. Recognition of these liabilities requires a restatement to the prior year's net position in both governmental activities and business-type activities. The impact of the restatement on the governmental activities and business-type activities beginning net position at September 30, 2018, are as follows: (a) Governmental Activities: Net position —September 30, 2017, as originally reported $ 40,085,381 Recording of beginning OPEB liability (2,817,474) Net position —September 30, 2017, as restated $ 37,267,907 (b) Business-type Activities: Water Solid Business- Sewer Waste Stormwater type Fund Fund Fund Activities Net position —September 30, 2017, originally reported $ 26,403,019 $ 1,951,184 $ 6,883,687 $ 35,237,890 Recording of beginning OPEB liability (869,942) (273,543) (165,797) (1,309,282) Net position —September 30, 2017, as restated $ 25,533,077 $ 1,677,641 $ 6,717,890 $ 33,928,608 J. Recently Issued Pronouncements: The Governmental Accounting Standards Board ("GASB") has issued several pronouncements that have effective dates that may impact future financial statements. Listed below are pronouncements with required implementation dates effective for subsequent fiscal years that have not yet been implemented. Management has not currently determined what, if any, impact implementation of the following will have on the City's financial statements: (a) GASB issued Statement No. 83, Certain Asset Retirement Obligations, in November 2016. GASB 83 addresses accounting and financial reporting for certain asset retirement obligations (AROs), which are legally enforceable liabilities associated with the retirement of a tangible capital asset. The provisions in GASB 81 are effective for periods beginning after June 15, 2018. 59 City of Edgewater, Florida Notes to the Financial Statements September 30, 2018 (b) GASB issued Statement No. 84, Fiduciary Activities, in January 2017. GASB 84 improves guidance regarding the identification and reporting of fiduciary activities. The provisions in GASB 84 are effective for periods beginning after December 15, 2018. (c) GASB issued Statement No. 87, Leases, in June 2017. GASB 87 aims to better meet the information needs of financial statement users by improving accounting and financial reporting for leases by governments. The provisions in GASB 87 are effective for periods beginning after December 15. 2019. (d) GASB issued Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements, in April 2018. GASB 88 requires that additional essential information related to debt be disclosed in notes to financial statements, including unused lines of credit; assets pledged as collateral for the debt; and terms specified in debt agreements related to significant events of default with finance-related consequences, significant termination events with finance-related consequences, and significant subjective acceleration clauses. The provisions in GASB 88 are effective for periods beginning after June 15, 2018. (e) GASB issued Statement No. 90, Majority Equity Interests-an amendment of GASB Statements No. 14 and No. 61, in August 2018. GASB 90 improves the consistency and comparability of reporting a government's majority equity interest in a legally separate organization and improves the relevance of financial statement information for certain component units. The provisions in GASB 90 are effective for periods beginning after December 15, 2018. 60 � ittei�;;�aw��wn�,. �� " �1 � , � � h z.,„. .y . „ �.,�. ��'.� �.aaa.m,r...�.,'�r�"..,:""" "°.�:"* — �'I��III'. - ky,. ��i i' U� �� I� ��A�� 'lor�da � This page intentionally left blank 61 CITY OF EDGEWATER,FLORIDA Required Supplementary Information(unaudited) Schedules of changes in the City's Net Pension Liability and Related Ratios General Employees'Retirement Trust Reporting Period Ending 9/30/2018 9/30/2017 9/30/2016 9/30/2015 9/30/2014 9/30/2018 Measurement Date 9/30/2017 9/30/2016 9/30/2015 9/30/2014 9/30/2013 9/30/2017 Total pension liability Seroice cost $ 53,793 $ 34,222 $ 60,573 $ 91,269 $ 84,901 $ 241,471 Interest 1,254,173 1,250,244 1,238,859 1,241,107 1,237,145 939,389 Change in Funding Standard Account - - - - - - Share Plan Allocation - - - - - 147,327 Differences between Expected and Actual Experienc� 176,321 (50,657) 259,399 - - 148,378 Changes of assumptions - 1,777,486 - - - - Contributions-buy back - 299,746 - - - - Benefit payments,including refunds of employee contributions (1,453,783) (1,386,624) (1,374,722) (1,288,586) (1,262,597) (791,362) Net change in total pension liability 30,504 1,924,417 184,109 43,790 59,449 685,203 Total pension liability,beginning 19,253,433 17,329,016 17,144,907 17,101,117 17,041,668 12,679,398 Total pension liability,ending(a) $ 19,283,937 $ 19,253,433 $ 17,329,016 $ 17,144,907 $ 17,101,117 $ 13,364,601 Plan Fidcuciary net position Contribtions--employer $ 667,440 $ 661,699 $ 713,396 $ 772,605 $ 475,794 $ 578,155 Contributions-state - - - - - 147,327 Contribtions--employee 6,091 5,851 8,535 13,178 15,348 96,436 Contributions-buy back - 299,746 - - - - Net Investment income 1,055,669 950,355 (67,754) 1,059,400 1,563,721 950,106 Benefit payments,including refunds of employee contributions (1,453,783) (1,386,624) (1,374,722) (1,288,586) (1,262,597) (791,362) Administrative expense (44,217) (40,442) (48,589) (42,302) (76,889) (58,416) Net change in plan fiduciary net position 231,200 490,585 (769,134) 514,295 715,377 922,246 Plan fiduciary net position,beginning 12,266,682 11,776,097 12,545,231 12,030,936 11,315,559 8,545,786 Plan fiduciary net position,ending(b) $ 12,497,882 $ 12,266,682 $ 11,776,097 $ 12,545,231 $ 12,030,936 $ 9,468,032 Net pension liability(asset)-ending(a)-(b) $ 6,786,055 $ 6,986,751 $ 5,552,919 $ 4,599,676 $ 5,070,181 $ 3,896,569 Plan fiduciary net position as a percentage of the total pension liability 64.81% 63.71% 67.96% 73.17% 70.35% 70.84% Covered payroll $ 236,414 $ 349,034 $ 341,408 $ 567,030 $ 613,927 $ 1,539,919 Net pension liability as a percentage of payroll 2870.41% 2001.74% 1626.48% 811.19% 825.86% 253.04% Annual Money-Weighted Rate of Return 8.92% 8.40% -0.56% 8.94% 13.50% 11.26% Note-Additional years'information will be displayed as it becomes available to present 10 years. 62 Police Officers'Pension Trust Firefighters'Pension Trust 9/30/2017 9/30/2016 9/30/2015 9/30/2014 9/30/2018 9/30/2017 9/30/2016 9/30/2015 9/30/2014 9/30/2016 9/30/2015 9/30/2014 9/30/2013 9/30/2017 9/30/2016 9/30/2015 9/30/2014 9/30/2013 $ 248,453 $ 209,572 $ 206,976 $ 192,536 $ 358,456 $ 322,776 $ 317,342 $ 323,511 $ 300,940 874,946 855,433 859,397 836,080 825,460 752,753 715,242 652,070 601,821 - - (386,259) - - - - - - 138,245 - - - 92,260 84,235 90,777 88,962 - 230,533 (19,907) - - 473,491 (45,934) (367,566) - - 244,939 - - - - 147,249 - - - - - - - 8,544 9,721 - - - (950,417) (697,208) (773,904) (690,444) (362,003) (312,107) (210,052) (222,096) (288,611) 786,699 347,890 (93,790) 338,172 1,396,208 958,693 545,743 842,447 614,150 11,892,699 11,544,809 11,638,599 11,300,427 10,828,680 9,869,987 9,324,244 8,481,797 7,867,647 $ 12,679,398 $ 11,892,699 $ 11,544,809 $ 11,638,599 $ 12,224,888 $ 10,828,680 $ 9,869,987 $ 9,324,244 $ 8,481,797 $ 621,470 $ 618,054 $ 534,795 $ 768,448 $ 317,000 $ 358,086 $ 354,899 $ 392,863 $ 469,302 138,245 127,668 125,387 121,375 147,551 139,527 150,763 155,382 129,103 84,939 79,610 76,054 70,431 117,483 107,966 93,950 88,869 87,309 - - - - 8,544 9,721 - - - 568,335 (15,324) 759,444 769,004 1,734,571 1,143,088 (536,507) 1,160,776 766,338 (950,417) (697,208) (773,904) (690,444) (362,003) (312,107) (210,052) (222,096) (288,611) (67,029) (49,324) (36,403) (82,988) (44,046) (58,960) (48,746) (44,645) (18,869) 395,543 63,476 685,373 955,826 1,919,100 1,387,321 (195,693) 1,531,149 1,144,572 8,150,243 8,086,767 7,401,394 6,445,568 11,141,478 9,754,157 9,949,850 8,418,701 7,274,129 $ 8,545,786 $ 8,150,243 $ 8,086,767 $ 7,401,394 $ 13,060,578 $ 11,141,478 $ 9,754,157 $ 9,949,850 $ 8,418,701 $ 4,133,612 $ 3,742,456 $ 3,458,042 $ 4,237,205 $ (835,690) $ (312,798) $ 115,830 $ (625,606) $ 63,096 67.40% 68.53% 70.05% 63.59% 106.84% 102.89% 98.83% 106.71% 99.26% $ 1,415,650 $ 1,396,624 $ 1,267,568 $ 1,173,844 $ 1,802,605 $ 1,799,429 $ 1,579,650 $ 1,467,330 $ 1,455,154 291.99% 267.96% 272.81% 360.97% -46.36% -17.38% 7.33% -42.64% 4.34% 7.05% -0.19% 10.40% 10.40% 15.51% 11.64% -5.33% 13.59% 10.25% 63 CITY OF EDGEWATER, FLORIDA Required Supplementary Information(unaudited) Schedules of General Employees'Contributions Reporting Period Ending September 30,2018 September 30,2017 September 30,2016 September 30,2015 September 30,2014 Measurement Date September 30,2017 September 30,2016 September 30,2015 September 30,2014 September 30,2013 Actuarially Determined Contribution(ADC) $ 667,440 $ 657,825 $ 719,822 $ 766,179 $ 475,794 Contributions in Relation to ADC 667,440 661,699 713,396 772,605 475,794 Contribution Deficiency(Excess) $ - $ (3,874) $ 6,426 $ (6,426) $ - Covered Payroll $ 236,414 $ 349,034 $ 341,408 $ 567,030 $ 613,927 Contributions as a Percentage of Covered Payroll 282.32% 189.58% 208.96% 136.25% 77.50% Notes to Schedule: Valuation Date: 10/01/2015 Actuarially determined contribution rates are calculated as of October 1,two years prior to the end of the fiscal year in which contributions are reported. Additional years'information will be displayed as it becomes available to present 10 years. Methods and assumptions used to determine contribution rates: Funding Method: Entry Age Normal Actuarial Cost Method Interest-A half year, based on the current 6.75%assumption. Salary-A full year, based on the current average assumption of 4.0%. Mortality: RP2000 Combined Healthy projected to the valuation date with schedule AA Interest Rate: 6.75%per year compounded annually, net of investment related expenses. Normal Retirement: Ape Retirement Probabilitv 55 50% 56-59 0% 60 and older 100% In addition to the above table, 100% Retirement is assumed upon the completion of 25 years of Credited Service. Salary Increases: 4%per year. Termination Rates: None assumed. Early Retirement: None assumed. Actuarial Asset Method: spread actuarial investment gains and losses(as measured by actual market value investment return against expected market value investment return)over a four-year period. Disability Rates: 0.30%- 1.55% 64 CITY OF EDGEWATER,FLORIDA Required Supplementary Information(unaudited) Schedules of Police Officers'Contributions Reporting Period Ending September 30,2018 September 30,2017 September 30,2016 September 30,2015 September 30,2014 Measurement Date September 30,2017 September 30,2016 September 30,2015 September 30,2014 September 30,2013 Actuarially Determined Contribution(ADC) $ 742,241 $ 746,047 $ 768,235 $ 766,878 $ 874,513 Contributions in Relation to ADC 578,155 621,470 745,722 660,182 768,448 Contribution Deficiency(Excess) $ 164,086 $ 124,577 $ 22,513 $ 106,696 $ 106,065 Covered Payroll $ 1,539,919 $ 1,415,650 $ 1,396,624 $ 1,267,568 $ 1,173,844 Contributions as a Percentage of Covered Payroll 37.54% 43.90% 53.39% 52.08% 65.46% Notes to Schedule: Valuation Date: 10/01/2015 Actuarially determined contribution rates are calculated as of October 1,two years prior to the end of the fiscal year in which contributions are reported. Additional years'information will be displayed as it becomes available to present 10 years. Methods and assumptions used to determine contribution rates: Funding Method: Entry Age Normal Actuarial Cost Method. Amortization Method: Level dollar. Remaining Amortization Period: 18 Years(as of 10/01/2015). Mortality: RP-2000 Combined Healthy Mortality,projected to 2005 using scale AA.We believe this assumption sufficiently accommodates future mortality improvements. Interest Rate: 7.5% per year compounded annually,net of investment related expenses. Retirement Age: Years Eliqible for Normal Retirement Retirement Probabilitv 0 50% 1 0% 2 33% 3-5 60% 6 and greater 100% In addition to the above, 100%Retirement is assumed upon the attainment of age 58 if eligible to retire. Early Retirement: None assumed. Salary Increases: 7.5%for less than 10 years credited service. 4.2%for 10 years or greater of credited service. Actuarial Asset Method: All assets are valued at market value with an adjustment made to uniformly spread actuarial investment gains and losses(as measured by actual market value investment return against expected market value investment return)over a four-year period. Termination Rates: 18%for less than 5 years credited service. 14%for 5-9 years credited service. 0%for 10 years or greater of credited service. Disability Rates: 0.30%-1.69% 65 CITY OF EDGEWATER, FLORIDA Required Supplementary Information(unaudited) Schedules of Firefighters'Contributions Reporting Period Ending September 30,2018 September 30,2017 September 30,2016 September 30,2015 September 30,2014 Measurement Date September 30,2017 September 30,2016 September 30,2015 September 30,2014 September 30,2013 Actuarially Determined Contribution(ADC) $ 389,363 $ 430,063 $ 407,550 $ 432,862 $ 534,041 Contributions in Relation to ADC 372,292 413,378 414,885 459,283 534,041 Contribution Deficiency(Excess) $ 17,071 $ 16,685 $ (7,335) $ (26,421) $ - Covered Payroll $ 1,802,600 $ 1,799,429 $ 1,579,650 $ 1,467,330 $ 1,455,154 Contributions as a Percentage of Covered Payroll 20.65% 22.97% 26.26% 31.30% 36.70% Notes to Schedule: Valuation Date: 10/01/2015 Actuarially determined contribution rates are calculated as of October 1,two years prior to the end of the fiscal year in which contributions are reported. Additional years'information will be displayed as it becomes available to present 10 years. Methods and assumptions used to determine contribution rates: Funding Method: Entry Age Normal Actuarial Cost Method. Amortization Method: Level Percentage of Pay, Closed. Remaining Amortization Period: 28 Years(as of 10/01/2015 valuation). Mortality: RP2000 Combined Healthy Mortality Table,Sex Distinct. Disabled lives are set forward 5 years. We believe this sufficiently accounts for future mortality improvements. Interest Rate: 7.5% per year compounded annually, net of investment related expenses. Normal Retirement: Years Eliqible for Normal Retirement Retirement Probabilitv 0 60% 1-4 0% 5 and greater 100% In addition to the above, 100%Retirement is assumed upon the attainment of age 55 with 5 years of Credited Service. Disability Rates: 0.06%-.36% Payroll Growth: 1.9%per year. Asset Smoothing Methodology: The Actuarial Value of Assets is brought forward using the historical four-year geometric average of Market Value Returns(net-of-fees). Over time,this may result in a de minis bias Salary Increases: 6.5%for less than 10 years credited service. 6.0%for 10-15 years credited service. 5.0%for 15 years or greater of credited service. Final Salary Load: No load for 0 years of credited service. 10.0%for less than 10 years of credited service. 20.0%for 10 or more years of credited service. Termination Rates: 7.5%for less than 5 years credited service. 4.0%for 5 years or greater of credited service. Commencing at eligibility for Early Retirement, Members are assumed to retire with an immediate benefit at the rate of 5%per year. Disability Rates: 0.06%-.36% 66 CITY OF EDGEWATER, FLORIDA Required Supplementary Information(unaudited) Schedule of Changes in the City's Total OPEB Liability and Related Ratios Reporting Period Ending September30,2o�a Measurement Date September30,20�� Total OPEB Liability Service cost $ 118,498 I nterest 165,495 Differences between expected and actual experience - Changes of assumptions (454,875) Benefit payments—implicit rate subsidy (197,091) Net change in total OPEB liability (367,973) Total OPEB liability—beginning 5,387,638 Total OPEB liability—ending $ 5,019,665 Covered employee payroll (projected) 9,163,898 Total OPEB liability as a percentage of covered employee payroll 54.78% Covered Employee Payroll was projected one year forward from the valuation date for the reporting period ending September 30, 2018. Notes to Schedule: Valuation Date: 9/30/2017 Changes of assumptions. Changes of assumptions and other inputs reflect the effects of changes in the discount rate each period. The following are the discount rates used in each period: FY 2018 3.64% FY 2017 3.06% *10 years of data will be presented as it becomes available. 67 � ittei�;;�aw��wn�,. �� " �1 � , � � h z.,„. .y . „ �.,�. ��'.� �.aaa.m,r...�.,'�r�"..,:""" "°.�:"* — �'I��III'. - ky,. ��i i' U� �� I� ��A�� 'lor�da � This page intentionally left blank 68 CITY OF EDGEWATER, FLORIDA Nonmajor Governmental Funds September 30, 2018 SPECIAL REVENUE FUNDS are used to account for revenue derived from specific taxes or other earmarked revenue sources (other than for major capital projects) that are restricted by law or administrative action to expenditures for specified purposes. Justice Assistance Grant Fund —This fund was established to receive revenues derived from money received from the Department of Justice for various grants such as JAG. Special Law Enforcement Trust Fund—This fund was established to receive revenues derived from confiscated property obtained during the enforcement purposes, exclusive of salaries and vehicles. Such purposes may include drug education programs such as DARE. Transportation Impact Fees Fund—This fund was established to account for road impact fees collected from new developments constructed in the City. Police Impact fees Fund —This fund was established to account for police impact fees collected from new developments constructed in the City. Fire Impact Fees Fund —This fund was established to account for fire impact fees collected from new developments constructed in the City. Recreation Impact Fees Fund —This fund was established to account for recreation impact fees collected from new developments constructed in the City. DEBT SERVICE FUNDS are established to account for the accumulation of resources for, and the payment of, general long-term debt principal and interest. Debt Service Fund—This fund was established to account for the payment of general long-term debt principal and interest for the Animal Shelter. CAPITAL PROJECTS FUNDS are established to account for resources used for the acquisition and construction of capital facilities by the City, except for those financed by proprietary funds. Capital Projects Fund —This fund was established to account for the acquisition of fixed assets or construction of major capital projects not being financed by proprietary funds. 69 CITY OF EDGEWATER, FLORIDA Combining Balance Sheet Nonmajor Governmental Funds September 30, 2018 Special Revenue Justice Assistance Transportation Grants SLETF Impact Police Impact ASSETS Cash $ - $ 81,402 $ 292,075 $ 77,379 Receivables - 11 40 11 Due from other governments - - - - Total assets $ - $ 81,413 $ 292,115 $ 77,390 LIABILITIES Due to other funds $ - $ - $ - $ - Totalliabilities $ - $ - $ - $ - FUND BALANCES Spendable: Restricted for: Public safety $ - $ 81,413 $ - $ - Debt service - - - - Capital projects - - 292,115 77,390 Total fund balances - 81,413 292,115 77,390 Total liabilities and fund balances $ - $ 81,413 $ 292,115 $ 77,390 70 Total Nonmajor Recreation Governmental Fire Impact Impact Debt Service Funds $ 56,209 $ 106,129 $ 78,144 $ 691,338 8 15 11 96 - - 20 20 $ 56,217 $ 106,144 $ 78,175 $ 691,454 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 81,413 - - 78,175 78,175 56,217 106,144 - 531,866 56,217 106,144 78,175 691,454 $ 56,217 $ 106,144 $ 78,175 $ 691,454 71 CITY OF EDGEWATER, FLORIDA Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds For the Fiscal Year Ended September 30, 2018 Special Revenue Justice Assistance Transportation Grants SLETF Impact Police Impact REVENUES Taxes: Property $ - $ - $ - $ - Fines and forfeitures - 14,259 - - Investment earnings - 107 319 93 Impactfees - - 129,043 21,646 Total revenues - 14,366 129,362 21,739 EXPENDITURES Debt Service: Principal - - - - Interest - - - - Total expenditures - - - - Excess(deficiency)of revenues overexpenditures - 14,366 129,362 21,739 OTHER FINANCING SOURCES(USES) Transfers in - - - - Transfers out (2,379) - - - Total other financing uses (2,379) - - - Net change in fund balances (2,379) 14,366 129,362 21,739 Beginning fund balances 2,379 67,047 162,753 55,651 Ending fund balances $ - $ 81,413 $ 292,115 $ 77,390 72 Total Nonmajor Recreation Governmental Fire Impact Impact Debt Service Funds $ - $ - $ 288,480 $ 288,480 - - - 14,259 70 149 593 1,331 14,232 20,586 - 185,507 14,302 20,735 289,073 489,577 - - 267,000 267,000 - - 161,257 161,257 - - 428,257 428,257 14,302 20,735 (139,184) 61,320 - - 129,836 129,836 - (12,032) - (14,411) - (12,032) 129,836 115,425 14,302 8,703 (9,348) 176,745 41,915 97,441 87,523 514,709 $ 56,217 $ 106,144 $ 78,175 $ 691,454 73 CITY OF EDGEWATER, FLORIDA Schedule of Revenues, Expenditures, and Changes in Fund Balances--Budget and Actual Annually-Budgeted Nonmajor Special Revenue Funds For the Fiscal Year Ended September 30, 2018 Special Revenue Justice Assistance Grants SLETF Budgeted Amounts Variance Budgeted Amounts Variance with Final with Final Budget- Budget- Actual Positive Actual Positive Original Final Amounts (Negative) Original Final Amounts (Negative) REVENUES Intergovernmental $ 4,000 $ 4,000 $ - $ (4,000) $ - $ - $ - $ - Fines and forfeitures - - - - - - 14,259 14,259 Investment earnings - - - - - - 107 107 Impactfees - - - - - - - - Total revenues 4,000 4,000 - (4,000) - - 14,366 14,366 EXPENDITURES Current: Public Safety 4,000 4,000 - 4,000 5,000 9,500 - 9,500 Capital outlay - - - - - - - - Total expenditures 4,000 4,000 - 4,000 5,000 9,500 - 9,500 Excess(deficiency)of revenues over(under)expenditures - - - - (5,000) (9,500) 14,366 23,866 OTHER FINANCWG SOURCES(USES) Transfers out - - (2,379) (2,379) - - - - Total other financing sources(uses) - - (2,379) (2,379) - - - - Net change in fund balances - - (2,379) (2,379) (5,000) (9,500) 14,366 23,866 Beginning fund balances 2,379 2,379 2,379 - 67,047 67,047 67,047 - Ending fund balances(deficit) $ 2,379 $ 2,379 $ - $ (2,379) $ 62,047 $ 57,547 $ 81,413 $ 23,866 74 CITY OF EDGEWATER, FLORIDA Schedule of Revenues, Expenditures, and Changes in Fund Balances--Budget and Actual-- Annually-Budgeted Nonmajor Special Revenue Funds(continued) For the Fiscal Year Ended September 30, 2018 Special Revenue Transportation Impact Police Impact Budgeted Amounts Variance Budgeted Amounts Variance with Final with Final Budget- Budget- Actual Positive Actual Positive Original Final Amounts (Negative) Original Final Amounts (Negative) REVENUES Intergovernmental $ - $ - $ - $ - $ - $ - $ - $ - Fines and forfeitures - - - - - - - - Investment earnings - - 319 319 - - 93 93 Impact fees 30,000 30,000 129,043 99,043 50,000 3,300 21,646 18,346 Total revenues 30,000 30,000 129,362 99,362 50,000 3,300 21,739 18,439 EXPENDITURES Current: Public Safety - - - - - - - - Capital outlay - - - - - - - - Total expenditures - - - - - - - - Excess(deficiency)of revenues over(under)expenditures 30,000 30,000 129,362 99,362 50,000 3,300 21,739 18,439 OTHER FINANCWG SOURCES(USES) Transfers out - - - - - - - - Total other financing sources(uses) - - - - - - - - Net change in fund balances 30,000 30,000 129,362 99,362 50,000 3,300 21,739 18,439 Beginningfund balances 162,753 162,753 162,753 - 55,651 55,651 55,651 - Ending fund balances(deficit) $ 192,753 $ 192,753 $ 292,115 $ 99,362 $ 105,651 $ 58,951 $ 77,390 $ 18,439 75 CITY OF EDGEWATER, FLORIDA Schedule of Revenues, Expenditures, and Changes in Fund Balances--Budget and Actual-- Annually-Budgeted Nonmajor Special Revenue Funds(continued) For the Fiscal Year Ended September 30, 2018 Special Revenue Fire Impact Recreation Impact Budgeted Amounts Variance Budgeted Amounts Variance with Final with Final Budget- Budget- Actual Positive Actual Positive Original Final Amounts (Negative) Original Final Amounts (Negative) REVENUES Intergovernmental $ - $ - $ - $ - $ - $ - $ - $ - Fines and forfeitures - - - - - - - - Investment earnings - - 70 70 - - 149 149 Impactfees 10,000 10,000 14,232 4,232 25,000 25,000 20,586 (4,414) Total revenues 10,000 10,000 14,302 4,302 25,000 25,000 20,735 (4,265) EXPENDITURES Current: Public Safety - - - - - - - - Capital outlay 40,000 40,000 - 40,000 - - - - Total expenditures 40,000 40,000 - 40,000 - - - - Excess(deficiency)of revenues over(under)expenditures (30,000) (30,000) 14,302 44,302 25,000 25,000 20,735 (4,265) OTHER FINANCWG SOURCES(USES) Transfers out - - - - - (12,032) (12,032) - Total other financing sources(uses) - - - - - (12,032) (12,032) - Net change in fund balances (30,000) (30,000) 14,302 44,302 25,000 12,968 8,703 (4,265) Beginningfund balances 41,915 41,915 41,915 - 97,441 97,441 97,441 - Ending fund balances(deficit) $ 11,915 $ 11,915 $ 56,217 $ 44,302 $122,441 $ 110,409 $ 106,144 $ (4,265) 76 CITY OF EDGEWATER, FLORIDA Schedule of Revenues, Expenditures, and Changes in Fund Balances--Budget and Actual-- Annually-Budgeted Nonmajor Special Revenue Funds(continued) For the Fiscal Year Ended September 30, 2018 Total Budgeted Amounts Variance with Final Budget- Positive Actual (Negative) Original Final Amounts REVENUES Intergovernmental $ 4,000 $ 4,000 $ - $ (4,000) Fines and forfeitures - - 14,259 14,259 Investment earnings - - 738 738 Impactfees 115,000 68,300 185,507 117,207 Total revenues 119,000 72,300 200,504 128,204 EXPENDITURES Current: Public Safety 9,000 13,500 - 13,500 Capital outlay 40,000 40,000 - 40,000 Total expenditures 49,000 53,500 - 53,500 Excess(deficiency)of revenues over(under)expenditures 70,000 18,800 200,504 181,704 OTHER FINANCWG SOURCES(USES) Transfers out - (12,032) (14,411) (2,379) Total otherfinancing sources(uses) - (12,032) (14,411) (2,379) Net change in fund balances 70,000 6,768 186,093 179,325 Beginning fund balances 427,186 427,186 427,186 - Ending fund balances(deficit) $ 497,186 $ 433,954 $ 613,279 $ 179,325 77 CITY OF EDGEWATER, FLORIDA Schedule of Revenues, Expenditures, and Changes in Fund Balances--Budget and Actual Annually-Budgeted Nonmajor Debt Service Fund For the Fiscal Year Ended September 30, 2018 Variance with Budgeted Amounts Final Budget- Actual Positive Original Final Amounts (Negative) REVENUES Taxes: Property $ 274,430 $ 274,430 $ 288,480 $ 14,050 Investment earnings 100 100 593 493 Total revenues 274,530 274,530 289,073 14,543 EXPENDITURES Debt Service: Principal 267,000 267,000 267,000 - Interest 161,260 161,260 161,257 3 Total expenditures 428,260 428,260 428,257 3 Excess(deficiency)of revenues over(under) expenditures (153,730) (153,730) (139,184) 14,546 OTHER FINANCING SOURCES(USES) Transfers in 134,433 134,433 129,836 (4,597) Net change in fund balances (19,297) (19,297) (9,348) 9,949 Beginning fund balances 87,523 87,523 87,523 - Ending fund balances $ 68,226 $ 68,226 $ 78,175 $ 9,949 78 CITY OF EDGEWATER, FLORIDA Schedule of Revenues, Expenditures, and Changes in Fund Balances--Budget and Actual Annually-Budgeted Major Capital Projects Fund For the Fiscal Year Ended September 30, 2018 General Construction Budgeted Amounts Variance with Final Budget- Positive (Negative) Actual Original Final Amounts REVENUES Intergovernmental $ 807,436 $ 1,420,835 $ 1,268,458 $ (152,377) Investment earnings - - 52,321 52,321 Total revenues 807,436 1,420,835 1,320,779 (100,056) EXPENDITURES Capital outlay 926,760 5,370,084 3,152,582 2,217,502 Other Services&Charges 303,676 418,270 66,359 351,911 Total expenditures 1,230,436 5,788,354 3,218,941 2,569,413 Excess(deficiency)of revenues over(under)expenditures (423,000) (4,367,519) (1,898,162) 2,469,357 OTHER FINANCING SOURCES(USES) Transfers in - 631,925 108,303 (523,622) Total other financing sources(uses) - 631,925 108,303 (523,622) Net change in fund balance (423,000) (3,735,594) (1,789,859) 1,945,735 Beginning fund balances 3,883,163 3,883,163 3,883,163 - Ending fund balances $ 3,460,163 $ 147,569 $ 2,093,304 $ 1,945,735 79 � ittei�;;�aw��wn�,. �� " �1 � , � � h z.,„. .y . „ �.,�. ��'.� �.aaa.m,r...�.,'�r�"..,:""" "°.�:"* — �'I��III'. - ky,. ��i i' U� �� I� ��A�� 'lor�da � This page intentionally left blank $o CITY OF EDGEWATER, FLORIDA Internal Service Funds September 30, 2018 INTERNAL SERVICE FUNDS are used to account for the financing of centralized services to City departments on a cost-reimbursement basis (including depreciation). Management Information Systems (MIS)—To account for data processing operations and the cost of computer services used by other City departments. Fleet—To account for the cost of operating a maintenance facility for automotive equipment used by other City departments/divisions. Loss Fund—To account for the general liability and property insurances of the City. Fully Insured —To account for the health, dental and life insurance of the City's employees and retirees. Workers Comp—To account for the workers compensation insurance of the City. 81 CITY OF EDGEWATER, FLORIDA Combining Statement of Net Position Internal Service Funds September 30, 2018 Loss Fully Workers MIS FLEET Fund Insured Comp Total ASSETS Current assets: Cash $ 175,704 $ 324,074 $ 7,307 $ 469,565 $ 1,918 $ 978,568 Receivables--net - 38 - 22 27,141 27,201 Inventories - 24,207 - - - 24,207 Prepaid items 11,581 - - - - 11,581 Total current assets 187,285 348,319 7,307 469,587 29,059 1,041,557 Noncurrent assets: Capital assets: Buildings and improvements 60,684 - - - - 60,684 Machinery and equipment 265,626 98,809 - - - 364,435 Less accumulated depreciation (251,982) (86,461) - - - (338,443) Total capital assets(net of accumulated depreciation) 74,328 12,348 - - - 86,676 Total noncurrent assets 74,328 12,348 - - - 86,676 Total assets 261,613 360,667 7,307 469,587 29,059 1,128,233 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to OPEB $ 4,413 $ 2,206 $ - $ - $ - $ 6,619 LIABILITIES Current liabilities: Accounts payable 26,331 5,876 - 205,151 - 237,358 Accrued liabilities 4,762 3,311 - - - 8,073 Compensated absences 19,142 13,974 - - - 33,116 Accrued interest payable 129 - - - - 129 Notes payable-current 10,062 - - - - 10,062 Total current liabilities 60,426 23,161 - 205,151 - 288,738 Noncurrent liabilities: Compensated absences 14,404 22,147 - - - 36,551 Long-term debt payable after one year 54,748 - - - - 54,748 OPEB liability 100,393 50,197 - - - 150,590 Total noncurrent liabilities 169,545 72,344 - - - 241,889 Totalliabilities 229,971 95,505 - 205,151 - 530,627 DEFERRED INFLOWS OF RESOURCES Deferred inflows related to OPEB $ 7,581 $ 3,791 $ - $ - $ - $ 11,372 NET POSITION Net investment in capital assets 9,518 12,348 - - - 21,866 Unrestricted 18,956 251,229 7,307 264,436 29,059 570,987 Total net position $ 28,474 $ 263,577 $ 7,307 $ 264,436 $ 29,059 $ 592,853 82 CITY OF EDGEWATER, FLORIDA Combining Statement of Revenues, Expenses, and Changes in Fund Net Position Internal Service Funds For the Fiscal Year Ended September 30, 2018 Loss Fully Workers MIS FLEET Fund Insured Comp Total Operating revenues: Billings to City departments $ 674,838 $ 928,370 $ 332,395 $ 2,606,301 $ 289,658 $ 4,831,562 Operating expenses: Salaries and employee benefits 257,617 165,489 - 2,339,872 283,091 3,046,069 Supplies and materials 157,489 367,392 - - - 524,881 Contract services 154,372 743 - 51,052 - 206,167 Other services and charges 86,008 285,862 332,395 - - 704,265 Depreciation 53,449 6,678 - - - 60,127 Total operating expenses 708,935 826,164 332,395 2,390,924 283,091 4,541,509 Operating income(loss) (34,097) 102,206 - 215,377 6,567 290,053 Nonoperating revenues(expenses) Investment earnings 115 371 10 456 - 952 Interest expense (1,661) - - - - (1,661) Total nonoperating revenues (1,546) 371 10 456 - (709) Income(loss)before contributions and transfers (35,643) 102,577 10 215,833 6,567 289,344 Transfers in 27,953 - - - - 27,953 Change in net position (7,690) 102,577 10 215,833 6,567 317,297 Total net position-beginning,as restated 36,164 161,000 7,297 48,603 22,492 275,556 Total net position-ending $ 28,474 $ 263,577 $ 7,307 $ 264,436 $ 29,059 $ 592,853 83 CITY OF EDGEWATER, FLORIDA Combining Statement of Cash Flows Internal Service Funds For the Fiscal Year Ended September 30,2018 Loss Fully Workers MIS FLEET Fund Insured Comp Total Cash flows from operating activities: Receipts-customersandusers $ 674,852 $ 928,355 $ 332,396 $ 2,606,308 $ 274,227 $ 4,816,138 Payments-suppliers (365,589) (644,778) (332,395) (2,394,861) (283,091) (4,020,714) Payments-employees (255,834) (166,348) - - - (422,182) Net cash provided(used)by operating activities 53,429 117,229 1 211,447 (8,864) 373,242 Cash flows from noncapital financing activities: Cash received from(paid to)other funds 27,953 - - - - 27,953 Cash flows from capital and related financing activities: Interestpaymentsondebt (1,680) - - - - (1,680) Principal paid on debt (g,$26) - - - - (9,826) Net cash used in capital and related financing adivities (11,506) - - - - (11,506) Cash flows from investing activities: Interestoninvestments 115 371 10 456 - 952 Net cash provided(used)by investing adivities 115 371 10 456 - 952 Net increase(decrease)in cash and cash equivalents 69,991 117,600 11 211,903 (8,864) 390,641 Beginning cash and cash equivalents 105,713 206,474 7,296 257,662 10,782 587,927 Ending cash and cash equivalents $ 175,704 $ 324,074 $ 7,307 $ 469,565 $ 1,918 $ 978,568 Reconciliation of operating income(loss)to net cash provided (used)by operating adivities: Operating income(loss) $ (34,097) $ 102,206 $ - $ 215,377 $ 6,567 $ 290,053 Adjustments to reconcile operating income(loss)to net cash provided(used)by operating adivities: Depreciation and amortization 53,449 6,678 - - - 60,127 (Increase)decrease in assets: Receivables-net 14 (15) 1 7 (15,431) (15,424) Inventories - 6,754 - - - 6,754 Prepaid Items 6,275 3,668 - - - 9,943 Increase(decrease)in liabilities: Accounts payable 25,646 (1,165) - (3,937) - 20,544 Accrued liabilities 359 (38) - - - 321 OPEB liability (250) (123) - - - (373) Compensated absences 2,033 (736) - - - 1,297 Total adjustments 87,526 15,023 1 (3,930) (15,431) 83,189 Net cash provided(used)by operating activities $ 53,429 $ 117,229 $ 1 $ 211,447 $ (8,864) $ 373,242 84 CITY OF EDGEWATER, FLORIDA Other Supplemental Schedules September 30, 2018 Fiduciary Funds— Pension Trust Funds Police, Firefighter and General Employees' Pension Funds — These funds are used to account for the accumulation of resources to be used for retirement annuity payments at the appropriate amounts and times in the future. Resources are contributed by employees at a rate fixed by law and by the City and the State at amounts determined by an annual actuarial study. 85 CITY OF EDGEWATER, FLORIDA Combining Statement of Fiduciary Net Position Pension Trust Funds September 30, 2018 General Employees Police Officers Firefighters Total ASSETS Cash and cash equivalents $ 444,618 $ 359,009 $ 375,848 $ 1,179,475 Accrued income 53,502 27,949 31,191 112,642 Bonds US Treasury notes 699,082 299,334 235,844 1,234,260 GNMA 1,923,641 946,073 112,050 2,981,764 Municipal bonds 114,201 59,591 144,701 318,493 Corporate bonds 3,051,358 1,514,683 2,979,924 7,545,965 Equities - - 10,825,910 10,825,910 Mutual fund-equities 6,250,696 7,116,939 - 13,367,635 Total assets 12,537,098 10,323,578 14,705,468 37,566,144 NET POSITION Restricted for pensions $ 12,537,098 $ 10,323,578 $ 14,705,468 $ 37,566,144 86 CITY OF EDGEWATER, FLORIDA Combining Statement of Changes in Fiduciary Net Position Pension Trust Funds For the Fiscal Year Ended September 30, 2018 General Police Employees Officers Firefighters Total ADDITIONS Contributions: Employer $ 747,522 $ 800,116 $ 367,844 $ 1,915,482 Employee 4,843 90,216 118,195 213,254 State of Florida - 163,282 151,680 314,962 Total contributions 752,365 1,053,614 637,719 2,443,698 Investment earnings: Interest and dividends 755,714 351,811 250,457 1,357,982 Net increase in the fair value of investments 84,254 423,021 1,465,554 1,972,829 Totalinvestmentearnings 839,968 774,832 1,716,011 3,330,811 Less investment expenses (40,270) (32,896) (78,111) (151,277) Net investment earnings 799,698 741,936 1,637,900 3,179,534 Total Additions 1,552,063 1,795,550 2,275,619 5,623,232 DEDUCTIONS Pension benefits 1,469,263 867,226 569,820 2,906,309 Administrative expenses 50,337 50,737 48,807 149,881 Total deductions 1,519,600 917,963 618,627 3,056,190 Change in net position 32,463 877,587 1,656,992 2,567,042 Net position-beginning 12,504,635 9,445,991 13,048,476 34,999,102 Net position-ending $ 12,537,098 $ 10,323,578 $ 14,705,468 $ 37,566,144 87 � ittei�;;�aw��wn�,. �� " �1 � , � � h z.,„. .y . „ �.,�. ��'.� �.aaa.m,r...�.,'�r�"..,:""" "°.�:"* — �'I��III'. - ky,. ��i i' U� �� I� ��A�� 'lor�da � This page intentionally left blank $$ CITY OF EDGEWATER, FLORIDA Statistical Secton This part of the City of Edgewater, Florida'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 City's overall financial health and is unaudited. Contents Pa e s Financial Trends These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. 90_99 Revenue Capacity These schedules contain information to help the reader assess the City's most significant local revenue source, the property tax, and the municipal sales tax. 100-104 Debt Capacity These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. 105-111 Demographic and Economic Information These schedules offer economic and demographic indicators to help the reader understand the environment within which the City's financial activities take place. 112-113 Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the City provides and the activities it performs. 114-116 Sources: Unless otherwise noted, the information in these schedules is derived from the Comprehensive Annual Financial Report for the relevant fiscal year. 89 CITY OF EDGEWATER, FLORIDA Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) Fiscal Year 2018 2017 2016 2015 Governmental Activities Net Investment in Capital Assets $ 41,987,558 $ 41,696,283 $ 41,225,542 $ 41,696,833 Restricted 2,077,678 1,438,666 783,398 1,325,008 Unrestricted (3,647,781) (3,049,568) (2,675,115) (3,555,109) Total Governmental Activities Net Position $ 40,417,455 $ 40,085,381 $ 39,333,825 $ 39,466,732 Business-Type Activities Net Investment in Capital Assets $ 28,304,107 $ 29,261,065 $ 29,634,955 $ 29,142,964 Restricted 1,641,390 1,386,492 1,302,217 1,900,301 Unrestricted 5,778,281 4,590,333 4,060,782 2,703,234 TotalBusiness-Type Activities Net Position $ 35,723,778 $ 35,237,890 $ 34,997,954 $ 33,746,499 Total Net Investment in Capital Assets $ 70,291,665 $ 70,957,348 $ 70,860,497 $ 70,839,797 Restricted 3,719,068 2,825,158 2,085,615 3,225,309 Unrestricted 2,130,500 1,540,765 1,385,667 (851,875) Total Net Position $ 76,141,233 $ 75,323,271 $ 74,331,779 $ 73,213,231 90 2014 2013 2012 2011 2010 2009 $ 40,480,601 $ 43,278,270 $ 45,488,481 $ 45,286,948 $ 47,510,167 $ 48,282,223 1,255,664 1,000,424 1,063,323 1,867,693 1,568,645 2,224,684 2,163,549 1,511,496 2,939,453 4,696,621 5,310,937 5,718,964 $ 43,899,814 $ 45,790,190 $ 49,491,257 $ 51,851,262 $ 54,389,749 $ 56,225,871 $ 27,962,252 $ 30,199,966 $ 29,330,978 $ 29,408,827 $ 28,325,668 $ 25,052,445 1,694,339 1,860,458 2,250,279 1,879,888 892,784 2,078,126 7,006,277 5,239,348 5,314,263 5,586,070 6,303,962 6,408,077 $ 36,662,868 $ 37,299,772 $ 36,895,520 $ 36,874,785 $ 35,522,414 $ 33,538,648 $ 68,442,853 $ 73,478,236 $ 74,819,459 $ 74,695,775 $ 75,835,835 $ 73,334,668 2,950,003 2,860,882 3,313,602 3,747,581 2,461,429 4,302,810 9,169,826 6,750,844 8,253,716 10,282,691 11,614,899 12,127,041 $ 80,562,682 $ 83,089,962 $ 86,386,777 $ 88,726,047 $ 89,912,163 $ 89,764,519 91 CITY OF EDGEWATER, FLORIDA Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) 2018 2017 2016 2015 Program Revenues Governmental Activities: Charges for Services: General Administrative $ 197,951 $ 204,378 $ 193,140 $ 208,769 Public Safety 825,894 785,462 773,067 591,642 Public Works 507,365 455,431 382,989 306,981 Culture and recreation 69,562 62,967 51,991 - Operating Grants and Contributions 754,837 3,899,222 832,376 643,363 Capital Grants and Contributions 1,244,620 1,550,007 702,644 1,689,173 Total Govemmental Activities Program Revenues $ 3,600,229 $ 6,957,467 $ 2,936,207 $ 3,439,928 Business-Type Activities: Charges for Services: Water/Sewer Utility $ 10,216,833 $ 9,742,911 $ 9,284,327 $ 8,651,318 Solid Waste Utility 3,570,233 3,248,848 2,962,543 2,732,961 Stormwater Utility 1,720,625 1,479,727 1,466,495 1,313,221 Operating Grants and Contributions - - - Capital Grants and Contributions 306,841 1,085,533 334,843 281,527 Total 8usiness-Type Activities Program Revenues $ 15,814,532 $ 15,557,019 $ 14,048,208 $ 12,979,027 Total Government Program Revenues $ 19,414,761 $ 22,514,486 $ 16,984,415 $ 16,418,955 Expenses Governmental Activities: General administrative $ 2,445,179 $ 6,430,834 $ 3,112,845 $ 2,345,704 Culture and recreation 1,325,064 1,393,064 1,534,765 1,552,489 Public Works 1,863,482 1,696,747 1,914,982 2,022,008 Public Safety 7,583,092 8,109,942 7,164,944 6,636,406 Community Redevelopment 60,174 22,063 4,955 - Interest on long-term debt 227,505 190,935 56,794 49,891 Total Govemmental Activities Expenses $ 13,504,496 $ 17,843,585 $ 13,789,285 $ 12,606,498 Business-Type Activities: Water/Sewer Utility $ 9,218,732 $ 10,090,938 $ 8,697,283 $ 8,816,554 Solid Waste Utility 2,678,923 3,313,117 2,427,299 2,588,581 Stormwater Utility 1,373,361 1,430,987 1,336,821 1,239,072 Total 8usiness-Type Activities Expenses $ 13,271,016 $ 14,835,042 $ 12,461,403 $ 12,644,207 Total Government Expenses $ 26,775,512 $ 32,678,627 $ 26,250,688 $ 25,250,705 92 Fiscal Year 2014 2013 2012 2011 2010 2009 $ 178,890 $ 165,479 $ 141,724 $ 185,511 $ 326,863 $ 288,180 507,279 439,680 277,806 502,893 478,001 429,232 248,531 169,864 147,040 156,857 173,895 200,101 14,896 13,162 12,520 - 6,245 12,785 442,201 586,345 591,002 594,849 634,000 593,635 333,284 515,775 1,466,668 1,187,088 266,779 424,997 $ 1,725,081 $ 1,890,305 $ 2,636,760 $ 2,627,198 $ 1,885,783 $ 1,948,930 $ 8,383,806 $ 8,238,099 $ 7,634,056 $ 7,474,168 $ 7,085,984 $ 6,907,413 2,693,938 2,673,005 2,638,024 2,661,778 2,670,316 2,704,541 1,300,575 1,287,833 1,271,620 1,291,687 1,288,132 1,164,331 111,295 83,417 86,937 1,300,823 2,222,112 221,108 $ 12,489,614 $ 12,282,354 $ 11,630,637 $ 12,728,456 $ 13,266,544 $ 10,997,393 $ 14,214,695 $ 14,172,659 $ 14,267,397 $ 15,355,654 $ 15,152,327 $ 12,946,323 $ 2,060,966 $ 2,098,288 $ 1,869,872 $ 2,030,426 $ 2,120,727 $ 2,437,060 1,464,164 1,490,505 1,388,241 1,415,197 1,392,047 1,400,669 3,514,532 3,719,716 3,542,650 3,847,458 3,315,340 3,207,832 6,767,861 7,094,211 6,587,921 7,141,391 6,676,065 6,455,618 60,282 45,094 36,397 61,554 77,845 211,630 $ 13,867,805 $ 14,447,814 $ 13,425,081 $ 14,496,026 $ 13,582,024 $ 13,712,809 $ 8,459,432 $ 8,086,388 $ 8,020,597 $ 7,931,996 $ 8,246,448 $ 8,684,972 2,697,843 2,558,753 2,604,683 2,628,227 2,497,362 2,405,870 1,266,675 1,157,256 1,025,943 1,027,605 808,413 926,393 $ 12,423,950 $ 11,802,397 $ 11,651,223 $ 11,587,828 $ 11,552,223 $ 12,017,235 $ 26,291,755 $ 26,250,211 $ 25,076,304 $ 26,083,854 $ 25,134,247 $ 25,730,044 93 City of Edgewater, Florida Changes in Net Position (continued) Last Ten Fiscal Years (accrual basis of accounting) 2018 2017 2016 2015 Net(Expense)/Revenue Governmental Activities $ (9,904,267) $ (10,886,118) $ (10,853,078) $ (9,166,570) Business-Type Activities 2,543,516 721,977 1,586,805 334,820 Total GovernmentNetExpense $ (7,360,751) $ (10,164,141) $ (9,266,273) $ (8,831,750) General Revenues and Other Changes in Net Position Governmental Activities: Propertytaxes $ 6,025,937 $ 5,095,759 $ 4,572,959 $ 4,282,331 Utility and franchise taxes 3,608,538 3,303,147 3,222,232 3,249,749 Intergovernmental shared revenue 2,327,579 2,144,426 2,028,373 1,967,348 Investmentearnings 111,156 61,213 38,006 48,705 Gain on sale of assets - - - Miscellaneous revenue 66,061 75,659 106,099 140,093 Transfers 914,544 957,470 752,502 727,491 Total Govemmental Activities $ 13,053,815 $ 11,637,674 $ 10,720,171 $ 10,415,717 Business-Type Activities: Investment earnings $ 39,732 $ 13,067 $ 5,704 $ 6,796 Miscellaneous revenue 126,466 462,362 411,448 132,423 Transfers (914,544) (957,470) (752,502) (727,491) Total 8usiness-Type Activities $ (748,346) $ (482,041) $ (335,350) $ (588,272) Total Government $ 12,305,469 $ 11,155,633 $ 10,384,821 $ 9,827,445 Change in Net Position Governmental Activities $ 3,149,548 $ 751,556 $ (132,907) $ 1,249,147 Business-Type Activities 1,795,170 239,936 1,251,455 (253,452) Total GovernmentChangeinNetPosition $ 4,944,718 $ 991,492 $ 1,118,548 $ 995,695 94 Fiscal Year 2014 2013 2012 2011 2010 2009 $ (12,142,724) $ (12,557,509) $ (10,788,321) $ (11,868,828) $ (11,696,241) $ (11,763,879) 65,664 479,957 (20,586) 1,140,628 1,714,321 (1,019,842) $ (12,077,060) $ (12,077,552) $ (10,808,907) $ (10,728,200) $ (9,981,920) $ (12,783,721) $ 4,120,260 $ 3,763,456 $ 3,669,228 $ 4,459,591 $ 5,083,616 $ 5,638,194 3,182,716 3,051,649 2,947,266 3,047,731 3,051,595 3,164,803 2,030,522 1,814,689 1,680,896 1,618,530 1,574,091 1,673,522 52,399 25,339 36,148 32,274 79,230 6,019 14,500 11,855 11,029 8,008 7,308 9,533 134,304 38,888 43,699 42,117 64,279 55,163 717,647 150,566 40,050 122,090 - (215,517) $ 10,252,348 $ 8,856,442 $ 8,428,316 $ 9,330,341 $ 9,860,119 $ 10,331,717 $ 6,517 $ 3,879 $ 37,510 $ 92,243 $ 161,505 $ (3,450) 99,023 70,982 43,861 241,590 107,940 89,522 (717,647) (150,566) (40,050) (122,090) - 215,517 $ (612,107) $ (75,705) $ 41,321 $ 211,743 $ 269,445 $ 301,589 $ 9,640,241 $ 8,780,737 $ 8,469,637 $ 9,542,084 $ 10,129,564 $ 10,633,306 $ (1,890,376) $ (3,701,067) $ (2,360,005) $ (2,538,487) $ (1,836,122) $ (1,432,162) (546,443) 404,252 20,735 1,352,371 1,983,766 (718,253) $ (2,436,819) $ (3,296,815) $ (2,339,270) $ (1,186,116) $ 147,644 $ (2,150,415) 95 CITY OF EDGEWATER, FLORIDA Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Year 2018 2017 2016 2015 General Fund Reserved $ - $ - $ - $ - Unreserved - - - Nonspendable 14,485 28,664 30,041 1,198 Restricted 50,278 46,073 45,538 456,809 Assigned 2,193,018 807,749 1,083,984 780,323 Unassigned 3,180,919 3,018,746 2,376,555 2,808,975 Total General Fund $ 5,438,700 $ 3,901,232 $ 3,536,118 $ 4,047,305 All Other Governmental Funds Reserved $ - $ - $ - $ - Unreserved, Reported in: Debt service funds - - - Special revenue funds - - - Capital projects funds - - - Restricted 2,937,739 4,441,391 746,891 666,096 Committed - - - Unassigned - - - Total All Other Governmental Funds $ 2,937,739 $ 4,441,391 $ 746,891 $ 666,096 Total Governmental Funds $ 8,376,439 $ 8,342,623 $ 4,283,009 $ 4,713,401 Note: In 2011 GASB 54 was implemented changing the classification of Governmental Fund Balances. Prior years were not restated. 96 2014 2013 2012 2011 2010 2009 $ - $ - $ - $ - $ 245,131 $ 234,084 - - - - 5,974,500 5,826,394 422,120 22,170 436 138,459 - - 2,990 4,028 3,408 448 - - 750,749 500,000 1,872,129 1,565,639 - - 2,770,632 2,744,608 2,452,923 3,702,417 - - $ 3,946,491 $ 3,270,806 $ 4,328,896 $ 5,406,963 $ 6,219,631 $ 6,060,478 $ - $ - $ - $ - $ - $ 836,596 - - - - (176,200) - - - - - 908,339 879,195 - - - - 422,132 335,093 898,969 649,231 712,080 1,221,758 - - - - - 542,510 - - - - - (2,119) - - $ 898,969 $ 649,231 $ 712,080 $ 1,762,149 $ 1,154,271 $ 2,050,884 $ 4,845,460 $ 3,920,037 $ 5,040,976 $ 7,169,112 $ 7,373,902 $ 8,111,362 97 CITY OF EDGEWATER, FLORIDA Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Year 2018 2017 2016 2015 Revenues Taxes $ 9,634,475 $ 8,398,906 $ 7,795,191 $ 7,532,080 Intergovernmental 4,233,086 7,513,956 3,506,532 4,244,105 Licenses and permits 499,510 455,435 398,346 320,954 Charges for services 2,011,630 1,860,657 1,736,070 1,560,007 Fines and forfeitures 151,461 194,901 266,864 171,998 Investment Earnings 110,204 60,436 37,833 48,612 I m pact fees 185,507 151,151 160,103 183,385 Miscellaneous 108,149 166,841 265,625 137,921 Total Revenues $ 16,934,022 $ 18,802,283 $ 14,166,564 $ 14,199,062 Expenditures Current: General administrative services $ 2,813,463 $ 5,697,152 $ 2,234,076 $ 2,198,362 Legislative 103,794 109,377 99,820 91,954 Executive 521,481 560,939 619,910 614,357 Legal Counsel 113,286 89,708 158,443 89,589 Community Development 610,462 618,871 983,354 774,022 Cultural and recreation 1,066,734 1,154,810 1,265,641 1,289,790 Publicworks 876,198 739,971 1,051,075 1,127,990 Public safety Law enforcement 3,928,928 3,725,582 3,524,244 3,285,144 Fire and emergency services 3,398,597 3,656,321 3,460,655 3,103,765 Code enforcement 142,907 113,069 125,334 103,301 Animal services 129,980 113,304 109,865 107,507 Debt service: Principal 520,000 231,586 375,675 151,007 Interest and Fiscal Charges 225,844 140,369 49,848 47,542 Capital outlay 3,335,123 4,583,159 1,249,938 2,501,416 Total Expenditures $ 17,786,797 $ 21,534,218 $ 15,307,878 $ 15,485,746 ExcessofRevenuesOver(Under) Expenditures (852,775) (2,731,935) (1,141,314) (1,286,684) Other Financing Sources(Uses) Transfers In $ 1,127,109 $ 3,401,828 $ 1,018,996 $ 1,342,491 Transfers Out (240,518) (2,479,558) (314,584) (615,000) Capitallease - 433,279 - 410,894 Debt Issued - 5,436,000 - - General obligation note - - - Sale of capital assets - 6,510 16,240 TotalOtherFinancing Sources(Uses) 886,591 6,791,549 710,922 1,154,625 Net Change in Fund Balances $ 33,816 $ 4,059,614 $ (430,392) $ (132,059) Debt Service as a Percentage of Noncapital Expenditures 5.16% 2.19% 3.03% 1.53% 98 2014 2013 2012 2011 2010 2009 $ 7,302,976 $ 6,815,105 $ 6,616,494 $ 7,507,322 $ 8,159,811 $ 8,747,647 2,812,565 2,933,095 3,758,487 3,400,644 2,436,438 2,724,831 263,641 236,820 217,715 227,703 237,714 231,006 1,319,396 1,132,520 1,038,741 1,024,644 1,156,279 1,098,013 240,149 195,851 166,133 150,569 164,897 128,806 52,399 25,338 36,148 37,379 79,230 6,019 102,105 44,136 34,067 68,405 97,734 551,218 134,461 38,539 50,669 56,869 102,790 55,163 $ 12,227,692 $ 11,421,404 $ 11,918,454 $ 12,473,535 $ 12,434,893 $ 13,542,703 $ 1,680,375 $ 1,590,455 $ 1,439,252 $ 1,478,452 $ 1,409,242 $ 1,561,882 96,597 93,377 92,592 100,154 85,046 74,448 567,755 558,357 534,199 454,905 463,127 422,097 101,398 89,195 87,075 120,685 211,232 230,049 459,651 419,476 473,381 529,275 567,519 515,719 1,198,951 1,237,586 1,151,797 1,159,916 1,153,785 1,146,168 588,415 562,286 469,592 356,739 325,752 311,807 3,262,859 3,232,114 2,827,511 3,507,483 3,197,903 3,159,454 2,942,624 2,942,859 2,765,756 2,826,861 2,745,411 2,634,957 75,725 144,716 95,488 166,253 212,418 205,836 110,809 132,794 269,712 227,600 230,974 205,996 418,092 445,714 892,559 810,871 1,903,462 1,548,714 47,644 52,715 38,876 57,789 155,287 166,127 889,268 1,320,804 2,984,879 1,745,612 728,503 1,659,313 $ 12,440,163 $ 12,822,448 $ 14,122,669 $ 13,542,595 $ 13,389,661 $ 13,842,567 (212,471) (1,401,044) (2,204,215) (1,069,060) (954,768) (299,864) $ 1,078,168 $ 676,660 $ 626,332 $ 846,702 $ 757,345 $ 975,601 (379,271) (568,994) (561,282) (740,440) (757,345) (1,168,748) - - - - - 144,998 432,000 160,583 - 750,000 210,000 - 6,997 11,856 11,029 8,008 7,308 1,194,770 1,137,894 280,105 76,079 864,270 217,308 1,146,621 $ 925,423 $ (1,120,939) $ (2,128,136) $ (204,790) $ (737,460) $ 846,757 4.03% 4.33% 8.25% 7.20% 16.26% 13.88% 99 CITY OF EDGEWATER, FLORIDA Tax Revenues by Source of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Year Ended Utility and Intergovernmental September 30 Property Taxes franchise taxes Revenue Total 2009 $ 5,638,194 $ 3,109,453 $ 2,724,831 $ 11,472,478 2010 5,083,616 3,076,195 2,436,438 10,596,249 2011 4,459,591 3,047,731 3,400,644 10,907,966 2012 3,669,228 2,947,266 3,758,487 10,374,981 2013 3,763,456 3,051,649 2,933,095 9,748,200 2014 4,120,260 3,182,716 2,812,565 10,115,541 2015 4,282,331 3,249,749 4,244,105 11,776,185 2016 4,572,959 3,222,232 3,506,532 11,301,723 2017 5,095,759 3,303,147 7,513,956 15,912,862 2018 6,025,937 3,608,538 4,233,086 13,867,561 100 CITY OF EDGEWATER, FLORIDA Assessed Value and Actual Value of Taxable Property Last Ten Fiscal Years Fiscal Year Centrally Exemptions Total Taxable Total Ended Real Personal Assessed Estimated Real Assessed Direct Sept.30,2018 Property Property Property Actual Value Property Value Tax Rate 2009 $1,567,728,018 $ 46,686,002 $ 3,852,385 $1,618,266,405 $636,648,753 $ 981,617,652 5.9330 2010 1,239,413,071 47,937,851 2,789,838 1,290,140,760 467,797,506 822,343,254 6.3982 2011 1,014,902,147 46,368,404 2,452,717 1,063,723,268 374,884,311 688,838,957 6.6385 2012 859,937,271 44,818,406 2,847,810 907,603,487 327,571,414 580,032,073 6.5304 2013 869,698,616 44,709,946 2,419,118 916,827,680 326,361,580 590,466,100 6.5612 2014 893,847,254 46,863,494 2,615,633 943,326,381 330,091,016 613,235,365 6.9340 2015 934,739,055 49,197,000 3,085,203 987,021,258 334,889,928 652,131,330 6.7530 2016 985,904,666 53,797,067 3,590,304 1,043,292,037 343,753,169 699,538,868 6.7486 2017 1,152,173,102 82,395,064 4,403,969 1,238,972,135 374,040,287 864,931,848 6.7445 2018 1,245,616,754 92,091,785 4,487,968 1,342,196,507 394,071,253 948,125,254 7.0040 Source:Volusia County Property Appraiser's Office&City of Edgewater CAFRs. 101 CITY OF EDGEWATER, FLORIDA Property Tax Rates Direct and Overlapping Governments Last Ten Fiscal Years City of Debt Total Volusia Fiscal Edgewater�'� Service Direct County�'� School District Grand Year Operating Millage Millage Rate Millage Millage Other�z� Total 2009 5.9000 0.0330 5.9330 5.4037 7.4590 3.5865 22.3823 2010 6.3600 0.0382 6.3982 6.4233 8.2370 3.7932 24.8517 2011 6.5910 0.0475 6.6385 6.3025 8.2370 4.0012 25.1792 2012 6.4700 0.0604 6.5304 6.7791 8.0630 3.9682 25.3407 2013 6.5000 0.0612 6.5612 6.8809 7.8880 3.6967 25.0268 2014 6.8760 0.0580 6.9340 7.2709 7.3580 3.6028 25.1657 2015 6.7000 0.0530 6.7530 7.2709 7.3360 3.4160 24.7759 2016 6.7000 0.0486 6.7486 7.2709 7.1970 3.2492 24.4657 2017 6.7000 0.0445 6.7445 7.0520 6.5200 1.8643 22.1808 2018 6.7000 0.3040 7.0040 6.6464 6.2810 1.7675 21.6989 (1) Millage includes General Fund and VoterApproved Debt service (2) Inlet and Port Authority, Florida Inland Navigation District and St. Johns River Water Management District, Mosquito Control, and Hospital Operating 102 CITY OF EDGEWATER, FLORIDA Principal Taxpayers Current Year and Ten Years Ago 2018 2009 Real Percentage Real Percentage Property of Total Property of Total Assessed Assessed Assessed Assessed Taxpayer Valuation Rank Valuation Valuation Rank Valuation Brunswick Corporation $ 30,428,315 1 2.44% Florida Power& Light Company $ 23,523,729 2 1.89% $ 13,532,963 1 1.38% Hacienda Del Rio LLC $ 18,168,799 3 1.46% New BW Inc $ 8,958,903 4 0.72% RJ Doughtery Associates Inc. $ 8,443,368 5 0.68% $ 5,427,708 3 0.55% 3050 Holdings, LLC $ 4,518,670 6 0.36% $ 4,525,991 8 0.46% Revenue Properties Florida $ 4,344,463 7 0.35% $ 4,445,528 9 0.45% Florida East Coast Railway Co $ 3,952,584 8 0.32% $ 3,969,004 10 0.40% Bright House Networks LLC $ 3,358,453 9 0.27% Holly Investment LTD $ 3,209,987 10 0.26% Worthington Creek Invest, LLC $ 5,830,861 2 0.59% Edgewater Harbor, LLC $ 5,367,646 4 0.55% Carder, James C TR $ 5,238,534 5 0.53% Seaedge Partners, LLC $ 5,150,100 6 0.52% 308 Realty, LLC $ 4,891,460 7 0.50% $ 108,907,271 8.74% $ 58,379,795 5.95% Total Assessed Valuation $1,245,934,333 $ 981,617,652 Source: Volusia County Property Appraiser's Office &2009 City of Edgewater CAFR. 103 CITY OF EDGEWATER, FLORIDA Property Tax Levies And Collections Last Ten Fiscal Years Percent of Percent of Total Current Current Tax Delinquent Total Total Tax Fiscal Tax Tax Collections Tax Tax Collections Year Levy Collections To Tax Levy Collections Collections To Tax Levy 2009 $ 5,822,971 $ 5,611,299 96.36 % $ 26,895 5,638,194 96.83 % 2010 5,230,103 5,035,560 96.28 % 17,704 5,053,264 96.62 % 2011 4,515,489 4,343,936 96.20 % 83,812 4,427,748 98.06 % 2012 3,752,808 3,625,224 96.60 % 10,100 3,635,324 96.87 % 2013 3,836,165 3,558,179 92.75 % 170,189 3,728,368 97.19 % 2014 4,216,606 4,072,002 96.57 % 13,726 4,085,728 96.90 % 2015 4,365,036 4,219,641 96.67 % 29,065 4,248,706 97.33 % 2016 4,686,910 4,387,633 93.61 % 143,061 4,530,694 96.67 % 2017 5,024,786 4,848,641 96.49 % 23,795 4,872,436 96.97 % 2018 5,791,342 5,589,817 96.52 % 35,559 5,625,376 97.13 % Source: Volusia County Property Appraiser and Tax Collector. 104 CITY OF EDGEWATER, FLORIDA Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years General Bonded Debt Outstanding Percentage of Net Estimated General Actual Taxable Bonded Fiscal Actual Obligation Value of Debt Per Year Population (1) Taxable Value Bonded Debt Property Capita 2009 21,394 $ 981,617,652 $ 425,000 0.043% 19.87 2010 21,017 822,343,254 410,000 0.050% 19.51 2011 20,885 688,838,957 395,000 0.057% 18.91 2012 20,775 580,032,073 375,000 0.065% 18.05 2013 20,737 590,466,100 355,000 0.060% 17.12 2014 20,748 613,235,365 335,000 0.055% 16.15 2015 20,958 652,131,330 315,000 0.048% 15.03 2016 21,280 699,538,868 295,000 0.042% 13.86 2017 21,509 864,931,848 3,667,000 0.424% 170.49 2018 23,319 948,125,254 3,507,000 0.370% 150.39 Source: Volusia County Property Appraiser and Tax Collector. (1) See Demographic and Economic Statistics for population data. 105 CITY OF EDGEWATER, FLORIDA Ratios of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities Special General Fiscal Notes Assessment Obligation Capital Line Notes Capital Year Payable Notes Note Leases of Credit Payable Leases 2009 $ 2,701,092 $ 1,297,442 $ 425,000 $ 225,466 $ - $ 2,592,437 $ 5,548,388 2010 2,110,073 - 410,000 388,424 - 1,542,000 5,258,430 2011 2,269,055 - 395,000 183,569 - 1,028,000 4,881,594 2012 1,424,037 - 375,000 156,029 - - 4,527,471 2013 1,027,019 - 355,000 287,916 - 4,142,717 - 2014 1,225,000 - 335,000 226,843 - 4,455,000 - 2015 1,147,674 - 315,000 574,947 - 4,454,327 - 2016 1,063,288 - 295,000 294,150 - 13,692,712 - 2017 2,903,034 - 3,667,000 635,717 - 12,090,966 62,220 2018 2,784,638 - 3,507,000 458,923 - 10,430,362 50,282 Note-1: Details regarding the City's outstanding debt can be found in the notes to the financial statements. Note-2: Net of deferred amount refunding for FY2013 and prior years. (1) See Demographic and Economic Statistics for personal income and population data. 106 Business Type Activities State Percentage Revolving Revenue Line of Personal Per Personal Loan Bonds of Credit Total Income(1) Capita(1) Income Population $ 8,137,963 $ 9,679,987 $ - $ 30,607,775 5.70°/a 1,431 536,989,400 21,394 8,388,828 7,814,973 - 25,912,728 4.72°/a 1,233 549,153,193 21,017 8,582,920 7,331,611 - 24,671,749 5.70°/a 1,181 432,528,350 20,885 - 15,077,524 - 21,560,061 5.10°/a 1,038 423,020,550 20,775 4,403,042 13,946,595 - 24,162,289 5.45°/a 1,165 443,418,346 20,737 6,290,915 12,753,000 - 25,285,758 5.53°/a 1,219 457,057,692 20,748 6,139,058 11,439,000 - 24,070,006 4.69°/a 1,148 513,471,000 20,958 5,866,152 - - 21,211,302 4.25°/a 997 499,079,840 21,280 5,894,079 - - 25,253,016 4.91°/a 1,174 514,323,208 21,509 5,635,032 - - 22,866,237 4.06% 981 562,990,617 23,319 107 CITY OF EDGEWATER, FLORIDA Direct and Overlapping Debt Net General Percentage City of Obligation Applicable to Edgewater Debt the City of Share of Governmental Unit Outstanding Edgewater Debt Volusia County $ 9,480,000 2.78% $ 263,544 Volusia County School District - 0.00% - Subtotal Overlapping Debt 9,480,000 2.78% 263,544 City Direct Debt 6,750,561 100.00% 6,750,561 Total Direct and Overlapping Debt $ 16,230,561 $ 7,014,105 Note: The county-wide debt amount is comprised of$9,480,000 of the County of Volusia's Limited Tax general obligation bonds. The County's debt is overlapping to the City's in relation to its taxable property value compared to the County's as a whole. The City's general obligation debt is listed above and is direct debt to the City and underlapping to the County. Source: Volusia County. 108 CITY OF EDGEWATER, FLORIDA Pledged-Revenue Coverage Last Nine Fiscal Years (dollars in thousands) Water and Wastewater Refunding Revenue Bond, Series 2016�'� Less: Available Net Fiscal Gross Operating Impact Revenue& Debt Service Year�z� Revenues�3� Expenses�4� Fees Impact Fees Principal Interest Total Coverage 2010 $ 7,085,984 $ 4,863,198 $ 226,897 $ 2,449,683 $ - $ 95,296 $ 95,296 25.71 2011 7,474,168 4,372,447 70,550 3,172,271 505,000 261,545 766,545 4.14 2012 7,634,056 4,849,002 42,979 2,828,033 570,000 243,378 813,378 3.48 2013 8,238,099 5,140,343 61,907 3,159,663 1,154,000 378,526 1,532,526 2.06 2014 8,383,806 5,348,671 80,102 3,115,237 1,273,000 368,499 1,641,499 1.90 2015 8,651,318 5,288,285 220,056 3,583,089 1,314,000 325,392 1,639,392 2.19 2016 9,284,327 5,457,041 102,899 3,930,185 1,473,500 260,024 1,733,524 227 2017 9,742,911 6,826,218 100,988 3,017,681 497,000 218,569 715,569 422 2018 10,216,833 6,019,564 231,688 4,428,957 856,000 198,881 1,054,881 420 Note: Detail regarding the City's outstanding debt can be found in the notes to the financial statements. (1) The two Water and Wastewater Refunding Revenue Bond Series(2009 and 2012)have been retroactively combined as of 9/30/2015 through a refinancing that occurred on 2/25/2016. (2) The Water and Wastewater Refunding Revenue Bond has not been active for ten years. (3) According to the Resolution, Gross Revenues should exclude interest earnings on the Renewal and Replacement Fund and Construction Fund. (4) Total direct operating expenses excludes depreciation,amortization and overhead charges. 109 CITY OF EDGEWATER, FLORIDA Legal Debt Margin Information Last Ten Fiscal Years Legal Debt Margin Calculation for Fiscal Years Assessed Valuation 2018 2017 2016 2015 Assessed taxable real property value $ 787,008,907 $ 696,387,893 $ 649,384,830 $ 607,562,754 Add back: exempt real property 365,113,414 348,289,949 336,519,836 327,176,301 Total assessed value of real property $1,152,122,321 $ 1,044,677,842 $ 985,904,666 $ 934,739,055 Legal debt margin: Debt limit $ 8,640,917 $ 7,835,084 $ 7,394,285 $ 7,010,543 Total net debt applicable to limit 6,291,638 6,570,034 1,357,438 1,722,621 Legal debt margin $ 2,349,279 $ 1,265,050 $ 6,036,847 $ 5,287,922 Total net debt applicable to the limit as a percentage of debt limit 72.81% 83.85% 18.36% 24.57% Note 1: Per City of Edgewater City Charter, the City's outstanding legal debt should not exceed .75%of total assessed property value. Note 2: Total net debt applicable to limit includes governmental activities notes payable, special assessment notes, capital leases, and line of credit. 110 2014 2013 2012 2011 2010 2009 $ 571,414,914 $ 550,695,413 $ 540,185,717 $ 640,017,836 $ 771,615,565 $ 931,079,265 322,432,340 319,003,203 319,751,554 374,884,311 467,797,506 636,648,753 $ 893,847,254 $ 869,698,616 $ 859,937,271 $ 1,014,902,147 $ 1,239,413,071 $ 1,567,728,018 $ 6,703,854 $ 6,522,740 $ 6,449,530 $ 7,611,766 $ 9,295,598 $ 11,757,960 1,451,843 1,314,935 1,580,066 2,452,624 2,498,497 4,224,000 $ 5,252,011 $ 5,207,805 $ 4,869,464 $ 5,159,142 $ 6,797,101 $ 7,533,960 21.66% 20.16% 24.50% 32.22% 26.88% 35.92% 111 CITY OF EDGEWATER, FLORIDA Demographic and Economic Statistics Last Ten Fiscal Years Total Per Capita County Calendar Personal Personal Median Unemployment School Year Population(1) Income Income 2 Age(3) Rate(4) Enrollment(5) 2009 21,394 $ 536,989,400 $25,100 46.3 11.8% 2,188 2010 21,017 549,153,193 26,129 46.1 12.6% 2,144 2011 20,885 432,528,350 20,710 46.4 10.3% 1,900 2012 20,775 423,020,550 20,362 47.5 8.8% 1,895 2013 20,737 443,418,346 21,765 47.9 6.8% 1,933 2014 20,748 457,057,692 22,029 46.6 5.9% 1,388 2015 20,958 513,471,000 24,500 49.1 5.8% 1,361 2016 21,280 499,079,840 23,453 49.8 5.1% 1,369 2017 21,509 514,323,208 23,912 51.0 4.2% 1,332 2018 23,319 562,990,617 24,143 50.9 3.1% 1,321 2018 Sources: (1)Source: University of Florida, Bureau of Economic and Business Research,2018 Estimate. (2) US Census Bureau,2013-2017 American Community Survey 5-Year Estimates. (3) US Census Bureau,2013-2017 American Community Survey 5-Year Estimates. (4) US Bureau of Labor Statistics, Local Area Unemployment Statistics,Volusia County, FL, Civilian Labor Force, not seasonally adjusted, September 2018. (5) Received from Schools Directly as of 9-30-18(Includes Discovery Academy, Indian River Elementary,and Edgewater Public Elementary) 112 CITY OF EDGEWATER, FLORIDA Principal Employers Current Year and Ten Years Ago 2018 2009 Percentage Percentage Number of of Total County Number of of Total County Employer (1) Employees Employment Employees(2) Employment(2) Boston Whaler 999.0 0.39% 200.0 0.08% Everglades Boats 297.0 0.12% 60.0 0.02% City of Edgewater 197.5 0.12% 188.0 0.07% Publix Supermarkets 150.0 0.06% 152.0 0.06% Edgewater Power Boats 179.0 0.07% 60.0 0.02% Dougherty Manufacturing 152.0 0.06% Edgewater Elementary 94.0 0.04% 97.0 0.04% Brunswick Commercial &Government Products 86.0 0.03% Indian River Elementary 86.0 0.03% 85.0 0.03% Winn Dixie Supermarkets 85.0 0.03% 112.0 0.04% Dustin's BBQ 27.0 0.01% 30.0 0.01% Coronado Paint 108.0 0.04% Total 2352.5 0.96% 1,092.0 0.43% Total County Employment(3) 255,427 253,875 Sources: (1) Information provided by each company. (2)City of Edgewater CAFR 2009. (3) US Bureau of Labor Statistics, Local Area Unemployment Statistics, Volusia County, FL, Civilian Labor Force, not seasonally adjusted, September 2018. 2009 Data provided by Labor Market Statistics, Florida Research and Economic Database. 113 CITY OF EDGEWATER, FLORIDA Full-Time Equivalent City Government Employees by Function/Program Last Ten Fiscal Years Fiscal Year Function/program 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 General Government: Mayor and Commission 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 City Manager 2.0 3.0 3.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 City Clerk 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 Support Departments Finance 12.5 9.0 10.0 11.0 10.5 9.5 9.5 6.5 6.5 7.0 IT/MIS/GIS 3.0 3.0 3.0 3.0 3.0 2.0 2.0 2.0 2.0 2.0 Economic Development 0.0 0.0 1.0 1.0 1.0 Human Resources 3.0 3.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 Community Development Planning and Zoning 2.0 2.0 2.0 2.0 2.0 2.0 2.0 3.0 3.0 3.0 Building 4.0 4.0 4.0 4.0 4.0 3.5 3.5 3.5 3.5 3.5 Public Safety: Police Department 35.0 34.0 33.5 34.0 34.5 35.0 33.5 33.0 34.0 33.5 Fire Department 32.0 31.0 33.5 30.5 29.5 29.5 29.0 30.0 30.0 31.0 Animal Control/Shelter 1.0 1.0 1.0 1.0 1.0 2.0 2.0 5.0 4.0 4.0 Code Enforcement 3.0 2.0 1.0 2.0 2.0 2.0 2.0 1.0 3.0 3.0 Water Resources Water Utility 9.0 10.0 15.0 14.0 11.0 11.0 9.0 10.0 10.0 10.0 Wastewater Utility 14.0 15.0 15.0 15.0 16.0 15.0 14.0 15.0 15.0 15.0 Field Operations 12.0 10.0 11.0 11.0 11.0 11.0 10.0 9.0 10.0 10.0 Stormwater 10.0 9.0 11.0 10.0 9.5 9.5 9.0 8.0 7.0 6.0 Solid Waste Utility 19.5 25.0 24.0 23.5 26.0 26.0 24.0 23.0 23.0 23.0 Parks and Recreation 17.5 17.0 15.0 15.0 15.0 15.0 15.0 15.0 16.0 16.0 Fleet 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 2.0 2.0 Public Works 8.0 7.0 9.0 7.0 8.5 9.0 7.0 7.0 7.0 8.0 Totals: 197.5 195.0 204.0 198.0 198.5 196.0 185.5 185.0 187.0 188.0 Source: Provided by the City of Edgewater Finance Department. 114 CITY OF EDGEWATER, FLORIDA Operating Indicators by Function/Program Last Ten Fiscal Years Fiscal Year Function/program 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 General Government Employment Applications Received 922 428 471 638 665 541 543 401 339 625 Personnel Actions Processed 205 156 211 125 113 138 136 81 90 94 Accidents&Injuries Reviewed 53 61 49 54 51 60 52 29 40 51 Business Tax Receipts Issued 1,075 837 970 1,032 763 1,269 1,544 982 1,401 1,707 Checks Issued 1,413 1,810 2,369 2,316 2,279 2,414 1,727 1,727 983 2,947 Competitive Procurements(ITB,RFP,)issued 8 16 13 11 23 ' ' ' ' ' Purchase Orderslssued 618 690 815 686 718 757 734 408 449 766 Public Safety Police Department Accidents 454 489 471 408 367 239 246 328 259 250 Traffic citations issued 3,215 4,677 3,100 3,017 3,450 3,188 5,245 5,958 4,780 5,514 Evidence Processed 2,824 2,799 2,654 2,178 2,153 1,803 1,800 2,130 2,027 1,582 Physical arrests 1,282 861 1,311 1,236 1,151 1,128 1,393 1,327 1,227 1,649 Callsforservice 27,663 34,179 32,426 31,991 31,503 34,395 29,752 34,228 31,168 31,394 Fire Department Emergency responses 3,509 3,605 3,333 3,024 2,565 2,738 2,679 2,825 2,873 2,841 Average response time-minutes 5.50 4.48 5.08 4.28 4.32 4.19 4.18 4.25 4.56 4.41 Public Education Programs 72 68 62 71 67 64 63 62 60 70 Fire inspections 525 1,288 1,203 1,182 1,123 1,015 1,002 920 810 807 Public Works Miles of street Resurfaced 0 0 2 2 3 1 2 - - 4 Miles of unpaved streets 8 8 14 4 4 ' ' ' ' ' Sidewalks-new construction-miles 1 0 4 - 1 1 1 - - - Parks and Recreation Ball games,practices&field rentals 823 536 372 720 786 1,226 1,598 1,726 1,887 1,974 Events/Programs 24 33 23 15 8 17 19 14 19 21 Water Resources Water main breaks 109 90 103 74 100 84 80 88 88 63 Average daily consumption-mgd 1.99 1.92 1.746 1.718 1.846 1.900 1.929 1.931 1.931 1.941 Number of water customers 10,864 10,757 10,879 10,724 10,632 10,603 10,580 10,542 10,542 10,504 NewConnections 64 27 24 67 29 23 18 38 38 16 Sewer Resources NewConnections 57 19 20 63 27 19 11 26 26 8 Average daily consumption-mgd 1.710 1.493 1.719 1.541 1.422 1,264 1 1 1.179 1.324 Number of customers 10,185 10,008 10,416 10,016 9,896 9,869 9,850 9,823 9,823 9,797 Solid Waste Utility Number of Customers 9,707 9,920 9,631 9,591 9,463 9,451 9,403 9,378 9,378 9,356 Sources:Provided by the respective departments of the City of Edgewater 'Infornation not available. 115 CITY OF EDGEWATER, FLORIDA Capital Asset Statistics by Function/Program Last Ten Fiscal Years Fiscal Year Function/program 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 Police Police Stations 1 1 1 1 1 1 1 1 1 1 Police Vehicles 33 34 30 30 29 27 28 30 30 30 Patrol Zones 2 2 2 2 2 2 2 2 2 2 Fire Fire Stations 2 2 2 2 2 2 2 2 2 2 Fire Vehicles 19 17 19 18 17 17 17 18 15 15 Public Works Streets(miles) 126 126 126 124 124 124 124 124 124 124 Number of street lights 1,230 1,230 1,057 1,080 1,071 1,068 1,068 1,068 1,068 1,068 Number of traffic signals 3 3 4 3 3 3 3 3 3 3 Vehicles 10 10 11 8 8 9 8 5 5 5 Parks and Recreation Vehicles 14 15 15 15 11 12 12 12 12 12 Parks Acreage 151 151 151 151 151 151 151 151 151 151 Parks 12 12 12 12 12 12 12 12 12 12 Baseball Fields 4 5 5 5 7 7 7 7 7 7 Tennis Courts - 4 4 4 4 4 4 4 4 4 Basketball Courts 2 3 3 3 3 2 2 2 2 2 Racquetball Courts - 4 4 4 4 4 4 4 4 4 Shuffleboard Courts - - - - 2 2 2 2 2 2 Boat Ramps 3 5 5 5 5 5 5 5 5 5 Paddling Trails 6 6 6 6 Awaiting Designation - - - - Gymnasiums(YMCA) 1 1 1 1 1 1 1 1 1 1 Water Resources Water mains(miles) 165 165 165 275 275 275 275 274 274 274 Fire hydrants 719 719 720 720 718 701 700 700 700 695 Vehicles 26 26 26 26 26 24 24 23 23 23 Sewer mains(miles) 220 220 189 189 189 189 189 189 189 189 Reclaim Water(miles) 79 79 79 72 72 72 71 71 71 71 Stormwater Utility Storm Sewers(miles) 36 36 36 36 36 36 36 35 35 35 Vehicles 19 18 18 17 17 16 15 7 7 10 Solid Waste Utility Garbage Trucks 9 8 9 10 10 10 9 7 7 8 Other Vehicles 10 10 11 13 13 13 13 12 12 14 Sources:Provided by the respective departments of the City of Edgewater Note:Parks Acreage;approximately 14 acres of Park Property was temporarily closed to the Public for Construction at time of report. 116 CITY OF EDGEWATER,FLORIDA Schedule of Expenditures of Federal Awards For the Fiscal Year Ended September 30,2018 CFDA Grant Federal Agency/Pass-Through Entity/Federal Program Number ContracUGrant Number Amount Expenditures Federal Awards U.S.Department of Housinq and Urban Development Direct Community Development Block Grants 14.218 B-16-UC-12-0008 $ 80,333 $ 39,599 Community Development Block Grants 14.218 B-17-UC-12-0008 81,760 31,591 Total U.S.Department of Housing and Urban Development and CDBG-Entitlement Grants Cluster 71,190 U.S.Department of Justice Passed Through Florida Department of Law Enforcement Mandatory Bulletproof Vest Initiative 16.607 NIJ#BA-2AOOS-MN01 2,241 2,241 Passed Through Florida Office of Attorney General Victim of Crime Act Grant 16.575 V017-00164 47,415 38,807 Total U.S.Department of Justice 41,048 U.S.Department of Transportation Passed-through Florida Department of Transportation Highway Planning and Construction-Flagler Ave.Sidewalk 20205 GOR65 373,500 356,070 Total Department of Transportation and Highway Planning and Construction Cluster 356,070 U.S.Department of Homeland Securitv Passed through State of Florida,Division of Emergency Management Disaster Grants-Public Assistance 97.036 17-PA-U5-06-74-01-030 3,395,351 3,395,351 Total U.S.Department of Homeland Security 3,395,351 Total Expenditures of Federal Awards $ 3,863,659 117 City of Egdewater, Florida Notes to Schedule of Expenditures of Federal Awards For the Year Ended September 30, 2018 (1) Basis of Presentation: The accompanying Schedule of Expenditures of Federal Awards includes federal awards activity of the City of Edgewater, Florida. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. (2) Summarv of Siqnificant Accountinq Policies: Expenditures reported on the schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-87, or the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. No amounts were passed through to subrecipients during the fiscal year ended September 30, 2018. (3) De Minimis Indirect Cost Rate Election: City of Edgewater, Florida did not elect to use the 10% de minimis indirect cost rate as covered in §200.414, Indirect(F&A) costs, of the Uniform Guidance. (4) Deferred FEMA Expenditures: During the fiscal year ended September 30, 2017, the City incurred substantial costs related to Hurricane Matthew and Hurricane Irma. Per the OMB Compliance Supplement, any reimbursements from the Federal Emergency Management Agency (FEMA) under CFDA 97.036 are not to be recognized as expenditures for purposes of the Schedule of Expenditures of Federal Awards until the respective Project Worksheets (PV� have been approved. At September 30, 2018, all federal amounts of $3,395,351 of the City of Edgewater, Florida's PWs from Hurricane Matthew had been approved by FEMA and are recognized on the Schedule of Expenditures of Federal Awards for the year ended September 30, 2018. State match amounts of $387,513 have also been approved and recorded for financial statement purposes. At September 30, 2018, no federal amounts of the City of Edgewater, Florida's PWs from Hurricane Irma had been approved by FEMA, thus none are recognized on the Schedule of Expenditures of Federal Awards for the year ended September 30, 2018. As a result, there are approximately $670,000 of expenditures spanning across fiscal years 2017 and 2018 for which no related revenues have been recorded for financial statement purposes and have not been included on the Schedule of Expenditures of Federal Awards; these expenditures will be recognized on the Schedule of Expenditures of Federal Awards in future years once approved by FEMA. 118 City of Edgewater, Florida Schedule of Findings and Questioned Costs September 30, 2018 I. Summary of Auditors' Results: Financial Statements: Type of audit report issued on the financial statements: Unmodified Internal control over financial reporting: Material weakness(es) identified? yes X no Significant deficiency(ies) identified? yes X none reported Noncompliance material to financial statements noted? yes X no Federal Awards: Internal control over major Federal programs: Material weakness(es) identified? yes X no Significant deficiency(ies) identified? yes X none reported Type of auditor's report issued on compliance for major Federal programs: Unmodified Any audit findings disclosed that are required to be X none reported in accordance with Uniform Guidance? yes reported Identification of major Federal programs: CFDA Number Program Name Disaster Grants — Public Assistance (Presidentially 97.036 Declared Disasters) Dollar threshold used to distinguish between type A and 750 000 type B Federal programs: Auditee qualified as low-risk auditee? yes X no II. Financial Statement Findings: No financial statement findings were noted. III. Federal Programs Findings and Questioned Costs: No findings and questioned costs were noted. IV. Summary Schedule of Prior Audit Findings: No Summary Schedule of Prior Audit Findings is required because there were no prior audit findings related to Federal programs or State projects. 119 City of Edgewater, Florida Schedule of Findings and Questioned Costs September 30, 2018 V. Corrective Action Plan: Not applicable since no findings were reported. 120 � � ,Jarn�� '1��r� �rit�t,�1 I i.�.i ic Arr:?urci._:rts :i�id Lnnsultants INDEPENDENT AUDITORS' REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH THE UNIFORM GUIDANCE To the Honorable Mayor, City Council, and City Manager, City of Edgewater, Florida: Report on Compliance for Each Major Federal Program We have audited the City of Edgewater, Florida's (the City) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the City's major federal programs for the year ended September 30, 2018. The City's major federal programs are identified in the summary of auditors' results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with the requirements of federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditors'Responsibility Our responsibility is to express an opinion on compliance for each of the City's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America;the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the City's compliance. Opinion on Each Major Federal Program In our opinion, the City complied, in all material respects, with the requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended September 30, 2018. 12f Executn�e Circle 133 East lndiana Avenue 5431 N1V lst F'lace 2=1?7 T�m Garn�ile 1'face.Suote"?�70 Daytona E3e•acli.FL 3Z1 14-1 130 UeLand,FL 32724-A32�7 C�anies�•iffe.FL 32�0�-2U63 iaClafiassee,FL 3230�-=13�6 Tele�har2e:33G-25;-4100 TeEe�hone:33[�-'38-3300 Te[e�hone:352-378-1331 Tefe�hone:850-33G-E�I84 121 1�4'ehsite=www.jrnco.corn ' ErnaiL info[n)jrT7eo.cnrn � ,11eml�er of'AGh' [nternationaf with offices in �rincipal cities worldwide Report on Internal Control over Compliance Management of the City is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered the City's internal control over compliance with the requirements that could have a direct and material effect on a major federal program to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness ofthe City's internal control over compliance. A deficiency in internal control over compliance e�sts when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal conti^ol over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly,this report is not suitable for any other purpose. I �D�+I,C f i.@. � �-!- � Daytona Beach, Florida March 8, 2019 122 � �� V�� ritil�r�i Pi.i`.i-ir �xr�aur,l��its �.xnd [�ar.a�.lfai�ik 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 AZIDITING STANDARDS To the Honorable Mayor, City Council,and City Manager, City of Edgewater, Florida: We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to the 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 the City of Edgewater, Florida, (the City) as of and for the year ended September 30, 2018, and the related notes to the financial statements,which collectively comprise the City's basic financial statements, and have issued our report thereon dated March 8, 2019. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the City'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 City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control. A deficiency in internal control e�sts 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 over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 12I Execut'r��e Cir�le 133 East lndiana Avenue �931 Nl�'lst Pface 24';Tim Gar�ible Pface.Suiie 200 Qaytona Beach,FL 3Z1 14-1 Ig� DeLand.FL 327<4-4329 Ga�nes�•ifle.Fl_32Gfl7-2Qb3 Taflahassee.Fl.32308-a38(� Telephorte:386-2�'-4100 TeEeE�hnne:3gG-'38-33�7� Te[eE�hnner 352-3;8-1331 Tefephone:&50-38(�-E�i£�•1 Wef�site:u�ww.jmro.cori7 EmaiL into ajrnro.rcrrii � ,�1emf�er c�t r'1Cal�' fntern��tinnaf wit}a crttices irr prinripal cities wcarldwide 123 Compliance and Other Matters As part of obtaining reasonable assurance about whether the City'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. 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. U�(�C � �6. r f .�. r Daytona Beach,Florida March 8, 2019 124 � � �Jarr��s I1�1��r� i ritn:�1 I i.�.i i, hrrnunt�nts and L.nnsul�an�� INDEPENDENT AUDITORS' MANAGEMENT LETTER REQUIRED BY CHAPTER 10.550, RULES OF THE STATE OF FLORIDA OFFICE OF THE AUDITOR GENERAL To the Honorable Mayor, City Council,and City Manager, City of Edgewater, Florida: Report on the Financial Statements We have audited the financial statements of City of Edgewater, Florida (the City), as of and for the fiscal year ended September 30, 2018, and have issued our report thereon dated March 8, 2019. 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; the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administi^ative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance); and Chapter 10.550, Rules ofthe Auditor General. Other Reporting Requirements We have issued our Independent Auditors' Report on Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards; Independent Auditors' Report on Compliance for Major Federal Program and Report on Internal Control over Compliance; Schedule of Findings and Questioned Costs; and Independent Accountants' Examination 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 and schedule, which are dated March 8, 2019, should be considered in conjunction with this management letter. Prior Audit Findings Section 10.554(1)(i)1., Rules ofthe 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.No findings and recommendations existed in the preceding annual financial audit report. Of�cial 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 official title and legal authority for the primary government are discussed in Note 1 to the financial statements. 12I Executn�e Circle 133 East Indiana AEenue 5931 N1V lst Pface 247�Tim Gamble Pface.Suite 200 Davtona E3e•acli.FL 3Z1 14-1 130 UeLand,FL 32724-A329 Ganies�•iffe.FL 32647-2063 iaClafiassee,FL 3230S-A386 Tele�hane:33G-25'-4T00 TeEe�hone:33[�-'38-33D0 Te[e�hone:352-373-1331 Tefe�hone:850-38G-G184 1�4'ehsite=www.jrnco.corn ' Ernaif: info@jn7eo.cnrn � ,11eml�er�at AGh' Cnternatir.�n<�I wcth�ftices in �rincipal cities warldwide 125 Financial Condition and Management Sections 10.554(1)(i)S.a. and 10.556(7), Rules of the Auditor General, require us to apply appropriate procedures and report the results of our determination as to whether or not the City has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and identification of the specific condition(s) met. In connection with our audit, we determined that the City did not meet any of the conditions described in Section 218.503(1),Florida Statutes. Pursuant to Sections 10.554(1)(i)S.c. and 10.556(8), Rules of the Auditor General, we applied financial condition assessment procedures. It is management's responsibility to monitor the City'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. Section 10.554(1)(i)2., Rules ofthe Auditor General,requires that we communicate any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. 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 note 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, Honorable Mayor, City Council, and applicable management, and is not intended to be and should not be used by anyone other than these specified parties. ��C � � . f 1 .� . J Daytona Beach, Florida March 8, 2019 126 � �� t citit.�1 F��:r�; �rra�iniants xn�i [ ,7r.�i.lfarit INDEPENDENT ACCOUNTANTS' EXAMINATION REPORT To the Honorable Mayor, City Council, and City Manager, City of Edgewater, Florida: We have examined the City of Edgewater, Florida's (the City) compliance with Section 218.415, Florida Statutes, Local Government Investment Policies, for the year ended September 30, 2018. The City's management is responsible for the City's compliance with those requirements. Our responsibility is to express an opinion on the City's compliance 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 City complied with Section 218.415, Florida Statutes, Local Government Investment Policies, for the year ended September 30, 2018, in all material respects. An examination involves performing procedures to obtain evidence about the City's compliance with those requirements. The nature, timing, and extent of the procedures selected depend on our judgment, including an assessment of risks of material noncompliance with those requirements, 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. In our opinion,the City of Edgewater, Florida complied, in all material respects, with the aforementioned requirements for the year ended September 30, 2018. ��l � i� . r �.� . 1 J Daytona Beach, Florida March 8, 2019 12I Executn�e Circle 133 East Indiana AEenue 5931 N1V lst P[ace 247�Tim Gamble Pface.Suite 200 Davtona E3e•acli.FL 3Z1 14-1 130 UeLand,FL 32724-A32�7 Ganies�•iffe.FL 32607-20b3 iaClafiassee,FL 3230�-43�ti Tele�har2e:33G-257-4�00 TeEe�hone:33[�-'38-33D0 Te[e�hone:352-378-1331 Tefe�hone:850-38(�-E�I84 1�4'ehsite=www.jrnco.com ' Ernaif: info[n)jrT7eo.cnrn � ,11eml�er ot AGh' Cnternatir.�n<�I wcth�ftices in �rincipal cities warldwide 127 ..��r n �^� �i ' � ,�""" - ro"f� •� . 'r�,w�°��&�v� +�1u ,,` ��.... , .�,,,�, .,M+w�;�.�.,,.�.d.,.',�.1..1.....�,..:.�,.r..4�x.. �p�w� ,�«�� . ��flk)7'i i.+. J.,-0. ,�,,,.i..�� AFFIDAVIT OF lMPACT FEE COMPLIANCE The City of Edgewater, Florida has complied with Section 163.31801 of Florida Statues regarding accounting and reporting of impact fee collections and expenditures. ��%'- ;�.. � . � � _- _ ��, �� u,� Glenn A. Irby Bridgette A. King Interim City Manager Finance Director STATE OF FLORIDA COUNTY OF VOLUSIA I HEREBY CERTIFY that on this day, before me, an officer duly authorized in the State and County aforesaid to take acknowledgments, personally appeared Glenn A. Irby and Bridgette A. King, whom I know personally and whom executed the foregoing instrument and acknowledged before me that he executed the same. WITNESS my hand and official seal in the County and State last aforesaid this gtn day of March 2018. �.,�.....r..�...o�.�... ;;_"�YP�•-. CHRISTINEWOFFORD ._,...�,. ��:,:Commission#GG 007915 =o=Expires July 4,2020 � � *"'�PO��'�� 9ond�dthruTroyf�inlncuranceE40-385-7019 � (Seal/Stamp) Notary Public (Commission Expiration Date) State of Florida at Large 128