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HomeMy WebLinkAbout10-00307 3-11-2010 Submittal-Basic Financial StatementsCITY OF MIAMI MIDTOWN COMMUNITY REDEVELOPMENT AGENCY (A Component Unit of the City of Miami, Florida) Basic Financial Statements September 30, 2009 (With Independent Auditor's Report Thereon) CITY OFK0kAM|MIDTOWN COMMUNITY REDEVELOPMENT AGENCY (A Component Unit of the City of Miami, Florida) Table of Contents Independent Auditor's Report Management's Discussion and Analysis (Required Supplementary Information) Basic Financial Statements: Governmental Fund Balance Sheet/Statement cfNet Assets 5 Statement of Governmental Fund Revenues, Expenditures, and Changes in Fund Balance/Statement ofActivities 6 Notes to Basic Financial Statements 7-9 Required Supplementary Information (Unaudited): Budgetary Comparison Schedule 10 Note to Required Supplementary Information 11 Independent Auditor's Report on Internal Control Over Financial Reporting and onCompliance and Other Matters Based onanAudit ofFinancial Statements Performed inAccordance With Government Auditing Standards 12-13 Submitted into the public record ioconnection with items #1 on 3-11-10 . Priscilla A'Thompson Independent Auditor's Report Submitted into the public record in connection with items #1 on 3-11-10 . Priscilla A. Thompson City Clerk |mdwpoodmmt Auditor's Report The Board of Directors City ofMiami Midtown Community Redevelopment Agency: 5805Nue Tel. (3D5):269-8633 We have audited the accompanying basic financial statements of the governmental activities and the major fund of the City of Miami Midtown Community Redevelopment Agency (the Agancy), a component unit of the City of Miami, Florida (the City), as of and for the year ended September 30, 2009, which collectively comprise the Agency's basic financial statements, as listed in the table of contents. These financial statements are the responsibility of the Agency's management. Our responsibility is to express opinions on these financial statements based onour 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 8ovonmmnt Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain nauuonab|o maaunonue about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing 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 over financial reporting. According|y, we express no such opinion. An audit includes mxamin\ng, on o test bmois, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles usmdandoignificantestimateemadebymanagement.nnmmU as evaluating the overall financial statement pnaamnbobnn. We believe that our audit provides a reasonable basis for our opinions. In nannia| statements referred tnabove present fairly, in all material respoctu, the respective financial position of the governmental activities and the fund of the Agency as of September 30, 2009. and the respective changes in financial position thereof for the year then ended in conformity with U.S generally accepted accounting principles. In accordance with Government Auditing Standards, uahave issued our report dated November 25.2009 on our consideration of the Agency's internal control over financial reporting and our testa of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose cfthat report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that tesUng, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral port of an audit performed in accordance with Govemment Auditing Standards and should beconsidered inassessing the results nfour audit. The management's discussion and analysis on pages 2 through 4 and the budgetary comparison information onpages 1Oand 11are not mrequired part ofthe basic financial statements but are supplementary information required by U.S. generally accepted accounting principles. We have applied certain limited procedures, which consisted phncipa||ynfinquiries ofmanagement regarding the methods ofmeasurement and presentation of the required supplementary information. Howwavmr, we did not audit the information and express noopinion on November 25.20O9 Submitted into the public record imconnection with items 41 on 3'11'10 . Priscilla A. Thompson City Clerk Management's Discussion and Analysis Submitted into the public record in connection with items #1 on 3-11-10 . Priscilla A. Thompson City Clerk CITY OFMIAM|MIDTOWN COMMUNITY REDEVELOPMENT AGENCY (A Component Unit of the City of Miami, Florida) YNanagementmDiecumsionandAnalymis-Unaudked September 3U.200Q This section of the C/b/ of Miami NYkjbown Community Redevelopment Agency (the Agency) financial statement presents management's analysis of the financial performance during the fiscal year that ended September 3O.20O0.This discussion addresses whether ornot the Agency ooawhole iobetter off orworse off anaresult of this year's activities. Overview The Agency was established in 2005 by the City of Miami, Florida (the City) under the provisions of Section 183.330. Florida Statutes. The purpose ofthe Agency is to eliminate blight and slum conditions within the redevelopment area of the agency pursuant to the redevelopment plans of the Agency for new residential and commercial activity of the Midtown area. The Agency's primary source of revenue is tax increment funds. This revenue iecomputed by applying the operating tax rate for the City and the County, multiplied by the increased value of property located within the boundmhoo of the redevelopment areas of the Agenny, over the base property value, minus S%. Both the City and the County are required to fund this amount annually without regard hotax collections or other On June 30, 2005, the Agency entered into an Interlocal Cooperation Agreement, as amended, with the City, Miami -Dade County (the County), and the Midtown Community Development District (the "District"), whereby tax increment revenues collected bythe City and County would be paid to Midtown and used in accordance with the approved budget and redevelopment plan and harms and conditions of the |nb*d000| Agreement. In accordance with the redevelopment plan, the Agency has pledged the tax increments revenues received from the City and County to the repayment of the debt service of bonds issued by the Disthot, which bonds were issued on July 28, 2004. Any shortfalls in the debt service are to be paid by the District, not the Agency. Further. the Agency's policy is set by a board of directors oamphaad of the five members of the City commission and are neparmte, distinct and independent from the governing body of the City; and it's management plan inexecuted bymsmall professional staff led byits executive director. Financial Hiqhliqhts At the close of the current fiscal year, the Agency hadofundba|ance/net asset balance ofsO.which is the same aointhe prior year. This was aresult nfthe remittance ofthe tax increment funds huthe District for the repayment of the debt service of bonds issued by the District, as described above. The Agency did not incur any debt during the current fiscal year. Overview twthe Financial Statements This discussion and analysis is intended to aemo as an introduction to the Agency's basic financial statements. The Agency's basic financial statements are comprised ofthree components: ° Government -wide financial statements ° Fund financial statements • Notes hmthe basic financial statements In addition. the Agency reports, as required supplementary inhnrmadun, e budget Vmactual comparison and notes to the required supplementary information. Submitted into the public record in connection with items #K on 3-11-10 ' Priscilla /k'Thompson City Clerk CITY OFMIAJM|MIDTOWN COMMUNITY REDEVELOPMENT AGENCY (AComponent Unit ofthe City ofMiami, Florida) � Management's Discussion and Analysis 'Unaudited September 30.2O00 Overview bmthe Financial Statements (cmntinuedl The Agency is considered a special purpose government engaged in a single governmental activity, thus the na|ahad government -wide and fund financial statements are included as a combined presentation in the Governmental Fund Balance Sheat/Stutementcf Net Assets and the Statement of Governmental Fund Revenues, Expenditures, and Changes in fund Balance/Statement ofActivities. Acoonding|y, there are no reconciling items between these two statements, which may befound onpages 5and 8ofthis report, Government -wide Financial Statements The government -wide financial statements are designed toprovide readers with mbroad overview of the Agency's financen, in a manner similar to a private -sector business (i.e. economic resources and measurement focus). The statement of net assets presents information on all of the Agency's assets and liabilities, with the difference between the two reported asnet assets. Over time, increases ordecreases in net assets may serve as a useful indicator of whether the financial position of the Agency is improving or deteriorating. The statement cfactivities presents inh»nnoUon showing how the Agency's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change ocours, regardless of the timing of the related cash flows. Thua, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods. Fund Financial Statements Afund is a grouping of related accounts that is used to maintain nnnbn| over resources that have been segregated for specific activities orobjectives. The Agency, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. The Agency only has one governmental fund; the special revenue fund, Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. Huwmver, unlike the government -wide financial ntatemenba. governmental fund financial statements focus on near -term inflows and outflows of expendable nauouroos' as well as on balances ofexpendable resources available at the end ofthe fiscal year. Such information may be useful in evaluating a government's near -term financing requirements. Notes tmthe Basic Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes tothe basic financial statements can befound on pages 7hoAofthis report, Budgetary Highlights A budgetary comparison schedule has been provided for the special revenue fund to demonstrate compliance with this budget. The budgetary comparison schedule can be found on page 10 of this report. The significant change between the original budget and final budget was m nedamofnom the budget reserve to e|loceh» funds for the remittance of the tax increment newanuon to the Midtown Community Development District. The change in final budget to actual community redevelopment expenditures was primarily attdbuted to overbudgeting for the remittance of the tax increment revenues. Submitted into the public record imconnection with items #1 on 3-11-10 . Priscilla A.Thompson City Clerk _ � ~ CITY OF MW\M|K0|DTOWMN COMMUNITY REDEVELOPMENT AGENCY (AComponent Unit ofthe City n[Miami, Florida) Management's Discussion and Analysis Unaudited Financial Analysis Govern ment-Wide/|nd ividma|Fund Analysis Our analysis of the financial statements of the Agency begins below.The Statement ofNet Assets and the Statement of Activities nypmt information about the Agency's activities that will help answer questions about the position of the Agency. A comparative analysis is provided below. Summary of Net Assets Total assets $ $ 1.114'409 Total restricted net assets � Total assets decreased from the prior year asaresult cf the remittance cfthe tax increment revenues to the Midtown Community Development District occurring prior to year end, whereas in the prior year, the remittance was accrued for and not paid out until after year-end. Summary cfChanges inNet Assets Expenditures: General government $ 29,538 $ 27,354 Community redevelopment 3,391,730 1,119,084 Revenues: Tax increment Change innet assets Net assets, beginning ofyear Net assets, end of year 3.421,268 —778,467 - � (367A71) 367,971 • Community redevelopment expenditures increased in the current year as a result of the amount of the remittance of tax increment nyvmnmas paid to the Midtown Community Development District in accordance with the applicable inhsdoca|agreement. • Tax increment revenues increased from the prior year as a result ofan increase in the annual pay out from the City and the County. Requests for Information This financial is designed provide of finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed hothe Executive Director, 49N.VV.S~Street, Suite 1U0.Miami, Florida 3312B. 4 Submitted into the public record imconnection with items #Y on 3-11-10 ' Priscilla A. Thompson City Clerk Basic Financial Statements Submitted into the public record in connection with items #1 on 3-11-10 . Priscilla A. Thompson City Clerk CITY OF MIAMI MIDTOWN COMMUNITY REDEVELOPMENT AGENCY (A Component Unit of the City of Miami, Florida) Governmental Fund Balance Sheet/Statement of Net Assets September 30, 2009 Assets Liabilities Unreserved fund balance/unrestricted net assets Special Statement of revenue fund Adjustments net assets Submitted into the public record in connection with items #1 on 3-11-10 . Priscilla A. Thompson City Clerk The accompanying notes are an integral part of the basic financial statements. 5 CITY 0PMIAM|MIDTOWN COMMUNITY REDEVELOPMENT AGENCY (\ Component Unit mfthe City ofMiami, Florida) Statement ofGovernmental Fund Revenues, Expenditures, and Changes inFund Balance/Statement nfActivities Year ended September 3O.2OO8 Special Statement of revenue fund Adjustments activities Expenditures/expenses: General government $ 29,538 29,538 Community redevelopment 3,391,730 3,391,730 Total expenditures/expenses General revenues: Tax increment revenue Total general revenues Excess ofrevenues over expenditures/in crease innet assets Fund Balance/net assets beginning ufthe year Fund Balance/net assets - end nfthe year Submitted into the public record in connection with items 41 on 3'11-10 . Priscilla /k'Thompson City Clerk The accompanying notes are an irtegral part of the basic financial statements. 6 CITY OF MIAMI MIDTOWN COMMUNITY REDEVELOPMENT AGENCY (A Component Unit of the City of Miami, Florida) Notes to Basic Financial Statements September 30, 2009 1. Summary of Significant Accounting Policies This summary of the City of Miami Midtown Community Redevelopment Agency (the Agency) significant accounting policies is presented to assist the reader in interpreting the basic financial statements. The policies are considered essential and should be read in conjunction with the basic financial statements. The accounting policies of the Agency conform to accounting principles generally accepted in the United States of America applicable to governmental units. This report, the accounting systems and classification of accounts conform to standards of the Governmental Accounting Standards Board (GASB), which is the accepted standard -setting body for establishing governmental accounting and financial reporting principles. The following is a summary of the more significant policies: A. Reporting Entity . The Agency was established in 2005 by the City of Miami, Florida (the City) under the provisions of Section 163, Florida Statutes. The purpose of the Agency is to eliminate blight and slum conditions within the redevelopment area of the agency pursuant to the redevelopment plans of the Agency for new residential and commercial activity of the Midtown area. The board of directors of the Agency are comprised of the five members of the City commission and are separate, distinct and independent from the governing body of the City. On June 30, 2005, the Agency entered into an Interlocal Cooperation Agreement, as amended, with the City, Miami -Dade County (the County), and the Midtown Community Development District (the "District"), whereby tax increment revenues collected by the City and County would be paid to Midtown and used in accordance with the approved budget and redevelopment plan and terms and conditions of the Interlocal Agreement. In accordance with the redevelopment plan, the Agency has pledged the tax increments revenues received from the City and County to the repayment of the debt service of bonds issued by the District, which bonds were issued on July 28, 2004. Any shortfalls in the debt service are to be paid by the District, not the Agency. For financial reporting purposes, the Agency is a component unit of the City and is thus included in the City's comprehensive annual financial report as a blended component unit. B. Government -wide Financial Statements The government -wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the financial activities of the Agency. 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 Agency does not have any business -type activities and has only one governmental activity. The accounts of the Agency are reported as a special revenue fund. The special revenue fund is the Agency's only fund and thus the Agency's only major fund. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. 7 Submitted into the public record in connection with items #1 on 3-11-10 . Priscilla A. Thompson City Clerk CITY OF MIAM|MIDTOWN COMMUNITY REDEVELOPMENT AGENCY (AComponent Unit ofthe City ofMiami, Florida) Notes toBasic Financial Statements September 38.200 C. 88oamurammmt Focus, Basis ofAccounting, and Financial Statement Presentation The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis ofaccounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis ofaccounting. Revenues are recognized amsoon authey 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 Agency considers revenues available if they are collected within 80 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. The Special Revenue Fund is the Agency's only fond, It accounts for all financial resources of the |nUamoUy dedicated resources are reported as general revenues rather than as program revenues. Ukewise, general revenues include all tax increment revenues, net of distribution remittances to the D. Equity in Pooled Cash The Agency's cash is pooled together with the C h -is maOenb*d as equity in pooled cash on the Agency's governmental fund balance sheet / statement of net assets. E. Fund Equity Unreserved fund balance is the portion of fund equity available for any lawful use. F. Tax Increment Revenues The Agency's primary source of revenue is tax increment funds. This revenue is computed by applying the operating tax rate for the City and the County, multiplied by the increased value ofproperty located within the boundaries uf the redevelopment areas of the Agency, over the base property value, minus 5%. Both the City and the County are required to fund this amount annually without regard to tax collections or other obligations. As noted in note 1(A) above, in accordance with the redevelopment plan ofthe Agency, the Agency has pledged the tax increments revenues received from the City and County to the repayment of the debt service ofbonds issued by the Diotrict, which bonds were issued on July 28. 2004. Any shortfalls in the debt service are to he paid by the District, not the Agency. For the fiscal year ended September 30.2OOQ.the Agency remitted atotal of$3.387.055tothe District, G. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of Amahnn requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management's knowledge ofcurrent events and actions it may undertake in the future, they may ultimately differ from actual results. 8 Submitted into the public record in connection with /wrmuo #y on 3'11'10 . Priscilla A.Thompson City Clerk CITY OF MIAM|MIDTOWN COMMUNITY REDEVELOPMENT AGENCY (A Component Unit ofthe City ofMiami, Florida) Notes to Basic Financial Statements September 3U'2UDQ 2. Cash and Cash Equivalents The Agency had no cash balance as of September 30, 2009. The Agency's funds participate in the Cky'a pool on a dollar equivalent and daily transaction basis. Interest income (which includes unrealized gains and losses) isdistributed monthly based onamonthly average balance. Custodial Credit Risk iathe risk that in the event of bank failure, the Agency's deposits may not be returned to it. In addition binsurance provided b the Federal Deposit Insurance Corporation FU(C), deposits are held in banking institutions approved bythe State ofFlorida, State Treasurer tohold public funds. Under the Florida Statutes Chepter288. "Florida Security for Public Deposits Act". the State Treasurer requires all qualified public depositories to deposit with the Treasurer or another banking institution eligible no||absnai In the event of a failure of aqum|i5ed public depoai&nry, the remaining public depositories would beresponsible for covering any resulting losses. Submitted into the public record imommnectiun with items #1 on 3'11'10 . Priscilla A.Thompson City Clerk Required Supplementary Information Submitted into the public record in connection with items #1 on 3-11-10 . Priscilla A. Thompson City Clerk CITY OF MIAMI MIDTOWN COMMUNITY REDEVELOPMENT AGENCY (A Component Unit of the City of Miami, Florida) Budgetary Comparison Schedule (Required Supplementary Information - Unaudited) For the year ended September 30, 2009 Variance with final budget - Budgeted amounts positive original Final Actual (negative) Revenues: Tax increment revenue 3,430,948 3,421,268 3,421,268 Other Total revenues, net 3,430,948 3,421,268 3,421,268 Expenditures: Current: General government 41,309 41,213 29,538 11,675 Community redevelopment 4,494,464 3,391,730 1,102,734 Total expenditures 41,309 4,535,677 3,421,268 1,114,409 Excess (deficiency) of revenues over (under) expenditures 3,389,639 (1,114,409) 1,114,409 Other financing uses: Net (budget reserve) carryover fund balance (3,389,639) 1,114,409 1,114,409 Total other financing uses (3,389,639) 1.114,409 1,114,409 Net change in fund balance Fund balance - beginning of the year Fund balance - end of the year Submitted into the public record in connection with items #1 on 3-11-10 . Priscilla A. Thompson City Clerk The note to the required supplementary information is an integral part of this schedule. 10 CITY OF MIAMI MIDTOWN COMMUNITY REDEVELOPMENT AGENCY (A Component Unit of the City of Miami, Florida) Note to Required Supplementary Information September 30, 2009 1. Budgetary Policy As set forth in the Interlocal Cooperation Agreement between the Agency and the City, the Agency adopts an annual budget for the Special Revenue Fund. The budget is adopted on a basis consistent with U.S. generally accepted accounting principles. Budgetary control is maintained at the fund level. 11 Submitted into the public record in connection with items J& on Priscilla A. Thompson City Clerk Independent Auditor's 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 Submitted into the public record in connection with items #1 on 3-11-10 Priscilla A. Thompson City Clerk SKJ �� J���� � ����P -_~~~~_'___. ~~.~-.�~~~�. * 5805Nue Lagoon Drive Fax (s05)aexnEz wvw,4n�,o,m Independent Auditor's Report onInternal Control Over Financial Reporting and mnCompliance and Other Matters Based mnemAudit ofFinancial Statements Performed in Accordance With Government Auditing Standards Tnthe Board ofDirectors ofthe City ofMiami Midtown Community Redevelopment Agency: We have audited the basic financial statements ofthe City of Miami Midtown CommunityRedevelopment Agency (the Agency) as of and for the year ended September 30. 2009. and have issued our report thereon doted November 25, 2009. 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 inGovernment Auditing Standards, issued bythe Comptroller General nfthe United States. Internal Control Over Financial Reporting In planning and performing our audit, we considered the Agency's internal control over financial reporting osmbasis for designing our auditing proceduresfor the purpose ofexpressing our opinion onthe financial abstemmntm, but not for the purpose of expressing an opinion on the effectiveness of the Agency's internal control over financial reporting. Aocording|y, we do not express an opinion on the effectiveness of the Agency's inbamo| control over financial reporting. A control deficiency exists when the design or operation of aoontro| does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to initiote, authorize, reoord, pmocees, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that o misstatement of the entity's financial statements that is more than inconsequential will not be prevented ordetected bythe entity's internal control. A mobaha| waokmaso in o significant dehoienny, or combination of significant defciomcieo, that results in more than aremote likelihood that amaterial misstatement nfthe financial statements will not beprevented ordetected bythe entity's internal control. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraphcf this section and would not necessarily identify all deficiencies ininternal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. Compliance and Other Matters Aspart ofobtaining reasonable assurance about whether the Agency's basic financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, nnnhaots, and grant agreements, noncompliance with which could have e direct and material effect on the determination offinancial statement amounts. Hovwsver, providing an opinion on compliance with those provisions was not an objective of our audit, and acuondinQ|y, we do not express such on opinion. The results ofour tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Submitted into the public record ioconnection with items #1 no 3-11-10 ' 12 Priscilla /k.Thompson City Clerk In addition, we issued a management letter to management of the Agency dated November 25. 2009. as required by the Rules of the Auditor General of the State of Florida, This report is intended solely for the information and use of the board of directors, management of the Agency. the State of Florida Office of the Auditor Genena, and federal and state awarding agencies and pass -through anUtieo, and is not intended to be and should not be used by anyone other than these specified parties. 13 Submitted into the public record ioconnection with '*eruo #1 on 3'11'10 . Priscilla A. Jhnirnpsom