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HomeMy WebLinkAbout13-00261 Report- OMNI CRA External Audit for FY 2012ubmitted into t e pub record in connection with item #1 on 02-28-13. Todd B. Hannon City Clerk CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (A Component Unit of the City of Miami, Florida) Basic Financial Statements September 30, 2012 (With Independent Auditor's Report Thereon) Submitted into the public record in connection with item #1 on 0202-28-13. Todd B. Hannon City Clerk CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (A Component Unit of the City of Miami, Florida) September 30, 2012 Table of Contents Independent Auditor's Report Management's Discussion and Analysis (Required Supplementary Information) Pages 2-6 Basic Financial Statements: Government -wide Financial Statements: Statement of Net Assets 7 Statement of Activities 8 Fund Financial Statements: Governmental Fund Balance Sheet — Special Revenue Fund 9 Statement of Governmental Fund Revenues, Expenditures, and Changes in Fund Balances — Special Revenue Fund 10 Notes to Basic Financial Statements 11-16 Required Supplementary Information (Unaudited): Budgetary Comparison Schedule Note to Required Supplementary Information Other Reports: 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 Management letter in Accordance with the Rules of the Auditor General of the State of Florida 17 18 19-20 21-22 Submitted into the public record in connection with item #1 on 02-28-13. Todd B. Hannon City Clerk Independent Auditor's Report Submitted into the public record in connection with item #1 on 02-28-13. Todd B. Hannon City Clerk SKT T&G SANSON KLINE TACOMITO T OC & G..':_.., LLP Certified Public Accountants & Consultants Independent Auditor's Report 5805 Blue Lagoon Drive Suite zz0 Miami, Florida 3312,6 Tel. (305) 269-8633 Fax 305 265-9652 www,s <jneLcom The Board of Directors City of Miami Omni Community Redevelopment Agency: We have audited the accompanying basic financial statements of the governmental activities and the major fund of the City of Miami Omni Community Redevelopment Agency (the Agency), a component unit of the City of Miami, Florida (the City), as of and for the year ended September 30, 2012, 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 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 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. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and the major fund of the Agency as of September 30, 2012, 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, we have issued our report dated December 3, 2012 on our consideration of the Agency's internal control over financial reporting and 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 the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. Accounting principles generally accepted in the United. States of America require that the management's discussion and analysis and budgetary comparison information on pages 2 through 6 and 17 through 18 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 operations, 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. "Joao. *44 /ia't N "dout , MD December 3, 2012 1 Submitted into the public record in connection with item #1 on 02-28-13. Todd B. Hannon City Clerk This Page Intentionally Left Blank Submitted into the public record in connection with item #1 on 02-28-13. Todd B. Hannon City Clerk Management's Discussion and Analysis Submitted into the public record in connection with item #1 on 02 28-13• Todd B. Hannon City Clerk CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (A Component Unit of the City of Miami, Florida) Management's Discussion and Analysis - Unaudited September 30, 2012 This section of the City of Miami Omni Community Redevelopment Agency (the Agency) financial statement presents management's analysis of the financial performance during the fiscal year that ended September 30, 2012. This discussion addresses whether or not the Agency as a whole is better off or worse off as a result of this year's activities. Overview 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 in the OMNI area. 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, multipliedby the increased value of property located within the boundaries of 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. On June 24, 1996, the City and County entered into an Interlocal Cooperation Agreement with the Agency, whereby the Agency will receive over a three year period, commencing on the date of the Agreement, a total of $1.2 million of tax increment revenue contributed by the City and County. If within the three-year period the Agency receives more than $1.2 million in tax increment revenue, the excess shall be remitted to the County for the Performing Arts Center Project. Thereafter, the Agency shall remit to the County tax increment funds received up to, but no more than $1.43 million per year. The obligation to pay the $1.43 million each year shall cease at such time that the County has no Performing Arts Center construction bonds outstanding. On December 31, 2007, the City and County entered into an Interlocal Agreement with the Agency, whereby in addition to the $1.43 million per year described above for the Performing Arts Center project, the Agency shall remit on March 31, 2010 and every March 31st thereafter ending on March 31, 2012 an amount equal to 35% of the amount by which the increment revenue exceeds $1.43 million, and on March 31, 2013 and every March 31st thereafter until March 31, 2027, including any additional time extensions beyond March 31, 2027, an amount equal to the greater of $1.43 million or 35% of the increment revenue, provided that the mounts remitted by the Agency do not exceed $25 million in any fiscal year. On August 6, 2007, the City, County and The Children's Trust (the Trust) entered into an Interlocal Agreement with the Agency, whereby the Agency would receive from the Trust, on an annual basis, tax increment revenues derived from the imposition of a half -mil tax levied by the Trust against real property located within the redevelopment district (referred to as Trust revenues). The agency agreed to use the Trust revenues for debt service on, and other obligations relating to, existing debts of the Agency only after all other available tax increment revenues have been exhausted for such purpose, and to remit to the Trust on the last day of the Agency's fiscal year, all of the Trust revenues that are not needed for debt service on, or other obligations relating to, existing debts of the Agency. Further, the Agency's policy is set by a board of directors comprised of the five members of the City commission and are separate, distinct and independent from the governing body of the City; and it's management plan is executed by a small professional staff led by its executive director. 2 Submitted into the public record in connection with item #1 on 02-28-13. Todd B. Hannon City Clerk CITY OF MIAMI OMNI,COMMUNITY REDEVELOPMENT AGENCY (A Component Unit of the City of Miami, Florida) Management's Discussion and Analysis - Unaudited September 30, 2012 Financial Highlights At the close of the current fiscal year, the Agency had a fund balance of $19,325,185, a decrease of $9,325,896 in comparison with the prior year. The difference between fund balance and net assets is capital assets of $2,115,610. The Agency's unrestricted net asset totaled $19,325,185. The Agency did not incur any debt during the current fiscal year. Overview to the Financial Statements This discussion and analysis is intended to serve as an introduction to the Agency's basic financial statements. The Agency's basic financial statements are comprised of three components: im Government -wide financial statements la Fund financial statements ® Notes to the basic financial statements In addition, the Agency reports, as required supplementary information, a budget to actual comparison and notes to the required supplementary information. Government -wide Financial Statements The government -wide financial statements are designed to provide readers with a broad overview of the Agency's finances, 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 as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Agency is improving or deteriorating. i i I I i The statement of activities presents information 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 occurs, regardless of the timing of the 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. 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 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. However, unlike the government -wide financial statements, governmental fund financial statements focus on near -tern inflows and outflows of expendable resources, as well as on balances of expendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near -term financing requirements. Submitted into the public record in connection with item #1 on 02-28-13. 3 Todd B. Hannon City Clerk i 1 CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (A Component Unit of the City of Miami, Florida) tl Management's Discussion and Analysis - Unaudited September 30, 2012 Notes to the 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 to the basic financial statements can be found on pages 11 to 16 of this 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 17 of this report. There were no significant changes between the original budget and final budget. The change in final budget to actual community redevelopment expenditures was primarily attributed to projects that were planned for in the fiscal year 2012, but not yet started as planned. Financial Analysis Government -Wide Analysis Our analysis of the financial statements of the Agency begins below. The Statement of Net Assets and the Statement of Activities report information about the Agency's activities that will help answer questions about the position of the Agency. A comparative analysis is provided below. Total assets Total liabilities Total net assets Summary of Net Assets 9/30/12 9/30/11 $ 22,015,519 $ 29,751,771 574,724 1,100,690 21,4440,795 30,812,311 ® Total assets decreased from the prior year as a result of the overall decrease in equity in pooled cash. The decrease in equity in pooled cash resulted from the payment on the City's loan for the Port of Miami Tunnel and Access Improvement Project. • Total liabilities decreased from the prior year as a result of the general decrease in accounts payable, as well as the decrease in the amounts due to The Children's Trust. • Total restricted net assets increased from the prior year as a result of the overall net decrease in operations. Summary of Changes in Net Assets 9/30/12 9/30/11 Expenses: General government $ 631,780 $ 400,000 Community redevelopment 13,575,347 8,441,627 Submitted into the public record in connection with 4 item #1 on 02-28-13. Todd B. Hannon City Clerk CITY OF MIAMI OMNI COM1VIUNITY REDEVELOPMENT AGENCY (A Component Unit of the City of Miami, Florida) Management's Discussion and Analysis - Unaudited September 30, 2012 Revenues: Tax increment 4,794,707 9,603,189 Gain on sale of land 177,954 Interest 36,804 61,580 Other 10,709 41,563 Change in net assets (9,3 71,516) 1,042,659 Net assets, beginning of year 30,812,311 29,769,652 Net assets, end of year $ 21,440,795 $ 30,812,311 General government expenditures increased from the prior year as a result of the increase in the amounts contributed to the City of Miami Southeast Overtown Park West Redevelopment Agency's General Fund, which administers the general operating function for all three community redevelopment agencies. Community redevelopment expenditures increased from the prior year as a result of the payment made on the City's loan for the Port of Miami Tunnel and Access Improvement Project. Tax increment revenue decreasedfrom the prior year as a result of a decrease in the annual pay out from the City and the County. Individual Fund Analysis Fund balance decreased from $28,651,081 at September 30, 2011 to $19,325,185 at September 30, 2012. The following are key factors in the changes in fund balances for 2011: Tax increment revenue decreased from the prior year as a result of a decrease in the annual pay out from the City and the County. Community redevelopment expenditures increased from the prior year as a result of the payment made on the City's loan for the Port of Miami Tunnel and Access Improvement Project. Capital Assets As of September 30, 2012, the Agency's investment in capital assets, net of accumulated depreciation, amounted to $2,115,610, decreasing from $2,161,230 as of September 30, 2011. Summary of Capital Assets (Net of Accumulated Depreciation) Fiscal Year Fiscal Year 2012 2011 Land $ 823,039 $ 823,039 Infrastructure 1,292,571 1,338,191 Total capital assets $ 2,115,610 $ 2,161,230 Additional capital asset information can be found on page 15 of this report. 5 Submitted into the public record in connection with item #1 on 02-28-13. Todd B. Hannon City Clerk i CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (A Component Unit of the City of Miami, Florida) Management's Discussion and Analysis - Unaudited September 30, 2012 Requests for Information This financial report is designed to provide a general overview of the Agency's finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Executive Director, 1401 North Miami Avenue, Miami, Florida 33136. 6 Submitted into the public record in connection with item #1 on 02-28-13. Todd B. Hannon City Clerk This Page Intentionally Left flank Submitted into the public record in connection with item #1 on 02-28-13. Todd B. Hannon City Clerk i i i i I i i i i i asic Financial Statements Submitted into the public record in connection with item #1 on 02-28-13. Todd B. Hannon City Clerk CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (A Component Unit of the City of Miami, Florida) Statement of Net Assets September 30, 2012 Governmental Activities Assets Equity in pooled cash $ 19,863,802 Accounts receivable 6,608 Interest receivable 8,798 Due from other government 20,701 Capital assets (net of accumulated depreciation) Land 823,039 Infrastructure 1,292,571 Total assets 22,015,519 Liabilities Accounts payable Due to other government 293,117 281,607 Total liabilities 574,724 Net Assets Invested in capital assets Unrestricted Total net assets 2,115,610 19,325,185 $ 21,440,795 Submitted into the public record in connection with item #1 on 02-28-13. Todd B. Hannon City Clerk The accompanying notes are an integral part of the basic financial statements. 7 CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (A Component Unit of the City of Miami, Florida) Statement of Activities Year ended September 30, 2012 Expenses: General government Community redevelopment Total expenditures/expenses General revenues: Tax increment revenue Interest revenue Other income Total general revenues Governrnental Activities $ 631,780 13,575,347 14,207,127 0 1 4,794,707 1 36,804 4,100 4,835,611 Change in net assets (9,371,516) Net assets - beginning of the year 30,812,311 Net assets - end of the year $ 21,440,795 Submitted into the public record in connection with item #1on02�13 Todd B. Hannon City Clerk The accompanying notes are an integral part of the basic financial statements. I i I i 8 CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (A Component Unit of the City of Miami, Florida) Governmental Fund Balance Sheet Special Revenue Fund September 30, 2012 Assets Equity in pooled cash $ 19,863,802 Accounts receivable 6,608 Interest receivable 8,798 Due from other government 20,701 Total assets $ 19,899,909 Liabilities and Fund Balances Accounts payable $ 293,117 Due to other government 281,607 Total liabilities 574,724 Fund balances: Committed 18,950,685 Assigned 374,500 Total fund balances 19,325,185 Amounts reported for governmental activities in the statement of net assets consist of: Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the fund. Net assets of governmental activities 2,115,610 $ 21,440,795 Submitted into the public record in connection with item #1 on 0202----28813. Todd B. Hannon City Clerk The accompanying notes are an integral part of the basic financial statements. 9 Fund Balance - beginning of the year Fund Balance - end of the year CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (A Component Unit of the City of Miami, Florida) Statement of Governmental Fund Revenues, Expenditures, and Changes in Fund Balance Special Reveue Fund Year ended September 30, 2012 Revenues: Tax increment revenue $ 4,794,707 Interest revenue 36,804 Other income 4,100 Total revenues 4,835,611 Expenditures: Current: General government 631,780 Community redevelopment 13,529,727 Total expenditures 14,161,507 Deficiency of revenues under expenditures / net change in fund balance (9,325,896) 28,651,081 $ 19,325,185 Net change in fund balance total governmental funds (9,325,896) Amounts reported for governmental activities in the statement of activities are different because: Capital assets are allocated over their estimated useful lives and reported as depreciation expense in the statement of activities (45,620) Change in net assets of governmental activities $ (9,371,516) Submitted into the public record in connection with item #1 on 02-288-13. Todd B. Hannon City Clerk The accompanying notes are an integral part of the basic financial statements, i i I I 10 I CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (A Component Unit of the City of Miami, Florida) Notes to Basic Financial Statements September 30, 2012 1. Summary of Significant Accounting Policies This summary of the City of Miami Omni 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 1986 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 Omni 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. The City entered into an Interlocal Cooperation Agreement on June 24,1996 with Miami -Dade County, Florida (the County) whereby tax increment revenue collected by the parties would be paid to the Agency and used in accordance with the approved budgets of the redevelopment plans and terms and conditions of the Interlocal Agreement for the benefit of the Agency. In addition, on March 13, 2000, the Agency entered into an Interlocal Agreement with the City. As stated on the agreement, the City has agreed to provide financial support to the Agency for the planning, development, program management, technical assistance, coordination, monitoring and other services needed for the projects. In addition, the City has agreed to provide personnel and other resources including the use of the City attorney, which shall serve as counsel and the City Clerk, which will serve as the official custodian of records. 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, if any, 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. Submitted into the public record in connection with 11 item #1 on 02-28-13. Todd B. Hannon City Clerk CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (A Component Unit of the City of Miami, Florida) Notes to Basic Financial Statements September 30, 2012 C. Measurement Focus, : asis of Accounting, and Financial Statement Presentation The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. 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 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 Agency considers revenues available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all tax increment revenues, net of distribution remittances to the County and The Children's Trust. D. Equity in Pooled Cash The Agency's cash is pooled together with the City's cash. All such cash is reflected as equity in pooled cash on the Agency's governmental fund balance sheet and statement of net assets. E. Capital Assets Capital assets are defined by the Agency as assets with an initial, individual cost of more than $1,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation, unless donated by a related entity (e.g. the City). Capital assets donated by a related entity are recorded at the net book value of the related entity at the time of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. F. Fund Equity / Net Assets Fund equity GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, establishes criteria for classifying fund balances into specifically defined classifications and clarifies definitions for governmental fund types. Fund balances for governmental funds are reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent, as follows: • Nonspendable fund balance - amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. • Restricted fund balance - amounts that are restricted to specific purposes when constraints placed on the use of resources are either by (a) externally imposed by creditors (such as debt covenants), grantors, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislations. • Committed fund balance - amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government's highest level of decision making authority. Submitted into the public 12 record in connection with item #1 on 02-28-13. Todd B. Hannon City Clerk i i i i I i i i i i i i i CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (A Component Unit of the City. of Miami, Florida) Notes to Basic Financial Statements September 30, 2012 F. Fund Equity / Net Assets (continued) ® Assigned fund balance - amounts that are constrained by the government's intent to be used for specific purposes, but are neither restricted nor committed. Unassigned fund balance - amounts that have not been assigned to other funds and that have not been restricted, committed, or assigned to specific purpose within the general fund. When both restricted and unrestricted amounts are available for use, it is the Agency's practice to use restricted resources first. Additionally, the Agency would first use committed, then assigned, and lastly unassigned amounts of unrestricted fund balance. Net assets The government -wide financial statements utilize a net asset presentation. Net assets can be categorized as invested in capital assets net of any related debt, restricted, or unrestricted. The first category represents capital assets, less accumulated depreciation and net of any outstanding debt associated with the acquisition of capital assets. Restricted net assets represent amounts that are restricted by requirement of debt indenture or enabling legislation. Unrestricted net assets represents the net assets of the Agency which are not restricted for any project or purpose. G. 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 of property located within the boundaries of 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. On June 24, 1996, the City and County entered into an Interlocal Cooperation Agreement with the Agency, whereby the Agency will receive over a three year period, commencing on the date of the Agreement, a total of $1.2 million of tax increment revenue contributed by the City and County. If within the three-year period the Agency receives more than $1.2 million in tax increment revenue, the excess shall be remitted to the County for the Performing Arts Center Project. Thereafter, the Agency shall remit to the County tax increment funds received up to, but no more than $1.43 million per year. The obligation to pay the $1.43 million each year shall cease at such tirne that the County has no Performing Arts Center construction bonds outstanding. On December 31, 2007, the City and County entered into an Interlocal Agreement with the Agency (the "Global Agreement"), whereby in addition to the $1.43 million per year described above for the Performing Arts Center project, the Agency shall remit on March 31, 2010 and every March 31 st thereafter ending on March 31, 2012 an amount equal to 35% of the amount by which the increment revenue exceeds $1.43 million, and on March 31, 2013 and every March 31st thereafter until March 31, 202'7, including any additional time extensions beyond March 31, 2027, an amount equal to the greater of $1.43 million or 35% of the increment revenue, provided that the mounts remitted by the Agency do not exceed $25 million in any fiscal year. For the fiscal year ended September 30, 2012, the Agency remitted a total of $1,902,610 to the County. 13 Submitted into the public record in connection with item #1 on 02-28-13. Todd B. Hannon City Clerk CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (A Component Unit of the City of Miami, Florida) Notes to Basic Financial Statements September 30, 2012 G. Tax Increment Revenues (continued) On August 6, 2007, the City, County and The Children's Trust (the Trust) entered into an Interlocal Agreement with the Agency, whereby the Agency would receive from the Trust, on an annual basis, tax increment revenues derived from the imposition of a half -mil tax levied by the Trust against real property located within the redevelopment district (referred to as Trust revenues). The Agency agreed to use the Trust revenues for debt service on, and other obligations relating to, existing debts of the Agency only after all other available tax increment revenues have been exhausted for such purpose, and to remit to the Trust on the last day of the Agency's fiscal year, all of the Trust revenues that are not needed for debt service on, or other obligations relating to, existing debts of the Agency. As of September 30, 2012, the Agency recorded an amount due to the Trust totaling $270,082. H. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management's knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results. 2. Cash Deposits The Agency's cash as of September 30, 2012, consisted of equity in pooled cash in the amount of $19,863,802. The Agency's fund participates in the City's pool on a dollar equivalent and daily transaction basis. Interest income (which includes unrealized gains and losses) is distributed monthly based on a monthly average balance. Custodial Credit Risk is the risk that in the event of a bank failure, the Agency's deposits may not be returned to it. In addition to insurance provided by the Federal Deposit Insurance Corporation (FDIC), deposits are held in banking institutions approved by the State of Florida, State Treasurer to hold public funds. Under the Florida Statutes Chapter 280, "Florida Security for Public Deposits Act", the State Treasurer requires all qualified public depositories to deposit with the Treasurer or another banking institution eligible collateral. In the event of a failure of a qualified public depository, the remaining public depositories would be responsible for covering any resulting losses. Submitted into the public record in connection with item #1 on 02-28-13. 14 Todd B. Hannon City Clerk i I I I I i CITY OF MIAMI OMNI COMIVIUNITY REDEVELOPMENT AGENCY (A Component Unit of the City of Miami, Florida) Notes to Basic Financial Statements September 30, 2012 3. Capital Assets Capital asset activity for the fiscal year ended September 30, 2012 was as follows: Balance September Transfers / Transfers / 30, 2011 Additions Deletions Balance September 30, 2012 Capital assets, not being depreciated: Land $ 823,039 823,039 Capital assets, being depreciated: Infrastructure 1,368,604 1,368,604 Less accumulated depreciation for: Infrastructure 30,413 45,620 76,033 Total capital assets, being depreciated, net 1,338,191 45,620 - 1,292,571 Total capital assets (net of accumulated depreciation) $ 2,161,230 (45,620) 4115 610 During fiscal year 2012, depreciation expense in the amount of $45,620 was charged to Community Redevelopment. 4. Fund Balances At September 30, 2012, the Agency reported the following governmental fund balances: ® Committed fund balance - these amounts can only be used for specific purposes pursuant to constraints imposed by the Board of the Agency. The items cannot be removed unless the Board removes it in the same manner it was implemented. ® Assigned fund balance - these amounts are approved and constrained by the Agency's intent to be used for specific purposes, but are neither restricted nor committed. Below is a table of fund balance categories and classifications at September 30, 2012: Special Revenue Fund Committed to community development $ 18,950,685 Assigned to community development 374,500 Total 19,325,185 5. Commitment and Contingencies The Agency is contractually obligated for approximately $14 million at September 30, 2012, for construction projects. In accordance with the Global Agreement entered into between the Agency, the County, and the City, the Agency is committed to provide an annual contribution of $2 million to Museum Parks capital expenditure fund, payable commencing on the date of substantial completion of the park component of the project through 2030. 15 Submitted into the public record in connection with item #1 on 02-28-13. Todd B. Hannon City Clerk CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (A Component Unit of the City of Miami, Florida) Notes to Basic Financial Statements September 30, 2012 5. Commitment and Contingencies (continued) Also as part of the Global Agreement entered into between the Agency, the County, and the City, the Agency agreedto fund the City's portion of the Port Tunnel project upon substantial completion. On October 25, 2012, the Agency's Board authorized the issuance of an annual grant to the City, in an amount equal to the total principal (up to $50 million) and interest on the debt issued by the City to fund its portion of the Port Tunnel project, and further authorized the Executive Director to execute a Port Tunnel Interlocal and Grant Agreement with the City. Payments on the grant will be made starting in fiscal year 2013 through fiscal year 2030, and are pledged by tax increment funds. The Port Tunnel lnterlocal and Grant Agreement was executed subsequent to the date of the auditor's report. 6. Subsequent events The Agency evaluated subsequent events through December 3, 2012, the date the financial statements were available to be issued, and does not believe that there are any such events or transactions that require disclosure. Submitted into the public record in connection with 16 item #1 on 02-28-13. Todd B. Hannon City Clerk i i i i 1 i i i i i i i i Required Supplementary Information Submitted into the public record in connection with item #1 on 02-28-13. Todd B. Hannon City Clerk CITY OF MIAMI OMNI 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, 2012 Variance - Budgeted amounts positive Original Final Actual (negative) Revenues: Tax increment revenue $ 5,123,129 $ 4,524,625 4,794,707 270,082 Interest revenue - 36,804 36,804 Other income - 4,100 4,100 Total revenues 5,123,129 4,524,625 4,835,611 310,986 Expenditures: Current: General government 927,552 1,033,174 631,780 401,394 Community redevelopment 34,067,799 32,042,532 13,529,727 18,512,805 Total expenditures 34,995,351 33,075,706 14,161,507 18,914,199 Deficiency of revenues under expenditures (29,872,222) (28,551,081) (9,325,896) 19,225,185 Other financing sources: Net carryover fund balance _ 29,872,222 28,551,081 28,551,081 Total other financing sources 29,872,222 28,551,081 28,551,081 Net change in fund balance $ (9,325,896) (9,325,896) Fund balance - beginning of the year Fund balance - end of the year 28,651,081 $ 19,325,185 Submitted into the public record in connection with item #1 on 02-28-13. Todd B. Hannon City Clerk The note to the required supplementary information is an integral part of this schedule. 17 CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (A Component Unit of the City of Miami, Florida) Note to Required Supplementary Information September 30, 2012 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. 18 Submitted into the public record in connection with item #1 on 02-28-13. Todd B. Hannon City Clerk i i i i i i I i i i i I i i Other Reports Submitted into the public record in connection with item #1 on 02-28-13. Todd B. Hannon City Clerk SKI T&G JACO SAN'SON KLINE o T oC & GAMARRA, LLP ed Public Accountants & Consultants 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 5805 Blue Lagoon Drive Suite 220 Miami, Florida 33126 Tel. (305) 2,69-8633 Fax (305) 265-0652 www.skjnet.com To the Board of Directors of the City of Miami Omni Community Redevelopment Agency: We have audited the basic financial statements of the City of Miami Omni Community Redevelopment Agency (the Agency) as of and for the year ended September 30, 2012, and have issued our report thereon dated December 3, 2012. 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. Internal Control Over Financial Reporting Management of the Agency is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered the Agency's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Agency's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Agency's internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis Our consideration of internal control over financial reporting was for the limited purpose described in the preceding paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be a material weakness,. as defined above. Compliance and Other Matters As part of obtaining 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, 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. In addition, we issued a management letter to management of the Agency dated December 3, 2012, as required by the Rules of the Auditor General of the State of Florida. Submitted into the public record in connection with 19 item #1 on 02-28-13. Todd B. Hannon City Clerk SKI T&G This report is intended solely for the information and use of the board of directors, management of the Agency, and the State of Florida Office of the Auditor General, and is not intended to be and should not be used by anyone other than these specified parties. Apn *a, fraing:414 4"otkeL, December 3, 2012 20 Submitted into the public record in connection with item #1 on 02-28-13. Todd B. Hannon City Clerk SKJ T&G SANSON KL1NE JACO 0 T . OC & GAM Certified Public Accountants & Consultants Management Letter in Accordance with the Rules of the Auditor General of the State of Florida To the Board of Directors of the City of Miami Omni Community Redevelopment Agency: 5805 Blue Lagoon Drive Suite 220 Miami, Florida 33126 Tel. (305) 269-8633 Fax 305)) 265-0652 www.skjneI com We have audited the financial statements of the City of Miami Omni Community Redevelopment Agency (the Agency), a Component Unit of the City of Miami, Florida, as of and for the fiscal year ended September 30, 2012 and have issued our report thereon dated December 3, 2012. 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. We have issued our Independent Auditors' Reports on Internal Control over Financial Reporting and on Compliance and Other Matters. Disclosures in those reports, which are dated December 3, 2012, should be considered in conjunction with this management letter. Additionally, our audit was conducted in accordance with the provisions of Chapter 10.550, Rules of the Auditor General, which govern the conduct of local governmental entity audits performed in the State of Florida and, unless otherwise required to be reported in the report on compliance and internal controls or schedule of findings and questioned costs, this letter is required to include the following information. Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report not otherwise addressed in the auditor's report pursuant to Section 10.557(3)(b)2., Rules of the Auditor General. There were no findings and recommendations made in the preceding annual financial audit report. ® Section 10.554(1)(i)2., Rules of the Auditor General, requires our audit to include a review of the provisions of Section 218.415, Florida Statutes, regarding the investment of public funds. In connection with our current year audit, we determined that the Agency complied with Section 218.415, Florida Statutes. Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. Current year recommendations are included at Appendix A to this letter. • Section 10.554(1)(i)4., Rules of the Auditor General, requires that we address violations of provisions of contracts or grant agreements, fraud, illegal acts, or abuse that have occurred, or are likely to have occurred, that have an effect on the financial statement that is less than material but more than inconsequential. In connection with our current year audit, we noted no such violations. Submitted into the public record in connection with item #1 on 02-28-13. 21 Todd B. Hannon City Clerk SKJ • Section 10.554(1)(i)5., Rules of the Auditor General, requires, based on professional judgment, the reporting of the following matters that have an inconsequential to the determination effect on the financial statement, considering both quantitative and qualitative factors: (a) violations of provisions of contracts or grant agreements, fraud, illegal acts, or abuse; and (b) deficiencies in internal control that are not significant deficiencies. In connection with our current year audit, we did not have any such findings. • Section 10.554(1)(i)6., 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. Such disclosures are made in note 1 to the Agency's financial statements. • Section 10.554(1)(i)7.a., Rules of the Auditor General, requires a statement be included as to whether or not the local governmental entity 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 current year audit, we determined that the Agency did not meet any of the conditions described in Section 218.503(1), Florida Statutes. • Section 10.554(1)(i)7.b., Rules of the Auditor General, requires that we determine whether the annual financial reports for the Agency for the fiscal year ended September 30, 2012, filed with the Florida Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes, is in agreement with the annual financial audit report for the fiscal year ended September 30, 2012. The Agency does not file a separate report with the State of Florida Department of Financial Services. The financial operations of the Agency are included in the basic financial statements of the City of Miami, Florida for the year ended September 30, 2012. • Sections 10.554(1)(i)7.c. and 10.556(7), Rules of the Auditor General, require that we apply financial condition assessment procedures. In connection with our current year audit, we applied financial condition assessment procedures. It is management's responsibility to monitor the entity'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. This management letter is intended solely for the information and use of the board of directors, management of the Agency, and the State of Florida Office of the Auditor General, and is not intended to be and should not be used by anyone other than these specified parties. Altimam *gb December 3, 2012 Submitted into the public record in connection with item #1 on 02-28-13. Todd B. Hannon 22 City Clerk i I i I i Appendix A CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (A Component Unit of the City of Miami, Florida) Management Letter in Accordance With the Rules of the Auditor General of the State of Florida Year ended September 30, 2012 Current Year's Recommendations 2012-1— New GASB Pronouncements Criteria — The Government Accounting Standards Board (GASB) recently issued Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and Statement No. 65, Items Previously Reported as Assets and Liabilities. GASB Statement No. 63 provides financial reporting guidance for deferred outflows of resources and deferred inflows of resources. Concepts Statement No. 4, Elements of Financial Statements, introduced and defined those elements as a consumption of net assets by the government that is applicable to a future reporting period, and an acquisition of net assets by the government that is applicable to a future reporting period, respectively. Previous financial reporting standards do not include guidance for reporting those financial statement elements, which are distinct from assets and liabilities. Concepts Statement 4 also identifies net position as the residual of all other elements presented in a statement of financial position. This Statement amends the net asset reporting requirements in Statement No. 34, Basic Financial Statements —and Management's Discussion and Analysis for State and Local Governments, and other pronouncements by incorporating deferred outflows of resources and deferred inflows of resources into the definitions of the required components of the residual measure and by renaming that measure as net position, rather than net assets. GASB Statement No. 65 establishes accounting and financial reporting standards that reclassify, as deferred outflows of resources or deferred inflows of resources, certain items that were previously reported as assets and liabilities and recognizes, as outflows of resources or inflows of resources, certain items that were previously reported as assets and liabilities. This Statement also provides other financial reporting guidance related to the impact of the financial statement elements deferred outflows of resources and deferred inflows of resources, such as changes in the determination of the major fund calculations and limiting the use of the term deferred in financial statement presentations. GASB Statement No. 63 is effective for the Agency's financial statement period ending September 30, 2013. GASB Statement No. 65 is effective for the Agency's financial statement period ending September 30, 2014, with earlier implementation encouraged. However, as the Agency is a component unit of the City of Miami, Florida, if the City makes the decision to early implement GASB Statement No. 65, the Agency will be required to early implement as well. Condition — Not applicable Questioned Costs — Not applicable Context — Not applicable Cause — Not applicable Effect — Not applicable Submitted into the public record in connection with item #1 on 02-28-13. Todd B. Hannon City Clerk Appendix A CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (A Component Unit of the City of Miami, Florida) Management Letter in Accordance With the Rules of the Auditor General of the State of Florida Year ended September 30, 2012 Current Year's Recommendations Recommendation — We recommend that management become familiar with GASB Statements No. 63 and 65, and be prepared to implement these pronouncements for the fiscal year ending September 30, 2013 and September 30, 2014, respectively. However, if the City decides to implement GASB Statement No. 65 earlier than fiscal year ending September 30, 2014, the Agency will be required to early implement as well. View of Responsible Officials and Planned Corrective Actions — Management acknowledges the recommendation made. We will become familiar with both GASB Statements and implement each when required. Submitted into the public record in connection with item #1 on 02-28-13. Todd B. Hannon City Clerk I I I, i i i I I I