COMPREHENSIVE ANNUAL FINANCIAL...

COMPREHENSIVE ANNUAL

FINANCIAL REPORT

SOUTH SEMINOLE AND NORTH ORANGE COUNTY WASTEWATER TRANSMISSION AUTHORITY

Maitland, Florida

For the year ended September 30,2014

Prepared by:

Authority Accountant

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COMPREHENSIVE ANNUAL FINANCIAL REPORT SOUTH SEMINOLE AND NORTH ORANGE COUNTY

WASTEWATER TRANSMISSION AUTHORITY

TABLE OF CONTENTS

INTRODUCTORY SECTION

TRANSMITTAL LETTER

PRINCIPAL OFFICIALS

ORGANIZATIONAL STRUCTURE

CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE

IN FINANCIAL REPORTING

II. FINANCIAL SECTION

INDEPENDENT AUDITORS' REPORT

MANAGEMENT'S DISCUSSION AND ANALYSIS

Financial Statements:

Statement of Net Position

Statement of Revenues, Expenses and Changes in Net Position

Statement of Cash Flows

Notes to the Financial Statements

III. STATISTICAL SECTION

TABLE I II III IV v VI VII VIII IX

Net Position by Component Changes in Net Position Debt Service Requirements and Long-term Debt Percentage of Committed Capacity of Member Entities Percentage of Iron Bridge Facility Committed Capacity Annual Flow -Millions of Gallons Transmitted to Iron Bridge Facility Demographic and Economic Statistics Principal Employers Miscellaneous Statistical Data

IV. OTHER REPORTS

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

Independent Accountants' Report on Compliance with Florida Statutes 218.415 - Investments of Public Funds

Auditors' Comments and Recommendations (Management Letter) Status of Prior Year Comments Management Response Letter

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SOUTH SEMINOLE & NORTH ORANGE COUNTY WASTEWATER TRANSMISSION AUTHORITY

410 Lake Howell Road Maitland, FL 32751-5907

February 6, 2015

Authority Board Members South Seminole and North Orange County Wastewater Transmission Authority

Dear Authority Board Members:

The Comprehensive Annual Financial Report of the South Seminole and North Orange County Wastewater Transmission Authority (Authority) for the year ended September 30, 2014, is hereby submitted. Responsibility for both the accuracy of the data, and the completeness and fairness of the presentation, including all disclosures, rests with management. To the best of our knowledge and belief, the enclosed data are accurate in all material respects and are reported in a manner that presents fairly the financial position and results of operations of the South Seminole and North Orange County Wastewater Transmission Authority. All disclosures necessary to enable the reader to gain an understanding of the South Seminole and North Orange County Wastewater Transmission Authority's financial activities have been included.

Generally accepted accounting principles (GAAP) require 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 designed to complement MD&A and should be read in conjunction with it. The Authority's MD&A can be found immediately following the report of the independent auditors.

Reporting Entity Definition: The Authority, in determining the entity to be reported on, used the Governmental Accounting Standards Board (GASB) Statement No. 14, The Financial Reporting Entity, as amended by GASB Statements No. 39 and 61. The financial reporting entity consists of the primary government, organizations for which the primary government is financially accountable, and the other organizations for which the nature and significance of their relationship with their primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete. The Authority has no component units.

Governmental Structure: The South Seminole and North Orange County Wastewater Transmission Authority was created by an Act of Florida Legislature in 1978 as a separate local agency of the government with powers designed to meet the particular needs of the area in relationship to transmission of wastewater to a regional sewage treatment plant (Iron Bridge Treatment Facility).

The Authority, an Independent Special District, encompasses a service area of approximately sixty-eight (68) square miles. It owns and operates an untreated wastewater transmission system located in portions of Seminole County, Orange County, and the

Telephone 407/628-3419 Fax: 407/628-0153 e-mail: ssnocwta1 @cfl.rr.com [email protected]

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Cities of Casselberry, Winter Park, and Maitland. The Authority provides such service to Seminole County, the Cities of Maitland, Casselberry, and Winter Park, and can provide transmission service to the City of Winter Springs.

Design work for the Authority began in the spring of 1979. Construction grants were obtained from the Environmental Protection Agency (EPA), and Bond Anticipation Notes were issued during 1981 in the amount of $7,000,000. Construction on the system began in February 1982. Initial flows into the system were begun in February 1983 and the total system completed in the fall of 1983. The Bond Anticipation Notes issued in December 1981 were replaced by Sewer Revenue Bonds in December 1983 and replaced at lower interest rates with bond issues in 1986 and 1993. EPA grants in the amount of $8,876,992 had been received by September 30, 1984. Upon the pay-off of the 1993 Sewer Revenue Bonds, new bonds were issued in the amount of $8,515,000 to fund Phase I of the Master Plan-Capital Improvement Projects (CIP).

The facilities owned by the Authority within the service area consist of thirty-three (33) metering points, nineteen (19) pump stations and approximately thirty-two (32) miles of force mains ranging in size from eight inch (8") to thirty-six inch (36") diameters. The Authority also owns a section of forty-two inch (42") and forty-eight inch (48") diameter gravity sewer lines and discharges into the City of Orlando's eighty-four inch (84") diameter gravity sewer for the final leg of transmission and ultimately treatment at the City of Orlando's Iron Bridge Treatment Facility. The Authority's present committed flow through the system is 13.203 million gallons per day (MGD).

The Cities of Maitland, Casselberry, Winter Park, Winter Springs, and Seminole County are entitled to representation on the governing board. Each governmental entity appoints one member and one alternate member. The alternate member is authorized by each respective entity to act in all matters for the member during the absence of the member at any duly authorized board meeting. The term of office is four (4) alternating years terminating in successive years on September 30.

The Legislative Act creates a 1 00-vote basis for conducting business with the first fifty (50) votes divided equally among board members and the remaining fifty (50) votes divided in proportion to the committed capacity for each governmental entity. The City of Winter Springs opted not to purchase any capacity in the Authority system while continuing operation of their own system.

The Authority Board Members have the power to represent the Authority, and have the exclusive responsibility and power to adopt the annual budget for the operation of the Authority. The Authority does not have the power to levy taxes, but receives all revenues from its member entities through lnterlocal Agreements.

The Authority has one (1) employee. Duties other than administrative are provided by service contracts. The legal firm of Brown, Garganese, Weiss and D'Agresta, P.A. is the Authority's Attorneys (represented by the same attorney since 1990) and the firm of Reiss Engineering is the Authority's Consulting Engineers. Lombardo Spradley & Klein provide accounting services.

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OPERATIONAL OUTLOOK

In order to ensure the viability and the financial integrity of the Authority's System, the Act gives the Authority the power to compel all retail sewage collection within its legislated boundaries to utilize its facilities. The Act further gives the Authority the ability to compel by legal proceedings payment by such user for among other things, the Authority's operation, maintenance and debt service expenses.

Each member entity (customer) of the Authority has executed with the City of Orlando, Uniform Intergovernmental Agreements, whereby Orlando agrees to treat, at the City of Orlando's Iron Bridge Treatment Facility, a certain volume of sewage (committed capacity) generated within each customer's service area. The Authority's user charge system, which has been formalized through Uniform lnterlocal Agreements (recently amended and restated) executed between the Authority and each one of its member entities, states that each customer will be billed monthly for its pro rata share of 100% of the Authority's operation, maintenance and depreciation expenses and 110% of the debt service expense of the bond based solely upon its committed flow. Member entities are charged penalties when total committed capacity is exceeded.

With the exception of initial construction in 1982 and 1983 and two State Tribal Assistance Grants in the amounts of $144,300 (2004) and $485,000 (2012-2013) from the Environmental Protection Agency, the Authority has not received any Federal or State funding.

Major Initiatives for the Year: The Authority, by virtue of the Act, is to maintain the system and all components in good condition and operate the same in an economical and efficient manner and does so by making proper expenditures for equipment, repairs and replacements.

The following is a summary of significant accomplishments and project related activities and expenses made by the Authority during the fiscal year:

Since the majority of the Authority's facilities were constructed in 1980 and 1981, these original facilities are approaching the end of their useful lives requiring extensive maintenance or have limited capacities. Improvements to the Authority's pumping stations were identified through facility inspections, discussions with the operation and maintenance personnel of the entities and through hydraulic analyses performed via computer modeling. The Authority is presently in the engineering/design/construction phase for major system replacements, and force main relocations due to road widening projects. All design flows and criteria for the Authority's system are updated as system changes occur and compared with the calibrated hydraulic model to identify potential capacity and operational issues. Additionally periodic systematic pipe testing is conducted as emphasized in the original Hydraulic Analysis as a proactive approach to identify, maintain, and replace components of the systems before reaching critical stage.

Long Term Financial Planning: Funding for identified projects is addressed through the existing rate structure which includes a depreciation component. This growth element is reviewed and adjusted annually, but may not exceed the actual depreciation of the prior fiscal year. This component is offset according to the required increase in debt service for project funding.

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The Authority's operation and financials were reviewed in June 2014 by credit analysts from Standard & Poor's regarding its financial condition. The analysis results were that our underlying rating remained AA- based on the strong liquidity of the Authority and the continued strong performance of its customers. It is anticipated that rates for future financings could be favorably influenced by this action.

The CIP was originally adopted in two phases due to the magnitude of the number of projects and the projected costs. Phase I projects were expected to be constructed during the fiscal years 2005, 2006 and 2007 with projected costs of $15 million. Due to a steep escalation of materials and construction costs which were applied to the CIP and reflecting more than $13 million increase (61% increase), the CIP was modified from two to three phases. Two pipeline projects originally listed in Phase I of the CIP were deferred to Phase II and Phase Ill because of higher than anticipated total project costs yet allow completion of the most critical projects within the original budgeted amount. The first phase of capital projects has been funded with the Sewer Revenue Bonds Series 2004 and the cash contribution by the City of Winter Park related to its share of the Capital Improvements Plan Phase I.

Other significant activities are the SR 436/RedBug Flyover project required the relocation of approximately 3000 linear feet of 12 inch and 2000 linear feet of 16 inch force main and appurtenant valves and fittings; Aloma Avenue Force Main replacement project (Phase II) which consists of approximately 2500 linear feet of 36 inch ductile iron force main and appurtenant valves and fittings due to pipe deterioration. The Authority now has 2 prequalified contractors to perform pump station and pipeline system work on call in response to a bid package that was developed to solicit qualified contactors to provide continuing maintenance contracts for the Authority's system.

Additionally other activities included the installation of digital recorders and cabinet upgrades; the installation of new emergency generators at three pump stations, approximately 10,000 If of pipe replacement and various station upgrades.

+ Air Release Valve Maintenance Program

A maintenance program is in effect with a service provider to clean, inspect and maintain the eighty-nine (89) valves located throughout the Authority's system. This extends the life of the pipe and pumps through the evacuation of hydrogen sulfide gases and trapped air.

+ System Interconnects

This ongoing project allows directional flow options from multiple pump stations which permits intermittent low flow lines to be flushed and cleaned, reducing the maintenance requirements due to septic conditions. Additionally it serves as a back-up alternative during emergencies, routine maintenance, and would also allow flows to be diverted to or from the City of Casselberry's Water Reclamation Facility. The valves associated with alternate routes were recently mapped and exercised with entity personnel as a proactive measure regarding the SR 436-RedBug Flyover roadway construction project. To date there has been seventeen hundred feet (1 ,700') of 16" PVC pipe installed as a major interconnect in the Authority's system. Additionally, the Authority has retained the 8800' of

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42" and 48" gravity lines and 7200' of 16" and 20" force mains that were recently replaced as an alternate bypass and storage for these sections of the transmission system.

• Operation and Maintenance Costs

Operation and maintenance rates to the entities remained at the current level for sixteen of the past eighteen years.

+ Future Capacity

Members have completed their review of future capacity needs to assist the City of Orlando in analyzing repair/replacement alternatives as well as future capacity needs for the Iron Bridge Treatment Facility.

Major Initiatives for the Future: Roadway widening throughout this rapidly growing area has and will continue to provide an opportunity to improve the system after determining the degree of required line relocation by replacing the affected line with non-corrosive pipe material. Since the Authority System is presently operating at approximately 50% capacity, there are no immediate long-term plans for expanding the system.

Projects and costs contained in the Master Plan (CIP) are annually revisited. Major factors for consideration are as follows:

• Age of infrastructure. • Potential adverse environmental impacts from damage or failure of components of the

infrastructure. • Operating flexibility and improved emergency response time, which minimizes costs of

repairs and replacement. • Developing alternative funding sources for the Master Plan (CIP) Phase II and Phase

Ill.

These factors translate into constant monitoring of the infrastructure so as to modify the Master Plan as necessary to assure a system that will be effective, efficient, and economical.

FINANCIAL OUTLOOK

Depreciation Reserve Fund: The Depreciation Reserve Fund was established to provide for system relocation costs and other capital improvements to the system. It is funded through a depreciation rate component, dedicated interest earnings, year-end surplus, if any, and monthly excess flow administrative penalty charges. This account is held in the State Board of Administration Local Government Surplus Trust Funds Investment Pool and money market accounts that are insured by federal depository insurance up to $250,000. Amounts in excess of $250,000 are fully insured by U.S. Government securities held in the Public Deposit Security Trust Fund maintained and monitored by the Treasurer of the State of Florida. The balance in the Depreciation Reserve Fund at September 30, 2014 was $3,194,941.

Internal Accounting Controls: The Authority's management is responsible for establishing and maintaining internal control designed to ensure that: 1) the assets of the

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Authority are protected from loss, theft, or misuse; 2) adequate accounting data is compiled to allow for the preparation of financial statements in conformity with U.S. generally accepted accounting principles; and 3) all transactions and activities are properly authorized. The internal accounting control should provide. reasonable, but not absolute, assurance that the objectives are met. The concept of reasonable assurance recognizes that: 1) the cost of a control should not exceed the benefits likely to be derived; and 2) the valuation of costs and benefits requires estimates and judgment by management.

We believe the internal control for functions adequately safeguards assets, provides reasonable assurance of proper recording of financial transactions, and provides for proper authorization of all transactions and activities.

During the year, monthly budgetary reports showing budget and actual revenue and expenses are reviewed by management and made available to the Authority Board. Additionally, the Authority has hired an independent accounting firm to conduct the day-today bookkeeping \ accounting services.

Relevant Financial Policies: The Authority's management has reviewed GASB Statement No. 45, Accounting and Reporting for Postemployment Benefits Other than Pensions and has made the determination that there are no applicable post employment benefits and therefore no liability exists.

OTHER INFORMATION

Independent Audit: The Enabling Legislative Act and Florida State Statutes require an annual audit made by independent certified public accountants. The accounting firm of Holland and Reilly, CPAs was selected by the Authority to audit the 2014 financial statements. The auditors' report on the basic financial statements is included in the financial section of this report.

Submittal for Award: The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to South Seminole and North Orange County Wastewater Transmission Authority, Maitland, Florida, for its Comprehensive Annual Financial Report (CAFR) for the Fiscal Year ended September 30, 2013; this is the seventeenth time the Authority has received the Certificate. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement for Excellence in Financial Reporting, a government unit must publish an easily readable and efficiently organized Comprehensive Annual Financial Report (CAFR), whose contents conform to program standards. Such CAFR 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 our current report conforms to the Certificate of Achievement program requirements and we are submitting it to the Government Finance Officers Association (GFOA) for acceptance.

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ACKNOWLEDGMENTS

The preparation of the Comprehensive Annual Financial Report on a timely basis would not have been possible without the dedicated service of Lombardo Spradley & Klein, the contract accountants, and Holland and Reilly, the Authority's Auditors for their contribution to the excellence of this report.

Annual Financial reports are a permanent historical record of the South Seminole and North Orange County Wastewater Transmission Authority's operation for the general public, member entities, Authority Board Members and management. It is our belief that this is a comprehensive report of financial transactions under the control of the South Seminole and North Orange County Wastewater Transmission Authority and that the following statements present an accurate, informative record of the financial activities of the Authority, and its financial condition at September 30, 2014.

We wish to acknowledge the interest, leadership and support of the Board Members in planning and conducting financial operations in a responsible and progressive manner.

ee~P:UL-Ed Gil de Rubio Executive Director

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SOUTH SEMINOLE and NORTH ORANGE COUNTY WASTEWATER TRANSMISSION AUTHORITY

PRINCIPAL OFFICIALS

REPRESENTATIVES

Chairman Randy Knight City of Winter Park

Vice-Chairman Steve Spencer

Gary Rudolph Richard Wells Donald Gilmore

City of Casselberry

Seminole County City of Maitland City of Winter Springs

ALTERNATE REPRESENTATIVES

Howard Schieferdecker Glendon Weatherholtz Jeffrey Briggs Carol Hunter

ADMINISTRATION

City of Maitland City of Casselberry City of Winter Park Seminole County

Ed Gil de Rubio Executive Director

CONSULTANTS

Accounting Services Lombardo Spradley & Klein

Legal Counsel Brown, Garganese, Weiss, and D'Agresta, P.A.

Engineering Reiss Engineering, Inc.

Auditors Holland and Reilly, CPAs

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SOUTH S~OY.A\ND NO:Bm O:IUNGE COlDNJrf WABJrEWATEB HA\NSMJISSION AtJTBORm

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South Seminole and North Orange County Wastewater Transmission Authority Board *

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Executive Authority Authority Authority Director Attorney Auditor Engineer

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Authority * Board Members and Alte

- Accountant are representatives from:

W&:c.,t~""l<! ,,,}I City of Casselberry City of Maitland

Other City of Winter Park Contractual City of Winter Springs

Services Seminole County -.~

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rnates

DAVIDS. HOLLAND, CPA

THOMAS F. REILLY, CPA

Board of Directors

HOLLAND & REILLY CERTIFIED PUBLIC ACCOUNTANTS

601 NORTH FERN CREEK

SUITE 200

ORLANDO, FLORIDA 32803

(407} 894-6803

( 4 0 7) 8 9 6 - 3 0 4 4 FAx

INDEPENDENT AUDITORS' REPORT

South Seminole and North Orange County Wastewater Transmission Authority

AMERICAN INST!Tln'E OF

CERTIFIED PUBLIC ACCOUNTANTS

FLO HID A INSTITUTE OF


ASSOCIATION OF

CEHTIFIIED FHAUD EXAMINERS

We have audited the accompanying financial statements of South Seminole and North Orange County Wastewater Transmission Authority (the Authority) as of and for the year ended September 30, 2014, and the related notes to the financial statements, which collectively comprise the Authority's basic financial statements as listed in the table of contents.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opmwn 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 of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the Authority as of September 30, 2014 and the respective changes in financial position and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 4 through 7 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 ofthe 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 an opmwn on the financial statements that collectively comprise the Authority's basic financial statements. The introductory and statistical sections are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated February 17, 2015 on our consideration of the Authority'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 Authority's internal control over financial reporting and compliance.

February 17, 2015 Orlando, Florida

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Management's Discussion and Analysis

As financial management of the South Seminole and North Orange County Wastewater Transmission Authority (the "Authority"), we offer readers of the Authority's financial statements this narrative overview and analysis of the financial activities of the Authority for the fiscal year ended September 3 0, 2014. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal at the front of the report.

Financial Highlights

o Operating income for the Authority was $285,259 for fiscal year 2014. This was a decrease of $75,580 from the previous year, due to a budgeted decrease in operating revenue and an increase in repairs and maintenance expenses.

o The Authority's net position decreased $228,771 compared to an increase of$51,666 in the prior fiscal year. The term "net position" refers to the difference between assets and liabilities. At the close of fiscal year 2014, the Authority had a net position of $21,213,283, a decrease of 1.07% from the previous fiscal year.

o The Authority reported unrestricted net position of $4,060,080 at the close of fiscal year 2014, a decrease of $4 72,822 over the September 30, 2013 balance of $4,532,902.

o The Authority's cash and cash equivalents balance was $7,806,640 representing a $868,251 decrease from the prior fiscal year.

o The Authority had total operating revenues of $1,824,531 and total operating expenses of $1,539,272 for fiscal year 2014.

o The Authority's capital outlays for fiscal year 2014 were $702,135. o The Authority's outstanding debt is $8,857,326, a decrease of $686,602 from the prior fiscal year.

Overview of the Financial Statements

This discussion and analysis is intended to serve as an introduction to the Authority's financial statements. The Authority's financial statements and notes to the financial statements included in this report were prepared in accordance with U.S. generally accepted accounting principles applicable to governmental entities for proprietary fund types.

Basic Financial Statements

The Authority is a special-purpose government consisting only of a proprietary type enterprise fund whose function is to meet the particular need of the area in relationship to wastewater transmission to a regional sewage treatment plant. The basic financial statements are designed to provide readers with a broad overview of the Authority's finances, in a manner similar to a private-sector business. They consist of the statement of net position, the statement of revenues, expenses and changes in net position and statement of cash flows.

The statement of net position presents information on all the Authority'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 Authority is improving or deteriorating. The statement of revenues, expenses, and changes in net position presents information showing how the Authority's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event occurs, regardless of timing of unrelated 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., depreciation, and earned but unused compensated absences).

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Notes to the Financial Statements

The notes to the financial statements provide additional information that is essential to a full understanding of the data provided in the basic financial statements.

Other Information

In addition to the basic financial statements and accompanying notes, this report also presents certain supplementary statistical schedules that cover more than one fiscal year that reflect the population of member entities, annual flows, and financial trends of the Authority.

Financial Analysis

Current and other assets Capital assets, net

Total assets

ASSETS

LIABILITIES AND NET ASSETS

Liabilities: Current liabilities (Payable from current assets) Current liabilities (Payable from restricted assets) Long-term debt, less current portion

Total liabilities

Net Position: Net investment in capital assets Restricted Unrestricted

Total net position

September 30, 2014 2013

$ 7,817,953 23,477,724

$31.295.677

88,776 1,841,292 8,152.326

10,082,394

16,224,644 928,559

4,060,080 $21.213.283

$ 8,819,108 23,853,549

$32.672.657

86,769 2,289,906 8,853,928

11,230,603

15,888,467 1,020,685 4,532,902

$21.442.054

Assets exceeded liabilities by $21,213,283. This represents a decrease in total assets of $1,376,980 (4.2%), and a decrease of total liabilities of $1,148,209 (10%) over the previous year. The decrease in total assets was primarily due to a reduction of cash and cash equivalents. The reduction in total liabilities was primarily due to a reduction in amounts due to other governments, and debt payments. A portion of net position ($928,559) is restricted for debt service and renewal and replacement reserves. Funds were used to pay for investments in capital assets of $702,13 5 primarily for improvements and renovations to the system. This compares to additional investments in capital assets made by the Authority for 2013 of $764,678.

By far, the largest portion of the Authority's net position (76%) reflects its investments in capital assets (e.g., land, buildings, equipment and system facilities, and construction in progress) less any related debt used to acquire those assets that is still outstanding. The Authority uses these capital assets to operate a wastewater transmission line and consequently, those assets are not available to liquidate liabilities or other spending. Of the $23,477,724 in capital assets, $265,590 represents construction in progress which includes engineering studies and design work for future line replacements and station rehabilitations.

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Revenues: Operating revenues . Investment income Other income

Total revenue

Expenses: Operating expenses Interest expense Loss on disposal of equipment Other

Total expenses

Increase (decrease) in net position Beginning net position

Ending net position

Changes in Net Position

for the year ended September 30, 2014 2013

$ 1,824,531 $ 1,890,790 8,485 13,203

155 236,593 1,833,171 2,140,586

1,539,272 1,529,951 336,354 350,601 185,158 207,988

1 158 380 2,061,942 2,088,920

( 228,771) 51,666 21,442,054 21,390,388

$21,213,283 $21,442,054

Operating revenues decreased and operating expenses increased in 2014. The decrease in operating revenues was a budgeted reduction. The increase in operating expenses was due to repairs and maintenance costs required to maintain the system. A significant portion of operating expenses relates to depreciation, which was $892,802 (58%) in 2014 and $833,011 (54%) in 2013.

The decrease in net position of $228,771 is down from the prior year's increase of $51,666 mainly due to decreased operating revenues in 2014, as well as the Authority receiving an EPA grant in 2013 and no grant in 2014. The losses on disposals of equipment represent the original depreciated costs of pipelines that are being replaced in the Authority's system improvement program. The completion of additional improvement projects in 2014 created the loss on disposal of equipment.

Capital Asset and Debt Administration

Capital Assets

The Authority's investment in capital assets was $23,477,724, net of accumulated depreciation, as of September 30, 2014, a net decrease of $375,825, primarily due to depreciation expense exceeding the outlays for capital assets, and the disposal or replacement of equipment. Capital assets include land, buildings, system facilities, furniture, fixtures and equipment, and construction in progress. Major capital asset events during the fiscal year included force main line replacements and pump station rehabilitations, and the close-out of several large projects. Additional information on the Authority's capital assets can be found in note 6 on page 17 ofthis report.

Long-Term Debt

The Authority has outstanding bonds payable of $8,857,326 (net of unamortized bond discounts), a decrease of $686,602 during fiscal year 2014 due to the paydown of principal.

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Long-Term Debt- Continued:

The Authority's debt service coverage ratio decreased. from 2.26 for fiscal year 2013 to 1.15 for fiscal year 2014. The decrease in debt service ratio was primarily because the 2012 bonds payable had no debt service requirements until the current fiscal year. In addition, operating revenue decreased and repairs and maintenance expenses increased. Additional information on the Authority's long-term debt can be found in note 7 on pages 18-19 ofthis report.

Requests for Information

This financial report is designed to provide a general overview of the Authority's finances for all those with an interest in its finances. Questions concerning any of the information provided in this report, or requests for additional financial information, should be addressed to the Executive Director, South Seminole and North Orange County Wastewater Transmission Authority, 410 Lake Howell Road, Maitland, Florida 32751.

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STATEMENT OF NET POSTION

Current assets: Cash Accounts receivable Prepaid expenses Restricted assets - cash equivalents

Total current assets

Noncurrent assets: Restricted assets:

Cash equivalents

Capital assets: Property and equipment Less accumulated depreciation

Total capital assets

Total noncurrent assets

Total assets

September 30, 2014

ASSETS

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$34,027,510 ( 10,549, 786)

$ 249,291 8,499 2,814

1,841,392 2,101,996

5,715,957

23,477,724

29,193,681

$31 295.677

LIABILITIES AND NET POSITION

Current liabilities (payable from current assets): Accounts payable Accrued salaries and compensated absences Accrued and withheld payroll taxes

Total current liabilities (payable from current assets)

Current liabilities (payable from restricted assets): Contracts payable Accrued interest payable Due to other governmental units Bonds payable - current portion

Total current liabilities (payable from restricted assets) Total current liabilities

Noncurrent liabilities Bonds payable Less: unamortized bond discount

Total noncurrent liabilities Total liabilities

Net position: Net investment in capital assets Restricted for debt service and renewal and

replacement reserves Unrestricted

Total net position

Total liabilities and net position

See accompanying notes.

9

$ 47,097 168,214 920,981 705,000

8,220,000 ( 67 674)

16,224,644

928,559 4,060,080

$ 79,279 9,279

218 88,776

1,841,292 1,930,068

8,152,326 10,082,394

21,213,283

$31.295.677

SOUTH SEMINOLE AND NORTH ORANGE COUNTY WASTEWATER TRANSMISSION AUTHORITY STATEMENT OF REVENUES, EXPENSES AND

CHANGES IN NET POSITION for the year ended September 30, 2014

Operating revenues: Charges for services

Operating expenses: Personal services Maintenance Contractual services Depreciation Amortization Other

Total operating expenses

Operating income

Non-operating revenues (expenses): Interest income Miscellaneous revenue Loss on disposal of equipment Loss on investments Interest expense Fiscal agent fee

Total non-operating revenues (expenses)

Decrease in net position

Net position, beginning of year

Net position, end of year


10

( ( ( (

$ 93,035 242,322 265,633 892,802

3,398 42,082

8,705 155

185,158) 220)

336,354) 1 158)

$ 1,824,531

1,539,272

285,259

( 514030)

( 228,771)

21,442,054

$21 213,283


STATEMENT OF CASH FLOWS for the year ended September 30, 2014

Cash flows from operating activities: Receipts from customers Payments to suppliers Payments to employees Penalties collected from other governments

Net cash provided by operating activities

Cash flows from capital and related financing activities: Additions to property and equipment Principal paid on bonds Interest paid on debt Fiscal agent fees paid

Net cash used in capital and related financing activities

Cash flows from investing activities: Proceeds from maturities of investments Investment income

Net cash provided by investing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Classified as: Current assets:

Cash Cash equivalents -restricted

Noncurrent assets: Cash equivalents - restricted

(Continued) See accompanying notes.

11

( (

( ( ( (

(

(

$ 1,522,883 619,108)

92,908) 155

811,022

655,038) 690,000) 343,441)

1,15 8)

1,689,637)

1,879 8 485

10 364

868,251)

8,674,891

$ 7,806,640

249,291 1,841,392

5,715,957 $ 7 806,640


STATEMENT OF CASH FLOWS- Continued for the year ended September 30, 2014

Reconciliation of operating income to net cash provided by operating activities: Operating income

Adjustments not affecting cash: Depreciation Amortization

Change in assets and liabilities: Decrease in due from other governments Increase in prepaid expenses Increase in accounts payable Increase in accrued salaries and compensated absences Decrease in accrued payroll taxes Decrease in contracts payable Decrease in due to other governmental units, operating portion

Total adjustments Net cash provided by operating activities

Non-cash investing capital and related financing activities

Capital assets funded by contracts payable amounted to $47,097.


12

$ 285,259

892,802 3,398

131,456 ( 276)

1,880 4,587

( 4,460) ( 70,675) ( 432,949)

525,763 $ 811,022

1. Organization:


NOTES TO THE FINANCIAL STATEMENTS

The South Seminole and North Orange County Wastewater Transmission Authority (the Authority) was formed in October 1978 by Legislative Act of the State of Florida to construct and operate a wastewater transmission line to be the prime source of conveyance of wastewater collected in the service area of its five customers (Seminole County and the Cities of Winter Park, Casselberry, Maitland and Winter Springs) to the Iron Bridge Regional Treatment Plant owned by the City of Orlando.

Each of the Authority's customers is bound, through uniform interlocal agreements, to pay its pro-rata share of the Authority's operation and maintenance expenses and annual bond debt service requirements. All of the Authority's program revenues (charges for services) come from four of its five customers.

These financial statements consist only of the Authority's operations; there are no component units.

2. Summary of Significant Accounting Policies:

Basis of Presentation - The Authority is accounted for as a proprietary type enterprise fund. Enterprise funds are used to account for activities that are financed and operated in a manner similar to private business enterprises and is mandatory in the following situations: 1) the activity is financed with debt that is secured solely by a pledge of the net revenues from fees and charges of the activity, 2) laws or regulations require that all costs of providing services, including capital costs, be recovered from fees and charges, or 3) fees and charges are designed to recover the costs of the activity, including capital costs.

Basis of Accounting - These financial statements are prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles. Under the accrual basis of accounting, revenues are recognized when earned; expenses are recognized when incurred. The assets, liabilities, and net position of the Authority are reported in a self-balancing set of accounts, which include restricted and unrestricted resources, representing funds available for support of the Authority's operations.

Cash and Cash Equivalents - For purposes of the statement of cash flows, the Authority considers all highly liquid investments (including restricted assets) with maturity of three months or less when purchased to be cash equivalents. The Authority's cash equivalents included in restricted assets and the depreciation reserve (see notes 4 and 5) consist of funds invested with the State of Florida Board of Administration Local Government Surplus Funds Trust Fund Investment Pool (SBA) and money market funds collateralized by U.S. Government obligations, with the fair value equal to the carrying value. The Authority's bank deposits are held by qualified state depositories that, under state law, are required to be collateralized by U.S. government obligations held by the various financial institutions.

Operating Revenues and Expenses - The Authority's operating revenues and expenses consist of revenues earned and expenses incurred relating to the operation and maintenance of its system, including administrative expenses and depreciation of capital assets. All other revenues and expenses are reported as non-operating revenues and expenses.

13



2. Summary of Significant Accounting Policies - Continued:

Capital Assets - Capital assets are stated at cost to the Authority when purchased or constructed and at fair value at time of acquisition when donated. The significant portion of capital assets is comprised of infrastructure assets, such as sewer pipes and lines. Expenditures for capital asset additions and improvements with a cost of $500 or more are capitalized. Expenditures for maintenance and repairs are charged to operating expenses.

Provisions for depreciation are made using the straight-line method, based upon the estimated useful lives of the assets, which range as follows:

Assets Buildings Building improvements Furniture, fixtures, and equipment System facilities

Years 40 10 5-7

5-50

Amortization of Bond Discount - The discount associated with the issuance of the Authority's Sewer System Revenue Bonds, Series 2004, has been capitalized, as a reduction of bonds payable, and is being amortized over the life of the related debt.

Estimates - The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

3. Cash and Cash Equivalents:

Cash and cash equivalents are carried at cost. Demand deposits and money market accounts are insured by federal depository insurance up to $250,000 of the aggregate account balances. Amounts in excess of $250,000 are fully insured by U.S. Government securities held in the Public Deposit Security Trust Fund (Pool) maintained and monitored by the Treasurer of the State of Florida. The Pool provides for additional assessments to members of the pool to insure that there will be no loss of public funds. At September 30, 2014, the carrying amount of the Authority's demand deposits was $2,809,927, and the respective bank balances totaled $2,812,273.

14

4. Restricted Assets:



Cash equivalents and investments included in restricted assets, current and noncurrent, at September 30, 2014 consist ofthe following:

Account Infiltration and Inflow Rehabilitation Fund Debt Service Reserve 2012 Bond Project Fund Interest Principal Renewal and Replacement Depreciation Reserve

Carrying Value

$ 909,294 576,494

1,651,342 168,214 705,000 352,064

3,194,941 $7.557.349

Fair Value

$ 909,294 576,494

1,651,342 168,214 705,000 352,064

3,194,941 $7.557.349

The funds above are invested in demand deposits ($909,294), money market accounts ($3,468,291), and SBA Florida PRIME ($3,179,764).

These amounts are reflected in the Statement of Net Position as follows:

Current assets Noncurrent assets

$1,841,392 5,715,957

$7.557.349

The bond covenants permit the Authority to invest in obligations of the U.S. Government or other agencies or instrumentalities of the United States. Further, the Authority may invest in commercial paper, any general obligation of any state or political subdivision with a rating in one of the two highest rating categories by a nationally recognized bond rating agency, certificates of deposits with a Federal Reserve System member bank, units of participation in Local Government Surplus Funds Trust Funds or any other investment permitted under applicable Florida and United States law and/or approved by the insurer in writing. The Authority's policy with respect to concentrations of credit risk states "Assets shall be diversified to control the risk of loss resulting from over concentration of assets in specific maturities, issuer, and security issues." The Authority invests primarily in the SBA and money market accounts.

The SBA established two different pools (Florida PRIME and Fund B) whereby participants own a share of the respective pools and not the underlying securities.

The Florida PRIME (formerly known as Pool or Fund A) meets the requirements of and is classified as a "2a-7 like" pool. The SBA is not a registrant with, nor regulated by, the Securities and Exchange Commission or any other regulatory agency; however, the Florida PRIME has adopted operating procedures consistent with the requirements for a 2a-7 like pool and the fair value of the position in the pool is equal to the value of the pool's shares. Such investments are stated at amortized cost in the accompanying financial statements. The Florida PRIME is rated by Standard and Poors and is currently rated AAAm. The weighted average days to maturity (W AM) at September 3 0, 2014 is 3 9 days. Next interest rate reset dates are used in the calculation of the WAM.

15



4. Restricted Assets- Continued:

Fund B did not meet the requirements of a 2a-7 like pool, and in prior years the SBA provided a Fair Value factor (i.e. total net asset value of Fund B divided by total participant balances of Fund B). The Authority's position was determined by multiplying its Fund B account balance by the Fair Value factor to determine the fair value of its investment in Fund B. Fund B was not rated by any nationally recognized statistical rating agency.

Neither the Florida PRIME nor Fund B participated in a securities lending program in the year ended September 30, 2014, nor were they exposed to any foreign currency risk. The SBA provides separate financial statements for the Florida PRIME and Fund B (unaudited) as of and for the period ending June 30. It does not issue financial statements as of and for the period ending September 30.

As of September 5, 2014, the SBA transferred from Fund B to the Florida Prime the final portion of the remaining principal to all fund participants. Thus, on September 30, 2014 the Authority had all SBA funds invested in the Florida PRIME with no liquidity restrictions. The current year change resulted in a realized loss of $220, which is reported in the Statement of Revenues, Expenses and Changes in Net Position.

The Infiltration and Inflow Rehabilitation Fund Account was established by the Authority in 1988 for the collection of excess flow penalties from customers that exceeded their daily committed flow allocation. An amount equal to the excess flow penalty is recorded in an account called "due to other governmental units" when the funds are collected. The funds are returned to the customer from whom they were collected after the customer has completed infiltration and inflow rehabilitation services to correct the excess flow.

5. Depreciation Reserve Account:

The Depreciation Reserve Account was originally established by the Board of Directors to replace fully depreciated assets. The account is funded by a depreciation rate component which is authorized in the interlocal agreements and the Revenue Bond Series 2004 resolution and excess charges for service after all restricted accounts have been fully funded as required by the bond resolution. The bond resolutions specify that this account may be used for the purpose of paying extraordinary and nonrecurring costs for removal and transfer of used and useable capital facilities caused by governmental requirements or directives. Funds may also be used for paying the costs of extensions, enlargements or additions to, or the replacement of capital assets of the system and emergency repairs thereto. In addition, if no other funds are available, funds may be used to pay for operation/maintenance expenses on a non-recurring basis caused by unforeseen circumstances.

16



5. Depreciation Reserve Account- Continued:

Activity in the Depreciation Reserve Account for the year ended September 30, 2014 is as follows:

Balance at October 1, 2013 Additions:

Interest income Deposits from entities Transfer from other accounts

Deductions: Payments for costs of extensions of capital assets Change in allowance for unrealized gain

Balance at September 30,2014

6. Capital Assets:

Capital assets are summarized as follows:

Beginning balance Additions

Capital Assets, Not Depreciated: Land $ 174,832 $ Construction in progress 795 092 580 717 Total capital assets, not being depreciated 969 924 580,717

Capital Assets, Being Depreciated: Building and improvements 65,169 17,922 System facilities 32,972,818 101,120 Furniture, fixtures, and equipment 15,682 2 376

Total capital assets, being depreciated 33,053,669 121.418

Less Accumulated Depreciation For: Building and improvements ( 50,203) ( 2,494) System facilities ( 10,104,437) ( 889,740) Furniture, fixtures, and equipment ( 15 404) ( 568) Total accumulated depreciation ( 10,170,044) ( 892,802) Total capital assets, being depreciated, net 22,883,625 ( 771,384)

Total Capital Assets, net $23,853 542 ($ 120,661)

17

Dispositions/ Transfers Adjustments

$ $ ( 1,110,219)

1,110,219)

1,110,219 ( 698,218)

1,110,219 698,218)

513,060

513,060

( 185,158)

$ ($ 185,158)

$3,451,286

5,283 328,222

92,010

( 681,803) ( 57) $3.194.941

Ending balance

$ 174,832 265,590

440 422

83,091 33,485,939

18 058

33,587,088

( 52,697) ( 10,481,117) ( 15 972) ( 10,549,786)

23,037,302

$23,477124

7. Long-Term Debt:



A summary of changes in long-term debt is as follows:

Beginning Ending balance Additions Reductions balance

Series 2004 bonds $7,115,000 $ ($205,000) $6,910,000 Less: Unamortized discount ( 71,072) 3,398 ( 67,674)

Series 2012 bonds 2,500,000 ( 485,000) 2,015,000 $2,543 228 $ ($686,602) $8,857,326

Due within one year $210,000

495,000 $705,000

The Authority issued one series of bonds during the fiscal year ended September 30, 2004 for the purpose of financing major capital improvements. The $8,515,000 Authority Sewer System Revenue Bonds, Series 2004, dated September 8, 2004, are due on October 1 of each year through 2034, with interest from 2.5% to 4.75% payable semi-annually on April 1 and October 1. These bonds are collateralized by a pledge of the net revenues derived by the Authority from the operations of the sewer system and amounts on deposit in certain funds and accounts.

The Authority issued one series of bonds during the fiscal year ended September 30, 2012 for the purpose of financing a major capital improvement. The $2,500,000 Authority Sewer System Revenue Bonds, Series 2012, dated August 29, 2012, are due on October 1 of each year beginning 2013 through 2017, with interest of 1.39% payable semi-annually on April 1 and October. These bonds are collateralized by a pledge of the net revenues derived by the Authority from the operations of the sewer system, and are classified as Additional Parity Obligations.

Annual debt service requirements to maturity for the sewer system revenue series 2004 bonds are as follows:

Year ending Segtember 30, Princigal Interest Total Interest rate

2015 $ 210,000 $ 304,482 $ 514,482 3.75% 2016 220,000 296,420 516,420 3.75% 2017 230,000 287,982 517,982 3.75% 2018 235,000 279,117 514,117 3.88% 2019 245,000 269,664 514,664 4.00%

2020-2024 1,385,000 1,182,439 2,567,439 4.10-4.45% 2025-2029 1,725,000 835,475 2,560,475 4.50-4.63% 2030-2034 2,165,000 383,672 2,548,672 4.63-4.75%

2035 495.000 11 756 506,756 4.75% $6,910 000 $3 851,Q01 $10 161,Q01

Annual debt service requirements maturity for the sewer system revenue series 2012 bonds are as follows:

Year ending Segtember 30,

2015 2016 2017 2018

Princigal $ 495,000

500,000 505,000 515,000

$2,015,000

Interest $ 24,568

17,653 10,669 3 579

$ 56,469

18

Total $ 519,568

517,653 515,669 518,579

$2 071 462

Interest rate 1.39% 1.39% 1.39% 1.39%



7. Long-Term Debt- Continued

The resolution authorizing the Series 2004 bonds established the following restricted accounts. The purpose of the accounts in order of priority of monthly revenue transfers is as follows:

A. Revenue Fund

B. Debt Service Fund

1. Interest Account

2. Parity Contract Obligation Account

3. Principal Account

4. Redemption Account

C. Reserve Fund

D. Subordinated Debt Service Fund

E. Renewal and Replacement Fund

F. Project Fund

G. Depreciation Reserve Fund

H. Surplus Fund

Deposit gross revenues of the Authority's system.

Shall maintain the Principal Account, the Interest Account, the Parity Contract Obligation Account and the Redemption Account as follows:

Deposit 116 of the interest income becoming due on the next semi-annual interest payment.

Deposit 116 of the parity contract obligation due on the next semi- annual interest payment.

Deposit 1112 of the principal due on the next maturity date for the bonds.

Deposit an amount sufficient to pay the next due amortization.

Deposit amount necessary to bring the account balance equal to the maximum amount of principal and interest becoming due in any ensuing fiscal year.

Deposit an amount to meet current principal, interest, mandatory redemption and parity contract obligations, if any.

Deposit 1112 of 5% of the gross revenues received during the immediately preceding year until the balance is equal to $300,000.

Deposit remaining funds to be used for paying project costs.

Deposit an amount as shall be determined by the annual budget ofthe Authority.

Deposit excess Revenue Fund moneys after all above payments have been made.

The $2,500,000 Authority Sewer System Revenue Bonds, Series 2012 have no reserve fund requirements. All bond proceeds are to be deposited in a Project Fund. When all moneys are expended pursuant to the Master Resolution, the Project Fund will be closed. Bond proceeds of $1,651,342 were in the Fund at September 30, 2014.

19

8. Retirement:



Florida Retirement System

In prior years, the Authority had one full-time employee who participated in the Florida Retirement System (FRS), a multiple employer cost sharing public employee retirement system, administered by the Florida Department of Administration. That employee retired in April 2012 and the Authority no longer makes contributions to the FRS. The FRS was created by the Florida Legislature and is available to governmental units within Florida.

The FRS provides vesting after six years of creditable service. Members are eligible for normal retirement after vesting (6 years or more creditable service for regular members). Early retirement may be taken anytime, but there is a five percent benefit reduction for each year prior to normal retirement age (less than 30 years service or 62 years of age for regular members).

Benefits are computed on the basis of age, average final compensation and service credit. Members are also eligible for in-line-of-duty or regular disability benefits if permanently disabled and unable to work.

Article X, Section 14 of the State Constitution and Part VII, Chapter 112, Florida Statutes provide the authority to establish and amend the contributory obligations. Effective July 1, 2011, Plan participants contribute 3% oftheir gross compensation.

The Authority's contributions to the FRS for the last three years (which were equal to the required contributions) were as follows:

Year ended Contributions Contribution SeQtember 30, amount rate

2014 $ 5.44%/NA 2013 4,388 5.44%/NA 2012 5,052 5.44%/8.18%

The most recent actuarial report was prepared as of July 1, 2014. Section 121.031(3) ofthe Florida Statutes requires that an actuarial review of the FRS be performed annually. The conclusions of the review are included in the annual report of the FRS.

The Florida Retirement System issues a financial report that includes financial statements and other relevant financial and statistical information. That report may be obtained from the State of Florida, Division of Retirement, 2639 N. Monroe Street, Tallahassee, Florida 32399 or by calling (850) 488-2879.

Defined Contribution Plan

The Authority also set up a Defined Contribution Plan under Internal Revenue Code Section 40l(a) with the Florida Municipal Pension Trust Fund. This plan is pursuant to the Florida Retirement System Opt-out for all new employees hired on or after January 1, 1996. One employee participated in this plan during the year. Contributions for the year ended September 30, 2014 were $6,231.

20



9. Deferred Compensation Plan:

In prior years, the Authority had one full-time employee who participated in a deferred compensation plan that was created in accordance with Internal Revenue Code Section 457. That employee retired in April2012 and the Authority no longer makes contributions to the FRS.

Funds are held in trust by a third party administrator; thus the assets and related liabilities are not reflected in these financial statements.

lO.Commitments and Contingencies:

The Authority 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 Authority carries commercial insurance. There have been no significant reductions in insurance coverage from the prior year. No settlements have exceeded the Authority's insurance coverage for each of the past three years.

In the normal course of business, the Authority has commitments and claims. The Authority does not believe that any liability that may result from these matters would have a material effect on its financial position.

ll.Construction Commitments:

The Authority has active construction projects as of September 30, 2014. The projects include replacing or relocating sewer lines, rehabilitation of pumping stations, as well as design work and engineering studies for future line replacement and pumping station rehabilitation. At year end, the Authority's commitments with contractors are as follows:

Construction projects

12.Subsequent Events:

Spent to date

$ 265.591

Remaining commitment

$5.634.893

Management has evaluated events and transactions for potential recognition or disclosure through February 17, 2015, the date on which the financial statements were available to be issued.

13.Implementation of New Accounting Standard:

The Authority implemented GASB Standard No. 70, Accounting and Financial Reporting for Nonexchange Financial Guarantees. This pronouncement provides guidance in situations where a state or local government extends or receives a nonexchange financial guarantee. This implementation had no impact on any accounting transaction or disclosure requirement in these financial statements.

21


22

STATISTICAL SECTION

The Statistical Schedules differ from other financial presentations because they generally disclose more than one fiscal year and may present non-accounting data such as social and economic data and financial trends of the Authority.

TABLE Financial Trends

These schedules contain information to help the reader understand how the Authority's financial performance and well-being have changed over time.

I Net Position by Component

II Changes in Net Position

Debt Capacity

These schedules present iriformation to help the reader assess the affordability of the Authority's current levels of outstanding debt and the government's ability to issue additional debt in the future.

III Debt Service Requirements and Long-term Debt

Operating Information

These schedules contain service and infrastructure data to help the reader understand how the iriformation in the Authority's financial report relates to the services the Authority provides and the activities it performs.

IV Percentage of Committed Capacity of Member Entities

V Percentage of Iron Bridge Facility Committed Capacity

VI Annual Flow -Millions of Gallons Transmitted to Iron Bridge Facility

Demographic and Economic Information

These schedules offer demographic and economic indicators to help the reader understand the environment within which the Authority's financial activities take place.

VII Demographic and Economic Statistics

VIII Principal Employers

IX Miscellaneous Statistics

24

25

26

27

28

29

30

31

32

Except where noted, the information is derived from the Authority's comprehensive financial reports for the relevant year.

23

N .j:::..

Net Position: Net investment in captial assets Restricted for debt service and renewal and

replacement reserves Restricted for capital improvements Unrestricted, restated*

Total net position*

$

$

2014

16,224,644 $

928,559

4 060,080

21,213,283 $

TABLE I


NET POSITION BY COMPONENT LAST TEN FISCAL YEARS

2013 2012 2011 2010

15,888,467 $ 16,497,402 $ 15,609,724 $ 15,797,046 $

928,704 833,585 734,413 635,193 91,981 91,675 95,990 261,559

4,532,902 3,967,726 4,405,006 4,072,425

21,442,054 $- 21]90,388 $ 20,845,133 $ 20,766,223 $

*Balances restated in 2005 to 2013 for implementation ofGASB Statementes #63 and #65, for restatement related to bond issuance costs.

2009 2008 2007 2006 2005

15,850,313 $ 15,826,472 $ 13,634,710 $ 11,425,511 $ 12,682,384

535,602 432,906 685,473 664,717 650,650 960,362 1,415,734 3,639,730 6,650,616 4,280,121

3,397,066 3,044,325 3,224,037 2,328,455 3,883,918

20,743,343 $ 20,719,437 $ 21,183,950 $ 21,069,299 $ 21,497,073

TABLE II


CHANGES IN NET POSITION LAST TEN FISCAL YEARS

2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 Revenues:

Charges for service $ 1,824,531 $ 1,890,790 $ 1,995,139 $ 1,947,580 1,872,170 $ 1,849,947 $ 1,591,259 $ 1,576,384 $ 1,471,200 $ 1,566,769

Operation & maintenance expense, restated* (646,470) (696,940) (564,309) (664,167) (602,064) (677,752) (655,390) (754,942) (651,675) (564,182)

Income before depreciation* 1,178,061 1,193,850 1,430,830 1,283,413 1,270,106 1,172,195 935,869 821,442 819,525 1,002,587

Depreciation (892,802) (833,011) (818,936) (825,532) (831,654) (783,006) (707,461) (680,611) (422,489) (410,303)

Operating income* ~5,259 360,839 611,894 457,881 438,452 389,189 228,408 -~1~40,831 397,036 592,284

N VI

Non-operating Revenue (expenses): Investment income 8,705 12,798 11,613 9,860 10,879 30,404 169,239 493,279 547,147 360,754

Miscellaneous income 155 1,883 609 55 837 7,344 5,128 151,683 11,495 10,215

Net increase (decrease) in

fair value of investments (220) 405 886 554 1,608 (3,232) 29,914

EPA Grant 234,710 250,290

Loss on disposal of equipment (185,158) (207,988) (2,837) (60,050) (93,330) (59,121) (521,903) (320,813) (1,209,610) (23,097)

Interest expense (336,354) (350,601) (325, 765) (328,851) (334,864) (340,039) (344,414) (348,664) (241,551) (236,410)

Fiscal agent fee (1,158) (380) (1,435) (539) (702) (639) __ (2!1) __ (1,665) (2,521) (2,726)

Total non-operating

revenue or (expense) (514,030) (309,173) (66,639) (378,971) (415,572) (365,283) (692,921) (26,180) (895,040) 138,650

Increase (decrease) in net position before capital contributions* (228,771) 51,666 545,255 78,910 22,880 23,906 (464,513) 114,651 (498,004) 730,934

Contributed capital 70,230 279,378

Change in net position*, restated $ (228,771) $ 51,666 $ 545,255 $ 78,910 $ 22,880 $ 23,906 $ (464,513) $ 114,651 $ (427,774) $ 1,010,312

*Activity restated in 2005 to 2013 for implementation of GASB statement #63 and #65 for restatement to bond issuance costs and related amortization

FISCAL

YEAR

ENDED

2014 $ 2013 2012 2011 2010 2009 2008 2007 2006 2005

2014 $ 2013

2012 2011 2010 2009 2008 2007 2006 2005

TABLE III


SCHEDULE OF DEBT SERVICE REQUIREMENTS AND LONG-TERM DEBT FOR LAST TEN FISCAL YEARS

NET

REVENUE

AVAILABLE

GROSS OPERATING FOR DEBT SERVICE REQUIREMENTS

REVENUES (I) EXPENSES DEBTSVC PRINCIPAL INTEREST TOTAL

1,833,171 $ 646,470 $ I, 186,701 $ 690,000 $ 343,515 $ 1,033,515 1,905,876 696,940 1,208,936 195,000 339,728 534,728 2,008,247 546,411 1,461,836 190,000 325,765 515,765 1,958,049 673,024 1,285,025 185,000 331,857 516,857 1,885,494 610,920 1,274,574 180,000 337,451 517,451 1,887,695 686,609 1,201,086 175,000 342,227 517,227 1, 765,626 664,247 1,101,379 170,000 346,539 516,539 2,077,046 763,799 1,313,247 165,000 350,726 515,726 2,029,842 660,531 1,369,311 140,000 354,539 494,539 1,967,652 589,539 1,378,113 140,000 379,051 519,051

UNAMORTIZED NET RATIO

BONDS BOND BONDS PER

PAYABLE DISCOUNT OUTSTANDING CAPITA

8,925,000 $ (67,674) $ 8,857,326 $ 16 9,615,000 (71,072) 9,543,928 18

9,810,000 (74,470) 9,735,530 18 7,500,000 (77,868) 7,422,132 14 7,685,000 (81,266) 7,603,734 15 7,865,000 (84,664) 7,780,336 15 8,040,000 (88,062) 7,951,938 15 8,210,000 (91,460) 8,118,540 15 8,375,000 (94,858) 8,280,142 16 8,515,000 (98,255) 8,416,745 17

Debt service coverage is for the Authority's Sewer System Revenue Bonds, Series 2004 only for years 2005 to 2013.

COVERAGE

1.15 2.26 2.83 2.49 2.46 2.32 2.13 2.55 2.77 2.66

No debt service requirements existed for the Authority's Sewer System Revenue Bonds Series 2012 in FlY September 30, 2012 or September 30, 2013.

(I) Includes Charges for Service, Interest earnings, Miscellaneous revenue, and Gain (loss) on investments.

Source: South Seminole & North Orange County Wastewater Transmission Authority

26

FISCAL

YEAR

ENDED

2014 2013 2012 2011 2010 2009 2008 2007 2006 2005

TABLE IV


PERCENTAGE OF COMMITTED CAP A CITY OF MEMBER ENTITIES

LAST TEN FISCAL YEARS

CITY OF CITY OF

CITY OF CITY OF WINTER SEMINOLE WINTER

MAITLAND CASSELBERRY PARK COUNTY SPRINGS

8.332% 25.714% 45.156% 20.798% 8.332% 25.714% 45.156% 20.798% 8.332% 25.714% 45.156% 20.798% 8.332% 25.714% 45.156% 20.798% 8.332% 25.714% 45.156% 20.798% 8.332% 25.714% 45.156% 20.798% 8.332% 25.714% 45.156% 20.798% 8.332% 25.714% 45.156% 20.798% 8.332% 25.714% 45.156% 20.798% 8.332% 25.714% 45.156% 20.798%

Note: The City of Winter Springs is a Member Entity with no committed capacity.

27

TOTAL

CAPACITY

SSNOCWTA

100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

TABLEV


PERCENTAGE OF IRON BRIDGE FACILITY COMMITTED CAPACITY

COMMITTED FACILITY CAPACITY (2) =

COMMITTED CUSTOMER FLOW (1)

TOTAL COMMITTED CUSTOMER FLOW

RESERVE FUTURE ALLOCATION

COMMITTED SYSTEM CAPACITY (3) =

SSNOCWTA

CUSTOMER

MAITLAND

CASSELBERRY

WINTER PARK

SEMINOLE COUNTY

WINTER SPRINGS

SUB-TOTAL

NON-CUSTOMER

ORLANDO

ORANGE COUNTY

RESERVE

TOTAL

COMMITTED

CUSTOMER

FLOW-MGD (1)

1.1000

3.3950

5.9620

2.7460

13.2030

20.6715

0.3750

5.7505

40MGD

COMMITTED CUSTOMER FLOW (1)

SUBTOTAL COMMITTED CUSTOMER FLOW

COMMITTED

FACILITY

CAPACITY (2)

3.212%

9.913%

17.408%

8.018%

38.551%

60.336%

1.093%

100.000%

COMMITTED

SYSTEM

CAPACITY (3)

8.332%

25.714%

45.156%

20.798%

100.000%

(1) SSNOCWT A has Committed Customer Flow of 13.203 Million Gallons Daily (MGD).

(2) Based on current Committed Customer Flow, SSNOCWTA has Committed Facility Capacity of 38.551% with Iron Bridge Facility.

(3) Based on current Committed Customer Flow, SSNOCWTA has Committed System Capacity of 100% with Iron Bridge Facility.


28

YEAR CITY OF

ENDED MAITLAND

2014 301.558 2013 239.388 2012 253.900 2011 247.856 2010 243.337 2009 260.361 2008 276.144 2007 285.430 2006 287.990 2005 292.701

TABLE VI


ANNUAL FLOW- MILLIONS OF GALLONS TRANSMITTED TO IRON BRIDGE FACILITY

FOR LAST TEN FISCAL YEARS

CITY OF CITY OF SEMINOLE CITY OF

CASSELBERRY WINTER PARK COUNTY WINTER SPRINGS * 775.755 1400.024 958.118 843.012 1559.681 940.835 667.119 1425.108 978.791 693.719 1403.690 946.456

774.484 1563.264 963.306 784.846 1731.287 1038.244

775.914 1706.942 1083.943 723.430 1535.555 1100.110 857.750 1797.260 1133.330 935.711 2089.556 1018.169

* The City of Winter Springs is a Member Entity with no committed capacity.

Source: City of Orlando Environmental Control Section-Environmental Services Department

29

TOTAL

FLOW

3435.455 3582.916 3324.918 3291.721 3544.391 3814.738 3842.943 3644.525 4076.330 4336.137

w 0

2014 2013 SEMINOLE COUNTY

POPULATION (I) 437,086 427,718 PERSONAL INCOME (in thousands) (2) $ 13,022,977 $ 12,879,112 PER CAPITA INCOME (2) $ 29,795 $ 24,59I UNEMPLOYMENT RATE (3) 5.7% 9.2%

CITY OF CASSELBERRY

POPULATION (I) 27,527 24,778 PERSONAL INCOME (in thousands) (2) $ I,227,I63 $ I,328,4I9

PER CAPITA INCOME (2) $ 44,580 $ 44,807 UNEMPLOYMENT RATE (3) 5.I% 8.24%

CITY OF MAITLAND

POPULATION (I) I6,4II I6,337 PERSONAL INCOME (in thousands) (2) $ 66I,462 $ 78I,3I I

PER CAPITA INCOME (2) $ 40,306 $ 41,852 UNEMPLOYMENT RATE (3) 4.8% 6.8%

CITY OF WINTER PARK

POPULATION (I) 29,073 28,398 PERSONAL INCOME (in thousands) (1) $ I,293,865 $ I ,747,458

PER CAPITA INCOME (I) $ 44,504 $ 73,697 UNEMPLOYMENT RATE (2) 4.8% 6.5%

CITY OF WINTER SPRINGS

POPULATION (I) 38,871 33,540

PERSONAL INCOME (in thousands) (I) $ I,084,989 $ I,19I,279

PER CAPITA INCOME (I) $ 32,033 $ 30,37I UNEMPLOYMENT RATE (I) 5.4% 6.3%

DEMOGRAPHIC AND ECONOMIC STATISTICS FOR THE LAST TEN FISCAL YEARS

2012 2011 2010

425,527 429,169 420,100 12,436,027 13,638,991 13,048,306

29,225 3I,780 3I,060 7.9% 9.0% I0.4%

26,387 26,24I 24,899 I,2I7,548 $ I,I39,883 I,OI8,393

46,I42 $ 43,439 4I,277 7.9% 9.8% II.8%

I5,9I I I5,75I I6,786 772,622 $ 743,069 849,439 48,559 $ 47,I76 50,604

8.5% 9.5% I 1.3%

27,728 27,727 28,434 I,722,768 $ I,7I5,109 I,485,193

62,131 $ 6I,857 52,233 6.9% 7.9% 9.1%

33,599 33,282 34,I49 I,183,558 $ 1,161,675 I,047,589

35,226 $ 34,904 30,677 6.8% 9.5% Il.8%

Sources: Data provided by representatives of each member entity. Their sources are listed below.

SemmcJeCwn';· Per9/30/13 CAFR c,,,, orc155 •• Jhem• Per 9/30/13 CAFR

I. Metro Orlando Economic Development Commi'f'fFJII (Est) J_ US Census of Population &Housing

Semmole County Go\emment Umvcrslt) ofFL, Bureau of Economic and Bustsness Research

2. Metro Orlando Economtc Development Commusion "Ronda Sta!JSltcal Abstract~

Semmole County Government 2. US Dept of Commerce, Bureau ofEconomieAnalysJs,

Personal Income \Vas calculated by mulllplymg Per Regional Economic lnforrnahon Systems. The actual per Capita

CapttalncomctimcsPopulatJOn Personal Income is for Scmmolc County. The per Capita ligures

3 My flonda, Employment, Labor Market Stallshcs aremultiphedbythcpopulaltlontodeterrninetheTotal

wcbs1t www m)llonda.eom Personal income.

Metro Orlando Economic Development CommiSSIOn J Flonda Agency for Worklbrce InnovatiOn, Labor Market StatiStiCS

Local Area Unemployment Statistics Program, in cooperation "lth

the US Dept of Labor. Bureau of Labor StatistiCS

TABLE VII 2009 2008 2007 2006 2005

416,482 415,876 420,667 411,744 403,361 12,587,752 12,569,436 I I,39I,242 I5,29I,349 I4,5I4,542

30,224 30,224 27,079 37,I38 35,984 10.6% 7.0% 4.0% 2.6% 4.7%

24,672 25,I82 24,945 24,930 24,899 996,5I8 98I,III 945,I94 944,625 9I5,97I

40,39I 38,96I 37,89I 37,89I 36,787 II.l% 6.3% 4.0% 3.3% 3.I%

I6,I50 I6,209 I6,IOO I6,055 I6,9I9 689,912 706,939 707,289 673,539 692,765

42,719 43,6I4 43,931 4I,952 40,946 11.8% 5.9% 4.0% 2.9% 3.5%

28,581 28,921 28,486 28,620 27,868 1,276,713 I,l74,135 I,396,099 1,386,610 N/A

44,670 40,598 49,010 48,449 N/A 8.5% 5.0% 2.9% 2.6% 3.0%!

34,340 34,639 34,899 34,62I 33,321 I,053,I 73 1,028,95 I 97I,623 979,428 N!A

30,669 29,705 27,841 28,290 N/A 9.7% 5.0% 3.6% 3.2% 3.8%

Ci'vofM-utt10 J Pcr9/30/13 CJ.f'R Cj11· of Wimer Part- Per 9/30/13 CAFR

I CityofMa1tland Commumt) Development Dept I. lniOrmahon provided by Metro Orlando EDC

2 Per capital income is from the US. Ccmus and the Commumty Redevelopment Agency

BureaumforrnatJOnforMaltlandadjusledb)the 2 Unemployment rate from State ofFionda,

South Urban Wage Earners and Clerical Workers Dcpnrtment of Labor and Employment Seeunty,

CPI published b~ US Bureau of Labor Statistics BureauofLaborMarketlntbrrnaLJOn

3. State of Flonda, Agency for Worklbrce (http 'WV.W.laborrnarkchnlbcom)Statistlcal

Innovation. Orlando MSA annual averages ProgramsLAUS-Loca[ Area Unemplo)mcnt

Stahstlcs·Gct deta1kd Stattsh~ Month!~ Data

Tablepcrycar(meludeseJI\estlmate)

Table VIII


PRINCIPAL EMPLOYERS CENTRAL FLORIDA

Current Year and Nine Years Ago

2014 2005 Percentage of Percentage of

Employer Employees Rank Total Employment Employees Rank Total Employment

Walt Disney World Resort 74,000 6.5% 53,800 5.8%

Orange County Public Schools 22,347 2 1.9% 22,807 2 2.5%

State of Florida Government 19,800 3 1.7% 17,200 4 1.9%

Universal Orlando 19,000 4 1.7% 12,500 6 1.4%

Adventist Health System (Florida Hospital) 18,668 5 1.6% 19,270 3 2.2%

Orlando International Airport 18,000 6 1.6%

Publix Supermarkets 17,521 7 1.5% 15,606 5 1.7%

Federal Government 12,200 8 1.1% 10,800 7 1.2%

Orange County Government 9,858 9 0.9% 7,426 8 0.8%

Darden Restaurants, Inc. 6,419 10 0.6% 7361 9 0.8%

Source: Orlando Sentina1, Orlando Business Journal and the Metro Orlando Economic Development Commission

31

TABLE IX


MISCELLANEOUS STATISTICAL DATA

Date of Establishment

Form of Government

Area Served

Transmission Force Mains

Number of Pump Stations

Daily Permitted Capacity in Million Gallons

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Number of Metering Points

29 31 31 33 33 33 33 33 32 32

October 1, 1978

Special Governmental District

68 square miles (2005-2014)

32 miles (2005-2014)

19 (2005-20 14)

13.203 (2005-20 14)

Number of Employees

2 2 2 2 2 2 2 2


32


THOMAS F. REILLY. CPA


60 I NORTH FERN CREEK

SUITE 200

ORLANDO. FLORIDA 32803

(407> 894·6803

<407> 896·3044 FAX

->.MERIC-'.~ INST!Tl!TE OF

CERTIFIED PL'BLIC .->.CCOUNTANTS

FLORIDA ll'STITLITE OF

CERTIFIED Pl'BLIC ->.CCOUNTANTS

->.SSOCH TION OF

CERTIFIED FRAUD EXAMINERS

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 AUJ)/TING STANDARDS

Board of Directors South Seminole and North Orange County

Wastewater Transmission Authority

We have audited, 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, the financial statements of South Seminole and North Orange County Wastewater Transmission Authority (the Authority) as of and for the year ended September 30, 2014, and the related notes to the financial statements, which collectively comprise the Authority's basic financial statements as listed in the table of contents and have issued our report thereon dated February 17,2015.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered the Authority's internal control over financial repotting (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 Authority's internal control. Accordingly, we do not express an opinion on the effectiveness of the Authority's internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the Authority'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. We consider the deficiency described in the accompanying auditors' comments and recommendations to be a significant deficiency in internal control over financial reporting. See comment No. 2014-01 on page 36. We also believe that the significant deficiency described above is a material weakness.

Our consideration of intemal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial rep01ting that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

33

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Authority's 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.

Response to the Findings

The Authority's response to our findings identified in our audit is described on page 36 of this report. The Authority's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it.

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 Authority'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 Authority's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

February 17,2015 Orlando, Florida

34


THOMAS F. REILLY, CPA


601 NORTH FERN CREEK

SUITE 200

ORLANDO. FLORIDA 32803

1407) 894·6803

1407l 896·3044 FAX

AMERICAN INSTITUTE OF

C~.RTIFIED PUBLIC ACCOUNTANTS

FLORIDA INSTITUTE OF


ASSOCIATION OF

CERTIFIED FR.\UD EXAMINERS

INDEPENDENT ACCOUNTANTS' REPORT ON COMPLIANCE WITH FLORIDA STATUTES 218.415 -INVESTMENTS OF PUBLIC FUNDS

Board of Directors South Seminole and North Orange County

Wastewater Transmission Authority

We have examined the South Seminole and North Orange County Wastewater Transmission Authority's (the Authority) compliance with Section 218.415, Florida Statutes during the fiscal year ended September 30, 2014. Management is responsible for the Authority's compliance with those requirements. Our responsibility is to express an opinion on the Authority's compliance based on our examination.

Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the Authority's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Authority's compliance with specified requirements.

In our opinion, the South Seminole and Nmth Orange County Wastewater Transmission Authority complied, in all material respects, with the aforementioned requirements for the fiscal year ended September 30,2014.

This rep01t is intended solely for the information and use of the Florida Auditor General, the Board of Directors of the South Seminole and Nmth Orange County Wastewater Transmission Authority, and management, and is not intended to be and should not be used by anyone other than these specified parties.

Orlando, Florida February 17, 2015

35

AUDITORS' COMMENTS AND RECOMMENDATIONS (MANAGEMENT LETTER)

2014-01 Lack of Segregation of Duties

The size of the Authority's accounting and administrative staff precludes certain internal controls that would be preferred if the office staff were large enough to provide optimum segregation of duties. However, management is aware of this situation and should continue to exercise a high level of management review and supervision. Also, the Board of Directors should remain involved in the financial affairs of the Authority to provide oversight and independent review functions.

OTHER MATTERS

In accordance with the Rules of the Auditor General of the State of Florida, the following is noted:

1. The financial report filed with the Department of Financial Services pursuant to Florida Statute Section 218.32 is in agreement with the annual financial audit report.

2. Based on our audit procedures performed, no indications came to our attention that caused us to believe that the Authority met any of the conditions described in Florida Statutes Section 218 .503(1 ).

3. The Authority was formed in October 1978 by Legislative Act 78-617 of the State of Florida.

4. The auditors applied financial condition assessment procedures per Auditor General Rule 10.556(8). It is management's responsibility to monitor the Authority'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.

STATUS OF PRIOR YEAR COMMENTS

2013-01 See Comment No. 2014-01 in current year, which has been reported in the past three audit reports.

36

February 17,2015

Mr. David W. Martin, CPA Auditor General Local Government Audits/342 Claude Pepper Building, Room 401 Ill West Madison Street Tallahassee, FL 32399-1450

Subject: Management response to Auditors' comments and recommendations on Fiscal Year 2013-2014 Financial Statements

Dear Mr. Martin:

In accordance with the rules of the Auditor General, I am submitting my written response to the auditors' comments and recommendations on the Fiscal Year 2013-2014 Financial Statements, which were received on February 17, 2015 as follows:

2014-01: We will continue to provide management review and supervision as well as oversight by the Authority Board regarding optimum segregation of duties due to the limited number (one employee) of accounting and administrative staff.

The Executive Director reviews all bank statements on line and performs a review for any unusual activity. The Board of Directors reviews and ratifies monthly financial statements (which consist of actual results and comparisons to budget) at regular Board of Directors meetings. A review of specific financial activities that took place that month are also deliberated.

Sincerely,

Ed Gil de Rubio Executive Director

Cc: Tom Reilly, Holland and Reilly CPA

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