Islamorada, Village of Islands rpts/2015...ISLAMORADA, VILLAGE OF ISLANDS, FLORIDA COMPREHENSIVE...

Islamorada, Village of Islands 86800 Overseas Highway, Islamorada, FL 33036

Comprehensive Annual Financial Report

Fiscal Year Ended September 30, 2015

Front Cover Image Courtesy of Geo Toth,

Islamorada Fire Rescue Captain/Paramedic

ISLAMORADA, VILLAGE OF ISLANDS, FLORIDA

COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED

SEPTEMBER 30, 2015

TABLE OF CONTENTS

Page INTRODUCTORY SECTION: Letter of Transmittal i-iv Organizational Chart v List of Principal Officials vi FINANCIAL SECTION: Independent Auditor’s Report 1-3 Management’s Discussion and Analysis 4-14 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position 15 Statement of Activities 16 Fund Financial Statements: Balance Sheet – Governmental Funds 17 Reconciliation of the Balance Sheet – Governmental Funds to the Statement of Net Position 18 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds 19 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 20 Statement of Net Position – Proprietary Funds 21 Statement of Revenues, Expenses and Changes in Net Position – Proprietary Funds 22 Statement of Cash Flows – Proprietary Funds 23 Notes to the Financial Statements 24-59 Required Supplementary Information: Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual General Fund 60-61 Solid Waste Fund 62 Notes to Required Supplementary Information 63 Schedule of Funding Progress – Other Post-Employment Benefits 64 Schedule of Village’s Proportionate Share of the Net Pension Liability - FRS 65 Schedule of Contributions - FRS 66 Schedule of Village’s Proportionate Share of the Net Pension Liability - HIS 67 Schedule of Contributions - HIS 68



SEPTEMBER 30, 2015

TABLE OF CONTENTS

Page FINANCIAL SECTION (CONTINUED): Other Supplementary Information: Combining and Individual Fund Financial Statements and Schedules: Combining Balance Sheet – Nonmajor Governmental Funds 69 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Governmental Funds 70 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual Transportation Fund 71 Affordable Housing Fund 72 Debt Service Fund 73 Capital Projects Fund 74 STATISTICAL SECTION: Financial Trends: Net Position by Component 75 Changes in Net Position 76-77 Fund Balances of Governmental Funds 78 Changes in Fund Balances of Governmental Funds 79 Revenue Capacity: Net Assessed Value and Estimated Actual Value of Taxable Property 80 Property Tax Rates – Direct and Overlapping Governments 81 Principal Property Taxpayers 82 Property Tax Levies and Collections 83 Debt Capacity: Ratio of Outstanding Debt by Type 84 Ratios of General Bonded Debt Outstanding 85 Legal Debt Margin Information 86 Pledged Revenue Coverage 87 Direct and Overlapping Governmental Activities Debt 88 Demographic and Economic Information: Demographic and Economic Statistics 89 Principal Employers 90



SEPTEMBER 30, 2015

TABLE OF CONTENTS

Page STATISTICAL SECTION (CONTINUED):

Operating Information: Full-Time Equivalent Village Government Employees by Function 91 Operating Indicators by Function/Program 92 Capital Assets Statistics by Function/Program 93 OTHER REPORTS OF INDEPENDENT AUDITORS: 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 94-95 Independent Auditor’s Report on Compliance for Each Major State Project and on Internal Control Over Compliance 96-97 Schedule of Expenditures of State Financial Assistance 98 Schedule of Findings and Questioned Costs 99-100 Independent Auditor’s Management Letter 101-102 Independent Auditor’s Report – Investment Compliance 103

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INTRODUCTORY SECTION

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LIST OF PRINCIPAL OFFICIALS

SEPTEMBER 30, 2015

TITLE NAME Mayor Mike Forster Vice Mayor Deb Gillis Council Member Dennis Ward Council Member Jim Mooney Council Member Chris Sante Village Manager Maria T. Aguilar Finance Director Ariana S. Lawson Village Clerk Kelly Toth Village Attorney Roget Bryan Eileen Rodriguez

FINANCIAL SECTION

1401 MANATEE AVENUE WEST, SUITE 1200 • BRADENTON, FLORIDA 34205 • 941-747-4483 • 855-891-0070 • FAX 941-747-6035 MEMBERS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • WWW.MJCPA.COM

INDEPENDENT AUDITOR’S REPORT

Village Council and Village Manager Islamorada, Village of Islands, Florida Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Islamorada, Village of Islands, Florida, (the “Village”), as of and for the year ended September 30, 2015, and the related notes to the financial statements, which collectively comprise the Village’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. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

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Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Village, as of September 30, 2015, and the respective changes in financial position and, where applicable, cash flows thereof, for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 14, the Village implemented Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions—an amendment of GASB Statement No. 27, as well as Statement No. 71, Pension Transition for Contributions made Subsequent to the Measurement Date – an amendment of GASB Statement No. 68, as of October 1, 2014. These standards significantly changed the accounting for the Village’s net pension liability and the related disclosures. Our opinions are not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and required supplementary information as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Village’s basic financial statements. The combining fund financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. The Schedule of Expenditures of Federal and State Awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations and by Section 215.97, Florida Statutes, and is also not a required part of the basic financial statements.

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The combining fund financial statements and Schedule of Expenditures of Federal and State Awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining fund financial statements and the Schedule of Expenditures of Federal and State Awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated July 20, 2016, on our consideration of the Village's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, 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 Village’s internal control over financial reporting and compliance.

Bradenton, Florida July 20, 2016


MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2015

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As management of Islamorada, Village of Islands (the “Village”), we offer readers this narrative overview and analysis of the financial activities of the Village for the fiscal years ended September 30, 2015 and 2014. We encourage readers to consider this information in conjunction with the additional information that we have furnished in our letter of transmittal, which can be found on pages i-iv of this report, as well as the Village’s financial statements. Fund-based financial reporting and government-wide reporting are not viewed as being in conflict; however, they are not comparable. A significant portion of this analysis focuses on the changes in the government-wide statements, while still providing information on the Village’s fund-based comparative changes. FINANCIAL HIGHLIGHTS

• The Village’s total net position at year end September 30, 2015, was $131,922,098. The total net position for governmental activities was $32,383,058, and the total net position for business-type activities was $95,539,040.

• Unrestricted net position at September 30, 2015, available to meet the Village’s ongoing obligations, totaled $2,286,802. Unrestricted net assets for governmental activities were $3,440,777, while unrestricted net assets for business-type activities were ($1,153,975).

• At September 30, 2015, the Village’s governmental fund statement shows a combined ending fund balance of $8,757,345, a decrease of $131,088 in comparison with the prior year fund balance.

• In the General Fund, the increase from the prior year fund balance was $1,201,456 due to decreased operating expenditures and increased operating revenues.

OVERVIEW OF THE FINANCIAL STATEMENTS

This discussion and analysis is intended to serve as an introduction to the Village’s basic financial statements. The Village’s basic financial statements include:

• Government-wide financial statements • Fund financial statements • Notes to the financial statements

This report also contains other supplementary information in addition to the financial statements. GOVERNMENT-WIDE FINANCIAL STATEMENTS

The government-wide financial statements are designed to provide readers with a broad overview of the financial position of the Village and are similar to private-sector financial statements. The government-wide financial statements include a Statement of Net Position and a Statement of



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Activities. These statements appear on pages 15 and 16 of this report. The Statement of Net Position presents information on all of the Village’s assets and liabilities, with the difference between the two reported as net position. Changes in net position over time may indicate an improving or deteriorating financial position. Net position is shown in three categories: 1) net investment in capital assets, 2) restricted, and 3) unrestricted. The Statement of Activities presents information showing how the Village’s net position changed during the fiscal year ending September 30, 2015. It provides a breakdown of revenues and expenses by functions. All changes in net position are reported as soon as the underlying event which contributes to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only affect cash flows in future fiscal periods. Examples of such items include revenues earned and expenses incurred but not yet paid, as well as unused compensated absences, all of which will produce changes in cash in a future fiscal period. Both statements attempt to distinguish functions of the Village that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges for services (business-type activities). The governmental activities of the Village include general government, public safety, physical environment, and culture and recreation. The business-type activities of the Village include the Plantation Yacht Harbor Marina, the Wastewater Utility, and the Stormwater Utility. 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. Islamorada, Village of Islands, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the Village can be divided into two general categories: governmental funds and proprietary funds. GOVERNMENTAL FUNDS Governmental funds are used to account for essentially the same functions as those reported in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the year. The focus of governmental funds is narrower than that of the government-wide financial statements. Therefore, it can be useful to compare the information presented for the governmental funds with similar information presented for governmental activities in the government-wide statements. By doing so, readers may better understand the long-term impact of the government’s near term financing decisions. Reconciliations have been provided as a link between the governmental fund statements and the government-wide statements to assist in this comparison. Page 18 provides a reconciliation



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of the balance sheet of governmental funds to the statement of net position. Page 20 provides a reconciliation of the statement of revenues, expenditures and changes in fund balances of governmental funds to the statement of activities. The Village maintains six governmental funds. Those governmental funds that are individually presented as major funds in the Village’s governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances include the General Fund, Solid Waste Fund, Debt Services Fund and Capital Projects Fund. Data from the other three governmental funds (Transportation Fund, Affordable Housing Fund and the CDBG Fund) are presented in a single column titled “Other Non-major Governmental Funds.” The basic governmental fund financial statements can be found on pages 17 through 20 of this report PROPRIETARY FUNDS The Village maintains one type of proprietary fund. Enterprise funds are used to report those functions presented as business-type activities in the government-wide financial statements. The Village uses enterprise funds to account for the Plantation Yacht Harbor Marina, the Wastewater Utility and the Stormwater Utility. The proprietary fund financial statements provide separate information for the Marina and the Wastewater Utility, both of which are considered to be major funds of the Village, as well as the Stormwater Utility, which is a non-major fund. The basic proprietary fund financial statements appear on pages 21 through 23 of this report. 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 both the government-wide and governmental fund financial statements. The notes to financial statements can be found on pages 24 through 59 of this report. OTHER INFORMATION In addition to the basic financial statements and the accompanying notes, this report also presents certain required supplementary information concerning the Village’s budgetary comparison schedules for its General Fund and Solid Waste Fund. The required supplementary information can be found on pages 60 through 68 of this report. Combining statements in connection with non-major governmental funds can be found on pages 69 and 70 of this report. Additional information about the Village can be found in the Statistical Section beginning on page 75 of this report.



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GOVERNMENT WIDE FINANCIAL ANALYSIS The following table provides a summary of the Village’s total net position as of September 30, 2015:

Islamorada, Village of Islands, Florida Total Net Position

2015 2014 (Restated) 2015 2014 2015 2014

Current and other assets 10,414,648$ 10,190,970$ 44,579,671$ 38,884,287$ 54,994,319$ 49,075,257$ Capital assets 36,751,714 37,412,499 156,521,332 124,760,844 193,273,046 162,173,343

Total assets 47,166,362 47,603,469 201,101,003 163,645,131 248,267,365 211,248,600

Deferred outflows of resources 1,431,552 171,643 85,599 125,104 1,517,151 296,747

Current liabilit ies 1,087,471 833,758 7,816,976 9,509,674 8,904,447 10,343,432 Noncurrent liabilit ies 13,739,749 13,614,082 93,830,586 62,254,899 107,570,335 75,868,981

Total liabilit ies 14,827,220 14,447,840 101,647,562 71,764,573 116,474,782 86,212,413

Deferred inflows of resources 1,387,636 - - - 1,387,636 -

Net investment in capital assets 26,168,847 26,946,172 62,887,417 62,679,462 89,056,264 89,625,634 Restricted 2,773,434 4,375,977 37,805,598 37,694,565 40,579,032 42,070,542 Unrestricted 3,440,777 2,005,123 (1,153,975) (8,368,365) 2,286,802 (6,363,242)

Total net position 32,383,058$ 33,327,272$ 99,539,040$ 92,005,662$ 131,922,098$ 125,332,934$

TotalBusiness-type ActivitiesGovernmental Activities

Net Position As noted earlier, net position can serve, over time, as a useful indicator of a government’s financial position. For the Village, assets exceeded liabilities by $131,922,098 at the close of fiscal year 2014-2015. The Village’s total net position increased $6,589,164 from the previous fiscal year. The largest portion of the Village’s net position (68%) is its investment in capital assets (e.g. land, buildings, infrastructure improvements and equipment) less any outstanding debt related to their acquisition. The Village uses these capital assets to provide services and recreational opportunities to its citizens; consequently, these assets are not available for future spending. Although the Village’s investment in capital assets is reported net of related debt, it is important to note that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. It should also be noted that another portion of the Village’s net position (31%) is restricted for payment of debt service obligations related to the wastewater capital project in future years. The remaining component of net position is unrestricted in the amount of $2,286,802. Unrestricted net position may be used to meet the Village’s ongoing obligations to its citizens and creditors. The Village’s unrestricted net position reflects a negative balance pending reimbursements not yet received of wastewater project costs from the Florida Department of Environmental Protection’s State Revolving Fund loan program. At the end of the fiscal year ended September 30, 2015, the Village is able to report positive balances in two of three categories of net position for the government as a whole. For governmental activities,



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all three categories of net position have positive balances; for the Village’s business-type activities, two of three categories of net position have positive balances. The negative unrestricted net position category for business-type activity is a result of pending reimbursements not yet received of wastewater project costs from the Florida Department of Environmental Protection’s State Revolving Fund loan program. Changes in Net Position Governmental activities and business-type activities increased the Village’s net position by $6,589,164 from the previous fiscal year. The relevant revenue and expense categories and their effect on net position are summarized in the table below. The information presented in this table will be used in the subsequent discussion of governmental and business-type activities:

Islamorada, Village of Islands, Florida Changes in Net Position

2015 2014 2015 2014 2015 2014

RevenuesProgram Revenues

Charges for services 4,284,247$ 3,515,353$ 2,767,365$ 2,432,415$ 7,051,612$ 5,947,768$ Operating grants 106,584 160,056 - - 106,584 160,056 Capital grants 507,018 293,240 6,809,610 15,868,777 7,316,628 16,162,017

General RevenuesProperty taxes 6,560,162 6,230,467 - - 6,560,162 6,230,467 Other taxes 2,906,659 2,651,962 - - 2,906,659 2,651,962 Franchise fees 527,810 471,477 - - 527,810 471,477 Intergovernmental - unrestricted 1,551,370 1,367,501 - - 1,551,370 1,367,501 Unrestricted interest 11,323 12,284 1,777,747 1,884,958 1,789,070 1,897,242 Miscellaneous 10,816 - 459,404 135,502 470,220 135,502

Total revenues 16,465,989 14,702,340 11,814,126 20,321,652 28,280,115 35,023,992

ExpensesGeneral government 4,820,298 3,269,118 - - 4,820,298 3,269,118 Public safety 5,728,730 6,109,484 - - 5,728,730 6,109,484 Physical environment 2,349,359 2,212,768 - - 2,349,359 2,212,768 T ransportation 527,242 421,427 - - 527,242 421,427 Economic environment 27,190 665 - - 27,190 665 Culture and recreation 1,920,655 1,758,477 - - 1,920,655 1,758,477 Interest on long-term debt 344,031 376,598 - - 344,031 376,598 Plantation Yacht Harbor Marina - - 1,215,792 1,235,811 1,215,792 1,235,811 Wastewater utility - - 4,707,772 2,815,724 4,707,772 2,815,724 Stormwater utility - - 49,882 56,931 49,882 56,931

Total expenses 15,717,505 14,148,537 5,973,446 4,108,466 21,690,951 18,257,003 Increase (decrease) in net position

before transfers 748,484 553,803 5,840,680 16,213,186 6,589,164 16,766,989 T ransfers (1,692,698) (4,845,164) 1,692,698 4,845,164 - - Change in net position (944,214) (4,291,361) 7,533,378 21,058,350 6,589,164 16,766,989 Net position, beginning, as restated 33,327,272 38,762,198 92,005,662 70,947,312 125,332,934 109,709,510 Restatement - (1,143,565) - - - (1,143,565) Net position, end of year 32,383,058$ 33,327,272$ 99,539,040$ 92,005,662$ 131,922,098$ 125,332,934$

TotalGovernmental Activities Business-type Activities



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Governmental Activities Governmental activities during the fiscal year decreased the Village’s net position by $944,214 from the prior year as restated. The increase for fiscal year 2014-2015 was a result of expenditures in excess of revenues. The Village Council approved uses of fund balance in the fiscal year 2014-2015 budget of governmental funds in order to bring down unrestricted fund balance amounts. The largest single ongoing revenue source for the Village’s governmental activities is property taxes at $6,560,162, which represents 40% of total governmental revenues. Another significant source of revenue for governmental activities is charges for services, including assessments for solid waste services, fees for building permits and planning review, emergency medical service fees and charges for park admission and recreation programs. These charges for services total $4,284,247 or 26% of total revenues for governmental activities. The single biggest expenditure category among governmental activities for the fiscal year ending September 30, 2015 was public safety. This function totals $5,728,730 or 36% of total expenditures for governmental activities. Public safety expenditures include the cost of the Village’s Fire Rescue, Building Services and Code Enforcement Departments as well as contract costs paid to the Monroe County Sheriff's Office to provide Village police services. The next largest category of expenditures is general government, totaling $4,820,298 or 31%. This expenditure category includes the operating budget for the Village Council, Village Manager, Village Attorney, Village Clerk, Planning and Development Services, Finance and Administration, and IT and Communications Departments. Business-Type Activities The Village’s business-type activities are enterprise funds for the Plantation Yacht Harbor Marina, the Wastewater Utility and the Stormwater Utility. Business-type activities during the fiscal year increased the Village’s net position by $7,533,378. This was primarily due to the recognition of a new long-term non-ad valorem assessment balance as revenue in the Village’s Wastewater Utility. The Plantation Yacht Harbor Marina recovers its operating costs through charges for services and goods. The Wastewater Utility enterprise fund accounts for the operations of the Village’s wastewater treatment facility in North Plantation Key (supported by user charges), as well as capital investments and debt service associated with construction of additional wastewater facilities in the remaining service areas. The Stormwater Utility was created for the purpose of segregating stormwater assessment revenue, capital costs for stormwater projects and maintenance costs for stormwater infrastructure from the activities of the general government. Capital grants and contributions represent 68% of the total business-type revenues. The Wastewater Utility recognized $6,809,610 in grant funding and non-ad valorem assessment revenue in FY2014-2015. The Utility also recorded $1,265,174 in revenue from charges for services.



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FINANCIAL ANALYSIS OF THE VILLAGE’S FUNDS

As noted above, the Village uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds The focus of the Village’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Village’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. In FY 2011, the Village adopted the GASB 54 fund balance policy thereby changing the classifications of fund balance to one of five types: non-spendable, restricted, committed, assigned and unassigned. At the end of FY 2015, the Village’s governmental fund statement reported a combined ending fund balance of $8,757,345, a decrease of $131,088 in comparison with the prior year. Of this amount, $4,124,805 or 47% constitutes unassigned fund balance, which is available for spending at the government’s discretion and is the result of revenue sources upon which no restrictions or conditions for use have been placed. Of the total fund balances, 0.27% or $24,010 is assigned to purchase orders or uses as directed by the Village Council that will be carried over to the next fiscal year. 29% or $2,504,429 is primarily committed to capital improvement projects funded by infrastructure sales tax; 18% or $1,589,954 is committed to expenditures to be funded by revenue sources established by Village Council action; 3% or $234,210 is restricted for use on expenditures funded by revenue sources established by agencies external to the Village – primarily local option sales tax restricted for use on transportation-related expenditures; and 0.62% or $54,239 is in a non-spendable form as it relates to prepayments and deposits. The General Fund is the chief operating fund of the Village. At the end of the current year, the unassigned fund balance in the General Fund was $4,124,805. Under GASB 54, the General Fund is the only fund that can have an unassigned fund balance. In the prior year the total unassigned fund balance in the General Fund was $2,763,824, while total fund balance was $3,401,392. The current year’s unassigned fund balance is $1,360,981 more than the prior year’s unassigned fund balance. The Village Council has established a policy that targets an unassigned fund balance of 25% of projected General Fund expenditures for each fiscal year. When compared to the adopted fiscal year 2014-2015 budget, the unassigned fund balance exceeds the 25% target. Adjustments to the unassigned fund balance through use of fund balance in future budget years may be made or the Council may adopt a revised fund balance policy. The Capital Project Fund is used to account for revenues and expenses associated with major governmental capital and infrastructure projects and capital asset purchases. In the prior year the total fund balance in the Capital Project Fund was $3,223,654. The ending fund balance of the Capital Project Fund at September 30, 2015, is $3,308,581, an increase of $84,927.



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The Capital Projects Fund reflects a transfer out of $1,834,662. The Village’s receipts from a discretionary sales tax for infrastructure capital projects are transferred to other funds, including the debt service fund, the marina fund and the wastewater utility fund, to cover debt service previously incurred for capital project funding or to provide direct funding for capital projects as directed by the Village Council. The Debt Service Fund had a total fund balance of $0 at year end. While the Village’s Debt Service Fund is used to account for the payment of principal, interest and expenditures on long-term governmental debt during each fiscal year, it relies on transfers from other funds as the revenue source. These transfers equal the debt service expense requirements each fiscal year, and no fund balance is intended to be retained in the Debt Service Fund. Proprietary Funds Proprietary fund statements provide the same information as in the business-type activities column of the government-wide statements, but in greater detail. Unrestricted net position at the end of the year totaled ($81,341) for the Plantation Yacht Harbor Marina, ($1,262,194) for the Wastewater Utility and $189,560 for the Stormwater Utility -- a total unrestricted assets balance of ($1,153,975) in business-type activities. Marina operations continue to improve since major renovations and rebuilding projects were completed in 2009, and the negative unrestricted fund balance amount is declining. Other factors concerning the finances of the two major proprietary funds have already been addressed in the discussion of the Village’s business-type activities. GENERAL FUND BUDGETARY HIGHLIGHTS Differences between the original FY 2015 general fund budget and the final amended budget resulted in a $142,700 increase to total budgeted general fund expenditures. The total estimated General Fund revenue in the amended budget represents an increase of $122,300 above the original adopted budget. Operating expenditures in the Parks and Recreation Department made up the major portion of budget to actual expenditure variance -- $203,371 over budget. Increased parks and recreation program activity costs were offset by a corresponding increase in program fees. The Notes to the Budgetary Comparison Schedules provide detail on expenditure accounts in the General Fund that experienced budget deficiencies on a line item basis. Journal entries that were made for book purposes after at year-end created some of the deficiencies. The Village did not prepare a re-appropriation budget amendment to minimize budget vs. actual variances within 60 days of fiscal year end as allowed for by Florida Statutes. Ultimately total general fund revenues exceeded expenditures at year end by $1,201,456.



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CAPITAL ASSETS The Village’s financial statements present capital assets in two categories: those assets subject to depreciation (such as buildings, infrastructure and equipment) and those not subject to depreciation (such as land and construction in progress). The Village’s investment in capital assets for its governmental and business-type activities as of September 30, 2015, was $193,273,046 net of accumulated depreciation. Of this total, $36,751,714 relates to governmental activities, while $156,521,332 relates to business-type activities. In total, net assets increased by $31,099,703. The increase is attributable mainly to the additional construction in process for the wastewater project in the remaining service areas. In FY 2015, over $30 million was added to construction in process in the Wastewater Utility Enterprise Fund. During the FY 2012 budget process, the Village Council directed that capital project expenditures be kept to a minimum in preparation for the wastewater utility project in the remaining service areas, and this policy remained in place for FY 2015. Major capital asset events during the current fiscal year included the following:

Total capital assets in governmental activities decreased $680,785 due primarily to recording of depreciation and disposal of assets.

Total capital assets in the business-type activities increased by $31,760,488. The Village’s investment in construction in progress in the business-type activities increased by $32,063,814. This increase was offset by depreciation expense recorded on depreciable assets in the amount of $1,011,153.

Capital assets held by the Village at the end of the current and prior year are summarized as follows: Islamorada, Village of Islands, Florida Capital Assets, Net of Accumulated Depreciation

2015 2014 2015 2014 2015 2014

Land 23,534,144$ 23,534,144$ 1,061,948$ 1,061,948$ 24,596,092$ 24,596,092$ Construction in progress 37,259 61,528 131,807,021 99,743,207 131,844,280 99,804,735 Land improvements 111,653 122,139 54,450 69,999 166,103 192,138 Buildings and improvements 7,040,967 7,327,021 697,034 728,318 7,738,001 8,055,339 Improvements other than buildings 2,244,826 2,490,728 2,022,449 2,072,977 4,267,275 4,563,705 Infrastructure 2,637,731 2,892,496 19,784,896 19,891,653 22,422,627 22,784,149 Equipment and furniture 702,160 473,424 1,093,534 1,192,742 1,795,694 1,666,166 Vehicles 442,974 511,019 - - 442,974 511,019

Total 36,751,714$ 37,412,499$ 156,521,332$ 124,760,844$ 193,273,046$ 162,173,343$

TotalGovernmental Activit ies Business-type Activit ies

Additional information on the Village’s capital assets can be found in Note 5 on pages 37 and 38 of this report.



13

LONG-TERM DEBT At the end of the current fiscal year, the Village had total long-term debt outstanding in the amount of $107,104,335. The Village’s debt represents bonds secured solely by specified revenue sources (i.e., revenue bonds, special assessment bonds), as well as compensated absences payable and OPEB liability. The Village has no general obligation bonds. This debt is comprised of $13,739,749 for governmental activities and $93,364,586 for business-type activities, mainly related to the wastewater capital project. During the year, the Village increased its long-term debt for governmental activities by $1,269,232, and increased the business-type activities long-term debt by $31,109,687. The long-term debt balance increase in governmental activities was mainly due to borrowing for a new fire truck. The increase in debt balances business-type activities was due to new borrowing for the wastewater capital project. More detailed information about the Village's long-term liabilities is presented in Note 7 on pages 40 through 44 of this report. ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES At September 30, 2015, the General Fund total fund balance was $4,602,848. This is $1,769,636 higher than the projected General Fund total fund balance of $2,833,212 included in the adopted FY 2014-2015 budget. Additionally, the FY 2014-2015 budget included a use of fund balance in the amount of $562,780. Instead the year resulted in an addition to fund balance of nearly $1.2 million. As mentioned previously, the Village Council has targeted 20% of budgeted operating expenditures as a prudent fund balance for unanticipated events. When compared to the adopted FY 2014-2015 budget expenditures in the amount of $10,987,300, the General Fund’s unassigned fund balance at September 30, 2015, of $4,124,805 is approximately 36%. As a result, the Village Council may make adjustments in future fiscal years to bring this fund balance back to the targeted 20%. In FY 2012-2013, the Village complied with GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. As a result, the application of this GASB statement must also be considered in targeting unassigned reserves in future budgets. For the fiscal year 2015-2016 budget, the Village Council, in compliance with State statutes, set a millage rate of 2.6459 mills, which was .113 mills higher than the previous fiscal year and 11.54% higher than the rolled-back rate. During fiscal year 2015-2016, the Village continues the construction of a Village-wide wastewater collection and treatment system project in the remaining service areas as its primary capital project, and the project is expected to be completed by the end of the fiscal year.



14

REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of Islamorada, Village of Islands, Florida’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Director, Islamorada, Village of Islands, 86800 Overseas Highway, Islamorada, FL 33036.

BASIC FINANCIAL STATEMENTS

ISLAMORADA, VILLAGE OF ISLANDS, FLORIDASTATEMENT OF NET POSITION

SEPTEMBER 30, 2015

Governmental Business-typeActivities Activities Total

AssetsCash and equity in pooled cash 9,041,824$ 1,887,825$ 10,929,649$ Receivables, net 743,183 244,248 987,431 Special assessment receivables, net - 1,096,041 1,096,041 Internal balances 82,180 (82,180) - Due from other governments 484,772 9,525,978 10,010,750 Other current assets 62,689 164,637 227,326 Special assessment receivables, net, noncurrent - 31,743,122 31,743,122 Capital assets not being depreciated

Land 23,534,144 1,061,948 24,596,092 Construction in progress 37,259 131,807,021 131,844,280

Capital assets being depreciatedLand improvements 644,665 155,488 800,153 Buildings and improvements 8,917,962 882,631 9,800,593 Improvements other than buildings 5,880,453 2,390,769 8,271,222 Infrastructure 8,501,664 25,713,841 34,215,505 Equipment and furniture 2,397,783 1,824,046 4,221,829 Vehicles 3,124,958 - 3,124,958 Accumulated depreciation (16,287,174) (7,314,412) (23,601,586)

Capital assets, net 36,751,714 156,521,332 193,273,046 Total assets 47,166,362 201,101,003 248,267,365

Deferred Outflows of ResourcesAccumulated decrease in fair value of hedging derivatives 121,950 85,599 207,549 Deferred outflows - pensions 1,309,602 - 1,309,602

Total deferred outflows of resources 1,431,552 85,599 1,517,151

LiabilitiesAccounts payable and accrued liabilities 757,043 3,072,779 3,829,822 Accrued interest payable 120,529 53,431 173,960 Retainage payable - 4,690,766 4,690,766 Unearned revenue 209,899 - 209,899 Noncurrent liabilities

Due within one year 1,465,973 947,488 2,413,461 Due in more than one year 12,273,776 92,883,098 105,156,874

Total liabilities 14,827,220 101,647,562 116,474,782

Deferred Inflows of ResourcesDeferred inflows - pensions 1,387,636 - 1,387,636

Total deferred inflows of resources 1,387,636 - 1,387,636

Net positionNet investment in capital assets 26,168,847 62,887,417 89,056,264 Restricted for

Police training 34,795 - 34,795 Capital projects 2,504,429 - 2,504,429 Transportation 234,210 - 234,210 Debt service - 37,805,598 37,805,598

Unrestricted (deficit) 3,440,777 (1,153,975) 2,286,802 Total net position 32,383,058$ 99,539,040$ 131,922,098$

The accompanying notes to financial statements are an integral part of this statement.

15

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16

ISLAMORADA, VILLAGE OF ISLANDS, FLORIDABALANCE SHEET

GOVERNMENTAL FUNDSSEPTEMBER 30, 2015

Nonmajor TotalSolid Debt Capital Governmental Governmental

General Waste Service Projects Funds FundsAssets

Cash and equity in pooled cash 4,562,290$ 436,339$ -$ 3,080,586$ 962,609$ 9,041,824$ Receivables 743,183 - - - - 743,183 Due from other governments 247,936 995 - 171,114 64,727 484,772 Prepaids 54,129 - - - - 54,129 Deposits 110 - - - - 110 Other current assets 8,450 - - - - 8,450 Advance to other fund - - - 82,180 - 82,180

Total assets 5,616,098$ 437,334$ -$ 3,333,880$ 1,027,336$ 10,414,648$

LiabilitiesAccounts payable 144,956$ 393,454$ -$ 25,299$ 4,000$ 567,709$ Accrued expenditures 172,851 252 - - 11,149 184,252 Other accrued liabilities 955 - - - - 955 Unearned revenue - - - - 209,899 209,899 Deposits 4,127 - - - - 4,127

Total liabilities 322,889 393,706 - 25,299 225,048 966,942

Deferred inflow of resourcesUnavailable revenue 690,361 - - - - 690,361

Fund balancesNonspendable 54,239 - - - - 54,239 Restricted 225,698 - - 2,504,429 234,210 2,964,337 Committed 174,096 43,628 - 804,152 568,078 1,589,954 Assigned 24,010 - - - - 24,010 Unassigned 4,124,805 - - - - 4,124,805

Total fund balances 4,602,848 43,628 - 3,308,581 802,288 8,757,345 Total liabilities, deferred inflows of

resources, and fund balances 5,616,098$ 437,334$ -$ 3,333,880$ 1,027,336$ 10,414,648$


17

ISLAMORADA, VILLAGE OF ISLANDSRECONCILIATION OF THE BALANCE SHEET–

GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITIONSEPTEMBER 30, 2015

Fund Balances–Total Governmental Funds 8,757,345$

Amounts reported for governmental activities in the Statementof Net Position are different because:

Capital assets used in governmental activities are not financialresources and, therefore, are not reported in the funds.

Governmental capital assets 53,038,888$ Accumulated depreciation (16,287,174) 36,751,714

Other long-term assets are not available to pay for current periodexpenditures, and, therefore, are reported as unavailable revenue inthe funds. 690,361

Accrued interest is not a financial use and, therefore, is not reportedin the funds. (120,529)

Noncurrent liabilities, are not due and payable in the currentperiod and, therefore, are not reported in the funds.

Bonds and notes payable (10,306,468) Capital lease payable (276,399) Compensated absences (621,170) Net pension liability, net of related deferred outflows & inflows (2,431,542) Other post-employment benefits payable (60,254) (13,695,833)

Net Position of Governmental Activities 32,383,058$


18

Nonmajor TotalSolid Debt Capital Governmental Governmental

General Waste Service Projects Funds Funds

RevenuesTaxes 6,882,048$ -$ -$ 2,165,932$ 418,841$ 9,466,821$ Permits, fees and assessments 2,084,043 1,546,024 - 255,833 196,402 4,082,302 Intergovernmental 1,541,061 - - - 171,676 1,712,737 Charges for services 791,026 - - - - 791,026 Fines and forfeitures 109,595 - - - - 109,595 Interest 5,708 431 - 3,425 1,759 11,323 Miscellaneous 276,317 - - - 5,052 281,369

Total revenues 11,689,798 1,546,455 - 2,425,190 793,730 16,455,173

ExpendituresCurrent

General government 3,184,477 - - - - 3,184,477 Public safety 5,579,624 - - - - 5,579,624 Physical environment 432,741 1,632,546 - - - 2,065,287 Transportation - - - - 527,242 527,242 Economic environment - - - - 27,190 27,190 Culture/recreation 1,497,931 - - - - 1,497,931

Capital outlay - - - 505,601 - 505,601 Debt service

Principal - - 1,166,094 - - 1,166,094 Interest - - 354,723 - - 354,723

Total expenditures 10,694,773 1,632,546 1,520,817 505,601 554,432 14,908,169

Excess (deficiency) of revenuesover (under) expenditures 995,025 (86,091) (1,520,817) 1,919,589 239,298 1,547,004

Other financing sources (uses)Proceeds from the sale of capital assets 14,606 - - - - 14,606 Transfers in 191,825 2,812 1,520,817 - 125,000 1,840,454 Transfers out - - - (1,834,662) (1,698,490) (3,533,152)

Total other financing sources (uses) 206,431 2,812 1,520,817 (1,834,662) (1,573,490) (1,678,092)

Change in fund balances 1,201,456 (83,279) - 84,927 (1,334,192) (131,088)

Fund balances, beginning of year 3,401,392 126,907 - 3,223,654 2,136,480 8,888,433

Fund balances, end of year 4,602,848$ 43,628$ -$ 3,308,581$ 802,288$ 8,757,345$

ISLAMORADA, VILLAGE OF ISLANDSSTATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCESGOVERNMENTAL FUNDS

FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015


19

ISLAMORADA, VILLAGE OF ISLANDSRECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDSTO THE STATEMENT OF ACTIVITIES


Net Change in Fund Balances–Total Governmental Funds (131,088)$

Amounts reported for governmental activities in the Statementof Activities are different because:

Governmental funds report capital outlays as expenditures.However, in the Statement of Activities, the cost of these assetsis depreciated over their estimated useful lives.

Capital outlay 491,272$ Less current year depreciation (1,148,267) (656,995)

The net effect of various transactions involving capital assets(i.e. sales, trade-ins, and donations) is to decrease net position. (3,790)

Resources in the statement of activities that do not provide current financialresources are not reported as revenues in the funds. 90,361

The issuance of long-term debt provides current financial resources togovernmental funds, while the repayment of the principal of long-termdebt consumes the current financial resources of governmental funds. Neithertransaction, however, has any effect on net position. This is the net effect ofthese differences in the treatment of long-term debt and related items.

Principal repayments 1,166,094 1,166,094

Some expenses reported in the Statement of Activities do notrequire the use of current financial resources and, therefore, arenot reported as expenditures in governmental funds.

Change in accrued interest payable 10,692 Change in compensated absences (129,415) Change in net pension liability (1,287,977) Change in other post-employment benefits (2,096) (1,408,796)

Change in Net Position of Governmental Activities (944,214)$


20

Business-type Activities–Enterprise FundsMajor Funds Nonmajor

Plantation Yacht Wastewater StormwaterHarbor Marina Utility Utility Total

AssetsCurrent assets

Cash and equity in pooled cash -$ 1,609,710$ 278,115$ 1,887,825$ Receivables 21,604 222,644 - 244,248 Special assessments receivable, net - 1,096,041 - 1,096,041 Due from other governments - 9,522,241 3,737 9,525,978 Prepaids 335 14,102 - 14,437 Deposits 200 150,000 - 150,200

Total current assets 22,139 12,614,738 281,852 12,918,729

Noncurrent assetsSpecial assessments receivable, net - 31,743,122 - 31,743,122 Capital assets not being depreciated

Land - 1,061,948 - 1,061,948 Construction in progress - 131,807,021 - 131,807,021

Capital assets being depreciatedLand improvements 32,567 62,008 60,913 155,488 Buildings and improvements 882,631 - - 882,631 Improvements other than buildings 2,390,769 - - 2,390,769 Infrastructure 687,058 24,809,343 217,440 25,713,841 Equipment and furniture 1,807,840 16,206 - 1,824,046 Less Accumulated depreciation (1,470,223) (5,757,748) (86,441) (7,314,412)

Capital assets, net 4,330,642 151,998,778 191,912 156,521,332 Total assets 4,352,781 196,356,638 473,764 201,183,183

Deferred outflow of resourcesAccumulated decrease in fair value of hedging derivatives 85,599 - - 85,599

LiabilitiesCurrent liabilities

Accounts payable 17,341 3,032,357 7,044 3,056,742 Accrued expenses 6,420 9,365 252 16,037 Accrued interest payable 10,910 42,521 - 53,431 Retainage payable - 4,690,766 - 4,690,766 Amounts due within one year

Compensated absences payable 29,894 17,268 1,665 48,827 Bonds and loan payable 420,401 478,260 - 898,661

Total current liabilities 484,966 8,270,537 8,961 8,764,464

Noncurrent liabilitiesAdvances from other funds - - 82,180 82,180 Compensated absences payable 35,345 21,219 947 57,511 Bonds and loans payable 1,242,185 91,493,069 - 92,735,254 Other post-employment benefits payable 3,570 960 204 4,734 Interest rate swap liability 85,599 - - 85,599

Total non-current liabilities 1,366,699 91,515,248 83,331 92,965,278 Total liabilities 1,851,665 99,785,785 92,292 101,729,742

Net positionNet investment in capital assets 2,668,056 60,027,449 191,912 62,887,417 Restricted for

Debt service - 37,805,598 - 37,805,598 Unrestricted (deficit) (81,341) (1,262,194) 189,560 (1,153,975)

Total net position 2,586,715$ 96,570,853$ 381,472$ 99,539,040$

ISLAMORADA, VILLAGE OF ISLANDSSTATEMENT OF NET POSITION

PROPRIETARY FUNDSSEPTEMBER 30, 2015


21



Operating revenuesCharges for services

Utilities -$ 1,265,174$ 195,959$ 1,461,133$ Dock rentals 834,389 - - 834,389 Fuel sales 441,406 - - 441,406 Ramp 30,437 - - 30,437

Miscellaneous 35,322 424,082 - 459,404 Total operating revenues 1,341,554 1,689,256 195,959 3,226,769

Operating expensesPersonal services 291,556 381,838 9,729 683,123 Operating 637,995 3,241,549 25,116 3,904,660 Depreciation 208,985 787,131 15,037 1,011,153

Total operating expenses 1,138,536 4,410,518 49,882 5,598,936

Operating income (loss) 203,018 (2,721,262) 146,077 (2,372,167)

Nonoperating revenues (expenses)Interest revenue - 1,777,533 214 1,777,747 Interest and fiscal charges/amortization expense (75,021) (264,649) - (339,670) (Loss) gain on disposal of capital assets (2,235) (32,605) - (34,840)

Total nonoperating revenues (expenses) (77,256) 1,480,279 214 1,403,237

Income before capital contributions and transfers 125,762 (1,240,983) 146,291 (968,930)

Capital contributionsCapital grants - 5,300,916 - 5,300,916 Capital assessments - 1,508,694 - 1,508,694

Total capital contributions - 6,809,610 - 6,809,610

Transfers in 27,663 1,665,035 - 1,692,698

Changes in net position 153,425 7,233,662 146,291 7,533,378

Net position, beginning of year 2,433,290 89,337,191 235,181 92,005,662

Net position, end of year 2,586,715$ 96,570,853$ 381,472$ 99,539,040$

ISLAMORADA, VILLAGE OF ISLANDSSTATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION

PROPRIETARY FUNDSFOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015


22



Cash flows from operating activitiesCash received from customers 1,345,918$ 1,476,875$ 195,959$ 3,018,752$ Cash paid to suppliers (636,337) (5,890,856) (18,438) (6,545,631) Cash paid to employees (255,728) (344,791) (8,760) (609,279)

Net cash provided (used) by operating activities 453,853 (4,758,772) 168,761 (4,136,158)

Cash flows from noncapital financing activitiesTransfers in 27,663 1,665,035 - 1,692,698

Net cash provided by noncapital financing activities 27,663 1,665,035 - 1,692,698

Cash flows from capital and related financing activitiesPrincipal payments on loans and bonds (403,773) (4,397,573) - (4,801,346) Interest payments on loans and bonds (77,743) (267,694) - (345,437) Proceeds from issuance of debt - 36,353,879 - 36,353,879

Proceeds from capital grants and contributions - 30,449 - 30,449 Acquisition and construction of capital assets - (31,743,488) - (31,743,488)

Net cash used by capital and related financing activities (481,516) (24,427) - (505,943)

Cash flows from investing activitiesInterest received - 1,777,533 214 1,777,747

Net cash provided by investing activities - 1,777,533 214 1,777,747

Net change in cash and cash equivalents - (1,340,631) 168,975 (1,171,656)

Cash and cash equivalents, beginning of year - 2,950,341 109,140 3,059,481 Cash and cash equivalents, end of year -$ 1,609,710$ 278,115$ 1,887,825$

Reconciliation of operating income (loss) to netcash provided (used) by operating activitiesOperating income (loss) 203,018$ (2,721,262)$ 146,077$ (2,372,167)$ Adjustment to reconcile operating income (loss) to

net cash provided (used) by operating activitiesDepreciation 208,985 787,131 15,037 1,011,153

Decrease (increase) in assetsAccounts receivable 4,364 (92,881) - (88,517) Prepaid items (335) 973 - 638

Increase (decrease) in liabilitiesAccounts payable 1,873 (2,650,350) 6,676 (2,641,801) Accrued payroll 1,760 9,365 252 11,377 Unearned revenue - (119,500) - (119,500) Compensated absences payable 34,068 27,682 717 62,467 Other post-employment benefits payable 120 70 2 192

Net cash provided (used) by operating activities 453,853$ (4,758,772)$ 168,761$ (4,136,158)$

Noncash investing, capital and financing activitiesChange in value of interest rate swap 39,505$ -$ -$ 39,505$ Capitalized interest - 1,479,044 - 1,479,044

39,505$ 1,479,044$ -$ 1,518,549$

ISLAMORADA, VILLAGE OF ISLANDSSTATEMENT OF CASH FLOWS

PROPRIETARY FUNDSFOR THE YEAR ENDED SEPTEMBER 30, 2015


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NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015

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Note 1 – Organization and Operations Islamorada, Village of Islands, Florida (the “Village”) was created pursuant to Chapter 97-348, Florida Statutes, as of December 31, 1997, to become operational March 26, 1998. The Village includes four keys: Plantation Key, Windley Key, Upper Matecumbe Key, and Lower Matecumbe Key, within Monroe County, Florida. The Village operates under a Council-Manager form of government and provides or contracts for a wide range of community services including general government; public works; planning, zoning and building; public safety (fire protection, emergency medical services and police services); cultural and recreation (parks maintenance, recreational activities, cultural events, and related facilities); and operation of a marina, a wastewater utility and a stormwater utility. The Village Council (the “Council”) is responsible for legislative and fiscal control of the Village. Note 2 – Summary of Significant Accounting Policies The accounting policies and practices, and the presentation of the financial statements for the Village conform with generally accepted accounting principles as applicable to governmental units in accordance with the Governmental Accounting Standards Board (GASB). The following is a summary of the more significant accounting policies and practices.

A. Reporting Entity: As required by generally accepted accounting principles, these financial statements present the government and its component units, if applicable. Component units are legally separate entities for which the primary government is considered to be financially accountable and for which the nature and significance of their relationship with the primary government are such that exclusion would cause the Village’s financial statements to be misleading or incomplete. A primary government is considered financially accountable if it appoints a voting majority of an organization’s governing body and is able to impose its will on that organization. The primary government may also be financially accountable if an organization is fiscally dependent on the primary government and a financial benefit or burden relationship exists, regardless of the authority of the organization’s governing board. Blended component units, although legally separate entities, are, in substance, part of the primary government’s operations and are included as part of the primary government. Based on the application of the criteria set forth by the Government Accounting Standards Board, management has determined that no component units exist which would require inclusion in this report. Further, management is not aware of any entity which would consider the Village to be a component unit.

B. Government-wide Financial Statements: The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all activities of the Village. 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.



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Note 2 – Summary of Significant Accounting Policies (continued)

The Statement of Activities demonstrates the degree to which program revenues offset the direct expenses of a given function or program. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: (1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function or program, and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or program. Taxes and other items not properly included among program revenues are reported instead as general revenues. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between the government’s wastewater function and various other functions of the government, if applicable. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.

C. Fund Financial Statements: The fund financial statements provide information about the Village’s funds. Separate statements for each fund category – governmental and proprietary funds – are presented. The emphasis on fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. The Village reports the following major governmental funds:

The General Fund is the Village’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Solid Waste Fund accounts for revenues from charges for services and expenditures for collection, disposal and hauling of solid waste. The Debt Service Fund accounts for the accumulation of resources for, and the payment of, general long-term debt principal, interest and related costs. The Capital Projects Fund accounts for revenues from discretionary sales surtax, grants and impact fees for capital improvement projects.



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Note 2 – Summary of Significant Accounting Policies (continued) The Village reports the following major proprietary funds:

The Plantation Yacht Harbor Marina Fund is used to account for marina services provided to the community that are financed and operated in a manner similar to a private business enterprise. The costs of providing services are generally recovered through user charges. The Wastewater Utility Fund is used to account for the design, construction and operation of Village owned wastewater treatment facilities that are financed and operated in a manner similar to a private business enterprise. The costs of providing services are recovered through user charges.

Additionally, the government reports the following nonmajor funds:

Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than major capital projects) requiring separate accounting because of legal or regulatory provisions or administrative action. The Stormwater Utility Fund is used to account for the construction of a Village owned stormwater drainage utility that provides drainage services to the residents of the Village and is operated in a manner similar to a private business enterprise. The costs of providing services will be recovered through user charges in the future.

During the course of operations the government has activity between funds for various purposes. Any residual balances outstanding at year-end are reported as due from/to other funds and advances to/from other funds. While these balances are reported in the fund financial statements, certain eliminations are made in the preparation of the government-wide financial statements. Balances between funds included in governmental activities are eliminated so that only the net amount is included as internal balances in the governmental activities column. Similarly, balances between the funds in business-type activities are eliminated so that only the net amount is included as internal balances in the business-type activities column. Further, certain activity occurs during the year involving transfers of resources between funds. In fund financial statements these amounts are reported at gross amounts as transfers in/out. While reported in fund financial statements, certain eliminations are made in the preparation of the government-wide financial statements. Transfers between the funds included in governmental activities are eliminated so that only the net amount is included as transfers in the governmental activities column. Similarly, balances between the funds included in business-type activities are eliminated so that only the net amount is included as transfers in the business-type activities column.



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Note 2 – Summary of Significant Accounting Policies (continued) D. Measurement Focus and Basis of Accounting:

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the proprietary funds are charges to customers for sales and services. Operating expenses include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses that do not meet this definition are reported as non-operating revenues or expenses. 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. Ad valorem taxes and charges for services are susceptible to accrual when collected in the current year or within 60 days subsequent to year-end, provided that amounts received pertain to billings through the fiscal year. Intergovernmental revenues, which include Federal and state grants, state revenue sharing allotments, local government one-half cent sales tax and county shared revenue, among other sources are recorded in accordance with their legal or contractual requirements if collected in the current period or within 90 days after year-end. Interest income is recorded when earned. Licenses and permits, fines and forfeitures, and miscellaneous revenues are recorded as revenues when received in cash because they are generally not measurable until actually received. Expenditures are generally recognized under the modified accrual basis of accounting when the related liability is incurred. Exceptions to this general rule include principal and interest on general long-term debt, which is recognized when due.

E. Budgetary Information Florida Statutes require that all municipal governments establish budgetary systems and approve balanced annual operating budgets. The Village Council annually adopts an operating budget and appropriates funds for the General, Special Revenue, Capital Project, Debt Service, and Enterprise Funds consistent with generally accepted accounting principles. The procedures for establishing budgetary data are as follows:



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Note 2 – Summary of Significant Accounting Policies (continued) In August of each year, the Village Manager submits a proposed operating budget to the

Council for the fiscal year commencing the following October 1. The operating budget includes proposed appropriations and the means of funding them.

Two public hearings are conducted, usually during the month of September, to obtain taxpayer comments on the proposed budgets for each fund.

Upon completion of the public hearings and before October 1, a final operating budget is legally enacted through the passage of a resolution. Passage of this resolution constitutes appropriation of the amounts specified in the budget as expenditures.

The adopted budget resolution specifies that the initial limitation on expenditures is by department or category total. The total allocated to each department, category (personnel, operating or capital) or line item may be increased or decreased by the Village Manager so long as the modification does not exceed the Village’s total budgeted funds. Whenever a department, category or line item reallocation occurs, the Village Manager must present a resolution to the Village Council for approval amending the budget to reflect such department, category or line item reallocation within thirty days of the date of the reallocation.

Additionally, the adopting budget resolution provides that all outstanding encumbrances (open purchase orders) at the end of the fiscal year shall lapse. Those outstanding encumbrances may be re-appropriated into the next fiscal year budget. The total amount of outstanding encumbrances at year-end are reflected in assigned fund balance of the respective funds. When the year-end outstanding encumbrances are re-appropriated the next fiscal year, a use of fund balance is requested for approval by the Village Council. Florida Statutes provide that the governing body of each municipality may amend the budget at any time within the fiscal year or within 60 days following the end of the fiscal year. Within 60 days of the fiscal year-end, the Village prepares a re-appropriation budget amendment to try to ensure that budget deficiencies at department, category, or line item level are covered. For the year ended September 30, 2015, expenditures exceeded appropriations in several departments of the General Fund as follows:

Village manager/Village clerk (30,189)$ Planning and zoning (4,113) Fire control and EMS (35,390) Public works (621) Culture and recreation (203,371)

Although positive budget variances for revenues and expenditures reported in other departments more than offset these negative budget variances, total expenditures in excess of appropriations is a budgetary violation.



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F. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Fund Balance/Net Position Cash and Cash Equivalents: Cash and cash equivalents are defined as cash on hand, demand deposits and highly liquid investments with original maturities of three months or less from the date of acquisition. Prepaids: Prepayments are recorded as assets when the initial payment is made. Each asset is then charged off against operations in the period benefitted. These amounts are reports as nonspendable in the governmental fund financial statements. Special Assessments: Special assessments, levied pursuant to Florida Statutes, are used to finance wastewater utility capital projects, in combination with grants and other revenue sources. The assessments are levied and imposed on all real estate parcels in the assessment districts upon adoption of a final assessment resolution. Typically, when special assessments are imposed they may be prepaid in a lump sum or spread over a 25-30 year amortization period (with interest and fees) as a non-ad valorem assessment, at the discretion of the affected property owner. During the amortization period, property owners also have the option annually to pay off the remaining principal amount of an assessment and remove it from future tax rolls. Each year, in order to perfect the lien, the Village must adopt an assessment resolution to place the annual non-ad valorem assessments on the current tax roll. Under full accrual accounting, the estimated value of the current wastewater assessment roll levied for the 2015-16 fiscal year (less an allowance for uncollectible amounts and interest and fees which are applicable to fiscal year 2016) is considered a current receivable for fiscal year 2014-15. The remaining unpaid principal of each assessment (less an allowance for uncollectible amounts) is recorded as a noncurrent receivable. Capital Assets: Capital assets, which include land, construction-in-progress, equipment and furniture, vehicles, buildings and building renovation, improvements other than buildings, infrastructure and infrastructure improvements, land improvements, and park improvements, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the Village as assets with an initial, individual cost of more than $750 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. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized.



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Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is reflected in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. During fiscal year 2014-15, $1,479,044 of capitalized interest was recorded. Capital assets are depreciated using the straight-line method over the following estimated useful lives:

YearsEquipment and furniture 5-12Vehicles 6-7Buildings and building renovations 50Infrastructure and infrastructure improvements 10-40Land improvements 10Park improvements 15-50Improvements other than buildings 12

Deferred Outflows/Inflows of Resources: In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The government reports the accumulated decrease in the fair value of the interest rate swap as a deferred outflow. The Village has deferred inflows and deferred outflows related to the recording of changes in its net pension liability. Certain changes in the net pension liability are recognized as pension expense over time instead of all being recognized in the year of occurrence. Experience gains or losses result from periodic studies by the Village’s actuary which adjust the net pension liability for actual experience for certain trend information that was previously assumed, for example the assumed dates of retirement of plan members. These experience gains or losses are recorded as deferred outflows of resources or deferred inflows of resources and are amortized into pension expense over the expected remaining service life of plan members. Changes in actuarial assumptions which adjust the net pension liability are also recorded as deferred outflows of resources or deferred inflows of resources and are amortized into pension expense over the expected remaining lives of plan members. The difference between projected investment return on pension investments and actual return on those investments is also deferred and amortized against pension expense over a five year period. The changes in proportion and differences between Village contributions and proportionate share of contributions are also deferred and amortized against pension expense over a five year period.



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Deferred Outflows/Inflows of Resources: (Continued) Additionally, any contributions made by the Village to the pension plan before year end but subsequent to the measurement date of the Village’s net pension liability are reported as deferred outflows of resources The statement of financial position also reports unavailable revenue as a deferred inflows which represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. This amount is deferred and recognized as an inflow of resources in the period that the amounts become available. Pension For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Village’s FRS plan and additions to/deductions from this plan’s fiduciary net position have been determined on the same basis as they are reported by the plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

Compensated Absences: The Village’s employees are granted compensated absence pay for vacation and sick leave in varying amounts based on length of service. Unused compensated absences are payable upon separation from service. Vacation is accrued as a liability when benefits are earned by the employees, that is, the employees have rendered services that give rise to the vacation liability and it is probable that the Village will compensate the employees in some manner, e.g., in cash or in paid time-off, now or upon termination or retirement. The Village uses the vesting method in accruing sick leave liability. The vesting method accrues sick leave liability for employees who are eligible to receive termination payments upon separation. Vacation and sick pay that is expected to be liquidated with expendable available financial resources is reported as an expenditure and a fund liability of the governmental fund that will pay it. In the fund financial statements, governmental funds report only the compensated absence liability payable if they are material (i.e., unused reimbursable leave still outstanding following an employee’s resignation or retirement). The General Fund has typically been used in prior years to liquidate such amounts. Vacation and sick pay is accrued when incurred in the government-wide and proprietary fund financial statements. Long-Term Obligations: In the government-wide financial statements, and proprietary fund type in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type Statement of Net Position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable is reported net of the applicable bond premiums or discounts.



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In the fund financial statements, governmental fund types recognize bond premiums and discounts during the current period. The face amount of debt is reported as another financing source. Premiums received on debt issuances are reported as other financing sources, while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Fund Balance/Net Position: The Village desires to provide a stable financial environment for operations that allows the Village to provide quality services in a fiscally responsible manner. This fund balance policy is meant to serve as the framework upon which consistent operations may be built and sustained. When both restricted and unrestricted fund balance/net position are available for use, it is the Village’s policy to use restricted resources first, then unrestricted resources as they are needed. Within unrestricted fund balance, the order in which expenditures will be applied is as follows: committed, assigned and then unassigned. Pursuant to GASB Statement No. 54, fund balance for governmental funds is 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. Additionally, fund balance classifications should depict the nature of the net resources that are reported in a governmental fund. The following definitions provided by GASB Statement No. 54 will be used in reporting activity in governmental funds of the Village. Nonspendable Fund Balance: Amounts that cannot be spent because they are either: (1) not

in spendable form or, (2) legally or contractually required to be maintained intact. Amounts included as nonspendable include inventories, prepaid amounts, long-term amounts of loans and notes receivable, and property held for resale, unless proceeds are restricted, committed or assigned, as well as funds legally or contractually required to be maintained intact.

Restricted Fund Balance: Amounts that may only be spent for specific purposes, as stipulated by external resource providers, by constitution or through enabling legislation that is legally enforceable by an external party. Enabling legislation that creates a revenue stream must also stipulate the purposes for which that revenue can be used. Restrictions may only be changed by parties external to the Village.



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Committed Fund Balance: Amounts committed for specific purposes by formal action of the government’s highest level of decision-making authority. Fund balance can be committed pursuant to constraints imposed by either an ordinance, resolution, or a valid agreement between the Village and a counterparty for which it is clearly documented that the Village will use existing resources, rather than future revenues, to satisfy the contractual obligation. These amounts cannot be used for any other purpose unless the Village Council removes or changes the limitation by taking the same form of action it employed to previously impose the limitation. Formal action to commit an amount to a specific purpose must be made prior to the end of the Village’s fiscal year. The actual amount, however, may be computed after year-end as part of the preparation of the financial statements.

Assigned Fund Balance: Amounts that are intended by the government to be used for specific purposes but are neither restricted nor committed. Intent should be expressed by: (1) the governing body itself, or (2) a subordinate high-level body or official possessing the authority to assign amounts to be used for specific purposes. This authority is granted by Village Council to the Village Manager. Assignment calculations may be made after year-end as part of the preparation of the financial statements. Included in this category is any fund balance carry-forward used to balance the subsequent year’s budget.

Unassigned Fund Balance: The residual classification of fund balance which has not been

restricted, committed or assigned to specific purposes. Only the General Fund may report positive unassigned fund balance. Unassigned residual deficits may apply to other governmental funds to the extent fund balances are insufficient to satisfy restricted and committed balances.

Government-wide and proprietary fund financial statements utilize a net position presentation. Net position is presented in three components as follows: Net investment in capital assets – Consists of capital assets, net of accumulated depreciation

and reduced by the outstanding balances of any bonds, notes or borrowings that are attributable to the acquisition, construction or improvement of those assets. This component does not include the unspent proceeds of debt.

Restricted net position – Consists of funds with constraints placed on their use either by: (1) external groups such as creditors, grantors, contributors, or laws and regulations of other governments, or (2) law through constitutional provisions or enabling legislation.

Unrestricted net position – Consists of net position that does not meet the definition of “restricted” or “net investment in capital assets.”



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G. Property Taxes: Under Florida law, the assessment of all properties and the collection of all county, municipal and school board property taxes are consolidated in the offices of the County Property Appraiser and County Tax Collector, respectively. All property is reassessed according to its fair market value on January 1 of each year and each assessment roll is submitted to the State Department of Revenue for review to determine if the assessment roll meets all of the appropriate requirements of State Law. State statutes permit municipalities to levy property taxes at a rate of up to 10 mills. The tax levy is established by the Council prior to October 1 of each year during the budget process. The millage rate assessed by the Village for the year ended September 30, 2015, was 2.5329 mills ($2.5329 for each $1,000 of assessed valuation). The nonexempt assessed value of property within the Village limits at January 1, 2015, was approximately $2.67 billion. Taxes may be paid less a 4% discount in November or at declining discounts each month through the month of February. All unpaid taxes become delinquent on April 1 following the year in which they are assessed. Delinquent taxes on real property bear interest at 18% per year until the tax is satisfied either by seizure and sale of the property or by the five-year statute of limitations.

H. Estimates:

The presentation of financial statements in conformity with 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/expenditures during the reporting period. Actual results could differ from those estimates.



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Note 3 – Deposits and Investments The Village maintains a cash pool that is available for use by all funds to facilitate the cash management process. Each fund’s portion of this pool is included on the Statement of Net Position and Balance Sheet as “cash and equity in pooled cash.” Interest is allocated to the various funds based on their proportionate share of the cash pool. Cash – All of the Village’s deposits are held in qualified public depositories pursuant to State of Florida Statutes, Chapter 280, “Florida Security for Public Deposits Act.” Under the act, every qualified public depository shall deposit with the Treasurer eligible collateral equal to or in excess of the required collateral of the depository to be held subject to his or her order. The Treasurer, by rule, shall establish minimum required pledging levels. The pledging level may range from 25% to 125% of the average monthly balance of public deposits depending upon the depository’s financial condition and establishment period. All collateral must be deposited with an approved financial institution. Any losses to public depositors are covered by applicable deposit insurance, sale of securities pledged as collateral and, if necessary, assessments against other qualified public depositories of the same type as the depository in default. At year-end, the carrying amount of the Village’s deposits was $10,929,649 and the total bank balance was $11,023,831. Included in cash and equity in pooled cash on the Statement of Net Position and Balance Sheet – Governmental Funds is $1,870 cash on hand. All balances are covered by Federal depository insurance or by collateral held by the State Treasurer. Investments – In accordance with the Village’s investment policy, the Village may invest in the following: Interest-bearing time deposits and checking or savings accounts in qualified public depositories as

defined in Florida Statute 280.02. The Local Government Surplus Funds Trust Fund or any intergovernmental investment pool

authorized pursuant to the Florida Statute 163.01. Securities and Exchange Commission registered money market funds with the highest credit

quality rating from a nationally recognized rating agency. Direct obligations of the United States Treasury Federal Agencies or instrumentalities At September 30, 2015, the Village’s surplus funds were held in interest-bearing checking and savings accounts.



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Note 4 – Receivables Receivables at September 30, 2015, for the Village’s individual major funds and total nonmajor funds are as follows:

Special Due from OtherAccounts Assessments Governments Total

Governmental ActivitiesMajor funds

General Fund 743,183$ -$ 247,936$ 991,119$ Solid Waste Fund - - 995 995 Capital Projects Fund - - 171,114 171,114

Nonmajor funds - - 64,727 64,727 Total governmental activities 743,183 - 484,772 1,227,955

Business-type ActivitiesMajor funds

Plantation Yacht Harbor Marina Fund 21,604 - - 21,604 Wastewater Utility Fund 222,644 32,839,163 9,522,241 42,584,048

Nonmajor fund - - 3,737 3,737 Total business-type activities 244,248 32,839,163 9,525,978 42,609,389

Total primary government 987,431$ 32,839,163$ 10,010,750$ 43,837,344$

Special assessment receivables are net of an allowance for uncollectible accounts in the amount of $1,015,644. All other receivables are deemed fully collectible by the Village.



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Note 5 – Capital Assets

Capital asset activity for the governmental activities for the year ended September 30, 2015, was as follows:

Balance BalanceOctober 1 Increases Decreases September 30

Governmental ActivitiesCapital assets, not being depreciated

Land 23,534,144$ -$ -$ 23,534,144$ Construction in progress 61,528 173,957 (198,226) 37,259

Total capital assets, not being depreciated 23,595,672 173,957 (198,226) 23,571,403 Capital assets, being depreciated

Land improvements 628,247 16,418 - 644,665 Buildings and improvements 8,910,892 7,070 - 8,917,962 Improvements other than buildings 5,841,173 43,782 (4,502) 5,880,453 Infrastructure 8,475,534 26,130 - 8,501,664 Equipment and furniture 2,060,769 410,010 (72,996) 2,397,783 Vehicles 3,298,308 12,131 (185,481) 3,124,958

Total capital assets, being depreciated 29,214,923 515,541 (262,979) 29,467,485 Less accumulated depreciation for

Land improvements (506,108) (26,904) - (533,012) Buildings and improvements (1,583,871) (293,124) - (1,876,995) Improvements other than buildings (3,350,445) (289,684) 4,502 (3,635,627) Infrastructure (5,583,038) (280,895) - (5,863,933) Equipment and furniture (1,587,345) (181,274) 72,996 (1,695,623) Vehicles (2,787,289) (76,386) 181,691 (2,681,984)

Total accumulated depreciation (15,398,096) (1,148,267) 259,189 (16,287,174) Total capital assets, being depreciated, net 13,816,827 (632,726) (3,790) 13,180,311 Governmental activities capital assets, net 37,412,499$ (458,769)$ (202,016)$ 36,751,714$

Depreciation expense was charged to the governmental activities as follows:

Governmental ActivitiesGeneral Government 229,643$ Public Safety 232,666 Physical Environment 283,664

Culture and Recreation 402,294 Total depreciation expense, governmental activities 1,148,267$



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Note 5 – Capital Assets (continued)

Capital asset activity for the business-type activities for the year ended September 30, 2015, was as follows:

Balance BalanceOctober 1 Increases Decreases September 30

Business-type ActivitiesCapital assets, not being depreciated

Land 1,061,948$ -$ -$ 1,061,948$ Construction in progress 99,743,207 32,063,814 - 131,807,021

Total capital assets, not being depreciated 100,805,155 32,063,814 - 132,868,969 Capital assets, being depreciated

Land improvements 155,488 - - 155,488 Buildings and improvements 882,631 - - 882,631 Improvements other than buildings 2,390,769 - - 2,390,769 Infrastructure 25,004,897 741,549 (32,605) 25,713,841 Equipment and furniture 1,831,178 1,118 (8,250) 1,824,046

Total capital assets, being depreciated 30,264,963 742,667 (40,855) 30,966,775 Less accumulated depreciation for

Land improvements (85,489) (15,549) - (101,038) Buildings and improvements (154,313) (31,284) - (185,597) Improvements other than buildings (317,792) (50,528) - (368,320) Infrastructure (5,113,244) (815,701) - (5,928,945) Equipment and furniture (638,436) (98,091) 6,015 (730,512)

Total accumulated depreciation (6,309,274) (1,011,153) 6,015 (7,314,412) Total capital assets, being depreciated, net 23,955,689 (268,486) (34,840) 23,652,363 Business-type activities capital assets, net 124,760,844$ 31,795,328$ (34,840)$ 156,521,332$

Depreciation expense was charged to the business-type activities as follows:

Business-type ActivitiesPlantation Yacht Harbor Marina 208,985$ Wastewater Utility 787,131

Stormwater Utility 15,037 Total depreciation expense, business-type activities 1,011,153$



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Note 6 – Interfund Balances

Advances between funds as of September 30, 2015, consisted of the following:

Governmental Activities Major Fund Capital Projects Fund 82,180$ -$ Business-type Activities Nonmajor Fund Stormwater Utility Fund - 82,180

82,180$ 82,180$

Advances to Other Funds

Advances from Other Funds

The Stormwater Utility Fund advance from the Capital Projects Fund for $82,180 represents a borrowing for capital asset expenditures that will be repaid in future years. Interfund transfers between funds for the year ended September 30, 2015, were as follows:

Transfers In Transfers OutGovernmental Activities Major Funds General Fund 191,825$ -$ Solid Waste Fund 2,812 - Debt Service Fund 1,520,817 - Capital Projects Fund - 1,834,662 Nonmajor Funds 125,000 1,698,490 Business-type Activities Major Funds Plantation Yacht Harbor Marina Fund 27,663 - Wastewater Utility Fund 1,665,035 - Total 3,533,152$ 3,533,152$

Because the Village’s governmental debt is secured by discretionary sales surtax levied to fund infrastructure capital projects, a transfer of $1,520,817 occurred from the Capital Projects Fund to the Debt Service Fund. In addition to this transfer of discretionary sales surtax revenue, a transfer of $27,663 was made from the Capital Projects Fund to the Marina Fund to assist with debt service coverage. In addition, $1,665,035 was transferred from the Transportation and Capital Projects Funds to the Wastewater Utility Fund for costs related to the wastewater project. A transfer of $191,825 was made from the Capital Projects Fund to the General Fund to assist with capital related expenditures. Finally, a transfer of $125,000 was made from the Affordable Housing Fund to the CDBG Fund to cover initial costs of a project that will be reimbursed with grant funding.



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Note 7 – Long-Term Liabilities

The following is a summary of changes in governmental activities long-term debt for the year ended September 30, 2015:

Balance Balance Due WithinOctober 1 Additions Reductions September 30 One Year

Governmental ActivitiesBonds Payable

Series 2003 211,500$ -$ (43,900)$ 167,600$ 43,900$ Series 2004A 401,952 - (82,398) 319,554 82,398 Series 2004B 2,460,000 - (505,000) 1,955,000 505,000 Series 2012 2,310,509 - (26,195) 2,284,314 26,195 Series 2013 6,000,000 - (420,000) 5,580,000 420,000

Capital lease payable 365,000 - (88,601) 276,399 88,601 Interest rate swap liability 171,643 - (49,693) 121,950 - Compensated absences 491,755 1,587,086 (1,457,671) 621,170 299,879 Net pension liability 1,229,065 2,128,814 (1,004,371) 2,353,508 - Other post-employment benefits 58,158 2,096 - 60,254 -

Total governmental activities 13,699,582$ 3,717,996$ (3,677,829)$ 13,739,749$ 1,465,973$

Typically compensated absences, the net pension liability, and other post-employment benefits are liquidated with funds from the General Fund. Long-term debt of the governmental activities at September 30, 2015, is composed of the following bonds payable:

GovernmentalActivities

167,600$

319,554

The Village issued bonds in the amount of $598,000 to finance the cost of acquisitionand construction of renovations and improvements to the Village's South Fire Station.Principal and interest at 3.87% is payable semi-annually on August 1 and February 1through February 2019. The bonds are secured by, and payable from, the Village'sportion of the one-cent governmental infrastructure surtax.

Public Improvement Revenue Bond, Series 2003

Public Improvement Revenue Bond, Series 2004A

The Village issued bonds in the amount of $2,111,355 to finance the cost of acquisitionand construction of certain capital projects within the Village, including a municipalcenter and the Lower Matecumbe Fire and EMS project. Principal and interest at 4.05%is payable semi-annually on August 1 and February 1 through February 1, 2019. Thebonds are secured by, and payable from, the Village's portion of the one-centgovernmental infrastructure surtax and marina operating revenues.



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Note 7 – Long-Term Debt (continued)

1,955,000

2,284,314

5,580,000 10,306,468$

Public Improvement Revenue Bond, Series 2004B

Capital Improvement Revenue Bond, Series 2013

The Village issued bonds in the amount of $2,392,749 to refund $2,332,600 ofoutstanding Public Improvement Revenue Bonds, Series 2007, plus accrued interestand issuance costs. Principal and interest at 2.210% is payable semi-annually onDecember 1 and June 1 through June 2027. The bonds are secured by, and payablefrom, the Village's portion of the one-cent governmental infrastructure surtax.

The Village issued bonds in the amount of $6,770,000 to refund $6,769,938 ofoutstanding Public Improvement Revenue Bonds, Series 2002A. Principal and interestat 3.88% is payable semi-annually on August 1 and February 1 through February 1,2019. The bonds are secured by, and payable from, the Village's portion of the one-cent governmental infrastructure surtax and marina operating revenues.

The Village issued bonds in the amount of $6,000,000 to finance the cost of acquisitionand construction of capital improvements to the road system and pay issuance costs.Principal and interest at 3.13% is payable semi-annually on October 1 and April 1through October 1, 2028. The bonds are secured by, and payable from, the Village'slocal option gas tax revenues.

Capital Improvement Refunding Revenue Bond, Series 2012

Annual debt service requirements to maturity for outstanding bonds for governmental activities are as follows:

Year EndingSeptember 30, Principal Interest Total

2016 1,028,170$ 311,194$ 1,339,364$ 2017 1,070,658 273,712 1,344,370 2018 1,101,561 234,772 1,336,333 2019 767,462 194,599 962,061 2020 644,219 172,564 816,783

2021-2025 3,489,599 584,204 4,073,803 2026-2029 2,204,799 117,608 2,322,407

10,306,468$ 1,888,653$ 12,195,121$

Capital Lease The Village entered into a capital lease agreement in the amount of $365,000 to finance the purchase of a fire pumper truck. The agreement bears interest at 1.95% and is due in monthly payments of $7,911 through September 2018. The lease agreement qualifies as a capital leases for accounting purposes and, therefore, has been recorded at the present value of the future minimum lease payments as of the inception date. The asset acquired through the capital lease consists of only the fire pumper truck at $365,000 with accumulated depreciation of $26,507.



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The future minimum lease obligations and the net present value of these minimum lease payments as of September 30, 2015, were as follows:

GovernmentalYear Ending September 30, Activities

2016 94,929$ 2017 94,929 2018 94,929

Total minimum lease payments 284,787 Less amount representing interest (8,388) Present value of minimum lease payments 276,399$

The following is a summary of changes in business-type activities long-term debt for the year ended September 30, 2015:

Balance Balance Due WithinOctober 1 Additions Reductions September 30 One Year

Business-type ActivitiesBonds Payable

Series 2004A 1,963,048$ -$ (402,602)$ 1,560,446$ 419,204$ Series 2012 3,480,640 - (235,845) 3,244,795 242,343

State Revolving Fund Loans2006 3,627,842 - (231,991) 3,395,851 237,114 2012 43,009,853 36,353,880 - 79,363,733 -

Note payable 10,000,000 8,206,463 (12,137,373) 6,069,090 - Interest rate swap liability 125,104 - (39,506) 85,598 - Compensated absences 43,871 211,386 (148,918) 106,339 48,827 Other post-employment benefits 4,541 193 - 4,734 -

Total governmental activities 62,254,899$ 44,771,922$ (13,196,235)$ 93,830,586$ 947,488$

Long-term debt of the business-type activities at September 30, 2015, is composed of the following bonds payable:

Business-typeActivities

1,560,446$

Public Improvement Revenue Bond, Series 2004A

The Village issued bonds in the amount of $4,388,645 to finance the cost of acquisitionand construction of certain capital projects within the Plantation Yacht Harbor Marina.Principal and interest at 4.05% is payable semi-annually on August 1 and February 1through February 2019. The bonds are secured by, and payable from, the Village'sportion of the one-cent governmental infrastructure surtax and marina operatingrevenues.



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3,244,795

3,395,851

79,363,733

6,069,090 93,633,915$

2006 State Revolving Fund Loan ProgramThe Village entered into a loan agreement with the State Department of EnvironmentalProtection Clean Water Revolving Fund Loan program to borrow funds to finance theengineering and design of a wastewater collection system in the amount of $5,219,564(including capitalized interest and service fees). The combined interest and grant allocationassessment for this agreement is fixed as 2.92%. Principal and interest payments in theamount of $166,769 are payable semi-annually on January 15 and July 15 through July 15,2027. The loan is secured by assessments and annual revenues derived from the operationof the sewer system.

2012 State Revolving Fund Loan ProgramThe Village entered into a loan agreement with the State Department of EnvironmentalProtection Clean Water State Revolving Fund program to borrow funds to finance thedesign and construction of a wastewater collection system. As of September 30, 2013, theapproved loan amount was $47,799,014, including capitalized interest, and $22,502,437had been borrowed to date. The combined interest and grant allocation assessment for thisagreement is 2.33%. Payments will begin June 15, 2016 and semi-annually thereafter onDecember 15 and June 15 until paid in full. The loan is secured by assessments and annualrevenues derived from the operation of the sewer system.

2013 Capital Improvement Revenue Note

The Village issued a Capital Improvement Revenue Note in an amount not to exceed$10,000,000 to finance the cost of certain capital improvements to the wastewater system.This loan is being structured as a revolving line of credit note; therefore, funds may berepaid and then advanced again. However, no more than $60,000,000 may be drawn underthe Series 2013 note in aggregate. The note shall accrue interest at 67% of the sum of theLIBOR rate plus 1.68%.The note is payable solely from and secured by the net wastewatersystem revenues, special assessments, moneys on deposit in the funds and accounts createdby the line of credit agreement, and investment earning on such moneys on deposit. Thenote matures November 7, 2016.

Capital Improvement Refunding Revenue Bond, Series 2012

The Village issued bonds in the amount of $3,931,877 to refund $2,492,276 of outstandingSpecial Assessment Improvement Bonds, Series 2006, $104,288 of outstanding PublicImprovement Revenue Bonds, Series 2007, and $1,175,198 of outstanding CapitalImprovement Revenue Bonds, Series 2009, plus accrued interest and issuance costs.Principal and interest at 2.210% is payable semi-annually on December 1 and June 1through June 2027. The bonds are secured by, and payable from, the Village's portion ofthe one-cent governmental infrastructure surtax.



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Note 7 – Long-Term Debt (continued) The annual requirements to amortize the outstanding debt of the business-type activities as of September 30, 2015, excluding the 2012 State Revolving Fund Loan Program and the 2013 Capital Improvement Revenue Note (which have not yet been determined), is as follows:

Year EndingSeptember 30, Principal Interest Total

2016 898,660$ 221,978$ 1,120,638$ 2017 935,476 192,830 1,128,306 2018 964,287 162,457 1,126,744 2019 752,518 131,102 883,620 2020 539,205 113,360 652,565

2021-2025 2,903,468 359,036 3,262,504 2026-2027 1,207,478 40,045 1,247,523

8,201,092$ 1,220,808$ 9,421,900$

Defeased Debt – On November 2, 2012, the Village issued Capital Improvement Refunding Revenue Bond, Series 2012 in the amount of $6,324,626, to currently refund Special Assessment Improvement Bonds, Series 2006 in the amount of $2,492,276, Capital Improvement Revenue Bond, Series 2007 in the amount of $2,436,888, and Capital Improvement Refunding Bond, Series 2009 in the amount of $1,175,198. The proceeds were used to pay off the debt issues and costs of issuance. Note 8 – Swap Agreements Series 2004A and 2004B Public Improvement Revenue Bonds Swap Agreements: The Village entered into two interest rate swaps in connection with its $6,500,000 Series 2004A and its $6,770,000 Series 2004B Public Improvement Revenue Bonds with notional amounts equal to the bonds outstanding. The intent of the swaps is to effectively change the Village's variable interest rate on the debt to a synthetic fixed rate of 4.05% and 3.88%. The Series 2004A and 2004B Bond and the related swap agreements mature on February 1, 2019. Under the requirements of the swaps, the Village receives variable payments based on 67% of U.S. LIBOR plus .80% from the counterparty, which equals the outstanding rate on the bonds. The swaps had a negative fair value of approximately $106,530 and $101,019, respectively, at September 30, 2015. The following table summarizes the objective and terms of the Village’s hedging derivative instruments outstanding at September 30, 2015.

Original Notional Fair FairBond Notional Amount Effective Maturity Value Value Change inIssue Amount 9/30/2015 Date Date 9/30/2015 9/30/2014 Value

2004A 6,500,000$ 2,365,000$ 2/27/04 2/1/19 (106,530)$ (150,728)$ 44,198$ 2004B 6,770,000$ 2,460,000$ 3/15/04 2/1/19 (101,019)$ (146,019)$ 45,000$



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Note 8 – Swap Agreements (continued) Per GASB Statement 53, when debt is associated with a derivative instrument such as the Series 2004A and 2004B Public Improvement Revenue Bonds Swap Agreements, the net cash flows between the amount owed on the bonds and the amount received from the hedging instrument should be disclosed. In the case of these Swap Agreements, there is no variation between the variable rate payments, and the Village does not exchange variable rate funds in a bank loan swap. The Village only pays the lender the fixed rate. The variable rate aspect is internal within the lending bank. Therefore, a schedule of net cash flows is not included in this disclosure note. The future maturity schedules in Note 7 disclose all future payments related to the swap agreements calculated at the fixed rates. Credit risk – As of September 30, 2015, the Village was not exposed to credit risk because the swaps had a negative value. Basis risk – The Village is not exposed to basis risk because the interest rate on the bonds and the swaps are the same. Termination risk – The Village or its counterparty may terminate a derivative instrument if the other party fails to perform under the terms of the swap contract. If, at the time of termination, a swap agreement has a negative fair market value to the Village, the Village may be liable to the counterparty for a termination payment calculated pursuant to the swap agreement.



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Note 9 – Fund Balance Fund balance as of September 30, 2015, consists of the following:

NonmajorGeneral Solid Waste Capital Projects Governmental

Fund Fund Fund Funds Total

NonspendablePrepaids 54,129$ -$ -$ -$ 54,129$ Deposits 110 - - - 110 Total nonspendable 54,239 - - - 54,239 RestrictedPolice training 34,795 - - - 34,795 Capital projects 190,903 - 2,504,429 - 2,695,332 Transportation - - - 234,210 234,210 Total restricted 225,698 - 2,504,429 234,210 2,964,337 CommittedLandscape mitigation 101,397 - - - 101,397 Canal restoration 9,607 - - - 9,607 City view 63,092 - - - 63,092 Affordable housing - - - 568,078 568,078 Fire rescue projects - - 129,126 - 129,126 Park projects - - 478,984 - 478,984 Transportation projects - - 181,235 - 181,235 Solid waste projects and operations - 43,628 2,812 - 46,440 Library projects - - 11,995 - 11,995 Total committed 174,096 43,628 804,152 568,078 1,589,954 AssignedSubsequent year expenditures 24,010 - - - 24,010 Total assigned 24,010 - - - 24,010 Unassigned 4,124,805 - - - 4,124,805 Total fund balance 4,602,848$ 43,628$ 3,308,581$ 802,288$ 8,757,345$

Note 10 – Other Post-Employment Benefits As of October 1, 2015, the Village implemented the provisions of Governmental Accounting Standards Board (GASB) Statement Number 45, Accounting and Financial Reporting by Employers for Post-Employment Benefits Other Than Pensions, for certain post-employment healthcare benefits provided by the Village. The requirements of this Statement are being implemented prospectively. Accordingly, for financial reporting purposes, no liability is reported for the post-employment healthcare benefits at the date of transition.



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Note 10 – Other Post-Employment Benefits (Continued) Plan Description – The Village provides healthcare benefits through a single-employer defined benefit plan (the “Plan”) administered by the Village. Pursuant to the provisions of Section 112.0801, Florida Statutes, former employees and eligible dependents who retire from the Village may continue to participate in the Village’s self-funded health and hospitalization plans for medical and prescription drug coverage. The Village subsidizes the premium rates paid by retirees by allowing them to participate in the plans at reduced or blended group (implicitly subsidized) premium rates for both active and retired employees. These rates provide an implicit subsidy for retirees because, on an actuarial basis, their current and future claims are expected to result in higher costs to the plan on average than those of active employees. The Plan does not issue a stand-alone financial report. Funding Policy – Contribution requirements for the Plan are established and may be amended through recommendations of the Village Manager and action from the Village Council. Currently, the Village’s other post-employment benefits (OPEB) are unfunded. The Village has not advance-funded or established a funding methodology for the annual OPEB costs or the net OPEB obligation. For the 2014-2015 fiscal year, the Village provided contributions of $711 toward annual OPEB costs. There were no retiree contributions. Required contributions are based on a projected pay-as-you-go basis. Annual OPEB Cost and Net OPEB Obligation – The Village has elected to calculate the annual required contribution (ARC) and related information using the Alternative Measurement Method (AMM) permitted by GASB Statement 45 for employers of plans with fewer than one hundred total plan members. The Village’s annual OPEB cost (expense) is calculated based on the ARC. The ARC represents a level of funding that if paid on an ongoing basis, is projected to cover normal costs each year and to amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 25 years. As of the most recent valuation date, the funded status of the Plan is as follows:

Actuarial UAAL as a Actuarial Accrued Unfunded Percentage

Actuarial Value of Liability (AAL) AAL Funded Covered of CoveredValuation Assets Entry Age (UAAL) Ratio Payroll Payroll

Date (a) (b) (b-a) (a / b) (c) ((b-a) / c)

9/30/2015 -$ 24,513$ 24,513$ 0.00% 5,000,000$ 0.49% The schedule of funding progress included as required supplementary information presents multi-year trend information about whether the value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits.



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Note 10 – Other Post-Employment Benefits (continued) The Village’s annual OPEB cost, the percentage of annual OPEB costs contributed to the plan, and the net OPEB obligation for the past two (2) fiscal years were as follows:

Fiscal Year Ended

Annual OPEB Cost

(AOC)% of AOC

ContributedNet OPEB Obligation

9/30/2015 3,003$ 23.44% 64,998$ 9/30/2014 12,896 25.78% 62,699 9/30/2013 12,491 32.81% 53,127

The following table shows the Village’s annual OBEP cost, the amount actually contributed to the Plan and changes in the Village’s net OPEB obligation for the last three years:

Other Post-employment Benefits (OPEB) 2015 2014 2013Annual Required Contribution (ARC) 3,543$ 13,355$ 12,877$ Interest on Plan obligation 1,881 1,594 1,342 Adjustment to ARC (2,421) (2,053) (1,728) Annual Plan OPEB cost 3,003 12,896 12,491 Contributions made (704) (3,324) (4,098) Change in OPEB Obligation 2,299 9,572 8,393 Net OPEB Obligation beginning of year 62,699 53,127 44,734

Net OPEB Obligation end of year 64,998$ 62,699$ 53,127$

Actuarial Methods and Assumptions. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment and termination, mortality and the healthcare cost trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Projections of benefits for financial reporting purposes are based on the substantive plan provisions, as understood by the employer and participating members, and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and participating members. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.



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Note 10 – Other Post-Employment Benefits (continued) The Village’s actuarial valuation as of September 30, 2015, used the entry age normal cost actuarial method to estimate the unfunded actuarial accrued liability and to determine the annual required contribution. The amortization method is a level percentage projected payroll on a closed basis with a 25 year remaining amortization period. The actuarial assumptions included a discount rate of 3% (including inflation of 2.8%). The actuarial assumptions included projected salary increases of 3.8% and a 3.3% payroll growth assumption. The initial healthcare trend rate was 6.5% for the first year, decreasing .5% per year for an ultimate trend rate of 5%. Note 11 – Employee Benefit Plans Islamorada, Village of Islands’ Money Purchase Plan is a defined contribution plan that was established by the Village and is administered by Nationwide Retirement Solutions, Inc. to provide benefits at retirement for certain Village employees. Plan revisions and contribution requirements are established and may be amended by the Village Council. Effective October 1, 2011, the Village Council agreed that the Village would make 4% employer contributions to the plan for non-Fire Rescue personnel. For the fiscal years ended September 30, 2015 and 2013, the Village contributed approximately $124,975 and $114,600, respectively, to this plan. Plan members do not make contributions to the Plan. Effective October 1, 2011, the term of vesting for new participants was increased to two years from anniversary date. As part of the Village Manager and Attorney’s contract, the Village makes 10% contributions to a 457 plan on their behalf. For the year ended September 30, 2015, the Village contributed $14,000 to the plan. The Village offers its employees two optional deferred compensation plans – one through Nationwide Retirement Solutions, Inc., and another through ING. The Village has adopted the provision of IRS Code Section 457(g) and GASB Statement No. 32, “Accounting and Financial Reporting for IRS Code Section 457 Deferred Compensation Plans.” Under these provisions, all assets and income of the Plan are held in trust for the exclusive benefit of participants. Accordingly, the assets and liabilities of the Plan are not reported within the Village’s financial statements. Florida Retirement System (FRS) General Information – The Village provides contributions to the Florida Retirement System for its firefighters and EMS workers. As provided by Chapters 121 and 112, Florida Statutes, the FRS provides two cost sharing, multiple employer defined benefit plans administered by the Florida Department of Management Services, Division of Retirement, including the FRS Pension Plan (“Pension Plan”) and the Retiree Health Insurance Subsidy (“HIS Plan”). Under Section 121.4501, Florida Statutes, the FRS also provides a defined contribution plan (“Investment Plan”) alternative to the FRS Pension Plan, which is administered by the State Board of Administration (“SBA”).



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Note 11 – Employee Benefit Plans (continued) As a general rule, membership in the FRS is compulsory for all employees working in a regularly established position for a state agency, county government, district school board, state university, community college, or a participating Village or special district within the State of Florida. The FRS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefits are established by Chapter 121, Florida Statutes, and Chapter 60S, Florida Administrative Code. Amendments to the law can be made only by an act of the Florida State Legislature. The State of Florida annually issues a publicly available financial report that includes financial statements and required supplementary information for the FRS. The latest available report may be obtained by writing to the State of Florida Division of Retirement, Department of Management Services, P.O. Box 9000, Tallahassee, Florida 32315-9000, or from the Web site: www.dms.myflorida.com/workforce_operations/retirement/publications. Pension Plan Plan Description – The Pension Plan is a cost-sharing multiple-employer defined benefit pension plan, with a Deferred Retirement Option Program (“DROP”) for eligible employees. Benefits Provided - Benefits under the Pension Plan are computed on the basis of age, average final compensation, and service credit. For Pension Plan members enrolled before July 1, 2011, Regular class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 1.6% of their final average compensation based on the five highest years of salary, for each year of credited service. Vested members with less than 30 years of service may retire before age 62 and receive reduced retirement benefits. Special Risk Administrative Support class members who retire at or after age 55 with at least six years of credited service or 25 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 1.6% of their final average compensation based on the five highest years of salary, for each year of credited service. Special Risk class members (sworn law enforcement officers, firefighters, and correctional officers) who retire at or after age 55 with at least six years of credited service, or with 25 years of service regardless of age, are entitled to a retirement benefit payable monthly for life, equal to 3.0% of their final average compensation based on the five highest years of salary for each year of credited service. Senior Management Service class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 2.0% of their final average compensation based on the five highest years of salary for each year of credited service. Elected Officers’ class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 3.0% (3.33% for judges and justices) of their final average compensation based on the five highest years of salary for each year of credited service.



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Note 11 – Employee Benefit Plans (continued) For Plan members enrolled on or after July 1, 2011, the vesting requirement is extended to eight years of credited service for all these members and increasing normal retirement to age 65 or 33 years of service regardless of age for Regular, Senior Management Service, and Elected Officers’ class members, and to age 60 or 30 years of service regardless of age for Special Risk and Special Risk Administrative Support class members. Also, the final average compensation for all these members will be based on the eight highest years of salary. As provided in Section 121.101, Florida Statutes, if the member is initially enrolled in the Pension Plan before July 1, 2011, and all service credit was accrued before July 1, 2011, the annual cost-of- living adjustment is three percent per year. If the member is initially enrolled before July 1, 2011, and has service credit on or after July 1, 2011, there is an individually calculated cost-of-living adjustment. The annual cost-of-living adjustment is a proportion of 3% determined by dividing the sum of the pre-July 2011 service credit by the total service credit at retirement multiplied by three percent. Plan members initially enrolled on or after July 1, 2011, will not have a cost-of-living adjustment after retirement. In addition to the above benefits, the DROP program allows eligible members to defer receipt of monthly retirement benefit payments while continuing employment with a FRS employer for a period not to exceed 60 months after electing to participate. Deferred monthly benefits are held in the FRS Trust Fund and accrue interest. There are no required contributions by DROP participants Contributions – Effective July 1, 2011, all enrolled members of the FRS, other than DROP participants, are required to contribute 3% of their salary to the FRS. In addition to member contributions, governmental employers are required to make contributions to the FRS based on state-wide contribution rates established by the Florida Legislature. These rates are updated as of July 1 of each year. The employer contribution rates by job class for the periods from October 1, 2014 through June 30, 2015, and from July 1, 2015 through September 30, 2015, respectively, were as follows: Regular—7.37% and 7.26%; Special Risk Administrative Support—42.07% and 32.95%; Special Risk—19.82% and 22.04%; Senior Management Service—21.14% and 21.43%; Elected Officers’—43.24% and 42.27%; and DROP participants—12.28% and 18.75%. These employer contribution rates include 1.20% and 1.26% HIS Plan subsidy for the periods October 1, 2014 through June 30, 2015, and from July 1, 2015 through September 30, 2015, respectively. The Village’s contributions, including employee contributions, to the Pension Plan totaled $323,798 for the fiscal year ended September 30, 2015.



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Note 11 – Employee Benefit Plans (continued) Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions – At September 30, 2015, the Village reported a liability of $1,712,289 for its proportionate share of the Pension Plan’s net pension liability. The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2015. The Village’s proportionate share of the net pension liability was based on the Village’s 2014-15 fiscal year contributions relative to the 2013-14 fiscal year contributions of all participating members. At June 30, 2015, the Village's proportionate share was 0.013256768 percent, which was an increase of 0.00157 percent from its proportionate share measured as of June 30, 2015. For the fiscal year ended September 30, 2015, the Village recognized pension expense of $83,329. In addition the Village reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred Outflows Deferred InflowsDescription of Resources of Resources

Differences between expected and 180,767$ 40,610$ actual experienceChange of assumptions 113,650 - Net difference between projected and actual 603,116 1,011,982 earnings on Pension Plan investmentsChanges in proportion and differences 205,785 335,044 between Village Pension Plan contributions and proportionate share of contributionsVillage Pension Plan contributions subsequent 79,152 - to the measurement date Total 1,182,470$ 1,387,636$

The deferred outflows of resources related to the Pension Plan, totaling $79,152 resulting from Village contributions to the Plan subsequent to the measurement date, will be recognized as a reduction of the net pension liability in the fiscal year ended September 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to the Pension Plan will be recognized in pension expense as follows:

Fiscal Year EndingSeptember 30: Amount

2016 (56,864)$ 2017 (56,864) 2018 (56,864) 2019 (56,863) 2020 (56,863)

Thereafter -



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Note 11 – Employee Benefit Plans (continued) Actuarial Assumptions – The total pension liability in the June 30, 2015, actuarial valuation was determined using the following actuarial assumption, applied to all period included in the measurement: Inflation 2.60 % Salary increases 3.25%, average, including inflation Investment rate of return 7.65%, net of pension plan investment expense, including

inflation Mortality rates were based on the Generational RP-2000 with Projection Scale BB tables. The actuarial assumptions used in the July 1, 2015, valuation were based on the results of an actuarial experience study for the period July 1, 2008 through June 30, 2013. The long-term expected rate of return on Pension Plan investments was not based on historical returns, but instead is based on a forward-looking capital market economic model. The allocation policy’s description of each asset class was used to map the target allocation to the asset classes shown below. Each asset class assumption is based on a consistent set of underlying assumptions and includes an adjustment for the inflation assumption. The target allocation and best estimates of arithmetic and geometric real rates of return for each major asset class are summarized in the following table:

CompoundAnnual Annual

Target Arithmetic (Geometric) StandardAsset Class Allocation (1) Return Return Deviation

Cash 1.00% 3.11% 3.10% 1.65%Intermediate-Term Bonds 18.00% 4.18% 4.05% 5.15%High Yeld Bonds 3.00% 6.79% 6.25% 10.95%Broad US Equities 26.50% 8.51% 6.95% 18.90%Developed Foreign Entities 21.20% 8.66% 6.85% 20.40%Emerging Market Equities 5.30% 11.58% 7.60% 31.15%Private Equity 6.00% 11.80% 8.11% 30.00%Hedge Funds/Absolute Return 7.00% 5.81% 5.35% 10.00%Real Estate (Property) 12.00% 7.11% 6.35% 13.00%Total 100.00%

Assumed Inflation - Mean 2.60% 2.00%

(1) As outlined in the Pension Plan's investment policy



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Note 11 – Employee Benefit Plans (continued) Discount Rate - The discount rate used to measure the total pension liability was 7.65%. The Pension Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the discount rate for calculation the total pension liability is equal to the long-term expected rate of return. Sensitivity of the Village’s Proportionate Share of the Net Position Liability to Changes in the Discount Rate - The following represents the Village’s proportionate share of the net pension liability calculated using the discount rate of 7.65%, as well as what the Village’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is one percentage point lower (6.65%) or one percentage point higher (8.65%) than the current rate:

Current1% Decrease Discount Rate 1% Increase

(6.65%) (7.65%) (8.65%)

Village's proportionate share of the net pension liability 4,436,928$ 1,712,289$ (555,058)$

Pension Plan Fiduciary Net Position - Detailed information regarding the Pension Plan’s fiduciary net position is available in the separately issued FRS Pension Plan and Other State-Administered Systems Comprehensive Annual Financial Report. Payables to the Pension Plan - At September 30, 2015, the Village reported a payable in the amount of $0 for outstanding contributions to the Pension Plan required for the fiscal year ended September 30, 2015. HIS Plan Plan Description – The HIS Plan is a cost-sharing multiple-employer defined benefit pension plan established under Section 112.363, Florida Statutes, and may be amended by the Florida legislature at any time. The benefit is a monthly payment to assist retirees of State-administered retirement systems in paying their health insurance costs and is administered by the Florida Department of Management Services, Division of Retirement. Benefits Provided – For the fiscal year ended September 30, 2015, eligible retirees and beneficiaries received a monthly HIS payment of $5 for each year of creditable service completed at the time of retirement, with a minimum HIS payment of $30 and a maximum HIS payment of $150 per month. To be eligible to receive these benefits, a retiree under a State-administered retirement system must provide proof of health insurance coverage, which may include medicare.



55

Note 11 – Employee Benefit Plans (continued) Contributions – The HIS Plan is funded by required contributions from FRS participating employers as set by the Florida Legislature. Employer contributions are a percentage of gross compensation for all active FRS members. For the fiscal year ended September 30, 2015, the HIS contribution for the period October 1, 2014 through June 30, 2015, and from July 1, 2015 through September 30, 2015, was 1.20% and 1.26%, respectively. The Village contributed 100% of its statutorily required contributions for the current and preceding three years. HIS Plan contribution are deposited in a separate trust fund from which payments are authorized. HIS Plan benefits are not guaranteed and are subject to annual legislative appropriation. In the event legislative appropriation or available funds fail to provide full subsidy benefits to all participants, benefits may be reduced or cancelled. The Village’s contributions to the HIS Plan totaled $24,078 for the fiscal year ended September 30, 2015. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions – At September 30, 2015, the Village reported a liability of $641,219 for its proportionate share of the HIS Plan’s net pension liability. The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2015. The Village’s proportionate share of the net pension liability was based on the Village’s 2014-15 fiscal year contributions relative to the 2013-14 fiscal year contributions of all participating members. At June 30, 2015, the Village's proportionate share was 0.006287427 percent, which was an increase of 0.00077 percent from its proportionate share measured as of June 30, 2015. For the fiscal year ended September 30, 2015, the Village recognized pension expense of $59,255. In addition the Village reported deferred outflows of resources and deferred in flows of resources related to pensions from the following sources:

Deferred Outflows Deferred InflowsDescription of Resources of ResourcesDifferences between expected and -$ -$ actual experienceChange of assumptions 50,447 - Net difference between projected and actual 347 - earnings on HIS Plan investmentsChanges in proportion and differences 69,359 - between Village HIS Plan contributions and proportionate share of contributionsVillage HIS Plan contributions subsequent 6,979 - to the measurement date Total 127,132$ -$



56

Note 11 – Employee Benefit Plans (continued) The deferred outflows of resources related to the HIS Plan, totaling $6,979 resulting from Village contributions to the HIS Plan subsequent to the measurement date, will be recognized as a reduction of the net pension liability in the fiscal year ended September 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to the HIS Plan will be recognized in pension expense as follows:

Fiscal Year EndingSeptember 30: Amount

2016 24,031$ 2017 24,031 2018 24,031 2019 24,030 2020 24,030

Thereafter -

Actuarial Assumptions – The total pension liability in the July 1, 2015, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 2.60 % Salary increases 3.25%, average, including inflation Municipal bond rate 4.29 % Mortality rates were based on the Generational RP-2000 with Projection Scale BB tables. The actuarial assumptions used in the July 1, 2015, valuation were based on the results of an actuarial experience study for the period July 1, 2008 through June 30, 2013. Discount Rate - The discount rate used to measure the total pension liability was 4.29%. In general, the discount rate for calculating the total pension liability is equal to the single rate equivalent to discounting at the long-term expected rate of return for benefit payments prior to the projected depletion date. Because the HIS benefit is essentially funded on a pay-as-you-go basis, the depletion date is considered to be immediate, and the single equivalent discount rate is equal to the municipal bond rate selected by the HIS Plan sponsor. The Bond Buyer General Obligation 20-Bond Municipal Bond Index was adopted as the applicable municipal bond index.



57

Note 11 – Employee Benefit Plans (continued) Sensitivity of the Village’s Proportionate Share of the Net Position Liability to Changes in the Discount Rate - The following represents the Village’s proportionate share of the net pension liability calculated using the discount rate of 4.29%, as well as what the Village’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is one percentage point lower (3.29%) or one percentage point higher (5.29%) than the current rate:

Current1% Decrease Discount Rate 1% Increase

(3.29%) (4.29%) (5.29%)

Village's proportionate share of the net pension liability 730,639$ 641,219$ 566,656$

Pension Plan Fiduciary Net Position - Detailed information regarding the HIS Plan’s fiduciary net position is available in the separately issued FRS Pension Plan and Other State-Administered Systems Comprehensive Annual Financial Report. Payables to the Pension Plan - At September 30, 2015, the Village reported a payable in the amount of $0 for outstanding contributions to the HIS Plan required for the fiscal year ended September 30, 2015. Note 12 – Risk Management and Insurance The Village 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 commercial insurance is carried. Specifically, the Village purchases commercial insurance for property, medical benefits, workers’ compensation, general liability, automobile liability, errors and omissions, and directors and officers liability. Claims expenditures and liabilities are reported when it is probable that a loss has occurred and the amount of loss can be reasonably estimated. The Village is also covered by Florida Statutes under the Doctrine of Sovereign Immunity which effectively limits the amount of liability of municipalities to individual claims of $100,000 - $200,000 for all claims relating to the same incident. There were no settlements that exceeded insurance coverage in the last three years. Note 13 – Commitments and Contingencies Contingencies: There are various claims and legal actions pending against the Village for which no provision has been made in the financial statements. In the opinion of the Village’s attorneys, liabilities arising from these claims and legal actions, if any, could range from the amount of the Villages deductible which is $25,000 to judgments in excess of insurance coverage, which is $3,000,000.



58

Note 13 – Commitments and Contingencies (continued) Commitments: Construction contracts of the governmental and enterprise funds consist of the following:

Contract Completed Balance toProject Amount to Date Complete

Wastewater Collection and Transmission Project Reynolds Water Islamorada, LLC 99,957,623$ 93,815,324$ 6,142,299$

Agreement for Police Services: The Village has had contracts with the Monroe County Sheriff’s Office for the provision of professional police services since incorporation. The previous contract was for the period of October 1, 2009 through September 30, 2015. On September 26, 2014, the Village entered into a contract with Monroe County Sheriff’s Office to provide professional police services for the period from October 1, 2014 through September 30, 2019. Costs for local police services under this contract for the year ended September 30, 2015, were $1,690,652. Agreement for Solid Waste Collection Services: The Village had an exclusive franchise agreement with Advanced Disposal Services Solid Waste Southeast, Inc. for the provision of solid waste, yard waste and recycling collection and disposal services from October 1, 2003 through September 30, 2013. On December 13, 2012, in anticipation of expiration of the franchise agreement, the Village Council created an Ad Hoc Solid Waste Services Citizens Advisory Committee to provide recommendations for the future provision of these services to the Village, specifically with regard to competitive procurement and levels of service. Recommendations were provided and on March 15, 2013, the Village Council directed that the services be competitively solicited and on August 23, 2013, the Village issued a Request for Proposals (RFP-13-03) to competitively procure the services. On September 12, 2013, pending completion of the competitive selection process, the existing franchise agreement was amended to extend the term through December 31, 2013. The Advisory Committee evaluated the single proposal received in response to RFP-13-03, from Advanced Disposal Services Solid Waste Southeast, Inc., and found that the proposer had proven qualified to provide the services by doing so for the Village for the last ten (10) years. On October 23, 2013, the Evaluation Committee recommended the Village Council award a new exclusive franchise agreement to the proposer. The Village Council approved the Evaluation Committee’s recommendations, and on November 14, 2013, the Village entered into a contract with Advanced Disposal Services Solid Waste Southeast, Inc. to provide residential and commercial solid waste, yard waste and recycling collection and disposal services for the period from January 1, 2014 through December 31, 2023. Costs for solid waste, yard waste and recycling collection and disposal services under this contract for the year ended September 30, 2015, were $1,615,547.



59

Note 14 – Change in Accounting Principle The Village has determined that a restatement to the October 1, 2014, beginning net position was required to recognize the change in accounting principle for implementation of Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions – an amendment of GASB Statement No. 27, as well as Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date – an amendment of GASB Statement No. 68, as of October 1, 2014, through which accounting for pension plans and the related disclosure requirements were modified. This adjustment resulted in a change to the beginning net position of the Village as follows.

Net position, Governmental Activities, as previously reported 34,470,837$ Implementation of GASB 68 (1,143,565)

Beginning net position, Governmental Activities, as restated 33,327,272$

REQUIRED SUPPLEMENTARY INFORMATION


Variance with Original Final Actual Final Budget

RevenuesTaxes

Ad valorem 6,417,440$ 6,417,440$ 6,560,162$ 142,722$ Communication services tax 336,820 336,820 321,886 (14,934)

Permits, fees and assessmentsFranchise fees 500,000 500,000 527,810 27,810 Building permits 1,151,800 1,171,800 1,556,233 384,433

IntergovernmentalLocal government one-half cent sales tax 1,057,960 1,057,960 1,105,954 47,994 State revenue sharing 234,500 234,500 255,969 21,469 Other 54,500 74,500 179,138 104,638

Charges for services 583,000 593,600 791,026 197,426 Fines and forfeitures 46,500 94,500 109,595 15,095 Interest 10,000 10,000 5,708 (4,292) Miscellaneous 32,000 55,700 276,317 220,617

Total revenues 10,424,520 10,546,820 11,689,798 1,142,978

ExpendituresGeneral government

LegislativePersonnel services 64,590 64,590 64,590 - Operating 203,100 203,100 194,027 9,073

Total legislative 267,690 267,690 258,617 9,073

Village manager/Village clerkPersonnel services 444,870 442,370 481,863 (39,493) Operating 99,130 142,630 133,326 9,304

Total Village manager/Village clerk 544,000 585,000 615,189 (30,189)

Finance and administrative/ITPersonnel services 772,210 766,210 595,790 170,420 Operating 709,400 715,400 689,042 26,358

Total finance and administrative/IT 1,481,610 1,481,610 1,284,832 196,778

LegalPersonnel services 195,290 195,290 193,576 1,714 Operating 385,830 370,830 82,370 288,460

Total legal 581,120 566,120 275,946 290,174

Planning and ZoningPersonnel services 544,700 544,700 532,757 11,943 Operating 181,080 201,080 217,136 (16,056)

Total planning and zoning 725,780 745,780 749,893 (4,113) Total general government 3,600,200 3,646,200 3,184,477 461,723

Budgeted Amounts

ISLAMORADA, VILLAGE OF ISLANDSSCHEDULE OF REVENUES, EXPENDITURES AND

GENERAL FUNDCHANGES IN FUND BALANCES–BUDGET AND ACTUAL

60


Expenditures (Continued)Public safety

Law enforcementPersonnel services 52,820$ 52,820$ 54,078$ (1,258)$ Operating 1,879,680 1,874,680 1,690,518 184,162

Total law enforcement 1,932,500 1,927,500 1,744,596 182,904

Fire control and EMSPersonnel services 2,701,960 2,701,960 2,780,273 (78,313) Operating 470,620 494,320 451,397 42,923

Total fire control and EMS 3,172,580 3,196,280 3,231,670 (35,390)

Building servicesPersonnel services 559,160 559,160 529,659 29,501 Operating 74,180 74,180 73,699 481

Total building services 633,340 633,340 603,358 29,982 Total public safety 5,738,420 5,757,120 5,579,624 177,496

Physical environmentPublic works

Personnel services 185,560 182,115 168,274 13,841 Operating 173,560 250,005 264,467 (14,462)

Total physical environment 359,120 432,120 432,741 (621)

Culture and recreationPersonnel services 690,420 690,420 732,187 (41,767) Operating 599,140 602,040 765,744 (163,704) Capital outlay - 2,100 - 2,100

Total culture and recreation 1,289,560 1,294,560 1,497,931 (203,371) Total expenditures 10,987,300 11,130,000 10,694,773 435,227

Deficiency of revenues under expenditures (562,780) (583,180) 995,025 1,578,205

Other financing sourcesProceeds from the sale of capital assets - 15,000 14,606 (394) Transfers in - - 191,825 191,825

Total other financing sources - 15,000 206,431 191,431

Change in fund balance (562,780) (568,180) 1,201,456 1,769,636

Fund balance, beginning of year 3,401,392 3,401,392 3,401,392 - Fund balance, end of year 2,838,612$ 2,833,212$ 4,602,848$ 1,769,636$


CHANGES IN FUND BALANCES–BUDGET AND ACTUALGENERAL FUND


Budgeted Amounts

61


RevenuesPermits, fees and assessments 1,526,430$ 1,526,430$ 1,546,024$ 19,594$ Interest 1,000 1,000 431 (569)

Total revenues 1,527,430 1,527,430 1,546,455 19,025

ExpendituresCurrent

Physical environment 1,588,820 1,588,820 1,632,546 (43,726) Total expenditures 1,588,820 1,588,820 1,632,546 (43,726)

Excess deficiency of revenuesunder expenditures (61,390) (61,390) (86,091) (24,701)

Other financing sourcesTransfers in 2,810 2,810 2,812 2

Total other financing sources 2,810 2,810 2,812 2

Change in fund balance (58,580) (58,580) (83,279) (24,699)

Fund balance, beginning of year 126,907 126,907 126,907 -

Fund balance, end of year 68,327$ 68,327$ 43,628$ (24,699)$


CHANGES IN FUND BALANCES–BUDGET AND ACTUALSOLID WASTE FUND


Budgeted Amounts

62


REQUIRED SUPPLEMENTARY INFORMATION SEPTEMBER 30, 2015

63

Budgetary Information Florida Statutes require that all municipal governments establish budgetary systems and approve balanced annual operating budgets. The Village Council annually adopts an operating budget and appropriates funds for the General, Special Revenue, Capital Project, Debt Service, and Enterprise Funds consistent with general accepted accounting principles. The procedures for establishing budgetary data are as follows: In August of each year, the Village Manager submits a proposed operating budget to the Council

for the fiscal year commencing the following October 1. The operating budget includes proposed appropriations and the means of funding them.

Two public hearings are conducted, usually during the month of September, to obtain taxpayer comments on the proposed budgets for each fund.

Upon completion of the public hearings and before October 1, a final operating budget is legally enacted through the passage of a resolution. Passage of this resolution constitutes appropriation of the amounts specified in the budget as expenditures.

The adopted budget resolution specifies that the initial limitation on expenditures is by department or category total. The total allocated to each department, category (personnel, operating, or capital), or line item may be increased or decreased by the Village Manager so long as the modification does not exceed the Village’s total budgeted funds. Whenever a department, category or line item reallocation occurs, the Village Manager must present a resolution to the Village Council for approval amending the budget to reflect such department, category, or line item reallocation within thirty days of the date of the reallocation. Additionally, the adopting budget resolution provides that all outstanding encumbrances (open purchase orders) at the end of the fiscal year shall lapse. Those outstanding encumbrances may be re-appropriated into the next fiscal year budget. The total amount of outstanding encumbrances at year-end are reflected in assigned fund balance of the respective funds. When the year-end outstanding encumbrances are re-appropriated the next fiscal year, a use of fund balance is requested for approval by the Village Council. Florida Statutes provide that the governing body of each municipality may amend the budget at any time within the fiscal year or within 60 days following the end of the fiscal year. Within 60 days of the fiscal year-end, the Village prepares a re-appropriation budget amendment to try to ensure that budget deficiencies at department, category, or line item level are covered.


REQUIRED SUPPLEMENTARY INFORMATION SEPTEMBER 30, 2015

64

Other Post-Employment Benefits Schedule of Funding Progress

Actuarial UAAL as a

Actuarial Accrued Unfunded PercentageActuarial Value of Liability (AAL) AAL Funded Covered of CoveredValuation Assets Entry Age (UAAL) Ratio Payroll Payroll

Date (a) (b) (b-a) (a / b) (c) ((b-a) / c)

9/30/2015 -$ 24,513$ 24,513$ 0.00% 5,000,000$ 0.49%9/30/2012 - 59,799 59,799 0.00% 2,909,784 2.06%

ISLAMORADA, VILLAGE OF ISLANDS

REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF THE VILLAGE'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY -

FLORIDA RETIREMENT SYSTEM PENSION PLAN

Reporting Period Ending 9/30/2015 9/30/2014Measurement Date 6/30/2015 6/30/2014

Village's proportion of the FRS net pension liability 0.013256768% 0.011688803%Village's proportionate share of the FRS net pension liability 1,712,289$ 713,189$ Village's covered employee payroll 2,042,187$ 1,893,991$

Village's proportionate share of the FRS net pension liability as a percentage of its covered employee payroll 83.85% 37.66%FRS Plan fiduciary net position as a percentage of the FRS total pension liability 92.00% 96.09%

Notes to the Schedule:The schedule will present 10 years of information once it is accumulated.

65


REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS

FLORIDA RETIREMENT SYSTEM PENSION PLAN

Reporting Period Ending 9/30/2015 9/30/2014Measurement Date 6/30/2015 6/30/2014Contractually required FRS contribution 323,211$ 256,034$ FRS Contributions in relation to the contractually required FRS contribution 323,211 256,034

FRS Contribution deficiency (excess) -$ -$

Covered employee payroll 2,042,187$ 1,893,991$ FRS Contributions as a percentage of covered employee payroll 15.83% 13.52%


66


REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF THE VILLAGE'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY -

HEALTH INSURANCE SUBSIDY PENSION PLAN

Reporting Period Ending 9/30/2015 9/30/2014Measurement Date 6/30/2015 6/30/2014

Village's proportion of the HIS net pension liability 0.006287427% 0.005517242%Village's proportionate share of the HIS net pension liability 641,219$ 515,876$ Village's covered employee payroll 2,042,187$ 1,893,991$

Village's proportionate share of the HIS net pension liability as a percentage of its covered employee payroll 31.40% 27.24%HIS Plan fiduciary net position as a percentage of the HIS total pension liability 1.22% 1.06%


67


REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS

HEALTH INSURANCE SUBSIDY PENSION PLAN

Reporting Period Ending 9/30/2015 9/30/2014Measurement Date 6/30/2015 6/30/2014Contractually required HIS contribution 24,034$ 18,900$ HIS Contributions in relation to the contractually required HIS contribution 24,034 18,900

HIS Contribution deficiency (excess) -$ -$

Covered employee payroll 2,042,187$ 1,893,991$ HIS Contributions as a percentage of covered employee payroll 1.18% 1.00%


68

OTHER SUPPLEMENTARY INFORMATION


COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS


Special Revenue FundsAffordable Nonmajor

Housing CDBG GovernmentalTransportation Fund Fund Funds

AssetsCash and equity in pooled cash 206,432$ 654,090$ 102,087 962,609$ Due from other governments 42,927 - 21,800 64,727

Total assets 249,359$ 654,090$ 123,887$ 1,027,336$

LiabilitiesAccounts payable 4,000$ -$ -$ 4,000$ Accrued payroll 11,149 - - 11,149 Unearned revenue - 209,899 - 209,899

Total liabilities 15,149 209,899 - 225,048

Fund balancesRestricted 234,210 - - 234,210 Committed - 444,191 123,887 568,078

Total fund balances 234,210 444,191 123,887 802,288 Total liabilities and fund balances 249,359$ 654,090$ 123,887$ 1,027,336$

69

ISLAMORADA, VILLAGE OF ISLANDSCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS

FOR THE YEAR ENDED SEPTEMBER 30, 2015

Special Revenue FundsAffordable Nonmajor

Housing CDBG GovernmentalTransportation Fund Fund Funds

RevenuesTaxes 418,841$ -$ -$ 418,841$ Permits, fees and special assessments - 196,402 - 196,402 Intergovernmental 149,876 - 21,800 171,676 Interest 1,085 674 - 1,759 Miscellaneous - 5,052 - 5,052

Total revenues 569,802 202,128 21,800 793,730

ExpendituresCurrent

Transportation 527,242 - - 527,242 Economic environment - 4,277 22,913 27,190

Total expenditures 527,242 4,277 22,913 554,432

Excess (deficiency) of revenuesover (under) expenditures 42,560 197,851 (1,113) 239,298

Other financing usesTransfers in - - 125,000 125,000 Transfers out (1,573,490) (125,000) - (1,698,490)

Total other financing uses (1,573,490) (125,000) 125,000 (1,573,490)

Change in fund balances (1,530,930) 72,851 123,887 (1,334,192)

Fund balances, beginning of year 1,765,140 371,340 - 2,136,480

Fund balances, end of year 234,210$ 444,191$ 123,887$ 802,288$

70

ISLAMORADA, VILLAGE OF ISLANDS, FLORIDASCHEDULE OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES–BUDGET AND ACTUALTRANSPORTATION FUND



RevenuesTaxes 409,430$ 409,430$ 418,841$ 9,411$ Intergovernmental 149,370 149,370 149,876 506 Interest income 2,000 2,000 1,085 (915)

Total revenues 560,800 560,800 569,802 9,002

ExpendituresCurrent

Transportation 473,910 473,910 527,242 (53,332) Total expenditures 473,910 473,910 527,242 (53,332)

Excess (deficiency) of revenuesover (under) expenditures 86,890 86,890 42,560 (44,330)

Other financing sources (uses)Transfers out (2,042,000) (2,042,000) (1,573,490) 468,510

Total other financing sources (uses) (2,042,000) (2,042,000) (1,573,490) 468,510

Change in fund balance (1,955,110) (1,955,110) (1,530,930) 424,180

Fund balance, beginning of year 1,765,140 1,765,140 1,765,140 -

Fund balance, end of year (189,970)$ (189,970)$ 234,210$ 424,180$

Budgeted Amounts

71


CHANGES IN FUND BALANCES–BUDGET AND ACTUALAFFORDABLE HOUSING FUND



RevenuesPermits, fees and special assessments 68,500$ 68,500$ 196,402$ 127,902$ Interest income 1,500 1,500 674 (826) Miscellaneous 20,000 20,000 5,052 (14,948)

Total revenues 90,000 90,000 202,128 112,128

ExpendituresEconomic environment 120,000 120,000 4,277 115,723


Excess (deficiency) of revenuesover (under) expenditures (30,000) (30,000) 197,851 227,851

Other financing sources (uses)Transfers out - - (125,000) (125,000)

Total other financing sources (uses) - - (125,000) (125,000)

Change in fund balance (30,000) (30,000) 72,851 227,851

Fund balance, beginning of year 371,340 371,340 371,340 -

Fund balance, end of year 341,340$ 341,340$ 444,191$ 227,851$

Budgeted Amounts

72


CHANGES IN FUND BALANCES–BUDGET AND ACTUALDEBT SERVICE FUND



ExpendituresDebt service

Principal 1,158,900$ 1,158,900$ 1,166,094$ (7,194)$ Interest 355,600 355,600 354,723 877

Total expenditures 1,514,500 1,514,500 1,520,817 (6,317)

Excess (deficiency) of revenuesover (under) expenditures (1,514,500) (1,514,500) (1,520,817) (6,317)

Other financing sourcesTransfers in - 1,514,500 1,520,817 6,317

Total other financing sources - 1,514,500 1,520,817 6,317

Change in fund balance (1,514,500) - - -

Fund balance, beginning of year - - - -

Fund balance, end of year (1,514,500)$ -$ -$ -$

Budgeted Amounts

73


CHANGES IN NET POSITION–BUDGET AND ACTUALCAPITAL PROJECTS FUND



RevenuesTaxes 1,947,630$ 1,947,630$ 2,165,932$ 218,302$ Permits, fees and special assessments 179,000 179,000 255,833 76,833 Interest income 2,000 2,000 3,425 1,425

Total revenues 2,128,630 2,128,630 2,425,190 296,560

ExpendituresCapital outlay 592,270 592,270 505,601 86,669


Excess (deficiency) of revenuesover (under) expenditures 1,536,360 1,536,360 1,919,589 383,229

Other financing usesTransfers out - (1,869,330) (1,834,662) 34,668

Total other financing uses - (1,869,330) (1,834,662) 34,668

Change in fund balance 1,536,360 (332,970) 84,927 417,897

Fund balance, beginning of year 3,223,654 3,223,654 3,223,654 -

Fund balance, end of year 4,760,014$ 2,890,684$ 3,308,581$ 417,897$

Budgeted Amounts

74

STATISTICAL SECTION

ISLAMORADA, VILLAGE OF ISLANDS, FLORIDA STATISTICAL SECTION

For the Year Ended September 30, 2015

This part of the Islamorada, Village of Islands, Florida’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements says about the Village’s overall financial health.

Contents Page

Financial Trends These schedules contain trend information to help the reader understand how the Village’s financial performance and well-being have changed over time. 75-79 Revenue Capacity These schedules contain information to help the reader assess the Village’s most significant local revenue source, the property tax. 80-83 Debt Capacity These schedules contain information to help the reader assess the affordability of the Village’s current levels of outstanding debt and the Village’s ability to issue additional debt in the future. 84-88 Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand how the environment within which the Village’s financial activities takes place. 89-90 Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the Village’s financial report relates to the services the Village provides and activities it performs. 91-93 Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year.

Fis

cal Y

ear

2006

2007

2008

2009

2010

2011

2012

2013

(1)

2014

2015

Gov

ernm

enta

l act

ivit

ies:

Net

inve

stm

ent i

n ca

pita

l ass

ets

24,5

80,7

82$

24

,462

,737

$

26,1

85,6

25$

31

,904

,470

$

33,7

30,9

87$

33

,075

,888

$

32,6

93,8

95$

31

,983

,555

$

26,9

46,1

72$

26

,168

,847

$

Res

tric

ted

1,59

2,82

7

1,

744,

019

1,42

1,96

3

1,

765,

304

566,

272

98

6,15

4

1,14

1,55

7

1,

992,

475

4,

375,

977

2,

773,

434

Unr

estr

icte

d3,

215,

183

2,96

5,06

1

3,

239,

610

3,91

3,55

5

3,

733,

234

4,68

8,19

4

5,

345,

149

4,78

6,16

8

3,14

8,68

8

3,44

0,77

7

Tot

al g

over

nmen

tal a

ctiv

itie

s

net

pos

itio

n29

,388

,792

$

29,1

71,8

17$

30

,847

,198

$

37,5

83,3

29$

38

,030

,493

$

38,7

50,2

36$

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2012

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2014

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EX

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s:

Gen

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$ 18

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(1)

In 2

013,

var

ious

rev

enue

s an

d ex

pens

es w

ere

recl

assi

fied

for

rep

orti

ng p

urpo

ses.

Als

o, a

$20

mil

lion

sew

er a

sses

smen

t was

fin

aliz

ed in

201

3.

(con

tin

ued

)

ISL

AM

OR

AD

A, V

ILL

AG

E O

F I

SL

AN

DS

, FL

OR

IDA

CH

AN

GE

S I

N N

ET

PO

SIT

ION

LA

ST

TE

N F

ISC

AL

YE

AR

S(A

CC

RU

AL

BA

SIS

OF

AC

CO

UN

TIN

G)

77

Fis

cal Y

ear

2006

2007

2008

2009

2010

2011

2012

2013

(1)

2014

2015

Gen

eral

Fun

d:R

eser

ved

7,97

0$

12

0,13

3$

98,0

98$

84

,225

$

133,

537

$

-

$

-

$

-

$

-$

-$

Unr

eser

ved

2,32

6,93

8

2,

055,

400

2,72

1,57

2

2,

422,

114

2,18

9,86

2

-

-

-

-

-

Non

spen

dabl

e-

-

-

-

-

11

4,18

6

123,

903

37

,607

43

,467

54,2

39

Res

tric

ted

-

-

-

-

-

-

-

33,4

92

33,4

92

22

5,69

8

Com

mit

ted

-

-

-

-

-

-

-

252,

770

252,

770

17

4,09

6

Ass

igne

d-

-

-

-

-

36

,835

174,

600

30

7,83

9

30

7,83

9

24,0

10

Una

ssig

ned

-

-

-

-

-

2,97

4,67

6

3,

240,

474

3,04

5,69

8

2,76

3,82

4

4,

124,

805

Tot

al g

ener

al f

und

2,33

4,90

8$

2,

175,

533

$

2,81

9,67

0$

2,

506,

339

$

2,32

3,39

9$

3,

125,

697

$

3,53

8,97

7$

3,

677,

406

$ 3,

401,

392

$

4,60

2,84

8$

All

oth

er g

over

nmen

tal f

unds

:R

eser

ved

7,52

3,54

2$

7,

687,

878

$

894,

141

$

1,

765,

304

$

566,

272

$

-

$

-

$

-

$

-$

-$

Unr

eser

ved,

rep

orte

d in

:S

peci

al R

even

ue F

unds

50,7

69

73

,183

2,23

2,35

8

1,

370,

430

1,32

9,22

0

-

-

-

-

-

Non

spen

dabl

e-

-

-

-

-

-

-

23

1

-

-

Res

tric

ted

-

-

-

-

-

986,

154

1,

141,

557

1,95

8,98

3

4,34

2,48

5

2,

738,

639

Com

mit

ted

-

-

-

-

-

1,46

1,78

6

1,

700,

558

1,02

0,05

5

1,14

4,55

6

1,

415,

858

Ass

igne

d-

-

-

-

-

7,

500

28,7

99

-

-

-

Una

ssig

ned

-

-

-

-

-

-

-

-

-

-

T

otal

all

oth

er g

over

nmen

tal f

unds

7,57

4,31

1$

7,

761,

061

$

3,12

6,49

9$

3,

135,

734

$

1,89

5,49

2$

2,

455,

440

$

2,87

0,91

4$

2,

979,

269

$ 5,

487,

041

$

4,15

4,49

7$

Not

e: A

mou

nts

repo

rted

pri

or to

the

impl

emen

tati

on o

f G

AS

B 5

4 in

fis

cal y

ear

2011

hav

e no

t bee

n re

stat

ed.

ISL

AM

OR

AD

A, V

ILL

AG

E O

F I

SL

AN

DS

, FL

OR

IDA

FU

ND

BA

LA

NC

ES

OF

GO

VE

RN

ME

NT

AL

FU

ND

SL

AS

T T

EN

FIS

CA

L Y

EA

RS

(MO

DIF

IED

AC

CR

UA

L B

AS

IS O

F A

CC

OU

NT

ING

)

78

Fis

cal Y

ear

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

RE

VE

NU

ES

: T

axes

6,80

8,58

2$

7,

489,

687

$

6,99

8,36

0$

8,

535,

582

$

8,28

3,39

0$

8,

470,

727

$

8,51

8,97

5$

8,

696,

316

$ 8,

882,

429

$ 9,

466,

821

$

Lic

ense

s an

d pe

rmit

s1,

346,

025

839,

010

90

8,58

3

1,02

8,09

4

99

9,77

3

1,04

0,26

3

81

0,16

8

2,85

9,07

7

3,14

7,25

2

3,63

0,06

7

I

nter

gove

rnm

enta

l 10

,955

,193

3,

742,

688

3,99

4,58

4

8,

614,

693

2,87

6,22

8

1,

859,

548

2,04

3,16

3

1,

416,

297

1,

580,

382

1,

712,

737

Fin

es a

nd f

orfe

itur

es87

,523

140,

370

12

3,87

6

88,8

96

88

,681

60,7

87

32

,884

45,3

39

65,0

42

109,

595

I

mpa

ct f

ees

425,

821

14

8,89

4

285,

389

40

8,97

5

167,

819

19

7,15

4

199,

308

27

3,58

9

24

0,41

5

45

2,23

5

Cha

rges

for

ser

vice

s1,

601,

746

1,74

3,98

8

1,

864,

799

2,08

8,95

1

1,

974,

339

2,03

4,88

1

2,

171,

218

629,

575

712,

068

791,

026

I

nves

tmen

t inc

ome

316,

288

57

6,88

3

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063

71

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66

52

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11

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cell

aneo

us66

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12

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5

50,8

53

16

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5

1,80

3

11

6,11

9

63,9

91

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68

281,

369

D

onat

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and

con

trib

utio

ns1,

902,

055

19,3

61

-

20

0,43

9

1,83

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15

9,87

7

-

-

-

-

T

otal

rev

enue

s23

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,590

14

,779

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14

,599

,729

21

,087

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14

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13

,877

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13

,938

,260

13

,996

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14

,702

,340

16

,455

,173

EX

PE

ND

ITU

RE

S:

Cur

rent

:

Gen

eral

gov

ernm

ent

5,77

4,32

6

3,

060,

274

2,66

6,67

1

2,

612,

348

2,52

5,75

7

2,

295,

828

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3,09

2

2,

996,

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3,

164,

964

3,

184,

477

P

ubli

c sa

fety

3,91

3,81

5

4,

202,

069

4,22

3,57

0

4,

388,

519

4,45

4,66

5

4,

366,

628

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1,59

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5,

006,

655

6,

052,

482

5,

579,

624

P

hysi

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nvir

onm

ent

3,63

2,98

0

3,

353,

574

3,18

2,15

1

3,

406,

601

3,16

7,03

1

2,

958,

248

3,15

9,73

3

1,

880,

317

1,

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065,

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port

atio

n-

-

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-

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37

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t-

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16

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90

Cul

ture

and

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reat

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1,09

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5,92

6

1,

115,

239

1,05

5,52

0

1,

031,

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0,31

7

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244,

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1,

430,

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1,

497,

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Cap

ital

out

lay

8,51

1,64

7

1,

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9

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297,

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D

ebt s

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742,

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77

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64

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1

577,

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60

4,04

2

579,

416

65

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7

63

3,52

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1,

166,

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I

nter

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ther

fis

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harg

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8,75

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447,

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0

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33

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5

314,

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0

250,

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286,

524

354,

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Tot

al e

xpen

ditu

res

24,1

48,6

31

14,7

51,6

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15,5

07,4

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14,9

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12,0

55,6

56

12,7

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Exc

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(def

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of

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r (u

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) ex

pend

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39,0

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28,1

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1,82

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US

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871,

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Pro

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T

rans

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in1,

256,

274

1,35

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1,

531,

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0,44

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T

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out

(1,3

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)

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)

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)

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)

T

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oth

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inan

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sou

rces

(us

es)

852,

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(7

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(3

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)

1,48

3,03

0

(1

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)

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)

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)

N

et c

hang

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fun

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(3

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)$

(304

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)$

1,36

2,24

6$

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8,75

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246,

784

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2,23

1,75

8$

(131

,088

)$

Deb

t ser

vice

as

a pe

rcen

tage

of

non

-cap

ital

exp

endi

ture

s7.

58%

9.09

%8.

50%

6.96

%7.

24%

7.93

%7.

08%

7.36

%6.

90%

10.5

5%

ISL

AM

OR

AD

A, V

ILL

AG

E O

F I

SL

AN

DS

, FL

OR

IDA

CH

AN

GE

S I

N F

UN

D B

AL

AN

CE

S O

F G

OV

ER

NM

EN

TA

L F

UN

DS

LA

ST

TE

N F

ISC

AL

YE

AR

S(M

OD

IFIE

D A

CC

RU

AL

BA

SIS

OF

AC

CO

UN

TIN

G)

79

Fis

cal Y

ear

En

ded

S

epte

mb

er 3

0T

ax R

oll Y

ear

Rea

l Pro

per

tyP

erso

nal

P

rop

erty

Tot

al N

et

Ass

esse

d V

alu

eD

irec

t T

ax

Rat

e

Tot

al E

stim

ated

Act

ual

Val

ue

(1)

Est

imat

ed A

ctu

al

Val

ue

as a

% o

f N

et

Ass

esse

d V

alu

e (1

)

2006

2005

2,77

9,11

9

43

,030

2,82

2,14

9

2.26

n/a

n/a

2007

2006

3,82

9,29

7

51

,154

3,88

0,45

1

1.95

n/a

n/a

2008

2007

3,81

2,48

0

50

,180

3,86

2,66

0

1.69

n/a

n/a

2009

2008

3,47

8,90

3

44

,168

3,52

3,07

1

1.85

n/a

n/a

2010

2009

2,97

8,31

5

42

,089

3,02

0,40

4

2.04

n/a

n/a

2011

2010

2,67

6,89

4

45

,358

2,72

2,25

2

(2)

2.28

n/a

n/a

2012

2011

2,42

1,41

2

45

,299

2,46

6,71

1

(2)

2.52

n/a

n/a

2013

2012

2,41

2,95

6

42

,805

2,45

5,76

1

(2)

2.53

n/a

n/a

2014

2013

2,63

2,45

3

34

,529

2,66

6,98

2

2.53

n/a

n/a

2015

2014

2,81

0,65

6

36

,840

2,84

7,49

6

2.70

n/a

n/a

Not

e (1

) :

Not

e (2

) :

Sou

rces

: M

onro

e C

ount

y P

rope

rty

App

rais

er's

Off

ice

and

the

Vil

lage

Adm

inis

trat

ion

and

Fin

ance

Dep

artm

ent

ISL

AM

OR

AD

A, V

ILL

AG

E O

F I

SL

AN

DS

, FL

OR

IDA

NE

T A

SS

ES

SE

D V

AL

UE

AN

D E

ST

IMA

TE

D A

CT

UA

L V

AL

UE

OF

TA

XA

BL

E P

RO

PE

RT

Y

LA

ST

TE

N F

ISC

AL

YE

AR

S(D

OL

LA

RS

IN

TH

OU

SA

ND

S)

Pro

pert

yin

the

Vil

lage

isre

asse

ssed

each

year

.T

heP

rope

rty

App

rais

eres

tim

ates

aju

st(m

arke

t)va

lue

for

all

type

sof

real

prop

erty

.F

orno

n-ho

mes

tead

edpr

oper

ties

the

just

valu

eis

equa

lto

the

asse

ssed

valu

e.F

orho

mes

tead

edpr

oper

ties

,th

eju

stva

lue

isad

just

edfo

rbo

thth

eF

lori

da'S

ave

Our

Hom

es'v

alua

tion

cap

and

the

hom

este

adex

empt

ion

amou

ntto

arri

veat

the

asse

ssed

valu

e.A

sa

resu

lt,t

here

isno

form

ula

avai

labl

eto

esti

mat

e th

e re

lati

onsh

ip b

etw

een

over

all j

ust (

actu

al)

valu

e an

d as

sess

ed v

alue

.

For

m40

3,A

fter

Val

ueA

djus

tmen

tB

oard

Cer

tifi

cati

on,

from

Mon

roe

Cou

nty

Pro

pery

App

rais

er's

Off

ice,

whi

chw

asus

edto

prov

ide

prev

ious

year

s' d

ata,

was

not

yet

ava

ilab

le f

or th

is y

ear.

Val

ues

from

201

2 D

R-4

20 w

ere

used

inst

ead.

80

Fis

cal Y

ear

Tax

Rol

l Yea

r

Vil

lage

of

Isla

mor

ada

- O

per

atin

g M

illa

ge

(Dir

ect

Rat

e)M

onro

e C

oun

ty

Sch

ool B

oard

Mon

roe

Cou

nty

Sou

th F

lori

da

Wat

er

Man

agem

ent

Dis

tric

t

Flo

rid

a K

eys

Mos

qu

ito

Con

trol

Dis

tric

tO

ther

Tot

al D

irec

t an

d

Ove

rlap

pin

g R

ates

2006

2005

2.26

3.

38

2.80

0.

28

0.61

0.

41

9.74

2007

2006

1.95

3.

06

2.56

0.

28

0.55

0.

41

8.81

2008

2007

1.69

2.

95

2.27

0.

25

0.42

0.

37

7.94

2009

2008

1.85

2.

92

2.69

0.

25

0.38

0.

37

8.46

2010

2009

2.04

3.

39

3.08

0.

25

0.43

0.

37

9.56

2011

2010

2.28

3.

82

3.35

0.

25

0.46

0.

37

10.5

3

20

1220

112.

52

3.57

3.

35

0.18

0.

48

0.26

10

.36

2013

2012

2.53

3.

65

3.12

0.

18

0.52

0.

26

10.2

6

20

1420

132.

53

3.68

3.

14

0.17

0.

51

0.24

10

.27

2015

2014

2.65

3.

55

2.98

0.

15

0.50

0.

21

10.0

4

All

mil

lage

rat

es a

re b

ased

on

$1 f

or e

very

$1,

000

of a

sses

sed

valu

e.

Not

e (1

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verl

appi

ng r

ates

are

thos

e of

oth

er lo

cal a

nd c

ount

y go

vern

men

ts o

r en

titi

es th

at a

pply

to p

rope

rty

owne

rs w

ithi

n th

e V

illa

ge o

f Is

lam

orad

a.

Sou

rces

: M

onro

e C

ount

y T

ax C

olle

ctor

's O

ffic

e

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OR

AD

A, V

ILL

AG

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sses

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esse

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ding

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5

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y N

atio

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sape

ake

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las

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6

70.

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ED

CO

ST

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Ham

pton

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uite

s)9,

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7

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ss R

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ding

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10

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%

178,

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952

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6.27

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49%

Sou

rce:

Tax

rol

ls p

rovi

ded

by M

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e C

ount

y P

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er's

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AG

O

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ear

2015

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ax R

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ear

2014

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isca

l Yea

r 20

06 (

Tax

Rol

l Yea

r 20

05)

82

Fis

cal Y

ear

En

ded

Sep

tem

ber

30

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al T

axes

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ied

for

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nt

% o

f L

evy

Col

lect

ion

s in

Su

bse

qu

ent

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rs (1

)A

mou

nt

% o

f L

evy

2006

6,40

4,03

0$

6,

218,

046

$

97

.10%

N/A

6,21

8,04

6$

97.1

0%20

077,

042,

437

6,85

7,02

2

97.3

7%N

/A6,

857,

022

97

.37%

2008

6,50

9,74

2

6,

322,

552

97

.12%

N/A

6,32

2,55

2

97.1

2%20

096,

532,

479

6,35

0,51

8

97.2

1%N

/A6,

350,

518

97

.21%

2010

6,14

8,93

9

6,

000,

543

97

.59%

N/A

6,00

0,54

3

97.5

9%20

116,

217,

352

6,01

0,98

9

96.6

8%N

/A6,

010,

989

96

.68%

2012

6,32

4,40

1

6,

066,

519

95

.92%

N/A

6,06

6,51

9

95.9

2%20

136,

220,

197

6,02

4,10

9

96.8

5%N

/A6,

024,

109

96

.85%

2014

6,45

3,62

5

6,

230,

467

96

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N/A

6,23

0,46

7

96.5

4%20

157,

688,

241

7,10

5,27

9

92.4

2%N

/A7,

105,

279

92

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Not

e (1

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his

info

rmat

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is n

ot a

vail

able

fro

m M

onro

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ount

y

Sou

rces

: M

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ount

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ax C

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f Is

lam

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a A

dmin

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d F

inan

ce D

epar

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t

ISL

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OR

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ILL

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DS

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PR

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X L

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AN

D C

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ION

SL

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EN

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CA

L Y

EA

RS

Tot

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to D

ate

Col

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ed w

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he

Fis

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of t

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83

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Gen

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O

bli

gati

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Bon

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ond

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ayab

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f N

et A

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Val

ue

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Per

Cap

ita

(2)

2006

-$

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27,6

36$

4,

144,

818

$

3,94

0,38

6$

19,5

12,8

40$

0.69

%2,

765

2007

-

10,6

53,2

10

3,98

0,77

7

4,40

2,37

6

19,0

36,3

63

0.49

%2,

663

2008

-

6,64

9,26

2

7,11

4,16

6

4,20

8,21

4

17,9

71,6

42

0.47

%2,

527

2009

-

8,36

7,30

0

8,04

1,24

7

4,42

8,93

7

20,8

37,4

84

0.59

%2,

927

2010

-

7,79

0,31

0

7,55

1,87

6

4,19

6,48

7

19,5

38,6

73

0.65

%2,

735

2011

-

7,18

6,26

7

7,04

1,91

5

3,96

7,81

0

18,1

95,9

92

0.67

%2,

960

2012

-

6,60

6,85

3

6,50

8,81

1

3,73

2,54

5

16,8

48,2

09

0.68

%2,

733

2013

-

6,01

7,48

9

6,06

4,96

6

26,2

64,1

66

38

,346

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0.

69%

5,96

6

20

14-

11

,383

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15

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46,6

37,6

95

73

,465

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2.

75%

11,8

26

2015

-

10,5

82,9

52

11,5

82,9

48

81

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750,

867

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(htt

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refo

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2012

Adj

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DR

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dat

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2012

: $2

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AG

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Act

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tem

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bond

s ou

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of

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tem

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30, 2

015.

85

The

Vil

lage

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rter

and

the

Con

stit

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the

Sta

te o

f F

lori

da, F

lori

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200

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lega

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tem

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86

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tem

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30,

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over

nm

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Hal

f C

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Sal

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and

2n

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Op

tion

Gas

Tax

es (

5)

Was

tew

ater

S

pec

ial

Ass

essm

ents

(3)

Mar

ina

Op

erat

ing

Rev

enu

es (

1)

Les

s M

arin

a O

per

atin

g

Exp

ense

s (4)

Net

A

vail

able

R

even

ue

Pri

nci

pal

Inte

rest

Cov

erag

e

2006

1,60

2,39

5$

-$

-$

1,

495,

525

$

59

1,44

8$

(5

38,3

35)

$

3,

151,

033

$

997,

059

$

59

6,84

2$

1.98

2007

1,59

2,61

0

-

-

59

5,92

1

64

6,19

3

(6

22,1

74)

2,

212,

550

938,

467

62

3,26

0

1.42

2008

1,62

9,53

0

-

-

59

8,38

3

48

5,54

5

(4

98,0

31)

2,

215,

427

1,17

0,52

7

69

6,63

5

1.19

2009

1,52

2,17

7

826,

193

-

522,

799

767,

204

(737

,258

)

2,90

1,11

5

1,

247,

357

664,

378

1.

5220

101,

606,

275

86

3,07

5

-

46

0,37

4

90

8,64

0

(7

57,1

27)

3,

081,

237

1,29

8,81

3

76

8,73

2

1.49

2011

1,70

0,86

2

917,

261

-

398,

927

1,01

4,07

5

(871

,416

)

3,15

9,70

9

1,

342,

680

747,

424

1.

5120

121,

674,

732

89

8,54

2

-

44

9,29

0

1,

017,

544

(7

33,3

50)

3,

306,

758

1,34

7,97

7

69

9,33

4

1.62

2013

1,78

1,55

2

951,

618

-

1,58

5,51

9

1,13

9,14

3

(812

,446

)

4,64

5,38

6

1,

488,

031

628,

835

2.

1920

141,

933,

123

1,

030,

975

-

17

5,21

8

1,

335,

278

(9

38,5

95)

3,

535,

999

1,25

4,80

6

28

2,92

6

2.30

2015

2,16

5,93

2

1,10

5,95

4

51

4,82

0

63

1,93

9

1,

341,

554

(9

29,5

51)

4,

830,

648

1,94

7,93

0

59

2,70

6

1.90

Not

e (1

) : M

arin

a re

venu

es n

ot p

ledg

ed a

gain

st d

ebt s

ervi

ce u

ntil

issu

ance

of

2004

A P

ubli

c Im

prov

emen

t Rev

enue

Bon

d.

Not

e (3

) : R

efle

cts

only

thos

e w

aste

wat

er a

sses

smen

ts p

ledg

ed a

gain

st b

onds

; In

2013

pre

paym

ents

for

sec

ond

RS

A w

aste

wat

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sses

smen

t rec

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d.

Not

e (4

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arin

a op

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ing

expe

nses

sho

wn

excl

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prov

isio

n fo

r de

prec

iati

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nd a

mor

tiza

tion

(no

n-ca

sh it

em).

Not

e (5

) : P

ledg

ed f

or $

6 m

illi

on P

avin

g L

oan

asso

ciat

ed w

ith

was

tew

ater

cap

ital

pro

ject

.

Sou

rce:

Isl

amor

ada,

Vil

lage

of

Isla

nds

Fin

ance

Dep

artm

ent

ISL

AM

OR

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ILL

AG

E O

F I

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PL

ED

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D R

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LA

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YE

AR

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Imp

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Not

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Deb

t S

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Not

e (2

) : L

ocal

Gov

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alf

Cen

t Sal

es T

ax p

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gain

st d

ebt s

ervi

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or S

erie

s 20

07 r

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whi

ch c

onve

rted

to f

ixed

20

year

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n A

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t 200

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fund

ed in

Nov

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r 20

12.

87

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OR

AD

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ILL

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AC

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y di

rect

and

ove

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ping

gov

ernm

enta

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debt

as

of S

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mbe

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, 201

5.

88

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rV

illa

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1)

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son

al I

nco

me

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Per

C

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a P

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nal

In

com

e (2

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Mon

roe

Cou

nty

Un

emp

loym

ent

Rat

e (2)

2006

7,05

7

4,28

7,43

3,00

0$

(a)

57,8

57

(a

)2.

5%

2007

7,14

9

4,48

7,86

0,00

0

(a)

61,1

26

(a

)2.

8%

2008

7,11

3

4,57

7,90

5,00

0

(a)

62,4

56

(a

)4.

4%

2009

7,12

0

4,40

2,56

6,00

0

(a)

60,1

73

(a

)6.

6%

2010

7,14

4

4,43

8,34

1,00

0

(b)

60,2

94

(b

)7.

4%

2011

6,14

7

4,65

1,37

9,00

0

(b)

62,8

43

(b

)6.

6%

2012

6,16

5

4,35

4,12

6,00

0

(b)

58,9

41

(b

)5.

0%

2013

6,42

7

4,24

5,05

0,00

0

(c)

56,7

45

(c

)4.

0%

2014

6,21

2

4,41

5,28

4,00

0

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93

OTHER REPORTS OF INDEPENDENT AUDITORS

1401 MANATEE AVENUE WEST, SUITE 1200 • BRADENTON, FLORIDA 34205 • 941-747-4483 • FAX 941-747-6035 • www.mjcpa.com MEMBERS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS

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

Village Council and Village Manager Islamorada, Village of Islands, Florida We have audited, in accordance with the 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 the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Islamorada, Village of Islands, Florida (the “Village”), as of and for the year ended September 30, 2015, and the related notes to the financial statements, which collectively comprise the Village’s basic financial statements, and have issued our report thereon dated June 20, 2016. Our report includes a reference to the change in accounting principles resulting from the implementation of GASB Statement No. 68, Accounting and Financial Reporting for Pensions – an amendment of GASB Statement No. 27, as well as Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date – an amendment of GASB Statement No. 68. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Village’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Village’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Village’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 entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. 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.

95

Compliance and Other Matters As part of obtaining reasonable assurance about whether the Village’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.


1401 MANATEE AVENUE WEST, SUITE 1200 • BRADENTON, FLORIDA 34205 • 941-747-4483 • FAX 941-747-6035 • www.mjcpa.com MEMBERS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS

INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR STATE PROJECT AND ON INTERNAL CONTROL OVER COMPLIANCE

Village Council and Village Manager Islamorada, Village of Islands, Florida Report on Compliance for Each Major State Project We have audited Islamorada, Village of Islands, Florida’s (the “Village”) compliance with the types of compliance requirements described in the Department of Financial Services’ State Projects Compliance Supplement, that could have a direct and material effect on each of the Village’s major state projects for the year ended September 30, 2015. The Village's major state financial assistance projects are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its state projects. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for each of the Village’s major state projects based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter 10.550, Rules of the Auditor General. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major state project occurred. An audit includes examining, on a test basis, evidence about the Village's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major state project. However, our audit does not provide a legal determination of the Village's compliance. Opinion on Each Major Federal Program and State Project In our opinion, the Village complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major state projects for the year ended September 30, 2015.

97

Report on Internal Control Over Compliance Management of the Village is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the Village’s internal control over compliance with the types of requirements that could have a direct and material effect on each major state project to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing our opinion on compliance for each major state project and to test and report on internal control over compliance in accordance with Chapter 10.550, Rules of the Auditor General, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Village’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a state project on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a state project will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a state project that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of Chapter 10.550, Rules of the Auditor General. Accordingly, this report is not suitable for any other purpose.


CFDA/CFDA No. Grantors Number Expenditures

Federal Awards

U.S. Department of Homeland SecurityPassed through Florida Division of Emergency Management

Assistance to Firefighters Grant 97.044 15-CI-N2-05-70-01-410 4,970$ Total U.S. Department of Homeland Security 4,970

U.S. Department of AgriculturePassed through Department of Agriculture and Consumer Services

Volunteer Fire Assistance Grant 10.664 N/A 11,758 Total U.S. Department of Agriculture 11,758

U.S. Department of DefenseDirect - Department of the Army, Office of the Chief of Engineers

Florida Keys Water Quality Program - Section 109 - Recovery 12.128 N/A 87,444 Total U.S. Department of Defense 87,444

Total Expenditures of Federal Awards 104,172$

State Financial AssistanceFlorida Department of Health

EMS Matching Grant 64.003 M4071 16,254$

Florida Department of Environmental ProtectionStatewide Surface Water Restoration and Wastewater Projects 37.039 LP44050 5,213,472 Wastewater Treatment Facility Construction 37.077 WW882020 24,520,413

Total Florida Department of Environmental Protection 29,733,885

Total Expenditures of State Financial Assistance 29,750,139$

Notes to Schedule of Expenditures of Federal Awards and State Financial Assistance

Basis of Presentation

Loans OutstandingThe Village had $82,759,584 in State Revolving Fund loans outstanding at September 30, 2015.


SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCEFOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015

Agency / Pass-through Entity

The Schedule of Federal Awards and State Financial Assistance includes Federal and State grant activity of Islamorada, Village of Island,Florida, and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with therequirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations and Chapter 10.550, Rules ofthe Auditor General. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in, thepreparation of the basic financial statements.

98

99

ISLAMORADA, VILLAGE OF ISLANDS, FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS


SECTION I SUMMARY OF AUDIT RESULTS

Financial Statements Type of auditor’s report issued Unmodified Internal control over financial reporting: Material weaknesses identified? yes X no Significant deficiencies identified not considered to be material weaknesses? ____ yes X none reported Noncompliance material to financial statements noted? ____ yes X no State Financial Assistance Projects Internal Control over major state programs: Material weaknesses identified? ____ yes X no Significant deficiencies identified not considered to be material weaknesses? ____ yes X none reported Type of auditor’s report issued on compliance for major Federal programs and state financial assistance projects: Unmodified Identification of major state financial assistance projects: CSFA Number Name of State Project or Cluster 37.077 and 37.039 State Revolving Loan Program

100

ISLAMORADA, VILLAGE OF ISLANDS, FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS


SECTION II FINANCIAL STATEMENT FINDINGS AND RESPONSES

None reported

SECTION III STATE FINANCIAL ASSISTANCE PROJECT

FINDINGS AND QUESTIONED COSTS

None reported.

SECTION IV SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS

The prior audit finding numbers 2014-001 through 2014-003 were corrected by the Village and are not repeated in the current year.

1401 MANATEE AVENUE WEST, SUITE 1200 • BRADENTON, FLORIDA 34205-7440 • 941-747-4483 • 855-891-0070 • FAX 941-747-6035 MEMBERS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • WWW.MJCPA.COM

INDEPENDENT AUDITOR'S MANAGEMENT LETTER

Village Council and Village Manager Islamorada, Village of Islands, Florida Report on the Financial Statements We have audited the financial statements of Islamorada, Village of Islands, Florida’s (the "Village"), as of and for the fiscal year ended September 30, 2015, and have issued our report thereon dated July 22, 2016. Auditor’s Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter 10.550, Rules of the Auditor General. Other Reports and Schedule We have issued our Independent Auditor’s Report on Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards; Independent Auditor’s Report on Compliance for Each Major State Project and Report on Internal Control over Compliance; and Schedule of Findings and Questioned Costs. Disclosures in those reports and schedule, which are dated July 20, 2016, should be considered in conjunction with this management letter. Prior Audit Findings 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. Corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report as recommendations 2014-001, 2014-002, and 2014-003 were corrected during the current year and are not repeated in this year’s report. Official Title and Legal Authority Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. Islamorada, Village of Islands, Florida was created pursuant to Chapter 97-348, Florida Statutes, as of December 31, 1997. Additional information on the Village’s creation is disclosed within the Village’s footnotes.

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Financial Condition Section 10.554(1)(i)5.a., Rules of the Auditor General, requires that we report the results of our determination as to whether or not the Village has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and identification of the specific condition(s) met. In connection with our audit, we determined that the Village did not meet any of the conditions described in Section 218.503(1), Florida Statutes. Pursuant to Sections 10.554(1)(i)5.c. and 10.556(8), Rules of the Auditor General, we applied financial condition assessment procedures. It is management’s responsibility to monitor the Village’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. Annual Financial Report Section 10.554(1)(i)5.b., Rules of the Auditor General, requires that we report the results of our determination as to whether the annual financial report for the Village for the fiscal year ended September 30, 2015, 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, 2015. In connection with our audit, we determined that these two reports were in agreement. Other Matters Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. Purpose of this Letter Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, the Mayor and Members of the Village Council, and applicable management, and is not intended to be and should not be used by anyone other than these specified parties. Bradenton, Florida July 20, 2016

1401 MANATEE AVENUE WEST, SUITE 1200 • BRADENTON, FLORIDA 34205-7440 • 941-747-4483 • 855-891-0070 • FAX 941-747-6035 MEMBERS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • WWW.MJCPA.COM

INDEPENDENT AUDITOR’S REPORT

Village Council and Village Manager Islamorada, Village of Islands, Florida We have examined Islamorada, Village of the Islands, Florida’s (the “Village”) compliance with Section 218.415, Florida Statutes, regarding the investment of public funds during the year ended September 30, 2015. Management is responsible for the Village’s compliance with those requirements. Our responsibility is to express an opinion on the Village’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 Village’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 Village’s compliance with specified requirements. In our opinion, the Village complied, in all material respects, with the aforementioned requirements for the year ended September 30, 2015. This report is intended solely for the information and use of the Village and the Auditor General, State of Florida, and is not intended to be and should not be used by anyone other than these specified parties. Bradenton, Florida July 20, 2016

Islamorada, Village of Islands rpts/2015...ISLAMORADA, VILLAGE OF ISLANDS, FLORIDA COMPREHENSIVE...

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