EAST MANATEE FIRE RESCUE DISTRICT FINANCIAL STATEMENTS SEPTEMBER 30, 2012

EAST MANATEE FIRE RESCUE DISTRICT FINANCIAL STATEMENTS SEPTEMBER 30, 2012

TABLE OF CONTENTS PAGE INDEPENDENT AUDITORS' REPORT

1–2

MANAGEMENT’S DISCUSSION AND ANALYSIS

3-8

BASIC FINANCIAL STATEMENTS GOVERNMENT-WIDE FINANCIAL STATEMENTS: STATEMENT OF NET ASSETS STATEMENT OF ACTIVITIES

9 10

FUND FINANCIAL STATEMENTS: BALANCE SHEET – GOVERNMENTAL FUNDS

11

RECONCILIATION OF THE BALANCE SHEET – GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS

12

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS

13

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES

14

NOTES TO FINANCIAL STATEMENTS

15 - 28

REQUIRED SUPPLEMENTAL INFORMATION: SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL – GENERAL FUND

29

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL – CAPITAL PROJECTS FUND

30

SCHEDULES OF FUNDING PROGRESS AND EMPLOYER CONTRIBUTIONS

31

NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION

32

EAST MANATEE FIRE RESCUE DISTRICT FINANCIAL STATEMENTS SEPTEMBER 30, 2012

TABLE OF CONTENTS – CONTINUED PAGE OTHER SUPPLEMENTAL INFORMATION: SCHEDULE OF EXPENDITURES – BUDGET AND ACTUAL – GENERAL FUND

33

SCHEDULE OF EXPENDITURES – GENERAL FUND – 2012 AND 2011

34

OTHER AUDITORS’ REPORTS INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT

AUDITING STANDARDS

MANAGEMENT LETTER

35 - 36 37 - 38

EAST MANATEE FIRE RESCUE DISTRICT STATEMENT OF NET ASSETS SEPTEMBER 30, 2012 Governmental Activities ASSETS Cash Investments Receivables (net of allowance for uncollectibles) Prepaid expenses Restricted assets: Temporarily restricted: Cash and cash equivalents Investments

$

251,753 12,277,051 72,800 39,669 24,305 1,270,447

Capital assets (net of accumulated depreciation): Land Other capital assets, net of depreciation Total assets

1,396,065 12,355,683 27,687,773

LIABILITIES Accounts payable and other current liabilities Noncurrent liabilities: Due within one year Due in more than one year Total liabilities

137,126 780,555 917,681

NET ASSETS Invested in capital assets, net of related debt Restricted for: Impact fees Unrestricted Total net assets

13,751,748

$

The accompanying notes are an integral part of these financial statements. -9-

1,294,752 11,723,592 26,770,092

EAST MANATEE FIRE RESCUE DISTRICT STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2012

Public Safety-Fire Protection Personal services Operating expenses Depreciation Interest Total program expenses

$

6,947,795 1,130,478 682,342 166,789 8,927,404

Program revenues: Capital grants Charges for services Net Program expense

118,543 26,640 8,782,221

General Revenues: Fire assessments Impact fees Investment earnings Miscellaneous Total general revenues

9,236,811 440,997 93,120 64,889 9,835,817

Increase in net assets

1,053,596

Net assets - beginning

25,716,496

Net assets - ending

$

The accompanying notes are an integral part of these financial statements. - 10 -

26,770,092

EAST MANATEE FIRE RESCUE DISTRICT BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2012 Capital Projects Fund

General Fund ASSETS Cash and cash equivalents Investments Receivables (net of allowance for uncollectibles) Prepaid expenses TOTAL ASSETS LIABILITIES AND FUND BALANCES Accounts payable Accrued expenses Total liabilities

$

$

72,800 39,669

24,305 1,270,447

$

-

276,058 13,547,498 72,800 39,669

$

12,641,273

$

1,294,752

$

13,936,025

$

27,949 109,177 137,126

$

-

$

27,949 109,177 137,126

Fund balances: Nonspendable Nonspendable Spendable: Restricted Committed Assigned Unassigned Total fund balances TOTAL LIABILITIES AND FUND BALANCES

251,753 12,277,051

Total Governmental Funds

$

39,669

-

39,669

3,300,000 1,000,000 8,164,478 12,504,147

1,294,752 1,294,752

1,294,752 3,300,000 1,000,000 8,164,478 13,798,899

12,641,273

$

1,294,752

$

The accompanying notes are an integral part of these financial statements. - 11 -

13,936,025

EAST MANATEE FIRE RESCUE DISTRICT RECONCILIATION OF THE BALANCE SHEET - GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS SEPTEMBER 30, 2012

Amounts reported for governmental activities in the statement of net assets are different because: Fund Balance-Total Governmental Funds

$

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

13,751,748

Long-term liabilities, including compensated absences and OPEB liability are not due and payable in the current period and therefore, are not reported in the funds. NET ASSETS OF GOVERNMENTAL ACTIVITIES

(780,555) $

The accompanying notes are an integral part of these financial statements. - 12 -

13,798,899

26,770,092

EAST MANATEE FIRE RESCUE DISTRICT STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2012 Capital Projects Fund

General Fund REVENUES Special assessments Ad valorem tax Impact fees Capital grants Charges for services Investment earnings Miscellaneous Total revenues

$

EXPENDITURES Current: Personal services Operating Debt service: Principal Interest Capital outlay Total expenditures Net change in fund balance

$

5,533,241 3,703,570 440,997 118,543 26,640 93,120 65,743 9,981,854

6,876,034 1,113,573

1,000,000 650,229 9,639,836

346,308 170,757 517,065

1,346,308 170,757 650,229 10,156,901

(69,396)

12,504,147

(175,047)

1,364,148 $

1,294,752

The accompanying notes are an integral part of these financial statements - 13 -

$

-

12,609,798 $

440,997 6,672 447,669

6,876,034 1,113,573

(105,651)

FUND BALANCES - Beginning FUND BALANCES - Ending

5,533,241 3,703,570 118,543 26,640 86,448 65,743 9,534,185

Total Governmental Funds

13,973,946 $

13,798,899

EAST MANATEE FIRE RESCUE DISTRICT RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2012

Amounts reported for governmental activities in the statement of activities are different because: Net changes in fund balances - total governmental funds

$

Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense and gain/loss on disposal of capital assets in the current period.

(49,872)

The repayment of the principal of long-term debt consumes the current financial resources of governmental funds. However, the transaction has no effect on net assets.

1,346,308

Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES

The accompanying notes are an integral part of these financial statements. - 14 -

(175,047)

(67,793) $

1,053,596

EAST MANATEE FIRE RESCUE DISTRICT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following is a summary of the significant accounting policies followed by the East Manatee Fire Rescue District, Manatee County, Florida: (a)

Reporting Entity - East Manatee Fire Rescue District (the District) is a public municipal corporation in the State of Florida created by Laws of Florida 80-538 of the Legislature of the State of Florida in 1980. It is an independent special district. The financial statements were prepared in accordance with the Governmental Accounting Standards Board, (GASB). Under the provisions of those standards, the financial reporting entity consists of the primary government, organizations for which the District Board of Commissioners is considered to be financially accountable, and other organizations for which the nature and significance of their relationship with the District are such that, if excluded, the financial statements of the District would be considered incomplete or misleading. There are no entities considered to be component units of the District; therefore, the financial statements include only the operations of the District. Revenue is provided for in the Bill by special assessments against taxable real estate lying within the territorial bounds of the District as defined by the State of Florida. Disbursements are made for maintenance and upkeep of the fire stations, purchase of firefighting and rescue equipment, payment of wages, employee benefits, and administrative expenses. In 2003 a referendum was passed permitting the assessment of ad valorem taxes up to .8 mills. The State of Florida passed Legislation, which took effect June, 1985, and provides for the District to collect impact fees to defray the cost of improvements required to provide fire and emergency service to the new users of the District. The impact fees collected are to be used exclusively for the acquisition, purchase or construction of new facilities and equipment required to provide these services to the new users in the District, and the related debt service.

(b)

Basis of Presentation – The District’s financial statements include Governmentwide (which reports the District as a whole) and Fund financial statements (which report only on the General and Capital Projects Funds). The financial statements present only governmental activities, as the District conducts no business type activities. The District does not have fiduciary funds. Basis of Accounting: Financial Statements – Government Wide Statements- The Government-Wide Financial Statements (Statement of Net Assets and Statement of Activities) are prepared using the economic resources measurement focus and the accrual basis of accounting. For the most part, interfund activity has been removed from these statements. The District’s net assets are reported in three parts (as applicable): invested in capital assets, net of related debt; restricted net assets, and unrestricted net assets. The statement of activities reports direct program expenses offset by program revenues. -15 -

EAST MANATEE FIRE RESCUE DISTRICT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED The amounts reported as program revenues include charges for services, as well as capital and operating grants and contributions, when applicable. General revenues include taxes and other items not properly included as program revenue. Financial Statements – Fund Financial Statements – The District’s accounts are organized on the basis of funds, which are self-balancing set of accounts that comprise its assets, liabilities, reserves, fund equity, revenues and expenditures. The District utilizes Governmental funds, which follow the modified accrual basis of accounting. Under this method, revenues are recorded when they become 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. The District considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures are generally recorded when a fund liability is incurred. The District reports the following governmental funds, which are both considered major funds: Governmental Funds (1)

General Fund - The General Fund is the general operating fund of the District. All general tax revenues are accounted for in this fund. From the Fund are paid the general personal service and operating expenditures, as well as budgeted capital expenditures and debt service.

(2)

Capital Projects Fund - The Capital Projects Fund is used to account for Impact Fees collected on new construction. These revenues can only be used for the acquisition, construction or purchase of assets required to provide fire protection and emergency services and related debt service.

(c)

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

(d)

Budgets and Budgetary Accounting - The District prepares an annual operating budget for the fiscal year commencing October 1. Prior to September 1 of each year, the Secretary/Treasurer of the District's Board of Commissioners prepares a proposed budget for the upcoming fiscal year. The budget is based on an analysis of prior year actual revenues and expenditures along with anticipated spending and revenue sources. - 16 -

EAST MANATEE FIRE RESCUE DISTRICT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Once the proposed budget is compiled, it is brought before the Board of Commissioners for approval. On or before September 1 of each year, the approved operating budget is sent to the County Clerk’s office. Expenditures should not exceed the total appropriations. Appropriations lapse at the end of the year. (e)

Interfund Receivables/Payables - Interfund receivables/payables arise from temporary interfund transfers. When a fund has an interfund receivable and an interfund payable to the same fund, the amounts are recorded in separate accounts. Internal activity and balances between governmental funds has been eliminated in the government-wide statement of net assets, as applicable.

(f)

Property Taxes - Property taxes become due and payable on November 1 of each year. The county tax collector remits the District's portion as such revenues are received. The District collects nearly all of its tax revenues during the period November 1 through April 1, at which time the taxes become delinquent. The maximum rates of tax are set by the Legislature of the State of Florida. Actual assessment amounts vary based on a sliding scale of property values and type of property involved and is determined by the Board of Commissioners of the District. The key dates in the property tax cycle are as follows: Assessment roll validated Beginning of fiscal year for which taxes have been levied Tax bills rendered and due Property taxes payable: Maximum discount Delinquent Tax certificates sold Fiscal year begins Fiscal year ends

July 1 October 1 November 1 November 30 April 1 May 31 October 1 September 30

Property taxes are recognized as revenue in the fiscal year for which the taxes have been levied to the extent they result in current receivables. Under the system outlined above, no material amount of taxes is receivable after the end of the fiscal year. (g) Net Assets – Net assets are reported in three parts as applicable: Invested in capital assets, net of related debt; restricted and unrestricted. When both restricted and unrestricted resources are available, restricted resources are used first, and then unrestricted resources, as they are needed.

- 17 -

EAST MANATEE FIRE RESCUE DISTRICT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED (h) Fund Balance – The District follows Governmental Accounting Standards Board Statement (GASB) 54. GASB 54 established fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. Fund balance classifications, under GASB 54, are Nonspendable and Spendable. Spendable is then further classified as Restricted, Committed, Assigned, and Unassigned. These classifications reflect not only the nature of funds, but also provide clarity to the level of restriction placed upon fund balance. Fund Balance can have different levels of restraint, such as external versus internal compliance requirements. Unassigned fund balance is a residual classification within the General Fund. The General Fund should be the only fund that reports a positive unassigned balance. In accordance with GASB Statement 54, the District classifies governmental fund balances as follows: Non-spendable – includes fund balance amounts that cannot be spent either because it is not in spendable form or because of legal or contractual requirements. Spendable Fund Balance: 

Restricted – includes amounts that can be spent only for specific purposes because of State or Federal laws or enabling legislation, or which are externally restricted by providers, such as creditors or grantors.



Committed – includes amounts that can be spent only for specific purposes that are approved by a formal action of the Board of Commissioners through a resolution or the budget process.



Assigned – includes amounts designated for a specific purpose by the Board of Commissioners through a resolution or the budget process, or by the Fire Chief, which are neither restricted or committed.



Unassigned – includes residual positive fund balance within the General Fund which has not been classified within the other above mentioned categories. Unassigned fund balance may also include negative balances for any governmental fund if expenditures exceed amounts restricted, committed, or assigned for those specific purposes.

The District uses restricted amounts first when both restricted and unrestricted fund balance is available, unless there are legal documents/contracts that prohibit doing this, such as in grant agreements requiring dollar for dollar spending. Additionally, the District would first use committed, then assigned, and lastly unassigned amounts of unrestricted fund balance when expenditures are made. The District does not have a formal minimum fund balance policy.

- 18 -

EAST MANATEE FIRE RESCUE DISTRICT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED General Fund $ 39,669

Non-Spendable: Prepaid Expenses Spendable: Committed to: General Reserves Health Insurance subsidy

2,000,000 1,300,000 3,300,000

Assigned to: Emergency Reserve

1,000,000

Unassigned: Unassigned Total Fund Balances

8,164,478 $ 12,504,147

Spendable: Restricted – Impact fees

Capital Projects Fund $ 1,294,752

Total Fund Balances (i)

$

1,294,752

Deposits and Investments - Florida Statute 218.415 authorizes the District to invest in the following: (1)

Local Government Surplus Funds Trust Fund or an intergovernmental investment pool authorized through the Florida Interlocal Cooperation Act, (including the Manatee County investment pool)

(2)

Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating company.

(3)

Interest bearing time deposits or savings accounts in state-certified Qualified Public Depositories as defined in Section 280.02 Florida Statutes.

(4)

Direct obligations of the U.S. Treasury. Demand and Time Deposits At September 30, 2012, the District had demand deposits held in a qualified public depository. Deposits whose values exceeded federal depository insurance limits were entirely insured or collateralized pursuant to Chapter 280 of the Florida Statutes. At September 30, 2012, the carrying amounts of the District’s deposits were $276,058 and the bank balance was $312,938.

- 19 -

EAST MANATEE FIRE RESCUE DISTRICT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Investments Credit and Concentration of Credit Risk The District has investments in the Manatee County Investment pool (the Pool). The investments in the Pool are subject to overnight withdrawal, and are recorded at fair value. The Pool is not registered with the Securities and Exchange Commission and has not been rated at September 30, 2012. Total investments at fair value of the Pool as of September 30, 2012 were approximately $632,056,000. The District’s investments included in the Pool were approximately $13,547,498. The District’s position in the pool is the same as the value of the pool shares. Interest Rate Risk The District does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. However, the Pool is limited to having investments with a maturity of three years or less from the date of purchase with a weighted average to maturity of less than two years. At September 30, 2012, the Pool had no investments with a maturity exceeding three years, other than those held with the SBA in Fund B. The Pool’s investments have a weighted average to maturity of .84 years. For further information regarding the Manatee County Investment Pool, readers should refer to the financial statements and disclosures of Manatee County, Florida. At September 30, 2012, the District had the following investments: General Fund: Manatee County Investment Pool:

Fair Value $ 12,277,051

Capital Projects Fund: Manatee County Investment Pool: Restricted – Impact Fees

$ 1,270,447

(j) Compensated Absences – It is the District’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All vacation pay is accrued when incurred in the government-wide financial statements. A liability for these amounts is reported in governmental funds only if they have matured or are payable from current financial resources. Compensated absences typically are liquidated out of the General Fund. The District has also adopted a Retirees Insurance Subsidy Plan. Upon retirement from the District, defined as: reaching age 55 with 10 years of service with the District; reaching age 52 with 25 years of service with FRS including 10 years of service with the District, the accrued time for the employee shall convert to a Retiree’s Insurance Subsidy Plan. - 20 -

EAST MANATEE FIRE RESCUE DISTRICT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Upon notification to the District by the employee of a retirement date, the District shall determine 75% of the dollar value of the employee’s current accrued sick leave. The District shall provide monthly premiums up to the dollar value of the accrued sick leave at the time the employee retires. The retiree may continue with the health/life insurance program provided by the District or may purchase similar coverage elsewhere. When the dollar value of sick leave is exhausted, the retiree may continue in the subsidy plan at their own expense. An estimate of the potential payout for sick leave under the retiree insurance subsidy plan has been recorded as a liability in the government-wide financial statements. (k) Capital Assets – Capital assets, which include property, plant, equipment, and construction in progress, are reported in the government-wide financial statements. Capital assets are defined by the District as assets with an initial, individual cost of more than $500 and an estimated useful life of longer than one year. Capital assets are recorded at historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal repair and maintenance that do not add to the value of the asset or extend the useful life of the asset are expensed as incurred. The District does not have infrastructure assets. Property, plant and equipment of the District are depreciated on a straight-line basis over the following estimated useful lives: Asset Building Improvements Ladder Trucks Fire Engines Vehicles Furniture, fixtures and equipment

Years 40 20 20 10 5 5-10

(l) Long-Term Obligations – In the government-wide financial statements, longterm debt and other long-term obligations are reported as liabilities. In the fund financial statements, no long-term obligations are reported as they are not due to be paid from current financial resources.

- 21 -

EAST MANATEE FIRE RESCUE DISTRICT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE B - CAPITAL ASSETS Capital asset activity for the year ended September 30, 2012 was: Beginning Balance

Governmental Activities: Capital assets, not being depreciated: Land Total capital assets, not being depreciated Capital assets being depreciated: Buildings and improvements Land improvements Machinery and equipment Total capital assets being depreciated Less accumulated depreciation for: Buildings and improvements Land improvements Machinery and equipment Total accumulated depreciation Total capital assets, being depreciated, net Governmental activities capital assets, net

Increases

$ 1,396,065 1,396,065

$

10,931,707 752,748 5,494,515 17,178,970 1,902,844 50,183 2,820,388 4,773,415 12,405,555 $ 13,801,620

-0-0-

Decreases $

4,047 -0629,277 633,324 282,848 18,819 380,675 682,342 (49,018) $ (49,018)

$

Ending Balance

Transfers

-0-0-

$

-0-0-

$ 1,396,065 1,396,065

-0-0(78,346) (78,346)

-0-0-0-0-

10,935,754 752,748 6,045,446 17,733,948

-0-0(77,492) (77,492) (854) (854)

-0-0-0-0-0-0-

2,185,692 69,002 3,123,571 5,378,265 12,355,683 $ 13,751,748

$

Depreciation expense was reported as a separate line item in the statement of activities in the amount of $682,342. NOTE C - LONG-TERM LIABILITIES During 2012, the District paid off a long-term note payable. Total principal payments made were $1,346,308. In addition, the District paid off the interest rate swap agreement in the amount of $154,583 which was attached to the variable rate debt. The swap payment is included as part of interest expense. Accrued Compensated Absences - As disclosed in Note A, the District provides for the accumulated benefit of earned vacation for its employees. In addition, it has adopted a Retirees Insurance Subsidy Plan through accumulated sick time. The estimated liability for the accumulated amount of vacation time was $328,570 at September 30, 2012. The estimated liability at September 30, 2012 to be paid through the Retirees Insurance Subsidy Plan for accumulated sick time was $368,366. These amounts have been recorded as liabilities in the government-wide financial statements. As they are not expected to be paid for using current financial resources, these liabilities have not been recorded in the fund financial statements. Changes in Long-Term Liabilities Long-term liability activity for the year ended September 30, 2012, was as follows: Governmental Activities: Bank of America - Mortgage Total Notes Payable OPEB Liability Compensated absences Governmental activity Long-term liabilities

Beginning Balance

Additions

Ending Balance

Reductions

$ 1,346,308 1,346,308 55,746 653,048 708,794

$

-0-027,873 485,938 513,811

$ (1,346,308) (1,346,308) -0(442,050) (442,050)

$

$ 2,055,102

$ 513,811

$ (1,788,358)

$ 780,555

- 22 -

-0-083,619 696,936 780,555

Due Within One Year $

$

-0-0-0-0-0-0-

EAST MANATEE FIRE RESCUE DISTRICT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE D - RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS Explanation of certain differences between the governmental fund balance sheet and government-wide statement of net assets. The reconciliation between the fund balance – total governmental funds as reported in the governmental fund balance sheet and net assets – governmental activities as reported in the statement of net assets, is included on page 12 of the basic financial statements. One line of that reconciliation explains “long-term liabilities, including compensated absences and OPEB liability are not due and payable in the current period and therefore are not reported in the governmental funds.” The detail of the differences is shown below: OPEB Liability Compensated Absences

$

(83,619) (696,936) (780,555)

$

Explanation of certain differences between the governmental fund statement of revenues, expenditures, and changes in fund balances and the government-wide statement of activities. The reconciliation between the net changes in fund balances – total governmental funds as reported in the statement of revenues, expenditures and changes in fund balances, and the changes in net assets as reported in the statement of activities is included on page 14 of the basic financial statements. One line in that reconciliation explains that “Governmental Funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. The detail of the differences is shown below: Capital additions included as expenditures in the funds Depreciation Expense Loss on disposal of assets (excluding proceeds)

$ 633,324 (682,342) (854) $ (49,872)

Another element of that reconciliation explains that “some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds.” The detail of the differences is shown below: Change in compensated absences Change in OEPB Change in accrued interest

- 23 -

$

(43,888) (27,873) 3,968 $ (67,793)

EAST MANATEE FIRE RESCUE DISTRICT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE E - RETIREMENT PLAN 1. Plan Description All full-time employees of the District are covered by the State of Florida Retirement System (FRS), which is administered by the Department of Management Services. Division of Retirement under the Authority of Article X, Section 14 of the State Constitution and Florida Statutes, Chapter 112 and 121. The system is a non-contributory, defined benefit, cost-sharing multipleemployer PERS (public Employee Retirement System). The pension plan provides pension benefits and disability benefits. Plan Provisions If first employed prior to July 1, 2011: Normal retirement age for “regular” employees is 62 or 30 years of service and vesting occurs after 6 years of creditable service. Normal retirement age for “special risk” employees is 55 or 25 years of service and vesting occurs after 6 years of creditable service. If first employed on or after July 1, 2011: Normal retirement age for “regular” employees is 65 or 33 years of service and vesting occurs after 8 years of creditable service. Normal retirement age for “special risk” employees is 60 or 30 years of service and vesting occurs after 8 years of creditable service. “Regular” employees who retire at age 62 and “special risk” employees who retire at age 55 are entitled to a blended rate ranging from 1.6% to 3% of their final, five-year average compensation times the number of years they were members of the system. The final, five-year average compensation is the average salary of the employee during the highest five years of employment 2. Contributions Required and Made Effective July 1, 2011 both employees and employers are required to make contributions. The District’s required contributions for the year ended September 30, 2012 ranged between 14.10% - 14.90% for special risk employees and 4.91% - 5.18% for regular employees. Required contributions by employees of both the “regular” class and “special risk” class were 3.00%. Current year’s covered payroll, which equals total payroll, was $4,556,267. Current year contributions were $597,342. Contributions contributions, Contributions contributions,

for the year ended September 30, 2011, which equaled required were $867,038 and approximated 19.5% of covered payroll. for the year ended September 30, 2010, which equaled required were $805,712 and approximated 21.0% of covered payroll.

3. Funding Status and Progress A separate plan financial report was issued by the State Division of Retirement for the plan year, which ends on June 30, which provides detail on the plan funding status and progress. The report may be obtained by writing to the Florida Division of Retirement, 2639 Monroe Street, Building C, Tallahassee, Florida 32399-1560. - 24 -

EAST MANATEE FIRE RESCUE DISTRICT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE E - RETIREMENT PLAN - CONTINUED 4. Post-Employment Benefits Pursuant to Section 112.363, Florida Statutes, the Florida Legislature established the Retiree Health Insurance Subsidy (HIS) to assist retirees of all Stateadministered retirement systems in paying health insurance costs. During the 2011-2012 fiscal year, the HIS program was funded by required contributions consisting of 1.11% assessed against the payroll for all active employees covered in State-administered retirement systems. This assessment is included in the Florida Retirement System contribution rates presented in the State Retirement Plans footnote above. Eligible retirees, spouses, or financial dependents under any State-administered retirement system must provide proof of health insurance coverage, which can include Medicare. During the 2011-2012 fiscal year, participants received an extra $5 per month for each year of creditable service completed at the time of retirement; however, no eligible retiree or beneficiary may receive a subsidy payment of more than $150 or less than $30. If contributions fail to provide full subsidy benefits to all participants, the subsidy payments may be reduced or canceled. NOTE F – OTHER POST EMPLOYMENT HEALTHCARE SUBSIDIARY BENEFIT PLAN 1. Plan Description The District offers post employment healthcare benefits through the East Manatee Fire Rescue District Other Post Employment Benefits Plan, (the Plan) (OPEB). All employees are eligible to participate in the Plan after becoming disabled, or reaching normal retirement age and receiving retirement benefits from the Florida Retirement System (Note E). Upon retirement, employees may elect to continue to purchase health insurance through the District’s health insurance plan. All costs are born by the participant. Membership in the Plan consisted of the following at September 30, 2012: Retirees Active fully eligible for benefits Total

3 54 57

The District, under the authority established within the Plan document, may amend or terminate the Plan in whole or in part. The District’s board of commissioners provides oversight of the OPEB Plan. The Plan is construed and governed by the laws of Florida, except as preempted by Federal law. 2. Summary of Significant Accounting Policies Basis of Accounting – The OPEB is recorded in the government-wide financial statements, on the accrual basis of accounting.

- 25 -

EAST MANATEE FIRE RESCUE DISTRICT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE F – OTHER POST EMPLOYMENT HEALTHCARE SUBSIDIARY BENEFIT PLAN - CONTINUED Asset Valuation - There are no plan assets. All costs are born by the participants upon retirement, and are paid monthly as premiums come due. 3. Contributions and Funding Policy The District makes no contributions to the Plan. Upon election to participate, the retiree pays the cost of participating in the District’s health plan. 4. Annual OPEB Cost and Net OPEB Obligation Pursuant to GASB Statement 45, the District obtained an actuarial valuation applicable to the plan year ended September 30, 2010 and is only required to obtain a new valuation every three years. The District’s annual OPEB cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount which was actuarially determined. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the District’s annual OPEB cost for the year at the net OPEB obligation:

Annual Required Contribution (ARC) Interest on Net OPEB Obligation Adjustment to the ARC Total Annual OPEB Cost Estimated Net Contributions Made Increase in Net OPEB Obligation Net OPEB Obligation – beginning of year Net OPEB Obligation – end of year

2012

2011

$ 34,842 -0-034,842 (6,969) 27,873 55,746 $ 83,619

$ 34,842 -0-034,842 (6,969) 27,873 27,873 $ 55,746

The District’s OPEB cost, the percentage of annual OPEB cost contributed and the Net OPEB obligation follows: Fiscal Year 9/30/10 9/30/11 9/30/12

Annual OPEB Cost $ $ $

34,842 34,842 34,842

- 26 -

% of Annual OPEB Cost Contributed 20% 20% 20%

Net OPEB Obligation $ $ $

27,873 55,746 83,619

EAST MANATEE FIRE RESCUE DISTRICT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE F – OTHER POST EMPLOYMENT HEALTHCARE SUBSIDIARY BENEFIT PLAN - CONTINUED 5. Schedule of Funding Progress ACTUARIAL ACTUARIAL VALUE OF VALUATION ASSETS (a) DATE * 10/01/09

$ *

-0-

ACTUARIAL ACCRUED LIABILITY (AAL) (b)

UNFUNDED AAL (UAAL) (b)-(a)

FUNDED RATIO (a)(b)

$ 227,188

$ 227,188

0%

COVERED PAYROLL (c) Not Available

UAAL AS A PERCENTAGE OF COVERED PAYROLL ((b-a)/c) Not Available

Only 1 year of information is available. 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, mortality, and the healthcare cost trend. 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. The schedule of funding progress presented as required supplementary information following the notes to the financial statements, presents multiyear trend information, (when available), about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan 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 plan members to that point. Projections of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the District and plan 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.

6. Actuarial Methods and Assumptions Valuation Date Actuarial cost method Amortization method

October 1, 2009 Entry Age Normal (level % of pay) Level Percentage of Payroll (Closed Amortization over 30 years)

Healthcare cost trend rates: - 27 -

Pre and Post Medicare: 8.0% in 2009, trending to 5% in 2012.

EAST MANATEE FIRE RESCUE DISTRICT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE G - CONCENTRATIONS OF LABOR SUBJECT TO COLLECTIVE BARGAINING AGREEMENT The District’s professional Firefighters, lieutenants and captains, which represent a significant portion of the District’s employees, are represented by a Union. NOTE H – RISK MANAGEMENT The District is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters for which the District carries commercial insurance.

- 28 -

REQUIRED SUPPLEMENTARY INFORMATION

EAST MANATEE FIRE RESCUE DISTRICT GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL FOR THE YEAR ENDED SEPTEMBER 30, 2012

REVENUES Fire protection services Fire Assessments Ad valorem assessments Capital grants Interest income Service fee revenue Other revenue

ORIGINAL BUDGET $

Total revenues EXPENDITURES Personal services Operating expenses Capital outlay Debt service Total expenditures Change in fund balance

$

$

5,533,241 3,703,570 118,543 86,448 26,640 65,743

$

41,126 29,313 30,578 2,710 8,544

9,421,914

9,534,185

112,271

7,950,642 1,447,705 1,111,300 1,000,000

7,941,006 1,478,085 1,755,619 1,000,000

6,876,034 1,113,573 650,229 1,000,000

1,064,972 364,512 1,105,390 -

11,509,647

12,174,710

9,639,836

2,534,874

(2,752,796)

12,609,798 $

5,492,115 3,674,257 118,543 55,870 23,930 57,199

ACTUAL

9,121,701

(2,387,946)

FUND BALANCE - October 1, 2011 FUND BALANCE - September 30, 2012

5,382,335 3,635,166 55,000 20,000 29,200

FINAL BUDGET

VARIANCE WITH FINAL BUDGET FAVORABLE (UNFAVORABLE)

10,221,852

- 29 -

(105,651)

12,609,798 $

9,857,002

2,647,145

12,609,798 $

12,504,147

$

2,647,145

EAST MANATEE FIRE RESCUE DISTRICT CAPITAL PROJECTS FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL FOR THE YEAR ENDED SEPTEMBER 30, 2012

REVENUES Fire protection services Impact fees Interest income

ORIGINAL BUDGET $

300,000 5,000

FINAL BUDGET $

356,142 4,500

VARIANCE WITH FINAL BUDGET FAVORABLE (UNFAVORABLE)

ACTUAL $

440,997 6,672

$

84,855 2,172

Total revenues

305,000

360,642

447,669

87,027

EXPENDITURES Capital outlay Debt service

1,000,000

517,065

517,065

-

Total expenditures

1,000,000

517,065

517,065

-

Change in fund balance

(695,000)

FUND BALANCE - October 1, 2011 FUND BALANCE - September 30, 2012

(156,423)

1,364,148 $

669,148

- 30 -

(69,396)

1,364,148 $

1,207,725

87,027

1,364,148 $

1,294,752

$

87,027

EAST MANATEE FIRE RESCUE DISTRICT POST-EMPLOYMENT HEALTH BENEFITS OTHER THAN PENSION REQUIRED SUPPLEMENTARY INFORMATION FOR THE YEAR ENDED SEPTEMBER 30, 2012

SCHEDULE OF FUNDING PROGRESS

Actuarial Valuation Date 10/01/09

(1) Actuarial Value of Assets $-0-

(2) Actuarial Accrued Liability (AAL) Unit Credit

(3) Funded Ratio (1)/(2)

(4) Unfunded AAL (UAAL) (2)-(1)

(5) Covered Payroll

(6) UAAL as a Percentage of Covered Payroll (4)/(5)

0.00%

$ 227,188

N/A

N/A

$ 227,188

SCHEDULE OF EMPLOYER CONTRIBUTIONS

Fiscal Year Ending

Annual OPEB Cost

2010 2011 2012

$ 34,842 $ 34,842 $ 34,842

Estimated Amount Contributed $ -0$ -0$ -0-

- 31 –

Percentage of Annual OPEB Cost Contributed 20% 20% 20%

Estimated OPEB Obligation $ $ $

27,873 55,746 83,619

EAST MANATEE FIRE RESCUE DISTRICT POST-EMPLOYMENT HEALTH BENEFITS OTHER THAN PENSION NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION FOR THE YEAR ENDED SEPTEMBER 30, 2012

The information presented in the Required Supplementary Information schedule was determined as part of the actuarial valuation at the date indicated. Additional information as of the latest actuarial valuation follows: Valuation Date

10/1/09

Actuarial Cost Method Amortization Method Remaining Amortization Period Asset Valuation Method Actuarial Assumptions: Investment rate of return Initial Per Capita Cost Trend Rate Ultimate Per Capita Cost Trend Rate

- 32 –

Entry Age Normal (level % of pay) Level percentage of payroll (closed amortization over 30 years) 30 years Unfunded 4.5% 8% 5%

OTHER SUPPLEMENTAL INFORMATION

EAST MANATEE FIRE RESCUE DISTRICT SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL - GENERAL FUND FOR THE YEAR ENDED SEPTEMBER 30, 2012

Personal Services: Salaries and wages FICA and other payroll taxes Retirement contributions Volunteer response fund Workers compensation Health insurance Total personal services

Operating Expenses: Advertising Commissions and fees Dues and subscriptions Fuel and oil Insurance Legal and professional Supplies Repair and maintenance Training and travel Uniforms Utilities Miscellaneous Total Operating Expenses

BUDGET

ACTUAL

VARIANCE FAVORABLE (UNFAVORABLE)

$

4,936,865 379,760 913,388 3,000 260,891 1,447,102

$

4,556,267 336,338 622,081 255,752 1,105,596

$

380,598 43,422 291,307 3,000 5,139 341,506

$

7,941,006

$

6,876,034

$

1,064,972

$

8,000 308,225 9,000 101,000 85,000 41,000 93,595 477,540 92,000 90,190 149,600 22,935

$

1,501 281,413 3,071 86,090 84,613 26,041 62,617 319,775 47,967 63,612 128,420 8,453

$

6,499 26,812 5,929 14,910 387 14,959 30,978 157,765 44,033 26,578 21,180 14,482

$

1,478,085

$

1,113,573

$

364,512

- 33 -

EAST MANATEE FIRE RESCUE DISTRICT SCHEDULE OF EXPENDITURES - GENERAL FUND FOR THE YEARS ENDED SEPTEMBER 30,

2012 Personal Services: Salaries and wages FICA and other payroll taxes Retirement contributions Workers compensation Health insurance Total Personal Services

Operating Expenses: Advertising Commissions and fees Dues and subscriptions Fuel and oil Insurance Legal and professional Supplies Repair and maintenance Training and travel Uniforms Utilities Miscellaneous Total Operating Expenses

- 34 -

2011

$

4,556,267 336,338 622,081 255,752 1,105,596

$

4,448,035 333,569 890,690 192,183 1,024,275

$

6,876,034

$

6,888,752

$

1,501 281,413 3,071 86,090 84,613 26,041 62,617 319,775 47,967 63,612 128,420 8,453

$

1,033 259,896 2,249 83,712 83,862 28,450 59,641 276,532 33,530 38,434 128,177 11,293

$

1,113,573

$

1,006,809

OTHER AUDITORS’ REPORTS