South Florida Regional Transportation Authority Comprehensive Annual Financial Report
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SOUTH FLORIDA REGIONAL TRANSPORTATION AUTHORITY COMPREHENSIVE ANNUAL FINANCIAL REPORT A Component Unit of the State of Florida Department of Transportation FISCAL YEAR ENDED JUNE 30, 2018 Prepared by Finance Department Accounting Division JACK L. STEPHENS C. MIKEL OGLESBY Executive Director Deputy Executive Director RICHARD D. CHESS, MBA MARGARET DALLEY-JOHNS, CPA Director of Finance Accounting Manager This page is intentionally left blank MESSAGE FROM THE EXECUTIVE DIRECTOR Fiscal Year 2018 brought with it challenges and accomplishments. In May, the South Florida Regional Transportation Authority (SFRTA) officially dedicated its new Operations Center and adjacent Pompano Beach Station, increased ridership, and achieved record on-time-performance. The move to the new headquarters has enabled SFRTA to consolidate virtually all of its functions, including operations, dispatching, administration and outreach into one facility. This has significantly enhanced communications and has enabled the SFRTA to more effectively and efficiently serve its passengers. With the South Florida economic climate continuing to show improvement, we are continuing to see ridership in excess of 4 million passengers annually. More than 1 million passengers availed themselves of our free connecting shuttle service during the past fiscal year. SFRTA continues to operate 50 trains each weekday and 30 trains on Saturday, Sunday and holidays. In fact, at a time when transit systems across the country have shown a loss of riders, SFRTA has continued to maintain its ridership and, in fact, has seen a slight growth in passengers. An exciting development on the horizon is a partnership with All Aboard Florida (AAF) which will provide a one-seat ride into downtown Miami. AAF is helping to defray the cost of Tri-Rail’s new MiamiCentral by generously donating land for the station, as well as amortizing construction costs to the SFRTA’s benefit. Service into Miami is expected to begin sometime within calendar year 2019. The new Pompano Beach Station will be the first LEED-certified station on the corridor; energy efficient and environmentally sensitive. It provides 110% of the necessary power to operate the station through solar panels. It has electric car charging stations in the 400 plus space four story garage and is landscaped with native vegetation. There are projected savings of 85% over the cost of operating our existing stations due to the self-generated solar power source. Under a new contract with Herzog Transit Services Inc., which went into effect in July 2017, the Agency has seen record on-time performance. In July 2018, SFRTA saw the highest on-time-performance in its almost 30 year history. 96.6 percent of all trains operated on schedule. Herzog not only operates the trains, but also maintains the stations and the rolling stock. SFRTA will continue to work with CSXT, Florida Department of Transportation, and Amtrak to unify our efforts in the implementation of Positive Train Control (PTC). PTC will assist in train control, preventing train-to-train collisions, over-speed derailments, incursion into established work zones and movement through a main line switch in the improper position. SFRTA will seek an extension to full implementation of PTC by December 31, 2020 due to the fact that we believe we will reach mandated milestones in the installation by December 31, 2018. On a personal note, after 15 years with the SFRTA/Tri-Rail, I am retiring at the end of the year. These 15 years have been extremely fulfilling and I treasure the time I have spent here and the people I have met here. With its great wisdom, the Governing Board has selected Commissioner Steven L. Abrams as my successor. Commissioner Abrams has been a respected figure in South Florida for decades and has served as Mayor of Boca Raton, Palm Beach County Commissioner representing South Palm Beach County. Most important, he has served on the SFRTA Governing Board for almost a decade and as its Chair on two different occasions. He has an intimate working knowledge of the SFRTA and all of the issues facing the Agency in the future. He is also an avid Tri-Rail rider and has come to be known as the “commuting commissioner.” He will be a tremendous asset to the organization and I wish him nothing but success as he becomes the leader of the SFRTA. I would personally like to thank SFRTA’s Governing Board for its direction and support during my tenure. I also extend my thanks and appreciation to SFRTA’s management and staff for their continued dedication and professionalism in achieving the Authority’s Goals and Objectives. Sincerely, Jack L. Stephens Executive Director TABLE OF CONTENTS INTRODCUTORY SECTION Letter of Transmittal 1 Governing Board and Executive Management 7 Mission Statement 8 Organizational Structure 9 Certificate of Achievement 10 FINANCIAL SECTION Independent Auditors' Report 11 Management's Discussion and Analysis 13 Financial Statements Statement of Net Position 30 Statement of Revenues, Expenses and Changes in Net Position 31 Statement of Cash Flows 32 Notes to Financial Statements 33 REQUIRED SUPPLEMENTARY INFORMATION Schedule of SFRTA Proportionate Share of the Net Pension Liability - Florida Retirement System 59 Schedule of SFRTA Contributions - Florida Retirement System 60 Schedule of SFRTA Proportionate Share of the Net Pension Liability - Retiree Health Insurance Subsidy 61 Schedule of SFRTA Contributions - Retiree Health Insurance Subsidy 62 OTHER REQUIRED SUPPLEMENTARY INFORMATION Supplemental Schedule of Operating Expenses for 2018 64 Supplemental Schedule of Operating Expenses for 2017 65 STATISTICAL AND GENERAL INFORMATION SETION (Not Covered by Auditor's Report) Net Position and Changes in Net Position 66 Statistical and General Information 67 Fare Structure 68 Ridership and Sales Analysis 69 Outstanding Debt by Type 70 Population Trends 71 Principal Employers by County 73 Demographics and Economics Statistics 76 Capital Assets Statistics and Employees by Department 77 Train Schedule 78 Timeline 79 Awards Page 80 System Map 81 This page is intentionally left blank This page is intentionally left blank December 20, 2018 Commissioner Esteban Bovo, Jr., Chair and The Governing Board South Florida Regional Transportation Authority Pompano Beach, Florida State law requires that each local government complete its financial statements for the most recent fiscal year in compliance with generally accepted accounting principles and the uniform chart of accounts prescribed by the Department of Financial Services. In accordance with state law, staff is proud to present the South Florida Regional Transportation Authority (SFRTA) Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2018. This report signifies the SFRTA commitment to provide financial information that is accurate, concise, reliable, and of the utmost quality to its Governing Board, the citizens of the tri-county area, and all other interested parties. The SFRTA developed this report with an emphasis on clarity, presentation, and completeness, in all material respects, and to present fairly the financial position and results of the SFRTA operations. All disclosures necessary to gain a full understanding of the SFRTA financial activities have been included. Assumption of Responsibility: The SFRTA management produced this report in accordance with guidelines recommended by the Government Finance Officers Association of the United States and Canada (GFOA). The responsibilities for the accuracy, fairness, and completeness of the financial statements, note disclosures, supplementary schedules, and statistical data presented rest with the management of the SFRTA. It is the representation of management that the enclosed data presents fairly, in all material respects, the financial operations of the SFRTA. Internal Control: The present accounting system includes the necessary internal controls to ensure reasonable, but not absolute assurance, regarding the safekeeping of assets against loss from unauthorized use or disposition. It also ensures that adequate accounting data are combined to allow for the preparation of financial statements in conformity with accounting principles generally accepted in the United States of America. The concept of reasonable assurance recognizes that the cost of controls should not exceed the benefits likely to be derived and that the valuation of costs and benefits requires estimates and judgments by management.Evaluations of internal control occur on a periodic basis. We believe that the SFRTA current internal accounting controls adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions. As a recipient of federal, state, and county financial assistance, the SFRTA is also responsible for ensuring that an adequate internal control structure is in place to ensure compliance with applicable laws and regulations related to those programs. The SFRTA is required to undergo an 1 annual single audit in conformity with the provisions of Title 2 U.S. Code of Federal Regulations Part 200, subpart F, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance) and the requirements of Florida's Single Audit Act as outlined in Chapter 10.550, Rules of Auditor General. Information relating to findings, recommendations, and all other aspects concerning this single audit are included in a separate document. Independent Audit: Mauldin & Jenkins, LLC an independent Certified