COMPREHENSIVE ANNUAL FINANCIAL REPORT City of Orlando, Florida For the Fiscal Year Ended September 30, 2020 Prepared by: Office of Business and Financial Services This page intentionally blank. This page intentionally blank. CITY OF ORLANDO, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2020 TABLE OF CONTENTS Page I. INTRODUCTORY SECTION Letter of Transmittal 1 Certificate of Achievement for Excellence in Financial Reporting 9 Organization Chart 11 List of Officials 13 II. FINANCIAL SECTION Independent Auditor’s Report 15 A. MANAGEMENT’S DISCUSSION AND ANALYSIS (required supplementary information) 17 B. BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Position 37 Statement of Activities 38 Fund Financial Statements Governmental Fund Financial Statements Balance Sheet 40 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 41 Statement of Revenues, Expenditures, and Changes in Fund Balances 42 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 43 Proprietary Fund Financial Statements Statement of Net Position – Business-type Activities – Enterprise Funds – Governmental Activities – Internal Service Funds 46 Statement of Revenues, Expenses, and Changes in Net Position – Business-type Activities – Enterprise Funds – Governmental Activities – Internal Service Funds 48 Statement of Cash Flows – Business-type Activities – Enterprise Funds – Governmental Activities – Internal Service Funds 50 Fiduciary Fund Financial Statements Statement of Fiduciary Net Position 56 Statement of Changes in Fiduciary Net Position 57 Notes to Financial Statements Note 1 - Summary of Significant Accounting Policies 60 Note 2 - Stewardship, Compliance, and Accountability 71 Note 3 - Property Taxes 72 Note 4 - Deposits and Investments 73 Note 5 - Net Position, Fund Balance, Interfund Transfers, Receivables and Payables, and Restricted Assets 86 Note 6 - Capital Assets 90 Note 7 - Commitments and Contingencies 91 Note 8 - Risk Management 95 CITY OF ORLANDO, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2020 TABLE OF CONTENTS (Continued) Page Notes to Financial Statements (continued) Note 9 - Leases 97 Note 10 - Long-Term Obligations 98 Note 11 - Pension Plans 113 Note 12 - Other Employee Benefits 123 Note 13 - Other Post Employment Benefits 124 Note 14 - Tax Abatements 131 Note 15 - Component Unit 132 Note 16 - Joint Venture 132 Note 17 - Other Organizations 133 Note 18 - Summary Disclosure of Significant Contingencies 134 Note 19 - CRA Trust Funds 136 Note 20 - Downtown South Neighborhood Improvement District (NID) 138 Note 21 - Prior Period Adjustment 138 Note 22 - Subsequent Events 139 C. REQUIRED SUPPLEMENTARY INFORMATION (other than MD&A) Budget to Actual Comparison – Major Funds (General and Special Revenue) General Fund 142 Community Redevelopment Agency 143 Pension and Other Post Employment Benefits (OPEB) Schedules Schedules of Changes in Net Pension Liability and Related Ratios - Defined Benefit Pension Plans 146 Schedules of Contributions - Defined Benefit Pension Plans 149 Schedule of Investment Returns - Defined Benefit Pension Plans 152 Schedule of Changes in Net OPEB Liability and Related Ratios 153 Schedule of Contributions - OPEB 154 Schedule of Investment Returns - OPEB 155 D. COMBINING FINANCIAL STATEMENTS AND SCHEDULES Community Redevelopment Agency Balance Sheet 158 Schedule of Revenues, Expenditures, and Changes in Fund Balance 160 Non-Major Governmental Funds Balance Sheet 164 Statement of Revenues, Expenditures, and Changes in Fund Balance 168 Budget to Actual Comparison Other Major and Non-Major Governmental Funds Capital Improvement Fund (Major Fund) 171 Housing and Urban Development (HUD) Grants 172 CITY OF ORLANDO, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2020 TABLE OF CONTENTS (continued) Page Budget to Actual Comparison Other Major and Non-Major Governmental Funds (continued) State Housing Partnership (SHIP) Fund 173 Grant Fund 174 Forfeitures Act 175 Special Assessments 176 Downtown South Neighborhood Improvement District 177 H.P. Leu Gardens 178 Cemetery Fund 179 Building Code Enforcement 180 GOAA Police Fund 181 Gas Tax Fund 182 Impact Fees 183 Public Safety Construction Fund 184 Internal Service Funds Statement of Net Position 186 Statement of Revenues, Expenses, and Changes in Fund Net Position 188 Statement of Cash Flows 190 Fiduciary Funds Statement of Fiduciary Net Position 196 Statement of Changes in Fiduciary Net Position 198 Agency Fund, Statement of Changes in Assets and Liabilities 200 E. SUPPLEMENTAL INFORMATION Summary of Debt Service Requirements to Maturity 202 Statements of Bonded Debt and Interest Primary Government Community Redevelopment Agency Downtown District Tax Increment Bonds 204 Republic Drive (Universal Boulevard) Tax Increment Revenue Refunding Bonds 206 Conroy Road Tax Increment Revenue Refunding Bonds 208 Capital Improvement Special Revenue Bonds 209 Wastewater System Revenue Bonds 223 Orlando Venues State Sales Tax and Tourist Development Tax Bonds 224 III. STATISTICAL SECTION Financial Trends Net Position by Component 231 Changes in Net Position 232 Fund Balances of Governmental Funds 235 Changes in Fund Balances of Government Funds 236 Revenue Capacity Assessed Value and Estimated Actual Value of Taxable Property 238 Direct and Overlapping Property Tax Rates 239 Principal Property Taxpayers 240 Property Tax Levies and Collections 241 CITY OF ORLANDO, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2020 TABLE OF CONTENTS (Continued) Page III. STATISTICAL SECTION (continued) Debt Capacity Ratios of Outstanding Debt by Type 242 Ratios of General Bonded Debt Outstanding 243 Direct and Overlapping Governmental Activities Debt 244 Pledged-Revenues Coverage Primary Government Community Redevelopment Agency - Downtown District 245 Community Redevelopment Agency - Republic Drive (Universal Boulevard) District 246 Community Redevelopment Agency - Conroy Road District 247 Water Reclamation System 248 Internal Loan Fund Revenue Dilution Test 249 Orlando Venues 250 Demographic and Economic Information Demographic and Economic Statistics 252 Principal Employers 253 Operating Information Full Time Equivalent City Government Employees by Function/Program 254 Operating Indicators by Function/Program 255 Capital Assets Statistics by Function/Program 256 IV. COMPLIANCE SECTION Schedule of Expenditures of Federal Awards and State Financial Assistance 258 Notes to Schedule of Expenditures of Federal Awards and State Financial Assistance 264 Independent Auditor's Report on Compliance for Each Major Federal Program and Major State Project and on Internal Control over Compliance and Report on Schedule of Expenditures 265 Schedule of Findings and Questioned Costs 268 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 270 Independent Auditor's Management Letter 272 Independent Accountant's Report 274 March 29, 2021 Mayor Buddy Dyer, City Commissioners, and Citizens of the City of Orlando It is our pleasure to submit this Comprehensive Annual Financial Report for the City of Orlando, Florida for the fiscal year (FY) ended September 30, 2020. The report fulfills the requirements set forth by State law, in accordance with Section 218.39, Florida Statutes, and Chapter 10.550 Rules of the Auditor General, which requires that all general purpose local governments publish each fiscal year a complete set of financial statements presented in conformity with accounting principles generally accepted in the United States (GAAP) and audited in accordance with auditing standards generally accepted in the United States by a firm of licensed certified public accountants. This Comprehensive Annual Financial Report consists of management’s representations concerning the City of Orlando’s finances. Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making these representations, management of the City of Orlando has established a comprehensive internal control framework that is designed both to protect the City’s assets from loss, theft, or misuse and to compile sufficient, reliable information for the preparation of the City of Orlando’s financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City of Orlando’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. Florida Statutes require that an annual financial audit be performed by independent certified public accountants. This year, the audit was performed by MSL, P.A. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City of Orlando for the fiscal year ended September 30, 2020, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting