Comprehensive Annual Financial Report Lee County, Florida Fiscal Year Ended September 30, 2018 Lee County, Florida Comprehensive Annual Financial Report For the Fiscal Year Ended September 30, 2018 Prepared by: General Accounting Office, Finance & Records Department Clerk to Board of County Commissioners Linda Doggett Lee County, Florida PRINCIPAL OFFICIALS As of September 30, 2018 Elected Officials Board of County Commissioners, Port Commissioners: Commissioner, District 1 …………………………………… John Manning Commissioner, District 2 …………………………………… Cecil Pendergrass * ** Commissioner, District 3 …………………………………… Larry Kiker Commissioner, District 4 …………………………………… Brian Hamman Commissioner, District 5 …………………………………… Frank Mann Appointed Officials County Manager ………………………………………………… Roger Desjarlais County Attorney ………………………………………………… Richard Wm. Wesch Executive Director, Port Authority ………………………………Jeff A. Mulder Hearing Examiner(s) ………………………………………………Donna Marie Collins Laura Belflower * Chairman for Board of County Commissioners ** Chairman for Board of Port Commissioners Photographs provided by Ed Clement Photographic Services, Inc., Lee County Public Resources, Lee County Visitor & Convention Bureau, Lee County Port Authority, Lee County Water & Wastewater System, Lee County Solid Waste System, Lee County Transportation Facilities, and Lee County Transit. ii Lee County, Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT September 30, 2018 TABLE OF CONTENTS Introductory Section PAGE Letter of Transmittal …………………………………………………………………………………………… 2 Organizational Charts ………………………………………………………………………………………… 9 Government Finance Officers Association Certificate of Achievement ………………………………… 11 Financial Section Independent Auditors' Report ……………………………………………………………………………… 14 Management's Discussion and Analysis (unaudited) ……………………………………………………… 17 Basic Financial Statements Government-Wide Financial Statements Statement of Net Position ……………………………………………………………………….……………… 30 Statement of Activities ……………………………………………………………...…………………………… 33 Fund Financial Statements Governmental Fund Financial Statements Balance Sheet- Governmental Funds……………………………………………………………..………… 34 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position……… 35 Statement of Revenues, Expenditures, and Changes in Fund Balances- Governmental Funds………………………………………………………………… 36 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities.………..…………..…… 37 Statement of Revenues, Expenditures, and Changes in Fund Balance- Budget (Non-GAAP Budgetary Basis) and Actual- General Fund…………….…………………… 38 Proprietary Fund Financial Statements Statement of Net Position- Proprietary Funds …………………………………………………………… 39 Statement of Revenues, Expenses, and Changes in Net Position- Proprietary Funds …….………… 42 Statement of Cash Flows- Proprietary Funds ………………………………………………….………… 44 Fiduciary Fund Statements Statement of Fiduciary Net Position- Agency Funds ……………………………………….…………… 46 Notes to the Financial Statements ………………………………………………………….……………………..… 48 Required Supplementary Information Other Postemployment Benefits Plans (unaudited) - Schedule of Total OPEB liability - Group Health Program for Lee County Plan and Lee County Sheriff Health Care Plan…………………………………… 100 Florida Retirement System Pension Plan - Schedule of the County's Proportionate Share of the Net Pension Liability and Schedule of the County Contributions…………………………………………… 101 Retiree Health Insurance Subsidy Program - Schedule of the County's Proportionate Share of the Net Pension Liability and Schedule of the County Contributions…………………………………………… 102 iii Lee County, Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT September 30, 2018 TABLE OF CONTENTS Supplemental Financial Information PAGE General Fund Combining Schedules Balance Sheet …………………………………………...………………………..…………………………………… 106 Schedule of Revenues, Expenditures, and Changes in Fund Balances …………………….…………………… 108 Schedule of Revenues, Expenditures, and Changes in Fund Balances- Budget (Non-GAAP Budgetary Basis) and Actual……….……………………………….…………………… 110 Non-Major Governmental Funds Combining Statements and Schedules Non-Major Governmental Fund Descriptions ……………………………………………...……………………… 114 Balance Sheet …………………………………………………………….…………………………………………… 117 Statement of Revenues, Expenditures, and Changes in Fund Balances ……………...………………………… 126 Schedule of Revenues, Expenditures, and Changes in Fund Balances- Budget (Non-GAAP Budgetary Basis) and Actual- Special Revenue Funds ……………………………… 136 Schedule of Revenues, Expenditures, and Changes in Fund Balances- Budget (Non-GAAP Budgetary Basis) and Actual- Debt Service Funds ……………………………..…… 143 Schedule of Revenues, Expenditures, and Changes in Fund Balances- Budget (Non-GAAP Budgetary Basis) and Actual- Capital Projects Funds ………………………..……… 145 Enterprise Funds Combining Schedule Enterprise Fund Descriptions …………………...……………………………………………………………….…… 152 Schedule of Revenues, Expenses, and Changes in Net Position- Budget (Non-GAAP Budgetary Basis) and Actual with Reconciliation to GAAP………………..………… 153 Internal Service Funds Combining Statements and Schedule Internal Service Fund Descriptions …………………………………………………………………….…………… 156 Statement of Net Position …………………………………………………………………...………………………… 157 Statement of Revenues, Expenses, and Changes in Net Position …………….………..………………………… 159 Statement of Cash Flows ……………………………………………………….………………………..…………… 160 Schedule of Revenues, Expenses, and Changes in Net Position- Budget (Non-GAAP Budgetary Basis) and Actual with Reconciliation to GAAP……………...………… 162 Agency Funds Combining Statements Agency Fund Descriptions …………………………………………………………………...……………………… 166 Statement of Fiduciary Net Position- Agency Funds………………………..……………………………………… 167 Statement of Changes in Assets and Liabilities- Agency Funds………………...………………………………… 170 iv Lee County, Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT September 30, 2018 TABLE OF CONTENTS Statistical Section (unaudited) PAGE Statistical Section Descriptions ……………………………………………………………………………………… 174 Schedule 1- Net Position………………..……………………………………………………………………………… 175 Schedule 2- Changes in Net Position………………………………………………………………………………… 176 Schedule 3- Fund Balances of Governmental Funds……………………………………………………………… 178 Schedule 4- Changes in Fund Balances of Governmental Funds………………………………………………… 179 Schedule 5- Assessed Value and Estimated Actual Value of Taxable Property………………………………… 180 Schedule 6- Property Tax Rates- Direct and Overlapping Governments………………………………………… 181 Schedule 7- Principal Property Taxpayers…………………………………………………………………………… 182 Schedule 8- Property Tax Levies and Collections…………………………………………………………………… 183 Schedule 9- Ratio of Outstanding Debt by Type…………………………………………………………………… 184 Schedule 10- Pledged Revenue Bond Coverage…………………………………………………………………… 185 Schedule 11- Demographic and Economic Statistics……………………………………………………………… 187 Schedule 12- Principal Employers…………………………………………………………………………………… 188 Schedule 13- Government Employees by Function/Program…………………………………………………… 189 Schedule 14- Operating Indicators by Function/Program………………………………………………………… 190 Schedule 15- Capital Asset Statistics by Function…………………………………………………………………… 191 Other Supplemental Information (unaudited) Tourist Development Tax Revenue Bonds- Historical Tourist Development Tax Revenues, Gross Revenues and State Funds and Pro Forma Debt Service Coverage …………………….…………… 194 Tourist Development Tax Revenue Bonds- Statement of Historical Collections and Distributions of the General Sales and Use Tax……………………………………………………………….…………………… 195 Non-Ad Valorem Revenue Bonds- Historical Major Sources of Non-Ad Valorem Revenues……….………… 196 Non-Ad Valorem Revenue Bonds- Statement of Revenues, Expenditures, and Changes in Fund Balances- Total Governmental Funds……………………………..……………..……………………………… 197 Lee County Water and Wastewater Systems- Monthly Water Rates …………………………………………… 198 Lee County Water and Wastewater Systems- Water Restriction Surcharge Adjustment ……………………… 198 Lee County Water and Wastewater Systems- Monthly Wastewater Rates ……………………………………… 199 Lee County Water and Wastewater Systems- Connection Fees ……………………………………………...…… 199 Lee County Water and Wastewater Systems- Water Meter Installation and Service Connection Fees……… 199 Lee County Water and Wastewater Systems- Historical Revenues, Expenses and Debt Service Coverage ……………………………………………………………………………...……...…… 200 Lee County Water and Wastewater Systems- Customer Statistics……………………………………………… 202 Lee County Water and Wastewater Systems- County System Top Ten Retail Utility Customers…………… 203 Lee County Solid Waste System- System Historical Operating Results and Indenture Rate Covenant Compliance…………………………………………………………………………………………… 204 Lee County Solid Waste System-Summary of Historical Charges …………………………………………..…… 205 v Lee County, Florida COMPREHENSIVE ANNUAL FINANCIAL REPORT September 30, 2018 TABLE OF CONTENTS Other Supplemental Information (continued) (unaudited) PAGE Lee County Solid Waste System- Summary of Historical Inbound Waste Deliveries (Tons) by Type of Waste…………………………………………………………………………………..….……………… 206 Lee County Solid Waste System- Summary of Historical Waste-to-Energy (WTE) Processing Satistics……… 207 Lee County Transportation Facilities- Toll Rates ………………………………………………………………..… 208 Lee County Transportation Facilities- Variable Pricing Program ………………………………………………… 210 Lee County Transportation Facilities- Traffic, Revenues and Expenses by Bridge……………………………… 211