Okaloosa County BOCC — May 20, 2014 — CAFR_13 — reading text

Financial Statements. The report consists of management?s representations concerning the finances of the County. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the County has established a comprehensive internal control framework that is designed both to protect the government?s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the County?s financial statements in conformity with GAAP. Because the costs of internal controls should not outweigh their benefits, the County?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. The County?s financial statements have been audited by the certified public accountants of the firm of Warren Averett, LLC. The goal of the independent audit was to provide reasonable assurance that the financial statements of the County for the fiscal year ended September 30, 2013, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditors concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the County?s financial statements for the fiscal year ended September 30, 2013, are fairly presented in conformity with COURTHOUSE 101 E. JAMES LEE BLVD. CRESTVIEW, FLORIDA 32536-1359 (850) 689-5000 REPLY TO: BRACKIN BUILDING 302 NORTH WILSON ST., SUITE 203 CRESTVIEW, FLORIDA 32536 (850) 689-5000 COURTHOUSE ANNEX 1250 N. EGLIN PKWY SHALIMAR, FLORIDA 32579 (850) 651-7200 ANNEX EXTENSION 1940 LEWIS TURNER BLVD FT. WALTON BEACH, FLORIDA 32547 (850) 651-7200 Visit us on the web at http://www.clerkofcourts.cc GAAP. The report of independent accountants is presented as the first component of the financial section of this report. Okaloosa County is a non-charter county established under the Constitution and the Laws of the State of Florida. This Comprehensive Annual Financial Report (CAFR) includes the funds of the primary government (the Board of County Commissioners, the Clerk of the Circuit Court, the Property Appraiser, the Sheriff, the Supervisor of Elections and the Tax Collector). ECONOMIC CONDITION AND OUTLOOK Okaloosa County is one of Florida's youngest counties, created in 1915 by an act of the state legislature. Okaloosa County is located in the Northwest Florida Panhandle and the City of Crestview, near its geographical center, is the County seat. The April 2013 population was 188,349, concentrated most heavily near its southern boundary on the Gulf of Mexico. Occupying a large portion of Okaloosa County is one of the world's largest military reservations. Established in 1935, Eglin Air Force Base covers over 724 square miles in Okaloosa and two neighboring counties and contains the 919th Special Operations Wing, Duke Field. Eglin Air Force Base, the Air Armament Center, is responsible for development, acquisition, testing, deployment and sustainment of all United States Air Force air-delivered weapons. Based upon Eglin's wide range of activities, Eglin will continue its major role in the defense of the United States and in the economy of Okaloosa County. Hurlburt Field, the headquarters of the Air Force Special Operations Command, is also located in Okaloosa County. Hurlburt Field occupies about 6,000 acres in the County. The military presence is the major income producing source for the County. The tourism industry is the leading private income producing source for the County. The effect of the industry on the local economy is well above $1 billion income produced annually with the employment of 20,000+ in tourism related businesses. The Tourist Development Council Convention Visitor?s Bureau (TDC / CVB) registered hundreds of thousands of inquiries throughout the year. Tourists may visit Okaloosa County?s Visitor Welcome Center for information on all local activities, area information, sightseeing and all other things to do during their visit. More than 3.0 million visitors come to the Emerald Coast annually. v  Residents and tourists in Okaloosa County have a full range of natural attractions and recreational opportunities. Mile after mile of beautiful snow-white beaches and emerald-green waters attract boating enthusiasts, swimmers, skiers, surfers, skin-divers, and scuba divers. Some of the largest concentrations of fighting game fish congregate off Destin?s coast. Party and charter boats make daily runs to favorite fishing reefs. Piers and bridges on the Gulf of Mexico, inland bays and fresh water in lakes and streams provide excellent fishing opportunities. Golfing, at numerous magnificent courses around the area, sailing, and camping are other year-round activities. The hunter may try for deer, turkey, quail, dove, duck, and wild hog in the game management areas of the northern part of the county. The state Division of Economic Development placed the total labor force in Okaloosa County at 121,193 in 2013 and the 2013 unemployment rate at 5.2 percent. This compares favorably to the state's annual average rate of 7.2 percent and the national average of 7.4 percent. Okaloosa County's cost of living is consistently below the national average and the county has, along with its sister counties in Florida, no state income tax. Seven industrial parks have been developed with a total of over 1,100 acres available. An industrial park near Crestview has an 8,000-foot reinforced runway, capable of handling the largest aircraft, and it has complete utilities and services. A municipal industrial park at Fort Walton Beach offers complete facilities and utility services to companies supplying space-age components to the United States Air Force. Property valuation turned around and increased slightly this year after declining over the last several years. The increase continues to provide the County the opportunity to maintain one of the state?s lowest millage rates while also continuing to maintain a relatively high level of service to County residents. Property tax values increased 1.7 percent. New construction activity in 2013 increased slightly to $125 million. vi  MAJOR FUNCTIONAL INITIATIVES General Government Initiatives The County continues to study and renovate other facility space in order to more effectively and efficiently utilize the limited governmental space available. The immediate focus, again, is on governmental space needs now that the Annex Extension facility was completed and the Shalimar Annex reverter clause issue was resolved at the very end of fiscal year 2013. About $55,750,000 was spent on General Government initiatives, or approximately 23.6% of total expenditures, throughout the year. Public Safety Initiatives The County dedicates a great deal of financial and personnel resources for public safety initiatives. The lifeguard and beach safety units were enhanced during the year with funding derived from Tourist Development taxes. The County Corrections Department and County Jail continues to deal with population increases and facility needs, also. The public safety function of the Emergency Medical activity always stays busy providing valuable countywide service, as does the 9-1-1 operation of the county. The Sheriff?s operations were active and involved in many of these public safety initiatives throughout the year. The County continued to settle into the state-of-the-art joint facility at Northwest Florida State College Emergency Operations Center(EOC) and training facility this past Fiscal Year. The facility houses emergency staff for multiple offices from several entities of the County into this modern facility to better protect the citizenry of the County in future disaster related events. The County funded approximately $87,750,000 of Public Safety initiatives, or approximately 37.1% of total expenditures, in 2013. Physical Environment Initiatives Physical environment initiatives are concentrated in the areas of water/wastewater improvements, solid waste and stormwater. The military, with its ever increasing