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

(497,707) 121,283 (260,820) - (139,537) Total incurred claims and claim adjustment expenses 430,754 1,190,491 126,343 1,747,588 1,192,834 407,394 8,500 1,608,728 Payments A) Claims and claim adjustment expenses attributable to insured events of current fiscal year 203,613 248,564 30,531 482,708 254,864 19,090 - 273,954 B) Claims and claim adjustment expenses attributable to insured events of prior fiscal year 654,842 56,540 63,136 774,518 814,850 97,209 - 912,059 Total payments 858,455 305,104 93,667 1,257,226 1,069,714 116,299 - 1,186,013 Unpaid claims and claim adjustment expenses at end of year $ 2,548,230 $ 1,905,597 $ 41,176 $ 4,495,003 $ 2,975,931 $ 1,020,210 $ 8,500 $ 4,004,641 83  Okaloosa County, Florida NOTES TO FINANCIAL STATEMENTS Fiscal Year Ended September 30, 2013 NOTE 17 – COMMITMENTS AND CONTINGENCIES Wastewater Service Interlocal Agreement with Fort Walton Beach In 2009, the Board adopted the Wastewater Service Interlocal Agreement with the City of Fort Walton Beach (Agreement). The Agreement outlines a long-term association for the treatment of the City’s influent wastewater flow at a set percentage of the County’s base sewer rate plus a locked-in annual rate escalator. The agreement provides other ancillary benefits to the City such as the provision of “no cost” tertiary treated effluent for use as irrigation water at the City’s 36-hole municipal Golf Club. The Agreement is effective for 30 years and can be automatically extended for up to two additional terms for a period of ten years for each extension term. The City will be billed monthly at a rate equal to $2.46 per each 1,000 gallons of wastewater flow. Additionally, the City will pay to the County the Sewer Readiness to Serve Fee, which is equal to $3,750 per month. Beginning March 2011, and each year thereafter, the Readiness to Serve Fee will increase by 3% annually. Service to the City began March 2010. Fees of $2,331,997 paid by the City during 2013 are reflected as Charges for Services in the Water and Sewer fund. The minimum commitment to the County under the Agreement is as follows: Fiscal Year Ending September 30, Payment 2014 $ 49,910 2015 51,407 2016 52,949 2017 54,537 2018 56,173 2019-2023 307,177 2024-2028 356,106 2028-2032 412,830 2033-2038 478,584 2039 104,501 Total $ 1,924,174 Convention Center Expansion Okaloosa County contracted with a company for construction of additional boat ramp parking and an outdoor exhibit area for $1,064,464. The Convention Center will expand the outdoors facilities by adding a fenced 30,000 square feet concrete pad with a small building to provide utilities and audio services. The Convention Center’s $974,577 portion of the project will be provided by Tourist Development Tax Revenue. The project began in 2013 with $46,649 reported in construction in progress. The project is scheduled to be completed in April 2014. Customer Facility Charge Agreement As of December 1, 2004, the County entered into a Customer Facility Charge Agreement with the on- airport rental car companies. In accordance with Ordinance No. 04-64, the County imposes and the rental car companies collect on behalf of the County, a Customer Facility Charge (CFC). Effective July 2007, Ordinance 04-64 was amended to increase the CFC charge from two dollars and fifty cents ($2.50) to three dollars and twenty-five cents ($3.25) per rental car transaction day on all rental car contracts. In December 2010, Ordinance 10-16 was implemented increasing the CFC charge from three dollars and 84  Okaloosa County, Florida NOTES TO FINANCIAL STATEMENTS Fiscal Year Ended September 30, 2013 NOTE 17 – COMMITMENTS AND CONTINGENCIES - CONTINUED Customer Facility Charge Agreement - Continued twenty-five cents ($3.25) to three dollars and seventy-five cents ($3.75). CFC revenue will be utilized by the County to construct, operate and maintain facilities and services for the rental car operators and their customers at the Northwest Florida Regional Airport. The facilities were completed and began operations in fiscal year 2009. CFC collections for the year ended September 30, 2013 were $1,570,156 and will be used for debt service on the Series 2007 taxable airport revenue bonds. In fiscal year 2013, the Airport used $518,767 of CFC revenue generated from the rental car companies for abatement of certain facility rent. Emergency Operations Center Okaloosa County and Northwest Florida State College executed a memorandum of understanding in 2005 for a joint use facility which would house the College’s Community Life, Safety and Military Science programs, and the County’s Public Safety Administration, Emergency Operation Center, and the 911 Dispatch Center. The facility also may serve as a hurricane evacuation shelter. The County’s rent is $10 per year for the facility located on the College’s Niceville, Florida campus. The County funded approximately $7,000,000 in contributions to the project. The joint use facility was completed and operations began in December 2010. Grants Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time although the Board expects such amount, if any, to be immaterial. Lawsuits The Board is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, it is the opinion of the Board’s management that resolution of most of these matters will not have a material adverse effect on the financial condition of the Board. Arbitrage Rebate Section 148(f) of the Internal Revenue Code of 1986, as amended, and the proposed and temporary regulations issued by the Internal Revenue Service on May 15, 1989, and made final effective May 18, 1992, require the rebate to the United States government of the excess of earnings on non-purpose investments over earnings which would have been made on such investments if they had been made at bond yield, together with earnings on all future rebate amounts. Although rebates need not be remitted until five years after issuance of the bonds and each five (5) years thereafter, computations must be made annually to show financial position at fiscal year end. Okaloosa County has six bond issues and one note falling within the purview of the above directives - $26,615,000 Sales Tax Revenue Bonds, Series 2009; $3,600,000 Capital Improvement Revenue Bond, Series 2011; $13,450,000 Fourth Cent Tourist Development Tax Revenue Bonds, Series 2000; $10,860,000 Airport Revenue Bonds, Series 2003; $31,170,000 Water and Sewer Revenue Bonds, Series 2004; $65,150,000 Water and Sewer Revenue Bond, Series 2006; and $15,605,000 Water and Sewer Revenue Note Series 2012. According to the calculations, the Board has no rebate liability with respect to the bonds at September 30, 2013. This determination reflects the liability on that date only and does not represent any amount that may be due at the end of the five-year period from the delivery date of the bonds. 85  Okaloosa County, Florida NOTES TO FINANCIAL STATEMENTS Fiscal Year Ended September 30, 2013 NOTE 17 – COMMITMENTS AND CONTINGENCIES - CONTINUED Florida Department of Juvenile Justice Reconciliation The State of Florida Department of Juvenile Justice changed the manner in which it shared costs with Counties for juvenile detention in FY08-09 and as a result a greater share of costs were passed on to the Counties. Various counties, including Okaloosa County, have filed administrative challenges to the reconciliations of the Department of Juvenile Justice. Rule challenges have been filed to the Department’s reconciliation for FY09-10 through 11-12. The rule challenges were affirmed on appeal and Okaloosa County has overpaid the Department of Juvenile Justice $2,415,023 for the three years at issue. The Department has admitted that this overpayment calculation is correct but has taken the position that there is no legislative funding for this overpayment, and therefore it cannot credit or refund Okaloosa County for this amount. An additional credit for FY-12-13 has been calculated at $682,841; however the Department has taken the same position. No amounts have been recorded in the financial statement for these credits or refunds since realization is uncertain. Medicaid County Billing Retrospective In accordance with section 409.915, F.S., Okaloosa County must contribute a portion of the cost for State Medicaid for county “resident” Medicaid patients. House Bill 5301 pledged the Agency for Health Care Administration (AHCA) would certify and identify the county costs of unpaid retroactive amounts owed from November 2001 thru April 2012 and allow the County to either pay or petition for hearing. July 2012, AHCA certified open claims of $839,540 with net payments, credits, and transfers of $562,436 resulting in a preliminary certification of $277,104. After final certifications, AHCA certified the County’s portion of the retroactive amounts to be $265,850. The Board approved the final certification of $265,850 resulting in reduction of the State Revenue Sharing of $6,277 per month for 2013 and $3,139 per month for the following four (4) year period. NOTE 18 – RELATED ORGANIZATION Library Cooperative