Okaloosa County BOCC — May 20, 2014 — reading text

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 Packet Pg. 143  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 The Okaloosa County Board of County Commissioners entered into an inter-local agreement with six (6) municipalities located within Okaloosa County, Florida to provide for operation of a countywide public library system. The governing body of the cooperative is the Okaloosa County Public Library Cooperative Board made up of one appointee from each municipality and the County. Capital assets remain the property of the participating municipalities. Under the agreement, the County agreed to provide annual funding to the cooperative. The current agreement was effective October 1, 2012 and ended on December 31, 2013and is subject to renewal or revision December 2013. The Okaloosa County Board of County Commissioners’ contribution to the library cooperative for the year ended September 30, 2013 was $513,600. In addition, approximately $81,274 of allocable indirect costs was charged to the fund. These charges were treated as an in-kind contribution by the County during the year ended September 30, 2013. The future commitment to the library cooperative in 2014 is $513,600. 86 Packet Pg. 144  Okaloosa County, Florida NOTES TO FINANCIAL STATEMENTS Fiscal Year Ended September 30, 2013 NOTE 19 – NON-RECURRING TRANSACIONS Tourist Development Special Revenue Fund In 2013, the Board contributed $6,395,000 to the City of Destin for the beach restoration project. The funds contributed were provided by the Tourist Development Funds’ Special Assessment and tourist development taxes. The expenditure is included as part of culture and recreation costs in the Tourist Development Special Revenue fund. The Board recovered $598,590 of illegally used British Petroleum monies by its former Tourist Development Director during the year ended September 30, 2013. Other physical assets such as furniture and motorcycles held by Okaloosa County are planned to be sold at auction in 2014. British Petroleum has confirmed the Company does not want a refund of any illegal purchases made using oil spill dollars and requested they be used for their original purpose of area promotion. The remaining unspent British Petroleum monies of $589,960 are restricted in the Tourist Development Fund at September 30, 2013 and are projected to be spent in 2014. Water and Sewer Enterprise Fund In accordance with an interlocal agreement with the City of Fort Walton Beach, Florida, the Board contributed 50% of the common costs for the replacement of a thirty inch pre-stressed concrete cylinder pressure force main. The capital contribution of $1,497,480 is reported as contribution to other government in the water and sewer fund. The asset will be owned and operated by the City of Fort Walton Beach, Florida for twenty years and then possession of the asset will transfer to Okaloosa County. NOTE 20 – SUBSEQUENT EVENTS 7th Special Forces Group Fiber Optic Contract October 2013 Okaloosa County entered into an agreement with 96th Communications Squadron from Eglin Air Force Base to provide a 36 strand single mode fiber path between Building 4545 at the 7th Special Forces Group Airborne compound on Duke Field to Building 44 on Eglin Air Force Base. The agreement will result in a one-time fee to the County of $1,343,135. Airport Refunding Revenue Bond Issue Okaloosa County authorized refinancing of the County’s Series 2003 Airport Revenue Bonds and repayment of $1.2 million of the existing $2 million loan with the Florida Local Government Finance Commission through a negotiated sale with Compass Mortgage Corporation. In January 2014, the County issued a Airport Revenue Refunding Bond, Series 2014 for $8,920,000 with average coupon rate of 3.15%. The debt will be repaid with annual installments ranging from $360,000 to $740,000 from October 1, 2014 to October 1, 2028. Renovation of Shalimar Annex and Crestview Courthouse In 2013, Okaloosa County began Phase I of the renovations to the Shalimar Annex. Phase I of the two phase project will cover design, build and architectural services. The County reached a $1,600,000 agreement regarding the reverter clause at the Annex with the first installment beginning in September 2014. The liability for the settlement agreement has been recorded in the Self Insurance Fund as of September, 30, 2013. In November the contractor was given direction to move forward with Phase II of the design process which includes refining the space planning data, developing the conceptual drawings, 87 Packet Pg. 145  Okaloosa County, Florida NOTES TO FINANCIAL STATEMENTS Fiscal Year Ended September 30, 2013 NOTE 20 – SUBSEQUENT EVENTS Renovation of Shalimar Annex and Crestview Courthouse - Continued and developing 100% construction drawings. At March, 2014, the project design was near 35% and demolition of the current structure is slated to being May, 2014. As part of this project certain space in the Annex used by the Okaloosa County Sheriff’s Office is required to be vacated. Improvements/renovations will be made to the Sheriff’s Administration Building to allow consolidation due to the space lost. Okaloosa County selected a design-build firm in March, 2014 to oversee the renovations of the Crestview Courthouse. The County will be funding these projects with one debt issuance not to exceed $20 million. Merger of Convention Center Enterprise Fund into Tourist Development Special Revenue Fund Effective October 2013, Okaloosa County Convention Center paid the Tourist Development Tax 4th Cent Bonds, Series 2000 remaining balance of $155,000. With payment of the debt, the Convention Center no longer qualifies as an Enterprise fund and was collapsed into the Tourist Development Special Revenue Fund for reporting purposes. Health Insurance Reimbursement In April, 2014 the BCC received approximately $3,709,000 from Blue Cross/Blue Shield of Florida for refunds relating to its health insurance program for the period of October 1, 2011 to September 30, 2013. The refunds are based on an agreement with the Company that provides a look back comparison of earned premium to incurred claims. The County did not estimate a refund based on the volatility and uncertainty associated with predicting health insurance claims incurred. The refund will be recorded in the self- insurance fund