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Agenda Packet 02-21-2017
CAPE CANAVERAL CITY COUNCIL MEETING Library Meeting Room 201 Polk Avenue, Cape Canaveral, Florida 32920 AGENDA February 21, 2017 6:00 PM CALL TO ORDER: PLEDGE OF ALLEGIANCE: ROLL CALL: PUBLIC PARTICIPATION: Any member of the public may address any items that do not appear on the agenda and any agenda item that is listed on the agenda for final official action by the City Council excluding public hearing items which are heard at the public hearing portion of the meeting,ministerial items (e.g. approval of agenda, minutes, informational items), and quasi-judicial or emergency items. Citizens will limit their comments to three (3) minutes. The City Council will not take any action under the "Public Participation" section of the agenda. The Council may schedule items not on the agenda as regular items and act upon them in the future. PRESENTATIONS/INTERVIEWS: 6:15 p.m. 6:30 p.m. Proclamation supporting the Merritt Island National Wildlife Refuge Community Conservation and Education Center. Accept the Annual Audited Financial Statements and Independent Auditor's Report for the Fiscal Year ended September 30, 2016—Presentation by Zach Chalifour, James Moore & Co. CONSENT AGENDA: 6:30p.m. 6:40 p.m. 1. Approve Minutes for January 17, 2017 Regular City Council Meeting. 2. Resolution No. 2017-02; in support of the 'Safe Cities, Safe Florida' initiative through the Florida League of Cities, Inc. during the fiscal year 2016-2017; providing for the repeal of prior inconsistent resolutions; severability and an effective date. 3. Resolution No. 2017-03; commending the Florida Association of City Clerks for its 45th Anniversary; providing for the repeal of prior inconsistent resolutions; severability and an effective date. 4. Approve Agreement between the City of Cape Canaveral and Space Coast Art Festival, Inc. and authorize the Mayor to execute Agreement for same. City of Cape Canaveral, Florida City Council Meeting February 21, 2017 Page 2 of 2 PUBLIC HEARING: 6:40 p.m. 6:50 p.m. 5. Ordinance No. 03-2017; amending Sections 50-4 and 2-283 of the Cape Canaveral City Code regulating sleeping and camping upon public streets and sidewalks,beach end streets, beach dune crossovers, beaches and parks; providing for procedures to remove personal property remaining in camp sites; providing for penalties; and providing for the repeal of prior inconsistent ordinances and resolutions,incorporation into the City Code,severability and an effective date, second reading. REPORTS: 6:50 p.m. 7:00 p.m. ADJOURNMENT: Pursuant to Section 286.0105, Florida Statutes, the City hereby advises the public that: If a person decides to appeal any decision made by the City Council with respect to any matter considered at this meeting,that person will need a record of the proceedings,and for such purpose that person may need to ensure that a verbatim record of the proceedings is made,which record includes the testimony and evidence upon which the appeal is to be based. This notice does not constitute consent by the City for the introduction or admission into evidence of otherwise inadmissible or irrelevant evidence,nor does it authorize challenges or appeals not otherwise allowed by law. In accordance with the Americans with Disabilities Act: all interested parties may attend this Public Meeting. The facility is accessible to the physically handicapped. Persons with disabilities needing assistance to participate in the proceedings should contact the City Clerk's office (868-1220 x220 or x221) 48 hours in advance of the meeting. City of Cape Canaveral [City Seal] City Council Agenda Form City Council Meeting Date: 2/21/2017 PRESENTATIONS/INTERVIEWS Subject: Proclamation supporting the Merritt Island National Wildlife Refuge Community Conservation and Education Center. Department: Legislative Summary: Established in 1963, the Merritt Island National Wildlife Refuge (MINWR) provides critically important habitat for over 1500 species of animals and plants, including numerous animals that are federally listed as threatened and/or endangered (Attachment 1). MINWR has continued to enjoy popularity,ranking sixth out of 563 refuges across the country in terms of yearly visitors. The protected waters within its borders have provided an essential benefit to maintaining the long-term health of the Indian River Lagoon. Recently, the United States Department of Interior,Fish and Wildlife Service approved over$4 million towards construction of a new Refuge Visitor Information Center. It will serve both conservation and education purposes to benefit the growing number of national and international Visitors seeking to experience the extraordinary wildlife that thrives right outside our area's historic gateway to space. The funds will cover construction of the Center; however, appropriated funds cannot be used to fund exhibits the Center's exhibits. Independent fundraising will be required. The Merritt Island Wildlife Association (MIWA), a nonprofit group which strives to promote conservation, awareness and appreciation for MINWR, was requested by the Fish and Wildlife Service to raise the funds needed for the Center's exhibits. MIWA President Chris Fairey and Vice-President Laurilee Thompson are present tonight to receive the Proclamation(Attachment 2) on behalf of the Association. Submitting Council Member: Mayor Bob Hoog [MBH initials] Date: 9th - Feb - 2017 Attachments: (1) List of MINWR Endangered Species; (2)Proclamation Financial Impact: Staff time to prepare this Agenda Item. Reviewed by Administrative/Financial Services Director: John DeLeo [JD initials] Date: 2/8/17 The City Manager recommends that City Council take the following action: Present Proclamation supporting the Merritt Island National Wildlife Refuge Community Conservation and Education Center. Approved by City Manager: David L. Greene [DLG initials] Date: 2/8/17 [logo] U.S. Fish & Wildlife Service Attachment 1 Merritt Island [logo] A Unit of the National Wildlife National Wildlife Refuge \ Florida Refuge System Refu je System Endangered Species [Photo: Endangered species - Birds/Eastern Indigo Snake.] The refuge supports one of the highest numbers of endangered and threatened species within the National Wildlife Refuge system. Eastern Indigo Snake The eastern indigo snake, the largest non- poisonous snake in North America, can reach eight feet in length. Florida Scrub-jay [Photo: Florida Scrub-jay] Similar in size and color to the blue jay, the scrub jay lacks a crest and is grey around the shoulders. Gopher Tortoise [Photo: Gopher Tortoise] The only tortoise east of Texas, the gopher tortoise is found mostly in the well-drained scrub habitat. Southeastern Beach Mouse [Photo: Southeastern Beach Mouse] The protected beach of the refuge combined with the beach of the Cape Canaveral Air Station and Canaveral National Seashore may be the last population stronghold for this tiny rodent. West Indian Manatee [Photo: West Indian Manatee] These gentle slow-moving creatures frequent the refuge year round. Wood Stork [Photo: Wood Stork] Wood storks can be found wading in the refuge impoundments or in the shallow ditches, looking for fish. Last Updated: May 01, 2015 U.S. Fish & Wildlife Service National Wildlife Refuge System Notices Accessibility Disclaimer Privacy FOIA Department of the Interior (http://www.doi.ciov/) USA.gov (http://www.usa.gov/) Attachment 2 [City Seal] Official Proclamation City of Cape Canaveral, Florida WHEREAS, the Merritt Island National Wildlife Refuge is the sixth most-visited refuge out of 563 refuges in the United States, with 1.2 million visitors in 2015 who enjoyed watching wildlife, exploring history, hiking, fishing, hunting, birding and biking; and WHEREAS, the economic value of the Indian River Lagoon has been estimated at more than $3.1 billion annually to our State and region, and the protected waters of the Merritt Island National Wildlife Refuge are essential for the long term health of the Indian River Lagoon; and WHEREAS, the Merritt Island National Wildlife Refuge provides critically important habitat for over 1500 species of animals and plants including a number of animals that are federally listed as threatened and endangered; and WHEREAS, the United States Department of Interior, Fish and Wildlife Service has approved over $4 million for an exciting new Refuge Visitor Information Center to serve as the Community Conservation and Education Center; and WHEREAS, the United States Department of Interior, Fish and Wildlife Service does not use appropriated funds for the exhibits and has requested the non-profit Merritt Island Wildlife Association raise the funds with community support; and WHEREAS, the Community Conservation and Education Center will benefit the entire East Central Florida community as well as the growing number of national and international tourists seeking to experience the extraordinary wildlife that thrives at our nation's most historic gateway to space; and WHEREAS, the City of Cape Canaveral and community partners support providing safe and accessible recreation and educational opportunities, with the goal of fostering conservation of our unique coastal resources, including the Indian River Lagoon; and WHEREAS, the City of Cape Canaveral recognizes that the new Merritt Island National Wildlife Refuge Community Conservation and Education Center will contribute to the economic viability of the City of Cape Canaveral and Brevard County by attracting tourists who are interested in the natural Florida, including our beaches, the Indian River Lagoon, the St John's River and our wildlife refuges. NOW THEREFORE, I, Robert Hoog, Mayor of the City of Cape Canaveral, Brevard County, Florida, do hereby pledge support for the MERRITT ISLAND NATIONAL WILDLIFE REFUGE COMMUNITY CONSERVATION AND EDUCATION CENTER Signed and sealed this 21st day of February, 2017 Robert Hoog, Mayor [gold seal] [City Seal} City of Cape Canaveral City Council Agenda Form City Council Meeting Date: 2/21/2017 PRESENTATIONS/INTERVIEWS Subject: Accept the Annual Audited Financial Statements and Independent Auditor's Report for the Fiscal Year ended September 30, 2016 — Presentation by Zach Chalifour, James Moore & Co. Department: Financial Services Summary: The Accounting Firm of James Moore & Co. performed the Annual Audit of the City's Financial Statements for the Fiscal Year ended September 30, 2016. James Moore & Co. determined the Financial Statements present fairly, in all material respects, the financial position of the City of Cape Canaveral and are in conformity with Generally Accepted Accounting Principles. The Audit was conducted in accordance with Generally Accepted Auditing Standards and Government Auditing Standards. The findings and recommendations will be presented by Audit Manager Zach Chalifour. Financial Highlights: • The assets of the City exceeded its Iiabilities at the close of the most recent year by $46.1 million (net position). Of this amount, $9 million (unrestricted net position) may be used to meet the City's ongoing obligations. • The City's total net position increased by $4.98 million. This is the result of construction projects completed during the year and the addition of capital assets. funded primarily through capital contributions and grants. • At the close of the Fiscal Year, the City's governmental funds reported combined ending fund balances of $7.63 million, a decrease of $2.1 million in comparison with the prior year. • At the close of the Fiscal Year, fund balance for the General Fund was $7,004,754. Of this amount, $96,734 relates to inventory and prepaids as well as long term advances and is, therefore, nonspendable. The remaining Fund balance includes: restricted ($447,214), committed ($2,479,667) and unassigned ($3,981,139) balances. Within the committed fund balance category,the largest piece is $2,098,515 committed for construction of a New City Hall. Unassigned funds are available to fund on-going activities of the City's various General Fund services and programs. • The City's total long-term liabilities increased $1.49 million. This was due primarily to receipt of additional State Revolving Fund moneys for various wastewater and stormwater projects, offset by annual debt service payments on the Capital improvement Revenue Note. Auditor Financial Statement Findings: 2016-001. Grant-Funded Retainage Payable Criteria: Generally accepted accounting standards dictate that intergovernmental revenues for grant reimbursements should be recognized in the same period as the related expenditures occur. Condition: We noted actual expenditures in the Capital Construction Fund included $82,000 of amounts still outstanding in retainage payable related to a grant-funded project. In reconciling City Council. Meeting Date: 2/21/2017 Presentations/lnterviews Page 2 of 3 these expenditures to the related grant revenues,we noted no provision had been made to record the unbilled grant receivable and intergovernmental revenue related to these expenditures. Cause: The grant expenditures were not reconciled to the related revenues to ensure all related reimbursements had been accrued, whether billed or unbilled. Effect: Had the audit adjustment not been recorded, revenues and fund balance would have been significantly understated. Recommendation: We recommend all grant expenditures be reconciled to the related revenues on no less than an annual basis to ensure all grant-related items are recorded in the proper accounting period. 2016-002 Interfund Activity and Budgetary Compliance Criteria: Generally accepted accounting standards establish recognition and measurement criteria for interfund transaction, including long-term advances. Florida Statutes and the City Charter require the City to approve an annual budget for the Cape Canaveral CRA fund and for expenditures and transfers out to stay within the confines of the approved budget. Condition: During the year,the City Council approved a $470,000 advance from the Wastewater Fund to the Cape Canaveral CRA Fund (the CRA) to fund an interfund transfer from the CRA Fund to the Wastewater Fund for the CRA's contribution toward a wastewater project in the District. However, no accounting entry was made at the time of the Resolution's approval to record the transaction. As a result, a significant audit adjustment was required to correct the recording of this transaction and record the interfund transfer and advance. This adjustment also resulted in the CRA Fund's transfers out exceeding the approved budget. Management's responses to auditor finding are as follows: 2016-001 Grant-Funded Retainage Payable—The Financial Services Department will ensure that when expenditures for an outstanding retainage payable related to a grant—funded project is expensed, a corresponding entry for an unbilled receivable will be entered into the accounting system during the same Fiscal Year which will ensure accurate reporting of revenue and fund balance. 2016-002 Interfund Activity and Budgetary Compliance — The Financial Services Department will ensure that any interfund transfer and advance is recorded at the time of Resolution approval and expensed to the CRA. Resolution No. 2015-04 was approved by the City Council for a $470,000 loan to the CRA, from the Wastewater Fund to fund a wastewater project. At that time, a debt repayment schedule was recorded in the CRA as stated in the Resolution and the $470,000 expense was recorded in the Enterprise Capital Fund. The CRA has already paid two years of a 10 year loan. Submitting Department Director: John DeLeo [JD initials] Date: 2/8/17 City Council Meeting Date: 2/21/2017 Presentations/Interviews Page 3 of 3 Attachment: The City of Cape Canaveral's Comprehensive Annual Financial Report(CAFR). Financial Impact: Staff time to prepare this Agenda Item and cost of the Audit. Reviewed by Administrative/Financial Services Director: John DeLeo [JD initials] Date: 2/8/17 The City Manager recommends that City Council take the following action: Accept the Annual Audited Financial Statements and Independent Auditor's Report for the Fiscal Year ended September 30, 2016. Approved by City Manager: David L. Greene [DLG initials] Date: 2/9/17 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF CAPE CANAVERAL, FLORIDA FISCAL YEAR ENDED SEPTEMBER 30, 2016 Prepared By: City of Cape Canaveral Finance Department THIS PAGE INTENTIONALLY LEFT BLANK CITY OF CAPE CANAVERAL,FLORIDA TABLE OF CONTENTS SEPTEMBER 30,2016 Page Number(s) INTRODUCTORY SECTION List of Principal Officials 3 Letter of Transmittal 7 - 14 Organizational Chart 17 Certificate of Achievement for Excellence in Financial Reporting 19 FINANCIAL SECTION Independent Auditors' Report 25—26 Management's Discussion and Analysis 29—39 Basic Financial Statements Government-wide Financial Statements: Statement of Net Position 42 Statement of Activities 43 Fund Financial Statements: Balance Sheet—Governmental Funds 44 Reconciliation of the Balance Sheet of the Governmental Funds to the Statement of Net Position 45 Statement of Revenues,Expenditures, and Changes in Fund Balances— Governmental Funds 46 Reconciliation of the Statement of Revenues,Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 47 Statement of Revenues,Expenditures, and Changes in Fund Balance— Budget to Actual-General Fund 48 Statement of Revenues,Expenditures, and Changes in Fund Balance— Budget to Actual-Cape Canaveral Community Redevelopment Agency Fund 49 Statement of Net Position—Proprietary Funds 50 Statement of Revenues,Expenses, and Changes in Fund Net Position— Proprietary Funds 51 Statement of Cash Flows—Proprietary Funds 52 Notes to Financial Statements 54- 74 Required Supplementary Information Schedule of Funding Progress—Other Post-Employment Benefits 76 Combining and Individual Fund Statements and Schedules Combining Balance Sheet—Nonmajor Governmental Funds 80 Combining Statement of Revenues,Expenditures, and Changes in Fund Balances— Nonmajor Governmental Funds 81 Schedule of Revenues,Expenditures, and Changes in Fund Balances—Budget to Actual 82 - 84 - i- CITY OF CAPE CANAVERAL,FLORIDA TABLE OF CONTENTS SEPTEMBER 30,2016 (Continued) Page Number(s) STATISTICAL SECTION Table 1 —Net Position by Component 89 Table 2—Changes in Net Position 90—91 Table 3—Fund Balances of Governmental Funds 92—93 Table 4—Changes in Fund Balances of Governmental Funds 94—95 Table 5—Tax Revenues by Source of Governmental Funds 96 Table 6—Assessed Value and Actual Value of Taxable Property 97 Table 7—Property Tax Rates—Direct and Overlapping Governments 98 Table 8—Principal Property Taxpayers(Major Taxpayers) 99 Table 9—Property Tax Levies and Collections 100 Table 10—Ratios of Outstanding Debt by Type 101 Table 11 —Ratio of Net General Obligation Bonded Debt to Assessed Value and Net Bonded Debt Per Capita 102 Table 12—Direct and Overlapping Governmental Activities Debt 103 Table 13—Pledged-Revenue Coverage—Wastewater System 104 Table 14—Demographic Statistics 105 Table 15—Principal Employers 106 Table 16—Full-Time Equivalent City Government Employees by Function/Program 107 Table 17—Operating Indicators by Function/Program 108 Table 18—Capital Asset Statistics by Function/Program 109 Table 19—Water/Wastewater Distribution and Consumption—Unaudited 110 Table 20—Water and Wastewater Rates—Unaudited 111 Table 21 —Construction,Property Value and Bank deposits—Unaudited 112 Table 22—Miscellaneous Statistics—Unaudited 113 SINGLE AUDIT AND OTHER REPORTS Schedule of Expenditures of Federal Awards and State Financial Assistance 117 Notes to Schedule of Expenditures of Federal Awards and State Financial Assistance 118 Schedule of Findings and Questioned Costs 119 Independent Auditors' Report on Compliance for Each Major Federal Program and State Project and on Internal Control Over Compliance In Accordance with the Uniform Guidance and Chapter 10.550, Rules of the Auditor General 122— 123 Independent Auditors' 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 124— 123 Independent Auditors' Management Letter Required by Chapter 10.550, Rules of the State of Florida Office of the Auditor General 126— 127 Independent Accountants' Examination Report 128 Management's Response to Findings 130 - ii- Introductory Section - 1 - THIS PAGE INTENTIONALLY LEFT BLANK - 2 - City of Cape Canaveral, Florida Comprehensive Annual Financial Report Fiscal year ended September 30, 2016 City Council Honorable Robert Hoog, Mayor Betty Walsh, Mayor Pro Tem John Bond Michael Brown Brendan McMillin City Manager David Greene City Attorney Administrative/Financial Services Director Anthony Garganese John DeLeo - 3 - THIS PAGE INTENTIONALLY LEFT BLANK - 4 - Letter of Transmittal - 5 - THIS PAGE INTENTIONALLY LEFT BLANK. - 6 - [City Seal] City of Cape Canaveral February 8, 2017 Honorable Mayor and Members of City Council City of Cape Canaveral Cape Canaveral, Florida 32920 Dear Mayor and Members of City Council: It is our pleasure to submit this Comprehensive Annual Financial Report (CAFR) for the City of Cape Canaveral, Florida, for the Fiscal Year ended September 30, 2016. It fulfills the requirements set forth pursuant to Florida Statutes Section 218.39 and Chapter 10.500 of the Rules of the Auditor General of the State of Florida. Responsibility for accuracy of the data and completeness/fairness of the presentation, including all disclosures, rests with the City. The presentation of this data is fully supported by management's establishment of 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 City's financial statements in conformity with generally accepted accounting principles (GAAP). Because the cost of internal controls should not outweigh its benefits, the City'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 Report is complete and reliable in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of the City on a Government-wide and Fund basis. All disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included. Florida Statutes and the City Charter require that an annual financial audit be performed by independent certified public accountants. The audit was performed by James Moore & Co., P.L., licensed certified public accountants. The goal of the independent audit is to provide reasonable assurance that the financial statements of the City for the Fiscal Year ended September 30, 2016 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 auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the City's financial statements for the Fiscal Year ended September 30, 2016 are fairly presented in conformity with GAAP. The independent auditor's report is located at the front of the financial section of this Report. - 7 - 105 Polk Avenue • Post Office Box 326 • Cape Canaveral, FL 32920-0326 Telephone: (321) 868-1220 • FAX: (321) 868-1248 www.cityofcapecanaveral.org • email: info@cityofcapecanaveral.org The Honorable Mayor, et al GAAP requires that management provide a narrative introduction, overview and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City's MD&A can be found immediately following the report of the independent auditors. PROFILE OF THE GOVERNMENT The City of Cape Canaveral was incorporated as a municipal corporation in May 1963. The City is located on the Atlantic Ocean approximately midpoint between Miami and Jacksonville and is slightly over 50 miles east of Orlando. This 1.9 square-mile beach and coastal community serves a population of 10,171 and is bounded on the west by the Banana River, on the north by Port Canaveral, on the east by the Atlantic Ocean and on the south by the City of Cocoa Beach. The City is governed by an elected mayor, mayor pro tem and three council members. The Council is responsible, among other things, for passing ordinances, adopting the budget, approval of property tax levies, appointing committees and hiring of the City Manager. The City Manager is responsible for carrying out the policies and ordinances of the Council, overseeing the day-to-day operations of the City, drafting the annual budget and appointing Directors of the various City departments. The City provides a full range of services which include police, contracted with the Brevard County Sheriff's Office, and fire/EMS protection contracted with the Cape Canaveral Volunteer Fire Department, Inc. The City provides recreational activities, cultural events, solid waste, wastewater, reclaimed water, stormwater, community development and maintenance of streets and infrastructure. The annual budget, adopted prior to October 1st, serves as the foundation for the City's financial planning and control. The budget is approved by fund. Amendments to funds and transfers between departments require Council approval. Budget to actual comparisons are provided in this Report for each governmental fund for which an appropriated annual budget has been adopted. ECONOMIC CONDITION AND OUTLOOK The City's economy is anchored by Port Canaveral, Canaveral Air Force Station, Patrick Air Force Base and Kennedy Space Center, along with ancillary defense and aerospace contractors. The City's proximity to Orlando, coupled with its riverfront parks and beaches, also help spur tourism activity. Income levels are average. Cape Canaveral unemployment during Fiscal Year 2016 averaged 4.6% and is currently at 5.3%, (according to Homefacts.com). The national unemployment rate dropped to 5.0% in September 2016 (reference the Bureau of Labor Statistics). Due to accelerated hiring, Cape Canaveral, as well as Brevard County, will continue to show improvement due to increased industry growth at the Kennedy Space Center and Canaveral Air Force Station; increased aerospace and high technological manufacturing companies such as Blue Origin, Space X, Embraer S.A. and Northrup Grumman's expansion at the Melbourne International Airport; expansion of Port Canaveral's Cruise and Cargo Industry; and numerous service-oriented companies countywide. Housing indicators have risen according to data provided by the Economic Development Commission of the Space Coast, Winter-Spring - 8- The Honorable Mayor,et al 2016 Economic Review. The area's median single-family home price has risen by 11.4% over the previous year and is expected to rise again in 2017. Overall, foreclosure rates within the county are down considerably, and the City of Cape Canaveral with the aforementioned proximity to core businesses, military installations and the second busiest cruise ship port in the world continues to fare better than most municipalities. The above factors will likely lead to continued moderate increase in assessed property valuation with increased revenues projected for utility taxes, franchise fees, state shared revenues, building permits, impact fees and utility revenues. MAJOR INITIATIVES Capital Projects completed and/or currently being undertaken by the Public Works Services (PWS) Department are numerous and much needed for improvements to both the City's Wastewater and Stormwater systems. These Capital Projects are funded through a number of sources including Enterprise Funds (Stormwater and Wastewater), an approved State Revolving Fund (SRF) loan from Florida Department of Environmental Protection (FDEP), grants from various agencies (e.g., St. Johns River Water Management District [SJRWMD]) and appropriations by the State Legislature. Transportation The Florida Department of Transportation (FDOT) funded portion of the North Atlantic Avenue Streetscape Project was completed in December 2016. Grant funds in the amount of $1.9 million were received through the Space Coast Transportation Planning Organization (SCTPO) from FDOT and $860,000 in funding was received from Brevard County Transportation Impact Fees. The Project included construction of a new pedway and sidewalks, lighting and stormwater improvements, landscaping improvements and numerous decorative features. Additional improvements and beautification tasks will be completed in 2017. The City was awarded a grant from Florida Department of Economic Development (DOE) in the amount of $24,000 to revise the Draft Pedestrian and Bicycling Plan. The Project was initiated in November 2016 and will include recommended infrastructure improvements for the benefit of pedestrians, bicyclists and motorists. The Grant also included funds in the amount of $16,000 for the development of a Master Plan for Canaveral City Park. Both projects will be completed in May 2017. Wastewater System Lift Stations No. 6 (Imperial Drive) and No. 7 (West Central Boulevard) were replaced and enlarged in anticipation of continued development in the northern portion of the City. Lift Station No. 7 was relocated to City-owned property in Manatee Sanctuary Park for easier access of maintenance activities. Emergency generators were also installed at each of the lift stations. Project completion was in December 2016. The construction of a 2.5-million gallon reclaimed water storage tank at the WWTP was completed. The addition of the new tank increases the City's storage capacity for reclaimed water to 3.5-million gallons. The new tank will allow the City to limit discharges of treated wastewater to the Banana River Lagoon (BRL). The Project also included expansion of the Belt Filter Press Building, installation of a second belt filter press and rehab of the existing belt filter press (over 20 years old). Project completion was in March 2016. - 9- The Honorable Mayor,et al Phase I of the Holman Road Sanitary Sewer Improvements Project was completed to alleviate sewer back-up in a residence along Holman Road and to increase sewer capacity. The sanitary sewer line located beneath Holman Road was replaced with a 10-inch diameter pipe. The work was the first phase of a three-phased project which would ultimately replace the entire sanitary sewer line to Lift Station No. 2 located along Center Street. Construction of Phase I was completed in May 2016. The two clarifiers at the WWTP were fitted with covers to eliminate algae formation. Previously, algae formed in the clarifiers due to exposure of partially-treated wastewater to sunlight. Algae removal was a time-consuming task and a safety hazard to PWS Staff. The covers were installed in March 2016. Many smaller-scope improvement projects were also completed at the WWTP in 2016 including: • RAS pump and motor replacements; • WAS pump and motor replacements; • IRP pump and motor replacements; • Sludge holding blower replacements; and • Wastewater sampler replacements. Stormwater System Major construction was completed on the Canaveral City Park Ex-filtration Project including the construction/installation of exfiltration piping beneath Canaveral City Park. The piping will allow for exfiltration of stormwater from area streets into the surficial aquifer. This Project will eliminate a substantial amount of stormwater discharged to the BRL. Major construction was completed in December 2016; ancillary construction will be completed in January 2017. The City was awarded an EPA 319 Grant in the amount of $98,000 for the restoration of the Banana River shoreline along Manatee Sanctuary and Banana River Parks. The shoreline has been severely eroded over the past several years. Development of engineering drawings and bid specifications was initiated in November 2016. The Project includes the installation of rip rap, planting of native vegetation and construction of stormwater swales. Project completion is scheduled for July 2017. The City maintained an active stormwater system maintenance program in 2016. Activities included the replacement of older style stormwater inlets with new Type "C" inlets. These newer inlets require less maintenance, are not damaged as easily by vehicular traffic, prohibit larger debris from entering the storm water system and provide improved stormwater flow. Street sweeping of all curbed streets also continues on a monthly basis. Major 2017 Wastewater and Stormwater Projects Capital projects to be initiated or completed by PWS in 2017 are numerous and much needed for improvements to both the City's Wastewater and Stormwater systems. These capital projects will be funded through a number of sources including Enterprise Funds (Stormwater and Wastewater), an approved SRF loan from FDEP, and grants from various agencies (e.g., SJRWMD). - 10- The Honorable Mayor,et al The Oxidation Ditch Improvements Project includes the complete redesign of the Oxidation Ditch system at the WWTP. The redesign will provide a second Oxidation Ditch process for use in emergency situations and will allow for improved maintenance. The Work will include refurbishment of all pumps and valves for a more efficient system and installation of a cover over the existing Oxidation Ditch to limit offsite spray. Construction is scheduled to begin in January 2017. Phases II/III of the Holman Road Sanitary Sewer Improvements Project will be completed to increase sewer capacity in anticipation of further development in the central portion of the City. The sanitary sewer line from Holman Road to Lift Station No. 2 will be replaced with a 10-inch diameter pipe. Construction of Phase I was completed in May 2016. The Infrastructure Maintenance (IM) Building at the WWTP will be demolished and a new, larger building will be constructed at the site. The existing building has aged with numerous deficiencies affecting operational efficiency and the work environment. Storage facilities have limited capacity for IM equipment and vehicles. Construction is scheduled to begin in December 2017. Numerous other larger-scope wastewater and stormwater projects will be initiated or completed in 2017 including: •Emergency generators will be purchased/installed at the following facilities: WWTP, the new City Hall and the BCSO Annex/old City Hall; •Lift Station No. 5 located on Columbia Drive will be rehabilitated; •The Intermediate Pump Station at the WWTP will be rebuilt to allow for larger flows and eliminate overflows; •Force Main No. 3 from Lift Station No. 3 (West Central Boulevard) to the WWTP will be replaced; and •Five nutrient-separating baffle boxes will be upgraded. Numerous smaller-scope wastewater and stormwater projects will be completed or initiated in 2017 including: •RAS pump and motor replacements; •WAS pump and motor replacements; •IRP pump and motor replacements; •Reclaimed water pump replacements; •Lift station pump replacements; •Transfer basin pump and motor replacements; •Improvements to the de-grit system; •Sludge holding blower replacements; •Improvements to the WWTP SCADA system; and •Construction of numerous swales and exfiltration trenches along the BRL shoreline. PWS Staff will also continue to assist other departments in the completion of City infrastructure improvement projects. Branding. The City of Cape Canaveral Branding Initiative was completed in 2015 and is increasing overall awareness/positive perception of the City by engaging residents/businesses to market the City internally and externally as a vibrant, attractive City in which to live, work, play, learn, invest and visit. - 11 - The Honorable Mayor,et al City Hall Project. The current City Hall facility was built in 1966/67 and has served the City well; however, it no longer meets the City's needs. Core City Hall services have been separated, with the Community Development Department located across the street (110 Polk Ave.) from City Hall and the City Council Chambers located further down the street at the Public Library. Accordingly, all are challenged to properly function and serve the public in separate buildings. Aging and obsolete, the City Hall building and the Community Development Department buildings, were constructed in the late-1960s and early-1970s. The facility at 110 Polk Ave. will be demolished as part of the overall New City Hall project and all three of these core services will be available under one roof. The old City Hall facility will be utilized as the City's Cultural Heritage Center. An extremely competitive construction/financing opportunity was seized by the City and in July of 2013, GLE Associates was engaged to provide design and construction support services for a New City Hall resulting in a remarkable classical Mediterranean Revival design. As part of this project, a portion of the Polk Avenue right-of-way has been closed to accommodate the creation of a paver brick piazza/plaza adjacent to AIA. This area will support the goal of a connected community campus of buildings as well as provide a public gathering area that will serve both the current and New City Hall buildings. Construction was started in April 2016; occupancy is anticipated in April 2017. [GLE conceptual drawing of new City Hall building - East entrance.] Economic Opportunity Overlay District (EOOD). The EOOD is the City's primary attractor for new commercial interests. The EOOD addresses community goals raised in the Visioning Initiative. The district leverages opportunities for economic development resulting from our proximity to Port Canaveral by attracting services desired by the citizens/visitors. It facilitates mixed-use & town center type development. The EOOD includes increased design standards for architecturally significant buildings, a mechanism for increased building heights, revised hotel requirements and increased landscaping requirements. The EOOD includes properties adjacent to Port Canaveral and certain residential properties adjacent to the Banana River. This makes waterfront destinations possible—another goal of the Visioning Initiative. - 12- The Honorable Mayor,et al Special Exception Process. With the adoption of Ordinance No. 02-2016, the City Council fundamentally retooled the City's special exception process. In an effort to remain competitive and transform how the City does business, this effort largely replaced the current special exception process with one that is more predictable and streamlined. Many uses that were processed as a special exception are now considered permitted uses in the various zoning districts. To ensure compatibility with adjacent uses, the ordinance also created use-specific development standards that the newly-created permitted uses will have to meet. Certain uses will continue to be considered through the special exception process. Due to their nature, these uses require a heightened level of public scrutiny and involvement. These include pain management clinics, medical marijuana treatment centers, establishments that serve alcoholic beverages on-site (bars) and automotive service stations. Leisure Services Enhancements. The Banana River Park Phase I Project began in September 2015 and was completed in May of 2016. This Phase consisted of a restroom/pavilion, south parking lot, sidewalk extensions, landscaping and water side amenities. Phase II of construction followed in FY15/16 and consisted of a north parking lot expansion/paving, synthetic putting green and kayak dock. Finally, Phase III commenced in August of 2016 and was completed in December of 2016. This phase consisted of two synthetic bocce ball courts, shade shelter and shade canopy for existing playground. The little league field's east dugout at Canaveral City Park was demolished and construction of a new dugout commenced in September of 2016. Construction is due to be completed in March of 2017. The five tennis courts of the Nancy Hanson Recreation complex were resurfaced. The process involved repairing cracks, leveling surface, installing a fiberglass membrane over courts and applying a two-step surfacing product over the courts. The exterior of the racquetball courts and Nancy Hanson Recreation Complex were painted, completing capital preventative maintenance projects to the facility. Community Engagement. The first community garden was created in 2016 with funds donated by Council Member Brendan McMillin and with grant funds from the National Recreation and Parks Association (NRPA). The community garden is located inside Patriots Park between Long Point Rd and Columbia Rd. The community garden project was an idea submitted by residents and City Council members. Staff from Community Engagement, Building Department and Public Works Services worked together to permit, design and build the garden. Gardeners of all ages and experience levels were invited to plant their boxes in a lottery drawn in September 2016. Gardeners/boxes will be rotated with a new lottery of interested residents biannually. Staff from Community Engagement, Building Department and Public Works Services installed two (2) electric vehicle chargers at the Canaveral Public Library in September 2016. These two (2) designated chargers are the City of Cape Canaveral's first free to the public charging stations. The electric vehicle chargers were researched and purchased as an initiative in line with the Cape Canaveral Vision Statement and upcoming Sustainability Plan. The designated chargers were installed at the Canaveral Public Library because of the proximity to City Hall, the Nancy Hanson Recreation Complex, future City Hall Plaza and public beach access. - 13 - The Honorable Mayor,et al LONG TERM FINANCIAL PLANNING It has been policy to plan financially towards future Capital Projects. With this is mind, annually the City adopts a Five Year Capital Improvement Plan to provide funding for acquisition of necessary Fire Rescue Capital Equipment and Vehicles, Public Safety, new parks and construction of a new City Hall. Although these reserves are not restricted in the legal sense, the intent is to continue to increase these funds with the goal of reducing future financial needs. The City's Wastewater and Stormwater enterprise funds have long term debt of $4,107,608. The City has already secured two new State Revolving Fund Loans for Wastewater Treatment & Reuse Facilities/Stormwater Management Facilities at a low 1.68% interest rate. The FY 16-17 Budget encompasses $3,250,000 in Wastewater/Stormwater Projects to be funded by SRF Loans with repayment beginning June 15, 2018, with semi-annual Loan Payments of $173,207. AWARDS AND ACKNOWLEDGMENTS The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Cape Canaveral for its Comprehensive Annual Financial Report for the Fiscal Year ended September 30, 2015. This was the 21st consecutive year that the City has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized Comprehensive Annual Financial Report. This Report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year. We believe the current Comprehensive Annual Financial Report continues to meet the Certificate of Achievement Program requirements. It will be submitted to the GFOA to determine eligibility for another Certificate. The culmination of this document is attributable to numerous facets of this organization. Special recognition is credited to the Financial Services Staff for their dedication to accurate and thorough financial reporting and accountability. Our appreciation is extended to the City Council for its dedication to proactive fiscal policies. Thanks are also extended to the City's independent auditing firm of James Moore & Co., P.L., for their assistance with compiling the City's Comprehensive Annual Financial Report. Respectfully submitted, [John DeLeo signature] [David L. Greene signature] John DeLeo David L. Greene Administrative/Financial Services Director City Manager - 14- Organizational Chart - 15 - THIS PAGE INTENTIONALLY LEFT BLANK. - 16 - City of Cape Canaveral Organizational Chart - 17 - THIS PAGE INTENTIONALLY LEFT BLANK. - 18 - [GFOA logo] Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Cape Canaveral Florida For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2015 [signature] Executive Director/CEO - 19 - THIS PAGE INTENTIONALLY LEFT BLANK. - 20 - Financial Section - 21 - THIS PAGE INTENTIONALLY LEFT BLANK. - 22 - Independent Auditors' Report - 23 - THIS PAGE INTENTIONALLY LEFT BLANK. - 24 - [logo] JamesMoore Certified Public Accountants and Consultants INDEPENDENT AUDITORS' REPORT To the Honorable Mayor, City Council, and City Manager, City of Cape Canaveral,Florida: Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Cape Canaveral, Florida (the City), as of and for the year ended September 30, 2016, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements The City's management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements,whether due to fraud or error. In making those risk assessments,the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective fmancial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of September 30, 2016, and the respective changes in financial position and where applicable, cash flows and the respective budgetary comparisons for the General and Cape Canaveral CRA funds for the year then ended in accordance with accounting principles generally accepted in the United States of America. -25 - 121 Executive Circle 5931 NW 1st Place 2477 Tim Gamble Place,Suite 200 Daytona Beach, FL 32114-1180 Gainesville, FL 32607-2063 Tallahassee, FL 32308-4386 Telephone:386-257-4100 Telephone:352-378-1331 Telephone:850-386-6184 Fax: 386-1255-3261 Fax:352-372-3741 Fax: 850-422-2074 dab@ijmo.com gnv@jmco.com tlh@jmeo.com Member of AGN International with offices in principal cities worldwide Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, budgetary comparison information, and required supplementary information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's financial statements as a whole. The introductory section, combining and individual nonmajor fund financial statements, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The accompanying schedule of expenditures of federal awards and state financial assistance as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), and Section 215.97, Florida States, Florida Single Audit Act, is presented for purposes of additional analysis and is not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedule of expenditures of federal awards and state fmancial assistance are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and schedule of expenditures of federal awards and state financial assistance are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 8, 2017, on our consideration of the City's internal control over fmancial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. [James Moore & Co., P.L. signature] Daytona Beach,Florida February 8, 2017 -26- Management's Discussion and Analysis - 27 - THIS PAGE INTENTIONALLY LEFT BLANK. - 28 - City of Cape Canaveral,Florida Management's Discussion and Analysis As management of the City of Cape Canaveral, we provide readers of the City's financial statements this overview and analysis of the City's financial activities for the fiscal year ended September 30, 2016. Readers are encouraged to consider the information presented in conjunction with additional information furnished in the letter of transmittal,which can be found on pages 7-14 of this report. Financial Highlights • The assets of the City exceeded its liabilities at the close of the most recent year by $46.1 million (net position). Of this amount, $9 million (unrestricted net position) may be used to meet the City's ongoing obligations. • The City's total net position increased by $4.98 million. This is the result of construction projects completed during the year and the addition of capital assets, funded primarily through capital contributions and grants. • At the close of the fiscal year, the City's governmental funds reported combined ending fund balances of $7.63 million, a decrease of $2.1 million in comparison with the prior year. • At the close of the fiscal year, fund balance for the General Fund was $7,004,754. Of this amount $96,734 relates to inventory and prepaids as well as long term advances and is therefore nonspendable. The remaining fund balance includes: restricted ($447,214), committed ($2,479,667) and unassigned ($3,981,139) balances. Within the committed fund balance category,the largest piece is $2,098,515 committed for the construction of a New City Hall. Unassigned funds are available to fund on-going activities of the City's various General Fund services and programs. • The City's total long-term liabilities increased $1.49 million. This was due primarily to receipt of additional State Revolving Fund monies for various wastewater and stormwater projects, offset by annual debt service payments on the Capital Improvement Revenue Note. Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to the City's financial statements. The City's basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City's finances, in a manner similar to a private-sector business. The Statement of Net Position presents information on all of the City's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the fmancial position of the City is improving or deteriorating. The Statement of Activities presents information showing how the City's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus,revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods. (e.g., uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, -29- City of Cape Canaveral, Florida Management's Discussion and Analysis infrastructure maintenance, sanitation, economic development, culture and recreation. The business-type activities of the City include Wastewater and Stormwater operations. The government-wide financial statements can be found on pages 42-43 of this report. Fund financial statements. A fund is a grouping of related accounts used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into two categories: governmental funds and proprietary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements.However,unlike the government- wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the City's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains nine individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances for the General Fund, Cape Canaveral Community Redevelopment Agency Fund, Capital Construction Fund and Enterprise Capital Fund, all of which are considered to be major funds. Financial data from the other five governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements presented in the supplementary information section of this report. The City adopts an annual appropriated budget for its governmental funds. Budgetary comparison statements for the major and non-major funds have been provided to demonstrate compliance with the budget in this report. The basic governmental fund fmancial statements can be found on pages 44—49 of this report. Proprietary funds. The City maintains two proprietary ("Enterprise") funds.Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its Wastewater and Stormwater operations. The statements for the proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Wastewater and Stormwater operations,which are considered to be major funds of the City. The basic proprietary fund fmancial statements can be found on pages 50- 52 of this report. - 30 - City of Cape Canaveral,Florida Management's Discussion and Analysis Other information. In addition to the basic financial statements and accompanying notes,this report also presents certain required supplementary information concerning the funding of Other Post-Employment Benefits. Required supplementary information and the related footnotes can be found on page 76 of this report. The combining statements referred to earlier in connection with non-major governmental funds are presented immediately following the required supplementary information. Combining and individual fund statements can be found on pages 80—84 of this report. Government-wide Financial Analysis As stated earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the City of Cape Canaveral, assets exceeded liabilities by $46.1 million at the close of the 2016 fiscal year. By far the largest portion of the City's net position, $35.2 million (76.4%) reflects its investment in capital assets (e.g.,land,buildings,machinery and equipment); less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. City of Cape Canaveral, Florida Statement of Net Position Governmental Activities Business-type Activities Total 2016 2015 2016 2015 2016 2015 Current and other assets $ 9,017,973 $ 10,858,484 $ 3,761,603 $ 3,014,558 $ 12,779,576 $ 13,873,042 Capital As sets (Net) 22,475,928 18,324,999 21,360,095 17,943,665 43,836,023 36,268,664 Total Assets 31,493,901 29,183,483 25,121,698 20,958,223 56,615,599 50,141,706 Current and other liabilitic 2,072,900 1,760,838 241,184 545,609 2,314,084 2,306,447 Long-term Liabilities 4,036,361 4,553,380 4,146,099 2,143,668 8,182,460 6,697,048 Total Liabilities 6,109,261 6,314,218 4,387,283 2,689,277 10,496,544 9,003,495 Net Position: Net Investment in Capital As sets 17,995,928 13,333,909 17,252,487 15,697,879 35,248,415 29,031,788 Restricted 1,538,482 1,691,174 327,160 175,579 1,865,642 1,866,753 Unrestricted 5,850,230 7,844,092 3,154,768 2,395,488 9,004,998 10,239,580 Total Net Position $ 25,384,640 $ 22,869,175 $ 20,734,415 $ 18,268,946 $ 46,119,055 $ 41,138,121 - 31 - City of Cape Canaveral,Florida Management's Discussion and Analysis A portion of the City's net position, $1,865,642, or 4% of total net position, represents resources that are subject to external restriction on how they may be used. The balance of unrestricted net position totaling $9,004,998 may be used to meet the City's ongoing obligations to citizens and creditors and to provide funding for various projects. At September 30, 2016, the City is able to report positive balances in all three categories of net position, both for the City as a whole and for its separate governmental and business-type activities. The same situation held true for the prior fiscal year. The City experienced an overall increase in net position for Governmental activities of$2,515,465. The increase for business-type activities was$2,465,469. City of Cape Canaveral,Florida Changes in Net Position Governmental Activities Business-type Activities Total 2016 2015 2016 2015 2016 2015 REVENUES Program Revenues: Charges for Services $ 1,666,860 $ 1,763,130 $ 4,681,839 $ 4,313,504 $ 6,348,699 $ 6,076,634 Operating Grants and Contribution: 333,666 303,353 - - 333,666 303,353 Capital Grants and Contributions 2,442,355 13,886 1,558,083 - 4,000,438 13,886 General Revenues: Property Taxes 3,349,568 3,280,632 - - 3,349,568 3,280,632 Utility and Franchise Taxes 2,454,174 2,385,223 - - 2,454,174 2,385,223 Intergovernmental 994,390 940,785 - - 994,390 940,785 Investment Income 77,593 80,687 16,769 26,314 94,362 107,001 Miscellaneous 34,642 70,668 4,770 4,688 39,412 75,356 Total Revenues 11,353,248 8,838,364 6,261,461 4,344,506 17,614,709 13,182,870 EXPENSES General Government 1,610,813 1,506,243 - - 1,610,813 1,506,243 Public Safety 4,806,887 4,533,243 - - 4,806,887 4,533,243 Transportation 968,272 982,291 - - 968,272 982,291 Physical Environment 1,059,367 1,039,747 - - 1,059,367 1,039,747 Culture/Recreation 640,356 570,491 - - 640,356 570,491 Interest on long-term debt 94,236 104,385 - - 94,236 104,385 Wastewater - - 2,916,035 2,873,515 2,916,035 2,873,515 Stormwater - - 537,809 526,065 537,809 526,065 Total Expenses 9,179,931 8,736,400 3,453,844 3,399,580 12,633,775 12,135,980 Excess (Deficiency) Before Transfers 2,173,317 03,964 2,807,617 944,926 4,980,934 1,046,890 Transfers 342,148 329,400 (342,148) (329,400) - - Change in Net Position 2,515,465 433,364 2,465,469 615,526 4,980,934 1,046,890 Net Position-Beginning 22,869,175 22,435,811 18,268,946 17,653,420 41,138,121 40,089,231 Net Position-Ending $ 25,384,640 $22,869,175 $ 20,734,415 $ 18,268,946 $ 46,119,055 $ 41,136,121 - 32 - City of Cape Canaveral, Florida Management's Discussion and Analysis Statement of Activities Governmental activities: The Changes in Net Position Table on page 31 reflects a governmental revenue increase of $2,514,884, an increase of 28.45% from the previous fiscal year. This increase reflects both program and general revenues. Governmental program revenues increased $2,362,512, a 113.56% increase from 2015. This increase is primarily the result of an increase in Capital Grants and Contributions of$2,428,469 offset by a decrease of$96,270 in Charges for Services. [Pie chart of Revenues by Source-Governmental Activities (does not include transfers) The remaining change relates to general revenues and changes in governmental expenses. Significant factors include the following: • Property taxes increased $68,936 from 2015. However, by the end of Calendar Year 2015 property values increased by 8.4%. • Utility and Franchise Tax revenues increased $68,951 over the prior year. This increase of 3% was the result of increased consumption of both electricity and gas. • Intergovernmental income increased $53,605 over the revenue for 2015. This increase related to revenues received from the county for the Community Redevelopment Agency increase in valuation and various State revenue sharing entities. • Expenses for governmental activities increased slightly, showing a 5.1% increase over 2015 amounts. The most significant increases related to increases in Public Safety of$273,644, Culture and Recreation increased $68,865, and General Government $104,570. These increases were offset by a decrease in Transportation ($14,019) and Interest ($10,149). The increase in General Government includes payment of increased Legal Service fees and additional employee benefits; while the Public Safety increase resulted from increased contract costs; and the increase in Culture and Recreation was primarily caused by the completion of Phase I of the Banana River Park Project. - 33 - City of Cape Canaveral, Florida Management's Discussion and Analysis [Bar Graph of Expenses and Program Revenues -Governmental Activities] Business-type activities Business-type activities experienced an increase in net position of$2,465,469,or 13.5%. • The major source of revenue for business-type activities is charges for services, which increased$368,335 (8.5%). This was the result of a Wastewater rate increase and a Reclaimed Water rate increase and impact fees for the new hotel totaling $362,195 during 2016. • Capital grants accounted for approximately$1.56 million of the increase. • Investment income decreased by $9,545 (36.3%). Most of this revenue decrease related to smaller cash balances on hand due to construction during 2016. • Expenses for both Wastewater and Stormwater operations remained fairly constant during 2016. The increase for all Business-type activities was only$54,729 or 1.6%. [Bar Graph of Expenses & Program Revenues - Business-type Activities] - 34- City of Cape Canaveral,Florida Management's Discussion and Analysis [Pie Chart of Revenues by Source - Business-type Activities] Financial Analysis of the Government's Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. Governmental funds. The focus of the City's reporting of governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, unassigned fund balance may serve as a useful measure of the City's net resources available for spending at the end of the fiscal year. The City is strategically using its resources more effectively through the recent Economic Development restructuring which increased focus and provided leverage for the success on the City's future. As of the end of the current fiscal year, the total fund balance of the City's governmental funds was $7,631,744, a decrease of$2,149,260,or 22%from the prior fiscal year. The General Fund,the City's main governmental fund,experienced an overall decrease in fund balance of $1,622,048 or 18.8%. The most significant reason for this decrease can be contributed to a transfer to the Capital Construction Fund of$1,658,059 for the construction City Hall. [Bar Graph of General Fund Current Expenditures by Function] -35 - City of Cape Canaveral,Florida Management's Discussion and Analysis The General Fund is the City's chief operating fund. At the end of the current fiscal year, total fund balance was $7,004,754. Of this amount $96,734 relates to inventory and prepaids as well as long term advances and is therefore nonspendable. The remaining fund balance includes restricted ($447,214), committed ($2,479,667), and unassigned ($3,981,139). Within the committed fund balance category, the largest piece is $2,098,515 for the construction of the new City Hall. The unassigned fund balance represents 39.23%of the total general fund expenditures. The total fund balance represents 69.02%of the total general fund expenditures. Unassigned funds are available to fund on-going activities of the City's various services and programs. The City maintains three additional major governmental funds. The Cape Canaveral CRA Fund reflects a negative fund balance of($466,535) at September 30, 2016. This is a significant decline over the $21,363 positive fund balance as of September 30, 2015. This negative fund balance is the result of $474,929 transferred to the Wastewater Fund for the portion of a wastewater capital project within the CRA district. The Enterprise Capital Fund has zero fund balance at September 30, 2016. Capital expenditures in this fund are related to major Wastewater/Stormwater Projects. The Capital Construction Fund has restricted fund balance of $710,407 at September 30, 2016. This fund is used for the acquisition of land and construction of major capital facilities for governmental funds. Nonmajor Special Revenue funds maintained fund balances at the end of the fiscal year of: • Police Education Fund $19,553 • Fire Protection Fund $7,256 • School Crossing Guard $2,257 • Library Fund $347,432 • Special Law Enforcement Trust $6,620 All fund balances of the Non-major governmental funds are restricted by an outside party as to use, except the School Crossing Guard Fund which is committed for public safety. Proprietary funds. The City's proprietary funds provide the same type of information found in the government-wide financial statements,but in more detail. Unrestricted net position of the Wastewater Utility Fund at the end of the year amounted to $1,414,816, and the Stormwater Utility amounted to $1,739,952. The total increase in net position for the Wastewater Utility Fund was $1,557,933, and the increase for the Stormwater Utility was $907,536. The fund level proprietary statements reflect capital contributions of $4,477,481. These are capital outlay expenditures in the Enterprise Capital Fund for construction in progress, equipment, and other capital improvements that were contributed to the Wastewater Fund ($3,497,674) and Stormwater Fund ($979,807). At the entity wide level, these amounts are reflected as transfers in. Other factors concerning the finances of these two funds have already been addressed in the discussion of the City's business-type activities. General Fund Budgetary Highlights At the end of FY16, as of result of amendments made during the year, the final amended budget decreased $1,307,442 from the adopted budget. The most significant change was related to a decrease in general government ($478,539), public safety ($335,473), transportation ($76,933), culture/recreation ($13,619) and capital outlay ($411,244),offset by an increase of $8,367 for physical environment. - 36 - City of Cape Canaveral,Florida Management's Discussion and Analysis [Line Graph of General Fund Actual vs Budgets] During the year, actual revenues on a budgetary basis were $9,335,812. This was equal to the final budgetary estimate of$9,335,812.All final budgeted expenditures also equaled budgeted amounts. Capital Asset and Debt Administration Capital assets.The City's investment in capital assets for its governmental and business-type activities as of September 30, 2016, amounts to $43,836,023, net of accumulated depreciation. This investment in capital assets includes land, buildings and system improvements, machinery and equipment, park facilities, roads and construction work in progress. The City's investment in capital assets increased $7,567,449. An increase of$4,151,019 (23%) in governmental activities and an increase of$3,416,430 (19%)for business-type activities make up the total. Significant capital asset events during the current fiscal year included the following: • Florida Department of Transportation (FDOT) funded portion of the North Atlantic Avenue Streetscape Project was completed in December 2016. Grant funds in the amount of $1.9 million were received through the Space Coast Transportation Planning Organization (SCTPO) from FDOT and $860,000 in funding was received from Brevard County Transportation Impact Fees. The Project included construction of a new pedway and sidewalks, lighting and stormwater improvements, landscaping improvements and numerous decorative features. Additional improvements and beautification tasks will be completed in 2017. • Lift Stations No. 6 (Imperial Drive) and No. 7 (West Central Boulevard) were replaced and enlarged in anticipation of continued development in the northern portion of the City. Lift Station No. 7 was relocated to City-owned property in Manatee Sanctuary Park for easier access to conduct maintenance activities. Emergency generators were also installed at each of the lift stations. Project completion was in December 2016. - 37- City of Cape Canaveral,Florida Management's Discussion and Analysis • Phase I of the Holman Road Sanitary Sewer Improvements Project was completed to alleviate sewer back-up in a residence along Holman Road and to increase sewer capacity. The sanitary sewer line located beneath Holman Road was replaced with a 10-inch diameter pipe. The Work was the first phase of a three-phased Project to replace the entire sanitary sewer line to Lift Station No. 2 located along Center Street. Construction of Phase I was completed in May 2016. • Major construction was completed on the Canaveral City Park Ex-filtration Project including the construction/installation of exfiltration piping beneath Canaveral City Park. The piping will allow for exfiltration of stormwater from area streets into the surficial aquifer. This Project will eliminate a substantial amount of stormwater discharged to the BRL. Major construction was completed in December 2016; ancillary construction will be completed in January 2017. • The City maintained an active stormwater system maintenance program in 2016. Activities included the replacement of older style stormwater inlets with new Type "C" inlets. These newer inlets require less maintenance, are not damaged as easily by vehicular traffic, prohibit larger debris from entering the storm water system and provide improved stormwater flow. Street sweeping of all curbed streets also continues on a monthly basis. Additional information on the City's capital assets can be found on page 65 - 66 of this report. City of Cape Canaveral's Capital Assets (net of depreciation) Governmental Activities Business-type Activities Total 2016 2015 2016 2015 2016 2015 Land $ 7,248,237 $ 7,248,237 $ 351,084 $ 351,084 $ 7,599,321 $ 7,599,321 Buildings and Improvements 4,749,885 4,751,031 5,290,934 5,215,495 10,040,819 9,966,526 Machinery and Equipment 3,417,620 3,015,508 6,184,510 1,925,611 9,602,130 4,941,119 Infrastructure 7,190,393 7,061,579 24,271,878 22,774,057 31,462,271 29,835,636 Construction in Progress 5,176,002 964,267 1,798,644 3,132,555 6,974,646 4,096,822 27,782,137 23,040,622 37,897,050 33,398,802 65,679,187 56,439,424 Less:Accumulated Depreciatior (5,306,209) (4,715,713) (16,536,955) (15,455,137) (21,843,164) (20,170,850) Capital Assets,net $ 22,475,928 $ 18,324,909 $ 21,360,095 $ 17,943,665 $ 43,836,023 $ 36,268,574 Long-term debt. At the end of the current fiscal year, the City had a total long-term debt outstanding of $8,587,608. The business-type activities long term debt is from a State Revolving Loan related to Wastewater System improvements constructed in 1995. Note that compensated absences and the liability for other post- employment benefits are also included in long term liabilities of the City. The governmental activities long term debt includes a $5.5 Capital Improvement Revenue Note issued to finance a City Hall projecting progress, and both completed Fire Station and Main Wastewater Treatment Plant Building Refurbishment. Additional information on the City of Cape Canaveral's long-term debt can be found on pages 66 - 68 of this report. - 38 - City of Cape Canaveral,Florida Management's Discussion and Analysis City of Cape Canaveral's Outstanding Debt General Obligation Governmental Activities Business-type Activities Total 2016 2015 2016 2015 2016 2015 Revenue Note $ 4,480,000 $ 4,991,000 $ - $ - $ 4,480,000 $ 4,991,000 State revolving loans - - 4,107,608 2,245,786 4,107,608 2,245,786 $ 4,480,000 $ 4,991,000 $ 4,107,608 $ 2,245,786 $ 8,587,608 $ 7,236,786 Economic Factors and Next Year's Budgets and Rates • The unemployment rate decreased from 5.4%in the prior year to 4.6%. • The real estate market continues to trend upward. Property values for Calendar Year 2016 showed an increase of 11.4%. The median home sales price rose to $175,600 up from $155,420 at the end of 2015. • Due to accelerated hiring, Cape Canaveral, as well as Brevard County, will continue to show improvement due to increased industry growth at the Kennedy Space Center and Canaveral Air Force Station; increased Aerospace and High Technological Manufacturing Companies such as Blue Origin, Space X, Embraer S.A. and Northrup Grumman's expansion at the Melbourne International Airport; and numerous service-oriented companies countywide. • In an effort to take advantage of the opportunities provided by the City's proximity to Port Canaveral, Cape Canaveral Air Force Station, Kennedy Space Center, two International Airports, and Orlando, the City is actively pursuing economic development/redevelopment through its creation of the Community Redevelopment Agency(CRA). • The City has and will continue to increase its revenue stream. An increase to the wastewater and reclaimed water rates in October 2015 enhanced revenue. The City maintained Ad valorem taxes at fiscal 2015 rates in the 2016 budget by implementing a millage rate that was lower than the previous year. All of these factors were considered in preparing the City's budget for the 2017 fiscal year. Requests for Information This financial report is designed to provide a general overview of the City of Cape Canaveral's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Office of the Administrative/Financial Services Director, 105 Polk Avenue, Cape Canaveral,FL 32920. - 39 - THIS PAGE INTENTIONALLY LEFT BLANK - 40 - Basic Financial Statements - 41 - CITY OF CAPE CANAVERAL,FLORIDA STATEMENT OF NET POSITION SEPTEMBER 30,2016 Primary Government Governmental Business-Type Activities Activities Total Assets Equity in pooled cash and investments $ 8,240,658 $ 1,229,475 $ 9,470,133 Receivables, net 317,504 - 317,504 Due from other governments 839,985 1,744,567 2,584,552 Interfund balances (420,785) 420,785 - Inventories and prepaid items 15,012 439 15,451 Restricted assets: Equity in pooled cash and investments 25,599 366,337 391,936 Capital assets: Total capital assets,not being depreciated 12,424,239 2,149,728 14,573,967 Total capital assets,being depreciated,net of accumulated depreciation 10,051,689 19,210,367 29,262,056 Total Assets $ 31,493,901 $ 25,121,698 $ 56,615,599 Liabilities Accounts payable and accrued liabilities $ 1,298,003 $ 136,274 $ 1,434,277 Unearned revenue and deposits 62,627 - 62,627 Payable from restricted assets: Accrued interest payable - 39,177 39,177 Zoning escrow 25,599 - 25,599 Noncurrent liabilities: Due within one year: Long-term debt 521,000 - 521,000 Compensated absences payable 165,671 65,733 231,404 Due in more than one year: Long-term debt 3,959,000 4,107,608 8,066,608 Compensated absences payable 41,418 16,434 57,852 Net OPEB obligation 35,943 22,057 58,000 Total Liabilities $ 6,109,261 $ 4,387,283 $ 10,496,544 Net Position Net investment in capital assets $ 17,995,928 $ 17,252,487 $ 35,248,415 Restricted for: Recycled products 50,562 - 50,562 Tree mitigation 132,607 - 132,607 Debt service 264,045 - 264,045 Public safety 33,429 - 33,429 Culture/recreation 347,432 - 347,432 Capital expansion 710,407 327,160 1,037,567 Unrestricted 5,850,230 3,154,768 9,004,998 Total Net Position $ 25,384,640 $ 20,734,415 $ 46,119,055 The accompanying notes to financial statements are an integral part of this statement. -42- CITY OF CAPE CANAVERAL, FLORIDA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2016 Net (Expense) Revenue and Program Revenues Changes in Net Position Primary Government Operating Capital Charges for Grants and Grants and Governmental Business-type Expenses Services Contributions Contributions Activities Activities Total Functions/Programs Governmental activities General government $ 1,610,813 $ 49,413 $ - $ - $ (1,561,400) $ - $ (1,561,400) Public safety 4,806,887 471,722 - - (4,335,165) - (4,335,165) Transportation 968,272 - 333,666 2,251,683 1,617,077 - 1,617,077 Physical environment 1,059,367 1,058,515 - - (852) - (852) Culture/recreation 640,356 87,210 - 190,672 (362,474) - (362,474) Interest on long-term debt 94,236 - - - (94,236) - (94,236) Total governmental activities 9,179,931 1,666,860 333,666 2,442,355 (4,737,050) - (4,737,050) Business-type activities Wastewater 2,916,035 4,099,508 - 687,079 - 1,870,552 1,870,552 Stormwater 537,809 582,331 - 871,004 - 915,526 915,526 Total business-type activities 3,453,844 4,681,839 - 1,558,083 - 2,786,078 2,786,078 Total primary government $ 12,633,775 $ 6,348,699 $ 333,666 $ 4,000,438 (4,737,050) 2,786,078 (1,950,972) General revenues Property taxes 3,349,568 - 3,349,568 Utility and franchise taxes 2,454,174 - 2,454,174 Intergovernmental revenues,unrestricted 994,390 - 994,390 Investment income 77,593 16,769 94,362 Miscellaneous revenues 34,642 4,770 39,412 Transfers 342,148 (342,148) - Total general revenues and transfers 7,252,515 (320,609) 6,931,906 Change in net position 2,515,465 2,465,469 4,980,934 Net position,beginning of year 22,869,175 18,268,946 41,138,121 Net position,end of year $ 25,384,640 $20,734,415 $46,119,055 The accompanying notes to financial statements are an integral part of this statement. -43- N tin N N O flC NN ,O NN NNv) C NN NV 00NN V V v1 O 00 N 00 O Q\ N O M N O ).O V N M O Ok ,-. 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Governmental capital assets 27,782,137 Accumulated depreciation (5,306,209) 22,475,928 Long-term liabilities are not due and payable in the current period, and therefore, are not reported in the funds.All liabilities, both current and non-current,are reported in the statement of net position. Long term liabilities at year end consist of: Long-term debt (4,480,000) Compensated absences payable (207,089) Net OPEB obligation (35,943) (4,723,032) Net Position of Governmental Activities $ 25,384,640 The accompanying notes to financial statements are an integral part of this statement. - 45 - 171 00 C N C1 C1 00 O Cr,M ,--i W V W N N V O,..0 N Ql O Vl D Cr, O V V O O M V N D Q\ W Q\ O N V M O N O M N Q, -N V M ,D O V C' Vl VD V N N WI,D CN'/1 M M N V --i M N VD O N M Ql --i O V N N O N d Z Cr,-M Vl ,--1-06 V Qr ,.O N vD V 00 N V Qr Q1 M --i V N N V Qr Ql M• Q1 —1r ,-ti y V M W CO N '/1 N 00 V '/1 N M --i Q1 (;-1) N N'/1 N V 00 M O G 7 M M M Q1 N—1 '/1 N '/1 N O Vl Q\ VlQ\ Cr) --i 00 N D F d W M N N oo v: ,o N v• N Qi N 0 C7 QS QS Tel Q, ' 00 VD M v O N v v vi vi o0 0o m 00 7-1 s. 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E . s. s.a en E W a .L3 A ) > u c°3 4[4 U ,V,;, 4c1 31 6 u o s, u ^O ^O a iE lUs 4 kU C.)o wP`.AFF Q 0 0 w W W C 4 W w CITY OF CAPE CANAVERAL,FLORIDA RECONCILIATION OF THE STATEMENT OF REVENUES,EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30,2016 Net Change in Fund Balances - Total Governmental Funds $ (2,149,260) Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However,in the statement of activities,the cost of these assets is depreciated over their estimated useful lives Expenditures for capital assets 8,933,674 Contributed capital assets 348,747 Less: Current year depreciation (638,448) 8,643,973 Property and equipment contributed from the Enterprise Capital fund to the Enterprise funds (4,477,481) Governmental funds only report the disposal of fixed assets to the extent proceeds are received from the sale. In the statement of activities, a gain or loss is recorded for each disposal. (15,473) Note and loan proceeds are reported as financing sources in the governmental funds. However,the issuance of debt is reported as long-term debt payable in the statement of net position. Repayment of note and loan principal is an expenditure in the governmental funds,but the repayment of debt reduces the long-term liabilities in the statement of net position and consist of the following: Principal repayment of general long-term debt 511,000 Some expenses reported in the statement of activities do not require the use of current financial resources and,therefore,are not reported as expenditures in governmental funds. Compensated absences payable 8,359 Net OPEB obligation (5,653) 2,706 Change in Net Position of Governmental Activities $ 2,515,465 The accompanying notes to financial statements are an integral part of this statement. - 47 - CITY OF CAPE CANAVERAL, FLORIDA STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGET TO ACTUAL GENERAL FUND FOR THE YEAR ENDED SEPTEMBER 30,2016 Budgeted Amounts Variance Positive Original Final Actual (Negative) Revenues Taxes: Property $ 3,292,961 $ 3,289,539 $ 3,289,539 $ - Local option motor fuel 319,451 333,666 333,666 - Utility and franchise 2,424,600 2,385,437 2,385,437 - Intergovernmental 1,216,211 1,210,751 1,210,751 - Licenses and permits 220,952 218,773 218,773 - Charges for services 1,175,577 1,184,568 1,184,568 - Fines and forfeitures 76,600 28,012 28,012 - Impact fees 62,434 534,633 534,633 - Investment earnings 63,096 66,256 66,256 - Miscellaneous 97,640 84,177 84,177 - Total revenues 8,949,522 9,335,812 9,335,812 - Expenditures Current: General government 2,157,774 1,679,235 1,679,235 - Public safety 4,879,423 4,543,950 4,543,950 - Transportation 791,041 714,108 714,108 - Physical environment 1,051,000 1,059,367 1,059,367 - Culture/recreation 489,578 475,959 475,959 - Capital outlay 1,482,833 1,071,589 1,071,589 - Debt service: Principal 511,000 511,000 511,000 - Interest 94,237 94,236 94,236 - Total expenditures 11,456,886 10,149,444 10,149,444 - Excess(deficiency) of revenues over expenditures (2,507,364) (813,632) (813,632) - Other financing sources Proceeds from sale of assets 56,000 4,110 4,110 - Transfers in 854,845 845,533 845,533 - Transfers out (2,300,000) (1,658,059) (1,658,059) - Total other financing sources (1,389,155) (808,416) (808,416) - Net change in fund balances (3,896,519) (1,622,048) (1,622,048) - Fund balances,beginning of year 8,626,802 8,626,802 8,626,802 - Fund balances,end of year $ 4,730,283 $ 7,004,754 $ 7,004,754 $ - The accompanying notes to financial statements are an integral part of this statement. -48 - CITY OF CAPE CANAVERAL, FLORIDA STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGET TO ACTUAL CAPE CANAVERAL COMMUNITY REDEVELOPMENT AGENCY FUND FOR THE YEAR ENDED SEPTEMBER 30,2016 Budgeted Amounts Variance Positive Original Final Actual (Negative) Revenues Intergovernmental $ 261,562 $ 273,356 $273,356 $ - Investment earnings 501 - - - Total revenues 262,063 273,356 273,356 - Expenditures Current: General government 58,607 6,709 6,709 - Capital outlay 140,000 279,616 279,616 - Total expenditures 198,607 286,325 286,325 - Excess(deficiency)of revenues over expenditures 63,456 (12,969) (12,969) - Other financing sources Transfers out (63,456) (54,144) (474,929) (420,785) Total other financing sources (63,456) (54,144) (474,929) (420,785) Net change in fund balances - (67,113) (487,898) (420,785) Fund balances,beginning of year 21,363 21,363 21,363 - Fund balances,end of year $ 21,363 $(45,750) $(466,535) $(420,785) The accompanying notes to financial statements are an integral part of this statement. -49- CITY OF CAPE CANAVERAL, FLORIDA STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30, 2016 Business-type Activities-Enterprise Funds Wastewater Fund Stormwater Fund Total Assets Current assets: Equity in pooled cash and investments $1,152,507 $76,968 $1,229,475 Due from other governments 761,194 983,373 1,744,567 Due from other funds - 762,620 762,620 Advance to other funds 420,785 - 420,785 Inventories and prepaid items 408 31 439 Restricted assets: Equity in pooled cash and investments 355,106 11,231 366,337 Total current assets 2,690,000 1,834,223 4,524,223 Capital assets: Total capital assets,not being depreciated 983,954 1,165,774 2,149,728 Total capital assets,being depreciated,net of accumulated depreciation 17,399,724 1,810,643 19,210,367 Capital assets,net 18,383,678 2,976,417 21,360,095 Total Assets $21,073,678 $4,810,640 $25,884,318 Liabilities Current liabilities: Accounts payable and accrued liabilities $79,820 $56,454 $136,274 Due to other funds 762,620 - 762,620 Current portion of compensated absences 45,741 19,992 65,733 Liabilities payable from current restricted assets: Accrued interest payable 27,946 11,231 39,177 Total current liabilities 916,127 87,677 1,003,804 Noncurrent liabilities: Long-term portion of compensated absences 11,436 4,998 16,434 Long-term debt payable after one year 2,936,660 1,170,948 4,107,608 Net OPEB obligation 20,461 1,596 22,057 Total noncurrent liabilities 2,968,557 1,177,542 4,146,099 Total Liabilities $3,884,684 $1,265,219 $5,149,903 Net Position Net investment in capital assets $15,447,018 $1,805,469 $17,252,487 Restricted for: Capital expansion 327,160 - 327,160 Unrestricted 1,414,816 1,739,952 3,154,768 Total Net Position $17,188,994 $3,545,421 $20,734,415 The accompanying notes to financial statements are an integral part of this statement. -50- CITY OF CAPE CANAVERAL, FLORIDA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2016 Business-type Activities-Enterprise Funds Wastewater Fund Stormwater Fund Total Operating revenues Charges for sales and services: Wastewater charges $4,099,508 $ - $4,099,508 Stormwater charges - 582,331 582,331 Miscellaneous - 4,770 4,770 Total operating revenues 4,099,508 587,101 4,686,609 Operating expenses Operating and maintenance: Personal services 1,106,085 247,812 1,353,897 Contractual services 73,343 59,125 132,468 Repairs and maintenance 470,356 84,093 554,449 Materials and supplies 253,539 5,008 258,547 Other operating and maintenance - 200 200 Depreciation 991,275 130,122 1,121,397 Total operating expenses 2,894,598 526,360 3,420,958 Operating income 1,204,910 60,741 1,265,651 Nonoperating revenues(expenses) Capital grants 687,079 871,004 1,558,083 Investment earnings 9,962 6,807 16,769 Loss on sale or disposal of assets (4,715) (2,589) (7,304) Interest expense (16,722) (8,860) (25,582) Total nonoperating revenues(expenses) 675,604 866,362 1,541,966 Income before contributions and transfers 1,880,514 927,103 2,807,617 Capital contributions 3,497,674 979,807 4,477,481 Transfers in 473,108 - 473,108 Transfers out (4,293,363) (999,374) (5,292,737) Change in net position 1,557,933 907,536 2,465,469 Total net position,beginning of year 15,631,061 2,637,885 18,268,946 Total net position,end of year $17,188,994 $3,545,421 $20,734,415 The accompanying notes to financial statements are an integral part of this statement. -51- CITY OF CAPE CANAVERAL, FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2016 Business-type Activities-Enterprise Funds Wastewater Fund Stormwater Fund Total Cash flows from operating activities Cash received from customers $4,026,291 $583,086 $ 4,609,377 Cash paid to suppliers (1,008,868) (91,118) (1,099,986) Cash paid to employees (1,112,754) (251,076) (1,363,830) Net cash provided by operating activities 1,904,669 240,892 2,145,561 Cash flows from noncapital financing activities Interfund loans 341,835 (762,620) (420,785) Transfers in 473,108 - 473,108 Transfers out (4,293,363) (999,374) (5,292,737) Net cash used in noncapital financing activities (3,478,420) (1,761,994) (5,240,414) Cash flows from capital and related financing activities Principal payments on capital debt (212,648) - (212,648) Proceeds from issuance of capital debt 1,244,229 762,591 2,006,820 Capital grants 687,079 - 687,079 Interest paid (16,722) (8,860) (25,582) Net cash provided by capital and related financing activities 1,701,938 753,731 2,455,669 Cash flows from investing activities Interest received 9,962 6,807 16,769 Net increase(decrease)in cash and cash equivalents 138,149 (760,564) (622,415) Cash and cash equivalents,beginning of year 1,369,464 848,763 2,218,227 Cash and cash equivalents,end of year $1,507,613 $88,199 $1,595,812 Reconciliation of operating income to net cash provided by operating activities Operating income $1,204,910 $60,741 $1,265,651 Adjustment to reconcile operating income to net cash provided by operating activities: Depreciation 991,275 130,122 1,121,397 Decrease(increase)in certain assets: Accounts receivable (73,217) (4,015) (77,232) Prepaid expenses (408) (31) (439) Increase(decrease)in certain liabilities: Compensated absences payable (8,713) (3,567) (12,280) Accounts payable and accrued liabilities (222,764) 48,479 (174,285) Accrued interest payable 11,542 8,860 20,402 Net OPEB liability 2,044 303 2,347 Net cash provided by operating activities $1,904,669 $240,892 $2,145,561 Cash and cash equivalents classsified as: Unrestricted $1,152,507 $76,968 $1,229,475 Restricted 355,106 11,231 366,337 Total cash and cash equivalents $1,507,613 $88,199 $1,595,812 Noncash investing,capital and financing activities: Contributions of capital assets from capital funds $3,497,674 $979,807 $4,477,481 Capitalized interest added to capital debt balances $41,942 $ 25,708 $67,650 The accompanying notes to financial statements are an integral part of this statement. -52- Notes to Financial Statements - 53 - CITY OF CAPE CANAVERAL, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016 (1) Summary of Significant Accounting Policies: The City of Cape Canaveral,Florida,(the City)was created pursuant to Chapter 73-129, Laws of Florida, in 1963. The legislative branch of the City is composed of an elected Mayor and four Council Members. The City Council is governed by the City Charter and by state and local laws and regulations. The City Council is responsible for the establishment and adoption of policy. The execution of such policy is the responsibility of the Council-appointed City Manager. The financial statements of the City of Cape Canaveral,Florida,have been prepared in conformance with accounting principles generally accepted in the United States of America as applicable to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted body for promulgating governmental accounting and financial reporting principles. The following is a summary of the more significant policies. (a) Reporting entity—The accompanying financial statements present the financial position, results of operations and cash flows of the applicable fund types controlled by or dependent on the City. In evaluating the City as a reporting entity, management has addressed all potential component units for which the entity may or may not be financially accountable and, as such, be included within the City's financial statements. (b) Blended component unit A blended component unit, although legally separate, is, in substance, part of the City's operations. The following entities are blended with the primary government and reported as indicated and do not issue separate financial statements: The Cape Canaveral Free Public Library fund is responsible for exterior maintenance and risk management of the City-owned library. The members of the advisory board are appointed by the City Council and are tasked to act on the City's behalf. Funding for these specific purposes are derived by voter-approved ad valorem taxes and the legal liability remains with the City Council. Library operations are funded through the Brevard County Free Public Library District (the District), a separate taxing authority, and is therefore not included under the reporting entity defmition of the City's financial statements. The Cape Canaveral Community Redevelopment Agency (the Cape Canaveral CRA) was created by Ordinance No. 23-2013 to account for the receipt and expenditure of property tax revenues from the tax increment financing district to support City redevelopment in the designated community redevelopment area. Although legally separate, the City Council declared itself to be the Cape Canaveral CRA. Since the City is fmancially accountable for the activities of the Cape Canaveral CRA, its governing board is the same, and its relationship to the City is significant, its financial activities are reported on a blended basis as if it were part of the primary government as a major special revenue fund. (c) Government-wide and fund financial statements—The government-wide financial statements, comprised of the statement of position and the statement of activities,report aggregated information for the overall government for all of the activities of the primary government. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes, intergovernmental revenues, and other non- exchange revenues are reported separately from business-type activities, which rely, to a significant extent,on fees charged to external parties for goods or services for support. - 54- CITY OF CAPE CANAVERAL,FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30,2016 (1) Summary of Significant Accounting Policies: (Continued) The statement of activities demonstrates the degree to which the direct expenses of a given function or activity is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or activity.Program revenues include (1) charges to customers or applicants who purchase,use, or directly benefit from goods, services, or privileges provided by a given function or activity, and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or activity. Taxes and other non-exchange revenues not properly included among program revenues are reported as general revenues. Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported in separate columns in the fund financial statements. (d) Measurement focus, basis of accounting, and financial statement presentation—The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund fmancial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period except for grant revenues which are considered earned when expenditures are incurred. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments,are recorded only when payment is due. Property taxes, franchise taxes, intergovernmental revenues, licenses and permits, charges for services, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period.All other revenue items are considered to be measurable and available only when the government receives cash. The City reports the following major governmental funds: General Fund—The General Fund is the principal fund of the City which accounts for all financial transactions not accounted for in other funds. Cape Canaveral Community Redevelopment Agency Fund—The Cape Canaveral CRA Fund accounts for the receipt and expenditure of property tax revenues from the tax increment financing district to support City redevelopment in the Cape Canaveral community redevelopment area. - 55 - CITY OF CAPE CANAVERAL, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016 (1) Summary of Significant Accounting Policies: (Continued) Capital Construction Fund—The Capital Construction Fund accounts for resources accumulated and payments made for the acquisition of land and construction of major capital facilities related to governmental funds. Enterprise Capital Fund—The Enterprise Capital Fund accounts for resources accumulated and payments made for the acquisition of land and construction of major capital facilities related to business-type funds. The City reports the following major proprietary funds: Wastewater Fund—The Wastewater Fund accounts for the activities of the City's wastewater system. The City operates the sewage treatment plant, sewage pumping stations, collection, and reclaimed water systems, which are financially similar to private business enterprises, where the costs, including depreciation, of providing services to the general public on an ongoing basis are financed through user charges. Stormwater Fund—The Stormwater Fund is used to account for the activities of the City's stormwater management, conservation, protection, control, use and enhancement of stormwater, the costs of which are recovered by user charges. Additionally, the City reports the following fund types: Special Revenue Funds—These funds account for the proceeds of specific revenue sources (other than capital projects) which are legally restricted or committed to fmance particular functions or activities of the City. Capital Projects Funds—These funds account for resources accumulated and payments made for the acquisition of land and construction of major capital facilities related to governmental funds. Amounts reported in the funds as interfund receivables and payables have been eliminated in the governmental and business-type activities columns, except for the net residual amounts due between governmental and business-type activities, which are presented as internal balances due to and due from these different types of activities within the primary government. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing activities. For the City,operating revenues come from fees for wastewater and stormwater services, which are the principal ongoing operations of the City's Wastewater and Stormwater Fund. Operating expenses include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this defmition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed. - 56- CITY OF CAPE CANAVERAL, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016 (1) Summary of Significant Accounting Policies: (Continued) (e) Budgets and budgetary accounting—Annual budgets for all governmental and proprietary funds were adopted in compliance with Florida law. The basis on which the budgets are prepared is consistent with generally accepted accounting principles. Budgetary integration is established in the accounting records for management control purposes at the object of expenditure level; however the City Charter establishes the level at which expenditures may not legally exceed the total City-wide appropriations. The City follows these procedures in establishing the budgetary data reflected in the financial statements: (i) On or before June 30th, the City Manager submits a preliminary budget to the City Council for the ensuing fiscal year. (ii) Budget workshop sessions are scheduled by the City Manager as needed. (iii) Prior to October 1,the budgets are legally enacted through passage of an ordinance. (iv) The City Council reviews the monthly financial reports. (v) The City Manager has the authority to approve budget transfers between line items, expenditure classifications, and departments. The City Council must approve all inter- departmental budget amendments and/or transfers that increase the total appropriations. Budgetary control is exercised at the departmental level. (vi) Every appropriation lapses at the close of the fiscal year. (f) Cash and cash equivalents—Cash and cash equivalents include amounts in demand deposits as well as investments that are readily convertible to known amounts of cash. Investments with original maturities of three months or less are considered to be cash equivalents. In addition, investments in money market funds are sufficiently liquid to permit withdrawal of cash at any time without prior notice or penalty,thus equity in these funds is also deemed to be a cash equivalent. (g) Receivables—Accounts receivable balances are stated at the amount management expects to collect from outstanding balances. The City contracts with the City of Cocoa, Florida, for utility billing services. Therefore, included in the accounts receivables balances, are amounts which have been billed on behalf of the City, but not yet collected; amounts which have been collected by the City of Cocoa, but not yet remitted to the City; and amounts earned by the City, but have not been billed to the customers as of September 30, 2016. (h) Inventories and prepaid items—The cost of inventory is accounted for on the consumption method wherein inventories are charged as expenditures when used rather than when purchased. All inventories are valued at cost, which approximates market, by using the first-in, first-out valuation method. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. The cost of prepaid items is recorded as expenditures/expenses when consumed rather than when purchased. (i) Restricted assets—Certain amounts are classified as restricted assets because their use is limited by applicable debt covenants or laws/regulations imposed by other governmental agencies. The restricted assets are used to report resources set aside to 1) provide a reserve for debt service, 2) provide for capital expansion, and 3) acquire capital assets. - 57- CITY OF CAPE CANAVERAL, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016 (1) Summary of Significant Accounting Policies: (Continued) (j) Capital assets Capital assets, which include property, plant, equipment and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Property, plant, and equipment with initial, individual costs that equal or exceed $1,000 and estimated useful lives of over one year are recorded as capital assets. Capital assets are recorded at historical cost or estimated historical cost, if purchased or constructed. Contributed assets are recorded at fair market value as of the date received. Depreciation is reported for the primary government using the straight-line method calculated on a service-life basis to amortize the cost of the asset over their estimated economic useful lives, which are as follows: Assets Years Buildings and improvements 30- 50 Improvements other than buildings 3 -20 Machinery and equipment 3 -20 Infrastructure 30-50 (k) Zoning escrow—This liability is comprised of amounts received from private business to be used on their behalf for special projects. If the funds are not used, they are to be returned to the private business. Amounts used are not reported as revenues or expenditures in the accompanying financial statements. (1) Compensated absences—The City records the earned portion of accumulated, unused compensated absences at year-end based on each employee's unused hours and rate of pay, including the City's share of payroll taxes. All compensated absences are accrued when incurred in the government-wide and proprietary fund financial statements as accrued liabilities. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations or retirements. (m) Unearned revenue and deposits—Tax receipts are recognized as revenue in the period to which they relate. Monies for the streetscape project are recognized as revenue as the City incurs allowable costs associated with this project. (n) Long-term obligations—In the government-wide financial statements, and proprietary fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. (o) Fund balance—Fund balance of governmental funds is reported in various categories based on the nature of any limitations requiring the use of resources for specific purposes. The following classifications describe the relative strength of the spending constraints: Nonspendable fund balance - amounts that are not in spendable form (such as prepaid expenses and advances due from other funds) or are required to be maintained intact. - 58- CITY OF CAPE CANAVERAL, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016 (1) Summary of Significant Accounting Policies: (Continued) Restricted fund balance - amounts constrained to specific purposes by their providers (such as grantors, bondholders, and higher levels of government), through constitutional provisions or by enabling legislation. Committed fund balance - amounts constrained to specific purposes by the City itself, via a City Council ordinance. To be reported as committed, amounts cannot be used for any other purpose unless the City changes the constraint via ordinance. Assigned fund balance - amounts the City intends to use for a specific purpose, but do not meet the criteria to be classified as committed. The City Council has by resolution, authorized the city manager to assign fund balance. Unassigned fund balance - amounts that are available for any purpose. Positive amounts are reported only in the general fund. Disbursements of fund balance reserves will first be made from restricted amounts when both restricted and unrestricted fund balance is available. Additionally, the City will first use committed fund balance, followed by assigned fund balance, and then unassigned fund balance when expenditures are incurred for purposes which amounts in any of the unrestricted fund balance classifications could be used. (p) General Fund fund balance policy—The City has adopted an ordinance whereby the minimum unassigned fund balance must be at least 20% of the current fiscal year original budgeted expenditures. The City was in compliance with this policy at September 30, 2016. (q) Use of estimates—Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenue and expenses. Actual results could vary from the estimates assumed in preparing the financial statements. (2) Reconciliation of Government-Wide and Fund Financial Statements: (a) Reconciliation of the balance sheet of the governmental funds to the statement of net position Following the governmental fund balance sheet is a reconciliation between fund balance - total governmental funds and net position – governmental activities as reported in the government-wide statement of net position. A detailed explanation of these differences is provided in the above referenced fmancial statement. (b) Reconciliation of the statement of revenues, expenditures, and changes in fund balances of governmental funds to the statement of activities—Following the governmental fund statement of revenues, expenditures, and changes in fund balances,there is a reconciliation between net changes in fund balances – total governmental funds and changes in net position of governmental activities as reported in the government-wide statement of activities. A detailed explanation of these differences is provided in the above referenced financial statement. - 59- CITY OF CAPE CANAVERAL, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016 (3) Property Tax Calendar: Under Florida law, the assessment of all properties and the collection of all county, municipal and school district property taxes are consolidated in the offices of the County Property Appraiser and County Tax Collector. The laws of the state regulating tax assessment are also designed to assure a consistent property valuation method statewide. State Statutes permit municipalities to levy property taxes at a rate of up to 10 mills. The millage rate assessed by the City on the tax roll certified on November 1, 2015 was 3.5235 mills(3.4600 for general government and 0.0635 for the library fund). The property tax calendar is as follows: Valuation Date January 1 Property Appraiser prepares the assessment roll with values as of January 1, July 1 submits this preliminary roll for approval by the State and notifies each taxing authority of their respective valuations. City Council adopts a budget and ad valorem tax millage rate for the coming September fiscal year. Property Appraiser certifies the assessment roll and all real and tangible November 1 personal property taxes are due and payable (Levy date). A Notice of Taxes is mailed to each property owner on the assessment roll. November 1 Taxes may be paid November through March, with the following applicable discounts: Month Paid Discount Percent November 1,2015 November 4 through December 3 March 31,2016 January 2 February 1 March 0 All unpaid taxes on real and tangible personal property become delinquent. April 1 A list of unpaid tangible personal property taxes and a list of unpaid real April and May property taxes are advertised. Tax certificates are sold on all real estate parcels with unpaid real property May 31 taxes (Lien date). A court order is obtained authorizing the seizure and sale of personal property August 29 if the taxpayer fails to pay the delinquent personal property taxes. - 60- CITY OF CAPE CANAVERAL, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016 (4) Deposits and Investments: Deposits: All bank balance deposit amounts are covered by federal depository insurance or collateral with the State of Florida under the Florida Security for Public Deposits Act. The Florida Security for Public Deposits Act establishes guidelines for qualification and participation by banks and savings associations, procedures for the administration of the collateral requirements, and characteristics of eligible collateral. Under the Act, City deposits in qualified public depositories are fully insured. The qualified public depository must pledge 50% of the average daily balance for each month of all public deposits in excess of any applicable depository insurance. Additional collateral, up to a maximum of 125% may be required if deemed necessary under the conditions set forth in the Act. Obligations pledged to secure deposits must be delivered to the State Treasurer, or with the approval of the State Treasurer, to a bank, savings association, or trust company provided a power of attorney is delivered to the Treasurer. Investments: The City's investment policies are governed by state statutes and City Ordinances. As of September 30, 2016, the City follows guidelines of authorized investments under Section 218.415(17), Florida Statutes. Investments authorized under this provision of the state statutes are limited to: the Florida Local Government Surplus Funds Trust Fund (SBA), or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperation Act; Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency; interest bearing time deposits or savings accounts in state-certified qualified public depositories; direct obligations of the U.S. Treasury, and securities of, or other interests in, any open-end or closed-end management-type investment company or investment trust registered under the Investment Company Act of 1940. The City measures and records its investments, assets whose use is limited, and restricted assets using fair value measurement guidelines established by GASB Statement No. 72. These guidelines recognize a three-tiered fair value hierarchy,as follows: • Level 1: Quoted prices for identical investments in active markets; • Level 2: Observable inputs other than quoted market prices; and, • Level 3: Unobservable inputs. At September 30, 2016, the City had the following deposits and investments included in equity in pooled cash and investments: Carrying Value at September 30, Credit Investment Type 2016 Maturity Rating Cash in banks $2,860,301 N/A N/A Florida Division of Treasury—Special Purpose 7,001,768 2.65 years A+f Investment Account Total Government-wide deposits and $9,862,069 investments The Florida Division of Treasury—Special Purpose Investment Account was valued at fair value using significant unobservable inputs(Level 3 on the fair value hierarchy). - 61 - CITY OF CAPE CANAVERAL, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30,2016 (4) Deposits and Investments: (Continued) Interest Rate Risk: Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of investments. In accordance with the provisions of the state statutes governing allowable investments, the City manages its exposure to declines in fair values by limiting the maturity of specific investments to provide sufficient liquidity to pay obligations as they come due. Credit Risk: Credit rate risk is the risk of losses due to the failure of the security issue or backer. This is mitigated by investing in the assets allowed under City Ordinance and by diversifying the portfolio so that potential losses on individual securities will be minimized. Custodial Credit Risk: For an investment, this is the risk that, in the event of the failure of the counterparty,the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The City has investments in the State of Florida Division of Treasury's Special Purpose Investment Account (SPIA), of which the City owns a share of the Pool, not the underlying securities. At June 30, 2016, the fair value factor for the SPIA was 1.0121. Additional valuation information is available in the State of Florida's Comprehensive Annual Financial Report, which can be obtained through their website,www.myfloridacfo.com. Concentrations of Credit Risk: The City's policy does not limit the amount that can be invested in any one issuer. As of September 30, 2016, all investments of the City are held in the pooled investment accounts administered by the State of Florida. (5) Receivables: At September 30, 2016,the City's receivables consist of the following. Receivables in the wastewater and stormwater funds represent customer receivables but have been included in Due from Other Governments in the statement of net position as another municipality is responsible for the billing and collection of the receivables and ultimate payments to the City: Allowance for Gross Doubtful Receivables, Receivables Accounts net Governmental Activities: General Fund $319,821 $(2,317) $317,504 Total Governmental Activities 319,821 (2,317) 317,504 Business-Type Activities: Wastewater 768,363 (7,169) 761,194 Stormwater 113,429 (1,060) 112,369 Total Business-Type Activities 881,792 (8,229) 873,563 Totals $1,201,613 $(10,546) $1,191,067 - 62- CITY OF CAPE CANAVERAL, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30,2016 (6) Interfund Loans and Transfers: The outstanding balances between funds result mainly from the time lag between the dates reimbursable expenditures occur, when transactions are recorded in the accounting system, and when payments between funds are made. At September 30, 2016, individual fund interfund receivables and payables for the primary government are comprised of the following: Due From Due To Other Other Funds Funds Wastewater Fund: Stormwater Fund $ - $762,620 Stormwater Fund: Wastewater Fund 762,620 - Total—All Funds $762,620 $762,620 At September 30, 2016, long-term individual fund advances to and from other funds for the primary government were for the purposes of providing advance funding for projects in the Cape Canaveral CRA Fund and comprised of the following: Advance Advance To From General Fund: Cape Canaveral CRA Fund $81,722 $ - Cape Canaveral CRA Fund: General Fund - 81,722 Wastewater Fund - 420,785 Wastewater Fund: Cape Canaveral CRA Fund 420,785 - Total—All Funds $502,507 $502,507 - 63 - CITY OF CAPE CANAVERAL, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016 (6) Interfund Loans and Transfers: (Continued) For the year ended September 30,2016,the composition of interfund transfers is as follows: Transfer Transfer From To Governmental Activities: General Fund: Fire Protection Fund $25,000 $ - School Crossing Guard Fund 1,458 - Cape Canaveral CRA Fund 1,821 - Capital Construction Fund - 1,658,059 Wastewater Fund 797,688 - Stormwater Fund 19,566 - Cape Canaveral CRA Fund: General Fund - 1,821 Wastewater Fund - 473,108 Capital Construction Fund: General Fund 1,658,059 - Enterprise Capital Fund: Wastewater Fund 3,495,675 - Stormwater Fund 979,808 - Nonmajor Governmental Funds: Fire Protection Fund: General Fund - 25,000 School Crossing Guard Fund: General Fund - 1,458 6,979,075 2,159,446 Business-Type Activities: Wastewater Fund: General Fund - 797,688 Cape Canaveral CRA Fund 473,108 - Enterprise Capital fund - 3,495,675 Stormwater Fund: General Fund - 19,566 Enterprise Capital Fund - 979,808 473,108 5,292,737 $ 7,452,183 $ 7,452,183 Transfers are used to (1) move revenues from the fund with collection authorization to the debt service fund as debt service principal and interest payments become due, (2) move restricted amounts from borrowings to the debt service funds to establish and maintain mandatory reserve and sinking fund accounts, (3) move revenues from proprietary fund operations to the general fund for payments in lieu of taxes, (4) move unrestricted revenues to finance various programs that the City must account for in other funds in accordance with budgetary authorizations, including amounts provided as matching funds for various grant programs, and (5) move CRA monies to Wastewater fund for portion of capital project in CRA district. During the year,the City also incurred $4,477,481 in capital outlay expenditures in the Enterprise Capital Fund for construction in progress, equipment, and other capital improvements, of which $3,497,674 and $979,807 was contributed to the Wastewater Fund and Stormwater Fund, respectively. - 64- CITY OF CAPE CANAVERAL, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016 (7) Capital Assets: For the fiscal year ended September 30, 2016, capital asset activity was as follows: Beginning Ending Balance Increases Decreases Balance Governmental activities: Capital assets,not being depreciated: Land $7,248,237 $ - $ - $7,248,237 Construction in progress 964,267 4,211,735 - 5,176,002 Total capital assets,not being depreciated 8,212,504 4,211,735 - 12,424,239 Capital assets,being depreciated: Buildings and improvements 4,751,031 - (11,46) 4,749,885 Machinery and equipment 3,015,508 452,746 (50,634) 3,417,620 Infrastructure 7,061,579 140,459 (11,645) 7,190,393 Total capital assets,being depreciated 14,828,118 593,205 (63,425) 15,357,898 Accumulated depreciation for: Buildings and improvements (1,109,668) (147,738) 2,058 (1,255,348) Machinery and equipment (1,628,454) (190,478) 45,894 (1,773,038) Infrastructure (1,977,591) (300,232) - (2,277,823) Total accumulated depreciation (4,715,713) (638,448) 47,952 (5,306,209) Total capital assets being depreciated, net of accumulated depreciation 10,112,405 (45,243) (15,473) 10,051,689 Governmental activities capital assets, net $18,324,909 $4,166,492 $(15,473) $22,475,928 Business-type activities: Capital assets,not being depreciated: Land $351,084 $ - $ - $351,084 Construction in progress 3,132,555 4,246,878 (5,580,789) 1,798,644 Total capital assets,not being depreciated 3,483,639 4,246,878 (5,580,789) 2,149,728 Capital assets,being depreciated: Buildings and improvements 5,215,495 78,115 (2,676) 5,290,934 Machinery and equipment 1,925,611 4,297,682 (38,783) 6,184,510 Infrastructure 22,774,057 1,503,243 (5,422) 24,271,878 Total capital assets,being depreciated 29,915,163 5,879,040 (46,881) 35,747,322 Accumulated depreciation for— Buildings and improvements (2,082,614) (143,937) 20,883 (2,225,462) Infrastructure (694,208) (167,789) 17,667 (824,536) Machinery and equipment (12,678,315) (809,671) 1,029 (13,486,957) Total accumulated depreciation (15,455,137) (1,121,397) 39,579 (16,536,955) Total capital assets being depreciated, net of accumulated depreciation 14,460,026 4,757,643 (7,302) 19,210,367 Business-type activities capital assets, net $17,943,665 $9,004,521 $(5,588,091) $21,360,095 - 65 - CITY OF CAPE CANAVERAL, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30,2016 (7) Capital Assets: (Continued) Depreciation expense was charged to functions/programs as follows: Governmental activities: General government $ 13,742 Public safety 259,453 Transportation 254,164 Culture and recreation 111,089 Total depreciation expense-governmental activities $ 638,448 Business-type activities: Wastewater $ 991,275 Stormwater 130,122 Total depreciation expense-business-type activities $ 1,121,397 (8) Long-term Debt: A.Revenue Bonds and Notes Governmental Activities: Capital Improvement Revenue Note,Series 2014 The $5,500,000 Capital Improvement Revenue Note, Series 2014 was issued in February 2014 to finance various general government capital improvements and acquisitions including but not limited to a City Hall project, Fire Station, Main Wastewater Treatment Plant Building Refurbishment, and other capital improvements and to pay the cost of issuance related to the financing. The Series 2014 Note is secured by an irrevocable first lien pledge and dedication of the pledged revenues which would consist of(1) public service tax of $1,504,000, (2) the City's local government half-cent sales tax of $490,000, (3) the guaranteed entitlement portion of the state revenue sharing funds of $252,100, and (4) franchise fees of $640,000. These annually pledged revenues collectively support the annual debt repayment of $612,124 which comprises of $594,562 in principal and$17,562 in interest through the maturity date. The pledge of the pledged revenues would be continuing and cumulative until all amounts under the Series 2014 Note shall have been paid. The City directly collects the public service taxes, whereas the sales tax, state revenue sharing funds, and franchise fees are collected through third parties and subsequently remitted to the City. The note, which bears interest at 1.99%,is payable semi-annually on February 1 and August 1 of each year until final maturity on February 1, 2024. Total principal remaining to be paid on the note is $4,480,000. - 66- CITY OF CAPE CANAVERAL, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016 (8) Long-term Debt: (Continued) Business-Type Activities: State Revolving Loan The City has applied for and received various loans under Florida's State Revolving Fund (SRF) loan program. These loans,granted by the State,fund various wastewater and stormwater projects. The City's one SRF loan outstanding at September 30,2016 is summarized as follows: 1.68% State Revolving Fund promissory note payable in the amount of$5,298,601; with semiannual loan payments of $173,207 beginning June 15, 2018 through 2031; secured by the net wastewater and stormwater utility revenue of the City per Section 4 of Ordinance 01-2013 $ 4,107,608 Less: current maturities - Total business-type activities long-term debt $ 4,107,608 Annual debt service requirements to maturity for the City's revenue bonds and notes are as follows: Year Ending Governmental Activities Business-Type Activities September 30, Principal Interest Principal Interest Total 2017 $521,000 $83,968 $ - $ - $604,968 2018 532,000 73,941 234,374 151,675 991,990 2019 543,000 62,795 282,525 63,889 952,209 2020 554,000 51,879 287,292 59,122 952,293 2021 565,000 40,745 292,138 54,276 952,159 2022-2026 1,765,000 53,143 1,536,305 195,765 3,550,213 2027-2031 - - 1,474,974 61,913 1,536,887 Totals $4,480,000 $366,471 $4,107,608 $586,640 $9,540,719 - 67 - CITY OF CAPE CANAVERAL, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016 (8) Long-term Debt: (Continued) B. Change in Long-term Liabilities Long-term liability activity for the year ended September 30, 2016,was as follows: Beginning Ending Due Within Balance Increases Decreases Balance One Year Governmental Activities Series 2014 Note $4,991,000 $ - $(511,000) $4,480,000 $521,000 Compensated absences payable 215,448 135,090 (143,449) 207,089 165,671 Total Governmental Activities $5,206,448 $135,090 $(654,449) $ 4,687,089 $686,671 Business-Type Activities State revolving loans $2,245,786 $2,074,470 $(212,648) $4,107,608 $ Compensated absences payable 94,447 54,867 (67,147) 82,167 65,733 Total Business-Type Activities $2,340,233 $2,129,337 $(279,795) $4,189,775 $65,733 Compensated absences are typically paid from the General Fund, Wastewater Fund, and the Stormwater Fund. With respect to governmental activities, compensated absences are primarily liquidated from the General Fund. The liability for compensated absences in the business-type activities is liquidated in the fund in which the liability was incurred. There are no debt issues outstanding which have or will have any arbitrage rebate payable as of the report date. (9) Employees' Retirement Plan: Established with Resolution No. 2006-13 of the City Council, which is responsible for amending the plan provisions and contribution requirements, the City contributes to a defined contribution plan which is administered by the Florida League of Cities, P. O. Box 1757, Tallahassee, FL 32302, and features participant-directed investments. The City established the plan for all regular full time and regular part time employees with one year of employment and 1,000 hours of service each year. All qualifying employees at least 18 years of age participate in the plan on the date of employment. Retirement benefits are available after 5 years of service. Established with Resolution No. 2006-51 of the City Council, employer contributions to the plan are 7% of the employee gross wages and the City allows for a matching contribution of up to 3% of employee's basic compensation. Forfeitures of $27,969 were used to reduce the City's current period contribution requirement. For the year ended September 30, 2016, employer and matching contributions to the defined contribution plan were $79,200 and $42,938, respectively. As of September 30, 2016, the Plan had 36 participating employees. - 68- CITY OF CAPE CANAVERAL, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016 (10) Other Post-Employment Benefits(OPEB): Plan Description—The OPEB Plan is a single-employer benefit plan administered by the City. Retirees are charged what the insurance company charges for the type of coverages elected, however, the premiums charged by the insurance company are based on a blending of the experience among younger active employees and older retired employees. The older retirees actually have a higher cost which means the City is subsidizing the cost of the retiree coverage because it pays all or a significant portion of the premium on behalf of the active employee. GASB No.45 calls this the "implicit rate subsidy." Retirees and their dependents are permitted to remain covered under the City's respective health care plans as long as they pay a full premium applicable to the coverages elected. This conforms to the minimum required of Florida governmental employers per Chapter 112.08 of Florida Statutes. The OPEB Plan does not issue a stand-alone report. At September 1,2015,the date of the latest actuarial valuation,plan participation consisted of: Active Employees 48 Inactive Employees 11 59 Funding Policy—For the OPEB Plan, contribution requirements of the City are established and may be amended through action from the City Council. Currently, the City's OPEB Benefits are unfunded. The required contributions are based on pay-as-you-go financing requirements. There is no separate Trust fund or equivalent into which the City would make contributions to advance-fund the obligation. Therefore, ultimate subsidies which are provided over time are financed directly by general assets of the City, which are invested in very short-term fixed income instruments according to its current investment policy. The interest rate used to calculate the present value and costs of OPEB must be the long-range expected return on such short-term fixed income instruments. The City selected an interest discount of 4.00% for this purpose. Annual OPEB Cost and Net OPEB Obligation—The City's annual other post-employment benefit (OPEB) cost (expense) is calculated based on the annual required contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB No.45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial accrued liabilities over a period not to exceed thirty years. The unfunded actuarial accrued liability represents an actuarial measurement of the obligation that has accrued so far based on the promise that has been made to current retirees and to current employees. Since the City's OPEB is currently unfunded, the offset to that expense comes from actual subsidies paid on behalf of the current retirees and their dependents for the current year. This offset is called the Employer Contribution and equals the total age-adjusted costs paid by the City for coverage for the retirees and their dependents for the year (net of the retiree's own payments for the year). - 69- CITY OF CAPE CANAVERAL, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016 (10) Other Post-Employment Benefits(OPEB): (Continued) The components of the annual OPEB cost for the current year, the total contributions and the changes in the net obligation are as follows: Normal Cost (service cost for one year) $10,000 Amortization of Unfunded Actuarial Accrued Liability (UAAL) (1,000) Amortization of Net OPEB Obligation 6,000 Annual Required Contribution(ARC) 15,000 Interest on Net OPEB Obligation 2,000 Adjustment to ARC (6,000) Annual OPEB Cost (Expense) 11,000 Less: Employer Contributions Made (3,000) Increase in Net OPEB Obligation 8,000 Net OPEB Obligation at beginning of year 50,000 Net OPEB Obligation at end of year $58,000 For the year ended September 30, 2016, the City's annual OPEB cost (expense) was $11,000. The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the past 3 years is as follows: Annual Percentage of Net Year Ended OPEB City Annual OPEB OPEB September 30, Cost Contributions Cost Contributed Obligation 2016 $11,000 $ 3,000 27% $58,000 2015 $11,000 $ 2,000 18% $50,000 2014 $11,000 $ 3,000 27% $41,000 In the Statement of Net Position, the City reports a Net OPEB Obligation of $35,943 in governmental activities and $22,057 in business-type activities. Funding Status and Funding Progress—The funding status of the plan as of September 1, 2015, the most recent actuarial valuation date, was as follows: Fiscal Year Valuation as of 9/1/2015 Actuarial Accrued Liability (AAL) $40,000 Actuarial Value of Plan Assets N/A Unfunded Actuarial Accrued Liability (UAAL) 40,000 Funded Ratio (Actuarial Value of Plan Assets/AAL) N/A Covered Payroll (Active Plan Members) $2,289,000 UAAL as a Percentage of Covered Payroll 1.7% - 70- CITY OF CAPE CANAVERAL, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016 (10) Other Post-Employment Benefits(OPEB): (Continued) Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, termination, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and annual required contributions of the City are subject to continual revision and actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. Actuarial Methods and Assumptions—Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the City and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the City and plan members to that point. The projections do not explicitly incorporate the potential effects of legal or contractual funding limitations. The actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets,consistent with the long-term perspective of the calculations. The projected unit cost method is used to determine the Plan's liabilities and costs. For each participant, benefits earned to date are calculated using projected benefits based on accrual to the date of expected retirement and the participant's benefit service,when eligible. Costs are attributed from the date of hire to the date first eligible for full benefits. The individual's service cost is the actuarial present value of the benefit earned at the end of the plan year less the actuarial present value of benefits earned at the beginning of the plan year. The individual's actuarial accrued liability is the actuarial present value of benefits earned as of the beginning of the plan year. The following is a summary of the significant actuarial methods and assumptions: Actuarial Valuation: Frequency Bi-Annual Latest Date 9/1/2015 Cost Method Projected Unit Credit UAAL Amortization: Method Level Dollar Payment Open/Closed Open Remaining Amortization Period 10 Years Asset Valuation N/A Actuarial Assumptions: Investment Earnings 4.00% Salary Increases 2.50% Inflation Rate 2.75% Healthcare Inflation Rate 10.00% Initial 5.00% Ultimate (11) Legal Matters: The City is engaged in routine litigation incidental to the conduct of its business and municipal affairs. In the opinion of its Counsel, no other legal proceedings are pending against them, not covered by insurance, which would inhibit the City's ability to perform its operations or materially affect its financial condition. - 71 - CITY OF CAPE CANAVERAL, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016 (12) Commitments and Contingencies: Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies, principally the federal and state governments. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable fund(s). The amount, if any, of expenditures from current or prior years which may be disallowed by the grantor cannot be determined at this time although the City expects such amounts, if any, to be immaterial. (13) Risk Management: The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters, all of which are, in the opinion of management, satisfactorily insured by general liability insurance. Commercial insurance policies are also obtained for all other risks of loss, including workers' compensation and employee health and accident insurance. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three years. (14) Fund Deficits: The Cape Canaveral CRA Fund deficit of $466,535 represents the cumulative costs associated with capital improvements and excess of expenditures over revenues. This deficit is to be funded by future tax increment revenues. (15) Recent Accounting Pronouncements: The Governmental Accounting Standards Board ("GASB") has issued several pronouncements that have effective dates that may impact future financial statements. Listed below are pronouncements with required implementation dates effective for subsequent fiscal years that have not yet been implemented. Management has not currently determined what, if any, impact implementation of the following will have on the City's financial statements: (a) GASB issued Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other than Pension Plans, in June 2015, which establishes new accounting and financial reporting requirements for governments whose employees are provided with OPEB. GASB 74 is intended to improve the usefulness of information about postemployment benefits other than pensions included in the general purpose external financial reports of state and local governmental OPEB plans for making decisions and assessing accountability. The requirements of GASB 74 are effective for fiscal years beginning after June 15,2016. (b) GASB issued Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, in June 2015, which establishes standards for recognizing and measuring liabilities, deferred outflows or resources, deferred inflows of resources, and expense/expenditures. GASB 75 seeks to improve accounting and financial reporting by state and local governments for postemployment benefits other than pensions. The provisions in GASB 75 are effective for fiscal years beginning after June 15,2017. - 72- CITY OF CAPE CANAVERAL, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016 (15) Recent Accounting Pronouncements: (Continued) (c) GASB issued Statement No. 77, Tax Abatement Disclosures, in August 2015. GASB 77 requires governments that enter into tax abatement agreements to disclose the following information about the agreements: (1) brief descriptive information, such as the tax being abated, the authority under which tax abatements are provided, eligibility criteria, the mechanism by which taxes are abated, provisions for recapturing abated taxes, and the types of commitments made by tax abatement recipients; (2) the gross dollar amount of taxes abated during the period; and (3) commitments made by a government, other than to abate taxes, as part of a tax abatement agreement. The provisions in GASB 77 are effective for periods beginning after December 15, 2015. (d) GASB issued Statement No. 78, Pensions Provided through Certain Multiple-Employer Defined Benefit Pension Plans, in December 2015. GASB 78 addresses practice issues regarding the scope and applicability of GASB 68. The provisions in GASB 78 are effective for periods beginning after December 15, 2015. (e) GASB issued Statement No. 79, Certain External Investment Pools, in December 2015. GASB 79 addressing accounting and financial reporting for certain external investment pools and pool participants by establishing criteria for an external investment pool to qualify for making the election to measure all of its investments at amortized cost for financial reporting purposes. The provisions in GASB 79 are effective for periods beginning after December 15, 2015. (f) GASB issued Statement No. 80, Blending Requirements for Certain Component Units An Amendment of GASB Statement No. 14, in January 2016, which amends the blending requirements for the financial statement presentation of component units of all state and local governments. GASB 80 enhances the comparability of fmancial statements among governments. The provisions in GASB 80 are effective for fiscal years beginning after June 15, 2016. (g) GASB issued Statement No. 81, Irrevocable Split-Interest Agreements, in March 2016, which requires that a government that receives resources pursuant to an irrevocable split-interest agreement recognize assets,liabilities, and deferred inflows of resources at the inception of the agreement. GASB 81 enhances comparability of financial statements by providing accounting and financial reporting guidance for irrevocable split-interest agreements in which a government is a beneficiary. The provisions in GASB 81 are effective for fiscal years beginning after December 15, 2016. (h) GASB issued Statement No. 82,Pension Issues An Amendment of GASB Statements No. 67, No. 68, and No. 73, in March 2016. GASB 82 addresses issues regarding (1) the presentation of payroll-related measures in required supplementary information, (2) the selection of assumptions and the treatment of deviations from the guidance in an Actuarial Standard of Practice for financial reporting purposes, and (3) the classification of payments made by employers to satisfy employee (plan member) contribution requirements. The provisions in GASB 82 are effective for periods beginning after either June 15, 2016 or June 15, 2017, if certain assumptions are met. - 73 - CITY OF CAPE CANAVERAL, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016 (15) Recent Accounting Pronouncements: (Continued) (i) GASB issued Statement No. 83, Certain Asset Retirement Obligations, in November 2016. GASB 83 addresses accounting and financial reporting for certain asset retirement obligations (AROs), which are legally enforceable liabilities associated with the retirement of a tangible capital asset. The provisions in GASB 83 are effective for periods beginning after June 15, 2018. (j) GASB issued Statement No. 84, Fiduciary Activities, in January 2017. GASB 84 improves guidance regarding the identification and reporting of fiduciary activities. The provisions in GASB 84 are effective for periods beginning after December 15,2018. - 74- Required Supplementary Information - 75 - fl 4. (7) NN n- os O ' ,— N N N U s p 4_,L) U,, p U O O O O O O O O O ' O O O O j 000 N m 000 pat. N N ONNN O O U 6464 fol-EA 6 E 4-1 O O O O O c OOOO '8 z 6000 ma Z , off • o 000000 ; A A 1 o o y r = W w . ct 600006 u oaaW oQ ac.7zw d U ti -?aUFCD 0 > _ 0 W W _ O O O O a "O 6 0 0 0 0 0SDO a) .:0' C) C4 ^ o a 6000 oryvo o 4 0w : ct otn ,,o 5 ov ri <orn o y z 7 0.0 1 CQ C V V Vv N NN T G4 W A W O EA EA EA EA 0 P-i U G' O W 0. 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Revenues are provided from impact fees assessed on new residential and commercial construction over two stories high. School Crossing Guard This Fund accounts for the cost of a school crossing guard. Revenues are derived from a $10 surcharge on parking citations issued within the City. Library This Fund accounts for revenues levied within the property tax millage for maintenance of the public library. Special Law Enforcement Trust This Fund accounts for the receipt and disbursement of confiscated contraband property proceeds from certain criminal cases pursuant to Florida Statutes. - 79- oo © r r r r QS QS QS QS LoS QS 0 Cr N N / „jk\ VD- VD- 3 z _ _z _ z 6• fn rn Kr on) % QS &S &S QS _ _ ) _ / „ tr) to „ 2 t / , m m m m \\ gcx '7 ) U QS QS QS QS QS _ Cnp\ / bN to k) \ , „ to w4 4 r r r r* §/ £ f _ !- o oo 4 \/, §/ _ Qcn QQrn _ 4 ,wN cton °E ` — — — — t C ) ) g z m QS QS QS QS LoS LoS\ .5 \ ] \ @ j \ :- w (C` ® . so \\ ±\ ®\\G \ \ )zz= \ j) ■ meg / co . }\/ \ $ )\ a ° ° \j 4 H a H / H Cr 00 M V O N V V vi vi 00 00 m 00 N N vl 00 N N Cr 00 00 VD O to vl vl O VD M en —1 to N V O 00 N V V N 00 71 O N vi N N M O,r vi VD M M VD N Cr M MN N N 00 0o O M M F QS QS 71-1- 00 t t VD VD VD O i ' ' ' N 00 ' V ' V VD ' ' VD N \D Cd F — — M M - 00 \D U d I. 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C v9 b9 ✓ d d I I I I I I I I I I I I • el II Q) .603 cu ti • ••' ' _ v') 00 M 00 00 VD N V1 N 00 I I I N A CS H 0 M M 00 1p dv)pv) = u sg czCL) 42 U CH w w 000 °M° 00100 N wA [* • U 5 - - MM 00 O CD 7,1 gC• wN con cu o 44 w M V]0. ff3 ff3 ^cs J w W ,[^wQ, ,••, • ••, 00 „-! _ 0▪ '-C711 ti00 O O 1 I I N N UPZ4 V) oa a MM 00 Z \I PP d w o F= pq Ef3 E a44 _ UAwO y ›, 44 O x ~ an on v) w :. 0 w 0 0 , Z00 o = ct O U dj rn c) r . E A V 0cu cu A- , - ay 'w O O a U U I •.-- 4 Q.L. y . "= ": y 0 C) © w H H y c4 w w 5 4 w w Statistical Section - 85 - THIS PAGE INTENTIONALLY LEFT BLANK. - 86 - Statistical Section This part of the City of Cape Canaveral, Florida's Comprehensive Annual Financial Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health. Contents Page Financial Trends 89 These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. Revenue Capacity 96 These schedules contain information to help the reader assess the factors affecting the City's ability to generate its property and sales taxes. Debt Capacity 101 These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. Demographic and Economic Information 105 These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place. Operating Information 106 These schedules contain information about the City's operations and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the Comprehensive Annual Financial Report for the relevant fiscal year. - 87- THIS PAGE INTENTIONALLY LEFT BLANK. - 88 - '--I 7 CO CO 0 -- N 00 M Vl Vt M M 0) N CO CO Vl M 0 00 VD -- CO 10 On N 7 10 M N CO 0 N 0 19 00 N al O 00- - cco 00 00 00 0 N N N on O` N0 00 M 0 On CTV1 M 00 00 CO N N M -- 7 O 0 -- N 7 7 N N 7 -- -- -- -. N M 63 69- N AN O O N M 7 CO 0n 0 7 CO N CO tn N 01 7 7 N 7 0 00 0 m OOn 00 7 .co-l 7--i M 01 00 Vi N 10 O l- CO 7 0 01 -- t -:F 1D 01 01 V1 0 01 7 o 01 N -- t- 1D N , N M ---i 00 O --i 7 vi N N 00 -- N -- -. 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F Ac = o z (7 w U Z w City of Cape Canaveral,Florida Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Year 2016 2015 2014 2013 General Fund Reserved $ - $ - $ - $ - Unreserved - - - - Nonspendable 96,734 105,275 124,668 12,394 Restricted 447,214 542,083 430,314 249,194 Committed 2,479,667 4,393,882 5,024,941 2,264,838 Assigned - - 485,543 428,837 Unassigned (deficit) 3,981,139 3,585,562 3,026,331 3,285,868 Total general fund $7,004,754 $ 8,626,802 $ 9,091,797 $ 6,241,131 All other Governmental Funds: Reserved $ - $ - $ - $ - Unreserved,reported in: Special revenue funds - - - - Capital projects fund - - - - Nonspendable - - - - Restricted 1,091,268 1,149,091 866,396 913,010 Committed 2,257 3,113 - - Assigned - 1,998 - - Unassigned(deficit) (466,535) - (189,731) - Total all other governmental funds $626,990 $1,154,202 $676,665 $913,010 Note: Implementation of GASB 54 in 2011 has changed fund balance designations. - 92 - Table 3 Fiscal Year 2012 2011 2010 2009 2008 2007 $- $- $1,319,729 $49,172 $365,929 $351,716 - - 5,051,617 6,306,358 5,123,269 4,757,047 11,192 376,436 227,475 47,645 - - 2,901,197 2,731,899 3,035,218 2,831,584 $6,175,082 $5,987,564 $6,371,346 $6,355,530 $5,489,198 $5,108,763 $- $- $229,488 $21,362 $19,896 $12,915 - - 517,503 855,695 702,131 497,486 - - 780,229 781,333 762,263 800,877 - 6,247 774,266 1,189,516 4,119 7,762 - - - - $778,385 $1,203,525 $1,527,220 $1,658,390 $1,484,290 $1,311,278 - 93 - City of Cape Canaveral, Florida Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Year 2016 2015 2014 2013 Revenues: Property Taxes $3,349,568 $3,280,632 $3,244,566 $3,225,873 Local option fuel taxes 333,666 303,353 283,621 319,888 Utility and franchise taxes 2,385,437 2,327,660 2,242,170 2,005,288 Intergovernmental 2,911,743 1,107,604 1,237,160 968,271 Licenses and permits 218,773 324,649 214,674 240,605 Charges for services and impact fees 1,184,568 1,187,150 1,178,777 1,177,491 Fines and forfeitures 29,690 80,412 84,173 68,477 Impact fees 556,989 16,046 - - Investment earnings 77,593 80,687 65,002 118,418 Contributions and donations - - - 2,286 Miscellaneous 86,301 129,237 174,520 107,101 Total revenues 11,134,328 8,837,430 8,724,663 8,233,698 Expenditures: Current: General government 1,718,241 1,497,117 1,137,376 1,158,745 Public safety 4,547,434 4,270,231 4,686,563 4,536,967 Transportation 714,108 734,258 708,679 650,836 Physical environment 1,059,367 1,039,747 971,376 958,346 Culture/recreation 529,267 468,430 629,639 505,509 Capital outlay 8,933,674 3,678,426 5,089,128 386,968 Debt service: Principal 511,000 509,000 - - Interest 94,236 104,385 47,124 - Total expenditures 18,107,327 12,301,594 13,269,885 8,197,371 Excess of revenues over (under)expenditures (6,972,999) (3,464,164) (4,545,222) 36,327 Other financing sources (uses): Proceeds from sale of assets 4,110 12,567 99,119 39,347 Capital lease - - - - Transfers In 6,979,075 4,467,764 5,435,060 353,120 Transfers Out (2,159,446) (1,003,625) (3,874,636) (228,120) Issuance of long term debt - - 5,500,000 Total other fmancing sources (uses) 4,823,739 3,476,706 7,159,543 164,347 Net change in fund balances $(2,149,260) $12,542 $2,614,321 $200,674 Debt Service as a Percentage of Noncapital Expenditures 6.60% 7.11% 0.58% 0.00% -94- Table 4 Fiscal Year 2012 2011 2010 2009 2008 2007 $3,246,835 $3,701,683 $3,301,598 $3,988,772 $3,938,006 $4,126,664 343,960 270,065 286,961 275,700 250,773 256,561 1,926,356 2,001,431 2,055,467 2,038,270 2,005,460 1,989,636 840,488 1,207,232 717,593 876,990 809,619 880,794 187,851 174,371 184,938 169,165 186,704 313,322 1,052,443 1,004,528 987,925 988,282 978,083 1,003,219 32,810 43,743 69,808 74,585 37,116 174,672 177,045 189,714 243,926 202,793 216,606 414,755 11,722 67,578 178,321 4,665 885 200,065 88,152 65,364 26,387 28,504 35,593 89,510 7,907,662 8,725,709 8,052,924 8,647,726 8,458,845 9,449,198 1,075,806 661,104 662,651 712,862 640,727 895,652 4,443,899 4,457,143 4,494,953 4,579,807 4,554,969 4,164,897 731,492 881,311 869,194 885,181 894,060 989,750 886,445 855,189 827,054 872,318 870,223 865,088 505,436 394,860 381,838 365,351 346,513 400,186 741,895 2,318,682 959,909 319,875 686,504 3,409,357 - - - - 35,649 33,977 - - - - 1,753 3,425 8,384,973 9,568,289 8,195,599 7,735,394 8,030,398 10,762,332 (477,311) (842,580) (142,675) 912,332 428,447 (1,313,134) 114,689 10,103 - 3,100 - - 125,000 125,000 125,000 125,000 125,000 125,000 239,689 135,103 125,000 128,100 125,000 125,000 $(237,622) $(707,477) $(17,675) $1,040,432 $553,447 $(1,188,134) 0.00% 0.00% 0.00% 0.00% 0.51% 0.51% -95- City of Cape Canaveral,Florida Table 5 Tax Revenues by Source of Governmental Funds Last Ten Fiscal Years Fiscal Year Ending Local Option Gas Utility and September 30 Property Taxes Taxes Franchise Taxes Total 2016 $ 3,349,568 $ 333,666 $ 2,385,437 $ 6,068,671 2015 3,280,632 303,353 2,327,660 5,911,645 2014 3,244,566 283,621 2,242,170 5,770,357 2013 3,225,873 319,888 2,005,288 5,551,049 2012 3,246,835 343,960 1,926,356 5,517,151 2011 3,701,683 270,065 2,001,431 5,973,179 2010 3,301,598 286,961 2,055,467 5,644,026 2009 3,988,772 275,700 2,038,270 6,302,742 2008 3,938,006 250,773 2,005,460 6,194,239 2007 4,126,664 256,561 1,989,636 6,372,861 [Pie Chart of Tax Revenues by Source- Governmental Funds FY 2015-2016] Note: This schedule represents General Fund Revenues and Special Revenue Funds - 96 - City of Cape Canaveral,Florida Table 6 Assessed Value and Actual Value of Taxable Property-Unaudited Last Ten Fiscal Years Fiscal Assessed Value Year Total Taxable as a Percentage Ending Estimated Actual Exemptions Real Assessed Total Direct Tax of Actual Value Sept. 30 Real Property Personal Property Value Property Value Rate Value Value 2016 $1,210,304,710 $37,596,222 $1,247,900,932 $139,827,608 $976,475,444 3.5432 78.2% 2015 1,089,004,140 37,779,795 1,126,783,935 136,211,297 911,269,988 3.7246 80.9% 2014 997,910,830 32,828,416 1,030,739,246 134,809,299 854,722,277 3.9102 82.9% 2013 941,481,580 29,345,431 970,827,011 133,952,078 819,560,573 4.0739 84.4% 2012 946,202,570 28,849,632 975,052,202 135,604,108 822,683,104 4.0739 84.4% 2011 1,086,815,240 37,635,713 1,088,915,973 144,063,544 944,852,429 4.0739 86.8% 2010 1,297,016,050 44,355,005 1,341,371,055 256,232,810 1,114,328,062 3.0671 83.1% 2009 1,621,339,380 44,924,563 1,666,263,943 316,819,560 1,343,479,136 3.0671 80.6% 2008 1,739,019,845 42,792,900 1,781,812,745 321,863,840 1,459,073,335 2.7816 81.9% 2007 1,773,047,020 39,450,089 1,812,497,109 386,735,730 1,424,882,519 3.0000 78.6% [Bar Graph of:] Actual vs Assessed Value of Taxable Property 2,000 1,800 1,400 1,400 1,200 1,000 800 600 400 200 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 ■ Actual Value ■ Assessed Value Source: Brevard County Property Appraiser (Form DR-403 AM) -97- City of Cape Canaveral,Florida Table 7 Property Tax Rates -Direct and Overlapping Governments-Unaudited Last Ten Fiscal Years Mills (per $1,000 of assessed valuation) Cape Canaveral (1) Brevard Brevard School Total Direct& Overlapping Fiscal Year Library Police Fire Beautification Total County District Rates 2016 0.0635 3.4797*** 3.5432 5.8035 7.2750 16.6217 2015 0.0666 3.6580*** 3.7246 5.4589 7.3390 16.5225 2014 0.0709 1.9187 1.4390 0.4816 3.9102 5.6254 7.6060 17.1416 2013 0.0739 2.0000 1.5000 0.5000 4.0739 6.2857 8.0960 18.4556 2012 0.0739 2.0000 1.5000 0.5000 4.0739 6.2857 8.1120 18.4716 2011 0.0739 2.0000 1.5000 0.5000 4.0739 5.6752 7.6530 17.4021 2010 0.0453 1.4166 1.2715 0.3337 3.0671 4.9714 7.6870 15.7255 2009 0.0453 1.4166 1.2715 0.3337 3.0671 5.1265 7.6610 15.8546 2008 0.0453 1.4166 0.9860 0.3337 2.7816 5.0713 7.5310 15.3839 2007 0.0500 1.5620 1.0200 0.3680 3.0000 5.4375 7.6670 16.1045 [Bar Graph of:] Tax Rates for Cape Canaveral Residents 9.0000 8.0000 7.0000 6.0000 5.0000 4.0000 3.0000 2.0000 1.0000 0.0000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 ■Cape Canaveral ❑Brevard County •Brevard Schools ***2015 is the 1st year of a General Millage for Cape Canaveral (1) Millage Rate includes General Fund and Library Fund Data source: Brevard County Tax Collector -98- City of Cape Canaveral, Florida Table 8 Principal Property Taxpayers (Major Taxpayers) - Unaudited Current Year and Ten Years Ago Year Ended September 30,2016 Year Ended September 30,2007 Percent of Percent of Total City Total City Tax Taxable Tax Taxable Taxpayer Product/Service Assessed Rank Value Assessed Rank Value OLCC Florida, LLC (Cape Caribe) Time Share Dvlpmnt $185,844 1 6.36% $107,481 1 2.72% Cocoa Beach Motel Two, Inc. Hotel 30,153 2 1.03% 31,988 2 0.81% Cape Canaveral Joint Venture N/A 18,779 3 0.64% 19,749 3 0.50% Palms East of Cape Canaveral, LLC Rental Property 15,502 4 0.53% 15,577 6 0.39% Portview Inn &Suites, LLC Hotel 14,492 5 0.50% 16,968 5 0.43% C C Hotel Cab & Investors, LLC Hotel 13,298 7 0.46% Oceanside Treasure, LLC Condominium 13,021 6 0.45% 12,239 9 0.31% IAP World Services, Inc. Contractor 11,994 8 0.41% 12,795 8 0.32% Logan Commercial Office Center, LLC Rental Property 10,222 9 0.35% 8910 Astronaut, LLC Manufacturing 9,496 10 0.32% Puerto Del Rio, LLC. 13,903 7 0.35% Coastal Fuels Marketing AlA Acquisition Group, LTD., LLC 17,802 4 0.45% Total Taxes Assessed $322,799 11.05% $248,502 6.28% [Pie Chart of} TaxesAssessed to Principal Taxpayers FY 2015-2016 Source: Brevard County Tax Collector -99- City of Cape Canaveral, Florida Table 9 Property Tax Levies and Collections-Unaudited Last Ten Fiscal Years Collections Within the Fiscal Year of the Levy Total Collections to Date Taxes Levied for the Percentage of Delinquent Tax Total Amount Percentage of Fiscal Year Tax Year Amount Collected Levy Collections(1) Collected Levy 2016 $3,459,846 $3,285,438 94.96% $64,129 $3,349,567 97% 2015 3,393,383 3,280,632 96.68% 50,621 3,331,253 98% 2014 3,344,618 3,244,566 97.01% 65,851 3,310,417 99% 2013 3,338,808 3,175,256 95.10% 116,468 3,291,724 99% 2012 3,350,872 3,184,597 95.04% 89,352 3,273,949 98% 2011 3,848,393 3,701,217 96.18% 100,626 3,801,843 99% 2010 3,417,270 3,244,660 94.95% 53,324 3,297,984 97% 2009 4,120,587 3,903,224 94.72% 64,899 3,968,123 96% 2008 4,060,992 3,962,782 97.58% 20,806 3,983,588 98% 2007 4,278,807 4,103,161 95.89% 32,445 4,135,606 97% [Line Graph of] Property Tax Levies $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $- 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: Brevard County Property Appraiser and Tax Collector (1) Includes delinquent taxes,penalties and tax certificates. - 100- City of Cape Canaveral, Florida Table 10 Ratios of Outstanding Debt by Type-Unaudited Last Ten Fiscal Years Business- Type Governmental Activities Activities Revenue Capital State Total Personal Percentage Per Fiscal Note Payable Leases Revolving Income(a) of Personal Capita Year Loans Total Income (b) 2016 $ 4,480,000 $ - $ 4,107,608 $8,587,608 393,719,410 2.18% 844 2015 4,991,000 - 22,457,860 7,096,069 340,791,737 2.08% 706 2014 5,500,000 - 1,423,228 6,302,051 346,961,640 1.82% 629 2013 - - 1,417,551 1,417,551 351,582,346 0.40% 142 2012 - - 1,684,340 1,684,340 350,070,168 0.48% 170 2011 - - 2,268,987 2,268,987 319,379,658 0.71% 218 2010 - - 2,836,184 2,836,184 313,890,720 0.90% 270 2009 - - 3,386,452 3,386,452 260,994,641 1.30% 323 2008 - - 4,438,210 4,438,210 373,969,140 1.19% 417 2007 - 35,649 4,940,666 4,976,315 334,726,800 1.49% 473 Source: (a) Economic Development Commission of Florida's Space Coast (b) See Economic Development Commission Community Data for Cape Canaveral Qtr 1 2015 these ratios are calculated from this information. Note: Details regarding the City's outstanding debt are located in the Notes to Financial Statements. - 101- City of Cape Canaveral, Florida Table 11 Ratio of Net General Obligation Bonded Debt to Assessed Value and Net Bonded Debt Per Capita-Unaudited Last Ten Fiscal Years Ratio of Net Net Bonded Net Bonded Bonded Debt to Debt Per Fiscal Year Population(a) Assessed Value(b) Debt Assessed Value Capita 2016 10,171 976,221,712 - 0.00% 0.00 2015 10,049 911,269,988 - 0.00% 0.00 2014 10,022 854,722,277 - 0.00% 0.00 2013 9,987 819,560,573 - 0.00% 0.00 2012 9,926 822,683,104 - 0.00% 0.00 2011 10,426 944,852,429 - 0.00% 0.00 2010 10,491 1,114,169,772 - 0.00% 0.00 2009 10,499 1,342,062,936 - 0.00% 0.00 2008 10,635 1,695,471,375 - 0.00% 0.00 2007 10,526 1,737,951,290 - 0.00% 0.00 Source: (a) Homefacts.com (b) Brevard County Property Appraiser (Form BC-403V) - 102- City of Cape Canaveral, Florida Table 12 Direct and Overlapping Governmental Activities Debt September 30, 2016 City's Estimated Share of Debt Applicable Percentage Direct and Overlapping Governmental Unit Outstanding (1) (2) Debt Brevard County $ 89,788,697 1.77% $ 1,590,728 City of Cape Canaveral Direct Debt(Governmental Activities) Revenue Note 4,480,000 Total Direct and Overlapping Debt $ 6,070,728 (1) Source:Brevard County Comprehensive Annual Financial Report.Table 12 (2) Based on 2015 population.Cape Canaveral vs Brevard County Source: (a) Homefacts.com (b) Brevard County Property Appraiser (Form BC-403V) - 103- City of Cape Canaveral, Florida Table 13 Pledged Revenue Coverage-Wastewater System-Unaudited Last Ten Fiscal Years Direct Operating Expenses Debt Coverage Debt Service Debt Service (Excluding Operating Fiscal Revenues Requirements Coverage Depreciation) Coverage Year (a) (b) (c) (d) (e) 2016 $ 4,099,508 $ 229,370 17.87 $ 1,903,323 9.57 2015 3,732,961 649,383 5.75 1,952,830 2.74 2014 3,569,928 649,383 5.50 1,946,033 2.50 2013 3,363,595 649,383 5.18 2,040,297 2.04 2012 3,602,765 649,383 5.55 2,101,172 2.31 2011 3,376,100 641,383 5.26 2,022,564 2.11 2010 3,191,341 644,579 4.95 2,240,191 1.48 2009 2,988,288 644,727 4.63 2,322,703 1.03 2008 2,778,882 644,853 4.31 2,167,963 0.95 2007 2,937,665 649,383 4.52 2,092,434 1.30 [Bar Graph of] Coverage Ratio 5.00 4.00 3.00 2.00 1.00 0.00 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Notes: (a) Total debt coverage revenues and connection fees (b) Total operating expenses net of depreciation (c) Debt Service Coverage based on Operating Revenues (d) Required coverage is 1.25 for Bonds (1.15 and 1.20 for state loans) - 104- City of Cape Canaveral, Florida Table 14 Demographic Statistics-Unaudited Last Ten Fiscal Years Unemployment Per Capita Personal Median Household School Fiscal Population Median Age Rate Income Income Enrollment Year (a) (a) (a) (a) (a) (b) 2016 10,171 53.7 5.5% $ 38,710 $ 44,768 427 2015 10,049 53.6 6.0% 33,913 41,222 369 2014 10,022 52.5 6.4% 34,620 45,577 369 2013 9,987 48.3 7.9% 35,204 43,881 368 2012 9,926 48.3 9.9% 35,268 46,060 375 2011 10,426 50.0 11.1% 30,633 40,468 362 2010 10,491 49.2 11.4% 29,920 40,009 367 2009 10,499 48.4 10.0% 24,859 46,279 365 2008 10,635 48.4 6.5% 35,164 50,261 369 2007 10,526 48.4 4.4% 31,800 46,335 324 [Line Graph for] [Line Graph for] Population Per Capita Income 11,000 38,000 10,500 36,000 10,000 34,000 9,500 32,000 9,000 30,000 8,500 28,000 8 000 26,000 24,000 22,000 20,000 Source: (a) Economic Development Commission of Florida's Space Coast-Median age unavailable for 2013. 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S. \ \ \ !cn / ! 7 7 7 t \ j & / \ m / k § m , = y , § @ ° ) ■ 2G v & \ 0 E \ Q 4 4-I G 2 § .§ § § § Q ƒ = / \ / 2 } § b \ j ) / 0 % 5 / / \ E j m / j _ - _ , o § & -- ;_1 k ? 7 ` \ 0 \ , © / § § % ƒ \ en j / & ) ( ) et q _ a) 2 w U 2 \ \ § \ -e-',:: \ E \ 0 ) % C..) \ 7.ct \ \ s. \ \ 0 ccl W 2 } \ \ \ I © / j \ . / \ H \ 0 \ \ \ \ \ o 0 City of Cape Canaveral, Florida Table 20 Water and Wastewater Rates-Unaudited Last Ten Fiscal Years Water Wastewater Monthly Base Rate per 1,000 Monthly Base Rate per 1,000 Fiscal Year Rate Gallons Rate Gallons 2016 $ 15.32 $ 3.28 $ 19.35 $ 5.64 2015 14.59 3.04 18.43 5.37 2014 14.59 3.04 17.54 5.11 2013 13.89 3.01 16.70 4.86 2012 13.23 2.89 15.82 4.60 2011 12.54 2.61 14.93 4.34 2010 11.62 2.41 14.08 4.09 2009 11.52 2.31 13.27 3.85 2008 11.52 2.31 12.51 3.63 2007 10.01 2.01 11.45 3.42 Note: Rates are based on 3/4"meter,the standard household meter size. Source: City of Cape Canaveral, Financial Services Department Note: In accordance with Inter-Municipality Agreement,Water&Other Services provided to City of Cape Canaveral billed by City of Cocoa Water Department. Wastewater is City of Cape Canaveral's revenue; Water is City of Cocoa's Revenue. - 111 - City of Cape Canaveral, Florida Table 21 Construction,Property Value and Bank Deposits-Unaudited Last Ten Fiscal Years Commercial Residential (b) (c) Construction (a) Construction (a) Bank Fiscal #of #of Brevard County Real and Deposits Year Units Value Units Value Personal Property Taxable Value (in thousands) 2016 2 $280,025 5 $1,594,464 $ 29,684,313,125 n/a 2015 1 1,299,738 31 466,392 27,990,267,285 n/a 2014 1 557,455 - - 25,745,155,761 n/a 2013 0 - 4 877,749 24,626,876,502 n/a 2012 0 - 2 401,774 24,922,195,924 n/a 2011 0 - 2 436,946 29,089,009,692 n/a 2010 0 - 1 253,243 33,330,608,859 9,293,940 2009 0 - 7 1,594,097 38,013,415,731 9,112,122 2008 4 3,683,089 11 2,315,049 40,973,507,774 9,069,186 2007 3 5,296,641 25 7,191,839 39,375,931,246 8,423,971 [Bar Graph of] Commercial and Residential Building Permits 8 7 6 5 4 3 2 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 •Commercial ■Residential Data source: (a) City of Cape Canaveral Building Department (b) Brevard County Tax Collector (c) Florida Bankers Association(figures are for Brevard County) -112- City of Cape Canaveral, Florida Table 22 Miscellaneous Statistics-Unaudited September 30, 2015 Date of Incorporation May 16, 1963 Form of Government Council-Manager Area/Square Miles 1.9 sq.miles Miles of Streets: Paved 21.8 miles Unpaved .2 miles Street Lights 645 Fire Protection: Number of Stations 1 Number of Firefighters (volunteer) 15 Number of Firefighters (paid) 35 Police Protection: Number of Stations 1 Number of Police Officers 29 Recreation: Parks-acres 26.99 Number of special use facilities 2 Number of neighborhood parks 8 Undeveloped land, dedicated for recreation use (acres) 7.88 Wastewater Gravity Sewer mains 16.8 miles Force mains 2.8 miles Storm sewers 9.5 miles Reclaim lines 14 miles Number of reuse accounts 702 Number of accounts (wastewater) 2751 Schools: Elementary 1 Building Permits Issued 1184 Number of City Employees (excluding police officers and firefighters) 49.9 - 113 - THIS PAGE INTENTIONALLY LEFT BLANK. - 114 - Single Audit and Other Reports - 115 - THIS PAGE INTENTIONALLY LEFT BLANK. - 116 - CITY OF CAPE CANAVERAL, FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE FOR THE YEAR ENDED SEPTEMBER 30, 2016 CFDA/ Federal or State Grantor/Pass- CSFA Contract/ Through Grantor/Program Title Number Grant Number Expenditures FEDERAL AWARDS U.S.Federal Environmental Protection Agency Passed through Florida Department of Environmental Protection Nonpoint Source Implementation Grants 66.460 LP05052 $ 456,489 U.S.Department of Transportation Passed through Florida Depatlment of Transportation Highway Planning and Construction 20.205 ARR91 1,427,636 Total Federal Awards $ 1,884,125 STATE FINANCIAL ASSISTANCE State of Florida Department of Environmental Protection Direct Programs: Wastewater Treatment Facility Construction 37.077 WW050500 $ 2,004,361 Statewide Surface Restoration Projects 37.039 LP05052 414,515 Florida Recreation Development Assistance Program 37.017 A6088 50,000 Total State Financial Assistance $ 2,468,876 The accompanying notes to the schedule of expenditures of federal awards and state financial assistance are an integral part of this schedule. - 117- CITY OF CAPE CANAVERAL, FLORIDA NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE FOR THE YEAR ENDED SEPTEMBER 30, 2016 (1) Basis of Presentation: The accompanying Schedule of Expenditures of Federal Awards and State Financial Assistance include the federal award and state financial assistance activity of City of Cape Canaveral, Florida. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and Section 215.97, Florida Statutes. Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position,changes in net position,or cash flows of the City. (2) Summary of Significant Accounting Policies: Expenditures reported on the schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-122, Cost Principles for Non-Profit Organizations, or the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. No amounts were passed through to subrecipients during the fiscal year ended September 30,2016. (3) De Minimis Indirect Cost Rate Election: The City did not elect to use the 10% de minimis indirect cost rate as covered in §200.414, Indirect (F&A) costs,of the Uniform Guidance. - 118 - CITY OF CAPE CANAVERAL, FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED SEPTEMBER 30, 2016 A. Summary of Auditors' Results: Financial Statements: Type of audit report issued on the financial statements: Unmodified Internal control over financial reporting: Material weakness(es) identified? yes X no Significant deficiency(ies)identified? X yes none reported Noncompliance material to financial statements noted? X yes no Federal Awards: Internal control over major Federal programs: Material weakness(es) identified? yes X no Significant deficiency(ies)identified? yes X none reported Type of auditor's report issued on compliance for major Federal programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? yes X none reported Auditee qualified as a low-risk auditee? yes X no Dollar threshold used to distinguish between type A and type $750.000 B programs: Identification of major Federal programs: CFDA Number Program Name 20.205 Highway Planning and Construction State Financial Assistance: Internal control over major State projects: Material weakness(es) identified? yes X no Significant deficiency(ies) identified? yes X none reported - 119 - Type of auditor's report issued on compliance for major State projects: Unmodified Any audit findings disclosed that are required to be reported for state fmancial assistance projects in accordance with Chapter 10.550? yes X none reported Dollar threshold used to distinguish between type A and type B programs: $300.000 Identification of major State projects: CSFA Number Project Name 37.039 Statewide Surface Water Restoration 37.077 Water Treatment Facility Construction B. Financial Statement Findings: 2016-001 Grant-Funded Retainage Payable Criteria: Generally accepted accounting standards dictate that intergovernmental revenues for grant reimbursements should be recognized in the same period as the related expenditures occur. Condition: We noted actual expenditures in the Capital Construction Fund included $82,000 of amounts still outstanding in retainage payable related to a grant-funded project. In reconciling these expenditures to the related grant revenues, we noted no provision had been made to record the revenue associated with these costs. As a result, a significant audit adjustment was required to record the unbilled grant receivable and intergovernmental revenue related to these expenditures Cause: The grant expenditures were not reconciled to the related revenues to ensure all related reimbursements had been accrued,whether billed or unbilled. Effect: Had the audit adjustment not been recorded, revenues and fund balance would have been significantly understated. Recommendation: We recommend all grant expenditures be reconciled to the related revenues on no less than an annual basis to ensure all grant-related items are recorded in the proper accounting period. 2016-002 Interfund Activity and Budgetary Comoliance Criteria: Generally accepted accounting standards establish recognition and measurement criteria for interfund transaction, including long-term advances. Florida Statutes and the City Charter require the City to approve an annual budget for the Cape Canaveral CRA fund and for expenditures and transfers out to stay within the confines of the approved budget. Condition: During the year, the City Council approved a $470,000 advance from the Wastewater Fund to the Cape Canaveral CRA Fund(the CRA)to fund an interfund transfer from the CRA Fund to the Wastewater Fund for the CRA's contribution toward a wastewater project in the CRA District. However,no accounting entry was made at the time of the Resolution's approval to record the transaction. As a result, a significant audit adjustment was required to correct the recording of this transaction and record the interfund transfer and advance. This adjustment also resulted in the CRA Fund's transfers out exceeding the approved budget. - 120- Cause: The interfund transfer and advance was not recorded properly upon the approval of the related resolution by the City Council. As a result, the necessary budget amendment was not identified or made. Effect: Had the audit adjustment not been recorded, ending fund balance and net position in the CRA Fund and Wastewater Fund would have been significantly misstated, and the advance to/from the two funds would not have been established consistent with the resolution approved by the City Council. Recommendation: We recommend all one-time or otherwise unusual transactions be reviewed in detail and any uncertainties be resolved at the time of recording the initial transaction to ensure all elements of the activity are properly identified and recorded. C. Federal Awards Programs Findings and Questioned Costs: None D. State Financial Assistance Projects Findings and Questioned Costs: None E. Prior Audit Findings: None F. Corrective Action Plan: Not applicable as no findings have been reported. - 121 - [logo] James Moore Certified Public Accountants and Consultants INDEPENDENT AUDITORS' REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND STATE PROJECT AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH THE UNIFORM GUIDANCE AND CHAPTER 10.550, RULES OF THE AUDITOR GENERAL To the Honorable Mayor, City Council, and City Manager, City of Cape Canaveral, Florida: Report on Compliance for Each Major Federal Program and State Project We have audited City of Cape Canaveral, Florida's (the City) compliance with the types of compliance requirements described in the U.S. Office of Management and Budget Compliance Supplement, and the Florida Department of Financial Services State Project Compliance Supplement that could have a direct and material effect on each of the City's major federal programs and state projects for the year ended September 30, 2016. The City's major federal programs and state projects are identified in the summary of auditors' results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal program and state projects. Auditors'Responsibility Our responsibility is to express an opinion on compliance for each of the City's major federal programs and state projects based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), and Chapter 10.550, Rules of the Florida Auditor General. Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program or state project occurred. An audit includes examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program and state project.However,our audit does not provide a legal determination of the City's compliance. - 122 - 121 Executive Circle 5931 NW 1st Place 2477 Tim Gamble Place,Suite 200 Daytona Beach, FL 32114.1180 Gainesville,FL 32607-2063 Tallahassee,FL 32308-4386 Telephone: 386/257-4100 Telephone:352/378-1331 Telephone:850/386-6184 Fax:386/255-3261 Fax:352/372-3741 Fax:850/422-2074 dab@jmco.com gnv@jmco.com tlh@jmco.com Member of AGN International with offices in principal cities worldwide Opinion on Each Major Federal Program and State Project In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs and state projects for the year ended September 30,2016. Report on Internal Control over Compliance Management of the City is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs and state projects. In planning and performing our audit, we considered the City's internal control over compliance with the requirements that could have a direct and material effect on a major federal program or state project to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with the Uniform Guidance and Chapter 10.550, Rules of the Auditor General, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a State project on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program or state project will not be prevented,or detected and corrected,on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program or state project that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance and Chapter 10.550, Rules of the Florida Auditor General. Accordingly, this report is not suitable for any other purpose. [signature] James Moore & Co., P.L. Daytona Beach, Florida February 8, 2017 - 123 - [Logo] JamesMoore Certified Public Accountants and Consultants INDEPENDENT AUDITORS' 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 To the Honorable Mayor, City Council, and City Manager, City of Cape Canaveral,Florida: We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Cape Canaveral, Florida, (the City) as of and for the year ended September 30, 2016, and the related notes to the fmancial statements,which collectively comprise the City's basic financial statements, and have issued our report thereon dated February 8,2017. Internal Control over Financial Reporting In planning and performing our audit of the financial statements,we considered the City's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be material weaknesses or significant deficiencies, and therefore, material weaknesses or significant deficiencies may exist that are not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses. However,material weaknesses may exist that have not been identified.We did identify certain deficiencies in internal control, described in the accompanying schedule of findings and questioned costs as item 2016-001 and 2016-002,that we consider to be significant deficiencies. - 124- 121 Executive Circle 5931 NW 1st Place 2477 Tim Gamble Place,Suite 200 Daytona Beach,FL 32114-1180 Gainesville,FL 32607-2063 Tallahassee,FL 32308-4386 Telephone:386/257-4100 Telephone:352/378-1331 Telephone:850/386-6184 Fax:386/255-3261 Fax:352/372-3741 Fax:850/422-2074 dab@jmco.com gnv@jmco.com tlh@jmco.com Member ofAGN International with offices in principal cities worldwide Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts,and grant agreements,noncompliance with which could have a direct and material effect on the determination of fmancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed one instance of noncompliance or other matters that is required to be reported under Government Auditing Standards, and which is described in the accompanying schedule of findings and questioned costs as item 2016-002. We noted certain matters that we reported to the City Commission and management of the City in a separate letter dated February 8,2017. City of Cape Canaveral,Florida's Response to Findings The City's response to the findings identified in our audit is described in the accompanying management's response as listed in the table of contents. The City's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. [signature] James Moore & Co., P.L. Daytona Beach, Florida February 8, 2017 - 125 - [Logo] JamesMoore Certified Public Accountants and Consultants INDEPENDENT AUDITORS' MANAGEMENT LETTER REQUIRED BY CHAPTER 10.550,RULES OF THE STATE OF FLORIDA OFFICE OF THE AUDITOR GENERAL To the Honorable Mayor, City Council, and City Manager, City of Cape Canaveral, Florida Report on the Financial Statements We have audited the financial statements of the City of Cape Canaveral, Florida (the City), as of and for the fiscal year ended September 30,2016, and have issued our report thereon dated February 8,2017. Auditors' Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements of Federal Awards(Uniform Guidance); and Chapter 10.550,Rules of the Florida Auditor General. Other Reports and Schedule We have issued our Independent Auditors' Report on Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards; Independent Auditors' Report on Compliance for Each Major Federal Program and State Project and Report on Internal Control over Compliance in accordance with the Uniformed Guidance and Chapter 10.550, Rules of the Florida Auditor General; Schedule of Finding and Questioned Costs; and Independent Accountants' Examination Report on an examination conducted in accordance with AICPA Professional Standards, Section 601, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Florida Auditor General. Disclosures in those reports and schedule, which are dated February 8, 2017, should be considered in conjunction with this management letter. Prior Audit Findings Section 10.554(1)(i)1.,Rules of the Auditor General,requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. Corrective actions have been taken to address findings and recommendations (2015-001 — Administrative Access)made in the preceding annual financial audit report. Official Title and Legal Authority Section 10.554 (1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. The legal authority for the primary government of the reporting entity is disclosed in Note 1 of the basic financial statements. - 126- 121 Executive Circle 5931 NW 1st Place 2477 Tim Gamble Place,Suite 200 Daytona Beach, FL 32I14-1180 Gainesville,FL 32607-2063 Tallahassee,FL 32308-4386 Telephone:386/257-4100 Telephone:352/378-1331 Telephone:850/386-6184 Fax:3861255-3261 Fax:352/372-3741 Fax:850/422-2074 dab@ijmco.com gnv@jmco.com tlh@jmeo.com Member of AGA,International with offices in principal cities worldwide Financial Condition Section 10.554 (1)(i)5.a. and 10.556(7), Rules of the Auditor General, require that we apply appropriate procedures and report the results of our determination as to whether or not the City has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and identification of the specific conditions met. In connection with our audit, we determined that the City did not meet any of the conditions described in Section 218.503(1),Florida Statutes. Pursuant to Sections 10.554(1)(i)5.c. and 10.556(8), Rules of the Auditor General, we applied financial condition assessment procedures. It is management's responsibility to monitor the City's financial condition, and our financial condition assessment was based in part on representations made by management and the review of financial information provided by same. Annual Financial Report Section 10.554(1)(i)6.b. and 10.556(7), Rules of the Auditor General, requires that we apply appropriate procedures and report the results of our determination as to whether the annual financial report for the City, for the fiscal year ended September 30, 2016, filed with the Florida Department of Financial Services pursuant to Section 218.32(1)(a),Florida Statutes,is in agreement with the annual financial audit report for the fiscal year ended September 30, 2016. In connection with our audit, we determined these two reports were in agreement. Other Matters Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the fmancial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit,we did not have any such fmdings. Purpose of this Letter Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, and applicable management and the City Council, and is not intended to be and should not be used by anyone other than these specified parties. [signature] James Moore & Co., P.L. Daytona Beach,Florida February 8, 2017 - 127- [logo] James Moore Certified Public Accountants and Consultants INDEPENDENT ACCOUNTANTS' EXAMINATION REPORT To the Honorable Mayor, City Council, and City Manager, City of Cape Canaveral, Florida We have examined the City of Cape Canaveral, Florida's (the City) compliance with Section 218.415, Florida Statutes, Local Government Investment Policies, for the year ended September 30, 2016. Management is responsible for the City's compliance with those requirements. Our responsibility is to express an opinion on the City's compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the City's compliance with specified requirements. In our opinion, the City of Cape Canaveral, Florida complied, in all material respects, with the aforementioned requirements for the year ended September 30, 2016. [signature] James Moore & Co., P.L. Daytona Beach, Florida February 8, 2017 - 128- 121 Executive Circle 5931 NW 1st Place 2477 Tim Gamble Place,Suite 200 Daytona Beach, FL 32114-1180 Gainesville, FL 32607-2063 Tallahassee, FL 32308-4386 Telephone: 386/257-4100 Telephone: 352/378-1331 Telephone: 850/386-6184 Fax: 3861255-3261 Fax: 352/372-3741 Fax: 850/422-2074 dab@jmco.com gnv@jmco.com tlh@jmeo.com Member of AGN International with offices in principal cities worldwide THIS PAGE INTENTIONALLY LEFT BLANK. - 129 - [City Seal] City of Cape Canaveral Management's responses to auditor findings are as follows: 2016-001 Grant-Funded Retainage Payable — The Financial Services Department will ensure that when expenditures for an outstanding retainage payable related to a grant—funded project is expensed, a corresponding entry for an unbilled receivable will be entered into the accounting system during the same Fiscal Year which will ensure accurate reporting of revenue and fund balance. 2016-002 Interfund Activity and Budgetary Compliance—The Financial Services Department will ensure that any interfund transfer and advance is recorded at the time of Resolution approval and expensed to the CRA. Resolution No. 2015-04 was approved by the City Council for a $470,000 loan to the CRA, from the Wastewater Fund to fund a wastewater project. At that time, a debt repayment schedule was recorded in the CRA as stated in the resolution and the $470,000 expense was recorded in the Enterprise Capital Fund. The CRA has already paid two years of a 10 year loan. - 130- 105 Polk Avenue • Post Office Box 326 • Cape Canaveral, FL 32920-0326 Telephone: (321) 868-1220 - FAX: (321) 868-1248 www.cityofcapecanaveral.org • email: info@cityofcapecanaveral.org Item No. 1 CITY COUNCIL REGULAR MEETING CAPE CANAVERAL LIBRARY MEETING ROOM 201 Polk Avenue,Cape Canaveral, Florida TUESDAY January 17, 2017 6:00 PM MINUTES CALL TO ORDER: The Chair called the Meeting to Order at 5:59 P.M. Council Member Rocky Randels led the pledge of allegiance. ROLL CALL: Council Members Present: Council Member Mike Brown Mayor Bob Hoog Mayor Pro Tem Brendan McMillin Council Member Rocky Randels Council Member Betty Walsh Others Present: City Manager David Greene City Attorney Anthony Garganese City Clerk Mia Goforth Administrative/Financial Services Director John DeLeo Human Resources/Risk Management Director Jane Ross Capital Projects Director Jeff Ratliff Community Development Director David Dickey Culture and Leisure Services Director Gustavo Vergara Economic Development Director Todd Morley Public Works Services Director Ralph Lotspeich Community Engagement/Deputy Public Works Services Director Joshua Surprenant Brevard County Sheriff's Office Commander Alan Moros PUBLIC PARTICIPATION: None. PRESENTATIONS/INTERVIEWS: Recognition of Tim Carlisle for bravery and quick action during an apartment fire on November 7, 2016 at 112 Buchanan Avenue: Mayor Hoog spoke of life- saving actions taken by PWS Infrastructure Maintenance Supervisor Tim Carlisle who reported an apartment fire and assisted a woman who was in danger. Public Works Services Director Lotspeich and Community Engagement/Deputy Public Works Services Director Surprenant expressed appreciation and presented Mr. Carlisle with an inscribed gift clock from the City. Mr. Carlisle thanked the City Council and Staff. City of Cape Canaveral, Florida City Council Regular Meeting December 20, 2016 Page 2 of 4 Presentation of Key to the City to Melanie and Rick Evans and proclaiming January 17, 2017 as Melanie and Rick Evans Day: Mayor Hoog read and presented the proclamation for Melanie and Rick Evans Day as Culture and Leisure Services Director Vergara, Recreation Leader Mary Jane Binney and Brevard County Police Athletic League (PAL) Members joined the Evans' at the podium. They received a Key to the City plaque for their frequent volunteerism and financial generosity to the community. Mrs. Evans expressed thanks, spoke regarding her PAL involvement and praised PAL kids' contributions to the community. CONSENT AGENDA: Mayor Hoog inquired if any items were to be removed from the Consent Agenda for discussion.No items were removed. 1. Approve Minutes for December 20, 2016 Regular City Council Meeting. A motion was made by Council Member Walsh, seconded by Mayor Pro Tem McMillin, to approve the Consent Agenda. The motion carried 5-0 with voting as follows: Council Member Brown, For; Mayor Hoog, For; Mayor Pro Tem McMillin, For; Council Member Randels,For and Council Member Walsh, For. PUBLIC HEARINGS: 2. Ordinance No. 01-2017; amending Chapter 6, Article III of the Cape Canaveral City Code to clarify that drinking, consumption or possession of open containers of alcoholic beverages upon public dune crossovers is unlawful; providing for penalties for violations of Chapter 6, Article III of the Cape Canaveral City Code, including a Class I Civil Citation penalty; providing for the repeal of prior inconsistent ordinances and resolutions; incorporation into the City Code; severability and an effective date, second reading: City Attorney Garganese read the title into the record and explained the item. Mayor Hoog clarified this action does not pertain to alcohol on the beach. The Public Hearing was opened. There being no comment the Public Hearing was closed. A motion was made by Council Member Randels, seconded by Council Member Mayor Pro Tem McMillin, for approval of Ordinance No.01-2017 at second reading.The motion carried 5-0 with voting as follows: Council Member Brown, For; Mayor Hoog, For; Mayor Pro Tem McMillin, For; Council Member Randels, For and Council Member Walsh, For. 3. Ordinance No. 02-2017; amending Appendix B of the City Code, related to assessment of Building Permit fees; providing for the repeal of prior inconsistent ordinances and resolutions; incorporation into the Code; severability and an effective date, second reading: City Attorney Garganese read the title into the record and explained the item. Discussion ensued and included the International Building Code, appraisals, permit fees and higher costs for building materials in Florida, how this action will protect the citizens and how no profit is made from building permit fees. The Public Hearing was opened. There being no comment the Public Hearing was closed. A motion was made by Mayor Pro Tem McMillin, seconded by Council Member Walsh, for approval of Ordinance No. 02-2017 at second reading. The motion carried 5-0 with voting as follows: Council Member Brown, For; Mayor Hoog, For; Mayor Pro Tem McMillin, For; Council Member Randels, For and Council Member Walsh, For. City of Cape Canaveral, Florida City Council Regular Meeting December 20, 2016 Page 3 of 4 4. Ordinance No. 03-2017; amending Sections 50-4 and 2-283 of the Cape Canaveral City Code regulating sleeping and camping upon public streets and sidewalks, beach end streets, beach dune crossovers, beaches and parks; providing for procedures to remove personal property remaining in camp sites; providing for penalties; and providing for the repeal of prior inconsistent ordinances and resolutions, incorporation into the City Code; severability and an effective date, first reading: City Attorney Garganese read the title into the record, explained how the Ordinance works, the Constitutional issues and necessities that have to be addressed regarding enforcement and evolving case law. Discussion ensued and included: available shelters, personal property left by homeless people or any person, procedures and protocol of enforcement and what happens when the homeless are encountered on the beach. Commander Alan Moros described how procedures and rules are carried out now. More discussion ensued regarding the CETA Mission in Melbourne being the nearest shelter unless the weather temperature drops and then the Sharing Center in Cocoa opens; how the courts look at the life necessities of the homeless; the Brevard Coalition of the Homeless and how close some people are to homelessness. The Public Hearing was opened. There being no comment, the Public Hearing was closed. A motion was made by Mayor Pro Tem McMillin, seconded by Council Member Brown, for approval of Ordinance No. 03-2017, first reading. The motion carried 5-0 with voting as follows: Council Member Brown, For; Mayor Hoog, For; Mayor Pro Tem McMillin, For; Council Member Randels, For and Council Member Walsh, For. ITEMS FOR ACTION: 5. Authorize removal of two (2) Specimen Trees at 110 & 112 Ocean Garden Lane at a mitigation ratio of one-to-one: Discussion ensued and included: the pros and cons for approval of the Item and mitigation on the City's part; replacement of the trees instead of resorting to the Tree Bank onsite or on public property; the City's formula on tree size; other trees on the property that are not coming down. A motion was made by Council Member Randels for approval of the request as outlined. Discussion continued regarding the Item. City Manager Greene explained ratios, costs and alternatives. He stated that if City Council prefers, Staff could work on a more stringent ordinance. The motion was seconded by Mayor Pro Tem McMillin. The motion carried 5-0 with voting as follows: Council Member Brown, For; Mayor Hoog, For; Mayor Pro Tem McMillin, For; Council Member Randels, For and Council Member Walsh, For. REPORTS: City Manager Greene provided an update on the graffiti issues, how the Brevard County Sheriff's Office and Staff are actively monitoring the situation and remain engaged. He stated Staff is working on the PACE (Property-Assessed Clean Energy) Program involving sustainability issues and it is tentatively scheduled to appear on the February City Council Meeting Agenda; in addition he urged people to be mindful of the balance between the amount of emails Staff receives and allowing Staff the time to do the jobs for which they are employed. Council Member Walsh thanked City Manager Greene for the update; and stated she shared the Brevard County Sheriff's Office non-emergency phone number and the "Report a Concern" link City of Cape Canaveral, Florida City Council Regular Meeting December 20, 2016 Page 4 of 4 from the City website on Social Media to assist the community in reporting graffiti and other items directly instead of just Facebook. Council Member Randels shared his involvement with a variety of events and meetings throughout Brevard County; reported he took part in a Smart Growth America national webinar in which he learned Brevard County ranks number two nationwide in pedestrian accidents and deaths. He expressed thanks to the Evans'. Council Member Brown announced registration for the 2017 Mayors' Fitness Challenge has been extended until Friday, January 20, 2017; thanked Commander Moros and the Brevard County Sheriffs Office for the quick response to a burglary at Bayport; mentioned he will be taking a trip to Tallahassee in the near future with other voting delegates of the Space Coast League of Cities and will be recommending items to legislators such as supporting the Indian River Lagoon, opposing a firefighters presumptive cancer bill,supporting protection of all local revenue for cities, opposing the amendment to election law to choose arbitrary election dates for city officials and will be seeking funds for building a new Brevard County Emergency Management Office. Mayor Pro Tem McMillin expressed thanks to Mr. and Mrs. Evans; encouraged reading the City's Weekly Updates; stated he is enrolling in next year's LEAD (Lead Engage Achieve Develop) Brevard Program. He stated he looks forward to working with Staff regarding the City's tree program and homelessness issues. Mayor Hoog encouraged members of PAL to join the Mayors' Fitness Challenge and explained the event involves competing with other cities, mentioned attending the Florida Beer Company celebration with the new owners out of Trinidad,their goal being to double the size of the operation in Cape Canaveral. He thanked Mr. and Mrs. Evans. ADJOURNMENT: There being no further business, the Meeting adjourned at 6:58 P.M. Mia Goforth, CMC, City Clerk Bob Hoog, Mayor [City Seal] City of Cape Canaveral City Council Agenda Form City Council Meeting Date: 2/21/2017 Item No. 2 Subject: Resolution No. 2017-02; in support of the 'Safe Cities, Safe Florida' initiative through the Florida League of Cities, Inc. during the fiscal year 2016-2017; providing for the repeal of prior inconsistent resolutions; severability and an effective date. Department: City Clerk's Office Summary: The City of Cape Canaveral is a member of the Florida League of Cities, Inc. (FLC), an organization charged with promoting the best interests of local municipalities at the State level. FLC has initiated an effort titled 'Safe Cities, Safe Florida' as a way to encourage communication and cooperation across municipal jurisdictions and their first-responders to promote safer communities. This effort comprises education, partnerships, brainstorming and lessons learned that can help bring about better practices and fresh ideas to prepare for the ever- changing relationship between local governments, first-responders and their communities. One part of this effort is for member municipalities to share stories and experiences that demonstrate ways first-responders have protected their community and promoted a safe environment. FLC encourages all agencies to contact Holly McPhail at hmcphail@flcities.com to help fill their resource portal. The City of Cape Canaveral experienced such an event recently with the onslaught of Hurricane Matthew; members of Canaveral Fire Rescue and Brevard County Sheriff's Office Canaveral Precinct chose to remain in the City to monitor/minimize damage and criminal acts that oftentimes occur during a natural disaster. It was during this time that Canaveral Precinct deputies apprehended two looters in the City at the peak of the storm and several members of Canaveral Fire Rescue went above-and-beyond with actions that saved the life of a Coast Guard officer at Port Canaveral. These incidents are examples of stories that could be submitted to FLC. Resolution No. 2017-02 (attached) is a response to FLC President Susan Haynie's request for member municipalities to each pass a Resolution in support of 'Safe Cities, Safe Florida'. Submitting Department Director: Mia Goforth [initials: MG] Date: 2/1/17 Attachment: Resolution No. 2017-02. Financial Impact: Staff time and effort to prepare this Agenda Item. Reviewed by Administrative/Financial Services Director: John DeLeo [initials: JD] Date: 2/1/17 The City Manager recommends that City Council take the following action: Adopt Resolution No. 2017-02. Approved by City Manager: David L. Greene [initials: DLG] Date: 2/1/17 RESOLUTION NO. 2017-02 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CAPE CANAVERAL,BREVARD COUNTY, FLORIDA; IN SUPPORT OF THE 'SAFE CITIES, SAFE FLORIDA' INITIATIVE THROUGH THE FLORIDA LEAGUE OF CITIES, INC. DURING THE FISCAL YEAR 2016-2017; PROVIDING FOR THE REPEAL OF PRIOR INCONSISTENT RESOLUTIONS; SEVERABILITY AND AN EFFECTIVE DATE. WHEREAS,Florida's municipalities provide extensive services to citizens,residents and visitors each day and these services cover many aspects of the public's health, safety and welfare; and WHEREAS, as the elected officials for the City of Cape Canaveral, we share a vision for providing excellence in every service area and are committed to proactive preparation for, and rapid response to, threats, crises, emergencies and concerns impacting that same health, safety and welfare across all sectors of our City; and WHEREAS,the Florida League of Cities,Inc. (FLC)will focus on aspects of safety across the service spectrum during the Fiscal Year 2016-2017 and our City joins with each FLC member government in this program; and WHEREAS, local governments across the United States are similarly joined in this quest due to economic, societal, environmental and other demands; and in this initiative, FLC President Susan Haynie has challenged the League's leadership and membership to devote its resources to determining how we can best meet these demands, each one directly and with all energies; and WHEREAS,we pledge to actively participate in this effort by sharing knowledge,joining collaboratively in learning and being catalysts for communicating our findings so that all of Florida is improved by this timely endeavor. NOW, THEREFORE, BE IT DULY RESOLVED BY THE CITY COUNCIL OF THE CITY OF CAPE CANAVERAL, BREVARD COUNTY, FLORIDA, AS FOLLOWS: Section 1. Recitals. The foregoing recitals are deemed true and correct and are hereby incorporated herein by this reference as a material part of this Resolution. Section 2. Pledge of support for 'Safe Cities, Safe Florida' to President Haynie and the FLC Board of Directors and commit to active participation in this initiative. Section 3. Commitment to sharing knowledge, best practices and our unique information; and further agree to serve as a communications catalyst and source for the same. Section 4. Repeal of Prior Inconsistent Resolutions. All prior resolutions or parts of resolutions in conflict herewith are hereby repealed to the extent of the conflict. City of Cape Canaveral Resolution No.2017-02 Page 1 of 2 Section 5. Severability. If any section, subsection, sentence, clause, phrase, word, or portion of this Resolution is for any reason held invalid or unconstitutional by any court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision and such holding shall not affect the validity of the remaining portion hereto. Section 6. Effective Date.This Resolution shall become effective immediately upon adoption by the City Council of the City of Cape Canaveral, Florida. ADOPTED at a Regular Meeting of the City Council of the City of Cape Canaveral, Florida, assembled this 21st day of February, 2017. Bob Hoog, Mayor ATTEST: Name FOR AGAINST Mike Brown Mia Goforth, CMC, Bob Hoog City Clerk Brendan McMillin Rocky Randels Betty Walsh Approved as to legal form and sufficiency For the City of Cape Canaveral only by: Anthony A. Garganese, City Attorney City of Cape Canaveral Resolution No.2017-02 Page 2 of 2 [City Seal] City of Cape Canaveral City Council Agenda Form City Council Meeting Date: 2/21/2017 Item No. 3 Subject: Resolution No. 2017-03; commending the Florida Association of City Clerks for its 45th Anniversary; providing for the repeal of prior inconsistent resolutions; severability and an effective date. Department: City Clerk's Office Summary: In 1972, The Florida Association of City Clerks (FACC)was established with the intent of promoting/developing educational and professional standards for municipal clerks in Florida. FACC works closely with the International Institute of Municipal Clerks (IIMC), focusing on the objectives of educating clerks, increasing efficiency of clerical functions within municipal governments, improving cooperation with municipal administrators and providing certification titles of Certified Municipal Clerk (CMC)and Master Municipal Clerk (MMC). FACC is comprised of more than 575 members statewide, over 300 of which have earned certifications of CMC or MMC. FACC also hosts seminars, webinars, conferences and academies that provide members the education and training necessary to acquire certification through IIMC. As FACC is celebrating its 45th anniversary in 2017, they have requested each municipality to pass a resolution (attached) acknowledging this milestone. Submitting Department Director: Mia Goforth [initials: MG] Date: 2/7/17 Attachment: Resolution No. 2017-03 Financial Impact: Staff time and effort to prepare this Agenda Item. Reviewed by Administrative/Financial Services Director: John DeLeo [initials: JD] Date: 2/7/17 The City Manager recommends that City Council to take the following action: Adopt Resolution No. 2017-03. Approved by City Manager: David L. Greene [initials: DLG] Date: 2/7/17 RESOLUTION NO. 2017-03 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CAPE CANAVERAL, BREVARD COUNTY,FLORIDA; COMMENDING THE FLORIDA ASSOCIATION OF CITY CLERKS FOR ITS 45TH ANNIVERSARY; PROVIDING FOR THE REPEAL OF PRIOR INCONSISTENT RESOLUTIONS; SEVERABILITY AND AN EFFECTIVE DATE. WHEREAS, the Florida Association of City Clerks (FACC) was established in 1972 to promote and develop the educational and professional status of Florida city clerks; and WHEREAS, the primary objective of the FACC is to educate the city clerks in the State of Florida; and WHEREAS, the FACC works in conjunction with the International Institute of Municipal Clerks to provide Certified Municipal Clerk (CMC) and Master Municipal Clerk (MMC) certification for city clerks; and WHEREAS, the FACC strives to help increase the efficiency of city clerk functions, increase cooperation and assistance with city administrators, gather and disseminate information to improve procedures and improve the efficiency of the administration of municipal government; and WHEREAS, the FACC currently has more than 575 members in seven districts throughout the state; and WHEREAS, the FACC is proud to have one of the largest certification programs in the country with more than 200 Certified Municipal Clerks and more than 100 Master Municipal Clerks among its members; and WHEREAS, the FACC provides educational opportunities for clerks through its annual summer conference and academy and fall academy, webinars, district mini-academies and Athenian Dialogues; and WHEREAS, the FACC provides a discussion forum by which members may post inquiries when researching best practices for programs, issues and opportunities within Florida's cities; and WHEREAS, the year 2017 is the 45th anniversary of the FACC, which is an occasion worthy of special recognition; and WHEREAS, the City of Cape Canaveral is proud to have as members of FACC City Clerk Mia Goforth, CMC and Deputy City Clerk Daniel LeFever. NOW, THEREFORE, BE IT DULY RESOLVED BY THE CITY COUNCIL OF THE CITY OF CAPE CANAVERAL, BREYARD COUNTY,FLORIDA, AS FOLLOWS: City of Cape Canaveral Resolution No.2017-03 Page 1 of 2 Section 1. Recitals. The foregoing recitals are deemed true and correct and are hereby incorporated herein by this reference as a material part of this Resolution. Section 2. Congratulations. The City of Cape Canaveral congratulates the FACC on its 45th Anniversary. Section 3. Distribution. A copy of this Resolution shall be provided to the FACC Board of Directors. Section 4. Repeal of Prior Inconsistent Resolutions. All prior resolutions or parts of resolutions in conflict herewith are hereby repealed to the extent of the conflict. Section 5. Severability. If any section, subsection, sentence, clause, phrase, word, or portion of this Resolution is for any reason held invalid or unconstitutional by any court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision and such holding shall not affect the validity of the remaining portion hereto. Section 6. Effective Date.This Resolution shall become effective immediately upon adoption by the City Council of the City of Cape Canaveral, Florida. ADOPTED at a Regular Meeting of the City Council of the City of Cape Canaveral, Florida, assembled this 21st day of February, 2017. Bob Hoog, Mayor ATTEST: Name FOR AGAINST Mike Brown Mia Goforth, CMC, Bob Hoog City Clerk Brendan McMillin Rocky Randels Betty Walsh Approved as to legal form and sufficiency For the City of Cape Canaveral only by: Anthony A. Garganese, City Attorney City of Cape Canaveral Resolution No.2017-03 Page 2 of 2 [City Seal] City of Cape Canaveral City Council Agenda Form City Council Meeting Date: 2/21/2017 Item No. 4 Subject: Approve Agreement between the City of Cape Canaveral and Space Coast Art Festival, Inc. and authorize the Mayor to execute Agreement for the same. Department: Culture & Leisure Services Summary: The Space Coast Art Festival (SCAF) is the longest running, most prestigious juried art festival in Brevard County. From its inception in 1963 until 2014, it took place in Cocoa Beach. Due to redevelopment of downtown Cocoa Beach in 2015, SCAF organizers moved the show to Port Canaveral. Although the event was a huge success at Port Canaveral, it created logistical issues to cruise operations which the Port was not willing to overlook and support in 2016. SCAF organizers were unable to secure an event site for 2016 and the show was subsequently cancelled that year. SCAF organizers reached out to Staff expressing interest in hosting the event at Manatee Sanctuary Park (MSP) in November 2017. A preliminary meeting took place where SCAF organizers toured the Park to ensure it was a suitable location. Staff explained the Outdoor Entertainment Event Permit (OEEP) process that would have to be followed and provided an application packet for review. SCAF Organizers were looking for a permanent location for the event and concluded the City and MSP, in particular, would be an ideal location to restart the show due to its accessibility and incredible riverfront setting. A letter of interest was submitted to the City (Attachment 1), demonstrating the SCAF Board of Director's interest in pursuing a long term relationship. A response letter was sent back to SCAF (Attachment 2) and an Agreement (Attachment 3) was drafted. The Agreement clearly delineates each party's responsibilities, securing the City/MSP as the SCAF location for 5 years. A $5,000 monetary sponsorship will be given to SCAF, Inc. to assist with direct costs such as police and fire services along with in-kind sponsorship of facility and equipment use. Port Canaveral's cash contribution to the show in 2015 was approximately $15,000 and included $8,000 for parking operations, $5,885 for Brevard County Sheriff's Office and $2,700 for Canaveral Fire Rescue, plus in-kind donations of facility and equipment. The SCAF Board of Directors will have to go through the Outdoor Entertainment Event Permit process and meet all requirements prior to receiving a final permit for the event. The 2017 SCAF at MSP will solidify the City as a cultural attraction and embody the Cape Canaveral Vision Statement of supporting local culture and education. Submitting Department Director: Gustavo Vergara [initials: GV] Date: 2/7/17 Attachments: (I) SCAF Letter to City, (2) Response Letter, (3) SCAF Agreement Financial Impact: $5,000 Monetary Sponsorship to SCAF, Inc. funded by the General Fund. City Council Meeting Date: 2/21/2017 Item No. 4 Page 2 of 2 Reviewed by Administrative/Financial Services Director: John DeLeo [initials: JD] Date: 2/1/17 The City Manager recommends that City Council take the following action: Approve Agreement between the City of Cape Canaveral and Space Coast Art Festival, Inc. and authorize the Mayor to execute Agreement for the same. Approved by City Manager: David L. Greene [initials: DLG] Date: 2/1/17 Attachment 1 Space Coast Art Festival, Inc 166 Center Street #213 Cape Canaveral, FL 32920 September 28 2016 Dear Gustavo, On behalf of the Board of Directors of the Space Coast Art Festival, I am writing to express our interest in presenting the 2017 show at Manatee Park, and developing a long-term commitment to hold our future shows there. As you know, the show has had to cancel this year and we are looking for a permanent home. We look forward to working out the details with your team. Sincerely, [Signature] John Alexander President 7/18/16 Page 1 of 1 Attachment 2 [City Seal] City of Cape Canaveral October 17, 2016 Space Coast Art Festival Board of Directors P. O. Box 320135 Cocoa Beach, FL 32932-0135 RE: 2017 SPACE COAST ART FESTIVAL Dear Space Coast Art Festival Board of Directors: The City welcomes the opportunity to host the Space Coast Art Festival at Manatee Sanctuary Park. The Festival's long standing history as a premier cultural event enhances the City's vision of supporting local culture and education. Manatee Sanctuary Park is a great fit not only because of its central location, but the possibility for future growth with increased artist space. Through the Outdoor Entertainment Event Permit Process, the City's level of support will be negotiated with the understanding that we will be in kind sponsors of the event. The sponsorship can include fee waivers for City services/facilities as well as assistance with marketing. We will work with the Board to ensure the process is smooth and transparent from beginning to end. The Cultural Programs Manager will be the main point of contact between the Board and the City to ensure effective communication and a positive experience for all involved. Once all event logistics and sponsorship levels are agreed upon, the City is willing to enter into a five-year contract with the Board which would automatically renew each year until either party provides a 180 day notice of cancellation.This will ensure that the event has a permanent location. We look forward to working with the Board to make 2017 the best year in the show's 53 year history! Sincerely, [Signature] David L. Greene City Manager c: Honorable Mayor and Members of City Council Gustavo Vergara,Culture & Leisure Services Director Molly Thomas,Cultural Programs Manager Outdoor Entertainment Event Committee 105 Polk Avenue • Post Office Box 326 • Cape Canaveral, FL 32920-0326 Telephone: (321) 868-1220 • FAX: (321) 868-1248 www.cityofcapecanaveral.org • email:info@cityofcapecanaveral.org Attachment 3 SPACE COAST ART FESTIVAL AGREEMENT THIS SPACE COAST ART FESTIVAL AGREEMENT ("Agreement") is made and entered into as of ____ day of _______, 2017 by and between the CITY OF CAPE CANAVERAL, a Florida Municipal Corporation, ("City"), and SPACE COAST ART FESTIVAL, INC., a Florida Corporation ("Permittee"). WITNESSETH: WHEREAS, Permittee desires to annually coordinate the Space Coast Art Festival for the benefit of the public at Manatee Sanctuary Park, which is located in and owned by the City of Cape Canaveral, Florida; and WHEREAS, Permittee each year will seek a permit from the City which would authorize the Permittee to hold the Space Coast Art Festival at Manatee Sanctuary Park, as described in this Agreement; and WHEREAS, Permittee represents and warrants that it has the personnel, tools, materials, and experience to satisfy the permit requirements set forth hereunder and to provide the Outdoor Entertainment Event as provided herein. NOW THEREFORE, in consideration of the provisions contained in this Agreement, and other good and valuable consideration in which the parties acknowledge has been received, the parties agree as follows: 1.0 Incorporation of Recitals: The foregoing recitals are true and correct and by this reference are fully incorporated into this Agreement. 2.0 General Provisions: 2.1 Definitions: (a) "Advertise" shall mean the act of publicly announcing or calling attention to the Outdoor Entertainment Event, including, but not limited to, the distribution of handbills or mass mailings, the use of outdoor advertising and announcements by billboard, poster,radio, television or newspapers. (b) "Agreement" or "Contract" shall mean this Agreement and all exhibits and addendums thereto between the City and Permittee regarding the Outdoor Entertainment Event permitted herein. (c) "Manatee Sanctuary Park" shall mean the park owned and operated by the City, which is Iocated within the City of Cape Canaveral at 701 Thurm Boulevard. (d) "City" shall mean the City of Cape Canaveral, a Florida Municipal Corporation and its employees, agents and Permittees. (e) "City Manager" shall mean the City Manager of the City of Cape Canaveral. Florida or City Manager's designee. (f} "Permittee" shall mean Space Coast Art Festival, Inc., a Florida Corporation, and its officers, employees, agents,and its Permittees. (g) "Effective Date" shall be the date on which the last signatory hereto shall execute this Agreement, and it shall be the date on which this Agreement shall go into effect. The Agreement shall not be effective against any party until said date. (h) "Public Records" is as described in Section 119.011(12), Florida.Statutes. (i) "Outdoor Entertainment Event" shall mean the Space Coast Art Festival to be held at Manatee Sanctuary Park annually for the next five years and further described in this permit Agreement. The Outdoor Entertainment Event shall be planned, promoted, managed,and operated by the Permittee pursuant to this Agreement. 2.2 Permit. The City hereby permits the Permittee and the Permittee agrees to provide the Outdoor Entertainment Event outlined in this Agreement; PROVIDED, that each year the Outdoor Entertainment Event is held in Manatee Sanctuary Park pursuant to this Agreement, Permittee shall submit a new Outdoor Entertainment Event Application, including all required attachments, such as a site plan and internal security plan, so as to demonstrate satisfaction of all requirements in Chapter 10, Article III of the Cape Canaveral City Code, as now existing or as amended in the future. No prior or present agreements or representations shall be binding upon any of the parties hereto unless incorporated in this Agreement. 2.3 Time of Event. In conjunction with the submittal of an Outdoor Entertainment Event Application each year the Outdoor Entertainment Event is held in Manatee Sanctuary Park, the City and Permittee will jointly determine the date and time of the Event, based upon the Manatee Sanctuary Park's availability and the order of priority established in Chapter 10, Article III of the Cape Canaveral City Code. 3.0 Scope of Outdoor Entertainment Event. Permittee agrees to provide the following Outdoor Entertainment Event under the following special operating conditions: 3.1 Outdoor Entertainment Event. Permittee shall advertise,produce,plan,promote, manage and operate the Outdoor Entertainment Event. In furtherance thereof. Permittee agrees to keep the City Manager or his designee fully informed of its plan to promote, manage, and operate the Outdoor Entertainment Event so that City can reasonably satisfy its obligations under this Agreement and reasonably address issues of public health, safety, and welfare related to the Outdoor Entertainment Event. 3.2 Food and Beverage. Permittee agrees to provide all food and beverage concessions for the Outdoor Entertainment Event. Permittee shall retain all fees and commissions from the concessions provided by Permittee. 3.3 Sponsorship; Event Fees. Unless otherwise provided in this Agreement, Permittee shall retain the sole right to all sponsorships and paid fees for the Outdoor Entertainment Event. 3.4 Staging; Other Production Materials. Permittee shall provide all staging and. production materials necessary to produce a high quality Outdoor Entertainment Event including, but not limited to, radios, tents, port-a-lets, security, event staff. and catering for staff: except, that as part of the City's in-kind sponsorship of the Event, the City agrees to provide to Permittee the use of its stage (including City setup and tear down) and two (2) light towers. 3.5 City Outdoor Entertainment Event Policy. Permittee agrees to comply with the City's written Outdoor Entertainment Event policies, if any, deemed applicable to the Outdoor Entertainment Event by the City Manager or his designee. 3.6 Parking and Shuttling. Permittee agrees to arrange for and provide access to parking for all anticipated attendees, which may include, but is not limited to, seeking permission from surrounding businesses for parking access, providing shuttle service, and displaying adequate traffic signage. 3.7 Permits. Permittee shall obtain all local, state, and federal permits necessary to hold the Outdoor Entertainment Event and conduct any particular activities therein, including an annual Outdoor Entertainment Event permit from the City. The City shall waive all City permit fees for the Outdoor Entertainment Event, in accordance with Sections 10-46 and 10-73 of the Cape Canaveral City Code, which authorize the City Manager to waive fees and deposits imposed pursuant to Chapter 10, Article Ill, Outdoor Entertainment Events, in furtherance of a cultural attraction or event. 3.8 Advertising. The City shall be recognized on all advertising materials as a sponsor of the Outdoor Entertainment Event. 4.0 Compensation and Expenses. Compensation and expenses for the Outdoor Entertainment Event shall be paid as follows: 4.1 Permittee Expenses. Unless otherwise provided in this Agreement, Permittee shall pay all costs and expenses necessary for the Permittee to satisfy its obligations under this Agreement and Chapter 10,Article III of the Cape Canaveral City Code, as now existing or hereafter amended, including, but not limited to, clean up of Manatee Sanctuary Park and surrounding area, parking coordination and shuttling, repair of damages incurred to Manatee Sanctuary Park caused by the Outdoor Entertainment Event, portable restroom facilities, existing lighting of Manatee Sanctuary Park and surrounding areas, and police and fire fees incurred above the $5,000.00 contribution of the City as described below in Section 4.2. Payment for any expenses owed to City under this provision shall be made at the conclusion of the Outdoor Entertainment Event or within ten (10) days of presentation of such expenses by City to Permittee,whichever occurs later. 4.2 City Expenses. City shall provide to Permittee access to Manatee Sanctuary Park on the days of the Outdoor Entertainment Event. Additionally, City shall provide Permittee access to Manatee Sanctuary Park on the one (1) day immediately preceding and the one (1) day immediately following the Outdoor Entertainment Event for set-up and clean up purposes. The City will waive applicable Outdoor Entertainment Event fees and park rental fees and may also provide in-kind services,such as assistance with marketing of the Outdoor Entertainment Event and use of the City's stage and light towers. Waiver of these fees shall constitute in- kind sponsorship of the Outdoor Entertainment Event. In addition, the City shall pay $5,000.00 to Permittee, which is intended to cover a portion of the police and fire fees that Permittee will incur with Brevard County Sheriffs Office and Canaveral Fire Rescue. The City shall not be required to provide any other monetary sponsorship or support for the Outdoor Entertainment Event. 5.0 Due Diligence. Permittee acknowledges that it has investigated prior to the execution of this Agreement and satisfied itself as to the conditions affecting the Outdoor Entertainment Event desired hereunder, the availability of materials and labor, the cost thereof, the requirements to obtain necessary insurance, permits, professional entertainment and the steps necessary to complete the Outdoor Entertainment Event within the time set forth herein. The Permittee warrants unto the City that it has the competence and abilities to carefully, professionally, and faithfully complete the Outdoor Entertainment Event in the manner and within the time limits proscribed herein. The Permittee will perform the Outdoor Entertainment Event with due and reasonable diligence consistent with sound professional and labor practices and with due and reasonable consideration to the public health,safety,and welfare. The Permittee shall comply with all laws,ordinances and rules in performing the Outdoor Entertainment Event. 6.0 General Miscellaneous Provisions. The following general miscellaneous provisions shall apply to this Agreement: 6.1 Non-Business Day. In the event that any period of time as set forth in this Agreement expires or any date herein occurs on a Saturday, Sunday, holiday or other non-business day, then such date shall automatically extend to 5:00 p.m. on the next subsequent business day, excluding the days the Outdoor Entertainment Event will be held pursuant to this Agreement. 6.2 No Assignment. This Agreement shall not be assigned or transferred unless prior written consent is granted by the City Council of the City of Cape Canaveral. 6.3 Further Assurances. From and after the execution of this Agreement, each of the parties hereto shall fully cooperate with each other and perform any further act(s), execute and deliver any further documents which may be necessary or desirable in order to carry out the purposes and intentions of this Agreement. 6.4 Legal Representation. The parties acknowledge that Anthony A. Garganese, Esquire, and Garganese, Weiss and D'Agresta, P. A., and other attorneys therein, have acted as counsel for the City in connection with this Agreement and the transactions contemplated herein, and have not given legal advice to any party hereto other than the City. 6.6 Severability. If a word, sentence, or paragraph herein shall be declared illegal, unenforceable, or unconstitutional, the said word, sentence, or paragraph shall be severed from this Agreement, and this Agreement shall be read as if said illegal, unenforceable,or unconstitutional word, sentence, or paragraph did not exist. 6.7 Governing Law; Venue. This Agreement shall be governed by the law of the State of Florida. Venue of all disputes shall be properly placed in Brevard County, Florida. The parties agree that the Agreement was consummated in Brevard County,and the site of the Outdoor Entertainment Event is Brevard County. If any dispute concerning this Agreement arises under Federal law, the venue will be Orlando, Florida. Any objections to jurisdiction and venue are expressly waived. 6.8 Attorney's Fees. In the event any litigation or controversy arises out of or in connection with the parties hereto, the prevailing party in such litigation or controversy shall, to the extent permitted by law, be entitled to recover from the other party or parties all reasonable attorney's fees and paralegal fees,expenses and suit costs, including those associated with any appellate or post judgment collection proceedings. 6.9 Non Waiver. No delay or failure by either party to exercise any right under this Agreement, and no partial or single exercise of that right, shall constitute a waiver of that or any other rights, unless otherwise expressly provided herein. 6.10 Notices. Any notice, request, instruction,or other document to be given as part of this Agreement shall be in writing and shall be deemed given under the following circumstances: when delivered in person; or three (3) business days after being deposited in the United States Mail, postage prepaid, certified or registered; or the next business day after being deposited with a recognized overnight mail or courier delivery service; or when transmitted by facsimile or telecopy transmission, with receipt acknowledged upon transmission;and addressed as follows(or to such other person or at such other address,of which any party hereto shall have given written notice as provided herein): TO THE CITY: City Manager City of Cape Canaveral P.O. Box 326 Cape Canaveral, FL 32920 321-868-1230 (Phone) 321-868-1224(Fax) WITH A COPY TO: Anthony A. Garganese City Attorney Garganese. Weiss & D'Agresta, P.A. 111 N. Orange Avenue.. Suite 2000 Orlando. FL 32802-2873 407-425-9566(Phone) 407-425-9596 (Fax) TO PERMITTEE: Space Coast Art Festival, Inc. P.O. Box 320135 Cocoa Beach, FL 32932-0135 321-784-3322 6.1 1 Counterparts, This Agreement may be executed in any number of counterparts, each of which when so executed and delivered, shall be original; but such counterparts shall together constitute but one and the same instrument. 6.12 Public Record. Pursuant to Section 119.0701, Florida Statutes and other applicable public records laws, Permittee agrees that any records, documents, transactions, writings, papers, letters, computerized information and programs, maps, books, audio or video tapes, films, photographs, data processing software. writings or other material(s), regardless of the physical form, characteristics, or means of transmission, of Permittee related, directly or indirectly, to the services provided to the City under this Agreement and made or received pursuant to law or ordinance or in connection with the transaction of official business by the City, may be deemed to be a public record, whether in the possession or control of the City or the Permittee. Said records, documents, transactions, writings, papers, letters, computerized information and programs, maps, books,audio or video tapes, films, photographs, data processing software, writings or other material(s), regardless of the physical form, characteristics,or means of transmission of Permittee are subject to the provisions of Chapter 119, Florida Statutes, and may not be destroyed without the specific written approval of the City's designated custodian of public records. Upon request by the City.the Permittee shall promptly supply copies of said Public Records to the City. All books, cards, registers, receipts, documents, and other papers in connection with this Agreement shall at any and all reasonable times during normal business hours of the Permittee be open and freely exhibited to the City for the purpose of examination and/or audit. Failure by Penn ittee to grant such access and comply with public records laws and/or requests shall be grounds for immediate unilateral cancellation of this Agreement by the City upon delivery of a written notice of cancellation. If the Permittee fails to comply with this Section, and the City must enforce this Section. or the City suffers a third party award of attorney's fees and/or damages for violating Chapter 119, Florida Statutes, due to Permittee's failure to comply with this Section, the City shall collect from Perm ittee prevailing party attorney's fees and costs, and any damages incurred by the City, for enforcing this Section against Permittee. And, if applicable,the City shall also be entitled to reimbursement of all attorney's fees and damages which the City had to pay a third party because of the Permittee's failure to comply with this Section. The terms and conditions set forth in this Section shall survive the termination of this Agreement. 6.13 Interpretation. Both the City and the Permittee have participated in the drafting of all parts of this Agreement. As a result, it is the intent of the parties that no portion of this Agreement shall be interpreted more harshly against either of the parties as the drafter. 6.14 No Joint Venture. This Agreement shall not in any way be deemed to create a joint venture or principal-agent relationship between Permittee and the City. 6.15 No City Representations and Warranties; Success of Outdoor Entertainment Event. Permittee agrees and acknowledges that the City has made no representations and warranties regarding the Outdoor Entertainment Event. Permittee has assumed full responsibility for furnishing, performing, and completing the Outdoor Entertainment Event and that Permittee agrees and acknowledges the City has in no way guaranteed that the Outdoor Entertainment Event will be successful and profitable by any person's standard and belief of success and profit. 7.0 Entire Agreement. This Agreement represents the entire and integrated Agreement between the parties and supersedes all prior negotiations, representations, or Agreements, either oral or written, and all such matters shall be deemed merged into this Agreement. 8.0 Sovereign Immunity. The City intends to avail itself of the benefits of Section 768.28, Florida Statutes and any other statutes and common law governing sovereign immunity to the fullest extent possible. Neither this provision nor any other provision of this Agreement shall be construed as a waiver of the City's right to sovereign immunity under Section 768.28. Florida Statutes.or other limitations imposed on the City's potential liability under state or federal law. Permittee agrees that City shall not be liable under this Agreement for punitive damages or interest for the period before judgment. Further, City shall not be liable for any claim or judgment,or portion thereof,to any one person for over two hundred thousand dollars ($200,000.00),or any claim or judgment,or portion thereof,which,when totaled with all other claims or judgments paid by the State or its agencies and subdivisions arising out of the same incident or occurrence, exceeds three hundred thousand dollars ($300,000.00). Nothing in this Agreement is intended to inure to the benefit of any third party for the purpose of allowing any claim which would otherwise be barred under the doctrine of sovereign immunity or by operation of law. This paragraph shall survive termination of this Agreement. 9.0 General Liability Insurance. For all activities and services permitted and which occur under this Agreement, including any and all activities and services provided and performed by Permittee and by authorized participants of the Outdoor Entertainment Event, the Permittee shall purchase and maintain,at its own expense,such general liability insurance, food and liquor liability insurance and automobile liability insurance to cover claims for damages because of bodily injury or death of any person or property damage arising in any way out of the activities and services permitted and occurring under this Agreement, including any and all activities and services provided and performed by Permittee and by authorized participants of the Outdoor Entertainment Event. The insurance shall have minimum limits of coverage of $1,000,000.00 per occurrence combined single limit for bodily injury liability, property damage liability, and food and liquor liability. This shall include,but not be limited to,automobile liability of owned vehicles,hired and non-owned vehicles, and employee non-ownership. All insurance coverage shall be with insurer(s) approved by the City Manager and licensed by the state of Florida to engage in business of writing of insurance. The City shall be named on the foregoing insurance policies as "additional insured." The Permittee shall cause its insurance carriers to furnish insurance certificates and endorsements specifying the types and amounts of coverage and effect pursuant hereto, the expiration date on such policies, and the statement that no insurance under such policies will be cancelled without thirty (30) days prior written notice to the City in compliance with other provisions of this Agreement. The Permittee shall be solely responsible to pay any deductible, if any, relating to any claim made against the insurance coverages and policies provided under this Agreement. lithe City has any objection to the coverage afforded by or other provision of the insurance required to be purchased and maintained by the Permittee in accordance with this paragraph on the basis of its not complying with the Agreement,the City shall notify the Permittee in writing thereof within thirty (30) days of the date of delivery of such certificates and endorsements to the City. For all activities and services permitted and occurring under this Agreement, including any and all activities and services provided and performed by Permittee and by authorized participants of the Outdoor Entertainment Event,the Permittee shall continuously maintain such insurance in the amount,type, and quality as required by this paragraph. 10.0 Indemnification and Hold Harmless. For all activities and services permitted and occurring under this Agreement, including any and all activities and services provided and performed by Permittee and by authorized participants of the Outdoor Entertainment Event. the Permittee agrees to the fullest extent permitted by law, to indemnify and hold harmless the City and its employees, officers, and attorneys from and against all claims, losses, damages, personal injuries (including but not limited to death), or liability (including reasonable attorney's fees), which directly or indirectly arises out of or results from any act or failure to act of Permittee or any person authorized by Permittee to participate in the Outdoor Entertainment Event which in any way is related to Permittee's obligations under this Agreement, and/or the services and activities provided and performed under this Agreement. The indemnification provided above shall obligate the Permittee to defend at its own expense or to provide for such defense,at the option of the City,as the case may be,of any and all claims of liability and all suits and actions of every name and description that may be brought against the City or its employees, officers, and attorneys which may arise or result from this Agreement. In all events the City shall be permitted to choose legal counsel of its sole choice, the fees for which shall be reasonable and subject to and included with this indemnification provided herein. This section shall survive termination of this Agreement. 11.0 Standard of Care. In performing its activities and services hereunder,the Permittee will use that degree of care and skill ordinarily exercised, under similar circumstances by reputable members of its profession practicing in the same or similar locality. Permittee shall protect the public and property from any safety hazards directly or indirectly resulting from the Outdoor Entertainment Event and the authorized participants thereto. 12.0 Termination of Event. By written notice, either party shall have the right to cancel an Outdoor Entertainment Event with at least one-hundred eighty(1 80)days written notice in accordance with Section 6.10 above, without penalty. 13.0 Term. The term of this Agreement shall commence upon full execution of this Agreement by the parties and shall continue for five years or five Outdoor Entertainment Events, whichever is longer. This Agreement will automatically renew each year thereafter until either party provides a one-hundred eighty (180) day notice of cancellation in accordance with Section 6.10 above. Notwithstanding, this Section shall not be construed to require the City to issue a permit for any proposed Outdoor Entertainment Event unless the requirements of this Agreement and all applicable City Codes are satisfied,including. but not limited to, Chapter 10, Article 111 of the Cape Canaveral City Code. In the event the Permittee fails to obtain a permit for any Outdoor Entertainment Event,the City shall have the right to terminate this Agreement,without penalty,by providing Permittee at least one- hundred eighty(180)days written notice in accordance with Section 6.10 above. 14.0 Permittee's Signatory. The undersigned person executing this Agreement on behalf of Permittee hereby represents and warrants that he or she has the full authority to sign said Agreement for Permittee and to fully bind Permittee to the terms and conditions set forth in this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year written above. PERMITTEE: CITY: SPACE COAST ART FESTIVAL, INC., CITY OF CAPE CANAVERAL, A Florida Municipal Corporation By: [Signature] By: Its: [Acting President] Mayor Bob Hoog ATTEST: Mia Goforth,City Clerk [City Seal] City of Cape Canaveral City Council Agenda Form City Council Meeting Date: 02/21/2017 Item No. 5 Subject: Ordinance No. 03-2017; amending Sections 50-4 and 2-283 of the Cape Canaveral City Code regulating sleeping and camping upon public streets and sidewalks,beach end streets, beach dune crossovers,beaches and parks;providing for procedures to remove personal property remaining in camp sites; providing for penalties; and providing for the repeal of prior inconsistent ordinances and resolutions, incorporation into the City Code, severability and an effective date, second reading. Department: Culture& Leisure Services Summary: Yearly, coastal communities in Florida experience an increase in homelessness and individuals attempting to habitate or camp on public property during winter months. The City is a tourist destination with warm weather/open beaches making it especially attractive. Although Staff and Brevard County Sheriff s Office (BCSO) patrol on a regular basis to prevent this activity, instances of individuals sleeping overnight on City property were recently reportedladdressed. It was noted by the City Attorney's Office (CAO) that cases challenging ordinances prohibiting sleeping and camping on public property are continuing to emerge and such decisions are garnering national interest. CAO advised that the City Code be amended to clarify and protect the constitutional rights of individuals sleeping and camping on public property. The suggested amendment to the Ordinance clarifies when a person may and may not be arrested or otherwise penalized for violation of the anti-camping and sleeping Ordinance, establishes a procedure for vacating a camping individual from public property, and delineates protocols for removal/disposal of personal property from public property once an individual has been arrested/admitted into a homeless shelter or while camping on public property. The amendment makes violation of this Ordinance a Class I citation, enforceable by means including, but not limited to: a summons; a notice to appear in the county or circuit court; an arrest; an action before the special magistrate/code enforcement board or a civil action for injunctive relief. The notice of public hearing was advertised in Florida Today on February 9, 2017. Submitting Department Director: Gustavo Vergara [Initials: GV] Date: 1/25/17 Attachment: Ordinance No. 03-2017 Financial Impact: Staff time and effort to prepare this Agenda Item. Reviewed by Administrative/Financial Services Director: John DeLeo [initials JD] Date: 1/24/17 The City Manager recommends that City Council to take the following action: Adopt Ordinance No. 03-2017 at second reading. Approved by City Manager: David L. Greene [initials DLG] Date: 1/29/17 ORDINANCE NO. 03-2017 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CAPE CANAVERAL, BREVARD COUNTY, FLORIDA; AMENDING SECTIONS 50-4 AND 2-283 OF THE CAPE CANAVERAL CITY CODE REGULATING SLEEPING AND CAMPING UPON PUBLIC STREETS AND SIDEWALKS, BEACH END STREETS, BEACH DUNE CROSSOVERS, BEACHES AND PARKS; PROVIDING FOR PROCEDURES TO REMOVE PERSONAL PROPERTY REMAINING IN CAMP SITES; PROVIDING FOR PENALTIES; AND PROVIDING FOR THE REPEAL OF PRIOR INCONSISTENT ORDINANCES AND RESOLUTIONS, INCORPORATION INTO THE CITY CODE, SEVERABILITY AND AN EFFECTIVE DATE. WHEREAS,the City is granted the authority,under Section 2(b), Article VIII, of the State Constitution, to exercise any power for municipal purposes, except when expressly prohibited by law; and WHEREAS, the Florida Constitution provides that it is the policy of the State to conserve and protect natural resources and scenic beauty and that adequate provision shall be made by law for the abatement of air and water pollution and of excessive and unnecessary noise and for the conservation and protection of natural resources; and WHEREAS, the City Council also finds that the public beaches are an invaluable asset held in trust by the City for recreational use by residents and visitors alike; and WHEREAS, the City Council finds that the City's well-being is substantially dependent upon a high quality of outdoor life for its residents and visitors which is, in turn, dependent upon maintaining attractive and inviting beaches and parks; and WHEREAS, the City Council hereby finds that this Ordinance is necessary to preserve and protect the scenic beauty of the City's public beaches, parks, and other public spaces and the public's enjoyment and safety thereof; and WHEREAS, the City Council also finds that this Ordinance will appropriately balance the Constitutional rights of those individuals who are found to be camping or sleeping on public property with the need to preserve and protect the City's public spaces as described above; and WHEREAS, the City Council of the City of Cape Canaveral, Florida, hereby finds this Ordinance to be in the best interests of the public health, safety, and welfare of the citizens of Cape Canaveral. NOW,THEREFORE,BE IT ENACTED BY THE CITY COUNCIL OF THE CITY OF CAPE CANAVERAL,BREVARD COUNTY,FLORIDA,AS FOLLOWS: Section 1. Recitals. The foregoing recitals are hereby fully incorporated herein by this reference as legislative findings and the intent and purpose of the City Council of the City of Cape City of Cape Canaveral Ordinance No.03-2017 Page 1 of 5 Canaveral. Section 2. Code Amendment. Chapters 2 and 50 of the Code of Ordinances, City of Cape Canaveral, Florida, are hereby amended as follows (underlined type indicates additions and strikeout type indicates deletions, while asterisks (* * *) indicate a deletion from this Ordinance of text existing in Chapters 2 or 50. It is intended that the text in Chapters 2 and 50 denoted by the asterisks and set forth in this Ordinance shall remain unchanged from the language existing prior to adoption of this Ordinance): Chapter 2 Administration ARTICLE VI. —CODE ENFORCEMENT DIVISION 2.—CODE ENFORCEMENT CITATIONS Sec 2-283. - Applicable codes and ordinances; class violation. (a) The following city codes and ordinances may be enforced by civil citation to the Brevard County Court, and are assigned the violation classification enumerated below: (1) Chapter 38, article IV, Fireworks - Class II. (2) Chapter 34, article II, Litter - Class I. (3) Chapter 34, article III, Property Maintenance Standards - Class I. (4) Chapter 34, article V,Noise - Class I. (5) Chapter 34, article VII, Lights - Class I. (6) Section 14-3, Bees and beehives prohibited - Class I. (7) Chapter 14, article III, Sea Turtles - Class I. (8) Section 110-467, Garage sales - Class I. (9) Section 110-582, Swimming pool barriers - Class II. (10) Chapter 62, Solid waste - Class I. (11) Section 110-487, Rental restrictions on dwelling units - Class IV. (12) Chapter 82, article XIV,Numbering of Buildings and Property - Class I. (13) Chapter 82, article V, Registration and Maintenance of Properties in Foreclosure - Class IV. (14) Section 94-6, Prohibited signs and features - Class I. (15) Chapter 90, article V, construction site stormwater runoff control - Class II. (16) Chapter 92, Fertilizer Land Application - Class I. City of Cape Canaveral Ordinance No.03-2017 Page 2 of 5 (17) Chapter 6, article III, Possession and Consumption - Class I. (18) Chapter 50, Section 50-4, Sleeping and Camping in Public Areas and Beaches - Class I. (b) In the event of a conflict between the civil penalties enumerated in this section and a civil penalty specifically enumerated elsewhere in this Code or other ordinances,the more stringent penalty shall apply. Chapter 50 Offenses and Miscellaneous Provisions Sec. 50-4. - Sleeping and camping in public areas and beaches. (f) Enforcement and penalties. (1) Any person who is observed engaging in any activity prohibited by this section shall vacate the particular place at issue upon the request of an authorized official or law enforcement officer. The willful refusal to vacate the area shall be subject to a penalty as provided in section 1 15 50-4(f)(4) of the City Code. Excluding situations when a person is trespassing upon private property, if a law enforcement officer or other official encounters a person engaged in an activity prohibited by this section and that person volunteers that he or she has no home or permanent shelter, that person must be given an opportunity to enter a homeless shelter or similar facility, if available, or be placed on public property where the city or Brevard County has authorized camping or overnight sleeping. If no such facility or public property is available, an arrest may not be made. A homeless shelter or similar facility is deemed"available"when it has an available overnight space, open to an individual or family unit experiencing homelessness at no charge. To qualify as available, the space must take into account sex, marital and familial status, and disabilities. However, if the individual cannot utilize the overnight shelter space due to voluntary actions such as intoxication, drug use, unruly behavior, or violation of shelter rules, the overnight shelter space shall still be considered available. Situations involving trespass upon private property shall be handled by law enforcement in accordance with trespass laws. (2) If personal property remains in violation of subsection(d) after an arrest, entrance into a homeless shelter or similar facility, or if it is otherwise left unattended, the city's law enforcement officer or official may remove such personal property to a secure location for a period of not less than (90) days. Notice of the removal shall be posted and remain at the nearest reasonable location to the place of removal with the city's contact information and instructions on how to redeem removed property for the ninety (90) day period or, if the individual claiming ownership of the property is present at the time of removal, such notice shall be provided to the individual personally. If property is not claimed within the ninety (90) day period, the property shall be deemed abandoned and the City shall have the right to City of Cape Canaveral Ordinance No.03-2017 Page 3 of 5 dispose of the property. An individual claiming the property shall produce identification and shall sign a release form providing his or her name and contact information and swearing that the property belongs to the claiming party. Nothing herein shall limit or restrict the City and its officials from immediately destroying hazardous debris, trash, and items posing an immediate risk to public health and safety, such as syringes. Items such as medicine, personal identification, photographs, family memorabilia, toiletries, clothing, cell phones, sleeping bags and blankets, and non-hazardous items in containers, such as backpacks or boxes, shall not be considered garbage and shall be removed and stored in accordance with this section. (3) Should the City or its officials desire to clean up public property being used for camping while personal property remains attended, the City shall prominently post a Notice to Vacate at the particular camping location at least twenty-four (24) hours in advance of the cleaning, except that notice shall not be required prior to removal of personal property or trash posing an immediate risk to public health and safety. Personal property remaining at the time of the scheduled cleaning may be removed. Such personal property shall be stored and post- removal notice shall be posted as provided above in this section. (4) Any person who violates or fails to comply with any provisions of this Section 50-4 shall be subject to the following: (a) The issuance of a Class I citation in accordance with the provisions of section 2- 280, et seq., "Code Enforcement Citations"; or (b) Enforcement by other means including, but not limited to: a summons; a notice to appear in the county or circuit court; an arrest; an action before the special magistrate/code enforcement board; or a civil action for injunctive relief; or (c) Punished in accordance with the general penalty set forth in section 1-15 of this Code. Section 3. Repeal of Prior Inconsistent Ordinances and Resolutions. All prior inconsistent ordinances and resolutions adopted by the City Council, or parts of prior ordinances and resolutions in conflict herewith, are hereby repealed to the extent of the conflict. Section 4. Incorporation Into Code. This Ordinance shall be incorporated into the Cape Canaveral City Code and any section or paragraph, number or letter and any heading may be changed or modified as necessary to effectuate the foregoing. Grammatical, typographical, and like errors may be corrected and additions, alterations, and omissions, not affecting the construction or meaning of this Ordinance and the City Code may be freely made. Section 5. Severability. If any section, subsection, sentence, clause, phrase, word or provision of this Ordinance is for any reason held invalid or unconstitutional by any court of competent jurisdiction,whether for substantive,procedural, or any other reason, such portion shall be deemed a separate, distinct and independent provision, and such holding shall not affect the validity of the remaining portions of this Ordinance. Section 6. Effective Date. This Ordinance shall become effective immediately upon City of Cape Canaveral Ordinance No.03-2017 Page 4 of 5 adoption by the City Council of the City of Cape Canaveral, Florida. ADOPTED by the City Council of the City of Cape Canaveral, Florida, this 21st day of February, 2017. Bob Hoog, Mayor ATTEST: For Against Mike Brown Mia Goforth, CMC Robert Hoog City Clerk Brendan McMillin Rocky Randels Betty Walsh Approved as to legal form and sufficiency for the City of Cape Canaveral only by: Anthony A. Garganese, City Attorney City of Cape Canaveral Ordinance No.03-2017 Page 5 of 5