MONROE COUNTY, FLORIDA SHERIFF

BALANCE SHEET - GOVERNMENTAL FUNDS

SEPTEMBER 30, 2016

MONROE COUNTY, FLORIDA SHERIFF

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS

YEAR ENDED SEPTEMBER 30, 2016

MONROE COUNTY, FLORIDA SHERIFF

STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES

AGENCY FUNDS

SEPTEMBER 30, 2016

MONROE COUNTY, FLORIDA SHERIFF

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2016

Note 3—Interfund receivables and payables

Interfund receivables and payables at September 30, 2016 consist of the following:

Note 4—Capital assets

A summary of changes in the Sheriff’s capital assets, presented in the government-wide financial statements of the County, is as follows:

Note 5—Long‐term debt

The Sheriff permits employees to accumulate earned but unused vacation and sick pay benefits. The Sheriff is not legally required to and does not accumulate expendable available financial resources to liquidate this obligation. The obligation for compensated absences is accrued in the government-wide financial statements of the County. A summary of activity for the Sheriff’s compensated absences obligation is as follows:

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MONROE COUNTY, FLORIDA SHERIFF

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2016

Note 6—Fund balances

In the governmental fund financial statements, fund balance is composed of two classifications designed to disclose the hierarchy of constraints placed on how fund balance can be spent.

The governmental fund types classify fund balances as follows:

Restricted Fund Balance - This classification includes revenue sources that are restricted to specific purposes externally imposed by creditors or imposed by law.

Shared Asset Forfeiture Fund is restricted upon Ordinance 030-2000 which specifies use must be for law enforcement crime prevention, drug and alcohol abuse prevention and treatment, mental and physical health of minors and adults, and cultural, artistic, educational, recreational and sports programs for Monroe County youth.

Federal Forfeiture Fund is restricted for law enforcement purposes based upon the Federal Justice and Treasury Guide to Equitable Sharing which outlines the specific uses of these funds.

E-911 Fund is restricted based upon the E-911 costs allowable by State Statute [F.S. 365].

Teen Court is restricted by State Statute [F.S. 938.19].

Commissary Fund is restricted for Inmate and Farm as outlined by State Statute [F.S. 951.23(9)].

Inter-Agency Communications Fund is restricted by State Statute [318.21(9)].

Committed Fund Balance - Portion of fund balance that can only be used for specific purpose imposed by the Sheriff (highest level of decision-making authority). Any changes or removal of specific purposes requires action by the Sheriff.

Contract Administrative Fund is committed for the administration of contracts between the Sheriff and third parties.

Note 7—Retirement plan

Plan description – The Sheriff’s employees participate in the Florida Retirement System (FRS). As provided by Chapters 121 and 112, Florida Statutes, the FRS provides two cost sharing, multiple employer defined benefit plans administered by the Florida Department of Management Services, Division of Retirement, including the FRS Pension Plan (“Pension Plan”) and the Retiree Health Insurance Subsidy (“HIS Plan”). Under Section 121.4501, Florida Statutes, the FRS also provides a defined contribution plan (“Investment Plan”) alternative to the FRS Pension Plan, which is administered by the State Board of Administration.

As a general rule, membership in the FRS is compulsory for all employees working in a regularly established position for a state agency, county government, district school board, state university, community college, or a participating city or special district within the State of Florida. The FRS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefits are established by Chapter 121, Florida Statutes, and Chapter 60S, Florida Administrative Code. Amendments to the law can be made only by an act of the Florida Legislature.

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MONROE COUNTY, FLORIDA SHERIFF

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2016

Note 7—Retirement plan (continued)

Benefits under the Pension Plan are computed on the basis of age, average final compensation, and service credit. For Pension Plan members enrolled before July 1, 2011, Regular class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 1.6% of their final average compensation based on the five highest years of salary for each year of credited service. Vested members with less than 30 years of service may retire before age 62 and receive reduced retirement benefits. Senior Management Service class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 2.0% of their final average compensation based on the five highest years of salary for each year of credited service. Elected Officers’ class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 3.0% of their final average compensation based on the five highest years of salary for each year of credited service. Special Risk Administrative Support class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 3.0% of their final average compensation based on the five highest years of salary for each year of credited service. Special Risk class members (sworn law enforcement officers, firefighters, and correctional officers) who retire at or after age 55 with six years of credited service, or with 25 years of service regardless of age are entitled to a retirement benefit payable monthly for life equal to 3% of their final average compensation based on the five highest years of salary for each year of credited service. Substantial changes were made to the Pension Plan during fiscal year 2011 affecting members enrolled on or after July 1, 2011 by extending the vesting requirement for Regular, Senior Management Service, Elected Officers’ and Special Risk Administrative Support class members to eight years of credited service and increasing normal retirement to age 65 with at least eight years of credited service or 33 years of service regardless of age. The vesting requirement for Special Risk class members was extended to eight years of credited service and increasing normal retirement to age 60 with at least eight years of credited service or 30 years of service regardless of age or age 57 with 30 years of combined Special Risk Class service and military service. Also, the final average compensation of these members will be based on the eight highest years of salary. A post-employment health insurance subsidy is also provided to eligible retired members through the FRS in accordance with Florida Statutes.

Funding policy - All enrolled members of the FRS other than Deferred Retirement Option Program (DROP) participants are required to contribute 3% of their salary to the FRS. In addition to member contributions, governmental employers are required to make contributions to the FRS based on state-wide contribution rates. The employer contribution rates by job class for the periods from October 1, 2015 through June 30, 2016 and July 1, 2016 through September 30, 2016, respectively, were as follows: regular, 7.26% and 7.52%; special risk, 22.04% and 22.57%; special risk administrative support, 32.95% and 28.06%; county elected officers, 42.27% and 42.47%; senior management, 21.43% and 21.77%; and DROP participants, 12.88% and 12.99%. During the fiscal year ended September 30, 2016, the Sheriff contributed to the Plan an amount equal to 20.24% of covered payroll.

The HIS Plan provides a monthly benefit to assist retirees in paying their health insurance costs and is administered by the Florida Department of Management Services, Division of Retirement. Eligible retirees and beneficiaries receive a monthly health insurance subsidy payment of $5 for each year of creditable service, with a minimum payment of $30 and a maximum payment of $150 per month. The HIS Plan is funded by required contributions from FRS participating employees as set forth by the Florida Legislature, based on a percentage of gross compensation for all active FRS members.

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MONROE COUNTY, FLORIDA SHERIFF

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2016

Note 7—Retirement plan (continued)

In addition to the above benefits, the FRS administers a Deferred Retirement Option Program (DROP). This program allows eligible members to defer receipt of monthly retirement benefit payments while continuing employment with a FRS employer for a period not to exceed 60 months after electing to participate. Deferred monthly benefits are held in the FRS Trust Fund and accrue interest. There are no required contributions by DROP participants.

For those members who elect participation in the Investment Plan, rather than the Pension Plan, vesting occurs at one year of service. These participants receive a contribution for self-direction in an investment product with a third party administrator selected by the State Board of Administration. Employer and employee contributions, including amounts contributed to individual member’s accounts, are defined by law, but the ultimate benefit depends in part on the performance of investment funds. Benefit terms, including contribution requirements, for the Investment Plan are established and may be amended by the Florida Legislature. The Investment Plan is funded with the same employer and employee contribution rates that are based on salary and membership class (Regular Class, Elected County Officers, etc.), as the FRS defined benefit plan. Contributions are directed to individual member accounts, and the individual members allocate contributions and account balances among various approved investment choices. Costs of administering the plan, including the FRS Financial Guidance Program, are funded through an employer contribution of 0.04 percent of payroll and by forfeited benefits of plan members.

The Sheriff recognizes pension expenditures in an amount equal to amounts paid to the Pension Plan, the HIS Plan and the investment plan, amounting to $4,102,679, $534,964 and $817,235 respectively, for the fiscal year ended September 30, 2016. The Sheriff’s payments for the Pension Plan and the HIS Plan after June 30, 2016, the measurement date used to determine the net pension liability associated with the Pension Plan and HIS Plan, amounted to $1,425,689 and $151,523, respectively. The Sheriff is not legally required to and does not accumulate expendable available resources to liquidate the retirement obligation related to its employees. Accordingly, the net pension liability and associated deferred outflows and deferred inflows are presented on the government-wide financial statements of the County, following requirements of GASB Statement No. 68, Accounting and Financial Reporting for Pensions – an amendment of GASB Statement No. 27, and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date – an amendment of GASB Statement No. 68.

The state of Florida annually issues a publicly available financial report that includes financial statements and required supplementary information for the FRS. The latest available report may be obtained by writing to the State of Florida Division of Retirement, Department of Management Services, P.O. Box 9000, Tallahassee, Florida 32315-9000, or from the website www.dms.myflorida.com/workforce_operations/retirement/publications.

Monroe County Sheriff’s office offers 457 Deferred Compensation Programs to all employees of the agency. Employees may participate in the plan through payroll deductions and the plan is funded by Mass Mutual Financial Group and AIG Valic group variable annuity contract. Contributions are invested at the employee’s direction through the options available under the program. Employees are fully vested at time of enrollment. The Monroe County Sheriff’s Office has no liability beyond the payment of bi-weekly payroll contributions.

Monroe County Sheriff’s office also offers a profit-sharing pension plan known as the 401(a) Discretionary Contribution Pension Plan. Only full-time employees of the Sheriff’s office classified as Telecommunications Officer, Telecommunications Supervisor, or Telecommunications Director are covered under the pension program established. Effective July 20, 2009, new hired employees will be exempt from the Plan. Those classes of employees are eligible to participate in the program on the first day of the 12-consecutive month period commencing on October 1.

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MONROE COUNTY, FLORIDA SHERIFF

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2016

Note 7—Retirement plan (continued)

The plan allows the agency to contribute ongoing non-elective contributions to each eligible employee’s account. The routine amount contributed to each employees account is the variance between FRS’s special risk retirement rate and the rate given to the FRS class-group that the Dispatcher’s fall into.

The Sheriff contributed $16,024 for the year ended September 30, 2016 and there were no employee contributions.

Note 8—Other postemployment benefits (OPEB) Plan

The Monroe County Board of County Commissioners (BOCC) administers a single-employer defined benefits healthcare plan (the “Plan”). Florida Statutes 112.0801 requires the County to provide retirees and their eligible dependents with the option to participate in the Plan if the County provides health insurance to its active employees and their eligible dependents. The Plan provides medical coverage, prescription drug benefits, and life insurance to both active and eligible retired employees. The Plan does not issue a publicly available financial report.

The BOCC may amend the plan design, with changes to the benefits, premiums and/or levels of participant contribution at any time. In an open session, on at least an annual basis and prior to the annual enrollment process, the BOCC approves the rates for the coming calendar year for the retiree and County contributions.

Eligibility for postemployment participation in the Plan is limited to full-time employees of the County, and the Constitutional Officers. Employees who retire as an active participant in the Plan and were hired on or after October 1, 2001 may continue to participate in the Plan by paying the monthly premium established annually by the BOCC. Employees who retire as an active participant in the plan, were hired prior to October 1, 2001, have at least ten years of full-time service with the County, and meet the retirement criteria of the Florida Retirement System (FRS), may maintain their group health insurance benefits with Monroe County following their retirement provided they contribute a premium of $5 per month for each year of creditable service with the FRS at time of retirement with Monroe County and will pay at a minimum $50 per month up to the maximum of $150 per month. Retirees who have met the requirements for early retirement, have not achieved age 60 and whose age and years of service do not equal 70 (rule of 70) must pay the standard monthly premium until the age criteria or the rule of 70 is met. At that time, the retiree’s cost of participation will be $5 for each year of creditable service with the FRS at time of retirement with Monroe County and will pay at a minimum $50 per month up to the maximum of $150 per month. Surviving spouses and dependents of participating retirees may continue in the plan if eligibility criteria specific to those classes are met.

The BOCC engages an actuarial firm on a biennial basis to determine the County’s actuarially determined annual required contribution and unfunded obligation. The Sheriff has no responsibility to the Plan other than to make the periodic payments determined by the BOCC. Further information about the Plan is available in the County’s Comprehensive Annual Financial Report which is published on the Clerk‘s website at www.clerk-of- the-court.com.

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MONROE COUNTY, FLORIDA SHERIFF

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2016

Note 9—Risk management

The Sheriff is exposed to various risks of loss related to tort; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The Sheriff participates in the coverage provided by the Board for Workers’ Compensation, Group Insurance, and Risk Management Internal Service Funds. Under these programs, Workers' Compensation provides $500,000 coverage per claim for regular employees. Workers’ Compensation claims in excess of the self-insured coverage are covered by an excess insurance policy. Risk Management has a $5,000,000 excess insurance policy for general liability claims with a $200,000 self-insured retention, and building property damage is covered for the actual value of the building with a deductible of $50,000. Deductibles for windstorm and flood vary by location. Monroe County purchases commercial insurance for claims in excess of coverage provided by the funds and for all other risks of loss. Settled claims have not exceeded this commercial coverage in any of the past three years. The Sheriff makes payments to the Workers' Compensation, Group Insurance and Risk Management Funds based on estimates of the amounts needed to pay prior and current year claims.

Note 10—Litigation

From time to time, the Sheriff is a party to various lawsuits and claims, which it is vigorously defends. Such matters arise out of the normal course of its operation, some of which are covered by insurance policies or by the Sheriff’s participation in the Florida Sheriff’s Self-Insurance Fund. While the results of litigation cannot be predicted with certainty, management believes the final outcome of such litigation will not have a material adverse effect on the Sheriff’s financial position.

Note 11—Lease commitments

Operating leases - The Sheriff leases office space, equipment and vehicles under operating lease agreements. These lease agreements include options to extend the leases for additional terms as well as cancellation provisions. Total lease payments made during the fiscal year ended September 30, 2016 were $5,322,206.

The following is a schedule by years of minimum future rentals under operating leases as of September 30, 2016:

Year Ending

September 30,

For those leases that are increased annually by the Consumer Price Index (CPI) and the lease agreement does not state a minimum or maximum rate for the remainder of the lease term, the same known lease expense is used for the remainder of the lease term in the future rental schedule above.

Note 12—Grants

The Sheriff is the recipient of grants that are subject to special compliance requirements and audits by the grantor agencies that may result in disallowed expense amounts. These amounts constitute a contingent liability of the Sheriff. The Sheriff does not believe any contingent liabilities to be material to the financial statements.

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MONROE COUNTY, FLORIDA SHERIFF

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL - GENERAL FUND

YEAR ENDED SEPTEMBER 30, 2016

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MONROE COUNTY, FLORIDA SHERIFF

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL - TRAUMA STAR

YEAR ENDED SEPTEMBER 30, 2016

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MONROE COUNTY, FLORIDA SHERIFF

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL - RADIO COMMUNICATIONS

YEAR ENDED SEPTEMBER 30, 2016

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MONROE COUNTY, FLORIDA SHERIFF

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL - HIDTA GRANTS FUND

YEAR ENDED SEPTEMBER 30, 2016