MONROE COUNTY, FLORIDA SHERIFF

BALANCE SHEET ‐ GOVERNMENTAL FUNDS

SEPTEMBER 30, 2017

MONROE COUNTY, FLORIDA SHERIFF

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS

YEAR ENDED SEPTEMBER 30, 2017

MONROE COUNTY, FLORIDA SHERIFF

STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES

AGENCY FUNDS

SEPTEMBER 30, 2017

MONROE COUNTY, FLORIDA SHERIFF

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

Note 3—Interfund receivables and payables

Interfund receivables and payables at September 30, 2017 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, 2017

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.

Grants Fund is restricted for Federal Emergency Management Agency funding which has been expended but not yet received which has specific eligibility requirements.

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

Florida Retirement System

As a general rule, membership in the Florida Retirement System (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.

FRS was created in Florida Statute Chapter 121. Amendments to all of the following retirement plans can only be made by an act of the Florida Legislature. Rules governing the operations and administration of the system may be found in Chapter 60S of the Florida Administrative Code (the "FAC"}, except the Investment Plan for which rules may be found in Chapter 19, FAC. The FAC is maintained by the Department of State.

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MONROE COUNTY, FLORIDA SHERIFF

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

Note 7—Retirement plan (continued)

Pension Plan

Description - The FRS was created to provide public employees a cost sharing, multiple- employer defined benefit plan (the "Pension Plan"). The Pension Plan is administered by the Florida Department of Management Services, Division of Retirement.

Benefits - The Pension Plan provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Retirement, disability and death benefits are based on age, average final compensation and years-of-service credit.

Members enrolled in the Pension Plan before July 1, 2011, will be vested, or eligible to receive future benefits after 6 years of creditable service. Substantial changes were made to the Pension Plan during fiscal year 2011, affecting new members enrolled by extending the vesting requirement. Therefore, on or after July 1, 2011 members will be vested, or eligible to receive future benefits, after 8 years of creditable service.

Regular class members, Senior Management Service class members and Elected Officers' class members enrolled before July 1, 2011 are eligible for normal retirement if they are vested and age 62 or if they have 30 years of creditable service regardless of age. They are entitled to

aretirement benefit payable monthly for life, equal to 1.6%, 2% and 3.0% respectively (3.33% for judges and justices) of their final average compensation based on the five highest years of salary, for each year of credited service. On or after July 1, 2011 the normal age of retirement increased to 65 or 33 years of creditable service regardless of age.

A regular class member may retire early if vested but under the required retirement age. However, the benefit will be reduced by 5 percent for each year between the age at retirement and the normal retirement age.

Funding Policy - Governmental employers' contributions are based on state-wide contribution rates. The employer contribution rates by job class for the periods from October 1, 2016 through June 30, 2017 and July 1, 2017 through September 30, 2017, respectively, were as follows: regular members -7.52% and 7.92%, special risk – 22.57% and 23.27%, special risk administrative support – 28.06% and 34.63%, senior management - 21.77% and 22.71% and, county elected officers - 42.47% and 45.50%. During the fiscal year ended September 30, 2017, the Monroe County Sheriff’s Office contributed to the plan an amount equal to 19.98% of covered payroll.

In addition to governmental employer contributions, all enrolled members of the Pension Plan are required to contribute 3.0% of their salary.

Investment Plan

Description - The Investment Plan, under Florida Statute 121.4501, provides an alternative to the Pension Plan. This is a defined contribution plan which is administered by the State Board of Administration.

These participants receive a contribution for self-direction inan investment product,with a third party administrator selected by the State Board of Administration. All benefits payable under the Investment Plan shall be paid solely from the member's individual account within the Investment Plan Trust Fund.

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MONROE COUNTY, FLORIDA SHERIFF

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

Note 7—Retirement plan (continued)

Benefits - The Investment Plan provides retirement, disability and death benefits to plan members and beneficiaries. Retirement, disability and death benefits are based on age, average finalcompensationandyears-of-servicecredit.

Members are vested, or eligible to receive future benefits at one year of service.

Retirement depends on your class of membership and the first date of hire. The same age and years-of-service credit applies as in the Pension Plan.

Upon retirement, the member may rollover vested funds to another qualified plan, structure a periodic payment under the Investment Plan, receive a lump-sum distribution, leave the funds invested for future distribution,or any combination of these options.

Disability coverage is provided to the member but must either transfer their investmentaccount balance to the Pension Plan when approved for disability retirement in order to receive guaranteed lifetime monthly benefits under the Pension Plan or remain inthe Investment Plan and rely upon the account balance for retirement income.

Funding Policy - Governmental employers and class members are required to make contributions, using the blended contribution rate, to the FRS for investment to pay future benefits to members and beneficiaries. These contributions are transferred to the FRS Trust Fund individual member accounts, and the individual members allocate contributions and account balances among various approved investment choices. The ultimate benefit depends in part on the performance of investment funds.

Deferred Retirement Option Program (the "DROP")

Description - DROP is a voluntary retirement program that is available only to FRS Pension Plan members who qualify for normal retirement. Under Florida Statute 121.091, the FRS administers DROP, which is a program that allows members to retire without terminating their employment.

Benefits - DROP allows eligible members to defer receipt of monthly retirement benefit payments while continuing employment with an FRS employer for a period not to exceed 60 months after electing to participate. While in DROP, employees simultaneously earn a salary while their monthly retirement benefits are held in the FRS Trust Fund and accrue interest. When employment terminates at the end of the approved DROP participation period, a DROP participant receives the DROP payout and begins receiving the monthly retirement benefit in the same amount determined at retirement, plus annual cost-of-living increases.

Funding Policy - The employer contribution rates for the periods from October 1, 2016 through June 30, 2017 and July 1, 2017 through September 30, 2017 for DROP participants are 12.99% and 13.26%, respectively. There are no required contributions by DROP participants.

Health Insurance Subsidy (the "HIS Plan")

Description - Florida Statute Chapter 112, established the HIS Plan, a cost-sharing multiple- employer defined benefit plan, to assist retired members in paying the costs of health insurance. This monthly benefit is administered by the Florida Department of Management Services, Division of Retirement.

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MONROE COUNTY, FLORIDA SHERIFF

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

Note 7—Retirement plan (continued)

Benefits - 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.

Funding Policy - 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.

The Monroe County Sheriff’s Office recognizes pension expenditures in an amount equal to amounts paid to the Pension Plan, the Investment Plan and the HIS Plan, amounting to $4,423,438, $559,535 and $828,297, respectively, for the fiscal year ended September 30, 2017. The Monroe County Sheriff’s Office payments for the Pension Plan and the HIS Plan after June 30, 2017, the measurement date used to determine the net pension liability associated with the Pension Plan and HIS Plan, amounted to $1,204,232 and $135,112, respectively.

The Monroe County Sheriff’s Office 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, effective October 1, 2014.

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, and P.O. Box 9000, Tallahassee, Florida 32315-9000. That report may be viewed on the Florida Department of Management Services website located at 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.

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 $15,750 for the year ended September 30, 2017 and there were no employee contributions.

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MONROE COUNTY, FLORIDA SHERIFF

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

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.

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.

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MONROE COUNTY, FLORIDA SHERIFF

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

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, 2017 were $5,191,088.

The following is a schedule by years of minimum future rentals under operating leases as of September 30, 2017:

Year Ending

September 30,

2017

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.

Hurricane Irma impacted the Monroe County Sheriff in September 2017. Due to the damage from Hurricane Irma, the Monroe County Sheriff Office will apply for Federal Emergency Management Assistance (FEMA) to assist with Hurricane expenditures. The Monroe County Sheriff anticipates receiving $4,492,425 related to fiscal year ending 2017 which is recorded as a receivable and a deferred inflow of resources. The Monroe County Sheriff also anticipates additional expenditures in excess of $2 million dollars related to Hurricane Irma in fiscal year ending 2018.

Note 13—Subsequent events

In December 2017, one of the Sheriff’s helicopters caught on fire. While the extent of the loss is not presently determinable, the Sheriff has insurance coverage which is adequate to fully cover the amount of loss.

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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, 2017

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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, 2017

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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, 2017