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COMPREHENSIVE ANNUAL FINANCIAL REPORT Fiscal Year Ended September 30, 2016

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  • COMPREHENSIVE ANNUAL FINANCIAL REPORT

    Fiscal Year Ended September 30, 2016

  • COMPREHENSIVEANNUAL FINANCIAL REPORT

    CITY OF HOLLYWOOD, FLORIDA For the Fiscal Year Ended September 30, 2016

    Prepared by Financial Services Department

    George R. Keller, Jr., Financial Services, Interim DirectorErnesto Acosta, CPA, Division Director General Accounting

    Shawn Burgess, CPA, City Treasurer Natalie Otto, CPA, Accounting Systems Manager General Accounting

    Mary Reidinger, Senior Accountant General Accounting Patricia Lazzaroni, Senior Accountant General Accounting

    Yolanda Maldonado-Juriga, Senior Accountant General Accounting Kametra Codio, Accountant General Accounting

    Dawn Gruber, Financial Systems Analyst General Accounting Jermaine Ewing, Accounting Specialist General Accounting

    Mary Baez, Senior Accountant Treasury Phyllis Shaw, Utilities Accounting Supervisor Public Utilities

    Horace McLarty, Sr. Human Resource & Risk Management Accounting Analyst Jackie Medina, Senior Accountant Community Development Division

  • CITY OF HOLLYWOOD, FLORIDA COMMISSION - MANAGER FORM OF GOVERNMENT

    SEPTEMBER 30, 2016

    CITY COMMISSION

    PETER BOBER, Mayor

    PETER HERNANDEZ, Vice Mayor - District 2

    PATRICIA ASSEFF, Commissioner - District 1

    TRACI CALLARI, Commissioner - District 3

    RICHARD BLATTNER, Commissioner - District 4

    KEVIN BIEDERMAN, Commissioner - District 5

    LINDA SHERWOOD, Commissioner - District 6

    CITY MANAGER

    WAZIR A. ISHMAEL, Ph.D.

    CITY ATTORNEY

    JEFFREY P. SHEFFEL

    Cover Photo: Slip picture – Boats moored at Hollywood Marina and a look from the inside of the Sun Trust building on Presidential Circle (formerly

    Academy Circle) in lower left.

  • City of Hollywood, Florida

    MISSION STATEMENT

    We are dedicated to providing municipal services for our diverse community in an atmosphere

    of cooperation, courtesy and respect.

    We do this by ensuring all who live, work and play in the City of Hollywood enjoy a high quality of life.

    DIVERSITY STATEMENT

    The City of Hollywood celebrates the diverse community it serves and embraces the differences in both the community

    and workforce.

    We are committed to the values of integrity, fairness and inclusiveness in our decisions, behaviors

    and service delivery.

  • The City of Hollywood has received a Certificate of Achievement for the last 41 consecutive years, fiscal years ended 1975 through 2015. Hollywood became the 29th municipality in the United States and the second city in Florida to receive this award when its first certificate was obtained for the City’s 1956 annual financial report.

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    CITY OF HOLLYWOOD, FLORIDA

    COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED SEPTEMBER 30, 2016

    TABLE OF CONTENTS

    Page No.

    I. INTRODUCTORY SECTION (UNAUDITED)

    Table of Contents 1-2 Letter of Transmittal 3-7 City of Hollywood Organizational Chart 8 II. FINANCIAL SECTION Independent Auditors’ Report 9-11 Management’s Discussion and Analysis (Unaudited) 13-25 BASIC FINANCIAL STATEMENTS GOVERNMENT-WIDE: Statement of Net Position 28-29 Statement of Activities 30-31

    FUND FINANCIAL STATEMENTS

    GOVERNMENTAL FUNDS: Balance Sheet 32-33 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 35 Statement of Revenues, Expenditures and Changes in Fund Balances 36-39 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 41

    PROPRIETARY FUNDS: Statement of Net Position 42-45 Reconciliation of the Statement of Net Position of Proprietary Funds to the Statement of Net Position 47 Statement of Revenues, Expenses and Changes in Net Position 48-49 Reconciliation of the Statement of Revenues, Expenses and Changes in Net Position of Proprietary Funds to the Statement of Activities 51 Statement of Cash Flows 52-55

    FIDUCIARY FUNDS: Statement of Fiduciary Net Position 56 Statement of Changes in Fiduciary Net Position 57

    Index to Notes to the Financial Statements 59-60 Notes to the Financial Statements 61-138

    REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED): Budgetary Comparison Schedule – General Fund 140-141 Budgetary Comparison Schedule – Beach Community Redevelopment Fund 142-143 Budgetary Comparison Schedule – Downtown Community Redevelopment Fund 144 Schedule of Funding Progress 145

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    CITY OF HOLLYWOOD, FLORIDA

    TABLE OF CONTENTS (Continued)

    Page No.

    REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED): Schedule of Changes in the Employer’s Net Pension Liability and Related Ratios 146-148 Schedule of the City’s Proportionate Share of the Net Pension Liability 149 Schedule of Contributions 150-151 Notes to the Required Supplementary Information 152-153

    COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES

    NONMAJOR GOVERNMENTAL FUNDS: Combining Balance Sheet 156-157 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 158-161

    NONMAJOR ENTERPRISE FUNDS: Combining Statement of Net Position 164-165 Combining Statement of Revenues, Expenses and Changes in Fund Net Position 167 Combining Statement of Cash Flows 168-169

    INTERNAL SERVICE FUNDS: Combining Statement of Net Position 172-173 Combining Statement of Revenues, Expenses and Changes in Net Position 175 Combining Statement of Cash Flows 176-177 FIDUCIARY FUNDS: Combining Statement of Fiduciary Net Position 179 Combining Statement of Changes in Fiduciary Net Position 180

    III. STATISTICAL SECTION (UNAUDITED)

    Index to Statistical Section 181 Net Position by Component – Last Ten Fiscal Years 182-183 Changes in Net Position – Last Ten Fiscal Years 184-187 Governmental Activities Tax Revenues by Source – Last Ten Fiscal Years 188 Fund Balances of Governmental Funds – Last Ten Fiscal Years 189 Changes in Fund Balances of Governmental Funds – Last Ten Fiscal Years 190-193 General Governmental Tax Revenues by Source – Last Ten Fiscal Years 195 Assessed Value and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years 196-197

    Property Tax Rates – Direct and Overlapping Governments – Last Ten Fiscal Years 198-199 Principal Taxpayers – Current Year and Nine Years Ago 200 Property Tax Levies and Collections – Last Ten Fiscal Years 201 Ratios of Outstanding Debt by Type – Last Ten Fiscal Years 202-203 Ratios of General Obligation Bonds/Note Debt Outstanding – Last Ten Fiscal Years 204 Computation of Direct and Overlapping Bonded Debt – General Obligation Bonds 205 Computation of Legal Debt Margin 205 Pledged-Revenue Coverage – Last Ten Fiscal Years 206 Demographic and Economic Statistics – Last Ten Fiscal Years 207 Principal Employers – Current Year and Nine Years Ago 208 Budgeted Full-Time Positions for City Employees by Function – Last Ten Fiscal Years 209 Operating Indicators by Function – Last Ten Fiscal Years 210-211 Capital Asset Statistics by Function – Last Ten Fiscal Years 212-215

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    PROFILE OF THE CITY

    Hollywood, incorporated in 1925, is a full service city located in Broward County on the southeastern coast of the State of Florida. The City comprises 30 square miles including 6 linear miles of Atlantic Ocean beaches. The 2016 permanent population of the City of Hollywood is estimated to be 146,155 (by the Bureau of Economic and Business Research, University of Florida) with a seasonal peak approaching 200,000. The City of Hollywood operates under a commission-manager form of government. The City Commission is composed of a mayor elected at large and six commissioners elected by district. The seven members of the City Commission serve four-year terms. In November 2010, voters approved changes in the City Charter which provide for staggered terms for the City Commissioners. Three of the six City Commissioners were elected to serve six-year terms to establish the staggered terms. In addition to general government services, the City also provides community planning and development, public safety, public works, culture and recreation services to its residents. Furthermore, the City’s water and sewer, stormwater, sanitation, golf, parking operations and records preservation activities are reported as enterprise funds.

    THE REPORTING ENTITY

    The financial reporting entity of the City includes all the funds of the City, as well as all of its component units and fiduciary funds. The Hollywood Community Redevelopment Agency (CRA) is a component unit, a legally separate entity for which the City government is financially accountable. Blended component units, although legally separate entities, are, in substance, part of the City’s operations. The Downtown Community Redevelopment District (DCRA) and the Beach Community Redevelopment District (BCRA), which are districts of the CRA, are being reported as special revenue funds, in accordance with State statute requirements, using the blended method.

    FACTORS AFFECTING ECONOMIC CONDITION

    Redevelopment – Several important documents, most importantly the City’s Comprehensive Plan, help guide the development future of the City based on (1) quality of life, (2) relationship to existing plans and regulations, (3) feasibility to prioritize policy and design alternatives and (4) geographic proximity to Port Everglades (over 80% of the Port is located in Hollywood), Fort Lauderdale-Hollywood International Airport (located only two miles from the City limits), and major transportation corridors (I-95, Turnpike, 441/SR7, etc.). While few vacant parcels exist in the City, many parcels can be characterized as “underdeveloped” and therefore appear to be “ripe” for redevelopment. Significant redevelopment activity in recent years included the following:

    Port Everglades – South Florida’s “Powerhouse port” is among the top cruise ports in the world. It has one of the most active containerized cargo ports in the United States, serving as South Florida’s main seaport for petroleum products such as gasoline and jet fuel.

    FPL Plant at Port Everglades – Florida Power & Light constructed a new $1.2 billion natural gas power plant at Port Everglades to replace a 1960’s era oil-fired plant. Completion of the new power plant was finalized in 2016.

    The Place at Hollywood and Hollywood Plaza – completed in early 2016, has over 300,000 square feet (sf) of new and redeveloped space. It is thriving with national retailers such as Wal-Mart, Pollo Tropical, TD Bank, Ross, Burlington and Bank of America.

    State Road 7 Roadway Project – scheduled to be completed in 2018, US-441/State Road 7 in Hollywood will feature six traffic lanes, landscaped safety medians, dry retention areas for stormwater runoff, new lighting and sidewalks, bicycle lanes and bus bays. This project is being undertaken by the Florida Department of Transportation (FDOT), Broward Metropolitan Planning Organization and the City. The City of Hollywood Department of Public Works has worked with FDOT to develop the planned dry retention areas into linear parks that will make State Road 7 visually appealing and safer for pedestrians, residents, businesses and motorists.

    Development of several condominium residential projects – added to the revitalization efforts throughout the City. The Hyde Resort & Residences was completed in 2016. Ongoing projects are further described in the Major Initiatives section later in this letter.

    Hyde Resort & Residences – Hyde Beach Resort consists of 367 luxury hotel units and 40 residential units. This $250 million project was developed by the Related Group and completed in 2016.

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    Margaritaville Hollywood Beach Resort – the City entered into a 99 year lease agreement with Margaritaville Hollywood Beach Resort. This $138 million, 17-story premier, “family-friendly” resort includes 349 hotel rooms, 1,056 parking spaces (600 public and 456 hotel/valet spaces), 25,500 sf of restaurant and retail space, a 22,600 sf ballroom, a full service spa and fitness area, a pool deck with a wave pool and a water slide pool. The hotel has a marina and control of all the beachfront cabanas in front of its property. Construction of this project began in July 2013, and was completed in September 2015. Starwood Capital is an equity partner in the project. In October 2015, Margaritaville Hollywood Beach Resort started to pay regular rent to the City which will total $1 million annually with increases of three (3) percent every 5 years. Property taxes generated by the property will be paid to the BCRA.

    Meliã Costa Hollywood – redeveloped the former Hollywood Grande site on Hollywood Beach into one of South Florida’s premiere mixed-use condo/hotel developments at a cost of $150 million. It features 304 condo hotel units, 11,000 sf of retail space, 24,000 sf of restaurant space, meeting space as well as a gym and spa along with a 225-car parking facility.

    Quantum Marine – a new headquarters designed within a Tree Preservation Area including a state-of-the-art facility with approximately 30,000 sf of office and warehouse space. Construction began in late 2015 and was completed in 2016.

    Property Taxes – Taxable assessed property values, as determined by the Broward County Property Appraiser, increased approximately 8.3% between fiscal years 2016 and 2015. The City’s operating tax millage rate has been 7.4479 mills since 2012. The increase in taxable assessed property values generated the increase in property tax collections noted with no millage rate increase. The overall effect of these changes resulted in an increase of $5.7 million in general fund property tax revenues in fiscal year 2016.

    FINANCIAL POLICIES AND PLANNING

    The City continues to see indicators of economic stabilization. The City’s objective of recovery through sustainability is more of a reality with a healthy fund balance in the General Fund. In July 2016, the City was advised of a taxable value increase of 9.97% reported by the Broward County Property Appraiser’s Office for the 2016 tax year (fiscal year 2017). In spite of this good news, revenue forecasts for fiscal year 2017 and beyond must continue to be conservative until several notable developments have been completed and placed on the tax rolls. After much anticipation THE PLACE at HOLLYWOOD, and the FPL Plant at Port Everglades projects were completed. Projects such as these provide a welcoming climate for economic and sustainable development.

    The restoration of the General Fund’s fund balance reflects the positive financial results achieved after many difficult policy decisions made in prior years. The City’s fund balance in the General Fund is the highest it has been in three decades allowing the City to end fiscal year 2016 with an audited fund balance of $49.7 million up from a low of $4.3 million to start fiscal year 2012. This is $22.5 million over the City’s recommended minimum fund balance of 17% of expenditures which is based on the Government Finance Officers’ Association’s recommended level of reserves. Maintaining healthy reserves helps ensure the City’s long-term financial stability and provides the City some financial flexibility. Intent on continuing this progress in fiscal year 2017, the City plans to maintain a healthy fund balance to ensure there is no repeat of the financial difficulties experienced by the City resulting in a declaration of financial urgency.

    The City’s fund balance policy, adopted by City Commission resolution in fiscal year 2011, is compliant with Governmental Accounting Standards Board (GASB) Statement No. 54, “Fund Balance Reporting and Governmental Fund Type Definitions.” In addition to providing compliance with GASB Statement No. 54, the City’s fund balance policy will assist in stabilizing the long-term financial position of the City by setting standards for the use and replenishment of fund balance reserves. This policy also provides structural balance to the City’s budget by limiting the use of reserves to cover recurring expenditures.

    The Fund Balance Policy sets a committed/assigned fund balance in the General Fund to reflect the City’s covenant to maintain a 5% fund balance for debt service reserve.

    The Fund Balance Policy sets an additional 5% fund balance target (within the committed fund balance definition) to provide for an economic stabilization reserve to protect the City from adverse financial impacts in the event of unexpected economic events.

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    As recommended by the Government Finance Officers Association and national rating agencies, the City’s Fund Balance Policy sets an unrestricted fund balance target of 17% of General Fund operating expenditures (approximately 2 months of operating expenditures). This unrestricted fund balance target includes the debt service reserve (5%) and the economic stabilization reserve (5%) previously mentioned.

    Progress continued by the City during fiscal year 2016 in building a healthy fund balance in the City’s General Fund. Due to conservative and realistic assumptions in revenue budgeting practices as well as cost cutting measures, fund balance inceased by $14.9 million at the end of fiscal year 2016. Fiscal year end fund balance in the General Fund was $49.7 million and is classified as $34 thousand nonspendable, $16.0 million committed, $2.8 million assigned and $30.9 million unassigned. The City’s spendable reserves increased from approximately $34.8 million at fiscal year end 2015 to $49.7 million at fiscal year end 2016 (20.0% and 29.8% respectively of expenditures and transfers out).

    Budget Projections – Multi-year budget projections based on an enhanced budget forecast model are currently being prepared by the City’s Budget Administration Division to forecast financial issues beyond the typical next year budget timeframe. This tool allows the City to adjust expenditure levels to those of available future revenues to prevent financial difficulties. A Revenue Estimating Committee, established in 2012, continues to help identify realistic revenue expectations to achieve an appropriate balance between future expenditures and revenues.

    Other Items of Note – Among other issues of continuing importance are issues dealing with employee compensation. The City completed contract negotiations on the Police, Fire and AFSCME contracts, the fiscal impacts of the labor negotiations were incorporated in the fiscal year 2016 operating budget and will continue to be an important component of future years’ operating budgets. Implicit in the City’s position of making sustainable financial decisions is a strategy of developing appropriate and workable compensation plans for the various bargaining units and non-represented employees with a competitive target salary strategy.

    Another positive result of the improvements in the City’s fiscal condition was maintaining its A1 rating by Moody’s on the City’s Capital Improvement Revenue and Refunding Bonds Series 2016A. The Beach Community Redevelopment Agency also received a rating increase from A3 to A2 from Moody’s for its Series 2015 Redevelopment Revenue and Refunding Bonds.

    The City is achieving positive results from the hard choices made in recent fiscal years beginning with the restoration of the fund balance in the General Fund, the restoration of employee compensation and benefits, the stabilization of its bond ratings and the restarting of its Capital Improvement Plan. As a result, the City will continue to move forward to solidify its finances, avoiding detours and obstacles along the road to financial sustainability.

    MAJOR INITIATIVES

    The Preserve at Emerald Hills – this development on the former site of Lake Eden will be a master planned community consisting of approximately 30 luxury townhomes and 77 luxury single family homes. The private community will also feature open recreational space for residents. This $60 million project is being developed by MG3 Developers and is currently under construction.

    Parkview at Hillcrest – an approximately 243 acre residential development joint project between Pulte Homes, Inc. and Concord Wilshire consisting of 645 single family homes and townhomes.

    Young Circle Commons – this $80 million project is an approved mixed-use development located at the southwest corner of Hollywood Boulevard and Young Circle. This development will include 166 upscale residential units, 103 hotel rooms with 30,000 sf of retail space on the first floor.

    Seaside Village – this $38 million project is a planned boutique style development including 15 waterfront condo units and 8 luxury single family homes.

    Hyde Beach House – a 2.4 acre site along Hollywood Beach’s intracoastal that will feature 342 luxury units and ground retail space.

    Hollywood Circle – is a planned 25-story mixed-use development located on Young Circle. The development will include 397 upscale rental apartments ideal for those seeking an exciting urban environment; The Circ, a uniquely branded 104-room boutique hotel; a 46,000 sf supermarket; and approximately 15,000 sf of additional prime retail space at the street level. This project is currently under construction.

  • CITY OF HOLLYWOOD, FLORIDA

    ORGANIZATIONAL CHARTAS OF SEPTEMBER 30, 2016

    - Public Utilities

    Chief Development Officer

    - Intergovernmental Affairs- Environmental Sustainability

    Assistant City ManagerPublic Safety

    City CommissionOffice of the City Attorney

    - Information Technology

    Assistant City ManagerSustainable Development

    - Financial Services

    Assistant City ManagerFinance and Administration

    - Development Services- Public Affairs & Marketing- Economic Development

    - City Clerk- Human Resources- Labor Relations- Public Works

    Residents of the City of Hollywood, Florida

    Chief Civic Affairs Officer City Manager

    - Fire Rescue & Beach Safety- Police Department

    - Parks, Recreation & Cultural Arts

    8

  • Marcum LLP 450 East Las Olas Boulevard Ninth Floor Fort Lauderdale, Florida 33301 Phone 954.320.8000 Fax 954.320.8001

    marcumllp.com

    9

    INDEPENDENT AUDITORS’ REPORT

    Honorable Mayor, City Commission and City Manager City of Hollywood, 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 the City of Hollywood, Florida (the City), as of and for the fiscal 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

    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 did not audit the financial statements of the City of Hollywood Firefighters’ Pension System and City of Hollywood Police Officers’ Retirement System (collectively, the Plans), which represent 54%, 58% and 37%, respectively, of the assets, net position/fund balance and revenues/additions of the aggregate remaining fund information. Those statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for the Plans is based solely on the reports of the other auditors. 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

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    relevant to the City’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 City’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, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial 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 thereof for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America.

    Other Matters

    Required Supplementary Information

    Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 13 through 25, the schedules of changes in the City’s net pension liability and related ratios, the schedules of City’s proportionate share of the net pension liability, the schedules of City contributions, the other post-employment benefits schedule of funding progress, and budgetary comparison schedules for the general fund and major special revenue funds on pages 140 through 153 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 and the other auditors 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.

    Supplementary and Other Information

    Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual fund statements and schedules and the introductory and statistical sections are presented for purposes of additional analysis and are not a required part of the basic financial statements.

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    The combining and individual fund statements and schedules are the responsibility of management and were derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such 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 by us and the other auditors. In our opinion, based on our audit, the procedure performed as described above, and the reports of the other auditors, and the combining and individual fund statements 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 it.

    Other Reporting Required by Government Auditing Standards

    In accordance with Government Auditing Standards, we have also issued our report dated June 19, 2017 on our consideration of the City's internal control over financial 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.

    Fort Lauderdale, FL June 19, 2017

  • (THIS PAGE INTENTIONALLY LEFT BLANK)

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    MANAGEMENT’S DISCUSSION AND ANALYSIS (Unaudited – See accompanying independent auditors’ report)

    The City offers readers of its financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended September 30, 2016. We encourage readers to consider the information presented here in conjunction with the letter of transmittal and financial statements.

    FINANCIAL HIGHLIGHTS

    Under the Government-wide Statements Section:

    The liabilities and deferred inflows of resources of the City exceeded its assets and deferred outflows of resources at the close of fiscal year 2016 by $75.1 million, net result of $1,054.5 million in liabilities and deferred inflows and $979.4 million in assets and deferred outflows.

    The City’s total net position increased by approximately $27.2 million in fiscal year 2016 primarily due to an increase in net position of business-type activities of $30.1 million after the effects of an adjustment to beginning net position of $10.5 million. (See Note IV.H.3.)

    The deficit in unrestricted net position for governmental activities was at $457.1 million, an increase of $17.1 million when compared to the prior year.

    The City’s total debt reflected a net increase of $16.6 million during the current fiscal year. During fiscal year 2016, governmental activities and business-type activities incurred new debt of approximately $95.1 million and $8.3 million, respectively. Of the combined $103.4 million in new debt, $61.4 million was used to refund old debt.

    Under the Fund Statements Section:

    As of the end of fiscal year 2016, the City’s governmental funds reported combined ending fund balances of $136.7 million, an increase of $53.8 million which was a result of the following:

    o Increase of $14.9 million in the General Fund due primarily to an increase in property taxes of $5.7 million and a decrease in expenditures of $6.6 million.

    o Increase of $14.9 million in General Capital Project Fund due to proceeds from debt issuance. o Increase of $21.9 million in the Beach Community Redevelopment Fund primarily due to increase in

    property taxes and bond proceeds. o Increase of $2.1 million on other governmental funds.

    During the year, the City’s governmental expenditures and financing uses (including approximately $53.9 million for retirement of debt) totaled $274.1 million compared to $327.8 million generated in revenues and other financing sources (including approximately $92.1 million from issuance of debt) for governmental programs.

    At the end of fiscal year 2016, fund balance for the General Fund was $49.7 million or 31.1% of General Fund expenditures and 29.8% of General Fund expenditures and transfers out. Of this balance, $16.0 million was committed for debt service reserves and economic stabilization reserves, $2.8 million was assigned for the subsequent year’s budget and $30.9 million was unassigned and available for new spending.

    OVERVIEW OF THE FINANCIAL STATEMENTS

    This annual report follows a format consisting of four parts – Management’s Discussion and Analysis (this section), the basic financial statements, Required Supplementary Information, and an optional section that presents combining statements for non-major governmental funds, non-major enterprise funds and internal service funds. The basic financial statements include two kinds of statements that present different views of the City.

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    The first two statements are government-wide financial statements that provide both long-term and short-term information about the City’s overall financial status.

    The remaining statements are fund financial statements that focus on individual parts of the City government, reporting the City’s operations in more detail than the government-wide statements.

    o The governmental fund statements tell how general government services like public safety were financed in the short-term, as well as what remains for future spending.

    o Proprietary fund statements offer short and long-term financial information about the activities the government operates like businesses, such as the water and sewer utility.

    o Fiduciary fund statements provide information about the financial relationships – such as the retirement plans for the City’s employees, in which the City acts solely as a trustee or agent for the benefit of others, to whom the resources in question belong.

    The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data. The statements are followed by a section of unaudited Required Supplementary Information that further explains and supports the information in the financial statements.

    Following is a summary of the major features of the City’s financial statements, including the portion of the City government they cover and the types of information they contain. The remainder of this overview section of management’s discussion and analysis explains the structure and contents of each of the statements.

    Major features of the Government-wide and Fund Financial Statements

    Scope

    Required Statement of Net Position Balance Sheet Statement of Net Position Statement of financial Statement of Activities Statement of Revenues, Statement of Revenues, Fiduciary Net Positionstatements Expenditures and Expenses and Changes Statement of

    Changes in Fund Balances in Net Position Changes in FiduciaryStatement of Cash Flows Net Position

    Accounting basis and measurement focus

    Type of asset/ liability information

    Type of inflow/ outflow information

    Instances in which the Cityis the trustee or agent forsomeone else's resources,such as the retirement plansfor City employees

    All assets and liabilities, bothfinancial and capital, andshort-term and long-term

    All assets and liabilities,both short-term and long-term.

    Fund Statements

    Government-wide Statements Governmental Funds Proprietary Funds Fiduciary Funds

    Entire City government(except fiduciary funds) andthe City's component units

    The activities of the City thatare not proprietary or fiduciary,such as police, fire, and parks

    Activities the City operatessimilar to private businesses,such as the water and sewersystem

    All revenues and expensesduring year, regardless ofwhen cash is received or paid

    Revenues for which cash isreceived during or soon after theend of the year; expenditureswhen goods or services havebeen received and payment isdue during the year or soonthereafter

    All revenues and expensesduring year, regardless ofwhen cash is received or paid

    All additions and reductionsduring year, regardless ofwhen cash is received orpaid

    Accrual accounting and economic resources focus

    Modified accrual accounting and current financial resources focus

    Accrual accounting and economic resources focus

    Accrual accounting and economic resources focus

    All assets and liabilities, bothfinancial and capital, andshort-term and long-term

    Only assets expected to be usedup and liabilities that come dueduring the year or soonthereafter; no capital assetsincluded

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    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 private-sector business.

    The statement of net position presents information on all of the City’s assets/deferred outflows and liabilities/deferred inflows, 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 financial 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 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, public works, transportation, economic environment, physical environment, culture and recreation and emergency and disaster relief. The business-type activities of the City include water and sewer, sanitation, stormwater, golf, parking and records preservation activities.

    The government-wide financial statements include not only the City itself (the primary government), but also two districts of the legally separate Community Redevelopment Agency (CRA). Financial information for these component units is blended with the financial information presented for the primary government itself, since board members are the same as the members of the City Commission and the CRA provides services that exclusively benefit certain areas of the City.

    In addition, the City has three defined benefit pension plans and one defined contribution pension plan established for the exclusive benefit of its employees and beneficiaries. The CRA has a defined contribution plan for its employees. The pension plans are reported as fiduciary funds in the fund financial statements of this report, but are not included in the government-wide statements.

    FUND FINANCIAL STATEMENTS – A fund is a grouping of related accounts that is 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. These statements focus on individual parts of the City government, reporting the City’s operations in more detail than the government-wide statements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary 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.

  • 16

    The City maintains twelve (12) 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, General Capital Projects Fund, Beach Community Redevelopment Fund and Downtown Community Redevelopment Fund all of which are considered to be major funds. Data from the other eight (8) governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in the report.

    The City adopts an annual appropriation budget for all funds. A budgetary comparison statement has been provided for the General Fund as Required Supplementary Information in this report to demonstrate compliance with budget. Also included as Required Supplementary Information are budgetary comparison statements for the Beach Community Redevelopment Fund and the Downtown Community Redevelopment Fund reflecting annual appropriations adopted by the CRA Board.

    PROPRIETARY FUNDS – The City maintains two different types of proprietary 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 water and sewer, stormwater, sanitation, golf, parking and records preservation operations. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for its central services and insurance operations. Because both of these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements.

    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 each of its operations that are considered to be major funds of the City. Both internal service funds balances have been incorporated into the functions of the governmental activities that benefited from these services. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report.

    FIDUCIARY FUNDS – Fiduciary funds are used to account for resources held for the benefit of parties outside the City. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds.

    NOTES TO THE FINANCIAL STATEMENTS – The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements.

    OTHER INFORMATION – In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information such as a budgetary comparison schedule for the General Fund and data concerning the City’s progress in funding its obligation to provide pension and other postemployment benefits to its employees.

    GOVERNMENT-WIDE FINANCIAL ANALYSIS

    The two government-wide statements report the City’s net position and how it has changed. Table 1 presents net position – the difference between the City’s assets/deferred outflows and liabilities/deferred inflows.

    Over time, increases or decreases in net position may serve as one way to measure the City’s financial health or position.

    Items that may affect revenues are economic conditions, changes in funding from intergovernmental and grant revenues and market impacts on investment income. Factors such as changes in service demand levels, salary increases and inflation affect expenses.

    Other nonfinancial factors such as changes in the City’s property tax base and the condition of the City’s infrastructure should be considered in assessing the overall health of the City.

  • 17

    Table 1 Summary of Net Position

    As of September 30, 2016 and 2015 ($ in thousands)

    Current and Other Assets $ 187,827 $ 138,566 $ 211,483 $ 197,789 $ 399,310 $ 336,355Capital Assets 171,472 174,947 (1) 317,397 307,245 (1) 488,869 482,192

    Total Assets 359,299 313,513 528,880 505,034 888,179 818,547

    Deferred Outflows ofResources 79,059 45,184 12,170 7,618 91,229 52,802

    Long-term LiabilitiesOutstanding 722,833 630,376 239,901 242,318 962,734 872,694

    Other Liabilities 46,989 53,973 32,117 31,016 79,106 84,989Total Liabilities 769,822 684,349 272,018 273,334 1,041,840 957,683

    Deferred Inflows ofResources 11,376 14,261 1,305 1,740 12,681 16,001

    Net Position:Net Investment in

    Capital Assets 65,085 63,650 (1) 145,990 125,408 (1) 211,075 189,058Restricted 49,191 36,472 62,157 63,303 111,348 99,775Unrestricted (Deficit) (457,116) (440,035) 59,580 48,867 (397,536) (391,168)

    Total Net Position $ (342,840) $ (339,913) $ 267,727 $ 237,578 $ (75,113) $ (102,335)

    (1) Impacted by prior period adjustment (See Note IV.H.3).

    GovernmentalActivities Total

    2016 2015

    Business-typeActivities

    2016 2015 2016 2015

    By far the largest portion of the City’s assets (55%) reflects its investment in capital assets (e.g., land, buildings, machinery, and equipment). 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.

    A portion of the City’s net position, $111.3 million represents resources that are subject to external restrictions on how they may be used.

    During the year, the City’s governmental activities experienced an increase in total assets of $45.8 million primarily as a result of an increase in investment due to debt financing. Long-term liabilities outstanding also experienced a large increase of $92.5 million primarily due to new debt and increases in net pension liability and other post employment benefit liability.

    Business-type activities had a banner year with its net position increasing by $30.1 million.

    In summary, the combined net position of the City increased by $27.2 million.

  • 18

    The following charts illustrate net position for business-type activities.

    20406080

    100120140160180200220240

    Water & Sewer Sanitation Parking

    Millions

    BUSINESS TYPE ACTIVITIESENTERPRISE FUNDS

    NET POSITION BY SOURCE

    2016 2015

    123456789

    101112

    Golf Stormwater RecordsPreservation

    Millions

    BUSINESS TYPE ACTIVITIESNONMAJOR ENTERPRISE FUNDS

    NET POSITION BY SOURCE

    2016 2015

  • 19

    Table 2 presents a summary of the City’s operations for fiscal year 2016 with comparative information for fiscal year 2015.

    Table 2 Summary Changes in Net Position

    As of September 30, 2016 and 2015 ($ in thousands)

    Revenues:Program Revenues:

    Charges for Services $ 52,927 $ 50,859 $ 119,566 $ 127,764 $ 172,493 $ 178,623Operating Grants and

    Contributions 2,692 2,013 0 29 2,692 2,042Capital Grants and

    Contributions 862 1,258 4,807 2,933 5,669 4,191General Revenues:

    Property Taxes 74,482 68,240 0 0 74,482 68,240Other Taxes 76,692 74,215 0 0 76,692 74,215

    Grants and Contributions notRestricted to SpecificPrograms 6,984 6,883 0 0 6,984 6,883

    Other 7,722 2,487 2,879 2,461 10,601 4,948Total Revenues 222,361 205,955 127,252 133,187 349,613 339,142

    Expenses:General Government 37,369 26,828 0 0 37,369 26,828Public Safety 145,365 135,740 0 0 145,365 135,740Public Works 15,566 13,647 0 0 15,566 13,647Transportation 3,698 2,604 0 0 3,698 2,604Economic Environment 6,143 22,407 0 0 6,143 22,407Physical Environment 787 5,680 0 0 787 5,680Culture and Recreation 14,970 14,460 0 0 14,970 14,460Interest and Fiscal Charges 5,565 7,034 0 0 5,565 7,034Water 0 0 27,398 24,353 27,398 24,353Sewer 0 0 41,179 41,869 41,179 41,869Sanitation 0 0 12,421 11,501 12,421 11,501Stormwater 0 0 2,230 2,155 2,230 2,155Golf 0 0 2,374 2,474 2,374 2,474Parking 0 0 7,320 6,588 7,320 6,588Other 0 0 6 4 6 4

    Total Expenses 229,463 228,400 92,928 88,944 322,391 317,344

    Increase (Decrease) inNet Position BeforeTransfers (7,102) (22,445) 34,324 44,243 27,222 21,798

    Transfers In (Out) 4,175 6,763 (4,175) (6,763) 0 0

    Increase (Decrease) inNet Position (2,927) (15,682) 30,149 37,480 27,222 21,798

    Net Position - October 1as Restated (Note IV.H.3.) (339,913) (319,731) 237,578 206,137 (102,335) (113,594)

    Net Position - September 30 $ (342,840) $ (335,413) $ 267,727 $ 243,617 $ (75,113) $ (91,796)

    20152016 2015

    GovernmentalActivities Total

    Business-typeActivities

    2016 2015 2016

  • 20

    GOVERNMENTAL ACTIVITIES – Governmental activities decreased the City’s net position by $7.4 million. The decrease in governmental activities net position was due to expenses of $229.4 million exceeding revenues and transfers in of $226.5 million plus a prior period adjustment of $4.5 million (see Note IV.H.3.). The following describes the changes in revenues and expenses:

    Total revenues of $222.4 million for governmental activities showed an overall increase of $16.4 million due to:

    Increase in property taxes of $6.2 million during the year, as a result of an 8.3% tax increase in the taxable assessed values with no increase in the operating millage rate levied.

    Increase of $2.5 million collected for other taxes due to improving economy.

    Increase of $2.1 million in charges for services is due to increase in level of services provided.

    Increase in other revenues and grants of $5.6 million.

    General government expenses increased $10.6 million from fiscal year 2015 mostly due to increase in accrued leave, OPEB, disposal of assets and net pension liability.

    Increase of $9.7 million in public safety expenses during fiscal year 2016 was due to impact of increases in personal services costs from wage and fringe benefit increases required by collective bargaining agreements for police and fire approved during fiscal year 2016.

    Increase of $2.3 million in public works and culture and recreation expenses in 2016 resulted from an overall budgeted increase in expenditures included in the fiscal year 2016 budget.

    Increase of $1.1 million in transportation expenses noted in 2016 resulted from an overall budgeted increase in expenditures included in the 2016 adopted budget.

    Decreases of $21.2 million in both economic environment and physical environment expenses resulted from decreased availability of funding for these areas; the majority of the decrease was attributable to the Beach Community Redevelopment Fund. (In fiscal year 2015, the Beach Community Redevelopment Fund made large payments to Margaritaville development for economic environment and physical environment that did not reoccur in fiscal year 2016).

    Decrease of $1.5 million in interest and fiscal charges due to refinancing of various loans and bonds.

    The following chart compares program revenues for governmental activities for fiscal year 2016:

    Charges forServices24%

    Grants &Contributions

    5%

    Property Taxes34%

    Other Taxes34%

    Other3%

    GOVERNMENTAL ACTIVITIES REVENUE BY SOURCE FISCAL YEAR 2016

  • 21

    The following chart illustrates expenses by source for governmental activities for fiscal year 2016.

    BUSINESS-TYPE ACTIVITIES – Business-type activities net position increased by approximately $24.1 million due to strong operating results from the Water and Sewer Utility which contributed $30.1 million of the overall increase in net position realized. However, there was a $2.3 million prior period adjustment to reduce beginning net position in the Water and Sewer Utility Fund and $3.7 million to the Parking Enterprise Fund (See Note IV.H.3.). Depreciation charges of $21.2 million were $2.2 million higher than the prior fiscal year. Increases in expenses for these activities were approximately $1.5 million of which $.8 million was attributable to the Water and Sewer Utility.

    During fiscal year 2016, business-type activities recorded transfers of approximately $5.3 million for payments in lieu of taxes to the City’s General Fund.

    The following charts show revenues and expenses for business-type activities for fiscal year 2016.

    GeneralGovernment

    16%

    Public Safety63%

    Public Works7%

    Transportation2%

    Economic Environment

    3%

    Culture &Recreation

    6% Other3%

    GOVERNMENTAL ACTIVITIES EXPENSE BY SOURCE FISCAL YEAR 2016

    Charges for Services

    94%

    Capital Grants &

    Contributions4%

    Other2%

    BUSINESS-TYPE ACTIVITIES REVENUE BY SOURCE FISCAL YEAR 2016

  • 22

    FINANCIAL ANALYSIS OF CITY 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 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 a government’s net resources available for spending at the end of the fiscal year.

    The General Fund is the chief operating fund of the City. At the end of fiscal year 2016, total fund balance of the General Fund was $49.7 million and was classified as $16.0 million committed, $2.8 million assigned and $30.9 million unassigned. The City’s minimum unrestricted fund balance is 18.8% of General Fund operating expenditures. Fund balances comprised of committed, assigned and unassigned amounts represent 31.1% of General Fund operating expenditures.

    During the current fiscal year, the fund balance for the City’s General Fund increased by $14.9 million. This increase was due to an increase in property taxes of $5.8 million, increase in other revenues of $2.5 million and a reduction in expenditures of $6.6 million.

    The General Capital Projects fund balance of $16.3 million represents unavailable assets held for sale and committed, restricted and assigned funds for future capital projects.

    The BCRA records overlapping governmental revenue and grants for financing redevelopment activity in the beach redevelopment district. Due to the multi-year nature of redevelopment activities, funds may be accumulated for the purpose of providing funding for ongoing or planned construction projects. Fund balance for this fund totaled approximately $31.3 million at September 30, 2016 and is restricted for specified activities of the fund. Fund balance increased by $22.0 million during the current fiscal year from property taxes and bond proceeds.

    The DCRA records overlapping governmental revenue and grants for financing redevelopment activity in the downtown redevelopment district. Due to the multi-year nature of redevelopment activities, funds may be accumulated for the purpose of providing funding for ongoing or planned construction projects. Fund balance for this fund totaled approximately $3.5 million at September 30, 2016 and is restricted for specified activities of the fund. Fund balance decreased by $0.3 million during the current fiscal year due to an increase in expenditures offset by an increase in revenues.

    Water30%

    Sewer44%

    Sanitation13%

    Stormwater2%

    Golf3%

    Parking8%

    BUSINESS-TYPE ACTIVITIES EXPENSE BY SOURCE FISCAL YEAR 2016

  • 23

    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 Water and Sewer Utility Fund and Sanitation Enterprise Fund at the end of the fiscal year amounted to $39.8 million and $4.9 million, respectively. The City’s Regional Wastewater Treatment Facility provides services to residents of the City and those of six (6) other jurisdictions in southern Broward County. The terms and conditions of these services are set in Large User Wastewater Agreements entered into with those local governments.

    The Parking Enterprise Fund had unrestricted net position at fiscal year-end of $2.5 million. BCRA and the Parking Enterprise Fund have an interlocal agreement where BCRA makes up any revenue shortfall that the Parking Enterprise Fund has below a baseline revenue amount. The interlocal agreement was entered into to offset negative impacts to parking revenue from BCRA development activities at the beach. In fiscal year 2016, BCRA transferred $1.1 million to the Parking Enterprise Fund.

    GENERAL FUND BUDGETARY HIGHLIGHTS

    During the year, the City budget was amended for the following purposes:

    Revenue budgets were increased by approximately $154,391 in total due to expected fiscal year 2016 collections exceeding original budget estimates for licenses and permits, charges for services and miscellaneous revenues. However, these increases were offset by a reduction in intergovernmental revenues.

    Offsetting budget appropriations among multiple accounts totaling $24.3 million which resulted in no net change in appropriations.

    Total revenues for the year were higher than the amended estimated revenues by approximately $10.3 million. The most significant variances were attributed to actual revenues above budget by $2.8 million for property taxes, $2.7 million for charges for services, $1.9 million for licenses and permits, $2.3 million for intergovernmental revenues and $.6 million for interest, other taxes and miscellaneous revenues.

    Overall, General Fund expenditures were less than final budgeted expenditures by $50.0 million. This positive variance was due primarily to actual costs being less than expected; general government for $1.3 million, public safety for $2.3 million, public works for $77 thousand, transportation for $148 thousand, economic environment for $200 thousand, culture and recreation for $7 thousand and $46.0 million for contingencies.

    General Fund balance at year end was $49.7 million or $14.9 million higher than beginning fund balance.

    CAPITAL ASSETS 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 $488.9 million (net of accumulated depreciation) as presented in Table 3. This investment in capital assets includes land, buildings and system improvements, machinery and equipment, park facilities, streets, roads, and bridges. The total increase in the City’s investment in capital assets for fiscal year 2016 was 1.4% or $6.7 million (a less than 2.0% decrease for governmental activities and a 3.3% increase for business-type activities).

    The most notable capital asset event occurring during the year was a net increase of $9.2 million in buildings and improvements for business-type activities indicating completed projects from an aggressive construction program underway in the Water and Sewer Utility Fund. Governmental activities reflect an increase of construction in progress of $3.0 million due to ongoing projects of which $2.3 million is related to the Sage Beach improvement project.

  • 24

    Table 3 Capital Assets

    As of September 30, 2016 and 2015 ($ in thousands)

    Land $ 37,336 $ 35,395 $ 5,814 $ 5,814 $ 43,150 $ 41,209Buildings and

    Improvements - net 87,632 96,732 279,865 270,669 (1) 367,497 367,401Machinery and

    Equipment - net 15,531 15,277 1,844 1,835 (1) 17,375 17,112Infrastructure - net 24,562 24,160 0 0 24,562 24,160Construction in Progress 6,410 3,385 (1) 29,874 28,927 (1) 36,284 32,312

    Total $ 171,471 $ 174,949 $ 317,397 $ 307,245 $ 488,868 $ 482,194

    (1) Prior period adjustment (See Note IV.H.3)

    2016 2015

    Governmental Business-typeActivities Activities Total

    2016 2015 2016 2015

    Additional information on the City’s capital assets can be found in Note III.E. of this report.

    LONG-TERM DEBT – At the end of fiscal year 2016, the City had total bonded debt outstanding of $326.9 million. Of this amount, $20.8 million is special obligation bonds and loans, $15.0 million in capital leases and $41.3 million in a general obligation note. The remainder of the City’s debt represents bonds and loans secured solely by specified revenue sources (i.e., revenue bonds).

    Table 4 Outstanding Debt

    As of September 30, 2016 and 2015 ($ in thousands)

    General Obligation Bondsand Loans $ 41,372 $ 43,922 $ 0 $ 0 $ 41,372 $ 43,922

    Special Obligation Bondsand Loans 18,642 42,715 2,130 2,482 20,772 45,197

    Revenue Bonds and Loans 93,392 52,436 156,308 165,123 249,700 217,559Capital Leases 7,926 6,541 7,115 7,990 15,041 14,531

    161,332 145,614 165,553 175,595 326,885 321,209Bond Premium 11,354 0 5,853 6,242 17,207 6,242

    Total $ 172,686 * $ 145,614 $ 171,406 $ 181,837 $ 344,092 * $ 327,451

    * Difference between this total and total presented in the Government-Wide Statement of Net Position is the fair value of a swapof $1,219,446. See Note III.I.1.

    2015

    GovernmentalActivities Total

    Business-typeActivities

    2016 2015 2016 20152016

    During fiscal year 2016, the City’s total debt increased by $16.6 million. Due to issuance of new debt and the repayment of existing debt, governmental activities experienced a net increase in debt of $27.1 million and business-type activities experienced a reduction of $10.4 million.

    The City maintains an “A1” rating from Moody’s for its most recent borrowing, the $36,890,000 Capital Improvement Revenue and Refunding Bonds, Series 2016A. On March 29, 2017 the Beach Community Redevelopment Agency also received a rating increase from A3 to A2 from Moody’s for its Series 2015 Redevelopment Revenue and Refunding Bonds.

    Additional information on the City’s capital leases and long-term debt can be found in Notes III.H. and III.I. of this report.

  • 25

    ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES

    The unemployment rate in the City averaged 4.6% during fiscal year 2016 based on information obtained from the U. S. Department of Labor, Bureau of Labor Statistics, and is lower than the average rate of 5.3% a year ago. This rate is lower than the state and national average unemployment rate of approximately 4.9%.

    Inflationary trends in the region increased on average 1.5% for fiscal year 2016 which is higher than the 0.9% shown in similar national indices (i.e. Consumer Price Index).

    All of these factors were considered in preparing the City’s budget for fiscal year 2017. The budget was also developed using conservative assumptions of revenues and moderate growth for expenditures. The City adopted an operating millage rate of 7.4479 which was unchanged from fiscal year 2016. As a result of a 9.97% increase in the City’s taxable property values, property tax revenues are expected to increase by approximately $8.9 million.

    Fiscal year end fund balance in the General Fund was $49.7 million and is classified as $16.0 million committed, $2.8 million assigned and $30.9 million unassigned.

    REQUESTS FOR INFORMATION

    This financial report is designed to provide a general overview of the City’s finances for all those with an interest in the government’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 Director of Financial Services, 2600 Hollywood Boulevard, Hollywood, Florida 33020.

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  • Governmental Business-typeActivities Activities Total

    ASSETS:Cash and Cash Equivalents $ 32,300 $ 101,630 $ 133,930Investments 122,708,922 110,855,000 233,563,922Accounts Receivable - Net of Allowances 4,454,440 16,897,758 21,352,198Notes Receivable - Net of Allowances 26,654,132 0 26,654,132Reinsurance Receivable 469,191 0 469,191Due from External Party 86,221 0 86,221Due from Other Governments 3,006,223 0 3,006,223Internal Balances (5,271,623) 5,271,623 0Inventories of Supplies - at cost 146,399 1,398,797 1,545,196Prepaid Items 456,015 0 456,015Assets Held for Sale 1,585,590 0 1,585,590Restricted Assets:

    Cash and Cash Equivalents 1,221,990 52,961,451 54,183,441Investments 28,779,416 23,437,551 52,216,967Interest Receivable 0 107,953 107,953Accounts Receivable - Net of Allowances 0 37,213 37,213Notes Receivable - Net of Allowances 2,381,832 0 2,381,832Assets Held for Sale 1,116,925 0 1,116,925

    Assessments - Net of Allowances 0 414,550 414,550Capital Assets:

    Non Depreciable 43,746,061 35,687,788 79,433,849Depreciable - Net 127,725,706 281,709,054 409,434,760

    TOTAL ASSETS 359,299,740 528,880,368 888,180,108

    DEFERRED OUTFLOWS OF RESOURCES:Deferred Pension Contributions 30,564,570 5,886,785 36,451,355Deferred Change in Pension Assets 32,016,782 4,384,840 36,401,622Deferred Change in Pension Liability 12,604,388 1,296,484 13,900,872Deferred Charge on Refunding 2,653,718 601,907 3,255,625Deferred Derivative Instrument 1,219,446 0 1,219,446

    TOTAL DEFERRED OUTFLOWS OF RESOURCES 79,058,904 12,170,016 91,228,920

    LIABILITIES:Vouchers Payable 6,458,305 2,284,437 8,742,742Accrued Wages 1,630,250 295,198 1,925,448Construction Contracts 1,995,352 237,119 2,232,471Due to Other Governments 1,578,361 119,923 1,698,284Interest Payable 1,300,506 127,140 1,427,646Unearned Revenue 2,222,701 145,026 2,367,727Deposits Payable 834,140 93,802 927,942Payable from Restricted Assets:

    Construction Contracts 952,873 5,348,240 6,301,113Interest Payable 0 690,703 690,703Landfill Closure Cost Obligation 87,677 0 87,677Deposits 0 8,362,130 8,362,130

    (Continued)

    CITY OF HOLLYWOOD, FLORIDA

    STATEMENT OF NET POSITIONSEPTEMBER 30, 2016

    28

  • (Continued)

    Governmental Business-typeActivities Activities Total

    LIABILITIES (Continued):Noncurrent Liabilities:

    Due Within One Year:Compensated Absences $ 9,567,642 $ 1,742,342 $ 11,309,984Claims Payable 6,027,672 0 6,027,672Bonds, Loans and Leases Payable 14,033,263 12,671,662 26,704,925Other Liabilities 300,000 0 300,000

    Due in More Than One Year:Compensated Absences 4,866,492 628,309 5,494,801Claims Payable 8,722,000 0 8,722,000Bonds, Loans and Leases Payable 159,872,147 158,734,764 318,606,911Landfill Closure Obligation 87,677 0 87,677Other Postemployment Benefits Obligation 161,429,929 32,913,614 194,343,543Net Pension Liability 387,855,377 47,623,506 435,478,883

    TOTAL LIABILITIES 769,822,364 272,017,915 1,041,840,279

    DEFERRED INFLOWS OF RESOURCES:Revenue Received in Advance 2,129,162 0 2,129,162Deferred Change in Pension Assets 9,246,726 1,304,902 10,551,628

    TOTAL DEFERRED INFLOWS OF RESOURCES 11,375,888 1,304,902 12,680,790

    NET POSITION:Net Investment in Capital Assets 65,085,098 145,990,417 211,075,515Restricted for:

    Future Capital Projects 15,029,712 49,312,021 64,341,733Future Debt Service 206,714 2,844,646 3,051,360Future Grants and Special Programs 2,183,466 0 2,183,466Future Community Development 25,424,184 0 25,424,184Water and Sewer Rate Stabilization Reserve 0 10,000,000 10,000,000Future Police Programs 3,154,401 0 3,154,401Future Other Purposes 3,192,838 0 3,192,838

    Unrestricted (Deficit) (457,116,021) 59,580,483 (397,535,538)

    TOTAL NET POSITION $ (342,839,608) $ 267,727,567 $ (75,112,041)

    The notes to the financial statements are an integral part of this statement.

    STATEMENT OF NET POSITIONSEPTEMBER 30, 2016

    CITY OF HOLLYWOOD, FLORIDA

    29

  • FUNCTIONS/PROGRAMS:PRIMARY GOVERNMENT:

    GOVERNMENTAL ACTIVITIES:General Government $ $ 10,881,216 $ 24,233 $ 488,809Public Safety:

    Police 1,273,313 112,754 55,996Fire 26,787,281 120,215 121,030Other Public Safety 8,442,374 0 0

    Public Works 206,047 0 0Transportation 332,727 66,708 0Economic Environment 1,948,647 1,654,111 0Physical Environment 1,496,576 0 0Culture and Recreation 1,558,574 714,058 196,768Interest and Fiscal Charges 0 0 0

    Total Governmental Activities 52,926,755 2,692,079 862,603

    BUSINESS-TYPE ACTIVITIES:Water 39,756,518 0 783,004Sewer 54,473,452 0 4,024,559Sanitation 13,650,768 0 0Stormwater 3,201,337 0 0Golf 1,828,469 0 0Parking 6,625,446 0 0Other 29,980 0 0

    Total Business-type Activities 119,565,970 0 4,807,563

    Total Primary Government $ $ 172,492,725 $ 2,692,079 $ 5,670,166

    General Revenues:Taxes:

    Property Taxes Levied for General PurposeProperty Taxes Levied for Debt ServiceProperty Taxes IncrementalUtility Service TaxesFranchise TaxesSales TaxGas TaxLocal Business Tax

    Contributions not Restricted to Specific ProgramsInvestment RevenueMiscellaneous

    TransfersTotal General Revenues and Transfers

    Change in Net Position

    Net Position - BeginningRestatement of Net Position for Prior Period Adjustment (See Note IV.H.3.)

    Net Position - Beginning, as Restated

    Net Position - Ending

    The notes to the financial statements are an integral part of this statement.

    6,047

    229,463,185

    92,928,226

    5,565,008

    322,391,411

    CITY OF HOLLYWOOD, FLORIDA

    STATEMENT OF ACTIVITIESFOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2016

    2,229,9782,374,1267,319,436

    15,565,5653,698,2156,143,631

    27,398,18641,179,41312,421,040

    786,52714,970,125

    5,355,025

    Expenses

    OperatingGrants and

    Contributions

    37,368,768

    81,798,50458,211,817

    Program Revenue

    CapitalGrants and

    Contributions

    Charges forServices, Fees,

    Fines andForfeitures

    30

  • $ (25,974,510) $ 0 $ (25,974,510)

    (80,356,441) 0 (80,356,441)(31,183,291) 0 (31,183,291)

    3,087,349 0 3,087,349(15,359,518) 0 (15,359,518)

    (3,298,780) 0 (3,298,780)(2,540,873) 0 (2,540,873)

    710,049 0 710,049(12,500,725) 0 (12,500,725)

    (5,565,008) 0 (5,565,008)(172,981,748) 0 (172,981,748)

    0 13,141,336 13,141,3360 17,318,598 17,318,5980 1,229,728 1,229,7280 971,359 971,3590 (545,657) (545,657)0 (693,990) (693,990)0 23,933 23,9330 31,445,307 31,445,307

    (172,981,748) 31,445,307 (141,536,441)

    70,739,986 70,739,9863,742,344 3,742,344

    29,789,937 29,789,93720,324,000 20,324,00011,539,558 11,539,55810,254,339 10,254,339

    2,912,879 2,912,8791,870,881 1,870,8816,984,158 6,984,158

    931,950 2,150,563 3,082,5136,790,227 727,754 7,517,9814,174,657 (4,174,657) 0

    170,054,916 (1,296,340) 168,758,576

    (2,926,832) 30,148,967 27,222,135

    (335,413,183) 243,617,790 (91,795,393)(4,499,593) (6,039,190) (10,538,783)

    (339,912,776) 237,578,600 (102,334,176)

    $ (342,839,608) $ 267,727,567 $ (75,112,041)

    Net (Expense) Revenue and Changes in Net PositionGovernmental

    ActivitiesBusiness-type

    Activities Total

    31

  • General

    ASSETS:Cash $ 11,200 $ 0 $ 200Investments 48,371,664 6,547,484 14,663,971Accounts Receivable - Net of Allowances 4,415,311 37,129 0Notes Receivable - Net of Allowances 0 0 0Due from Other Funds 1,357,630 0 0Due from Other Governments 2,409,118 0 18,979Inventories of Supplies 34,307 0 0Prepaid Items 0 456,015 0Assets Held for Sale 0 1,585,590 0Restricted Assets:

    Cash and Cash Equivalents 0 871,440 0Investments 87,677 7,297,339 19,616,270Notes Receivable - Net of Allowances 0 0 0Assets Held for Sale 0 0 0

    TOTAL ASSETS $ 56,686,907 $ 16,794,997 $ 34,299,420

    LIABILITIES, DEFERRED INFLOWS OFRESOURCES AND FUND BALANCES:

    LIABILITIES:Vouchers Payable $ 2,740,790 $ 81,424 $ 427,630Accrued Wages and Leave 1,507,752 0 35,423Construction Contracts Payable 0 307,357 631,383Due to Other Funds 0 0 0Due to Other Governments 0 0 1,578,361Unearned Revenue 0 0 0Deposits Payable 528,006 50,126 0Payable from Restricted Assets:

    Construction Contracts Payable 0 66,600 349,550Landfill Closure 87,677 0 0

    Total Liabilities 4,864,225 505,507 3,022,347

    DEFERRED INFLOWS OF RESOURCES:Unavailable or Advanced Revenue 2,145,895 0 18,979

    FUND BALANCES:Nonspendable 34,307 2,041,605 0Restricted 0 7,346,596 31,258,094Committed 15,982,518 5,874,816 0Assigned 2,806,063 1,026,473 0Unassigned 30,853,899 0 0

    Total Fund Balances 49,676,787 16,289,490 31,258,094

    TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES $ 56,686,907 $ 16,794,997 $ 34,299,420

    The notes to the financial statements are an integral part of this statement.

    CITY OF HOLLYWOOD, FLORIDA

    BeachCommunity

    BALANCE SHEETGOVERNMENTAL FUNDS

    SEPTEMBER 30, 2016

    RedevelopmentProjects

    GeneralCapital

    32

  • GovernmentalFunds

    $ 200 $ 20,200 $ 31,8001,273,362 10,883,293 81,739,774

    0 2,000 4,454,4400 26,654,132 26,654,1320 0 1,357,6300 578,126 3,006,2230 0 34,3070 0 456,0150 0 1,585,590

    0 0 871,4401,778,130 0 28,779,416

    0 2,381,832 2,381,832915,000 201,925 1,116,925

    $ 3,966,692 $ 40,721,508 $ 152,469,524

    $ 155,786 $ 282,468 $ 3,688,0984,088 10,430 1,557,693

    0 0 938,7400 7,348 7,3480 0 1,578,3610 2,222,701 2,222,701

    3,577 252,431 834,140

    313,815 0 729,9650 0 87,677

    477,266 2,775,378 11,644,723

    0 1,954,878 4,119,752

    0 0 2,075,9123,489,426 33,685,318 75,779,434

    0 34,759 21,892,0930 2,271,175 6,103,7110 0 30,853,899

    3,489,426 35,991,252 136,705,049

    $ 3,966,692 $ 40,721,508 $ 152,469,524

    Funds

    OtherGovernmental

    DowntownCommunity

    Redevelopment

    Total

    33

  • (THIS PAGE INTENTIONALLY LEFT BLANK)

  • Amounts reported for Governmental Activities in the Statement of Net Position are different because:

    Fund Balances - Governmental Funds $ 136,705,049

    Capital assets, net of accumulated depreciation, used in Governmental Activities are not financialresources and, therefore, are not reported in the funds. 161,949,840

    Governmental funds report all pension contributions as expenditures. However, the net pension liabilityhas a measurement date of September 30, 2015 and pension contributions subsequent to the measurement date are recorded as deferred pension contributions. 28,731,405

    The differences between expected and actual experience in the measurement of total pension liability isreported as a deferred outflow of resources and amortized over the average remaining employees' service life. 12,230,442

    Internal Service Funds are used by management to charge the costs of fleet management, managementinformation systems and self insurance activities to individual funds. The assets and liabilities of theInternal Service Funds are included in Governmental Activities in the Statement of Net Position. (2,034,790)

    Revenue reported as unavailable revenue in the governmental funds are recognized in the Statementof Activities. These are included in the intergovernmental revenues in governmental activities. 1,990,590

    Accrued interest payable for the current portion of interest due on debt has not been reported in the governmental funds. (1,151,872)

    Long-term liabilities, including bonds payable, are not due and payable in the current period and,therefore, are not reported in the funds (Note II.A.). (172,832,533)

    Governmental funds report all OPEB contributions as expenditures, however, in the Statement of NetPosition any excesses or deficiencies in contributions in relation to the annual required contribution(ARC) are recorded as an asset or liability. (151,853,730)

    In the Statement of Net Position the excess of the plans total pension liability over the plans fiduciarynet positions are reported as a net pension liability. (371,928,358)

    The difference between the projected and actual earnings on the pension plan investments is reportedas deferred inflow of resources and amortized over a five year period. 21,890,033

    Adjustment to Enterprise Funds for Internal Service Funds look-back (6,535,684)

    Net Position of Governmental Activities $ (342,839,608)

    The notes to the financial statements are an integral part of this statement.

    CITY OF HOLLYWOOD, FLORIDA

    RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDSTO THE STATEMENT OF NET POSITION

    SEPTEMBER 30, 2016

    35

  • General

    REVENUES:Property Taxes $ 70,593,189 $ 0 $ 13,128,323Utilities Service Taxes 20,324,001 0 0Franchise Taxes 11,539,558 0 0Licenses and Permits 8,863,610 0 0Intergovernmental 18,090,348 7,000 10,849,708Charges for Services 43,221,358 1,359,448 0Fines and Forfeitures 0 0 0Investment Revenue 227,929 50,706 185,784Miscellaneous 2,833,262 481,973 126,956

    Total Revenues 175,693,255 1,899,127 24,290,771

    EXPENDITURES:Current:

    General Government 15,967,450 0 8,334,013Public Safety 119,726,873 0 0Public Works 10,976,775 0 0Transportation 1,588,896 0 0Economic Environment 585,267 0 1,138,377Physical Environment 0 0 257,973Culture and Recreation 8,904,823 0 190,090Other 2,075,105 0 0

    Capital Outlay:General Government 0 516,285 2,501,186Public Safety 0 1,725,894 0Transportation 0 2,465,374 252,256Physical Environment 0 0 690,147Culture and Recreation 0 312,687 0

    Debt Service:Principal 0 0 3,680,715Interest and Fiscal Charges 0 113,085 4,177,654

    Total Expenditures 159,825,189 5,133,325 21,222,411

    Excess (Deficiency) of RevenuesOver (Under) Expenditures 15,868,066 (3,234,198) 3,068,360

    BeachCommunity

    RedevelopmentProjects

    CITY OF HOLLYWOOD, FLORIDA

    STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCESGOVERNMENTAL FUNDS

    FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2016

    GeneralCapital

    36

  • GovernmentalFunds

    $ 3,233,842 $ 3,742,344 $ 90,697,6980 0 20,324,0010 0 11,539,5580 0 8,863,610

    2,654,972 5,514,397 37,116,4250 334,397 44,915,2030 423,846 423,846

    20,346 143,036 627,801365,762 2,052,416 5,860,369

    6,274,922 12,210,436 220,368,511

    2,507,307 38,522 26,847,2920 407,424 120,134,2970 0 10,976,7750 0 1,588,896

    452,146 814,398 2,990,1880 0 257,9730 739,889 9,834,8020 642,554 2,717,659

    79,903 0 3,097,3740 856,386 2,582,280

    441,785 242,803 3,402,21827,549 0 717,696

    0 0 312,687

    2,210,065 7,923,885 13,814,665842,954 3,798,314 8,932,007

    6,561,709 15,464,175 208,206,809

    (286,787) (3,253,739) 12,161,702

    (Continued)

    Total

    Funds

    OtherGovernmental

    Redevelopment

    DowntownCommunity

    37

  • General

    OTHER FINANCING SOURCES(USES):

    Transfers In $ 6,148,896 $ 488,372 $ 66,708Transfers Out (7,126,201) (654,048) (1,100,000)Issuance of Debt 0 18,286,487 55,287,321Uses of Proceeds - Retirement of Debt 0 0 (35,389,285)

    Total Other FinancingSources (Uses) (977,305) 18,120,811 18,864,744

    Change in Fund Balances 14,890,761 14,886,613 21,933,104

    Fund Balances - Beginning 34,786,026 1,402,877 9,324,990

    Fund Balances - Ending $ 49,676,787 $ 16,289,490 $ 31,258,094

    The notes to the financial statements are an integral part of this statement.

    General

    STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCESGOVERNMENTAL FUNDS

    FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2016

    BeachCommunity

    RedevelopmentProjectsCapital

    CITY OF HOLLYWOOD, FLORIDA

    38

  • (Continued)

    GovernmentalFunds

    $ 0 $ 8,648,098 $ 15,352,0740 (3,057,171) (11,937,420)0 18,552,940 92,126,7480 (18,535,147) (53,924,432)

    0 5,608,720 41,616,970

    (286,787) 2,354,981 53,778,672

    3,776,213 33,636,271 82,926,377

    $ 3,489,426 $ 35,991,252 $ 136,705,049

    Funds

    OtherDowntownCommunity

    Redevelopment

    TotalGovernmental

    39

  • (THIS PAGE INTENTIONALLY LEFT BLANK)

  • Difference in amounts reported for Governmental Activities in the Statement of Activities:

    Net Change in Fund Balances - Governmental Funds $ 53,778,672

    Capital outlay, reported as expenditures in Governmental Funds, are shown as capital assets in theStatement of Net Position. 10,096,218

    Depreciation expenses on governmental capital assets are included in the Governmental Activities in theStatement of Net Position. (10,850,315)

    Revenues in the Statement of Activities that do not provide current financial resources are not reportedin the funds. (758,219)

    The issuance of long-term debt provides current financial resources to Governmental Funds, however,has no effect on the change in net position. (92,126,750)

    Repayment of long-term debt is reported as an expenditure in Governmental Funds, but as a reduction oflong-term liabilities in the Statement of Net Position (Note II.B.). 68,889,097

    The net revenues of the Internal Service Funds (funds used to charge the costs of certain activities toindividual funds) are reported with Governmental Activities.

    Adjustment to Governmental Activities for Internal Service Funds look-back (4,476,490)Nonoperating Revenue (Expense) (70,331)Capital Contributions 481,809Elimination of Transfers from Internal Service Funds 760,003

    Certain items reported in the Statement of Activities do not require the use of current financial resourcesand therefore are not reported as expenditures in the Governmental Funds.

    Capital Assets transferred from (to) other funds 18,609Net cost of Capital Asset dispositions (2,091,644)Change in Landfill Closure Cost Obligation 85,331Change in Accrued Interest expense on long-term debt 169,013Change in Other Postemployment Benefits Obligation (25,052,334)Change in Net Pension Liabilities and related inflows and outflows (4,443,979)Change in Deferred Charge on Refunding 2,115,384Change in Bond Premium 1,453,315

    Payout of accrued leave is reported as an expenditure in the Governmental Funds but as a reduction oflong-term liabilities in the Statement of Net Position. (904,221)

    Changes in Net Position of Governmental Activities $ (2,926,832)

    The notes to the financial statements are an integral part of this statement.

    CITY OF HOLLYWOOD, FLORIDA

    FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2016

    RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES ANDCHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS

    TO THE STATEMENT OF ACTIVITIES

    41

  • Water and SanitationSewer Utility Enterprise

    ASSETS AND DEFERRED OUTFLOWSOF RESOURCES:

    ASSETS:CURRENT ASSETS:

    Cash and Cash Equivalents $ 700 $ 0 $ 800Investments 80,245,030 9,759,305 9,902,202Accounts Receivable - Net of

    Allowances 14,481,887 1,872,015 7,852Reinsurance Receivable 0 0 0Inventories of Supplies 1,398,797 0 0Restricted Assets:

    Cash and Cash Equivalents 13,599,235 0 0Investments 0 689,601 0

    Total Current Assets 109,725,649 12,320,921 9,910,854

    NONCURRENT ASSETS:Restricted Assets:

    Cash and Cash Equivalents 39,362,216 0 0Investments 22,635,713 0 112,237Interest Receivable 107,953 0 0Accounts Receivable - Net of

    Allowances 0 0 0Total Restricted Assets 62,105,882 0 112,237

    Capital Assets:Land 3,640,485 63,890 1,147,021Buildings 51,979,592 1,166,564 32,748,230Improvements 513,051,078 90,824 1,690,084Machinery and Equipment 4,719,975 21,395 5,910,307Accumulated Depreciation (317,946,791) (1,276,339) (16,210,247)Construction in Progress 29,570,282 0 0

    Total Capital Assets 285,014,621 66,334 25,285,395

    Other Assets:Assessments - Net of Allowances 414,550 0 0

    Total Noncurrent Assets 347,535,053 66,334 25,397,632Total Assets 457,260,702 12,387,255 35,308,486

    DEFERRED OUTFLOWS OF RESOURCES:Deferred Pension Contributions 4,966,013 211,530 434,456Deferred Change in Pension Assets 3,616,055 199,061 306,921Deferred Change in Pension Liability 1,068,769 57,617 92,207Deferred Charge on Refunding 601,907 0 0

    Total Deferred Outflows of Resources 10,252,744 468,208 833,584

    TOTAL ASSETS AND DEFERREDOUTFLOWS OF RESOURCES 467,513,446 12,855,463 36,142,070

    CITY OF HOLLYWOOD, FLORIDA

    STATEMENT OF NET POSITIONPROPRIETARY FUNDSSEPTEMBER 30, 2016

    Business-type Activities - Enterprise Funds

    ParkingEnterprise

    42

  • EnterpriseFunds Total Funds

    $ 100,130 $ 101,630 $ 50010,948,463 110,855,000 40,969,148

    536,004 16,897,758 00 0 469,1910 1,398,797 112,092

    0 13,599,235 350,5500 689,601 0

    11,584,597 143,542,021 41,901,481

    0 39,362,216 00 22,747,950 00 107,953 0

    37,213 37,213 037,213 62,255,332 0

    962,122 5,813,518 02,904,146 88,798,532 1,141,350

    11,200,956 526,032,942 01,744,319 12,395,996 43,149,791

    (10,085,039) (345,518,416) (34,769,214)303,988 29,874,270 0

    7,030,492 317,396,842 9,521,927

    0 414,550 07,067,705 380,066,724 9,521,927

    18,652,302 523,608,745 51,423,408

    274,786 5,886,785 1,833,165262,803 4,384,840 1,261,340

    77,891 1,296,484 373,9460 601,907 0

    615,480 12,170,016 3,468,451

    19,267,782 535,778,761 54,891,859

    (Continued)

    OtherGovernmental

    Activities -Internal S