Collier County, Florida - EMMA [PDF]

NEW ISSUE – Book-Entry Only In the opinion of Nabors, Giblin & Nickerson, P.A., Tampa, Florida, Bond Counsel, interest on the Series 2013 Bonds is, under existing statutes, regulations, rulings and court decisions, (a) excludable from gross income of the owners thereof for federal income tax purposes except as otherwise described herein under the caption “TAX EXEMPTION” and (b) not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. Such interest, however, will be includable in the calculation of a corporation’s alternative minimum taxable income and may be subject to other federal income tax consequences referred to herein under “TAX EXEMPTION.” See “TAX EXEMPTION” herein for a discussion of Bond Counsel’s opinion.

$73,805,000 COLLIER COUNTY, FLORIDA Special Obligation Refunding Revenue Bonds, Series 2013 Dated: Date of Delivery

Due: October 1, as shown on inside cover

The Collier County, Florida Special Obligation Refunding Revenue Bonds, Series 2013 (the “Series 2013 Bonds”) are being issued as fully registered bonds, in denominations of $5,000 or any integral multiple thereof. Interest on the Series 2013 Bonds is payable semiannually on each April 1 and October 1, commencing October 1, 2013, and will be payable by check or draft of Regions Bank, Orlando, Florida, as Paying Agent, mailed to the holder at his or her address, as shown on the registration books of Collier County, Florida (the “County”) maintained by Regions Bank, Orlando, Florida, as Registrar, as of the close of business on the fifteenth day (whether or not a business day) of the calendar month next preceding the applicable interest payment date; provided, however, at the request of any holder of Series 2013 Bonds, interest payments may be made by bank wire transfer to the account designated by such holder. Principal of the Series 2013 Bonds is payable to the holder thereof upon presentation and surrender, when due, at the office of the Paying Agent. Upon initial issuance, the Series 2013 Bonds will be registered in the name of and held by Cede & Co. as nominee for The Depository Trust Company (“DTC”), an automated depository for securities and a clearinghouse for securities transactions. So long as DTC or Cede & Co. is the registered owner of the Series 2013 Bonds, payments of the principal of and interest on the Series 2013 Bonds will be mailed directly to DTC or Cede & Co., which is to remit such payments to the Participants (as defined herein), which in turn are to remit such payments to the Beneficial Owners (as defined herein) of the Series 2013 Bonds. See “DESCRIPTION OF THE SERIES 2013 BONDS – Book-Entry Only System” herein. The Series 2013 Bonds are subject to redemption prior to maturity, as set forth herein. The Series 2013 Bonds are issued pursuant to and under the Constitution and laws of the State of Florida, Chapter 125, Florida Statutes, and other applicable provisions of law (collectively, the “Act”), and pursuant to Resolution No. 2013-70 adopted by the Board on March 12, 2013, as it may be amended and supplemented from time to time (the “Resolution”). The Series 2013 Bonds are being issued to provide funds, together with other legally available moneys of the County, if any, sufficient to (i) advance refund all of the County’s outstanding Capital Improvement and Refunding Revenue Bonds, Series 2003 and Capital Improvement and Refunding Revenue Bonds, Series 2005, and (ii) pay certain costs and expenses relating to the issuance of the Series 2013 Bonds. Pursuant to the Resolution, the County has covenanted and agreed, subject to certain restrictions and limitations, to appropriate in its annual budget, by amendment, if necessary, from Non-Ad Valorem Revenues amounts sufficient to pay the principal of and interest on the Series 2013 Bonds when due in the manner and to the extent provided in the Resolution and described under “SECURITY FOR THE SERIES 2013 BONDS” herein. THE SERIES 2013 BONDS SHALL NOT BE OR CONSTITUTE GENERAL OBLIGATIONS OR INDEBTEDNESS OF THE COUNTY AS “BONDS” WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION, BUT SHALL BE SPECIAL OBLIGATIONS OF THE COUNTY, PAYABLE SOLELY FROM AMOUNTS BUDGETED AND APPROPRIATED BY THE COUNTY FROM NON-AD VALOREM REVENUES IN ACCORDANCE WITH THE RESOLUTION. NO HOLDER OF ANY SERIES 2013 BOND SHALL HAVE THE RIGHT TO COMPEL THE EXERCISE OF ANY AD VALOREM TAXING POWER TO PAY SUCH SERIES 2013 BOND, OR BE ENTITLED TO PAYMENT OF SUCH SERIES 2013 BOND FROM ANY MONEYS OF THE COUNTY EXCEPT FROM THE NON-AD VALOREM REVENUES IN THE MANNER AND TO THE EXTENT PROVIDED IN THE RESOLUTION. This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. The Series 2013 Bonds are offered when, as, and if issued and received by the Underwriter, subject to the opinion on certain legal matters relating to their issuance by Nabors, Giblin & Nickerson, P.A., Tampa, Florida, Bond Counsel. Certain legal matters will be passed upon for the County by Jeffrey A. Klatzkow, Esq., County Attorney and by Bryant Miller Olive P.A., Tampa, Florida, Disclosure Counsel. Public Financial Management, Inc., Coral Gables, Florida, is serving as Financial Advisor to the County. It is expected that the Series 2013 Bonds in definitive form will be available for delivery to the Underwriter in New York, New York at the facilities of DTC on or about April 16, 2013.

Citigroup Dated: March 26, 2013

$73,805,000 COLLIER COUNTY, FLORIDA Special Obligation Refunding Revenue Bonds, Series 2013 MATURITIES, AMOUNTS, INTEREST RATES, PRICES, YIELDS AND INITIAL CUSIP NUMBERS Maturity (October 1) 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035

Amount $7,705,000 4,860,000 5,050,000 5,250,000 5,460,000 7,660,000 7,925,000 8,200,000 8,525,000 6,455,000 6,715,000

Interest Rate 4.00% 4.00 4.00 4.00 3.50 3.50 3.50 4.00 4.00 4.00 4.00

Price 110.084* 108.180* 106.904* 106.147*  99.379  98.583  98.000 102.294* 101.973* 101.575* 101.178*

Yield 2.78% 3.00 3.15 3.24 3.55 3.61 3.65 3.71 3.75 3.80 3.85

Initial CUSIP Numbers** 19464VCL2 19464VCM0 19464VCN8 19464VCP3 19464VCQ1 19464VCR9 19464VCS7 19464VCT5 19464VCU2 19464VCV0 19464VCW8

_________________________ * Priced to first optional redemption date of October 1, 2022. ** The County is not responsible for the use of the CUSIP Numbers referenced herein nor is any representation made by the County as to their correctness. The CUSIP Numbers provided herein are included solely for the convenience of the readers of this Official Statement.

COLLIER COUNTY, FLORIDA Government Complex 3299 Tamiami Trail East Naples, Florida 34112 (239) 252-8097

BOARD OF COUNTY COMMISSIONERS Georgia A. Hiller, Esq., Chairwoman Tom Henning, Vice Chair Fred W. Coyle, Commissioner Donna Fiala, Commissioner Tim Nance, Commissioner

COUNTY MANAGER Leo E. Ochs, Jr.

CLERK OF THE CIRCUIT COURT OF COLLIER COUNTY AND CHIEF FINANCIAL OFFICER Dwight E. Brock, Esq.

DIRECTOR OF FINANCE AND ACCOUNTING Crystal K. Kinzel

COUNTY ATTORNEY Jeffrey A. Klatzkow, Esq.

BOND COUNSEL Nabors, Giblin & Nickerson, P.A. Tampa, Florida

DISCLOSURE COUNSEL Bryant Miller Olive P.A. Tampa, Florida

FINANCIAL ADVISOR Public Financial Management, Inc. Coral Gables, Florida

No dealer, broker, salesman or other person has been authorized by the County or the Underwriter to give any information or to make any representations in connection with the Series 2013 Bonds, other than as contained in this Official Statement, and, if given or made, such information or representations must not be relied upon as having been authorized by the County. This Official Statement does not constitute an offer to sell nor the solicitation of an offer to buy, nor shall there be any sale of the Series 2013 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained from the County, DTC and other sources that are believed to be reliable. The Underwriter listed on the cover page hereof has reviewed the information in this Official Statement in accordance with and as part of its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. The information and expressions of opinion stated herein are subject to change, and neither the delivery of this Official Statement nor any sale made hereunder shall create, under any circumstances, any implication that there has been no change in the matters described herein since the date hereof. IN CONNECTION WITH THIS OFFERING OF THE SERIES 2013 BONDS, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF SUCH SERIES 2013 BONDS AT LEVELS ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. All summaries herein of documents and agreements are qualified in their entirety by reference to such documents and agreements, and all summaries herein of the Series 2013 Bonds are qualified in their entirety by reference to the form thereof included in the aforesaid documents and agreements. NO REGISTRATION STATEMENT RELATING TO THE SERIES 2013 BONDS HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") OR WITH ANY STATE SECURITIES COMMISSION. IN MAKING ANY INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATIONS OF THE COUNTY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THE SERIES 2013 BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSION OR ANY STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. THE FOREGOING AUTHORITIES HAVE NOT PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE.

TABLE OF CONTENTS Page INTRODUCTION ....................................................................................................................................................... 1 PLAN OF REFUNDING ............................................................................................................................................ 2 DESCRIPTION OF THE SERIES 2013 BONDS....................................................................................................... 3 General ........................................................................................................................................................... 3 Book-Entry Only System ............................................................................................................................. 4 Interchangeability, Negotiability and Transfer ........................................................................................ 6 Series 2013 Bonds Mutilated, Destroyed, Stolen or Lost ......................................................................... 7 Optional Redemption .................................................................................................................................. 8 Selection of Bonds to be Redeemed ........................................................................................................... 8 Notice of Redemption .................................................................................................................................. 8 SECURITY FOR THE SERIES 2013 BONDS ........................................................................................................... 9 General ........................................................................................................................................................... 9 No Reserve for the Series 2013 Bonds...................................................................................................... 10 Anti-Dilution Test ...................................................................................................................................... 10 GENERAL INFORMATION REGARDING NON-AD VALOREM REVENUES ............................................ 11 General ......................................................................................................................................................... 11 Taxes............................................................................................................................................................. 12 Intergovernmental Revenues .................................................................................................................... 15 Licenses, Permits and Impact Fees ........................................................................................................... 22 Charges for Services ................................................................................................................................... 23 Fines and Forfeitures.................................................................................................................................. 23 Interest ......................................................................................................................................................... 23 Miscellaneous Revenues ............................................................................................................................ 24 CERTAIN FINANCIAL MATTERS ....................................................................................................................... 28 Financial and Operating Plan (Budget) and Capital Improvement Planning Policy ........................ 28 Financial Reporting and Annual Audit ................................................................................................... 28 General Fund and Unincorporated Area Municipal Services Taxing District Fund ........................ 28 Classification of Local Government Expenditures ................................................................................ 31 RETIREMENT PLAN AND OTHER POST EMPLOYMENT BENEFITS ......................................................... 32 Florida Retirement System ........................................................................................................................ 32 Florida Retirement System Assumptions................................................................................................ 35 Senate Bill 2100 ........................................................................................................................................... 36 County OPEB .............................................................................................................................................. 37 Sheriff's OPEB ............................................................................................................................................. 38 FLORIDA CONSTITUTIONAL LIMITATIONS AND PROPERTY TAX REFORM ....................................... 39 ESTIMATED SOURCES AND USES OF FUNDS ................................................................................................ 43 DEBT SERVICE SCHEDULE .................................................................................................................................. 44 INVESTMENT POLICY ........................................................................................................................................... 45 LEGAL MATTERS .................................................................................................................................................... 46 LITIGATION ............................................................................................................................................................. 47 DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS ........................................................... 47 TAX EXEMPTION .................................................................................................................................................... 48 Opinion of Bond Counsel .......................................................................................................................... 48 Internal Revenue Code of 1986 ................................................................................................................. 48

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Collateral Tax Consequences .................................................................................................................... 48 Other Tax Matters....................................................................................................................................... 49 Tax Treatment of Original Issue Discount .............................................................................................. 49 Tax Treatment of Bond Premium ............................................................................................................. 50 VERIFICATION OF ARITHMETICAL COMPUTATIONS ................................................................................ 50 RATINGS ................................................................................................................................................................... 50 FINANCIAL ADVISOR ........................................................................................................................................... 51 INVESTMENT ADVISOR ....................................................................................................................................... 51 AUDITED FINANCIAL STATEMENTS ............................................................................................................... 51 ENFORCEABILITY OF REMEDIES ....................................................................................................................... 52 CONTINUING DISCLOSURE ................................................................................................................................ 52 UNDERWRITING .................................................................................................................................................... 52 CONTINGENT FEES ............................................................................................................................................... 53 ACCURACY AND COMPLETENESS OF OFFICIAL STATEMENT................................................................ 53 AUTHORIZATION OF OFFICIAL STATEMENT ............................................................................................... 54 Appendices APPENDIX A APPENDIX B APPENDIX C APPENDIX D APPENDIX E

- General Information Concerning Collier County, Florida - Form of the Resolution - Audited Financial Statements for the Fiscal Year Ended September 30, 2012 - Form of Opinion of Bond Counsel - Form of Continuing Disclosure Certificate

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OFFICIAL STATEMENT Relating to $73,805,000 COLLIER COUNTY, FLORIDA Special Obligation Refunding Revenue Bonds, Series 2013

INTRODUCTION The purpose of this Official Statement, including the cover page and appendices, is to set forth information concerning Collier County, Florida (the "County") and the Collier County, Florida Special Obligation Refunding Revenue Bonds, Series 2013 (the "Series 2013 Bonds"), in connection with the sale of the Series 2013 Bonds. The County was established in 1923 by the Legislature of the State of Florida (the "State") from portions of Lee and Monroe Counties. Its territorial limits, as they presently exist, contain approximately 2,026 square miles. In terms of land area, it is the largest county in the State. The County is located on the southwest coast of the Florida peninsula directly west of the Miami-Fort Lauderdale area. In 2012, the County had an estimated population of 323,785. Principal industries within the County include wholesale and retail trade, tourism, agriculture, forestry, fishing, cattle ranching and construction. Part of the Everglades National Park, the United States' only subtropical national park, comprises a portion of the County. See "APPENDIX A – General Information Concerning Collier County, Florida" attached hereto for more information about the County. The Series 2013 Bonds are issued pursuant to and under the Constitution and laws of the State, Chapter 125, Florida Statutes, and other applicable provisions of law (collectively, the "Act"), and pursuant to Resolution No. 2013-70 adopted by the Board on March 12, 2013, as it may be amended and supplemented from time to time (the "Resolution"). See "APPENDIX B – Form of the Resolution" attached hereto. The Series 2013 Bonds are being issued to provide funds, together with other legally available moneys of the County, if any, sufficient to (i) advance refund all of the County's outstanding Capital Improvement and Refunding Revenue Bonds, Series 2003 (the "Refunded 2003 Bonds") and Capital Improvement and Refunding Revenue Bonds, Series 2005 (the "Refunded 2005 Bonds" and together with the Refunded 2003 Bonds, the "Refunded Bonds"), and (ii) pay certain costs and expenses relating to the issuance of the Series 2013 Bonds. Pursuant to the Resolution, the County has covenanted and agreed, subject to certain restrictions and limitations, to appropriate in its annual budget, by amendment, if necessary, from Non-Ad Valorem Revenues amounts sufficient to pay principal of and interest on the Series 2013 Bonds when due in the manner and to the extent provided in the Resolution and described in "SECURITY FOR THE SERIES 2013 BONDS" herein and "APPENDIX B – Form of the Resolution" attached hereto. THE SERIES 2013 BONDS SHALL NOT BE OR CONSTITUTE GENERAL OBLIGATIONS OR INDEBTEDNESS OF THE COUNTY AS "BONDS" WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION, BUT SHALL BE SPECIAL OBLIGATIONS OF THE

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COUNTY, PAYABLE SOLELY FROM AMOUNTS BUDGETED AND APPROPRIATED BY THE COUNTY FROM NON-AD VALOREM REVENUES IN ACCORDANCE WITH THE RESOLUTION. NO HOLDER OF ANY SERIES 2013 BOND SHALL HAVE THE RIGHT TO COMPEL THE EXERCISE OF ANY AD VALOREM TAXING POWER TO PAY SUCH SERIES 2013 BOND, OR BE ENTITLED TO PAYMENT OF SUCH SERIES 2013 BOND FROM ANY MONEYS OF THE COUNTY EXCEPT FROM THE NON-AD VALOREM REVENUES IN THE MANNER AND TO THE EXTENT PROVIDED IN THE RESOLUTION. The County has covenanted to provide certain continuing disclosure information pursuant to Rule 15c2-12 of the Securities and Exchange Commission relating to the Series 2013 Bonds. See "CONTINUING DISCLOSURE" herein. Capitalized terms used but not otherwise defined herein have the same meaning ascribed thereto in the Resolution unless the context would clearly indicate otherwise. Complete descriptions of the terms and conditions of the Series 2013 Bonds are set forth in the Resolution, a form of which is attached as APPENDIX B to this Official Statement. The descriptions of the Series 2013 Bonds, the documents authorizing and securing the same, and the information from various reports and statements contained herein are not comprehensive or definitive. All references herein to such documents, reports and statements are qualified by the entire, actual content of such documents, reports and statements. A copy of the Resolution and all documents of the County referred to herein may be obtained from Dwight E. Brock, Esq., Clerk of Circuit Court and Chief Financial Officer of Collier County, Collier County Courthouse Annex, 3315 Tamiami Trail East, 2nd Floor, Naples, Florida 34112-5324, Phone (239) 252-2745.

PLAN OF REFUNDING The Refunded 2003 Bonds originally financed the acquisition, construction and equipping of various capital projects, including a County jail complex and a County Development Services building expansion and associated parking garage. The Refunded 2005 Bonds originally financed the acquisition, construction and equipping of various capital improvements within the County including, but not limited to, acquisition, construction and equipping of the North Collier Regional Park, the County Courthouse Annex Phase I, the Courthouse Annex Parking Garage, an Emergency Operations Center and the County's Fleet Facility. The County has determined that it can release certain debt service reserve fund monies which are currently securing the Refunded Bonds by providing for the advance refunding of the Refunded Bonds, and potentially to achieve debt service savings. The Refunded 2003 Bonds will be called for redemption on October 1, 2013 at a redemption price of 100% of the principal amount to be redeemed, plus accrued interest thereon. The Refunded 2005 Bonds will be called for redemption on October 1, 2014 at a redemption price of 100% of the principal amount to be redeemed, plus accrued interest thereon. Upon delivery of the Series 2013 Bonds, Regions Bank, Orlando, Florida (the "Escrow Agent") will enter into an Escrow Deposit Agreement (the "Escrow Agreement") with the County relating to the Refunded Bonds. The Escrow Agreement will create an irrevocable escrow deposit trust fund (the "Escrow Deposit Fund") which will be held by the Escrow Agent, and the money and securities held therein are to be applied to the payment of principal of and interest on the Refunded Bonds, as the same become due and payable and at redemption prior to maturity. The refunding will be accomplished through the issuance of the Series 2013 Bonds and the deposit of a portion of the proceeds thereof,

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together with other legally available moneys, if any, into the Escrow Deposit Fund. Substantially all of such money is expected to be invested in Obligations of the United States of America, as such term is defined in Resolution No. 85-107 adopted by the County on April 30, 1985, as amended and supplemented from time to time (the "Refunded Bonds Resolution"). The maturing principal amount of and interest on the Obligations of the United States of America and any cash held in the Escrow Deposit Fund is expected to be sufficient to pay the principal of and interest on the Refunded Bonds, and will be pledged solely for the benefit of the holders of the Refunded Bonds, and will not be available for payment of debt service on the Series 2013 Bonds. The initial cash deposit plus principal and interest on the Obligations of the United States of America in the Escrow Deposit Fund will be sufficient to pay the Refunded Bonds to their respective maturity or redemption dates according to the schedules prepared by Public Financial Management, Inc., as verified by Causey, Demgen & Moore P.C. (the "Verification Agent"). See "VERIFICATION OF ARITHMETICAL COMPUTATIONS" herein. In reliance upon the above-referenced schedules and verification, at the time of delivery of the Series 2013 Bonds, Bond Counsel shall deliver an opinion to the County to the effect that the Refunded Bonds have been legally defeased and are no longer outstanding for purposes of the Refunded Bonds Resolution.

DESCRIPTION OF THE SERIES 2013 BONDS General The Series 2013 Bonds shall be issued only in fully registered form without coupons in principal denominations of $5,000 each or any integral multiple thereof. The Series 2013 Bonds are dated as of their date of delivery and bear interest at the rates per annum and mature on the dates set forth on the inside cover page hereof. Interest on the Series 2013 Bonds is payable semiannually on each April 1 and October 1, commencing October 1, 2013 (the "Interest Dates"). Interest payable on the Series 2013 Bonds on any Interest Date shall be paid by check or draft of Regions Bank, Orlando, Florida, as Paying Agent mailed to the holder at his or her address, as shown on the registration books of the County maintained by Regions Bank, Orlando, Florida, as Registrar, as of the close of business on the fifteenth (15th) day (whether or not a business day) of the calendar month next preceding the applicable Interest Date (the "Record Date"); provided, however, at the request of any holder of Series 2013 Bonds, interest payments may be made by bank wire transfer to the account designated by such holder. Principal of, or Redemption Price, if applicable, on the Series 2013 Bonds is payable to the holder thereof upon presentation and surrender, when due, at the office of the Paying Agent. The Series 2013 Bonds will be issued initially as book-entry obligations and held by The Depository Trust Company ("DTC") as securities depository. The ownership of one fully registered Series 2013 Bond for each maturity as set forth on the inside cover page hereof, in the appropriate aggregate principal amount of such maturity, will be registered in the name of Cede & Co., as nominee for DTC. For more information regarding DTC and DTC's Book-Entry System, see the subheading "—Book-Entry Only System" which immediately follows.

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Book-Entry Only System THE FOLLOWING INFORMATION CONCERNING DTC AND DTC'S BOOK-ENTRY ONLY SYSTEM HAS BEEN OBTAINED FROM DTC, AND NEITHER THE COUNTY NOR THE UNDERWRITER TAKES ANY RESPONSIBILITY FOR THE ACCURACY THEREOF. DTC will act as securities depository for the Series 2013 Bonds. The Series 2013 Bonds will be registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Series 2013 Bond will be issued for each maturity of the Series 2013 Bonds in the aggregate principal amount of such maturity, and will be deposited with DTC. SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE SERIES 2013 BONDS, AS NOMINEE OF DTC, CERTAIN REFERENCES IN THIS OFFICIAL STATEMENT TO THE SERIES 2013 BONDHOLDERS OR REGISTERED OWNERS OF THE SERIES 2013 BONDS WILL MEAN CEDE & CO. AND WILL NOT MEAN THE BENEFICIAL OWNERS OF THE SERIES 2013 BONDS. THE DESCRIPTION WHICH FOLLOWS OF THE PROCEDURES AND RECORD KEEPING WITH RESPECT TO BENEFICIAL OWNERSHIP INTERESTS IN THE SERIES 2013 BONDS, PAYMENT OF INTEREST AND PRINCIPAL ON THE SERIES 2013 BONDS TO DIRECT PARTICIPANTS (AS HEREINAFTER DEFINED) OR BENEFICIAL OWNERS OF THE SERIES 2013 BONDS, CONFIRMATION AND TRANSFER OF BENEFICIAL OWNERSHIP INTERESTS IN THE SERIES 2013 BONDS, AND OTHER RELATED TRANSACTIONS BY AND BETWEEN DTC, THE DIRECT PARTICIPANTS AND BENEFICIAL OWNERS OF THE SERIES 2013 BONDS IS BASED SOLELY ON INFORMATION FURNISHED BY DTC. ACCORDINGLY, NEITHER THE COUNTY NOR THE UNDERWRITER MAKES NOR CAN MAKE ANY REPRESENTATIONS CONCERNING THESE MATTERS. DTC, the world's largest securities depository, is a limited purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants (the "Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (the "Indirect Participants"). DTC has a Standard & Poor's rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

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Purchases of Series 2013 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for such Series 2013 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2013 Bond (the "Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2013 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of the Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Series 2013 Bonds, except in the event that use of the book-entry system for the Series 2013 Bonds is discontinued. To facilitate subsequent transfers, all Series 2013 Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Series 2013 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2013 Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2013 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping an account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to DTC. If less than all of the Series 2013 Bonds are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such bonds to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Series 2013 Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the County as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Series 2013 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Series 2013 Bonds will be made to DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the County or the Paying Agent and Registrar on the payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Paying Agent, or the County, subject to any statutory and regulatory requirements as may be in effect from time to time. Payment of principal and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the County and/or the Paying Agent for the Series 2013 Bonds. Disbursement of such payments to Direct

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Participants is the responsibility of DTC, and disbursement of such payments to the Beneficial Owners is the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Series 2013 Bonds at any time by giving reasonable notice to the County. Under such circumstances, in the event that a successor depository is not obtained, Series 2013 Bond certificates are required to be printed and delivered. The County may decide to discontinue use of the system of book-entry only transfers through DTC (or a successor securities depository). In that event, Series 2013 Bond certificates will be printed and delivered and be subject to transfer and registration as provided in the Resolution and as described below under the subheading "—Interchangeability, Negotiability and Transfer" which immediately follows. Interchangeability, Negotiability and Transfer So long as the Series 2013 Bonds are registered in the name of DTC or its nominee, the following paragraphs relating to transfer and exchange of Series 2013 Bonds do not apply to the Series 2013 Bonds to the extent of a conflict with the DTC book-entry system. Series 2013 Bonds, upon surrender thereof at the office of the Registrar with a written instrument of transfer satisfactory to the Registrar, duly executed by the Holder or his attorney duly authorized in writing, may, at the option of the Holder thereof, be exchanged for an equal aggregate principal amount of registered Series 2013 Bonds of the same maturity of any other authorized denominations. The Series 2013 Bonds issued under the Resolution shall be and have all the qualities and incidents of negotiable instruments under the law merchant and the Uniform Commercial Code of the State, subject to the provisions for registration and transfer contained in the Resolution and in the Series 2013 Bonds. So long as any of the Series 2013 Bonds shall remain Outstanding, the County shall maintain and keep, at the office of the Registrar, books for the registration and transfer of the Series 2013 Bonds. Each Series 2013 Bond shall be transferable only upon the books of the County, at the office of the Registrar, under such reasonable regulations as the County may prescribe, by the Holder thereof in person or by his attorney duly authorized in writing upon surrender thereof together with a written instrument of transfer satisfactory to the Registrar duly executed and guaranteed by the Holder or his duly authorized attorney. Upon the transfer of any such Series 2013 Bond, the County shall issue, and cause to be authenticated, in the name of the transferee a new Series 2013 Bond or Series 2013 Bonds of the same aggregate principal amount and maturity as the surrendered Series 2013 Bond. The County, the Registrar and any Paying Agent or fiduciary of the County may deem and treat the Person in whose name any Outstanding Series 2013 Bond shall be registered upon the books of the County as the absolute owner of such Series 2013 Bond, whether such Series 2013 Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal or Redemption Price, if applicable, and interest on such Series 2013 Bond and for all other purposes, and all such payments so made to any such Holder or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Series 2013 Bond to the extent of the sum or sums so paid and neither the County nor the Registrar nor any Paying Agent or other fiduciary of the County shall be affected by any notice to the contrary. The Registrar, in any case where it is not also the Paying Agent in respect to any Series 2013 Bonds, forthwith (A) following the fifteenth (15th) day prior to an Interest Date for the Series 2013 Bonds;

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(B) following the fifteenth (15th) day next preceding the date of first mailing of notice of redemption of any Series 2013 Bonds; and (C) at any other time as reasonably requested by the Paying Agent of such Series 2013 Bonds, shall certify and furnish to such Paying Agent the names, addresses and holdings of Series 2013 Bondholders and any other relevant information reflected in the registration books. Any Paying Agent of any fully registered Series 2013 Bond shall effect payment of interest on such Series 2013 Bonds by mailing a check to the Holder entitled thereto or may, in lieu thereof, upon the request and expense of such Holder, transmit such payment by bank wire transfer for the account of such Holder. In all cases in which the privilege of exchanging or transferring Series 2013 Bonds is exercised, the County shall execute and deliver Series 2013 Bonds and the Registrar shall authenticate such Series 2013 Bonds in accordance with the provisions of the Resolution. Execution of Series 2013 Bonds by the Chair and Clerk for purposes of exchanging, replacing or transferring Series 2013 Bonds may occur at the time of the original delivery of the Series 2013 Bonds. All Series 2013 Bonds surrendered in any such exchanges or transfers shall be held by the Registrar in safekeeping until directed by the County to be cancelled by the Registrar. For every such exchange or registration of transfer of Series 2013 Bonds, the County or the Registrar may make a charge sufficient to reimburse it for any tax, fee, expense or other governmental charge required to be paid with respect to such exchange or transfer. The County and the Registrar shall not be obligated to make any such exchange or transfer of Series 2013 Bonds during the fifteen (15) days next preceding an Interest Date on the Series 2013 Bonds or, in the case of any proposed redemption of the Series 2013 Bonds, then, for the Series 2013 Bonds subject to redemption, during the fifteen (15) days next preceding the date of the first mailing of notice of such redemption and continuing until such redemption date. Series 2013 Bonds Mutilated, Destroyed, Stolen or Lost So long as the Series 2013 Bonds are registered in the name of DTC or its nominee, the following paragraphs relating to mutilated, destroyed, stolen or lost Series 2013 Bonds do not apply to the Series 2013 Bonds to the extent of a conflict with the DTC book-entry system. In case any Series 2013 Bond shall become mutilated, or be destroyed, stolen or lost, the County may, in its discretion, issue and deliver, and the Registrar shall authenticate, a new Series 2013 Bond of like tenor as the Series 2013 Bond so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Series 2013 Bond upon surrender and cancellation of such mutilated Series 2013 Bond or in lieu of and substitution for the Series 2013 Bond destroyed, stolen or lost, and upon the Series 2013 Bondholder furnishing the County and the Registrar proof of his ownership thereof and satisfactory indemnity and complying with such other reasonable regulations and conditions as the County or the Registrar may prescribe and paying such expenses as the County and the Registrar may incur. All Series 2013 Bonds so surrendered shall be cancelled by the Registrar. If any of the Series 2013 Bonds shall have matured or be about to mature, instead of issuing a substitute Series 2013 Bond, the County may pay the same or cause the Series 2013 Bond to be paid, upon being indemnified as aforesaid, and if such Series 2013 Bonds be lost, stolen or destroyed, without surrender thereof. Any such duplicate Series 2013 Bonds issued pursuant to the Resolution shall constitute original, additional contractual obligations on the part of the County whether or not the lost, stolen or destroyed Series 2013 Bond be at any time found by anyone, and such duplicate Series 2013 Bond shall be entitled to equal and proportionate benefits and rights to the same extent as all other Series 2013 Bonds issued pursuant to the Resolution.

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Optional Redemption The Series 2013 Bonds are subject to redemption in whole or in part, at any time, on or after October 1, 2022, in such order of maturities as may be determined by the County (less than all of a single maturity to be selected by lot), at a Redemption Price equal to 100% of the principal amount of the Series 2013 Bonds to be redeemed plus accrued interest to the date fixed for redemption, without premium. Selection of Bonds to be Redeemed The Series 2013 Bonds shall be redeemed only in the principal amount of $5,000 each and integral multiples thereof. The County shall, at least 45 days prior to the redemption date (unless a shorter time period shall be satisfactory to the Registrar), notify the Registrar of such redemption date and of the principal amount of Series 2013 Bonds to be redeemed. For purposes of any redemption of less than all of the Series 2013 Bonds of a single maturity, the particular Series 2013 Bonds or portions of Series 2013 Bonds to be redeemed shall be selected not more than 45 days and not less than 35 days prior to the redemption date by the Registrar from the Series 2013 Bonds of the maturity or maturities designated by the County by such method as the Registrar shall deem fair and appropriate and which may provide for the selection for redemption of Series 2013 Bonds or portions of Series 2013 Bonds in principal amounts of $5,000 and integral multiples thereof. Notwithstanding the foregoing, in the event that less than the entire principal amount of a Term Bond is to be optionally redeemed, the County shall determine how the principal amount of such refunded Term Bond is to be allocated to the Amortization Installments for the Term Bond and shall notify the Paying Agent and Registrar of such allocation. If less than all of the Series 2013 Bonds of a single maturity are to be redeemed, the Registrar shall promptly notify the County in writing of the Series 2013 Bonds or portions of Series 2013 Bonds selected for redemption and, in the case of any Series 2013 Bond selected for partial redemption, the principal amount thereof to be redeemed. Notice of Redemption Notice of redemption, which shall specify the Series 2013 Bond or Series 2013 Bonds (or portions thereof) to be redeemed and the date and place for redemption, shall be given by the Registrar on behalf of the County, and (A) shall be filed with the Paying Agent of such Series 2013 Bonds, (B) shall be mailed first class, postage prepaid, not less than 30 days nor more than 45 days prior to the redemption date to all Holders of Series 2013 Bonds to be redeemed at their addresses as they appear on the registration books kept by the Registrar as of the date of mailing of such notice, and (C) shall be mailed, certified mail, postage prepaid, at least 35 days prior to the redemption date to the registered securities depositories and two or more nationally recognized municipal bond information services as provided in the Resolution. Failure to mail such notice to such depositories or services or the Holders of the Series 2013 Bonds to be redeemed, or any defect therein, shall not affect the proceedings for redemption of Series 2013 Bonds as to which no such failure or defect has occurred. Failure of any Holder to receive any notice mailed as herein provided shall not affect the proceedings for redemption of such Holder's Series 2013 Bonds. The County may provide that a redemption will be contingent upon the occurrence of certain conditions and that if such conditions do not occur the notice of redemption will be rescinded, provided notice of rescission shall be mailed in the manner described above to all affected Series 2013 Bondholders as soon as practicable but in no event later than three business days following knowledge by the County and/or the Registrar that the condition for redemption has not or will not occur.

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SECURITY FOR THE SERIES 2013 BONDS General The County has covenanted and agreed to appropriate in its annual budget, by amendment, if necessary, from Non-Ad Valorem Revenues amounts sufficient to (A) pay principal of and interest on the Series 2013 Bonds when due, and (B) pay all required deposits to the Rebate Fund pursuant to the Resolution. "Non-Ad Valorem Revenues" means all General Fund Revenues and MSTD Revenues, other than revenues generated from ad valorem taxation on real or personal property, and all Impact Fee Proceeds, but only to the extent they are legally available to make the payments required in the Resolution. "General Fund Revenues" means total revenues of the County derived from any source whatsoever and that are allocated to and accounted for in the General Fund as shown in the Annual Audit. "General Fund" means the "General Fund" of the County as described and identified in the Annual Audit. "Impact Fee Proceeds" means the proceeds of all impact fees levied by the County that are allocated to and accounted for in the Capital Projects Funds as shown in the Annual Audit. "Capital Projects Fund" means the "Capital Projects Funds" of the County as described and identified in the Annual Audit. "MSTD Revenues" means all revenues of the County derived from any source whatsoever and that are allocated to and accounted for in the Unincorporated Area Municipal Services Taxing District Fund as shown in the Annual Audit. "Unincorporated Area Municipal Services Taxing District Fund" means the "Unincorporated Area Municipal Services Taxing District Fund" of the "Special Revenue Funds" of the County as such Funds are described and identified in the Annual Audit. Such covenant and agreement on the part of the County to budget and appropriate such amounts of Non-Ad Valorem Revenues shall be cumulative to the extent not paid, and shall continue until such Non-Ad Valorem Revenues or other legally available funds in amounts sufficient to make all such required payments shall have been budgeted, appropriated and actually paid. Notwithstanding the foregoing covenant of the County, the County does not covenant to maintain any services or programs, now provided or maintained by the County, which generate Non-Ad Valorem Revenues. Such covenant to budget and appropriate does not create any lien upon or pledge of such NonAd Valorem Revenues, nor does it preclude the County from pledging in the future its Non-Ad Valorem Revenues, nor does it require the County to levy and collect any particular Non-Ad Valorem Revenues, nor does it give the Series 2013 Bondholders a prior claim on the Non-Ad Valorem Revenues as opposed to claims of general creditors of the County. Such covenant to appropriate Non-Ad Valorem Revenues is subject in all respects to the payment of obligations secured by a pledge of such Non-Ad Valorem Revenues heretofore or hereafter entered into (including the payment of debt service on bonds and other debt instruments). However, the covenant to budget and appropriate for the purposes and in the manner stated in the Resolution shall have the effect of making available for the payment of the Series 2013 Bonds, in the manner described in the Resolution, Non-Ad Valorem Revenues and placing on the County a positive duty to appropriate and budget, by amendment, if necessary, amounts sufficient to meet its obligations under the Resolution; subject, however, in all respects to the restrictions of Section 129.07, Florida Statutes, which generally provide that the governing body of each county may only make appropriations for each fiscal year which, in any one year, shall not exceed the amount to be received from taxation or other revenue sources; and subject, further, to the payment of services and programs which are for essential public purposes affecting the health, safety and welfare of the inhabitants of the County or which are legally mandated by applicable law.

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The County has covenanted and agreed to transfer to the Paying Agent for the Series 2013 Bonds, solely from funds budgeted and appropriated as described in the Resolution, at least one business day prior to the date designated for payment of any principal of or interest on the Series 2013 Bonds, sufficient moneys to pay such principal or interest. The Registrar and Paying Agent shall utilize such moneys for payment of the principal and interest on the Series 2013 Bonds when due. THE SERIES 2013 BONDS SHALL NOT BE OR CONSTITUTE GENERAL OBLIGATIONS OR INDEBTEDNESS OF THE COUNTY AS "BONDS" WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION, BUT SHALL BE SPECIAL OBLIGATIONS OF THE COUNTY, PAYABLE SOLELY FROM AMOUNTS BUDGETED AND APPROPRIATED BY THE COUNTY FROM NON-AD VALOREM REVENUES IN ACCORDANCE WITH THE RESOLUTION. NO HOLDER OF ANY SERIES 2013 BOND SHALL HAVE THE RIGHT TO COMPEL THE EXERCISE OF ANY AD VALOREM TAXING POWER TO PAY SUCH SERIES 2013 BOND, OR BE ENTITLED TO PAYMENT OF SUCH SERIES 2013 BOND FROM ANY MONEYS OF THE COUNTY EXCEPT FROM THE NON-AD VALOREM REVENUES IN THE MANNER AND TO THE EXTENT PROVIDED IN THE RESOLUTION. No Reserve for the Series 2013 Bonds The County has determined not to fund a debt service reserve fund or account to further secure the Series 2013 Bonds. Anti-Dilution Test During such time as any Series 2013 Bonds are Outstanding under the Resolution, the County has agreed and covenanted with the Series 2013 Bondholders that (1) Non-Ad Valorem Revenues shall cover projected Maximum Annual Debt Service on the Series 2013 Bonds and maximum annual debt service on Debt by at least 1.5x; and (2) projected Maximum Annual Debt Service on the Series 2013 Bonds and maximum annual debt service for all Debt (as hereinafter defined) will not exceed 20% of the aggregate of General Fund Revenues, MSTD Revenues and Impact Fee Proceeds exclusive of (a) ad valorem tax revenues restricted to payment of debt service on any Debt and (b) any proceeds of the Series 2013 Bonds or Debt. The calculations required by (1) and (2) above shall be determined using the average of actual Non-Ad Valorem Revenues, General Fund Revenues, MSTD Revenues and Impact Fee Proceeds for the prior two Fiscal Years based on the County's Annual Audits. For purposes of the calculations required by clauses (1) and (2) above, Maximum Annual Debt Service on the Series 2013 Bonds and maximum annual debt service on Debt shall be done on an aggregate basis whereby the annual debt service for each is combined and the overall maximum is determined. For the purposes of the covenants contained in the preceding paragraph, maximum annual debt service on Debt means, with respect to Debt that bears interest at a fixed interest rate, the actual maximum annual debt service, and, with respect to Debt which bears interest at a variable interest rate, maximum annual debt service on such Debt shall be determined assuming that interest accrues on such Debt at the current "Bond Buyer Revenue Bond Index" as published in The Bond Buyer no more than two weeks prior to any such calculation; provided, however, if any Debt, whether bearing interest at a fixed or variable interest rate, constitutes Balloon Indebtedness, as defined below, maximum annual debt service on such Debt shall be determined assuming such Debt is amortized over 20 years on an approximately level debt service basis. "Debt" means at any date (without duplication) all of the following to the extent that they are secured by or payable in whole or in part from Non-Ad Valorem

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Revenues (A) all obligations of the County for borrowed money or evidenced by bonds, debentures, notes or other similar instruments; (B) all obligations of the County to pay the deferred purchase price of property or services, except trade accounts payable under normal trade terms and which arise in the ordinary course of business; (C) all obligations of the County as lessee under capitalized leases; and (D) all indebtedness of other Persons to the extent guaranteed by, or secured by, Non-Ad Valorem Revenues of the County; provided, however, if with respect to any obligation contemplated in (A), (B), or (C) above, the County has covenanted to budget and appropriate sufficient Non-Ad Valorem Revenues to satisfy such obligation but has not secured such obligation with a lien on or pledge of any Non-Ad Valorem Revenues then, and with respect to any obligation contemplated in (D) above, such obligation shall not be considered "Debt" for purposes of the Resolution unless the County has actually used Non-Ad Valorem Revenues to satisfy such obligation during the immediately preceding Fiscal Year or reasonably expects to use Non-Ad Valorem Revenues to satisfy such obligation in the current or immediately succeeding Fiscal Year. After an obligation is considered "Debt" as a result of the proviso set forth in the immediately preceding sentence, it shall continue to be considered "Debt" until the County has not used any Non-Ad Valorem Revenues to satisfy such obligation for two consecutive Fiscal Years. For purposes of this paragraph, "Balloon Indebtedness" means Debt, 25% or more of the original principal of which matures during any one Fiscal Year. In addition, with respect to debt service on any Debt which is subject to a Qualified Hedge Agreement, interest on such Debt during the term of such Qualified Hedge Agreement shall be deemed to be the Hedge Payments coming due during such period of time. With respect to debt service on any Debt with respect to which the County elects to receive or is otherwise entitled to receive direct subsidy payments from the United States Department of Treasury, when determining the interest on such Debt for any particular interest payment date the amount of the corresponding subsidy payment shall be deducted from the amount of interest which is due and payable with respect to such Debt on the interest payment date, but only to the extent that the County reasonably believes that it will be in receipt of such subsidy payment on or prior to such interest payment date.

GENERAL INFORMATION REGARDING NON-AD VALOREM REVENUES General The County generally receives two primary sources of general governmental revenue: ad valorem taxes and non-ad valorem revenues. Ad valorem taxes may not be pledged for the payment of debt obligations of the County maturing more than twelve months from the date of issuance thereof without approval of the electorate of the County. The ad valorem tax revenues of the County are not pledged as security for the payment of the Series 2013 Bonds and the County is not obligated to budget and appropriate ad valorem tax revenues for the payment of the Series 2013 Bonds. Non-ad valorem revenues of the County may be pledged, subject to certain limitations disclosed herein, for the payment of debt obligations of the County. Such non-ad valorem revenues include a broad category of revenues, including, but not limited to, revenues received from the State, investment income and income produced from certain services and facilities of the County, as described below. Series 2013 Bondholders do not have a lien on any specific non-ad valorem revenues of the County. As more fully described above under "SECURITY FOR THE SERIES 2013 BONDS," the County has covenanted and agreed in the Resolution, subject to certain restrictions and limitations, to appropriate in its annual budget, by amendment, if necessary, from Non-Ad Valorem Revenues amounts sufficient to pay principal of and interest on the Series 2013 Bonds when due in the manner and to the extent

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described herein. The holders of the Series 2013 Bonds do not have a lien on any specific Non-Ad Valorem Revenues of the County and the County has outstanding certain other debt obligations payable from a lien upon and pledge of certain of the Non-Ad Valorem Revenues of the County. A large percentage of the revenues of the County, including ad valorem taxes and non-ad valorem revenues, are deposited in the General Fund and the Unincorporated Area Municipal Services Taxing District Fund. The General Fund is the largest operating fund of the County. It is used to account for substantially all countywide activities and is supported principally by ad valorem taxes. The Unincorporated Area Municipal Services Taxing District Fund accounts for municipal type services provided in the unincorporated area of the County and is also supported primarily by ad valorem taxes. See "CERTAIN FINANCIAL MATTERS - General Fund and Unincorporated Area Municipal Services Taxing District Fund" herein. Furthermore, as described herein under "SECURITY FOR THE SERIES 2013 BONDS," the obligation of the County to budget and appropriate Non-Ad Valorem Revenues is subject to a variety of factors, including without limitation the payment of services and programs which are for essential public purposes affecting the health, safety and welfare of the inhabitants of the County or which are mandated by applicable law, and the obligation of the County to have a balanced budget. The County is permitted by the Florida Constitution to levy ad valorem taxes at a rate of up to $10 per $1,000 of assessed valuation for general governmental expenditures. The County's General Fund ad valorem tax millage rate for the fiscal year ending September 30, 2013 is $3.5645 per $1,000. The County's Unincorporated Area Municipal Services Taxing District Fund ad valorem tax millage rate for the fiscal year ending September 30, 2013 is $0.7161 per $1,000. The County is also permitted by the Florida Constitution to levy ad valorem taxes above the $10 per $1,000 limitation to pay debt service on general obligation long-term debt if approved by a voter referendum but does not currently do so. The Florida Department of Financial Services ("FDFS") has developed, as part of the Uniform Accounting System Manual's Chart of Accounts, six major categories of local government revenues: taxes, intergovernmental revenues, licenses, permits and impact fees, charges for services, fines and forfeitures and miscellaneous revenues. Using that organization, the following describes the major sources of the County's Non-Ad Valorem Revenues: Taxes Local Communications Services Tax The Communications Services Tax Simplification Act, enacted by Chapter 2000-260, Laws of Florida, as amended by Chapter 2001-140, Laws of Florida, and now codified in part as Chapter 202, Florida Statutes (the "CSTA") established, effective October 1, 2001, a communications services tax on the sale of communications services as defined in Section 202.11, Florida Statutes, and as of the same date repealed Section 166.231(9), Florida Statutes, which previously granted municipalities the authority to levy a utility services tax on the purchase of telecommunications services. Pursuant to Sections 202.19 and 202.20, Florida Statutes any sale of communications services charged to a service address in the County is subject to the County's local communications services tax ("Communications Services Tax") at a rate of 2.10%. The revenues that are received by the County from such Communications Services Tax which derive from the Local Communications Services Tax Clearing Trust Fund (the "Trust Fund") created with the Florida Department of Revenue ("FDOR") pursuant to Section 202.193, Florida Statutes may be pledged for the repayment of current or future bonded indebtedness.

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One effect of the CSTA was to replace the former telecommunications tax, including pre-paid calling arrangements, as well as any revenues from franchise fees on cable and telecommunications service providers and permit fees relating to placing or maintaining facilities in rights-of-way collected from providers of certain telecommunications services, with the local communications services tax. This change in law was intended to be revenue neutral to the counties and municipalities. The Communications Services Tax applies to a broader base of communications services than the former telecommunications tax. The telecommunications tax applies to the purchase of "telecommunications services" which originated or terminated within unincorporated Collier County, with certain exemptions described below. "Communication services" under the CSTA are defined as the transmission, conveyance, or routing of voice, data, audio, video, or any other information or signals, including cable services, to a point, or between or among points, by or through any electronic, radio, satellite, cable, optical, microwave, or other medium or method now in existence or hereafter devised, regardless of the protocol used for such transmission or conveyance. The term does not include: (a) (b) (c) (d) (e) (f) (g) (h)

Information services. Installation or maintenance of wiring or equipment on a customer's premises. The sale or rental of tangible personal property. The sale of advertising, including, but not limited to, directory advertising. Bad check charges. Late payment charges. Billing and collection services. Internet access service, electronic mail service, electronic bulletin board service, or similar on-line services.

However, such services have historically been taxed if the charges for such services are not stated separately from the charges for communications services, on a customer's bill. The sale of communications services to (i) the federal government, or any instrumentality or agency thereof, or any entity that is exempt from state taxes under federal law, (ii) the state or any county, municipality or political subdivision of the state when payment is made directly to the dealer by the governmental entity, and (iii) any educational institution (which includes state tax-supported and nonprofit private schools, colleges and universities and nonprofit libraries, art galleries and museums, among others) or religious institutions (which includes, but is not limited to, organizations having an established physical place for worship at which nonprofit religious services and activities are regularly conducted) that is exempt from federal income tax under Section 501(c)(3) of the Code are exempt from the Communications Services Tax. The CSTA provides that, to the extent that a provider of communications services is required to pay to a local taxing jurisdiction a tax, charge, or other fee under any franchise agreement or ordinance with respect to the services or revenues that are also subject to the Communications Services Tax, such provider is entitled to a credit against the amount of such Communications Services Tax payable to the State in the amount of such tax, charge, or fee with respect to such service or revenues. The amount of such credit is deducted from the amount that such local taxing jurisdiction is entitled to receive under Section 202(18)(3), Florida Statutes.

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Under the CSTA, local governments must work with the FDOR to properly identify service addresses to each municipality and county. If a jurisdiction fails to provide the FDOR with accurate service address information, the local government risks losing tax proceeds that it should properly receive. The County believes it has provided the FDOR with all information that the FDOR has requested as of the date hereof and that such information is accurate. Providers of communications services collect the Communications Services Tax and may deduct 0.75% as a collection fee (or 0.25% in the case of providers who do not employ an enhanced zip code database or a database that is either supplied or certified by the FDOR). The communications services providers remit the remaining proceeds to the FDOR for deposit into the Trust Fund. The FDOR then makes monthly contributions from the Trust Fund to local governments after deducting up to 1% of the total revenues generated as an administrative fee. The amount of Communications Services Tax revenues received by the County is subject to increase or decrease due to (i) increases or decreases in the dollar volume of taxable sales within the County, (ii) legislative changes, and/or (iii) technological advances which could affect consumer preferences, such as Voice over Internet Protocol ("VoIP"). Possible legislative changes include Senate Bill 290/House Bill 435 introduced in the Florida Legislature’s 2013 legislative session which is designed to clarify those certain prepaid calling arrangements which are subject to the Communications Services Tax and, therefore, excluded from the state retail sales tax. This legislation is designed to be remedial in nature because some communications services providers or retailers have historically collected and remitted state retail sales tax for certain prepaid services or plans that the FDOR deems to be outside the scope of such tax and rather within the scope of the Communications Services Tax. At this time, it is uncertain whether such legislation will be approved by the Florida Legislature, and if approved, in what form, and what affect it will have on the County’s finances, if any. Additionally, House Bill 303/Senate Bill 1422 has been introduced in the Florida Legislature's 2013 legislative session and is designed to reform the CSTA to repeal the local Communications Services Tax and consolidate the taxation of communications services in the State into a single unified statewide rate. The statewide rate for communications services would be increased while the authority of local governments to tax communications services locally would be repealed. Distributions to counties and municipalities based on this statewide increase would then be made based upon a new distribution formula. Additionally, the exemption on residential land line services would be removed and the collection allowance granted to dealers of communication services would be reduced. At this time, it is uncertain whether such legislation will be approved by the Florida Legislature, and if approved, in what form, and what affect it will have on the County's finances, if any. An example of technological advances which could affect consumer preferences includes VoIP. VoIP is a less expensive technology that allows telephone calls to be made in digital form using a broadband Internet connection, rather than an analog phone line, and has the potential to supplant traditional telephone service. It is possible that VoIP could either reduce the dollar volume of taxable sales within the County or will be a non-taxable service altogether. In 2012, the Florida Legislature passed House Bill 809 ("HB 809"), which updated and modified a number of provisions in which the communications services tax is levied. HB 809 revised the definition of "sales price" to expand the existing provisions relating to what charges a communications services dealer may exclude from the taxable sales price of communications services. HB 809 also modified the requirements of Section 202.22, Florida Statutes, relating to a dealer that does not use one of the three approved local tax situsing methods. The liability of a communications services tax dealer in the cases of underpayment of the tax resulting from that dealer assigning a service address to the incorrect local taxing jurisdiction is limited to only those situation where the dealer did not use an approved situsing

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method and the FDOR has determined the amount underpaid by that dealer between all jurisdictions. HB 809 made these revised definitions and liability provisions retroactive and remedial. The 2012 Revenue Estimated Conference estimates that the changes to dealer liability for incorrectly assigned service addresses will have a statewide negative impact on all local governments of $4.3 million in Fiscal Year 2013 and a recurring negative impact of $4.7 million. Other changes made by the bill will have a negative indeterminate effect on local government revenues; however, the Revenue Estimating Conference agreed that the provisions related to the taxation of items not separately stated would have a statewide negative recurring impact of at least $21.3 million for local Communications Services Tax, and the remedial and retroactive provisions will have at least a $2.2 million negative impact on local communications services tax. Although a negative impact on the County's collections of Communication Services Tax revenues is expected, at this time, the extent of HB 809 on the County's finances cannot be accurately ascertained. The amount of the Communications Services Tax revenues collected within the County may be adversely affected by the incorporation of new municipalities in the unincorporated areas of the County and the annexation of unincorporated areas of the County by the municipalities within the County. Such incorporation and/or annexation would decrease the number of addresses contained within the unincorporated areas of the County. At this time, there are no incorporations or annexations anticipated within the County. Intergovernmental Revenues All revenues received by a local unit from federal, state, and other local government sources in the form of grants, shared revenues, and payments in lieu of taxes would be included in the intergovernmental revenues category. The category is further classified into seven subcategories: federal grants, federal payments in lieu of taxes ("PILOT"), state grants, state shared revenues, state PILOT, local grants and local shared revenues. If a particular grant is funded from separate intergovernmental sources, then the revenue is recorded proportionately. The largest component is the "Local Government Half-Cent Sales Tax." Local Government Half-Cent Sales Tax Chapter 218, Part VI, Florida Statutes (the "Sales Tax Act"), authorizes the levy and collection by the State of sales tax upon, among other things, the sales price of each item or article of tangible personal property sold at retail in the State, subject to certain exceptions and dealer allowances. In 1982, the Florida Legislature created the Local Government Half-Cent Sales Tax Program (the "Half-Cent Sales Tax Program") which distributes a portion of the sales tax revenue and money from the State's General Revenue Fund to counties and municipalities that meet strict eligibility requirements. In 1982, when the Half-Cent Sales Tax Program was created, the general rate of sales tax in the State was increased from 4% to 5%, and one-half of the fifth cent was devoted to the Half-Cent Sales Tax Program, thus giving rise to the name "Half-Cent Sales Tax." Although the amount of sales tax revenue deposited into the Half-Cent Sales Tax Program is no longer one-half of the fifth cent of every dollar of the sales price of an item subject to sales tax, the name "Half-Cent Sales Tax" has continued to be utilized. The Half-Cent Sales Tax is collected on behalf of the State by businesses at the time of sale at retail, use, consumption, or storage for use or consumption, of taxable property and remitted to the State on a monthly basis. The Sales Tax Act provides for penalties and fines, including criminal prosecution, for non-compliance with the provisions thereof.

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Section 212.20, Florida Statutes, provides for the distribution of sales tax revenues collected by the State and further provides for the distribution of a portion of sales tax revenues to the Local Government Half-Cent Sales Tax Clearing Trust Fund (the "Half-Cent Sales Tax Trust Fund"), after providing for transfers to the State's General Revenue Fund. The entire sales tax remitted to the State by each sales tax dealer located within a particular county (the "Half-Cent Sales Tax Revenues") is deposited in the Half-Cent Sales Tax Trust Fund and earmarked for distribution to the governing body of such county and each participating municipality within that county pursuant to a distribution formula. The percentage of Half-Cent Sales Tax Revenues deposited in the Half-Cent Sales Tax Trust Fund is 8.814%. The general rate of sales tax in the State is currently 6.00%. After taking into account the distributions to the State's General Revenue Fund (historically 5% of taxes collected), for every dollar of taxable sales price of an item, approximately 0.501 cents is deposited into the Half-Cent Sales Tax Trust Fund. The Half-Cent Sales Tax Revenues are distributed from the Half-Cent Sales Tax Trust Fund on a monthly basis to participating units of local government in accordance the Sales Tax Act. The Sales Tax Act permits the County to pledge its share of the Half-Cent Sales Tax for the payment of principal of and interest on any capital project. Florida law also allows counties to impose a sales surtax of up to 1% to fund infrastructure improvements upon approval by a vote of the electors. The County has not imposed a 1% sales surtax. To be eligible to participate in the Half-Cent Sales Tax Program, each municipality and county is required to have: (i)

reported its finances for its most recently completed fiscal year to the FDFS as required by Florida law;

(ii)

made provisions for annual post audits of financial accounts in accordance with provisions of law;

(iii)

levied, as shown on its most recent financial report, ad valorem taxes, exclusive of taxes levied for debt service or other special millages authorized by the voters, to produce the revenue equivalent to a millage rate of three (3) mills on the dollar based upon 1973 taxable values or, in order to produce revenue equivalent to that which would otherwise be produced by such three (3) mill ad valorem tax, to have received a remittance from the county pursuant to a municipal services benefit unit, collected an occupational license tax, utility tax, or ad valorem tax, or have received revenue from any combination of those four sources;

(iv)

certified that persons in its employ as law enforcement officers meet certain qualifications for employment, and receive certain compensation;

(v)

certified that persons in its employ as firefighters meet certain employment qualifications and are eligible for certain compensation;

(vi)

certified that each dependent special district that is budgeted separately from the general budget of such county or municipality has met the provisions for annual post audit of its financial accounts in accordance with law; and

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(vii)

certified to the FDOR that it has complied with certain procedures regarding the establishment of the ad valorem tax millage of the county or municipality as required by law.

Although the Sales Tax Act does not impose any limitation on the number of years during which a county or municipality may receive distributions of the Half-Cent Sales Tax revenues from the Half-Cent Sales Tax Trust Fund, there may be amendments to the Sales Tax Act in subsequent years imposing additional requirements of eligibility for counties and municipalities participating in the HalfCent Sales Tax revenues, or the distribution formulas in Sections 212.20(6)(d) or 218.62, Florida Statutes, may be revised. To be eligible to participate in the Half-Cent Sales Tax Trust Fund in future years, the County must comply with the financial reporting and other requirements of the Sales Tax Act. Otherwise, the County would lose its Half-Cent Sales Tax Trust Fund distributions for twelve (12) months following a "determination of noncompliance" by FDOR. The County has always maintained eligibility to receive the Half-Cent Sales Tax revenues. Half-Cent Sales Tax revenues collected within a county and deposited in the Half-Cent Sales Tax Trust Fund are distributed among such county and the eligible municipalities therein in accordance with the following formula: County's share (expressed as a percentage of total Half-Cent Sales Tax Revenues)

Each municipality's share (expressed as a percentage of HalfCent Sales Tax Revenues)

=

unincorporated county population total county population

+

+

2/3 of the incorporated county population 2/3 of the incorporated county population

municipality population =

total county population

+

2/3 of the incorporated county population

The amount of Half-Cent Sales Tax revenues distributed to the County is subject to increase or decrease due to (i) more or less favorable economic conditions, (ii) increases or decreases in the dollar volume of taxable sales within the County, (iii) legislative changes relating to the Local Government HalfCent Sales Tax, which may include changes in the scope of taxable sales, changes in the tax rate and changes in the amount of sales tax revenue deposited into the Trust Fund and (iv) other factors which may be beyond the control of the County or the Series 2013 Bondholders, including but not limited to the increasing use of electronic commerce and other internet-related sales activity that could have a material adverse impact upon the amount of Local Government Half-Cent Sales Tax collected by the State and then distributed to the County. See "--Recent Legislation" below for a description of recent legislation regarding the State's Medicaid program and its potential effect on Half-Cent Sales Tax Revenues.

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State Revenue Sharing A portion of the taxes levied and collected by the State is shared with local governments under provisions of Chapter 218.215, Florida Statutes. To be eligible for State Revenue Sharing funds, a local government must have: (i)

reported its finances for its most recently completed fiscal year to the FDFS as required by Florida law;

(ii)

made provisions for annual post audits of financial accounts in accordance with provisions of law;

(iii)

levied, as shown on its most recent financial report, ad valorem taxes, exclusive of taxes levied for debt service or other special millages authorized by the voters, to produce the revenue equivalent to a millage rate of three (3) mills on the dollar based upon 1973 taxable values or, in order to produce revenue equivalent to that which would otherwise be produced by such three (3) mill ad valorem tax, to have received a remittance from the county pursuant to a municipal services benefit unit, collected an occupational license tax, utility tax, or ad valorem tax, or have received revenue from any combination of those four sources;

(iv)

certified that persons in its employ as law enforcement officers meet certain qualifications for employment, and receive certain compensation;

(v)

certified that persons in its employ as firefighters meet certain employment qualifications and are eligible for certain compensation;

(vi)

certified that each dependent special district that is budgeted separately from the general budget of such county or municipality has met the provisions for annual post audit of its financial accounts in accordance with law; and

(vii)

certified to the FDOR that it has complied with certain procedures regarding the establishment of the ad valorem tax millage of the county or municipality as required by law.

Eligibility is retained if the local government has met eligibility requirements for the previous three years, even if the local government reduces its millage or utility taxes because of the receipt of State Revenue Sharing funds. The amount of the State Revenue Sharing Trust Fund distributed to a county is calculated using a formula consisting of the following equally weighted factors: county population, unincorporated county population and county sales tax collections. A county's population factor means a county's population divided by the total population of all eligible counties in the State. The unincorporated county population factor means the county's unincorporated population divided by the total unincorporated population of all eligible counties in the State. A county's sales tax collections factor means that county's sales tax collections during the preceding year divided by the total sales tax collections during the same period for all eligible counties in the State. Funds are wired monthly by the FDOR.

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Each eligible county is entitled to receive a minimum amount of State Revenue Sharing Funds, known as the "guaranteed entitlement" and the "second guaranteed entitlement," the first of which is correlated to amounts received by such county from certain taxes on cigarettes, roads and intangible property in the State fiscal year 1971-1972 and the second of which is correlated to the amount received by such county in State fiscal year 1981-1982 from the then-existing tax on cigarettes and intangible personal property, less the guaranteed entitlement. The funds remaining in the Revenue Sharing Trust Fund after the distribution of the Guaranteed Entitlement and Second Guaranteed Entitlement are referred to as "growth monies" that are further distributed to eligible counties (the "Growth Monies"). There are no restrictions on the use of the Guaranteed Entitlement, Second Guaranteed Entitlement or the Growth Monies, however there are restrictions on the amount of funds that can be pledged for bond indebtedness. Counties are allowed to pledge the Guaranteed Entitlement and the Second Guaranteed Entitlement revenues. Counties can assign, pledge, or set aside as a trust for the payment of principal or interest on bonds or any other form of indebtedness an amount up to 50 percent of the State Revenue Sharing Funds (including Growth Monies) received by it in the prior State fiscal year. To be eligible to participate in State Revenue Sharing in future years, the County must comply with certain eligibility and reporting requirements. If the County fails to comply with such requirements, the FDOR may utilize the best information available to it, if such information is available, or take any necessary action including disqualification, either partial or entire, and the County shall further waive any right to challenge the determination of the FDOR as to its distribution, if any. See "--Recent Legislation" below for a description of legislation regarding the State's Medicaid program and its potential effect on the State Revenue Sharing funds. Recent Legislation Section 409.915, Florida Statutes, requires counties to pay a portion of the costs incurred by the State with respect to its Medicaid program. Historically, the State, through the Agency for Health Care Administration (the "Agency"), billed counties for their pro rata portions of Medicaid costs and the counties reimbursed the State from any legally available funds. To the extent a county disputed the amount billed by the Agency, such county typically withheld the disputed amount from its reimbursement payments. On March 9, 2012, the Florida Legislature passed House Bill 5301 (the "Medicaid Legislation") which made substantial changes to Section 409.915, Florida Statutes. The Governor of the State signed the Medicaid Legislation into law on March 29, 2012. Pursuant to the Medicaid Legislation, commencing May 1, 2012, the FDOR reduces each county's monthly distribution of the Half-Cent Sales Tax Revenues by the amount the Agency certifies is due from such county for its monthly share of Medicaid costs. A county that disputes the amounts withheld will have to file for a refund pursuant to a specific procedure developed by the Agency. Pursuant to the Medicaid Legislation, the Agency was also required to certify to each county by August 1, 2012, the amount of such county's billings from November 1, 2001 through April 30, 2012, which remained unpaid (the "Prior Disputed Amounts"). A county could have filed an administrative challenge to the Prior Disputed Amounts under the Medicaid Legislation, however in order to be successful a county must have shown, by a preponderance of the evidence, that the Prior Disputed

19

Amounts were in error. The Prior Disputed Amounts are to be paid over a five-year period on a monthly basis, commencing October 2012. Such monthly amounts are deducted by FDOR from each county's monthly distribution of State Revenue Sharing funds, provided such deducted amount shall not exceed 50% of the respective county's distribution. The Medicaid Legislation specifically provides that as an assurance to holders of any bonds issued before May 1, 2012, that are secured by either the State Revenue Sharing funds or the Half-Cent Sales Tax Revenues, or bonds issued to refund such bonds which mature no later than the refunded bonds and which result in reduced annual debt service, the amounts available to be distributed to a county will not be reduced below that which is necessary to make timely payments of debt service on such bonds and to otherwise comply with related bond covenants. These provisions will not apply to the Series 2013 Bonds. The following table shows the annual amounts actually paid by the County to the State with respect to Medicaid over the last six Fiscal Years: Fiscal Year Ended September 30 2007 2008 2009 2010 2011 2012

Medicaid Reimbursement Payments to the State $1,680,051.29 1,545,932.08 1,664,852.21 2,266,623.07 1,857,488.86 2,868,533.72

Source: Clerk of Circuit Courts Finance Department.

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The Agency certified the County's Prior Disputed Amounts in an amount equal to $1,486,404.26. The following table shows the County's estimates of its future Medicaid related annual payments that will reduce the amount of the Half-Cent Sales Tax Revenues it receives and of its annual payments for the Prior Disputed Amounts that will reduce the amount of the State Revenue Sharing funds it receives. On April 26, 2012, the Florida Association of Counties, the County and many other Florida counties filed a lawsuit against the State challenging the legality of the Medicaid Legislation. In October 2012, the County approved a settlement option whereby the County elected not to dispute the State’s Prior Disputed Amounts, to accept a 15% reduction of the Prior Disputed Amounts, and to make an early payment of $800,000 toward such amounts and spread the remaining balance over the next five (5) years, as provided below. The County then entered into an agreement with the Florida Agency for Health Care Administration on October 9, 2012 whereby payments for the Prior Disputed Amounts could be paid from general revenues as long as payments were made according to schedule. The purpose of this agreement was to avoid reductions to State Revenue Sharing funds. Fiscal Year Ending September 30 2013 2014 2015 2016 2017

Estimated Annual Payments for Ongoing Medicaid Costs(1) $2,215,000.00 2,259,400.00 2,304,600.00 2,350,700.00 2,397,700.00

Medicaid Reimbursement Payments to the State(2) $137,280.85 137,280.85 137,280.85 137,280.85 137,280.85

Amount by which the distribution of Half-Cent Sales Tax Revenues to the County will be reduced. Estimated based upon current status and history with a 2.0% inflation per annum added. (2) Fixed payment amounts from general revenues for the Prior Disputed Amounts. Source: Clerk of Courts Finance Department (1)

The Medicaid Legislation will reduce the amount of Half-Cent Sales Tax Revenues that will be distributed to the County each month. This will impact the amount of Half-Cent Sales Tax Revenues which may be legally available to pay debt service on the Series 2013 Bonds. To the extent Medicaid costs increase in the future, such impact will be greater. There can be no assurance that additional legislative or other proposals will not be introduced or enacted in the future that would, or might apply to, or have a material adverse impact on the County’s finances. At this time there is concept legislation being discussed which would allow counties to either continue following the current statutory process for reviewing the accuracy and correcting Medicaid bills or replace the current process of review of Medicaid bills and replace the mandatory reduction from HalfCent Sales Tax revenues the ability of such county to pay amounts due from any source of the county’s choosing. A formal bill has not be filed with the Florida Legislature. At this time, the County cannot predict whether such a bill will in fact be filed, and if filed in its current form, what effect, if any, it would have on the County if approved.

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Licenses, Permits and Impact Fees These are revenues derived from the issuance of local professional, occupational, and other licenses. Included in this category are impact fees. Pursuant to Ordinance No. 2001-13, as amended, such impact fees include: County-Wide Library Impact Fees, Emergency Medical Services Impact Fees, Government Facilities Impact Fees, Law Enforcement Impact Fees, Correctional Facilities Impact Fees, Road Impact Fees, Fire Impact Fees and Parks Impact Fees. The Board established separate impact fee trust funds for each of the County-Wide Library Impact Fees, Emergency Medical Services Impact Fees, Government Facilities Impact Fees, Law Enforcement Impact Fees, Correctional Facilities Impact Fees, Road Impact Fees, Fire Impact Fees and Parks Impact Fees. Each of these impact fee trust funds is maintained separate and apart from each other and from all other funds of the County. The funds deposited into each impact fee trust fund are to be used solely for the purpose of providing growth necessitated improvements and additions to the specific public facility for which such impact fees are received. Impact fees are charged on new construction and must be used for growth related capital expansion. The use of impact fees is limited under Florida law to (i) payment for expansion facilities or (ii) paying debt service on obligations issued to acquire or construct or refinance expansion facilities to the extent the debt service is attributable to expansion facilities. The use of impact fees is further limited to facility expansions related to the purpose of the impact fee itself. For example, County-Wide Library Impact Fees may only be used to pay debt service which relates to library facilities expansion. Under Florida law, investment earnings with respect to impact fees are subject to the same restrictions on use as the impact fees themselves. Impact fee revenues fluctuate with the amount of new construction or development which occurs within the County. Therefore, there can be no assurances that such revenue will not decrease or be eliminated altogether in the event that new construction, for whatever reason, might decrease or cease altogether within the County. The Refunded Projects being refinanced with proceeds of the Series 2013 Bonds consist of growth related improvements and additions for which Government Facilities Impact Fees, Correctional Facilities Impact Fees and Parks Impact Fees are legally available to pay. Therefore, Government Facilities Impact Fees, Correctional Facilities Impact Fees and Parks Impact Fees are legally available to pay the portion of debt service on the Series 2013 Bonds which is allocable to expansion of government facilities, correction facilities and parks. The Refunded Projects do not consist of law enforcement, library, emergency medical services, road or fire growth related improvements and additions. Therefore, Law Enforcement Impact Fees, Library Impact Fees, Emergency Medical Services Impact Fees, Road Impact Fees and Fire Impact Fees are not legally available to pay any debt service on the Series 2013 Bonds. Footnote 17 to the County's audited financial statements for the fiscal year ended September 30, 2012 which can be found in "APPENDIX C – Audited Financial Statements for the Fiscal Year Ended September 30, 2012" attached hereto states the following:

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22

"The following funds had fund balance deficits at September 30, 2012: Fund

Amount

Correctional Facilities Impact Fee County-Wide Library Impact Fee Emergency Medical Services Impact Fee Government Facilities Impact Fee Law Enforcement Impact Fee Total

($3,516,119) (8,255,818) (2,361,630) (19,763,041) (15,047,461) ($48,944,069)

The fund balance deficits are primarily the result of advances from other funds made prior to September 30, 2012. These advances were recorded to ensure repayment of non-impact fee monies loaned to the impact fee fund for the construction of growth necessitated facilities. County management anticipates that the deficits will be covered by future years' impact fee revenues.” County management further anticipates that the deficits in the Government Facilities Impact Fee Fund, the Correctional Facilities Impact Fee Fund and the Parks Impact Fee Fund will be paid down only after making allocable debt service payments on the Series 2013 Bonds. The County has utilized this interfund loan approach to track the degree to which unrestricted funds have subsidized growth-related expenditures, such that fund reimbursement can occur in future years when and if the subject impact fees exceed growth-related expenditures. Charges for Services Revenues resulting from a local unit's charges for services are reflected in this category and include those charges received from private individuals or other governmental units. The following functional areas include such charges: (i) (ii) (iii) (iv) (v) (vi) (vii)

General government; Public safety; Physical environment; Transportation; Economic environment; Human services; and Culture and recreation.

Fines and Forfeitures Fines and forfeitures reflect those penalties and fines imposed for the commission of statutory offenses, violation of lawful administrative rules and regulations, and for neglect of official duty. Forfeitures include revenues resulting from parking and court fines. Interest This category includes interest earned on County investments. As the economy slowed, the amount of interest received by the County has been negatively impacted.

23

Miscellaneous Revenues This category includes a variety of revenues including: (i) (ii) (iii) (iv) (v)

Rents and royalties; Disposition of fixed assets; Contributions and donations; Insurance proceeds; and Other miscellaneous revenue

The following table represents the County's determination of Non-Ad Valorem Revenues for the County's fiscal years ending September 30, 2007 through and including September 30, 2012 (excludes non-ad valorem revenues of the County which are not legally available to pay debt service on the Series 2013 Bonds). Certain of such revenues may heretofore or hereinafter be specifically pledged to secure other indebtedness by the County. Any such debt would be payable from such specific revenue sources prior to payment of debt service on the Series 2013 Bonds. Such table is not intended to represent revenues of the County which would necessarily be available to pay debt service on the Series 2013 Bonds, however they are an indication of the relative amounts of non-ad valorem revenues of the County which may be available for the payment of principal of and interest on the Series 2013 Bonds taking into account general government expenditures. Certain categories may cease to exist altogether and new sources may come about from time to time.

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COLLIER COUNTY, FLORIDA HISTORICAL NON-AD VALOREM REVENUES IN GENERAL FUND, UNINCORPORATED AREA MUNICIPAL SERVICES TAXING DISTRICT FUND AND CAPITAL PROJECTS FUNDS

Fiscal Year Ended September 30 2007 Taxes: Local Communications Services Tax(1) Occupational licenses(2)

2008

2009

2010

2011

2012

$5,074,746 638,862

$5,816,640 606,149

$7,524,101 460,672

$5,545,415 705,931

$5,589,726 571,945

$5,346,777 565,403

722,992

511,185

655,990

446,676

500,079

522,364

Impact Fees(3): Library Impact Fees Emergency Medical Services Impact Fees Law Enforcement Impact Fees Governmental Facilities Impact Fees Road Impact Fees Fire Impact Fees Correctional Facilities Impact Fees Parks Impact Fees

1,129,140 648,174 835,657 3,370,394 69,953,360 39,975 2,144,644 6,670,382

500,430 382,027 709,152 2,059,626 29,141,348 34,950 1,148,238 2,703,249

447,225 229,693 368,515 895,505 13,086,883 6,633 492,438 2,234,337

668,566 190,523 333,341 909,400 12,475,246 2,060 446,417 3,684,198

397,088 146,219 303,998 896,578 6,904,293 7,996 545,142 2,879,220

480,677 209,683 467,278 1,181,850 9,905,583 6,533 772,785 4,090,968

Intergovernmental: Local Government Half-Cent Sales Tax State Revenue Sharing Other(4)

32,568,173 9,651,669 7,030,289

30,003,927 8,975,798 3,482,833

26,778,873 7,927,456 3,534,801

26,926,904 7,854,315 1,585,972

28,364,419 8,254,866 2,611,847

29,712,986 8,401,888 2,678,212

Charges for services: General Government Public Safety Physical Environment Transportation Economic Environment Human Services Culture and Recreation

13,506,521 1,123,267 226,357 1,680 233,362 6,686,837

11,268,403 916,654 21,786 20,375 123,450 155,992 7,389,040

11,673,435 3,029,125 48,588 6,291 75,000 168,611 7,725,923

10,125,987 3,043,407 14,011 25,247 40,402 129,547 7,172,710

9,540,634 2,673,198 11,682 447 42,257 122,696 7,995,056

9,280,105 2,705,995 10,048 1,615 950 136,706 8,032,493

981,825 37,287,304 3,121,834

1,043,830 30,121,848 3,311,550

1,084,582 8,321,110 2,825,054

2,912,116 1,033,393 2,391,788

1,422,961 1,025,467 2,067,294

1,726,364 775,238 1,823,429

3,376,200 57,300 $207,080,944

3,349,000 54,900 $143,852,380

3,289,600 57,100 $102,947,541

3,459,500 83,400 $92,206,472

3,778,100 99,100 $86,752,308

3,838,550 104,100 $92,778,580

(1,129,140) (648,174) (835,657) (69,953,360) (39,975)

(500,430) (382,027) (709,152) (29,141,348) (34,950)

(447,225) (229,693) (368,515) (13,086,883) (6,633)

(668,566) (190,523) (333,341) (12,475,246) (2,060)

(397,088) (146,219) (303,998) (6,904,293) (7,996)

(480,677) (209,683) (467,278) (9,905,583) (6,533)

$134,474,638

$113,084,473

$88,808,592

$78,536,736

$78,992,714

$81,708,826

Licenses and Permits: Other

Fines and Forfeitures Interest Income(5) Miscellaneous Revenue(6) Payment in Lieu of Taxes(7) County Water and Sewer Solid Waste System Total sources of Non-Ad Valorem Revenues Less(3) Library Impact Fees Emergency Medical Services Impact Fees Law Enforcement Impact Fees Road Impact Fees Fire Impact Fees Total Legally Available Non-Ad Valorem Revenues

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During the fiscal year ended September 30, 2009, a recalculation of Communications Services Tax resulted in a higher than normal allocation to the County; however, this is not expected to continue in the future. (2) Occupational licenses, previously classified as "Licenses and Permits," began to be classified as "Taxes" beginning with the fiscal year ended September 30, 2008. (3) Except as described below, only categories of impact fees which are eligible to fund the capital projects being refinanced by the Series 2013 Bonds are shown in the schedule. The use of impact fees is limited under Florida law to (1) payment for expansion facilities or (2) paying debt service on obligations issued to acquire or construct or refinance expansion facilities to the extent the debt service is attributable to expansion facilities. The use of impact fees is further limited to facility expansions related to the purpose of the impact fee itself. For example, County-Wide Library Impact Fees may only be used to pay debt service which relates to library facilities expansion. The Refunded Projects being refinanced with proceeds of the Series 2013 Bonds consists of growth related improvements and additions for which Government Facilities Impact Fees, Correctional Facilities Impact Fees and Parks Impact Fees are legally available to pay. Therefore, Government Facilities Impact Fees, Correctional Facilities Impact Fees and Parks Impact Fees are legally available to pay the portion of debt service on the Series 2013 Bonds which is allocable to expansion of government facilities, correction facilities and parks. The Refunded Projects do not consist of law enforcement, library, emergency medical services, road or fire growth related improvements and additions. Therefore, Law Enforcement Impact Fees, Library Impact Fees, Emergency Medical Services Impact Fees, Road Impact Fees and Fire Impact Fees are not legally available to pay any debt service on the Series 2013 Bonds. Under Florida law, investment earnings with respect to impact fees are subject to the same restrictions on use as the impact fees themselves. Impact fees revenues fluctuate with the amount of new construction or development which occurs within the County. Therefore, there can be no assurances that such revenue will not decrease or be eliminated altogether in the event that new construction, for whatever reason, might decrease or cease altogether within the County. (4) Includes Alcoholic Beverage Licenses, Child Support Enforcement Program Grants, Insurance Agents License Fees, Emergency Management Assistance Federal Grants, FEMA Reimbursements, Oil/Gas Severance Tax, and Intergovernmental Accrual. (5) Pursuant to Section 28.33, Florida Statutes, the Clerk of Courts formerly retained interest earned on County surplus monies and remitted the excess to the County's General Fund. Section 28.33, Florida Statutes, was amended in July of 2009, and all interest on County surplus monies is deemed income of the County. (6) Includes Radio Tower Lease, Facilities Leases, Golden Gate Lease, Scrap Sales, Cemetery Lot Fees, Surplus Furniture, Miscellaneous Revenues, Scrap Sales, and Private Contributions. (7) Generally accepted accounting principles, as applied to governmental accounting, require that payments in lieu of taxes that are reasonably equivalent in value to services received should be booked as interfund transfers. Therefore, this revenue source is not separately stated in the County's audited financial statements. Source: Clerk of Courts Finance Department. (1)

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COLLIER COUNTY OTHER OBLIGATIONS PAYABLE FROM NON-AD VALOREM REVENUES The County has other debt issues outstanding which are secured by and payable from specific Non-Ad Valorem Revenues (excluding gas taxes and net revenues of the water and sewer enterprise fund, neither of which are legally available to pay debt service on the Series 2013 Bonds). Such indebtedness is summarized below:

Description

Source of Security

Amount Outstanding(1)

Final Maturity

Maximum Annual Debt Service on a Per Issue Basis(2)

Capital Improvement and Refunding Revenue Bonds, Series 2003(3)

Covenant to Budget and Appropriate Non-Ad Valorem Revenues

$8,605,000

10/01/2033

$2,366,119

Capital Improvement and Refunding Revenue Bonds, Series 2005(3)

Covenant to Budget and Appropriate Non-Ad Valorem Revenues

$61,145,000

10/01/2035

$9,838,919

Special Obligation Revenue Bonds, Series 2010

Covenant to Budget and Appropriate Non-Ad Valorem Revenues

$56,660,000

7/01/2034

$4,053,000

Special Obligation Refunding Revenue Bonds, Series 2010B

Covenant to Budget and Appropriate Non-Ad Valorem Revenues

$20,215,000

10/01/2021

$2,729,600

Special Obligation Refunding Revenue Bonds, Series 2011

Covenant to Budget and Appropriate Non-Ad Valorem Revenues

$86,175,000

10/01/2029

$9,316,556

TOTAL: (1) (2) (3)

$163,050,000 The amount outstanding on each bond issue is calculated as of March 13, 2013. Maximum Annual Debt Service is calculated by fiscal year, on a per issue basis. The County will refund all of its outstanding Capital Improvement and Refunding Revenue Bonds, Series 2003 and Capital Improvement and Refunding Revenue Bonds, Series 2005 with proceeds of the Series 2013 Bonds on or about April 16, 2013, together with other legally monies of the County. See "PLAN OF REFUNDING" herein.

Since there is no lien on the Non-Ad Valorem Revenues in favor of the Holders of the Series 2013 Bonds, the exercise of remedies by the holders of the other obligations heretofore or hereafter issued which are payable from Non-Ad Valorem Revenues may result in the payment of debt service on any such obligations prior to the payment of debt service on the Series 2013 Bonds.

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CERTAIN FINANCIAL MATTERS Financial and Operating Plan (Budget) and Capital Improvement Planning Policy The County's budget is adopted by the Board no later than September 30th of each year, and the County's budget has consistently received the Government Finance Officers Association of the United States and Canada ("GFOA") Certificate of Achievement for its budget presentations since the County began participation in the program in 1988. The County utilizes the following procedures in establishing the budgetary data reflected in its financial statements: 1. Prior to October 1st, the County prepares a proposed operating budget for the subsequent fiscal year. The operating budget includes proposed expenditures and the means of financing them. 2.

Public hearings are conducted to obtain taxpayer comments.

3.

Prior to October 1st, the budget is legally adopted through passage of a resolution.

4. Formal budgetary integration is employed as a management control device during the year for the County funds. 5. Budgets for all County funds are adopted on a basis consistent with generally accepted accounting principles. 6.

Expenditures may not legally exceed budgeted appropriation at the fund level.

The County maintains a five-year Capital Improvement Program which is updated annually in connection with the adoption of the budget. Proposed projects are prioritized and funds are allocated to projects according to their order of priority. The 5-year strategic capital plans which are part of the policy coordinate capital needs and the impact of those capital needs on operating budgets. Financial Reporting and Annual Audit The GFOA has awarded a Certificate of Achievement for Excellence in Financial Reporting to the County for its Comprehensive Annual Financial Report ("CAFR") in each year since the County began participation in the program in 1986. Florida law requires that an annual audit of each county's accounts and records be completed by a firm of independent certified public accountants retained and paid for by such county. Ernst and Young performed the audit for the fiscal year ended September 30, 2012. The audited financial statements for the fiscal year ended September 30, 2012 appear as APPENDIX C attached hereto. General Fund and Unincorporated Area Municipal Services Taxing District Fund The General Fund and the Unincorporated Area Municipal Services Taxing District Fund are the general operating funds of the County. They account for all financial resources except for those required to be accounted for in any other fund. The largest source of revenue in these funds are ad valorem taxation. Ad valorem taxes have not been pledged to secure the Series 2013 Bonds which means that the County cannot be compelled to levy ad valorem taxes in order to pay debt service on the Series 2013

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Bonds. Revenues deposited in the General Fund and the Unincorporated Area Municipal Services Taxing District Fund do not directly correspond to the Non-Ad Valorem Revenues from which debt service on the Series 2013 Bonds is payable as some General Fund Revenues and MSTD Revenues are not legally available to pay debt service on the Series 2013 Bonds. Operations are removed from the General Fund and the Unincorporated Area Municipal Services Taxing District Fund only when they are deemed to be true enterprise operations. Although the Series 2013 Bonds are not payable from ad valorem taxation, approximately 76.16% of General Fund Revenues and MSTD Revenues which are collected by the County come from ad valorem taxes. To the extent that the future collection of ad valorem tax revenues is adversely affected, a larger portion of non-ad valorem revenues would be required to balance the budget and provide for the payment of services and programs which are for essential public purposes affecting the health, safety and welfare of the inhabitants of the County or which are mandated by applicable law. The following chart shows information regarding the General Fund and the Unincorporated Area Municipal Services Taxing District Fund (no Capital Projects Funds and no other funds in the Special Revenue Funds are included in the chart) for the County's fiscal years ending September 30, 2007 through and including September 30, 2012 (neither Impact Fee Proceeds or associated expenditures are included in such chart):

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COLLIER COUNTY, FLORIDA COMBINED GENERAL FUND AND MSTD REVENUES, EXPENDITURES AND FUND BALANCE

Revenues: Taxes Licenses and Permits(1) Intergovernmental Charges for Services Fines and Forfeitures(2) Interest Income(3) Change in Fair Value of Investments Special Assessments Miscellaneous Revenue Total Revenues Expenditures: Current: General Government Public Safety Physical Environment Transportation Economic Environment Human Services Culture and Recreation Capital Outlay Total Expenditures Excess of Revenues Over Expenditures Other Financing Sources (Uses): Transfers In Transfers Out Total Other Financing Sources (Uses) Special Item(4) Net Change in Fund Balances Beginning Fund Balance Ending Fund Balance

2007

2008

2009

2010

2011

2012

$306,286,498 1,361,854 49,250,131 21,778,024 981,825 37,287,304

$289,622,389 511,185 42,462,558 19,895,700 1,043,830 30,121,848

$278,075,691 655,990 38,241,130 22,726,973 1,084,582 8,321,110

$275,653,528 446,676 36,367,191 20,551,310 2,912,116 1,033,393

$241,913,414 500,079 39,332,399 20,385,970 1,422,961 1,025,467

$229,780,940 522,364 41,058,174 20,167,911 1,726,364 775,806

644,092 3,121,834 420,711,562

(65,954) 8,805 3,311,550 386,911,911

(9,180) 6,869 2,825,054 351,928,219

92,714 8,509 2,391,788 339,457,225

(3,269) 2,067,294 306,644,315

(117,068) 1,823,429 295,737,920

70,187,358 148,936,384 1,645,309 10,313,371 1,423,577 9,913,611 27,227,621 25,032,856

70,731,192 156,907,136 1,431,597 15,111,324 2,083,981 10,792,336 27,266,514 7,214,829

71,537,062 150,530,339 1,541,951 10,989,636 970,306 8,695,982 26,391,127 10,237,202

63,100,791 147,364,802 1,654,464 10,181,581 992,971 9,144,886 26,632,060 6,045,002

61,826,048 142,512,685 1,422,563 10,746,659 930,939 10,273,973 26,144,920 3,935,778

57,909,628 135,452,608 1,338,859 9,731,081 1,075,140 8,597,484 25,836,285 3,800,906

294,680,087

291,538,909

280,893,605

265,116,557

257,793,565

243,741,991

126,031,475

95,373,002

71,034,614

74,340,668

48,850,750

51,995,929

11,801,918

9,540,115

14,015,338

9,949,156

10,340,525

9,177,018

(125,854,183)

(114,855,452)

(108,662,615)

(64,295,409)

(64,132,697)

(58,577,604)

(114,052,265) 11,979,210 83,737,370 $95,716,580

(105,315,337) (3,287,593) (13,229,928) 95,716,580 $82,486,652

(94,647,277) 3,239,000 (20,373,663) 82,486,652 $62,112,989

(54,346,253) 19,994,415 62,112,989 $82,107,404

(53,792,172) (4,941,422) 82,107,404 $77,165,982

(49,400,586) 2,595,343 77,165,982 $79,761,325

Occupational licenses, previously classified as "Licenses and Permits," began to be classified as "Taxes" beginning with the fiscal year ended September, 30, 2008. (2) Effective during the fiscal year ended September 30, 2007 a change in Florida law required the Clerk of Courts to remit certain fines and forfeitures to the State instead of the County. (3) Pursuant to Section 28.33, Florida Statutes, the Clerk of Courts formerly retained interest earned on County surplus monies and remitted the excess to the County's General Fund. Section 28.33, Florida Statutes, was amended in July of 2009, and all interest on County surplus monies is deemed income of the County. (4) On August 14, 2008, the Circuit Court issued a ruling requiring the Clerk to post a bond in the amount of $3,239,000 with the registry of the court, including registry fees of $48,593. On December 18, 2008, the Circuit Court ordered the Clerk cause to be released to the County's General Fund the $3,239,000 cash bond. Source: Clerk of Courts Finance Department. (1)

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While the table above is not intended to represent revenues of the County which would necessarily be available to pay debt service on the Series 2013 Bonds, they are an indication of the relative amounts of legally available non-ad valorem revenues of the County which may be available for the payment of principal of and interest on the Series 2013 Bonds taking into account general governmental expenditures. The ability of the County to appropriate Non-Ad Valorem Revenues in sufficient amounts to pay the principal of and the interest on the Series 2013 Bonds is subject to a variety of factors, including the County's responsibility to provide for the payment of services and programs which are for essential public purposes affecting the health, safety and welfare of the inhabitants of the County or which are mandated by applicable law and the obligation of the County to have a balanced budget. No representation is being made by the County that any particular non-ad valorem revenue source will be available in future years, or if available, will be budgeted to pay debt service on the Series 2013 Bonds. Continued consistent receipt of Non-Ad Valorem Revenues is dependent upon a variety of factors, including formulas specified under Florida law for the distribution of certain of such funds which take into consideration the ratio of residents in unincorporated areas of the County to total County residents. Aggressive annexation policies by municipalities in the County or greater growth in the incorporated areas of the County as compared to unincorporated areas could have an adverse effect on certain non-ad valorem revenues. The amounts and availability of any of the Non-Ad Valorem Revenues to the County are also subject to change, including reduction or elimination by change of State law or changes in the facts or circumstances according to which certain of the Non-Ad Valorem Revenues are allocated. In addition, the amount of certain of the Non-Ad Valorem Revenues collected by the County is directly related to the general economy of the County. Accordingly, adverse economic conditions could have a material adverse effect on the amount of non-ad valorem revenues collected by the County. The County may also specifically pledge certain of the Non-Ad Valorem Revenues or covenant to budget and appropriate legally available non-ad valorem revenues of the County to future obligations that it issues. In the case of a specific pledge, such Non-Ad Valorem Revenues would be required to be applied to such obligations prior to paying the principal of and interest on the Series 2013 Bonds. Classification of Local Government Expenditures The County classifies its expenditures in accordance with the Uniform Accounting System devised by the FDFS. General government expenditures arise from operations of legislative, judicial and administrative activities of the local government. These costs are related to operations of the Board, the County Manager's office, comprehensive planning, financial operations, legal expenses, court services and other general government services. Public safety expenditures reflect all costs provided to achieve a satisfactory living environment for the community and its citizens which include expenditures for the County's Sheriff and fire department operations, as well as emergency disaster relief services and protective inspections. Physical environment expenditures relate to the County's conservation and natural resource management efforts. Transportation expenditures generally reflect the costs of roads, bridges and streets.

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Economic environment expenditures include the costs of providing economic development activities, housing opportunities and related programs, and other activities intended to raise the economic status of the citizenry. Human services expenditures reflect the County's activities related to the care treatment and control of mental and physical illness and similar services. Culture and recreation expenditures include the County's costs of operating parks and recreation facilities and of offering special events, cultural services and programs and similar services. Capital outlay expenditures include expenditures which result in the acquisition of, or addition to, fixed assets such as buildings, land and roads. Debt service expenditures are used to account for principal and interest payments on local government debt.

RETIREMENT PLAN AND OTHER POST EMPLOYMENT BENEFITS Florida Retirement System General The information relating to the Florida Retirement System ("FRS") contained herein has been obtained from the FRS Annual Reports available at www.dms.myflorida.com and the Florida Comprehensive Annual Financial Reports available at http://www.myfloridacfo.com/aadir/statewide_financial_reporting. No representation is made by the County as to the accuracy or adequacy of such information or that there has not been any material adverse change in such information subsequent to the date of such information. Substantially all full and part time employees of the County are eligible to participate in the FRS. The FRS was created in Chapter 121, Florida Statutes, to provide a defined benefit pension plan for participating public employees ("FRS Pension Plan"). The Florida State Board of Administration ("SBA") manages the FRS. The SBA is governed by a three-member board of trustees which includes Florida's elected governor, chief financial officer and attorney general, which function as chairman, treasurer, and secretary, respectively. FRS membership is required for all employees filling a regularly established position in a state agency, county, city agency, state university, state community college, or district school board. Cities, municipalities, special districts, charter schools and metropolitan planning organizations have the option of participating in the FRS; however, participation is irrevocable after the entity elects to participate. There are five general classes of membership in the FRS: (1) Senior Management Service Class ("SMSC") members which include senior management level positions in state and local governments and assistant state attorneys, prosecutors and public defenders; (2) Special Risk Class which includes positions such as law enforcement officers, firefighters, correctional officers, emergency medical technicians and paramedics; (3) Special Risk Administrative Support Class which include non-special risk law enforcement, firefighting, emergency medical care or correctional administrative support positions within a FRS special risk-employing agency; (4) Elected Officers’ Class ("EOC") which includes members who are elected state and city officers and the elected officers of cities and special districts that choose to

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place their officials in this class; and (5) Regular Class members includes members that do not qualify for membership in the other classes. Since July 1, 2001, the FRS Pension Plan has provided for vesting of benefits after six years of creditable service. Members not actively working in a position covered by the FRS on July 1, 2001, must return to covered employment for up to one work year to be eligible to vest with less service than was required under the law in effect before July 1, 2001. Members initially enrolled on or after July 1, 2001, through June 30, 2011, vest after six years of service. Members initially enrolled on or after July 1, 2011, vest after eight years of creditable service. Members are eligible for normal retirement when they have met the requirements listed below. Regardless of class, a member may take early retirement any time after vesting within 20 years of normal retirement age; however, there is a five percent benefit reduction for each year prior to normal retirement age. Regular Class, SMSC and EOC members initially enrolled in the FRS Pension Plan before July 1, 2011 are eligible for normal retirement with six or more years of creditable service and an age 62 or higher, or 30 years of creditable service regardless of age. For Regular Class, SMSC and EOC members initially enrolled in the FRS on or after July 1, 2011, normal retirement eligibility is eight or more years of creditable service and an age 65 or higher, or 33 years of creditable service regardless of age. Special Risk Class and Special Risk Administrative Support Class members initially enrolled in the FRS Pension Plan before July 1, 2011, are eligible for normal retirement with six or more years of special risk class service and an age 55 or higher, or 25 years of special risk service regardless of age. With up to four years of active duty wartime service and a total of 25 years of service including special risk service, the retirement age drops to age 52. Without at least six years of Special Risk Class service, members of the Special Risk Administrative Support Class must meet the retirement requirements of the Regular Class. For Special Risk Class and Special Risk Administrative Support Staff members initially enrolled in the FRS Pension Plan after July 1, 2011, normal retirement eligibility is eight or more years of special risk class service and an age of 60 or higher, or 30 years of special risk service regardless of age. With up to four years of active duty wartime service and a total of 30 years of service including special risk service, the retirement age drops to age 57. Without at least eight years of Special Risk Class service, members of the Special Risk Administrative Support Class must meet the retirement requirements of the Regular Class. Benefits under the FRS Pension Plan are computed on the basis of age, average final compensation, creditable years of service, and accrual value by membership class. Members are also eligible for in-line-of-duty or regular disability and survivors’ benefits. Pension benefits of retirees and annuitants are increased each July 1 by a cost-of-living adjustment. If the member is initially enrolled in the FRS before July 1, 2011, and all service credit was accrued before July 1, 2011, the annual cost-of-living adjustment is 3% per year. If the member is initially enrolled before July 1, 2011, and has service credit on or after July 1, 2011, there is an individually calculated cost-of-living adjustment. The annual cost-ofliving adjustment is a proportion of 3% determined by dividing the sum of the pre-July 2011 service credit by the total service credit at retirement multiplied by 3%. FRS Pension Plan members initially enrolled on or after July 1, 2011, will not have a cost-of-living adjustment after retirement. Subject to provisions of Section 121.091, Florida Statutes, the Defined Retirement Option Program (the "DROP") permits employees eligible for normal retirement under the FRS to defer receipt of monthly benefit payments while continuing employment with an FRS employer. An employee may participate in the DROP for a period not to exceed 60 months while the member’s benefits accumulate in the FRS Trust Fund. Authorized instructional personnel may participate in the DROP for up to 36 additional months beyond their initial 60-month participation period. During the period of DROP participation, deferred

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monthly benefits are held in the FRS Trust Fund and accrue interest. As of June 30, 2012, the FRS Trust Fund projected $2,939,923,585 in accumulated benefits and interest for 40,556 current and prior DROP participants. The FRS is a cost-sharing multiple-employer public-employee retirement system with two primary plans. The Department of Management Services, Division of Retirement administers the FRS Pension Plan and the SBA invests the assets of the FRS Pension Plan held in the FRS Trust Fund. Administration costs of the FRS Pension Plan are funded through investment earnings of the FRS Trust Fund. Reporting of the FRS is on the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized when the obligation is incurred. The SBA administers the Public Employee Optional Retirement Program (the "FRS Investment Plan"), an alternative defined contribution plan available to all FRS members. Retirement benefits are based upon the value of the member’s account upon retirement. Regardless of membership class, FRS Investment Plan contributions vest after one year of service. If a member elects to transfer amounts from the FRS Pension Plan to that member’s the FRS Investment Plan account, the member must meet the sixyear vesting requirement for any such transferred funds and associated earnings. The FRS Investment Plan is funded by employer contributions that are based on salary. Contributions are directed to individual member accounts, and the individual members allocate contributions and account balances among various approved investment choices. Administration costs of the FRS Investment Plan are funded through a 0.03% employer contribution and forfeited benefits. Disability coverage is provided under the FRS Investment Plan. After termination and applying to receive benefits, the member may rollover vested funds to another qualified plan, structure a periodic payment under the FRS Investment Plan, receive a lump-sum distribution, or leave the funds invested for future distribution. Participating employers must comply with the statutory contribution requirements. Section 121.031(3), Florida Statutes, requires an annual actuarial valuation of the FRS Pension Plan, which is provided to the Florida Legislature as guidance for funding decisions. Employer contribution rates under the uniform rate structure (a blending of both the FRS Pension Plan and FRS Investment Plan rates) are recommended by the actuary but set by the Florida Legislature. Statutes require that any unfunded actuarial liability ("UAL") be amortized within 30 plan years and any surplus amounts available to offset total retirement system costs are to be amortized over a 10-year rolling period on a level-dollar basis. As of June 30, 2012, the balance of legally required reserves for all defined benefit pension plans was $120,017,121,495. Such funds are reserved to provide for total current and future benefits, refunds and administration of the FRS Pension Plan. The chart below shows the funding progress for the FRS which presents multi-year trend information about whether the actuarial value of plan assets are increasing or decreasing over time relative to the actuarial accrued liability for benefits.

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Schedule of Funding Progress for the Florida Retirement System

Actuarial Valuation Date 7/1/07 7/1/08 7/1/09(3) 7/1/10(4) 7/1/11

Actuarial Value of Assets (a)(1) $125,584,704 130,720,547 118,764,692 120,929,666 126,078,053

Actuarial Accrued Liability (AAL) - Entry Age (b)(1) $118,870,513 124,087,214 136,375,597 139,652,377 145,034,475

Unfunded ML (UAAL) (b-a)(1) $(6,714,191) (6,633,333) 17,610,905 18,722,711 18,956,422

Funded Ratio (a/b) 105.65% 105.35 87.09 86.59 86.93

Covered Payroll (c)(1)(2) $26,385,768 26,891,340 26,573,196 25,765,362 25,686,138

UAAL As % of Covered Payroll (b-a)/c (25.45)% (24.67) 66.27 72.67 73.80

000 omitted dollar amounts. Payroll includes DROP payroll. (3) As reported in July 1, 2009 actuarial valuation report, prior to impact of House Bill 479 (2009). (4) As reported in July 1, 2010 actuarial valuation report, prior to impact of Senate Bill 2100 (2011). Source: The Florida Retirement System, Pension Plan & Other State-Administered Systems, Annual Report: July 1, 2007 – June 30, 2011. (1) (2)

The information presented in the above schedule was determined as part of the actuarial valuations performed at the dates indicated. Additional information as of the latest actuarial valuation is as follows: Florida Retirement System Assumptions Valuation Date Actuarial cost method Amortization method Equivalent Single amortization period(1) Asset valuation method Actuarial assumptions: Investment rate of return Projected salary increases(2) Includes inflation at Cost-of-Living Adjustments

July 1, 2011 Entry Age Normal Level Percentage of Pay, Open 30 years 5-year Smoothed Method 7.75% 5.85% 3.00% 3.00%

Used for GASB Statement 27 reporting purposes. Includes individual salary growth of 4.00% plus an age-graded merit scale defined by general and employment class. Source: The Florida Retirement System, Pension Plan & Other State-Administered Systems, Annual Report: July 1, 2010 – June 30, 2011. (1) (2)

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The chart below shows the Annual Required Contribution by the County to the FRS and the percentage of such contribution to the ARC for the past six fiscal years: Schedule of County Contributions to the Florida Retirement System Year Ended September 30 2007 2008 2009 2010 2011 2012

Annual Required Contribution $28,307,047 28,209,276 28,052,665 30,811,862 24,504,802 15,253,034

Percentage Contributed 100% 100 100 100 100 100

Source: Collier County, Florida Comprehensive Annual Financial Reports for the Fiscal Years ended September 30, 2007 through and including 2012. Senate Bill 2100 The Florida Legislature passed Senate Bill 2100 ("SB 2100") during its 2011 session and was signed by Governor Rick Scott on May 20, 2011. SB 2100 makes significant changes to the FRS with respect to employee contributions and employer contributions, among other items. Effective July 1, 2011, all members of FRS were required to contribute 3% of their gross compensation toward their retirement. In addition, the legislation reduced the required employer contribution rates for each membership class and subclass of the FRS. For fiscal year ended June 30, 2011, contribution rates ranged from 10.77% to 23.25% of annual covered payroll. Under SB 2100, employer contribution rates range from 4.91% to 14.10% of annual covered payroll. Additionally, the bill eliminated the cost of living adjustment for all FRS employees for service earned on or after July 1, 2011, although the bill does contemplate reinstatement of the adjustment in 2016 under certain circumstances. Although no further action is required on the part of the Florida Legislature to implement the amendments in SB 2100, on June 20, 2011, the Florida Education Association and the Police Benevolent Association, joined by the Florida Public Services Union, a chapter of the Service Employees International Union and Teamsters Local 385 (collectively, the "FRS Plaintiffs"), filed a lawsuit in Circuit Court in Tallahassee, Florida challenging the above described legislative changes with respect to existing FRS members (the "FRS Lawsuit"). The FRS Lawsuit alleges SB 2100 unlawfully impairs state employee contracts, constitutes a taking of private property without full compensation and violates government workers constitutional right to collective bargaining. The Circuit Court held the challenged portions of SB 2100 constituted an unconstitutional impairment of the FRS Plaintiffs’ contract with the State. Ultimately, on January 17, 2013, the Florida Supreme Court agreed with the State and reversed the judgment of the Circuit Court upholding as constitutional the challenged provisions of SB 2100. SB 2100 makes other changes to the FRS that only apply to employees who initially enroll on or after July 1, 2011, including: (1) the average final compensation upon which retirement benefits are calculated are based on the eight highest (formerly five highest) fiscal years of compensation prior to retirement; (2) the DROP is maintained but the interest accrual rate is reduced from 6.5% to 1.3%; (3) the

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normal retirement age is increased from 62 to 65; and (4) the years of creditable service is increased from 30 to 33 and the vesting period is increased to eight years (formerly six). County OPEB General In accordance with Section 112.0801, Florida Statutes, the County provides post retirement health care to all employees who retire from the employ of the County. This is administered via a singleemployer defined benefit healthcare plan (the "County Plan"). In most cases, the retiree pays 100% of the premium cost for the retiree to participate in the County's insurance program. As a rule, the cost of health care increases with age. Thus age-adjusted healthcare premiums for active employees can normally be expected to be less than age-adjusted premiums for retirees. When a single premium is established for both active employees and retirees, the retiree benefits from a lower premium. Governmental Accounting Standards Board ("GASB") Statement No. 45 describes such an arrangement as an implicit rate subsidy and mandates that any retiree savings be treated as Other Post Employment Benefits ("OPEB") even though the employer makes no payments directly on behalf of retirees. The County Plan provides healthcare benefits including medical coverage, prescription drug benefits, vision care, dental care and life insurance coverage to both active and eligible retired employees. Eligibility for participation in the County Plan is limited to full time employees of the County, employees who are active participants in the County Plan at the time of retirement, who retire and are either vested with the FRS, are vested in the FRS and are age 62, have 30 years of creditable service before age 62, or meet alternative criteria if disabled or a member of a Special Risk Class. Surviving spouses or dependents of participating retirees may continue in the County Plan if eligibility criteria specific to those classes are met. In an open session, the County approves the County Plan rates for the enrollment period, and may amend the County Plan with changes to the benefits, premiums and/or levels of participant contribution at any time. In addition, the Board offers an OPEB option that subsidizes the cost of health care for its retirees who have at least 60% of eligible accrued sick leave remaining at the time of retirement and have completed 15 years of continuous service with the Board. In addition, the retiree must retire from the County, be at least 55 years of age or have completed 30 years of service under the FRS and be eligible to receive an FRS benefit with no break in time. Such employees are eligible to receive a 50% to 100% subsidy toward the cost of coverage under the active County Plan. The Tax Collector offers an OPEB plan that subsidizes 100% of the cost of health care for employees with 10 years of service, between the ages of 54 and 64 and who exchange 800 hours of sick leave at retirement. The County Plan does not issue a publicly available financial report. At September 30, 2012, the date of the latest actuarial valuation, County Plan participation consisted of: Primary Government Active County Plan Participants Retirees and Beneficiaries Receiving Benefits Total Membership

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2,054 122 2,176

Funding Policy The County has not authorized a qualifying trust or Agency Fund for its OPEB liability. The County does, however, have the authority to establish and amend a funding policy. For the fiscal year ended September 30, 2012, the County contributed $511,971 to the County Plan. Annual OPEB Cost, Net OPEB Obligation and Accrued Actuarial Liability Amount The County's annual cost (expense) for OPEB is calculated based on the Annual Required Contribution ("ARC") an amount actuarially determined in accordance with GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liability over a period not to exceed 30 years. The contributions made for the 2012 fiscal year were 70.7% of the annual OPEB cost. As of the September 30, 2012 actuarial valuation date, the County's net OPEB obligation was $650,070 and its unfunded accrued actuarial liability ("UAAL") was $6.7 million, all of which was unfunded. The covered payroll (annual payroll of active employees covered by the County Plan) was $150.8 million, and the ratio of the unfunded actuarial accrued liability to covered payroll was 4.4%. Sheriff's OPEB General The Sheriff offers an OPEB plan that subsidizes the cost of health care for its retirees who have six years of creditable service with the Sheriff and who receive a monthly retirement benefit from the FRS (the "Sheriff Plan"). The Sheriff subsidizes approximately 20% for both single coverage and family coverage for qualifying individuals. In 2012, the subsidy was no longer made available to eligible retirees who chose to continue their health insurance coverage. Additionally, in accordance with Section 112.0801, Florida Statutes, Sheriff's employees who retire and immediately begin receiving benefits from the FRS have the option of paying premiums to continue in the Sheriff's health insurance plan at the same group rate as for active employees. The Sheriff Plan does not issue a publicly available financial report. At September 30, 2012, the date of the latest actuarial valuation, Sheriff Plan participation consisted of: Sheriff Sheriff Plan Participants Retirees Receiving Benefits Total Membership

1,100 100 1,200

Funding Policy The Sheriff has the authority to establish and amend funding policy. The OPEB Plan is currently being funded on a pay-as-you-go basis. For the year ended September 30, 2012, the Sheriff contributed $1,192,805 to the Sheriff Plan. No Qualifying Trust or agency fund has been established for the Sheriff Plan.

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Annual OPEB Cost and OPEB Obligation The annual cost of the Sheriff Plan is calculated based on the ARC, an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any UAAL over a period not to exceed 30 years. The contributions made for the 2012 fiscal year were 108.4% of the annual OPEB cost. As of the September 30, 2012 actuarial valuation date, the Sheriff Plan’s net OPEB obligation was $1,048,138 and its UAAL was $13.3 million, all of which was unfunded. The covered payroll (annual payroll of active employees covered by the Sheriff Plan) was $108.4 million, and the ratio of the unfunded actuarial accrued liability to covered payroll was 12.3%.

FLORIDA CONSTITUTIONAL LIMITATIONS AND PROPERTY TAX REFORM General. During recent years, various legislative proposals and constitutional amendments relating to ad valorem taxation and revenue limitation have been introduced in the State. Many of these proposals sought to provide for new or increased exemptions to ad valorem taxation, limit the amount of revenues that local governments could generate or otherwise restrict the ability of local governments in the State to levy ad valorem taxes at recent, historical levels. There can be no assurance that similar or additional legislative or other proposals will not be introduced or enacted in the future that would, or might apply to, or have a material adverse effect upon the County or its finances. Several Constitutional and Legislative amendments affecting ad valorem taxes have been approved by voters in the past including the following: Save Our Homes Amendment. By voter referendum held on November 3, 1992, Article VII, Section 4 of the State Constitution was amended by adding thereto a subsection which, in effect, limits the increases in assessed just value of homestead property to the lesser of (1) three percent of the assessment for the prior year or (2) the percentage change in the Consumer Price Index for all urban consumers, U.S. City Average, all items 1967=100, or successor reports for the preceding calendar year as initially reported by the United States Department of Labor, Bureau of Labor Statistics. Further, the amendment provides that (1) no assessment shall exceed just value, (2) after any change of ownership of homestead property or upon termination of homestead status such property shall be reassessed at just value as of January 1 of the year following the year of sale or change of status, (3) new homestead property shall be assessed at just value as of January 1 of the year following the establishment of the homestead, and (4) changes, additions, reductions or improvements to homestead shall initially be assessed as provided for by general law, and thereafter as provided in the amendment. This amendment is known as the "Save Our Homes Amendment." The effective date of the amendment was January 5, 1993 and, pursuant to a ruling by the Florida Supreme Court, it began to affect homestead property valuations commencing January 1, 1995, with 1994 assessed values being the base year for determining compliance. Millage Rollback Legislation. In 2007, the Florida Legislature adopted Chapter 2007-321, Laws of Florida, a property tax plan which significantly impacted ad valorem tax collections for Florida local governments. One component of the adopted legislation required counties, cities and special districts to rollback their millage rates for the 2007-2008 fiscal year to a level that, with certain adjustments and exceptions, would generate the same level of ad valorem tax revenue as in fiscal year 2006-2007; provided, however, depending upon the relative growth of each local government’s own ad valorem tax revenues from 2001 to 2006, such rolled back millage rates were determined after first reducing 2006-2007

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ad valorem tax revenues by zero to nine percent (0% to 9%). In addition, the legislation limits how much the aggregate amount of ad valorem tax revenues may increase in future fiscal years. A local government may override certain portions of these requirements by a supermajority, and for certain requirements, a unanimous vote of its governing body. The County fell into the 9% ad valorem tax revenue reduction category. As a result, the County's General Fund millage rate was reduced from $3.5790 per $1,000 in fiscal year 2006-07 to $3.1469 per $1,000 in fiscal year 2007-08. The County's general millage rate remained the same for the fiscal year 2008-09. While the constitutional amendments which passed on January 29, 2008 did not impact the County's fiscal year 2007-08 budget, they did have an impact on the approach the County took to formulate the budget for fiscal year 2008-09 and beyond. On September 22, 2011, the Board adopted a General Fund millage rate of $3.5645 per $1,000 for fiscal year 2012-13 which is equal to the millage rate which was adopted by the Board for the previous four fiscal years. Constitutional Amendments Related to Ad Valorem Exemptions. On January 29, 2008, in a special election held in conjunction with the State's presidential primary, the requisite number of voters approved amendments to the Florida Constitution exempting certain portions of a property’s assessed value from taxation. The following is a brief summary of certain important provisions contained in such amendments: 1. Provides for an additional exemption for the assessed value of homestead property between $50,000 and $75,000, thus doubling the existing homestead exemption for property with an assessed value equal to or greater than $75,000. 2. Permits owners of homestead property to transfer their Save Our Homes Amendment benefit (up to $500,000) to a new homestead property purchased within two years of the sale of their previous homestead property to which such benefit applied if the just value of the new homestead is greater than or is equal to the just value of the prior homestead. If the just value of the new homestead is less than the just value of the prior homestead, then owners of homestead property may transfer a proportional amount of their Save Our Homes Amendment benefit, such proportional amount equaling the just value of the new homestead divided by the just value of the prior homestead multiplied by the assessed value of the prior homestead. As discussed above, the Save Our Homes Amendment generally limits annual increases in ad valorem tax assessments for those properties with homestead exemptions to the lesser of three percent (3%) or the annual rate of inflation. 3. Exempts from ad valorem taxation $25,000 of the assessed value of property subject to tangible personal property tax. 4. Limits increases in the assessed value of non-homestead property to 10% per year, subject to certain adjustments. The cap on increases would be in effect for a 10-year period, subject to extension by an affirmative vote of electors. The amendments were effective for the 2008 tax year (fiscal year 2008-2009 for local governments). Over the last few years, the Save Our Homes Amendment assessment cap and portability provisions described above have been subject to legal challenge. The plaintiffs in such cases have argued that the Save Our Homes Amendment assessment cap constitutes an unlawful residency requirement for

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tax benefits on substantially similar property in violation of the equal protection provisions of the Florida Constitution and the Privileges and Immunities Clause of the Fourteenth Amendment to the United States Constitution. The plaintiffs also argued that the portability provision simply extends the unconstitutionality of the tax shelters granted to long-term homeowners by Save Our Homes Amendment. The courts in each case have rejected such constitutional arguments and upheld the constitutionality of such provisions; however, there is no assurance that any future challenges to such provisions will not be successful. In addition to the legislative activity described above, the constitutionally mandated Florida Taxation and Budget Reform Commission (required to be convened every 20 years) (the "TBRC") completed its meetings on April 25, 2008 and placed several constitutional amendments on the November 4, 2008 General Election ballot. Three of such amendments were approved by the voters of Florida, which, among other things, do the following: (a) allow the Florida Legislature, by general law, to exempt from assessed value of residential homes, improvements made to protect property from wind damage and installation of a new renewable energy source device; (b) assess specified working waterfront properties based on current use rather than highest and best use; (c) provide a property tax exemption for real property that is perpetually used for conservation (began in 2010); and, (d) for land not perpetually encumbered, require the Florida Legislature to provide classification and assessment of land use for conservation purposes solely on the basis of character or use. Exemption for Deployed Military Personnel. In the November 2010 General Election voters approved a constitutional amendment which provides an additional homestead exemption for deployed military personnel. The exemption equals the percentage of days during the prior calendar year that the military homeowner was deployed outside of the United States in support of military operations designated by the Florida Legislature. This constitutional amendment took effect on January 1, 2011. At this time, it is impossible to estimate with any certainty the level of impact that the constitutional amendment will have on the County. Other Proposals Affecting Ad Valorem Taxation. During the Florida Legislature’s 2011 Regular Session, it passed Senate Joint Resolution 592 ("SJR 592"). SJR 592 allows totally or partially disabled veterans who were not Florida residents at the time of entering military service to qualify for the combatrelated disabled veteran’s ad valorem tax discount on homestead property. The amendment is effective January 1, 2013. During the Florida Legislature’s 2012 Regular Session, it passed House Joint Resolution 93 ("HJR 93"). HJR 93 allows the Florida Legislature to provide ad valorem tax relief to the surviving spouse of a veteran who died from service-connected causes while on active duty as a member of the United States Armed Forces and to the surviving spouse of a first responder who died in the line of duty. The amount of tax relief, to be defined by general law, can equal the total amount or a portion of the ad valorem tax otherwise owed on the homestead property. The amendment is effective January 1, 2013. Also during the Florida Legislature’s 2012 Regular Session, it passed House Joint Resolution 169 ("HJR 169") allowing the Florida Legislature by general law to permit counties and municipalities, by ordinance, to grant an additional homestead tax exemption equal to the assessed value of homestead property to certain low income seniors. To be eligible for the additional homestead exemption the county or municipality must have granted the exemption by ordinance; the property must have a just value of less than $250,000; the owner must have title to the property and maintained his or her permanent residence thereon for at least 25 years; the owner must be age 65 years or older; and the owner’s annual

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household income must be less than $27,300. The additional homestead tax exemption authorized by HJR 169 would not apply to school property taxes. Each of the above described proposals was approved by the voters on November 6, 2012. At present, the impact of these amendments on the County’s finances cannot be accurately ascertained. There can be no assurance that similar or additional legislative or other proposals will not be introduced or enacted in the future that would, or might apply to, or have a material adverse effect upon, the County’s finances. Proposed Legislation. Senate Bill 740/House Bill 921 has been introduced in the Florida Legislature’s 2013 Regular Session. These bills propose to delete an ad valorem tax exemption for property owned by certain Florida-based limited partnerships and used for affordable housing for certain income-qualified persons. Additionally, Senate Bill 354/House Bill 531 ("SB 354/HB 531") has been introduced in the Florida Legislature’s 2013 Regular Session. These bills propose to make certain leasehold interests and improvements on land owned by the United States, a branch of the U.S. Armed Forces, or any agency or quasi-governmental agency of the United states exempt from ad valorem taxation under certain circumstances. If approved, SB 354/HB 531 will apply retroactively to January 1, 2007, however, there are not any properties in the County for which refunds will be required to be made. At this time, it is uncertain whether such legislation described above will be approved by the Florida Legislature, and if approved, what affect it will have on the County’s finances, if any.

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ESTIMATED SOURCES AND USES OF FUNDS The proceeds to be received from the sale of the Series 2013 Bonds, together with other legally available monies of the County, are expected to be applied as follows: SOURCES OF FUNDS: Par Amount of Series 2013 Bonds ..................................................................... Plus Net Original Issue Premium...................................................................... Plus: Other Legally Available Monies .............................................................

$73,805,000.00 2,082,016.10 131,729.43

TOTAL SOURCES ...............................................................................................

$76,018,745.53

USES OF FUNDS:

(1) (2)

Deposit to Escrow Deposit Fund(1) .................................................................... Costs of Issuance(2) ...............................................................................................

$73,878,640.31 2,140,105.22

TOTAL USES .......................................................................................................

$76,018,745.53

To be applied to refund the Refunded Bonds. See "PLAN OF REFUNDING" herein. Includes underwriter's discount and legal, financial advisory and other fees and expenses.

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DEBT SERVICE SCHEDULE The following table sets forth the annual debt service schedule for the Series 2013 Bonds. Year Ending October 1 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 TOTAL

Principal

Interest $1,304,863.54 2,846,975.00 2,846,975.00 2,846,975.00 2,846,975.00 2,846,975.00 2,846,975.00 2,846,975.00 2,846,975.00 2,846,975.00 2,846,975.00 2,846,975.00 2,846,975.00 2,538,775.00 2,344,375.00 2,142,375.00 1,932,375.00 1,741,275.00 1,473,175.00 1,195,800.00 867,800.00 526,800.00 268,600.00 $50,499,913.54

$7,705,000 4,860,000 5,050,000 5,250,000 5,460,000 7,660,000 7,925,000 8,200,000 8,525,000 6,455,000 6,715,000 $73,805,000

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Total Debt Service $1,304,863.54 2,846,975.00 2,846,975.00 2,846,975.00 2,846,975.00 2,846,975.00 2,846,975.00 2,846,975.00 2,846,975.00 2,846,975.00 2,846,975.00 2,846,975.00 10,551,975.00 7,398,775.00 7,394,375.00 7,392,375.00 7,392,375.00 9,401,275.00 9,398,175.00 9,395,800.00 9,392,800.00 6,981,800.00 6,983,600.00 $124,304,913.54

INVESTMENT POLICY The moneys held in the funds and accounts under the Resolution may only be invested in Authorized Investments (as defined in the Resolution). The investment of surplus funds is currently governed by the provisions of the County's Investment Policy, established by the Board under Section 218, Florida Statutes. The policy authorizes investment of surplus public funds in the permitted investments described in Section 218.415, Florida Statutes. Pursuant to a Board resolution, the Clerk of the Circuit Court (the "Clerk") administers to the investment policy for investment of such surplus funds. The investment policy establishes guidelines as to the type, maturity, composition and risk relating to the County's investment portfolio. Permitted investments pursuant to such investment policy include the following: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.

Florida Local Government Surplus Trust Fund (State Board of Administration ("SBA")); US Government Securities - Direct Obligations; US Federal Agencies - Backed by Full Faith and Credit of US Government; US Federal Instrumentalities - US Federal Agency Securities Not Backed by Full Faith and Credit of US Government, except for Student Loan Marketing Association; Certificates of Deposit - Collateralized with US Government Securities or Federal Agencies; Repurchase Agreements; Fixed Income Mutual Funds - Collateralized with US Government Securities or Federal Agencies; Domestic Bankers Acceptances - Rated "AA" or higher, and inventory based; Prime Commercial Paper - Rated "A-1" and "P-1;" Tax-Exempt Obligations - Rated "AA" or higher and issued by state or local governments; Now Account - Fully collateralized in accordance with Chapter 280, Florida Statutes (limited to Depository Bank/Concentration Bank); Variable Rate Securities only if the rate is a straight floating rate that is set in a direct, as opposed to inverse, relationship to a single index; and Mortgage Securities (CMOs) only if they are: a. Issued by US Federal Agencies or US Federal Instrumentalities, b. Pass the Federal Financial Investment Examination Council (FFIEC) test at time of purchase, and c. Have an average life of seven (7) years or less and have an absolute final maturity of no more than fifteen (15) years at zero PSA. The term "zero PSA" means that all interest and principal payments are guaranteed to be made by the stated final maturity assuming no prepayments.

Specifically prohibited investments include the following: 1. 2. 3. 4. 5.

Interest only strips of mortgaged backed securities; Leveraged bonds; Structured notes or financings other than mortgage securities that meet the provisions of the investment policy (permit callable and step up coupons); Variable rate securities that set a rate based on an inverse relationship to an index; and Variable rate debt that sets a rate based on more than a single index.

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The objective of the investment policy is to match investment cash flow and maturity with known cash needs and anticipated cash flow requirements (i.e., match assets to liabilities) to the extent possible. Investment of funds shall have final maturities of not more than five (5) years, except for: 1. 2. 3. 4. 5. 6. 7. 8.

SBA - no stated final maturity; Certificates of Deposit - 1 Year; Repurchase Agreements - 90 Days; Bankers Acceptances - 180 Days; Prime Commercial Paper - 180 Days; Fixed Income Mutual Funds - no stated final maturity. However, underlying US Government Securities and Federal Agencies have average maturity of 1 year; Mortgage Securities - average life of 7 years or less and have an absolute final maturity of no more than 15 years at zero PSA; and US Government Securities and Federal Agencies deposited into an escrow account in connection with the refunding of a County bond issue can have a final maturity of more than 5 years.

Mortgage securities shall not be used to match liabilities that are reasonably definable as to amount and disbursement date. Mortgage securities can only be used to invest funds associated with reserves or liabilities that are not associated with a specifically identified cash flow schedule. Mortgage securities can be used to prudently enhance the return on the portfolio. Any and all exceptions to the investment policy require a vote of the majority of Board. Furthermore, the Board may revise the aforementioned investment policy from time to time.

LEGAL MATTERS Certain legal matters in connection with the issuance of the Series 2013 Bonds are subject to an approving legal opinion of Nabors, Giblin & Nickerson, P.A., Tampa, Florida, Bond Counsel, whose approving opinion (a form of which is attached hereto as "APPENDIX D – Form of Opinion of Bond Counsel") will be available at the time of delivery of the Series 2013 Bonds. The actual legal opinion to be delivered by Bond Counsel may vary from that text if necessary to reflect facts and law on the date of delivery. Such opinion will speak only as of its date, and subsequent distribution of it by recirculation of this Official Statement or otherwise shall create no implication that Bond Counsel has reviewed or expresses any opinion concerning any of the matters referenced in the opinion subsequent to its date. Bond Counsel has not been engaged to, nor has it undertaken to, review (1) the accuracy, completeness or sufficiency of this Official Statement or any other offering material relating to the Series 2013 Bonds; provided, however, that Bond Counsel will render an opinion to the Underwriter of the Series 2013 Bonds (upon which opinion only the Underwriter may rely) relating to the fairness of the presentation of certain statements contained herein under the heading "TAX EXEMPTION" and certain statements which summarize provisions of the Resolution, the Series 2013 Bonds, and federal tax law, and (2) the compliance with any federal or state law with regard to the sale or distribution of the Series 2013 Bonds. Certain legal matters will be passed upon by Jeffrey A. Klatzkow, Esq., County Attorney, and by Bryant Miller Olive P.A., Tampa, Florida, Disclosure Counsel to the County.

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LITIGATION There is no pending or, to the knowledge of the County, any threatened litigation against the County of any nature whatsoever which in any way questions or affects the validity of the Series 2013 Bonds, or any proceedings or transactions relating to their issuance, sale, execution, or delivery, or the adoption of the Resolution, or the covenant to budget and appropriate Non-Ad Valorem Revenues in the manner and to the extent described herein and in the Resolution. Neither the creation, organization or existence, nor the title of the present members of the Board, or other officers of the County is being contested. The Board has been named as a defendant in three related lawsuits, styled Francis Hussey, et al v. Collier County, Case No. 08-6933-CA; Board of County Commissioners v. Francis D Hussey, et al., Case No. 086988-CA consolidated with 08-6933-CA; and Sean Hussey, et al.. v. Collier County, et al., Case No. 08-7025CA. On September 11, 2008, the Plaintiffs' Francis D. Hussey, Jr. and Mary P. Hussey, husband and wife, and Winchester Lakes Corporation, a Florida corporation, filed an Inverse Condemnation suit seeking monetary damages from Collier County, the Honorable Charlie Crist, the Governor of the State of Florida and the Florida Department of Community Affairs. The Husseys contend that the designation of certain real property owned by them by a Growth Management Plan Amendment adopted in 2002 had the effect of precluding mining activities on property, thereby resulting in a substantial diminution in value of the real estate, which the Plaintiffs contend to be compensable under Florida law. The Complaint alleges damage claims, as of June, 2002, in the amount of $67,300,000, and as of July, 2007, in the amount of $91,500,000. The Plaintiffs have also presented a claim for "inverse condemnation based on a regulatory taking of Plaintiffs' property," in an amount not specified in the Complaint. The Wildlife Federation and Collier County Audubon Society was granted leave to intervene in the suit by the Court on April 29, 2009. On July 9, 2009, the Florida Wildlife Federation and Collier County Audubon Society served upon Defendants Francis and Mary Hussey a Notice of Intent to Sue over Violations of the Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.) Land Clearing of Primary Panther Habitat, RCW Foraging Habitat, and Wood Stork Foraging Habitat. The cases have been dismissed with prejudice by the trial court and are now on appeal. The parties recently entered into a Settlement Agreement, conditioned upon Court approval, with no costs to be incurred by the County. County believes that this litigation will be concluded with no risk of liability. Regardless, whether or not the plaintiffs are successful, any potential liability is not expected to affect the County's ability to pay the principal and interest on the Series 2013 Bonds. The County experiences other claims, litigation, and various legal proceedings which, except as described above, individually are not expected to have a material adverse effect on the operations or financial condition of the County, but may, in the aggregate, have a material impact thereon. In the opinion of the County Attorney, however, the County will either successfully defend such actions or otherwise resolve such matters without any material adverse consequences on the financial condition of the County.

DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS Pursuant to Section 517.051, Florida Statutes, as amended, no person may directly or indirectly offer or sell securities of the County except by an offering circular containing full and fair disclosure of all defaults as to principal or interest on its obligations since December 31, 1975, as provided by rule of the Office of Financial Regulation within the Florida Financial Services Commission (the "FFSC"). Pursuant

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to administrative rulemaking, the FFSC has required the disclosure of the amounts and types of defaults, any legal proceedings resulting from such defaults, whether a trustee or receiver has been appointed over the assets of the County, and certain additional financial information, unless the County believes in good faith that such information would not be considered material by a reasonable investor. The County is not and has not been in default on any bond issued since December 31, 1975 that would be considered material by a reasonable investor in the Series 2013 Bonds. The County has not undertaken an independent review or investigation of securities for which it has served as conduit issuer. The County does not believe that any information about any default on such securities is appropriate and would be considered material by a reasonable investor in the Series 2013 Bonds because the County would not have been obligated to pay the debt service on any such securities except from payments made to it by the private companies on whose behalf such securities were issued and no funds of the County would have been pledged or used to pay such securities or the interest thereon.

TAX EXEMPTION Opinion of Bond Counsel In the opinion of Bond Counsel, the form of which is included as "APPENDIX D – Form of Opinion of Bond Counsel" attached hereto, the interest on the Series 2013 Bonds is excludable from gross income and is not a specific item of tax preference for federal income tax purposes under existing statutes, regulations, rulings and court decisions. However, interest on the Series 2013 Bonds is taken into account in determining adjusted current earnings for the purpose of computing the federal alternative minimum tax imposed on corporations pursuant to the Internal Revenue Code of 1986, as amended (the "Code"). Failure by the County to comply subsequently to the issuance of the Series 2013 Bonds with certain requirements of the Code, regarding the use, expenditure and investment of Series 2013 Bonds proceeds and the timely payment of certain investment earnings to the Treasury of the United States, may cause interest on the Series 2013 Bonds to become includable in gross income for federal income tax purposes retroactive to their date of issuance. The County has covenanted in the Resolution to comply with all provisions of the Code necessary to, among other things, maintain the exclusion from gross income of interest on the Series 2013 Bonds for purposes of federal income taxation. In rendering its opinion, Bond Counsel has assumed continuing compliance with such covenants. Internal Revenue Code of 1986 The Code contains a number of provisions that apply to the Series 2013 Bonds, including, among other things, restrictions relating to the use or investment of the proceeds of the Series 2013 Bonds and the payment of certain arbitrage earnings in excess of the "yield" on the Series 2013 Bonds to the Treasury of the United States. Noncompliance with such provisions may result in interest on the Series 2013 Bonds being included in gross income for federal income tax purposes retroactive to their date of issuance. Collateral Tax Consequences Except as described above, Bond Counsel will express no opinion regarding the federal income tax consequences resulting from the ownership of, receipt or accrual of interest on, or disposition of, the Series 2013 Bonds. Prospective purchasers of Series 2013 Bonds should be aware that the ownership of

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Series 2013 Bonds may result in other collateral federal tax consequences. For example, ownership of the Series 2013 Bonds may result in collateral tax consequences to various types of corporations relating to (1) denial of interest deduction to purchase or carry such Series 2013 Bonds, (2) the branch profits tax, and (3) the inclusion of interest on the Series 2013 Bonds in passive income for certain Subchapter S corporations. In addition, the interest on the Series 2013 Bonds may be included in gross income by recipients of certain Social Security and Railroad Retirement benefits. PURCHASE, OWNERSHIP, SALE OR DISPOSITION OF THE SERIES 2013 BONDS AND THE RECEIPT OR ACCRUAL OF THE INTEREST THEREON MAY HAVE ADVERSE FEDERAL TAX CONSEQUENCES FOR CERTAIN INDIVIDUAL AND CORPORATE BONDHOLDERS, INCLUDING, BUT NOT LIMITED TO, THE CONSEQUENCES DESCRIBED ABOVE. PROSPECTIVE SERIES 2013 BONDHOLDERS SHOULD CONSULT WITH THEIR TAX SPECIALISTS FOR INFORMATION IN THAT REGARD. Other Tax Matters Interest on the Series 2013 Bonds may be subject to state or local income taxation under applicable state or local laws in other jurisdictions. Purchasers of the Series 2013 Bonds should consult their own tax advisors as to the income tax status of interest on the Series 2013 Bonds in their particular state or local jurisdictions. During recent years, legislative proposals have been introduced in Congress, and in some cases enacted, that altered certain federal tax consequences resulting from the ownership of obligations that are similar to the Series 2013 Bonds. In some cases, these proposals have contained provisions that altered these consequences on a retroactive basis. Such alterations of federal tax consequences may have affected the market value of obligations similar to the Series 2013 Bonds. From time to time, legislative proposals are pending which could have an effect on both the federal tax consequences resulting from ownership of the Series 2013 Bonds and their market value. No assurance can be given that additional legislative proposals will not be introduced or enacted that would or might apply to, or have an adverse effect upon, the Series 2013 Bonds. For example, proposals have been discussed in connection with deficit spending reduction, job creation and other tax reform efforts that could significantly reduce the benefit of, or otherwise affect the exclusion from gross income of, interest on obligations such as the Series 2013 Bonds. The President previously released legislative proposals that would, among other things, subject interest on tax-exempt obligations to a Federal income tax for taxpayers with incomes above certain thresholds for tax years beginning after 2012. The further introduction or enactment of one or more of such proposals could affect the market price or marketability of the Series 2013 Bonds. Tax Treatment of Original Issue Discount Bond Counsel is further of the opinion that the difference between the principal amount of the Series 2013 Bonds maturing on October 1 in the years 2029 through and including 2031 (the "Discount Bonds") and the initial offering price to the public (excluding bond houses, brokers or similar persons or organizations acting in the capacity of Underwriters or wholesalers) at which price a substantial amount of such Discount Bonds of the same maturity was sold constitutes original issue discount which is excludable from gross income for federal income tax purposes to the same extent as interest on the Series 2013 Bonds. Further, such original issue discount accrues actuarially on a constant interest rate basis over the term of each Discount Bond and the basis of each Discount Bond acquired at such initial offering price by an initial purchaser thereof will be increased by the amount of such accrued original issue discount.

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The accrual of original issue discount may be taken into account as an increase in the amount of taxexempt income for purposes of determining various other tax consequences of owning the Discount Bonds, even though there will not be a corresponding cash payment. Owners of the Discount Bonds are advised that they should consult with their own advisors with respect to the state and local tax consequences of owning such Discount Bonds. Tax Treatment of Bond Premium The difference between the principal amount of the Series 2013 Bonds maturing on October 1 in the years 2025 through and including 2028 and in the years 2032 through and including 2035 (collectively, the "Premium Bonds") and the initial offering price to the public (excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at which price a substantial amount of such Premium Bonds of the same maturity was sold constitutes to an initial purchaser amortizable bond premium which is not deductible from gross income for Federal income tax purposes. The amount of amortizable bond premium for a taxable year is determined actuarially on a constant interest rate basis over the term of each Premium Bond or, in the case of certain of the Premium Bonds that are callable prior to maturity, the amortization period and yield must be determined on the basis of the earliest call date that results in the lowest yield on such Bonds. For purposes of determining gain or loss on the sale or other disposition of a Premium Bond, an initial purchaser who acquires such obligation in the initial offering to the public at the initial offering price is required to decrease such purchaser's adjusted basis in such Premium Bond annually by the amount of amortizable bond premium for the taxable year. The amortization of bond premium may be taken into account as a reduction in the amount of tax-exempt income for purposes of determining various other tax consequences of owning such Premium Bonds. Owners of the Premium Bonds are advised that they should consult with their own advisors with respect to the state and local tax consequences of owning such Premium Bonds.

VERIFICATION OF ARITHMETICAL COMPUTATIONS At the time of the delivery of the Series 2013 Bonds, the Verification Agent will deliver a report on the mathematical accuracy of the computations contained in schedules provided to them and prepared by Public Financial Management, Inc. on behalf of the County relating to (a) the sufficiency of the anticipated cash and maturing principal amounts and interest in Obligations of the United States of America to pay, when due, the principal, whether at maturity or upon prior redemption, interest and call premium requirements, if any, of the Refunded Bonds and (b) the "yield" on the Series 2013 Bonds and on the Obligations of the United States of America considered by Bond Counsel in connection with their opinion that the Series 2013 Bonds are not "arbitrage bonds" within the meaning of Section 148 of the Code, as amended.

RATINGS Fitch Ratings ("Fitch") and Moody's Investors Service, Inc. ("Moody's") have assigned ratings of "AA" and "Aa2," respectively, to the Series 2013 Bonds. The ratings reflect only the views of said rating agencies and an explanation of the ratings may be obtained only from said rating agencies. Generally, a rating agency bases its rating on information and materials and on investigations, studies and assumptions furnished to and obtained and made by the rating agency. The rating reflects

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only the view of said rating agency and an explanation of the rating may be obtained only from said rating agency. There can be no assurance that such rating will continue for any given period of time or will not be revised downward or withdrawn entirely by such rating agency, if in its judgment circumstances so warrant. Any such downward revision or withdrawal of the ratings of the Series 2013 Bonds may have an adverse effect on the market price of the Series 2013 Bonds. The County undertakes no responsibility to oppose any such revision or withdrawal. An explanation of the significance of the ratings can be received from the following: Moody's Investors Service, 7 World Trade Center, 250 Greenwich Street, 23rd Floor, New York, New York 10007, and Fitch Ratings, One State Street Plaza, New York, New York 10004.

FINANCIAL ADVISOR Public Financial Management, Inc., Coral Gables, Florida, is the Financial Advisor to the County with respect to the sale of the Series 2013 Bonds. The Financial Advisor has assisted the County in the preparation of this Official Statement and has advised the County as to other matters relating to the planning, structuring and sale of the Series 2013 Bonds. The Financial Advisor is not obligated to undertake and has not undertaken to make an independent verification or to assume responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement. Public Financial Management, Inc. is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal or other public securities.

INVESTMENT ADVISOR PFM Asset Management LLC will receive an investment advisory fee for competitively purchasing Obligations on the County's behalf to fund a portion of the Escrow Deposit Fund.

AUDITED FINANCIAL STATEMENTS The general purpose financial statements of the County as of September 30, 2012 and for the year then ended, attached hereto as "APPENDIX C – Audited Financial Statements for the Fiscal Year Ended September 30, 2012," have been audited by Ernst and Young, independent auditors, as stated in their report appearing therein. Such statements speak only as of September 30, 2012. The consent of the County's auditor to include in this Official Statement the aforementioned report was not requested, and the general purpose financial statements of the County are provided only as publicly available documents. The auditor was not requested nor did they perform any procedures with respect to the preparation of this Official Statement or the information presented herein. The Series 2013 Bonds are payable solely from Non-Ad Valorem Revenues in the manner and to the extent as described in the Resolution and herein and are not otherwise secured by, or payable from, the general revenues of the County. See "SECURITY FOR THE SERIES 2013 BONDS" herein. The general purpose financial statements are presented for general information purposes only.

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ENFORCEABILITY OF REMEDIES The remedies available to the owners of the Series 2013 Bonds upon an event of default under the Resolution are in many respects dependent upon judicial actions which are often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, including specifically the federal bankruptcy code, the remedies specified by the Resolution and the Series 2013 Bonds may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Series 2013 Bonds, including Bond Counsel's approving opinion, will be qualified, as to the enforceability of the remedies provided in the various legal instruments, by limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors enacted before of after such delivery. See "APPENDIX B – Form of the Resolution" attached hereto for a description of events of default and remedies.

CONTINUING DISCLOSURE The County has covenanted for the benefit of the Series 2013 Bondholders to provide certain financial information and operating data relating to the County and the Series 2013 Bonds in each year, and to provide notices of the occurrence of certain enumerated material events. The County has agreed to file annual financial information and operating data and the audited financial statements with each entity authorized and approved by the Securities and Exchange Commission (the "SEC") to act as a repository (each a "Repository") for purposes of complying with Rule 15c2-12 adopted by the SEC under the Securities Exchange Act of 1934 (the "Rule"). Effective July 1, 2009, the sole Repository is the Municipal Securities Rulemaking Board. The County has agreed to file notices of certain enumerated material events, when and if they occur, with the Repository. The specific nature of the financial information, operating data, and of the type of events which trigger a disclosure obligation, and other details of the undertaking are described in "APPENDIX E Form of Continuing Disclosure Certificate" attached hereto. The Continuing Disclosure Certificate shall be executed by the County prior to the issuance of the Series 2013 Bonds. These covenants have been made in order to assist the Underwriter in complying with the continuing disclosure requirements of the Rule. With respect to the Series 2013 Bonds, no party other than the County is obligated to provide, nor is expected to provide, any continuing disclosure information with respect to the Rule. The County inadvertently failed to comply with the requirement to timely file certain audited financial statements and financial information for the fiscal year ended September 30, 2010 and 2011 only with respect to the CUSIP numbers applicable to the County's Special Obligation Refunding Revenue Bonds, Series 2010B and Special Obligation Refunding Revenue Bonds, Series 2011. Upon realizing the failure to comply, the County reported such circumstances in accordance with the requirements of the Rule, and cured such filings on March 1, 2013. The County fully anticipates satisfying all future disclosure obligations required pursuant to the Rule.

UNDERWRITING The Series 2013 Bonds are being purchased by Citigroup Global Markets Inc. (the "Underwriter") at an aggregate purchase price of $74,041,891.10 (which includes a net original issue premium of

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$2,082,016.10 and an Underwriter's discount of $1,845,125.00). The Underwriter's obligations are subject to certain conditions precedent, and it will be obligated to purchase all of the Series 2013 Bonds if any Series 2013 Bonds are purchased. The Series 2013 Bonds may be offered and sold to certain dealers (including dealers depositing such Series 2013 Bonds into investment trusts) at prices lower than such public offering prices, and such public offering prices may be changed, from time to time, by the Underwriter. Citigroup, Inc., parent company of Citigroup Global Markets Inc., the underwriter of the Series 2013 Bonds, has entered into a retail brokerage joint venture with Morgan Stanley. As part of this joint venture, Citigroup Global Markets Inc. distributes municipal securities to retail investors through the financial advisor network of Morgan Stanley Smith Barney LLC. As part of this arrangement, Citigroup Global Markets Inc. may compensate Morgan Stanley Barney LLC for its selling efforts with respect to the Series 2013 Bonds.

CONTINGENT FEES The County has retained Bond Counsel, Disclosure Counsel and the Financial Advisor with respect to the authorization, sale, execution and delivery of the Series 2013 Bonds. Payment of the fees of such professionals and an underwriting discount to the Underwriter are each contingent upon the issuance of the Series 2013 Bonds.

ACCURACY AND COMPLETENESS OF OFFICIAL STATEMENT The references, excerpts, and summaries of all documents, statutes, and information concerning the County and certain reports and statistical data referred to herein do not purport to be complete, comprehensive and definitive and each such summary and reference is qualified in its entirety by reference to each such document for full and complete statements of all matters of fact relating to the Series 2013 Bonds, the security for the payment of the Series 2013 Bonds and the rights and obligations of the owners thereof and to each such statute, report or instrument. Copies of such documents may be obtained from either the office of the Clerk of the Board of County Commissioners, Collier County Government Complex, 3299 Tamiami Trail East, Suite 403, Naples, Florida 34112-5746, telephone: (239) 252-7813 or the County's Financial Advisor, Public Financial Management, Inc., 2121 Ponce De Leon Boulevard, Suite 510, Coral Gables, Florida 33134, telephone (305) 448-6992. The information contained in this Official Statement has been compiled from official and other sources deemed to be reliable, and is believed to be correct as of the date of the Official Statement, but is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation by, the Underwriter. The Underwriter listed on the cover page hereof has reviewed the information in this Official Statement in accordance with and as part of its responsibility to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. The information and expressions of opinion stated herein are subject to change, and neither the delivery of this Official Statement nor any sale made hereunder shall create, under any circumstances, any implication that there has been no change in the matters described herein since the date hereof.

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Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. Neither this Official Statement nor any statement that may have been made verbally or in writing is to be construed as a contract with the owners of the Series 2013 Bonds. The appendices attached hereto are integral parts of this Official Statement and must be read in their entirety together with all foregoing statements.

AUTHORIZATION OF OFFICIAL STATEMENT The execution and delivery of this Official Statement has been duly authorized and approved by the County. At the time of delivery of the Series 2013 Bonds, officials of the County will furnish a certificate to the effect that nothing has come to their attention which would lead them to believe that the Official Statement (other than information herein related to DTC, the book-entry only system of registration and the information contained under the caption "TAX EXEMPTION" as to which no opinion shall be expressed), as of its date and as of the date of delivery of the Series 2013 Bonds, contains an untrue statement of a material fact or omits to state a material fact which should be included therein for the purposes for which the Official Statement is intended to be used, or which is necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading. COLLIER COUNTY, FLORIDA

By:

Approved as to form and legal sufficiency:

/s/ Jeffrey A. Klatzkow County Attorney

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/s/ Georgia A. Hiller, Esq. Chairwoman, Board of County Commissioners Collier County, Florida

APPENDIX A GENERAL INFORMATION CONCERNING COLLIER COUNTY, FLORIDA The following information concerning Collier County, Florida (the "County") has been supplied by the County and is included only for purposes of supplying general information regarding the County. The Series 2013 Bonds are secured by a covenant to budget and appropriate legally available non-ad valorem revenues as described in the Official Statement. General Information The County was established in 1923 by the Legislature of the State of Florida (the "State") from portions of Lee and Monroe Counties. Its territorial limits, as they presently exist, contain approximately 2,026 square miles. In terms of land area, it is the largest county in the State. The County is located on the southwest coast of the Florida peninsula directly west of the Miami-Fort Lauderdale area. In 2012, the County had an estimated population of 323,785. Principal industries within the County include wholesale and retail trade, tourism, medical services, agriculture, forestry, fishing, cattle ranching and construction. Board of County Commissioners The Board of County Commissioners (the "Board") is the principal legislative and governing body of the County. The Board consists of five County Commissioners; one from each of the five districts elected for terms of four years. All of the County Commissioners are residents of the County. The current members of the Board and their expiration of terms of office are: Commissioner Georgia A. Hiller, Esq. Tom Henning Fred W. Coyle Donna Fiala Tim Nance

Office

Term Expires

Chairwoman Vice Chair Commissioner Commissioner Commissioner

November, 2014 November, 2016 November, 2014 November, 2016 November, 2016

County Manager The chief administrative official of the County is the County Manager. This official is directly responsible to the Board for administration and operation of four administrative divisions under the Board and for execution of all Board policies. The County Manager directs the administrative divisions for Growth Management, Public Services, Public Utilities, and Administrative Services. The County Manager is also responsible to the Board for the preparation of budgets and for the control of expenditures of departments under his supervision throughout the budget year. Budget Process The County Manager's Director of Corporate Finance (the "Director") initiates the budget planning process in January with budget policy discussions among key members of the fiscal and

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administrative leadership team. These discussions culminate in the presentation and adoption of budget policy and guidance by the Board in February. County division heads and elected officers submit their proposed expenditures beginning in April for compilation by the Director no later than July 1 of each year and each submission is matched against available revenues. A balanced, proposed budget is presented to the Board for review within 15 days of receipt of an assessed value certification from the County's Property Appraiser which is due by July 1. A tentative budget is thereupon adopted within 15 days. Subsequent to public hearings, a final budget is adopted. The final budget for the fiscal year ended September 30, 2013 was adopted by the Board on September 20, 2012. Final millage rates are adopted, usually by late September, and the County's Tax Collector prepares tax bills for mailing on or after November 1. Upon valid adoption, all expenditures in the budget constitute appropriations, and amendments to the budget can be made only in accordance with the provisions of Chapter 129, Florida Statutes, and such chapter provides that expenditures in excess of total fund budgets are unlawful. Annual Audit Florida law requires that an annual post audit of each county's accounts and records be completed within six months of the end of each fiscal year by a firm of independent certified public accountants retained and paid for by the County. The County retained the firm of Ernst & Young LLP to undertake the audit of its financial statements for the fiscal year ended September 30, 2012, which are included as "APPENDIX C – Audited Financial Statements for the Fiscal Year Ended September 30, 2012" attached to this Official Statement.

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Population The County has experienced rapid population growth in recent decades. The following table presents historical and projected population growth for the County, the State, and the United States for the period of 1960 to 2020: POPULATION TRENDS

County Population 1960 1970 1980 1990 2000 2010 2020*

15,753 38,040 85,971 152,099 251,377 321,520 384,400

Population Percentage Increase --141.5% 126.0 76.9 65.3 27.9 19.6

State Population

Population Percentage Increase

United States Population

Population Percentage Increase

4,951,560 6,791,418 9,746,961 12,938,071 15,982,378 18,801,310 21,326,800

--37.1% 43.5 32.7 23.5 17.6 13.4

179,323,175 203,302,031 226,504,825 250,410,000 274,634,000 308,745,538 322,742,000

--13.4% 11.4 10.6 9.7 12.4 4.5

*Estimates on County and State population use medium estimates of population growth. Source: University of Florida, Bureau of Economic and Business Research, Population Program, unpublished data. Census data from U.S. Bureau of Census.

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Most of the growth of Collier County is due to migration. As of April 1, 2011, the estimated median age of the County's population was 47.1 years according to the University of Florida, Bureau of Economic and Business Research. COLLIER COUNTY EMPLOYMENT BY MAJOR INDUSTRY Industry

Establishments

Employees

Retail Trade Accommodation and Food Services Health Care and Social Assistance Construction Arts, Entertainment, and Recreation Administration, Support, Waste Management, Remediation Public Administration Other Services (except Public Administration) Agriculture, Forestry, Fishing and Hunting Professional, Scientific and Technical Service Finance and Insurance Real Estate and Rental and Leasing Wholesale Trade Manufacturing Transportation and Warehousing Information Management of Companies and Enterprises Utilities Unclassified Establishments

1,577 787 932 1,527 267 1,043 72 1,203 108 1,533 585 946 421 263 220 125 89 18 16

18,042 16,697 16,454 9,080 7,666 7,267 5,250 5,127 5,055 4,610 3,491 3,033 2,978 2,587 1,682 1,380 812 186 7

Source: Florida Research and Economic Information Database Application, Labor Market Statistics, Quarterly Census of Employment and Wages Program, 2nd Quarter 2012.

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COLLIER COUNTY EMPLOYMENT (2003-2012)

Year

Labor Force

Employment

Unemployment

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

131,993 138,036 145,347 152,162 153,243 151,806 143,773 144,557 148,485 150,924

125,822 132,610 140,324 147,356 146,720 141,553 128,270 127,264 133,216 138,221

6,171 5,426 5,023 4,806 6,523 10,253 15,503 17,293 15,269 12,703

County Unemployment Rate

State of Florida Unemployment Rate

4.7% 3.9 3.5 3.2 4.3 6.8 10.8 12.0 10.3 8.4

5.3% 4.7 3.8 3.4 4.1 6.2 10.2 11.5 10.5 8.7

Source: Florida Research and Economic Information Database Application, Labor Market Statistics, Local Area Unemployment Statistics Program. BUILDING PERMIT ACTIVITIES IN COLLIER COUNTY (2002-2011)

Year

Single Family Units

MultiFamily Units

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

4,173 3,376 4,202 4,052 2,829 1,069 652 630 766 920

3,109 2,444 2,719 2,570 1,959 1,026 299 314 493 400

Residential Valuation(1) $1,113,547 977,445 1,487,546 1,655,669 1,228,774 649,718 387,286 312,942 371,116 374,016

Valuation in thousands of dollars. Source: University of Florida, Bureau of Economic and Business Research, Building Permit Activity in Florida. (1)

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Agriculture Agriculture is a dominant factor in the economy of the County. Rainfall averages about 48 inches annually with most of the precipitation occurring during the late spring and summer. The high yearly rainfall and year-round mild temperature enable agriculture to be a productive sector of the County economy. The agricultural industry represents five percent of the workforce. Farming activities are located approximately 40 miles inland primarily centered around the community of Immokalee. Major crops include tomatoes, peppers, cucumbers, melons and citrus. Beef cattle are also a significant farming commodity. Tourism Tourism is a major factor in the economy of the County. Visitors to the County enjoy its Gulf of Mexico beaches, golf, tennis and other attractions. Everglades National Park, the United States only subtropical National Park, located near Naples, comprises a substantial portion of the County. CollierSeminole Park and Corkscrew Swamp are also located nearby. Salt water fishing in the Gulf of Mexico, as well as fresh water fishing, makes the many lakes and waterways popular vacation spots. The County is regarded as one of the largest shelling areas in the United States. Transportation The County is served by U.S. Highway 41 (otherwise known as the Tamiami Trail) and Interstate 75, which links Naples to the east coast of Florida and intersects U.S. Highway 27, providing access to the Florida Turnpike. Interstate 75 also provides access to the County from the North. Greyhound Bus Lines connects the County to all points within the State. Air service is available at the Naples Airport owned by the City of Naples and covers an area of approximately 650 acres. The airport has two lighted 5,000 feet hard surfaced runways, each 150 feet wide. Activity at this airport mainly consists of charter flights and general aviation. Air service at the Southwest Florida International Airport near Fort Myers, 35 miles north of Naples, reaches many major cities. In addition, the County owns and operates three public airports: the Marco Island Executive Airport and the Immokalee and Everglades City Airparks. Educational System The County school system serves approximately 44,342 students in 48 schools, including three charter schools. The public schools provide a varied adult education program and a special program for pre-school children. There are several private and parochial schools in the County offering classes from kindergarten through the twelfth grade. Edison State College's main campus in Fort Myers, with a branch campus in Naples, offers technical training as well as college preparation for students. In August of 2003, Ave Maria University, a private Catholic University located within the County, began admitting students. The University offers bachelor's degrees in biology, classics, economics, history, literature, mathematics, music, philosophy, politics and theology. Pre-professional programs are offered in pre-law, pre-medicine and pre-business. Although not located within the County, Florida Gulf Coast University, the tenth college in the State University System, is operating in Lee County, immediately north of the County.

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Medical Facilities Naples Community Hospital, a non-profit, private corporation provides health services to the residents of the County. It opened as a 50-bed facility in 1956, financed exclusively by contributions from members of the community. Since 1956, Naples Community Hospital has grown to encompass approximately 422,000 square feet and include two six-story towers that house Naples Community Hospital's 420 licensed beds and patient care ancillary services and a two-story support services wing located between the two towers. Hospital services are also provided in the Carpenter-Briggs Radiation Therapy Center located across the street from Naples Community Hospital, at the Golden Gate Urgent Care Center located in leased space approximately seven miles from Naples Community Hospital, and in several other outpatient facilities that provide urgent care, rehabilitation, wellness and infusion services. In addition, Physician's Regional operates two hospitals within the County with a total of 201 beds. The Collier County Health Department operates in every community in the County under the direction of a licensed physician and with a staff of trained specialists, including public health workers, nurses, sanitarians and clinical psychologists. COLLIER COUNTY FINANCIAL AND ECONOMIC DATA (Fiscal Years 2003-2012) (Unaudited)

Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Population

Percent Increase

Per Capita Income

284,918 292,466 306,186 326,658 333,858 332,854 333,032 331,800 321,520 323,785

-2.7 4.7 6.7 2.2 (0.3) 0.1 (0.4) (3.1) 0.7

41,269 42,050 41,513 42,846 49,492 57,446 63,276 62,559 60,049 59,264

Bank Deposits (000's) 6,789 8,133 9,473 10,665 10,957 11,026 11,690 9,981 N/A N/A

N/A = Data not currently available Source: Collier County Comprehensive Annual Financial Report for Fiscal Year Ending September 30, 2012.

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Assessed Valuation The following table shows the assessed value and taxable value for operating millage in each of the past ten Fiscal Years. ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY IN COLLIER COUNTY(1) (Fiscal Years 2003-2012) (Unaudited) (Amounts Expressed in Thousands) Fiscal Year Ended September 30 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Residential Property $42,635,220 49,712,793 55,370,248 66,375,040 82,909,061 88,819,491 86,949,935 77,359,174 67,947,039 64,464,592

Personal Property

Centrally Assessed Property

Less: Tax Exempt

Total Taxable Assessed Value

$1,770,370 1,802,265 1,820,777 1,956,646 2,156,726 2,321,048 2,430,996 2,444,323 2,259,654 2,248,702

$113 117 127 143 202 226 202 202 171 187

$4,915,279 5,529,447 5,928,339 6,890,007 8,023,791 8,575,874 10,718,166 9,826,950 8,770,667 8,510,911

$39,490,424 45,985,728 51,262,813 61,441,822 77,042,198 82,564,891 78,662,967 69,976,749 61,436,197 58,202,570

Total Direct Tax Rate 12.8418 12.6800 12.3711 12.2586 11.5139 10.7366 10.3120 10.9869 11.4440 11.1621

Estimated Actual Taxable Value $44,405,703 51,515,175 57,191,152 68,331,829 85,065,989 91,140,765 89,381,133 79,803,699 70,206,864 66,713,481

Assessed Value as a Percentage of Actual Value(2) 100% 100 100 100 100 100 100 100 100 100

Property is assessed as of January 1, and taxes based on these assessments are levied and become due on the following November 1. Therefore, assessments and levies applicable to a certain year are collected in the fiscal year ending during the next succeeding calendar year. (2) The basis of assessed value required by the state is 100% of actual value. Source: Collier County Comprehensive Annual Financial Report for Fiscal Year Ending September 30, 2012. (1)

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The following table contains the property tax rates for the last ten fiscal years. COLLIER COUNTY, FLORIDA PROPERTY TAX RATES – ALL DIRECT AND OVERLAPPING GOVERNMENTS(1) (Fiscal Years 2003-2012) (Unaudited)

Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

General Fund 3.8772 3.8772 3.8772 3.8772 3.5790 3.1469 3.1469 3.5645 3.5645 3.5645

Collier County Special Debt Revenue Service Funds Funds 0.6767 0.0215 0.9226 0.0000 0.9177 0.0000 0.9161 0.1500 0.8470 0.2226 0.7362 0.2233 0.7528 0.2249 0.7225 0.1366 0.6926 0.1580 0.7627 0.0877

Other

Total 4.5754 4.7998 4.7949 4.9433 4.6486 4.1064 4.1246 4.4236 4.4151 4.4149

County School District 6.9110 6.5240 6.2200 5.9730 5.5250 5.3510 4.9090 5.2390 5.6990 5.5270

Independent Districts 1.3554 1.3562 1.3562 1.3423 1.3403 1.2792 1.2784 1.3243 1.3299 1.2202

Total 12.8418 12.6800 12.3711 12.2586 11.5139 10.7366 10.3120 10.9869 11.4440 11.1621

Basis for property tax rates is 1 mill per $1,000 of assessed value. Property is assessed as of January 1 and taxes based on those assessments are levied according to the tax rate in effect that tax year and become due on November 1. Therefore, assessments and tax levies applicable to a certain tax year are collected in the fiscal year ending during the following calendar year. Source: Collier County Comprehensive Annual Financial Report for Fiscal Year ending September 30, 2012. (1)

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APPENDIX B FORM OF THE RESOLUTION

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TABLE OF CONTENTS PAGE ARTICLE I GENERAL SECTION 1.01. SECTION 1.02. SECTION 1.03. SECTION 1.04. SECTION 1.05.

COLLIER COUNTY, FLORIDA

B-1 SPECIAL OBLIGATION REFUNDING REVENUE BONDS, SERIES 2013 BOND RESOLUTION

DEFINITIONS. .................................................................................. 1 AUTHORITY FOR RESOLUTION.................................................. 7 RESOLUTION TO CONSTITUTE CONTRACT. ........................... 8 FINDINGS. ........................................................................................ 8 AUTHORIZATION OF REFUNDING OF REFUNDED BONDS. ........................................................................................ 9

ARTICLE II AUTHORIZATION, TERMS, SALE, EXECUTION AND REGISTRATION OF BONDS SECTION 2.01. SECTION 2.02. SECTION 2.03. SECTION 2.04. SECTION 2.05. SECTION 2.06. SECTION 2.07. SECTION 2.08. SECTION 2.09.

AUTHORIZATION AND DESCRIPTION OF BONDS ............... 10 APPLICATION OF BOND PROCEEDS ........................................ 11 EXECUTION OF BONDS .............................................................. 11 AUTHENTICATION....................................................................... 12 TEMPORARY BONDS................................................................... 12 BONDS MUTILATED, DESTROYED, STOLEN OR LOST ....... 12 INTERCHANGEABILITY, NEGOTIABILITY AND TRANSFER ................................................................................ 13 FULL BOOK ENTRY FOR BONDS .............................................. 14 FORM OF BONDS .......................................................................... 16 ARTICLE III REDEMPTION OF BONDS

ADOPTED MARCH 12, 2013

SECTION 3.01. SECTION 3.02. SECTION 3.03. SECTION 3.04. SECTION 3.05.

PRIVILEGE OF REDEMPTION .................................................... 24 SELECTION OF BONDS TO BE REDEEMED ............................ 24 NOTICE OF REDEMPTION .......................................................... 24 REDEMPTION OF PORTIONS OF BONDS................................. 26 PAYMENT OF REDEEMED BONDS ........................................... 26 ARTICLE IV SECURITY; FUNDS; COVENANTS OF THE ISSUER

SECTION 4.01. SECTION 4.02. SECTION 4.03. SECTION 4.04.

BONDS NOT TO BE INDEBTEDNESS OF ISSUER ................... 27 COVENANT TO BUDGET AND APPROPRIATE; PAYMENT OF BONDS ............................................................ 27 REBATE FUND .............................................................................. 28 ANTI-DILUTION ............................................................................ 28

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ARTICLE V COVENANTS SECTION 5.01. SECTION 5.02. SECTION 5.03. SECTION 5.04.

GENERAL ....................................................................................... 30 ANNUAL BUDGET ........................................................................ 30 ANNUAL AUDIT............................................................................ 30 FEDERAL INCOME TAXATION COVENANTS ........................ 30

SECTION 10.05. EXHIBIT A EXHIBIT B EXHIBIT C EXHIBIT D

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EFFECTIVE DATE ......................................................................... 43 FORM OF OFFICIAL NOTICE OF SALE FORM OF CONTINUING DISCLOSURE CERTIFICATE FORM OF PRELIMINARY OFFICIAL STATEMENT FORM OF ESCROW DEPOSIT AGREEMENT

ARTICLE VI DEFAULTS AND REMEDIES SECTION 6.01. SECTION 6.02. SECTION 6.03. SECTION 6.04. SECTION 6.05. SECTION 6.06.

EVENTS OF DEFAULT ................................................................. 32 REMEDIES ...................................................................................... 32 DIRECTIONS TO TRUSTEE AS TO REMEDIAL PROCEEDINGS ......................................................................... 33 REMEDIES CUMULATIVE .......................................................... 33 WAIVER OF DEFAULT................................................................. 33 APPLICATION OF MONEYS AFTER DEFAULT ....................... 33 ARTICLE VII SUPPLEMENTAL RESOLUTIONS

SECTION 7.01.

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SECTION 7.02.

SUPPLEMENTAL RESOLUTION WITHOUT BONDHOLDERS' CONSENT .................................................. 35 SUPPLEMENTAL RESOLUTION WITH BONDHOLDERS'CONSENT. .................................................. 35 ARTICLE VIII DEFEASANCE

SECTION 8.01.

DEFEASANCE ................................................................................ 38 ARTICLE IX PROVISIONS RELATING TO BONDS

SECTION 9.01. SECTION 9.02. SECTION 9.03. SECTION 9.04. SECTION 9.05.

OFFICIAL NOTICE OF SALE ....................................................... 40 PRELIMINARY OFFICIAL STATEMENT; OFFICIAL STATEMENT............................................................................. 40 APPOINTMENT OF PAYING AGENT AND REGISTRAR ........ 40 SECONDARY MARKET DISCLOSURE ...................................... 41 AUTHORIZATION TO EXECUTE ESCROW AGREEMENT .... 41 ARTICLE X MISCELLANEOUS

SECTION 10.01. SECTION 10.02. SECTION 10.03. SECTION 10.04.

SALE OF BONDS ........................................................................... 42 SEVERABILITY OF INVALID PROVISIONS ............................. 42 VALIDATION AUTHORIZED ...................................................... 42 REPEAL OF INCONSISTENT RESOLUTIONS........................... 42

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RESOLUTION 2013-70

"Act" shall mean Chapter 125, Florida Statutes, and other applicable provisions of law.

A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS OF COLLIER COUNTY, FLORIDA AUTHORIZING THE ISSUANCE OF NOT EXCEEDING $78,000,000 IN AGGREGATE PRINCIPAL AMOUNT OF COLLIER COUNTY, FLORIDA SPECIAL OBLIGATION REFUNDING REVENUE BONDS, SERIES 2013, TO REFUND ALL OF THE COUNTY'S OUTSTANDING CAPITAL IMPROVEMENT AND REFUNDING REVENUE BONDS, SERIES 2003 AND CAPITAL IMPROVEMENT AND REFUNDING REVENUE BONDS, SERIES 2005; COVENANTING TO BUDGET AND APPROPRIATE CERTAIN LEGALLY AVAILABLE NON-AD VALOREM REVENUES TO PAY DEBT SERVICE ON THE BONDS; PROVIDING FOR THE RIGHTS OF THE HOLDERS OF THE BONDS; MAKING CERTAIN OTHER COVENANTS AND AGREEMENTS IN CONNECTION WITH THE BONDS; AUTHORIZING THE AWARDING OF SAID BONDS PURSUANT TO A PUBLIC BID; DELEGATING CERTAIN AUTHORITY TO THE CHAIR FOR THE AWARD OF THE BONDS, AND THE APPROVAL OF THE TERMS AND DETAILS OF SAID BONDS; AUTHORIZING THE PUBLICATION OF A NOTICE OF SALE FOR THE BONDS OR A SUMMARY THEREOF; APPOINTING THE PAYING AGENT AND REGISTRAR FOR SAID BONDS; AUTHORIZING THE DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT AND THE EXECUTION AND DELIVERY OF AN OFFICIAL STATEMENT WITH RESPECT TO SUCH BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF AN ESCROW DEPOSIT AGREEMENT AND THE APPOINTMENT OF AN ESCROW AGENT THERETO; AUTHORIZING THE EXECUTION AND DELIVERY OF A CONTINUING DISCLOSURE CERTIFICATE; AND PROVIDING FOR AN EFFECTIVE DATE FOR THIS RESOLUTION.

"Amortization Installments" shall mean an amount determined as such pursuant to the provisions of this Resolution and the Official Notice of Sale and established with respect to Term Bonds.

BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF COLLIER COUNTY, FLORIDA:

"Capital Projects Funds" shall mean the "Capital Projects Funds" of the Issuer as described and identified in the Annual Audit.

ARTICLE I GENERAL

"Chair" shall mean the Chairwoman or Chairman of the Board or, in her or his absence or unavailability, the Vice Chairman or Vice Chairwoman of the Board.

SECTION 1.01. DEFINITIONS. When used in this Resolution, the following terms shall have the following meanings, unless the context clearly otherwise requires:

"Clerk" shall mean the Clerk of the Circuit Court of Collier County, Florida and Ex-Officio Clerk of the Board of County Commissioners of the Collier County, Florida

"Annual Audit" shall mean the annual audit prepared pursuant to the requirements of Section 5.03 hereof. "Annual Budget" shall mean the annual budget prepared pursuant to the requirements of Section 5.02 hereof. "Annual Debt Service" shall mean the aggregate amount of Debt Service on the Bonds for each applicable Fiscal Year. "Authorized Issuer Officer" shall mean the Chair, the County Manager and the Clerk and when used in reference to any act or document, also means any other person authorized by resolution of the Issuer to perform such act or sign such document. "Board" shall mean the Board of County Commissioners of Collier County, Florida. "Bond Counsel" shall mean Nabors, Giblin & Nickerson, P.A. or any other attorney at law or firm of attorneys, of nationally recognized standing in matters pertaining to the federal tax exemption of interest on obligations issued by states and political subdivisions, and duly admitted to practice law before the highest court of any state of the United States of America. "Bondholder" or "Holder" or "holder" or any similar term, when used with reference to a Bond or Bonds, shall mean any person who shall be the registered owner of any Outstanding Bond or Bonds as provided in the registration books of the Issuer. "Bonds" shall mean the Collier County, Florida Special Obligation Refunding Revenue Bonds, Series 2013.

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and such other person as may be duly authorized to act on her or his behalf, including any Deputy Clerk. "Code" shall mean the Internal Revenue Code of 1986, as amended, and the regulations and rules thereunder in effect or proposed. "Counterparty" shall mean the entity entering into a Hedge Agreement with the Issuer. Counterparty would also include any guarantor of such entity's obligations under such Hedge Agreement. "County Manager" shall mean the County Manager of the Issuer or, in his or her absence or unavailability, any Assistant County Manager or a designee of the County Manager.

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"Debt" means at any date (without duplication) all of the following to the extent that they are secured by or payable in whole or in part from any Non-Ad Valorem Revenues (A) all obligations of the Issuer for borrowed money or evidenced by bonds, debentures, notes or other similar instruments; (B) all obligations of the Issuer to pay the deferred purchase price of property or services, except trade accounts payable under normal trade terms and which arise in the ordinary course of business; (C) all obligations of the Issuer as lessee under capitalized leases; and (D) all indebtedness of other Persons to the extent guaranteed by, or secured by, Non-Ad Valorem Revenues of the Issuer; provided, however, if with respect to any obligation contemplated in (A), (B), or (C) above, the Issuer has covenanted to budget and appropriate sufficient Non-Ad Valorem Revenues to satisfy such obligation but has not secured such obligation with a lien on or pledge of any Non-Ad Valorem Revenues then, and with respect to any obligation contemplated in (D) above, such obligation shall not be considered "Debt" for purposes of this Resolution unless the Issuer has actually used Non-Ad Valorem Revenues to satisfy such obligation during the immediately preceding Fiscal Year or reasonably expects to use Non-Ad Valorem Revenues to satisfy such obligation in the current or immediately succeeding Fiscal Year. After an obligation is considered "Debt" as a result of the proviso set forth in the immediately preceding sentence, it shall continue to be considered "Debt" until the Issuer has not used any Non-Ad Valorem Revenues to satisfy such obligation for two consecutive Fiscal Years. "Debt Service" shall mean, at any time, the aggregate amount in the then applicable period of time of (1) interest required to be paid on the Outstanding Bonds during such period of time, except to the extent that such interest is to be paid from Bond proceeds for such purpose, (2) principal of Outstanding Serial Bonds maturing in such period of time, and (3) the Amortization Installments with respect to Outstanding Term Bonds coming due in such period of time. For purposes of this definition, (A) if the Bonds have 25% or more of the aggregate principal amount coming due in any one year, Debt Service shall be determined on the Bonds during such period of time as if the principal of, Amortization Installments on and interest on such Bonds were being paid 3

from the date of incurrence thereof in substantially equal annual amounts over a period of 25 years, and (B) with respect to debt service on any Bonds which are subject to a Qualified Hedge Agreement, interest on such Bonds during the term of such Qualified Hedge Agreement shall be deemed to be the Hedge Payments coming due during such period of time. "Escrow Agent" shall mean Regions Bank, Orlando, Florida, its successors and assigns. "Escrow Agreement" shall mean the Escrow Deposit Agreement to be executed between the Issuer and the Escrow Agent in connection with the refunding of the Refunded Bonds, the form of which is attached hereto as Exhibit D. "Federal Securities" shall mean non-callable direct obligations of the United States of America (including obligations issued or held in book-entry form on the books of the Department of Treasury) or non-callable obligations the principal of and interest on which are unconditionally guaranteed by the United States of America. "Financial Advisor" shall mean Public Financial Management, Inc., Coral Gables, Florida. "Fiscal Year" shall mean the period commencing on October 1 of each year and continuing through the next succeeding September 30, or such other period as may be prescribed by law. "Fitch" shall mean Fitch Ratings, and any assigns and successors thereto. "General Fund" shall mean the "General Fund" of the Issuer as described and identified in the Annual Audit. "General Fund Revenues" shall mean total revenues of the Issuer derived from any source whatsoever and that are allocated to and accounted for in the General Fund as shown in the Annual Audit. "Hedge Agreement" shall mean an agreement in writing between the Issuer and the Counterparty pursuant to which (1) the Issuer agrees to pay to the Counterparty an amount, either at one time or periodically, which may, but is not required to, be determined by reference to the amount of interest (which may be at a fixed or variable rate) payable on debt (or a notional amount) specified in such agreement during the period specified in such agreement and (2) the Counterparty agrees to pay to the Issuer an amount, either at one time or periodically, which may, but is not required to, be determined by reference to the amount of interest (which may be at a fixed or variable rate) payable on debt (or a notional amount) specified in such agreement during the period specified in such agreement.

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"Hedge Payments" shall mean any amounts payable by the Issuer on the debt or the related notional amount under a Qualified Hedge Agreement; excluding, however, any payments due as a penalty or by virtue of termination of a Qualified Hedge Agreement or any obligation of the Issuer to provide collateral. "Impact Fee Proceeds" shall mean the proceeds of all impact fees levied by the Issuer that are allocated to and accounted for in the Capital Projects Funds as shown in the Annual Audit. "Interest Date" or "interest payment date" shall be April 1 and October 1 of each year. "Issuer" or "County" shall mean Collier County, Florida. "Maximum Annual Debt Service" shall mean the largest aggregate amount of the Annual Debt Service coming due in any Fiscal Year in which Bonds are Outstanding. "Moody's" shall mean Moody's Investors Service, and any assigns and successors thereto.

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"MSTD Revenues" shall mean all revenues of the Issuer derived from any source whatsoever and that are allocated to and accounted for in the Unincorporated Area Municipal Services Taxing District Fund as shown in the Annual Audit. "Non-Ad Valorem Revenues" shall mean all General Fund Revenues and MSTD Revenues, other than revenues generated from ad valorem taxation on real or personal property, and all Impact Fee Proceeds, but only to the extent they are legally available to make the payments required herein. "Official Notice of Sale" shall meant the Official Notice of Sale as described in Section 9.01 hereof, the form of which is attached hereto as Exhibit A. "Outstanding," when used with reference to Bonds and as of any particular date, shall describe all Bonds theretofore and thereupon being authenticated and delivered except, (1) any Bond in lieu of which other Bond or Bonds have been issued under Section 2.06 hereof to replace lost, mutilated or destroyed Bonds, (2) any Bond surrendered by the Holder thereof in exchange for other Bond or Bonds under Sections 2.05 and 2.07 hereof, (3) Bonds deemed to have been paid pursuant to Section 8.01 hereof and (4) Bonds cancelled after purchase in the open market or because of payment at, or redemption prior to, maturity. "Paying Agent" shall mean the paying agent appointed by the Issuer for the Bonds and its successor or assigns, if any. The Paying Agent initially shall be Regions Bank, Orlando, Florida.

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"Person" shall mean an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization, governmental entity or other legal entity. "Prerefunded Obligations" shall mean any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state (1) which are (A) not callable prior to maturity or (B) as to which irrevocable instructions have been given to the fiduciary for such bonds or other obligations by the obligor to give due notice of redemption and to call such bonds for redemption on the date or dates specified in such instructions, (2) which are fully secured as to principal, redemption premium, if any, and interest by a fund held by a fiduciary consisting only of cash or Federal Securities, secured in substantially the manner set forth in Section 8.01 hereof, which fund may be applied only to the payment of such principal of, redemption premium, if any, and interest on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as the case may be, (3) as to which the principal of and interest on the Federal Securities, which have been deposited in such fund along with any cash on deposit in such fund are sufficient, as verified by an independent certified public accountant or other expert in such matters, to pay principal of, redemption premium, if any, and interest on the bonds or other obligations on the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to in clause (1) above and are not available to satisfy any other claims, including those against the fiduciary holding the same, and (4) which are rated in the highest rating category (without regard to gradations, such as "+" or "-" or "1, 2 or 3" of such categories) of one of the Rating Agencies. "Qualified Hedge Agreement" shall mean a Hedge Agreement with respect to which the Issuer has received written notice from at least two of the Rating Agencies that the rating of the Counterparty is not less than "A." "Rating Agencies" means Fitch, Moody's and Standard & Poor's. "Rebate Fund" shall mean the Rebate Fund established pursuant to Section 4.03 hereof. "Redemption Price" shall mean, with respect to any Bond or portion thereof, the principal amount or portion thereof, plus the applicable premium, if any, payable upon redemption thereof pursuant to such Bond or this Resolution. "Refunded Bonds" shall mean all of the outstanding Series 2003 Bonds and Series 2005 Bonds. "Refunding Securities" shall mean Federal Securities and Prerefunded Obligations.

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"Registrar" shall mean the bond registrar appointed by the Issuer for the Bonds and its successor or assigns, if any. The Registrar initially shall be Regions Bank, Orlando, Florida. "Resolution" shall mean this Resolution, as the same may from time to time be amended, modified or supplemented by Supplemental Resolution. "Serial Bonds" shall mean all of the Bonds other than the Term Bonds. "Series 2003 Bonds" shall mean the outstanding Collier County, Florida Capital Improvement and Refunding Revenue Bonds, Series 2003. "Series 2005 Bonds" shall mean the outstanding Collier County, Florida Capital Improvement and Refunding Revenue Bonds, Series 2005. "Standard and Poor's" or "S&P" shall mean Standard and Poor's Ratings Services, and any assigns and successors thereto. "State" shall mean the State of Florida.

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"Supplemental Resolution" shall mean any resolution of the Issuer amending or supplementing this Resolution enacted and becoming effective in accordance with the terms of Sections 7.01 and 7.02 hereof. "Term Bonds" shall mean those Bonds which shall be designated as Term Bonds hereby. "Unincorporated Area Municipal Services Taxing District Fund" shall mean the "Unincorporated Area Municipal Services Taxing District Fund" of the "Special Revenue Funds" of the Issuer as such Funds are described and identified in the Annual Audit. The terms "herein," "hereunder," "hereby," "hereto," "hereof," and any similar terms, shall refer to this Resolution; the term "heretofore" shall mean before the date of adoption of this Resolution; and the term "hereafter" shall mean after the date of adoption of this Resolution. Words importing the masculine gender include every other gender. Words importing the singular number include the plural number, and vice versa.

provision is made herein is necessary in order to carry out and effectuate the purposes of the Issuer in accordance with the Act and to carry out and effectuate the plan and purpose of the Act, and that the powers of the Issuer herein exercised are in each case exercised in accordance with the provisions of the Act and in furtherance of the purposes of the Issuer. SECTION 1.03. RESOLUTION TO CONSTITUTE CONTRACT. In consideration of the purchase and acceptance of any or all of the Bonds by those who shall hold the same from time to time, the provisions of this Resolution shall be a part of the contract of the Issuer with the Holders of the Bonds, and shall be deemed to be and shall constitute a contract between the Issuer, the Holders from time to time of the Bonds. The pledge made in the Resolution and the provisions, covenants and agreements herein set forth to be performed by or on behalf of the Issuer shall be for the equal benefit, protection and security of the Holders of any and all of said Bonds but only in accordance with the terms hereof. All of the Bonds, regardless of the time or times of their issuance or maturity, shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof except as expressly provided in or pursuant to this Resolution. SECTION 1.04. declared that:

FINDINGS.

It is hereby ascertained, determined and

(A) The Issuer previously issued the Refunded Bonds to finance and refinance various capital improvements within the Issuer. (B) The Issuer, upon the advice of the Financial Advisor and Bond Counsel, hereby deems it to be in its best interests to refund all of the Refunded Bonds through the issuance of the Bonds in order to allow for the release of certain debt service reserve funds securing such Refunded Bonds and potentially to achieve debt service savings. (C) A portion of the proceeds derived from the sale of the Bonds, together with other legally available moneys of the Issuer, shall be deposited to a special escrow deposit trust fund to purchase Federal Securities which shall be sufficient, together with the investment earnings therefrom and a cash deposit, if any, to pay the Refunded Bonds as the same become due and payable or are redeemed prior to maturity, all as provided herein and in the Escrow Agreement. (D) Upon the advice of the Financial Advisor and in light of the current interest rate market, the Issuer deems it to be in its best interest to issue the Bonds for the purpose of refunding the Refunded Bonds, as determined pursuant to the provisions herein.

SECTION 1.02. AUTHORITY FOR RESOLUTION. This Resolution is adopted pursuant to the provisions of the Act. The Issuer has ascertained and hereby determined that adoption of this Resolution is necessary to carry out the powers, purposes and duties expressly provided in the Act, that each and every matter and thing as to which

(E) In accordance with Section 218.385, Florida Statutes, and pursuant to this Resolution, the Bonds shall be advertised for competitive bids pursuant to the Official Notice of Sale, the form of which is attached hereto as Exhibit A, or a summary thereof.

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(F) Pursuant to the Official Notice of Sale, competitive bids for the purchase of the Bonds received in accordance with the Official Notice of Sale on or prior to 10:30 a.m., Eastern standard time, on March 26, 2013, or such other date or time as is determined by the Chair in accordance with the terms and provisions hereof and of the Official Notice of Sale, shall be publicly opened and announced. (G) Due to the present volatility and uncertainty of the market for tax-exempt obligations such as the Bonds, it is desirable for the Issuer to be able to advertise and award the Bonds at the most advantageous time and date instead of restricting the sale and award to the date of a particular meeting of the Board; and, accordingly, the Issuer hereby determines to delegate the advertising and awarding of the Bonds to the Chair within the parameters described herein. (H) It is necessary and appropriate that the Issuer determine certain parameters for the terms and details of the Bonds and to delegate certain authority to the Chair for the award of the Bonds and the approval of the terms of the Bonds in accordance with the provisions hereof and of the Official Notice of Sale.

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(I) In the event Bond Counsel shall determine that the Bonds have not been awarded competitively in accordance with the provisions of Section 218.385, Florida Statutes, the Issuer shall adopt such resolutions and make such findings as shall be necessary to authorize and ratify a negotiated sale of the Bonds in accordance with said Section 218.385. (J) The Bonds shall be secured solely by a covenant of the Issuer, subject to certain conditions set forth herein, to budget and appropriate from Non-Ad Valorem Revenues amounts sufficient to pay the principal of and interest on the Bonds, when due. (K) The principal of and interest on the Bonds to be issued pursuant to this Resolution and all other payments provided for in this Resolution will be paid solely from Non-Ad Valorem Revenues in accordance with the terms hereof; and the ad valorem taxing power of the Issuer will never be necessary or authorized to pay the principal of and interest on the Bonds to be issued pursuant to this Resolution, or to make any other payments provided for in this Resolution, and the Bonds shall not constitute a lien upon any property whatsoever of or in the Issuer. SECTION 1.05. AUTHORIZATION OF REFUNDING OF REFUNDED BONDS. The refunding of the Refunded Bonds in order to achieve debt service savings and release certain debt service reserve funds that secure the Refunded Bonds is hereby authorized.

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ARTICLE II AUTHORIZATION, TERMS, SALE, EXECUTION AND REGISTRATION OF BONDS SECTION 2.01. AUTHORIZATION AND DESCRIPTION OF BONDS. (A) This Resolution creates an issue of Bonds of the Issuer to be designated as "Collier County, Florida Special Obligation Refunding Revenue Bonds, Series 2013," issued in the aggregate principal amount of not exceeding $78,000,000. The Chair is authorized to modify the series designation of such Bonds, in her discretion, prior to the issuance thereof. The Chair shall determine the aggregate principal amount of the Bonds prior to their issuance in accordance with the Official Notice of Sale provided such principal amount does not exceed $78,000,000. The Bonds are issued for the principal purposes of refunding the Refunded Bonds and paying certain costs of issuance incurred with respect to the Bonds. The Bonds shall be dated as of their date of delivery (or such other date as the Chair may determine), shall be numbered consecutively from one upward in order of maturity preceded by the letter "R", shall be issued in the form of fully registered Bonds in denominations of $5,000 and any integral multiple thereof, shall be initially in bookentry only form of registration, shall bear interest from their date of delivery (or such other date as the Chair may determine), payable semi-annually on each Interest Date, commencing on October 1, 2013 (or such other date as the Chair may determine). The Bonds shall bear interest computed on the basis of a 360-day year consisting of twelve 30-day months. The Bonds shall bear interest at such rates and yields, shall mature on October 1 of each of the years and in the principal amounts corresponding to such years, and, except as otherwise provided herein, shall have such redemption provisions, all as determined by the Chair, upon the advice of the Financial Advisor, subject to the conditions set forth in this Section 2.01. The final maturity of the Bonds shall not be later than October 1, 2035. All of the terms of the Bonds will be included in a certificate to be executed by the Chair or other Authorized Issuer Officer following the award of the Bonds (the "Award Certificate") and shall be set forth in the final Official Statement, as described herein. The principal of, or Redemption Price, if applicable, on the Bonds are payable upon presentation and surrender of the Bonds at the office of the Paying Agent. Interest payable on any Bond on any Interest Date will be paid by check or draft of the Paying Agent to the Holder in whose name such Bond shall be registered at the close of business on the date which shall be the fifteenth day (whether or not a business day) of the calendar month next preceding such Interest Date, or at the request of such Holder, by bank wire transfer for the account of such Holder. All payments of principal of, or Redemption Price, if applicable, and interest on the Bonds shall be payable in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. 10

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(B) The Chair, on behalf of the Issuer and only in accordance with the terms hereof and of the Official Notice of Sale, shall award the Bonds to the underwriter or underwriters that submit a bid proposal which complies in all respects with this Resolution and the Official Notice of Sale and offers to purchase the Bonds at the lowest true interest cost to the Issuer, as calculated by the Financial Advisor in accordance with the terms and provisions of the Official Notice of Sale; provided, however, the Bonds shall not be awarded to any bidder unless the true interest cost set forth in the winning bid (as calculated by the Financial Advisor) is equal to or less than 4.00% and the net present value savings with respect to the refunding of the Refunded Bonds is not less than 0.00%. In accordance with the provisions of the Official Notice of Sale, the Chair may, in her or his sole discretion, reject any and all bids.

be such officer of the Issuer before the Bonds so signed and sealed have been actually sold and delivered such Bonds may nevertheless be sold and delivered as herein provided and may be issued as if the person who signed or sealed such Bonds had not ceased to hold such office. Any Bond may be signed and sealed on behalf of the Issuer by such person who at the actual time of the execution of such Bond shall hold the proper office of the Issuer, although at the date of such Bond such person may not have held such office or may not have been so authorized. The Issuer may adopt and use for such purposes the facsimile signatures of any such persons who shall have held such offices at any time after the date of the adoption of this Resolution, notwithstanding that either or both shall have ceased to hold such office at the time the Bonds shall be actually sold and delivered.

(C) The Bonds may be redeemed prior to their respective maturities from any moneys legally available therefor, upon notice as provided in this Resolution, and upon the terms and provisions as shall be determined by the Chair, upon the advice of the Financial Advisor. Notwithstanding the foregoing, with respect to any optional redemption terms for the Bonds, the first call date may be no later than October 1, 2022, and the call premium, if any, for the Bonds may not exceed 2.00% of the par amount of the Bonds to be redeemed. The Chair, upon the advice of the Issuer's Financial Advisor, shall also determine which Bonds, if any, shall be subject to optional redemption. Term Bonds and the Amortization Installments thereto may be established in accordance with the terms of the Official Notice of Sale.

SECTION 2.04. AUTHENTICATION. No Bond shall be secured hereunder or entitled to the benefit hereof or shall be valid or obligatory for any purpose unless there shall be manually endorsed on such Bond a certificate of authentication by the Registrar or such other entity as may be approved by the Issuer for such purpose. Such certificate on any Bond shall be conclusive evidence that such Bond has been duly authenticated and delivered under this Resolution. The form of such certificate shall be substantially in the form provided in Section 2.09 hereof.

SECTION 2.02. APPLICATION OF BOND PROCEEDS. The proceeds derived from the sale of the Bonds, including premium, if any, shall be applied by the Issuer as follows: (A) A sufficient amount of Bond proceeds, together with other legally available moneys of the Issuer, shall be deposited irrevocably in trust in an escrow deposit trust fund or funds established under the terms and provisions of the Escrow Agreement and, other than a cash deposit, shall be invested in Federal Securities in the manner set forth in the Escrow Agreement, which investments shall mature at such times and in such amounts as shall be sufficient, together with such cash deposit, to pay the principal of, premium, if applicable, and interest on the Refunded Bonds as the same mature or are redeemed on their respective redemption dates. (B) The balance of the Bond proceeds shall be used to pay costs and expenses relating to the issuance of the Bonds. SECTION 2.03. EXECUTION OF BONDS. The Bonds shall be executed in the name of the Issuer with the manual or facsimile signature of the Chair and the official seal of the Issuer shall be imprinted thereon, attested with the manual or facsimile signature of the Clerk. In case any one or more of the officers who shall have signed or sealed any of the Bonds or whose facsimile signature shall appear thereon shall cease to 11

SECTION 2.05. TEMPORARY BONDS. Until definitive Bonds are prepared, the Issuer may execute, in the same manner as is provided in Section 2.03, and deliver, upon authentication by the Registrar pursuant to Section 2.04 hereof, in lieu of definitive Bonds, but subject to the same provisions, limitations and conditions as the definitive Bonds, except as to the denominations thereof, one or more temporary Bonds substantially of the tenor of the definitive Bonds in lieu of which such temporary Bond or Bonds are issued, in denominations authorized by the Issuer by subsequent resolution and with such omissions, insertions and variations as may be appropriate to temporary Bonds. The Issuer, at its own expense, shall prepare and execute definitive Bonds, which shall be authenticated by the Registrar. Upon the surrender of such temporary Bonds for exchange, the Registrar, without charge to the Holder thereof, shall deliver in exchange therefor definitive Bonds, of the same aggregate principal amount and maturity as the temporary Bonds surrendered. Until so exchanged, the temporary Bonds shall in all respects be entitled to the same benefits and security as definitive Bonds issued pursuant to this Resolution. All temporary Bonds surrendered in exchange for another temporary Bond or Bonds or for a definitive Bond or Bonds shall be forthwith cancelled by the Registrar. SECTION 2.06. BONDS MUTILATED, DESTROYED, STOLEN OR LOST. In case any Bond shall become mutilated, or be destroyed, stolen or lost, the Issuer may, in its discretion, issue and deliver, and the Registrar shall authenticate, a new Bond of like tenor as the Bond so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Bond upon surrender and cancellation of such mutilated

12

Bond or in lieu of and substitution for the Bond destroyed, stolen or lost, and upon the Holder furnishing the Issuer and the Registrar proof of his ownership thereof and satisfactory indemnity and complying with such other reasonable regulations and conditions as the Issuer or the Registrar may prescribe and paying such expenses as the Issuer and the Registrar may incur. All Bonds so surrendered shall be cancelled by the Registrar. If any of the Bonds shall have matured or be about to mature, instead of issuing a substitute Bond, the Issuer may pay the same or cause the Bond to be paid, upon being indemnified as aforesaid, and if such Bonds be lost, stolen or destroyed, without surrender thereof. Any such duplicate Bonds issued pursuant to this Section 2.06 shall constitute original, additional contractual obligations on the part of the Issuer whether or not the lost, stolen or destroyed Bond be at any time found by anyone, and such duplicate Bond shall be entitled to equal and proportionate benefits and rights to the same extent as all other Bonds issued hereunder.

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SECTION 2.07. INTERCHANGEABILITY, NEGOTIABILITY AND TRANSFER. Bonds, upon surrender thereof at the office of the Registrar with a written instrument of transfer satisfactory to the Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing, may, at the option of the Holder thereof, be exchanged for an equal aggregate principal amount of registered Bonds of the same maturity of any other authorized denominations. The Bonds issued under this Resolution shall be and have all the qualities and incidents of negotiable instruments under the law merchant and the Uniform Commercial Code of the State, subject to the provisions for registration and transfer contained in this Resolution and in the Bonds. So long as any of the Bonds shall remain Outstanding, the Issuer shall maintain and keep, at the office of the Registrar, books for the registration and transfer of the Bonds. Each Bond shall be transferable only upon the books of the Issuer, at the office of the Registrar, under such reasonable regulations as the Issuer may prescribe, by the Holder thereof in person or by his attorney duly authorized in writing upon surrender thereof together with a written instrument of transfer satisfactory to the Registrar duly executed and guaranteed by the Holder or his duly authorized attorney. Upon the transfer of any such Bond, the Issuer shall issue, and cause to be authenticated, in the name of the transferee a new Bond or Bonds of the same aggregate principal amount and maturity as the surrendered Bond. The Issuer, the Registrar and any Paying Agent or fiduciary of the Issuer may deem and treat the Person in whose name any Outstanding Bond shall be registered upon the books of the Issuer as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal or Redemption Price, if applicable, and interest on such Bond and for all other purposes, and all such payments so made to any such Holder or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent 13

of the sum or sums so paid and neither the Issuer nor the Registrar nor any Paying Agent or other fiduciary of the Issuer shall be affected by any notice to the contrary. The Registrar, in any case where it is not also the Paying Agent in respect to any Bonds, forthwith (A) following the fifteenth (15th) day prior to an Interest Date for the Bonds; (B) following the fifteenth day next preceding the date of first mailing of notice of redemption of any Bonds; and (C) at any other time as reasonably requested by the Paying Agent of such Bonds, shall certify and furnish to such Paying Agent the names, addresses and holdings of Bondholders and any other relevant information reflected in the registration books. Any Paying Agent of any fully registered Bond shall effect payment of interest on such Bonds by mailing a check to the Holder entitled thereto or may, in lieu thereof, upon the request and expense of such Holder, transmit such payment by bank wire transfer for the account of such Holder. In all cases in which the privilege of exchanging Bonds or transferring Bonds is exercised, the Issuer shall execute and deliver Bonds and the Registrar shall authenticate such Bonds in accordance with the provisions of this Resolution. Execution of Bonds by the Chair and Clerk for purposes of exchanging, replacing or transferring Bonds may occur at the time of the original delivery of the Bonds. All Bonds surrendered in any such exchanges or transfers shall be held by the Registrar in safekeeping until directed by the Issuer to be cancelled by the Registrar. For every such exchange or transfer of Bonds, the Issuer or the Registrar may make a charge sufficient to reimburse it for any tax, fee, expense or other governmental charge required to be paid with respect to such exchange or transfer. The Issuer and the Registrar shall not be obligated to make any such exchange or transfer of Bonds during the fifteen (15) days next preceding an Interest Date on the Bonds or, in the case of any proposed redemption of Bonds, then, for the Bonds subject to redemption, during the 15 days next preceding the date of the first mailing of notice of such redemption and continuing until such redemption date. SECTION 2.08. FULL BOOK ENTRY FOR BONDS. Notwithstanding the provisions set forth in Section 2.07 hereof, the Bonds shall be initially issued in the form of a separate single certificated fully registered bond certificate for each of the maturities of the Bonds. Upon initial issuance, the ownership of each such Bond shall be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"). All of the Outstanding Bonds shall be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC. As long as the Bonds shall be registered in the name of Cede & Co., all payments of principal on the Bonds shall be made by the Paying Agent by check or draft or by bank wire transfer to Cede & Co., as Holder of the Bonds, upon presentation of the Bonds to be paid, to the Paying Agent. With respect to the Bonds registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the Issuer, the Registrar and the Paying Agent shall have no responsibility or obligation to any direct or indirect participant in the 14

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DTC book-entry program (the "Participants"). Without limiting the immediately preceding sentence, the Issuer, the Registrar and the Paying Agent shall have no responsibility or obligation with respect to (A) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest on the Bonds, (B) the delivery to any Participant or any other Person other than a Bondholder, as shown in the registration books kept by the Registrar, of any notice with respect to the Bonds, including any notice of redemption, or (C) the payment to any Participant or any other Person, other than a Bondholder, as shown in the registration books kept by the Registrar, of any amount with respect to principal of, Redemption Price, if applicable, or interest on the Bonds. The Issuer, the Registrar and the Paying Agent shall treat and consider the Person in whose name each Bond is registered in the registration books kept by the Registrar as the Holder and absolute owner of such Bond for the purpose of payment of principal, Redemption Price, if applicable, and interest with respect to such Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The Paying Agent shall pay all principal of, Redemption Price, if applicable, and interest on the Bonds only to or upon the order of the respective Holders, as shown in the registration books kept by the Registrar, or their respective attorneys duly authorized in writing, as provided herein and all such payments shall be valid and effective to fully satisfy and discharge the Issuer's obligations with respect to payment of principal, Redemption Price, if applicable, and interest on the Bonds to the extent of the sum or sums so paid. No Person other than a Holder, as shown in the registration books kept by the Registrar, shall receive a certificated Bond evidencing the obligation of the Issuer to make payments of principal, Redemption Price, if applicable, and interest pursuant to the provisions of this Resolution. Upon delivery by DTC to the Issuer of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions in Section 2.07 with respect to transfers during the 15 days next preceding an Interest Date or mailing of notice of redemption, the words "Cede & Co." shall refer to such new nominee of DTC; and upon receipt of such notice, the Issuer shall promptly deliver a copy of the same to the Registrar and the Paying Agent.

whatever name or names Holders shall designate, in accordance with the provisions of this Resolution. In such event, the Issuer shall issue, and the Registrar shall authenticate, transfer and exchange the Bonds of like principal amount and maturity, in denominations of $5,000 or any integral multiple thereof to the Holders thereof. The foregoing notwithstanding, until such time as participation in the book-entry only system is discontinued, the provisions set forth in the Blanket Letter of Representations previously executed by the Issuer and delivered to DTC shall apply to the payment of principal of, Redemption Price, if applicable, and interest on the Bonds. SECTION 2.09. FORM OF BONDS. The text of the Bonds shall be in substantially the following form with such omissions, insertions and variations as may be necessary and/or desirable and approved by the Chair prior to the issuance thereof (which necessity and/or desirability and approval shall be presumed by such officer's execution of the Bonds and the Issuer's delivery of the Bonds to the purchaser or purchasers thereof):

Upon (A) receipt by the Issuer of written notice from DTC (i) to the effect that a continuation of the requirement that all of the Outstanding Bonds be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, is not in the best interest of the beneficial owners of the Bonds or (ii) to the effect that DTC is unable or unwilling to discharge its responsibilities and no substitute depository willing to undertake the functions of DTC hereunder can be found which is willing and able to undertake such functions upon reasonable and customary terms, or (B) determination by the Issuer that such book-entry only system is burdensome or undesirable to the Issuer and compliance by the Issuer of all applicable policies and procedures of DTC regarding discontinuance of the book entry registration system, the Bonds shall no longer be restricted to being registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, but may be registered in 15

16

No. R-

$

UNITED STATES OF AMERICA STATE OF FLORIDA COLLIER COUNTY, FLORIDA SPECIAL OBLIGATION REFUNDING REVENUE BONDS, SERIES 2013 Interest Rate

Maturity Date

Date of Original Issue

CUSIP Number

Registered Holder: Principal Amount:

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KNOW ALL MEN BY THESE PRESENTS, that Collier County, Florida, a political subdivision of the State of Florida (the "Issuer"), for value received, hereby promises to pay, solely from the Non-Ad Valorem Revenues hereinafter described, to the Registered Holder identified above, or registered assigns as hereinafter provided, on the Maturity Date identified above, the Principal Amount identified above and to pay interest on such Principal Amount from the Date of Original Issue identified above or from the most recent interest payment date to which interest has been paid at the Interest Rate per annum identified above on April 1 and October 1 of each year commencing October 1, 2013 until such Principal Amount shall have been paid, except as the provisions hereinafter set forth with respect to redemption prior to maturity may be or become applicable hereto. Such Principal Amount and interest and the premium, if any, on this Bond are payable in any coin or currency of the United States of America which, on the respective dates of payment thereof, shall be legal tender for the payment of public and private debts. Such Principal Amount on this Bond is payable at the designated corporate trust office of ___________________________, _________, Florida, as Paying Agent. Payment of each installment of interest shall be made to the person in whose name this Bond shall be registered on the registration books of the Issuer maintained by ___________________________, _________, Florida, as Registrar, at the close of business on the date which shall be the fifteenth day (whether or not a business day) of the calendar month next preceding each interest payment date and shall be paid by a 17

check of such Paying Agent mailed to such Registered Holder at the address appearing on such registration books or, at the request of such Registered Holder, by bank wire transfer for the account of such Holder. Interest shall be calculated on the basis of a 360-day year of twelve 30-day months. This Bond is one of an authorized issue of Bonds in the aggregate principal amount of $___________ (the "Bonds") of like date, tenor and effect, except as to maturity date, interest rate, denomination and number issued under the authority of and in full compliance with the Constitution and laws of the State of Florida, particularly Chapter 125, Florida Statutes, and other applicable provisions of law (collectively, the "Act"), and a resolution duly adopted by the Board of County Commissioners of the Issuer, on __________, 2013, as the same may be amended and supplemented (the "Resolution"), and is subject to all the terms and conditions of the Resolution. Capitalized undefined terms used herein shall have the meanings ascribed thereto in the Resolution. The Bonds are being issued to refund certain outstanding indebtedness of the Issuer. Pursuant to the Resolution, the Issuer has covenanted to appropriate in its annual budget, by amendment, if necessary, such amounts of Non-Ad Valorem Revenues which are not otherwise pledged, restricted or encumbered, as shall be necessary to pay the principal of and interest on the Bonds when due and all required rebate payments. Such covenant to appropriate Non-Ad Valorem Revenues is not a pledge by the Issuer of such Non-Ad Valorem Revenues and is subject in all respects to the payment of obligations secured by a pledge of such Non-Ad Valorem Revenues heretofore or hereafter entered into (including the payment of debt service on bonds or other debt instruments) and also to the payment of services and programs which are for essential public purposes affecting the health, safety and welfare of the inhabitants of the Issuer or which are legally mandated by applicable law. IT IS EXPRESSLY AGREED BY THE REGISTERED HOLDER OF THIS BOND THAT THE FULL FAITH AND CREDIT OF THE ISSUER, THE STATE OF FLORIDA, OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF, ARE NOT PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST ON THIS BOND AND THAT SUCH HOLDER SHALL NEVER HAVE THE RIGHT TO REQUIRE OR COMPEL THE EXERCISE OF ANY TAXING POWER OF THE ISSUER, THE STATE OF FLORIDA, OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF, TO THE PAYMENT OF SUCH PRINCIPAL, PREMIUM, IF ANY, AND INTEREST. THIS BOND AND THE OBLIGATION EVIDENCED HEREBY SHALL NOT CONSTITUTE A LIEN UPON ANY PROPERTY OF THE ISSUER, BUT SHALL BE PAYABLE SOLELY FROM THE AMOUNTS BUDGETED AND APPROPRIATED BY THE ISSUER AS DESCRIBED ABOVE AND AS PROVIDED IN THE RESOLUTION.

18

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The Issuer has established a book-entry system of registration for the Bonds. Except as specifically provided otherwise in the Resolution, an agent will hold this Bond on behalf of the beneficial owner thereof. By acceptance of a confirmation of purchase, delivery or transfer, the beneficial owner of this Bond shall be deemed to have agreed to such arrangement.

Reference to the Resolution and any and all resolutions supplemental thereto and modifications and amendments thereof and to the Act is made for a description of the pledge and covenants securing this Bond, the nature, manner and extent of enforcement of such pledge and covenants, and the rights, duties, immunities and obligations of the Issuer.

This Bond is transferable in accordance with the terms of the Resolution only upon the books of the Issuer kept for that purpose at the designated corporate trust office of the Registrar by the Registered Holder hereof in person or by his attorney duly authorized in writing, upon the surrender of this Bond together with a written instrument of transfer satisfactory to the Registrar duly executed by the Registered Holder or his attorney duly authorized in writing, and thereupon a new Bond or Bonds in the same aggregate principal amount shall be issued to the transferee in exchange therefor, and upon the payment of the charges, if any, therein prescribed. The Bonds are issuable in the form of fully registered Bonds in the denomination of $5,000 and any integral multiple thereof, not exceeding the aggregate principal amount of the Bonds. The Issuer, the Registrar and any Paying Agent may treat the Registered Holder of this Bond as the absolute owner hereof for all purposes, whether or not this Bond shall be overdue, and shall not be affected by any notice to the contrary. The Issuer shall not be obligated to make any exchange or transfer of the Bonds during the fifteen (15) days next preceding an interest payment date or, in the case of any proposed redemption of Bonds, then, for the Bonds subject to redemption, during the 15 days next preceding the date of the first mailing of notice of such redemption and continuing until such redemption date.

It is hereby certified and recited that all acts, conditions and things required to exist, to happen and to be performed precedent to and in the issuance of this Bond, exist, have happened and have been performed, in regular and due form and time as required by the laws and Constitution of the State of Florida applicable thereto, and that the issuance of the Bonds does not violate any constitutional or statutory limitations or provisions.

(INSERT REDEMPTION PROVISIONS)

Neither the Chair nor the members of the Board of County Commissioners of the Issuer nor any person executing this Bond shall be liable personally hereon or be subject to any personal liability or accountability by reason of the issuance hereof. This Bond shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed by the Registrar. IN WITNESS WHEREOF, Collier County, Florida has issued this Bond and has caused the same to be executed by the manual or facsimile signature of the Chairwoman of the Board of County Commissioners and attested by the manual or facsimile signature of the Clerk of the Circuit Court for Collier County, Florida and Ex-Officio Clerk of the Board of County Commissioners, and its official seal or a facsimile thereof to be affixed or reproduced hereon, all Date of Original Issue. COLLIER COUNTY, FLORIDA

Redemption of this Bond under the preceding paragraphs shall be made as provided in the Resolution upon notice given by first class mail sent at least 30 days prior to the redemption date to the Registered Holder hereof at the address shown on the registration books maintained by the Registrar; provided, however, that failure to mail notice to the Registered Holder hereof, or any defect therein, shall not affect the validity of the proceedings for redemption of other Bonds as to which no such failure or defect has occurred. In the event that less than the full principal amount hereof shall have been called for redemption, the Registered Holder hereof shall surrender this Bond in exchange for one or more Bonds in an aggregate principal amount equal to the unredeemed portion of principal, as provided in the Resolution.

(SEAL)

As long as the book-entry only system is used for determining beneficial ownership of the Bonds, notice of redemption will only be sent to Cede & Co. Cede & Co. will be responsible for notifying the DTC Participants, who will in turn be responsible for notifying the beneficial owners of the Bonds. Any failure of Cede & Co. to notify any DTC Participant, or of any DTC Participant to notify the beneficial owner of any such notice, will not affect the validity of the redemption of the Bonds.

Approved as to Form and Legal Sufficiency:

19

______________________________________ Chairwoman, Board of County Commissioners ATTESTED: _________________________________ Clerk, Circuit Court for Collier County, Florida and Ex-Officio Clerk of the Board of County Commissioners

County Attorney

20

CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds of the Issue described in the within-mentioned Resolution. DATE OF AUTHENTICATION:

Unless this certificate is presented by an authorized representative of The Depository Trust Company to the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as requested by the authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein. ASSIGNMENT

_____________________________________ Registrar By:___________________________________ Authorized Officer

FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto Insert Social Security or Other Identifying Number of Assignee (Name and Address of Assignee)

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the within Bond and does hereby irrevocably constitute and appoint ___________________________, as attorneys to register the transfer of the said Bond on the books kept for registration thereof with full power of substitution in the premises. Dated: Signature guaranteed: NOTICE: Signature must be guaranteed by an institution which is a participant in the Securities Transfer Agent Medallion Program (STAMP) or similar program.

21

NOTICE: The signature to this assignment must correspond with the name of the Registered Holder as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatever and the Social Security or other identifying number of such assignee must be supplied.

22

The following abbreviations, when used in the inscription on the face of the within Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants in common

ARTICLE III REDEMPTION OF BONDS SECTION 3.01. PRIVILEGE OF REDEMPTION. (A) The terms of this Article III shall apply to redemption of Bonds.

TEN ENT -- as tenants by the entireties

(B) The Bonds may be subject to such optional and mandatory sinking fund redemption provisions as are determined by the Chair in accordance with Section 2.01 hereof and as set forth in the Official Statement.

JT TEN -- as joint tenants with right of survivorship and not as tenants in common UNIF TRANS MIN ACT -(Cust.) Custodian for under Uniform Transfers to Minors Act of (State)

B-14

Additional abbreviations may also be used though not in list above.

SECTION 3.02. SELECTION OF BONDS TO BE REDEEMED. The Bonds shall be redeemed only in the principal amount of $5,000 each and integral multiples thereof. The Issuer shall, at least 45 days prior to the redemption date (unless a shorter time period shall be satisfactory to the Registrar), notify the Registrar of such redemption date and of the principal amount of Bonds to be redeemed. For purposes of any redemption of less than all of the Outstanding Bonds of a single maturity, the particular Bonds or portions of Bonds to be redeemed shall be selected not more than 45 days and not less than 35 days prior to the redemption date by the Registrar from the Outstanding Bonds of the maturity or maturities designated by the Issuer by such method as the Registrar shall deem fair and appropriate and which may provide for the selection for redemption of Bonds or portions of Bonds in principal amounts of $5,000 and integral multiples thereof. Notwithstanding the foregoing, in the event that less than the entire principal amount of a Term Bond is to be optionally redeemed, the Issuer shall determine how the principal amount of such refunded Term Bond is to be allocated to the Amortization Installments for the Term Bond and shall notify the Paying Agent and Registrar of such allocation. If less than all of the Outstanding Bonds of a single maturity are to be redeemed, the Registrar shall promptly notify the Issuer and Paying Agent (if the Registrar is not the Paying Agent for such Bonds) in writing of the Bonds or portions of Bonds selected for redemption and, in the case of any Bond selected for partial redemption, the principal amount thereof to be redeemed. SECTION 3.03. NOTICE OF REDEMPTION. Notice of such redemption, which shall specify the Bond or Bonds (or portions thereof) to be redeemed and the date and place for redemption, shall be given by the Registrar on behalf of the Issuer, and (A) shall be filed with the Paying Agent of such Bonds, (B) shall be mailed first class, postage prepaid, not less than 30 days nor more than 45 days prior to the redemption date to all Holders of Bonds to be redeemed at their addresses as they appear on the registration books kept by the Registrar as of the date of mailing of such notice, and (C) shall be mailed, certified mail, postage prepaid, at least 35 days prior to the redemption date to the registered securities depositories and two or more nationally recognized municipal bond information services as hereinafter provided in this Section

23

24

3.03. Failure to mail such notice to such depositories or services or the Holders of the Bonds to be redeemed, or any defect therein, shall not affect the proceedings for redemption of Bonds as to which no such failure or defect has occurred. Failure of any Holder to receive any notice mailed as herein provided shall not affect the proceedings for redemption of such Holder's Bonds.

B-15

Each notice of redemption shall state: (1) the CUSIP numbers and any other distinguishing number or letter of all Bonds being redeemed, (2) the original issue date of such Bonds, (3) the maturity date and rate of interest borne by each Bond being redeemed, (4) the redemption date, (5) the Redemption Price, (6) the date on which such notice is mailed, (7) if less than all Outstanding Bonds are to be redeemed, the certificate number (and, in the case of a partial redemption of any Bond, the principal amount) of each Bond to be redeemed, (8) that on such redemption date there shall become due and payable upon each Bond to be redeemed the Redemption Price thereof, or the Redemption Price of the specified portions of the principal thereof in the case of Bonds to be redeemed in part only, together with interest accrued thereon to the redemption date, and that from and after such date interest thereon shall cease to accrue and be payable, (9) that the Bonds to be redeemed, whether as a whole or in part, are to be surrendered for payment of the Redemption Price at the designated office of the Registrar at an address specified, (10) the name and telephone number of a person designated by the Registrar to be responsible for such redemption, (11) unless sufficient funds have been set aside by the Issuer for such purpose prior to the mailing of the notice of redemption, that such redemption is conditioned upon the deposit of sufficient funds for such purpose on or prior to the date set for redemption, and (12) any other conditions that must be satisfied prior to such redemption. In addition to the mailing of the notice described above, each notice of redemption and payment of the Redemption Price shall meet the following requirements; provided, however, the failure to provide such further notice of redemption or to comply with the terms of this paragraph shall not in any manner defeat the effectiveness of a call for redemption if notice thereof is given as prescribed above: (A) Each further notice of redemption shall be sent by certified mail or overnight delivery service or telecopy to all registered securities depositories then in the business of holding substantial amounts of obligations of types comprising the Bonds (such depositories now being The Depository Trust Company, New York, New York, Midwest Securities Trust Company, Chicago, Illinois and Philadelphia Depository Trust Company, Philadelphia, Pennsylvania) and to two or more national information services which disseminate notices of prepayment or redemption of obligations such as the Bonds (such information services now being called Financial Information, Inc.'s "Daily Called Bond Service," Jersey City, New Jersey, Kenny Information Service's "Called Bond Service," New York, New York, Moody's "Municipal and Government," New York, New York and Standard & Poor's "Called Bond Record," New York, New York).

25

(B) Each further notice of redemption shall be sent to such other Person, if any, as shall be required by applicable law or regulation. The Issuer may provide that a redemption will be contingent upon the occurrence of certain conditions and that if such conditions do not occur the notice of redemption will be rescinded, provided notice of rescission shall be mailed in the manner described above to all affected Bondholders as soon as practicable but in no event later than three business days following knowledge by the Issuer and/or the Registrar that the condition for redemption has not or will not occur. SECTION 3.04. REDEMPTION OF PORTIONS OF BONDS. Any Bond which is to be redeemed only in part shall be surrendered at any place of payment specified in the notice of redemption (with due endorsement by, or written instrument of transfer in form satisfactory to the Registrar duly executed by, the Holder thereof or his attorney duly authorized in writing) and the Issuer shall execute and the Registrar shall authenticate and deliver to the Holder of such Bond, without service charge, a new Bond or Bonds, of any authorized denomination, as requested by such Holder in an aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bonds so surrendered. SECTION 3.05. PAYMENT OF REDEEMED BONDS. Notice of redemption having been given substantially as aforesaid, the Bonds or portions of Bonds to be redeemed shall, on the redemption date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Issuer shall default in the payment of the Redemption Price) such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Registrar and/or Paying Agent at the appropriate Redemption Price, plus accrued interest. All Bonds which have been redeemed shall be cancelled and destroyed by the Registrar and shall not be reissued.

[Remainder of page intentionally left blank]

26

ARTICLE IV SECURITY; FUNDS; COVENANTS OF THE ISSUER SECTION 4.01. BONDS NOT TO BE INDEBTEDNESS OF ISSUER. The Bonds shall not be or constitute general obligations or indebtedness of the Issuer as "bonds" within the meaning of any constitutional or statutory provision, but shall be special obligations of the Issuer, payable solely from amounts budgeted and appropriated by the Issuer from Non-Ad Valorem Revenues in accordance with Section 4.02 hereof. No Holder of any Bond shall ever have the right to compel the exercise of any ad valorem taxing power to pay such Bond, or be entitled to payment of such Bond from any moneys of the Issuer except from the Non-Ad Valorem Revenues in the manner and to the extent provided herein.

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SECTION 4.02. COVENANT TO BUDGET AND APPROPRIATE; PAYMENT OF BONDS. The Issuer covenants and agrees to appropriate in its annual budget, by amendment, if necessary, from Non-Ad Valorem Revenues amounts sufficient to (A) pay principal of and interest on the Bonds when due, and (B) pay all required deposits to the Rebate Fund pursuant to Section 4.03 hereof. Such covenant and agreement on the part of the Issuer to budget and appropriate such amounts of Non-Ad Valorem Revenues shall be cumulative to the extent not paid, and shall continue until such Non-Ad Valorem Revenues or other legally available funds in amounts sufficient to make all such required payments shall have been budgeted, appropriated and actually paid. Notwithstanding the foregoing covenant of the Issuer, the Issuer does not covenant to maintain any services or programs, now provided or maintained by the Issuer, which generate Non-Ad Valorem Revenues. Such covenant to budget and appropriate does not create any lien upon or pledge of such Non-Ad Valorem Revenues, nor does it preclude the Issuer from pledging in the future its Non-Ad Valorem Revenues, nor does it require the Issuer to levy and collect any particular Non-Ad Valorem Revenues, nor does it give the Bondholders a prior claim on the Non-Ad Valorem Revenues as opposed to claims of general creditors of the Issuer. Such covenant to appropriate Non-Ad Valorem Revenues is subject in all respects to the payment of obligations secured by a pledge of such Non-Ad Valorem Revenues heretofore or hereafter entered into (including the payment of debt service on bonds and other debt instruments). However, the covenant to budget and appropriate for the purposes and in the manner stated herein shall have the effect of making available for the payment of the Bonds, in the manner described herein, Non-Ad Valorem Revenues and placing on the Issuer a positive duty to appropriate and budget, by amendment, if necessary, amounts sufficient to meet its obligations hereunder; subject, however, in all respects to the restrictions of Section 129.07, Florida Statutes, which generally provide that the governing body of each county may only make appropriations for each fiscal year which, in any one year, shall not exceed the amount to be received from taxation or other revenue sources; and subject, further, to the payment of services and programs which are 27

for essential public purposes affecting the health, safety and welfare of the inhabitants of the Issuer or which are legally mandated by applicable law. The Issuer covenants and agrees to transfer to the Paying Agent for the Bonds, solely from funds budgeted and appropriated as described in this Section 4.02, at least one business day prior to the date designated for payment of any principal of or interest on the Bonds, sufficient moneys to pay such principal or interest. The Registrar and Paying Agent shall utilize such moneys for payment of the principal and interest on the Bonds when due. SECTION 4.03. REBATE FUND. The Issuer covenants and agrees to establish a special fund to be known as the "Collier County, Florida Special Obligation Refunding Revenue Bonds, Series 2013 Rebate Fund," which shall be held in trust by the Issuer and used solely to make required rebates to the United States (except to the extent the same may be used to pay debt service on the Bonds) and the Bondholders shall have no right to have the same applied for debt service on the Bonds. The Issuer agrees to undertake all actions required of it in its arbitrage certificate relating to the Bonds, including, but not limited to: (A) making a determination in accordance with the Code of the amount required to be deposited in the Rebate Fund; (B)

depositing the amount determined in clause (A) above into the Rebate

Fund; (C) paying on the dates and in the manner required by the Code to the United States Treasury from the Rebate Fund and any other legally available moneys of the Issuer such amounts as shall be required by the Code to be rebated to the United States Treasury; and (D) keeping such records of the determinations made pursuant to this Section 4.03 as shall be required by the Code, as well as evidence of the fair market value of any investments purchased with proceeds of the Bonds. The provisions of the above-described arbitrage certificates may be amended without the consent of any Holder from time to time as shall be necessary, in the opinion of Bond Counsel, to comply with the provisions of the Code. SECTION 4.04. ANTI-DILUTION. During such time as any Bonds are Outstanding hereunder, the Issuer agrees and covenants with the Bondholders that (1) Non-Ad Valorem Revenues shall cover projected Maximum Annual Debt Service on the Bonds and maximum annual debt service on Debt by at least 1.5x; and (2) projected Maximum Annual Debt Service on the Bonds and maximum annual debt service for all Debt will not exceed 20% of the aggregate of General Fund Revenues, MSTD Revenues

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and Impact Fee Proceeds exclusive of (a) ad valorem tax revenues restricted to payment of debt service on any Debt and (b) any proceeds of the Bonds or Debt. The calculations required by clauses (1) and (2) above shall be determined using the average of actual Non-Ad Valorem Revenues, General Fund Revenues, MSTD Revenues and Impact Fee Proceeds for the prior two Fiscal Years based on the Issuer’s Annual Audits. For purposes of the calculations required by clauses (1) and (2) above, Maximum Annual Debt Service on the Bonds and maximum annual debt service on Debt shall be done on an aggregate basis whereby the annual debt service for each is combined and the overall maximum is determined.

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For the purposes of the covenants contained in this Section 4.04, maximum annual debt service on Debt means, with respect to Debt that bears interest at a fixed interest rate, the actual maximum annual debt service, and, with respect to Debt which bears interest at a variable interest rate, maximum annual debt service on such Debt shall be determined assuming that interest accrues on such Debt at the current "Bond Buyer Revenue Bond Index" as published in The Bond Buyer no more than two weeks prior to any such calculation; provided, however, if any Debt, whether bearing interest at a fixed or variable interest rate, constitutes Balloon Indebtedness, as defined in the immediately following sentence, maximum annual debt service on such Debt shall be determined assuming such Debt is amortized over 20 years on an approximately level debt service basis. For purposes of the foregoing sentence, "Balloon Indebtedness" means Debt, 25% or more of the original principal of which matures during any one Fiscal Year. In addition, with respect to debt service on any Debt which is subject to a Qualified Hedge Agreement, interest on such Debt during the term of such Qualified Hedge Agreement shall be deemed to be the Hedge Payments coming due during such period of time. With respect to debt service on any Debt with respect to which the Issuer elects to receive or is otherwise entitled to receive direct subsidy payments from the United States Department of Treasury, when determining the interest on such Debt for any particular interest payment date the amount of the corresponding subsidy payment shall be deducted from the amount of interest which is due and payable with respect to such Debt on the interest payment date, but only to the extent that the Issuer reasonably believes that it will be in receipt of such subsidy payment on or prior to such interest payment date.

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ARTICLE V COVENANTS SECTION 5.01. GENERAL. The Issuer hereby makes the following covenants, in addition to all other covenants in this Resolution, with each and every successive Holder of any of the Bonds so long as any of said Bonds remain Outstanding. SECTION 5.02. ANNUAL BUDGET. The Issuer shall annually prepare and adopt, prior to the beginning of each Fiscal Year, an Annual Budget in accordance with applicable law. If for any reason the Issuer shall not have adopted the Annual Budget before the first day of any Fiscal Year, the preliminary budget for such year shall be deemed to be in effect for such Fiscal Year until the Annual Budget for such Fiscal Year is adopted. The Issuer shall provide the Annual Budget to any Holder or Holders of Bonds upon written request. The Issuer shall be permitted to make a reasonable charge for furnishing such information to such Holder or Holders. SECTION 5.03. ANNUAL AUDIT. The Issuer shall, immediately after the close of each Fiscal Year, cause the books, records and accounts relating to the Issuer to be properly audited by a recognized independent firm of certified public accountants, and shall require such accountants to complete their report of such Annual Audit in accordance with applicable law. Each Annual Audit shall be in conformity with generally accepted accounting principles as applied to governmental entities. The Issuer shall provide the Annual Audit to any Holder or Holders of Bonds upon written request. The Issuer shall be permitted to make a reasonable charge for furnishing such information to such Holder or Holders. SECTION 5.04. FEDERAL INCOME TAXATION COVENANTS. The Issuer covenants with the Holders of the Bonds that it shall not use the proceeds of the Bonds in any manner which would cause the interest on such Bonds to be or become included in gross income for purposes of federal income taxation. The Issuer covenants with the Holders of the Bonds that neither the Issuer nor any Person under its control or direction will make any use of the proceeds of the Bonds (or amounts deemed to be proceeds under the Code) in any manner which would cause the Bonds to be "arbitrage bonds" within the meaning of the Code and neither the Issuer nor any other Person shall do any act or fail to do any act which would cause the interest on the Bonds to become subject to inclusion within gross income for purposes of federal income taxation.

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The Issuer hereby covenants with the Holders of the Bonds that it will comply with all provisions of the Code necessary to maintain the exclusion from gross income of interest on the Bonds for purposes of federal income taxation, including, in particular, the payment of any amount required to be rebated to the U.S. Treasury pursuant to the Code.

ARTICLE VI DEFAULTS AND REMEDIES SECTION 6.01. EVENTS OF DEFAULT. The following events shall each constitute an "Event of Default": (A) Default shall be made in the payment of the principal of, Redemption Price, if applicable, or interest on any Bond when due.

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(B) There shall occur the dissolution or liquidation of the Issuer, or the filing by the Issuer of a voluntary petition in bankruptcy, or the commission by the Issuer of any act of bankruptcy, or adjudication of the Issuer as a bankrupt, or assignment by the Issuer for the benefit of its creditors, or appointment of a receiver for the Issuer, or the entry by the Issuer into an agreement of composition with its creditors, or the approval by a court of competent jurisdiction of a petition applicable to the Issuer in any proceeding for its reorganization instituted under the provisions of the Federal Bankruptcy Act, as amended, or under any similar act in any jurisdiction which may now be in effect or hereafter enacted.

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(C) The Issuer shall default in the due and punctual performance of any other of the covenants, conditions, agreements and provisions contained in the Bonds or in this Resolution on the part of the Issuer to be performed, and such default shall continue for a period of 30 days after written notice of such default shall have been received from the Holders of not less than 25% of the aggregate principal amount of Bonds Outstanding. Notwithstanding the foregoing, the Issuer shall not be deemed to be in default hereunder if such default can be cured within a reasonable period of time and if the Issuer in good faith institutes appropriate curative action and diligently pursues such action until default has been corrected. SECTION 6.02. REMEDIES. Any Holder of Bonds issued under the provisions of this Resolution or any trustee or receiver acting for such Bondholders may either at law or in equity, by suit, action, mandamus or other proceedings in any court of competent jurisdiction, protect and enforce any and all rights under the Laws of the State, or granted and contained in this Resolution, and may enforce and compel the performance of all duties required by this Resolution or by any applicable statutes to be performed by the Issuer or by any officer thereof; provided, however, that no Holder, trustee or receiver shall have the right to declare the Bonds immediately due and payable. The Holder or Holders of Bonds in an aggregate principal amount of not less than 25% of the Bonds then Outstanding may by a duly executed certificate in writing appoint a trustee for Holders of Bonds issued pursuant to this Resolution with authority to represent such Bondholders in any legal proceedings for the enforcement and protection of the rights of such Bondholders and such certificate shall be executed by such

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Bondholders or their duly authorized attorneys or representatives, and shall be filed in the office of the Clerk. Notice of such appointment, together with evidence of the requisite signatures of the Holders of not less than 25% in aggregate principal amount of Bonds Outstanding and the trust instrument under which the trustee shall have agreed to serve shall be filed with the Issuer and the trustee and notice of such appointment shall be given to all Holders of Bonds in the same manner as notices of redemption are given hereunder. After the appointment of the first trustee hereunder, no further trustees may be appointed; however, the Holders of a majority in aggregate principal amount of all the Bonds then Outstanding may remove the trustee initially appointed and appoint a successor and subsequent successors at any time. SECTION 6.03. DIRECTIONS TO TRUSTEE AS TO REMEDIAL PROCEEDINGS. The Holders of a majority in principal amount of the Bonds then Outstanding) have the right, by an instrument or concurrent instruments in writing executed and delivered to the trustee, to direct the method and place of conducting all remedial proceedings to be taken by the trustee hereunder with respect to the Bonds owned by such Holders, provided that such direction shall not be otherwise than in accordance with law or the provisions hereof, and that the trustee shall have the right to decline to follow any direction which in the opinion of the trustee would be unjustly prejudicial to Holders of Bonds not parties to such direction.

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SECTION 6.04. REMEDIES CUMULATIVE. No remedy herein conferred upon or reserved to the Bondholders is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative, and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. SECTION 6.05. WAIVER OF DEFAULT. No delay or omission of any Bondholder to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default, or an acquiescence therein; and every power and remedy given by Section 6.02 to the Bondholders may be exercised from time to time, and as often as may be deemed expedient. SECTION 6.06. APPLICATION OF MONEYS AFTER DEFAULT. If an Event of Default shall happen and shall not have been remedied, the Issuer or a trustee or receiver appointed for the purpose shall apply all moneys received from the Issuer for payment of the Outstanding Bonds as follows and in the following order: A. To the payment of the reasonable and proper charges, expenses and liabilities of the trustee or receiver and Registrar hereunder;

(1) Unless the principal of all the Bonds shall have become due and payable, all such moneys shall be applied: FIRST: to the payment to the Persons entitled thereto of all installments of interest then due (other than interest on Bonds for the payment of which moneys are held pursuant to the provisions of Section 8.01 of this Resolution), in the order of the maturity of such installments, and, if the amount available shall not be sufficient to pay in full any particular installment, then to the payment ratably, according to the amounts due on such installment, to the Persons entitled thereto, without any discrimination or preference; SECOND: to the payment to the Persons entitled thereto of the unpaid principal of any of the Bonds which shall have become due at maturity or upon mandatory redemption prior to maturity (other than Bonds for the payment of which moneys are held pursuant to the provisions of Section 8.01 of this Resolution), in the order of their due dates, with interest upon such Bonds from the respective dates upon which they became due, and, if the amount available shall not be sufficient to pay in full Bonds due on any particular date, together with such interest, then to the payment first of such interest, ratably according to the amount of such interest due on such date, and then to the payment of such principal, ratably according to the amount of such principal due on such date, to the Persons entitled thereto without any discrimination or preference; and THIRD: to the payment of the Redemption Price of any Bonds called for optional redemption pursuant to the provisions of this Resolution (other than Bonds called for redemption for the payment of which moneys are held pursuant to the provisions of Section 8.01 of this Resolution). (2) If the principal of all the Bonds shall have become due and payable, all such moneys shall be applied to the payment of the principal and interest then due and unpaid upon the Bonds, with interest thereon as aforesaid, without preference or priority of principal over interest or of interest over principal, or of any installment of interest over any other installment of interest, or of any Bond over any other Bond, ratably, according to the amounts due respectively for principal and interest, to the Persons entitled thereto without any discrimination or preference.

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ARTICLE VII SUPPLEMENTAL RESOLUTIONS SECTION 7.01. SUPPLEMENTAL RESOLUTION WITHOUT BONDHOLDERS' CONSENT. The Issuer, from time to time and at any time, may adopt such Supplemental Resolutions without the consent of the Bondholders (which Supplemental Resolution shall thereafter form a part hereof) for any of the following purposes: (A) To cure any ambiguity or formal defect or omission or to correct any inconsistent provisions in this Resolution or to clarify any matters or questions arising hereunder. (B) To grant to or confer upon the Bondholders any additional rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the Bondholders. (C) To add to the conditions, limitations and restrictions on the issuance of Bonds under the provisions of this Resolution other conditions, limitations and restrictions thereafter to be observed.

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(D) To add to the covenants and agreements of the Issuer in this Resolution other covenants and agreements thereafter to be observed by the Issuer or to surrender any right or power herein reserved to or conferred upon the Issuer. (E) To specify and determine the matters and things referred to in Section 2.01 hereof and also any other matters and things relative to such Bonds which are not contrary to or inconsistent with this Resolution as theretofore in effect, or to amend, modify or rescind any such authorization, specification or determination at any time prior to the first delivery of the Bonds. (F) To make any other change that, in the reasonable opinion of the Issuer, would not materially adversely affect the interests of the Holders of the Bonds. SECTION 7.02. SUPPLEMENTAL RESOLUTION WITH BONDHOLDERS'CONSENT. Subject to the terms and provisions contained in this Section 7.02 and Sections 7.01 and 7.03 hereof, the Holder or Holders of not less than a majority in aggregate principal amount of the Bonds then Outstanding shall have the right, from time to time, anything contained in this Resolution to the contrary notwithstanding, to consent to and approve the adoption of such Supplemental Resolutions hereto as shall be deemed necessary or desirable by the Issuer for the purpose of supplementing, modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Resolution; provided, however, that if such modification or amendment will, by its terms, not take effect so

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long as any Bonds of any specified maturity remain Outstanding, the consent of the Holders of such Bonds shall not be required and such Bonds shall not be deemed to be Outstanding for the purpose of any calculation of Outstanding Bonds under this Section 7.02. No Supplemental Resolution may be approved or adopted which shall permit or require, without the consent of all affected Bondholders, (A) an extension of the maturity of the principal of or the payment of the interest on any Bond issued hereunder, (B) reduction in the principal amount of any Bond or the Redemption Price or the rate of interest thereon, (C) a preference or priority of any Bond or Bonds over any other Bond or Bonds, or (D) a reduction in the aggregate principal amount of the Bonds required for consent to such Supplemental Resolution. Nothing herein contained, however, shall be construed as making necessary the approval by Bondholders of the adoption of any Supplemental Resolution as authorized in Section 7.01 hereof. If at any time the Issuer shall determine that it is necessary or desirable to adopt any Supplemental Resolution pursuant to this Section 7.02, the Clerk shall cause the Registrar to give notice of the proposed adoption of such Supplemental Resolution and the form of consent to such adoption to be mailed, postage prepaid, to all Bondholders at their addresses as they appear on the registration books. Such notice shall briefly set forth the nature of the proposed Supplemental Resolution and shall state that copies thereof are on file at the offices of the Clerk and the Registrar for inspection by all Bondholders. The Issuer shall not, however, be subject to any liability to any Bondholder by reason of its failure to cause the notice required by this Section 7.02 to be mailed and any such failure shall not affect the validity of such Supplemental Resolution when consented to and approved as provided in this Section 7.02. Whenever the Issuer shall deliver to the Clerk an instrument or instruments in writing purporting to be executed by the Holders of not less than a majority in aggregate principal amount of the Bonds then Outstanding, which instrument or instruments shall refer to the proposed Supplemental Resolution described in such notice and shall specifically consent to and approve the adoption thereof in substantially the form of the copy thereof referred to in such notice, thereupon, but not otherwise, the Issuer may adopt such Supplemental Resolution in substantially such form, without liability or responsibility to any Holder of any Bond, whether or not such Holder shall have consented thereto. If the Holders of not less than a majority in aggregate principal amount of the Bonds Outstanding at the time of the adoption of such Supplemental Resolution shall have consented to and approved the adoption thereof as herein provided, no Holder of any Bond shall have any right to object to the adoption of such Supplemental Resolution, or to object to any of the terms and provisions contained therein or the operation thereof, or in any manner to question the propriety of the adoption thereof, or to enjoin or restrain the Issuer from adopting the same or from taking any action pursuant to the provisions thereof.

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Upon the adoption of any Supplemental Resolution pursuant to the provisions of this Section 7.02, this Resolution shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Resolution of the Issuer and all Holders of Bonds then Outstanding shall thereafter be determined, exercised and enforced in all respects under the provisions of this Resolution as so modified and amended.

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ARTICLE VIII DEFEASANCE SECTION 8.01. DEFEASANCE. If the Issuer shall pay or cause to be paid or there shall otherwise be paid to the Holders of any Bonds, the principal and interest or Redemption Price due or to become due thereon, at the times and in the manner stipulated therein and in this Resolution, all covenants, agreements and other obligations of the Issuer to the holders of such Bonds shall thereupon cease, terminate and become void and be discharged and satisfied. In such event, the Paying Agents shall pay over or deliver to the Issuer all money or securities held by them pursuant to this Resolution which are not required for payment or redemption of any Bonds not theretofore surrendered for such payment or redemption.

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Any Bonds or interest installments appertaining thereto shall be deemed to have been paid within the meaning of this Section 8.01 if (i) in case any such Bonds are to be redeemed prior to the maturity thereof, there shall have been taken all action necessary to call such Bonds for redemption and notice of such redemption shall have been duly given or provision shall have been made for the giving of such notice, and (ii) there shall have been deposited in irrevocable trust with a banking institution or trust company by or on behalf of the Issuer either moneys in an amount which shall be sufficient, or Refunding Securities verified by an independent certified public accountant to be in such amount that the principal of and the interest on which, when due, will provide moneys which, together with the moneys, if any, deposited with such banking institution or trust company at the same time shall be sufficient, to pay the principal of, Redemption Price, if applicable and interest due and to become due on said Bonds on and prior to the redemption date or maturity date thereof, as the case may be. Except as hereafter provided, neither the Refunding Securities nor any moneys so deposited with such banking institution or trust company nor any moneys received by such bank or trust company on account of principal of or interest on said Refunding Securities shall be withdrawn or used for any purpose other than, and all such moneys shall be held in trust for and be applied to, the payment, when due, of the principal of or Redemption Price of the Bonds for the payment of which they were deposited and the interest accruing thereon to the date of redemption or maturity, as the case may be; provided, however, the Issuer may substitute new Refunding Securities and moneys for the deposited Refunding Securities and moneys if the new Refunding Securities and moneys are sufficient to pay the principal of and interest on or Redemption Price, if applicable, of the refunded Bonds. If Bonds are not to be redeemed or paid within 60 days after any such defeasance described in this Section 8.01, the Issuer shall cause the Registrar to mail a notice to the Holders of such Bonds that the deposit required by this Section 8.01 of moneys or Refunding Securities has been made and said Bonds are deemed to be paid in accordance with the provisions of this Section 8.01 and stating such maturity date upon which moneys are to be available for the payment of the principal of and interest on or

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Redemption Price of said Bonds. Failure to provide said notice shall not affect the Bonds being deemed to have been paid in accordance with the provisions of this Section 8.01.

ARTICLE IX PROVISIONS RELATING TO BONDS

Nothing herein shall be deemed to require the Issuer to call any of the Outstanding Bonds for redemption prior to maturity pursuant to any applicable optional redemption provisions, or to impair the discretion of the Issuer in determining whether to exercise any such option for early redemption.

SECTION 9.01. OFFICIAL NOTICE OF SALE. The form of the Official Notice of Sale attached hereto as Exhibit A and the terms and provisions thereof are hereby authorized and approved. The Chair is hereby authorized to make such changes, insertions and modifications as he or she shall deem necessary prior to the advertisement of such Official Notice of Sale or a summary thereof. The Chair is hereby authorized to advertise and publish the Official Notice of Sale or a summary thereof at such time as he or she shall deem necessary and appropriate, upon the advice of the Financial Advisor and Bond Counsel, to accomplish the competitive sale of the Bonds in accordance with applicable law.

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SECTION 9.02. PRELIMINARY OFFICIAL STATEMENT; OFFICIAL STATEMENT. (A) The Issuer hereby authorizes the distribution and use of the Preliminary Official Statement in substantially the form attached hereto as Exhibit C in connection with the offering of the Bonds for sale. If between the date hereof and the mailing of the Preliminary Official Statement, it is necessary to make insertions, modifications or changes in the Preliminary Official Statement, any Authorized Issuer Officer is hereby authorized to approve such insertions, changes and modifications. Any Authorized Issuer Officer is hereby authorized to deem the Preliminary Official Statement "final" within the meaning of Rule 15c2-12(b)(1) under the Securities Exchange Act of 1934 in the form as mailed. Execution of a certificate by an Authorized Issuer Officer deeming the Preliminary Official Statement "final" as described above shall be conclusive evidence of the approval of any insertions, changes or modifications. (B) Subject in all respects to the satisfaction of the conditions set forth in Section 2.01 hereof, the Chair is hereby authorized and directed to execute and deliver a final Official Statement, dated the date of the sale of the Bonds, which shall be in substantially the form of the Preliminary Official Statement relating to the Bonds, in the name and on behalf of the Issuer, and thereupon to cause such Official Statement to be delivered to the Underwriter with such changes, amendments, modifications, omissions and additions as may be approved by the Chair. Said Official Statement, including any such changes, amendments, modifications, omissions and additions as approved by the Chair, and the information contained therein are hereby authorized to be used in connection with the sale of the Bonds to the public. Execution by the Chair of the Official Statement shall be deemed to be conclusive evidence of approval of such changes. SECTION 9.03. APPOINTMENT OF PAYING AGENT AND REGISTRAR. Subject in all respects to the satisfaction of the conditions set forth in Section 2.01 hereof, Regions Bank, Orlando, Florida is hereby designated Registrar and Paying Agent for the Bonds. Any Authorized Issuer Officer is hereby authorized to enter

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into any agreement which may be necessary to effect the transactions contemplated by this Section 9.02 and by this Resolution.

ARTICLE X MISCELLANEOUS

SECTION 9.04. SECONDARY MARKET DISCLOSURE. Subject to the satisfaction in all respects with the conditions set forth in Section 2.01 hereof, the Issuer hereby covenants and agrees that, in order to provide for compliance by the Issuer with the secondary market disclosure requirements of Rule 15c2-12 of the Security and Exchange Commission (the "Rule"), it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate (the "Disclosure Certificate") to be executed by the Issuer and dated the date of delivery of the Bonds, as it may be amended from time to time in accordance with the terms thereof. The Disclosure Certificate shall be substantially in the form attached hereto as Exhibit B with such changes, amendments, modifications, omissions and additions as shall be approved by the Chair who is hereby authorized to execute and deliver such Disclosure Certificate. Notwithstanding any other provision of the Resolution, failure of the Issuer to comply with such Disclosure Certificate shall not be considered an event of default hereunder; provided, however, any Bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Issuer to comply with its obligations under this Section 9.04 and the Disclosure Certificate. For purposes of this Section 9.04 "Bondholder" shall mean any person who (A) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (B) is treated as the owner of any Bonds for federal income tax purposes.

SECTION 10.01. SALE OF BONDS. The Bonds shall be issued and sold at public or private sale at one time or in installments from time to time and at such price or prices as shall be consistent with the provisions of the Act, the requirements of this Resolution and other applicable provisions of law.

SECTION 9.05. AUTHORIZATION TO EXECUTE ESCROW AGREEMENT. Subject in all respects to the satisfaction of the conditions set forth in Section 2.01 hereof, the Issuer hereby authorizes the Chair to execute and the Clerk to attest the Escrow Agreement and to deliver the Escrow Agreement to Regions Bank, Orlando, Florida, which is hereby appointed as Escrow Agent thereunder. All of the provisions of the Escrow Agreement when executed and delivered by the Issuer as authorized herein and when duly authorized, executed and delivered by the Escrow Agent, shall be deemed to be a part of this Resolution as fully and to the same extent as if incorporated verbatim herein, and the Escrow Agreement shall be in substantially the form attached hereto as Exhibit D, with such changes, amendments, modifications, omissions and additions, including the date of such Escrow Agreement, as may be approved by the Chair. Execution by the Chair of the Escrow Agreement shall be deemed to be conclusive evidence of the approval of such changes.

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SECTION 10.02. SEVERABILITY OF INVALID PROVISIONS. If any one or more of the covenants, agreements or provisions of this Resolution shall be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separable from the remaining covenants, agreements and provisions of this Resolution and shall in no way affect the validity of any of the other covenants, agreements or provisions hereof or of the Bonds issued hereunder. SECTION 10.03. VALIDATION AUTHORIZED. To the extent deemed necessary by Bond Counsel or desirable by the County Attorney, Bond Counsel is authorized to institute appropriate proceedings for validation of the Bonds herein authorized pursuant to Chapter 75, Florida Statutes. SECTION 10.04. REPEAL OF INCONSISTENT RESOLUTIONS. All ordinances, resolutions or parts thereof in conflict herewith are hereby superseded and repealed to the extent of such conflict.

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SECTION 10.05. EFFECTIVE DATE. effective immediately upon its adoption.

This Resolution shall become

DULY ADOPTED this 12th day of March, 2013. COLLIER COUNTY, FLORIDA (SEAL) Chairwoman, Board of County Commissioners ATTEST:

Dwight E. Brock, Clerk By: Deputy Clerk Approved as to Form and Legal Sufficiency:

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County Attorney

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APPENDIX C AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012

The statistical section referred to in the opinion letter has been intentionally omitted

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Ernst & Young LLP Suite 500 5100 Town Center Circle Boca Raton, FL 33486 Tel: +1 561 955 8000 Fax: +1 561 955 8200 www.ey.com

Report of Independent Certified Public Accountants Distinguished Members of the Board of County Commissioners Collier County, Florida: We have audited the accompanying financial statements of the governmental activities, the businesstype activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Collier County, Florida (the County), as of and for the year ended September 30, 2012, which collectively comprise the County’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the County’s management. Our responsibility is to express opinions on these financial statements based on our audit.

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We conducted our audit in accordance with auditing standards generally accepted in the United States 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 of material misstatement. We were not engaged to perform an audit of the County’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the County’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the County as of September 30, 2012, and the respective changes in financial position and, where applicable, cash flows thereof and the budgetary comparison information for the general fund for the year then ended in conformity with US generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued our report dated March 6, 2013 on our consideration of the County’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 the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. 1302-1032546

A member firm of Ernst & Young Global Limited

Accounting principles generally accepted in the United States require that management’s discussion and analysis and schedule of funding progress for retiree health plans, on pages 3 through 15 and 76 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States, 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. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County’s basic financial statements. The combining and individual nonmajor fund financial statements and budgetary comparison schedules as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the financial statements. The accompanying schedule of expenditures of federal awards and state financial assistance is presented for purposes of additional analysis as required by OMB Circular A-133, section 215.97, Florida Statutes and Chapter 10.550, Rules of the Auditor General and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County’s basic financial statements. The introduction section and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has 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.

 March 6, 2013

1302-1032546

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A member firm of Ernst & Young Global Limited

MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) As Clerk of the Circuit Court and chief financial officer of Collier County, Florida, I present the readers of the County’s financial statements this narrative overview and analysis of the financial activities of Collier County for the fiscal year ended September 30, 2012. Readers are encouraged to consider the information presented in this narrative in conjunction with additional information offered in the letter of transmittal, found on pages i-v of this report.

Financial Highlights

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Collier County’s assets exceeded its liabilities as of September 30, 2012 by $2,440,691,675. Of this amount, $341,576,935 represents unrestricted net assets and may be used to meet future obligations.

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The County’s total net assets increased by $7,795,895 when compared to fiscal year 2011, with a $11,758,436 decrease from governmental activities and a $19,554,331 increase resulting from business-type activities.

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As of September 30, 2012 Collier County’s governmental fund financial statements showed combined ending fund balances of $359,651,868, a decrease of $25,014,959 over the previous fiscal year. Of the total combined ending fund balance, $8,146,280 remains in the various governmental funds of Collier County as unassigned. Negative unassigned balances in various capital project funds offset the General Fund’s unassigned fund balance.

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The General Fund reported an unassigned fund balance of $57,090,349 at September 30, 2012, an increase in unassigned General Fund balance of $2,631,687 when compared to September 30, 2011.

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Total face value of bonded debt, notes and outstanding loans owed by Collier County decreased by $49,662,751 during fiscal year 2012, with a decrease in governmental activities debt of $37,394,117 and a decrease in the net business-type activities debt of $12,268,634. In January of 2012 portions of the outstanding Series 2003 and 2005 Capital Improvement Revenue Bonds were refinanced by the Series 2011 Special Obligation Revenue Bonds. In June of 2012 a portion of the Series 2003 Gas Tax Revenue Bonds were refinanced by the Series 2012 Gas Tax Refunding Bonds.

Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction and explanation of Collier County’s basic financial statements. Collier County’s basic financial statements include government-wide and fund financial statements, as well as notes to the basic financial statements. This report also contains a statistical section, single audit and other supplementary information in addition to the basic financial statements.

Government-Wide Financial Statements Government-wide financial statements are designed to provide the reader an overview of the financial position of the County and are similar to private sector financial statements. These statements are comprised of a Statement of Net Assets and a Statement of Activities and are found on pages 16 to 19 of this report. 3

The Statement of Net Assets shows the financial position of Collier County as of September 30, 2012. The statement shows the County’s assets less its liabilities, with the difference being reported as net assets. Changes in net assets are useful indicators of financial condition. The Statement of Activities follows the statement of net assets and reports the changes in net assets over the fiscal period. All changes in net assets are reported as soon as the underlying events that gave rise to the change occur, regardless of the timing of the related cash flows. Thus, revenues and expenses are reported for some items, such as accounts receivable, notes receivable or accrued unused vacation and sick leave, that will manifest themselves in cash inflows and outflows, respectively, in future fiscal periods. These statements distinguish Collier County functions that are supported by taxes and intergovernmental revenues (governmental activities), from business-type activities, which are intended to have their costs primarily recovered through user fees and charges. Governmental activities reported in the financial statements are general government, public safety, physical environment, transportation, economic environment, human services and culture and recreation. Business-type activities in Collier County include water and sewer, solid waste collections, airport operations, transit operations and emergency medical services.

Fund Financial Statements A fund is a group of related accounts used to maintain control over resources that have been segregated to meet specific objectives. As dictated by generally accepted accounting principles, Collier County uses fund accounting to ensure and demonstrate compliance with financial legal requirements. The funds of the County can be divided into the following three categories: governmental, proprietary and fiduciary. Governmental funds Governmental funds, presented on pages 20 to 26, account for substantially the same functions as governmental activities reported under the government-wide Statement of Net Assets and Statement of Activities. The difference is that the governmental fund financial statements focus on inflows and outflows of expendable resources, as well as balances of expendable resources available at the end of the fiscal year, on a near term basis. As such, these statements present a narrower view of financial condition, but are nonetheless useful in evaluating Collier County’s near term financing requirements and available resources. Comparison between the two sets of financial statements allows the reader to better assess the future impact of the government’s near term financial decisions. Both the governmental fund balance sheet and the statement of revenues, expenditures and changes in fund balances provide a reconciliation to the respective government-wide financial statements to facilitate comparison. Governmental funds presented individually in Collier County’s statements include two major funds, the General Fund and the Government Facilities Impact Fee Fund. While there are many smaller governmental funds under Collier County management, they are aggregated in a total column named “other governmental funds”. Combining statements for these other governmental funds have been presented elsewhere in this report.

4

Proprietary funds

Government-Wide Financial Analysis

Collier County maintains two different types of proprietary funds, enterprise and internal service, which are reflected on pages 27 to 31 of this report.

As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position. Assets exceeded liabilities by $2,440,691,675 as of the fiscal year ending September 30, 2012 for Collier County.

Enterprise funds report, with more detail, the same functions presented as business-type activities in the government-wide financial statements for water and sewer, Goodland water, solid waste disposal, emergency medical services, transit and the airport authority. The Collier County Water and Sewer District Fund and the Solid Waste Disposal Fund are presented individually as major funds. Internal service funds are maintained to allocate and accumulate costs internally for Collier County. The County uses internal service funds to account for health insurance, worker’s compensation insurance, property and casualty insurance, fleet operations and information technology. The internal service funds are presented in total in the proprietary fund financial statements, but may be viewed on a combining basis elsewhere in the report. Fiduciary funds

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Fiduciary funds are used to account for resources held for the benefit of parties outside of Collier County government. These funds are not presented in the government-wide financial statements as they do not represent resources available to support Collier County functions. The fiduciary funds are presented on page 32 of this report. All of the County’s fiduciary funds are agency funds. The accounting used for agency funds is based on the concept that assets equal liabilities when the government is acting in a fiduciary capacity.

Positive balances were reported in all categories of net assets in the governmental and business-type activities for fiscal year 2012, as well as fiscal year 2011. Collier County’s net assets at September 30, 2012 increased by $16,557,669 for unrestricted net assets and decreased $30,845,399 for restricted net assets. Restricted net assets are resources subject to external restriction on how they may be used while unrestricted net assets may be used to meet the County’s ongoing obligations. The decrease over fiscal year 2012 is mainly due to spend down of net assets restricted to transportation capital improvements. Collier County’s investment in capital assets such as land, roads, buildings, parks and machinery and equipment, net of depreciation or any outstanding debt related to the asset, amounts to 75.0% of net assets as of September 30, 2012, compared to 74.6% as of September 30, 2011. The County’s investment in capital assets, net of depreciation and related debt, increased by $22,083,625, when compared to fiscal year 2011. Capital assets are used to provide services to the citizens and consequently do not represent spendable resources and cannot be used to liquidate the debt incurred to purchase or construct the capital assets. Following are Collier County’s net assets and changes in net assets for the fiscal years ended September 30, 2011 and 2012, shown in condensed form:

Notes to the Financial Statements Collier County's Schedule of Net Assets (in millions)

The notes provide additional information essential to a full understanding of the data provided in both the government-wide and fund financial statements. The notes appear on pages 34 to 74 of this report.

Governmental Activities

Other Information The combining and individual nonmajor fund financial statements and schedules mentioned above present more detailed views of nonmajor governmental and enterprise funds and begin on page 80. This section contains combining balance sheets and statements of revenues, expenditures and changes in fund balance for governmental funds, including budgetary comparisons, and combining statements of net assets and statements of revenues, expenses and changes in fund net assets for enterprise funds. Also included are combining financial statements for internal service and agency funds. Additional information about the County, which may be of interest to the reader, can be found under the Statistical and Single Audit sections of this report. The statistical section has been prepared in accordance with Governmental Accounting Standards Board Statement No. 44, Economic Condition Reporting: The Statistical Section. This section contains data regarding financial trends, revenue capacity, debt capacity, demographic and economic conditions and operating indicators of the County. The Single Audit grants compliance section lists the expenditures of Federal Awards and State Financial Assistance during the fiscal year and presents grant compliance information as well as auditor reports.

2012 Current and other assets

2012 $

713.5

2011 $

712.8

2011-2012

477.2

$ 247.4

$ 235.6

882.3

887.7

2,480.8

2,507.5

(1.1%)

2,064.6

2,097.0

1,129.7

1,123.3

3,194.3

3,220.3

(0.8%)

Long-term liabilities

402.9

436.6

222.3

233.9

625.2

670.5

(6.8%)

Current liabilities

100.3

87.2

28.1

29.7

128.4

116.9

9.8%

Total liabilities

503.2

523.8

250.4

263.6

753.6

787.4

(4.3%)

0.1%

1,187.3

1,172.1

650.7

643.8

1,838.0

1,815.9

226.9

254.0

34.2

37.9

261.1

291.9

(10.6%)

Net assets: Invested in capital assets, net of related debt Restricted Unrestricted Total net assets

5

$

2011

1,619.8

Total assets

466.1

2012

Total Percentage Change

Total

1,598.5

Capital assets, net

$

2011

Business-type Activities

1.2%

147.2

147.1

194.4

178.0

341.6

325.1

5.1%

$ 1,561.4

$ 1,573.2

$ 879.3

$ 859.7

$ 2,440.7

$2,432.9

0.3%

6

Collier County's Schedule of Changes in Net Assets (in millions) Governmental Activities 2012

Business-type Activities

2011

2012

2011

Total Percentage Change

Total 2012

2011

Expenses and revenues, in the form of fees, fines, grants and contributions, for governmental activities are shown graphically by function. General revenues, such as property tax, must be used to the extent that the fee, fines, grants and contributions do not cover the cost of the governmental function. Public Safety is the largest category of expenditures followed by general government.

Revenues and Expenses Governmental Activities Fiscal Year 2012

2011-2012

Revenues Program revenues: 61.6

$151.7

$152.9

214.5

0.1%

180

Operating grants and contributions

22.9

19.5

3.0

4.4

25.9

23.9

8.4%

160

Capital grants and contributions

20.3

19.4

17.8

14.3

38.1

33.7

13.1%

248.2

261.6

-

-

248.2

261.6

(5.1%)

81.3

78.9

-

-

81.3

78.9

3.0%

Interest income

2.4

3.9

1.1

1.6

3.5

5.5

(36.4%)

40

Miscellaneous

7.4

11.5

0.1

0.1

7.5

11.6

(35.3%)

20

Total revenues

445.6

456.4

173.7

173.3

619.3

629.7

(1.7%)

-

Charges for services

$

63.1

$

$

214.8

$

140 120

Property taxes Other taxes and shared revenues

Millions

General revenues:

100 80 60

Expenses General government

94.2

103.0

-

-

94.2

103.0

(8.5%)

165.8

173.3

-

-

165.8

173.3

(4.3%)

Physical environment

24.6

18.3

-

-

24.6

18.3

34.4%

Transportation

73.0

81.4

-

-

73.0

81.4

(10.3%)

Economic environment

14.4

7.8

-

-

14.4

7.8

Human services

12.1

13.9

-

-

12.1

13.9

Culture and recreation

42.5

44.2

-

-

42.5

44.2

(3.8%)

Interest on long-term debt

16.4

19.8

-

-

16.4

19.8

(17.2%)

Public safety

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84.6% (12.9%)

Water and sewer

-

-

102.6

104.3

102.6

104.3

(1.6%)

Solid waste

-

-

29.6

28.0

29.6

28.0

5.7%

Airport authority

-

-

4.6

4.5

4.6

4.5

Mass transit

-

-

9.9

10.2

9.9

10.2

Emergency medical services Total expenses

443.0

461.7

2.2%

21.8

22.7

21.8

22.7

(4.0%)

168.5

169.7

611.5

631.4

(3.2%)

2.6

(5.3)

5.2

3.6

7.8

(1.7)

Transfers, net

(14.4)

(13.1)

14.4

13.1

-

-

-

Change in net assets

(11.8)

(18.4)

19.6

16.7

7.8

(1.7)

(558.8%)

Net assets – beginning Net assets – ending

(558.8%)

1,573.2

1,591.6

859.7

843.0

2,432.9

2,434.6

(0.1%)

$ 1,561.4

$1,573.2

$879.3

$859.7

$ 2,440.7

$2,432.9

0.3%

Expenses

Revenue by Type Governmental Activities Fiscal Year 2012

(2.9%)

Increase (decrease) in net assets before net transfers

Revenues

Revenues for governmental activities are shown graphically by type. The largest type of revenue for governmental activities is property taxes followed by fines, fees and charges for services.

Tourist Taxes 3%

Sales Taxes 7% Gas Taxes 4%

Other Income 6%

Capital Grants and Contributions 5%

Property Taxes 56%

Operating Grants and Contributions 5% Fines, Fees and Charges for Services 14%

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8

Revenues and expenses are shown by business-type activity. The Water and Sewer system is the largest business-type activity followed by the Solid Waste system.

Governmental Activities The current year decrease in the net assets of governmental activities amounted to $11,758,436, a decrease of .1% when compared to the previous year’s net assets. The previous fiscal years’ decrease was 1.2% and this trend is the result of a continued decline in overall governmental activities expenses.

Revenues and Expenses Business-type Activities Fiscal Year 2012 140

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Overall, revenues related to governmental activities decreased by 2.4%, or $10,794,090 and expenses decreased by 4.1%, or $18,721,788.

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Total ad valorem taxes collected in fiscal year 2012 were down $13,398,390, or 5.1%, when compared to fiscal year 2011. The decrease in collections is primarily due to a 5.1% reduction in countywide taxable property values.

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Decreases in expenses occurred in most areas of governmental activity in fiscal year 2012, with the exceptions being physical environment and economic environment. Expenses for physical environment increased mainly due to the Federal Emergency Management Agency’s deobligation of $11,172,273 in Hurricane Wilma related beach erosion repair costs previously reimbursed by the Agency. Expenses for economic environment activities increased by $6,532,968 largely due to expenses related to Disaster Recovery Initiative III projects in Immokalee, Bayshore and Collier County Public Schools.

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Interest expense decreased by 17.1% when compared to fiscal year 2011, primarily due to interest savings from the refinancing of various Capital Improvement Series bonds by the Special Obligation Bonds, Series 2010 and 2011.

120

Millions

100 80 60 40 20 Water and Sewer

Solid Waste

Airport Authority

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Revenues

Mass Transit

Emergency Medical Services

Expenses

Revenues for business-type activities are shown graphically by type. The largest type of revenue is fines, fees and charges for services followed by capital grants and contributions.

Business-type Activities Increases in net assets related to business-type activities amounted to $19,554,331 in the aggregate, representing a 2.3% increase over the previous year’s net assets.

Revenue by Type Business-type Activities Fiscal Year 2012

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The majority of the increase, or $10,834,979, can be attributed to the Collier County Water and Sewer District (District). Total operating revenues, including water, wastewater and reuse irrigation user fees decreased by $2,768,611, or 2.6%, over the previous fiscal year primarily due to decreased usage of potable water for irrigation. The District’s total fiscal year 2012 operating expenses, including personal services and depreciation, decreased by 2.2% compared to fiscal year 2011. The primary reason for this decrease was less spending on contracted services related to maintenance.

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Fiscal year 2012 water and wastewater impact fee collections were $8,731,883, an increase of 17.8% over fiscal 2011. The District charges water and wastewater impact fees on new construction in order to finance growth necessitated capital expansion.

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Solid waste operating revenues increased by 1.5% from fiscal year 2011 while operating costs, including depreciation, increased by 5.1% over the same period. The increase in solid waste operating revenues can be mainly attributed to an 18.8% increase in construction and demolition waste being accepted into the Naples landfill during fiscal year 2012. Operating costs increased primarily due to maintenance costs associated with the Collier County Landfill. These factors contributed to an increase in solid waste net assets year on year of $2,922,065.

Capital Grants and Contributions 10% Operating Grants and Contributions 2% Other Income 1%

Fines, Fees and Charges for Services 87%

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Fund Financial Statement Analysis As mentioned above, Collier County utilizes fund accounting to ensure compliance with finance related legal requirements.

For the year ended September 30, 2012 the Water and Sewer District reported capital grants and contributions of $11,272,319, which includes system development fees of $8,731,883, $2,529,018 in developer infrastructure contributions and other contributions of $11,418. Net Operating Income/(Loss)

Governmental Funds

2012

Governmental funds provide information on near term inflows, outflows and balances of spendable resources. Unassigned fund balance is a useful measure of net resources available to be spent at the end of the fiscal year. Governmental funds consist of the General Fund, Special Revenue Funds, Debt Service Funds and Capital Project Funds. As of September 30, 2012 Collier County governmental funds reported combined fund balances of $359,651,868 a decrease of $25,014,959 when compared to prior year combined fund balances. The governmental funds had non-spendable fund balances of $12,914,017 consisting of inventory, prepaid items and General Fund advances to other funds. The restricted fund balance was $209,461,702 and consists of monies whose expenditure is externally constrained by grantors, creditors, binding law or enabling legislation. Of the remaining $137,276,149 in fund balance, $47,405,806 is classified as committed, $81,724,063 is recorded as assigned and $8,146,280 is recorded as unassigned. The following were noteworthy activities and changes relating to the major governmental funds for fiscal year 2012:

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The General Fund is the primary operating fund of Collier County. At September 30, 2012, total fund balance in the General Fund was $71,066,638, of which $57,090,349 was unassigned. As a percentage of total general fund expenditures and net transfers, the unassigned portion is 22.2%. The total fund balance increased by $3,688,661 or 5.5%, compared to the September 30, 2011 total fund balance. The increase in total fund balance was primarily the result of a decrease in General Fund expenditures and net transfers of 6.2% when compared to fiscal year 2011. The main components of the decrease were a 4.9% decrease in Sheriff’s personal services and an $8.5M decrease in General Fund transfers to the Countywide Capital Improvement Fund. The Government Facilities Impact Fee Fund accounts for the receipt and expenditure of government facilities impact fees collected from qualifying new construction. The impact fees must be used for the acquisition or construction of growth related capital government facilities. During fiscal year 2012 the Government Facilities Impact Fee Fund spent $7,289 on the Property Appraiser’s Radio Road location, $6,708 on the Emergency Services Center and $46,007 on the Courthouse Annex. In addition, the fund made debt service related transfers of $4,591,701, paid $3,855 in administrative charges as well as $19,043 of interest on an interfund advance from the Solid Waste Disposal Fund.

Proprietary funds Proprietary fund statements provide the same information as the business-type activities in the government-wide financial statements, but in greater detail, and on a fund basis for enterprise funds.

$

10,508,829 4,924,135 (21,683,842)

$

11,200,354 5,834,741 (23,765,216)

Total

$

(6,250,878)

$

(6,730,121)

The Collier County Water and Sewer Fund net operating income decreased by $691,525, when compared to fiscal year 2011. The decrease in net operating income was the result of a decrease in total operating revenues of 2.6%. The reason for this was the decline in the use of less potable water for irrigation purposes. County Water and Sewer payments in lieu of taxes paid to the General Fund of $3,786,500 were reclassified from operating expense to operating transfers for financial statement purposes. Total operating expenses, including depreciation, decreased by $2,077,086 when compared to fiscal year 2011.

Capital Assets Collier County’s financial statements present capital assets in two distinct groups, those that are depreciated and those not subject to depreciation. Buildings and equipment are examples of assets that are depreciated and land and construction in progress are examples of assets not depreciated. Collier County’s investment in capital assets for the governmental and business-type activities amounted to $2,480,791,670, net of accumulated depreciation. This investment in capital assets, both purchased and donated, includes land, buildings and improvements, water and wastewater plants, machinery and equipment, parks, roads, beach renourishment and drainage structures. Investment in capital assets for the current fiscal year, net of depreciation, decreased by $26,724,625 when compared to the previous year. There was a decrease in the governmental activities net capital assets of $21,330,441, or 1.3%. The proprietary fund capital assets decreased by $5,394,184, or .6% as in both the governmental and business-type activities, amounts depreciated exceeded amounts capitalized. The major factors behind these changes are as follows: ƒ

The business-type activities capitalized $25,307,886 of work in process during fiscal year 2012 including $1,266,286 for North County Water Reclamation Facility Upgrades, $2,543,454 for the Marco Airport Taxiway and $2,840,565 for a joint utilities project with the Florida Department of Transportation for improvements to Davis Boulevard. In addition, mass transit costs of $977,103 related to the construction of an Intermodal Transfer Facility and $621,910 of solid waste costs for roadway hardening were capitalized as work in progress. The remaining $16,895,387 was made up of $14,767,667 in other County Water and Sewer projects, $388,731 in other Airport projects, $1,091,756 in other Solid Waste projects and $647,233 in Mass Transit.

At September 30, 2012, total net assets amounted to $879,272,454 for enterprise funds, as compared to $859,718,123 as of September 30, 2011, an increase of $19.6 million. Net assets change as a result of operations, non-operating revenues and expenses, capital contributions and grants and donations. The Collier County Water and Sewer District’s activities represent the majority of the increase in the business-type net assets. 11

2011

County Water and Sewer Solid Waste Disposal Non-major enterprise funds

12

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Capitalization of construction in progress of $38,993,555 for governmental activity related costs including $12,100,184 for Oil Well Road construction and safety improvements, $6,297,274 for improvements to Collier Boulevard, $5,801,580 in improvements to Davis Boulevard and $2,598,256 for Immokalee stormwater improvements. In addition, $1,469,523 was spent for bridge and other structure design and replacement. The remaining $10,726,738 related to $3,168,625 in other transportation projects, $2,727,199 in culture and recreation projects and $4,830,914 in other capital projects. Total purchases of land and non-depreciable assets were $2,181,201 for fiscal year 2012, compared to $4,764,182 for fiscal year 2011.

Additional information regarding Collier County’s capital assets can be found in Note 5 beginning on page 48 of this report.

On January 24, 2012 Collier County prepaid the outstanding State Infrastructure Bank loan in the amount of $4,414,096, plus accrued interest. The Constitution of the State of Florida, Florida Statute 200.181 and Collier County set no legal debt limit. Further information regarding Collier County’s long-term debt can be found in Note 6 beginning on page 49 of this report.

General Fund Budgetary Highlights During the current fiscal year, the Board of County Commissioners approved a $1,758,168 increase in appropriations between the original and the final amended budget. Significant budgetary variances between the final amended budget and actual results are listed below:

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$547,800 increase in Clerk’s agency for data processing equipment

Debt Administration

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$676,063 decrease in the Tax Collector’s agency to reduce budget to actual expenditures.

At September 30, 2012, Collier County had total bonded debt, notes and loans, net of premiums, discounts and deferred losses of $642,223,884, a decrease of $48,738,587 from the previous year. The following table illustrates the balances of all outstanding long-term debt for the fiscal years ended September 30, 2012 and 2011:

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$275,166 increase in the County Attorney due to re-budgeting of lapsed appropriates from the previous fiscal year.

ƒ

$587,100 increase in Other General Administration due to re-budgeting of lapsed appropriations from the previous fiscal year.

ƒ

$675,424 decrease in Facilities Management operating due to revised revenue forecasts.

ƒ

$1,543,000 increase in Sheriff’s agency related to special detail duties.

ƒ

$279,800 decrease in Beach/Water Park Operations due to revised revenue forecasts.

Outstanding Debt 2012 Limited General Obligation Bonds, net Revenue Bonds, net State Revolving Fund Loans Miscellaneous Notes Total

$

9,993,882

2011 $

14,683,976

530,106,136

559,847,386

92,368,676

105,775,919

9,755,190 $ 642,223,884

10,655,190 $ 690,962,471

On January 9, 2012 Collier County issued the Series 2011 Special Obligation Refunding Revenue Bonds in the par amount of $92,295,000. These bonds were issued for the purpose of advance refunding portions of the County’s outstanding Capital Improvement Revenue Refunding Bonds, Series 2003 and 2005. The refinancing of the Series 2003 and 2005 Bonds, and their attendant restrictive covenants, caused the required cash reserve surety replacement relating to the 2003 and 2005 bonds to further decrease from $15,717,300 to $10,401,508, or a $5,315,792 release of internally borrowed funds.

Significant variances between actual results and final budget amounts in the General Fund occurred during fiscal year 2012. Tax revenues were under budget by $8,684,062 primarily due to the early payment discount allowed for property taxes. The discount ranges from a maximum 4% to 1%, depending on the date of payment. General Fund general government expenditures were under budget primarily due to $850,790 in unspent budget related goods and services contracted for in 2012 that had not been received as of September 30, 2012 as well as an effort to reduce spending in all departments. Sheriff’s public safety expenditures were a combined $4,074,556 less than anticipated for fiscal year 2012. Economic Factors and Year 2013 Budgets and Rates

On June 5, 2012 Collier County issued the Series 2012 Gas Tax Refunding Revenue Bonds in the par amount of $38,680,000. These bonds were issued for the purpose of advance refunding a portion of the County’s outstanding Series 2003 Gas Tax Revenue Bonds.

13

The following factors were taken into account in preparing the fiscal year 2013 budget: ƒ

A .68% increase in countywide taxable property values.

ƒ

Millage neutral General Fund and Unincorporated Area General Fund tax rates.

ƒ

Expected year on year increases in sales tax and state shared revenues of 5.6% and .7%, respectively. 14

ƒ

No new fees or service charges to County residents.

ƒ

Continuation of Board Agency exception basis hiring freeze within ad valorem funded operations and enterprise operations.

ƒ

Maintain health care program contributions at 80% employer and 20% employee across all agencies (Non-Sheriff).

During fiscal year 2012, the General Fund unassigned fund balance increased by $2,631,687 to $57,090,349. As of January 24, 2013, $44,793,200 of the fiscal year 2012 unassigned fund balance has been appropriated as carryforward for fiscal year 2013, with $24,529,400 budgeted in reserves. Contact Information This financial report is intended to give the user a general overview of Collier County Government’s finances. Any questions resulting from review of this information may be addressed to: Collier County Clerk of the Circuit Court Department of Finance and Accounting 3299 Tamiami Trail East, Suite #403 Naples, Florida 34112-5746

C-8

Our office may also be contacted via the internet at www.collierclerk.com.

15

THIS PAGE INTENTIONALLY LEFT BLANK

COLLIER COUNTY, FLORIDA STATEMENT OF NET ASSETS SEPTEMBER 30, 2012

Governmental Activities

Primary Government Business-type Activities

Total

Component Units

ASSETS Current assets: Cash, cash equivalents and investments Trade receivables, net Special assessments receivable Interest receivable Unbilled receivables Due from other governments Internal balances Deposits Inventory for resale Inventory Prepaid costs Restricted assets: Cash, cash equivalents and investments Trade receivables, net Notes receivable Interest receivable Due from other governments Inventory for resale Total current assets

C-9

Noncurrent assets: Restricted assets: Cash, cash equivalents and investments Notes receivable Special assessments receivable Notes receivable Deferred charges Capital assets: Land and non-depreciable capital assets Depreciable capital assets, net Total noncurrent assets Total assets

Governmental Activities

Primary Government Business-type Activities

Total

Component Units

LIABILITIES $ 207,566,908 1,107,536 153,569 4,412,736 (12,754,599) 318,220 245,951 1,236,286 20,995

$ 171,907,384 9,601,303 65,174 286,024 5,155,031 363,668 12,754,599 4,288,166 19,832

$ 379,474,292 10,708,839 65,174 439,593 5,155,031 4,776,404 318,220 245,951 5,524,452 40,827

$

326,518 -

31,500,791 1,185,344 25,161 191,321 13,018,398 15,913,817

3,099,672 4,753,457 -

34,600,463 1,185,344 25,161 191,321 17,771,855 15,913,817

-

264,142,434

212,294,310

476,436,744

326,518

189,305,924 7,294,204 26,394 1,688,515 3,668,176

34,030,309 6,375 1,105,344

223,336,233 7,294,204 32,769 1,688,515 4,773,520

-

498,088,283 1,100,423,805

87,166,627 795,112,955

585,254,910 1,895,536,760

1,800,495,301

917,421,610

2,717,916,911

-

2,064,637,735

1,129,715,920

3,194,353,655

326,518

Current liabilities: Accounts payable Wages payable Retainage payable Due to other governments Due to individuals Self-insurance claims payable Compensated absences Capital lease obligations Unearned revenue Interest payable Bonds and loans payable Liabilities payable from restricted assets: Accounts payable Wages payable Retainage payable Refundable deposits Notes payable Due to other governments Unearned revenue Bonds and loans payable Total current liabilities

$

8,583,500 675,338 385,027 92,012 1,258,986 1,801,955 134,914 2,322,378 9,152,712

$

19,915,741 5,564,400 647,800 4,060,287 1,536,410 5,888,564 12,618,624 223,697 606,620 9,287,075 32,835,011

$

-

855,422 67,037 50,389 69,190 188,453 2,492,562 28,129,875

9,512,393 112,942 3,362,352 5,530,493 69,190 11,305,173 2,838,739 2,492,562 128,408,073

-

Noncurrent liabilities: Self-insurance claims payable Compensated absences Capital lease obligations Landfill post-closure liability Net OPEB obligation Bonds and loans payable, net

1,512,212 12,286,483 322,859 1,698,208 387,120,554

772,265 39,651 1,795,108 219,706,567

1,512,212 13,058,748 362,510 1,795,108 1,698,208 606,827,121

-

Total noncurrent liabilities

402,940,316

222,313,591

625,253,907

-

503,218,514

250,443,466

753,661,980

-

1,187,297,593

650,683,986

1,837,981,579

-

74,389,900 36,667,191 33,263,428 28,859,178 14,055,535 14,898,048 5,214,850 19,586,040 147,187,458

21,314,836 12,584,155 300,000 194,389,477

95,704,736 36,667,191 33,263,428 28,859,178 14,055,535 14,898,048 17,799,005 19,586,040 300,000 341,576,935

326,518

$ 1,561,419,221

$ 879,272,454

$ 2,440,691,675

Total liabilities NET ASSETS

Total net assets

16

11,332,241 4,889,062 262,773 3,968,275 277,424 5,888,564 10,816,669 88,783 606,620 6,964,697 23,682,299 8,656,971 112,942 3,295,315 5,480,104 11,305,173 2,650,286 100,278,198

Invested in capital assets, net of related debt Restricted for: Growth related capital expansion Transportation capital projects Tourist development Conservation Collier Community redevelopment Grants Debt service Other Renewal and replacement Unrestricted

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

$

17

$

326,518

COLLIER COUNTY, FLORIDA STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012 Net (Expense) Revenue and Changes in Net Assets

Program Revenues

FUNCTIONS/PROGRAMS Primary Government: Governmental Activities: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Interest and fiscal charges

Expenses

$

Total governmental activities Business-type Activities: Water and sewer Solid waste Airport authority Mass transit Emergency medical services Total business-type activities Total primary government

C-10

Component Units: Industrial Development Authority Housing Finance Authority Educational Facilities Authority Total component units

Fees, Fines and Charges for Services

94,227,594 165,781,602 24,593,366 73,000,040 14,319,738 12,144,081 42,506,595 16,411,860

$

31,387,795 16,742,617 1,003,250 880,276 3,396,958 541,297 9,125,363 -

Operating Grants and Contributions

$

Capital Grants and Contributions

2,625,902 2,134,108 867,481 5,829,476 8,899,106 2,159,517 376,371 -

$

Governmental Activities

1,113,607 2,013,415 2,128,333 10,803,109 8,620 4,211,773 -

442,984,876

63,077,556

22,891,961

20,278,857

102,642,521 29,618,250 4,600,792 9,924,750 21,791,677

103,042,334 34,275,076 2,804,419 1,360,341 10,248,981

250,000 18,400 2,591,039 88,966

11,267,697 2,772,737 3,777,739 -

168,577,990

151,731,151

2,948,405

17,818,173

$

611,562,866

$

214,808,707

$

25,840,366

$

38,097,030

$

15 692 46

$

17,500 -

$

-

$

-

$

753

$

17,500

$

-

$

-

General revenues: Property taxes Gas taxes Sales taxes Tourist taxes Communications services tax State revenue sharing Other taxes Interest income Miscellaneous Transfers, net Total general revenues and transfers Change in net assets Net assets - beginning Net assets - ending

$

Primary Government Business-type Activities

(59,100,290) $ (144,891,462) (20,594,302) (55,487,179) (2,023,674) (9,434,647) (28,793,088) (16,411,860)

-

(336,736,502)

-

-

11,917,510 4,675,226 976,364 (2,195,631) (11,453,730)

-

3,919,739

(336,736,502)

3,919,739

Total

$

Component Units

(59,100,290) $ (144,891,462) (20,594,302) (55,487,179) (2,023,674) (9,434,647) (28,793,088) (16,411,860)

-

-

(336,736,502)

-

11,917,510 4,675,226 976,364 (2,195,631) (11,453,730)

-

3,919,739

-

(332,816,763)

$

17,485 (692) (46) 16,747

248,232,008 18,524,878 29,712,986 14,898,077 5,346,777 8,233,378 4,649,794 2,430,120 7,396,815 (14,446,767) 324,978,066 (11,758,436) 1,573,177,657 $ 1,561,419,221

1,106,007 81,818 14,446,767 15,634,592 19,554,331

248,232,008 18,524,878 29,712,986 14,898,077 5,346,777 8,233,378 4,649,794 3,536,127 7,478,633 340,612,658 7,795,895

859,718,123 $ 879,272,454

2,432,895,780 $ 2,440,691,675

144 144 16,891 $

309,627 326,518

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

18

19

COLLIER COUNTY, FLORIDA BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2012

COLLIER COUNTY, FLORIDA RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS SEPTEMBER 30, 2012

General Fund

Government Facilities Impact Fee

Other Governmental Funds

Total Governmental Funds

$ 68,825,802

$ 3,244,096

$ 312,721,527

$ 384,791,425

45,830 417,410 1,688,515 4,388,457 3,133,515 4,628 166,097 12,726,925 20,995 $ 91,418,174

3,596 3,009 235,407 12,775 $ 3,498,883

269,286 1,734,840 7,083,958 26,394 4,904,112 14,244,557 16,159,768 201,646 42,036,500 $ 399,382,588

318,712 2,155,259 9,007,880 26,394 9,292,569 17,390,847 4,628 16,159,768 367,743 54,763,425 20,995 $ 494,299,645

Differences in amounts reported for governmental activities in the statement of net assets on pages 14-15:

ASSETS Cash, cash equivalents and investments Receivables: Interest Trade, net Notes Special assessments Due from other funds Due from other governments Deposits Inventory for resale Inventory Advances to other funds Prepaid costs Total assets

Fund balances - total governmental funds

$ 359,651,868

Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. Those assets consist of: Land and other non-depreciable assets Construction in progress Depreciable assets, net of $620,913,482 in accumulated depreciation

$ 386,540,604 111,547,679 1,081,032,227

1,579,120,510

Certain long-term assets are not financial resources and therefore are not reported in the governmental funds.

3,668,176

Certain revenues will be collected after year-end, but are not available to pay for the current period's expenditures, and therefore are reported as deferred revenue in the funds.

7,259,047

LIABILITIES AND FUND BALANCES

C-11

Liabilities: Accounts payable Wages payable Due to other funds Due to other governments Due to individuals Deferred revenue Refundable deposits Retainage payable Advances from other funds Total liabilities Fund balances (deficit): Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities and fund balances (deficit)

$ 6,468,342 4,198,942 1,150,808 2,607,919 277,007 249,114 5,399,404 20,351,536

12,914,017 109,802 952,470 57,090,349 71,066,638 $ 91,418,174

$

33,726 235,407 22,992,791 23,261,924

(19,763,041) (19,763,041) $ 3,498,883

$

12,481,208 703,294 6,590,520 11,979,125 417 10,031,432 80,700 3,558,088 45,609,533

$ 18,983,276 4,902,236 7,741,328 14,587,044 277,424 10,515,953 5,480,104 3,558,088 68,602,324

91,034,317

134,647,777

209,351,900 47,405,806 80,771,593 (29,181,028) 308,348,271 $ 399,382,588

12,914,017 209,461,702 47,405,806 81,724,063 8,146,280 359,651,868 $ 494,299,645

Certain liabilities applicable to the County's governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities. Interest on long-term debt is not accrued in the governmental funds, but is recognized as an expenditure when due. All liabilities are reported in the statement of net assets. Balances at September 30, 2012 are: Installment payment program to State of Florida Accrued interest on bonds Bonds and notes payable Capital lease obligations Compensated absences Unamortized deferred loss Unamortized premium Unamortized discount Internal service funds are used by the County to charge self-insurance, fleet management and information technology services to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net assets. Internal service fund net assets are: Total net assets - governmental activities

20

(686,404) (6,964,697) (395,839,427) (411,642) (22,626,409) 10,888,204 (25,909,714) 58,084

(441,492,005)

53,211,625 $ 1,561,419,221

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

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

$

21

COLLIER COUNTY, FLORIDA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012

General Fund Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous Total revenues

C-12

Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service: Principal Interest Fiscal charges Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refunding bond escrow Capital leases Sale of capital assets Insurance proceeds Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficit) at beginning of year Fund balances (deficit) at end of year

$ 199,156,838 301,410 41,058,174 17,603,057 1,302,691 577,361 1,294,549 261,294,080

Government Facilities Impact Fee

Other Governmental Funds

Total Governmental Funds

$

$ 84,966,668 28,953,158 38,344,330 13,136,110 2,901,833 1,600,198 3,034,899 3,369,368 176,306,564

$ 284,123,506 30,436,418 79,402,504 30,739,167 4,204,524 2,197,255 3,034,899 4,663,917 438,802,190

1,181,850 19,696 1,201,546

51,894,964 131,436,468 680,098 972,612 8,597,484 15,527,909

57,151 6,708 -

21,859,432 20,414,271 22,190,228 42,176,460 13,420,243 2,390,773 18,725,014

73,811,547 151,857,447 22,870,326 42,176,460 14,392,855 10,988,257 34,252,923

3,644,806

19,043 -

31,602,123 18,129,824 1,081,579 45,761,565

31,602,123 18,148,867 1,081,579 49,406,371

212,754,341

82,902

237,751,512

450,588,755

48,539,739

1,118,644

(61,444,948)

(11,786,565)

225,279 20,587 8,532,931 (53,629,875) (44,851,078)

(4,591,701) (4,591,701)

131,525,000 17,191,707 (150,550,385) 235,588 87,982 249,243 82,991,539 (45,516,289) 36,214,385

131,525,000 17,191,707 (150,550,385) 235,588 313,261 269,830 91,524,470 (103,737,865) (13,228,394)

(3,473,057) (16,289,984) $ (19,763,041)

(25,230,563) 333,578,834 $ 308,348,271

(25,014,959) 384,666,827 $ 359,651,868

3,688,661 67,377,977 $ 71,066,638

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

COLLIER COUNTY, FLORIDA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012

Differences in amounts reported for governmental activities in the statement of activities on pages 16-17:

Net change in fund balances - total governmental funds

$

Capital outlay Depreciation expense

$

49,406,371 (66,248,247)

(16,841,876)

Donations of capital assets are not financial resources to governmental funds, but receiving donated assets increases net assets in the statement of net assets.

800,527

Capital assets transferred to and from proprietary funds are not recorded in the governmental funds as there is no flow of current financial resources. In the statement of activities, the loss on the sale of capital assets is reported. However, in the governmental funds the proceeds from the sale of capital assets increase financial resources. The change in net assets differs from the change in fund balance by the net book value of assets disposed.

(1,668,754)

(1,757,417)

Certain revenues not considered available are not recognized in the governmental funds but are included in the statement of activities.

(3,500,175)

Debt proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net assets. Proceeds from loans Proceeds from capital leases Repayment of principal on long-term debt is an expenditure in governmental funds, but a reduction of long-term liabilities in the statement of net assets. Bond and loan principal payments Premium on bonds issued Payments to refunding escrow agent Payments on capital lease obligations

$ (131,525,000) (235,588)

$

Certain amounts reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in the governmental Installment payment program to State of Florida Increase in compensated absences Accrued interest on bonds Amortization of deferred charges Amortization of deferred loss Amortization of premium Amortization of discount Certain amounts reported in the statement of activities as deferred are reported as expenditures in the governmental funds.

$

(131,760,588)

31,509,118 (17,191,707) 150,550,385 93,005

164,960,801

(686,404) 478,612 891,696 (328,382) (675,454) 1,884,082 (6,038)

1,558,112 1,052,682

The net revenues of internal service funds are reported with governmental activities. Change in net assets - governmental activities

413,211 $

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

22

(25,014,959)

Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense.

23

(11,758,436)

COLLIER COUNTY, FLORIDA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012

Original Budget Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Miscellaneous Total revenues

$

207,840,900 253,000 36,184,700 17,141,946 1,157,100 843,500 6,964,000 270,385,146

Final Budget $

207,840,900 253,000 36,184,700 18,924,311 1,157,100 843,500 6,974,359 272,177,870

Actual $

199,156,838 301,410 41,058,174 17,603,057 1,302,691 672,967 7,776,349 267,871,486

COLLIER COUNTY, FLORIDA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012 Variance with Final Budget Favorable (Unfavorable) $

(8,684,062) 48,410 4,873,474 (1,321,254) 145,591 (170,533) 801,990 (4,306,384)

C-13

Expenditures: Current: General government Board of County Commissioners personal services Board of County Commissioners operating

986,000 93,100

986,000 93,100

941,060 77,716

44,940 15,384

County manager administrative personal services County manager administrative operating

751,300 51,600

751,300 51,600

593,831 33,308

157,469 18,292

Budget and management personal services Budget and management operating

754,900 88,500

754,900 88,500

687,989 53,673

66,911 34,827

Administrative services personal services Administrative services operating Administrative services capital outlay

2,016,300 116,500 -

2,002,300 127,500 3,000

1,777,644 106,328 1,150

224,656 21,172 1,850

Human resources administration personal services Human resources administration operating

1,228,300 258,400

1,228,300 258,400

1,145,592 181,854

82,708 76,546

Clerk of the Circuit Court personal services Clerk of the Circuit Court operating Clerk of the Circuit Court capital outlay

5,700,700 1,804,500 392,300

5,287,600 2,241,600 916,100

5,282,900 2,206,278 915,998

4,700 35,322 102

Property Appraiser personal services Property Appraiser operating Property Appraiser capital outlay

5,004,471 1,454,390 25,000

5,004,471 1,454,390 25,000

4,355,639 1,807,305 12,124

648,832 (352,915) 12,876

Tax Collector personal services Tax Collector operating Tax Collector capital outlay

9,240,587 2,885,242 39,803

8,899,366 2,550,430 39,773

8,899,366 2,546,073 39,773

4,357 -

County attorney personal services County attorney operating County attorney capital

2,333,100 380,900 -

2,333,100 656,066 13,200

2,203,817 206,393 13,006

129,283 449,673 194

Natural resource planning operating

96,500

280,503

243,903

36,600

Circuit court costs operating

34,700

34,700

21,550

13,150

1,359,200 20,000

1,420,987 19,213

1,371,779 19,213

22,800

22,800

10,036

State Attorney operating

271,900

271,900

Public Defender operating

182,500

Other general administrative personal services Other general administrative operating Facilities management personal services Facilities management operating Facilities management capital outlay

Courthouse security operating Courthouse security capital outlay County court cost operating

Original Budget

Final Budget

Actual

Variance with Final Budget Favorable (Unfavorable)

Sheriff personal services Sheriff operating

2,870,700 180,000

2,870,700 180,000

2,858,933 107,781

11,767 72,219

Supervisor of Elections personal services Supervisor of Elections operating Supervisor of Elections capital outlay

2,043,900 1,516,400 14,000

2,043,900 1,503,178 20,385

1,950,818 1,449,363 19,270

93,082 53,815 1,115

830,100 41,900

775,736 43,300

772,901 41,110

2,835 2,190

62,426,493

62,641,190

59,486,014

3,155,176

104,785,500 26,707,800 926,500

106,328,500 26,691,600 926,500

105,531,307 21,888,932 2,451,805

797,193 4,802,668 (1,525,305)

Emergency management administration personal services Emergency management administration operating

797,600 600,400

797,600 786,499

761,432 492,046

36,168 294,453

Helicopter operations personal services Helicopter operations operating Helicopter operations capital

640,000 777,500 -

696,300 709,951 11,249

684,884 595,997 11,187

11,416 113,954 62

Intersection safety personal services Intersection safety operating

30,100 649,900

30,100 820,900

30,070 391,090

30 429,810

Real property management personal services Real property management operating Total general government Public safety Sheriff personal services Sheriff operating Sheriff capital outlay

Medical examiner services operating Total public safety Physical environment Conservation and resource management personal services Conservation and resource management operating Immokalee cemetery operating Total physical environment Economic environment Veterans services personal services Veterans services operating Housing and urban improvement personal services Housing and urban improvement operating Total economic environment Human services Health Care Responsibility Act operating

1,063,200

1,063,200

1,060,710

2,490

136,978,500

138,862,399

133,899,460

4,962,939

581,700 126,700

583,900 126,700

553,125 125,161

30,775 1,539

3,500

2,100

1,812

288

711,900

712,700

680,098

32,602

210,300 65,900

210,300 40,900

195,640 28,350

14,660 12,550

1,006,400

75,000 931,400

57,766 690,856

17,234 240,544

1,282,600

1,257,600

972,612

284,988

48,500

48,500

22,631

25,869

49,208 -

Domestic animal services personal services Domestic animal services operating Domestic animal services capital outlay

2,001,000 686,600 41,500

2,001,000 670,980 24,000

1,866,611 540,582 1,268

134,389 130,398 22,732

12,764

Health department operating

1,651,700

1,651,700

1,300,111

351,589

250,713

21,187

Mental health operating

899,300

899,300

674,475

224,825

182,500

176,951

5,549

300,000 6,695,800

260,000 7,282,900

158,070 6,290,650

101,930 992,250

448,800 3,694,800

498,700 3,644,900

417,367 3,468,038

81,333 176,862

3,316,000 6,933,200 91,000

3,316,000 6,257,776 88,716

3,278,374 6,287,066 88,716

37,626 (29,290) -

309,800 27,600

299,800 27,600

286,638 21,031

13,162 6,569

9,809,600

9,766,480

8,598,752

1,167,728

24

Client assistance personal services Client assistance operating Public services division office personal services Public services division office operating Total human services

25

COLLIER COUNTY, FLORIDA STATEMENT OF NET ASSETS PROPRIETARY FUNDS SEPTEMBER 30, 2012

COLLIER COUNTY, FLORIDA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012

Business-type Activities Enterprise Funds

Original Budget Culture and recreation Library administration personal services Library administration operating Library administration capital outlay Beach and water park operations personal services Beach and water park operations operating Beach and water park operations capital outlay Total culture and recreation Total expenditures Excess of revenues over expenditures Other financing sources (uses): Sale of capital assets Insurance proceeds Transfers in Transfers out Total other financing sources (uses) Net change in fund balance Fund balance at beginning of year

C-14

Fund balance at end of year

$

Final Budget

Actual

Variance with Final Budget Favorable (Unfavorable)

5,096,600 1,729,400 70,000

5,096,600 1,729,400 70,000

4,912,926 1,651,523 69,921

183,674 77,877 79

4,782,700 5,168,400 -

4,502,900 5,153,227 21,865

4,218,699 4,744,761 1,375

284,201 408,466 20,490

16,847,100

16,573,992

15,599,205

974,787

228,056,193

229,814,361

219,236,141

10,578,220

42,328,953

42,363,509

48,635,345

6,271,836

70,000 6,243,047 (64,896,400)

70,000 576 6,045,812 (64,909,837)

225,279 20,587 8,782,931 (55,247,475)

155,279 20,011 2,737,119 9,662,362

(58,583,353)

(58,793,449)

(46,218,678)

12,574,771

(16,254,400)

(16,429,940)

2,416,667

18,846,607

48,297,400

49,411,516

49,411,516

-

51,828,183

$ 18,846,607

32,043,000

Reconciliation: Net change in fund balance, budgetary basis Net change in fair value of investments Advances budgeted as transfers Net change in fund balance, GAAP basis

$

32,981,576

$

$

$

2,416,667 (95,606) 1,367,600 3,688,661

County Water and Sewer ASSETS Current assets: Cash, cash equivalents and investments Receivables: Trade, net Special assessments Interest Unbilled revenue Due from other funds Due from other governments Deposits Inventory Prepaid costs Restricted assets: Cash, cash equivalents and investments Due from other governments Total current assets Noncurrent assets: Restricted assets: Cash, cash equivalents and investments Receivables: Special assessments Advances to other funds Deferred charges Capital assets: Land and nondepreciable capital assets Depreciable capital assets, net Total noncurrent assets Total assets

$

142,824,860

Solid Waste Disposal

$

25,299,224

$

Total

3,783,300

$

171,907,384

Governmental Activities Internal Service Funds

$

43,582,198

5,874,324 65,174 163,816 4,976,651 38,186 359,642 4,149,513 19,832

805,083 117,444 -

2,921,896 4,764 178,380 269,674 4,026 138,653 -

9,601,303 65,174 286,024 5,155,031 307,860 363,668 4,288,166 19,832

137,621 26,178 725,764 40,287 313,592 868,543 -

2,787,822 161,259,820

72,309 26,294,060

239,541 4,753,457 12,293,691

3,099,672 4,753,457 199,847,571

45,694,183

34,030,309

-

-

34,030,309

-

6,375 10,401,508 1,105,344

3,437,391 -

-

6,375 13,838,899 1,105,344

-

72,602,775 745,123,741 863,270,052 1,024,529,872

3,831,471 17,561,649 24,830,511 51,124,571

10,732,381 32,427,565 43,159,946 55,453,637

87,166,627 795,112,955 931,260,509 1,131,108,080

19,391,578 19,391,578 65,085,761 (Continued)

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

26

Other Funds

27

COLLIER COUNTY, FLORIDA STATEMENT OF NET ASSETS PROPRIETARY FUNDS SEPTEMBER 30, 2012

COLLIER COUNTY, FLORIDA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012

Business-type Activities Enterprise Funds County Water and Sewer LIABILITIES Current liabilities: Accounts payable Wages payable Retainage payable Due to other funds Due to other governments Due to individuals Self-insurance claims payable Compensated absences Capital lease obligations Interest payable Bonds and loans payable Liabilities payable from restricted assets: Accounts payable Retainage payable Refundable deposits Unearned revenue Notes payable Bonds and loans payable Total current liabilities

$

4,853,718 364,753 385,027 88,543 452 881,717 1,197,350 2,322,378 9,152,712

Solid Waste Disposal

$

2,645,740 29,092 11 502 84,748 -

Other Funds

$

1,084,042 281,493 2,404,410 91,058 377,269 519,857 134,914 -

Total

$

8,583,500 675,338 385,027 2,492,964 92,012 1,258,986 1,801,955 134,914 2,322,378 9,152,712

Governmental Activities Internal Service Funds

$

1,005,936 99,768 91,901 5,888,564 333,720 -

C-15

193,045 33,025 69,190 2,492,562 22,034,472

72,309 2,832,402

662,377 67,037 17,364 116,144 5,755,965

855,422 67,037 50,389 188,453 69,190 2,492,562 30,622,839

7,419,889

Noncurrent liabilities: Self-insurance claims payable Compensated absences Capital lease obligations Net OPEB obligation Landfill post-closure liability Bonds and loans payable, net Total noncurrent liabilities Total liabilities

513,150 219,706,567 220,219,717 242,254,189

36,320 1,795,108 1,831,428 4,663,830

222,795 39,651 262,446 6,018,411

772,265 39,651 1,795,108 219,706,567 222,313,591 252,936,430

1,512,212 143,023 1,698,208 3,353,443 10,773,332

NET ASSETS Invested in capital assets, net of related debt Restricted for growth related capital expansion Restricted for renewal and replacement Restricted for debt service Unrestricted

586,305,485 21,314,836 300,000 12,584,155 161,771,207

21,393,120 25,067,621

42,985,381 6,449,845

650,683,986 21,314,836 300,000 12,584,155 193,288,673

19,391,578 34,920,851

49,435,226

878,171,650

Total net assets

Business-type Activities Enterprise Funds County Water and Sewer Operating revenues: Charges for services Miscellaneous

$

Total operating revenues

782,275,683

$

46,460,741

$

Cumulative consolidation adjustment for internal service fund activities related to enterprise funds Net assets of Business-type Activities

$

$

34,076,045 199,031

14,684,703 87,489

Total $

150,831,124 900,027

$

74,240,621 243,057

14,772,192

151,731,151

74,483,678

23,671,349 34,484,083 34,019,622

1,742,275 26,669,984 938,682

18,770,338 15,003,890 2,681,806

44,183,962 76,157,957 37,640,110

6,174,481 68,895,320 1,938,482

Total operating expenses

92,175,054

29,350,941

36,456,034

157,982,029

77,008,283

Operating income (loss)

10,508,829

4,924,135

(21,683,842)

(6,250,878)

(2,524,605)

250,000 912,756 75,432 (8,648,228) (915,005)

18,400 160,297 320 (239,479)

2,680,005 32,954 6,066 (12,759) (10,094)

2,948,405 1,106,007 81,818 (8,660,987) (1,164,578)

232,865 2,495,614 (6,113)

Non-operating revenues (expenses): Operating grants and contributions Interest income Insurance reimbursement Interest expense Loss on disposal of capital assets

Income (loss) before contributions and transfers Capital grants and contributions Transfers in Transfers out Change in net assets Net assets - beginning Net assets - ending

$

(8,325,045)

(60,462)

2,696,172

(5,689,335)

2,722,366

2,183,784

4,863,673

(18,987,670)

(11,940,213)

197,761

11,272,319 1,468,336 (4,089,460)

811 (1,942,419)

8,223,187 17,614,538 (272,700)

19,496,317 19,082,874 (6,304,579)

282 361,200 (926,100)

20,334,399

10,834,979

2,922,065

6,577,355

771,440,704

43,538,676

42,857,871

782,275,683

$

46,460,741

$

Change in net assets of Business-type Activities

49,435,226

$ (780,068) $

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

54,312,429

879,272,454

29

(366,857) 54,679,286

Consolidation adjustment for internal service fund activities related to enterprise funds

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

28

$

Governmental Activities Internal Service Funds

34,275,076

1,100,804 $

Other Funds

102,683,883

Operating expenses: Personal services Operating Depreciation and amortization

Total non-operating revenues (expenses)

$

102,070,376 613,507

Solid Waste Disposal

19,554,331

54,312,429

COLLIER COUNTY, FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012 Business-type Activities Enterprise Funds County Water Solid Waste Other and Sewer Disposal Funds Cash flows from operating activities: Cash received for services Cash received from other funds for services Cash received from employees for services Cash received from other governments for services Cash received from refundable deposits Cash received from retirees for services Cash payments on behalf of retirees Cash payments for goods and services Cash payments to employees Cash payments for interfund services Cash payments on refundable deposits Net cash provided by (used for) operating activities Cash flows from non-capital financing activities: Cash received from operating grants Cash transfers from other funds Cash transfers to other funds Net cash provided by (used for) non-capital financing activities

C-16

Cash flows from capital and related financing activities: System development charges Special assessment collections Receipts from insurance reimbursements Proceeds from disposal of capital assets Proceeds from capital grants Payments for capital acquisitions Principal payments on state revolving loans Principal payments on bonds Principal payments on leases Interest and fiscal agent fees paid Net cash provided by (used for) capital and related financing activities Cash flows from investing activities: Interest on investments Net cash provided by investing activities Net increase in cash, cash equivalents and investments Cash, cash equivalents and investments, October 1, 2011 Cash, cash equivalents and investments, September 30, 2012

Total

Governmental Activities Internal Service Funds

$ 103,141,445 39,000 (27,366,705) (23,597,459) (6,665,387) (42,977) 45,507,917

$ 34,171,283 899,234 (24,962,557) (1,744,367) (897,409) (1,082,130) 6,384,054

$ 15,026,546 (10,723,439) (18,786,561) (4,396,235) (867) (18,880,556)

$ 152,339,274 938,234 (63,052,701) (44,128,387) (11,959,031) (1,125,974) 33,011,415

6,800,912 (4,089,461)

18,400 4,031,964 (6,005,133)

3,980,885 22,366,771 (4,637,522)

3,999,285 33,199,647 (14,732,116)

361,200 (1,776,100)

2,711,451

(1,954,769)

21,710,134

22,466,816

(1,414,900)

9,523,421 26,658 20,174 79,944 (21,236,975) (7,079,698) (5,188,936) (9,312,190)

320 (2,061,124) -

31,558 11,495 5,952,870 (7,826,910) (212,246) (12,759)

9,523,421 26,658 52,052 91,439 5,952,870 (31,125,009) (7,079,698) (5,188,936) (212,246) (9,324,949)

2,588,865 2,905 (68,625) -

(33,167,602)

(2,060,804)

(2,055,992)

(37,284,398)

2,523,145

33,671 33,671

1,132,432 1,132,432

243,368 243,368

940,818 940,818

157,943 157,943

$

68,250,031 5,489,426 464,179 1,197,797 (612,146) (68,882,891) (6,220,005) (395,793) (709,402)

15,992,584

2,526,424

807,257

19,326,265

642,211

163,650,407

22,845,109

3,215,584

189,711,100

42,939,987

$ 179,642,991

$ 25,371,533

$

4,022,841

$ 209,037,365

$

43,582,198

Current cash, cash equivalents and investments $ 142,824,860 Current cash, cash equivalents and investments - restricted 2,787,822 Noncurrent cash, cash equivalents and investments - restricted 34,030,309 Cash, cash equivalents and investments, September 30, 2012 $ 179,642,991

$ 25,299,224 72,309 $ 25,371,533

$

3,783,300 239,541 4,022,841

$ 171,907,384 3,099,672 34,030,309 $ 209,037,365

$

43,582,198 43,582,198

$

COLLIER COUNTY, FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS (CONTINUED) RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012

$

Business-type Activities Enterprise Funds County Water Solid Waste Other and Sewer Disposal Funds Operating income (loss)

$ 10,508,829

Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities: Depreciation expense Amortization of bond issuance costs Amortization of utility acquisition adjustment Net changes in assets and liabilities: Trade receivable Due from other funds Due from other governments Deposits Prepaid costs Inventory Prepaid costs Accounts payable Wages payable Due to other funds Due to other governments Due to individuals Compensated absences Refundable deposits Unearned revenue Self-insurance claims payable Net OPEB obligation Landfill post closure liability

33,420,909 538,258 60,455

$ (21,683,842)

34,999,088

6,384,054

$

$

(40,246) 811 -

$

37,041,397 538,258 60,455

263,730 14 (3,133) 12,130 (127,996) 1,091 82 23 (47) (17,314) (867) (6,233) -

1,459,919 $

Total

$ (6,250,878)

2,681,806 -

(74,967) 77,027 720,948 3,833 12,049 (6) (5,925) (182,896) (28,826)

$ 45,507,917

1,938,482 -

(180,140) 53,816 (15,538) (875) (359,602) 1,322,724 21,422 113,339 (85) 855,768 34,153 (187,740) (6,233) (28,826)

2,803,286

(2,524,605)

222,841 54,767 12,219 110,961 (263,798) 49,410 (198,251) (823) 56,355 (44,701) (241,723) 119,464 -

39,262,293

1,815,203

$ (18,880,556)

$ 33,011,415

$

(709,402)

$

$

$

(13,866) 282 -

Non-cash investing, capital and financing activities: Change in fair value of investments Contributed capital assets Developer infrastructure contributions

(242,573) 4,622 2,529,018

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

(Continued)

30

4,924,135

938,682 -

(368,903) (23,225) (12,405) (875) (371,732) 729,772 16,498 101,208 (102) 855,815 57,392 (3,977) -

Total adjustments Net cash provided by (used for) operating activities

$

Governmental Activities Internal Service Funds

31

1,448 1,672,711 -

(281,371) 1,678,144 2,529,018

COLLIER COUNTY, FLORIDA STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES AGENCY FUNDS SEPTEMBER 30, 2012

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

Agency Funds ASSETS

INDEX

Cash, cash equivalents and investments Receivables: Interest Other

$

32,325,988

Total assets

$

32,371,242

1

Summary of Significant Accounting Policies

34

Due to other governments Due to individuals Refundable deposits Due to special assessment holders

$

6,529,076 640,702 24,075,689 1,125,775

2

Cash, Cash Equivalents and Investments

44

3

Trade Receivables

47

Total liabilities

$

32,371,242

4

Interfund Payables and Receivables

48

5

Capital Assets

50

6

Long-Term Obligations

51

7

Conduit Debt Obligations

59

8

Defeased Debt

60

9

Pension Plan Obligations

61

10

Transfers

63

11

Net Assets/Fund Balances

63

12

Risk Management

66

13

Other Postemployment Benefits

68

14

Landfill Liability

71

15

Significant Contingencies

72

16

Significant Commitments

73

17

Fund Deficits

74

3,781 41,473

LIABILITIES

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

C-17 32

NOTE

PAGE NUMBER

33

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED

THE REPORTING ENTITY

THE REPORTING ENTITY – CONTINUED

The primary government consists of Collier County, a political subdivision of the State of Florida that was established in 1923 by the Florida State Legislature. The County is governed by a Board of County Commissioners which consists of five members elected within single member districts. In addition, there are five separately elected Constitutional Officers: the Tax Collector, Property Appraiser, Sheriff, Clerk of the Circuit Court and Supervisor of Elections. The Constitutional Officers are elected county wide. Under the direction of the Clerk of the Circuit Court, the Collier County Finance and Accounting Department maintains the accounting system for the operations of the Board of County Commissioners, Supervisor of Elections and the Clerk of the Circuit Court. The Tax Collector, Property Appraiser and Sheriff each maintain their own accounting systems. For financial reporting purposes the operations of the Board of County Commissioners and the Constitutional Officers are combined and presented as the primary government.

Collier County Airport Authority The Board of County Commissioners was established as the governing body of the Airport Authority by Ordinance 2010-10. The Airport Authority is responsible for construction, improvement, equipment, development, regulation, operation and maintenance of the Marco Island, Immokalee and Everglades Airports and all related airport facilities. Collier County Metropolitan Planning Organization (MPO) The Authority was created in 1981 by Collier County Resolution 81-222 pursuant to Section 334.215, Florida Statutes, as amended by Section 339.175, Florida Statutes. The purpose of the MPO is to provide for short-term and long-term planning for all modes of travel in order to benefit the citizens of Collier County. The MPO is reported as part of the Grants and Shared Revenue fund.

C-18

Component units are legally separate agencies that the primary government is financially accountable for or organizations which should be included in the reporting entity because of the nature and significance of their relationship with the primary government. Financial accountability is determined by the primary government's ability to appoint the voting majority of the entity's board, impose its will on the organization, and the existence of a financial benefit/burden relationship or fiscal dependency.

The County's discretely presented component units consist of organizations whose board members are appointed by the Board of County Commissioners. The County is able to impose its will on these entities because of its ability to remove appointed members from the component units' Boards. The Authorities maintain their own financial records, but do not issue separate financial statements. GASB 14, as amended by GASB 39, requires that the financial data of the following organizations be reported in separate columns to emphasize that they are legally separate from the County.

The County's blended component units consist of organizations whose respective governing Boards are composed entirely of the Board of County Commissioners serving ex-officio. These entities are legally separate, however financial support has been pledged and financial or operational policies may be significantly influenced by the County. In accordance with Governmental Accounting Standards Board (GASB) Statement No. 14, The Financial Reporting Entity (GASB 14), as amended by GASB Statement No. 39, Determining Whether Certain Organizations are Component Units (GASB 39), these organizations are reported as if they were part of the County's operations.

Collier County Housing Finance Authority The Authority was formed in 1980 by Collier County Ordinance 80-66 for the purpose of stimulating the construction of residential housing for low and moderate income families through the use of public financing. Their financial position and results of operations are reported in the accompanying financial statements and the outstanding conduit debt issued by the Authority is disclosed in Note 7, “Conduit Debt Obligations”.

Collier County Water and Sewer District The District was established by Chapter 88-499, as amended by Chapter 03-353, Laws of Florida, to provide water, sewer and effluent services to portions of the unincorporated area of Collier County. Goodland Water District The District was established by a Special Referendum Election authorized by Collier County Ordinance 75-5 and Section 125.01(q), Florida Statutes. The District provides potable water service to the residents of Goodland.

Collier County Health Facilities Authority The Authority was established in 1979 by Collier County Ordinance 79-75 for the purpose of assisting health facilities in the acquisition, construction and financing of projects within the County. Their financial position and results of operations are reported in the accompanying financial statements and the outstanding conduit debt issued by the Authority is disclosed in Note 7, “Conduit Debt Obligations”.

Collier County Community Redevelopment Agency (CRA) The CRA was established by Resolution 2000-82 to benefit blighted areas in both the Immokalee Redevelopment and Bayshore/Gateway Triangle Redevelopment areas. These two redevelopment areas are geographically separate and distinct.

Collier County Industrial Development Authority The Authority was created in 1978 by Collier County Resolution 78-94 to facilitate the financing of projects that promote economic growth and increase opportunities for employment in the County. Their financial position and results of operations are reported in the accompanying financial statements and the outstanding conduit debt issued by the Authority is disclosed in Note 7, “Conduit Debt Obligations”.

34

35

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Collier County Educational Facilities Authority The Authority was created in 1999 by Collier County Resolution 99-177 to assist institutions for higher education in the construction, financing and refinancing of projects. Their financial position and results of operations are reported in the accompanying financial statements and the outstanding conduit debt issued by the Authority is disclosed in Note 7, “Conduit Debt Obligations”. Financial information on the individual component units can be obtained from their respective administrative offices or from the Finance and Accounting Department of the Clerk of the Circuit Court.

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS – CONTINUED Program revenues are reported in the following three categories: charges for services, operating grants and contributions and capital grants and contributions. Charges for services are amounts charged to customers for a particular service, and are netted against the cost of the relevant program. Internal charges for indirect services are allocated across functions as direct expenses. Grants and contributions refer to revenues restricted for capital or operational use in a particular program. The general revenue category encompasses all other revenue types and represents revenue collected to support all functions of Collier County government.

Collier Water and Sewer District 3339 East Tamiami Trail, Suite #214 Naples, Florida 34112

Goodland Water District 3339 East Tamiami Trail, Suite #214 Naples, Florida 34112

The fund financial statements follow the government-wide statements and report more detailed information about operations of major funds on an individual basis and nonmajor funds on an aggregate basis for the governmental and proprietary funds. Following the governmental fund balance sheet and statement of revenues, expenditures and changes in fund balances are reconciliations explaining the differences between the governmental fund presentation and the government-wide presentation.

Collier County Airport Authority 2005 Mainsail Drive, Suite #1 Naples, FL 34114

Collier County Health Facilities Authority and Housing Finance Authority 5150 Tamiami Trail North, Suite 502 Naples, FL 34103

BASIS OF PRESENTATION

Bayshore Gateway Community Redevelopment Agency 4069 Bayshore Drive Naples, Florida 34112

Collier County Industrial Development Authority and Educational Facilities Authority 3050 North Horseshoe Drive, Suite #120 Naples, Florida 34104

Immokalee Community Redevelopment Agency 310 Alachua Street Immokalee, Florida 34142

Collier County Metropolitan Planning Organization 2885 South Horseshoe Drive Naples, Florida 34104

Administrative Offices

C-19

GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS The basic financial statements are made up of the government-wide financial statements and fund financial statements. Both of these sets of financial statements distinguish between the governmental and business-type activities of Collier County. The government-wide financial statements consist of a Statement of Net Assets and a Statement of Activities. These statements report on the financial condition of Collier County, at the reporting entity level. Internal balances represent net amounts due between the governmental and business-type activities. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Fiduciary funds are not included in these presentations as their assets do not represent amounts that are available for Collier County government operations. The Statement of Net Assets reports all financial and capital resources of Collier County’s governmental and business-type activities. Net assets equal assets minus liabilities, and is shown in three categories: invested in capital assets, net of related debt; restricted net assets and unrestricted net assets. The Statement of Activities reports results of operations on a functional activity (program) basis and demonstrates to what degree the particular program has been selfsupporting. 36

The following are reported as major governmental funds: General Fund – the General fund is the general operating fund of the County. All general tax revenues and other receipts that are not accounted for in other funds are accounted for in the General Fund. The general operating funds of the Clerk of the Circuit Court, Property Appraiser, Sheriff, Supervisor of Elections and Tax Collector are presented together with the Board of County Commissioners' general operating fund in the County’s consolidated General Fund. Government Facilities Impact Fee Fund – the Government Facilities Impact Fee fund is used to account for the receipt and expenditure of government facilities impact fees collected from qualifying new construction. The impact fees must be used for the acquisition and construction of government facilities. The following are reported as major enterprise funds: County Water and Sewer Fund – the County Water and Sewer fund is used to account for the provision of water, wastewater and effluent services to certain portions of the County’s unincorporated area. Solid Waste Disposal Fund – the Solid Waste Disposal fund is used to account for the provision of solid waste disposal services to users throughout the County.

37

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED

BASIS OF PRESENTATION – CONTINUED

BASIS OF ACCOUNTING AND MEASUREMENT FOCUS – CONTINUED

Collier County also maintains the following nonmajor fund types:

Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses and depreciation on capital assets.

Special Revenue Funds – Special revenue funds are used to account for the proceeds of specific revenue sources that are restricted or committed to expenditure for specific purposes other than debt service or capital projects. Debt Service Funds – Debt service funds are used to account for the accumulation of resources that are restricted, committed or assigned to expenditure for principal and interest related to long-term obligations. Capital Project Funds – Capital project funds are used to account for the accumulation of resources that are restricted, committed or assigned to expenditure for capital outlays including the acquisition or construction of capital facilities and other capital assets.

C-20

Enterprise Funds – Enterprise funds are used to account for activities for which a fee is charged to external users for goods or services. Internal Service Funds – Internal service funds are used to account for the provision of goods and services by one department to other departments within the County or to other governmental units on a cost reimbursement basis. Collier County currently operates the following Internal Service Funds: Self Insurance, Sheriff’s Self Insurance, Fleet Management and Information Technology. Agency Funds – Agency funds are custodial in nature and do not report the results of operations (assets equal liabilities). Agency funds are clearing accounts for assets held by the government as an agent for individuals, private organizations or other governments. The Board of County Commissioners, Sheriff, Clerk of the Circuit Court and Tax Collector all maintain agency funds.

All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. Primary revenues including non-grant intergovernmental revenues, charges for services and interest are treated as susceptible to accrual under the modified accrual basis. In applying the susceptibility-to-accrual concept to grant revenues, the legal and contractual requirements of the numerous individual programs are used as guidance. In addition, grant revenues are considered available if they are expected to be collected within one year of the end of the current fiscal period. Property taxes are discussed later in this footnote. Other revenue sources are not considered measurable and available and are not treated as susceptible to accrual. Expenditures are recorded when the related fund liability is incurred. Exceptions to this general rule include accrued compensated absences and principal and interest on long-term debt. BUDGETS AND BUDGETARY DATA The following are the statutory procedures followed by the Board of County Commissioners in establishing the budgets for the County: 1) Within fifteen days after certification of the ad valorem tax roll by the Property Appraiser, the County budget officer prepares and presents to the Board a tentative budget for the ensuing fiscal year. The budget includes all estimated receipts and all estimated expenditures, reserves and balances to be carried forward at the end of the year as specified in Section 129.03, Florida Statutes.

BASIS OF ACCOUNTING AND MEASUREMENT FOCUS Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made regardless of the measurement focus applied. The government-wide financial statements, as well as the fund financial statements for the proprietary funds, are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recognized in the period in which they are earned and expenses are recognized in the period incurred. Grant revenues are recognized when eligibility requirements are met. The intent in proprietary operations is that the costs of providing goods or services to the general public be financed primarily through user charges, or where periodic determination of revenues earned, expenses incurred, and/or net income is deemed appropriate. 38

2) Within eighty days of the certification of value, but not earlier than sixty-five days after certification, the Board holds a public hearing on the tentative budget and proposed millage rate. At this hearing the Board amends and adopts the tentative budget, recomputes the proposed millage rate, and announces publicly the percentage, if any, by which the recomputed proposed millage rate exceeds the rolled-back rate. If the millage rate tentatively adopted exceeds that proposed, each taxpayer within the jurisdiction is notified of the increase by first class mail, at the expense of the Board. 3) Within fifteen days of the meeting adopting the tentative budget, the Board advertises the County's intent to adopt a final budget and millage rate.

39

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED

BUDGETS AND BUDGETARY DATA – CONTINUED

BUDGETS AND BUDGETARY DATA – CONTINUED

4) A public hearing is held by the Board to finalize the budget and adopt a millage rate. This hearing is held not less than two days and not more than five days after the day that the advertisement is first published. Prior to September 30, the millage levy is adopted by a separate vote. The millage rate adopted is not allowed to exceed the tentatively adopted millage rate, except as allowed for by emergency provision with strict public notice requirements. This is followed by the approval and ratification of the final budget. 5) The resolution approved at the final hearing is forwarded to the Property Appraiser, Tax Collector and Florida Department of Revenue, not later than thirty days following the adoption of the Resolution, the Board certifies to the State of Florida, Department of Revenue, Division of Ad Valorem Tax, that it has complied with the provisions of Chapter 200, Florida Statutes.

C-21

6) The County Manager approves interdepartmental budget changes within the same fund and division of $50,000 or less that do not impact reserves or recognize revenue. All other budgetary changes must be approved by the Board of County Commissioners as matter of policy. The initial adopted budget was amended in accordance with Florida Statutes. 7) Florida State Section 129.07, as amended in 1978, provides that expenditures in excess of total fund budgets are unlawful. However, because the Board approves all budgetary changes between departments, except those approved by the County Manager, the departmental budget becomes the level of control. Formal budgetary integration is employed as a management control device during the fiscal year for all funds. Budgets have been legally adopted by the Board for all Board departments except for agency funds and the Impact Fees Escrow special revenue fund. The Property Appraiser and the Tax Collector adopt budgets for their general funds independently of the Board. The Clerk of Courts operates as a fee officer, and as such, prepares its budget in accordance with Section 218.35, Florida Statutes. The Sheriff and Supervisor of Elections prepare budgets for their general funds, which are submitted to and approved by the Board. The Clerk of Court’s budget for court related functions is prepared according to Section 28.36 Florida Statutes and submitted to the Clerks of Court Operations Corporation for approval by the Florida Department of Revenue. Budgets are adopted for all governmental departments except as described in the previous paragraph. These budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP) except for certain non-budgeted revenues and expenses and mark to market activity on investments. All unencumbered appropriations lapse at the end of the current year. For further information regarding encumbrances, refer to Note 16 on page 73.

40

Capital project costs are budgeted in the year they are anticipated to be obligated. In subsequent years, the unused budget is reappropriated until the project is completed. Proprietary funds are budgeted on a basis consistent with generally accepted accounting principles, except that capital related and debt transactions are based upon cash receipts and disbursements. Estimated beginning fund balances are considered in the budgetary process. For purposes of the budgetary presentation, certain transactions that have been accounted for in the governmental funds statements of revenues, expenditures and changes in fund balances have not been reflected in the budgetary financial statements. Specifically, bad debt expense and the net change in fair value of investments are not presented in the budget to actual statements. ACCOUNTS RECEIVABLE – UNBILLED REVENUE Unbilled charges for services are accrued in the County Water and Sewer, Emergency Medical Services and Goodland Water funds by prorating subsequent bills. INVENTORIES AND PREPAID COSTS Inventory is valued at cost using the first-in, first-out method. Inventory in the governmental funds consists of supplies held for consumption. The cost is recorded as an expenditure at the time inventory items are consumed rather than when purchased. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. Inventories and prepaid costs reported within governmental funds are classified as non-spendable, which indicates that they do not constitute available resources. Inventories and prepaid costs in the government-wide and proprietary fund financial statements are reported as an expense when consumed. Inventory held for resale consists of real estate holdings, acquired through various programs, which the County intends to sell. The value of these properties includes the original purchase price plus the cost of any rehabilitation. Inventory held for resale of $15,913,817 is classified as restricted and $245,951 is classified as committed, which indicates that they do not constitute available resources. CAPITAL ASSETS Land, buildings, improvements and equipment are stated at cost. Capital contributions are recorded at their fair value on the date donated. Facilities constructed using system development impact fees, collected from developers and customers, are stated at cost. The County capitalizes expenditures with a cost of $1,000 or more and with a useful life in excess of one year. Expenditures for maintenance and repairs are charged to operating expenses. The cost of assets retired or sold, together with the related accumulated depreciation, is removed from the accounts and any gain or loss on disposition is credited or charged to earnings.

41

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED CAPITAL ASSETS – CONTINUED PROPERTY TAXES Depreciation is calculated using the straight-line method. The estimated useful life of the various classes of depreciable capital assets is as follows: Capital Asset Class Buildings Infrastructure Improvements other than buildings Machinery and equipment

Estimated Useful Life 20-45 years 3-30 years 4-45 years 3-20 years

Costs incurred in the renourishment of beaches are included in the infrastructure class of capital assets and are capitalized and depreciated over three years. Infrastructure acquired prior to fiscal years ended June 30, 1980 is not reported. Effective October 1, 2009 the County adopted the provisions of GASB Statement No. 51, Accounting and Financial Reporting for Intangible Assets, which establishes accounting and financial reporting standards for intangible assets.

Property taxes become due and payable on November 1st of each year and become delinquent on April 1st of the following year. Property taxes receivable and a corresponding allowance for uncollectible property taxes are not included in the financial statements, as delinquent taxes as of September 30, 2012 are not significant. Discounts on property taxes are allowed for payments made prior to the April 1st delinquent date as follows: November - 4%, December - 3%, January - 2%, and February - 1%. Tax certificates for the full amount of any unpaid taxes must be sold not later than June 1st of each year. No accrual for the property tax levy becoming due in November 2012 is included in the accompanying financial statements, since such taxes are collected to finance expenditures of the subsequent period. Key dates in the property tax cycle for the fiscal year ended September 30, 2012 are as follows: Property Tax Cycle

Date

C-22

Assessment roll compiled

January 1, 2011

CAPITAL LEASE OBLIGATIONS

Assessment roll certified

July 1, 2011

In the government-wide financial statements and proprietary fund financial statements capital lease obligations and the related cost of assets acquired are reflected in the Statement of Net Assets. For capital lease obligations originating in governmental funds, an expenditure for the asset and the offsetting other financing source is reflected in the fund financial statements in the year of inception.

Millage resolution approved

Within 35 days of the certification of the assessment roll

Beginning of fiscal year for tax levy

October 1, 2011

Taxes due and payable (levy date)

November 1, 2011

Collection dates

By November 30: By December 31: By January 31: By February 28:

BOND PREMIUMS, DISCOUNTS AND ISSUANCE COSTS Bond premiums, discounts and issuance costs for the governmental activities and the business-type activities are deferred and amortized over the term of the bonds using the straight-line method. Bond discounts are presented as a reduction of the face amount of bonds payable, premiums as an increase, while issuance costs are recorded as deferred charges, which are shown on the face of the Statement of Net Assets as a component of noncurrent assets. In the governmental fund financials, bond premiums, discounts and issuance costs are recognized in the current period. DEFEASANCE OF DEBT For refundings resulting in the defeasance of debt, generally accepted accounting principles require that the difference between the reacquisition price and the net carrying amount of the old debt be deferred and amortized over the shorter of the life of the new debt or the remaining life of the old debt as a component of interest expense. The straight-line method is used for amortization of the deferred gain/loss, and the unamortized portion is shown as an increase or reduction of bonds payable. INTEREST COST In the proprietary funds, interest costs are expensed or capitalized as required by the interest Topic 835, Subtopic 20, Section 30 “Amount of Interest to be Capitalized” of the Financial Accounting Standards Board (FASB) Accounting Standards Codification. 42

4% discount 3% discount 2% discount 1% discount

Due date

March 31, 2012

Delinquent (lien date)

April 1, 2012

Tax certificates sold

Prior to June 1, 2012

APPLICATION OF FASB PRONOUNCEMENTS TO PROPRIETARY FUNDS In accordance with GASB Statement No. 20, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities That Use Proprietary Fund Accounting, the County has elected not to apply private sector guidance issued after November 30, 1989. ACCOUNTING ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimated.

43

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED

NOTE 2 – CASH, CASH EQUIVALENTS AND INVESTMENTS – CONTINUED

UNEARNED REVENUE AND DEFERRED REVENUE

As of September 30, 2012, the County had the following cash, cash equivalents and investments:

In instances where assets have been received by the County for services to be rendered in future periods, asset balances are offset by an unearned revenue liability account in the financial statements. Examples of unearned revenues of the County as of September 30, 2012 are unspent State Housing Initiative Partnership (SHIP) monies and cash receipts associated with unspent advance grant agreements. Deferred revenue liabilities are reported in the governmental funds to offset receivables that do not meet the availability criterion under the modified accrual basis of accounting. Primary examples of the County’s deferred revenues are amounts associated with SHIP loans made to qualifying organizations and deferred impact fee agreements made with developers and individuals. ACCRUED COMPENSATED ABSENCES

C-23

The County follows the provisions of GASB Statement No. 16, Accounting for Compensated Absences. This statement provides for the measurement of accrued vacation leave and other compensated absences using the pay or salary rates in effect at the balance sheet date. It also requires additional amounts to be accrued for certain salary related payments associated with the payment of compensated absences. It is the Board of County Commissioners’ policy to allow employees of record on August 2, 1996 a sick leave payment upon termination for any service period earned prior to August 2, 1996 and a payout of unused vacation up to 440 hours for all employees. The Sheriff’s policy allows for a percentage of unused sick leave payout based upon years of service, not to exceed 1,000 hours, and up to 500 hours of unused vacation time. Both the Clerk of the Circuit Court’s and Tax Collector’s policies allow for a percentage of unused sick leave payout based upon years of service, and up to 240 hours of unused vacation hours. The Property Appraiser’s policy allows for a percentage of unused sick leave payout based upon years of service, not to exceed 1,040 hours, and up to 200 hours of unused vacation hours. The Supervisor of Election’s policy allows for a percentage of unused sick leave payout based upon years of service, and up to 440 hours of unused vacation. Payments for compensated absences are made by the respective fund. Accrued compensated absences are recorded as liabilities in the government-wide financial statements and the proprietary fund financials. A liability is reported in governmental funds only if they have matured, for example, as a result of employee resignations or retirements, and are considered due and payable as of year end. NOTE 2 – CASH, CASH EQUIVALENTS AND INVESTMENTS The County maintains a cash and investment pool that is available for use by all funds. Each fund’s portion of this pool is displayed on the balance sheet under the heading of Cash, Cash Equivalents and Investments. Investment income is allocated monthly to participating funds based on the percentage of each fund's average daily balance in the total pool.

44

Investment Cash on hand Demand deposits State Board of Administration Pool: Florida PRIME Pool B U.S. Treasury Note Federal Farm Credit Bank Federal Farm Credit Bank Federal Home Loan Bank Federal Farm Credit Bank Federal Home Loan Bank Federal Home Loan Mortgage Corp. Note Federal National Mortgage Association Federal National Mortgage Association Federal Home Loan Mortgage Corp. Note Total

Final Maturities

Fair Value

N/A N/A

$

N/A N/A 12/31/2012 01/17/2014 01/27/2014 01/29/2014 01/30/2014 08/13/2014 04/17/2015 04/23/2015 05/22/2015 09/04/2015

First Call Date

Call Frequency Rating *

91,191 321,461,690

N/A N/A

N/A N/A

N/A N/A

723,328 13,303

N/A N/A

N/A N/A

AAAm N/A

none 4/17/2012 4/27/2012 none 1/30/2013 2/13/2013 none 4/23/2013 5/22/2013 none

N/A continuous continuous N/A continuous continuous N/A once continuous N/A

AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+

50,058,500 56,735,567 25,000,250 45,082,350 30,237,997 25,011,000 25,086,000 40,160,800 25,040,000 25,035,000 $ 669,736,976

* Standard and Poor's rating

CREDIT RISK Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The County's investment practices are governed by Florida Statutes, Chapter 218 and the County's Investment Policy. The County’s Investment Policy limits credit risk by restricting authorized investments to the Florida Local Government Surplus Trust Fund (Florida PRIME), direct obligations of, or obligations backed by the full faith and credit of the United States Government, U.S. government sponsored Corporation/Instrumentalities (except for Student Loan Marketing Association), certificates of deposit collateralized by U.S. Government Securities or Agencies, fixed income mutual funds collateralized by U.S. Government Securities or Agencies, domestic bankers’ acceptances rated “AA” or higher, prime commercial paper rated “A-1” and “P-1”, tax-exempt obligations rated “AA” or higher and issued by state or local governments, NOW accounts fully collateralized in accordance with Chapter 280, Florida Statutes and qualifying repurchase agreements. The policy requires that each firm involved in a repurchase agreement must execute the County’s master repurchase agreement, a third party custodian must hold collateral for all repurchase agreements with a term of more than one day and the market value of the collateral shall maintain a minimum price of 101 percent on U.S. Government securities and 104 percent on Agencies and Instrumentalities with a term over five (5) years, and must be marked to market at least weekly. The Florida PRIME is an investment pool administered by the State Board of Administration (SBA), under the regulatory oversight of the State of Florida. The SBA operates two pools, Florida PRIME and Fund B Surplus Trust Fund (Fund B), with the Florida PRIME carrying a AAAm rating from Standard & Poor’s. 45

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE 2 – CASH, CASH EQUIVALENTS AND INVESTMENTS - CONTINUED

NOTE 2 – CASH, CASH EQUIVALENTS AND INVESTMENTS – CONTINUED

CREDIT RISK – CONTINUED

CONCENTRATION OF CREDIT RISK – CONTINUED

At September 30, 2012, the Sheriff had $736,631 invested in the State Board of Administration’s Local Government Surplus Funds Trust Fund Investment Pool. Of this amount, $723,328 is invested in the Florida PRIME and $13,303 in Fund B. The Florida PRIME investment is fully liquid and carries a weighted average days to maturity of 39 days. Fund B is accounted for as a fluctuating net asset value pool and the fair value factor for September 30, 2012 was .95. Fund B has a weighted average life of 4.08 years. Fund B cash holdings continue to be distributed to participants as they become available from maturities, sales and income received.

The portion of the County’s portfolio invested in U.S. Government Instrumentalities is detailed as follows, at September 30, 2012:

All cash deposits are held in qualified public depositories pursuant to Florida Statutes Chapter 280, "Florida Security for Public Deposits Act". Under the Act, all qualified public depositories are required to pledge eligible collateral having a market value equal to or greater than the average daily or monthly balance of all public deposits, multiplied by the depository's collateral pledging level. The pledging level may range from 25% to 200% depending upon the depository's financial condition. Any losses to public deposits are covered by applicable deposit insurance, sale of securities pledged as collateral, and if necessary, assessments against other qualified public depositories of the same type as the depository in default.

C-24

CUSTODIAL CREDIT RISK The policy requires execution of a third-party custodial safekeeping agreement for purchased securities and collateral, and requires that securities be held in the County’s name. At September 30, 2012, the County had demand deposits of $321,461,690. These demand deposits do not include discretely presented component unit deposits of $326,518. All balances in excess of the Federal Depository Insurance Corporation insurance for demand deposits are fully collateralized by the multiple financial institutions’ collateral pool in accordance with Florida Statutes Section 280.

Percent of Portfolio

Issuer Federal Home Loan Bank Federal Farm Credit Bank Federal Home Loan Mortgage Corporation Federal National Mortgage Association

10.47% 16.72% 7.48% 9.74%

Total U.S. Government Instrumentalities

44.41%

Reconciliation of cash, cash equivalents and investments to the basic financial statements: Primary government: Cash, cash equivalents and investments Restricted cash, cash equivalents and investments - current Restricted cash, cash equivalents and investments - noncurrent

$

379,474,292 23,428,190 234,508,506

$

669,736,976

Agency funds: Cash, cash equivalents and investments

32,325,988

Total

NOTE 3 - TRADE RECEIVABLES Trade receivables for Governmental and Business-type Activities are net of an allowance for doubtful accounts as follows:

INTEREST RATE RISK Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. One of the primary objectives of the investment policy is to match investment cash flow and maturity with known cash needs and anticipated cash flow requirements. The County limits exposure to interest rate risk by structuring the portfolio to meet daily cash flow demands. Investments shall have an average maturity of not more than five years, except for mortgage securities. Mortgage securities will not be used to match liabilities that are reasonably definable as to amount and disbursement date and are used to invest funds associated with reserves or liabilities that are not associated with a specifically identified cash flow schedule. CONCENTRATION OF CREDIT RISK The County’s investment policy establishes limitations on portfolio composition in order to control credit risk. The policy allows 100 percent of the portfolio to be invested in U.S. Government Securities, Agencies and Instrumentalities (excluding mortgage securities), 50 percent to be invested in Florida PRIME, 30 percent to be invested in certificates of deposit, 20 percent to be invested in qualifying repurchase agreements and 10 percent each in the categories of fixed income mutual funds, domestic bankers’ acceptances, prime commercial paper and tax-exempt obligations. 46

General Fund Government Facilities Impact Fee Nonmajor Governmental Funds Total receivables reported in Governmental Funds

Trade Receivables $ 509,731 3,009 2,401,078 2,913,818

Total receivables reported in Internal Service Funds Total Governmental Activities trade receivables

$

County Water and Sewer Solid Waste Disposal Nonmajor Enterprise Funds Total Business-type Activities trade receivables

$

$

47

153,260 3,067,078 5,957,089 805,083 2,939,270 9,701,442

Allowance for Doubtful Accounts $ 92,321 666,238 758,559

$ $

$

15,639 774,198 82,765 17,374 100,139

Net Trade Receivables $ 417,410 3,009 1,734,840 2,155,259

$ $

$

137,621 2,292,880 5,874,324 805,083 2,921,896 9,601,303

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE 3 - TRADE RECEIVABLES – CONTINUED

NOTE 4 - INTERFUND PAYABLES AND RECEIVABLES – CONTINUED

The County has multi and single-family home rehabilitation and homeownership loan programs funded under the Community Development Block Grant (CDBG), HOME Investment Partnership Loan Program (HOME), Disaster Recovery Initiative (DRI), Neighborhood Stabilization Program (NSP) and the State Housing Initiative Partnership Program (SHIP). If the homeowners remain in their homes for the full term of the deferred loan, the loan is forgiven. If the property is transferred or sold before the end of the loan period, the proceeds from the repayment including interest, if any, are then repaid and returned to the appropriate grant program. A lien is placed against the property to ensure the repayment of the loan and interest, if any. As collection is uncertain on these loans, they are not recognized in the financial statements.

DUE FROM AND DUE TO

NOTE 4 - INTERFUND PAYABLES AND RECEIVABLES ADVANCES Advances to and advances from other funds at September 30, 2012 were as follows:

C-25

Advance To Governmental Activities: General Fund Government Facilities Impact Fees Fund Other governmental funds: Community Development Fund Capital Improvement Revenue Bonds Fund Parks Improvement Fund County-Wide Capital Improvements Fund County-Wide Library Impact Fees Fund Correctional Facilities Impact Fees Fund Emergency Medical Services Impact Fees Fund Law Enforcement Impact Fees Fund Total Governmental Activities Business-type Activities: County Water and Sewer Solid Waste Disposal Total Business-type Activities Total Advances

$ 12,726,925 -

Advance From $

22,992,791

900,000 41,136,500 54,763,425

900,000 10,401,508 9,715,125 5,364,500 2,760,800 16,467,600 68,602,324

10,401,508 3,437,391 13,838,899

-

$ 68,602,324

$ 68,602,324

Advances are made to funds for the purposes of capital improvements and the funding of certain surety requirements. Reimbursements will take place over the next several years as funds are available.

48

Interfund receivables and payables generally result from recording the excess fees associated with Tax Collector and Property Appraiser services, as excess fees are allocated from the General Fund back to the funds that paid for the collection services. Excess fees are calculated after year end, and as such are interfund receivables and payables. Other outstanding balances are the result of time delays between the provision and payment of interfund services and to cover temporary cash deficits. Due from and due to other funds at September 30, 2012 were as follows:

Governmental Activities: General Fund Other Governmental Funds: Road Districts Bayshore Gateway Community Redevelopment Agency Immokalee Community Redevelopment Agency Unincorporated Area MSTD Community Development Water Management and Pollution Control Grants and Shared Revenues Improvement Districts Fire Control Districts Lighting Districts 911 Enhancement Fee Tourist Development State Court Administration Confiscated Property Conservation Collier Other Special Revenue Funds Conservation Collier Limited General Obligation Bonds Forest Lakes Limited General Obligation Bonds Other Debt Service Water Management Road Impact Districts Road Construction Total other governmental funds Business-type Activities: County Water and Sewer Solid Waste Other Business-type funds: Emergency Medical Services Airport Authority Collier Area Transit Total other business-type funds Internal Service Funds Total All Funds

49

Due From

Due To

$ 4,388,457

$ 1,150,808

1,483 280,839 423,961 251,659 42,888 84,284 34,552 26,628 8,475 11,457 205,263 52,183 4,375 835 165,844 278,340 3,031,046 4,904,112

19 355 12,121 375 4,860,042 1,770 737,295 841 10,998 81,798 115,100 16 496 500,037 269,257 6,590,520

38,186 -

88,543 11

1,529 268,145 269,674 725,764 $ 10,326,193

82 2,404,328 2,404,410 91,901 $ 10,326,193

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE 5 – CAPITAL ASSETS

NOTE 5 – CAPITAL ASSETS – CONTINUED

A summary of capital asset activity for the year ended September 30, 2012 is as follows:

Schedule of depreciation for fiscal year 2012:

October 1, 2011 Governmental Activities: Capital assets not depreciated: Land and other non-depreciable assets Construction in progress Total capital assets not depreciated

$

384,467,144 85,885,755 470,352,899

Additions

$

2,073,460 38,993,555 41,067,015

Deductions

$

September 30, 2012

Reclassifications

- $ (1,443,560) (1,443,560)

- $ (11,888,071) (11,888,071)

386,540,604 111,547,679 498,088,283

C-26

Capital assets depreciated: Buildings Infrastructure Improvements other than buildings Machinery and equipment Total capital assets depreciated

434,244,700 901,113,808 212,175,942 166,227,305 1,713,761,755

12,990 635,834 781,649 7,878,813 9,309,286

(42,411) (25,871) (1,439,268) (5,103,414) (6,610,964)

309,239 (42,302,796) 49,839,443 9,254,851 17,100,737

434,524,518 859,420,975 261,357,766 178,257,555 1,733,560,814

Less accumulated depreciation: Buildings Infrastructure Improvements other than buildings Machinery and equipment Total accumulated depreciation

109,385,172 258,890,781 70,125,301 125,870,871 564,272,125

13,585,646 28,925,644 10,465,244 15,285,346 68,261,880

(13,756) (25,871) (380,262) (4,189,773) (4,609,662)

5,130 (43,948,738) 45,335,594 3,820,680 5,212,666

122,962,192 243,841,816 125,545,877 140,787,124 633,137,009

(58,952,594)

(2,001,302)

11,888,071

1,100,423,805

-

$ 1,598,512,088

Total depreciable capital assets, net Total Governmental Activities capital assets, net Business-type Activities: Capital assets not depreciated: Land and other non-depreciable assets Construction in progress Total capital assets not depreciated

1,149,489,630 $ 1,619,842,529

$ (17,885,579) $ (3,444,862) $

$

$

$

9,444,681 14,440,377 2,103,475 31,440,278 31,255 399,610 8,388,571 66,248,247

$

68,186,729

$

33,477,602 938,682 683,509 954,392 987,212

$

37,041,397

Internal Service Funds

1,938,482

Total Governmental Activities Water and Sewer Solid Waste EMS Airport Authority Mass Transit Total Business-type Activities

NOTE 6 - LONG-TERM OBLIGATIONS SUMMARY OF CHANGES IN LONG-TERM OBLIGATIONS The following is a summary of changes in long-term obligations for the year ended September 30, 2012:

25,111,349 64,571,925 89,683,274

107,741 25,307,886 25,415,627

$

- $ (1,222,932) (1,222,932)

- $ (26,709,342) (26,709,342)

25,219,090 61,947,537 87,166,627

Capital assets depreciated: Buildings Improvements other than buildings Machinery and equipment Total capital assets depreciated

138,910,220 985,723,759 33,862,767 1,158,496,746

1,663 3,838,766 4,027,706 7,868,135

(1,108,608) (1,108,608)

(9,955,188) 34,967,229 3,884,037 28,896,078

Less accumulated depreciation: Buildings Improvements other than buildings Machinery and equipment Total accumulated depreciation

67,033,115 272,631,830 20,841,309 360,506,254

3,551,515 30,814,697 3,067,213 37,433,425

(1,087,019) (1,087,019)

135,434 118,904 1,932,398 2,186,736

70,720,064 303,565,431 24,753,901 399,039,396

797,990,492

(29,565,290)

(21,589)

26,709,342

795,112,955

Total depreciable capital assets, net Total Business-type Activities capital assets, net

General Government Public Safety Physical Environment Transportation Economic Environment Human Services Culture and Recreation Subtotal

$

887,673,766

$

(4,149,663) $ (1,244,521) $

50

-

128,956,695 1,024,529,754 40,665,902 1,194,152,351

$

882,279,582

000's Omitted October 1, 2011

Additions

Reductions

Premium or Discount/Loss Amortized, net

Governmental Activities: Bonds and Loans Payable Premium/Discount, net Deferred Loss Capital Lease Obligations Self-Insurance Claims Net OPEB Obligation Compensated Absences Total

$ 433,234 $ 131,525 $ (168,920) $ 16,045 17,192 (5,508) (1,827) (9,737) 269 236 (93) 7,642 (241) 1,579 1,902 (1,783) 23,626 7,735 (8,258) $ 480,568 $ 148,853 $ (184,803) $

Business-type Activities: Bonds and Loans Payable Premium Deferred Loss Notes Payable Capital Lease Obligations Landfill Closure Liability Compensated Absences Total

$ 243,463 $ 4,153 (4,175) 69 387 1,824 2,540 $ 248,261 $

2,310 2,310

$

$

51

(12,269) $ (212) (29) (2,276) (14,786) $

September 30, 2012

- $ (1,877) 676 (1,201) $ - $ (293) 472 179 $

395,839 25,852 (10,888) 412 7,401 1,698 23,103 443,417

Due within one year $

$

23,682 89 5,889 10,817 40,477

231,194 $ 3,860 (3,703) 69 175 1,795 2,574 235,964 $

11,645 69 135 1,802 13,651

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE 6 - LONG-TERM DEBT - CONTINUED

NOTE 6 - LONG-TERM DEBT - CONTINUED

DESCRIPTIONS OF BONDS, LOANS AND NOTES PAYABLE

DESCRIPTIONS OF BONDS, LOANS AND NOTES PAYABLE – CONTINUED

Bonds, loans and notes payable at September 30, 2012 were composed of the following:

$24,620,000 2010B Special Obligation Revenue Bonds, due in annual installments of $1,830,000 to $2,630,000 through October 1, 2021; interest at 3.00% to 5.00% and collateralized by pledge on legally available non-ad valorem revenues, including but not limited to the proceeds of the local government half cent sales tax, state revenue sharing, communications services tax and charges and services generated by governmental activities.

GOVERNMENTAL ACTIVITIES Governmental Activities Limited General Obligation Bonds $32,815,000 2005A Limited General Obligation Bonds, Conservation Collier Program, due in annual installments of $3,285,000 to $4,805,000 through January 1, 2013; interest at 3.00% to 5.00% and collateralized by a limited ad valorem pledge of up to .25 mils. $6,215,000 2007 Limited General Obligation Bonds, Forest Lakes Roadway and Drainage Municipal Service Taxing Unit, due in installments of $300,000 to $540,000 through January 1, 2022; interest at 3.75% to 4.25% and collateralized by a limited ad valorem pledge of up to 4 mils. Total Governmental Activities Limited General Obligation Bonds

$

4,805,000

4,535,000 $

9,340,000

C-27

$167,200,000 2005 Capital Improvement and Refunding Revenue Bonds due in annual installments of $4,395,000 to $7,240,000 through October 1, 2035; interest at 4.375% to 4.625% and collateralized by a pledge on the proceeds of the local government half-cent sales tax.

$

8,605,000

61,145,000

$102,125,000 2003 Gas Tax Revenue Bonds, due in annual installments of $2,585,000 and $3,660,000 on June 1, 2013; interest at 3.70% and 5.25%, respectively, and collateralized by a pledge on the combined gas tax proceeds.

6,245,000

$96,255,000 2005 Gas Tax Revenue Bonds, due in annual installments of $445,000 to $13,985,000 through June 1, 2025; interest at 3.00% to 5.00% and collateralized by a pledge on the combined gas tax proceeds.

90,600,000

$38,680,000 2012 Gas Tax Revenue Bonds, due in annual installments of $2,700,000 to $6,605,000 through June 1, 2023; interest at 3.00% to 5.00% and collateralized by a pledge on the combined gas tax proceeds.. $59,895,000 2010 Special Obligation Revenue Bonds, due in annual installments of $1,545,000 to $3,860,000 through July 1, 2034; interest at 3.00% to 4.50% and collateralized by pledge on legally available non-ad valorem revenues, including but not limited to the proceeds of the local government half cent sales tax, state revenue sharing, communications services tax and charges and services generated by governmental activities.

52

22,045,000

$

376,275,000

$

9,686,000

$

10,224,427

Total Governmental Activities Obligations

$

395,839,427

Unamortized Bond Discount

$

$92,295,000 2011 Special Obligation Revenue Bonds, due in annual installments of $1,605,000 to $8,270,000 through October 1, 2029; interest at 2.50% to 5.00% and collateralized by pledge on legally available non-ad valorem revenues, including but not limited to the proceeds of the local government half cent sales tax, state revenue sharing, communications services tax and charges and services generated by governmental activities. Total Governmental Activities Revenue Bonds

92,295,000

Governmental Activities Notes Payable $13,500,000 Bayshore Gateway Community Redevelopment Agency Taxable Note, due September 1, 2014; monthly variable interest rate of 30-Day LIBOR plus 3.75% and collateralized by a pledge on all legally available non-ad valorem revenues of the Bayshore Gateway Community Redevelopment Agency.

Governmental Activities Revenue Bonds $49,360,000 2003 Capital Improvement and Refunding Revenue Bonds due in annual installments of $2,005,000 to $2,300,000 through October 1, 2033; interest at 4.75% and collateralized by a pledge on the proceeds of the local government half-cent sales tax.

$

$550,000 2012 Limited General Obligation Note, Radio Road East Municipal Service Taxing Unit, due in installments of $3,847 to $5,408 through June 1, 2022; interest at 3.44% and collateralized by a limited ad valorem pledge of up to .5 mils. Total Governmental Activities Notes Payable

538,427

Unamortized Bond Premium Deferred Loss on Bond Refunding

38,680,000

(58,084) 25,909,714 (10,888,204)

Governmental Activities Obligations, Net

410,802,853

Less Current Portion of Governmental Activities Obligations

(23,682,299)

Long-Term Portion of Governmental Activities Obligations, Net

$

387,120,554

$

21,690,000

BUSINESS-TYPE ACTIVITIES Business-type Activities Revenue Bonds 56,660,000

$33,630,000 2003B County Water and Sewer Refunding Revenue Bonds due in annual installments of $1,410,000 to $4,125,000 through July 1, 2021; interest at 4.25% to 5.50% and collateralized by a lien on and a pledge of net revenues of the Collier County Water and Sewer District.

53

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE 6 - LONG-TERM DEBT - CONTINUED

NOTE 6 - LONG-TERM DEBT - CONTINUED

DESCRIPTIONS OF BONDS, LOANS AND NOTES PAYABLE – CONTINUED

DESCRIPTIONS OF BONDS, LOANS AND NOTES PAYABLE – CONTINUED

$110,165,000 2006 Collier County Water and Sewer Revenue Bonds due in annual installments of $2,310,000 to $8,695,000, commencing July 1, 2017 through July 1, 2036; interest at 4.00% to 5.00% and collateralized by a lien on and a pledge of net revenues of the Collier County Water and Sewer District. $11,727,489 2009 Collier County Water and Sewer Revenue Bonds due in annual installments of $1,569,324 to $1,817,005, commencing July 1, 2010 through July 1, 2016; interest at 2.97% and collateralized by a lien on and a pledge of net revenues of the Collier County Water and Sewer District.

Total Business-type Activities Revenue Bonds

$

110,165,000

$

138,825,072

$

69,190

6,970,072

Business-type Activities Loans and Notes Payable $166,580 County Water and Sewer District agreement with private developer payable through use of sewer system development fee credits. Non-interest bearing agreement.

C-28

$13,292,898 County Water and Sewer District State Revolving Fund Loan, interest payable at 2.65% payable in 40 semiannual payments commencing January 15, 1999 and collateralized by a subordinated pledge on the net revenues of the Collier County Water and Sewer District.

4,879,635

$22,238,677 County Water and Sewer District State Revolving Fund Loan, interest payable at 3.05% payable in 40 semiannual payments commencing November 15, 2001 and collateralized by a subordinated pledge on the net revenues of the Collier County Water and Sewer District.

11,434,038

$5,160,675 County Water and Sewer District State Revolving Fund Loan, interest payable at 3.05% payable in 40 semiannual payments commencing October 15, 2004 and collateralized by a subordinated pledge on the net revenues of the Collier County Water and Sewer District.

$5,188,500 County Water and Sewer District State Revolving Fund Loan, interest payable at 2.74% payable in 40 semiannual payments commencing November 15, 2007 and collateralized by a subordinated pledge on the net revenues of the Collier County Water and Sewer District. $7,123,496 County Water and Sewer District State Revolving Fund Loan, interest payable at 2.75% and 2.64% payable in 40 semiannual payments commencing April 15, 2008 and collateralized by a subordinated pledge on the net revenues of the Collier County Water and Sewer District. $17,577,022 County Water and Sewer District State Revolving Fund Loan, interest payable at 2.64% and 2.79% payable in 40 semiannual payments commencing August 15, 2008 and collateralized by a subordinated pledge on the net revenues of the Collier County Water and Sewer District. $11,637,070 County Water and Sewer District State Revolving Fund Loan, interest payable at 2.64% and 2.79% payable in 40 semiannual payments commencing October 15, 2009 and collateralized by a subordinated pledge on the net revenues of the Collier County Water and Sewer District.

4,397,261

10,454,542

2,525,875

Total Business-type Activities Loans and Notes Payable

$

92,437,866

Total Business-type Activities Obligations

$

231,262,938 3,860,586

Deferred Loss on Bond Refunding

(3,702,493) $

Less Current Portion of Business-type Activities Obligations Payable from Unrestricted Assets

21,524,054

$10,525,509 County Water and Sewer District State Revolving Fund Loan, interest payable at 2.90% payable in 40 semiannual payments commencing September 15, 2006 and collateralized by a subordinated pledge on the net revenues of the Collier County Water and Sewer District.

7,421,050

$5,445,223 County Water and Sewer District State Revolving Fund Loan, interest payable at 2.92% payable in 40 semiannual payments commencing December 15, 2005 and collateralized by a subordinated pledge on the net revenues of the Collier County Water and Sewer District.

3,904,319

Long-Term Portion of Business-type Activities Obligations, Net

55

231,421,031 (9,152,712)

Less Current Portion of Business-type Activities Obligations Payable from Restricted Assets

$29,224,004 County Water and Sewer District State Revolving Fund Loan, interest payable at 2.95% payable in 40 semiannual payments commencing June 15, 2006 and collateralized by a subordinated pledge on the net revenues of the Collier County Water and Sewer District.

54

14,618,876

Unamortized Bond Premium

3,461,104

3,259,793

4,488,129

$3,294,890 County Water and Sewer District State Revolving Fund Loan, interest payable at 2.79% payable in 40 semiannual payments commencing December 15, 2009 and collateralized by a subordinated pledge on the net revenues of the Collier County Water and Sewer District.

Business-type Activities Obligations, Net

$6,560,956 County Water and Sewer District State Revolving Fund Loan, interest payable at 3.05% payable in 40 semiannual payments commencing January 15, 2005 and collateralized by a subordinated pledge on the net revenues of the Collier County Water and Sewer District.

$

(2,561,752) $

219,706,567

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE 6 - LONG-TERM DEBT - CONTINUED

NOTE 6 - LONG-TERM DEBT – CONTINUED

SUMMARY OF DEBT SERVICE REQUIREMENTS TO MATURITY

RESTRICTIVE COVENANTS - CONTINUED

The total annual debt service requirements to maturity of long-term debt, excluding compensated absences, capitalized leases, premiums, discounts and arbitrage rebate liability, are as follows:

During fiscal year 2008 insurer ratings were downgraded on the 2003 and 2005 Capital Improvement and Refunding Revenue Bonds. The covenants related to these issues require that in the event of a downgrade below “A”, by either Moody’s or Standard and Poor’s, the County must fund a cash reserve to replace the surety within twelve months. The County used internal loans from the County Water and Sewer fund to achieve the required reserve funding. A subsequent partial refinancing of the Series 2003 and Series 2005 Capital Improvement Revenue Bonds decreased the cash reserve requirement. See Note 8, Defeased Debt for more information. The current reserve requirement of $10,401,508 is funded as of September 30, 2012. Interest earned on the reserve is assigned to the funds from which the advances were made and the reserve amount is included in non-current restricted cash, cash equivalents and investments in the Statement of Net Assets. All required principal and interest payments have been made in a timely manner on the Series 2003 and 2005 Capital Improvement and Refunding Revenue Bonds.

Governmental Activities Fiscal Year

Limited General Obligation Bonds Principal

Revenue Bonds

Interest

2013 2014 2015 2016 2017 2018-22 2023-27 2028-32 2033-37

$ 5,185,000 390,000 410,000 425,000 440,000 2,490,000 -

$

298,525 163,475 147,475 130,775 113,475 272,700 -

Totals

$ 9,340,000

$ 1,126,425

C-29

Fiscal Year

Principal $

17,550,000 17,185,000 17,260,000 18,080,000 18,940,000 109,085,000 91,210,000 50,475,000 36,490,000

$ 376,275,000

Revenue Bonds Principal

2013 2014 2015 2016 2017 2018-22 2023-27 2028-32 2033-37

$

5,422,044 5,630,093 5,885,930 3,942,005 3,720,000 21,270,000 26,640,000 33,695,000 32,620,000

Totals

$ 138,825,072

$

16,862,835 16,210,789 15,505,362 14,680,663 13,811,574 54,518,822 28,937,237 14,965,516 3,111,900

$ 178,604,698

Principal $

947,299 8,834,951 50,662 52,433 54,265 284,817 -

$ 10,224,427

6,267,614 6,058,578 5,792,443 5,533,892 5,363,053 24,145,863 18,774,700 11,723,262 3,707,963

Principal $

6,292,420 6,438,072 6,624,505 6,816,353 7,013,778 33,044,138 23,605,236 2,603,364 -

Totals

Interest $

655,257 591,736 14,417 12,646 10,814 24,310 -

$ 1,309,180

Business-type Activities Loans and Notes Payable

Interest $

Notes Payable

Interest

$

41,498,916 43,375,951 33,387,916 33,381,517 33,370,128 166,675,649 120,147,237 65,440,516 39,601,900

$ 576,879,730

Totals

Interest $

2,598,891 2,418,402 2,231,968 2,040,119 1,842,695 6,229,006 1,922,184 73,214 -

$

20,580,969 20,545,145 20,534,846 18,332,369 17,939,526 84,689,007 70,942,120 48,094,840 36,327,963

During fiscal year 2012, Collier County issued the Series 2011 Special Obligation Revenue Bonds. According to the official statements and County resolutions authorizing the issuance of these bonds, the County has covenanted, subject to certain restrictions and limitations, to appropriate in its annual budget, by amendment, if necessary, from non-ad valorem revenues amounts sufficient to pay the principal and interest on the Series 2011 Bonds. Tax increment revenues and a covenant to budget and appropriate from all legally available CRA non-ad valorem revenues is pledged for the repayment of the Bayshore Gateway Community Redevelopment Agency’s taxable note. The average of actual receipts and cash carried forward from the previous year must cover annual debt service requirements by 125%. The agency was in compliance with this covenant for the year ended September 30, 2012.

According to the official statements and County resolutions authorizing the issuance of the Series 2003 and 2005 Capital Improvement Revenue and Refunding Revenue Bonds, as well as the Series 2003 and 2005 Gas Tax Revenue Bonds, the issues are payable from and secured by liens on the local government half-cent sales tax and gas tax revenues, respectively.

Water and sewer revenue bonds are payable solely from and secured by a first lien upon and pledge of the net revenues and certain other fees and charges derived from operation of the County's water and sewer system. The pledge of net revenues derived by the County from the operation of the system does not constitute a lien upon the system or any other property of the County. The covenants of the resolutions authorizing the County Water and Sewer District Bonds, Series 2009, Series 2006 and 2003B include an obligation for the County to fix, establish and maintain such rates and collect such fees, rentals or other charges for the services and facilities of the water and sewer system, and to revise the same whenever necessary, so as to provide in each year net revenues, as defined in the resolutions authorizing the revenue bonds, which together with system development fees and special assessment proceeds received shall be adequate to pay at least 125% of the annual debt service requirements for the Water and Sewer Bonds; provided, however, that net revenues in each fiscal year shall be adequate to pay at least 100% of the annual debt service for the bonds. In addition, bond covenants require a renewal and replacement amount equal to $300,000 to be set aside in the County Water and Sewer District Funds. The water and sewer funds were in compliance with these covenants for the year ended September 30, 2012.

56

57

$ 87,367,368

$ 92,437,866

$ 19,356,479

$ 337,986,785

LEGAL DEBT MARGIN The Constitution of the State of Florida and the Florida Statutes set no legal debt limit. RESTRICTIVE COVENANTS

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE 6 - LONG-TERM DEBT – CONTINUED

NOTE 6 - LONG-TERM DEBT – CONTINUED

RESTRICTIVE COVENANTS - CONTINUED

Future minimum capital lease obligations as of September 30, 2012 were as follows:

The Collier County Water and Sewer District has several State Revolving Fund loans outstanding with the Florida Department of Environmental Protection. These loans are collateralized by a lien on pledged revenues consisting of net revenues from the operations of the County Water and Sewer System and system development fees. The lien shall be subordinate in all respects to liens placed upon pledged revenues established by bonded indebtedness. The County Water and Sewer District shall maintain rates and charges for services which together with system development fees are sufficient to pay 115% to 125%, depending upon the individual loan agreement, of the annual debt service requirements on the loans, as well as satisfy the coverage requirements of all senior debt obligations. The County Water and Sewer District State Revolving funds were in compliance with these covenants for the year ended September 30, 2012.

2013 2014 2015 2016 2017 2018-22

Interest costs on the long-term debt of business-type activities, including capitalized leases, incurred and capitalized during the year ended September 30, 2012 were as follows:

C-30

Total Interest Cost Incurred $

8,883,047

Interest Cost Capitalized $

222,060

Net Interest Expense $

8,660,987

$

107,622 107,622 64,933 29,702 29,702 148,512

Total minimum lease payments

488,093

Less amount representing interest

(76,451)

Present value of minimum lease payments

INTEREST CAPITALIZED

Business-type Activities

Governmental Activities

$

411,642

Business-type Activities $

140,405 41,576 -

Total $

181,981

670,074

(7,416) $

174,565

248,027 149,198 64,933 29,702 29,702 148,512

(83,867) $

586,207

The County also leases office space, office equipment and storage space under operating leases. These leases expire or are cancellable within the next fiscal year. In the normal course of operations these leases will be renewed or replaced by other leases. Total rental expenditures for all operating leases within the governmental activities for the year ended September 30, 2012 were $926,871. Total rental expenditures for all operating leases within business-type activities governmental activities for the year ended September 30, 2012 were $175,186.

Interest expense is shown as a direct expense of the Business-type Activities. NOTE 7 - CONDUIT DEBT OBLIGATIONS LEASE OBLIGATIONS

COMPONENT UNIT CONDUIT DEBT

Capitalized leases payable at September 30, 2012 amounted to $586,207. These obligations, which are collateralized by equipment and vehicles, have total annual installments ranging from $29,702 to $248,027 including interest ranging from 4.26% to 4.85% and mature through 2022. As of year-end, equipment leased under capital leases in the governmental activities had a historical cost of $1,114,847 and accumulated depreciation of $881,538. Equipment leased under capital leases in the business-type activities had a historical cost of $1,061,529 and accumulated depreciation of $705,895.

The Industrial Development Authority, Housing Finance Authority, Health Facilities Authority and Educational Facilities Authority, all component units of Collier County, issue debt instruments for the purpose of providing capital financing to independent third parties. Industrial development revenue bonds have been issued to provide financial assistance to public entities for the acquisition and construction of industrial and commercial facilities. Housing revenue bonds have been issued for the purpose of financing the development of multi-family residential rental communities. The health facility revenue bonds were issued to provide financing for the construction of health park facilities. The educational facility revenue bonds were used to provide financing for the construction of educational facilities. These bonds were secured by the financed property, a letter of credit or a corporate guarantee. The primary revenues pledged to pay the debt are those revenues derived from the project or facilities constructed. Neither the issuer, nor the County, is obligated in any manner for repayment of the bonds and as such they are not reported as liabilities in the accompanying financial statements.

58

59

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE 7 - CONDUIT DEBT OBLIGATIONS – CONTINUED

NOTE 9 – PENSION PLAN OBLIGATIONS

As of September 30, 2012 the outstanding principal amount payable on all component unit conduit debt was $206,976,446 and is made up of the following:

RETIREMENT PLAN

Industrial development revenue bonds Housing finance revenue bonds Health facilities revenue bonds Educational facilities revenue bonds

$

Total

$ 206,976,446

Substantially all full time and part time employees of the County are eligible to participate in the State of Florida Retirement System (the System), a cost sharing, multiple employer program administered by the State of Florida, Division of Retirement. The System provides two retirement plans from which eligible employees can choose: the Pension Plan (defined benefit) and the Investment Plan (defined contribution). The County follows the provisions of GASB 27, Accounting for Pensions by State and Local Governmental Employers, as described in the following disclosure.

30,526,446 28,025,000 80,775,000 67,650,000

PLAN DESCRIPTION NOTE 8 - DEFEASED DEBT The County has defeased certain outstanding bonds by placing the proceeds of new bonds in irrevocable trusts to provide for all future debt service payments on the defeased debt. Accordingly, the trust accounts and the defeased bonds are not included in the County's financial statements. At September 30, 2012 the following issues were considered defeased:

C-31

Original Debt Defeased

Governmental Activities 1986 Capital Improvement Program Revenue Bonds, Sub-Series 5 Mode A 2003 Gas Tax Revenue Bonds 2003 Capital Improvement and Refunding Revenue Bonds 2005 Capital Improvement and Refunding Revenue Bonds Total Governmental Activities Defeased Debt

$

12,245,000

$

41,395,000 29,810,000 70,565,000 154,015,000

Defeased Bonds Outstanding $

2,555,000

$

41,395,000 29,305,000 70,565,000 143,820,000

On January 9, 2012 Collier County issued the Series 2011 Special Obligation Refunding Revenue Bonds in the par amount of $92,295,000. These bonds were issued for the purpose of advance refunding a portion of the County’s outstanding Capital Improvement and Refunding Revenue Bonds, Series 2003 and 2005. The final maturity of the bonds is October 1, 2029, with interest rates of 2.50% to 5.00%. The refunding achieved a net present value savings of 5.05% on the refunded bonds. The partial refinancing of the Series 2003 and 2005 Bonds, and their attendant restrictive covenants, caused the required cash reserve surety replacement relating to the Series 2003 and 2005 bonds to decrease from $15,717,300 to $10,401,508, or $5,315,792. The advance refunding achieved an aggregate debt service savings of $5,832,503 and an economic gain of $5,500,688. The Series 2003 and 2005 bonds have redemption dates of October 1, 2013 and October 1, 2014, respectively.

Employees hired prior to July 1, 2011 participating in the Pension Plan who retire at or after age 62 with 6 years of credited service for regular risk or with 30 years of service regardless of age, are entitled to a retirement benefit, payable monthly for life, equal to 1.6% for regular employees, 2.0% for senior management, and 3.0% for county elected officials of their final average compensation for each year of credited service; and for special risk, after age 55 with 6 years or with 25 years of service regardless of age, are entitled to a retirement benefit payable monthly for life, up to 3.0% for each year of credited service times their final average compensation. Final average compensation is the employee’s average of the five highest years of salary earned during credited service. Vested employees may retire before age 62 for regular risk and 55 for special risk and receive retirement benefits that are reduced 5.0% for each year prior to normal retirement age. Employees hired on July 1, 2011 or later participating in the Pension Plan who retire at or after age 65 with 8 years of credited service for regular risk or with 33 years of service regardless of age, are entitled to a retirement benefit, payable monthly for life, equal to 1.6% for regular employees, 2.0% for senior management, and 3.0% for county elected officials of their final average compensation for each year of credited service; and for special risk, after age 60 with 8 years or with 30 years of service and age 57 or after 30 years of special risk service regardless of age, or after 33 years of any creditable service are entitled to a retirement benefit payable monthly for life. Vested employees may retire before age 65 for regular risk and 60 for special risk and receive retirement benefits that are reduced 5.0% for each year prior to normal retirement age. Employees participating in the investment plan are vested after one year of service with no age requirement. The System also provides death and disability benefits. Benefits are established by Chapter 121, Florida Statutes and Chapter 22B, Florida Administrative Code. The Florida Legislature has sole authority to amend benefit provisions.

On June 5, 2012 Collier County issued the Series 2012 Gas Tax Refunding Revenue Bonds in the par amount of $38,680,000. These bonds were issued for the purpose of advance refunding a portion of the County’s outstanding Series 2003 Gas Tax Revenue Bonds. The final maturity of the bonds is June 1, 2023, with interest rates of 3.00% to 5.00%. The refunding achieved a net present value savings of 9.21% on the refunded bonds. The advance refunding also achieved an aggregate debt service savings of $4,361,010 and an economic gain of $4,066,098. The Series 2003 bonds have a redemption date of June 1, 2013.

The Deferred Retirement Option Program (DROP) is a program that provides an alternative method for payment of retirement benefits for a specified and limited period for members of the System, effective July 1, 1998. Under this program, the employee may retire and have their benefits accumulate in the Florida Retirement System Trust Fund, earning interest, while continuing to work for a System employer. Employees enrolled in DROP prior to July 1, 2011 earn interest on accumulated benefits in the Trust Fund at 6.5%; those enrolling on or after July 1, 2011 earn interest at 1.30%. The act of participating in the program does not change the individual employee’s employment conditions.

60

61

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE 9 – PENSION PLAN OBLIGATIONS - CONTINUED

NOTE 10 – TRANSFERS

When the DROP period ends, a maximum of 60 months, employment must be terminated. At the time of termination of employment, the employee will receive payment of the accumulated DROP benefits, and begin receiving their monthly retirement benefit (in the same amount determined at retirement, plus annual cost-of-living increases).

Transfers between funds move unrestricted revenues collected in the General Fund to finance operating and capital programs accounted for in other funds in accordance with budgetary authorizations and to move receipts restricted to debt service from the funds collecting the receipts to the debt service fund as payments become due.

The System publishes an annual report that provides ten-year historical trend information regarding progress made in accumulating sufficient assets to pay benefits when due. The report may be obtained by writing the Division of Retirement, Research, Education and Policy Section, 1317 Winewood Boulevard, Tallahassee, Florida 32315-9000, or by calling (866) 738-2366, or accessing their internet site at www.dms.myflorida.com.

Transfers for the year ended September 30, 2012 were as follows: Transfers from Fund Governmental Activities: General Fund

FUNDING POLICY

C-32

The County is required to contribute at an actuarially determined rate. Rates from October 1, 2011 through June 30, 2012 were 14.10% for special risk, 11.14% for county elected officials, 6.27% for senior management, 4.91% for regular employees and 4.42% for DROP employees based on covered payroll. The current rates, effective July 1, 2012, are 14.90% for special risk, 10.23% for county elected officials, 6.30% for senior management, 5.18% for regular employees and 5.44% for DROP employees based on covered payroll. In addition, as of July 1, 2011, employee contributions of 3.00% are required of all Pension Plan and Investment Plan members, except for those in DROP. Subsequent to the 3% employee contribution requirement plaintiffs sued defendants, representing the State of Florida, in the Circuit Court of the Second Judicial Circuit arguing that the rights to the members in the noncontributory pension plan were of a contractual nature and that such rights were legally enforceable pursuant to the Constitutional provision which states that existing contractual rights may not be impaired by the passage of legislation. On March 6, 2012 the circuit judge ruled in favor of the plaintiffs in the case. Lawyers for the defendants in the case appealed the decision to the Florida Supreme Court. Oral arguments in the case occurred in September 2012. On January 17, 2013 the Florida Supreme Court reversed the judgment of the trial court, upholding the 3% employee contribution rate. The contributions of the County are established by the State Legislature and therefore subject to amendment. The County’s contributions to the System for the years ending September 30, 2012, 2011 and 2010 are represented in the table below. The County’s contributions were equal to the required contributions for each year. 2012 General Fund Nonmajor Governmental Funds County Water and Sewer Solid Waste Nonmajor Enterprise Funds Internal Service Funds Totals

$

$

10,489,397 2,092,765 832,576 61,084 1,547,097 230,115 15,253,034

2011 $

$

16,291,406 3,763,954 1,502,003 110,698 2,405,063 431,678 24,504,802

2010 $

$

18,869,604 7,058,236 1,640,191 119,386 2,637,057 487,388 30,811,862

Government Facilities Impact Fee Nonmajor Governmental Funds

Business-type Activities: County Water and Sewer Solid Waste Disposal Nonmajor Business-type

Internal Service Funds Totals

Transfers to Fund

Amount

Nonmajor Governmental Funds County Water and Sewer Nonmajor Business-type Nonmajor Governmental Funds General Fund Nonmajor Governmental Funds County Water and Sewer Nonmajor Business-type Internal Service

$

37,790,390 136 15,839,349 4,591,701 2,705,552 40,606,448 67,900 1,775,189 361,200

General Fund General Fund County Water and Sewer General Fund Nonmajor Governmental Funds County Water and Sewer General Fund

4,089,460 560,719 1,381,700 251,100 3,000 18,600 926,100 $ 110,968,544

NOTE 11 – NET ASSETS/FUND BALANCE CLASSIFICATION Net assets represent the difference between total assets and liabilities and are categorized as follows: Invested in capital assets, net of related debt: Total capital assets, net of debt issued in the acquisition of these assets and net of depreciation is reported separately in the net assets section. Restricted for growth related capital expansion: Impact fee and system development charges restricted for growth related capital expansion. Restricted for transportation capital projects: Gas taxes and other revenues restricted for transportation capital improvements. Restricted for tourist development: Tourist development tax proceeds are restricted for tourist related activities. Restricted for Conservation Collier: One quarter mill of ad valorem revenues restricted for the purchase of environmentally sensitive land.

62

63

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012 NOTE 11 – NET ASSETS/FUND BALANCE CLASSIFICATION – CONTINUED Restricted for Grants: State and federal government grant monies restricted for grant related purposes.

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012 NOTE 11 – NET ASSETS/FUND BALANCE CLASSIFICATION - CONTINUED A detailed schedule of fund balances at September 30, 2012 is as follows:

Restricted for renewal and replacement: Balance is restricted in conjunction with the issuance of County Water and Sewer District Bonds. The use of monies in the renewal and replacement fund is restricted to funding the cost of additions, replacement or major repair of water and wastewater capital assets. Unrestricted: Balances are not restricted for specific purposes.

Governmental funds report fund balances as either spendable or non-spendable. Spendable fund balances are further classified as restricted, committed, assigned or unassigned depending upon the extent to which there are external or internal constraints on the spending of these fund balances.

C-33

Non-spendable fund balance: Amounts that are not in spendable form or that are legally or contracturally required to be maintained intact. Items that are not spendable also include inventories, prepaid amounts and long term portions of advances, loans and notes receivable, as well as property held for resale. Spendable fund balance: Restricted fund balance – Amounts that can be spent only for specific purposes through restrictions placed upon them by external resource providers such as creditors, grantors or contributors; or imposed by law through constitutional provisions or enabling legislation. Committed fund balance – Amounts that can be spent only for specific purposes determined by the County’s highest decision making authority, the Board of County Commissioners, via ordinance. Commitments may be modified or removed by the Board of County Commissioners only by amending the ordinance that created the original commitment. Assigned fund balance – Amounts that are intended to be spent for specific purposes as determined by the Board of County Commissioners, but that are neither restricted nor committed to the specific purpose. Unassigned fund balance – Unassigned fund balance is the residual classification for the County’s general fund. Amounts in this classification are spendable but have not been deemed restricted, committed or assigned. Unassigned fund balance may also include negative balances for any governmental fund whose expenditures have exceeded the amounts restricted, committed or assigned for those specific purposes.

When both restricted and unrestricted amount are available the County spends the restricted amounts first, unless prohibited by law, grant agreements or other contractural arrangement. Further, when committed fund balance is available the County will use it first, followed by assigned fund balance and then unassigned fund balance for purposes in which any of the unrestricted fund balance classifications could be used. 64

Government Facilities Impact Fee

General Fund

Restricted for debt service: Balances are restricted in conjunction with the issuance of bonds and have been funded by operating transfers from the appropriate funds. The use of monies in the sinking fund is restricted to the payment of principal and interest on long-term debt. Nonspendable: Advances Inventory Prepaids/deposits Total nonspendable fund balance Restricted for: Community redevelopment Federal and state grants Bond covenants or debt service Growth related capital expansion Transportation capital projects Tourist development Conservation Collier Emergency 911 Public safety Court functions Public Records Modernization Other purposes Total restricted fund balance Committed for: Special districts Community development Natural resource management Utility regulation Libraries Other purposes Total committed fund balance Assigned for: Transportation operations Parks and recreation General buildings and improvements Water management Libraries Court functions Federal and state grants Other purposes Total assigned fund balance Unassigned: Total Fund Balances

$ 12,726,925 166,097 20,995 12,914,017

$

Other Governmental Funds

-

$

Total Governmental Funds

-

$

12,726,925 166,097 20,995 12,914,017

109,802 109,802

-

14,741,142 11,032,232 5,157,149 59,674,611 39,428,980 33,262,587 29,064,441 3,825,501 4,654,837 5,043,479 3,466,920 21 209,351,900

14,741,142 11,142,034 5,157,149 59,674,611 39,428,980 33,262,587 29,064,441 3,825,501 4,654,837 5,043,479 3,466,920 21 209,461,702

-

-

31,358,586 8,873,600 2,548,845 903,106 610,922 3,110,747 47,405,806

31,358,586 8,873,600 2,548,845 903,106 610,922 3,110,747 47,405,806

952,470 952,470

-

2,314,548 13,754,280 47,990,198 13,828,012 365,415 357,557 2,161,583 80,771,593

2,314,548 13,754,280 47,990,198 13,828,012 365,415 357,557 3,114,053 81,724,063

57,090,349 $ 71,066,638

65

(19,763,041)

(29,181,028)

$ (19,763,041) $

308,348,271

8,146,280 $

359,651,868

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE 12 - RISK MANAGEMENT

NOTE 12 - RISK MANAGEMENT - CONTINUED

The County 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. A self-insurance internal service fund is maintained by the County to administer insurance activities relating to workers' compensation, health and property and casualty, which covers general, property, auto, public official and crime liabilities. The County self insurance program covers operations of the Board and the constitutional officers, except for the Sheriff. Under these programs, the self-insurance fund provides coverage up to a maximum amount for each claim. The County purchases commercial insurance for claims in excess of coverage provided by the self-insurance fund and for all other covered risks of loss.

Settled claims have not exceeded the insurance provided by third party carriers in any of the past three years.

Claim Type Property and casualty claims

County’s Coverage

Excess Carrier’s Coverage $50,000 - $125,000,000

Auto liability claims

$50,000 - $500,000 (5% Named Storm) $200,000

Employee health claims Workers' compensation claims

$325,000 $500,000

$325,000 - Unlimited $500,000 - Statutory

$200,000 - $1,000,000

C-34

Settled claims have not exceeded the insurance provided by third party carriers in any of the past three years. All divisions of the County, excluding the Sheriff, participate in this program. Charges to operating departments are based upon amounts believed by management to meet the required annual payouts during the fiscal year and to pay for the estimated operating costs of the programs. For the fiscal year ended September 30, 2012 the operating departments were charged $35,672,218 for workers' compensation, health and property and casualty self-insurance programs. The claims loss reserve for workers' compensation, health and property and casualty of $5,060,776 reported at September 30, 2012 was calculated by third party actuaries based upon GASB Statement 30, Risk Financing Omnibus, which requires that a liability for claims be reported when it is probable that a loss has been incurred and the amount of that loss can be reasonably estimated. The estimated liabilities for unpaid losses related to workers' compensation and property and casualty were discounted at 3.5%. It should be noted that the discount rate is an estimate based on the expected rate of return over extended periods. The estimated liabilities for unpaid losses related to health were not discounted as their turnover period is much shorter. Claims loss reserves of $3,548,564 are recorded as current liabilities. The Sheriff participates in the Statewide Florida Sheriff's Self-Insurance Fund for its professional liability insurance. The fund is managed by representatives of the participating Sheriff offices and provides professional liability insurance to participating Sheriff agencies. The Florida Sheriff's Self-Insurance Fund provides liability insurance coverage subject to the following limitations: $3,200,000 for any claim involving a single individual, $3,300,000 for any one incident or occurrence and $10,000,000 for an annual aggregate per member.

Premiums charged to participating Sheriffs are based upon amounts believed by Fund management to meet the estimated annual payouts during the fiscal year and to pay for the estimated operating costs of the program. All liabilities associated with these self-insured risks are reported in the basic financial statements of the Statewide Florida Sheriff’s Self-Insurance Fund. The Sheriff cannot be additionally assessed for claims paid by the program. The Sheriff has also established a self-funded employee health plan. An internal service fund is used to account for the activities of the plan. Excess coverage has been purchased which provides specific claim excess coverage for any one incident exceeding $200,000 up to $1,000,000. Payments to the internal service fund are based on actuarial estimates of amounts needed to pay prior year and current year claims including claims incurred but not yet reported. The claims loss reserve for health of $2,340,000 reported at September 30, 2012 was calculated by third party actuaries based upon GASB Statement 30, Risk Financing Omnibus, which requires that a liability for claims be reported when it is probable that a loss has been incurred and the amount of that loss can be reasonably estimated. The entire Sheriff’s health claim loss reserve is recorded as a current liability. CHANGES IN SELF-INSURANCE CLAIMS PAYABLE Changes in the self-insurance claims payable for fiscal years 2011 and 2012 were as follows for the County and Sheriff self-insurance programs:

Balance at September 30, 2010

Property and Casualty 1,379,000

$

Current year claims incurred and changes in estimates Claim payments Balance at September 30, 2011

Claim payments $

Workers' Compensation $ 1,829,000

$

Total 8,609,000

846,772

43,216,238

(703,435)

43,359,575

(43,076,238)

(548,918)

(44,326,076)

5,541,000

576,647

7,642,499

388,230

47,775,374

418,745

48,582,349

(739,084)

(47,618,374)

(466,614)

(48,824,072)

1,173,998

$

The Sheriff also participates in the Statewide Florida Sheriff's Self-Insurance Fund program for workers' compensation coverage. The Florida Sheriff's Association Workers' Compensation Insurance Trust (FSAWIT) is a limited self-insurance fund providing coverage for the first $350,000 of every claim. Reinsurance is provided through a third party insurer for all claims exceeding $350,000 up to $10,000,000.

66

Group Health 5,401,000

(700,920) 1,524,852

Current year claims incurred and changes in estimates Balance at September 30, 2012

$

67

5,698,000

$

528,778

$

7,400,776

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE 13 – OTHER POSTEMPLOYMENT BENEFITS

NOTE 13 – OTHER POSTEMPLOYMENT BENEFITS – CONTINUED

Plan Description - The Board and the Tax Collector administer a single-employer defined benefit plan (OPEB Plan) and can amend the benefit provisions. The Board offers an OPEB Plan that subsidizes the cost of health care for its retirees who have at least 60% of eligible accrued sick leave remaining at the time of retirement and have completed 15 years of continuous service with the Board. In addition, the retiree must retire from the County, be at least 55 years of age or have completed 30 years of service under the Florida Retirement System (FRS) and be eligible to receive an FRS benefit with no break in time. Such employees are eligible to receive a 50% to 100% subsidy toward the cost of coverage under the active plan. A subsidy is currently provided to fourteen retirees.

Funded Status and Funding Progress - The contributions made for the 2012 fiscal year were 71% of the annual OPEB cost. Contributions as a percentage of OPEB cost for fiscal years 2010 and 2011 were 110% and 78%, respectively. As of the September 30, 2011 actuarial valuation date the OPEB Plan was 0.0% funded and the actuarial accrued liability for benefits was $6,564,292, and the actuarial value of plan assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $6,564,292. As of the September 30, 2012 actuarial valuation date the OPEB Plan was 0.0% funded and the actuarial accrued liability for benefits was $6,650,672, and the actuarial value of plan assets was $0, resulting in a UAAL of $6,650,672. The covered payroll (annual payroll of active employees covered by the OPEB Plan) was $150.8 million, and the ratio of the UAAL to the covered payroll was 4.4%.

The Tax Collector offers an OPEB plan that subsidizes 100% the cost of health care for employees with 10 years of service, between the ages of 54 and 64 and who exchange 800 hours of sick leave at retirement. Additionally, in accordance with Florida Statute 112.0801, County employees who retire and immediately begin receiving benefits from the FRS have the option of paying premiums to continue in the County’s health insurance plan at the same group rate as for active employees. The plan does not issue a publicly available financial report. At September 30, 2012, the date of the latest actuarial valuation, County plan participation consisted of:

C-35

OPEB plan participants Retirees receiving benefits

2,054 122

Funding Policy - The County has the authority to establish and amend funding policy. For the year ended September 30, 2012, the County contributed $511,971 to the OPEB Plan. No trust or agency fund has been established for the plan. Annual OPEB Cost and Net OPEB Obligation - The annual cost of the County’s OPEB Plan is calculated based on the Annual Required Contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liability over a period not to exceed 30 years. The following table shows the components of the County’s annual OPEB Plan cost for the year, the amount actually contributed, and the changes in the net OPEB Plan obligation. 2012

2011

2010

732,713 13,137 (21,690)

$ 662,704 10,651 (17,585)

$ 661,962 10,651 (17,585)

Annual OPEB cost

724,160

655,770

655,028

Contributions made

(511,971)

(508,627)

(719,310)

212,189

147,143

(64,282)

437,881

290,738

355,020

650,070

$ 437,881

$ 290,738

Annual required contribution (ARC) Interest on net OPEB obligation Adjustment to ARC

$

Increase (decrease) in net OPEB obligation Net OPEB obligation - beginning of year Net OPEB obligation - end of year

$

68

Actuarial Methods and Assumptions - Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Calculations for financial reporting purposes are based on the benefits provided under terms of the plan as understood by the employer and the plan members in effect at the time of each valuation and on the pattern of sharing of costs between the employer and plan members to that point. The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the employer and plan members in the future. Actuarial calculations reflect a long-term perspective. Consistent with that perspective, actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets. The actuarial methods and assumptions are: Actuarial cost method Amortization method Amortization period Investment rate of return Discount rate Inflation rate Healthcare cost trend rate

Projected Unit Credit Actuarial Cost Level Dollar Amount 30 years, Closed 3% 3% 3% 8% for the 2012 fiscal year grading to an ultimate rate of 5% for the 2018 fiscal year

Plan Description - The Sheriff administers a single-employer defined benefit plan (OPEB Plan) and can amend the benefit provisions. Prior to 2012, the Sheriff offered an OPEB Plan that subsidizes the cost of health care for its retirees who have 6 years of creditable service with the Sheriff and who receive a monthly retirement benefit from the Florida Retirement System. The Sheriff subsidizes approximately 20% for both single and family coverage for qualifying individuals. In 2012, the subsidy was no longer made available to eligible retirees who chose to continue their health insurance coverage. Approximately 73% of retirees receive the subsidy. Additionally, in accordance with Florida Statute 112.0801, Sheriff’s employees who retire and immediately begin receiving benefits from the FRS have the option of paying premiums to continue in the Sheriff’s health insurance plan at the same group rate as for active employees. The plan does not issue a publicly available financial report. 69

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE 13 – OTHER POSTEMPLOYMENT BENEFITS - CONTINUED

NOTE 13 – OTHER POSTEMPLOYMENT BENEFITS – CONTINUED

At September 30, 2012, the date of the latest actuarial valuation, Sheriff plan participation consisted of:

Calculations for financial reporting purposes are based on the benefits provided under terms of the plan as understood by the employer and the plan members in effect at the time of each valuation and on the pattern of sharing of costs between the employer and plan members to that point. The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the employer and plan members in the future. Actuarial calculations reflect a long-term perspective. Consistent with that perspective, actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets.

OPEB plan participants Retirees receiving benefits

1,100 100

Funding Policy - The Sheriff has the authority to establish and amend funding policy. For the year ended September 30, 2012, the Sheriff contributed $1,192,805 to the OPEB Plan. No trust or agency fund has been established for the plan. Annual OPEB Cost and Net OPEB Obligation - The annual cost of the Sheriff’s OPEB Plan is calculated based on the Annual Required Contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liability over a period not to exceed 30 years. The following table shows the components of the Sheriff’s annual OPEB Plan cost for the year, the amount actually contributed, and the changes in the net OPEB Plan obligation.

C-36

2012 1,122,365 34,226 (56,511)

2011 $ 1,117,938 33,881 (55,941)

2010 $ 1,108,742 30,794 (50,844)

Annual OPEB cost

1,100,080

1,095,878

1,088,692

Contributions made

(1,192,805)

(1,084,368)

(985,790)

(92,725)

11,510

102,902

Annual required contribution (ARC) Interest on net OPEB obligation Adjustment to ARC

$

Increase (decrease) in net OPEB obligation Net OPEB obligation - beginning of year Net OPEB obligation - end of year

$

1,140,863

1,129,353

1,026,451

1,048,138

$ 1,140,863

$ 1,129,353

Funded Status and Funding Progress - The contributions made for the 2012 fiscal year were 108% of the annual OPEB cost. Contributions as a percentage of OPEB cost for fiscal years 2010 and 2011 were 91% and 99%, respectively. As of the September 30, 2011 actuarial valuation date, the OPEB Plan was 0.0% funded, the actuarial accrued liability for benefits was $12,018,242, and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $12,018,242. As of the September 30, 2012 actuarial valuation date, the OPEB Plan was 0.0% funded, the actuarial accrued liability for benefits was $13,291,909, and the actuarial value of assets was $0, resulting in a UAAL of $13,291,909. The covered payroll (annual payroll of active employees covered by the OPEB Plan) was $108.4 million, and the ratio of the UAAL to the covered payroll was 12.3%. Actuarial Methods and Assumptions - Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. 70

The actuarial methods and assumptions are: Actuarial cost method Amortization method Amortization period Investment rate of return Discount rate Inflation rate Healthcare cost trend rate

Projected Unit Credit Actuarial Cost Level Dollar Amount 30 years, Closed 3% 3% 3% 10% for the 2013 fiscal year grading to an ultimate rate of 6% for the 2022 fiscal year

NOTE 14 – LANDFILL LIABILITY On May 1, 1995 the County entered into a landfill operating agreement with a third party for the privatization of the County's landfill operations. Under the contract, the third party is responsible for the daily operations, capital improvements, closure, postclosure and financial assurance requirements of the active cells within the Naples and Immokalee landfill sites. Collier County is responsible for the postclosure costs relating to portions of the Naples and Immokalee landfill sites. None of the cells that Collier County is responsible for has accepted waste since December 1989. The County is also responsible for staffing and operating the scale house at each site. In accordance with U.S. Environmental Protection Agency rule Solid Waste Disposal and Facility Criteria and GASB Statement 18, Accounting for Municipal Solid Waste Landfill Closure and Postclosure Care Costs, a liability has been established representing amounts estimated to be spent on postclosure relating to cells for which Collier County is responsible. The County’s estimated liability in connection with the landfills is included in the proprietary funds statement of net assets. The landfill liability will be reassessed on an annual basis, and any increase due to inflation, changes in technology or additional postclosure care requirements will be recorded as a current cost. The County has funded an escrow account with Fifth Third Bank in the amount of $11,561, as of September 30, 2012, to comply with Rule 62-701.630, Florida Administrative Code for the inactive Eustis Avenue Landfill site. These funds bear interest and are restricted for the exclusive use of the Eustis Avenue Landfill site’s long-term care. There were no deposits, other than interest, or withdrawals from this account in fiscal year 2012.

71

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012

NOTE 15 - SIGNIFICANT CONTINGENCIES

NOTE 16 - SIGNIFICANT COMMITMENTS

LITIGATION

Collier County has active construction projects as of September 30, 2012. The projects include road construction, governmental facilities and utilities improvements. At year end the County’s commitments with contractors includes the following:

The County is involved as defendant or plaintiff in certain litigation and claims arising in the ordinary course of operations. In the opinion of County legal counsel, the range of potential recoveries or liabilities, other than as disclosed here, will not materially affect the financial position of the County. During fiscal year 2010, the Collier County Water-Sewer District recorded an impairment of the value of its South Reverse Osmosis Raw Water Wellfield due to the failure of a raw water transmission pipeline. The pipeline was less than one year into its service life at the time of the failure. On November 19, 2010, the Water-Sewer District, through outside counsel, filed suit against the project’s contractor and surety. Damages sought by the Water-Sewer District in this action are currently estimated at $9,000,000.

C-37

During fiscal year 2012, the Federal Emergency Management Agency (Agency) made a decision to deobligate $11,172,273 in sand replacement costs previously reimbursed by the Agency to Collier County. The reimbursed costs were related to a project to repair beach erosion due to Hurricane Wilma. The decision to de-obligate the funding has been appealed by Collier County. In the opinion of County legal counsel, Collier County is unlikely to prevail. As such, a liability has been recorded in the amount of $11,172,273 in both the entity wide financial statements and the fund financial statements of Collier County. STATE AND FEDERAL GRANTS Grant monies received and disbursed by the County are for specific purposes and are subject to review by the grantor agencies. Such audits may result in requests for reimbursement due to disallowed expenditures. Based upon prior experience, the County does not believe that such disallowances, if any, would have a material effect on the financial position of the County.

Category Governmental Activities: Other Governmental Funds

306,742 294,932 4,513,094 26,448,561 1,800,884 898,753

Utilities

13,208,579

Solid Waste Disposal

Landfill

617,285

Other Enterprise Funds

Airports Mass Transit

Total

296,099 3,546,530 $

51,931,459

Encumbrances represent commitments for future expenditures, based on purchase orders or contracts issued, where the goods or services have been order but not received. Encumbrance commitments do not include construction contracts, as they are included as contract commitments. Collier County has the following encumbrances as of September 30, 2012: Category Governmental Activities: General Fund

General Government Public Safety Economic Environment Human Services Culture and Recreation

Government Facilities Impact Fee

General Government

Other Governmental Funds

General Government Public Safety Physical Environment Transportation Economic Environment Human Services Culture and Recreation

In accordance with the Tax Reform Act of 1986, any interest earnings on borrowed construction funds in excess of the interest costs incurred are required to be rebated to the federal government. There was no arbitrage rebate liability as of September 30, 2012.

Encumbrance Commitments $

850,790 5,525 30,000 23,778 42,340 4,878 1,029,635 614,816 1,379,885 4,274,854 7,909,616 1,187,731 1,016,322

Business-type Activities: Water and Sewer

Utilities

14,918,874

Solid Waste Disposal

Landfill

1,048,017

Other Enterprise Funds

Emergency Medical Services Airports Mass Transit

25,409 85,425 1,373,552

Internal Service Funds

Information Technology

Total

72

$

Business-type Activities: Water and Sewer

The Clerk’s office is aware of inquiries being conducted by various grantor agencies. The impact to the financial statements, if any, is unknown and therefore unable to be calculated at this time. ARBITRAGE REBATE

General Government Public Safety Physical Environment Transportation Economic Environment Culture and Recreation

Construction Commitments

26,992 $

73

35,848,439

COLLIER COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012 NOTE 17 – FUND DEFICITS The following funds had fund balance deficits at September 30, 2012: Fund Government Facilities Impact Fee County-Wide Library Impact Fee Correctional Facilities Impact Fee Emergency Medical Service Impact Fee Law Enforcement Impact Fee Total

Amount $ (19,763,041) (8,255,818) (3,516,119) (2,361,630) (15,047,461) $ (48,944,069)

The fund balance deficits are primarily the result of advances from other funds made prior to September 30, 2012. These advances were recorded to ensure repayment of non-impact fee monies loaned to the impact fee fund for the construction of growth necessitated facilities. County management anticipates that the deficits will be covered by future years’ impact fee revenues.

C-38 74

REQUIRED SUPPLEMENTARY INFORMATION

REQUIRED SUPPLEMENTAL INFORMATION COLLIER COUNTY, FLORIDA OTHER POSTEMPLOYMENT BENEFITS SCHEDULE OF FUNDING PROGRESS FOR THE RETIREE HEALTH PLAN

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS

Actuarial Valuation Date

Actuarial Value of Assets

Actuarial Accrued Liability (AAL) Unit Credit Actuarial Cost

Unfunded AAL (UAAL)

Funded Ratio

Board and Constitutionals (Non-Sheriff)

10/1/2009

$

$

5,814,470

$ 5,814,470

0.0%

$ 164,923,591

3.5%

Board and Constitutionals (Non-Sheriff)

10/1/2010

-

5,825,874

5,825,874

0.0%

159,321,900

3.7%

Board and Constitutionals (Non-Sheriff)

10/1/2011

-

6,564,292

6,564,292

0.0%

155,365,190

4.2%

Board and Constitutionals (Non-Sheriff)

10/1/2012

-

6,650,672

6,650,672

0.0%

150,761,054

4.4%

Agency

-

Covered Payroll

UAAL as a Percentage of Covered Payroll

C-39

Sheriff

10/1/2009

-

14,171,709

14,171,709

0.0%

123,296,677

11.5%

Sheriff

10/1/2010

-

12,148,033

12,148,033

0.0%

117,879,632

10.3%

Sheriff

10/1/2011

-

12,018,242

12,018,242

0.0%

114,185,572

10.5%

Sheriff

10/1/2012

-

13,291,909

13,291,909

0.0%

108,390,240

12.3%

76

Nonmajor Governmental Funds Special Revenue Funds ROAD DISTRICTS – To account for taxes levied and expenditures to carry on all work on roads and bridges in the County except that provided for in capital project funds. BAYSHORE GATEWAY COMMUNITY REDEVELOPMENT AGENCY – To account for the activities of the BayshoreGateway Triangle Community Redevelopment Agency. IMMOKALEE COMMUNITY REDEVELOPMENT AGENCY – To account for the activities of the Immokalee Community Redevelopment Agency. UNINCORPORATED AREA MUNICIPAL SERVICES TAXING DISTRICT – To account for revenues derived from and expanded for the benefit of the unincorporated areas of the County. COMMUNITY DEVELOPMENT – To account for building permit and development fees to support licensing, permitting and inspection services. WATER MANAGEMENT AND POLLUTION CONTROL – To account for taxes levied County-wide to provide water resource management and water pollution control. GRANTS AND SHARED REVENUES – To account for the revenues received from federal, state and local grants.

C-40

THIS PAGE INTENTIONALLY LEFT BLANK

IMPROVEMENT DISTRICTS – To account for taxes levied within municipal service taxing districts to provide for specified improvements and/or the maintenance of such improvements. FIRE CONTROL DISTRICTS – To account for taxes levied within municipal service taxing districts for fire prevention and control. LIGHTING DISTRICTS – To account for taxes levied within municipal service taxing district for street lighting. 911 ENHANCEMENT FEE – To account for fees levied on each telephone access line in the County for the enhancement of the 911 emergency telephone system. PUBLIC RECORDS MODERNIZATION – To account for the statutory surcharge on recording documents to be paid to the Clerk of the Circuit Court for the modernization of the Clerk’s official records management system. TOURIST DEVELOPMENT – To account for the 4% tourist development tax. STATE HOUSING INITIATIVE PARTNERSHIP – To account for state revenues received to provide affordable residential housing for very low to moderate income persons and those who have special housing needs. 800 MHZ INTERGOVERNMENTAL RADIO COMMUNICATIONS PROGRAM FUND – To account for moving traffic violation surcharges received to fund the County’s intergovernmental radio communications program. STATE COURT ADMINISTRATION – To account for County monies used to fund the operation of the court system. CONFISCATED PROPERTY – To account for the accumulation and expenditure of proceeds from the sale of property confiscated by the Sheriff. GAC LAND SALES, ROADS AND CANALS – To account for principal and settlement fees received from a 1977 settlement with GAC Properties, Inc., and interest thereon to be expended for the restoration and maintenance of roads, facilities and drainage improvements in the Golden Gate Estates area. UTILITY FEE – To account for fees to be used to effectively and efficiently regulate private water and wastewater utilities operating within the unincorporated areas of Collier County and the City of Marco Island. CONSERVATION COLLIER – To account for the acquisition and management of environmentally sensitive lands.

IMPACT FEE ESCROW – To account for impact fees relating to certain projects under construction until permits are issued. COURT INFORMATION TECHNOLOGY – To account for the accumulation of resources to enhance and increase access to court information. COURT SERVICES – To account for the accumulation of revenues associated with the function of the local court system. UNIVERSITY EXTENSION – To account for fund accumulation to meet the educational goals of the Collier County UF/IFAS extension. COURT FACILITIES FEE – To account for the accumulation of resources to improve court facilities. AFFORDABLE HOUSING – To account for fees to be used to provide for affordable housing related projects. OTHER SPECIAL REVENUE FUNDS – To account for the accumulation of resources for the following programs: Miscellaneous Florida Statutes Fee Collections Adoption Awareness Teen Court Animal Control Public Library Law Library Inmate Welfare County Drug Abuse Law Enforcement Training

Euclid and Lakeland Assessment Legal Aid Society Federal Equitable Sharing Domestic Violence Juvenile Assessment Center Driver Education Crime Prevention Freedom Memorial

Debt Service Funds

C-41

GAS TAX REVENUE BONDS – To account for the accumulation of resources and payments of interest and principal on the Series 2003 and 2005 Gas Tax Bonds. CAPITAL IMPROVEMENT REVENUE BONDS – To account for the accumulation of resources, surety reserve and payment of interest and principal on the Series 2002, 2003 and 2005 Bonds. RADIO ROAD EAST LIMITED GENERAL OBLIGATION BONDS – To account for the accumulation of resources, surety reserve and payment of interest and principal on the Radio Road East limited general obligation bonds. CONSERVATION COLLIER LIMITED GENERAL OBLIGATION BONDS – To account for the accumulation of resources and payment of interest and principal on long-term debt incurred for the acquisition of environmentally sensitive lands. COMMUNITY REDEVELOPMENT TAXABLE NOTE – To account for the accumulation of resources and payment of interest and principal on taxable long-term debt incurred for the acquisition of land in the Bayshore/Gateway Community Redevelopment Agency. FOREST LAKES LIMITED GENERAL OBLIGATION BONDS – To account for the accumulation of resources and payment of interest and principal on long-term debt incurred on the Forest Lakes Limited General Obligation Bonds. SPECIAL OBLIGATION REVENUE BONDS – To account for the accumulation of resources and payment of interest and principal on long-term debt incurred in the refinancing of various outstanding variable rate commercial paper loans. OTHER DEBT SERVICE – To account for the accumulation of resources and payment of interest and principal on variable rate commercial paper loans and special assessment debt incurred in the Naples Park area.

Capital Project Funds COUNTY-WIDE CAPITAL IMPROVEMENTS – To account for capital projects, designated by the Board of County Commissioners, to be funded by a County-wide one third mil levy. PARKS IMPROVEMENTS – To account for the expenditure of funds raised specifically for improvements to parks. Projects include land acquisition, design, construction and equipping of certain Community Park sites in the unincorporated areas of the County. Primary funding is ad valorem taxes.

COUNTY-WIDE LIBRARY IMPACT FEES – To account for the receipt and expenditure of library impact fees collected from all qualifying new construction. These impact fees must be used for acquisition of County-wide library facilities. CORRECTIONAL FACILITIES IMPACT FEES – To account for the receipt and expenditure of correctional facilities impact fees collected from all qualifying new construction. The impact fee must be used for the acquisition/construction of correctional facilities. EMERGENCY MEDICAL SERVICES IMPACT FEES – To account for the receipt and expenditure of emergency medical service impact fees collected from all qualifying new construction. The impact fees must be used for acquisition/construction of emergency service facilities. WATER MANAGEMENT – To account for the receipt and expenditure of funds raised specifically for water management purposes. Primary funding is ad valorem taxes. PARKS IMPACT DISTRICTS – To account for the receipt and expenditure of parks impact fees collected from all qualifying new construction. The impact fees must be used for the acquisition/construction of park facilities. ROAD IMPACT DISTRICTS – To account for the receipt and expenditure of road impact fees collected from all qualifying new construction. The impact fees must be used for the acquisition/construction of roads. ROAD CONSTRUCTION – To account for the receipt and expenditure of gas taxes. Projects include, but are not limited to, right-of-way acquisition, design and construction of various transportation improvements. LAW ENFORCEMENT IMPACT FEES – To account for the receipt and expenditure of law enforcement impact fees collected from all qualifying new construction. The impact fee must be used for the acquisition/construction of law enforcement related facilities. OTHER CAPITAL PROJECTS – To account for major capital expenditure financed from resources other than proceeds from the issuance of long-term debt and the one third mil levy.

COLLIER COUNTY, FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2012

Special Revenue Funds

Special Revenue Funds Bayshore Gateway Community Redevelopment Agency

Road Districts

Immokalee Community Redevelopment Agency

Unincorporated Area MSTD

Water Management and Pollution Control

Community Development

Grants and Shared Revenues

Fire Control Districts

Improvement Districts

Lighting Districts

ASSETS Cash, cash equivalents and investments Receivables: Interest Trade, net Notes Special assessments Due from other funds Due from other governments Inventory for resale Inventory Advances to other funds Total assets

$

2,509,130

$

1,160,009

3,265 30,703 1,483 334,936 201,646 $

3,081,163

$

1,449 280,839 13,504,133 $

14,946,430

424,871

$

670 423,961 $

849,502

9,154,819

$

11,116 193,897 251,659 376,696 $

9,988,187

10,520,012

$

8,875 102,302 69,703 $

10,700,892

2,508,773

$

2,708 1,478 42,888 114,475 $

2,670,322

7,677,917

$

22,449,721

3,712 237,480 212,667 84,284 7,828,364 2,409,684 $

18,454,108

$

18,885 19,494 34,552 $

22,522,652

626,547

$

921 26,628 $

654,096

460,783 489 1,364 8,475 -

$

471,111

LIABILITIES AND FUND BALANCES

C-42

Liabilities: Accounts payable Wages payable Due to other funds Due to other governments Due to individuals Deferred revenues Refundable deposits Retainage payable Advances from other funds Total liabilities Fund balances (deficits): Restricted Committed Assigned Unassigned Total fund balances (deficits) Total liabilities and fund balances

631,299 135,158 19 109 30 -

577,112 3,704 1,050 18,837 20,635 -

183,504 6,923 355 242,670 -

1,067,839 203,553 12,121 5,494 1,710 2,783 -

75,962 120,508 375 668,245 417 61,785 900,000

87,140 34,337 -

2,154,574 27,725 4,860,042 1,182,213 3,000 116,931 -

704,275 8,202 1,770 141,718 -

17,769 33,320 -

75,284 1,622 -

766,615

621,338

433,452

1,293,500

1,827,292

121,477

8,344,485

855,965

51,089

76,906

2,314,548 -

14,325,092 -

416,050 -

8,694,687 -

8,873,600 -

2,548,845 -

10,109,623 -

21,666,687 -

603,007 -

394,205 -

2,314,548 $

3,081,163

14,325,092 $

14,946,430

416,050 $

849,502

8,694,687 $

9,988,187

8,873,600 $

10,700,892

2,548,845 $

2,670,322

10,109,623 $

18,454,108

21,666,687 $

22,522,652

See accompanying independent auditor's report

82

83

603,007 $

654,096

394,205 $

471,111

COLLIER COUNTY, FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2012

Special Revenue Funds

Special Revenue Funds

911 Enhancement Fee

Public Records Modernization

State Housing Initiative Partnership

Tourist Development

800 MHZ IRCP Fund

State Court Administration

GAC Land Sales, Roads and Canals

Confiscated Property

Utility Fee

Conservation Collier

ASSETS Cash, cash equivalents and investments Receivables: Interest Trade, net Notes Special assessments Due from other funds Due from other governments Inventory for resale Inventory Advances to other funds Total assets

$

4,559,076

$

3,720 $

4,562,796

3,492,596

$

336,572 $

3,829,168

44,917,740

$

39,314 636,626 68,411 $

45,662,091

2,230,334

$

2,310 68,222 969,852 $

3,270,718

53,699

$

95 24,910 $

78,704

303,429

$

410 89,564 11,457 $

404,860

482,773

$

1,475,540

589 $

483,362

$

1,295 245,951 $

1,722,786

848,802

$

744 58,520 $

908,066

28,865,378 25,427 861 205,263 -

$

29,096,929

LIABILITIES AND FUND BALANCES

C-43

Liabilities: Accounts payable Wages payable Due to other funds Due to other governments Due to individuals Deferred revenues Refundable deposits Retainage payable Advances from other funds Total liabilities Fund balances (deficits): Restricted Committed Assigned Unassigned Total fund balances (deficits) Total liabilities and fund balances

737,295 -

25,676 336,572 -

1,020,936 28,872 841 11,304,123 44,732 -

899 2,530 2,344,680 -

19,137 -

17,655 29,648 -

10,998 -

245,951 -

31 4,929 -

27,531 4,957 -

737,295

362,248

12,399,504

2,348,109

19,137

47,303

10,998

245,951

4,960

32,488

3,825,501 -

3,466,920 -

33,262,587 -

922,609 -

59,567 -

357,557 -

472,364 -

1,476,835 -

903,106 -

29,064,441 -

3,825,501 $

4,562,796

3,466,920 $

3,829,168

33,262,587 $

45,662,091

922,609 $

3,270,718

59,567 $

78,704

357,557 $

404,860

472,364 $

483,362

1,476,835 $

1,722,786

See accompanying independent auditor's report

84

85

903,106 $

908,066

29,064,441 $

29,096,929

COLLIER COUNTY, FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2012

Special Revenue Funds

Special Revenue Funds

Court Information Technology

Impact Fee Escrow

Court Services

Court Facilities Fee

University Extension

Debt Service Funds

Other Special Revenue Funds

Affordable Housing

Total Special Revenue Funds

Capital Improvement Revenue Bonds

Gas Tax Revenue Bonds

ASSETS Cash, cash equivalents and investments Receivables: Interest Trade, net Notes Special assessments Due from other funds Due from other governments Inventory for resale Inventory Advances to other funds Total assets

$

679,116

$

640,911

799 $

679,915

$

604 66,758 $

708,273

454,672

$

20,637 $

475,309

65,135

$

$

65,290

4,067,700

$

3,416 83,260 -

55 100 $

4,154,376

649,940

$

569 $

650,509

5,869,307

$

3,247 40,087 25,000 $

5,937,641

157,148,730

$

134,684 1,655,626 1,182,519 1,371,489 9,174,794 16,159,768 201,646 $

187,029,256

2,562,408

$

2,666 $

2,565,074

10,476,820 -

$

10,476,820

LIABILITIES AND FUND BALANCES

C-44

Liabilities: Accounts payable Wages payable Due to other funds Due to other governments Due to individuals Deferred revenues Refundable deposits Retainage payable Advances from other funds Total liabilities Fund balances (deficits): Restricted Committed Assigned Unassigned Total fund balances (deficits) Total liabilities and fund balances

13,132 -

98,218 -

196,261 -

-

-

-

49,595 1,142 81,798 104 -

7,030,697 647,130 5,705,614 11,979,125 417 4,129,993 80,700 566,686 900,000

-

10,401,508

13,132

98,218

196,261

-

-

-

132,639

31,040,362

-

10,401,508

666,783 -

610,055 -

279,048 -

65,290 -

4,154,376 -

650,509 -

4,654,858 997,104 153,040 -

105,091,160 47,405,806 3,491,928 -

2,565,074 -

75,312 -

666,783 $

679,915

610,055 $

708,273

279,048 $

475,309

4,154,376

65,290 $

65,290

$

4,154,376

650,509 $

650,509

5,805,002 $

5,937,641

155,988,894 $

187,029,256

See accompanying independent auditor's report

86

87

2,565,074 $

2,565,074

75,312 $

10,476,820

COLLIER COUNTY, FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2012

Debt Service Funds

Debt Service Funds

Conservation Collier Limited General Obligation Bonds

Radio Road East Limited General Obligation Bonds

Community Redevelopment Taxable Note

Forest Lakes Limited General Obligation Bonds

Special Obligation Revenue Bonds

Capital Projects Funds

Total Debt Service Funds

Other Debt Service

County-Wide Capital Improvements

County-Wide Library Impact Fees

Parks Improvements

ASSETS Cash, cash equivalents and investments Receivables: Interest Trade, net Notes Special assessments Due from other funds Due from other governments Inventory for resale Inventory Advances to other funds Total assets

$

23,625

$

16 $

510,831

$

495 630 52,183 -

23,641

$

564,139

1,678,554

$

1,297 $

1,679,851

381,244

$

322 4,375 $

385,941

256,898

$

429 $

257,327

77,034

$

47 89 835 $

78,005

15,967,414

$

6,986,014

5,272 719 57,393 $

16,030,798

$

7,446 4,352 41,136,500 $

48,134,312

13,172,679

$

11,405 9,705 6,552 900,000 $

14,100,341

1,467,594 1,265 1,983 250,831 5,267 -

$

1,726,940

LIABILITIES AND FUND BALANCES

C-45

Liabilities: Accounts payable Wages payable Due to other funds Due to other governments Due to individuals Deferred revenues Refundable deposits Retainage payable Advances from other funds Total liabilities Fund balances (deficits): Restricted Committed Assigned Unassigned Total fund balances (deficits) Total liabilities and fund balances

-

115,100 -

-

-

-

16 -

115,116 10,401,508

144,114 -

322,731 23,330 -

16,802 250,831 9,715,125

-

115,100

-

-

-

16

10,516,624

144,114

346,061

9,982,758

23,641 -

449,039 -

1,679,851 -

385,941 -

257,327 -

53,603 24,386 -

5,157,149 357,025 -

47,990,198 -

13,754,280 -

(8,255,818)

23,641 $

449,039

23,641

$

564,139

1,679,851 $

1,679,851

385,941 $

385,941

257,327 $

257,327

77,989 $

78,005

5,514,174 $

16,030,798

47,990,198 $

48,134,312

See accompanying independent auditor's report

88

89

13,754,280 $

14,100,341

(8,255,818) $

1,726,940

COLLIER COUNTY, FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2012

Capital Projects Funds

Capital Projects Funds

Emergency Medical Services Impact Fees

Correctional Facilities Impact Fees

Parks Impact Districts

Water Management

Road Impact Districts

Law Enforcement Impact Fees

Road Construction

Total Capital Projects Funds

Other Capital Projects

Total Nonmajor Governmental Funds

ASSETS Cash, cash equivalents and investments Receivables: Interest Trade, net Notes Special assessments Due from other funds Due from other governments Inventory for resale Inventory Advances to other funds Total assets

$

1,838,314

$

1,657 364 68,887 8,046 $

1,917,268

396,624

$

322 655 70,349 1,569 $

469,519

14,214,970

$

12,478 165,844 $

14,393,292

12,464,398

$

10,637 14,185 1,524,237 432,262 $

14,445,719

49,626,222

$

45,945 44,806 3,898,798 278,340 878,164 $

54,772,275

36,504,432

$

34,970 56 3,031,046 3,737,903 $

43,308,407

1,417,603

$

1,516,533

1,554 982 88,337 $

1,508,476

$

1,651 1,407 26,394 $

1,545,985

139,605,383

$

129,330 78,495 5,901,439 26,394 3,475,230 5,069,763 42,036,500 $

196,322,534

312,721,527 269,286 1,734,840 7,083,958 26,394 4,904,112 14,244,557 16,159,768 201,646 42,036,500

$

399,382,588

LIABILITIES AND FUND BALANCES

C-46

Liabilities: Accounts payable Wages payable Due to other funds Due to other governments Due to individuals Deferred revenues Refundable deposits Retainage payable Advances from other funds Total liabilities Fund balances (deficits): Restricted Committed Assigned Unassigned Total fund balances (deficits) Total liabilities and fund balances

68,887 5,364,500

70,349 2,760,800

510,709 496 97,725 -

7,317 1,524,237 -

2,073,180 500,037 3,898,798 1,564,319 -

2,265,911 38,231 269,257 1,306,028 -

88,337 16,467,600

109,747 17,933 -

5,450,511 56,164 769,790 5,901,439 2,991,402 34,308,025

12,481,208 703,294 6,590,520 11,979,125 417 10,031,432 80,700 3,558,088 45,609,533

5,433,387

2,831,149

608,930

1,531,554

8,036,334

3,879,427

16,555,937

127,680

49,477,331

91,034,317

(3,516,119)

(2,361,630)

13,784,362 -

12,914,165 -

46,735,941 -

39,428,980 -

(15,047,461)

24,505 1,393,800 -

99,103,591 76,922,640 (29,181,028)

209,351,900 47,405,806 80,771,593 (29,181,028)

(3,516,119) $

1,917,268

(2,361,630) $

469,519

13,784,362 $

14,393,292

12,914,165 $

14,445,719

46,735,941 $

54,772,275

39,428,980 $

43,308,407

(15,047,461) $

1,508,476

1,418,305 $

1,545,985

See accompanying independent auditor's report

90

91

146,845,203 $

196,322,534

308,348,271 $

399,382,588

COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012 Special Revenue Funds

Special Revenue Funds Bayshore Gateway Community Redevelopment Agency

Road Districts Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous

$

311,075 2,296,693 207,081 12,356 49,597

$

996,100 467,551 10,560 306,397

Immokalee Community Redevelopment Agency $

354,600 2,915,958 3,302 -

Unincorporated Area MSTD $

30,624,102 220,954 2,564,854 423,673 81,377 221,955

Water Management and Pollution Control

Community Development $

11,766,180 1,891,723 40,959 60,448

$

1,647,740 960 105,827 546,618 18,911 2,480,542 620

Grants and Shared Revenues $

17,018,721 12,500 29,093 1,402,655

Fire Control Districts

Improvement Districts $

3,414,965 243,687 121,328 21,605

$

2,554,862 8,369 7,268 4,769

Lighting Districts $

968,306 2,963 1,545

2,876,802

1,780,608

3,273,860

34,136,915

13,759,310

4,801,218

18,462,969

3,801,585

2,575,268

972,814

16,352,927 -

911,973 -

756,090 -

6,014,664 4,016,140 658,761 9,731,081 102,528 10,308,376

2,650,801 7,001,309 375,836 -

2,807,551 1,554,769 -

1,324,053 1,138,169 274,982 539,916 10,592,883 2,202,176 1,244

998,798 1,641,317 919,325

2,955,178 -

816,836 -

86,188

778,732

2,835,851

156,100

123,998

96,538

4,179,636

3,577,559

66,423 11,497 264,144

-

Total expenditures

16,439,115

1,690,705

3,591,941

30,987,650

10,151,944

4,458,858

20,253,059

7,136,999

3,297,242

816,836

Excess (deficiency) of revenues over (under) expenditures

(13,562,313)

(318,081)

3,149,265

3,607,366

342,360

(1,790,090)

(3,335,414)

(721,974)

155,978

76,000 -

61,059 644,087 (4,947,729)

29,714 696,300 (580,300)

20,418 298 42,888 (742,875)

367,470 (165,844)

550,000 2,706 396,552 (1,060,544)

235,588 37,100 2,665 464,228 (79,842)

9,251 8,475 (24,254)

Total revenues

C-47

Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service: Principal Interest Fiscal charges Capital outlay

89,903

Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refundinging bond escrow Capital leases Sale of capital assets Insurance proceeds Transfers in Transfers out

750 155,415 13,842,300 (397,576)

136,800 (1,400,000)

Total other financing sources (uses)

13,600,889

(1,263,200)

76,000

(4,242,583)

145,714

(679,271)

38,576

(1,173,297)

(242,081)

(1,093,318)

3,753,080

(336,911)

Net change in fund balances Fund balances (deficits) at beginning of year Fund balances (deficits) at end of year

2,275,972 $

2,314,548

15,498,389 $

14,325,092

658,131 $

416,050

5,120,520

9,788,005 $

8,694,687

$

8,873,600

201,626

2,885,756 $

2,548,845

(111,286)

(1,588,464) 11,698,087 $

10,109,623

21,666,687

93

(6,528)

(62,235)

25,113,387 $

See accompanying independent auditor's report

92

659,739

(3,446,700)

149,450

665,242 $

603,007

244,755 $

394,205

COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012 Special Revenue Funds

Special Revenue Funds

911 Enhancement Fee Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous

$

Total revenues

C-48

Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service: Principal Interest Fiscal charges Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures

1,900,264 19,496 -

$

Total other financing sources (uses)

14,898,077 67,093 410 205,714 31,414

$

1,056,769 13,383 405,156

$

421,041 495 124,065

$

GAC Land Sales, Roads and Canals

Confiscated Property

144,765 1,095,610 2,482 3,939

$

65,389 3,477 -

$

Utility Fee

7,346 -

$

Conservation Collier

282,207 188,520 3,926 2

$

9,486,051 6,180 130,179 6,428

1,475,308

545,601

1,246,796

68,866

7,346

474,655

9,628,838

1,518,869 -

1,257,359 -

12,673,496 6,797,778

1,056,769 -

1,114,031 -

922,879 1,442,300 -

123,999 -

8

323,546 -

745,498 -

-

211,835

1,230,235

-

-

-

-

-

-

665

1,518,869

1,469,194

20,701,509

1,056,769

1,114,031

2,365,179

123,999

8

323,546

746,163

(5,498,801)

418,539

(568,430)

(1,118,383)

(55,133)

7,338

151,109

8,882,675

1,341 (610,692)

-

11,256 558,900 -

1,143,357 (11,100)

(162,833)

-

30,000 -

384,291 (1,153,037)

(609,351)

-

570,156

1,132,257

(162,833)

-

30,000

(6,108,152)

418,539

1,726

13,874

(217,966)

7,338

181,109

(155,825)

-

-

(155,825)

3,424,610 $

$

State Court Administration

15,202,708

400,891

Fund balances (deficits) at beginning of year

1,306,166 7,203 -

800 MHZ ICRP Fund

1,313,369

-

Net change in fund balances

State Housing Initiative Partnership

Tourist Development

1,919,760

400,891

Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refunding bond escrow Capital leases Sale of capital assets Insurance proceeds Transfers in Transfers out

Fund balances (deficits) at end of year

Public Records Modernization

3,622,745

3,825,501

$

3,466,920

39,370,739 $

33,262,587

57,841

504,070 $

922,609

$

59,567

343,683 $

357,557

690,330 $

472,364

1,469,497 $

1,476,835

See accompanying independent auditor's report

94

95

(768,746) 8,113,929

721,997 $

903,106

20,950,512 $

29,064,441

COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012 Special Revenue Funds

Court Information Technology

Impact Fee Escrow Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous

$

Total revenues

C-49

Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service: Principal Interest Fiscal charges Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refunding bond escrow Capital leases Sale of capital assets Insurance proceeds Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficits) at beginning of year Fund balances (deficits) at end of year

$

4,530 -

$

Special Revenue Funds

Court Services

754,502 2,784 293

$

Court Facilities Fee

University Extension

8,041,861 -

$

6,053 295 28,407

$

Other Special Revenue Funds

Affordable Housing

1,158,998 16,632 -

$

Debt Service Funds

3,197 18,810

$

4,976 1,190,093 158,163 24,603 339,089

Total Special Revenue Funds $

67,127,274 12,304,145 28,586,964 12,876,071 2,901,833 773,859 2,480,542 3,027,194

Capital Improvement Revenue Bonds

Gas Tax Revenue Bonds $

13,397 -

$

(13,796) -

4,530

757,579

8,041,861

34,755

1,175,630

22,007

1,716,924

130,077,882

13,397

(13,796)

-

548,587 10,174 3,582 -

8,001,788 -

26,161 -

5,142 -

-

168,094 817,557 185,015 13,468

20,893,367 20,137,726 18,884,629 30,636,846 13,420,243 2,390,773 18,040,199

-

-

-

20,082

-

-

-

-

77,149

66,423 11,497 13,638,712

7,505,000 7,076,815 399,293 -

7,560,000 5,655,716 5,203 -

-

582,425

8,001,788

26,161

5,142

-

1,261,283

138,120,415

14,981,108

13,220,919

4,530

175,154

40,073

8,594

1,170,488

22,007

455,641

(8,042,533)

(14,967,711)

(13,234,715)

-

-

-

-

-

-

48,900 (11,457)

550,000 235,588 87,982 243,991 18,840,548 (11,348,083)

38,680,000 4,766,373 (43,336,693) 13,479,900 -

(3,138,948) 16,339,223 -

13,589,580

13,200,275

-

-

-

-

-

-

37,443

8,610,026

4,530

175,154

40,073

8,594

1,170,488

22,007

493,084

567,493

(1,378,131)

(34,440)

662,253

434,901

238,975

56,696

2,983,888

628,502

5,311,918

155,421,401

3,943,205

109,752

666,783

$

610,055

$

279,048

$

65,290

$

4,154,376

$

650,509

$

5,805,002

$

155,988,894

See accompanying independent auditor's report

96

97

$

2,565,074

$

75,312

COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012 Debt Service Funds

Conservation Collier Limited General Obligation Bonds

Radio Road East Limited General Obligation Bonds Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous

$

17 -

$

Debt Service Funds

Community Redevelopment Taxable Note

4,572,927 4,364 -

$

Forest Lakes Limited General Obligation Bonds

7,424 -

$

Special Obligation Revenue Bonds

366,503 1,539 -

$

Capital Projects Funds

Total Debt Service Funds

Other Debt Service

5,461 -

$

1,195 386 110,582 -

$

County-Wide Capital Improvements

4,940,625 18,792 110,582 -

$

46,229 450

County-Wide Library Impact Fees

Parks Improvements $

565,608 65,506 16,699

$

480,677 9,740 -

17

4,577,291

7,424

368,042

5,461

112,163

5,069,999

46,679

647,813

490,417

-

-

-

-

-

-

-

815,315 257,240 38,005 -

486,267

41,125

11,573 4,697 20,906 -

4,575,000 354,625 275 -

900,000 413,654 -

365,000 192,369 2,835 -

4,265,000 4,265,283 643,294 -

6,327,545 154,849 9,773 -

31,509,118 18,118,008 1,081,579 -

26,582 319 350,954

780,386

487,834

Total expenditures

37,176

4,929,900

1,313,654

560,204

9,173,577

6,492,167

50,708,705

1,488,415

1,266,653

528,959

Excess (deficiency) of revenues over (under) expenditures

(37,159)

(352,609)

(1,306,230)

(192,162)

(9,168,116)

(6,380,004)

(45,638,706)

(1,441,736)

(618,840)

(38,542)

Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refunding bond escrow Capital leases Sale of capital assets Insurance proceeds Transfers in Transfers out

60,800 -

952,183 (465,165)

1,400,000 -

504,375 (13,390)

92,295,000 12,425,334 (104,074,744) 8,540,051 -

6,482,815 (105,770)

130,975,000 17,191,707 (150,550,385) 47,759,347 (584,325)

4,352 1,020,400 (361,200)

(322,648)

(1,148,300)

60,800

487,018

1,400,000

490,985

9,185,641

6,377,045

44,791,344

663,552

(322,648)

(1,148,300)

23,641

134,409

93,770

298,823

17,525

(2,959)

(847,362)

(778,184)

(941,488)

(1,186,842)

Total revenues

C-50

Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service: Principal Interest Fiscal charges Capital outlay

Total other financing sources (uses) Net change in fund balances Fund balances (deficits) at beginning of year Fund balances (deficits) at end of year

$

23,641

314,630 $

449,039

1,586,081 $

1,679,851

239,802

87,118 $

385,941

$

257,327

80,948 $

77,989

6,361,536 $

5,514,174

48,768,382 $

47,990,198

See accompanying independent auditor's report

98

99

14,695,768 $

13,754,280

(7,068,976) $

(8,255,818)

COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012 Capital Projects Funds

Emergency Medical Services Impact Fees

Correctional Facilities Impact Fees Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous

$

Total revenues

C-51

Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service: Principal Interest Fiscal charges Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refunding bond escrow Capital leases Sale of capital assets Insurance proceeds Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficits) at beginning of year Fund balances (deficits) at end of year

772,785 7,240 -

$

Parks Impact Districts

Water Management

209,683 1,686 -

$

1,000,000 60,584 319,749 240

$

4,240,865 58,038 -

Road Impact Districts $

Law Enforcement Impact Fees

Road Construction

9,905,583 785,613 286,160 827

$

12,898,769 7,971,753 260,039 249,797 322,539

$

Total Capital Projects Funds

Other Capital Projects

467,279 10,148 -

$

6,533 12,419 124,026 1,419

$

12,898,769 16,649,013 9,757,366 260,039 807,547 443,775 342,174

Total Nonmajor Governmental Funds $

84,966,668 28,953,158 38,344,330 13,136,110 2,901,833 1,600,198 3,034,899 3,369,368

780,025

211,369

1,380,573

4,298,903

10,978,183

21,702,897

477,427

144,397

41,158,683

176,306,564

13,084 -

3,855 -

1,844,175 -

132,375

2,582,245 -

8,957,369 -

2,366 -

150,750 1,423,419 25,048

966,065 276,545 3,305,599 11,539,614 684,815

21,859,432 20,414,271 22,190,228 42,176,460 13,420,243 2,390,773 18,725,014

-

-

1,190,920

900,989

15,625,697

12,140,889

-

645,184

26,582 319 32,122,853

31,602,123 18,129,824 1,081,579 45,761,565

13,084

3,855

3,035,095

1,033,364

18,207,942

21,098,258

2,366

2,244,401

48,922,392

237,751,512

766,941

207,514

(1,654,522)

3,265,539

(7,229,759)

604,639

475,061

(2,100,004)

(7,763,709)

(61,444,948)

(2,028,150)

(724,269)

6,390,544 (1,024,505)

(3,211,775)

5,252 16,391,644 (33,583,881)

131,525,000 17,191,707 (150,550,385) 235,588 87,982 249,243 82,991,539 (45,516,289)

(2,028,150)

(724,269)

5,366,039

(3,211,775)

(1,261,209)

(516,755)

3,711,517

(2,254,910) $

Capital Projects Funds

(3,516,119)

(1,844,875) $

(2,361,630)

13,784,362

(7,229,759)

53,764

10,072,845 $

-

53,965,700

12,860,401 $

12,914,165

$

46,735,941

900 7,669,100 (22,035,535)

(2,723,568)

1,311,600 (3,931)

(14,365,535)

(2,723,568)

1,307,669

(13,760,896)

(2,248,507)

53,189,876 $

39,428,980

(792,335)

(12,798,954) $

(15,047,461)

2,210,640 $

1,418,305

See accompanying independent auditor's report

100

101

(17,186,985)

36,214,385

(24,950,694)

(25,230,563)

171,795,897 $

146,845,203

333,578,834 $

308,348,271

COLLIER COUNTY, FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012

Government Facilities Impact Fees (Budgetary Basis)

Budget Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous

$

Total revenues

725,700 30,000 -

Actual

$

Variance

1,181,850 25,197 -

$

Bayshore Gateway Community Redevelopment Agency (Budgetary Basis)

Road Districts (Budgetary Basis)

Budget

456,150 (4,803) -

$

308,000 2,262,500 119,000 20,200

Actual

$

311,075 2,296,693 207,081 17,464 49,597

Variance

$

Budget

3,075 34,193 88,081 17,464 29,397

$

996,100 2,709,150 10,000 39,000

Actual

$

996,100 467,551 13,183 306,397

Immokalee Community Redevelopment Agency (Budgetary Basis)

Variance

$

Budget

(2,241,599) 3,183 267,397

$

354,600 61,947 6,230,146 5,000 -

Actual

$

354,600 2,915,958 4,241 -

Variance

$

(61,947) (3,314,188) (759) -

C-52

755,700

1,207,047

451,347

2,709,700

2,881,910

172,210

3,754,250

1,783,231

(1,971,019)

6,651,693

3,274,799

(3,376,894)

Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service Capital outlay

254,009 5,980 20,000 351,168

57,151 6,708 19,043 -

196,858 (728) 957 351,168

17,820,996 92,105

16,352,927 86,188

1,468,069 5,917

1,677,401 2,728,150

911,973 778,732

765,428 1,949,418

3,831,334 3,472,838

756,090 2,835,851

3,075,244 636,987

Total expenditures

631,157

82,902

548,255

17,913,101

16,439,115

1,473,986

4,405,551

1,690,705

2,714,846

7,304,172

3,591,941

3,712,231

124,543

1,124,145

999,602

(15,203,401)

(13,557,205)

1,646,196

92,526

743,827

(652,479)

(317,142)

335,337

136,800 (1,400,000)

100,000

76,000 -

76,000 -

-

Excess (deficit) of revenues over (under) expenditures Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refunding bond escrow Sale of capital assets Insurance proceeds Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances (deficits) at end of year

2,536,600 (5,225,600)

696,400 (4,591,701)

(1,840,200) 633,899

62,000 15,342,300 (398,000)

750 155,415 13,842,300 (397,576)

750 93,415 (1,500,000) 424

136,800 (1,500,000)

(2,689,000)

(3,895,301)

(1,206,301)

15,006,300

13,600,889

(1,405,411)

(1,363,200)

(1,263,200)

100,000

76,000

76,000

(2,564,457)

(2,771,156)

(206,699)

(2,014,501)

(1,170,674)

843,827

(576,479)

(241,142)

1,781,501

1,781,501

6,151,386 $

(651,301)

3,586,929

6,151,386 $

3,380,230

$

(2,771,156) (5,501) (696,400) (3,473,057)

(197,101)

$

(206,699)

43,684

1,306,201 $

1,109,100

240,785

1,306,201 $

1,349,885

$

240,785

$

(233,000) $

610,827

$

843,827

747,879 $

171,400

747,879 $

506,737

$

(241,142) (939) (242,081)

See accompanying independent auditor's report Reconciliation: Net change in fund balance, budgetary basis Change in fair value of investments Advances budgeted as transfers Unbudgeted funds Deferred revenues Net change in fund balance, GAAP basis

$

102

$

$

43,684 (5,108) 38,576

$

$

(1,170,674) (2,623) (1,173,297)

$

103

335,337 $

335,337

COLLIER COUNTY, FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012

Unincorporated Area MSTD (Budgetary Basis)

Budget Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous

$

Total revenues

31,560,100 175,100 2,398,179 165,900 50,000 235,600

Actual

$

Community Development (Budgetary Basis)

Variance

30,624,102 220,954 2,564,854 423,673 102,839 221,955

$

Budget

(935,998) 45,854 166,675 257,773 52,839 (13,645)

$

Actual

8,847,000 1,770,100 34,900 58,100

$

Water Management and Pollution Control (Budgetary Basis)

Variance

11,766,180 1,891,723 54,168 60,448

$

Budget

2,919,180 121,623 19,268 2,348

$

1,711,100 200 114,000 511,300 30,200 2,574,100 -

Actual

$

1,647,740 960 105,827 546,618 23,844 2,480,542 620

Grants and Shared Revenues (Budgetary Basis)

Variance

$

Budget

(63,360) 760 (8,173) 35,318 (6,356) (93,558) 620

$

39,556,070 775,016 982,995

Actual

$

15,358,188 12,500 22,213 1,402,655

Variance

$

(24,197,882) (762,516) 22,213 419,660

C-53

34,584,879

34,158,377

(426,502)

10,710,100

13,772,519

3,062,419

4,940,900

4,806,151

(134,749)

41,314,081

16,795,556

(24,518,525)

Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service Capital outlay

6,498,600 4,234,550 777,475 11,051,901 135,300 11,084,733 176,687

6,014,664 4,016,140 658,761 9,731,081 102,528 10,308,376 156,100

483,936 218,410 118,714 1,320,820 32,772 776,357 20,587

2,912,796 7,529,567 392,800 128,125

2,650,801 7,001,309 375,836 123,998

261,995 528,258 16,964 4,127

3,415,000 1,685,900 168,600

2,807,551 1,554,769 96,538

607,449 131,131 72,062

3,216,145 1,624,388 484,250 1,222,959 26,618,263 4,998,179 218,962 10,805,064

1,198,207 486,463 274,982 539,916 10,592,883 2,202,176 1,244 3,301,417

2,017,938 1,137,925 209,268 683,043 16,025,380 2,796,003 217,718 7,503,647

Total expenditures

33,959,246

30,987,650

2,971,596

10,963,288

10,151,944

811,344

5,269,500

4,458,858

810,642

49,188,210

18,597,288

30,590,922

625,633

3,170,727

2,545,094

(253,188)

3,620,575

3,873,763

(328,600)

347,293

675,893

(7,874,129)

(1,801,732)

6,072,397

41,669 41,387 90,473

926,300 (1,060,300)

29,714 -

(910,900)

20,418 298 42,888 (742,875)

20,418 298 42,888 168,025

4,497,661 (218,205)

455,691 (265,734)

(4,041,970) (47,529)

189,957

(4,089,499)

Excess (deficit) of revenues over (under) expenditures Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refunding bond escrow Sale of capital assets Insurance proceeds Transfers in Transfers out

19,390 752,700 (5,188,202)

61,059 794,087 (5,097,729)

29,714 926,300 (1,060,300)

(4,416,112)

(4,242,583)

173,529

(134,000)

29,714

(910,900)

(679,271)

231,629

4,279,456

Net change in fund balances

(3,790,479)

(1,071,856)

2,718,623

(387,188)

3,516,289

3,903,477

(1,239,500)

(331,978)

907,522

(3,594,673)

(1,611,775)

Fund balances at beginning of year

7,520,179

7,520,179

-

-

-

-

-

9,740,189

9,740,189

Total other financing sources (uses)

Fund balances (deficits) at end of year

$

3,729,700

$

6,448,323

$

(1,071,856) (21,462) (1,093,318)

$

2,718,623

$

(104,286)

(387,188) $

3,516,289

$

3,903,477

2,487,600 $

1,248,100

2,487,600 $

2,155,622

$

907,522

$

6,145,516

$

8,128,414

$

(1,611,775) (5,422) 28,733 (1,588,464)

See accompanying independent auditor's report Reconciliation: Net change in fund balance, budgetary basis Change in fair value of investments Advances budgeted as transfers Unbudgeted funds Deferred revenues Net change in fund balance, GAAP basis

$

104

$

$

3,516,289 (13,209) 250,000 3,753,080

$

$

(331,978) (4,933) (336,911)

$

105

1,982,898 $

1,982,898

COLLIER COUNTY, FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012

Improvement Districts (Budgetary Basis)

Budget Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous

$

Total revenues

3,557,900 254,800 42,800 5,000

Fire Control Districts (Budgetary Basis)

Actual

$

Variance

3,414,965 243,687 151,975 21,605

$

Budget

(142,935) (11,113) 109,175 16,605

$

2,665,500 1,500 5,300 2,300

Actual

$

2,554,862 8,369 9,130 4,769

Lighting Districts

Variance

$

Budget

(110,638) 6,869 3,830 2,469

$

1,007,100 4,800 -

911 Enhancement Fee (Budgetary Basis)

Actual

$

968,306 3,838 1,545

Variance

$

Budget

(38,794) (962) 1,545

$

Actual

1,970,000 20,000 -

$

Variance

1,900,264 25,217 -

$

(69,736) 5,217 -

C-54

3,860,500

3,832,232

(28,268)

2,674,600

2,577,130

(97,470)

1,011,900

973,689

(38,211)

1,990,000

1,925,481

(64,519)

Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service Capital outlay

4,318,525 2,642,275 1,043,371 17,217,385

998,798 1,641,317 919,325 3,577,559

3,319,727 1,000,958 124,046 13,639,826

3,372,100 18,565

3,033,098 18,556

339,002 9

831,600 1,000

816,836 -

14,764 1,000

3,391,487 115,000

1,518,869 -

1,872,618 115,000

Total expenditures

25,221,556

7,136,999

18,084,557

3,390,665

3,051,654

339,011

832,600

816,836

15,764

3,506,487

1,518,869

1,987,618

(21,361,056)

(3,304,767)

18,056,289

(716,065)

(474,524)

241,541

179,300

156,853

(22,447)

(1,516,487)

406,612

1,923,099

550,000 362,000 (1,083,800)

550,000 2,706 396,552 (1,060,544)

2,706 34,552 23,256

2,665 583,500 (225,700)

27,100 2,665 578,806 (194,420)

(38,700)

9,251 8,475 (24,254)

9,251 8,475 14,446

-

-

-

(6,528)

32,172

-

-

-

9,725

(1,516,487)

406,612

1,923,099

Excess (deficit) of revenues over (under) expenditures Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refunding bond escrow Sale of capital assets Insurance proceeds Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances (deficits) at end of year

(171,800)

(111,286)

60,514

360,465

414,151

53,686

(38,700)

(21,532,856)

(3,416,053)

18,116,803

(355,600)

(60,373)

295,227

140,600

23,789,256 $

27,100 (4,694) 31,280

2,256,400

23,789,256 $

20,373,203

$

(3,416,053) (30,647) (3,446,700)

$

18,116,803

546,900 $

191,300

546,900 $

486,527

$

(60,373) (1,862) (62,235)

222,900

$

295,227

150,325

$

363,500

222,900 $

373,225

$

150,325 (875) 149,450

$

9,725

3,650,387 $

2,133,900

3,650,387 $

4,056,999

See accompanying independent auditor's report Reconciliation: Net change in fund balance, budgetary basis Change in fair value of investments Advances budgeted as transfers Unbudgeted funds Deferred revenues Net change in fund balance, GAAP basis

$

106

$

$

$

$

107

406,612 (5,721) 400,891

$

1,923,099

COLLIER COUNTY, FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012

Budget Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous

$

Total revenues

Actual

1,165,000 9,500 -

$

Variance

1,306,166 7,203 -

$

State Housing Initiativeship Partnership (Budgetary Basis)

Tourist Development (Budgetary Basis)

Public Records Modernization

Budget

141,166 (2,297) -

$

13,050,100 1,500 205,000 70,000

Actual

$

14,898,077 67,093 410 266,035 31,414

Variance

$

Budget

1,847,977 67,093 (1,090) 61,035 (38,586)

$

Actual

430,987 10,823 322,772

$

800 MHZ IRCP Fund (Budgetary Basis)

Variance

1,056,769 17,117 405,156

$

Budget

625,782 6,294 82,384

$

459,000 1,100 117,000

Actual

$

Variance

421,041 675 124,065

$

(37,959) (425) 7,065

C-55

1,174,500

1,313,369

138,869

13,326,600

15,263,029

1,936,429

764,582

1,479,042

714,460

577,100

545,781

Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service Capital outlay

1,690,589 1,031,984

1,257,359 211,835

433,230 820,149

2,289,171 9,670,774 6,685,694

1,501,223 6,797,778 1,230,235

787,948 2,872,996 5,455,459

3,379,929 -

1,056,769 -

2,323,160 -

1,199,700 -

1,114,031 -

85,669 -

Total expenditures

2,722,573

1,469,194

1,253,379

18,645,639

9,529,236

9,116,403

3,379,929

1,056,769

2,323,160

1,199,700

1,114,031

85,669

11,052,832

(2,615,347)

422,273

3,037,620

Excess (deficit) of revenues over (under) expenditures Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refunding bond escrow Sale of capital assets Insurance proceeds Transfers in Transfers out

(1,548,073)

(155,825)

1,392,248

(5,319,039)

5,733,793

-

-

-

1,296,400 (2,036,116)

1,341 1,795,248 (2,405,940)

20,711 (20,711)

1,341 498,848 (369,824)

136,251 (136,251)

(622,600)

(568,250)

54,350

115,540 (115,540)

558,900 -

11,256 558,900 -

11,256 -

558,900

-

-

-

(739,716)

130,365

-

-

-

Net change in fund balances

(1,548,073)

(155,825)

1,392,248

(6,058,755)

5,124,442

11,183,197

(2,615,347)

422,273

3,037,620

Fund balances at beginning of year

2,616,219

38,970,283

38,970,283

-

2,852,984

-

Total other financing sources (uses)

Fund balances (deficits) at end of year

$

1,068,146

2,616,219 $

2,460,394

$

1,392,248

$

32,911,528

(609,351)

$

44,094,725

$

5,124,442 (60,321) (11,172,273) (6,108,152)

$

11,183,197

2,852,984 $

237,637

$

3,275,257

$

3,037,620

$

570,156

11,256

(63,700)

1,906

65,606

92,600

92,600

28,900

$

94,506

See accompanying independent auditor's report Reconciliation: Net change in fund balance, budgetary basis Change in fair value of investments Advances budgeted as transfers Unbudgeted funds Deferred revenues Net change in fund balance, GAAP basis

$

$

(155,825) (155,825)

108

$

$

$

(31,319)

422,273 (3,734) 418,539

$

$

109

1,906 (180) 1,726

$

65,606

COLLIER COUNTY, FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012

State Court Administration (Budgetary Basis)

Budget Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous

$

Total revenues

165,000 1,110,500 1,000 -

Actual

$

Variance

144,765 1,095,610 3,148 3,939

$

GAC Land Sales, Roads and Canals (Budgetary Basis)

Confiscated Property (Budgetary Basis)

Budget

(20,235) (14,890) 2,148 3,939

$

Actual

-

$

65,389 4,422 -

Variance

$

Budget

65,389 4,422 -

$

Actual

8,100 16,500

$

Utility Fees (Budgetary Basis)

Variance

9,383 -

$

Budget

1,283 (16,500)

$

Actual

240,000 130,000 -

$

282,207 188,520 5,095 2

Variance

$

42,207 58,520 5,095 2

C-56

1,276,500

1,247,462

(29,038)

-

69,811

69,811

24,600

9,383

(15,217)

370,000

475,824

105,824

Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service Capital outlay

983,600 1,494,100 5,000

922,879 1,442,300 -

60,721 51,800 5,000

124,000 -

123,999 -

1 -

300,700 -

8 -

300,692 -

365,500 -

323,546 -

41,954 -

Total expenditures

2,482,700

2,365,179

117,521

124,000

123,999

1

300,700

8

300,692

365,500

323,546

41,954

(1,206,200)

(1,117,717)

88,483

(124,000)

(54,188)

69,812

(276,100)

9,375

285,475

4,500

152,278

147,778

1,231,300 (110,500)

1,242,757 (110,500)

11,457 -

(268,000)

(162,833)

105,167

-

-

-

30,000 -

30,000 -

-

1,120,800

1,132,257

11,457

(268,000)

(162,833)

105,167

-

-

-

30,000

30,000

-

14,540

99,940

(392,000)

(217,021)

174,979

(276,100)

9,375

285,475

34,500

182,278

147,778

Excess (deficit) of revenues over (under) expenditures Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refunding bond escrow Sale of capital assets Insurance proceeds Transfers in Transfers out Total other financing sources (uses) Net change in fund balances

(85,400)

Fund balances at beginning of year Fund balances (deficits) at end of year

174,400 $

89,000

174,400 $

188,940

$

99,940

699,900 $

307,900

699,900 $

482,879

$

(217,021) (945) (217,966)

1,394,200

$

174,979

$

1,118,100

1,394,200 $

1,403,575

$

285,475

709,500 $

744,000

709,500 $

891,778

$

182,278 (1,169) 181,109

See accompanying independent auditor's report Reconciliation: Net change in fund balance, budgetary basis Change in fair value of investments Advances budgeted as transfers Unbudgeted funds Deferred revenues Net change in fund balance, GAAP basis

$

$

14,540 (666) 13,874

110

$

$

$

9,375 (2,037) 7,338

$

111

$

147,778

COLLIER COUNTY, FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012

Court Information Technology Fee (Budgetary Basis)

Conservation Collier (Budgetary Basis)

Budget Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous

$

Total revenues

C-57

Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service Capital outlay Total expenditures Excess (deficit) of revenues over (under) expenditures Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refunding bond escrow Sale of capital assets Insurance proceeds Transfers in Transfers out Total other financing sources (uses)

$

$

(371,849) 6,180 (38,601) 1,128

$

Actual

600,000 3,300 -

$

Variance

754,502 3,665 293

$

Budget

154,502 365 293

$

Actual

8,305,723 -

$

Variance

8,041,861 -

$

Budget

(263,862) -

$

Actual

2,300 19,286

$

Variance

6,053 379 28,407

3,753 379 9,121

603,300

758,460

155,160

8,305,723

8,041,861

(263,862)

21,586

34,839

13,253

902,790 3,355,700

745,498 665

157,292 3,355,035

643,600 12,200 6,000 63,400

548,587 10,174 3,582 20,082

95,013 2,026 2,418 43,318

8,305,723 -

8,001,788 -

303,935 -

29,886 -

26,161 -

3,725 -

4,258,490

746,163

3,512,327

725,200

582,425

142,775

8,305,723

8,001,788

303,935

29,886

26,161

3,725

5,813,210

8,922,395

3,109,185

(121,900)

176,035

297,935

-

40,073

40,073

(8,300)

8,678

16,978

7,114,700 (7,154,945)

6,364,791 (7,133,537)

-

-

-

-

-

-

-

-

26,533,000

(749,909) 21,408

(768,746)

(728,501)

8,153,649

2,380,684

20,760,035 $

28,913,684

$

2,380,684

-

-

-

-

-

-

(121,900)

176,035

297,935

-

40,073

40,073

394,700 $

272,800

394,700 $

570,735

$

176,035 (881) 175,154

-

$

297,935

$

-

$

40,073

$

40,073 40,073

(8,300)

$

40,073

42,600 $

34,300

-

-

8,678

16,978

42,600 $

51,278

See accompanying independent auditor's report Reconciliation: Net change in fund balance, budgetary basis Change in fair value of investments Advances budgeted as transfers Unbudgeted funds Deferred revenues Net change in fund balance, GAAP basis

$

(403,142)

20,760,035 $

9,486,051 6,180 169,899 6,428

Budget

9,668,558

5,772,965

Fund balances at beginning of year

Variance

University Extension

10,071,700

(40,245)

Net change in fund balances

Fund balances (deficits) at end of year

9,857,900 208,500 5,300

Actual

Court Services

$

$

8,153,649 (39,720) 8,113,929

112

$

$

$

$

113

8,678 (84) 8,594

$

16,978

COLLIER COUNTY, FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012

Court Facilities Fee (Budgetary Basis)

Budget Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous

$

Total revenues

C-58

Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service Capital outlay Total expenditures Excess (deficit) of revenues over (under) expenditures Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refunding bond escrow Sale of capital assets Insurance proceeds Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances (deficits) at end of year

Actual

1,090,000 9,000 -

$

Variance

1,158,998 21,792 -

$

Budget

68,998 12,792 -

$

5,000 20,000 386,800 138,000 17,100 99,400

Actual

$

4,976 469,940 158,163 24,619 98,939

Gas Tax Revenue Bonds (Budgetary Basis)

Variance

$

Budget

(24) (20,000) 83,140 20,163 7,519 (461)

$

Capital Improvement Revenue Bonds (Budgetary Basis)

Actual

4,500 -

$

17,625 -

Variance

$

Budget

13,125 -

$

Actual

-

$

Variance

569 -

569 -

1,180,790

81,790

666,300

756,637

90,337

4,500

17,625

13,125

-

569

569

10,000 1,612,423

5,142 -

4,858 1,612,423

225,310 734,500 226,176 14,300 242,990

168,094 299,909 185,015 13,468 74,249

57,216 434,591 41,161 832 168,741

15,006,300 -

14,981,108 -

25,192 -

13,229,300 -

13,220,919 -

8,381 -

1,622,423

5,142

1,617,281

1,443,276

740,735

702,541

15,006,300

14,981,108

25,192

13,229,300

13,220,919

8,381

(523,423)

1,175,648

1,699,071

(776,976)

15,902

792,878

(15,001,800)

(14,963,483)

38,317

(13,229,300)

(13,220,350)

8,950

-

-

-

51,900 -

48,900 (11,457)

(3,000) (11,457)

38,680,000 4,766,400 (43,336,700) 13,479,900 -

38,680,000 4,766,373 (43,336,693) 13,479,900 -

(3,139,000) 16,361,100 (5,315,800)

(3,138,948) 16,339,223 (5,315,794)

52 (21,877) 6

51,900

37,443

(14,457)

13,589,600

13,589,580

(725,076)

53,345

778,421

(1,412,200)

(1,373,903)

2,983,686

-

3,955,200

3,955,200

-

-

-

(523,423)

1,175,648

1,699,071

2,939,623

-

2,416,200

$

4,115,271

$

1,175,648 (5,160) 1,170,488

$

1,699,071

2,983,686 $

2,258,610

$

3,037,031

$

778,421

$

2,543,000

$

2,581,297

$

(1,373,903) (4,228) (1,378,131)

(27) 7 (20) 38,297 $

38,297

$

7,906,300

7,884,481

(21,819)

(5,323,000)

(5,335,869)

(12,869)

15,724,600

15,724,600

10,401,600

$

10,388,731

$

(5,335,869) (14,365) 5,315,794 (34,440)

See accompanying independent auditor's report Reconciliation: Net change in fund balance, budgetary basis Change in fair value of investments Advances budgeted as transfers Unbudgeted funds Deferred revenues Net change in fund balance, GAAP basis

$

1,099,000

2,939,623 $

Other Special Revenue Funds (Budgetary Basis)

$

114

$

$

53,345 (5,142) 444,881 493,084

$

$

115

$

(12,869)

COLLIER COUNTY, FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012

Conservation Collier Limited General Obligation Bonds (Budgetary Basis)

Radio Road East Limited General Obligation Bonds (Budgetary Basis)

Budget Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous

$

Total revenues

C-59

Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service Capital outlay Total expenditures Excess (deficit) of revenues over (under) expenditures Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refunding bond escrow Sale of capital assets Insurance proceeds Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances (deficits) at end of year

Actual

-

$

31 -

$

Budget

31 -

$

4,742,100 4,300 -

Actual

$

4,572,927 5,170 -

Variance

$

Budget

(169,173) 870 -

$

Actual

6,000 -

$

Forest Lakes Limited General Obligation Bonds (Budgetary Basis)

Variance

7,868 -

$

Budget

1,868 -

$

380,600 1,000 -

Actual

$

366,503 2,077 -

$

(14,097) 1,077 -

31

31

4,746,400

4,578,097

(168,303)

6,000

7,868

1,868

381,600

368,580

(13,020)

44,400 -

37,176 -

7,224 -

4,933,200 -

4,929,900 -

3,300 -

1,604,400 -

1,313,654 -

290,746 -

561,900 -

560,204 -

1,696 -

44,400

37,176

7,224

4,933,200

4,929,900

3,300

1,604,400

1,313,654

290,746

561,900

560,204

1,696

(44,400)

(37,145)

7,255

(186,800)

(351,803)

(165,003)

(1,598,400)

(1,305,786)

292,614

(180,300)

(191,624)

(11,324)

60,800 -

60,800 -

-

900,000 (1,240,200)

952,183 (465,165)

52,183 775,035

1,500,000 -

1,400,000 -

(100,000) -

500,000 (16,100)

504,375 (13,390)

4,375 2,710

60,800

60,800

-

(340,200)

487,018

827,218

1,500,000

1,400,000

(100,000)

483,900

490,985

7,085

16,400

23,655

7,255

(527,000)

135,215

662,215

192,614

303,600

299,361

(4,239)

16,400

$

23,655

$

23,655 (14) 23,641

$

7,255

764,100 $

237,100

764,100 $

899,315

$

135,215 (806) 134,409

(98,400) 1,524,200

$

662,215

94,214

$

1,425,800

1,524,200 $

1,618,414

$

192,614

72,300 $

375,900

72,300 $

371,661

$

299,361 (538) 298,823

See accompanying independent auditor's report Reconciliation: Net change in fund balance, budgetary basis Change in fair value of investments Advances budgeted as transfers Unbudgeted funds Deferred revenues Net change in fund balance, GAAP basis

Variance

-

$

Variance

Community Redevelopment Taxable Note (Budgetary Basis)

$

116

$

$

$

94,214 (444) 93,770

$

117

$

(4,239)

COLLIER COUNTY, FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012

Special Obligation Revenue Bonds (Budgetary Basis)

Budget Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous

$

-

Total revenues

6,924 -

$

Budget

6,924 -

$

700 102,000 -

Actual

$

1,195 500 110,582 -

Variance

$

Budget

1,195 (200) 8,582 -

$

35,600 -

Actual

$

58,950 450

C-60

6,924

6,924

102,700

112,277

9,577

35,600

59,400

9,221,500 -

9,173,577 -

47,923 -

6,493,895 -

6,492,167 -

1,728 -

863,817 54,456 50,000 5,931,842

842,216 257,240 38,005 350,954

9,221,500

9,173,577

47,923

6,493,895

6,492,167

1,728

6,900,115

(9,221,500)

(9,166,653)

54,847

(6,391,195)

(6,379,890)

11,305

92,295,000 12,425,350 (104,074,750) 8,541,200 -

92,295,000 12,425,334 (104,074,744) 8,540,051 -

(16) 6 (1,149) -

6,486,895 (107,500)

6,482,815 (105,770)

(4,080) 1,730

(1,159)

6,379,395

6,377,045

(2,350)

Total expenditures Excess (deficit) of revenues over (under) expenditures

Total other financing sources (uses)

9,186,800

Net change in fund balances

9,185,641

(34,700)

Fund balances at beginning of year Fund balances (deficits) at end of year

$

Variance

-

Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service Capital outlay

Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refunding bond escrow Sale of capital assets Insurance proceeds Transfers in Transfers out

Actual

County Wide Capital Improvememts (Budgetary Basis)

Other Debt Service (Budgetary Basis)

18,988

203,200 $

168,500

53,688

203,200 $

222,188

(11,800)

$

53,688

(2,845)

30,000 $

18,200

8,955

30,000 $

27,155

$

(2,845) (114) (2,959)

8,955

$

Variance

$

Budget

23,350 450

$

$

565,608 83,514 16,699

$

$

18,988 (1,463) 17,525

118

$

$

153,608 40,514 16,699 210,821

21,601 (202,784) 11,995 5,580,888

506,189 10,897,463

486,267 780,386

19,922 10,117,077

1,488,415

5,411,700

11,403,652

1,266,653

10,136,999

(6,864,515)

(1,429,015)

5,435,500

(10,948,652)

(600,832)

10,347,820

3,730,600 (3,840,400)

4,352 1,020,400 (2,630,200)

4,352 (2,710,200) 1,210,200

250,000 (336,424)

250,000 (322,648)

13,776

(109,800)

(1,605,448)

(1,495,648)

(86,424)

(72,648)

13,776

(6,974,315)

(3,034,463)

3,939,852

(11,035,076)

(673,480)

10,361,596

9,430,450 $

6,395,987

$

(3,034,463) (12,721) 2,269,000 (778,184)

$

3,939,852

13,599,648 $

2,564,572

13,599,648 $

12,926,168

See accompanying independent auditor's report Reconciliation: Net change in fund balance, budgetary basis Change in fair value of investments Advances budgeted as transfers Unbudgeted funds Deferred revenues Net change in fund balance, GAAP basis

Variance

665,821

2,456,135

23,800

412,000 43,000 -

Actual

455,000

9,430,450

$

Parks Improvements (Budgetary Basis)

$

$

$

119

(673,480) (18,008) (250,000) (941,488)

$

10,361,596

COLLIER COUNTY, FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012

County-Wide Library Impact Fees (Budgetary Basis)

Budget Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous

$

Total revenues

C-61

Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service Capital outlay Total expenditures Excess (deficit) of revenues over (under) expenditures Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refunding bond escrow Sale of capital assets Insurance proceeds Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances (deficits) at end of year

415,800 13,000 -

Actual

$

Variance

480,677 11,867 -

$

Budget

64,877 (1,133) -

$

460,800 7,000 -

Actual

$

772,785 9,557 -

Emergency Medical Services Impact Fees (Budgetary Basis)

Variance

$

Budget

311,985 2,557 -

$

154,300 5,000 -

Actual

$

Water Management (Budgetary Basis)

Variance

209,683 2,118 -

$

Budget

55,383 (2,882) -

$

1,000,000 52,500 331,900 -

Actual

$

1,000,000 79,600 319,749 240

$

27,100 (12,151) 240

492,544

63,744

467,800

782,342

314,542

159,300

211,801

52,501

1,384,400

1,399,589

15,189

148,789 632,639

41,125 487,834

107,664 144,805

210,325 49,129

13,084 -

197,241 49,129

129,228 3,678

3,855 -

125,373 3,678

3,677,450 12,864,456

1,844,175 1,190,920

1,833,275 11,673,536

781,428

528,959

252,469

259,454

13,084

246,370

132,906

3,855

129,051

16,541,906

3,035,095

13,506,811

(352,628)

(36,415)

316,213

208,346

769,258

560,912

26,394

207,946

181,552

(15,157,506)

(1,635,506)

13,522,000

(1,148,300)

(1,148,300)

-

1,145,700 (2,032,500)

1,145,700 (2,028,150)

4,350

426,900 (724,600)

426,900 (724,269)

331

6,224,700 (1,188,181)

6,390,544 (1,024,505)

165,844 163,676

5,036,519

5,366,039

329,520

(10,120,987)

3,730,533

13,851,520

(1,148,300)

(1,148,300)

-

(886,800)

(882,450)

4,350

(297,700)

(297,369)

331

(1,500,928)

(1,184,715)

316,213

(678,454)

(113,192)

565,262

(271,306)

(89,423)

181,883

1,056,700

2,557,628 $

1,372,913

$

(1,184,715) (2,127) (1,186,842)

$

316,213

2,038,164 $

1,359,710

2,038,164 $

1,924,972

$

(113,192) (2,317) (1,145,700) (1,261,209)

471,207

$

565,262

$

199,901

471,207 $

381,784

$

(89,423) (432) (426,900) (516,755)

$

181,883

10,190,087 $

69,100

10,190,087 $

13,920,620

See accompanying independent auditor's report Reconciliation: Net change in fund balance, budgetary basis Change in fair value of investments Advances budgeted as transfers Unbudgeted funds Deferred revenues Net change in fund balance, GAAP basis

Variance

428,800

2,557,628 $

Correctional Facilities Impact Fees (Budgetary Basis)

$

120

$

$

$

$

121

3,730,533 (19,016) 3,711,517

$

13,851,520

COLLIER COUNTY, FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012

Parks Impact Districts (Budgetary Basis)

Budget Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous

$

Total revenues

C-62

Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service Capital outlay Total expenditures Excess (deficit) of revenues over (under) expenditures Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refunding bond escrow Sale of capital assets Insurance proceeds Transfers in Transfers out Total other financing sources (uses) Net change in fund balances

Actual

$

4,240,865 74,232 -

$

Budget

2,002,865 22,232 -

$

10,475,100 417,400 -

Actual

$

Variance

9,905,583 785,613 361,679 827

$

Budget

(569,517) 785,613 (55,721) 827

$

12,817,900 7,482,100 460,917 351,000 20,358

Actual

$

12,898,769 7,971,753 260,039 310,009 322,539

Variance

$

Budget

80,869 489,653 (200,878) (40,991) 302,181

$

292,800 12,900 -

Actual

$

Variance

467,279 12,826 -

174,479 (74) -

2,025,097

10,892,500

11,053,702

161,202

21,132,275

21,763,109

630,834

305,700

480,105

174,405

755,284 3,006,080

132,375 900,989

622,909 2,105,091

6,673,714 45,340,675

2,582,245 15,625,697

4,091,469 29,714,978

9,800,223 52,457,346

8,957,369 12,140,889

842,854 40,316,457

164,877 -

2,366 -

162,511 -

3,761,364

1,033,364

2,728,000

52,014,389

18,207,942

33,806,447

62,257,569

21,098,258

41,159,311

164,877

2,366

162,511

(1,471,364)

3,281,733

4,753,097

(41,121,889)

(7,154,240)

33,967,649

(41,125,294)

664,851

41,790,145

140,823

477,739

336,916

(3,214,100)

(3,211,775)

2,325

(3,228,600)

-

3,228,600

16,465,200 (26,140,218)

(3,214,100)

(3,211,775) 69,958

7,985,500

12,670,964 $

12,740,922

900 (6,166,400) 1,474,983

1,700,000 (2,724,300)

1,079,600 (2,723,568)

(1,024,300)

(1,643,968)

(619,668)

(883,477)

(1,166,229)

(282,752)

2,325

(3,228,600)

-

3,228,600

(9,675,018)

(14,365,535)

(4,690,517)

4,755,422

(44,350,489)

(7,154,240)

37,196,249

(50,800,312)

(13,700,684)

37,099,628

$

900 10,298,800 (24,665,235)

4,755,422

56,838,993 $

12,488,504

56,838,993 $

49,684,753

$

(7,154,240) (75,519) (7,229,759)

57,341,653

$

37,196,249

$

6,541,341

57,341,653 $

43,640,969

$

(13,700,684) (60,212) (13,760,896)

$

37,099,628

2,395,081 $

1,511,604

$

$

69,958 (16,194) 53,764

122

$

$

1,228,852

$

(1,166,229) (2,678) (1,079,600) (2,248,507)

$

123

(620,400) 732

2,395,081 $

See accompanying independent auditor's report Reconciliation: Net change in fund balance, budgetary basis Change in fair value of investments Advances budgeted as transfers Unbudgeted funds Deferred revenues Net change in fund balance, GAAP basis

$

4,315,097

12,670,964 $

Variance

Law Enforcement Impact Fees (Budgetary Basis)

2,290,000

(4,685,464)

Fund balances at beginning of year Fund balances (deficits) at end of year

2,238,000 52,000 -

Road Construction (Budgetary Basis)

Road Impact Districts (Budgetary Basis)

$

(282,752)

COLLIER COUNTY, FLORIDA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (BUDGETARY BASIS) MAJOR CAPITAL PROJECT AND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012

Nonmajor Enterprise Funds Other Capital Projects (Budgetary Basis)

Budget Revenues: Taxes Licenses, permits and impact fees Intergovernmental Charges for services Fines and forfeitures Interest income Special assessments Miscellaneous

$

Total revenues

C-63

Expenditures: Current: General government Public safety Physical environment Transportation Economic environment Human services Culture and recreation Debt service Capital outlay Total expenditures Excess (deficit) of revenues over (under) expenditures Other financing sources (uses): Bonds issued Premiums on bonds issued Payment to refunding bond escrow Sale of capital assets Insurance proceeds Transfers in Transfers out Total other financing sources (uses) Net change in fund balances

Actual

$

6,533 15,251 124,026 1,419

4,533 (1,749) (3,074) 1,419 1,129

832,502 3,852 1,736,212 10,984 1,136,285

150,750 1,423,419 25,048 645,184

681,752 3,852 312,793 (14,064) 491,101

3,719,835

2,244,401

1,475,434

(3,573,735)

(2,097,172)

1,476,563

1,411,600 (6,500)

1,311,600 (3,931)

1,405,100

1,307,669

423,100

(100,000) 2,569 (97,431)

(789,503)

1,379,132

2,591,735 $

1,802,232

See accompanying independent auditor's report Reconciliation: Net change in fund balance, budgetary basis Change in fair value of investments Advances budgeted as transfers Unbudgeted funds Deferred revenues Net change in fund balance, GAAP basis

$

147,229

2,591,735 $

Variance

146,100

(2,168,635)

Fund balances at beginning of year Fund balances (deficits) at end of year

2,000 17,000 127,100 -

EMERGENCY MEDICAL SERVICES – To account for the provision of emergency ambulance and paramedical services to users throughout the County.

$

$

(789,503) (2,832) (792,335)

124

$

1,379,132

GOODLAND WATER – To account for the provision of potable water services to residents of Goodland. AIRPORT AUTHORITY – To account for the provision of landing facilities and the sale of fuel at the airports. COLLIER AREA TRANSIT – To account for the provision of public transportation throughout the County.

COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF NET ASSETS NONMAJOR ENTERPRISE FUNDS SEPTEMBER 30, 2012

Emergency Medical Services

Goodland Water

COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS NONMAJOR ENTERPRISE FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012 Total Nonmajor Enterprise Funds

Collier Area Transit

Airport Authority

ASSETS Current assets: Cash, cash equivalents and investments Receivables: Trade, net Interest Unbilled revenue Due from other funds Due from other governments Inventory Restricted assets: Cash, cash equivalents and investments Due from other governments Total current assets

$ 2,700,958

$

195,931

$

783,648

$

102,763

$

3,783,300

Total noncurrent assets Total assets

23,078 207 8,495 -

25,069 898 1,529 120,900

207 354 268,145 -

2,921,896 4,764 178,380 269,674 4,026 138,653

26,945 -

-

107,818 125,984

104,778 4,627,473

239,541 4,753,457

5,796,414

227,711

1,165,846

5,103,720

12,293,691

4,567,709

739,698

2,936,323 17,940,220

7,796,058 9,179,938

10,732,381 32,427,565

4,567,709

739,698

20,876,543

16,975,996

43,159,946

10,364,123

967,409

22,042,389

22,079,716

55,453,637

C-64

LIABILITIES Current liabilities: Accounts payable Wages payable Due to other funds Due to other governments Due to individuals Compensated absences Capital lease obligations Liabilities payable from restricted assets: Accounts payable Retainage payable Refundable deposits Unearned revenue Total current liabilities

Operating revenues: Charges for services Miscellaneous

$

Total operating revenues 2,873,542 3,305 169,885 4,026 17,753

Noncurrent assets: Capital assets: Land and nondepreciable capital assets Depreciable capital assets, net

Emergency Medical Services

137,177 264,888 82 377,269 475,367 134,914

613 -

9,516 14,573 1,911 40,300 -

936,736 2,032 2,404,328 89,147 4,190 -

1,084,042 281,493 2,404,410 91,058 377,269 519,857 134,914

Operating expenses: Personal services Operating Depreciation Total operating expenses Operating loss Non-operating revenues (expenses): Operating grants and contributions Interest income Insurance reimbursement Interest expense Loss on disposal of capital assets Total non-operating revenues (expenses)

10,200,091 48,890

Goodland Water $

356,797 1,654

-

24,071 17,364 89,199

638,306 67,037 -

662,377 67,037 17,364 116,144

1,416,642

613

196,934

4,141,776

5,755,965

Total noncurrent liabilities Total liabilities

203,728 39,651

-

17,272 -

1,795 -

222,795 39,651

243,379

-

17,272

1,795

262,446

1,660,021

613

214,206

4,143,571

6,018,411

Total net assets

4,393,144 4,310,958 $ 8,704,102

$

739,698 227,098

20,876,543 951,640

16,975,996 960,149

966,796

$ 21,828,183

$ 17,936,145

14,684,703 87,489 14,772,192

17,524,685 3,362,216 683,509

407,389 56,693

1,049,309 2,573,796 954,392

196,344 8,660,489 987,212

18,770,338 15,003,890 2,681,806

21,570,410

464,082

4,577,497

9,844,045

36,456,034

(11,321,429)

(105,631)

(1,773,078)

(8,483,704)

(21,683,842)

88,966 17,534 3,745 (12,759) (10,094)

1,313 -

8,686 2,321 -

2,591,039 5,421 -

2,680,005 32,954 6,066 (12,759) (10,094)

2,596,460

2,696,172

(11,234,037)

87,392

(104,318)

(1,762,071)

(5,887,244)

(18,987,670)

Capital grants and contributions Transfers in Transfers out

952,185 12,797,940 (3,000)

(19,700)

2,783,745 538,000 (250,000)

4,487,257 4,278,598 -

8,223,187 17,614,538 (272,700)

Total transfers and contributions

25,565,025

Loss before contributions and transfers

1,313

11,007

13,747,125

(19,700)

3,071,745

8,765,855

Changes in net assets

2,513,088

(124,018)

1,309,674

2,878,611

6,577,355

Net assets - beginning

6,191,014

20,518,509

15,057,534

42,857,871

Net assets - ending

$

8,704,102

1,090,814 $

966,796

49,435,226

See accompanying independent auditor's report

126

$

1,360,341

42,985,381 6,449,845 $

1,354,270 6,071

2,804,419

NET ASSETS Invested in capital assets, net of related debt Unrestricted

$

358,451

Noncurrent liabilities: Compensated absences Capital lease obligations

2,773,545 30,874

10,248,981

See accompanying independent auditor's report 26,945

$

Total Nonmajor Enterprise Funds

Collier Area Transit

Airport Authority

127

$

21,828,183

$

17,936,145

$

49,435,226

COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012

Emergency Medical Services Cash flows from operating activities: Cash received for services Cash payments for goods and services Cash payments to employees Cash payments for interfund services Cash payments on refundable deposits Net cash used for operating activities

Goodland Water

Total Nonmajor Enterprise Funds

Collier Area Transit

Airport Authority

$ 10,528,504 $ 350,198 $ 2,787,550 $ 1,360,294 $ (1,714,869) (291,030) (2,162,805) (6,554,735) (17,525,175) (1,059,380) (202,006) (1,559,891) (120,469) (437,586) (2,278,289) (867) (10,271,431) (61,301) (873,088) (7,674,736)

15,026,546 (10,723,439) (18,786,561) (4,396,235) (867) (18,880,556)

C-65

Cash flows from non-capital financing activities: Cash received from operating grants Cash transfers from other funds Cash transfers to other funds Net cash provided by (used for) non-capital financing activities

38,919 12,797,940 (3,000)

(19,700)

817,648 (531,224)

3,124,318 9,568,831 (4,083,598)

3,980,885 22,366,771 (4,637,522)

12,833,859

(19,700)

286,424

8,609,551

21,710,134

Cash flows from capital and related financing activities: Receipts from insurance reimbursements Proceeds from disposal of capital assets Proceeds from capital grants Payments for capital acquisitions Principal payments on leases Interest and fiscal agent fees paid Net cash used for capital and related financing activities

3,745 (843,356) (212,246) (12,759) (1,064,616)

(3,115) (3,115)

23,497 11,495 1,046,572 (1,884,937) (803,373)

31,558 11,495 5,952,870 (7,826,910) (212,246) (12,759) (2,055,992)

16,741 16,741

1,464 1,464

Cash flows from investing activities: Interest on investments Net cash provided by investing activities Net increase (decrease) in cash, cash equivalents and investments

1,514,553

(82,652)

Cash, cash equivalents and investments, October 1, 2011

1,213,350

278,583

4,316 4,906,298 (5,095,502) (184,888) 9,750 9,750

5,716 5,716

33,671 33,671

(761,802)

137,158

807,257

1,653,268

70,383

3,215,584

Cash, cash equivalents and investments, September 30, 2012

$

2,727,903

$ 195,931

$

891,466

$

207,541

$

4,022,841

Cash, cash equivalents and investments Cash, cash equivalents and investments - restricted Cash, cash equivalents and investments, September 30, 2012

$

$ 195,931 $ 195,931

$

783,648 107,818 891,466

$

102,763 104,778 207,541

$

$

2,700,958 26,945 2,727,903

3,783,300 239,541 4,022,841

Operating loss

$ (11,321,429) $ (105,631) $ (1,773,078) $ (8,483,704) $

Adjustments to reconcile operating loss to net cash provided by (used for) operating activities: Depreciation expense Net changes in assets and liabilities: Trade receivable Due from other funds Due from other governments Inventory Accounts payable Wages payable Due to other funds Due to other governments Due to individuals Compensated absences Refundable deposits Unearned revenue Total adjustments

$

683,509

56,693

954,392

987,212

282,689 14 (3,133) (1,989) 89,363 2,884 82 (47) (3,374) -

(8,253) (4,110) -

(10,659) 14,119 (40,714) (1,005) 23 (9,066) (867) (6,233)

(47) (172,535) (788) (4,874) -

899,990

808,968

1,049,998

44,330

Net cash provided by (used for) operating activities

$ (10,271,431) $

Non-cash investing, capital and financing activities: Change in fair value of investments Contributed capital assets

$

See accompanying independent auditor's report

$

5,065 952,185

128

$

(61,301) $

(346) $ -

$

(873,088) $ (7,674,736) $

(1,995) $ 11,008

(1,276) $ 709,518

(21,683,842)

2,681,806 263,730 14 (3,133) 12,130 (127,996) 1,091 82 23 (47) (17,314) (867) (6,233) 2,803,286 (18,880,556)

1,448 1,672,711

Internal Service Funds SELF-INSURANCE – To account for the self-insurance costs of providing coverage for property, general and vehicle liability. To account for the provisions of health benefits to Board and participating constitutional officer employees and their dependents. To account for payment of workers’ compensation claims, in lieu of insurance. SHERIFF'S SELF-INSURANCE – To account for the provisions of health benefits to Sheriff employees and their dependents. To account for payment of workers’ compensation claims, in lieu of insurance. FLEET MANAGEMENT – To account for fuel, oil, lubricants, repairs and maintenance of County vehicles and the use of certain County owned vehicles by County employees. INFORMATION TECHNOLOGY – To account for the costs of operating the County data processing facility and telephone communication system.

COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS SEPTEMBER 30, 2012

SelfInsurance

Sheriff's SelfInsurance

Fleet Management

COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012

Information Technology

ASSETS Current assets: Cash, cash equivalents and investments Receivables: Trade, net Interest Due from other funds Due from other governments Deposits Inventory Total current assets Noncurrent assets: Capital assets: Depreciable capital assets, net Total noncurrent assets Total assets

$ 24,999,915

$ 15,359,981

2,502,487

$ 43,582,198

96,281 23,329 134,109 313,592 -

500,000 -

$

719,815 10,040 428 105 40,287 868,543

$

31,300 2,421 91,550 -

137,621 26,178 725,764 40,287 313,592 868,543

25,567,226

15,859,981

1,639,218

2,627,758

45,694,183

284,802

-

12,108,764

6,998,012

19,391,578

-

12,108,764

6,998,012

19,391,578

25,852,028

15,859,981

13,747,982

9,625,770

65,085,761

LIABILITIES

C-66

Current liabilities: Accounts payable Wages payable Due to other funds Self-insurance claims payable Compensated absences Total current liabilities

276,346 16,280 395 3,548,564 77,051

2,340,000 -

573,156 32,090 99,125

156,434 51,398 91,506 157,544

1,005,936 99,768 91,901 5,888,564 333,720

3,918,636

2,340,000

704,371

456,882

7,419,889

$

41,822,277 175,119

$

1,512,212 33,022 650,070

1,048,138

Total noncurrent liabilities

2,195,304

1,048,138

42,482

67,519

3,353,443

6,113,940

3,388,138

746,853

524,401

10,773,332

42,482 -

67,519 -

Total net assets

284,802 19,453,286

12,471,843

12,108,764 892,365

$ 19,738,088

$ 12,471,843

$ 13,001,129

$

6,998,012 2,103,357

19,391,578 34,920,851 $ 54,312,429

$

Total

5,669,061 47,644

$ 74,240,621 243,057

8,597,006

5,716,705

74,483,678

1,029,143 43,340,997 24,937

17,973,208 -

1,991,985 6,338,744 556,686

3,153,353 1,242,371 1,356,859

6,174,481 68,895,320 1,938,482

Total operating expenses

44,395,077

17,973,208

8,887,415

5,752,583

77,008,283

Operating income (loss)

(2,397,681)

199,363

(290,409)

(35,878)

(2,524,605)

140,290 2,494,707 -

81,753 -

2,339 907 2,904

8,483 (9,017)

232,865 2,495,614 (6,113)

Non-operating revenues (expenses): Interest income Insurance reimbursement Gain (Loss) on disposal of capital assets

2,634,997

81,753

Income (loss) before contributions

Total non-operating revenues (expenses)

237,316

281,116

(284,259)

Capital grants and contributions Transfers in Transfers out

(926,100)

-

282 -

Change in net assets

(688,784)

Net assets - beginning Net assets - ending

20,426,872 $

19,738,088

$

6,150

(534)

2,722,366

(36,412)

197,761

361,200 -

282 361,200 (926,100)

281,116

(283,977)

324,788

(366,857)

12,190,727

13,285,106

8,776,581

54,679,286

9,101,369

$ 54,312,429

12,471,843

See accompanying independent auditor's report

130

8,576,712 20,294

18,172,571

1,512,212 143,023 1,698,208

9,101,369

$

Information Technology

41,997,396

Operating expenses: Personal services Operating Depreciation

NET ASSETS Invested in capital assets, net of related debt Unrestricted

Fleet Management

18,172,571 -

See accompanying independent auditor's report

Noncurrent liabilities: Self-insurance claims payable Compensated absences Net pension obligation Total liabilities

Operating revenues: Charges for services Miscellaneous Total operating revenues

284,802

Sheriff's SelfInsurance

SelfInsurance

Total

131

$

13,001,129

$

COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012 Sheriff's SelfInsurance

SelfInsurance Cash flows from operating activities: Cash received from other funds for services Cash received from employees for services Cash received from other governments for services Cash received from retirees for services Cash payments on behalf of retirees Cash payments for goods and services Cash payments to employees Cash payments for interfund services Net cash provided by (used for) operating activities

$

Cash flows from non-capital financing activities: Cash transfers from other funds Cash transfers to other funds Net cash provided by (used for) non-capital financing activities Cash flows from capital and related financing activities: Receipts from insurance reimbursements Proceeds from disposal of capital assets Payments for capital acquisitions Net cash provided by (used for) capital and related financing activities

Fleet Management

Fiduciary Funds

Information Technology

Total

36,519,639 $ 17,897,664 $ 8,125,448 $ 5,707,280 $ 68,250,031 5,489,426 5,489,426 464,179 464,179 642,454 555,343 1,197,797 (612,146) (612,146) (43,169,618) (17,825,399) (6,170,671) (1,717,203) (68,882,891) (1,038,124) (2,003,291) (3,178,590) (6,220,005) (102,332) (254,925) (38,536) (395,793) (2,270,701) 627,608 160,740 772,951 (709,402) (1,776,100)

-

-

361,200 -

361,200 (1,776,100)

(1,776,100)

-

-

361,200

(1,414,900)

2,587,563 (4,385)

-

1,302 2,905 (16,857)

(47,383)

2,588,865 2,905 (68,625)

(12,650)

(47,383)

2,523,145

C-67

2,583,178

-

Cash flows from investing activities: Interest on investments

151,472

81,753

2,472

7,671

Net cash provided by investing activities

151,472

81,753

2,472

7,671

243,368

(1,312,151)

709,361

150,562

1,094,439

642,211

Net increase (decrease) in cash, cash equivalents and investmen

26,312,066

14,650,620

Cash, cash equivalents and investments, September 30, 2012

Cash, cash equivalents and investments, October 1, 2011 $

24,999,915

$ 15,359,981

Operating income (loss)

$

(2,397,681) $

Adjustments to reconcile operating income (loss) to net cash provided (used for) by operating activities: Depreciation expense Net changes in assets and liabilities: Trade receivable Due from other funds Due from other governments Deposits Inventory Prepaid costs Accounts payable Wages payable Due to other funds Compensated absences Self-insurance claims payable Net pension obligation

24,937

Total adjustments Net cash provided by (used for) operating activities Non-cash investing, capital and financing activities: Change in fair value of investments Contributed capital assets

199,363

$ $

-

65,276 (134,109) 110,961 187,581 (780) (151) (8,201) (330,723) 212,189

151,534 280,436 89,000 (92,725)

126,980

428,245

$ 2,502,487

(290,409) $

$

$

(35,855) $ -

26,048 -

$

160,740

43,582,198

(35,878) $

(2,524,605)

1,938,482

15,819 (91,550) 9,800 49,410 (562,778) (1,023) 56,506 (24,214) -

451,149

627,608

42,939,987 $

1,356,859

(9,788) (10) 2,419 (263,798) 176,946 980 (12,286) -

(2,270,701) $

132

1,408,048

719,815

556,686

$

See accompanying independent auditor's report

569,253

243,368

222,841 54,767 12,219 110,961 (263,798) 49,410 (198,251) (823) 56,355 (44,701) (241,723) 119,464

808,829 $

(644) $ 282

772,951

1,815,203 $

(709,402)

(3,415) $ -

(13,866) 282

CLERK OF COURTS AGENCY FUND – To account for monies held in Trust by the Clerk of the Circuit Court prior to disbursement. SHERIFF AGENCY FUND – To account for monies held in a custodial capacity by the Sheriff. TAX COLLECTOR AGENCY FUND – To account for assets held by the Tax Collector prior to legal disbursement. DEPOSITS AGENCY FUND – To account for monies held by the County for businesses and individuals. PINE RIDGE AND NAPLES PRODUCTION PARK AGENCY FUND – To account for the receipt of special assessments and the payment of principal and interest on behalf of assessment holders.

COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES AGENCY FUNDS SEPTEMBER 30, 2012

COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012 Balance October 1

Sheriff Agency Fund

Tax Collector Agency Fund

Pine Ridge and Naples Deposits Production Park Agency Fund Agency Fund

$ 21,872,332

$

476,968

$ 5,660,404

$ 3,197,324

$ 1,118,960

$32,325,988

20,637

15,004

2,798 -

983 5,832

3,781 41,473

Total assets

497,605

$ 5,675,408

$ 3,200,122

$ 1,125,775

$32,371,242

$ 21,872,332

$

Deductions

Balance September 30

Clerk of Courts Agency Fund

Clerk of Courts Agency Fund

Assets: Cash, cash equivalents and investments Total

ASSETS Cash, cash equivalents and investments Receivables: Interest Other

Additions

Total assets Liabilities: Due to other governments Refundable deposits Total liabilities

$ 18,905,959

$

153,018,389

$

150,052,016

$ 21,872,332

$ 18,905,959

$

153,018,389

$

150,052,016

$ 21,872,332

$

2,266,815 16,639,144

$

10,261,140 142,757,249

$

11,531,190 138,520,826

$

$ 18,905,959

$

153,018,389

$

150,052,016

$ 21,872,332

$

$

3,635,443

$

3,622,562

996,765 20,875,567

Sheriff Agency Fund LIABILITIES Due to other governments Due to individuals Refundable deposits Due to special assessment holders Total liabilities

$

996,765 20,875,567 -

$

$ 21,872,332

$

70,101 427,504 -

$ 5,462,210 213,198 -

$

3,200,122 -

497,605

$ 5,675,408

$ 3,200,122

$

1,125,775

$ 6,529,076 640,702 24,075,689 1,125,775

$ 1,125,775

$32,371,242

Assets: Cash, cash equivalents and investments Receivable: Other Total assets Liabilities: Due to other governments Due to individuals

See accompanying independent auditor's report

Total liabilities

464,087 8,864

20,637

$

476,968

8,864

20,637

C-68

$

472,951

$

3,656,080

$

3,631,426

$

497,605

$

45,180 427,771

$

70,101 427,504

$

45,180 427,771

$

70,101 427,504

$

472,951

$

497,605

$

472,951

$

497,605

$

5,443,691

$

818,281,714

$

818,065,001

$

5,660,404

Tax Collector Agency Fund Assets: Cash, cash equivalents and investments Receivable: Other Total assets Liabilities: Due to other governments Due to individuals Total liabilities

8,436

1,527,888

1,521,320

15,004

$

5,452,127

$

819,809,602

$

819,586,321

$

5,675,408

$

5,309,135 142,992

$

796,155,862 32,269,000

$

796,002,787 32,198,794

$

5,462,210 213,198

$

5,452,127

$

828,424,862

$

828,201,581

$

5,675,408

$

3,228,598

$

494,650

$

525,924

$

3,197,324

$

3,200,122

Deposits Agency Fund Assets: Cash, cash equivalents and investments Receivables: Interest Total assets

3,495 $

3,232,093

2,798 $

497,448

3,495 $

529,419

2,798

Liabilities: Refundable deposits

$

3,232,093

$

489,575

$

521,546

$

3,200,122

Total liabilities

$

3,232,093

$

489,575

$

521,546

$

3,200,122 (Continued)

134

135

COLLIER COUNTY, FLORIDA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012 Balance October 1

Additions

Deductions

Balance September 30

Component Units

$

COLLIER COUNTY HOUSING FINANCE AUTHORITY – The authority was established for the purpose of stimulating the construction of residential housing for low and moderate income families through the use of public financing.

Pine Ridge and Naples Production Park Agency Fund Assets: Cash, cash equivalents and investments Receivables: Interest Other Total assets Liabilities: Due to special assessment holders Total liabilities

$

363,024

$

769,996

569 6,541

$

983 12,857

14,060 569 13,566

1,118,960 983 5,832

$

370,134

$

783,836

$

28,195

$

1,125,775

$

370,134

$

1,593,271

$

837,630

$

1,125,775

$

370,134

$

1,593,271

$

837,630

$

1,125,775

$ 28,405,359

$

976,200,192

$

972,279,563

$ 32,325,988

4,064 1,543,750

3,781 41,473

Total - All Agency Funds Assets: Cash, cash equivalents and investments Receivables: Interest Other Total assets

C-69

Liabilities: Due to other governments Due to individuals Refundable deposits Due to special assessment holders Total liabilities

4,064 23,841

3,781 1,561,382

$ 28,433,264

$

977,765,355

$

973,827,377

$ 32,371,242

$

7,621,130 570,763 19,871,237 370,134

$

806,487,103 32,696,504 143,246,824 1,593,271

$

807,579,157 32,626,565 139,042,372 837,630

$

$ 28,433,264

$

984,023,702

$

980,085,724

$ 32,371,242

See accompanying independent auditor's report

136

6,529,076 640,702 24,075,689 1,125,775

COLLIER COUNTY HEALTH FACILITIES AUTHORITY – The authority was established for the purpose of assisting health facilities in the acquisition, construction and financing of projects within the County. COLLIER COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY – The authority was established for the purpose of facilitating projects that promote economic growth and opportunities for employment in Collier County. COLLIER COUNTY EDUCATIONAL FACILITIES AUTHORITY – The authority was established for the purpose of assisting institutions of higher education in the construction, financing and refinancing of projects.

COLLIER COUNTY, FLORIDA COMPONENT UNITS COMBINING STATEMENT OF NET ASSETS SEPTEMBER 30, 2012

Housing Finance Authority

Health Facilities Authority

Industrial Development Authority

COLLIER COUNTY, FLORIDA COMPONENT UNITS COMBINING STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012

Educational Facilities Authority

FUNCTIONS/PROGRAMS

Cash, cash equivalents and investments

$

283,997

$

19,946

$

20,034

$

2,541

$

326,518

Total Assets

$

283,997

$

19,946

$

20,034

$

2,541

$

326,518

$

283,997

$

19,946

$

20,034

$

2,541

$

326,518

$

283,997

$

19,946

$

20,034

$

2,541

$

326,518

Industrial Development Authority Housing Finance Authority Educational Facilities Authority Total

NET ASSETS

Total Net Assets

Expenses

Governmental Activities

$

15 692 46

$

17,500 -

$

753

$

17,500

General revenues: Interest income Total general revenues Change in net assets Net assets - beginning Net assets - ending

$

See accompanying independent auditor's report

C-70 139

17,485 (692) (46) 16,747

$

See accompanying independent auditor's report

138

Fees, Fines and Charges for Services

Totals

ASSETS

Net assets - unrestricted

Program Revenues

Net (Expense) Revenue and Changes in Net Assets

144 144 16,891 309,627 326,518

SINGLE AUDIT/FEDERAL AND STATE SCHEDULE OF FINANCIAL ASSISTANCE The Single Audit/Federal and State schedule of financial assistance section presents Grants compliance reports filed by Collier County with Federal government and State government, respectively.

C-71

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Ernst & Young LLP Suite 500 5100 Town Center Circle Boca Raton, FL 33486 Tel: +1 561 955 8000 Fax: +1 561 955 8200 www.ey.com

Report of Independent Certified Public Accountants on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance With Government Auditing Standards Members of the Board of County Commissioners Collier County, Florida

C-72

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We have audited the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Collier County, Florida (the County) as of and for the year ended September 30, 2012, which collectively comprise the County’s basic financial statements and have issued our report thereon dated March 6, 2013. We conducted our audit in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal control over financial reporting Management of the County is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered the County’s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the County’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the County’s internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above.

1302-1025260

A member firm of Ernst & Young Global Limited

165

Ernst & Young LLP Suite 500 5100 Town Center Circle Boca Raton, FL 33486 Tel: +1 561 955 8000 Fax: +1 561 955 8200 www.ey.com

Compliance and other matters As part of obtaining reasonable assurance about whether the County’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Report of Independent Certified Public Accountants on Compliance With Requirements That Could Have a Direct and Material Effect on Each Major Federal Program and State Project and on Internal Control Over Compliance in Accordance With OMB Circular A-133 and Chapter 10.550, Rules of the Auditor General

We noted certain matters that we reported to management of the County in a separate letter dated March 6, 2013.

Members of the Board of County Commissioners Collier County, Florida

This report is intended solely for the information and use of management, the Board of County Commissioners, others within the entity, the Auditor General of the State of Florida, federal and state awarding agencies and pass-through entities and is not intended to be, and should not be, used by anyone other than these specified parties.

Compliance

C-73 March 6, 2013



We have audited Collier County, Florida’s (the County) compliance with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement, and the requirements described in the Department of Financial Services’ State Projects Compliance Supplement, that could have a direct and material effect on each of the County’s major federal programs and state projects for the year ended September 30, 2012. The County’s major federal programs and state projects are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs and state projects is the responsibility of the County’s management. Our responsibility is to express an opinion on the County’s compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations and Chapter 10.550, Rules of the Auditor General, State of Florida (Chapter 10.550). Those standards, OMB Circular A-133, and Chapter 10.550 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program or state project occurred. An audit includes examining, on a test basis, evidence about the County’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the County’s compliance with those requirements.

1302-1025260

A member firm of Ernst & Young Global Limited

166

1302-1025260

A member firm of Ernst & Young Global Limited

167

As described in the following table, the County did not comply with the following requirements that are applicable to the major federal program and state project listed below: CFDA/CSFA Number 65.010

10.559

Federal Program/ Compliance State Project Requirement Community Care for Allowable Costs/Cost the Elderly Principles Reporting Summer Food Service Allowable Costs/Cost Program for Children Principles Cash Management Period of Availability

Finding Reference 2012-1 2012-7 2012-1 2012-3 2012-5

Compliance with such requirements is necessary, in our opinion, for Collier County to comply with requirements applicable to those programs.

C-74

In our opinion, except for the noncompliance described in the preceding paragraph, the County complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs and state projects for the year ended September 30, 2012. The results of our auditing procedures also disclosed other instances of noncompliance with those requirements that are required to be reported in accordance with OMB Circular A-133 and Chapter 10.550 and which are described in the accompanying schedule of findings and questioned costs as items 2012-1, 2012-2, 2012-4 and 2012-6. Internal control over compliance The management of the County is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs and state projects. In planning and performing our audit, we considered the County’s internal control over compliance with the requirements that could have a direct and material effect on a major federal program or state project to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133 and Chapter 10.550, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the County’s internal control over compliance.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies, or material weaknesses, and therefore, there can be no assurance that all deficiencies, significant deficiencies, or material weaknesses have been identified. However, as discussed below, we identified certain deficiencies in internal control over compliance that we consider to be material weaknesses and other deficiencies that we consider to be significant deficiencies. A deficiency in internal control over compliance exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program or state project on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program or state project will not be prevented, or detected and corrected, on a timely basis. We consider the deficiencies in internal control over compliance described in the accompanying schedule of findings and questioned costs as items 2012-1 (CFDA No. 10.559 Summer Food Service Program for Children and CSFA No. 65.010 Community Care for the Elderly), 2012-3, 2012-5 and 2012-7 to be material weaknesses. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program or state project that is less severe than a material weakness yet important enough to merit attention by those charged with governance. We consider the deficiencies in internal control over compliance described in the accompanying schedule of findings and questioned costs as items 2012-1 (CFDA Nos. 14.218 and ARRA-14.253 CDBG Entitlement Grants Cluster, CFDA No. 14.228 Community Development Block Grant/State’s Program and CFDA No. ARRA-14.257 Homeless Prevention and Rapid Re-Housing Program), 2012-2, 2012-4 and 2012-6, to be significant deficiencies. The County’s responses to the findings identified in our audit are described in the accompanying schedule of findings and questioned costs. We did not audit the County’s responses and, accordingly, we express no opinion on the responses. This report is intended solely for the information and use of management, the Board of County Commissioners, others within the entity, the Auditor General of the State of Florida, and federal and state awarding agencies and pass-through entities and is not intended to be, and should not be, used by anyone other than these specified parties.

March 6, 2013 1302-1025260

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Collier County, Florida

Collier County, Florida

Schedule of Expenditures of Federal Awards and State Financial Assistance

Schedule of Expenditures of Federal Awards and State Financial Assistance

For the Fiscal Year Ended September 30, 2012

For the Fiscal Year Ended September 30, 2012 (continued)

Federal or State Grantor/Pass-Through Grantor Program Title

CFDA #/ CSFA # Grant/Contract Number

Expenditures

Payments to Subrecipients

Federal or State Grantor/Pass-Through Grantor Program Title

EXPENDITURES OF FEDERAL AWARDS Department of Agriculture Direct Programs: Rural Business-Cooperative Service: Rural Business Enterprise Grants Indirect Programs: Florida Department of Agriculture and Consumer Services: Summer Food Service Program for Children Summer Food Service Program for Children Total CFDA Total Department of Agriculture

10.769

09-011-596000558

10.559 10.559

04-0804 (2011) 04-0804 (2012)

$

14,652

11815 154064 165879 180531

$

–

– – – –

Department of Commerce

C-75

Indirect Programs: Florida Department of Environmental Protection: Coastal Zone Management Administration Awards Executive Office of the Governor Public Safety Interoperable Communications Grant Program Total Department of Commerce

Collier County

11.555

11-DS-8D-09-21-01-281

50175

–

67927 118102

– –

Department of Housing and Urban Development

Expenditures

Payments to Subrecipients

$

$

Supportive Housing Program Supportive Housing Program Supportive Housing Program Supportive Housing Program Supportive Housing Program Supportive Housing Program Supportive Housing Program Supportive Housing Program Total CFDA

14.235 14.235 14.235 14.235 14.235 14.235 14.235 14.235

FL0294B4D060801 FL0294B4D060802 FL0294B4D061003 FL0294B4D061104 FL0295B4D060802 FL0295B4D061003 FL0296B4D060802 FL0296B4D061003

Home Investment Partnerships Program Home Investment Partnerships Program Home Investment Partnerships Program Total CFDA

14.239 14.239 14.239

M-09-UC-12-0217 M-10-UC-12-0217 M-11-UC-12-0217

15,733 290,310 53,912 359,955

15,733 290,311 6,596 312,640

14.257

ARRA S09-UY-12-0024

298,169

279,093

14.228 14.228 14.228

08DB-D3-09-21-01-A03 10DB-D4-09-21-01-K09 12DB-P5-09-21-01-K39

(650) 4,458,214 9,477 4,467,041 8,395,052

15.226

Collier County

1,266,939

–

15.631

401815J021

23,209 1,290,148

– –

16.804

ARRA 2009-SB-B9-1969

223,263

–

16.738 16.738 16.738

2009-DJ-BX-0335 2010-DJ-BX-0576 2011-DJ-BX-2520

1,370 10,352 79,600

– – –

ARRA Homelessness Prevention and Rapid Re-Housing Program (HPRP)

11.419

CFDA #/ CSFA # Grant/Contract Number

Indirect Programs: Florida Department of Economic Opportunity: Community Development Block Grants/State's Program Community Development Block Grants/State's Program Community Development Block Grants/State's Program Total CFDA Total Department of Housing and Urban Development

(231) (1) 45,462 24,745 63,606 105,970 55,359 2,462 297,372

– – – – 63,606 105,969 55,359 – 224,934

– 1,333,070 – 1,333,070 3,393,994

Department of the Interior

Direct Programs: Office of Community Planning and Development:

Direct Programs: Bureau of Land Management: Payments in Lieu of Taxes

CDBG – Entitlement Grants Cluster: Community Development Block Grants/Entitlement Grants Community Development Block Grants/Entitlement Grants Community Development Block Grants/Entitlement Grants Community Development Block Grants/Entitlement Grants Community Development Block Grants/Entitlement Grants Community Development Block Grants/Entitlement Grants Total CFDA ARRA Community Development Block Grant ARRA Entitlement Grants Total CDBG – Entitlement Grants Cluster Emergency Shelter Grant Program Emergency Shelter Grant Program Total CFDA

14.218 14.218 14.218 14.218 14.218 14.218

B-03-UC-12-0016 B-08-UC-12-0016 B-08-UN-12-0003 B-10-UC-12-0016 B-11-UN-12-0003 B-11-UC-12-0016

14.253

ARRA B-09-UY-12-0016

14.231 14.231

S-10-UC-12-0024 S-11-UC-12-0024

-780 69 572290 881183 483925 437196 2373883

– – – 521,634 – 133,278 654,912

500771 2874654

493,773 1,148,685

5036 92825 97861

5,036 90,536 95,572

Fish and Wildlife Service: Partners for Fish and Wildlife Total Department of the Interior Department of Justice JAG Program Cluster: Direct Programs: ARRA Recovery Act – Edward Byrne Memorial Justice Assistance Grant (JAG) Program/ Grants to Units Of Local Government Bureau of Justice Assistance: Edward Byrne Memorial Justice Assistance Grant Program Edward Byrne Memorial Justice Assistance Grant Program Edward Byrne Memorial Justice Assistance Grant Program

See accompanying notes to the schedule of expenditures of federal awards and state projects.

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Collier County, Florida

Collier County, Florida

Schedule of Expenditures of Federal Awards and State Financial Assistance

Schedule of Expenditures of Federal Awards and State Financial Assistance

For the Fiscal Year Ended September 30, 2012 (continued)

For the Fiscal Year Ended September 30, 2012 (continued)

Federal or State Grantor/Pass-Through Grantor Program Title

Indirect Programs: Florida Department of Law Enforcement: Edward Byrne Memorial Justice Assistance Grant Program Edward Byrne Memorial Justice Assistance Grant Program Total CFDA

CFDA #/ CSFA # Grant/Contract Number

Payments to Subrecipients

$

$

Federal or State Grantor/Pass-Through Grantor Program Title

2011-JAGC-COLL-1-B2-213 2012-JAGC-COLL-1-C4-125

18,151 131,472 240,945

– – –

464,208

–

C-76

2010-VT-BX-0004

26,770

–

Violence Against Women Office: Supervised Visitation, Safe Havens for Children

16.527

2009-CW-AX-K011

88,097

–

Bureau of Justice Assistance: Drug Court Discretionary Grant Program

16.585

2010-DC-BX-0016

45,340

38,269

State Criminal Alien Assistance Program

16.606

2008-AP-BX-0859

461,423

–

Bulletproof Vest Partnership Program

16.607

Collier County

8,583

–

16.710 16.710

2009-CK-WX-0204 2010-CK-WX-0107

27,540 167,405 194,945

– – –

Department of Justice: Equitable Sharing Program

16.922

Collier County Sheriff

32,704

–

Indirect Programs: Florida Office of Attorney General: Crime Victim Assistance

16.575

V11129

131,411

–

Florida Department of Children and Families: Violence Against Women Formula Grants Violence Against Women Formula Grants Total CFDA Total Department of Justice

Direct Programs: Federal Aviation Administration (FAA): Airport Improvement Program

Payments to Subrecipients

20.106

3-12-0142-008-2010

$

$

20.500 20.500

FL-03-0264-00 FL-04-0047-00

20.507 20.507 20.507 20.507 20.507

20.205 20.205 20.205 20.205 20.205 20.205

2,468,991

–

Federal Transit Administration (FTA):

16.588 16.588

12-8008-LE 13-8008-LE

132,729 36,189 168,918 1,622,399

– – – 38,269

Federal Transit – Capital Investment Grants Federal Transit – Capital Investment Grants Total CFDA ARRA Federal Transit – Formula Grants Federal Transit – Formula Grants Federal Transit – Formula Grants Federal Transit – Formula Grants Federal Transit – Formula Grants Total CFDA Total Federal Transit Cluster Indirect Programs: Florida Department of Transportation: Highway Planning and Construction Highway Planning and Construction Highway Planning and Construction Highway Planning and Construction Highway Planning and Construction Highway Planning and Construction Total CFDA Metropolitan Transportation Planning Formula Grants for Other Than Urbanized Areas ARRA Formula Grants for Other Than Urbanized Areas Total CFDA Capital Assistance Program for Elderly Persons and Persons with Disabilities State and Community Highway Safety Total Department of Transportation

1302-1025260

Expenditures

Federal Transit Cluster: 16.320

Office of Community Oriented Policing Services: Public Safety Partnership and Community Policing Grants Public Safety Partnership and Community Policing Grants Total CFDA

CFDA #/ CSFA # Grant/Contract Number

Department of Transportation 16.738 16.738

Total JAG Program Cluster Direct Programs: Office of Victims of Crime: Services for Trafficking Victims

Expenditures

172

1302-1025260

68,020 2,699 70,719

– – –

ARRA FL-96-X019-00 FL-90-X665-00 FL-90-X699-00 FL-90-X731-00 FL-90-X766-00

1,083,563 14,946 116,968 1,313,673 1,204,094 3,733,244 3,803,963

– – – – – – –

416237-1/AQ076 420871-1/A4377 423645-1/A4377 426836-1/AQ258 427934-1/AQG31 427936-1/AQ383

547,701 229,451 142,225 52,950 69 741,169 1,713,565

– – – – – – –

20.505

410113-1/AP031

154,869

–

20.509 20.509

410120-1/AOW89 ARRA 426772-1/API19

415,347 108,263 523,610

– – –

20.513

FL-16-0036

20.600

190245-1/AQK91

78,615

–

14,820 8,758,433

– –

173

Collier County, Florida

Collier County, Florida

Schedule of Expenditures of Federal Awards and State Financial Assistance

Schedule of Expenditures of Federal Awards and State Financial Assistance

For the Fiscal Year Ended September 30, 2012 (continued)

For the Fiscal Year Ended September 30, 2012 (continued)

Federal or State Grantor/Pass-Through Grantor Program Title

CFDA #/ CSFA # Grant/Contract Number

Expenditures

Payments to Subrecipients

Federal or State Grantor/Pass-Through Grantor Program Title

Department of Energy Direct Programs: ARRA Energy Efficiency and Conservation Block Grant Program (EECBG) Total Department of Energy

81.128

ARRA DE-EE0000783

$

245,028 245,028

$

– –

C-77

Indirect Programs: Florida Department of State: Help America Vote Act Requirements Payments Help America Vote Act Requirements Payments Help America Vote Act Requirements Payments Help America Vote Act Requirements Payments Total U.S. Election Assistance Commission

90.401 90.401 90.401 90.401

Collier County – FY 2008-2009 Collier County – FY 2009-2010 2010-2011-0001 2011-2012-0001

2,222 36,110 36,110 32,147 106,589

– – – – –

229,305

220,529

Department of Health and Human Services Direct Programs: Health Resources and Services Administration: Specially Selected Health Projects

D1ARH20098

93.044

OAA 203.11

CD311

93.617

2011-2012-0002

93.778

416043-1/BDM59

94.002 94.002

Payments to Subrecipients

$

$

137,388

–

396

–

426,764 1,317,101

– 220,529

09SRSFL017 12SRSFL012

37,675 8,142 45,817

– – –

97.039 97.039 97.039

11HM-3E-09-21-01-004 11HM-3E-09-21-01-005 11HM-3E-09-21-01-026

2,257 8,898 28,191 39,346

– – – –

Emergency Management Performance Grants

97.042

12-FG-R3-09-21-01-078

90,240

–

Homeland Security Grant Program Homeland Security Grant Program Homeland Security Grant Program Homeland Security Grant Program

97.067 97.067 97.067 97.067

11-DS-29-09-21-01-239 11-DS-29-09-21-01-240 11-DS-9Z-09-21-01-394 12-DS-20-09-21-23-435

215,728 8,710 50,182 108,884

– – – –

97.067

2008-LETP-COLL-1S3-017

85,898 469,402 598,988 22,678,188

– – – $ 3,652,792

Corporation for National and Community Service Direct Programs: Retired and Senior Volunteer Program Retired and Senior Volunteer Program Total Corporation for National and Community Service

Indirect Programs: Executive Office of the Governor: Hazard Mitigation Grant Hazard Mitigation Grant Hazard Mitigation Grant Total CFDA

–

OAA 203.12

45,551 66,406

– –

Special Programs for the Aging Title III, Part C Nutrition Services Special Programs for the Aging Title III, Part C Nutrition Services Total CFDA

93.045 93.045

OAA 203.11 OAA 203.12

93,713 300,910 394,623

– – –

Nutrition Services Incentive Program Nutrition Services Incentive Program Total CFDA

93.053 93.053

NSIP 203.11 NSIP 203.12

23 339 362

– – –

93.052 93.052

OAA 203.11 OAA 203.12

Total Aging Cluster

1302-1025260

20,855

93.044

National Family Caregiver Support, Title III, Part E National Family Caregiver Support, Title III, Part E Total CFDA

93.563

Florida Department of State: Voting Access for Individuals with Disabilities Grants to States

Expenditures

Department of Homeland Security 93.888

Indirect Programs: Florida Department of Elder Affairs – Area Agency on Aging for Southwest Florida, Inc. dba Senior Choices of Southwest Florida: Aging Cluster: Special Programs for the Aging Title III, Part B Grants for Supportive Services and Senior Centers Special Programs for the Aging Title III, Part B Grants for Supportive Services and Senior Centers Total CFDA

Florida Department of Revenue: Child Support Enforcement

Florida Department of Transportation – Commission for the Transportation Disadvantaged: Medical Assistance Program Total Department of Health and Human Services

U.S. Election Assistance Commission

CFDA #/ CSFA # Grant/Contract Number

461,391

–

8,975 52,882 61,857

– – –

174

Florida Department of Law Enforcement: Homeland Security Grant Program Total CFDA Total Department of Homeland Security TOTAL EXPENDITURES OF FEDERAL AWARDS

1302-1025260

$

175

Collier County, Florida

Collier County, Florida

Schedule of Expenditures of Federal Awards and State Financial Assistance

Schedule of Expenditures of Federal Awards and State Financial Assistance

For the Fiscal Year Ended September 30, 2012 (continued)

For the Fiscal Year Ended September 30, 2012 (continued)

Federal or State Grantor/Pass-Through Grantor Program Title

CFDA #/ CSFA # Grant/Contract Number

Expenditures

Payments to Subrecipients

Federal or State Grantor/Pass-Through Grantor Program Title

EXPENDITURES OF STATE FINANCIAL ASSISTANCE

Emergency Management Projects Total Executive Office of the Governor

31.063 31.063

31.067

12-BG-05-09-21-01-011 13-BG-83-09-21-01-011

12-CP-03-09-21-01-185

$

62,258 26,273 88,531 8,956 97,487

$

Commission for the Transportation Disadvantaged (CTD) Trip and Equipment Grant Program Commission for the Transportation Disadvantaged (CTD) Trip and Equipment Grant Program Commission for the Transportation Disadvantaged (CTD) Trip and Equipment Grant Program Total CSFA

– – – – –

Commission for the Transportation Disadvantaged (CTD) Planning Grant Program Commission for the Transportation Disadvantaged (CTD) Planning Grant Program Total CSFA

Florida Department of Environmental Protection

C-78

Beach Erosion Control Program Beach Erosion Control Program Total CSFA

37.003 37.003

05CO1 07CO1

64,091 3,002 67,093

– – –

Expanded Local Hazardous Waste Management Program

37.008

S0557

18,400

–

GAC Properties, Inc. Consent Order #15 – Restricted Funds Projects: City of Cape Coral – Rotary Park and Other Future Projects Total Florida Department of Environmental Protection

37.049

S0539

53,645 139,138

– –

45.030 45.030 45.030 45.030

07-ST-12 08-ST-12 09-ST-10 10-ST-10

23,083 5,552 164,099 183,637 376,371

– – – – –

1,056,769 1,056,769

38,967 38,967

Aviation Development Grants Aviation Development Grants Aviation Development Grants Aviation Development Grants Aviation Development Grants Total CSFA

Florida Department of State and Secretary of State State Aid to Libraries State Aid to Libraries State Aid to Libraries State Aid to Libraries Total Florida Department of State and Secretary of State

Expenditures

Payments to Subrecipients

$

$

Florida Department of Transportation

Executive Office of the Governor Emergency Management Programs Emergency Management Programs Total CSFA

CFDA #/ CSFA # Grant/Contract Number

55.001

207246-1/207246-3/AQB16

55.001

410656-1/AQJ06

468,783

–

55.001

432027-1/432028-1/AQ087

55.002

193630-1/AQP39

4,788

–

55.002

207246-2/AQB39

12,632 17,420

– –

55.004 55.004 55.004 55.004 55.004

206430-1/AI935 414298-1/AOV99 414299-1/AOR09 414299-1/AOR09 425515-1/AQ122

1,553 151,494 4,992 74,462 56,592 289,093

– – – – – –

29,180

–

170,094 668,057

– –

Public Transit Block Grant Program

55.010

410139-1/AOW93

838,071

–

Intermodal Development Program

55.014

420353-1/APF60

977,103

–

State Infrastructure Bank

55.020

420655-2/EIF59

6,327,545

–

Transportation Regional Incentive Program (TRIP) Total Florida Department of Transportation

55.026

429815-1/AQE89

242,696 9,359,985

– –

60.014 60.014

HFZ1D HFZ2B

28,000 57,646 85,646

28,000 37,493 65,493

60.115

LHZ25

106,217 191,863

90,306 155,799

Florida Housing Finance Corporation State Housing Initiatives Partnership (SHIP) Program Total Florida Housing Finance Corporation

52.901

Collier County/Naples

Florida Department of Children and Families Homeless Challenge Grant Homeless Challenge Grant Total CSFA Public Safety, Mental Health, and Substance Abuse Local Matching Grant Total Florida Department of Children and Families

1302-1025260

176

1302-1025260

177

Collier County, Florida

Collier County, Florida

Schedule of Expenditures of Federal Awards and State Financial Assistance

Notes to the Schedule of Expenditures of Federal Awards and State Financial Assistance

For the Fiscal Year Ended September 30, 2012 (continued)

Year Ended September 30, 2012

Federal or State Grantor/Pass-Through Grantor Program Title

CFDA #/ CSFA # Grant/Contract Number

Expenditures

Payments to Subrecipients

$

$

1. Basis of Presentation

Florida Department of Health County Grant Awards County Grant Awards County Grant Awards Total Florida Department of Health

64.005 64.005 64.005

C8011 C9011 C0011

17,938 7,370 63,658 88,966

– – – –

65.001 65.001

HCE 203.11 HCE 203.12

4,909 2,922 7,831

– – –

Alzheimer’s Respite Services Alzheimer’s Respite Services Total CSFA

65.004 65.004

ADI 203.11 ADI 203.12

52,797 15,018 67,815

– – –

Community Care for the Elderly (CCE) Community Care for the Elderly (CCE) Community Care for the Elderly (CCE) Total CSFA Total Florida Department of Elder Affairs

65.010 65.010 65.010

CCE 203.10 CCE 203.11 CCE 203.12

1,045 474,044 141,820 616,909 692,555

– – – – –

Florida Department of Elder Affairs Area Agency on Aging for Southwest Florida, Inc dba Senior Choices of Southwest Florida: Home Care for the Elderly Home Care for the Elderly Total CSFA

C-79

TOTAL EXPENDITURES OF STATE FINANCIAL ASSISTANCE

$

12,003,134

$

194,766

The accompanying Schedule of Expenditures of Federal Awards and State Financial Assistance (the Schedule) includes the federal and state grant activity for Collier County, Florida (the County) and is presented on the modified accrual basis of accounting for expenditures accounted for in the governmental funds and the accrual basis of accounting for expenditures in proprietary funds. Under the modified accrual basis, revenue is recognized if it is both measurable and available for use during the fiscal year and expenditures are recognized in the period liabilities are incurred, if measurable. Under the accrual basis, expenditures are recognized in the period liabilities are incurred. The information in the schedule is presented in accordance with the requirements of U.S. Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and Section 215.97, Florida Statutes. Therefore, some amounts presented in the Schedule may differ from amounts presented, or used in the preparation of, the basic financial statements for the fiscal year ended September 30, 2012. 2. State Infrastructure Bank Loan Collier County received a $12,000,000 State Infrastructure Bank Loan from the Florida Department of Transportation in fiscal year 2008 for construction of the I-75/Immokalee Road interchange. The Florida Department of Transportation included this project with their concurrent widening of I-75 and retained the loan proceeds to fund the project. Accordingly, the County’s expenditures for purposes of reporting on the Schedule consist of principal loan repayments only ($6,327,545 for fiscal year 2012) as no proceeds were received under the loan and no project expenditures were incurred or paid directly by the County. The current balance of the loan as of September 30, 2012, is $0. The repayment schedule for this loan is as follows: Payment Date 10/1/2008 10/1/2009 10/1/2010 10/1/2011 1/25/2012

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Principal $

Interest

Total

1,957,377 1,839,148 1,875,930 1,913,449 4,414,096

$

82,623 200,852 164,070 126,551 28,298

$

2,040,000 2,040,000 2,040,000 2,040,000 4,442,394

$ 12,000,000

$

602,394

$ 12,602,394

179

Collier County, Florida

Collier County, Florida

Notes to the Schedule of Expenditures of Federal Awards and State Financial Assistance (continued)

Schedule of Findings and Questioned Costs For the Year Ended September 30, 2012 Part I – Summary of Auditor’s Results

3. Contingency The grant revenue amounts received are subject to audit and adjustment. If any expenditures or expenses are disallowed by the grantor agencies as a result of such an audit, any claim for reimbursement to the grantor agencies would become a liability of the County. In the opinion of management, all grant expenditures are in material compliance with the terms of the grant agreements and applicable federal and state laws and regulations.

Financial Statements Section Type of auditor’s report issued (unqualified, qualified, adverse or disclaimer):

Unqualified

Internal control over financial reporting:

4. Negative Figures on the Schedule

C-80

Negative expenditures reported in the Schedule are the result of corrections that reduced expenditures in one grant and increased expenditures in another grant or funding source. Although the current expenditures on a grant may be negative, the total of all expenditures on the grant is expected to be positive over its total period of performance.

Material weakness(es) identified?

Yes

X

No

Significant deficiency(ies) identified?

Yes

X

None reported

Noncompliance material to financial statements noted?

Yes

X

No

Federal awards and State Projects Section Internal control over major programs/projects: Material weakness(es) identified?

X

Yes

No

Significant deficiency(ies) identified?

X

Yes

None reported

Type of auditor’s report issued on compliance for major programs (unqualified, qualified, adverse or disclaimer):

Any audit findings disclosed that are required to be reported in accordance with Section .510(a) of OMB Circular A-133, Section 215.97, Florida Statutes, and Chapter 10.550, Rules of the Auditor General, State of Florida?

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Qualified for the Community Care for the Elderly Program (CSFA # 65.010) and the Summer Food Service Program for Children (CFDA# 10.559); and Unqualified for all other major federal programs and state projects.

X

Yes

No

181

Collier County, Florida

Collier County, Florida

Schedule of Findings and Questioned Costs (continued)

Schedule of Findings and Questioned Costs (continued)

Dollar threshold used to distinguish between Type A and Type B programs:

Identification of major federal programs: CFDA number(s) 14.218, ARRA-14.253 14.228 ARRA-14.257

Name of federal program or cluster

Community Development Block Grant/State’s Program

Federal Programs

$680,345

•

State Projects

$360,094

Auditee qualified as low-risk auditee?

Yes

X

No

Homelessness Prevention and Rapid Re-housing Program (HPRP) (Recovery Act Funded)

C-81

10.559

Summer Food Service Program for Children

20.205

Highway Planning and Construction

20.500/20.507

• CDBG – Entitlement Grants Cluster

Federal Transit Cluster

Identification of major state projects: CSFA number(s)

1302-1025260

Name of state project

52.901

State Housing Initiatives Partnership Program (SHIP)

55.001

Commission for the Transportation Disadvantaged (CTD) Trip and Equipment Grant Program

55.020

State Infrastructure Bank Loan Program

65.010

Community Care for the Elderly

45.030

State Aid to Libraries

55.010

Public Transit Block Grant Program

55.014

Intermodal Development Program

182

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183

Collier County, Florida

Collier County, Florida

Schedule of Findings and Questioned Costs (continued)

Schedule of Findings and Questioned Costs (continued)

Part II – Financial Statement Findings Section

Part III – Federal Award Findings and Questioned Costs Section

This section identifies the significant deficiencies, material weaknesses, fraud, illegal acts, violations of provisions of contracts and grant agreements, and abuse related to the financial statements for which Government Auditing Standards require reporting in a Circular A-133, Section 215.97, Florida Statutes and Chapter 10.550, Rules of the Auditor General audit.

This section identifies the audit findings required to be reported by Circular A-133 Section .510(a), Section 215.97, Florida Statutes, and Chapter 10.550, Rules of the Auditor General, State of Florida, such as material weaknesses, significant deficiencies, and material instances of noncompliance, including questioned costs, as well as any abuse findings involving federal awards or state projects that are material to a major program.

No such matters were identified.

Finding 2012-1 Federal Program/State Project Information

C-82

Florida Department of Elder Affairs: Community Care for the Elderly CSFA No. 65.010 Award No. CCE203.10, Award Year – 2010 Award No. CCE 203.11, Award Year – 2011 Award No. CCE 203.12, Award Year – 2012 U.S. Department of Housing and Urban Development CDBG – Entitlement Grants Cluster (CDBG) CFDA No.’s 14.218, ARRA-14.253 Award No. B-08-UC-12-0016, Award Year – 2008 Award No. B-08-UN-12-0003, Award Year – 2009 Award No. B-10-UC-12-0016, Award Year – 2010 Award No. ARRA B-09-UY-12-0016, Award Year – 2009 Award No. B11-UC-12-0016, Award Year – 2011 Award No. B-11-UN-12-0003, Award Year – 2011 Community Development Block Grant/State’s Program (DRI) CFDA No. 14.228 Award No. 08DB-D3-09-21-01-A03, Award Year – 2008 Award No. 10-DB-D4-09-21-01-K09, Award Year – 2010 Award No. 12-DB-P5-09-21-01-K 39, Award Year – 2012

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184

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185

Collier County, Florida

Collier County, Florida

Schedule of Findings and Questioned Costs (continued)

Schedule of Findings and Questioned Costs (continued)

ARRA: Homelessness Prevention and Rapid Re-Housing Program (HPRP) CFDA No. ARRA – 14.257 Award No. ARRA S09-UY-12-0024, Award Year – 2009

a) Must reflect an after-the-fact distribution of the actual activity of each employee b) Must account for the total activity for which each employee is compensated c) Must be prepared at least monthly and must coincide with one or more pay periods

Summer Food Service Program for Children CFDA No. 10.559 Award No. 04-0804, Award Year – 2011 Award No. 04-0804, Award Year – 2012

d) Must be signed by the employee e) Budget estimates or other distribution percentages determined before the services are performed do not qualify as support for charges to federal awards but may be used for interim accounting purposes.

Criteria or specific requirement (including statutory, regulatory, or other citation):

C-83

Allowable Costs: Compensation for personnel services rendered in connection with federal awards must be documented and supported as described in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments (A-87). According to A-87, the standards regarding time distribution are in addition to the payroll documentation and require the following: •

•

•

Charges to federal awards for salaries and wages, whether treated as direct or indirect costs, will be based on payrolls documented in accordance with the generally accepted practice of the governmental unit and approved by responsible official(s) of the governmental unit. Where employees are expected to work solely on a single federal award or cost objective, charges for their salaries and wages will be supported by periodic certifications that the employees worked solely on the program for the period covered by the certification. These certifications will be prepared at least semiannually and will be signed by the employee or supervisory official having firsthand knowledge of the work performed by the employee. Where employees work on multiple activities or cost objectives, a distribution of their salaries or wages will be supported by personnel activity reports or equivalent documentation that meets the following standards (unless a statistical system or other substitute system has been approved by the cognizant federal agency):

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Condition/Context During our testing over payroll, we could not obtain sufficient evidence that the time allocated toward grant programs per time sheets was actual time the employee spent working on the grant programs. As described in the following table, we found multiple cases where the time recorded by the employee did not agree to the expenditure recorded. Summary Grant Program CCE (CSFA No. 65.010) CDBG (CFDA No. 14.218 and 14.253) DRI (CFDA No. 14.228) HPRP (CFDA No. 14.257) SFP (CFDA No. 10.559)

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Sample Selected

Exceptions Found

Type of Expenditures

65 13 Payroll and 52 Non-payroll 60 35 9

1

Payroll 3 Payroll and 1 Non-payroll Payroll Payroll Payroll

4 1 3 2

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Collier County, Florida

Collier County, Florida

Schedule of Findings and Questioned Costs (continued)

Schedule of Findings and Questioned Costs (continued)

Payroll Expenditures: Time Sheets associated with the expenditures below did not agree to the schedule of expenditures. We also noted that the County did not have proper time sheets for several of our selections.

Pay Period Ending Date

Social Security Match Regular Salaries

5260 2006

01/13/2012 07/13/2012

$ $

101 22

Regular Salaries

2006

07/13/2012

$

Retirement Regular

2006

07/13/2012

Social Security Match Regular Salaries Regular Salaries Retirement Regular Social Security Match Retirement Regular

3942 4527 3942 4516 5555 5555

10/07/2011 10/07/2011 10/07/2011 11/04/2011 09/09/2011 09/09/2011

Grant Program

C-84

CCE (CSFA No. 65.010) CDBG (CFDA No. 14.218 and 14.253) CDBG (CFDA No. 14.218 and 14.253) CDBG (CFDA No. 14.218 and 14.253) DRI (CFDA No. 14.228) HPRP (CFDA No. 14.257) HPRP (CFDA No. 14.257) HPRP (CFDA No. 14.257) SFP (CFDA No. 10.559) SFP (CFDA No. 10.559)

Amount per Expenditure Detail

Employee No.

Type of Payroll Expense

Expenditures Based on Time Sheet Allocation $

Type of Expenditures

Views of responsible officials and planned corrective actions

91 –

$ $

10 22

108

–

$

108

$

1

–

$

1

$ $ $ $ $ $

6 214 633 52 51 41

– – – – – – Total

$ $ $ $ $ $ $

6 214 633 52 51 41 1,137

CDBG (CFDA No. 14.218 and 14.253)

IGC-Intergovernmental Charge

WBS Elementary

Amount per Expenditure Detail

33050.8.6

$30

Amount per Invoice

Difference

N/A

$30

Total

$30

Questioned costs $1,167.

Programs: CCE, CDBG, DRI and HPRP Management concurs with the recommendation. Housing, Human and Veteran Services (HHVS) continues to follow the established procedure for charging grants staff time via biweekly timesheets, signed by the employee and management to reflect actual time spent on the grants. Internal controls have been strengthened to prevent and/or verify that formulas have not been inadvertently changed to create unintentional errors. The department has implemented one spreadsheet to be used by all staff members. Account strings and formulas are verified by the accounting supervisor prior to forwarding to Human Resources for entry into the accounting system (SAP). During May 2012, all time keepers were retrained on proper time keeping processes by the Human Resources Department. HHVS is in the process of finalizing formal written procedures to be used as a guide and training to continue to strengthen internal controls. OMB will assist in the review of these procedures and provide job aides as needs are identified. During FY 2013, the County formed a subcommittee to assist HHVS to formalize business operations into protocols and written procedures. The committee meets weekly. The payroll process has been identified as a top priority. Human Resource personnel are in attendance to ensure current practices and policies are understood. OMB is in attendance to ensure audit finding concerns are addressed through proper internal controls. It should also be noted that the majority of instances found noncompliant were during the first half of the fiscal year prior to management’s restructure of OMB oversight. Program: SFP

Cause/Effect Payroll allocations to grant programs were not supported by detailed time records. As such, these payroll costs are unsupported. This could result in reimbursement for unallowable or unsubstantiated costs.

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We recommend that the County implement effective internal control processes to confirm that actual time worked by an employee is charged to the grant programs.

Difference

Non Payroll Expenditures: The documentation provided by the County did not support the expenditure.

Grant Program

Recommendation

188

The Parks Department has performed a thorough review of records and concurs there exists no other documentation for the time period in question. The Department was recently reviewed for its time keeping practices by the Clerk of Courts internal auditors and corrective action has been taken to ensure complete and accurate records are kept for time worked by each employee. Specifically, the department has developed a system that establishes a central, ongoing post-audit of payroll records for each payroll period to ensure standardization of time entry. This centralized post-audit includes: 1302-1025260

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Collier County, Florida

Collier County, Florida

Schedule of Findings and Questioned Costs (continued)

Schedule of Findings and Questioned Costs (continued)

1. Schedules for all cost centers in the department are posted and maintained electronically.

Finding 2012-2

2. Time cards are matched to what has been entered into SAP.

Federal Program/State Project Information

3. All entries are checked for completeness (e.g.; appropriate signatures, inclusion of leave slips, proper coding, etc.).

U.S. Department of Housing and Urban Development CDBG – Entitlement Grants Cluster (CDBG) CFDA No.’s 14.218, ARRA-14.253 Award No. B-08-UC-12-0016, Award Year – 2008 Award No. B-08-UN-12-0003, Award Year – 2009 Award No. B-10-UC-12-0016, Award Year – 2010 Award No. ARRA B-09-UY-12-0016, Award Year – 2009 Award No. B11-UC-12-0016, Award Year – 2011 Award No. B-11-UN-12-0003, Award Year – 2011

4. The Program Supervisor and Regional Manager are contacted immediately if any discrepancy is uncovered. 5. A log is kept which details the audit and files for each pay period. 6. All new and re-hires are now paid by direct deposit only.

C-85

In addition, all time keepers were retrained on May 2012 on proper time keeping processes by the Human Resources Department and a staff member was hired June, 2012 to complete postaudit on all payroll time submissions to ensure proper documents are retained, information is entered correctly and corrective action is taken immediately in case of any discrepancies. Program: CDBG (NSP) Non payroll: Management concurs with the recommendation. The County’s Real Property Department staff provides services to the Neighborhood Stabilization Program. Service costs are allocated among the appropriate properties and administrative allowances. In this particular instance, the Internal Governmental Charge (IGC) invoice billed $953.29 for five staff members’ time. All costs were allowable; however, HHVS inadvertently allocated the wrong employee hourly rate which resulted in a lower costs per hour allocation of $30.00 instead of $43.86. HHVS has corrected the IGC allocation which resulted in an additional amount of $208 to be charged to the NSP program.

Community Development Block Grant/State’s Program (DRI) CFDA No. 14.228 Award No. 08DB-D3-09-21-01-A03, Award Year – 2008 Award No. 10-DB-D4-09-21-01-K09, Award Year – 2010 Award No. 12-DB-P5-09-21-01-K 39, Award Year – 2012 Highway Planning and Construction (Federal-Aid Highway Program) CFDA No. 20.205 Award No. 42087111401/A4377, Award Year – 1998 Award No. 41623713801/AQ076, Award Year – 2010 Award No. 42683613801/AQ258, Award Year – 2010 Award No. 42793615801/AQ383, Award Year – 2010 Award No. 427934-1-58-01, Award Year – 2011 Award No. 420871-1-14-01/PL-0313 (048)/A4377, Award Year – 2012

OMB has implemented long term resolution during FY 2012. Audit risk has been cured by the development of an annual single internal service rate for Real Property Department services. The rate methodology was developed in compliance with OMB Circular A-87. The IGC cited for noncompliant backup were for services performed prior to OMB plan development. OMB will also develop an IGC standard processing protocol to ensure IGC are appropriately reviewed to ensure accuracy.

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191

Collier County, Florida

Collier County, Florida

Schedule of Findings and Questioned Costs (continued)

Schedule of Findings and Questioned Costs (continued)

Florida Department of Transportation: Public Transit Block Grant Program CSFA No. 55.010 Award No. 410139-1/AOW93, Award Year – 2008 Criteria or specific requirement (including statutory, regulatory, or other citation) Cash Management: In accordance with OMB Circular A-102 Common Rule, the County’s methods and procedures for transferring funds should minimize the time elapsing between the transfer to the County of grant funds and when the disbursement was paid by the County. Condition/Context

C-86

We selected 60 cash drawdowns totaling $7,351,178 from a population of 167 drawdowns totaling $10,097,868 as follows: Population Sample Selected Number of Amount of Number of Amount of Cash Cash Cash Cash Grant Program CFDA/CFSA # Drawdowns Drawdowns Drawdowns Drawdowns CDBG DRI HPC PTBG SAL SHIP CTD CCE SFP HPRP FTC

14.218/14.253 14.228 20.205 55.01 45.030 52.901 55.001 65.010 10.559 14.257 20.500/20.507 Total

50 21 12 3 2 2 13 12 4 35 13 167

$ 2,354,710 2,080,607 1,227,643 1,213,600 203,263 430,987 654,350 609,670 165,880 298,552 858,605 $ 10,097,868

20 8 4 2 2 1 5 4 3 8 3 60

$ 1,366,852 2,007,721 849,927 1,079,509 203,263 403,533 260,561 243,904 165,074 205,594 565,239 $ 7,351,178

We noted several instances listed below where there was a significant time lag between when the County paid for grant expenditures and when the disbursement was requested for reimbursement.

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Grant NSP (CDBG) NSP (CDBG) NSP (CDBG) NSP (CDBG) CDBG CDBG DRI HPC PTBG PTBG

Amount of Cash Drawdown $114,467 210,025 70,290 6,251 48,023 59,326 52,4821 267,580 844,849 234,660

Date of Request for Cash Drawdown 7/27/12 7/27/12 7/27/12 7/27/12 1/13/2012 1/13/2012 1/23/2012 6/7/2012 11/18/2011

8/15/2012

Date of Oldest Expenditure Paid by County in Cash Drawdown 8/25/2011 4/8/2010 10/8/2010 11/19/2010 5/6/2011 5/6/2011 12/3/2010 2/10/12 1/5/2011 1/20/2012

Difference in Days 337 841 658 616 252 252 416 118 317 208

Questioned costs N/A. Cause/Effect Drawdown or reimbursement requests were submitted to the grantor significantly past the time that the County paid for the qualifying expenditures. There is a lack of a process to minimize the time between disbursement and reimbursement request. This could adversely affect County cash flows as well result in the grantor not reimbursing the County for reimbursements requested within a reasonable time frame. Recommendation The County should implement procedures that minimize the time elapsing between the request for a cash drawdown and the time that the disbursements are paid by the County. Views of responsible officials and planned corrective actions Management concurs with the recommendation. Management’s general protocol is to periodically request reimbursement on a quarterly basis and has a written protocol as such. However, during the course of any fiscal year, staffing levels and responsibilities fluctuate and

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C-87

Collier County, Florida

Collier County, Florida

Schedule of Findings and Questioned Costs (continued)

Schedule of Findings and Questioned Costs (continued)

meeting required deadlines take precedence. As a result, reimbursements requests are delayed on those grant programs where the grantor contract does not explicitly cite a required interval to invoice. The action not to draw has no adverse affect on the grantor programs; however management acknowledges the need to maintain a schedule to regularly request reimbursement whenever possible. Over the prior year, improvements have been made and the dollar value of outstanding draws tested was reduced by 38.5%.

SBGP Program – While reimbursement is generally performed quarterly, this action was delayed due to transition of staffing who prepare the request. The reimbursement requires a reconciliation of the entire Collier Area Transit (CAT) operational expenditures and revenues, making the request a time intensive process compared to other reimbursement processes. Management did contact the grantor agency to confirm reimbursement required intervals. FDOT District One confirmed Collier County is in line with other agency’s frequency of 1-2 time intervals per year.

The following offers additional conditions that delayed reimbursement requests on individual programs audited.

HPC Program – This finding is related to the Lake Trafford Turn Lane project. Periodic draws have historically been completed (FY11 Q4, FY12 Q1 and a combined FY12 Q2/Q3). As of 3/12/12, the project was assessed liquidated damages. Conservatively, management’s decision was to request reimbursement after final liquidated damages were assessed and properly posted within the financial system. Once this occurred (11/26/12), the project was close to completion and management’s decision was to wait for the grantor agency to perform a customary EEO review to validate that all documentation was provided by the contractor and compliance is met. Once all documentation is deemed successful, final retainage is released. FDOT has performed their final review as of 11/28/12. A final invoice will be prepared to meet the requirement for submittal of a final reimbursement within 120 days of project completion.

CDBG Program: The CDBG entitlement program has been in arrears in draw requests. Department accounting staff and OMB are working together to bring these requests up to date on all contracts and establish a regular schedule. The draw delay finding is cited on older grant contracts in comparison to the prior year. Draw requests on the most current contracts are up to date and shows management’s commitment and progress to increase the frequency of draws. NSP Program: The delay in regular draw requests was largely due to significant staffing changes. NSP draws are performed in a required Disaster Recovery Grant Reporting (DRGR) system with the creation and approval of vouchers by separate individuals. In November 2011, the HHVS staff member who created the draw vouchers moved to a different position and ended employment with the County. The remaining employee with DRGR access had approval rights but could not create draw vouchers. The only person who can change rights in the DRGR system is the assigned DRGR system Administrator who also resigned from the County. In February 2012, a new Manager was hired for NSP and became the assigned DRGR Administrator. Obtaining DRGR rights, hiring vacant staffing positions (July 2012), and obtaining appropriate training for the DRGR system took time and further delayed a draw request. Staff proactively sought one-on-one training for the DRGR system to perform a draw on 7/27/12 prior to formal training obtained by both program and fiscal staff in August and September of 2012. A dedicated accountant has been hired full time and works with OMB to ensure reconciliation of the financial system to the DRGR system. Drawdowns are now done on a regular basis throughout the year unless program income prevents such drawdowns from occurring. DRI Program – Over the course of the current and prior fiscal years, the Department went through several fiscal and program staffing changes and restructuring. During FY 2012, draw reimbursements were brought up-to-date. The draw found noncompliant was the first draw completed in FY 2012. Since this time, the frequency of draws has increased and subsequent draws have been made and posted on 5/2/12, 8/17/12, 10/22/12, 12/19/12 and 1/18/13.

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Finding 2012-3 Federal program information U.S. Department of Agriculture Florida Department of Education Summer Food Service Program for Children CFDA No. 10.559 Award No. 04-0804, Award Year – 2011 Award No. 04-0804, Award Year – 2012 Criteria or specific requirement (including statutory, regulatory, or other citation) Allowable Costs; Cash Management: In accordance with OMB Circular A-102 Common Rule, the related expenditures should be in compliance with the applicable funding techniques as described in the agreement and when awards are funded on a reimbursement basis, the costs for which reimbursement was requested were paid prior to the date of the reimbursement request. In addition, in accordance with OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments (A-87), costs need to be supported by adequate documentation.

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Collier County, Florida

Collier County, Florida

Schedule of Findings and Questioned Costs (continued)

Schedule of Findings and Questioned Costs (continued)

C-88

Condition/Context

Cause/Effect

We noted that the meals served on a daily basis are tracked manually at each site, and the daily manual tracking sheets are sent to the Parks and Recreation Administration office. Personnel at the office enter the manual data into a monthly manual tracking spreadsheet, which is then used to summarize the total meals served to prepare the monthly reimbursement requests. For testing purposes, we obtained the daily tracking sheets for two sites from a population of 11 sites (Lely Elementary and Golden Gate for June 2012 and July 2012), the Park and Recreation’s manual tracking sheets for the months selected above and the reimbursement requests. The amounts recorded on the daily tracking sheets did not agree to the monthly manual tracking sheets held by the Parks and Recreation office. In addition, as illustrated in the table below, we could not trace the amounts on the monthly tracking sheets to the reimbursement request submitted to the Florida Department of Agriculture. As such, we were unable to determine whether the tracking sheets appropriately reflected the number of meals delivered, and whether the reimbursement requests submitted were correct. Below is a summary of our testing:

Reimbursement requests were submitted to the grantor that could not be fully substantiated with evidence that they were qualifying meals served. There is no process for reconciling meals served information prior to reimbursement payment. This could result in reimbursement for unsubstantiated meals served.

Locations

Date

Manual Tracking Sheets

Reimbursement Request

Breakfast

Breakfast

Variance

Manual Tracking Sheets

Reimbursement Request

Lunch

Lunch

Variance

Total Variance

Lely Elementary

Jun-12

1479

1479

0

1643

1658

15

15

Golden Gate

Jun-12

1774

1789

15

1806

1821

15

30

Lely Elementary

Jul-12

1550

1574

24

1668

1692

24

48

Golden Gate

Jul-12

2349

2373

24

2574

2598

24

48

Total

7152

7215

63

7691

7769

78

141

Questioned costs We extrapolated the exceptions over the cash drawdowns population and noted that the extrapolated amount is less than $10,000. Illustrated below is a schedule of questioned costs related to our testing:

Breakfast Lunch

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Reimbursement Rates 1.8975 3.325

Variances (from table above) 63 78 Total

Questioned Costs $ 120 259 $ 379

Recommendation We recommend that the personnel administering the grant program implement procedures to ensure that reimbursement requests are supported by actual meals served. Views of responsible officials and planned corrective actions Management concurs with the recommendation. The differences in amounts used by program staff was based upon a misinterpretation of the 2% Seconds Rule associated with the Summer Food Service Program. The Summer Food Service Project Administrative Guide (page 42) states that “a limited number of second meals served as a unit can be claimed for reimbursement as long as the total number of second meals does not exceed 2% of first meals served by the sponsor, for all sites during the claiming period”. Staff misinterpreted this provision to count 2% for each site daily versus monthly. State Auditors associated with the Summer Food Service Program identified this issue as well and the department has established a corrective action with the Department of Agriculture, where the 2% of the second meal will be counted at the end of each month to ensure accuracy. As a result, subsequent revisions did not tie to the summary of meals or final reimbursement request due to the fact that the staff did not adjust the backup documentation to tie to the request after the States requested corrections. The Parks Department recently filled an Operation Analyst position as of July 2012 that has been identified as a Grants Controller pursuant to the OMB Grants Program Management plan to assist in oversight of single audit compliance. During the end of FY 2012 and FY 2013, OMB began to meet with the Grants Controller to discuss countywide internal controls and standardized grant protocols that will be fully implemented to Parks including the 2013 Summer Food Program. OMB will work with staff to develop a monthly monitor review process to ensure monthly tracking reports reconcile to the reimbursement request and any subsequent revisions to the reimbursement request to support a successful audit trail.

196

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Collier County, Florida

Collier County, Florida

Schedule of Findings and Questioned Costs (continued)

Schedule of Findings and Questioned Costs (continued)

Finding 2012-4

Cause/Effect

State project information

There is a lack of process to ensure that each application is reviewed by a second level reviewer. Failure by the County to calculate each applicant’s net worth accurately can result in the qualification of ineligible participants in the program.

Florida Housing Finance Corporation (the Corporation) State Housing Initiatives Partnership Program (SHIP) CSFA No. 52.901 Award No. FY08-09, Award Year – 2008

Recommendation We recommend that the County implement a second level of review to confirm that errors and inconsistencies are caught on time and that all program participants are eligible.

Criteria or specific requirement (including statutory, regulatory or other citation)

C-89

Eligibility: The SHIP Program Manual requires each award recipient to perform income verification for each program participant. In order for the County to determine each applicant’s assets (cash on hand/checking account balance), the SHIP program manual calls for the County to average the balance for the last six months on the applicant’s checking account. Condition/Context During our testing, we noted that the County calculated the applicant’s net worth inaccurately. Instead of averaging the checking account balance over the six months preceding the application, the County used only the last three months to perform the calculation for three applicants (selections 1 through 3 in the schedule below). For another applicant (schedule 4 below), we noted that the County did not average the last six months but instead added them. We selected 16 applicants from a population of 63. The 4 selections where the County did not properly calculate the applicant’s net worth are summarized in the table below: Selections 1 2 3 4

Application Number 10-023 10-034 10-050 11-012

Views of responsible officials and planned corrective actions An eligibility checklist process to ensure compliance is met accordingly with the SHIP manual requirements was implemented in March 2012. As part of this improvement, the requirement to average 6 months of checking account balances is now documented and has been the appropriate standard since that time. As of December 2012, the procedure has been revised to add a second documented review. Finding 2012-5 Federal program information U.S. Department of Agriculture Florida Department of Education Summer Food Service Program for Children CFDA No. 10.559 Award No. 04-0804, Award Year – 2011 Award No. 04-0804, Award Year – 2012

Closing Date 11/17/2011 6/20/2012 6/20/2012 09/28/2012

Criteria or specific requirement (including statutory, regulatory, or other citation) Period of Availability: According to the Summer Food Service Program for Children Agreement No.04-0804, all obligations/expenditures must occur and be recorded within the period of availability of June 13, 2011 to August 11, 2011.

Questioned costs N/A

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Collier County, Florida

Collier County, Florida

Schedule of Findings and Questioned Costs (continued)

Schedule of Findings and Questioned Costs (continued)

Condition/Context

Controller to discuss internal controls and standardized grant protocols that will be fully integrated into the 2013 Summer Food Program.

We selected 9 expenditures for testing from a population of 52. We noted that two expenditures were incurred and paid in June 2012 and July 2012 which is outside of the period of availability (June 13, 2011 to August 11, 2011 – WBS Element 33154). Below is a summary of our findings:

Selected Expenditure Amount

Selections # 8

$

952.70

Jun 12 Fleet Billing

Expense Purpose

Award Period 6/13/11-8/11/11

9

$

1,318.07

Jul 12 Fleet Billing

6/13/11-8/11/11

Corrective actions will include: x

Development of a standard written protocol for IGC type invoices and a communication plan to provide current information to internal departments serving the Summer Food Program.

x

Process closeout budget amendments and/or lock down prior year projects to prevent charges from occurring as an internal control.

Expend GL Posting Date 07/01/2012 07/31/2012

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Questioned costs

Finding 2012-6

$2,271.

Federal program information

Cause/Effect

U.S. Department of Housing and Urban Development CDBG – Entitlement Grants Cluster (CDBG) CFDA No.’s 14.218, ARRA-14.253 Award No. B-08-UC-12-0016, Award Year – 2008 Award No. B-08-UN-12-0003, Award Year – 2009 Award No. B-10-UC-12-0016, Award Year – 2010 Award No. ARRA B-09-UY-12-0016, Award Year – 2009 Award No. B11-UC-12-0016, Award Year – 2011 Award No. B-11-UN-12-0003, Award Year – 2011

There is a lack of process to confirm that transactions and underlying obligations are recorded during the period of availability. This could result in reimbursement for unallowable costs incurred outside of the period of availability. Recommendation The County should implement procedures that require that expenditures are reviewed timely to confirm that they are incurred within the period of availability.

Criteria or specific requirement (including statutory, regulatory, or other citation) Views of responsible officials and planned corrective actions Management concurs with the recommendation. Expenditures were Internal Government Charges (IGC) from eligible fleet costs associated with the 2012 Summer Food Services Program. Staff did not communicate effectively the new project number to the internal Fleet Department for 2012 Summer Food Program. Consequently, 2012 eligible fuel expenditures were processed to the 2011 project number. The SFSP does allow for prior year excess unit reimbursement revenue to be utilized for current year expenditures. The Parks Department recently filled an Operation Analyst position as of July 2012 that has been identified as a Grants Controller pursuant the OMB Grants Program Management plan to assist in oversight of single audit compliance. During the end of FY 2012 and FY 2013, OMB began to meet with the Grants

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200

Procurement, Suspension, and Debarment: Verify that contract files exist and ascertain if appropriate cost or price analysis was performed in connection with procurement actions, including contract modifications and that this analysis supported the procurement action (CFR Section 215.45). Further, test whether the non-federal entities performed a verification check for covered transactions, by checking the EPLS, collecting a certification from the entity, or adding a clause or condition to the covered transaction with the entity.

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Collier County, Florida

Collier County, Florida

Schedule of Findings and Questioned Costs (continued)

Schedule of Findings and Questioned Costs (continued)

Condition/Context

Views of responsible officials and planned corrective actions

During our testing, we noted that there was a contract modification related to one of the 11 vendors that we selected from a population of 33 vendors. The document provided by the County was dated the day of our request. We therefore could not ascertain whether the required review and approval was conducted prior to the procurement.

Management concurs with the recommendation. In further review of contract files, it was identified that a change order was not required for this modification or contract 09-5248 as this was a “purchase order” generated event versus a work order due to the terms of the contract. The department did not realize that a change order process was not necessary and created a Change Modification Form to be executed by the Purchasing Department. In the future, forms inadvertently filled out will be clearly identified as incorrect. Department staff will be required to provide the correct forms per policy and procedures to be maintained as part of the procurement record.

In addition, we noted no documentation evidencing that the County had checked the EPLS for one of the vendors selected for testing (GA Food Service of Pinellas County). We further noted that a certification from the vendor was not collected or clause or condition included in the contract as follows:

C-91

Item A

Invoice Number 101239

Invoice Number 29,548.09

B

103286

84,987.00

Description of Amount Selected Builder’s Risk Insurance for NSP Properties Construction Project: 34116 – 5283 24th Ave SW –- Unit A/B

Issues Identified No EPLS check was performed Improper approval of a change order

Questioned costs N/A. Cause/Effect These two exceptions are not in compliance with the County’s procurement policy and are not in compliance with the procurement, suspension, and debarment requirements of OMB Circular A-102 since no evidence of review was provided and an EPLS check was not performed. As a result, the contract may have been awarded to a different contractor and payments may be made to a suspended or debarred party. Therefore, internal controls over the procurement, suspension, and debarment requirement were not operating effectively. Recommendation

On January 9, 2012, purchasing staff communicated that the Change Order Modification was not necessary. HHVS documented this in a memo as part of an email request to reduce the purchase order as the net change resulted in a $.50 credit. Purchasing did not remove the Change Order Modification from the transaction in SAP. The Purchasing staff member who made the advisement underwent serious medical conditions during the summer and fall 2012 and was out of work until she passed away in October and therefore, staff was not able to consult with her. After Ernst & Young documentation was requested, Purchasing staff decided to exercise the most conservative action and “sign-off” on the Change Order Modification in the abundance of caution (since the change order modification form was technically used). Purchasing dated the sign-off the day of the request to communicate the document had not been executed prior to the request from E&Y. It should be noted, had an increase in cost occurred, the Purchasing Department would have required a requisition modification that would have been work flowed through the department for administrative and budget approval. With respect to the EPLS exception, Management concurs with the recommendation. It should be noted that this is a repeat finding on the GA Foods contract for the CCE grant program that was left in 2008. A certification of debarment was subsequently collected from GA Foods at the time of contract renewal on December 9, 2010. These services were rebid in FY12 and GA Foods was the winning bidder. A proper EPLS verification is on file and was performed prior to award on January 12, 2012 concurrent with our current procedure and OMB Circular 102 requirements.

The County should perform the required verification by checking the EPLS (and documenting evidence of the verification, when it was performed and by whom), collecting a certification from the entity, or adding a clause or condition to the contract with that entity in accordance with the federal requirements. Also, the County should keep proper documentation on file to support that all procurements were approved properly and in a timely fashion.

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Schedule of Findings and Questioned Costs (continued)

Schedule of Findings and Questioned Costs (continued)

Finding 2012-7

Views of responsible officials and planned corrective actions

State project information

Management concurs with the recommendation. OMB has a reporting matrix in development to assist the Department in management of required reports and deadlines. In this instance, staffing vacancies prevented submission of the required reports in the normal format and the required timeline. Management worked with the grantor agency for alternatives to the reporting deadlines but did not obtain documented grantor approvals prior to the deadlines.

Florida Department of Elder Affairs: Community Care for the Elderly CSFA No. 65.010 Award No. CCE203.10; Award Year – 2010 Award No. CCE 203.11, Award Year – 2011 Award No. CCE 203.12, Award Year – 2012 Criteria or specific requirement (including statutory, regulatory, or other citation)

C-92

The County is required to submit semi-annual Service Cost Reports to the Agency every February and August 15th. The report reflects the actual costs of providing each service by program, which provides information for planning and negotiating unit rates. Condition/Context We noted that the County failed to submit a service cost report during the entire 2012 fiscal year. Questioned costs N/A. Cause/Effect The County does not have a process in place to identify required reports and submission dates. Failure to submit the required semiannual reports resulted in noncompliance with the reporting requirements of the grant program. Recommendation

At the time the first submittal was due on 2/15/12, one position served as both the Department Accounting Supervisor and the lead accountant for the human services program (including CCE) and prepared the Service Cost Report (SCR). This staff person was on maternity leave during the due date of the first report. Not knowing how to complete the SCR template, staff provided SAP expenditure reports in lieu of a SCR on 2/15/12 and the grantor agency verbally accepted this submittal. The Accounting Supervisor later resigned on 6/02/12 and consequently, new staff needed training in order to properly prepare the report. Management separated the accounting function of the human service grants from the Accounting Supervisor position and reassigned an existing full time Accountant on 6/25/12 to oversee the human service grants. On 8/14/12, after a verbal discussion and pursuant to the grantor agency request, staff provided a formal request for training in order to submit the 8/15/12 SCR. The grantor agency verbally agreed to waive submission on reporting until training could be provided. Staff inadvertently did not obtain a written allowance for this action. The granted waiver was documented within a monitoring report issued on 12/12/12 by the grantor agency. Training was provided by the grantor agency on 11/13/12. The prior period report due 08/15/12 was submitted on 02/15/13 along with the first FY 2013 report also due 02/15/13. This finding has been remedied. Management considers this an isolated incidence with the realignment of staff resources, cross training and additional oversight of OMB to assist in management of report deadlines, including successful documentation of actions taken to meet required deadlines.

The County should establish policies and procedures to confirm that all required reports are prepared and filed in a timely manner, including developing a checklist of required reports and due dates.

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Summary Schedule of Prior Audit Findings

Summary Schedule of Prior Audit Findings (continued)

For the Year Ended September 30, 2012 The current status of findings for the years ended September 30, 2011 and 2010, related to major federal programs and state projects is as follows:

For the CDBG – Entitlement Grants Cluster program and the Community Development Block/Grant State’s Program and Non-Entitlement Grants in Hawaii (State-Administered Small Cities Program) (DRI), we noted several instances listed below where there was a significant time lag between when the County paid for disbursements and when the disbursement was requested for reimbursement.

Finding 2011-1 Federal Program Information U.S. Department of Housing and Urban Development CDBG – Entitlement Grants Cluster (CDBG) CFDA No.’s 14.218, ARRA-14.253 Award No. B-08-UC-12-0016, Award Year – 2008 Award No. B-08-UN-12-0003, Award Year – 2009 Award No. B-10-UC-12-0016, Award Year – 2010 Award No. ARRA B-09-UY-12-0016, Award Year – 2009

C-93

Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (State-Administered Small Cities Program) (DRI) CFDA No. 14.228 Award No. 08DB-D3-09-21-01-A03, Award Year – 2008 Award No. 10-DB-D4-09-21-01-K09, Award Year – 2010 ARRA: Homelessness Prevention and Rapid Re-Housing Program (HPRP) CFDA No. ARRA – 14.257 Award No. ARRA S09-UY-12-0024, Award Year – 2009 Criteria Allowable Costs; Cash Management: In accordance with OMB Circular A-102 Common Rule, the County’s methods and procedures for transferring funds should minimize the time elapsing between the transfer to the County of grant funds and when the disbursement was paid by the County. In addition, when awards are funded on a reimbursement basis, costs for which reimbursement was requested should be paid prior to the date of the reimbursement request.

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Condition/Context

206

Grant NSP (CDBG) NSP (CDBG) NSP (CDBG) CDBG CDBG CDBG CDBG CDBG CDBG CDBG DRI

Amount of Cash Drawdown $1,052,304.06 818,750.63 179,100.35 233,839.26 125,762.40 319,009.64 74,448.22 55,000.00 100,427.62 103,474.00 40,741.48

Date of Request for Cash Drawdown 6/2/2011 7/1/2011 7/1/2011 2/24/2011 2/15/2011 2/15/2011 2/24/2011 2/15/2011 9/21/2011 9/23/2011 3/3/2011

Date of Oldest Expenditure Paid by County in Cash Drawdown 1/31/2010 6/24/2010 7/8/2010 7/9/2010 9/28/2010 9/28/2010 4/24/2009 11/18/2010 4/28/2011 4/13/2011 7/9/2010

Difference in Days 487 372 358 230 140 140 671 89 146 163 237

Further for the CDBG – Entitlement Grants Cluster program, we noted items were certified to be 100% complete by contractors, were requested for full payment in signed affidavits, and authorized for full payment by Housing, Human & Veteran Services (HHVS) staff, who certified on the disbursement authorization form that a site inspection was conducted and the work was 100% complete, without all work having been completed for 24 homes, as observed during physical inspections of the NSP properties by the Internal Audit Department of the Clerk of the Circuit Court. The bid line value for incomplete work ranged from $1,038 to $12,101 across all findings, and was not specific to one contractor.

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Summary Schedule of Prior Audit Findings (continued)

Summary Schedule of Prior Audit Findings (continued)

Also, upon Internal Audit’s review of new air conditioning systems installed versus the bid specifications, it was noted that four systems did not conform to the bid requirements and one could not be verified. The systems in question required SEER and/or heat kilowatt ratings that were higher than the actual ratings of the systems installed by the contractors. The purpose of using certain minimum Energy Star and SEER ratings for A/C systems used in the rehabilitation process is to confirm the utility bills will remain affordable for the homeowner, as required by HUD grant guidelines.

Questioned Costs

Other substitutions were also noted, for example: a sink base cabinet was not removed and replaced per specifications in order to save the granite counter top from being damaged. The project manager and contractor decided to install a new tub in one of the bathrooms as a substitute for the work not performed in the kitchen, but a change order was never completed; therefore, the substitution was not approved.

Drawdown or reimbursement requests were submitted to the grantor significantly past the time that the County paid for the qualifying expenditures. There is a lack of a process to minimize the time between disbursement and reimbursement request. In addition, drawdown or reimbursement requests were submitted to the grantor prior to the County incurring and paying for qualifying expenditures. This could result in reimbursement for unallowable or unsupported costs. Overall, these resulted in noncompliance with the cash management requirements of the grant programs.

C-94

In addition, Internal Audit noted in their investigation report that five homeowners received lawn care services for three months after their purchase of an NSP property with a value of $1,380. The HHVS department found the error and requested the funds be reimbursed to the county for the services from each homeowner in letters dated February 4, 2011. To date, no funds have been reimbursed to the County from the homeowners; however, it was further noted that the contractor was never paid for these services by the County. During our compliance testing over the activities allowed or disallowed/allowable costs/costs principles attributes, we noted 10 expenditures that were for rehabilitation work for properties that were physically inspected by Internal Audit where the work was not completed or unapproved substitutions were made. Also, we noted per review of the details for the cash draw downs, that part of the request for reimbursement were for rehabilitation expenditures on properties that were investigated by Internal Audit and determined to have questioned costs associated with them for work that was paid for, but was not complete. Finally, for the “ARRA: Homelessness Prevention and Rapid Re-Housing Program (HPRP),” we noted that for one drawdown request dated July 5, 2011, the drawdown request was made prior to the check date of the initial expenditure, which was July 6, 2011. As such, the funds were not expended prior to the drawdown request.

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For the CDBG – Entitlement Grants Cluster program, we noted total questioned costs of $158,559. Further, for the ARRA: Homelessness Prevention and Rapid Re-Housing grant program, we noted total questioned costs of $16,370. Cause/Effect

In addition, expenditures were paid by the County for rehabilitation work that was incomplete. Internal controls over rehabilitation activities and the related approval process were not designed or operating effectively. Signing statements saying that work is 100% complete when it is not could result in funds being expended and requested for reimbursement for work that is not completed. Recommendation The County should implement procedures that minimize the time elapsing between the request for a cash drawdown and the time that the disbursements are paid by the County and that the personnel administering the grant program comply with the County’s established process, whereby qualifying expenditures are incurred and paid for prior to requesting reimbursement from the grantor. Also, the County should implement internal control procedures to inspect all work prior to authorizing any payment requests to confirm that contractors have completed all work according to the bid specifications. Current Status Drawdowns: OMB has developed a written internal control to establish protocols to perform drawdowns at regularly scheduled intervals. Due to continued staffing changes, vacancies, restructuring and mid-year implementation of OMB countywide oversight of grants compliance, progress has been made but not completely eliminated during FY 2012. The CDBG program’s most active grants contracts have been brought up to date during FY 2012 and only older grant

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Summary Schedule of Prior Audit Findings (continued)

Summary Schedule of Prior Audit Findings (continued)

contracts remained in noncompliance. The NSP grant program as of July 2012 has regularly scheduled draws performed. The DRI grant program as of May 2012 has regularly scheduled draws performed. Authorizing Payment: Internal controls have been strengthened to ensure signed statements attesting work as 100% complete for rehabilitation activities are true and accurate. The Disbursement Authorization Form that accompanies all vendor invoices submitted for payment now include photos to document that work has been completed as stated. The photos taken by responsible staff are attached to the Disbursement Authorization Form. The invoice, authorization form and photos are reviewed by the Grants Coordinator prior to their signature for payment approval. A second attestation is then obtained by the Manager, Federal and State Grants as a second verification that the statements are true and accurate. Once signatures have been obtained, the invoice is then processed for payment.

Reporting. For the CDBG – Entitlement Grants Cluster program, per the NSP program regulations contained in the Federal Register, each grantee must submit a quarterly performance report, as HUD prescribes, no later than 30 days following the end of each quarter, beginning 30 days after the completion of the first full calendar quarter after grant award and continuing until the end of the 15th month after initial receipt of grant funds. In addition to this quarterly performance reporting, each grantee will report monthly on its NSP obligations and expenditures beginning 30 days after the end of the 15th month following receipt of funds, and continuing until reported total obligations are equal to or greater than the total NSP grant. After HUD has accepted a report from a grantee showing such obligation of funds, the monthly reporting requirement will end and quarterly reports will continue until all NSP funds (including program income) have been expended and those expenditures are included in a report to HUD.

C-95

The County received federal program funds as a sub-grantee of the State under the Community Development Block/Grant State’s Program and Non-Entitlement Grants in Hawaii (StateAdministered Small Cities Program) (DRI). Per review of the State’s reporting guidelines, the sub-grantee is required to submit a monthly status report.

Finding 2011-2 Federal Program Information U.S. Department of Housing and Urban Development CDBG – Entitlement Grants Cluster (CDBG) CFDA No.’s 14.218, ARRA-14.253 Award No. B-04-UC-12-0016, Award Year – 2004 Award No. B-02-UC-12-0016, Award Year – 2002 Award No. B-08-UC-12-0016, Award Year – 2008 Award No. B-08-UN-12-0003, Award Year – 2009 Award No. B-10-UC-12-0016, Award Year – 2010 Award No. B-09-UC-12-0016, Award Year – 2009 Award No. ARRA B-09-UY-12-0016, Award Year – 2009

For the State Housing Initiatives Partnership Program (SHIP), we noted the following reporting requirements:

Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (State-Administered Small Cities Program) (DRI) CFDA No. 14.228 Award No. 08DB-D3-09-21-01-A03, Award Year – 2008 Award No. 10-DB-D4-09-21-01-K09, Award Year – 2010 Florida Housing Finance Corporation (the Corporation) State Housing Initiatives Partnership Program (SHIP) CSFA No. 52.901 Award No. FY08-09, Award Year – 2008 1302-1025260

Criteria

210

•

In accordance with Section 420.9075(10), Florida Statutes, each county or eligible municipality shall submit to the Corporation by September 15 of each year a report of its affordable housing programs and accomplishments through June 30, immediately preceding submittal of the report.

•

Annual report for the Closeout Fiscal Year (2010/2011).

•

The local SHIP administrator’s tracking system and annual reports must exactly match the information recorded in the local city or county’s general ledger.

•

SHIP administrators, therefore, are required to regularly reconcile their tracking system with the local finance department’s general ledger. They should meet with the director of their finance department to create a process that will confirm compliance with the single audit act.

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Summary Schedule of Prior Audit Findings (continued)

Summary Schedule of Prior Audit Findings (continued)

Condition/Context

Current Status

For the CDBG – Entitlement Grants Cluster program, we selected quarterly reports for the NSP program to test and noted that the reports were submitted by the County and then rejected to be modified as the amounts reported did not agree to the County’s general ledger; therefore, the reports could not be audited.

A technical advisor was hired to bring the required SHIP (52.901) annual reports into compliance. Staff responsible for reporting have received training from the technical advisor and will continue to receive technical support to draft and submit future reports. In order to properly account for future activity from past activity reconciled, a new SHIP fund has been established. Both Funds are monitored by OMB on a regular basis to ensure that established protocols of recording receipts, both grantor and program income is properly posted. Future reports will be reviewed and approved by OMB prior to submission. All reports have been reviewed and passed the FY 2012 audit review. This finding is remediated. In addition, OMB has established an internal control protocol to reconcile the general ledger by individual grant contract. A standard general ledger (GL) spreadsheet template has been developed to reconcile revenues postings to expenditure postings on a project to date basis. The spreadsheet is used as a monitoring and review tool for OMB to approve report submissions.

We noted that for six of our testing selections for the Community Development Block/Grant State’s Program and Non-Entitlement Grants in Hawaii (State-Administered Small Cities Program), which were for months prior to July 2011, the monthly status reports were not reconciled to the general ledger and a reconciliation was not provided. Subsequent to July 2011, we noted that these reports were reconciled to the general ledger.

C-96

Finally, for the SHIP grant program, the County received a letter from the Florida Housing Finance Corporation stating that the County was not in compliance with SHIP statutory guidelines as the Annual Report was not submitted by the deadline. Further, we obtained a copy of the Annual Report and noted that the financial information included in the report was not reconciled to the County’s general ledger. Accordingly, we were unable to validate the amount of expenditures reported in the Annual Report. Questioned Costs N/A Cause/Effect The reports submitted were not subjected to a thorough supervisory review to confirm accuracy and completeness, including verification that amounts reported agreed to the accounting records or were appropriately reconciled, if necessary. This could result in incorrect and/or inconsistent information between the reports filed and the underlying financial records and indicates that the County may not be in compliance with the provisions of the grant programs. Further, the SHIP grant program Annual Report was not submitted by the deadline. Internal controls with respect to reporting were not operating effectively. Recommendation

Finding 2011-3 Federal Program Information U.S. Department of Housing and Urban Development CDBG – Entitlement Grants Cluster (CDBG) CFDA No.’s 14.218, ARRA-14.253 Award No. B-04-UC-12-0016, Award Year – 2004 Award No. B-02-UC-12-0016, Award Year – 2002 Award No. B-08-UC-12-0016, Award Year – 2008 Award No. B-08-UN-12-0003, Award Year – 2009 Award No. B-10-UC-12-0016, Award Year – 2010 Award No. B-09-UC-12-0016, Award Year – 2009 Award No. ARRA B-09-UY-12-0016, Award Year – 2009 ARRA: Homelessness Prevention and Rapid Re-Housing Program (HPRP) CFDA No. ARRA – 14.257 Award No. ARRA S09-UY-12-0024, Award Year – 2009

The County should implement internal control procedures that require that reports be reconciled to the general ledger and reviewed and approved prior to being filed with the grantor. In addition, procedures should be in place to confirm that the reports are submitted by the deadline.

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Summary Schedule of Prior Audit Findings (continued)

Summary Schedule of Prior Audit Findings (continued)

Criteria

Recommendation

Sub-recipient Monitoring: OMB Circular A-133 requires that the County maintain internal controls over sub-recipients to confirm that sub-recipient activities are monitored, audit findings are resolved, and the impact of any noncompliance on the County is evaluated. Additionally, the County should perform procedures to provide reasonable assurance that the sub-recipient obtained required audits and takes appropriate corrective action on audit findings.

We recommend that the County implement internal control policies and procedures to ensure that proper monitoring of sub-recipients occur on an ongoing basis, including the timely submission of audit reports and resolution of any audit findings.

Condition/Context

An internal control for subrecipient monitoring has been developed and implemented by OMB and HHVS staff. This will include a master schedule of all subrecipients’ fiscal year end dates to monitor the appropriate times to request single audit reports based on the subrecipients’ fiscal year end.

C-97

Per review of two sub-recipient files under CDBG, we noted that the 2009 audits that had been obtained showed that both sub-recipients had findings in their single audits; however, the County did not address management responses and corrective actions related to the audit findings and how they may affect the funding that the County sub-awards them under the grant program. In addition, we noted that other audits since the 2009 audits had either not been obtained or disclosed findings that were not appropriately addressed. For the HPRP grant program, the County was not obtaining and reviewing audits of subrecipients, although, the sub-recipient stated that they had audited financial statements as part of their application for the grant sub-award. Therefore, the County did not comply with the sub-recipient monitoring requirements of OMB Circular A-133 and did not have proper internal controls in place over the process.

OMB has developed a form for subrecipients to complete in the collection of audit reports to assist in monitoring. As new subrecipient agreements are awarded, this form will also become an exhibit of the agreement. Reviews will be documented through the development of a standard review form completed by HHVS staff. Subrecipients that are cited findings are required to submit a corrective action plan. OMB will provide reviews of audit reports as requested. Finding 2011-4 Federal Program Information U.S. Department of Housing and Urban Development

Questioned Costs N/A Cause/Effect County personnel administering the grant program were not aware of the specific sub-recipient monitoring requirements of OMB Circular A-133. Failure to perform proper monitoring activities can result in noncompliance with sub-recipient monitoring requirements of OMB Circular A-133 and misuse/misappropriation of grant funding.

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214

CDBG – Entitlement Grants Cluster (CDBG) CFDA No.’s 14.218, ARRA-14.253 Award No. B-04-UC-12-0016, Award Year – 2004 Award No. B-02-UC-12-0016, Award Year – 2002 Award No. B-08-UC-12-0016, Award Year – 2008 Award No. B-08-UN-12-0003, Award Year – 2009 Award No. B-10-UC-12-0016, Award Year – 2010 Award No. B-09-UC-12-0016, Award Year – 2009 Award No. ARRA B-09-UY-12-0016, Award Year – 2009

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Summary Schedule of Prior Audit Findings (continued)

Summary Schedule of Prior Audit Findings (continued)

Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (State-Administered Small Cities Program) (DRI) CFDA No. 14.228 Award No. 08DB-D3-09-21-01-A03, Award Year – 2008 Award No. 10-DB-D4-09-21-01-K09, Award Year – 2010 Criteria Special Tests and Provisions: When CDBG funds or CDBG-R funds are used for rehabilitation, the grantee must confirm that work is properly completed per 24 CFR Section 570.506.

C-98

Any NSP-assisted rehabilitation of a foreclosed-upon home or residential property shall be completed to the extent necessary to comply with applicable laws, codes, and other requirements relating to housing safety, quality, or habitability, in order to sell, rent, or redevelop such homes and properties.

Cause/Effect County personnel did not thoroughly inspect all work prior to authorizing any payment requests; therefore, the County did not have effective internal controls in place over this process. Signing statements certifying that work is 100% complete without having performed a sufficient inspection could result in funds being dispersed and requested for reimbursement for work not performed. Recommendation The County should implement internal control procedures to inspect all work prior to authorizing any payment requests to confirm that contractors completed all work according to the bid specifications, contract specifications, and carried out the work in accordance with rehabilitation standards per 24 CFR Section 570.506. Current Status

Condition/Context We noted for one of the properties in our testing, 3061 Areca Avenue, there was no evidence that a pre-rehabilitation inspection was conducted describing the deficiencies to be corrected. Further, we noted 11 properties in our testing, 3061 Areca Avenue, 3402 Seminole Avenue, 3502 Caloosa St., 2224 50th Terrace SW, 4420 19th Avenue SW, 4471 32nd Avenue SW, 3870 4th Avenue NE, 4814 30th Place SW, 5300 17th Place SW, 2975 4th St. NE, and 3671 18th Avenue NE, that were certified to be 100% complete by contractors, were requested for full payment in signed affidavits, and authorized for full payment by Housing, Human & Veteran Services staff, who certified on the disbursement authorization form that a site inspection was conducted and the work was 100% complete, without all work having been completed, as observed during physical inspections of the properties by the Internal Audit Department of the Clerk of the Circuit Court.

Internal controls have been strengthened to ensure signed statements attesting work as 100% complete for rehabilitation activities are true and accurate. The Disbursement Authorization Form that accompanies all vendor invoices submitted for payment now include photos to document that work has been completed as stated. The photos taken by responsible staff are attached to the Disbursement Authorization Form. The invoice, authorization form and photos are reviewed by the Grants Coordinator prior to their signature for payment approval. A second attestation is then obtained by the Manager, Federal and State Grants as a second verification that the statements are true and accurate. Once signatures have been obtained, the invoice is then processed for payment.

Questioned Costs N/A

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Summary Schedule of Prior Audit Findings (continued)

Summary Schedule of Prior Audit Findings (continued)

Finding 2011-5

Cause/Effect

Federal Program Information

This process is considered to be in violation of the County’s procurement policy and not in compliance with the procurement, suspension, and debarment requirements of OMB Circular A-102 since all contractors were not given the opportunity to competitively bid on the same set of specifications. If all interested parties were given the opportunity to re-bid on the final specifications, the job(s) may have been awarded to a different contractor at a lower cost. Therefore, internal controls over the procurement, suspension, and debarment requirement were not operating effectively.

U.S. Department of Housing and Urban Development

C-99

CDBG – Entitlement Grants Cluster (CDBG) CFDA No.’s 14.218, ARRA-14.253 Award No. B-04-UC-12-0016, Award Year – 2004 Award No. B-02-UC-12-0016, Award Year – 2002 Award No. B-08-UC-12-0016, Award Year – 2008 Award No. B-08-UN-12-0003, Award Year – 2009 Award No. B-10-UC-12-0016, Award Year – 2010 Award No. B-09-UC-12-0016, Award Year – 2009 Award No. ARRA B-09-UY-12-0016, Award Year – 2009

Recommendation We recommend that the County implement proper internal controls to confirm that the bid process is competitive and fair to all interested parties by allowing them to bid on the same specifications as required by the County’s procurement policy and OMB Circular A-102.

Criteria

Current Status

Procurement, Suspension and Debarment: Verify that procurements provide full and open competition pursuant to the requirements of OMB Circular A-102.

Beginning in February of 2012, OMB and Purchasing met to establish coordination on grant related procurement activities. On February 1, 2012, Purchasing issued correspondence to advise all purchasing staff to coordinate with OMB to review grant solicitations. Before the grant requisition workflow is implemented, an interim process has been established for Purchasing to request OMB review of requisitions on an “as needed basis”. OMB and Purchasing worked collaboratively during FY2012 to identify the need for a dedicated Purchasing procurement agent that will be the main point of contract for grant procurements working with OMB to ensure single audit compliance. This position is in process of hiring during FY 2013.

Condition/Context We noted one of our testing selections was part of a group bidding process for the rehabilitation of five homes where draft specifications were given to contractors for bidding, and then later revised after the bids were awarded to one contractor. These were titled “pencil bids” by the Housing Department Rehabilitation Specialist who later made revisions to bid specifications and allowed the winning contractor to adjust its line item pricing. It was further noted that the winning contractor increased certain line items within the bid even when the specifications on the final bid were unchanged from the first set. The bid totals for the jobs did not increase or decrease; only line items within the bid were changed. Further, this was also found by the Internal Audit Department of the Clerk of the Circuit Court in their investigation over 24 NSP properties owned by the County to rehabilitate as there were instances of invoices that were paid for work that was not complete (see finding 2011-2).

Long term resolution to ensure successful procurement compliance will be initiated through a grants requisition workflow process whereby all grant related requisitions will workflow through OMB for formal review prior to release. During review, OMB will verify that procurement was carried out to the terms of the individual grantor agreement and program requirements including but not limited to open competition and debarment. This process has been successfully tested and initiated in the Growth Management Division which has managed 40 plus active grants annually. The first phase to identify workflow approvals was completed after the HHVS reorganization and full implementation is planned for FY 2013

Questioned Costs N/A

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Collier County, Florida

Collier County, Florida

Summary Schedule of Prior Audit Findings (continued)

Summary Schedule of Prior Audit Findings (continued)

Finding 2011-6

Condition/Context

Federal Program Information

At the end of fiscal year 2010, there was a total of $725,320.37 of program income that had not been considered and adjusted against future cash draws that was generated from CDBG activities. During fiscal year 2011, we noted there were three CDBG cash drawdowns that occurred during fiscal year 2011. Per review of the first draw, the date of the request for reimbursement was on June 2, 2011. Based on this date and review of the program income population for CDBG, we noted additional program income received during fiscal year 2011 as of 6/2/11 of $259,378.63, resulting in a total amount of program income (fiscal year 2010 and fiscal year 2011) prior to this cash draw of $984,699.00. We noted per review of the cash drawdown details that the County only applied $725,315.86 of program income to the request as oppose to the whole amount reflected in the general ledger of $984,699.00. Further, the last two cash draws related to CDBG during fiscal year 2011 were requested on July 1, 2011, and did not have any program income that was drawn against.

U.S. Department of Housing and Urban Development

C-100

CDBG – Entitlement Grants Cluster (CDBG) CFDA No.’s 14.218, ARRA-14.253 Award No. B-04-UC-12-0016, Award Year – 2004 Award No. B-02-UC-12-0016, Award Year – 2002 Award No. B-08-UC-12-0016, Award Year – 2008 Award No. B-08-UN-12-0003, Award Year – 2009 Award No. B-10-UC-12-0016, Award Year – 2010 Award No. B-09-UC-12-0016, Award Year – 2009 Award No. ARRA B-09-UY-12-0016, Award Year – 2009

Questioned Costs Criteria

$259,378.63

Program Income and Cash Management: Revenue received by a state, unit of general local government, or sub-recipient (as defined at 24 CFR 570.500(c)) that is directly generated from the use of CDBG funds (which term includes NSP grant funds) constitutes CDBG program income. To confirm consistency of treatment of such revenue, the definition of program income at 24 CFR Section 570.500(a) shall be applied to amounts received by states, units of general local government, and sub-recipients. However, Section 2301(d)(4) imposes certain limitations and requirements that necessitate an alternative requirement to govern the use of program income generated by activities carried out pursuant to Section 2301(c). The limitations and requirements are based on the NSP activity that generated the program income and on the date the income is received. In addition, Section 2301(d)(4) requires any revenue from the sale, rental, redevelopment, rehabilitation, or any other eligible use of NSP funds to be provided to and used by the state or unit of local general government. This includes revenue received by a private individual or other entity that is not a sub-recipient. Program income received before July 30, 2013, may be retained by the state or unit of general local government if it is treated as additional CDBG funds and used in accordance with the requirements of Section 2301. Furthermore, as provided under 24 CFR Section 85.21 for entitlements, grantees, and sub-recipients shall disburse program income before requesting additional cash withdrawals from the U.S. Treasury.

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Cause/Effect It appears that CDBG program income not adjusted from (reduced) future cash draws. Internal controls with respect to program income were not operating effectively. Recommendation We recommend that the County implement procedures to verify that program income received is properly adjusted to future cash draw downs. Current Status OMB has developed a written internal control to establish protocols to perform drawdowns that provides an additional layer of oversight prior to submissions to ensure x

Program income has been properly accounted for and applied to reduce the requested draw amount,

x

A project to date general ledger reconciliation is performed,

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Collier County, Florida

Summary Schedule of Prior Audit Findings (continued)

Summary Schedule of Prior Audit Findings (continued)

x

Payments have cleared to prevent advance reimbursement and

Questioned Costs

x

Match and inkind requirements have been met.

$80,000

HHVS now routes all draw requests via email to the assigned OMB Grants Accountant to receive approvals via email prior to submission or request for draw. This protocol will be implemented countywide over time. Finding 2011-7 State Program Information

The final report submitted was not adequately reviewed to confirm accuracy and completeness, including verification that in-kind contribution amounts reported were appropriately substantiated by accounting records. Internal controls with respect to matching were not operating effectively. Recommendation

C-101

Florida Fish and Wildlife Conservation Commission Florida Boating Improvement Program CSFA No. 77.006 Award No. 08079, Award Year – 2008

The County should implement internal control procedures that require that amounts included in final submitted reports be adequately substantiated and reconciled to the accounting records and reviewed and approved prior to being filed with the grantor. Current Status

Criteria Matching: Per Florida Boating Improvement Program guidelines, applicants must furnish some form of noncash match (in-kind service) to the project. Noncash match may include the cost of administrative/contract management, engineering/construction management, labor, materials, and equipment provided through in-house resources of the Applicant. Applicants may not provide more than 5% of the total project cost for project administration and 10% of the total project cost for project engineering/construction management. Condition/Context We noted that there were in-kind contributions of $20,000 and $60,000 for administration and project management, respectively, included in the final submitted report for the FBIP grant program. However, we were unable to obtain evidence to substantiate the valuation and calculation of the in-kind contributions.

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Cause/Effect

222

OMB has developed a written internal control to establish protocols to perform drawdowns that provides an additional layer of oversight prior to submissions to ensure x

Program income has been properly accounted for and applied to reduce the requested draw amount,

x

A project to date general ledger reconciliation is performed,

x

Payments have cleared to prevent advance reimbursement and

x

Match and inkind requirements have been met.

Coastal Zone Management (CZM) has been reorganized under the Growth Management Division where OMB countywide protocols were originally developed and implemented successfully since FY 2008. CZM now routes all draw requests to the assigned OMB Grants Accountant to receive approval via signature or email prior to submission or request for draw. This protocol will be implemented countywide over time.

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Collier County, Florida

Summary Schedule of Prior Audit Findings (continued)

Summary Schedule of Prior Audit Findings (continued)

Finding 2011-8

Florida Housing Finance Corporation

Federal/State Program Information

State Housing Initiatives Partnership Program (SHIP) CSFA No. 52.901

Federal Agencies/Program: Award No. FY08-09, Award Year – 2008

C-102

U.S. Department of Housing and Urban Development CDBG – Entitlement Grants Cluster (CDBG) CFDA No.’s 14.218, ARRA-14.253 Award No. B-04-UC-12-0016, Award Year – 2004 Award No. B-02-UC-12-0016, Award Year – 2002 Award No. B-08-UC-12-0016, Award Year – 2008 Award No. B-08-UN-12-0003, Award Year – 2009 Award No. B-10-UC-12-0016, Award Year – 2010 Award No. B-09-UC-12-0016, Award Year – 2009 Award No. ARRA B-09-UY-12-0016, Award Year – 2009

Criteria Allowable Costs: Compensation for personnel services rendered in connection with federal awards must be documented and supported as described in OMB Circular A-87, Cost Principles for State, Local and Indian Tribal Governments (A-87). Additionally, pursuant to the SHIP Program Manual and the State of Florida’s Part Four Compliance Supplement for the CCE program, administrative costs for the SHIP and CCE state programs should also be in conformance with A-87. According to A-87, the standards regarding time distribution are in addition to the payroll documentation and require the following:

Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (State-Administered Small Cities Program) (DRI) CFDA No. 14.228 Award No. 08DB-D3-09-21-01-A03, Award Year – 2008 Award No. 10-DB-D4-09-21-01-K09, Award Year – 2010

•

Charges to federal awards for salaries and wages, whether treated as direct or indirect costs, will be based on payrolls documented in accordance with the generally accepted practice of the governmental unit and approved by responsible official(s) of the governmental unit.

•

Where employees are expected to work solely on a single federal award or cost objective, charges for their salaries and wages will be supported by periodic certifications that the employees worked solely on the program for the period covered by the certification. These certifications will be prepared at least semiannually and will be signed by the employee or supervisory official having firsthand knowledge of the work performed by the employee.

•

Where employees work on multiple activities or cost objectives, a distribution of their salaries or wages will be supported by personnel activity reports or equivalent documentation that meets the following standards (unless a statistical system or other substitute system has been approved by the cognizant federal agency):

State Agencies/Programs: Florida Department of Elder Affairs Community Care for the Elderly (CCE) CSFA No. 65.010 Award No. CCE 203.11, Award Year – 2011 Award No.CCE 203.10, Award Year – 2010

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Summary Schedule of Prior Audit Findings (continued)

Summary Schedule of Prior Audit Findings (continued)

a) Must reflect an after-the-fact distribution of the actual activity of each employee,

Current Status

b) Must account for the total activity for which each employee is compensated,

Housing, Human and Veteran Services (HHVS) continues to follow the established procedure for charging grants staff time via biweekly timesheets, signed by the employee and management to reflect actual time spent on the grants. Internal controls have been strengthened to prevent and/or verify that formulas have not been inadvertently changed to create the unintentional errors that generated the audit finding. The department has implemented one spreadsheet to be used by all staff members. Account strings and formulas are verified by the lead accountants for each program prior to forwarding to Human Resources for entry into the accounting system (SAP).

c) Must be prepared at least monthly and must coincide with one or more pay periods, and d) Must be signed by the employee. e) Budget estimates or other distribution percentages determined before the services are performed do not qualify as support for charges to federal awards but may be used for interim accounting purposes. Condition/Context

C-103

During our testing over payroll, we could not obtain sufficient evidence that the time allocated toward grant programs per time sheets was actual time the employee spent working on the grant programs. Questioned Costs Total salaries and related costs for the fiscal year 2011 time period are summarized as follows: CDBG (CFDA No. 14.218) DRI (CFDA No. 14.228) SHIP (CSFA N0. 52.901) CCE (CSFA No. 65.010)

$ $ $ $

577,627 162,652 37,822 251,771

Finding 2011-9 State Program Information Florida Fish and Wildlife Conservation Commission Florida Boating Improvement Program CSFA No. 77.006 Award No. 08079, Award Year – 2008

Cause/Effect Payroll allocations to grant programs were not supported by detailed time records. As such, these payroll costs are unsupported. This could result in reimbursement for unallowable or unsubstantiated costs. Recommendation We recommend that the County implement effective internal controls to confirm that actual time worked by an employee is charged to the grant programs.

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During May 2012, all time keepers were retrained on proper time keeping processes by the Human Resources Department. HHVS is in process of finalizing formal written procedures to be used as a guide and training to continue to strengthen internal controls. OMB will assist in review of these procedures and provide job aides as needs are identified. During FY 2013, the County formed a subcommittee to assist HHVS to formalize business operations into protocols and written procedures. The committee meets weekly. The payroll process has been identified as a top priority. Human Resource personnel are in attendance to ensure current practices and policies are understood. OMB is in attendance to ensure audit finding concerns are addressed through proper internal controls.

226

Criteria Reporting: Per review of the State’s reporting guidelines, the sub-grantee is required to submit monthly progress reports from the award date of the grant until such time as the Contractor’s Certification of Completion is signed by the contractor and submitted to the Florida Fish and Wildlife Conservation Commission. The compliance supplement requires that performance reports are complete and accurate, which includes a requirement that amounts reported be in agreement with accounting records that support the audited financial statements and the SEFA.

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Collier County, Florida

Summary Schedule of Prior Audit Findings (continued)

Summary Schedule of Prior Audit Findings (continued)

Condition/Context

Finding 2011-10

We noted during our review and testing of the final invoice that the Contractor’s Certification of Completion, which was signed by the contractor, was submitted to the Florida Fish and Wildlife Conservation Commission on November 9, 2011; however, no progress reports were submitted after January 2011, during which month construction was completed. As such, no monthly progress reports were submitted for approximately 10 months.

Federal Program Information U.S. Department of Agriculture Florida Department of Education Summer Food Service Program for Children CFDA No. 10.559 Award No. 04-0804, Award Year – 2011

Questioned Costs N/A

Criteria

Cause/Effect

C-104

Failure to submit the required monthly progress reports resulted in noncompliance with the reporting requirements of the grant program. Internal controls with respect to reporting were not operating effectively.

Allowable Costs: Compensation for personnel services rendered in connection with federal awards must be documented and supported as described in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments (A-87). Condition/Context

Recommendation The County should establish policies and procedures necessary to confirm that all required reports are prepared and filed in a timely manner, including developing a checklist of required reports and due dates. Current Status OMB has established a review and approval process of required grantor reports prior to submittal. In support of this process, a standard general ledger (GL) reconciliation template has been implemented to reconcile revenues postings to expenditure postings on a project to date basis. The spreadsheet is used as a monitoring and review tool to approve draw and report submissions. A GL spreadsheet will be established for each grantor agreement maintained by the OMB. To date, report review has been rolled out to those Departments with findings and/or comments with a phased rollout countywide.

We noted upon review of payroll time cards from the Parks and Recreation Department, the County Clerk’s Finance Department identified and investigated an error noted in the computation and data entry of overtime hours worked by Summer Food Program personnel. We note that the fiscal technician that was inputting the time for the Summer Food Program was responsible for entering the hours worked by each employee. The fiscal technician would enter and approve in the SAP general ledger system for payroll processing and payment, the data provided by the manual time card signed by the employee and supervisor of the program. The fiscal technician, when entering overtime hours into the system, multiplied all overtime hours by 1.5, as they were unaware that the County’s payroll system automatically calculated the increase in rate for hours classified as overtime hours. Additionally, we noted that an overpayment for the time resulted in additional employer taxes and Florida Retirement System contributions, as these expenditures are calculated as a percentage of total pay. Questioned Costs $8,517

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Summary Schedule of Prior Audit Findings (continued)

Summary Schedule of Prior Audit Findings (continued)

The cause is due to a clerical error going undetected due to the lack of effective supervisory oversight, which resulted in an overcharge of payroll costs to the program. As such, unallowable costs were charged to the program. In addition, permissions for both entering data and approving time in the SAP system were granted to this employee.

Finally, all time keepers were retrained on May 2012 on proper time keeping processes and a staff member was hired on June, 2012 to complete post-audit on all payroll time submissions to ensure proper documents are retained, information is entered correctly and corrective action is taken immediately in case of any discrepancies. The Department standardized its timesheet for all employees and began implementation of the new time report effective February 2013. All time keepers have been trained on the new timesheet.

Recommendation

Finding 2011-11

We recommend an additional level of review, to compare the hours per the manual time cards to the timekeeper’s entry into the system, and that the timekeeper’s access to the payroll module should not also include approval of time entry. We also recommend proper training of payroll personnel.

Federal Program Information

Current Status

Summer Food Service Program for Children CFDA No. 10.559 Award No. 04-0804, Award Year – 2011 Criteria

Cause/Effect

C-105

The department has implemented a policy to ensure the segregation of duties between time keepers who enter the data and the staff who have permission to approve payroll. These permissions are also segregated within the SAP time-keeping system. Additionally, the department has developed a system that establishes a central, ongoing post-audit of payroll records for each payroll period to ensure standardization of time entry. This centralized postaudit includes: 1. Schedules for all cost centers in the department are posted and maintained electronically 2. Time cards are matched to the schedules

U.S. Department of Agriculture Florida Department of Education

Allowable Costs; Cash Management: In accordance with OMB Circular A-102 Common Rule, the related expenditures should be in compliance with the applicable funding techniques as described in the agreement and when awards are funded on a reimbursement basis, the costs for which reimbursement was requested were paid prior to the date of the reimbursement request. In addition, in accordance with OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments (A-87), costs need to be supported by adequate documentation. Condition/Context

3. Time cards are matched to what has been entered into SAP 4. All entries are checked for completeness (e.g.; appropriate signatures, inclusion of leave slips, proper coding, etc.) 5. The Program Supervisor and Regional Manager are contacted immediately if any discrepancy is uncovered. 6. A log is kept which details the audit and files for each pay period.

We note that the meals served on a daily basis are tracked manually at each meal site, and the manual tracking sheets are sent to the Parks and Recreation Administration Office. Personnel at the office enter the manual data into an excel spreadsheet, which is then used to summarize the total meals served and to prepare the cash drawdown requests. We obtained the Excel tracking spreadsheet for the month of June 2011, and while clerically testing it, we noted that the total number of meals served, plus the total number of meals left over, was more than the total number of meals delivered for the Naples locations. Additionally, we noted that the total number of meals left over for both locations were not equal to the total number of meals delivered during the period, less the number of meals served. As such, we were unable to determine whether the

7. All new and re-hires are now paid by direct deposit only

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Collier County, Florida

Summary Schedule of Prior Audit Findings (continued)

Summary Schedule of Prior Audit Findings (continued)

Excel tracking spreadsheet appropriately reflected the number of meals delivered or the number of meals served. Further, we were unable to obtain sufficient evidence to verify the number of meals served and reported, and therefore reimbursed, during July 2011 and August 2011.

Compliance Requirement: Reporting

Questioned Costs Unable to determine.

The financial information included in the submitted Annual Report was not reconciled to the County’s general ledger. Accordingly, we were unable to validate the amount of expenditures and program income reported in the Annual Report.

Cause/Effect

Recommendation

Drawdown or reimbursement requests were submitted to the grantor that could not be fully substantiated with evidence that they were qualifying paid expenditures. This could result in reimbursement for unsubstantiated meals served.

The County should implement procedures that require that the statutory reports be reconciled to the general ledger and reviewed and approved prior to being filed with the State.

C-106

Views of Responsible Officials and Planned Corrective Action

Recommendation We recommend that the personnel administering the grant program implement procedures to ensure that reimbursement requests are supported by actual meals served. Current Status The Parks Department recently filled an Operation Analyst position as of July 2012 that has been identified as a Grants Controller pursuant to the OMB Grants Program Management plan to assist in oversight of single audit compliance. During the end of FY 2012 and FY 2013, OMB began to meet with the Grants Controller to discuss county-wide internal controls and standardized grant protocols that will be fully implemented to Parks including the 2013 Summer Food Program. OMB will work with staff to develop a monthly monitoring review process to ensure monthly tracking reports reconcile to the reimbursement request and any subsequent revisions to the reimbursement request support a successful audit trail. Finding 2010-1 State Program Information

Management concurs with the recommendations of the auditors. On July 1, 2010, Collier County entered into a contract with the Florida Housing Coalition, the technical assistance provider for Florida Housing Finance Corporation. The purpose was to receive assistance in reconciling the annual reports to the general ledger and establishing leading practices to capture, reconcile, and report data. Current Status A technical advisor was hired to bring the required SHIP (52.901) annual reports into compliance. Staff responsible for reporting have received training from the technical advisor and will continue to receive technical support to draft and submit future reports. In order to properly account for future activity from past activity reconciled, a new SHIP fund has been established. Both Funds are monitored by OMB on a regular basis to ensure that established protocols of recording receipts, both grantor and program income is properly posted. Future reports will be reviewed and approved by OMB prior to submission. All reports have been reviewed and passed the FY 2012 audit review. This finding is therefore remediated. In addition, OMB has established an internal control protocol to reconcile the general ledger by individual grant contract. A standard general ledger (GL) spreadsheet template has been developed to reconcile revenue postings to expenditure postings on a project to date basis. The spreadsheet is used as a monitoring and review tool to approve both drawdown requests and report submissions.

Florida Housing Finance Corporation (the Corporation) State Housing Initiatives Partnership Program (SHIP) CSFA No. 52.901 Award No. FY08-09, Award Year – 2008

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Condition/Context

232

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Collier County, Florida

Summary Schedule of Prior Audit Findings (continued)

Summary Schedule of Prior Audit Findings (continued)

Finding 2010-2

Finding 2010-3

Federal Program Information

Federal Program Information

U.S. Department of the Interior Payments in Lieu of Taxes (PILT) CFDA No. 15.226

U.S. Department of Homeland Security Disaster Grants – Public Assistance (Presidentially Declared Disasters) CFDA No. 97.036 Award No. 08-FA-B9-09-21-00-509, Award Year – 2009

Compliance Requirement: Reporting

Compliance Requirement: Procurement, Suspension and Debarment

Condition/Context

Condition/Context

C-107

The County was not aware of the requirement noted above and did not certify to the Department that it had made an appropriate distribution of the funds within 120 days of receiving payments. Recommendation The County should implement procedures to identify all types of reporting requirements indicated in the federal regulations and to confirm all such reports or certifications are submitted as required and on a timely basis. Views of Responsible Officials and Planned Corrective Action

We selected the largest vendor included in the population, which comprised the majority of the expenditures incurred under the federal program for testing. The expenditures were incurred during prior years although the federal reimbursement was sought and received in the current year. We noted no documentation evidencing that the County had checked the EPLS, and a certification from the vendor was not collected or clause or condition included in the contract. We noted that the County’s current policy it to document the EPLS check; however, as this vendor contract pertained to prior years, there was no documentation of the EPLS check being performed. Recommendation

The Clerk’s Department of Finance and Accounting (Finance) determined that this program was considered a federal grant in July 2010. At that time, Finance contacted the Department of Interior and was told that there were no reporting requirements for this program. All funds were properly distributed. Upon reviewing CFR 44.5(d) with the auditors, it was determined that a certification confirming the appropriate distribution of funds was required. The confirmation was sent and this requirement had been added to the PILT procedures for future years.

The County should perform the required verification by checking the EPLS (and documenting evidence of the verification, when it was performed and by whom), collecting a certification from the entity, or adding a clause or condition to the contract with that entity in accordance with the federal requirements.

Current Status The Clerk’s Department continues this reporting in a timely manner as required by the guidelines.

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Summary Schedule of Prior Audit Findings (continued)

Summary Schedule of Prior Audit Findings (continued)

C-108

Views of Responsible Officials and Planned Corrective Action

Compliance Requirement: Reporting

Management concurs with and has successfully implemented the procedure of performing EPLS checks on all vendors associated with grant activities. This contract was procured in July of 2005, prior to any damage done to Naples beaches and initial submission to FEMA for reimbursement. This contract bid process was intended for payment under nongrant revenue sources and accordingly, our procurement procedures do not require debarment checks for nongrant-related vendors. The bid process did include the following language with regards to Public Entity Crimes: “By its submitting a Bid, Bidder acknowledges and agrees to and represents it is in compliance with the terms of Section 287.133(2)(a) of the Florida Statutes.” Said statute prohibits a vendor from bidding on a contract when they have been convicted of a public entity crime.

Condition/Context

An after-the-fact EPLS check was performed on this vendor for the period of January 1, 2005 through and including September 30, 2010, and was found to be in good standing. At the time, the County submits their second request for scope change with FEMA regarding the increased beach costs, all vendors submitted for reimbursement will be checked after-the-fact.

We recommend that all reports submitted to grantor agencies be subjected to a thorough supervisory review for accuracy and completeness prior to submission.

Current Status

The Florida Public Assistance quarterly reporting is done electronically without any intermittent check points for review. Management will work around this by having staff create a spreadsheet prior to quarterly reporting submission and submit to Management for approval.

Coastal Zone Management (CZM) has been reorganized under the Growth Management Division where OMB countywide protocols were originally developed and implemented successfully since FY 2008. As of 10/01/13, CZM now routes all requisitions requests through the grants requisition process which allows OMB to ensure single procurements requirements are met including EPLS requirements. In addition, new solicitations are forwarded to OMB by Purchasing for a compliance review. Purchasing and OMB have collaboratively worked together beginning in February 2012 to establish EPLS verification protocols on all new solicitations as a precautionary measure in the event County contract is approved by a federal or state agency for use after the fact of solicitation in events of disaster emergency and public assistance grants.

For one of the two quarterly reports selected for testing on a large project, we noted amounts were not reported accurately for the anticipated final amount and the amount expended to date. The accounting records reflected a total amount of $12.9 million, whereas the report reflected $3.1 million. Further, we selected the next quarterly report and noted that the amounts reported were the same and had not been updated to reflect the actual activity based on the County’s accounting records. Recommendation

Views of Responsible Officials and Planned Corrective Action

Staff inquired about submitting revised quarterly reports for the periods in question and was advised that there are no options for doing this within the system. Current Status OMB has established protocols to ensure segregation of duties for submittal of required grantor reports. Protocol requires a documented approval by a separate staff member from the preparer of the report.

Finding 2010-4 Federal Program Information U.S. Department of Homeland Security Disaster Grants – Public Assistance (Presidentially Declared Disasters) CFDA No. 97.036 Award No. 08-FA-B9-09-21-00-509, Award Year – 2009

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Summary Schedule of Prior Audit Findings (continued)

Summary Schedule of Prior Audit Findings (continued)

The invoice selected for testing on this project was incorrectly referenced in the written discussion on PW 2700 by State personnel at $682,000, the PO amount. There is a spreadsheet that FEMA, State personnel, and Collier personnel are working with for the entire $33.9 million dollar scope change. The actual invoice amount of $654,002.73 is included on the spreadsheet.

Finding 2010-5 Federal Program Information U.S. Department of Homeland Security Disaster Grants – Public Assistance (Presidentially Declared Disasters) CFDA No. 97.036 Award No. 08-FA-B9-09-21-00-509, Award Year – 2009

Current Status OMB has developed a written internal control to establish protocols to perform draw downs that provides an additional layer of oversight prior to submissions to ensure:

Compliance Requirement: Allowable Activities/Costs x

Program income has been properly accounted for and applied to reduce the requested draw amount,

x

A project to date general ledger reconciliation is performed,

x

Payments have cleared to prevent advance reimbursement and

x

Match and in-kind requirements have been met.

Condition/Context

C-109

The large project PW that was finalized during fiscal year 2010 and which set forth the allowable activities and costs for the project included approximately $10.5 million for costs associated with one vendor and $2.2 million related to various other vendor-related costs. The County was reimbursed under the federal program for the full amount of the approved PW (approximately $3.1 million was collected in prior years and approximately $9.7 million was collected during fiscal year 2010). For the other vendors included in the PW totaling $2.2 million, we selected three of the largest vendors to test covering more than 60% of the other vendor total amount. We noted that for one of the vendors selected, the amount billed by the vendor and paid by the County was less than the amount in the PW by $27,997, which at the federal reimbursable share per the PW of 55% equates to $15,398.

Coastal Zone Management (CZM) has been reorganized under the Growth Management Division where OMB countywide protocols were originally developed and implemented successfully since FY 2008. CZM now routes all draw requests to the assigned OMB Grants Accountant to receive approval via signature or email prior to submission or request for draw.

Recommendation

Finding 2010-6

We recommend that the County implement procedures to confirm that amounts reimbursed are based upon actual expenditures incurred.

Federal Program Information

Views of Responsible Officials and Planned Corrective Action As discussed in previous meetings, this Project Worksheet 2700 (PW) was the scope change and Collier County was allowed a much larger reimbursement for the damages done to Collier County Beaches. This is an ongoing process and involves three Named Events (Tropical Storm Gabrielle on September 12, 2001; Hurricane Katrina on August 29, 2005; and Hurricane Wilma on October 24, 2005). At September 20, 2010, Collier County was half way through this process.

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U.S. Department of Housing and Urban Development CDBG – Entitlement Grants Cluster (CDBG) CFDA No. 14.218 and CFDA No. ARRA-14.253 Award No. B-08-UN-12-0003, Award Year – 2009 Award No. B-07-UC-12-0016, Award Year – 2007 Award No. B-08-UC-12-0016, Award Year – 2008 Award No. B-09-UC-12-0016, Award Year – 2009 Award No. B-10-UC-120016, Award Year – 2010 Award No. ARRA B-09-UY-12-0016, Award Year – 2009

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Collier County, Florida

Summary Schedule of Prior Audit Findings (continued)

Summary Schedule of Prior Audit Findings (continued)

Compliance Requirement: Program Income

x

Program income has been properly accounted for and applied to reduce the requested draw amount,

x

A project to date general ledger reconciliation is performed,

x

Payments have cleared to prevent advance reimbursement and

x

Match and in-kind requirements have been met.

Condition/Context

C-110

We noted a total of approximately $732,000 of program income generated during fiscal year 2010 under the Neighborhood Stabilization Program (NSP), which is part of the CDBG program. Per review of the general ledger expenditure detail provided, we noted that the program income had been applied against specific program expenditures in determining the net amount of program expenditures reported in the SEFA. From the detail of program income provided, we selected a sample of specific program income transactions for testing and the first selection of approximately $66,000 was recorded in May 2010. The remaining five selections included in our sample were recorded during September 2010. There were no NSP program cash draws made subsequent to the receipt of the program income recorded in September 2010. We attempted to ascertain whether the amounts received as program income in May 2010 were properly offset against program expenditures in determining the amount of federal funds drawn for the next draw request occurring subsequent to the date the program income was received in order to satisfy the requirement that program income is used before requesting additional cash draws. However, we were informed that the May 2010 program income of $66,000 had not been deducting in subsequent cash draw requests made during fiscal year 2010. Recommendation We recommend that the County implement procedures to verify that program income received is properly offset against expenditures incurred when making draw requests under the federal program. Views of Responsible Officials and Planned Corrective Action Collier County concurs with the recommendation. Prior to making a request to draw new funds under NSP, County fiscal staff will submit evidence to the program administrator that all program income received will be, or has been, offset against expenditures. This requirement will apply regardless of what NSP activity generated the program income or what activity Collier County seeks to draw down against available program funds. Current Status OMB provides an additional layer of oversight when Health Human and Veteran Services (HHVS) Department staff performs draws by performing a documented review prior to submission to ensure:

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OMB has established a standard GL spreadsheet template that reconciles revenue postings to expenditure postings on a project to date basis. The spreadsheet is used as a monitoring and review tool to approve draw and report submissions. Finding 2010-7 Federal Program Information U.S. Department of Housing and Urban Development CDBG – Entitlement Grants Cluster (CDBG) CFDA No. 14.218 and CFDA No. ARRA-14.253 Award No. B-08-UN-12-0003, Award Year – 2009 Award No. B-07-UC-12-0016, Award Year – 2007 Award No. B-08-UC-12-0016, Award Year – 2008 Award No. B-09-UC-12-0016, Award Year – 2009 Award No. B-10-UC-120016, Award Year – 2010 Award No. ARRA B-09-UY-12-0016, Award Year – 2009 Compliance Requirement: Reporting Condition/Context We selected two quarterly reports for the NSP program to test and noted that amounts reported for expenditures did not agree to the County’s general ledger and a reconciliation was not provided. Recommendation The County should implement procedures that require that the NSP reports be reconciled to the general ledger and reviewed and approved prior to being filed with the grantor. 1302-1025260

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Ernst & Young LLP Suite 500 5100 Town Center Circle Boca Raton, FL 33486

Collier County, Florida

Tel: +1 561 955 8000 Fax: +1 561 955 8200 www.ey.com

Summary Schedule of Prior Audit Findings (continued)

Management Letter and State Reporting Requirements Current Status OMB has established a review and approval process of required grantor reports prior to submittal. In support of this process, a standard general ledger (GL) reconciliation template has been implemented to reconcile revenue postings to expenditure postings on a project to date basis. The spreadsheet is used as a monitoring and review tool to approve draw and report submissions. A GL spreadsheet will be established for each grantor agreement maintained by the OMB. To date, report review has been rolled out to those Departments with findings and/or comments with a phased rollout countywide.

Members of the Board of County Commissioners Collier County, Florida: We have audited the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Collier County, Florida as of and for the year ended September 30, 2012, which collectively comprise Collier County, Florida’s basic financial statements and have issued our report thereon dated March 6, 2013.

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We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. We have issued our Report of Independent Certified Public Accountants on Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards, Report of Independent Certified Public Accountants on Compliance with Requirements That Could Have a Direct and Material Effect on each Major Federal Program and State Project and on Internal Control over Compliance in Accordance with OMB Circular A-133, Section 215.97, Florida Statutes and Chapter 10.550, Rules of the Auditor General, and Schedule of Findings and Questioned Costs. Disclosures in those reports and schedule, which are dated March 6, 2013, should be considered in conjunction with this management letter. Additionally, our audit was conducted in accordance with the provisions of Chapter 10.550, Rules of the Auditor General, which govern the conduct of local governmental entity audits performed in the State of Florida. We have the following suggestions for improvement in accounting procedures and controls.

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2012 – 2: Employee Timesheets - U.S. Department of Housing and Urban Development: CDBG – Entitlement Grants Cluster (14.218, 14.253); Community Development Block Grant/ State’s Program (14.228) and Florida Housing Finance Corporation: State Housing Initiatives Partnership Program (SHIP – 52.901).

A. CURRENT YEAR FINDINGS AND RECOMMENDATIONS Single Audit Related ML Comments 2012 – 1: Subrecipient Monitoring - U.S. Department of Housing and Urban Development: CDBG – Entitlement Grants Cluster (CFDA Nos. 14.218 and 14.253) and Community Development Block Grant/ State’s Program (CFDA No. 14.228) Observation Ernst & Young notes that the County received a monitoring report on May 21, 2012 over the CDBG grant program from HUD which had findings over the County's subrecipient agreements. The findings were: (1) The agreements did not have the correct number of years required for retention. Some of the agreements had six years and others only had three years, whereas the number of required retention years is four years.

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(2) Some of the specific provisions mentioned in the agreements did not encompass the entire provision as indicated in 24 CFR 570.503. The monitoring report did acknowledge that the agreements do refer to the CDBG regulations at 24 CFR Part 570 as a general basis for compliance with the requirements. However, some of the required provisions as Subpart K were not included. We note that the agreement with Collier County Public Schools contains a retention period of 6 years and only references the 24 CFR Part 570. The agreement with City of Naples contains a retention period of three years and only references the 24 CFR Part 570. The agreement with David Lawrence contains a retention period of three years and only references the 24 CFR Part 570. The agreement with Goodwill Industries contains a retention period of six years and only references the 24 CFR Part 570. And finally, the agreement with Big Cypress contains a retention period of three years and only references the 24 CFR Part 570. Recommendation We recommend that the County revised all aforementioned subrecipients agreements in order to ensure compliance with HUD.

Observation During our testing of payroll-related expenditures, we noted 4 timesheets out of a total of 186 timesheets tested throughout all major federal and state programs (totaling 0.11% of payroll expenditures charged to each program) that were submitted by employees were not properly signed by either the employee or their supervisor. Where the timesheet was missing the signature of the employee, we noted the timesheet had been approved by the employee’s supervisor supporting the charge. Further, OMB Circular A-87, Cost Principles for State, Local and Indian Tribal Governments, requires that time sheets be signed by each employee to support time charged to specific grant programs. Recommendation We recommend that the County put into place necessary procedures to ensure that all timesheets are properly signed (by both the employee and his/her direct supervisor). Management’s Response During FY 2013, the County established a committee to provide assistance to HHVS to formalizing business operations into protocols and written procedures. The payroll process has been identified as a top priority. Human Resource personnel are in attendance to ensure current practices and policies are understood. OMB is in attendance to ensure audit compliance is understood and finding concerns are addressed through proper internal controls. Timesheet signatures were discussed at the 2/07/13 meeting with all pertinent staff to ensure the importance of properly signed timesheets is understood as well as clarify the role each signatory prior to submitting the timesheet for processing. Based on our review of the exceptions, we noted that the impact of these exceptions to each major federal program and state project, individually and in aggregate, was not significant and below our questioned cost threshold.

Management’s Response As part of corrective actions, an updated subrecipient template was developed for CDBG grant programs as outlined in the response to the grantor agency’s review. The template was developed and reviewed with collaboration of the OMB Grants Compliance Office to ensure all current provisions were cited within the agreement. The template is currently in use for all new sub awards. Annually, the template will be reviewed for any changes in HUD provisions as part of the customary funding cycle. Further remedial actions were taken to correct past agreements. On 12/11/12, the Department brought forth eight (8) subrecipient agreement modifications for BCC approval to correctly cite the retention period (Items 16.D.7 and 16.D.9).

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B. STATUS OF PRIOR YEAR RECOMMENDATIONS 2011-1 Grant Compliance Observation During our testing of the County’s various federal and state grant programs, we noted non-compliance over the management of several grant programs in the following areas:

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x

Payroll allocation and processing errors

x

Subrecipient documentation and monitoring

x

Eligibility

x

Treatment of change orders

x

General reporting

x

ARRA Section 1512 reporting

x

Period of availability

This centralization will allow the entire organization to benefit from the substantial grants accounting and compliance expertise that exist within that operation. While responsibilities for grant program management and service delivery will remain with the operating units, the key areas of grant compliance such as cash management, procurement, monitoring, reconciliation, and reporting will be centrally managed and monitored across the agency. OMB will implement this centralized grants management model in several phases over time. The immediate focus is bringing obvious noncompliant activities, such as identified in this Single Audit Report and prior years’ reports back into adherence with grantor requirements. OMB staff will become fully imbedded in the Agency’s day to day administrative grant functions and existing grants accountants serving under the Administrative Services Division will be reassigned to the OMB. These employees will be deployed in key operating units to implement consistent business processes and internal controls and carry out corrective actions. Current Status

Recommendation We recommend enhanced training of employees in grant compliance and more thorough supervisory review of grant transactions, documentation and reporting. We also recommend the County consider implementing a central grant management or grant compliance office of individuals to more effectively monitor grant compliance.

The implementation of centralizing grants management has resulted in improvements over the prior year. Centralized processes continue to be developed and rolled out countywide to Departments with the priority given to those Departments with the greatest need. Need is measured not only by the quantity of noncompliant matters but the severity of noncompliance as well. Collier County continues to move forward to a position of proactive compliance which allows established internal controls in FY 2012 to be strengthened. The progress can be observed in management’s responses whereby a number of noncompliant items were remediated during the year either by independent actions of Department staff working with OMB or by review of Collier’s independent auditors and taking immediate action. In FY2013, OMB will focus on growing a culture of single audit awareness and foster team management of grants compliance between program and fiscal staff in order to promote checks and balances, efficient oversight and ultimately ensure compliance to the greatest extent.

Management’s Response Management concurs with the recommendation of the auditors. In light of continuing audit findings, internal audit review and other actions management was made aware of, the County replaced the prior Director in Housing, Human and Veteran Services (HHVS) with a top management team member in late August 2011 to restructure the entire HHVS Department and implement effective controls, processes and procedures. Realizing that this alone was not enough and wanting to effect changes throughout the entire organization, County Manager, Leo Ochs, submitted a grants reorganization plan to the Board of County Commissioners on January 30, 2012. In effect, all administrative grant compliance functions were centralized at the corporate level under the Office of Management and Budget (OMB).

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C. OTHER REQUIRED COMMUNICATIONS The Rules of the Auditor General, Section 10.554 (1)(i)(1), require that we address in the management letter whether or not corrective actions have been taken to address significant findings and recommendations made in the preceding annual financial audit report. The status of recommendations made in the preceding annual financial audit is included above. In connection with our audit, we noted no instances of noncompliance with Section 218.415, Florida Statutes regarding the investment of public funds. The Rules of the Auditor General, Section 10.554(1)(i)(3), require that we address in a management letter any recommendations to improve Collier County, Florida’s financial management, accounting procedures, and internal controls. Current year recommendations to improve Collier County, Florida’s financial management, accounting procedures, or internal controls are included above.

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The Rules of the Auditor General, Section 10.554(1)(i)(4), require that we address in a management letter any violations of provisions of contracts and grant agreements or abuse that have an effect on the financial statements that is less than material but more than inconsequential. The results of our audit disclosed no violations of provisions or contracts and grant agreement or abuse that would have an effect on the financial statement that is less than material but more than inconsequential. The Rules of the Auditor General, Section 10.554(1)(i)(5), require disclosure in the management letter of the following matters, if not addressed in the auditor’s report on internal control over financial reporting and on compliance and other matters or in the schedule of findings and questioned costs, and are not clearly inconsequential:

The results of our audit disclosed no violations of laws, rules, regulations, and contractual provisions or abuse, no improper or illegal expenditures, and no control deficiencies other than the internal control recommendations included above. The Rules of the Auditor General, Section 10.554(1)(i)(6), also require that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in the management letter, unless disclosed in the notes to the financial statements. In that regard, Collier County, Florida was established under Chapter 107, Section 1, Florida Statutes. The legal authority for Collier County and its component units are discussed in Note 1 to the financial statements. During the course of our audit of the County, nothing came to our attention that would cause us to believe that the County was in a state of financial emergency, as defined by Section 218.503(1), Florida Statutes. As required by the Rules of the Auditor General, Section 10.554(1)(i)(7)(b), the County filed its report pursuant to Section 218.32(l)(a), Florida Statutes. Based on our review of the financial information contained in this report, no material differences were found in comparing this information to that of the basic financial statements. As required by the Rules of the Auditor General, Sections 10.554(1)(i)(7)(c) and 10.556(7), we applied financial condition assessment procedures. It is management’s responsibility to monitor the County’s financial condition, and our financial condition assessment was based in part on representations made by management and the review of financial information provided by same. This report is intended solely for the information and use of the Board of County Commissioners, management and the Auditor General of the State of Florida, and is not intended to be and should not be used by anyone other than these specified parties.

(a) Violations of laws, rules, regulations, and contractual provisions or abuse that have occurred, or are likely to have occurred, would have an immaterial effect on the financial statements, and were discovered within the scope of the audit;



(b) Control deficiencies that are not significant deficiencies, including, but not limited to:

March 6, 2013

(1) Improper or inadequate accounting procedures (e.g., the omission of required disclosures from the annual financial statements); (2) Failures to properly record financial transactions; and (3) Other inaccuracies, shortages, defalcations, and instances of fraud discovered by, or that come to the attention of, the auditor.

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APPENDIX D FORM OF OPINION OF BOND COUNSEL

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APPENDIX D

FORM OF OPINION OF NABORS, GIBLIN & NICKERSON, P.A., WITH RESPECT TO THE SERIES 2013 BONDS Upon delivery of the Series 2013 Bonds in definitive form, Nabors, Giblin & Nickerson, P.A., Tampa, Florida, Bond Counsel, proposes to render its opinion with respect to such Series 2013 Bonds in substantially the following form:

(Date of Delivery)

Board of County Commissioners of Collier County, Florida Naples, Florida Commissioners: We have examined a record of proceedings relating to the issuance of $73,805,000 aggregate principal amount of Collier County, Florida Special Obligation Refunding Revenue Bonds, Series 2013 (the "Series 2013 Bonds"). The Series 2013 Bonds are issued under and pursuant to the Laws of the State of Florida, including particularly, Chapter 125, Florida Statutes, and Resolution No. 2013-70 duly adopted by the Board of County Commissioners of Collier County, Florida (the "County") on March 12, 2013 (the "Resolution"). The Series 2013 Bonds are dated and shall bear interest from their date of delivery, except as otherwise provided in the Resolution. The Series 2013 Bonds will mature on October 1 of each of the years and in the principal amounts, and will bear interest at the rates per annum, as determined in accordance with the Resolution and set forth in the final Official Statement relating to the sale of the Series 2013 Bonds (the "Official Statement"). Interest on the Series 2013 Bonds shall be payable on April 1 and October 1 of each year, commencing October 1, 2013. The Series 2013 Bonds are being issued in the form of fully registered Bonds in denominations of $5,000 principal amount and any integral multiple thereof. The Series 2013 Bonds are subject to redemption as determined in accordance with the Resolution and set forth in the Official Statement. The Series 2013 Bonds are issued for the principal purpose of providing funds to advance refund all of the County's outstanding Collier County, Florida Capital Improvement and Refunding Revenue Bonds, Series 2003 and Collier County, Florida Capital Improvement and Refunding Revenue Bonds, Series 2005 (collectively, the D-1

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(Date of Delivery)

"Refunded Bonds") and pay certain costs and expenses relating to the issuance of the Series 2013 Bonds. Certain proceeds of the Series 2013 Bonds, together with other funds of the City, shall be deposited into an escrow deposit trust fund (the "Escrow Fund") established pursuant to the Escrow Deposit Agreement between the City and Regions Bank, as Escrow Agent, dated as of April 16, 2013, and invested in direct obligations of the United States of America (the "Escrow Securities"), such that the maturing principal of and interest on said obligations shall be sufficient to pay the principal of, redemption premium, if any, and interest on the Refunded Bonds, as the same become due or are redeemed prior to maturity. As to questions of fact material to our opinion, we have relied upon the representations of the County contained in the Resolution and in the certified proceedings relating thereto and to the issuance of the Series 2013 Bonds and other certifications of public officials furnished to us in connection therewith without undertaking to verify the same by independent investigation. Based upon the foregoing, we are of the opinion that: 1. The County is a duly created and validly existing political subdivision of the State of Florida. 2. The County has the right and power under the Constitution and Laws of the State of Florida to adopt the Resolution, and the Resolution has been duly and lawfully adopted by the County, is in full force and effect in accordance with its terms and is valid and binding upon the County and enforceable in accordance with its terms, and no other authorization for the Resolution is required. 3. The County is duly authorized and entitled to issue the Series 2013 Bonds and the Series 2013 Bonds have been duly and validly authorized and issued by the County in accordance with the Constitution and Laws of the State of Florida and the Resolution. The Series 2013 Bonds constitute valid and binding obligations of the County as provided in the Resolution, are enforceable in accordance with their terms and the terms of the Resolution and are entitled to the benefits of the Resolution and the laws pursuant to which they are issued. The Series 2013 Bonds do not constitute general D-2

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indebtedness of the County or the State of Florida or any agency, department or political subdivision thereof, or a pledge of the faith and credit of such entities, but are payable from the Non-Ad Valorem Revenues (as defined in the Resolution) in the manner and to the extent provided in the Resolution. No holder of the Series 2013 Bonds shall ever have the right to compel the exercise of any ad valorem taxing power of the County or the State of Florida or any political subdivision, agency or department thereof to pay the Series 2013 Bonds. 4. The County has covenanted and agreed in the Resolution to appropriate in its annual budget for each Fiscal Year (as defined in the Resolution) in which any amount due under the Resolution or with respect to the Series 2013 Bonds remains unpaid or outstanding, by amendment, if necessary, from Non-Ad Valorem Revenues amounts sufficient to pay principal of and interest on the Series 2013 Bonds when due. Such covenant and agreement on the part of the County to budget and appropriate such amounts of Non-Ad Valorem Revenues shall be cumulative to the extent not paid and shall continue until such Non-Ad Valorem Revenues or other legally available funds in amounts sufficient to make all such required payments shall have been budgeted, appropriated and actually paid. Notwithstanding the foregoing covenant of the County, the County does not covenant to maintain any services or programs, now provided or maintained by the County, which generate Non-Ad Valorem Revenues. Such covenant to budget and appropriate does not create any lien upon or pledge of such Non-Ad Valorem Revenues, nor does it preclude the County from pledging in the future any of its Non-Ad Valorem Revenues, nor does it require the County to levy and collect any particular Non-Ad Valorem Revenues, nor does it give the holders of the Series 2013 Bonds a prior claim on the Non-Ad Valorem Revenues as opposed to claims of general creditors of the County. Such covenant to appropriate Non-Ad Valorem Revenues is subject in all respects to the payment of obligations secured by a pledge of such Non-Ad Valorem Revenues heretofore or hereafter entered into (including the payment of debt service on bonds and other debt instruments). However, the covenant to budget and appropriate for the purposes and in the manner stated in the Resolution shall have the effect of making available for the payment of the Series 2013 Bonds, in the manner described in the Resolution, Non-Ad Valorem Revenues and placing on the D-3

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(Date of Delivery)

County a positive duty to appropriate and budget, by amendment, if necessary, amounts sufficient to meet its obligations under the Resolution; subject, however, in all respects to the restrictions of Section 129.07, Florida Statutes, which generally provide that the governing body of each county may only make appropriations for each fiscal year which, in any one year, shall not exceed the amount to be received from taxation or other revenue sources; and subject, further, to the payment of services and programs which are for essential public purposes affecting the health, safety and welfare of the inhabitants of the County or which are legally mandated by applicable law. 5. Under existing statutes, regulations, rulings and court decisions, the interest on the Series 2013 Bonds (a) is excluded from gross income for federal income tax purposes and (b) is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, it should be noted that with respect to certain corporations, such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax. The opinions set forth in this paragraph 5 are subject to the condition that the County comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Series 2013 Bonds in order that interest thereon be (or continues to be) excluded from gross income for federal income tax purposes. Failure to comply with certain of such requirements could cause the interest on the Series 2013 Bonds to be so included in gross income retroactive to the date of issuance of the Series 2013 Bonds. The County has covenanted to comply with all such requirements. Ownership of the Series 2013 Bonds may result in collateral federal tax consequences to certain taxpayers. We express no opinion regarding such federal tax consequences arising with respect to the Series 2013 Bonds. It should be noted that (1) except as may expressly be set forth in an opinion delivered by us to the underwriters for the Series 2013 Bonds (on which opinion only they may rely) on the date hereof, we have not been engaged or undertaken to review the accuracy, completeness or sufficiency of the Official Statement for the Series 2013 Bonds, as supplemented, or other offering material relating to the Series 2013 Bonds and we express no opinion relating thereto, and (2) we have not been engaged or undertaken

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to review the compliance with any federal or state law with regard to the sale or distribution of the Series 2013 Bonds and we express no opinion relating thereto. In rendering the opinions set forth above, we are relying upon (a) the arithmetical accuracy of certain computations included in schedules provided by Public Financial Management, Inc., relating to the computations of projected receipts of the Escrow Securities and any other amounts deposited in the Escrow Fund, of the adequacy of such projected receipts and other amounts to pay the principal of, redemption premium, if any, and interest on the Refunded Bonds, and of the yield on the Series 2013 Bonds and on the Escrow Securities, and (b) the verifications of arithmetical accuracy of such computations by Causey Demgen & Moore P.C. The opinions expressed in paragraphs 2 and 3 hereof are qualified to the extent that the enforceability of the Resolution and the Series 2013 Bonds may be limited by any applicable bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting creditors' rights generally, or by the exercise of judicial discretion in accordance with general principles of equity. This opinion is given as of the date hereof and we assume no obligation to update, revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. We have examined the form of the Series 2013 Bonds and, in our opinion, the form of the Series 2013 Bonds is regular and proper. Respectfully submitted,

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APPENDIX E FORM OF CONTINUING DISCLOSURE CERTIFICATE

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FORM OF CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by Collier County, Florida (the "Issuer") in connection with the issuance of its $73,805,000 Special Obligation Refunding Revenue Bonds, Series 2013 (the "Bonds"). The Bonds are being issued pursuant to Resolution No. 2013-70 adopted by the Board of County Commissioners of the Issuer on March 12, 2013, as amended and supplemented from time to time (the "Resolution"). SECTION 1. PURPOSE OF THE DISCLOSURE CERTIFICATE. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the holders and Beneficial Owners (defined below) of the Bonds and in order to assist the Participating Underwriters in complying with the continuing disclosure requirements of the Rule (defined below). SECTION 2. DEFINITIONS. In addition to the definitions set forth in the Resolution which apply to any capitalized term used in this Disclosure Certificate, unless otherwise defined herein, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any Annual Report provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. "Dissemination Agent" shall mean the Issuer, or any successor Dissemination Agent designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation. "EMMA" shall mean the Electronic Municipal Market Access web portal of the MSRB, located at http://www.emma.msrb.org. "Event of Bankruptcy" shall be considered to have occurred when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an Obligated Person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Obligated Person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Obligated Person. "Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Certificate. "MSRB" shall mean the Municipal Securities Rulemaking Board. "Obligated Person" shall mean any person, including the Issuer, who is either generally or through an enterprise, fund, or account of such person committed by contract or other arrangement to

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support payment of all, or part of the obligations on the Bonds (other than providers of municipal bond insurance, letters of credit, or other liquidity or credit facilities). "Participating Underwriters" shall mean the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. "Repository" shall mean each entity authorized and approved by the Securities and Exchange Commission from time to time to act as a repository for purposes of complying with the Rule. As of the date hereof, the Repository recognized by the Securities and Exchange Commission for such purpose is the MSRB, which currently accepts continuing disclosure submissions through EMMA. "Rule" shall mean the continuing disclosure requirements of Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "State" shall mean the State of Florida. SECTION 3. PROVISION OF ANNUAL REPORTS. (a) The Issuer shall, or shall cause the Dissemination Agent to, by not later than April 30 following the end of the Issuer's fiscal year, beginning with the fiscal year ending September 30, 2012 with respect to the report for the 2011-2012 fiscal year, provide to any Repository in electronic format as prescribed by such Repository an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date provided, further, in such event unaudited financial statements are required to be delivered as part of the Annual Report in accordance with Section 4(a) below. If the Issuer's fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5. th

(b) Not later than fifteen (15) Business Days prior to the date set forth in (a) above, the Issuer shall provide the Annual Report to the Dissemination Agent (if other than the Issuer). If the Issuer is unable to provide to any Repository an Annual Report as required in subsection (a), the Issuer (or the Dissemination Agent, if other than the Issuer) shall send a notice to any Repository, in electronic format as prescribed by such Repository in substantially the form attached as Exhibit A. (c)

The Dissemination Agent shall:

(i) determine each year prior to the date for providing the Annual Report the name and address of any Repository; and (ii) if the Dissemination Agent is other than the Issuer, file a report with the Issuer certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, stating the date it was provided and listing any Repository to which it was provided.

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SECTION 4. CONTENT OF ANNUAL REPORTS. The Issuer's Annual Report shall contain or include by reference the following: (a) the audited financial statements of the Issuer for the prior fiscal year, prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the Issuer's audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement dated March 26, 2013 (the "Official Statement"), and the audited financial statements shall be filed in the same manner as the Annual Report when they become available; and (b) updates of the historical financial and operating data set forth in the Official Statement under the captions: (i) Historical Non-Ad Valorem Revenues in General Fund and Unincorporated Area Municipal Services Taxing District Fund; (ii) Other Obligations Payable From Non-Ad Valorem Revenues; (iii) Combined General Fund And MSTD Revenues, Expenditures And Fund Balance; and (iv) Schedule of County Contributions to the Florida Retirement System. The information provided under Section 4(b) may be included by specific reference to documents, including official statements of debt issues of the Issuer or related public entities, which are available to the public on the Repository's Internet Web site or filed with the Securities and Exchange Commission. The Issuer reserves the right to modify from time to time the specific types of information provided in its Annual Report or the format of the presentation of such information, to the extent necessary or appropriate in the judgment of the Issuer; provided that the Issuer agrees that any such modification will be done in a manner consistent with the Rule. SECTION 5. REPORTING OF SIGNIFICANT EVENTS. (a) Pursuant to the provisions of this Section 5, the Issuer shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds. Such notice shall be given in a timely manner not in excess of ten (10) business days after the occurrence of the event, with the exception of the event described in number 15 below, which notice shall be given in a timely manner: 1.

principal and interest payment delinquencies;

2.

non-payment related defaults, if material;

3.

unscheduled draws on debt service reserves reflecting financial difficulties;

4.

unscheduled draws on credit enhancements reflecting financial difficulties;

5.

substitution of credit or liquidity providers, or their failure to perform;

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6.

adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds;

7.

modifications to rights of the holders of the Bonds, if material;

8.

Bond calls, if material, and tender offers;

9.

defeasances;

10.

release, substitution, or sale of property securing repayment of the Bonds, if material;

11.

ratings changes;

12.

an Event of Bankruptcy or similar event of an Obligated Person;

13.

the consummation of a merger, consolidation, or acquisition involving an Obligated Person or the sale of all or substantially all of the assets of the Obligated Person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material;

14.

appointment of a successor or additional trustee or the change of name of a trustee, if material; and

15.

notice of any failure on the part of the Issuer to meet the requirements of Section 3 hereof.

(b) The notice required to be given in paragraph 5(a) above shall be filed with any Repository, in electronic format as prescribed by such Repository. SECTION 6. IDENTIFYING INFORMATION. In accordance with the Rule, all disclosure filings submitted in pursuant to this Disclosure Certificate to any Repository must be accompanied by identifying information as prescribed by the Repository. Such information may include, but not be limited to: (a) (b) (c)

(d) (e) (f)

the category of information being provided; the period covered by any annual financial information, financial statement or other financial information or operation data; the issues or specific securities to which such documents are related (including CUSIPs, issuer name, state, issue description/securities name, dated date, maturity date, and/or coupon rate); the name of any Obligated Person other than the Issuer; the name and date of the document being submitted; and contact information for the submitter.

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SECTION 7. TERMINATION OF REPORTING OBLIGATION. The Issuer's obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds, so long as there is no remaining liability of the Issuer, or if the Rule is repealed or no longer in effect. If such termination occurs prior to the final maturity of the Bonds, the Issuer shall give notice of such termination in the same manner as for a Listed Event under Section 5. SECTION 8. DISSEMINATION AGENT. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to this Disclosure Certificate. The initial Dissemination Agent shall be the Issuer. SECTION 9. AMENDMENT; WAIVER. Notwithstanding any other provision of this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied: (a) If the amendment or waiver relates to the provisions of Sections 3(a), 4, or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of the Issuer, or the type of business conducted; (b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) The amendment or waiver either (i) is approved by the holders or Beneficial Owners of the Bonds in the same manner as provided in the Resolution for amendments to the Resolution with the consent of holders or Beneficial Owners, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or Beneficial Owners of the Bonds. Notwithstanding the foregoing, the Issuer shall have the right to adopt amendments to this Disclosure Certificate necessary to comply with modifications to and interpretations of the provisions of the Rule as announced by the Securities and Exchange Commission from time to time. In the event of any amendment or waiver of a provision of this Disclosure Certificate, the Issuer shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5, and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.

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SECTION 10. ADDITIONAL INFORMATION. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have no obligation under this Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. SECTION 11. DEFAULT. The continuing disclosure obligations of the Issuer set forth herein constitute a contract with the holders of the Bonds. In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate, any holder or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer to comply with its obligations under this Disclosure Certificate; provided, however, the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with the provisions of this Disclosure Certificate shall be an action to compel performance. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Resolution. SECTION 12. DUTIES, IMMUNITIES AND LIABILITIES OF DISSEMINATION AGENT. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.

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SECTION 13. BENEFICIARIES. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriters and holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity.

Dated as of April 16, 2013 COLLIER COUNTY, FLORIDA

By: Chairwoman, of the Board of County Commissioners Approved as to Form and Legal Sufficiency:

County Attorney

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EXHIBIT A NOTICE OF FAILURE TO FILE ANNUAL REPORT

Name of Issuer:

Collier County, Florida

Name of Bond Issue:

Special Obligation Refunding Revenue Bonds, Series 2013

Date of Issuance:

April 16, 2013

NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect to the above-named Bonds as required by Sections 3 and 4(b) of the Continuing Disclosure Certificate dated as of April 16, 2013. The Issuer anticipates that the Annual Report will be filed by _______________ ____________________________. Dated:__________________ COLLIER COUNTY, FLORIDA

By: Name: Title:

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COLLIER COUNTY, FLORIDA • Special Obligation Refunding Revenue Bonds, Series 2013