HomeMy WebLinkAbout2025 Financial Statements CLAY COUNTY UTILITY AUTHORITY
FINANCIAL STATEMENTS
SEPTEMBER 30,2025 AND 2024
CLAY COUNTY UTILITY AUTHORITY
FINANCIAL STATEMENTS
SEPTEMBER 30,2025 AND 2024
TABLE OF CONTENTS
Page
Number(s)
Independent Auditors' Report 1 — 3
Management's Discussion and Analysis 4— 8
Basic Financial Statements
Statements of Net Position 9
Statements of Revenues,Expenses, and Changes in Net Position 10
Statements of Cash Flows 11
Notes to Financial Statements 12—21
Independent Auditors' Report on Internal Control Over Financial Reporting and
on Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards 22—23
Independent Auditors' Management Letter Required by Chapter 10.550, Rules of
the State of Florida Office of the Auditor General 24—26
Independent Accountants' Examination Report 27
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JAMESMOORE
INDEPENDENT AUDITORS' REPORT
To the Board of Supervisors,
Clay County Utility Authority:
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of the Clay County Utility Authority (the Authority), as of and
for the years ended September 30, 2025 and 2024, and the related notes to the financial statements,which
collectively comprise the Authority's basic financial statements as listed in the table of contents.
In our opinion, the accompanying financial statements present fairly,in all material respects,the financial
position of the Authority as of September 30, 2025 and 2024, and the changes in financial position and its
cash flows for the years then ended in accordance with accounting principles generally accepted in the
United States of America.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of
America (GAAS) and the standards applicable to financial audits contained in Government Auditing
Standards (GAS), issued by the Comptroller General of the United States. Our responsibilities under
those standards are further described in the Auditors' Responsibilities for the Audit of the Financial
Statements section of our report. We are required to be independent of the Authority and to meet our
other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America, and for the
design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, management is required to evaluate whether there are conditions or
events, considered in the aggregate, that raise substantial doubt about the Authority's ability to continue
as a going concern for twelve months beyond the financial statement issuance date, including any
currently known information that may raise substantial doubt shortly thereafter.
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Auditors'Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditors' report that
includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and
therefore is not a guarantee that an audit conducted in accordance with GAAS and GAS will always
detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control. Misstatements are considered material
if, individually or in the aggregate, they would influence the judgment made by a reasonable user based
on the financial statements.
In performing an audit in accordance with GAAS and GAS,we:
o Exercise professional judgment and maintain professional skepticism throughout the audit.
o Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such
procedures include examining, on a test basis, evidence regarding the amounts and disclosures in
the financial statements.
o Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Authority's internal control. Accordingly, no such opinion is
expressed.
o Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
o Conclude whether, in our judgment, there are conditions or events, considered in the aggregate,
that raise substantial doubt about the Authority's ability to continue as a going concern for a
reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters,the
planned scope and timing of the audit, significant audit findings, and certain internal control—related
matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis, as listed in the table contents, be presented to supplement the basic financial
statements. Such information is the responsibility of management, and although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board,who considers it to be
an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the United States
of America, which consisted of inquiries of management about the methods of preparing the information
and comparing the information for consistency with management's responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic financial statements.
We do not express an opinion or provide any assurance on the information because the limited procedures
do not provide us with sufficient evidence to express an opinion or provide any assurance.
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Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 15,
2025, on our consideration of the Authority'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 solely 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
effectiveness of the Authority's internal control over financial reporting or on compliance. That report is
an integral part of an audit performed in accordance with Government Auditing Standards in considering
the Authority's internal control over financial reporting and compliance.
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Daytona Beach,Florida
December 15,2025
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Clay County Utility Authority
Management's Discussion and Analysis
Managerial Philosophy and Strategic Objectives
The senior management team of the Clay County Utility Authority(the Authority)offers interested parties additional
insight, a strategic perspective and further analysis of key operational factors that may help the reader gain a deeper
understanding of the financial statements for the year ended September 30,2025.
The Authority is an Independent Special District in the State of Florida.The Florida Legislature created the Authority
on October 1, 1994, by special act (F.S. 94-491) to manage the water, wastewater, and reclaimed water systems in
the unincorporated areas of Clay County,Florida. The Authority also serves adjacent jurisdictions per specific inter-
local governmental agreements. The Authority serves customers in Clay, Duval, and Bradford Counties and uses
proprietary fund accounting to report the Authority's financial position.
The Authority operates, to the extent possible as a publicly owned utility, using sound business practices of private
enterprise. We accept the responsibility of providing our customers with the best long-term value at the lowest
reasonable cost.
We recognize the Authority provides essential services that are central to public health, safety, and general welfare
as well as essential to the quality of life for the communities we serve. We understand our responsibilities as good
stewards of our water,environmental,and financial resources.The communities we serve depend on environmentally
and economically sustainable water supplies.
The Authority completed work on the Consumptive Use Permit (CUP) renewal with the St. Johns River Water
Management District(SJRWMD)in May 2025.The CUP regulates the water supply allocation used by the Authority
to provide potable water services to our customers. We received a CUP with an initial five (5) year term and an
addition fifteen (15) year term upon the execution of a Memorandum of Understanding (MOU) with agencies
participating in a regional capital infrastructure project to address regional environmental and water resource
restraints. The total term of twenty(20)years along with the 22.7 Million Gallons Per Day(MGD)remains consistent
with the Integrated Water Resource Planning(IWRP).
The Authority completed the construction of several key capital projects aimed at serving the area west and south of
Green Cove Springs. The Authority accepted the Peters Creek Water Reclamation Facility and the Governors Park
Facility in 2025.These two(2)facilities represent over$80 million dollar investment by the Authority.Both facilities
are essential to providing water,wastewater, and reclaimed water services to the future homes and businesses in the
Lake Asbury and Governors Park areas.
The Authority continues to advance projects within the Lake Asbury Master Planning Area(LAMPA) Policy. This
policy enables the Authority to pioneer specific large diameter trunk main projects to serve growth and development
within the county's adopted LAMPA.The LAMPA Policy enables the Authority to invest roughly$30 million dollars
in large diameter trunk main infrastructure,while also providing the cost recovery mechanism for said infrastructure.
The first project within the LAMPA Policy began construction in 2024 and is now complete. The large diameter
trunk main projects within Saratoga Springs are currently under construction. The Authority is nearly complete with
the design and permitting of the final segment of the LAMPA policy project.We are currently anticipating completion
of the final LAMPA policy project in the next twelve (12)to twenty-four(24)months.
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The Florida Department of Transportation completed the First Coast Expressway in 2025. Clay County completed
bonded roadway projects such as Cathedral Oaks Parkway in Lake Asbury. The completion of these key roadway
infrastructure projects along with the Authority's facilities and infrastructure mean the area is ready for a period of
rapid customer account growth. The Authority's readiness for a period of rapid customer account growth is further
supported by the Master Utility Agreements for both Saratoga Springs and Governors Park.
With the completion of the Authority's system expansion of facilities and large trunk main infrastructure, the
Authority began a shift in focus of the Capital Improvement Program(CIP)to renewal and replacement projects. The
Authority initiated renewal and replacement of infrastructure projects related to some of the oldest facilities. The
Authority began the construction to update or replace ground storage tanks, aerators, and high service pumps at the
Meadowbrook Water Treatment Plant. The Authority also commenced the effort to replace the headworks and
electrical controls at the Miller Street Water Reclamation Facility. The Authority bolstered the renewal and
replacement of infrastructure efforts with the completion of an engineering condition assessment to support the
prioritization of CIP projects.
Financial Overview
This discussion and analysis serve as an introduction to the Authority's basic financial statements. The information
presented here should be read in conjunction with the financial statements and accompanying notes.
The Authority's Board of Supervisors approved a 6.5% revenue increase from base and flow charges for potable
water and reclaimed water services and a 7% increase for base and flow charges for wastewater services for Fiscal
Year 2024/2025. The Authority kept the volume provided in each block consistent with previous fiscal years. The
Authority realized revenue within 1.7%of the forecast.
The Authority gained 1,143 active water accounts and 1,129 active sewer accounts, which was less than the 1,440
new accounts budgeted as growth in the county was lower than expected.
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Condensed Statement of Net Position ($000)
For the Year Ended September 30,2025
% %
2025 2024 Change 2023 Change
Capital assets—net 566,836 517,510 9.5 411,537 25.8
Current assets 23,568 27,620 (14.7) 26,117 5.8
Investments,current 0 0 - 0 -
Other non-current assets 32,931 11,609 183.7 8,708 33.3
Investments,non-current 21,007 57,562 (63.5) 101,036 (43.0)
Deferred outflow of Resources 1,106 1,292 (14.4) 1,481 (12.8)
Totals 645,448 615,593 4.8 548,879 12.2
Liabilities and fund equity
Net position 455,428 407,236 11.8 369,224 10.3
Long-term liabilities,net 165,603 176,517 (6.2) 152,224 16.0
Current liabilities, including restricted 24,417 31,840 (23.3) 27,431 16.1
Totals 645,448 615,593 4.8 548,879 12.2
Capital Assets-Net
Net Capital assets increased $49,327,000 during Fiscal Year 2024/2025. The increase is mainly attributed to
$67,643,000 of various utility expansions and dispositions, offset by $18,727,000 of depreciation and amortization
expense. Developers contributed$31,808,000 of those assets.
For the year 2024,capital assets increased$105,973,000.The increase is mainly attributed to$121,980,000 of various
utility expansions and dispositions, offset by $16,221,000 of depreciation and amortization expense. Developers
contributed$23,559,000 of those assets.
Current Assets
The change in current assets is due to the decrease in cash. Cash from surplus funds was used to fund capital projects
which caused operating cash to decrease during the year.
Net Position
The net position can serve as a useful indicator of our financial position, with an increase of$48,192,000. The net
investment in capital assets, the largest portion of the Authority's net position, 89%, reflects the net investment in
capital assets(e.g.,land,buildings, equipment, infrastructure, and intangible assets). These assets are used to provide
services to customers; consequently, these assets are not available for future spending. The restricted portion of the
net position,2.6%,is capacity charges that are subject to capital improvements. Developer and other contributions of
$45,313,000 were received in Fiscal Year 2024/2025, approximately $13,505,000 of which was cash. The
unrestricted portion, 9%, decreased 30% due to use of surplus funds to fund capital projects. Net income is an
unrestricted reserve used for future capital funding.
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Long-Term Debt-Net
In Fiscal Year 2024/2025,the net long-term debt decreased$10,914,000 as a result of scheduled principal repayments
of existing debt.
Current Liabilities
Current liabilities decreased$7,423,000, due to the timing of Accounts Payable invoices due at year-end.
Condensed Statement of Revenues,Expenses,and Changes in Net Position($000)
For the Year Ended September 30,2025 _
% %
2025 2024 Change 2023 Change
Operating revenues 71,460 65,525 9.1 59,890 9.4
Operating expenses (64,175) (60,032) 6.9 (54,568) 10.0
Operating income 7,285 5,493 32.6 5,322 3.2
Non-operating(expenses),net (4,404) (2,877) 53.1 (1,209) 138.0
Contributions and grants 45,312 35,396 28.0 40,707 (13.0)
Increase in Net Position 48,193 38,012 26.8 44,820 (15.2)
Operating Revenues
Operating revenue was within 1.7%of management projections.Operating revenue is 50%fixed through base charges
and 50%is variable through usage charges. Consequently, climatic conditions such as rainfall and temperature will
cause revenue fluctuations.
Operating Expenses
The increase of$4,143,000 in operating expenses in 2025 is largely due to$1,585,000 increase in wages and related
benefits, and depreciation and amortization expense increased$2,506,000.
The increase of$5,464,000 in operating expenses in 2024, was largely due to $2,323,000 increase in wages and
related benefits and depreciation expense increased$2,403,000.
Non-Operating Revenue and Expenses
The increase of$1,792,000 in non-operating revenue and expenses is due to a decrease of$1,137,000 in interest
income, an increase of$530,000 in interest expense, a $62,000 increase in gain on sale of assets and a $77,000
decrease in debt issuance costs.
During Fiscal Year 2023/2024, increase of$1,668,000 in non-operating revenue and expenses is due to an increase
of$940,000 in interest income, an increase of$2,625,000 in interest expense, a$47,000 decrease in gain on sale of
assets and a$64,000 decrease in debt issuance costs.
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Contributions in Aid of Construction
Developers and others are required to contribute property (water, wastewater, and reclaimed water lines) in their
developments and cash for their proportional share of existing water,wastewater, and reclaimed water plant capacity
to connect to the Authority's systems. Contributed property was $23,559,000 in 2024, compared to $27,103,000 in
2023. Cash contributions totaled $11,837,000 in 2024, of which $591,000 was grant money compared to cash
contributions of$13,609,000, of which $2,441,000 was grant money in 2023. Additionally, the Authority began
deferring capacity charges for developers in 2016.
Economic Factors and Next Year's Rate
While the Authority's growth in new customer accounts remains consistent with long-term averages, Management
remains confident the catalysts for a period of rapid customer growth remain. As previously discussed,the FDOT's
First Coast Expressway and key Clay County bonded roadway projects are complete. The Authority's facilities to
serve areas of customer account growth are operational and ready to serve. The Authority possesses Master Utility
Agreements and Developer Agreements that account for thousands of new homes and many new businesses in Clay
County.
The Authority's Management considers current home pricing and interest rates a key factor in growth in Clay County.
As new home inventories are built in advance of buyers, we look for home prices to decrease. We also consider
potential downward movements in home mortgage interest rates a key element to spur new account growth. Should
these factors move in the right direction,the Authority is ready to serve these homes and businesses.
The Authority's Management engaged the professional experts with Raftelis to complete additional work on the
Authority's rate structure. The Authority will complete this work in the upcoming fiscal year. The work with Raftelis
will inform future rate considerations.
Request for Information
The Authority's staff designed this financial report to provide a general overview of the Authority's finances. Please
address questions concerning with any of the information provided in this report or requests for additional financial
information to Karen Osborne, CPA,MBA Chief Financial Officer, 3176 Old Jennings Road, Middleburg,Florida,
32068.
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CLAY COUNTY UTILITY AUTHORITY
STATEMENTS OF NET POSITION
SEPTEMBER 30,2025 AND 2024
2025 2024
ASSETS
Current assets
Cash and cash equivalents $ 18,083,191 $ 20,801,246
Restricted cash and cash equivalents 5,161,762 9,879,785
Investments 21,006,624 36,824,170
Accounts receivable,net 6,510,643 6,809,951
Prepaid items and inventory 2,471,474 1,453,655
Total current assets 53,233,694 75,768,807
Non-current assets
Restricted cash and cash equivalents 23,968,788 -
Restricted investments - 20,737,853
Notes receivable 303,436 284,464
Utility plants 646,651,327 586,052,013
Construction in process 145,769,227 138,905,488
Right to use-subscription assets 6,778,764 6,778,764
Accumulated depreciation and amortization (232,363,962) (214,226,418)
Total non-current assets 591,107,580 538,532,164
Total Assets $644,341,274 $614,300,971
DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on bond refunding $ 1,106,465 $ 1,292,002
LIABILITIES
Current liabilities
Accounts and retainage payable $ 2,254,610 $ 4,281,555
Accrued expenses 1,457,706 1,419,434
Customer deposits 4,627,897 4,508,903
Liabilities payable from current restricted assets:
Accounts and retainage payable 2,786,405 11,388,781
Interest payable 2,375,357 2,364,291
Current portion of long-term debt 10,191,544 7,209,488
Current portion of subscription payables 722,239 667,785
Total current liabilities 24,415,758 31,840,237
Non-current liabilities
Non-current portion of long-term debt 164,823,427 175,014,969
Non-current portion of subscription payables 780,069 1,502,308
Total non-current liabilities 165,603,496 176,517,277
Total Liabilities $ 190,019,254 $208,357,514
NET POSITION
Net investment in capital assets $403,610,663 $343,756,371
Restricted for:
Capital projects 7,217,311 3,061,092
Debt service 4,565,356 3,078,334
Unrestricted 40,035,155 57,339,662
Total Net Position $455,428,485 $407,235,459
The accompanying notes to financial statements are an integral part of these statements.
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CLAY COUNTY UTILITY AUTHORITY
STATEMENTS OF REVENUES,EXPENSES,AND CHANGES IN NET POSITION
FOR THE YEARS ENDED SEPTEMBER 30, 2025 AND 2024
2025 2024
Operating revenues
Charges for services $ 69,101,228 $ 63,429,906
Miscellaneous revenues 2,358,304 2,095,153
Total operating revenues 71,459,532 65,525,059
Operating expenses
Wages and related benefits 22,251,531 20,666,140
Operating expenses 13,793,118 14,222,792
Subcontractors 6,291,278 6,063,265
Payment to other governments in lieu of taxes 3,112,467 2,859,139
Depreciation and amortization expense 18,726,908 16,220,865
Total operating expenses 64,175,302 60,032,201
Operating income 7,284,230 5,492,858
Nonoperating revenues(expenses)
Interest income 1,468,728 2,605,742
Interest expense (5,982,849) (5,453,131)
Gain(loss)on sale of assets 110,327 47,910
Debt issuance costs - (77,300)
Total nonoperating revenues(expenses) (4,403,794) (2,876,779)
Income(loss)before capital contributions 2,880,436 2,616,079
Capital contributions and grants
Developer and other contributions 44,898,308 34,805,283
Capital grants 414,282 590,573
Total capital contributions 45,312,590 35,395,856
Change in net position 48,193,026 38,011,935
Net position,beginning of year 407,235,459 369,223,524
Net position,end of year $455,428,485 $407,235,459
The accompanying notes to financial statements are an integral part of these statements.
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CLAY COUNTY UTILITY AUTHORITY
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30,2025 AND 2024
2025 2024
Cash flows from operating activities
Receipts from customers $ 71,858,862 $ 63,553,171
Payments to suppliers (23,129,160) (19,481,893)
Payment in lieu of taxes (3,112,467) (2,859,139)
Payments to employees (22,213,259) (20,547,094)
Net cash provided by(used in)operating activities 23,403,976 20,665,045
Cash flows from capital and related financing activities
Proceeds from issuance of bonds and loans - 30,000,000
Debt issuance costs - (77,300)
Principal paid on long-term debt and subscription payables (7,877,271) (4,889,285)
Interest paid on long-term debt and subscription payables (5,786,246) (4,349,927)
Payments to acquire and construct plant property (44,736,091) (96,944,617)
Capital contributions 13,089,933 11,246,705
Capital grants 414,282 590,573
Net cash provided by(used in)capital and related financing activities (44,895,393) (64,423,851)
Cash flows from investing activities
Purchases of investments (21,006,624) (36,824,170)
Sales of investments 57,562,023 80,608,700
Interest income 1,468,728 2,605,742
Net cash provided by(used in)investing activities 38,024,127 46,390,272
Net increase(decrease)in cash and cash equivalents 16,532,710 2,631,466
Cash and cash equivalents,beginning of year 30,681,031 28,049,565
Cash and cash equivalents,end of year $ 47,213,741 $ 30,681,031
Cash and cash equivalents classified as:
Unrestricted $ 18,083,191 $ 20,801,246
Restricted 29,130,550 9,879,785
Total cash and cash equivalents $ 47,213,741 $ 30,681,031
Reconciliation of operating income to net cash provided by(used in)operating activities
Cash flows from operating activities
Operating income $ 7,284,230 $ 5,492,858
Adjustments to reconcile operating income to net
cash provided by(used in)operating activities:
Depreciation and amortization expense 18,726,908 16,220,865
Changes in assets and liabilities
Decrease(Increase)in accounts and notes receivable 280,336 (1,973,561)
Decrease(Increase)in prepaid items and inventory (1,017,819) (108,996)
Increase(Decrease)in accounts and retainage payable (2,026,945) 913,160
Increase(Decrease)in accrued expenses 38,272 119,046
Increase(Decrease)in unearned revenue - (444,785)
Increase(Decrease)in customer deposits 118,994 446,458
Total adjustments 16,119,746 15,172,187
Net cash provided by(used in)operating activities $ 23,403,976 $ 20,665,045
Supplemental schedule of noncash investing,capital,and financing activities
Deferred loss on refunding amortization $ 185,537 $ 189,046
Utility plant property contributed by developers 31,808,375 23,558,578
The accompanying notes to financial statements are an integral part of these statements.
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CLAY COUNTY UTILITY AUTHORITY
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30,2025 AND 2024
(1) Summary of Significant Accounting Policies:
The accounting policies of the Clay County Utility Authority (the Authority) conform to generally
accepted accounting principles applicable to governmental units. The following is a summary of
significant policies.
(a) Reporting entity The Authority is an independent special district established on October 1,
1994, pursuant to Chapter 94-491, Laws of Florida (1994), to provide Clay County, Florida and
other territorial limits near the County with certain publicly owned water,wastewater and reclaimed
water facilities. The governing body of the Authority consists of seven members acting as the Board
of Supervisors. The Authority has adopted Governmental Accounting Standards Board (GASB)
Codification and has determined that there are no component units that meet the criteria for
inclusion in the Authority's financial statements.
(b) Measurement focus, basis of accounting, and financial statement presentation—The
accounts of the Authority are organized and reported as a proprietary fund type Enterprise Fund.
The operations of this fund are accounted for with a set of self-balancing accounts that comprise its
assets, liabilities, net assets, revenues and expenses. Enterprise Funds are used to account for
operations that are financed and operated in a manner similar to private business enterprises where
the intent of the governing body is that the costs (expenses, including depreciation) of providing
goods or services to the general public on a continuing basis are financed or recovered primarily
through user charges.
The principal operating revenues of the Authority are charges for water, wastewater, and reclaimed
water services, and operating expenses include the cost of sales and services, administrative
expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition
are reported as non-operating revenues and expenses.
Basis of accounting refers to when revenues and 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 Authority uses the accrual basis of
accounting in accordance with the GASB Codification. Revenues are recognized when earned and
measurable, and expenses are recognized when incurred.
(c) Cash and cash equivalents—Cash and cash equivalents consists of cash on hand, demand
deposits, and short-term investments with original maturities of three months or less from the date
of acquisition.
(d) Investments—Investments with a maturity of less than one year when purchased, non-
negotiable certificates of deposit, and other nonparticipating investments are stated at cost or
amortized cost. Investments with a maturity greater than one year when purchased and all
investments of the pension and OPEB trust funds are stated at fair value. Fair value is the price that
would be received to sell an investment in an orderly transaction at year end.
(e) Accounts receivable—The Authority's accounts receivable consists of amounts due from
consumers. The Authority performs account evaluations on their consumers and requires collateral
deposits.
(f) Inventories and prepaid items—The cost of inventory is accounted for on the consumption
basis wherein inventories are charged as expenditures when used, rather than when purchased. All
inventories are valued at cost. Certain payments to vendors reflect costs applicable to future
accounting periods and are recorded as prepaid items.
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CLAY COUNTY UTILITY AUTHORITY
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30,2025 AND 2024
(1) Summary of Significant Accounting Policies: (Continued)
(g) Restricted assets and net position—Certain assets are required to be segregated from other
assets due to various bond indenture agreements and restricted revenue streams. These assets are
legally restricted for specific purposes such as debt service, construction, and renewals and
replacements. The remaining excess of restricted assets over liabilities is reflected as restricted net
position.
(h) Property and plant—Property and plant are recorded at cost less accumulated depreciation,
except contributed assets which are recorded at acquisition value on the date of contribution.
Expenditures of $5,000 or more are capitalized. Depreciation, on a straight-line basis, is charged
over estimated useful lives as follows:
Intangibles 15 years
Buildings and Building Improvements 25 years
Water,Wastewater,and Reclaimed Water Lines 40 years
Equipment 7, 15,25 years
(i) Subscription-Based Information Technology Arrangements—The Authority is a lessee for
two subscription-based information technology arrangements (SBITA). The Authority recognizes a
subscription liability and an intangible right-to-use asset (subscription asset) in the financial
statements. The Authority recognizes subscription liabilities with an initial, individual value of
$5,000 or more.
At the commencement of a SBITA, the Authority initially measures the subscription liability at the
present value of payments expected to be made during the SBITA term. Subsequently, the
subscription liability is reduced by the principal portion of SBITA payments made. The subscription
asset is initially measured as the initial amount of the subscription liability, adjusted for SBITA
payments made at or before the arrangement commencement date, plus certain initial direct costs.
Subsequently, the subscription asset is amortized on a straight-line basis over the term of the
arrangement.
Key estimates and judgments related to SBITA include how the Authority determines (1) the
discount rate it uses to discount the expected SBITA payments to present value, (2) arrangement
term, and(3)arrangement payments.
The arrangement term includes the noncancellable period of the SBITA. SBITA payments included
in the measurement of the subscription liability are comprised of fixed payments and any purchase
option price that the Authority is reasonably certain to exercise. In determining the arrangement
term, management considers all facts and circumstances that create an economic incentive to
exercise an extension option, or not exercise a termination option. Extension options are only
included in the arrangement term if the SBITA is reasonably certain to be extended.
The Authority monitors changes in circumstances that would require a remeasurement of its
SBITAs and will remeasure the subscription asset and liability if certain changes occur that are
expected to significantly affect the amount of the subscription liability. Subscription assets are
reported with other capital assets and subscription liabilities are reported with long-term debt on the
statement of net position.
(j) Bond discounts, premiums, and deferred amounts—Bond discounts, premiums, and
deferred amounts, consisting of deferred outflows from loss on refunding of long-term debt, are
deferred and amortized over the term of the bonds using the effective interest method.
- 13 -
CLAY COUNTY UTILITY AUTHORITY
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30,2025 AND 2024
(1) Summary of Significant Accounting Policies: (Continued)
(k) Deferred outflows/inflows of resources—In addition to assets, the statements of net position
will sometimes report a separate section for deferred outflows of resources. This separate financial
statement element represents a consumption of net assets that applies to a future period(s) and so
will not be recognized as an outflow of resources (expense/expenditure) until then. The Authority
has only one item, deferred loss on bond refunding,which qualifies for reporting in this category. A
deferred charge on refunding results from the difference in the carrying value of refunded debt and
its reacquisition price. This amount is deferred and amortized over the shorter of the life of the
refunded or refunding debt.
In addition to liabilities, the statements of net position will sometimes report a separate section for
deferred inflows of resources. This separate financial statement element represents an acquisition of
net assets that applies to a future period and will not be recognized as an inflow of resources
(revenue)until that time. The Authority had no deferred inflows at September 30,2025 and 2024.
(1) Net position flow assumption—Sometimes the Authority will fund outlays for a particular
purpose from both restricted and unrestricted resources. In order to determine amounts reported as
restricted and unrestricted net position, it is the Authority's policy to consider restricted net position
to have been used before unrestricted net position is applied.
(m) Revenue recognition—Operating revenue consists primarily of charges for services, which
are billed to customers for water, wastewater, and reclaimed water service. Billings are included in
revenue as meters are read each month. Unbilled revenues are accrued based on estimated
consumption of the most recent billing.
(n) Capital contributions—Capital contributions represent contributions of certain water
distribution and wastewater collection systems. Such contributions are recognized as increases in net
position in the period they are received.
(o) Use of estimates The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amount of assets, deferred outflows, deferred
inflows, liabilities, and changes therein, and disclosure of contingent assets and liabilities. Actual
results could differ from those estimates.
(2) Deposits and Investments:
(a) Deposits and Investments—In addition to insurance provided by the Federal Depository
Insurance Corporation, deposits are held in banking institutions approved by the State Treasurer of
the State of Florida to hold public funds. Under Florida Statutes Chapter 280, Florida Security for
Public Deposits Act, the State Treasurer requires all Florida qualified public depositories to deposit
with the Treasurer or another banking institution eligible collateral. In the event of failure of a
qualified public depository,the remaining public depositories would be responsible for covering any
resulting losses. The Authority's deposits at year end are considered insured for custodial credit risk
purposes.
- 14-
CLAY COUNTY UTILITY AUTHORITY
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30,2025 AND 2024
(2) Deposits and Investments: (Continued)
At September 30,2025,the Authority's cash and investments consisted of the following:
Credit
Types of Cash and Investments Average Maturity Quality Amount
Investments and restricted investments
Certificates of deposit 3.24 years AA $ 8,867,736
US Treasury Notes 1.66 years AA+ 5,682,150
Money Market Funds N/A AAA 6,456,738
Cash on deposit 47,213,741
Total cash and investments (unrestricted and restricted) $ 68,220,365
At September 30,2024,the Authority's cash and investments consisted of the following:
Credit
Types of Cash and Investments Average Maturity Quality Amount
Investments and restricted investments
Certificates of deposit 3.56 years N/A $ 12,679,454
US Treasury Notes 1.42 years AA+ 12,616,726
Money Market Funds N/A AAA 32,265,843
Cash on deposit 30,681,031
Total cash and investments (unrestricted and restricted) $ 88,243,054
(b) Custodial credit risk—For an investment, custodial credit is the risk that, in the event of the
failure of the counterparty, the Authority will not be able to recover the value of its investments or
collateral securities that are in the possession of an outside party. In order to manage the custodial
credit risk, the Authority's investment policy specifies certain requirements to pre-qualify financial
institutions and brokers/dealers and an annual review of the institutions used.
(c) Credit risk—Credit risk is the risk that an issuer or other counter party to an investment will
not fulfill its obligations. The Authority does have a formal investment policy that limits its
investments to high quality investments to control credit risk, which requires diversification of
investments, limited investments in securities with higher credit risks, investing in securities with
varying maturities, and continuously investing a portion of the portfolio in readily available funds
such as local government investment pools or money market funds.
(d) Interest rate risk—Interest rate risk is the risk that changes in interest rates will adversely
affect the fair value of an investment. The Authority has no formal policy relating to a specific
investment-related risk. In accordance with the provisions of the state statutes governing allowable
investments, the Authority manages its exposure to declines in fair values by limiting the maturity
of specific investments to provide sufficient liquidity to pay obligations as they come due.
(e) Fair value of financial instruments— Generally accepted accounting principles require
disclosure of an estimate of fair value of certain financial instruments. The Authority's financial
instruments consist principally of cash and cash equivalents, certificates of deposit, grants and other
receivables, and other short-term assets and liabilities. For these financial instruments, carrying
values approximate fair value. The fair value of a financial instrument is the amount that would be
received in an asset sale or paid to transfer a liability in an orderly transaction between unaffiliated
market participants. Assets and liabilities measured at fair value are categorized based on whether
the inputs are observable in the market and the degree that the inputs are observable. The
categorization of financial instruments within the valuation hierarchy is based on the lowest level of
input that is significant to the fair value measurement.
- 15 -
CLAY COUNTY UTILITY AUTHORITY
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30,2025 AND 2024
(2) Deposits and Investments: (Continued)
The hierarchy is prioritized into three levels(with Level 3 being the lowest)defined as follows:
Level 1: Quoted prices in active markets for identical assets or liabilities that the entity has the
ability to access.
Level 2: Observable inputs other than prices included in Level 1, such as quoted prices for similar
assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in
markets that are not active; or other inputs that are observable or can be corroborated with
observable market data.
Level 3: Unobservable inputs that are supported by little or no market activity and that are
significant to the fair value of the assets and liabilities. This includes certain pricing models,
discounted cash flow methodologies, and similar techniques that use significant unobservable
inputs.
The fair value of the Authority's investments of$21,006,624 consists of$5,682,150 of U.S. Government
obligations, which are traded in active markets (Level 1), $8,867,736 of certificates of deposit, which are
valued using observable market data, including market interest rates and yields for similar time deposits
(Level 2) and $6,456,738 of money market funds, which are reported at amortized cost and are excluded
from the fair value hierarchy. There have been no changes in Level 1, Level 2, and Level 3 and no
changes in valuation techniques for these assets or liabilities for the year ended September 30,2025.
(3) Accounts and Notes Receivable:
Unbilled receivables represent amounts earned which have not yet been billed, along with other amounts
which can be invoiced upon completion or attainment of contract objectives. Allowance for doubtful
accounts is estimated by analysis of accounts receivable balance over 60 days, and historical collection
trends. Accounts receivable at September 30,2025 and 2024, consist of the following:
2025 2024
Billed customer receivables $ 1,399,057 $ 1,905,544
Unbilled customer receivables 5,344,030 4,942,274
Notes receivable—current portion 39,157 37,146
Other receivables 71,643 241,899
Gross accounts receivable 6,853,887 7,126,863
Less:Allowance for uncollectibles (343,244) (316,912)
Total accounts receivable,net $ 6,510,643 $ 6,809,951
As part of the notes receivable included above, many such agreements have a long-term portion based on
extended payment schedules. The long-term balance of the notes receivables totaled $303,436 and
$284,464 at September 30, 2025 and 2024, respectively. Based on an assessment of interest rates and
repayment schedules, management does not believe any calculated discount to the gross receivable
amount would be material, and no such provision has been made.
- 16-
CLAY COUNTY UTILITY AUTHORITY
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30,2025 AND 2024
(4) Capital Assets:
Changes in the Authority's capital assets for the years ended September 30, 2025 and 2024, were as
follows:
Balance Balance
October 1, September 30,
2024 Increases Decreases 2025
Capital assets not being depreciated:
Land $ 5,268,724 $ 25,977 $ - $ 5,294,701
Construction in progress 138,905,488 69,560,437 (62,696,698) 145,769,227
Total capital assets not being
depreciated 144,174,212 69,586,414 (62,696,698) 151,063,928
Capital assets being depreciated or
amortized:
Machinery and equipment 551,972,131 57,912,442 (613,628) 609,270,945
Buildings 21,113,728 3,274,523 - 24,388,251
Intangibles 7,697,430 - - 7,697,430
Subscription asset 6,778,764 - - 6,778,764
Less: accumulated depreciation and
amortization (214,226,418) (18,726,908) 589,364 (232,363,962)
Total capital assets being depreciated and
amortized,net 373,335,635 42,460,058 (24,265) 415,771,428
Capital Assets,net $517,509,847 $112,046,472 $(62,720,963) $566,835,356
Balance Balance
October 1, September 30,
2023 Increases Decreases 2024
Capital assets not being depreciated:
Land $ 5,268,724 $ - $ - $ 5,268,724
Construction in progress 74,747,287 110,922,018 (46,763,817) 138,905,488
Total capital assets not being
depreciated 80,016,011 110,922,018 (46,763,817) 144,174,212
Capital assets being depreciated:
Machinery and equipment 510,633,696 41,583,424 (244,989) 551,972,131
Buildings 15,240,675 5,873,053 - 21,113,728
Intangibles 3,866,031 3,831,399 - 7,697,430
SBITAS - 6,778,764 - 6,778,764
Less: accumulated depreciation and
amortization (198,219,850) (16,251,557) 244,989 (214,226,418)
Total capital assets being depreciated and
amortized,net 331,520,552 41,815,083 - 373,335,635
Capital Assets,net $411,536,563 $152,737,101 $(46,763,817) $517,509,847
Depreciation and amortization expense for 2025 and 2024 was $18,726,908 and $16,220,865,
respectively. Of the total depreciation and amortization amount in the current year, $1,694,691 was
related to amortization of the subscription asset that went into implementation as of September 30, 2024
with an original cost of$6,778,764. Additional depreciation amounts of$24,264 and$30,692 in 2025 and
2024, respectively, related to equipment used for construction in progress and was capitalized as part of
the cost of construction in progress. Commitments on outstanding construction contracts for
improvements and maintenance of the utility systems totaled $2,426,753 and $13,985,436 at September
30,2025 and 2024,respectively.
- 17 -
CLAY COUNTY UTILITY AUTHORITY
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30,2025 AND 2024
(5) Compensated Absences:
The Authority implemented GASB Statement No. 101, Compensated Absences, in the current fiscal year.
Paid time off(PTO) is earned on a bi-weekly basis (regular 80 hours worked) at established rates based
upon years of service. Employees with one full year of service or more are required to take no less than
forty consecutive hours of PTO each calendar year.
In December of each year, employees are paid for any hours in excess of forty hours (one hundred and
twenty at employee's request) in their PTO accrual account. Employees with less than six (6) months of
service are not eligible for payment of unused PTO.
Because PTO accruals exceeds limitations on compensated absence balances at calendar year-end, all
balances are considered to be current, and no long-term portion has been calculated. As such, these
amounts have not been included in the long-term debt activity summary.
Outstanding compensated absences, included in accrued expenses on the statements of net position,
totaled$880,270 and$852,136 at September 30,2025 and 2024,respectively.
(6) Bonds and Notes Payable:
Long-term debt at September 30, 2025 and 2024,is comprised of the following:
2025 2024
$42,210,677 Utility System Revenue and Refunding Note, Series 2015; with
variable payment amounts due semi-annually and principal payments due from $ 28,348,379 $ 31,575,245
2016 through 2031.Interest is fixed at 2.82%.
$48,495,000 Utility System Revenue and Refunding Note, Series 2019; with
variable payment amounts due semi-annually and principal payments due from 32,050,000 35,295,000
2020 through 2039.Interest is fixed at 2.03%.
$75,000,000 Utility System Revenue Bond, Series 2023, with interest due semi-
annually beginning November 1, 2023 and principal payment due on May 1, 75,000,000 75,000,000
2026.Interest is fixed at 3.56%.
$12,788,239 Clean Water State Revolving Fund loan with maximum$14,179,180
available balance; due in semi-annual installments of$399,298 through 2039
including interest at 0.94% until the payment amount is adjusted by 9,196,056 9,832,046
amendment.
$1,735,142 Clean Water State Revolving Fund; due in semi-annual installments
of $54,020 including interest ranging from 1.29% to 3.10%, beginning on 420,536 522,166
January 15,2017,through 2032.
$30,000,000 Utility System Revenue Bond Series 2024; due in annual
installments varying from$2,815,000 to$3,900,000 plus interest payable semi-
annually at 4.15%through 2024. 30,000,000 30,000,000
Bonds and notes payable 175,014,971 182,224,457
Less: Current portion of bonds and notes payable (10,191,544) (7,209,488)
Long-term bonds and notes payable,net $ 164,823,427 $ 175,014,969
- 18 -
CLAY COUNTY UTILITY AUTHORITY
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30,2025 AND 2024
(6) Bonds and Notes Payable: (Continued)
Activity in bonds and notes payable for the years ended September 30,2025 and 2024, is as follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
2025 $182,224,457 $ - $ (7,209,486) $175,014,971 $ 10,191,544
2024 $159,283,835 $ 30,000,000 $ (7,059,378) $182,224,457 $ 7,209,488
Debt service requirements to maturity are as follows at September 30,2025:
For the year ended Total Debt
September 30, Principal Interest Service
2026 $ 10,191,544 $ 5,408,307 $ 15,599,851
2027 85,477,204 2,452,067 87,929,271
2028 10,771,318 2,156,672 12,927,990
2029 11,079,424 1,852,032 12,931,456
2030 11,330,912 1,535,229 12,866,141
2031-2035 35,727,506 3,355,883 39,083,389
2036-2039 10,437,063 454,181 10,891,244
Total $ 175,014,971 $ 17,214,371 $ 192,229,342
Net revenues of the water,wastewater, and reclaimed water utility system are pledged as collateral for the
revenue bonds and the Clean Water State Revolving Funds.
(7) Subscription-Based Information Technology Arrangements:
The Authority has entered into two subscription-based information technology arrangements as indicated
in Note(4). Imputed interest rates on the arrangement are 4.15%.
Future minimum SBITA payments for the Authority are as follows for the year ended September 30,
2025:
For the year ended
September 30, Principal Interest Total
2026 $ 722,239 $ 63,545 $ 785,784
2027 780,069 32,996 813,065
Total $ 1,502,308 $ 96,541 $ 1,598,849
- 19 -
CLAY COUNTY UTILITY AUTHORITY
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30,2025 AND 2024
(8) Retirement Benefits:
The Authority provides retirement benefits for all of its full-time employees through the Clay County
Utility Authority Employees Plan (the Plan), which is a defined contribution plan administered by a
financial institution. The Authority has the right to amend the Plan at any time, provided that no
amendment or modification shall reduce the account balances of any participant. The Plan's benefits
depend solely on amounts contributed plus investment income. The covered-employee payroll for
employees covered by this plan for the years ended September 30, 2025 and 2024, was $16,345,500 and
$15,627,936, respectively, and the total payroll was $16,490,756 and $15,698,615 for the same years,
respectively. Participants are fully vested after 5 years of service; rollovers from other qualified plans are
100% vested. No employee contributions are allowed by the Plan. The Authority contributes an amount
equal to 10% of the participant's compensation for the year to the Plan. The Authority contributed
$1,626,842 and$1,553,902 for the years ended September 30, 2025 and 2024,respectively.
(9) Deferred Compensation Plan:
The Authority offers its employees a deferred compensation plan created in accordance with Internal
Revenue Code Section 457 and administered by a financial institution. Participation is on a voluntary
basis and contributions are made via payroll deduction. The plan permits deferral of compensation until
future years. According to the plan, the deferred compensation is not available until termination,
retirement, death, or an unforeseeable emergency. All plan assets are held in trust by the financial
institution, and as such, no provision for plan assets or liabilities has been recorded on the Authority's
financial statements.
(10) Risk Management:
The Authority is exposed to various risks of loss related to torts; theft of, damage to, and destruction of
assets; errors and omissions; injuries to employees; and natural disasters for which the Authority
purchases commercial insurance. During the year ended September 30,2025,the Authority did not reduce
insurance coverage levels in place as of September 30, 2024. The Authority has no settled claims
resulting from these risks that exceeded its commercial coverage in any of the past three fiscal years.
(11) Other Post-Employment Benefits(OPEB):
Retirees and their dependents are permitted to remain covered under the Authority's respective health
care plans as long as they pay a full premium applicable to the coverage elected. This conforms to the
minimum required of Florida governmental employers per Chapter 112.08 of Florida Statutes. According
to the Authority's employee handbook,retirees are defined as"Any full time employee age sixty-five(65)
or older with at least five(5)years of continuous eligible service at the time of his/her retirement."
The Authority has previously engaged an actuary to calculate the outstanding liability for certain post-
employment healthcare benefits provided by the Authority. Based on the Authority's policies, the OPEB
liability was actuarially determined to be zero. There have been no changes to the Authority's policies or
state statutes since that time which management believes would impact this determination as of
September 30,2025.As such,no OPEB liability has been recorded.
-20-
CLAY COUNTY UTILITY AUTHORITY
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30,2025 AND 2024
(12) Commitments and Contingencies:
In accordance with the Master Utility Services Agreement between the Authority and a developer, the
Authority has granted connection fee credits which can be used by the developer or its assignee toward
future connections in the specified development. As part of this agreement,the developer contributed land
valued at $2,091,708 during the year ended September 30, 2016. In return, the developer received
connection fee credits for future connections within the development equal to the agreed-upon value of
the contributed land; however, should the developer cease plans to develop the land, no amounts will be
due to the developer from the Authority,nor will the contributed property revert back to the developer.At
September 30, 2025, no connections have been made in this development and total future connection fee
credits available to the developer totaled$2,091,708.
(13) Subsequent Events:
The Authority has evaluated subsequent events for potential recognition and disclosure through December
15, 2025, which is the date the financial statements were complete in a form and format that complies
with generally accepted accounting principles and approvals necessary for issuance had been obtained.
No subsequent events requiring recognition or disclosure were identified, except as follows.
On October 9, 2025, the Authority entered into a loan agreement for the Utility System Revenue and
Refunding Bond Series 2025 for $110,535,000. The bond is due in annual installments varying from
$100,000 to $6,644,000,plus interest payable semi-annually at 4.285%through 2055.No amounts related
to this transaction are recognized in the accompanying financial statements for the fiscal year ended 2025
(14) New Accounting Pronouncements:
The Governmental Accounting Standards Board ("GASB") has issued several pronouncements that have
effective dates that may impact future financial statements. Listed below are pronouncements with
required implementation dates effective for subsequent fiscal years that have not yet been implemented.
Management has not currently determined what,if any, impact implementation of the following will have
on the Authority's financial statements:
GASB issued Statement No. 103, Financial Reporting Model Improvements, in April 2024. The
objective of GASB 103 is to improve key components of the financial reporting model to enhance
its effectiveness in providing information that is essential for decision making and assessing a
government's accountability. The effective date for implementation is fiscal years beginning after
June 15,2025, and all reporting periods thereafter.
GASB issued Statement No. 104,Disclosure of Certain Capital Assets, in September 2024. GASB
Statement No. 104 requires governments to disclose separate information about specific types of
capital assets and establishes criteria for identifying and reporting capital assets held for sale. The
objective of GASB 104 is to enhance transparency and improve the usefulness of financial
statements for stakeholders by providing more detailed information on these assets. The provisions
are effective for fiscal years beginning after June 15,2025.
-21 -
Prkgr 1
JAMESMOORE
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT
OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
To the Board of Supervisors,
Clay County Utility Authority:
We have audited, in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in the Government Auditing Standards
issued by the Comptroller General of the United States (Government Auditing Standards), the financial
statements of the Clay County Utility Authority (the Authority) as of and for the year ended September
30, 2025, and the related notes to the financial statements, which collectively comprise the Authority's
basic financial statements, and have issued our report thereon dated December 15,2025.
Report on Internal Control Over Financial Reporting
In planning and performing our audits of the financial statements, we considered the Authority's internal
control over financial reporting (internal control) as a basis for designing audit procedures that are
appropriate in the circumstances 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 Authority's internal control.
Accordingly,we do not express an opinion on the effectiveness of the Authority's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees in the normal course of performing their assigned functions, to prevent, or
detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement
of the Authority's financial statements will not be prevented, or detected and corrected on a timely basis.
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less
severe than a material weakness, yet important enough to merit attention by those charged with
governance.
Our consideration of internal control 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 material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However,material weaknesses
may exist that have not been identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Authority'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
financial statements. However, providing an opinion on compliance with those provisions was not an
objective of our audits 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.
-22 -
Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the Authority's
internal control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the entity's internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
avAt' API( i . , ?.L .
Daytona Beach,Florida
December 15,2025
-23 -
Prkgr 1
JAMESMOORE
INDEPENDENT AUDITORS' MANAGEMENT LETTER REQUIRED
BY CHAPTER 10.550,RULES OF THE STATE OF FLORIDA
OFFICE OF THE AUDITOR GENERAL
To the Board of Supervisors,
Clay County Utility Authority:
Report on the Financial Statements
We have audited the basic financial statements of the Clay County Utility Authority(the Authority), as of
and for the fiscal year ended September 30, 2025, and have issued our report thereon dated December 15,
2025.
Auditors' Responsibility
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America; the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States; and Chapter 10.550,Rules of the Auditor General.
Other Reporting Requirements
We have issued our Independent Auditors' Report 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; and Independent Accountants' Report on an examination
conducted in accordance with AICPA Professional Standards, AT-C Section 315, regarding compliance
requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those
reports and schedule, which are dated December 15, 2025, should be considered in conjunction with this
management letter.
Prior Audit Findings
Section 10.554(1)(i)1.,Rules of the Auditor General,requires that we determine whether or not corrective
actions have been taken to address findings and recommendations made in the preceding annual financial
audit report. The Authority has no uncorrected prior audit findings that are required to be identified
pursuant to the Rules of the Auditor General.
Official Title and Legal Authority
Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal
authority for the primary government and each component unit of the reporting entity be disclosed in this
management letter, unless disclosed in the notes to the financial statements. The Clay County Utility
Authority was established by special act by the Florida Legislature. There are no component units related
to the Authority.
-24-
Financial Condition and Management
Sections 10.554(1)(i)5.a. and 10.556(7), Rules of the Auditor General, require us to apply appropriate
procedures and communicate the results of our determination as to whether or not the Authority has met
one or more of the conditions described in Section 218.503(1), Florida Statutes, and to identify the
specific condition(s) met. In connection with our audits, we determined that the Authority did not meet
any of the conditions described in Section 218.503(1),Florida Statutes.
Pursuant to Sections 10.554(1)(i)5.b. and 10.556(8), Rules of the Auditor General, we applied financial
condition assessment procedures for the Authority. It is management's responsibility to monitor the
Authority'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.
Section 10.554(1)(i)2.,Rules of the Auditor General,requires that we communicate any recommendations
to improve financial management. In connection with our audit,we had no such recommendations.
Special District Component Units
Section 10.554(1)(i)5.c., Rules of the Auditor General, requires, if appropriate, that we communicate the
failure of a special district that is a component unit of a county, municipality, or special district, to
provide the financial information necessary for proper reporting of the component unit within the audited
financial statements of the county, municipality, or special district in accordance with Section
218.39(3)(b), Florida Statutes. In connection with our audit, we did not note any special district
component units; therefore,we did not note any such component units that failed to provide the necessary
information.
Specific Special District Information—Clay County Utility Authority
The following items have been provided to us to comply with state reporting requirements and have not
been audited by us. We did not audit the following information within this section, nor were we required
to perform any procedures to verify the accuracy or the completeness of the information provided by
management.We do not express an opinion, a conclusion,nor provide any form of assurance on this data.
As required by Section 218.39(3)(c), Florida Statutes, and Section 10.554(1)(i)6, Rules of the Auditor
General,the Authority reported the following unaudited data:
a) The total number of district employees compensated in the last pay period of the district's fiscal
year: 191.
b) The total number of independent contractors to whom nonemployee compensation was paid in
the last month of the district's fiscal year: 25.
c) All compensation earned by or awarded to employees, whether paid or accrued, regardless of
contingency: $16,369,439.
d) All compensation earned by or awarded to nonemployee independent contractors,whether paid or
accrued,regardless of contingency: $473,898
e) Each construction project with a total cost of at least $65,000 approved by the district that is
scheduled to begin on or after October 1 of the fiscal year being reported, together with the total
expenditures for such project as:
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Project Expenditures
23017RR Clay County Interlocal- CR 315 Widening $ 78,120
24018RR Clay Co. CR 220 Baxley to Henley utility relocations 82,034
24019RR BCR Upgrades 241,825
24020RR Mid-Clay Reuse GST Repair(Inactive) 125,000
24021 WL Upsizing mains Bradley Creek to Russell Retreat(Inactive) 394,237
24022WL FDOT Blanding Blvd. &Wells Rd. intersection Utility Relocati 84,539
25001WL Saratoga Springs Trunk Mains (Freehold) 6,471,193
25003RR Insituform Task Order#41 (Inactive) 1,022,519
25006RR Task Order 42 Gravity Sewer Lining(Inactive) 262,452
25008WL Challenger Dr. WM Extension 95,482
25012RR Server Lifecycle Replacement 2,018,219
25014RR Lift Station Generators 326,858
25015RR Well Rehab 165,350
25016RR Plant Generator(PostmasterWTP 158,866
25017RR Manhole Rehabilitation 131,586
Total $ 11,658,280
f) A budget variance based on the budget adopted under Section 189.016(4),Florida Statutes,before
the beginning of the fiscal year being reported if the district amends a final adopted budget under
Section 189.016(6), Florida Statutes, as follows: there were no amendments between the original
and final total district expenditure budget.
Additional Matters
Section 10.554(1)(i)3., Rules of the Auditor General, requires us to communicate noncompliance with
provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred,
that have an effect on the financial statements that is less than material but which warrants the attention of
those charged with governance. In connection with our audit,we did not note any such findings.
Purpose of this Letter
Our management letter is intended solely for the information and use of the Legislative Auditing
Committee, members of the Florida Senate and the Florida House of Representatives,the Florida Auditor
General, Federal and other granting agencies, and applicable management and the Board of Supervisors,
and is not intended to be and should not be used by anyone other than these specified parties.
laswt* MAW 4: (0 . ?.i._ .
Daytona Beach,Florida
December 15,2025
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Prkgr
JAMESMOORE
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Supervisors,
Clay County Utility Authority:
We have examined the Clay County Utility Authority's (the Authority) compliance with Section 218.415,
Florida Statutes, Local Government Investment Policies (the Statute), for the year ended September 30,
2025. The Authority's management is responsible for the Authority's compliance with those
requirements. Our responsibility is to obtain reasonable assurance by evaluating against the
aforementioned statutes and performing other procedures to obtain sufficient appropriate evidence to
express an opinion that conveys the results of our evaluation based on our examination.
Our examination was conducted in accordance with attestation standards for a direct examination
engagement established by the AICPA. Those standards require that we obtain reasonable assurance by
evaluating against the aforementioned statutes and performing other procedures to obtain sufficient
appropriate evidence to express an opinion that conveys the results of our evaluation of Authority's
compliance. The nature, timing, and extent of the procedures selected depend on our judgment, including
an assessment of the risks that were not in accordance with those requirements in all material respects,
whether due to fraud or error. We believe that the evidence we obtained is sufficient and appropriate to
provide a reasonable basis for our opinion.
We are required to be independent of the Authority and to meet our other ethical responsibilities, in
accordance with relevant ethical requirements relating to our examination engagement.
In our opinion, the Authority complied for the year ended September 30, 2025, with the aforementioned
requirements in all material respects.
Daytona Beach,Florida
December 15,2025
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