HomeMy WebLinkAboutFY 19/20 Audited Financials Statements CLAY COUNTY UTILITY AUTHORITY
FINANCIAL STATEMENTS
SEPTEMBER 30,2020 AND 2019
CLAY COUNTY UTILITY AUTHORITY
FINANCIAL STATEMENTS
SEPTEMBER 30,2020 AND 2019
TABLE OF CONTENTS
Page
Number(s)
Independent Auditors' Report 1 — 2
Management's Discussion and Analysis 3 — 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—20
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 21 —22
Independent Auditors' Management Letter Required by Chapter 10.550, Rules of
the State of Florida Office of the Auditor General 23 —24
Independent Accountants' Examination Report 25
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AA James Moore
Certified Public Accountants and Consultants
INDEPENDENT AUDITORS' REPORT
To the Board of Supervisors,
Clay County Utility Authority:
Report on the Financial Statements
We have audited the accompanying financial statements of the Clay County Utility Authority (the
Authority), as of and for the years ended September 30, 2020 and 2019, and the related notes to the
financial statements, which collectively comprise the Authority's basic financial statements as listed in
the table of contents.
Management's Responsibility for the Financial Statements
The Authority's management is responsible for the preparation and fair presentation of these financial
statements in accordance with accounting principles generally accepted in the United States of America;
this includes the design, implementation, and maintenance of internal control relevant to the preparation
and fair presentation of financial statements that are free from material misstatement, whether due to
fraud or error.
Auditors'Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We
conducted our audits in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditors' judgment, including the
assessment of the risks of material misstatement of the financial statements,whether due to fraud or error.
In making those risk assessments,the auditor considers internal control relevant to the entity's preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate in
the circumstances,but not for the purpose of expressing an opinion on the effectiveness of the Authority's
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management,as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
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121 Executive Circle 133 East Indiana Avenue 5931 NW 1st Place 2477 Tim Gamble Place,Suite 200
Daytona Beach,FL 32114-1180 DeLand,FL 32724-4329 Gainesville,FL 32607-2063 Tallahassee,FL 32308-4386
Telephone:386-257-4100 Telephone:386-738-3300 Telephone:352-378-1331 Telephone:850-386-6184
Website:www.jmco.com Email: info@jmco.com Member of AGN International with offices in principal cities worldwide
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of the Authority as of September 30, 2020 and 2019, and the respective changes in
financial position and cash flows thereof for the years then ended in accordance with accounting
principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that management's
discussion and analysis, as listed in the table contents, 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 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 audits 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.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 14,
2020, 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 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 in considering the Authority's internal control over
financial reporting and compliance.
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Daytona Beach,Florida
December 14,2020
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Management's Discussion and Analysis
Managerial Philosophy and Strategic Objectives
The senior management team of the Clay County Utility Authority (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 30,2020.
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 continues
to invest in technology, infrastructure, and training aimed at keeping the utility in an environmentally and
economically sustainable position.
The Authority continues to use advanced wastewater treatment techniques. In addition, we continue to
expand our reclaimed water initiative. Our reclaimed water distribution system includes seven storage and
pumping plants.Our reclaimed water customers irrigated their lawns with an average of 4.59 million gallons
per day during the fiscal year ending September 30, 2020, this equates to conserving approximately 1.67
billion gallons of drinking water per year.We continue to augment our reclaimed water supply through our
partnership with the Town of Orange Park and the St. Johns River Water Management District.
Financial Overview
The Authority continues the expansion of facilities to support the population growth of within the service
area. The Authority also continues to expand the capacity within the reclaimed water system. Service rates
remained unchanged from fiscal year 2012 to 2014 however,in 2015, service rates were increased 5.4%to
address the cost of renewal and replacement of existing infrastructure. In fiscal year 2020 service rates
were increased by 2%,resulting in an average annual price increase of 1.46% from 2012 through 2020.
Management originally established 15.0% reduction goal in per capita water demand from our base year
2009. Our analysis shows the Authority's customers are using roughly 20% less water per capita in fiscal
year 2019/2020 when compared to the base fiscal year of fiscal year 2008/2009. Customers have
aggregately decreased total water demand by 3.89%, even though our customer base has grown by 7,864
accounts during this time.
The Authority's cash reserves, borrowing capacity and scheduled fiscal year 2020/2021 service rates are
adequate to support currently planned maintenance and expansion projects. Contributions in aid of
construction continue to be a major source of capital.
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Condensed Statement of Net Position($000)
For the Year Ended September 30,2020
% %
2020 2019 Change 2018 Change
Capital assets-net 291,938 279,010 4.6 265,873 4.9
Current assets 34,326 39,184 (12.4) 36,945 6.1
Investments,current 6,151 11,411 (46.1) 5,980 90.8
Other non-current assets 9,939 7,210 37.9 5,823 23.8
Investments,non-current 40,066 0 100 5,378 (100.0)
Deferred Outflow of Resources 2,169 2,401 (9.7) 2,636 (8.9)
Totals 384,589 339,216 13.4 322,636 5.1
Liabilities and fund equity
Net position 270,358 253,898 6.5 238,675 6.4
Long-term liabilities,net 98,542 70,251 40.3 71,511 (1.8)
Current liabilities, including restricted 15,689 15,067 4.1 12,450 21.0
Totals 384,589 339,216 13.4 322,636 5.1
Capital Assets-Net
Net Capital assets increased$12,928,000 during the fiscal year 2019/2020.The increase is mainly attributed
to $24,738,000 of various utility expansions and dispositions, offset by $11,932,000 of depreciation
expense. Developers contributed$6,841,000 of those assets.
For the year 2019, capital assets increased $13,137,000. The increase is mainly attributed to $24,206,000
of various utility expansions and dispositions, offset by $11,069,000 of depreciation expense. Developers
contributed$8,744,903 of those assets.
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Current Assets
The change in current assets is due to the decrease in cash. Excess cash was transferred to investments to
maximize interest earnings.
Net Position
The net position can serve as a useful indicator of our financial position, with an increase of$16,460,000
the net investment in capital assets,the largest portion of the Authority's net position,76%,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, 0.9%, is capacity charges that are subject to capital
improvements, developer, and other contributions of $12,718,000 were received in fiscal year 2020,
approximately$3,511,000 of which was cash. The unrestricted portion,22%, increased 5%.Net income is
an unrestricted reserve used for future capital funding.
Long-Term Debt-Net
In fiscal year 2019, the net long-term debt increased $27,907,000. The debt increased due to additional
monies borrowed to fund budgeted capital projects due to projected growth in Clay County over the next 5
— 10 years.
Current Liabilities
Current liabilities increased $622,000 due largely to the increase in the current portion of the long-term
debt.
Condensed Statement of Revenues,Expenses, and Changes in Net Position ($000)
For the Year Ended September 30,2020
2020 2019 Change 2018 Change
Operating revenues 48,064 45,233 6.3 42,353 6.8
Operating expenses (42,384) (40,067) 5.8 (38,781) 3.3
Operating income 5,680 5,166 9.9 3,572 44.6
Non-operating(expenses),net (1,938) (1,194) 62.3 (1,619) (26.3)
Contributions and grants 12,718 11,250 13.0 7,600 48.0
Increase in Net Position 16,460 15,222 8.1 9,553 59.3
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Operating Revenues
Operating revenue was over 7%of management projections. Operating revenue is 51%fixed through base
charges and 49%is variable through usage charges. Consequently, climatic conditions such as rainfall and
temperature will cause revenue fluctuations.A large majority(91.4%)of residential customers continue to
use no more water than the second-tier allowance in fiscal 2020.
In the prior year, operating revenue was within 1.0%of management projections.A large majority(91.5%)
of residential customers continue to use no more water than the second-tier allowance in fiscal 2019.
Operating Expenses
The increase of$2,317,000 in operating expenses in 2020 is largely due to $777,000 increase in wages and
related benefits, $526,000 increase in subcontractors and depreciation expense increased$862,000.
The increase of$1,286,000 in operating expenses in 2019,was largely due to$1,026,479 increase in wages
and related benefits resulting from additional staffing, and a 2.9%cost of living allowance and merit.
Non-Operating Revenue and Expenses
The increase of $743,000 in non-operating revenue and expenses is due to an increase of$362,000 in
interest income, an increase of $636,000 in interest expense and an increase in debt issuance costs of
$429,000.
During fiscal 2019, the decrease of$425,000 in non-operating revenue and expenses is due to an increase
of$327,000 in interest income,a reduction of$89,000 in interest expense and an increase of$8,000 on sale
of assets.
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 in order to connect to the Authority's systems.Contributed property was$6,841,000 in 2020,
compared to $8,744,000 in 2019. Cash contributions totaled $5,877,000 in 2020, of which $908,000 was
grant money compared to cash contributions of $2,505,000, of which $0 was grant money in 2019.
Additionally,the Authority began deferring capacity charges for developers in 2016. At the end of Fiscal
Year 2020 the pending deferred charges totaled,$6,442,000,with expected capacity fees from these charges
at$2,201,517 in fiscal year 2021.
Utility Service Demand Trend
An Equivalent Residential Connection (ERC) is the equivalent flow that can be anticipated from one
residential connection.
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The following table provides historical information on average annual usage per ERC, expressed in
thousands of gallons. The calculation of ERCs is derived by dividing the Annual Base Revenue by the
Annual Residential Base Rate. The usage per ERC is a calculation of the gallons used divided by the ERCs.
Water Sewer Reuse
Fiscal Yr
Ending ERCs Use/ERC ERCs Use/ERC ERCs Use/ERC
9/30/2008 46,453 99.8 41,717 76.6 7,230 252.3
9/30/2009 46,267 90.7 41,643 71.0 7,392 203.7
9/30/2010 47,069 88.4 42,490 69.6 7,736 202.3
9/30/2011 46,423 94.6 41,750 75.2 6,769 215.5
9/30/2012 47,982 79.5 43,463 68.1 8,325 121.9
9/30/2013 48,364 74.2 43,729 65.7 8,706 107.4
9/30/2014 49,382 71.3 44,614 64.0 9,279 94.7
9/30/2015 49,810 73.5 45,017 64.8 9,640 103.2
9/30/2016 51,735 75.6 46,845 66.0 10,342 120.3
9/30/2017 52,419 76.0 47,613 66.2 10,860 131.6
9/30/2018 53,392 77.1 48,401 50.9 11,379 118.8
9/30/2019 54,192 81.7 49,146 54.8 11,914 140.4
9/30/2020 54,140 82.1 48,965 53.4 12,457 100.5
Economic Factors and Next Year's Rate
The Authority experienced immaterial economic effects from the outbreak of COVID-19 in 2020. The
Authority's Board of Supervisors did temporary suspend the utility's policy of disconnecting service for
non-payment on April 30, 2020. The Authority's Board of Supervisors later reinstated the policy of
disconnecting service for non-payment with a glide path to bringing customers with past due balances to
current beginning August 25, 2020. All customer accounts with past due balances should be back with to
current by January 26, 2021.
Our evaluation of customer water demand shows per capita water demand has remained stable with the
Authority's tiered rate structure. In fiscal year 2019/2020,customers within the first two water use tiers(up
to 12,000 gallons per month) accounted for 91.6% of the Authority's customers. We consider the
Authority's conservation efforts have reached a mature level.
The Authority has adopted an Alternative Water Supply (AWS) surcharge of$1.09 per water bill and a
one-time AWS capacity charge of$355 per new account to support the development of AWS.An AWS is
simply any sustainable water source with its supporting infrastructure for processing and delivery that does
not originate from the upper Florida Aquifer. The AWS surcharge and capacity charge are necessary to
address AWS requirements from the St. Johns River Water Management District (SJRWMD), the
Suwannee River Water Management District (SRWMD), and the Florida Department of Environmental
Protection(FDEP) associated with Minimum Flows and Levels (MFL)and North Florida Regional Water
Supply Planning. The AWS surcharge and capacity charge are also necessary to put the Authority in the
best position possible to continue development of infrastructure to provide all the rate payers of the
Authority with sustainable water supplies.
The Authority continues to progress with the development of AWS. We initiated the sampling and testing
of water quality and water quantity in the Storm Water Harvesting project with the Florida Department of
Transportation(FDOT). The Authority's consultants are completing the evaluation of the Lower Floridan
Aquifer as a potential AWS system. The Authority commenced the design of a Treatability Pilot Project
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evaluating and educating the public related to direct and indirect potable reclaimed water as an AWS. For
additional information,please visit:https://www.clayutility.org/aws/default.aspx .
Request for Information
This financial report is designed to provide a general overview of the Authority's finances. Questions
concerning any of the information provided in this report or requests for additional financial information
should be addressed to Jeffrey S. Wesselman, CPA, Chief Financial Officer, 3176 Old Jennings Road,
Middleburg,Florida, 32068.
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CLAY COUNTY UTILITY AUTHORITY
STATEMENTS OF NET POSITION
SEPTEMBER 30,2020 AND 2019
2020 2019
ASSETS
Current assets
Cash and cash equivalents $ 27,021,992 $ 33,028,990
Restricted cash and cash equivalents 2,550,335 2,654,009
Investments 34,511,435 11,599,882
Accounts receivable,net 2,387,523 2,779,807
Prepaid items and inventory 921,657 839,396
Total current assets 67,392,942 50,902,084
Non-current assets
Restricted cash and cash equivalents 10,784,551 6,539,009
Restricted investments 11,951,938 -
Notes receivable 352,674 363,850
Utility plants 429,764,422 388,161,800
Construction in process 22,050,766 38,915,013
Accumulated depreciation (159,877,006) (148,066,648)
Total non-current assets 315,027,345 285,913,024
Total Assets $382,420,287 $336,815,108
DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on bond refunding $ 2,168,915 $ 2,401,241
LIABILITIES
Current liabilities
Accounts and retainage payable $ 1,254,296 $ 1,594,721
Accrued expenses 1,005,598 1,267,368
Unearned revenues 430,620 261,329
Customer deposits 3,563,488 3,661,475
Liabilities payable from current restricted assets:
Accounts and retainage payable 1,592,458 1,899,332
Interest payable 957,877 754,677
Current portion of long-term debt 6,919,315 5,278,625
Total current liabilities 15,723,652 14,717,527
Non-current liabilities
Non-current portion of long-term debt 98,508,002 70,601,071
Total non-current liabilities 98,508,002 70,601,071
Total Liabilities $114,231,654 $ 85,318,598
NET POSITION
Net investment in capital assets $200,631,718 $205,531,710
Restricted for:
Capital projects 6,379,022 3,223,543
Debt service 4,405,529 3,315,466
Unrestricted 58,941,279 41,827,032
Total Net Position $270,357,548 $253,897,751
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 30,2020 AND 2019
2020 2019
Operating revenues
Charges for services $ 46,567,578 $ 43,923,044
Miscellaneous revenues 1,496,475 1,309,953
Total operating revenues 48,064,053 45,232,997
Operating expenses
Wages and related benefits 15,025,171 14,248,193
Operating expenses 9,544,640 9,510,710
Subcontractors 3,786,133 3,260,744
In lieu of taxes 2,097,421 1,977,716
Depreciation expense 11,931,108 11,069,168
Total operating expenses 42,384,473 40,066,531
Operating income 5,679,580 5,166,466
Nonoperating revenues(expenses)
Interest income 1,106,906 744,381
Interest expense (2,620,858) (1,984,826)
Gain(loss)on sale of assets 6,008 46,030
Debt issuance costs (429,603) -
Total nonoperating revenues(expenses) (1,937,547) (1,194,415)
Income(loss)before capital contributions 3,742,033 3,972,051
Capital contributions and grants
Developer and other contributions 11,808,924 11,250,401
Capital grants 908,840 -
Total capital contributions 12,717,764 11,250,401
Change in net position 16,459,797 15,222,452
Net position,beginning of year 253,897,751 238,675,299
Net position,end of year $270,357,548 $253,897,751
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 30,2020 AND 2019
2020 2019
Cash flows from operating activities
Receipts from customers $ 48,538,817 $ 45,165,875
Payments to suppliers (13,753,459) (12,482,706)
Payment in lieu of taxes (2,097,421) (1,977,716)
Payments to employees (15,286,941) (14,123,057)
Net cash provided by(used in)operating activities 17,400,996 16,582,396
Cash flows from capital and related financing activities
Proceeds from issuance of bonds and loans 48,753,960 4,749,233
Debt issuance costs (429,603) -
Principal paid on long-term debt (19,206,339) (4,969,299)
Interest paid on long-term debt (2,185,332) (1,706,899)
Payments to acquire and construct plant property (18,318,677) (14,789,522)
Capital contributions 4,967,610 2,505,498
Capital grants 908,840 Net cash provided by(used in)capital and related financing activities 14,490,459 (14,210,989)
Cash flows from investing activities
Purchases of investments (46,216,759) (11,410,915)
Sales of investments 11,353,268 11,169,625
Interest income 1,106,906 744,381
Net cash provided by(used in)investing activities (33,756,585) 503,091
Net increase(decrease)in cash and cash equivalents (1,865,130) 2,874,498
Cash and cash equivalents,beginning of year 42,222,008 39,347,510
Cash and cash equivalents,end of year $ 40,356,878 $ 42,222,008
Cash and cash equivalents classified as:
Unrestricted $ 27,021,992 $ 33,028,990
Restricted 2,550,335 2,654,009
Restricted-noncurrent 10,784,551 6,539,009
Total cash and cash equivalents $ 40,356,878 $ 42,222,008
Reconciliation of operating income to net cash provided by(used in)operating activitie
Cash flows from operating activities
Operating income $ 5,679,580 $ 5,166,466
Adjustments to reconcile operating income to net
cash provided by(used in)operating activities:
Depreciation expense 11,931,108 11,069,168
Changes in assets and liabilities
Decrease(Increase)in accounts and notes receivable 403,460 (317,327)
Decrease(Increase)in prepaid items and inventory (82,261) (244,383)
Increase(Decrease)in accounts and retainage payable (340,425) 533,131
Increase(Decrease)in accrued expenses (261,770) 125,136
Increase(Decrease)in unearned revenue 169,291 (17,842)
Increase(Decrease)in customer deposits (97,987) 268,047
Total adjustments 11,721,416 11,415,930
Net cash provided by(usd in)operating activities $ 17,400,996 $ 16,582,396
Supplemental schedule of noncash investing,capital,and financing activitie
Deferred loss on refunding amortization $ 232,326 $ 234,628
Utility plant property contributed by developers 6,841,314 8,744,903
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 30,2020 AND 2019
(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 solely consist of certificates of deposit and are valued at cost plus
accrued interest,which approximates fair value.
(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.
(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.
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CLAY COUNTY UTILITY AUTHORITY
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30,2020 AND 2019
(1) Summary of Significant Accounting Policies: (Continued)
(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$1,000 or more are capitalized. Depreciation, on a straight-line basis, is charged
over estimated useful lives as follows:
Buildings and Building Improvements 25 years
Water,Wastewater, and Reclaimed Water Lines 40 years
Equipment 7, 15,25 years
(i) 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.
(j) 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 position 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 statement of financial position will sometimes report a separate section
for deferred inflows of resources. This separate financial statement element represents an acquisition
of net position 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 30,2020 and 2019.
(k) 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.
(1) 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.
(m) 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.
(n) 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, liabilities, and changes therein,
and disclosure of contingent assets and liabilities.Actual results could differ from those estimates.
- 13 -
CLAY COUNTY UTILITY AUTHORITY
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30,2020 AND 2019
(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.
At September 30,2020,the Authority's cash and investments consisted of the following:
Average Credit
Types of Cash and Investments Maturity Quality Amount
Investments and restricted investments
Certificates of deposit 0.12 years N/A $ 46,463,373
Cash on deposit 40,356,878
Total cash and investments (unrestricted and restricted) $ 86,820,251
At September 30,2019,the Authority's cash and investments consisted of the following:
Average Credit
Types of Cash and Investments Maturity Quality Amount
Investments and restricted investments
Certificates of deposit 0.37 years N/A $ 11,599,882
Cash on deposit 42,222,008
Total cash and investments (unrestricted and restricted) $ 53,821,890
(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.
- 14 -
CLAY COUNTY UTILITY AUTHORITY
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30,2020 AND 2019
(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 30,2020 and 2019, consist of the following:
2020 2019
Billed customer receivables $ 675,263 $ 912,560
Unbilled customer receivables 1,524,383 1,748,301
Notes receivable—current portion 45,141 51,664
Other receivables 348,815 449,422
Gross accounts receivable 2,593,602 3,161,947
Less:Allowance for uncollectables (206,079) (382,140)
Total accounts receivable,net $ 2,387,523 $ 2,779,807
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 $352,674 and
$363,850 at September 30, 2020 and 2019, 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.
(4) Capital Assets:
Changes in the Authority's capital assets for the years ended September 30, 2020 and 2019, were as
follows:
Balance Balance
October 1, September 30,
2019 Increases Decreases 2020
Capital assets not being depreciated:
Land $ 5,268,724 $ - $ - $ 5,268,724
Construction in progress 38,915,013 24,497,077 (41,361,324) 22,050,766
Total capital assets not being
depreciated 44,183,737 24,497,077 (41,361,324) 27,319,490
Capital assets being depreciated:
Machinery and equipment 378,038,630 41,171,900 (237,358) 418,973,172
Buildings 4,854,446 668,080 - 5,522,526
Accumulated depreciation (148,066,648) (12,017,722) 207,364 (159,877,006)
Total capital assets being depreciated,net 234,826,428 29,822,258 (29,994) 264,618,692
Capital Assets,net $279,010,165 $ 54,319,335 $(41,391,318) $291,938,182
- 15 -
CLAY COUNTY UTILITY AUTHORITY
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30,2020 AND 2019
(4) Capital Assets: (Continued)
Balance Balance
October 1, September 30,
2018 Increases Decreases 2019
Capital assets not being depreciated:
Land $ 5,268,724 $ - $ - $ 5,268,724
Construction in progress 32,843,566 21,526,319 (15,454,872) 38,915,013
Total capital assets not being
depreciated 38,112,290 21,526,319 (15,454,872) 44,183,737
Capital assets being depreciated:
Machinery and equipment 360,258,457 18,204,311 (424,138) 378,038,630
Buildings 4,794,617 59,829 - 4,854,446
Accumulated depreciation (137,292,318) (11,169,499) 395,169 (148,066,648)
Total capital assets being depreciated,net 227,760,756 7,094,641 (28,969) 234,826,428
Capital Assets,net $265,873,046 $ 28,620,960 $(15,483,841) $279,010,165
Depreciation expense for 2020 and 2019 was $11,931,108 and $11,069,168, respectively. Additional
depreciation amounts of$86,614 and$100,331 in 2020 and 2019,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$7,114,052 at September 30,2020.
(5) Compensated Absences:
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 (eighty 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 in Note 6.
Outstanding compensated absences, included in accrued expenses on the statements of net position,
totaled$742,278 and$637,190 at September 30,2020 and 2019,respectively.
- 16 -
CLAY COUNTY UTILITY AUTHORITY
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30,2020 AND 2019
(6) Bonds and Notes Payable:
Long-term debt at September 30,2020 and 2019,is comprised of the following:
2020 2019
$42,210,677 Utility System Revenue and Refunding Note, Series 2015;
with variable payment amounts due semi-annually and principal
payments due from 2016 through 2031. Interest is fixed at 2.82%. $38,664,255 $40,255,203
$48,495,000 Utility System Revenue and Refunding Note, Series 2019;
with variable payment amounts due semi-annually and principal
payments due from 2020 through 2039. Interest is fixed at 2.03%. 46,880,000 -
$10,000,000 Clay County Utility Authority Utilities System Revenue
Note, Series 2009; due in semi-annual installments commencing on May
1, 2009 through 2029, with interest at 4.24%. Interest rate amended to
2.97%in August 2013. Paid off in early 2020. - 5,593,468
$10,236,041 Utility System Revenue and Refunding Bonds, Series 2012;
due in annual installments varying from $237,103 to $1,901,056 plus
interest payable semi-annually at 1.86%through 2024. 5,815,365 7,226,643
$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 amendment. 12,317,203 12,443,590
$4,066,297 Clean Water State Revolving Funds; due in semi-annual
installments commencing on November 15, 2010, through 2030 with
interest at 2.92%. Paid off in early 2020. - 2,513,724
$10,300,628 Clean Water State Revolving Fund; due in semi-annual
installments commencing on May 15, 2010, through 2030 with interest
ranging from 2.85%to 3.24%. Paid off in early 2020. - 5,710,250
$461,195 The School Board of Clay County,Florida,present value annual
services of capital lease in which ownership will be transferred at the
end of the term in 2021. 34,587 76,595
$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 January 15, 2017,through 2032. 915,866 1,011,168
$1,430,069 payable to a software vendor in conjunction with a server and
enterprise software licensing agreement; due in annual installments of
$286,013 including interest ranging from 0% to 4.20%, beginning on
February 1,2019,through 2023. 800,041 1,049,055
Bonds and notes payable 105,427,317 75,879,696
Less: Current portion of bonds and notes payable (6,919,315) (5,278,625)
Long-term bonds and notes payable,net $ 98,508,002 $ 70,601,071
- 17 -
CLAY COUNTY UTILITY AUTHORITY
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30,2020 AND 2019
6) Bonds and Notes Payable: (Continued)
Activity in bonds and notes payable for the years ended September 30,2020 and 2019, is as follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
2020 $ 75,879,696 $ 48,753,960 $ (18,957,325) $105,427,317 $ 6,919,315
2019 $ 76,038,012 $ 4,810,983 $ (4,969,299) $ 75,879,696 $ 5,278,625
Debt service requirements to maturity are as follows at September 30,2020:
Total Debt
September 30 Principal Interest Service
2021 $ 6,919,315 $ 2,304,745 $ 9,224,060
2022 7,034,886 2,146,503 9,181,389
2023 7,188,551 1,994,374 9,182,925
2024 7,059,158 1,842,498 8,901,656
2025 7,209,282 1,673,039 8,882,321
2026—2030 38,539,747 5,774,980 44,314,727
2031 —2035 21,037,004 1,805,983 22,842,987
2036—2040 10,439,374 454,352 10,893,726
Totals $105,427,317 $ 17,996,474 $ 123,423,791
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) 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 payroll for employees
covered by this plan for the years ended September 30, 2020 and 2019, was $11,078,030 and
$10,217,550, respectively, and the total payroll was $11,084,747 and $10,364,185 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
$1,107,803 and$1,021,755 for the years ended September 30,2020 and 2019,respectively.
(8) 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.
- 18 -
CLAY COUNTY UTILITY AUTHORITY
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30,2020 AND 2019
(9) 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, 2020,the Authority did not reduce
insurance coverage levels in place as of September 30, 2019. The Authority has no settled claims
resulting from these risks that exceeded its commercial coverage in any of the past three fiscal years.
(10) 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 30,2020.As such,no OPEB liability has been recorded.
(11) 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, 2020, no connections have been made in this development and total future connection
fee credits available to the developer totaled$2,091,708.
During the year ended September 30, 2020, local, U.S., and world governments have encouraged self-
isolation to curtail the spread of the global pandemic, coronavirus disease (COVID-19), by mandating
temporary work stoppage in many sectors and imposing limitations on travel and size and duration of
group meetings. Most industries are experiencing disruption to business operations and the impact of
reduced consumer spending. There is unprecedented uncertainty surrounding the duration of the
pandemic, its potential economic ramifications, and any government actions to mitigate them.
Accordingly, while management cannot quantify the financial and other impact to the Authority as of
December 14, 2020 management believes that a material impact on the Authority's net position and
results of future operations is reasonably possible.
- 19 -
CLAY COUNTY UTILITY AUTHORITY
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30,2020 AND 2019
(12) 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:
(a) GASB issued Statement No. 87, Leases, in June 2017. GASB 87 increases the usefulness of
governments' financial statements by requiring recognition of certain lease assets and
liabilities for leases that previously were classified as operating leases and recognized as
inflows of resources or outflows of resources based on the payment provisions of the contract.
It establishes a single model for lease accounting based on the foundational principle that
leases are financings of the right to use an underlying asset. The provisions in GASB 87 are
effective for periods beginning after June 15,2021.
-20 -
J1A James Moore
Certified Public Accountants and Consultants
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 of America, the financial statements of the Clay
County Utility Authority(the Authority) as of and for the year ended September 30, 2020, 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 14,2020.
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 entity'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.
-21 -
121 Executive Circle 133 East Indiana Avenue 5931 NW 1st Place 2477 Tim Gamble Place,Suite 200
Daytona Beach,FL 32114-1180 DeLand,FL 32724-4329 Gainesville,FL 32607-2063 Tallahassee,FL 32308-4386
Telephone:386-257-4100 Telephone:386-738-3300 Telephone:352-378-1331 Telephone:850-386-6184
Website:www.jmco.com I Email: info@jmco.com I Member of AGN International with offices in principal cities worldwide
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.
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 entity'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.
al*I6 (IIIIO+C • LB. t ?.L.
Daytona Beach,Florida
December 14,2020
-22 -
AA James Moore
Certified Public Accountants and Consultants
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, 2020, and have issued our report thereon dated December 14,
2020.
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
Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance
with Government Auditing Standards; Independent Auditors' Report on Compliance for Each Major State
Project and Report on Internal Control over Compliance in Accordance with Chapter 10.550,Rules of the
Auditor General; Schedule of Findings and Questioned Costs; 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 14, 2020, 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. Corrective actions have been taken to address all findings and recommendations made in the
preceding financial audit report.
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.
-23 -
121 Executive Circle 133 East Indiana Avenue 5931 NW 1st Place 2477 Tim Gamble Place,Suite 200
Daytona Beach,FL 32114-1180 DeLand,FL 32724-4329 Gainesville,FL 32607-2063 Tallahassee,FL 32308-4386
Telephone:386-257-4100 Telephone:386-738-3300 Telephone:352-378-1331 Telephone:850-386-6184
Website:www.jmco.com I Email: info@jmco.com I Member of AGN International with offices in principal cities worldwide
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 report 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.
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.
atv.4-4 (il/lam 7 { .I
Daytona Beach,Florida
December 14,2020
-24 -
.4A James Moore
Certified Public Accountants and Consultants
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, for the year ended September 30, 2020. The
Authority's management is responsible for the Authority's compliance with those requirements. Our
responsibility is to express an opinion on the Authority's compliance based on our examination.
Our examination was conducted in accordance with attestation standards established by the American
Institute of Certified Public Accountants. Those standards require that we plan and perform the
examination to obtain reasonable assurance about whether the Authority complied with Section 218.415,
Florida Statutes, Local Government Investment Policies, for the year ended September 30, 2020, in all
material respects. An examination involves performing procedures to obtain evidence about the
Authority's compliance with those requirements. The nature,timing, and extent of the procedures selected
depend on our judgment, including an assessment of risks of material noncompliance with those
requirements, 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.
In our opinion, the Clay County Utility Authority complied, in all material respects, with the
aforementioned requirements for the year ended September 30, 2020.
00•V I ( . ?.1 .
Daytona Beach,Florida
December 14,2020
-25 -
121 Executive Circle 133 East Indiana Avenue 5931 NW 1st Place 2477 Tim Gamble Place,Suite 200
Daytona Beach,FL 32114-1180 DeLand,FL 32724-4329 Gainesville,FL 32607-2063 Tallahassee,FL 32308-4386
Telephone:386-257-4100 Telephone:386-738-3300 Telephone:352-378-1331 Telephone:850-386-6184
Website:www.jmco.com I Email: info@jmco.com I Member of AGN International with offices in principal cities worldwide