SOUTHWEST FLORIDA EXPRESSWAY AUTHORITY (A … · June 30, 2011 MDA I The management of the Southwest Florida Expressway Authority (the “Authority”) offers readers of our financial

SOUTHWEST FLORIDA EXPRESSWAY AUTHORITY (A Development Stage Enterprise)

BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION TOGETHER WITH

REPORTS OF INDEPENDENT AUDITOR

YEAR ENDED JUNE 30, 2011 (DATE OF DISSOLUTION) AND THE PERIOD

JULY 1, 2006 (DATE OF INCEPTION OF OPERATIONS) TO JUNE 30, 2011

TABLE OF CONTENTSPage(s)

INDEPENDENT AUDITORS' REPORT.............................................................................. 1-2

MANAGEMENT'S DISCUSSION AND ANALYSIS.......................................................... I-VII

BASIC FINANCIAL STATEMENTS

Statement of Net Assets (Deficit)............................................................................................. 3

Statements of Revenues, Expenses, and Changes in Net Assets (Deficit)............................... 4

Statements of Cash Flows........................................................................................................ 5

Notes to the Financial Statements............................................................................................ 6-21

SUPPLEMENTARY INFORMATION

Schedule of Revenues, Expenses and Changes in Net Assets (Deficit) - Budget (Non-GAAP Budgetary Basis) and Actual with Reconciliation to GAAP Basis - For the Year Ended June 30, 2011............................................................................. 22-23

ADDITIONAL REPORTS OF INDEPENDENT AUDITOR

Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Basic Basic Financial Statements Performed in Accordance with Government Auditing Standards …………………………………………………………… 24-25

Management Letter ..………………………………………………….……………………… 26-27

Response to Management Letter………………………...………………………………….… Exhibit

Board of Directors

Lars nAllen LLP

CPAs , Consultants & Advisors www.larsonallen.com

INDEPENDENT AUDITORS' REPORT

Southwest Florida Expressway Authority Fort Myers, Florida

We have audited the accompanying statement of net assets (deficit) in dissolution of the Southwest Florida Expressway Authority (the "Authority") as of June 30, 2011, and the related statements of revenues, expenses, and changes in net assets (deficit) and cash flows in dissolution for the year then ended and for the period from July 1, 2006 (date of inception of operations) to June 30, 2011. These financial statements are the responsibility of the Authority's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position in dissolution of the Authority as of June 30, 2011, and the changes in its financial position and its cash flows in dissolution for the year then ended and for the period from July 1, 2006 (date of inception of operations) to June 30, 2011, in conformity with accounting principles generally accepted in the United States of America.

As described in Note A, on March 10, 2011, the Board voted to formally dissolve the Authority as of June 30, 2011.

In accordance with Government Auditing Standards, we have also issued our report dated July 21, 2011, 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 and should be considered in assessing the results of our audit.

1 An independent member of Nexia International

Board of Directors Southwest Florida Expressway Authority

The management's discussion and analysis on pages I - VII is not a required part of the basic financial statements, but is supplementary information required by the accounting principals generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it.

Our audit was conducted for the purpose of forming an opinion on the basic financial statements of the Authority taken as a whole. The supplementary information presented on pages 22-23 is presented for purposes of additional analysis and is not a required part of the basic financial statements. The supplementary information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

Fort Myers, Florida July 21, 2011

2

~'-LP LarsonAlien LLP

MANAGEMENT'S DISCUSSION AND ANALYSIS

(MD&A)

SOUTHWEST FLORIDA EXPRESSWAY AUTHORITY

Required Supplementary Information

Management's Discussion and Analysis

June 30, 2011

MDA I

The management of the Southwest Florida Expressway Authority (the “Authority”) offers readers of our financial statements the following narrative overview and analysis of our financial activities for the year ended June 30, 2011. The year ended June 30, 2011 is the fifth and final year of operations for the Authority. Therefore, comparative information is provided in Management’s Discussion and Analysis reports. The Authority began operations on July 1, 2006 (date of inception of operations) and ceased as of June 30, 2011 (date of dissolution). The Authority had operated on a July 1 through June 30, fiscal year. The operations of the Authority are funded through loans received from Lee and Collier Counties (the “Counties”) and from a loan from the State of Florida (the “State”) Department of Transportation. During the year ended June 30, 2008, the State of Florida began construction of lanes 5 and 6 on Interstate 75 in portions of Lee and Collier Counties. Lanes were completed as of May, 2010. On June 9, 2010, the Board voted, due to the continued economic downturn and related reductions of traffic on I-75, to recommend dissolution of the Authority to the participating Counties and the State of Florida. Having received approval from Lee and Collier Counties and the State of Florida-DOT, the Board, on March 10, 2011, resolved to formally dissolve the Authority as of June 30, 2011. As such, Lee and Collier Counties voted to forgive the respective outstanding debt and accrued interest. The State of Florida-DOT required repayment of unspent debt proceeds, assignment of the SBA account and agreed to accept the Authority’s historical and financial records (become custodian). It also agreed to act as the Authority’s registered agent. Therefore, these financial statements reflect the Authority’s final accounting and final financial statements. The Authority is considered dissolved as of June 30, 2011. Basic Financial Statements Our basic financial statements are prepared using proprietary fund (enterprise fund) accounting that uses the same basis of accounting as private-sector business enterprises. The Authority is operated under one enterprise fund. Under this method of accounting, an economic resources measurement focus and an accrual basis of accounting is used. Revenue is recorded when earned and expenses are recorded when incurred. The basic financial statements include a Statement of Net Assets, a Statement of Revenues, Expenses and Changes in Net Assets and a Statement of Cash Flows. The Statement of Revenues, Expenses and Changes in Net Assets (Deficit) as well as the Statement of Cash Flows includes cumulative information from inception to June 30, 2011 (date of dissolution), as the Authority is a development stage entity. These financial statements are followed by notes to the financial statements. In addition to the basic financial statements, this report also contains supplementary information pertaining to budgetary comparisons.




June 30, 2011

MDA II

The Statement of Net Assets presents information on the Authority's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Authority is improving or deteriorating. The Statement of Revenues, Expenses and Changes in Net Assets reports the operating revenues and expenses and nonoperating revenues and expenses of the Authority for the fiscal year. The difference, operating income or loss, is combined with any capital grants and/or contributions to determine the change in net assets for the fiscal year. The net change, combined with the net assets at the end of the previous year, total to the net assets at the end of the current fiscal year. The Statement of Cash Flows reports cash and cash equivalent activities for the fiscal year resulting from operating activities, capital and related financing activities, noncapital and related financing activities and investing activities. The net result of these activities added to the beginning of the year cash balance, total to the cash and cash equivalents balance at the end of the current fiscal year.

Condensed Financial Information Condensed financial information from the Statements of Net Assets as of June 30, 2011 (date of dissolution) and June 30, 2010, and the Statement of Revenues, Expenses and Changes in Net Assets (Deficit) for the year ended June 30, 2011, and the year ended June 30, 2010 is as follows:




June 30, 2011

MDA III

2011 2010ASSETS

Current AssetsCash and investments -$ 145,985$

Restricted assets 4,969 84,497

TOTAL ASSETS 4,969$ 230,482$

LIABILITIES AND NET ASSETSCurrent Liabilities

Accounts and contracts payable -$ 12,050$

Due to other govts. payable from restr. assets - 19,249

TOTAL CURRENT LIABILITIES - 31,299

Long-term LiabilitiesLoans payable 967,781 1,951,150

Accrued interest on loans payable - 54,418

TOTAL LONG-TERM LIABILITIES 967,781 2,005,568

TOTAL LIABILITIES 967,781 2,036,867

Net AssetsInvested in capital assets, net of related debt - - Restricted 4,969 65,248

Unrestricted (Deficit) (967,781) (1,871,633)

TOTAL NET ASSETS (DEFICIT) (962,812) (1,806,385)

TOTAL LIABILITIES AND NET ASSETS 4,969$ 230,482$

OPERATING REVENUES

Toll fees -$ -$

TOTAL REVENUES - -

OPERATING EXPENSES

Operating expenses 136,079 110,422

TOTAL EXPENSES 136,079 110,422

OPERATING LOSS (136,079) (110,422)

Net non-operating revenues (expenses) (13,581) (15,183) LOSS BEFORE CAPITAL CONTRIBUTIONS (149,660) (125,605)

Capital contributions 993,233 - DECREASE IN NET ASSETS 843,573 (125,605)

NET ASSETS (DEFICIT) - BEGINNING OF YEAR (1,806,385) (1,680,780)

NET ASSETS (DEFICIT) - END OF YEAR (962,812)$ (1,806,385)$

The information contained in the condensed financial information table is used as the basis for the discussion presented on the following pages, surrounding the Authority's activities for the year ended June 30, 2011.




June 30, 2011

MDA IV

Financial Highlights

• The Authority finished the year ended June 30, 2011, with a net asset deficit balance of ($962,812) of which restricted net assets was $4,969 and unrestricted net assets (deficit) was ($967,781). The restricted net assets result from and are equal to restricted funds held from the unspent State loan proceeds and related earnings from the loan from the State of Florida Revolving Toll Facilities Loan. The Authority has operated via loans from Lee County, Collier County, and the State of Florida. Historically, the Authority did not originally anticipate operating revenue until 2011 or later; therefore, the year ended June 30, 2011 operations resulted in a deficit net assets balance as did the prior years.

• On March 10, 2011, in accordance with the approval of both Lee and Collier Counties and the State of Florida-DOT the Authority resolved to dissolve the Authority effective June 30, 2011.

• The Authority incurred an expected operating loss for the year ended June 30, 2011 of ($136,079).

• Both Lee and Collier Counties forgave their outstanding loans and accrued interest to the Authority in the amounts of $843,233 and $150,000, respectively.

• The financial statement for the year ended June 30, 2011 (date of dissolution) is the final accounting for the Authority.

Revenues The major sources of revenues and capital contributions for the years ended June 30, 2011 and June 30, 2010 are as follows:

2011 2010OPERATING REVENUES

Toll fees -$ -$ TOTAL OPERATING REVENUES - -

NON-OPERATING REVENUESInterest 234 1,080

TOTAL NON-OPERATING REVENUES 234 1,080

CAPITAL CONTRIBUTIONSCapital contributions - Lee County 843,233 - Capital contributions - Collier County 150,000 -

TOTAL CAPITAL CONTRIBUTIONS 993,233 -

TOTAL REVENUES AND CAPITAL CONTRIBUTIONS 993,467$ 1,080$




June 30, 2011

MDA V

Expenses The major expenses for the years ended June 30, 2011 and June 30, 2010 are as follows:

2011 2010OPERATING EXPENSES

Legal services 5,446$ 8,144$ Financial services 30,747 28,495 Architect & engineering services - - Other professional services 81,971 60,278 Auditing 17,450 13,000 Local travel - - Out-of-county travel - - Miscellaneous 290 330 Memberships 175 175

TOTAL OPERATING EXPENSES 136,079 110,422

NON-OPERATING EXPENSESInterest expense 13,815 16,263

TOTAL NON-OPERATING EXPENSES 13,815 16,263

TOTAL EXPENSES 149,894$ 126,685$

The Authority’s most significant expenses were general administration which were staff services provided to the Authority by third party consultants. General Fund Budgetary Highlights Over the course of the year, the Board of Directors did not amend the Authority’s budget. The budget was not amended due to the impending dissolution. No operating revenue was budgeted as it was not anticipated until toll revenue is initiated. The Authority expected to continue to fund its operations through use of existing loan proceeds. The most significant budget variation for the year ended June 30, 2011 was in the Other Professional Services expense line. The Authority budgeted to expend approximately $25,000 but expended approximately $82,000 due to the cost of converting all historical Authority documents to electronic format required as part of the dissolution of the Authority. The State of Florida-DOT agreed to be the Authority’s registered agent and custodian of the records contingent upon the records being converted to electronic format.




June 30, 2011

MDA VI

Debt The Authority was originally awarded loans/advances from Lee and Collier Counties and the State of Florida. The Loan repayment terms for the County loans are flexible and based upon initiation of toll revenue. The loan may be forgiven if operations fail to be initiated. Interest accrual is required by the Lee County loan at 2% payable from toll revenue. The Collier County Loan is interest free and the loan has no specific repayment terms. During the year ended June 30, 2011 the Counties agreed to the dissolution of the Authority and to forgive all their respective loans and the related accrued interest. The State of Florida Loan is more structured and has specific repayment terms. The Authority is segregating interest earnings on the remaining loan funds and intends to repay such amounts at such time as the loan proceeds were completely expended. The State of Florida-DOT agreed to the dissolution of the Authority effective June 30, 2011. The State of Florida-DOT agreed to waive repayment by the Authority but required the debt to remain outstanding. The State of Florida-DOT, as of May 1, 2011, agreed to be the registered agent and custodian of records for the Authority. Other Facts and Circumstances Operations of the Authority began July 1, 2006 and ended on June 30, 2011. At June 30, 2011, and during the year ended June 30, 2011, the Authority had no employees. Lee and Collier Counties initially loaned the Authority funds to operate. The State of Florida loaned the Authority money to conduct feasibility studies until the project could be bonded and/or was funded by tolls. The Authority’s and FDOT’s traffic and revenue consultants concurrently conducted evaluations on a variety of lane configurations for the expansion of I-75 to ten (10) lanes. Both studies concluded that ten (10) lanes will be needed on I-75 to meet Southwest Florida’s growing traffic demands. Both studies also concluded that the best configuration to generate sufficient tolls to finance the 10-lane configuration and best serve future traffic is four (4) general purpose (non-tolled) lanes on the outside and six (6) tolled express lanes on the inside. This configuration allows the public a choice to travel in the four (4) general purpose (non-tolled) lanes or pay a toll and travel in the six (6) express lanes. The consultants further predicted a reduction in current traffic flow on I-75 due to the economic downturn. On June 9, 2010, the Board voted, due to the continued economic downturn and related reduction of traffic on I-75, to recommend dissolution of the Authority to the participating Counties and the State of Florida. The Board in accordance with the approval of both Counties and the State of Florida-DOT resolved to dissolve the Authority as of June 30, 2011. The Authority’s financial




June 30, 2011

MDA VII

statements for the year ended June 30, 2011 represent the final accounting and final audit of the Authority. All historical records are now in the custody of the State of Florida-DOT. The State of Florida-DOT is now the Authority’s registered agent. All Authority activities and contracts were terminated as of June 30, 2011. The Florida Department of Transportation issued a Notice-to-Proceed for the six-laning of I-75 from Golden Gate Parkway to Colonial Boulevard and included improvements to the Immokalee Road interchange. During the year ended June 30, 2008, the State of Florida did begin construction of lanes 5 and 6 (non-tolled) in Lee and Collier Counties. These lanes were completed and opened in May 2010. The project was termed “IROX”. The Authority’s consultant and Florida’s Turnpike Enterprise had recommended that the two new inside lanes be tolled upon completion. This would have started a revenue stream that would allow the Authority to immediately begin the design, finance and construction process to further accelerate building the ten-lane section. Request for Information

This financial report is intended to provide an overview of the finances of the Authority for those with an interest in this organization. Questions concerning any information within this report may be directed to the Florida Department of Transportation, 605 Suwannee Street, Tallahassee, Florida 32399-0450, phone (850) 414-4644.

SOUTHWEST FLORIDA EXPRESSWAY AUTHORITY Page 3 of 27(A Development Stage Enterprise)STATEMENT OF NET ASSETS (DEFICIT)June 30, 2011 (Date of Dissolution)

Amount ASSETSCURRENT ASSETS UNRESTRICTED: Cash -$ Investments - cash equivalents -

TOTAL UNRESTRICTED -

RESTRICTED ASSETS Cash - Investments - cash equivalents 4,969

TOTAL RESTRICTED 4,969 TOTAL CURRENT ASSETS 4,969

TOTAL ASSETS 4,969$

LIABILITIES AND NET ASSETSCURRENT LIABILITIES Accounts and contracts payable -$ Due to other governments (Payable from Restricted Assets) -

TOTAL CURRENT LIABILITIES -

LONG-TERM LIABILITIES Loans payable 967,781 Accrued interest on loans payable -

TOTAL LONG-TERM LIABILITIES 967,781

TOTAL LIABILITIES 967,781

NET ASSETS (DEFICIT) Invested in capital assets, net of related debt - Restricted 4,969 Unrestricted, including deficit accumulated during the development stage of $962,812 (967,781)

TOTAL NET ASSETS (DEFICIT) (962,812)

TOTAL LIABILITIES AND NET ASSETS 4,969$

The accompanying notes are an integral part of this statement.

SOUTHWEST FLORIDA EXPRESSWAY AUTHORITY Page 4 of 27(A Development Stage Enterprise)STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS (DEFICIT)For the year ended June 30, 2011 (Date of Dissolution) and the period July 1, 2006(Date of Inception of Operations) to June 30, 2011 (Cumulative Totals)

Cumulative2011 Totals

OPERATING REVENUES Toll fees -$ -$

TOTAL OPERATING REVENUES - -

OPERATING EXPENSES Legal services 5,446 66,705 Financial services 30,747 127,178 Architect & engineering service - 445,073 Other professional services - feasibility/management consulting 81,971 1,227,540 Auditing 17,450 63,950 Local travel - 3,309 Out-of-county travel - 5,626 Freight & postage - 90 Miscellaneous 290 2,550 Memberships 175 10,225 Educational - 200

TOTAL OPERATING EXPENSES 136,079 1,952,446 OPERATING INCOME (LOSS) (136,079) (1,952,446)

NON-OPERATING REVENUES (EXPENSES) Interest income 234 64,534 Interest expense (13,815) (68,233)

NET NON-OPERATING REVENUES (EXPENSES) (13,581) (3,699)

LOSS BEFORE CAPITALCONTRIBUTIONS (149,660) (1,956,145)

CAPITAL CONTRIBUTIONS Lee County 843,233 843,333 Collier County 150,000 150,000

TOTAL CAPITAL CONTRIBUTIONS 993,233 993,333 INCREASE IN NET ASSETS 843,573 (962,812)

NET ASSETS (DEFICIT) - Beginning of the year (1,806,385) - NET ASSETS (DEFICIT)- End of the year (962,812)$ (962,812)$


SOUTHWEST FLORIDA EXPRESSWAY AUTHORITY(A Development Stage Enterprise)STATEMENTS OF CASH FLOWSFor the year ended June 30, 2011 (Date of Dissolution) and the period July 1, 2006 (Date of Inception of Operations) to June 30, 2011 (Cumulative Totals)


CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers -$ -$ Other income received - - Cash payments to vendors (146,219) (1,952,446) Interest paid - -

NET CASH USED INOPERATING ACTIVITIES (146,219) (1,952,446)

CASH FLOWS FROM INVESTING ACTIVITIES: Interest earned on investments 302 85,761

NET CASH PROVIDED BYINVESTING ACTIVITIES 302 85,761

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Principal payments Florida DOT (58,369) (58,369) Reduction - due to other gov. - interest paid on loan - Florida DOT (21,227) (21,227) Proceeds from debt issuance - Florida DOT - 1,026,150 Proceeds from debt issuance - Lee County - 775,000 Proceeds from debt issuance - Collier County - 150,000

NET CASH PROVIDED BY NONCAPITAL FINANCING ACTIVITIES (79,596) 1,871,554

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Capital contribution - Lee County - 100

NET CASH PROVIDED BY CAPITALAND RELATED FINANCING ACTIVITIES - 100

NET INCREASE (DECREASE) INCASH AND CASH EQUIVALENTS (225,513) 4,969

CASH AND CASH EQUIVALENTS-BEGINNING OF YEAR 230,482 -

CASH AND CASH EQUIVALENTS-END OF YEAR 4,969$ 4,969$

(Continued)


Page 5 of 27


RECONCILIATION OF OPERATING LOSS TONET CASH USED IN OPERATING ACTIVITIES:

OPERATING LOSS (136,079)$ (1,952,446)$

Adjustments to reconcile operating income (loss) to net cash used in operating activities:

Decrease in fair value of investments 1,910 (3,669)

Increase (decrease) in accounts and contracts payable (12,050) 3,669

TOTAL ADJUSTMENTS (10,140) -

NET CASH USED INOPERATING ACTIVITIES (146,219)$ (1,952,446)$

(Continued)

SOUTHWEST FLORIDA EXPRESSWAY AUTHORITY Page 6 of 27(A Development Stage Enterprise)NOTES TO THE FINANCIAL STATEMENTSJune 30, 2011 (Date of Dissolution)

NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES

Organization

The Southwest Florida Expressway Authority (the "Authority") was created by Lawsof Florida, Chapter 2005-154 via House Bill 401 on June 8, 2005. The Authoritywas further established by Florida Statute, Chapter 348.9932 on or about July 1,2005. The Authority encompasses Lee and Collier Counties. The enablinglegislation also established a process whereby Charlotte County could become partof the Authority. The Authority's purpose was to acquire, hold, construct, improve,maintain, operate, own, and lease in the capacity of lessor, the Southwest FloridaTransportation System, including tolled lanes and/or non-tolled facilities on InterstateHighway 75 (I-75). The express intention of the Authority was originally to construct,operate, and maintain additional lanes on Interstate Highway 75 within Lee andCollier Counties which were to be tolled and financially self sustaining.

On November 12, 2008, the Board voted to suspend all active operations due to thedownturn in the economy and the related prediction for reduced traffic flow on I-75.The Board voted to only meet to approve an annual budget and to maintain theentity's minimum reporting requirements, including approval of an annual budget andannual audit requirements. The Board also voted to meet periodically to monitor theneed to resurrect the planning and feasibility work to expand I-75 in accordance withits mission. As such, the timing of the refunding and/or repayment of the existing debtis uncertain at June 30, 2010 due to the pending status of the Authority and itsproject.

On June 9, 2010, the Board, in light of the continued downturn in the economy andrelated reduction in traffic on I-75, voted to recommend dissolution of the Authorityto the two (2) participating counties and the State of Florida. Such dissolution wasdependent upon approval by the Counties and the State of Florida. The Authoritywas required to comply with certain statutory reporting requirements until finaldetermination of status by the participating Counties and the State of Florida. Additionally, the status of the Authority's long term debt had to be determined.

On March 10, 2011, the Board voted to formally dissolve the Authority as of June30, 2011, in accordance with the approval of Lee and Collier Counties and the Stateof Florida. As such, the Counties forgave their existing loans and accrued interest


NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES, CONTINUED

Organization, continued

owed by the Authority. The State of Florida resolved to release the Authority fromits outstanding State-funded loans but to classify the loans as outstanding. Additionally, the State required all unspent State-funded debt proceeds to be repaidagainst the outstanding debt as well as the related accrued outstanding interestpayable. The Authority did transfer unspent debt proceeds of $79,596, except for$4,969 held in SBA accounts. The terms governing SBA accounts do not providefor the account balance to be transferred. Therefore, the SBA account's signatureauthority was changed to that of the State of Florida-DOT. All Authority recordswere transferred to the State of Florida-DOT as well. All operations and activity ofthe Authority ceased as of June 30, 2011. Florida Senate Bill #2152 sunset theAuthority effective July 1, 2011 by repealing Part X of Chapter 348, Florida Statutes.

The Board of Directors was made up of an eight (8) member Board. Membersincluded one County Commissioner from each, Lee and Collier Counties, one citizenappointee designated by the Lee County Commission, one citizen appointeedesignated by the Collier County Commission, a Lee County citizen appointed by theGovernor, a Collier County citizen appointed by the Governor, the ExecutiveDirector of the Southwest Florida Regional Planning Council and, as a non-votingmember, the District One Secretary for the Florida Department of Transportation. AtJune 30, 2011, the Authority had no employees. Operations of the Authority beganJuly 1, 2006 and ceased as of June 30, 2011.

Reporting entity

Southwest Florida Expressway Authority is an independent special purposegovernment and is financially independent of all other units of government. It isresponsible for financing its own activities and the payment of its own debt. TheBoard of Directors ("Board") has the responsibility to employ management that isresponsible for the day-to-day operations of the Authority. The Board has absoluteauthority over all funds included in the entity. Southwest Florida ExpresswayAuthority is not a component unit of any other governmental unit.



Reporting entity, continued

The Authority adheres to Statement of Governmental Accounting Standards Board(GASB) Statement Number 14, "Financial Reporting Entity", as amended by GASBStatement Number 39, "Determining Whether Certain Organizations Are ComponentUnits." These Statements require the financial statements of the Authority (theprimary government) to include its component units, if any. A component unit is alegally separate agency for which the primary government is financially accountable ororganizations whose exclusion would cause the basic financial statements to bemisleading because of the nature and significance of their relationship with the primarygovernment. Financial accountability is determined by the primary government'sability to appoint the voting majority of the entity's Board, impose its will on theorganization, the existence of a financial benefit/ burden relationship or fiscaldependency. Based on this criteria, there are no component units required to beincluded and there are no component units included in the Authority's basic financialstatements.

The following is a summary of the significant accounting polices used in thepreparation of these basic financial statements:

Government-wide Financial Statements

The government-wide financial statements (i.e., the Statement of Net Assets (Deficit)and the Statement of Revenues, Expenses and Changes in Net Assets (Deficit))report information on all of the activities of the Authority and do not emphasize fundtypes. These business-type activities comprise the primary government. Business-type activities rely on user fees and charges to support its activities ratherthan taxes and intergovernmental revenues. The purpose of the government-widefinancial statements is to allow the user to be able to determine if the Authority is in abetter or worse financial position than the prior year.

Government-wide financial statements are reported using the economic resourcesmeasurement focus and the accrual basis of accounting. Under the accrual basis ofaccounting, revenues, expenses, gains, losses, assets, and liabilities resulting fromexchange and exchange-like transactions are recognized when the exchange takes



Government-wide Financial Statements, continued

place. Revenues, expenses, gains, losses, assets, and liabilities resulting fromnonexchange transactions are recognized in accordance with the requirements ofGovernmental Accounting Standards Statement Number 33 "Accounting andFinancial Reporting for Non-Exchange Transactions." As such, grant revenue isrecorded as non-operating revenue and is reflected on the Statement of Revenue,Expenses and Changes in Net Assets (Deficit).

Amounts paid to acquire capital assets are capitalized as assets in thegovernment-wide financial statements, rather than reported as expenditures. Proceeds of long-term debt are recorded as liabilities in the government-widefinancial statements, rather than as other financing sources. Amounts paid to reducelong-term indebtedness of the reporting government are reported as a reduction ofthe related liability in the government-wide financial statements, rather than asexpenditures.

The Statement of Revenues, Expenditures and Changes in Net Assets (Deficit)demonstrates the degree to which the direct expenses of a given function are offset byprogram revenues. Direct expenses are those that are clearly identifiable with aspecific function or segment. Program revenues include: 1) charges to customers orapplicants who purchase, use or directly benefit for goods, services, or privilegesprovided by a given function and 2) grants and contributions that are restricted tomeeting the operational or capital improvements of a particular function.

Budgetary Information

As required, the Authority uses only one fund to account for its activities and,therefore, it is considered a major fund. The Authority has elected to reportbudgetary comparison of its major fund as supplementary information (SI). TheAuthority had operated on a July 1 through June 30 fiscal year.

Fund accounting

The Authority's financial practices are based upon fund accounting concepts. A fundis defined as a fiscal and accounting entity with a self-balancing set of accounts,



Fund accounting, continued

recording cash and other financial resources, together with all related liabilities and netassets (fund equity balances) and changes therein.

The accompanying financial statements reflect Business-Type Activities and areclassified as a Single Proprietary Fund Type - Enterprise Fund. This fund accountsfor the cost of services provided by the Authority as well as the revenues earned bythe Authority.

Business-Type Activities - Proprietary Fund Type

Enterprise Fund - An enterprise fund is used to account for operations (1) that arefinanced and operated in a manner similar to private business enterprises where theintent of the governing body is that the costs (expenses, including depreciation) ofproviding goods or services to the general public on a continuing basis be financed orrecovered primarily through user charges; or (2) where the governing body hasdecided that periodic determination of revenues earned, expenses incurred, and/ornet income is appropriate for capital maintenance, public policy, management control,accountability, or other purposes.

Measurement focus

Enterprise funds are accounted for on a flow of economic resources measurementfocus. With this measurement focus, assets and liabilities associated with theoperation of these funds are included on the Statement of Net Assets (Deficit). Proprietary fund-type operating statements present increases (i.e. revenues) anddecreases (i.e. expenses) in total net assets. Operating revenues and expenses resultfrom collection of tolls and construction and maintenance of certain expresswayswithin the Authority's boundaries. All other revenues and expenses are treated asnon-operating revenues and expenses.

When both restricted and unrestricted resources are available for use, it is theAuthority's policy to use restricted resources first, then unrestricted resources as theyare needed.



Basis of accounting

The proprietary fund type is presented on the accrual basis of accounting. Under theaccrual basis of accounting, revenues are recorded in the period earned and expensesare recorded in the period the liability is incurred.

Budgetary process

The Authority operates under a fixed budget for control purposes. The budget andamendments, if any, are approved by the Board of Directors. The budget isprepared on a Non-GAAP accrual basis, whereby items such as capital expendituresand debt payments are budgeted as expenses. Depreciation is not budgeted.

The annual budget serves as the legal authorization for expenditures. Expenditurescannot legally exceed the total amount budgeted. All budget amendments, whichchange the legally adopted total appropriation, are approved by the Board.

The Authority follows these procedures in establishing budgetary data.

1. During the spring of each year, management (consultants) submits to the Board ofDirectors a proposed operating budget for the fiscal year commencing on July 1. The operating budget includes proposed expenditures and the means of financingthem.

2. Public hearings are conducted to obtain citizen comments.3. The budget is adopted by approval of the Board of Directors.4. Budget amounts, as shown in the Supplementary Information, are as originally

adopted and as amended by the Board of Directors.5. The budget is adopted on a basis consistent with accounting principles generally

accepted in the United States of America, except as reflected in thesupplementary information and as noted above.

6. The level of control for appropriations is exercised at the fund level.7. Appropriations lapse at year-end.

The Board of Directors did not amend the budget during the year ended June 30,2011.



Cash

For the purpose of the Statements of Cash Flows, the Authority considers all highlyliquid investments (both unrestricted and restricted) with a maturity of three months orless when purchased, to be a cash equivalent, in accordance with Authority policy.

Capital assets and depreciation

The Authority had no capital assets as of June 30, 2011.

Restricted assets

These monies are restricted by the applicable loan agreement.

Vacation leave and other compensated absences

Accumulated unpaid vacation pay is accrued when incurred in the Proprietary fund. The method of accrual is in accordance with Statement of Governmental AccountingStandards Board Number 16, "Accounting for Compensated Absences" (GASB16). This Standard provides for the measurement of accrued vacation leave andother compensated absences using the pay or salary rates in effect at the Statement ofNet Assets (Deficit) date. It also requires additional amounts to be accrued forcertain salary-related payments associated with the payment of compensatedabsences such as FICA and retirement benefits. The Authority had no employees atJune 30, 2011 or during the year ended June 30, 2011.

Encumbrances

Encumbrance accounting, under which purchase orders, contracts and othercommitments for the expenditure of monies are recorded in order to reserve thatportion of the applicable appropriation, is not employed by the Authority because, atpresent, it is not considered necessary to assure budgetary control or to facilitateeffective cash planning and control.

Income taxes

The Authority, as a governmental unit, is exempt from income taxes under currentprovisions of the Internal Revenue Code and Florida Law.



Professional fees - feasibility/management consulting

The Authority expenses all consulting, management and feasibility consulting costsduring the development stage of operations. Actual construction-related costs for theproject will be capitalized.

Fund Equity

Grants, entitlements or shared revenues which are externally restricted for capitalacquisition or construction are treated as contributed capital but recorded as revenuewhen due the Authority. Contributed or donated capital assets are also treated ascontributed capital but recorded as revenue when due the Authority. Restricted netassets represent those portions of fund equity legally restricted by debt covenants forcurrent and future debt service.

Use of estimates

The preparation of basic financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires management to makeestimates and assumptions that affect the reported amounts of assets, liabilities anddisclosure of contingent assets and liabilities at the date of the financial statements andthe reported amounts of revenues and expenses during the reporting period. Actualresults could differ from those estimates.

Application of FASB Pronouncements to Proprietary Funds

In accordance with Governmental Accounting Standards Board (GASB) Statement20, "Accounting and Financial Reporting for Proprietary Funds and OtherGovernmental Entities That Use Proprietary Fund Accounting", the Authority haselected not to apply those FASB Statements and Interpretations issued afterNovember 30, 1989, that do not conflict with GASB pronouncements. Only GASBpronouncements issued after this date will be adopted by the Authority.


NOTE B - DEVELOPMENT STAGE OPERATIONS (Dissolved as of June 30, 2011)

Both Lee and Collier Counties initially loaned the Authority funds to operate until theproject could be bonded and/or was funded by toll revenue. The Authority's trafficand revenue consultant and Florida's Turnpike Enterprise (the State's tolling agency)concurrently conducted evaluations on a variety of lane configurations for theexpansion of I-75 to ten (10) lanes. Both studies concluded that ten (10) lanes willbe needed on I-75 to meet Southwest Florida's growing traffic demands. Bothstudies also concluded that the best configuration to generate sufficient tolls to financethe 10-lane configuration and best serve future traffic is four (4) general purpose(non-tolled) lanes on the outside and six (6) tolled express lanes on the inside. Thisconfiguration allows the public a choice to travel in the four (4) general purpose(non-tolled) lanes or pay a toll and travel in the six (6) express lanes.

The Florida Department of Transportation issued a Notice-to-Proceed for thesix-laning of I-75 from Golden Gate Parkway to Colonial Boulevard and includesimprovements to the Immokalee Road interchange. Construction of the two (2)additional non-tolled lanes was completed. The Authority's and FDOT's consultantsrecommended that the two new inside lanes be tolled upon completion. This wouldstart a revenue stream that would allow the Authority to immediately begin the design,finance and construction process to further accelerate building the ten-lane section.The Authority's and FDOT's consultants also noted that the economic downturnwould ease the current and predicted I-75 traffic levels. As such, based upon thesepredictions, financing options were difficult and the Board resolved to suspendoperations. The Board further resolved to preserve the Authority as a legal entity andbudgeted to ensure the Authority met its reporting requirements. The Board alsoresolved to meet periodically to monitor the ongoing need to resurrect its plan toexpand the I-75 corridor. Therefore, during the year ended June 30, 2010, theAuthority's only significant ongoing activities were to ensure proper reporting topreserve the Authority's legal status.

However, on June 9, 2010, the Board voted, due to the continued economicdownturn and related reduction of traffic on I-75, to recommend dissolution of theAuthority to the participating counties and the State of Florida. The Authority continued to comply with the statutory reporting requirements until final determinationof the Authority's status by the participating counties and the State of Florida. Additionally, the status of the Authority's long term debt had to be determined.


NOTE B - DEVELOPMENT STAGE OPERATIONS (Dissolved as of June 30, 2011),CONTINUED

On March 10, 2011, the Board voted to formally dissolve the Authority as of June30, 2011, in accordance with the approval of Lee and Collier Counties and the Stateof Florida. As such, the Counties forgave their existing loans and accrued interestowed by the Authority. The State of Florida resolved to release the Authority fromits outstanding State-funded loans but to classify the loans as outstanding. Additionally, the State required all unspent State-funded debt proceeds to be repaidagainst the outstanding debt as well as the related accrued outstanding interestpayable. The Authority did transfer unspent debt proceeds of $79,596, except for$4,969 held in SBA accounts. The terms governing SBA accounts do not providefor the account balance to be transferred. Therefore, the Account's signatureauthority was changed to that of the State of Florida-DOT. All Authority recordswere transferred to the State of Florida-DOT as well. All operations and activity ofthe Authority ceased as of June 30, 2011.

NOTE C - CASH AND CASH EQUIVALENTS INCLUDING INVESTMENTS

At June 30, 2011, cash and cash equivalents including investments (including bothrestricted and unrestricted cash and cash equivalents) was $4,969 including restrictedcash and investments of $4,969. The cash and investments were restricted due to theloan agreement.

Deposits

At June 30, 2011, the carrying amount of the Authority's deposits was$0 and the bank balance was $0. The Authority's deposits were held in demanddeposit accounts with institutions designated as qualified depositories by the StateTreasurer during the period July 1, 2010 through June 30, 2011.

The Authority's depository accounts were entirely covered by federal depositoryinsurance (FDIC) or by collateral pursuant to the Public Depository Security Act(Florida Statute 280) of the State of Florida.


NOTE C - CASH AND CASH EQUIVALENTS INCLUDING INVESTMENTS, CONTINUED

Investments (cash equivalents)

The Authority has resolved to abide by Florida Statutes Chapter 218.415(17) whichlimits investment options where there is no written investment policy.

The Authority adheres to GASB Statement Number 31, "Accounting and FinancialReporting for Certain Investments and for External Investment Pools." Under thisStatement, the Authority has elected to show all investments at fair value, with theexception of the Local Government Surplus Trust Funds Investment Pool (StateBoard of Administration) (SBA), an external 2a7 - like investment pool. The LocalGovernment Surplus Trust Funds Investment Pool's shares are stated at amortizedcost, which approximates fair value. These investments are subject to the risk thatthe market value of an investment, collateral protecting a deposit or securitiesunderlying a repurchase agreements, will decline.

The Authority's investments were as follows at June 30, 2011:BookValue Rating

Unrestricted Money market mutual fund -$ AAAm

Total unrestricted - Restricted SBA - Fund A 212 AAAm SBA - Fund B 4,757 N/A*

Total restricted 4,969 Total investments 4,969$

* For the period ended June 30, 2011, the Fund B balance of $4,757 was notrecorded at the NAV value of $3,891 as the adjustment to NAV would havehad a corresponding effect on the loan payable to the State of Florida-DOT. Assuch, the net adjustment would have had no net effect on the Authority's financialposition.

At June 30, 2011, the Authority reported investments of $4,757 foramounts held in the Fund B Surplus Funds Trust Fund (Fund B) administered by theState Board of Administration (SBA) pursuant to Section 218.405, Florida Statutes. The Authority's investments in the Fund B investment pool are similar to money


NOTE C - CASH AND CASH EQUIVALENTS INCLUDING INVESTMENTS, CONTINUED

Investments (cash equivalents), continued

market funds in which shares are owned in the fund rather than the underlyinginvestments. Securities and Exchange Commission Rule 2a7 permits money marketfunds to use amortized cost to maintain a constant net asset value (NAV) or usefluctuating NAV. Fund B uses fluctuating NAV for valuation of Fund B. The SBAhas taken the position that participants in the Fund B investment pool should discloseinformation related to interest rate risk and credit risk. Fund B was not rated by anational recognized statistical rating agency as of June 30, 2010. The weightedaverage life (WAL) of the SBA at April 30, 2011 was 66.1 days and the WAL ofFund B at June 30, 2010, was 8.05 years. A portfolio's WAL is the dollar weightedaverage length of time until securities held reach maturity is based on legal finalmaturity dates for Fund B as of June 30, 2010. WAL measures the sensitivity ofFund B to interest rate changes. Fund B did not participate in a securities-lendingprogram during the year ended June 30, 2010. (June 30, 2011 data not available atthe date of this financial statement)

The Authority's money market mutual fund account is not exposed to custodial creditrisk because the investments are not evidenced by securities that exist in physical orbook entry form. The money market mutual fund was not insured through FederalDepository Insurance. The Authority held no other types of investments during theyear ended June 30, 2011.

NOTE D - LOANS PAYABLE

The following is a summary of the Authority's loans payable for the period endedJune 30, 2011:

AmountBalances - July 1, 2010 1,951,150$ Additions - Deletions: State of Florida - DOT (58,369) Lee County Forgiveness of Debt (775,000) Collier County Forgiveness of Debt (150,000)

(983,369)

Balances - June 30, 2011 967,781$


NOTE D - LOANS PAYABLE, CONTINUED

Loans payable is comprised of the following at June 30, 2011:Amount

$1,026,150, interest-free, loan payable advanced October, 2006through the State of Florida Department of Transportation TollFacilities Revolving Trust Fund. The Authority originally intendedto repay the principal with proceeds from a bond issuance. TheAuthority repaid the accrued investment interest earnings of$21,227 during the year ended June 30, 2011. The Authorityalso paid principal of $58,369 from unspent debt proceeds. TheAuthority has also surrendered an SBA account to the State ofFlorida-DOT in the amount of $4,969 to ultimately be used tooffset the outstanding debt. 967,781$

$775,000 loan payable, advanced in two separate draws($150,000 November, 2006 and $625,000 February 2007),from Lee County. Interest accrues at a 2% annual percentagerate. Principal repayment was to be made from the Authority's tollrevenue funds; however, the Authority intended to repay theprincipal and accrued interest with proceeds from a bondissuance, the timing of which was unknown. During the yearended June 30, 2011, the County forgave the outstanding debtof $775,000 and accrued interest of $68,233. -

$150,000 loan payable advanced November, 2006 from CollierCounty. The loan is interest free and principal repayment was tobe made if and when the Authority has surplus toll revenues. TheAuthority intended to repay the principal with proceeds from abond issuance, the timing of which was unknown. During the year ended June 30, 2011, the County forgave the outstandingdebt of $150,000. -

967,781$


NOTE D - LOANS PAYABLE, CONTINUED

A summary of debt service requirements to maturity is as follows at June 30, 2011:

Principal* Interest Total967,781$ -$ 967,781$ 967,781$ -$ 967,781$

* The loan from the State is comprised of three (3) separate loan agreements.

The Board resolved to dissolve the Authority. The State of Florida-DOT, also,agreed to dissolve the Authority but elected to continue to designate the respectiveoutstanding debt, net of unspent debt proceeds, as outstanding.

The Authority paid the State of Florida-DOT accrued interest income of $21,227. The Authority recognized interest expense of $13,815 for the amount of accruedinterest expense forgiven by Lee County.

NOTE E - COMMITMENTS AND CONTINGENCIES

Litigation

The Authority may, from time to time, be involved as a defendant or a plaintiff incertain litigation and claims arising in the ordinary course of operations. At June 30,2011, the Authority maintained no third party insurance coverages. It is theunderstanding of the sponsoring Counties that they would defend any claim. TheCounties intend to vigorously defend all claims unless first settled. Potential losses, ifany, may be recoverable through insurance coverages. At June 30, 2011, theAuthority was not aware of any asserted or unasserted claims.

The Authority had contracted financial consulting, engineering and legal services. Costs were incurred only as service was requested. No cost commitments appear toexist subsequent to June 30, 2011. All costs incurred prior to June 30, 2011appear to have been paid or resolved.

SOUTHWEST FLORIDA EXPRESSWAY AUTHORITY Page 20 of 27 (A Development Stage Enterprise)NOTES TO THE FINANCIAL STATEMENTSJune 30, 2011 (Date of Dissolution)

NOTE F - OPERATIONAL SUPPORT

For the period from July 1, 2006 (inception of operations) through September 30,2007, the Authority's operations were supported in part by Lee and Collier Counties. As such, the partnerships with the Counties provided the Authority with its staff,office space, and other occupancy costs including, but not limited to, utilities,janitorial services, postage, and telephone service at no cost to the Authority. TheCounties also provided the Authority legal services, risk management, and the use ofoffice equipment at no cost. The benefit of such subsidies is not reflected within thefinancial statements, as no objective basis is available to value these benefits. As ofOctober 1, 2007, the Authority contracted its administrative services through thirdparty vendors. Such services include, but are not limited to, accounting, publicrelations, and routine administration and operational support. The cost of suchservices are expensed as incurred. The contracts contain no commitment unless timeor service was incurred, except as noted earlier. In deciding to dissolve the Authoritythe Board agreed to various final lump sum contracts to finalize the Authority'sdissolution. Management is aware of no outstanding commitments, other thandisclosed in the financial statements.

NOTE G - ECONOMIC DEPENDENCE

The Authority's operations are substantially dependent on the receipt of loans andgrants from the Florida Department of Transportation, Lee County, and CollierCounty. Loss of these funds and/or large decreases in this type of funding wouldhave a material effect on the Authority and a negative impact on overall operations. At June 30, 2011, the Authority's operations ceased and therefore, no additionalfunding requests will be made.

SOUTHWEST FLORIDA EXPRESSWAY AUTHORITY Page 21 of 27 (A Development Stage Enterprise)NOTES TO THE FINANCIAL STATEMENTSJune 30, 2011 (Date of Dissolution)

NOTE H - GOING CONCERN ISSUE

On June 9, 2010, the Board voted, due to the continued economic downturn andrelated reduction of traffic on I-75, to recommend dissolution of the Authority to theparticipating counties and the State of Florida. The Authority did receive theapproval to dissolve the Authority as of June 30, 2011, from both Counties and theState of Florida-DOT. Both Counties agreed to waive all of their respectiveoutstanding debt. The State of Florida required payment of the unspent State ofFlorida-DOT debt proceeds. As such, the Authority repaid accrued interestexpense of $21,227 and debt of $58,369. The Authority also transferred signatureauthority to the State-DOT over its SBA account of $4,969. The State required theAuthority to disclose the balance of the outstanding State debt at June 30, 2011. The State of Florida-DOT also agreed to take possession of all historical andfinancial records of the Authority and to become the Authority's registered agent.

SUPPLEMENTARY INFORMATION

SOUTHWEST FLORIDA EXPRESSWAY AUTHORITY Page 22 of 27(A Development Stage Enterprise)SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS (DEFICIT) BUDGET (Non-GAAP BUDGETARY BASIS) AND ACTUAL WITH RECONCILIATION TO GAAP BASISFor the year ended June 30, 2011 (Date of Dissolution)

Original FinalBudget Budget Actual Variance

OPERATING REVENUES Toll fees -$ -$ -$ -$

TOTAL OPERATING REVENUES - - - -

OPERATING EXPENSES Salaries - full-time regular - - - - Salaries - non-permanent - - - - Legal services 25,000 25,000 5,446 19,554 Financial services 25,000 25,000 30,747 (5,747) Architect & engineering services - - - - Other professional services 25,000 25,000 81,971 (56,971) Auditing 16,000 16,000 17,450 (1,450) Janitorial service - - - - Data processing-under $100,000 125 125 - 125 Local travel 375 375 375 Out-of-county travel - - - - Telecommunications - - - - Freight & postage - - - - Electric - - - - Water & sewer - - - - Trash, garbage & sludge - - - - Land, bldg, parking rent - - - - Promotional & advertising - - - - Miscellaneous - - 290 (290) General office supplies - - - - Minor equipment - - - - Memberships - - 175 (175) Educational - - - - Furniture & equipment - - - - Contingency - 10% 1st year 150,836 150,836 - 150,836

TOTAL OPERATING EXPENSES 242,336 242,336 136,079 106,257

OPERATING INCOME (LOSS) (242,336)$ (242,336)$ (136,079)$ 106,257$

SOUTHWEST FLORIDA EXPRESSWAY AUTHORITY Page 23 of 27(A Development Stage Enterprise)SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS (DEFICIT) BUDGET (Non-GAAP BUDGETARY BASIS) AND ACTUAL WITH RECONCILIATION TO GAAP BASIS - CONTINUEDFor the year ended June 30, 2011 (Date of Dissolution)

Original FinalBudget Budget Actual Variance

OPERATING INCOME (LOSS), BROUGHT FORWARD (242,336)$ (242,336)$ (136,079)$ 106,257$

NON-OPERATING REVENUES (EXPENSES)

Interest income 2,038 2,038 234 (1,804) Interest expense - Lee County - - (13,815) (13,815) Capital Contribution - Lee County - - 843,233 843,233 Capital Contribution - Collier County - - 150,000 150,000 Lee County 50% share loan 157,930 157,930 - (157,930) Collier County 50% share loan - - - - Toll Facilities Revolving Trust Fund Loan 82,368 82,368 - (82,368)

NET NON-OPERATING REVENUES (EXPENSES) 242,336 242,336 979,652 737,316

NET LOSS -$ -$ 843,573$ 843,573$

Reconciliation:

Net Loss (Non-GAAP Budgetary Basis) 843,573$

Debt proceeds -

Decrease in Net Assets (GAAP Basis) 843,573 Net Assets (Deficit) - Beginning of the year (1,806,385)

Net Assets (Deficit) - End of the year (962,812)$

ADDITIONAL REPORTS OFINDEPENDENT AUDITOR

Lars nAllen LLP

CPAs, Co n sulranrs & A dvi sors www.larsonallen.com Page 24 of27

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

Board of Directors Southwest Florida Expressway Authority Fort Myers, Florida .

We have audited the financial statements in dissolution of the Southwest Florida Expressway Authority (the "Authority") as of and for the year ended June 30, 2011, and have issued our report thereon dated July 21, 2011 . We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government

. Auditing Standards, issued by the Comptroller General of the United States. As described in Note A, on March 10, 2011 , the Board voted to formally dissolve the Authority as of June 30, 2011.

Internal Control Over Financial Reporting In planning and performing our audit, we considered the Authority's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the basic financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Authority's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Authority's internal control over financial reporting .

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or 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.

Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above.

I An independent member of Nexi. tnternational


Page 25 of27

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 determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

This report is intended solely for the information and use of the board of directors and management of the Authority and state awarding agencies, and is not intended to be and should not be used by anyone other than these specified parties.

Fort Myers, Florida July 21,2011

~'-LP LarsonAlien LLP

Board of Directors

Lars nAllen® LLP

CPAs, Co nsultants & Adviso rs www.larsonallen.com

MANAGEMENT LETTER

Southwest Florida Expressway Authority Fort Myers, Florida

Page 26 of27

We have audited the financial statements in dissolution of the Southwest Florida Expressway Authority (the "Authority"), as of and for the fiscal year ended June 30, 2011, and have issued our report thereon dated July 21 , 2011 .

We conducted our audit in accordance with auditing standards generally accepted in the United States of America; and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. We have issued our Report on Internal Control over Financial Reporting and on Compliance and Other Matters. Disclosures in this report, which is dated July 21, 2011, should be considered in conjunction with this management letter.

Additionally, our audit was conducted in accordance with Chapter 10.550, Rules of the Auditor General, which governs the conduct of local governmental entity audits performed in the State of Florida. This letter includes the following information, which is not included in the aforementioned auditors' reports:

• 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 significant findings and recommendations made in the preceding annual financial audit report. There were no significant findings or recommendations made in the preceding annual financial audit report.

• Section 10.554(1 )(i)2., Rules of the Auditor General, requires our audit to include a review of the provisions of Section 218.415, Florida Statutes, regarding the investment of public funds. In connection with our audit, we determined that the Authority complied with Section 218.415, Florida Statutes.

• Section 10.554(1 )(i)3., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations.

• Section 10.554(1)(i)4., Rules of the Auditor General, requires that we address violations of provisions of contracts and grant agreements, or abuse, that have an effect on the financial statements that is less than material but more than inconsequential. In connection with our audit, we did not have any such findings.


Page 27 of27

• Section 10.554(1)(i)5., Rules of the Auditor General, provides that the auditor may, based on professional judgment, report the following matters that have an inconsequential effect on financial statements, considering both quantitative and qualitative factors: (1) violations of provisions of contracts or grant agreements, fraud , illegal acts, or abuse, and (2) deficiencies in internal control that are not significant deficiencies. In connection with our audit, we did not have any such findings.

• Section 10.554(1 )(i)6., 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 Authority discloses this information in the notes to the financial statements.

• Section 10.554(1)(i)7.a., Rules of the Auditor General, requires a statement be included as to whether or not the local governmental entity has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and identification of the specific condition(s) met. In connection with our audit, we determined that the Authority met the condition described in Section 218.503(1)(e), Florida Statutes. The Authority reported a deficit in unrestricted net assets of $962,812 as of June 30, 2011 . On March 10, 2011, the Board voted to formally dissolve the Authority as of June 30, 2011 . All operations and activity of the Authority ceased as of June 30, 2011. The financial emergency condition met was not a result of deteriorating financial conditions.

• Section 10.554(1)(i)7.b., Rules of the Auditor General, requires that we determine whether the annual financial report for the Authority for the fiscal year ended June 30, 2011 , filed with the Florida Department of Financial Services pursuant to Section 218.32(1 )(a), Florida Statutes, is in agreement with the annual financial audit report for the fiscal year ended June 30, 2011 . In connection with our audit, we determined that these two reports were in agreement.

• Pursuant to Sections 10.554(1)(i)7.c. and 10.556(7), Rules of the Auditor General , we applied financial condition assessment procedures. 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.

Pursuant to Chapter 119, Florida Statutes, this management letter is a public record and its distribution is not limited. Auditing standards generally accepted in the United States of America require us to indicate that this letter is intended solely for the information and use of the board of directors, management and the Florida Auditor General , and is not intended to be and should not be used by anyone other than these specified parties.

Fort Myers, Florida July 21, 2011

~'-LP LarsonAllen LLP

EXHIBIT

July 21, 2011

William Monroe, Auditor General State of Florida 111 West Madison Street Claude Denson Pepper Building Tallahassee, Florida 32399‐1450 Dear Mr. Monroe: We are in receipt of the Auditors’ Report for the year ended June 30, 2011, for the Southwest Florida Expressway Authority. The Board of Directors for the Expressway Authority voted to cease operations and activity as of June 30, 2011. In addition, Florida Senate Bill #2152 sunset the Authority effective July 1, 2011 by repealing Part X of Chapter 348, Florida Statutes. The Board voted to approve the audited financial statements via e‐mail at their meeting on March 10, 2011. Very truly yours,

Amelia H. Davies Finance Director Wilbur Smith Associates

Documents

SOUTHWEST FLORIDA EXPRESSWAY AUTHORITY (A … · June 30, 2011 MDA I The management of the Southwest Florida Expressway Authority (the “Authority”) offers readers of our financial