Fort Walton Beach — Annual Comprehensive Financial Report, September 30, 2023 — reading text

(1,088,008) (550,103) (164,184) (1,802,295) Net cash provided by operating activities $ 7,366,896 $ 828,044 $ 450,655 $ 8,645,595 SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITES Capital grants receivable $ - $ - $ 110,746 $ 110,746 SUPPLEMENTAL DISCLOSURES OF NONCASH TRANSACTIONS Amortization of deferred loss on refunding $ 5,613 $ - $ - $ 5,613 See notes to the financial statements. 25  CITY OF FORT WALTON BEACH, FLORIDA FIDUCIARY FUNDS STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30, 2023 Employee Retirement Funds ASSETS Cash and cash equivalents $ 1,743,683 Investments, at fair value U.S. Government and Agency obligations 12,805,127 Corporate obligations 1,995,251 Corporate equity - Mutual funds and exchange-traded funds 64,471,296 Infrastructure investment funds 5,432,868 Real estate investment funds 11,368,580 Total investments 96,073,122 Accounts receivable 48,142 Due from other governments 606,529 TOTAL ASSETS 98,471,476 LIABILITIES Accounts payable 247,906 NET POSITION RESTRICTED FOR PENSIONS $ 98,223,570 See notes to the financial statements. 26  CITY OF FORT WALTON BEACH, FLORIDA FIDUCIARY FUNDS STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE YEAR ENDED SEPTEMBER 30, 2023 Employee Retirement Funds ADDITIONS Contributions Employer $ 3,249,012 Plan members 547,136 State of Florida 606,529 Total contributions 4,402,677 Investment income 9,213,525 Less investment expense (272,939) Net investment income 8,940,586 Miscellaneous revenue 1,815 TOTAL ADDITIONS 13,345,078 DEDUCTIONS Benefits and refunds paid Retirement payments 6,939,692 Disability payments 196,351 Refunds 84,606 Total benefits and refunds paid 7,220,649 Administrative expenses Legal 34,174 Contractual services 224,792 Other 127,004 Total administrative expenses 385,970 TOTAL DEDUCTIONS 7,606,619 CHANGE IN FIDUCIARY NET POSITION 5,738,459 NET POSITION RESTRICTED FOR PENSIONS Beginning of year 92,485,111 End of year $ 98,223,570 See notes to the financial statements. 27  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2023 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND DESCRIPTION OF THE CITY Description of the City The City of Fort Walton Beach, Florida, (the City) was originally chartered as a municipality under laws of the State of Florida Special Act of the Florida Legislature in 1937. The City Manager – Council form of government was established in 1953. As authorized by its charter, the City provides the following services: public safety (police, fire, and inspection), highways and streets, water and sewer, sanitation, stormwater, culture and recreation, public improvements, planning and zoning, and general administrative services. The financial statements of the City have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), as applicable to governmental units and the Uniform Accounting System mandated by Chapter 218.33, Florida Statutes. The Governmental Accounting Standards Board (GASB) is the standard–setting body for governmental accounting and financial reporting. The following is a summary of the more significant accounting policies of the City: The Reporting Entity A seven-member City Council and a Mayor govern the City, each elected at-large for four-year terms. The Council has no powers other than those expressly vested in it by State Statute and the City Charter, and their governmental powers cannot be delegated. As required by U.S. GAAP, these financial statements present the City of Fort Walton Beach (the primary government) and its blended component unit. In evaluating the City as a reporting entity, management has considered all potential component units for which the City may or may not be financially accountable and, as such, be included within the City's financial statements. Management utilized criteria set forth in the GASB literature for determining financial accountability of potential component units in evaluating all potential component units. In accordance with GASB guidance, the City (primary government) is financially accountable if it appoints a voting majority of the potential component unit's governing board and 1) it is able to impose its will on the organization or 2) there is a potential for the organization to provide specific financial benefit to or impose specific financial burden on the City. In addition, component units can be other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete. As of September 30, 2023, the City had one component unit, which has been presented in the financial statements of the primary government using the blended presentation method and is presented as a governmental fund type with a fiscal year end of September 30. The Fort Walton Beach Community Redevelopment Agency (the CRA) was formed in 1977 under the provisions of Chapter 163, Florida Statutes, to prepare a community redevelopment plan for a designated geographic area within the City of Fort Walton Beach, Florida. All the City's council members serve as the CRA’s Board of Directors. Therefore, the CRA’s governing body is the same as the governing body of the City. The CRA functions as a department of the City. City management has operational and fiscal responsibility for the CRA’s activities. The CRA has a separate standalone audit report that can be obtained by contacting the Growth Management Department, City Hall Annex, 105 Miracle Strip Parkway S.W., Fort Walton Beach, Florida 32548 or online at www.fwb.org. 28  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2023 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND DESCRIPTION OF THE CITY – CONTINUED The Reporting Entity – Continued The Fort Walton Beach Housing Authority (the Authority) is considered a related organization to the City rather than a component unit. The City Council appoints the board members of the Authority. However, the Authority's board operates independently of the City Council and does not create a financial burden or benefit to the City. Government-Wide and Fund Financial Statements The basic financial statements include both government-wide (based on the City as a whole) and fund financial statements. The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the non-fiduciary activities of the primary government and its component unit. For the most part, the effects of interfund activity have been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely, to a significant extent, on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate fund financial statements are provided for the governmental and proprietary funds. Major individual governmental funds and major enterprise funds are reported as separate columns in the fund financial statements. Separate fund financial statements for the fiduciary funds are disclosed within Note 8 of these financial statements. Measurement Focus and Basis of Accounting The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Pension plans recognize revenue when contributions are due as there is a statutory requirement to make the contribution. Property taxes are recorded as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and