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

Obligations September 30 Principal Interest Principal Interest Principal Interest 2024 $ 498,000 $ 165,944 $ 762,594 $ 180,773 $ 63,549 $ 6,111 2025 512,000 151,402 777,152 166,215 66,553 3,309 2026 527,000 136,452 791,988 151,379 35,109 491 2027 542,000 121,063 807,107 136,260 806 4 2028 558,000 105,237 822,515 120,852 - - 2029-2033 3,046,000 271,939 4,354,186 362,648 - - 2034-2038 - - 1,388,584 26,466 - - Total $ 5,683,000 $ 952,037 $ 9,704,126 $ 1,144,593 $ 166,017 $ 9,915 15. COMMENTS REQUIRED BY THE BOND AND ORDINANCES Capital Improvement Refunding Revenue Note, Series 2013 1. The balance sheet and statement of revenues, expenditures, and changes in fund balance of the Debt Service Fund are shown in the financial section of the report. 2. The City is required to establish sinking fund amounts sufficient to pay all principal and interest becoming due on the notes on the next semiannual payment date. The sinking fund was not required to be funded at September 30, 2023. 3. The City is not aware of any instances of noncompliance with the debt covenants. Capital Improvement Revenue Note, Series 2013A 1. The balance sheet and statement of revenues, expenditures, and changes in fund balance of the Debt Service Fund are shown in the financial section of the report. 2. The City is required to establish sinking fund amounts sufficient to pay all principal and interest becoming due on the notes on the next semiannual payment date. The sinking fund was not required to be funded at September 30, 2023. 3. The City is not aware of any instances of noncompliance with the debt covenants. 78  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2023 15. COMMENTS REQUIRED BY THE BOND AND ORDINANCES – CONTINUED Capital Improvement Revenue Bonds, Series 2018 1. The balance sheet and statement of revenues, expenditures, and changes in fund balance of the Debt Service Fund are shown in the financial section of the report. 2. The City is required to establish sinking fund amounts sufficient to pay all principal and interest becoming due on the notes on the next semiannual payment date. The sinking fund was not required to be funded at September 30, 2023. 3. The City is not aware of any instances of noncompliance with the debt covenants. Golf Course Revenue Note, Series 2021 1. The balance sheet and statement of revenues, expenditures, and changes in fund balance of the Debt Service Fund are shown in the financial section of the report. 2. The City is required to establish sinking fund amounts sufficient to pay all principal and interest becoming due on the notes on the next semiannual payment date. The sinking fund was not required to be funded at September 30, 2023. 3. The City is not aware of any instances of noncompliance with the debt covenants. Utility System Revenue Refunding Note, Series 2015 1. The statement of net position and statement of revenues, expenses, and changes in net position of the Utility Fund are shown in the financial section of the report. 2. Net revenues pledged consist of gross revenues less costs of operation and maintenance. The net revenues pledged in fiscal year 2023 were approximately $3,946,746. 3. The debt issued refunded Series 2005 bond used for system improvements. 4. The term of the pledge commitment ends in January 2033. 5. The pledged revenues needed to meet the rate covenants in fiscal year 2023 were $830,096. The covenant is based upon 125% of the annual debt service requirement. 6. The pledged revenues exceeded the debt service requirements by $3,116,650 in fiscal year 2023. 7. The City is not aware of any instances of noncompliance with the debt covenants. 79  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2023 16. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS The composition of interfund balances as of September 30, 2023, was as follows: Due to/from Other Funds Receivable Fund Payable Fund Amount General Community Development Block Grant $ 67,451 Advance to/from Other Funds Receivable Fund Payable Fund Amount Sanitation General $ 54,574 General Fund receivables from the Community Development Block Grant Fund are the result of eliminating a temporary deficit cash balance. On September 30, 2014, the City’s Sanitation Fund loaned the General Fund $500,000 to purchase a Fire Engine. The loan from the Sanitation Fund will be paid back over a 10-year period at an interest rate of 2.00%. The balance of the advance as of September 30, 2023, is $54,574. The composition of interfund transfers for the year ended September 30, 2023, was as follows: Transfers In Other Governmental Transfers Out General Fund Funds Total General Fund $ - $ 2,441,479 $ 2,441,479 Utilities Fund 1,239,251 - 1,239,251 Sanitation Fund 360,348 - 360,348 Stormwater Fund 198,166 - 198,166 $ 1,797,765 $ 2,441,479 $ 4,239,244 The transfers out of the General Fund were $2,441,479. These transfers consist of a $2,406,861 transfer to the Debt Service Fund (Other Governmental Fund) for principal and interest payments on debt, and a $34,618 transfer to the Beal Memorial Cemetery Perpetual Care Fund (Other Governmental Fund) for permanent maintenance. Transfers into the General Fund of $1,797,765 consist of franchise fees, compensation for heavy trucks wear and tear on roadways, and a portion of the debt service for the new field office complex from the enterprise funds representing their portion of use of the facility. 80  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2023 17. GOVERNMENTAL FUND BALANCES At September 30, 2023, the City's governmental fund balances were classified as follows: Community Other Total Redevelopment Governmental Governmental General Fund Agency Funds Funds Nonspendable Inventory $ 311,357 $ - $ - $ 311,357 Restricted for Public safety - - 1,566,532 1,566,532 Debt service - - 21,156 21,156 Improvement districts - 6,225,881 - 6,225,881 Library capital projects 132,030 - - 132,030 Discretionary sales taxes 7,101,953 - - 7,101,953 Other purposes 9,127 - - 9,127 Total restricted 7,243,110 6,225,881 1,587,688 15,056,679 Committed Affordable housing projects 1,716,292 - - 1,716,292 Cemetery maintenance 16,412 - 3,814,516 3,830,928 Natural disaster recovery 9,823,759 - - 9,823,759 Total committed 11,556,463 - 3,814,516 15,370,979 Assigned for Capital expenditures 5,222,717 - - 5,222,717 Long-term debt 850,000 - - 850,000 Other purposes 3,518,146 - - 3,518,146 Total assigned 9,590,863 - - 9,590,863 Unassigned 4,983,996 - (19,782) 4,964,214 $ 33,685,789 $ 6,225,881 $ 5,382,422 $ 45,294,092 The Community Development Block Grant special revenue fund had a deficit fund balance at year end. The deficit will be eliminated by future transfers from other funds and by future grant funding. 81  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2023 18. ENCUMBRANCES The amount of encumbrances outstanding as of September 30, 2023, were as follows: Governmental Funds – General Fund $ 4,936,403 Community Redevelopment Agency Fund 2,880,194 Other Governmental Funds 17,088 $ 7,833,685 Encumbrances at year end do not constitute expenditures or liabilities; therefore, they are not reflected in the statement of revenues, expenditures, and changes in fund balances. 19. EXPENDITURES IN EXCESS OF BUDGETED APPROPRIATIONS The following funds had an excess of expenditures over final budgeted appropriations for the year ended September 30, 2023: Excess Over Fund Budget CDBG Fund $ 19,489 Debt Service Fund $ 125,679 20. RISK MANAGEMENT The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; employee medical benefits and natural disasters. The City