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

purchases insurance through commercial carriers. Insurance coverage for workers’ compensation, liability, casualty, inland marine, flood, police accidental death, public officials’ bonds, fiduciary and fuel tanks were purchased from several commercial carriers during the year ended September 30, 2023. There has been no significant reduction in insurance coverage from the prior year. Commercial insurance coverage has been sufficient to cover all claims made in the prior three fiscal years. 21. COMMITMENTS AND CONTINGENCIES Grants Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time, although the City expects such amount, if any, to be immaterial. 82  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2023 21. COMMITMENTS AND CONTINGENCIES – CONTINUED Fort Walton Beach Housing Authority (FWBHA) Development Project The FWBHA has applied to the Florida Housing Finance Corporation for low-income housing tax credits (LIHTC) for the Bayside Gardens redevelopment of Charlie Hill Terrace. In order to make the application more competitive, the FWBHA requested a commitment of $340,000 from the City as the Local Government Area of Opportunity (LGAO). The City Council adopted a resolution in fiscal year 2021 to commit the funding requested in the form of a 50% grant and 50% loan to the FWBHA. As of the date of this report, the FWBHA is awaiting a final decision on the application filed with the Florida Housing Finance Corporation. Workforce Housing Incentive Fund In May 2022, the City Council adopted a resolution establishing the Workforce Housing Incentive Fund, which shall be managed by the City’s Growth Management Department. The funds will be used in accordance with guidelines established in section 4.10 of the City’s Land Development Code and any requests for funding will be made in the form of development agreements and require City Council approval. Requests for funding may either be approved as up-front payments or as reimbursements once projects are completed. The City Council shall determine the manner of payments to recipients. The resolution sets forth an initial commitment of $1,500,000 from the City’s General Fund resources to the Workforce Housing Incentive Fund. The City awarded $123,708 from the Workforce Housing Incentive Fund during the year ended September 30, 2023, for development projects. Wastewater Service Interlocal Agreement with Okaloosa County In 2009, the City adopted the Wastewater Service Interlocal Agreement with Okaloosa County (Agreement). The Agreement outlines a long–term association with Okaloosa County Water & Sewer for the treatment of the City’s influent wastewater flow at a set percentage of the County’s base sewer rate plus a locked-in annual rate escalator. The agreement provides other ancillary benefits to the City such as the provision of “no cost” tertiary treated effluent for use as irrigation water at the City’s’ 36–hole municipal Golf Club. The Agreement is effective for 30 years and can be automatically extended for up to two additional terms for a period of ten years for each extension term. On a monthly basis, the County bills the City at a rate equal to $2.77 per each 1,000 gallons of wastewater flow. Additionally, the City pays to the County the Sewer Readiness to Serve Fee, which is equal to $5,507 per month. Annually, the rate per thousand and the Readiness to Serve Fee increases by 3%. Fees paid for wastewater treatment to Okaloosa County, Florida during the year ended September 30, 2023, were $2,421,919. 83  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2023 21. COMMITMENTS AND CONTINGENCIES – CONTINUED Wastewater Service Interlocal Agreement with Okaloosa County – Continued The minimum commitment by the City under the Agreement is as follows: Fiscal Year Ending September 30 2024 $ 67,239 2025 69,256 2026 71,334 2027 73,474 2028 75,678 2029 through 2033 413,836 2034 through 2038 479,749 2039 104,755 Total $ 1,355,321 22. SUBSEQUENT EVENTS Artificial Turf Contract In January 2024, the City entered into an agreement with a specialty contractor to install artificial sports turf for five baseball/softball fields at the Preston Hood Athletic Complex and 12 soccer goal boxes at the Oakland Heights athletic fields for a total contract price of $794,260. The project is expected to be completed in May 2024. 84 REQUIRED SUPPLEMENTARY INFORMATION  CITY OF FORT WALTON BEACH, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL (UNAUDITED) FOR THE YEAR ENDED SEPTEMBER 30, 2023 Variance with Final Budget - Budgeted Amounts Positive Original Final Actual (Negative) REVENUES Taxes $ 13,158,331 $ 13,158,331 $ 13,833,548 $ 675,217 Permits and fees 3,256,178 3,276,428 3,707,886 431,458 Intergovernmental 6,917,455 8,475,376 7,636,947 (838,429) Charges for services 3,338,326 3,343,009 3,743,367 400,358 Fines 64,463 64,463 190,708 126,245 Investment income 25,000 25,000 699,261 674,261 Miscellaneous 668,290 722,240 875,077 152,837 Total revenues 27,428,043 29,064,847 30,686,794 1,621,947 EXPENDITURES Current General governmental services 5,369,630 5,423,787 4,407,665 1,016,122 Public safety 14,360,298 14,569,302 13,905,764 663,538 Physical environment 418,557 418,557 434,119 (15,562) Transportation 814,474 2,321,765 938,417 1,383,348 Economic environment 87,500 87,500 19,500 68,000 Culture and recreation 5,702,918 5,779,721 5,170,888 608,833 Capital outlay 3,933,552 9,604,954 3,916,725 5,688,229 Debt service - - 764,077 (764,077) Total expenditures 30,686,929 38,205,586 29,557,155 8,648,431 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (3,258,886) (9,140,739) 1,129,639 10,270,378 OTHER FINANCING SOURCES (USES) Sale of general capital assets - - 4,668,757 4,668,757 Issuance of financing contracts - - 304,825 304,825 Issuance of subscription liabilities - - 971,904 971,904 Transfers in 1,090,895 1,090,895 1,797,765 706,870 Transfers out (38,400) (2,400,331) (2,441,479) (41,148) Total other financing sources (uses) 1,052,495 (1,309,436) 5,301,772 6,611,208 NET CHANGE IN FUND BALANCE (2,206,391) (10,450,175) 6,431,411 16,881,586 FUND BALANCE AT BEGINNING OF YEAR 2,206,391 10,450,175 27,254,378 16,804,203 FUND BALANCE AT END OF YEAR $ - $ - $ 33,685,789 $ 33,685,789 See notes to the required supplementary information. 85  CITY OF FORT WALTON BEACH, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION COMMUNITY REDEVELOPMENT AGENCY SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL (UNAUDITED) FOR THE YEAR ENDED SEPTEMBER 30, 2023 Variance with Final Budget - Budgeted Amounts Positive Original Final Actual (Negative) REVENUES Taxes $ 1,510,607 $ 1,510,607 $ 1,510,607 $ - Permits and fees - - 210,673 210,673 Intergovernmental 2,757,390 2,757,390 2,257,919 (499,471) Investment income - - 51,201 51,201 Miscellaneous - - 112,761 112,761 Total revenues 4,267,997 4,267,997 4,143,161 (124,836) EXPENDITURES Current Public safety 413,457 413,457 333,462 79,995 Economic environment 2,616,088 2,616,088 755,547 1,860,541 Capital outlay 630,910 2,254,999 2,062,487 192,512 Total expenditures 3,660,455 5,284,544 3,151,496 2,133,048 NET CHANGE IN FUND BALANCE 607,542