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

(1,016,547) 991,665 2,008,212 FUND BALANCE AT BEGINNING OF YEAR - 1,016,547 5,234,216 4,217,669 FUND BALANCE AT END OF YEAR $ 607,542 $ - $ 6,225,881 $ 6,225,881 See notes to the required supplementary information. 86  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION SEPTEMBER 30, 2023 Budgetary data reflected in the accompanying schedules of revenues, expenditures, and changes in fund balance – budget and actual are established by the following procedures: Prior to September 1st of each year, proposed budgets are received by the City Council from the City Manager. These proposed expenditures, along with all estimated receipts, taxes to be levied, and balances expected to be brought forward are considered by the City Council. The City Council requires such changes as deemed necessary, sets proposed mileages, and establishes dates for tentative and final public budget hearings as prescribed by Florida Statutes. Proposed budgets are advertised in a newspaper of general circulation in the City. Public hearings are conducted for the purposes of receiving input, responding to complaints, and providing reasons and explanations for intended actions to all citizens participating. Prior to October 1st, the budget for all governmental and proprietary funds of the City is legally enacted through passage of a resolution. Budget amendments are periodically passed via resolutions throughout the fiscal year. Budgeted beginning fund balance in the accompanying financial statements reflects planned utilization of prior years' unassigned fund balance to the level required to accomplish current year objectives. The level of budgetary control (that is the level at which expenditures cannot legally exceed appropriations) has been established at the fund level. The City Manager and Finance Director are authorized to transfer budgeted amounts within departments of a fund and between departments of a fund; however, any revisions that alter the total expenditures of any fund must be approved by the City Council. Budget amounts reflected in the financial statements are originally adopted amounts as amended by action of the City Council by revision of fund totals. All amendments to the originally adopted amounts were made in a legally permissible manner. 87  CITY OF FORT WALTON BEACH, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS (UNAUDITED) GENERAL EMPLOYEES’ RETIREMENT FUND Reporting Date * 2023 2022 2021 2020 2019 2018 2017 2016 2015 Total Pension Liability Service cost $ 311,634 $ 330,178 $ 366,197 $ 372,064 $ 446,214 $ 504,055 $ 557,163 $ 569,712 $ 622,382 Interest 3,695,597 3,677,931 3,723,744 3,888,510 3,827,379 3,771,606 3,317,396 3,314,990 3,222,809 Differences between expected and actual experience (614,717) 275,286 60,721 (466,270) (265,877) (404,763) 400,221 (1,074,244) - 1 Changes of assumptions - 1,521,135 618,633 (768,706) - - 4,485,495 - - Benefit payments, including refunds of employee contributions (3,381,848) (3,366,874) (3,327,697) (3,161,812) (3,157,696) (3,056,444) (2,858,889) (2,676,038) (2,575,304) Net change in total pension liability 10,666 2,437,656 1,441,598 (136,214) 850,020 814,454 5,901,386 134,420 1,269,887 Total pension liability – beginning 54,173,531 51,735,875 50,294,277 50,430,491 49,580,471 48,766,017 42,864,631 42,730,211 41,460,324 Total pension liability – ending (a) 54,184,197 54,173,531 51,735,875 50,294,277 50,430,491 49,580,471 48,766,017 42,864,631 42,730,211 Plan Fiduciary Net Position Contributions – employer $ 580,847 $ 1,024,247 $ 1,419,339 $ 1,751,654 $ 2,006,925 $ 1,254,097 $ 1,280,082 $ 1,355,041 $ 1,296,450 Contributions – member 128,595 136,164 147,885 150,018 158,138 171,869 202,268 209,567 212,790 Net investment income (8,789,933) 10,772,183 4,869,412 1,788,274 4,975,937 4,967,834 4,031,981 (4,390) 3,228,153 Benefit payments, including refunds of employee contributions (3,381,848) (3,366,874) (3,327,697) (3,161,812) (3,157,696) (3,056,444) (2,858,889) (2,676,038) (2,575,304) Administrative expenses (41,837) (48,305) (50,568) (40,421) (49,518) (42,201) (35,704) (39,535) (42,483) Net change in plan fiduciary net position (11,504,176) 8,517,415 3,058,371 487,713 3,933,786 3,295,155 2,619,738 (1,155,355) 2,119,606 Plan fiduciary net position – beginning 59,999,067 51,481,652 48,423,281 47,935,568 44,001,782 40,706,627 38,086,889 39,242,244 37,122,638 Plan fiduciary net position – ending (b) 48,494,891 59,999,067 51,481,652 48,423,281 47,935,568 44,001,782 40,706,627 38,086,889 39,242,244 Net pension liability (asset) – ending (a) – (b) $ 5,689,306 $ (5,825,536) $ 254,223 $ 1,870,996 $ 2,494,923 $ 5,578,689 $ 8,059,390 $ 4,777,742 $ 3,487,967 Plan fiduciary net position as a percentage of the total pension liability 89.50% 110.75% 99.51% 96.28% 95.05% 88.75% 83.47% 88.85% 91.84% Covered payroll $ 2,571,886 $ 2,723,263 $ 2,957,684 $ 3,000,359 $ 3,162,762 $ 3,437,375 $ 4,045,350 $ 4,191,304 $ 4,255,801 Net pension liability as a percentage of covered payroll 221.21% -213.92% 8.60% 62.36% 78.88% 162.30% 199.23% 113.99% 81.96% Notes: 1 As a result of Chapter 2015-157, Laws of Florida, the assumed rates of mortality were changed to the assumptions used by the Florida Retirement System in its July 1, 2019, actuarial valuation for non-special risk lives, with appropriate risk and collar adjustments made based on plan demographics. The investment rate of return assumption was lowered from 7.60% to 7.30% for the 2021 reporting date. The investment rate of return assumption was lowered from 7.30% to 7.00% for the 2022 reporting date. * This schedule is intended to show information for ten years. Additional years will be displayed as they become available. 88  CITY OF FORT WALTON BEACH, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS (UNAUDITED) POLICE OFFICERS’ RETIREMENT FUND Reporting Date * 2023 2022 2021 2020 2019 2018 2017 2016 2015 Total Pension Liability Service cost $ 748,564 $ 699,264 $ 546,326 $ 384,431 $ 395,440 $ 334,061 $ 344,958 $ 336,234 $ 322,118 Interest 2,230,909 2,142,668 2,143,525 1,976,534 2,112,261 2,084,744 1,948,181 1,953,123 1,905,286 Change in excess state money - - (172,843) 40,065 20,893 8,823 - - - 3 Changes of benefit terms - - 1,428,025 - - - - - - Differences between expected and actual experiences (262,825) 476,947 (211,485) 283,813 (833,418) (343,066) (425,107) (659,966) - 2 Changes of assumptions - 682,631 46,143 584,615 (251,695) - 1,633,122 - - Benefit payments, including refunds of employee contributions (1,978,930) (1,900,983) (1,868,482) (1,851,074) (1,764,575) (1,821,727) (1,744,710) (1,655,069) (1,632,053) Net change in total pension liability 737,718 2,100,527 1,911,209 1,418,384 (321,094) 262,835 1,756,444 (25,678) 595,351 Total pension liability – beginning 32,111,029 30,010,502 28,099,293 26,680,909 27,002,003 26,739,168 24,982,724 25,008,402 24,413,051 Total pension liability – ending (a) 32,848,747 32,111,029 30,010,502 28,099,293 26,680,909 27,002,003 26,739,168 24,982,724 25,008,402 Plan Fiduciary Net Position 1 Contributions – employer $ 1,314,250 $ 1,232,753 $ 806,946 $ 732,187 $ 830,613 $ 569,215 $ 577,564 $ 628,975 $ 836,053 Contributions – state 236,730 223,280 217,473 221,641 202,468 190,399 181,303 175,025 175,703 Contributions – member