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

officers, and firefighters). Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements are found on pages 26-27 of this report. NOTES TO THE FINANCIAL STATEMENTS The notes to the financial statements provide additional information that is essential to the full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements begin on page 28 of this report. OTHER INFORMATION In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City’s progress in funding its obligation to provide pension and other post-employment benefits (OPEB) to its employees. This required supplementary information is found on pages 88-100 of this report. The combining and individual fund statements, referred to earlier in connection with non-major governmental funds, immediately follow the required supplementary information on pension and OPEB plans and can be found beginning on page 101 of this report. GOVERNMENT-WIDE FINANCIAL ANALYSIS As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. Assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources by $87.4 million, as reported in Table 1 below. The City’s net position increased by $8.6 million for the fiscal year ended September 30, 2023. The governmental activities reported an increase of $7.7 million and the business-type activities reported an increase of $845,755. Table 1 Statement of Net Position As of September 30 (In Thousands of Dollars) Governmental Business-Type Activities Total Activities 2023 2022 2023 2022 2023 2022 Assets Current & Other $52,187 $51,477 $21,300 $21,236 $73,487 $72,713 Capital Assets 52,817 50,802 31,055 30,172 83,872 80,974 Total Assets 105,004 102,279 52,355 51,408 157,359 153,687 Deferred Outflow of Resources 13,569 7,687 2,663 653 16,232 8,340 Liabilities Long-Term Liabilities 49,741 39,098 17,692 17,157 67,433 56,255 Other Liabilities 5,162 8,246 5,972 2,593 11,134 10,839 Total Liabilities 54,903 47,344 23,664 19,750 78,567 67,094 Deferred Inflow of Resources 6,836 13,514 766 2,568 7,602 16,082 Net Position Net Investment in Capital Assets 31,499 28,661 15,557 13,423 47,056 42,084 Restricted 15,056 12,376 592 621 15,648 12,997 Unrestricted 10,279 8,071 14,439 15,699 24,718 23,770 Total Net Position $56,834 $49,108 $30,588 $29,743 $87,422 $78,851 7 By far, the largest portion of the City’s assets, $47.1 million or 53.8%, reflects its investment in capital assets (e.g., land, infrastructure, buildings, machinery, and equipment) less any related debt still outstanding that was used to acquire those assets. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City reports the investment in its capital assets net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the City’s net position of $15.6 million, or 17.9%, represents resources that are subject to external restrictions on how they may be used. The remaining balance of $24.7 million is unrestricted and may be used to meet the government’s ongoing obligations to citizens and creditors. Reported in Table 2 are the key elements of the changes in net position for the current year. Table 2 Statement of Changes in Net Position Governmental Activities Business-Type Activities Total Activities 2023 2022 2023 2022 2023 2022 Revenues Program Revenue: Charges for Services $6,397,859 $6,218,093 $17,845,146 $17,806,191 $24,243,005 $24,024,284 Operating Grants & Contributions 1,866,820 1,460,346 - - 1,866,820 1,460,346 Capital Grants & Contributions 1,251,331 125,832 122,670 46,063 1,374,001 171,895 General Revenue: Property Taxes 7,618,352 7.025.573 - - 7,618,352 7.025.573 Other Taxes 10,657,820 10,695,470 - - 10,657,820 10,695,470 Tax Increments for Redevelopment 2,668,386 2,404,122 - - 2,668,386 2,404,122 Other Revenue (Losses) 10,275,728 2,355,131 422,242 (872,436) 10,697,970 1,482,695 Total Revenues 40,736,296 30,284,567 18,390,058 16,979,818 59,126,354 47,264,385 Expenses Primary Government General Government 5,321,980 4,318,011 - - 5,321,980 4,318,011 Public Safety 19,077,377 14,020,586 - - 19,077,377 14,020,586 Physical Environment 531,784 531,268 - - 531,784 531,268 Transportation 1,385,178 1,401,797 - - 1,385,178 1,401,797 Economic Environment 1,217,467 1,194,625 - - 1,217,467 1,194,625 Culture & Recreation 6,545,449 6,103,857 - - 6,545,449 6,103,857 Debt Service Interest 728,062 716,930 - - 728,062 716.930 Business-Type Expenses Utilities - - 10,003,984 10,480,961 10,003,984 10,480,961 Sanitation - - 4,774,632 4,142,106 4,774,632 4,142,106 Other - - 967,922 1,035,826 967,922 1,035,826 Total Expenses 34,807,297 28,287,074 15,746,538 15,658,893 50,553,835 43,945,967 Increase in Net Position 5,928,999 1,997,493 2,643,520 1,320,925 8,572,519 3,318,418 before Transfers Transfers 1,797,765 1,797,083 (1,797,765) (1,797,083) - - Increase/(Decrease) in Net Position 7,726,764 3,794,576 845,755 (476,158) 8,572,519 3,318,418 Net Position – Beginning 49,107,459 45,312,883 29,742,514 30,218,672 78,849,973 75,531,555 Net Position – Ending $56,834,223 $49,107,459 $30,588,269 $29,742,514 $87,422,492 $78,849,973 Current Year Impacts – Governmental Activities Governmental activities increased the City’s net position by $7.7 million for the fiscal year ended September 30, 2023. Key elements of this change are as follows:  Total revenues increased by $10.5 million, which is primary attributable to the sale of surplus property for $4.7 million and a $3.1 million increase in investment returns as the result of improved market performance for the City’s investments during the fiscal year. Additional information on the City’s investments can be found in Notes 3 and 4 to the financial statements. 8  Total expenses increased $6.5 million, or 23.1%. This is primarily attributable to increases in payroll and related employee benefit costs, most notably a significant increase in actuarial pension expense.  Capital grants and contributions increased $1.1 million. This is primarily due to expending state financial assistance from the Restoration Deepwater Horizon oil spill grant of $1.1 million on a capital restoration project at the Fort Walton Beach Landing. Chart 1 Revenues and Expenses - Governmental Activities (in millions) General government Public safety Physical environment Transportation Economic environment Culture and recreation Debt service interest $0 $5 $10 $15 $20 Revenues Expenses Chart 2 Revenues by Source - Governmental Activities Interest and investment Charges for services, earnings , $1,638,716 $6,397,859 Miscellaneous, $72,967 Operating grants and contributions, $1,866,820 Gain on sale of assets, $4,740,578 Capital grants and contributions, $1,251,331 Intergovernmental, unrestricted, $1,407,882 Franchise fees,