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

Activities Total Activities 2023 2022 2023 2022 2023 2022 Revenue Notes & Bonds $18,873,566 $20,253,795 $5,683,000 $6,167,000 $24,556,566 $26,420,795 State Revolving Fund - - 9,704,126 10,452,433 9,704,126 10,452,433 Financing Contracts 536,581 600,745 - - 536,581 600,745 Lease Obligations 193,047 393,186 166,017 190,610 359,064 583,796 Subscription Liabilities 1,714,631 1,281,392 - - 1,714,631 1,281,392 $21,317,825 $22,529,118 $15,553,143 $16,810,043 $36,870,968 $39,339,161 Additional information on the City’s long-term debt can be found in Notes 13 to 15 of this report on pages 73-79. ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES Economic indicators and factors that are useful for evaluating the framework within which the City operates are discussed below.  The Consumer Price Index (CPI) is 4.2% higher than a year ago for the Southern Region. This indicator is a widely used gauge of inflation and translates into a higher cost of providing services to residents. 13   The local unemployment rate was 2.7%, which represents an approximate 0.5% increase from September 2022. The State of Florida’s unemployment rate was 3.0%, which represents an approximate 0.5% increase from September 2022. The unemployment rate will impact the City’s fee and usage-based revenues, and shared portions of the State of Florida’s usage- based taxes.  The published state revenue sharing distribution estimate is up by 1.0% over the prior year, the half-cent sales tax distribution estimate is up by 7.9% over the prior year, and the communication services tax distribution estimate is up by 5.8% compared to the prior year.  The military has a significant presence in our community with Eglin Air Force Base, Hurlburt Field, and Duke Field. Combined, these three installations employ over 72,000 military and civilian personnel. The military and defense-related industries have a $22 billion annual impact on Northwest Florida’s economy, according to the Florida Defense Industry Economic Impact Analysis. These financial policies, as well as other indicators, were considered when adopting the City’s budget for fiscal year 2023. The City’s budget for fiscal year 2023 totals $56.3 million, which is $466,854 less than the fiscal year 2023 adopted budget. The 2024 budget allocates $28.5 million to the General Fund, a 3.0% increase as compared to the fiscal year 2022 budget, $20.8 million to the enterprise funds, and $7.5 million to other funds. For the fiscal year 2024 budget, the City Council adopted the millage rate of 4.6116 mills, which is down 7.8% from the previous fiscal year. Personnel expenses account for approximately 49.3% of the City’s budget. The City’s fiscal year 2024 budget remains relatively stable in this category, at 317.51 full time equivalent (FTE’s) positions, a increase of only 5.7 FTE’s from the prior year. REQUESTS FOR INFORMATION This financial report is designed to provide citizens, taxpayers, customers, and creditors with a general overview of the City of Fort Walton Beach’s finances and to demonstrate the City’s accountability for the money it receives. Questions concerning any of the information provided in this report, or requests for additional information, should be addressed to the City Manager, 107 Miracle Strip Parkway S.W., City of Fort Walton Beach, Florida, 32548. This document and other financial information are available on the City’s website at www.fwb.org. Inquiries may also be sent via email to the Finance Department at finance@fwb.org. 14  CITY OF FORT WALTON BEACH, FLORIDA STATEMENT OF NET POSITION SEPTEMBER 30, 2023 Primary Government Governmental Business-Type Activities Activities Total ASSETS Cash and cash equivalents $ 20,478,729 $ 3,110,074 $ 23,588,803 Investments 24,376,961 15,721,157 40,098,118 Receivables, net 407,980 1,278,663 1,686,643 Internal balances (54,574) 54,574 - Due from other governments 2,174,091 110,746 2,284,837 Inventory, at cost 311,357 22,832 334,189 Prepaid items - 4,534 4,534 Restricted assets Cash and cash equivalents 162,313 925,901 1,088,214 Other assets Other receivables, net 4,330,923 71,819 4,402,742 Capital assets Non-depreciable/amortizable 14,260,500 1,803,330 16,063,830 Depreciable/amortizable, net 38,556,104 29,251,819 67,807,923 TOTAL ASSETS 105,004,384 52,355,449 157,359,833 DEFERRED OUTFLOWS OF RESOURCES 13,569,090 2,663,125 16,232,215 LIABILITIES Accounts payable 758,168 306,490 1,064,658 Accrued liabilities 940,443 163,245 1,103,688 Due to other governments 609,636 8,863 618,499 Unearned revenues 31,931 3,717,197 3,749,128 Payable from restricted assets Accrued interest 203,506 64,533 268,039 Customer deposits - 333,849 333,849 Non-current liabilities Due within one year Compensated absences 256,432 53,995 310,427 Lease obligations payable 161,945 63,549 225,494 Subscription liabilities 495,932 - 495,932 Financing contracts payable 313,797 - 313,797 Revenue bonds and notes payable 1,390,608 498,000 1,888,608 State revolving fund loans payable - 762,594 762,594 Due in more than one year Compensated absences 769,294 161,980 931,274 Lease obligations payable 31,102 102,468 133,570 Subscription liabilities 1,218,699 - 1,218,699 Financing contracts payable 222,784 - 222,784 Revenue bonds and notes payable 17,482,958 5,185,000 22,667,958 State revolving fund loans payable - 8,941,532 8,941,532 Total OPEB liability 3,709,141 994,387 4,703,528 Net pension liability 26,307,112 2,306,672 28,613,784 TOTAL LIABILITIES 54,903,488 23,664,354 78,567,842 DEFERRED INFLOWS OF RESOURCES 6,835,763 765,951 7,601,714 NET POSITION Net investment in capital assets 31,498,779 15,556,733 47,055,512 Restricted Debt service 21,156 157,228 178,384 System improvements - 434,824 434,824 Improvement districts 6,225,881 - 6,225,881 Public safety 1,566,532 - 1,566,532 Other purposes 7,243,110 - 7,243,110 Unrestricted 10,278,765 14,439,484 24,718,249 TOTAL NET POSITION $ 56,834,223 $ 30,588,269 $ 87,422,492 See notes to the financial statements. 15  CITY OF FORT WALTON BEACH, FLORIDA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2023 Net (Expense) Revenue and Changes in Net Position Program Revenues Primary Government Charges for Operating Grants Capital Grants and Governmental Business-Type Function/program activities Expenses Services and Contributions Contributions Activities Activities Total Governmental activities General government $ 5,321,980 $ 291,558 $ 277,993 $ - $ (4,752,429) $ - $ (4,752,429) Public safety 19,077,377 2,296,942 1,140,944 151,191 (15,488,300) - (15,488,300) Physical environment 531,784 486,857 - - (44,927) - (44,927) Transportation 1,385,178 198,547 47,072 - (1,139,559) - (1,139,559) Economic environment