Fort Walton Beach Council agenda — 03-22-11 regular — reading text

year ended September 30, 2010. Key elements of this change are as follows: Capital Grants and Contributions for business -type activities decreased $ 382, 328, or 68. 8% due to funding received in the prior fiscal year through State Financial Assistance for CBIR grants in the Utilities and Stormwater Funds, as well as Florida Forever Grant funding in the Stormwater Fund, which was not received in the current year. Other Revenue for business type activities decreased $ 143, 946, or 24. 8% primarily due to decreased interest earnings and capital asset transfers. Expenses throughout the Enterprise Funds increased $ 853, 788 or 7. 8 %. The Utilities fund experienced an increase due to the City' s contract with Okaloosa County for wastewater treatment services, as well as increased depreciation expense due to a change in estimate on previously purchased water meters. The Sanitation, Golf, and Stormwater funds experienced decreases due to cost saving measures enacted because of declining revenues. 0  6.2. a Chart 3 Expenses and Program Revenue - Business -Type Activities 8,000, 000 7,000, 000 6,000, 000 5,000, 000 4, 000, 000 3, 000, 000 2, 000, 000 ILL 1, 000, 000 a v 0 Utilities Sanitation Golf e Expenses Stormwater OC6O N Program Revenue U_ w O c O R cd NdL a Chart 4 r Revenues by Source - Business -Type Activities 0 Tr c Capital Grants & LL m Contributions U_ 1% O 0 r Charges fc N r.i 9E c d E c>s Misc. Income & Q Investment Earnings 3% 10 I Packet Pg. 42 1 FINANCIAL ANALYSIS OF THE CITY' S FUNDS As noted earlier, the City of Fort Walton Beach uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. Governmental Funds The focus of the City' s governmental funds is to provide information on near -term inflows, outflows, and balances of available resources. Such information is useful in assessing the City' s financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government' s net resources available for spending at the end of the fiscal year. As of September 30, 2010, the City of Fort Walton Beach' s governmental funds have combined ending fund balances of $12. 1 million, a decrease of $337, 745 in comparison with the prior year. Approximately 74. 5% of this total amount, $ 9. 0 million, constitutes unreserved/ undesignated fund balance in the General Fund, which is available for spending at the City Council' s discretion. The remainder of fund balance is reserved and/ or designated by management. Details of the reserved and designated fund balance can be found on page 17 of this report. The General Fund is the chief operating fund of the City. At the end of this fiscal year, unreserved/ undesignated fund balance of the General Fund was $ 9. 0 million, while total fund balance reached $ 9. 8 million. As a measure of the General Fund' s liquidity, it may be useful to compare both unreserved/ undesignated fund balance and total fund balance to total expenditures. Unreserved/ undesignated fund balance represents 47. 3% of the total General Fund expenditures, while total fund balance represents 51. 6% of that same amount. During the 2010 fiscal year, the fund balance of the City' s General Fund decreased by $ 377, 855. This decrease is attributable to budgeted use of reserves. Proprietary Funds The City of Fort Walton Beach' s proprietary funds provide the same type of information found in the government -wide financial statements, but in more detail. Unrestricted net assets of the proprietary funds totaled $ 6. 8 million at September 30, 2010, of which the Utilities Fund amounted to $ 4. 8 million, the Sanitation Fund totaled $ 1. 9 million, and the Stormwater Utility Fund was $ 376, 330. The Golf Fund has deficit unrestricted net assets of $ 288, 540, an improvement from the prior year of $37, 902. The Golf Fund experienced a net gain of $492, bringing the Fund' s net asset balance to $ 241, 790. In total, net assets of the proprietary funds decreased $ 160, 595. The factors concerning the finances of these three funds have already been addressed in the discussion of the City of Fort Walton Beach' s business -type activities. GENERAL FUND BUDGETARY HIGHLIGHTS A schedule comparing the original to the final budget and the variance from the final budget to the actual results is included on page 21 of the financial statements. Differences between the original budget and the final amended budget were $ 3. 0 million. Significant information related to this difference is summarized as follows: Unanticipated donations of $148, 848 were received and utilized during the year. Early retirement incentives were paid out to employees, including accrued sick and vacation leave, in the amount of $787, 013. Unanticipated expenses including equipment purchased for the new Department of Corrections contract, a GIS study and medical and other insurance solicitations were incurred totaling 92, 521. 11  Grants received during the year totaled $ 2. 0 million and included funding from the American Recovery and Reinvestment Act of $1. 6 million. Actual budget results, when compared to the final budget, show a variance of $2. 0 million. This variance is primarily due to amending the budget for grant amounts awarded versus actual amounts expended. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets The City' s investment in capital assets for its governmental and business -type activities, as of September 30, 2010, was $ 52. 2 million ( net of accumulated depreciation). This represents a net decrease of 421, 189, or 0. 80 %. Highlights are