Fort Walton Beach — Comprehensive Financial Report September 30, 2021 — reading text

FORT WALTON BEACH, FLORIDA www.fwb.org (850) 833-9500 Annual Comprehensive Financial Report FY 2020-21 CITY OF FORT WALTON BEACH, FL WITH COMPLIANCE MATTERS AND RESPONSES FISCAL YEAR ENDED SEPT. 30, 2021 CITY OF FORT WALTON BEACH, FLORIDA ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 PREPARED BY: THE FINANCE DEPARTMENT Julio Lacayo, Finance Director City of Fort Walton Beach 107 Miracle Strip Parkway Fort Walton Beach, FL 32548 www.fwb.org  CITY OF FORT WALTON BEACH, FL City Council Left to right (standing): David Schmidt, Nic Allegretto, Nathan Kelley, Kirby Locklear, and Travis Smith Left to right (seated): Mike Holmes, Mayor Dick Rynearson, and MG Moran Council members are elected in odd years for four-year staggered terms. City Council meets on the second and fourth Tuesday of each month at 6:00 p.m. in the City Council Chambers located at 107 Miracle Strip Parkway, Fort Walton Beach, Florida. Appointed Officers Department Directors City Manager – Michael D. Beedie, PE Finance – Julio Lacayo, Jr. City Clerk – Kim M. Barnes, MMC Fire Services – Ken Perkins, Chief City Attorney – Hayward Dykes, Jr. Growth Management – Chris Frassetti Human Resources – Tarey Franxman Police Services – Robert Bage, Chief Public Works & Utility Services – Daniel Payne, PE Recreation & Cultural Services – Jeff Peters  CITY OF FORT WALTON BEACH, FLORIDA TABLE OF CONTENTS FOR THE YEAR ENDED SEPTEMBER 30, 2021 Page CITY OFFICIALS I. INTRODUCTORY SECTION Table of Contents i Letter of Transmittal City Manager iv GFOA Certificate of Achievement x Organizational Chart xi II. FINANCIAL SECTION Independent Auditors’ Report 1 A. MANAGEMENT’S DISCUSSION AND ANALYSIS 4 B. BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Position 15 Statement of Activities 16 Fund Financial Statements Governmental Funds Balance Sheet 17 Reconciliation of the Balance Sheet to the Statement of Net Position 18 Statement of Revenues, Expenditures and Changes in Fund Balance 19 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance to the Statement of Activities 20 Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – General Fund 21 Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – Community Redevelopment Agency 22 Proprietary Funds Statement of Net Position 23 Statement of Revenues, Expenses and Changes in Net Position 25 Statement of Cash Flows 26 Fiduciary Funds Statement of Fiduciary Net Position 28 Statement of Changes in Fiduciary Net Position 29 Notes to the Financial Statements 30 i  CITY OF FORT WALTON BEACH, FLORIDA TABLE OF CONTENTS FOR THE YEAR ENDED SEPTEMBER 30, 2021 Page Schedule II. FINANCIAL SECTION (CONTINUED) C. REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED) Pension and OPEB Schedules Schedules of Changes in Net Pension Liability and Related Ratios 87 Schedule of Changes in Net OPEB Liability and Related Ratios 90 Schedule of Pension Contributions 91 Schedule of Investment Returns 92 Notes to the Schedule of Pension Contributions – General Employees’ Retirement Fund 93 Notes to the Schedule of Pension Contributions – Police Officers’ Retirement Fund 95 Notes to the Schedule of Pension Contributions – Firefighters’ Retirement Fund 97 D. COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Non-Major Governmental Funds Combining Balance Sheet 99 Combining Statement of Revenues, Expenditures and Changes in Fund Balance 100 Schedules of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual Law Enforcement Trust Special Revenue Fund 101 Law Enforcement Trust Training Special Revenue Fund 102 Florida Building Code Special Revenue Fund 103 Community Development Block Grant Special Revenue Fund 104 Beal Memorial Cemetery Perpetual Care Special Revenue Fund 105 Debt Service Fund 106 III. STATISTICAL SECTION (UNAUDITED) Net Position by Component 107 1 Changes in Net Position 108 2 Fund Balances – Governmental Funds 110 3 Changes in Fund Balances – Governmental Funds 111 4 Revenues and Other Sources 112 5 Assessed Value of Taxable Property 113 6 ii  CITY OF FORT WALTON BEACH, FLORIDA TABLE OF CONTENTS FOR THE YEAR ENDED SEPTEMBER 30, 2021 Page Schedule III. STATISTICAL SECTION (UNAUDITED) Property Tax Rates Per $1,000 of Taxable Value – All Direct and Overlapping Governments 114 7 Principal Taxpayers 115 8 Property Tax Levies and Collections 116 9 Ratios of Outstanding Debt by Type 117 10 Ratio of Net General Bonded Debt Outstanding 118 11 Pledged Revenue Coverage – Schedule of Revenue Bond Coverage 119 12 Direct and Overlapping Governmental Activities Debt – General Obligations 120 13 Major Employers 121 14 Miscellaneous Demographical Statistics 122 15 Full-Time Equivalent Employees by Function/Program 123 16 Permits, Licenses and Recreation Facilities 124 17 Elections - Okaloosa County Voter Registration 125 18 Special Assessment Billings and Collections 126 19 Major Revenue Sources 127 20 Water and Wastewater Service Rates 128 21 Sanitation and Recycling Service Rates 129 22 Operating Indicators by Function/Program 130 23 Capital Asset Statistics by Function/Program 131 24 Insurance Coverage 132 25 IV. COMPLIANCE SECTION Schedule of Receipts and Expenditures of Funds Related to the 135 Deepwater Horizon Oil Spill Independent Auditors’ Report on the Schedule of Receipts and Expenditures of Funds Related to the Deepwater Horizon Oil Spill 136 Schedule of Expenditures of Federal Awards 137 Notes to the Schedule of Expenditures of Federal Awards 138 Independent Auditors’ Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 139 Independent Auditors’ Report on Compliance for the Major Federal Programs and on Internal Control over Compliance Required by the Uniform Guidance 141 Schedule of Findings and Questioned Costs 143 Summary Schedule of Prior Audit Findings 146 Independent Accountants’ Report on an Examination of Compliance Requirements in Accordance with Chapter 10.550, Rules of the Auditor General 148 Management Letter 149 iii  City of Fort Walton Beach “The Treasure of the Emerald Coast” 107 Miracle Strip Parkway SW * Fort Walton Beach, FL 32548 (850) 833-9504 * Fax (850) 833-9640 www.fwb.org March 8, 2022 Honorable Mayor, City Council Members, & Citizens of the City of Fort Walton Beach City of Fort Walton Beach 107 Miracle Strip Parkway SW Fort Walton Beach, FL 32548 Ladies and Gentlemen: The Comprehensive Annual Financial Report of the City of Fort Walton Beach, Florida for the fiscal year ended September 30, 2021, is hereby submitted herewith pursuant to Chapter 218.39(1)(d) of the Florida Statutes requiring each local government entity to complete an audit report within nine (9) months after the end of the fiscal year. This report consists