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

8,999 6,209 633 622 9,632 6,831 Unrestricted 8,280 4,172 15,562 14,640 23,842 18,812 Total Net Position $45,313 $38,647 $30,219 $29,829 $75,532 $68,476 7 Reported in Table 2 are the key elements of the increase in net position for the current year. Table 2 Statement of Activities Governmental Activities Business-Type Activities Total Activities 2021 2020 2021 2020 2021 2020 Revenues Program Revenue: Charges for Services $6,052,951 $4,779,588 $17,273,977 $16,325,285 $23,326,928 $21,104,873 Operating Grants & Contributions 2,348,391 4,049,001 - - 2,348,391 4,049,001 Capital Grants & Contributions 186,874 232,491 89,963 211,962 276,837 444,453 General Revenue: Property Taxes 6,608,861 6,573,751 - - 6,608,861 6,573,751 Other Taxes 10,157,965 8,964,802 - - 10,157,965 8,964,802 Tax Increments for Redevelopment 2,320,213 2,369,529 - - 2,320,213 2,369,529 Other Revenue 4,824,606 4,323,884 398,083 643,351 5,222,689 4,967,235 Total Revenues 32,499,861 31,293,046 17,762,023 17,180,598 50,261,884 48,473,664 Expenses Primary Government General Government 4,222,810 4,182,204 - - 4,222,810 4,182,204 Public Safety 13,746,451 12,040,368 - - 13,746,451 12,040,368 Physical Environment 547,701 497,072 - - 547,701 497,072 Transportation 1,253,402 1,268,589 - - 1,253,402 1,268,589 Economic Environment 1,131,722 1,317,571 - - 1,131,722 1,317,571 Culture & Recreation 5,990,714 5,999,273 - - 5,990,714 5,999,273 Debt Service Interest 700,924 727,034 - - 700,924 727,034 Business‐Type Expenses Utilities - - 10,574,909 9,315,619 10,574,909 9,315,619 Sanitation - - 3,996,753 3,824,136 3,996,753 3,824,136 Other - - 1,040,698 764,925 1,040,698 764,925 Total Expenses 27,593,724 26,032,111 15,612,360 13,904,680 43,206,084 39,936,791 Increase/(Decrease) in Net Position 4,906,137 5,260,935 2,149,663 3,275,918 7,055,800 8,536,853 before Transfers Transfers 1,759,782 1,747,686 (1,759,782) (1,747,686) - - Increase/(Decrease) in Net Position 6,665,919 7,008,621 389,881 1,528,232 7,055,800 8,536,853 Net Position – Beginning 38,646,964 31,638,343 29,828,791 28,300,559 68,475,755 59,938,902 Net Position – Ending $45,312,883 $38,646,964 $30,218,672 29,828,791 $75,531,555 $68,475,755 Current Year Impacts – Governmental Activities Governmental activities increased the City’s net position by $6.7 million for the fiscal year ended September 30, 2021. Key elements of this change are as follows:  Total revenues increased by $1.2 million, which is primarily attributable to increases in sales tax revenue and property taxes; all driven by healthy consumption of goods and services, and an increase of 5.9%, or $92.0 million, increase in taxable assessed property values for the City.  Public safety expenses increased by $1.7 million, which is primarily attributable to increases in payroll and retirement benefits expenses as well as the City’s portion of personnel costs not covered by the Staffing for Adequate Fire and Emergency Response (SAFER) grant.  Total expenses for governmental activities increased by $1.6 million, or 6.0%, primarily due to an overall increase of 10.5% for insurance premium costs. 8  Chart 1 Expense and Revenue ‐ Governmental Activities (In millions) Debt Service Interest Culture and Recreation Economic Environment Transportation Physical Environment Public Safety General Government 0 5 10 15 Millions Revenues Expenses Chart 2 Revenues by Source ‐ Governmental Activities Franchise Fees , Municipal Revenue $2,146,088 Sharing , $1,101,020 Other Revenue , Tax Increments for $1,577,498 Redevelopment , $2,320,213 Charges for Services , Other Taxes , $6,052,951 $4,136,505 Operating Grants & Contributions , Sales Tax , $6,021,460 $2,348,391 Property Taxes , $6,608,861 Capital Grants & Franchise Fees Other Revenue Contributions , $186,874 Charges for Services Operating Grants & Contributions Capital Grants & Contributions Property Taxes Sales Tax Other Taxes Tax Increments for Redevelopment Municipal Revenue Sharing Current Year Impacts – Business-Type Activities Business-type activities increased the City’s net position by $389,881 for the fiscal year ended September 30, 2021. Key elements of this change are as follows:  Charges for services resulted in additional revenues of $948,692, or a 5.8% increase from the prior year, due an increase in demand for utility services and an increase in rates for sanitation services.  Interest and investment earnings decreased by $593,015, or 94.9%, as the result of a decline in market interest rates that significantly impacted returns on fixed-income securities. 9  Chart 3 Expenses and Program Revenue ‐ Business‐Type Activities (In millions) $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $‐ Utilities Sanitation Stormwater Expenses Revenues Chart 4 Capital Grants and Revenues by Source ‐ Business Type Activities Contributions, Miscellaneous $89,963 Income, $398,083 Charges for Services, $17,273,977 Charges for Services Capital Grants Miscellaneous Income 10 FINANCIAL ANALYSIS OF THE CITY’S FUNDS As noted earlier, the City 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. Unrestricted 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, 2021, the City’s governmental funds have combined ending fund balances of $36.7 million, an increase of $8.3 million from the prior year. Approximately 69.5% of this amount, or $25.5 million, is available for spending at the discretion of City Council. The remainder of fund balance is non-spendable or restricted. Details of the fund balance classifications can be found on page 17 of this report, as well as in Note 20. The General Fund is the chief operating fund of the City. At the end of this fiscal year, committed, assigned, and unassigned fund balance of the General Fund was $21.4 million, while total fund balance reached $27.4 million. As a measure of the General Fund’s liquidity, it may be useful to compare both committed, assigned, and unassigned fund balance and total fund balance to total expenditures. This amount represents 87.7% of the total General Fund expenditures, while total fund balance represents 112.1% of that same amount. During the 2021 fiscal year, the fund balance of the City’s General Fund increased by $6.4 million. This increase is primarily attributable to the sale of surplus real estate and proceeds from the issuance of long-term debt for which the related expenditures were not incurred until the subsequent fiscal year. In addition, there were also delays in planned expenditures for various projects. The CRA’s