Fort Walton Beach Council agenda — 03-19-12--special--audit — reading text

so, readers may better understand the long -term impact of the government' s near -term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balance provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. Packet 6 28 -  3. 1. a The City of Fort Walton Beach maintains seven individual governmental funds ( General Fund, Community Redevelopment Agency Fund, Law Enforcement Trust Fund, Law Enforcement Trust Training Fund, Debt Service Fund, Community Development Block Grant Fund, and Beal Memorial Cemetery Perpetual Care Fund). Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balance for the General Fund and the Community Redevelopment Agency Fund. Data from the other five governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non -major governmental funds is provided in the form of combining statements elsewhere in this report. The City of Fort Walton Beach adopts an annual appropriated budget for its General Fund, as well as each of the other governmental funds. A budgetary comparison statement is provided for the General Fund and the Community Redevelopment Agency Fund to demonstrate compliance with this budget. Proprietary Funds All proprietary funds of the City of Fort Walton Beach are maintained as enterprise funds. Enterprise funds are used to report the same functions presented as business -type activities in the statement of net assets and the statement of activities. The City of Fort Walton Beach uses enterprise funds to account for its utilities operations ( water operations and distribution, sewer collections and treatment, and storm water management), sanitation operations ( garbage), and golf club operations. Proprietary funds provide the same type of information as the government -wide financial statements, only in more detail. The proprietary fund financial statements provide separate information on utilities operations, sanitation operations, storrnwater operations, golf club operations, all of which are considered major fonds of the City of Fort Walton Beach except the stormwater fund which is considered non- major. The basic proprietary fund financial statements are found on pages 22 -26 of this report. Fiduciary Funds Fiduciary funds are used to account for resources held for the benefit of parties outside the government. The City' s fiduciary funds include the Pension Trust Funds ( general employees, police 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 of Fort Walton Beach' 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 27 -28 of this report. NOTES 10 THE FINANCIALS' rATEMENTS 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 29 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 of Fort Walton Beach' s progress in funding its obligation to provide pension benefits to its employees. The required supplementary information is found on pages 80 -82 of this report. The combining statements referred to earlier in connection with non -major governmental funds immediately follow the required supplementary information on Pension funds and can be found beginning on page 83 of this report. Pa ret, 8. 28  3. 1. a GOVERNMENT -WIDE FINANCIAL ANALYSIS As noted earlier, net assets may serve over time as a useful indicator of a government' s financial position. In the case of the City of Fort Walton Beach, assets exceeded liabilities by $ 65. 0 million (net assets), as reported in Table 1. The government' s net assets decreased by $ 1. 5 million for the fiscal year ended September 30, 2012. By far, the largest portion of the City' s net assets, $ 40.3 million or 62. 1 %, 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 of Fort Walton Beach reports 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 assets, 7. 1 %, represents resources that are subject to external restrictions on how they may be used. The remaining balance of $20.0 million is umestricted and maybe used to meet the government' s ongoing obligations to citizens and creditors. Table 1 Statement of Net Assets As of September 30 In Thousands of Dollars) Total Governmental Activities Business- Type Activities 2011 2012 20 2011 2012 2011 2012 11998 29. 131 31, 168 Correntand Other 18, 004 19, 170 $ 1 1,127 24, 776 55. 369 54, 832 30, 469 30056 24, 900 Cap1u1 Assets 36,027 36774 84, 500 86, 000 Tare( Assets 48, 473 49,226 Lone -Term Liabilities 16, 192 1_ 5 848 5, 268 10, 292 10, 480 5, 900 Omstanding 2, 129 3.355 3, 834 1400 1, 705 1, 955 Other Liabilities 19, 547 19582 7, 300 6, 973 12. 247 12, 609 Total Liabilities NetInvotied Assets in Capital 24, 757 14, 930 17, 038 40, 309 41, 795 Net of Related Debt 25, 379 267 4, 604 5,097 4, 306 4, 830 298 Restricted 8, 552 6, 860 20, 040 19, 526 unrestricted 11, 488 12, 666 24, 165 64, 953 66418 41, 173 42, 253 $ 23, 780 Toml Net Assets TheThe overalloverall decrease decrease inin thethe City'City' s netnet assetsassets waswas$ $ 1. 55 mil ionmil ion duringduring thethe fiscalfiscal year.year. TheThe governmentalgovernmental activitiesactivities experienced experienced a decrease,decrease, primarily primarily relatedrelated toto anan increaseincrease inin thethe otherother postpost - - employment employment benefitsbenefits OPEB)OPEB) liability,liability, plannedplanned useuse ofof unrestricted unrestricted fundfund balancebalance forfor employeeemployee incentives,incentives, increasedincreased expensesexpenses relatedrelated toto thethe CommunityCommunity RedevelopmentRedevelopment Agency'Agency' ss additionaddition ofof 33 policepolice officers,officers, unanticipated unanticipated expensesexpenses thatthat necessitatednecessitated thethe useuse ofof fundfund balance,balance, andand increasedincreased pensionpension contributions,contributions, allall coupledcoupled withwith lowerlower thanthan anticipatedanticipated revenues.revenues. TheThe businessbusiness activitiesactivities experiencedexperienced aa decrease decrease primarilyprimarily relatedrelated toto anan impairment impairment lossloss ofof$ $ 588,588, 652,652, duedue toto thethe revisedrevised