Fort Walton Beach — Annual Comprehensive Financial Report, September 30, 2025 — reading text

5,464,012 Governmental funds do not report capital assets on the balance sheet; however, they are reported in the government-wide financial statements. Accordingly, proceeds received for disposals of capital assets are shown as income in the governmental financial statements and a gain or loss is reported in the statement of activities. In addition, capital asset reassignments are reported as transfers on the statement of activities. Disposals and transfers of capital assets (1,975,892) Accumulated depreciation/amortization – disposals and transfers 1,880,460 Other capital asset adjustments 104,380 8,948 Special assessment revenue in the governmental funds is recognized when due; however, the revenue was recognized in the statement of activities when it was earned (when levied). Payments received from special assessments (468) Special assessment for interest and penalties 2,320 Principal forgiven on notes receivable related to sale of capital assets (4,048) Payments received on receivable related to sale of capital assets (82,104) (84,300) The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of issuance costs, premiums, discounts and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. In addition, long- term debt reassignments are reported as transfers on the statement of activities. Proceeds from issuance of leases and subscription liabilities (1,745,378) Principal payments on long-term liabilities 2,461,192 Change in accrued interest on long-term debt 7,762 723,576 Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds: Change in net pension asset / liability and related deferred outflows and deferred inflows of resources 1,153,772 Change in other post-employment benefits liability and related deferred outflows and deferred inflows of resources 57,225 Change in long-term compensated absences 16,818 1,227,815 Change in net position of governmental activities (page 16) $ 3,369,261 See notes to the financial statements. 20  CITY OF FORT WALTON BEACH, FLORIDA PROPRIETARY FUNDS STATEMENT OF NET POSITION SEPTEMBER 30, 2025 Stormwater Utilities Fund Sanitation Fund Fund Total ASSETS Current assets Cash and cash equivalents $ 241,662 $ 393,023 $ 85,307 $ 719,992 Restricted assets – cash and cash equivalents 1,065,116 5,480 - 1,070,596 Investments 7,661,817 2,870,513 908,394 11,440,724 Receivables, net 901,750 312,366 64,061 1,278,177 Due from other governments 768,644 - 287,500 1,056,144 Inventory – at cost 19,858 - - 19,858 Prepaid items - - 4,534 4,534 Total current assets 10,658,847 3,581,382 1,349,796 15,590,025 Other assets Other receivables 3,732 - - 3,732 Net pension asset - restricted 620,990 474,604 68,141 1,163,735 Total other assets 624,722 474,604 68,141 1,167,467 Capital assets, net Non-depreciable/amortizable 918,393 - 28,532 946,925 Depreciable/amortizable, net 30,789,783 1,655,954 3,108,876 35,554,613 Total capital assets 31,708,176 1,655,954 3,137,408 36,501,538 Total non-current assets 32,332,898 2,130,558 3,205,549 37,669,005 TOTAL ASSETS 42,991,745 5,711,940 4,555,345 53,259,030 DEFERRED OUTFLOWS OF RESOURCES 178,451 94,740 27,877 301,068 See notes to the financial statements. 21  CITY OF FORT WALTON BEACH, FLORIDA PROPRIETARY FUNDS STATEMENT OF NET POSITION – CONTINUED SEPTEMBER 30, 2025 Stormwater Utilities Fund Sanitation Fund Fund Total LIABILITIES Current liabilities Accounts payable $ 429,018 $ 179,070 $ 86,014 $ 694,102 Accrued liabilities Compensated absences 69,813 42,411 10,934 123,158 Wages 128,543 64,730 20,808 214,081 Interest 53,503 - - 53,503 Due to other governments - 13,440 - 13,440 Lease obligations payable 16,806 - 18,204 35,010 Subscription liabilities 38,211 - - 38,211 Revenue note payable 527,000 - - 527,000 State revolving loan payable 791,988 - - 791,988 Unearned revenues 52,974 - - 52,974 Payable from restricted assets Customer deposits 434,877 5,480 - 440,357 Total current liabilities 2,542,733 305,131 135,960 2,983,824 Non-current liabilities Accrued liabilities Compensated absences 209,439 127,231 32,802 369,472 Lease obligations payable 807 - - 807 Subscription liabilities 141,627 - - 141,627 Revenue note payable 4,146,000 - - 4,146,000 State revolving loan payable 7,372,392 - - 7,372,392 Other post-employment benefits 524,830 349,541 137,645 1,012,016 Total non-current liabilities 12,395,095 476,772 170,447 13,042,314 TOTAL LIABILITIES 14,937,828 781,903 306,407 16,026,138 DEFERRED INFLOWS OF RESOURCES 789,431 577,196 127,371 1,493,998 NET POSITION Net investment in capital assets 18,675,486 1,655,954 3,052,383 23,383,823 Restricted Debt service 157,228 - - 157,228 System improvements 473,011 - - 473,011 Pensions 97,752 74,709 10,726 183,187 Unrestricted 8,039,460 2,716,918 1,086,335 11,842,713 TOTAL NET POSITION $ 27,442,937 $ 4,447,581 $ 4,149,444 $ 36,039,962 See notes to the financial statements. 22  CITY OF FORT WALTON BEACH, FLORIDA PROPRIETARY FUNDS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION FOR THE YEAR ENDED SEPTEMBER 30, 2025 Sanitation Stormwater Utilities Fund Fund Fund Total OPERATING REVENUES Charges for services $ 12,461,490 $ 5,433,078 $ 1,053,819 $ 18,948,387 OPERATING EXPENSES Personal services 2,511,744 1,375,261 384,257 4,271,262 Operating 6,261,452 3,100,620 433,407 9,795,479 Depreciation/amortization expense 1,969,232 269,996 229,066 2,468,294 Total operating expenses 10,742,428 4,745,877 1,046,730 16,535,035 OPERATING INCOME 1,719,062 687,201 7,089 2,413,352 NON-OPERATING REVENUES (EXPENSES) Rental income 22,686 - - 22,686 Interest expense (313,352) - (1,693) (315,045) Amortization (5,613) - - (5,613) Gain (loss) on disposal of capital assets