Fort Walton Beach — Comprehensive Financial Report September 30, 2017 — reading text

287,109 130,894 2,353,874 Miscellaneous revenue 24,383 20,811 981 46,175 Decrease (increase) in assets: - Accounts receivable (34,481) (8,805) (5,394) (48,680) Inventory (4,634) - - (4,634) Increase in deferred outflows of resources (393,142) (174,751) (47,760) (615,653) Increase (decrease) in liabilities: Accounts payable (446,241) 3,283 (122,020) (564,978) Compensated absences payable (3,417) 2,570 4,005 3,158 Wages (112) 1,425 848 2,161 Other liabilities 668 1,338 224 2,230 Customer deposits 24,731 4,140 - 28,871 Other post-employment benefits (80,663) 60,666 94,541 74,544 Unearned revenue (1,433) - - (1,433) Net pension liability 669,168 269,893 63,764 1,002,825 Increase in deferred inflows of resources (73,017) (29,449) (6,957) (109,423) Net cash provided by operating activities $ 3,680,699 $ 414,588 $ 856,671 $ 4,951,958 SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITES Capital grants receivable $ - $ - $ 586,146 $ 586,146 SUPPLEMENTAL DISCLOSURES OF NONCASH TRANSACTIONS Amortization of bond discount $ 5,613 $ - $ - $ 5,613 See notes to the financial statements. 27  CITY OF FORT WALTON BEACH, FLORIDA FIDUCIARY FUNDS STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30, 2017 Employee Retirement Funds ASSETS Cash and cash equivalents $ 1,909,482 Investments, at fair value U.S. Government and Agency obligations 12,730,007 Corporate obligations 6,745,407 Corporate equity 12,710,971 Mutual funds and exchange-traded funds 39,869,609 Commingled real estate investment funds 6,537,052 Total investments 78,593,046 Due from State of Florida 238 TOTAL ASSETS 80,502,766 LIABILITIES Accounts payable 77,311 NET POSITION RESTRICTED FOR PENSIONS $ 80,425,455 See notes to the financial statements. 28  CITY OF FORT WALTON BEACH, FLORIDA FIDUCIARY FUNDS STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE YEAR ENDED SEPTEMBER 30, 2017 Employee Retirement Funds ADDITIONS Contributions Employer $ 2,617,456 Plan members 482,061 State of Florida 394,967 Total contributions 3,494,484 Investment income (loss) 8,761,941 Less investment expense (258,549) Net investment income (loss) 8,503,392 Miscellaneous revenue 38,066 TOTAL ADDITIONS 12,035,942 DEDUCTIONS Benefits and refunds paid Retirement payments 6,030,766 Disability payments 194,163 Refunds 70,587 Total benefits and refunds paid 6,295,516 Administrative expenses Legal 14,233 Contractual services 143,183 Other 68,455 Total administrative expenses 225,871 TOTAL DEDUCTIONS 6,521,387 CHANGE IN FIDUCIARY NET POSITION 5,514,555 NET POSITION RESTRICTED FOR PENSIONS Beginning of year 74,910,900 End of year $ 80,425,455 See notes to the financial statements. 29  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2017 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND DESCRIPTION OF THE CITY Description of the City The City of Fort Walton Beach, Florida, (the City) was originally chartered as a municipality under laws of the State of Florida Special Act of the Florida Legislature in 1937. The City Manager – Council form of government was established in 1953. As authorized by its charter, the City provides the following services: public safety (police, fire, and inspection), highways and streets, water and sewer, sanitation, stormwater, culture and recreation, public improvements, planning and zoning, and general administrative services. The financial statements of the City have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), as applicable to governmental units and the Uniform Accounting System mandated by Chapter 218.33, Florida Statutes. The Governmental Accounting Standards Board (GASB) is the standard–setting body for governmental accounting and financial reporting. The following is a summary of the more significant accounting policies of the City: The Reporting Entity A seven member City Council and a Mayor govern the City, each elected at-large for four-year terms. The Council has no powers other than those expressly vested in it by State Statute and the City Charter, and their governmental powers cannot be delegated. As required by U.S. GAAP, these financial statements present the City of Fort Walton Beach (the primary government) and its blended component unit. In evaluating the City as a reporting entity, management has considered all potential component units for which the City may or may not be financially accountable and, as such, be included within the City's financial statements. Management utilized criteria set forth in GASB Statement No. 61 for determining financial accountability of potential component units in evaluating all potential component units. In accordance with GASB Statement No. 61, the City (primary government) is financially accountable if it appoints a voting majority of the potential component unit's governing board and 1) it is able to impose its will on the organization or 2) there is a potential for the organization to provide specific financial benefit to or impose specific financial burden on the City. In addition, component units can be other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete. As of September 30, 2017, the City had one component unit, as defined by GASB No. 61, which has been presented in the financial statements of the primary government using the blended presentation method, and is presented as a governmental fund type with a fiscal year end of September 30. The Fort Walton Beach Community Redevelopment Agency (the Agency) was formed to prepare a community redevelopment plan for a designated geographic area within the City of Fort Walton Beach, Florida. All of the City's council members serve as board members of the Agency. The Agency's governing body is the same as the governing body of the City. The Agency functions as a department of the City. City management have operational and fiscal responsibility for the Agency’s activities. 30  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2017 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND DESCRIPTION OF THE CITY – CONTINUED The Reporting Entity – Continued The Fort Walton Beach Housing Authority (the Authority) is considered a related organization to the City rather than a component unit. The City Council appoints the board members of the Authority. However, the Authority's board operates independently of the City Council and does not create a financial burden or benefit to the City. Government-Wide and Fund Financial Statements The basic financial statements include both government-wide (based on the City as a whole) and fund financial statements. The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the non-fiduciary activities of the primary government and its component unit. For the most part, the effects of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely, to a significant extent, on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not