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

commingled funds 61,839,924 12,710,971 42,591,901 - Total investments measured at fair value $ 103,836,013 $ 23,679,508 $ 73,619,453 $ - * In accordance with GASB 72, certain investments that were measured at NAV per share (or its equivalent) have not been classified in the fair value hierarchy. 5. RECEIVABLES Receivables at September 30, 2017, were as follows: Governmental Activities Business-Type Activities Community Redevelopment General Fund Utilities Sanitation Stormwater Total Taxes $ 20,223 $ - $ - $ - $ - $ 20,223 Accounts 90,290 1,060 710,031 217,437 57,258 1,076,076 Less allowance for doubtful accounts - - (46,699) (7,934) (3,295) (57,928) Assessments 44,824 331,795 1,086 - - 377,705 Other 737,809 - 5,947 - - 743,756 Total receivables, net $ 893,146 $ 332,855 $ 670,365 $ 209,503 $ 53,963 $ 2,159,832 46  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2017 5. RECEIVABLES – CONTINUED During fiscal year 2015, the City sold a building for $462,000 and will receive $442,000 of the proceeds over twelve years ($2,917 monthly payments started November 2014). This note receivable bears interest at 5% per year and includes a balloon payment of $232,362 due to the City in October 2026. The balance of this note receivable is $402,809 as of September 30, 2017. During fiscal year 2014, the City sold a recreational center for $425,000 and will receive the proceeds over twelve years ($3,000 monthly principal only payments started October 2015). The City has calculated imputed interest on the receivable, but it has not been recorded as the imputed amount was deemed to be immaterial to the financial statements. The balance of this note receivable is $335,000 as of September 30, 2017. Due from Other Governments The City's receivables from other governments for governmental activities as of September 30, 2017, are $238,118. Due from other governments in the governmental activities consists primarily of state proceeds related to the Florida Department of Education grant as well as federal proceeds related to the Department of Housing and Urban Development grants. The City's receivables from other governments for business-type as of September 30, 2017, are $590,215 which consists of primarily of state proceeds related to stormwater system improvement grants. 47  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2017 6. CHANGES IN CAPITAL ASSETS Capital asset activity for the year ended September 30, 2017, was as follows: Beginning Adjustments/ Ending Balance Increases Decreases Transfers Balance Governmental activities Capital assets not being depreciated/amortized Land $ 11,048,842 $ - $ - $ (363) $ 11,048,479 Construction in progress 86,639 65,833 - (79,875) 72,597 Total capital assets not being depreciated/amortized 11,135,481 65,833 - (80,238) 11,121,076 Capital assets being depreciated/amortized Buildings 23,698,408 17,717 - - 23,716,125 Improvements other than buildings 17,898,446 505,523 (66,838) 31,126 18,368,257 Infrastructure 12,935,865 213,533 - - 13,149,398 Software 521,191 - (1,087) 1,772 521,876 Machinery and equipment 12,143,361 795,679 (980,177) (43,973) 11,914,890 Equipment under capital lease 127,164 - - 2,816 129,980 Total capital assets being depreciated/amortized 67,324,435 1,532,452 (1,048,102) (8,259) 67,800,526 Less accumulated depreciation/amortization Buildings (10,239,087) (697,560) - - (10,936,647) Improvements other than buildings (10,828,924) (766,657) 41,216 48,749 (11,505,616) Infrastructure (9,191,012) (316,371) - - (9,507,383) Software (508,764) (13,362) 1,087 (26,435) (547,474) Machinery and equipment (8,019,367) (837,076) 875,073 117,020 (7,864,350) Equipment under capital lease (49,724) (13,555) - - (63,279) Total accumulated depreciation/amortization (38,836,878) (2,644,581) 917,376 139,334 (40,424,749) Total capital assets being depreciated/amortized, net 28,487,557 (1,112,129) (130,726) 131,075 27,375,777 Governmental activities, net $ 39,623,038 $(1,046,296) $ (130,726) $ 50,837 $ 38,496,853 48  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2017 6. CHANGES IN CAPITAL ASSETS – CONTINUED Beginning Adjustments/ Ending Balance Increases Decreases Transfers Balance Business-type activities Capital assets not being depreciated/amortized Land $ 709,678 $ - $ - $ - $ 709,678 Construction in progress 499,398 1,364,870 - (1,726,786) 137,482 Easements 34,642 5,100 - - 39,742 Total capital assets not being depreciated/amortized 1,243,718 1,369,970 - (1,726,786) 886,902 Capital assets being depreciated/amortized Buildings 411,900 - - - 411,900 Improvements other than buildings 46,610,516 247,764 - 1,706,274 48,564,554 Software 111,215 - - - 111,215 Machinery and equipment 10,224,375 592,194 (331,935) 27,711 10,512,345 Total capital assets being depreciated/amortized 57,358,006 839,958 (331,935) 1,733,985 59,600,014 Less accumulated depreciation/amortization Buildings (296,697) (8,550) - (305,247) Improvements other than buildings (15,528,198) (1,581,345) - (17,109,543) Software (56,730) - - (54,485) (111,215) Machinery and equipment (6,469,334) (763,979) 331,935 46,286 (6,855,092) Total accumulated depreciation/amortization (22,350,959) (2,353,874) 331,935 (8,199) (24,381,097) Total capital assets being depreciated/amortized, net 35,007,047 (1,513,916) - 1,725,786 35,218,917 Business-type activities, net $ 36,250,765 $ (143,946) $ - $ (1,000) $ 36,105,819 49  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2017 6. CHANGES IN CAPITAL ASSETS – CONTINUED Amortization of equipment under capital lease is included with depreciation expense in the financial statements. Depreciation and amortization expense was charged to functions/programs of the primary government as follows: Governmental activities General government $ 155,176 Public safety 622,991 Physical environment 83,756 Transportation 631,478 Economic environment 121,852 Culture and recreation 1,029,328 Total depreciation/amortization expense – governmental activities $ 2,644,581 Business-type activities Utilities fund $ 1,935,871 Sanitation fund 287,109 Stormwater fund 130,894 Total depreciation/amortization expense – business-type activities $ 2,353,874 Construction Commitments During fiscal year 2017 multiple projects to improve the City’s recreational facilities were conducted. These projects included construction of sand volleyball courts and installation of field netting at the recreation complex, and upgrading the lighting at Jet Stadium. These projects were funded with contingency funds and General Fund reserves. The barrier net installation