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

Total GOVERNMENTAL ACTIVITIES Revenue Notes $8,500,000 City of Fort Walton Beach, Florida, Capital Improvement Revenue Note, Series 2013A, 2.69% interest due semi annually and principal due annually ranging from $326,969 to $464,334 through 2027 with a balloon payment of $3,000,000 due in 2028. Budgeted and appropriated half cent sales tax is pledged for payment of the note. Proceeds used to finance the construction of the City's new recreational complex along with the purchase of a bucket truck and a grounds sweeper for City's municipal golf course. $ 365,660 $ 6,766,866 $ 7,132,526 $4,470,610 City of Fort Walton Beach, Florida, Capital Improvement Refunding Revenue Note, Series 2013, 2.30% interest due semi annually and principal due annually ranging from $187,659 to $299,010 through 2031. Available non ad valorem revenues are pledged for payment of the note. Proceeds used for refunding Series 2001 revenue bonds for construction of certain capital improvements. 221,381 3,418,021 3,639,402 $819,000 City of Fort Walton Beach, Florida, Capital Improvement Revenue Note, Series 2011, due in quarterly installments of $24,449 through April 2016 then $21,156 from June 2016 through April 2021; interest at 2.55%. Available non ad valorem revenues are pledged for payment of the note. Proceeds used for purchase of a fire truck and golf equipment. 77,670 224,058 301,728 Total revenue notes 664,711 10,408,945 11,073,656 Leases $103,784 capital lease payable, 2013, due in monthly installments of $2,088 through August 2019, collateralized by a the City's phone system. 20,613 21,490 42,104 $67,774 capital lease payable, 2015, due in quarterly installments of $3,734 through December 2019, collateralized by fitness equipment at the City's Recreation Complex. 12,093 21,902 33,995 Total leases 32,706 43,392 76,099 Accrued Compensated Absences Total long-term portion of accumulated, vested annual and sick leave for governmental fund types 163,123 503,631 666,754 TOTAL GOVERNMENTAL ACTIVITIES $ 860,540 $ 10,955,968 $ 11,816,509 75  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2017 15. LONG-TERM DEBT – CONTINUED Description of Long-Term Debt Outstanding – Continued Current Long-Term Total BUSINESS-TYPE ACTIVITIES Revenue Notes $8,794,000 Utility System Revenue Refunding Note, Series 2015, due in annual installments of $407,000 to $645,000 beginning July 2017 through July 2033, with interest only semi-annual payments from January 2016 through January 2017; stated interest at 2.92%. Net revenues derived by the City from the utility operations are pledged for the payment of the note. Proceeds used to refinance and refund the Utility System Revenue Bonds, Series 2005, which was for water system and wastewater system improvements. $ 419,000 $ 7,968,000 $ 8,387,000 State Revolving Loans $15,637,939 State of Florida Department of Environmental Protection Revolving Loan Fund; semi annual payments of $471,683 including interest at 1.90% beginning August 2015, through February 2035. Proceeds used for force main replacement, storage tank construction and pump station upgrades. 680,796 13,308,089 13,988,885 Accrued Compensated Absences Accumulated, vested annual compensation for Enterprise Funds 43,950 131,850 175,800 TOTAL BUSINESS-TYPE ACTIVITIES $ 1,143,746 $ 21,407,939 $ 22,551,685 GRAND TOTAL LONG-TERM DEBT $ 34,368,194 For the governmental activities, compensated absences are generally liquidated by the General Fund. 76  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2017 15. LONG-TERM DEBT – CONTINUED Annual Requirements to Amortize Debt Outstanding The annual requirements to amortize all debt outstanding except accrued and annual leave and advances from other funds as of September 30, 2017, are as follows: Governmental Activities Leases Revenue Notes Year Ending September 30 Principal Interest Principal Interest 2018 $ 32,706 $ 6,112 $ 664,711 $ 282,526 2019 36,712 2,369 682,573 265,599 2020 6,681 96 700,401 248,217 2021 - - 697,037 230,379 2022 - - 3,425,805 897,254 2023-2027 - - 4,903,129 274,531 Total $ 76,099 $ 8,577 $ 11,073,656 $ 2,198,506 Business-Type Activities Revenue Note State Revolving Loan Year Ending September 30 Principal Interest Principal Interest 2018 $ 419,000 $ 244,900 $ 680,796 $ 262,570 2019 431,000 232,666 693,793 249,574 2020 444,000 220,080 707,038 236,329 2021 456,000 207,116 720,535 222,832 2022 2,491,000 827,674 3,814,332 902,502 2023-2027 2,875,000 442,292 4,192,583 524,251 2028-2032 1,271,000 55,947 3,179,808 121,975 Total $ 8,387,000 $ 2,230,675 $ 13,988,885 $ 2,520,033 77  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2017 16. COMMENTS REQUIRED BY THE BOND AND ORDINANCES Capital Improvement Revenue Note, Series 2011 1. The balance sheet and statement of revenues, expenditures, and changes in fund balance of the Debt Service Fund are shown in the financial section of the report. 2. The City is required to establish sinking fund amounts sufficient to pay all principal and interest becoming due on the bonds on the next quarter payment date. Sinking Fund Requirement at Principal/Interest September 30, Payments Due 2017 Principal due at October 1, 2017 $ 18,750 $ 18,750 Interest due at October 1, 2017 2,406 2,406 1 Total $ 21,156 $ 21,156 (1) Amounts are included in restricted cash amounts on the balance sheet of the Debt Service Fund The City is not aware of any instances of noncompliance with the bond ordinances. Capital Improvement Refunding Revenue Note, Series 2013 1. The balance sheet and statement of revenues, expenditures, and changes in fund balance of the Debt Service Fund are shown in the financial section of the report. 2. The City is required to establish sinking fund amounts sufficient to pay all principal and interest becoming due on the notes on the next semi-annual payment date. The sinking fund was not required to be funded at September 30, 2017. 3. The City is not aware of any instances of noncompliance with the debt covenants. Capital Improvement Revenue Note, Series 2013A 1. The balance sheet and statement of revenues, expenditures, and changes in fund balance of the Debt Service Fund are shown in the financial section of the report. 2. The City is required to establish sinking fund amounts sufficient to pay all principal and interest becoming due on the notes on the next semi-annual payment date. The sinking fund was not required to be funded at September 30, 2017. 3. The City is not aware of any instances of noncompliance with the debt covenants. 78  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2017 16. COMMENTS REQUIRED BY THE BOND AND ORDINANCES – CONTINUED Utility System Revenue Refunding Note, Series 2015 1. The balance sheet and statement of revenues, expenses, and changes in fund balance of the Utility Fund are shown in the financial section of the report. 2. Net revenues pledged consist of gross revenues less costs of operation and maintenance. The net revenues pledged in fiscal year 2017 were approximately $3,999,000. 3. The debt issued refunded Series 2005 bond used for system improvements. 4. The term of the pledge commitment ends in January 2033. 5. The pledged revenues needed to meet the rate covenants in fiscal year 2017 were $829,731. The covenant is based upon 125% of the annual debt service requirement. 6. The pledged revenues exceeded the debt service requirements by $3,169,158 in fiscal year 2017. 7. The City is not aware of any instances of noncompliance with the debt covenants. 17. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS The composition of interfund balances as of September 30, 2017, is as follows: Due to/from Other Funds Receivable Fund Payable Fund Amount General Community Development Block Grant $ 67,846 Advance to/from Other Funds Receivable Fund Payable Fund Amount Sanitation General $ 360,253 General Fund receivables from the Community Development Block Grant Fund in the amount of $67,846 are the result of eliminating a temporary deficit cash balance. On September 30, 2014, the City’s Sanitation Fund loaned the