Fort Walton Beach — Comprehensive Annual Financial Report September 30, 2013 — reading text

Administration’s Local Government Surplus Funds Trust Fund Investment Pool B (Fund B) with a fair value of $119,090. Fund B consists of assets that have defaulted on payment, paid more slowly than expected, and/or were assessed as having significant credit and liquidity risk. Fund B has been "frozen" by the SBA since December 2007, but has distributed portions of the pool to participants since that date. Since December 2007, the City has received $1,652,010 in distributions from Fund B, including $124,530 received during the year ended September 30, 2013. Fund B will continue to distribute funds to all participants as the assets within the Fund are able to be liquidated. The primary goal of the Fund is to make members "whole" and not realize a loss on the investment. Fund B has not received a credit rating by any of the nationally-recognized rating agencies as of September 30, 2013. The City believes that it will not incur a loss on the realizable value of the remaining investments held in the Fund. Due to the nature of securities in Fund B, the interest rate risk information required by GASB 40 is not available. However, an estimate of weighted average life (WAL) is available. In the calculation of WAL, the time at which an expected principal amount is to be received (measured in years) is weighted by the principal amount received at that time divided by the sum of all expected principal payments. The principal amounts used in the WAL calculation are not discounted to present value as they would be in a weighted average duration calculation. The WAL (based on expected future cash flows) of Fund B at September 30, 2013, is estimated at 4.04 years. However, because Fund B consists of restructured or defaulted securities there is considerable uncertainty regarding the weighted average life. The City also maintains $10,417 invested in the SBA's Florida PRIME. The Florida PRIME current credit rating is AAAm by Standard and Poor's. The weighted average to maturity (WAM) of the Florida PRIME at September 30, 2013, is 44 days. Next interest rate reset dates for floating rate securities are used in the calculation of the WAM. 47  City of Fort Walton Beach, Florida NOTES TO FINANCIAL STATEMENTS September 30, 2013 NOTE 4 - RECEIVABLES Receivables at September 30, 2013, were as follows: Governmental Activities Community Other Redevelopment Governmental General Fund Funds Total Taxes $ 17,322 $ - $ - $ 17,322 Accounts 96,986 36 109 97,131 Assessments 110,564 - - 110,564 Total receivables $ 224,872 $ 36 $ 109 $ 225,017 Business-Type Activities Other Proprietary Utilities Sanitation Golf Funds Total Accounts $ 588,817 $ 222,476 $ 182 $ 38,399 $ 849,874 Less allowance for doubtful accounts (44,333) (9,408) - (2,692) (56,433) Assessments 18,430 - - - 18,430 Total receivables, net $ 562,914 $ 213,068 $ 182 $ 35,707 $ 811,871 Due from Other Governments The City's receivables from other governments for governmental activities as of September 30, 2013, are $97,007. Due from other governments consist of $93,681 due from the federal government. All receivables from the federal government are related to grant revenues, primarily for public safety, transportation, and community development. The remainder of the balance, $3,326, is receivable from the City’s Police Officers’ Pension Fund for reimbursement for payment of the Pension Plan’s fiduciary insurance premium. NOTE 5 - CHANGES IN CAPITAL ASSETS Capital asset activity for the year ended September 30, 2013, was as follows: Beginning Decreases/ Ending Balance Increases Transfers Balance Governmental Activities Capital assets not being depreciated/amortized Land $ 9,961,261 $ - $ - $ 9,961,261 Construction in progress 488,118 811,651 (320,152) 979,617 Total capital assets not being depreciated/amortized 10,449,379 811,651 (320,152) 10,940,878 48  City of Fort Walton Beach, Florida NOTES TO FINANCIAL STATEMENTS September 30, 2013 NOTE 5 - CHANGES IN CAPITAL ASSETS (CONTINUED) Beginning Decreases/ Ending Balance Increases Transfers Balance Governmental Activities (Continued) Capital assets being depreciated/amortized Buildings 14,389,863 3,862 (830,880) 13,562,845 Improvements other than buildings 11,229,824 130,536 98,437 11,458,797 Infrastructure 12,432,298 10,920 - 12,443,218 Software 499,248 - - 499,248 Machinery and equipment 7,856,469 205,658 (167,067) 7,895,060 Equipment under capital lease 14,280 59,390 (14,280) 59,390 Total capital assets being depreciated/amortized 46,421,982 410,366 (913,790) 45,918,558 Less accumulated depreciation/amortization Buildings (7,332,237) (355,428) 559,593 (7,128,072) Improvements other than buildings (5,119,768) (631,536) 218,849 (5,532,455) Infrastructure (8,001,032) (320,422) - (8,321,454) Software (105,313) (112,007) - (217,320) Machinery and equipment (5,830,138) (541,511) 190,154 (6,181,495) Equipment under capital lease (13,883) (1,222) 14,280 (825) Total accumulated depreciation/amortization (26,402,371) (1,962,126) 982,876 (27,381,621) Total capital assets being depreciated/amortized, net 20,019,611 (1,551,760) 69,086 18,536,937 Governmental Activities, Net $ 30,468,990 $ (740,109) $ (251,066) $ 29,477,815 Business-Type Activities Capital assets not being depreciated/amortized Land $ 765,078 $ - $ - $ 765,078 Construction in progress 2,616,944 14,820,580 (2,016,169) 15,421,355 Easements 28,532 6,110 - 34,642 Total capital assets not being depreciated/amortized 3,410,554 14,826,690 (2,016,169) 16,221,075 Capital assets being depreciated/amortized Buildings 3,642,155 - (16,265) 3,625,890 Improvements other than buildings 37,911,833 240,968 (1,685,094) 36,467,707 Software 32,644 6,686 - 39,330 Machinery and equipment 10,755,653 532,446 (2,660,496) 8,627,603 Equipment under capital lease 248,589 - (248,589) - Total capital assets being depreciated/amortized 52,590,874 780,100 (4,610,444) 48,760,530 49  City of Fort Walton Beach, Florida NOTES TO FINANCIAL STATEMENTS September 30, 2013 NOTE 5 - CHANGES IN CAPITAL ASSETS (CONTINUED) Beginning Decreases/ Ending Balance Increases Transfers Balance Business-Type Activities (Continued) Less accumulated depreciation/amortization Buildings (1,589,842) (119,326) 10,166 (1,699,002) Improvements other than buildings (21,128,351) (1,059,132) 2,932,066 (19,255,417) Software (9,391) (11,661) - (21,052) Machinery and equipment (8,137,018) (642,224) 2,607,018 (6,172,224) Equipment under capital lease (236,160) (12,429) 248,589 - Total accumulated depreciation/amortization (31,100,762) (1,844,772) 5,797,839 (27,147,695) Total capital assets being depreciated/amortized, net 21,490,112 (1,064,672) 1,187,395 21,612,835 Business-Type Activities, Net $ 24,900,666 $13,762,018 $ (828,774) $ 37,833,910 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 $ 155,958 Public safety 648,365 Physical environment