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

Business-Type Activities $ 10,495,764 $ 7,282,001 $ (489,718) $ 17,288,047 $ 363,879 Description of Long-Term Debt Outstanding Current Long-Term Total GOVERNMENTAL ACTIVITIES Revenue Notes $8,500,000 City of Fort Walton Beach, Florida, Capital Improvement Revenue Note, Series 2013A, $8,471,929 representing governmental activities portion, 2.69% interest due semi-annually and principal due annually ranging from $324,491 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 bonds. Governmental activities portion of proceeds used to finance the construction of the City's new recreational complex and to purchase a bucket truck. $ 324,491 $ 8,147,438 $ 8,471,929 $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 bonds. Proceeds used for refunding Series 2001 revenue bonds for construction of certain capital improvements. 187,659 4,282,951 4,470,610 $739,805 City of Fort Walton Beach, Florida, Capital Improvement Revenue Note, Series 2011, due in quarterly installments of $21,156 through 2021; interest at 2.55%. Available non-ad valorem revenues are pledged for payment of the bonds. Proceeds used for purchase of a fire truck. 70,161 523,236 593,397 Total revenue notes 582,311 12,953,625 13,535,936 65  City of Fort Walton Beach, Florida NOTES TO FINANCIAL STATEMENTS September 30, 2013 NOTE 14 - LONG-TERM DEBT (CONTINUED) Description of Long-Term Debt Outstanding (Continued) Current Long-Term Total GOVERNMENTAL ACTIVITIES (CONTINUED) 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. 12,042 89,654 101,696 Accrued Compensated Absences Total long-term portion of accumulated, vested annual and sick leave for governmental fund types. 172,537 517,612 690,149 TOTAL GOVERNMENTAL ACTIVITIES $ 766,890 $ 13,560,891 $ 14,327,781 BUSINESS-TYPE ACTIVITIES Revenue Bonds $10,910,000 Utility System Revenue Bonds, Series 2005, due in annual installments of $160,000 to $690,000 beginning 2010 through 2035, with interest- only payments from 2005 through 2009; interest at 3.1% to 4.6%. Net revenues derived by the City from the utility operations are pledged for the payment of the bonds. Proceeds used for water system and wastewater system improvements. $ 290,000 $ 9,745,000 $ 10,035,000 Less unamortized bond discount - (109,945) (109,945) Total revenue bonds 290,000 9,635,055 9,925,055 Revenue Notes $8,500,000 City of Fort Walton Beach, Florida, Capital Improvement Revenue Note, Series 2013A, $28,071 representing business-type activities portion, 2.69% interest due semi-annually and principal due annually ranging from $2,478 to $3,155 through 2023. Budgeted and appropriated half-cent sales tax is pledged for payment of the bonds. Business-type activities portion of proceeds used to purchase a grounds sweeper for City's municipal golf course. 2,478 25,593 28,071 $79,195 City of Fort Walton Beach, Florida, Capital Improvement Revenue Note, Series 2011, due in quarterly installments of $4,293 through 2016; interest at 2.55%. Available non-ad valorem revenues are pledged for payment of the bonds. Proceeds used for purchase of certain equipment for City's municipal golf course. 16,165 29,297 45,462 Total revenue notes 18,643 54,890 73,533 66  City of Fort Walton Beach, Florida NOTES TO FINANCIAL STATEMENTS September 30, 2013 NOTE 14 - LONG-TERM DEBT (CONTINUED) Description of Long-Term Debt Outstanding (Continued) Current Long-Term Total BUSINESS-TYPE ACTIVITIES (CONTINUED) State revolving loans $19,504,447 State of Florida Department of Environmental Protection Revolving Loan Fund; semi- annual payments of $594,037 including interest at 1.90% beginning November 15, 2014, through May 15, 2034 if fully drawn. As of September 30, 2013, $7,068,522 has been drawn on the loan. Proceeds used for force main replacement, storage tank construction and pump station upgrades as disclosed in Note 5. - 7,068,522 7,068,522 Accrued Compensated Absences Accumulated, vested annual compensation for Enterprise Funds. 55,236 165,701 220,937 TOTAL BUSINESS-TYPE ACTIVITIES $ 363,879 $ 16,924,168 $ 17,288,047 GRAND TOTAL LONG-TERM DEBT $ 31,615,828 For the governmental activities, compensated absences are generally liquidated by the General Fund. 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, 2013, are as follows: Governmental Activities Leases Revenue Note Year Ending September 30 Principal Interest Principal Interest 2014 $ 12,042 $ 13,016 $ 582,311 $ 362,792 2015 13,774 11,284 617,795 330,332 2016 15,755 9,303 630,920 314,618 2017 18,021 7,036 648,985 298,562 2018 20,613 4,444 661,948 282,049 2019-2023 21,491 1,477 3,385,263 1,153,318 2024-2028 - - 6,127,340 720,645 2029-2033 - - 881,374 40,788 Total $ 101,696 $ 46,560 $ 13,535,936 $ 3,503,104 67  City of Fort Walton Beach, Florida NOTES TO FINANCIAL STATEMENTS September 30, 2013 NOTE 14 - LONG-TERM DEBT (CONTINUED) Annual Requirements to Amortize Debt Outstanding (Continued) Business-Type Activities Municipal Loan/Revenue Bonds Revenue Note State Revolving Loan Year Ending September 30 Principal Interest Principal Interest Principal Interest 2014 $ 290,000 $ 432,459 $ 18,643 $ 2,753 $ - $ - 2015 300,000 422,246 19,132 2,250 972,932 215,142 2016 310,000 410,996 15,336 1,755 1,077,351 110,723 2017 320,000 399,371 2,690 1,522 1,097,918 90,156 2018 335,000 386,571 2,763 1,450 1,118,877 69,197 2019-2023 1,900,000 1,716,748 14,969 6,092 2,801,444 78,649 2024-2028 2,325,000 1,279,188 - - - - 2029-2033 2,905,000 707,950 - - - - 2034-2039 1,350,000 91,800 - - - - Total $ 10,035,000 $ 5,847,329 $ 73,533 $ 15,822 $ 7,068,522 $ 563,867 Refunding On May 6, 2013, the City issued $4,470,610 of Capital Improvement Refunding Revenue Notes, Series 2013, with a fixed interest rate of 2.69% for the purpose of current refunding the remaining outstanding principal on its Capital Improvement Bonds, Series 2001, which bore interest ranging from 2.50% to 5.00%. The refunding was undertaken to take advantage of favorable interest rates. The cash flow requirements of the refunded 2001 bonds, prior to the refunding, was $6,898,278 from July 1, 2013 to July 1, 2031. The cash flow requirements of the 2013 refunding notes are $5,529,544. The current refunding resulted in an economic gain (difference between the present value of the debt service payments on the old and new debt) of approximately $1,200,000. NOTE 15 - COMMENTS REQUIRED BY THE BOND AND NOTE ORDINANCES Utility System Revenue Bonds, Series 2005 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. 68  City of Fort Walton Beach, Florida NOTES TO FINANCIAL STATEMENTS September 30, 2013 NOTE 15 - COMMENTS REQUIRED BY THE BOND AND NOTE ORDINANCES (CONTINUED) Utility System Revenue Bonds, Series 2005 (Continued) 2. The City is required to establish Sinking Fund amounts sufficient to pay 1/6 of all interest becoming due on the Bonds on the next semi-annual interest payment date and 1/12 of all principal maturing on the Bonds in the current Bond Year. Sinking Fund