Fort Walton Beach — Annual Comprehensive Financial Report, September 30, 2022 — reading text

For tWal tonBeach,Fl ori da www. fwb. org 850- 833- 9500 AnnualComprehensi ve Fi nanci alReport FY2021- 22 CITYOFFORTWALTONBEACH,FLWITH COMPLIANCEMATTERSANDRESPONSES FISCALYEARENDEDSEPTEMBER30,2022 CITY OF FORT WALTON BEACH, FLORIDA ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2022 PREPARED BY: THE FINANCE DEPARTMENT City of Fort Walton Beach 107 Miracle Strip Parkway Fort Walton Beach, FL 32548 www.fwb.org  CITY OF FORT WALTON BEACH, FLORIDA TABLE OF CONTENTS FOR THE YEAR ENDED SEPTEMBER 30, 2022 Page CITY OFFICIALS I. INTRODUCTORY SECTION Table of Contents i Letter of Transmittal City Manager iv GFOA Certificate of Achievement x Organizational Chart xi II. FINANCIAL SECTION Independent Auditors’ Report 1 A. MANAGEMENT’S DISCUSSION AND ANALYSIS 4 B. BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Position 15 Statement of Activities 16 Fund Financial Statements Governmental Funds Balance Sheet 17 Reconciliation of the Balance Sheet to the Statement of Net Position 18 Statement of Revenues, Expenditures and Changes in Fund Balance 19 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance to the Statement of Activities 20 Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – General Fund 21 Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – Community Redevelopment Agency 22 Proprietary Funds Statement of Net Position 23 Statement of Revenues, Expenses and Changes in Net Position 25 Statement of Cash Flows 26 Fiduciary Funds Statement of Fiduciary Net Position 28 Statement of Changes in Fiduciary Net Position 29 Notes to the Financial Statements 30 i  CITY OF FORT WALTON BEACH, FLORIDA TABLE OF CONTENTS FOR THE YEAR ENDED SEPTEMBER 30, 2022 Page Schedule II. FINANCIAL SECTION (CONTINUED) C. REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED) Pension and OPEB Schedules Schedules of Changes in Net Pension Liability and Related Ratios 86 Schedule of Changes in Net OPEB Liability and Related Ratios 89 Schedule of Pension Contributions 90 Schedule of Investment Returns 91 Notes to the Schedule of Pension Contributions – General Employees’ Retirement Fund 92 Notes to the Schedule of Pension Contributions – Police Officers’ Retirement Fund 94 Notes to the Schedule of Pension Contributions – Firefighters’ Retirement Fund 96 D. COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Non-Major Governmental Funds Combining Balance Sheet 98 Combining Statement of Revenues, Expenditures and Changes in Fund Balance 99 Schedules of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual Law Enforcement Trust Special Revenue Fund 100 Law Enforcement Trust Training Special Revenue Fund 101 Florida Building Code Special Revenue Fund 102 Community Development Block Grant Special Revenue Fund 103 Beal Memorial Cemetery Perpetual Care Special Revenue Fund 104 Debt Service Fund 105 III. STATISTICAL SECTION (UNAUDITED) Net Position by Component 106 1 Changes in Net Position 107 2 Fund Balances – Governmental Funds 109 3 Changes in Fund Balances – Governmental Funds 110 4 Revenues and Other Sources 111 5 Assessed Value of Taxable Property 112 6 ii  CITY OF FORT WALTON BEACH, FLORIDA TABLE OF CONTENTS FOR THE YEAR ENDED SEPTEMBER 30, 2022 Page Schedule III. STATISTICAL SECTION (UNAUDITED) Property Tax Rates Per $1,000 of Taxable Value – All Direct and Overlapping Governments 113 7 Principal Taxpayers 114 8 Property Tax Levies and Collections 115 9 Ratios of Outstanding Debt by Type 116 10 Ratio of Net General Bonded Debt Outstanding 117 11 Pledged Revenue Coverage – Schedule of Revenue Bond Coverage 118 12 Direct and Overlapping Governmental Activities Debt – General Obligations 119 13 Major Employers 120 14 Miscellaneous Demographical Statistics 121 15 Full-Time Equivalent Employees by Function/Program 122 16 Permits, Licenses and Recreation Facilities 123 17 Elections - Okaloosa County Voter Registration 124 18 Special Assessment Billings and Collections 125 19 Major Revenue Sources 126 20 Water and Wastewater Service Rates 127 21 Sanitation and Recycling Service Rates 128 22 Operating Indicators by Function/Program 129 23 Capital Asset Statistics by Function/Program 130 24 Insurance Coverage 131 25 IV. COMPLIANCE SECTION Schedule of Receipts and Expenditures of Funds Related to the Deepwater Horizon Oil Spill 134 Independent Auditors’ Report on the Schedule of Receipts and Expenditures of Funds Related to the Deepwater Horizon Oil Spill 135 Schedule of Expenditures of Federal Awards 136 Notes to the Schedule of Expenditures of Federal Awards 137 Independent Auditors’ Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 138 Independent Auditors’ Report on Compliance for the Major Federal Programs and on Internal Control over Compliance Required by the Uniform Guidance 140 Schedule of Findings and Questioned Costs 143 Summary Schedule of Prior Audit Findings 147 Independent Accountants’ Report on an Examination of Compliance Requirements in Accordance with Chapter 10.550, Rules of the Auditor General 148 Management Letter 149 iii  City of Fort Walton Beach “The Treasure of the Emerald Coast” 107 Miracle Strip Parkway SW * Fort Walton Beach, FL 32548 (850) 833-9504 * Fax (850) 833-9640 www.fwb.org March 15, 2023 Honorable Mayor, City Council Members, & Citizens of the City of Fort Walton Beach City of Fort Walton Beach 107 Miracle Strip Parkway SW Fort Walton Beach, FL 32548 Ladies and Gentlemen: The Comprehensive Annual Financial Report of the City of Fort Walton Beach, Florida for the fiscal year ended September 30, 2022, is hereby submitted herewith pursuant to Chapter 218.39(1)(d) of the Florida Statutes requiring each local government entity to complete an audit report within nine (9) months after the end of the fiscal year. This report consists of management’s representations concerning the finances of the City of Fort Walton Beach, Florida. Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making these representations, management of the City of Fort Walton Beach has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City’s financial statements in conformance with GAAP (Generally Accepted Accounting Principles). Because the cost of internal controls should not outweigh their benefits, the City’s comprehensive framework of internal controls has been designed to provide reasonable, rather than absolute, assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The financial statements of the City of