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

14,102 3,983 - 18,085 Decrease (increase) in assets: Accounts receivable (182,740) (114,178) (18,621) (315,539) Inventory 2,622 - - 2,622 Net pension asset (1,309,580) (705,252) (224,343) (2,239,175) Decrease in deferred outflows of resources 211,457 119,333 40,138 370,928 Increase (decrease) in liabilities: Accounts payable (435,329) 18,546 20,730 (396,053) Compensated absences payable 13,496 1,205 (12,687) 2,014 Wages 12,906 9,603 (2,744) 19,765 Other liabilities 567 246 (26) 787 Customer deposits 45,615 - - 45,615 Unearned revenue 8,589 - - 8,589 Other post-employment benefits 1,505 1,003 396 2,904 Increase in deferred inflows of resources 1,080,165 587,907 186,350 1,854,422 Net cash provided by operating activities $ 3,043,047 $ 882,151 $ 430,516 $ 4,355,714 SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITES Capital grants receivable $ - $ - $ 15,018 $ 15,018 SUPPLEMENTAL DISCLOSURES OF NONCASH TRANSACTIONS Amortization of deferred loss on refunding $ 5,613 $ - $ - $ 5,613 See notes to the financial statements. 27  CITY OF FORT WALTON BEACH, FLORIDA FIDUCIARY FUNDS STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30, 2022 Employee Retirement Funds ASSETS Cash and cash equivalents $ 3,406,140 Investments, at fair value U.S. Government and Agency obligations 10,674,540 Corporate obligations 3,170,437 Corporate equity 10,629,837 Mutual funds and exchange-traded funds 45,885,546 External investment pools 5,180,563 Commingled real estate investment funds 13,660,091 Total investments 89,201,014 Accounts receivable 30,083 TOTAL ASSETS 92,637,237 LIABILITIES Accounts payable 152,126 NET POSITION RESTRICTED FOR PENSIONS $ 92,485,111 See notes to the financial statements. 28  CITY OF FORT WALTON BEACH, FLORIDA FIDUCIARY FUNDS STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE YEAR ENDED SEPTEMBER 30, 2022 Employee Retirement Funds ADDITIONS Contributions Employer $ 3,306,505 Plan members 513,757 State of Florida 492,735 Total contributions 4,312,997 Investment income (loss) (15,360,173) Less investment expense (461,473) Net investment income (loss) (15,821,646) Miscellaneous revenue 23,430 TOTAL ADDITIONS (11,485,219) DEDUCTIONS Benefits and refunds paid Retirement payments 6,763,460 Disability payments 196,351 Total benefits and refunds paid 6,959,811 Administrative expenses Legal 16,619 Contractual services 218,161 Other 91,755 Total administrative expenses 326,535 TOTAL DEDUCTIONS 7,286,346 CHANGE IN FIDUCIARY NET POSITION (18,771,565) NET POSITION RESTRICTED FOR PENSIONS Beginning of year 111,256,676 End of year $ 92,485,111 See notes to the financial statements. 29  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2022 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND DESCRIPTION OF THE CITY Description of the City The City of Fort Walton Beach, Florida, (the City) was originally chartered as a municipality under laws of the State of Florida Special Act of the Florida Legislature in 1937. The City Manager – Council form of government was established in 1953. As authorized by its charter, the City provides the following services: public safety (police, fire, and inspection), highways and streets, water and sewer, sanitation, stormwater, culture and recreation, public improvements, planning and zoning, and general administrative services. The financial statements of the City have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), as applicable to governmental units and the Uniform Accounting System mandated by Chapter 218.33, Florida Statutes. The Governmental Accounting Standards Board (GASB) is the standard–setting body for governmental accounting and financial reporting. The following is a summary of the more significant accounting policies of the City: The Reporting Entity A seven-member City Council and a Mayor govern the City, each elected at-large for four-year terms. The Council has no powers other than those expressly vested in it by State Statute and the City Charter, and their governmental powers cannot be delegated. As required by U.S. GAAP, these financial statements present the City of Fort Walton Beach (the primary government) and its blended component unit. In evaluating the City as a reporting entity, management has considered all potential component units for which the City may or may not be financially accountable and, as such, be included within the City's financial statements. Management utilized criteria set forth in the GASB literature for determining financial accountability of potential component units in evaluating all potential component units. In accordance with GASB guidance, the City (primary government) is financially accountable if it appoints a voting majority of the potential component unit's governing board and 1) it is able to impose its will on the organization or 2) there is a potential for the organization to provide specific financial benefit to or impose specific financial burden on the City. In addition, component units can be other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete. As of September 30, 2022, the City had one component unit, which has been presented in the financial statements of the primary government using the blended presentation method and is presented as a governmental fund type with a fiscal year end of September 30. The Fort Walton Beach Community Redevelopment Agency (the CRA) was formed to prepare a community redevelopment plan for a designated geographic area within the City of Fort Walton Beach, Florida. All of the City's council members serve as board members of the CRA. The CRA’s governing body is the same as the governing body of the City. The CRA functions as a department of the City. City management has operational and fiscal responsibility for the CRA’s activities. The CRA has a separate standalone audit report that can be obtained by contacting the Growth Management Department, City Hall Annex, 105 Miracle Strip Parkway S.W., Fort Walton Beach, Florida 32548 or online at www.fwb.org. 30  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2022 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND DESCRIPTION OF THE CITY – CONTINUED The Reporting Entity – Continued The Fort Walton Beach Housing Authority (the Authority) is considered a related organization to the City rather than a component unit. The City Council appoints the board members of the Authority. However, the Authority's board operates independently of the City Council and does not create a financial burden or benefit to the City. Government-Wide and Fund Financial Statements The basic financial statements include both government-wide (based on the City as a whole) and fund financial statements. The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the non-fiduciary activities of the primary government and its component unit. For the most part, the effects of interfund activity have been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely, to a significant extent, on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a