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

771,533 Capital assets being depreciated/amortized Buildings 204,849 - - (21,527) 183,322 Improvements other than buildings 51,240,435 293,792 (42,857) 38,781 51,530,151 Software 120,031 - - - 120,031 Machinery and equipment 11,128,028 298,512 (100,041) 51,778 11,378,277 Right-of-use assets - 222,484 - - 222,484 Total capital assets being depreciated/amortized 62,693,343 814,788 (142,898) 69,032 63,434,265 Less accumulated depreciation/amortization Buildings (127,241) (4,120) - 21,526 (109,835) Improvements other than buildings (23,625,793) (1,666,946) 33,985 3,177 (25,255,577) Software (99,659) (8,140) - - (107,799) Machinery and equipment (7,919,591) (723,549) 100,041 17,307 (8,525,792) Right-of-use assets - (34,401) - - (34,401) Total accumulated depreciation/amortization (31,772,284) (2,437,156) 134,026 42,010 (34,033,404) Total capital assets being depreciated/amortized, net 30,921,059 (1,622,368) (8,872) 111,042 29,400,861 Business-type activities, net $ 31,781,521 $ (1,600,255) $ (8,872) $ - $ 30,172,394 50  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2022 6. CHANGES IN CAPITAL ASSETS – CONTINUED Amortization of equipment under financing contracts and right-of-use assets is included with depreciation expense in the financial statements. Depreciation and amortization expense was charged to functions/programs of the primary government as follows: Depreciation/Amortization Expense Governmental activities General government $ 578,184 Public safety 981,302 Physical environment 58,063 Transportation 504,690 Economic environment 187,156 Culture and recreation 1,210,942 Total depreciation/amortization expense – governmental activities $ 3,520,337 Business-type activities Utilities Fund $ 1,722,982 Sanitation Fund 277,731 Stormwater Fund 436,443 Total depreciation/amortization expense – business-type activities $ 2,437,156 51  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2022 7. DEFERRED OUTFLOWS OF RESOURCES AND DEFERRED INFLOWS OF RESOURCES As of September 30, 2022, the City had various components of deferred outflows of resources and deferred inflows of resources as follows: Governmental activities: Community General Redevelopment Governmental Fund Fund Activities Deferred outflows City pension contributions made subsequent to the measurement date $ - $ - $ 3,564,618 Differences between expected and actual experience on pension plan actuarial assumptions - - 1,003,853 Changes in assumptions related to pension plan - - 1,706,093 City OPEB contributions made subsequent to the measurement date 186,738 Changes in assumptions related to OPEB plan - - 1,225,539 Total deferred outflows $ - $ - $ 7,686,841 Deferred inflows Differences between expected and actual experience on pension plan actuarial assumptions $ - $ - $ 105,742 Net difference between projected and actual earnings on pension plan investments - - 8,212,665 Differences between expected and actual experience on OPEB plan actuarial assumptions - - 795,783 Changes in assumptions related to OPEB plan 219,773 Lease contracts 4,180,400 - 4,180,400 Unavailable revenue - special assessments 30,929 210,673 - Unavailable revenue - long-term receivable from sale of buildings 494,636 - - Total deferred inflows $ 4,705,965 $ 210,673 $ 13,514,363 52  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2022 7. DEFERRED OUTFLOWS OF RESOURCES AND DEFERRED INFLOWS OF RESOURCES – CONTINUED Business-type activities: Utilities Sanitation Stormwater Business-Type Fund Fund Fund Activities Deferred outflows City pension contributions made subsequent to the measurement date $ 125,114 $ 67,378 $ 21,433 $ 213,925 Deferred loss on refunding 60,340 - - 60,340 City OPEB contributions made subsequent to the measurement date 25,953 17,286 6,820 50,059 Changes in assumptions related to OPEB plan 170,345 113,456 44,736 328,537 Total deferred outflows $ 381,752 $ 198,120 $ 72,989 $ 652,861 Deferred inflows Net difference between projected and actual earnings on pension plan investments $ 1,284,038 $ 691,497 $ 219,967 $ 2,195,502 Changes in assumptions related to OPEB plan 30,545 20,345 8,026 58,916 Differences between expected and actual experience on OPEB plan actuarial assumptions 110,599 73,666 29,062 213,327 Lease contracts 100,501 - - 100,501 Total deferred inflows $ 1,525,683 $ 785,508 $ 257,055 $ 2,568,246 8. DEFINED BENEFIT PENSION PLANS The City of Fort Walton Beach, Florida sponsors three single employer defined benefit pension plans: the General Employees' Retirement Fund (GERF), the Police Officers' Retirement Fund (PORF) and the Firefighters' Retirement Fund (FRF). These plans provide benefits for all qualifying employees of the City. The financial activity of each plan is reported as a Pension Trust Fund in the City of Fort Walton Beach, Florida's internal combined financial statements and can be found under subheading “Fund Financial Statements” of this note. There is no separate report available for the individual pension plans. Plan Description – General Employees’ Retirement Fund (GERF) Plan Administration The authority and responsibility for the establishment, amendment and administration of this Plan is vested in the City Council, and the Members thereof shall be designated as trustees of the fund. The trustees are authorized to adopt reasonable rules and regulations for the administration of the fund created by this Plan. 53  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2022 8. DEFINED BENEFIT PENSION PLANS – CONTINUED Plan Description – General Employees’ Retirement Fund (GERF) – Continued Plan Administration – Continued The Plan is a single employer defined benefit pension plan administered by the City’s Finance Director. The Finance Director shall administer this Plan for the trustees and participants, subject at all times to the limitations and conditions specified in or imposed by provisions of this Plan and the rules and regulations adopted by the City Council. The trustees and the plan administrator shall serve without additional compensation beyond that already provided by the City for their respective duties. Plan membership consists of all full-time City employees including the City Manager, Finance Director, and the Chief of Police, if they elect to participate, but not including City Council Members, police officers other than the Chief of Police, and firefighters. Effective January 1, 2010, the plan is closed to new entrants. Plan Membership as of October 1, 2020: Inactive Plan Members or Beneficiaries Current Receiving Benefits 172 Inactive Plan Members Entitled to But Not Yet Receiving Benefits 40 Active Plan Members 56 268 Benefits Provided The plan provides retirement, termination, disability and death benefits. A member may retire at age 52 with 10 years of credited service (early retirement) or at age 62 and 10 years of credited service (normal retirement). Benefits become 100% vested upon completion of 10 years of credited service. For the City Manager, Finance Director, or Department Heads, including the Chief of Police, the Member becomes vested at 20% per year, except that credited service other than that as a Charter Officer or Department Head will accrue at a rate of 10% per year. Retirement benefits