Fort Walton Beach — Comprehensive Financial Report September 30, 2015 — reading text

(137,396) (212,837) (598) (350,831) Compensated absences payable (9,122) 3,071 3,522 (2,529) Wages 13,637 9,180 141 22,958 Other liabilities (144) (99) (24) (267) Customer deposits 23,195 - - 23,195 Other post-employment benefits 1,721 15,382 1,584 18,687 Unearned revenue (4,511) - - (4,511) Net pension liability (173,268) (69,883) (16,510) (259,661) Increase (decrease) in deferred inflows of resources 55,342 22,321 5,274 82,937 Net cash provided by operating activities $ 2,520,657 $ 300,356 $ 294,409 $ 3,115,422 SUPPLEMENTAL DISCLOSURES OF NONCASH TRANSACTIONS Amortization of discounts and deferred loss on refunding $ 5,222 $ - $ - $ 5,222 See notes to the financial statements. 28  CITY OF FORT WALTON BEACH, FLORIDA FIDUCIARY FUNDS STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30, 2015 Employee Retirement Funds ASSETS Cash and cash equivalents $ 2,999,212 Investments, at fair value U.S. Government and Agency obligations 17,548,966 Corporate obligations 2,907,713 Corporate equity 33,243,556 Mutual funds 13,948,003 Total investments 67,648,238 Due from State of Florida 180,932 TOTAL ASSETS 70,828,382 LIABILITIES Accounts payable 102,767 FIDUCIARY NET POSITION Held in trust for pension and employee retirement benefits $ 70,725,615 See notes to the financial statements. 29  CITY OF FORT WALTON BEACH, FLORIDA FIDUCIARY FUNDS STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE YEAR ENDED SEPTEMBER 30, 2015 Employee Retirement Funds ADDITIONS Contributions Employer $ 2,656,385 Plan members 534,223 State of Florida 380,032 Total contributions 3,570,640 Investment income (loss) (86,207) Less investment expense (444,729) Net investment income (loss) (530,936) Miscellaneous revenue 10,176 TOTAL ADDITIONS 3,049,880 DEDUCTIONS Benefits and refunds paid Retirement payments 5,277,431 Disability payments 154,768 Refunds 76,142 Total benefits and refunds paid 5,508,341 Administrative expenses Legal 12,453 Contractual services 140,521 Other 30,970 Total administrative expenses 183,944 TOTAL DEDUCTIONS 5,692,285 NET CHANGE IN FIDUCIARY NET POSITION (2,642,405) FIDUCIARY NET POSITION AT BEGINNING OF YEAR 73,368,020 FIDUCIARY NET POSITION AT END OF YEAR $ 70,725,615 See notes to the financial statements. 30  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND DESCRIPTION OF CITY Description of 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 (GAAP) in the United States of America 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 accounting principles generally accepted in the United States of America, these financial statements present the City of Fort Walton Beach (the primary government) and its 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 GASB No. 61 for determining financial accountability of potential component units in evaluating all potential component units. In accordance with GASB No. 61, 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, 2015, the City of Fort Walton Beach had one component unit, as defined by GASB No. 61, 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 Agency) 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 Agency. The Agency's governing body is the same as the governing body of the City. The Agency functions as a department of the City of Fort Walton Beach, Florida. City management have operational and fiscal responsibility for the Agency’s activities. 31  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND DESCRIPTION OF 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 of Fort Walton Beach, Florida 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 effect of interfund activity has 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 given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate fund financial statements are provided for the governmental and proprietary funds. Major individual governmental funds and major enterprise funds are reported as separate columns in the fund financial statements. Separate fund financial statements for the fiduciary funds are disclosed within Note 7 of these financial statements. Measurement Focus and Basis of Accounting The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Pension plans recognize revenue when contributions are due as there is a statutory