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

Beginning Ending Balance Increases Decreases Transfers Balance Business-type activities Capital assets not being depreciated/amortized Land $ 709,678 $ - $ - $ - $ 709,678 Construction in progress 548,914 - - (149,054) 399,860 Easements 34,642 - - - 34,642 Total capital assets not being depreciated/amortized 1,293,234 - - (149,054) 1,144,180 Capital assets being depreciated/amortized Buildings 493,876 - - 493,876 Improvements other than buildings 43,726,718 751,286 (667) 128,632 44,605,969 Software 103,097 8,119 - - 111,216 Machinery and equipment 9,862,499 374,186 (191,291) (46,092) 9,999,302 Total capital assets being depreciated/amortized 54,186,190 1,133,591 (191,958) 82,540 55,210,363 Less accumulated depreciation/amortization Buildings (349,947) (14,594) - - (364,541) Improvements other than buildings (12,528,977) (1,491,783) 667 - (14,020,093) Software (36,683) (10,709) - - (47,392) Machinery and equipment (5,401,589) (787,941) 191,291 48,873 (5,949,366) Total accumulated depreciation/amortization (18,317,196) (2,305,027) 191,958 48,873 (20,381,392) Total capital assets being depreciated/amortized, net 35,868,994 (1,171,436) - 131,413 34,828,971 Business-type activities, net $ 37,162,228 $ (1,171,436) $ - $ (17,641) $ 35,973,151 48  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2015 5. CHANGES IN CAPITAL ASSETS – CONTINUED Amortization of equipment under capital lease is included with depreciation expense in the financial statements. Depreciation and amortization expense was charged to functions/programs of the primary government as follows: Governmental activities General government $ 163,183 Public safety 585,637 Physical environment 62,235 Transportation 640,927 Economic environment 82,616 Culture and recreation 716,320 Total depreciation/amortization expense – governmental activities $ 2,250,918 Business-type activities Utilities fund $ 1,958,034 Sanitation fund 272,260 Other proprietary funds 74,733 Total depreciation/amortization expense – business-type activities $ 2,305,027 Construction Commitments In fiscal year 2012, the City began a project to consolidate four recreation centers into a new recreation complex. Construction of the building began in late 2013 and was substantially completed and the building was placed in service in May of 2015. As of the end of fiscal year 2015, the baseball fields and skate park were still under construction and the final building punch list items were being completed. $4,424,315 was expended in fiscal year 2015. To date $8,858,607 has been spent on the complex with an estimated total cost of $9 million dollars. The City funded the construction with a Capital Improvement Revenue Note, private donations, and the sale of two of the surplus recreation centers. In fiscal year 2011 the City began work upgrading Lift Station #3 due to expansion in the downtown area. Construction was delayed until fiscal year 2015 due to the proximity of the lift station to Santa Rosa Sound and the decision to bring engineering in house. $242,597 was spent in fiscal year 2015. To date $289,468 has been spent with an estimated total cost of $295,000. The construction was funded with a combination of current year Utility Fund revenues net assets. Final close out of the project is expected in October of 2015. 49  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2015 6. DEFERRED OUTFLOWS OF RESOURCES AND DEFERRED INFLOWS OF RESOURCES As of September 30, 2015, the City had various components of deferred outflows of resources and deferred inflows of resources as follows: Governmental activities: Governmental General Fund Activities Deferred outflows City pension contributions made subsequent to the measurement date $ - $ 2,242,304 Deferred inflows Unavailable revenue – special assessment for street resurfacing $ 48,999 $ - Unavailable revenue – long-term receivable from sale of buildings 836,922 - Net difference between projected and actual earnings on pension plan investments - 637,967 Total deferred inflows $ 885,921 $ 637,967 Business-type activities: Other Enterprise Business-Type Utilities Fund Sanitation Fund Fund – Non-Major Activities Deferred outflows City pension contributions made subsequent to the measurement date $ 276,309 $ 111,443 $ 26,330 $ 414,082 Deferred loss on refunding 99,632 - - 99,632 Total deferred outflows $ 375,941 $ 111,443 $ 26,330 $ 513,714 Deferred inflows Net difference between projected and actual earnings on pension plan investments $ 55,342 $ 22,321 $ 5,274 $ 82,937 7. 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), 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. 50  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2015 7. DEFINED BENEFIT PENSION PLANS – CONTINUED 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 of the City of Fort Walton Beach, 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. The Plan is a single-employer defined benefit pension plan administered by the City finance director. The City 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. 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, 2014: Inactive Plan Members or Beneficiaries Current Receiving Benefits 139 *Inactive Plan Members Entitled to But Not Yet Receiving Benefits 10 Active Plan Members 105 254 * - An additional 37 inactive plan members are due refunds of varying amounts but are not vested participants. 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 Chief of Police, the member becomes vested at 20% per year. Retirement benefits are a percentage (2.75% or 2.50%) of final average earnings times the years of credited service with maximum of 75% or 100% of current compensation depending on vested status at April 5, 1999. Benefits are reduced by 3% for each year by which the early retirement date precedes the age of 62. Varied benefits exist for service and non-service connected disabilities as well as death in the line of duty or other pre- retirement death. In accordance with the annual increase in CPI-U as measured in December, all retirees are entitled to an adjustment payable each April 1, subject to a minimum of 0% and a maximum of 3%. The adjustment does not apply to members