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

Finance Director, and Financial Analyst. The Committee conducts comprehensive meetings with Department Directors to review their budget requests and a collaborative effort is undertaken to achieve City Council and department goals within fiscal constraints. The Budget Committee enlists assistance for areas of specialized interests, such as the Information Technology Manager for computer issues and the Human Resources Manager for personnel and risk management issues. Department goals, objectives, and metrics are also evaluated during budget development to determine the effectiveness of program activities and appropriate funding levels. After the departmental meetings, the Budget Committee finalizes the proposed budget given revenue projections, economic conditions, funding requirements, and City Council program priorities and issues previously identified in the budget process. Once a balanced budget is achieved, it is presented to City Council for consideration. The City Council is required by Florida State Statute and City Charter to hold public hearings on the proposed budget and adopt a final budget no later than September 30, the close of the City’s fiscal year. The appropriated budget is prepared by fund, department (e.g. financial services), and division (e.g. purchasing). Department Directors may request transfers of appropriations within a department and between divisions to transfer vii  appropriations between line items, not to increase the total budget or to transfer resources between funds. Transfers of appropriations between funds require the approval of the City Council. The budget may be amended at any time by Resolution of City Council. Budget- to-actual comparisons are provided in the report for each individual governmental fund for which an appropriated annual budget has been adopted. For the General Fund and the Community Redevelopment Agency Fund, this comparison is presented on page 22 & 23 as part of the basic financial statements for the governmental funds. For governmental funds with appropriated annual budgets, other than those previously mentioned, this comparison is presented in the combining and individual fund statements and schedules, Section D of this report, which starts on page 92. FACTORS AFFECTING FINANCIAL CONDITION The information presented in the financial statements is best understood when it is considered from the broader perspective of the specific environment within which the City of Fort Walton Beach operates. Local Economy The City of Fort Walton Beach currently faces many of the same economic challenges that are affecting the global economy, however economic stabilization is evident. For fiscal year 2015-16, the State of Florida projects an increase for each of the City’s revenue sharing funds, which suggests an uptick in discretionary spending. The Okaloosa County Property Appraiser anticipates a 3.32% increase in taxable assessed value for the City, signifying an end to the downward spiral in the real estate market. Eglin Air Force Base is the world’s largest Department of Defense installation, spanning 724 square miles. Defense contractor companies are established throughout the Northwest Florida region. It is estimated that local military bases currently represent a $6.0 billion annual economic impact on the area, with approximately 73% of the local economy supported by the military. Being located on the Gulf of Mexico in Northwest Florida, tourism is a large part of the regional economy. Regional accolades continue to enhance the area’s image, promote visibility, and generate additional tourism and sales tax dollars. Local tourism has benefited from the national shift to vacation sites accessible by driving instead of flying. The Fort Walton Beach-Destin area is a popular drive destination in Florida, according to a survey of auto visitors by Visit Florida. Long-Term Financial Planning The City undertakes several processes to assist in future planning, such as:  A 5-year CIP (Capital Improvement Program) Plan is developed and approved by City Council each year during the annual budget process.  5-year replacement plans for capital equipment, including vehicles, machinery, and computer hardware and software, are also developed and approved by Management each year during the annual budget process Relevant Financial Policies The City has several financial policies that are utilized during daily operations, as well as during the budget and financial planning processes. The City utilizes fund balance viii  reserves only for one-time non-recurring expenditures. In addition, the City maintains its fund balance level in the General Fund at 30% of fund expenditures – this policy helps to ensure that the City has sufficient funding in place for emergency and disaster relief. Major Initiatives These indicators, as well as others, were taken into account when adopting the City’s budget for fiscal year 2016. The City’s budget for fiscal year 2016 totals $37.8 million, which is $647,397 higher than the fiscal year 2015 approved budget, due to increased operating expenses throughout the City. The 2016 budget allocates $19.2 million, a 3.08% increase as compared to the fiscal year 2015 budget, to the General fund, $14.9 million to the Enterprise funds, and $3.7 million to other funds. For the fiscal year 2016 budget, the ad valorem rate was maintained at 5.7697 mills. A 9.5% increase in water and sewer rates is included in the budget, and stormwater fees are scheduled to increase $0.75. No other significant changes to the City’s various rate and fees are included in the fiscal year 2016 budget. AWARDS AND ACKNOWLDGEMENTS Awards The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Fort Walton Beach for its Comprehensive Annual Financial Report for the fiscal year ended September 30, 2014. This was the twenty-ninth consecutive year that the City received this prestigious award. In order to be awarded a Certificate of Achievement, the City must publish an easily readable and efficiently organized Comprehensive Annual Financial Report, satisfying both GAAP and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe our current report continues to meet the Certificate of Achievement Program requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. In addition, the government also received the GFOA’s Distinguished Budget Presentation Award for its annual budget dated October 1, 2015. This was the twentieth consecutive year that the City received this prestigious award. In order to qualify for the Distinguished Budget Presentation Award, the City’s budget document was judged proficient in several categories, including as a policy document, a financial plan, an operations guide, and a communications device. Acknowledgments The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of the Finance Department. We would like to express our appreciation to all members of the Department who assisted and contributed to the preparation of this report. We would also like to thank the Mayor and City Council for their unfailing support for maintaining the highest standards of professionalism in the management of the City of Fort Walton Beach’s finances and for their attention in conducting the financial operations of the City in a responsible and progressive manner. ix Appreciation is also expressed to the accounting firm of Warren Averett, LLC for their continued assistance and professionalism. Respectfully submitted, Michael D. Beedie, PE Brandy L. Ferris, CPA City Manager Finance Director x (THIS PAGE INTENTIONALLY LEFT BLANK.)  Citizens of Fort Walton Beach City Council City Clerk City Manager City Attorney 2.50 FTE 3.00 FTE Administrative Engineering & Utility Financial Fire Police Recreation Services Services Services Services Services Services 5.00 FTE 99.48 FTE 14.25 FTE 38.00 FTE 61.38 FTE 68.44 FTE Accounting Uniform Patrol Building Inspections Advanced Life Human Resources K-9 Patrol Athletics – & Permitting Auditing Support Adult & Youth Information Criminal Code Enforcement Budgeting Fire Suppression Technology Investigations Recreation Centers CRA & CDBG Purchasing Fire Prevention and Programming Insurance & Community Risk Management Engineering Debt Service & Fire Inspection Policing Grounds Management Maintenance: Fleet & Facilities Hazardous Materials Crime Prevention Parks, Right-Of- Treasury Response Way and Cemetery Garbage Collection Communications Utility Billing Fire Education Library Planning Records Contingencies & Museum Streets & Stormwater Support Services Transfers Mgmt Golf Club School Crossing Water Production & Operations