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

Outstanding 25,814 13,812 24,934 23,745 50,748 37,557 Other Liabilities 3,004 2,734 1,705 2,246 4,709 4,980 Total Liabilities 28,818 16,546 26,639 25,991 55,456 42,537 Deferred Inflow of Resources 638 - 83 - 721 - Net Position Net Investment in Capital Assets 27,444 24,866 12,887 13,779 40,330 38,645 Restricted 2,595 4,837 540 1,450 3,135 6,288 Unrestricted 160 10,701 10,657 9,659 10,817 20,360 Total Net Position $30,199 $40,404 $24,084 $24,888 $54,282 $65,292 Reported in Table 2 are the key elements of the decrease in net position for the current year. Table 2 Statement of Activities Governmental Activities Business-Type Activities Total Activities 2015 2014 2015 2014 2015 2014 Revenues Program Revenue: Charges for Services $3,397,559 $3,342,068 $13,510,406 $12,753,215 $16,907,965 $16,095,283 Operating Grants & Contributions 909,461 682,200 - - 909,461 682,200 Capital Grants & Contributions 525,320 109,629 87,797 (157,294) 613,117 (47,665) General Revenue: Property Taxes 5,473,438 5,385,235 - - 5,473,438 5,385,235 Other Taxes 6,593,071 6,252,166 - - 6,593,071 6,252,166 Tax Increments for Redevelopment 1,552,560 1,501,208 - - 1,552,560 1,501,208 Other Revenue 4,056,026 3,793,529 169,699 85,321 2,063,108 3,878,850 Total Revenues 22,507,435 21,066,035 13,767,902 12,681,242 34,112,720 33,747,277 Expenses Primary Government General Government 2,735,875 3,179,768 - - 2,735,875 3,179,768 Public Safety 9,562,140 9,685,621 - - 9,562,140 9,685,621 Physical Environment 379,334 392,255 - - 379,334 392,255 Transportation 1,474,209 1,495,374 - - 1,474,209 1,495,374 Economic Development 1,813,782 803,175 - - 1,813,782 803,175 Culture & Recreation 4,601,503 4,829,004 - - 4,601,503 4,829,004 Debt Service Interest 340,497 483,301 - - 340,497 483,301 Business-Type Expenses Utilities - - 9,205,259 9,185,338 9,205,259 9,185,338 Sanitation - - 3,319,760 3,393,269 3,319,760 3,393,269 Golf - - - 2,215 - 2,215 Other - - 460,314 439,191 460,314 439,191 Total Expenses 20,907,340 20,868,498 12,985,333 13,020,013 33,892,673 33,888,511 Increase/(Decrease) in Net Position 1,600,095 197,537 782,569 (338,771) 2,382,664 (141,234) before Transfers Transfers 657,558 2,851,638 (657,558) (2,851,638) - - Increase/(Decrease) in Net Position 2,257,653 3,049,175 125,011 (3,190,409) 2,352,664 (141,234) Net Position – Beginning $40,404,449 37,355,274 $24,888,091 28,078,500 65,292,540 65,433,774 Restatement (12,463,443) - (929,355) (13,392,798) - Net Position – Ending $30,198,659 $40,404,449 $24,083,747 $24,888,091 $54,282,406 $65,292,540 Combined with beginning balance restatement of ($13.4) million, the government’s net position decreased by $11.0 million during the fiscal year. Both governmental and business activities experienced a decrease, primarily attributable to the implementation of Governmental Accounting Standards Board Statement (GASB) 68, Accounting and Financial Reporting for Pensions – an amendment to Statement 27 and GASB 71. 8 Current Year Impacts – Governmental Activities Governmental activities decreased the City’s net position, combined with beginning balance restatement ($12.5 million) by $10.2 million for the fiscal year ended September 30, 2015. Key elements of this change are as follows:  Restatement of the beginning net position, due to the implementation of GASB 68 and 71 attributed to a $12.5 million decrease.  Operating and Capital grants increased net position by $642,952 due to an Assistance to Firefighters grant for a new station alert system, as well a Department of Economic Opportunity grant that enabled the City to complete the Bud & Dorie Day Trail.  Other taxes increased due to the levy by Okaloosa County of a second local option fuel tax, which contributed an additional $250K to net position. Franchise fee revenue saw a 7.9% increase, primarily attributable to an increase in fuel prices during FY 2014-15.  Economic development expenses increased $1.0 million, or 125.8%, as a result of an increase in the number and amount of economic incentive grants being provided through the Community Redevelopment Agency (CRA), as well as the use of fund balance in the CRA to begin or complete construction on several projects.  Debt service expenses decreased as the City took advantage of lower interest rates and refunded its previously outstanding 2001 Capital Improvement Revenue Bond.  Overall, expenses for governmental activities remained relatively flat when compared to the prior year, while related revenue increased $1.4 million, or 6.8%, as a result of the City’s focus on future sustainability of programs and services. Chart 1 Expense and Revenue ‐ Governmental Activities (In millions) Debt Service Interest Culture and Recreation Economic Environment Transportation Physical Environment Public Safety General Government 0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 Revenues Expenses 9  Chart 2 Revenues by Source ‐ Governmental Activities Municipal Revenue Franchise Fees , Sharing , $896,837 $2,162,617 Tax Increments for Other Revenue , Redevelopment , $996,572 $1,552,560 Charges for Services , $3,397,559 Other Taxes , $4,036,009 Operating Grants & Contributions , $909,461 Capital Grants & Sales Tax , $2,557,062 Property Taxes , Contributions , $5,473,438 $525,320 Franchise Fees Other Revenue Charges for Services Operating Grants & Contributions Capital Grants & Contributions Property Taxes Sales Tax Other Taxes Tax Increments for Redevelopment Municipal Revenue Sharing Current Year Impacts – Business-Type Activities Business-type activities decreased the City’s net position, combined with beginning balance restatement ($929,355), by $804,344 for the fiscal year ended September 30, 2015. Key elements of this change are as follows:  A $929,355 decrease as a result of recording the net pension liability required by new GASB Standards.  Charges for services increased slightly by 5.9%, as a result of the implementation of the Utility and Stormwater Rate Study. Overall, expenses for the business-type activities of the City remained relatively flat, resulting in current year income exceeding expenses by $125,011. Chart 3 Expenses and Program Revenue ‐ Business‐Type Activities (In millions) $10,000,000 $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $‐ Utilities Sanitation Stormwater Expenses Revenues 10  Chart 4 Revenues by Source ‐ Business Type Activities Capital Grants &