Fort Walton Beach Council agenda — 03-27-12 regular — reading text

functions that are intended to recover all or a significant portion of their costs through user fees and charges ( business -type activities). The governmental activities of the City of Fort Walton Beach include general government ( city clerk, city council, city manager, community redevelopment agency, human resources, finance, purchasing, fleet maintenance, service maintenance, and non -departmental expenses), public safety ( police, fire, and code enforcement services), physical environment ( cemetery), transportation ( engineering, streets, public works, and right -of w - ay), economic development ( Community Development Block Grant Program), culture and recreation ( parks, library, and museum), and debt service interest. The business -type activities of the City of Fort Walton Beach include utilities ( water, sewer, and storm water), sanitation, and golf. 0 The government -wide financial statements include not only the City of Fort Walton Beach itself (known as the primary government), but a blended component unit, the Community Redevelopment Agency CRA), which is a legally separate entity for which the City of Fort Walton Beach is financially m accountable, and is included in the governmental activities of the primary government. The government- wide financial statements are found on pages 14- 15 of this report. U Fund Financial Statements A fund is a grouping of related accounts used to maintain control over resources that have been segregated for specific activities or objectives. The City of Fort Walton Beach, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the City of Fort Walton Beach can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. FUNDS Governmental Funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the govemment -wide financial statements, governmental fund financial statements are reported using an accounting method called modified accrual accounting, the focus of which is on near -term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government' s near -term financial requirements. The basic governmental fund financial statements are on pages 16 -21 of this report. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long -term impact of the government' s near -tern financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balance provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City of Fort Walton Beach maintains seven individual governmental funds ( General Fund, Community Redevelopment Agency Fund, Law Enforcement Trust Fund, Law Enforcement Training Fund, Debt Service Fund, Community Development Block Grant Fund, and Beal Memorial Cemetery Perpetual Care Fund). Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balance for the General Fund and the Community Redevelopment Agency Fund. Data from the other five governmental funds are Packet Pg. 42  6. t .a combined into a single, aggregated presentation. Individual fund data for each of these non -major govemmenlal funds is provided in the form of combining statements elsewhere in this report. The City of Fort Walton Beach adopts an annual appropriated budget for its General Fund. A budgetary comparison statement is provided for the General Fund to demonstrate compliance with this budget. Proprietary Funds All proprietary funds of the City of Fort Walton Beach are maintained as enterprise funds. Fnterprise funds are used to report the same functions presented as business -type activities in the statement of net assets and the statement of activities. The City of Fort Walton Beach uses enterprise funds to account for its utilities operations ( water operations and distribution, sewer collections and treatment, and storm water management), sanitation operations ( garbage), and golf club operations. Proprietary funds provide the same type of information as the government -wide financial statements, only in more detail. The proprietary fund financial statements provide separate information on utilities operations, sanitation operations, and golf club operations, all of which are considered major funds of the City of Fort Walton Beach. In addition, information is provided on the nonmajor proprietary fund which includes the stormwater operations. The basic proprietary fund financial statements are found on pages 22 -26 of this report. Fiduciary Funds Fiduciary funds are used to account for resources held for the benefit of parties outside the government. The City' s fiduciary funds include the Pension Trust Funds ( general employees, police officers, and firefighters). Fiduciary funds me not reflected in the government -wide financial statements because the resources of those funds are not available to support the City of Fort Walton Beach' s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements are found on pages 27 -28 of this report. NOTES TO THE FINANCIAL STATEMENTS The notes to the financial statements provide additional information that is essential to the full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements begin on page 29 of this report. OTHER INFORMATION In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City of Fort Walton Beach' s progress in funding its obligation to provide pension benefits to its employees. The required supplementary information is found on pages 77 -79 of this report. The combining statements referred to earlier in connection with non -major governmental funds immediately follow the required supplementary information on Pension Funds and can be found beginning on page 80 of this report. GOVERNMENT -WIDE FINANCIAL ANALYSIS As noted earlier, net assets may serve over time as a useful indicator of a government' s financial positron. In the case of the City of Fort Walton Beach, assets exceeded liabilities by $66. 4 million ( net assets), as reported in Table 1. The government' s net assets decreased by $ 673, 480 for the fiscal year ended September 30, 2011 . By far, the largest portion of the City' s net assets, $ 41. 8 million or 62. 9 %, reflects its investment in capital assets ( e. g. land, infrastructure, buildings, machinery, and equipment) less any related debt still outstanding that was used to acquire those assets. The City uses these capital assets to provide services to Packet Pg. 4S  F61. citizens; consequently, these assets are not available for future spending. Although the City of Fort Walton Beach reports investment in its capital asset%net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the City' s net assets, 7. 7 %, represents resources that are subject to external restrictions on how they may be used. The remaining balance of $19. 5 million is unrestricted and may be used to meet the government' s ongoing obligations to citizens and creditors. Table 1 Statement of Net Assets As of September 30 In Thousands of Dollars) S0S0 Governmental Activities Business- Type Activities Total 2011 2010' 2011 2010 2011 2010* cacto Corrcnt and Other 19, 170 17, 511 S 11, 998 S 14712 S 31. 168 32, 223 Capital Assets 30,056 30, 270 24. 776 26, 886 54, 832 52156 89, 379 a`K Total Assets 49, 226 47, 781 36, 774 41, 598 Moab QQ UU Long -Term Liabilities Outstanding Other Liabilities 5, 268 1. 705 5, 228