HomeMy Public PortalAbout08222022 CRACity Council Special Joint Meeting Agenda PacketCRA/CITY COUNCIL SPECIAL JOINT MEETING AGENDA
August 22, 2022
5:00 p.m.
Council Chambers
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1.Call to Order
2.Open Policy Making and Legislative Session
3.Action Items
3.1.Presentation by Purvis Gray - Audited Financial Statements
4.Comments from the Mayor and Council
5.Comments from the Audience
6.Adjournment
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Page 1 of 121
Page 2 of 121
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITOR’S REPORT
CITY OF CRESTVIEW, FLORIDA
CRESTVIEW, FLORIDA
SEPTEMBER 30, 2021
TABLE OF CONTENTS
Independent Auditor’s Report .................................................................................................................. 1-3
Management’s Discussion and Analysis ................................................................................................. 4-15
Basic Financial Statements
Government-Wide Financial Statements:
Statement of Net Position .................................................................................................................... 16
Statement of Activities .................................................................................................................... 17-18
Fund Financial Statements:
Balance Sheet - Governmental Funds .................................................................................................. 19
Reconciliation of the Balance Sheet of Governmental
Funds to the Statement of Net Position ........................................................................................... 20
Statement of Revenues, Expenditures, and Changes in
Fund Balances - Governmental Funds............................................................................................... 21
Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities ...................................................................................................................... 22
Statement of Revenues, Expenditures, and Changes in
Fund Balances - Budget and Actual - General Fund .......................................................................... 23
Statement of Net Position - Proprietary Funds ............................................................................... 24-25
Statement of Revenues, Expenses, and Changes in Net Position -
Proprietary Funds .............................................................................................................................. 26
Statement of Cash Flows - Proprietary Funds ................................................................................. 27-28
Statement of Fiduciary Net Position -
Pension Trust Funds .......................................................................................................................... 29
Statement of Changes in Fiduciary Net Position -
Pension Trust Funds .......................................................................................................................... 30
Notes to Basic Financial Statements..................................................................................................... 31-61
Page 3 of 121
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITOR’S REPORT
CITY OF CRESTVIEW, FLORIDA
CRESTVIEW, FLORIDA
SEPTEMBER 30, 2021
TABLE OF CONTENTS
Required Supplementary Information
Schedule of Changes in the Total OPEB Liability and Related Ratios ...................................................... 62
Schedule of Changes in Net Pension Liabilities and
Related Ratios - General Employees’ Retirement Plan ........................................................................ 63
Schedule of Changes in Net Pension Liabilities and Related Ratios –
Police Officers’ and Firefighters’ Retirement Plan ............................................................................... 64
Schedule of Contributions - General Employees’ Retirement Plan .................................................... 65-66
Schedule of Contributions - Police Officers’ and Firefighters’ Retirement Plan ................................ 67-68
Schedule of Investment Returns - General Employees’ Retirement Plan ............................................... 69
Schedule of Investment Returns - Police Officers’ and Firefighters’ Retirement Plan ............................ 70
Combining Financial Statements
Combining Balance Sheet – Non-Major Governmental Funds ................................................................ 71
Combining Statement of Revenues, Expenditures, and
Changes in Fund Balances – Non-Major Governmental Funds ............................................................ 72
Combining Statement of Net Position – Non-Major Enterprise Funds ................................................... 73
Combining Statement of Revenues, Expenses, and Changes
in Net Position – Non-Major Enterprise Funds .................................................................................... 74
Combining Statement of Cash Flows – Non-Major Enterprise Funds ..................................................... 75
Compliance Section
Independent Auditor’s Report on Internal Control Over Financial
Reporting and on Compliance and Other Matters Based on an
Audit of Financial Statements Performed in Accordance with
Government Auditing Standards ..................................................................................................... 76-78
Management Letter ............................................................................................................................ 79-80
Independent Accountant’s Report on Compliance with Section 218.415,
Florida Statutes .................................................................................................................................... 81
Page 4 of 121
1
INDEPENDENT AUDITOR’S REPORT
Honorable Mayor and City Council
City of Crestview
Crestview, Florida
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the City of Crestview (the
City) as of and for the year ended September 30, 2021, and the related notes to the financial statements,
which collectively comprise the City’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
Page 5 of 121
2
Honorable Mayor and City Council
City of Crestview
Crestview, Florida
INDEPENDENT AUDITOR’S REPORT
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major fund,
and the aggregate remaining fund information of the City, as of September 30, 2021, and the respective
changes in financial position, and, where applicable, cash flows thereof and the budgetary comparisons
for the General Fund for the year then ended in accordance with accounting principles generally accepted
in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis, and other required supplementary information as listed in the table of contents,
be presented to supplement the basic financial statements. Such information, although not a part of the
basic financial statements, is required by the Governmental Accounting Standards Board, who considers
it to be an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the United States
of America, which consisted of inquiries of management about the methods of preparing the information
and comparing the information for consistency with management’s responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic financial statements.
We do not express an opinion or provide any assurance on the information because the limited procedures
do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City’s basic financial statements. The combining and individual non-major fund financial
statements are presented for purposes of additional analysis and are not a required part of the basic
financial statements.
The combining and individual non-major fund financial statements are the responsibility of management
and were derived from and relate directly to the underlying accounting and other records used to prepare
the basic financial statements. Such information has been subjected to the auditing procedures applied
in the audit of the basic financial statements and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to prepare the
basic financial statements or to the basic financial statements themselves, and other additional
procedures in accordance with auditing standards generally accepted in the United States of America. In
our opinion, the combining and individual non-major fund financial statements are fairly stated in all
material respects in relation to the basic financial statements as a whole.
Page 6 of 121
3
Honorable Mayor and City Council
City of Crestview
Crestview, Florida
INDEPENDENT AUDITOR’S REPORT
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated June 21, 2022,
on our consideration of the City’s internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of that report is solely to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to provide an opinion on the
effectiveness of the City’s internal control over financial reporting or on compliance. That report is an
integral part of an audit performed in accordance with Government Auditing Standards in considering the
City’s internal control over financial reporting and compliance.
June 21, 2022
Tallahassee, Florida
Page 7 of 121
CITY OF CRESTVIEW, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
(UNAUDITED)
4
As management of the City of Crestview, we offer readers of the City of Crestview’s financial statements
this narrative overview and analysis of the financial activities of the City of Crestview for the fiscal year
ended September 30, 2021. We encourage readers to consider the information presented here.
FINANCIAL HIGHLIGHTS
• The assets and deferred outflows of the City of Crestview exceeded liabilities and deferred inflows
by approximately $66.3 million (net position) and represents an increase of approximately $5.8
million in net position from the prior year. Of this amount, approximately $41.8 million represents
the net investment in capital assets (e.g., land, infrastructure, building, machinery and
equipment), $4.5 million is restricted for future obligations, and $19.9 million is unrestricted and
may be used to meet the City’s ongoing obligations to citizens and creditors.
• The governmental net position increased by approximately $4.3 million from the prior year.
• The net position of the business-type activities of the City increased by approximately $1.6 million
from the prior year.
• At the end of the current fiscal year, unassigned fund balance for the General Fund was $16.9
million, or 73% of the total General Fund expenditures.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis are intended to serve as an introduction to the City of Crestview’s basic
financial statements. The City of Crestview’s basic financial statements comprise three components:
1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial
statements. This report also contains other supplementary information in addition to the basic financial
statements themselves.
Government-wide financial statements - The government-wide financial statements are designed to
provide readers with a broad overview of the City of Crestview’s finances, in a manner similar to a private-
sector business.
The statement of net position presents information on all of the City of Crestview’s assets and liabilities,
with the difference between the two reported as net position. The statement combines and consolidates
the governmental fund’s current financial resources (short-term spendable resources) with capital assets
and long-term obligations. Over time, increases or decreases in net position may serve as a useful
indicator of the financial position of the City of Crestview.
The statement of activities presents information showing how the government’s net position changed
during the most recent fiscal year. All changes in net position are reported as soon as the underlying
event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and
expenses are reported in this statement for some items that will only result in cash flow in future fiscal
periods.
Page 8 of 121
CITY OF CRESTVIEW, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
(UNAUDITED)
5
Both of the government-wide financial statements distinguish functions of the City of Crestview that are
principally supported by taxes and inter-governmental revenues (governmental activities) from other
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 Crestview include general
government (city clerk, city council, mayor, finance, service maintenance and non-departmental
expenses), public safety (police and fire), public works (administration and engineering), transportation
(streets and right-of-way), culture and recreation (parks and library) and debt service interest. The
business-type activities of the City of Crestview include utilities (water and sewer), sanitation, stormwater
and the newly formed entity Crestview Unlimited will operate the City’s golf operation. The government-
wide financial statements are found on pages 16-18 of this report.
Fund financial statements - A fund is a grouping of related accounts that is used to maintain control over
resources that have been segregated for specific activities or objectives. The City of Crestview, 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 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
government-wide financial statements, governmental fund financial statements focus 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. Found
on pages 19-23 of this report are the basic governmental fund financial statements.
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 statements. By doing so,
readers may better understand the long-term impact of the government’s near-term financing decisions.
Both the governmental fund balance sheet and the governmental fund statement of revenues,
expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between
governmental funds and governmental activities.
The City of Crestview maintains five individual governmental funds (General Fund, Community
Redevelopment Fund, Law Enforcement Trust Fund, Debt Service Fund and the Permanent Fund).
Information is presented separately in the governmental fund balance sheet and in the governmental
fund statement of revenues, expenditures, and changes in fund balances for the General Fund, which is
considered a major fund. Data from the other four governmental funds (Community Redevelopment
Fund, Debt Service Fund, Law Enforcement Trust Fund, and Permanent Fund) are combined into a single,
aggregated presentation. Individual fund data for each of these non-major governmental funds is
provided in the form of combining statements elsewhere in this report.
Page 9 of 121
CITY OF CRESTVIEW, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
(UNAUDITED)
6
The City of Crestview adopts an annual appropriated budget for its General Fund. A budgetary comparison
statement is provided for the General Fund to demonstrate compliance with the budget.
Proprietary funds - All proprietary funds of the City of Crestview are maintained as enterprise funds.
Enterprise funds are used to report the same functions presented as business-type activities in the
government-wide financial statements. The City of Crestview uses enterprise funds to account for its
utilities operations (water operations and distribution and sewer collections and treatment), Stormwater,
Sanitation and CV Unlimited (Blackwater Golf Club) operations.
Proprietary funds provide the same type of information as the government-wide financial statements,
only in more detail. The Utilities Fund and Sanitation Fund are both considered major proprietary funds.
Data from the other two enterprise funds (Stormwater and CV Unlimited) are combined into a s ingle,
aggregated presentation. The proprietary fund financial statements are found on pages 24-28 of this
report.
Fiduciary Funds - Fiduciary funds are used to account for resources held for the benefit of parties outside
the government. Fiduciary funds are not reflected in the government-wide financial statements because
the resources of those funds are not available to support the City of Crestview’s own programs. The
accounting used for fiduciary funds is much like that used for proprietary funds. The fiduciary fund
financial statements are found on pages 29-30 of this report.
NOTES TO THE FINANCIAL STATEMENTS
The notes provide additional information, which is essential to the full understanding of the data provided
in the government-wide and fund financial statements. On page 31 of this report is the beginning of the
notes to the financial statements.
OTHER INFORMATION
The combining statements referred to earlier in connection with the non-major governmental funds are
presented immediately following the notes to the financial statements. The combining and individual
fund statements and schedules are found on pages 71-75 of this report.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of a government’s financial
position. In the case of the City of Crestview, assets exceeded liabilities by $66.3 million (net position) for
the fiscal year ended 2021 as reported in Table 1.
Page 10 of 121
CITY OF CRESTVIEW, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
(UNAUDITED)
7
TABLE 1
CITY OF CRESTVIEW, FLORIDA
NET POSITION
AS OF SEPTEMBER 30, 2021 AND 2020
By far the largest portion of the City of Crestview’s net position, approximately $41.8 million (or 63%),
represent the investment in capital assets (e.g., land, infrastructure, building, machinery and equipment).
An additional portion of the City of Crestview’s net position, approximately $4.5 million (or 18%) represent
resources that are subject to external restrictions on how they may be used. The remaining balance of
unrestricted net position, $19.9 million, may be used to meet the government’s ongoing obligations to
citizens and creditors.
The overall increase in the City’s net position was $5.8 million during FY 2021.
Governmental Activities - Governmental activities increased the City of Crestview’s net position by $4.3
million and business-type activities increased the City’s net position by $1.6 million. Reported in Table 2
are the key elements of these changes.
Total assets, excluding capital assets $23,362,150 $31,019,836 $10,802,751 $9,870,445 $34,164,901 $40,890,281
Capital assets, net of depreciation 30,399,718 28,083,250 42,453,594 40,874,459 72,853,312 68,957,709
Total assets 53,761,868 59,103,086 53,256,345 50,744,904 107,018,213 109,847,990
Deferred outflows of resources 3,240,449 2,249,771 1,230,848 1,232,752 4,471,297 3,482,523
Total assets and deferred outflows $57,002,317 $61,352,857 $54,487,193 $51,977,656 $111,489,510 $113,330,513
Total liabilities, excluding long-term
liabilities $3,009,634 $10,458,085 $4,579,360 $1,804,448 $7,588,994 $12,262,533
Long-term liabilities 14,188,161 18,039,334 18,685,234 20,958,246 32,873,395 38,997,580
Total liabilities 17,197,795 28,497,419 23,264,594 22,762,694 40,462,389 51,260,113
Deferred inflows of resources 4,056,780 1,394,774 692,691 241,167 4,749,471 1,635,941
Net position:
Net investment in capital assets 17,913,413 14,871,971 23,899,384 21,405,074 41,812,797 36,277,045
Restricted 2,691,908 2,175,915 1,841,497 1,506,789 4,533,405 3,682,704
Unrestricted 15,142,421 14,412,778 4,789,027 6,061,932 19,931,448 20,474,710
Total net position 35,747,742 31,460,664 30,529,908 28,973,795 66,277,650 60,434,459
Total liabilities, deferred inflows
and net position $57,002,317 $61,352,857 $54,487,193 $51,977,656 $111,489,510 $113,330,513
202020212020202120202021
TotalBusiness-Type ActivitiesGovernmental Activities
Page 11 of 121
CITY OF CRESTVIEW, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
(UNAUDITED)
8
TABLE 2
CITY OF CRESTVIEW, FLORIDA
CHANGE IN NET POSITION
FOR THE YEARS ENDED SEPTEMBER 30, 2021 AND 2020
Financial Impacts
There are eight basic impacts on revenues and expenses as reflected below:
Revenues
• Economic Condition - This can reflect a declining, stable, or growing economic environment and
has a substantial impact on property, sales, gas or other tax revenue.
• Council Approved Rate Adjustments - While certain tax rates are set by statute, the City Council
has significant authority to impose and periodically adjust rates (water, wastewater, sanitation,
impact fees, recreation user fees, etc.).
Program revenues:
Charges for services $1,336,259 $1,163,097 $12,586,031 $12,195,718 $13,922,290 $13,358,815
Operating grants and contributions 226,034 4,305,524 28,083 - 254,117 4,305,524
Capital grants and contributions 300,000 20,808 - - 300,000 20,808
General revenues:
Property taxes 8,827,803 8,149,046 - - 8,827,803 8,149,046
Other taxes 6,216,544 5,804,946 - - 6,216,544 5,804,946
Other revenues 8,063,127 6,330,712 3,728 200,928 8,066,855 6,531,640
Total revenues 24,969,767 25,774,133 12,617,842 12,396,646 37,587,609 38,170,779
Expenses:
General government 5,207,463 5,340,050 - - 5,207,463 5,340,050
Public safety 11,026,288 10,152,718 - - 11,026,288 10,152,718
Economic Environment 77,778 - - - 77,778 -
Transportation 1,775,117 1,725,466 - - 1,775,117 1,725,466
Culture and recreation 1,778,176 1,796,051 - - 1,778,176 1,796,051
Interest on long-term debt 338,124 316,558 - - 338,124 316,558
Utilities fund - - 7,276,115 7,563,268 7,276,115 7,563,268
Sanitation fund - - 3,918,647 3,916,718 3,918,647 3,916,718
Stormwater fund - - 346,710 - 346,710 -
Total expenses 20,202,946 19,330,843 11,541,472 11,479,986 31,744,418 30,810,829
Increase (decrease) in net assets
before transfers 4,766,821 6,443,290 1,076,370 916,660 5,843,191 7,359,950
Transfers (479,743) (74,030) 479,743 74,030 - -
Increase (decrease) in net position $4,287,078 $6,369,260 $1,556,113 $990,690 $5,843,191 $7,359,950
Governmental Activities Business-type Activities Total
2021 2020 2021 2020 2021 2020
Page 12 of 121
CITY OF CRESTVIEW, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
(UNAUDITED)
9
• Changing Patterns in Intergovernmental Grant Revenue (both recurring and non-recurring) –
Certain recurring revenues (state revenue sharing and community development grants) may
experience significant changes periodically while non-recurring (or one-time) grants are less
predictable and often distorting in their impact on year-to-year comparisons.
• Market Impacts on Investment Income - The current market conditions have little influence on
the City’s investment income since the majority of the City’s non-pension investments consist of
certificates of deposit and deposits with the State Board of Administration.
Expenses
• Introduction of New Programs - Within functional expense categories, (police, fire, public works,
community development, parks and recreation, etc.) individual programs may be added or
deleted to meet changing community needs.
• Authorized Position Adjustments - Changes in service demand may cause the City Council to
change authorized staffing. Staffing costs (salary and related benefits) represent approximately
68% of the City’s operating costs.
• Salary Adjustments - The ability to attract and retain human and intellectual resources requires
the City to strive to approach a competitive salary range position in the marketplace.
• Inflation - While overall inflation appears to be reasonably modest, the City is a major consumer
of certain commodities such as paper, chemicals, supplies, fuel, oil, and parts. Some fluctuations
may experience commodity specific increases.
Current Year Impacts - Governmental Activities
• Net position in the Governmental Activities increased by approximately $6.4 million in the prior
year and increased approximately $4.3 million in the current year. Total revenues in the
governmental activities decreased by approximately $804 thousand and expenditures increased
approximately $872 thousand.
• Property taxes increased by approximately $679 thousand (or 8%) due to improving property
values.
• Other taxes which include Franchise fees, utility and fuel taxes increased by approximately $412
thousand (or 7%) due to improving current economic conditions.
• Other revenues which include state shared revenues increased by approximately $1.7 million (or
27%) due to improving economic conditions in the City and the State of Florida.
Page 13 of 121
CITY OF CRESTVIEW, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
(UNAUDITED)
10
The following chart compares the program revenues from governmental activities to the related
expenses. Please note that expenses exceed revenues as government seeks to identify the needs of
citizens and then raise resources to meet those needs. The excess of expenses over program revenues is
then funded by the remaining general revenues of the government.
The chart below reflects the percentage of individual revenue sources to total revenue sources for
governmental activities. Charges for Services, grants, and contributions are considered program
revenues. Taxes, intergovernmental revenues, interest and other miscellaneous revenues are considered
general revenues.
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
General
Government
Public Safety Economic
Environment
Transportation Culture and
Recreation
Interest
Chart 1
Expenses and Program Revenue -Governmental Activities
Expenses Program Revenues
5.35%
0.91%
1.20%
35.35%
24.90%
32.29%
Revenues by Source -Governmental Activities
Charges for services Operating grants and contributions
Capital grants and contributions Property taxes
Other taxes Other revenues
Page 14 of 121
CITY OF CRESTVIEW, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
(UNAUDITED)
11
Business-Type Activities
The net position from business-type activities increased by approximately $1.6 million.
• Charges for services for business-type activities increased by approximately $390,000 (or 3%).
• Total operating expenses increased by approximately $61,000 (less than 1%).
The following chart compares the program revenues from the City’s Business-type activities to the related
expenses for the fiscal year. Business-type activities differ from governmental activities in that charges
for services are designed specifically to recover the cost of providing those services, including capital costs
such as depreciation or debt service.
The following chart shows the composition of revenues from the City’s business-type activities.
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
Utilities Sanitation Stormwater
Chart 3
Expenses and Program Revenue -Business-Type Activities
Expenses Program Revenues
99.75%
0.22%0.03%
Chart 4
Revenues by Source -Business-Type Activities
Charges for services Operating grants and contributions Other revenues
Page 15 of 121
CITY OF CRESTVIEW, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
(UNAUDITED)
12
FINANCIAL ANALYSIS OF THE GOVERNMENT’S FUNDS
As noted earlier, the City of Crestview uses fund accounting to ensure and demonstrate compliance with
finance related legal requirements.
Governmental Funds - The focus of the City of Crestview’s governmental funds is to provide information
on near-term inflows, and balances of spendable resources. Such information is useful in assessing the
City of Crestview’s financing requirements. In particular, unassigned fund balance may serve as a useful
measure of a government’s net resources available for spending at the end of the fiscal year.
As of the end of the current fiscal year, the City of Crestview’s governmental funds reported combined
ending fund balance of $21.8 million, an increase of $1.2 million in comparison with the prior year.
Approximately 78% of this total amount ($16.9 million) constitutes unassigned fund balance in the
General Fund, which is available for spending at the City Council’s discretion. The remainder of fund
balance is not available for general spending because it has already been assigned by the City ($2.5
million).
The General Fund is the chief operating fund of the City of Crestview. At the end of the current fiscal year,
unassigned fund balance of the General Fund was $16.9 million, while total fund balance reached $19.4
million. As a measure of the General Fund’s liquidity, it may be useful to compare both unassigned fund
balance and total fund balance to total expenditures. Unassigned fund balance represents 73% of the
total General Fund expenditures, while total fund balance represents 83% of that same amount.
Proprietary Funds - The City of Crestview’s proprietary funds provide the same type of information found
in the government-wide financial statements, but in more detail.
Unrestricted net position of the proprietary funds totaled $4.8 million at the end of the year; of that the
Utilities Fund amounted to $1 million, the Sanitation Fund totaled $3.2 million, and the non-major funds
totaled 548 thousand. The net position for this fiscal year in the proprietary funds increased by
approximately $1.6 million. Other factors concerning the finances of these two funds have already been
addressed in the discussion of the City of Crestview’s business-type activities.
GENERAL FUND BUDGETARY HIGHLIGHTS
During the year, the City’s budget was amended to correctly reflect capital lease payments in the general
fund budget.
Revenues for the year were less than budget by approximately $698,000. Expenditures were less than
budgeted amounts by approximately $4.2 million.
Page 16 of 121
CITY OF CRESTVIEW, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
(UNAUDITED)
13
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
The City of Crestview’s investments in capital assets for its governmental and business-type activities as
of September 30, 2021, amounts to $119.4 million ($71.8 million net of accumulated depreciation). This
investment in capital assets includes land, buildings, water, wastewater and drainage systems
improvements, machinery and equipment, park facilities, roads, and highways, etc. The total increase in
the City of Crestview’s gross capital assets for the current fiscal year were $6.1 million or 5% overall, and
is summarized as follows:
• Land purchases ($1,927,852).
• Construction in progress ($1,957,353).
• Improvements to highways and streets and other infrastructure ($436,871) and water and sewer
system ($785,792).
• Purchases of equipment and vehicles for the police, fire, streets, permitting and utility
departments ($1,038,506).
• Intangible assets ($117,416).
TABLE 3
CITY OF CRESTVIEW CAPITAL ASSETS
Land $3,758,127 $2,325,326 $2,711,370 $2,216,319 $6,469,497 $4,541,645
Construction in progress 8,490,490 8,048,026 6,042,657 4,527,768 14,533,147 12,575,794
Buildings 8,394,828 8,394,828 8,954,298 8,954,298 17,349,126 17,349,126
Improvements 8,203,676 7,766,805 3,635,890 3,513,032 11,839,566 11,279,837
Infrastructure 15,071,839 15,071,839 36,401,111 35,738,177 51,472,950 50,810,016
Machinery and equipment 9,002,301 8,842,403 7,149,636 6,884,367 16,151,937 15,726,770
Capital lease equipment 1,591,177 977,838 - - 1,591,177 977,838
Intangible Assets 1,007,202 889,786 - - 1,007,202 889,786
Total prior to depreciation 55,519,640 52,316,851 64,894,962 61,833,961 120,414,602 114,150,812
Less accumulation
depreciation 25,119,922 23,847,430 22,441,368 20,959,502 47,561,290 44,806,932
Total $30,399,718 $28,469,421 $42,453,594 $40,874,459 $72,853,312 $69,343,880
Governmental Activities Business-Type Activities Total
2021 2020 2021 2020 2021 2020
Page 17 of 121
CITY OF CRESTVIEW, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
(UNAUDITED)
14
Long-Term Debt
At the end of the current fiscal year, the City of Crestview had total long-term debt outstanding of $31.8
million. The City of Crestview’s debt represents bonds secured solely by specified revenue sources (i.e.,
revenue bonds), state revolving loans, and capital leases. The State of Florida does not place a legal limit
of debt on municipalities. For general obligation debts, greater than one year, the City is required to
conduct a voter referendum process for approval of this type of debt. The City has no general obligation
debts greater than one year as of September 30, 2021.
TABLE 4
CITY OF CRESTVIEW OUTSTANDING DEBT
REVENUE BONDS, NOTES PAYABLE AND CAPITAL LEASES
Net of deferred outflows related to losses on bond refunding, total long-term debt decreased by
approximately $2 million during the 2021 fiscal year. Additional information on the City of Crestview’s
long-term debt can be found in Note 6 of this report.
ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES
The State of Florida, by constitution, does not have a state personal income tax and therefore the State
operates primarily using sales, gasoline, and corporate income taxes. Local governments (cities, counties,
and school boards) primarily rely upon property and limited array of permitted other taxes (sales,
gasoline, utility service taxes, etc.) and fees (franchise and business license) for their governmental
activities. There are a limited number of state shared revenues and recurring and non-recurring grants
from both the state and federal government, which provide funding for specific programs, projects, or
activities. For the business-type activities and certain governmental activities (permitting and recreational
programs) the user pays a related fee or charge associated with the service.
The level of taxes, fees, and charges for services (including development related impact fees) has an
impact on the City’s specific competitive ability to encourage development and redevelopment (office,
retail, residential, and industrial) for those businesses that choose to locate in our jurisdiction. As the City
and surrounding area continues to experience growth, the City places great emphasis on forecasting the
needs of the future to ensure the continued financial and economic health of our community.
Notes payable $- $- $8,518,775 $9,262,411 $8,518,775 $9,262,411
Capital leases 936,328 692,472 95,027 - 1,031,355 692,472
Revenue bonds 11,549,977 12,904,978 10,728,850 11,052,313 22,278,827 23,957,291
Total $12,486,305 $13,597,450 $19,342,652 $20,314,724 $31,828,957 $33,912,174
Governmental Activities Business-Type Activities Total
2021 2020 2021 2020 2021 2020
Page 18 of 121
CITY OF CRESTVIEW, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
(UNAUDITED)
15
The military has a significant presence in our community with Duke Field, Eglin Air Force Base, Hurlburt
Special Operations and the 7th Special Forces Operations Group, employing military and civilian personnel.
These installations are essential to the continued long-term economic vitality of this area. Eglin Air Force
Base is the world’s largest Department of Defense installation, spanning 724 square miles. Defense
contractor companies are established throughout the Northwest Florida region.
The City is undertaking several processes to assist in future planning by creating a multi-year capital
improvement program. Another factor that is being looked at is a replacement program for capital
equipment such as vehicles, computers, etc.
REQUEST FOR INFORMATION
This financial report is designed to provide a general overview of the City of Crestview’s finances for all
those with an interest in the City’s finances. Questions concerning any of the information provided in this
report or requests for additional information should be addressed to the Office of the Finance Director,
198 N. Wilson Street, Crestview, Florida 32536. The City’s website address is www.cityofcrestview.org.
Inquiries may also be sent via email to the Finance Department at ginatoussiant@cityofcrestview.org.
Page 19 of 121
BASIC FINANCIAL STATEMENTS
Page 20 of 121
Governmental Business-Type
Activities Activities Total
Assets
Cash and Cash Equivalents 21,033,280$ 6,547,462$ 27,580,742$
Investments 53,125 - 53,125
Accounts Receivable, Net 482,392 1,529,067 2,011,459
Due from Other Governments 903,209 - 903,209
Prepaid Expenses 5,535 - 5,535
Restricted Assets:
Cash and Cash Equivalents 764,962 2,414,495 3,179,457
Investments - 260,265 260,265
Net Pension Asset 119,647 51,462 171,109
Capital Assets:
Assets not Being Depreciated 12,248,617 8,754,027 21,002,644
Assets Being Depreciated, Net 18,151,101 33,699,567 51,850,668
Total Assets 53,761,868 53,256,345 107,018,213
Deferred Outflows of Resources
Deferred Loss on Bond Refunding - 788,442 788,442
Other Postemployment Benefits 468,092 78,614 546,706
Pensions 2,772,357 363,792 3,136,149
Total Deferred Outflows of Resources 3,240,449 1,230,848 4,471,297
Liabilities
Accounts Payable 587,846 463,092 1,050,938
Accrued Expenses 344,108 50,688 394,796
Unearned Revenue 54,761 1,936,085 1,990,846
Due to Other Governments 493,623 - 493,623
Accrued Interest 79,373 74,728 154,101
Customer Deposits 7,961 885,807 893,768
Non-Current Liabilities:
Due Within One Year 1,441,962 1,168,960 2,610,922
Due in More Than One Year 14,188,161 18,685,234 32,873,395
Total Liabilities 17,197,795 23,264,594 40,462,389
Deferred Inflows of Resource
Other Postemployment Benefits 214,336 35,997 250,333
Pensions 3,842,444 656,694 4,499,138
Total Deferred Inflows of Resources 4,056,780 692,691 4,749,471
Net Position
Net Investment in Capital Assets 17,913,413 23,899,384 41,812,797
Restricted for:
Non-Spendable 53,125 - 53,125
Impact Fees 293,233 1,242,781 1,536,014
Debt Service 471,730 348,716 820,446
Reserve and Replacement - 250,000 250,000
Building Permits 964,970 - 964,970
Redevelopment 908,850 - 908,850
Unrestricted 15,142,421 4,789,027 19,931,448
Total Net Position 35,747,742$ 30,529,908$ 66,277,650$
CITY OF CRESTVIEW, FLORIDA
STATEMENT OF NET POSITION
SEPTEMBER 30, 2021
Primary Government
The accompanying notes are an integral part of these financial statements.
16
Page 21 of 121
Operating Capital
Charges for Grants and Grants and
Function/Program Activities Expenses Services Contributions Contributions
Governmental Activities
General Government 5,207,463$ 716,689$ 3,148$ 300,000$
Public Safety 11,026,288 279,948 12,208 -
Economic Environment 77,778 - 110,678 -
Transportation 1,775,117 - - -
Culture and Recreation 1,778,176 339,622 100,000 -
Interest 338,124 - - -
Total Governmental Activities 20,202,946 1,336,259 226,034 300,000
Business-Type Activities
Utilities 7,276,115 7,902,735 - -
Sanitation 3,918,647 4,295,561 28,083 -
Stormwater 346,710 387,735 - -
Total Business-Type Activities 11,541,472 12,586,031 28,083 -
Total 31,744,418$ 13,922,290$ 254,117$ 300,000$
General Revenues
Taxes:
Property Taxes
Franchise and Utility Taxes
Communication Service Tax
Fuel Taxes
Other Taxes
State-Shared Revenues
Other Intergovernmental Revenue
Investment Earnings
Miscellaneous Revenue
Transfers
Total General Revenues
Change in Net Position
Net Position, Beginning of Year
Net Position, End of Year
CITY OF CRESTVIEW, FLORIDA
YEAR ENDED SEPTEMBER 30, 2021
STATEMENT OF ACTIVITIES
Program Revenues
The accompanying notes are an integral part of these financial statements.
17
Page 22 of 121
Governmental Business-Type
Activities Activities Total
(4,187,626)$ -$ (4,187,626)$
(10,734,132) - (10,734,132)
32,900 - 32,900
(1,775,117) - (1,775,117)
(1,338,554) - (1,338,554)
(338,124) - (338,124)
(18,340,653) - (18,340,653)
- 626,620 626,620
- 404,997 404,997
- 41,025 41,025
- 1,072,642 1,072,642
(18,340,653) 1,072,642 (17,268,011)
8,827,803 - 8,827,803
4,527,918 - 4,527,918
766,804 - 766,804
794,456 - 794,456
127,366 - 127,366
7,768,083 - 7,768,083
58,830 - 58,830
14,247 3,728 17,975
221,967 - 221,967
(479,743) 479,743 -
22,627,731 483,471 23,111,202
4,287,078 1,556,113 5,843,191
31,460,664 28,973,795 60,434,459
35,747,742$ 30,529,908$ 66,277,650$
CITY OF CRESTVIEW, FLORIDA
Net (Expense) Revenue and
Changes in Net Position
YEAR ENDED SEPTEMBER 30, 2021
STATEMENT OF ACTIVITIES
The accompanying notes are an integral part of these financial statements.
18
Page 23 of 121
Other Total
Governmental Governmental
General Funds Funds
Assets
Cash and Cash Equivalents 18,919,866$ 2,113,414$ 21,033,280$
Cash and Cash Equivalents - Restricted 622,770 142,192 764,962
Investments - 53,125 53,125
Accounts Receivable - Other 482,392 - 482,392
Interfund Receivables 110,678 - 110,678
Due from Other Governments 792,531 110,678 903,209
Prepaid Expenses 5,535 - 5,535
Total Assets 20,933,772$ 2,419,409$ 23,353,181$
Liabilities
Accounts Payable 585,423$ 2,423$ 587,846$
Accrued Expenses 328,249 15,859 344,108
Customer Deposits 7,961 - 7,961
Due to Other Governments 493,623 - 493,623
Interfund Payables - 110,678 110,678
Unearned Revenue 54,761 - 54,761
Total Liabilities 1,470,017 128,960 1,598,977
Fund Balances
Non-Spendable 5,535 53,125 58,660
Restricted 622,771 2,016,012 2,638,783
Assigned 1,880,909 221,312 2,102,221
Unassigned 16,954,540 - 16,954,540
Total Fund Balances 19,463,755 2,290,449 21,754,204
Total Liabilities and Fund Balances 20,933,772$ 2,419,409$ 23,353,181$
CITY OF CRESTVIEW, FLORIDA
BALANCE SHEET - GOVERNMENTAL FUNDS
SEPTEMBER 30, 2021
LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES
The accompanying notes are an integral part of these financial statements.
19
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Total Funds Balances - Governmental Funds 21,754,204$
Amounts reported for governmental activities in the
statement of net position are different because:
Capital assets used in governmental activities are not
financial resources and, therefore, are not reported
in the governmental funds.
Capital Assets 55,712,367$
Less Accumulated Depreciation (25,312,649) 30,399,718
Certain pension and other postemployment benefits are being
deferred and amortized over a period of years:
Deferred Outflows Related to Pensions and OPEB 3,240,449
Deferred Inflows Related to Pensions and OPEB (4,056,780) (816,331)
Long-term liabilities are not due and payable in the current
period and, therefore, are not reported as liabilities in the
governmental funds:
Accrued Interest Payable (79,373)
Bonds, Notes and Capital Leases (12,486,305)
Net Pension Liability (Asset)(339,292)
Compensated Absences (993,084)
Other Postemployment Benefit Obligation (1,691,795) (15,589,849)
Total Net Position - Governmental Activities 35,747,742$
CITY OF CRESTVIEW, FLORIDA
STATEMENT OF NET POSITION - GOVERNMENTAL FUNDS
SEPTEMBER 30, 2021
RECONCILIATION OF THE BALANCE SHEET TO THE
The accompanying notes are an integral part of these financial statements.
20
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Other Total
Governmental Governmental
General Funds Funds
Revenues
Taxes 13,025,675$ -$ 13,025,675$
License and Permits 1,979,272 677,071 2,656,343
Intergovernmental 7,842,269 110,678 7,952,947
Charges for Services 354,805 - 354,805
Fines and Forfeitures 243,250 - 243,250
Miscellaneous 1,234,351 2,396 1,236,747
Total Revenues 24,679,622 790,145 25,469,767
Expenditures
Current:
General Government 5,970,093 283,881 6,253,974
Public Safety 10,825,248 470,561 11,295,809
Transportation 1,468,242 - 1,468,242
Economic Environment - 77,778 77,778
Culture and Recreation 3,197,760 - 3,197,760
Debt Service:
Principal 1,512,336 209,928 1,722,264
Interest 375,062 83,818 458,880
Total Expenditures 23,348,741 1,125,966 24,474,707
Excess (Deficiency) of Revenues Over
(Under) Expenditures 1,330,881 (335,821) 995,060
Other Financing Sources (Uses)
Transfers in 882,500 522,853 1,405,353
Transfers (out)(1,727,596) (157,500) (1,885,096)
Capital Lease Obligation 532,830 80,509 613,339
Total Other Financing Sources (Uses)(312,266) 445,862 133,596
Net Changes in Fund Balances 1,018,615 110,041 1,128,656
Fund Balance, Beginning of Year 18,445,140 2,180,408 20,625,548
Fund Balance, End of Year 19,463,755$ 2,290,449$ 21,754,204$
CITY OF CRESTVIEW, FLORIDA
IN FUND BALANCES - GOVERNMENTAL FUNDS
YEAR ENDED SEPTEMBER 30, 2021
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES
The accompanying notes are an integral part of these financial statements.
21
Page 26 of 121
Net Change in Fund Balances - Governmental Funds 1,128,656$
Amounts reported for governmental activities in the statement
of activities are different because:
The repayment of principal on long-term debt consumes the current
financial resources of governmental funds but has no effect on the
government-wide net position. Also, governmental funds report the
effects of premiums, discounts and similar items when debt is first issued,
whereas these amounts are deferred in the Statement of Activities.
Principal Payments 1,722,264$
Capital Lease Obligation (613,339)
Amortization of Bond Premium 2,220 1,111,145
Capital outlays are reported in the general fund as
expenditures. However, in the statement of activities, the
cost of those assets is allocated over their useful lives as
depreciation expense.
Expenditures for Capital Assets 3,095,516
Donation of Capital Assets 300,000
(Current Year Depreciation)(1,465,219) 1,930,297
Some expenses reported in the statement of activities do not require
the use of current financial resources and, therefore, are not reported
as expenditures in the governmental funds:
Change in Accrued Interest 118,536
Change in Accrued Compensated Absences (119,073)
Change in Net Pension Liability (Asset)268,888
Change in Other Postemployment Benefits (151,371) 116,980
Change in Net Position - Governmental Activities 4,287,078$
CITY OF CRESTVIEW, FLORIDA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
STATEMENT OF ACTIVITIES - GOVERNMENTAL FUNDS
YEAR ENDED SEPTEMBER 30, 2021
AND CHANGES IN FUND BALANCES TO THE
The accompanying notes are an integral part of these financial statements.
22
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Variance with
Final Budget -
Original Final Positive
Budget Budget Actual (Negative)
Revenues
Taxes 12,602,691$ 12,602,691$ 13,025,675$ 422,984$
License and Permits 1,445,500 1,445,500 1,979,272 533,772
Intergovernmental 5,888,900 10,421,329 7,842,269 (2,579,060)
Charges for Services 225,010 225,010 354,805 129,795
Fines and Forfeitures 290,500 290,500 243,250 (47,250)
Miscellaneous 234,300 392,292 1,234,351 842,059
Total Revenues 20,686,901 25,377,322 24,679,622 (697,700)
Expenditures
Current:
General Government 4,998,444 10,311,889 5,970,093 4,341,796
Public Safety 11,133,806 11,277,109 10,825,248 451,861
Transportation 2,343,529 2,343,529 1,468,242 875,287
Culture and Recreation 2,250,307 3,532,270 3,197,760 334,510
Debt Service:
Principal 94,091 94,091 1,512,336 (1,418,245)
Interest 15,499 15,499 375,062 (359,563)
Total Expenditures 20,835,676 27,574,387 23,348,741 4,225,646
Excess (Deficiency) of Revenues Over
(Under) Expenditures (148,775) (2,197,065) 1,330,881 3,527,946
Other Financing Sources (Uses)
Transfers in 882,500 882,500 882,500 -
Transfers (out)(1,751,986) (1,751,986) (1,727,596) 24,390
Capital Lease Obligation 532,830 532,830
Total Other Financing Sources (Uses)(869,486) (869,486) (312,266) 557,220
Reserves 1,018,261 3,066,551 18,445,140 15,378,589
Net Change in Fund Balances -$ -$ 19,463,755$ 19,463,755$
YEAR ENDED SEPTEMBER 30, 2021
FUND BALANCES BUDGET AND ACTUAL - GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN
CITY OF CRESTVIEW, FLORIDA
The accompanying notes are an integral part of these financial statements.
23
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Utilities Sanitation Other
Fund Fund Funds Total
Assets
Current Assets:
Cash and Cash Equivalents 3,014,207$ 2,952,970$ 580,285$ 6,547,462$
Accounts Receivable, Net 971,334 533,914 23,819 1,529,067
Total Current Assets 3,985,541 3,486,884 604,104 8,076,529
Non-Current Assets:
Restricted Assets:
Cash and Cash Equivalents 2,414,495 - - 2,414,495
Investments 260,265 - - 260,265
Net Pension Asset 46,778 - 4,684 51,462
Capital Assets:
Assets not Being Depreciated 8,754,027 - - 8,754,027
Assets Being Depreciated, Net 33,699,567 - - 33,699,567
Total Non-Current Assets 45,175,132 - 4,684 45,179,816
Total Assets 49,160,673 3,486,884 608,788 53,256,345
Deferred Outflows of Resources
Deferred Loss on Bonding Refunding 788,442 - - 788,442
Other Postemployment Benefits 71,458 - 7,156 78,614
Pensions 330,678 - 33,114 363,792
Total Deferred Outflows of Resources 1,190,578 - 40,270 1,230,848
Enterprise Funds
Business-Type Activities
CITY OF CRESTVIEW, FLORIDA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
YEAR ENDED SEPTEMBER 30, 2021
The accompanying notes are an integral part of these financial statements.
24
Page 29 of 121
Utilities Sanitation Other
Fund Fund Funds Total
Liabilities
Current Liabilities:
Accounts Payable 179,494$ 281,834$ 1,764$ 463,092$
Accrued Expenses 47,824 - 2,864 50,688
Accrued Interest 74,728 - - 74,728
Unearned Revenue 1,936,085 - - 1,936,085
Customer Deposits 885,807 - - 885,807
Revenue Bonds, Notes and
Capital Leases Payable 1,155,205 - - 1,155,205
Compensated Absences 13,755 - - 13,755
Total Current Liabilities 4,292,898 281,834 4,628 4,579,360
Non-Current Liabilities:
Other Postemployment
Benefits Obligation 258,267 - 25,862 284,129
Compensated Absences 206,438 - 7,220 213,658
Revenue Bonds, Notes and
Capital Leases Payable 18,187,447 - - 18,187,447
Total Non-Current Liabilities 18,652,152 - 33,082 18,685,234
Total Liabilities 22,945,050 281,834 37,710 23,264,594
Deferred Inflows of Resources
Other Postemployment Benefits 32,720 - 3,277 35,997
Pensions 596,919 - 59,775 656,694
Total Deferred Inflows of Resources 629,639 - 63,052 692,691
Net Position
Net Investment in Capital Assets,
Net of Related Debt 23,899,384 - - 23,899,384
Restricted 1,841,497 - - 1,841,497
Unrestricted 1,035,681 3,205,050 548,296 4,789,027
Total Net Position 26,776,562$ 3,205,050$ 548,296$ 30,529,908$
Enterprise Funds
Business-Type Activities
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
YEAR ENDED SEPTEMBER 30, 2021
CITY OF CRESTVIEW, FLORIDA
The accompanying notes are an integral part of these financial statements.
25
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Utilities Sanitation Other
Fund Fund Funds Total
Operating Revenue
Charges for Service 7,574,230$ 4,295,561$ 387,735$ 12,257,526$
Other 328,505 - - 328,505
Total Operating Revenue 7,902,735 4,295,561 387,735 12,586,031
Operating Expenses
Personnel Expenses 2,018,267 - 276,128 2,294,395
Purchased Services 1,250,853 3,895,996 - 5,146,849
Repairs and Maintenance 221,891 - 24,490 246,381
Depreciation and Amortization 1,481,866 - - 1,481,866
Materials and Supplies 319,539 - 31,650 351,189
Other Expenses 1,313,000 22,651 14,442 1,350,093
Total Operating Expenses 6,605,416 3,918,647 346,710 10,870,773
Operating Income 1,297,319 376,914 41,025 1,715,258
Non-Operating Revenue and Expense
Interest Earnings 3,728 - - 3,728
Interest Expense (670,699) - - (670,699)
Intergovernmental Revenue - 28,083 - 28,083
Total Non-Operating Revenues
and Expenses (666,971) 28,083 - (638,888)
Income Before Operating Transfers 630,348 404,997 41,025 1,076,370
Transfers
Transfers in 698,292 - 507,271 1,205,563
Transfers (out)(625,820) (100,000) - (725,820)
Total Transfers 72,472 (100,000) 507,271 479,743
Change in Net Position 702,820 304,997 548,296 1,556,113
Net Position, Beginning of Year 26,073,742 2,900,053 - 28,973,795
Net Position, End of Year 26,776,562$ 3,205,050$ 548,296$ 30,529,908$
CITY OF CRESTVIEW, FLORIDA
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
YEAR ENDED SEPTEMBER 30, 2021
Enterprise Funds
Business-Type Activities
The accompanying notes are an integral part of these financial statements.
26
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Utilities Sanitation Other
Fund Fund Funds Total
Cash Flows from Operating Activities
Cash Received from Customers 9,705,530$ 4,242,745$ 363,916$ 14,312,191$
Cash Paid to Suppliers for
Goods and Services (3,105,701) (3,886,762) (65,954) (7,058,417)
Cash Paid to Employees for Services (2,147,176) - (224,948) (2,372,124)
Net Cash Provided by Operating Activities 4,452,653 355,983 73,014 4,881,650
Cash Flows from Non-Capital
Financing Activities
Transfers to Other Funds (625,820) (100,000) - (725,820)
Transfers from Other Funds 698,292 - 507,271 1,205,563
Intergovernmental Revenue - 28,083 - 28,083
Net Cash Provided by Non-Capital
Financing Activities 72,472 (71,917) 507,271 507,826
Cash Flows from Capital and Related
Financing Activities
Acquisition and Construction of
Capital Assets (2,939,727) - - (2,939,727)
Interest Paid (602,807) - - (602,807)
Principal Payment of Bonds, Notes
and Capital Leases (1,112,102) - - (1,112,102)
Net Cash Used in Capital and Related
Financing Activities (4,654,636) - - (4,654,636)
Cash Flows from Investing Activities
Proceeds from Maturities of Investments 99,367 - - 99,367
Purchases of Investments (844) - - (844)
Interest Received 3,728 - - 3,728
Net Cash Provided by Investing Activities 102,251 - - 102,251
Net Change in Cash and Cash Equivalents (27,260) 284,066 580,285 837,091
Cash and Cash Equivalents, Beginning of Year 5,455,962 2,668,904 - 8,124,866
Cash and Cash Equivalents, End of Year 5,428,702$ 2,952,970$ 580,285$ 8,961,957$
Enterprise Funds
Business-Type Activities
CITY OF CRESTVIEW, FLORIDA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
YEAR ENDED SEPTEMBER 30, 2021
The accompanying notes are an integral part of these financial statements.
27
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Utilities Sanitation Other
Fund Fund Funds Total
Displayed as
Cash and Cash Equivalents 3,014,207$ 2,952,970$ 580,285$ 6,547,462$
Restricted Cash and Cash Equivalents 2,414,495 - - 2,414,495
Total 5,428,702$ 2,952,970$ 580,285$ 8,961,957$
Reconciliation of Operating Income to Net Cash
Operating Income 1,297,319$ 376,914$ 41,025$ 1,715,258$
Adjustments to Reconcile Operating
Income to Net Cash Provided by
Operating Activities:
Depreciation and Amortization Expense 1,481,866 - - 1,481,866
Changes in Operating Assets
and Liabilities:
Accounts Receivable (132,508) (52,816) (23,819) (209,143)
Prepaid Expenses 66,867 - - 66,867
Accounts Payable and Accrued
Expenses (157,285) 31,885 4,628 (120,772)
Unearned Revenues 1,936,085 - - 1,936,085
Customer Deposits (782) - - (782)
Compensated Absences 48,055 - 7,220 55,275
Other Postemployment Benefits
and Related Deferred Inflows
and Outflows (17,580) - 21,983 4,403
Net Pension Liability and Related
Deferred Inflows and Outflows (69,384) - 21,977 (47,407)
Total Adjustments 3,155,334 (20,931) 31,989 3,166,392
Net Cash Provided by Operating Activities 4,452,653$ 355,983$ 73,014$ 4,881,650$
Supplemental Schedule of Non-Cash Activities
Capital Lease Obligation 121,274$ -$ -$ 121,274$
Amortization of Bond (Premium)/Discount 18,756 - - 18,756
Amortization of Refunding Loss 56,897 - - 56,897
Enterprise Funds
Business-Type Activities
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
YEAR ENDED SEPTEMBER 30, 2021
CITY OF CRESTVIEW, FLORIDA
The accompanying notes are an integral part of these financial statements.
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General Police Officers/
Employees Firefighters
Retirement Plans Plan Total
Assets
Cash and Cash Equivalents 148,540$ 407,719$ 556,259$
Accrued Interest 2,933 - 2,933
Contributions Receivable 35,938 395,855 431,793
Investments:
Fixed Income Securities 6,396,269 8,187,325 14,583,594
Common Stock and Equity Funds 14,950,027 14,795,859 29,745,886
Real Estate 3,119,968 3,171,862 6,291,830
Total Investments 24,466,264 26,155,046 50,621,310
Total Assets 24,653,675 26,958,620 51,612,295
Liabilities
Accounts Payable and Accrued Expenses 35,103 41,756 76,859
Net Position
Net Position Restricted for Pensions 24,618,572$ 26,916,864$ 51,535,436$
CITY OF CRESTVIEW, FLORIDA
STATEMENT OF FIDUCIARY NET POSITION
SEPTEMBER 30, 2021
PENSION TRUST FUNDS
Fiduciary Funds
The accompanying notes are an integral part of these financial statements.
29
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General Police Officers/
Employees Firefighters
Retirement Plans Plan Total
Additions
Contributions:
Contributions - Employee 340,203$ 326,315$ 666,518$
Contributions - City 669,775 575,189 1,244,964
Contributions - State - 378,243 378,243
Total Contributions 1,009,978 1,279,747 2,289,725
Investment Income:
Investment Earnings 4,124,050 4,424,450 8,548,500
(Investment Expenses)(83,932) (105,716) (189,648)
Net Investment Income 4,040,118 4,318,734 8,358,852
Total Additions 5,050,096 5,598,481 10,648,577
Deductions
Benefits Paid 1,229,788 835,170 2,064,958
Refunds of Contributions 21,416 14,479 35,895
Administrative Expenses 79,123 79,586 158,709
Total Deductions 1,330,327 929,235 2,259,562
Changes in Net Position 3,719,769 4,669,246 8,389,015
Net Position, Beginning of Year, As Restated 20,898,803 22,247,618 43,146,421
Net Position, End of Year 24,618,572$ 26,916,864$ 51,535,436$
CITY OF CRESTVIEW, FLORIDA
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
PENSION TRUST FUNDS
YEAR ENDED SEPTEMBER 30, 2021
Fiduciary Funds
The accompanying notes are an integral part of these financial statements.
30
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NOTES TO BASIC FINANCIAL STATEMENTS
Page 36 of 121
CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
31
Note 1 - Summary of Significant Accounting Policies
The City of Crestview (the City) was originally incorporated as the Town of Crestview under Laws of the
State of Florida in April 11, 1916. The town was re-incorporated by Ch. 9718, Acts 1923, and
Chapter 25754, Special Acts 1949, as the City of Crestview. The City operates under the Council-Mayor
form of government and provides the following services: public safety (law enforcement and fire control),
roads and streets, water and sewer, sanitation, 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:
A. Reporting Entity
The City is governed by a five-member City Council and a Mayor, each elected at-large for four-year terms.
The Council has no powers other than those expressly vested in by State Statute and the City Charter and
their governmental powers cannot be delegated.
As required by GAAP, these financial statements present the City (the primary government) and its
component units, entities for which the City is considered to be financially accountable. In evaluating the
City as 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 Statement No. 61 for determining financial accountability
of potential component units in evaluating all potential component units. In accordance with GASB
Statement 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 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, 2021, the City has two component units, the Crestview Community Redevelopment
Agency (the Agency) and Crestview Unlimited, Inc. These entities are presented in the financial
statements of the primary government as blended component units.
The Agency was established by the City as a separate legal entity in accordance with Florida Statute
166.021, Chapter 163, Part III. The Agency oversees the redevelopment of the downtown area. The
Community Redevelopment Board of Commissioners consists of the City Council. In addition, City
employees manage the Agency’s assets. The Agency is reported in the financial statements of the primary
government as a non-major governmental fund. The Agency also issues separate, audited financial
statements which are available from the Agency at 198 North Wilson Street, Crestview, FL 32536.
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CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
32
Crestview Unlimited, Inc. (Crestview Unlimited) was established as a separate not-for-profit corporation
on June 10, 2021. The purpose of this entity is to erect and maintain public facilities fostering amateur
sports. The Board of Directors of Crestview Unlimited consists of the City Council. Due to the level of
control and a benefit/burden relationship with the City, Crestview Unlimited is reported in the financial
statements of the City as a non-major enterprise fund. This fund will account for the operation of a golf
course managed by Crestview Unlimited. Crestview Unlimited does not issue separate financial
statements from the City.
The City of Crestview Housing Authority (the Authority) is considered a related organization to the City
rather than a component unit. The Mayor of the City appoints each of the five board members of the
Authority. The Mayor and members of the City Council have no oversight responsibility or any financial
relationship with the Authority, other than providing certain services. Thus, the Authority is determined
not to be a part of the reporting entity and is not included as a component unit in the financial statements.
B. 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 nonfiduciary 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
segments are 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 governmental funds, proprietary funds and fiduciary
funds, even though fiduciary funds are excluded from the government-wide financial statements. Major
individual governmental funds and major enterprise funds are reported as separate columns in the fund
financial statements.
C. 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 requirement to make the contribution. Property taxes are recorded as revenue
in the year for which they are levied. Grants and similar items are recognized as revenue soon as all
eligibility requirements imposed by the provider have been met.
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CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
33
Governmental fund financial statements are reported using the current financial resources measurement
focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both
measurable and available. Revenues are considered to be available when they are collected within the
current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City
considers revenues to be available if they are collected within 60 days of the end of the current fiscal
period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting.
However, debt service expenditures, as well as expenditures related to compensated absences and claims
and judgements, are recorded only when payment is due.
Franchise fees, licenses, sales taxes, gas taxes, operating and capital grants and interest associated with
the current fiscal period are all considered to be susceptible to accrual and so have been recognized as
revenues of the current fiscal period. All other items are considered to be measurable only when cash is
received by the City.
The City’s ad valorem taxes are assessed by the Okaloosa County Property Appraiser and collected by the
Okaloosa County Tax Collector in accordance with Florida Statutes. The City retains the right and duty to
set millage rates. Property taxes are not recorded as receivables at September 30 because, though legally
assessed as of January 1, they are not due and payable until after the close of the fiscal year ended the
following September 30.
The following is the current property tax calendar:
Assessment Date January 1, 2021
Levy Date November 1, 2021
Due Date March 31, 2022
Delinquency Date April 1, 2022
Discounts of 1% for each month taxes are paid prior to March are granted.
Revenue recognition criteria for property taxes under GASB requires that only property taxes expected to
be collected within 60 days of the current period be accrued. Property taxes which are uncollected as of
the end of the fiscal year are generally immaterial in amount and highly susceptible to uncollectibility;
therefore, they are not recorded as a receivable at the balance sheet date.
D. Basis of Presentation
The financial transactions of the City are recorded in individual funds. Each fund is a separate accounting
entity with a self-balancing set of accounts recording cash and other financial resources, together with all
related liabilities and residual equities or balances, and changes therein, which are segregated for the
purpose of carrying on specific activities or attaining certain objectives in accordance with special
regulations, restrictions or limitations. As a general rule, the effect of interfund activity has been
eliminated from the government-wide financial statements.
Amounts reported as program revenues include 1) charges to customers or applicants for goods, services
or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions.
Internally dedicated resources are reported as general revenues rather than program revenues. Likewise,
general revenues include all taxes.
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CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
34
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods in
connection with a proprietary fund’s principal ongoing operations. The principal operating revenues for
the City’s enterprise funds are charges to customers for sales and services. Operating expenses for
enterprise funds include the cost of sales and services, administrative expenses, and depreciation on
capital assets. All revenue and expenses not meeting this definition are reported as non-operating
revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the government’s policy to use
restricted resources first, then unrestricted resources as they are needed.
The following three classifications are used to categorize the fund types used by the City:
■ Governmental Funds
Governmental funds focus on the determination of financial position and changes in financial position
(sources, uses and balances of financial resources) and not net income.
The City reports the following major governmental fund:
General Fund—This is the City’s primary operating Fund. It is used to account for all financial
resources except those required to be accounted for in another fund. All general tax revenues and
other receipts that are not restricted by law or contractual agreement to some other fund are
accounted for in this fund. General operating expenditures, fixed charges and capital improvement
costs that are not paid through other funds are paid from the General Fund.
■ Proprietary Funds
Proprietary funds focus on the determination of net income, changes in net position, financial position
and cash flows. All of the City’s proprietary funds are enterprise funds, as fees are charged to external
users for services. The following is a description of the major proprietary funds of the City.
Utilities Fund—This fund accounts for the City’s distribution of potable water; sales and service and
sanitary wastewater collection; and treatment of and disposal operations services.
Sanitation Fund—This fund accounts for the City’s solid waste collection, disposal, and/or recycling
services.
■ Fiduciary Funds
Fiduciary funds are used to account for the assets held on behalf of outside parties, including other
governments. The City has two major fiduciary funds:
Crestview Police Officers/Firefighters Retirement Plan—Used to report resources that are required
to be held in trust for the members and beneficiaries of a defined benefit pension plan administered
by the City for all City police officers and firefighters.
Crestview General Employees Retirement Plan—Used to report the resources that are required to be
held in trust for the members and beneficiaries of a defined benefit pension plan administered by the
City for the employees that are not part of the police officer/firefighter plan.
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CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
35
E. Assets, Liabilities, and Net Position or Fund Balances
Cash and Cash Equivalents
The City has defined cash and cash equivalents to include cash on hand, demand deposits, certificates of
deposits, and short-term investments with original maturities of three months or less from the date of
acquisition.
Deposits and Investments
Section 218.415, Florida Statutes, requires the investment of surplus public funds and prescribes the
instruments in which those investments are authorized, specifically the State of Florida Local Government
Surplus Funds Trust Fund, direct obligations of the United States Government or other obligations
unconditionally guaranteed by the United States Government and other similar permitted investments.
The City adheres strictly to the provisions of those cited Statutes, as well as with Chapter 280, Florida
Statutes, which requires the City to maintain deposits only with “Qualified Public Depositories”. The City
maintains a cash pool available for use by all funds. Earnings from the pool are allocated to the respective
funds based on applicable cash participation by each fund.
In addition, restricted cash accounts, certificates of deposit, and other investments are separately
maintained by a few City funds in accordance with bond ordinances, retirement fund plan documents and
other contractual agreements. Investments are stated at fair value.
Cash amounts in the general and utilities funds are generally either placed in State Board of Administration
Debt Service accounts for investment of debt service moneys, invested with the State Board of
Administration for participation in the Local Government Surplus Funds Trust Fund investment pools
created by Section 218.405 and218.417, Florida Statutes, or made locally.
At September 30, 2021, the City’s investments in the Local Government Surplus Funds Trust Fund A
(“Florida PRIME”), which the State Board of Administration indicates is a Securities and Exchange
Commission Rule 2a7-like external investment pool, are similar to money market funds in which shares
are owned in the fund rather than the underlying investments. These investments are reported at fair
value, which approximates amortized cost.
Pension Trust Funds may invest in collateralized interest-bearing time deposits or savings accounts in state
or federal banks or savings and loan associations; direct obligations of the United States Government or
other obligations unconditionally guaranteed by the United States Government or an agency of the U.S.
Government; stocks, mutual funds, corporate bonds, structured mortgage products issued by the U.S.
Government, or other mortgage related or asset-backed securities provided the meet certain criteria; real
estate; and foreign fixed income and equity securities.
Receivables and Payables
Transactions between funds that are representative of lending/borrowing arrangements outstanding at
the end of the fiscal year are referred to as either “interfund receivables/payables” (i.e., the current
portion of interfund loans) or “advances to/from other funds” (i.e., the non-current portion of interfund
loans). Any residual balances outstanding between governmental activities and business-type activities
are reported in the government-wide financial statements as “internal balances”.
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CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
36
Advances between funds, if any, are offset by a fund balance reserve account in applicable governmental
funds to indicate they are not available for appropriation and are not expendable available financial
resources.
Services provided, deemed to beat market or near market rates, are treated as revenues and
expenditures/expenses. Reimbursements occur when one fund incurs a cost, charges the appropriate
benefiting fund, and reduces its related cost as a reimbursement. All other interfund transactions are
treated as transfers.
Accounts receivable from customers are reported at the outstanding balance due from customers, net of
any allowance for doubtful accounts. The City provides for doubtful accounts based on experience and
analysis of individual accounts. When the collectability of a receivable becomes questionable, an
allowance for doubtful accounts is established. When specific accounts are determined to be
uncollectible, they are written off by charging the allowance and crediting the receivable. At
September 30, 2020, the allowance for doubtful accounts for proprietary funds totaled $70,000.
Restricted Assets
Certain proceeds of the City’s Revenue Bonds, as well as certain resources set aside for their repayment,
are classified as restricted assets on the balance sheet because their use is limited by applicable bond
covenants. Additionally, impact fees and customer deposits for water and sewer services are classified as
restricted assets.
Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges,
sidewalks, and similar items), are reported in the applicable governmental or business-type activities
columns in the government-wide financial statements and in the fund financial statements for proprietary
funds. Capital assets are defined by the government as assets with an initial, individual cost of more than
$10,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or
estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated
fair market value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend
assets’ lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest
incurred during the construction phase of capital assets of business-type activities is included as part of
the capitalized value of the assets constructed, offset by any interest earned on the invested proceeds
over the same period.
Property, plant, and equipment of the primary government is depreciated using the straight-line method
over the following estimated useful lives:
Buildings and Utility System 20-50 Years
Improvements Other Than Buildings 20-40 Years
Infrastructure 20-40 Years
Machinery and Equipment 3-40 Years
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CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
37
Deferred Outflows/Inflows of Resources
The City has implemented the provisions of GASB Statement Nos. 63 and 65. GASB Statement No. 63,
Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position,
provides financial reporting guidance for deferred outflows and inflows of resources, originally introduced
and defined in GASB Concepts Statement No. 4, Elements of Financial Statements, as an acquisition or
consumption, respectively, of net assets applicable to a future reporting period. Further, GASB Concepts
Statement No. 4 also identifies net position as the residual of all other elements presented in a statement
of financial position. GASB Statement No. 65, Items Previously Reported As Assets and Liabilities,
reclassifies and recognizes certain items that were formerly reported as assets and liabilities as one of
four financial statement elements: (1) deferred outflows of resources, (2) outflows of resources,
(3) deferred inflows of resources, and (4) inflows of resources. GASB Concepts Statement No. 4 requires
that deferred outflows and deferred inflows be recognized only in those instances specifically identified
in GASB pronouncements. GASB Statement No. 65 provides that guidance.
The City reports increases and decreases in net position that relate to future periods as deferred inflows
and outflows of resources in separate sections of the statement of net position. The City’s three deferred
outflows of resources reported in the government-wide financial statements are related to deferred loss
on bond refunding, pensions and other postemployment benefits (OPEB). The City’s two deferred inflows
of resources reported in the government-wide financial statements are related to pensions and other
postemployment benefits (OPEB). The deferred loss on bond refunding is further discussed in Note 8.
The deferred outflows and inflows of resources related to pensions and OPEB are further discussed in
Note 9 and 10, respectively.
In addition to assets, the statement of net position will sometimes include a separate section for deferred
outflows of resources. This separate financial statement element, deferred outflows of resources,
represents a consumption of net position that applies to a future period(s) and so will not be recognized
as an outflow of resources (expense/expenditure) until then. The City has three types of deferred
outflows at September 30, 2021. The deferred outflows of resources arising from the refunding of bonds
is being amortized over the remaining life of the refunding bonds, and the deferred outflow of resources
related to pension expense and OPEB are discussed below.
In addition to liabilities, the statement of net position and/or balance sheet-governmental funds will
sometimes report a separate section for deferred inflows of resources. This separate financial statement
element, deferred inflows of resources, represents an acquisition of net position that applies to a future
period(s) and so will not be recognized as an inflow of resources (revenue) until that time. At
September 30, 2020, the City does not have any of this type of item, other than for pensions and OPEB as
discussed below.
Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows
of resources related to pensions, and pension expense, information about the fiduciary net position of
the City pension plans and additions to/deduction from the City pension plans’ fiduciary net position have
been determined on the same basis as they are reported by the City pension plans.
For this purpose, benefit payments (including refunds of employee contributions) are recognized when
due and payable in accordance with benefit terms. Investments are reported at fair value.
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CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
38
Other Postemployment Benefits (OPEB)
The measurement of net OPEB obligation, deferred outflows of resources, and deferred inflows of
resources related to OPEB, and OPEB expense are described in more detail in Note 10. Additions
to/deductions have been determined on the same basis as they have been reported by the OPEB plan.
Benefit payments, including refunds of employee contributions, are recognized when due and payable in
accordance with the benefit terms.
Compensated Absences
It is the City’s policy to permit employees to accumulate earned but unused vacation, personal, and sick
leave based on length of service to the City. All vacation, personal, and sick leave is accrued when incurred
in the government-wide and proprietary fund financial statements. A liability for the amounts of vacation,
personal, and sick leave is reported in the governmental fund financial statements only if they have
matured, for example, as a result of employee resignations and retirements.
Annual leave is accrued by full-time employees as follows:
Years of Employment General Police Fire
0 – 3 Years of Service 13.33 Hours 16 Hours 20 Hours
3 – 5 Years of Service 15.66 Hours 20 Hours 28 Hours*
5+ Years of Service 18 Hours 24 Hours 33 Hours*
*The fire accrual for the 3 - 5 years of service and the 5+ years of service are for those with less than 100
hours banked.
Upon termination or retirement, a maximum of 480 hours of accrued benefit will be paid for any earned
but unused leave to their credit as of the effective date of termination.
Long-Term Obligations
In the government-wide financial statements and proprietary fund types in the fund financial statements,
long-term debt and other long-term obligations are reported as liabilities in the applicable governmental
activities, business-type activities, or proprietary fund type statement of net position. Bond premiums
and discounts are deferred and amortized over the life of the bonds using the effective interest method.
Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are
reported as current period expenses.
In the fund financial statements, governmental fund types recognize the face amount of debt issued as
other financing sources. Bond premiums and discounts are recognized as other financing sources or uses
as appropriate. Issuance costs, whether or not withheld from the actual debt proceeds received, are
reported as debt service expenditures.
Classification of Fund Balance
GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, establishes
fund balance classifications that comprise a hierarchy based primarily on the extent to which government
is bound to observe constraints imposed upon the use of the resources reported in governmental funds.
Fund balance classifications, under GASB Statement No. 54, are compromised of the following:
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CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
39
■ Non-Spendable—includes amounts that are: (a) not in spendable form, or (b) legally or contractually
required to be maintained intact. The “not in spendable form” criterion includes items that are not
expected to be converted to cash, for example: inventories, deposits, prepaid items, and advances to
other funds.
■ Restricted—includes amounts that can be spent only for the specific purposes stipulated by external
resource providers, constitutionally or through enabling legislation. Restrictions may effectively be
changed or lifted only with the consent of resource providers.
■ Committed—includes fund balance amounts that can be used only for the specific purposes that are
internally imposed by a formal action of the government’s highest level of decision making authority,
the City Council. Commitments may be changed or lifted only by the City taking the same formal
action that imposed the constraint initially. Contractual obligations are included to the extent that
existing resources in the fund have been specifically committed for use in satisfying those contractual
obligations.
■ Assigned—includes fund balance amounts that sets limits as a result of the intended use of funds that
are neither restricted nor committed, per the City’s Purchasing Policy, which is set by the City’s
management. In governmental funds, other than the general fund, assigned fund balance represents
the amount that is not restricted or committed. This indicates that the resources of other
governmental funds are, at a minimum, intended to be used for the purpose of that fund.
■ Unassigned—includes residual positive fund balance within the General Fund which has not been
classified within the other above-mentioned categories. Unassigned fund balance may also include
negative balances for any governmental fund if expenditures exceed amounts restricted, committed,
or assigned for those specific purposes.
When restricted, committed, assigned, or unassigned resources are available for use in the governmental
fund financial statements, it is the City’s policy to use restricted resources first, followed by committed,
assigned resources and then unassigned resources, as they are needed.
The City has established a fund balance policy which requires that 25% of budgeted annual operating
expenses be held in reserve for unanticipated events or emergencies.
Net Position
The government-wide and business-type fund financial statements utilize a net position presentation. Net
position is categorized as net investment in capital assets, restricted and unrestricted.
■ Net Investment in Capital Assets—is intended to reflect the portion of net position which are
associated with non-liquid, capital assets, net of related debt.
■ Restricted Net Position—are liquid assets, generated from revenues and net bond proceeds, which
are not accessible for general use because of third-party (statutory, bond covenant or grant agency)
limitations.
■ Unrestricted Net Position—represents unrestricted liquid assets.
Page 45 of 121
CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
40
F. Estimates
The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of financial statements and the
reported amounts of revenue and expenditures during the reporting period. Actual results could differ
from those estimates.
G. Budgets
Budgets are adopted on a basis consistent with generally accepted accounting principles, except that
capital lease proceeds and related capital outlay are excluded from the budget. Annual appropriated
budgets are adopted by ordinance for all governmental and proprietary funds. However, budgets for
proprietary funds are not legally required to be reported on and are not included in these financial
statements. All appropriations lapse at fiscal year-end except for appropriations related to multiyear
capital projects.
Budgetary data reflected in the financial statements are established by the following procedures:
Prior to September 1 of each year, the City Council prepares in detail and adopts a budget of anticipated
revenues and expenditures for all City purposes of the ensuing year.
Proposed budgets are advertised in a newspaper of general circulation in the City and detailed in the
minutes of the Council. Public hearings are conducted for the purposes of receiving taxpayer comments.
When the budget is adopted, it has the force and effect of appropriations for the various items and
purposes specified.
The limits shall not be exceeded by the Council nor any office or department during the year.
Amendments and transfers may be made to the budget by a two-thirds vote of the Council and the
consent of the Mayor. The level of budgetary control (that is the level at which expenditures cannot
legally exceed appropriations) has been established at the fund level.
A budget amendment shall be deemed to mean the act of increasing the total budgeted amount of a given
fund as opposed to a transfer of a budgeted amount from one account to another within the same fund.
Budgeted amounts are as originally adopted, or as amended with the approval of the City Council. During
the year ended September 30, 2021, the City did not amend the General Fund’s original budget to prevent
actual expenditures from exceeding budgeted expenditures. Significant purchases, which the budget was
not amended for, were presented to and approved by City Council.
H. Upcoming Accounting Pronouncements
GASB Statement No. 87, Leases, must be implemented for the City’s fiscal year ending September 30,
2022. This statement establishes a single model for lease accounting based on the principle that leases
are the financings of the right to use an underlying asset. Under this statement, a lessee is required to
recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize
a lease receivable and a deferred inflow of resources, thereby, enhancing the relevance and consistency
of information about a government’s leasing activities. The City is still evaluating the impact the
implementation of this standard will have on its financial statements.
Page 46 of 121
CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
41
I. Restatement
Beginning net position in the Pension Trust Funds was restated to properly account for certain items that
were previously reported as liabilities that are now reported as Net Position under the provisions of GASB
Statement No. 67, Financial Reporting For Pension Plans. The restatement of beginning Net Position,
Restricted for Pensions consisted of the following:
General Police Officer’s
Employees and Firefighters
Retirement Plan Retirement Plan
Net Position, Beginning of Year,
As Originally Reported $ 20,418,189 $ 22,150,024
Prior Period Adjustment:
Remove DROP Liability 480,614 -
Remove Prepaid Contribution Liability - 97,594
Net Position, Beginning of Year,
As Restated $ 20,898,803 $ 22,247,618
Note 2 - Deposits and Investments
Deposits
Deposits may be exposed to custodial credit risk, which is the risk that in the event of a bank failure, the
government’s deposits may not be returned. The City manages its custodial credit risk by maintaining its
deposits with “Qualified Public Depositories” (QPDs), as defined in Chapter 280, Florida Statutes, which
bear no custodial credit risk or are in institutions which meet the exemption requirements of
Chapter 280.The exemptions qualify under the exemptions 280.03(e) or 280.03(f) as a deposit made in
accordance with Chapter 17.57(g). The provisions of Chapter 280 allow “Qualified Public Depositories” to
participate in a multiple financial institution collateral pool to ensure the security for public deposits.
All Qualified Public Depositories must place with the Treasurer of the State of Florida, securities which
have a market value equal to 50% of all public funds on deposit at the end of each month in excess of any
applicable deposit insurance. In the event of default by a qualified public institution, the State Treasurer
will pay public depositors all losses. Losses in excess of insurance and collateral will be paid through
assessments between all Qualified Public Depositories. Under this method, all deposits are fully insured
or collateralized with securities held by the State Treasurer in the City’s name.
Investments
As of September 30, 2021, the City held the following investments in its governmental and proprietary
funds as categorized below in accordance with GASB Statement No. 40, Deposit and Investment Risk
Disclosure:
Investment Type Fair Value Maturity Rating
Local Government Investment Pool (*) $ 757,898 < One Year AAAm
Certificates of Deposit 313,390 < One Year N/A
(*) this amount is included in cash and cash equivalents in the accompanying financial statements due to
its less than three month maturity.
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CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
42
As of September 30, 2021, the City’s Pension Funds held the following investments:
Investment Type Fair Value
Equities $ 29,745,886
Fixed Income Securities 14,583,594
Real Estate Investment Fund 6,291,830
Total $ 50,621,310
Interest Rate Risk
Section 218.415(17), Florida Statutes, limits investment maturities to provide sufficient liquidity to pay
obligations as they come due. The City minimizes interest rate risk by structuring investments to mature
to meet future operating cash requirements and investing primarily in short-term securities.
The maturity of the State Board of Administration Local Government Surplus Funds Trust Fund Florida
PRIME is based on the weighted average days to maturity (WAM). A portfolio’s WAM reflects the average
maturity in days based on the final maturity or reset date, in the case of floating rate instruments. WAM
measures the sensitivity of the portfolio to interest rate changes.
Neither the General Employees’ Retirement Plan nor the Police Officers’ and Firefighters’ Retirement Plan
have policies that limit their investment maturities as a means of managing their exposure to fair value
losses arising from increasing interest rates.
Credit Risk
Credit risk is the risk that a security or a portfolio will lose some or all of its value due to a real or perceived
change in the ability of the issuer to repay its debt. Credit risk exists when there is a possibility the issuer
or other counterparty to an investment may be unable to meet its obligations. GASB Statement No. 40
requires disclosure of credit quality ratings for investments in debt securities as well as investments in
external investment pools, money market funds, and other pooled investments of fixed income securities.
The City does not have a formal policy that limits its investment choices. Unless otherwise authorized by
law or ordinance, the City is authorized under Section 218.415, Florida Statutes, to invest and reinvest
surplus public funds in its control or possession, in accordance with resolutions to be adopted from time-
to-time in:
Less than More than
Fair Value 1 Year 1-5 Years 6-10 Years 10 Years
General Employees' Plan:
Bond Mutual Funds 6,396,269$ 6,396,269$ -$ -$ -$
Police Officers/Firefighters Plan:
Asset Backed Securities 484,541 44,184 - - 440,357
Foreign Bonds 343,427 - 180,263 139,827 23,337
Government Backed Securities 2,209,146 195 - 51,066 2,157,885
US Treasuries 1,205,934 - 602,513 603,421 -
Corporate Bonds 2,617,467 775,874 1,102,545 652,844 86,204
Bond Mutual Funds 1,326,810 1,326,810 - - -
Total 14,583,594$ 8,543,332$ 1,885,321$ 1,447,158$ 2,707,783$
Investment Maturities
Page 48 of 121
CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
43
1. The Local Government Surplus Funds Trust Fund or any intergovernmental investment pool
authorized pursuant to the Florida Interlocal Cooperation Act as provided in Chapter 163.01, Florida
Statutes.
2. Securities and Exchange Commission registered money market funds with the highest credit quality
rating from a nationally recognized rating agency.
3. Interest-bearing time deposits or savings accounts in qualified public depositories as defined in
Chapter 280.02, Florida Statutes.
4. Direct obligations of the U.S. Treasury.
5. Federal agencies and instrumentalities.
6. Rated or unrated bonds, notes, or instruments backed by the full faith and credit of the government
of Israel.
7. Other investments authorized by law or by ordinance for a county or municipality.
8. Other investments authorized by law or by resolution for a school district or a special district.
9. Securities of, or other interests in, any open-end or closed-end management type investment
company or investment trust registered under the Investment Company Act of 1940, 15 U.S.C. ss.80a-
1 et seq., as amended from time-to-time, provided the portfolio of such investment company or
investment trust is limited to obligations of the United States Government or any agency or
instrumentality thereof and to repurchase agreements fully collateralized by such United State
Government obligations and provided such investment company or investment trust takes delivery
of such collateral either directly or through an authorized custodian.
As of September 30, 2021, the City’s investment in the Florida PRIME is rated AAAm by Standard &Poor’s.
As of September 30, 2021, the General Employees’ Retirement Plan portfolio consisted of investments in
securities held in total return bond funds which are not rated by Moody’s.
As of September 30, 2021, the Police Officers’ and Firefighters’ Retirement Plan portfolio consisted of U.S.
Treasury, mortgage-backed securities, and asset backed securities/commercial mortgage-backed
securities (all rated Aaa by Moody’s). The portfolio also consisted of corporate and non-corporate bonds
with ratings ranging from Aaa to Ba1. In addition, there are certain bond mutual funds held in the portfolio
that are not rated by Moody’s.
Concentration Risk
GASB Statement No. 40 requires disclosure of the concentration of credit risk when five or more percent
of the total assets of the portfolio are invested with a single issuer.
The investment limits set aside by the City pension plans for an individual company security are
summarized below:
General Police Officers’ and
Employees’ Firefighters’
Security Retirement Plan Retirement Plan
Equities (Common Stock) 5% of Value of Plan Assets 5% of Value of Plan Assets
Fixed Income (Bonds) 5% of Value of Plan Assets 5% of Value of Plan Assets
Foreign Securities in Total
May not Exceed 25% of Value of Plan Assets 25% of Value of Plan Assets
Page 49 of 121
CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
44
Fixed income investments generally must meet certain investment grading standards and equities must
be traded on a national exchange. Investments in corporate common stocks and convertible bonds are
limited to 70% of the market value of each plan’s assets. Similar grading and/or trading criteria apply to
mutual funds, money market funds, U.S. government back securities, etc. None of the above limitations
were exceeded by either plan at September 30, 2021. Investment policies are subject to a review at least
annually by the Board of Trustees for each plan.
Fair Value Measurements
The General Employees’ Retirement Plan (GERP) and the Police Officers’ and Firefighters’ Retirement Plan
(POFRP) categorizes its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair
value of the asset. Level 1 inputs are quoted inactive markets for identical assets; Level 2 inputs are
significant other observable inputs; Level 3 are significant unobservable inputs.
The following table presents the GERP assets carried at fair value at September 30, 2021.
The following table present the POFRP assets carried at fair value at September 30, 2021.
Note 3 - Interfund Receivables, Payables, and Transfers
All transfers are routine and are consistent with the activities of the fund making the transfer. Included
in these are intergovernmental transfers and transfers from the General Fund to the Utilities Fund to
allocate expenses in the correct fund. The following presents the interfund transfers for the year ended
September 30, 2021:
Investment Type Amount (Level 1) (Level 2)(Level 3)
Equities 14,950,027$ 14,950,027$ -$ -$
Fixed Income 6,396,269 - 6,396,269 -
Total Investments Measured at Fair Value 21,346,296$ 14,950,027$ 6,396,269$ -$
Investments Measured at the Net
Asset Value (NAV)Amount
Real Estate Fund 3,119,968$
Total Investments 24,466,264$
General Employee Retirement Plan
Investment Type Amount (Level 1) (Level 2)(Level 3)
Equities 14,795,859$ 14,795,859$ -$ -$
Fixed Income 8,187,325 - 8,187,325 -
Total Investments Measured at Fair Value 22,983,184$ 14,795,859$ 8,187,325$ -$
Investments Measured at the Net
Asset Value (NAV)Amount
Real Estate Fund 3,171,862$
Total Investments 26,155,046$
Police Officers' and Firefighters' Employee Retirement Plan
Page 50 of 121
CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
45
Transfers In Transfers Out
General Fund $ 882,500 $ 1,727,596
Other Governmental Funds 522,853 157,500
Utilities Fund 698,292 625,820
Sanitation Fund - 100,000
Stormwater Fund 7,271 -
Crestview Unlimited 500,000 -
Total $ 2,610,916 $ 2,610,916
Interfund receivables and payables include the following at September 30, 2021:
Interfund Interfund
Receivable Payable
General Fund $ 110,678 $ -
CDBG Fund - 110,678
This represents a short-term borrowing by the CDBG fund for funds that were expended in advance of
receiving reimbursement from the granting agency.
Note 4 - Receivables
Receivables at September 30, 2021, were as follows:
Note 5 - Capital Assets
Changes in capital assets of the government-type activities are summarized as follows:
Governmental
Activities
General Utilities Sanitation Stormwater
Fund Fund Fund Fund Total
Franchise Fees 176,687$ -$ -$ -$ 176,687$
Utility Services 227,612 - - - 227,612
Accounts Receivable 58,830 500,840 281,340 23,819 864,829
Unbilled Receivables - 515,494 277,574 - 793,068
Less: Allowance for Doubtful Accounts - (45,000) (25,000) - (70,000)
Other 19,263 - - - 19,263
Receivables, Net 482,392$ 971,334$ 533,914$ 23,819$ 2,011,459$
Business-Type Activities
Primary Government Beginning Balance Increases (Decreases)Ending Balance
Governmental Activities
Capital Assets Not Being Depreciated:
Land 2,325,326$ 1,432,801$ -$ 3,758,127$
Construction in Progress 8,048,026 1,259,847 (817,383) 8,490,490
Total Capital Assets Not Being Depreciated 10,373,352 2,692,648 (817,383) 12,248,617
Capital Assets Being Depreciated:
Buildings 8,394,828 - - 8,394,828
Improvements Other than Buildings 7,766,805 436,871 - 8,203,676
Infrastructure 15,071,839 - - 15,071,839
Machinery and Equipment 8,842,403 352,625 (192,727) 9,002,301
Equipment Under Capital Lease 977,838 613,339 - 1,591,177
Intangible Assets - Software 889,786 117,416 - 1,007,202
Total Capital Assets Being Depreciated 41,943,499 1,520,251 (192,727) 43,271,023
Less Accumulated Depreciation:
Buildings (3,056,262) (162,502) - (3,218,764)
Improvements Other than Buildings (5,133,018) (254,548) - (5,387,566)
Infrastructure (8,627,494) (338,776) - (8,966,270)
Machinery and Equipment (6,189,061) (444,957) 192,727 (6,441,291)
Equipment Under Capital Lease (337,980) (183,862) - (521,842)
Intangible Assets - Software (503,615) (80,574) - (584,189)
Total Accumulated Depreciation (23,847,430) (1,465,219) 192,727 (25,119,922)
Total Capital Assets Being Depreciated, Net 18,096,069 55,032 - 18,151,101
Governmental Activities Capital
Depreciated, Net 28,469,421$ 2,747,680$ (817,383)$ 30,399,718$
Page 51 of 121
CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
46
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental Activities
General Government $ 289,464
Public Safety 576,790
Transportation 402,271
Culture and Recreation 196,694
Total Depreciation Expenses
Governmental Activities $ 1,465,219
Business-Type Activities – Utilities $ 1,481,866
Note 6 - Non-Current Liabilities
The following is a summary of changes in long-term debt and other liabilities of the City:
Primary Government Beginning Balance Increases (Decreases)Ending Balance
Business-Type Activities
Capital Assets Not Being Depreciated:
Land 2,216,319$ 495,051$ -$ 2,711,370$
Construction in Progress 4,527,768 1,514,889 - 6,042,657
Total Capital Assets Not Being Depreciated 6,744,087 2,009,940 - 8,754,027
Capital Assets Being Depreciated:
Buildings 8,954,298 - - 8,954,298
Improvements Other than Buildings 3,513,032 122,858 - 3,635,890
Infrastructure 35,738,177 662,934 - 36,401,111
Machinery and Equipment 6,884,367 265,269 - 7,149,636
Total Capital Assets Being Depreciated 55,089,874 1,051,061 - 56,140,935
Less Accumulated Depreciation:
Buildings (4,664,747) (185,009) - (4,849,756)
Improvements Other than Buildings (1,393,344) (182,525) - (1,575,869)
Infrastructure (10,707,409) (721,845) - (11,429,254)
Machinery and Equipment (4,194,002) (392,487) - (4,586,489)
Total Accumulated Depreciation (20,959,502) (1,481,866) - (22,441,368)
Total Capital Assets Being Depreciated, Net 34,130,372 (430,805) - 33,699,567
Total Business-Type Activities
Capital Assets, Net 40,874,459$ 1,579,135$ -$ 42,453,594$
Amounts
Beginning Ending Due Within
Balance Increases Decreases Balance One Year
Governmental Activities
Direct Borrowings:
Capital Leases 692,472$ 613,339$ (369,483)$ 936,328$ 252,176$
Other Debt:
Revenue Bonds 12,858,358 - (1,352,781) 11,505,577 1,158,390
Plus Deferred Amounts for Issuance
Premium 46,620 - (2,220) 44,400 -
Compensated Absences 934,691 58,393 - 993,084 31,396
Other Postemployment Benefits 1,242,702 449,093 - 1,691,795 -
Net Pension Liability - POFRP 2,577,230 - (2,118,291) 458,939 -
Total Governmental Activities 18,352,073$ 1,120,825$ (3,842,775)$ 15,630,123$ 1,441,962$
Page 52 of 121
CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
47
Description of Long-Term Debt and Other Liabilities Outstanding:
Governmental Activities
Current Long-Term Total
Revenue Bonds
Public Improvement Refunding Bonds, Series 2015
Issued $3,165,000, interest ranges from 1.2% to 4%.
Principal and interest payments due annually on
March 1, matures in September 2041. Secured and
payable from the public service taxes, franchise fees,
communication services taxes and the local
government half-cent sales tax. Funds used for the
purpose of retiring the City’s Public Improvement
Revenue Bonds, Series 2001 and Series 2008. $ 205,000 $ 2,105,000 $ 2,310,000
Capital Improvement Revenue Bonds, Series 2020
Issues $10,348,358, bearing an interest rate of 2.15%.
Interest is payable semi-annually and annual principal
payments are due on June 1, matures in June 2030.
Secured and payable from the local government half-
cent sales tax and non-ad valorem revenues. Of the
original issue amount, $1,125,863 due June 2029 and
$1,145,027 due June 2030 is not secured by the
half-cent sales tax. Funds used for the purpose of
capital outlay purchases. 953,390 8,242,187 9,195,577
Unamortized Premium on Bond Refunding - 44,400 44,400
Total Revenue Bonds – Governmental Activities 1,158,390 10,391,587 11,549,977
Capital Leases – Other Debt – Direct Borrowings
Capital lease with Pierce Manufacturing for two
fire trucks; due in annual installments of $126,472;
payments through June 2023; bearing an interest
rate of 2.89%; secured by the equipment; net
book value at September 30, 2021 $578,664. 96,205 360,280 456,485
Amounts
Beginning Ending Due Within
Balance Increases Decreases Balance One Year
Business-Type Activities
Direct Borrowings:
State Revolving Loans 9,262,411$ -$ (743,636)$ 8,518,775$ 762,775$
Capital Leases - 121,274 (26,247) 95,027 30,820
Other Debt:
Revenue Bonds 11,316,642 - (342,219) 10,974,423 361,610
Less Deferred Amounts for Issuance
Discount (264,329) 18,756 - (245,573) -
Compensated Absences 172,138 55,275 - 227,413 13,755
Other Postemployment Benefits 228,636 55,493 - 284,129 -
Net Pension Liability 443,566 - (443,566) - -
Total Business-Type Activities 21,159,064$ 250,798$ (1,555,668)$ 19,854,194$ 1,168,960$
Page 53 of 121
CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
48
Current Long-Term Total
Capital leases with Enterprise
for 22 vehicles; due in monthly
installments of $13,774; due at various times over
48 months; bearing interest rates between
3.042 and 3.167%; secured by vehicles; net book value
at September 30, 2021 of $490,671. $ 155,971 $ 323,872 $ 479,843
Total Capital Leases – Governmental Activities 252,176 684,152 936,328
Total Governmental Activities $ 1,410,566 $ 11,075,739 $ 12,486,305
Business-Type Activities
State Revolving Loans – Direct Borrowings
State revolving loan payable (2008) of $7,068,015,
due in semi-annual payments of $230,172, through
June 15, 2028, bearing an interest rate of 2.53%,
secured by anticipated net water and sewer
system revenues. $ 388,499 $ 2,547,755 $ 2,936,254
State revolving loan payable (2010) of $890,026,
due in semi-annual payments of $29,486, through
July 15, 2032, bearing an interest rate of 2.86%;
secured by anticipated net water and sewer
system revenues. 43,458 509,739 553,197
State revolving loan payable (2013) of $7,283,055,
due in semi-annual payments of $228,485, through
August 15, 2034, bearing an interest rate of 2.55%;
secured by anticipated net water and sewer
system revenues. 330,818 4,698,506 5,029,324
Total Revolving Loans – Business-Type Activities 762,775 7,756,000 8,518,775
Revenue Bonds
Water and Sewer Refunding and Improvement
Revenue Bonds, Series 2015
Issued $6,650,000, interest ranges 2.1% to 4%.
Interest is payable semi-annually and annual
principal payments are due on March 1, matures
in September 2033, secured by anticipated net
water and sewer system revenues. Funds used
for the purpose of retiring the Water and Sewer
Revenue Bonds, Series 2008. 70,000 6,300,000 6,370,000
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CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
49
Current Long-Term Total
Water and Sewer Refunding and Improvement
Revenue Bonds, Series 2016
Issued $5,450,000, interest ranges 2.4% to 4%.
Interest is payable semi-annually and annual
principal payments are due on March 1, matures
in September 2038, secured by anticipated net
water and sewer system revenues. Funds used
for the purpose of retiring the Water and Sewer
Revenue Bonds, Series 2008. $ 250,000 $ 3,940,000 $ 4,190,000
Capital Improvement Revenue Bonds, Series 2020
Issued $451,652 bearing an interest rate of 2.15%.
Interest is payable semi-annually and annual
principal payments are due on June 1, matures
in June 2030. Secured and payable from the
local government half-cent sales tax and non-
advalorem revenues. Of the original issue
amount, $49,137 due June 2029 and $49,973
due June 2030 is not secured by the half-cent
sales tax. Funds used for the purposes of
retiring a capital lease. 41,610 372,813 414,423
Unamortized Discount on Bond Refunding - (245,573) (245,573)
Total Revenue Bonds – Business-Type Activities 361,610 10,367,240 10,728,850
Capital Leases – Other Debt – Direct Borrowings
Capital leases with Enterprise
for 5 vehicles; due in monthly
installments of $2,720; due at various times over
48 months; bearing interest rates between
3.042 and 3.167%; secured by vehicles; net book value
at September 30, 2021 of $123,145 30,820 64,207 95,027
Total Business-Type Activities $ 1,155,205 $ 18,187,447 $ 19,342,652
Annual Requirements to Amortize Debt Outstanding
The annual requirements to amortize all debt outstanding except compensated absences and other
postemployment benefits as of September 30, 2021, are as follows:
Year Ending
September 30 Principal Interest Principal Interest Total
2022 1,410,566$ 305,664$ 1,155,205$ 576,713$ 3,448,148$
2023 1,708,464 274,775 1,185,884 544,716 3,713,839
2024 1,230,876 233,587 1,222,067 511,101 3,197,631
2025 1,152,457 202,248 1,226,772 474,755 3,056,232
2026 1,153,372 176,556 1,261,021 438,946 3,029,895
2027-2031 4,601,170 495,795 6,747,790 1,654,384 13,499,139
2032-2036 535,000 179,401 5,424,486 667,960 6,806,847
2037-2041 650,000 68,150 1,365,000 217,058 2,300,208
TOTAL 12,441,905$ 1,936,176$ 19,588,225$ 5,085,633$ 39,051,939$
Governmental Activities Business-Type Activities
Page 55 of 121
CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
50
Default Provisions
The City’s revenue bonds contain a provision that in an event of a default, any trustee or any holder of
bonds may by suit, action, mandamus or other proceedings, protect and enforce any and all rights under
the laws of the State of Florida. The Capital Improvement Revenue Bonds, Series 2020 contains an
additional provision obligating the City to pay all costs related to the collection and enforcement of the
default, including attorneys’ fees.
The City’s state revolving loans contain provisions that in an event of a default, the City may be required
to do one of the following: (1) Account for all moneys received from the Florida Department of
Environmental Protection (the Department) as well as the receipt, use, application or disposition of
pledged revenues; (2) use an appointed receiver to manage the water and sewer systems, including
establishing and collecting fees and charges to reduce the City’s obligation; (3) pay the delinquent amount
plus a penalty from unobligated funds due to the City; (4) notify financial market credit rating agencies;
or (5) the Department may sue for payment or accelerate the repayment schedule.
The City’s capital lease agreements contain a provision that in the event of a default, the City shall pay
total outstanding amounts due by acceleration, including costs incurred by the lessor associated with the
default. The lessor may also request the return of the leased property.
Pledged Revenues
Pledged revenues on the City’s outstanding debt for the year ended September 30, 2021 are as follows:
Note 7 - Refundings of Debt
Advance Refunding of Debt
The City issued refunding revenue bonds to defease certain outstanding bonds for the purpose of
consolidation at lower interest rates. The City placed the proceeds from those refunding bonds in
irrevocable escrow accounts with a trust agent to insure payment of debt service on the refunded bonds.
Accordingly, the trust account assets and the liabilities for the defeased bonds are not included in the
City’s financial statements. Although defeased, the refunded debt from these earlier issues will not be
actually retired until the call dates have come due or until maturity if they are not callable issues.
Principal Pledged Estimated
Pledged Original Outstanding and Interest Revenue Percentage
Pledged Revenue Source Debt Issue Through Amount Balance Payments Received Pledged
Net Water and Sewer Utility
Revenues State Revolving Loan - 2008 2028 7,068,015$ 2,936,254$ 460,344$
State Revolving Loan - 2010 2032 890,026 553,197 58,972
State Revolving Loan - 2013 2034 7,283,055 5,029,324 456,970
Water and Sewer Refunding Revenue Bonds, Series 2015 2033 6,650,000 6,370,000 326,970
Water and Sewer Refunding Revenue Bonds, Series 2016 2038 5,450,000 4,190,000 417,122
1,720,378 2,730,206 63.0%
Public Service Taxes, Franchise Fees, Communications
Services Taxes, 1/2 Cent Sales Tax Public Improvement Refunding, Series 2015 2041 3,165,000 2,310,000 286,741 5,293,721 5.4%
1/2 Cent Sales Tax, Non-Ad Valorem Revenues;Capital Improvement Revenue Bonds,
Except That $1,125,863 Due June 2029 and $1,145,027 Due Series 2020 (Governmental)2030 10,348,358 9,195,577 1,470,477 3,105,062 47.4%
June 2030 is Not Secured by the 1/2 Cent Sales Tax
1/2 Cent Sales Tax, Non-Ad Valorem Revenues;Capital Improvement Revenue Bonds, Series 2020 (Utility)2030 451,652 414,423 50,193 135,520 37.0%
Except that $49,137 Due June 2029 and $49,973 Due
June 2030 is Not Secured by the 1/2 Cent Sales Tax
Page 56 of 121
CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
51
During the year ended September 30, 2016, the City issued $6,650,000 Water and Sewer System
Refunding Revenue Bonds, Series2015 and $5,450,000 of Water and Sewer Refunding and Improvement
Bonds, Series 2016, to advance refund $10,070,000 of Water System Revenue Bonds, Series 2008. The
difference between the acquisition price and the net carrying value is reported as a deferred loss on bond
refunding in the accompanying financial statements and is being charged to operations through the year
2039 using the straight-line amortization method.
At September 30, 2021, the City has $8,680,000 of bonds outstanding that are considered to be defeased.
Note 8 - Defined Benefit Pension Plans
The City administers two defined benefit pension plans: the Crestview General Employees’ Retirement
Plan Trust Fund and the Crestview Police Officers’ and Firefighters’ Plan Trust Fund. These plans provide
benefits for all qualifying employees of the City. Each plan is administered by a five-person retirement
committee consisting of two members appointed by the City Council, two elected members of the Plan
and a fifth member elected by the other four and appointed by the City Council. The Plans do not issue
separate financial statements.
General Employees’ Retirement Plan (GERP)
The Crestview General Employees’ Retirement Plan Trust Fund is the administrator of a single employer
public employee retirement system established by the City. It is mandatory that all full-time general
employees of the City participate in the Plan. GERP provides retirement benefits and reduced early
retirement benefits, as well as death and disability benefits. All benefits vest after 10 years of credited
service.
Employees who retire at or after age 55 with 10 years of credited service are entitled to an annual
retirement benefit, payable monthly, of 2.64% of Average Final Compensation for year of credited service
plus $215 per month. This benefit is paid in the form of a Life Annuity (options available). Employees who
have attained age 50 and completed 10 years of credited service are eligible for early retirement and may
elect to receive an immediate actuarially reduced benefit. Disability benefits are also provided at a
reduced benefit amount for qualifying employees determined by the Board to be totally and permanently
disabled. Benefit provisions are established by the Trust Instrument. Any amendments to the Plan are
accomplished through revision and amendment of City Ordinances.
The Plan includes a provision for a deferred retirement option plan (DROP). A member becomes eligible
when normal retirement requirements are satisfied. The member may not participate in the DROP for
more than 60 months. The average daily balance in a member’s DROP account shall be credited or debited
at a rate equal to the actual net rate of investment return, net of brokerage commissions, transaction
costs and management fees. Upon entering the DROP, the members shall not accrue any additional
credited service or additional benefits and shall not be permitted to again contribute to the System. All
benefits payable to a member from the DROP shall be paid from the assets of the member’s DROP account
and neither the City nor the Board shall have a duty or liability to furnish the DROP with any funds,
securities or other assets except to the extent required by any applicable law. The DROP balances as of
September 30, 2021 were $657,019.
Page 57 of 121
CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
52
Police Officers’ and Firefighters’ Retirement Plan (POFRP)
The Crestview Police Officers’ and Firefighters’ Retirement Plan Trust Fund is the administrator of a single
employer public employee retirement system established by the City. It is mandatory that all full-time
City police officers and firefighters participate in the plan.
The POFRP provides retirement benefits and reduced early retirement benefits as well as death and
disability benefits. All benefits vest after 10 years of credited service. Employees who retire at or after
age 55 with 10 years of credited service or age 52 with 25 years of credited service are eligible for normal
retirement and are entitled to an annual retirement benefit, payable monthly, of three and one-fifth
percent (3.2%) of Average Final Compensation times credited service. This benefit is paid in the form of
a Ten Year Certain and Life Annuity (options available). Employees who have attained age 45 and
completed 10 years of credited service are eligible for early retirement and may elect to receive a benefit
reduced 3% for each year that early retirement precedes age 50 and actuarially reduced accordingly.
Disability benefits are also provided at a reduced benefit amount for qualifying employees determined by
the Board to be totally and permanently disabled. Benefit provisions are established by the Trust
Instrument. The State also contributes to the Plan. Any amendments to the Plan are accomplished
through revision and amendment of City Ordinances.
The Plan includes a provision for a deferred retirement option plan (DROP). A member becomes eligible
when normal retirement requirements are satisfied. The member may not participate in the DROP for
more than 60 months. An eligible member which elects to enter the DROP can select either 1) actual net
rate of investment return, net of brokerage commissions, transaction costs and management fees or 2)
interest at an effective rate of 6.5% per annum compounded monthly on the prior month’s ending
balance. Upon entering the DROP, the member shall not accrue any additional credited service or
additional benefits and shall not be permitted to again contribute to the System. All benefits payable to
a member from the DROP shall be paid only from the assets of the member’s DROP account and neither
the City nor the Board shall have a duty or liability to furnish the DROP with any funds, securities or other
assets except to the extent required by any applicable law. The DROP balances as of September 30, 2021
were $85,492.
Membership of each plan consisted of the following on September 30, 2021, the date of the latest
actuarial report.
GERP POFRP
Active Plan Members 112 88
Inactive Plan Members:
Receiving Benefits 60 28
Entitled to but not Receiving Benefits 29 9
Total 201 125
Contributions
The contribution requirements of plan members and the City are established annually and amended by
City ordinance. Plan members are required to contribute a set percentage of their annual covered
salaries. The City is required to contribute at an actuarially determined rate.
Investments
The following was the Board’s adopted asset allocation policy as of September 30, 2021:
Page 58 of 121
CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
53
Target
Asset Class Allocation
Domestic Equity 42.5%
International Equity 15.0%
Broad Market Fixed Income 22.5%
Fixed Income (Non-Core) 2.5%
Global Fixed Income 2.5%
Real Estate 10.0%
Alternative 5.0%
100%
The Plans did not hold investments in any one organization that represent 5% or more of the Pension
Plans’ fiduciary net position.
For the year ended September 30, 2021, the annual money-weighted rate of return on the GERP and
POFRP investments, net of pension plan investment expenses, was 19.42% percent and 19.40% percent,
respectively.
More information about the Plan’s investments is discussed in Note 2.
Net Pension Asset (Liability) of the Sponsor
The components of the net pension asset (liability) of the sponsor on September 30, 2021 were as follows:
GERP POFRP
Total Pension Liability $ 24,447,463 $ 27,375,803
Plan Fiduciary Net Position (24,618,572) (26,916,864)
Sponsor’s Net Pension Asset (Liability) (171,109) 458,939
Plan Fiduciary Net Position as a
Percentage of Total Pension
Liability 100.70% 98.32%
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pensions
For the year ended September 30, 2021, the City recognized pension expense of $405,391 for the GERP
and $901,964 for the POFRP. At September 30, 2021, the City reported deferred outflows of resources
and deferred inflows of resources related to pensions from the following sources:
Deferred Deferred Deferred Deferred Deferred Deferred
Outflows of Inflows of Outflows of Inflows of Outflows of Inflows of
Resources Resources Resources Resources Resources Resources
Difference Between Expected and
Actual Experience 232,003$ 160,417$ 583,235$ 262,638$ 815,238$ 423,055$
Changes in Assumptions 977,596 - 1,343,315 48,320 2,320,911 48,320
Difference Between Projected and
Actual Earnings on Investments - 2,023,075 - 2,004,688 - 4,027,763
Balance as of September 30, 2021 1,209,599$ 2,183,492$ 1,926,550$ 2,315,646$ 3,136,149$ 4,499,138$
GERP POFRP Total
Page 59 of 121
CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
54
The outcome of the deferred outflows of resources related to pensions resulting from employer
contributions subsequent to the measurement date will be recognized as a reduction of the net pension
liability each year. Other amounts reported as deferred inflows of resources related to pensions will be
recognized in pension expense as follows:
Year Ended
September 30, GERP POFRP
2022 $ (205,182) $ 64,682
2023 (206,714) (141,508)
2024 (269,428) (337,387)
2025 (292,569) (243,961)
2026 - 269,078
Actuarial Assumptions
The total pension liability was determined by an actuarial valuation as of October 1, 2019 updated to
September 30, 2021 using the following actuarial assumptions applied to all measurements periods.
GERP POFRP
Inflation 2.50% 2.50%
Invested Rate of Return 7.00% 7.00%
Projected Salary Increases Service based Age based
GERP: PubG.H-2010 Mortality Table for healthy active lives for employees (set back one year for males),
healthy retiree lives (set back one year for males), beneficiary lives for healthy retirees (set back one year
for males), and disabled lives (set forward three years).
POFRP: PubS.H-2010 Mortality Table (Below Median) for healthy active lives for female and male
employees set forward one year. PubS.H-2010 Mortality Table for healthy retirees for female and male
retirees set forward one year. PubG.H-2010 Mortality Table for beneficiary lives for healthy retirees set
back one year for males. 80% PubG.H-2010/20% PubS.H-2010 Mortality Tables for disabled retirees.
The actuarial assumptions used in the October 1, 2019 valuation were based on the results of an actuarial
experience study dated August 29, 2016.
The long-term expected rate of return on pension plan investments was determined using a building-block
method in which best-estimate ranges of expected future real rates of return (expected returns, net of
pension plan investment expense and inflation) are developed for each major asset class. These ranges
are combined to produce the long-term expected rate of return by weighting the expected future real
rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates
of arithmetic real rates of return for each major asset class included in the pension plan’s target asset
allocation as of September 30, 2021 (see the discussion of the pension plan’s investment policy) are
summarized in the following table:
Asset Class GERP POFRP
Domestic Equity 7.50% 7.50%
International Equity 8.50% 8.50%
Broad Market Fixed Income 2.50% 2.50%
Global Fixed Income 2.50% 3.50%
Real Estate 4.50% 4.50%
Alternative 5.92% 5.92%
Page 60 of 121
CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
55
Discount Rate
The discount rate used to measure the total pension liability was 7.00%. The projection of cash flows used
to determine the discount rate assumed that the employee contributions will be made at the current
contribution rate and that the City’s contributions will be made at rates equal to the difference between
the actuarially determined contribution rates and the employee rate. Based on those assumptions, the
pension plan’s fiduciary net position was projected to be available to make all projected future benefit
payments of current employees. Therefore, the long-term expected rate of return on pension plan
investments was applied to all periods of projected benefit payments to determine the total pension
liability.
GERP POFRP
1% Decrease of Discount Rate to 6.00% for GERP and POFRP $ 2,978,917 $ 4,151,597
Current Discount Rate of 7.00% for GERP and POFRP (171,109) 458,939
1% Increase of Discount Rate to 8.00% for GERP and POFRP (2,771,458) (2,575,605)
Changes in Net Pension Liability – GERP
Change in Net Pension Liability – POFRP
Total Pension Plan Fiduciary Net Net Pension
Liability Position Liability (Asset)
Balance at September 30, 2021 22,319,466$ 20,895,055$ 1,424,411$
Changes for the Year:
Service Cost 682,347 - 682,347
Interest 1,622,464 - 1,622,464
Difference Between Expected and Actual Experience 13,985 - 13,985
Changes of Assumptions 1,055,199 - 1,055,199
Contribution - Employer - 669,775 (669,775)
Contribution - Employee - 340,203 (340,203)
Net Investment Income - 4,035,610 (4,035,610)
Benefit Payments, Including Refunds of Employee
Contributions (1,245,998) (1,245,998) -
Administration Expense - (76,073) 76,073
Balance at September 30, 2021 24,447,463$ 24,618,572$ (171,109)$
Total Pension Plan Fiduciary Net Net Pension
Liability Position Liability
Balance at September 30, 2021 23,855,305$ 22,258,920$ 1,596,385$
Changes for the Year:
Service Cost 855,640 - 855,640
Interest 1,760,744 - 1,760,744
Share Plan Allocation 139,291 - 139,291
Difference Between Expected and Actual Experience 485,335 - 485,335
Changes of Assumptions 1,129,136 - 1,129,136
Contribution - Employer - 575,632 (575,632)
Contribution - State - 378,243 (378,243)
Contribution - Employee - 320,388 (320,388)
Net Investment Income - 4,307,665 (4,307,665)
Benefit Payments, Including Refunds of Employee
Contributions (849,648) (849,648) -
Administration Expense - (74,336) 74,336
Balance at September 30, 2021 27,375,803$ 26,916,864$ 458,939$
Page 61 of 121
CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
56
The City has allocated the net pension (asset) liabilities above across funds based on payroll costs of each
fund. The City’s net pension (asset) liabilities are reports as follows:
GERP POFRP
Net Pension Net Pension
(Asset) Liability
Governmental Activities $ (119,647) $ 458,939
Business-Type Activities (51,462) -
Total $ (171,109) $ 458,939
Pension expense for the year ending September 30, 2021, was a follows:
Governmental Activities $ 405,391
Business-Type Activities 901,964
Total $ 1,307,355
Note 9 - Other Postemployment Benefit Plan
GASB Statement No. 75, Accounting and Financial Reporting by Employers for Postemployment Benefits
Other Than Pensions (Statement No. 75), requires governments to account OPEB on an accrual basis,
rather than on a pay-as-you-go basis. The effect is the recognition of an actuarially determined expenses
when a future retiree earns their postemployment benefits, rather than when they use their
postemployment benefits. The total OPEB liability is recorded at the fund level for proprietary activities
and the allocated amount for governmental activities is presented at the government-wide level. The
annual OPEB cost is included in the line item of personal services for proprietary fund statements and is
allocated by function for governmental activities on the government-wide financial statements.
Plan Description
The City of Crestview’s Retiree Health Care Plan (Plan) is a single employer defined benefit
postemployment health care plan that covers eligible retired employees of the City. The Plan, which is
administered by the City, allows employees who retire and meet retirement eligibility requirements under
one of the City’s retirement plans to continue medical and life insurance coverage as a participant in the
City’s plan. For purposes of applying Paragraph 4 under Statement No. 75, the Plan does not meet the
requirements for an OPEB plan administered through a trust. The Plan does not issue a stand-alone
report, and it is not included in the report of a Public Employee Retirement System or another entity.
Employees Covered by Benefit Terms
At September 30, 2019 (the most recent actuarial valuation), the following employees were covered by
the benefit terms:
Active Plan Members 207
Inactive Plan Members or Beneficiaries Currently Receiving Benefits 4
Inactive Plan Members Entitled to but no yet Receiving Benefits -
Total 211
Benefits Provided
A retired employee and his or her spouse are eligible to continue health insurance identical to active
employees if they meet the eligibility for retirements under the applicable Plan. The retiree is responsible
for paying the entire premium for health coverage and that of any covered spouse or eligible dependents.
Page 62 of 121
CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
57
Total OPEB Liability
At September 30, 2021, the City reported total OPEB liability of $1,975,924 for the single-employer plan.
Total OPEB liability was measured as of September 30, 2020. The measurement period for OPEB expense
was October 1, 2019 through September 30, 2020.
Actuarial Assumptions
The total OPEB liability was determined by an actuarial valuation as of September 30, 2019, using the
following actuarial assumptions:
Inflation Rate 2.50%
Salary Increase Rate(s) Varies by Service
Discount Rate 2.14%
Initial Trend Rate 7.00%
Ultimate Trend Rate 4.00%
Years to Ultimate 54
All mortality rates were based on those used in actuarial valuations of corresponding General Employee
and Police and Fire pension plans.
For general employees, mortality rates were based on the PubG-2010 tables. For female lives, 100% of
the white-collar table was used. For active lives, headcount weighted employee mortality with male rates
set back one year, projected generationally with Scale MP-2018. For healthy inactive lives and
beneficiaries, headcount weighted healthy retiree mortality with male rates set back one year, projected
generationally with Scale MP-2018. For disabled lives, weighted mortality with male and female rates set
forward three years, projected generationally with Scale MP-2018.
For police and fire employees, mortality rates were also based on PubS-2010 tables. For female lives,
100% of the white-collar table was used. For active lives, headcount weighted employee mortality, below
median income, with male and female rates set forward one year projected generationally with Scale MP-
2018. For healthy inactive lives, headcount weighted healthy retiree mortality with both male and female
rates set forward one year, projected generationally with Scale MP-2018. For beneficiaries, headcount
weighted healthy retiree mortality with male rates set back one year, projected generationally with Scale
MP-2018. For disabled lives, headcount weighted disabled retiree tables and 20% of PubS-2010
headcount weighted disabled retiree tables, projected generationally with Scale MP-2021.
Discount Rate
Given the City’s decision not to fund the program, all future benefit payments were discounted using a
high-quality municipal bond rate of 2.14%. The high-quality municipal bond rate was based on the S&P
Municipal Bond 20 Year High Grade Rate Index as published by S&P Dow Jones Indices nearest the
measurement date. The S&P Municipal 20 Year High Grade Rate Index consists of bonds in the S&P
Municipal Bond Index with a maturity of 20 years. Eligible bonds must be rated at least AA by Standard
and Poor’s Rating Services, Aa2 by Moody’s or AA by Fitch. If there are multiple ratings, the lowest rating
is used.
Page 63 of 121
CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
58
Increase
(Decrease in
Total OPEB
Liability
Balance as of October 1, 2020 $ 1,471,338
Changes for the Year:
Service Cost 129,806
Interest 56,991
Differences Between Expected and Actual Experience (142,530)
Changes of Assumptions 478,917
Benefit Payments (18,598)
Balance as of September 30, 2021 $ 1,975,924
Changes of assumptions reflect a change in the discount rate from 3.58% for the reporting period ended
September 30, 2020 to 2.14% for the reporting period ended September 30, 2021.
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate
The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability
would be if it were calculated using a discount rate that is 1% point lower or 1% point higher than the
current discount rate.
1% Current 1%
Decrease Discount Rate Increase
(1.14%) (2.14%) (3.14%)
Total OPEB Liability $ 2,191,482 $ 1,975,924 $ 1,782,738
Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rates
The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it
were calculated using healthcare cost trend rates that are 1% point lower or 1%point higher than the current
discount rate.
1% Current 1%
Decrease Discount Rate Increase
(3%-6.5%) (4%-7.5%) (5%-8.5%)
Total OPEB Liability $ 1,719,070 $ 1,975,924 $ 2,284,943
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB
For the year ended September 30, 2021, the City recognized OPEB expense of $216,801. At September
30, 2021, the City reported deferred outflows of resources and deferred inflows of resources related to
OPEB from the following sources:
Deferred Deferred
Outflows Outflows
of Resources of Resources
Differences Between Expected and Actual
Experience $ - $ 186,756
Changes in Assumptions 485,679 63,577
Employer Contributions Subsequent to the
Measurement Date 61,027 -
Total $ 546,706 $ 250,333
Page 64 of 121
CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
59
Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB
will be recognized in OPEB expense as follows:
Year Ended
September 30,
2022 $ 26,004
2023 26,004
2024 26,004
2025 26,001
2026 36,138
Thereafter 95,195
Total $ 235,346
Note 10 - Risk Management
The City is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets;
errors and omissions; injuries to employees; employee medical benefits and natural disasters. The City
purchases insurance through commercial carriers and participates in the Florida Municipal Insurance
Trust, which is a public entity risk pool. Coverage through the Florida Municipal Insurance Trust includes
comprehensive general and professional liability, automobile, property and workers’ compensation
coverages. The remaining insurance coverage, which includes but is not limited to health and life
insurance coverages, is purchased from various commercial carriers.
The City does not retain a risk of loss as a participant in the public entity risk pool. The City maintains
minimal deductibles for insurance policies from its various commercial carriers. There has been no
significant reduction in insurance coverage from the prior fiscal year. Settlement amounts have not
exceeded insurance coverage for the current year or the three prior years.
The City participates in various federal and state grants. The expenditures of these grants are subject to
audit and adjustment by the funding agency or their representatives. If expenditures are subsequently
disallowed due to noncompliance with the program, the City may be required to repay the funding agency.
The City’s management believes that disallowed expenditures, if any, will not be material to the
accompanying financial statements.
Note 11 - Fund Equity
Restricted Net Position
The City has established certain restrictions within the net position section of the enterprise funds. It is
the City’s policy to first apply restricted resources for expenditures incurred for which there are restricted
and unrestricted resources available. Additionally, the City would first apply committed, followed by
assigned amounts and lastly unassigned amounts of unrestricted fund balance when expenditures are
incurred.
Utilities
Restricted for Impact Fees $ 1,242,781
Restricted for Reserve and Replacement 250,000
Restricted for Debt Service 348,716
Total $ 1,841,497
Page 65 of 121
CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
60
Fund Balances
The City has established certain restrictions within the fund balance section of the governmental funds. The City
would first apply restricted, followed by assigned amounts and lastly unassigned amounts of unrestricted
fund balance when expenditures are incurred. Non-Spendable, restricted and assigned fund balances at
September 30, 2021, consist of the following:
Note 12 - Commitments and Contingencies
Contracts
The City has contracted with CH2MHill, Inc. (CH2M) to operate, maintain and manage the City’s sewer
treatment plant. Fees are payable monthly and are subject to adjustment on a regular basis. A new
contract was signed for a five-year term commencing October 1, 2019. The agreement will automatically
renew for another five-year term ending September 30, 2024.The latest contract established a base fee
for fiscal year 2020 of $1,045,028. It also provides for electrical cost or consumption increases over an
established amount ($192,000) to be shared equally by the City andCH2M. Total fees under the contract
for the year ended September 30,2021 were $1,102,766.
Legal Matters
The City is involved in pending and threatened legal actions. In the opinion of City management, after
consulting with legal counsel, the range of potential loss from all such claims and actions should not
materially affect the financial condition of the City.
Sanitation Collection
In September 2013, the City contracted with Waste Pro of Florida, Inc. for the collection and disposal of
residential and commercial solid waste, yard refuse and recycling. The non-exclusive franchise agreement
expired September 30, 2018. The contract was renewed and is effective through September 30, 2023.
The City is responsible for billings and collections related to the sanitation services and retains 6% of the
Other Total
General Governmental Governmental
Fund Funds Funds
Non-Spendable
Prepaid Expenditures 5,535$ -$ 5,535$
Permanent Fund - 53,125 53,125
Total Non-Spendable 5,535$ 53,125$ 58,660$
Restricted For
Impact Fees 245,213$ 48,020$ 293,233$
Debt Service 377,558 94,172 471,730
Building Permits - 964,970 964,970
Redevelopment - 908,850 908,850
Total Restricted 622,771$ 2,016,012$ 2,638,783$
Assigned For
Subsequent Year's Budget 1,880,909$ -$ 1,880,909$
Debt Service - 213,906 213,906
Law Enforcement - 4,493 4,493
Library - 2,913 2,913
Total Assigned 1,880,909$ 221,312$ 2,102,221$
Page 66 of 121
CITY OF CRESTVIEW, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
61
collections as payment for managing the collections. The remainder of the collections are remitted to
Waste Pro of Florida, Inc. Collections remitted to Waste Pro of Florida amounted to $3,828,524 million for
the year ended September 30, 2021.
Grants
Amounts received or receivable from grant activities are subject to audit and adjustment by grantor
agencies, principally the federal government. Any disallowed claims, including amounts already collected,
may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be
disallowed by the grantor cannot be determined at this time, although the City expects such amount, if
any, to be immaterial.
In September 2004, Hurricane Ivan impacted Northwest Florida, including the City with considerable
damage. Many of the expenses incurred for debris removal and other repairs were reimbursed to the
City through grant funding from the Federal Emergency Management Agency (FEMA). In 2005, FEMA
reimbursed the City for most of the expenses incurred, but then later determined that certain expenses
did not qualify for reimbursement according to the grant. FEMA has notified the City that the City will be
responsible for those expenses determined not to be reimbursable. The City will not know the exact
amount of funds that are to be repaid to FEMA until FEMA has performed a final close-out audit. The City
has estimated the liability to FEMA for non-reimbursable expenses to be $485,655. This amount is
included in Due to other governments on the accompanying financial statements.
Note 13 - Subsequent Events
On December 17, 2021, the City issued Water and Sewer Revenue Bonds, Series 2021 in the amount of
$5,075,000. The purpose of the issuance is to finance capital improvements to the City’s sewer system.
Annual debt service payments will be required until September 1, 2042 including interest at 2.09%. The
debt service payments are secured by net revenues of the water and sewer system.
On January 7, 2022, the City issued Capital Improvement Revenue Bonds, Series 2022 in the amount of
$2,575,000. The purpose of the issuance is to finance the acquisition, construction and equipping of
various capital improvements to the golf course. Annual debt service payments will be required until
June 1, 2042 including interest at 3.07%. The debt service payments are secured by non-ad valorem
revenues as identified in Resolution 2022-5 adopted by the City Council on December 13, 2021.
Page 67 of 121
REQUIRED SUPPLEMENTARY INFORMATION
Page 68 of 121
Reporting Period Ending 9/30/2021 9/30/2020 9/30/2019 9/30/2018
Measurement Date 9/30/2020 9/30/2019 9/30/2018 9/30/2017
Total OPEB Liability
Service Cost 129,806$ 110,071$ 107,956$ 112,421$
Interest 56,991 55,819 48,482 39,333
Differences Between Expected
and Actual Experience (142,530) - (99,269) -
Changes of Assumptions 478,917 88,837 (36,901) (81,027)
Benefit Payments (18,598) (17,220) (20,602) (18,944)
Net Change in Total
OPEB Liability 504,586 237,507 (334) 51,783
Total OPEB Liability -
Beginning of Year 1,471,338 1,233,831 1,234,165 1,182,382
Total OPEB Liability -
End of Year 1,975,924$ 1,471,338$ 1,233,831$ 1,234,165$
Covered Payroll (Projected)9,749,221$ 10,002,787$ 9,414,388$ 9,803,788$
Total OPEB Liability as a
Percentage of Covered
Employee Payroll 20.27%14.71%13.11%12.59%
*Information is presented for those years in which information is available.
Notes to Schedule
September 30, 2021:2.14%
September 30, 2020:3.58%
September 30, 2019:4.18%
September 30, 2018:3.64%
Changes of assumptions and other inputs reflect the effects of changes in the discount rate each period.The following
are the discount rates used in each period:
Also reflected as assumption changes are updated health care costs and premiums,updated health care cost trend rates,updated
spousal participation rates, and updated mortality, termination, retirement, disability, and salary scale increase rates.
Differences between expected and actual experience reflects the impact of changes to the census data from the prior valuation to the
valuation as of September 30, 2020.
The City did not provide actual net benefits for the fiscal year ended on September 30,2021.Expected net benefit payments produced
by the valuation model for the same period are shown in the table above
CITY OF CRESTVIEW, FLORIDA
LAST 10 FISCAL YEARS*
SEPTEMBER 30, 2021
SCHEDULE OF CHANGES IN THE TOTAL OPEB LIABILITY AND RELATED RATIOS
REQUIRED SUPPLEMENTARY INFORMATION
62
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2021 2020 2019 2018 2017 2016 2015 2014 2013
Total Pension Liability
Service Cost 682,347$ 667,898$ 611,990$ 555,982$ 522,311$ 565,716$ 536,574$ 538,171$ 498,306$
Interest 1,622,464 1,555,250 1,518,916 1,462,086 1,336,940 1,310,682 1,240,902 1,163,671 1,085,340
Differences Between Expected
and Actual Experience 13,985 368,023 (197,435) (407,213) 557,747 (372,488) (196,887) - -
Changes in Assumptions 1,055,199 32,218 - 570,521 585,568 152,935 - - -
Benefit Payments, Including Refund of
Employee Contributions (1,245,998) (2,175,488) (800,956) (761,657) (823,522) (668,726) (806,243) (663,463) (625,281)
Net Change 2,127,997 447,901 1,132,515 1,419,719 2,179,044 988,119 774,346 1,038,379 958,365
Total Pension Liability, Beginning 22,319,466 21,871,565 20,739,050 19,319,331 17,140,287 16,152,168 15,377,822 14,339,443 13,381,078
Total Pension Liability, Ending (a)24,447,463$ 22,319,466$ 21,871,565$ 20,739,050$ 19,319,331$ 17,140,287$ 16,152,168$ 15,377,822$ 14,339,443$
Plan Fiduciary Net Position
Contributions - Employer 669,775$ 629,053$ 455,980$ 343,359$ 248,704$ 298,505$ 556,922$ 756,791$ 779,531$
Contributions - Employee 340,203 317,003 303,409 285,401 269,713 263,011 246,579 240,968 242,185
Net Investment Income 4,035,610 1,721,236 909,926 1,522,216 2,050,466 1,172,257 (319,164) 1,396,846 1,537,348
Benefit Payments, Including Refund of
Employee Contributions (1,245,998) (2,175,488) (800,956) (761,657) (823,522) (668,726) (806,243) (663,463) (625,281)
Administrative Expense (76,073) (55,909) (58,103) (55,635) (56,085) (45,495) (43,915) (35,530) (31,453)
Other - - - - - - - 44,105 -
Net Change 3,723,517 435,895 810,256 1,333,684 1,689,276 1,019,552 (365,821) 1,739,717 1,902,330
Plan Fiduciary Net Position, Beginning 20,895,055 20,459,160 19,648,904 18,315,220 16,625,944 15,606,392 15,972,213 14,232,496 12,330,166
Plan Fiduciary Net Position, Ending (b)24,618,572 20,895,055 20,459,160 19,648,904 18,315,220 16,625,944 15,606,392 15,972,213 14,232,496
Net Pension Liability, Ending (a) - (b)(171,109)$ 1,424,411$ 1,412,405$ 1,090,146$ 1,004,111$ 514,343$ 545,776$ (594,391)$ 106,947$
Plan Fiduciary Net Position as a Percentage
of the Total Pension Liability 100.70%93.62%93.54%94.74%94.80%97.00%96.62%103.87%99.25%
Covered Employee Payroll 5,315,672$ 4,953,172$ 4,740,758$ 4,459,380$ 4,214,265$ 4,109,545$ 3,852,802$ 3,765,128$ 3,784,133$
Net Pension Liability as a Percentage of
Covered Employee Payroll -3.22%28.76%29.79%24.45%23.83%12.52%14.17%-15.79%2.83%
*Information provided above was obtained from an actuarial valuation. Information prior to fiscal year 2013 was not available.
CITY OF CRESTVIEW, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN NET PENSION LIABILITIES AND RELATED RATIOS -
GENERAL EMPLOYEES' RETIREMENT PLAN
LAST 10 FISCAL YEARS*
63
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2021 2020 2019 2018 2017 2016 2015 2014 2013
Total Pension Liability
Service Cost 855,640$ 829,996$ 810,126$ 781,326$ 736,601$ 675,767$ 650,319$ 704,926$ 645,804$
Interest 1,760,744 1,630,907 1,557,188 1,494,147 1,401,536 1,205,985 1,207,893 1,142,097 1,050,053
Differences Between Expected
and Actual Experience 485,335 211,677 (355,584) (254,535) 226,022 293,542 (1,131,354) - -
Changes of Benefit Terms - - (3,124) - - - - 102,466 -
Contributions - Buy Back - - - 18,708 - - - - -
Changes in Assumptions 1,129,136 (72,480) - 635,050 1,144,118 337,452 - - -
Share Plan Allocation 139,291 110,280 119,721 113,414 88,474 775,763 - - -
Other - - - - - - - 36,400 -
Change in Excess State Money - - - - (9,059) (798,033) 102,691 110,979 -
Benefit Payments, Including Refund of
Employee Contributions (849,648) (1,040,702) (1,228,318) (1,286,243) (1,191,193) (618,732) (933,578) (1,079,145) (334,643)
Net Change 3,520,498 1,669,678 900,009 1,501,867 2,396,499 1,871,744 (104,029) 1,017,723 1,361,214
Total Pension Liability, Beginning 23,855,305 22,185,627 21,285,618 19,783,751 17,387,252 15,515,508 15,619,537 14,601,814 13,240,600
Total Pension Liability, Ending (a)27,375,803$ 23,855,305$ 22,185,627$ 21,285,618$ 19,783,751$ 17,387,252$ 15,515,508$ 15,619,537$ 14,601,814$
Plan Fiduciary Net Position
Contributions - Employer 575,632$ 537,980$ 378,613$ 121,687$ 121,961$ 111,296$ 429,649$ 576,763$ 746,119$
Contributions - State 378,243 339,563 352,151 343,741 310,487 300,086 296,275 296,686 291,738
Contributions - Employee 320,388 304,695 295,647 288,434 278,697 267,931 255,354 235,503 264,486
Contributions - Buy Back - - - 18,708 - - - - -
Net Investment Income 4,307,665 1,661,513 778,906 1,519,422 2,132,311 1,072,929 (374,169) 1,512,913 1,596,346
Benefit Payments, Including Refund of
Employee Contributions (849,648) (1,040,702) (1,228,318) (1,286,243) (1,191,193) (618,732) (933,578) (1,079,145) (334,643)
Administrative Expense (74,336) (69,573) (62,363) (66,003) (70,281) (47,835) (46,407) (37,041) (30,354)
Other - - - - - - - (44,105) -
Net Change 4,657,944 1,733,476 514,636 939,746 1,581,982 1,085,675 (372,876) 1,461,574 2,533,692
Plan Fiduciary Net Position, Beginning 22,258,920 20,525,444 20,010,808 19,071,062 17,489,080 16,403,405 16,776,281 15,314,707 12,781,015
Plan Fiduciary Net Position, Ending (b)26,916,864 22,258,920 20,525,444 20,010,808 19,071,062 17,489,080 16,403,405 16,776,281 15,314,707
Net Pension Liability, Ending (a) - (b)458,939$ 1,596,385$ 1,660,183$ 1,274,810$ 712,689$ (101,828)$ (887,897)$ (1,156,744)$ (712,893)$
Plan Fiduciary Net Position as a Percentage
of the Total Pension Liability 98.32%93.31%92.52%94.01%96.40%100.59%105.72%107.41%104.88%
Covered Employee Payroll 5,006,067$ 4,760,860$ 4,619,494$ 4,506,775$ 4,354,635$ 4,186,426$ 3,989,908$ 3,701,314$ 4,132,599$
Net Pension Liability as a Percentage of
Covered Employee Payroll 9.17%33.53%35.94%28.29%16.37%-2.43%-22.25%-31.25%-17.25%
*Information provided above was obtained from an actuarial valuation. Information prior to fiscal year 2013 was not available.
CITY OF CRESTVIEW, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN NET PENSION LIABILITIES AND RELATED RATIOS -
POLICE OFFICERS' AND FIREFIGHTERS' RETIREMENT PLAN
LAST 10 FISCAL YEARS*
64
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2021 2020 2019 2018 2017 2016 2015 2014 2013
Actuarially Determined Contribution 669,775$ 629,053$ 497,780$ 379,047$ 248,242$ 304,106$ 473,895$ 756,791$ 779,531$
Contributions in Relation to the Actuarially
Determined Contributions 669,775 629,053 455,980 343,359 248,704 298,505 556,922 756,791 779,531
Contributions Deficiency (Excess)1,339,550$ -$ 41,800$ 35,688$ (462)$ 5,601$ (83,027)$ -$ -$
Covered Employee Payroll 5,315,672$ 4,953,172$ 4,740,758$ 4,459,380$ 4,214,265$ 4,109,545$ 3,852,802$ 3,765,128$ 3,784,133$
Contributions as a Percentage of
Covered Employee Payroll 12.60%12.70%9.62%7.70%5.90%7.26%14.45%20.10%20.60%
*Information provided above was obtained from an actuarial valuation. Information prior to fiscal year 2013 was not available.
Notes to Schedule:
Valuation Date October 1, 2019
Actuarially determined contribution rates are calculated as of October 1, two years prior to the end of the fiscal year in which contributions are reported.
Methods and assumptions used to determine contribution rates:
Funding Method Entry age normal actuarial cost method.
Actuarial Asset Method Each year, the prior actuarial value of assets is brought forward utilizing the historical geometric 4-year average Market Value return.
It is possible that over time this technique will produce an insignificant bias above or below Market Value.
Amortization Method Level of percentage of pay, closed.
Remaining Amortization Period 20 years (as of October 1, 2016).
Inflation 2.5% per year.
Salary Increases Service Increase
0 10.0%
1 - 2 7.5%
3 - 10 6.0%
11 - 19 5.0%
20+4.0%
Payroll Growth 3% per year.
Interest Rate 7.75% per year compounded annually, net of investment related expenses.
CITY OF CRESTVIEW, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CONTRIBUTIONS -
GENERAL EMPLOYEES' RETIREMENT PLAN
LAST 10 FISCAL YEARS*
65
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CITY OF CRESTVIEW, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CONTRIBUTIONS -
GENERAL EMPLOYEES' RETIREMENT PLAN
LAST 10 FISCAL YEARS*
Retirement Age Age Rate
55 - 57 20.0%
58 - 64 25.0%
65+100.0%
Early Retirement None.
Termination Rates See table below.
Disability Rates See table below.
Mortality Healthy Lives:
Female: RP2000 Generational, 100% Annuitant White Collar, Scale BB.
Male: RP2000 Generational, 50% Annuitant White Collar / 50% Annuitant Blue Collar, Scale BB.
Disabled Lives:
Female: 100% RP2000 Disabled Female set forward 2 years.
Male: 100% RP2000 Disabled Male set back 4 years.
Other Information Termination Rates Table
Service Rate Service Rate
0 - 1 25.0%20 0.026%
2 20.0%30 0.029%
3 15.0%40 0.061%
4 10.0%50 0.251%
5 9.5%
6 9.0%
7 8.5%
8 8.0%
9 7.5%
10 7.0%
11 6.5%
12 6.0%
13 5.5%
14 5.0%
15 4.5%
16+4.0%
Disability Rates Table
66
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2021 2020 2019 2018 2017 2016 2015 2014 2013
Actuarially Determined Contribution 815,989$ 785,542$ 632,870$ 432,650$ 326,598$ 322,355$ 542,628$ 762,470$ 929,835$
From Excess State Money Reserve - - - - - 102,941 - - -
Contributions in Relation to the Actuarially
Determined Contributions 814,585 767,263 611,043 352,014 353,034 330,709 623,233 762,470 929,835
Contributions Deficiency (Excess)1,404$ 18,279$ 21,827$ 80,636$ (26,436)$ (111,295)$ (80,605)$ -$ -$
Covered Employee Payroll 5,006,067$ 4,760,860$ 4,619,494$ 4,506,775$ 4,354,635$ 4,186,726$ 3,989,908$ 3,701,314$ 4,132,599$
Contributions as a Percentage of
Covered Employee Payroll 16.27%16.12%13.23%7.81%8.11%7.90%15.62%20.60%22.50%
*Information provided above was obtained from an actuarial valuation. Information prior to fiscal year 2013 was not available.
Notes to Schedule:
Valuation Date October 1, 2019
Actuarially determined contribution rates are calculated as of October 1, two years prior to the end of the fiscal year in which contributions are reported.
Methods and assumptions used to determine contribution rates:
Funding Method Frozen entry age actuarial cost method.
Actuarial Asset Method Each year, the prior actuarial value of assets is brought forward utilizing the historical geometric 4-year average Market Value return.
It is possible that over time this technique will produce an insignificant bias above or below Market Value.
Amortization Method Level of percentage of pay, closed.
Remaining Amortization Period 20 years (as of October 1, 2016).
Inflation 2.5% per year.
Salary Increases 6.5% per year until the assumed retirement age.
Payroll Growth 3% per year.
Interest Rate 8% per year compounded annually, net of investment related expenses.
Retirement Age Earlier of age 55 and 10 years of service or age 52 and 25 years of service.
Any member who has reached normal retirement age on the valuation date is assumed to continue employment for one additional year.
Early Retirement Commencing with the earliest retirement age (45). Members are assumed to retire with immediate subsidized benefit at the rate of 5% per year.
CITY OF CRESTVIEW, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CONTRIBUTIONS -
POLICE OFFICERS' AND FIREFIGHTERS' RETIREMENT PLAN
LAST 10 FISCAL YEARS*
67
Page 74 of 121
CITY OF CRESTVIEW, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CONTRIBUTIONS -
POLICE OFFICERS' AND FIREFIGHTERS' RETIREMENT PLAN
LAST 10 FISCAL YEARS*
Termination Rates See table below.
Disability Rates See table below.
Mortality Healthy Lives:
Female: RP2000 Generational, 100% Annuitant White Collar, Scale BB.
Male: RP2000 Generational, 10% Annuitant White Collar / 90% Annuitant Blue Collar, Scale BB.
Disabled Lives:
Female: 60% RP2000 Disabled Female set forward 2 years / 40$ Annuitant White Collar with no setback, no projection scale.
Male: 60% RP2000 Disabled Male set back 4 years / 40% Annuitant White Collar with no setback, no projection scale.
Other Information Termination and Disability Rates Table
% Becoming Disabled
Age % Termination During the Year
20 15.0%0.14%
50 2.0%1.00%
30 12.5%0.18%
40 6.5%0.30%
68
Page 75 of 121
For the Year Ended September 30,2021 2020 2019 2018 2017 2016 2015 2014 2013
Annual Money Weighted Rate of Return,
Net of Investment Expense 19.42%8.65%4.64%8.35%12.40%7.54%-1.99%9.70%12.28%
*Information provided above was obtained from an actuarial valuation. Information prior to fiscal year 2013 was not available.
CITY OF CRESTVIEW, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF INVESTMENT RETURNS -
GENERAL EMPLOYEES' RETIREMENT PLAN
LAST 10 FISCAL YEARS*
69
Page 76 of 121
For the Year Ended September 30,2021 2020 2019 2018 2017 2016 2015 2014 2013
Annual Money Weighted Rate of Return,
Net of Investment Expense 19.40%8.12%3.94%8.12%12.45%6.60%-2.25%9.92%12.04%
*Information provided above was obtained from an actuarial valuation. Information prior to fiscal year 2013 was not available.
CITY OF CRESTVIEW, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF INVESTMENT RETURNS -
POLICE OFFICERS' AND FIREFIGHTERS' RETIREMENT PLAN
LAST 10 FISCAL YEARS*
70
Page 77 of 121
COMBINING FINANCIAL STATEMENTS
Page 78 of 121
CITY OF CRESTVIEW, FLORIDA
NON-MAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
The special revenue funds are used to account for the proceeds of specific sources (other than special
assessments, expendable trusts, or for major capital projects) that are legally restricted to expenditure
for specified purposes.
Law Enforcement Trust Fund—To account for proceeds collected under the Florida Contraband Forfeiture
Act. The proceeds are to be used solely for law enforcement purposes, with emphasis given to crime
prevention, safe neighborhoods, and drug abuse prevention programs.
Community Redevelopment Agency—To account for the operation of the Agency overseeing the
redevelopment of the designated redevelopment areas. The Agency is funded by property taxes collected
in the Agency’s designated area.
Community Development Block Grant (CDBG) Fund – To account for grant revenues and expenses related
to the federal grant program which provides funding for housing, community and economic development
activities, and assistance for low and moderate income persons.
Building and Permitting Fund—To account for revenues derived from building permits and inspection
fees that are legally restricted for enforcing the Florida Building Code.
DEBT SERVICE FUND
The Debt Service Fund is used to accumulate monies for payment of the Public Improvement Refunding
Bonds, Series 2015, with remaining principal and interest due annually on March 1 until maturity in
September 2041.
PERMANENT FUND
Permanent funds are used to report resources that are legally restricted to the extent that only earnings,
not principal, may be used for purposes that support the reporting government’s programs.
Library Fund—To account for a donation to the City to purchase library books. The interest is used to
purchase books for the City’s public library.
Page 79 of 121
Law Community
Enforcement Redevelopment Building and Debt Permanent
Trust Agency CDBG Permitting Service Fund Total
Assets
Cash and Cash
Equivalents 4,493$ 909,188$ -$ 982,914$ 213,906$ 2,913$ 2,113,414$
Cash and Cash
Equivalents -
Restricted - - - - 142,192 - 142,192
Investments - - - - - 53,125 53,125
Due from Other
Governments - - 110,678 - - - 110,678
Total Assets 4,493 909,188 110,678 982,914 356,098 56,038 2,419,409
Liabilities
Accounts Payable - 338 - 2,085 - - 2,423
Accrued Expenses - - - 15,859 - - 15,859
Interfund Payables - - 110,678 - - - 110,678
Total Liabilities - 338 110,678 17,944 - - 128,960
Fund Balances
Non-Spendable - - - - - 53,125 53,125
Restricted - 908,850 - 964,970 356,098 - 2,229,918
Assigned 4,493 - - - - 2,913 7,406
Total Fund Balances 4,493 908,850 - 964,970 356,098 56,038 2,290,449
Total Liabilities
and Fund Balances 4,493$ 909,188$ 110,678$ 982,914$ 356,098$ 56,038$ 2,419,409$
CITY OF CRESTVIEW, FLORIDA
COMBINING BALANCE SHEET
NON-MAJOR GOVERNMENTAL FUNDS
SEPTEMBER 30, 2021
Special Revenue Funds
71
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Law Community
Enforcement Redevelopment Building and Debt Permanent
Trust Agency CDBG Permitting Service Fund Total
Revenues
Taxes -$ 82,570$ -$ -$ -$ -$ 82,570$
Licenses and Permits - - - 594,501 - - 594,501
Intergovernmental - - 110,678 - - - 110,678
Miscellaneous - 1,870 - - - 526 2,396
Total Assets - 84,440 110,678 594,501 - 526 790,145
Expenditures
Current:
General Government - 283,881 - - - - 283,881
Public Safety - - - 470,561 - - 470,561
Economic Environment - - 77,778 - - - 77,778
Debt Service:
Principal - - - 9,928 200,000 - 209,928
Interest - - - 2,469 81,349 - 83,818
Total Expenditures - 283,881 77,778 482,958 281,349 - 1,125,966
Excess (Deficiency) Revenues
Over (Under) Expenditures - (199,441) 32,900 111,543 (281,349) 526 (335,821)
Other Financing Sources (Uses)
Transfers in - 194,600 - 2,706 325,547 - 522,853
Transfers out - (39,600) (32,900) (85,000) - - (157,500)
Capital Lease Obligation - - - 80,509 - - 80,509
Total Other Financing
Sources (Uses)- 155,000 (32,900) (1,785) 325,547 - 445,862
Net Change in Fund Balances - (44,441) - 109,758 44,198 526 110,041
Fund Balances,
Beginning of Year 4,493 953,291 - 855,212 311,900 55,512 2,180,408
Fund Balances,
End of Year 4,493$ 908,850$ -$ 964,970$ 356,098$ 56,038$ 2,290,449$
Special Revenue Funds
CITY OF CRESTVIEW, FLORIDA
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
NON-MAJOR GOVERNMENTAL FUNDS
YEAR ENDED SEPTEMBER 30, 2021
72
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Stormwater Crestview
Fund Unlimited Total
Assets
Current Assets:
Cash and Cash Equivalents 80,285$ 500,000$ 580,285$
Accounts Receivable, Net 23,819 - 23,819
Total Current Assets 104,104 500,000 604,104
Non-Current Assets:
Net Pension Asset 4,684 - 4,684
Total Non-Current Assets 4,684 - 4,684
Total Assets 108,788 500,000 608,788
Deferred Outflows of Resources
Other Postemployment Benefits 7,156 - 7,156
Pensions 33,114 - 33,114
Total Deferred Outflows of Resources 40,270 - 40,270
Total Assets and Deferred Outflows 149,058 500,000 649,058
Liabilities
Current Liabilities:
Accounts Payable 1,764 - 1,764
Accrued Expenses 2,864 - 2,864
Total Current Liabilities 4,628 - 4,628
Non-Current Liabilities:
Other Postemployment Benefits Obligation 25,862 - 25,862
Compensated Absences 7,220 - 7,220
Total Non-Current Liabilities 33,082 - 33,082
Total Liabilities 37,710 - 37,710
Deferred Inflows of Resources
Other Postemployment Benefits 3,277 - 3,277
Pensions 59,775 - 59,775
Total Deferred Inflows of Resources 63,052 - 63,052
Net Position
Unrestricted 48,296$ 500,000$ 548,296$
CITY OF CRESTVIEW, FLORIDA
COMBINING STATEMENT OF NET POSITION
NON-MAJOR ENTERPRISE FUNDS
SEPTEMBER 30, 2021
73
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Stormwater Crestview
Fund Unlimited Total
Operating Revenue
Charges for Service 387,735$ -$ 387,735$
Operating Expenses
Personnel Expenses 276,128 - 276,128
Repairs and Maintenance 24,490 - 24,490
Materials and Supplies 31,650 - 31,650
Other Expenses 14,442 - 14,442
Total Operating Expenses 346,710 - 346,710
Operating Income 41,025 - 41,025
Transfers
Transfers in 7,271 500,000 507,271
Change in Net Position 48,296 500,000 548,296
Net Position, Beginning of Year - - -
Net Position, End of Year 48,296$ 500,000$ 548,296$
CITY OF CRESTVIEW, FLORIDA
COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
NON-MAJOR ENTERPRISE FUNDS
YEAR ENDED SEPTEMBER 30, 2021
74
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Stormwater Crestview
Fund Unlimited Total
Cash Flows from Operating Activities
Cash Received from Customers 363,916$ -$ 363,916$
Cash Paid to Suppliers for Goods and Services (65,954) - (65,954)
Cash Paid to Employees for Services (224,948) - (224,948)
Net Cash Provided by Operating Activities 73,014 - 73,014
Cash Flows from Non-Capital Financing Activities
Transfers to Other Funds 7,271 500,000 507,271
Net Change in Cash and Cash Equivalents 80,285 500,000 580,285
Cash and Cash Equivalents, Beginning of Year - - -
Cash and Cash Equivalents, End of Year 80,285$ 500,000$ 580,285$
Reconciliation of Operating Income to Net Cash
Operating Income 41,025$ -$ 41,025$
Changes in Operating Assets and Liabilities:
Accounts Receivable (23,819) - (23,819)
Accounts Payable and Accrued Expenses 4,628 - 4,628
Compensated Absences 7,220 - 7,220
Other Postemployment Benefits and
Related Deferred Inflows and Outflows 21,983 - 21,983
Net Pension Liability and Related
Deferred Inflows and Outflows 21,977 - 21,977
Total Adjustments 31,989 - 31,989
Net Cash Provided by Operating Activities 73,014$ -$ 73,014$
CITY OF CRESTVIEW, FLORIDA
COMBINING STATEMENT OF CASH FLOWS
NON-MAJOR ENTERPRISE FUNDS
YEAR ENDED SEPTEMBER 30, 2021
75
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COMPLIANCE SECTION
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76
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable Mayor and City Council
City of Crestview
Crestview, Florida
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the business-type activities, each major fund, and the aggregate remaining fund information of
City of Crestview, Florida (the City), as of and for the year ended September30, 2021, and the related
notes to the financial statements, which collectively comprise the City’s basic financial statements and
have issued our report thereon dated June 21, 2022.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control
over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in
the circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do
not express an opinion on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement
of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A
significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe
than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may
exist that were not identified. We identified certain deficiencies in internal control, described below that
we consider to be a material weakness.
Page 86 of 121
77
Honorable Mayor and City Council
City of Crestview
Crestview, Florida
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
2021-01 - Financial Reporting
Criteria: To maintain a well-functioning and accurate internal and external financial reporting framework,
financial information must be documented, recorded, and, when applicable, provided to third-party
preparers in a timely manner and at appropriate amounts.
Condition: A significant number of audit adjustments were needed to properly record transactions in
accordance with generally accepted accounting principles (GAAP) in the following areas:
■ Pension plan reporting of year-end balances. Due to delays in financial reporting of pension plan
balances, the City’s actuaries were unable to provide timely actuarial reports necessary for the City to
prepare the pension and other postemployment benefit adjustments within a reasonable time after
year-end. In addition, significant adjustments were needed to properly reflect year-end balances in
accordance with GAAP in the pension plans.
■ Reporting of fixed asset balances and depreciation expense. The City currently uses excel
spreadsheets for tracking and maintaining fixed asset depreciation schedules. Errors were identified
in the depreciation schedule related to depreciation expense and accumulated depreciation. The use
of this technology lends itself to manual errors.
■ Over statements of accounts payable at year-end. The cutoff of accounts payable related to certain
construction projects that crossed fiscal years required material adjustments.
■ Month-end reconciliations between the utility billing system and the general ledger are not currently
being performed. As such, adjustments were needed to accurately reflect accounts receivable
balances.
Effect: By not maintaining an adequate framework for timely, accurate, and complete financial reporting,
the City’s financial records required significant and material audit adjustments in order to create accurate
financial statements in accordance with GAAP.
Recommendation: We recommend that the City implement processes, procedures, and, where necessary,
technology appropriate for the level of transactional activity occurring within the City’s financial reporting
and recordkeeping function and makes an effort to implement periodic reconciliation procedures
sufficient to verify the accuracy of the underlying financial data on an ongoing and timely basis.
Management’s Response: Beginning with the fiscal year 2022, the City’s financial services division will
assume responsibility for the financial reporting of the City’s two retirement plans. This service has
historically been provided by an outside source; however, to streamline the process, the accounting
services will be provided internally by the finance team.
The finance department has discussed for some time the need to import the depreciation Excel
spreadsheet to a more suitable program. With the assistance of our audit team, we are currently in the
process of reviewing programs.
Page 87 of 121
78
Honorable Mayor and City Council
City of Crestview
Crestview, Florida
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
The City has numerous major projects that are often on-going at fiscal year-end. Certain projects with
expenditures in the current fiscal year (21/22) were inadvertently accrued at fiscal year-end. Discussion
amongst staff ensued regarding methods to determine if services have been provided at fiscal year-end.
Accounts receivables are generally reconciled at fiscal year-end. However, to reflect the information more
accurately and to detect errors if they exist, staff will perform a monthly reconciliation.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts and grant agreements, noncompliance with which could have a direct and material effect on
the financial statements. However, providing an opinion on compliance with those provisions was not an
objective of our audit, and accordingly, we do not express such an opinion. The results of our tests
disclosed no instances of non-compliance or other matters that are required to be reported under
Government Auditing Standards.
Response to Findings
Government Auditing Standards requires the auditor to perform limited procedures on the City’s response
to the findings identified in our audit and described above. The City’s response was not subjected to the
other auditing procedures applied in the audit of the financial statements and, accordingly, we express no
opinion on the response.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
June 21, 2022
Tallahassee, Florida
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79
MANAGEMENT LETTER
Honorable Mayor and City Council
City of Crestview
Crestview, Florida
Report on the Financial Statements
We have audited the financial statements of the City of Crestview, Florida (the City), as of and for the
fiscal year ended September 30, 2021, and have issued our report thereon dated June 21, 2022.
Auditor’s Responsibility
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America; the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States; the audit requirements of Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards (Uniform Guidance), and Chapter 10.550 Rules of the Florida Auditor General.
Other Reporting Requirements
We have issued our Independent Auditor’s Report on Internal Control over Financial Reporting and on
Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance
with Government Auditing Standards; Independent Auditor’s Report on Compliance for Each Major
Program and on Internal Control over Compliance; Schedule of Findings and Questioned Costs; and
Independent Accountant’s Report on an examination conducted in accordance with AICPA Professional
Standards, AT-C Section 315, regarding compliance requirements in accordance with Chapter 10.550,
Rules of the Auditor General. Disclosures in those reports, which are dated June 21, 2022, should be
considered in conjunction with this management letter.
Prior Audit Findings
Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective
actions have been taken to address findings and recommendations made in the preceding financial audit
report. Corrective actions have been taken to address findings and recommendations made in the
preceding financial audit report.
Official Title and Legal Authority
Sections 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal
authority for the primary government and each component unit of the reporting entity be disclosed in
this management letter, unless disclosed in the notes to the financial statements. The official title and
legal authority for the City and the component unit of the City has been disclosed in Note 1 to the financial
statements.
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80
Honorable Mayor and City Council
City of Crestview
Crestview, Florida
MANAGEMENT LETTER
Financial Condition and Management
Section 10.554(1)(i)5.a. and 10.556(7), Rules of the Auditor General, require us to apply appropriate
procedures and communicate the results of our determination as to whether or not the City has met one
or more of the conditions described in Section 218.503(1), Florida Statutes, and to identify the specific
condition(s) met. In connection with our audit, we determined that the City did not meet any of the
conditions described in Section 218.503(1), Florida Statutes.
Pursuant to Sections 10.554(1)(i)5.b. and 10.556(8), Rules of the Auditor General, we applied financial
condition assessment procedures for the City. It is management’s responsibility to monitor the City’s
financial condition, and our financial condition assessment was based in part on representations made by
management and the review of financial information provided by same.
Section 10.554(1)(i)2., Rules of the Auditor General, requires that we communicate any recommendations
to improve financial management. In connection with our audit, we did not have any such
recommendations.
Additional Matters
Section 10.554(1)(i)3., Rules of the Auditor General, requires us to communicate non-compliance with
provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred,
that have an effect on the financial statements that is less than material but warrants the attention of
those charged with governance. In connection with our audit, we did not note any such findings.
Purpose of this Letter
Our management letter is intended solely for the information and use of the Legislative Auditing
Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor
General, Federal and other granting agencies, and applicable management, and is not intended to be and
should not be used by anyone other than these specified parties.
June 21, 2022
Tallahassee, Florida
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81
INDEPENDENT ACCOUNTANT’S REPORT ON
COMPLIANCE WITH SECTION 218.415, FLORIDA STATUTES
Honorable Mayor and City Council
City of Crestview
Crestview, Florida
We have examined the City of Crestview, Florida’s (the City) compliance with Section 218.415, Florida
Statutes, regarding the investment of public funds during the year ended September 30, 2021.
Management is responsible for the City’s compliance with those requirements. Our responsibility is to
express an opinion on the City’s compliance based on our examination.
Our examination was conducted in accordance with attestation standards established by the American
Institute of Certified Public Accountants. Those standards require that we plan and perform the
examination to obtain reasonable assurance about whether the City complied with Section 218.415,
Florida Statutes, in accordance with the criteria, in all material respects. An examination involves
performing procedures to obtain evidence about the City’s compliance with those requirements. The
nature, timing, and extent of the procedures selected depend on our judgment, including as assessment
of risks of material misstatement, whether due to fraud or error. We believe that the evidence we
obtained is sufficient and appropriate to provide a reasonable basis for our opinion.
In our opinion, the City complied, in all material respects, with the aforementioned requirements for the
year ended September 30, 2021.
This report is intended solely for the information and use of the City and the Auditor General, State of
Florida, and is not intended to be and should not be used by anyone other than these specified parties.
June 21, 2022
Tallahassee, Florida
Page 91 of 121
Page 92 of 121
Page 93 of 121
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITOR’S REPORT
CITY OF CRESTVIEW COMMUNITY REDEVELOPMENT AGENCY
CRESTVIEW, FLORIDA
SEPTEMBER 30, 2021
TABLE OF CONTENTS
Independent Auditor’s Report .................................................................................................................. 1-2
Management’s Discussion and Analysis ................................................................................................... 3-6
Basic Financial Statements
Government-Wide Financial Statements:
Statement of Net Position ...................................................................................................................... 7
Statement of Activities ........................................................................................................................... 8
Fund Financial Statements:
Balance Sheet – Governmental Fund ..................................................................................................... 9
Statement of Revenues, Expenditures, and
Changes in Fund Balance – Governmental Fund .............................................................................. 10
Statement of Revenues, Expenditures, and
Changes in Fund Balance – Budget and Actual – General Fund ....................................................... 11
Notes to Financial Statements ............................................................................................................ 12-16
Other Reports
Independent Auditor’s Report on Internal Control Over
Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards ........................................................................... 17-18
Management Letter ............................................................................................................................ 19-21
Independent Accountant’s Report on Compliance with
Section 218.415, Florida Statutes ......................................................................................................... 22
Independent Accountant’s Report on Compliance with
Section 163.387(6) and (7), Florida Statutes ................................................................................... 23-24
Page 94 of 121
1
INDEPENDENT AUDITOR’S REPORT
The Board of Commissioners
Community Redevelopment Agency
Crestview, Florida
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the major fund,
and the budgetary comparison for the General Fund of the City of Crestview Community Redevelopment
Agency (the Agency) as of and for the year ended September 30, 2021, and the related notes to the
financial statements, which collectively comprise the Agency’s basic financial statements as listed in the
table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor ’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the Agency’s
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
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2
The Board of Commissioners
Community Redevelopment Agency
Crestview, Florida
INDEPENDENT AUDITOR’S REPORT
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of the Agency as of September 30, 2021, and its changes in financial position and the
budgetary comparisons for the General Fund for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management ’s
discussion and analysis (MD&A), as listed in the table of contents, be presented to supplement the basic
financial statements. Such information, although not a part of the basic financial statements, is required
by the Governmental Accounting Standards Board (GASB), who considers it to be an essential part of
financial reporting for placing the basic financial statements in an appropriate operational, economic, or
historical context. We have applied certain limited procedures to the required supplementary information
in accordance with auditing standards generally accepted in the United States of America, which consisted
of inquiries of management about the methods of preparing the information and comparing the
information for consistency with management ’s responses to our inquiries, the basic financial statements,
and other knowledge we obtained during our audit of the basic financial statements. We do not express
an opinion or provide any assurance on the information because the limited procedures do not provide us
with sufficient evidence to express an opinion or provide any assurance.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued a report dated June 21, 2022, on
our consideration of the Agency’s internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters.
The purpose of that report is to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing and not to provide an opinion on the internal
control over financial reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards and should be considered in assessing the results of our
audit.
June 21, 2022
Tallahassee, Florida
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3
CITY OF CRESTVIEW, FLORIDA
COMMUNITY REDEVELOPMENT AGENCY
A COMPONENT UNIT OF THE CITY OF CRESTVIEW, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
(UNAUDITED)
The City of Crestview Community Redevelopment Agency’s (the Agency) Management’s Discussion and
Analysis (MD&A) is intended to provide the readers of the Agency’s financial statements with a general
overview of the financial activities during fiscal year 2021.
HIGHLIGHTS
Financial Highlights
■ The assets of the Agency exceeded its liabilities at the close of the most recent fiscal year by $908,850
(net position).
■ The Agency’s total net position decreased by $44,441 or 5%.
■ At the close of fiscal year 2021, the Agency’s General Fund reported an ending fund balance of
$908,850, a decrease of $44,441. Revenues decreased by $48,452 or 36%. This was primarily due to
additional funding received from Okaloosa County in the previous year for the costs related to
historical signs. Total expenditures decreased by $13,070 or 4%. The expenditures include efforts to
improve Main Street's aesthetics through the Agency's Awning Improvement Grants program.
■ As disclosed in Note 1.H. to the financial statements, the Agency restated beginning Net Position to
remove infrastructure assets that are not titled to the Agency but considered property of the City of
Crestview and reported on the City’s financial statements.
OVERVIEW OF FINANCIAL STATEMENTS
The Agency’s basic financial statements provide information on both the Agency as a whole (government-
wide) and the major individual funds.
Government-Wide Financial Statements
The government-wide financial statements provide readers with a broad overview of the Agency’s
finances, in a similar manner to a private-sector business. The government-wide financial statements are
prepared using the accrual basis of accounting.
The government-wide financial statements include:
Statement of Net Position – This statement presents information on the Agency’s assets and liabilities.
This statement format combines and consolidates the governmental funds’ current financial resources
with capital assets and long-term obligations.
Statement of Activities – This statement presents information showing how the Agency’s net position
changed during the fiscal year. All changes in revenues are reported as soon as the underlying event giving
rise to the change occurs, regardless of the timing of related cash flows. Revenues and expenses are
reported in this statement for some items that will result in cash flows in future fiscal periods.
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4
CITY OF CRESTVIEW, FLORIDA
COMMUNITY REDEVELOPMENT AGENCY
A COMPONENT UNIT OF THE CITY OF CRESTVIEW, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
(UNAUDITED)
The government-wide financial statements present functions of the Agency that are principally supported
by tax increment financing (governmental activities). The governmental activities of the Agency include
general government activities and redevelopment projects.
Fund Financial Statements
Fund financial statements provide readers with an overview of each fund and its related function in a
traditional format. A fund is a grouping of related accounts that maintain control over resources that are
segregated for specific activities or objectives. The Agency uses fund accounting to ensure and
demonstrate legal compliance with financial-related legal requirements. The General Fund is the only
governmental fund that is used to account for the operating activities of the Agency. The General Fund
also includes the activities of the redevelopment programs which are funded by restricted debt proceeds.
Governmental funds are used to account for essentially the same functions reported as governmental
activities in the government-wide financial statements. However, unlike the government-wide financial
statements, the governmental fund financial statements focus on near-term inflows and outflows of
spendable resources and balances of spendable resources available at the end of the fiscal year. Such
information may be useful in evaluating a government’s near-term financing requirements.
The focus of governmental funds is narrower than government-wide financial statements and, therefore,
useful to compare the information presented for governmental funds with similar information presented
for governmental activities in the government-wide financial statements. The ‘Balance Sheet –
Governmental Fund’ and ‘Statement of Revenues, Expenditures, and Changes in Fund Balance –
Governmental Fund’ are reconciled as shown on the page following the respective statements to facilitate
the comparison between the two presentations.
Notes to the Basic Financial Statements
The notes to the basic financial statements provide additional information that is essential to the full
understanding of the information presented in the government-wide and the fund financial statements
and is required by generally accepted accounting principles.
Page 98 of 121
5
CITY OF CRESTVIEW, FLORIDA
COMMUNITY REDEVELOPMENT AGENCY
A COMPONENT UNIT OF THE CITY OF CRESTVIEW, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
(UNAUDITED)
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Net position may serve over time as a useful indicator of a government’s financial position. In the case of
the Agency, assets exceed liabilities by $908,850 (net position) at the close of the most recent fiscal year.
One hundred percent of the Agency’s net position is restricted for community redevelopment.
The following schedule shows a comparison of the fiscal year 2021 and 2020 Statements of Net Position.
The following schedule shows a comparison of the fiscal year 2021 and 2020 Statements of Activities.
Cash and Cash Equivalents $909,188 $1,086,498
Total assets 909,188 1,086,498
Accounts Payable 338 133,207
Total liabilities 338 133,207
Net position:
Restricted 908,850 953,291
Total net position $908,850 $953,291
2021 2020
Governmental Activities
General revenues:
Property taxes $82,570 $76,348
Other revenues - 50,000
Investment earnings 1,870 6,544
Total revenues 84,440 132,892
Expenses:
General government 203,399 66,951
Community Redevelopment 80,482 230,000
Total expenses 283,881 296,951
Increase (decrease) in net assets
before transfers (199,441) (164,059)
Net Transfers 155,000 145,840
Increase (decrease) in net position $(44,441) $(18,219)
Governmental Activities
2021 2020
Page 99 of 121
6
CITY OF CRESTVIEW, FLORIDA
COMMUNITY REDEVELOPMENT AGENCY
A COMPONENT UNIT OF THE CITY OF CRESTVIEW, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
(UNAUDITED)
Financial Analysis of the Agency’s Fund
The Agency uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements.
Governmental Funds
The Agency has only one governmental fund, the General Fund. The focus of the Agency’s general fund is
to provide information on near-term inflows, outflows, and balances of spendable resources. Such
information is useful in assessing the Agency’s financing requirements.
At the end of the fiscal year, the Agency’s governmental fund reported an ending fund balance of
$908,850, a decrease of $44,441 for the year. The Agency’s fund balance is restricted for future
community redevelopment purposes. The decrease in fund balance was primarily related to additional
expenses for the Downtown Mobility Study which was developed to design improvements to the
downtown redevelopment area, including traffic flow, parking, and beautification, etc.
General Fund Budgetary Highlights
During the fiscal year 2021, actual revenues and transfers exceeded the final budget by $37,290. Total
expenditures were $865,016 less than the final budgeted appropriations for the year ended
September 30, 2021. This was largely due to undistributed grant funding due to lack of applications and
slower than expected movement on anticipated improvement projects.
Economic Factors and Next Year’s Budget
The following economic factors were considered in establishing the Agency’s 2022 budget:
■ The property valuations in the Agency district increased approximately 3% from the previous year.
■ In fiscal year 2022, the Agency budgeted to implement many of the downtown improvements and
upgrades identified in the recently completed mobility study.
Request for Information
This financial report is designed to provide a general overview of the Agency’s finances. Questions
concerning any of the information provided in this report or requests for additional information should
be addressed to the City of Crestview Community Redevelopment Agency at Crestview City Hall, 198 N .
Wilson Street, Crestview, Florida 32536, phone (850) 682-1560.
Page 100 of 121
BASIC FINANCIAL STATEMENTS
Page 101 of 121
Governmental
Activities
Assets
Current Assets:
Cash and Cash Equivalents 909,188$
Total Current Assets 909,188
Total Assets 909,188
Liabilities
Accounts Payable 338
Total Liabilities 338
Net Position
Restricted for:
Community Redevelopment 908,850
Total Net Position 908,850
Total Liabilities and Net Position 909,188$
CITY OF CRESTVIEW COMMUNITY REDEVELOPMENT AGENCY
SEPTEMBER 30, 2021
STATEMENT OF NET POSITION
See accompanying notes.
7
Page 102 of 121
Net (Expense)
Revenue and Changes
in Net Position
Governmental
Expenses Activities
Functions
Governmental:
General Government 203,399$ (203,399)$
Community Redevelopment 80,482 (80,482)
Total Functions 283,881$ (283,881)$
General Revenues
Taxes 82,570
Miscellaneous 1,870
Total General Revenues 84,440
Net Transfers 155,000
Change in Net Position (44,441)
Net Position - Beginning of Year, As Restated 953,291
Net Position - End of Year 908,850$
CITY OF CRESTVIEW COMMUNITY REDEVELOPMENT AGENCY
FOR THE YEAR ENDED SEPTEMBER 30, 2021
STATEMENT OF ACTIVITIES
See accompanying notes.
8
Page 103 of 121
Assets
Cash and Cash Equivalents 909,188$
Total Assets 909,188
Liabilities
Accounts Payable 338
Total Liabilities 338
Fund Balance
Restricted for:
Community Redevelopment 908,850
Total Fund Balance 908,850
Total Liabilities and Fund Balance 909,188$
CITY OF CRESTVIEW COMMUNITY REDEVELOPMENT AGENCY
BALANCE SHEET - GOVERNMENTAL FUND
SEPTEMBER 30, 2021
See accompanying notes.
9
Page 104 of 121
Revenues
Taxes 82,570$
Miscellaneous 1,870
Total Revenues 84,440
Expenditures
Current:
General Government 283,881
Community Redevelopment -
Total Expenditures 283,881
(Deficiency) of Revenues Under Expenditures (199,441)
Other Financing Sources
Transfers in 194,600
Transfers (out)(39,600)
Total Other Financing Sources 155,000
Net Change in Fund Balance (44,441)
Fund Balance - Beginning of Year 953,291
Fund Balance - End of Year 908,850$
CITY OF CRESTVIEW COMMUNITY REDEVELOPMENT AGENCY
STATEMENT OR REVENUES, EXPENDITURES, AND CHANGES
FOR THE YEAR ENDED SEPTEMBER 30, 2021
IN FUND BALANCE - GOVERNMENTAL FUND
See accompanying notes.
10
Page 105 of 121
Variance with
Final Budget -
Positive
Original Final Actual (Negative)
Revenues
Taxes 78,000$ 82,570$ 82,570$ -$
Miscellaneous Income 4,180 4,180 1,870 (2,310)
Total Revenues 82,180 86,750 84,440 (2,310)
Expenditures
Current:
General Government 212,553 217,553 203,399 14,154
Community Redevelopment 912,134 931,344 80,482 850,862
Total Expenditures 1,124,687 1,148,897 283,881 865,016
Excess (Deficiency) of Revenues
Over (Under) Expenditures (1,042,507) (1,062,147) (199,441) 862,706
Other Financing Sources
Transfers in 155,000 155,000 194,600 39,600
Transfers (out)(39,600) (39,600) (39,600) -
Total Other Financing Sources (Uses)115,400 115,400 155,000 39,600
Appropriation of Fund Balance 927,107 946,747 - (946,747)
Net Change in Fund Balance -$ -$ (44,441)$ (44,441)$
FOR THE YEAR ENDED SEPTEMBER 30, 2021
CITY OF CRESTVIEW COMMUNITY REDEVELOPMENT AGENCY
Budgeted Amounts
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -
BUDGET AND ACTUAL - GENERAL FUND
See accompanying notes.
11
Page 106 of 121
NOTES TO FINANCIAL STATEMENTS
THE CITY OF CRESTVIEW COMMUNITY REDEVELOPMENT AGENCY
CRESTVIEW, FLORIDA
12
Note 1 - Summary of Significant Accounting Policies
A. Reporting Entity
The City of Crestview (the City) Community Redevelopment Agency (the Agency) was established by the
City as a separate legal entity in accordance with Florida Statute 166.021, Chapter 163, Part III. The Agency
oversees the redevelopment of the downtown area. The Community Redevelopment Board of
Commissioners consists of the City Council who approve and have operational responsibility for the
component unit. The President and Vice President of the City Council function as the Chairman and Vice
Chairman of the Community Redevelopment Agency. In addition, City employees manage the Agency’s
assets. The Agency is reported in the financial statements of the primary government as a non-major
governmental fund.
B. Government-Wide and Fund Financial Statements
The basic financial statements include both government-wide 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 nonfiduciary activities of the primary government. For the most part, the
effect of interfund activity has been removed from these statements.
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or
segments are 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.
C. 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. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are
recorded as revenue in the year for which they are levied. Grants and similar items are recognized as
revenue soon as all eligibility requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources measurement
focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both
measurable and available. Revenues are considered to be available when they are collected within the
current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the
Agency considers revenues to be available if they are collected within 60 days of the end of the current
fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting.
The Agency’s primary source of revenue is property taxes. The City’s ad valorem taxes are assessed by
the Okaloosa County Property Appraiser and collected by the Okaloosa County Tax Collector in accordance
with Florida Statutes. The City retains the right and duty to set millage rates. Property taxes are not
recorded as receivables at September 30th because, though legally assessed as of January 1st, they are
not due and payable until after the close of the fiscal year ended the following September 30th.
Page 107 of 121
NOTES TO FINANCIAL STATEMENTS
THE CITY OF CRESTVIEW COMMUNITY REDEVELOPMENT AGENCY
CRESTVIEW, FLORIDA
13
The following is the current property tax calendar:
Assessment Date January 1, 2021
Levy Date November 1, 2021
Due Date March 31, 2022
Delinquency Date April 1, 2022
Discounts of 1% for each month taxes are paid prior to March are granted.
Revenue recognition criteria for property taxes under Governmental Accounting Standards Board (GASB)
requires that only property taxes expected to be collected within 60 days of the current period be accrued.
Property taxes which are uncollected as of the end of the fiscal year are generally immaterial in amount
and highly susceptible to uncollectibility; therefore, they are not recorded as a receivable at the balance
sheet date.
D. Basis of Presentation
The financial transactions of the Agency are recorded in one fund. A fund is a separate accounting entity
with a self-balancing set of accounts recording cash and other financial resources, together with all related
liabilities and residual equities or balances, and changes therein, which are segregated for the purpose of
carrying on specific activities or attaining certain objectives in accordance with special regulations,
restrictions, or limitations. As a general rule, the effect of interfund activity has been eliminated from the
government-wide financial statements.
Amounts reported as program revenues include: 1) charges to customers or applicants for goods, services
or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions.
Internally dedicated resources are reported as general revenues rather than program revenues. Likewise,
general revenues include all taxes.
When both restricted and unrestricted resources are available for use, it is the Agency’s policy to use
restricted resources first, then unrestricted resources as they are needed. Governmental funds focus on
the determination of financial position and changes in financial position (sources, uses and balances of
financial resources) and not net income. The Agency only has one fund which is used to account for the
activities of the Agency.
E. Assets, Liabilities, and Net Position or Fund Balances
Cash and Cash Equivalents
The Agency has defined cash and cash equivalents to include cash on hand, demand deposits, certificates
of deposits, and short-term investments with original maturities of three months or less from the date of
acquisition.
Deposits and Investments
Section 218.415, Florida Statutes, requires the investment of surplus public funds and prescribes the
instruments in which those investments are authorized, specifically the State of Florida Local Government
Surplus Funds Trust Fund, direct obligations of the United States Government or other obligations
Page 108 of 121
NOTES TO FINANCIAL STATEMENTS
THE CITY OF CRESTVIEW COMMUNITY REDEVELOPMENT AGENCY
CRESTVIEW, FLORIDA
14
unconditionally guaranteed by the United States Government and other similar permitted investments.
The City adheres strictly to the provisions of those cited Statutes, as well as with Chapter 280, Florida
Statutes, which requires the City to maintain deposits only with Qualified Public Depositories (QDPs). The
City maintains a cash pool available for use by all funds. Earnings from the pool are allocated to the
respective funds based on applicable cash participation by each fund.
Capital Assets
The Agency pays for certain infrastructure improvements (signs, roads, sidewalks, bridges, and other
utility infrastructure) within the designated redevelopment area; however, these improvements are
considered to be property of the City, and therefore are included as capital assets in the City’s
government-wide financial statements. The Agency does not currently have title to any capital assets.
Capital assets titled to the Agency, if any, are defined by the government as assets with an initial, individual
cost of more than $10,000 and an estimated useful life in excess of one year. Such assets are recorded at
historical cost or estimated historical cost if purchased or constructed. Donated capital assets are
recorded at estimated fair market value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend
assets’ lives are not capitalized.
Compensation Costs
The Agency has no employees of its own. Instead, the Agency reimburses the City for the portion of
salaries and benefits attributable to Agency activities based on the estimated time spent on those
activities as projected during the annual budget process. Any long-term payroll and benefit liabilities such
as compensated absences, other postemployment benefits, or pension liabilities are reported on the
City’s financial statements.
Classification of Fund Balance
GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, establishes
fund balance classifications that comprise a hierarchy based primarily on the extent to which government
is bound to observe constraints imposed upon the use of the resources reported in governmental funds.
Fund balance classifications, under GASB 54, are composed of the following:
■ Restricted—includes amounts that can be spent only for the specific purposes stipulated by external
resource providers, constitutionally or through enabling legislation. Restrictions may effectively be
changed or lifted only with the consent of resource providers.
This classification reflects not only the nature of funds, but also provide clarity to the level of
restriction placed upon fund balance. Fund balance can have different levels of restraint, such as
external versus internal compliance requirements.
In circumstances when an expenditure is made for a purpose for which amounts are available in
multiple fund balance classifications, fund balance is generally depleted in the order of restricted,
committed, assigned, and unassigned.
Page 109 of 121
NOTES TO FINANCIAL STATEMENTS
THE CITY OF CRESTVIEW COMMUNITY REDEVELOPMENT AGENCY
CRESTVIEW, FLORIDA
15
The government-wide fund financial statements utilize a net position presentation. Net position is
categorized as net investment in capital assets, restricted and unrestricted.
■ Net Investment in Capital Assets—is intended to reflect the portion of net position which are
associated with non-liquid, capital assets, net of related debt.
■ Restricted Net Position—are liquid assets, generated from revenues and net bond proceeds, which
are not accessible for general use because of third-party (statutory, bond covenant or grantor agency)
limitations.
■ Unrestricted Net Position—represents unrestricted liquid assets.
F. Estimates
The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of financial statements and the
reported amounts of revenue and expenditures during the reporting period. Actual results could differ
from those estimates.
G. Budgets
Budgets are adopted on a basis consistent with generally accepted accounting principles, except that
capital lease proceeds and related capital outlay are excluded from the budget. Annual appropriated
budgets are adopted by ordinance for all governmental funds. All appropriations lapse at fiscal year-end
except for appropriations related to multi-year capital projects.
Budgetary data reflected in the financial statements are established by the following procedures:
Prior to September 1 of each year, the Board prepares in detail and adopts a budget of anticipated
revenues and expenditures for all Agency purposes for the ensuing year.
Proposed budgets are advertised in a newspaper of general circulation in the City and detailed in the
minutes of the Council. Public hearings are conducted for the purposes of receiving taxpayer comments.
When the budget is adopted, it has the force and effect of appropriations for the various items and
purposes specified.
The limits shall not be exceeded by the Council nor any office or department during the year.
Amendments and transfers may be made to the budget by a two-thirds vote of the Council and the
consent of the Mayor. The level of budgetary control (that is the level at which expenditures cannot
legally exceed appropriations) has been established at the fund level.
A budget amendment shall be deemed to mean the act of increasing or decreasing the total budgeted
amount of a given fund as opposed to a transfer of a budgeted amount from one account to another
within the same fund. Budgeted amounts reflected in the financial statements are as originally adopted,
or as amended with the approval of the City Council.
Page 110 of 121
NOTES TO FINANCIAL STATEMENTS
THE CITY OF CRESTVIEW COMMUNITY REDEVELOPMENT AGENCY
CRESTVIEW, FLORIDA
16
H. Restatement
Beginning Net Position of the governmental activities was restated to remove capital assets that are
considered assets of the City in accordance with the Agency’s capital asset policies. The restatement of
beginning Net Position, Governmental Activities consisted of the following:
Governmental Activities
Net Position, Beginning of Year,
As Originally Reported $ 1,232,648
Prior Period Adjustment:
Remove Capital Assets (279,357)
Net Position, Beginning of Year,
As Restated $ 953,291
Note 2 - Deposits
Deposits may be exposed to custodial credit risk, which is the risk that in the event of a bank failure, the
government’s deposits may not be returned. The Agency manages its custodial credit risk by maintaining
its deposits with QPDs, as defined in Chapter 280, Florida Statutes, which bear no custodial credit risk or
are in institutions which meet the exemption requirements of Chapter 280. The exemptions qualify under
the exemptions 280.03(e) or 280.03(f) as a deposit made in accordance with Chapter 17.57(g). The
provisions of Chapter 280 allow QDPs to participate in a multiple financial institution collateral pool to
ensure the security for public deposits.
All QDPs must place with the Treasurer of the State of Florida, securities which have a market value equal
to 50% of all public funds on deposit at the end of each month in excess of any applicable deposit
insurance. In the event of default by a qualified public institution, the State Treasurer will pay public
depositors all losses. Losses in excess of insurance and collateral will be paid through assessments
between all QDPs. Under this method, all deposits are fully insured or collateralized with securities held
by the State Treasurer in the Agency’s name.
Note 3 - Transfers
The Agency is a blended component unit of the City. For the year ended September 30, 2021, the Agency
received a transfer from the City in the amount of $194,600 for its portion of tax increment financing. The
Agency transferred $39,600 to the City as reimbursement for shared administrative and marketing costs.
Page 111 of 121
OTHER REPORTS
Page 112 of 121
17
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
The Board of Commissioners
Community Redevelopment Agency
Crestview, Florida
We have audited, in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the City of Crestview
Community Redevelopment Agency (the Agency), as of and for the year ended September 30, 2021, and
the related notes to the financial statements, which collectively comprise the Agency’s financial
statements and have issued our report thereon dated June 21, 2022.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the Agency’s internal control over financial reporting
(internal control) as a basis for designing auditing procedures that are appropriate in the circumstances
for the purpose of expressing our opinion on the financial statements, but not for the purpose of
expressing an opinion on the effectiveness of the Agency’s internal control. Accordingly, we do not
express an opinion on the effectiveness of the Agency’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent or
detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement
of the Agency’s financial statements will not be prevented or detected and corrected on a timely basis. A
significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe
than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be deficiencies,
significant deficiencies, or material weaknesses. Given these limitations, during our audit we did not
identify any deficiencies in internal control that we would consider to be material weaknesses. However,
material weaknesses may exist that have not been identified.
Page 113 of 121
18
The Board of Commissioners
Community Redevelopment Agency
Crestview, Florida
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Agency’s financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts and grant agreements, non-compliance with which could have a direct and material effect on
the financial statements. However, providing an opinion on compliance with such provisions was not an
objective of our audit and, accordingly, we do not express such an opinion. The results of our tests
disclosed no instances of non-compliance that are required to be reported under Government Auditing
Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the Agency’s internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the Agency’s internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
June 21, 2022
Tallahassee, Florida
Page 114 of 121
19
MANAGEMENT LETTER
The Board of Commissioners
Community Redevelopment Agency
Crestview, Florida
Report on the Financial Statements
We have audited the financial statements of the City of Crestview Community Redevelopment Agency (the
Agency) as of and for the fiscal year ended September 30, 2021, and have issued our report thereon dated
June 21, 2022.
Auditor’s Responsibility
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America; the standards applicable to financial audits contained in Government Auditing Standards issued
by the Comptroller General of the United States, and Chapter 10.550, Rules of the Auditor General.
Other Reporting Requirements
We have issued our Independent Auditor’s Report on Internal Control over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with
Government Auditing Standards and Independent Accountant’s Report on examination conducted in
accordance with American Institute of Certified Public Accountants Professional Standards, AT-C
Section 315, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor
General. Disclosures in those reports and schedule, which are dated June 20, 2022, should be considered
in conjunction with this management letter.
Prior Audit Findings
Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective
actions have been taken to address findings and recommendations made in the preceding annual financial
audit report. There were no findings and recommendations made in the preceding annual financial audit
report.
Official Title and Legal Authority
Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal
authority for the primary government be disclosed in the Management Letter, unless disclosed in the notes
to the financial statements (see Note 1 of the Agency’s financial statements as of and for the year ended
September 30, 2021, for this information).
Page 115 of 121
20
The Board of Commissioners
Community Redevelopment Agency
Crestview, Florida
MANAGEMENT LETTER
Financial Condition and Management
Sections 10.554(1)(i)5.a. and 10.556(7), Rules of the Auditor General, require us to apply appropriate
procedures and communicate the results of our determination as to whether or not the Agency has met
one or more of the conditions described in Section 218.503(1), Florida Statutes, and identify the specific
condition(s) met. In connection with our audit, we determined that the Agency did not meet any of the
conditions described in Section 218.503(1), Florida Statutes.
Pursuant to Sections 10.554(1)(i)5.b. and 10.556(8), Rules of the Auditor General, we applied financial
condition assessment procedures. It is management’s responsibility to monitor the Agency’s financial
condition, and our financial condition assessment was based in part on representations made by
management and the review of financial information provided by same.
Section 10.554(1)(i)2., Rules of the Auditor General, requires that we communicate any recommendations
to improve financial management. In connection with our audit, we did not have any such
recommendations.
Special District Component Units
Section 10.554(1)(i)5.c., Rules of the Auditor General, requires, if appropriate, that we communicate the
failure of a special district that is a component unit of a county, municipality, or special district, to provide
the financial information necessary for proper reporting of the component unit, within the audited
financial statements of the county, municipality, or special district in accordance with Section 218.39(3)(b),
Florida Statutes. In connection with our audit, we determined that all special district component units
provided the necessary information for proper reporting in accordance with Section 218.39(3)(b), Florida
Statutes.
UNAUDITED
As required by Section 218.39(3)(c), Florida Statutes, and Section 10.554(1)(i)6, Rules of the Auditor
General, the CRA reported:
a. The total number of district employees compensated in the last pay period of the district’s fiscal year
was 0. The CRA has no employees but receives administrative staffing and support from the City.
b. The total number of independent contractors to whom non-employee compensation was paid in the
last month of the district’s fiscal year was 0.
c. All compensation earned by or awarded to employees, whether paid or accrued, regardless of
contingency was $0. As noted above, the CRA has no employees of its own.
d. All compensation earned by or awarded to non-employee independent contractors, whether paid or
accrued, regardless of contingency was $0.
e. Each construction project with a total cost of at least $65,000 approved by the district that is
scheduled to begin on or after October 1 of the fiscal year being reported. There were no construction
projects that began on or after October 1 in the fiscal year.
Page 116 of 121
21
The Board of Commissioners
Community Redevelopment Agency
Crestview, Florida
MANAGEMENT LETTER
f. A budget variance based on the budget adopted under Section 189.016(4), Florida Statutes, before
the beginning of the fiscal year being reported if the district amends a final adopted budget under
Section 189.016(6), Florida Statutes, was $24,210. A budget versus actual variance is presented on
page 11 of the financial statements.
Additional Matters
Section 10.554(1)(i)3., Rules of the Auditor General, requires us to communicate non-compliance with
provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred,
that have an effect on the financial statements that is less than material but warrants the attention of
those charged with governance. In connection with our audit, we did not note any such findings.
Purpose of this Letter
Our management letter is intended solely for the information and use of the Legislative Auditing
Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor
General, Federal and other granting agencies, the Honorable Mayor, and City Council and management,
and is not intended to be, and should not be, used by anyone other than these specified parties.
June 21, 2022
Tallahassee, Florida
Page 117 of 121
22
INDEPENDENT ACCOUNTANT’S REPORT ON COMPLIANCE WITH
SECTION 218.415, FLORIDA STATUTES
The Board of Commissioners
Community Redevelopment Agency
Crestview, Florida
We have examined the City of Crestview Community Redevelopment Agency (the Agency) compliance
with the requirements of Section 218.415, Florida Statutes, as of and for the year ended September 30,
2021, as required by Section 10.556(10)(a), Rules of the Auditor General. Management is responsible for
the Agency’s compliance with those requirements. Our responsibility is to express an opinion on the
Agency’s compliance based on our examination.
Our examination was conducted in accordance with attestation standards established by the American
Institute of Certified Public Accountants. Those standards require that we plan and perform the
examination to obtain reasonable assurance about whether the Agency complied, in all material respects,
with the requirements referenced above. An examination involves performing procedures to obtain
evidence about whether the Agency complied with the specific requirements. The nature, timing, and
extent of procedures selected depend on our judgement, including an assessment of the risk of material
non-compliance, whether due to fraud or error. We believe that the evidence we obtained is sufficient
and appropriate to provide a reasonable basis for our opinion.
Our examination does not provide a legal determination on the Agency’s compliance with specific
requirements.
In our opinion, the Agency complied, in all material respects, with the aforementioned requirements for
the year ended September 30, 2021.
This report is intended solely for the information and use of the Legislative Auditing Committee, members
of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, the Agency,
its management, and the Board of the City of Crestview, Florida, and is not intended to be, and should not
be, used by anyone other than these specified parties.
June 21, 2022
Tallahassee, Florida
Page 118 of 121
23
INDEPENDENT ACCOUNTANT’S REPORT ON COMPLIANCE WITH
SECTION 163.387(6) AND (7), FLORIDA STATUTES
The Board of Commissioners
Community Redevelopment Agency
Crestview, Florida
We have examined the Crestview Community Redevelopment Agency’s (the Agency) compliance with
Section 163.387(6) and (7), Florida Statutes, as of and for the year ended September 30, 2021, as required
by Section 10.556 (10)(a), Rules of the Auditor General. Management is responsible for the CRA’s
compliance with those requirements. Our responsibility is to express an opinion on the CRA’s compliance
based on our examination.
Our examination was conducted in accordance with attestation standards established by the American
Institute of Certified Public Accountants. Those standards require that we plan and perform the
examination to obtain reasonable assurance about whether the CRA complied, in all material respects,
with the requirements referenced above. An examination involves performing procedures to obtain
evidence about whether the CRA complied with the specified requirements. The nature, timing, and
extent of the procedures selected depend on our judgment, including an assessment of the risks of
material non-compliance, whether due to fraud or error. We believe that the ev idence we obtained is
sufficient and appropriate to provide a reasonable basis for our opinion.
Our examination does not provide a legal determination of the CRA’s compliance with specified
requirements.
In our opinion, the Agency complied, in all material respects, with the aforementioned requirements for
the year ended September 30, 2021, except for the following:
2021-1 Budget Submission
Criteria: Section 163.387(6)(b), Florida Statutes requires the Agency to submit its original budget and any
subsequent budget amendments to the County in which the CRA is located within 10 days of adoption.
Condition: The Agency did not submit its budget and budget amendments to Okaloosa County Board of
County Commissioners within 10 days of adoption.
Effect: By not submitting the Agency’s budget or any budget amendments within 10 days of adoption,
the Agency is not in compliance with Section 163.387(6)(b), Florida Statutes.
Recommendation: We recommend the Agency submit its budget and any subsequent amendments to
Okaloosa County Board of County Commissioners within 10 days of adoption.
Page 119 of 121
24
The Board of Commissioners
Community Redevelopment Agency
Crestview, Florida
INDEPENDENT ACCOUNTANT’S REPORT ON COMPLIANCE WITH
SECTION 163.387(6) AND (7), FLORIDA STATUTES
Management’s Response: This statute is fairly new, and CRA was not knowledgeable of the 10-day time
frame until that period had lapsed. Management will ensure the budget is submitted to the County within
the required time limit going forward.
This report is intended solely for the information and use of the Agency and the Auditor General, State of
Florida, and is not intended to be and should not be used by anyone other than these specified parties.
June 21, 2022
Tallahassee, Florida
Page 120 of 121
Page 121 of 121