City of jacksonville Annual Comprehensive Financial Report
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The City of Jacksonville, Florida's Annual Comprehensive Financial Report for fiscal year ended September 30, 2021 was prepared by the Department of Finance's Accounting Division and contains the city's complete financial statements, audit reports, and financial analysis. The document includes an independent auditors' report, management's discussion and analysis, and detailed fund financial statements for both citywide and governmental fund operations. No specific budget figures or policy decisions are detailed in this table of contents excerpt.
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City of jacksonville Annual Comprehensive Financial Report Fiscal Year ENDED September 30, 2021 -- 1 of 389 -- C C I IT TY Y O OF F J J A AC CK KS SO ON NV VI IL LL LE E , , F F L LO OR RI ID DA A A A N NN NU UA AL L C C O OM MP PR RE EH HE EN NS SIIV VE E F F IIN NA AN NC CIIA AL L R R E EP PO OR RT T F F O OR R T TH HE E F F IIS SC CA AL L Y Y E EA AR R E E N ND DE ED D S S E EP PT TE EM MB BE ER R 3 30 0,, 2 20 02 21 1 P P R RE EPPA AR RE ED D B BY Y T TH HE E D D E EPPA AR RT TM ME EN NT T O OFF F F IIN NA AN NC CE E A A C CC CO OU UN NT TIIN NG G D D IIV VIISSIIO ON N -- 2 of 389 -- DRAFT (This page is intentionally left blank.) -- 3 of 389 -- City of Jacksonville, Florida Annual Comprehensive Financial Report For the Fiscal Year Ended September 30, 2021 TABLE OF CONTENTS INTRODUCTORY SECTION LETTER OF TRANSMITTAL .............................................................................................. i – xvi CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING ............................................................................................ xviii ORGANIZATIONAL CHART ................................................................................................... xix LISTING OF CITY OFFICERS, CONSTITUTIONAL OFFICEHOLDERS, AND CITY COUNCIL OFFICIALS AND STAFF ....................................................... xx - xxi FINANCIAL SECTION INDEPENDENT AUDITORS’ REPORT ................................................................................1 – 3 INDEPENDENT AUDITORS’ 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 .......................................................................................................4 – 5 SCHEDULE OF FINDINGS .....................................................................................................6 – 8 MANAGEMENT'S DISCUSSION AND ANALYSIS ........................................................... 9- 24 BASIC FINANCIAL STATEMENTS CITYWIDE FINANCIAL STATEMENTS Statement of Net Position ..............................................................................................................26 Statement of Activities ...................................................................................................................27 FUND FINANCIAL STATEMENTS Balance Sheet - Governmental Funds .................................................................................... 32 - 33 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position .....................................................................................35 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds ........................................................................................................ 36 - 37 -- 4 of 389 -- FINANCIAL SECTION (CONTINUED) Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds to the Statement of Activities .................................38 Statement of Net Position - Proprietary Funds ...................................................................... 40 - 41 Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary Funds .....................................................................................................................43 Statement of Cash Flows - Proprietary Funds ....................................................................... 44 - 47 Statement of Fiduciary Net Position ..............................................................................................50 Statement of Changes in Fiduciary Net Position ...........................................................................51 MAJOR COMPONENT UNITS Combining Statement of Net Position – Component Units ................................................... 54 - 55 Combining Statement of Activities – Component Units ...................................................... 56 - 57 NOTES TO THE FINANCIAL STATEMENTS ............................................................. 59 -161 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - General Fund .........................................................................................164 Notes to Required Supplemental Information ................................................................... 165 - 166 Schedule of Contributions - City of Jacksonville Retirement System.................................................................................167 Schedule of Contributions - City of Jacksonville – Florida Retirement System .................................................................168 Schedule of Contributions - City of Jacksonville Beach – Firefighters’ Retirement System..............................................169 Schedule of Changes in Net Pension Liability - City of Jacksonville Retirement System........................................................................ 170 -172 Schedule of Changes in Net Pension Liability - Florida Retirement System and Jacksonville Beach Firefighters .................................. 174 -176 Schedule of Money-Weighted Rate of Return City of Jacksonville Retirement System.................................................................................177 -- 5 of 389 -- FINANCIAL SECTION (CONTINUED) Notes to Required Supplementary Information - City of Jacksonville Retirement System....................................................................... 178 - 179 Schedule of the City’s Proportionate Share of Net Pension Liability ..............................................................................................................180 Schedule of Contributions - Police and Fire Retirement System ........................................................................................181 Schedule of Contributions - Police and Fire Pension Fund, Senior Staff Voluntary Retirement Plan ................................182 Schedule of Changes in Net Pension Liability - Police and Fire Retirement System .............................................................................. 184 - 185 Schedule of Changes in Net Pension Liability - Police and Fire Pension Fund, Senior Staff Voluntary Retirement Plan ...................... 186 - 187 Schedule of Money-Weighted Rate of Return Police and Fire Retirement System ........................................................................................188 Schedule of City Contributions - Employment Benefits Other than Pension (OPEB) Other than Police and Fire ....................189 Schedule of City Contributions - Employment Benefits Other than Pension (OPEB) Police and Fire ......................................190 Schedule of Changes in Net OPEB Liability - Employment Benefits Other than Pension (OPEB) Other than Police and Fire ....................191 Schedule of Changes in Net OPEB Liability - Employment Benefits Other than Pension (OPEB) Police and Fire ......................................192 Notes to Required Supplementary Information - Employment Benefits Other than Pension (OPEB) Other than Police and Fire ..........193 – 195 Notes to Required Supplementary Information - Employment Benefits Other than Pension (OPEB) Police and Fire ............................196 – 198 -- 6 of 389 -- FINANCIAL SECTION (CONTINUED) COMBINING INDIVIDUAL FUND STATEMENTS AND SCHEDULES GOVERNMENTAL FUNDS Combining Balance Sheet - Nonmajor Governmental Funds ...................................... 204 - 211 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds ............................... 212 - 219 Budgetary Comparison Schedules - Nonmajor Governmental Funds ......................... 220 - 227 PROPRIETARY FUNDS Combining Statement of Net Position - Nonmajor Enterprise Funds .......................... 230 - 231 Combining Statement of Revenues, Expenses and Changes in Fund Net Position - Nonmajor Enterprise Funds ................................ 232 - 233 Combining Statement of Cash Flows - Nonmajor Enterprise Funds ........................... 234 - 237 INTERNAL SERVICE FUNDS Combining Statement of Net Position - Internal Service Funds .................................. 240 - 241 Combining Statement of Revenues, Expenses and Changes in Fund Net Position - Internal Service Funds ........................................ 242 - 243 Combining Statement of Cash Flows - Internal Service Funds ................................... 244 - 247 FIDUCIARY FUNDS PENSION TRUST FUNDS Combining Statement of Fiduciary Net Position - Pension Trust Funds .........................250 Combining Statement of Changes in Fiduciary Net Position - Pension Trust Funds ....................................................................................................251 CUSTODIAL FUNDS Combining Statement of Fiduciary Net Position - Custodial Funds ...........................................................................................................252 Combining Statement of Changes in Fiduciary Net Position - Custodial Funds ...........................................................................................................253 -- 7 of 389 -- FINANCIAL SECTION (CONTINUED) COMPONENT UNITS Balance Sheet – Jacksonville Housing Finance Authority ....................................................256 Statement of Revenues, Expenditures and Changes in Fund Balances - Jacksonville Housing Finance Authority...........................................................................257 SUPPLEMENTAL INFORMATION Schedule of Long-Term Bonded Indebtedness ............................................................ 260 - 265 Schedule of Projected Debt Outstanding ..................................................................... 266 - 269 Schedule of Debt Service Requirements to Maturity - Governmental Activities Revenue Bonds Supported by General Fund ......................................................... 270 - 274 Schedule of Debt Service Requirements to Maturity - Governmental Activities Special Revenue Bonds Supported by Better Jacksonville Plan Revenues ........... 276 - 278 Schedule of Debt Service Requirements to Maturity - Governmental Activities Revenue Bonds Supported by Better Jacksonville Plan Revenues ........................ 280 - 283 Schedule of Debt Service Requirements to Maturity - Governmental Activities Notes Payable Supported by Better Jacksonville Plan Revenues ....................................284 Schedule of Debt Service Requirements to Maturity - Governmental Activities Special Revenue Bonds and Notes Payable from Internal Service Operations ..... 286 - 291 Schedule of Debt Service Requirements to Maturity - Payable from Enterprise Funds .............................................................................. 292 - 294 Schedule of Self Insurance - Workers Compensation ................................................. 296 - 297 Schedule of Self Insurance – General Liability ........................................................... 298 - 299 Balance Sheet - General Fund by subfund .............................................................................300 Schedule of Revenues, Expenditures and Changes in Fund Balances - General Fund by subfund ..................................................................................................301 -- 8 of 389 -- STATISTICAL SECTION (UNAUDITED) Table of Contents .........................................................................................................................303 Financial Trends................................................................................................................. 304 - 315 Net Position by Components .................................................................................... 306 - 307 Changes in Net Position ............................................................................................ 308 - 311 Fund Balances, Governmental Funds .................................................................................312 Changes in Fund Balances, Governmental Funds .................................................... 314 - 315 Revenue Capacity .............................................................................................................. 317 - 325 Assessed Value and Estimated Actual Value of Taxable Property .......................... 318 - 319 Direct and Overlapping Property Tax Rates .......................................................................320 Principal Property Taxpayers .................................................................................... 322 - 323 Property Tax Levies and Collections ........................................................................ 324 - 325 Debt Capacity..................................................................................................................... 327 - 337 Ratios of Outstanding Debt by Type to Personal Income and Per Capita ................ 328 - 329 Direct and Overlapping Governmental Activities Debt......................................................330 Legal Debt Margin Information ..........................................................................................330 Pledged Revenue Coverage ...................................................................................... 332 - 337 Demographic and Economic Information .......................................................................... 338 - 340 Demographic and Economic Statistics ...............................................................................339 Principal Employers ............................................................................................................340 Operating Information ....................................................................................................... 342 - 349 Personnel Distribution by Department Classified Positions ..............................................343 Operating Indicators by Function/Program .............................................................. 344 - 347 Capital Asset Statistics by Function/Program........................................................... 348 - 349 COMPLIANCE SECTION Management Letter Required by Chapter 10.550 of the Rules of the Auditor General………………………......………….…………..............................................352 - 353 Independent Accountant’s Report on Compliance with Section 218.415, Florida Statutes..…………………………………………………………………………................354 Independent Accountant’s Report on Compliance with Sections 365.172(10) and 365.173(2)(d), Florida Statutes..…………………………………………………………...355 Independent Accountant’s Report on Compliance with Sections 28.35 and 28.36, Florida Statutes..…………………………………………………………………………………....356 Independent Accountant’s Report on Compliance with Section 61.181, Florida Statutes..…………………………………………………………………………………....357 -- 9 of 389 -- DRAFT LETTER OF TRANSMITTAL i -- 10 of 389 -- DRAFT ii -- 11 of 389 -- DRAFT September 30, 2022 iii -- 12 of 389 -- DRAFT (This page is intentionally left blank.) -- 13 of 389 -- v September 30, 2022 The Honorable Mayor Lenny Curry Members of the City Council Citizens of Jacksonville INTRODUCTION The Annual Comprehensive Financial Report of the City of Jacksonville, Florida (the City) for the fiscal year ended September 30, 2021 is hereby submitted. The financial reporting entity includes all funds of the consolidated government of the City of Jacksonville and Duval County, as well as all of its component units. Component units are legally separate organizations for which the City is financially accountable and, for financial statement purposes, are either blended with the activities of the City or discretely presented. Responsibility for both the accuracy of the data and the completeness and fairness of its presentation, including all disclosures, rests with the City. Management believes the data, as presented, is accurate in all material respects. It is presented in a manner designed to set forth the financial position and the results of operations of the City on a government-wide and fund basis. Disclosures necessary to enable the reader to gain an understanding of the City’s financial activities are included. Internal controls are designed to provide reasonable assurance that the financial statements are free from material misstatement. Management is primarily responsible for internal control. There are inherent limitations of internal control due to cost/benefit considerations of providing the control as a certain degree of risk would be unavoidable due to the cost of providing the control. Also, effectiveness of control procedures may be diminished due to collusion where several employees conspire to circumvent the control. As part of the independent audit process, the Chief Financial Officer issues a letter of representation that attests to his responsibility to establish and maintain effective internal control over financial reporting among other things. The letter also acknowledges his responsibility for the design and implementation of programs and controls to provide reasonable assurance that fraud is prevented and detected. Management acknowledges that they have no knowledge of misstatements in the financial statements of the City or of any fraud or suspected fraud that could have a material effect on the financial statements. -- 14 of 389 -- vi The City’s Independent Auditor, Carr, Riggs & Ingram, LLC (CRI), issued an opinion letter as required by City Charter, Section 5.11; Chapter 218.39, Florida Statutes and Chapter 10.550 Rules of the Florida Auditor General, which is contained in the Financial Section of this document. CRI, based on its audit and the reports of component unit auditors, has opined that the financial statements present fairly, in all material respects, the financial position and changes in financial position of the City as of and for the year ended September 30, 2021. Generally Accepted Accounting Principles (GAAP) requires that management provide a narrative introduction, overview and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City of Jacksonville’s MD&A can be found immediately following the report of the independent certified public accountants. PROFILE OF THE CONSOLIDATED GOVERNMENT Governmental Framework The City of Jacksonville was consolidated with Duval County in 1968 to streamline government and eliminate the cost of duplicative City and County services. Four municipalities were not consolidated: Atlantic Beach, Jacksonville Beach, Neptune Beach and Baldwin. The City has entered into interlocal agreements with the unconsolidated entities to provide cost effective services to residents in unconsolidated Duval County. The City operates under a strong Mayor/City Council form of government. The 19-member City Council is made up of 14 district council members and 5 at-large council members. These 20 elected officials stand for election every four years (having no mid-term elections) and are subject to a two-term limitation. The Charter of the Consolidated Government of the City of Jacksonville provides for three branches: Executive, Legislative and Judicial. The Executive branch includes the Office of the Mayor and Constitutional officers: Sheriff, Tax Collector, Property Appraiser, Supervisor of Elections and the Duval County School Board. The Legislative branch includes the City Council and a group of standing committees. There is also a Council Auditor and Council Secretary. The Judicial branch includes: the Circuit Court, County Court, Clerk of the Circuit Court, State Attorney, Public Defender and Medical Examiner. The independent Office of Inspector General provides additional oversight to promote increased accountability, integrity, and oversight of the City. Certain governmental entities are organized as independent authorities and/or commissions in city government, which include: Jacksonville Aviation Authority (JAA) Jacksonville Electric Authority (JEA- electric, water and wastewater utilities) Jacksonville Port Authority (JPA) Jacksonville Transportation Authority, (JTA- operates the mass transit system) Jacksonville Public Library Kids Hope Alliance (KHA) Each authority/commission is subject to annual budget submission to the City and approval by the City Council. -- 15 of 389 -- vii BUDGET AND GOVERNMENTAL FUNDS Florida Law, the City Charter and the City's Ordinance Code establish provisions that regulate the City’s budget, tax levies and appropriations. The Mayor is required to submit a proposed budget to the City Council by July 15th of each year that is balanced and identifies revenues and other financial resources that are anticipated to be available for appropriations. The Mayor also makes recommendations for appropriations, expenditures and uses of financial resources, and otherwise presents concise policy direction and guidance for the continuing financial operation of the City. Prior to the beginning of each new fiscal year, the City Council adopts, by ordinance, a balanced budget. The adopted budget sets the legal level of control at the fund level by department and object account. The City, additionally, adopted a Municipal Ordinance Code Policy that provides transfer authority to the mayor, without City Council approval, within an individual fund to include unique chart of accounts combinations if the total transferred funds for a specific purpose, project or issue is under $500,000 during the fiscal year. These transfers are reported to the Finance Committee on a quarterly basis. The City's accounting system is organized and operated on a fund basis. A fund is defined as an independent fiscal and accounting entity with a self-balancing set of accounts. The types of funds to be used are determined by generally accepted governmental accounting principles, and the number of individual funds established is determined by sound financial administration and the statutory and ordinance requirements of the Council. Governmental funds with legally adopted annual budgets include the General Fund and certain Special Revenue Funds including the Concurrency Management, Air Pollution Control and Monitoring, Tourism Development, Transportation, Budgeted General Government, Emergency 911, Tax Increment Districts, and Kids Hope Alliance Funds. CAPITAL BUDGET Capital Improvement Program (CIP) and Debt Affordability Model The City annually approves a 5-year Capital Improvement Program (CIP) that anticipates a specific level of borrowing and is financially feasible. Concurrent with the submission of the 5-year CIP, the City reviews its Debt Affordability Model which a) looks backward 5 years to compare history; b) measures the City’s performance against self-imposed ratio targets and maximum/minimum limits; c) compares the City to national Aa/AA category norms; and d) projects the City’s performance within targets/limits for the next 5 years. BUDGET APPROPRIATIONS FY2020 - FY2022 Change from Change from Fund Types FY2020 FY2021 FY2022 FY2020 to FY2021 FY2021 to FY2022 General Fund 1,377,635,370 1,449,985,211 1,531,720,546 5.25% 5.64% Special Revenue 363,900,821 335,012,866 394,106,896 -7.94% 17.64% Capital Projects 134,735,979 194,871,277 384,003,207 44.63% 97.05% Enterprise 249,159,875 260,191,463 270,836,450 4.43% 4.09% Internal Service 599,248,162 704,632,261 856,935,689 17.59% 21.61% Trust & Agency 16,620,528 16,645,513 20,356,150 0.15% 22.29% Total 2,741,300,735 $ 2,961,338,591 $ 3,457,958,938 $ 8.03% 16.77% -- 16 of 389 -- viii Capital Improvement Plan Status of Ongoing Major Projects Pollution Remediation and Ash Site Settlement During 2004-2005, the City was able to settle a long -standing class action suit regarding land value diminution and personal injury that arose out of a solid waste practice, prior to the early 1970’s, of using incinerator ash mixed with soil as fill in low lying areas. The City agreed to pay $25 million and to allow the plaintiffs to pursue the City’s then-insurance providers related thereto. In FY 2009, the City issued variable debt from the Debt Management Fund and is amortizing the remaining $22.5 million over a 12-year period. The City also negotiated (and finalized a settlement agreement in the fall of 2007) with the U.S. Environmental Protection Agency (EPA) regarding the cleanup of the 3,194 sites that make up the ash remediation project. A total of 1,016 parcels have been tested and do not require remediation. A total of 231 parcels are labeled as Institutional control only since they are sites that are covered by an impervious surface that acts as the protective cap. Any redevelopment of these 231 sites that removes the existing impervious surface may trip remediation since the ash status of the materials below the existing cap are unknown. A total of 1,848 sites have been remediated to-date by removing up to 2.0- feet of ash impacted materials, and the placement of “certified” clean backfill materials back to the original grade surface. In many instances, where ash exceedances are below the 2.0-foot depth level after remediation, a protective orange mesh barrier is placed in the excavation before backfilling as an added engineering control. The Lonnie Miller Park and remnant parcels composed of 31 large commercial and industrial parcels are scheduled to start remediation in 2021. A total of 68 sites require remediation, but the City has been unable to obtain the necessary access agreement from the owner to remediate the parcel. The City has spent $186 million on cash remediation and has accrued $30 million as a liability at the end of FY 2021. The City has several other pollution remediation sites county wide that are in various stages of clean-up and has spent $9.8 million on those sites. The City has accrued an additional $58 million liability for future years estimated remediation expense. The Capital Improvement Plan identifies the following: Program Area FY21-22 FY22-23 FY23-24 FY24-25 FY25-26 Beyond 5 Environmental / Quality of Life 3,050,000 $ 2,250,000 $ 4,592,000 $ 1,000,000 $ 9,000,000 $ 5,383,000 $ Parks / Preservation Land / Wetland 88,299,410 78,700,000 15,800,000 21,750,000 43,500,000 67,599,050 Public Facilities 109,093,190 78,697,310 35,831,894 12,313,976 10,071,972 437,690,965 Public Safety 29,518,864 8,700,000 8,700,000 6,700,000 8,700,000 41,300,000 Roads / Infrastructure / Transportation 257,505,688 234,025,269 192,270,000 129,680,000 83,545,800 121,430,654 Solid Waste* 14,896,650 2,089,000 1,000,000 5,945,715 12,273,563 57,600,000 Storm Water / Drainage* 10,762,013 10,000,000 10,000,000 10,000,000 10,000,000 41,845,498 513,125,815 $ 414,461,579 $ 268,193,894 $ 187,389,691 $ 177,091,335 $ 772,849,167 $ * Most projects are budgeted in the enterprise funds -- 17 of 389 -- ix Better Jacksonville Plan The Better Jacksonville Plan is a comprehensive undertaking by the City to provide: road, transportation and infrastructure improvements, park and environmental improvements, economic development and public facilities. The Plan was approved by the City in July 2000. Improvements include projects such as: road resurfacing, drainage, sidewalks, bike paths and landscaping, safety improvements at grade crossings, environmental land preservation, parks, and environmental clean-up. Major projects included improvements to the Jacksonville Zoo and Cecil Field, construction of a new main library and library branch improvements, an arena, a baseball park and a county courthouse. The City has spent over $2 billion on the plan and most projects have been completed. FUTURE PROSPECTS: ECONOMIC ENVIRONMENT AND MAYORAL HIGHLIGHTS ECONOMIC ENVIRONMENT: JACKSONVILLE MSA Jacksonville was founded in 1832 and consolidated with Duval County in 1968 and has an estimated city/county population of 1,016,809 living within an 840.1 square mile area. Within Duval County there are four separate municipalities (Jacksonville Beach, Neptune Beach, Atlantic Beach and Baldwin) representing a population of 46,247 within 15.9 square miles. The Jacksonville Metropolitan Statistical Area (MSA) consists of five counties: Duval, Clay, St. Johns, Nassau, and Baker, which have a total estimated population of 1,587,892. Selected Economic and Statistical Data The combined City/County exhibits the following characteristics: Florida 2018 2019 2020 2021 2021 Population (in thousands) 952.9 970.7 982.1 1,016.8 21,899 City Assessed Valuation (in billions) 53.2 57.3 62.2 66.9 2,264 *Dollar Value of Building Permits (in millions) 1,869 2,823 2,423 2,817 N/A Employment - MSA (in thousands) 763.5 773.6 742.8 782.4 9,995 Unemployment Rate 3.0% 2.7% 3.1% 3.7% 3.9% Median Household Income - MSA 51,296 55,832 57,703 58,415 59,227 * 2021 updated estimates were not available at the time of this report. ECONOMIC SNAPSHOT -- 18 of 389 -- x Discussion: The consolidated city of Jacksonville is the most populated city in Florida based on the latest Census. It is anticipated that the city’s population will grow significantly over the next few years reflecting the general economic recovery, in-migration of businesses and the growth of the port due to increased local economic activity. Assessed valuation has increased. The value of building permits has improved significantly indicating a housing and economic growth for the City. It is difficult to forecast the rate of economic improvement, but we do anticipate continued improvement in assessed values in the near future. Unemployment continues to decline and MSA employment continues to increase; both very positive trends. Discussion: Jacksonville is the economic driver for the seven-county, Northeast Florida region of approximately 1.5 million residents. Jacksonville has a broad base of non-agricultural employment and is home to a qualified and diverse labor force. Jacksonville’s central location with access to road, rail, sea, and air transportation has made it the international hub of the Southeast. Florida is the nation’s third most populous state, and more than 60 million U.S. consumers live within a one-day truck-drive of Jacksonville’s port. The Jacksonville Port Authority (JAXPORT) terminals are serviced by three U.S. interstates (I-10, I-95 and I-75), and the city has 40 daily train departures via three railroads: CSX, Norfolk Southern, and Florida East Coast railway. JAXPORT is one of the largest ports on the South Atlantic seaboard. In 2021, 1.407 million twenty- foot equivalent units and 616,000 total vehicles moved through the Port. Among JAXPORT’s major projects is a Harbor Deepening effort which will add seven feet of water depth for larger container cargo ships and has the potential to significantly increase container business. JAXPORT’s internationally ranked foreign trade zone spans more than 5,000 square miles in Northeast Florida, and helps shippers save time and money by streamlining customs clearance. Financial services, trade, transportation and utilities are also significant employers in Jacksonville. It is anticipated that these segments will also grow as the port grows. Segment Trade, Transportation, and Utilities 22.47% Education and Health Services 15.32% Professional and Business Services 15.92% Leisure and Hospitality 10.41% Government 10.55% Financial Activities 9.65% Construction 6.62% Manufacturing 4.35% Other Services 3.47% Information 1.20% Mining and Logging 0.05% * Source: U.S. BLS, Current Employment Statistics INDUSTRY SEGMENTS -- 19 of 389 -- xi Growth/Future Prospects Jacksonville is the gateway to Florida and to world trade on the east coast. It is also an important location for the country’s military and our nation’s defense. Jacksonville is ideally positioned for economic expansion due to its diverse economic base, expressway system, rail service and the port. 10 LARGEST EMPLOYERS IN JACKSONVILLE, FLORIDA Discussion: The above table indicates that more than 93% of those employed by the largest employers are from five segments: medical (31%), military (28%), technology (15%) public education (12%), and banking/financial services (7%). It is anticipated that all of these segments will continue to grow top line revenue and hire new employees. Employer Product or Service Employees Naval Air Station Jacksonville U.S. Navy 20,000 Amazon Technology 16,000 Duval County Public Schools Public Education 13,110 Baptist Health Health Care 12,603 Naval Station Mayport U.S. Navy 10,030 Mayo Clinic Multi-Specialty Health Care 8,848 Bank of America Merrill Lynch Banking and Investments 8,000 City of Jacksonville Municipal Government 7,639 UF Health of Jacksonville Health Care 6,600 Florida Blue Health Insurance 5,700 -- 20 of 389 -- DRAFT -- 21 of 389 -- xiii DEBT AND INVESTMENT ACTIVITIES Debt Administration The City’s Debt Management Policy promotes effective and efficient management of the City’s debt program. It provides a framework for the structuring and monitoring of debt issuances and emphasizes prudent long-term financial planning. The Policy establishes a Debt Oversight Committee and a Debt Affordability model which uses measures accepted within the credit community. The City's sound financial condition is evidenced by the continuation of its long-held high-grade bond ratings on indebtedness from the major credit rating services. Moody's S&P Fitch Issuer Credit Rating Aa3 AA AA Covenant Bonds A1 AA AA- Capital Improvement Revenue Bonds A1 n/a AA BJP Sales Tax Bonds Aa3 A+ A+ BJP Transportation Revenue Bonds A1 AA- AA- -- 22 of 389 -- xiv Investment Performance – Both Active and Major Pension Programs The City is of the opinion that the interest of its citizens can best be served by actively managing City funds through the assumption of a prudent level of risk. Investment objectives of the Operating Fund (in order of priority) are: safety of capital, liquidity and income realization in excess of stated benchmarks. The City’s Investment Policy also establishes an Investment Committee to help manage the funds. The investment objectives of the General Employee Pension Fund and the Police and Fire Pension Fund are established by their Boards of Trustees and governed by their Investment Policy Statements for the purpose of providing long term benefits to the Fund’s participants and their beneficiaries. FY 2021 FY 2020 FY 2019 FY 2018 FY 2017 FY 2016 3 - Year Average 5 - Year Average Operating Fund (All Fixed Income)* 1.01 4.11 5.54 0.70 1.28 3.07 3.54 2.51 Policy Benchmark (Weighted Avg Benchmark)** -0.16 4.54 6.36 -0.06 0.44 2.59 3.54 2.19 Core Plus 1.76 7.3 10.15 -0.03 2.60 7.31 6.35 4.29 Intermediate 0.3 7.26 8.14 -0.46 0.36 3.30 5.17 3.05 Limited Duration 0.71 4.14 4.38 0.85 1.04 1.75 3.06 2.21 Extended Cash 0.85 1.98 3.08 1.32 1.25 0.96 1.97 1.69 General Employee Pension Fund ( Diversified ) 21.76 6.42 1.36 7.87 15.21 9.93 9.51 10.3 Policy Benchmark (Weighted Avg Benchmark)** 22.75 2.34 3.1 8.28 11.50 10.55 9.00 9.23 Domestic Equity Composite 40.57 10.64 1.47 16.53 20.79 11.66 16.43 17.31 Total Int'l Equity 23.56 12.8 -3.57 1.57 27.11 12.74 10.36 11.65 Total Fixed Income 1.19 5.28 6.61 -0.64 4.57 5.12 4.33 3.37 Total Real Estate 15.51 -7.11 1.97 8.14 5.13 9.78 3.04 4.46 Real Assets (M LPs/Timber) 46.65 -24.51 -6.77 8.00 2.26 11.09 1.06 2.65 Police and Fire Pension Fund ( Diversified ) 23.92 8.58 2.41 8.44 14.55 10.98 11.40 11.42 Policy Benchmark (Weighted Avg Benchmark)** 23.03 5.75 2.99 8.33 12.16 10.34 10.45 10.43 Domestic Equity Composite 36.17 12.61 -3.94 16.87 19.73 13.47 16.56 17.24 Total Int'l Equity 24.40 14.31 9.62 1.64 26.61 12.05 11.15 12.06 Total Fixed Income 2.83 7.81 3.93 -0.29 2.29 5.69 6.74 4.39 Total Real Estate 14.14 1.59 -9 8.46 8.08 9.83 6.60 7.27 M LP/Energy 0.00 41.96 2.54 6.61 -1.20 14.53 0.00 0.00 Major Indicies Russell 3000 Composite 31.88 15.00 2.92 17.58 18.71 14.96 16.00 16.85 M SCI EAFE Index 26.29 0.93 -0.82 3.25 19.65 7.06 8.13 9.33 NCREIF Property Index 12.15 2.00 6.24 7.16 6.89 9.22 6.72 6.84 Barclays Capital U.S. Aggregate Bond Index -0.90 6.99 10.3 -1.22 0.07 5.19 5.36 2.94 Barclays Capital U.S. Gov/Credit Intermediate -0.40 6.32 8.17 -0.96 0.23 3.52 4.63 2.60 ICE BofA M L U.S. Corp & Gov 1-3 Yrs 0.35 3.74 4.65 0.28 0.65 1.32 2.89 1.92 ICE BofA M L U.S. Treasury Bills 0-1 Year 0.12 2.07 0.92 1.51 0.70 0.48 1.47 1.32 FTSE Treasury Bill-3 M onth 0.06 1.02 2.36 1.57 0.64 0.2 1.14 1.13 NA = Specific consolidation / strategy did not exist at that time *excludes depository accounts INVES TMENT PORTFOLIO PERFORMANCE September 30, 2021 (Reported in Percentage and Gross of Investment M anagement Fees) -- 23 of 389 -- xv (continued) The previous schedule provides the investment performance for the City’s Active Portfolio, the City Retirement Systems (covering both General employees and Corrections Officers) and the Police and Firefighter Pension Plan. LONG-TERM FINANCIAL POSITION Jacksonville will benefit from the recovering economy and the growth of the region. The administrations’ commitment to efficient and effective government, conservative investment policies and careful debt management will provide for a prosperous city over the long run. REPORTING ACHIEVEMENT The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Jacksonville for its Annual Comprehensive Financial Report for the fiscal year ended September 30, 2020. The Certificate of Achievement is a prestigious national award, recognizing conformance with the highest standards for the preparation of state and local government financial reports. Barclays Capital Aggregate Bond Barclays Capital U.S. Govt/Credit Intermediate Barclays Capital U.S. Universal *Diversifying Assets Index 15.00% ICE BofA ML 1-3 yr US Corp/Govt Bond ICE BofA ML 0-1 yr US T reasury Bond FT SE 3-month T reasury Bill Russell 1000 Stock Russell 2000 Stock Russell 2500 Stock Russell 3000 Stock MSCI AC World ex USA MSCI EAFE/ACWI Stock MSCI Emerging Markets NCREIF Property NCREIF ODCE Index[M] S&P 500 S&P MLP T otal Return S&P/LST A Leverage Loan Index T hompson Policy Index NCREIF T imberland Real Asset Policy 90 Day U.S. T reasury Bill 0.00% 0.00% 0.00% 0.00% 15.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 20.00% 0.00% **Index compositions are subject to change over time as target allocations change within the portfolios. 0.00% Benchmarks for the General Employee and Police and Fire Pension funds are calculated by RVK while the Operating Portfolio Policy Benchmark is derived from BNY Mellon custody reporting data. 0.00% 0.00% 0.00% 15.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 5.00% Police and Fire Operating Fund GEPF 20.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 15.50% 0.00% 0.00% 35.00% 1.00% 0.00% 0.00% 4.00% 0.00% 5.00% 40.00% 15.00% 0.00% 0.00% 0.00% 5.50% 0.00% *Includes private equity, private credit, equity or debt long-short, event-driven, relative value, or tactical trading strategies, MLPs, and real assets. T he active Diversifying Assets Index is calculated monthly using beginning of month investment weights applied to each corresponding primary benchmark 39.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 30.00% 0.00% 0.00% 23.00% **Benchmark Composition: -- 24 of 389 -- -- 25 of 389 -- DRAFT (This page is intentionally left blank.) -- 26 of 389 -- Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Jacksonville Florida For its Annual Comprehensive Financial Report For the Fiscal Year Ended September 30, 2020 Executive Director/CEO -- 27 of 389 -- *CITY COUNCIL 19 Members (14 Elected by Districts, 5 At Large) Finance Committee Land Use & Zoning Committee Neighborhoods, Community Svcs, Public Health & Safety Committee Transportation, Energy & Utilities Committee Rules Committee Auditor Council Secretary General Counsel Various Boards, Authorities, Councils and Commissions approved by City Council *Mayor Neighborhoods Department Parks, Recreation & Community Services Department Fire & Rescue Department Finance & Administration Department Various Boards, Commissions and Offices T H E V O T E R S E L E C T *Sheriff *Tax Collector *Property Appraiser *Duval County School Board *Supervisor of Elections *Circuit Court *County Court *Clerk of Circuit Court *State Attorney *Public Defender ***Medical Examiner ORGANIZATIONAL CHART City of Jacksonville, Florida L E G I S L A T I V E E X E C U T I V E J U D I C I A L*Elected Officials ***Appointed by the Governor Planning & Development Department Office of Economic Development Employee Services Department Public Works Department CONSTITUTIONAL OFFICERS Military Affairs & Veterans Department ***Health Department JUDICIAL Ethics Office S T A N D I N G C O M M I T T E E S Chief of Staff Office of Public Affairs Inspector General’s Office Chief Administrative Officer Deputy Chief Administrative Officer -- 28 of 389 -- xx City of Jacksonville, Florida City Officers and Constitutional Officeholders Lenny Curry, Mayor City Officers Brian Hughes…………………………………………Chief Administrative Officer Dr. Charles Moreland……………………….Deputy Chief Administrative Officer Jason Teal, Esq………………………………………………….General Counsel William Killingsworth..................................Director, Planning and Development John Pappas………………………………………………Director, Public Works Daryl Joseph…………….…Director, Parks, Recreation and Community Services Bryan Mosier…….………………………………………. Director, Neighborhoods Kirk Wendland.……………….…………………Economic Development Officer Patrick “Joey” Greive….……………..Director, Finance & Administration/CFO William Spann………………………………Director, Military Affairs & Veterans Diane Moser……………………………………….. Director, Employee Services Keith Powers……………………………………………Director, Fire and Rescue Angela Moyer…………………………………………………........Budget Officer Marcia Saulo, CPA.………………………………………………….Comptroller Paul Barrett….…………………………………………………………..Treasurer Constitutional Officeholders Jody Phillips……………………………………………….Clerk of Circuit Court Jerry Holland…………………………………………………Property Appraiser Pat Ivey…………………………………………………………………….Sheriff Mike Hogan………………………………………………Supervisor of Elections Jim Overton…….…………………………………………………..Tax Collector -- 29 of 389 -- xxi City of Jacksonville, Florida City Council Officials and Staff City Council President of Council…………….………….………………. Terrance E. Freeman Vice President of Council..............…………………………… Ronald B. Salem District 1 — Joyce Morgan District 8 — Ju’Coby Pittman District 2 — Al Ferraro District 9 — Garrett L. Dennis District 3 — Aaron L. Bowman District 10 — Brenda Priestly Jackson District 4 — Kevin Carrico District 11 — Danny Becton District 5 — LeAnna M.G. Cumber District 12 — Randy White District 6 — Michael T. Boylan District 13 — Rory Diamond District 7 — Reggie Gaffney District 14 — Randy DeFoor Group 1 At-Large — Terrance E. Freeman Group 2 At-Large — Ronald B. Salem Group 3 At-Large — Nick Howland Group 4 At-Large — Matt Carlucci Group 5 At-Large — Samuel Newby Council Staff Kimberly Taylor, CPA……………………………………………Council Auditor Margaret “Peggy” Sidman Martin …………………….Director/Council Secretary Yvonne Mitchell………………………………….Chief of Administrative Services Merriane Lahmeur…………………………………….Chief of Legislative Services Jeff Clements………………………………………………….Chief of Research * Schedule represents principal officials in office at the time of the report issuance. -- 30 of 389 -- (This page is intentionally left blank.) -- 31 of 389 -- 1 INDEPENDENTAUDITORS’REPORT TheHonorableMayorandMembersoftheCityCouncil CityofJacksonville,Florida ReportontheFinancialStatements We have audited the accompanying financial statements of the governmental activities, the businessͲ typeactivities,theaggregatediscretelypresentedcomponentunits,eachmajorfundandtheaggregate remainingfundinformationoftheCityofJacksonville,Florida(the“City”),asofandfortheyearended September30,2021,andtherelatednotestothefinancialstatements,whichcollectivelycomprisethe City’sbasicfinancialstatementsaslistedinthetableofcontents. Management’sResponsibilityfortheFinancialStatements Management is responsible for the preparation and fair presentation of these financial statements in accordancewithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica;thisincludes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudor error. Auditors’Responsibility Ourresponsibilityistoexpressopinionsonthesefinancialstatementsbasedonouraudit.Wedidnot auditthefinancialstatementsofJEA,whichrepresentsapproximately83%,80%,and85%,respectively, of the assets, net position, and revenues of the aggregate discretely presented component units. We also did not audit the financial statements of Jacksonville Transportation Authority which represents approximately7%,8%,and10%,respectively,oftheassets,netposition,andrevenuesoftheaggregate discretely presented component units. We also did not audit the financial statements of Jacksonville Port Authority, which represents approximately 10%, 12%, and 5%, respectively, of the assets, net position,andrevenuesoftheaggregatediscretelypresentedcomponentunits.Thosestatementswere auditedbyotherauditorswhosereportshavebeenfurnishedtous,andouropinion,insofarasitrelates totheamountsincludedforJEA,JacksonvilleTransportationAuthorityandJacksonvillePortAuthority,is basedsolelyonthereportsoftheotherauditors.Weconductedourauditinaccordancewithauditing standardsgenerallyacceptedintheUnitedStatesofAmericaandthestandardsapplicabletofinancial 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 aboutwhetherthefinancialstatementsarefreefrommaterialmisstatement. -- 32 of 389 -- 2 Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresin the financial statements. The procedures selected depend on the auditors’ judgment, including the assessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudor error.Inmakingthoseriskassessments,theauditor considersinternal controlrelevanttotheentity’s preparationandfairpresentationofthefinancialstatementsinordertodesignauditproceduresthat 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 significantaccountingestimatesmadebymanagement,aswellasevaluatingtheoverallpresentationof thefinancialstatements. Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisfor ourauditopinions. Opinions In our opinion, based on our audit and the reports of the other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the businessͲtype activities, the aggregate discretely presented component units,eachmajorfundandtheaggregateremainingfundinformationoftheCity,asofSeptember30, 2021,andtherespectivechangesinfinancialpositionand,whereapplicable,cashflowsthereofforthe year then ended in accordance with accounting principles generally accepted in the United States of America. OtherMatters RequiredSupplementaryInformation Accounting principles generally accepted in the United States of America require that management’s discussion and analysis, the schedule of revenue, expenditures and changes in fund balance – budget andactual(budgetarybasis)–generalfund,andotherpostemploymentbenefitsandpensionschedules 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 AccountingStandardsBoardwhoconsidersittobeanessentialpartoffinancialreportingforplacingthe basicfinancialstatementsinanappropriateoperational,economic,orhistoricalcontext.Weandother auditors have applied certain limited procedures to the required supplementary information in accordancewithauditingstandardsgenerallyacceptedintheUnitedStatesofAmerica,whichconsisted 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,andotherknowledgeweobtainedduringourauditofthebasicfinancialstatements.Wedo notexpressanopinionorprovideanyassuranceontheinformationbecausethelimitedproceduresdo notprovideuswithsufficientevidencetoexpressanopinionorprovideanyassurance. SupplementaryandOtherSupplementalInformation Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The introductory section, combining and individualnonmajorfundfinancialstatementsandschedules,othersupplementalinformationandthe -- 33 of 389 -- 3 statistical section, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedules, and other supplemental information 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 by us and the other auditors. In our opinion, based on our audit, the procedures performed as described above, and the reports of other auditors, the combining and individual nonmajor fund financial statements and schedules, and other supplemental information are fairly stated, in all material respects, in relation to the basic financial statements as a whole. This introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated September 30, 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. That report does not include the results of the other auditors’ testing of internal control over financial reporting or compliance and other matters that are reported on separately by those auditors. 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. Jacksonville, Florida September 30, 2022 -- 34 of 389 -- 4 INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCEANDOTHERMATTERSBASEDONANAUDITOFFINANCIALSTATEMENTSPERFORMEDIN ACCORDANCEWITHGOVERNMENTAUDITINGSTANDARDS TotheHonorableMayorandMembersoftheCityCouncil CityofJacksonville,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 issuedby theComptroller General of the United States, the financial statements of the governmental activities,thebusinessͲtypeactivities,theaggregatediscretelypresentedcomponentunits,eachmajor fund,andtheaggregateremainingfundinformationoftheCityofJacksonville,Florida(the“City”)asof andfortheyearendedSeptember30,2021,andtherelatednotestothefinancialstatements,which collectively comprise the City’s basic financial statements, and have issued our report thereon dated September 30, 2022. Our report includes a reference to other auditors who audited the financial statementsofJEA,JacksonvilleTransportationAuthorityandJacksonvillePortAuthority,asdescribedin our report on the City’s financial statements. This report does not include the results of the other auditors’ testing of internal control over financial reporting or compliance and other matters that are reportedonseparatelybythoseauditors. InternalControloverFinancialReporting 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 appropriateinthecircumstancesforthepurposeofexpressingouropinionsonthefinancialstatements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly,wedonotexpressanopinionontheeffectivenessoftheCity’sinternalcontrol. A deficiency in internal control exists when the design or operation of a control does not allow managementoremployees,inthenormalcourseofperformingtheirassignedfunctions,toprevent,or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combinationofdeficiencies,ininternalcontrol,suchthatthereisareasonablepossibilitythatamaterial misstatementoftheentity’sfinancialstatementswillnotbeprevented,ordetectedandcorrectedona timelybasis.Asignificantdeficiencyisadeficiency,oracombinationofdeficiencies,ininternalcontrol thatislessseverethanamaterialweakness,yetimportantenoughtomeritattentionbythosecharged withgovernance. -- 35 of 389 -- 5 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 have not been identified. We did identify certain deficiencies in internal control, described in the accompanying schedule of findings as items 2021Ͳ001 and 2021Ͳ002 that we consider to be material weaknesses. 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 noncompliance or other matters that are required to be reported under Government Auditing Standards. City’s Response to Findings The City’s response to the findings identified in our audit is described in the accompanying schedule of findings. The City’s response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. 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 City’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 City’s internal control and compliance.Accordingly, this communication is not suitable for any other purpose. Jacksonville, Florida September 30, 2022 -- 36 of 389 -- ScheduleofFindings 6 2021Ͳ001 ACCOUNTINGSYSTEMIMPLEMENTATION Condition:Duringtheauditwefoundthatfinancialrecordsformostclassesoftransactionsandaccount balanceswerenotaccuratelycompletedonatimelybasis.Financialreportswerenotinplacetoextract the financial information required and the financial information provided to us required material correctingentriestobemadeinthefollowingareas: x Cash x AccountsReceivable x AccruedPayroll x Revenues Criteria: Section 218.33, Florida Statutes, requires that local government entities follow uniform accounting practices and procedures including the use of proper accounting and fiscal management, which includes establishing and maintaining effective internal control to help ensure that appropriate goals and objectives are met and ensuring that management and financial information is reliable and properlyreported. Cause:Thenewaccountingsystemwasnotdesignedandimplementedeffectivelysuchthatitwasnot functioning sufficiently to maintain upͲtoͲdate and accurate financial records for most classes of transactionsandaccountbalances. Effect:Multiplematerialerrorswerefoundandtheauditwasnotabletobecompletedbythestate’s initialdeadline. Recommendation: Enhance the understanding and user abilities of the accounting system through further training and consultation with software providers. Also, bring monthly close processes up to dateandensurethatsubͲledgersreconcileaccuratelytothegeneralledger. ManagementResponse:TheCityofJacksonvillewentlivewithourERPsystemsconversiononMarch1, 2020.Exactly16dayslater,wewerehitwiththedevastatingCOVIDͲ19pandemicthatsidelinedour workforceanddisruptedtheconversionthatwasalreadyexpectedtobeachallengingprocess.Many largeorganizationsstruggleforyearstoregaintheirfootingafteramajorsystemsconversion.Inour case,thesystemspreviouslyinplaceweremorethan50yearsoldandinneedofmajorupgrade. Negativelyimpactedbythepandemic,ourconversionputtheCitysixmonthsbehindinsubmittingits FY2020reports. WehaveimplementedmanyprocessimprovementssinceoursystemsconversionandtheFY2020audit, ourfirstinthenewsystem.SpecificallyinresponsetotheFY2020auditorrecommendations,madein December2021,theCitytookthefollowingsteps: 1) 1)Toaddresstherecommendationforfurthertraining,wemadethefollowingimprovements: a. WeaddedOracleUniversitylicensestoour2021Ͳ2022budgetandaCityͲwideOracle 1Cloudtrainingpositiontoour2022Ͳ2023budget.Thisnewpositionwillhavethe responsibilityofensuringtheeffectiveandproductivetrainingofnewandexisting employees.Theywillconnectexistingemployeeswithboth1)OracleUniversitycontent, towhichwehavesubscribed,relatedtotheirfunctionswithinthesystemand2)our libraryofinternallycreatedcontentthatwedevelopedandaddedtothetraining materialslibrarywithinthenewERPsystem.Ourlibraryoftrainingmaterialsisnowan expansiveonlinevolumeoffunctionͲandtransactionͲspecificinformation. -- 37 of 389 -- ScheduleofFindings 7 Thetrainingpositionwillalsoberesponsibleforconnectingnewlyassignedemployees withsubjectmatterexperts(SMEs)intheirareas,identifyingadditionaltrainingcontent needsandcoordinatingthefurtherdevelopmentofmaterials.Throughthecreationand centralizationoftrainingcontent,creationofJobAids,andaddingafacilitatorto connectuserswiththeappropriatecontent,weareconfidenttheseeffortswillcontinue toenhancethealreadystrengthenedunderstandingourusershaveoftheirrolesand responsibilitiesinthenewsystem. b. Inadditiontotheabovetrainingenhancementsfornewandexistingstaff,wehavereͲ writtenaccountingdivisionjobdescriptionstofocusonmodernaccountingneeds,by includingmodernERPsystemsfunctionsandexperiencerequirements.Wehavebeen fillingvacancieswithapreferenceplacedoncandidateswithcloudͲbasedaccounting ERPsystemsexperienceandhaveexpandedthefinancialreportingsystemsteamfrom fourtoatotalofninepositions(sevenFTEsandtwoparttimeemployees).These systemsͲspecificfunctionsandjobspecsdidnotexistin2020orbefore. 2) Toaddresstherecommendationforfurtherconsultationwithsoftwareproviders,wemadetwo majorchanges: a. Weeliminatedusageofthepreviousimplementationconsultantandinsteadhired OracleConsultingdirectly.Thischangeeffectivelyeliminatedthedelaysandpartial answerswewereseeingwiththemiddleͲmanapproachtoimplementation.Fromthe dateofthecutͲovertoOracleConsultinginAprilof2021,webegantoseenotable improvementsinthetimelinessandqualityofanswerstotheproblemswewere experiencingthroughandafterimplementation. b. WeaddedOracleManagedCareSolutions(MCS)tooursuiteofongoingservices.The benefitofOracleMCSisthattheyserveasanextensionofourinternallydeveloped systemsexperts’problemticketresolutionprocess,allowingthemtoelevateand resolveuserexperienceproblemsdirectlyatthesource.Inotherwords,MCSallowsfor directelevationofticketstoOraclesoftwaredevelopersandexpertstoaddressissues promptly. 3) Toaddresstherecommendationtobringmonthlycloseprocessesuptodateandensurethat subͲledgersreconcileaccuratelytothegeneralledger,wenotethefollowing: a. Despitethelatestartonthisyear’sauditcausedbytheCOVIDͲdelayed2020reports,we havemadeupthreeofthosemonthsaswearehittingthereviseddeadlineof9/30/22 tosubmittheCity’sFY2021ACFR. b. OurmonthlyaccountingprocessescaughtbackuptoaliveͲclosingbasisforJune2022 whichwillensuretimelyandaccuratereportinggoingforwardbeginningwiththe 9/30/2022ACFR,AFR,SEFA,andSESA. TheseproceduralandoperationalimprovementsmadebytheCitysinceembarkingonthechallenging journeyofconvertingtoanewmodernERPsystemareeffortswhichwillpaydividendsforyearsto comeintheareasoftransparencyandqualityoffinancialreporting.Weexpectthatthesefindingswill beminimizedinFY2022andwillbeclearedbytheFY2023audit. -- 38 of 389 -- ScheduleofFindings 8 2021Ͳ002 BANKRECONCILIATIONS Condition: During the audit we found that the bank reconciliation was not accurately or timely completedandthereweretransactionswhichwerenotproperlyrecordedinthegeneralledgerorthe bankreconciliation. Criteria: Section 218.33, Florida Statutes, requires that local government entities follow uniform accounting practices and procedures including the use of proper accounting and fiscal management, which includes establishing and maintaining effective internal control to help ensure that appropriate goals and objectives are met and ensuring that management and financial information is reliable and properlyreported. Cause:TheTreasurydivisionwasnotabletocompletethebankreconciliationinatimelyandaccurate mannerduetogeneralweaknessesinthesystemimplementationanddidnotmakeappropriateentries orcommunicateerrorstotheAccountingdivisiontoaccountfortransactionswhichhadbeenprocessed andwereidentifiedwhenperformingthebankreconciliation. Effect: Material errors were identified between the bank reconciliation and related general ledger accounts. Recommendation: The Treasury division, Accounting division, and finance managers throughout the City should collaborate better to ensure the bank balances are being reconciled accurately and in a timelymannertoanamountthatmatchesthegeneralledgertobankstatements. ManagementResponse:Toaddresstheseweaknesses,wemadethefollowingfourimprovements: 1) Thegeneralweaknessesrelatedtosystemsconversionwereaddressedthroughthesteps highlightedinourresponsestoFinding2021Ͳ001above.Theseimprovementsledtothe accountingmonthsbeingclosedinthesystemonatimelybasis,whichthenallowedfora bankingreconciliationtobeperformedontimelyandaccuratebasisagainstthoseclosed months.LiveclosingwasrestoredbeginningwiththeJune2022monthͲendcloseprocess,and wehavecontinuedtoclosemonthsontimesincethen.Ourexpectationwillbethattheauditof theFY2022ACFRwillreflectthatthisitemhasbeensubstantiallyorfullyaddressed. 2) ToaddressthecommunicationsweaknessesbetweenTreasuryandAccounting,wecommenced weeklycashreconciliationmeetingsinMay2022toensurethatanyrecordingdiscrepanciesor issuesidentifiedareaddressedimmediatelysothatwhenmonthlyclosingsoccurthe reconciliationprocesscanoccurmorequicklyandaccurately. 3) WealsoreclassifiedpositionswithintheTreasuryDivisiontospecificallyaddfurther reconciliationresponsibilitytonewlyassignedstaff. 4) Weadoptedastandardsetofmonthlyreconciliationprocedures,withexamplejobaid screenshots,toensurethatallstepsarefollowedinthereconcilingofmonthlystatements. Thesefourimprovementshaveyieldedpositiveresultsaswearenowreconcilingourmonthlybank statementsinatimelyandaccuratemanner. TheseproceduralandoperationalimprovementsmadebytheCitysinceembarkingonthechallenging journeyofconvertingtoanewmodernERPsystemareeffortswhichwillpaydividendsforyearsto comeintheareasoftransparencyandqualityoffinancialreporting.Wefullyexpectthatthesefindings willbeminimizedinFY2022andwillbeclearedbytheFY2023audit. -- 39 of 389 -- MANAGEMENT'S DISCUSSION AND ANALYSIS 9 -- 40 of 389 -- MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) The City of Jacksonville’s discussion and analysis is designed to provide an objective and easy to read overview of the City’s financial activities focusing on significant financial issues, as well as identifying material deviations from the financial plan (the approved budget), changes in the City’s financial position (its ability to address the next and subsequent year challenges), and individual fund issues or concerns. The Management’s Discussion and Analysis (MD&A) is designed to focus on the current year’s activities, resulting changes and currently known facts. The information contained within this MD&A should be considered only as a part of the City’s Annual Comprehensive Financial Report (ACFR). Financial Highlights The City’s General Fund operations had total revenues of $1.4 billion in fiscal year 2021. Due primarily to rising home values and new construction, property tax revenues in the General Fund experienced a $52.8 million, 7.6% increase. There were also increases in revenues related to intergovernmental revenues, charges for services and other revenues. Decreases in revenues in the General Fund included $11.8 million for Interest earnings on short term cash and $1.0 million for Utility and Communications service taxes. General Fund total increase in revenues was $83.4 million in fiscal year 2021. General Fund total expenses decreased by $17.3 million, 1.4%, primarily due to decreased spending in General Government and Human Services, while Public Safety spending increased. Total citywide governmental activities revenues decreased by $52.4 million in fiscal year 2021, a 2.5% decrease from fiscal year 2020. Total citywide governmental activity expenses decreased $46.8 million in fiscal year 2021, a 2.2% decrease from fiscal year 2020. Additional information that explains these financial highlights may be found on following pages of this report. City Highlights Fiscal Year 2021 had a number of positive outcomes. Some of the impacts and improvements were as follows: The City implemented a new Enterprise-wide Resource Planning system on March 1st, 2020. Three weeks later, we were challenged with federal and state stay-at-home orders and the need to protect our employees and citizens from the impacts of the COVID-19 pandemic. This pandemic created difficulties in migrating business practices to the new system and led to delays in closing the fiscal year 2020. Those challenges continued into FY 2021, however substantial progress has been made. We are proud of the work our employees have done to continue through this difficult time, with nearly-all employees having been called back to full-time work in the office much sooner than employees in other industries who continued to work remotely. In addition to the swiftly implemented and administered CARES Act programs from FY 2020 which positively impacted the financial well-being of our citizens, we designed use of the first $171 million tranche ARPA Funds to bolster the strength of the local government, address some of our community’s pressing needs, and shore up financial impacts resulting from the pandemic. While some funding was allocated to recurring items, our primary focus was on one-time needs. Among the many items we addressed in with the first tranche some of the most notable were as follows: $50 million to septic tank phaseout, $31 million for premium payments and a part of the raises to government employees, $10.2 million for economic assistance to our municipalities and Port, and several million each for aid to affordable housing providers, our special events venues, and materials and supplies for public health and safety. As with last year’s recognition of the hard work of our employees to implement the very positively impactful CARES Act programs, we again would like to recognize the efforts of our employees to administer the ARPA funding in an efficient and positively impactful way for our citizens and their government. 10 -- 41 of 389 -- In an effort to continue to improve the safety of our citizens, we broke ground on two new fire stations, on- boarded three new classes of firefighters, and made further progress modernizing our fleet of first- responder vehicles. We approved 14 economic development projects that will result in a projected 1,716 jobs and approximately $449 million in new private capital investments. Two projects are located in Northwest Jacksonville. We allocated an additional $200,000 to the Facade Renovation Grant Program to assist businesses in economically distressed areas. As of FYE 21, 55 projects were complete and over $300,000 was disbursed for the program. The Jacksonville Film & Television Office permitted 73 film, television and digital media productions that resulted in 1,065 hirings and nearly $2 million direct economic impact. We approved four Septic Tank and Sewer Connection Grant agreements, allowing small businesses in Northwest Jacksonville to repair/replace failing septic systems or connect to JEA sanitary sewer service. As of FYE 21, eight projects were complete and approximately $277,425 was disbursed for the program. In Fiscal Year 2021, part of the approved financial request for the COPS Grant was allocated to the funding of the Co-Responder Program. This program partners a police officer with a licensed mental health professional who respond together on calls for service involving mental health and homeless population issues. This grant added an additional 40 Police Officer positions to the streets of Jacksonville. The Jacksonville Sheriff’s secured and began the agency-wide rollout of the TASER 7®. This tool is used for officer and citizen safety and provides enhanced capabilities compared to the previous model issued to officers. Additionally, this updated equipment meets compliance regulations and is required due to end of life / warranties of the previously issued equipment. While the project began in 2021, it is anticipated to be ongoing for a minimum of two years as tools are acquired, distributed, and sworn personnel are trained. The JSO Aviation Unit responded to approximately 3,000 calls for service and logged roughly 1,600 flight hours. In October 2021, they took delivery of two 2021 Bell 407GXI aircrafts. The acquisition of the aircrafts will enhance efficiency, safety, aerial assessments during natural disasters and special operation missions. The new aircrafts will also participate in community events such as school tours, youth camp, young aviator meet and greets and other community events. These events allow citizens to have one-on-one interactions with the pilot(s) while observing the aircraft(s). 11 -- 42 of 389 -- OVERVIEW OF THE BASIC FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the City of Jacksonville’s basic financial statements. As indicated in the following graphic (Figure A-1), the City’s basic financial statements are comprised of three components: 1) citywide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains supplementary and statistical information in addition to the basic financial statements themselves. Figure A-1 COMPONENTS OF THE ANNUAL FINANCIAL REPORT Summary Detail Citywide Basic Financial Statements The citywide basic financial statements are designed to provide readers with a broad overview of the City of Jacksonville’s finances, in a manner similar to a private-sector business. The focus of the Statement of Net Position is designed to be similar to bottom line results for the City and its governmental and business-type activities. This statement combines and consolidates governmental funds, current financial resources (short-term spendable resources) with capital assets and long-term obligations. The Statement of Activities distinguishes functions of the City of Jacksonville that are principally supported by taxes and intergovernmental revenues (governmental activities such as: police, fire, public works, recreation, and general administration) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities such as: solid waste, Stormwater, sports complex, motor vehicle and public parking). Management’s Discussion and Analysis (MD&A) Basic Financial Statements Required Supplementary Information (RSI) Citywide Financial Statements Fund Financial Statements Notes to the Financial Statements 12 -- 43 of 389 -- Component Units are other governmental units over which the City can exercise influence and/or may be obligated to provide financial subsidy. The City of Jacksonville’s component units are as follows: Jacksonville Electric Authority (JEA), Jacksonville Transportation Authority (JTA), Jacksonville Port Authority (JPA), and Jacksonville Housing Finance Authority. Separate financial statements are published by JEA, JTA, and JPA. The focus of the statements is on the primary government and the presentation allows the user to address the relationship with the Component Units. The two statements (Statement of Net Position and Statement of Activities) demonstrate how the City’s net position has changed. Increases or decreases in net position are good indicators of whether the City’s financial health is improving or deteriorating over time. Other non-financial factors such as changes in the City’s property tax base are important considerations to assess the City’s overall financial condition. Fund Financial Statements A fund is a grouping of related accounts used to maintain control over resources that have been segregated for specific activities or objectives. Traditional users of governmental financial statements will find the Fund Financial Statements presentation more familiar. The focus is on Major Funds, rather than fund types, which provides detailed information about the most significant funds. The City of Jacksonville, like other state and local governments, uses funds to ensure and demonstrate compliance with financial requirements imposed by law, bond covenants and local administrative and legislative actions. All of the City’s funds can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. Governmental Funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the citywide basic financial statements. However, unlike the citywide basic 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 financing requirements. Since the focus of governmental funds is narrower than that of the citywide basic financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the citywide basic financial statements. This allows readers to 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. Governmental 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, Special Bonded Debt Obligations Fund and Better Jacksonville Plan Special Bonded Debt Obligations Fund, all of which are considered to be major funds. Information from other non-major funds is combined into a single, aggregated presentation. Proprietary Funds Proprietary funds provide the same type of information as the business-type activities in the citywide basic financial statements, only in more detail. The proprietary fund financial statements can be found in the Fund Financial Statements section of this report. The City of Jacksonville maintains two types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the citywide basic financial statements. The City uses enterprise funds to report separate information on operations such as Solid Waste Disposal, Stormwater Services and City Venues which are all major funds. The Sports Complex Capital, Motor Vehicle Inspection, Public Parking and Equestrian Center are non-major enterprise funds. 13 -- 44 of 389 -- The internal service funds are used to account for activities that provide goods and services to the City’s other programs and activities. Since the internal service funds predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the citywide basic financial statements. Fiduciary Funds The City of Jacksonville is the trustee, or fiduciary, for trusts such as the City employee’s retirement plans. Because of a trust arrangement, these assets can be used only for the trust beneficiaries. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. All of the City of Jacksonville’s fiduciary activities are reported in a separate statement of fiduciary net position and a statement of changes in fiduciary net position. These activities are excluded from the citywide basic financial statements because the assets cannot be used to support or finance the City’s programs or operations. The Fiduciary Funds Statement of Changes in Net Position can be found in the Fund Financial Statement section of this report. Notes to the Financial Statements The notes to the financial statements provide additional information that is essential to a full understanding of the data provided in the citywide and fund financial statements. The notes can be found as a part of the Basic Financial Statements section of this report. Other Information This report additionally includes required supplementary information (RSI) containing budgetary comparisons with related notes and the progress of the City’s employee pension obligations and other post-employment obligations. The combined statements in connection with non-major governmental and enterprise funds, internal service funds, fiduciary funds and non-major component units are presented following the required supplemental information. Additional statistical information is presented to give report users a better historical perspective and assist in assessing current financial status and trends of the governmental unit. Economic data is presented to allow a broader understanding of the economic and social environment in which the City government operates. CITYWIDE FINANCIAL ANALYSIS The net position may serve over time as a useful indicator of the government’s financial position. The City’s net position decreased $43 million due primarily to an increase of $116 million in the net pension liability and $209 million in current liabilities, with an offsetting increase of $258 million in total assets. The negative $2.6 billion unrestricted net position is primarily due to the $3.1 billion Net Pension Liability (See Table A-1). 14 -- 45 of 389 -- 2021 2020 2021 2020 2021 2020 Cash and Investments 1,561,495 $ 1,425,925 $ 144,646 $ 125,640 $ 1,706,141 $ 1,551,565 $ Current and Other Assets 327,904 282,703 69,062 63,419 396,966 346,122 Capital Assets 2,696,530 2,636,893 584,683 591,291 3,281,213 3,228,184 Total assets 4,585,929 4,345,521 798,391 780,350 5,384,320 $ 5,125,871 Deferred Outflow of Resources 609,539 531,422 55 60 609,594 531,482 Current Liabilities 352,911 164,850 55,786 34,982 408,697 199,832 Non-current Liabilities 2,809,617 2,756,623 371,496 377,849 3,181,113 3,134,472 Net Pension Liability 3,107,155 2,991,161 - - 3,107,155 2,991,161 Total liabilities 6,269,683 5,912,634 427,282 412,831 6,696,965 6,325,465 Deferred Inflow of Resources 151,933 143,560 - - 151,933 143,560 Net position Net investment in capital assets 1,262,691 963,098 250,804 252,121 1,513,495 1,215,219 Restricted for: Debt service 96,919 125,870 - - 96,919 125,870 Housing & human serv grants 22,836 37,837 - - 22,836 37,837 State and federal grants 6,464 5,027 - - 6,464 5,027 Capital projects 9,428 10,672 - - 9,428 10,672 Other participant's equity 2,578 3,456 - - 2,578 3,456 Permanent Fund - - - - - - non-expendable 1,566 1,616 - - 1,566 1,616 Other Purposes 69,066 51,009 - - 69,066 51,009 Unrestricted (deficit) (2,697,696) (2,377,836) 120,360 115,458 (2,577,336) (2,262,378) Total net position (1,226,148) $ (1,179,251) $ 371,164 $ 367,579 $ (854,984) $ ($ 811,672) Governmental Activities Activities Business Type Table A-1 Summary Statement of Net Position (In Thousands) for the fiscal year ended September 30, 2021 and September 30, 2020 Total Primary Government The largest portion of the City’s net position reflects its substantial capital assets, net of related debt. This displays the City’s commitment to investing in assets that have useful lives in excess of the life of the debt issues used to finance the assets. The net pension liability is expected to increase until FY2030 when an additional dedicated ½ cent sales tax begins to fund the pension liability. Along with the unfunded pension liability, the negative unrestricted net position in the governmental activities also includes non-asset related debt, which is a liability of the City, issued for various capital projects that belong to other entities. The City issued non-asset related debt: To finance improvements at Shands-Jacksonville – a large regional hospital serving the City’s citizens, including its indigent population. To finance improvements for both students and the public at Edwards Waters College – an important HBCU located in Downtown Jacksonville. To finance dredging of Millers Creek to provide better access for nearby neighborhoods. To finance dredging of Wills Branch to relieve drainage and flooding issues. On the following page, Table A-2 provides a summary comparison of the City’s operations for the 2021 and 2020 fiscal year ends. 15 -- 46 of 389 -- Revenues: 2021 2020 2021 2020 2021 2020 Program Revenues: Fines & charges for services 168,138 $ 136,248 $ 130,752 $ 131,168 $ 298,890 $ 267,416 $ Operating grants/contributions 100,593 280,509 - - 100,593 280,509 Capital grants/contributions 54,297 41,783 - - 54,297 41,783 General revenues: Property taxes 784,248 727,967 - - 784,248 727,967 Utility and Communications service taxes 123,699 124,789 - - 123,699 124,789 Sales and tourist taxes 251,007 221,804 16,433 14,168 267,440 235,972 Local business taxes 6,993 7,122 - - 6,993 7,122 Intergovernmental 207,049 183,073 - - 207,049 183,073 Franchise Fees 41,303 41,007 - - 41,303 41,007 JEA Contribution 120,012 118,824 - - 120,012 118,824 Earnings on Investments 11,601 47,628 549 5,113 12,150 52,741 Miscellaneous 45,563 30,868 13,815 16,333 59,378 47,201 Total Revenues 1,914,503 1,961,622 161,549 166,782 2,076,052 2,128,404 Expenses General government 221,559 263,937 - - 221,559 263,937 Human services 115,935 139,918 - - 115,935 139,918 Public safety 1,161,203 1,112,990 - - 1,161,203 1,112,990 Cultural and recreational 81,911 89,507 - - 81,911 89,507 Transportation 215,845 166,313 - - 215,845 166,313 Economic & physical environment 90,324 142,059 - - 90,324 142,059 Interest on long term debt 47,768 62,780 - - 47,768 62,780 Parking system - - 3,708 3,705 3,708 3,705 Motor vehicle inspections - - 317 397 317 397 Solid Waste - - 86,294 84,980 86,294 84,980 Stormwater services - - 23,175 25,322 23,175 25,322 City Venues - - 70,055 72,947 70,055 72,947 Sports Complex Capital Maintenance - - 36 13 36 13 Equestrian Center - - 1,234 1,270 1,234 1,270 Total Expenses 1,934,545 1,977,504 184,819 188,634 2,119,364 2,166,138 Increases (decreases) in net position before transfers and special item (20,042) (15,882) (23,270) (21,852) (43,312) (37,734) Transfers (26,855) (23,071) 26,855 23,071 - - Change in net position (46,897) (38,953) 3,585 1,219 (43,312) (37,734) Net position (deficit), beginning of year as restated (1,179,251) (1,136,508) 367,579 366,360 (811,672) (770,148) Net position (deficit), end of year (1,226,148) $ (1,175,461) $ 371,164 $ 367,579 $ (854,984) $ (807,882) $ Table A-2 (In Thousands) Total Primary Government Governmental Activities Business-TypeActivities Statement of Activities as of September 30, 2021 and September 30, 2020 16 -- 47 of 389 -- Governmental activities: The City’s governmental activities revenues decreased $52.4 million from 2020 to 2021 (see Table A-2) and consists of: Property tax revenues reflected a $56.3 million increase which continues as a clear indication of a strong economy in Jacksonville. The $24.0 million increase in intergovernmental revenues is primarily due to increases in contributions from component units. The increase of $29.2 million in sales and tourist taxes reflects the positive rebound from the pandemic. The increase of $31.9 million in fines & charges for services is due the lessening impact of COVID-19. Capital grants/contributions increased by $12.5 million while another $14.8 million increase was realized from miscellaneous revenue sources. Operating grant/contributions had a decrease of $179.9 million primarily due to most of CARES Act funding from the U.S. Department of Treasury being recognized in the prior year, while most of the ARPA funding will be recognized in FY22. The decrease of $36.0 million in earnings on investments is a result of poorer performance of the pooled cash investments in fiscal year 2021. Governmental activities expenses decreased by $43.0 million in fiscal year 2021 primarily due to the following: Public Safety expenses increased by $48.2 million. Transportation expenses increased by $49.5 million while economic & physical environment expenses decreased by $51.7 million. Cultural and recreational expenses decreased by $7.6 million. Interest on long term debt decreased by $15.0 million. Human services expenses decreased by $24.0 million. Business Type activities: The City’s business type revenues decreased $5.2 million in fiscal year 2021: Sales and tourist taxes increased by $2.3 million. Interest earnings decreased $4.6 million due to poorer performance of pooled cash investments. Miscellaneous revenues also decreased by $2.5 million. Business type activities total expenses decreased $3.8 million in fiscal year 2021: Expenses increased $1.3 million in Solid Waste. Expenses decreased in the City Venues by $2.9 million, and in Stormwater Services by $2.1 million. 17 -- 48 of 389 -- 0 200 400 600 800 1,000 1,200 1,400 $ millions Expenses and Program Revenues ‐ Governmental Activities Program Revenues Expense Miscellaneous 2% Franchise Fees 2% Interest 1% Operating Grant/Contributions 5% JEA Contribution 6% Fines and Charges for Services 9% Intergovernmental 11% Capital Grants and Contributions 3% Taxes 61% Revenues ‐ Governmental Activities 18 -- 49 of 389 -- Culture & Recreation 4% Interest on LT Debt 3% Human Services 6% Economic & Physical Env. 5% General Government 11% Transportation 11% Public Safety 60% Expenses ‐ Governmental Activities ‐ 10 20 30 40 50 60 70 80 90 100 $ millions Expenses and Program Revenues ‐ Business Type Activities 19 -- 50 of 389 -- FINANCIAL ANALYSIS OF THE CITY GOVERNMENT’S FUNDS As noted earlier, the City of Jacksonville uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. Governmental Funds: The focus of the City’s governmental funds is to provide information on near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing the City’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 fiscal year 2021. The City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All non-major funds of each governmental fund type with legally adopted annual budgets are included in the Combining Schedule of Revenue, Expenditures, and Changes in Fund Balance – Budget and Actual, which can be found in the Combining Individual Fund Statements and Schedules. The General Fund and Major Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual is included as Required Supplementary Information following the Notes to the Financial Statements. The General Fund is the chief operating fund of the City. At the end of the current fiscal year, the unassigned fund balance of the General Fund was $266.3 million. The General Fund’s total fund balance was $406.1 million, with $66.0 million committed by City Council as an emergency reserve. The City’s Reserve Policy for the General Fund is covered by Section 106.107 of the City’s municipal code. The policy requires that the emergency reserve shall not be used except as initiated by the Mayor through written communication to City Council, explaining the emergency, with subsequent approval by two-thirds votes of all City Council members. The Emergency Reserve can be used to address unanticipated non-reimbursed expenditures arising out of a hurricane, tornado, other major weather-related events, and/or other massive infrastructure failures or disasters, whether man made or caused by nature. Under normal circumstances, the City would first elect to utilize the Operating Reserve before considering use of its Emergency Reserve. Key factors affecting changes in major funds and fund balance in fiscal year 2021 operations are as follows: General Fund: Property taxes account for 56.1% of the General Fund revenue and increased by $52.8 million, 7.6% increase over the previous fiscal year. Interest revenue decreased $11.8 million due to a lower return in fiscal year 2021. General Fund revenues had an overall increase of $83.3 million and an overall decrease in expenditures of $17.3 million as compared to fiscal year 2020. The millage rate for the City of Jacksonville remained the same from fiscal year 2020 to 2021 at 11.4419. Public Safety: This fund is used to track emergency incidents. FY2021 was most notable for CARES Act funding and the ARP Act funding. While FEMA has not yet approved obligating funds for COVID-19 Disaster Account funding, we anticipate reimbursement for emergency protective measures. The City has spent $46.8 million in expenditures for Hurricane Matthew, $74.2 million for Hurricane Irma and $6.0 million for Hurricane Dorian; through 9/30/21, the FEMA has reimbursed $80.6 million. We expect 75% reimbursement for Matthew and Dorian and 90% reimbursement for Irma. The City received $167.1 million in direct funding from the US Treasury for the CARES Act and had expended $142.8 million through 9/30/21. The City also received $171.8 million in direct funding from the US Treasury for SLFRF funding under round one of the American Recovery Plan (ARP) Act and had expended $10.1 million through 9/30/21. Round 1 was appropriated to a variety of impacted areas and programs as detailed in our submissions to the U.S. Treasury through our required reports. We received another $171 million in round 2 funding in FY 2022. Special Bonded Debt – Better Jacksonville Plan Obligations (BJP): Bonds payable on BJP Special Bonded Debt Obligations decreased by $89.5 million in fiscal year 2021 due to refunding activities and year-over-year differences in the amortization schedule. During fiscal year 2021, the City redeemed a total of $62.7 million in BJP bonds. Interest and other fiscal charges decreased by $6.6 million due to refunding activities and lower overall outstanding BJP debt. 20 -- 51 of 389 -- Special Bonded Debt – Obligations: Bonds payable on Special Bonded Debt Obligations decreased by $28.8 million in fiscal year 2021 due to refunding activities and year-over-year differences in the amortization schedule. Interest and other fiscal charges decreased by $2.7 million due to refunding activities and lower overall outstanding debt. Proprietary Funds: The City’s proprietary funds provide the same type of information found in the government- wide business-type activities financial statements, but in more detail. Solid Waste, Storm Water Services and City Venues are reported as major proprietary funds in fiscal year 2021. General Fund Budgetary Highlights: Property tax revenues exceeded budget by $10.7 million, utility service taxes exceeded budget by $0.9 million, and community service taxes exceeded budget by $1.0 million. Interest was under budget by $2.2 million, fines & forfeitures exceeded budget by $0.7 million and licenses, and permits and fees were under budget by $0.2 million. Intergovernmental, and charges for services were over budget a total of $38.8 million. Total actual revenues for fiscal year 2021 were $49.7 million over the final budget. Total general fund actual expenditures for fiscal year 2021 were $122.0 million under final budget with $64.9 million related to the budgeted but unused emergency reserve. Additional savings were due to salary and benefit costs and departmental and non-departmental operating cost savings due to the Administration’s strong efforts toward cost reductions. Fire & rescue and the office of the sheriff accounted for $782.2 million of the general fund expenditures, which was 64.6% of the General Fund’s total expenditures. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets The City of Jacksonville’s investment in capital assets for its governmental and business-type activities as of September 30, 2021, amounts to $3.3 billion net of accumulated depreciation. The investment in capital assets includes land, buildings and improvements, furniture and equipment, infrastructure, and construction in progress, other assets include public art and purchased/internally developed software (see Table A-3). The primary focus was on fleet additions, sports complex improvements and drainage projects in fiscal year 2021. The business type infrastructure decrease was due to the sale of a parking garage. Additional information on the City of Jacksonville’s capital assets can be found in the Notes to the Financial Statements, Footnote 6 of this report. 21 -- 52 of 389 -- 2021 2020 2021 2020 2021 2020 Land and easements 327,533 $ 320,397 $ 46,910 $ 46,910 $ 374,443 $ 367,307 $ Buildings and improvements 1,246,417 1,245,128 741,484 741,484 1,987,901 1,986,612 Furniture & Equipment 532,586 518,159 18,051 17,313 550,637 535,472 Construction and work in progress 416,954 262,181 93,205 72,108 510,159 334,289 Infrastructure 2,389,727 2,389,582 92,887 93,876 2,482,614 2,483,458 Other Assets 46,304 46,718 - - 46,304 46,718 Less accumulated depreciation (2,262,991) (2,145,273) (407,854) (380,398) (2,670,845) (2,525,671) Total $ 2,696,530 $ 2,636,893 $ 584,683 $ 591,293 $ 3,281,213 $ 3,228,186 Activities Activities Total Table A-3 Capital Assets Net of Accumulated Depreciation (In Thousands) as of September 30, 2021 and September 30, 2020 Governmental Business Type Debt Administration Debt Service Funds account for the accumulation of resources for and the payment of interest and principal on most general governmental obligations. Individual debt service funds are described below. The Special Bonded Debt Obligations Fund accounts for the accumulation of resources for, and the payment of, principal and interest on the City’s special and limited bonded obligations payable solely from and secured by a lien upon and pledge of the revenues under the respective bond ordinances. The Special Bonded Debt - Better Jacksonville Plan Obligations Fund accounts for the accumulation of resources for and the payment of principal and interest on the City’s special bonded obligations payable, which are related to the Better Jacksonville Plan. The Other Non-Bonded Debt Obligations Fund accounts for the accumulation of resources for and the payment of principal and interest on other non-bonded debt obligations including the U. S. Government Guaranteed Notes Payable (HUD 108 loans). At the end of fiscal year 2021, the City of Jacksonville had $2.3 billion in bonds and notes outstanding as shown in Table A-4. Additional information on the City’s long-term debt can be found in Notes to the Financial Statements, Note 8, of this report. 22 -- 53 of 389 -- 2021 2020 2021 2020 2021 2020 Special Obligation Bonds 416,841 $ 445,615 $ - $ - $ 416,841 $ 445,615 $ Special Obligation Bonds - BJP 831,615 921,110 - - 831,615 921,110 Revenue Bonds Payable 527,952 474,485 223,567 220,310 751,519 694,795 Notes Payable 32,300 62,300 - 14,400 32,300 76,700 Notes Payable - BJP 6,703 12,870 - - 6,703 12,870 Deferred Amounts Loss on Adv Ref (7,339) (7,959) (55) (60) (7,394) (8,019) Gain on Adv Ref 2,417 2,635 - - 2,417 2,635 Issuance premiums 211,239 217,877 25,002 24,934 236,241 242,811 Issuance discounts (1,411) (1,572) - - (1,411) (1,572) Total 2,020,317 2,127,361 248,514 259,584 2,268,831 2,386,945 Table A-4 Bonds and Note s Payable O utstanding Debt as of Se ptembe r 30, 2021 and Se pte mber 30, 2020 (in Thousands) Governmental Activities Busine ss Type Activities Total New indebtedness of the City of Jacksonville consists of: Closing Date Par Amount Source Primary Use Oct. 2020 155,040,000 Transportation Revenue Bonds Refinancing Aug. 2021 16,530,000 BJP Special Revenue Bonds Refinancing Sep. 2021 97,900,000 Special Revenue Bonds Project Funding & Refinancing Sep. 2021 7,300,000 Commercial Paper Notes Project Funding On October 29, 2020, the City closed on the sale of $155.04 million Taxable Transportation Refunding Revenue Bonds, Series 2020. The 2020 bonds have a true interest cost of 1.62%, an average coupon rate of 1.57% with no mandatory sinking schedule and a maturity date of October 1, 2031. The proceeds of the 2020 bonds were used to refund the City’s Transportation Revenue Bonds, Series 2012A maturing in years 2023 through 2031. The issuance provided net proceeds of $155.04 million, which is inclusive of underwriter’s discount and cost of issuance totaling $1.00 million. The refunding of the Taxable Transportation Refunding Revenue Bonds, Series 2020 resulted in net PV savings of $20.99 million and a decrease in aggregate debt service in the amount of $35.14 million. On August 12, 2021, the City closed on a $16.53 million bank loan referred to as the Better Jacksonville Sales Tax Refunding Revenue Bond, Series 2021. The 2021 loan has a true interest cost of .43%, an average coupon rate of .43% with no mandatory sinking schedule and a maturity date of October 1, 2023. The proceeds of the 2021 loan were used to refund the City’s outstanding Better Jacksonville Sales Tax Refunding Revenue Bonds, Series 2011. The agreement provided net proceeds of $16.53 million, which is inclusive of the cost of issuance totaling $50k. The refunding of the Better Jacksonville Sales Tax Refunding Revenue Bonds, Series 2011 resulted in net PV savings of $1.07 million and a decrease in aggregate debt service in the amount of $1.08 million. On September 22, 2021, the City closed on the sale of $97.90 million Special Revenue Bonds, Series 2021A.The 2021A bonds have a true interest cost of 1.92%, an average coupon rate of 4.52% with no mandatory sinking schedule and a maturity date of October 1, 2041. The proceeds of the 2021A bonds were used to finance and refinance the acquisition and construction of certain capital equipment and improvements for the City ($90.50 million) and to fix out a portion of the City’s outstanding commercial paper debt ($29.80 million). The issuance provided net proceeds of $121.05 million, which is inclusive of underwriter’s discount and cost of issuance totaling $753k. 23 -- 54 of 389 -- On September 28, 2021, the City closed on the sale of Commercial Paper Notes in the amount of $7.30 million for the purposes of funding short-term projects, and interim funding for long-term projects, with an initial interest rate of .07%. During fiscal year 2021, the City issued $276.8 million of bonds and notes and refunded or retired a combined $388.9 million in principal amount of bonds and notes, resulting in a net increase of Debt Outstanding of $112.1 million. Since the end of fiscal year 2015, the City has reduced outstanding bonds and notes by a total of $454.0 million. 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 on property and a limited array of permitted other taxes (sales, gasoline, utilities services, etc.) and fees (franchise, occupational license, etc.) for their governmental activities. There are a limited number of state- shared revenues and recurring and non-recurring (one-time) grants from both the state and federal governments. Other Economic Factors: The unemployment rate for the City of Jacksonville was 3.7% at the end of fiscal year 2021. The population of the City of Jacksonville at the end of fiscal year 2021 was 1,016.8 thousand. Jacksonville has the largest Empowerment Zone in the nation. Jacksonville has a major port, is home to the National Football League’s (NFL) Jacksonville Jaguars, is the insurance and financial center of Florida and is the site of key U.S. Navy bases. Budget Highlights for fiscal year 2022 The FY 2022 budget is a continuation of prudent budgeting that addresses the needs of the community while also increasing reserves, which have grown to approximately $281.0 million unassigned and roughly $66.0 million in emergency reserves through FYE 9/30/2021. The City is benefitting by a growing economy, expanding population base, and strong economic activity. The $1.53 billion dollar balanced general fund budget addresses the critical needs of the city such as police, fire prevention, roads and bridges, parks, libraries and more. The Capital Improvement Plan includes $412 million in FY22 authorizations including another $20 million for capital improvements at our county hospital administered by UF Health, $106 million for hydrology and resiliency projects, and other improvements to public facilities, roads, bridges, and parks. Debt is down $585 million since July 1, 2015, which allows for the continued investment in public infrastructure while maintaining reasonable debt levels over time. FY 2022 will have pre-programmed raises for employees as new collective bargaining agreements were negotiated. CONTACTING THE CITY’S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact the Department of Finance, Accounting Division, 117 West Duval Street, Suite 375, Jacksonville, Florida 32202, or call (904) 255-5261. 24 -- 55 of 389 -- CITYWIDE FINANCIAL STATEMENTS 25 -- 56 of 389 -- CITY OF JACKSONVILLE, FLORIDA STATEMENT OF NET POSITION - SEPTEMBER 30, 2021 WITH COMPARATIVE TOTALS FOR 2020 (in thousands) GOVERNMENTAL BUSINESS-TYPE COMPONENT ACTIVITIES ACTIVITIES 2021 2020 UNITS ASSETS: Cash and investments $1,268,227 $122,927 $1,391,154 $1,196,607 $1,237,262 Cash in escrow and with fiscal agents 293,268 21,719 314,987 354,958 1,600 Securities lending 30,919 - 30,919 24,001 - Receivables, net 132,507 67,788 200,295 194,012 271,704 Due from independent agencies and other governments 155,424 300 155,724 116,677 29,261 Inventories 5,616 8 5,624 5,511 100,475 Prepaid expenses and other assets 3,438 965 4,403 5,921 55,701 Hedging deverivative instrument - - - - 150,453 Costs to be recovered from future revenues - - - - 881,949 CAPITAL ASSETS: Land, easements, art in public places, and construction in progress 745,903 140,114 886,017 702,830 1,404,078 Other capital assets, net of depreciation 1,950,627 444,569 2,395,196 2,525,354 5,386,946 TOTAL ASSETS 4,585,929 798,390 5,384,319 5,125,871 9,519,429 DEFERRED OUTFLOW OF RESOURCES: Pension related 432,704 - 432,704 471,814 174,734 Unamortized deferred loss on refunding and defeasance 7,339 55 7,394 8,019 95,615 Accumulated decrease in fair value of hedging instrument - - - - 129,355 Unrealized asset retirement obligation - - - - 37,669 Other post employment benefit related 169,496 - 169,496 51,649 10,298 TOTAL DEFERRED OUTFLOW OF RESOURCES 609,539 55 609,594 531,482 447,671 LIABILITIES: Accounts payable and accrued liabilities 88,960 37,949 126,909 103,590 153,177 Contracts payable 512 1 513 1,156 47,792 Due to independent agencies and other governments 67 - 67 48 - Deposits 7,149 13,131 20,280 14,202 76,702 Accrued interest payable 37,908 4,463 42,371 44,204 55,487 Unearned revenue 187,153 241 187,394 12,377 6,987 Securities lending 30,919 - 30,919 24,001 - Other current liabilities 243 - 243 254 37,465 NONCURRENT LIABILITIES: - Fair value of debt management instrument - - - 129,355 Due within one year 192,822 10,157 202,979 218,693 109,003 Due in more than one year: Net pension liability 3,107,155 - 3,107,155 2,991,161 747,370 Other 2,616,795 361,339 2,978,134 2,915,779 3,897,843 TOTAL LIABILITIES 6,269,683 427,281 6,696,964 6,325,465 5,261,181 DEFERRED INFLOW OF RESOURCES: Pension related 105,513 - 105,513 100,548 42,057 Other post employment benefit related 36,997 - 36,997 33,018 14,728 Revenue to be used for future costs - - - - 159,987 Unamortized deferred gain on refunding 9,423 - 9,423 9,994 - Accumulated increase in fair value of hedging derivatives - - - - 153,493 TOTAL DEFERRED INFLOW OF RESOURCES 151,933 - 151,933 143,560 370,265 NET POSITION: Net investment in capital assets 1,262,691 250,804 1,513,495 1,215,219 3,458,153 Restricted for: Debt service 96,919 - 96,919 125,870 108,503 Housing and human services grants 22,836 - 22,836 37,837 - Other state and federal grants 6,464 - 6,464 5,027 - Capital projects 9,428 - 9,428 10,672 296,059 Other participant's equity 2,578 - 2,578 3,456 - Permanent funds, non-expendable 1,566 - 1,566 1,616 - Other purposes 69,066 - 69,066 51,009 58,040 Unrestricted (deficit) (2,697,696) 120,360 (2,577,336) (2,262,378) 414,899 TOTAL NET POSITION ($ 1,226,148) $ 371,164 ($ 854,984) ($ 811,672) $ 4,335,654 TOTALS PRIMARY GOVERNMENT 26 -- 57 of 389 -- CITY OF JACKSONVILLE, FLORIDA STATEMENT OF ACTIVITIES - FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 WITH COMPARATIVE TOTALS FOR 2020 (in thousands) PROGRAM REVENUES PRIMARY GOVERNMENT FINES AND CHARGES OPERATING CAPITAL BUSINESS- TOTAL FOR GRANTS AND GRANTS AND GOVERNMENTAL TYPE COMPONENT FUNCTIONS/PROGRAMS EXPENSES SERVICES CONTRIBUTIONS CONTRIBUTIONS ACTIVITIES ACTIVITIES 2021 2020 UNITS PRIMARY GOVERNMENT: Governmental activities: General government $ 221,559 $ 81,439 $ 1,169 7,457 $ ($ 131,494) ($ 131,494) ($ 196,987) Human services 115,935 2,615 7,329 - (105,991) (105,991) (120,941) Public safety 1,161,203 72,515 12,991 - (1,075,697) (1,075,697) (829,086) Culture and recreation 81,911 5,172 8,325 1,307 (67,107) (67,107) (81,701) Transportation 215,845 66 14,317 42,220 (159,242) (159,242) (118,906) Economic environment 92,924 4 51,628 2,931 (38,361) (38,361) (37,523) Physical environment (2,600) 6,327 4,834 382 14,143 14,143 (74,830) Interest on long term debt 47,768 - - - (47,768) (47,768) (62,780) Total governmental activities 1,934,545 168,138 100,593 54,297 ($ 1,611,517) (1,611,517) (1,522,754) Business-type activities: Parking system 3,708 2,786 - - - (922) (922) (783) Motor vehicle inspections 317 396 - - - 79 79 (174) Solid Waste 86,294 84,189 - - - (2,105) (2,105) (3,146) Storm Water Services 23,175 33,476 - - - 10,301 10,301 6,993 City Venues 70,055 9,905 - - - (60,150) (60,150) (59,073) Equestrian Center 1,234 - - - - (1,234) (1,234) (1,270) Sports Complex Capital 36 - - - - (36) (36) (13) Total business-type activities 184,819 130,752 - - - (54,067) (54,067) (57,466) Total primary government $ 2,119,364 $ 298,890 $ 100,593 $ 54,297 (1,611,517) (54,067) (1,665,584) (1,580,220) COMPONENT UNITS: Governmental activities $ 54,353 $ - $ - $ 19,988 ($ 34,365) Business-type activities 1,861,918 1,846,530 87,039 148,370 220,021 Total component units $ 1,916,271 $ 1,846,530 $ 87,039 $ 168,358 $ 185,656 General revenues and transfers: Property taxes 784,248 - 784,248 727,967 - Utility and Communications service taxes 123,699 - 123,699 124,789 - Sales and tourist taxes 251,007 16,433 267,440 235,972 2,033 Local business taxes 6,993 - 6,993 7,122 - Intergovernmental - unrestricted 207,049 - 207,049 183,073 90,944 JEA Contribution 120,012 - 120,012 118,824 - Unrestricted earnings on investments 11,601 549 12,150 52,741 18,951 Franchise Fees 41,303 - 41,303 41,007 - Miscellaneous 45,563 13,815 59,378 47,201 20,123 Transfers (26,855) 26,855 - - - Total general revenues and transfers 1,564,620 57,652 1,622,272 1,538,696 132,051 Change in net position (46,897) 3,585 (43,312) (41,524) 317,707 Net position, beginning of year, as restated (1,179,251) 367,579 (811,672) (770,148) 4,017,947 Net position, end of year ($ 1,226,148) $ 371,164 ($ 854,984) ($ 811,672) $ 4,335,654 See accompanying notes. 27 -- 58 of 389 -- (This page is intentionally left blank.) 28 -- 59 of 389 -- FUND FINANCIAL STATEMENTS 29 -- 60 of 389 -- (This page is intentionally left blank.) 30 -- 61 of 389 -- MAJOR GOVERNMENTAL FUNDS: GENERAL FUND The General Fund is the principal fund of the City and is used to account for all activities not included in other funds. The General Fund accounts for the normal recurring activities of the City (i.e, police, fire, public works, courts, general government, etc.). These activities are funded principally by property taxes, intergovernmental revenues, and licenses and fees. DEBT SERVICE FUNDS The Special Bonded Debt Obligations Fund accounts for the accumulation of resources for, and the payment of, principal and interest on the City’s special and limited bonded obligations, which are payable solely from and secured by a lien upon and pledge of the revenues under the respective bond ordinances. The Special Bonded Debt - Better Jacksonville Plan Obligations Fund accounts for the accumulation of resources for, and the payment of, principal and interest on the City's special bonded obligations payable, which are related to the Better Jacksonville Plan. SPECIAL REVENUE FUNDS The Other Federal, State and Local Grants Fund records all other miscellaneous grants administered by the City from federal, state and local sources not specifically accounted for by other funds covering diverse programs such as: day care, adult homemaker, beach erosion, base conversion and redevelopment, economic capital development, aids treatment care, senior services and nutrition, crime prevention and drug abuse, teenage pregnancy and childhood development, foster grandparents, and waste tire disposal. 31 -- 62 of 389 -- CITY OF JACKSONVILLE, FLORIDA BALANCE SHEET - GOVERNMENTAL FUNDS SEPTEMBER 30, 2021 WITH COMPARATIVE TOTALS FOR 2020 (in thousands) SPECIAL BONDED DEBT- BETTER JACKSONVILLE SPECIAL GENERAL PLAN BONDED DEBT - FUND OBLIGATIONS OBLIGATIONS ASSETS: Equity in pooled cash and investments $ 382,478 $ 910 $ 895 Cash in escrow and with fiscal agents - 147,887 46,320 Securities lending collateral 30,919 - - Receivables (net, where applicable, of allowances for uncollectibles): Accounts 7,353 - - Loans - - - Other 214 - - Due from other funds - - - Due from independent agencies and other governments 74,757 - - Inventories 4,651 - - Prepaid items and other assets 18 - - TOTAL ASSETS 500,390 148,797 47,215 LIABILITIES: Accounts payable and accrued liabilities $ 52,185 $ 61 $ - Contracts payable - - - Due to other funds - - - Due to independent agencies and other governments 67 - - Due to individuals - - - Bonds Payable - 45,600 27,144 Interest Payable - 17,421 8,867 Deposits 2,427 - - Unearned revenue 8,543 - - Securities lending obligations 30,919 - - TOTAL LIABILITIES 94,141 63,082 36,011 DEFERRED INFLOW OF RESOURCES Unavailable Revenue 180 - - FUND BALANCES: Non Spendable Non Spendable 4,669 - - Spendable: Restricted 5,445 85,715 11,204 Committed 103,632 - - Assigned 26,033 - - Unassigned 266,290 - - TOTAL FUND BALANCES (Deficit) 406,069 85,715 11,204 TOTAL LIABILITIES, DEFERRED INFLOW OF RESOURCES, AND FUND BALANCES $ 500,390 $ 148,797 $ 47,215 32 -- 63 of 389 -- OTHER FEDERAL, NON MAJOR STATE AND GOVERNMENTAL LOCAL GRANTS FUNDS 2021 2020 $ 162,362 $ 462,213 $ 1,008,858 $ 838,028 - 8,692 202,899 250,575 - - 30,919 24,001 1,208 3,109 11,670 6,004 - 4,866 4,866 4,880 - - 214 763 - - - 8,478 3,327 75,309 153,393 114,619 - - 4,651 4,545 - 593 611 51 166,897 554,782 1,418,081 1,251,944 $ 1,460 $ 24,464 $ 78,170 $ 71,337 - 512 512 899 - - - 8,478 - - 67 48 - 243 243 301 - - 72,744 91,517 - - 26,288 30,443 578 4,138 7,143 6,585 161,802 13,981 184,326 7,101 - - 30,919 24,001 163,840 43,338 400,412 240,710 - - 180 180 - 2,159 6,828 6,372 3,057 99,292 204,713 230,415 - 435,447 539,079 545,129 - - 26,033 18,815 - (25,454) 240,836 210,323 3,057 511,444 1,017,489 1,011,054 $ 166,897 $ 554,782 $ 1,418,081 $ 1,251,944 TOTALS 33 -- 64 of 389 -- DRAFT (This page is intentionally left blank.) 34 -- 65 of 389 -- Total fund balances- governmental funds 1,017,489 $ Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities 2,696,530 are not financial resources and therefore are not reported in the funds Long term liabilities - liabilities are not due and payable in the current period and are not reported in the funds: Bonds and notes payable (1,815,411) Unamortized bond discounts 1,411 Unamortized bond premium (211,239) Unamortized loss on advance refunding of debt 7,339 Total bonds and notes payable (2,017,900) Net pension liability (3,107,155) Pension related deferred inflow of resources (105,513) Pension related deferred outflow of resources 432,704 Pension Receivable 4,521 (2,775,443) * Certain assets, liabilities, deferred inflow of resources, and deferred outflow of resources reported in governmental activities are not financial resources and therefore are not reported in the funds: Matured notes and bonds payable accrual at the fund level 72,744 Compensated absences (131,134) Estimated liability for self insured losses (148,532) Other post employment benefits (OPEB) liability (416,420) OPEB related deferred inflow of resources (36,997) OPEB related deferred outflow of resources 169,496 Accrued liability for pollution remediation (88,293) Deferred gain on refunding (9,423) Amounts earned but not available 180 Total (588,379) Internal service funds are used by management to charge the costs of certain activities, such as fleet maintenance and insurance, to individual funds. The Capital Assets and Long term liabilities are consolidated with the governmental funds on an entity-wide basis. This amount represents the net of Current Assets and Current Liabilities of the Internal Service Funds. 441,555 (1,226,148) $ * Exception - The City deposits amounts in debt service funds to pay unmatured payables early in the following year. See accompanying notes. Net position of governmental activities City of Jacksonville, Florida Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position September 30, 2021 (in thousands) 35 -- 66 of 389 -- CITY OF JACKSONVILLE, FLORIDA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 WITH COMPARATIVE TOTALS FOR 2020 (in thousands) SPECIAL BONDED DEBT BETTER JACKSONVILLE SPECIAL GENERAL PLAN BONDED DEBT- FUND OBLIGATIONS OBLIGATIONS REVENUES: Property taxes $752,018 - - Utility and Communications service taxes 123,699 - - Sales and tourist taxes 1,250 - - Local business taxes 6,993 - - Licenses, permits, and fees 41,782 - - Intergovernmental 207,049 34,370 - Charges for services 81,862 - - Fines and forfeitures 2,713 - - JEA Contribution 120,012 - - Investment earnings 5,287 149 79 Other 18,955 - - Total Revenues 1,361,620 34,519 79 EXPENDITURES: Current: General government 172,681 8,261 - Human services 78,122 - - Public safety 779,318 - - Culture and recreation 65,292 - - Transportation 32,999 - - Economic environment 13,305 - - Physical environment 25,719 - - Capital outlay 8,878 - - Debt Service: Principal - 76,445 27,534 Interest 7,815 35,839 17,864 Other 4 1,088 36 Total Expenditures 1,184,133 121,633 45,434 EXCESSS OF REVENUES OVER (UNDER) EXPENDITURES 177,487 (87,114) (45,355) OTHER FINANCING SOURCES (USES): Long term debt issued - - - Refunding bond issued - 171,570 - Premium on bonds payable - - - Payment to escrow agent - refunded debt - (180,323) - Transfers In 16,351 67,105 45,166 Transfers Out (127,705) - - Total Other Financing Sources (Uses) (111,354) 58,352 45,166 NET CHANGE IN FUND BALANCES 66,133 (28,762) (189) FUND BALANCE, BEGINNING OF YEAR 339,936 114,477 11,393 FUND BALANCES (DEFICIT), END OF YEAR $406,069 $85,715 $11,204 36 -- 67 of 389 -- OTHER FEDERAL, NON MAJOR STATE AND GOVERNMENTAL LOCAL GRANTS FUNDS 2021 2020 - $32,230 $784,248 $727,967 - - 123,699 124,789 - 249,757 251,007 221,804 - - 6,993 7,122 - 32,146 73,928 61,689 24,706 95,814 361,939 501,575 - 48,363 130,225 111,691 - 2,575 5,288 3,875 - - 120,012 118,824 - 4,138 9,653 33,185 1,817 17,716 38,488 32,831 26,523 482,739 1,905,480 1,945,352 855 32,666 214,463 255,355 12,498 38,303 128,923 136,356 12,540 88,736 880,594 898,507 9,202 7,178 81,672 73,565 - 138,608 171,607 160,092 796 76,893 90,994 54,667 527 10,546 36,792 33,313 1,776 167,953 178,607 143,818 - - 103,979 92,736 - - 61,518 70,984 - - 1,128 981 38,194 560,883 1,950,277 1,920,374 (11,671) (78,144) (44,797) 24,978 - 82,684 82,684 158,834 - - 171,570 83,075 - - - 2,770 - - (180,323) (86,973) 500 57,936 187,058 216,465 - (82,052) (209,757) (233,781) 500.00 58,568 51,232 140,390 (11,171) (19,576) 6,435 165,368 14,228 531,020 1,011,054 845,686 $3,057 $511,444 $1,017,489 $1,011,054 TOTALS 37 -- 68 of 389 -- Net change in fund balances- total governmental funds: 6,435 $ Amounts reported for governmental activities in the statement of activities are different because: Certain assets and liabilities reported in governmental activities are not current financial resources or do not require the use of current financial resources. Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Also, certain capital assets are contributed to the City upon completion, requiring recognition of capital contributions not reported in the funds. Capital assets acquired by use of financial resources 157,090 Current year depreciation (103,019) 54,071 Governmental funds report certain bond transactions as sources or uses. However, in the statement of activities these transactions are reported over the life of the debt as expenses. Amortization of bond discounts (161) Amortization of bond premium 17,415 Amortization -gain on refunding 218 Amortization - loss on refunding (620) 16,852 Repayment of bond principal is an expenditure in governmental funds, but the repayment results in a reduction of long-term liabilities in the statement of net position. Issuing debt provides current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position. Long-term debt issued (171,570) Long-term debt retired 282,539 110,969 Some revenues and expenses reported in the statement of activities did not require the use of or provide current financial resources and therefore are not reported in governmental funds: Decrease in compensated absences payable 11,831 Increase in other post employment benefits (41,391) Decrease of accrual for pollution remediation 1,028 Net effect of internal loans (45,781) Increase in net pension liability (118,173) Change in deferred outflow and inflow of resources related to pension (42,307) (106,972) Internal service funds are used to charge the cost of certain activities to individual funds. The net revenue (expense) and transfers are reported with governmental activities. Operating gain (loss) (4,032) Investment revenue (loss) 1,948 Interest expense (749) Other non-operating revenue 6,560 Transfers out, net (4,158) (431) (46,897) $ See accompanying notes. Change in Net Position - Governmental Activities City of Jacksonville, Florida Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities For The Year Ended September 30, 2021 (in thousands) 38 -- 69 of 389 -- MAJOR ENTERPRISE FUNDS: Enterprise Funds account for operations that are financed and operated in a manner similar to private business enterprises and where the costs of providing goods or services to the general public are recovered primarily through user charges; or where the City has decided that determination of net income is appropriate for capital maintenance, public policy, management control, accountability or other purposes. Individual major enterprise funds are described below. The Solid Waste Disposal Fund accounts for collection, recycling and disposal of commercial and residential garbage services throughout the city, including the operation of three municipally owned landfill sites, two of which are closed. The City Venues Fund accounts for events held at TIAA Bank Field, Veterans Memorial Arena, the Baseball Field, Times Union Center for the Performing Arts, Prime Osborn Convention Center, and Ritz Theater. The Storm Water Services Fund accounts for the storm water utility financed by service charges, to be used to pay the expenses of constructing and maintaining the storm water management system. 39 -- 70 of 389 -- CITY OF JACKSONVILLE, FLORIDA STATEMENT OF NET POSITION - PROPRIETARY FUNDS SEPTEMBER 30, 2021 WITH COMPARATIVE TOTALS FOR 2020 (in thousands) SOLID STORM INTERNAL WASTE CITY WATER NON MAJOR SERVICE DISPOSAL VENUES SERVICES ENTERPRISE 2021 2020 FUNDS ASSETS: Equity in pooled cash and investment $41,432 $26,487 $47,284 $7,724 $122,927 $103,147 $259,369 Cash in escrow and with fiscal agents - 11,661 - 172 11,833 12,526 90,369 Receivables (net, where applicable, of allowances for uncollectibles): Accounts 33,714 10,883 23,042 147 67,786 59,878 28 Loans - - - - - - 42,729 Other 2 - - - 2 2 3,520 Due from independent agencies and other governments 59 167 - 74 300 229 2,031 Inventories - - - 8 8 9 965 Prepaid expenses and other assets - 965 - - 965 3,301 3,357 Total Current Assets 75,207 50,163 70,326 8,125 203,821 179,092 402,368 NONCURRENT ASSETS: Sinking fund cash and investments 9,886 - - - 9,886 9,967 - Loans receivable - - - - - - 559,883 Other receivables - - - - - - 8,462 CAPITAL ASSETS: Land, easements and work in progress 46,719 47,309 38,628 7,458 140,114 119,016 49,815 Other capital assets, net of depreciation 5,009 374,415 56,136 9,009 444,569 472,275 103,258 Total Noncurrent Assets 61,614 421,724 94,764 16,467 594,569 601,258 721,418 TOTAL ASSETS 136,821 471,887 165,090 24,592 798,390 780,350 1,123,786 DEFERRED OUTFLOW OF RESOURCES: Unamortized deferred loss on refunding - - - 55 55 60 - ENTERPRISE FUNDS TOTALS 40 -- 71 of 389 -- CITY OF JACKSONVILLE, FLORIDA STATEMENT OF NET POSITION - PROPRIETARY FUNDS SEPTEMBER 30, 2021 WITH COMPARATIVE TOTALS FOR 2020 (in thousands) SOLID STORM INTERNAL WASTE CITY WATER NON MAJOR SERVICE DISPOSAL VENUES SERVICES ENTERPRISE 2021 2020 FUNDS ENTERPRISE FUNDS TOTALS LIABILITIES: Accounts payable and accrued liabilities $5,278 $28,101 $4,090 $480 $37,949 $18,917 $10,790 Contracts payable - - 1 - 1 257 - Deposits 218 12,733 84 96 13,131 7,611 6 Accrued interest payable - 4,407 - 56 4,463 5,490 11,620 Estimated liability for self insured losses, current portion - - - - - - 40,586 Unearned revenues - 241 - - 241 2,707 2,827 Accrued compensated absences current portion 407 - 98 96 601 628 1,481 Current portion of notes payable - - - - - 900 - Current portion of loans payable 1,083 700 427 - 2,210 2,229 5,345 Current portion of bonds payable - 7,230 - 116 7,346 6,973 40,154 Total Current Liabilities 6,986 53,412 4,700 844 65,942 45,712 112,809 NONCURRENT LIABILITIES: Estimated liabilitie for self-insured losses - - - - - - 107,946 Liability for landfill closure and post-closure care 38,382 - - - 38,382 36,616 - Accrued compensated absences 951 - 229 225 1,405 1,435 3,460 Loans Payable 32,286 42,811 5,231 - 80,328 90,797 65,334 Bond payable - 239,115 - 2,109 241,224 238,271 585,997 Total Noncurrent Liabilities 71,619 281,926 5,460 2,334 361,339 367,119 762,737 TOTAL LIABILITIES 78,605 335,338 10,160 3,178 427,281 412,831 875,546 DEFERRED INFLOW OF RESOURCES Unamoritized deferred gain on refunding - - - - - - 7,006 NET POSITION: Net investment in capital assets 20,438 129,644 86,741 13,981 250,804 252,121 114,708 Restricted for: Restricted - other participants equity - - - - - - 2,578 Unrestricted (deficit) 37,778 6,905 68,189 7,488 120,360 115,458 123,948 TOTAL NET POSITION (DEFICIT) $58,216 $136,549 $154,930 $21,469 $371,164 $367,579 $241,234 41 -- 72 of 389 -- (This page is intentionally left blank.) 42 -- 73 of 389 -- CITY OF JACKSONVILLE, FLORIDA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 WITH COMPARATIVE TOTALS FOR 2020 (in thousands) SOLID STORM INTERNAL WASTE CITY WATER NON MAJOR SERVICE DISPOSAL VENUES SERVICES ENTERPRISE 2021 2020 FUNDS OPERATING REVENUE: Sales and tourist taxes $ - $9,597 $ - $6,836 $16,433 $14,168 $ - Charges for services 84,189 9,905 33,476 3,182 130,752 131,168 319,433 Charges for services for independent authorities - - - - - - 5,083 Other 13 8,182 2 14 8,211 11,501 1,244 Total Operating Revenue 84,202 27,684 33,478 10,032 155,396 156,837 325,760 OPERATING EXPENSES: Personal services 8,258 6,925 6,950 2,107 24,240 26,245 36,913 Supplies and materials 181 430 279 34 924 763 17,821 Central service 5,021 295 3,333 605 9,254 8,798 24,909 Interdepartmental charges 170 2,606 92 160 3,028 2,793 - Other services and charges 68,732 29,901 7,271 1,211 107,115 107,306 76,577 Depreciation and amortization 2,815 18,685 5,250 1,071 27,821 28,214 26,981 Court reporter services - - - - - - 45 Claims and losses - - - - - - 30,808 Insurance premiums and participant dividends - - - - - - 115,738 Total Operating Expenses 85,177 58,842 23,175 5,188 172,382 174,119 329,792 OPERATING (LOSS)INCOME (975) (31,158) 10,303 4,844 (16,986) (17,282) (4,032) NON-OPERATING REVENUE (EXPENSES): Investment earnings (loss) 271 14 213 51 549 5,113 1,948 Interest expense (1,117) (11,213) - (107) (12,437) (14,515) (749) Other 2,335 3,121 93 55 5,604 4,832 6,560 Total Non-Operating Revenue (Expenses) 1,489 (8,078) 306 (1) (6,284) (4,570) 7,759 INCOME (LOSS) BEFORE TRANSFERS 514 (39,236) 10,609 4,843 (23,270) (21,852) 3,727 TRANSFERS: Transfers In 9,590 29,201 - 1,347 40,138 37,599 3,000 Transfers Out (9,245) (156) - (3,882) (13,283) (14,528) (7,158) Net Transfers 345 29,045 - (2,535) 26,855 23,071 (4,158) CHANGES IN NET POSITION 859 (10,191) 10,609 2,308 3,585 1,219 (431) NET POSITION (DEFICIT), BEGINNING OF THE YEAR 57,357 146,740 144,321 19,161 367,579 366,360 241,665 NET POSITION (DEFICIT), END OF YEAR $58,216 $136,549 $154,930 $21,469 $371,164 $367,579 $241,234 ENTERPRISE FUNDS TOTALS 43 -- 74 of 389 -- CITY OF JACKSONVILLE, FLORIDA COMBINING STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 WITH COMPARATIVE TOTALS FOR 2020 (in thousands) SOLID WASTE CITY DISPOSAL VENUES CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers $88,540 $59,210 Receipts from interfund services provided - - Payments to suppliers (79,862) (55,911) Payments to employees (8,138) (6,925) Internal activity-receipts from other funds - - Internal activity-payments to other funds (50) - Other cash receipts 78 15,561 Other operating cash payments (170) (4,332) NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 398 7,603 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:: Transfers from other funds 9,590 29,201 Transfers to other funds (9,245) (156) NET CASH PROVIDED BY (USED IN) NONCAPITAL FINANCING ACTIVITIES 345 29,045 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition and construction of capital assets (5,008) (22,033) Proceeds from sale of capital assets 5,151 18,923 Cash with fiscal agent 81 722 Proceeds from bonds payable 5,350 29,896 Payments on bonds payable (6,467) (35,123) Proceeds from loans payable 5,704 1,550 Payments on loans payable (1,083) (2,400) Payments on notes payable - (14,400) Interest paid on debts - (1,029) ( ) ACTIVITIES 3,728 (23,894) CASH FLOWS FROM INVESTING ACTIVITIES: Interest and dividends on investments 271 14 NET CASH PROVIDED BY INVESTING ACTIVITIES 271 14 NET INCREASE(DECREASE) IN CASH AND INVESTMENTS 4,742 12,768 Equity in pooled cash and investments at October 1, 2020 36,690 13,719 Equity in pooled cash and investments at September 30, $41,432 $26,487 44 -- 75 of 389 -- STORM INTERNAL WATER NON MAJOR SERVICE SERVICES ENTERPRISE 2021 2020 FUNDS $40,515 $11,636 $199,901 $210,003 $5,174 - - - - 401,372 (17,940) (3,529) (157,242) (177,131) (329,784) (7,091) (2,045) (24,199) (25,171) (36,987) - - - 167 445 - (21) (71) (220) (735) 1 106 15,746 13,440 44,557 (92) (209) (4,803) (9,560) (56,037) 15,393 5,938 29,332 11,528 28,005 - 1,347 40,138 37,601 3,000 - (3,882) (13,283) (14,529) (8,884) - - (2,535) 26,855 23,072 (5,884) (20,317) (2,883) (50,241) (26,230) (62,612) 5,252 2,046 31,372 2,275 32,323 - (29) 774 (786) (8,479) 94 33 35,373 787 244,229 (1) (227) (41,818) (6,992) (192,490) - - 7,254 2,052 8,901 (761) - (4,244) (2,539) (14,999) - - (14,400) (1,000) (30,000) - 2 (1,027) (14,258) 2,996 (15,733) (1,058) (36,957) (46,691) (20,131) 213 52 550 5,111 1,948 213 52 550 5,111 1,948 (127) 2,397 19,780 (6,980) 3,938 47,411 5,327 103,147 110,127 255,431 $47,284 $7,724 $122,927 $103,147 $259,369 TOTALS 45 -- 76 of 389 -- COMBINING STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 WITH COMPARATIVE TOTALS FOR 2020 (in thousands; continued) SOLID WASTE CITY DISPOSAL VENUES RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES: OPERATING INCOME(LOSS) $ ( 975) $ ( 31,158) Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 2,815 18,685 Other non-operating revenue/(expenses) - 556 (Increase) decrease in assets: Receivables and other current assets net (2,752) (4,225) Due from independent agencies and other governments (50) - Interest and dividend receivables - - Inventories - - Other receivables - - Loan receivables - - Prepaid expenses and other assets - 2,337 Increase (decrease) in liabilities: Accounts payable and accrued expenses (494) 18,800 Contracts payable - - Deposits 69 5,447 Accrued interest payable - (373) Unearned revenue - (2,466) Liability for landfill closure and postclosure care 1,766 - Liability for self-insured losses - - Accrued compensated absences 19 - TOTAL ADJUSTMENTS 1,373 38,761 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 398 7,603 NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES: Change in the fair value of investments. (263) 22 Capital assets transferred from governmental activities to proprietary funds of the city - 3 46 -- 77 of 389 -- STORM INTERNAL WATER NON MAJOR SERVICE SERVICES ENTERPRISE 2021 2020 FUNDS $ 10,303 $ 4,844 $ (16,986) $ (17,282) $ (4,032) 5,250 1,071 27,821 28,213 26,980 - 43 599 594 23,090 (867) (62) (7,906) 16,839 15 - (21) (71) (54) (202) - - - - - - 1 1 - (8) - - - - 526 - - - - (30,659) - - 2,337 (2,667) (273) 1,087 11 19,404 (14,150) (5,730) (256) - (256) (4) - 1 2 5,519 (5,236) - - - (373) (164) - - - (2,466) 2,617 258 - - 1,766 1,828 - - - - - 18,232 (125) 49 (57) 993 (192) 5,090 1,094 46,318 28,809 32,037 15,393 5,938 29,332 11,528 28,005 (417) (7) (517) 1,123 (2,378) - - 3 (81) 552 TOTALS 47 -- 78 of 389 -- (This page is intentionally left blank.) 48 -- 79 of 389 -- FIDUCIARY FUND LEVEL STATEMENTS PENSION TRUST FUNDS are funds administered by independent boards for which the City performs a fiduciary role under a defined benefit, defined contribution and disability programs. The participant's retirement annuity is based on a statutory formula using such factors as age, average salary, length of service and others. PRIVATE PURPOSE TRUST FUND is used to report all trust arrangements, other than those properly reported in pension trust funds, under which principal and income benefit individuals. The City reports its James Brady Disabled Scholarship, Michael Jackson Music Scholarship, J.B. Smith Memorial Scholarship, and Lex Hester Memorial Scholarship funds as private purpose trusts. CUSTODIAL FUNDS account for fiduciary activities that are not required to be presented as pension trust funds or private purpose trust funds. 49 -- 80 of 389 -- CITY OF JACKSONVILLE, FLORIDA STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS SEPTEMBER 30, 2021 WITH COMPARATIVE TOTALS FOR 2020 (in thousands) 2021 2020 2021 2020 2021 2020 ASSETS Equity in pooled cash and investments $46,961 $63,831 $18 $32 $322 $185 Cash in escrow and with fiscal agents 277 272 82,069 67,903 Receivables (net, where applicable, of allowances for uncollectibles): Interest and dividends 3,440 4,148 - - - - Accounts 81 81 - - 2,863 2,885 Other - - - - - - Due from independent agencies and other governments 3,803 1,051 - - - - Prepaid assets 82 82 - - - - Investments, at fair value: Bonds 783,533 713,476 - - - - Short-term investments 24,398 1,715 - - - - Domestic stocks 2,326,592 1,718,116 - - - - International stocks 1,160,649 1,009,323 - - - - Real estate 688,395 626,433 - - - - Alternative investments 59,814 147,876 - - - - Equity in pooled investments 174,153 138,588 - - - - Total investments 5,217,534 4,355,527 - - - - Capital assets: Other capital assets, net of depreciation - 1 - - - - Total capital assets, net - 1 - - - - Securities lending collateral 115,960 103,769 - - - - TOTAL ASSETS 5,387,861 4,528,490 295 304 85,254 70,973 DEFERRED OUTFLOW OF RESOURCES: Net differences between expected and actual investments earnings 70 112 - - - - LIABILITIES Obligations under securities lending agreement 115,960 103,769 3 - - - Accounts payable and accrued liabilities 18,662 17,639 - - - - Due to independent agencies and other governments - - - - 28,250 30,211 Due to individuals - - - - 6,041 5,366 Deposits held in escrow - - - - 10,230 6,643 Accrued compensated absences 207 160 - - - - Terminal leave - group care 7 9 - - - - Net pension liability - SSVRP 142 - - - - - TOTAL LIABILITIES 134,978 121,577 3 - 44,521 42,220 DEFERRED INFLOW OF RESOURCES: Net differences between expected and actual investments earnings 545 - - - - - NET POSITION Restricted for Pensions and other purposes $5,252,408 $4,407,025 $292 $304 $40,733 $28,753 PRIVATE PURPOSE TRUST FUNDS CUSTODIAL FUNDS PENSION TRUST FUNDS 50 -- 81 of 389 -- CITY OF JACKSONVILLE, FLORIDA STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 WITH COMPARATIVE TOTALS FOR 2020 (in thousands) 2021 2020 2021 2020 2021 2020 ADDITIONS Contributions: Employer $253,910 $231,934 $ - $ - $ - $ - Plan member 66,399 60,088 - - - - Total Contributions 320,309 292,022 - - - - Other additions: State insurance contributions 14,307 13,889 - - - - Court fines & penalties 724 519 - - - - Miscellaneous 189 624 - - - 474 Collections due to individuals 120,519 117,079 Collections deposits held in escrow 34,987 25,494 Collections due to other governments 2,745,360 2,540,138 Plan transfers in/(out) 11,524 5,927 - - - - Total other additions 26,744 20,959 - - 2,900,866 2,683,185 Investment income: Net change in fair value of investments 960,546 280,050 (6) 3 - - Interest and other miscellaneous 11,775 23,450 5 11 - - Dividends 36,030 14,772 - - - - Rebate of commissions 37 76 - - - - Rental Income 696 670 - - - - Total investment income (loss) 1,009,084 319,018 (1) 14 - - Less investment expense (19,730) (16,992) - - - - Less rental expense (258) (258) - - - - Net investment income (loss) 989,096 301,768 (1) 14 - - From Securities Lending Activities: Securities lending 142 619 - - - - Securities lending expenses - Agent Fees (30) (57) - - - - Total securities lending activities 112 562 - - - - TOTAL ADDITIONS 1,336,261 615,311 (1) 14 2,900,866 2,683,185 DEDUCTIONS Benefit payments 390,508 377,714 - - - - DROP benefits 37,765 38,626 - - - - Refund of contributions 46,588 28,095 - - - - Administrative expenses 3,908 3,186 - - - - Miscellaneous Expenses 12,109 10,547 11 2 - - Payments due to individuals 118,977 115,951 Payments deposits held in escrow 24,689 32,760 Payments due to other governments 2,744,792 2,541,900 Payments miscellaneous 428 (17) TOTAL DEDUCTIONS 490,878 458,168 11 2 2,888,886 2,690,594 CHANGES IN NET POSITION 845,383 157,143 (12) 12 11,980 (7,409) NET POSITION, BEGINNING OF THE YEAR, AS RESTATED 4,407,025 4,249,882 304 292 28,753 36,162 NET POSITION, END OF YEAR $ 5,252,408 $ 4,407,025 $ 292 $ 304 $ 40,733 $ 28,753 PRIVATE PURPOSE TRUST FUNDS PENSION TRUST FUNDS CUSTODIALFUNDS 51 -- 82 of 389 -- (This page is intentionally left blank.) 52 -- 83 of 389 -- COMPONENT UNITS Component Units are legally separate organizations for which the primary government is financially accountable. Financial accountability is defined as the appointment of a voting majority of the component unit's governing body with certain exceptions, and either (a) the ability to impose will by the primary government; or (b) the potential for the organization to provide financial benefits to, or impose financial burdens on the primary government. Financial accountability may also be determined if the component unit is fiscally dependent on the City and a potential financial benefit / burden relationship exists. MAJOR COMPONENT UNITS: The JEA manages and operates an electric utility system and a water and sewer utility system in the Consolidated City of Jacksonville/Duval County area. The Jacksonville Transportation Authority is responsible for construction, improvement, and maintenance of the Jacksonville Expressway System and operation of the City’s mass transit systems, including bus and automated skyway express throughout Duval County. The Jacksonville Port Authority manages and operates the City’s marine port facilities. NON MAJOR COMPONENT UNIT: The Jacksonville Housing Finance Authority provides money for loans and technical assistance for construction and rehabilitation of housing to alleviate a shortage of housing and capital for investment in housing in Jacksonville. 53 -- 84 of 389 -- CITY OF JACKSONVILLE, FLORIDA COMBINING STATEMENT OF NET POSITION - COMPONENT UNITS (in thousands) SEPTEMBER 30, 2021 JACKSONVILLE JACKSONVILLE TRANSPORTATION PORT JEA AUTHORITY AUTHORITY ASSETS Cash and cash equivalents $ 713,113 $ 98,340 $ 41,415 Cash in escrow with fiscal agent - - - Investments 273,960 99,018 - Accounts and interest receivable 221,588 5,601 7,309 Loans receivable - - - Other receivables - - 26,985 Due from other governmental agencies - 29,194 - Inventories 95,707 2,995 1,773 Other assets 47,373 8,328 - Hedging deverivative instruments 150,453 - - Costs to be recovered from future revenues 881,949 - - Capital assets: Land, easements, and construction in progress 583,016 334,181 486,881 Buildings and improvements - 179,201 691,917 Vehicles - 152,809 - Equipment - 102,486 146,837 Utility plant in service 12,415,504 - - Less: accumulated depreciation (7,522,027) (303,972) (475,809) Total capital assets, net of depreciation 5,476,493 464,705 849,826 TOTAL ASSETS 7,860,636 708,181 927,308 DEFERRED OUTFLOW OF RESOURCES: Pension related 157,296 14,058 3,380 Unamortized deferred loss on refunding and defeasance 89,729 - 5,886 Accumulated decrease in fair value of hedging instrument 129,355 - Unrealized asset retirement obligation 37,669 Other post employment benefit related 7,302 2,996 TOTAL DEFERRED OUTFLOW OF RESOURCES 421,351 17,054 9,266 LIABILITIES Accounts payable and accrued liabilities 124,590 25,279 3,268 Contracts payable 45,466 - 2,326 Deposits 76,702 - - Interest payable 51,454 984 2,928 Unearned revenue - - 6,987 Other current liabilities 36,083 - 1,382 Noncurrent liabilities: Fair market value of debt management instrument 129,355 - - Due within one year: Estimated liability for injury and damage claims - 2,388 - Bonds, notes payable, capital leases 91,535 6,655 7,672 Other liabilities - 753 - Due in more than one year: Net pension liability 729,569 11,111 6,690 Estimated liability for injury and damage claims - 3,713 - Bonds, notes payable, capital leases and commercial paper 3,102,245 139,783 214,291 Compensated absences 33,433 1,518 - Custodial projects - due to other governments - 171,566 - Other post employment benefit 5,136 199 - Unearned revenue noncurrent - - 120,952 Asset retirement obligation 34,362 Other noncurrent liabilities 18,338 - 52,307 TOTAL LIABILITIES 4,478,268 363,949 418,803 DEFERRED INFLOW OF RESOURCES: Pension related 14,273 17,915 9,869 Other post employment benefit related 14,725 3 - Revenue to be used for future costs 156,814 3,173 - Accumulated increase in fair value of hedging derivatives 150,453 3,040 - TOTAL DEFERRED INFLOW OF RESOURCES 336,265 24,131 9,869 NET POSITION Net investment in capital assets 2,696,104 293,139 468,910 Restricted for: Debt service 90,423 - 18,080 Capital projects 296,059 - - Other purposes 44,774 - 2,926 Unrestricted 340,094 44,016 17,986 TOTAL NET POSITION $ 3,467,454 $ 337,155 $ 507,902 See accompanying notes. MAJOR COMPONENT UNITS 54 -- 85 of 389 -- NON MAJOR COMPONENT UNIT JACKSONVILLE HOUSING FINANCE AUTHORITY TOTAL $ 11,416 $ 864,284 1,600 1,600 - 372,978 41 234,539 10,180 10,180 - 26,985 67 29,261 - 100,475 - 55,701 - 150,453 - 881,949 - 1,404,078 - 871,118 - 152,809 - 249,323 - 12,415,504 - (8,301,808) - 6,791,024 23,304 9,519,429 - 174,734 - 95,615 - 129,355 - 37,669 10,298 - 447,671 40 153,177 - 47,792 76,702 121 55,487 - 6,987 - 37,465 - - 129,355 - 2,388 - 105,862 - 753 - 747,370 - 3,713 - 3,456,319 - 34,951 - 171,566 - 5,335 - 120,952 - 34,362 - 70,645 161 5,261,181 - 42,057 - 14,728 - 159,987 - 153,493 - 370,265 - 3,458,153 - 108,503 - 296,059 10,340 58,040 12,803 414,899 $ 23,143 $ 4,335,654 55 -- 86 of 389 -- CITY OF JACKSONVILLE, FLORIDA COMBINING STATEMENT OF ACTIVITIES - COMPONENT UNITS (in thousands) FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 FINES AND OPERATING CAPITAL CHARGES GRANTS AND GRANTS AND FUNCTIONS/PROGRAMS EXPENSES FOR SERVICES CONTRIBUTIONS CONTRIBUTIONS Governmental activities: Jacksonville Transportation Authority $ 51,432 $ - $ - $ 19,988 Jacksonville Housing Finance Authority 2,921 - - - Total governmental activities 54,353 - - 19,988 Business-type activities: JEA 1,651,393 1,768,633 94,580 Jacksonville Transportation Authority 140,861 16,044 77,192 18,171 Jacksonville Port Authority 69,664 61,853 9,847 35,619 Total business-type activities 1,861,918 1,846,530 87,039 148,370 Total component units $ 1,916,271 $ 1,846,530 $ 87,039 $ 168,358 General Revenues: Sales and tourist taxes Intergovernmental - unrestricted Unrestricted earnings on investments Miscellaneous Transfers Total general revenues and transfers Change in net position Net position, beginning of year Net position, end of year See accompanying notes. PROGRAM REVENUES 56 -- 87 of 389 -- TOTAL MAJOR COMPONENT UNIT NON MAJOR COMPONENT UNIT GOVERNMENTAL JACKSONVILLE JACKSONVILLE JACKSONVILLE JACKSONVILLE AND TRANSPORTATION HOUSING FINANCE TRANSPORTATION PORT BUSINESS-TYPE AUTHORITY AUTHORITY JEA AUTHORITY AUTHORITY ACTIVITIES $ (31,444) $ - $ - $ - $ - $ (31,444) - (2,921) - - - (2,921) - (31,444) (2,921) - (34,365) - - 211,820 - - 211,820 - - - (29,454) - (29,454) - - - - 37,655 37,655 - - 211,820 (29,454) 37,655 220,021 (31,444) (2,921) 211,820 (29,454) 37,655 185,656 2,033 - - - - 2,033 - - - 90,944 - 90,944 334 1,001 17,543 63 10 18,951 3,074 2,533 14,101 415 20,123 11,467 - - (11,467) - - 16,908 3,534 31,644 79,955 10 132,051 (14,536) 613 243,464 50,501 37,665 317,707 48,819 22,530 3,223,990 252,371 470,237 4,017,947 $ 34,283 $ 23,143 $ 3,467,454 $ 302,872 $ 507,902 $ 4,335,654 BUSINESS-TYPE ACTIVITIES GOVERNMENTAL ACTIVITIES MAJOR COMPONENT UNITS 57 -- 88 of 389 -- (This page is intentionally left blank.) 58 -- 89 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES............................... 62 - 78 A. Basis of Presentation ..............................................................................................62 B. Financial Reporting Entity ............................................................................. 62 - 66 C. Basic Financial Statements ....................................................................................67 D. Fund Structure ................................................................................................ 67 - 69 E. Basis of Accounting ...............................................................................................70 F. Cash, Cash Equivalents and Investments .........................................................….71 G. Receivables ............................................................................................................71 H. Inventories..............................................................................................................71 I. Capital Assets.........................................................................................................72 J. Contributions..........................................................................................................72 K. Interfund Activity...................................................................................................72 L. Restricted Assets ....................................................................................................73 M. Compensated Absences .........................................................................................73 N. Risk Financing ............................................................................................... 73 - 74 O. Pension Costs .........................................................................................................74 P. Landfill Closure and Postclosure Care Costs ........................................................74 Q. Long-Term Obligations .........................................................................................75 R. Categories and Classification of Fund Balance .....................................................75 S. Bond Discounts, Premiums and Issuance Costs ....................................................76 T. Deferred Loss on Debt Refundings........................................................................76 U. Use of Estimates ....................................................................................................76 V. Reclassification ......................................................................................................76 W. Summarized Comparative Information..................................................................76 X. Prepaids ..................................................................................................................77 Y. Accounting Pronouncements ......................................................................... 77 - 78 2. BUDGETARY DATA .....................................................................................................78 3. CASH, INVESTMENTS AND SECURITIES LENDING ..................................... 79 - 89 A. Cash on Deposit .....................................................................................................79 B. Investments and Investment Practices ........................................................... 79 - 88 C. Securities Lending .................................................................................................89 4. ACCOUNTS, MORTGAGES, AND OTHER RECEIVABLE .......................................90 5. PROPERTY TAXES .......................................................................................................91 A. Ad Valorem Property Taxes ..................................................................................91 B. The Property Tax Calendar ....................................................................................91 6. CAPITAL ASSET ACTIVITY................................................................................92 – 93 7. INTERFUND RECEIVABLES, PAYABLES, ADVANCES AND TRANSFERS ............................................................................................94 – 96 59 -- 90 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 8. LONG-TERM OBLIGATIONS ............................................................................97 – 110 A. Bonds and Loans Outstanding ...................................................................... 97 - 99 B. Debt Service Requirement to Maturity ................................................................100 C. Changes in Long-Term Liabilities ............................................................. 101 - 102 D. Reconciliation of Original Issue with Financial Reporting .................................103 E. Pledged Revenues ................................................................................................104 F. New Indebtedness Issued .....................................................................................105 G. Additional Debt Disclosures, including Direct Borrowing and Direct Placements .......106 H. Non-Asset Debt ....................................................................................................107 I. Defeased Debt ......................................................................................................108 J. Conduit Debt ........................................................................................................109 K. Interest Expense ...................................................................................................110 L. Component Unit Long-term Debt ........................................................................110 9. PENSION PLANS ............................................................................................... 111 - 125 A. Pension Plans ............................................................................................. 111 - 120 B. Pension Liability, Expense, Deferred Outflows And Deferred Inflows of Resources Related to Pensions ....................... 121 - 123 C. Defined Contribution Plan ...................................................................................124 D. Unfunded Pension Liability .................................................................................125 10. POST EMPLOYMENT BENEFITS OTHER THAN PENSION (OPEB) ......... 126 - 133 11. DEFERRED COMPENSATION PROGRAM ..............................................................134 12. RISK FINANCING ............................................................................................. 134 - 138 A. Public Liability and Workers Compensation ............................................. 134 - 137 B. Self-Insured Health Plan ......................................................................................138 13. OTHER REQUIRED INDIVIDUAL FUND AND COMPLIANCE DISCLOSURES................................................................................................... 139 - 140 A. Compliance with Finance Related Legal and Contractual Provisions .................139 B. Fund Deficits ........................................................................................................139 C. Landfill Closure and Postclosure Care Costs.............................................139 – 140 14. LESSOR OPERATING LEASE.......................................................................... 141 - 143 A. Jacksonville Jaguars, LLC. ........................................................................ 141 - 143 B. Shands Jacksonville .............................................................................................144 60 -- 91 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 15. LITIGATION, CONTINGENCIES, AND COMMITMENTS ........................... 144 - 151 A. Litigation ..............................................................................................................144 B. Grants and Contracts ............................................................................................144 C. Self-Insurance ......................................................................................................145 D. Pollution Remediation ............................................................................... 145 - 147 E. Garage Development Agreement .........................................................................147 F. Construction and other significant Commitments ..................................... 148 - 149 G. Encumbrance Commitments ................................................................................150 H. Tax Abatements ...................................................................................................151 16. MAJOR DISCRETELY PRESENTED COMPONENT UNITS - ADDITIONAL DISCLOSURE ........................................................................................... 152 - 154 17. SUBSEQUENT EVENTS .............................................................................................155 18. NET POSITION...................................................................................................156 – 157 19. FUND BALANCE DISCLOSURE ..................................................................... 158 - 161 A. Fund Balance Classification ...................................................................... 160 - 161 61 -- 92 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of the City of Jacksonville, Florida (the City) conform to accounting principles generally accepted in the United States (GAAP) as applicable to governments. The following is a summary of the more significant policies. Notes 1C through 19 are note disclosures of the primary government with significant disclosures for major component units incorporated within. Additional significant component unit disclosures are presented in Note 16. A. Basis of Presentation: The accompanying financial statements of the City have been prepared in conformity with GAAP as prescribed by the Governmental Accounting Standards Board (GASB). GASB is the accepted standard-setting body for establishing governmental accounting and financial reporting principles for units of local government. B. Financial Reporting Entity: The City is a consolidated city/county political entity created by Chapter 67-1320 of the Laws of Florida. When consolidation occurred on October 1, 1968, all existing municipalities, authorities and public agencies within Duval County, except for the Duval County School Board, were merged into a single new corporate and political entity also known as the City of Jacksonville. At the same time, however, the cities of Jacksonville Beach, Atlantic Beach, Neptune Beach and the Town of Baldwin elected to retain local autonomy for certain municipal purposes and were reconstituted as separate and distinct urban service districts. The consolidated city government, which is comprised of an elected City Council (19 members) and mayor, provides, under the administration of the appointed chief administrative officer, services to 1,016,809 residents living in an 840.1 square-mile area. To conform to the traditional county organization of government in the State of Florida, the City retained the offices of the Sheriff, Property Appraiser, Tax Collector, Supervisor of Elections, and Clerk of the Circuit Court, which are also elected by the citizenry. These officers are considered to be not only county officers, but also officers of the consolidated government, and therefore are considered as part of the primary government. The three beach cities and the Town of Baldwin continue to function as separate municipal governments. This report includes all funds, departments, agencies, boards and commissions, and other organizational units that are administered by the mayor and/or controlled by or dependent upon the City Council as set forth in the City Charter. The City, a primary government, has also considered for inclusion all potential component units for which it may be financially accountable and other organizations for which the nature and significance of their relationship with the City are such that exclusion would cause the City's financial statements to be misleading or incomplete. In GASB codification section 2100 Defining the Financial Reporting Entity, the GASB has set forth criteria to be considered in determining financial accountability. 62 -- 93 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) B. Financial Reporting Entity: (continued) These criteria include appointing a voting majority of an organization's governing body and (1) the ability of the City to impose its will on that organization; or (2) the potential for the organization to provide specific financial benefits to or impose specific financial burdens on the City. Additionally, an entity may also meet the criteria for inclusion if the organization is fiscally dependent on the City and the potential financial benefit/burden relationship mentioned above exists. As required by GAAP, these financial statements present the City of Jacksonville (the primary government) and its component units. The City has identified and included within the financial reporting entity, as its component units, legally separate organizations for which the City is financially accountable or for which a significant relationship with the City exists such that exclusion would cause the City's financial statements to be misleading or incomplete. The Jacksonville Public Library Board and the Downtown Investment Authority (DIA) are classified as dependent special districts. Per GASB codification section 2100, the Library Board and DIA are not considered component units as they are not legally separate organizations. Therefore, these activities are included as part of the primary government. Blended Component Unit. Blended component units, which are legally separate from the City, but are so intertwined with the City that they are, in substance, the same as the City. The Community Redevelopment Agencies (CRAs) are reported as part of the City and blended into the governmental funds. Community Redevelopment Agencies (CRAs) JIA, KingSoutel Crossing, Renew Arlington, Southside and Northbank Downtown are blended component units that are reported within the Tax Increment Districts special revenue fund. The City serves as the Board for JIA, KingSoutel Crossing, and Renew Arlington CRAs. The Downtown Investment Authority serves as the Board for Southside and Northbank Downtown. The CRAs are blended because City Council has an operational responsibility and because of the existence of a financial benefit/burden relationship. The CRAs issue a separate report that may be obtained from the City. Requests for information may be addressed to the City Comptroller, City of Jacksonville, 117 West Duval Street, Suite 375, Jacksonville, Florida 32202. 63 -- 94 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) B. Financial Reporting Entity: (continued) Component Unit Reported as a Fiduciary Fund. The Jacksonville Police and Fire Pension Board of Trustees, created under Article 22 of the City Charter, provide retirement services and benefits to eligible employees of the Office of the Sheriff and the Department of Fire and Rescue. The City appoints two members of the five-member board; one member is a police officer; one member is a firefighter; and the remaining member is appointed by the other four members. As sponsor, the City has the ability to modify the plan and to approve the defined benefit contribution to the Police and Fire Pension Board of Trustees in the City's annual budget. The Police and Fire Pension Board of Trustees issues separate financial statements on the fund, which may be obtained from its administrative office at One West Adams Street, Suite 100, Jacksonville, Florida 32202-3616. These transactions are recorded in the Pension Trust Funds within the Fiduciary Funds financial statements. Discrete Component Units. These component units are entities that are legally separate from the City, but are financially accountable to the City, or whose relationships with the City are such that exclusion would cause the City's financial statements to be misleading or incomplete. The component units are reported separately to emphasize that they are legally separate from the primary government and are governed by separate boards. The footnotes include financial data for these entities. Each component unit listed below has a September 30 fiscal year end. Major Component Units JEA (formerly known as the Jacksonville Electric Authority) was created by Chapter 67- 1569 of the Laws of Florida to own, manage, and operate an electric utility system and a water and sewer utility system in Jacksonville and any or all counties adjacent thereto. The governing body of the JEA consists of seven members appointed by the mayor and confirmed by the City Council. The City has the ability to impose its will on JEA, manifested principally through formal budgetary approval. The JEA engages only in business-type activities and issues separate financial statements, which may be obtained from its administrative office in the JEA Plaza at 21 West Church Street, Jacksonville, Florida 32202. The Jacksonville Port Authority (JPA) was created by Chapter 2001-319 of the Laws of Florida to operate, manage, and control the publicly owned seaport and ancillary facilities located within Duval County and outside such boundary lines. The governing body of the JPA consists of seven members, four of whom are appointed by the mayor and confirmed by the City Council, and three of whom are appointed by the governor. The City can impose its will on the JPA through modification and approval of its budgets, which ensures strong accountability to the local constituent citizenry. The JPA engages only in business- type activities and issues separate financial statements. Requests for information may be addressed to the chief financial officer, Jacksonville Port Authority, P.O. Box 3005, Jacksonville, FL 32206-0005. 64 -- 95 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) B. Financial Reporting Entity: (continued) The Jacksonville Transportation Authority (JTA) is a public body politic and corporate agency of the State of Florida under Chapter 349 of the Florida Statutes. The governing body of the JTA consists of seven members, three of whom are appointed by the governor of Florida, three of whom are appointed by the mayor and confirmed by the City Council, and the seventh member is the district two secretary of the Florida Department of Transportation. The JTA is empowered to construct, improve, operate, and lease the Jacksonville Expressway System. The JTA is, however, fiscally dependent upon the City under Section 14 of the City Charter through approval of its budgets, which ensures strong accountability to the local constituent citizenry. Additionally, a financial burden relationship exists through the provisions of an interlocal agreement. The JTA engages in both governmental and business-type activities and issues separate financial statements, which may be obtained from its administrative office at 121 West Forsyth Street, Suite 200, Jacksonville, Florida 32202. Non-major Component Units The Jacksonville Housing Finance Authority (JHFA) was established pursuant to Chapter 52, Jacksonville Municipal Code, to alleviate a shortage of housing and capital investment for the people of Duval County, pursuant to Florida Statutes, Section 159.604. The City appoints all seven of the board members. The City has the ability to impose its will on the JHFA. The JHFA operates in conjunction with the Jacksonville Housing Commission, also created by Ordinance 2003-1058, and has the rights and duties necessary under Florida Statutes, Chapter 159, Part IV, to preserve outstanding debt, issue new debt and to shield the City from financial liability. The bonds issued and outstanding are included in Note 8J Conduit Debt. The JHFA engages only in governmental activities. There are no separately issued financial statements for the JHFA, whose financial activity is accounted for by the City. The JHFA financial statements are presented in the financial section of the City report. The Jacksonville Health Facilities Authority, created under Chapter 490 of the City Ordinance Code pursuant to Chapter 154 Part III, Laws of Florida, provides appropriate additional means to assist in the development, improvement, and maintenance of the public health. The Health Facilities Authority provides a method for the financing and refinancing, on a tax-exempt basis, projects on behalf of private corporations and organized not-for-profits that are authorized by law to provide hospital or nursing home services, thus providing facilities at favorable interest costs with a resultant decrease in health care costs for the users of health facilities within the City. All five members are appointed by the City Council, and the City has the ability to impose its will on the Health Facilities Authority. 65 -- 96 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) B. Financial Reporting Entity: (continued) The bonds issued by the Health Facilities Authority are special limited obligations of the Health Facilities Authority and the principal and interest are payable from rental payments. The principal and interest on the bonds shall never constitute an indebtedness of the City of Jacksonville, Duval County, the State of Florida or any municipality or political subdivision thereof. Accordingly, the bonds issued and outstanding are included in Note 8J Conduit Debt. During the fiscal year presented, the Health Facilities Authority had no financial transactions or assets and liabilities to report. Therefore, there are no separately issued financial statements. Related Organizations The Jacksonville Housing Authority (JHA) is governed by a seven-member board, whose members are appointed by the mayor and confirmed by City Council. However, the City does not have the ability to impose its will on JHA. The City cannot remove appointed members from the JHA Board at will. JHA managers are appointed by the JHA Board of Directors. The Board approves the operating budget and amendments to the budget. The City does not exercise influence in JHA management or operations. It does not approve JHA budgets and does not provide or collect major revenues of the JHA. Accordingly, the financial activities of the JHA are not included in the City's financial statements. The Duval County Research and Development Authority (Authority) is governed by a five-member board whose members are appointed by the City Council. However, the City does not have the ability to impose its will on the Authority. The City does not exercise influence over the management or operations of the Authority and is not financially accountable for the actions of the Authority. Accordingly, the financial activities of the Authority are not included in the City's financial statements. Jointly Governed Organization The North Florida Transportation Planning Organization (TPO) is an independent regional transportation planning agency for Duval, Clay, Nassau, and St. Johns counties. The mayor, three Jacksonville City council members, and various other leaders of the other affiliated communities and transportation agencies make up the board. There are currently 15 voting board members and five non-voting members. The City does not have an ongoing financial interest or responsibility to the TPO. However, since the board includes members from each of the governments that created it, the TPO is considered a jointly governed organization of the City. 66 -- 97 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) C. Basic Financial Statements: The basic financial statements include both citywide and fund level statements. The City, as the primary government, is reported separately from its component units. The citywide statements report on all of the activities of the City and its component units except those that are fiduciary in nature. Statements for fiduciary activities, such as employee pension plans, are presented in a separate section of this report. Both the citywide and fund level statements classify primary activities of the City as either governmental activities, which are primarily supported by taxes and intergovernmental revenues, or business type activities, which are primarily supported by user fees and charges. The citywide statement of net position reports all assets, deferred outflows of resources, liabilities, and deferred inflow of resources of the City, including both long-term assets and long-term debt and other obligations. The statement of activities reports the degree to which direct expenses of City functions are offset by program revenues, which include program specific grants and charges for services provided by a specific function. Direct expenses are those that are clearly identifiable with a specific function or program. The net cost of these programs is funded from general revenues such as taxes, intergovernmental revenue, and interest earnings. The fund level statements report on governmental, proprietary, and fiduciary fund activities. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund level financial statements. Since the fund level statements for governmental activities are presented using a different measurement focus and basis of accounting than the citywide statements governmental column (as discussed under Basis of Accounting in this summary of significant accounting policies), a reconciliation is presented on the page following each governmental fund financial statement that briefly explains the adjustments necessary to convert the fund level statements into the citywide governmental column presentations. As a general rule, the interfund activity has been eliminated from the citywide financial statements to avoid the doubling effect of internal service activity. However, functional expenses remain for services provided, and any remaining net resource is reported as program revenue. D. Fund Structure: The City's accounts are maintained in accordance with the principles of fund accounting to ensure compliance with limitations and restrictions placed on the use of resources available to it. Under fund accounting, individual funds are established for the purpose of carrying on activities or attaining objectives in accordance with specific regulations, restrictions, or limitations. Each individual fund is a self-balancing set of accounts recording assets, liabilities and residual equities or balances and revenues, expenditures / expenses, and changes therein. 67 -- 98 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) D. Fund Structure: (continued) For financial statement presentation, funds with similar characteristics, including those component units referenced above, are grouped into generic classifications as required by GAAP. A brief description of these classifications follows: Governmental Funds. These funds report transactions related to resources received and used for those services traditionally provided by city/county government. The following are major governmental funds used by the City: General Fund - The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Debt Service Funds: The Special Bonded Debt – Better Jacksonville Plan Obligations Fund accounts for the accumulation of resources for, and the payment of, principal and interest on the City’s special bonded obligations payable, which are related to the Better Jacksonville Plan. The Special Bonded Debt Obligations Fund accounts for the accumulation of resources for, and the payment of, principal and interest on the City’s special and limited bonded obligations, which are payable solely from and secured by a lien upon and pledge of the revenues under the respective bond ordinances. Special Revenue Fund: The Other Federal, State and Local Grants Fund records all other miscellaneous grants administered by the City from federal, state and local sources not specifically accounted for by other funds Other Non-major Governmental Funds: This is the aggregate of all of the non-major governmental funds. Proprietary Funds. These funds report transactions related to activities similar to those found in the private sector. Major proprietary funds include: The Solid Waste Disposal Fund accounts for the collection, recycling, and disposal of commercial and residential garbage services throughout the City, including the operation of three municipally owned landfill sites, two of which are closed. The City Venues Fund accounts for events held at TIAA Bank Field, Daily’s Place, Veterans Memorial Arena, the Baseball Stadium, Times Union Center for the Performing Arts, Prime Osborn Convention Center, and Ritz Theater. The Storm Water Services Fund accounts for the storm water utility financed by service charges, to be used for paying for costs of constructing and maintaining the storm water management system. 68 -- 99 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) D. Fund Structure: (continued) Other Non-major Enterprise - This is the aggregate of all of the non-major enterprise funds. Proprietary funds distinguish operating revenues and expenses from non-operating revenues and expenses. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with the funds' principal ongoing operation. The principal operating revenues for the City's proprietary funds are charges to customers for sales and services. Operating expenses include direct expenses of providing the goods or services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. In addition, the City reports the following fund types: Internal Service Funds - These funds account for services provided primarily to various departments of the City and to other governmental agencies. Since these funds principally service City departments, internal service fund statements are consolidated into the governmental activities column in the citywide presentation. These activities are fleet management, copy center, information technologies, legal, risk management activities, group health, public works, and the internal debt management fund. Services provided to other governmental agencies are not considered to be material. Private-purpose Trust Funds - These funds account for resources legally held in trust for the benefit of individuals pursuing higher education in music and urban studies. Earnings on invested resources may be used to support these activities but no expenditure may be made from the principal of these funds. Pension Trust Funds - These funds account for the activities of the Jacksonville Retirement System, the Defined Contribution Plans, and the Police and Fire Pension funds, which accumulate resources for pension benefit payments for qualified employees. Permanent Fund - This fund is used to account for activities of the City relative to cemetery maintenance at specified locations and supporting the Art in Public Places program. Fund resources are restricted. Only earnings on invested resources may be used to support these activities. Custodial Funds - These funds account for fiduciary activities that are not required to be presented as pension trust funds or private purpose trust funds. The Tax Collector Fund accounts for the collection of all taxes, revenues and other cash, the Clerk of the Circuit Court Fund accounts for revenues collected by the court system, and the Sheriffs Fund accounts for deposits held in accordance with statutes for civil action, safeguarding of monetary evidence, and inmate funds. 69 -- 100 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) E. Basis of Accounting: The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. The citywide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary and fiduciary pension trust fund financial statements. Custodial funds are accounted for using the full accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of the related cash flows. Property taxes are recognized as revenue in the year in which they are levied for. Grants and similar items are recognized as revenue when all eligibility requirements imposed by the provider are met. Governmental fund financial statements are reported using a current financial resources measurement focus and the modified accrual basis of accounting. With this measurement focus only current assets, current liabilities, deferred outflow of resources, and deferred inflow of resources generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Major revenues that are determined to be susceptible to accrual include property taxes, taxpayer-assessed tax revenues including sales and utilities services taxes, state shared revenue, intergovernmental revenue, charges for services and investment income. Generally, the City considers a 60-day availability period for revenue recognition. Federal and state grants collected on a reimbursement basis are recognized as revenue when reimbursable expenditures are made, and the City considers amounts received within one year as available. Ambulance billings also have a one-year availability period. Expenditures are recorded when the related fund liability is incurred, except for items that are not planned to be liquidated with expendable available resources. The City records an accrual for debt service liabilities and expenditures by providing financial resources to a debt service fund for payment of liabilities that will mature early in the following year. Exceptions to the general modified accrual expenditure recognition criteria include capital lease obligations that are recognized when paid, and payments for compensated absences, pension, OPEB (other post-employment benefits), pollution remediation obligations, and claims and judgments that are recognized when due. The City's policy is to use restricted resources first, then unrestricted resources, when both are available for use to fund an activity. 70 -- 101 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) F. Cash, Cash Equivalents, and Investments: Cash, cash equivalents and investments and related accrued investment earnings are reported in the financial statements as “Equity in cash and investments” under the City’s “pooling” concept (See Note 3). All monies, which are not legally restricted to separate administration, are pooled together for investment purposes while each individual fund and/or account is maintained on a daily transaction basis by the City Treasurer. Cash in escrow with fiscal agents is not included in the Statement of Cash Flows ending balances as the funds have been sent to trustee entities to be held for payment of bond principal and interest. Investment earnings are distributed in accordance with the participating funds’ relative percentage of investments. All fund types deposit monies into the equity in cash and investment pool of the City. The Proprietary Fund types use this pool as a demand deposit account, and accordingly all amounts in the pool are considered cash and cash equivalents for purposes of the Statement of Cash Flows. Operating and Pension Trust investments are stated at fair value, generally based on quoted market prices except as disclosed herein. Securities, traded on national or international exchanges are valued at the last reported sales price at current exchange rates. The fair value of real estate investments is based on independent appraisals or estimates of fair value as provided by third party fund managers. Investments that do not have an established market are reported at estimated fair value as provided by third party fund managers. Increases and decreases in the fair value of investments are reported as investment income. The City of Jacksonville’s swap policy allows for the use of interest rate swaps and other financial instruments to manage the City’s financial exposure. This policy went into effect on October 1, 2003 and was revised on August 9, 2011. While the City is authorized to utilize interest rate swaps to manage the interest rate risk associated with various assets, no investment interest rate swaps were used during the reporting period. G. Receivables: Receivables are stated net of estimated allowances for uncollectible amounts, which are determined based on past collection experience and current economic conditions, to the net realizable values. Types of receivables include amounts that are principally due from the State of Florida for state-shared revenues, mortgage, loan, and other receivables that have arisen in the ordinary course of business. Certain receivables and some mortgage receivables are related to loans made for economic development purposes. Repayment of these loans is contingent upon several economic factors that are outside of the control of the City. Due to the uncertainty over the ultimate collectability of these amounts, an allowance has been recorded in the amount equal to the balance of the receivable. H. Inventories: Inventories of materials and supplies are determined by both physical counts and through perpetual inventory systems stated at cost, which approximates market, using the average weighted costing method. Reported inventories in governmental funds are included within nonspendable fund balance because it is not in spendable form. In proprietary fund types, inventories are expended when consumed. 71 -- 102 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) I. Capital Assets: All purchased capital assets are recorded at cost when historical records are available and at estimated cost when no historical records exist. Donated capital assets are valued at their acquisition value on the date received. Generally, capital assets costing $1,000 or more and having a useful life of more than one year are capitalized. Infrastructure is capitalized based on the accumulated amounts charged to specific capital projects on an annual basis. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Capital assets are reported in the applicable governmental or business-type column in the citywide financial statements, and in the Proprietary Fund Level Statements. Depreciation on all capital assets is calculated using the straight-line method over the following useful lives: Infrastructure - Other 12 - 50 years Infrastructure - Bridges 100 years Buildings and improvements 12 - 45 years Furniture, equipment and library books 3 - 10 years Software Development 10 years The City capitalizes collections, such as artwork. The City has a collection of artworks in various sites throughout the interior and exterior of its public facilities. The value of the art is expected to either remain the same or increase over time, so it is not depreciated. Software development is capitalized if over a threshold of $30,000. J. Contributions: Contributions in the form of cash and capital assets to the governmental activities of the City are recognized on the Statement of Activities as revenues in the period they are received. Contributions of capital assets, primarily completed infrastructure from developers, are recognized at the fair value at the date of donation. All contributions are reported on the Statement of Activities as program revenues, with operating contributions reported separately from capital contributions. K. Interfund Activity: Interfund activity within and among the City’s three fund categories (governmental, proprietary, and fiduciary) are classified as reciprocal interfund activity and nonreciprocal interfund activity. Reciprocal interfund resources flow between funds with an expectation of repayment and are reported as interfund receivable and payables. Nonreciprocal interfund activities are flows of assets between funds without an equivalent flow of assets in return or without a requirement for repayment and are reported as transfers in governmental funds in the other financing sources section as well as after the non-operating revenues and expenses section in proprietary funds. 72 -- 103 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) L. Restricted Assets: Assets are reported as restricted in the Citywide Statement of Net Position and the enterprise fund level statements when constraints are placed on net position use. The constraints are either: (1) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments; or (2) imposed by law or through constitutional provisions or enabling legislation. M. Compensated Absences: City employees may accumulate earned personal leave benefits (compensated absences) at various rates within limits specified in collective bargaining agreements. This liability reflects amounts attributable to employee services already rendered, cumulative, probable for payment, and reasonably estimated in conformity with GASB Statement No. 16, Accounting for Compensated Absences. Compensated absences liabilities are accrued when incurred in the citywide financial statements, and the proprietary and fiduciary fund level financial statements. No expenditure is reported in the governmental funds for these amounts until the payment is made. No liability is recorded for nonvesting, accumulated sick pay benefits. Compensated absences liability is determined based on current rates of pay. N. Risk Financing: Pursuant to Florida Statute 768.28 “Sovereign Immunity” the City is self-insured for general and automobile liability for state tort claims in excess of $200,000 per person, and $300,000 per occurrence. The City has a package excess liability policy, which provides coverage for general liability at limits of $5 million per occurrence with a policy aggregate limit of $5 million and $1 million per occurrence for Automobile Liability. These limits are subject to a $1.5 million self-insured retention for the City and all other participating entities. The City continues to purchase a miscellaneous policy for Out-of State Automobile Liability for JSO, JFRD, JAA and the Department of Neighborhood’s Animal Care and Protective Services Division with $1 million in coverage, without a self-insured retention, for those instances where vehicles from these insureds must cross state lines. The City has an excess worker’s compensation policy with a self-insured retention of $1.5 million per occurrence and includes unlimited statutory coverage for worker’s compensation benefits, with exception of a $50 million aggregate limit for communicable disease and a $1 million limit for employer’s liability. The liability for self-insured losses is based on individual case estimates for reported claims, historical loss data and valuations performed by independent actuaries as of September 30, 2021, for incurred but not yet reported claims, claims development, and unallocated loss adjustment expenses. The liability for self-insured losses is accounted for in the Self-Insurance Fund (internal service fund) that pays for claims made against the City. 73 -- 104 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Effective January 1, 2015 the City elected to move from a fully insured plan to a self-funded arrangement for its group health coverage. The City obtained stop-loss insurance with a $550,000 specific deductible. The deductible was increased to $600,000 in 2017, $650,000 in 2018, $700,000 in 2019 and 2020, and $800,000 in 2021. In 2018 the City introduced a new health plan option with a separate administrator and stop loss coverage. The stop loss deductible under that option was $250,000 in 2018 and $325,000 in 2019, 2020, and 2021. Once a claim exceeds this threshold, the City is reimbursed for any excess expenses. The plan is funded by contributions from the City and employees. These funds reside in an internal service fund which is used exclusively for Employee Benefits. Florida statutes require a safe harbor threshold be maintained in plan reserves. See Note 12 for additional risk financing disclosure. O. Pension Costs: Substantially all permanent, full-time employees of the City are covered under two city sponsored defined benefit pension plans and a city sponsored defined contribution plan. For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, pension expense and fiduciary net position, the City and the Pension plans use the same basis for reporting as outlined in the notes to the financial statements. Employer contributions made subsequent to the measurement date and before the fiscal year end are recorded as deferred outflow of resources. Investments are reported at fair value. P. Landfill Closure and Postclosure Care Costs: The City recognizes municipal solid waste landfill closure and postclosure care costs under the State of Florida's Solid Waste Management Act of 1988, regulations of the Federal Environmental Protection Agency (EPA), and GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance contained in pre-November 30, 1989 FASB and AICPA pronouncements. For those landfills that stopped accepting solid waste prior to final implementation of the 1988 Act and EPA regulations, the total cost of municipal solid waste landfill (MSWLF) closure is recognized as a prepaid expense in the Solid Waste Disposal Enterprise Fund. The City issued bonds to pay for closure costs on closed landfills. Post-closure care costs on closed landfills are recorded as a liability based on engineer’s estimates. The City Council establishes rates that are designed to recover costs and believes it is reasonable to assume that such rates, which will recover the costs, can be charged to and collected from customers. The City intends to recover these MSWLF costs through future operating revenues of the Solid Waste Disposal Enterprise Fund. Accordingly, MSWLF costs are recognized as expenses each year to match the flow of revenue and bonds principal payments, thereby reducing the deferred charge. Expenses for closure and postclosure care costs are recorded each year and the liability is adjusted to the engineer’s estimate. MSWLF closure and postclosure care costs incurred for landfills accepting solid waste after final implementation of the 1988 Act and EPA regulations are recognized as an expense. A liability is recorded based upon the landfill capacity used during that year applied to the engineer’s estimate of closure and postclosure care costs. (See Note 13C.) 74 -- 105 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Q. Long-Term Obligations: In the city-wide financial statements, and proprietary funds 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 funds statement of net position. Special obligation bonds, which are supported by certain pledged revenues (other than ad valorem taxes), do not constitute a debt of the City and the City is not obligated to pay the bonds except from revenues pledged for such debt payments. Each governmental fund that has long-term liabilities, such as, compensated absences and pension liabilities are responsible for liquidating the same. Non Asset Bonds are created when the City issues debt and either (a) constructs an asset which will become the asset of another entity (e.g. State of Florida), (b) contributes proceeds to another entity (e.g. Shands Jacksonville Hospital) to participate in a construction project, or (c) provides an economic incentive to a development or redevelopment project. Part of the Better Jacksonville Plan (BJP) referendum was to make improvements to state roads and/or interchanges with/between state roads. While these projects enhance traffic movements in and around Jacksonville, the constructed assets and the future maintenance responsibility are transferred to the Florida Department of Transportation. Additionally, under the BJP program, the City provided for non-capital expenditures, such as septic tank remediation and ash clean up, from debt proceeds, which will not result in a capital asset of the City. The City has also provided grants to Shands Jacksonville Hospital, a provider of health care for indigents, from debt proceeds. The City and/or its Community Redevelopment Authority (CRA) districts, to encourage target development, will enter into incentive agreements (including grants and loans) which are, in some instances, designed to be repaid by either the CRA’s tax increment revenues and/or the developer. R. Categories and Classification of Fund Balance: Fund balance is classified using a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. Under GASB 54, fund balance categories include Nonspendable, Restricted, Committed, Assigned, and Unassigned. These classifications reflect not only the nature of funds, but also provide clarity to the level of constraint placed upon fund balance. Fund balance can have different levels of restraint, such as external versus internal compliance requirements. Unassigned fund balance is a residual classification within the General Fund. The General Fund should be the only fund that reports a positive unassigned balance. In all other funds, unassigned is limited to negative residual fund balance. For further details of the various fund balance classifications refer to Note 19. 75 -- 106 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) S. Bond Discounts, Premiums and Issuance Costs: In the fund financial statements, governmental funds recognize bond discounts, premiums and issuance costs in the current period. The face amount of debt issued and bond premiums are reported as other financing sources while discounts on issuance is reported as other financing uses. Issuance costs, whether or not withheld from the debt proceeds received, are reported as debt service expenditures. In the city-wide financial statements and for proprietary funds, material bond discounts and/or premiums are deferred and amortized as a component of interest expense over the term of the bonds using the straight-line method, which approximates the effective interest method. Issuance costs are expensed in the period in which they are incurred. T. Deferred Loss on Debt Refundings: Losses resulting from advance refundings of debt in the city-wide and proprietary fund statements are deferred and amortized, using a straight-line method, which approximates the effective interest method, over the shorter of the life of the new debt or the remaining life of the old debt. The amount deferred is reported as a component of Deferred Outflows in the accompanying financial statements and is expensed and reported as a component of interest expense. U. Use of Estimates: The preparation of financial statements, in accordance with GAAP, 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 the financial statements, and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. V. Reclassifications: Certain 2020 amounts have been reclassified to conform to the 2021 presentation. Additionally, amounts in the separately issued financial statements of component units have been reclassified to conform to the presentation of the primary government. W. Summarized Comparative Information: The basic financial statements include certain prior year summarized comparative information in total but not at the level of detail required for a presentation in conformity with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the City’s financial statements for the year ended September 30, 2020, from which the summarized information was derived. Limited 2020 comparative information was adjusted for comparability on some of the financial statements. 76 -- 107 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) X. Prepaids: Prepaid items consist of certain costs that have been paid prior to the end of the fiscal year but represent items that are applicable to future accounting periods. These amounts do not constitute available spendable resources even though they are a component of current assets. Prepaids are processed using the consumption method. Y. Accounting Pronouncements: In fiscal year 2021, the City adopted new statement of financial accounting standards issued by the GASB: GASB Statement No. 84, Fiduciary Activities GASB Statement No. 90, Majority Equity Interests – an amendment of GASB Statements No. 14 and No. 61 GASB Statement No. 93, Replacement of Interbank Offered Rates GASB Statement No. 84, Fiduciary Activities, clarifies the definition and criteria for identifying fiduciary activities. The statement also identifies fiduciary fund types, clarifies the presentation of fiduciary fund financial statements, and provides additional guidance in liability recognition. As a result, the City reclassified some fund categories and reports fiduciary custodial fund types. Additionally, implementing this standard resulted in the restatement of beginning net position in the Fiduciary statements (see Note 18B). GASB Statement No. 90, Majority Equity Interests – an amendment of GASB Statements No. 14 and No. 6. improves reporting for majority equity interest in legally separate organizations and improves reporting for certain component units. The statement defines equity interest and provides guidance on the accounting of related investments. GASB Statement No. 93, Replacement of Interbank Offered Rates addresses accounting and financial reporting issues resulting from the replacement of the interbank offer rate (IBOR). (The remainder of this page is intentionally left blank.) 77 -- 108 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Y. Accounting Pronouncements: (continued) The Governmental Accounting Standards Board has issued the following statements that will become effective in the future. GASB Statement No. 87, Leases GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period GASB Statement No. 91, Conduit Debt Obligations GASB Statement No. 92, Omnibus 2020 (certain provisions effective in the future) GASB Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements GASB Statement No. 96, Subscription-Based Information Technology Arrangements GASB Statement No. 97, Certain Component Unit Criteria and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans – an amendment of GASB Statements No. 14 and No. 84, and a supersession of GASB Statement No. 32 (certain provisions effective in the future) GASB Statement No. 99, Omnibus 2022 GASB Statement No. 100, Accounting Changes and Error Corrections—an amendment of GASB Statement No. 62 GASB Statement No. 101, Compensated Absences The City is currently evaluating the effects that these statements will have on its future financial statements. 2. BUDGETARY DATA The City presents a Budgetary Comparison Schedule for the General Fund as Required Supplementary Information. For this reporting period, the Other Federal, State and Local Grants Fund special revenue fund met the criteria of a major fund but is not annually budgeted. No other special revenue funds met the major fund criteria. The City’s budgetary comparison reporting and Notes to Required Supplementary Information containing descriptions of the City’s budgetary policies and processes are included in the Required Supplementary Information section of this report. 78 -- 109 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021__________________________ 3. CASH, INVESTMENTS AND SECURITIES LENDING A. Cash on Deposit The City maintains a cash and investment pool that is available for use by all funds except for monies legally restricted to separate administration (i.e. pension plan custodians and deferred compensation plan administrators). The “Equity in Cash and Investments” on the City Wide Financial Statements, consists of cash and investments owned by each fund and defined as resources that can be liquidated without delay or penalty. Cash and investments held separately where contractual arrangements and bond covenants require such arrangements, are classified as “restricted assets.” Investment earnings are allocated to the individual funds monthly based on the funds’ weighted average daily cash and investment balance. At September 30, 2021, primary government deposits in financial institutions totaled $463.2 million. Monies on deposit with financial institutions in the form of demand deposit accounts, time deposit accounts and certificates of deposit are defined as public deposits. All of the City’s public deposits are held in qualified public depositories pursuant to State of Florida Statutes, Chapter 280, “Florida Security for Public Deposits Act”, and covered by federal depository insurance. For amounts in excess of such federal depository insurance the Act provides that all qualified public depositories are required to pledge eligible collateral having a market value equal to or greater than the average daily or monthly balance of all public deposits, times the depository’s collateral pledging level. The pledging level may range from 50% to 125% depending upon the depository’s financial condition and establishment period. The Public Deposit Security Trust Fund has a procedure to allocate and recover losses in the event of a default or insolvency. When public deposits are made in accordance with Chapter 280, no public depositor is liable for any loss thereof. Any losses to public depositors are covered by applicable deposit insurance, sales of securities pledged as collateral and, if necessary, assessments against other qualified public depositories of the same type as the depository in default. B. Investments and Investment Practices 1. a. General Operating Investments The City’s operating fund investment guidelines are defined by City Ordinance Code Section 110, Part 2 and a written Investment Policy (the “Policy”) as approved by City Council. The Policy establishes a diversified investment strategy, both by type of investment and by manager, a minimum credit quality, and duration limitations. An internal Investment Committee has oversight, within Policy limits, of the implementation and direction of investment strategies. The Policy is reviewed annually for any adjustments due to changes or developments within the investment markets that may provide enhanced investment and/or risk management opportunities. The City’s Pension Funds and Component units maintain their own investment policies. 79 -- 110 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021__________________________ 3. CASH, INVESTMENTS AND SECURITIES LENDING (continued) B. Investments and Investment Practices (continued) 1. a. General Operating Investments (continued) Other than operating cash invested overnight through the City’s zero balance sweep accounts, all invested cash is managed by third-party money managers. Performance benchmarks for the Portfolio are established in the Investment Policy and performance benchmarks for each of the specific third party managers are established by the Investment Committee. The Policy defines the Average Duration and Compliance Categories for investments. Compliance Category limits are stated as a percentage of the Fiscal Year 2020 Normal Portfolio Balance of $1.37 billion, which is defined by Ordinance as the average total portfolio balance for the proceeding twelve months. Performance and compliance reports are prepared for the Investment Committee monthly. The City employs an independent investment custodian who takes direction from the money managers and independently settles all trades. The custodian provides performance and compliance reporting at both the portfolio level and by individual manager. The following schedule reports portfolio compliance at year end, as well as the maximum exposure for each compliance category during the year. Certain compliance categories include assets also measured in another compliance category, i.e. “US Government” issued treasury bonds are also appropriately included in the “US Government plus agencies” category. As a result, the amounts reported as year-end compliance exposures exceed the portfolio balance at year end in aggregate. (The remainder of this page is intentionally left blank) 80 -- 111 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021__________________________ 3. CASH, INVESTMENTS AND SECURITIES LENDING (continued) B. Investments and Investment Practices (continued) 1. a. General Operating Investments (continued) b. General Operating Investments - Fair Value Measurements The City 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 prices in active markets for identical assets; Level 2 inputs are significant other observable inputs and valued with the market approach valuation technique; Level 3 inputs are significant unobservable inputs. Compliance Guideline Exposure to S pecific Guideline Year end Exposure % During Year By Policy Duration 1 3.36 NA 3.47 5.00 Liquidity 423,312,207 $ 30.7% 44.8% 100.0% Requirements USG + Agencies 514,539,246 $ 37.3% 54.6% 100.0% US Govt (USG) 327,619,190 23.8% 36.5% 100.0% Constraints Agencies 186,920,056 $ 13.6% 19.5% 45.0% M BS 147,055,260 10.7% 13.7% 35.0% Agency M BS 107,100,577 7.8% 10.5% 35.0% Non-Agency M BS 39,954,683 2.9% 3.4% 15.0% Asset Backed Securities 30,806,387 2.2% 3.2% 7.5% Corporates 296,316,604 21.5% 29.2% 60.0% Corporates > 1 Year 233,497,517 16.9% 21.6% 40.0% M unicipal Bonds 9,456,185 0.7% 1.0% 10.0% Bond Funds 306,525,269 22.2% 40.5% 85.0% M oney M arket Funds 344,359,834 25.0% 32.0% 40.0% Certificates of Deposit - 0.0% 0.0% 20.0% Repurchase agreements - 0.0% 0.0% 20.0% Rule 144a Securities 47,783,307 3.5% 4.1% 10.0% S pecialty Risk High Yield 54,865,924 $ 4.0% 4.6% 9.0% International 36,286,565 2.6% 3.2% 7.5% International (non-hedged) - 0.0% 0.0% 5.0% Emerging M arket 4,161,238 0.3% 0.4% 5.0% Duration > 8.5 30,922,384 2.2% 3.5% 7.5% Normal Portfolio Balance 1,377,644,903 $ 1 Commingled Funds and Cash are excluded Operating Fund Compliance Guideline Characteristics as of S eptember 30, 2021 Maximum % of Normal Portfolio Balance S ector Guideline Exposures 81 -- 112 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021__________________________ 3. CASH, INVESTMENTS AND SECURITIES LENDING (continued) B. Investments and Investment Practices (continued) 1. b. General Operating Investments - Fair Value Measurements (continued) The City has the following recurring fair value measurements as of September 30, 2021: • Corporate Stock (Common) – Valued using the primary exchange closing price. • Corporate Stock (Preferred) – Valued using prevailing market bids and based upon calculations that reflect the expected price to an investor in an orderly transaction. • Registered Investment Co. – Valued at the daily closing net asset value (NAV) as reported by the fund. Short term fixed income investment funds (security maturities that do not exceed one year) may be valued using book value. • U.S. Government Securities – Short term US government fixed income securities (with maturities that do not exceed one year) are valued using book value. Securities with maturities greater than one year are valued using prevailing market bids and based upon calculations that reflect the expected price to an investor in an orderly transaction. • Corporate Debt Instruments – Short term corporate debt securities (with maturities that do not exceed one year) are valued using book value. Securities with maturities greater than one year are valued using prevailing market bids or a measurable market close and are based upon calculations that reflect the expected price to an investor in an orderly transaction. • Common/Collective Trusts – Valued based on an appraisal or calculated and assigned by a general or managing partner of the vehicle in which the investment is held. Investment Type Total Fair Value Quoted Prices in Active Markets For Identical Assets (Level 1) Significant Observable Inputs (Level 2) * Significant Unobservable Inputs (Level 3) Corporate Stock - Common - - - - Corporate Stock - Preferred 1,102,319 - 1,102,319 - Registered Investment Companies 696,189,657 696,189,657 - - U. S. Government Securities 430,363,648 302,147,644 128,216,004 - Corporate Debt Instruments 314,173,857 - 314,173,857 - Common/Collective Trust 139,369,827 - - 139,369,827 **Other Investments (11,430,505) (24,078,921) 12,648,416 - Total Investments 1,569,768,803 $ 974,258,380 $ 456,140,596 $ 139,369,827 $ * Market approach valuation technique used Fair Value of Assets by Measurement Type as of September 30, 2021 Operating Fund **Composed of Taxable Municipals, Non-US Bonds, Other Short Term Bonds, and Cash/Interest/Pending trades as of 9/30/21. 82 -- 113 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021__________________________ 3. CASH, INVESTMENTS AND SECURITIES LENDING (continued) B. Investments and Investment Practices (continued) 2. a. Pension Plan Investments The City’s two separate defined benefit pension plans are the Jacksonville Retirement System and the Police and Fire Pension Plan. Investments in the City’s two plans are governed by state statute and locally adopted investment policies. These policies establish investment objectives and guidelines for the portfolio as a whole, for each individual manager, as well as by instrument and issuer. The following schedules are presented for only the Jacksonville Retirement System and Police and Fire Pension Fund investments: Equities Bonds Other Cash Total Percentage Equity (Domestic) 1,024,005,461 $ - $ 0.26 $ 8,432,548 $ 1,032,438,008 $ 41% Large Cap Value 270,686,577 - - 3,150,855 273,837,432 11% Large Cap Growth 195,761,977 - - 2,177,447 197,939,424 8% Large Cap Core 290,890,471 - 0.26 210,594 291,101,065 11% Small Cap Value 113,515,844 - - - 113,515,844 4% Small Cap Growth 153,150,592 - - 2,893,652 156,044,243 6% Small Cap Core - - - - - 0% Transition Account - - - 12,944 12,944 0% Equity (International) 623,047,679 $ 55,039 $ 421.91 $ 6,909,182 $ 630,012,322 $ 24% Value 260,599,050 - 0.03 $ 3,148,858 263,747,908 10% Growth 223,068,587 - 0.02 $ 2,826,738 225,895,325 9% Emerging 139,380,042 55,039 421.86 $ 933,587 140,369,089 5% Bonds 167,616 $ 440,666,800 $ 1,671,898.72 $ 28,497,525 $ 471,003,839 $ 18% Intermediate - - - $ - - 0% Aggregate 167,616 440,666,800 1,671,898.72 $ 28,497,525 471,003,839 18% Inflation Protected - - - $ - - 0% Cash Account - $ - $ - $ 6,660,512 $ 6,660,512 $ 0% Other 5,647,294 $ - $ 468,189,024.87 $ (26,114,705) $ 447,721,614 $ 17% Real & Diversifying Assets 5,647,294 - 468,189,024.87 $ (26,114,705) 447,721,614 17% Total investments 1,652,868,049.96 $ 440,721,838.74 $ 469,861,345.76 $ 24,398,005.68 $ 2,587,849,240 $ 100% Less: Amount reported as receivables (1,947,078) $ Total Investments less receivables 2,585,902,162 $ Jacksonville Retirement S ystem Distribution by Asset Type as of S eptember 30, 2021 83 -- 114 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021__________________________ 3. CASH, INVESTMENTS AND SECURITIES LENDING (continued) B. Investments and Investment Practices (continued) 2. a. Pension Plan Investments (continued) (The remainder of this page is intentionally left blank) Equities Bonds Other Cash Total Percentage Equity (Domestic) 1,011,112,594 $ - $ - $ 5,805,552 $ 1,016,918,146 $ 41% Large Cap Value 287,872,998 1,812,291 289,685,289 12% Large Cap Growth 274,790,912 2,826,765 277,617,677 11% Large Cap Core 284,025,394 14,857 284,040,250 12% Small Cap Value 82,579,853 1,151,640 83,731,493 3% SM ID Cap Growth 81,843,437 - 81,843,437 4% Equity (International) 583,861,484 $ - $ - $ 7,515 $ 583,868,999 $ 24% Value 226,170,192 7,393 226,177,585 9% Growth 166,447,516 - 166,447,516 7% Emerging M arkets 191,243,777 122 191,243,899 8% Bonds - $ 589,712,465 $ - $ 4,613,114 $ 594,325,579 $ 24% Intermediate 81,426,151 1,500,672 82,926,823 3% Aggregate 508,286,315 3,112,442 511,398,756 21% Cash Account 365,773 $ 365,773 $ 0% Other - $ - $ 274,371,009.87 $ 14,192.39 $ 274,385,202 $ 11% Real Estate 274,371,009.87 $ - 274,371,010 11% M LPs - $ 14,192 14,192 0% Total investments 1,594,974,078 $ 589,712,465 $ 274,371,009.87 $ 10,806,146 $ 2,469,863,699 $ 100% Distribution by Asset Type as of S eptember 30, 2021 Police and Fire Pension Fund 84 -- 115 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021__________________________ 3. CASH, INVESTMENTS AND SECURITIES LENDING (continued) B. Investments and Investment Practices (continued) 2. b. Pension Plan Investments – Fair Value Measurements The Pension Plans categorize 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 input are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs and valued with the market approach valuation technique; Level 3 inputs are significant unobservable inputs. The City has the following recurring fair value measurements as of September 30, 2021: • Corporate Stock (Common) – Valued using the primary exchange close price. • Corporate Stock (Preferred) – Valued using prevailing market bids and based upon calculations that reflect the expected price to an investor in an orderly transaction. • Registered Investment Co. – Valued at the daily closing net asset value (NAV) as reported by the fund and as supplied by third party vendors to the city’s custodian. Short term fixed income investment funds (security maturities that do not exceed one year) may be valued using book value. • U.S. Government Securities – Short term US government fixed income securities (with maturities that do not exceed one year) are valued using book value. Securities with maturities greater than one year are valued using prevailing market bids and based upon calculations that reflect the expected price to an investor in an orderly transaction. • Corporate Debt Instruments – Short term corporate debt securities (with maturities that do not exceed one year) are valued using book value. Securities with maturities greater than one year are valued using prevailing market bids or a measurable market close and are based upon calculations that reflect the expected price to an investor in an orderly transaction. Investment Type Total Fair Value Quoted Prices in Active Markets For Identical Assets (Level 1) Significant Observable Inputs (Level 2)* Significant Unobservable Inputs (Level 3) Corporate Stock - Common 423,744,014 423,744,014 - - Corporate Stock - Preferred - - - - Registered Investment Companies 24,613,642 24,613,642 - - U. S. Government Securities 111,109,926 63,297,566 47,812,360 - Corporate Debt Instruments 112,856,038 - 112,856,038 - Common/Collective Trust 1,002,311,880 - - 1,002,311,880 Partnership/Joint Venture Interest 470,619,055 - 470,619,055 Pooled Separate Accounts 92,442,713 - - 92,442,713 **Other Investments 350,151,972 (27,811,117) 699,345 377,263,744 Total Investments 2,587,849,240 $ 483,844,105 $ 161,367,742 $ 1,942,637,393 $ * Market approach valuation technique used **Composed of 103-12 Investments, Other Short Term Bonds, Derivatives, and Cash/Dividends/Interest/Misc. Payables/Pending Trades as of 9/30/21. Jacksonville Retirement System Fair Value of Assets by Measurement Type as of September 30, 2021 85 -- 116 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021__________________________ 3. CASH, INVESTMENTS AND SECURITIES LENDING (continued) B. Investments and Investment Practices (continued) 2. b. Pension Plan Investments – Fair Value Measurements (continued) • Common/Collective Trusts – Valued based on an appraisal or calculated and assigned by a general or managing partner of the vehicle in which the security is held. • Partnership/Joint Venture Interests – Underlying equity investments valued using the primary exchange close price. Underlying non-equity investments valued based on an appraisal or calculated and assigned by a general or managing partner of the vehicle in which the investment is held. • Pooled Separate Accounts - Valued based on an appraisal or calculated and assigned by a general or managing partner of the vehicle in which the investment is held. Separately issued financial statements for the Police and Fire Pension Plan are available from: Police and Fire Pension Fund One West Adams Street, Suite 100 Jacksonville, FL 32202 Investment Type Total Fair Value Quoted Prices in Active Markets For Identical Assets (Level 1) Significant Observable Inputs (Level 2)* Significant Unobservable Inputs (Level 3) Cash and Short Term Investments 11,825,525 11,825,525 - - Commercial Mortgage Backed Securities 1,132,979 - 1,132,979 - Asset Backed Securities 26,088,314 26,088,314 Corporate Bonds 142,176,589 - 142,176,589 - Funds - Other Fixed Income 101,497,688 - 101,497,688 - Government Bonds 50,438,825 - 50,438,825 - Government Mortgage Backed Securities 20,666,314 - 20,666,314 - Common Stock 1,673,435,236 1,673,435,236 - - Preferred Equities 1,783,703 1,783,703 - - International Equities 166,447,516 166,447,516 - - Real Estate 274,371,010 - 267,213,010 7,158,000 Total Investments 2,469,863,699 $ 1,853,491,980 $ 609,213,720 $ 7,158,000 $ * Market approach valuation technique used Fair Value of Assets by Measurement Type as of September 30, 2021 Police and Fire Pension Fund 86 -- 117 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021__________________________ 3. CASH, INVESTMENTS AND SECURITIES LENDING (continued) B. Investments and Investment Practices (continued) 3. Interest Rate Risk Interest rate risk is controlled primarily through duration, which is a measure that approximates the change in value of a bond, or bond portfolio, for a given change in interest rates. In general, shorter duration measures are less sensitive to interest rate shifts, while longer durations are more sensitive. To limit the portfolio volatility associated with changes in interest rates, the City’s Investment Policy Statement restricts the average duration of the overall portfolio to a range of 0.75 – 5.00 years, of which, no more than 7.5% of the individual securities in the portfolio can have a duration greater than 8.5 years. This guideline applies to all investment types underlying the portfolio including, but not limited to, government, agency, corporate, international, and mortgage-backed securities, as referenced in Section 3. B. 1. 4. Credit Quality The Operating and Pension portfolios measure credit quality of the fixed income holdings contained therein using Moody’s rating schedule. Within the Operating Portfolio, the City’s Investment Policy Statement is designed to control credit risk by requiring both, minimum amounts that must be invested in the highest quality U.S. Government securities, as well as a maximum limit of 9.0% of the normal portfolio balance in non- investment grade securities. This is reported and monitored monthly by the Investment Committee and staff. Credit Quality for the Pension Plan is reported on a quarterly basis and is monitored by the Pension Board of Trustees, staff to the board, and by the plan’s consultant. Credit Quality reports are provided on the overall portfolios to illustrate the credit risk at fiscal-year end. Ratings definitions: Treasury – United States Treasury Securities (Included in Aaa) Agency – Government Agency Securities (Included in Aaa) Aaa (AAA) – Highest Investment Grade Quality Rating Aa1–Aa3 (AA+ to AA-) – Medium Investment Grade Quality Rating A1-A3 (A+ to A-) – Medium Low Investment Grade Quality Rating Baa1-Baa3 (BBB+ to BBB-) – Lowest Investment Grade Quality Rating Ba1-Ba3 (BB+ to BB-) – Highest Non-investment Grade Quality Rating Commingled – Securities that are not applicable to Quality Ratings - they predominantly represent mutual funds that are listed and valued as a whole, not individual holdings, as well as minor exposure to non-investment grade securities. General Employee Pension Plan Police and Fire Pension Fund Quality Breakdown Portfolio (%) Portfolio (%) Portfolio (%) Aaa 45.8% 27.7% 15.4% Aa1-Aa3 5.1% 0.3% 1.8% A1-A3 10.4% 4.2% 8.9% Baa1-Baa3 14.6% 16.6% 23.0% Ba1-Ba3 2.5% 0.3% 5.9% Other 8.4% -1.1% 45.0% Commingled 13.3% 52.0% 0.0% 100% 100% 100% Operating Portfolio Credit Quality September 30, 2021 87 -- 118 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021__________________________ 3. CASH, INVESTMENTS AND SECURITIES LENDING (continued) B. Investments and Investment Practices (continued) 5. Custodial Credit Risk The custodial relationship for General Investments and Pension plans are governed by written agreements that are executed by all parties and specifies that, all securities owned and cash held by the City or its Pension plans shall be held in the City's, or its nominee's, name in an account separate from all other accounts maintained by the custodian and shall at all times, while in the custody of the Custodian, be designated as an asset of the City or its Pension Trust. 6. Foreign Currency The City has nominal exposure to foreign currencies due to investments in non-U.S. markets implemented through our money managers’ portfolios. Foreign currencies will fluctuate relative to the U.S. dollar, but it is believed that the diversification benefits outweigh potential risks. Given the limited exposure, foreign currency risk is considered minor. C. Securities Lending The City participates in securities lending with both its Operating and Pension portfolios. The City has a contract with its custodian, The Bank of New York Mellon (the City’s Operating Portfolio and the Jacksonville Retirement System) that allows the custodian, acting as agent, to lend securities held in the portfolios with the intent of generating additional interest income. Securities are loaned against collateral valued at a minimum of 102% of the fair value of the securities plus any accrued interest. If the broker/dealer fails to return the security upon request, the custodian, acting as agent, will utilize the collateral to replace the security borrowed. The securities loaned are on a rolling daily basis and the cash collateral can be deposited and/or withdrawn from the investment on a daily basis. The weighted average duration of the collateralized loans at September 30, 2021, was 80 days for the City’s Operating Portfolio and 108 days for the Jacksonville Retirement System. Exposure Percentage Exposure Percentage Exposure Percentage U.S. DOLLAR 1,569,423,092 $ 99.98% 2,587,058,836 99.97% $2,467,207,709 99.89% ARGENTINE PESO - 0.0% - 0.00% 171,241 0.01% MEXICAN NEW PESO 344,737 0.02% - 0.00% 791,605 0.03% BRAZIL REAL - 0.00% - 0.00% 369,674 0.01% CANADIAN DOLLAR - 0.00% - 0.00% 80,306 0.00% INDIAN RUPEE - 0.00% - 0.00% 1,243,163 0.05% EURO CURRENCY UNIT - 0.00% 790,404 0.03% - 0.00% POLISH ZLOTY 974 0.00% - 0.00% - 0.00% Total 1,569,768,803 $ 100.00% 2,587,849,240 $ 100.00% $2,469,863,699 100.00% Police and Fire Pension Fund Foreign Currency Exposure September 30, 2021 Jacksonville Retirement System Operating Portfolio 88 -- 119 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021__________________________ 3. CASH, INVESTMENTS AND SECURITIES LENDING (continued) C. Securities Lending (continued) The net asset value of the collateral may fluctuate and potentially subject the City to credit risk if the above-mentioned 102% daily adjusted collateral were to fall below 100%. As of September 30, 2021, the City of Jacksonville maintained a sufficient 102% collateral on loaned securities. During the fiscal year ended September 30, 2021; Securities Lending net income was $108.3 thousand ($27.3 thousand Operating, $81.0 thousand Jacksonville Retirement System). The City reviews the custodian’s securities lending operations on a monthly basis to ensure the appropriate risk/return trade-off. For accounting purposes, the Statements of Net Position and Changes in Net Position reflect the increase in assets, liabilities, interest income and expense associated with securities lending activity. (The remainder of this page is intentionally left blank) 89 -- 120 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 4. ACCOUNTS, OTHER RECEIVABLES AND LOANS The accounts, mortgages, and other receivable balances in the funds listed below, in thousands, are shown net of an allowance for doubtful accounts. No other funds had an allowance for doubtful accounts at September 30, 2021. Funds Accounts Other Receivables Allowance for Doubtful Accounts Net Amount Shown on Balance Sheet Major Governmental Funds General Fund 38,494 (30,927) 7,567 Other Federal, State & Local Grants 1,256 (48) 1,208 Non-Major Governmental Funds 3,190 (81) 3,109 Major Enterprise Funds Solid Waste 38,727 (5,011) 33,716 City Venues 10,884 (1) 10,883 Stormwater 28,490 (5,448) 23,042 Non-Major Enterprise Funds 160 (13) 147 Internal Service Funds 3,565 (17) 3,548 Fiduciary Funds Pension Trust Funds 3544 (22) 3,463 Custodial Funds 2,863 0 2,863 Funds Loans Receivable Allowance for Doubtful Accounts Net Amount Shown on Balance Sheet Non-Major Governmental Funds 8,401 (3,535) 4,866 Internal Service Funds 602,612 0 602,612 90 -- 121 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 5. PROPERTY TAXES A. Ad Valorem Property Taxes: Property tax collections are governed by Chapter 197, Florida Statutes. The Duval County Tax Collector bills and collects all property taxes levied within the consolidated city/county. Discounts of 4, 3, 2, and 1% are allowed for early payment in November, December, January, and February, respectively. The total millage rate levied by the City was 11.44190 for the fiscal year ended September 30, 2021. The Florida Constitution, as amended under Article VII, Section 4, limits the increase in homestead property valuations for ad valorem tax purposes to a maximum of the lesser of (i) three percent (3%) of the assessment for the prior year, or (ii) the percent change in the Consumer Price Index for the preceding calendar year. The first tax year in which the limitations of these constitutional provisions applied was January 1, 1995. Calendar year 1995 is the base year upon which assessed just value of the homestead property is determined. For non-homesteaded property, increases are capped at 10% of the previous year’s assessed value, regardless of market value changes. This process is referred to as “recapture” and was enacted into law in 2009. It does not apply to any millage levied by the School Board. (Section 193.1555 FS) B. Property Tax Calendar: The Tax Collector remits collected taxes at least monthly to the City. The City recognizes property tax revenue as it is received from the Tax Collector since virtually all taxes levied will be collected through the tax collection process within the fiscal year levied. The calendar of events is as follows: January 1 Property taxes are based on assessed value at this date as determined by the Duval County Property Appraiser. July 1 Assessment roll approved by the state. September 30 Millage resolution approved by the City Council. October 1 Beginning of fiscal year for which taxes have been levied. November 30 Last day for 4% maximum discount. April 1 Unpaid property taxes become delinquent. May 31 Tax certificates are sold by the Duval County Tax Collector by this date. This is the first lien date on the properties. 91 -- 122 of 389 -- 6. CAPITAL ASSET ACTIVITY Capital asset activity for the year ended September 30, 2021, was as follows (in thousands): Primary Government Beginning Balance September 30, 2020 Additions Dispositions/ Reclassifications Ending Balance September 30, 2021 Governmental activities: Capital assets not being depreciated: Land 313,904 $ 7,136 $ - $ 321,040 $ Easements 6,493 - - 6,493 Art In Public Places 1,236 180 - 1,416 Construction in progress 222,157 157,600 (6,852) 372,905 Furniture and equipment in work in process 17,840 - - 17,840 Purchased Software work in process 22,184 4,025 - 26,209 Total capital assets not being depreciated 583,814 168,941 (6,852) 745,903 Capital assets being depreciated: Buildings 872,267 1,289 - 873,556 Improvements 372,861 - - 372,861 Infrastructure 2,389,582 1,173 (1,028) 2,389,727 Furniture, equipment and library books 518,159 39,587 (25,160) 532,586 Purchased Software 28,014 (594) - 27,420 Internal Software 17,468 - - 17,468 Total assets being depreciated 4,198,351 41,455 (26,188) 4,213,618 Less accumulated depreciation for: Buildings 321,618 16,884 - 338,502 Improvements 178,816 - - 178,816 Infrastructure 1,240,470 84,108 (335) 1,324,243 Furniture, equipment and library books 362,796 39,558 (23,711) 378,643 Internal Software 27,929 116 - 28,045 Purchased Software 13,643 1,099 - 14,742 Total accumulated depreciation 2,145,272 141,765 (24,046) 2,262,991 Total capital assets being depreciated, net 2,053,079 (100,310) (2,142) 1,950,627 Governmental activities capital assets, net 2,636,893 $ 68,631 $ (8,994) $ 2,696,530 $ Beginning Balance September 30, 2020 Additions Dispositions/ Reclassifications Ending Balance September 30, 2021 Business-type activities: Capital assets not being depreciated: Land 46,364 $ - $ - $ 46,364 $ Easements 546 - - 546 Construction in progress 72,106 21,099 - 93,205 Total capital assets not being depreciated 119,016 21,099 - 140,115 Capital assets being depreciated: Buildings and Improvements 741,484 - - 741,484 Infrastructure 93,876 39 (1,028) 92,887 Furniture and Equipmets 17,313 775 (37) 18,051 Total assets being depreciated 852,673 814 (1,065) 852,422 Less accumulated depreciation for: Buildings and Improvements 336,240 13,845 - 350,085 Infrastructure 32,353 12,206 - 44,559 Furniture and Equipmets 11,805 1,437 (32) 13,210 Total accumulated depreciation 380,398 27,488 (32) 407,854 Total capital assets being depreciated, net 472,275 (26,674) (1,033) 444,568 Business-type activities capital assets, net 591,291 $ (5,575) $ (1,033) $ 584,683 $ CITY OF JACKSONVILLE, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 92 -- 123 of 389 -- 6. CAPITAL ASSET ACTIVITY Depreciation expense was charged to the functions of the primary government as follows (in thousands): Governmental activities: General government 57,282 $ Human services 1,432 Public Safety 8,356 Culture and recreation 10,189 Transportation 3,037 Economic environment 784 Physical environment 48,920 Total depreciation expense - governmental activities 130,000 $ Depreciation expense was charged to the functions of the business -type activities as follows (in thousands): Business-type activities: Parking system 324 $ Solid Waste 2,815 Stormwater Services 5,250 Equestrian Center 711 Capital Projects City Venues 18,719 Total depreciation expense - business-type activities 27,821 $ NOTES TO THE FINANCIAL STATEMENTS CITY OF JACKSONVILLE, FLORIDA FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 93 -- 124 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 7. INTERFUND RECEIVABLES, PAYABLES, ADVANCES, AND TRANSFERS Interfund Transfers (in thousands) TRANSFERS OUT MAJOR FUNDS General Solid City Fund Waste Venues TRANSFERS IN MAJOR FUNDS General Fund - 8,993 - Solid Waste 9,590 - - Other Federal State and Local Grants 500 - - City Venues 19,894 - - Special Bonded Debt 38,177 - - Special Bonded Debt-BJP - - - NON-MAJOR FUNDS Special Revenue 38,730 - 56 Capital Projects 16,719 - 100 Enterprise 1,096 251 - Internal Service 3,000 - - 127,705 9,245 156 Transfers between funds are made in the normal course of operations and are for the operational support of the fund receiving the transfer. In fiscal year 2021, transfers in support of Debt Service Funds were approximately 50% of total transfers. A large portion of the transfers out of the General Fund was in support of Non-Major Governmental funds, the largest being Special Revenue funds. Transfers from the General Fund include support of Major Enterprise funds, including the City Venues, Solid Waste, and Special Bonded Debt. Internal Service funds which include Fleet, Information Technologies, and Self Insurance received support from the General Fund. 94 -- 125 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 7. INTERFUND RECEIVABLES, PAYABLES, ADVANCES, AND TRANSFERS (continued) TRANSFERS OUT NON-MAJOR FUNDS Special Capital Permanent Internal Enterprise Revenue Projects Funds Service Total - 199 - - 7,158 16,351 - - - - - 9,590 - - - - - 500 3,882 5,426 - - - 29,201 - 6,988 - - - 45,166 - 67,106 - - - 67,106 - 36 200 42 - 39,063 - 2,054 - - - 18,873 - - - - - 1,347 - - - - - 3,000 3,882 81,810 200 42 7,158 230,198 (The remainder of this page is intentionally left blank) 95 -- 126 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 7. INTERFUND RECEIVABLES, PAYABLES, ADVANCES, AND TRANSFERS (continued) In fiscal year 2003, the City passed an ordinance to enter into a redevelopment agreement with Vestcor Companies and its subsidiaries for the redevelopment of the Lynch Building as a City historic landmark. In fiscal year 2003, the City used internal self-insurance funds, in an amount of $17,816,000, to provide permanent financing for the Lynch Building project. The self- insurance fund will be repaid on an annual basis with funds from the Northbank Downtown Tax Increment District. The terms of the repayment are a 30-year amortization, with a 20-year term at a fixed interest rate of 6% per year. Annual payments are $800,000 which includes both principal and interest. The balance of the loan at September 30, 2021 $8,462,417.32 which is recorded in the Self Insurance Fund as other receivables noncurrent. Vestcor will repay the City an amount of $17,816,000 to the Downtown Economic Development fund as created by ordinance 2000-1079-E. The terms of the repayment is a 40-year amortization, with a 20-year term at a fixed interest rate of 1.525% per year. Annual principal and interest payments were initially scheduled for $595,248 but were reduced to interest-only payments for the three-year period beginning March 1, 2010. The deferred principal payments were added to the balloon payment. A second modification agreement (Ordinance 2014-280) allowing suspension of half of the principal payments for a period of three years from October 2013 to September 2016 was approved by Council. Deferred principal payments have been added to the balloon payment which is now $12,125,133 due on August 1, 2023. The balance of the loan at September 30, 2021 was $12,899,749 which is recorded in the Downtown Economic Development Fund. (The remainder of this page is intentionally left blank) 96 -- 127 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 8. LONG-TERM OBLIGATIONS A. Bonds and loans outstanding: The bonds and loans outstanding as of September 30, 2021 are as follows (in thousands): Amount Amount Remaining True Interest GOVERNMENTAL ACTIVITIES: Issued Outstanding Coupon Rates Cost (1) Revenue Bonds Supported by General Fund: Special Revenue Bonds Series 2009C-2 (Taxable BABS) 10,995.0 1,495.0 4.990% (taxable) 3.111% Series 2011A 76,500.0 1,865.0 5.000% 4.674% * Series 2012C 183,058.0 105,275.0 4.000 - 5.000% 2.537% Series 2012D 11,840.0 3,560.0 5.000% 1.573% Series 2013A 27,175.0 27,175.0 4.000 - 5.250% 4.885% * Series 2014 61,401.0 59,597.0 5.000% 3.284% Series 2016A 48,133.7 44,108.2 4.000 - 5.000% 2.386% * Series 2017A 10,600.0 10,600.0 5.000% 3.402% * Series 2019A 100,334.2 95,760.8 5.000% (3) 2.005% Series 2020A 639.3 639.3 5.000% 2.309% Series 2020C 66,765.2 66,765.2 .393-2.766% 2.171% Total Revenue Bonds Supported by General Fund 597,441.4 $ 416,840.5 $ Amount Amount Remaining True Interest Issued Outstanding Coupon Rates Cost (1) Special Revenue (Covenant) Bonds Payable from Internal Service Operations: Special Revenue Bonds: Series 2009C-2 (Taxable BABs) 26,315.0 4,030.0 4.990% (taxable) 3.111% Series 2011A 32,380.0 1,910.0 5.000% 4.674% Series 2013A 26,860.0 21,115.0 4.000-5.250% 4.885% Series 2013B 35,145.0 10,245.0 3.793-4.643% (taxable) 3.469% * Series 2014 36,975.0 33,920.0 5.000% 3.284% Series 2016A 44,081.3 33,681.8 3.000 - 5.000% 2.386% * Series 2017A 80,330.0 69,185.0 4.000 - 5.250% 3.402% Series 2018 72,540.0 55,835.0 5.000% 3.212% * Series 2019A 50,960.0 48,650.0 5.000% 2.534% Series 2020A 122,990.7 122,990.7 4.000 - 5.000% 2.309% Series 2020C 38,719.8 38,719.8 .393-2.766% (taxable) 2.203% * Series 2021A 87,670.0 87,670.0 3.000 - 5.000% 1.963% Total Special Revenue Bonds Payable from Internal Service Operations 654,966.8 $ 527,952.3 $ 97 -- 128 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 8. LONG-TERM OBLIGATIONS (continued) A. Bonds and loans outstanding (continued) (in thousands) Amount Amount Remaining True Interest Notes Payable from Internal Service Operations: Issued Outstanding Coupon Rates Cost (1) Amortizing Short Term Debt 62,300.0 $ 32,300.0 $ Variable (2) N/A Total Notes Payable from Internal Service Operations 62,300.0 $ 32,300.0 $ Total bonds and notes payable from Internal Service Funds 717,266.8 $ 560,252.3 $ Revenue Bonds Supported by BJP Revenues: Transportation Sales Tax Revenue Bonds: Series 2012A 151,660.0 2,155.0 4.000% 4.324% Series 2012B 57,730.0 18,585.0 5.000% 3.076% Series 2015 197,295.0 181,395.0 2.000-5.000% 3.211% Series 2018 53,180.0 34,980.0 5.000% 2.460% Series 2020 155,040.0 155,040.0 0.550-2.050% 1.669% Infrastructure Sales Tax Revenue Bonds: * Series 2012 238,570.0 142,580.0 4.000-5.000% 3.910% * Series 2012A 41,095.0 41,095.0 5.000% 3.773% Series 2016 67,070.0 58,545.0 3.000 - 5.000% 2.433% Series 2021 16,530.0 $ 16,530.0 $ 0.425% 0.611% Total Revenue Bonds Supported by BJP Revenues 978,170.0 $ 650,905.0 $ Special Revenue (Covenant) Bonds Supported by BJP Revenues: Special Obligation Bonds: Series 2013C 31,565.0 31,565.0 5.250% 2.953% Series 2016B 58,645.0 56,485.0 2.250 - 5.000% 2.043% Series 2017B 31,455.0 31,455.0 5.000% 2.038% Series 2019B 45,535.0 45,535.0 5.000% 2.162% Series 2020B 15,670.0 $ 15,670.0 $ 5.000% 0.578% Total Special Revenue Bonds Supported by BJP Revenues 182,870.0 $ 180,710.0 $ Notes Payable Supported by BJP Revenues: State of Florida Infrastructure Bank: Series 2005 40,000.0 6,417.2 2.000% 1.901% Series 2007 48,698.2 $ 285.2 $ 2.500% 2.456% Total Notes Payable Supported by BJP Revenues 88,698.2 $ 6,702.4 $ Total Bonds and Notes Supported by BJP Revenues 1,249,738.2 $ 838,317.4 $ Total Governmental Activities 2,564,446.4 $ 1,815,410.2 $ 98 -- 129 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 8. LONG-TERM OBLIGATIONS (continued) A. Bonds and loans outstanding (continued) (in thousands) * Indicates individual bond series that were issued in support of both Governmental Activities and Business-Type Activities. (1) True Interest Cost (TIC) is the actual cost of financing debt and refers to the overall rate of interest to be paid over the life of the bonds, factoring in coupon interest, any premium or discounts, and the time value of money. (2) Variable Rate Debt - interest rate varied from .05% to .07% on September 30, 2021 (3) Total debt for this line item contains refunding for the ETR09A and Cap Proj. 08A and 08B bond issues. TIC was 2.004% for Cap Proj. portion and 2.005% for ETR portion. Higher figure of 2.005% used as it was the more conservative option. Amount Amount Remaining True Interest Revenue Bonds Supported by Business-Type Activities: Issued Outstanding Coupon Rates Cost (1) Infrastructure Sales Tax Revenue Bonds: * Series 2012 41,480.0 41,480.0 4.000-5.000% 3.910% * Series 2012A 73,795.0 73,795.0 5.000% 3.773% Capital Improvement Revenue Bonds: Series 2012 118,005.0 75,750.0 5.000% 2.642% Special Obligation Bonds: * Series 2014 1,784.0 1,713.0 5.000% 3.284% * Series 2017A 21,935.0 20,285.0 5.000% 3.402% * Series 2019A 330.8 314.2 5.000% 2.004% * Series 2021A 10,230.0 10,230.0 3.000-5.000% 1.963% Total Revenue Bonds Supported by Business-Type Activities 267,559.8 $ 223,567.2 $ Notes Payable Supported by Business-Type Activities: Amortizing Short Term Debt 14,400.0 $ - $ Variable (2) N/A Total Notes Payable from Internal Service Operations 14,400.0 $ - $ Total bonds and notes payable from Business-Type Activities 281,959.8 $ 223,567.2 $ COMPONENT UNITS: Bond and notes payable: JEA 2,999,710.0 JPA 257,230.0 JTA 118,304.0 Total Component Unit bonds and notes payable 3,375,244.0 $ 99 -- 130 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 8. LONG-TERM OBLIGATIONS (continued) B. Debt Service Requirements to Maturity: The Debt service requirements to maturity on long-term obligations at September 30, 2021 are as follows (in thousands). The amounts reported in the table below include designated maturities established by management (see discussion below) but does not reflect any accelerated amortizations that may result under term out provisions. The City’s Covenant Bond program allows for the issuance of debt which has both a stated maturity date and a designated maturity date. The stated maturity date is the initial maturity as the bond was sold, whereas the designated maturity date reflects the City’s intended maturity after a series of rolls/refundings. At each stated maturity the City can retire the maturing amount in whole or in part or refund the maturing bonds as a part of its annual capital borrowing into another stated maturity, variable rate debt, or fixed rate debt amortized to maturity as determined by then market conditions. There can be no assurance that the stated debt maturities can be revised in accordance with management’s intended plan. As of September 30, 2021, the City had retired all of its previously outstanding debt of this type. (The remainder of this page is intentionally left blank) Principal Fiscal Year Supported by General Revenues Supported by and Interest- Ending and Internal Service Funds BJP Revenues Enterprise Funds Primary September 30 Principal Interest Principal Interest Principal Interest Government Principal Interest 2022 64,695 40,696 48,203 31,972 7,345 10,697 203,608 104,969 113,865 2023 72,937 39,542 65,484 29,680 8,548 10,534 226,725 93,007 112,183 2024 72,297 36,462 69,095 27,245 9,013 10,108 224,220 109,362 108,310 2025 57,562 33,628 73,015 24,557 14,093 9,539 212,394 124,302 104,006 2026 54,159 31,099 76,950 21,478 18,626 8,725 211,037 136,298 99,393 2027-2031 256,854 120,581 414,305 57,461 153,791 26,190 1,029,182 896,255 401,218 2032-2036 221,674 61,295 76,675 6,349 8,806 1,813 376,612 990,182 233,189 2037-2041 132,160 23,994 14,590 515 3,345 169 174,773 749,585 76,488 2042-2046 30,310 6,100 - - - - 36,410 119,610 10,631 2047-2051 14,445 1,194 - - - - 15,639 11,195 858 2052-2056 - - - - - - - - - Totals 977,093 $ 394,591 $ 838,317 $ 199,257 $ 223,567 $ 77,775 $ 2,710,600 $ 3,334,765 $ 1,260,141 $ Bonds and Notes Payable from Governmental Activities Component Units Bonds Payable from Business-type Activities 100 -- 131 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 8. LONG-TERM OBLIGATIONS (continued) C. Changes in Long-Term Liabilities: Changes in long-term liabilities for the fiscal year ended September 30, 2021 are as follows (in thousands): (The remainder of this page is intentionally left blank) Balance Balance September 30, September 30, Due within 2020 Additions Reductions 2021 one year Governmental Activities: Debt activity supported by general revenues: Revenue bonds 445,615 $ - $ 28,774 $ 416,841 $ 24,540 $ Revenue bonds from direct borrowing - - - - - Debt activity- general revenues 445,615 - 28,774 416,841 24,540 Bonds/notes payable - Debt M anagement Fund Special revenue (covenant) bonds 474,485 87,670 34,203 527,952 40,154 Notes payable 62,300 7,300 37,300 32,300 - Debt activity - internal service funds 536,785 94,970 71,503 560,252 40,154 Debt activity - general revenues and internal service 982,400 94,970 100,277 977,093 64,694 Debt activity supported by BJP revenue: Revenue bonds - BJP 695,690 155,040 216,355 634,375 43,340 Revenue bonds - BJP from direct borrowing - 16,530 - 16,530 - Special revenue (covenant) bonds - BJP 225,420 - 44,710 180,710 2,260 Notes payable - BJP 12,870 - 6,167 6,703 2,603 Debt activity - BJP 933,980 171,570 267,232 838,318 48,203 Total governmental activities 1,916,380 266,540 367,509 1,815,411 112,897 Other related debt amounts: Issuance premiums 217,877 20,734 27,372 211,239 - Issuance discounts (1,572) - (161) (1,411) - Total other related debt amounts 216,305 20,734 27,211 209,828 - Accrued Compensated Absences 143,156 31,968 43,990 131,134 39,340 Estimated Liability for Self-Insured Losses 130,301 18,231 - 148,532 40,586 Pollution Remediation 89,321 - 1,028 88,293 - Other Post - Employment Benefits 261,160 155,260 - 416,420 - Net Pension liability 2,991,161 357,910 241,916 3,107,155 - Governmental activity long-term obligations 5,747,784 $ 850,643 $ 681,654 $ 5,916,773 $ 192,823 $ 101 -- 132 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 8. LONG-TERM OBLIGATIONS (continued) C. Changes in Long-Term Liabilities: (continued) (The remainder of this page is intentionally left blank) Balance Balance September 30, September 30, Due within 2020 Additions Reductions 2021 one year Business-Type Activities: Revenue Bonds 234,710 $ 10,231 $ 21,373 $ 223,568 $ 7,346 $ Revenue Bonds from direct borrowing - - - - - Less: Unamortized Discount/Premium 24,934 68 - 25,002 - Total Revenue Bonds, less Unamortized Discount/Premium 259,644 10,299 21,373 248,570 7,346 Accrued Compensated Absences 2,064 - 58 2,006 601 Liability for Landfill Closure and Post Closure Care 36,616 1,766 - 38,382 - Loans payable - Debt M anagement 79,526 5,350 2,338 82,538 2,210 Business-type activity long-term obligations 377,850 $ 17,415 $ 23,769 $ 371,496 $ 10,157 $ Component Unit Activities: Bonds and notes payable: JEA 3,257,290 $ 166,375 $ 423,955 $ 2,999,710 $ 91,535 $ JPA 280,959 10,844 34,573 257,230 7,672 JTA 84,600 47,002 13,298 118,304 5,762 Component unit activity long-term obligations 3,622,849 $ 224,221 $ 471,826 $ 3,375,244 $ 104,969 $ 102 -- 133 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 8. LONG-TERM OBLIGATIONS (continued) D. Reconciliation of Debt Issued with Financial Reporting Classifications: Certain of the City’s bonds issued in a single transaction are for assets acquired or constructed for both governmental and business-type activities. As a result, the financial statements report debt outstanding and the related debt service for that combined transaction in both governmental and business-type activities in the relative proportion of the cost of the underlying assets acquired or constructed. When individual business-type revenues are not sufficient to pay for operations inclusive of allocated debt service, inter-fund transfers are made in amounts to address the shortfall. The following table shows the original combined issue amount and where the debt is reported (in thousands). (The remainder of this page is intentionally left blank) Original Outstanding debt reported in Total Amount Governmental Business-type Amount Bond Series Issued Activities Activities Outstanding BJP Infrastructure Sales Tax Revenue Bonds: Series 2012 280,050 142,580 41,480 184,060 Series 2012A 114,890 41,095 73,795 114,890 Special Revenue Bonds: Series 2014 100,160 93,517 1,713 95,230 Series 2017A 112,865 79,785 20,285 100,070 Series 2019A 151,625 144,411 314 144,725 Series 2021A 97,900 87,670 10,230 97,900 103 -- 134 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 8. LONG-TERM OBLIGATIONS (continued) E. Pledged Revenues: The City has formally committed to secure certain debt issued by the City with specific future revenues. A summary of those debt issues and the related pledged revenues follows. The detailed listing of individual series by pledge source is included in Note 8A. Better Jacksonville Transportation Sales Tax - Bonds have been issued to fund acquisition and construction of road, bridge, drainage and other transportation projects, and are supported by a pledge against the discretionary half-cent Transportation Sales Tax and Gas Tax. Better Jacksonville Infrastructure Sales Tax - Bonds have been issued to fund the acquisition and construction of capital projects constituting part of the Better Jacksonville Plan, and are supported by a pledge against the discretionary half-cent Infrastructure Sales Tax. Sports Facilities Capital Improvement Revenues - Bonds have been issued to fund renovations to the Municipal Stadium, and are supported by a pledge against the proceeds of Franchise Fees, 15% of the Communications Services Taxes, Sports Facility Sales Tax Rebates, Convention Development Taxes and the Sports Facilities Tourist Development Taxes. Range of Approximate Current year Current year Principal and remaining future principal revenue principal interest as % term and interest received and interest of revenue Better Jacksonville Transportation S ales Tax: 2023 - 2038 476,031,020 115,750,880 31,265,612 27.0% Better Jacksonville Infrastructure S ales Tax: 2024 - 2031 477,812,443 103,852,666 45,696,118 44.0% with S IB Loans: 2022 - 2031 484,767,042 103,852,666 52,141,718 50.2% S ports Facilities Capital Improvement Revenues: 2031 95,695,500 47,033,981 10,081,000 21.4% 104 -- 135 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 8. LONG-TERM OBLIGATIONS (continued) F. New Indebtedness Issued: On October 29, 2020, the City closed on the sale of $155.04 million Taxable Transportation Refunding Revenue Bonds, Series 2020. The 2020 bonds have a true interest cost of 1.62%, an average coupon rate of 1.57% with no mandatory sinking schedule and a maturity date of October 1, 2031. The proceeds of the 2020 bonds were used to refund the City’s Transportation Revenue Bonds, Series 2012A maturing in years 2023 through 2031. The issuance provided net proceeds of $155.04 million, which is inclusive of underwriter’s discount and cost of issuance totaling $1.00 million. The refunding of the Taxable Transportation Refunding Revenue Bonds, Series 2020 resulted in net PV savings of $20.99 million and a decrease in aggregate debt service in the amount of $35.14 million. On August 12, 2021, the City closed on a $16.53 million bank loan referred to as the Better Jacksonville Sales Tax Refunding Revenue Bond, Series 2021. The 2021 loan has a true interest cost of .43%, an average coupon rate of .43% with no mandatory sinking schedule and a maturity date of October 1, 2023. The proceeds of the 2021 loan were used to refund the City’s outstanding Better Jacksonville Sales Tax Refunding Revenue Bonds, Series 2011. The agreement provided net proceeds of $16.53 million, which is inclusive of the cost of issuance totaling $50k. The refunding of the Better Jacksonville Sales Tax Refunding Revenue Bonds, Series 2011 resulted in net PV savings of $1.07 million and a decrease in aggregate debt service in the amount of $1.08 million. On September 22, 2021, the City closed on the sale of $97.90 million Special Revenue Bonds, Series 2021A.The 2021A bonds have a true interest cost of 1.92%, an average coupon rate of 4.52% with no mandatory sinking schedule and a maturity date of October 1, 2041. The proceeds of the 2021A bonds were used to finance and refinance the acquisition and construction of certain capital equipment and improvements for the City ($90.50 million) and to fix out a portion of the City’s outstanding commercial paper debt ($29.80 million). The issuance provided net proceeds of $121.05 million, which is inclusive of underwriter’s discount and cost of issuance totaling $753k. On September 28, 2021, the City closed on the sale of Commercial Paper Notes in the amount of $7.30 million for the purposes of funding short-term projects, and interim funding for long-term projects, with an initial interest rate of .07%. 105 -- 136 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 8. LONG-TERM OBLIGATIONS (continued) G. Additional Debt Disclosures, including Direct Borrowing and Direct Placements: The City has authorized the issuance of its commercial paper notes in the aggregate principal amount of up to $150,000,000 outstanding at any one time; however, such amount is limited to the capacity of an applicable credit facility. On September 8, 2021, the City amended and extended its existing letter of credit with Bank of America, N.A. (the “Credit Facility Provider”), the sole credit facility supporting its commercial paper program. The letter of credit supports the issuance of $100,000,000 in principal amount of commercial paper notes. The letter of credit has a stated expiration date of September 8, 2023, subject to reduction and earlier termination in accordance with its terms. The commercial paper notes are payable from certain excise taxes and the local government half cent sales taxes received by the City and are issued on a junior and subordinate basis to certain outstanding and future senior lien debt issued by the City and payable from excise taxes or local government half cent sales taxes. As of September 30, 2021, $32,300,000 in commercial paper notes were outstanding. In the event of a default under the reimbursement agreement governing the letter of credit, the Credit Facility Provider may reduce the stated amount of the letter of credit to the amount then outstanding under the letter of credit, issue a final drawing notice which would terminate the letter of credit 15 days after receipt thereof, or seek enforcement under the authorizing ordinance by law or equity, by suit, action or mandamus, or other proceeding, including the right to appoint a receiver to enforce and compel performance under the ordinance. (The remainder of this page is intentionally left blank) 106 -- 137 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 8. LONG-TERM OBLIGATIONS (continued) H. Non-Asset Debt: The City has issued debt for the benefit of its component units or other public use entities where the asset acquired or constructed will not be owned by the primary government. An expense is recorded by the City instead of a capital asset on the citywide statements, while the debt remains as a liability of the City. The following is a listing of the outstanding debt in the Governmental Activities that was issued for non-asset backed debt (in thousands): (The remainder of this page is intentionally left blank) Debt Type Entity or Purpose Amount Special Revenue Refunding Bonds, Series 2012C Shands Jacksonville Medical Center 23,715 Special Revenue Series 2019A Zoo Funding 4,853 Special Revenue Series 2020A Non-asset portion 55,465 Special Revenue Series 2021A 21,170 Total Special Revenue Bonds 105,203 $ Better Jacksonville Plan (BJP) Transportation Bonds Various Special Revenue and Refunding Bonds Jacksonville Transportation Authority (JTA) road projects $ 53,179 BJP State Infrastructure Bank Loan Loan #1 JTA road projects - BJP 6,417 Loan #2 JTA road projects - BJP 285 Total BJP State Infrastructure Bank Loan 6,702 $ Other Bond Issues Various Misc. projects – other 23,426 Total Other Bond Issues 23,426 $ Debt Management Fund Financed Projects Various Misc. projects – other $ 335,691 Commercial Paper (2020) Misc. projects – other $ 25,000 GRAND TOTAL $ 549,201 Special Revenue Bonds 107 -- 138 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 8. LONG-TERM OBLIGATIONS (continued) I. Defeased Debt: The City has defeased certain serial bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City’s financial statements. As of September 30, 2021, the City had legally defeased the following bond maturities (in thousands): (The remainder of this page is intentionally left blank) Issue Refunded by Principal Balance at September 30, 2021 Investment Balance with Escrow Agent at September 30, 2021 (a) Special Revenue Bonds, Taxable Special Revenue and Refunding 82,695 84,751 Series 2011A Bonds, Series 2020C Special Revenue Bonds, Cash Defeased 15,420 15,806 Series 2010B Special Revenue Bonds, Cash Defeased 15,425 15,811 Series 2011B Better Jacksonville Sales Tax Refunding Better Jacksonville Sales Tax Refunding 24,140 24,744 Revenue Bonds, Series 2011 Revenue Bonds, Series 2021 (a) Source: Escrow Agent’s Records (unaudited) 108 -- 139 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 8. LONG-TERM OBLIGATIONS (continued) J. Conduit Debt: The City issued certain conduit debt in the form of industrial development revenue bonds (IDB's) and private activity bonds (PAB's) to provide financial assistance to private-sector entities for the acquisition and construction of industrial and commercial facilities deemed to be in the public interest. Conduit debt refers to certain limited-obligation revenue bonds or similar debt instruments issued by the City for the express purpose of providing capital financing for a specific nongovernmental third party. Although conduit debt bears the name of the City as issuer, it is collateralized by the resources provided by the loan with the third party on whose behalf they are issued. The City acts solely as a conduit issuer with respect to the debt. Conduit debt is collateralized by the property financed and is payable solely from payments received on the underlying mortgage loans. Upon repayment of the IDB's and PAB's, ownership of the acquired facilities transfers to the private-sector entity on whose behalf the bonds were issued. None of the assets or revenues of the City are pledged to the payment of IDB's or PAB's and under the constitution and laws of Florida, the City may not legally pledge any of its revenues or assets to the payment thereof. Neither the City, the state, nor any political subdivision thereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of September 30, 2021, the City had $98,285,850 IDB's and PAB's total principal outstanding. From time to time, certain issues of such conduit debt may be in default or under investigation as to tax-exempt status of interest on such debt, however, this has no effect on the City's financial position. As of September 30, 2021, the City had a total of $225,393,076 in conduit debt consisting of Jacksonville Housing Finance Authority, formerly Duval County Housing Finance Authority Single Family and Multi-Family Bonds outstanding. The amount of Single-Family Housing Revenue Bonds outstanding was $0. The amount of Multi-Family Housing Bonds outstanding was $225,393,076. Refunding of previous issues make up $0 of the total amount outstanding. As of September 30, 2021, outstanding conduit debt includes $403,357,055 Jacksonville Health Facilities Authority Bonds outstanding. (The remainder of this page is intentionally left blank) 109 -- 140 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 8. LONG-TERM OBLIGATIONS (continued) K. Interest Expense: Total interest expense for the fiscal year ended September 30, 2021 was $47.8 million for governmental activities and $12.4 million for business-type activities. L. Component Unit Long-Term Debt: The long-term debt presentations for the major component units in Notes 8A through 8C contain highly summarized data. Detailed debt presentations are available in each major component unit’s separately issued financial report, which may be obtained from the finance offices below. JEA 21 West Church Street Jacksonville, Florida 32202 JPA P.O. Box 3005 Jacksonville, Florida 32206-0005 JTA 100 LaVilla Center Drive Jacksonville, Florida 32202 (The remainder of this page is intentionally left blank) 110 -- 141 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 9. A. PENSION PLANS The City’s pension plans adopted GASB Statements No. 67, Financial Reporting for Pension Plans, No. 68, Accounting and Financial Reporting for Pensions, No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date—an amendment of GASB Statement No. 68, No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68 and No. 82 Pension Issues - and amendment of GASB Statements No, 67, No. 68 and No. 73. These Statements modify financial reporting by state and local government pension plans that present pension trust funds. Accordingly, disclosures required for the City’s pension plans are presented in accordance with GASB Statement No. 67, and disclosures required for employers regarding pension plans are presented in accordance with GASB Statement No. 68 as modified by GASB Statement No. 71, GASB No. 73 and GASB Statement No. 82, Pension Issues – an amendment of GASB Statements 67, 68 and 73 required for fiscal periods beginning after June 15, 2016. 1. Summary of Significant Accounting Policies a) Basis of Accounting – The City’s pension trust financial statements are prepared using the accrual basis of accounting. Contributions, benefit payments and refunds are recognized when due and payable in accordance with the terms of each plan. The Florida Constitution and the Division of Retirement requires plan contributions be made annually in amounts determined by an actuarial valuation stated as a percent of covered payroll or in dollars. The Florida Division of Retirement reviews and approves the City’s actuarial report to ensure compliance with actuarial standards. b) Method Used to Value Investments – Investments are reported at fair value. Securities traded on a national or international exchange are valued at the last reported sales price at current exchange rates. The fair value of real estate investments is based on independent appraisals or estimates of fair value as provided by third party fund managers. Investments that do not have an established market are reported at estimated fair value as provided by third party fund managers. Investments are managed by third party money managers while cash and securities are generally held by the City’s independent custodian. The City receives a monthly reconciliation of any material differences in pricing by the custodian and manager. 2. Plan Description a) Plan Administration - The City sponsors two public employee retirement systems (PERS) administered by separate pension boards of trustees that provide retirement, death and disability benefits: the City of Jacksonville Retirement System (JRS) and the Police and Fire Pension Plan. The JRS arises out of Chapter 16 of the City Charter, Chapter 120 of Ordinance Code of the City of Jacksonville, and Chapter 112, Part VII, Florida Statutes. The City Council is responsible for establishing or amending the pension plan provisions. The Police and Fire Pension Plan (PFPF) is administered independently by a five-member board. Substantially all employees of the City participate in one of these two plans with less than 1% of City employees participating in the State of Florida Retirement System. The JRS is a multiple employer cost sharing, contributory defined benefit pension plan with a defined contribution alternative. JRS includes both the General Employees’ Retirement Plan (GERP) and the Corrections Officers’ Retirement Plan (CORP). Effective October 1, 2009, the City added an employee choice defined contribution alternative to the defined benefit plan for all members of the GERP. The City hired a third-party administrator to assist employees with the management of their individual accounts within a number of investment options including model portfolios. 111 -- 142 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 9. A. PENSION PLANS (continued) 2. Plan Description (continued) a) Plan Administration (continued) All full-time employees of the City, JEA (Jacksonville Electric Authority), JHA (Jacksonville Housing Authority) and NFTPO (North Florida Transportation Planning Authority) were eligible to participate in GERP. All certified Corrections Officers employed by the City were eligible to participate in the CORP upon employment. There are no separately issued financial statements for the City of Jacksonville Retirement System. As of September 30, 2017, the City’s pension plans in JRS and the PFPF were closed to new employees in favor of the defined contribution plan. This was the result of pension reform efforts that included the creation of a Pension Liability Surtax to fund underfunded defined benefit pensions, passage of a local referendum in Fiscal Year 2016 to approve the Surtax, and adoption of legislation by the City Council in April 2017 to approve the reform plans and dedicate the Surtax as a funding source for the City’s three defined benefit pension plans. The Pension Liability Surtax will go into effect after the termination of the Local Infrastructure Sales Surtax, which will occur no later than December 31, 2030, and will remain in effect until the earlier of December 31, 2060, or when it is determined by actuarial report to the Florida Department of Management Services that the funding level of each of the City’s three defined benefit pension plans are expected to reach or exceed a 100% funding level in that year. b) The Jacksonville Retirement System’s defined benefit pension plans are administered by a nine (9) member Board of Trustees. The Board is comprised of the following officers: i. The Chief Administrative Officer of the City or designee; ii. The Chief Financial Officer or designee; iii. The Chief Human Resources Officer; iv. The Chairperson of the General Employees’ Pension Advisory Committee; v. The Chairperson of the Corrections Officers’ Pension Advisory Committee; vi. A GERP retiree chosen by the Retired Employees’ Association; vii. A retired corrections officer chosen by the Corrections Officers’ Advisory Committee. viii. Two citizens appointed by the City Council with professional experience in finance, investments, economics, pension management, pension administration and/or accounting. The General Employees’ Pension Advisory Committee consists of seven (7) members. Six (6) members are elected from among the active contributing participants of the GERP and one (1) member is a retiree elected by the Retired Employees Association. Committee members are elected in even years for a two (2) year term. The Pension Advisory Committee performs all fact-finding duties for retirement benefit applications, recommends approval or denial of benefits and reviews all applications to participate in the GERP to the Board of Trustees. The Corrections Officers’ Pension Advisory Committee consists of five (5) members who must be active contributing members of the CORP. Committee members are elected in even years for a two (2) year term. The Corrections Officers’ Pension Advisory Committee performs all fact- finding duties for retirement benefit applications, recommends approval or denial of benefits and all applications to participate in the CORP to the Board of Trustees. 112 -- 143 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 9. A. PENSION PLANS (continued) 3. The Police and Fire Pension Plan is a single-employer contributory defined benefit pension plan covering all full-time certified police officers and firefighters employed by the City of Jacksonville Sheriff’s Office and Fire and Rescue Department, respectively. The separately issued financial statements for the PFPF are available from the Police and Fire Pension Fund, located at One West Adams Street, Suite 100, Jacksonville, FL 32202. 4. Plan Membership Pension plan membership consisted of the following: 5. Plan Benefits Provided: a) General Employee Retirement Plan was closed for new employees of the City of Jacksonville, JEA (Jacksonville Electric Authority), JHA (Jacksonville Housing Authority) and NFTPO (North Florida Transportation Planning Authority) - other than police officers and firefighters hired after October 1, 2017. Appointed officials and permanent employees not in the civil service system may opt to become members of the Retirement System. Elected officials are members of the Florida Retirement System - Elected Officer Class. Participation in the Retirement System was mandatory for all full-time employees of the City who otherwise meet the requirements for participation. Members of the GERP are eligible to retire with a normal pension benefit upon achieving one of the following: i. Completing thirty (30) years of credited service, regardless of age; ii. Attaining age fifty-five (55) with twenty (20) years of credited service; or iii. Attaining age sixty-five (65) with five (5) years of credited service. iv. There is no mandatory retirement age. Upon reaching one of the three conditions for retirement described above, a member is entitled to a retirement benefit of two and one-half (2.5) percent of final average compensation, multiplied by the number of years of credited service, up to a maximum benefit of eighty (80) percent of final monthly compensation. A time service retirement benefit is payable bi-weekly to commence upon the first payday coincident with or next payday following the member’s actual retirement and will continue until death. Each member and survivor is entitled to a cost-of-living adjustment (“COLA”). The COLA consists of a three (3) percent increase of the retiree’s or survivor’s pension benefits, which compounds annually. The COLA commences in the first full pay period of April occurring at least 4.5 years (and no more than 5.5 years) after retirement. In addition, there is a supplemental benefit. The supplemental benefit is equal to five dollars General Corrections Police Employee's Officers' and Fire Pension Plan Pension Plan Pension Plan Membership: As of 10/1/2020 As of 10/1/2020 As of 10/1/2020 Retirees and beneficiaries currently receiving benefits 5,218 349 3,011 Deferred retirement option (DROP) participants - 58 56 T erminated employees vested, not yet receiving benefits 156 17 83 Active employment plan members 3,663 471 2,236 T otal plan membership 9,037 895 5,386 Jacksonville Retirement System Pension Membership 113 -- 144 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 9. A. PENSION PLANS (continued) 5. Plan Benefits Provided (continued) a) General Employee Retirement Plan (continued) ($5) multiplied by the number of years of credited service. This benefit may not exceed one- hundred and fifty dollars ($150) per month. b) The Corrections Officers’ Retirement Plan was closed to all new hires after October 1, 2017. It consists solely of Corrections Officer employees of the City. Participation in the Retirement System was mandatory for all full time Corrections Officers of the City who otherwise meet the requirements for participation. Members of the Corrections Officers’ Retirement Plan are eligible to retire with a full pension benefit upon achieving one of the following: i. completing twenty (20) years of service, regardless of age; or ii. attaining age sixty-five (65) with five (5) years of service. iii. There is no mandatory retirement age. Upon reaching one of the above-described conditions required for a time service retirement. A member's time service retirement benefit is calculated as follows: i. The first twenty (20) years of credited service are multiplied by three (3) percent of final monthly compensation, up to a maximum of sixty (60) percent of final monthly compensation. ii. For service time beyond twenty (20) years of credited service, the number of years and months in excess of twenty (20) years is multiplied by two (2) percent of final monthly compensation, up to a maximum of twenty (20) percent of final monthly compensation. A member's time service retirement benefit may not exceed eighty (80) percent of final monthly compensation. A time service retirement is payable on a bi-weekly basis and will continue until death. Each member and survivor is entitled to a cost-of-living adjustment (“COLA”). The COLA consists of a three (3) percent annual increase of the retiree’s or survivor’s pension benefits, which compounds annually. In addition, there is a supplemental benefit equal to five dollars ($5) multiplied by the number of years of credited service. This benefit may not exceed one- hundred and fifty dollars ($150) per month. The Deferred Retirement Option Program (“DROP”) is a program in which a member defers receipt of normal retirement benefits while continuing employment with the City. If a member elects to participate in the DROP, they must terminate their employment with the City of Jacksonville and retire from service no later than the end of the DROP participation period previously designated. Upon the effective date of participating in the DROP, a member’s years of service and final monthly compensation become frozen for purposes of determining pension benefits. Additional service beyond the date of DROP participation no longer accrues any additional benefits under the Retirement System. The deferred monthly retirement benefits accrue in the Corrections Officers’ Pension Plan on behalf of the member, plus interest compounded monthly, for the time of DROP participation. The interest paid on the DROP balance accrues at the same rate as the investment portfolio held by the Retirement System. In addition, the Corrections Officers’ Pension Plan will deduct two (2) percent from base pay and any service raise of DROP 114 -- 145 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 9. A. PENSION PLANS (continued) 5. Plan Benefits Provided (continued) b) The Corrections Officers’ Retirement Plan (continued) participants as their member contributions instead of the normal ten (10) percent deduction. Upon termination of employment, the member will receive the total DROP benefits and begin to receive the previously determined normal retirement benefits. The money that accumulates during DROP participation may be distributed in accordance with the criteria set forth in Municipal Code Section 120. The balance of the DROP benefits held in trust for DROP Participants totaled $11.9 million as of September 30, 2021. c) The Police and Fire Pension plan which provides retirement, disability and death benefits for Police Officers and Firefighters was closed to new hires after October 1, 2017. Retirement benefits are calculated as 3 percent of the employee’s final 2-year average salary times the employee’s years of service up to 20 years and 2 percent thereafter (80 percent maximum benefit). Employees with 5 or more years of continuous service are eligible to retire at 20 years from the date of employment. Benefits are increased 3 percent annually after retirement. Employees are eligible for non-duty related death and disability benefits after 10 years of service and for duty-related death and disability benefits upon hire. Terminated vested employees have the option to withdraw their contributions, while non-vested terminated employees must withdraw their contributions. In April 2017, the City Council passed legislation dedicating a Pension Liability Surtax as a funding source for the General Employees’ Retirement Plan, Corrections Officers’ Plan and the Police and Fire Pension Plan. The benefits that were modified in 2015, impacting both existing employees and new hires were repealed by the new legislation. The bill deleted the definition of Group I and Group II members (hired before and after the effective date of Ordinance 2015-304-E) and provides that no employee hired on or after October 1, 2017 is eligible for membership in the Police and Fire defined benefit pension plan. All new hires must be a member of the defined contribution plan. The employee contribution rate to the defined benefit pension is increased from 8% to 10% of salary and the employer contribution is set as the actuarially determined Employer Contribution as provided in relevant statutes and ordinances. For a full breakdown of the new benefit package please see City Ordinance Code Section 121, Part 2. For a full description of benefits provided by PFPF, refer to the separately issued financial statements for the Police and Fire Pension Plan that are available from the Police and Fire Pension Fund, located at One West Adams Street, Suite 100, Jacksonville, FL 32202. d) Florida Retirement System Plan Description - The City also participates in the Florida Retirement System (FRS), a multiple-employer cost-sharing retirement system which covers less than 1% of the City’s full-time employees. FRS is a defined-benefit contributory retirement plan, administered by the State of Florida, Division of Retirement. The System provides vesting of benefits after six years of creditable service. Members are eligible for normal retirement after they have met one of the following: (1) after 30 years of service regardless of age; (2) six years of service and age 62; or (3) 25 years special risk service (age 55 if not continuous). Early retirement may be taken any time after completing six years of service; however, there is a 5% benefit reduction for each year prior to normal retirement. Benefits are computed on the 115 -- 146 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 9. A. PENSION PLANS (continued) 5. Plan Benefits Provided (continued) d) Florida Retirement System (continued) - basis of age, average final compensation, and service credit. Average final compensation is the average of the five highest years of earnings. The System also provides death and disability benefits. Benefits are established by state statutes. The funding methods and the determination of benefits payable are provided in various Acts of the State Legislature. These Acts require that employers make actuarially determined contributions at the rates in effect as of October 1, 2020, of 3.44% for regular members, 7.60% for special risk members, 37.39% for elected county officials, 19.18% for senior management, and 8.26% for DROP Plan members. For a full description of benefits and historical trend information showing the progress in accumulating sufficient assets to pay benefits when due, is presented in the Florida State Retirement System’s June 30, 2020 annual financial report. The report may be obtained from the State of Florida, Department of Management Services, Division of Retirement P.O. Box 9000, Tallahassee, Florida 32315-9000. e) Jacksonville Beach Firefighters’ Retirement Plan – Effective November 19, 2019, the City of Jacksonville entered into an agreement with the City of Jacksonville Beach to provide advanced life support and fire services to residents and businesses of Jacksonville Beach. The Jacksonville Beach firefighters became employees of the City of Jacksonville. At that time, the Jacksonville Beach Firefighters’ Retirement Plan was closed to new members. Each firefighter in active service on the effective date was given the opportunity to individually elect to continue participating in the Jacksonville Beach Firefighters’ Retirement Plan or join the City of Jacksonville’s defined contribution retirement plan. Those who elected to continue participating in the Jacksonville Beach Firefighters’ Retirement Plan must continue to make legally required contributions and accrue service benefits under the Plan for as long as they are employed as certified firefighters by the City of Jacksonville. The City of Jacksonville Beach will continue to be the plan administrator and is responsible for the unfunded actuarial accrued liability as determined by the plan actuary as of November 22, 2019. The City of Jacksonville Beach agreed to pay the unfunded liability (representing a fixed contractual obligation) at that time totaling $5,318,174 into the Plan over a 10-year period. Annual contributions towards the unfunded liability are $707,653 including interest. The City of Jacksonville is responsible for paying the total required contribution to the Jacksonville Beach Firefighters’ Pension Plan and estimated annual employee contributions attributable to services rendered after November 23, 2019. Jacksonville Beach Firefighter Plan is supported by member contributions, property insurance premium tax monies received from the State pursuant to Chapters 175 Florida Statutes, Local Employers’ contributions (from the cities of Jacksonville and Jacksonville Beach), and investment income from Retirement System assets. 116 -- 147 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 9. A. PENSION PLANS (continued) 5. Plan Benefits Provided (continued) e) Jacksonville Beach Firefighters’ Retirement Plan (continued) Plan Description – Members are eligible for normal retirement after they have met one of the following: (1) Thirty years of service and any age; (2) Twenty-five years of service and age 52; or (3) Ten years of service and age 55. Pension benefit is 3% for each year of service. Additional provisions include cost of living increase and death benefits . For a full description of benefits and historical trend information showing the progress in accumulating sufficient assets to pay benefits when due, is presented in the City of Jacksonville Beach’s September 30, 2021 annual report. The report may be obtained from the City of Jacksonville Beach, 11 North Third Street, Jacksonville Beach, FL 32250. 6. Contributions - The Florida Constitution requires plan contributions be made annually in amounts determined by an actuarial valuation in either dollars or as a percentage of payroll. The Florida Division of Retirement reviews and approves the City’s actuarial reports to ensure compliance with actuarial standards and appropriateness for funding purposes. 7. Pension Investments a) Investment Policy - The purpose of the City of Jacksonville Retirement System Board and the Police and Fire Pension Board is to administer long-term benefits to the Plans’ participants and their beneficiaries. It is the Board’s intention that the investment policies be sufficiently specific to be meaningful but adequately flexible to be practical. The investment objective is to preserve the purchasing power of assets and earn a reasonable real rate of return (after inflation) over the long term while minimizing, to the extent reasonable, the short-term volatility of returns. After a thorough review of the expected General Corrections Police Employees' Officers' and Fire Pension Plan Pension Plan Pension Plan Required Employee Contribution Rate 10% 10% 10% Employee Contributions for Fiscal Year Ended 2021 $29,116 $3,341 $19,118 Required Employer Contribution Rate 33.40% 61.47% 83.27% Employer Contributions for Fiscal Year Ended 2021 $77,269 $15,061 $134,725 (in thousands) Pension Contributions Jacksonville Retirement System *Reserves were allocated to the City to be used to offset the Required Employer Contribution amount. The reserve balance was approximately $16.3 million as of October 1, 2020. The City used $13,750,947 in December 2020 as part of the advanced required Employer Contribution. 117 -- 148 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 9. A. PENSION PLANS (continued) 7. Pension Investments (continued) a) Investment Policy (continued) risk and return of various asset mixes, the Boards of Trustees have established the following target asset allocations for all assets of the City of Jacksonville Retirement System and Police and Fire Pension Fund as indicated in the table below: The investment policy statement for the Jacksonville Retirement System was ratified on July 1, 2021. There are no individual investments in JRS or PFPF Systems that exceed 5% of plan assets on September 30, 2021. b) Rate of Return – The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. For the year ended September 30, 2021, the annual money-weighted rate of return on pension plan investments, net of pension plan investment expense, was 21.32% for the Jacksonville Retirement System and 23.15% for the Police and Fire Pension Fund. The long-term expected rate of return on pension plan investments is determined annually by the Board of Trustees of each plan. In determining the long-term expected rate of return, each Board considers the most up-to-date long-term capital markets assumptions of its investment consultant. The long-term capital market assumptions for each major asset class considered by both pension boards as of September 30, 2021, are summarized below: Jacksonville Retirement System Police & Fire Pension Fund Asset Class Target Target Domestic equity 30.0% 37.0% International equity 23.0% 20.0% Fixed Income 20.0% 20.0% Real estate 15.0% 13.0% Diversifying Assets/Private Investments* 12.0% 10.0% Total 100% 100% *Inclusive of MLPs, Private Equity, and Private Credit Asset Class Long-Term Expected Arithmetic Rate of Return Large/Mid Cap Domestic Equity 7.25% Small Cap Domestic Equity 8.50% Developed Large/Mid Cap International Equity 9.00% Emerging Markets Equity 11.25% Core Fixed Income 2.50% Global Fixed Income 1.75% High Yield Fixed Income 7.50% Emerging Market Debt (Hard Currency) 7.00% Core Real Estate 5.75% Non Core Real Estate 7.75% MLPs 11.75% Private Equity 10.00% Private Credit 9.00% 118 -- 149 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 9. A. PENSION PLANS (continued) 8. Pension Plans: Net Pension Liability a) The components of the net pension liability as of September 30, 2021 were as follows: b) Discount Rate: The projection of cash flows used to determine the discount rate assumes plan member contributions are made at their applicable contribution rates and that the employer’s contributions will be made at rates equal to the actuarially determined contribution rates. Based on these assumptions the Plans’ fiduciary net positions are projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on the Plans’ investments was applied to all periods of projected benefit payments to determine the total pension liability. Cash flow projections were run for a 120-year period. c) Sensitivity of the net pension liability to changes in the discount rate: The following presents the net pension liabilities of the Plans, calculated using the discount rate and what the Plans’ net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher than the current rate. Jacksonville Retirement System General Corrections Police Employee's Officers' and Fire Pension Plan Pension Plan Pension Plan Net Pension Liability (in millions): 10/01/2021 T otal pension liability 3,390 $ 481 $ 4,254 $ Plan fiduciary net position 2,005 240 $ 2,020 $ Net pension liability 1,385 $ 241 $ 2,234 $ Net position as a % of total pension liability 59.16% 49.92% 47.49% Actuarial Methods and Assumptions: Date of last actuarial valuation October 1, 2020 October 1, 2020 October 1, 2020 Experience period 5 years 5 years Inflation 2.50% 2.50% 2.25% Salary increases (Long-T erm Payroll Inflation) 2.50% 2.50% varied Investment Rate of Return 6.80% 6.80% 6.90% Discount Rate 6.80% 6.80% 6.90% Mortality T ables in use FRS Non-Special Risk Scale MP2018 FRS Special Risk Scale MP2018 PUB‐2010 Headcount Weighted Safety Healthy Employee Net Pension Liability (in millions) Discount Rate Net Pension Liability* Discount Rate Net Pension Liability Discount Rate Net Pension Liability 1% Decrease 5.80% 808 5.80% 310 5.90% 2,852 Current Rate 6.80% 627 6.80% 241 6.90% 2,233 1% Increase 7.80% 475 7.80% 185 7.90% 1,734 *Net Pension Liability represents the City of Jacksonville portion only. Police and Fire pension plan Net Pension Liability (in millions) General Employees' pension plan Corrections Officers' pension plan 119 -- 150 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 9. A. PENSION PLANS (continued) 9. City of Jacksonville Retirement System: Financial Information a) The Statement of Net Position – Jacksonville Retirement System - General Employees’ and Corrections Officers’ Plan for the year ended September 30, 2021 is as follows (in thousands): b) The Statement of Changes in Fiduciary Net Position – Jacksonville Retirement System for the year ended September 30, 2021 is as follows (in thousands): Equity in cash and investments……………………… 16,304 $ Receivables……………………………………………. 2,707 Investments, at fair value…………………………….. 2,585,902 Capital assets, net of depreciation…………………… - Securities Lending Collateral…………………………. 26,380 TOTAL ASSETS……………………………… 2,631,293 LIABILITIES Obligations under Securities Lending Agreement…. 26,380 Accounts payable and accrued liabilities…………… 7,911 Accrued Compensated Absences…………………… 73 TOTAL LIABILITIES………………………… 34,364 NET POSITION RESTRICTED FOR PENSIONS............. 2,596,929 $ ASSETS Contributions: Employer.................................................................. 92,330 $ Plan member............................................................. 32,457 Total contributions................................. 124,787 Other Additions.......................................................................... 83 Net investment income……………………………………………… 471,803 Securities lending........................................................................ 89 TOTAL ADDITIONS............................................................... 596,762 DEDUCTIONS Benefit payments....................................................................... 215,647 Refund of contributions.............................................................. 27,839 Administrative expenses.............................................................. 1,354 TOTAL DEDUCTIONS............................................................ 244,840 CHANGE IN NET POSITION.................................................. 351,922 NET NET POSITION, BEGINNING OF YEAR........................ 2,245,007 NET POSITION, END OF YEAR............................................. 2,596,929 $ ADDITIONS 120 -- 151 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 9. B. PENSION LIABILITY, EXPENSE, DEFERRED OUTFLOWS AND DEFERRED INFLOWS OF RESOURCES RELATED TO PENSIONS 1. Pension Liability At the year ending September 30, 2021, the City of Jacksonville recorded a total net pension liability of $3,107.15 million. The pension plans providing the information and liability balances are reported below: Notes to Schedule: Change of Assumptions: Jacksonville Retirement System: As of September 30, 2019, the assumed investment return was lowered from 7.00% to 6.90%. The mortality assumptions were changed from being based on the FRS mortality tables used in the July 1, 2018 FRS actuarial valuation for the nonspecial risk personnel to the FRS mortality tables used in the July 1, 2019 FRS actuarial valuation. The set forward used to adjust for the plan’s experience for healthy pre- and post-retirement lives was changed from 2.5 years to 2.0 years with the adoption of the new base table. The mortality improvement scale was changed from scale BB to scale MP2018 in conjunction with this change. Police & Firefighters’ Pension: The investment return assumption was lowered from 7.0% to 6.9%.- The mortality assumption was updated to the current mortality assumption being used by the Florida Retirement System, which was updated effective July 1, 2019 by the FRS, as required by Florida Statutes. - Based on the Experience Study dated October 22, 2020, new salary increase rates, retirement rates, separation rates, disability rates, survivor rates and surviving spouse age differences were adopted to reflect observed experience over the 6-year experience study period reviewed. General Employees' Pension Plan Corrections Officers' Pension Plan Police & Firefighters' Pension Plan Changes in Net Pension Liability Beginning Pension Liability Balance FY 2021 1,487,658 $ 446,447 $ 4,089,121 $ Service Cost 18,089 7,675 70,110 Interest 100,659 30,633 283,846 Change of benefit term - - 2,707 Differences in actuarial experience 5,519 9,965 3,123 Change of assumption 16,363 6,109 56,025 Change in Proportionate Share - - - Benefit payments and refund of contributions (93,827) (20,323) (220,749) Net Change in total pension liability 46,803 34,059 195,062 Ending Total Pension Liability FY 2021 1,534,461 $ 480,506 $ 4,284,183 $ Changes in Plan Fiduciary Net Position Beginning Plan fiduciary net position FY 2021 900,679 $ 232,024 $ 1,953,707 $ Contributions - employer 32,681 15,058 123,329 Contributions - employee 11,776 3,401 19,035 Net investment income 57,019 9,840 159,428 Chapter funds and other income - - 13,889 Benefit payments and refund of contributions (93,827) (20,323) (193,116) Administrative expense (491) (153) (2,185) Distribution from Reserve Accounts - - (24,557) Other - - 1,192 Net Change in Plan fiduciary net position 7,158 7,823 97,015 Less Reserve Accounts and Sr. Staff Assets - - Ending Plan fiduciary net position FY 2021 907,837 $ 239,847 $ 2,050,722 $ Net Pension Liability 626,624 $ 240,659 $ 2,233,461 $ Changes in Net pension Liabilty (in thousands) 121 -- 152 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 9. B. PENSION LIABILITY, EXPENSE, DEFERRED OUTFLOWS AND DEFERRED INFLOWS OF RESOURCES RELATED TO PENSIONS (continued) 1. Pension Liability (continued) The pension plans providing the information and liability balances are continued below: Florida Retirement System FRS Health Insurance Supplement Jacksonville Beach Firefighters' Pension Plan Changes in Net Pension Liability Beginning Pension Liability Balance FY 2021 33,867 $ 742 $ 19,262 $ Service Cost 438 17 346 Interest 2,267 16 1,320 Change of benefit term - - - Differences in actuarial experience 58 - (63) Change of assumption - 5 - Change in Proportionate Share - - - Benefit payments and refund of contributions (1,981) (30) (1,149) Net Change in total pension liability 782 8 454 Ending Total Pension Liability FY 2021 34,649 $ 750 $ 19,716 $ Changes in Plan Fiduciary Net Position Beginning Plan fiduciary net position FY 2021 26,704 $ 22 $ 13,886 $ Contributions - employer 630 35 1,102 Contributions - employee 125 0 146 Net investment income 7,926 0 1,372 Chapter funds and other income - - - Benefit payments and refund of contributions (1,981) (30) (1,149) Administrative expense (4) (0) (80) Distribution from Reserve Accounts - Other - - - Net Change in Plan fiduciary net position 6,696 5 1,391 Less Reserve Accounts and Sr. Staff Assets - - - Ending Plan fiduciary net position FY 2021 33,400 $ 27 $ 15,277 $ Net Pension Liability 1,249 $ 723 $ 4,439 $ Changes in Net pension Liabilty (in thousands) 122 -- 153 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 9. B. PENSION LIABILITY, EXPENSE, DEFERRED OUTFLOWS AND DEFERRED INFLOWS OF RESOURCES RELATED TO PENSIONS 2. Pension Expense For the year ended September 30, 2021, the City recognized pension expense of 160.5 million. The City reported pension expense, deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: 3. Contributions - Contributions of $186.1 million were reported as deferred outflows of resources related to pensions resulting from City of Jacksonville contributions subsequent to the September 30, 2020 measurement date (FRS measurement date, June 30, 2021) and will be recognized as a reduction of the net pension liability in the fiscal year ended September 30, 2022. 4. Deferred Outflow/Inflow Amortization Other amounts reported as deferred outflows of resources and deferred inflows of resources are illustrated below. Actuarial Pension Expense Deferred Outflow Contribution Amortization Reclass of Current Year Contributions to Deferred Outflow Pension Expense as reported for Fiscal Year 2021 General Employees' Pension Plan 72,513 $ - $ (35,605) $ 36,908 $ Corrections Officers' Pension Plan 33,604 - (15,061) 18,543 Police & Firefighters' Pension Plan 240,288 - (134,725) 105,563 Florida State Retirement Pension (1,007) - (138) (1,145) Florida State Retiree Health Subsidy (26) - (7) (33) Jacksonville Beach Firefighters' Pension Plan 1,243 - (597) 646 Total Pension Expense 346,615 $ - $ (186,133) $ 160,482 $ Pension Expense (in thousands) General Employees' Pension Plan 35,605 Corrections Officers' Pension Plan 15,061 Police & Firefighters' Pension Plan 134,725 Florida State Retirement Pension 138 Florida State Retiree Health Subsidy 7 Jacksonville Beach Firefighters' Pension Plan 597 Total Contributions 186,133 (in thousands) Current Year Employer Contributions Differences in expected and actual experience Changes in assumptions projected and actual investment earnings Changes in proportion General Employees' Pension Plan 12,358 $ 28,339 $ 24,679 $ (23,984) $ Corrections Officers' Pension Plan 18,747 9,613 8,164 - Police & Firefighters' Pension Plan 11,686 61,775 (6,405) - Florida State Retirement Pension 214 854 (4,356) (1,979) Florida State Retiree Health Subsidy 24 27 1 (177) Jacksonville Beach Firefighters' Pension Plan 140 1,239 (314) - Total 43,169 $ 101,847 $ 21,769 $ (26,140) $ Deferred Outflows and (Inflows) of resources (in thousands) 123 -- 154 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 9. B. PENSION LIABILITY, EXPENSE, DEFERRED OUTFLOWS AND DEFERRED INFLOWS OF RESOURCES RELATED TO PENSIONS (continued) 4. Deferred Outflow/Inflow Amortization (continued) C. DEFINED CONTRIBUTION PLANS The City has, by ordinance established a Defined Contribution plan within the Jacksonville Retirement System for the general employee participants of the City of Jacksonville, Jacksonville Electric Authority, and the Jacksonville Housing Authority, as an alternative to the Defined Benefit plan. In April 2017, the City Council passed legislation that provides that no employee hired on or after October 1, 2017, is eligible for membership in the defined benefit pension plans. This legislation established a defined contribution retirement system which shall include a General Employees’ Defined Contribution Plan (GEDC) and a Public Safety Defined Contribution Plan (PSDC) to include Police, Fire and Corrections employees. All provisions of these Defined Contribution Plans are administered and managed by the City. Contributions to the GEDC plan, stated as a percentage of pay, were 8 percent for plan members and 12 percent for the employer. Contributions to the PSDC plan, stated as a percentage of pay, were 10 percent for plan members and 25 percent for the employer. A portion of the Member contributions of both Defined Contribution plans, equal to 0.3 percent, is used to fund disability and survivor benefits in the GEDC and PSDC. The City shall contribute such additional sums, as necessary, to fund the disability and survivor benefits on a sound actuarial basis. Employees vest in the employer contributions to the plan at 25% after two years, and 25% per year thereafter until fully vested after five years of service. Members may make additional contributions on an after- tax basis, to the extent permitted by law. Members may also rollover to the GEDC/PSDC plan benefits accrued in other qualified plans consistent with the then prevailing provisions of the Internal Revenue Code. Total contributions were $41.7 million for the 2020-21 fiscal year. Contributions totaling $11.5 million was transferred into the DC plan for participants that converted from DB to DC in addition to employer and employee contributions. Employer Pension Expense totaled $27.3 million comprised of employer contributions and investment management fees net of participant forfeitures in the amount of $1.5 million. September 30, 2022 September 30, 2023 September 30, 2024 September 30, 2025 September 30, 2026 Thereafter General Employees' Pension Plan 18,929 $ 15,331 $ 6,451 $ 682 $ - $ - $ Corrections Officers' Pension Plan 9,432 11,990 10,668 4,435 - - Police & Firefighters' Pension Plan 20,843 24,010 27,026 (4,823) - - Florida State Retirement Pension (1,095) (1,095) (1,095) (1,095) (1,095) 208 Florida State Retiree Health Subsidy (29) (28) (28) (28) (12) - Jacksonville Beach Firefighters' Pension Plan 476 442 234 (87) - - Total 48,556 $ 50,650 $ 43,256 $ (916) $ (1,107) $ 208 $ Deferred Outflows and (Inflows) Amortization for future years (in thousands) 124 -- 155 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 9. D. UNFUNDED PENSION LIABILITY The City recorded its unfunded pension liability in the City-wide Governmental Activities financial statements. There was not an allocation of this liability to the proprietary funds/Business- type Activities or fiduciary funds as there is not an expectation that those type funds/activities will be paying or raising rates to pay for the unfunded liability. Police and Fire Pension and Corrections Pension are governmental fund activities, so their entries are recorded in the City-wide Governmental Activities financial statements as well. (The remainder of this page is intentionally left blank.) 125 -- 156 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 10. POST EMPLOYMENT BENEFITS OTHER THAN PENSION (OPEB) Implementation of GASB #75: The Government Accounting Standards Board (GASB) issued GASB #75 in June 2015 to replace GASB #45, with an effective date for fiscal years beginning after June 15, 2017, thus the City’s FY2018 reporting year. Summary of GASB #75 versus GASB #45 key changes: 1) The City must now recognize the total OPEB liability, as opposed to an amortized portion of the liability (the Net OPEB Obligation). 2) The annual OPEB expense replaces the Annual Required Contribution (ARC), with faster recognition than what was previously required. 3) The entry age normal cost method is required to determine the liability. 4) The discount rate is based on employer’s assets and calculation of Actuarial Determined Contribution (ADC) if prefunding. If the plan is unfunded, the 20-year tax exempt municipal bond yield is used. 5) Enhanced disclosures of historical contributions, funding status, and basis for actuarial assumptions are required. 6) Description of any benefit and assumption changes is required as well as expanded Notes and Required Supplementary Information (RSI). Plan Description: The City provides retirees with two options to purchase health insurance, both of which are single employer, experience-rated health insurance contract plans that provide medical benefits to active and eligible retirees at the City’s group rate as mandated by Florida Statute 112.0801. During a recent plan change, effective 1/1/2020, members of the Jacksonville Sheriff’s Office and the Jacksonville Fire and Rescue Department, including their retirees, left the City’s health plan (COJ Plan) to participate in the newly formed health plan, the Jacksonville Police Officers & Fire Fighters Health Insurance Trust (JPOFFHIT Plan). As a result, the OPEB liability pertaining to the JPOFFHIT members were spun-off into a new JPOFFHIT plan members-only actuarial valuation for FYE 2020 and onward. The State of Florida law prohibits the City from separately rating retirees and active employees. The City therefore assigns to both groups equal, blended-rate premiums. Although both groups are assigned the same blended rate premiums, GAAP requires the actuarial liabilities to be calculated using age-adjusted premiums approximating claim costs for retirees separate from active members. This requirement delineates the City’s implicit cost (rate) subsidy benefit and obligation for the retirees’ participation. 126 -- 157 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 10. POST EMPLOYMENT BENEFITS OTHER THAN PENSION (OPEB) (continued) Funding Policy: The City follows a pay-as-you-go policy, contributing only those amounts necessary to provide for its portion of current year benefit costs and expenses plus any addition to the reserve for accrued costs incurred but not yet reported, as determined as part of the insurance contracts. Because the City is on pay-as-you-go, the OPEB entries are recorded in the Governmental Activities Statement of Net Position and Statement of Activities. Since the implicit cost subsidy is the only OPEB benefit and the pay-as-you-go system provides no funding to a trust, any administration costs are paid by the general fund and are considered immaterial. The contribution requirements for members are established by the City. Retired members pay the full premium at the Group rate for the coverage elected. No direct City subsidy is currently applicable; however, as discussed in the Plan Description paragraph above, an implicit cost (rate) subsidy is applicable. . Retired members of the COJ Plan contributed $2,207,000 in premiums for FY2021, representing 18.0% of the total FY2021 COJ Plan OPEB cost. The following table displays the estimated retiree premiums for 20- year cash flow purposes: Retired members of the JPOFFHIT Plan contributed $6,250,523 in premiums for FY2021, representing 20.2% of the total FY2021 JPOFFHIT Plan OPEB cost. The following table displays the estimated retiree premiums for 20- year cash flow purposes: FY2021 2,207,000 $ FY2031 5,732,000 $ FY2022 2,487,000 $ FY2032 5,979,000 $ FY2023 3,256,000 $ FY2033 6,131,000 $ FY2024 3,550,000 $ FY2034 6,187,000 $ FY2025 3,984,000 $ FY2035 6,286,000 $ FY2026 4,359,000 $ FY2036 6,407,000 $ FY2027 4,670,000 $ FY2037 6,465,000 $ FY2028 4,953,000 $ FY2038 6,687,000 $ FY2029 5,203,000 $ FY2039 6,937,000 $ FY2030 5,496,000 $ FY2040 7,150,000 $ FY2021 6,251,000 $ FY2031 16,233,000 $ FY2022 7,043,000 $ FY2032 16,933,000 $ FY2023 9,220,000 $ FY2033 17,364,000 $ FY2024 10,053,000 $ FY2034 17,522,000 $ FY2025 11,282,000 $ FY2035 17,801,000 $ FY2026 12,345,000 $ FY2036 18,145,000 $ FY2027 13,225,000 $ FY2037 18,308,000 $ FY2028 14,026,000 $ FY2038 18,937,000 $ FY2029 14,734,000 $ FY2039 19,645,000 $ FY2030 15,566,000 $ FY2040 20,249,000 $ 127 -- 158 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 10. POST EMPLOYMENT BENEFITS OTHER THAN PENSION (OPEB) (continued) The following displays the COJ Plan OPEB ending balances at fiscal year-end: The following displays the JPOFFHIT Plan OPEB ending balances at fiscal year-end: Changes in Net OPEB Liability for COJ Plan: Changes in Net OPEB Liability for JPOFFHIT Plan: OPEB Liability Deferred Outflows Deferred Inflows FY2020 92,203,743 $ 66,623,272 $ 9,752,365 $ FY2021 88,962,834 $ 60,932,263 $ 17,243,866 $ OPEB Liability Deferred Outflows Deferred Inflows FY2020 231,464,984 $ 40,809,440 $ 23,316,397 $ FY2021 327,456,990 $ 108,564,221 $ 19,752,705 $ FY2021 FY2020 Total OPEB Liability - Beginning of Year 92,203,743 $ 230,621,526 $ Service Cost 5,283,937 $ 1,999,915 $ Interest Cost 2,130,089 $ 2,192,473 $ Differences between expected and actua (9,947,871) $ - $ Changes in assumptions and other inputs 1,500,025 $ 62,365,376 $ Plan Change (1/1/20) - $ (201,346,437) $ Benefit Payments (2,207,089) $ (3,629,110) $ Net change in total OPEB liability (3,240,909) $ (138,417,783) $ Total OPEB Liability - End of Year 88,962,834 $ 92,203,743 $ FY2021 FY2020 Total OPEB Liability - Beginning of Year 231,464,984 $ - $ Service Cost 15,844,688 $ 10,507,028 $ Interest Cost 5,396,475 $ 4,191,742 $ Differences between expected and actual 69,664,625 $ - $ Changes in assumptions and other inputs 11,336,741 $ 18,031,436 $ Plan Change (1/1/20) 201,346,437 $ Benefit Payments (6,250,523) $ (2,611,660) $ Net change in total OPEB liability 95,992,006 $ 231,464,984 $ Total OPEB Liability - End of Year 327,456,990 $ 231,464,984 $ 128 -- 159 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 10. POST EMPLOYMENT BENEFITS OTHER THAN PENSION (OPEB) (continued) Deferred Inflows/Outflows for COJ Plan: The following displays the Schedule of Deferred Inflows/Outflows of Resources at fiscal year-end: The following displays the amounts reported as Deferred Inflows and Deferred Outflow of Resources at fiscal year-end: FY2022 $ 4,734,665 FY2023 $ 4,734,665 FY2024 $ 4,734,665 FY2025 $ 4,734,665 FY2026 $ 4,734,665 Thereafter $19,771,187 Deferred Inflows/Outflows for JPOFFHIT Plan: The following displays the Schedule of Deferred Inflows/Outflows of Resources at fiscal year-end: The following displays the amounts reported as Deferred Inflows and Deferred Outflow of Resources at fiscal year-end: FY2022 $ 9,682,892 FY2023 $ 9,682,892 FY2024 $ 9,682,892 FY2025 $ 9,682,892 FY2026 $ 10,265,983 Thereafter $ 39,813,965 Deferred Deferred Outflows Inflows Differences between expected and actual experience $0 ($11,228,307) Changes of assumptions/inputs $60,932,263 ($6,015,559) Net difference between projected and actual investments $0 $0 Deferred Deferred Outflows Inflows Differences between expected and actual experience $61,924,111 ($5,370,435) Changes of assumptions/inputs $46,640,110 ($14,382,270) Net difference between projected and actual investments $0 $0 129 -- 160 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 10. POST EMPLOYMENT BENEFITS OTHER THAN PENSION (OPEB) (continued) OPEB Expenses: FY2021 FY2020 Total COJ Plan OPEB Expenses $12,149,000 ($191,599,205) Total JPOFFHIT Plan OPEB Expenses $30,924,000 $216,728,000 Actuarial Assumptions and Methods: 1) Measurement Date September 30, 2021 2) Discount Rate 2.21% - (BOY), 2.26% (EOY) – Bond Buyer 20-Bond GO Index. 3) Salary Increase Rate 3.5% per annum 4) Valuation Date and Census Data Valuation date of October 1, 2021, based on the census provided by the City as of September 2021. 5) Marriage Rate The assumed number of eligible dependents is based on the current proportions of single and family contracts in the census provided. 6) Spouse Age Spouse dates of birth were provided by the City. Where this information is missing, male spouses are assumed to be three years older than female spouses. 7) Medicare Eligibility All current and future retirees are assumed to be eligible for Medicare at age 65. 8) Actuarial Cost Method Entry Age Normal based on level percentage of projected salary 9) Amortization Method Experience/Assumptions gains and losses are amortized over a closed period of 10.3 years for the COJ Plan and 9.0 years for the HPOFFHIT Plan, starting the current fiscal year, equal to the average remaining service of active and inactive plan members (who have no future service). 130 -- 161 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 10. POST EMPLOYMENT BENEFITS OTHER THAN PENSION (OPEB) (continued) Actuarial Assumptions and Methods: (continued) 10) Plan Participation Percentage That 60% of future pre 65 retirees will participate in the pre-65 medical plan and 15% (30% for those hired prior to 1/1/1987) continue upon Medicare eligibility. This assumes that a one-time irrevocable election to participate is made at retirement. 11) Mortality Rates Pub-2010 generational table scaled using MP-20 and applied on a gender specific basis. 12) Health Care Cost Trend Rate The health care cost trend assumptions are used to project the cost of health care in future years. The following annual trends are based on the HCA Consulting trend study and are applied on a select and ultimate basis. Select trends are reduced 0.25% each year until reaching the ultimate trend rate. Expense Type Select Ultimate Pre-Medicare Medical and Rx Benefits 7.0% 4.0% Medicare Benefits 6.0% 4.0% Stop Loss Fees 7.0% 4.0% Administrative Fees 4.0% 4.0% 13) Per Capita Health Care Cost Trend Rate Expected annual claim costs were developed using 24 months of historical claim experience through October 2021. The age 60 and age 70 claim costs are as follows: Rate Tier Age 60_ Age 70 (Medicare) (Non-Medicare) HMO 48 $ 14,328 $ 9,230 $ 18,808 HDHP 65 $ 8,024 $ 5,266 $ 10,533 PPO $ 16,033 $ 9,953 $ 21,046 Future Retirees $ 14,038 $ 8,978 $ 18,428 14) Non-Claim Expenses Non-claim expenses are based on the current amounts charged per retired employee as of 2021. The amounts are provided in the table below and are trended at the levels shown in the “Health Care Cost Trend Rate” table in (12) above. Rate Tier Age 60 Administrative Fee $27.67 Stop Loss Fee $ 9.16 131 -- 162 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 10. POST EMPLOYMENT BENEFITS OTHER THAN PENSION (OPEB) (continued) Actuarial Assumptions and Methods: (continued) 15) Plan Election Percentage Future eligible retirees are assumed to elect coverage based on the following percentages: Rate Tier Age 60 HMO 48 70% HDHP 65 10% PPO 20% 16) Age-Based Morbidity The assumed per capita health claim costs are adjusted to reflect expected increases related to age and gender. These increases are based on a 2013 Society of Actuaries study. 17) Termination and Retirement Age For the COJ Plan, the rate of withdrawal for reasons other than death and retirement has been developed from the Florida Retirement System Actuarial Valuation as of July 1, 2020, City of Jacksonville Correctional Officer Retirement System Valuation as of October 1, 2020, and the City of Jacksonville General Employees Retirement Plan Valuation as of October 1, 2020. The annual termination probability is dependent on an employee’s age, gender, and years of service. For the JPOFFHIT Plan, the rate of withdrawal for reasons other than death and retirement has been developed from are based on the City of Jacksonville Police & Fire Pension Fund Actuarial Valuation as of October 1, 2020. The annual termination probability is dependent on an employee’s age, gender, and years of service. Sensitivity to the City’s net OPEB liability to changes in the healthcare cost trend rates: COJ Plan 1% Decrease Current 1% Increase Net OPEB liability $76,559,000 $88,963,000 $104,220,000 JPOFFHIT Plan 1% Decrease Current 1% Increase Net OPEB liability $286,993,000 $327,457,000 $377,270,000 132 -- 163 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 10. POST EMPLOYMENT BENEFITS OTHER THAN PENSION (OPEB) (continued) Sensitivity to the City’s net OPEB liability to changes in the discount rate: COJ Plan 1% Decrease Current 1% Increase Net OPEB liability $77,846,000 $88,963.000 $102,663,000 JPOFFHIT Plan 1% Decrease Current 1% Increase Net OPEB liability $288,081,000 $327,457,000 $376,934,000 Notes to the OPEB RSI: No assets are held in trust to pay OPEB benefits. Trend rates were reset to 7.0% (6.0% for Medicare) and graded down by 0.25% until reaching an ultimate of 4.0% based on current Healthcare Analytics (HCA) consulting trend study; current economic environment suggests a longer period until reaching the ultimate rate. (The remainder of this page is intentionally left blank.) 133 -- 164 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 11. DEFERRED COMPENSATION PROGRAM The City offers its employees a deferred compensation program created in accordance with Internal Revenue Code (IRC) Section 457 and Chapter 112.215, Florida Statutes. During the year ended September 30, 1999, the City complied with the requirements of subsection (g) of IRC Section 457 and, accordingly, all assets and income of the plan are held in trust for the exclusive benefit of the participants and their beneficiaries. Pursuant to the provisions of GASB Statement No. 32, Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans, the financial statements do not display deferred compensation balances. 12. RISK FINANCING A. Public Liability and Workers Compensation: The City is exposed to various risks of loss related to torts, theft, damage to and destruction of assets, errors and omission, injuries to employees and natural disasters. The Risk Management Division (“Division”) administers the self-insured public liability (general liability and automobile liability) and workers’ compensation coverages (the “Program”). The Program covers the activities of the City general government and the JEA, Jacksonville Housing Authority, Jacksonville Port Authority, and the Jacksonville Aviation Authority (“Members”). Jacksonville’s City Ordinance, Chapter 128, establishes the Program’s self-insurance fund. The Program is a combination of self-insurance, coupled with certain layers of excess coverage to mitigate aberrant and substantial unexpected losses. The City does transfer some risk through the purchase of insurance for its other exposures. The City purchases Watercraft, Wharfingers Liability, Out of State Automobile Liability, Aviation, Terrorism, Crime, Property and other certain General Liability policies (Rails to Trails, Power Lines Easement, Riverwalk, and Voting Precincts) to transfer risk. These policies are subject to sublimits, policy aggregates (where applicable) terms, conditions and exclusions as noted in the policies. Coverages are applicable to specific entities listed as named insureds. The attached schedule indicates the major categories of coverage transferred to insurers. (The remainder of this page is intentionally left blank.) 134 -- 165 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 12. RISK FINANCING (continued) A. Public Liability and Workers Compensation: (continued) 135 -- 166 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 12. RISK FINANCING (continued) A. Public Liability and Workers Compensation: (continued) Annually, as of September 30, the Program has a third party actuary review the claim history for all open claim years. The actuary projects the ultimate claim payment obligation (including the incurred but not reported claims and claim development) for each year’s claim experience and the probable loss fund cost for the new fiscal year. The City uses in-house defense counsel for General and Automobile Liability and outside defense counsel for Workers’ Compensation. The City’s Self-Insurance Program liability is established at the expected confidence level on a four percent (4%) discounted basis in the amount of $135,664,000 for General Liability, Automobile Liability and Workers’ Compensation. Actuarial also projects $9,130,000 of unallocated loss adjustment expenses on a four percent (4%) discounted basis at the expected confidence level. The probable loss fund estimate is used to budget the self-insurance fund for general liability, automobile liability, and workers’ compensation. As an internal service fund, charges are billed to the various funds and component units of the City. If an adjustment is necessary to increase the reported fund liability to reflect the actuary’s estimated ultimate claim payment, then the self- insurance fund will either draw upon its accumulated net assets and/or initiate a year-end billing to the City itself and component units of the City. The City’s practice of cash funding the projected ultimate claims payment is intended to temporarily accumulate net assets, which can be used to meet changes in estimates over time. Projected ultimate claims payment experience is as of the end of each fiscal year, even though some payments may not be made until a later date. The City maintains separate fiscal year accounting, which allows any excess revenues available for return via a dividend formula in Ord. Code. Sec. 128.311, to the City itself and component units, and the accumulation of a Self-Insurance Operating Reserve authorized by the City of Jacksonville Ordinance Code Section 128.312. As of September 30, 2021, the City has a surplus in the Self-Insurance fund of $6,923,765 and a Self-Insurance Operating Reserve for $9,053,404 for a combined unrestricted net asset surplus of $15,977,169. In the Supplemental Section of the City’s Annual Comprehensive Financial Report, is a trend information schedule for general/auto liability and workers’ compensation, entitled “Schedule of Self-Insurance Ten Year Claims Development Information,” which reflects the claims paid and liability projection development of each of the most recent ten years as of September 30, 2021 (The remainder of this page is intentionally left blank.) 136 -- 167 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 12. RISK FINANCING (continued) A. Public Liability and Workers Compensation: (continued) The following schedule presents the changes in aggregate claims liabilities for the past two years of the self-insurance fund’s general liability, automobile liability, and workers’ compensation. The following schedule presents the current and noncurrent claims liabilities for the past two years of the self-insurance fund’s general liability and automobile liability, and workers’ compensation. 2021 2020 2021 2020 2021 2020 Unpaid claims and claims adjustment expenses at beginning of fiscal year 17,761,000 16,545,000 109,231,000 102,758,000 126,992,000 119,303,000 Incurred claims and claim adjustment expenses: Provisions for insured events of the current fiscal year 5,342,407 5,342,407 17,645,835 17,645,834 22,988,242 22,988,241 Increases (decreases) in provision for insured events of prior fiscal years 4,235,673 3,594,356 22,752,791 12,354,488 26,988,464 15,948,844 Total incurred claims and claim adjustment expenses 9,578,080 8,936,763 40,398,626 30,000,322 49,976,706 38,937,085 Payments: Claims and claim adjustment expenses attributable to insured events of current fiscal year 1,123,463 1,123,463 6,742,098 6,742,098 7,865,561 7,865,561 Claims and claim adjustment expenses attributable to insured events of prior fiscal year 7,443,617 6,597,300 16,865,528 16,785,224 24,309,145 23,382,525 Total Payments 8,567,080 7,720,763 23,607,626 23,527,322 32,174,706 31,248,085 Total unpaid claims and claim adjustment expenses at end of fiscal year 18,772,000 17,761,000 126,022,000 109,231,000 144,794,000 126,992,000 SELF-INSURANCE FUND CHANGES IN AGGREGATE CLAIMS LIABILITIES (Including ULAE) FOR THE YEARS ENDING SEPTEMBER 30 General/Auto Liability Worker's Compernsation Totals 2021 2020 2021 2020 2021 2020 Current Liability: Estimated Liability for self-insured losses 9,898,800 9,654,000 26,949,300 21,535,500 36,848,100 31,189,500 Noncurrent Liability: Estimated Liability for self-insured losses 8,873,200 8,107,000 99,072,700 87,695,500 107,945,900 95,802,500 Total Liability 18,772,000 17,761,000 126,022,000 109,231,000 144,794,000 126,992,000 SELF-INSURANCE FUND CURRENT AND NONCURENT CLAIMS LIABILITIES (Including ULAE) FOR THE YEARS ENDING SEPTEMBER 30 General/Auto Liability Worker's Compernsation Totals 137 -- 168 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 12. RISK FINANCING (continued) B. Self-Insured Health Plan: Effective January 1, 2015 the City elected to move from a fully insured plan to a self-funded arrangement for its group health coverage. The primary driver of this decision was the prohibitive cost of commercial health insurance. The City historically utilized Florida Blue as the third party administrator which provides claims adjudication services, provider network contracting and maintenance, and other valuable services. Florida Blue pays claims as they are incurred and bills the City monthly. In order to better manage the risk, the City has contracted for stop-loss insurance with a $800,000 specific deductible in 2021. Once a claim exceeds this threshold, the City is reimbursed for any excess expenses. In 2018, the City added a new health plan option, UF Health, administered by Integra Administrative Group. The UF Health plan has its own stop loss with a deductible $325,000 for 2021. The plan is funded by contributions from the City and employees. These funds reside in an internal service fund which is used exclusively for Employee Benefits. The beginning balance of this fund as of January 1, 2015 was $6,479,716. The City received a pro-share settlement from Florida Blue of $1,547,615. This was the result of superior claims performance that the City experienced in CY2013 and CY2014 as a fully insured health plan. The City received a pharmacy rebate, from Florida Blue, of $1,961,600 for the CY2017, $2,443,997 for CY2018, $3,792,902 for CY2019, and $2,077,584 for CY 2020. Incurred but not reported (IBNR) claims were estimated at $3,738,357 as of September 30, 2021 and are recorded as a liability on the Statement of Net Position. Changes in the reported liability since January 1, 2015 resulted from the following: Fiscal Year Ended Beginning Balance Claims and Changes in Estimates Claim and Expense Payments Ending Balance 2015 $0 $57,049,414 $52,850,908 $4,198,505 2016 $4,198,505 $74,958,235 $74,912,875 $4,243,865 2017 $4,243,865 $73,669,055 $73,152,818 $4,760,102 2018 $4,760,102 $80,379,534 $80,209,535 $4,930,101 2019 $4,930,101 $81,168,970 $80,709,545 $5,389,526 2020 $5,389,526 $74,996,473 $77,078,091 $3,307,908 2021 $3,307,908 $76,076,928 $75,646,480 $3,738,356 As of September 30, 2021 the operating gain was $24,136,689. The Florida state statutes require a safe harbor threshold to be maintained in plan reserves. This threshold for FY 2021 is $8,632,793 and the City has plan reserves of $30,616,406. 138 -- 169 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 13. OTHER REQUIRED INDIVIDUAL FUND AND COMPLIANCE DISCLOSURES A. Compliance with Finance Related Legal and Contractual Provisions: In the opinion of management, the City has no violations of finance related legal and contractual provisions. B. Fund Deficits: The following individual funds had a fund deficit at September 30, 2021, (in thousands): The Public Safety fund had a deficit balance due to the excess expenditures resulting from previous Hurricanes and Tropical Storms. The State and Federal share of these expenditures are anticipated to be reimbursed through the Public Assistance program once all work is completed and the Federal Emergency Management Agency (FEMA) and Florida Department of Emergency Management (FDEM) have completed their review and approval of the projects. The Community Development Block Grant Fund is anticipated to be reimbursed for spending in accordance with the terms of the grant program. The City monitors internal service billings, including rates, to ensure appropriate funding for operations. It is anticipated that future billings will cover expenses and eliminate the fund deficit in the Copy Center and Legal Internal Service Funds. C. Landfill Closure and Postclosure Care Costs: The State of Florida's Solid Waste Management Act of 1988 and regulations of the U.S. Environmental Protection Agency (EPA) and the State of Florida Department of Environmental Protection (FDEP) require the City to be responsible for constructing and maintaining the final landfill cover, monitoring ground water and methane gas, and continuing leachate management 30 years after its municipally owned landfills stop accepting solid waste and are closed. The estimated total costs of municipal solid waste landfill (MSWLF) closure and post closure (long-term) care costs reported by the City are based upon professional consulting engineers' studies prepared annually pursuant to rules promulgated by the EPA and FDEP. However, existing EPA and FDEP closure and long-term regulations may change which might require the City to revise its MSWLF cost estimates used in the future. Fund Deficit Governmental Funds Public Safety (23,490) Community Development Block Grant (1,964) Internal Service Funds Copy Center (17) Legal (37) 139 -- 170 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 13. OTHER REQUIRED INDIVIDUAL FUND AND COMPLIANCE DISCLOSURES C. Landfill Closure and Long-term Care Costs: (continued) Expenses for closure and long-term care costs are funded from future operating revenues of the Solid Waste Disposal fund and bond proceeds. As noted in Note 1. P, the application of SFAS No. 71 resulted in certain costs being capitalized and amortized to later periods. The City obtained bond proceeds to support closure and long-term care cost for North and East landfills and Picketville Waste Site. At September 30, 2021 the prepaid balance of the capitalized cost is $0. Active Landfill – Trail Ridge The closure and long-term liability for Trail Ridge as of September 30, 2021 is $38.3 million which represents an increase of $1,766,344 compared to the preceding year. This increase resulted from adjustments for inflation and current annual closure and long-term care cost estimates. The percentage of landfill capacity used is estimated to be 90.63%, with an estimated life of 32 years for the constructed landfill disposal units 1-6. Inactive Landfills – North and East North and East landfills closed October 1999 and April 1992, respectively. Post closure care requirements have been met for both closed landfills. Annually, the City is required by Chapter 62-701.630 of the Florida Administrative Code, to accumulate resources for payment of closure and long-term care cost. The City is in compliance with these requirements. Due to inflationary increases over the years for costs expended on closing the landfill, costs exceeded the revenue derived from tonnage filling the landfill. The revenue rate structure had not changed in many years and did not keep up with inflation. The City decided to implement a three-phase strategy to address the problem. In FY2017, the City’s General Fund initiated a $9 million loan to the landfill closure/post closure sub fund as Phase 1. In FY2018, the City implemented Phase 2 and made permanent transfers of $9 million to firm up the previous amount loaned. Phase 3 will address a rate review for the landfill closure/post closure revenue projections vs. cost projections, in order to keep the sub fund compliant with the Florida Administrative Code. Ordinance 2021-592-E increased fees to the host fee for the closure fund portion which increased the rate of $1.98 per ton to $2.11 per ton in the closure escrow account. As of September 30, 2021, $23.4 million, which includes $5.6 million for accelerated payments, have been accumulated for payment of closure and long-term care cost (see summary below). Accelerated payments are payments in excess of the required financial assurance balances that are held in reserves for contingencies and are used to offset future operational cost. Trail Ridge Current Cost of Closure 17,802,231 Annual Cost of long-term care - Accerlerated funds above state minimum 5,630,379 Total balance in escrow account 23,432,610 $ 140 -- 171 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 14. LESSOR OPERATING LEASE A. Jacksonville Jaguars, LLC. - The City entered into a lease dated September 7, 1993, pursuant to which the City leases TIAA Bank Field, a City owned stadium, and adjacent practice facilities to the Jacksonville Jaguars, Inc. (Jaguars) for a period of 30 years from the first National Football League (NFL) regular season play in 1995; Amendment 5, executed September 6, 2002, extends the lease an additional five years. The City uses the City Venues enterprise fund to record the stadium, practice facilities, other related capital assets, and all the related revenues and expenses from use of the stadium and practice facilities under this lease agreement. The lease entitles the Jaguars to use the stadium on game days, for practices and summer training camp, and for the period necessary before game days. During other periods of time, the City has the right to use the stadium, except for certain administrative spaces, training facilities, suites, and other areas that are for the exclusive use of the Jaguars. For the first five years, rent is deferred in the amount of $250,000 per year; in years 6-10 rent is $500,000 per year; in years 11-20 $1,000,000; and in the final 15 years $1.25 million, including the lease extension. Amendment 8, executed January 2006, reduced the total Jaguars rent obligations by $8,600,000, which was provided through rental reductions in the amount of $1,433,333 for six payments beginning with the November 2005 payment through the June 2008 payment. Amendment 8 also reduces supplemental lease obligations, with the City’s acceptance of payment from the Jaguars in the amount of $10,197,891 for the full satisfaction of amounts due for Super Bowl net revenues. Rents from years 11 through the end of the lease are subject to escalation based on one-half of any increase in the Consumer Price Index, but not to exceed 2.5% per year. In addition, the Jaguars are obligated to pay supplemental rent in an amount equal to the annual debt service incurred by the City for certain costs of renovation of $53.1 million requested by the Jaguars over a 30-year period with interest computed on a tax-exempt basis; inclusive of Amendment 7 executed May 27, 2004. The lease generally permits the City to retain revenues from City events at the stadium, with some exceptions. Amendments 8 and 12 outline provisions for advertising revenue generated from electronic signage for different stadium functions. The City is required to provide electricity, water and sewer services for the stadium at its expense. The City must maintain the stadium and all leasehold improvements. Per Amendment 8, the City agreed to provide $1,000,000 for additional electronic signs. The City is required to pay for game day personnel, excluding concessions, on the days of Jaguar games. Amendment 8 gives the Jaguars the responsibility to provide concessions to all events within the concessions area. The Jaguars retain all net revenues from concessions and similar sales on NFL game days. The lease obligates the Jaguars to maintain its franchise at the stadium in Jacksonville and to not relocate unless it pays the City certain guaranteed amounts. 141 -- 172 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 14. LESSOR OPERATING LEASE (continued) A. Jacksonville Jaguars, LLC. (continued) Amendment 9 outlines a revenue sharing agreement for the stadium naming rights and provides the parameters for the marketing of the stadium name. Also, Amendment 9 details additional advertising rights and allows for certain fixed signage at the stadium. However, the subsequent naming rights agreement with TIAA Bank eliminated the City participation in revenue generated from the stadium naming rights. Amendment 10 outlines the accepted procedures for the use of the City established Sports Complex Capital Maintenance Fund. The agreement allows the Jaguars to advance fund certain capital, repair and maintenance projects at the stadium and receive reimbursement from the City. Amendment 10 also establishes the procedures for the creation of the related capital improvement plan. Amendment 12 outlines provisions of various improvements to the stadium, including new video boards, renovations and improvements to the North End Zone (NEZ), and stadium Wi-Fi improvements. Total project improvements cost over $60 million, with the City financing approximately $44 million. Amendment 13 clarifies or modifies miscellaneous provisions of the lease, and outlines certain rights of the City and Jaguars with regards to the electric signage included in the improvements of Amendment 12. Amendment 14 outlines provisions of various improvements, including stadium club and south end zone improvements, and the addition of a covered football field practice facility and outdoor amphitheater. Total project improvements cost over $90 million, with the City financing approximately $45 million. Amendment 15 outlines provisions of various improvements, including the construction of the Sports Performance Center. Total cost is $120 million, split evenly between the City and JJL with JJL responsible for all overruns. Additional agreement modifications include a 2019 rental payment reduction of $342,847 to allow for improvements to the practice field. A summary of scheduled lease payments is as follows: Year Payment 2022 3,885,526 2023 3,886,040 2024 3,885,242 2025 4,362,322 2026 6,660,077 2027 -2030 23,152,586 142 -- 173 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 14. LESSOR OPERATING LEASE (continued) A. Jacksonville Jaguars, LLC. (continued) The Jaguars Operating Lease is subject to the rental provisions of GASB #13 – Accounting for Operating Leases with Scheduled Rent Increases. The Base Rental associated with the startup of operations and the initial capital costs for transforming the stadium to an NFL stadium has deferred rents for the first five years and then scheduled rent increases throughout the term of the lease, Amendment #8 in FY2005 providing rental credits of $2,866,666 in FY2006, FY2007, and FY2008, which reduced the rental payment in each of those years. Paragraph 6 of GASB #13 states that “Sometimes an operating lease with scheduled rent increases contains payment requirements in a particular year or years that are artificially low when viewed in the context of earlier or later payment requirements.” This occurred with the base rental of the Jaguars contract. Paragraph 6 guidance states that the operating lease transactions should be measured utilizing one of two measures, with Paragraph 6a being “The operating lease transactions may be measured on a straight-line basis over the lease term.” The City has recorded a deferred rent receivable of $6,039,704 due to the application of GASB #13 based on the difference in the actual rent paid and the calculated straight line rent. In analyzing the lease, there are two conditions that could affect the collection of the deferred rent receivables. The lease has been modified multiple times since the original agreement, providing for rent reduction as noted in amendment #8. Based on this history of amending the lease, there is uncertainty and a potential for other rental reductions or deferments which could put the collection of the deferred rent receivables at risk. Additionally, the lease has several paragraphs concerning early termination of the contract and provides the City of Jacksonville reasonable liquidated damages in the circumstance of the Jaguars leaving the City. This termination provision, in effect, makes the rental collection subject to a year by year basis. The City has an offsetting allowance for the entire $6,039,704 deferred rent receivables. As payments are made, the deferred receivables and allowance are adjusted accordingly. The summary of the leased asset value is as follows: Cost of leased assets $440,281,898 Accumulated depreciation (158,542,778) Carrying value of leased assets $281,731,120 143 -- 174 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 14. LESSOR OPERATING LEASE (continued) B. Shands Jacksonville: Under an agreement with a not-for-profit corporation, Shands Jacksonville, also known as University of Florida Health (UF Health), the City leases to Shands certain capital assets, principally land and buildings, over a term to September 30, 2067 with an option to renew for an additional thirty years to 2097 at $1 per year. In addition, Shands is to operate in full support of the indigent care programs of the Duval County, FL, under the agreement. Shands is to maintain, in good condition, and make improvements and betterments to the Hospital as necessary over the life of the lease. At termination of the lease, all leased property shall revert to the City as a general government asset. 15. LITIGATION, CONTINGENCIES, AND COMMITMENTS A. Litigation: The City is named as party in legal proceedings which occur in the normal course of government operations. Such litigation includes, but is not limited to, claims asserted against the City arising from alleged torts, including claims under the public liability in the Self Insurance Fund, alleged breaches of contract, condemnation proceedings and other alleged violations of state or federal laws. The City self-insures itself through general liability and workers compensation programs for most claims asserted against the City. For all amounts that are probable of loss the City records an estimated liability in the Self Insurance internal service fund. For amounts where it is not possible at the present time to estimate the ultimate outcome or liability, if any, to the City for the proceedings no accrual is recorded. It is the City’s opinion that the ultimate liability in these litigation matters, if any, that have not been accrued, is not expected to have a material adverse effect on the City’s financial position. B. Grants and Contracts: The City participates in various federal and state assisted grant programs that are subject to review and audit by the grantor agencies. Entitlement to these resources is generally conditional upon compliance with the terms and conditions of grant agreements and applicable federal and state regulations, including the expenditure of resources for allowable purposes. Any disallowance resulting from a federal or state audit may become a liability of the City. All City agencies and departments are required to comply with various federal regulations issued by the U.S. Office of Management and Budget if such agency or department is a recipient of a federal grant, contract or their sponsored agreement. Certain agencies and departments may not be in total compliance with these regulations. Failure to comply may result in questions concerning eligibility of related direct and indirect charges pursuant to such agreements. It is believed that the ultimate disallowance pertaining to these regulations, if any, will be immaterial to the overall financial condition of the City. 144 -- 175 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 15. LITIGATION, CONTINGENCIES, AND COMMITMENTS (continued) C. Self-Insurance: Through the City’s Risk Management Division, the City maintains an insurance and self- insurance program (See Note 12). Under the laws of the State of Florida, the City has sovereign immunity for state tort claims in excess of $200,000 per person and $300,000 per occurrence. The City retains coverage on all other types of major exposures including real and tangible property. The self-insured programs of the City, which are included in the Self-Insurance Internal Service Fund, are funded on a dollar-for-dollar basis determined actuarially for the estimated losses for claim development and incurred but not reported claims, and unallocated loss adjustment expenses. Claims are reserved on ultimate probable cost basis. D. Pollution Remediation: Governmental Accounting Standards Board Statement No. 49 Accounting and Financial Reporting for Pollution Remediation Obligations (GASB 49) provides accounting and financial reporting for pollution remediation obligations. While GASB 49 does not require the City to search for pollution, it does require the City to reasonably estimate and report a remediation liability when any of the following obligating events has occurred: The City is compelled to take remediation action because pollution creates an imminent endangerment to public health, The City is in violation of pollution prevention, The City is named, or has evidence that it will be named as responsible party by a regulator, The City is named, or has evidence that it will be named in a lawsuit to enforce cleanup, or The City commences or legally obligates itself to conduct pollution remediation activities. The City recorded a pollution remediation liability as of September 30, 2021 of approximately $88.2 million (See Note 8. C for schedule) using the expected cash flow technique. Under this technique, the City estimated a reasonable range of potential outlays and multiplied those outlays by their probability of occurring. However, this liability could change over time due to changes in cost of goods and services, changes in remediation technology, or changes in laws and regulations governing the remediation efforts. The following paragraphs provide further details on the more significant sites. Whitehouse Waste Oil Pits Superfund Site The US Environmental Protection Agency (USEPA) identified the City as a potential responsible party (PRP) at the Whitehouse Waste Oil Pits Superfund Site in western Duval County. The City and other (PRPs) participated in the USEPA’s Pilot Allocation Project which resulted in the USEPA assuming as much as 65% of the liability at the site, with the City being allocated less than 10% of the liability. 145 -- 176 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 15. LITIGATION, CONTINGENCIES, AND COMMITMENTS (continued) D. Pollution Remediation: (continued) The USEPA estimates $20 million site costs, with the City paying approximately $2 million over the life of the project (which includes a 30 year operations and maintenance period). Site work was substantially complete in October 2006 when operations and maintenance work began. The PRPs have more than $1.9 million on deposit to fund operations and maintenance; however until USEPA officially declares the remedial action complete, the prospect for additional work remains. In January 2008, the City met with adjacent property owners to negotiate the purchase of additional private property to account for the location of the remedial berm. The City and other PRPs settled with the USEPA which had sought reimbursement of its cost of a removal action in 1995, regarding the Bill Johns Waste Oil Site. The City's liability is based on contracting with the waste oil service to empty used oil collection points operated under a recycling grant from the State. The remedial action was completed in late 2006 and early 2007 and following approval of the Remedial Action Report (May 2007), the site was approved for the 30 year long term Operations and Maintenance of the facility. The PRP are responsible for the long term O&M costs for the total 30 year period. We are currently in year 16 of the 30 year period. Ash Sites The City has identified four sites that were used for incinerator ash waste. The common practice during the 1950s and 1960s was to incinerate garbage and then mix the residual ash waste with other soil and use it as fill dirt. The City and the USEPA signed an agreement in 1999 to develop a plan to remediate the four sites. In order to make the sites and surrounding areas safe from a variety of residual pollutants, the City has proposed to the EPA a plan to clean up the areas by removing the top two feet of soil, placing a barrier, and then replacing the topsoil with untainted dirt. The project is estimated to take several years to complete once started and a cost estimate of $30.5 million has been accrued based on the City’s estimate used in its five year capital project plan. As of September 30, 2021, the Ash Sites accumulated approximately $195.74 million of expenditures. Other Sites FDEP identified other sites of potential liability the City is responsible for. These sites include: Doe Boy Dump Site, Gold Merit/Pope Plan, and Confederate Park. These projects, which are estimated to take several years to complete once started, have an estimated cost of $17.8 million, which has been accrued by the City and included in the City’s five year capital projects plan. Various other remediation sites exist within the City and $40 million has been accrued for their estimated liability based on their inclusion in the City’s five year capital projects plan. 146 -- 177 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 15. LITIGATION, CONTINGENCIES, AND COMMITMENTS (continued) D. Pollution Remediation: (continued) The Picketville Waste Dump Site future costs are dependent upon information received from the USEPA and FDEP for the final groundwater monitoring report. The City has completed its long-term O&M responsibilities. However, groundwater impacts above regulatory levels were still present in the last samples for the final report. The City recommended continued groundwater monitoring in lieu of additional assessment and/or remediation. The City awaits a response from the USEPA and FDEP on this matter. E. Garage Development Agreement: The City entered into agreements for a private developer to construct and operate three parking garages. Two of the garages are to support the sports complex and the other is to support a new courthouse site. The current agreement provides an operating subsidy to support debt service, operating deficits, required reserves, and percentage return of equity, totaling approximately $4 million per year. Associated therewith, the City has options to buyout the current business arrangement, refinance the related non-city debt and assume operational control thereof. (The remainder of this page is intentionally left blank) 147 -- 178 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 F. Construction and other significant Commitments: At September 30, 2021, the City had significant commitments for the following projects (in thousands): General Government ADA Compliance-Curb Ramps Sidewalks 4,700 ADA Compliance-Pretrial Detention Facility 564 ADA Compliance-Public Buildings 684 Courthouse Complex Antenna System Replacement 713 Drainage System Rehabilitation - Drainage System Rehabilitation 608 Enterprise Financial & Resource Mangement Solution 7,917 Florida Theatre - Facility Improvements 501 Gate Parkway-Traffic Calming 1,183 Jax Beach Pier - Hurricane Matthew Storm Repairs 3,476 Lenox Ave Sidewalk-New 507 Mayport Community Center 2,247 Medical Examiner Facility - 04 1,198 Northbank Riverwalk - Northbank Artist Walk Extension 954 Northbank Riverwalk - Northbank Bulkhead 2,239 Palm Avenue Improvements 6,400 UF Health Capital Improvements 21,766 Woolery Drive Drainage Study and Improvements 731 Public Safety 4th Street Brick Rebuild-Pearl To Main 639 Field Building Systems 1,225 Fire Station # 4 712 Fire Station # 63 New Construction 726 Fire Station #74 4,064 Fire Station 10 Renovation 1,432 Tropical Storms-Hurricanes - Matthew - AFA01701 705 Physical Environment Jork Road - Jork Road Canal Restoration 1,250 Lakeshore Dr DSR Capital Improvement 656 Lower Eastside Drainage - 01 9,635 Trail Ridge Landfill Const & Expansion - Trail Ridge Landfill Expansion 852 148 -- 179 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 15. LITIGATION, CONTINGENCIES, AND COMMITMENTS (continued) F. Construction and other significant Commitments: (continued) (in thousands): Transportation Brooklyn Area Drainage & Safety Improvement 3,741 Cahoon Rd&Normandy Blvd To Beaver St 8,155 Cecil Fd Con&Brannan-Chaffee To Comm Ctr 2,462 Chaffee Road 559 Children's Way Nira St Pedestrian Improv 546 Collins Rd&Shindler To Old Middleburg 2,315 Countywide Intersection Imp,Brge-Bridges 850 Crystal Springs-Chaffee To Cahoon - Phase5 1,738 Hartley Rd&St Augustine To SR 13 5,869 Jork Road - Jork Road Bridge 572 Major Outfall Ditch Restoration/Cleaning 949 McCoy's Creek Greenway - McCoys Creek Boulevard Closure 1,373 New Berlin Rd 1,291 Old Middleburg 103rd-Branan Field - 01 18,234 Pavement Markings 714 Railroad Crossings 558 Ricker Rd &Old Middleburg to Morse 10,187 Roadway Sign Stripe And Signal 790 Shindler 103Rd to Argyle Forest 17,770 Southside Blvd-Belfort Rd-JTB Trans Impr 698 St Johns Bluff Rd-New Sidewalk ES 1,496 St Johns Bluff Rd-New Sidewalk WS 656 Economic Environment Clara White Mission - White Harvest Farms 1,320 Cole Road Bridge Project 996 LaVilla Project 7,925 Shipyards Project - Environmental Cleanup 572 Two Way Street Conversion 1,122 Culture & Recreation Blue Cyphress Park Soccer Field 732 Countywide Parks & Recreation Projects 1,676 Emerald Trail - S Line 8,425 Friendship Fountain Repairs & Nodes 2,063 Jackson Street Floating Dock 573 Jacksonville Zoo Improvements 12,274 Jax-Baldwin Trail Development - Jax-Baldwin Trail Development 1,285 Post Street Floating Dock - Post Street Floating Dock 893 Water-Wastewater System Fund - Water-Wastewater System Fund 13,261 TOTAL 212,924 149 -- 180 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 15. LITIGATION, CONTINGENCIES, AND COMMITMENTS (continued) G. Encumbrance Commitments: At September 30, 2021, the City had encumbrance commitments in the Governmental Funds as follows: (in thousands) *The Better Jacksonville Plan Construction Project Fund accounts for funds associated with the $2.25 billion improvement plan. Council appropriated funds for the plan in its entirety at the inception, while funding sources including dedicated sales tax and debt issues are secured as needed. Multi-year contracts are encumbered, and funding sources are obtained as construction occurs. The encumbrances are recorded within fund balance based on the source of funds as restricted, committed, or assigned as appropriate. MAJOR FUNDS General Fund 26,836 Special Bonded Debt-Better Jacksonville Plan Obligations 5 Other Federal, State and Local Grants 9,903 Total Major Funds 36,744 $ NON-MAJOR FUNDS Concurrency Management 5,096 Air Pollution Control and Monitoring 25 Tourism Development 3,562 Clerk of the Court 27 Transportation Fund 4,627 Budgeted General Government 3,933 Emergency 9-1-1 183 Tax Increment Districts 12,342 Kids Hope Alliance 10,820 Community Development Block Grant 23,306 Maintenance, Parks and Recreation 132 Public Safety 12,606 Housing and Neighborhoods 6,526 General Bonded Debt Obligations 1,693 General Projects 103,347 Better Jacksonville Plan Construction Project 7,584 Bond Projects 1,880 Grant Projects 10,841 Total Non-Major Funds 208,530 TOTAL ENCUMBRANCES 245,274 $ 150 -- 181 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 15. LITIGATION, CONTINGENCIES, AND COMMITMENTS (continued) H. Tax Abatements: The City administers the following tax abatement programs. Name of Program Recaptured Enhanced Value (REV) Grant Qualified Target Industry Purpose of program Designed to bring new capital investment and development or redevelopment to a project site to support a new business or to expand an existing business, thus resulting in the creation of new full time jobs. To attract greater private sector investment, to expand the opportunity for individuals to gain high wage employment, and to lower the overall unemployment rate in Duval County by providing jobs at above average wage levels in the county. Tax being abated Real and/or Tangible Personal Property Tax Corporate Income Tax, Sales Tax, Ad valorem Tax, Insurance Premium Tax, Intangible Personal Property Tax, Excise Tax, State Communication Service Tax Authority under which abatement agreements are entered into Part 2, Chapter 26, City of Jacksonville Ordinance Code and Ordinance 2016-382-E (Public Investment Policy), Florida Statutes 125.045 County Economic Development Powers Florida Statute 288.106 Tax refund program for qualified target industry businesses Eligibility criteria The company is required to be on a Targeted Industry Category. The company must create at least 10 new full time jobs with wages greater than or equal to 100% of the State of Florida average wage, or greater than or equal to 60% of Duval County's average annual wage. The company must commit a minimum of $3 million private capital investment. The company is required to be in a Targeted Industry Category. The company must create at least 10 new full time jobs with an average annual wage that is at least 115% of the State, Metropolitan Statistical Area, or local average wages. How recipient taxes are reduced As refunds on real and personal property taxes paid by the project above the base year. As refunds on corporate income, sales, ad valorem, intangible personal property, insurance premium, and certain other taxes. How amount of abatements is determined Utilizing a "base year" assessed property value for the project, a certain percentage of the City's portion of the incremental increase in ad valorem taxes on real and /or tangible personal property paid by the project above the base year amount is available. In general, the standard grants will be up to 50% of the increment up to 10 years. They are capped at a maximum amount. The percentage and length of time is negotiated between parties. Higher percentages or timeframes may be awarded for projects with high volumes of job creation and capital investment. Pre-approved applicants receive tax refunds of $3,000 per net new Florida full time equivalent job created. For businesses paying 150% of average annual wage, add $1,000 per job; for businesses paying 200% of the average wage, add $2,000 per job. The agreement is between the State of Florida's Department of Economic Opportunity (DEO) and the company. The State agency reviews and audits information provided by the Company and sends an invoice to the City of Jacksonville. The City then sends 20% Local Financial Support to the State, who subsequently pays the Company. Provision for recapturing abated taxes N/A N/A Office of Economic Development Office of Economic Development $7,217,730 $568,851 Downtown Investment Authority Downtown Investment Authority $2,151,923 N/A Amount being abated for the year ended September 30, 2021 151 -- 182 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 16. MAJOR DISCRETELY PRESENTED COMPONENT UNITS - ADDITIONAL DISCLOSURE During fiscal year 2021, the City had financial transactions with its discretely presented component units classified as follows for financial reporting purposes: A. JEA: Contribution - On October 1, 1968, the City turned its electrical department over to the newly created JEA. Additionally, on June 1, 1997, the JEA assumed the operation and all related assets and liabilities of the water and sewer system from the City. The JEA is required by the City Charter to contribute annually to the General Fund of the City an amount not to exceed 5.513 mills per kilowatt per hour sold and at a rate of 2.149 mills per cubic feet of water sold. For the fiscal year ended September 30, 2021 these contributions total $120,012,250. Such contributions to the City’s General Fund are for the use of the public right-of-way in connection with its electric distribution system and its water sewer distribution and collection system and are based on calculations contained within section 21.07 of the City Charter. Franchise Fees - Effective April 1, 2008, the City enacted a 3% franchise fee from designated revenues of the Electric and Water and Sewer Utility systems. The ordinance authorizes JEA to pass through these fees to its electric and water and sewer funds. For the year ended September 30, 2021, the City received from JEA $28,759,787 and $10,886,085 of its electric and water and sewer funds. B. Jacksonville Transportation Authority (JTA): Local Option One-Half Cent Sales Tax - On August 11, 1989, Jacksonville citizens voted for the removal of all tolls from county/city bridges and certain roads and replaced the revenue with a local option one-half cent sales tax that provides a permanent funding source for the construction and maintenance of the City’s roads and bridges; the operation and maintenance of the bus system and the refinancing of existing bonds issued for the construction of such bridges and roads. All collections from the one-half cent sales tax are statutorily required to be remitted to the JTA. Accordingly, the City remitted all collections from the one-half cent sales tax to the JTA in the amount of $107 million in fiscal year 2021. Such collection and payment by the City of this local option one-half cent sales tax is recorded in the Transportation Special Revenue fund as revenue and a transportation expenditure in the equal amount. The JTA reports the transfer from the City as sales tax revenue. In fiscal year 2000, the City and the JTA entered into an interlocal agreement for the purpose of jointly exercising the separate powers of each to the maximum extent allowable by the law in the development, scheduling, financing, planning, permitting, design, construction, and implementation of a $750 million Road, Bridge and Drainage Capital Improvement Work Program. The term of the agreement commenced on October 1, 2000 and was to continue in effect until all of the bonds were paid in full or defeased in accordance with their terms. The City and JTA agreed to pledge the Sales Tax and the Constitutional Gas Tax for the payment of bonds issued to implement the program. 152 -- 183 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 16. MAJOR DISCRETELY PRESENTED COMPONENT UNITS - ADDITIONAL DISCLOSURE (continued) B. Jacksonville Transportation Authority (JTA): (continued) Any funds available above debt service would be collected in a pay-as-you-go fund to assist with the payment of program expenditures. In addition, the City made available revenues from the Local Option Gas Tax for the operation of the JTA’s Mass Transit Division. Beginning September 1, 2016, a new interlocal agreement between the City and JTA went into effect. The Sales Tax and Constitutional Gas Tax continue to be pledged for the program’s debt service. Any Sales Tax revenues available above debt service are returned to JTA and may be used for certain transportation-related purposes as defined by the agreement. Revenues from the Constitutional Gas Tax are to be used for debt service only if the Sales Tax revenues are insufficient. Any Constitutional Gas Tax revenues available above debt service are split equally between the City and JTA. In addition, the new interlocal agreement provides that five-sixths of the Local Option Gas Tax be made available to JTA for the development, construction, operation and/or maintenance of certain roadway projects managed by JTA as identified in the agreement’s exhibits. C. Jacksonville Port Authority (JPA): Interlocal Agreement - In connection with a major port and marine facilities capital improvement project (the “Project”), the City and the JPA entered into an Interlocal Agreement upon the issuance of $43,605,140 Excise Taxes Revenue Bonds, Series 1993 (the “1993 Bonds”). Subsequent to this transaction, the parties entered into an Amended and Restated Interlocal Agreement in conjunction with the issuance of $57,150,000 Excise Taxes Revenue Bonds, Series 1996B (the “1996B Bonds”). The 1996B Bonds were refunded by the Excise Taxes Revenue Refunding Bonds, Series 2001A (the “2001A Bonds”). The 1993 Bonds were partially refunded by the Excise Taxes Revenue Refunding and Improvement Bonds, Series 2003C (the “2003C Bonds). The 2003C Bonds were partially refunded by the Special Revenue Refunding Bonds, Series 2012E (the “2012E” Bonds, and together with the 1993 Bonds, 2001A Bonds and 2003C Bonds, the “Bonds”). Under the Amended and Restated Interlocal Agreement, the City agreed to issue the Bonds to finance the Project, and the JPA, in consideration therefore, agreed to reimburse the City for debt service payments on the Bonds from certain revenues allocated to the JPA. Any insufficiency in the extent of such revenues allocated to the JPA under the Amended and Restated Interlocal Agreement or any amendments to the Amended and Restated Interlocal Agreement does not affect in any manner any obligation of the City pursuant to the terms of the Bonds. 153 -- 184 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 16. MAJOR DISCRETELY PRESENTED COMPONENT UNITS - ADDITIONAL DISCLOSURE (continued) C. Jacksonville Port Authority (JPA): (continued) The amended and restated Interlocal Agreement is not for the benefit of the holders of the Bonds and the JPA has no obligation under that Amended and Restated Interlocal Agreement to any third party bondholder. The revenues allocated to the JPA are not pledged as security for the Bonds. The Amended and Restated Interlocal Agreement provides for the allocation of three sources of revenue (collectively referred to as the “Pledged Revenues”) by the City to the JPA. The first source of revenue relates to the allocation of half of the increased revenues in the Telecommunications Tax, which is 85% of the Communication Services Tax (the “Authority Allocation No. 1”). The second source of revenue relates to the amount calculated by multiplying one quarter (.25) mills by the gross kilowatt hours (as defined in Article 21 of the City Charter) sold by JEA during the twelve month period ending May 31 of the prior fiscal year (the “Authority Allocation No. 2”). The third source of revenues relates to the $800,000 annual contribution remitted by the City to the JPA as described in Section 5(a) of the JPA act. Such Pledged Revenues are to be applied by the City to the payment of debt service on the Bonds for such fiscal year prior to being paid to the JPA. The final payments on the last remaining bonds were made on October 1, 2020 so debt service has not been, and will no longer be, deducted from the payment as of that date. In previous years, the City expended $43.1 million on the Project from proceeds of the 1993 Bonds for the benefit of the JPA under the Amended and Restated Interlocal Agreement, which completed the 1993 Bond Program. In previous years, the City expended $64 million on the Project from proceeds (inclusive of investment earnings) of the 1996B Bonds for the benefit of the JPA under the Interlocal Agreement. (The remainder of this page is intentionally left blank) 154 -- 185 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 17. SUBSEQUENT EVENTS On February 2, 2022, the City entered into an agreement to issue $120,380,000 Special Revenue Bonds, Series 2022A for the purpose of refunding a portion of the City’s outstanding Capital Improvement Refunding Revenue Bonds, Series 2012 and a portion of the City's outstanding Special Revenue Refunding Bonds, Series 2012C and pay the costs of issuance related to the Series 2022A Bonds. These bonds were issued on a forward basis and closed on July 7, 2022. On April 19, 2022, the City issued its $28,682,400 Taxable Special Revenue Bond, Series 2022B bonds to refinance the acquisition of the three parking garages owned and operated by Metropolitan Parking Solutions, LLC commonly known as the Courthouse Garage, the Arena Garage and the Sports Complex Garage, to finance the construction of certain capital equipment and improvements related to the Garages, and to pay the costs of issuance related to the Series 2022B bond. This issuance occurred in the form of a bank loan. On May 5, 2022, the City entered into a rate lock agreement on its $262,750,000 Better Jacksonville Sales Tax Refunding Revenue Bonds, Series 2022 for the purpose of refunding of the City’s outstanding Better Jacksonville Sales Tax Refunding Revenue Bonds, Series 2012 and Better Jacksonville Sales Tax Refunding Revenue Bonds, Series 2012A, and to pay costs of issuance related to the 2022 Bonds. This issuance occurred in the form of a bank loan that on July 7, 2022. On May 11, 2022, Moody's Investors Service upgraded to Aa2 from Aa3 the City’s issuer rating, upgraded to Aa3 from A1 the city's non-ad valorem rating, and upgraded to Aa3 from A1 the city's transportation bonds. Moody's also affirmed the A1 rating on the city's Capital Improvement bonds and the Aa3 on the City's Better Jacksonville sales tax bonds. (The remainder of this page is intentionally left blank) 155 -- 186 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 18. 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 that is associated with capital assets less outstanding capital asset related debt. The net related debt is the debt less the outstanding liquid assets and any associated unamortized cost. Restricted Net Position – are assets that have third-party (statutory, bond covenant or granting agency) limitations on their use externally imposed by creditors or imposed by law through constitutional provision or enabling legislation. The City would typically use restricted assets first, as appropriate opportunities arise, but reserves the right to selectively defer the use thereof to a future project or replacement equipment acquisition. Unrestricted Net Position – have no third party limitation on their use, and consists of all net position that do not meet the definition of the other two components, and any net deficits that exist. While the Unrestricted Net Position balance is a single number in accordance with GASB Statement 34, the impact of non-asset debt will reduce the year-end discretionary balance available to the government. A. Additional Disclosure: However, in the City’s case, given that a portion of these non-asset bonds/loans reported in the Governmental Activities column have a dedicated revenue source (to amortize the debt over time) the year-end available portion of the Net Position to the City is greater than is apparent. The following schedule illustrates these differences (000s): Governmental Unrestricted Net Position (page 26) (2,679,196) $ Impact of Better Jacksonville Plan's (BJP) bond financed capital expenditures incurred by component units and other entities. 59,881 Economic Incentives to be repaid by TIF revenue and/or Developer 13,129 Governmental - Unrestricted Net Position (adjusted for dedicated revenue funded portions) (2,606,186) $ 156 -- 187 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 18. NET POSITION: (continued) A. Additional Disclosure: (continued) Because the BJP program has dedicated sales tax revenue sources which will be used to repay the related debt service and either the CRA’s tax increment financing (TIF) revenue or the Developer repayments are anticipated to address the related debt service principal and all or a portion of the interest, the Government Unrestricted Net Position (adjusted for dedicated revenue funded portions of non-asset debt) more truly reflect the General Government’s available (although partially tentatively targeted) portion of net position. B. Restatement due to a change in accounting principle: The fiscal year 2021 implementation of Governmental Accounting Standards Board (GASB) Statement No. 84, Fiduciary Activities, resulted in a restatement of beginning Fiduciary Fund net position due to a change in accounting principle. The statement requires the calculation of net position of Custodial funds. These funds were previously reported as Agency funds and did not carry a net position per previous standard guidance. C. Restatement to governmental activities: Effective November 19, 2019, the City of Jacksonville entered into an agreement with the City of Jacksonville Beach to provide advanced life support and fire services to residents and businesses of Jacksonville Beach. The Jacksonville Beach firefighters became employees of the City of Jacksonville. The terms of the agreement resulted in a positive $2.8 million restatement to the beginning net position for Total Governmental Activities. Note 9 Pension Plans provides additional detail of the agreement. The overstatement of accounts receivable and revenue in 2020 in the Other Federal State and Local Grants Fund was due to enterprise resource planning software implementation issues and resulted in a negative $3.9 million restatement of net position. Net Position (in thousands) Fiduciary Custodial Funds Beginning as previously reported - Restatement 28,753 Beginning as restated 28,753 $ Net Position (in thousands) Total Governmental Activities Beginning as previously reported (1,178,262) Restatement (989) Beginning as restated (1,179,251) $ 157 -- 188 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 19. FUND BALANCE DISCLOSURE: In accordance with Governmental Accounting Standards Board Statement 54, Fund Balance Reporting and Governmental Fund Type Definitions, the City classifies governmental fund balances as follows: Nonspendable - includes fund balance amounts that cannot be spent either because it is not in spendable form or because of legal or contractual requirements. Spendable Fund Balance Restricted – includes fund balance amounts that are constrained for specific purposes which are externally imposed by providers, such as creditors or amounts constrained due to constitutional provisions or enabling legislation. Committed – includes fund balance amounts that are constrained for specific purposes that are internally imposed by the government through formal action of the highest level of decision making authority, City Council, through the issuance of an ordinance. Commitments may only be changed through the same type of formal action that created the commitment. Assigned – includes spendable fund balance amounts that are intended to be used for specific purposes that are neither considered restricted or committed. Fund Balance may be assigned through the following: 1) The Director of Finance is authorized by City Council to assign amounts for a specific purpose. (2) The City Council has authorized the Director of Finance, in coordination with the Council Auditor, to recapture excess fund balance that isn’t restricted or committed and transfer the excess to the General Fund – General Service District. Excess fund balance that is not recaptured is classified as assigned by the Director of Finance to be used for the purpose of the subfund. Unassigned - includes residual positive fund balance within the General Fund that 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 or committed for those specific purposes. 158 -- 189 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 19. FUND BALANCE DISCLOSURE: (continued) The City uses restricted amounts first when both restricted and unrestricted fund balance is available unless there are legal documents/contracts that prohibit doing this, such as in grant agreements requiring dollar for dollar spending. Additionally, the City would first use committed, then assigned, and lastly unassigned amounts of unrestricted fund balance when expenditures are made, with the exception of the emergency reserve established by the City Council. Under normal circumstances, the City would first elect to utilize the Operating Reserve (Unassigned fund balance in the General Fund) before considering use of its Emergency Reserve. The City Council established an emergency reserve policy and fund beginning with the fiscal year 2006 budget and amended with Ordinance 2010-852-E, which added “The Emergency Reserve can be used to address unanticipated non-reimbursed expenditures arising out of a hurricane, tornado, other major weather related events, and/or other massive infrastructure failures or other disasters, whether man made or caused by nature.” The emergency reserve is contained as a separate subfund within the General Fund and is included in each annual budget. The emergency reserve shall not be used except as initiated by the mayor through written communication to the City Council, explaining the emergency, and requires approval by two-thirds vote of all City Council members. The emergency reserve will be classified as committed fund balance. The City does not have a formal minimum fund balance policy. However, the City’s Ordinance Code addresses various targeted reserve positions and the Administration calculates targets and actuals to report the results annually to City Council. A schedule of City fund balances is provided in the following pages. (The remainder of this page is intentionally left blank) 159 -- 190 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO THE FINANCIAL STATEMENTS NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2021 19. FUND BALANCE DISCLOSURE A. FUND BALANCE CLASSIFICATION (in thousands) SPECIAL BONDED DEBT- BETTER JACKSONVILLE SPECIAL GENERAL PLAN BONDED DEBT- FUND OBLIGATIONS OBLIGATIONS FUND BALANCES: Non Spendable: Imprest cash and cash in escrow - $ - $ - $ Inventories 4,651 - - Other 18 - - Spendable: Restricted for: Debt Service Reserved by Debt Covenants - 85,715 11,204 Parks and Recreation Projects - - - Physical Environment - - - Conservation and Resource Management - - - Transportation Projects - - - - - - - - - - - - Public Safety - - - Industry Development - - - Other 5,445 - - Committed to: City Council Emergency Use 66,028 - - Drainage Projects - - - Parks and Recreation Projects 2,011 - - Planning Projects 4,206 - - Physical Environment - - - Conservation and Resource Management - - - Transportation Projects - - - Emergency and Disaster Relief - - - Court Projects and Operations - - - Public Safety 13,721 - - Industry Development 10,664 - - Other 7,002 - - Assigned to: Parks Projects 1,392 - - Planning Projects 2,912 - - Public Safety 9,499 - - Industry Development 7,382 - - Other 4,848 - - Unassigned 266,290 - - Total Fund Balances 406,069 $ 85,715 $ 11,204 $ Housing and Urban Development Building Human Services MAJOR FUNDS 160 -- 191 of 389 -- OTHER FEDERAL, NON MAJOR STATE AND GOVERNMENTAL ALL FUNDS LOCAL GRANTS FUNDS 2021 2020 - $ 191 $ 191 $ 160 $ - 4,651 4,545 - 1,968 1,986 1,667 - - 96,919 125,870 - 3,906 3,906 4,142 - 177 177 188 - 1,143 1,143 1,212 - 8,789 8,789 9,320 - 22,937 22,937 24,324 - 12,743 12,743 13,513 - 257 257 273 - 2,073 2,073 2,198 - 47,220 47,220 50,074 3,057 47 8,549 3,091 - - 66,028 65,259 - 649 649 594 - 29,914 31,925 31,024 - 459 4,665 5,510 - 5,693 5,693 5,210 - 38,494 38,494 35,335 - 191,846 191,846 175,555 - 7,820 7,820 53,350 - 4,102 4,102 3,754 - 35,232 48,953 46,777 - 10,582 21,246 14,337 - 110,656 117,658 108,424 - - 1,392 3,298 - - 2,912 2,525 - - 9,499 7,130 - - 7,382 2,308 - - 4,848 3,554 - - (25,454) 240,836 210,323 3,057 $ 511,444 $ 1,017,489 $ 1,014,844 $ (Continued) TOTAL 161 -- 192 of 389 -- (This page is intentionally left blank.) 162 -- 193 of 389 -- REQUIRED SUPPLEMENTAL INFORMATION 163 -- 194 of 389 -- CITY OF JACKSONVILLE, FLORIDA GENERAL FUND REQUIRED SUPPLEMENTAL INFORMATION SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL BUDGETARY BASIS (in thousands) FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 VARIANCE WITH FINAL BUDGET- BUDGETARY POSITIVE ORIGINAL FINAL ACTUAL ENCUMBRANCES ACTUAL (NEGATIVE) REVENUE: Property taxes....................................................... $ 741,295 $ 741,295 $ 752,018 - $ $ 752,018 $ 10,723 Utility service taxes.............................................. 93,357 93,357 94,286 - 94,286 929 Community service taxes......................... 28,403 28,403 29,413 - 29,413 1,010 Sales and tourist taxes......................................... 1,165 1,165 1,250 - 1,250 85 Local business tax................................................ 6,896 6,896 6,993 - 6,993 97 Licenses, permits and fees.................................... 42,003 42,003 41,782 - 41,782 (221) Intergovernmental................................................ 174,134 174,134 207,049 - 207,049 32,915 Charges for services............................................. 72,728 75,938 81,862 - 81,862 5,924 Fines and forfeitures............................................. 1,994 1,994 2,713 - 2,713 719 JEA contribution.................................................. 120,012 120,012 120,012 - 120,012 - Investment Earning............................................... 6,186 7,449 5,287 - 5,287 (2,162) Other.................................................................... 15,569 19,260 18,955 - 18,955 (305) Total Revenue........................................................... 1,303,742 1,311,906 1,361,620 - 1,361,620 49,714 EXPENDITURES AND ENCUMBRANCES: City Council......................................................... 11,959 12,908 11,760 37 11,797 1,111 Clerk of the Courts............................................... 5,536 5,963 5,365 169 5,534 429 Courts................................................................... 5,375 5,476 5,450 28 5,478 (2) Downtown Investment Authority………. 1,052 10,248 916 358 1,274 8,974 Employee Services………………………… 7,145 7,705 6,967 513 7,480 225 Finance................................................................. 20,690 22,077 20,168 590 20,758 1,319 Fire/Rescue.......................................................... 279,487 285,031 287,609 914 288,523 (3,492) General Counsel................................................... 165 165 134 - 134 31 Health Administrator............................................ 1,115 1,215 1,115 - 1,115 100 Inspector General………………………………. 1,297 1,300 1,247 5 1,252 48 Jacksonville Human Rights Commission.............. 787 793 752 1 753 40 Mayor................................................................... 4,655 4,863 4,591 193 4,784 79 Advisory Boards and Commissions...................... 501 504 487 4 491 13 Medical Examiner................................... 5,748 5,824 5,457 53 5,510 314 Military Affairs, Vet & Disabled Svcs…. 1,467 1,469 1,427 - 1,427 42 Office of Economic Development……… 1,930 10,240 3,318 (272) 3,046 7,194 Office of Ethics……………………………. 463 463 423 - 423 40 Parks & Recreation………………………. 48,145 46,482 43,841 533 44,374 2,108 Property Appraiser................................. 11,429 12,257 11,156 46 11,202 1,055 Public Defender.................................................... 2,462 2,476 2,472 - 2,472 4 Planning and Development................................... 4,548 4,590 4,049 124 4,173 417 Public Libraries.................................................... 35,343 37,547 35,244 729 35,973 1,574 Public Works........................................................ 49,108 52,236 49,962 2,359 52,321 (85) Neighborhoods…………………………………. 22,960 23,579 22,379 65 22,444 1,135 Sports & Entertainment………………………… 6,378 7,097 5,011 602 5,613 1,484 State Attorney...................................................... 2,250 2,277 2,286 1 2,287 (10) Supervisor of Elections........................................ 6,936 7,329 7,540 197 7,737 (408) Office of the Sheriff.............................................. 484,601 493,235 484,725 8,945 493,670 (435) Tax Collector....................................................... 19,244 21,207 19,913 383 20,296 911 Federal Program Reserve..................................... 1,000 251 - - - 251 Contribution to Shands-Jacksonville.................... 30,276 30,276 29,472 - 29,472 804 Cash Carryover Reserves..................................... 64,921 64,921 - - - 64,921 Jacksonville Misc. Citywide Activities................. 148,143 151,024 108,897 10,259 119,156 31,868 Total Expenditures.................................................... 1,287,116 1,333,028 1,184,133 26,836 1,210,969 122,059 EXCESS OF REVENUE OVER (UNDER) EXPENDITURES............................................... 16,626 (21,122) 177,487 (26,836) 150,651 171,773 OTHER FINANCING SOURCES (USES): Long Term Debt Issued........................................ 35,433 35,433 - - - (35,433) Transfers in.......................................................... 16,542 18,571 16,351 - 16,351 (2,220) Transfers out........................................................ (137,461) (150,515) (127,705) - (127,705) 22,810 Total Other Financing Sources (Uses)....................... (85,486) (96,511) (111,354) - (111,354) (14,843) EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (68,860) (117,633) 66,133 (26,836) 39,297 156,930 FUND BALANCES - BEGINNING......................... 34,221 (17,927) 339,936 - 339,936 - FUND BALANCES - ENDING.............................. (34,639) (135,560) 406,069 (26,836) 379,233 - GENERAL FUND BUDGETED AMOUNTS 164 -- 195 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 1. BUDGETARY DATA The City uses the following procedures in establishing the budgetary data reflected in the financial statements. A. The City adopts its budget in accordance with Chapters 129 and 200, Florida Statutes, the City Charter and Municipal Ordinance Code. (1) The Mayor's Proposed Budget is presented to the City Council on the second Tuesday in July; the budget ordinance, millage levy ordinance and related resolutions are introduced. (2) During the first Council meeting in September, public hearings are held on both the budget and the millage rate. Following the public hearings, the Council adopts a tentative budget and tentative millage rate. A final budget and millage is adopted by full Council, and is effective on October 1. The City presents a Budgetary Comparison Schedule as Required Supplementary Information for the General Fund and each major special revenue fund with a legally adopted budget. For the Fiscal Year 2021, the Other Federal, State, and Local Grants Fund met the criteria to be reported as a major fund, but is not annually budgeted. The City has opted to make this presentation in the format and classifications of the budget document. These schedules report actual expenditures using generally accepted accounting principles as well as expenditures on the budgetary basis, which include amounts encumbered for future spending. B. The City adopts annual budgets for the General Fund, certain Special Revenue Funds, and Proprietary Funds. The City reports Budgetary Comparisons for its General Fund and Major Special Revenue Funds in the Required Supplementary Information section of the report. None of these funds had an excess of expenditures over appropriations for the year ended September 30, 2021. Proprietary Fund budgets are adopted for management control purposes. The City is not required to include Budgetary Comparisons for Proprietary Funds in this report. Project or program budgets, which may not coincide with the City's fiscal year, or which may exceed a single annual period, are adopted by separate ordinance for most Special Revenue Funds and Capital Project Funds. Budgets are not formally adopted for Debt Service Funds as internal spending controls are set by compliance with bond covenants. The Special Revenue Funds which are not annually budgeted include the following: Public Safety, Community Development Block Grant, Job Training Partnership Act Grant, Maintenance Parks and Recreation, Other Federal, State and Local Grants, Better Jacksonville Trust Fund, Housing and Neighborhoods, State Housing Initiative Partnership, Non-Budgeted General Government, and Clerk of Court. 165 -- 196 of 389 -- CITY OF JACKSONVILLE, FLORIDA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 1. BUDGETARY DATA (continued) C. Level of Budgetary Control - Expenditures may not exceed appropriations and are controlled in the following manner: (1) The budget is adopted by ordinance which sets the legal level of control at the fund level by department. (2) The City adopted more stringent administrative policies that control expenditures at the major category (Personal Services, Operating Expense, Capital Outlay, Debt Service) level within divisions within individual funds. (3) The City, additionally, adopted a Municipal Ordinance Code Policy that provides transfer authority to the mayor, without City Council approval, within an individual fund to include unique chart of account combinations if the total transferred funds for a specific purpose, project or issue is under $500,000 during the fiscal year. These transfers are reported to the Finance Committee on a quarterly basis. D. Supplemental Appropriations - The City Council may, through passage of an ordinance, amend the budget in any manner permissible under state and local law, with one exception. Bond covenants, trust and agency agreements, and certain clauses of ordinances in effect may restrict certain budgetary items in terms of amount or use. In certain instances the City may supplement the appropriations in a fund due to unexpected high levels of receipts or under estimates of carry forward balances. Supplemental appropriations to the Fiscal Year 2021 Annual Budget Ordinance were made throughout the year, the effects of which were not material. E. All appropriations in annually budgeted funds, except for amounts corresponding to outstanding encumbrances, lapse at year-end or at the close of the authorizing project/program, unless specifically carried forward by ordinance. F. Formal budgetary integration is used as a management control device for all funds of the City, except certain Debt Service Funds as explained in Note to RSI 1.C. G. The City’s Annual Financial Plan, or published budget document, may be obtained from the City’s Budget Office located at 117 West Duval Street, Suite 325, Jacksonville, Florida 32202. H. The Clerk of Court special revenue fund budget is not approved by the City. The Court fund is submitted and approved by the State and is based on the State’s July 1st to June 30th fiscal year. 166 -- 197 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION SCHEDULE OF CONTRIBUTIONS - LAST 10 FISCAL YEARS CITY OF JACKSONVILLE RETIREMENT SYSTEM FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 (in thousands) Actual Plan Year Actuarially Contribution Contribution Ending Determined City Cash Deficiency/ Covered as a % of September 30 Contributions Contributions (Excess)** Payroll* Covered Payroll General Employees Retirement Plan 2021 76,833 77,269 (436) 246,864 31.30% 2020 71,250 72,193 (943) 249,983 28.88% 2019 69,248 70,338 (1,090) 253,982 27.69% 2018 70,166 71,024 (858) 257,850 27.54% 2017 94,527 94,700 (173) 250,894 37.75% 2016 89,059 84,898 4,161 254,034 33.42% 2015 86,069 81,751 4,318 262,369 31.16% 2014 81,531 71,000 10,531 265,405 26.75% 2013 66,660 55,386 11,274 283,021 19.57% 2012 57,498 49,899 7,599 314,054 15.89% Corrections Officers Retirement Plan 2021 15,045 15,061 (16) 28,268 53.28% 2020 15,043 15,045 (2) 28,726 52.37% 2019 14,498 14,498 0 28,164 51.48% 2018 13,973 13,973 0 27,548 50.72% 2017 19,156 19,162 (6) 26,585 72.08% 2016 18,864 18,864 0 28,091 67.15% 2015 17,618 17,832 (214) 27,374 65.14% 2014 14,885 13,522 1,363 27,871 48.52% 2013 12,885 10,742 2,143 28,944 37.11% 2012 11,861 9,066 2,795 31,832 28.48% *Pensionable payroll as of the valuation measurement date 10/1. **The City contributed the percentage of payroll represented by the actuarially determined contributions in the corresponding actuarial valuation. Actual dollar contributions may be more or less than the actuarially determined contributions due to actual payroll being different than projected payroll. 167 -- 198 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION SCHEDULE OF CONTRIBUTIONS - LAST 10 FISCAL YEARS FLORIDA STATE RETIREMENT SYSTEM FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 (in thousands) PENSION PLAN Actual Plan Year Actuarially Contribution Contribution Ending Determined City Cash Deficiency/ Covered as a % of September 30 Contributions Contributions (Excess) Payroll Covered Payroll 2021 630 641 (11) 1,483 43.22% 2020 698 755 (57) 2,065 36.56% 2019 706 732 (26) 1,897 38.59% 2018 759 758 1 2,043 37.10% 2017 712 710 2 2,048 34.65% 2016 695 724 (29) 2,072 34.93% 2015 769 774 (5) 2,175 35.60% HEALTH INSURANCE SUBSIDY Actual Plan Year Actuarially Contribution Contribution Ending Determined City Cash Deficiency/ Covered as a % of September 30 Contributions Contributions (Excess) Payroll Covered Payroll 2021 35 33 2 1,473 2.24% 2020 36 39 (3) 2,065 1.89% 2019 39 38 1 1,897 1.98% 2018 43 39 4 2,043 1.91% 2017 43 36 7 2,048 1.78% 2016 42 37 5 2,072 1.79% 2015 35 40 (5) 2,175 1.83% Prior years information is unavailable Prior years information is unavailable 168 -- 199 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION SCHEDULE OF CONTRIBUTIONS - LAST 10 FISCAL YEARS CITY OF JACKSONVILLE BEACH FIREFIGHTERS’ RETIREMENT SYSTEM FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 (in thousands) Actual Plan Year Actuarially Contribution Contribution Ending Determined City Cash Deficiency/ Covered as a % of September 30 Contributions Contributions (Excess)** Payroll* Covered Payroll Jacksonville Beach Firefighters 2021 842 842 0 1,874 44.92% 2020 1,067 1,102 (35) 1,832 60.15% 2019 658 658 0 2,444 26.91% 2018 608 608 0 2,030 29.97% 2017 501 501 0 2,123 23.61% 2016 422 422 0 2,020 20.90% 2015 368 390 (22) 1,848 21.10% 2014 408 458 (50) 1,868 24.51% Notes to Schedule of Contributions Valuation Date October 1, 2019 for period ended September 30, 2021 Actuarial Cost Method: Entry Age Normal Amortization Method: Level Dollar, Closed Remaining Amortization Period: 9 Years Asset Valuation Method: 4-Year Smoothed Market Actuarial Assumptions: Inflation 2.5% wage inflation, 2.5% price inflation Investment Rate of Return 7.0% Projected Salary Increases 2.7% to 6.3% Retirement Age Age and experience-based table of rates that are specific to the type of eligibility condition. Last updated for the 2002 valuation. Mortality The Florida Retirement System (FRS) mortality tables which use variations of the fully generational RP-2000 Mortality Tables with projection scale BB. Other Information: The employer contribution for September 30, 2020 was recalculated in the October 1, 2019 actuarial valuation report dated February 14, 2020 in accordance with the Interlocal Agreement with the City of Jacksonville. Additional years will be added to this schedule annually until 10 years of data are presented. 169 -- 200 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY – LAST 10 FISCAL YEARS CITY OF JACKSONVILLE RETIREMENT SYSTEM FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 (in thousands) General Employees' Retirement Plan Corrections Officers' Retirement Plan General Employees' Retirement Plan Corrections Officers' Retirement Plan General Employees' Retirement Plan Corrections Officers' Retirement Plan Total pension liability Service cost* 39,960 $ 7,675 $ 39,905 $ 7,359 $ 41,477 $ 7,975 $ Interest* 222,362 30,633 219,284 29,931 215,034 28,318 Changes of benefit terms - - - - 17,317 - Differences between expected and actual experience 12,192 9,965 33,435 5,491 (7,275) 719 Changes of assumptions 36,145 6,109 4,913 (7,304) 80,635 17,045 Benefit payents, including refunds of contributions (207,269) (20,323) (207,904) (18,506) (191,229) (19,819) Net change in total pension liability 103,390 $ 34,059 $ 89,633 $ 16,971 $ 155,959 $ 34,238 $ Total pension liability - beginning balance 3,286,314 446,447 3,196,681 429,474 3,040,721 395,236 Total pension liability - ending balance (a) 3,389,704 $ 480,506 $ 3,286,314 $ 446,447 $ 3,196,680 $ 429,474 $ Plan fiduciary net position Contributions - employer 72,194 $ 15,058 $ 70,338 $ 14,498 $ 71,024 $ 13,973 $ Contributions - employee 26,014 3,401 28,334 3,225 29,919 3,151 Net investment income 125,958 9,840 14,789 3,496 145,470 19,269 Benefit payments including refunds of contributions (207,269) (20,323) (207,904) (18,506) (191,229) (19,819) Administrative expense (1,084) (153) (967) (158) (1,193) (128) Other - - - - 11,397 - Net change in plan fiduciary net position 15,813 $ 7,823 $ (95,410) $ 2,555 $ 65,388 $ 16,446 $ Plan fiduciary net position - beginning balance 1,989,646 232,024 2,085,056 229,469 2,019,668 213,023 Plan fiduciary net position - ending balance (b) 2,005,459 $ 239,847 $ 1,989,646 $ 232,024 $ 2,085,056 $ 229,469 $ Net pension liability - ending balance (a) - (b) 1,384,245 $ 240,659 $ 1,296,668 $ 214,423 $ 1,111,624 $ 200,005 $ Plan fiduciary net position as a % of total pension liability 59.16% 49.92% 60.54% 51.97% 65.23% 53.43% Covered payroll (in thousands) 246,387 $ 28,268 $ 249,983 $ 28,726 $ 253,982 $ 28,164 $ Net pension liability as % of covered payroll 561.82% 851.35% 518.70% 746.44% 437.68% 710.14% Notes to Schedule: Change of Assumptions: 2018 2019 2020 tables used in the July 1, 2019 FRS actuarial valuation for special risk personnel. The set forward used to adjust for the plan’s experience was changed for healthy pre- and post-retirement lives was changed from As of September 30, 2020 the assumed investment return was lowered from 6.90% to 6.80%. As of September 30, 2019 the assumed investment return was lowered from 7.00% to 6.90%. As of September 30, 2019 the mortality assumptions were changed from being based on the FRS mortality tables used in the July 1, 2018 FRS actuarial valuation for the special risk personnel to the FRS mortality 2.5 years to 2.0 years with the adoption of the new base table. The mortality improvement scale was changed from scale BB to scale MP2018 in conjunction with this change. 170 -- 201 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY – LAST 10 FISCAL YEARS CITY OF JACKSONVILLE RETIREMENT SYSTEM FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 (continued) (in thousands) General Employees' Retirement Plan Corrections Officers' Retirement Plan General Employees' Retirement Plan Corrections Officers' Retirement Plan General Employees' Retirement Plan Corrections Officers' Retirement Plan Total pension liability Service cost* 37,697 $ 7,330 $ 36,759 $ 7,091 $ 40,238 $ 7,261 $ Interest* 210,509 27,284 199,659 25,391 194,312 23,652 Changes of benefit terms 1,149 74 - - - - Differences between expected and actual experience 16,294 (2,054) 60,437 (1,418) (4,785) 1,699 Changes of assumptions 64,390 9,950 72,969 16,320 (18,044) (1,243) Benefit payents, including refunds of contributions (192,662) (17,438) (183,692) (17,487) (170,674) (13,081) Net change in total pension liability 137,377 $ 25,146 $ 186,132 $ 29,897 $ 41,047 $ 18,288 $ Total pension liability - beginning balance 2,903,344 370,090 2,717,212 340,194 2,676,164 321,906 Total pension liability - ending balance (a) 3,040,721 $ 395,236 $ 2,903,344 $ 370,091 $ 2,717,211 $ 340,194 $ Plan fiduciary net position Contributions - employer 94,700 $ 19,162 $ 84,898 $ 18,864 $ 81,751 $ 17,832 $ Contributions - employee 23,037 2,500 21,840 2,410 20,893 2,466 Net investment income 266,138 26,747 167,067 11,548 (39,506) (3,849) Benefit payments including refunds of contributions (192,662) (17,438) (183,692) (17,486) (170,674) (13,081) Administrative expense (787) (75) (762) (75) (762) (73) Other - - - - - - Net change in plan fiduciary net position 190,426 $ 30,896 $ 89,351 $ 15,261 $ (108,298) $ 3,295 $ Plan fiduciary net position - beginning balance 1,829,242 182,127 1,739,891 166,866 1,848,189 163,571 Plan fiduciary net position - ending balance (b) 2,019,668 $ 213,023 $ 1,829,242 $ 182,127 $ 1,739,891 $ 166,866 $ Net pension liability - ending balance (a) - (b) 1,021,053 $ 182,213 $ 1,074,102 $ 187,964 $ 977,320 $ 173,328 $ Plan fiduciary net position as a % of total pension liability 66.42% 53.90% 63.00% 49.21% 64.03% 49.05% Covered payroll (in thousands) 257,850 $ 26,585 $ 255,717 $ 28,091 $ 254,035 $ 27,374 $ Net pension liability as % of covered payroll 395.99% 685.40% 420.04% 669.13% 384.72% 633.18% Notes to Schedule: Change of Assumptions: October 1, 2017. For accounting purposes, this change is reflected on September 30, 2017. The plan was closed to new entrants as of October 1, 2017. There was no immediate impact on the total pension liability. tables used in the July 1, 2019 FRS actuarial valuation for Assumption changes The employee contribution rate increased from 7.7% to 9.7% of pay effective Notes to Schedule: As of September 30, 2019 the assumed investment return was As of September 30, 2019 the mortality assumptions were tables used in the July 1, 2018 FRS actuarial valuation for the 2015 2016 2017 171 -- 202 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY – LAST 10 FISCAL YEARS CITY OF JACKSONVILLE RETIREMENT SYSTEM FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 (continued) (in thousands) General Employees' Retirement Plan Corrections Officers' Retirement Plan General Employees' Retirement Plan Corrections Officers' Retirement Plan Total pension liability Service cost* 36,950 $ 6,680 $ 39,627 $ 6,904 $ Interest* 189,064 21,997 183,151 20,476 Changes of benefit terms - - - - Differences between expected and actual experience (5,356) 5,963 22,318 5,777 Changes of assumptions 101,525 10,765 - - Benefit payents, including refunds of contributions (171,127) (14,676) (166,460) (12,369) Net change in total pension liability 151,056 $ 30,729 $ 78,636 $ 20,788 $ Total pension liability - beginning balance 2,525,107 291,177 2,446,471 270,389 Total pension liability - ending balance (a) 2,676,163 $ 321,906 $ 2,525,107 $ 291,177 $ Plan fiduciary net position Contributions - employer 71,000 $ 13,522 $ 55,386 $ 10,742 $ Contributions - employee 20,961 2,253 21,878 2,525 Net investment income 194,864 15,468 264,541 18,466 Benefit payments including refunds of contributions (171,127) (14,677) (166,460) (12,369) Administrative expense (828) (65) (671) (50) Other - - - 392 Net change in plan fiduciary net position 114,870 $ 16,501 $ 174,674 $ 19,706 $ Plan fiduciary net position - beginning balance 1,733,319 147,070 1,558,645 127,364 Plan fiduciary net position - ending balance (b) 1,848,189 $ 163,571 $ 1,733,319 $ 147,070 $ Net pension liability - ending balance (a) - (b) 827,974 $ 158,335 $ 791,788 $ 144,107 $ Plan fiduciary net position as a % of total pension liability 69.06% 50.81% 68.64% 50.51% Covered payroll (in thousands) 262,369 $ 27,871 $ 265,405 $ 28,944 $ Net pension liability as % of covered payroll 315.58% 578.42% 298.33% 497.88% Prior years data is unavailable 2013 2014 172 -- 203 of 389 -- DRAFT (This page is intentionally left blank.) 173 -- 204 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY - LAST 10 FISCAL YEARS FLORIDA RETIREMENT SYSTEM & JACKSONVILLE BEACH FIREFIGHTERS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 (in thousands) Florida Retirement System FRS Health Insurance Supplement Jacksonville Beach Firefighters Florida Retirement System Health Insurance Supplement Jacksonville Beach Firefighters Total pension liability Service cost* 438 $ 17 $ 346 $ 556 $ 17 $ 378 $ Interest* 2,267 16 1,320 2,826 25 1,277 Changes of benefit terms - - - - - - Differences between expected and actual experience 58 - (63) 94 28 92 Changes of assumptions - 5 - 365 30 1,161 Change in Porportionate Share - - - - - - Benefit payents, including refunds of contributions (1,981) (30) (1,149) (2,393) (32) (968) Net change in total pension liability 782 $ 8 $ 454 $ 1,448 $ 68 $ 1,940 $ Total pension liability - beginning balance 33,867 742 19,262 41,580 722 17,322 Total pension liability - ending balance (a) 34,649 $ 750 $ 19,716 $ 43,028 $ 790 $ 19,262 $ Plan fiduciary net position Contributions - employer 630 $ 35 $ 1,101 $ 698 $ 36 $ 658 $ Contributions - employee 125 - 146 157 - 178 Net investment income 7,926 - 1,372 1,121 - 743 Benefit payments including refunds of contributions (1,981) (30) (1,149) (2,393) (32) (967) Administrative expense (4) - (80) (5) - (70) Other - - - - - - Net change in plan fiduciary net position 6,696 $ 5 $ 1,390 $ (422) $ 4 $ 542 $ Plan fiduciary net position - beginning balance 26,704 22 13,886 34,348 19 13,344 Plan fiduciary net position - ending balance (b) 33,400 $ 27 $ 15,276 $ 33,926 $ 23 $ 13,886 $ Net pension liability - ending balance (a) - (b) 1,249 $ 723 $ 4,440 $ 9,102 $ 767 $ 5,376 $ Plan fiduciary net position as a % of total pension liability 96.40% 3.60% 77.48% 78.85% 2.91% 72.09% Covered payroll (in thousands) 1,473 $ 1,473 $ 1,832 $ 2,065 $ 2,065 $ 2,244 $ Net pension liability as % of covered payroll 84.78% 49.07% 242.33% 440.77% 37.13% 239.52% Additional years will be added to this schedule annually until 10 years of data are presented. FLORIDA RETIREMENT SYSTEM JACKSONVILLE BEACH FIREFIGHTERS from 7.5% to 7.0% Assumption changes for the 9/30/19 measurement date include lowering the investment rate of return The total pension liability for each cost-sharing defined benefit plan was determined using the individual entry age actuarial cost method. Inflation increases for both plans is assumed at 2.40%. Payroll growth, including inflation, for both plans is assumed at 3.25%. Both the discount rate and the long-term expected rate of return used for FRS Pension Plan investments is 6.80%. Notes to Schedules: 2021 2020 174 -- 205 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY - LAST 10 FISCAL YEARS FLORIDA RETIREMENT SYSTEM & JACKSONVILLE BEACH FIREFIGHTERS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 (in thousands) Florida Retirement System Health Insurance Supplement Jacksonville Beach Firefighters Florida Retirement System Jacksonville Beach Firefighters Total pension liability Service cost* 575 $ 16 $ 306 $ 666 $ 302 $ Interest* 3,005 30 1,207 3,453 1,097 Changes of benefit terms 3 - - - - Differences between expected and actual experience 56 - 189 162 216 Changes of assumptions 361 36 879 564 717 Change in Porportionate Share - - - (240) - Benefit payents, including refunds of contributions (2,475) (35) (774) (2,803) (750) Net change in total pension liability 1,525 $ 47 $ 1,807 $ 1,802 $ 1,582 $ Total pension liability - beginning balance 43,576 764 15,515 51,141 13,932 Total pension liability - ending balance (a) 45,101 $ 811 $ 17,322 $ 52,943 $ 15,514 $ Plan fiduciary net position Contributions - employer 706 $ 39 $ 608 $ 802 $ 501 $ Contributions - employee 171 - 161 199 169 Net investment income 2,143 - 1,112 3,718 1,322 Benefit payments including refunds of contributions (2,475) (35) (774) (2,803) (750) Administrative expense (4) - (75) (5) (71) Other - - - - - Net change in plan fiduciary net position 541 $ 4 $ 1,032 $ 1,911 $ 1,171 $ Plan fiduciary net position - beginning balance 36,715 16 12,312 42,170 11,141 Plan fiduciary net position - ending balance (b) 37,256 $ 20 $ 13,344 $ 44,081 $ 12,312 $ Net pension liability - ending balance (a) - (b) 7,845 $ 791 $ 3,978 $ 8,862 $ 3,202 $ Plan fiduciary net position as a % of total pension liability 82.61% 2.47% 77.03% 83.26% 79.36% Covered payroll (in thousands) 1,897 $ 1,897 $ 2,230 $ 2,043 $ 2,123 $ Net pension liability as % of covered payroll 413.55% 41.69% 195.97% 433.77% 150.82% 2018 2019 Assumption changes for the 9/30/19 measurement date include lowering the investment rate of return from 7.5% to 7.0% JACKSONVILLE BEACH FIREFIGHTERS investment return from 7.9% to 7.5%. A Assumption changes for the 9/30/18 measurement date include lowering the Notes to Schedules: An additional year will be added to this schedule annually until 10 years of data are presented. FLORIDA RETIREMENT SYSTEM The total pension liability for each cost-sharing defined benefit plan was determined using the individual entry age actuarial cost method. Inflation increases for both plans is assumed at 2.40%. Payroll growth, including inflation, for both plans is assumed at 3.25%. Both the discount rate and the long-term expected rate of return 175 -- 206 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY - LAST 10 FISCAL YEARS FLORIDA RETIREMENT SYSTEM & JACKSONVILLE BEACH FIREFIGHTERS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 (in thousands) 2015 Florida Retirement System Jacksonville Beach Firefighters Florida Retirement System Jacksonville Beach Firefighters Florida Retirement System Total pension liability Service cost* 592 $ 282 $ 592 $ 246 $ 629 $ Interest* 3,444 994 3,444 952 3,483 Changes of benefit terms 25 - 25 - 9 Differences between expected and actual experience 386 33 386 - 245 Changes of assumptions 2,758 812 2,758 117 369 Change in Porportionate Share (6,329) - (6,329) - (533) Benefit payents, including refunds of contributions (2,736) (933) (2,736) (684) (3,070) Net change in total pension liability (1,860) $ 1,188 $ (1,860) $ 631 $ 1,132 $ Total pension liability - beginning balance 53,001 12,745 53,001 12,114 51,869 Total pension liability - ending balance (a) 51,141 $ 13,933 $ 51,141 $ 12,745 $ 53,001 $ Plan fiduciary net position Contributions - employer 756 $ 422 $ 756 $ 390 $ 737 $ Contributions - employee 204 161 204 147 203 Net investment income 5,145 855 5,145 (34) 140 Benefit payments including refunds of contributions (2,736) (933) (2,736) (684) (3,070) Administrative expense (5) (63) (5) (66) (5) Other - - - - - Net change in plan fiduciary net position 3,364 $ 442 $ 3,364 $ (247) $ (1,995) $ Plan fiduciary net position - beginning balance 38,807 10,700 38,807 10,946 46,853 Plan fiduciary net position - ending balance (b) 42,171 $ 11,142 $ 42,171 $ 10,699 $ 44,858 $ Net pension liability - ending balance (a) - (b) 8,970 $ 2,791 $ 8,970 $ 2,046 $ 8,143 $ Plan fiduciary net position as a % of total pension liability 82.46% 79.97% 82.46% 83.95% 84.64% Covered payroll (in thousands) 2,048 $ 2,019 $ 2,072 $ 1,848 $ 2,175 $ Net pension liability as % of covered payroll 437.99% 138.20% 432.92% 110.64% 374.39% JACKSONVILLE BEACH FIREFIGHTERS 2017 2016 A s Notes to Schedules: An additional year will be added to this schedule annually until 10 years of data are presented. Assumption changes for the 9/30/17 measurement date include lowering the benefit formula, changes in the COLA, and changes in what is considered pensionable Assumption changes for the 9/30/16 measurement date include adding a 3% load on the present value of future benefits as a margin for future mortality improvements. A N A n FL T p FLORIDA RETIREMENT SYSTEM The total pension liability for each cost-sharing defined benefit plan was determined using the individual entry age actuarial cost method. Inflation increases for both plans is assumed at 2.40%. Payroll growth, including inflation, for both plans is assumed at 3.25%. Both the discount rate and the long-term expected rate of return 176 -- 207 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION SCHEDULE OF MONEY-WEIGHTED RATE OF RETURN – LAST 10 FISCAL YEARS CITY OF JACKSONVILLE RETIREMENT SYSTEM FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 (net of investment expense) Fiscal Year Ended City of Jacksonville September 30 Retirement System 2021 21.32% 2020 6.02% 2019 0.88% 2018 7.44% 2017 14.71% 2016 9.45% 2015 -2.15% 2014 11.52% 2013 17.06% *Prior Years data unavailable 177 -- 208 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION NOTES TO REQUIRED SUPPLEMENTARY INFORMATION CITY OF JACKSONVILLE RETIREMENT SYSTEM FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 NOTES TO REQUIRED SUPPLEMENTARY INFORMATION GENERAL EMPLOYEES RETIREMENT PLAN Valuation date October 1, 2020 Methods and used assumptions to determine contribution rates: Actuarial cost method Entry Age Normal Cost Method Amortization method Level percent of payroll, using 1.5% annual increases Remaining amortization period All new bases amortized over 27 years, will be further reduced by one year each successive year. Asset valuation method Fair value of assets less unrecognized returns in each of the last five years. Unrecognized return is equal to the difference between the actual market return and the expected return on the fair value, and is recognized over a five-year period, further adjusted, if necessary, to be within 20% of the fair value. Actuarial assumptions: Investment rate of return 6.80%, including inflation, net of pension plan investment expense Inflation rate 2.50% Projected salary increases 1.50% used for unfunded liability amounts based on a Florida Statutes requirement that the assumption may not exceed average annual growth for the preceding ten years; 2.50% is the Plan’s long-term payroll inflation assumption. Cost-of-living adjustments The Plan provisions contain a 3.00% COLA. Mortality: Pre-retirement FRS pre-retirement mortality tables for personnel other than special risk and K-12 instructional personnel, set forward 2 years, projected generationally from 2010 with Scale MP2018 Healthy annuitants FRS healthy post-retirement mortality tables for personnel other than special risk and K-12 instructional personnel, set forward 2 years, projected generationally from 2010 with Scale MP2018. Disabled annuitants FRS disabled mortality tables for personnel other than special risk, with no set forward, projected generationally from 2010 with Scale MP2018. The FRS tables for personnel other than special risk and K-12 instructional personnel, set forward 2 years, reasonably reflect the healthy annuitant mortality experience of the General Employees Retirement Plan as of the measurement date. The FRS disabled mortality tables for personnel other than special risk reasonably reflect the disabled annuitant mortality experience as of the measurement date. 178 -- 209 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION NOTES TO REQUIRED SUPPLEMENTARY INFORMATION CITY OF JACKSONVILLE RETIREMENT SYSTEM FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 NOTES TO REQUIRED SUPPLEMENTARY INFORMATION CORRECTIONS OFFICERS RETIREMENT PLAN Valuation date October 1, 2020 Methods and used assumptions to determine contribution rates: Actuarial cost method Entry Age Normal Cost Method Amortization method Level percent of payroll, using 1.25% annual increases Remaining amortization period All new bases amortized over 26 years, will be further reduced by one year each successive year Asset valuation method Fair value of assets less unrecognized returns in each of the last five years. Unrecognized return is equal to the difference between the actual market return and the expected return on the fair value, and is recognized over a five-year period, further adjusted, if necessary, to be within 20% of the fair value. Actuarial assumptions: Investment rate of return 6.80%, including inflation, net of pension plan investment expense Inflation rate 2.50% Projected salary increases 1.25% used for unfunded liability amounts based on a Florida Statutes requirement that the assumption may not exceed average annual growth for the preceding ten years; 2.50% is the Plan’s long-term payroll inflation assumption. Cost-of-living adjustments The Plan provisions contain a 3.00% COLA. Mortality: Pre-Retirement FRS pre-retirement mortality tables for special risk personnel, set forward 2 years, projected generationally from 2010 with Scale MP2018 Healthy annuitants FRS healthy post-retirement mortality tables for special risk personnel, set forward 2 years, projected generationally from 2010 with Scale MP2018. Disabled annuitants FRS disabled mortality tables for personnel other than special risk, with no set forward, projected generationally from 2010 with Scale MP2018. The FRS tables for special risk personnel, set forward 2 years, reasonably reflect the healthy annuitant mortality experience of the General Employees Retirement Plan as of the measurement date. The FRS disabled mortality tables for special risk personnel reasonably reflect the disabled annuitant mortality experience as of the measurement date. 179 -- 210 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION SCHEDULE OF THE CITY’S PROPORTIONATE SHARE NET PENSION LIABILITY – LAST 10 FISCAL YEARS CITY OF JACKSONVILLE RETIREMENT SYSTEM FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 (in thousands) Fiscal Year City's Proportional Share Percentage City's Proportion of Net Pension Liability City's Covered Payroll Citys Net Pension Liability as Percentage of Covered Employee Payroll Plan Fiduciary Net Position as a % of Total Pension Liability 2021 45.27% 626,624 108,965 575.07% 59.16% 2020 49.23% 638,350 110,781 576.23% 60.54% 2019 47.35% 526,354 113,773 462.64% 65.23% 2018 46.37% 473,462 118,506 399.53% 63.71% 2017 47.61% 511,380 118,973 429.83% 63.00% 2016 48.78% 476,737 121,601 392.05% 64.03% 2015 49.72% 411,669 128,869 319.45% 69.06% 2014 49.72% 393,677 129,951 302.94% 68.64% FLORIDA STATE RETIREMENT SYSTEM FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 (in thousands) PENSION PLAN Fiscal Year City's Proportional Share Percentage City's Proportion of Net Pension Liability City's Covered Payroll Citys Net Pension Liability as Percentage of Covered Payroll Plan Fiduciary Net Position as a % of Total Pension Liability 2021 0.017% 1,248 1,473 84.73% 83.44% 2020 0.021% 9,101 2,065 440.73% 78.85% 2019 0.023% 7,844 1,897 413.49% 82.61% 2018 0.027% 8,023 2,043 392.71% 84.26% 2017 0.027% 8,097 2,048 395.36% 83.89% 2016 0.029% 7,197 2,072 347.35% 84.88% 2015 0.032% 4,076 2,175 187.40% 92.00% HEALTH INSURANCE SUBSIDY Fiscal Year City's Proportional Share Percentage City's Proportion of Net Pension Liability City's Covered Payroll Citys Net Pension Liability as Percentage of Covered Payroll Plan Fiduciary Net Position as a % of Total Pension Liability 2021 0.006% 723 1,473 49.08% 3.56% 2020 0.006% 767 2,065 37.14% 3.00% 2019 0.007% 790 1,897 41.64% 2.63% 2018 0.008% 842 2,043 41.21% 2.15% 2017 0.008% 876 2,048 42.77% 1.64% 2016 0.008% 947 2,072 45.70% 0.97% 2015 0.009% 939 2,175 43.17% 0.50% Prior year information is unavailable Prior year information is unavailable Prior year information is unavailable 180 -- 211 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION SCHEDULE OF EMPLOYER CONTRIBUTIONS – FOR LAST 10 FISCAL YEARS POLICE AND FIRE RETIREMENT SYSTEM FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 (in thousands) Actuarially required City contribution Contribution in relation to the actuarially determined contribution Contribution deficiency (excess) * Covered payroll Contribution as a percentage of covered payroll 2021 148,476 148,477 - 161,836 91.74% 2020 140,293 140,293 - 174,186 84.54% 2019 135,264 135,264 - 174,125 77.68% 2018 135,648 135,691 (43) 162,004 83.76% 2017 165,772 177,788 (12,016) 149,490 118.93% 2016 154,540 154,540 - 135,600 113.97% 2015 153,604 153,936 (332) 132,735 115.97% 2014 142,433 149,159 (6,726) 134,521 110.88% 2013 99,997 122,580 (22,583) 130,972 93.59% 2012 73,729 70,599 3,130 133,611 52.84% Methods used to determine contribution rates: Actuarial Cost Method: Amortization method: Remaining amortization period: Asset valuation method: 5-year smoothed market Inflation: Salary increases: Investment rate of return: Retirement Age: Mortality : A range of 2.75% to 11.50% depending on complete years of service, including inflation. 6.90% Experience-based table of rates that are specific to the type of eligibility condition. Entry Age Normal Cost Level Percent of Payroll, Closed 27 Years 2.5% MortalityPUB-2010 Headcount Weighted Safety Healthy Employee Mortality Table (for pre-retirement mortality) and the PUB-2010 Headcount Weighted Safety Healthy Retiree Mortality Table (for post-retirement mortality), with separate rates for males and females and ages set forward one year, with mortality improvements projected to all future years after 2010 using Scale MP-2018. For males, the base mortality rates for both pre- retirement and post-retirement mortality are based on the Below Median Healthy tables. These are the same rates currently in use for Special Risk Class members of the Florida Valuation date: October 1, 2020 * Contribution deficiency (excess) is assigned to the City Budget Stabilization Account FYE 181 -- 212 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION SCHEDULE OF CONTRIBUTIONS FROM EMPLOYER – FOR LAST 10 FISCAL YEARS POLICE AND FIRE PENSION FUND – SENIOR STAFF VOLUNTARY RETIREMENT PLAN FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 (in thousands) Plan Year Annual Contribution Covered Contribution Ending Required City Employer Deficiency/ employee as a % of September 30 Contribution Contributions (excess)* payroll covered payroll 2021* - - - - N/A 2020* - - - - N/A 2019* - - - - N/A 2018* - - - - N/A 2017* - - - - N/A 2016* - - - - N/A 2015 - - - 307 0.00% 2014 28 7 21 298 2.41% 2013 28 248 (220) 290 85.59% 2012 523 117 406 355 33.09% * No contribution amount was required because the Plan has no active employees since FY 2016 NOTES: Valuation date: Actuarially determined contribution rates are calculated as of October 1, each year Actuarial cost method: Individual entry age Amortization method: Aggregate method Asset valuation method: Market Value Inflation: 2.5% Investment rate of return: 7.0%, including inflation Cost of living adjustments: 3.00% Mortality Table in use: prior to the end of the fiscal year in which contributions are reported. Methods used to determine contribution rates: 50% RP2000 White Collar Annuitant and 50% RP2000 Blue Collar Annuitant, set forward 2.5 years, projected generationally with Scale BB for males; RP2000 White Collar Annuitant, set forward 2.5 years, projected generationally with Scale BB for females 182 -- 213 of 389 -- DRAFT (This page is intentionally left blank.) 183 -- 214 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY – LAST 10 FISCAL YEARS POLICE AND FIRE RETIREMENT SYSTEM FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 (in thousands) Total pension liability 2020 2019 2018 2017 Service Cost (BOY) $70,110 $65,148 $60,154 $45,257 Interest on total pension liability 280,848 269,658 259,434 233,338 Changes in Benefit Terms 2,706 - - 26,818 Experience deviations including buybacks 2,733 8,465 8,132 24,031 Changes of assumptions 56,025 - - 232,927 Benefit payments, including refunds of member contributions (193,115) (189,126) (184,257) (171,277) Net change in total pension liability 219,307 154,145 143,464 391,094 Total pension liability -- beginning 4,034,218 3,880,073 3,736,609 3,345,515 Total pension liability -- ending(a) 4,253,525 4,034,218 3,880,073 3,736,609 Fiduciary net position Contributions--employer Contributions--employer 123,328 110,528 115,691 184,526 Contributions--member 19,035 17,746 16,637 13,571 Net investment income 159,760 54,259 156,443 243,422 Benefit payments, including refunds of member contributions (193,114) (189,126) (184,257) (171,277) Administrative expense (2,185) (2,117) (2,138) (2,174) Distribution from Reserve Accounts (25,171) (55,731) - - Chapter 175/185 13,887 12,756 11,791 10,875 Court Fines 519 702 776 759 Other 673 1,228 82 51 Net change in fiduciary net position 96,732 (49,755) 115,025 279,753 Fiduciary net position -- beginning 1,958,067 2,007,822 1,892,797 1,613,044 Fiduciary net position -- ending 2,054,799 1,958,067 2,007,822 1,892,797 less Reserve Accounts and Sr. Staff Assets (34,734,725) (59,262) (126,819) (127,638) Total fiduciary net position -- ending(b) 2,020,065 1,898,805 1,881,003 1,765,159 City's fiduciary net pension liability--ending(a)-(b) 2,233,460 2,135,413 1,999,070 1,971,450 Fiduciary net position as a percentage of the total pension liability 47.49% 47.07% 48.48% 47.24% Covered payroll $174,186 $174,125 $162,004 $149,490 City's fiduciary net pension liability as a percentage of covered- employee payroll 1282.23% 1226.37% 1233.97% 1318.78% 184 -- 215 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY – LAST 10 FISCAL YEARS POLICE AND FIRE RETIREMENT SYSTEM FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 (in thousands) 2016 2015 2014 2013 2012* $44,087 $46,663 $47,915 $46,109 $47,570 217,546 210,943 203,577 195,520 190,344 - (28,685) - - - 3,566 24,831 22,671 (4,676) (12,513) 97,813 24,514 - 5,333 227,333 (159,726) (148,628) (138,179) (128,656) (116,955) 203,286 129,638 135,984 113,630 335,779 3,142,229 3,012,590 2,876,606 2,762,977 2,427,198 3,345,515 3,142,228 $3,012,590 $2,876,606 $2,762,977 157,494 154,665 150,520 121,822 72,643 12,831 12,062 11,584 10,754 11,611 154,313 (62,884) 147,333 169,202 181,653 (159,726) (148,628) (138,179) (128,656) (116,955) (3,519) (2,228) (2,224) (2,506) (2,352) - - - - - 10,681 10,578 10,110 9,667 9,276 833 921 881 758 770 122 327 142 1,187 55 173,029 (35,187) 180,167 182,229 156,702 1,437,777 - 1,292,930 1,110,737 954,036 1,613,044 (35,187) 1,473,097 1,292,966 1,110,737 (99,646) (83,502) (83,349) (64,835) (31,831) 1,513,398 (118,689) 1,389,748 1,228,131 1,078,907 1,832,117 3,260,917 1,622,842 1,648,475 1,684,070 45.24% -3.78% 46.13% 42.69% 39.05% $135,600 $132,735 $134,521 $130,972 $133,611 1351.12% 2456.71% 1206.38% 1258.65% 1260.42% 185 -- 216 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY – LAST 10 FISCAL YEARS POLICE AND FIRE PENSION FUND - SENIOR STAFF VOLUNTARY RETIREMENT PLAN FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 (in thousands) Total pension liability 2021 2020 2019 Service Cost (BOY) - $ - $ - $ Interest on total pension liability 304 205 208 Changes in Benefit Terms - 1,517 - Experience deviations including buybacks 120 143 - Changes of assumptions 112 272 - Benefit payments, including refunds of member contributions (375) (614) (258) Net change in total pension liability 161 1,523 (50) Total pension liability -- beginning 4,587 3,064 3,113 Total pension liability -- ending(a) 4,748 4,587 3,063 Fiduciary net position Contributions--employer Contributions--employer - - - Contributions--member - - - Net investment income 903 331 129 Benefit payments, including refunds of member contributions (375) (614) (258) Other Net change in fiduciary net position 528 (283) (129) Fiduciary net position -- beginning 4,077 4,360 4,489 Fiduciary net position -- ending (b) 4,606 4,077 4,360 Net Pension Libility -- ending (a) - (b) 142 510 (1,297) Fiduciary net position as a percentage of the total pension liability 88.89% 142.32% Covered-employee payroll $ - $ - $ - City's fiduciary net pension liability as a percentage of covered- employee payroll N/A N/A N/A 186 -- 217 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY – LAST 10 FISCAL YEARS POLICE AND FIRE PENSION FUND - SENIOR STAFF VOLUNTARY RETIREMENT PLAN FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 (in thousands) Total pension liability 2018 2016 2015 Service Cost (BOY) - $ - $ (57) $ Interest on total pension liability 209 298 282 Changes in Benefit Terms - 89 - Experience deviations including buybacks 39 27 - Changes of assumptions - 149 154 Benefit payments, including refunds of member contributions (257) (286) (109) Net change in total pension liability (9) 278 270 Total pension liability -- beginning 3,122 4,406 4,136 Total pension liability -- ending(a) 3,113 4,684 4,406 Fiduciary net position Contributions--employer Contributions--employer - - - Contributions--member - - 22 Net investment income 342 386 (167) Benefit payments, including refunds of member contributions (257) (286) (109) Other - - - Net change in fiduciary net position 85 100 (254) Fiduciary net position -- beginning 4,405 4,002 4,257 Fiduciary net position -- ending (b) 4,489 4,102 4,002 Net Pension Libility -- ending (a) - (b) (1,376) 582 404 Fiduciary net position as a percentage of the total pension liability 144.20% 87.57% 90.83% Covered-employee payroll $ - $ - $ - City's fiduciary net pension liability as a percentage of covered- employee payroll N/A N/A N/A 187 -- 218 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION SCHEDULE OF MONEY-WEIGHTED RATE OF RETURN – LAST 10 FISCAL YEARS POLICE AND FIRE RETIREMENT SYSTEM FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 (net of investment expense) Fiscal Year Ended Police and Fire September 30 Retirement System 2021 23.15% 2020 7.98% 2019 2.96% 2018 10.00% 2017 14.27% 2016 10.00% 2015 -3.95% 2014 10.73% 2013 14.29% 2012 18.25% 188 -- 219 of 389 -- Contributions Actuarially in relation to Contribution Covered Contribution Determined the Determined Deficiency Employee as a percentage Fiscal Year Contribution Contribution or (Excess) Payroll of covered payroll 2017 $18,347,728 $5,231,223 $13,116,505 $366,392,949 3.6% 2018 $20,177,634 $6,060,000 $14,117,634 $379,216,702 1.6% 2019 $16,926,496 $5,588,925 $11,337,571 $446,587,932 1.3% 2020 $16,952,454 $3,629,110 $13,323,344 $200,775,000 1.8% 2021 $11,180,763 $2,207,089 $8,973,674 $153,166,800 1.4% CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION POST EMPLOYMENT BENEFITS OTHER THAN PENSION (OPEB) OTHER THAN POLICE & FIRE SCHEDULE OF CITY CONTRIBUTIONS – LAST FIVE FISCAL YEARS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 Other: This schedule is presented for the requirement to show information for 10 years. However, until a full 10-year trend is compiled, the City will present information for the years for which information is available. 189 -- 220 of 389 -- Contributions Actuarially in relation to Contribution Covered Contribution Determined the Determined Deficiency Employee as a percentage Fiscal Year Contribution Contribution or (Excess) Payroll of covered payroll 2020 $10,786,515 $2,611,660 $8,174,856 261,444,000 $ 1.0% 2021 $30,704,888 $6,250,523 $24,454,365 $433,771,559 1.4% CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION POST EMPLOYMENT BENEFITS OTHER THAN PENSION (OPEB) POLICE & FIRE SCHEDULE OF CITY CONTRIBUTIONS – LAST FIVE FISCAL YEARS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 Other: This schedule is presented for the requirement to show information for 10 years. However, until a full 10-year trend is compiled, the City will present information for the years for which information is available. 190 -- 221 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION POST EMPLOYMENT BENEFITS OTHER THAN PENSION (OPEB) OTHER THAN POLICE & FIRE SCHEDULE OF CHANGES IN THE CITY'S NET OPEB LIABILITY AND RELATED RATIOS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 FY2021 FY2020 FY2019 FY2018 FY2017 Total OPEB Liability Service cost 5,283,937 $ 1,999,915 $ 8,828,783 $ 11,293,019 $ 10,839,911 $ Interest 2,130,089 $ 2,192,473 $ 8,097,713 $ 8,884,615 $ 7,507,817 $ Changes of benefit terms - $ - $ - $ - $ - $ Differences between expected and actual experience (9,947,871) $ - $ (10,029,066) $ - $ - $ Changes in assumptions 1,500,025 $ 62,365,376 $ 41,622,149 $ (30,714,455) $ (7,431,307) $ Plan change (1/1/2020) - $ (201,346,437) $ Benefit payments (2,207,089) $ (3,629,110) $ (5,588,925) $ (6,060,000) $ (5,231,223) $ Net change in total OPEB liability (3,240,909) $ (138,417,783) $ 42,930,654 $ (16,596,821) $ 5,685,198 $ Total OPEB liability - beginning 92,203,743 $ 230,621,526 $ 187,690,872 $ 204,287,693 $ 198,602,495 $ Total OPEB liability - ending (a) 88,962,834 $ 92,203,743 $ 230,621,526 $ 187,690,872 $ 204,287,693 $ Plan fiduciary net position Contributions - employer 2,207,089 $ 3,629,110 $ 5,588,925 $ 6,060,000 $ 5,231,223 $ Net investment income - $ - $ - $ - $ - $ Benefit payments (2,207,089) $ (3,629,110) $ (5,588,925) $ (6,060,000) $ (5,231,223) $ Administrative expense Net change in plan fiduciary net position - $ - $ - $ - $ - $ Plan fiduciary net position - beginning - $ - $ - $ - $ - $ Plan fiduciary net position - ending (b) - $ - $ - $ - $ - $ City's net OPEB liability - ending (a) - (b) 88,962,834 $ 92,203,743 $ 230,621,526 $ 187,690,872 $ 204,287,693 $ Plan fiduciary net position as a percentage of the total OPEB liability 0.0% 0.0% 0.0% 0.0% 0.0% Covered payroll 153,166,800 $ 200,775,000 $ 446,587,932 $ 379,216,702 $ 366,392,949 $ City net OPEB liability as a percentage of covered employee payroll 58.1% 45.9% 51.6% 49.5% 55.8% Other: This schedule is presented for the requirement to show information for 10 years. However, until a full 10-year trend is compiled, the City will present information for the years for which information is available. Notes to Required Schedules: 1) The City does not accumulate assets in a trust to pay related benefits. 2) Significant changes in assumptions that affect trends in the amounts reported: a) The discount rate was updated from 2.21% to 2.26%. b) The retirement and termination rates were updated to the rates from the City of Jacksonville Correctional Officer Retirement System Valuation as of October 1, 2020, the City of Jacksonville General Employee Retirement Plan Valuation as of October 1, 2020, and the Florida Retirement System Actuarial Valuation as of July 1, 2020. c) Trend rates were reset to 7.0% (6.0% for Medicare and graded down by 0.25% until reaching an ultimate of 4.0% based on current Healthcre Analytics (HCA) consulting trend study; current economic environment suggests a longer period until reaching the ultimate rate. d) The mortality assumption was updated from Scale MP-2019 to MP-2020 to reflect the Society of Actuaries' recent mortality study. 191 -- 222 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION POST EMPLOYMENT BENEFITS OTHER THAN PENSION (OPEB) POLICE & FIRE SCHEDULE OF CHANGES IN THE CITY'S NET OPEB LIABILITY AND RELATED RATIOS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 FY2021 FY2020 Total OPEB Liability Service cost 15,844,688 $ 10,507,028 $ Interest 5,396,475 $ 4,191,742 $ Changes of benefit terms - $ - $ Differences between expected and actual experience 69,664,625 $ - $ Changes in assumptions 11,336,741 $ 18,031,436 $ Plan change (1/1/2020) 201,346,437 $ Benefit payments (6,250,523) $ (2,611,660) $ Net change in total OPEB liability 95,992,006 $ 231,464,984 $ Total OPEB liability - beginning 231,464,984 $ - $ Total OPEB liability - ending (a) 327,456,990 $ 231,464,984 $ Plan fiduciary net position Contributions - employer 6,250,523 $ 2,611,660 $ Net investment income - $ - $ Benefit payments (6,250,523) $ (2,611,660) $ Administrative expense - $ - $ Net change in plan fiduciary net position - $ - $ Plan fiduciary net position - beginning - $ - $ Plan fiduciary net position - ending (b) - $ - $ City's net OPEB liability - ending (a) - (b) 327,456,990 $ 231,464,984 $ Plan fiduciary net position as a percentage of the total OPEB liability 0.0% 0.0% Covered payroll 433,771,559 $ 261,444,000 $ City net OPEB liability as a percentage of covered employee payroll 75.5% 88.5% Other: This schedule is presented for the requirement to show information for 10 years. However, until a full 10-year trend is compiled, the City will present information for the years for which information is available. Notes to Required Schedules: 1) The City does not accumulate assets in a trust to pay related benefits. 2) Significant changes in assumptions that affect trends in the amounts reported: a) The discount rate was updated from 2.21% to 2.26%. b) The retirement and termination rates were updated to the rates from the City of Jacksonville Police and Fire Pension Fund Actuarial Valuation as of October 1, 2020. c) Trend rates were reset to 7.0% (6.0% for Medicare and graded down by 0.25% until reaching an ultimate of 4.0% based on current Healthcre Analytics (HCA) consulting trend study; current economic environment suggests a longer period until reaching the ultimate rate. d) The mortality assumption was updated from Scale MP-2019 to MP-2020 to reflect the Society of Actuaries' recent mortality study. 192 -- 223 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION NOTES TO REQUIRED SUPPLEMENTARY INFORMATION POST EMPLOYMENT BENEFITS OTHER THAN PENSION (OPEB) OTHER THAN POLICE & FIRE FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 Actuarial Assumptions and Methods: 1) Measurement Date: September 30, 2021. 2) Discount Rate: 2.21% (BOY), 2.26% (EOY) – Bond Buyer 20-Bond GO Index. 3) Salary Increase Rate: 3.5% per annum. 4) Valuation Date and Census Data Valuation date of October 1, 2021, based on the census provided by the City as of September 2021. 5) Marriage Rate The assumed number of eligible dependents is based on the current proportions of single and family contracts in the census provided. 6) Spouse Age Spouse dates of birth were provided by the City. Where this information is missing, male spouses are assumed to be three years older than female spouses. 7) Medicare Eligibility All current and future retirees are assumed to be eligible for Medicare at age 65. 8) Actuarial Cost Method Entry Age Normal based on level percentage of projected salary. 9) Amortization Method Experience/Assumptions gains and losses are amortized over a closed period of 10.3 years starting October 1, 2021, equal to the average remaining service of active and inactive plan members (who have no future service). 10) Plan Participation Percentage That 60% of future pre 65 retirees will participate in the pre-65 medical plan and 15% (30% for those hired prior to 1/1/1987) continue upon Medicare eligibility. This assumes that a one-time irrevocable election to participate is made at retirement. 11) Mortality Rates Pub-2010 generational table scaled using MP-20 and applied on a gender specific basis. 193 -- 224 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION NOTES TO REQUIRED SUPPLEMENTARY INFORMATION POST EMPLOYMENT BENEFITS OTHER THAN PENSION (OPEB) OTHER THAN POLICE & FIRE FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 Actuarial Assumptions and Methods: (continued) 12) Health Care Cost Trend Rate The health care cost trend assumptions are used to project the cost of health care in future years. The following annual trends are based on the HCA Consulting trend study and are applied on a select and ultimate basis. Select trends are reduced 0.25% each year until reaching the ultimate trend rate. Expense Type Select Ultimate Pre-Medicare Medical and Rx Benefits 7.0% 4.0% Medicare Benefits 6.0% 4.0% Stop Loss Fees 7.0% 4.0% Administrative Fees 4.0% 4.0% 13) Per Capita Health Care Cost Trend Rate Expected annual claim costs were developed using 24 months of historical claim experience through October 2021. Recent claims did not suggest adjustments for COVID-19 were necessary for future claims cost projections. The age 60 and age 70 claim costs are as follows: Rate Tier Age 60_ Age 70 (Medicare) (Non-Medicare) HMO 48 $ 14,328 $ 9,230 $ 18,808 HDHP 65 $ 8,024 $ 5,266 $ 10,533 PPO $ 16,033 $ 9,953 $ 21,046 Future Retirees $ 14,038 $ 8,978 $ 18,428 14) Non-Claim Expenses Non-claim expenses are based on the current amounts charged per retired employee as of 2021. The amounts are provided in the table below and are trended at the levels shown in the “Health Care Cost Trend Rate” table in (12) above. Rate Tier Age 60 Administrative Fee $27.67 Stop Loss Fee $ 9.16 15) Plan Election Percentage Future eligible retirees are assumed to elect coverage based on the following percentages: Rate Tier Age 60 HMO 48 70 % HDHP 65 10 % PPO 20 % 194 -- 225 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION NOTES TO REQUIRED SUPPLEMENTARY INFORMATION POST EMPLOYMENT BENEFITS OTHER THAN PENSION (OPEB) OTHER THAN POLICE & FIRE FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 Actuarial Assumptions and Methods: (continued) 16) Age Based Morbidity The assumed per capita health claim costs are adjusted to reflect expected increases related to age and gender. These increases are based on a 2013 Society of Actuaries study. 17) Termination and Retirement Age The rate of withdrawal for reasons other than death and retirement has been developed from the Florida Retirement System Actuarial Valuation as of July 1, 2020, City of Jacksonville Correctional Officer Retirement System Valuation as of October 1, 2020, and the City of Jacksonville General Employees Retirement Plan Valuation as of October 1, 2020. The annual termination probability is dependent on an employee’s age, gender, and years of service. 195 -- 226 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION NOTES TO REQUIRED SUPPLEMENTARY INFORMATION POST EMPLOYMENT BENEFITS OTHER THAN PENSION (OPEB) POLICE & FIRE FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 Actuarial Assumptions and Methods: 1) Measurement Date: September 30, 2021. 2) Discount Rate: 2.21% (BOY), 2.26% (EOY) – Bond Buyer 20-Bond GO Index. 3) Salary Increase Rate: 3.5% per annum. 4) Valuation Date and Census Data Valuation date of October 1, 2021, based on the census provided by the City as of September 2021. 5) Marriage Rate The assumed number of eligible dependents is based on the current proportions of single and family contracts in the census provided. 6) Spouse Age Spouse dates of birth were provided by the City. Where this information is missing, male spouses are assumed to be three years older than female spouses. 7) Medicare Eligibility All current and future retirees are assumed to be eligible for Medicare at age 65. 8) Actuarial Cost Method Entry Age Normal based on level percentage of projected salary. 9) Amortization Method Experience/Assumptions gains and losses are amortized over a closed period of 9.0 years starting October 1, 2021, equal to the average remaining service of active and inactive plan members (who have no future service). 10) Plan Participation Percentage That 60% of future pre 65 retirees will participate in the pre-65 medical plan and 15% (30% for those hired prior to 1/1/1987) continue upon Medicare eligibility. This assumes that a one-time irrevocable election to participate is made at retirement. 11) Mortality Rates Pub-2010 generational table scaled using MP-20 and applied on a gender specific basis. 196 -- 227 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION NOTES TO REQUIRED SUPPLEMENTARY INFORMATION POST EMPLOYMENT BENEFITS OTHER THAN PENSION (OPEB) POLICE & FIRE FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 Actuarial Assumptions and Methods: (continued) 12) Health Care Cost Trend Rate The health care cost trend assumptions are used to project the cost of health care in future years. The following annual trends are based on the HCA Consulting trend study and are applied on a select and ultimate basis. Select trends are reduced 0.25% each year until reaching the ultimate trend rate. Expense Type Select Ultimate Pre-Medicare Medical and Rx Benefits 7.0% 4.0% Medicare Benefits 6.0% 4.0% Stop Loss Fees 7.0% 4.0% Administrative Fees 4.0% 4.0% 13) Per Capita Health Care Cost Trend Rate Expected annual claim costs were developed using 24 months of historical claim experience through October 2021. Recent claims did not suggest adjustments for COVID-19 were necessary for future claims cost projections. The age 60 and age 70 claim costs are as follows: Rate Tier Age 60_ Age 70 (Medicare) (Non-Medicare) HMO 48 $ 14,328 $ 9,230 $ 18,808 HDHP 65 $ 8,024 $ 5,266 $ 10,533 PPO $ 16,033 $ 9,953 $ 21,046 Future Retirees $ 14,038 $ 8,978 $ 18,428 14) Non-Claim Expenses Non-claim expenses are based on the current amounts charged per retired employee as of 2019. The amounts are provided in the table below and are trended at the levels shown in the “Health Care Cost Trend Rate” table in (12) above. Rate Tier Age 60 Administrative Fee $27.67 Stop Loss Fee $ 9.16 15) Plan Election Percentage Future eligible retirees are assumed to elect coverage based on the following percentages: Rate Tier Age 60 HMO 48 70 % HDHP 65 10 % PPO 20 % 197 -- 228 of 389 -- CITY OF JACKSONVILLE, FLORIDA REQUIRED SUPPLEMENTAL INFORMATION NOTES TO REQUIRED SUPPLEMENTARY INFORMATION POST EMPLOYMENT BENEFITS OTHER THAN PENSION (OPEB) POLICE & FIRE FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 Actuarial Assumptions and Methods: (continued) 16) Age Based Morbidity The assumed per capita health claim costs are adjusted to reflect expected increases related to age and gender. These increases are based on a 2013 Society of Actuaries study. 17) Termination and Retirement Age The rate of withdrawal for reasons other than death and retirement has been developed from the City of Jacksonville Police & Fire Pension Fund Actuarial Valuation as of October 1, 2020. The annual termination probability is dependent on an employee’s age, gender, and years of service. 198 -- 229 of 389 -- DRAFT (This page is intentionally left blank.) 199 -- 230 of 389 -- NON-MAJOR GOVERNMENTAL FUNDS: SPECIAL REVENUE FUNDS Special Revenue Funds account for the proceeds of specific revenue sources (other than expendable trusts and major capital projects) that are legally restricted to expenditure for specific purposes as described below. The Concurrency Management Fund provides funding for maintenance and update of the Concurrency Management System which is the basis for ensuring compliance with the 2010 Comprehensive Plan. The Air Pollution Control and Monitoring Fund receives revenue from licenses and fees, and contributions from the federal government to monitor and control environmental problems related to the air quality in Jacksonville. Tourism Development Fund collects revenues from tourist and convention development taxes to fund tourism programs sponsored by the Tourist Development Council through the City. The Clerk of the Circuit Court Fund receives revenue collected on behalf of the state and City by the courts system for various judgments, fines, bonds, fees and licenses, and other miscellaneous amounts. The Fund includes Public Records Modernization activity which receives revenues from a service charge authorized by Florida Statute 28.24(15)(d) to be held in trust and used exclusively for equipment, personnel training, and technical assistance in modernizing the official public records system of the Clerk’s office. The Transportation Fund accounts for revenue from the City's six cent local option gas tax, the state-shared 5th and 6th cent gas tax, and the one-half cent local option sales tax used to fund major road and related capital infrastructure construction and maintenance and the City's mass transit and automated skyway express system operations. The Budgeted General Government Fund accounts for numerous smaller accounts whose revenues are dedicated to a variety of specific purposes. The Emergency 9-1-1 Fund receives revenues from a fee added to the telephone bill of telephone customers that may be used for system operations and improvements. The Tax Increment Districts Fund receives a distribution of ad valorem tax revenue levied and collected in the City's four tax increment districts used to promote future commercial business development that expands property tax base values in the City's core downtown areas and the northwest region. 200 -- 231 of 389 -- The Kids Hope Alliance receives City funds, and various grants, to provide a continuum of services for the City's children and youth. The Kids Hope Alliance is responsible for comprehensively developing, overseeing, managing and implementing the Essential Services Plan for Kids. The Community Development Block Grant Fund receives monies from the federal government in the form of community development block grants made available to specific targeted areas of Jacksonville to assist in rehabilitation and revitalization in support of the area's future economic growth and stability. The Job Training Partnership Act Grant Fund accounts for direct federal assistance to the Private Industry Council of Jacksonville in providing employment and training services to the economically disadvantaged and displaced citizens of Jacksonville through cooperative efforts with local private sector businesses. The Maintenance, Parks and Recreation Fund receives revenues from user fees and charges from parks and recreation facilities that are dedicated to parks maintenance and improvements, and acquisition of new recreational facilities. The Public Safety Fund funds specific public safety programs through user fees and intergovernmental revenue for emergency management planning and disaster medical services provided by the Office of the Sheriff and the City Department of Fire and Rescue. The Better Jacksonville Plan Trust Fund receives revenue from the half-cent infrastructure sales tax. All monies placed into this trust are appropriated for Debt Service requirements and contributions to the Better Jacksonville Capital Projects Fund. Housing and Neighborhoods was designated as the housing agency for Affordable Housing, State Housing Initiative Partnership funds, and all other matters related to housing, with the exception of those matters which fall within the responsibility of the Jacksonville Housing Authority. The State Housing Initiative Partnership Fund accounts for revenue collected by the Clerk of the Circuit Court on certain property transactions in Duval county passed from the State earmarked for housing assistance and financial incentive programs to increase the availability of affordable housing in Jacksonville including down payment assistance, home-owner repair and rehabilitation and acquisition of existing single family dwellings for home ownership. The Non-Budgeted General Government Fund accounts for numerous smaller funds whose revenues are dedicated to a variety of specific purposes. 201 -- 232 of 389 -- CAPITAL PROJECTS FUNDS Capital Projects Fund account for financial resources segregated for the construction or acquisition of major capital facilities (other than those financed by proprietary funds and fiduciary funds). Descriptions of individual funds in this fund type follow. The General Projects Fund receives monies appropriated from the General Fund and other sources including proceeds from non-bonded debt for general capital improvements. The Better Jacksonville Plan Construction Projects Fund receives revenues from the two local option sales tax programs and proceeds from the sale of bonded debt issued by the City to fund projects under the Better Jacksonville Plan. The Bond Projects Fund receives proceeds from the sale of bonded debt issued by the City to fund major capital improvement projects. The Grant Projects Fund accounts for monies received by the City under various federal, state and local grants restricted to expenditure of specific capital improvements funded under the grant program. The River City Renaissance Project Fund accounts for proceeds of a comprehensive capital improvement initiative (the "River City Renaissance") for projects concerning the environment, children, health and social services, economic development, neighborhoods and downtown, parks and recreation, and the arts. PERMANENT FUND The Permanent Fund is used to report resources that are legally restricted to the extent that only earnings, and not principal, may be used for purposes that benefit the government or its citizenry. The City accounts for its Cemetery Maintenance and Art in Public Places Funds as Permanent Funds. 202 -- 233 of 389 -- DRAFT (This page is intentionally left blank.) 203 -- 234 of 389 -- CITY OF JACKSONVILLE, FLORIDA COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2021 WITH COMPARATIVE TOTALS FOR 2020 (in thousands) AIR POLLUTION CLERK CONCURRENCY CONTROL AND TOURISM OF THE MANAGEMENT MONITORING DEVELOPMENT COURT ASSETS: Equity in pooled cash and investments $ 81,874 $ 1,340 $ 13,340 $ 915 Cash in escrow and with fiscal agents - - - 6,951 Receivables (net, where applicable, of allowances for uncollectibles): Accounts - 8 - 858 Loans - - - - Other - - - - Due from independent agencies and other governments - 66 368 - Prepaid items - - 577 - TOTAL ASSETS 81,874 1,414 14,285 8,724 LIABILITIES: Accounts payable and accrued liabilities 362 17 193 726 Contracts payable - - - - Due to other funds - - - - Due to individuals - - - - Deposits 566 - - 2,750 Unearned revenue - - - - TOTAL LIABILITIES 928 17 193 3,476 FUND BALANCES: Non Spendable Non Spendable - - 577 - Spendable: Restricted - 1,397 - - Committed 80,946 - 13,515 5,248 Unassigned - - - - TOTAL FUND BALANCES (Deficit) 80,946 1,397 14,092 5,248 TOTAL LIABILITIES AND FUND BALANCES $ 81,874 $ 1,414 $ 14,285 $ 8,724 SPECIAL REVENUE FUNDS 204 -- 235 of 389 -- BUDGETED TRANSPORTATION GENERAL EMERGENCY TAX INCREMENT KIDS HOPE FUND GOVERNMENT 9-1-1 DISTRICTS ALLIANCE $ 16,663 $ 54,246 $ 7,145 $ 66,157 $11,457 - - - - - - 655 - - - - - - - - - - - - - 33,430 401 442 - 152 - - - - - 50,093 55,302 7,587 66,157 11,609 963 1,322 346 2,444 615 - - - - - - - - - - - - - - - - 755 - - - - - - 92 - 963 2,077 346 2,536 615 - - - - - - - - 63,621 10,994 49,130 53,225 7,241 - - - - - - - 49,130 53,225 7,241 63,621 10,994 $ 50,093 $ 55,302 $ 7,587 $ 66,157 $ 11,609 (continued) SPECIAL REVENUE FUNDS 205 -- 236 of 389 -- CITY OF JACKSONVILLE, FLORIDA COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2021 WITH COMPARATIVE TOTALS FOR 2020 (in thousands; continued) COMMUNITY DEVELOPMENT JOB TRAINING MAINTENANCE, BLOCK PARTNERSHIP PARKS AND PUBLIC GRANT ACT GRANT RECREATION SAFETY ASSETS: Equity in pooled cash and investments $ 1,254 $ 843 $ 11,890 $ (21,559) Cash in escrow and with fiscal agents - - - - Receivables (net, where applicable, of allowances for uncollectibles): Accounts - - 1 - Loans 1,237 - - - Other - - - - Due from independent agencies and other governments 9,197 - - (445) Prepaid items - - 16 - TOTAL ASSETS 11,688 843 11,907 (22,004) LIABILITIES: Accounts payable and accrued liabilities 784 - 451 1,486 Contracts payable - - - - Due to other funds - - - - Due to individuals - - - - Deposits 7 - 29 - Unearned revenue 12,861 - - - TOTAL LIABILITIES 13,652 - 480 1,486 FUND BALANCES: Non Spendable Non Spendable - - 16 - Spendable: Restricted - 843 - - Committed - - 11,411 - Unassigned (1,964) - - (23,490) TOTAL FUND BALANCES (Deficit) (1,964) 843 11,427 (23,490) TOTAL LIABILITIES, DEFERRED INFLOW OF RESOURCES, AND FUND BALANCES $ 11,688 $ 843 $ 11,907 ($ 22,004) SPECIAL REVENUE FUNDS (CONTINUED) 206 -- 237 of 389 -- BETTER STATE HOUSING NON-BUDGETED JACKSONVILLE HOUSING AND INITIATIVE GENERAL PLAN TRUST NEIGHBORHOODS PARTNERSHIP GOVERNMENT 2021 2020 $ 67,981 $ (2,195) $ 4,562 $ 30,878 $ 346,791 $ 380,425 - - - - 6,951 4,746 - 1,585 - 2 3,109 1,928 - 3,258 371 - 4,866 4,880 - - - - - - 26,616 4,264 604 77 75,172 49,883 - - - - 593 34 94,597 6,912 5,537 30,957 437,482 441,896 - 259 138 990 11,096 18,211 - - - - - 48 - - - - - 8,400 - - - 243 243 253 - 25 - 1 4,133 4,401 - 15 1,013 - 13,981 1,196 - 299 1,151 1,234 29,453 32,509 - - - - 593 194 - 6,613 4,386 - 87,854 72,369 94,597 - - 29,723 345,036 336,824 - - - - (25,454) - 94,597 6,613 4,386 29,723 408,029 409,387 $ 94,597 $ 6,912 $ 5,537 $ 30,957 $ 437,482 $ 441,896 (continued) TOTALS SPECIAL REVENUE FUNDS (CONTINUED) 207 -- 238 of 389 -- CITY OF JACKSONVILLE, FLORIDA COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2021 WITH COMPARATIVE TOTALS FOR 2020 (in thousands) BETTER JACKSONVILLE PLAN GENERAL CONSTRUCTION BOND PROJECTS PROJECT PROJECTS ASSETS: Equity in pooled cash and investments $ 87,323 $ 14,240 $ 9,418 Cash in escrow and with fiscal agents - - - Receivables (net, where applicable, of allowances for uncollectibles): Accounts - - - Loans - - - Other - - - Due from independent agencies and other governments - - - Prepaid items - - - TOTAL ASSETS 87,323 14,240 9,418 LIABILITIES: Accounts payable and accrued liabilities 10,187 598 19 Contracts payable 504 - 6 Due to other funds - - - Due to individuals - - - Deposits 5 - - Unearned revenue - - - TOTAL LIABILITIES 10,696 598 25 FUND BALANCES: Non Spendable Non Spendable - - - Spendable: Restricted - - 9,393 Committed 76,627 13,642 - Unassigned - - - TOTAL FUND BALANCES (Deficit) 76,627 13,642 9,393 TOTAL LIABILITIES AND FUND BALANCES $ 87,323 $ 14,240 $ 9,418 CAPITAL PROJECTS 208 -- 239 of 389 -- RIVER CITY GRANT RENAISSANCE PROJECTS PROJECT 2021 2020 $ 4,439 $ 35 $ 115,455 $ 131,857 - - - - - - - 1 - - - - - - - 549 137 - 137 749 - - - - 4,576 35 115,592 133,156 2,564 - 13,368 12,424 2 - 512 851 - - - - - - - - - - 5 5 - - - - 2,566 - 13,885 13,280 - - - - 2,010 35 11,438 14,907 - - 90,269 104,969 - - - - 2,010 35 101,707 119,876 $ 4,576 $ 35 $ 115,592 $ 133,156 (continued) TOTALS CAPITAL PROJECTS 209 -- 240 of 389 -- CITY OF JACKSONVILLE, FLORIDA COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2021 WITH COMPARATIVE TOTALS FOR 2020 (in thousands; continued) CEMETERY ART IN PUBLIC MAINTENANCE PLACES 2021 2020 ASSETS: Equity in pooled cash and investments $ 125 $ (158) ($ 33) $ 127 Cash in escrow and with fiscal agents 140 1,601 1,741 1,708 Receivables (net, where applicable, of - - allowances for uncollectibles): - - Accounts - - - - Loans - - - - Other - - - - Due from independent agencies and other governments - - - - Prepaid items - - - - TOTAL ASSETS 265 1,443 1,708 1,835 LIABILITIES: Accounts payable and accrued liabilities - - - - Contracts payable - - - - Due to other funds - - - 78 Due to individuals - - - - Deposits - - - - Unearned revenue - - - - TOTAL LIABILITIES - - - 78 FUND BALANCES: Non Spendable Non Spendable 123 1,443 1,566 1,616 Spendable: Restricted - - - - Committed 142 - 142 141 Unassigned - - - - TOTAL FUND BALANCES (Deficit) 265 1,443 1,708 1,757 TOTAL LIABILITIES AND FUND BALANCES $ 265 $ 1,443 $ 1,708 $ 1,835 TOTALS PERMANENT FUNDS 210 -- 241 of 389 -- TOTAL NONMAJOR GOVERNMENTAL FUNDS 2021 2020 $ 462,213 $ 512,409 8,692 6,454 3,109 1,929 4,866 4,880 - 549 75,309 50,632 593 34 554,782 576,887 24,464 30,635 512 899 - 8,478 243 253 4,138 4,406 13,981 1,196 43,338 45,867 2,159 1,810 99,292 87,276 435,447 441,934 (25,454) - 511,444 531,020 $ 554,782 $ 576,887 TOTALS 211 -- 242 of 389 -- COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 WITH COMPARATIVE TOTALS FOR 2020 (in thousands) AIR POLLUTION CLERK CONCURRENCY CONTROL AND TOURISM OF THE MANAGEMENT MONITORING DEVELOPMENT COURT REVENUES: Property taxes $ - $ - $ - $ - Utility and Communications service taxes - - - - Sales and tourist taxes - - 7,597 - Local business taxes - - - - Licenses, permits, and fees 11,788 - - - Intergovernmental - 1,525 - - Charges for services 3,960 - - 21,677 Fines and forfeitures - - - - JEA Contribution - - - - Investment earnings 103 10 129 6 Other - - 969 - Total Revenues 15,851 1,535 8,695 21,683 EXPENDITURES: Current: General government 770 - - 19,335 Human services - - - - Public safety - - - - Culture and recreation - - 733 - Transportation - - - - Economic environment - - 3,644 - Physical environment - 1,524 - - Capital outlay 2,198 69 - 44 Debt Service: Principal - - - - Interest - - - - Other - - - - Total Expenditures 2,968 1,593 4,377 19,379 EXCESSS OF REVENUES OVER (UNDER) EXPENDITURES 12,883 (58) 4,318 2,304 OTHER FINANCING SOURCES (USES): Long term debt issued - - - - Refunding bond issued - - - - Premium on bonds payable - - - - Payment to escrow agent - refunded debt - - - - Transfers In - 424 - - Transfers Out - - - - Total Other Financing Sources (Uses) - 424 - - NET CHANGE IN FUND BALANCES 12,883 366 4,318 2,304 FUND BALANCE, BEGINNING OF YEAR 68,063 1,031 9,774 2,944 FUND BALANCES (DEFICIT), END OF YEAR $80,946 $1,397 $14,092 $5,248 SPECIAL REVENUE FUNDS 212 -- 243 of 389 -- BUDGETED TRANSPORTATION GENERAL EMERGENCY TAX INCREMENT KIDS HOPE FUND GOVERNMENT 9-1-1 DISTRICTS ALLIANCE $ - $ - $ - $32,230 $ - - - - - - 138,307 - - - - - - - - - - 17,441 - - - 14,317 1,885 - - 1,787 - 11,055 5,094 - - - 884 - - - - - - - - 497 576 82 1,093 161 - 3,644 - 1,667 106 153,121 35,485 5,176 34,990 2,054 1 6,282 - - - - 337 - - 34,667 - 17,189 4,748 - - - 239 - - 4 138,584 - - - - - - - 12,624 - - 8,043 - - - 14,467 206 343 5,341 7 - - - - - - - - - - - - - - - 153,052 32,296 5,091 17,965 34,678 69 3,189 85 17,025 (32,624) - - - - - - - - - - - - - - - - - - - - - 722 - 527 35,100 - (1,952) - (1,899) (506) - (1,230) - (1,372) 34,594 69 1,959 85 15,653 1,970 49,061 51,266 7,156 47,968 9,024 $49,130 $53,225 $7,241 $63,621 $10,994 SPECIAL REVENUE FUNDS (CONTINUED) 213 -- 244 of 389 -- COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 WITH COMPARATIVE TOTALS FOR 2020 (in thousands) COMMUNITY DEVELOPMENT JOB TRAINING MAINTENANCE BLOCK PARTNERSHIP PARKS AND PUBLIC GRANT ACT GRANT RECREATION SAFETY REVENUES: Property taxes $ - $ - $ - $ - Utility and Communications service taxes - - - - Sales and tourist taxes - - - - Local business taxes - - - - Licenses, permits, and fees - - - - Intergovernmental 40,046 - - 5,126 Charges for services - - 4,124 - Fines and forfeitures - - - - JEA Contribution - - - - Investment earnings - 10 121 3 Other 239 - 3,945 - Total Revenues 40,285 10 8,190 5,129 EXPENDITURES: Current: General government - - - 5,682 Human services - - - 1,989 Public safety - - - 61,919 Culture and recreation - - 4,332 1,000 Transportation - - - - Economic environment 42,844 - 2,326 - Physical environment - - - - Capital outlay - - 49 4,382 Debt Service: Principal - - - - Interest - - - - Other - - - - Total Expenditures 42,844 - 6,707 74,972 EXCESSS OF REVENUES OVER (UNDER) EXPENDITURES (2,559) 10 1,483 (69,843) OTHER FINANCING SOURCES (USES): Long term debt issued - - - - Refunding bond issued - - - - Premium on bonds payable - - - - Payment to escrow agent - refunded debt - - - - Transfers In - - 1,293 - Transfers Out (128) - (200) - Total Other Financing Sources (Uses) (128.00) - 1,093 - NET CHANGE IN FUND BALANCES (2,687) 10 2,576 (69,843) FUND BALANCE, BEGINNING OF YEAR 723 833 8,851 46,353 FUND BALANCES (DEFICIT), END OF YEAR $(1,964) $843 $11,427 $(23,490) SPECIAL REVENUE FUNDS (CONTINUED) 214 -- 245 of 389 -- BETTER STATE HOUSING NON-BUDGETED JACKSONVILLE HOUSING AND INITIATIVE GENERAL PLAN TRUST NEIGHBORHOODS PARTNERSHIP GOVERNMENT 2021 2020 $ - $ - $ - $ - $32,230 $28,749 - - - - - - 103,853 - - - 249,757 220,640 - - - - - - - - - 2,917 32,146 20,394 - 3,381 7,819 - 75,886 253,868 - 4 - 2,404 48,318 43,185 - - - 1,691 2,575 1,981 - - - - - - 715 45 - 276 3,827 10,312 - 1,329 608 4,420 16,927 16,670 104,568 4,759 8,427 11,708 461,666 595,799 - - - 406 32,476 31,916 - - - 1,310 38,303 40,278 - - - 4,721 88,577 143,080 - - - 843 7,151 6,462 - - - - 138,584 128,836 - 10,182 4,795 252 76,667 41,769 - - - 979 10,546 9,742 - - - 867 27,973 23,294 - - - - - - - - - - - - - - - - - - - 1 - 10,182 4,795 9,378 420,277 425,378 104,568 (5,423) 3,632 2,330 41,389 170,421 - - - - - - - - - - - - - - - - - - - - - - - - - - - 997 39,063 38,281 (76,771) - - (354) (81,810) (86,234) (76,771) - - 643 (42,747) (47,953) 27,797 (5,423) 3,632 2,973 (1,358) 122,468 66,800 12,036 754 26,750 409,387 286,919 $94,597 $6,613 $4,386 $29,723 $408,029 $409,387 TOTALS SPECIAL REVENUE FUNDS (CONTINUED) 215 -- 246 of 389 -- COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 WITH COMPARATIVE TOTALS FOR 2020 (in thousands) BETTER JACKSONVILLE GENERAL CONSTRUCTION BOND PROJECTS PROJECT PROJECTS REVENUES: Property taxes $ - $ - $ - Utility and Communications service taxes - - - Sales and tourist taxes - - - Local business taxes - - - Licenses, permits, and fees - - - Intergovernmental 7,500 570 - Charges for services 45 - - Fines and forfeitures - - - JEA Contribution - - - Investment earnings - 203 70 Other 789 - - Total Revenues 8,334 773 70 EXPENDITURES: Current: General government 182 - - Human services - - - Public safety - - - Culture and recreation - 26 - Transportation 24 - - Economic environment 46 180 - Physical environment - - - Capital outlay 119,155 5,551 1,314 Debt Service: Principal - - - Interest - - - Other - - - Total Expenditures 119,407 5,757 1,314 EXCESSS OF REVENUES OVER (UNDER) EXPENDITURES (111,073) (4,984) (1,244) OTHER FINANCING SOURCES (USES): Long term debt issued 82,684 - - Refunding bond issued - - - Premium on bonds payable - - - Payment to escrow agent - refunded debt - - - Transfers In 17,373 1,500 - Transfers Out (200) - - Total Other Financing Sources (Uses) 99,857 1,500 - NET CHANGE IN FUND BALANCES (11,216) (3,484) (1,244) FUND BALANCE, BEGINNING OF YEAR 87,843 17,126 10,637 FUND BALANCES (DEFICIT), END OF YEAR $76,627 $13,642 $9,393 CAPITAL PROJECTS 216 -- 247 of 389 -- RIVER CITY GRANT RENAISSANCE PROJECTS PROJECT 2021 2020 $ - $ - $ - $ - - - - - - - - - - - - - - - - - 11,858 - 19,928 8,597 - - 45 88 - - - - - - - - 37 - 310 2,364 - - 789 520 11,895 - 21,072 11,569 - - 182 1 - - - - 159 - 159 - 1 - 27 12 - - 24 46 - - 226 69 - - - - 13,960 - 139,980 108,738 - - - - - - - - - - - - - - 14,120 - 140,598 108,866 (2,225) - (119,526) (97,297) - - 82,684 86,134 - - - - - - - - - - - - - - 18,873 30,213 - - (200) (965) - - 101,357 115,382 (2,225) - (18,169) 18,085 4,235 35 119,876 101,791 $2,010 $35 $101,707 $119,876 TOTALS CAPITAL PROJECTS (CONTINUED) 217 -- 248 of 389 -- COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 WITH COMPARATIVE TOTALS FOR 2020 (in thousands) CEMETERY ART IN PUBLIC MAINTENANCE PLACES 2021 2020 REVENUES: Property taxes $ - $ - $ - $ - Utility and Communications service taxes - - - - Sales and tourist taxes - - - - Local business taxes - - - - Licenses, permits, and fees - - - - Intergovernmental - - - - Charges for services - - - - Fines and forfeitures - - - - JEA Contribution - - - - Investment earnings 1 - 1 82 Other - - - - Total Revenues 1 0 1 82 EXPENDITURES: Current: General government - 8 8 - Human services - - - - Public safety - - - - Culture and recreation - - - - Transportation - - - - Economic environment - - - - Physical environment - - - - Capital outlay - - - - Debt Service: - Principal - - - - Interest - - - - Other - - - - Total Expenditures - 8 8 - EXCESSS OF REVENUES OVER (UNDER) EXPENDITURES 1 (8) (7) 82 OTHER FINANCING SOURCES (USES): Long term debt issued - - - - Refunding bond issued - - - - Premium on bonds payable - - - - Payment to escrow agent - refunded debt - - - - Transfers In - - - - Transfers Out - (42) (42) (92) Total Other Financing Sources (Uses) - (42) (42) (92) NET CHANGE IN FUND BALANCES 1 (50) (49) (10) FUND BALANCE, BEGINNING OF YEAR 264 1,493 1,757 1,767 FUND BALANCES (DEFICIT), END OF YEAR $265 $1,443 $1,708 $1,757 TOTALS PERMANENT FUNDS 218 -- 249 of 389 -- TOTAL NONMAJOR GOVERNMENTAL FUNDS 2021 2020 $32,230 $28,749 - - 249,757 220,640 - - 32,146 20,394 95,814 262,465 48,363 43,273 2,575 1,981 - - 4,138 12,758 17,716 17,190 482,739 607,450 32,666 31,917 38,303 40,278 88,736 143,080 7,178 6,474 138,608 128,882 76,893 41,838 10,546 9,742 167,953 132,032 - - - - - 1 560,883 534,244 (78,144) 73,206 82,684 86,134 - - - - - - 57,936 68,494 (82,052) (87,291) 58,568 67,337 (19,576) 140,543 531,020 390,477 $511,444 $531,020 TOTALS 219 -- 250 of 389 -- CITY OF JACKSONVILLE, FLORIDA BUDGETARY COMPARISON SCHEDULE NONMAJOR GOVERNMENTAL FUNDS (in thousands) FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 VARIANCE WITH FINAL BUDGET - BUDGETARY POSITIVE ORIGINAL FINAL ACTUAL ENCUMBRANCES ACTUAL (NEGATIVE) REVENUE: Licenses, permits, and fees $ 944 $ 944 $ 11,788 $ 11,788 $ 10,844 Charges for Services 250 250 3,960 - 3,960 3,710 Interest 116 116 103 - 103 (13) Total Revenue 1,310 1,310 15,851 - 15,851 14,541 EXPENDITURES: Jacksonville Citywide (40) 674 - - - 674 Planning and Development (9) 6,882 797 69 797 6,085 Public Works 1,790 26,804 2,171 5,027 2,171 24,633 Total Expenditures 1,741 34,360 2,968 5,096 2,968 31,392 EXCESS (DEFICIENCY) OF REVENUE OVER (UNDER) EXPENDITURES (431) (33,050) 12,883 (5,096) 12,883 45,933 NET CHANGE IN FUND BALANCES (431) (33,050) 12,883 (5,096) - 33,050 FUND BALANCE, BEGINNING 68,063 68,063 68,063 - - 68,063 FUND BALANCE, ENDING $ 67,632 $ 35,013 $ 80,946 $ (5,096) $ - $ 101,113 FUND 101000 - CONCURRENCY MANAGEMENT BUDGETED AMOUNTS 220 -- 251 of 389 -- CITY OF JACKSONVILLE, FLORIDA BUDGETARY COMPARISON SCHEDULE NONMAJOR GOVERNMENTAL FUNDS (in thousands) FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 VARIANCE WITH FINAL BUDGET - BUDGETARY POSITIVE ORIGINAL FINAL ACTUAL ENCUMBRANCES ACTUAL (NEGATIVE) REVENUE: Intergovernmental $ 650 $ 1,550 $ 1,525 $ - $ 1,525 $ (25) Interest 7 7 10 - 10 3 Miscellaneous - - - - - - Total Revenue 657 1,557 1,535 - 1,535 (22) EXPENDITURES: Jacksonville Citywide - 342 - - - 342 Neighborhoods 748 2,651 1,593 25 1,618 1,033 Total Expenditures 748 2,993 1,593 25 1,618 1,375 EXCESS (DEFICIENCY) OF REVENUE OVER (UNDER) EXPENDITURES (91) (1,436) (58) (25) (83) 1,353 OTHER FINANCING (USES): Operating transfers in - 424 424 - 424 - Total Other Financing (Uses) - 424 424 - 424 - NET CHANGE IN FUND BALANCES (91) (1,012) 366 (25) 341 1,353 FUND BALANCE, BEGINNING 1,031 1,031 1,031 - 1,031 - FUND BALANCE, ENDING $ 940 $ 19 $ 1,397 $ (25) $ 1,372 $ 1,353 FUND 10200 - AIR POLLUTION CONTROL AND MONITORING BUDGETED AMOUNTS 221 -- 252 of 389 -- CITY OF JACKSONVILLE, FLORIDA BUDGETARY COMPARISON SCHEDULE NONMAJOR GOVERNMENTAL FUNDS (in thousands) FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 FUND 10300 - TOURISM DEVELOPMENT VARIANCE WITH FINAL BUDGET - BUDGETARY POSITIVE ORIGINAL FINAL ACTUAL ENCUMBRANCES ACTUAL (NEGATIVE) REVENUE: Sales and Use Tax $ 5,000 $ 5,000 $ 7,597 $ - $ 7,597 $ 2,597 Interest 7 7 129 - 129 122 Other - 620 969 - 969 349 Total Revenue 5,007 5,627 8,695 - 8,695 3,068 EXPENDITURES: Finance - 7 - - - 7 City Council 5,007 10,660 3,819 2,776 6,595 4,065 Neighborhoods - 41 - - - 41 Parks & Recreation - 2,395 558 786 1,344 1,051 Sports & Entertainment - - - - - - Intergovernmental Services - - - - - Total Expenditures 5,007 13,103 4,377 3,562 7,939 5,164 EXCESS (DEFICIENCY) OF REVENUE OVER (UNDER) EXPENDITURES - (7,476) 4,318 (3,562) 756 8,232 NET CHANGE IN FUND BALANCES - (7,476) 4,318 (3,562) 756 8,232 FUND BALANCE, BEGINNING 9,774 9,774 9,774 - 9,774 - FUND BALANCE, ENDING $ 9,774 $ 2,298 $ 14,092 $ (3,562) $ 10,530 $ 8,232 BUDGETED AMOUNTS 222 -- 253 of 389 -- CITY OF JACKSONVILLE, FLORIDA BUDGETARY COMPARISON SCHEDULE NONMAJOR GOVERNMENTAL FUNDS (in thousands) FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 VARIANCE WITH FINAL BUDGET - BUDGETARY POSITIVE ORIGINAL FINAL ACTUAL ENCUMBRANCES ACTUAL (NEGATIVE) REVENUE: Sales and Use Taxes $ 120,128 $ 120,128 $ 138,307 $ 138,307 $ 18,179 Intergovernmental 14,562 14,562 14,317 14,317 (245) Interest 367 367 497 497 130 Other - - - - - Total Revenue $ 135,057 $ 135,057 $ 153,121 - $ 153,121 $ 18,064 EXPENDITURES: Public Works 41,646 55,794 45,115 4,627 49,742 6,052 Jacksonville Misc. Citywide Activities 93,411 147,784 107,937 - 107,937 39,847 Total Expenditures 135,057 203,578 153,052 4,627 157,679 45,899 EXCESS (DEFICIENCY) OF REVENUE OVER (UNDER) EXPENDITURES - (68,521) 69 (4,627) (4,558) 63,963 NET CHANGE IN FUND BALANCES - (68,521) 69 (4,627) (4,558) 63,963 FUND BALANCE, BEGINNING 49,061 49,061 49,061 - 49,061 - FUND BALANCE, ENDING $ 49,061 $ (19,460) $ 49,130 $ (4,627) $ 44,503 $ 63,963 FUND 10400 - TRANSPORTATION BUDGETED AMOUNTS 223 -- 254 of 389 -- CITY OF JACKSONVILLE, FLORIDA BUDGETARY COMPARISON SCHEDULE NONMAJOR GOVERNMENTAL FUNDS (in thousands) FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 VARIANCE WITH FINAL BUDGET - BUDGETARY POSITIVE ORIGINAL FINAL ACTUAL ENCUMBRANCES ACTUAL (NEGATIVE) REVENUE: Permits, Fees & Special Assessments $ 15,087 $ 15,087 $ 17,441 $ 17,441 $ 2,354 Intergovernmental - 1,988 1,885 1,885 (103) Charges for services 7,531 7,531 11,055 11,055 3,524 Fines and forfeitures 239 239 884 884 645 Interest 339 339 576 576 237 Other 703 8,703 3,644 3,644 (5,059) Total Revenue 23,899 33,887 35,485 - 35,485 1,598 EXPENDITURES: Advisory Boards and Commissions - 9 3 - 3 6 Courts 2,373 2,397 2,383 37 2,420 (23) Finance 204 266 183 83 266 - Fire/Rescue 1,644 1,658 1,662 3 1,665 (7) Jacksonville Citywide Activities - 20 - - - 20 Neighborhoods 662 5,722 2,567 84 2,651 3,071 Public Defender 504 564 527 3 530 34 Planning and Development 19,757 20,410 18,518 658 19,176 1,234 Public Library 235 464 239 39 278 186 Public Works 389 18,364 5,604 3,026 8,630 9,734 Parks, Recreation and Community Services - 121 25 - 25 96 State Attorney 622 686 585 - 585 101 Total Expenditures 26,390 50,681 32,296 3,933 36,229 14,452 EXCESS (DEFICIENCY) OF REVENUE OVER (UNDER) EXPENDITURES (2,491) (16,794) 3,189 (3,933) (744) 16,050 OTHER FINANCING (USES): Operating transfers in 722 722 722 722 - Operating transfers out (2,342) (2,742) (1,952) (1,952) 790 Total Other Financing (Uses) (1,620) (2,020) (1,230) - (1,230) 790 NET CHANGE IN FUND BALANCES (4,111) (18,814) 1,959 (3,933) (1,974) 16,840 FUND BALANCE, BEGINNING 51,266 51,266 51,266 - 51,266 - FUND BALANCE, ENDING $ 47,155 $ 32,452 $ 53,225 $ (3,933) $ 49,292 $ 16,840 FUND 15000 - BUDGETED GENERAL GOVERNMENT BUDGETED AMOUNTS 224 -- 255 of 389 -- CITY OF JACKSONVILLE, FLORIDA BUDGETARY COMPARISON SCHEDULE NONMAJOR GOVERNMENTAL FUNDS (in thousands) FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 VARIANCE WITH FINAL BUDGET - BUDGETARY POSITIVE ORIGINAL FINAL ACTUAL ENCUMBRANCES ACTUAL (NEGATIVE) REVENUE: Charges for services $ 4,853 $ 4,853 $ 5,094 $ 5,094 $ 241 Interest 122 122 82 82 (40) Total Revenue $ 4,975 $ 4,975 $ 5,176 - $ 5,176 $ 201 EXPENDITURES: Jacksonville Citywide Activities 39 342 - - - 342 Office of the Sheriff 5,275 5,816 5,091 183 5,274 542 Total Expenditures 5,314 6,158 5,091 183 5,274 884 EXCESS (DEFICIENCY) OF REVENUE OVER (UNDER) EXPENDITURES (339) (1,183) 85 (183) (98) 1,085 NET CHANGE IN FUND BALANCES (339) (1,183) 85 (183) (98) 1,085 FUND BALANCE, BEGINNING 7,156 7,156 7,156 - 7,156 - FUND BALANCE, ENDING $ 6,817 $ 5,973 $ 7,241 $ (183) $ 7,058 $ 1,085 FUND 10700 - EMERGENCY 9 1 1 BUDGETED AMOUNTS 225 -- 256 of 389 -- CITY OF JACKSONVILLE, FLORIDA BUDGETARY COMPARISON SCHEDULE NONMAJOR GOVERNMENTAL FUNDS (in thousands) FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 VARIANCE WITH FINAL BUDGET - BUDGETARY POSITIVE ORIGINAL FINAL ACTUAL ENCUMBRANCES ACTUAL (NEGATIVE) REVENUE: Property taxes $ 40,203 $ 40,710 $ 32,230 $ 32,230 $ (8,480) Interest - - 1,093 1,093 1,093 Other 1,102 3,697 1,667 1,667 (2,030) Total Revenue $ 41,305 $ 44,407 $ 34,990 - $ 34,990 $ (9,417) EXPENDITURES: Downtown Investment Authority 11,162 24,715 5,599 3,089 8,688 16,027 Jacksonville Citywide Activities 19,849 16,956 6,610 5,572 12,182 4,774 Office of Economic Development 404 37,876 5,756 3,681 9,437 28,439 Tota
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