HomeMy WebLinkAboutCity of Euless Comprehensive Annual Financial Report FY2010City of Euless, Texas
Comprehensive Annual Financial ReportComprehensive Annual Financial Report
Fiscal Year Ending
September 30, 2010
201 N. ECTOR DRIVE201 N. ECTOR DRIVE
EULESS, TEXAS 76039EULESS, TEXAS 76039
PHONE (817) 685PHONE (817) 685--16261626()()
FAX (817) 685FAX (817) 685--14591459
www.eulesstx.govwww.eulesstx.gov
City of Euless, Texas
Comprehensive Annual Financial Report
Fiscal Year Ending
September 30, 2010
Prepared by
City of Euless
Finance Department
201 North Ector Drive
Euless, TX 76039
CITY OF EULESS, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED SEPTEMBER 30, 2010
C O N T E N T S
Page(s)
INTRODUCTORY SECTION
Letter of Transmittal i-viii
City Officials ix
Organizational Chart x
GFOA Certificate of Achievement xi
FINANCIAL SECTION
Independent Auditor's Report 1-2
Management’s Discussion and Analysis (unaudited) 3-13
Basic Financial Statements
Government-W ide Financial Statements
Statement of Net Assets 14
Statement of Activities 15
Fund Financial Statements
Governmental Funds
Balance Sheet 16
Reconciliation of the Governmental Funds Balance Sheet to
Statement of Net Assets 17
Statement of Revenues, Expenditures, and Changes in Fund Balances 18
Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balances of Governmental Funds to the Statement
of Activities 19
Proprietary Funds
Statement of Net Assets 20-21
Statement of Revenues, Expenses, and Changes in Net Assets 22
Statement of Cash Flows 23-24
Fiduciary Funds
Statement of Net Assets 25
Statement of Changes in Fiduciary Net Assets 26
Notes to Basic Financial Statements 27-58
Required Supplementary Information
Schedule of Funding Progress for Participation in
Texas Municipal Retirement System 59
Schedule of Funding Progress – OPEB Trust 60
Budgetary Comparison Schedules 61-63
Notes to Required Supplementary Information 64
Combining and Individual Fund Statements and Schedules
Non-Major Governmental Funds
Combining Balance Sheet 67-68
Combining Statement of Revenues, Expenditures, and Changes
in Fund Balances 69-70
CITY OF EULESS, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED SEPTEMBER 30, 2010
C O N T E N T S – CONTINUED
Page(s)
Combining and Individual Fund Statements and Schedules Continued
Schedule of Revenues, Expenditures, and Changes in Fund Balances
Budget and Actual
Hotel/Motel Special Revenue Fund 71
Police Drug Enforcement Special Revenue Fund 72
Half-Penny Sales Tax Special Revenue Fund 73
Crime Control and Prevention District Special Revenue Fund 74
Public Safety Grant Special Revenue Fund 75
Juvenile Case Special Revenue Fund 76
Non-Major Proprietary Funds
Combining Statement of Net Assets 78-79
Combining Statement of Revenues, Expenses, and Changes in Net Assets 80
Combining Statement of Cash Flows 81
Internal Service Funds
Combining Statement of Net Assets 83
Combining Statement of Revenues, Expenses, and Changes in Net Assets 84
Combining Statement of Cash Flows 85
Stars Center Agency Fund
Statement of Changes in Assets and Liabilities 86
STATISTICAL SECTION (Unaudited) Table Page(s)
Net Assets by Component 1 88
Changes in Net Assets 2 89-90
Fund Balances, Governmental Funds 3 91
Changes in Fund Balances, Governmental Funds 4 92
Assessed and Estimated Actual Value of Taxable Property 5 93
Direct and Overlapping Property Tax Rates 6 94
Principal Property Tax Payers 7 95
Property Tax Levies and Collections 8 96
Ratio of Outstanding Debt by Type 9 97
Ratio of Net General Bonded Debt to Assessed Value and
Net Bonded Debt Per Capita 10 98
Direct and Overlapping Governmental Activities Debt 11 99
Schedule of Revenue Bond Coverage W ater and W astewater Bonds 12 100
Schedule of Revenue Bond Coverage Drainage Utility Bonds 13 101
Demographic Statistics 14 102
Principal Employers 15 103
Full-time Equivalent City Government Employees by Function/Program 16 104
Operating Indicators by Function/Program 17 105
Capital Asset Statistics by Function/Program 18 106
INTRODUCTORY SECTION
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201 N. Ector Drive, Euless TX 76039-3595
817/685-1400 Metro 817/267-4403 Fax 817/685-1416
www.ci.euless.tx.us
January 25, 2011
To the Honorable Mayor,
Members of the City Council, and
Citizens of the City of Euless, Texas
The Finance Department and City Manager’s Office are pleased to submit the
Comprehensive Annual Financial Report (“CAFR”) for the City of Euless, Texas
(“City”) for the fiscal year ended September 30, 2010. This report complies with State
law which requires that all local governments publish within six months of the close of
each fiscal year a complete set of financial statements presented in conformity with
accounting principles generally accepted in the United States of America (“GAAP”) and
audited in accordance with auditing standards generally accepted in the United States of
America by a firm of licensed certified public accountants.
This report is published to provide the City Council, city staff, citizens, bondholders, and
other interested parties with detailed information concerning the financial condition and
activities of the City. The report consists of city management’s representations
concerning the finances of the City. Consequently, management assumes full
responsibility for the accuracy, completeness, and reliability of all of the information
presented in the report. To provide a reasonable basis for making these representations,
management of the City has established a comprehensive internal control framework that
is designed both to protect the City’s assets from loss, theft, or misuse and to compile
sufficient reliable information for the preparation of the City’s financial statements in
conformity with GAAP. Because the cost of internal controls should not outweigh the
benefits derived from them, the City’s comprehensive framework of internal controls has
been designed to provide reasonable rather than absolute assurance that the financial
statements will be free from material misstatement. As management, we assert that, to
the best of our knowledge and belief, this financial report is complete and reliable in all
material respects.
The City’s financial statements have been audited by Weaver and Tidwell, L.L.P., a firm
of licensed, certified public accountants. The goal of the independent audit is to provide
reasonable assurance that the financial statements of the City for the fiscal year ended
September 30, 2010, are free of material misstatement. The independent audit involved
examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements; assessing the accounting principles used and significant estimates
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made by management; and evaluating the overall financial statement presentation. The
independent auditor concluded, based upon the audit, that there was a reasonable basis
for rendering an unqualified (“clean”) opinion that the City’s financial statements for the
fiscal year ended September 30, 2010, are fairly presented in conformity with GAAP.
The independent auditor’s report is presented as the first component of the Financial
Section of this report.
This report is presented in three sections: Introductory, Financial, and Statistical. The
Introductory Section includes this transmittal letter, a listing of City Officials, and an
organizational chart of the City. The Financial Section includes the independent
auditor’s report on the basic financial statements, Management’s Discussion and Analysis
(“MD&A”), basic financial statements, the notes to the basic financial statements, and
combining and individual fund statements and schedules. The MD&A is a narrative
introduction, overview, and analysis to accompany the basic financial statements. This
letter of transmittal is designed to complement, and should be read in conjunction with,
the MD&A. The City of Euless’ MD&A can be found immediately following the
independent auditor’s report. The Statistical Section includes financial and demographic
information relevant to readers of the City’s financial statements. The statistical data is
generally presented on a multi-year basis.
Profile of the City of Euless, Texas
The City of Euless is located in North Central Texas in Northeast Tarrant County
approximately 16 miles west of Dallas and 16 miles east of Fort Worth. Euless is readily
accessible by State Highway 183 which is a six-lane expressway linking Dallas to Fort
Worth. Other major highways through the city include State Highway 121, State
Highway 360, State Highway 10 and Farm-to-Market Road 157. Euless’ centralized
location provides quick access to both Dallas and Fort Worth metropolitan areas and is
adjacent to Dallas-Fort Worth International Airport (“DFW Airport”) in east Tarrant
County, one of the world’s busiest airports. The City is approximately 16.9 square miles
and serves a population of approximately 54,200.
The City of Euless was incorporated February 24, 1953 and is a home rule city
operating under a Council/Manager form of government. The City Council is
comprised of the mayor and six council members who are elected at large. The
Council has the authority to enact local legislation, levy taxes, adopt budgets,
determine policies, incur debt, and appoint the City Secretary, City Attorney,
Municipal Court Judge, and the City Manager. The City Manager reports directly to
the City Council, and is responsible for the daily management of the various city
departments. Council members serve three-year staggered terms, with two council
members elected each year. The Mayor is elected to serve a three-year term. In
addition, several boards and commissions were created to assist the City Council in
deciding matters of policy and procedure and meet on various issues throughout the
year.
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The City of Euless provides a full range of services to its citizens including: police and
fire protection; emergency ambulance services; municipal court operations; development
and code services; construction and maintenance of streets and highways, parks, and
recreational facilities; water service and wastewater collection and treatment; and library
operations. The City also operates a top-ranked, 18-hole golf course and conference
center, an adult softball facility, and a youth athletic complex. Internal services of the
City account for risk management, equipment replacement, and employee insurance
coverage activities on a cost reimbursement basis. A private contractor, through a
franchise agreement, provides solid waste collection and disposal services for the City.
Two component units of the City, the Euless Development Corporation and the Euless
Crime Control and Prevention District, are presented in the financial statements of the
City as blended component units. Data for both organizations is recorded and presented
in the special revenue funds of the City’s financial statements. Additional information on
these component units can also be found in Note 1 in the notes to the financial
statements.
The annual budget serves as the foundation for the City of Euless’ financial planning and
control. According to the City Charter, the City Manager provides to the City Council
the proposed budget by August 1st each year. The budget is filed with the City Secretary
and is open for public inspection. Upon receipt of the budget, the City Council sets a
date for a public hearing at which time interested citizens may express their opinion
regarding the proposed budget. The charter requires the Council to adopt the budget by a
favorable majority vote at least ten days prior to the beginning of the next fiscal year.
The City Manager is authorized to transfer budgeted amounts between line items and
departments within any fund; however any revisions that alter the total expenditure of
any fund must be approved by the City Council. Budgetary control has been established
at the individual fund level. Financial reports are produced showing budget to actual
expenditures by line item and are distributed monthly to city departments for review.
Economic Condition
The information presented in the financial statements is perhaps best understood when it
is considered from the broader perspective of the specific environment within which the
City of Euless operates.
The City of Euless is located in Tarrant County, one of the fastest-growing counties in
Texas, in the heart of the Dallas/Fort Worth (“DFW”) Metroplex and adjacent to DFW
Airport. Thus, the economic vitality of the region significantly impacts the economic
health of Euless. DFW’s strategic central location and diverse economy are major factors
contributing to businesses relocating to the area. As a result, DFW is one of the fastest-
growing economic regions in the country. Due to the tremendous growth experienced
over the last decade, DFW has become the largest metropolitan area in Texas. DFW’s
highly-diversified economy includes more than 141,000 business, 1,500 regional and
corporate headquarters, 23 Fortune 500 Companies, and a total workforce of nearly 3.2
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million. Such economic diversity has helped the region weather economic downturns in
key sectors better than other regions of the nation (U.S. Census Bureau County Business
Patterns). For September 2010, the City’s unemployment rate of 7.2% compares
favorably with the state rate of 7.9%.
DFW Airport is the world’s third-busiest airport in terms of operations and eighth in
terms of passengers. DFW currently operates daily passenger flights to 186 destinations
worldwide, including 144 nonstop domestic destinations and 42 nonstop international
destinations, offering nearly 1,750 flights per day and serving more than 56 million
passengers a year. DFW provides in excess of 305,000 jobs and contributes $16.6 billion
annually to the regional economy (SOURCE: DFW website www.dfwairport.com Fast
Facts, DFW Airport 2009 Comprehensive Annual Financial Report, and December 17,
2010 DFW Airport News Release).
The Alliance Texas development in north Fort Worth is a 17,000-acre master-planned,
mixed-use community which is home to 240 companies, 28,000 employees, 7,300 single-
family homes, and is anchored by the inland port known as the Alliance Global Logistics
Hub. The development includes Fort Worth’s Alliance Airport, the first purely industrial
airport in the Western Hemisphere, which serves as the cornerstone for the nation’s
fastest-growing industrial complex. The area offers a variety of commercial real estate
options as well as industrial, office, and retail space. Additionally, the Alliance Texas
development contributes an estimated $2.5 billion annually to the local economy
(SOURCE: Alliance website www.allianceairport.com, Alliance Texas Facts).
Although the DFW Metroplex has fared better than other areas of the nation during the
recession, the local economy did experience a downturn due to the recent turmoil in the
housing and financial markets. Euless continues to look for new, innovative revenue
opportunities in an effort to minimize the tax burden to its citizens. Efforts have also
been made to hold or cut costs while preserving current service levels. Budgetary
reductions and other cost-saving measures enacted early in the prior fiscal year to
minimize the impact of declining revenue streams on City operations were carried over
into the current fiscal year. Numerous positions remained open during the fiscal year due
to a hiring freeze, baseline spending levels were reduced, and many capital purchases
were placed on hold. In the upcoming fiscal year, management will continue to closely
monitor revenue collections in conjunction with expenditure patterns to ensure the City
maintains a healthy financial position.
Taxable value for all residential and commercial property in the City of Euless totaled
approximately $2.6 billion for fiscal year 2010, which represents a 3% decrease over the
prior year. Sales tax collections continued to decline during FY2010 due to a decline in
the economy.
The City receives significant revenues from a consolidated rental car facility at DFW
Airport. While a portion is used to fund general operations to reduce the tax burden on
our citizens, the City Council has chosen to utilize the majority of this funding source to
build reserves and to cash flow capital projects in lieu of issuing additional debt. Doing
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so has allowed the City to refrain from becoming overly dependent on a volatile resource,
while providing much needed improvements within the community.
The City of Euless has approximately 1,065 acres of undeveloped land outside of DFW
Airport and another 1,700-1,800 developable acres within the airport boundaries. Euless
continues to focus on attracting quality, sustainable development to the area, to pursue
redevelopment opportunities, and to renew the emphasis on business retention. As a
result, over the last several years, Euless has experienced new commercial, industrial,
residential, and multi-family growth. During FY2010, the city welcomed the opening of
a new yogurt shop at the Shops of Vineyard Village, Fuzzy’s Taco, Bungalow Furniture
and Claudia’s Cakes. Additionally, the city processed ninety-one new residential housing
permits totaling approximately $26.7 million in new residential development, and
fourteen new commercial permits with a valuation of $6 million.
State Highway 360, which lies on the eastern border of the City, was expanded thereby
providing greater access to undeveloped areas along this roadway. Also, the construction
of the new Dallas Cowboys Stadium in Tarrant County, in close proximity to Euless, is
expected to attract additional tourism to the City.
During the fiscal year, various capital improvement projects located throughout the City
were completed. These projects included drainage improvement consisting of the
construction of a maintenance flume which will increase accessibility and minimize
flooding potential on Hurricane Creek at Marlene Drive. Additionally, the city
completed several facility projects including the renovation and expansion of the
recreation center including a new 5,000 square foot fitness center and a new senior center
which opened in December 2010, and constructed a regional headquarters facility for
Redi-Mix Concrete. Street projects completed this year include the Fuller-Wiser
connector which upgraded a portion of Fuller-Wiser Road from a two-lane road to a three
lane concrete road which included curb, gutters, sidewalks, and underground drainage.
The city completed street overlay projects on several streets in the Morrisdale
subdivision, as well as Marlene Drive and Wilshire Drive in collaboration with Tarrant
County. In addition, the city installed traffic signals at the intersection of Mid Cities
Boulevard at both Gateway Boulevard and Baze Road. All of these projects were funded
from cash reserves and did not require issuance of new debt.
The City benefits from a well educated workforce, with approximately 80% of graduating
seniors in the Hurst-Euless-Bedford School District pursuing further education. In
addition, Euless’ median household income of $58,276 (source: Claritas Site Reports)
compares favorably to $56,507 for Tarrant County and $49,723 for the State of Texas.
Long-Term Financial Planning
The City of Euless has developed a comprehensive capital improvements document as
well as a multi-year financial plan. Such strategic planning has allowed the City Council
to fund several major infrastructure upgrades, park enhancements, and capital purchases
in a systematic manner while considering the full impact to the operating budget and tax
vi
requirements. Many of these projects have been completed on a pay-as-you-go basis by
utilizing operating revenues, excess reserves, and rental car taxes, thereby avoiding the
issuance of additional debt.
The City Council and citizens of Euless have determined that debt issuance is a viable
method of financing major capital projects. Analysis of potential debt issuance includes
the operating impact the repayment thereof will have on citizens, property tax rates, and
enterprise fund service fee revenues. Per the City’s fiscal policies, long-term debt will
not be used for operating purposes and the life of the debt instruments will not exceed the
useful life of the projects financed. Policy also specifies that bonds with an average life
of 20 years or less will be issued to reduce net interest cost and maintain future flexibility
by paying off debt earlier. The majority of the City’s existing long-term debt was used to
finance infrastructure needs and traditional government facilities such as streets, fire
stations, libraries, and development of parks and open spaces.
The City’s fiscal policies state current expenditures will be paid with current revenues.
Deferrals, short-term loans, or one-time sources will be avoided as budget balancing
techniques. Reserves will be used for emergencies or nonrecurring expenditures, except
when balances can be reduced because their levels exceed guidelines or legally-required
minimums.
Fiscal policies provide for a General Fund reserve equal to between thirty and sixty days
of working capital. At no time shall the reserve fall below 8.3% of the General Fund
expenditure budget (i.e. 30-day level). The current reserve is maintained at 60 days
which equates to approximately 16.4% of next year’s budgeted expenditures. At the end
of the current year, the City was in compliance with this policy.
The City’s fiscal policies for the Water and Wastewater Fund require the maintenance of
a minimum reserve of 45 to 75 days of working capital. The City currently maintains a
75-day reserve. Water and Wastewater revenue bond covenants require the City to
maintain reserve amounts sufficient to cover the average annual debt service
requirements. This revenue bond reserve is in addition to the working capital required by
the City’s fiscal policies and is maintained in a separate fund. As of September 30, 2010,
the revenue bond reserve totaled just over $431,000 while the average annual debt service
on the outstanding debt was calculated at $358,575.
Standard & Poor’s Ratings Services, a division of the McGraw-Hill Companies, Inc. rates
the City’s general obligation debt and revenue debt at AA. Moody’s Investor Service,
Inc. rates the general obligation debt and water and wastewater revenue debt at Aa2 and
the sales tax revenue debt at A1. Additional information about the rating agencies or the
significance of the ratings provided may be obtained from each agency’s web site.
Major Initiatives
In line with our goal of business retention, the City reached an agreement with Redi-Mix
Concrete to construct a new regional corporate headquarters facility that allows for
vii
retention and expansion of its local operation. The City completed construction of this
facility in January 2010.
The City partnered with Tarrant County, local churches, and the business community to
renovate qualifying homes in the community through the Tarrant County Home Program
and the Euless Revitalization Program. During the fiscal year, the cities of Hurst, Euless,
and Bedford joined forces to create the Community Revitalization Program (CPR) which
assists qualifying residents in all three communities.
The City’s updated Facility Master Plan addresses the remaining facility needs of the
city. The Parks Master Plan, which focuses on improving the quality of life for the
community, includes additional hike/bike trails, park amenities and upgrades, and
additional aquatic features for citizens of every age.
The Euless Family Life Center is a major capital improvement initiative approved by the
City Council. The Euless Family Life Center is envisioned to meet many of the
recreational and leisure needs of the community in a single, centralized location. During
FY2010, the city completed several aspects of this project including renovations to the
recreation center and construction of the new fitness center. Additionally, the new Senior
Center component opened in December 2010. Upon ultimate completion, this project
will also include an indoor and outdoor aquatic facility, and general redevelopment of the
entire site.
The City is working with a developer on a major, mixed-use center located along the
southwest corner of Glade Road and Highway 121. This center will provide
approximately 1.2 million square feet of retail/office and includes a unique residential
component. The City expects the sales tax benefit from this center to be significant. In an
effort to promote development in this area, the City created a Tax Increment
Reinvestment Zone (“Zone”) for this development (Glade Parks). Creation of the Zone
allows participating taxing entities to pledge a portion of the new revenues generated
from increased value from the proposed development to the Zone to cover costs
associated with public improvements.
In an effort to promote water conservation, the Water and Wastewater fund transitioned
from a traditional flat rate water volume billing system to a tiered rate structure in Fiscal
Year 2010. Under the tiered structure, customers pay a graduated volume rate based on
varying levels of monthly water consumption. Large volume users will pay a higher
“blended” rate per thousand gallons than a low volume user.
Awards and Acknowledgements
The Government Finance Officers Association (“GFOA”) awarded a Certificate of
Achievement for Excellence in Financial Reporting to the City of Euless for its
Comprehensive Annual Financial Report (“CAFR”) for the fiscal year ended September
30, 2009. The Certificate of Achievement is a prestigious national award recognizing
conformance with the highest standards for preparation of state and local government
CITY OFFICIALS
MARY LIB SALEH, MAYOR
Tim Stinneford, Council Member — Place One
Leon Hogg, Council Member — Place Two
Linda Martin, Council Member — Place Three, Mayor Pro Tem
Donna Mickan, Council Member — Place Four
Glenn Porterfield, Council Member — Place Five
Perry Bynum, Council Member — Place Six
Gary McKamie, City Manager
Loretta Getchell, Deputy City Manager
2010-2011
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CITIZENS OF EULESS MAYOR & COUNCIL CITY MANAGER Gary McKamie CITY ATTORNEY Wayne K. Olson CITY SECRETARY Susan Crim MUNICIPAL COURT JUDGE Lacy Britten MUNICIPAL COURT OF RECORD DEPUTY CITY MANAGER Loretta Getchell DIRECTOR OF PLANNING & ECONOMIC DEV Mike Collins DIR. OF PUBLIC WORKS & ENGINEERING Ron Young AUDITOR FLEET & FACILITIES ADMINISTRATOR Kyle McAdams GENERAL MANAGER TEXAS STAR Glenda Hartsell‐Shelton IS ADMINISTRATOR Dan McLain LIBRARY ADMINISTRATOR Kate Lyon Gary L. McKamie, City Manager January 2011 Organizational Chart DIR. OF PARKS & COMMUNITY SERVICES Ray McDonald POLICE CHIEF Mike Brown INTERIM FIRE CHIEF Paul Smith COMMUNICATIONS/MARKETING MANAGER Betsy Deck ASSISTANT CITY MANAGER Chris Barker DIRECTOR OF FINANCE Vicki Rodriquez HR/RISK ADMINISTRATOR Carolyn Marshall MUNICIPAL COURT SOLID WASTE/RECYCLING FRANCHISES CONTROLLER
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THIS PAGE INTENTIONALLY BLANK
FINANCIAL SECTION
1
AN INDEPENDENT
MEMBER OF BAKER TILLY
INTERNATIONAL
WEAVER AND TIDWELL LLP
CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS
WWW.WEAVERLLP.COM
FORT WORTH
2821 W SEVENTH STREET, SUITE 700, FORT WORTH, TX 76107
P: (817) 332 7905 F: (817) 429 5936
INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor,
City Council and City Manager
City of Euless, Texas
We have audited the accompanying financial statements of the governmental activities, the
business-type activities, each major fund, and the aggregate remaining fund information of the
City of Euless, Texas (“City”) as of and for the year ended September 30, 2010, which
collectively comprise the City’s basic financial statements as listed in the table of contents.
These financial statements are the responsibility of the City’s management. Our responsibility is
to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the business-type activities, each
major fund, and the aggregate remaining fund information of the City as of September 30, 2010,
and the respective changes in financial position and cash flows, where applicable, thereof for
the year then ended in conformity with accounting principles generally accepted in the United
States of America.
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis and budgetary comparison information on pages 3
through 13 and 59 through 64 be presented to supplement the basic financial statements. Such
information, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board, who considers it to be an essential part of financial
reporting for placing the basic financial statements in an appropriate operational, economic, or
historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of
America, which consisted of inquiries of management about the methods of preparing the
information and comparing the information for consistency with management’s responses to our
inquiries, the basic financial statements, and other knowledge we obtained during our audit of
the basic financial statements. W e do not express an opinion or provide any assurance on the
information because the limited procedures do not provide us with sufficient evidence to express
an opinion or provide any assurance.
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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 individual nonmajor fund financial statements, schedules and statistical tables 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
have been subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole. The introductory section and statistical tables have not
been subjected to the auditing procedures applied in the audit of the basic financial statements
and, accordingly, we express no opinion on them.
WEAVER AND TIDWELL, L.L.P.
Fort W orth, Texas
January 24, 2011
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CITY OF EULESS, TEXAS
Management’s Discussion and Analysis
For the Year Ended September 30, 2010
(Unaudited)
Management of the City of Euless offers the readers of the City’s financial statements this
narrative overview and analysis of the financial activities and financial position of the City for
the fiscal year ended September 30, 2010. In the broadest context, the financial well being of a
government lies in the underlying wealth and willingness of its citizens and property owners to
pay adequate taxes combined with the vision of the government’s elected and appointed
leadership to spend those taxes strategically so that the city’s tax base, service levels, city assets,
and the city’s desirability will be maintained not just for the current year but well into the future.
Financial reporting is limited in its ability to provide the “big picture” but rather focuses on
financial position and changes in financial position. In other words, are revenues and/or
expenditures higher or lower than the previous year? Have net assets (containing both short-term
and long-term assets and liabilities) or fund balances (the current “spendable” assets less current
liabilities) of the government been maintained? Readers are encouraged to consider the
information presented here in conjunction with the additional information furnished in the letter
of transmittal (pages i-viii of this report) and the statistical section (pages 87-106 of this report)
as well as information in the annual budget and the capital improvement plan along with other
community information found on the city’s website at www.eulesstx.gov. It should be noted that
the Independent Auditor’s Report describes the auditors’ association with the various sections of
this report and that all of the additional information from the website and other city sources are
unaudited.
Financial Highlights
• The assets of the City of Euless exceeded its liabilities at the close of the most recent fiscal
year by $170,868,337 (Net assets). This number must be viewed in the context that the vast
majority of the City’s net assets of $127,133,720 (74%) are capital assets net of related debt
and that most capital assets in government do not directly generate revenue nor can they be
sold to generate liquid capital. Those net assets restricted for specific purposes totaled
$4,813,446 (3%). The remaining $38,921,171 (23%) are unrestricted net assets and may be
used to meet the government’s ongoing obligations to citizens and creditors in accordance
with the City’s fund designation and fiscal policies.
• Governmental activities realized an increase in total net assets of $2,152,247 and business-
type activities realized an increase in total net assets of $230,321 bringing the total increase
in net assets for the city to $2,382,568.
• At the close of the current fiscal year, the City of Euless’ governmental funds reported
combined ending fund balances of $24,272,466 which represents a decrease of $3,853,808 in
comparison with the prior year. Within this total, $1,622,584 is reserved for debt service;
$7,633,329 is restricted by bond covenant or designated by management or council to be
used for capital expenses; $114,492 is reserved for inventories and prepaids; and $1,902,893
in the special revenue funds includes grant and other spending restrictions. The unreserved
fund balance in the General Fund is $7,121,683 and the Car Rental Tax Fund is $5,877,485
both of which can be used for any lawful purpose. The General Fund unreserved balance
represents 25% of fiscal year 2010 total fund expenditures.
4
• The City’s total capital assets (net of accumulated depreciation) increased by $3,189,282
which is primarily attributed to the construction or acquisition of land, infrastructure,
equipment, and construction in progress.
• The City’s bonds payable decreased by $4,245,000 or 7.4%, due to the scheduled repayment
of principal on outstanding bonded debt combined with a refunding issue for the Star Centre
Debt which included a cash payment of more than $500,000. Other than the refunding debt,
the City did not issue an y new bonded debt during the fiscal year.
OVERVIEW OF THE FINANCIAL STATEMENTS
The discussion and analysis are intended to serve as an introduction to the City of Euless’ basic
financial statements which are comprised of three components: 1) government-wide financial
statements, 2) fund financial statements, and 3) notes to the financial statements. This report also
contains other required supplementary information in addition to the basic financial statements
themselves.
Government-wide Financial Statements. The government-wide financial statements are
designed to provide readers with a broad overview of the City of Euless’ finances, in a manner
similar to a private-sector business.
The statement of net assets presents information on all of the City of Euless’ assets and
liabilities, with the difference between the two reported as net assets. Over time, increases or
decreases in net assets may serve as a useful indicator of whether the financial position of the
City of Euless is improving or deteriorating.
The statement of activities presents information showing how the City’s net assets changed
during the fiscal year. All changes in net assets are reported as soon as the underlying event
giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues
and expenses are reported in this statement for some items that will only result in cash receipts
and cash outlays in future fiscal periods (e.g., uncollected taxes and earned but unused
compensated absences).
Both of the government-wide financial statements distinguish between functions of the City that
are principally supported by taxes and intergovernmental revenues (governmental activities)
from other functions that are intended to recover all or a significant portion of their costs through
user fees and charges (business-type activities). The governmental activities of the City include
general government and administration, public safety, highways and streets, development, and
culture and recreation. The business-type activities of the City include water and wastewater
system, drainage system, golf course, and other recreational activities.
The government-wide financial statements include not only the City of Euless (the primary
government), but also the Euless Development Corporation and the Crime Control and
Prevention District, which are legally separate entities that are financially accountable to the
City. A blended presentation has been used to report the financial information of these
component units.
The government-wide financial statements can be found on pages 14-15 of this report.
5
Fund Financial Statements. A fund is a self-balancing set of accounts that is used to maintain
control over resources that have been segregated for specific activities or objectives. The City of
Euless, like other state and local governments, uses fund accounting to ensure and demonstrate
compliance with finance-related legal requirements. All of the funds of the City can be divided
into three categories: governmental funds, proprietary funds, and fiduciary funds.
Governmental Funds. Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government-wide financial statements with
the exclusion of internal service fund activity. However, unlike the government-wide financial
statements, governmental fund financial statements focus on near-term inflows and outflows of
spendable resources, as well as on balances of spendable resources available at the end of the
fiscal year. Such information may be useful in evaluating a government’s near-term financing
requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements.
By doing so, the reader may better understand the long-term impact of the government’s near-
term financing decisions. Both the governmental fund balance sheet and the governmental fund
statement of revenues, expenditures, and changes in fund balances provide a reconciliation to
facilitate this comparison between governmental funds and governmental activities.
The City maintains 18 individual governmental funds. Information is presented separately in the
governmental funds balance sheet and in the governmental funds statement of revenues,
expenditures, and changes in fund balances for the General, Debt Service, Street CIP, and Car
Rental Tax funds, all of which are considered to be major funds. Data from the other 14
governmental funds are combined into a single, aggregate presentation. Individual fund data for
each of these non-major governmental funds is provided in the form of combining statements
elsewhere in this report.
The City adopts an annual appropriated budget for its General Fund and Car Rental Tax fund. A
budgetary comparison statement has been provided for each fund to demonstrate compliance
with this budget.
The basic governmental fund financial statements can be found on pages 16-19 of this report.
Proprietary Funds. The City maintains two different types of proprietary funds. Enterprise
funds are used to report the same functions presented as business-type activities in the
government-wide financial statements. The City uses enterprise funds to account for its water
and wastewater, drainage utility, and golf operations, as well as several other recreational
activities. Internal service funds are an accounting device used to accumulate and allocate costs
internally among the City’s various functions. The City uses internal service funds to account
for its equipment replacement, risk management, and health insurance services. Because these
services predominately benefit governmental rather than business-type functions, a portion of the
activities in these funds is included within governmental activities in the government-wide
financial statements.
6
Proprietary funds provide the same type of information as the government-wide financial
statements, only in more detail. The proprietary fund financial statements provide separate
information for Water and Wastewater, Drainage Utility, and Golf, all of which are considered to
be major funds of the city. Data from the other recreational activities are combined into a single,
aggregate presentation. Individual data for each of these non-major enterprise funds is provided
in the form of combining statements elsewhere in this report. The internal service funds are
combined into a single, aggregate presentation in the proprietary fund financial statements.
Individual data for the internal service funds is provided in the form of combining statements
elsewhere in this report.
The basic proprietary fund financial statements can be found on pages 20-24 of this report.
Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of
parties outside the government. Fiduciary funds are not reflected in the government-wide
financial statements because the resources of those funds are not available to support the City’s
own programs. The accounting used for fiduciary funds is much like that used for proprietary
funds.
The basic fiduciary fund financial statements can be found on pages 25 and 26 of this report.
Notes to the Financial Statements. The notes provide additional information that is essential to
a full understanding of the data provided in the government-wide and fund financial statements.
The notes to the financial statements can be found on pages 27-58 of this report.
Other Information. In addition to the basic financial statements and accompanying notes, this
report also presents certain required supplementary information concerning the City’s progress in
funding its obligation to provide pension benefits to its employees. Additionally, schedules
comparing budgetary figures and actual results of the General Fund and the Car Rental Tax Fund
are also located in this section of the report. Required supplementary information can be found
on page 59-64 of this report.
The combining statements referred to earlier in connection with non-major governmental funds,
non-major proprietary funds, and internal service funds are presented immediately following the
required supplementary information on pensions and budgetary comparisons. Combining and
individual fund statements and schedules can be found on pages 67-86 of this report.
Government-Wide Financial Statement Analysis
As noted earlier, net assets and especially net assets by category may serve over time as a useful
indicator of a government’s financial position. In the case of the City of Euless, assets exceeded
liabilities by $170,868,337 as of September 30, 2010.
The largest portion of the City’s net assets (74%) reflects its investment in capital assets (i.e.,
land, building, equipment, improvements, construction in progress, and infrastructure), less any
debt used to acquire those assets that is still outstanding. The City uses these capital assets to
provide services to citizens; consequently these assets are not available for future spending and
with exception of business-type assets, do not generate direct revenue for the city. They do
represent, however, an obligation on the part of the city to maintain these assets into the future.
Although the City’s investment in its capital assets is reported net of related debt, it should be
noted that the resources needed to repay this debt must be provided from other sources, since the
capital assets themselves cannot be used to liquidate these liabilities.
7
An additional portion of the City’s net assets (3%) represents resources that are subject to
external restrictions on how they may be used. The remaining balance of unrestricted net assets
of $38,921,171 (23%) may be used to meet the City’s ongoing obligations to citizens, creditors,
and employees.
Net Assets
Governmental Business-type
A mounts s h o wn in 000's activities activities Tota l
2010 2009 2010 2009 2010 2009
Current and other a ssets 41,167$ 45,118$ 21,209$ 20,690$ 62,376$ 65,808$
Capital asse ts 112,286 108,197 65,011 65,910 177,296 174,107
Total asse ts 153,453 153,315 86,220 86,600 239,673 239,915
Long-term lia bilities 37,439 41,031 11,640 12,063 49,079 53,094
Othe r lia bilities 15,889 14,311 3,837 4,024 19,726 18,335
Total liabilities 53,328 55,342 15,477 16,087 68,805 71,429
Ne t a ssets:
Invested in c a pital asse ts,
net of debt 73,816 66,242 53,318 53,569 127,134 119,811
Restricted 1,376 1,846 3,437 3,964 4,813 5,810
Unrestricted 24,933 29,885 13,988 12,980 38,921 42,865
Total net assets 100,125$ 97,973$ 70,743$ 70,513$ 170,868$ 168,486$
As of September 30, 2010, the City reports positive balances in all three categories of net assets,
for the government as a whole, as well as for its separate governmental and business-type
activities. The same situation held true for fiscal year 2009.
The City’s total net assets increased $2,382,568 during the current fiscal year. This increase is
primarily attributed to the change in capital assets net of related debt. Capital assets include
land, buildings, and infrastructure assets.
8
Changes in Net Assets
Governme nta l Business-type
A mount s s h o wn in 000's Activities Ac tivitie s Tota ls
2010 2009 2010 2009 2010 2009
REVENUES
Pro gram re v e nue s :
Fees, fines a nd charges
for se rvic e s 6,711$ 8,985$ 25,230$ 22,844$ 31,941$ 31,829$
Operating grants a nd
contributions 511 487 - - 511 487
Ca pita l grants and
contributions 602 268 26 1,706 628 1,974
Ge ne ral re v e nue s :- -
P roperty taxes 12,306 12,685 - - 12,306 12,685
Sales taxes 12,338 12,602 - - 12,338 12,602
Other taxes 15,757 15,969 - - 15,757 15,969
Investment income 293 863 88 254 381 1,117
Gain (loss) on asset
disposal 117 38 4 - 121 38
Miscellaneous 104 11 - 22 104 33
Total revenues 48,739 51,908 25,348 24,826 74,087 76,734
EXPENSES
Culture and re c reation 5,004 4,893 - - 5,004 4,893
Developme nt se rvices 1,693 1,707 - - 1,693 1,707
General governme nt 14,572 17,267 - - 14,572 17,267
Highways and streets 2,663 2,057 - - 2,663 2,057
P ublic safety 21,417 19,379 - - 21,417 19,379
Interest on long-term
debt 1,885 2,377 - - 1,885 2,377
Water and wastewater - - 17,036 15,624 17,036 15,624
Drainage utility - - 1,107 948 1,107 948
Golf course - - 4,461 4,691 4,461 4,691
Recreational
enterprises - - 1,867 2,016 1,867 2,016
Total expenses 47,234 47,680 24,471 23,279 71,705 70,959
Increase (decrease) in
net assets before
transfers 1,505 4,228 877 1,547 2,382 5,775
Transfers 647 90 (647) (90) - -
Increase (decrease) in
net assets 2,152 4,318 230 1,457 2,382 5,775
Net assets, beginning 97,973 93,655 70,513 69,056 168,486 162,711
Net assets, ending 100,125$ 97,973$ 70,743$ 70,513$ 170,868$ 168,486$
Governmental Activities. Governmental activities increased the City’s net assets by $2,152,247
thereby accounting for 90% of the total growth in net assets. Although revenues fell short of
projections, sound fiscal management, departmental budget cuts, reduced rebate and utility
payments, and limited capital purchases, allowed the city to realize an increase in net assets
9
before transfers of $1,504,784. Total revenue for the governmental activities (excluding
transfers from business-type activities) decreased from the previous year by $3,169,672. General
Revenue, which is primarily made up of property taxes, sales taxes, and car rental taxes had a net
decrease of $1,254,038. Property tax revenue declined due to an overall decrease in both the
residential and commercial tax base. Sales tax collections also declined due to an overall decline
in the local economy, specifically during the first half of the fiscal year. Additionally, program
revenues, which consist primarily of fines, fees, and charges for services declined $1,915,634.
The net assets of general governmental operations account for 59% of total net assets.
Business-type Activities. Business-type activities increased the City’s net assets by $230,321
accounting for 10% of the total growth in net assets. Total revenue for the business-type
activities increased from the previous year by $522,082 due in part to an increase in water and
wastewater rates. Additionally, as stated in the governmental activities, sound fiscal
management, departmental budget cuts, and limited capital purchases resulted in an increase in
net assets by $230,321. Net assets for business-type activities represent 41% of total net assets.
Expenses and Program Revenues
Governmental Activities Business-Type Activities
Financial Analysis of the City’s Funds
As noted earlier, the City 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, unreserved fund balance may serve as
a useful measure of a City’s net resources available for spending at the end of the fiscal year.
At the end of the current fiscal year, the City of Euless’ governmental funds reported combined
ending fund balances of $24,272,466, a decrease of $3,853,808 in comparison with prior year.
10
Of which, approximately 85% or $20.7 million constitutes unreserved fund balance that is
available for spending at the city’s discretion. This portion includes both designated and
undesignated fund balance. The remainder is reserved to indicate that it is not available for new
spending because it has already been committed 1) to pay debt service ($1,622,584); 2) to pay
for specific capital improvements per developer agreements ($1,454,496); and 3) for a variety of
other restricted purposes ($501,998).
In the General Fund, the City budgeted for a decrease in fund balance (planned reduction) of
$1,742,794. Due to a positive budget variance in overall expenditures, the General Fund ended
the year with a reduction of only $29,399 which is a positive budget variance of $1,713,395
resulting primarily from departmental expenditure cuts and personnel savings. Additionally, an
increase in the life expectancy of the City’s fleet accounts for a decline of $308,000 in
departmental contributions for vehicle replacement. A decline in mowing expenditures due to a
reduction in mowing frequency resulted in savings of more than $25,000. Rebate incentive
payments resulted in budget savings of just over $400,000 and capital expenditures including
street overlay, lighting, and sidewalks realized budgetary savings of nearly $168,000. One-time
expenditures were $690,000 under budget as a result of temporarily delaying purchases and
improvements.
The Debt Service fund balance decreased $365,198 which is $30,000 less than the anticipated
drawdown of $395,000. Street CIP fund balance decreased $236,587 due to infrastructure
improvements on several major thoroughfares. The Car Rental Tax fund balance was budgeted
to increase $1,731,913, but instead ended the year with an increase of $1,642,065 due mainly to
a reduction in revenues resulting from a depressed travel industry for most of the year. The non-
major governmental funds realized a combined decrease in fund balance of $4,864,689 primarily
resulting from current year capital project expenditures. The combined net effect of these
changes in governmental fund balances totals $3,853,808.
Proprietary Funds. The City’s proprietary fund statements provide the same type of
information found in the government-wide financial statements for business-type activities, but
in more detail.
Unrestricted net assets of the proprietary funds at the close of the fiscal year are: Water and
Wastewater fund $7,844,901; Drainage Utility fund $1,297,188; Golf Course fund $1,451,242;
and all other non-major recreation enterprise funds combined $1,590,356. The Water and
Wastewater fund increase in unrestricted net assets is due to a reduction in the carrying value of
capital assets combined with a reduction in the amounts restricted for impact fees. The Drainage
Utility fund experienced a decrease in unrestricted net assets primarily resulting from a planned
drawdown of $200,000 combined with additional salary and benefit allocations to this fund.
Unrestricted net assets for the Golf Course fund and all other non-major recreation enterprise
funds increased $1,089,087 and $85,306, respectively. The Golf Course increase is primarily
attributable to the collection of gas leases and gas royalties.
Capital Asset and Debt Administration
Capital Assets. The City’s investment in capital assets for its governmental and business-type
activities as of September 30, 2010, totaled $177,296,807 (net of accumulated depreciation).
The investment in capital assets includes land, buildings, improvements, machinery and
equipment, infrastructure, and construction in progress. The net increase in the City’s
investment in capital assets for the current fiscal year was $3,189,282 or 1.8%.
11
Major capital asset events occurring during the current fiscal year included the following:
• Capital contributions for the year consisted of $400,050 in Community Development Block
Grant contributions for the Senior Center project, citizen donations of real property valued at
$75,641, and developer contributions of $26,400 in water infrastructure.
• The Redi-Mix Regional Headquarters facility located on North Main Street was completed at
a cost of $4,928,321 including the initial land purchase.
• The renovation and expansion of the recreation center were also completed during the year.
The facility was renamed the Euless Family Life Center.
• Miscellaneous drainage improvements, street overlay, and park projects located throughout
the city were also completed at a total cost of $1,083,315.
• Construction-in-progress additions related to general government operations of $3,642,271
primarily consisted of Fuller Wiser Connector ($214,068), Baze Road Design ($120,812),
Ash Lane Design ($88,894), Senior Center ($3,016,411), and the 2010 County Overlay
project ($187,606).
• Capital asset additions for governmental operations include, but are not limited to, audio
visual equipment at Municipal Court, a boiler system for the Library, copiers for Municipal
Court and Administration Offices, fitness equipment at the Euless Family Life Center, new
police dispatch consoles, and a brush chipper for Parks.
• Construction-in-progress additions related to business-type operations totaled $1,743,626 and
consisted primarily of wastewater line replacements of $605,275, the effluent water main for
$617,880, and drainage infrastructure improvements at a cost of $516,571.
• Completion of the water well rehab and disinfection project was completed at a cost of
$522,308 and the West Mills wastewater line replacement CDBG project was also completed
at a total cost of $46,855.
• Capital asset additions for business operations include, but are not limited to, purchases of a
sewer camera inspection system installed in a new cargo van and new golf carts for Texas
Star Golf Course.
Capital Assets (Net of Accumulated Depreciation)
Amount s shown in 000s activities a ctivities Tota l
2010 2009 2010 2009 2010 2009
Land 26,212$ 26,137$ 3,334$ 3,121$ 29,546$ 29,258$
Buildings 37,900 32,956 2,538 2,662 40,438 35,618
Other improve ments 2,580 2,551 10,761 11,367 13,341 13,918
M&E 4,822 4,687 455 591 5,277 5,278
Infrastructure 36,898 38,271 46,021 47,494 82,919 85,765
Construction in
P rogre ss 3,874 3,595 1,902 675 5,776 4,270
Total 112,286$ 108,197$ 65,011$ 65,910$ 177,297$ 174,107$
Business-typeGovernmental
Additional information on the City’s capital assets can be found in Note 3 on pages 38-39 of this
report.
12
Long-term Debt. At the end of the current fiscal year, the City had total bonded debt
outstanding of $51,410,581. Of this amount, $43,227,906 comprises debt backed by the full
faith and credit of the government. The remainder of the City’s debt, $8,182,675, represents
bonds secured solely by specific revenue sources (i.e. revenue bonds).
Outstanding Debt
Governmental Business-Type
A mo u n t s s h o wn in 000s activities activities Total
2010 2009 2010 2009 2010 2009
GO Bonds 30,765$ 24,350$ 9,160 9,640 39,925 33,990
COs 4,910 13,910 - - 4,910 13,910
GO/CO De ferred Loss (945) (887) (662) (705) (1,607) (1,592)
Revenue Bonds 4,470 5,185 3,850 4,315 8,320 9,500
Revenue De ferre d Loss (52) (56) (86) (94) (138) (150)
Tota ls 39,148$ 42,502$ 12,262 13,156 51,410 55,658
On August 15, 2010, the City issued $8.11 million in General Obligation Refunding Bonds to
advance refund $8.3 million of outstanding 2000 Series Certificates of Obligation. The City’s
total debt decreased $4,245,000 or 7.4% during fiscal year 2010. This decrease is attributed to
scheduled annual principal payments combined with a cash contribution in excess of $500,000
on this bond refunding. Standard & Poor’s Ratings Services, a division of the McGraw-Hill
Companies, Inc. rates the City’s general obligation debt and revenue debt at AA. Moody’s
Investor Service, Inc. rates the general obligation debt and the water and wastewater revenue
debt at Aa2 and the sales tax revenue debt at A1. Additional information on the City’s long-term
debt can be found in Note 4 on pages 40-46.
Economic Factors and Next Year’s Budgets and Rates
In the FY2010-11 budget, General Fund revenues and transfers are budgeted to increase by 3%
from the 2009-10 budget year with property taxes accounting for 29% of budgeted revenues and
sales tax comprising approximately 27% of budgeted revenues. Certified assessed valuations as
of September 1, 2010, decreased 2.1% from the preceding year.
As of September 30, 2010, the City’s unemployment rate is 7.2% compared to the State of
Texas, which is 7.9%. In the FY2010-11 budget, sales tax receipts are projected to increase 5%
over prior year estimates. The car rental tax receipts are projected to increase by 4.5% over
FY2010 actual collections.
Baseline budgeted expenditures in the General Fund are projected to decrease approximately 1%
from the FY2009-10 original budget. This decrease is primarily attributed to personnel savings
and departmental budget cuts. The City elected to use excess reserves in various funds, to cash
flow capital programs including city computer and technology upgrades, document imaging
system, self-check unit at the Library, replacement of point of sale system at the golf course, and
various other equipment purchases. In addition, continued funding is provided for the City’s
contribution to the Tarrant County Home Program, community revitalization, and street overlay.
The property tax rate remained at .4700¢ per $100 of assessed valuation for FY2010-11.
13
For the Water and Wastewater Fund, the FY2010-11 budget includes the continuation of the
tiered rate structure for water volume billing. Under the tiered structure, customers pay a
graduated volume rate based on varying levels of monthly water consumption. Monthly water
base rates increased to $7.95 per month for residential customers and variable commercial
customer base rates increased by 2.58%. The wastewater base rate increased to $6.75 per month
for all customer classes. A wastewater volume charge of $2.66 per 1000 gallons applies to all
customer classes. Residential wastewater volume charges are capped at a maximum of 12,000
gallons per month. The City budgeted to continue its pay-as-you-go capital program in the
Water and Wastewater CIP Fund which includes approximately $860,000 for wastewater line
replacements.
The Texas Star Golf Course revenues are anticipated to increase 3.7% over prior year revenues.
Texas Star has experienced some decline in the number of rounds played annually and in pro
shop merchandise sales which is consistent with the overall industry decline related to economic
conditions. Raven’s Grille and the Conference Centre continue to perform well with increases in
sales and bookings.
Request for Information
The financial report is designed to provide citizens, customers, investors, and creditors with a
general overview of the City’s finances. If you have questions about this report or need
additional information, contact the Finance Department, Attn: Vicki Rodriquez, Director of
Finance, at 201 N. Ector Drive, Euless, Texas 76039, call (817) 685-1626, or e-mail
vrodriquez@eulesstx.gov.
CITY OF EULESS, TEXAS
GOVERNMENT–WIDE STATEMENT OF NET ASSETS
SEPTEMBER 30, 2010
The Notes to the Basic Financial Statements
are an integral part of these statements.
14
Primary Government
Governmental Business-type
Activities Activities Total
Deposits and investments 35,739,734$ 12,170,809$ 47,910,543$
Receivables net of allowances for
uncollectibles 6,286,146 3,220,808 9,506,954
Internal balances (1,804,043) 1,804,043 -
Inventories, at cost 12,761 256,755 269,516
Prepaid items 132,272 28,827 161,099
Restricted assets
Deposits and investments - 3,437,496 3,437,496
Deferred charges 302,701 168,021 470,722
Net OPEB asset 497,427 122,481 619,908
Capital assets
Land and construction in progress 30,085,218 5,236,105 35,321,323
Other capital assets, net of
accumulated depreciation 82,200,587 59,774,897 141,975,484
Total assets and other debits 153,452,803 86,220,242 239,673,045
Accounts payable 9,917,114 1,113,745 11,030,859
Accrued liabilities 780,846 119,193 900,039
Accrued interest payable 220,138 79,030 299,168
Deferred revenue - 49,792 49,792
Money held in escrow - 1,473,077 1,473,077
Noncurrent liabilities
Due within one year 4,963,752 1,002,227 5,965,979
Due in more than one year 37,446,056 11,639,738 49,085,794
Total liabilities 53,327,906 15,476,802 68,804,708
Invested in capital assets, net of
related debt 73,815,506 53,318,214 127,133,720
Restricted for
Debt service 1,375,950 438,340 1,814,290
Impact fees - 2,999,156 2,999,156
Unrestricted 24,933,441 13,987,730 38,921,171
Total net assets 100,124,897$ 70,743,440$ 170,868,337$
ASSETS
LIABILITIES AND NET ASSETS
LIABILITIES
NET ASSETS
CITY OF EULESS, TEXAS GOVERNMENT–WIDE STATEMENT OF ACTIVITIES YEAR ENDED SEPTEMBER 30, 2010 The Notes to the Basic Financial Statements are an integral part of these statements. Primary GovernmentFees, Fines Operating Capital Business - and ChargesGrants andGrants andGovernmentalTypeProgram ActivitiesExpensesfor ServicesContributionsContributionsActivitiesActivitiesTotalPrimary governmentGovernmental activitiesCulture and recreation5,004,580$ 66,368$ 504$ 278,616$ (4,659,092)$ -$ (4,659,092)$ Development services1,692,845751,323 - - (941,522) - (941,522) General and administrative14,571,6001,548,497 23,405 - (12,999,698) - (12,999,698) Highways and streets2,662,949- - 323,756 (2,339,193) - (2,339,193) Public safety21,416,9664,345,101 487,184 - (16,584,681) - (16,584,681) Interest on long-term debt1,885,177- - - (1,885,177) - (1,885,177) Total governmental activities47,234,117 6,711,289 511,093 602,372 (39,409,363) - (39,409,363) Business-type activitiesWater & wastewater17,035,520 17,321,670 - 26,400 - 312,550 312,550 Drainage utility1,107,206 691,800 - - - (415,406) (415,406) Golf4,460,627 5,279,259 - - - 818,632 818,632 Other recreation enterprises1,866,786 1,937,416 - - - 70,630 70,630 Total business-type activities24,470,139 25,230,145 - 26,400 - 786,406 786,406 Total primary government71,704,256$ 31,941,434$ 511,093$ 628,772$ (39,409,363)$ 786,406$ (38,622,957)$ GENERAL REVENUESTaxesProperty taxes, levied for general purposes12,306,387$ -$ 12,306,387$ Sales taxes12,337,598- 12,337,598 Car rental taxes11,480,736- 11,480,736 Mixed beverage taxes71,653- 71,653 Hotel/motel occupancy taxes237,429- 237,429 Gross receipts taxes3,967,036- 3,967,036 Investment income292,761 87,799 380,560 Gain/(loss) on sale of assets116,978 3,579 120,557 Miscellaneous103,569 - 103,569 Transfers647,463 (647,463) - Total general revenues and transfers41,561,610 (556,085) 41,005,525 Change in net assets2,152,247 230,321 2,382,568 NET ASSETS, beginning of year97,972,650 70,513,119 168,485,769 NET ASSETS, end of year100,124,897$ 70,743,440$ 170,868,337$ Net (Expense) Revenue andChanges in Net AssetsProgram Revenues15
CITY OF EULESS, TEXAS
BALANCE SHEET – GOVERNMENTAL FUNDS
SEPTEMBER 30, 2010
The Notes to the Basic Financial Statements
are an integral part of these statements.
16
Debt Streets Car Other Total
General Service CIP Rental Tax Governmental Governmental
Fund Fund Fund Fund Funds Funds
Deposits and investments 7,821,187$ 697,316$ 1,829,374$ 10,838,651$ 8,278,649$ 29,465,177$
Receivables
Property taxes 393,062 167,091 - - - 560,153
Accounts receivable and unbilled revenue 1,141,028 - - 1,963,305 187,127 3,291,460
Accrued interest receivable 11,234 - 1,600 17,479 20,449 50,762
Due from other governments 1,387,901 - - - 865,208 2,253,109
Prepaids and deposits 95,299 - - - 6,432 101,731
Inventories, at cost 12,761 - - - - 12,761
Total assets 10,862,472$ 864,407$ 1,830,974$ 12,819,435$ 9,357,865$ 35,735,153$
Liabilities
Accounts payable 1,328,143$ 16,704$ 43,489$ 6,941,950$ 937,697$ 9,267,983$
Accrued salaries and wages 718,180 - - - 60,162 778,342
Deferred revenue 1,201,690 164,117 - - 50,555 1,416,362
Total liabilities 3,248,013 180,821 43,489 6,941,950 1,048,414 11,462,687
Fund Balances
Reserved for
Debt service - 683,586 - - 938,998 1,622,584
Court technology 290,611 - - - - 290,611
Development agreements - - - - 1,454,496 1,454,496
Betterment 30,733 - - - - 30,733
Injured animals 9,009 - - - - 9,009
Historical preservation - - - - 1,245 1,245
9-1-1 emergency system 22,805 - - - - 22,805
Technology 13,652 - - - - 13,652
Library remodel 4,655 - - - - 4,655
Victim assistance 2,477 - - - - 2,477
Radio rebanding 10,774 - - - - 10,774
Prepaids and inventories 108,060 - - - 6,432 114,492
Unreserved
Designated for
Contingency 500,000 - - - - 500,000
Emergency 500,000 - - - - 500,000
Undesignated, reported in
General fund 6,121,683 - - - - 6,121,683
Special revenue funds - - - 5,877,485 1,902,893 7,780,378
Capital projects funds - - 1,787,485 - 4,005,387 5,792,872
Total fund balances 7,614,459 683,586 1,787,485 5,877,485 8,309,451 24,272,466
Total liabilities and fund balances 10,862,472$ 864,407$ 1,830,974$ 12,819,435$ 9,357,865$ 35,735,153$
ASSETS
LIABILITIES AND FUND BALANCES
CITY OF EULESS, TEXAS
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO THE STATEMENT OF NET ASSETS
SEPTEMBER 30, 2010
The Notes to the Basic Financial Statements
are an integral part of these statements.
17
Total fund balances - governmental funds 24,272,466$
Capital assets of governmental funds are not current financial
resources and therefore are not reported in the governmental
funds balance sheet. 109,448,614
Costs associated with the issuance of governmental long-term
debt are expensed when incurred in the fund statements and
capitalized and amortized over the life of the debt in the
government-wide financial statements.302,701
Interest payable on long-term debt does not require current
financial resources,therefore interest payable is not reported as a
liability in the governmental funds balance sheet.(220,138)
Internal service funds are used by management to charge the cost
of certain activities,such as insurance and fleet management,to
individual funds.The assets and liabilities of the internal service
funds are net of the amount allocated to business-type activities.6,810,257
Revenues earned but not available within sixty days of the year
end are not recognized as revenue on the fund financial
statements.1,416,362
Long-term liabilities,including bonds payable,compensated
absences,and pension and other post employment benefit
obligations (assets)are not due and payable in the current period
and therefore are not reported in the fund financial statements.(41,905,365)
Net assets of governmental activities 100,124,897$
Amounts reported for governmental activities in the statement of net
assets are different because:
CITY OF EULESS, TEXAS
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES – GOVERNMENTAL FUNDS
YEAR ENDED SEPTEMBER 30, 2010
The Notes to the Basic Financial Statements
are an integral part of these statements.
18
Debt Streets Car Other Total
General Service CIP Rental Tax Governmental Governmental
Fund Fund Fund Fund Funds Funds
Revenues
General property tax 9,422,860$ 2,854,597$ -$ - $ - $ 12,277,457$
Gross receipts tax 4,038,681 - - - 237,429 4,276,110
General sales tax 7,787,954 - - - 4,549,644 12,337,598
Car rental tax - - - 11,480,736 - 11,480,736
Fines and fees 4,336,063 - - - - 4,336,063
Licenses and permits 719,918 - - - - 719,918
Investment income 113,660 2,984 8,890 60,851 66,917 253,302
DEA revenues - - - - 15,350 15,350
Intergovernmental 376,512 - - - - 376,512
Rents and royalties - 1,477,805 - - 142,405 1,620,210
Other revenues 498,999 - - - 479,180 978,179
Total revenues 27,294,647 4,335,386 8,890 11,541,587 5,490,925 48,671,435
Expenditures
Current
Culture and recreation 2,498,043 - - - 1,622,392 4,120,435
Development services 1,020,319 - - - 231,387 1,251,706
General and administrative 6,966,698 - - 7,631,435 198,341 14,796,474
Highways and streets 610,996 - - - - 610,996
Public safety 17,133,807 - - - 1,877,856 19,011,663
Debt service
Principal - 2,395,000 - - 715,000 3,110,000
Interest and fiscal charges - 2,072,142 - - 211,928 2,284,070
Capital outlay - - 823,477 - 6,042,325 6,865,802
Total expenditures 28,229,863 4,467,142 823,477 7,631,435 10,899,229 52,051,146
Excess (deficiency) of
revenues over expenditures (935,216) (131,756) (814,587) 3,910,152 (5,408,304) (3,379,711)
Other financing sources (uses)
Proceeds from bond refunding - 8,110,000 - - - 8,110,000
Discount on bonds - (94,828) - - - (94,828)
Payment to escrow agent - (8,443,763) - - - (8,443,763)
Transfers in 1,614,599 195,149 578,000 - 983,994 3,371,742
Transfers out (708,782) - - (2,268,087) (440,379)(3,417,248)
Total other financing sources (uses), net 905,817 (233,442) 578,000 (2,268,087) 543,615 (474,097)
Net change in fund balances (29,399) (365,198) (236,587) 1,642,065 (4,864,689) (3,853,808)
Fund balances, beginning of year 7,643,858 1,048,784 2,024,072 4,235,420 13,174,140 28,126,274
Fund balances, end of year 7,614,459$ 683,586$ 1,787,485$ 5,877,485$ 8,309,451$ 24,272,466$
CITY OF EULESS, TEXAS
RECONCILIATION OF THE STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES OF
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
YEAR ENDED SEPTEMBER 30, 2010
The Notes to the Basic Financial Statements
are an integral part of these statements.
19
Net change in fund balances - total governmental funds (3,853,808)$
Governmental funds report capital outlays as expenditures.However,in
the statement of activities the cost of those assets is allocated over the
estimated useful lives and reported as depreciation expense.In addition,
governmental funds report cash proceeds from the disposal of capital
assets as revenues,while only the net gain/loss on the transaction is
reported in the statement of activities.This is the amount of capital
expenditures and disposals recorded in the current period.7,870,084
Depreciation expense on capital assets is reported in the statement of
activities but does not require the use of current financial resources.
Therefore,depreciation expenses are not reported as expenditures in the
governmental funds.(3,662,297)
The issuance of long-term debt (e.g.bonds)provides current financial
resources to governmental funds,while the repayment of the principal of
long-term debt consumes the current financial resources of governmental
funds.Neither transaction,however,has any effect on net assets.Also,
governmental funds report the effect of issuance costs,premiums,
discounts,and similar items when debt is first issued,whereas the
amounts are deferred and amortized in the statement of activities.This
amount is the net effect of these differences in the treatment of long-term
debt and related items.3,839,797
Current year changes in the long-term liabilites for compensated absences
and pension and other post employment obligations do not require the use
of current financial resources;therefore,they are not reported as
expenditures in governmental funds.(969,529)
Current year changes in accrued interest payables do not require the use
of current financial resources;therefore,they are not reported as
expenditures in governmental funds.97,687
Internal service funds are used by management to charge the costs of
certain activities,such as insurance and fleet management,to individual
funds.The net revenue of the internal service funds is reported with
governmental activities net of the amount allocated to business-type
activities.(1,036,669)
Certain revenues in the government-wide statement of activities that do not
provide current financial resources are not reported as revenue in the
governmental funds.(133,018)
Change in net assets of governmental activities 2,152,247$
Amounts reported for governmental activities in the statement of activities are
different because:
CITY OF EULESS, TEXAS
STATEMENT OF NET ASSETS – PROPRIETARY FUNDS
SEPTEMBER 30, 2010
(1 of 2)
The Notes to the Basic Financial Statements
are an integral part of these statements.
20
Governmental
Activities -
Other Total Internal
Water and Drainage Golf Enterprise Enterprise Service
Wastewater Utility Course Funds Funds Funds
Current assets
Deposits and investments 8,280,081$ 1,299,906$ 1,089,539$ 1,501,283$ 12,170,809$ 6,274,557$
Accounts receivable and unbilled revenue
less allowance for uncollectibles of
$52,163 for water and wastewater and
$1,260 for drainage utility 2,638,410 78,656 443,594 30,850 3,191,510 125,596
Accrued interest receivable 27,935 1,363 - - 29,298 5,066
Prepaids and deposits 4,824 675 9,271 14,057 28,827 30,541
Inventory 98,437 - 87,595 70,723 256,755 -
Total unrestricted current assets 11,049,687 1,380,600 1,629,999 1,616,913 15,677,199 6,435,760
Restricted assets
W&WW impact fees - deposits and investments 2,999,156 - - - 2,999,156 -
Revenue bond reserve for debt service 438,340 - - - 438,340 -
Total restricted assets 3,437,496 - - - 3,437,496 -
Total current assets 14,487,183 1,380,600 1,629,999 1,616,913 19,114,695 6,435,760
Non-current assets
Bond issuance cost 71,499 - 81,033 15,489 168,021 -
Net OPEB asset 89,854 3,671 23,246 5,710 122,481 -
Total non-current assets 161,353 3,671 104,279 21,199 290,502 -
Property, plant, and equipment in service, at cost
Land 1,528,966 527,826 692,605 584,532 3,333,929 -
Building 266,059 - 3,402,783 488,275 4,157,117 -
Equipment 894,179 6,400 1,096,808 225,674 2,223,061 7,728,876
Improvements 1,033,401 63,544 8,019,920 7,675,408 16,792,273 -
Construction in progress 1,302,996 595,280 - 3,900 1,902,176 -
Utility system 58,426,220 24,997,182 - - 83,423,402 -
Total property, plant, and equipment in service 63,451,821 26,190,232 13,212,116 8,977,789 111,831,958 7,728,876
Less accumulated depreciation 29,211,039 9,215,725 5,181,223 3,212,969 46,820,956 4,891,685
Net property, plant, and equipment
in service 34,240,782 16,974,507 8,030,893 5,764,820 65,011,002 2,837,191
Total non-current assets 34,402,135 16,978,178 8,135,172 5,786,019 65,301,504 2,837,191
Total assets 48,889,318$ 18,358,778$ 9,765,171$ 7,402,932$ 84,416,199$ 9,272,951$
ASSETS
Business - Type Activities -
Enterprise Funds
CITY OF EULESS, TEXAS
STATEMENT OF NET ASSETS – PROPRIETARY FUNDS
SEPTEMBER 30, 2010
(2 of 2)
The Notes to the Basic Financial Statements
are an integral part of these statements.
21
Governmental
Activities -
Other Total Internal
Water and Drainage Golf Enterprise Enterprise Service
Wastewater Utility Course Funds Funds Funds
Current liabilities
Payable from current assets
Accounts payable 967,489$ 45,883$ 76,987$ 23,386$ 1,113,745$ 43,028$
Accrued salaries and wages 249,894 21,877 66,402 14,561 352,734 9,520
Current portion of bonds payable 270,000 - 350,000 135,000 755,000 -
Accrued insurance claims - - - - - 606,103
Deferred revenue - - 49,792 - 49,792 -
Accrued interest 34,074 - 41,274 3,682 79,030 -
Total current liabilities 1,521,457 67,760 584,455 176,629 2,350,301 658,651
Non-current liabilities
Customer and escrow deposits 1,473,077 - - - 1,473,077 -
Net pension obligation 210,568 19,323 48,581 6,127 284,599 -
Bonds payable 3,494,181 - 7,161,605 713,039 11,368,825 -
Total non-current liabilities 5,177,826 19,323 7,210,186 719,166 13,126,501 -
Total liabilities 6,699,283 87,083 7,794,641 895,795 15,476,802 658,651
NET ASSETS
Invested in capital assets,
net of related debt 30,907,638 16,974,507 519,288 4,916,781 53,318,214 2,837,191
Restricted for
Impact fees 2,999,156 - - - 2,999,156 -
Revenue bond reserve for debt service 438,340 - - - 438,340 -
Unrestricted 7,844,901 1,297,188 1,451,242 1,590,356 12,183,687 5,777,109
Total net assets 42,190,035$ 18,271,695$ 1,970,530$ 6,507,137$ 68,939,397 8,614,300$
Reconciliation to government-wide statement of net assets
Adjustment to reflect the consolidation of internal
service funds' activities related to enterprise funds 1,804,043
Net assets of business-type activities 70,743,440$
LIABILITIES
Business - Type Activities -
Enterprise Funds
CITY OF EULESS, TEXAS
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS –
PROPRIETARY FUNDS
YEAR ENDED SEPTEMBER 30, 2010
The Notes to the Basic Financial Statements
are an integral part of these statements.
22
Governmental
Activities -
Other Total Internal
Water and Drainage Golf Enterprise Enterprise Service
Wastewater Utility Course Funds Funds Funds
Operating revenues
Water service 9,902,096$ - $ - $ - $ 9,902,096$ - $
Wastewater service 5,797,861 - - - 5,797,861 -
Drainage fees - 691,800 - - 691,800 -
Recreation fees - - - 313,860 313,860 -
Insurance premiums - - - - - 4,304,492
Service fees and miscellaneous 1,544,374 - 5,279,259 1,623,556 8,447,189 520,055
Total operating revenues 17,244,331 691,800 5,279,259 1,937,416 25,152,806 4,824,547
Operating expenses
General and administrative 465,155 - - - 465,155 1,170,693
Water production 5,926,175 - - - 5,926,175 -
Water distribution 647,984 - - - 647,984 -
Utility engineering 428,458 - - - 428,458 -
Sewage collection and treatment 2,637,557 - - - 2,637,557 -
Nondepartmental 3,103,815 - - - 3,103,815 -
Geographic information 428,913 - - - 428,913 -
Service center 1,161,822 - - - 1,161,822 -
Drainage - 457,376 - - 457,376 -
Recreation classes - - - 321,460 321,460 -
Golf course - - 1,404,942 - 1,404,942 -
Pro shop - - 391,367 - 391,367 -
Food and beverage - - 1,325,991 - 1,325,991 -
Conference center - - 262,762 - 262,762 -
Cart operations - - 197,641 - 197,641 -
Texas Star Sports Complex - - - 1,145,495 1,145,495 -
Arbor Daze - - - 53,306 53,306 -
Insurance costs - - - - - 5,304,817
Depreciation 1,700,878 642,558 430,219 296,220 3,069,875 752,980
Amortization 14,757 - 49,084 9,262 73,103 -
Total operating expenses 16,515,514 1,099,934 4,062,006 1,825,743 23,503,197 7,228,490
Operating income (loss)728,817 (408,134) 1,217,253 111,673 1,649,609 (2,403,943)
Nonoperating revenues (expenses)
Impact fees 157,951 - - - 157,951 -
Grant funding - - - -
Gain (loss) on sale of capital assets 330 - (244) 3,493 3,579 129,537
Investment income 73,372 9,027 1,013 4,387 87,799 39,460
Other revenue - - - - - -
Interest expense (171,452) (6,650) (333,469) (30,675)(542,246) -
Total nonoperating revenues
(expenses), net 60,201 2,377 (332,700) (22,795) (292,917) 168,997
Income (loss) before contributions
and transfers 789,018 (405,757) 884,553 88,878 1,356,692 (2,234,946)
Developer contribution of assets 26,400 - - - 26,400 -
Transfers in - - 222,136 - 222,136 999,092
Transfers out (1,117,115) (36,922) (17,602) (3,572) (1,175,211) (511)
Net income (loss)(301,697) (442,679) 1,089,087 85,306 430,017 (1,236,365)
Net assets, beginning of year 42,491,732 18,714,374 881,443 6,421,831 9,850,665
Net assets, end of year 42,190,035$ 18,271,695$ 1,970,530$ 6,507,137$ 8,614,300$
Reconciliation to government-wide statement of net assets
Adjustment to reflect the consolidation of internal
service funds' activities related to enterprise funds (199,696)
Change in net assets of business-type activities 230,321$
Business - Type Activities -
Enterprise Funds
CITY OF EULESS, TEXAS
STATEMENT OF CASH FLOWS – PROPRIETARY FUNDS
YEAR ENDED SEPTEMBER 30, 2010
The Notes to the Basic Financial Statements
are an integral part of these statements.
23
Governmental
Activities -
Other Total Internal
Water and Drainage Golf Enterprise Enterprise Service
Wastewater Utility Course Funds Funds Funds
OPERATING ACTIVITIES
Cash received from customers 16,621,221$ 683,094$ 4,854,789$ 1,915,511$ 24,074,615$ 5,010,037$
Cash payments to suppliers
for goods and services (11,812,565) (224,323) (2,040,970) (1,175,912) (15,253,770) (6,326,941)
Cash payments to employees
for services (2,845,720) (248,741) (1,500,612) (358,453) (4,953,526) (80,443)
Net cash provided by (used in)
operating activities 1,962,936 210,030 1,313,207 381,146 3,867,319 (1,397,347)
NONCAPITAL FINANCING ACTIVITIES
Transfer in - - 222,136 - 222,136 999,092
Transfer out (1,117,115) (36,922) (17,602) (3,572) (1,175,211) (511)
Net cash provided by (used in)
noncapital financing activities (1,117,115) (36,922) 204,534 (3,572) (953,075) 998,581
CAPITAL AND RELATED FINANCING ACTIVITIES
Impact fees 157,951 - - - 157,951 -
Interest paid on bonds (173,535) (8,400) (334,562) (31,081) (547,578) -
Reduction in bonds payable (255,000) (210,000) (350,000) (130,000) (945,000) -
Purchase of capital assets (1,389,022) (741,303) - (14,923) (2,145,248) (644,578)
Proceeds from sale of capital assets 330 - 841 3,494 4,665 140,328
Net cash used in capital
and related financing activities (1,659,276) (959,703) (683,721) (172,510) (3,475,210) (504,250)
INVESTING ACTIVITIES
Proceeds from sale of investment securities 1,192 - - - 1,192 5,183
Interest received on investments 73,372 16,721 1,013 9,854 100,960 39,460
Net cash provided by investing
activities 74,564 16,721 1,013 9,854 102,152 44,643
Net change in cash and cash
equivalents (738,891) (769,874) 835,033 214,918 (458,814) (858,373)
Cash and cash equivalents,
beginning of year 12,456,468 2,069,780 254,506 1,286,365 16,067,119 7,132,930
Cash and cash equivalents, end of year 11,717,577$ 1,299,906$ 1,089,539$ 1,501,283$ 15,608,305$ 6,274,557$
Business - Type Activities -
Enterprise Funds
CITY OF EULESS, TEXAS
STATEMENT OF CASH FLOWS – PROPRIETARY FUNDS – CONTINUED
YEAR ENDED SEPTEMBER 30, 2010
The Notes to the Basic Financial Statements
are an integral part of these statements.
24
Governmental
Activities -
Other Total Internal
Water and Drainage Golf Enterprise Enterprise Service
Wastewater Utility Course Funds Funds Funds
Reconciliation of operating income (loss)
to net cash provided by (used in)
operating activities
Operating income (loss)728,817$ (408,134)$ 1,217,253$ 111,673$ 1,649,609$ (2,403,943)$
Adjustments to reconcile operating
income (loss) to net cash provided
by (used in) operating activities
Depreciation and amortization 1,715,635 642,558 479,303 305,482 3,142,978 752,980
Changes in assets and liabilities
Accounts receivable and
unbilled revenue (685,925) (8,706) (377,971) (21,347) (1,093,949) 185,490
Prepaids and deposits (3,602) (675) 636 4,064 423 (30,241)
Inventory (10,111) - 36,308 (14,754) 11,443 -
Net OPEB asset (89,854) (3,671) (23,246) (5,710) (122,481) -
Net pension obligation 210,568 19,323 48,581 6,127 284,599 -
Accounts payable 46,041 (40,260) (30,554) (1,673) (26,446) 6,769
Accrued salaries and
wages (11,448) 9,595 9,396 (2,156) 5,387 744
Accrued insurance claims - - - - - 90,854
Customer and escrow
deposit 62,815 - - - 62,815 -
Deferred revenue - - (46,499) (560) (47,059) -
Net cash provided by (used in)
operating activities 1,962,936$ 210,030$ 1,313,207$ 381,146$ 3,867,319$ (1,397,347)$
Noncash financing activities
Developer contributed assets 26,400$ - $ - $ - $ 26,400$
Reconciliation of cash to balance sheet:
Cash - current 8,280,081$ 1,299,906$ 1,089,539$ 1,501,283$ 12,170,809$
Cash - restricted 3,437,496 - - - 3,437,496
Cash and cash equivalents 11,717,577$ 1,299,906$ 1,089,539$ 1,501,283$ 15,608,305$
Business - Type Activities -
Enterprise Funds
CITY OF EULESS, TEXAS
STATEMENT OF NET ASSETS – FIDUCIARY FUNDS
SEPTEMBER 30, 2010
The Notes to the Basic Financial Statements
are an integral part of these statements.
25
Stars Center
Escrow OPEB
Agency Fund Trust Fund
Assets
Investments at fair value 1,421,596$ 828,739$
Total investments 1,421,596 828,739
Total assets 1,421,596$ 828,739$
Liabilities
Due to other entities 1,420,547$ 400$
Refunds payable 1,049 -
Total liabilities 1,421,596$ 400$
Net Assets
Held in trust for OPEB 828,339$
CITY OF EULESS, TEXAS
STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
OPEB TRUST FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2010
The Notes to the Basic Financial Statements
are an integral part of these statements.
26
OPEB
Trust Fund
Additions
Employer contributions 988,006$
Other contributions 197,072
Investment earnings
Interest 29,393
Total investment earnings 29,393
Less: investment expense (5,459)
Net investment earnings 23,934
Total additions 1,209,012
Deductions
Insurance claims 780,278
Total deductions 780,278
Change in net assets 428,734
Net assets - beginning 399,605
Net assets - ending 828,339$
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
27
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General Statement
The City of Euless (“City”) was incorporated on February 24, 1953. The City operates
under a Council-Manager form of government and provides the following services as
authorized by its charter: general government, police and fire protection, emergency
ambulance service, road and traffic signal maintenance, water and wastewater
operations, drainage system, parks and recreational facilities, courts, library services,
planning land use, building inspection, and traffic control.
The accounting and reporting policies of the City relating to the funds included in the
accompanying basic financial statements conform to accounting principles generally
accepted in the United States of America (“GAAP”) applicable to state and local
governments. GAAP for local governments include those principles prescribed by the
Governmental Accounting Standards Board (“GASB”), the American Institute of Certified
Public Accountants in the publication entitled Audits of State and Local Governmental
Units, and by the Financial Accounting Standards Board (when applicable). As allowed
in Section P80 of GASB’s Codification of Governmental Accounting and Financial
Reporting Standards, the City has elected not to apply Financial Accounting Standards
Board Statements and Interpretations, Accounting Principles Board Opinions, and
Accounting Research Bulletins of the Committee of Accounting Procedure issued after
November 30, 1989. The more significant accounting policies of the City are described
below.
Financial Reporting Entity
As required by GAAP, these basic financial statements present the primary government
and its component units, entities for which the government is considered to be financially
accountable. The blended component units, although legally separate entities, are, in
substance, part of the primary government’s operations. As such, data from these units
is combined with data of the primary government.
Blended Component Units - The Euless Development Corporation (“Corporation”) is
used to account for the accumulation of half-cent sales tax proceeds dedicated to
building and improving City parks and facilities, enhancing library services, and
stimulating economic development activities within the City. The Euless Crime Control
and Prevention District (“District”) is used to account for the accumulation and use of
quarter-cent sales tax proceeds dedicated for crime reduction programs. The
Corporation and the District are reported as special revenue funds of the primary
government. The Boards of Directors of both component units are substantively the
same as the City Council. There are seven directors on each board, four of whom are
council members which constitutes a voting majority of the City Council. The remaining
three board members are residents of the City. Upon dissolution of the Corporation or
the District, the entity’s assets will be distributed to the City. Each component unit
provides all of its services to the City. The financial statements for the units were
obtained from the respective Boards of Directors. Financial information for both entities
may be obtained from the City.
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
28
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Basis of Presentation
The government-wide financial statements (the statement of net assets and the
statement of activities) report information on all of the activities of the City, except
fiduciary funds. The effect of interfund activity, with the exception of interfund services
provided or used, within the governmental and business-type activities columns, has
been removed from these statements. Governmental activities, which normally are
supported by taxes and intergovernmental revenues, are reported separately from
business-type activities, which rely to a significant extent on user fees and charges for
support.
The statement of activities demonstrates the degree to which the direct expenses of a
given program are offset by program revenues. Direct expenses are those that are
clearly identifiable with a specific program. Program revenues include 1) charges to
customers or applicants who purchase, use, or directly benefit from goods, services, or
privileges provided by a given program and 2) operating or capital grants and
contributions that are restricted to meeting the operational or capital requirements of a
particular program. Taxes and other items not properly included among program
revenues are reported instead as general revenues.
Fund Financial Statements
The City segregates transactions related to certain functions or activities in
separate funds in order to aid financial management and to demonstrate legal
compliance. Separate statements are presented for governmental funds,
proprietary funds, and fiduciary funds, even though the latter are excluded from
the government-wide financial statements. These statements present each
major fund as a separate column on the fund financial statements; all non-major
funds are aggregated and presented in a single column.
Governmental funds are those funds through which most governmental functions are
typically financed. The measurement focus of governmental funds is on the sources,
uses, and balances of current financial resources. The City has presented the following
major governmental funds:
General Fund
The General Fund is the main operating fund of the City. This fund is used to
account for all financial resources not accounted for in other funds. All general
tax revenues and other receipts that are not restricted by law or contractual
agreement to some other fund are accounted for in this fund. General operating
expenditures, fixed charges, and capital improvement costs that are not paid
through other funds are paid from the General Fund.
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
29
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Basis of Presentation – Continued
Debt Service Fund
The Debt Service Fund is used to account for the accumulation of financial
resources for the payment of principal, interest, and related costs on general
long-term debt paid primarily from property taxes levied by the City. The fund
balance of the Debt Service Fund is reserved to signify the amounts are
restricted exclusively for debt service expenditures.
Streets Capital Improvements Capital Project Fund
The Streets Capital Improvements Fund is used to account for street construction
and reconstruction projects and the means of financing such improvements.
Car Rental Tax Fund
The Car Rental Tax Fund is used to account for revenues received from the
collection of short-term motor vehicle rental taxes and the expenditures thereof.
Revenues are used primarily for debt reduction, one-time capital projects, and to
maintain the property tax rate.
Proprietary Funds are accounted for using the economic resources measurement focus
and the accrual basis of accounting. The accounting objectives are determinations of
net income, financial position, and cash flow. All assets and liabilities are included on
the Statement of Net Assets. The City has presented the following major proprietary
funds:
Water and W astewater Fund
Water and W astewater Fund is used to account for the acquisition, operation and
maintenance of a municipal water and wastewater utility, supported primarily by
user charges.
Drainage Utility Fund
Drainage Utility Fund is used to account for the acquisition, operation, and
maintenance of a municipal drainage utility, supported primarily by user charges.
Golf Course Fund
Golf Course Fund is used to account for operation and maintenance of the City’s
golf course, supported primarily by user charges.
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
30
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Basis of Presentation – Continued
Additionally, the City reports the Internal Service Funds which are used to account for
equipment replacement, risk management, and self-funded health insurance coverage
and disability insurance provided to employees of the City. The City also reports two
fiduciary funds in the financial statements. The Stars Center Escrow Fund accounts for
investments that will be held on behalf of the Dallas Stars until the debt issued for the
specific purpose of purchasing the Star Center is fully repaid. The OPEB Trust Fund
accounts for the accumulation and use of resources for benefit payments related to post-
employment health care.
Proprietary funds distinguish operating revenues and expenses from non-operating
items. Operating revenues and expenses generally result from providing services and
producing and delivering goods in connection with a proprietary fund’s principal ongoing
operations. Operating expenses for the proprietary funds include the cost of personnel
and contractual services, supplies and depreciation on capital assets. All revenues and
expenses not meeting this definition are reported as non-operating revenues and
expenses.
Measurement Focus and Basis of Accounting
Measurement focus refers to what is being measured; basis of accounting refers to
when revenues and expenditures are recognized in the accounts and reported in the
financial statements. Basis of accounting relates to the timing of the measurement
made, regardless of the measurement focus applied.
The government-wide statements and fund financial statements for proprietary funds are
reported using the economic resources measurement focus and the accrual basis of
accounting. The economic resources measurement focus means all assets and
liabilities (whether current or noncurrent) are included on the statement of net assets and
the operating statements present increases and decreases in total net assets. Under the
accrual basis of accounting, revenues are recognized when earned, including unbilled
water, wastewater, and drainage services which are accrued. Expenses are recognized
at the time the liability is incurred.
Governmental fund financial statements are reported using the current financial
resources measurement focus and are accounted for using the modified accrual basis of
accounting. Under the modified accrual basis of accounting, revenues are recognized
when susceptible to accrual; i.e., 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. The City considers property taxes as available if they are collected
within 60 days of year end. Expenditures are recorded when the related fund liability is
incurred. However, debt service expenditures, as well as expenditures related to
compensated absences and other long term liabilities are recorded only when payment is
due.
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
31
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Measurement Focus and Basis of Accounting – Continued
The revenues susceptible to accrual are property taxes, franchise fees, licenses,
charges for service, interest income, and intergovernmental revenues. Sales taxes
collected and held by the state at year end on behalf of the City are also recognized as
revenue. All other governmental fund revenues are recognized when received.
Deposits and Investments
Substantially all operating cash, deposits, and short-term investments are maintained in
consolidated cash accounts or individual fund investment accounts. Related interest
income is allocated to the various funds based primarily on ownership by each fund of
specific investments. Cash equivalents consist of highly-liquid investments with original
maturities of three months or less.
For purposes of the statement of cash flows, the City considers all highly liquid
investments to be cash equivalents.
Investments in U.S. Treasury and agency obligations with maturities of one year or less
when purchased are reported at amortized cost. All other investments are reported at
fair value.
State statutes authorize the City to invest in obligations of the U.S. Government or its
agencies; obligations of the State of Texas or its agencies; and certain other obligations,
repurchase agreements, money market mutual funds, and certificates of deposits within
established criterion.
Taxes
Property taxes are levied for appropriation for the fiscal year beginning on October 1, are
due October 1, attach as an enforceable lien on property as of January 1, and become
delinquent on February 1. Property taxes are accrued based on the period for which
they are levied and available. Delinquent taxes estimated not to be available are treated
as deferred revenue. Property taxes for cities, including those applicable to debt
service, are limited by the Texas Constitution to $2.50 per $100 of assessed valuation.
The City's current tax rate is $.4700 per $100 of assessed valuation ($.4700 per $100
last year) and assessed valuation is approximately 100% of estimated value.
Inventories
Inventories, which are recognized as expenditures/expenses as consumed, are stated at
cost (first-in, first-out method) for the General Fund and Enterprise Funds. Inventories
consist primarily of expendable supplies for the General Fund and merchandise for
resale for the Enterprise Funds.
Prepaid Items
Prepaid balances are for payments made by the City in the current year to provide
services occurring in the subsequent fiscal year.
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
32
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Interfund Receivables and Payables
Any residual balances outstanding between the governmental activities and business-
type activities are reported in the government-wide financial statements as “internal
balances.”
Transactions Between Funds
Interfund services provided and used are accounted for as revenues and expenditures
or expenses. Transactions that constitute reimbursements to a fund for expenditures or
expenses initially made from it that are properly applicable to another fund, are recorded
as expenditures or expenses in the reimbursing fund and as a reduction of expenditures
or expenses in the fund reimbursed. All other interfund transactions are recorded as
transfers.
Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets, are
reported in the applicable governmental or business-type activities columns in the
government-wide financial statements and in the fund financial statements for
proprietary funds. All capital assets are valued at historical cost or estimated historical
cost if actual historical cost is not available. Donated assets are valued at fair market
value on the date donated. Repairs and maintenance are recorded as expenses.
Renewals and betterments are capitalized. Interest has not been capitalized during the
construction period on property, plant, and equipment.
Assets capitalized have an original cost of $5,000 or more and over one year of useful
life. Depreciation has been calculated on each class of depreciable property using the
straight-line method. Estimated useful lives are as follows:
Buildings 33 1/3 years
W ater and wastewater system 33 1/3 years
Storm drainage system 33 1/3 years
Inf rastructure 7 - 40 years
Machinery and equipment 5 - 15 years
Improvements 25 years
Compensated Absences
Employees may accumulate a maximum of two times their annual vacation accrual. The
City's policy is to pay the employee accumulated vacation upon termination. The City
does not pay employees for accumulated sick leave upon termination. All vacation pay
is accrued in the government-wide and proprietary fund financial statements and
reported as accrued salaries and wages (a current liability). Compensated absences are
recorded in governmental funds as they mature (i.e. as taken). The liability for
governmental fund compensated absences is typically liquidated in the general fund, the
hotel/motel fund, the juvenile case fund, the half penny sales tax fund, and the crime
control and prevention district fund.
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
33
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Nature and Purpose of Reservations and Designations of Fund Equity
Fund balance available for appropriation is classified as unreserved, undesignated. The
City classifies remaining fund balances as follows:
1. Reserves – used to denote that portion of fund equity which is not appropriable
for expenditures or is legally segregated for specific future use.
a. Reserved for debt service represents that portion of fund equity legally
restricted to retirement of General Obligation bond principal and interest.
b. Reserved for court technology represents funds collected from a court
technology fee that must be used to upgrade court systems.
c. Reserved for development agreements represents funds received from
developers that must be used for certain capital projects.
d. Reserved for betterment represents funds donated by citizens that must be
used for the betterment of the community.
e. Reserved for injured animals represents donations from citizens that must be
used for the treatment of animals picked up by the animal shelter.
f. Reserved for historical preservation represents donations that must be used
toward the preservation of Euless historical sites.
g. Reserved for 9-1-1 emergency represents funding received from the county
that must be used to upgrade emergency systems.
h. Reserved for technology represents contributions which must be used to
upgrade the city communications systems.
i. Reserved for library remodel represents amounts reserved for future capital
expenditures relating to drainage maintenance at the library.
j. Reserve for victim assistance represents amounts reserved for future
expenditures relating to individuals who are victims of violent crimes.
k. Reserve for radio rebanding represents amounts received for future
expenditures related to rebanding all city radio.
l. Reserve for prepaids and inventories are reserved as the assets are not
available or appropriable for expenditures.
2. Designations – used to denote that portion of fund equity for which council has
established for a future use.
a. Designated for contingency represents amounts restricted by council for use
when extraordinary contingencies arise that have not been budgeted.
Expenditures must be council approved.
b. Designated for emergency represents amounts restricted by council for use in
extreme emergencies. Expenditures must be council approved.
Net Assets
Net assets represent the difference between assets and liabilities. Net assets invested
in capital assets, net of related debt, consists of capital assets, net of accumulated
depreciation, reduced by the outstanding balances of any borrowing used for the
acquisition, construction, or improvements of those assets, plus unspent debt proceeds.
Net assets are reported as restricted when there are limitations imposed on their use,
either through the enabling legislation adopted by the City or through external
restrictions imposed by creditors, grantors, or laws or regulations of other governments.
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
34
NOTE 2. DEPOSITS AND INVESTMENTS
GASB 40 Disclosures
Deposits and investments
As of September 30, 2010, the City’s portfolio contained the following investments:
% of Rating
Book Value Fair Value Portfolio WAM Rating Agency
Overnight pools
TexPool 16,929,309$ 16,929,309$ 31.19%34 AAAm S&P
TexStar 9,033,749 9,033,749 16.64%49 AAAm S&P
LOGIC 70 70 0.00%50 AAAm S&P
Total Overnight 25,963,128 25,963,128 47.83%
U.S. Issues
FFCB 4,212,559 4,220,765 7.78%24 AAA/Aaa Fitch/Moody's
FHLB 23,048,993 23,094,511 42.55%114 AAA/Aaa S&P/Moody's
FMAC 1,000,000 1,001,503 1.85%4 AAA/Aaa S&P/Moody's
Total U.S. Issues 28,261,552 28,316,779 52.18%
Total Portfolio 54,224,680$ 54,279,907$ 100.00%86
Investment Type
Weighted average maturity (“W AM”) of the portfolio by investment type categories
reflected in the previous table is stated in days. For the investment pools, the Reset
WAM is presented. Investment type acronyms displayed in the previous table are
defined as follows: FFCB – Federal Farm Credit Bank, FHLB – Federal Home Loan
Bank, and FMAC – Federal Home Loan Mortgage Corporation. The rating agency
acronyms are defined as follows: S&P – Standard and Poor’s Ratings Services, a
division of the McGraw-Hill Companies, Inc.; Moody’s – Moody’s Investor Service, Inc.;
and, Fitch – Fitch Ratings. Additional information about the rating agencies or the
significance of the ratings provided may be obtained from each agency’s web site.
Deposits
State statutes and the City’s investment policy require that all deposits in financial
institutions be fully collateralized by U.S. Government obligations or its agencies and
instrumentalities or direct obligations of Texas or its agencies or instrumentalities that
have a market value of not less than the principal amount of the deposits. The City’s
deposits were fully insured or collateralized as required by state statutes as of
September 30, 2010. At year end, the carrying amount of the City’s deposits was a
credit balance of $964,799 primarily consisting of outstanding checks, and the respective
bank balances totaled $463,109. Of the total bank balance, the Federal Depository
Insurance Corporation (“FDIC”) covered $250,000. The remainder was covered by
collateral with a value of $2,526,352. The collateral is held by The Federal Reserve
Bank in the City’s name under a joint safekeeping agreement with Frost National Bank.
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
35
NOTE 2. DEPOSITS AND INVESTMENTS – CONTINUED
GASB 40 Disclosures – Continued
Investments
State statutes, City bond ordinances, and City resolutions authorize the City’s
investments. The City is authorized to invest in obligations of the U.S. Government and
its agencies and instrumentalities, obligations of the State of Texas and its agencies and
instrumentalities, fully insured or collateralized certificates of deposit, fully-collateralized
repurchase agreements and reverse repurchase agreements, government pools, and
no-load SEC-registered money market funds consisting of any of these securities listed.
Because the City is responsible for the investment portfolio of its component units, the
City’s investment practices and policies disclosed herein apply equally to its component
units. During the year ended September 30, 2010, the City did not own any types of
securities other than those permitted by statute.
The City’s investment pools are 2a7-like pools. A 2a7-like pool is one which is not
registered with the Securities and Exchange Commission (“SEC”) as an investment
company, but nevertheless has a policy that it will, and does, operate in a manner
consistent with the SEC’s Rule 2a7 of the Investment Company Act of 1940. This type
of pool uses amortized investment costs rather than market values to compute
participant share values. Furthermore, the pools in which the City is currently
participating seek to maintain a stable $1 net asset value per share or unit. Accordingly,
the fair value of the City’s position in these pools is substantially the same as the market
value of the shares in each of the pools.
TexPool falls under the purview of the Texas Comptroller of Public Accounts
(“Comptroller”) who is responsible for oversight of TexPool operations. TexStar is duly
chartered and administered by First Southwest Asset Management, Inc. and JPMorgan
Chase. Each of the other pools has established a governing board at least partially
comprised of pool participants. Duties of the governing boards include oversight
responsibility. The Comptroller and the governing boards exercise oversight of the
pools’ activities via daily, weekly, and monthly reporting requirements. Additionally, per
the requirements of the Public Funds Investment Act (“PFIA”), all portfolios will maintain
an AAA or equivalent rating from at least one nationally recognized rating agency. The
PFIA also requires an annual examination of the financial statements of the pools by an
independent certified public accounting firm. In connection with the financial audit, a
compliance audit of management controls on investments and adherence to the
Investment Policies is also required.
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
36
NOTE 2. DEPOSITS AND INVESTMENTS – CONTINUED
GASB 40 Disclosures – Continued
Interest Rate Risk
In compliance with the City’s Investment Policy, as of September 30, 2010, the City
minimized the interest rate risk, the risk relating to the decline in market value of
securities, in the portfolio by limiting the weighted average maturity to 365 days and the
stated maturity to two years or less, with the exception of securities purchases related to
reserve funds; structuring the investment portfolio so that securities matured to meet
cash requirements for ongoing operations, thereby avoiding the need to sell securities in
the secondary market prior to maturity; monitoring credit ratings of portfolio positions to
assure compliance with rating requirements imposed by the Public Funds Investment
Act; and investing operating funds primarily in money market mutual funds, government
investment pools, and shorter-term securities with a weighted average maturity between
180 and 270 days.
The following details the maturity schedule for the City’s investments as of
September 30, 2010.
% of
Maturity Schedule Book Value Fair Value Portfolio
Overnight 25,963,128$ 25,963,128$ 47.83%
up to 6 months 10,616,656 10,630,210 19.58%
6 to 9 months 4,281,766 4,290,727 7.90%
9 to 12 months 2,512,564 2,521,961 4.65%
12 to 15 months 3,502,024 3,511,209 6.47%
15 to 18 months 6,448,542 6,457,863 11.90%
Over 18 months 900,000 904,809 1.67%
Total 54,224,680$ 54,279,907$ 100.00%
Credit Risk
In compliance with the City’s Investment Policy, as of September 30, 2010, the City
minimized credit risk losses due to default of a security issuer or backer, by: limiting
investments to the safest types of securities; investing in U.S. Agencies Bonds rated
AAA and Aaa by Standard & Poor’s and Moody’s respectively; pre-qualifying financial
institutions, brokers/dealers, and advisors with which the City will do business; and
diversifying the investment portfolio so that the potential losses on securities are
minimized.
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
37
NOTE 2. DEPOSITS AND INVESTMENTS – CONTINUED
GASB 40 Disclosures – Continued
Credit Risk – Continued
Custodial Credit Risk – The risk that a government will not be able to recover
(a) deposits if the depository financial institution fails or (b) the value of investment or
collateral securities that are in the possession of an outside party if the counterparty to
the investment or deposit transaction fails. To minimize such risk, the City requires
collateralization of deposits in excess of Federal Deposit Insurance Corporation (“FDIC”)
coverage, utilizes the delivery vs. payment method for investment purchases, and
contracts with a third-party safekeeping agent.
Per the terms of its depository agreement, for bank deposits in excess of the coverage
provided by the FDIC, the City requires the depository bank to pledge to the City
securities (collateral) equal to the following percentages, as applicable, to the largest
balances the City maintains in the Bank.
Other
Type of Collateral Securities
Eligible collateral other than mortgage-backed securities 102%
Mortgage-backed securities 110%
The percentages as shown reflect the requirement based on market value of the
pledged securities. The City actively monitors and manages collateral levels for all
deposits. On September 30, 2010, the City’s bank balances were insured or fully
collateralized.
The City’s depository bank also acts as its safekeeping agent per the terms of the
depository contract. City policy dictates that all securities rendered for payment will be
sent delivery vs. payment, meaning that the funds required for purchase of a security will
not be released until the safekeeping agent has received the security purchased in the
City’s name. No broker holds City funds. The City does not purchase securities from its
depository bank or any subsidiary banks of the same bank holding company.
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
38
NOTE 3. CAPITAL ASSETS
Capital asset activity for the year ended September 30, 2010, was as follows:
Balance Balance
September 30,Adjustment/September 30,
2009 Increase Decrease Transfer 2010
Governmental activities
Capital assets not being depreciated
Land 26,135,987$ 75,641$ -$ -$ 26,211,628$
Construction in progress 3,595,163 3,642,271 - (3,363,844) 3,873,590
Total capital assets
not being depreciated 29,731,150 3,717,912 - (3,363,844) 30,085,218
Capital assets being depreciated
Buildings 44,673,440 3,026,221 - 3,237,296 50,936,957
Improvements other than buildings 4,977,483 99,416 - 97,172 5,174,071
Infrastructure 62,217,401 464,562 - 29,376 62,711,339
Machinery and equipment 5,982,630 574,532 (108,295) - 6,448,867
Total capital assets
being depreciated 117,850,954 4,164,731 (108,295) 3,363,844 125,271,234
Less accumulated depreciation
Buildings (11,717,314) (1,319,398) - - (13,036,712)
Improvements other than buildings (2,426,629) (167,469) - - (2,594,098)
Infrastructure (23,945,980) (1,866,997) - - (25,812,977)
Machinery and equipment (4,251,354) (308,433) 95,736 - (4,464,051)
Total accumulated depreciation (42,341,277) (3,662,297) 95,736 - (45,907,838)
Total capital assets being
depreciated, net 75,509,677 502,434 (12,559) - 79,363,396
Total governmental fund capital
assets, net 105,240,827 4,220,346 (12,559) - 109,448,614
Internal service funds
Capital assets being depreciated
Machinery and equipment 7,126,137 644,578 (41,839) - 7,728,876
Total internal service assets
being depreciated 7,126,137 644,578 (41,839) - 7,728,876
Less accumulated depreciation
Machinery and equipment (4,169,753) (752,981) 31,049 - (4,891,685)
Total internal service funds
capital assets, net 2,956,384 (108,403) (10,790) - 2,837,191
Total governmental activities
capital assets, net 108,197,211$ 4,111,943$ (23,349)$ -$ 112,285,805$
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
39
NOTE 3. CAPITAL ASSETS – CONTINUED
Balance Balance
September 30,Adjustment/September 30,
2009 Increase Decrease Transfer 2010
Business-type activities
Capital assets not being depreciated
Land 3,121,072$ 212,857$ -$ -$ 3,333,929$
Construction in progress 675,262 1,743,627 - (516,713) 1,902,176
Total assets not being depreciated 3,796,334 1,956,484 - (516,713) 5,236,105
Capital assets being depreciated
Buildings 4,157,117 - - - 4,157,117
Equipment 2,533,482 11,025 (321,446) - 2,223,061
Improvements 16,782,823 9,450 - - 16,792,273
Utility system 82,711,998 194,691 - 516,713 83,423,402
Total capital assets being
depreciated 106,185,420 215,166 (321,446) 516,713 106,595,853
Less accumulated depreciation
Buildings (1,494,971) (124,573) - - (1,619,544)
Equipment (1,942,118) (146,657) 320,360 - (1,768,415)
Improvements (5,415,923) (614,904) - - (6,030,827)
Utility system (35,218,429) (2,183,740) - - (37,402,169)
Total accumulated depreciation (44,071,441) (3,069,875) 320,360 - (46,820,956)
Total capital asssets being
depreciated, net 62,113,979 (2,854,709) (1,086) 516,713 59,774,897
Total business-type activities
capital assets, net 65,910,313$ (898,225)$ (1,086)$ -$ 65,011,002$
Depreciation expense was charged as direct expense to programs of the primary government as follows:
Governmental activities
General administrative 157,042$
Public safety 617,578
Development services 338,375
Culture and recreation 582,939
Highways and streets 1,966,363
Total depreciation expense - Governmental activities 3,662,297$
Business-type activities
W ater and wastewater 1,700,878$
Drainage utility 642,558
Golf course 430,219
Other 296,220
Total depreciation expense - Business-type activities 3,069,875$
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
40
NOTE 3. CAPITAL ASSETS – CONTINUED
Outstanding commitments at September 30, 2010, under authorized construction contracts,
were approximately $1,676,880. These outstanding commitments are to be financed by
available deposit and investment balances, which include proceeds from previous bond
issuances.
NOTE 4. LONG-TERM DEBT
At September 30, 2010, bonds payable consisted of the following individual issues:
Governmental Business-type
$6,000,000 Series 2001,General Obligation Bonds,dated
April 1,2001,partially refunded in 2006,due in annual
installments through 2015,bearing interest rates of 4.50%
to 6.50%.1,585,000$ -$
$5,455,000 Series 2001,Revenue Certificates of
Obligation,dated April 1,2001,partially refunded in 2006,
due in annual installments through 2015,bearing interest
rates of 4.50% to 6.50%.1,445,000 -
$6,430,000 Series 2002,Sales Tax Revenue Refunding
Bonds,dated June 14,2002,due in annual installments
through 2015, bearing interest rates of 3.00% to 4.40%.3,255,000 -
$5,490,000 Series 2003,General Obligation Refunding
Bonds,dated January 15,2003,due in annual installments
through 2016, bearing interest rates of 3.00% to 4.00%.2,235,000 -
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
41
NOTE 4. LONG-TERM DEBT – CONTINUED
Governmental Business-type
$11,095,000 Series 2004,General Obligation Refunding
Bonds,dated February 24,2004,due in annual installments
through 2027, bearing interest rates of 2.00% to 4.50%.-$ 9,160,000$
$3,200,000 Series 2004A,General Obligation Bonds,dated
June 15,2004,due in annual installments through 2024,
bearing interest rates of 3.50% to 5.00%. 2,525,000 -
$4,720,000 Series 2004,Revenue Certificates of
Obligation,dated June 15,2004,due in annual installments
through 2024, bearing interest rates of 3.50% to 5.25%. 3,465,000 -
$2,145,000 Series 2004,W aterworks and Sewer System
Revenue Bonds,dated June 15,2004,due in annual
installments through 2024,bearing interest rates of 3.50%
to 5.25%.- 1,680,000
$13,900,000 Series 2005,General Obligation Refunding
Bonds,dated March 1,2005,due in annual installments
through 2020, bearing interest rates of 2.40% to 5.00%. 11,290,000 -
$5,080,000 Series 2006,General Obligation Refunding
Bonds,dated January 30,2006,due in annual installments
through 2021, bearing interest at 3.93%. 5,020,000 -
$1,630,000 Series 2006,Sales Tax Revenue Refunding
Bonds,dated January 30,2006,due in annual installments
through 2019, bearing interest at 3.88%. 1,215,000 -
$2,530,000 Series 2006,W aterworks and Sewer System
Revenue Refunding Bonds,dated January 30,2006,due in
annual installments through 2020,bearing interest at
3.88%.- 2,170,000
$8,110,000 Series 2010,General Obligation Refunding
Bonds,dated August 15,2010,due in annual installments
through 2025, bearing interest rates of 0.68% to 4.00%. 8,110,000 -
40,145,000$ 13,010,000$
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
42
NOTE 4. LONG-TERM DEBT – CONTINUED
The following is a summary of long-term debt transactions of the City for the year ended
September 30, 2010:
Balance Balance Due
Beginning End within
of Year Increases Decreases of Year One Year
Governmental activities
General obligation bonds 24,350,000$ 8,110,000$ (1,695,000)$ 30,765,000$ 2,245,000$
Certificates of obligation 13,910,000 - (9,000,000) 4,910,000 445,000
Sales tax revenue bonds 5,185,000 - (715,000) 4,470,000 755,000
Deferred loss on refunding bonds (942,544) (143,763) 89,711 (996,596) (89,711)
Premium/discount on bonds 392,161 (94,828) (36,433) 260,900 30,111
Compensated absences 1,533,298 1,144,441 (1,097,571) 1,580,168 158,016
Net pension obligation - 4,373,428 (2,953,092) 1,420,336 1,420,336
Total governmental activities 44,427,915$ 13,389,278$ (15,407,385)$ 42,409,808$ 4,963,752$
Business-type activities
Water and sewer revenue bonds 4,105,000$ -$ (255,000)$ 3,850,000 270,000$
Drainage utility revenue bonds 210,000 - (210,000) - -
General obligation refunding bonds 9,640,000 - (480,000) 9,160,000 485,000
Deferred loss on refunding bonds (799,451) - 51,628 (747,823) (51,628)
Premium/Discount on bonds (147,449) - 9,097 (138,352) (9,098)
Compensated absences 248,827 274,521 (289,807) 233,541 23,354
Net pension obligation - 889,445 (604,846) 284,599 284,599
Total business-type activities 13,256,927 1,163,966 (1,778,928) 12,641,965 1,002,227
Total primary government 57,684,842$ 14,553,244$ (17,186,313)$ 55,051,773$ 5,965,979$
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
43
NOTE 4. LONG-TERM DEBT – CONTINUED
Defeased Debt Outstanding
On August 15, 2010, the City issued $8,110,000 in General Obligation Refunding bonds with
an average interest rate of .68 to 4.0 percent to advance refund $8,300,000 of outstanding
2000 Series Certificates of Obligation with an average interest rate of 8.0 to 8.125 percent.
The net proceeds plus a cash contribution totaling $8,443,763 were used to purchase U.S.
Securities. Those securities were deposited in an irrevocable trust with an escrow agent to
provide for all future debt service payments on the 2000 Series certificates. As a result, the
2000 Series certificates are considered defeased and the liability for the certificates have
been removed from long-term debt.
The advance refundings resulted in a difference between the reacquisition price and the net
carrying amount of the old debt of $143,763. This difference, reported in the accompanying
financial statements as a reduction of bonds payable, is being charged to operations through
the year 2025 using the effective interest method. The City completed the advance
refundings to reduce the total debt service payments over the next 15 years by $3.99 million
and to obtain an economic gain (difference between the present values of the old and new
debt service payments) of $2,465,093 (net of cash contribution).
Other than these refunded certificates mentioned above, all previously refunded debt has
been redeemed.
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
44
NOTE 4. LONG-TERM DEBT – CONTINUED
Annual Requirements to Retire Debt Obligations
The annual aggregate maturities for each bond type for the years subsequent to
September 30, 2010, are as follows:
General Obligation Bonds:
Principal Interest Principal Interest Total
2011 2,245,000$ 1,185,594$ 485,000$ 352,975$ 4,268,569$
2012 2,300,000 1,146,144 510,000 338,656 4,294,800
2013 2,375,000 1,067,115 525,000 322,475 4,289,590
2014 2,470,000 975,802 545,000 304,406 4,295,208
2015 2,570,000 871,948 560,000 285,069 4,287,017
2016-2020 13,855,000 2,541,740 2,435,000 1,140,016 19,971,756
2021-2025 4,950,000 527,895 2,795,000 613,931 8,886,826
2026-2027 - - 1,305,000 59,513 1,364,513
30,765,000$ 8,316,238$ 9,160,000$ 3,417,041$ 51,658,279$
Governmental Activities Business-Type Activities
Certificates of Obligation:
Principal Interest Principal Interest Total
2011 445,000$ 233,710$ -$ -$ 678,710$
2012 455,000 214,485 - - 669,485
2013 485,000 194,300 - - 679,300
2014 505,000 172,534 - - 677,534
2015 530,000 149,308 - - 679,308
2016-2020 1,240,000 489,250 - - 1,729,250
2021-2024 1,250,000 130,256 - - 1,380,256
4,910,000$ 1,583,843$ -$ -$ 6,493,843$
Governmental Activities Business-Type Activities
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
45
NOTE 4. LONG-TERM DEBT – CONTINUED
Annual Requirements to Retire Debt Obligations – Continued
Revenue Bonds:
Principal Interest Principal Interest Total
2011 755,000$ 183,512$ 270,000$ 163,556$ 1,372,068$
2012 780,000 153,498 275,000 152,972 1,361,470
2013 810,000 122,490 285,000 142,194 1,359,684
2014 850,000 88,998 305,000 130,927 1,374,925
2015 885,000 53,162 315,000 118,723 1,371,885
2016-2020 390,000 31,040 1,800,000 384,931 2,605,971
2021-2024 - - 600,000 76,750 676,750
4,470,000$ 632,700$ 3,850,000$ 1,170,053$ 10,122,753$
Governmental Activities Business-Type Activities
Water and sewer revenue bonds authorized and unissued as of September 30, 2010,
amounted to $1,200,000. The water and sewer bonds were authorized in 1970, and
currently the City Council has no intent to issue these bonds.
Water and sewer revenue bonds and refunding revenue bonds are payable solely from
and equally secured by a first lien on and pledge of the net revenue of the City's
combined waterworks and sanitary sewer system.
In accordance with the water and sewer revenue and refunding bond ordinances, the
following reserves were established:
Reserve for revenue bond debt service – to be used for retirement of the current portion
of principal and interest payments due.
Reserve for emergency – to be used for payment of extraordinary repairs or
replacements to the system necessitated by an emergency for which no other funds are
available.
Revenue bond reserve – a reserve established with a portion of the bond proceeds
pursuant to the revenue bond covenants which will be used for principal and interest
payments in the event of default by the issuer.
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
46
NOTE 4. LONG-TERM DEBT – CONTINUED
Annual Requirements to Retire Debt Obligations – Continued
Should the reserve for revenue bond debt service and/or the revenue bond reserve
prove deficient; the reserve for emergency shall be used for the purpose of meeting
principal and/or interest requirements of the bonds.
All funding requirements for the above reserves were met at September 30, 2010.
Investments of funds included in the bond reserve and emergency accounts are
restricted to obligations of the United States or its agencies and instrumentalities (except
for mortgage pass-through securities).
NOTE 5. COMMITMENTS AND CONTINGENT LIABILITIES
The City entered into a 50-year contract dated September 25, 1973, with the Trinity River
Authority of Texas ("TRA") whereby TRA agrees to provide supplemental water service and
wastewater treatment to the City. Payments by the City are based on metered usage at
rates designed to charge the City a prorata share of TRA's annual operating and
maintenance expenses and principal and interest requirements on bonds issued by TRA.
Payments under this contract approximated $7,484,000 and are included as operating
expenses of the water and wastewater fund.
The City is involved in a number of lawsuits arising in the ordinary course of business. In
the opinion of the City's legal counsel and management, any liability resulting from such
litigation would not be material in relation to the City's financial position.
NOTE 6. SERVICE CENTER
The water and wastewater enterprise fund historically bears the major portion of the
operating costs of the City's service center, which provides services to all City departments.
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
47
NOTE 7. INTERFUND TRANSFERS
All interfund transfers between the various funds are approved supplements to the
operations of those funds.
Non-major Subtotal
General Debt service Streets CIP governmental governmental
Transfers out
General -$ -$ -$ 37,315$ 37,315$
Car rental tax 745,000 195,149 452,938 875,000 2,268,087
W ater and wastewater 834,973 - - - 834,973
Drainage utility 34,626 - - - 34,626
Non-major governmental - - 125,062 71,679 196,741
Total transfers in 1,614,599$ 195,149$ 578,000$ 983,994$ 3,371,742$
Transfers in
Major Governmental
Major Enterprise
Internal Drainage Golf Non-major Subtotal Total
service utility course enterprise proprietary transfers out
Transfers out
General 657,000$ -$ 14,467$ -$ 671,467$ 708,782$
Car rental tax - - - - - 2,268,087
W ater and wastewater 282,142 - - - 282,142 1,117,115
Drainage utility 2,296 - - - 2,296 36,922
Golf course 17,602 - - - 17,602 17,602
Non-major governmental 35,969 - 207,669 - 243,638 440,379
Non-major enterprise 3,572 - - - 3,572 3,572
Internal service 511 - - - 511 511
Total transfers in 999,092$ -$ 222,136$ -$ 1,221,228$ 4,592,970$
Transfers in
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
48
NOTE 7. INTERFUND TRANSFERS – CONTINUED
Transfers are primarily used to move funds from:
• The general fund to the non-major governmental funds to satisfy grant matching
requirements.
• The car rental tax fund, the water and wastewater fund, and the drainage utility fund
to the general fund for general and administrative charges.
• The car rental tax fund to the debt service fund for the principal and interest on 2001
bonds.
• The car rental tax fund to the streets CIP fund and other non-major governmental
funds to provide funding for approved capital projects.
• The non-major governmental funds to the streets CIP fund and the non-major
governmental funds to provide funding for approved capital projects.
• All transfers to the internal service funds are to cover workers’ compensation,
property, general liability, OPEB, and other similar claims.
• The general fund to the golf course fund to rebate the City portion of sales taxes
paid.
• The non-major government funds to the golf course fund to cover a portion of the
operating and debt costs associated with the conference center.
NOTE 8. RISK MANAGEMENT
The City is exposed to various risks of loss related to torts; theft of, damage to, and
destruction of assets; errors and omissions; injuries to employees; and natural disasters.
The City participates in the Texas Municipal League Joint Self-Insurance Fund ("TMLIF") to
provide both general liability and property insurance.
The City, along with other participating entities, contributes annual amounts determined by
TMLIF management. As claims arise they are submitted to and paid by TMLIF. The City is
not liable for payments beyond their annual contributions to TMLIF and related deductibles.
In fiscal year 2006, the City contracted with the Texas Municipal League Intergovernmental
Risk Pool to provide workers’ compensation insurance and effectively discontinued being
self-insured for workers’ compensation claims. This policy has no deductibles, includes all
claims handling, and has a fixed premium.
In fiscal years prior to 2006, the City was self-insured for workers' compensation claims.
Contributions were made to a separate risk management fund by other funds and were
available to pay claims, claim reserves, and administrative costs of the program. The City
remains liable under its self-insurance program for any claims occurring prior to
October 1, 2005.
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
49
NOTE 8. RISK MANAGEMENT – CONTINUED
The City provides employee health insurance coverage on a self-insured basis. Premiums
are paid into a separate insurance fund by other funds, by the City's employees, and by
retirees. The premiums are used to fund claims, administrative costs of the program, and
claim reserves. An excess coverage insurance policy covers individual claims in excess of
$100,000 and aggregate claims in excess of $4,324,808. During fiscal year 2010, the City
and the City's employees contributed approximately $3,141,501 and $851,834 respectively,
for medical coverage. The City's contributions are accounted for as interfund services are
provided and used. Claims liabilities are based on estimates of the ultimate cost of claims
(including future claim adjustment expenses) that have been reported but not settled, and of
claims that have been incurred but not reported, and are accounted for in the Insurance
Internal Service Fund.
Changes in the balances of health and dental claims liabilities are as follows:
2010 2009
Unpaid claims, beginning of year 486,838$ 259,998$
Incurred claims 3,855,832 3,260,526
Paid claims (3,796,401) (3,033,686)
Unpaid claims, end of year 546,269$ 486,838$
Settlement amounts have not exceeded stop loss insurance coverage for the year ended
September 30, 2010 or any of the three preceding years ended September 30.
NOTE 9. EMPLOYEE RETIREMENT SYSTEM
Plan Description
The City provides pension benefits for all eligible employees through a non-traditional,
joint contributory, hybrid defined benefit-plan in the state-wide Texas Municipal
Retirement System (“TMRS”), an agent multiple-employer public employee retirement
system. The plan provisions that have been adopted by the city are within the options
available in the governing state statutes of TMRS.
TMRS issues a publicly available comprehensive annual financial report that includes
financial statements and required supplementary information (RSI) for TMRS; the report
also provides detailed explanations of the contributions, benefits, and actuarial methods
and assumptions used by the System. This report may be obtained by writing to TMRS,
P.O. Box 149153, Austin, TX 78714-9153 or by calling 800-924-8677; in addition, the
report is available on the TMRS website at www.TMRS.com.
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
50
NOTE 9. EMPLOYEE RETIREMENT SYSTEM – CONTINUED
Plan Description – Continued
The plan provisions are adopted by the City Council of the City, within the options
available in the state statutes governing TMRS. Plan provisions for the City were as
follows:
Plan Year 2009 Plan Year 2010
Employee deposit rate 7.00%7.00%
Matching ratio (city to employee)2 to 1 2 to 1
Years required for vesting 5 5
Service retirement eligibility
(expressed as age/years of service)60/5,0/20 60/5,0/20
Updated service credit 100% Repeating, Transfers 100% Repeating, Transfers
Annuity increase (to retirees)70% of CPI Repeating 70% of CPI Repeating
Contribution
Under the state law governing TMRS, the contribution rate for each city is determined
annually by the actuary, using the Projected Unit Credit actuarial cost method. This rate
consists of the normal cost contribution rate and the prior service cost contribution rate,
which is calculated to be a level percent of payroll from year to year. The normal cost
contribution rate finances the portion of an active member's projected benefit allocated
annually; the prior service contribution rate amortizes the unfunded (overfunded)
actuarial liability (asset) over the applicable period for that city. Both the normal cost and
prior service contribution rates include recognition of the projected impact of annually
repeating benefits, such as Updated Service Credits and Annuity Increases.
The City contributes to the TMRS Plan at an actuarially determined rate. Both the
employees and the City make contributions monthly. Since the City needs to know its
contribution rate in advance for budgetary purposes, there is a one-year delay between
the actuarial valuation that serves as the basis for the rate and the calendar year when
the rate goes into effect. The annual pension cost and net pension obligation/(asset) are
as follows:
Annual required contribution (ARC)4,514,801$
Interest on net pension obligations 55,333
Adjustment to the ARC (45,049)
Annual pension cost (APC)4,525,085
Contributions made 2,820,150
Increase (decrease) in net pension obligation 1,704,935
Net pension obligation, beginning of year -
Net pension obligation, end of year 1,704,935$
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
51
NOTE 9. EMPLOYEE RETIREMENT SYSTEM – CONTINUED
Contribution – Continued
Significant assumptions used in preparation of that valuation as well as the previous
valuation are as follows:
Valuation date December 31, 2007 December 31, 2008 December 31, 2009
Actuarial cost method Projected Unit Credit Projected Unit Credit Projected Unit Credit
Amortization method Level Percent of Payroll Level Percent of Level Percent of Payroll
Remaining amortization period 30 years - closed period 29 years - closed 28 years - closed period
Asset valuation method Amortized Cost Amortized Cost 10 year Smoothed Market
Actuarial assumption
Investment rate of return 7.0%7.5%7.5%
Project salary increases Varies by age/service Varies by age/service Varies by age/service
Inflation 3%3%3%
Cost of living adjustments 2.1%2.1%2.1%
Euless payroll growth assumptions 3%3%3%
The TMRS Board of Trustees, in an effort to assist cities with increases greater than .5%
in the required contribution rates occurring as a result of the changes in funding method
and assumptions, voted to (1) extend the period for amortizing the unfunded actuarial
accrued liability (“UAAL”) to a 30-year closed period, and (2) allow the contribution rate
increase to be phased in over an 8-year period (2009-2016) in determining the required
contribution rate. Both options are automatic, but not mandatory. At a city’s request,
TMRS will recalculate the contribution rate for a city that chooses a 25-year, closed
amortization period. Cities may also choose to pay contributions in excess of the phase-
in rate.
For cities with repeating features in their plans, these changes in the valuation
methodology would likely result initially in higher required contributions and lower funded
ratios. However, the funded ratio should show steady improvement over time. Euless
has adopted the updated service credit and annuity increase provisions on an annually
repeating basis. The schedule of funding progress, presented as Required
Supplementary Information immediately following the notes to the financial statements,
presents multiyear trend information about whether the actuarial value of plan assets is
increasing or decreasing over time relative to the actuarial accrued liability for benefits.
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
52
NOTE 9. EMPLOYEE RETIREMENT SYSTEM – CONTINUED
Contribution – Continued
The changes in actuarial funding method and assumptions adopted for the 2009
valuation resulted in an unfunded actuarial accrued liability (“UAAL”) of $30,786,411
which represents an increase over the prior valuation of approximately $1.38 million.
The funded ratio of the city’s plan increased from 69.5% in 2008 to 69.9% in 2009.
Unfunded
Valuation Actuarial Actuarial Actuarial Annual UAAL
Dated Value of Accrued Accrued Liability Fund Covered as % of
31-Dec Assets Liability ("UAAL")Ratio Payroll Payroll
2007 64,572,668$ 91,528,002$ 26,955,334$ 70.55%20,652,795$ 130.52%
2008 67,152,370 96,562,897 29,410,527 69.54%22,690,833 129.61%
2009 71,502,626 102,289,037 30,786,411 69.90%22,810,769 134.96%
Annual pension cost and percentage of pension cost contributed are as follows:
Annual Actual Net Pension
Fiscal Year Pension Contribution Percentage Obligation at
Ended 9/30 Cost Made Contributed Year End
2008 3,187,849$ 3,187,849$ 100%-$
2009 4,116,079 4,116,079 100%-
2010 4,525,085 2,820,150 79%1,704,935
NOTE 10. OTHER POSTEMPLOYMENT BENEFITS
Postemployment Healthcare Plan
Plan description
The City adopted the City of Euless Post-Employment Benefits Trust (the “OPEB Trust”)
by passage of Resolution No. 09-1319 on September 8, 2009 which authorized
participation in the PARS Public Agencies Post-Retirement Health Care Plan Trust,
including the City of Euless Public Agencies Post-Retirement Health Care Plan (the
“Plan”), as part of the City’s Retirement Program. Article III of the Public Agencies Post-
Retirement Health Care Plan Master Plan Document as adopted provides for the
determination of eligibility under the plan to each participating Employer to the extent
provided in the Employer’s applicable policies. The City’s policies with regard to post-
employment healthcare coverage are governed by the City of Euless Medical and Dental
Plan, the City’s group health insurance plan, the benefits of which are established by
management.
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
53
NOTE 10. OTHER POSTEMPLOYMENT BENEFITS – CONTINUED
Postemployment Healthcare Plan – Continued
The City provides postemployment medical, dental, and vision benefits under the Plan to
eligible retirees and dependents qualifying as one of the eligible classes of dependents
as described in the Plan. To be eligible for coverage under the Plan, an employee must
retire with the City of Euless and be eligible for retirement through TMRS. TMRS
retirement eligibility requirements are described in detail in Note 9. Additionally, written
application to enroll himself/herself and all eligible dependents (for which coverage is
elected) in the Plan must be made by the employee prior to or on the retirement date.
The Plan provides lifetime benefits or until Medicare eligibility is attained. Regardless of
Medicare enrollment status, the Plan will base payment of benefits as though Medicare
were responsible for primary payment of benefits insomuch as allowed by Federal law.
The Plan is a single-employer defined benefit healthcare plan administered by the City
Manager, his/her successor, or his/her designee. Separate financial statements for the
Plan are not issued, but rather are included in the financial statements of the City which
are available on-line at http://www.eulesstx.gov/finance/cafr.htm.
The OPEB Trust is an agent multiple-employer trust arrangement established to provide
economies of scale and efficiency of administration to public agencies. The OPEB Trust
is established as a tax-exempt trust within the meaning of Section 115 of the Internal
Revenue Code and is intended to hold the assets used to fund the City’s post-
employment benefits offered by the City to its employees as specified in the City’s
policies. The OPEB Trust is administered by Public Agency Retirement Services
(“PARS”) pursuant to the Trust Agreement adopted on September 8, 2009 by the City
Council with passage of Resolution No. 09-1319. Upon adoption of the Trust
Agreement, a separate Agency Account was established under the OPEB Trust for the
City, and all assets of the Trust attributable to the City are to be held in the City’s Agency
Account. The assets of the Trust are available only to pay postemployment healthcare
benefits of eligible employees and dependents of the City and other associated
administrative costs.
Funding Policy
A participant in the OPEB Trust is required from time-to-time to contribute to its Agency
Account an amount determined by such Participant at its sole discretion. Such amount
may, but need not, equal such Participant’s annual required contribution (“ARC”) as
determined in accordance with GASB 45. However, it is currently the intent of the Plan
Administrator to annually fund an amount equal to, or in excess of, the ARC. This intent
is subject to change and is subject to annual appropriation.
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
54
NOTE 10. OTHER POSTEMPLOYMENT BENEFITS – CONTINUED
Funding Policy – Continued
Contribution requirements of Plan members and the City are determined by the Plan
Administrator and may be amended by same from time to time. Plan members
contribute:
Medical
and Dental Vision
Retiree Only 492.98$ 6.74$
Retiree plus Children 862.72 11.03
Retiree plus Spouse 1,084.56 13.11
Retiree plus Family 1,429.66 18.50
Monthly Premiums
Retired employees meeting all eligibility requirements as set forth in the Plan that were
hired prior to October 1, 2006 and are either:
a) Retired and enrolled in the Plan on or prior to September 30, 2007; or
b) Retired and not enrolled in the Plan on or prior to September 30, 2007 and meet
guidelines for reinstatement to the Plan; or
c) Employees who were not retired as September 30, 2007 that retire with at least
ten years of service to the City of Euless and have a combined age and years of
service equal to at least 70
will qualify for a service discount on their total premium, subject to annual appropriation,
as set forth in the following:
Contribution Discount
Service Retiree Only
Retiree plus
Children Retiree plus Spouse
Retiree
plus Family
10-14 years 15%30%30%30%
15-19 years 25%40%40%40%
20-24 years 35%50%50%50%
25-29 years 50%65%65%65%
30+ years 60%75%75%75%
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
55
NOTE 10. OTHER POSTEMPLOYMENT BENEFITS – CONTINUED
Funding Policy – Continued
Retired employees meeting all eligibility requirements as set forth in the Plan that were
hired after October 1, 2006 retiring with a minimum of 20 years of service with a
combined age and years of service to the City of Euless equal to at least 80 qualify for a
service discount on their total premium, subject to annual appropriation, as set forth in
the following:
Contribution Discount
Service Retiree Only Children Retiree plus Spouse plus Family
20-24 years 35%50%50%50%
25-29 years 50%65%65%65%
30+ years 60%75%75%75%
Retirees are permitted to participate with active employees in the healthcare plan but
retirees must pay all premiums (less applicable discounts) assigned to them. The city
will continue to apply the applicable discount to surviving spouse/dependents based
upon a deceased employee’s years of service.
Annual OPEB Cost and Net OPEB Obligation
The City’s annual OPEB cost (expense) for the Plan is calculated based on the ARC, an
amount actuarially determined in accordance with the parameters of GASB 45. The
ARC represents the level of funding that, if paid on an on-going basis, is projected to
cover normal cost each year and amortize any unfunded actuarial liabilities (or funding
excess) over a period not to exceed thirty years. The following table represents the
components of the City’s annual OPEB cost for the fiscal year, the amount actually
contributed to the Plan, and any changes in the City’s net OPEB obligation.
Annual required contribution 658,316$
Interest on net OPEB obligation (20,532)
Adjustments to annual required contribution 23,638
Annual OPEB cost (expense)661,422
Contributions made (988,006)
Change in OPEB obligation (326,584)
Net OPEB obligation - beginning of year (293,324)
Net OPEB obligation - end of year (619,908)$
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
56
NOTE 10. OTHER POSTEMPLOYMENT BENEFITS – CONTINUED
Annual OPEB Cost and Net OPEB Obligation – Continued
The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the
plan, and the net OPEB obligation for fiscal year 2010 are as follows:
Discount Annual % of Annual Net OPEB
Rate OPEB Cost Cost Contributed Obligation
9/30/2008 N/A N/A N/A N/A
9/30/2009 7.00%596,540 149.17%(293,324)
9/30/2010 7.00%661,422 149.38%(619,908)
Fiscal Year
Ended
Discount Funded
Rate Ratio
2007 N/A 7%N/A N/A N/A
2008 - 7%5,785,752 - 5,785,752
2009 400,005 7%6,651,203 6.0%6,251,198
Actuarial
Valuation
October 1
Actuarial Value
of Assets
Actuarial
Accrued
Liability (AAL)
Unfunded
AAL (UAAL)
The actuarial accrued liability is determined under the projected unit credit cost method.
Funding Status and Funding Progress
As of October 1, 2009, the most recent actuarial valuation date, the plan was 94%
unfunded. The actuarial value of assets was $400,005, resulting in an unfunded
actuarial accrued liability (“UAAL”) of $6,251,198.
Actuarial valuations of an ongoing plan involve estimates of the value of the reported
amounts and assumptions about the probability of occurrences of events far into the
future. Examples include, but are not limited to, future employment, mortality, and
healthcare cost trends. Amounts determined regarding the funded status of the plan and
the annual required contributions of the employer are subject to continual revision as
actual results are compared with past expectations and new estimates are made about
the future. The schedule of funding progress, presented as required supplementary
information following the notes to the financial statements, presents multi-year trend
information about whether the actuarial value of plan assets is increasing or decreasing
over time relative to the actuarial accrued liabilities for benefits.
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
57
NOTE 10. OTHER POSTEMPLOYMENT BENEFITS – CONTINUED
Actuarial Methods and Assumptions
Projections of benefits for financial reporting purposes are based on the substantive plan
(the plan as understood by the employer and the plan members) and include the types
of benefits provided at the time of each valuation and the historical pattern of sharing of
benefit costs between the employer and plan members at that point. The actuarial
methods and assumptions used include techniques that are designed to reduce the
effects of short-term volatility in actuarial accrued liabilities and the actuarial value of
plan assets, consistent with the long-term perspective of the calculations.
In the October 1, 2009 actuarial valuation, the unit credit actuarial cost method was
used. The actuarial assumptions include a 7% investment rate of return (compounded
annually net after expenses) and an annual healthcare cost trend rate of 9.12% (5.57%
for dental) initially, declining by decrements to an ultimate rate of 5.34% (3.93% for
dental) after nine years (seven years for dental). The UAAL is being amortized over a
thirty-year closed period utilizing a level dollar amortization method.
Supplemental Death Benefits Plan
Plan Description
The City also participates in the cost sharing multiple-employer defined benefit group-
term life insurance plan operated by the Texas Municipal Retirement System (“TMRS”)
known as the Supplemental Death Benefits Fund (“SDBF”). The City elected, by
ordinance, to provide group-term life insurance coverage to both current and retired
employees. The City may terminate coverage under and discontinue participation in the
SDBF by adopting an ordinance before November 1 of any year to be effective the
following January 1.
The death benefit for active employees provides a lump-sum payment approximately
equal to the employee’s annual salary (calculated based on the employee’s actual
earnings, for the 12-month period preceding the month of death); retired employees are
insured for $7,500; this retiree coverage is an OPEB.
Funding Policy
The funding policy for the SDBF program is to assure that adequate resources are
available to meet all death benefit payments for the upcoming year; the intent is not to
pre-fund retiree term life insurance during employees’ entire careers. Contributions are
utilized to fund active member deaths on a pay-as-you-go basis. Any excess
contributions over payments then become net assets available for OPEB.
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
58
NOTE 10. OTHER POSTEMPLOYMENT BENEFITS – CONTINUED
Supplemental Death Benefits Plan – Continued
Contributions
Contribution requirements of the participating employers are established and may be
amended by the TMRS Board of Trustees. The City is required to contribute at a rate
assessed each year by the TMRS Board of Trustees, currently .02% of covered payroll.
The TMRS Board of Trustees sets the employer contribution rate based on the mortality
and service experience of all employees covered by the plan and the demographics
specific to the workforce of the City. There is a one-year delay between the actuarial
valuation that serves as the basis for the employer contribution rate and the calendar
year in which the rate goes into effect.
Contributions are made monthly based on covered payroll of employee members of the
City. The City contributes to the SDBF at the contractually required rate as determined
by the annual actuarial valuation. The rate is equal to the cost of providing one-year
term life insurance. The City’s contributions rates for the last three calendar/plan years
are as follows:
Annual Required Actual Contribution % of ARC
Plan Year Contribution (Rate)Made (Rate)Contributed
2007 0.03%0.03%100%
2008 0.03%0.03%100%
2009 0.02%0.02%100%
NOTE 11. EXCESS OF EXPENDITURES OVER APPROPRIATIONS
As of September 30, 2010, the following individual funds had an excess of expenditures
over appropriations:
Police drug enforcement fund $ 152,971
Public safety grant special fund 122,039
REQUIRED SUPPLEMENTARY INFORMATION
CITY OF EULESS, TEXAS
SCHEDULE OF FUNDING PROGRESS FOR PARTICIPATION IN
TEXAS MUNICIPAL RETIREMENT SYSTEM
SEPTEMBER 30, 2010
59
Unfunded
Valuation Actuarial Actuarial Actuarial Annual UAAL
Dated Value of Accrued Accrued Liability Fund Covered as % of
31-Dec Assets Liability ("UAAL")Ratio Payroll Payroll
2000 42,116,506$ 50,370,674$ 8,254,168$ 83.61%14,189,470$ 58.17%
2001 45,049,200 53,684,325 8,635,125 83.91%15,092,260 57.22%
2002 47,212,730 57,449,068 10,236,338 82.18%16,788,857 60.97%
2003 50,659,933 63,214,918 12,554,985 80.14%17,207,460 72.96%
2004 54,239,808 67,007,298 12,767,490 80.95%17,435,628 73.23%
2005 57,323,394 70,878,494 13,555,100 80.88%18,324,792 73.97%
2006 61,871,370 76,751,170 14,879,800 80.61%19,224,466 77.40%
2007 64,572,668 91,528,002 26,955,334 70.55%20,652,795 130.52%
2008 67,152,370 96,562,897 29,410,527 69.54%22,690,833 129.61%
2009 71,502,626 102,289,037 30,786,411 69.90%22,810,769 134.96%
The Schedule of Funding Progress summarizes the actuarial value of the plan's assets and
actuarial accrued liability as of December 31, 2009 and each of the nine preceding calendar
years. The data presented in the schedule was obtained annually from TMRS and was based
upon the annual actuarial valuation for the years represented. The city is financially responsible
for its own portion of the plan. Therefore, the numbers shown above reflect only the condition
of the City's plan.
The schedule is presented to provide a consistent basis for measuring the plan's annual
progress toward funding its actuarial accrued liability in accordance with its actuarial funding
method. The primary measure of funding progress is the plan's funded ratio (i.e. actuarial value
of assets expressed as a percentage of the actuarial accrued liability). An increase in the
funded ratio indicates improvement in the plan's ability to pay all projected benefits as they
come due. The plan is fully funded if the funded ratio is greater than or equal to 100%. During
the year ended December 31, 2009, the plan's funded ratio was 69.90%.
The Schedule of Funding Progress also discloses the relationship between the plan's covered
payroll (i.e. all elements included in compensation paid to active members on which
contributions are based) and the unfunded actuarial accrued liability ("UAAL"). This
relationship, expressed as a ratio, is a measure of the significance of the UAAL relative to the
capacity to pay all contributions required to fund the liability. During the year ended
December 31, 2009, the plan's ratio of the UAAL to its covered payroll increased to 134.96%.
For the actuarial valuation dated December 31, 2008, the TMRS Board of Trustees adopted
changes in the actuarial funding method and assumptions; as such, those changes are reflected
in the above numbers. For a complete description of these changes, see Note 9 Employee
Retirement System in the accompanying notes to the financial statements.
Calendar Years
2010 2009 2008 2007 2006
City's annual contribution stated
as a % of covered payroll 16.49%15.19%14.51%14.25%14.07%
Note Source: TMRS Comprehensive Annual Report for the Year Ending December 31, 2009 and City records.
CITY OF EULESS, TEXAS
SCHEDULE OF FUNDING PROGRESS – OPEB TRUST
SEPTEMBER 30, 2010
60
Discount Funded
Rate Ratio
2008 -$ 7%5,785,752$ 0%5,785,752$
2009 400,005 7%6,651,203 6%6,251,198
Actuarial
Accrued Liability
(AAL)
Unfunded AAL
(UAAL)
Actuarial
Valuation
October 1
Actuarial Value
of Assets
The Schedule of Funding Progress summarizes the actuarial value of the plan’s assets and
actuarial accrued liability as of October 1, 2009 and the preceding calendar year for which the
trust has been in effect.
The schedule is presented to provide a consistent basis for measuring the plan’s annual
progress toward funding its actuarial accrued liability in accordance with its actuarial funding
method. The primary measure of funding progress is the plan’s funded ratio (i.e. actuarial value
of assets expressed as a percentage of the actuarial accrued liability). An increase in the
funded ratio indicates an improvement in the plan’s ability to pay all projected benefits as they
come due. The plan is fully funded if the funded ratio is greater than or equal to 100%. During
the year ended September 30, 2010, the plan’s funded ratio rose to 6%.
For more information concerning the plan and the actuarial method and assumptions, see Note
10 Other Post Employment Benefits in the Notes to the Financial Statements.
CITY OF EULESS, TEXAS
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
YEAR ENDED SEPTEMBER 30, 2010
61
Variance with
Actual Final Budget
GAAP Positive
Original Final Basis (Negative)
Revenues
General property tax
Current and delinquent taxes 9,403,488$ 9,403,488$ 9,363,453$ (40,035)$
Penalty and interest 81,000 81,000 59,407 (21,593)
Total property tax 9,484,488 9,484,488 9,422,860 (61,628)
Gross receipts tax
Telephone line access fee 415,000 415,000 370,732 (44,268)
Electric company 1,661,143 1,661,143 1,566,537 (94,606)
Gas company 431,565 431,565 368,176 (63,389)
Cable TV 500,000 500,000 645,011 145,011
City garbage service 175,000 175,000 168,038 (6,962)
W ater and wastewater system 901,379 901,379 834,973 (66,406)
Others 95,500 95,500 85,214 (10,286)
Total gross receipts tax 4,179,587 4,179,587 4,038,681 (140,906)
General sales tax 8,725,658 8,725,658 7,787,954 (937,704)
Fines and fees
Municipal court fines 2,825,200 2,825,200 2,936,150 110,950
Jail income 250,000 250,000 290,510 40,510
Dog licenses and pound fees 12,200 12,200 8,194 (4,006)
Ambulance fees 850,000 850,000 883,868 33,868
Library fees 36,100 36,100 35,867 (233)
Zoning fees 10,100 10,100 22,724 12,624
Deferred adjudication fee 146,000 146,000 158,750 12,750
Total fines and fees 4,129,600 4,129,600 4,336,063 206,463
Licenses and permits
Building permits 400,000 400,000 337,569 (62,431)
Miscellaneous permits 213,685 213,685 285,191 71,506
Minimum housing 200,330 200,330 97,158 (103,172)
Total licenses and permits 814,015 814,015 719,918 (94,097)
Investment income 142,500 142,500 113,660 (28,840)
Intergovernmental 343,874 343,874 376,512 32,638
Other revenues
Rental income 268,000 268,000 300,900 32,900
Swimming pools 15,000 15,000 15,297 297
Miscellaneous income 139,450 139,450 182,802 43,352
Total other revenues 422,450 422,450 498,999 76,549
Total revenues 28,242,172$ 28,242,172$ 27,294,647$ (947,525)$
Budgeted Amounts
CITY OF EULESS, TEXAS
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
YEAR ENDED SEPTEMBER 30, 2010
(CONTINUED)
62
Variance with
Actual Final Budget
GAAP Positive
Original Final Basis (Negative)
Expenditures
Current
Culture and recreation 2,836,414$ 2,836,414$ 2,498,043$ 338,371$
Development services 1,250,441 1,250,441 1,020,319 230,122
General and administrative 8,372,569 8,372,569 6,966,698 1,405,871
Highways and streets 989,379 989,379 610,996 378,383
Public safety 17,532,804 17,532,804 17,133,807 398,997
Total expenditures 30,981,607 30,981,607 28,229,863 2,751,744
Excess (deficiency) of
revenues over expenditures (2,739,435) (2,739,435) (935,216) 1,804,219
Other financing sources (uses)
Transfers in 1,681,379 1,681,379 1,614,599 (66,780)
Transfers out (684,738) (684,738) (708,782)(24,044)
Total other financing
sources (uses), net 996,641 996,641 905,817 (90,824)
Net change in fund balance (1,742,794) (1,742,794) (29,399) 1,713,395
Fund balance,
beginning of year 7,643,858 7,643,858 7,643,858 -
Fund balance, end of year 5,901,064$ 5,901,064$ 7,614,459$ 1,713,395$
Budgeted Amounts
CITY OF EULESS, TEXAS
BUDGETARY COMPARISON SCHEDULE – CAR RENTAL TAX SPECIAL REVENUE FUND
YEAR ENDED SEPTEMBER 30, 2010
63
Variance with
Actual Final Budget
GAAP Positive
Original Final Basis (Negative)
Revenues
Car rental tax 11,700,000$ 11,700,000$ 11,480,736$ (219,264)$
Investment income 100,000 100,000 60,851 (39,149)
Total revenues 11,800,000 11,800,000 11,541,587 (258,413)
Expenditures
General and administrative 7,800,000 7,800,000 7,631,435 168,565
Total expenditures 7,800,000 7,800,000 7,631,435 168,565
Excess (deficiency) of
revenues over expenditures 4,000,000 4,000,000 3,910,152 (89,848)
Other financing uses
Transfers out (2,268,087) (2,268,087) (2,268,087) -
Total other
financing uses (2,268,087) (2,268,087) (2,268,087) -
Net change in fund balance 1,731,913 1,731,913 1,642,065 (89,848)
Fund balance, beginning of year 4,235,420 4,235,420 4,235,420 -
Fund balance, end of year 5,967,333$ 5,967,333$ 5,877,485$ (89,848)$
Budgeted Amounts
CITY OF EULESS, TEXAS
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
YEAR ENDED SEPTEMBER 30, 2010
64
NOTE 1. BUDGET BASIS OF ACCOUNTING
The City Council adheres to the following procedures in establishing budgetary data
reflected in the financial statements:
1. Prior to August 1, the City Manager submits to the City Council a proposed operating
budget for the fiscal year commencing the following October 1. The operating
budget includes proposed expenditures and expenses and means of financing them.
2. Public hearings are conducted to obtain taxpayers' comments.
3. Prior to September 21, the budget is legally enacted through passage of an
ordinance and a budgetary report is prepared.
4. The City Manager is authorized to transfer budgeted amounts between departments
within any fund; however, any revision that alters the total expenditures of any fund
must be approved by the City Council. The budget presented reflects revisions
made during the year. The legal level of control is at the fund level.
5. A budget is legally adopted for the general fund and special revenue funds on a
basis consistent with accounting principles generally accepted in the United States of
America. Formal budgetary integration is employed as a management control device
during the year for the general fund and special revenue funds. Appropriations and
encumbrances lapse at year-end.
6. Formal budgetary integration is not employed for the debt service funds because
effective budgetary control is alternatively achieved through general obligation bond
indenture provisions.
7. Budgetary data for the capital projects funds has not been presented in the
accompanying basic financial statements as such funds are budgeted over the life of
the respective project and not on an annual basis. Accordingly, formal budgetary
integration of the capital projects funds is not employed and comparison of actual
results of operations to budgetary data for such funds is not presented.
8. Appropriated budgets for the proprietary funds are also adopted but have not been
presented since reporting on such budgets is not legally required.
The Budgetary Comparison Schedules — general fund and car rental tax special
revenue fund present a comparison of budgetary data to actual results. The general
fund and car rental tax special revenue fund utilize the same basis of accounting for both
budgetary purposes and actual results.
COMBINING AND INDIVIDUAL FUND
STATEMENTS AND SCHEDULES
65
NON-MAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
Special revenue funds are used to account for specific revenues that are legally restricted to
expenditures for particular purposes.
Hotel/Motel Fund – to account for the operations and expenditures for which hotel/motel
occupancy taxes are used. Occupancy tax revenues are used primarily for advertising
and promotion of the City.
Police Drug Enforcement Fund – to account for proceeds from sale of assets seized in
connection with drug arrests. Revenues are used solely for police department
expenditures.
Half-Penny Sales Tax Fund – to account for the sales tax revenues and expenditures of
the Euless Development Corporation, a component unit of the City of Euless. The
expenditures of the half-penny sales tax can only be spent on parks, library, debt
service, and economic development activities within the City of Euless.
Crime Control and Prevention District Fund – to account for the revenues and
expenditures of this component unit of the City of Euless. The revenues are collected
from sales taxes and expenditures can only be spent for police department operations
and capital as approved by the Crime Control and Prevention District Board.
Public Safety Grant Fund – to account for grant revenues received by the police
department which must be spent in accordance with the grant provisions.
Juvenile Case Fund – to account for a fee added to municipal court citations. This fee is
used to support the expenditures associated with juvenile case processing.
66
NON-MAJOR GOVERNMENTAL FUNDS – Continued
CAPITAL PROJECTS
Park Improvements Certificates of Obligation Fund (1990) – to account for the
construction of park facilities. Financing was provided from the sale of Certificates of
Obligation of $2,000,000 in 1990.
Street Assessments Fund – to account for receipt of funds for special assessment
collection and subsequent construction of improvements to various street and drainage
projects.
Half-Penny Sales Tax Capital Projects Fund – to account for bond proceeds to be
expended for construction projects funded by the Euless Development Corporation, a
component unit of the City of Euless.
Developers' Contribution Fund – to account for funds received for the purpose of making
new and future improvements to various development areas within the City.
Car Rental Capital Projects Fund – to account for building and infrastructure projects
that are funded from the short-term motor vehicle tax.
Police Facility Construction Fund – to account for the construction of a police facility.
General Obligation Capital Projects Fund – to account for various general construction
projects within the City.
Redevelopment Fund – to account for land acquisition and revitalization projects
designed to enhance development and promote redevelopment throughout the
community.
CITY OF EULESS, TEXAS
COMBINING BALANCE SHEET
NON-MAJOR GOVERNMENTAL FUNDS
SEPTEMBER 30, 2010
67
Police Crime
Drug Half Control and Public Special
Hotel/Enforce-Penny Prevention Safety Juvenile Revenue
Motel ment Sales Tax District Grant Case Funds
Fund Fund Fund Fund Fund Fund Total
ASSETS
Deposits and investments 106,169$ 226,810$ 1,525,802$ 101,670$ 56,473$ 58,645$ 2,075,569$
Accounts receivable 60,540 24,879 - - 19,520 3,342 108,281
Accrued interest receivable - - 5,808 - - - 5,808
Prepaids 424 106 5,768 134 - - 6,432
Due from other governments - - 602,374 262,834 - - 865,208
Total assets 167,133$ 251,795$ 2,139,752$ 364,638$ 75,993$ 61,987$ 3,061,298$
LIABILITIES AND
FUND BALANCES
Liabilities
Accounts payable 98$ 30,518$ 63,771$ 6,366$ 260$ -$ 101,013$
Accrued salaries and wages - - 27,123 30,614 1,242 1,183 60,162
Deferred income - - 47,213 - - 3,342 50,555
Total liabilities 98 30,518 138,107 36,980 1,502 4,525 211,730
Fund Balances
Reserved for
Debt service - - 938,998 - - - 938,998
Historical preservation 1,245 - - - - - 1,245
Development agreements - - - - - - -
Prepaids 424 106 5,768 134 - - 6,432
Unreserved, undesignated 165,366 221,171 1,056,879 327,524 74,491 57,462 1,902,893
Total fund balances 167,035 221,277 2,001,645 327,658 74,491 57,462 2,849,568
Total liabilities and fund balances 167,133$ 251,795$ 2,139,752$ 364,638$ 75,993$ 61,987$ 3,061,298$
Special Revenue Funds
68
Park
Improvements Half-Penny Car Rental Police General Capital Total
Certificates Street Sales Tax Developers'Capital Facility Capital Re-Project Non-major
of Obligation Assessments Capital Contribution Projects Construction Projects development Funds Governmental
Fund (1990)Fund Projects Fund Fund Fund Fund Fund Totals Funds
125$ 44,970$ 1,504,594$ 1,454,496$ 194,939$ 108,370$ 2,605,733$ 289,853 6,203,080$ 8,278,649$
- - - - - - 78,846 - 78,846 187,127
- - 6,855 - - - 7,786 - 14,641 20,449
- - - - - - - - - 6,432
- - - - - - - - - 865,208
125$ 44,970$ 1,511,449$ 1,454,496$ 194,939$ 108,370$ 2,692,365$ 289,853$ 6,296,567$ 9,357,865$
-$ -$ 562$ -$ -$ -$ 836,122$ -$ 836,684$ 937,697$
- - - - - - - - - 60,162
- - - - - - - - - 50,555
- - 562 - - - 836,122 - 836,684 1,048,414
- - - - - - - - - 938,998
- - - - - - - - - 1,245
- - - 1,454,496 - - - - 1,454,496 1,454,496
- - - - - - - - - 6,432
125 44,970 1,510,887 - 194,939 108,370 1,856,243 289,853 4,005,387 5,908,280
125 44,970 1,510,887 1,454,496 194,939 108,370 1,856,243 289,853 5,459,883 8,309,451
125$ 44,970$ 1,511,449$ 1,454,496$ 194,939$ 108,370$ 2,692,365$ 289,853$ 6,296,567$ 9,357,865$
Capital Projects Funds
CITY OF EULESS, TEXAS
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND
BALANCES – NON-MAJOR GOVERNMENTAL FUNDS
YEAR ENDED SEPTEMBER 30, 2010
69
Police Crime
Drug Half Control and Public Special
Hotel/Enforce-Penny Prevention Safety Juvenile Revenue
Motel ment Sales Tax District Grant Case Funds
Fund Fund Fund Fund Fund Fund Totals
Revenues
Gross receipts tax 237,429$ - $ - $ - $ - $ - $ 237,429$
General sales tax - - 3,115,182 1,434,462 - - 4,549,644
Investment income 175 478 6,793 97 - 9 7,552
DEA revenues - 15,350 - - - - 15,350
Rents and royalties - - - - - - -
Other revenues 21 24,879 - - 344,382 87,043 456,325
Total revenues 237,625 40,707 3,121,975 1,434,559 344,382 87,052 5,266,300
Expenditures
Culture and recreation - - 1,622,392 - - - 1,622,392
Development services - - 231,387 - - - 231,387
General and administrative 16,232 - 122,116 - - 46,388 184,736
Public safety - 155,971 - 1,340,895 380,990 - 1,877,856
Debt service
Principal - - 715,000 - - - 715,000
Interest and fiscal charges - - 211,928 - - - 211,928
Capital outlay - - - 64,609 - - 64,609
Total expenditures 16,232 155,971 2,902,823 1,405,504 380,990 46,388 4,907,908
Excess (deficiency) of
revenues over expenditures 221,393 (115,264) 219,152 29,055 (36,608) 40,664 358,392
Other financing sources (uses)
Transfers in - - 21,679 - 37,315 - 58,994
Transfers out (207,669) - (65,561) (19,388) - (1,020) (293,638)
Total other
financing sources (uses), net (207,669) - (43,882) (19,388) 37,315 (1,020) (234,644)
Net change in fund balances 13,724 (115,264) 175,270 9,667 707 39,644 123,748
Fund balance,
beginning of year 153,311 336,541 1,826,375 317,991 73,784 17,818 2,725,820
Fund balance, end of year 167,035$ 221,277$ 2,001,645$ 327,658$ 74,491$ 57,462$ 2,849,568$
Special Revenue Funds
70
Park
Improvements Half-Penny Car Rental Police General Capital Total
Certificates of Street Sales Tax Developers'Capital Facility Capital Re-Project Non-major
Obligation Assessments Capital Contribution Projects Construction Projects development Funds Governmental
Fund (1990)Fund Projects Fund Fund Fund Fund Fund Totals Funds
- $ - $ - $ - $ - $ - $ - $ - $ - $ 237,429$
- - - - - - - - - 4,549,644
- - 19,497 2,827 219 188 35,682 952 59,365 66,917
- - - - - - - - - 15,350
- - - - - - 142,405 - 142,405 142,405
- - - 22,855 - - - - 22,855 479,180
- - 19,497 25,682 219 188 178,087 952 224,625 5,490,925
- - - - - - - - - 1,622,392
- - - - - - - - - 231,387
- - - - - - - 13,605 13,605 198,341
- - - - - - - - - 1,877,856
- - - - - - - - - 715,000
- - - - - - - - - 211,928
- - 1,215,319 - - - 4,750,896 11,501 5,977,716 6,042,325
- - 1,215,319 - - - 4,750,896 25,106 5,991,321 10,899,229
- - (1,195,822) 25,682 219 188 (4,572,809) (24,154) (5,766,696) (5,408,304)
- - 50,000 - 100,000 - 775,000 - 925,000 983,994
- - (21,679) (125,062) - - - - (146,741) (440,379)
- - 28,321 (125,062) 100,000 - 775,000 - 778,259 543,615
- - (1,167,501) (99,380) 100,219 188 (3,797,809) (24,154) (4,988,437) (4,864,689)
125 44,970 2,678,388 1,553,876 94,720 108,182 5,654,052 314,007 10,448,320 13,174,140
125$ 44,970$ 1,510,887$ 1,454,496$ 194,939$ 108,370$ 1,856,243$ 289,853$ 5,459,883$ 8,309,451$
Capital Projects Funds
CITY OF EULESS, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES –
BUDGET AND ACTUAL
HOTEL / MOTEL SPECIAL REVENUE FUND
YEAR ENDED SEPTEMBER 30, 2010
71
Variance with
Actual Final Budget
GAAP Positive
Original Final Basis (Negative)
Revenues
Gross receipts tax 375,000$ 375,000$ 237,429$ (137,571)$
Investment income 1,500 1,500 175 (1,325)
Other revenues - - 21 21
Total revenues 376,500 376,500 237,625 (138,875)
Expenditures
General and administrative 168,085 168,085 16,232 151,853
Total expenditures 168,085 168,085 16,232 151,853
Other financing uses
Transfers out (257,669) (257,669) (207,669) 50,000
Total other financing uses (257,669) (257,669) (207,669) 50,000
Net change in fund balance (49,254) (49,254) 13,724 62,978
Fund balance, beginning of year 153,311 153,311 153,311 -
Fund balance, end of year 104,057$ 104,057$ 167,035$ 62,978$
Budgeted Amounts
CITY OF EULESS, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES –
BUDGET AND ACTUAL
POLICE DRUG ENFORCEMENT SPECIAL REVENUE FUND
YEAR ENDED SEPTEMBER 30, 2010
72
Variance with
Actual Final Budget
GAAP Positive
Original Final Basis (Negative)
Revenues
Investment income 4,000$ 4,000$ 478$ (3,522)$
DEA revenues - - 15,350 15,350
Other revenues - - 24,879 24,879
Total revenues 4,000 4,000 40,707 36,707
Expenditures
Public safety 3,000 3,000 155,971 (152,971)
Total expenditures 3,000 3,000 155,971 (152,971)
Net change in fund balance 1,000 1,000 (115,264) (116,264)
Fund balance, beginning of year 336,541 336,541 336,541 -
Fund balance, end of year 337,541$ 337,541$ 221,277$ (116,264)$
Budgeted Amounts
CITY OF EULESS, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES –
BUDGET AND ACTUAL
HALF-PENNY SALES TAX SPECIAL REVENUE FUND
YEAR ENDED SEPTEMBER 30, 2010
73
Variance with
Actual Final Budget
GAAP Positive
Original Final Basis (Negative)
Revenues
General sales tax 3,490,264$ 3,490,264$ 3,115,182$ (375,082)$
Investment income 7,500 7,500 6,793 (707)
Total revenues 3,497,764 3,497,764 3,121,975 (375,789)
Expenditures
Culture and recreation 1,718,028 1,718,028 1,622,392 95,636
Development services 474,223 474,223 231,387 242,836
General and administrative 415,705 415,705 122,116 293,589
Debt service
Principal 715,000 715,000 715,000 -
Interest and fiscal charges 213,938 213,938 211,928 2,010
Total expenditures 3,536,894 3,536,894 2,902,823 634,071
Other financing uses
Transfers in - - 21,679 21,679
Transfers out (65,561) (65,561) (65,561) -
Total other
financing uses (65,561) (65,561) (43,882) 21,679
Net change in fund balance (104,691) (104,691) 175,270 279,961
Fund balance, beginning of year 1,826,375 1,826,375 1,826,375 -
Fund balance, end of year 1,721,684$ 1,721,684$ 2,001,645$ 279,961$
Budgeted Amounts
CITY OF EULESS, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES –
BUDGET AND ACTUAL
CRIME CONTROL AND PREVENTION DISTRICT SPECI AL REVENUE FUND
YEAR ENDED SEPTEMBER 30, 2010
74
Variance with
Actual Final Budget
GAAP Positive
Original Final Basis (Negative)
Revenues
General sales tax 1,720,565$ 1,720,565$ 1,434,462$ (286,103)$
Investment income 1,500 1,500 97 (1,403)
Total revenues 1,722,065 1,722,065 1,434,559 (287,506)
Expenditures
Public safety 1,674,792 1,674,792 1,340,895 333,897
Capital outlay 75,733 75,733 64,609 11,124
Total expenditures 1,750,525 1,750,525 1,405,504 345,021
Other financing uses
Transfers out (19,388) (19,388) (19,388) -
Total other financing uses (19,388) (19,388) (19,388) -
Net change in fund balance (47,848) (47,848) 9,667 57,515
Fund balance, beginning of year 317,991 317,991 317,991 -
Fund balance, end of year 270,143$ 270,143$ 327,658$ 57,515$
Budgeted Amounts
CITY OF EULESS, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES –
BUDGET AND ACTUAL
PUBLIC SAFETY GRANT SPECI AL REVENUE FUND
YEAR ENDED SEPTEMBER 30, 2010
75
Actual Final Budget
GAAP Positive
Original Final Basis (Negative)
Revenues
Other revenues 246,213$ 246,213$ 344,382$ 98,169$
Total revenues 246,213 246,213 344,382 98,169
Expenditures
Public safety 258,951 258,951 380,990 (122,039)
Total expenditures 258,951 258,951 380,990 (122,039)
Other financing sources
Transfers in 12,738 12,738 37,315 24,577
Total other financing sources 12,738 12,738 37,315 24,577
Net change in fund balance - - 707 707
Fund balance, beginning of year 73,784 73,784 73,784 -
Fund balance, end of year 73,784$ 73,784$ 74,491$ 707$
Budgeted Amounts
CITY OF EULESS, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES –
BUDGET AND ACTUAL
JUVENILE CASE SPECIAL REVENUE FUND
YEAR ENDED SEPTEMBER 30, 2010
76
Variance with
Actual Final Budget
GAAP Positive
Original Final Basis (Negative)
Revenues
Investment income -$ -$ 9$ 9$
Other revenues 75,000 75,000 87,043 12,043
Total revenues 75,000 75,000 87,052 12,052
Expenditures
General and administrative 54,591 54,591 46,388 8,203
Total expenditures 54,591 54,591 46,388 8,203
Other financing sources
Transfers out (1,020) (1,020) (1,020) -
Total other
financing sources (uses)(1,020) (1,020) (1,020) -
Net change in fund balance 19,389 19,389 39,644 20,255
Fund balance, beginning of year 17,818 17,818 17,818 -
Fund balance, end of year 37,207$ 37,207$ 57,462$ 20,255$
Budgeted Amounts
77
NON-MAJOR PROPRIETARY FUNDS
Enterprise funds are used to account for operations financed and operated in a manner similar
to private business enterprises where the intent of the government's council is to recover the
costs of providing goods or services to the general public on a continuing basis primarily
through user charges; or where the government's council has decided that periodic
determination of net income is appropriate for accountability purposes.
Recreation Classes – to account for the operation of recreational programs and
activities which are offered to groups and individuals on a fee basis.
Texas Star Sports Complex – to account for the operation and maintenance of
Softball W orld and The Parks at Texas Star Complexes, supported primarily by
user charges.
Arbor Daze Fund – to account for the receipts and disbursements of the annual
Arbor Daze Festival, supported primarily by user charges.
CITY OF EULESS, TEXAS
COMBINING STATEMENT OF NET ASSETS
NON-MAJOR PROPRIETARY FUNDS
SEPTEMBER 30, 2010
(1 of 2)
78
Recreation Texas Star Arbor
Classes Sports Complex Daze Totals
ASSETS
Current assets
Deposits and investments 344,986$ 1,125,267$ 31,030$ 1,501,283$
Accounts receivable and
unbilled revenue 50 30,800 - 30,850
Prepaids and deposits 60 13,997 - 14,057
Inventory - 70,723 - 70,723
Total current assets 345,096 1,240,787 31,030 1,616,913
Non-current assets
Bond issuance cost, net - 15,489 - 15,489
Net OPEB asset 555 5,155 - 5,710
Total non-current assets 555 20,644 - 21,199
Property, plant, and equipm ent, at cost
Land - 584,532 - 584,532
Building - 488,275 - 488,275
Equipment 89,658 136,016 - 225,674
Im provem ents - 7,675,408 - 7,675,408
Construction in progress - 3,900 - 3,900
Total property, plant, and equipm ent 89,658 8,888,131 - 8,977,789
Less accumulated depreciation 66,861 3,146,108 - 3,212,969
Net property, plant, and equipment 22,797 5,742,023 - 5,764,820
Total non-current assets 23,352 5,762,667 - 5,786,019
Total assets 368,448$ 7,003,454$ 31,030$ 7,402,932$
CITY OF EULESS, TEXAS
COMBINING STATEMENT OF NET ASSETS
NON-MAJOR PROPRIETARY FUNDS
SEPTEMBER 30, 2010
(2 of 2)
79
Recreation Texas Star Arbor
Classes Sports Complex Daze Totals
LIABILITIES
Current liabilities
Payable from current assets
Accounts payable 4,063$ 19,323$ - $ 23,386$
Accrued salaries and wages 1,391 13,170 - 14,561
Current portion of bonds payable - 135,000 - 135,000
Accrued interest - 3,682 - 3,682
Total current liabilities 5,454 171,175 - 176,629
Non-current liabilities
Net pension obligation 4 6,123 - 6,127
Bonds payable - 713,039 - 713,039
Total non-current liabilities 4 719,162 - 719,166
Total liabilities 5,458 890,337 - 895,795
NET ASSETS
Invested in capital assets,
net of related debt 22,797 4,893,984 - 4,916,781
Unrestricted 340,193 1,219,133 31,030 1,590,356
Total net assets 362,990$ 6,113,117$ 31,030$ 6,507,137$
CITY OF EULESS, TEXAS
COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES
IN NET ASSETS
NON-MAJOR PROPRIETARY FUNDS
YEAR ENDED SEPTEMBER 30, 2010
80
Recreation Texas Star Arbor
Classes Sports Complex Daze Totals
Operating revenues
Recreation fees 313,860$ - $ - $ 313,860$
Service fees and miscellaneous - 1,568,258 55,298 1,623,556
Total operating revenues 313,860 1,568,258 55,298 1,937,416
Operating expenses
Recreation classes 321,460 - - 321,460
Texas Star Sports Complex - 1,145,495 - 1,145,495
Arbor Daze - - 53,306 53,306
Depreciation 4,467 291,753 - 296,220
Amortization - 9,262 - 9,262
Total operating expenses 325,927 1,446,510 53,306 1,825,743
Operating income(loss)(12,067) 121,748 1,992 111,673
Nonoperating revenues (expenses)
Investment income 609 3,778 - 4,387
Gain (loss) on sale of capital asset 1,958 1,535 - 3,493
Interest expense - (30,675) - (30,675)
Total nonoperating revenues
(expenses), net 2,567 (25,362) - (22,795)
Income (loss) before transfers (9,500) 96,386 1,992 88,878
Other financing sources (uses)
Transfers in - - -
Transfers out (347) (3,225) - (3,572)
Change in net assets (9,847) 93,161 1,992 85,306
Net assets, beginning of year 372,837 6,019,956 29,038 6,421,831
Net assets, end of year 362,990$ 6,113,117$ 31,030$ 6,507,137$
CITY OF EULESS, TEXAS
COMBINING STATEMENT OF CASH FLOWS
NON-MAJOR PROPRIETARY FUNDS
YEAR ENDED SEPTEMBER 30, 2010
81
Recreation Texas Star Arbor
Classes Sports Complex Daze Totals
OPERATING ACTIVITIES
Cash received from customers 315,704$ 1,544,511$ 55,296$ 1,915,511$
Cash payments to suppliers for goods and services (242,024) (880,584) (53,304) (1,175,912)
Cash payments to employees for services (76,885) (281,568) - (358,453)
Net cash provided by (used in) operating activities (3,205) 382,359 1,992 381,146
NONCAPITAL FINANCING ACTIVITIES
Transfers in - - - -
Transfers out (347) (3,225) - (3,572)
Net cash used in noncapital financing activities (347) (3,225) - (3,572)
CAPITAL AND RELATED FINANCING ACTIVITIES
Interest paid on bonds - (31,081) - (31,081)
Reduction in bonds payable - (130,000) - (130,000)
Purchase of capital assets - (14,923) - (14,923)
Proceeds from sale of capital assets 1,959 1,535 - 3,494
Net cash provided by (used in) capital
and related financing activities 1,959 (174,469) - (172,510)
INVESTING ACTIVITIES
Interest received on investments 609 9,245 - 9,854
Net cash provided by investing activities 609 9,245 - 9,854
Net change in cash and
and cash equivalents (984) 213,910 1,992 214,918
Cash and cash equivalents, beginning of year 345,970 911,357 29,038 1,286,365
Cash and cash equivalents, end of year 344,986$ 1,125,267$ 31,030$ 1,501,283$
Reconciliation of operating income (loss) to net cash
provided by (used in) operating activities
Operating income (loss)(12,067)$ 121,748$ 1,992$ 111,673$
Adjustments to reconcile operating income (loss)
to net cash provided by operating activities
Depreciation and amortization 4,467 301,015 - 305,482
Changes in assets and liabilities:
Accounts receivable and unbilled revenue 1,842 (23,187) - (21,345)
Deferred income - (560) - (560)
Prepaids and deposits 767 3,295 - 4,062
Net OPEB asset (555) (5,155) (5,710)
Net pension obligation 4 6,123 6,127
Inventory - (14,754) - (14,754)
Accounts payable 1,056 (2,729) - (1,673)
Accrued salaries and wages 1,281 (3,437) - (2,156)
Net cash provided by (used in) operating activities (3,205)$ 382,359$ 1,992$ 381,146$
82
INTERNAL SERVICE FUNDS
Internal service funds are used to account for the financing of goods or services provided by
one department to other departments of the City and to other government units on a cost
reimbursement basis.
Equipment Replacement Fund - to account for the accumulation of funds to be
used for replacement of existing equipment. Funding is provided annually by the
user departments.
Insurance Fund - to account for the revenues and expenses resulting from
providing health insurance to the City's employees.
Risk Management Workers’ Compensation Fund - to account for the revenue and
expenses applicable to providing workers’ compensation coverage for all City
employees, as well as, general liability and property coverage.
CITY OF EULESS, TEXAS
COMBINING STATEMENT OF NET ASSETS
INTERNAL SERVICE FUNDS
SEPTEMBER 30, 2010
83
Equipment Risk
Replacement Insurance Management
Fund Fund Fund Total
Deposits and investments 2,167,059$ 2,967,157$ 1,140,341$ 6,274,557$
Accounts receivable - 125,596 - 125,596
Accrued interest receivable 856 4,210 - 5,066
Prepaid items - 30,541 - 30,541
Total current assets 2,167,915 3,127,504 1,140,341 6,435,760
Property, plant, and equipment, at cost
Equipment 7,655,271 54,956 18,649 7,728,876
Less accum ulated depreciation 4,825,324 54,956 11,405 4,891,685
Net property, plant, and equipm ent 2,829,947 - 7,244 2,837,191
Total assets 4,997,862 3,127,504 1,147,585 9,272,951
Accounts payable 250 7,844 34,934 43,028
Accrued salary and wages - 7,508 2,012 9,520
Accrued insurance claim s - 546,269 59,834 606,103
Total current liabilities 250 561,621 96,780 658,651
Invested in capital assets,
net of related debt 2,829,947 - 7,244 2,837,191
Unrestricted 2,167,665 2,565,883 1,043,561 5,777,109
Total net assets 4,997,612$ 2,565,883$ 1,050,805$ 8,614,300$
ASSETS
LIABILITIES
NET ASSETS
CITY OF EULESS, TEXAS
COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES
IN NET ASSETS
INTERNAL SERVICE FUNDS
YEAR ENDED SEPTEMBER 30, 2010
84
Equipment Risk
Replacement Insurance Management
Fund Fund Fund Total
Operating revenues
Insurance premiums - $ 3,993,335$ 311,157$ 4,304,492$
Service fees and miscellaneous 514,431 5,624 - 520,055
Total operating revenues 514,431 3,998,959 311,157 4,824,547
Operating expenses
General and administrative 3,595 1,107,206 59,892 1,170,693
Insurance costs - 4,300,713 1,004,104 5,304,817
Depreciation 752,599 - 381 752,980
Total operating expenses 756,194 5,407,919 1,064,377 7,228,490
Operating loss (241,763) (1,408,960) (753,220) (2,403,943)
Nonoperating revenues
Gain on sale of capital assets 129,537 - - 129,537
Investm ent income 6,303 31,340 1,817 39,460
Total nonoperating revenues 135,840 31,340 1,817 168,997
Loss before
transfers (105,923) (1,377,620) (751,403) (2,234,946)
Other financing sources (uses)
Transfers in - 549,092 450,000 999,092
Transfers out - - (511) (511)
Change in net assets (105,923) (828,528) (301,914) (1,236,365)
Net assets, beginning of year 5,103,535 3,394,411 1,352,719 9,850,665
Net assets, end of year 4,997,612$ 2,565,883$ 1,050,805$ 8,614,300$
CITY OF EULESS, TEXAS
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
YEAR ENDED SEPTEMBER 30, 2010
85
Risk
Equipment Manage-
Replacement Insurance ment
Fund Fund Fund Total
OPERATING ACTIVITIES
Cash received from customers 514,431$ 4,184,449$ 311,157$ 5,010,037$
Cash payments to suppliers for goods and services (8,508) (5,335,164) (983,269) (6,326,941)
Cash payments to employees for services - (38,210) (42,233) (80,443)
Net cash provided by (used in) operating activities 505,923 (1,188,925) (714,345) (1,397,347)
NONCAPITAL FINANCING ACTIVITIES
Transfers out - - (511) (511)
Transfers in - 549,092 450,000 999,092
Net cash provided by noncapital financing activities - 549,092 449,489 998,581
CAPITAL AND RELATED FINANCING ACTIVITIES
Purchase of capital assets (636,953) - (7,625) (644,578)
Proceeds from sale of capital assets 140,328 - - 140,328
Net cash used in capital and related financing activities (496,625) - (7,625) (504,250)
INVESTING ACTIVITIES
Proceeds from sale of investment securities - 5,183 - 5,183
Interest received on investments 6,303 31,340 1,817 39,460
Net cash provided by investing activities 6,303 36,523 1,817 44,643
Net increase (decrease) in cash and cash equivalents 15,601 (603,310) (270,664) (858,373)
Cash and cash equivalents, beginning of year 2,151,458 3,570,467 1,411,005 7,132,930
Cash and cash equivalents, end of year 2,167,059$ 2,967,157$ 1,140,341$ 6,274,557$
Reconciliation of operating loss to net cash
provided by (used in) operating activities
Operating income (loss)(241,763)$ (1,408,960)$ (753,220)$ (2,403,943)$
Adjustments to reconcile operating loss to net cash
provided by (used in) operating activities
Depreciation expense 752,599 - 381 752,980
Change in assets and liabilities
Receivables - 185,490 - 185,490
Prepaids - (30,241) - (30,241)
Accounts payable (4,913) 4,615 7,067 6,769
Accrued salaries and wages - 734 10 744
Accrued insurance claims - 59,437 31,417 90,854
Net cash provided by (used in) operating activities 505,923$ (1,188,925)$ (714,345)$ (1,397,347)$
CITY OF EULESS, TEXAS
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
STARS CENTER AGENCY FUND
YEAR ENDED SEPTEMBER 30, 2010
86
Balance Balance
October 1, September 30,
2009 Additions Deductions 2010
Assets
Investments 1,946,983$ 3,753$ (529,140)$ 1,421,596$
Total assets 1,946,983$ 3,753$ (529,140)$ 1,421,596$
Liabilities
Due to other entities 1,945,414$ -$ (524,867)$ 1,420,547$
Refunds payable 1,569 1,049 (1,569) 1,049
Total liabilities 1,946,983$ 1,049$ (526,436)$ 1,421,596$
THIS PAGE INTENTIONALLY BLANK
STATISTICAL SECTION
(Unaudited)
87
STATISTICAL SECTION
(Unaudited)
The statistical section of the City of Euless’ comprehensive annual financial report presents
detailed information as a context for understanding what the information in the financial
statements, note disclosures, and required supplementary information says about the city’s
overall financial health.
Contents Tables
Financial Trends 1-4
The financial trend schedules contain trend information to help the reader
understand how the city’s financial performance and well-being have changed
over time.
Revenue Capacity 5-8
The revenue capacity schedules contain information to help the reader assess
the city’s most significant local revenue source, the property tax.
Debt Capacity 9-13
The debt capacity schedules present information to help the reader assess the
affordability of the city’s current level of outstanding debt (including that of its
blended component units) and the city’s ability to issue additional debt in the
future.
Demographic and Economic Information 14-15
The demographic and economic schedules offer demographic and economic
indicators to help the reader understand the environment within which the
city’s financial activities occur.
Operating Information 16-18
The operating information schedules contain service and infrastructure data to
help the reader understand how the information in the city’s financial report
relates to the services it provides and the activities it performs.
CITY OF EULESS, TEXAS NET ASSETS BY COMPONENT – LAST EIGHT FISCAL YEARS (Accrual Basis of Accounting – Unaudited) Table 1 Fiscal Year20032004200520062007200820092010Governmental activitiesInvested in capital assets, net of related debt 42,192,665$ 46,733,074$ 49,659,438$ 49,883,218$ 58,251,542$ 60,799,897$ 66,241,593$ 73,815,504$ Restricted713,385 1,304,226 1,455,709 1,448,741 1,725,998 1,813,871 1,845,987 1,375,950 Unrestricted14,945,063 14,657,018 17,512,832 25,497,497 27,104,410 31,041,434 29,885,070 24,933,443 Total governmental activities net assets57,851,113$ 62,694,318$ 68,627,979$ 76,829,456$ 87,081,950$ 93,655,202$ 97,972,650$ 100,124,897$ Business-type activitiesInvested in capital assets, net of related debt 42,401,512$ 43,283,643$ 47,988,447$ 48,278,044$ 50,186,697$ 52,155,251$ 53,569,070$ 53,318,214$ Restricted for debt service632,189 - - - - - 3,963,919 438,340 Restricted for impact fees- - - 2,999,156 Unrestricted14,009,239 16,906,068 15,830,507 19,099,883 16,421,971 16,900,637 12,980,130 13,987,730 Total business-type activities net assets57,042,940$ 60,189,711$ 63,818,954$ 67,377,927$ 66,608,668$ 69,055,888$ 70,513,119$ 70,743,440$ Primary governmentInvested in capital assets, net of related debt 84,594,177$ 90,016,717$ 97,647,885$ 98,161,262$ 108,438,239$ 112,955,148$ 119,810,663$ 127,133,718$ Restricted1,345,574 1,304,226 1,455,709 1,448,741 1,725,998 1,813,871 5,809,906 4,813,446 Unrestricted28,954,302 31,563,086 33,343,339 44,597,380 43,526,381 47,942,071 42,865,200 38,921,173 Total primary government net assets114,894,053$ 122,884,029$ 132,446,933$ 144,207,383$ 153,690,618$ 162,711,090$ 168,485,769$ 170,868,337$ Note: City of Euless first applied GASB Statement 34 in fiscal year ended 9/30/2003; government-wide financial information for years prior is not available Source: Comprehensive Annual Financial Reports 88
CITY OF EULESS, TEXAS CHANGES IN NET ASSETS – LAST EIGHT FISCAL YEARS (Accrual Basis of Accounting – Unaudited) - Continued Table 2 Fiscal Year20032004200520062007200820092010ExpensesGovernmental activities:Culture and recreation4,753,724$ 4,411,726$ 4,573,219$ 4,892,346$ 5,002,569$ 4,862,749$ 4,892,936$ 5,004,580$ Development services1,190,240 1,217,794 1,113,875 1,169,285 1,487,102 1,420,477 1,707,421 1,692,845 General and administrative11,879,362 12,337,712 13,370,907 15,122,831 16,495,449 17,733,714 17,267,094 14,571,600 Highways and streets2,117,959 2,398,447 1,734,487 2,211,083 2,206,697 2,534,856 2,057,123 2,662,949 Public Safety14,830,469 15,315,777 15,514,301 16,252,071 17,047,334 18,708,849 19,379,290 21,416,966 Interest on long-term debt3,147,819 2,765,102 2,572,094 2,741,754 2,664,658 3,151,039 2,377,564 1,885,177 Total governmental activities expenses37,919,573 38,446,558 38,878,883 42,389,370 44,903,809 48,411,684 47,681,428 47,234,117 Business-type activities:Water and wastewater12,046,092 12,550,708 13,227,562 15,285,026 15,418,299 16,462,599 15,623,464 17,035,520 Drainage utility812,785 793,358 875,995 884,763 1,059,272 932,771 947,869 1,107,206 Golf3,616,671 3,667,537 3,792,552 4,003,035 4,250,866 4,421,256 4,690,701 4,460,627 Other recreation enterprises2,593,455 2,299,391 2,630,760 1,842,550 2,109,291 2,155,131 2,016,273 1,866,786 Total business-type activities expenses19,069,003 19,310,994 20,526,869 22,015,374 22,837,728 23,971,757 23,278,307 24,470,139 Total primary government expenses56,988,576 57,757,552 59,405,752 64,404,744 67,741,537 72,383,441 70,959,735 71,704,256 Program RevenuesGovernmental activities:Fees, fines, and charges for servicesCulture and recreation56,749 52,651 91,925 92,837 83,084 65,349 67,283 66,368 Development services628,585 817,293 896,894 841,033 833,822 688,348 783,955 751,323 General and administrative1,403,636 1,401,057 1,241,408 1,706,000 1,252,030 1,391,437 4,092,387 1,548,497 Highways and streets- - - 6,300 (8,026) 722,334 11,008 - Public safety3,541,356 3,328,327 3,734,364 4,505,202 4,423,564 5,439,171 4,030,566 4,345,101 Operating grants and contributions515,039 517,307 1,302,332 592,231 411,857 486,862 487,059 511,093 Capital grants and contributions- - - 8,706 2,199,106 1,885,266 268,130 602,372 Total governmental activities program revenues 6,145,365 6,116,635 7,266,923 7,752,309 9,195,437 10,678,767 9,740,388 7,824,754 Business-type activities:Charges for servicesWater and wastewater12,768,482 13,235,590 14,213,072 16,065,814 13,730,467 15,849,209 16,381,801 17,321,670 Drainage utility626,199 643,229 659,949 658,231 701,476 661,725 689,889 691,800 Golf3,078,739 3,052,947 3,347,922 3,777,018 3,825,486 3,904,008 4,069,151 5,279,259 Other recreation enterprises2,603,260 2,012,214 2,453,905 1,518,386 1,636,883 1,819,459 1,703,196 1,937,416 Operating grants and contributions- - 3,308,393 - - - - - Capital grants and contributions2,849,795 - - 312,835 1,012,919 2,183,600 1,705,746 26,400 Total business-type activities program revenues 21,926,475 18,943,980 23,983,241 22,332,284 20,907,231 24,418,001 24,549,783 25,256,545 Total primary government program revenues28,071,840 25,060,615 31,250,164 30,084,593 30,102,668 35,096,768 34,290,171 33,081,299 89
CITY OF EULESS, TEXAS CHANGES IN NET ASSETS – LAST EIGHT FISCAL YEARS (Accrual Basis of Accounting – Unaudited) - Continued Table 2 Fiscal Year20032004200520062007200820092010Net (Expense) RevenueGovernmental activities(31,774,208)$ (32,329,923)$ (31,611,960)$ (34,637,061)$ (35,708,372)$ (37,732,917)$ (37,941,040)$ (39,409,363)$ Business-type activities2,857,472 (367,014) 3,456,372 316,910 (1,930,497) 446,244 1,271,476 786,406 Total primary government net expense(28,916,736) (32,696,937) (28,155,588) (34,320,151) (37,638,869) (37,286,673) (36,669,564) (38,622,957) General Revenues and Other Changes in Net AssetsGovernmental activities:TaxesProperty taxes, levied for general purposes 9,941,779 10,233,079 10,777,414 11,188,598 12,343,359 12,231,294 12,685,268 12,306,387 Sales taxes8,865,055 9,229,819 9,648,979 12,303,965 13,990,652 14,319,938 12,602,345 12,337,598 Car rental taxes9,641,374 10,190,256 10,841,899 12,580,371 12,955,882 12,832,458 11,632,215 11,480,736 Mixed beverage taxes82,920 82,058 82,759 85,659 87,400 84,653 76,433 71,653 Hotel/motel occupancy taxes154,164 167,259 179,989 216,591 240,457 234,780 185,417 237,429 Gross receipts taxes3,196,452 3,226,468 3,326,641 4,116,704 3,619,955 3,816,501 4,074,355 3,967,036 Investment income580,245 463,239 870,841 1,611,815 2,031,580 1,727,542 863,225 292,761 Contributions from property owners1,814,257 3,191,097 1,229,401 - - - - - Gain/(loss) on sale/retirement of capital assets 41,807 30,811 (21,023) 24,866 74,163 71,143 37,909 116,978 Miscellaneous102,193 18,208 - - - - 11,018 103,569 Transfers(1,535,227) 340,834 608,721 709,969 617,418 (1,012,140) 90,303 647,463 Total governmental activities32,885,019 37,173,128 37,545,621 42,838,538 45,960,866 44,306,169 42,258,488 41,561,610 Business-type activities:Investment income320,233 266,240 407,468 771,888 1,023,865 726,385 254,071 87,799 Contributions from property owners572,065 3,588,379 374,124 271,707 253,786 252,045 - - Gain/(loss) on sale/retirement of capital assets- - - - 277,004 - - 3,579 Miscellaneous- - - 2,908,437 224,001 10,406 21,987 - Transfers1,535,227 (340,834) (608,721) (709,969) (617,418) 1,012,140 (90,303) (647,463) Total business-type activities2,427,525 3,513,785 172,871 3,242,063 1,161,238 2,000,976 185,755 (556,085) Total primary government35,312,544 40,686,913 37,718,492 46,080,601 47,122,104 46,307,145 42,444,243 41,005,525 Change in Net AssetsGovernmental activities1,110,811 4,843,205 5,933,661 8,201,477 10,252,494 6,573,252 4,317,448 2,152,247 Business-type activities5,284,997 3,146,771 3,629,243 3,558,973 (769,259) 2,447,220 1,457,231 230,321 Total primary government6,395,808$ 7,989,976$ 9,562,904$ 11,760,450$ 9,483,235$ 9,020,472$ 5,774,679$ 2,382,568$ Note: City of Euless first applied GASB Statement 34 in fiscal year ended 9/30/2003; government-wide financial information for years prior is not availableSource: Comprehensive Annual Financial Reports 90
CITY OF EULESS, TEXAS FUND BALANCES, GOVERNMENTAL FUNDS – LAST TEN FISCAL YEARS (Modified accrual basis of accounting – Unaudited ) Table 3 Fiscal Year2001200220032004200520062007200820092010General FundReserved for other 99,851$ 141,886$ 136,167$ 193,253$ 239,592$ 310,956$ 392,950$ 362,018$ 354,882$ 492,776$ Unreserved6,324,146 6,845,070 6,039,430 5,552,863 6,363,113 8,989,805 10,594,492 8,355,946 7,288,976 7,121,683 Total general fund6,423,997$ 6,986,956$ 6,175,597$ 5,746,116$ 6,602,705$ 9,300,761$ 10,987,442$ 8,717,964$ 7,643,858$ 7,614,459$ All Other Governmental FundsReserved for:Debt service1,522,621$ 1,344,435$ 1,380,615$ 1,432,251$ 1,642,766$ 1,587,754$ 1,893,893$ 1,967,502$ 1,987,783$ 1,622,584$ Development Agreements 1,367,369 1,683,008 1,447,612 1,442,999 1,470,156 1,535,647 1,598,658 1,671,038 1,553,876 1,454,496 Other1,323 1,323 1,245 1,245 1,245 1,245 1,245 1,245 1,245 7,677 Unreserved, reported in:Special revenue funds 6,119,684 9,376,163 7,167,612 5,830,664 8,086,786 7,643,232 11,330,717 5,741,072 6,020,996 7,780,378 Capital funds15,167,228 9,200,172 7,301,088 13,708,861 11,110,293 7,482,417 4,627,428 10,940,619 10,918,516 5,792,872 Total all other governmental funds 24,178,225$ 21,605,101$ 17,298,172$ 22,416,020$ 22,311,246$ 18,250,295$ 19,451,941$ 20,321,476$ 20,482,416$ 16,658,007$ Source: Comprehensive Annual Financial Reports 91
CITY OF EULESS, TEXAS CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS Last Ten Fiscal Years (Modified accrual basis of accounting – Unaudited) Table 4 Fiscal Year2001200220032004200520062007200820092010Revenues:General property tax7,646,808 8,845,813 9,855,490 10,297,219 11,138,582 11,266,615 12,482,090 12,200,974 12,735,324 12,277,457 Gross receipts tax3,572,806 3,767,478 3,433,537 3,475,785 3,589,389 4,418,954 3,947,812 4,135,934 4,336,205 4,276,110 General sales tax8,693,648 8,922,660 8,865,055 9,229,819 9,648,979 12,303,965 13,990,652 14,319,938 12,602,345 12,337,598 Car rental tax11,048,696 10,148,812 9,641,373 10,190,256 10,841,899 12,580,371 12,955,882 12,832,458 11,632,215 11,480,736 Fines and fees3,145,608 3,237,217 3,377,046 3,162,113 3,662,327 4,089,056 4,348,839 4,297,304 4,086,594 4,336,063 Licenses and permits511,625 1,188,231 1,009,058 1,190,059 870,010 806,476 804,404 752,421 783,955 719,918 Investment income1,902,874 898,590 566,049 444,653 798,485 1,468,812 1,784,492 1,512,898 742,444 253,302 DEA revenues71,457 133,138 45,997 128,341 14,607 77,461 5,360 26,580 14,883 15,350 Intergovernmental413,617 421,176 326,493 292,265 303,713 315,487 334,979 353,567 379,503 376,512 Rents and royalties- - - - - - - - - 1,620,210 Other revenues1,491,487 1,790,164 1,500,408 1,434,035 2,238,652 2,015,047 1,513,511 2,924,573 4,300,564 978,179 Total Revenues38,498,626 39,353,279 38,620,506 39,844,545 43,106,643 49,342,244 52,168,021 53,356,647 51,614,032 48,671,435 Expenditures:Culture and recreation3,277,992 3,277,615 3,764,712 3,586,026 3,890,845 4,079,825 4,500,202 4,461,329 4,350,573 4,120,435 Development services1,026,518 1,046,331 1,111,608 1,150,194 1,079,073 1,117,614 1,461,222 1,232,277 1,355,105 1,251,706 General and administrative11,847,312 11,748,167 11,631,603 11,912,050 12,494,352 14,860,076 16,377,711 17,660,608 16,230,408 14,796,474 Highways and streets734,672 750,218 973,493 766,030 670,742 656,964 693,711 943,171 861,885 610,996 Public safety11,149,869 12,187,878 13,343,235 13,814,758 14,409,786 15,334,138 16,958,988 17,930,526 18,560,852 19,011,663 Debt Service:Principal 1,584,277 2,164,866 2,452,838 2,666,815 2,600,000 2,790,000 3,030,000 3,010,000 2,990,000 3,110,000 Interest and fiscal charges3,766,821 4,072,936 3,528,072 3,308,249 2,939,783 2,596,934 2,577,106 2,437,894 2,312,734 2,189,070 Issuance costs104,300 - 85,363 80,000 128,000 97,810 5,946 - - 95,000 Capital outlay13,390,056 7,349,486 3,964,777 3,455,190 4,248,437 7,997,263 3,777,225 5,843,641 5,730,944 6,865,802 Total expenditures46,881,817 42,597,497 40,855,701 40,739,312 42,461,018 49,530,624 49,382,111 53,519,446 52,392,501 52,051,146 Excess (deficiency) of revenuesover (under) expenditures(8,383,191) (3,244,218) (2,235,195) (894,767) 645,625 (188,380) 2,785,910 (162,799) (778,469) (3,379,711) Other Financing Sources (Uses):Issuance of Debt11,455,000 6,437,616 5,535,295 7,580,000 13,900,000 6,710,000 - - - 8,110,000 Payment of escrow for refunding- (6,315,299) (5,492,201) - (14,386,070) (6,879,482) - - - (8,443,763) Bond premium - - - - 508,038 - - - - - Bond discount- - - - - - - - - (94,828) Transfers in3,347,358 3,683,309 3,987,716 3,985,286 2,435,617 5,536,285 2,920,599 12,313,757 4,461,419 3,371,742 Transfers out(3,931,853) (3,821,573) (6,913,902) (5,982,152) (2,351,396) (6,541,319) (2,818,181) (13,550,897) (4,596,116) (3,417,248) Total other financing sources10,870,505 (15,947) (2,883,092) 5,583,134 106,189 (1,174,516) 102,418 (1,237,140) (134,697) (474,097) Net change in fund balances2,487,314$ (3,260,165)$ (5,118,287)$ 4,688,367$ 751,814$ (1,362,896)$ 2,888,328$ (1,399,939)$ (913,166)$ (3,853,808)$ Debt service as a percentageof noncapital expenditures16.3%17.7%16.4%16.2%14.8%13.2%12.3%11.4%11.4%11.9%Source: Comprehensive Annual Financial Reports92
CITY OF EULESS, TEXAS ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY – LAST TEN FISCAL YEARS (Unaudited) Table 5 Total Total Less:Total TaxableDirectFiscalRealPersonalMarketTax-Exempt AssessedTaxYearPropertyPropertyValuePropertyValueRate2001 1,501,844,617 195,014,583 1,696,859,200194,755,282 1,502,103,918 0.5147542002 1,642,632,027 375,015,487 2,017,647,514210,303,809 1,807,343,705 0.4972542003 1,774,764,051 415,198,175 2,189,962,226227,535,973 1,962,426,253 0.4972542004 1,908,435,313 410,962,260 2,319,397,573249,704,249 2,069,693,324 0.4950002005 2,029,651,370 428,198,142 2,457,849,512271,935,496 2,185,914,016 0.4950002006 2,190,313,348 375,328,844 2,565,642,192312,107,619 2,253,534,573 0.4917772007 2,324,055,440 424,995,712 2,749,051,152308,569,035 2,440,482,117 0.4895002008 2,438,826,320 464,735,670 2,903,561,990320,650,590 2,582,911,400 0.4700002009 2,477,673,867 508,213,527 2,985,887,394325,886,654 2,660,000,740 0.4700002010 2,470,282,654 449,954,489 2,920,237,143330,392,987 2,589,844,156 0.470000Estimated Market ValueSource: Tarrant Appraisal District 93
CITY OF EULESS, TEXAS DIRECT AND OVERLAPPING PROPERTY TAX RATES (per $100 of Assessed Value) – LAST TEN FISCAL YEARS (Unaudited) Table 6 City Direct RatesOverlapping RatesFiscal YearOperating / General RateGeneral Obligation Debt ServiceTotal Direct RateHurst-Euless-Bedford ISDGrapevine-Colleyville ISD Tarrant CountyTarrant County Hospital DistrictTarrant County Community College2001 0.336374 0.178380 0.514754 1.6775 1.5823 0.2748 0.2341 0.10642002 0.311966 0.185288 0.497254 1.6530 1.6168 0.2748 0.2341 0.10642003 0.298479 0.198775 0.497254 1.7119 1.6598 0.2725 0.2324 0.13942004 0.309241 0.185759 0.495000 1.6616 1.7011 0.2725 0.2354 0.13942005 0.331396 0.163604 0.495000 1.7105 1.7000 0.2725 0.2354 0.13942006 0.340321 0.151456 0.491777 1.7230 1.7000 0.2725 0.2354 0.13942007 0.343227 0.146273 0.489500 1.5975 1.5743 0.2715 0.2354 0.13942008 0.340341 0.129659 0.470000 1.3037 1.2900 0.2665 0.2304 0.13942009 0.351937 0.118063 0.470000 1.2950 1.2900 0.2640 0.2279 0.13802010 0.360791 0.109209 0.470000 1.2955 1.2900 0.2640 0.2280 0.1377 Sources: City of Euless Budget Office, Tarrant Appraisal District 94
CITY OF EULESS, TEXAS PRINCIPAL PROPERTY TAX PAYERS Current Year and Nine Years Ago (Unaudited) Table 7 PercentagePercentageof Total Cityof Total CityTaxable TaxableTaxable TaxableAssessed AssessedAssessed AssessedTaxpayerValue Value (1) TaxpayerValue Value (2)Avis Budget Group LLC71,494,412$ 2.76 % Southwestern Bell Telephone Company 35,283,500$ 2.35 %Hertz Corp59,138,506 2.28 The Bear Apartments30,541,000 2.03Vanguard Car Rental USA Inc.55,180,417 2.13 The Saluda Apartments29,983,671 2.00UDR The Mandolin LLC38,448,160 1.48 Southwest Properties26,115,780 1.74Somerset Village Partners LP36,903,507 1.42 Somerset Village Partners, LP20,199,262 1.34Oncor Electric Delivery Co. LLC36,706,608 1.42 Texas Utilities Electric Co.18,931,140 1.26CMF 15 Portfolio LLC32,500,000 1.25 Western Rim Investors 18,500,000 1.23IRA Stoneleigh Feeco LLC32,200,000 1.24 Buca 360 LP14,615,326 0.97Vineyard Village MSV LLC31,421,752 1.21 Bear Creek Norstor USA, LP13,533,010 0.90Seramont II LP30,563,740 1.18 Bear Creek Associates13,278,212 0.88Total424,557,102$ 16.37 % Total220,980,901$ 14.70 %Fiscal Year 2010Fiscal Year 2001 Source: Tarrant County Tax OfficeNote: (1) Total Taxable Assessed Value including real and personal property for tax year 2009 (fiscal year 2010) is $2,589,844,156.(2) Total Taxable Assessed Value including real and personal property for tax year 2000 (fiscal year 2001) is $1,502,103,198. 95
CITY OF EULESS, TEXAS PROPERTY TAX LEVIES AND COLLECTIONS – LAST TEN FISCAL YEARS (Unaudited) Table 8 Taxes Levied Adjustments AdjustedWithin the to Levy in Taxes LeviedCollectionsFiscal Fiscal Year Subsequent for thePercentage in SubsequentPercentagePercentageYear of the Levy Years Fiscal Year Amount of LevyYearsAmount Of Levy Amount of Levy2001 7,717,258 (6,218) 7,711,040 7,562,145 98.07%135,187 7,697,332 99.82% 13,708 0.18%2002 9,208,653 33,583 9,242,236 8,668,507 93.79%531,034 9,199,541 99.54% 42,694 0.46%2003 9,862,626 (55,752) 9,806,873 9,639,278 98.29%129,443 9,768,721 99.61% 38,153 0.39%2004 10,219,893 52,631 10,272,524 10,026,897 97.61%205,261 10,232,157 99.61% 40,367 0.39%2005 10,789,150 55,365 10,844,515 10,663,367 98.33%135,391 10,798,758 99.58% 45,757 0.42%2006 11,194,338 1,065 11,195,403 11,007,368 98.32%169,370 11,176,737 99.83% 18,666 0.17%2007 11,908,489 (9,267) 11,899,222 11,801,183 99.18%79,760 11,880,943 99.85% 18,279 0.15%2008 12,083,956 (33,436) 12,050,520 11,986,396 99.47%39,216 12,025,612 99.79% 24,909 0.21%2009 12,747,343 (124,170) 12,623,173 12,556,281 99.47%(1,643) 12,554,638 99.46% 68,535 0.54%2010 12,318,061 - 12,318,061 12,182,266 98.90%- 12,182,266 98.90% 135,795 1.10%Delinquent TaxesTotal CollectionCollected within theFiscal Year of the Levy Source: Tarrant County Tax Office and Tarrant Appraisal District 96
CITY OF EULES, TEXAS RATIO OF OUTSTANDING DEBT BY TYPE – LAST TEN FISCAL YEARS (Unaudited) Table 9 Taxable GeneralPercentageGeneral Certificates Certificates Sales Tax W&S Drainage Certificates Obligation Total of Personal PerFiscal ObligationofofRevenue Revenue Revenue ofRefunding Primary Income CapitaYear Bonds Obligation Obligation BondsBondsBonds Obligation Bonds Government (1)(1)2001 13,214,519 23,690,000 10,190,000 9,295,000 4,170,000 1,535,000 11,295,000 - 73,389,519 6.31% 1,613 2002 12,409,653 22,910,000 10,040,000 9,325,000 3,590,000 1,460,000 10,985,000 - 70,719,653 5.93% 1,532 2003 15,381,815 18,420,000 9,875,000 8,860,000 3,300,000 1,300,000 10,660,000 - 67,796,815 5.31% 1,414 2004 17,525,000 21,915,000 9,700,000 8,310,000 5,220,000 1,135,000 500,000 11,095,000 75,400,000 5.67% 1,516 2005 27,410,000 10,365,000 9,510,000 7,725,000 4,915,000 965,000 210,000 11,095,000 72,195,000 5.27% 1,445 2006 28,820,000 7,175,000 9,305,000 7,175,000 4,805,000 785,000 - 11,005,000 69,070,000 4.86% 1,361 2007 27,350,000 6,475,000 9,080,000 6,540,000 4,585,000 600,000 - 10,560,000 65,190,000 4.40% 1,232 2008 25,985,000 5,735,000 8,840,000 5,875,000 4,350,000 410,000 - 10,105,000 61,300,000 4.15% 1,148 2009 24,350,000 5,330,000 8,580,000 5,185,000 4,105,000 210,000 - 9,640,000 57,400,000 3.78% 1,062 2010 30,765,000 4,910,000 - 4,470,000 3,850,000 - - 9,160,000 53,155,000 3.36% 981 Business-Type Activities Governmental Activities Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.(1) See Table 14 for personal income and population data. 97
CITY OF EULESS, TEXAS RATIO OF NET GENERAL BONDED DEBT TO TAXABLE ASSESSED VALUE AND NET BONDED DEBT PER CAPITA – LAST TEN FISCAL YEARS (Unaudited) Table 10 Debt toGeneral CertificatesEstimatedTaxableTaxableFiscalObligationofPopulation AssessedAssessed Debt PerYearBondsObligationTotal(1)Value (2)Value Capita200113,214,51923,690,000 36,904,519 45,5001,502,103,918 2.46%811 200212,409,65322,910,000 35,319,653 46,1661,807,343,705 1.95%765 200315,381,81518,420,000 33,801,815 47,9501,962,426,253 1.72%705 200417,525,00021,915,000 39,440,000 49,7502,069,693,324 1.91%793 200527,410,00010,365,000 37,775,000 49,9502,185,914,016 1.73%756 200628,820,0007,175,000 35,995,000 50,7502,253,534,573 1.60%709 200727,350,0006,475,000 33,825,000 52,9002,440,482,117 1.39%639 200825,985,0005,735,000 31,720,000 53,4002,582,911,400 1.23%594 200924,350,0005,330,000 29,680,000 54,0732,660,000,740 1.12%549 201022,655,0004,910,000 27,565,000 54,2002,589,844,156 1.06%509 Note: Source:(1) Estimates by North Central Texas Council of Governments General Bonded Debt OutstandingDetails regarding the city's outstanding debt can be found in the notes to the financial statements. Total does not include self-supporting debt (taxable general obligation refunding bonds and enterprise debt). 98
CITY OF EULESS, TEXAS DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT As of September 30, 2009 - (Unaudited) Table 11 Estimated EstimatedShare ofDebtPercentage OverlappingGovernmental UnitOutstandingApplicableDebtDebt repaid with property taxesGrapevine-Colleyville Independent School District319,841,777 9.66%30,896,716$ Hurst-Euless-Bedford Independent School District205,494,25820.53%42,187,971Tarrant County353,511,3702.13%7,529,792Tarrant County Hospital District60,660,0002.13%1,292,058Tarrant County College District33,780,6992.13%719,529Subtotal, overlapping debt82,626,066City of Euless (direct debt)27,565,000100.00%27,565,000Total direct and overlapping debt110,191,066$ Source: Debt outstanding data provided by each governmental unit.99
CITY OF EULESS, TEXAS SCHEDULE OF REVENUE BOND COVERAGE WATER AND WASTEWATER BONDS – LAST TEN FISCAL YEARS (Unaudited) Table 12 LessInterestTotalOperatingNetandFiscal Revenues Expenses RevenueFiscalCoverageYear(1)(2)Available Principal ChargesTotalRatio2001 13,084,483 10,915,784 2,168,699 445,000 317,637 762,637 2.842002 11,719,411 10,298,940 1,420,471 580,000 231,234 811,234 1.752003 13,016,934 10,431,249 2,585,685 615,000 199,245 814,245 3.182004 13,443,174 10,902,522 2,540,652 500,000 183,946 683,946 3.712005 14,548,715 11,555,108 2,993,607 305,000 275,524 580,524 5.162006 16,568,058 13,485,955 3,082,103 195,000 229,437 424,437 7.262007 14,645,201 13,668,755976,446 220,000 213,643 433,643 2.252008 16,369,368 14,722,644 1,646,724 235,000 191,228 426,228 3.862009 16,594,856 13,722,593 2,872,263 245,000 180,820 425,820 6.752010 17,475,984 14,799,879 2,676,105 255,000 173,535 428,535 6.24Notes: (1) Operating and nonoperating revenues of water and wastewater fund(2) Total operating expenses of water and wastewater fund exclusive of depreciation and amortization100
CITY OF EULESS, TEXAS SCHEDULE OF REVENUE BOND COVERAGE DRAINAGE UTILITY BONDS – LAST TEN FISCAL YEARS (Unaudited) Table 13 LessInterestTotal OperatingNetandFiscal Revenues Expenses RevenueFiscalCoverageYear(1)(2)Available Principal ChargesTotalRatio2001 662,455 212,073 450,382 120,000 108,652 228,652 1.972002 645,852 241,034 404,818 75,000 74,041 149,041 2.722003 653,916 291,668 362,248 160,000 32,494 192,494 1.882004 667,131 225,815 441,316 165,000 46,255 211,255 2.092005 700,316 265,444 434,872 170,000 41,305 211,305 2.062006 741,256 257,919 483,337 180,000 35,355 215,355 2.242007 790,647 420,586 370,061 185,000 34,303 219,303 1.692008 736,433 298,712 437,721 190,000 21,565 211,565 2.072009 714,250 286,741 427,509 200,000 14,417 214,417 1.992010 700,827 457,376 243,451 210,0008,400 218,400 1.11Notes: (1) Operating and nonoperating revenues of drainage utility fund(2) Total operating expenses of drainage utility fund exclusive of depreciation and amortization 101
CITY OF EULESS, TEXAS DEMOGRAPHIC STATISTICS – LAST TEN FISCAL YEARS (Unaudited) Table 14 PerPersonal Estimated CapitaIncomeSchool UnemploymentFiscal Population Income (thousands Median Age EnrollmentRateYear(1)(2)of dollars)(2)(3)(4)200145,500 25,556 1,162,798 N/A19,5003.3%200246,166 25,837 1,192,791 N/A19,5004.6%200347,950 26,630 1,276,909 N/A19,5004.7%200449,750 26,710 1,328,823 N/A19,7003.8%200549,950 27,406 1,368,930 N/A19,6004.5%200650,750 27,999 1,420,949 33.720,1114.8%200752,900 28,029 1,482,734 34.120,3183.8%200853,400 27,634 1,475,656 34.220,0484.5%200954,073 28,110 1,519,992 34.420,5047.3%201054,200 29,179 1,581,502 32.420,8987.9%Notes: 1. Estimates by North Central Texas Council of Governments 2. Estimates by Claritas Site Reports; Research & Demographic Solutions 3. Hurst-Euless-Bedford Independent School District 4. Texas Workforce Commission 102
CITY OF EULESS, TEXAS PRINCIPAL EMPLOYERS Current Year and Nine Years Ago (Unaudited) Table 15 PercentagePercentageof Total Cityof Total CityEmployerEmployees Employment EmployerEmployees EmploymentHEB ISD818 3.45% City of Euless340 1.75%LSG Sky Chefs, Inc.800 3.37% Edward Blank Associates230 1.19%City of Euless358 1.51% Tarrant Printing190 0.98%Redi-Mix Concrete355 1.50% Atlas Match150 0.77%Autogrill Group, Inc.350 1.47% Home Depot150 0.77%Life Outreach International181 0.76% Marriott130 0.67%Super Target150 0.63% Dal - Tex100 0.52%Lowe's125 0.53% Albertsons100 0.52%Home Depot122 0.51% N/A- 0.00%TJ Lambrecht Construction120 0.51% N/A- 0.00%Total3,379 14.23%1,390 7.17%20102001103
CITY OF EULESS, TEXAS FULL–TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM – LAST TEN FISCAL YEARS (Unaudited) Table 16 Fiscal YearFunction/Program2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010General Governmentand Administration 49.25 50.25 52.25 52.25 52.25 51.25 50.75 53.00 54.50 54.50 50.00 Public Safety112.00 116.00 116.00 117.00 117.00 118.00 120.00 123.00 126.00 126.00 118.00 Fire Safety60.00 60.00 61.00 61.00 61.00 64.00 67.00 70.00 73.00 73.00 71.00 Development Services13.00 13.00 13.00 15.00 15.00 12.00 12.00 12.00 12.00 12.00 11.50 Culture and Recreational33.75 34.75 35.75 35.75 35.75 35.75 35.75 36.50 36.00 36.00 30.00 Water and Wastewater51.00 52.00 51.00 49.00 49.00 48.00 49.50 50.00 50.00 50.00 46.00 Golf Course15.25 15.25 15.25 15.25 15.25 15.25 15.25 15.25 15.25 17.25 13.00 Public Works15.75 15.75 15.75 15.75 15.75 15.75 15.75 15.75 15.75 15.75 14.00 Service Center6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 5.00 Risk Management / Insurance 2.00 2.00 2.00 2.00 2.00 2.00 2.00 1.50 1.50 1.50 1.50 Total358.00 365.00 368.00 369.00 369.00 368.00 374.00 383.00 390.00 392.00 360.00 Source: City Budget Office104
CITY OF EULESS, TEXAS OPERATING INDICATORS BY FUNCTION/PROGRAM – LAST TEN FISCAL YEARS (Unaudited) Table 17 Function/Program20012002 2003 2004 2005 2006 2007 2008 2009 2010Public SafetyPoliceNumber of Certified Officers8181 8181828282858585Number of Citations Issued25,430 23,719 27,145 25,491 32,200 38,359 34,368 26,503 29,925 24,126FireNumber of Certified Firefighters5859 5959626568717069Number of Alarms4,7174,530 4,849 4,699 3,949 3,661 3,675 4,197 3,827 4,097Number of EMS Calls1,1941,125 2,320 1,854 2,202 2,317 2,561 2,688 2,634 2,793Municipal CourtCases Filed33,803 33,980 35,385 34,258 41,027 46,085 39,096 30,551 33,670 31,442DevelopmentNumber Residential Inspections - New100107 182 518 319 3155877 100101Number Commercial Inspections - New10841381024281611Number Multifamily Inspections - New2410000000Public WorksStreet Overlay (Square Footage)301,421 767,154 1,238,046 1,004,735 1,391,889 1,117,894 664,472 999,285 797,326 770,380Cultural and RecreationalParks and RecreationRecreation Center Memberships2,0003,649 4,427 4,123 4,260 4,160 3,990 3,944 3,703 2,443Class Attendance (Youth/Adult)13,935 11,099 17,532 24,522 24,575 25,704 29,067 59,541 74,452 56,833Water and WastewaterNumber of Water Consumers22,056 22,615 23,231 23,848 25,012 24,486 24,484 24,608 24,677 24,760Water Produced (In Gallons x 1000)341,835 474,987 555,046 384,306 314,085 372,695 414,934 348,548 730,291 579,154Water Purchased - TRA (In Gallons x 1000) 2,134,768 1,839,498 1,895,120 2,146,706 2,382,040 2,947,945 2,202,426 2,291,974 1,955,535 2,028,760Water Supplied (In Gallons x 1000)2,476,603 2,314,485 2,450,166 2,531,012 2,696,125 3,320,640 2,617,360 2,640,522 2,685,826 2,607,914Annual Rainfall (In Inches)46.9538.34 30.75 41.08 32.51 20.74 53.51 27.10 36.32 38.65Golf CourseNumber of Paid Rounds Played29,694 29,961 30,861 33,146 32,725 36,639 35,094 36,528 43,029 32,996Source: City DepartmentsComprehensive Annual Financial ReportCity Budget OfficeNotes:N/A - Data not available.105
CITY OF EULESS, TEXAS CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM – LAST TEN FISCAL YEARS (Unaudited) Table 18 Fiscal YearFunction/Program2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Public SafetyPolice Stations1 1 1 1 1 1 1 1 1 1 1Fire Stations3 3 3 3 3 3 3 3 3 3 3Public WorksStreets- Paved (linear miles)182.0 182.0 182.0 182.0 182.0 182.0 182.0 211.0 217.6 217.6 217.6Cultural and RecreationalSwimming Pools3 3 3 3 3 3 3 3 3 3 3Parks16 16 16 16 16 16 17 17 17 17 17Parks Land (Acres)539 539 539 539 539 539 566 632 632 632 632Community Buildings3 3 5 5 5 5 5 5 5 5 5Ampitheater2 2 2 2 2 2 2 2 2 2 2Conference Centre1 1 1 1 1 1 1 1 1 1 1Golf Course1 1 1 1 1 1 1 1 1 1 1Athletic Fields24 24 24 24 24 24 35 35 35 35 33Library Holdings84,566 90,790 98,314 106,442 96,228 99,972 97,334 98,613 101,672 103,122 106,121 Water and WastewaterWater Mains (miles)185.00 197.00 202.00 209.00 210.00 212.00 218.00 222.10 226.80 226.80 228.20 Fire Hydrants1,190 1,215 1,215 1,318 1,318 1,318 1,377 1,441 1,477 1,477 1,525 Wastewater Mains (miles)139.0 143.0 149.0 157.0 161.0 162.0 162.0 168.0 186.3 186.3 186.5 Source: City Departments106