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HomeMy WebLinkAboutFY 2007 Comprehensive Annual Financial Report201 N. Ector Drive Euless, TX 76039 (817) 685-1626 www.euless.org City of Euless, Texas Comprehensive Annual Financial Report Fiscal Year Ending September 30, 2007 Prepared by City of Euless Financial Department 201 North Ector Drive Euless, TX 76039 CITY OF EULESS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2007 TABLE OF CONTENTS INTRODUCTORY SECTION Page(s) Letter of Transmittal i-vi City Officials vii GFOA Certificate of Achievement viii Organizational Chart ix FINANCIAL SECTION Independent Auditor's Report 1-2 Management's Discussion and Analysis (unaudited) 3-13 Basic Financial Statements: Government -Wide 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 Fund Net Assets 22 Statement of Cash Flows 23-24 Fiduciary Funds: Statement of Fiduciary Net Assets 25 Notes to Basic Financial Statements 26-51 Required Supplementary Information: Schedule of Funding Progress for Participation in Texas Municipal Retirement System 52 Budgetary Comparison Schedules 53-55 Notes to Required Supplementary Information 56 Combining and Individual Fund Statements and Schedules: Non -Major Governmental Funds: Combining Balance Sheet 59-60 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 61-62 CITY OF EULESS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2007 TABLE OF CONTENTS — 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 63 Police Drug Enforcement Special Revenue Fund 64 Half -Penny Sales Tax Special Revenue Fund 65 Crime Control and Prevention District Special Revenue Fund 66 Public Safety Grant Funds — Special Revenue Funds 67 Non -Major Proprietary Funds: Combining Statement of Net Assets 69-70 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets 71 Combining Statement of Cash Flows 72 Internal Service Funds: Combining Statement of Net Assets 74 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets 75 Combining Statement of Cash Flows 76 Agency Funds: Statement of Changes in Assets and Liabilities 78 STATISTICAL SECTION (Unaudited) Table Page(s) Net Assets by Component 1 79 Changes in Net Assets 2 80-81 Fund Balances, Governmental Funds 3 82 Changes in Fund Balances, Governmental Funds 4 83 Assessed and Estimated Actual Value of Taxable Property 5 84 Direct and Overlapping Property Tax Rates 6 85 Principal Property Tax Payers 7 86 Property Tax Levies and Collections 8 87 Ratio of Outstanding Debt by Type 9 88 Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt Per Capita 10 89 Direct and Overlapping Governmental Activities Debt 11 90 Pledged — Revenue Coverage Water and Sewer Bonds 12 91 Schedule of Revenue Bond Coverage Drainage Utility Bonds 13 92 Demographic Statistics 14 93 Principal Employers 15 94 Full-time Equivalent City Government Employees by Function/Program 16 95 Operating Indicators by Function/Program 17 96 Capital Assets Statistics by Function/Program 18 97 INTRODUCTORY SECTION THE CITY OF EULESS January 16, 2008 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 is pleased to submit the Comprehensive Annual Financial Report for the City of Euless, Texas for the fiscal year ended September 30, 2007. This report is published to provide the City Council, City staff, our citizens, our bondholders, and other interested parties with detailed information concerning the financial condition and activities of the City government. Responsibility for both the accuracy of the presented data and the completeness and reliability of the presentation rests with the city. To the best of our knowledge and belief, the enclosed data is accurate in all material respects, and is organized in a manner designed to fairly present the financial position and results of operations of the City as measured by the financial activity of its various funds. This report fulfills the requirements of state law and the City's home rule charter which require that the City publish audited financial statements within 120 days from the close of the fiscal year. Weaver and Tidwell, L.L.P., a firm of licensed certified public accountants, have issued an unqualified ("clean") opinion on the City of Euless' financial statements for the year ended September 30, 2007. The Independent Auditor's Report is located at the front 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 financials, Management's Discussion and Analysis ("MD&A"), 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 compliment and should be read in conjunction with the MD&A. The City of Euless' MD&A can be found immediately following the report of the independent auditor's. The statistical section includes financial and demographic information, usually presented on a multi -year basis that is relevant to a financial statement reader. i 201 N. Ector Drive, Euless, Texas 76039-3595 817/685-1400 • Metro 817/267-4403 • Fax 817/685-1416 www.ci.euless.tx.us The Financial Section described above is prepared in accordance with generally accepted accounting principles for governments as prescribed by the Governmental Accounting Standards Board ("GASB"). Profile of the City of Euless, Texas Location: The City of Euless is located 16 miles west of Dallas and 16 miles east of Fort Worth and adjacent to the Dallas/Fort Worth International Airport ("DFW AIRPORT") in Northeast Tarrant County. Euless is readily accessible by State Highway 183 which runs east/west through the center of the city, State Highway 121 which borders the west side of the City and State Highway 360 which borders the east side of the City. The City is approximately 16.9 square miles and serves a population of approximately 53,400. 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 enact local legislation, adopt budgets, determine policies, and appoint the City Secretary, City Attorney, and Municipal Court Judge. The City Manager is also appointed by the City Council and is responsible for the daily management of the City. Council members serve three-year staggered terms, with two council members elected each year. The Mayor is elected to serve a three-year term. The Basic Financial Statements of the City include all government activities, organizations, and functions for which the City is financially accountable as defined by GASB. In addition, we have included financial statements of two component units because of their fiscal dependency on the primary government. The Euless Development Corporation was created to promote parks, library services, and economic development. The Crime Control District was created to proactively combat crime. Additional information on these component units can be found in Note 1 in the notes to the financial statements. Services Provided: The City of Euless provides to its citizens a full range of services that have proven to be necessary and meaningful. Major services provided under general government and enterprise functions include: police and fire protection, emergency ambulance service, development and code services, construction and maintenance of streets and highways, park and recreational facilities, water and sewer services, and library services. The City also offers a top ranked 18-hole golf course and conference centre facility, an adult softball facility and a youth athletic complex. Internal services of the City, accounted for on a cost reimbursement basis, are risk management, equipment replacement, and employee health and dental coverage. ii Accounting and Budgetary Control: The City's accounting records for general governmental operations are maintained on a modified accrual basis, with the revenues being recorded when available and measurable, and expenditures being recorded when the services or goods are received and the liabilities are incurred. Accounting records for the City's utilities and other proprietary activities are maintained on a full accrual basis. In developing and maintaining the City's accounting system, consideration is given to the adequacy of the internal control structure. Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding: (1) the safeguarding of assets against loss from unauthorized use, and (2) the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived from it; and (2) the evaluation of costs and benefits requires estimates and judgments by management. All internal control evaluations occur within the above framework. We believe that the City's internal accounting controls adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions. 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 the City Council a budget by August Is' each year. The budget is filed with the City Secretary and open for public inspection. Upon receipt of the budget, the 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 (10) 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 and divisional management for review. Individual line items are reviewed and analyzed for budgetary compliance. Personnel expenditures are monitored and controlled at a position level and capital expenditures are monitored and controlled item by item. Revenue budgets are reviewed monthly. 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. iii Local Economy: The City of Euless is located in Northeast Tarrant County, in the heart of the Dallas -Fort Worth Metroplex (DFW), and adjacent to the DFW International Airport. Thus, the economic vitality of the region significantly impacts the economic health of Euless. DFW Airport ranks third in the world for annual operations, and ranks sixth in the world for the number of passengers, serving nearly 60 million passengers annually (SOURCE: DFW website www.dfwairnort.com, DFW Airport 2006 Annual Report). DFW's strategic central location and diverse economy are major factors in businesses relocating to the area making it one of the fastest -growing economic regions in the country. In addition, Tarrant County is one of the fastest growing counties in Texas with northeast Tarrant County leading the way. DFW is the largest metropolitan area in Texas and has sustained tremendous growth during the past decade. DFW International Airport supports in excess of 268,500 jobs and $14.3 billion to the regional economy (SOURCE: DFW Airport 2006 Comprehensive Annual Financial Report). DFW has a highly -diversified economy with more than 128,000 businesses, 1,500 regional and corporate headquarters, 22 Fortune 500 Companies, and a total workforce for the metroplex topping 2.8 million. The region's diverse economy has enabled it to weather economic downturn in key sectors. (U.S. Census Bureau County Business Patterns) The Alliance Development in north Fort Worth includes the first purely industrial airport in the Western Hemisphere. Fort Worth's Alliance Airport is the cornerstone for the nation's fastest growing industrial complex. It has attracted over 170 companies and created over 28,000 jobs for the area (Source: Alliance Impact Economic Study 12/31/06). This area has plenty of land available for development and is expected to continue to bring significant investment and residential growth to the region. Currently, the Alliance Corridor is the fastest growing residential market in the metroplex. Euless housing and commercial development continued to show sustained growth during FY 2007. The city continues to benefit from the growth in our tax base. Taxable value for all residential and commercial property in the City of Euless was approximately $2.4 billion for fiscal year 2007, which is a 6.7% increase over the prior year. Sales tax collections increased significantly during FY 2007 with significant development still in process that will continue to improve our retail shopping opportunities. The City also receives a significant amount of revenues from a Consolidated Rental Car Facility at DFW Airport. During FY 2007, car rental receipts reached record levels. The City Council has chosen to use this funding source to build reserves and to fund capital projects in lieu of debt issuance. Doing so has allowed the City to refrain from becoming overly dependent on a volatile resource while providing for needed improvements for our citizens. The City of Euless has approximately 1,067 acres of undeveloped land outside of DFW Airport and another 600-900 developable acres within DFW Airport. iv Euless is pleased that State Highway 360, which lies on the eastern border of the City is complete. This provides greater access for undeveloped areas along this highway. Also, the construction of the new Dallas Cowboys stadium in Tarrant County, with a close proximity to Euless, is expected to bring additional tourism to our City. The City also 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 $56,523 (source: Claritas Site Reports) compares favorably to $51,813 for Tarrant County and $44,922 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 with full consideration of the impact to the operating budget and tax requirements. Many of these projects have been completed on a pay-as-you-go basis by utilizing the rental car tax receipts and avoiding the issuance of additional debt. Major Initiatives During the current year, the City expects to complete the reconstruction of Glade Road, which is being jointly reconstructed by the City of Euless and the City of Grapevine. The City is currently working with a developer on a major mixed use center located along the southwest corner of Glade Road and Highway 121. This center should provide approximately 1.2 million square feet of retail/office as well as a unique residential component. The City expects the sales tax benefit from this center to be significant. Construction on this project is expected to begin in 2008. The City completed the reconstruction of the new Public Works facility, which was funded from cash reserves and did not require any debt issuance. The City updated the Facility Master Plan which addresses future needs including renovation of the Planning and Engineering facility, a Senior Citizen facility, Library expansion, Conference Centre expansion and Fire Training facility. The city expects to begin several of these projects during the 2007-2008 fiscal year. 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, 2006. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, a v government unit must publish an easily readable and efficiently organized comprehensive annual financial report ("CAFR"), whose contents conform to program standards. Such report must satisfy both Generally Accepted Accounting Principals ("GAAP") and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. This was the 20th consecutive year that the City has received this prestigious award. We believe that our current CAFR continues to conform to the Certificate of Achievement program requirements and we are submitting it to the GFOA for review. In addition, the City of Euless also received the GFOA's Distinguished Budget Presentation Award for its annual budget document. The City of Euless has received the distinguished budget award for the last sixteen years. In order to qualify for the Distinguished Budget Presentation Award, the City's budget document was judged to be proficient in several categories, including a policy document, a financial plan, an operations guide, and a communications device. The preparation of this report on a timely basis could not have been accomplished without the efficient and dedicated services of the entire staff of the Finance Department. Appreciation is expressed to City employees throughout the organization, especially those employees who were instrumental in the successful completion of this report. We would like to thank the Mayor and members of the City Council for their interest and support in planning and conducting the financial operations of the City in a responsible, professional, and progressive manner. Respect Submid, Gary McKamie City Manager Loretta Getchell Deputy City Manager Vicki Rodriquez Director of Finance vi CITY OFFICIALS Mary Lib Saleh, Mayor Tim Stinneford, Council Member, Place 1 Leon Hogg, Council Member, Place 2 Mayor Pro Tem Linda Martin, Council Member, Place 3 Charlie Miller, Council Member, Place 4 Glenn Porterfield, Council Member, Place 5 Perry Bynum, Council Member, Place 6 • • • • • • •• • • • • •• •• •• Gary McKamie City Manager Loretta Getchell Deputy City Manager Vicki Rodriquez Director of Finance vii Certificate of Achievement for Excellence in Financial Reporting Presented to City of Euless Texas For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2006 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. President v. cox Executive Director viii THE CITY E1LESS RAY MCDONALD Director of Parks Community Services BOB MCFARLAND City Attorney LEE KOONTZ Fire Chief Recreation Suppression Parks Ambulance/EMS Special Events Fire Education & Parks at Texas Star Prevention StarsCenter Fire Marshall Softball World at Texas Star BETSY BOYETT Communications Marketing Manager MICHAEL BROWN Police Cbief Patrol Criminal Invest. Services: Communications Community Jail Records Emergency Mgmt. SUSAN CRIM City Secretary BILL RIDGWAY Director of Economic Development Economic Dev. Franchises Recycling CITIZENS MAYOR and COUNCIL GARY MCKAMIE City Manager MIKE COLLINS Director of Planning & Development Planning Code Enforcement Environ. Health Bldg. Inspections VICKI RODRIQUEZ Director of Finance Accounting Utility Billing Budget Municipal Court Cash Debt. Mgmt. Purchasing LACY BRITTEN Municipal Court Judge I i OrganiA 6t11 Chart Gary McKamie, City Manager July 2007 Municipal Court of Record LORETTA GETCI3ELL Deputy City Manager KYLE GLENDA MCADAMS HARTSELL- Fleet & SHELTON Facilities General Manager Administrator Texas Star KATE LYON Library Administrator DAN CAROLYN MCLAIN MARSHALL IS HR/Risk Administrator Administrator Information Services Human Resources Risk/Benefits RON YOUNG Director of Public Works Streets Water Wastewater Animal Control Meter Reading Const. Mgmt. ROBERT r BARKER City Engineer Engineering Const. Inspection CIP Mgmt. Traffic Safety Drainage FINANCIAL SECTION III WEAVER TIDWELL L.L.P. CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS /600 II er/ Selku/G Street Sbi/e 300 For/ II o,'th, Te.Var 76102-2516 8 17.332.7905 17 8/7.429.5936 W W W. W EAVERAN DTID W ELL.COM AN INDEPENDENT MEMBER OF BAKER TILLY INTERNATIONAL 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 as of and for the year ended September 30, 2007, 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 of Euless, Texas as of September 30, 2007, 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. The management's discussion and analysis, the analysis of funding progress and budgetary comparison information on pages 3 through 13 and 52 through 55, are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the supplementary information. However, we did not audit the information and express no opinion on it. DALLAS OFFICES IN FORT WORTH HOUSTON 1 To the Honorable Mayor, City Council and City Manager City of Euless, Texas Page 2 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 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. Fort Worth, TX January 22, 2008 CITY OF EULESS, TEXAS Management's Discussion and Analysis For the Year Ended September 30, 2007 (Unaudited) As management of the City of Euless, we offer 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, 2007. 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 and long term assets and liabilities) or fund balances (the current "spendable" assets less current liabilities") of the government been maintained? We encourage readers to consider the information presented here in conjunction with the additional information that we have furnished in our letter of transmittal, (pages i-vi of this report), and the statistical section (pages 79-97 of this report) as well as information on the annual budget, the capital improvement plan, and other community information found on the city's website at www.ci.euless.tx.us . 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 is unaudited. Financial Highlights • The assets of the City of Euless exceeded its liabilities at the close of the most recent fiscal year by $153,690,618 (Net assets). This number must be viewed in the context that the vast majority of the City's net assets of $108,438,239 (70.6%) are capital assets 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 $1,725,998 (1.1%). The remaining $43,526,381 (28.3%) 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. Unrestricted net assets decreased by $1,070,999 in fiscal year 2007. This decrease is directly related to a decrease in the overall net assets in the business -type activities. The majority of these operations are dependent on weather conditions, therefore significantly impacted by excessive rainfall. During the past year, the Dallas/Fort Worth Airport reported more than 50 inches of rainfall for the area. This significantly impacted the revenue of the Water and Sewer Fund, Golf Course Fund, and other non -major proprietary funds. • As of the close of the current fiscal year, the City of Euless' governmental funds reported combined ending fund balances of $30,439,383, an increase of $2,888,328 in comparison with the prior year. Within this total $1,993,853 is reserved for specific purposes, $6,521,321 is restricted by bond covenant or designated by management or council to be used for capital 3 projects, and $11,330,717 in the special revenue funds includes grant and other spending restrictions. The remaining $10,593,492 is unreserved fund balance in the General Fund and can be used for any lawful purpose. This fund balance represents 39% of total general fund expenditures. • The City's total capital assets increased by $4,702,491, which is primarily attributed to land, buildings, and infrastructure. • The City's bonds payable decreased by $3,790,508 or 6.3%, due to the scheduled repayment of principal on outstanding bonded debt. The City did not issue any 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. The City's basic financial statements 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 flows 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, highway and streets, development, and culture and recreation. The business -type activities of the City include water and sewer system, drainage system, golf course and other recreational activities. The government -wide financial statements include not only the City of Euless itself (known as the primary government), but also includes 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. 4 The government -wide financial statements can be found on pages 14-16 of this report. 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. I-Iowever, 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 16 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 12 governmental funds are combined into a single, aggregate presentation. Individual fund data for each of these nonmajor 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 both funds 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 sewer, drainage, golf, and 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, they have been included within governmental activities in the government -wide financial statements. 5 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 Sewer, Drainage, 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 nonmajor 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 page 25 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 26-51 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 52-56 of this report. The combining statements referred to earlier in connection with nonmajor governmental funds, nonmajor 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 59-78 of this report. Government -wide Financial 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 $153,690,618 as of September 30, 2007. The largest portion of the City's net assets (70.6%) 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 6 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. An additional portion of the City's net assets (1.1%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets $43,526,381 (28.3%) may be used to meet the government's ongoing obligations to citizens, creditors, and employees. As of September 30, 2007, the City is able to report 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 2006. City of Euless' Net Assets Governmental lousiness -type activities activities Total 2007 2006 2007 2006 2007 2006 Current and other assets $ 49,854,760 $ 44,545,183 $ 20,055,1 12 $ 22,283,104 $ 69,909,872 $ 66,828,287 Capital assets 100,348,487 96,593,646 64,876,694 63,929,046 165,225,181 160,522,692 'Total assets 150,203,247 141,138,829 84,931,806 86,212,150 235,135,053 227,350,979 Long-term liabilities Other liabilities Total liabilities 46,807,102 16,314,195 63,121,297 49,650,244 14,659,129 64,309,373 13,809,997 4,513,141 18,323,138 14,746,002 4,088,221 18,834,223 60,617,099 20,827,336 81,444,435 64,396,246 18,747,350 83,143,596 Net assets: invested in capital assets, net of related debt 58,251,542 49,883,218 50,186,697 48,278,044 108,438,239 98,161,262 Restricted 1,725,998 1,448,741 - - 1,725,998 1,448,741 Unrestricted 27,104,410 25,497,497 16,421,971 19,099,883 43,526,381 44,597,380 Total net assets $ 87,081,950 $ 76,829,456 $ 66,608,668 $ 67,377,927 $ 153,690,618 $ 144,207,383 The City's total net assets increased $9,483,235 during the current fiscal year. This increase is attributed to the change in capital assets which includes land, buildings, and infrastructure assets with the remaining portion attributed to ongoing revenues in excess of ongoing expenses in the governmental funds. Governmental activities. Governmental activities increased the City's net assets by $10,252,494, thereby accounting for 108% of the total growth in net assets. Key elements of this increase are as follows: • Property taxes accounted for $1,154,761 or 11.3% of this increase. Although the property tax rate decreased, increased property values and new construction attributed to additional collections. • Sales taxes accounted for $1,686,687 or 16.5% of this increase. Although the city's sales tax rate remained unchanged, sales tax collections increased significantly due to new businesses and expansion of existing businesses. • Investment earnings increased $419,765 due to an increase in the size of the city's investment portfolio and an increase in the weighted average yield maintained during the fiscal year. This accounted for 4% of the total increase. 7 • Capital contributions account for $2,190,400 or 21.4% of this increase. These contributions consisted of land and street infrastructure from developers. • Increased expenses are primarily attributed to personnel cost and increased payments to Dallas and Fort Worth for their share of revenue resulting from airport property that is subject to a revenue sharing agreement. City of Euless' Changes in Net Assets Revenues: Program revenues: Fees, Fines and Charges for services Governmental activities 2007 2006 Business -type activities 2007 2006 $ 6,584,474 $ 7,151,372 $ 19,894,312 $ 22,019,449 $ Operating grants and contributions 411,857 592,231 Capital grants and contributions 2,199,106 8,706 General revenues: Property taxes 12,343,359 11,188,598 Sales taxes 13,990,652 12,303,965 Other taxes 16,903,694 16,999,325 Investment earnings 2,031,580 1,611,815 Contributions from property owners Irnpact Fees Gain (loss) on sale/retirement of fixed assets 74,163 24,866 Miscellaneous Total revenues 54,538,885 49,880,878 Expenses Culture and recreation Development services General government Highways and streets Public safety Interest on long -terns debt Water & sewer Drainage utility Golf course Other enterprise fiinds Total expenses Increase (decrease) in net assets before transfers Transfers Increase (decrease) in net assets Net assets 10/01/06 Net assets 09/30/07 5,002,569 1,487,102 16,495,449 2,206,697 17,047,334 2,664,658 4,892,346 1,169,285 15,122,831 2,211,083 16,252,071 2,741,754 44,903,809 42,389,370 9,635,076 617,418 10,252,494 76,829,456 $ 87,081,950 7,491,508 709,969 8,201,477 68,627,979 $ 76,829,456 2007 Total 2006 26,478,786 $ 29,170,821 411,857 592,231 1,012,919 312,835 3,212,025 321,541 1,023,865 253,786 277,004 224,001 22,685,887 15,418,299 1,059,272 4,250,866 2,109,291 22,837,728 12,343,359 11,188,598 13,990,652 12,303,965 - 16,903,694 16,999,325 771,888 3,055,445 2,383,703 271,707 253,786 271,707 2,908,437 26,284,316 15,285,026 884,763 4,003,035 1,842,550 22,015,374 (151,841) 4,268,942 (617,418) (709,969) (769,259) 67,377,927 $ 66,608,668 $ 3,558,973 63,818,954 67,377,927 351,167 24,866 224,001 2,908,437 77,224,772 , 76,165,194 5,002,569 4,892,346 1,487,102 1,169,285 16,495,449 15,122,831 2,206,697 2,211,083 17,047,334 16,252,071 2,664,658 2,741,754 15,418,299 15,285,026 1,059,272 884,763 4,250,866 4,003,035 2,109,291 1,842,550 67,741,537 64,404,744 9,483,235 11,760,450 9,483,235 11,760,450 144,207,383 132,446,933 $ 153,690,618 $ 144,207,383 8 Business -type activities. Business -type activities decreased the City's net assets by $769,259 accounting for an 8% loss net assets. Key elements of this decrease are as follows: • Water and sewer revenues decreased $2,335,347 due to a decrease in total consumption caused by excessive rainfall during the year. • Expenses increased due to a rate increase from Trinity River Authority for water purchased and wastewater treated, as well as an increased personnel cost. • The overall decrease in net assets from business type activities is primarily attributed to operating losses from water, wastewater, drainage and recreational operations. Expenses and Program Revenues — Governmental Activities $20,000,000 ■ Expenses _ ■ Program Revenues $16,000,000 $12,000,000 $8,000,000 $4,000,000 $0 Gen & admin Culture & Dev Hwy and rec services streets Expenses and Program Revenue — Business -type Activities $20,000,000 $16,000,000 $12,000,000 $8,000,000 $4,000,000 $0 Water & Sewer Drainage Financial Analysis of the Government's Funds Golf Public Int on long - safety term debt ■ Expenses • Program Revenues Other As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. 9 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 $30,439,383, an increase of $2,888,201 in comparison with the prior year. Approximately 87% constitutes unreserved fund balance, which is available for spending at the government's discretion. The remainder of fund balance is reserved to indicate that it is not available for new spending because it has already been committed 1) to pay debt service ($1,893,893), 2) to pay for specific capital improvements per development agreements ($1,598,658), and 3) for a variety of other restricted purposes ($395,195). In the General Fund, the City budgeted for a decrease in fund balance (planned reduction) of $2,120,867, due primarily to the anticipated purchase of capital items on a pay-as-you-go financing basis. Due to positive budget variances in both revenues and expenditures, the actual fund balance for fiscal year 2007 increased by $1,686,681. The Debt Service fund balance increased $317,758 due to delinquent property tax collections. Street CIP fund balance decreased $1,667,076 due to infrastructure improvements on several major thoroughfares. The Car Rental Tax fund balance was budgeted to increase $2,272,096. Activity for this fund resulted in an actual increase in fund balance of $3,251,572 due to increased collections of car rental taxes. Proprietary funds. The City's proprietary fund statements provide the same type of information found in the government -wide financial statements but in more detail. Unrestricted net assets of the proprietary funds at the close of the fiscal year are: Water and Sewer fund- $12,063,663, Drainage Utility fund - $1,507,331, Golf Course - $277,901, and all non -major enterprise funds combined - $1,610,233. All proprietary funds experienced a decrease in unrestricted net assets. As mentioned, these operations are dependent on weather conditions, therefore significantly impacted by excessive rainfall. 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, 2007, totaled $165,225,181 (net of accumulated depreciation). The investment in capital assets includes land, buildings, improvements, machinery and equipment, infrastructure and construction in progress. The total increase in the City's investment in capital assets for the current fiscal year was $9,713,385 or 6.3%. Major capital asset events during the current fiscal year included the following: • Developer's contributed $1,622,201 in land, $576,905 in street infrastructure, $201,762 in sewer infrastructure, $641,264 in water infrastructure, and $169,894 in drainage infrastructure. 10 • Completion of several overlay and sidewalk projects at a total cost of $478,735 which included East Midway Road, Midway Road (from North Main to 157), and Fuller Wiser Road (from Harwood to Midway) as well as various smaller projects throughout the city. • Completion of the reconstruction of West Pipeline Road which included land purchased for right-of-way ($299,033) and infrastructure improvements of ($5,745,797). • Construction -in -progress additions related to general government operations of $1,352,657 primarily consisted of Glade Road ($1,021,500), Midway Park Trail System ($169,371), and various street projects. • Construction -in -progress additions related to enterprise fund operations totaled $1,431,541 primarily consisting of water and wastewater line replacement ($1,192,711), and drainage infrastructure improvements ($213,453). • Completion of $1,172,375 in water and wastewater infrastructure including well repairs on North Main Street, the Community Development Block Grant project in Oakwood Terrace, and channel stabilization. • Completion of a new Public Works Facility at a total cost of $2,064,319. City of Euless' Capital Assets (Net of Accumulated Depreciation) LBW Buildings lrnproveimnts other than buildings Machinery and equipment Infiastnichve Construction in process Govemmental activities 2007 2006 $24,068,687 $22,147,453 31,645,850 30,690,681 Business -type activities 2007 2006 $2,776,602 $2,776,602 2,831,331 2,954,987 2,566,992 2,623,952 28,978,511 27,601,874 3,788,247 3,482,935 695,270 444,898 35,996,628 30,677,666 27,897,210 28,502,560 2,282,082 6,970,959 1,697,771' 1,648,125 Total 2007 2006 $26,845,289 $24,924,055 34,477,181 33,645,668 31,545,503 30,225,826 4,483,517 3,927,833 63,893,838 59,180,226 3,979,853 8,619,084 Total $100,348,486 $96,593,646 $64,876,695 $63,929,046 $165,225,181 $160,522,692 Additional information on the City's capital assets can be found in note 3 on pages 37-39 of this report. Long-term debt. At the end of the current fiscal year, the City had total bonded debt outstanding of $63,413,791. Of this amount, $51,440,325 comprises debt backed by the full faith and credit of the government. The remainder of the City's debt, $11,725,000, represents bonds secured solely by specific revenue sources (i.e. revenue bonds). 11 City of Euless' Outstanding Debt General obligation bonds Certificates of obligation Revenue bonds Deferred losses on refunding bonds Total Governmental activities 2007 $27,350,000 15,555,000 6,540,000 2006 $28,820,000 16,480,000 7,175,000 Business -type activities 2007 2006 $10,560,000 5,185,000 (1,121,969) (1,204,778) (1,055,003) $48,323,031 $51,270,222 $14,689,997 Total 2007 2006 $11,005,000 $37,910,000 $39,825,C. 15,555,000 16,480,00u 5,590,000 11,725,000 12,765,00n (1,096,293) (2,176,971) (2,301,07 $15,498,707 $63,013,029 $66,768,9� The City's total debt decreased $3,755,900 or 5.6% during fiscal year 2007. This decrease is primarily attributed to scheduled annual principal payments. The City has an "Al " rating from Moody's and an AA- rating from Standard & Poor's for general obligation debt. The revenue bonds have been rated "Al" by Moody's and "A+" by Standard & Poor's. Additional information on the City's long-term debt can be found in Note 4 on pages 40-45. Economic Factors and Next Year's Budgets and Rates In the fiscal year 2007-08 budget, General Fund revenues and transfers are budgeted to increase by 5% from the 2006-07 budget year with property taxes making up about 30% of budgeted revenues and sales tax making up about 33% of budgeted revenues. Certified assessed valuations as of September 1, 2007, increased 6.6% over the preceding year. As of September 30, 2007, the City's unemployment rate is 3.8% compared to the State of Texas, which is 4.7%. In the FY2007-08 budget, sales tax receipts are projected to have a significant increase due to the addition of the Shops at Vineyard Villages which is located along Glade Road and State Highway 121 and projected expansion of existing businesses. The car rental tax receipts are also projected to increase due to increased rental rates at the DFW Airport Consolidated Car Rental Facility. Baseline budgeted expenditures in the General Fund are projected to increase approximately 10% over FY2006-07. This increase is primarily attributed to a 5% salary package for employees, increased contributions to the city's health insurance fund, and increased economic development incentive rebates. Departments were asked to hold increases in operating expenses to a minimum in order to fund the employee salary and benefit package. The City elected to continue its current level of funding for street maintenance and construction and "pay-as-you-go" capital replacements due to the importance placed on these items. The tax rate decreased from .4895¢ to .47000 per $100 of assessed value for fiscal year 2008. 12 The FY2007-08 budget anticipated a water rate increase of 17¢ and a wastewater rate increase of 210 due to a pass -through of increased cost from Trinity River Authority. The City budgeted to continue its "pay-as-you-go" capital program in the Water and Sewer fund which includes approximately $1,158,000 of infrastructure improvements. The Texas Star Golf Course revenues and rounds are budgeted to remain flat as compared to prior year budget. While we are pleased that Texas Star has seen a significant improvement in operations during the current year, increases in both fuel and utility costs, coupled with the saturation of the golf market continue to present challenges for this operation. Request for Information The financial report is designed to provide our 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 vodriauez aeci.euless.tx.us, 13 CITY OF EULESS, TEXAS GOVERNMENT -WIDE STATEMENT OF NET ASSETS SEPTEMBER 30, 2007 Primary Government Governmental Business -type Activities Activities Total ASSETS Deposits and investments $ 40,942,569 $ 13,349,108 $ 54,291,677 Receivables (net of allowances for uncollectibles) 7,294,967 2,532,551 9,827,518 Internal balances 693,622 (693,622) Inventory of supplies 10,643 252,072 262,715 Prepaid Items 623,931 166,197 790,128 Restricted assets: Cash and cash equivalents 120,799 120,799 Investments 4,094,733 4,094,733 Deferred charges 289,028 233,274 522,302 Capital assets: Land and construction in progress 26,350,769 4,474,373 30,825,142 Other capital assets, net of accumulated depreciation 73,997,718 60,402,321 134,400,039 Total assets and other debits 150,203,247 84,931,806 235,135,053 LIABILITIES AND NET ASSETS LIABILITIES: Accounts payable 11,824,151 1,661,808 13,485,959 Accrued liabilities 972,318 478,708 1,451,026 Accrued interest payable 351,879 94,005 445,884 Deferred revenue 64,468 64,468 Money held in escrow 1,334,152 1,334,152 Noncurrent liabilities: Due within one year 3,165,847 940,727 4,106,574 Due in more than one year 46,807,102 13,749,270 60,556,372 Total liabilities 63,121,297 18,323,138 81,444,435 NET ASSETS: Invested in capital assets, net of related debt 58,251,542 50,186,697 108,438,239 Restricted for debt service 1,725,998 1,725,998 Unrestricted 27,104,410 16,421,971 43,526,381 Total net assets $ 87,081,950 $ 66,608,668 $ 153,690,618 The Notes to the Basic Financial Statements are an integral part of this statement. 14 CITY OF EULESS, TEXAS GOVERNMENT -WIDE STATEMENT OF ACTIVITIES YEAR ENDED SEPTEMBER 30, 2007 Pro ram Activities Primary government: Governmental Activities: Culture and recreation Development services General and administrative Highways and streets Public safety Interest on long-term debt Total governmental activities Business -type activities: Water & sewer Drainage utility Golf Other Total business -type activities Total primary government Change in Net Assets NET ASSETS, beginning of year NET ASSETS, end of year The Notes to the Basic Financial Statements are an integral part of this statement. Expenses 5,002,569 1,487,102 16,495,449 2,206,697 17, 047, 334 2,664,658 44,903,809 15,418,299 1,059,272 4,250,866 2,109,291 22,837,728 $ 67.741,537 Fees, Fines and Charges for Services Program Revenues Net (Expense) Revenue and Changes in Net Assets Primary Govemment Operating Grants Capital Grants Governmental Business - Type and Contributions and Contributions Activities Activities Total $ 83,084 $ 833,822 1,252, 030 (8,026) 4,423,564 6,584,474 13,730,467 701,476 3,825.486 1,636.883 19,894,312 $ 26.478 786 $ GENERAL REVENUES: Taxes: Property Taxes, levied for general purposes Sales Taxes Other Taxes Interest on Investments Impact fees Gain/(Loss) on Sale of Assets Miscellaneous Transfers Total general revenues and transfers S - $ (4,919.485) S S (4.919.485) - (653.280) - (653.280) - (15,243.419) (15.243.419) - 2,199,106 (15,617) (15.617) 411.857 (12,211.913) - (12.211,913) - (2.664.658) - (2.664.658) 411,857 2,199,106 (35,708.372) - (35,708.372) 843,025 169,894 1,012,919 - 411.857 S 3.212,025 _ (35.708.372)_ $ 12,343,359 $ 13,990.652 16.903,694 2,031,580 74.163 617,418 45,960,866 10,252,494 76,829.456 (844.807) (844.807) (187.902) (187.902) (425.380) (425.380) (472,408) (472.408) (1.930,497) (1.930.497) (1.930.497), 137.638.869 ).. 1,023.865 253,786 277.004 224,001 (617,418) 1.161.238 (769,259) 67,377,927 $ 12.343.359 13,990.652 16.903,694 3.055.445 253.786 351.167 224.001 47,122.104 9.483.235 144,207,383 $ 87,081,950 $ 66.608.668 S 153,690.618 CITY OF EULESS, TEXAS BALANCE SHEET - GOVERNMENTAL FUNDS SEPTEMBER 30, 2007 Debt Streets Car Other Total General Service CIP Rental Tax Governmental Governmental ASSETS Fund Fund Fund Fund Funds Funds Deposits and investments 11,640,362 $ 937,839 $ 3,898,707 $ 11,472,301 $ 7,527,058 $ 35,476,267 Receivables: Property taxes 382,381 186,958 569,339 Accounts receivable and unbilled revenue 3,015,839 - 2,199,773 73,082 5,288,694 Accrued interest receivable 181,939 14,082 28,596 97,219 49,289 371,125 Due from other funds 1,656,475 - 1,656,475 Due from other governments - - 944,081 944,081 Prepaids and deposits 103,878 - 51,408 155,286 inventories, at cost 10,643 - 10,643 Total assets $ 15,335,042 $ 1,138,879 $ 3,927,303 $ 15,425,768 $ 8,644,918 $ 44,471,910 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 1,957,511 $ $ 1,034,289 $ 7,874,620 $ 467,920 $ 11,334,340 Accrued salaries and wages 848,666 - - 111,681 960,347 Deferred revenue 1,541,423 183,984 - - 12,433 1,737,840 Total liabilities 4,347,600 183,984 1,034,289 7,874,620 592,034 14,032,527 Fund Balances: Reserved for: Debt service 954,895 - 938,998 1,893,893 Computer 336,966 - - 336,966 Development agreements - 1,598,658 1,598,658 Betterment 7,293 - - - 7,293 Library - - Injured animals 4,557 - - - 4,557 Historical Preservation 1,245 1,245 9-1-1 Emergency System 22,805 - - - - 22,805 Technology 13,652 - - - 13,652 Library remodel 6,200 - - 6,200 Victim assistance 2,477 - - - 2,477 Unreserved: Designated for: Contingency 500,000 - - 500,000 Emergency 500,000 - - - 500,000 Undesignated, reported in: General fund 9,593,492 - 9,593,492 Special revenue funds - 7,551,148 3,779,569 11,330,717 Capital projects funds - 2,893,014 1,734,414 4,627,428 Total fund balances 10,987,442 954,895 2,893,014 7,551,148 8,052,884 30,439,383 Total liabilities and fund balances $ 15,335,042 $ 1,138,879 $ 3,927,303 $ 15,425,768 $ 8,644,918 $ 44,471,910 The Notes to the Basic Financial Statements are an integral part of this statement. 16 CITY OF EULESS, TEXAS RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS SEPTEMBER 30, 2007 Total fund balances - governmental funds $ 30,439,383 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not current financial resources and therefore are not reported in the governmental funds balance sheet. 100,348,487 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. 289,030 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. (351,879) 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, capital assets and long term liabilities. 4,604,470 Revenues earned but not available within sixty days of the year end are not recognized as revenue on the fund financial statements. 1,725,407 Long-term liabilities, including bonds payable are not due and payable in the current period and therefore are not reported in the fund financial statements. (49,972,948) Net assets of governmental activities $ 87,081,950 The Notes to the Basic Financial Statements are an integral part of this statement. 17 CITY OF EULESS, TEXAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2007 Debt Streets Car Other Total General Service CIP Rental Tax Governmental Governmental Fund Fund Fund Fund Funds Funds Revenues: General property tax $ 8,730,836 $ 3,751,254 $ - $ $ - $ 12,482,090 Gross receipts tax 3,707,355 - - 240,457 3,947,812 General sales tax 8,818,970 - 5,171,682 13,990,652 Car rental tax - 12,955,882 - 12,955,882 Fines and fees 4,348,839 - - 4,348,839 Licenses and permits 804,404 - - - 804,404 Investment income 628,960 80,210 217,049 503,415 354,858 1,784,492 OEA revenues - - 5,360 5,360 Intergovernmental 334,979 - - 334,979 Other revenues 414,647 978,520 - 120,344 1,513,511 Total revenues 27,788,990 4,809,984 217,049 13,459,297 5,892,701 52,168,021 Expenditures: Current: Culture and recreation 2,872,862 - 1,627,340 4,500,202 Development services 1,048,220 - - - 413,002 1,461,222 General and administrative 7,351,045 - 8,608,010 418,656 16,377,711 Highways and streets 693,711 - - 693,711 Public safety 15,133,250 - 1,825,738 16,958,988 Debt service: Principal - 2,395,000 635,000 3,030,000 Interest and fiscal charges - 2,292,463 - 290,589 2,583,052 Capital outlay and maintenance - 1,886,996 - 1,890,229 3,777,225 Total expenditures 27,099,088 4,687,463 1,886,996 8,608,010 7,100,554 49,382,111 Excess (deficiency) of revenues over expenditures 689,902 122,521 (1,669,947) 4,851,287 (1,207,853) 2,785,910 Other financing sources (uses) Transfers in 1,482,842 195,237 2,871 74,542 1,165,107 2,920,599 Transfers out (486,063) - (1,674,257) (657,861) (2,818,181) Total other financing sources (uses) 996,779 195,237 2,871 (1,599,715) 507,246 102,418 Net change in fund balances 1,686,681 317,758 (1,667,076) 3,251,572 (700,607) 2,888,328 Fund balances, beginning of year 9,300,761 637,137 4,560,090 4,299,576 8,753,491 27,551,055 Fund balances, end of year $ 10,987,442 $ 954,895 $ 2,893,014 $ 7,551,148 $ 8,052,884 $ 30,439,383 The Notes to the Basic Financial Statements are an integral part of this statement. 18 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, 2007 Net change in fund balances - total governmental funds Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount of capital assets recorded in the current period. Governmental funds do not recognize assets contributed by developers. However, in the statement of activities the fair market value of those assets are recognized as revenue, then allocated over their estimated useful lives and reported as depreciation expense. Depreciation expense on capital assets is reported in the statement of activities but does not require the use of current financial resources. Therefore, depreciation expense is not reported as expenditures in the governmental funds. 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. Current year changes in long term liability for compensated absences do not require the use of current financial resources; therefore, are not reported as expenditures in governmental funds $ 2,888,328 4,715,567 2,199,106 (3,308,242) 2,611,601 138,610 Current year changes in accrued interest payable do not require the use of current financial resources; therefore, are not reported as expenditures in governmental funds. 47,140 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 amount allocated to business -type activities. 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. Change in Net Assets of Governmental activities The Notes to the Basic Financial Statements are an integral part of this statement. 19 1,125,165 (164,781) $ 10,252,494 CITY OF EULESS, TEXAS STATEMENT OF NET ASSETS PROPRIETARY FUNDS SEPTEMBER 30, 2007 ASSETS Current assets: Deposits and investments Revenue bond emergency: short-term investments Capital projects account: Cash and cash equivalents Short-term investments Accounts receivable and unbilled revenue less allowance for uncoilectlbles of $15,418 for water and sewer and $395 for drainage utility Accrued interest receivable Prepaids and deposits Inventory Due from other funds Total current assets Non -current assets: Bond issuance cost Less accumulated amortization Net bond issuance cost Property, plant and equipment in service, at cost Land Building Equipment Improvements Construction in progress Waterworks and sanitary sewer system Less accumulated depreciation Net property, plant and equipment in servic Total non -current assets TOTAL ASSETS Water and Sewer Business - Type Activities - Enterprise Funds Other Drainage Golf Eutui p, Ise Utility Course Funds 8,037,188 $ 1,552,990 500,000 120,799 3,594,733 2,183,875 124,601 141,755 83,276 232 565 15,018,7132 194,247 104,223 90,024 1,528,966 186,465 810,243 1,033,401 1,478,371 52,253,991 57,291,437 24,473,512 32,817,925 32,907,949 $ 47,926,741 2,187,067 $ 1,571,863 (1 of 2) Governmental Total Activities - Enterprlse Internal Funds Service Funds $ 13,349,108 $ 5,466,300 500,000 120,799 3,594,733 83,061 93,823 11,968 2,372,727 9,811 18,843 6,569 159,824 - 10,783 13,659 166,197 95,274 73,522 252,072 - - 236,000 468,565 1,645,862 2,405,790 1,913,581 20,984,025 148,644 133,873 14,771 314,969 23,303,759 219,400 23,838,128 7,328,709 16,509,419 16, 524,190 $ 18,170,052 144,674 49,341 95,333 348,135 3,402,783 1,414,212 7,967,841 13,132,971 4,183, 729 8,949,242 9,044,575 $ 11,450,365 47,658 14,512 33,146 584,532 488,275 243,854 7,605,204 8,921,865 2,321,757 6,600,108 6,633,254 $ 8,546,835 535,223 301,949 233,274 2,776,602 4,077,523 2,468,309 39,910,205 1,697, 771 52,253,991 103,184,401 38,307,707 64,876,694 65,109,968 $ 86,093,993 69,263 52,465 468,645 6,056,673 6,426,455 6,426,455 3,964,367 2,462,088 2,462,088 $ 8,518,761 The Notes to the Basic Financial Statements are an integral part of this statement. 20 CITY OF EULESS, TEXAS STATEMENT OF NET ASSETS PROPRIETARY FUNDS SEPTEMBER 30, 2007 LIABILITIES Current liabilities: Payable from current assets: (2 of 2) Business - Type Activities - Enterprise Funds Governmental Other Total Activities - Water and Drainage Golf Enterprise Enterprise Internal Sewer Utility Course Funds Funds Service Funds Accounts payable 1,353,459 136,186 110,531 $ 61,632 $ 1,661,808 $ 98,245 Accrued salaries and wages 317,236 12,318 115,594 33,560 478,708 11,971 Current portion of bonds payable 190,000 330,000 125,000 645,000 Accrued insurance claims - - 379,134 Deferred revenue 63,908 560 64,468 Current obligations payable from restricted assets: Current portion of bonds payable 235,000 - 235,000 Accrued interest 40,306 4,798 44,149 4,752 94,005 Total current liabilities 1,946,001 343,302 664,182 225,504 3,178,989 489,350 Non -current liabilities: Customer and escrow deposits 1,334,152 - 1,334,152 Bonds payable 4,238,435 410,000 8,068,653 1,092,909 13,809,997 Due to other funds 1,889,040 236,000 2,125,040 Total non -current liabilities 5,572,587 410,000 9,957,693 1,328,909 17,269,189 Total liabilities 7,518,588 753,302 10,621,875 1,554,413 20,448,178 489,350 NET ASSETS Invested in capital assets, net of related debt 28,344,490 15,909,419 550,589 5,382,199 50,186,697 2,462,088 Unrestricted 12,063,663 1,507,331 277,901 1,610,223 15,459,118 5,567,323 Total net assets $ 40,408,153 $ 17,416,750 $ 828,490 $6,992,422 $65,645,815 $ 8,029,411 Reconciliation to government -wide statement of net assets: Adjustment to reflect the consolidation of internal service funds' activities related to enterprise funds Net assets of business -type activities 962,853 $66,608,668 The Notes to the Basic Financial Statements are an integral part of this statement. 21 CITY OF EULESS, TEXAS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS YEAR ENDED SEPTEMBER 30, 2007 Business - Type Activities - Enterprise Funds Governmental Other Total Activities - Water and Drainage Golf Enterprise Enterprise Internal Sewer Utlllty Course Funds Funds Service Funds Operating revenues: Water service $ 8,107,488 $ $ $ - $ 8,107,488 $ Sewer service 4,699,550 - - 4,699,550 Drainage fees 701,476 - - 701,476 Recreation fees 407,551 407,551 Insurance premiums - - 4,358,723 Service fees and miscellaneous 923,429 3,825,486 1,229,332 5,978,247 591,342 Total operating revenues 13,730,467 701,476 3,825,486 1,636,883 19,894,312 4,950,065 Operating expenses: General and administrative 414,701 414,701 246,901 Water production 5,463,012 - - 5,463,012 Water distribution 677,820 - - - 677,820 Utility engineering 435,895 - 435,895 Sewage collection and treatment 2,307,430 2,307,430 Nondepartmental 2,967,253 - 2,967,253 Geographic Information 387,255 - 387,255 Service center 1,015,389 1,015,389 Drainage 420,586 - 420,586 - Recreation classes - 415,617 415,617 Golf course 1,279,480 1,279,480 Pro shop 461,061 - 461,061 - Food and beverage 1,085,721 - 1,085,721 - Conference center - - 261,079 - 261,079 - Cart operations - 157,829 - 157,829 Athletic complex 263,877 263,877 Softball complex - 972,543 972,543 - Arbor Daze - 58,993 58,993 Insurance costs - - 3,815,696 Depreciation 1,410,568 578,855 550,790 325,537 2,865,750 524,792 Amortization 14,757 25,295 26,306 17,337 83,695 Total operating expenses 15,094,080 1,024,736 3,822,266 2,053,904 21,994,986 4,587,389 Operating income (loss) (1,363,613) (323,260) 3,220 (417,021) (2,100,674) 362,676 Nonoperating revenues (expenses): Impact fees 253,786 - 253,786 Gain on sale of capital assets - - - 74,163 Investment income 728,521 89,171 117,089 89,084 1,023,865 247,088 Other revenue 186,213 90,791 - 277,004 Interest on bonds (213,643) (34,303) (400,587) (43,971) (692,504) Total nonoperating revenues (expenses), net 954,877 54,868 (192,707) 45,113 862,151 321,251 Income (loss) before contributions and transfers (408,736) (268,392) (189,487) (371,908) (1,238,523) 683,927 Developer contributed assets 843,025 169,894 1,012,919 Transfers in 10,465 - 209,947 7,844 228,256 740,000 Transfers out (943,070) (34,752) (85,007) (7,844) (1,070,673) Net income (loss) (498,316) (133,250) (64,547) (371,908) (1,068,021) 1,423,927 Net assets, beginning of year 40,906,469 17,550,000 893,037 7,364,331 6,605,484 Net assets, end of year $ 40,408,153 $ 17,416,750 $ 828,490 $ 6,992,423 $ 8,029,411 Reconciliation to government -wide statement of net assets: Adjustment to reflect the consolidation of internal service funds' activities related to enterprise funds Change in net assets of business -type activities 298,762 $ (769,259) The Notes to the Basic Financial Statements are an integral part of this statement. 22 CITY OF EULESS, TEXAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED SEPTEMBER 30, 2007 Business Type Activities - Enterprise Funds Governmental Other Total Activities - Water and Drainage Golf Enterprise Enterprise Internal Sewer Utility Course Funds Funds Service Funds OPERATING ACTIVITIES Cash received from customers $ 14,083,580 $ 657,806 $ 3,800,514 $ 1,621,836 $ 20,163,736 $ 5,069,921 Cash payments to suppliers for goods and services (10,106,881) (245,919) (1,763,734) (1,290,040) (13,406,574) (4,312,591) Cash payments to employees for services (3,411,120) (107,446) (1,456,964) (472,326) (5,447,856) (95,922) Net cash provided by (used in) operating activities 565,579 304,441 579,816 (140,530) 1,309,306 661,408 NONCAPITAL FINANCING ACTIVITIES Transfer in 10,465 209,947 31,844 252,256 740,000 Transfer out (943,070) (34,752) (85,007) (31,844) (1,094,673) - Net cash provided by (used in) noncapital financing activities (932,605) (34,752) 124,940 (842,417) 740,000 CAPITAL AND RELATED FINANCING ACTIVITIES Impact fees 253,786 - 253,786 Interest paid on bonds (204,474) (29,505) (356,438) (43,971) (634,388) Reduction in bonds payable (220,000) (185,000) (325,000) (120,000) (850,000) Proceeds from bond issuances - Proceeds from gas lease Loss on refunding bond issuance Bond issuance costs Purchase of utility plant and equipment in service (1,695,050) (398,778) (385,289) (23,141) (2,502,258) (846,658) Proceeds from sale of equipment - 74,164 Net cash provided by (used in) capital and related financing activities (1,865,738) (613,283) (1,066,727) (187,112) (3,732,860) (772,494) INVESTING ACTIVITIES Proceeds from other revenues - - Proceeds from sale of investment securities 191,610 - 191,610 - Interest received on investments 741,719 85,209 117,089 89,084 1,033,101 215,153 Net cash provided by investing activities 933,329 85,209 117,089 89,084 1,224,711 215,153 Net change in cash and cash equivalents (1,299,435) (258,385) (244,882) (238,558) (2,041,260) 844,067 Cash and cash equivalents, beginning of year 9,457,422 1,811,375 2,431,949 1,810,421 15,511,167 4,622,233 Cash and cash equivalents, end of year $ 8,157,987 $ 1,552,990 $ 2,187,067 $ 1,571,863 $ 13,469,907 $ 5,466,300 The Notes to the Basic Financial Statements are an integral part of this statement. 23 CITY OF EULESS, TEXAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED SEPTEMBER 30, 2007 Business Type Activities - Enterprise Funds Governmental Other Total Activities - Water and Drainage Golf Enterprise Enterprise Internal Sewer Utility Course Funds Funds Service Funds Reconciliation of operating Income (loss) to net cash provided by (used in) operating activities Operating income (loss) $ (1,363,613) $ (323,260) $ 3,220 $ (417,021) $ (2,100,674) $ 362,676 Adjustments to reconcile operating income (loss) to net cash provided by operating activities Depreciation and amortization 1,425,325 604,150 577,096 342,874 2,949,445 524,792 Gain on disposal of equipment - 21,390 Change in assets and liabilities: Accounts receivable and unbilled revenue 331,376 (43,667) (28,432) (15,047) 244,230 98,466 Prepaids and deposits (140,437) (3,784) 5,575 (138,646) (469,443) Inventory (15,107) 26,154 (26,684) (15,637) - Accounts payable 321,772 64,458 (8,972) (33,577) 343,681 127,543 Accrued salaries and wages (15,474) 2,760 11,074 3,350 1,710 (1,865) Accrued insurance claims - - - (2,151) Customer and escrow deposits 24,210 - 24,210 Deferred revenue (2,473) - 3,460 987 Net cash provided by (used In) operating activities $ 565,579 $ 304,441 $ 579,816 $ (140,530) $ 1,309,306 $ 661,408 Noncash investing, capital and financing activities Developer contributed assets $ 843,025 $ 169,894 $ $ - $ 1,012,919 Reconciliation of cash to balance sheet: Cash - current $ 8,037,188 $ 1,552,990 $ 2,187,067 $ 1,571,863 $ 13,349,108 Cash - capital projects account 120,799 - - 120,799 Cash and cash equivalents $ 8,157,987 $ 1,552,990 $ 2,187,067 $ 1,571,863 $ 13,469,907 The Notes to the Basic Financial Statements are an integral part of this statement. 24 CITY OF EULESS, TEXAS STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS SEPTEMBER 30, 2007 Assets: Deposits and investments Total assets Liabilities: Due to other entities Total liabilities Agency Funds $ 2,339,529 $ 2,339,529 $ 2,339,529 $ 2,339,529 The Notes to Basic Financial Statements are an integral part of this statement. 25 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES General Statement The City of Euless (the "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 sewer 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 applicable to state and local governments. Generally accepted accounting principles 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 accounting principles generally accepted in the United States of America the financial statements of the City include the primary government and organizations for which the primary government is financially accountable and other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete. The definition of the reporting entity is based primarily on the notion of financial accountability. A primary government is financially accountable for the organizations that make up its legal entity. It is also financially accountable for legally separate organizations if its officials appoint a voting majority of an organization's governing body and either it is able to impose its will on that organization or there is a potential for the organization to provide specific financial benefits to, or to impose specific financial burdens on, the primary government. A primary government may also be financially accountable for governmental organizations that are fiscally dependent on it. A primary government has the ability to impose its will on an organization if it can significantly influence the programs, projects, or activities of, or the level of services performed or provided by, the organization. A financial benefit or burden relationship exists if the primary government (a) is entitled to the organization's resources; (b) is legally obligated or has otherwise assumed the obligation to finance the deficits of, or provide financial support to, the organization; or (c) is obligated in some manner for the debt of the organization. 26 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Financial Reporting Entity — Continued Blended Component Units - The Euless Development Corporation ("Corporation") is used to account for the accumulation of half -cent tax proceeds dedicated to build and improve City parks and facilities, enhance library services, and stimulate 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 Board of Directors. Financial information for both entities may be obtained from the City. 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 for 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. 27 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Basis of Presentation — Continued Governmental funds are those funds through which most governmental functions typically are 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. 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 Tong -term debt paid primarily from taxes levied by the City. The fund balance of the Debt Service Fund is reserved to signify the amounts that are restricted exclusively for debt service expenditures. Streets Capital Improvements Capital Project Fund The Streets Capital Improvements Fund is used to account for the construction of improvements to various street projects. Car Rental Tax Fund The Car Rental Tax Fund is used to account for revenues and expenditures received from collection of short-term motor vehicle rental taxes. Revenues are used primarily for debt reduction, one-time capital projects, and to maintain the property tax rate. 28 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Basis of Presentation — Continued 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 Sewer Fund Water and Sewer Fund is used to account for the acquisition, operation and maintenance of a municipal water and sewer utility, supported primarily by user charges to the public. 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. Additionally, the City reports the Internal Service Funds which are used to account for equipment replacement, self funded property and casualty self insurance, and self funded health and disability insurance provided to departments of the City. 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 29 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Measurement Focus and Basis of Accounting — Continued accounting. The economic resources measurement focus means all assets and liabilities (whether current or non -current) are included on the statement of net assets and the operating statements present increases and decreases in net total assets. Under the accrual basis of accounting, revenues are recognized when earned, including unbilled water and sewer 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 are collected within 60 days after year end. Expenditures are recorded when the related fund liability is incurred. However, debt service expenditures, as well as expenditures related to compensated absences are recorded only when payment is due. 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 government 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. Nonparticipating contracts are reported at 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. 30 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED 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 $.4895 per $100 of assessed valuation ($.4918 per $100 last year) and assessed valuation is approximately 100% of estimated value. Inventories Inventories, which are recognized as expenditures/expenses as they are 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 pro shop merchandise 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. 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/expenses initially made from it that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as a reduction of expenditures/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. 31 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Capital Assets — Continued Assets capitalized, not including infrastructure assets, 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 40 Years Water and Sewer System 33 1/3 Years Storm Drainage System 40 Years Infrastructure 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. 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). Nature and Purpose of Reservations and Designations of Fund Equity The City classifies 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 computer 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 library represents fees collected from the rental of library rooms that must be used for the maintenance of these areas. f. Reserved for injured animals represents donations from citizens that must be used for the treatment of animals picked up by the animal shelter. g. Reserved for historical preservation represents donations that must be used towards the preservation of Euless historical sites. h. Reserved for 9-1-1 emergency represents funding received from the county that must be used to upgrade emergency systems. i. Reserved for technology represents contributions which must be used to upgrade the city communications systems. j. Reserved for campus remodel represents amounts reserved for future capital expenditures relating to drainage maintenance at the library. k. Reserve for victim assistance represents amounts reserved for future expenditures relating to individuals who are victims of violent crimes. 32 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Nature and Purpose of Reservations and Designations of Fund Equity — Continued 2. Designations — used to denote that portion of fund equity, which is council established for future use. a. Designated for emergency represents amounts restricted by council for use in extreme emergencies. Expenditures must be council approved. b. Designated for contingency represents amounts restricted by council for use when extraordinary contingencies arise that have not been budgeted. Expenditures must be council approved. 3. Unreserved, undesignated — used to denote that portion of fund equity, which is available for appropriation. 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 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. NOTE 2. DEPOSITS AND INVESTMENTS GASB 40 Disclosures Deposits and investments As of September 30, 2007, the City's portfolio contained the following investments: % of Investment Type Book Value Fair Value Portfolio WAM Overnight pools: TexPool LOGIC Total Overnight Money Market Fund: Financial Investors Trust Total Money Market U.S. Issues: FFCB FHLB FHLMC FNMA Total U.S. Issues Total Portfolio $ 11,691,439 67 11,691,506 2,753,404 2,753,404 772,016 26,547,821 11,141,370 9,148,219 47,609,426 $ 62,054,336 $ 11,691,439 67 11,691,506 2,753,404 2,753,404 18.81% 0.00% 18.81% Rating Rating Agency 34 AAAm S&P 27 AAAm S&P 4.43% 9 AAAm S&P 4.43% 775,216 1.25% 26,599,022 42.79% 11,171,972 17.97% 9,170,382 14.75% 47,716,592 76.76% 6 AAA Fitch 148 Aaa Moody's 65 Aaa Moody's 53 AAA S&P $ 62,161,502 100.00% 271 33 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 2. DEPOSITS AND INVESTMENTS — CONTINUED GASB 40 Disclosures Deposits and investments — Continued Weighted average maturity ("WAM") 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, FHLMC — Federal Home Loan Mortgage Corporation, and FNMA — Federal National Mortgage Association. 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 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, 2007. At year end, the carrying amount of the City's deposits was a credit balance of $1,207,598 primarily consisting of outstanding checks, and the respective bank balances totaled $529,600. Of the total bank balance, the Federal Depository Insurance Corporation "FDIC" covered $100,000. The remainder was covered by collateral with a value of $4,898,586. The collateral is held by The Federal Reserve Bank in the city's name under a joint safekeeping agreement with Frost National Bank. Investments State statutes, city bond ordinances, and city resolutions authorize the City's investments. The City is authorized to invest in U.S. Government obligations and its agencies and instrumentalities, fully insured or collateralized certificates of deposits, 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. 34 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 2. DEPOSITS AND INVESTMENTS — CONTINUED GASB 40 Disclosures — Continued Investments — Continued 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, 2007, 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. 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. Interest Rate Risk In compliance with the City's Investment Policy, as of September 30, 2007, the City minimized the interest rate risk, relating to the decline in market value of securities due to rising interest rates in the portfolio by limiting the weighted average maturity to 365 days and the stated maturity date of security types not to exceed 2 years, with the exception of securities purchased 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. 35 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 2. DEPOSITS AND INVESTMENTS — CONTINUED GASB 40 Disclosures — Continued Interest Rate Risk — Continued The following details the maturity schedule for the City's investments as of September 30, 2007. Maturity Schedule % of Book Value Fair Value Portfolio Overnight $ 14,444,910 $ 14,444,910 23.24% 1 day to 3 months 7,873,573 7,877,762 12.67% 3 to 6 months 5,436,958 5,440,654 8.75% 6 to 9 months 6,363,277 6,371,425 10.25% 9 to 12 months 4,010,910 4,023,070 6.47% 12 to 15 months 8,969,930 9,000,094 14.48% 15 to 18 months 7,685,618 7,707,448 12.40% 18 to 24 months 6,269,160 6,295,349 10.13% over 24 months 1,000,000 1,000,800 1.61% TOTAL $ 62,054,336 $ 62,161,512 100.00% Credit Risk In compliance with the City's Investment Policy, as of September 30, 2007, 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 individual securities are minimized. 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 Deposits 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. 36 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 2. DEPOSITS AND INVESTMENTS — CONTINUED GASB 40 Disclosures — Continued Credit Risk — Continued Type of Collateral Eligible collateral other than mortgage -backed securities Mortgage -backed securities Securities 102% 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, 2007, 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. NOTE 3. CAPITAL ASSETS Capital asset activity for the year ended September 30, 2007, was as follows: Balance September 30, 2006 Increase Balance September 30, Decrease Adj/Transfer 2007 Governmental Activities Capital assets not being depreciated: Land $ 22,147,453 $ 299,033 $ $ 1,622,201 $ 24,068,687 Construction in progress 6,970,959 1,352,658 (6,041,535) 2,282,082 Total Assets not being depreciated: 29,118,412 1,651,691 (4,419,334) 26,350,769 Capital assets being depreciated: Buildings 38,848,952 2,099,605 - 40,948,557 Improvements other than buildings: 4,486,436 114,246 - 4,600,682 Infrastructure 49,659,421 2,382,103 4,419,334 56,460,858 Machinery and equipment 5,236,003 667,028 (669,652) 5,233,379 Total capital assets being depreciated: 98,230,812 5,262,982 (669,652) 4,419,334 107,243,476 37 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 3. CAPITAL ASSETS - CONTINUED Less accumulated depreciation: Buildings (8,158,271) (1,144,436) (9,302,707) Improvements other than buildings (1,862,484) (171,206) (2,033,690) Infrastructure (18,981,755) (1,482,475) - (20,464,230) Machinery and equipment (3,914,681) (510,125) 517,587 (3,907,219) Total accumulated depreciation: (32,917,191) (3,308,242) 517,587 - (35,707,846) Total capital assets being depreciated, net 65,313,621 1,954,740 (152,065) 71,535,630 Total governmental fund capital assets, net 94,432,033 3,606,431 (152,065) 4,419,334 97,886,399 Internal Service Funds Capital assets being depreciated: Machinery and equipment Total internal service assets being depreciated: Less accumulated depreciation: Machinery and equipment Total internal service funds capital assets, net Governmental Activities: capital assets, net 6,048,275 846,658 (468,478) - 6,426,455 6,048,275 846,658 (468,478) 6,426,455 (3,886,663) (524,792) 447,087 (3,964,368) 2,161,612 321,866 (21,391) 2,462,087 $ 96,593,645 $3,928,297 $ (173,456) $ $ 100,348,486 Balance September 30, 2006 Increase Balance September 30, Decrease Adj/Transfer 2007 Business -type activities: Capital assets not being depreciated: Land $ 2,776,602 $ - $ $ - $ 2,776,602 Construction in progress 1,658,010 1,493,887 - (1,454,126) 1,697,771 Total Assets not being depreciated: 4,434,612 1,493,887 (1,454,126) 4,474,373 38 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 3. CAPITAL ASSETS — CONTINUED Capital assets being depreciated: Buildings 4,077,523 4,077,523 Equipment 2,481,848 605,626 (617,465) (1,700) 2,468,309 Improvements 38,011,056 1,034,715 864,434 39,910,205 Utility system 50,908,834 755,464 - 589,692 52,253,990 Total capital assets being depreciated: 95,479,261 2,395,805 (617,465) 1,452,426 98,710,027 Less accumulated depreciation: Buildings (1,122,536) (123,656) (1,246,192) Equipment (2,046,837) (269,077) 492,399 50,475 (1,773,039) Improvements (10,409,182) (522,512) (10,931,694) Utility system (22,406,274) (1,950,506) (24,356,780) Total accumulated depreciation: (35,984,829) (2,865,751) 492,399 50,475 (38,307,705) Total capital assets being depreciated, net 59,494,432 (469,946) (125,066) 1,502,901 60,402,322 Business -type activities capital assets, net $ 63,929,044 $ 1,023,941 f$125,066) $ 48,775 $ 64,876,694 Depreciation expense was charged as direct expense to programs of the primary government as follows: Governmental activities: General and administrative $ 200,917 Public safety 1,040,472 Development services 350,117 Culture and recreation 636,558 Highways and streets 1,604,970 Total depreciation expense -Governmental activities $ 3,833,034 Business -type activities: Water and sewer $ 1,410,568 Drainage utility 578,856 Golf course 550,790 Other 325,537 Total depreciation expense -Business -type activities $ 2.865.751 Outstanding commitments at September 30, 2007, under authorized construction contracts were approximately $2,100,191. These outstanding commitments are to be financed by available deposit and investment balances, which include proceeds from previous bond issuances. 39 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 4. LONG-TERM DEBT At September 30, 2007, bonds payable consisted of the following individual issues: $1,000,000 Series 1999, Sales Tax Revenue Bonds, dated October 15, 1999, partially refunded in 2006, due in annual installments through 2009, bearing interest rates of 5.25%. $4,300,000 Series 2000, General Obligation Bonds, dated March 15, 2000, due in annual installments through 2008, bearing interest rate of 5.15%. $10,290,000 Taxable Series 2000, Revenue Certificates of Obligation, dated April 1, 2000, due in annual installments through 2025, bearing interest rates of 8.00% to 8.125%. $8,785,000 Series 2000A, Revenue Certificates of Obligation, dated May 1, 2000, due in annual installments through 2008, bearing interest rate of 7.30%. $3,260,000 Series 2000, Water and Sewer Revenue Bonds, dated March 15, 2000, partially refunding in 2006, due in annual installments through 2008, bearing interest rates of 5.25%. $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 4.875%. $1,630,000 Series 2001, Drainage Utility System Revenue Refunding Bonds, dated October 15, 2001, due in annual installments through 2010, bearing interest rates of 3.70% to 4.00%. Governmental Business -type $ 90,000 $ 185,000 9,080,000 360,000 2,365,000 140,000 600,000 40 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 4. LONG-TERM DEBT - CONTINUED $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 4.875%. Governmental Business -type 2,150,000 $6,430,000 Series 2002, Sales Tax Revenue Refunding Bonds, dated June 14, 2002, due in annual installments through 2015, bearing interest rates of 3.75% to 4.40%. 4,905,000 3,345,000 $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%. $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%. $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%. $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%. $2,145,000 Series 2004, Waterworks and Sewer System Revenue Bonds, dated June 15, 2004, due in annual installments through 2024, bearing interest rates of 3.50% to 5.25%. $13,900,000 Series 2005, General Obligation Refunding Bonds, dated March 8, 2005, due in annual installments through 2020, bearing interest rates of 3.00% to 5.00%. 2,890,000 3,965,000 13,500,000 10,560,000 1,930,000 41 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 4. LONG-TERM DEBT — CONTINUED $5,080,000 Series 2006, General Obligation Refunding Bonds, dated January 30, 2006, due in annual installments through 2021, bearing interest at 3.93%. $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%. $2,530,000 Series 2006, Water and Sewer Refunding Bonds, dated January 30, 2006, due in annual installments through 2020, bearing interest at 3.88%. Governmental Business -type 5,065,000 1,545,000 2,515,000 $ 49,445,000 $ 15,745,000 The following is a summary of long-term debt transactions of the City for the year ended September 30, 2007: Balance Balance Due Beginning End Within of Year Increases Decreases of Year One Year Governmental Type Activities General obligation bonds $ 28,820,000 $ $ (1,470,000) $ 27,350,000 $ 1,365,000 Certificates of obligation 16,480,000 (925,000) 15,555,000 980,000 Sales tax revenue bonds 7,175,000 (635,000) 6,540,000 665,000 Deferred loss on refunding bonds (1,301,182) 82,809 (1,218,373) 82,809 Premium on bonds 435,370 (34,607) 400,763 (34,607) Compensated absences 1,206,949 221,919 (83,309) 1,345,559 107,645 Total governmental type activities $ 52,816,137 $ 221,919 $ (3,065,107) $ 49,972,949 $ 3,165,847 Business -Type Activities Water and sewer revenue bonds $ 4,805,000 $ $ (220,000) $ 4,585,000 $ 235,000 Drainage utility revenue bonds 785,000 (185,000) 600,000 190,000 General obligation refunding bonds 11,005,000 (445,000) 10,560,000 455,000 Deferred loss on refunding bonds (1,096,293) 41,290 (1,055,003) 60,727 Total business type activities $ 15,498,707 $ - $ (808,710) $ 14,689,997 $ 940,727 Total government -wide activities $ 68,314,844 $ 221,919 $ (3,873,817) $ 64,662,946 $ 4,106,574 42 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 4. LONG-TERM DEBT — CONTINUED Defeased Debt Outstanding In prior years, the City defeased certain general obligation bonds, certificates of obligation, and revenue bonds by placing the proceeds of refunding debt issues in an irrevocable trust to provide for all future debt service payments on the defeased bonds. Accordingly, neither the trust assets nor the liability for the defeased debt are included in the City's financial statements. At September 30, 2007, the outstanding defeased debt of the City is detailed in the following table: Type of Obligation General obligation bonds Certificates of obligation Sales tax revenue bonds Water and sewer revenue bonds Annual Requirements to Retire Debt Obligations The annual aggregate maturities for each bond type for the September 30, 2007, are as follows: General Obligation Bonds: Governmental Activities 2008 2009 2010 2011 2012 2013-2017 2018-2022 2023-2027 2028-2032 Principal $ 1,365,000 1,635,000 1,695,000 1,755,000 1,835,000 10,790,000 7,805,000 470,000 $ 27,350,000 Interest $ 1,135,626 1,084,447 1,027,125 964,129 896,372 3,148,501 739,384 23,750 Outstanding $ 9,095,000 21,955,000 1,505,000 2,445,000 $ 35,000,000 years subsequent to Business -Type Activities Principal $ 455,000 465,000 480,000 485,000 510,000 2,650,000 2,465,000 3,050,000 Interest $ 386,657 376,876 365,644 352,975 338,657 1,422,524 947,285 355,604 $ 9,019,334 $ 10,560,000 $ 4,546,222 Total $ 3,342,283 3,561,323 3,567,769 3,557,104 3,580,029 18,011,025 11,956,669 3,899,354 $ 51,475,556 43 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 4. LONG-TERM DEBT - CONTINUED Annual Requirements to Retire Debt Obligations - Continued Certificates of Obligation: Governmental Activities 2008 2009 2010 2011 2012 2013-2017 2018-2022 2023-2027 Principal $ 980,000 665,000 700,000 750,000 785,000 4,065,000 4,445,000 3,165,000 Interest $ 1,033,262 $ 985,035 946,724 905,850 862,224 3,548,563 2,159,499 451,964 Business -Type Activities Principal Interest $ $ 15,555,000 $ 10,893,121 $ $ Revenue Bonds: Governmental Activities Principal 2008 $ 665,000 2009 690,000 2010 715,000 2011 755,000 2012 780,000 2013-2017 2,800,000 2018-2022 135,000 2023-2027 - Interest $ 265,716 239,987 211,938 183,512 153,498 287,735 7,954 Business -Type Activities Principal $ 425,000 445,000 465,000 270,000 275,000 1,575,000 1,415, 000 315,000 $ 6,540,000 $ 1,350,340 $ 5,185,000 Interest $ 216,497 198,735 181,952 163,556 152,972 589,637 240,138 23,750 Total $ 2,013,262 1,650,035 1,646,724 1,655,850 1,647,224 7,613,563 6,604,499 3,616,964 $ 26,448,121 Total $ 1,572,213 1,573,722 1,573,890 1,372,068 1,361,470 5,252,372 1,798,092 338,750 $ 1,767,237 $ 14,842,577 Water and sewer revenue bonds authorized and unissued as of September 30, 2007, 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 bonds and drainage utility 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 and the net revenues of the City's drainage utility system, respectively. 44 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 4. LONG-TERM DEBT — CONTINUED Annual Requirements to Retire Debt Obligations — Continued 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. 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, 2007. The amounts reserved are reported as restricted assets of the enterprise funds. 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). 45 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 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 and sewage 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 requirement on bonds issued by TRA. Payments under this contract approximated $6,500,000 and are included as operating expenses of the water and sewer 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 sewer enterprise fund historically bears the major portion of the operating costs of the City's service center, which provides services to all City departments. NOTE 7. INTERFUND TRANSFERS All interfund transfers between operations of those funds. Due to/from other funds Receivable Fund Water and sewer fund Car rental fund Softball complex fund the various funds are approved supplements to the Payable Fund Amount Golf course fund $ 232,565 Golf course fund 1,656,475 Athletic complex fund 236,000 $ 2,125,040 Due to/from accounts that are primarily used as interfund loans for the following: • Golf course fund to water and sewer fund for capital improvements. • Golf course fund to car rental fund for capital improvements and equipment purchases. • Athletic complex fund to softball complex fund for reimbursement of bond payments. 46 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 7. INTERFUND TRANSFERS — CONTINUED Due to/from other funds — Continued The balances at September 30, 2007 will be paid during the next fiscal year end. Interfund transfers Transfers In General fund General fund General fund Debt service fund Car rental tax fund Police department grant funds Half -penny sales tax CIP Fund Car rental CIP fund Golf course fund Golf course fund Softball complex fund Water and sewer fund Equipment replacement fund Risk management fund Risk management fund Transfers Out Car rental tax fund Water and sewer fund Drainage utility fund Car rental tax fund Golf course fund General fund Half -penny sales tax fund Car rental tax fund General fund Hotel/motel tax fund Athletic complex fund Golf course fund Car rental tax fund General fund Water and sewer fund Transfers are primarily used to move funds from: Amount $ 730,020 718,070 34,752 195,237 74,542 38,800 460,000 459,000 14,956 173,275 7,844 10,465 290,000 225,000 225,000 $ 3,656,961 • The car rental fund, the water and sewer fund, and drainage utility fund to the general fund for general and administrative charges. • The car rental fund to the debt service fund for principal and interest on 2001 bonds. • The half -penny sales tax fund and the golf course fund to the car rental fund for interest on interfund loans. • The general fund to the police department grant funds for matching grant funds. • The half —penny sales tax fund to the half -penny sales tax CIP fund for incentive programs and capital improvement projects. • The car rental tax fund to the car rental CIP fund for funding of capital improvement projects. • The general fund to the golf course fund for rebate of sales tax contributions. 47 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 7. INTERFUND TRANSFERS — CONTINUED Interfund transfers — Continued • The hotel/motel fund to the golf course fund for debt on the conference centre and subsidizing monthly expenses at the conference centre. • The athletic complex fund to the softball complex fund for interest on interfund loan. • The golf course fund to the water and sewer fund for interest on interfund loan. • The car rental tax fund to the equipment replacement fund for large equipment purchases. • The general fund and the water and sewer fund to the risk management fund for property and liability insurance. • The water and sewer fund and the car rental fund to the health insurance fund to fund additional city contributions. 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. 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 $4,210,435. During fiscal 2007, the City and the City's employees contributed approximately $3,138,533 and $954,407 respectively, for medical coverage. The City's contributions are accounted for as interfund services 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 Internal Service Insurance Fund. In addition, during fiscal 2006, the City contracted with the Texas Municipal League Intergovernmental Risk Pool to provide worker's 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. An excess coverage insurance policy covered individual claims in excess of $300,000. 48 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 8. RISK MANAGEMENT — CONTINUED Changes in the balances of health and dental claims liabilities are as follows: 2007 Unpaid claims, beginning of year $ 241,829 Incurred claims 2,956,704 Paid claims (2,953,060) Unpaid claims, end of year $24b,47 Settlement amounts have not exceeded insurance coverage for the September 30, 2007 or any of the three preceding years ended September 30. NOTE 9. EMPLOYEE RETIREMENT SYSTEM Plan Description 2006 $ 213,282 3,239,293 (3.210.7461 $ 241.829 year ended The City provides pension benefits for all of its full-time employees through a nontraditional, joint contributory, hybrid defined benefit plan in the state-wide Texas Municipal Retirement System "TMRS", one of 811 administered by TMRS, an agent multiple -employer public employee retirement system. Each of the 811 Municipalities have an annual, individual actuarial valuation performed. All assumptions for the December 31, 2006 valuations are contained in the 2006 TMRS Comprehensive Annual Financial Report, a copy of which may be obtained by writing to P. O. Box 149153, Austin, Texas 78714-9153. Benefits Benefits depend upon the sum of the employee's contributions to the plan, with interest, and City -financed monetary credits, with interest. At the date the plan began, the City granted monetary credits for service rendered before the plan began of a theoretical amount at least equal to two times what would have been contributed by the employee with interest, prior to establishment of the plan. Monetary credits for service since the plan began are a percent (100%, 150%, or 200%) of the employee's accumulated contributions. In addition, the City can grant, as often as annually, another type of monetary credit referred to as an updated service credit which is a theoretical amount which, when added to the employee's accumulated contributions and the monetary credits for service since the plan began, would be the total monetary credits and employee contributions accumulated, with interest, if the current employee contribution rate and the City matching percent had always been in existence and if the employee's salary had always been the average of his/her salary in the last three years that are one year before the effective date. At retirement, the benefit is calculated as if the sum of the employee's accumulated contributions, with interest, and the employer -financed monetary credits, with interest, were used to purchase an annuity. 49 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 9. EMPLOYEE RETIREMENT SYSTEM — CONTINUED Benefits — continued The plan provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS. Plan provisions for the City were as follows: Deposit Rate: Matching Ratio (City to Employee): A member is vested after 7% 2-1 5 yrs Members can retire at certain ages, based on the years of service with the City. The service retirement eligibilities for the city are: 5 yrs/age 60, 20 yrs/any age. Contributions Under the state law governing TMRS, the actuary annually determines the City contribution rate. This rate consists of the normal cost contribution rate and the prior service contribution rate, both of which are calculated to be a level percent of payroll from year to year. The normal cost contribution rate finances the currently accruing monetary credits due to the City matching percent, which are the obligation of the City as of an employee's retirement date, not at the time the employee's contributions are made. The normal cost contribution rate is the actuarially determined percent of payroll necessary to satisfy the obligation of the City to each employee at the time his/her retirement becomes effective. The prior service contribution rate amortizes the unfunded (overfunded) actuarial liability (asset) over the remainder of the plan's 25-year amortization period. The unit credit actuarial cost method is used for determining the City contribution 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 is the basis for the rate and the calendar year when the rate goes into effect (i.e. December 31, 2005 valuation is effective for rates beginning January 2007). Schedule of Actuarial Liabilities and Funding Progress Actuarial Valuation Date 12/31/2006 Actuarial Value of Assets $61,871,370 Actuarial Accrued Liability $76,751,170 Percentage Funded 80.61% Unfunded Actuarial Accrued Liability "UAAL" $14,879,800 Annual Covered Payroll $19,224,466 UAAL as a Percentage of Covered Payroll 77.40% Net Pension Obligation "NPO" at the Beginning of Period $ 50 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 9. EMPLOYEE RETIREMENT SYSTEM — CONTINUED Schedule of Actuarial Liabilities and Funding Progress — Continued Annual Pension Cost: Annual Required Contribution "ARC" Interest on NPO Adjustment to the ARC $ 2,627,343 Total annual pension cost 2,627,343 Contributions made (2,627,343) Increase in NPO - NPO at the end of the period $ Trend information for the past three years for TMRS is as follows: Year Annual Percentage Pension Cost of APC Net Pension "APC" Contributed Obligation 2004 $ 2,521,328 100 2005 2,457,021 100 2006 2,627, 343 100 The following actuarial assumptions were used: Actuarial Cost Method Unit Credit Amortization Method Level Percent of Payroll Remaining Amortization 25 years — Open Period Asset Valuation Method Amortized Cost Investment Rate of Return 7% Projected Salary Increases None Includes Inflation at 3.5% Cost of Living Adjustments None NOTE 10. EXCESS OF EXPENDITURES OVER APPROPRIATIONS As of September 30, 2007, the following individual funds had an excess of expenditures over appropriations: Police drug enforcement fund Public safety grant funds $ (18,181) (5,960) 51 REQUIRED SUPPLEMENTARY INFORMATION CITY OF EULESS, TEXAS REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF FUNDING PROGRESS FOR PARTICIPATION IN TEXAS MUNICIPAL RETIREMENT SYSTEM SEPTEMBER 30, 2007 Unfunded Unfunded Actuarial Actuarial Actuarial Actuarial Actuarial Annual Accrued Liability Valuation Value of Accrued Percentage Accrued Covered as a Percentage Date Assets Liability Funded Liability Payroll of Covered Payroll 12/31/04 $ 54,239,808 $ 67,007,298 80.95% $ 12,767,490 $ 17,435,628 73.23% 12/31/05 57,323,394 70,878,494 80.88% 13,555,100 18,324,792 73.97% 12/31/06 61,871,370 76,751,170 80.61% 14,879,800 19,224,466 77.40% 52 CITY OF EULESS, TEXAS GENERAL FUND BUDGETARY COMPARISON SCHEDULE YEAR ENDED SEPTEMBER 30, 2007 Revenues: General property tax: Current and delinquent taxes Penalty and interest Total property tax Gross receipts tax: Telephone line access fee Electric company Gas company Cable TV City garbage service Water and sewer system Others Total gross receipts tax General sales tax Fines and fees: Municipal court fines Jail income Dog licenses and pound fees Ambulance fees Library fees Zoning fees Deferred adjudication fee Total fines and fees Licenses and permits: Building permits Miscellaneous permits Minimum housing Total licenses and permits Investment income Intergovernmental Other revenues: Rental income Swimming pools Miscellaneous income Total other revenues Total revenues Budgeted Amounts Original Final $ 8,247,122 70,000 8,317,122 425,000 1,500,000 275,000 245,000 130,000 769,391 92,700 3,437,091 7,595,531 2,740,980 140,000 13,000 780,000 38,000 12,000 190,000 3,913,980 $ 8,247,122 70,000 8,317,122 425,000 1,500,000 275,000 245,000 130,000 769,391 92,700 3,437,091 7,595,531 2,740,980 140,000 13,000 780,000 38,000 12,000 190,000 3,913,980 400,000 400,000 187,500 187,500 91,000 91,000 678,500 678,500 405,000 405,000 315,868 315,868 205,209 15,000 106,000 326,209 326,209 24,989,301 24,989,301 53 205,209 15,000 106,000 Actual GAAP Basis 8,554,546 176,290 8,730,836 407,428 1,687,809 338,087 313,754 143,526 718,070 98,681 3,707,355 8,818,970 3,145,699 247,715 14,597 744,002 33,200 (8,955) 172,581 4,348,839 479,029 236,949 88,426 804,404 628,960 334,979 218,166 14,621 181,860 414,647 27,788,990 Variance with Final Budget Positive (Negative) $ 307,424 106,290 413,714 (17,572) 187,809 63,087 68,754 13,526 (51,321) 5,981 270,264 1,223,439 404,719 107,715 1,597 (35,998) (4,800) (20,955) (17,419) 434,859 79,029 49,449 (2,574) 125,904 223,960 19,111 12,957 (379) 75,860 88,438 2,799,689 CITY OF EULESS, TEXAS GENERAL FUND BUDGETARY COMPARISON SCHEDULE YEAR ENDED SEPTEMBER 30, 2007 (CONTINUED) Expenditures Current: Culture and recreation Development services General and administrative Highways and streets Public safety Total expenditures Excess (deficiency) of revenues over expenditures Variance with Actual Final Budget Budgeted Amounts GAAP Positive Original Final Basis (Negative) 2,921,928 2,921,928 1,136,660 1,136,660 7,786,222 7,961,222 738,198 738,198 15, 595, 086 15, 595, 086 28,178,094 28,353,094 (3,188,793) (3,363,793) 2,872,862 1,048,220 7,351,045 693,711 15,133,250 27,099,088 49,066 88,440 610,177 44,487 461,836 1,254,006 689,902 4,053,695 Other financing sources (uses): Transfers in 1,530,411 1,530,411 1,482,842 (47,569) • Transfers out (462,485) (462,485) (486,063) (23,578) Total other financing sources (uses), net 1,067,926 1,067,926 996,779 (71,147) Net change in fund balance (2,120,867) (2,295,867) 1,686,681 3,982,548 Fund balance, beginning of year 9,300,761 9,300,761 9,300,761 Fund balance, end of year $ 7,179,894 $ 7,004,894 $ 10,987,442 $ 3,982,548 54 CITY OF EULESS, TEXAS BUDGETARY COMPARISON SCHEDULE CAR RENTAL TAX SPECIAL REVENUE FUND YEAR ENDED SEPTEMBER 30, 2007 Revenues: Car rental tax Investment income Total revenues Expenditures: General and administrative Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfers in Transfers out Variance with Actual Final Budget Budgeted Amounts GAAP Positive Original Final Basis (Negative) $ 11,000,000 $ 11,000,000 $ 12,955,882 $ 1,955,882 202,500 202,500 503,415 300,915 11,202,500 11,202,500 7,338,333 7,338,333 7,338,333 7,338,333 3,864,167 3,864,167 82,186 (1,674,257) 82,186 (1,674,257) 13,459,297 2,256,797 8,608,010 (1,269,677) 8,608,010 (1,269,677) 4,851,287 3,526,474 74,542 (7,644) (1,674,257) Total other financing sources (uses), net (1,592,071) (1,592,071) (1,599,715) (7,644) Net change in fund balance 2,272,096 2,272,096 3,251,572 3,518,830 Fund balance, beginning of year 4,299,576 4,299,576 4,299,576 - Fund balance, end of year $ 6,571,672 $ 6,571,672 $ 7,551,148 $ 3,518,830 55 CITY OF EULESS, TEXAS NOTES TO REQUIRED SUPPLEMENTARY INFORMATION FOR THE YEAR ENDED SEPTEMBER 30, 2007 NOTE 1. BUDGET BASIS OF ACCOUNTING The City Councils 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. 56 INDIVIDUAL FUND STATEMENTS AND SCHEDULES 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 Funds — to account for grant revenues received by the police and fire departments 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. 57 NON -MAJOR GOVERNMENTAL FUNDS — continued CAPITAL PROJECT FUNDS Capital project funds are used to account for the acquisition and construction of major capital facilities other than those financed by proprietary funds and trust funds. 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 construction projects within the City. 58 CITY OF EULESS, TEXAS COMBINING BALANCE SHEET NON -MAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2007 Special Revenue Funds Police Crime Drug Half Control and Public Hotel/ Enforce- Penny Prevention Safety Juvenile Special Motel ment Sales Tax District Grants Case Revenue Fund Fund Fund Fund Fund Fund Total ASSETS Deposits and investments $ 168,549 $ 313,079 $ 3,010,279 $ 594,225 $ 65,507 $ $ 4,151,639 Accounts receivable 60,943 - - - 10,929 1,210 73,082 Accrued interest receivable - 22,815 6,200 29,015 Prepaids 440 - 17,155 2,130 19,725 Due from other governments 646,506 297,575 - 944,081 Total assets $ 229,932 $ 313,079 $ 3,696,755 $ 900,130 $ 76,436 $ 1,210 $ 5,217,542 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 5 $ 1,020 $ 300,940 $ 71,651 $ - $ Accrued salaries and wages 42,142 65,001 2,168 Due to other funds - - Total liabilities 2,370 12,433 $ 373,616 111,681 12,433 5 1,020 343,082 136,652 2,168 14,803 497,730 Fund Balances: Reserved for: Debt service 938,998 - 938,998 Historical preservation 1,245 1,245 Development agreements - - Unreserved, undesignated 228,682 312,059 2,414,675 763,478 74,268 (13,593) 3,779,569 Total fund balances 229,927 312,059 3,353,673 763,478 74,268 (13,593) 4,719,812 Total liabilities and fund balances $ 229,932 $ 313,079 $ 3,696,755 $ 900,130 $ 76,436 $ 1,210 $ 5,217,542 59 Capital Projects Funds Park Improvements Half -Penny Police G.O. Certificates of Street Sales Tax Developers' Car Rental Facility Capital Capital Total Non -major Obligation Assessments Capital Contribution Capital Projects Construction Projects Projects Governmental Fund (1990) Fund Projects Fund Fund Fund Fund Totals Funds $ 125 $ 44,970 $ 436,891 $ 1,591,233 $ 928,698 $ 120,592 $ 252,910 $ 3,375,419 $ 7,527,058 - - - 73,082 5,130 7,425 7,719 20,274 49,289 31,683 31,683 51,408 - - 944,081 $ 125 $ 44,970 $ 442,021 $ 1,598,658 $ 968,100 $ 120,592 $ 252,910 $ 3,427,376 $ 8,644,918 $ $ $ 93,235 $ - $ 1,069 $ $ $ 94,304 $ 467,920 - 111,681 12,433 93,235 - 1,069 94,304 592,034 - - 938,998 1,245 - - 1,598,658 - 1,598,658 1,598,658 125 44,970 348,786 - 967,031 120,592 252,910 1,734,414 5,513,983 125 44,970 348,786 1,598,658 967,031 120,592 252,910 3,333,072 8,052,884 $ 125 $ 44,970 $ 442,021 $ 1,598,658 $ 968,100 $ 120,592 $ 252,910 $ 3,427,376 $ 8,644,918 60 CITY OF EULESS, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON -MAJOR GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2007 Special Revenue Funds Police Crime Drug Half Control and Public Hotel! Enforce- Penny Prevention Safety Juvenile Special Motel ment Sales Tax District Grant Case Revenue Fund Fund Fund Fund Funds Fund Totals Revenues: Gross receipts tax $ 240,457 $ $ - $ - $ $ $ 240,457 General sales tax - 3,527,588 1,644,094 5,171,682 Investment income 6,983 17,042 125,803 27,996 177,824 DEA revenues - 5,360 - - - 5,360 Other revenues 851 80,328 39,165 120,344 Total revenues 248,291 22,402 3,653,391 1,672,090 80,328 39,165 5,715,667 Expenditures: Culture and recreation 1,407,687 1,407,687 Development services 113,002 - 113,002 General and administrative 40,668 325,230 - - 52,758 418,656 Public safety 24,931 - 1,673,358 111,960 - 1,810,249 Debt service Principal 635,000 - 635,000 Interest and fiscal charges - 290,589 290,589 Capital outlay - and maintenance Total expenditures 40,668 24,931 2,771,508 1,673,358 111,960 52,758 4,675,183 Excess (deficiency) of revenues over expenditures 207,623 (2,529) 881,883 (1,268) (31,632) (13,593) 1,040,484 Other financing sources (uses): Transfers in - 38,800 38,800 Transfers out (173,275) (481,716) - - (654,991) Total other financing sources (uses) (173,275) (481,716) 38,800 (616,191) Net change in fund balances 34,348 (2,529) 400,167 (1,268) 7,168 (13,593) 424,293 Fund balance, beginning of year 195,579 314,588 2,953,506 764,746 67,100 4,295,519 Fund balance, end of year $ 229,927 $ 312,059 $ 3,353,673 $ 763,478 $ 74,268 ($ 13,593) $ 4,719,812 61 Capital Projects Funds Park Improvements Half -Penny Police G.O. Certificates of Street Sales Tax Developers' Car Rental Facility Capital Capital Total Non -major Obligation Assessments Capital Contribution Capital Projects Construction Projects Project Governmental Fund (1990) Fund Projects Fund Fund Fund Fund Totals Funds $ $ $ $ $ $ $ $ $ 240,457 - - - - - 5,171,682 27,106 65,882 80,853 1,534 1,659 177,034 354,858 - - - - - 5,360 120,344 27,106 65,882 80,853 1,534 1,659 177,034 5,892,701 219,653 219,653 1,627,340 300,000 - 300,000 413,002 - 418,656 15,489 15,489 1,825,738 635,000 290,589 19,988 1,870,241 1,890,229 1,890,229 539,641 1,870,241 15,489 2,425, 371 7,100, 554 (512,535) 65,882 (1,789,388) (13,955) 1,659 (2,248,337) (1,207,853) 460,000 459,000 - 207,307 1,126,307 1,165,107 (2,870) (2,870) (657,861) 460,000 (2,870) 459,000 207,307 1,123,437 507,246 (52,535) 63,012 (1,330,388) (13,955) 208,966 (1,124,900) (700,607) 125 44,970 401,321 1,535,646 2,297,419 134,547 43,944 4,457,972 8,753,491 125 $ 44,970 $ 348,786 $ 1,598,658 $ 967,031 $ 120,592 $ 252,910 $ 3,333,072 $ 8,052,884 62 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, 2007 Variance with Actual Final Budget Budgeted Amounts GAAP Positive Original Final Basis (Negative) Revenues: Gross receipts tax $ 200,000 $ 200,000 $ 240,457 $ 40,457 Other revenues - - 851 851 Investment income 4,500 4,500 6,983 2,483 Total revenues 204,500 204,500 248,291 43,791 Expenditures: General and administrative 44,500 44,500 40,668 3,832 Total expenditures 44,500 44,500 40,668 3,832 Other financing uses: Transfers out (173,275) (173,275) (173,275) Total other financing uses (173,275) (173,275) (173,275) Net change in fund balance (13,275) (13,275) 34,348 47,623 Fund balance, beginning of year 195,579 195,579 195,579 - Fund balance, end of year $ 182,304 $ 182,304 $ 229,927 $ 47,623 63 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, 2007 Variance with Actual Final Budget Budgeted Amounts GAAP Positive Original Final Basis (Negative) Revenues: DEA revenues $ - $ - $ 5,360 $ 5,360 Investment income 6,750 6,750 17,042 10,292 Total revenues 6,750 6,750 22,402 15,652 Expenditures: Public safety 6,750 6,750 24,931 (18,181) Total expenditures 6,750 6,750 24,931 (18,181) Other financing sources (uses): Transfers out Total other financing sources (uses) - - Net change in fund balance (2,529) (2,529) Fund balance, beginning of year 314,588 314,588 314,588 - Fund balance, end of year $ 314,588 $ 314,588 $ 312,059 $ (2,529) 64 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, 2007 Revenues: General sales tax Investment income Total revenues Expenditures: General and administrative Culture and recreation Development services Debt service: Principal Issuance cost Interest and fiscal charges Total expenditures Other financing sources (uses): Issuance of debt Payments to refunding agent Transfers out Total other financing sources (uses) Net change in fund balance Fund balance, beginning of year Fund balance, end of year Budgeted Amounts Original Final $ 3,038,213 80,000 3,118,213 510,110 1,500,774 275,840 635,000 292,164 3,213,888 (467,644) (467,644) (563,319) 2,953,506 $ 2,390,187 Actual GAAP Basis Variance with Final Budget Positive (Negative) $ 3,038,213 $ 3,527,588 $ 489,375 80,000 125,803 45,803 3,118,213 3,653,391 510,110 1,500,774 275,840 325,230 1,407,687 113,002 635,000 635,000 292,164 290,589 3,213,888 2,771,508 (467,644) (481,716) (467,644) (563,319) 2,953,506 $ 2,390,187 (481,716) 400,167 2,953,506 $ 3,353,673 $ 963,486 535,178 184,880 93,087 162,838 1,575 442,380 (14,072) (14,072) 963,486 65 CITY OF EULESS, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL CRIME CONTROL AND PREVENTION DISTRICT SPECIAL REVENUE FUND YEAR ENDED SEPTEMBER 30, 2007 Variance with Actual Final Budget Budgeted Amounts GAAP Positive Original Final Basis (Negative) Revenues: General sales tax $ 1,432,743 $ 1,432,743 $ 1,644,094 $ 211,351 Other revenue - Investment income 13,500 13,500 27,996 14,496 Total revenues 1,446,243 1,446,243 1,672,090 225,847 Expenditures: Public safety 1,703,524 1,703,524 1,673,358 30,166 Total expenditures 1,703,524 1,703,524 1,673,358 30,166 Net change in fund balance (257,281) (257,281) (1,268) 256,013 Fund balance, beginning of year 764,746 764,746 764,746 Fund balance, end of year $ 507,465 $ 507,465 $ 763,478 $ 256;013 66 CITY OF EULESS, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL PUBLIC SAFETY GRANT FUNDS SPECIAL REVENUE FUND YEAR ENDED SEPTEMBER 30, 2007 Variance with Actual Final Budget Budgeted Amounts GAAP Positive Original Final Basis (Negative) Revenues: Other revenues $ 88,822 $ 88,822 $ 80,328 $ (8,494) Investment income - Total revenues 88,822 88,822 80,328 (8,494) Expenditures: Public safety 106,000 106,000 111,960 (5,960) Total expenditures 106,000 106,000 111,960 (5,960) Other financing sources: Transfers in 17,178 17,178 38,800 21,622 Total other financing sources (uses) 17,178 17,178 38,800 21,622 Net change in fund balance 7,168 7,168 Fund balance, beginning of year 67,100 67,100 67,100 Fund balance, end of year $ 67,100 $ 67,100 $ 74,268 $ 7,168 67 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. Softball Complex Fund - to account for the operation and maintenance of the softball complex, supported primarily by user charges. Athletic Complex Fund - to account for the operation and maintenance of the Parks at Texas Star athletic complex, 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. 68 CITY OF EULESS, TEXAS COMBINING STATEMENT OF NET ASSETS NON -MAJOR PROPRIETARY FUNDS SEPTEMBER 30, 2007 (1 of 2) Recreation Softball Athletic Arbor Classes Complex Complex Daze Totals ASSETS Current assets: Deposits and investments $ 292,972 $ 216,333 979,746 $ 82,812 $ 1,571,863 Accounts receivable and unbilled revenue 2,162 8,256 1,550 11,968 Accrued interest receivable 6,569 - 6,569 Prepaids and deposits 229 13,390 40 13,659 Inventory 73,522 73,522 Due from other funds 236,000 - 236,000 Total current assets 295,363 547,501 987,905 82,812 1,913,581 Non -current assets: Bond issuance cost 33,399 14,259 47,658 Less accumulated amortization 7,128 7,384 14,512 Net bond issuance cost 26,271 6,875 - 33,146 Property, plant and equipment, at cost: Land 584,532 - 584,532 Building 328,180 160,095 488,275 Equipment 89,658 102,312 51,884 243,854 Improvements 608,896 6,996,308 7,605,204 Total property plant and equipment 89,658 1,623,920 7,208,287 8,921,865 Less accumulated depreciation 39,734 547,848 1,734,175 - 2,321,757 Net property plant, and equipment 49,924 1,076,072 5,474,112 6,600,108 Total non -current assets 49,924 1,102,343 5,480,987 6,633,254 TOTAL ASSETS 345,287 1,649,844 6,468,892 82,812 8,546,835 69 CITY OF EULESS, TEXAS COMBINING STATEMENT OF NET ASSETS NON -MAJOR PROPRIETARY FUNDS SEPTEMBER 30, 2007 Recreation Softball Athletic Arbor Classes Complex Complex Daze (2 of 2) Totals Current liabilities: Payable from current assets: Accounts payable $ 6,565 46,994 $ 8,073 $ - $ 61,632 Accrued salaries and wages 778 29,458 3,324 33,560 Current portion of bonds payable 125,000 - 125,000 Deferred revenue 560 560 Accrued interest 4,752 4,752 Total current liabilities 7,343 206,764 11,397 - 225,504 Non -current liabilities: Bonds payable 1,092,909 1,092,909 Due to other funds - 236,000 236,000 Total non -current liabilities 1,092,909 236,000 - 1,328,909 Total liabilities 7,343 1,299,673 247,397 1,554,413 NET ASSETS Invested in capital assets, net of debt 49,924 (141,837) 5,474,112 5,382,199 Unrestricted 288,020 492,008 747,383 82,812 1,610,223 Total net assets $ 337,944 $ 350,171 $ 6,221,495 $ 82,812 $ 6,992,422 70 CITY OF EULESS, TEXAS COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS NON -MAJOR PROPRIETARY FUNDS YEAR ENDED SEPTEMBER 30, 2007 Recreation Softball Athletic Arbor Classes Complex Complex Daze Totals Operating revenues: Recreation fees $ 407,551 $ - $ - $ - $ 407,551 Service fees and miscellaneous 905,632 304,293 19,407 1,229,332 Total operating revenues 407,551 905,632 304,293 19,407 1,636,883 Operating expenses: Recreation classes 415,617 - 415,617 Athletic complex - 263,877 263,877 Softball complex 972,543 - 972,543 Arbor Daze - 58,993 58,993 Depreciation 13,152 72,267 240,118 325,537 Amortization 17,337 - 17,337 Total operating expenses 428,769 1,062,147 503,995 58,993 2,053,904 Operating (loss) (21,218) (156,515) (199,702) (39,586) (417,021) Nonoperating revenues (expenses) Investment income 14,351 13,349 56,133 5,251 89,084 Other Revenue Interest on bonds (43,971) (43,971) Total nonoperating revenues (expenses), net 14,351 (30,622) 56,133 5,251 45,113 Loss before transfers (6,867) (187,137) (143,569) (34,335) (371,908) Transfers in - 7,844 - 7,844 Transfers out - (7,844) - (7,844) Change in net assets (6,867) (179,293) (151,413) (34,335) (371,908) Net assets, beginning of year 344,811 529,464 6,372,908 117,148 7,364,331 Net assets, end of year $ 337,944 $ 350,171 $ 6,221,495 $ 82,813 $ 6,992,423 71 CITY OF EULESS, TEXAS COMBINING STATEMENT OF CASH FLOWS NON -MAJOR PROPRIETARY FUNDS YEAR ENDED SEPTEMBER 30, 2007 OPERATING ACTIVITIES Cash received from customers Cash payments to suppliers for goods and services Cash payments to employees for services Net cash provided by (used in ) operating activities NONCAPITAL FINANCING ACTIVITIES Transfer in Transfer out Net cash provided by (used in) noncapital financing activities Recreation Softball Athletic Arbor Classes Complex Complex Daze Totals $ 407,431 $ 898,824 $ 296,174 $ 19,407 $ 1,621,836 (337,158) (675,942) (217,947) (58,993) (1,290,040) (73,600) (328,045) (70,681) (472,326) (3,327) (105,163) 7,546 (39,586) (140,530) 31,844 31,844 (31,844) (31,844) 31,844 (31,844) CAPITAL AND RELATED FINANCING ACTIVITIES Interest paid on bonds (43,971) - - (43,971) Reduction in bonds payable (120,000) (120,000) Net proceeds from refunding bond issuance - - Proceeds from gas lease - Loss on refunding bond issuance Bond issuance costs Purchase of utility plant and equipment in service (18,750) (4,391) (23,141) Net cash used in capital and related financing activities (18,750) (163,971) (4,391) (187,112) INVESTING ACTIVITIES Proceeds from other revenues - - - Interest received on investments 14,351 13,349 56,133 5,251 89,084 Net cash provided by investing activities 14,351 13,349 56,133 5,251 89,084 Net increase (decrease) in cash and cash equivalents (7,726) (223,941) 27,444 (34,335) (238,558) Cash and cash equivalents, beginning of year 300,698 440,274 952,302 117,147 1,810,421 Cash and cash equivalents, end of year $ 292,972 $ 216,333 $ 979,746 $ 82,812 $ 1,571,863 Reconciliation of operating income (loss) to net cash provided by (used in) operating activities Operating income (loss) $ (21,218) $ (156,515) $ (199,702) $ (39,586) $ (417,021) Adjustments to reconcile operating income (loss) to net cash provided by operating activities Depreciation and amortization 13,152 89,604 240,118 342,874 Loss on disposal of equipment - - Changes in assets and liabilities: Accounts receivable and unbilled revenue (120) (6,808) (8,119) (15,047) Prepaids and deposits 6,001 (386) (40) 5,575 Inventory - (29,796) 3,112 (26,684) Accounts payable (1,059) (2,694) (29,824) (33,577) Accrued salaries and wages (83) 1,432 2,001 - 3,350 Deferred revenue - Net cash provided by (used in) operating activities $ (3,327) $ (105,163) $ 7,546 $ (39,586) $ (140,530) 72 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 government 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 worker's compensation coverage for all city employees, as well as, general liability and property coverage. 73 CITY OF EULESS, TEXAS COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS SEPTEMBER 30, 2007 ASSETS Deposits and investments Accounts receivable Prepaid expenses Accrued interest receivable Total current assets Property, plant and equipment, at cost: Equipment Less accumulated depreciation Net property, plant and equipment TOTAL ASSETS LIABILITIES Accounts payable Accrued salary and wages Accrued insurance claims Risk Equipment Manage - Replacement Insurance ment Fund Fund Fund Total $ 1,317,290 $ 2,970,177 $ 1,178,833 $ 5,466,300 69,083 180 69,263 468,645 468,645 20,077 29,418 2,970 52,465 1,806,012 3,068,678 1,181,983 6,056,673 6,360,475 54,956 11,024 6,426,455 3,898,387 54,956 11,024 3,964,367 2,462,088 - 2,462,088 4,268,100 3,068,678 1,181,983 8,518,761 81,138 Total current liabilities 81,138 7 17,100 98,245 8,785 3,186 11,971 245,473 133,661 379,134 254,265 153,947 489,350 NET ASSETS Invested in capital assets, net of related debt 2,462,088 2,462,088 Unrestricted 1,724,874 2,814,413 1,028,036 5,567,323 Total net assets $ 4,186,962 $ 2,814,413 $ 1,028,036 $ 8,029,411 74 CITY OF EULESS, TEXAS COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS INTERNAL SERVICE FUNDS YEAR ENDED SEPTEMBER 30, 2007 Risk Equipment Manage - Replacement Insurance ment Fund Fund Fund Total Operating revenues: Insurance premiums $ $ 4,092,940 $ 265,783 $ 4,358,723 Service fees and miscellaneous 570,238 21,104 591,342 Total operating revenues 570,238 4,114,044 265,783 4,950,065 Operating expenses: General and administrative 103,848 84,671 58,382 246,901 Insurance costs - 3,216,587 599,109 3,815,696 Depreciation 524,792 524,792 Total operating expenses 628,640 3,301,258 657,491 4,587,389 Operating income (loss) (58,402) 812,786 (391,708) 362,676 Non -operating revenues: Investment income 71,703 129,071 46,314 247,088 Gain on sale of capital assets 74,163 - 74,163 Total nonoperating revenues 145,866 129,071 46,314 321,251 Income (loss) before transfers 87,464 941,857 (345,394) 683,927 Transfers in 290,000 - 450,000 740,000 Change in net assets 377,464 941,857 104,606 1,423,927 Net assets, beginning of year 3,809,498 1,872,556 923,430 6,605,484 Net assets, end of year $ 4,186,962 $ 2,814,413 $ 1,028,036 $ 8,029,411 75 CITY OF EULESS, TEXAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS YEAR ENDED SEPTEMBER 30, 2007 OPERATING ACTIVITIES Cash received from customers Cash payments to suppliers for goods and services Cash payments to employees for services Net cash provided by (used in) operating activities NONCAPITAL FINANCING ACTIVITIES Transfers in Net cash provided by noncapital financing activities CAPITAL AND RELATED FINANCING ACTIVITIES Purchase of equipment Sale of equipment Net cash used in capital and related financing activities Risk Equipment Manage - Replacement Insurance ment Fund Fund Fund Total $ 639,542 $ 4,164,776 $ 265,603 $ 5,069,921 (491,387) (3,252,727) (568,477) (4,312,591) - (52,818) (43,104) (95,922) 148,155 859,231 (345,978) 661,408 290,000 - 450,000 740,000 290,000 450,000 740,000 (846,658) (846,658) 74,164 - 74,164 (772,494) (772,494) INVESTING ACTIVITIES Interest received on investments 58,533 112,812 43,808 215,153 Net cash provided by investing activities 58,533 112,812 43,808 215,153 Net increase in cash and cash equivalents (275,806) 972,043 147,830 844,067 Cash and cash equivalents, beginning of year 1,593,096 1,998,134 1,031,003 4,622,233 Cash and cash equivalents, end of year $ 1,317,290 $ 2,970,177 $ 1,178,833 $ 5,466,300 Reconciliation of operating loss to net cash provided by (used in) operating activities Operating loss $ (58,402) $ 812,786 $ (391,708) $ 362,676 Adjustments to reconcile operating loss to net cash provided by (used in) operating activities: Depreciation expense 524,792 524,792 Loss on disposal of equipment 21,390 - 21,390 Change in assets and liabilities: Receivables 47,914 50,732 (180) 98,466 Prepaids (468,645) (798) (469,443) Accounts payable 81,106 (604) 47,041 127,543 Accrued salaries and wages (734) (1,131) (1,865) Accrued insurance claims (2,151) (2,151) Net cash provided by (used in) operating activities $ 148,155 $ 859,231 $ (345,978) $ 661,408 76 AGENCY FUNDS Agency funds are used to account for assets held by the government as an agent for individuals, private organizations, other governments, and/or other funds. Stars Center Escrow — to account for investments held on -behalf of the Dallas Stars until the bond issuance is retired. 77 CITY OF EULESS, TEXAS AGENCY FUNDS STATEMENTS OF CHANGES IN ASSETS AND LIABILITIES YEAR ENDED SEPTEMBER 30, 2007 Balance Balance September 30, September 30, 2006 Additions Deletions 2007 Assets: Deposits and investments $ 2,313,114 $ 26,415 $ $ 2,339,529 Total assets $ 2,313,114 $ 26,415 $ $ 2,339,529 Liabilities: Due to other entities $ 2,313,114 $ 26,415 $ - $ 2,339,529 Total liabilities $ 2,313,114 $ 26,415 $ $ 2,339,529 78 STATISTICAL SECTION (Unaudited) (1) 1- CO 0 0 r N- co a) co 1 00 v 0) (f•) 0) r� (D CO 0) CO tf) O) 'V• O) CO ' O) (D N Cr) CO CO CO 1.6 if u0N Oa0 000 NO MNN tiO) OI N ti 1- O ,- Tr (D Tr ti 1.0 (D O CO 1- N- O (D (D 00 M (!) 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(`0 ym a w Z N (0 p E c c V C N N r0/) — ) D) cu (� O O. - >` (n 0) C N f0 m 0 O c i W Cn d O c NCL N N N O c a c N N C LL ?> N L p) C a 0 O,- 0) ee >, u) « 73 .0 73 .� N c O N LL m N c m a) > c-c o uNi d c w m 3 E E u) U O (DI) 2 a :° o a rn; : 8 O '� 3 Z19 7 c a>i a( rn :� rn c (a o f a E a�i a a) L a s Q C1 C a�UO(�2a v •u) m m o >I- OU o •2U OUTo _ x o o o o c o o zo Total primary government program revenues 80 T3 N j N N- 0) 0 N .7 0 CO CO CO U) co V,- CO co V V 0) (1) N C N` 0) U) (1) 0) CO (0 CO (O CO O .000O_ 0) (1') M 9 _ M V CO M (C. (0 U) '' ao 00 r O .0 "0' N V N N m c CO 0 00 M O M V N- el M M N- N- Ni N 6(0 F- p ^ a co co V 0) O M co N (0 N- N CO N (0 CO CO N. O)M MQ)O)O CO ONNN(O� Nn� U O vv� .N .M (ON (17 f� 0 0) N V d3 1 _0 CO 10 U) U) (C) 0) CO CO N . N-- 0) (0 f- COO 8(O (1) 0) (0 N (0 (D M CO C) CO (0 (0 0 (- N- U) O 0) — (A 0) CO CO . CO . O) U) 00_ N - ' V 0) O (O V 0) 'I'C N� (O O 00 (0 0 - V 0) 00 00 O) N O 00 O ° M M N 00 0 O) N CI CO N- N- 0 0 sr co O V) co 0 (0 CO ,—MO)(O N. CO N-N 0)N-N 0 NU)N- (D 0 V V �� (O� N N M (0 cOM.- E N el M ' Tr .-- O C Ea .73 C co O NCO _V Cr) CO M 00V N CO Tr(.000r- CO V O N N N (0 N N f-. 0) co V O 0) (0 (f) 'Cr O) N CO V 0_ ' (- (0 ' - ' ' N . CO V (0 N 0 U (0 co (!') R CO O 0) C0 (A N - V cci N (O 0) N (P 0) U) ,— U) (1) N. V CO N. N N O.7 0 N- 0 n M N CO %' 0I (0 '7 r- (- (O V CO N (O U) V CO CO '— h 0) (0 (0 0 (7 W O 0) V .— N- N- U) M 0) C N VI N CO M E it C ° O O) V f� 0) 0) CO N. N- CO V CO 0 0) V (1') M (O (0 M N CO N- 'Kt CO 0) O M N NYN- (M M O NN- a) O) O O) c)00 O N 0 CO N 00 1- N M ' ' CO N. O) N N- 0) 0 N 0) N0 (0 co' Q) (0 M (0 CO O M (0 00 O M (0 M co' 01 p 0 N(OO M N (0(00)M N- (0f- (000 V CO (0 CO CO p M M (0 N N (0 V N- CO N U) M l!') (D CO ,- 0) m N v v CN 0 0) � (o) M M (�) O V (h N-. V N U C ° (9 n) >, CO N (D 0) (r) 0 (0 f- N-- (0 h 0) co in N- (1) V ,-- N- co N O N. CO r-U) V (0 O 0)N co co N N V 0) 0 0 N V N- n 0 0)N N M-- 'N O N 0 " N 10 U) CO 01 CO (n V n (O 1. V O N U) U) O N U) N 0 V U) (= (0 N. U) V (0 CO V 0 M CO N N- CO N CO O) C p N� CO 01 0) M O (1') CO U) CO CO U) U) V M I- N CO N M (V N O) CO- v co CO CV ,- U) (0 CO c O EA a) N (9 } w - m 4) N (() N O (0 0 iz N (0 11 0i a a ma N (n C C m )< U) )< 0 ° 3 ..-0-U) ca c O C O ui •c_ c tu 2 w a, E a a=E (n (n `) Q W c •C a _1 o - c c WN u ,� ° a�'i CO a 0 .0 in (n a m °� N rn (n ° LU a I- Q u a) r c rn 'w d E °) < °� c E °) Q ti ::� � c ° f0 > > _> (A C0 ,> (n ` ° N Top .> ` O N (A > > (1) T (U co N �QQQ) cUQ °� (xv°coo m Q��ao T ° YQQ° Ui J 2 • • m ° a) `o F- c ° rn ° E a) c .0 in ° ° Q) U CO .0 C C T L. CD >.) C > N° 7• (n C E)E 0- a)j u) C 12 N Z «� a C' u% W d Y 0) 0) Q' �' N L E a 0 2 w N .T. E 2)°" C (D C C T• (0 U' m x Eco E m E X Q in O c (oi c° uNi .c (°i c ° E N .E 2 w° a c°° > o () (n 20 c>° °.(n (` m a t7) (u d _ ° v o o y (a O F- U C� F- �a N U C� F- �o m > .N �o :3 U U n3 2 (D m F- 0 0 1•°- m F°- F°- U (.9 co F- Z cn Comprehensive Annual Financial Reports 81 M O N U) U) O) 0) m n CO 01 0 CD N CO V)U) O V) $ 10,987,442 (0 O co (0n O 0) O 0 O M O M CO O) N M 0) n- U) ' 0) CDM CO O N N V) (0 $ 6,602,705 M M (.0 (11 CO N CO 7 M N M rn (0 a (n n CO V) 6 6 $ 6,986,956 $ 6.423,997 N U) n ODD OM) 0) 01 O N ((0 ( j O (D n CO CO U n CO CO (0 N n 'Cr. 0) CO U) CO (0 a Tr- O) V) V) (N a a cN') n CO N N 17. 0O COa co 0 (C) U) (0 a 0 I CO0(0f) a CO 00 0)) n N n N N O (O O (0v 0 O 7 7 7 0 U) 0) Nr (0 (7 N O N (0 CO CO a a C) 0- 7 7 U') $ 18.250.295 $ 22,311.246 $ 22.416,020 ( N 0 N 00 N (D (D N (D O co a ((00 0 00) M. a (? N n n n V) V) 0 N ((00 N CO a O CO Ti () — (O O a (7 (0 co N 7 7 0) O) V) $ 21.605,101 0) CO Na) U) N (0 N CI N co M M (0 N N N n O) n (O U M (D (ri a n- N CO V) MPs 01 (4) N M U0) M CO M 1. (D O ,- O 00 ID U) N U) O 7 7 a Ui na O n OM) O N 0 0 (n0 n (0 on. co O O) OI co (O (O O O (() O N co co a V N U) V) V) V) General Fund V) Reserved for other Unreserved $ 4,177.312 Total general fund All Other Governmental Funds Reserved for: N 0 M U) (0 00O ( O n a) co N V) Debt service Development Agreements 0) 0 Unreserved, reported in: Special revenue funds co N Capital funds $ 22,357.111 $ 10.475,841 Total all other governmental funds $ 12,128,230 Source: Comprehensive Annual Financial Reports sr O N N N 0) 7 N 0 O) N CV r- r- OD ' O N u7 1- 0 N 0) U) co M O O) 0 h N O N cO O U) N •D O 00 OD OD 00 V rr M m U) O N N 1- r• O) O CD CA r— 0) n N I,: O U) 00 7 V 6 4 M eo O r M(0 CD M r- CA (0 rt OD f CD00000) CD CO M (O CD (0 Ps 0 U) M 0) r 00N V 0) O) CO M OD r cor• U) M (D O) CD U) r- M r N M M N V —N Ni .--(0 (0 M N M O) N sr LO N 0 1s OD 0) O M V N N CI O ro N 6 N O 00 0) OD — 00 N N N N M U) 1' U) OD 0 CVr N alU) OD Cr 00 CD V CD M rt CD CDN ' U) 0) OD OD U) OD 1` On r M 00 Cr Cr N N. LOCO OM (O N 00 O 00 00 0) CO CD 01 CO O V 00 V .r O N c0 OD O CD r- O O 00 CV CID CO CDr CVM U) OD (D (0 eo M O O tD M r U) 66 6N O 00 O (0 r r O (0 O 0) (0 V N O (0 O OD 00 O (D r- V r T- M U) M O) O O) 0) C) 00 1A- co sr r c0 CD N CV V M U) CD 00 CD M CD e- 00 0 M r UJ 0) 0n 00 U) 0 r- M at CAIN srN 0) V .- 6 66 ('- 0) (D (0 U) M r M fA N O) 0) 0) r O CO r M N C) U) M N N OD O M O r M U) O O c0 r (O 0) rt (O OD 1s 0) N 00 O Ur at V n U) Cr OD O 00 O M N O r CO 0) 00 U)M O)OMO a OD 1�OD(D 00 OMn r- Or-O CD(O 00C)(O M,— 00 00 0) O N O 00 7 M 00 (0 O 0) CI: O 0) O 0) N 05 (17 0 (O 00 U) (0 U) O VI OD V 7 OD r 0) r- CD M CD 0) 1s 0) 1s CD CD M CVmt (O 7 CDOD CD M 0 CD N I r-0 CD0O CO c0 r M CV r- 00 O at 0 V OD 0) r- CV V M,— CO(O 0) C) U) r- 1. M 0) O M N MM N. CN N Nia NM NiCV N ) N (f) 0) 6 0) OD M 0) M 0 U) U) (D V O O CO 0 0) O O N R O' ' OD N 7 r- M U) ,— U) U) er OD (") Cr N 0) 0 M 0 1. Nr O O) (D O (O U) M (O N r 00 N O (O M N O (n O r- O O N O N O V- M r O N co - r u7 0) O N O V 00 N Ni 6 O pi 6 NiU) (0 00 O 0) V U) 0 1666 Op CD 0) r CV (D 0) V CV CD M sr OD 6c0 OD O 00 U) M 0) OD 00 00 OD 00 CD CV V N r- r- 7 s- N •.r. co co T- 0) r 00 O0 M ' r O U) 0) 0) U) OD O M 0) O M, .- M M .— M N M M O r M u7 N Nisr O r U) 01 CO 00 0) N M 00 OD N OO M M U) 00 N M 1- Ul U) ' O N N 0) M 0 r V 0 Cr 0) 0) O O 0 0 0) CO M N (O h 0 0) 0) O O 0) sr U) O M O O O 0) 'R •r U) r (0 (0 rt. N OD O M r r- ,— N N 1` Q) O MI U) M U) I- 0) (O U) 6 O O V M C) N 00 u U) U) ui N ('- M piCDU) M (O r O (D A N O N (0 M r ar 0 N 00 (O u') M M 0) W oO � CA U) sr CO 0) a0 CD O4 00 V OD CO M O U) M U) OD h r- (D 0) M 0 0) 00 0) M 00 0) M r ( M r M co M M c N U) ui M (O N sr (f) CO 00 O _ Nr- CD00OD sr O uo 00 (D t` 00 0O (D (D ' COOO I0 ' 0) M 1- r 0M 0) CO 1'- (D r CO (O 1'- (0 CO CO 0) 0) O (- V 00 Cr OD 00 N N U) ' N OD M N 00 00 0) rt sr N OD CV M U) CD NI (O(�N001-00 OOM NIO 6(-O0 o001� NiN 0)(: v n(n M,- U) CD N V OD V M000)M N0)0 r- V V U)00 OD r- sr0) sr co(O N,— 00 r 0) T- N 7. 00 r- V r M N O r r r- r- O M U) N rt M OD OD 00 M 00 O M 0) ( N N NI r N piM (0 OD y 7 Ofi op OD 00 (D 00 U) rt r- r r (O N 00 N N 0) r O OD r O ' ' 00 M U) O 0 Cr 0) O N 1- U) 00 N O r (0 n N O U) 0) O U) U) O 00 OD (O OD 00 OD 00 7 c0 •Q OD 0) (0 C) (D 00 N 00 M O CO. ,- O M OD U) pl (O N M 00 U) N C) O r (0 r 0) Ni (0 O M U) N.O O r- 0) V CDr 0) 0) r CV 'V M V 00 OD CD0) 00 00 U) K M n (O (0 OD O T- 6 0) a V 7 N O OD r r- (0 r r- M 00 M V M 0) 00 0 M 00 - M r- r- 00 M V— r— r- M � (D 00 r— M M O (fi 0- ti O OD r 00 r M 0- (0 00 OD N O N O O V r '' (00 N M O n n U) M M h N h N 0) ' O (0 OD sr 0) N N 0) N O U) O O CO O U) V ar (s. M N U) 0) U) h OD r- N U) 00 00 sr l00 U) O N O N M r 6N N 0 OD V (O V 00 V O M CDU) sr CDU) 0CDCD At Ps O0 M O0 rt (0 (D CV CD ODO0 OD (0 0) CAOO CV M V U) U) r-OD 00 V 0) 0) OD r CO11 r• M V 0CD(� el r N 0) (O M M M 00 O r• 4/0) N N N N (f) $ 13,378,350 N 0) O (N 0 r- (0 U) N 0) 1s 0) ' N co sr co OD N 00 O) N r O ON ' 07 N ' ' ' (Dc0 c0 ,.- o r- (D CO U) N 1s 0) (0 r O M 0) ((7 (0 O0 W n M M r r U) (- N O 1- O O (0 0- O (O 00 U) U) c0 M U) 0) a 0) 0) 00 U) 06 O OO U) r 1` O O V U) N U) O r U) N OD 07 Q Q) 0) CVr CV ((') M co00U) r 6(0 CD (0 (D O c0 (� Ul OD M OD 0 sr a0 coco00 OD r 'V CD CD oD N (D U) Z 6 N r C) N N V 0) s- 66 N N LL N N v I (0 J W CI00 OD ' r A- CI M CD0 NI' to(- 0 0) CD CI CD CD r 0+) O' ' U) RN O) o Z 0M ODM CV 00 r 0- r M U) 1- CDCDO M CDV r r M OD W a0 OD 00O CD V OD (D CD U) M �} CD(D CO CV (D COO W N U) ti N ao (O 00 c0 0) 1: N 0) O N 0) 0) O O (0 U) M O O O N 00 0- ZM r r M r 0) CD0) M r r CD(D c0 0) n CO U) 0 M M O0 CDO M sr N sr r c00M0) U)0)O OD OD M OD rt r'- U)1' M La Mr — W(D N 0- N N N M 0) V N U) ` Uj > wv 0) D W (n 00 a) W j c 2 Z A w O) C= W 7 0 J j c co Q ( m o .a) u- O V d a rn W m e a x g 0 w m E 2 O} X 0o a c Z aa) co O N O C U « i..) W 0 N H Z N D " :� YO N 7 W N E w y C ._ MD W (� 'D U C L1 C WLL u u` onvtoCUcOcEca�i �"m���u maUima Ea Zoa'E�ot W max) wWam...—w wata-=>`u>� DmEmm�>nmcz� wz Qv ���0 a�� W W c v d w m m c m N o m al o m > N 6 z E j O m O c aci a w w Q c) O O •_ 3 z c o c `" w d d W L F Z,> c t .c n a c y I he ((W Li c r c cc`o cc`o H U d Z ., y 0 W d N (p C U W N d O N c W> W N (a 0 (n c Q N O (_ >o(.D0� 0LL._) Co CQ d0oOiao 0 w> 2—aooFF C UUJE? w w 0 Z Do NI Source: Comprehensive Annual Financial Reports 83 LO a) v v O o r` O - .J ▪ Ln Ln LO u 0 0 r- O CU _� � F- rn O ` {— [ NN N - CT) CT) 0')0')CT) CO 1- 0 u) u) U) - In T • vi' �Y O O d O O O O O O O LAST TEN FISCAL YEARS Estimated Market Value O CO CO LO CO N 4) l!) - 0 ID 00 co M CT)) r- N Cr)) O (n CO 1- CD o a) V N- CI-ri (fl Cr)- v v N a) ti N CO 0 - N CT)- CO coN N = O CO (n - CO 't CO a) LO Tt H a) (0 O CO (n N r- N C) lf) r) O- ro Q > N COM (On CO_0CO) CO0 - N LO V' s- 1- 1- 1- N- N N N N 157,993,468 164,107,720 M (n N (Cf Y 7 COO N- M 175,797,883 1,571,329,201 N 00 N 10 Cn r-- Tr- C) 210,303,809 r� a) M C) N CO O M O M 0 (0 O '- C) N- In N d- r� - 0 N N N M M O - CO O(V O N CO CEO CO') (0 ai 0) CO CO O N N O N co co co d 00 CO N M Cn N - 00 ti 0 • r` CO 0 CO CO rn rn I- 1 1,167,942,644 375,015,487 415,198,175 2,319,397,573 N N C) L0 ac N- CO C• COO COLO- N N 375,328,844 2,749,051,152 424,995,712 N CO N- N Cr) O CO 0 Cn (n - N (n - i- T' 'ct N CO O O O C`) M Cr) V' N N 'tt O Cr)- (n C) CO 0�0 CO CD M - O ti O N co N CO) N Cn N r) (n CO F C) O - M ,-- e- 1 N N N CO rn O o O o 0 o O o C) C) O O O O O O O O NNNNNNNN Tarrant Appraisal District a) 0 O • 0 U) Z 84 (0 I- v v v 'Cr v v v v v N w N O CO O CO 0) M 0) 0) M 17) C >' C a) O (0 (0 m E o 0 0 0 0 0 0 0 0 0 `ta 0 E 0 F-U pU U Overlapping Rates ru Oo N M M c) M CCO M NI' Nt M M M M NNNNNNNNNN O O O O O O O O O O Nt 1' N N N N 0-- (D CO CO I- N- I,- r- C Z- NNNNNNNNNN N j O O O O O O O O O O O I- U 1 O O. N N D. 00) — O 0 V cM M (1) CO O 0 0 I` _ O (0 tf) tf) l(') (D (0 N- ti n (() a) a m a) U o 0 to o (MD (MD CO ^ 0 0) (D O 0 co n 7 7 (OD. ((00. ((00. ((00, (00, r (D, I- � t!O), w o -a �v w = m to a) u) to to w 0 (0 U) u4) u4) u1) soo o N. 0 O U n ti n N N O O LO Iv; Q, O di O di O O O O O O f0 IY co O w F' 1- a ix Q5 0) 0) v 0 CO (0 0) v (0 CO ~ M co COMCO (0 CO co N ^tnf) CO M coN } C U (0 CO Co ti c0 0) co(0 1) W0 a, a) O O O O di O O O di O 0 , a 0,o)(n .0 c ' o a 0 _ _ Z fn ` a) (0 N OV n (00 N Tr 0) N N < ato CO CO C(00 (MO ,- CCO 00)) CO CO M �X Q < C 2' (0 (0 '4) CO O) O CO W M M M M M N M M M M H Q_' } a' a O O O O O O O O O O tnwQ ac W 0 �_ U 0 m Z 13 ILI a W +a) _ lL H F- 'C a0 a.)O N CO0 (0 r D U O) 0) 0 0 O 0 0 0 O 0 0 V) C a) ,- N N N N N N In N N 7 it } UEIJ2 co C City of Euless Budget Office, Tarrant Appraisal District a) 0 0) Cr) N a) 7 O Q i ez CO r.- LC) 0) r- CO 0 r- N N (O V CO (O •CO 1- 0 O) O) (n MN 00 (D (D 0) ()) (() V 0 0 (n D) N r-- (0 r" Q) ((') 0 O 1- D) V MOr-D)(OM000O N a) o V N N N j co (N 0 CO 10 LO (MD O (MO 0) MV N N O I\ (D M N O 0) a a) co Q i c c 0 D_ E O U a 0 (D 10 NM N N N (N N O (0f) V 10 co V 0 CO D) (D 0 0 N.co00 CO'0 in co N101� • a h1- V mCD- (D1-D).-N u) -0 ( 7 N N0 V �CD Ci OMN(OM0 N CO a) (o N N 1- 0) h r� V• 0 O) (n 0) CO Q i n (D (D CO M M CO M N N V (» (n (o 0 H Source: Tarrant County Tax Office 86 co .Q (0 H co Z 0 U W J J 0 U Z acn X Q W W I- W } co x U J ~ - } u- W H Z y lLQ' W O. U - O. a Collected within the Delinquent Taxes Total Collection Fiscal Year of the Levy O U a) O 0 C a) u) 7 Q) O' X C (� N 0 O 0 0 0 0 0 0 0 0 0 O O O O O O 0) CO CCO O 0 0) N (0 CO O P.-- cc; 10 10 (O O O O) (O N- 0) co co ('') V CO CO C)) N- CA (0 co (0 0 0 O) 1 Cr) Cr) (O 0) CO 1- C)) • 0 0 O Cr) N () CO1 N 00 10 O) COC�') Cr) 'CT 0) 0 a) NO CO CO 0 0 0 0 0 c o 0 0 0 a) O co O co O r- CO N N 0 O CO I, CO i0 (O O V CO f� i0 0> C3) O (7) CO r- O O) — O N 0 J (3) 0 C) 0) Q) CI0) 0 0 C) .- r r N- r r 0 0 a- C) 0 (- - CO ti CO 1- co co U7 O O d' CO C CO (O (O CO CO _ O 0 N--CO CO N- 1 (O 0) O ((00 . - .- CO CO 0 1- (0 CT) 1- CO O O N 1, N- CO 1"-- r,N- CIN- N I- CO CO- ti ti CO- C7) 0 N- N- N O r r 1- (- CO V (_O i- C)) V N C)) C) CO 10 OV () CO O CO CO 1 (D N 1-- N CO- C N CO - CO CO (O O N CO Cn N CO .-- p o 0 0 0 0 0 0 0 0 0 () o o 0 o o 0 0 o 0 o 0 CON CO CO rn r-000 LO V rn CO (0 cc;Cb 1` (O 00 r--:00 CJ) 00 C Na) J a) Q) o) CA a) Q) Q) O) CO0) 0) U 1 a) 3- (O V CO (O 1- CO ti ti CO Cr) co (0 _ N 'Cr CO 00 N CO0(0 (0 O C co- COCCONCO CO CO- ((0 O 0 } _ O ' CO 0 10 O CD (.000 (0 CO C CO- CO- 1� 00 aCD- O N Q r r r LL O 1O CO CO CO Cr) N V CO N CO C)) (O CO CO f` 0 > CO CD CO N 0 N 0) N CO CO J O X N CO 10 1-- ti N CO O CO CO I- CO CO (- 1- 00 O) C) O r r r • CO 0) 0 i- N Cr) V Cn CO N- M (3) 0 0 0 O 0 0 O O 0) rn 0 0 0 0 O 0 0 O NNNNNNNN Tarrant County Tax Office and Tarrant Appraisal District 0) 0 1 0 U) 87 00) O CO M M V CO M (0 (1) p 0) 0) cD (o V (o 'Cr. C7 (n Business -Type Activities Governmental Activities Last Ten Fiscal Years o 0 0 0 0 0 0 0 0 0 m N o a) O co m n O) CO o V O) in E -1 ' v (0 n c0 (0 cD c0 to O 8 7-I a o a" a) m (a c O E ~ a` 8 0 0 $ 41,151,586 Coo 0(0) o) (Mo ,- 0 0 0 0 (o r- to co ao O O O O ((0 Co CO CO- 00) 0 0) o^ 0) Ccci O (0 r o^ (0 n n 06 0 0 0 0 0 0 0 0 0 0 O 0 ) 0) 0) 0) (.0 O O to 0 0 0 0 0 0 0 0 0 N CO o 0 o 0 o O O o m - 0 0 0 u) 0 0 0 U a) 0) M 0) CO (O O O O' (D 1- .11. 0 N m CO to N m n o 0 U O 69 0 0 0 0 0 Co 0 0 0 0 0 0 0 00 0 0 0 0 0 0 to to tf) O O tf) (4) (t) O aD (00 1.( ) Cu-) (0 0 OD CO CO 0 n CO 69 7 to o 0 0 0 0 0 0 0 0 0 C-o (o O to O. O O O to (1) it; ots a) > c • LO n CO .n- (0o OM N Q) o LOW C m N - V `Zr- coM (o a V a 69 0 CD X O O 0 0 0 0 O o o O 1- C "NO 0 O O (n (n 0 0 to to O N a) C C) 0) 0 0) N (D N r 'Kr ° V O N N M CO VI t` .- to Ili COO) O) O) 0) O) (0 0 r- r (O 69 • O O O O O O O O oaa00000 O O O o O O O O 00) 0) 0V r- O O O coo N O CO r` to co O O O O 0) 0) 0) (0) 0) 0 0 0 0 0 0 0 0 0 0 (n o 0 0 0 0 0 0 0 0 0 a) 0 0 0 0 0 0 0 0 0 0 0 - (ri 0 0 0 0 LO- CO o )0a o r" rn v rn r V ( CO- N N O n (D 0 (0 (0 (0 0) CO to O O O O to LO t() (0 CO Co O O O (o (O 09 V m (o O O O LO Co C)O N 0 CO (No V CO CO to V � N- N co- N N N N 69 0) 0) 0 0 0 0 0 0 0 0 N NNNNNN N Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. See Table 14 for personal income and population data. 88 a) N M co co co co a) a) a) a) 6 COo • 0)1- (D Co CD LT) O M J a) IZ M C) (n CO I` n I` t` I` (o X F- o U H 0 a) v 7 U C OO o o o 0 o o o o 0 o O V) 7 0 0 0 0 0 0 0 0 0 o L M CO C CU N a) r--, co co ▪ to a) O N r .- r r 0 Q (0 O H u) a) 0) O� N M O_ N OM) M ONO a) u) (1) CD (D (n M (D O (() Q) 7 � is Q N M 000 O N �0 U C (0 C 1 1 1 1 1 1 2 2 2 2 Lc -- a) L 17 C 0.)+ ' (0 (0 0 0 0 O (o U) U) U) (0 O a) E � 7 -.. co a) I- N a)co ,- a) I, -a) a) 'y a - (V 10 (o I- a) a) O N1 co0 W �O In C a) C (o Co (D 0) M (n 0 0 0 0 U CO CO a) - U) O O O C (() (() I- 7) (D CO_l) O O O O 7 0) ▪ c�0 (n N 0 O 0 r 0)) Lri N O - co- (D (D 1.6 C) a) I) ) M 1- 1- N M M M M M M M C C CCS r a) U co u) O O O O O O O O O O C a) c O O O O O O O O O O U I- as O O O O O O O O O O c CO F. O D N N 00) O N (▪ �D N- � co w O C ) O O (D I0 (0 0) O) co N- (0 a) 1- O o0 M N CO- O O I� (D 0 W U N N N I- 0) m Z • W (0 V a _ m • 0 C (D (D (D 0) CO (n 0 O O O +L,,, a) C O Q Q 0 2 .o o LO (0OO N- (n � 00 0 0 0 0 cID x W Q (0 C co- (D M O (!') O O O O W c co 0 U) N O CO N N ((7 �„ HZ J W O m O 0 CO N M In CO M (0 O (n U' , Q (� (n N. CO. N 2 (0 J W W .-. = Z f/) W a) a) ^ W IL�Z a) 0 c) :t+ H U 0) a) O O O O O O O O ` >- F- Q (/) C y} - - NNNNNN N N r L. U��J= Z in Estimates by North Central Texas Council of Governments (2) Tarrant Appraisal District 89 v CO CT) o CA O o0 N N O Nr O 0 O C 0 Lf) U) LO O C) 1-(0 4) (0 (0 0) N A- 00 LX r- co W (n In ti co 0 a) o 0 0 0 0 0 0) a) N 0) N N N 0 CD as -0 c-- f— 1- r— r— O (0 V N O N N N O E a) _ N 0 a w a) a aQ 0) 15 C CU (0 a 0 Governmental Unit Debt repaid with property taxes 373,962,288 Grapevine-Colleyville Independent School District 217,605,395 Hurst -Euless -Bedford Independent School District - o Co 0 Cr) O - 0 O O io co CO co- r- LO O 0) r- N CO Nt O CO CO C0 10 CO N Tarrant County Tarrant County Hospital District Tarrant County College District Subtotal, overlapping debt City of Euless (direct debt) 110,586,047 Total direct and overlapping debt Debt outstanding data provided by each governmental unit. Tarrant County Hospital District figures were taken from the HEB ISD CAFR for the year ended 8/31/2007. c0i y 0) Z 90 U O (3 12 N N LO CO e-- CO O C) CO 0) CO 1"-- - 1,- U) M (n f� O O CO 0000 CO N CO CO N 0) N CO CAD CO- N 1� N N-- COO M- (NJ co N co 00 00 co (� _ O in co r- CC) Cfl ti co —p O O COc LI) CO CO CO CO N N CN CO CO 2 U co- ti N 1� N- CA CO- CA O M - C13 N 0 CO N-M O) M ti N C LL U M N N-'N N N O O co co co co co O O coTo co O O O O O O O O O U Cf) 10 In lf) O 10 O U7 U) 0 C 0) CO CO CO 10 Cc) 10 CY) 0 0") N 0 a) a) c ca Z > • • Q O 0) N 0) .-- C() N 1- M N CO N- 0) 1� CO In 0 CD O co00 CO CD CO CO N ti O LO N 0)) CMO N CO 0) N CO CO N N Cr) N N N N Cr) 0) (1) O) N 0) COH0 ▪ N CO LC) (� C (1) 1- CO N 1', 0) N (0 - 0) 1- O CO- In C() M 1.- N- LO- LO- CO W N CO CO Cfl r- 0) CO 0 In CO CO I (1) Q 1` N N 0) N 0) to CO O- x O) C3) CA co- co- O co- 1.- CO. M < O W W 0 - 0 a O0 re m Q N N.-.CO • 'CTLO co 1� X U) O — (n CO 1- • - co N- co▪ up CD W W • W _ a) O O O 0) .•- 1- O I- Z W J (o C� Cn ao O) co- co- 00 ao O co- W W Q O>" co O (f) ao cocoCO U ~ a) r Cr) CO- r Cr) CO- v CO Cr) LL W • O < Z LL W F— WcoO O N-- N COCC) co 1` W t- CA a) co O O O O O co co cn F- U (a Q) 0) 0 0 0 O O O 0 0 i' W H U) Rf u (1) •- N N N N N N N N H U 0- 1 LL (1 (1) Operating Revenues and investment interest of Water and Sewer Fund. N 0 Z (2) Total operating expenses of Water and Sewer Fund exclusive of depreciation and amortization. 91 1— O f— N CO O) CO - CO CO 0) 11- O I— 00 O O N N N N N CV N N— N M M N 1— LC) I) lf) CO OO CO Lf) C3) (f) O LC) O O CO CO O N CO CO CO O CO- N CO- 0) N N— - 1. C; N N N N CA 1- T- 1 CNNNN T- N N N N NMCON L0 Cf) lf) co 00 co L) C3) tf) O LC) O (3 O O "cr M CO O N M cO C') -0 C) LC?' CO- N CO- V N (.6 (ll u) (a N O N- CO CO CO C IL L T T- U 0 0 0 0 0 0 0 0 0 0 o 0 0 0 0 0 0 0 0 0 Q, o 0 0 0 0 0 0 0 0 0 U O LO O O lf) O L) O O L() C co O ' N N- co CO ti 00 co • r r r T- CL. cfi O O N CO CO CO N CO O O 0 CO CO 1— � CO C3) = .p O ,— ti co CO N CO CO CO CO 46 N C co CO- CO N O N N— M O — Z• > Lo coM N CC a w Q Ce W N- N COCO l!) N' O CO C) O CO O O C.O CO 0 to U ( CO CO N— /) � C ^ I- tl) 0) N N— N— lf) Cl) f— O N (I 1- N CO C)) N T- Nr 0) N CO LC) N at J Q Q T- M N N N N N N Z OW 0 C1 (/) N W Z XZ O lf) CO N L() N CO CO CO CO w> Ca a) co 00 coLr O) In — M N— (f) N- } Tts LC) Cn N— CO C3) N— M N LU H J A- N J Q CO CD CO CO CD CD CO o� ti o� J O W J 0 LL = Q W CA (3) 0 0 0 0 O O O O O Z~ 0` W ' O) 0) O O O O O O O O ii ' N N N N N N N N} L} �ZU u o (1) Operating Revenues and investment interest of Drainage Utility Fund. 3 (2) Total operating expenses of Drainage Utility Fund exclusive of depreciation and amortization. 92 +� o 0 0 0 0 0 0 0 0 0 - C o � � � o 0 0 0 0 0 N N — N co O I` co u) co co a) E N N N M 4 M 4 4 M I- fl � � E N C (1) E U o Cr) O 0 0 0 0 0 0 0 A- 00 0 O O O 0 0 0 0 A- A- LO LC) U) LO 10 10 N- (D A- CO o) O) O O) O o) o) o) O O , , , N- 1- N N Q Q Q Q Q Q Q Q ti z z z Z Z z z Z cM co 1- 00 LC) CO A- o) M 0 o) N CO LO CO N N. o) C• COO o) � CD ▪ O A- A- N- • N Cl() dN `t N CO (D U0 CO0 (n c)) OCR) OA- O o) N o) CO CO LO CO (D I's 1- o) O N N N N N N N N N N C..) 0 0 0 0 (.0 0 0 0 0 0 (n H' W O C O 0 0 0 (D LO LC) In LO LO a 04) O M o) I- lf) - o) N. o) N- N- a LU X< W E I° 7 v v v v v v v (ten (1n (n N _-I L1J a_� U (aj J 2 N 4 11 W ce Z y CO O 0 � N CO `�f In (D N- u. W o) 0) 0 0 0 0 0 0 0 0 H 'CCD 0 OO 0 0 0 0 0 O N= �} • o) ,- NNNNNNN N It L.)O J Notes: 1. Estimates by North Central Texas Council of Governments 2. Estimates by Claritas Site Reports; Research & Demographic Solutions 3. Research & Demographic Solutions - 2006 4. Hurst -Euless -Bedford Independent School District 5. Texas Workforce Commission 93 o 0 0 0 0 0 0 0 0 0 0 a) >, C o 0 0 o 0 0 0 0 0 0 o- ,a) cr M cco 'cr N O o0 O O Cn a) (DU E LncOrrf—(DCD N700 CO CTo > 00 0 0 0 0 0 O U ,2 Q. O O L Al) E Li- o w co rn rn 1 Q >- W W c } H O c J W D J O 5 c "O } Z 0 a 0 — O M c 0 0 LC) O Ln O' ' M a) NO 0L0Cr)NO rr co CO N �r O a E w Atlas Match O a) Q. 0 a) a) OI- E i o Ts 12 0 Albertsons Z Z 0 0 0 0 0 0 0 0 0 0 0 .. o 0 0 0 o a o o a o a) C Lc) .-C')Lc) (Y)-OON o) - (1) LO 1- Q) f- LC) LO LO cO O C U E ,-,- 0 0 ci ci 0 0 0 0 CD O O ` E a) d o w O co in LO O LO N N- O O O N. a) a) OM N N cocY) (Y) N O O OD co o a E w Source: 1998 Official Statement, TWC website, US Census website, City of Euless Economic Development Department 1998 Official Statement listed the top eight employers, other source data did not provide ai 0 pp CO Q) 0) (D � C co co C o) Q_ A- 0 O O c 0 o E m o E .0 O Q) - c a) o O Z m 94 Fiscal Year 2. 0O if) O O O (1) O u) CO 0 0 0 r N O O O I- O N I` O O O OOI O 66 M N 117 11) O N 11•) O. C!) r 6r c) U) 1— r (OM N r Z 0 P. 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N 0 0 0 I- O N N- O 0 0 O (0 • N U7 00 (n In (O N a0 O lf▪ ) c- (O r M • r r (0 N r M U) O O O In O (1) U) O O O Tr N O O 0 N O N I` 0 O 0 O In .�- (O M O) lt1 (1) 6 N O) O cr r r C0 N r M 10 O 0 0 11) O 10 U) O 0 O CO N O O O N 0 N ti O O O - (f) 10 O) (1) u•) (O N O) co r CO cr r r (O N M (n 0 0 0 (n 0 (n In O 0 0 NI N 0 0 O I- O N I` 0 0 0 0 N 6r M (f) r 11) U� 6 N 00 O lO r co r M u) r r (0 N r M 2 w 1- (n 0 0 0 0 10 0 0 0 0 O Z MI N O O O O N O 10 O O O w O OV •-- lOO r co Tr , O N Tr Z r r co Z CC w > 0 0 >- - U c (/) h .o > a) a�i M. i N C-0 w C ` ✓ (n I a) Jw (A O >� c N w 2 u' 0 o- 0 �° c .> m c lL C =' C co d f0 ((0 7 O J o 0 cn U D aa) = ao�i � o D �i N o ) City Budget Office 1 0 N 95 n_ N CO c0 ill CO CO CO V 0 N O 1- ‘1' ‘1' (D 0 sr a0 (0 (D 1- 0) O) in N N 0) (0 03 CO N (D in O) a) M (DM CD VV Cr)) 0 ) cr M M 0 1COM N M CO c,-;N N O^ M 1- (D V N (D N N N O) U) in O 0 V 0 CI (0 U) (0 0 V 0) O (0 (D (O CO O) (D O c0 0) V V N- M cc)(D coO M O r (D O co O• (D col co' M N (D N- V U) V N N- O N (D N N N. 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O 'O 0 U .0 ` O (O X rn ac (0 vQ n xU i nQ c n w n 0 .0 Y `m 0) c c m c a) 1:12_ N c w o E 7 E c_ o a) > LL N c c 12 c r in 3 Q UL ) E m0 CO (j •.: ` CD ° g w a) 0 0 c c n rn FE E c E 7 0 U C c o a)0 w `m moo E° u) ` a`0i a) m -Oo cu im c cc D o m U Q w �� CU O D > 0 b U c a m E— P Eo n a) N a) U c a) a) a) Y O id Q u) O c N cu E E E `0n N E E E .10 ° O m m D° a` d U ° 7 7 7 V N a 7 7 7 u! a) 1p a) 7 ° cZZZ co 2ZZZ u �xU E m m m c U E c iri LT_ 00) �n �ZQ =Z a 0 a U 0 u°) Z 96 N/A - Data not available. co a) CO F- Last Ten Fiscal Years (Unaudited) N- CO O CO r- N tt) N .-- .-- N- CO O c- O - CO CO ' ' cd O (O CV V CO N CO- N I". 0) N .- CO O CO I"- CO tf) N .-- .-- I"- 0 C- 0 CV •-- (0 CO CO O I•-- N CO O CO 00 CO CO .r- r r O) N .-- CO O CO CO 0) to N .-- 1- N 0 CO 0 C\I •-- CO N I'-- O CO O CT CV C`? CNO O) N .-- CO O M CO 0) LO N •-- cY CO (7 00 0 .-- CO N N O 1- CONO N O C? a) ✓ CO .- r 0) N .-- CO O CO CO CA LC) N.-.- V N O CO 0 CO - U') N • CA Cr) t j l- CO O 1- l- O N 1- .- CO O CO CO 0) LO N •- .- Tr 0 Cn O CV .-- CO N ,- O CO U') C., (V N t .— (b O , O N .--CO 0 COCO0)CON•--.--cr 0 0 (0 0 CV •-- CO N CA O CO to N: N. Tr 0) .-- - M O CO (1) ')MN •--.-- V'CO OOO �j .-- CO N CO O CA CA co to O t17 7 Cr) •-- • CO a- a - CO a- a- Cr) Q CO cr C)) Cr) N,- .-- V' CT) 0 O O Z C- M N O (�D to 0.)COl.I` r- 00 r- M z CO cr 0) M N-- V 0 O O O co N (D 0 CO 0') O C� `- Cr- ) Function/Program Fire Stations Public Works Streets- Paved (linear miles) U O -J Water and Sewer Source: City Departments 97