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.
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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.
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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.
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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.
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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
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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
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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
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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.
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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
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$ 10.475,841
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Source: Comprehensive Annual Financial Reports
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Source: Comprehensive Annual Financial Reports
83
LO
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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
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157,993,468
164,107,720
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175,797,883
1,571,329,201
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210,303,809
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375,015,487
415,198,175
2,319,397,573
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375,328,844
2,749,051,152
424,995,712
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Source: Tarrant County Tax Office
86
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Tarrant County Tax Office and Tarrant Appraisal District
0)
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Governmental Activities
Last Ten Fiscal Years
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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)
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Estimates by North Central Texas Council of Governments
(2) Tarrant Appraisal District
89
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Governmental Unit
Debt repaid with property taxes
373,962,288
Grapevine-Colleyville Independent School District
217,605,395
Hurst -Euless -Bedford Independent School District
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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
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90
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(1) Operating Revenues and investment interest of Water and Sewer Fund.
N
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(2) Total operating expenses of Water and Sewer Fund exclusive of depreciation and amortization.
91
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(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
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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
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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
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Source: City Departments
97