HomeMy WebLinkAboutFY 2006 Comprehensive Annual Financial Report201 N. Ector Drive
Euless, Texas 76039
(817) 685-1826
www.euless.org
City of Euless
Comprehensive Arnmal
ieport
IFiscal Year Endi
riff
Septemheir 309 2006
CITY OF EULESS, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED SEPTEMBER 30, 2006
TABLE OF CONTENTS
INTRODUCTORY SECTION
Page(s)
Letter of transmittal i-v
City officials vi
GFOA certificate of achievement vii
Organizational chart viii
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 26-49
Required Supplementary Information:
Schedule of Funding Progress for Participation in
Texas Municipal Retirement System 50
Budgetary Comparison Schedules 51-53
Notes to Required Supplementary Information 54
Combining and Individual Fund Statements and Schedules:
Non -major Governmental Funds:
Combining Balance Sheet 57-58
Combining Statement of Revenues, Expenditures and Changes
in Fund Balances 59-60
CITY OF EULESS, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED SEPTEMBER 30, 2006
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 61
Police Drug Enforcement Special Revenue Fund 62
Half -penny Sales Tax Special Revenue Fund 63
Crime Control and Prevention District Special Revenue Fund 64
Public Safety Grant Funds - Special Revenue Funds 65
Non -major Proprietary Funds:
Combining Balance Sheet 67-68
Combining Statement of Revenues, Expenses and Changes in Fund Net Assets 69
Combining Statement of Cash Flows 70
Internal Service Funds:
Combining Statement of Net Assets 72
Combining Statement of Revenues, Expenses and Changes in Fund Net Assets 73
Combining Statement of Cash Flows 74
Fiduciary Funds:
Statement of Changes in Assets and Liabilities 76
STATISTICAL SECTION (Unaudited) Table Page(s)
Net assets by Component 1 77
Changes in net assets 2 78-79
Fund balances, Governmental funds 3 80
Changes in fund balances, Governmental funds 4 81
Assessed and estimated actual value of taxable property 5 82
Direct and overlapping property tax rates 6 83
Principal property tax payers 7 84
Property tax levies and collections 8 85
Ratio of outstanding debt by type 9 86
Ratio of net general bonded debt to assessed value and
net bonded debt per capita 10 87
Direct and overlapping governmental activities debt 11 88
Pledged — Revenue coverage water and sewer bonds 12 89
Schedule of revenue bond coverage drainable utility bonds 13 90
Demographic Statistics 14 91
Principal employers 15 92
Full-time equivalent City government employees by function/program 16 93
Operating indicators by function/program 17 94
Capital assets statistics by function/program 18 95
INTRODUCTORY SECTION
THE CITYOF
EULESS
January 15, 2007
To the Honorable Mayor,
Members of the City Council, and
Citizens of the City of Euless, Texas
We are pleased to submit the Comprehensive Annual Financial Report for the City of
Euless, Texas for the fiscal year ended September 30, 2006. 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.
Management assumes full responsibility for the completeness and reliability of the
information contained in this report, based upon a comprehensive framework of internal
control that it has established for this purpose. Because the cost of internal control should
not exceed anticipated benefits, the objective is to provide reasonable, rather than
absolute, assurance that the financial statements are free of any material misstatements.
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, 2006. The Independent Auditor's Report is located at the front of
the financial section of this report.
Management's Discussion and Analysis (MD&A) immediately follows the Independent
Auditor's Report and provides a narrative introduction, overview, and analysis of the
basic financial statements. The letter of transmittal is designed to complement and
should be read in conjunction with the MD&A.
Profile of the City of Euless, Texas
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 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 52,900.
The City of Euless was incorporated February 24, 1953 and is a home rule city operating
under a Council/Manager form of government. The Council is comprised of the Mayor
201 N. Ector Drive, Euless, Texas 76039-3595
817/685--1400 • Metro 817/267-4403 • Fax 817/685-1416
www.ci.euless.tx.us
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 appointed by the City Council and is responsible for carrying out policies and
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 City of Euless provides a full range of services, including police and fire protection,
emergency ambulance service, development and code services, construction and
maintenance of streets and highways, recreational opportunities, water and sewer
services, and library services. The City also offers a top ranked golf facility, and a
softball and athletic complex.
The financial statements of the City include 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.
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 1s1 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. 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.
Local Economy
The City of Euless is located in the heart of the DFW metroplex and adjacent to the DFW
International Airport. Thus, the economic vitality of the region significantly impacts the
ii
economic health of Euless. DFW Airport is the world's third -busiest airport offering
nearly 1,800 flights per day and serving nearly 60 million passengers per year. Tarrant
County is one of the fastest growing counties in Texas, and northeast Tarrant County
leads 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 (DFW Airport). DFW has a highly -diversified
economy with more than 128,000 businesses and 1,500 regional and corporate
headquarters. (U.S. Census Bureau County Business Patterns)
The Alliance Development in north Fort Worth which includes an industrial airport has
attracted over 140 companies and created over 24,000 jobs for the area (Alliance Impact
Economic Study). This area has plenty of land available for development and is expected
to continue to bring significant investment to the region.
Euless housing and commercial development continued to show sustained growth during
FY 2006. Property values have continued to grow at above average rates. Taxable value
for all residential and commercial property in the City of Euless was approximately $2.4
billion for fiscal year 2006, which is a 6.7% increase over the prior year. Sales tax
collections increased significantly during FY 2006 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 2006, car rental receipts reached records levels.
The City Council has chosen to use this funding source to build reserves and to cash flow
capital projects in lieu of debt issuance. This 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 1,141 acres of undeveloped land outside of DFW
Airport and another 1,700-1,800 developable acres within DFW Airport. Euless worked
with a major developer during FY 2006 to finalize a project that is expected to add
385,000 square feet of commercial/retail development along Glade Road and the east side
of Hwy 121.
Euless is pleased that State Highway 360, which lies of the eastern border of the City has
been completed and provides greater access for undeveloped areas along this highway.
Also, the announcement that the Dallas Cowboys will be relocating their stadium to
Tarrant County, with a close proximity to Euless, is expected to bring additional tourism
to our City.
Long-term Financial Planning
The City of Euless has developed a comprehensive capital improvements document as
well as a multi -year financial plan. This strategic planning has allowed the City Council
iii
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 receipts and avoiding 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 on
the west side of Hwy 121. This center should provide approximately 1.2 million square
feet of retail/office as well as a unique residential component. The City expects that the
sales tax benefit from this center will be significant. Construction on this project is
expected to begin by late 2007.
The City will complete the three year plan to add additional firefighter/paramedics to
staff an additional ambulance. Phase I and II hiring has been completed with Phase III
budgeted for FY 2007. This phased approach has allowed the City to provide this needed
service without an increase to the City's tax rate.
The City completed the reconstruction of the Finance, Human Resources and Utility
Billing facility and the new Public Works facility will be completed by late spring. Both
projects were funded from reserves and did not require any debt issuance. The City is
currently updating the Facility Master Plan to address future needs including renovation
of the Planning & Engineering facility, a Senior Citizen facility, Library expansion,
Conference Center expansion and Fire Training facility.
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,
2005. This was the 19th consecutive year that the City has received this prestigious
award. In order to be awarded a Certificate of Achievement, the City published an easily
readable and efficiently organized CAFR. This report satisfied both Generally Accepted
Accounting Principals (GAAP) and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our
current CAFR continues to meet the Certificate of Achievement Program's requirements
and we are submitting it to the GFOA to determine its eligibility for another certificate.
In addition, the City of Euless also received the GFOA's Distinguished Budget
Presentation Award for its annual budget document. This is the 15th consecutive year that
the City has received this prestigious award. In order to qualify for the Distinguished
Budget Presentation Award, the City's budget document was judged to be proficient in
iv
several categories, including a policy document, a financial plan, an operations guide, and
a communications device.
The preparation of this report would not have been possible without the efficient and
dedicated services of the entire staff of the Finance Department. We would like to
express our appreciation to all members of the department who assisted and contributed
to the preparation 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
and professional manner.
Respectfully Submitted,
ennig,
ity Manager
Loretta Getchell,
Assistant City Manager
v
CITY OFFICIALS
Carl Tyson
Council Member, Place 1
Leon Hogg
Council Member, Place 2
Linda Martin
Council Member, Place 3
and Mayor Pro Tem
Mary Lib Saleh
Mayor
Joe Hennig
City Manager
Charlie Miller
Council Member, Place 4
Glenn Porterfield
Council Member, Place 5
Michael Brown
Council Member, Place 6
Gary McKamie, Deputy City Manager
Loretta Getchell, Assistant City Manager
vi
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, 2005
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
Executive Director
vii
RON
YOUNG
Director of
Public Works
Streets
Water
Wastewater
Animal Control
Meter Rimding
Const. Mgmt.
ROBERT
BARKER
City Engineer
Engineming
Const. Inspection
CIP Mgmt.
Traffic Safety
Drainage
BOB MCFARLAND
City Attorney
RAY
MCDONALD
Director of Parks
Community
Services
Recreation
Parks
Special Events
Parks at Texas Star
StarsCenter
Softball World at
Texas Star
SUSAN CRIM
City SecretarY
LEE
KOONTZ
Fire Chiet
Suppression
Ambulance/EMS
Fire Education &
Prevention
Fire Marshall
BOB
FREEMAN
Interim
Police Chief
Patrol
Ciiminal Invest.
Services:
Communications
Conununity
Jail
Records
Emergency Mgmt.
CITIZENS
MAYOR
and
COUNCIL
JOE HENNIG
City Manager
GARY MCKAMIE
Deputy City Manager
LORETTA
GETCHELL
Assistant City
Manager
Accounting
Utility Billing
Budget
Municipal Court
Cash Debt. Mgnit.
Info. Services
Purchasing
Human Resources*
Risk/Benefits
LACY BRITTEN
Municipal Court Judge
•r• .• • • 6. v 6 As kv, V6
KYLE
MCADAMS
Fleet &
Facilities
Administintor
BILL
RIDGWAY
Director of
Economic
Development
Economic Dev.
Franchises
Recycling
Orga zational Chart
ennig, City CI
November 2006
Municipal Court
of Record
MIKE
COLLINS
Director of
Flaming
& Development
Planning
Code Enforcement
Environ. Health
Bldg. Inspections
KATE LYON
Library
Administrator
BETSY
BOYETT
Conummica-
lions &
Marketing
Manager
1 V
l GLENDA
I HARTSELL-
ic (Si ef in Eat; Ti I v 1.011 iN. 1 ,
Texas Star S
1;.
,.!
4
FINANCIAL SECTION
WEAVER
TIDWELL
L.L.P.
CERTIFIED PUBLIC
ACCOUNTANTS
AND CONSULTANTS
DALLAS
Three F real Plaza
1222/ Me[i/ D[iue
Sidle /400
Dallas, 7..\as 75251-2280
972.4 90.1970
P 972.702.832/
FORT WORTH
1600 117e.d Senn// Sine!
Sidle 300
1•in. 11'iu/b, 'ievas 76/02-2506
817.332.7905
1' 817.429.5936
W W W.WEAVERANDTIDWELL.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, 2006, 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, 2006, 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 51 through 53, 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.
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
December 6, 2006
CITY OF EULESS, TEXAS
Management's Discussion and Analysis
For the Year Ended September 30, 2006
(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 of the City for the fiscal
year ended September 30, 2006. We encourage readers to consider the information
presented here in conjunction with the additional information that we have furnished in
our letter of transmittal, which can be found on pages i-vi of this report.
Financial Highlights
• The assets of the City of Euless exceeded its liabilities at the close of the most recent
fiscal year by $144,207,383 (Net assets). Of this amount, $44,597,380 (unrestricted
net assets) may be used to meet the government's ongoing obligations to citizens and
creditors.
• As of the close of the current fiscal year, the City of Euless' governmental funds
reported combined ending fund balances of $27,551,056, a decrease of $1,362,895 in
comparison with the prior year. Approximately 88% of this total amount is available
for spending at the government's discretion (unreserved fund balance).
• At the end of the current fiscal year, unreserved fund balance for the general fund was
$7,989,805, or 36% of total general fund expenditures.
• The City's total capital assets increased by $5,010,894, which is primarily attributed
to infrastructure.
• The City's bonds payable decreased by $3,531,175 or 6%. The decrease was due to
regularly scheduled bond payments and savings from a bond refinancing.
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 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.
3
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 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, public safety, highway and streets,
development, and culture and recreation. The business -type activities of the City include
water and sewer, 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 District, which are legally separate but financially
accountable to the City. A blended presentation has been used to report the financial
information of these component units.
The government -wide financial statements can be found on pages 15-16 of this report.
Fund Financial Statements. A fund is a grouping of related accounts that is used to
maintain control over resources that have been segregated for specific activities or
objectives. The City of 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. However, unlike the government -wide financial statements, governmental
fund financial statements focus on near -term inflows and outflows of spendable
resources, as well as on balances of spendable resources available at the end of the fiscal
year. Such information may be useful in evaluating a government's near -term financing
requirements.
Because the focus of governmental funds is narrower than that of the government -wide
financial statements, it is useful to compare the information presented for governmental
funds with similar information presented for governmental activities in the government -
wide financial statements. By doing so, the reader may better understand the long-term
impact of the government's near -term financing decisions. Both the governmental fund
balance sheet and the governmental fund statement of revenues, expenditures, and
4
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 fund balance sheet and in the governmental fund
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 17-19 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 recreation 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. Because
these services predominately benefit governmental rather than business type functions,
they have been included within governmental activities in the government -wide financial
statements.
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. Data from the other recreation 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 21-25 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
5
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 26-49
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.
Required supplementary information can be found on page 50-53 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. Combining and
individual fund statements and schedules can be found on pages 57-74 of this report.
Government -wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a government's
financial position. As of September 30, 2006, the City of Euless' assets exceeded
liabilities by $144,207,383.
The largest portion of the City's net assets (68%) reflects its investment in capital assets
(e.g., 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. Although the City's investment in its capital assets is
reported net of related debt, it should be noted that the resources needed to repay this debt
must be provided from other sources, since the capital assets themselves cannot be used
to liquidate these liabilities.
An additional portion of the City's net assets (1%) represents resources that are subject to
external restrictions on how they may be used. The remaining balance of unrestricted net
assets ($44,597,380) may be used to meet the government's ongoing obligations to
citizens and creditors.
As of September 30, 2006, the City is able to report positive balance 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
2005.
6
City of Euless' Net Assets
Current and other assets
Capital assets
Total assets
Long-term liabilities outstanding
Other liabilities
Total liabilities
Net assets:
Invested in capital assets, net of
related debt
Restricted
Unrestricted
Total net assets
Governmental
activities
2006 2005
$ 44,545,183 $ 42,070,126
96,593,646 91,210,367
141,138, 829 133, 280,493
49,650,244 52,647,520
14,659,129 12,004,994
64,309,373 64,652,514
Business -type
activities
2006 2005
$ 22,283,104 $ 19,293,199
63,929,046 64,301,430
86,212,150 83,594,629
14,746,002 15, 508, 513
4,088,221 4,267,162
18,834,223 19,775,675
Total
2006 2005
$ 66,828,287 $ 61,363,325
160,522,692 155,511,797
227,350,979 216,875,122
64,396,246 68,156,033
18,747,350 16,272,156
83,143,596 84,428,189
49,883,218 49,659,438 48,278,044 48,117,917 98,161,262 97,777,355
1,448,741 1,455,709 1,448,741 1,455,709
25,497,497 17,512,832 19,099,883 15,701,037 44,597,380 33,213,869
$ 76,829,456 $ 68,627,979 $ 67,377,927 $ 63,818,954 $ 144,207,383 $ 132,446,933
The City's total net assets increased by $11,760,450 during the current fiscal year. About
43% of the increase is attributed to the change in capital assets which includes buildings,
infrastructure assets with the remaining portion attributed to ongoing revenues in excess
of ongoing expenses.
Governmental activities. Governmental activities increased the City's net assets by
$8,201,477, thereby accounting for 70% of the total growth in the net assets. Key
elements of this increase are as follows:
• Property taxes accounted for $411,184 or 5% of this increase. Although the
property tax rate decreased, increased property values attributed to additional
collections.
• Sales taxes accounted for $2,654,986 or 32% 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.
• Other taxes accounted for $2,568,037 or 31% of this increase. This is primarily
attributed to an additional quarterly payment of electric franchise fees resulting
from a change in the franchise contract, and increased car rental taxes from the
DFW Airport Consolidated Car Rental Facility.
• Investment earnings increased $740,974 due to an increase in short-term interest
rates resulting from several rate hikes by the Federal Open Markets Committee.
• Governmental activities had an increase in transfers from business type activities
due to increased general and administrative charges which are based on gross
receipts.
• 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
Operating grants and
contributions
Capital grants and
contributions
General revenues:
Property taxes
Sales taxes
Other taxes
Investment earnings
Contributions from property
owners
Impact Fees
Gain (loss) on sale/retirement
of fixed assets
Miscellaneous
Total revenues
,Expenses
Culture and recreation
Development services
General government
Jtighways and streets
Public safety
Interest on long-term debt
Water & sewer
Drainage utility
Golf course
Other enterprise funds
Total expenses
Increase in net assets before
transfers
Transfers
Increase in net assets
Net assets 10/01/05
Net assets 09/30/06
Governmental
activities
2006 2005
Business -type
activities
2006 2005
Total
2006 2005
$ 7,151,372 $ 5,964,591 $ 22,019,449 $ 20,677,190 $ 29,170,821 $ 26,641,781
592,231 1,302,332
592,231
1,302,332
8,706 312,835 3,308,393 321,541 3,308,393
11,188, 598
12,303,965
16,999,325
1,611,815
24,866
49,880,878
10, 777,414 11,188, 598
9,648,979 12,303,965
14,431,288 - - 16,999,325
870,841 771,888 405,126 2,383,703
1,229,401
374,124 -
271,707 - 271,707
(21,023) - 24,866
2,908,437 - 2,908,437
44,203,823 26,284,316 24,764,833 76,165,194
4,892,346 4,563,029 4,892,346
1,169,285 1,109,177 1,169,285
15,122,831 13,381,097 15,122,831
2,211,083 1,739,353 - 2,211,083
16,252,071 15,514,301 16,252,071
2,741,754 2,571,926 - - 2,741,754
- - 15,285,026 13,227,562 15,285,026
884,763 875,995 884,763
4,003,035 3,792,552 4,003,035
- - 1,842,550 2,630,760 1,842,550
42,389,370 38,878,883 22,015,374 20,526,869 64,404,744
7,491,508 5,324,940 4,268,942 4,237,964 11,760,450
709,969 608,721 (709,969) (608,7211
8,201,477 5,933,661 3,658,973 3,629,243 11,760,450
68,627,979 62,694,318 63,818,954 60,189,711 132,446,933
$ 76,829,456 $ 68,627,979 $ 67,377,927 $ 63,818,954 $ 144,207,383 $
Business -type activities. Business -type activities increased the City's net assets by
$3,558,973 accounting for the other 30% of the total growth in net assets. Key elements
of this increase are as follows:
Water and sewer revenues increased $1,852,742 due to increased consumption
caused by dry weather conditions and a sewer rate pass -through of 70 per 1000
10,777,414
9,648,979
14,431,288
1,275,967
1,603, 525
121,023)
68,968,656
4,563,029
1,109,177
13, 381,097
1,739,353
15,514,301
2,571,926
13,227,562
875,995
3,792,552
2,630,760
59,405,752
9,562,904
9,562,904
122,884,029
132,446,933
• gallons. Charges for service related to the golf course also increased $429,096,
due to favorable weather conditions which led to increased rounds. Charges for
service in the other proprietary funds decreased due to the cancellation of the
City's Annual Arbor Daze celebration.
• Expenses increased due to personnel cost and payments to Trinity River Authority
for water purchased and wastewater treated.
• The overall increase in net assets from business type activities is primarily
attributed to operating income from water, wastewater, and golf operations, and
bonus payments for natural gas drilling leases with XTO Energy for property
located within the Texas Star Sports Complex.
Expenses and Program Revenues — Governmental Activities
$20,000,000 -
$16,000,000 -
$12,000,000 -
$8,000,000 -
$4,000,000 -
$0
• Expenses
Ea Program revenues
Gen & Culture & Dev Hwy and Public Int on
admin rec services streets safety long-term
debt
Expenses and Program Revenue — Business -type Activities
$20,000,000 -
$16,000,000 -
$12,000,000 -
$8,000,000 -
$4,000,000 -
$0
Water &
Sew er
Drainage
Golf
■ Expenses
o Program Revenues
Other
9
Financial Analysis of the Government's Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance
with finance -related legal requirements.
Governmental funds. The focus of the City's governmental funds is to provide
information on near -term inflows, outflows, and balances of spendable resources. Such
information is useful in assessing the City's financing requirements. In particular,
unreserved fund balance may serve as a useful measure of a City's net resources available
for spending at the end of the fiscal year.
At the end of the current fiscal year, the City of Euless' governmental funds reported
combined ending fund balances of $27,551,056, a decrease of $1,362,896 in comparison
with the prior year. Approximately 88% 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 ($1,587,754), 2) to pay for specific capital
improvements per development agreements ($1,535,647), and 3) for a variety of other
restricted purposes ($312,201).
In the general fund, the City budgeted for a decrease in fund balance of $839,349, which
was primarily to be used to purchase capital items. This was a planned reduction of
excess fund balance to fund "pay as you go" capital expenditures. Due to actual revenue
being more than budgeted and actual expenditures being less than budgeted, the actual
fund balance for fiscal year 2006 increased by $2,698,056. The Debt Service fund
balance decreased $55,012 due to planned reduction of excess fund balance. Street CIP
fund balance decreased $5,723,789 due to infrastructure improvements on several major
thoroughfares. The Car Rental fund balance was budgeted to decrease $2,400,475. The
actual decrease was $1,373,323 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 are Water and Sewer - $14,087,117,
Drainage Utility - $1,815,397, Golf Course — $723,679, and Other Enterprise Funds -
$1,809,599. Water and Sewer, Golf Course and Other Enterprise Funds had increases in
2006 of $727,420, $2,000,867 and $649,031 respectively. Drainage Funds had a
decrease of $154,313. The increase in the Golf Course and Other Enterprise Funds net
assets is attributed to a bonus payment for the lease of mineral rights on these properties
for the exploration of natural gas.
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, 2006, amount to $160,522,692 (net of accumulated
depreciation). This investment in capital assets includes land, buildings, improvements,
10
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 3.2%.
Major capital asset events during the current fiscal year included the following:
• Developer contributed $127,937 in sewer infrastructure, $160,810 in water
infrastructure, and $24,088 in drainage infrastructure.
• Completion of the several overlay projects at a total cost of $947,870 which included
West Pipeline Road (Raider to City Limits), Raider Drive (SH 10 to South Pipeline),
Harwood Road (FM 157 to North Main Street), and South Main Street (SH10 to
Pipeline Road).
• Construction -in -progress additions of $6,255,658 primarily consisted of Pipeline
Road ($4,782,507), Glade Road ($920,674), Public Works Facility ($377,547) and
various street projects.
• Construction -in -progress additions related to enterprise funds totaled $1,056,455
primarily consisting of Water Tank Painting ($406,757), channel stabilization
($374,912) and various drainage, water and wastewater projects.
• Completion of $2,450,243 in water and wastewater infrastructure including sewer
mains along Canyon Ridge, Sagebrush, Copher, East Fuller, and Pebble Creek; and
water mains along West Pipeline Road, Ash Lane, South Atkerson, Henslee, and
Vernon/Slaughter.
• Completion of a new fire station at a total cost of $2,242,901 and remodel of the
finance building at a total cost of $1,061,441.
• Completion of the Preserve at McCormick Park for a total cost of $1,168,427.
• Completion of $1,848,043 in improvements which completed Phase III of the Parks at
Texas Star.
City of Euless' Capital Assets (Net of Accumulated Depreciation)
Land
Buildings
Improvements other than
buildings
Machinery and equipment
Infrastructure
Construction in progress
Governmental
activities
2006 2005
$22,147,453 $21,777,989
30,690,681 28,431,644
Business -type
activities
2006 2005
$2,776,602 $2,776,602
2,954,987 3,078,644
Total
2006 2005
$24,924,055 $24,554,591
33,645,668 31,510,288
2,623,952 1,981,706 27,601,874 26,774,945 30,225,826 28,756,651
3,482,935 3,203,380 444,898 552,181 3,927,833 3,755,561
30,677,666 31,220,862 28,502,560 26,996,820 59,180,226 58,217,682
6,970,959 4,594,786 1,648,125 4,122,238 8,619,084 8,717,024
Total $96,593,646 $91,210,367 $63,929,046 $64,301,430 $160,522,692 $155,511,797
Additional information on the City's capital assets can be found in note 3 on pages 35-37
of this report.
Long-term debt. At the end of the current fiscal year, the City had total bonded debt
outstanding of $66,921,224. Of this amount, $54,156,224 comprises debt backed by the
11
full faith and credit of the government. The remainder of the City's debt, $12,765,000,
represents bonds secured solely by specific revenue sources (i.e. revenue bonds).
City of Euless' Outstanding Debt
General obligation bonds
Certificates of obligation
Revenue bonds
Deferred loss on refunding
bonds
Total
Governmental
activities
2006 2005
$ 28,820,000 $ 27,410,000
16,480,000 19,875,000
7,175,000 7,725,000
(1,204,778) (876,942)
$ 51,270,222 $ 54,133,058
Business -type
activities
2006 2005
$ 11,005,000 $ 11,095,000
- 210,000
5,590,000 5,880,000
(943,998) (872,017)
$ 15,651,002 $ 16,312,983
Total
2006 2005
$ 39,825,000 $ 38,505,000
16,480,000 20,085,000
12,765,000 13,605,000
(2,148,776) (1,748,959)
$ 66,921,224 $ 70,446,041
The City's total debt decreased by $3,524,817 or 5% during fiscal year 2006. This
decrease is primarily attributed to scheduled annual principal payments and savings from
bond refundings.
During the current fiscal year, the government refinanced some of its existing debt to take
advantage of favorable interest rates.
• The City issued $5,080,000 in general obligation refunding bonds to advance refund
$4,810,000 of outstanding debt, which resulted in a reduction in debt payments of
$454,374 over the next 21 years and an economic gain of $280,107.
• The City issued $1,630,000 in sales tax refunding bonds to advance refund
$1,645,000 of outstanding debt, which resulted in a reduction in debt payments of
$151,978 over the next 13 years and an economic gain of $109,744.
• The City issued $2,530,000 in waterworks and sewer system refunding bonds to
advance refund $2,445,000 of outstanding debt, which resulted in a reduction in debt
payments of $292,587 over the next 18 years and an economic gain of $182,814.
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
38-43.
Economic Factors and Next Year's Budgets and Rates
In the fiscal year 2006-07 budget, general fund revenues and transfers are budgeted to
increase by 11.4% from the 2005-06 budget year with property taxes making up about
28% of budgeted revenues and sales tax making up about 26% of budgeted revenues.
Certified assessed valuations as of September 1, 2006, increased 6.7% over the preceding
year.
12
As of September 30, 2006, the City's unemployment rate is 3.8% compared to the State
of Texas, which is 4.7%. In the FY2006-07 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. The center will include a Lowe's
Home Improvement Store, L.A. Fitness, Chili's, and several other retail shops and
restaurants. The car rental tax receipts are also projected to increase due to increased
rental rates at the DFW Airport Consolidated Car Rental Facility.
Budgeted expenditures remain fairly level with the prior year. Departments were asked
to hold increases in operating expenses to a minimum in order to fund a salary package,
three additional firefighters, three dispatchers, a court clerk, a juvenile case clerk, and a
parks field tech. 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 .4917770 to .48950 per
$100 of assessed value for fiscal year 2007.
The FY2006-07 budget anticipated a water rate increase of 130 and a wastewater rate
increase of 150 due to a pass -through from Trinity River Authority. However, the
Council has elected to forego such increase and absorb the additional cost for FY 2006-
07. The City budgeted to continue its "pay as you go" program in the water and sewer
fund which includes approximately $1,275,000 of infrastructure improvements.
The 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, economic conditions, increases in both fuel and utility
costs, and 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: Finance
Administrator, at 201 N. Ector Drive, Euless, Texas 76039, call (817) 685-1826, or e-
mail vrodriquez(a,ci.euless.tx.us.
13
CITY OF EULESS, TEXAS
GOVERNMENT -WIDE STATEMENT OF NET ASSETS
SEPTEMBER 30, 2006
Primary Government
Governmental Business -type
Activities Activities Total
ASSETS
Deposits and investments $ 36,115,330 $ 15,481,424 $ 51,596,754
Receivables (net of allowances for uncollectibles) 7,091,327 2,786,016 9,877,343
Internal balances 992,384 (992,384)
Inventory of supplies 10,004 236,435 246,439
Prepaid Items 22,229 27,551 49,780
Restricted assets:
Cash and cash equivalents 29,743 29,743
Investments - 4,286,343 4,286,343
Deferred charges 313,909 427,976 741,885
Capital assets:
Land and construction in progress 29,118,412 4,424,727 33,543,139
Other capital assets, net of accumulated depreciation 67,475,234 59,504,319 126,979,553
Total assets and other debits 141,138,829 86,212,150 227,350,979
LIABILITIES AND NET ASSETS
LIABILITIES:
Accounts payable 10,126,304 1,302,222 11,428,526
Accrued liabilities 871,509 476,999 1,348,508
Accrued interest payable 399,019 31,137 430,156
Deferred revenue 62,921 62,921
Money held in escrow - 1,309,942 1,309,942
Noncurrent liabilities:
Due within one year 3,262,297 905,000 4,167,297
Due in more than one year 49,650,244 14,746,002 64,396,246
Total liabilities 64,309,373 18,834,223 83,143,596
NET ASSETS:
Invested in capital assets, net of related debt 49,883,218 48,278,044 98,161,262
Restricted for debt service 1,448,741 - 1,448,741
Unrestricted 25,497,497 19,099,883 44,597,380
Total net assets $ 76,829,456 $ 67,377,927 $ 144,207,383
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, 2006
Program Activities
Primary government:
Govemmental 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
$ 4,892,346
1,169,285
15,122,831
2,211,083
16,252,071
2,741,754
42,389,370
15,285,026
884,763
4,003,035
1,842,550
22,015,374
$ 64.404.744
Fees, Fines and
Charges for
Services
$ 92,837
841,033
1,706,000
6,300
4,505,202
7,151,372
16,065,814
658,231
3,777,018
1,518,386
22,019,449
$ 29.170.821
Program Revenues
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
Net (Expense) Revenue and
Changes in Net Assets
Primary Government
Operating Grants Capital Grants Governmental Business - Type
and Contributions and Contributions Activities Activities
$ 93,630 $
498,601
592,231
$ 592.231
15
Total
$ (4,705,879) $ $ (4,705,879)
(328,252) (328,252)
(13,416,831) (13,416,831)
8,706 (2,196,077) (2,196,077)
(11,248,268) (11,248,268)
(2.741,754) (2,741,754)
8,706 (34,637,061) (34,637,061)
288,747
24,088
312,835
$ 321,541 (34,637,061)
$ 11,188,598 $
12,303,965
16,999,325
1,611,815
24,866
709,969
42,838,538
8,201,477
68,627,979
1,069,535
(202,444)
(226,017)
(324,164)
316,910
316910
1,069,535
(202,444)
(226,017)
(324,164)
16,910
(34, 320,151)
$ 11,188,598
12,303,965
16,999,325
771,888 2,383,703
271,707 271,707
24,866
2,908,437 2,908,437
(709,969)
3,242,063 46,080,601
3,558,973
63,818,954
11,760,450
132,446,933
$ 76,829,456 $ 67,377,927 $ 144,207,383
CITY OF EULESS, TEXAS
BALANCE SHEET - GOVERNMENTAL FUNDS
SEPTEMBER 30, 2006
Debt Streets Car Other Total
General Service CIP Rental Tax Governmental Governmental
ASSETS Fund Fund Fund Fund Funds Funds
Deposits and investments $ 9,280,535 $ 630,692 $ 5,315,550 $ 8,092,845 $ 8,173,475 $ 31,493,097
Receivables:
Property taxes 522,056 262,981 - 785,037
Accounts receivable and unbilled revenue 2,821,458 - 2,102,727 102,936 5,027,121
Interest receivable 102,684 3,469 11,852 95,665 38,229 251,899
Due from other funds - - 1,656,475 - 1,656,475
Due from other govemments 839,008 839,008
Prepaids and deposits 15,131 7,896 23,027
Inventories, at cost 10,004 - 10,004
Total assets
$ 12,751,868 $ 897,142 $ 5,327,402 $ 11,947,712 $ 9,161,544 $ 40,085,668
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable $ 1,041,475 $ $ 767,312 $ 7,648,136 $ 317,394 $ 9,774,317
Accrued salaries and wages 767,017 - 90,657 857,674
Deferred revenue 1,642,615 260,006 _ 1,902,621
Total liabilities 3,451,107 260,006 767,312 7,648,136 408,051 12,534,612
Fund Balances:
Reserved for:
Debt service - 637,136 950,618 1,587,754
Computer 251,838 - 251,838
Development agreements - 1,535,647 1,535,647
Betterment 8,280 - 8,280
Library 2,947 2,947
Injured animals 3,234 _ 3,234
Historical Preservation 1,245 1,245
9-1-1 Emergency System 22,805 - - 22,805
Technology 13,652 13,652
Campus remodel 6,200 - 6,200
Victim Assistance 2,000 - 2,000
Unreserved:
Designated for:
Contingency 500,000 - 500,000
Emergency 500,000 - - 500,000
Undesignated, reported in:
General fund 7,989,805 - 7,989,805
Special revenue funds - - 4,299,576 3,343,656 7,643,232
Capital projects funds - 4,560,090 2,922,327 7,482,417
Total fund balances 9,300,761 637,136 4,560,090 4,299,576 8,753,493 27,551,056
Total liabilities and fund balances $ 12,751,868 $ 897,142 $ 5,327,402 $ 11,947,712 $ 9,161,544 $ 40,085,668
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, 2006
Total fund balances - governmental funds $ 27,551,056
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.
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.
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.
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.
Revenues earned but not available within sixty days of the year end are not
recognized as revenue on the fund financial statements.
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.
96, 593,646
313,909
(399,019)
3,779,782
1,902,623
(52,912,541)
Net assets of governmental activities $ 76,829,456
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, 2006
Revenues:
General property tax
Gross receipts tax
General sales tax
Car rental tax
Fines and fees
Licenses and permits
Interest income
DEA revenues
Intergovernmental
Other revenues
Total revenues
Expenditures:
Current:
Culture and recreation
Development services
General and administrative
Highways and streets
Public safety
Debt service:
Principal
Interest and fiscal charges
Issuance costs
Capital outlay and maintenance
Total expenditures
Excess (deficiency) of
revenues over expenditures
Other financing sources (uses)
Issuance of debt
Payment to refunded bond escrow agent
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Fund balances, beginning of year
Fund balances, end of year
General
Fund
Debt
Service
Fund
$ 7,857,035 $ 3,409,580 $
4,202,363
7,749,599
4,089,056
806,476
416,206
315,487
606,441
64,453
975,692
26,042,663 4,449,725
2,726,198
999,827
6,362,748
656,964
13,901,743
Streets
CIP
Fund
368,061
220,450
Car
Rental Tax
Fund
$
12,580,371
289,487
588,511 12,869,858
2,255,000
2,312,099
61,321 -
- 6,312,300
24,647,480 4,628,420 6,312,300 8,351,753
8,351,753
1,395,183 (178,695) (5,723,789) 4,518,105
1,582,731
(279,858)
5,080,000
(5,159,564)
203,247
1,302,873 123,683
2,698,056 (55,012) (5,723,789)
6,602,705 692,148 10,283,879
$ 9,300,761 $ 637,136 $ 4,560,090
33,155
(5,924,583)
(5,891,428)
(1,373,323)
5,672,899
$ 4,299,576
Other
Governmental
Funds
$
216,591
4,554,366
330,605
77,461
212,464
5,391,487
1,353,627
117,787
145,575
1,432,395
535,000
284,835
36,489
1,684,963
5,590,671
(199,184)
1,630,000
(1,719,918)
3,717,152
(336,878)
3,290,356
3,091,172
5,662,321
$ 8,753,493
Total
Governmental
Funds
$ 11,266,615
4,418,954
12,303,965
12,580,371
4,089,056
806,476
1,468,812
77,461
315,487
2,015,047
49,342,244
4,079,825
1,117,614
14,860,076
656,964
15,334,138
2,790,000
2,596,934
97,810
7,997,263
49,530,624
(188,380)
6,710,000
(6,879,482)
5,536,285
(6,541,319)
(1,174,516)
(1,362,896)
28,913,952
$ 27,551,056
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, 2006
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
$ (1,362,896)
8,252,084
8,706
(3,209,864)
2,947,079
(32,441)
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. 26,651
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
944,154
628,004
$ 8,201,477
The Notes to the Basic Financial Statements
are an integral part of this statement. 19
CITY OF EULESS, TEXAS
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
SEPTEMBER 30, 2006
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 uncollectibles 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
Utility plant and equipment in service, at cost
Land
Building
Equipment
Improvements
Construction in progress
Waterworks and sanitary sewer system
Less accumulated depreciation
Net utility plant and equipment in service
Total non -current assets
TOTAL ASSETS
Water and
Sewer
$ 9,427,679
500,000
29,743
3,786,343
2,515,251
137,799
1,318
68,169
232,565
16,698,867
Business Type Activities - Enterprise Funds
Other
Drainage Golf Enterprise
Utility Course Funds
(1 of 2)
Governmental
Total Activities -
Enterprise Internal
Funds Service Funds
$ 1,811,375 $ 2,431,949 $1,810,421 $ 15,481,424 $ 4,622,233
500,000
29,743
3,786,343
39,393 84,147 3,490 2,642,281
5,849 87 143,735
6,999 19,234 27,551
121,428 46,838 236,435
- - 260,000 492,565
1,856,617 2,644,610 2,139,983 23,340,077
194,247 166,554 297,155 52,206
98,048 126,488 44,574 13,076
96,199 40,066 252,581 39,130
1,528,966 314,969 348,135 584,532
186,465 3,402,783 488,275
866,486 - 1,372,427 252,822
22,463,621 7,967,841 7,579,594
1,157,259 490,866 - -
50,908,834
54,648,010 23,269,456 13,091,186 8,905,223
23,143,805 6,749,853 4,067,234 2,023,937
31,504,205 16,519,603 9,023,952 6,881,286
31,600,404 16,559,669 9,276,533 6,920,416
$ 48,299,271 $18,416,286 $ 11,921,143 $9,060,399
710,162
282,186
427,976
2,776,602
4,077,523
2,491,735
38,011,056
1,648,125
50,908,834
99,913,875
35,984,829
63,929,046
64,357,022
$ 87,697,099
167,729
20,532
4,810,494
6,048,275
6,048,275
3,886,663
2,161,612
2,161,612
$ 6,972,106
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, 2006
LIABILITIES
(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
Current liabilities:
Payable from current assets:
Accounts payable $ 1,031,687 $ 71,728 $ 119,503 $ 79,304 $ 1,302,222 $ 105,161
Accrued salaries and wages 332,710 9,558 104,521 30,210 476,999 19,631
Current portion of bonds payable - 185,000 325,000 120,000 630,000 -
Accrued insurance claims - 241,829
Deferred revenue 60,448 60,448 -
Current obligations payable from
restricted assets:
Current portion of bonds payable 275,000 - 275,000 -
Accrued interest 31,137 31,137
Total current liabilities 1,670,534 266,286 609,472 229,514 2,775,806 366,621
Non -current liabilities:
Customer and escrow deposits 1,309,942 - 1,309,942
Bonds payable 4,409,853 600,000 8,529,594 1,206,555 14,746,002
Deferred revenue 2,473 - 2,473
Due to other funds - 1,889,040 260,000 2,149,040
Total non -current liabilities 5,722,268 600,000 10,418,634 1,466,555 18,207,457
Total liabilities 7,392,802 866,286 11,028,106 1,696,069 20,983,263 366,621
NET ASSETS
Invested in capital assets,
net of related debt 26,819,352 15,734,603 169,358 5,554,731 48,278,044 2,161,612
Unrestricted 14,087,117 1,815,397 723,679 1,809,599 18,435,792 4,443,873
Total net assets $ 40,906,469 $ 17,550,000 $ 893,037 $7,364,330 $66,713,836 $ 6,605,485
Reconciliaition to government -wide statements of net assets:
Adjustment to reflect the consolidation of internal
service funds' activities related to enterprise funds
Net assets of business -type activities
664,091
$67,377,927
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, 2006
Business Type Activities - Enterprise Funds Governmental
Other Total Activities -
Water and Drainage Golf Enterprise Enterprise Internal
Sewer Utility Course Funds Funds Service Funds
Operating revenues:
Water service $ 9,982,157 $ $ $ $ 9,982,157 $ -
Sewer service 5,116,248 5,116,248
Drainage fees - 658,231 658,231
Recreation fees 406,547 406,547 -
Insurance premiums - - - - - 3,033,889
Service fees and miscellaneous 967,409 3,777,018 1,111,839 5,856,266 546,939
Total operating revenues 16,065,814 658,231 3,777,018 1,518,386 22,019,449 3,580,828
Operating expenses:
General and administrative 387,609 387,609 287,357
Water production 5,580,763 5,580,763
Water distribution 579,639 - - 579,639
Utility engineering 500,342 500,342
Sewage collection and treatment 2,075,991 - - 2,075,991
Nondepartmental 2,990,632 - 2,990,632
Geographic information 336,998 - 336,998
Service center 1,033,981 1,033,981
Drainage - 257,920 257,920
Recreation classes - 395,010 395,010
Golf course - 1,225,302 1,225,302
Pro Shop - 400,469 400,469
Food and beverage - 990,108 990,108
Conference center 244,895 244,895
Cart operations 174,497 174,497
Athletic complex - 199,154 199,154
Softball complex - 915,676 915,676
Arbor Daze 730 730 _
Insurance costs - - - - 3,938,978
Depreciation 1,382,777 578,132 490,344 264,838 2,716,091 532,244
Amortization 14,757 13,356 58,901 6,700 93,714
Total operating expenses 14,883,489 849,408 3,584,516 1,782,108 21,099,521 4,758,579
Operating income (loss) 1,182,325 (191,177) 192,502 (263,722) 919,928 (1,177,751)
Nonoperating revenues (expenses):
Impact fees 271,707 271,707 -
Gain on sale of capital assets - 24,866
Investment income 602,244 83,025 32,063 54,556 771,888 143,004
Other revenue - 2,008,921 899,516 2,908,437 _
Interest on bonds (229,437) (35,355) (370,713) (41,319) (676,824) _
Total nonoperating revenues (expenses), net 644,514 47,670 1,670,271 912,753 3,275,208 167,870
Income (loss) before contributions
and transfers 1,826,839 (143,507) 1,862,773 649,031 4,195,136 (1,009,881)
Developer contributed assets 288,747 24,088 - 312,835 _
Transfers in 4,651 - 175,875 8,264 188,790 2,290,000
Transfers out (1,392,817) (34,894) (37,781) (8,264) (1,473,756)
Net income (loss) 727,420 (154,313) 2,000,867 649,031 3,223,005 1,280,119
Net assets, beginning of year 40,179,049 17,704,313 (1,107,830) 6,715,299 5,325,366
Net assets, end of year $ 40,906,469 $ 17,550,000 $ 893,037 $ 7,364,330 $ 6,605,485
Reconciliaition to government -wide statements 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
335,968
$ 3,558,973
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, 2006
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
Water and
Sewer
Business Type Activities - Enterprise Funds
Other
Drainage Golf Enterprise
Utility Course Funds
Total
Enterprise
Funds
Governmental
Activities -
Internal
Service Funds
$ 16,110,164 $ 656,582 $ 3,782,181 $ 1,521,123 $ 22,070,050 $
(10,912,002)
(3,059,828)
2,138,334
4,651
(1,392,817)
(1,388,166)
CAPITAL AND RELATED FINANCING ACTIVITIES
Impact fees
Interest paid on bonds
Reduction in bonds payable
Proceeds from bond issuances
Proceeds from gas lease
Loss on refunding bond issuance
Bond issuance costs
Purchase of utility plant and
equipment In service
Proceeds from sale of equipment
Net cash provided by (used in) capital
and related financing activities
INVESTING ACTIVITIES
Proceeds from other revenues
Proceeds from sale of investment securities
Interest received on investments
Net cash provided by
investing activities
Net change in cash and
cash equivalents
Cash and cash equivalents,
beginning of year
271,707
(229,437)
(195,000)
(57,603)
(1,566,994) (395,458)
(1,777,327) (610,813)
107,792 -
563,464 86,546
671,256 86,546
(355,903) (113,738)
9,813,325 1,925,113
(124,917)
(86,242)
445,423
(1,633,253)
(1,330,727)
818,201
(1,050,188) (13,720,360)
(470,438) (4,947,235)
497 3,402,455
175,875 26,264 206,790
(34,894) (37,781) (26,264) (1,491,756)
(34,894) 138,094 (1,284,966)
271,707
(35,355) (370,713) (41,319) (676,824)
(180,000) (210,000) (90,000) (675,000)
2,008,921 2,008,921
(57,603)
(25,528) (42,892) (2,030,872)
1,402,680 (174,211) (1,159,671)
- 149,919 149,919
- 107,792
32,063 54,556 736,629
32,063 204,475 994,340
2,391,038 30,761 1,952,158
40,911 1,030,063 12,809,412
Cash and cash equivalents,
end of year $ 9,457,422 $ 1,811,375 $ 2,431,949 $ 1,060,824 $ 14,761,570 $
The Notes to the Basic Financial Statements
are an integral part of this statement.
23
3,706,330
(3,887,172)
(123,981)
(304,823)
2,290,000
2,290,000
(896,536)
(896,536)
140,028
140,028
1,228,669
3,393,564
4,622,233
CITY OF EULESS, TEXAS
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
YEAR ENDED SEPTEMBER 30, 2006
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) $ 1,182,325 $ (191,177) $ 192,502 $ (263,722) $ 919,928 $ (1,177,751)
Adjustments to reconcile operating
income (loss) to net cash provided
by operating activities
Depreciation and amortization 1,397,534 591,488 549,245 271,538 2,809,805 532,244
Gain on disposal of equipment - - 24,866
Change in assets and liabilities:
Accounts receivable and
unbilled revenue 74,327 (1,649) 6,969 2,824 82,471 100,636
Prepaids and deposits 29,333 6,871 (7,873) 28,331 269,177
Inventory (3,859) - 7,691 (32,971) (29,139) -
Accounts payable (584,338) 45,274 36,629 28,690 (473,745) (86,958)
Accrued salaries and wages 72,989 1,487 20,100 2,011 96,587 4,416
Accrued insurance claims - - - 28,547
Customer and escrow deposits (22,177) (22,177) -
Deferred revenue (7,800) (1,806) - (9,606)
Net cash provided by
operating activities
$ 2,138,334 $ 445,423 $ 818,201 $ 497 $ 3,402,455 $ (304,823)
Noncash investing, capital and
financing activities
Developer contributed assets $ 288,747 $ 24,088 $ $ $ 312,835
Reconciliation of cash to balance sheet:
Cash -current $ 9,427,679 $ 1,811,375 $ 2,431,949 $ 1,810,421 $ 15,481,424
Cash - revenue bond debt service
Cash - capital projects account 29,743 29,743
Cash and cash equivalents $ 9,457,422 $ 1,811,375 $ 2,431,949 $ 1,810,421 $ 15,511,167
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, 2006
Agency
Funds
Assets:
Deposits and investments $ 2,313,114
Total assets $ 2,313,114
Liabilities:
Due to other entities $ 2,313,114
Total liabilities $ 2,313,114
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
Some organizations are included as component units because of their fiscal dependency
on the primary government. An organization is fiscally dependent on the primary
government if it is unable to adopt its budget, levy taxes, set rates or charges, or issue
bonded debt without approval by the primary government.
The following entities were found to be component units of the City and are included in
the combined financial statements:
Euless Development Corporation - The City created the Corporation for the purpose
of promoting parks, library services, and economic development within the City. The
Corporation's governing body is substantially the same as the governing body of the
City. There are seven directors, four of whom are members of the City Council and
make up a voting majority of the City Council. The remaining three members are
residents of the City. All Board members are appointed by the City Council. The
Corporation is authorized to sell bonds or other forms of indebtedness. Upon
dissolution of the Corporation, the assets of the Corporation shall be distributed to
the City. The Corporation provides all of its services to the City.
A blended presentation has been used to report the financial information of this
component unit. The financial statements for the Corporation were obtained from
the Board of Directors. The financial information for the Corporation is available
from the City.
Crime Control District - The City created the District for the purpose of proactively
combating rising crime rates by setting up additional crime prevention and
rehabilitation programs within the City. The District's governing body is substantially
the same as the governing body of the City. There are seven directors, four of
whom are members of the City Council and make up a voting majority of the City
Council. The remaining three members are residents of the City. All Board
members are appointed by the City Council. The District is authorized to sell bonds
or other forms of indebtedness. Upon dissolution of the District, the assets of the
District shall be distributed to the City. The District provides all of its services to the
City.
A blended presentation has been used to report the financial information of this
component unit. The financial statements for the District were obtained from the
Board of Directors. The financial information for the District is available 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, 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
fees and charges for support.
27
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED
Basis of Presentation — continued
The statement of activities demonstrates the degree to which the direct expenses of a
given program are offset by program revenues. Direct expenses are those that are
clearly identifiable with a specific program. Program revenues include 1) charges to
customers or applicants who purchase, use, or directly benefit from goods, services, or
privileges provided by a given program and 2) operating or capital grants and
contributions that are restricted to meeting the operational or capital requirements of a
particular program. Taxes and other items not properly included among program
revenues are reported instead as general revenues.
Fund Financial Statements:
The City segregates transactions related to certain functions or activities in separate
funds in order to aid financial management and to demonstrate legal compliance.
Separate statements are presented for governmental funds, proprietary funds and
fiduciary funds, even though the latter are excluded from the government -wide
financial statements. These statements present each major fund as a separate
column on the fund financial statements; all non -major funds are aggregated and
presented in a single column.
Governmental funds are those funds through which most governmental functions
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 long-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 streets projects.
28
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED
Basis of Presentation — continued
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.
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
accounting. The economic resources measurement focus means all assets and
liabilities (whether current or non -current) are included on the statement of net assets
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
and the operating statements present increases (revenues) and decreases (expenses)
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., when they become both measurable and available.
"Measurable" means the amount of the transaction can be determined and "available"
means collectible within the current period or soon enough thereafter to be used to pay
liabilities of the current period. The City considers property taxes as available if they 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 and 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 (including cash equivalents reported as restricted assets of $31,910 at
September 30, 2006) 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 $.4918 per $100 of assessed valuation ($.4950 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, 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, proprietary, and fiduciary fund financial statements and reported
as accrued salaries and wages (a current liability).
The estimated vacation liability expected to be satisfied with available financial
resources is included in accrued salaries and wages in the General Fund.
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, and adding back unspent
proceeds. Net assets are reported as restricted when there are limitations imposed on
their use either through the enabling legislations 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
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, 2006. At year end, the carrying
amount of the City's deposits was a credit balance of ($904,456) primarily consisting of
outstanding checks and the respective bank balances totaled $275,958. Of the total
bank balance, the Federal Depository Insurance Corporation (FDIC) covered $100,000.
The remainder was covered by collateral with a value of $1,491,996. The collateral is
held by The Independent Banker's Bank (TIB) in the city's name under a joint
safekeeping agreement with First National Bank -Mid Cities.
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
33
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
NOTE 2. DEPOSITS AND INVESTMENTS — CONTINUED
GASB 40 Disclosures — continued
Investments — continued
pools and no-load SEC registered money market funds consisting of any of these
securities listed.
The City's investments as of September 30, 2006, are:
Weighted
Average
Maturity
Investments Carrvinq Amount Fair Value (in days) Credit Risk
U.S. Agency
Securities $ 39,318,350 $ 39,254,884 178.79 AAA
Government
Pools:
Texpool 16,996,018 16,996,018 - 22 AAAm
Logic 64 64 17 AAA
No-load Money
Market Fund:
Financial Investors
Trust
Total
Interest Rate Risk
2,815,978
2,815,978
$ 59,130 410 $ 59.066.944
6 AAAm
In compliance with the City's Investment Policy, as of September 30, 2006, 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.
Credit Risk
In compliance with the City's Investment Policy, as of September 30, 2006, 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.
34
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
NOTE 3. CAPITAL ASSETS
Capital asset activity for the year ended September 30, 2006, was as follows:
Balance
September 30,
2005
Increase
Balance
September 30,
Decrease Adj/Transfer 2006
Governmental Activities
Capital assets not being
depreciated:
Land $ 21,777,989 $ 82,332 $ $ 287,132 $ 22,147,453
Construction in progress 4,594,786 6,255,658 (3,879,485) 6,970,959
Total Assets not being
depreciated: 26,372,775 6,337,990 (3,592,353) 29,118,412
Capital assets being
depreciated:
Buildings 35,544,610 988,597 2,315,745 38,848,952
Improvements
other than buildings: 3,675,519 - 810,917 4,486,436
Infrastructure 48,702,874 720,570 235,977 49,659,421
Machinery and equipment 5,017,922 213,633 (225,266) 229,714 5,236,003
Total capital assets being
depreciated: 92,940,925 1,922,800 (225,266) 3,592,353 98,230,812
Less
accumulated
depreciation:
Buildings (7,112,966) (1,045,305) -
Improvements
other than buildings (1,693,813) (168,671)
Infrastructure (17,482,012) (1,499,743) -
Machinery and equipment (3,611,862) (496,145) 193,326
Total
accumulated
depreciation: (29,900,653) ( 3,209,864) 193,326
Total capital assets being
depreciated, net 63,040,272 ( 1,287,064) (31,940)
Total governmental fund
capital assets, net 89,413,047 5,050,926 (31,940)
Internal Service Funds
Capital assets being
depreciated:
Machinery and equipment
Total internal service
assets being
depreciated:
5,361, 846
5,361, 846
947,786 (261,357)
947,786 (261,357)
35
3,592,353
(8,158,271)
(1,862,484)
(18,981,755)
(3,914,681)
(32,917,191)
65,313,621
94,432,033
6,048,275
6,048,275
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
NOTE 3. CAPITAL ASSETS - CONTINUED
Less accumulated depreciation:
Machinery and equipment
Total internal service funds
capital assets, net
Governmental Activities:
capital assets, net
Business -type activities:
Capital assets not being
depreciated:
Land
Construction in progress
Total Assets not being
depreciated:
Capital assets being
depreciated:
Buildings
Equipment
Improvements
Sanitary sewer system
Total capital assets being
depreciated:
Less accumulated depreciation:
Buildings
Equipment
Improvements
Sanitary sewer system
Total accumulated
depreciation:
Total capital assets being
depreciated, net
Business -type activities
capital assets, net
(3,564,526)
1,797,320
$ 91,210,367
Balance
September 30,
2005
(532,243) 210,107
415,543 (51,250)
$ 5,466,469 $(83,190)
Increase
Decrease
$ 2,776,602 $ - $
4,122,238 1,056,455
6,898,840 1,056,455
4,077,523
2,402,381
36,138,924
48,097,434
90,716,262
(998,879)
(1,850,200)
(9,363,979)
(21,100,614)
(33,313,672)
57,402,590
$ 64,301,430
80,219
58,089
1,152, 874
1,291,182
(123,657)
(241,571)
(1,045,203)
(1,305,660)
(44,934)
(44,934)
44,934
(2,716,091) 44,934
(1,424,909)
$(368,454) $
$
Adj/Transfer
(3,886,662)
2,161,613
$ 96,593,646
Balance
September 30,
2006
$ $ 2,776,602
(3,530,568) 1,648,125
(3,530,568) 4,424,727
54,069
1,814,043
1,658,526
3,526,638
3,526,638
$ (3,930)
4,077,523
2,491,735
38,011,056
50,908,834
95,489,148
(1,122,536)
(2,046,837)
(10,409,182)
(22,406,274)
(35,984,829)
59,504,319
$ 63,929,046
36
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
NOTE 3. CAPITAL ASSETS — CONTINUED
Depreciation expense was charged as direct expense to programs of the primary
government as follows:
Governmental activities:
General and administrative $ 351,500
Public safety 989,484
Development services 13,022
Culture and recreation 711,763
Highways and streets 1,609,857
Other 66.481
Total depreciation expense -Governmental activities $3.742.107
Business -type activities:
Water and sewer $ 1,382,777
Drainage Utility 578,132
Golf course 490,344
Other 264,838
Total depreciation expense -Business -type activities $ 2.716,091_
Outstanding commitments at September 30, 2006, under authorized construction contracts
were approximately $7,011,286. These outstanding commitments are to be financed by
available deposit and investment balances, which include proceeds from previous bond
issuances.
37
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
NOTE 4. LONG-TERM DEBT
At September 30, 2006, bonds payable consisted of the following individual issues:
Governmental Business -type
$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%
to 7.00%.
$4,300,000 Series 2000, General Obligation Bonds, dated
March 15, 2000, due in annual installments through 2008,
bearing interest rates of 5.15% to 6.65%.
$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%.
$8,600,000 Series 2000A, Revenue Certificates of
Obligation, dated May 1, 2000, due in annual installments
through 2008, bearing interest rates of 5.80% to 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% to 6.75%.
$6,000,000 Series 2001, General Obligation Bonds, dated
April 1, 2001, partially refunded in 2006, due in annual
installments through 2015, bearing interest rates of 4,50%
to 6.50%.
$1,630,000 Series 2001, Drainage Utility System Revenue
Refunding Bonds, dated October 15, 2001, due in annual
installments through 2010, bearing interest rates of 3.00%
to 4.00%.
$ 130,000 $
360,000
9,305,000
695,000
2,595,000
270,000
785,000
38
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 6.50%.
$6,430,000 Series 2002, Sales Tax Revenue Refunding
Bonds, dated June 14, 2002, due in annual installments
through 2015, bearing interest rates of 3.00% to 4.40%.
$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 15, 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 2.40% to 5.00%.
Governmental Business -type
2,360,000
5,415,000
3,955,000
3,005,000
4,120,000
13,825,000
11,005,000
2,005,000
39
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 26, 2006, due in annual installments
through 2021, bearing interest at 3.93%.
$1,630,000 Series 2006, Sales Tax Revenue Refunding
Bonds, dated January 26, 2006, due in annual installments
through 2019, bearning interest at 3.88%.
$2,530,000 Series 2006, Water and Sewer Refunding
Bonds, dated January 26, 2006, due in annual installments
through 2020, bearing interest 3.88%.
Governmental Business -type
5,080,000
1,630,000
2,530,000
$ 52,475,000 $ 16,595,000
The following is a summary of Tong -term debt transactions of the City for the year ended
September 30, 2006:
Balance Balance Due
Beginning End Within
of Year Increases Decreases of Year One Year
Govemmental Type Activities
General obligation bonds $ 27,410,000 $ 5,080,000 $ (3,670,000) $ 28,820,000 $ 1,470,000
Certificates of obligation 19,875,000 - (3,395,000) 16,480,000 925,000
Sales tax revenue bonds 7,725,000 1,630,000 (2,180,000) 7,175,000 635,000
Deferred loss on refunding bonds (876,942) (424,478) 96,642 (1,204,778) 96,942
Premium on bonds 474,169 - (38,799) 435,370 38,799
Compensated absences 1,174,508 1,045,921 (1,013,480) 1,206,949 96,556
Total govemmental type
activities $ 55,781,735 $ 7,331,443 $ (10,200,637) $ 52,912,541 $ 3,262,297
Business Type Activities
Water and sewer revenue
bonds $ 4,915,000 $ 2,530,000 $ (2,640,000) $ 4,805,000 $ 220,000
Drainage utility revenue bonds 965,000 - (180,000) 785,000 185,000
Tax and golf course 210,000 (210,000)
General obligation refunding
bonds 11,095,000 (90,000) 11,005,000 445,000
Deferred loss on refunding bonds (872,017) (128,729) 56,748 (943,998) 55,000
Total business type activities $ 16,312,983 $ 2,401,271 $ (3,063,252) $ 15,651,002 $ 905,000
Total govemment-wide activities $ 72,094,718 $ 9,732,714 $ (13,263,889) $ 68,563,543 $ 4,167,297
40
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
NOTE 4. LONG-TERM DEBT — CONTINUED
On January 26, 2006, the City issued $1,630,000 in Certificates of Obligation Refunding
bonds with an average interest rate of 3.88 percent to advance refund $1,000,000 of
outstanding 1996 Series bonds with an average interest rate of 5.1 percent, and $645,000 of
outstanding 1999 Series bonds with an average interest rate of 6.125 percent. The net
proceeds of $1,719,918 ($1,630,000 par amount of bonds plus Debt Service Fund
contribution of $134,440 less $44,522 of underwriting fees, insurance and other issuance
costs) were used to purchase U.S. Securities. Those securities were deposited in an
irrevocable trust with an escrow agent to provide for all future debt service payments on the
1996 and 1999 Series bonds. As a result the 1996 and 1999 Series bonds are considered
defeased and the liability for those bonds has been removed from long-term debt.
On January 26, 2006, the City issued $5,080,000 in General Obligation Refunding Bonds
with an average interest rate of 3.93 percent to advance refund $2,520,000 of outstanding
2001 Series Bonds with an average interest rate of 5.1 percent and $2,290,000 of
outstanding Certificate of Obligation 2001 Series bonds with an average interest rate of 5.1
percent. The net proceeds of $5,159,564 ($5,080,000 par amount of bonds plus Debt
Service Fund contribution of $136,578 less $55,000 of underwriting fees, insurance and other
issuance costs) were used to purchase U.S. Securities. Those securities were deposited in
an irrevocable trust with an escrow agent to provide for all future debt service payments on
the 2001 Series General Obligation Bonds and Certificate of Obligation bonds. As a result,
the 2001 Series General Obligation Bonds and Certificate of Obligation bonds are considered
defeased and the liability for those bonds has been removed from long-term debt.
On January 26, 2006, the City issued $2,530,000 in Waterworks and Sewer System Revenue
Refunding Bonds with an average interest rate of 3.88 percent to advance refund $2,445,000
of outstanding 2000 Series Waterworks and Sewer System Revenue Bonds with an average
interest rate of 5.5 percent. The net proceeds of $2,543,630 ($2,530,000 par amount of
bonds plus Debt Service Fund contribution of $57,603 less $43,874 of underwriting fees,
insurance and other issuance costs) were used to purchase U.S. Securities. Those
securities were deposited in an irrevocable trust with an escrow agent to provide for all future
debt service payments on the 2000 Series bonds. As a result, the 2000 Series bonds are
considered defeased and the liability for those bonds has been removed from long-term debt.
The advance refundings resulted in a difference between the reacquisition price and the net
carrying amount of the old debt of $553,207. This difference, reported in the accompanying
financial statements as a deduction of bonds payable, is being charged to operations through
the year 2021 using the effective interest method. The City completed the advance
refundings to reduce the total debt service payments over the next 15 years by $898,939 and
to obtain an economic gain (difference between the present values of the old and new debt
service payments) of $572,665.
In prior years, the City issued $13,900,000 in General Obligation Refunding Bonds to
defease $4,090,000 in Certificates of Obligation then outstanding, $3,235,000 in General
Obligation Bonds then outstanding, and $6,415,000 in Certificates of Obligation then
outstanding. Of the $4,090,000 and $6,415,000 in Certificates of Obligation and $3,235,000
in General Obligation Bonds originally defeased, $4,090,000, $6,415,000, and $3,235,000
remains outstanding at September 30, 2006, respectively.
41
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
NOTE 4. LONG-TERM DEBT — CONTINUED
In prior years, the City issued $5,490,000 in General Obligation Refunding Bonds to defease
$1,560,000 in General Obligation Bonds then outstanding and $3,625,000 in Certificates of
Obligation then outstanding. Of the $1,560,000 of General Obligation bonds and $3,625,000
of Certificates originally defeased, $465,000 and $3,380,000 remains outstanding at
September 30, 2006.
In prior years, the City issued $11,095,000 in General Obligation Refunding Bonds to
defease $8,495,000 in Tax and Golf Course Surplus Revenue Certificates of Obligation then
outstanding and $1,390,000 of Tax and Softball Park Surplus Revenue Certificates of
Obligation then outstanding. Of the $8,495,000 and $1,390,000 of certificates originally
defeased, $8,495,000 and $1,295,000 remains outstanding at September 30, 2006.
Annual Requirements to Retire Debt Obligations
The annual aggregate maturities for each bond type for the years subsequent to
September 30, 2006, are as follows:
General Obligation Bonds:
Governmental Activities Business Type Activities
2007
2008
2009
2010
2011
2012-2016
2017-2021
2022-2026
2027-2031
Principal
$ 1,470,000
1,365,000
1,635,000
1,695,000
1,755,000
10,375,000
9,835,000
690,000
Interest
$ 1,190,447
1,135,626
1,084,447
1,027,125
964,129
3,626,610
1,128,647
52,750
Principal
$ 445,000
455,000
465,000
480,000
485,000
2,725,000
2,365,000
2,915,000
670,000
Interest
$ 395,657
386,657
376,876
365,644
352,975
1,515,275
1,045,266
488,454
15,075
Total
$ 3,501,104
3,342,283
3,561,323
3,567,769
3,557,104
18,241,885
14,373,913
4,146,204
685,075
$ 28,820,000 $ 10,209,781 $ 11,005,000 $ 4,941,879 $ 54,976,660
Certificates of Obligation:
Governmental Activities
2007
2008
2009
2010
2011
2012-2016
2017-2021
2022-2026
Principal
$ 925,000
980,000
665,000
700,000
750,000
4,130,000
4,145,000
4,185,000
$16,480,000
Business Type Activities
Interest Principal
$ 1,096,075 $
1,033,262
985,035
946,724
905,850
3,806,900
2,460,599
754,751
Interest
$
$11,989,196 $ $
Total
$ 2,021,075
2,013,262
1,650, 035
1,646,724
1,655,850
7,936,900
6,605,599
4,939,751
$28,469,196
42
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
NOTE 4. LONG-TERM DEBT — CONTINUED
Annual Requirements to Retire Debt Obligations — continued
Revenue Bonds:
2007
2008
2009
2010
2011
2012-2016
2017-2021
2022-2026
Governmental Activities
Principal
$ 635,000
665,000
690,000
715,000
755,000
3,510,000
205,000
$ 7,175,000
Interest
$ 289,665
265,716
239,987
211,938
183,512
433,279
15,908
Business Type Activities
Principal
$ 405,000
425,000
445,000
465,000
270,000
1,505,000
1,615,000
460,000
$ 1,640,005 $ 5,590,000
Interest
$ 233,979
216,497
198,735
181,952
163,556
650,771
308,976
46,750
$ 2,001,216
Total
$ 1,563,644
1,572,213
1,573,722
1,573,890
1,372,068
6,099,050
2,144, 884
506,750
$ 16,406,221
Water and Sewer Revenue Bonds authorized and unissued as of September 30, 2006,
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.
In accordance with the water and sewer revenue and refunding bond ordinances, the
following special 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.
Should the reserve for bond debt service and/or reserve for bond retirement 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, 2006. 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).
The liability for compensated absences has typically been liquidated by the General Fund.
43
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 (the "TRA") whereby the TRA agrees to provide supplemental water and
sewage treatment for consideration. Payments by the City are based on metered usage at
rates designed to charge the City a prorata share of the TRA's annual operating and
maintenance expenses, principal and interest requirement on bonds issued by the TRA.
Payments under this contract approximated $6,400,000 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 the various funds are approved supplements to the
operations of those funds.
Due to/from other funds
Receivable Fund
Water and Sewer Fund
Car Rental Fund
Softball Complex Fund
Payable Fund Amount
Golf Course Fund $ 232,565
Golf Course Fund 1,656,475
Athletic Complex Fund 260,000
$ 2,149,040
Due to/from's are primarily used as interfund loans for the following:
• Golf Course to Water and Sewer for capital improvements.
• Golf Course to Car Rental for capital improvements and equipment purchases.
• Athletic Complex to Softball Complex for reimbursement of bond payments.
44
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, 2006 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
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
Insurance Fund
Health Insurance Fund
Transfers Out
Car Rental Tax Fund
Water and Sewer Fund
Drainage Utility Fund
Car Rental Tax Fund
Half -Penny Sales 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
Water and Sewer Fund
Car Rental Tax Fund
Transfers are primarily used to move funds from:
Amount
$ 730,020
817,817
34,894
203,247
25
33,130
40,835
175,000
3,501,316
14,022
161,853
8,264
4,651
290,000
225,000
225,000
350,000
1,200,000
$ 8,015,074
• The Car Rental Fund, the W&S, 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.
45
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 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 W&S 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 W&S fund to the risk management fund for property and
liability insurance.
• The W&S 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 medical 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 and are available to pay claims, claim reserves and administrative costs of the
program. An excess coverage insurance policy covers individual claims in excess of
$100,000 and aggregate claims in excess of $3,637,466. During fiscal 2006, the City and
the City's employees contributed approximately $3,509,043 and $816,137, 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.
During fiscal 2005, the City was also 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.
46
CITY OF EULESS, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
NOTE 8. RISK MANAGEMENT — CONTINUED
An excess coverage insurance policy covered individual claims in excess of $300,000.
During fiscal 2005, the City contributed approximately $256,270 to the fund for workers'
compensation.
Changes in the balances of claims liabilities are as follows:
2006 2005
Unpaid claims, beginning of year $ 213,282 $ 204,418
Incurred claims 3,239,293 2,820,166
Paid claims 3,210.746 2,811.302
Unpaid claims, end of year $ 241,829 $ 213,282
The City had no significant reductions in insurance coverage from the year ended
September 30, 2005. Settlement amounts have not exceeded insurance coverage for the
year ended September 30, 2006 or any of the three preceding years ended September 30.
NOTE 9. EMPLOYEE RETIREMENT SYSTEM
Plan Description
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, 2005 valuations are contained in the 2005 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 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.
47
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 12/31/2005
Actuarial Value of Assets $57,323,394
Actuarial Accrued Liability $70,878,494
Percentage Funded 80.9%
Unfunded Actuarial Accrued Liability (UAAL) $13,555,100
Annual Covered Payroll $18,324,792
UAAL as a Percentage of Covered Payroll 74.0%
Net Pension Obligation (NPO) at the Beginning of Period $
48
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
Total annual pension cost
Contributions made
Increase in NPO
NPO at the end of the period
Trend information for the past three years for TMRS is as follows:
Year
2003
2004
2005
Annual
Pension Cost
(APCI
$ 2,311,438
2,521,328
2,457,021
The following actuarial assumptions were used:
Actuarial Cost Method
Amortization Method
Remaining Amortization
Asset Valuation Method
Investment Rate of Return
Projected Salary Increases
Includes Inflation at
Cost of Living Adjustments
Percentage
• of APC
Contributed
100 %
100
100
NOTE 10. EXCESS OF EXPENDITURES OVER APPROPRIATIONS
$ 2,457,021
$ 2,457,021
(2,457,021)
Net Pension
Obligation
Unit Credit
Level Percent of Payroll
25 years — Open Period
Amortized Cost
7%
None
3.5%
None
As of September 30, 2006, the following individual funds had an excess of expenditures
over appropriations:
General Fund $ (244,444)
Car Rental Tax Fund (1,685,087)
Hotel/Motel Fund (104)
Police Drug Enforcement Fund (7,067)
Public Safety Grant Funds (14,248)
49
REQUIRED SUPPLEMENTARY INFORMATION
CITY OF EULESS, TEXAS
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF FUNDING PROGRESS FOR PARTICIPATION IN TEXAS
MUNICIPAL RETIREMENT SYSTEM
SEPTEMBER 30, 2006
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
12/31/03 $ 50,659,933 $ 63,214,918 80.14% $ 12,554,985 $ 17,207,460 72.96%
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%
50
CITY OF EULESS, TEXAS
GENERAL FUND
BUDGETARY COMPARISON SCHEDULE
YEAR ENDED SEPTEMBER 30, 2006
REVENUES:
General property tax:
Current and delinquent taxes
Penalty and interest
Gross receipts tax:
Telephone Line Access Fee
Texas Utilities Electric Company
Texas Utility Gas Company
Cable TV
City Garbage Service
Water and Sewer system
Others
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
Licenses and permits:
Building permits
Miscellaneous permits
Minimum housing
Interest income
Intergovernmental
Other revenues:
Rental income
Swimming pools
Miscellaneous income
Budgeted Amounts
Original Final
$ 7,706,801
58,000
7,764,801
450,000
1,485,000
213,000
230,000
130,000
705,142
92,700
3,305,842
6,284,821
2,572,500
200,000
14,500
500,000
38,000
15,000
190,000
3,530,000
400,000
198,500
91,000
689,500
215,000
298,016
145,556
15,000
97,000
257,556
Total revenues $ 22,345,536
$ 7,706,801
58,000
7,764,801
450,000
1,485,000
213,000
230,000
130,000
705,142
92,700
3,305,842
6,284,821
2,572,500
200,000
14,500
500,000
38,000
15,000
190,000
3,530,000
400,000
198,500
91,000
689,500
215,000
298,016
145,556
15,000
97,000
Actual
GAAP
Basis
$ 7,775,599
81,436
7,857,035
416,533
2,045,502
399,624
295,858
130,318
817,817
96,712
4,202,364
7,749,599
2,873,250
181,128
16,998
788,007
37,360
11,675
180,638
4,089,056
517,061
198,502
90,913
806,476
416,206
315,487
173,183
15,594
417,664
606,441
Variance with
Final Budget
Positive
(Negative)
$ 68,798
23,436
92,233
(33,467)
560,502
186,624
65,858
318
112,675
4,012
896,523
1,464,778
300,750
(18,872)
2,498
288,007
(640)
(3,325)
(9,362)
559,056
117,061
2
(87)
116,977
201,206
17,471
27,627
594
320,664
257,556 348,885
$ 22,345,536 $ 26,042,665 $ 3,697,130
51
CITY OF EULESS, TEXAS
GENERAL FUND
BUDGETARY COMPARISON SCHEDULE
YEAR ENDED SEPTEMBER 30, 2005
(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)
2,815,073 2,815,073 2,726,194 88,879
1,048,239 1,048,239 999,827 48,412
5,713,247 5,713,247 6,362,762 (649,515)
732,435 732,435 656,960 75,475
14, 094, 043 14, 094, 043 13, 901, 738 192,305
24,403,037 24,403,037 24,647,481 (244,444)
(2,057,501) (2,057,501) 1,395,183 3,452,685
Other financing sources (uses):
Transfers in 1,466,162 1,466,152 1,582,730 116,578
Transfers out (248,000) (248,000) (279,858) (31,858)
Total other financing
sources (uses) 1,218,162 1,218,152 1,302,873 84,721
Net change in fund balance (839,339) (839,349) 2,698,056 3,537,406
Fund balance, beginning of year 6,602,705 6,602,705 6,602,705 -
Fund balance, end of year $ 5,763,366 $ 5,763,356 $ 9,300,761 $ 3,537,406
52
CITY OF EULESS, TEXAS
BUDGETARY COMPARISON SCHEDULE
CAR RENTAL TAX SPECIAL REVENUE FUND
YEAR ENDED SEPTEMBER 30, 2006
Revenues:
Car rental tax
Interest income
Total revenues
Expenditures:
General and administrative
Total expenditures
Other financing sources (uses):
Transfers in
Transfers out
Total other
financing sources (uses)
Net change in fund balance
Fund balance, beginning of year
Fund balance, end of year
Variance with
Actual Final Budget
Budgeted Amounts GAAP Positive
Original Final Basis (Negative)
$ 10,000,000 $ 10,000,000 $ 12,580,371 $ 2,580,371
150,000 150,000 289,487 139,487
10,150,000 10,150,000 12,869,858 2,719,858
6,666,666 6,666,666 8,351,753 (1,685,087)
6,666,666 6,666,666 8,351,753 (1,685,087)
40,774 40,774 33,155 (7,619)
(4,724,583) (5,924,583) (5,924,583)
(4,683,809) (5,883,809) (5,891,428) (7,619)
(1,200,475) (2,400,475) (1,373,323) 1,027,152
5,672,901 5,672,901 5,672,899
$ 4,472,426 $ 3,272,426 $ 4,299,576 $ 1,027,150
53
CITY OF EULESS, TEXAS
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED SEPTEMBER 30, 2006
NOTE 1. BUDGET BASIS OF ACCOUNTING
The City Council follows these 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 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 Schedule — General Fund and Car Rental Tax Special
Revenue Fund presents a comparison of budgetary data to actual results. The General
Fund and Car Rental Tax Special Revenue Fund utilizes the same basis of accounting
for both budgetary purposes and actual results.
54
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.
55
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 Construction in Progress 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.
56
CITY OF EULESS, TEXAS
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
SEPTEMBER 30, 2006
ASSETS
Deposits and investments
Accounts receivable
Accrued interest receivable
Prepaids
Due from other governments
Total assets
LIABILITIES AND FUND BALANCES
LIABILITIES:
Accounts payable
Accrued salaries and wages
Due to other funds
Total liabilities
Fund Balances:
Reserved:
Reserve for debt service
Reserve for historical
preservation
Reserve for development
agreements
Unreserved, undesignated
Total fund balances
Total liabilities and fund balances
Hotel/
Motel
Fund
$ 127,221
68,357
Police
Drug
Enforce-
ment
Fund
Special Revenue Funds
Crime
Half Control and
Penny Prevention
Sales Tax District
Fund Fund
$ 314,588 $ 2,495,943 $ 565,081
4,985 1,999
7,896
582,111 256,897
Public
Safety
Grant
Funds
Park
Improvements
Certificates of
Obligation
Total Fund (1990)
$ 36,008 $ 3,538,841 $ 125
34,579 102,936
6,984
7,896 -
839,008
$ 195,578 $ 314,588 $ 3,090,935 $ 823,977 $ 70,587 $ 4,495,665 $ 125
$ 101,149 $ 7,125 $ 1,215 $ 109,489 $
36,279 52,105 2,273 90,657
137,428 59,230
950,618
1,245
3,488 200,146
950,618
1,245
194,333 314,588 2,002,889 764,747 67,099 3,343,656 125
195,578 314,588 2,953,507 764,747 67,099 4,295,519 125
$ 195,578 $ 314,588 $ 3,090,935 $ 823,977 $ 70,587 $ 4,495,665 $ 125
57
Capital Projects Funds
Half -Penny Police G.O.
Street Sales Tax Developers' Car Rental Facility Capital Total Nonmajor
Assessments Construction Contribution Capital Projects Construction Projects Governmental
Fund in Progress Fund Fund Fund Fund Totals Funds
$ 44,970 $ 401,450 $ 1,526,340 $ 2,483,258 $ 134,547 $ 43,944 $ 4,634,634 $ 8,173,475
102,936
9,307 21,938 31,245 38,229
7,896
839,008
$ 44,970 $ 401,450 $ 1,535,647 $ 2,505,196 $ 134,547 $ 43,944 $ 4,665,879 $ 9,161,544
$
$ 129 $ 207,776 $ $ $ 207,905 $ 317,394
90,657
129 207,776 207,905 408,051
950,618
1,245
- 1,535,647 1,535,647 1,535,647
44,970 401,321 - 2,297,420 134,547 43,944 2,922,327 6,265,983
44,970 401,321 1,535,647 2,297,420 134,547 43,944 4,457,974 8,753,493
$ 44,970 $ 401,450 $ 1,535,647 $ 2,505,196 $ 134,547 $ 43,944 $ 4,665,879 $ 9,161,544
58
CITY OF EULESS, TEXAS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED SEPTEMBER 30, 2006
Special Revenue Funds
Police Crime Park
Drug Half Control and Public Improvements
Hotel/ Enforce- Penny Prevention Safety Certificates of
Motel ment Sales Tax District Grant Obligation
Fund Fund Fund Fund Funds Totals Fund (1990)
Revenues:
Gross receipts tax $ 216,591 $ $ - $ - $
General sales tax - 3,099,840 1,454,526
Interest income 4,401 12,709 95,201 18,535
DEA revenues - 77,461
Other revenues 24 -
112,509
$ 216,591 $
4,554,366
130,846
77,461
112,533
Total revenues 221,016 90,170 3,195,041 1,473,061 112,509 5,091,797
Expenditures:
Culture and recreation 1,223,987 1,223,987
Development services - 117,787 - 117,787
General and administrative 104 145,471 145,575 -
Highways and streets - - - -
Public safety 12,067 1,287,901 132,427 1,432,395
Debt service
Principal - 535,000 535,000
Interest and fiscal charges 284,835 284,835 -
Issuance costs 36,489 36,489
Capital outlay
and maintenance - 3,147
Total expenditures 104 12,067 2,343,569 1,287,901 132,427 3,776,068 3,147
Other financing sources (uses):
Issuances of debt 1,630,000 - 1,630,000
Transfers in 40,836 40,836
Payment to refunded bond escrow agent - (1,719,918) - (1,719,918)
Transfers out (161,853) (175,025) (336,878)
Total other
financing sources (uses) (161,853) (264,943) 40,836 (385,960)
Net change in fund balances 59,059 78,103 586,529 185,160 20,918 929,769 (3,147)
Fund balance,
beginning of year 136,519 236,485 2,366,978 579,587 46,181 3,365,750 3,272
Fund balance, end of year $ 195,578 $ 314,588 $ 2,953,507 $ 764,747 $ 67,099 $ 4,295,519 $ 125
59
Capital Projects Funds
Half -Penny Police G.O.
Street Sales Tax Developers' Car Rental Facility Capital Total Nonmajor
Assessments Construction Contribution Capital Projects Construction Projects Governmental
Fund in Progress Fund Fund Fund Fund Totals Funds
$ $ $ $ $ - $ $ $ 216,591
- - - - - 4,554,366
19,879 59,191 118,194 1,292 1,203 199,759 330,605
- - - - - 77,461
6,300 93,631 - 99,931 212,464
19,879 65,491 211,825 1,292 1,203 299,690 5,391,487
129,640 - 129,640 1,353,627
- - 117,787
145,575
1,432,395
535,000
284,835
36,489
1,681,816 1,684,963 1,684,963
129,640 1,681,816 1,814,603 5,590,671
- 1,630,000
175,000 3,501,316 3,676,316 3,717,152
- (1,719,918)
(336,878)
175,000 3,501,316 3,676,316 3,290,356
65,239 65,491 2,031,325 1,292 1,203 2,161,403 3,091,172
44,970 336,082 1,470,156 266,095 133,255 42,741 2,296,571 5,662,321
$ 44,970 $ 401,321 $ 1,535,647 $ 2,297,420 $ 134,547 $ 43,944 $ 4,457,974 $ 8,753,493
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, 2006
Variance with
Actual Final Budget
Budgeted Amounts GAAP Positive
Original Final Basis (Neptive1
Revenues:
Gross receipts tax $ 150,000 $ 150,000 $ 216,591 $ 66,591
Other revenues - - 24 24
Interest income 1,000 1,000 4,401 3,401
Total revenues 151,000 151,000 221,016 70,016
Expenditures:
General and administrative - 104 (104)
Total expenditures 104 (104)
Other financing sources (uses):
Transfers out (161,853) (161,853) (161,853)
Total other
financing sources (uses) (161,853) (161,853) (161,853)
Net change in fund balance (10,853) (10,853) 59,059 69,912
Fund balance, beginning of year 136,519 136,519 136,519
Fund balance, end of year $ 125,666 $ 125,666 $ 195,578 $ 69,912
61
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, 2006
Variance with
Actual Final Budget
Budgeted Amounts GAAP Positive
Original Final Basis INe.gative)
Revenues:
DEA revenues $ $ - $ 77,461 $ 77,461
Interest income 5,000 5,000 12,709 7,709
Total revenues 5,000 5,000 90,170 85,170
Expenditures:
Public safety 5,000 5,000 12,067 (7,067)
Total expenditures 5,000 5,000 12,067 (7,067)
Other financing sources (uses):
Transfers out
Total other
financing sources (uses)
Net change in fund balance - 78,103 78,103
Fund balance, beginning of year 236,485 236,485 236,485
Fund balance, end of year $ 236,485 $ 236,485 $ 314,588 $ 78,103
62
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, 2006
Revenues:
General sales tax
Interest 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
$ 2,513,929
30,000
2,543,929
424,190
1,202,863
183,643
605,000
337,655
2,753,351
(182,644)
(182,644)
(392,066)
2,366,978
$ 1,974,912
$ 2,513,929
30,000
2,543,929
424,190
1,202,863
183,643
605,000
337,655
2,753,351
Actual
GAAP
Basis
Variance with
Final Budget
Positive
(Negative)
$ 3,099,840 $ 585,911
95,201 65,201
3,195,041
1,223,987
117,787
145,471
535,000
36,489
284,835
2,343,569
651,112
(799,797)
1,085,076
38,172
70,000
(36,489)
52,820
409,782
1,630,000 (1,630,000)
- (1,719,918) 1,719,918
(182,644) (175,025) 7,619
(182,644)
(392,066)
2,366,978
$ 1,974,912
(264,943) 97,537
586,529 978,595
2,366,978
$ 2,953,507 $ 978,595
63
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, 2006
Variance with
Actual Final Budget
Budgeted Amounts GAAP Positive
Original Final Basis (Negative)
Revenues:
General sales tax $ 1,170,625 $ 1,170,625 $ 1,454,526 $ 283,901
Other revenue -
Interest income 9,500 9,500 18,535 9,035
Total revenues 1,180,125 1,180,125 1,473, 061 292,936
Expenditures:
Public safety 1,351,508 1,351,508 1,287,901 63,607
Total expenditures 1,351,508 1,351,508 1,287,901 _ 63,607
Net change in fund balance (171,383) (171,383) 185,160 356,543
Fund balance, beginning of year 579,587 579,587 _ 579,587
Fund balance, end of year $ 408,204 $ 408,204 $ 764,747 $ 356,543
64
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, 2006
Variance with
Actual Final Budget
Budgeted Amounts GAAP Positive
Original Final Basis (Negative)
Revenues:
Other revenues $ 108,179 $ 108,179 $ 112,509 $ 4,330
Interest income
Total revenues 108,179 108,179 112,509 4,330
Expenditures:
Public safety 118,179 118,179 132,427 (14,248)
Total expenditures 118,179 118,179 132,427 (14,248)
Other financing sources (uses):
Transfers in 10,000 10,000 40,836 30,836
Total other
financing sources (uses) 10,000 10,000 40,836 30,836
Net change in fund balance - 20,918 20,918
Fund balance, beginning of year 46,181 46,181 46,181
Fund balance, end of year $ 46,181 $ 46,181 $ 67,099 $ 20,918
65
NON MAJOR PROPRIETY FUNDS
Enterprise funds are used to account for operations that are financed and operated in a manner
similar to private business enterprises - where the intent of the government's council is that the
costs of providing goods or services to the general public on a continuing basis be financed or
recovered 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
athletic complex, supported primarily by user charges.
Arbor Daze Fund — to account for the receipts and disbursements of the Arbor
Daze Festival, supported primarily by user charges.
66
CITY OF EULESS, TEXAS
COMBINING BALANCE SHEET
NON -MAJOR PROPRIETARY FUNDS
SEPTEMBER 30, 2006
Recreation Softball Athletic Arbor
Classes Complex Complex Daze
ASSETS
(1 of 2)
Totals
Current assets:
Deposits and investments $ 300,698 $ 440,274 $ 952,302 $ 117,147 $ 1,810,421
Accounts receivable and unbilled revenue 2,042 1,448 - - 3,490
Prepaids and deposits 6,230 13,004 - 19,234
Inventory - 43,726 3,112 - 46,838
Due from other funds 260,000 - 260,000
Total current assets 308,970 758,452 955,414 117,147 2,139,983
Non -current assets:
Bond issuance cost 37,947 14,259 52,206
Less accumulated amortization 5,692 7,384 13,076
Net bond issuance cost 32,255 6,875 - 39,130
Utility plant and equipment in service, at cost
Land 584,532 - 584,532
Building - 328,180 160,095 488,275
Equipment 70,908 108,812 73,102 - 252,822
Improvements - 608,896 6,970,698 7,579,594
Construction in progress - -
70,908 1,630,420 7,203,895 8,905,223
Less accumulated depreciation 26,582 482,080 1,515,275 2,023,937
Net utility plant and equipment in service 44,326 1,148,340 5,688,620 6,881,286
Total non -current assets 44,326 1,180,595 5,695,495 6,920,416
TOTAL ASSETS 353,296 1,939,047 6,650,909 117,147 9,060,399
67
CITY OF EULESS, TEXAS
COMBINING BALANCE SHEET
NON -MAJOR PROPRIETARY FUNDS
SEPTEMBER 30, 2006
Recreation Softball Athletic Arbor
Classes Complex Complex Daze
(2 of 2)
Totals
LIABILITIES AND FUND EQUITY
Current liabilities:
Payable from current assets:
Accounts payable $ 7,624 $ 55,002 $ 16,678 $ - $ 79,304
Accrued salaries and wages 861 28,026 1,323 - 30,210
Current portion of bonds payable 120,000 120,000
Total current liabilities 8,485 203,028 18,001 229,514
Non -current liabilities:
Bonds payable - 1,206,555 1,206,555
Due to other funds - 260,000 260,000
Total non -current liabilities 1,206,555 260,000 1,466,555
Total liabilities 8,485 1,409,583 278,001 1,696,069
Net Assets:
Invested in capital assets, net of debt 44,326 (178,215) 5,688,620 5,554,731
Unrestricted 300,485 707,679 684,288 117,147 1,809,599
Total net assets $ 344,811 $ 529,464 $ 6,372,908 $ 117,147 $ 7,364,330
68
CITY OF EULESS, TEXAS
COMBINING STATEMENT OF REVENUES, EXPENSES, AND
CHANGES IN FUND NET ASSETS
NON -MAJOR PROPRIETARY FUNDS
YEAR ENDED SEPTEMBER 30, 2006
Operating revenues:
Recreation fees
Service fees and miscellaneous
Total operating revenues
Operating expenses:
Recreation classes
Athletic complex
Softball complex
Arbor Daze
Depreciation
Amortization
Total operating expenses
Operating income (loss)
Nonoperating revenues (expenses)
Investment income
Other Revenue
Interest on bonds
Recreation Softball
Classes Complex
$ 406,547 $ - $
Athletic
Complex
- 876,672 232,091
406,547 876,672 232,091
395,010
10,807
405,817
730
13,530
Total nonoperating revenues
(expenses), net 13,530
Income (loss) before transfers 14,260
Transfers in
Transfers out
Change in net assets 14,260
Net assets, beginning of year 330,551
915,676
70,820
6,021
992,517
(115,845)
18,027
149,919
(41, 319)
199,154
183,211
679
383,044
(150,953)
18,144
749,597
126,627 767,741
10,782 616,788
8,264
19,046
510,418
(8,264)
608,524
5,764,384
109,946
Arbor
Daze
Totals
$ - $ 406,547
3,076 1,111, 839
3,076 1,518,386
730
395,010
199,154
915,676
730
264,838
6,700
730 1,782,108
2,346 (263,722)
4,855 54,556
899,516
(41,319)
4,855 912,753
7,201 649,031
8,264
(8,264)
7,201 649,031
6,715,299
Net assets, end of year $ 344,811 $ 529,464 $ 6,372,908 $ 117,147 $ 7,364,330
69
CITY OF EULESS, TEXAS
COMBINING STATEMENT OF CASH FLOWS
NON -MAJOR PROPRIETARY FUNDS
YEAR ENDED SEPTEMBER 30, 2006
Recreation Softball Athletic Arbor
Classes Complex Complex Daze Totals
OPERATING ACTIVITIES
Cash received from customers $ 407,149 $ 878,267 $ 232,091 $ 3,616 $ 1,521,123
Cash payments to suppliers for goods and services (348,156) (582,850) (118,485) (697) (1,050,188)
Cash payments to employees for services (67,086) (327,787) (75,565) (470,438)
Net cash provided by (used in ) operating activities (8,093) (32,370) 38,041 2,919 497
NONCAPITAL FINANCING ACTIVITIES
Transfer in
Transfer out
Net cash provided by (used in)
noncapital financing activities
26,264 26,264
(26,264) (26,264)
26,264 (26,264)
CAPITAL AND RELATED FINANCING ACTIVITIES
Interest paid on bonds - (41,319) (41,319)
Reduction in bonds payable (90,000) (90,000)
Net proceeds from refunding bond issuance - - -
Proceeds from gas lease 749,597 749,597
Loss on refunding bond issuance -
Bond issuance costs
Purchase of utility plant and equipment in service (11,795) (15,110) (15,987) (42,892)
Net cash used in capital
and related financing activities (11,795) (146,429) 733,610 575,386
INVESTING ACTIVITIES
Proceeds from other revenues - 149,919 - - 149,919
Interest received on investments 13,530 18,027 18,144 4,855 54,556
Net cash provided by
investing activities 13,530 167,946 18,144 4,855 204,475
Net increase (decrease) in cash and cash equivalents (6,358) 15,411 763,531 7,774 780,358
Cash and cash equivalents, beginning of year 307,056 424,863 188,771 109,373 1,030,063
Cash and cash equivalents, end of year $ 300,698 $ 440,274 $ 952,302 $ 117,147 $ 1,810,421
Reconciliation of operating income (loss) to net cash
provided by (used in) operating activities
Operating income (loss) $ 730 $ (115,845) $ (150,953) $ 2,346 $ (263,722)
Adjustments to reconcile operating income (loss)
to net cash provided by operating activities
Depreciation and amortization 10,807 76,841 183,890 271,538
Loss on disposal of equipment - -
Changes in assets and liabilities:
Accounts receivable and unbilled revenue 602 1,682 540 2,824
Prepaids and deposits (5,129) (2,777) 33 (7,873)
Inventory (32,430) (541) (32,971)
Accounts payable (15,423) 37,766 6,347 28,690
Accrued salaries and wages 320 2,393 (702) 2,011
Deferred revenue -
Net cash provided by (used in) operating activities ($ 8,093) ($ 32,370) $ 38,041 $ 2,919 $ 497
70
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 planned
to be used in replacing existing equipment. Funding is provided annually by the
user departments.
Insurance Fund - to account for the revenue and expenses resulting from providing
health insurance to the City's employees.
Risk Management Fund - to account for the revenue and expenses applicable to
the self-insurance program for worker's compensation and for general liability and
property claims.
71
CITY OF EULESS, TEXAS
COMBINING STATEMENT OF NET ASSETS
INTERNAL SERVICE FUNDS
SEPTEMBER 30, 2006
ASSETS
Deposits and investments
Accounts receivable
Prepaid expenses
Accrued interest receivable
Total current assets
Utility plant and equipment, at cost
Equipment
Less accumulated depreciation
Net utility plant and
equipment in service
Risk
Equipment Manage -
Replacement Insurance ment
Fund Fund Fund
Total
$ 1,593,096 $ 1,998,134 $ 1,031,003 $ 4,622,233
47,914 119,815 167,729
6,907 13,158 467 20,532
1,647,917 2,131,107 1,031,470 4,810,494
5,982,295 54,956 11,024 6,048,275
5,982,295 54,956 11,024 6,048,275
3,820,683 54,956 11,024 3,886,663
2,161,612 2,161,612
TOTAL ASSETS $ 3,809,529 $ 2,131,107 $ 1,031,470 $ 6,972,106
LIABILITIES
Accounts payable $ 32 $ 1,409 $ 103,720 $ 105,161
Accrued salary and wages 15,314 4,317 19,631
Accrued insurance claims 241,829 241,829
Total current liabilities
32 258,552 108,037 366,621
NET ASSETS
Invested in capital assets, net of related debt 2,161,612 - 2,161,612
Unrestricted 1,647,885 1,872,555 923,433 4,443,873
Total net assets $ 3,809,497 $ 1,872,555 $ 923,433 $ 6,605,485
72
CITY OF EULESS, TEXAS
COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET ASSETS
INTERNAL SERVICE FUNDS
YEAR ENDED SEPTEMBER 30, 2006
Risk
Equipment Manage -
Replacement Insurance ment
Fund Fund Fund Total
Operating revenues:
Insurance premiums $ $ 2,775,180 $ 258,709 $ 3,033,889
Service fees and miscellaneous 527,310 19,629 - 546,939
Total operating revenues 527,310 2,794,809 258,709 3,580,828
Operating expenses:
General and administrative 111,280 115,575 60,502 287,357
Insurance costs 3,418,274 520,704 3,938,978
Depreciation 532,244 - 532,244
Total operating expenses 643,524 3,533,849 581,206 4,758,579
Operating loss (116,214) (739,040) (322,497) (1,177,751)
Non -operating revenues:
Investment income 67,398 39,710 35,896 143,004
Gain on sale of capital assets 24,866 24,866
Total nonoperating revenues 92,264 39,710 35,896 167,870
Income (loss) before
transfers (23,950) (699,330) (286,601) (1,009,881)
Transfers in 290,000 1,550,000 450,000 2,290,000
Change in net assets 266,050 850,670 163,399 1,280,119
Net assets, beginning of year 3,543,447 1,021,885 760,034 5,325,366
Net assets, end of year $ 3,809,497 $ 1,872,555 $ 923,433 $ 6,605,485
73
CITY OF EULESS, TEXAS
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
YEAR ENDED SEPTEMBER 30, 2006
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
Net cash used in capital and related financing activities
INVESTING ACTIVITIES
Interest received on investments
Net cash provided by investing activities
Net increase in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
Reconciliation of operating loss to net cash
provided by (used in) operating activities
Operating loss
Adjustments to reconcile operating loss to net cash
provided by (used in) operating activities:
Depreciation expense
Loss on disposal of equipment
Change in assets and liabilities:
Receivables
Prepaids
Accounts payable
Accrued salaries and wages
Accrued insurance claims
Equipment
Replacement
Fund
$ 504,262
88,909
593,171
290,000
290,000
(896,536)
(896,536)
65,715
65,715
52,350
1,540,746
Insurance
Fund
$ 2,943,359
(3,431,523)
(81,616)
(569,780) (328,214)
1,550,000
1,550,000
36,916
36,916
1,017,136
980,998
Risk
Manage-
ment
Fund
Total
$ 258,709 $ 3,706,330
(544,558) (3,887,172)
(42,365) (123,981)
(304,823)
450,000 2,290,000
450,000 2,290,000
37,397
37,397
159,183
871,820
(896,536)
(896,536)
140,028
140,028
1,228,669
3,393,564
$ 1,593,096 $ 1,998,134 $ 1,031,003 $ 4,622,233
$ (116,214) $ (739,040) $ (322,497) $ (1,177,751)
532,244
24,866
(47,914)
269,177
(68,988)
148,550
(10,885)
3,048
28,547
(7,085)
1,368
532,244
24,866
100,636
269,177
(86,958)
4,416
28,547
Net cash provided by (used in) operating activities $ 593,171 $ (569,780) $ (328,214) $ (304,823)
74
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.
DEA Task Force - to account for assets and liabilities received from the DEA
task force that are to be distributed to other participating entities.
75
CITY OF EULESS, TEXAS
AGENCY FUNDS
STATEMENTS OF CHANGES IN ASSETS AND LIABILITIES
YEAR ENDED SEPTEMBER 30, 2006
Balance Balance
September 30, September 30,
2005 Additions Deletions 2006
Assets:
Deposits and investments $ 2,288,618 $ 24,496 $ $ 2,313,114
Total assets $ 2,288,618 $ 24,496 $ $ 2,313,114
Liabilities:
Due to other entities $ 2,288,618 $ 24,496 $ $ 2,313,114
Total liabilities $ 2,288,618 $ 24,496 $ $ 2,313,114
76
STATISTICAL SECTION
(Unaudited)
CITY OF EULESS, TEXAS
NET ASSETS BY COMPONENT
Last Four Fiscal Years
(accrual basis of accounting)
(Unaudited)
Governmental activities
Invested in capital assets, net of related debt
Restricted
Unrestricted
Total governmental activities net assets
Business -type activities
Invested in capital assets, net of related debt
Restricted
Unrestricted
Total business -type activities net assets
Primary government
Invested in capital assets, net of related debt
Restricted
Unrestricted
Total primary government net assets
Note:
2003
$ 42,192,665
713,385
14, 945, 063
$ 57, 851,113
$ 42,401,512
632,189
14,009,239
$ 57,042,940
$ 84,594,177
1,345,574
28,954,302
$ 114,894,053
Fiscal Year
2004
$ 46,733,074
1,304,226
14, 657, 018
$ 62,694,318
$ 43,283,643
16, 906, 068
$ 60,189,711
$ 90,016,717
1,304,226
31,563,086
$ 122,884,029
2005
$ 49,659,438
1,455,709
17,512,832
$ 68,627,979
$ 47,988,447
15,830,507
$ 63,818,954
$ 97, 647, 885
1,455,709
33,343,339
$ 132,446,933
Table 1
2006
$ 49,883,218
1,448,741
25,497,497
$ 76,829,456
$ 48,278,044
19,099,883
$ 67,377,927
$ 98,161,262
1,448,741
44,597,380
$ 144,207,383
City of Euless first applied GASB Statement 34 in fiscal year ended 9/30/2003; government -wide financial information for
years prior is not available.
Source: Comprehensive Annual Financial Reports
77
CITY OF EULESS, TEXAS
CHANGES IN NET ASSETS, Last Four Fiscal Years
(accrual basis of accounting)
(Unaudited)
Expenses
Governmental activities:
Culture and recreation
Development services
General and administrative
Highway and streets
Public Safety
Interest on long-term debt
Total governmental activities expenses
Business -type activities:
Water and sewer
Drainage utility
Golf
Other
Total business -type activities expenses
Total primary government expenses
Program Revenues
Governmental activities:
Fees, Fines, and Charges for Services:
Culture and recreation
Development services
General and administrative
Highway & Streets
Public Safety
Operating grants and contributions
Capital grants and contributions
Total governmental activities program revenues
Business -type activities:
Charges for services:
Water and sewer
Drainage utility
Golf
Other
Operating grants and contributions
Capital grants and contributions
Total business -type activities program revenues
Total primary government program revenues
2003
$ 4,753,724
1,190,240
11,879,362
2,117,959
14,830,469
3,147,819
37,919,573
12,046,092
812,785
3,616,671
2,593,455
19,069,003
56,988,576
Fiscal Year
2004 2005
$ 4,411,726
1,217,794
12,337,712
2,398,447
15,315,777
2,765,102
38,446,558
12,550,708
793,358
3,667,537
2,299,391
19,310,994
57,757,552
$ 4,573,219
1,113,875
13,370,907
1,734,487
15,514,301
2,572,094
38,878,883
Table 2
2006
$ 4,892,346
1,169,285
15,122,831
2,211,083
16,252,071
2,741,754
42,389,370
13, 227, 562 15,285,026
875,995 884,763
3,792,552 4,003,035
2,630,760 1,842,550
20,526,869 22,015,374
59,405,752 64,404,744
56,749 52,651 91,925 92,837
628,585 817,293 896,894 841,033
1,403,636 1,401,057 1,241,408 1,706,000
- - - 6,300
3,541,356 3,328,327 3,734,364 4,505,202
515,039 517,307 1,302,332 592,231
- 8,706
6,145,365 6,116,635 7,266,923 7,752,309
12, 768,482 13,235, 590 14,213, 072 16,065, 814
626,199 643,229 659,949 658,231
3,078,739 3,052,947 3,347,922 3,777,018
2,603,260 2,012,214 2,453,905 1,518,386
- 3,308,393 -
2,849,795 - 312,835
21,926,475 18,943,980 23,983,241 22,332,284
28,071,840 25,060,615 31,250,164 30,084,593
78
CITY OF EULESS, TEXAS
CHANGES IN NET ASSETS, Last Four Fiscal Years
(accrual basis of accounting)
(Unaudited)
Net (Expense) Revenue
Governmental Activities
Business -type Activities
Total Primary government net expense
General Revenues
and Other Changes in Net Assets
Governmental Activities:
Taxes:
Ad valorem (Property Tax)
Sales
Other Taxes
Investment earnings
Contributions from property owners
Gain/(loss) on sale/retirement of capital assets
Miscellaneous
Transfers
Total Governmental Activities
Business -type Activities:
Investment earnings
Contributions from property owners
Miscellaneous
Transfers
Total Business -type Activities
Total Primary Government
Change in Net Assets
Governmental Activities
Business -type Activities
Total Primary Government
Note:
2003
(31,774,208)
2,857,472
(28,916,736)
9,941,779
8,865,055
13,074,910
580,245
1,814,257
41,807
102,193
(1,535,227)
32,885,019
320,233
572,065
1,535,227
2,427,525
35,312,544
1,110,811
5,284,997
$ 6,395,808 $
Fiscal Year
2004 2005
(32,329,923)
(367,014)
(32,696,937)
(31,611,960)
3,456,372
(28,155,588)
10, 233, 079 10, 777, 414
9,229,819 9,648,979
13,666,041 14,431,288
463,239 870,841
3,191,097 1,229,401
30,811 (21,023)
18,208 -
340,834 608,721
37,173,128 37,545,621
266,240 407,468
3,588,379 374,124
(340,834) (608,721)
3,513,785 172,871
40,686,913 37,718,492
4,843,205 5,933,661
3,146,771 3,629,243
7,989,976 $ 9,562,904
Table 2
2006
(Continued)
(34,637,061)
316,910
(34,320,151)
11,188,598
12,303,965
16,999,325
1,611,815
24,866
709,969
42,838,538
771,888
271,707
2,908,437
(709,969)
3,242,063
46,080,601
8,201,477
3,558,973
$ 11,760,450
(concluded)
City of Euless first applied GASB Statement 34 in fiscal year ended 9/30/2003; government -wide financial
information for years prior is not available.
Source: Comprehensive Annual Financial Reports
79
CITY OF EULESS, TEXAS
FUND BALANCES, GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(modified accrual basis of accounting)
(Unaudited)
Table 3
Fiscal Year
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
General Fund
Reserved for other $ 549,311 $ 190,547 $ 80,047 $ 123,862 $ 99,851 $ 141,886 $ 136,167 $ 193,253 $ 239,592 $ 310,956
Unreserved 3,924,223 3,986,765 4,180,670 5,633,935 6,324,146 6,845,070 6,039,430 5,552,863 6,363,113 8,989,805
Total general fund $ 4,473,534 $ 4,177.312 $ 4,260,717 $ 5,757,797 $ 6,423,997 $ 6,986,956 $ 6,175,597 $ 5,746,116 $ 6,602,705 $ 9,300,761
All Other Governmental Funds
Reserved for:
Debt service $ 1,148,517 $ 1,144,652 $ 1,109,693 $ 1,581,339 $ 1,522,621 $ 1,344,435 $ 1,380,615 $ 1,432,251 $ 1,642,766 $ 1,587,754
Development Agreements 1,272,214 1,232,860 1,202,910 1,202,657 1,367,369 1,683,008 1,447,612 1,442,999 1,470,156 1,535,647
Other - 1,323 1,323 1,323 1,323 1,245 1,245 1,245 1,245
Unreserved, reported in:
Special revenue funds 1,761,385 1,921,983 2,352,011 4,511,136 6,119,684 9,376,163 7,167,612 5,830,664 8,086,786 7,643,232
Capital funds 4,172,153 7,828,735 5,809,904 15,060,656 15,167,228 9,200,172 7,301,088 13,708,861 11,110,293 7,482,417
Total all other governmental funds $ 8,354,269 $ 12,128,230 $ 10,475,841 $ 22,357,111 $ 24,178,225 $ 21,605,101 $ 17,298,172 $ 22,416,020 $ 22,311,246 $ 18,250,295
Source: Comprehensive Annual Financial Reports
80
CITY OF EULESS, TEXAS
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(modified accrual basis of accounting)
(Unaudited)
REVENUES:
General property tax
Gross receipts tax
General sales tax
Car rental tax
Fines and fees
Licenses and permits
Interest income
DEA Revenues
Intergovernmental
Other revenues
Total Revenues
1997 1998 1999 2000 2001
$ 6,186,659
2,376,548
7,336,395
2,337,343
530,525
874,579
111,984
192,742
880,525
20,827,300
$ 6,272,862 $ 6,799,379 $ 7,208,237 $ 7,646,808
2,471,618 2,598,167 2,655,007 3,572,806
7,738,436 7,625,399 9,244,571 8,693,648
- - 6,300,071 11,048,696
2,671,187 3,349,742 3,452,010 3,145,608
396,811 448,751 550,356 511,625
908,632 878,518 1,514,037 1,902,874
96,023 125,714 101,538 71,457
1,539,430 557,246 602,417 413,617
977.675 447.126 843,473 1,491,487
23,072,674 22,830,042 32,471,717 38,498,626
EXPENDITURES:
Culture and recreation 2,437,297 2,809,075 2,838,778 3,967,325 3,277,992
Development services 853,463 860,537 914,099 934,241 1,026,518
General and administrative 4,518,250 3,362,651 4,281,012 8,661,518 11,847,312
Highway and streets 639,906 699,140 815,687 746,976 734,672
Public safety 8,336,779 9,479,473 9,852,770 10,362,522 11,149,869
Debt Service:
Principal 1,650,000 1,780,000 1,775,000 1,412,790 1,584,277
Interest and fiscal charges 1,430,502 1,150,612 1,454,632 1,768,842 3,766,821
Issuance costs - 56,800 - 328,100 104,300
Capital outlay and maintenance 2,833,506 4,535,219 3,069,616 15,404,250 13,390,056
Total expenditures 22,699,703 24,733,507 25,001,594 43,586,564 46,881,817
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (1,872,403) (1,660,833) (2,171,552) .(11,114,847) (8,383,191).
OTHER FINANCING SOURCES (USES):
Issuance of Debt
Payment of escrow for refunding
Bond Premium
Transfers in
Transfers out
Total Other Financing Sources
2,948,909
(5,481,151)
(2,532.242)
NET CHANGE IN FUND BALANCES $ (4.404.645)_
Debt service as a percentage
of noncapital expenditures
5,500,000 24,088,891 11,455,000
1,350,845 1,867,886 2,784,426 3,347,358
(1,712,273) (1,265,318) (2,380,120) (3,931,853)
5,138,572 602,568 24,493,197 10,870,505
Table 4
2002 2003 2004 2005 2006
$ 8,845,813
3,767,478
8,922,660
10,148,812
3,237,217
1,188,231
898,590
133,138
421,176
1,790,164
39.353.279
3,277,615
1,046,331
11,748,167
750,218
12,187,878
$ 9,855,490 $ 10,297,219 $ 11,138,582 $ 11,266,615
3,433,537 3,475,785 3,589,389 4,418,954
8,865,055 9,229,819 9,648,979 12,303,965
9,641,373 10,190,256 10,841,899 12,580,371
3,377,046 3,162,113 3,662,327 4,089,056
1,009,058 1,190,059 870,010 806,476
566,049 444,653 798,485 1,468,812
45,997 128,341 14,607 77,461
326,493 292,265 303,713 315,487
1,500,408 1,434,035 2,238,652 2,015,047
38.620.506 39.844.545 43.106,643 49.342.244
3,764,712 3,586,026 3,890,845 4,079,825
1,111,608 1,150,194 1,079,073 1,117,614
11, 631, 603 11, 912, 050 12,494, 352 14, 860, 076
973,493 766,030 670,742 656,964
13,343,235 13,814,758 14,409,786 15,334,138
2,164,866 2,452,838 2,666,815 2,600,000 2,790,000
4,072,936 3,528,072 3,308,249 2,939,783 2,596,934
- 85,363 80,000 128,000 97,810
7,349,486 3,964,777 3,455,190 4,248,437 7,997,263
42,597,497 40,855,701 40,739,312 42,461,018 49,530,624
(3.244,218). (2,235,195) (894,767) 645,625 (188,380)_
6,437,616 5,535,295 7,580,000 13,900,000 6,710,000
(6,315,299) (5,492,201) - (14,386,070) (6,879,482)
- - - 508,038
3,683,309 3,987,716 3,985,286 2,435,617 5,536,285
(3,821,573) (6,913,902) (5,982,152) (2,351,396) (6,541,319)
(15,947) (2,883,092) 5,583,134 106,189 (,174,516)
$ 3,477.739 $ (1 568.984) $ 13,378.350 $ 2.487,314 $ (3,260,165)_ $ (5.118,287) $ 4,688,367 $ 751,814 $ (1.362,896)
15.5% 14.8% 14.7% 12.5% 16.3%
Source: Comprehensive Annual Financial Reports
17.7% 16.4% 16.2% 14.8% 13.2%
CITY OF EULESS, TEXAS
ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
(Unaudited)
Table 5
Estimated Market Value Total
Total Less: Total Taxable Direct
Fiscal Real Personal Market Tax -Exempt Assessed Tax
Year Property Property Value Property Value Rate
1997 $ 1,105,465,387 $ 172,906,324 $ 1,278,371,711 $ 149,794,290 $ 1,128,577,421 $ 0.544980
1998 1,167,942,644 185,721,680 1,353,664,324 157,993,468 1,195,670,856 0.524754
1999 1,257,952,252 182,780,272 1,440,732,524 164,107,720 1,276,624,804 0.524754
2000 1,372,654,858 198,674,343 1,571,329,201 175,797,883 1,395,531,318 0.514754
2001 1,501,844,617 195,014,583 1,696,859,200 194,755,282 1,502,103,918 0.514754
2002 1,642,632,027 375,015,487 2,017,647,514 210,303,809 1,807,343,705 0.497254
2003 1,774,764,051 415,198,175 2,189,962,226 227,535,973 1,962,426,253 0.497254
2004 1,908,435,313 410,962,260 2,319,397,573 249,704,249 2,069,693,324 0.495000
2005 2,029,651,370 428,198,142 2,457,849,512 271,935,496 2,185,914,016 0.495000
2006 2,190,313,348 375,328,844 2,565,642,192 312,107,619 2,253,534,573 0.491777
Source: Tarrant Appraisal District
Note: Property in the city is reassessed each year. Property is assessed at actual value; therefore, the assessed values
are equal to actual value. Tax rates are per $100 of assessed value.
82
CITY OF EULESS, TEXAS
DIRECT AND OVERLAPPING PROPERTY TAX RATES (per $100 of assessed value)
LAST TEN FISCAL YEARS
(Unaudited)
City Direct Rates Overlapping Rates
Table 6
Tarrant Tarrant
General County County
Fiscal Operating / Obligation Debt Total Direct Hurst -Euless- Grapevine- Tarrant Hospital Community
Year General Rate Service Rate Bedford ISD Colleyville ISD County District College
1997 $0.354869 $0.190111 $0.544980 $1.6170 $1.5378 $0.2666 $0.2398 $0.0577
1998 0.360855 0.163899 0.524754 1.6063 1.5378 0.2640 0.2341 0.0577
1999 0.360855 0.163899 0.524754 1.6063 1.5378 0.2648 0.2341 0.1064
2000 0.356440 0.158314 0.514754 1.6318 1.5523 0.2648 0.2341 0.1064
2001 0.336374 0.178380 0.514754 1.6775 1.5823 0.2748 0.2341 0.1064
2002 0.311966 0.185288 0.497254 1.6530 1.6168 0.2748 0.2341 0.1064
2003 0.298479 0.198775 0.497254 1.7119 1.6598 0.2725 0.2324 0.1394
2004 0.309241 0.185759 0.495000 1.6616 1.7011 0.2725 0.2354 0.1394
2005 0.331396 0.163604 0.495000 1.7105 1.7000 0.2725 0.2354 0.1394
2006 0.340321 0.151456 0.491777 1.7230 1.7000 0.2725 0.2354 0.1394
Sources: City of Euless Budget Office, Tarrant Appraisal District
83
CITY OF EULESS, TEXAS
PRINCIPAL PROPERTY TAX PAYERS
Current Year and Nine Years Ago
(Unaudited)
Taxpayer
Hertz Rent A Car
Avis RentA Car System, Inc.
Vanguard Car Rental USA Inc.
TXU Electric Delivery Co.
CingularWireless, LLC
Colonial Realty, LP
IRA Stoneleigh Feeco LLC
Somerset Village Partners LP
Budget Rent A Car System Inc
Seramont II LP
Total
Source: Tarrant County Tax Office
2006
Taxable
Assessed
Value
$ 63,707,382
51,681,659
49,438,047
37,957,143
37,714,317
37,400,000
37,300,000
30,299,136
29,855,770
29,500,000
$ 404,853,454
Percentage
of Total City
Taxable
Assessed
Value (1)
2.83
2.29
2.19
1.68
1.67
1.66
1.66
1.34
1.32
1.31
1997
Taxpayer
Southwestern Bell Telephone Company
Somerset Village Partners, LP
Bear Creek Apartments, Inc.
TU Electric
The Bear Apartments
Southwest Properties
AMLI SW
Home Depot USA, Inc.
Ferguson Enterprise, Inc.
Euless Holdings, Inc.
17.95 % Total
Note:
(1) Total Taxable Value including real and personal property for tax year 2005 (fiscal year 2006) is $2,253,534,573.
(2) Total Taxable Value including real and personal property for tax year 2006 (fiscal year 1997) is $1,128,577,421.
84
Taxable
Assessed
Value
$ 36,828,580
25,113,822
21,000,000
19,065,221
15,238,882
12,942,520
9,850,000
9,438,865
8,759,684
8,550,000
$ 166,787,574
Percentage
of Total City
Taxable
Assessed
Value (2)
3.26 %
2.23
1.86
1.69
1.35
1.15
0.87
0.84
0.78
0.76
14.79 %
Table 7
CITY OF EULESS, TEXAS
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
(Unaudited)
Collected within the
Fiscal Year of the Levy
Table 8
Total Collection Delinquent Taxes
Collections
Fiscal Total Fiscal Year Percentage of in Subsequent Total Percentage Delinquent Percentge
Year Tax Levy Amount Levy Years Collections Of Levy Taxes of Levy_
1997 6,150,523 6,073,887 98.75% 66,886 6,140,773 99.84% 392,589 6.38%
1998 6,235,640 6,123,906 98.21% 86,667 6,210,573 99.60% 392,589 6.30%
1999 6,698,985 6,618,464 98.80% 132,556 6,751,020 100.78% 393,988 5.88%
2000 7,150,393 7,068,633 98.86% 67,464 7,136,097 99.80% 361,663 5.06%
2001 7,717,258 7,562,145 97.99% 41,316 7,603,461 98.53% 493,703 6.40%
2002 8,987,088 8,668,507 96.46% 102,871 8,771,378 97.60% 915,904 10.19%
2003 9,758,243 9,639,278 98.78% 126,029 9,765,307 100.07% 1,002,193 10.27%
2004 10,244,982 10,026,897 97.87% 164,784 10,191,681 99.48% 938,053 9.16%
2005 10,820,274 10,663,367 98.55% 353,312 11,016,678 101.82% 707,019 6.53%
2006 11,070,606 11,007,368 99.43% 142,529 11,149,897 100.72% 785,037 7.09%
Source: Tarrant County Tax Office and Tarrant Appraisal District
85
CITY OF EULESS, TEXAS
RATIO OF OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
(Unaudited)
Governmental Activities Business -Type Activities
Table 9
Taxable General Percentage
General Certificates Certificates Sales Tax W&S Drainage Certificates Obligation Total of Personal Per
Fiscal Obligation of of Revenue Revenue Revenue of Refunding Primary Income Capita
Year Bonds Obligation Obligation Bonds Bonds Bonds _Obligation Bonds Government (1) .fl_
1997 $ 6,126,586 $ 5,900,000 $ $ 9,770,000 $ 2,550,000 $ 1,970,000 $ 11,700,000 $ - $ 38,016,586 4.76% $ 931
1998 5,056,586 11,025,000 9,435,000 2,155,000 1,870,000 11,610,000 - 41,151,586 5.00% 996
1999 4,026,586 10,625,000 9,090,000 1,770,000 1,765,000 11,490,000 38,766,586 4.39% 904
2000 7,813,796 18,715,000 10,290,000 9,700,000 4,615,000 1,655,000 11,530,000 64,318,796 6.94% 1,439
2001 13,214,519 23,690,000 10,190,000 9,295,000 4,170,000 1,535,000 11,295,000 73,389,519 7.74% 1,613
2002 12,409,653 22,910,000 10,040,000 9,325,000 3,590,000 1,460,000 10,985,000 70,719,653 6.91% 1,532
2003 15,381,815 18,420,000 9,875,000 8,860,000 3,300,000 1,300,000 10,660,000 67,796,815 6.10% 1,414
2004 17,525,000 21,915,000 9,700,000 8,310,000 5,220,000 1,135,000 500,000 11,095,000 75,400,000 6.48% 1,516
2005 27,410,000 10,365,000 9,510,000 7,725,000 4,915,000 965,000 210,000 11,095,000 72,195,000 6.05% 1,445
2006 28,820,000 7,175,000 9,305,000 7,175,000 4,805,000 785,000 11,005,000 69,070,000 5.41% 1,361
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
(1) See Table 14 for personal income and population data.
86
CITY OF EULESS, TEXAS
RATIO OF NET GENERAL BONDED DEBT
TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA
LAST TEN FISCAL YEARS
(Unaudited)
General Bonded Debt Outstanding
Table 10
General Certificates Estimated Debt to
Fiscal Obligation of Population Assessed Assessed Debt Per
Year Bonds Obligation Total (1) Value (2) Value Capita
1997 6,126,586 5,900,000 12,026,586 40,850 1,128,577,421 1.07% $ 294
1998 5,056,586 11,025,000 16,081,586 41,300 1,195,670,856 1.34% 389
1999 4,026,586 10,625,000 14,651,586 42,900 1,276,624,804 1.15% 342
2000 7,813,796 18,715,000 26,528,796 44,700 1,395,531,318 1.90% 593
2001 13,214,519 23,690,000 36,904,519 45,500 1,502,103,918 2.46% 811
2002 12,409,653 22,910,000 35,319,653 46,166 1,807,343,705 1.95% 765
2003 15,381,815 18,420,000 33,801,815 47,950 1,962,426,253 1.72% 705
2004 17,525,000 21,915,000 39,440,000 49,750 2,069,693,324 1.91% 793
2005 27,410,000 10,365,000 37,775,000 49,950 2,185,914,016 1.73% 756
2006 28,820,000 7,175,000 35,995,000 50,750 2,253,534,573 1.60% 709
Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. Total does not include Taxable
certificates of obligation.
Source: (1) Estimates by North Central Texas Council of Governments
(2) Tarrant Appraisal District
87
CITY OF EULESS, TEXAS
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
As of September 30, 2006
(Unaudited)
Governmental Unit
Table 11
Estimated
Estimated Share of
Debt Percentage Overlapping
Outstanding Applicable Debt
Debt repaid with property taxes
Grapevine-Colleyville Independent School District $ 322,136,456 2.12% $ 6,829,293
Hurst -Euless -Bedford Independent School District 219,304,831 26.79% 58,751,764
Tarrant County 234,450,000 2.72% 6,377,040
Tarrant County Hospital County 67,580,000 2.72% 1,838,176
Tarrant County College District 58,289,277 2.72% 1,585,468
Subtotal, overlapping debt $75,381,741
City of Euless (direct debt) $35,995,000 100.00% $35,995,000_
Total direct and overlapping debt $111,376,741
Source: Debt outstanding data provided by each governmental unit.
88
CITY OF EULESS, TEXAS
PLEDGED- REVENUE COVERAGE
WATER AND SEWER BONDS
LAST TEN FISCAL YEARS
(Unaudited)
Tablel2
Less Interest
Total Operating Net and
Fiscal Revenues Expenses Revenue Fiscal Coverage
Year (1) (2) Available Principal Charges Total Ratio
1997 10,605,353 8,014,504 2,590,849 370,000 151,480 521,480 4.97
1998 11,830,802 9,780,792 2,050,010 395,000 128,040 523,040 3.92
1999 11,909,011 9,288,622 2,620,389 385,000 107,325 492,325 5.32
2000 13,558,051 9,765,239 3,792,812 415,000 62,856 477,856 7.94
2001 13,084,483 10,915,784 2,168,699 445,000 317,637 762,637 2.84
2002 11,719,411 10,298,940 1,420,471 580,000 231,234 811,234 1.75
2003 13,016,934 10,431,249 2,585,685 615,000 199,245 814,245 3.18
2004 13,443,174 10,902,522 2,540,652 500,000 183,946 683,946 3.71
2005 14,548,715 11,555,108 2,993,607 305,000 275,524 580,524 5.16
2006 16,668,058 13,485,955 3,182,103 195,000 229,437 424,437 7.50
Notes: (1) Operating Revenues and investment interest of Water and Sewer Fund.
(2) Total operating expenses of Water and Sewer Fund exclusive of depreciation and amortization.
89
CITY OF EULESS, TEXAS
SCHEDULE OF REVENUE BOND COVERAGE
DRAINAGE UTILITY BONDS
LAST EIGHT FISCAL YEARS
(Unaudited)
Table 13
Less Interest
Total Operating Net and
Fiscal Revenues Expenses Revenue Fiscal Coverage
Year (1) (2) Available Principal Charges Total Ratio
1997 587,892 66,624 521,268 30,000 125,419 155,419 3.35
1998 611,585 87,641 523,944 100,000 124,082 224,082 2.34
1999 621,586 195,397 426,189 105,000 118,433 223,433 1.91
2000 662,132 329,422 332,710 110,000 112,343 222,343 1.50
2001 662,455 212,073 450,382 120,000 108,652 228,652 1.97
2002 645,852 241,034 404,818 75,000 74,041 149,041 2.72
2003 653,916 291,668 362,248 160,000 32,494 192,494 1.88
2004 667,131 225,815 441,316 165,000 46,255 211,255 2.09
2005 700,316 265,444 434,872 170,000 41,305 211,305 2.06
2006 741,256 257,920 483,336 180,000 35,355 215,355 2.24
Notes: (1) Operating Revenues and investment interest of Drainage Utility Fund.
(2) Total operating expenses of Drainage Utility Fund exclusive of depreciation and amortization.
90
CITY OF EULESS, TEXAS
DEMOGRAPHIC STATISTICS
LAST TEN FISCAL YEARS
(Unaudited)
Table 14
Per Personal
Estimated Capita Income School Unemployment
Fiscal Population Income (thousands Median Age Enrollment Rate
Year (1) (2) of dollars) (3) (4) (5)
1997 40,850 22,690 926,887 N/A 19,400 3.5%
1998 41,300 22,962 948,331 N/A 19,500 2.4%
1999 42,900 23,858 1,023,508 N/A 19,500 2.1%
2000 44,700 24,884 1,112,315 N/A 19,500 2.2%
2001 45,500 25,556 1,162,798 N/A 19,500 3.3%
2002 46,166 25,837 1,192,791 N/A 19,500 4.6%
2003 47,950 26,630 1,276,909 N/A 19,500 4.7%
2004 49,750 26,710 1,328,823 N/A 19,700 3.8%
2005 49,950 27,406 1,368,930 N/A 19,600 4.5%
2006 50,750 27,999 1,420,949 33.7 20,111 4.8%
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
91
CITY OF EULESS, TEXAS
PRINCIPAL EMPLOYERS
Current Year and Eight Years Ago
(Unaudited)
2006
Employer
City Of Euless
TJL Gravel
Super Target
Home Depot
Heath & Company
First Odyssey Group
Office Depot
Atlas Match
F&H Ribbon
Ferguson Enterprises
Total
Percentage
of Total City
Employees Employment
383 1.24%
275 0.89%
225 0.73%
130 0.42%
130 0.42%
100 0.32%
100 0.32%
80 0.26%
70 0.23%
65 0.21%
1,558
5.04%
Employer
City Of Euless
Edward Blank Associates
Tarrant Printing
Atlas Match
Home Depot
Marriott
Dal - Tex
Albertsons
N/A
N/A
1998
Table 15
Percentage
of Total City
Employees Employment
323 1.54%
300 1.43%
210 1.00%
100 0.48%
155 0.74%
130 0.62%
125 0.60%
100 0.48%
- 0.00%
- 0.00%
1,443 6.89%
Source: 1998 Official Statement, TWC website, US Census website, City of Euless Economic Development Department.
Note: Information prior to 1998 was unavailable. 1998 Official Statement listed the top eight employers, other source data did not provide
any further information to top ten list for 1998.
92
CITY OF EULESS, TEXAS
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM
Last Ten Fiscal Years
(Unaudited)
Table 16
Fiscal Year
Function/Program 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
General Government
and Administration 43.25 46.25 46.25 49.25 50.25 52.25 52.25 51.25 50.75 53.00
Public Safety 107.00 111.00 111.00 112.00 116.00 116.00 117.00 118.00 120.00 123.00
Fire Safety 19.00 25.00 25.00 26.00 60.00 61.00 61.00 64.00 67.00 70.00
Development Services 10.00 13.00 13.00 13.00 13.00 13.00 15.00 12.00 12.00 12.00
Culture and Recreational 49.33 53.00 34.75 32.75 34.75 35.75 35.75 35.75 35.75 36.50
Water and Sewer 45.25 45.25 46.75 51.00 52.00 51.00 49.00 48.00 49.50 50.00
Golf Course 8.33 11.00 11.25 15.25 15.25 15.25 15.25 15.25 15.25 15.25
Public Works 14.50 14.50 14.75 15.75 15.75 15.75 15.75 15.75 15.75 15.75
Service Center 5.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00
Risk Management / Insurance 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 1.50
Total 303.66 327.00 310.75 323.00 365.00 368.00 369.00 368.00 374.00 383.00
Source: City Budget Office
93
CITY OF EULESS, TEXAS
OPERATING INDICATORS BY FUNCTION/PROGRAM
Last Ten Fiscal Years
(Unaudited)
Table 17
Function/Proaram 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Public Safety
Police 77 80 80 81 81 81 81 81 82 82
Number of Certified Officers
Number of Citations Issued N/A N/A N/A 23,509 25,430 23,719 27,145 25,491 32,200 38,359
Fire
Number of Certified Firefighters 54 57 57 58 58 58 58 58 58 58
Number of Alarms N/A N/A N/A 4,432 4,717 4,530 4,849 4,699 3,949 3,661
Number of EMS Calls N/A N/A N/A 1,077 1,194 1,125 2,320 1,854 2,202 2,317
Municipal Court
Cases Filed N/A N/A N/A 34,878 33,803 33,980 35,385 34,258 41,027 46,085
Development
Number Residential Inspections - New N/A N/A N/A 120 100 107 182 518 319 315
Number Commercial Inspections - New N/A N/A N/A 10 10 8 4 13 8 10
Number Multifamily Inspections - New N/A N/A N/A 2 2 4 1 0 0 0
Public Works
Street Overlay (Square Footage) N/A N/A N/A 543,532 301,421 767,154 1,238,046 1,004,735 1,391,889 666,456
Cultural and Recreational
Parks and Recreation
Recreation Center Memberships N/A N/A N/A 2,229 2,000 3,649 4,427 4,123 4,260 4,160
Class Attendance (Youth/Adult) N/A N/A N/A 14,756 13,935 11,099 17,532 24,522 24,575 27,205
Water and Sewer
Number of Water Consumers 19,591 20,352 20,352 21,588 22,056 22,615 23,231 23,848 25,012 24,486
Water Produced (In Gallons x 1000) N/A N/A N/A 438,019 341,835 474,987 555,046 384,306 314,085 372,695
Water Purchased - TRA (In Gallons x 1000) N/A N/A N/A 2,298,819 2,134,768 1,839,498 1,895,120 2,146,706 2,382,040 2,947,945
Water Consumed (In Gallons x 1000) N/A N/A N/A 2,736,838 2,476,603 2,314,485 2,450,166 2,531,012 2,696,125 3,320,640
Annual Rainfall (In Inches) N/A N/A N/A 26.58 46.95 38.34 30.75 41.08 32.51 20.74
Golf Course
Number of Paid Rounds Played
Source: City Departments
Comprehensive Annual Financial Report
City Budget Office
Notes: N/A - Data not available.
N/A 29,420 41,049 38,542 29,694 29,961 30,861 33,146 32,725 36,639
94
CITY OF EULESS, TEXAS
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
Last Ten Fiscal Years
(Unaudited)
Function/Program
Table 18
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Public Safety
Police Stations 1 1 1 1 1 1 1 1 1 1
Fire Stations 3 3 3 3 3 3 3 3 3 3
Public Works
Streets- Paved (linear miles) N/A N/A N/A 182.0 182.0 182.0 182.0 182.0 182.0 182.0
Cultural and Recreational
Swimming Pools 3 3 3 3 3 3 3 3 3 3
Parks 14 14 14 16 16 16 16 16 16 17
Parks Land (Acres) 539 539 539 539 539 539 539 539 539 566
Community Buildings 3 3 3 3 3 5 5 5 5 5
Ampitheater 1 2 2 2 2 2 2 2 2 2
Conference Center 1 1 1 1 1 1 1 1 1 1
Golf Course 1 1 1 1 1 1 1 1 1 1
Athletic Fields NA 24 24 24 24 24 24 24 24 24
Library Holdings 70,200 74,660 81,969 84,566 90,790 98,314 106,442 96,228 99,972 97,334
Water and Sewer
Water Mains (miles)
Fire Hydrants
Sanitary Sewers (miles)
Source: City Departments
155.00 157.00 157.00 160.00 165.00 165.00 194.66 194.66 194.66 218.00
1,146 1,160 1,160 1,190 1,215 1,215 1,318 1,318 1,318 1,377
132.0 133.0 133.0 139.0 143.0 162.0 162.0 162.0 162.0 162.0
95