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HomeMy WebLinkAboutFY 1990 Comprehensive Annual Financial ReportTHE CITY OF EULESS Comprehensive Annual Financial Report for Fiscal Year Ended 9-30-90 CITY OF EULESS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 1990 CITY OFFICIALS HAROLD D. SAMUELS, Mayor FRANK DOUGLASS, Councilmember Place One BOB EDEN, Councilmember Place Two and Mayor Pro Tem BOBBY BAKER, Councilmember Place Three MARY LIB SALEH, Councilmember Place Four PETER STAKS, Councilmember Place Five TOM HART City Manager H. KAY GODBEY, CMC/AAE Assistant City Manager DEBRA B. FORTE' Fiscal and Human Resources Director I CITY OF EULESS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT Year ended September 30, 1990 TABLE OF CONTENTS INTRODUCTORY SECTION Exhibit Page(s) Title page I Table of contents II-V Letter of transmittal VI -XI GFOA certificate of achievement XII Organizational chart XIII FINANCIAL SECTION Report of independent auditors General Purpose Financial Statements Combined balance sheet - all fund types and account groups 1-2 1 3-4 Combined statement of revenues, expenditures and changes in fund balances - all govern- mental fund types 2 5-6 Combined statement of revenues, expenditures and changes in fund balances - budget and actual - General Fund 3 7-8 Combined statement of revenues, expenses and changes in retained earnings - All Proprietary Fund Types 4 9 Combined statement of cash flows - All Proprietary Fund Types 5 10 Notes to financial statements 11-28 II CITY OF EULESS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT Year ended September 30, 1990 TABLE OF CONTENTS, Continued Schedule/ Statement Page(s) Supplemental statements and schedules Special revenue funds Combining balance sheet A-1 30 Combining statement of revenues, expen- ditures and changes in fund balances A-2 31 Capital projects funds Combining balance sheet B-1 33 Combining statement of revenues, expen- ditures and changes in fund balances B-2 34 Water and sewer enterprise fund Comparative balance sheets C-1 36-37 Comparative schedules of operating expenses C-2 38-39 Comparative statements of cash flows C-3 40-41 Aggregating schedule of balance sheet accounts C-4 42-43 Aggregating schedule of revenues, expenses and changes in retained earnings accounts C-5 44 III CITY OF EULESS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT Year ended September 30, 1990 TABLE OF CONTENTS, Continued Internal service funds Combining balance sheet Schedule/ Statement Page(s) D-1 46 Combining statement of revenues, expenses and changes in retained earnings D-2 Combining statement of cash flows D-3 General fixed assets account group 47 48 Comparative schedules of general fixed assets by source E-1 50 Schedule of general fixed assets by function and activity E-2 51 Schedule of changes in general fixed assets by function and activity E-3 52 Table Page(s) STATISTICAL SECTION (Unaudited) General governmental expenditures by function 1 53 General governmental revenues by source 2 54 Property tax levies and collections 3 55 Assessed and estimated actual value of taxable property 4 56 IV CITY OF EULESS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT Year ended September 30, 1990 TABLE OF CONTENTS, Continued Table Page(s) Property tax rates - direct and overlapping governments (per $100 of assessed value) 5 57 Principal taxpayers 6 58 Computation of legal debt margin 7 59 Ratio of net general bonded debt to assessed value and net bonded debt per capita 8 60 Ratio of annual debt service expenditures for general obligation bonded debt to total general expenditures 9 61 Computation of direct and overlapping debt 10 62 Revenue bond coverage - Water and Sewer Bonds 11 63 Demographic statistics 12 64 Property value, construction and bank deposits 13 65 Retirement plan - analysis of funding progress 14 66 Miscellaneous statistics 15 67-68 T H E CITY O F EULESS December 27, 1990 Honorable Mayor & City Council, City Manager, & Citizens of Euless: The comprehensive annual financial report of the City of Euless, Texas (the "City") for the fiscal year ended September 30, 1990, is hereby submitted. Responsibility for both the accuracy of the data, and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and are reported in a manner designed to present fairly the financial position, results of operations, and cash flows of the various funds and account groups of the City. All disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included. The comprehensive annual financial report is presented in three sections: introductory, financial and statistical. The introductory section includes this transmittal letter, the City's organizational chart and a list of principal officials. The financial section includes the general purpose financial statements and supplemental statements and schedules, as well as the report of independent auditors on the financial statements and supplemental statements and schedules. The statistical section includes selected financial and demographic information, generally presented on a multiyear• basis. The City provides to its citizens those services which have proven to be necessary and which can be provided by the City at the least cost. Included in these services under general government and proprietary funds are traditional city functions such as police and fire protection, emergency ambulance service, road and traffic signal maintenance, water and sewer operations, parks and recreational facilities, courts, and library services. Other services include planning land use, building inspection, and traffic control. Internal services of the City include Insurance, Risk Management, and Equipment Replacement. All funds and account groups are discussed in depth in the notes to the financial statements. Even though associations with other entities such as Hurst -Euless -Bedford Independent School District exist, the City Council has no oversight, responsibility, or control over the school district or the other entitities referred to in Note 1 of the financial statements. Accordingly, financial data for the school district and others are not included in the combined financial statements in this report, 201 N. Ector Drive, Euless, Texas 76039-3595 817/685-1400 • Metro 817/267-4403 • FAX 817/685-1416 VI ECONOMIC CONDITICNS AND OUTLOOK Euless was settled about 1881 and reamed for Elisha Adams Euless, a cotton farmer and pioneer. In 1915 the population was 25 and in 1960, 4235. Euless has changed significantly from a rural farming community to a progressive urban area of approximately 40,000. The City of Euless is located in Northeast Tarrant County directly between the cities of Dallas and Fort Worth. Euless is also adjacent to the world's largest and second busiest airport --Dallas/Fort Worth International. The economic condition of Euless continues to be one of cautious optimism. The aggressive growth in the Euless area is projected to continue into the 1990's. The proposed expansion plans at Dallas/Fort Worth Airport should have a positive impact for North Texas, but will create some unique challenges for government officials in Euless. However, the varied types of economic growth in and around the Euless area will enable city officials to provide a better level of service and quality of life to both our corporate and residential citizens. As our motto says, "We're Building a Beautiful Tomorrow". MAJOR INITIATIVE Budget. In preparing the 1990 fiscal budget, city officials identified and addressed several key programs needed to adequately serve the public, either through quality of life issues or technological advancements. Strategic committees were created utilizing a vast number of citizens for assistance in the development of Euless' goals and objectives. Many other City departments maintain progressive and innovative approaches to the functions of their related responsibilities. Computerization has assisted in accommodating growth. Police, Fire, and Emergency Medical Service have installed a computer aided Dispatch System. Engineering, Inspections and various field operations have also benefitted from technology advancements. No longer is the Finance Department the sole benefactor of computerization. Future plans include continued application of such dynamic systems and cost savings. Future. Probably the one area that most cities fail to address properly is infrastructure maintenance. The City has implemented a Geographic Information System (GIS) to acquire a better knowledge regarding the City's vast infra- structure inventory. The GIB is a computerized process that enables cities to address any, or all, geographic areas within a city and connect various types of information to a specific area. A geographic area may be an intersection, a house, or a particular room in a building. The City will soon have a complete inventory of all water and sewer lines, as well as streets, drainage and other infrastructure items, and be able to generate maintenance schedules, replacement dates, etc. The applications for GIB transcend all City departments. VII FINANCIAL INFORMATION General. Management of the City is responsible for establishing and maintaining an internal control structure designed to ensure that the City's assets are protected from loss, theft or misuse and to ensure that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the evaluation of costs and benefits requires estimates and judgments by management. The City's accounting records for the Water and Sewer Enterprise and Internal Service Funds are maintained on an accrual basis whereby revenues and expenses are recorded in the accounting period in which they are earned or incurred. The remainder of the City's funds are maintained on the modified accrual basis whereby revenue is recorded when measurable and available and expenditures are recorded when the liability is incurred except for interest on general long-term debt, which is recognized when due. As set forth in the City's charter Article VII Sections 2-9, the City Council adopts an annual budget. Detail control is accomplished by maintaining expenditures by line item account within each operating department within each operating fund at the authorization of the City Manager. Financial reports are available to division managers monthly. Further explanations of the basis of accounting for all fund types and the City's budgetary controls are furnished in the accompanying Notes to Financial Statements. Accounting Change. The City changed the method of application of certain ,accounting principles as described further in Note 8 of the Financial statements. General Governmental Functions. Revenues for general governmental func- tions and general debt service totaled $10,983,000 in 1990, an increase of 3.61 percent over 1989. The increase in revenues is primarily attributable to increased general property tax rates and increased fines and fees. The amount of revenue from various sources and the changes from the previous year are reflected in the following table: Revenue Source Property taxes Gross receipts taxes General sales taxes Fines and fees Licenses and permits Interest income Intergovernmental/Other Amount $ 5,306,321 1,197,143 2,025,776 1,158,986 290,944 414,295 589,535 Percent % of total 48.31% 10.90 18.45 10.55 2.65 3.77 5.37 Increase Percent of (decrease) increase from 1989 (decrease) $189,141 3.70% 56,211 4.93 (110,765) (5.18) 254,748 28.17 68,520 30.81 (5,650) (1.35) (69,527) (10.55) $10,983,000 100.00% VIII $382,678 In ,addition to the above general revenue, $349,907 was transferred from the Water and Sewer Enterprise Fund to the General Fund. Expenditures for general governmental purposes and general debt service totaled $11,578,833 an increase of 6.73 percent over 1989. Changes in levels of expenditures for major functions of the City over the preceding year are shown in the following table: Function General government Public safety Streets Library Parks & Recreation Debt retirement Debt interest/fees Nondepartmental Total Expenses Percent Amount % of total $ 1,535,020 13.26% 5,633,042 48.65 541,013 4.67 355,934 3.07 1,016,028 8.77 639,281 5.52 847,136 7.32 1,011,379 8.74 $11,578,833 100.00% Increase Percent of (decrease) increase from 1989 (decrease) $ 149,833 10.82% (10,769) (.19) 60,291 12.54 (5,483) (1.52) 45,395 4.68 49,939 8.47 78,789 10.25 362,518 53.52 $ 730,513 The increase in general government expenditures is due primarily to increased expenditures for increased personnel, building maintenance, and equipment replacement in the current year. The increase in streets is due primarily to increased expenditures for equipment replacement in the current year. The increase in bonded debt interest and fees is due primarily to issuance of $1,500,000 in certificates of obligation in the prior year. Increases in nondepartmental expenditures are due primarily to fees paid in connection with the pending Dallas -Fort Worth Airport litigation as well as increased expenditures for utilities. property taxes 48.31 interest inoorne 3.77 gross reoslpts 10.3 Int rno%lel/other 5.37 firms/foss 10.55 debt Interest/tees 7.32 nondepar t mental 8.74 library 3.07 streets 4.87 general sales tax 13.20 tB.46 lioenses/permits 2.65 debt retirement 5.52 storks/recreation 8,77 public, solely 48.86 IX Water and Sewer Enterprise Fund. The City's water and sewer utility showed a gain in water and sewer service revenues and in number of customers in the current year. Comparative data for the past two fiscal years are presented in the following table and an accounting change is explained in Note 8 to the Financial Statements. Income (loss) before cumulative effect of change in accounting method Net revenue available for debt service Debt service requirements Coverage 1990 1989 $(211,061) $ 8,263 $1,263,172 $1,892,520 $ 647,288 1.95 times $ 657,301 2.88 times Debt Administration. General obligation debt, which is directly tax supported, totaled $12,836,159 at September 30, 1990. Certain ratios are useful indicators of the City's debt position for municipal management, citizens and investors. These data for the City follow: Net bonded debt - $12,243,552; Ratio of net bonded debt to assessved value - 1.13; and net bonded debt per capita - $298. Revenue bonds, which are secured by the net revenues of the Water and Sewer Enterprise Fund, totaled $4,615,000 at September 30, 1990. Tables 8-11 in the Statistical Section of this report present more detailed information about the debt position of the City. The City has maintained its A+ and A Ratings on general obligation and revenue debt from Standard and Poors and has maintained its A-1 and A Ratings on this debt from Moody's Investors Service. Cash Management. Compliance, safety, liquidity and yield are the program goals. Safety and security of the City's funds are of primary importance in all investment activities, with staff following policies and laws when investing funds. Interest income generated for the year for all funds was $892,828, which exceeded the budget of $600,000. The average yield for the portfolio was 7.97%, exceeding the benchmark yield by approximately 17 basis points. Interest is an important non -tax revenue for the City. As of September 30, for every $1 the City had to invest, approximately 97.82 cents was invested. Insurance and Benefits. The City provides employee medical coverage on a self -insured basis. Premiums are paid into a separate Insurance Fund by all other funds and by the City's employees and are available to pay claims, claim reserves and administrative costs of the program. An excess coverage insur- ance policy covers individual claims in excess of $45,000. The City maintains self-insurance for workmen's compensation. Contributions are made to a separate workmen's compensation fund by other funds and are available to pay claims, claims reserves and administrative costs of the program. An excess coverage insurance policy covers individual claims in excess of $300,000. GENERAL FIXED ASSETS The general fixed assets of the City are those fixed assets used in the performance of general governmental functions and exclude the fixed assets of the Water and Sewer Enterprise Fund. As of September 30, 1990, the general fixed assets of the City amounted to $9,902,631. This amount represents the original cost of the assets and is considerably less than their replacement value. Depreciation of general fixed assets is not recognized in the City's accounting system. OTHER INFORMATION Independent Audit. The City Charter per Article VII Section 11 requires an annual audit to be made of the books of account, financial records and trans- actions of all administrative departments of the City by a certified public accounting firm. This requirement has been complied with and the report of independent auditors has been included in this report. Award. The Government Finance Officers Association of the United States and Canada ("GFOA") awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its comprehensive annual financial report for the fiscal year ended September 30, 1989. The Certificate of Achievement is the highest form of recognition given in the area of government reporting by the GFOA. In order to be awarded a Certificate of Achievement, the City published an easily readable and efficiently organized comprehensive annual financial report whose contents conform to program standards. Such reports must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements and we are submit- ting it to the GFOA to determine its eligibility for another certificate. Acknowledgements. The preparation of this report on a timely basis could not be accomplished without the efficient and dedicated services of many individuals. I would like to express my appreciation to all members of the Finance Department who assisted and contributed to its preparation. Appreciation is expressed to employees throughout the organization, especially those instrumental in the successful completion of this report. I would also like to thank the City Manager's Office and the members of the City Council for their interest and support in planning and conducting the financial operations of the City in a responsible and progressive manner. Acknowledgement is also given to the representatives of Ernst & Young for their invaluable assistance in producing the document. Respectfully submitte r Debra B. Forte' Director of Fiscal & Human Resources XI 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, 1989 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 (CAFR's) achieve the highest standards in government accounting and financial reporting. /2.. het..._ President y#,,/, Executive Director XII City Manage -- City Attorney Bob McFarland Director of Fiscal an Human Resources Debra Forte' Accounting Data Processing Water Office Budget Municipal Courts Personnel Health Insurance Worker's Comp. Cash/Debt Mgmt. Director of Streets and Utilities Randy Byers Water Waste Water Streets Drainage City Judge George Boring Police Chief K. B. Fuller Administration Patrol Criminal Invest. Service Civil Defense CITY OF EULESS Citizens of Euless Mayor and City Council City Manager Tom Hart Assistant City Manager H. Kay Godbey Fire Chief Lee Koontz Administration Suppression Ambulance Fire Education City Secretary Susan Crim Asst. to CM/ Eco. Dev. Dir. Steve Norwood Director of Community Services Rick Herold Parks Leisure Services Library Beautification Revised: 11 /8/90 T. Hill Court Clerk Teresa Britt Director of Administrative Service Tom Cox Director of Development John Craig Fleet Mngmt. Inspection Facility Mngmt. Services Purchasing Environmental Telecommun. Health Contract Mngmt. Fire Marshall Construction Engineering Management Planning Traffic Safety Fire Prevention Risk Mngmt. 121 ERNST & YOUNG ■ 2200 Team Bank Building 500 Throckmorton Fort Worth, Texas 76102 REPORT OF INDEPENDENT AUDITORS The Honorable Mayor and City Council City of Euless, Texas ■ Phone: 817 335 1900 Fax: 817 335 5603 Telex: 758521 We have audited the accompanying general purpose financial statements of the City of Euless, Texas (the "City") as of September 30, 1990, and for the year then ended, as listed in the table of contents. These general purpose financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall finan- cial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City at September 30, 1990, and the results of its operations and the cash flows of its proprietary fund types for the year then ended, in conformity with generally accepted accounting principles. As described in Note 8 to the financial statements, the City has changed its methods of accounting for certain contributions made by developers, for payments made under a contract to provide supplemental water and sewage treatment services and for depreciation applicable to assets acquired with contributed capital. Our audit has been made primarily for the purpose of expressing an opinion on the basic general purpose financial statements taken as a whole. The accompanying other financial information listed as supple- mental statements and schedules in the table of contents is presented for purposes of additional analysis and is not a required part of the basic general purpose financial statements of the City. Such other financial information has been subjected to the procedures applied in -1- the audit of the basic general purpose financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic general purpose financial statements taken as a whole. The statistical information listed in the statistical section of the table of contents (tables 1-15) has not been subjected to the procedures applied in our audit of the basic general purpose financial state- ments, and, accordingly, we express no opinion on it. iLrw-t f tvst November 6, 1990 ASSETS AND OTHER DEBITS Cash and cash equivalents -- Note 2 Short-term investments --Note 2 Receivables: Delinquent property taxes, net of allowance for doubtful collections of $150,400 Accounts receivable Unbilled water and sewer revenue Deposits Accrued interest receivable Due from other funds --Note 9 Due from other governments Inventories, at cost Restricted assets --Notes 3 and 4 General fixed assets --Note 6 Net utility plant and equipment in service --Note 6 Capitalized water and sewer facility contract rights less accumulated amortization --Note 8 Amount available for retirement of general long-term debt Amount to be provided for retire- ment of general long-term debt TOTAL ASSETS AND OTHER DEBITS General Fund CITY OF EULESS, TEXAS COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS September 30, 1990 With comparative totals for September 30, 1989 Governmental Fund Types Special Revenue Funds $ 520,448 $ 36,622 1,234,570 87,336 458,155 2,722,605 127,642 24,059 8,628 103,014 228,031 135,913 5,717 $2,388,022 $123,958 51,681 5,778 Debt Capital Service Projects Fund Funds Proprietary Fund Types Water and Sewer Enterprise Fund Internal Service Funds $192,118 $1,141,658 $ 1,947,980 $ 506,073 $ 725,528 339,038 72,495 132,000 3,045,955 19,231,281 107,233 Account Groups General General Fixed Long-term Assets Debt 9,902,631 EXHIBIT 1 Totals (Memorandum Only) 1900 1989 - $ 4,344,899 $ 8,473,011 4,502,666 179,323 749,587 339,038 8,628 181,287 360,031 135,913 5,717 3,045,955 9,902,631 19,338,514 143,589 687,135 339,038 8,628 91,124 347,836 131,084 3,208,503 9,752,003 19,916,136 20,562,707 592,607 592,607 568,807 12,243,552 12,243,552 10,906,633 $701,954 $3,870,041 $25,494,277 $ 613,306 $9,902,631 $12,836,159 $55,930,348 $75,136,234, (Continued) LIABILITIES, FUND EQUITY AND OTHER CREDITS Liabilities: Accounts payable Accrued salaries and wages Customer and escrow deposits Accrued interest Due to other funds --Note 9 Obligations under capitalized water and sewer facility contract rights --Note 8 Bonds and certificates of obli- gation payable --Notes 3 and 4 Deferred revenue Commitments and contingent liabilities --Note 5 r TOTAL LIABILITIES Fund equity and other credits: Investment in gei_eral fixed assets Net contributed capital -- Notes 8 and 10 Retained earnings: Reserved for debt service and construction --Notes 3 and 4 Unreserved Fund balances: Reserved for: Parking lot Recreation equipment Public safety Park improvements Drug enforcement Recycling Development agreements Unreserved: Designated for: Contingency Emergency Undesignated TOTAL FUND EQUITY AND OTHER CREDITS General Fund CITY OF EULESS, TEXAS COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS September 30, 1990 With comparative Governmental Fund Types Special Revenue Funds $ 229,755 $ 171,940 Debt Service Fund - $ 76,111 82,086 33,236 483,781 109,347 10,000 29,938 119,759 2,452 112,556 4,117 totals for September 30, 1989 Capital Projects Funds Proprietary Fund Types Water and Sewer Enterprise Fund Internal Service Funds - $ 40,793 $ 136,004 $ 17,592 89,870 543,083 66,908 132,000 110,920 41,000 4,615,000 127,273 221,870 5,521,569 177,004 1,225,765 496,725 500,000 741.250 11,402 592,607 2,422,406 1904z241 10,014,872 2,145,964 7,811,872 123,958 592,607 3,648,171 19,972,708 436,302 Account Groups General Fixed Assets 9,902,631 436,302 9,902,631 General Long-term Debt EXHIBIT 1 (continued) Totals (Memorandum Onlv) 1990 1989 - $ 406,552 $ 227,377 189,532 278,508 632,953 1,698,235 66,908 70,845 360,031 347,836 21,713,627 12,836,159 17,451,159 16,410,440 242,595 263,735 12,836,159 19,349,710 41,010,603 9,902,631 9,752,003 10,014,872 13,785,857 2,145,964 2,327,140 8,248,174 3,133,579 10,000 29,938 24,717 119,759 119,759 2,452 539 112,556 103,561 4,117 2,812 1,225,765 496,725 628,125 500,000 500,000 3,767,665 3,746 539 - 36,580,618 34,125,631 TOTAL LIABILITIES, FUND EQUITY AND OTHER CREDITS 12 188 077 $123,958 $701,954 13,870,041 $25.494,277 $ 613,306 $9,902,631 112,836,159 $55,930,348 $75,136,234 See accompanying notes to financial statements. CITY OF EULESS, TEXAS COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES Year ended September 30, 1990 With comparative totals for September 30, 1989 EXHIBIT 2 Governmental Fund Types Totals (Memorandum Only) Special Debt Capital General Revenue Service Projects Fund Funds Fund Funds 1990 1989 Revenues: General property tax $ 3,796,104 $ - $1,510,217 $ - $ 5,306,321 $ 5,117,180 Gross receipts tax 1,197,143 115,052 1,312,195 1,272,910 General sales tax 2,025,776 2,025,776 2,136,541 Fines and fees 1,158,986 1,158,986 904,238 Licenses and permits 290,944 290,944 222,424 Interest income 414,295 22,663 436,958 443,148 Intergovernmental 19,078 19,078 265 Other revenues 570,457 93,000 50,679 714,136 676,050 TOTAL REVENUES 9,472,783 208,052 1,510,217 73,342 11,264,394 10,772,756 Expenditures: Current: City Council General government Civil Service Police Department Legal and Corporation Court Fire Department Street Department Planning and development Library Recreation Department Swimming pools Civic Center Code enforcement Health and animal shelter Jail fund Recreation classes Parks Department Nondepartmental Debt service: Principal retirement Interest and service charges Capital outlay and maintenance TOTAL EXPENDITURES 40,648 471,603 154,268 3,268,344 213,835 2,019,463 541,013 120,669 160,971 355,934 243,370 45,413 404,868 165,329 167,800 9,835 175,783 551,462 1,011,379 131,400 10,092,416 639,281 847,136 40,053 1,220,160 201,024 1,486,417 1,20,160 40,648 33,159 471,603 435,762 154,268 114,971 3,268,344 3,156,658 213,835 233,922 2,019,463 2,011,991 541,013 480,722 281,640 235,305 355,934 361,417 243,370 181,004 45,413 27,227 404,868 352,430 165,329 121,658 167,800 181,978 9,835 27,268 175,783 200,645 551,462 561,757 1,011,379 648,861 639,281 589,342 847,136 768,347 1,891,613 1,467,013 13,500,017 T ,191,437 (Continued) CITY OF EULESS, TEXAS COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES — ALL GOVERNMENTAL FUND TYPES Year ended September 30, 1990 With comparative totals for September 30, 1989 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES Other financing sources (uses): Net proceeds from issuance of certificates of obligation --Note 3 Operating transfers in Operating transfers out TOTAL OTHER FINANCING SOURCES General Fund EXHIBIT 2 (continued) Governmental Fund Types Totals (Memorandum Only) Special Debt Capital Revenue Service Projects Funds Fund Funds 1990 1989 $ (619,633) $ 7,028 $ 23,800 $(1,646,818) $(2,235,623) $(1,418,681) 349,907 103,982 (103,982) 245,925 103,982 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING USES BEFORE CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING METHOD (373,708) 111,010 Cumulative effect of a change in accounting method --Note 8 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING USES Fund balances, beginning of year FUND BALANCES, END OF YEAR See accompanying notes to financial statements. (373,708) 111,010 2,277,949 12,948 $ 1.904.241 $ 123,958 1,977,993 1,977,993 23,800 23,800 568,807 2,112,013 $ 592,607 $ 3,648,171 331,175 1,204,983 1,536,158 1,977,993 453,889 (103,982) 2,327,900 1,480,554 1,200,561 (452,459) 2,228,656 P09,975 809,975 4,971,717 4,161,742 $ 6,268,977 $ 4,971,717 92,277 1,204,983 1,297,260 CITY OF EULESS, TEXAS EXHIBIT 3 COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - GENERAL FUND Year ended September 30, 1990 Actual Variance Favorable Budget (Unfavorable) General property tax: Current and delinquent taxes $ 3,741,275 $ 3,646,317 $ 94,958 Penalty and interest 54,829 50,000 4,829 3,796,104 3,696,317 99, 787 Gross receipts tax: Southwestern Bell Telephone Company 257,575 255,000 2,575 Texas Utilities Electric Company 644,149 645,000 (851) Lone Star Gas Company 129,175 135,000 (5,825) Cable TV 79,033 65,000 14,033 Tarrant County Waste Disposal 31,489 27,500 3,989 Others 55,722 61,000 (5,278) 1,197,143 1,188,500 8,643 General sales tax 2,025,776 2,125,000 (99,224) Fines and fees: Franchise fees 392,243 398,716 (6,473) Corporation Court fines 640,190 485,000 155,190 Dog licenses and pound fees 8,927 12,000 (3,073) Ambulance fees 117,626 75,000 42,626 1,158,986 970,716 188,270 Licenses and permits: Building permits 176,660 146,000 30,660 Miscellaneous permits 106,354 86,250 20,104 Electric licenses 7,930 11,500 (3,570) 290,944 243,750 47,194 Interest income 414,295 350,000 64,295 Intergovernmental 19,078 20,000 (922) Other revenues: Library receipts 14,197 15,000 (803) Rental income 8,642 55,000 (46,358) Miscellaneous income 334,290 185,000 149,290 Recreation classes 181,004 181,004 Texas Court cost service fee 13,556 13,500 56 Swimming pools 18,768 15,000 3,768 570,457 283,500 286,957 TOTAL REVENUES 9,472,783 8,877,783 595,000 CITY OF EULESS, TEXAS COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - GENERAL FUND Year ended September 30, 1990 Actual EXHIBIT 3 (continued) Variance Favorable Budget (Unfavorable) Expenditures: Current: City Council $ 40,648 $ 29,000 $ (11,648) General government 471,603 501,933 30,330 Civil Service 154,268 163,709 9,441 Police Department 3,268,344 3,334,244 65,900 Legal and Corporation Court 213,835 204,475 (9,360) Fire Department 2,019,463 2,057,244 37,781 Street Department 541,013 621,336 80,323 Planning and development 120,669 127,091 6,422 Library 355,934 345,369 (10,565) Recreation Department 243,370 246,832 3,462 Swimming pools 45,413 56,600 11,187 Civic Center/Administrative Services 404,868 453,408 48,540 Code enforcement 165,329 136,206 (29,123) Health and animal shelter 167,800 160,628 (7,172) Jail fund 9,835 (9,835) Recreation classes 175,783 (175,783) Parks Department 551,462 591,968 40,506 Nondepartmental 1,011,379 799,250 (212,129) Capital outlay and maintenance 131,400 (131,400) TOTAL EXPENDITURES 10, 092, 416 9,829,293 (263,123) EXCESS OF EXPENDITURES OVER REVENUES (619,633) (951,510) 331,877 Other financing sources (uses): Operating transfers in Operating transfers out NET OTHER FINANCING SOURCES 349,907 373,395 (23, 488) (103,982) (103,982) 245, 925 373, 395 (127, 470) EXCESS OF EXPENDITURES AND OTHER FINANCING USES OVER REVENUES AND OTHER FINANCING SOURCES (373,708) (578,115) 204,407 Fund balance, beginning of year 2,277,949 2,277,949 FUND BALANCE, END OF YEAR $ 1,904,241 $ 1.699834 $ 204.407 See accompanying notes to financial statements. CITY OF EULESS, TEXAS EXHIBIT 4 Operating revenues: Water service Sewer service Water and sewer tap fees Insurance premiums Service fees and miscellaneous COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS - ALL PROPRIETARY FUND TYPES Year ended September 30, 1990 With comparative totals for September 30, 1989 TOTAL OPERATING REVENUES Operating expenses: General and administrative Water production --Note 8 Water distribution --Note 8 Utility engineering Sewage collection and treatment --Note 8 Nondepartmental Service center --Note 7 Amortization of capitalized water and sewer facility contract rights --Note 8 Insurance costs --Note 11 Depreciation TOTAL OPERATING EXPENSES OPERATING INCOME Nonoperating revenues (expenses): Investment income Loss on sale of equipment Interest on revenue bonds Interest on obligations under capitalized water and sewer facility contract rights --Note 8 TOTAL NONOPERATING REVENUES (EXPENSES), NET Operating transfers to other funds INCOME BEFORE OPERATING TRANSFERS INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING METHOD Cumulative effect of change in accounting method --Note 8 Add depreciation on fixed assets acquired with contributed capital --Note 8: Depreciation charged to expense in 1990 Depreciation arising in years prior to 1990 Residual equity transfer Retained earnings, beginning of year NET INCOME INCREASE IN RETAINED EARNINGS Proprietary Water and Sewer Enterprise Fund Fund Types Internal Service Funds $ 4,651,013 2,608,620 130,521 189,371 7,579,525 368,340 3,142,204 298,759 156,984 1,119,695 1,281,631 391,903 793,463 7,552,979 26,546 443,163 (3,575) (327,288) 112,300 138,846 (349,907) (211,061) 1,150,920 939,859 422,207 3,354,650 (219,599) 4,497,117 5,460,719 996,037 235,423 1,231,460 141,450 1,040,349 1,181,799 49,661 12,707 Totals (Memorandum Only) 1990 1989 $ 4,651,013 2,608,620 130,521 996,037 424,794 8,810,985 509,790 3,142,204 298,759 156,984 1,119,695 1,281,631 391,903 1,040,349 793,463 8,734,778. $ 4,178,004 2,446,837 72,164 924,425 199,792 7,821,222 392,555 (160,762) 322,186 141,494 527,279 1,069,950 309,775 623,112 705,547 737\392 4,748,28 76,207 3,072,694 455,870 (3,575) (327,288) 12,707 125,007 62,368 201,214 (349,907) 62,368 (148,693) 545,974 (5,184) (347,301) (2,355,483) (2,161,994) 910,700 (748,102) 162,598 1,150,920 62,368 1,002,227 162,598 219,599 281,967 154,335 422,207 3,354,650 4,779,084 162,598 5,615,054 5,452,456 RETAINED EARNINGS, END OF YEAR $ 9,957,836 $ See accompanying notes to financial statements. 436,302 $10,394,138 $ 5,615,054 CITY OF EULESS, TEXAS COMBINED STATEMENT OF CASH FLOWS - ALL PROPRIETARY FUND TYPES Year ended September 30, 1990 With comparative totals for September 30, 1989 OPERATING ACTIVITIES Operating income Adjustments to reconcile operating income to net cash provided by operating activities: Deprec'_ation expense Amortization of capitalized contract rights --Note 8 Increase (decrease) due to net changes in: Accounts receivable Accounts payable Accrued salaries and wages Customer and escrow deposits Due to other funds Deferred revenue Total adjustments NET CASH PROVIDED BY OPERATING ACTIVITIES NONCAPITAL FINANCING ACTIVITIES Interest paid on revenue bonds Reduction in revenue bonds payable Operating transfers to other funds Residual equity transfer NET CASH PROVIDED BY (USED IN) NONCAPITAL FINANCING ACTIVITIES CAPITAL FINANCING ACTIVITIES Contributions in aid to construction Principal payments on obligations under capitalized water and sewer facility contract rights --Note 8 Interest paid on obligations under capitalized water and sewer facility contract rights --Note 8 Purchase of utility plant in service Proceeds from sale of utility plant in service NET CASH USED IN CAPITAL FINANCING ACTIVITIES INVESTING ACTIVITIES Net decrease in restricted assets Interest received on investments NET CASH PROVIDED BY INVESTING ACTIVITIES NET INCREASE IN CASH AND CASH EQUIVALENTS Cash and cash equivalents, beginning of year Proprietary Fund Types Water and Sewer Internal Enterprise Fund Service Funds $ 26,546 $ 49,661 793,463 (42,479) 32,490 4,472 52,565 72,642 (7,800) 905,353 931,899 (331,225) (320,000) (349,907) (219,599) (1,220,731) 4,872 (116,135) 3,952 (107,311) 162,548 406,673 569,221 173,078 1,774,902 CASH AND CASH EOUIVALENTS, END OF YEAR $ 1.947,980 69,500 69,500 119,161 219,599 219,599 (107,233) (107,233) 12,707 12,707 244,234 261,839 $ 506.073 EXHIBIT 5 Totals (Memorandum Only) 1990 $ 76,207 1989 $ 3,072,694 793,463 737,392 (42,479) (51,563) 101,990 (3,175) 4,472 (747) 52,565 14,518 72,642 276 (7,800) (7,800) 974,853 1,312,013 1,051,06n 4,384,707 (331,225) (351,675) (320,000) (31n,00n) (349,907) (748,102) (1,001,132) (1,409,777) 4,872 92,245 (223,368) 3,952 (214,544) 162,548 419,380 581,928 417,312 2,036,741 $ 2,454,053 623,112 (576,834) (2,355,483) (621,041) 3,099 (3,458,014) 297,699 411,773 709,472 226,388 1,810,353 $ 2.036.741 Noncash investing, capital, and financing activities: In 1990, the City changed its method of accounting for certain transactions involved in providing water and sewer services (see Note 8). The City decreased their capitalized water and sewer facility contract rights and related accumulated amortization by a net amount of $20,562,707, decreased obligations under capitalized water and sewer facility contract rights by $21,713,627 and increased retained earnings at September 30, 1989, by $1,150,920 for the cumulative effect of the change in accounting method. In another accounting change, the City reported accumulated depreciation on utility plant acquired using contributed capital as a reduction of contributed capital. It had previously been classified as a charge to retained earnings. This change increased retained earnings $3,776,857 and reduced contributed capital by the same amount at September 30, 1990. See accompanying notes to financial statements. CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS September 30, 1990 NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the City of Euless (the "City") have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard -setting body for establishing governmental accounting and financial reporting princi- ples. The City's significant accounting policies are described below. A. REPORTING ENTITY The combined financial statements of the City include all govern- ment activities and entities for which the City exercises over- sight responsibility. The criteria considered in determining governmental activities and entities to be reported within the City's combined financial statements include the degree of over- sight responsibility (e.g. financial interdependency, selection of governing authority, designation of management, ability to signif- icantly influence operations) exercised by the City over a govern- ment activity or entity, the City's accountability for the activ- ity's or entity's fiscal matters, its scope of public service and the nature of any special financing relationships which may exist between the City and the government activity or entity. These criteria are based upon and consistent with the Government Accounting and Financial Reporting Standards. The City provides the full range of municipal services contem- plated by statute or charter. Included in these services are traditional city functions such as police and fire protection, road and traffic signal maintenance, water and sewer operations, parks, recreation, courts and library services. The following entities are not included in the combined financial statements because they are autonomous governments and do not meet any of the above criteria. Hurst -Euless -Bedford Independent School District - provides education services; Texas Municipal Retirement System - provides retirement benefits to City employees; Trinity River Authority of Texas - provides water and sewer services to various municipalities. Texas Municipal League Joint Self Insurance Fund - provides administrative services for various municipalities' self insurance plans. -11- CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES --Continued The accounting policies of the City conform to generally accepted accounting principles as applicable to governmental units. The following is a summary of the more significant of such policies: B. FUND ACCOUNTING The City uses funds and account groups to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain City functions or activities. A fund is a separate accounting entity with a self -balancing set of accounts. An account group, on the other hand, is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect net expendable available financial resources. Funds are classified into three categories: governmental, propri- etary and fiduciary. Each category, in turn, is divided into separate "fund types." Governmental funds are used to account for all or most of the City's general activities, including the collection and disburse- ment of earmarked monies (special revenue funds), the acquisition or construction of general fixed assets (capital projects funds) and the servicing of general long-term debt (debt service funds). The general fund is used to account for all activities of the City not accounted for in some other fund. Proprietary funds are used to account for activities similar to those found in the private sector, where the determination of net income is necessary or useful to sound financial administration. Goods or services from such activities can be provided either to outside parties or to other departments or agencies primarily within the City (internal service funds). C. BASIS OF ACCOUNTING The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES --Continued current liabilities generally are included in the balance sheet. Operating statements of these funds present increases (i.e., reve- nues and other financing sources) and decreases (i.e., expendi- tures and other financing uses) in net current assets. All proprietary funds are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and all liabilities associated with the operation of these funds are included on the balance sheet. Fund equity (i.e., assets net of liabilities) is segregated into contributed capital and retained earnings components. Proprietary fund -type operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net assets. The modified accrual basis of accounting is used by all governmen- tal fund types and agency funds. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measur- able" 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. A one-year avail- ability period is used for revenue recognition for all other governmental fund revenues. Expenditures are recorded when the related fund liability is incurred. Interest on general long-term debt is recorded as a fund liability when due or when amounts have been accumulated in the debt service fund for payments to be made early in the following year. Revenues considered susceptible to accrual are property taxes, gross receipts tax and interest revenue. Sales taxes collected and held by the state at year-end on behalf of the City also are recognized as revenue. Fine and permit revenues are not suscept- ible to accrual because generally they are not measurable until received in cash. The accrual basis of accounting is utilized by Proprietary Fund Types. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred or estimated. The City reports deferred revenue on its combined balance sheet. Deferred revenues arise when a potential revenue does not meet both the "measurable" and "available" criteria for recognition in -13- CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES --Continued the current period. Deferred revenues also arise when resources are received by the government before it has a legal claim to them, as when grant monies are received prior to the incurrence of qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met, or when the City has a legal claim to the resources, the liability for deferred revenue is removed from the combined balance sheet and revenue is recognized. D. BUDGETARY DATA 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 the 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. (4) The City Manager is authorized to transfer budgeted amounts between departments within any fund; however, any revisions that alter the total expenditures of any fund must be approved by the City Council. (5) Formal budgetary integration is employed as a manage- ment control device during the year for the General Fund. Budgetary control is maintained at the function level. (6) A budget for the General Fund is adopted on a basis consistent with generally accepted accounting princi- ples. The budgeted amounts are as originally adopted by the City Council. Appropriations and encumbrances lapse at year-end. CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES --Continued (7) The City does not maintain a formal budget for the Special Revenue Funds due to minimal activity occuring within the funds. (8) Formal budgetary integration is not employed for Debt Service Funds because effective budgetary control is alternatively achieved through general obligation bond indenture provisions. (9) Budgetary data for the Capital Projects Funds has not been presented in the accompanying combined 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. (10) Appropriated budgets for the Proprietary Funds are also adopted, but have not been presented since reporting on such budgets is not legally required. (11) Due substantially to not budgeting recreation classes or expenditures and certain capital outlay items, expenditures exceeded appropriations in the General Fund for the year ended September 30, 1990. E. CASH, CASH EQUIVALENTS AND INVESTMENTS Substantially all operating cash, cash equivalents, and short-term investments are maintained in consolidated cash, cash equivalent, and investment accounts. Related interest income is allocated to the various funds based primarily on average balances maintained by each fund. Cash equivalents consist solely of cash invested in the Local Government Investment Fund for Texas and certificates of deposit with original maturities of three months or less. The Local Government Investment Fund is a pooled investment fund for the benefit of governments within the State of Texas and invests in securities as allowed under state statutes. For purposes of the combined statement of cash flows, the Water and Sewer Enterprise and Internal Service Funds consider all highly liquid investments (excluding restricted investments) as set forth above to be cash equivalents. -15- CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES --Continued Investments consist of certificates of deposit with original maturities of three months or more and U. S. Government securi- ties. Investments are stated at cost or amortized cost. 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 deposit within established criterion. F. TAXES Property taxes attach as an enforceable lien on property as of January 1, are levied for appropriation for the fiscal year begin- ning on October 1, are due October 1, and become delinquent on February 1. Property taxes are accrued based on the period for which they are levied and available. Delinquent taxes expected to be collected later than 60 days after the fiscal year-end are considered not available and 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 $.4875 per $100 of assessed valuation and assessed valuation is approximately 100% of estimated actual value. G. FIXED ASSETS Fixed assets are recorded at cost (or fair value, if contributed) when acquired. General fixed assets are recorded as expenditures in the General Fund, Capital Projects Fund and Special Revenue Fund at the time of purchase or construction and are capitalized in the General Fixed Assets Account Group at cost. Public domain ("infrastructure") general fixed assets consisting of certain improvements other than buildings, including roads, bridges, curbs and gutters, streets and sidewalks, drainage systems and lighting systems are not capitalized in the general fixed assets account group. No depreciation is recorded on general fixed assets. Expenditures for utility plant and equipment are capitalized in the Proprietary Type Funds. Depreciation is recorded on each class of depreciable property in the Proprietary Funds beginning the year following the year of acquisition and utilizing the straight-line method over the following estimated useful lives of the assets: CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES --Continued Equipment Waterworks and sanitary sewer system H. EMPLOYEES' VACATION AND SICK LEAVE 5 - 15 years 33-1/3 years Employees may accumulate a maximum of two times their annual vaca- tion. The City's policy is to pay the employee for accumulated vacation upon termination. Accrued vacation pay is insignificant and is not recorded by the City. The City does not pay employees for accumulated sick leave upon termination. I. FUND EQUITY Certain assets that are restricted to a specific future use or are not available for appropriation or expenditure are offset by fund balance reserve accounts. Designated fund balances represent tentative plans for future use of financial resources. J. COMPARATIVE DATA Comparative total data for the prior year have been presented in the accompanying combined financial statements in order to provide an understanding of the changes in the City's financial position, operations and cash flows. Complete comparative data (i.e. presentation of prior year totals by fund type in each of the statements) have not been presented since its inclusion would make the statements unduly complex and difficult to read. K. TOTALS (MEMORANDUM ONLY) COLUMN ON COMBINED STATEMENTS The totals column on the combined statements are captioned Memo- randum Only to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present finan- cial position, results of operations, or changes in financial position in conformity with generally accepted accounting princi- ples. Neither is such data comparable to a consolidation. Inter - fund eliminations have not been made in the aggregation of this data. L. INTERFUND TRANSACTIONS Quasi -external transactions are accounted for as revenues, expen- ditures or expenses. Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that -17- CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES --Continued are properly applicable to another fund, are recorded as expendi- tures/expenses in the reimbursing fund and as reductions of expen- ditures/expenses in the fund that is reimbursed. All other interfund transactions, except quasi -external transac- tions and reimbursements, are reported as transfers. Nonrecurring or nonroutine permanent transfers of equity are reported as residual equity transfers. All other interfund transfers are reported as operating transfers. M. RECLASSIFICATIONS Certain reclassifications have been made to the data contained in the 1989 total columns to conform to the method of presentation in the 1990 financial statements. One such reclassification included the establishment of Internal Service Funds; in 1989 comparable activities were reported as part of the Special Revenue Funds. NOTE 2--DEPOSITS AND INVESTMENTS Deposits: At year-end, the ledger balances of the City's bank depos- its totalled $3,788,229 and the bank balances were $4,329,623. Of the bank balances, $926,616 were protected by federal depository insurance or by collateral held by the City's agent in the City's name. The remainder was covered by collateral held in the pledging financial institutions' trust departments in the City's name. Investments: At September 30, 1990, the City's investments are cate- gorized as either (1) insured or registered or for which the securi- ties are held by the City or its agent in the City's name; (2) uninsured and unregistered for which the securities are held by the broker's or dealer's trust department or agent in the City's name; or (3) uninsured and unregistered for which the securities are held by the broker or dealer, or by its trust department or agent but not in the City's name, as follows: CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 2--DEPOSITS AND INVESTMENTS --Continued Categories 1 2 Carrying 3 Amount Market Value U. S. securi- ties 14,037,481 $ $ - $4,037,481 $4,059,400 Local govern- ment invest- ment fund 4,009,051 4,025,500 18,046,532 18,084,90O NOTE 3--BONDS AND CERTIFICATES OF OBLIGATION PAYABLE During 1990, the City issued $2,000,000 of certificates of obligation relating to planned capital projects. The certificates were recorded net of discount. Outstanding debt was reduced by principal payments of $555,507, $83,774 and $320,000 on General Obligation Bonds, Certif- icates of Obligation and Water and Sewer Revenue Bonds, respectively. Debt outstanding at September 30, 1990, consists of the following: General Obliga- tion Bonds Certificates of Range of Interest Rates 6.00 to 10.00% Obligation 6.75 to 7.40% Water and Sewer Revenue Bonds 4.50 to 10.75% Outstanding Current Long-term Balance Maturities Maturities $ 9,256,587 $ 620,000 $ 8,636,587 3,579,572 184,572 3,395,000 4,615,000 290,000 4,325,000 $17,451,159 11,094,572 $16.356,587 The debt matures serially through the year 2008 and has various call options whereby it may be redeemed during certain periods prior to maturity. A schedule of principal and interest maturities is as follows: -19 - CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 3--BONDS AND CERTIFICATES OF OBLIGATION PAYABLE --Continued 1991 1992 1993 1994 1995 1996-2000 2001-2005 2006-2008 Less interest Principal General Obligation Bonds $ 1,281,350 1,268,837 1,268,098 1,291,148 1,282,680 5,770,006 3,334,919 15,497,038 6,240,451 $ 9,256,587 Certifi- cates of Obligation $ 442,416 344,860 342,197 339,170 335,765 1,751,511 1,776,225 894,375 6,226,519 2,646,947 $3,579.572 Water and Sewer Revenue Bonds Total $ 602,825 $ 2,326,591 553,900 2,167,597 547,700 2,157,995 544,925 2,175,243 542,350 2,160,795 2,672,250 10,193,767 1,544,375 6,655,519 894,375 7,008,325 28,731,882 2,393,325 11,280,723 $4,615,000 $17,451,159 General Obligation Bonds authorized and unissued as of September 30, 1990, amounted to $300,000. Water and Sewer Revenue Bonds authorized and unissued as of September 30, 1990, 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 are payable solely from and equally secured by a first lien on and pledge of the net revenue of the City's combined waterworks and sanitary sewer system. In accordance with the revenue 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 revenue bond retirement - to be used for payment of principal and interest on bonds at any time where there is not sufficient money available in the revenue bond debt service fund. No payments are required into this fund after accumulating therein an amount equal to the average annual )rincipal and interest requirements of the bonds outstanding. Reserve for emergency - to be used for payment of extraordi- nary repairs or replacements to the system necessitated by an emergency for which no other funds are available. Should the -20- CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 3--BONDS AND CERTIFICATES OF OBLIGATION PAYABLE --Continued reserve for bond debt service and/or reserve for bond retire- ment prove deficient, the reserve for emergency shall be used for the purpose of meeting principal and/or interest require- ments of the bonds. All funding requirements for the above reserves were met at Septem- ber 30, 1990. Investments of funds included in the bond reserve and emergency accounts are restricted to direct obligations of or obligations uncon- ditionally guaranteed by the United States of America having maturi- ties not in excess of ten and five years, respectively. NOTE 4--RESTRICTED ASSETS Restricted assets consist of cash, investments and accrued interest primarily restricted for Water and Sewer Enterprise Fund debt service and water and sewer system replacements. The City sold certain of the waterworks and sanitary sewer system properties situated within the City of Bedford to that city in 1968. The proceeds were restricted to the prepayment or redemption of cer- tain revenue bonds; investment income of the funds may be applied to current revenue bond interest up to stipulated amounts. As of Septem- ber 30, 1990, the balance in the property sales proceeds account was $439,622 and is included in restricted assets in the accompanying balance sheet. 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 consid- eration. Payments by the City are based on metered usage at rates designed to charge the City a pro-rata share of the TRA's annual operating and maintenance expenses, and principal and interest requirements on bonds issued by the TRA. Payments under this contract approximated $4,079,800 in 1990 and are included as operating expenses of the water and sewer fund. See Note F for a discussion of a change in accounting method relating to this contract. The City is involved in a number of lawsuits arising in the ordinary course of business. In addition, the City is involved in continuing -21- CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 5--COMMITMENTS AND CONTINGENT LIABILITIES --Continued litigation to prevent proposed expansion of the Dallas -Fort Worth International Airport. 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. The results of the airport litigation could affect both future tax and utility ser- vice revenues, and therefore, related legal expenses are shared equally by the general and water and sewer funds. NOTE 6--FIXED ASSETS The following is a summary of changes in the general fixed assets account group during the fiscal year ended September 30, 1990: Land Buildings Improvements other than buildings Machinery and equipment Total general fixed assets Balance September 30, 1989 $ 870,379 4,571,052 583,015 3,727,557 $9,752.003 Additions Deletions $ 871 $ 135,388 217,402 142,768 345,801 Balance September 30, 1990 $ 871,250 4,706,440 800,417 3,524,524 $ 496.429 $ 345,801 $9.902.631 The following is a summary of Proprietary Type Funds utility plant and equipment in service at September 30, 1990: Land Equipment Waterworks and sanitary sewer system Less accumulated depreciation Water and Sewer Enterprise Fund $ 1,528,966 887,447 25,031,672 27,448,085 8,216,804 $19,231,281 Internal Service Funds $ 107,233 107,233 $ 107.233 CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 7--SERVICE CENTER The Water and Sewer Enterprise Fund historically bears the major por- tion of the operating costs of the City's service center which pro- vides services to all city departments. NOTE 8--CHANGES IN ACCOUNTING METHODS Developers' Contribution Fund: The Developers' Contribution Fund is used to account for funds received for the purpose of making improve- ments to development areas within the City. Prior to fiscal 1990, these amounts were reported in an agency fund until the improvements were made. Since the City controls the improvements and determines the nature of any related expenditures, the City concluded that it effectively earns the revenue at the point of receipt and that it would be preferable to recognize the revenue as the funds are received. Accordingly, developers' contributions are now recognized in this manner and are accounted for as part of the Capital Projects Fund. The cumulative effect as of October 1, 1989, of this change in accounting resulted in an increase in operating results and fund bal- ance of the capital projects fund of $1,204,983 for fiscal 1990. If the new method of accounting had not been adopted, the excess of reve- nues and other financing sources over expenditures and other financing uses (exclusive of the cumulative effect disclosed above) would not have changed significantly for the year ended September 30, 1990. Water and Sewer Enterprise Fund: As discussed in Note 5, in 1973, the City entered into a 50 year contract with the TRA for supplemental water and sewage treatment services. Payments by the City are designed to charge the City a pro-rata share of the TRA's annual operating and maintenance expenses, and debt service requirements on bonds issued by the TRA. Prior to 1990, the City capitalized its pro- rata share of theoretical future principal and interest requirements and amortized this asset over the remaining life of the original contract. The estimated liability for future principal and interest requirements was reduced based upon the debt re -payment schedule. In 1990, the City changed its method for accounting for this contract to report all payments to the TRA as operating expenses in the Water Production, Water Distribution and Sewage Collection and Treatment cost centers instead of allocating some of the payments to principal and interest. Previously capitalized contract rights and obligations were reversed and the cumulative effect ($1,150,920) as of October 1, CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 8--CHANGES IN ACCOUNTING METHODS --Continued 1989 was reported as an increase in 1990 operating results of the Water and Sewer Enterprise Fund. If the new method of accounting had not been adopted, the fiscal 1990 loss (excluding the cumulative effect of the accounting change) would have increased approximately $159,000. The new accounting method is considered preferable since it enhances comparability between the City's accounting for this contract and other cities' accounting for the same contract. Additionally, the City acquires certain utility plant and equipment assets with funds which are contributed by developers. The assets are recorded as utility plant and equipment in service and the contribu- tions are recorded as contributed capital. Prior to fiscal 1990, the depreciation recorded on the assets acquired with the contributed capital was recorded as depreciation expense and, consequently, as a decrease in retained earnings. The City has concluded that it would be preferable to classify the depreciation on assets acquired with contributed capital as a reduction of contributed capital so that contributed capital would more closely approximate the remaining book value of the assets acquired. Thus, in 1990 the City changed its method of recording this depreciation and reclassified estimated accu- mulated prior years' depreciation expense of approximately $3,354,650 from retained earnings to a reduction of contributed capital. NOTE 9--INTERFUND ASSETS/LIABILITIES Due from/to other funds: Receivable Fund Payable Fund Amount General Insurance $ 41,000 Debt service 76,111 Water and sewer 110,920 Water and sewer Capital projects 132,000 360.031 NOTE 10--CONTRIBUTED CAPITAL During fiscal 1990, contributed capital of the Water and Sewer Enter- prise Fund increased by developer's contributions in aid to construc- tion in the amount of $4,872 and decreased $3,776,857 representing CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 10--CONTRIBUTED CAPITAL --Continued accumulated depreciation on assets acquired with contributed capital. See Note 8 for a discussion on the change in accounting method appli- cable to assets acquired with contributed capital. NOTE 11--RISK MANAGEMENT The City participates in the Texas Municipal League Joint Self Insur- ance Fund ("TMLIF") to provide both general liability and property insurance. The City, along with other participating entities, con- tributes 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. The City provides employee medical coverage on a self -insured basis. Premiums are paid into a separate Insurance Fund by other funds and by the City's employees 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 $45,000. During fiscal 1990, the City and the City's employees contributed approximately $563,000 and $193,000, respectively for medical coverage. The City's contributions are accounted for as quasi -external transactions. Claims incurred but not reported have been considered in determining the claims liability at September 30, 1990. The City is also self -insured for workmen's compensation claims. Contributions are made to a separate workmen's compensation fund by other funds and are available to pay claims, claims reserves and administrative costs of the program. An excess coverage insurance policy covers individual claims in excess of $300,000. During 1990, the City contributed approximately $240,000 to the fund for workmen's compensation. NOTE 12--EMPLOYEE RETIREMENT SYSTEM Plan Description: The City provides pension benefits for all of its full-time employees through a nontraditional, joint contributory, defined contribution plan in the state-wide Texas Municipal Retirement System ("TMRS"), one of over 500 administered by TMRS, an agent multiple -employer public employee retirement system. It is the opinion of the TMRS management that the plans in TMRS are substan- tially defined contribution plans, but they have elected to provide additional voluntary disclosure to help foster a better understanding of some of the nontraditional characteristics of the plan. -25- CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 12--EMPLOYEE RETIREMENT SYSTEM --Continued Benefits depend upon the sum of the employees' contributions to the plan, with interest, and the City -financed monetary credits, with interest. At the date the plan began, the City granted monetary credits for past service rendered, of a theoretical amount equal to twice the amount that 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 employees' accumulated contributions. In addition, the City can grant as often as annually another type of monetary credit referred to as an updated service credit. This credit is a theoreti- cal amount which, when added to an employee's accumulated contribu- tions and monetary credits, would result in the total monetary credits and employee contributions accumulated (with interest) if the current employee contribution rate and 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. 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. Members can retire at ages 60 and above with 10 or more years of service or with 25 years of service regardless of age. The plan also provides death and disability benefits. A member is vested after 10 years, but he must leave his accumulated contributions in the plan. If a member withdraws his own money, he is not entitled to any employer -financed monetary credits. The plan provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS and within the actuarial constraints also in the statutes. Contributions: The contribution rate for the employees is 7% of their salaries, and the City matching percent is currently 11.63%, both as adopted by the governing body of the City. Under the state law gov- erning TMRS, the City contribution rate is determined annually by the actuary. 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 arising from the City matching percent. The normal cost contribution rate is the actuarially determined percent of payroll necessary to satisfy the oblisration of the City to each employee at the time of his retirement. The prior service contribution rate amortizes the unfunded actuarial liability over the remainder of the plan's 25-year amortization period. When the City periodically adopts updated ser- vice credits and increases in annuities, the increased unfunded -26- CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 12--EMPLOYEE RETIREMENT SYSTEM --Continued actuarial liability is amortized over a new 25-year period. Cur- rently, the unfunded actuarial liability is being amortized over the 25-year period which began January 1990. The unit credit actuarial cost method is used for determining the city contribution rate. Con- tributions are made monthly by both the employees and the City. Since the City needs to know its contribution rate in advance for budgetary purposes, there is a one-year lag between the actuarial valuation that is the basis for the rate and the calendar year when the rate goes into effect. The City's total payroll in fiscal year 1990 was approximately $7,016,000, and the City's contributions were based on a payroll of $6,756,000. Both the City and the covered employees made the required contributions, amounting to $780,290 (11.41% of covered payroll for the months in calendar year 1989 and 11.63% for the months in calendar year 1990) for the City and $472,475 (7%) for the employees. Funding Status and Progress: Even though the substance of the City's plan is not to provide a defined benefit in some form, some additional voluntary disclosure is appropriate due to the nontraditional nature of the defined contribution plan which had an initial unfunded pension benefit obligation and which can have additions to the unfunded pen- sion benefit obligation through the periodic adoption of increases in benefits. Statement No. 5 of the Governmental Accounting Standards Board (GASB 5) defines a pension benefit obligation as a standardized disclosure measure of the actuarial present value of pension benefits, adjusted for the effects of projected salary increases, estimated to be payable in the future as a result of employee service to date. The measure is intended to help users assess the funding status of public employee pension plans, assess progress made in accumulating suffi- cient assets to pay benefits when due, and make comparisons among public employee pension plans. The pension benefit obligation shown below is similar in nature to the standardized disclosure measure required by GASB 5 for defined benefit plans except that there is no need to project salary increases since the benefit credits earned for service to date are not dependent upon future salaries. The calculations were made as part of the annual actuarial valuation as of December 31, 1989. Because of the moneypur- chase nature of the plan, the interest rate assumption, currently 8.5% per year, does not have as much impact on the results as it does for a defined benefit plan. Market value of assets is not determined for each participating city's plan, but the market value of assets for TMRS as a whole was 108.7% of book value as of December 31, 1989. CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 12--EMPLOYEE RETIREMENT SYSTEM --Continued Pension benefit obligation Annuitants currently receiving benefits Terminated employees Current employees: Accumulated employee contributions including allocated invested earnings Employer -financed vested Employer -financed nonvested Total Net assets available for benefits, at book value Unfunded pension benefit obligation $ 1,078,400 830,500 3,733,600 5,395,100 1,668,400 $12.706.000 $ 9.732.600 $ 2.973,400 The book value of assets is amortized cost for bonds and original cost for short-term securities and stocks. The actuarial assumptions used to compute the actuarially determined City contribution rate are the same as those used to compute the pension benefit obligation. The amounts above reflect the adoption of changes in the plan since the previous actuarial valuation, which had the effect of increasing the pension benefit obligation by $266,200. Trend information for TMRS, only two years of which are currently available, is as follows: Net Assets Available For Benefits as a Percent of Pension Year Benefit Obligation Unfunded Pension Benefit Obligation as a Percent of Covered Payroll City Contribution as a Percent of Covered Payroll 1989 76.09% 39.82% 10.82% 1990 76.60 44.01 11.58 Historical trend information for TMRS is presented in the Statistical Section, Table 14 of this report. These tables provide information about progress made in accumulating sufficient assets to pay benefits when due. SPECIAL REVENUE FUNDS 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. This fund was estab- lished in fiscal 1990. ASSETS Cash and cash equivalents Short-term investments CITY OF EULESS, TEXAS SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET September 30, 1990 $ Police Hotel/ Drug Motel Enforcement Totals Fund Fund 1990 1989 3,369 $ 33,253 8,033 79,303 $ A-1 36,622 $ 12,948 87,336 TOTAL ASSETS $ 11,402 $ 112.556 123d958 $ 12,948 FUND EQUITY Fund Balances: Reserve for drug enforcement $ - $ 112,556 $ 112,556 $ Unreserved, undesignated 11,402 11,402 12,948 TOTAL FUND BALANCES $ 11,402 $ 112.556 $ 123,958 $ 12,948 CITY OF EULESS, TEXAS SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES Year ended September 30, 1990 Revenues: Gross receipts tax Other revenues TOTAL REVENUES A-2 Police Hotel/ Drug Motel Enforcement Totals Fund Fund 1990 1989 $ 115,052 $ - $ 115,052 $ 131,978 93,000 93,000 115,052 93,000 208,052 131,978 Expenditures: Planning and development 116,598 44,373 Capital outlay and mainte- nance 40,053 TOTAL EXPENDITURES 116,598 84,426 160,971 40,053 201,024 117,344 117,344 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (1,546) 8,574 7,028 14,634 Other financing sources (uses): Net operating transfers in (out) - 103,982 103,982 (133,688) EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING USES (1,546) 112,556 111,010 (119,054) Fund balances, begin- ning of year 12,948 - 12,948 132,002 FUND BALANCES, END OF YEAR $ 11.402 $ 112,556 $ 123,958 $ 12,948 -31- CAPITAL PROJECTS FUNDS Park Improvements General Obligation Fund (1986) - to account for the financing and construction of park facilities. Financing was pro- vided primarily by the sale of general obligation bonds of $1,500,000 in 1986 and $430,000 in 1988. 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 Improvement and Drainage General Obligation Fund (1986) - to account for construction of improvements to various street and drainage projects. Financing was provided primarily from the sale of general obligation bonds of $1,000,000 in 1986. Street Improvement Certificates of Obligation Fund (1989) - to account for construction on Texas Highway 10. Financing was provided from the sale of Certificates of Obligation of $1,500,000 in 1989. Street Improvement and Drainage Certificates of Obligation Fund (1990) to account for the construction of improvements to various street and drainage projects. Financing was provided from the sale of Certificates of Obligation in 1990. Equipment Certificates of Obligation Fund (1986) - to account for the purchase of communication equipment to be used generally in the area of public safety. Financing was provided from the sale of Equipment Certificates of $348,356 in 1986 as authorized under the Public Property Finance Act of 1979, State of Texas. Fire Department Certificates of Obligation Fund (1990) - to account for improvements to the fire station and purchase of equipment for the fire department. Financing was provided from the sale of Certificates of Obligation in 1990. Developers' Contribution Fund - to account for funds received for the purpose of making new and future improvements to new development areas within the City. Previously reported as an agency fund. Conference Center Construction Fund - to account for financing and construction of a new conference center. Financing will primarily be provided through transfers from the Hotel/Motel Fund. Revenue Sharing Fund - to account for the capital project expenditures for which this grant funding is used. Financing was provided by entitlement grants from the Federal government. No grants were received in 1990. CITY OF EULESS, TEXAS CAPITAL PROJECTS FUNDS COMBINING BALANCE SHEETS September 30, 1990 Street Street Park Park Improvement Street Improvement Improvements Improvements and Drainage Improvement and Drainage Equipment General Certificates of General Certificates Certificates Certificates Obligation Obligation Obligation of Obligation of Obligation of Obligation Fund (1986) Fund (1990) Fund (1986) Fund (1989) Fund (1990) Fund (1986) B-1 Fire Department Conference Certificates of Developers' Center Revenue Totals Obligation Contribution Construction Sharing Fund (1990) Fund Fund Fund 1990 1989 ASSETS Cash and cash equivalents $ 1,603 $ 99,345 $ 46,775 $ 38,539 $ 394,459 $ 7,303 $ 90,580 $ 388,924 $ 74,130 $ $ 1,141,658 $ 3,448,361 Short-term investments 3,824 236,914 111,547 91,907 940,686 17,416 216,009 927,486 176,816 2,722,605 Accrued interest receivable 5,778 5,778 3,369 Due from (to) other funds 775 (775) TOTAL ASSETS $ 5,427 1_336,259 164,875 $ 130,446 $1,335.145 $ 24.719 1__306,589 $1,315,635, 1_250,946 $ - $ 3.870.041 $ 3,451.730 LIABILITIES AND FUND BALANCES Customer and escrow deposits $ - $ - $ - $ - $ - $ - $ - $ 89,870 $ - $ - $ 89,870 $ 1,207,717 Due to other funds 132,000 132.000 132.000 TOTAL LIABILITIES 89,870 132,000 221,870 1,339,717 Fund balances: Reserved for develop- ment agreements Unreserved, undesignated TOTAL FUND BALANCES 5,427 5,427 1,225,765 1,225,765 336,259 164,875 130,446 1,335,145 24,719 306,589 118,946 2,422,406 33,6 259 164,875 130,446 1,335,145 24,719 306,589 1 225,765 118,946 3,648.171 2112013 2.112.013 TOTAL LIABILITIES AND FUND BALANCES 3 5,427 $ 336,259 $ 164,875 $ 130,446 $1, 335, 145 $ 24,719 $ 306,589 11,315,635 $ 250,946 3 - $ 3.870.041 $ 3,451,730 Revenues: Interest income Other revenues TOTAL REVENUES CITY OF EULESS, TEXAS CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANCES IN FUND BALANCES Year ended September 30, 1990 B-2 Street Street Park Park Improvement Street Improvement Improvements Improvements and Drainage Improvement and Drainage Equipment Fire Department Conference General Certificates of General Certificates Certificates Certificates Certificates of Developers' Center Revenue Totals _. Obligation Obligation Obligation of Obligation of Obligation of Obligation Obligation Contribution Construction Sharing Fund (1986) Fund (1990) Fund (1986) Fund (1989) Fund (1990) Fund (1986) Fund (1990) Fund Fund Fond 109h 1984 $ Expenditures: Capital outlay and maintenance 200,054 EXCESS (DEFICIENCY) OF CO REVENUES OVER EXPENDITURES (200,054) 1 Other financing sources: Net proceeds from issuance of certificates of obligation Net operating transfers in TOTAL OTHER FINANCING SOURCES EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES BEFORE CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING METHOD Cumulative effect of a change in accounting method for developers' contribution revenues EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES $ $ 2,408 $ - $ - $ - $ $ 20,255 $ 50,152 527 52,560 20,782 145,832 1,322,097 47,214 $ $ 22,663 50,679 73,342 $ 23,203 7,049 40,245 640 4,323 _1,ziarr Q _I,225via (93,272) (1,322,097) (47,214) 20,782 (640) (4,323) (1,646,818) (1,185,528) 336,259 1,335,145 336,259 1,335,145 306,589 306,589 1,977,993 1,480,554 278,586 1,977,993 --1,759,.1551 (200,054) 336,259 (93,272) (1,322,097) 1,335,145 (47,214) 306,589 20,782 (640) (4,323) 331,175 573,612 (200,054) 336,259 (93,272) (1,322,097) 1,335,145 (47,214) 306,589 1,204,983 1,204,983 1,225,765 (640) (4,323) 1,536,158 573,612 Fund balances, beginning of year 205,481 258 147 1,452,543 71,933 119.586 4,323 2,112,013 1,538,401 FUND BALANCES, END OF YEAR $ 5,427 $ 336,259 $ 164,875 $ 130.446 124335,145 1 24,719 $ 306,589 22 ,5 76 $ _118,946 $ - $ 3,648,171 Lzajp,s9.$ WATER AND SEWER ENTERPRISE FUND To account for the acquisition, operation and maintenance of a munici- pal utility, supported primarily by user charges to the public. -35- CITY OF EULESS, TEXAS WATER AND SEWER ENTERPRISE FUND COMPARATIVE BALANCE SHEETS September 30, 1990 and 1989 ASSETS Current assets: Cash and cash equivalents Accounts receivable, less allowance for estimated uncollectible accounts of $1,463 in 1990 and 1989 Unbilled water and sewer revenue Accrued interest receivable Due from other funds TOTAL CURRENT ASSETS 1990 1989 $ 1,947,980 $ 1,774,902 725,528 339,038 72,495 132,000 3,217,041 683,049 339,038 36,005 132,000 2,964,994 Restricted assets: Revenue bond debt service: Cash with paying agent 24,876 52,551 Revenue bond retirement: Investments with paying agent, at cost 1,414,177 1,416,229 Revenue bond emergency: Short-term investments 500,000 500,000 Property sale proceeds account: Investments with paying agent, at cost 439,622 439,622 Capital projects account: Short-term investments 65,438 250,824 Customer deposits: Short-term investments 543,083 490,518 Interest receivable on investments 58,759 58,759 TOTAL RESTRICTED ASSETS 3,045,955 3,208,503 Utility plant and equipment in service, at cost: Land 1,528,966 Equipment 887,447 Waterworks and sanitary sewer system 25,031,672 27,448,085 Less accumulated depreciation 8,216,804 NET UTILITY PLANT AND EQUIPMENT IN SERVICE 19,231,281 Capitalized water and sewer facility contract rights, less accumulated amortization of $3,904,918 1,528,966 847,020 24,971,104 27,347,090 7,430,954 19,916,136 20,562,707 TOTAL ASSETS $25,494,277 $46,652,340 -36- LIABILITIES AND FUND EQUITY Current liabilities: Payable from current assets: Accounts payable and accrued salaries and wages Due to other funds Current portion of obligations under capitalized water and sewer facility contract rights TOTAL CURRENT LIABILITIES Payable from restricted assets: Customer and escrow deposits Current portion of revenue bonds payable Accrued interest Obligations under capitalized water and sewer facility contract rights Revenue bonds payable Deferred revenue TOTAL LIABILITIES Fund equity: Contributed capital: From subdividers From Environmental Protection Agency From Trinity River Authority Accumulated depreciation on assets acquired with contributed capital NET CONTRIBUTED CAPITAL Retained earnings: Reserved for: Revenue bond debt service, next maturing Revenue bond retirement Emergency Construction Unreserved TOTAL RESERVED TOTAL RETAINED EARNINGS 1990 1989 $ 58,385 $ 110,920 169,305 543,083 290,000 66,908 4,325,000 127,273 5,521,569 13,537,112 239,617 15,000 13,791,729 3,776,857 10,014,872 C-1 21,423 38,278 644,376 704,077 490,518 320,000 70,845 21,069,251 4,615,000 135,073 27,404,764 13,532,240 239,617 15,000 13,786,857 13,786,857 24,876 52,551 1,555,650 1,523,765 500,000 500,000 65,438 250,824 2,145,964 2,327,140 7,811,872 3,133,579 9,957,836 5,460,719 TOTAL FUND EQUITY 19,972,708 19,247,576 TOTAL LIABILITIES AND FUND EQUITY $25,494,277 $46,652,340, -37- CITY OF EULESS, TEXAS WATER AND SEWER ENTERPRISE FUND COMPARATIVE SCHEDULES OF OPERATING EXPENSES Years ended September 30, 1990 and 1989 General and administrative: Salaries and wages Employee benefits Postage and supplies Maintenance of office machinery Contractual services Bad debts Other Water production: Salaries and wages Employee benefits Operating supplies and expense Maintenance of structures and equipment Water - Trinity River Authority Other Water distribution: Salaries and wages Employee benefits Operating supplies and expense Maintenance of structures and equipment Water - Trinity River Authority Contractual services Other Utility engineering: Salaries and wages Employee benefits Operating supplies and expense Maintenance of structures and equipment Contractual services Sewage collection and treatment: Salaries and wages Employee benefits Operating supplies and expense 1990 $ 186,290 $ 61,413 17,798 15,517 23,524 31,506 32,292 368,340 199,520 59,949 10,838 13,929 2,851,561 6,407 3,142,204 121,109 55,741 11,359 61,360 25,236 9,766 14,188 298,759 100,721 34,403 2,199 9,224 10,437 156,984 80,523 54,746 3,446 C-2 1989 174,125 68,030 21,469 14,513 17,618 32,257 328,012 171,666 67,797 8,871 14,194 (423,290) (160,762) 155,966 70,589 9,696 79,472 4,851 11612 322,186 95,412 27,017 2,265 2,803 13.997 141,494 106,429 49,297 4,315 CITY OF EULESS, TEXAS C-2 (Continued) WATER AND SEWER ENTERPRISE FUND COMPARATIVE SCHEDULES OF OPERATING EXPENSES Years ended September 30, 1990 and 1989 1990 1989 Sewage collection and treatment (continued): Maintenance of structures and equipment $ 7,705 $ 14,551 Contractual services 7,961 3,278 Treatment fees - Trinity River Authority 953,807 343,454 Other 11,507 5,955 1,119,695 527,279 Nondepartmental: Salaries 50,352 Employee benefits 2,790 8,880 Operating supplies and expense 504,294 491,983 Contractual services 316,022 171,597 Franchise fees 392,243 397,490 Other 15,930 1,281,631 1,069,950 Service center: Salaries 73,642 99,405 Employee benefits 36,713 29,830 Motor fuel and supplies 111,776 128,759 Maintenance of structures and equipment 153,886 117,413 Other 15,886 14,368 391,903 389,775 Amortization of capitalized water and sewer facility contract rights 623,112 Depreciation 793,463 737,392 TOTAL OPERATING EXPENSES $7,552,979 $3.978,438 NOTE: In 1990, the City changed its method of accounting for certain transactions involved in providing water and sewer services. This change decreased their capitalized water and sewer facility contract rights and related accumulated amortization by a net amount of $20,562,707, decreased obligations under capitalized water and sewer facility contract rights by $21,713,627 and increased retained earn- ings at October 1, 1989, by $1,150,920 for the cumulative effect of the change in accounting method. The cash flows and expenses relating to the transaction described above are now reported as operating expenses in the Water Production, Water Distribution and Sewage Collection and Treatment cost centers. These expenses would have increased approximately $2,900,000 in 1989 if the same accounting method was used in both years. -39- CITY OF EULESS, TEXAS WATER AND SEWER ENTERPRISE FUND COMPARATIVE STATEMENTS OF CASH FLOWS Years ended September 30, 1990 and 1989 OPERATING ACTIVITIES Operating income Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation expense Amortization of capitalized contract rights Increase (decrease) due to changes in: Accounts receivable Accounts payable Accrued salaries and wages Customer and escrow deposits Due to other funds Deferred revenue Total adjustments NET CASH PROVIDED BY OPERATING ACTIVITIES NONCAPITAL FINANCING ACTIVITIES Interest paid on revenue bonds Reduction in revenue bonds payable Operating transfers to other funds Residual equity transfer NET CASH USED IN NONCAPITAL FINANCING ACTIVITIES CAPITAL FINANCING ACTIVITIES Contributions in aid to construction Principal payments on obligations under capitalized water and sewer facility contract rights Interest paid on obligations under capitalized water and sewer facility contract rights Purchase of utility plant in service Proceeds from sale of utility plant in service NET CASH USED IN CAPITAL FINANCING ACTIVITIES 1990 1989 C-3 26,546 $ 2,918,359 793,463 (42,479) 32,490 4,472 52,565 72,642 (7,800) 905,353 931,899 (331,225) (320,000) (349,907) (219,599) (1,220,731) 737,392 623,112 (51,563) (69,679) (747) 14,518 276 (7,800) 1,245,509 4,163,868 (351,675) (310,000) (748,102) (1,409,777) 4,872 92,245 (576,834) (2,355,483) (116,135) (621,041) 3,952 3,099 (107,311) (3,458,014) CITY OF EULESS, TEXAS C-3 (Continued) WATER AND SEWER ENTERPRISE FUND COMPARATIVE STATEMENTS OF CASH FLOWS Years ended September 30, 1990 and 1989 1990 1989 INVESTING ACTIVITIES Net decrease in restricted assets $ 162,548 $ 297,699 Interest received on investments 406,673 411,773 NET CASH PROVIDED BY INVESTING ACTIVITIES 569,221 709,472 NET INCREASE IN CASH AND CASH EQUIVALENTS 173,078 5,549 Cash and cash equivalents, beginning of year 1,774,902 1,769,353 CASH AND CASH EQUIVALENTS, END OF YEAR $ 1,947.980 $ 1.774,902 Noncash investing, capital, and financing activities: The City increased their capitalized water and sewer facility con- tract rights and the related obligation to the Trinity River Author- ity of Texas by $4,676,039 in 1989. In 1990, the City changed its method of accounting for certain transactions involved in providing water and sewer services. The City decreased their capitalized water and sewer facility contract rights and related accumulated amortization by a net amount of $20,562,707, decreased obligations under capitalized water and sewer facility contract rights by $21,713,627 and increased retained earn- ings at October 1, 1989, by $1,150,920 for the cumulative effect of the change in accounting method. In another accounting change, the City reported accumulated depreciation on utility plant acquired from capital contributions as a reduction of contributed capital; it had previously classified such depreciation as a charge to retained earnings. This change increased retained earnings $3,776,857 and reduced contributed capital by the same amount at September 30, 1990. ASSETS Current assets: Cash and cash equivalents Accounts receivable, less allowance for estimated uncollectible accounts of $1,463 Unbilled water and sewer revenue Accrued in`zrest receivable Due from other funds TOTAL CURRENT ASSETS CITY OF EULESS, TEXAS WATER AND SEWER ENTERPRISE FUND AGGREGATING SCHEDULE OF BALANCE SHEET ACCOUNTS September 30, 1990 C-4 Capital Debt Service Total Operating Projects Service Center Impact Fees September 30, Account Account Account Account Account Eliminations 1990 $ 1,949,160 $ 725,528 339,038 72,495 132,000 3,218,221 $ — $ (1,677) $ 497 $ — $ 1,947,980 Restricted assets: Revenue bond debt service: Cash with paying agent 24,876 Revenue bond retirement: Investments with paying agent, at cost 1,414,177 Revenue bond emergency: Short—term investments 500,000 Property sale proceeds account: Investments with paying agent, at cost 439,622 Capital projects account: Short—term investments 65,438 Customer deposits: Short—term investments 543,083 Interest receivable on investments 58,759 TOTAL RESTRICTED ASSETS 1,043,083 65,438 1,937,434 Utility plant and equipment in service, at cost: Land 1,528,966 Equipment 887,447 Waterworks and sanitary sewer system 25,031,672 27,448,085 Less accumulated depreciation 8,216,804 NET UTILITY PLANT AND EQUIPMENT IN SERVICE 19,231,281 TOTAL ASSETS $23.492.585 $ 65.438 11,937 434 725,528 339,03E 72,495 132,000 (1,677) 497 3,217,041 (1,677) $ 497 24,876 1,414,177 500,000 439,622 65,438 543,083 58,759 3,045,955 1,528,966 887,447 25,031,672 27,448,085 8,216,804 19,231,281 $25,494277 (continued) LIABILITIES AND FUND EQUITY Current liabilities: Payable from current assets: Accounts payable and accrued salaries and wages Due to (from) other water and sewer accounts Due to other funds TOTAL CURRENT LIABILITIES Payable from restricted assets: Customer and escrow deposits Current portion of revenue bonds payable Accrued interest Revenue bonds payable Deferred revenue TOTAL LIABILITIES Fund equity: Contributed capital: From subdividers From Environmental Protection Agency From Trinity River Authority Accumulated depreciation on assets acquired with contributed capital NET CONTRIBUTED CAPITAL Retained earnings: Reserved for: Revenue bond debt service, next maturing Revenue bond retirement Emergency Construction TOTAL RESERVED Unreserved TOTAL RETAINED EARNINGS (DEFICIT) TOTAL FUND EQUITY TOTAL LIABILITIES AND FUND EQUITY CITY OF EULESS, TEXAS WATER AND SEWER ENTERPRISE FUND AGGREGATING SCHEDULE OF BALANCE SHEET ACCOUNTS September 30, 1990 Operating Account $ 58,385 180,000 110,920 349,305 543,083 290,000 Capital Projects Account $ - (209,787) (209,787) 4,325,000 127,273 5,634,661 (209,787) 12,972,185 564,927 239,617 15,000 12,972,185 819,544 3,776,857 9,195,328 819,544 500,000 500,000 8,162,596 8,662,596 17,857,924 65,438 65,438 (609,757) (544,319) 275,225 $23.492.585 $ 65.438 Debt Service Account $ - $ 66,908 66,908 24,876 1,555,650 1,580,526 290,000 1,870,526 1,870,526 $1,937434 Service Center Account (1,677) (1,677) Impact Fees Account Eliminations 29,787 29,787 29,787 (29,290) (29,290) (1,677) (29,290) C-4 (Continued) Total September 30, 1990 $ - $ 58,385 110.920 169,305 543,083 290,000 66,908 4,325,000 127,273 5,521,569 13,537,112 239,617 15,000 13,791,729 3,776,857 10,014,872 24,876 1,555,650 500,000 65,438 2,145,964 7,811,872 9,957,836 19,972,708 $ (1 677) 1_ 497 $ - $25,494,277 CITY OF EULESS, TEXAS WATER AND SEWER ENTERPRISE FUND AGGREGATING SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS ACCOUNTS Year ended September 30, 1990 C-5 Capital Debt Service Total Operating Projects Service Center Impact Fees September 30, Account Account Account Account Account Eliminations 1990 Operating revenues: Water service $ 4,651,013 $ - $ - $ - $ - $ - $ 4,651,013 Sewer service 2,608,620 2,608,620 Water and sewer tap fees 130,521 130,521 Service fees and miscellaneous 186,371 3,000 189,371 TOTAL OPERATING REVENUES 7,576,525 3,000 7,579,525 Operating expenses: General and administrative 336,050 32,290 368,340 Water production 3,142,204 3,142,204 Water distribution 298,759 29R,759 Utility engineering 156,984 156,984 Sewage collection and treatment 1,119,695 1,119,695 Nondepartmental 1,212,349 69,282 1,2R1,631 Service center 391,003 391,903 Depreciation 793,463 793,463 I TOTAL OPERATING EXPENSES 7,059,504 69,282 391,903 32,290 7,552,979 OPERATING INCOME (LOSS) 517,021 (69,282) (391,903) (29,290) 26,546 Nonoperating revenue (expenses): Investment income 443,163 443,163 Loss on sale of equipment (3,575) (3,575) Interest on revenue bonds (327,288) (327,288) 112,300 112,300 INCOME (LOSS) BEFORE OPERATING TRANSFERS 629,321 (69,282) (391,903) (29,290) 13R,R46 Operating transfers from other water and sewer accounts 113,244 180,000 400,000 (693,244) Operating transfers to other funds or water and sewer accounts (929,907) (87,455) (25,789) 693,244 (349,907) INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING METHOD (187,342) 23,263 (25,789) R,097 (29,290) (211,061) Cumulative effect of change in accounting method 1,150,920 1,150,920 NET INCOME (LOSS) 963,578 23,263 (25,789) 8,097 (29,290) 039,859 Add depreciation on fixed assets acquired with contributed capital: Depreciation charged to expense in 1990 422,207 422,207 Depreciation arising in years prior to 1990 3,354,650 3,354,650 Residual equity transfer (219,599) (219,599) INCREASE IN RETAINED EARNINGS 4,520,836 23,263 (25,789) 8,097 (29,290) 4,497,117 Retained earnings (deficit), beginning of year 4,141,760 (567,582) 1,896,315 (9,774) 5,460,719 RETAINED EARNINGS (DEFICIT), END OF YEAR $ 8,662,596 $ (544,319) $1,870,526 $ (1,677) $ (29,290) $ - $ 9,957,836 INTERNAL SERVICE FUNDS Equipment Replacement Fund - to account for the accumulation of funds planned to be used in replacing existing assets. Funding is pro- vided annually by the user departments. Insurance Fund - to account for the revenue and expenditures resulting from providing health insurance to the City's employees. Workmen's Compensation Fund - to account for the revenue and expendi- tures applicable to the self-insurance program for workmen's compen- sation claims. Note: In prior years, the Insurance Fund and the Workmen's Compensa- tion Fund were presented as special revenue funds and the equipment replacement activities were included in the General Fund. The Equipment Replacement Fund was initiated in 1990. Since these funds basically account for the cost of providing goods or services by one department to other departments, they have been reclassified to internal service funds to more appro- priately reflect the nature of their operations. CITY OF EULESS, TEXAS INTERNAL SERVICE FUNDS COMBINING BALANCE SHEET September 30, 1990 Equipment Workmen's Replacement Insurance Compensation Totals Fund Fund Fund 1990 ASSETS 1989 D-1 Cash and cash equivalents $ 354,193 $ 8,167 $ 143,713 $ 506,073 $ 261,839 TOTAL CURRENT ASSETS 354,193 8,167 143,713 506,073 261,839 Equipment, at cost 107,233 107,233 TOTAL ASSETS $ 461,426 $ 8,167 $ 143,713 $ 613.306_ $ 261.839 LIABILITIES AND RETAINED EARNINGS Accounts payable $ - $ 66,504 $ 69,500 $ 136,004 $ 66,504 Due to other funds 41,000 41,000 41,000 TOTAL CURRENT LIABILITIES 107,504 69,500 177,004 107,504 Retained earnings: Unreserved 461,426 (99,337) 74,213 436,302 154,335 TOTAL LIABILITIES AND RETAINED EARNINGS $ 461,426 $ 8,167 $ 143.713 $ 613,306 $ 261839 Operating revenues: Insurance premiums Service fees and miscellaneous TOTAL OPERATING REVENUES Operating expenses: General and administrative Insurance costs TOTAL OPERATING EXPENSES OPERATING INCOME (LOSS) CITY OF EULESS, TEXAS D-2 INTERNAL SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS Year ended September 30, 1990 Equipment Workmen's Replacement Insurance Compensation Totals Fund Fund Fund 1990 $ 1989 - $ 756,037 $ 240,000 $ 996,037 $ 924,425 235,423 235,423 235,423 756,037 240,000 1,231,460 924,425 6,303 6,303 229,120 108,475 781,768 890,243 (134,206) 26,672 258,581 285,253 (45,253) 141,450 64,543 1,040,349 705,547 1,181,799, 770,090 49,661 154,335 Nonoperating revenues: Investment income 12,707 12,707 NET INCOME (LOSS) 241,827 (134,206) (45,253) 62,368 Residual equity transfer 219,599 219,599 Retained earnings, beginning of year 34,869 119,466 154,335 RETAINED EARNINGS (DEFICIT), END OF YEAR $ 461,426 $ (99,337) $ 74,213 $ 436,302 154,335 154,335 OPERATING ACTIVITIES Operating income (loss) Adjustments to reconcile operat- income (loss) to net cash provided by (used in) operating activities: Increase in accounts payable Increase in due to other funds Total adjustments NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES NONCAPITAL FINANCING ACTIVITIES Residual equity transfer FINANCING ACTIVITIES Purchase of equipment INVESTING ACTIVITIES Interest received on investments NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS Cash and cash equivalents, beginning of year CASH AND CASH EQUIVALENTS, END OF YEAR CITY OF EULESS, TEXAS INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS Year ended September 30, 1990 Equipment Replacement Fund $ 229,120 229,120 219,599 (107,233) 12,707 354,193 354,193 D-3 Workmen's Insurance Compensation Totals Fund Fund 1990 1989 $ (134,206) $ (45,253) $ 49,661 $ 154,335 (134,206) 69,500 69,500 24,247 69,500 69,500 119,161 66,504 66,504 220,839 219,599 (107,233) 12,707 (134,206) 24,247 244,234 220,839 142,373 119,466 261,839 41,000 $ 8,167 $ 143,713 1__506,073 t$ 261,839. GENERAL FIXED ASSETS ACCOUNT GROUP To account for fixed assets not used in proprietary fund operations. CITY OF EULESS, TEXAS COMPARATIVE SCHEDULES OF GENERAL FIXED ASSETS BY SOURCE September 30, 1990 and 1989 General fixed assets: Land Buildings Improvements other than buildings Machinery and equipment TOTAL GENERAL FIXED ASSETS Investment in general fixed assets by source: General fund Special revenue funds Capital projects funds 1990 $ 871,250 4,706,440 800,417 3,524,524 $9.902,631 $4,858,875 133,658 4,910,098 TOTAL INVESTMENT IN GENERAL FIXED ASSETS 19,902.631 E-1 1989 $ 870,379 4,571,052 583,015 3,727,557 $9,752,003 $4,749,483 83,249 4,919,271 $99,752.003 CITY OF EULESS, TEXAS SCHEDULE OF GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY September 30, 1990 Function and Activity General government Public saftey Culture and recreation Highways and streets Land Buildings $ 269,959 $1,382,874 234,325 1,094,413 366,966 2,229,153 TOTAL GENERAL FIXED ASSETS $ 871.250 $4,706,440 Improvements Other Than Buildings Machinery and Equipment $ - $ 541,272 1,984,316 800,417 $ 800,417 579,471 419,465 $3, 524, 524 E-2 Total $2,194,105 3,313,054 3,976,007 419,465 $9.902,631 CITY OF EULESS, TEXAS E-3 SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY Function and Activity General government Public safety Culture and recreation Highways and streets Year ended September 30, 1990 General Fixed Assets September 30, 1989 $2,146,084 3,449,704 3,732,605 423,610 Additions $ 57,480 184,203 254,746 Deductions $ 9,459 320,853 11,344 4,145 $9.752,003 $ 496.429 $ 345,801 General Fixed Assets September 30, 1990 $2,194,105 3,313,054 3,976,007 419,465 $9,902,631 ao ST ATISTIC AL SECTION Fiscal General Year Government 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 $ 739,346 737,311 741,825 905,018 1,060,047 1,197,589 1,316,296 1,436,132 1,385,187 1,535,020 CITY OF EULESS, TEXAS GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION (1) Last ten fiscal years (Unaudited) Public Safety $1,734,324 $ 2,285,229 2,447,377 3,529,424 3,963,322 4,954,072 4,649,517 5,503,148 5,643,811 5,633,042 Culture - Streets Recreation 255,642 332,829 323,104 364,058 401,902 424,806 402,974 396,572 480,722 541,013 $ 530,593 644,703 667,854 859,754 947,590 1,015,965 1,034,905 1,217,531 1,332,050 1,371,962 (1) Includes General and Debt Service Funds. Debt Service $ 427,658 429,364 425,799 506,439 780,540 964,011 1,341,171 1,313,298 1,357,689 1,486,417 Other $ 418,557 458,351 480,838 509,600 592,995 760,176 593,150 567,795 648,861 1,011,379 TABLE 1 Total $ 4,106,120 4,887,787 5,086,797 6,674,293 7,746,396 9,316,619 9,338,013 10,434,476 10,848,320 11,578,833 Fiscal Year Taxes 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 $3,229,395 3,609,418 4,320,153 4,967,971 5,902,338 6,374,355 7,450,693 8,044,902 8,394,653 8,529,240 CITY OF EULESS, TEXAS GENERAL GOVERNMENTAL REVENUES BY SOURCE (1) Last ten fiscal years (Unaudited) Licenses and Permits $ 187,263 191,551 379,549 601,181 429,929 330,136 201,468 164,031 222,424 290,944 $ Inter- Govern - mental Revenues 206,722 $ 312,553 288,355 402,107 521,896 601,988 535,814 380,612 265 19,078 (1) Includes General and Debt Service Funds. Charges for Services 34,590 37,714 38,254 38,484 51,401 60,466 52,890 54,682 43,053 55,163 Fines and Fees $ 208,746 259,293 200,793 265,800 356,381 423,482 413,120 501,151 904,238 1,158,986 Interest Income and Other Revenues $ 443,065 $ 375,297 457,210 594,673 702,740 664,199 729,595 610,444 1,035,689 929,589 TABLE 2 Total 4,309,781 4,785,826 5,684,314 6,870,216 7,964,685 8,454,626 9,383,580 9,755,822 10,600,322 10,983,000 CITY OF EULESS, TEXAS PROPERTY TAX LEVIES AND COLLECTIONS Last ten fiscal years (Unaudited) TABLE 3 Percent of Outstanding Percent of Percent Delinquent Total Tax Delinquent Delinquent Fiscal Total Tax Current Tax of Levy Tax Total Tax Collections Taxes at Taxes to Year Levy Collections Collected Collections Collections to Tax Levy Year-end Tax Levy 1981 $1,966,178 $1,889,920 96.12% $ 101,408 $1,991,328 101.28% $ 188,405 9.58% 1982 2,133,114 2,045,992 95.92 71,417 2,117,409 99.26 202,081 9.47 1983 2,597,676 2,543,591 97.92 39,762 2,583,353 99.45 246,369 9.48 1984 2,808,055 2,745,623 97.78 77,156 2,822,779 100.52 268,760 9.57 1985 3,298,386 3,182,483 96.49 127,288 3,309,771 100.35 256,955 7.79 1986 3,814,110 3,575,594 93.75 76,236 3,651,830 95.75 393,256 10.31 1987 4,845,209 4,704,417 97.09 167,892 4,872,309 100.56 428,865 8.85 1988 5,001,323 4,921,426 98.40 174,978 5,096,404 101.90 355,562 7.11 1989 4,975,719 4,926,213 99.00 165,469 5,091,682 102.33 331,891 6.67 1990 5,162,838 5,150,783 99.77 175,439 5,326,222 103.16 329,745 6.39 Fiscal Year 1981 (1) 1982 (2) 1983 (2) 1984 (2) 1985 (2) 1986 (2) 1987 (2) 1988 (2) 1989 (2) 1990 (2) Assessed Value $ 248,902,180 265,109,240 332,750,708 343,084,060 697,008,884 779,704,042 1,080,231,222 1,024,645,236 968,871,391 967,682,949 CITY OF EULESS, TEXAS ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY Last ten fiscal years (Unaudited) Real Property Estimated Actual Value $ 248,902,180 265,109,240 332,750,708 343,084,060 697,008,884 779,704,042 1,080,231,222 1,024,645,236 968,871,391 967,682,949 Personal Property Assessed Estimated Value Actual Value $ 31,980,350 39,621,390 57,430,322 58,805,741 68,347,443 88,759,776 101,144,524 112,007,718 112,795,668 117,494,828 $ 31,980,350 39,621,390 57,430,322 58,805,741 68,347,443 88,759,776 101,144,524 112,007,718 112,795,668 117,494,828 (1) Source: Hurst —Euless —Bedford Independent School District. (2) Source: Tarrant County Appraisal District. Assessed Value Total Estimated Actual Value $ 280,882,530 304,730,630 390,181,030 401,889,801 765,356,327 868,463,818 1,181,375,746 1,136,652,954 1,081,667,059 1,085,177,777 $ 280,882,530 304,730,630 390,181,030 401,889,801 765,356,327 868,463,818 1,181,375,746 1,136,652,954 1,081,667,059 1,085,177,777 TABLE 4 Ratio of Total Assessed to Total Estimated Actual Value 100% 100 100 100 100 100 100 100 100 100 CITY OF EULESS, TEXAS TABLE 5 PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS (PER $100 OF ASSESSED VALUE) Last ten fiscal years (Unaudited) Fiscal City School County Hospital Junior College Year (1) (2) (3) (3) (3) Total 1981 $.70 $1.24 $.285 $.31 $.095 $2.63 1982 .70 1.24 .204 .168 .048 2.36 1983 .70 1.24 .202 .178 .052 2.37 1984 .70 1.24 .125 .104 .031 2.20 1985 .44 .74 .125 .104 .031 1.44 1986 .44 .82 .09866 .09634 .03165 1.48665 1987 .42 .78 .11772 .11125 .03153 1.46050 1988 .44 .9169 .11772 .11125 .03153 1.6174 1989 .46 1.02 .156509 .13300 .03148 1.80098 1990 .4875 1.06 .1820 .1530 .0330 1.9155 NOTES: (A) General property taxes for cities are limited by the Texas Constitu- tion to $2.50 per $100 of assessed valuation. (B) City general property taxes are due each year on October 1 and become delinquent on February 1 each year. Penalties are assessed on late payments ranging from 1% after February 1 to 8% after July 1. Interest is charged on late payments at the rate of 1/2 of 1% for each month's delinquency. There are no discounts. (C) The City's taxes are collected by the Hurst -Euless -Bedford Indepen- dent School District and are distributed to the City as collected. Sources: (1) City Records (2) Hurst -Euless -Bedford Independent School District (3) Tarrant County -57- CITY OF EULESS, TEXAS PRINCIPAL TAXPAYERS September 30, 1990 (Unaudited) Taxpayer Sunbelt Savings Association of Texas Robert S. Folsom, et. al. Southwestern Bell Telephone Company Texas Utilities Electric Company Prudential Reality Group First City Savings Association Sky Chef, Inc. Everoak Partners Courage Point Apartments Crossmark Partners II, Ltd. Nature of Property Land Apartments Telephone Utility Electric Utility Retail Real Estate Food service Apartments Apartments Apartments 1990 Assessed Valuation $ 36,610,216 18,468,930 17,289,615 16,214,523 9,791,345 8,271,406 8,191,366 7,717,728 7,143,853 6,687,453 TABLE 6 Percentage of Total Assessed Valuation 3.38% 1.70 1.59 1.49 . 90 . 76 .75 . 72 . 66 . 61 $136,386,435 12.56% CITY OF EULESS, TEXAS COMPUTATION OF LEGAL DEBT MARGIN September 30, 1990 (Unaudited) TABLE 7 Article XI, Section 5 of the State of Texas Constitution states in part: "...no tax for any purpose shall ever be lawful for any one year, which shall exceed two and one-half percent of the tax- able property of such city." Additionally, the state Attorney General's Office normally limits general property taxes to $1.50 per $100 of assessed valuation for the payment of principal and interest on general obligation bonds. The City's total tax rate for fiscal 1990 was established at $.49 per $100 of assessed valuation based on 100% of appraised value. -59- Fiscal Year Population 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 26,100 26,100 28,200 32,350 36,050 37,650 38,700 39,750 40,250 41,100 (1) CITY OF EULESS, TEXAS TABLE 8 RATIO OF NET GENERAL BONDED DEBT TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA Last ten fiscal years (Unaudited) Assessed Value (2) $ 280,882,530 (A) 304,730,630 390,181,030 401,889,801 765,356,327 868,463,818 1,181,375,746 1,136,652,954 1,081,667,059 1,085,177,777 General Less Debt Bonded Debt Service Funds $ 5,225,000 $ 173,872 5,070,000 171,395 5,520,000 235,147 7,825,000 285,142 9,095,000 348,633 10,396,586 313,522 10,684,514 318,010 10,564,783 383,429 11,475,440 568,807 12,836,159 592,607 (1) Source: Estimates by North Central Texas Council of Governments (2) Source: Tarrant County Appraisal District. NOTE: (A) Increased basis of assessment from 65% to 100%. Net Bonded Debt $ 5,051,128 4,898,605 5,284,853 7,539,858 8,746,367 10,083,064 10,366,504 10,181,354 10,906,633 12,243,552 Ratio of Net Bonded Debt to Assessed Value 1.80% 1.61 1.35 1.88 1.14 1.16 .88 .90 1.01 1.13 as adjusted for 1980 census data. Net Bonded Debt Per Capita $194 188 187 233 243 268 268 256 271 298 CITY OF EULESS, TEXAS TABLE 9 RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL OBLIGATION BONDED DEBT TO TOTAL GENERAL EXPENDITURES Fiscal Year Principal 1981 $145,000 1982 155,000 1983 165,000 1984 195,000 1985 230,000 1986 290,000 1987 60,428 1988 549,732 1989 589,342 1990 639,281 Last ten fiscal years Interest (A) $ 282,658 274,364 260,799 311,439 550,540 674,011 1,280,743 763,566 768,347 847,136 (Unaudited) Total Debt Service $ 427,658 4 29, 364 425,799 506,439 780,540 964,011 1,341,171 1,313,298 1,357,689 1,486,417 Total General Expenditures $ 4,106,120 4,887,787 5,086,797 6,674,293 7,746,396 9,316,619 9,338,013 10,434,476 10,848,320 11,578,833 (A) Includes fiscal agent fees which are insignificant. Ratio of Debt Service to Total General Expenditures 10.42% 8.78 8.37 7.59 10.08 10.35 14.36 12.59 12.52 12.84 CITY OF EULESS, TEXAS COMPUTATION OF DIRECT AND OVERLAPPING DEBT September 30, 1990 (Unaudited) TABLE 10 Percent Amount Applicable Applicable Net Debt to City of to City of Jurisdiction Outstanding Euless Euless City of Euless $ 12,243,552 100.00% $12,243,552 Grapevine - Colleyville Indepen- dent School District 53,900,000 2.12 1,142,680 Hurst -Euless -Bedford Independent School District 44,972,000 26.79 12,047,998 Tarrant County Tarrant County Junior College District Tarrant County Hospital District TOTAL DIRECT AND OVERLAPPING DEBT 109,860,000 2.72 2,988,192 43,600,000 2.72 1,185,920 43,275,000 2.72 1,177,080 $30.785.422 Fiscal Year 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 Gross Revenues (1) $3,252,549 3,610,582 4,138,656 5,197,388 6,601,117 6,169,486 7,677,625 7,273,249 7,442,771 8,022,688 Direct Operating Expenses $2,289,427 (3) 2,557,799 (3) 2,897,770 (3) 3,100,233 (3) 3,691,945 (3) 4,865,806 (3) 5,595,639 (3) 6,133,001 (3) 5,550,251 (3) 6,759,516 (2) CITY OF EULESS, TEXAS REVENUE BOND COVERAGE WATER AND SEWER BONDS Last ten fiscal years (Unaudited) Ne t Revenue Available for Debt Service $ 963,122 1,052,783 1,240,886 2,097,155 2,909,172 1,303,680 2,081,986 1,140,248 1,892,520 1,263,172 Debt Service Requirements TABLE 11 Principal Interest Total Coverage $183,800 $ 328,800 2.93 177,138 332,138 3.17 170,075 330,075 3.76 475,323 640,323 3.28 422,923 672,923 4.32 406,625 661,625 1.97 390,012 665,012 3.13 372,300 677,300 1.68 347,301 657,301 2.88 327,288 647,288 1.95 $145,000 155,000 160,000 165,000 250,000 255,000 275,000 305,000 310,000 320,000 (1) Includes operating revenues and interest on investments. (2) Excludes amortization and depreciation. (3) Excludes amortization and depreciation and includes theoretical debt service pay- ments to Trinity River Authority treated as operating expense for bond coverage purposes through fiscal 1989; subsequent to fiscal 1989, accounting for Trinity River Authority payments was changed and is consistent with the debt service treat- ment above. CITY OF EULESS, TEXAS DEMOGRAPHIC STATISTICS Last ten fiscal years (Unaudited) TABLE 12 Fiscal Per Capita School Unemployment Year Population (1) Income (2) Enrollment (3) Rate (4) 1981 26,100 $ 10,226 14,845 4.4% 1982 26,100 11,184 15,003 5.7 1983 28,200 12,091 15,172 4.9 1984 32,350 13,006 15,606 4.2 1985 36,050 13,940 15,248 5.0 1986 37,650 14,828 16,067 6.7 1987 38,700 15,739 16,818 6.9 1988 39,750 16,650 16,887 5.7 1989 40,250 17,560 17,011 5.8 1990 41,100 18,471 18,700 5.6 Sources: (1) Estimates by North Central Texas Council of Governments (2) Estimates by City (3) Hurst -Euless -Bedford Independent School District (4) Texas Employment Commission CITY OF EULESS, TEXAS PROPERTY VALUE, CONSTRUCTION AND BANK DEPOSITS Last ten fiscal years (Unaudited) Construction (1) Fiscal Number Year of Permits 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 410 741 1,178 1,139 879 443 314 405 392 559 (1) Source: (2) Source: (3) Source: (4) Source: Estimated Value $ 21,485,417 29,631,480 66,419,093 113,992,018 47,670,451 42,546,836 14,128,587 27,937,240 23,231,436 23,370,614 Bank Deposits (4) (000's) $ 33,029 $ 34,651 36,219 44,872 48,834 72,689 93,681 186,022 182,305 89,192 TABLE 13 Property Value 280,882,530 304,730,630 390,181,030 401,889,801 765,356,327 868,463,818 1,181,375,746 1,136,652,954 1,081,667,059 1,085,177,777 City Records Tarrant County Appraisal District Hurst -Euless -Bedford Independent School District Bank Records NOTE: (A) Increased basis of assessment from 65% to 100%. (3) (A) (2) (2) (2) (2) (2) (2) (2) (2) (2) Fiscal Year (1) Net Assets Available for Benefits 1989 $8,594,400 1990 9,732,600 CITY OF EULESS, TEXAS RETIREMENT PLAN - ANALYSIS OF FUNDING PROGRESS Past Two Fiscal Years (Unaudited) (1) Pension Benefit Obligation $11,295,300 12,706,000 Percentage Funded 76.09% 76.60 (1) Unfunded Pension Benefit Obligation $2,700,900 2,973,400 Note: Data available for only the two years shown. Sources: (1) Texas Municipal Retirement System (2) City records. (2) Annual Covered Payroll $6,781,968 6,756,115 TABLE 14 Unfunded Pension Benefit Obligation as a Percentage of Covered Payroll 39.82% 44.01 CITY OF EULESS, TEXAS MISCELLANEOUS STATISTICS September 30, 1990 (Unaudited) TABLE 15 Date of incorporation February 24, 1953 Date of adoption of Charter July 21, 1962 Form of government: Home Rule, Council -Manager Mayor - elected at large Five council members Area 16.9 square miles Full time City employees 252 Police protection: Number of stations Number of certified officers Fire protection: Number of stations Number of certified firefighters 53 3 43 Parks and recreation: Number of swimming pools 3 Number of parks 13 Area of parks 184 acres Community buildings 2 Library holdings 53,821 Education: Elementary Schools 7 Junior High Schools 2 High School 1 CITY OF EULESS, TEXAS MISCELLANEOUS STATISTICS September 30, 1990 (Unaudited) City Water and Sewer service: Water service: Number of customers Maximum daily capacity available from Trinity River Authority Maximum daily capacity of City water wells Total daily capacity Maximum daily consumption Average daily consumption Water mains Fire hydrants Sewer service: Average daily flow of wastewater Number of customers Sewer mains Streets: Improved State highways TABLE 15 (Continued) 18,015 14,000,000 gallons 4,000,000 gallons 18,000,000 gallons 11,920,000 gallons 5,622,000 gallons 148 miles 1,120 2,900,000 gallons 17,576 125 miles 120 miles 17.2 miles