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HomeMy WebLinkAboutFY 1989 Comprehensive Annual Financial ReportThe City of EULESS, TEXAS Comprehensive Annual Financial Report September 30, 1989 INTRODUCTORY SECTION CITY OF EULESS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 1989 CITY OFFICIALS HAROLD D. SAMUELS, Mayor FRANK DOUGLASS, Councilmember Place One BOB EDEN, Councilmember Place Two GLENN D. WALKER, Councilmember Place Three and Mayor Pro Tem MARY LIB SALEH, Councilmember Place Four RON STERNFELS, Councilmember Place Five TOM HART City Manager H. KAY GODBEY, CMC/AAE Assistant City Manager/City Secretary JIM HICKERSON, CGFO Assistant City Manager/Director of Finance Prepared by: Finance Department CITY OF EULESS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT Year ended September 30, 1989 TABLE OF CONTENTS INTRODUCTORY SECTION Exhibit Page(s) Title page I Table of contents II -IV Letter of transmittal VI-XVI GFOA certificate of achievement XVII Organizational chart XVIII FINANCIAL SECTION Report of independent auditors 1-2 General Purpose Financial Statements Combined balance sheet - all fund types and account groups 1 4-7 Combined statement of revenues, expenditures and changes in fund balances - all govern- mental fund types 2 8-11 Combined statement of revenues, expenditures and changes in fund balance - budget and actual - General Fund 3 12-14 Statement of revenues, expenses and changes in retained earnings - proprietary fund type Water and Sewer Enterprise Fund 4 15 Statement of cash flows - proprietary fund type - Water and Sewer Enterprise Fund 5 16-17 Notes to financial statements 18-37 II CITY OF EULESS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT Year ended September 30, 1989 TABLE OF CONTENTS, Continued Schedule/ statement Page(s) Supplemental statements and schedules Special revenue funds Combining balance sheet A-1 40 Combining statement of revenues, expendi- tures and changes in fund balances A-2 41 Capital projects funds Combining balance sheet B-1 44-45 Combining statement of revenues, expendi- tures and changes in fund balances B-2 46-47 Water and sewer enterprise fund Comparative balance sheet C-1 50-51 Comparative schedule of operating expenses C-2 52-53 All agency funds Combining balance sheet D-1 56 Combining statement of changes in assets and liabilities D-2 57 General fixed assets account group Comparative schedule of general fixed assets by source E-1 60 Schedule of general fixed assets by function and activity E-2 61 Schedule of changes in general fixed assets by function and activity E-3 62 III (Continued) CITY OF EULESS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT Year ended September 30, 1989 TABLE OF CONTENTS, Continued Table Page(s) STATISTICAL SECTION (Unaudited) General governmental expenditures by function 1 63 General governmental revenues by source 2 64 Property tax levies and collections 3 66-67 Assessed and estimated actual value of taxable property 4 68-69 Property tax rates - all overlapping governments (per $100 of assessed value) 5 70 Principal taxpayers 6 71 Computation of legal debt margin 7 72 Ratio of net general bonded debt to assessed value and net bonded debt per capita 8 74-75 Ratio of annual debt service expenditures for general obligation bonded debt to total general expenditures 9 76 Computation of direct and overlapping debt 10 77 Revenue bond coverage - Water and Sewer Bonds 11 78-79 Demographic statistics 12 80 Property value, construction and bank deposits 13 81 Miscellaneous statistics 14 82-83 IV (This page left blank intentionally) witif I th, Vw October 31, 1989 Mr. Tom Hart City Manager City of Euless, Texas Dear Mr. Hart: "We're Building a Beautiful Tomorrow" The comprehensive annual financial report of the City of Euless, Texas (the "City") for the fiscal year ended September 30, 1989, 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 and results of operations 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 auditors' report on the financial statements and supplemental statements and schedules. The statistical section includes selected financial and demographic information, generally presented on a multiyear basis. REPORTING ENTITY The financial statements, supplemental statements and schedules and statistical information included in this report pertain to all functions and funds under the control of the Mayor and Council of the City of Euless, including agency funds administered and controlled by various elected or appointed officials. 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 a library. VI 201 N. Ector Drive • Euless, Texas 76039-3595 • 817/283-5381 Metro 267-4403 Mr. Tom Hart October 31, 1989 Page 2 Elementary and Secondary education services within the City are provided by the Hurst -Euless -Bedford Independent School Dis- trict. The City Council has no oversight responsibility over the District and, accordingly, financial data for the District are not included in the combined financial statements in this report. ECONOMIC CONDITIONS AND OUTLOOK 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-- D/FW International. Since early 1986, the economic condition of Euless has been one with guarded optimism. With the entire State of Texas suffering through a recession, the last year has brought renewed optimism for Texas and especially the Dallas/Fort Worth metropolitan area. According to Bob Bullock, State Comptroller, in a September press release, "This has been a banner year for a lot of local governments that count on sales tax rebates for revenue." To further illustrate the economic recovery, Euless reported a 17 percent increase in sales tax collections over the 1988 fiscal year. Although the city had a modest increase in building permits issued, the city reported a phenomenal 92 percent increase in building permits for single-family residential construction. Both sales tax collections and new housing starts are excellent indicators of Euless' rebounding economy. The Fort Worth/Arlington area, of which Euless is a part, added over 10,400 jobs since 1988 and unemployment has dropped 1.2 percent. In Euless, unemployment is near its lowest rate in four years. The economic outlook for Euless should reveal a dynamic and prosperous future. In 1988 Euless landed one of the hottest property transactions in Tarrant County with the relocation of Santa Fe Railway and their $7 million annual payroll. This past year was no different as Tarrant Printing moved their corporate headquarters to Euless, Texas. As one of the largest printing companies in North Texas, Tarrant Printing will employ over 140 people and is projected to house 200 plus employees within two years. In addition to Euless' strengthened economy, Tarrant County has experienced rapid growth, primarily due to several major developments that have occurred in Northeast Tarrant County. Construction is already under way on Alliance Airport (H. Ross Perot's development), the nation's first airport designed VII Mr. Tom Hart October 31, 1989 Page 3 specifically for industrial use. Other notable projects are the United States currency plant in Fort Worth, IBM-Solona project, the expansion of American Airlines World Headquarters, as well as other developments in the Euless area. The aggressive growth in the Euless area is projected to continue into the 1990's. The proposed expansion plans at D/FW 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. MAJOR INITIATIVES In preparing the 1989 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. These key programs included a new $1.5 million multipurpose recreation center, implementation of an advanced life support ambulance system, the integration of a Geographic Information System (GIS) to better equip the city to address future concerns regarding infrastructure and environmental needs into the twenty-first century, as well as other important programs to serve the citizens of Euless more efficiently. To begin the fiscal year in October 1983, the city began operating a paramedic -trained ambulance service. In addition to securing the capital equipment necessary and the certified personnel needed to operate effectively, the city trained an additional 11 firefighters to be cross -trained as paramedics. Today, Euless, Texas, is proud to say that a paramedic can be dispatched to any Euless residence and be at the scene in just over three minutes (average response time). Euless' emergency medical service is one of the State's finest (according to response time) and the public reception has been excellent to this service. In mid -year the city officially opened its 26,000 sq.ft. multipurpose recreation center. The center offers racquetball, aerobics, arts and crafts, basketball, weights, and other activities for all citizens, regardless of age. The center is completely accessible for the handicapped. Probably one of the most exciting moments in 1989 was Euless being awarded with a $1 million park grant from the Texas VIII Mr. Tom Hart October 31, 1989 Page 4 Department of Parks and Wildlife. This matching grant will enable Euless to convert 41 acres of mostly floodplain land to soccer fields, nature trails, picnic areas along with an outdoor amphitheater, in addition to other leisure pursuits for Euless residents. This park should be the "showcase" of parks in Tarrant County. In response to rising community concerns over public safety, the City of Euless emphasized both police and fire education activities in the community during 1989. The police department strengthened its anti -drug efforts with both the junior high and senior high school students. Furthermore, police officers began meeting once a month with neighborhood watch programs and instructing residents on methods to deter criminal activity. Traffic safety was another area that received added emphasis, as high traffic accident sites and potential unsafe areas were investigated and appropriate mitigation was implemented. The Euless Fire Department, in addition to providing ambulance service, also increased its efforts in educating the general public. Fire safety education programs were implemented in elementary school levels, CPR classes were offered to interested citizens, accident precautions and first -aid methods were presented to the community at "Care Fair Days" in a local mall. Also, the Euless Fire Department maintained its excellent fire insurance key rate of $0.22, the lowest possible rate in Texas. The City of Euless has taken a proactive approach to addressing America's No. 1 concern --public safety. With a qualified management team in police and fire, the city will address public safety concerns in a professional and responsible manner. THE FUTURE Probably the one area that most cities fail to address properly is infrastructure maintenance. The city has recently implemented a Geographic Information System (GIS) to acquire a better knowledge regarding the city's vast infrastructure inventory. The GIS is a computerized process that enables cities to address any, or all, geographic areas within the 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 GIS transcend all city departments. IX Mr. Tom Hart October 31, 1989 Page 5 The city's economic development department has begun addressing the city's original retail/industrial corridor --State Highway 10. State Highway 10 no longer has the exceedingly high traffic counts or appeal as other areas within the city. In a joint effort with the City of Hurst, the two cities are in the process of developing a strategic plan and marketing plan to revitalize a once vibrant economic area. During 1990 the city will have implemented a professional purchasing department complete with appropriate policies, central warehousing and stringent controls over the city's investment in goods and services. The city is also preparing architectural plans for a mini - conference center/training facility. Since the Hurst -Euless Bedford area is void of a conference center and training facility, the city is preparing plans to renovate an existing city facility into a conference center that could accommodate 75- 80 people for banquet/dinner functions. Naturally, the facility could be used to provide in-house training for police and fire personnel who currently leave the city to receive most training exercises. The city's hotel/motel tax fund will help finance the construction. Euless hotels will now have adequate space to host functions requiring meeting rooms. There are positive trends taking place in all departments despite past economic problems. The past economic recession has forced city leaders and staff to become more entrepreneurial and innovative and it is this type of attitude that will lead Euless successfully into the 1990's. ACCOUNTING SYSTEM AND BUDGETARY CONTROL The City's accounting records for the Water and Sewer Enterprise Fund 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. One of the objectives of the City's financial accounting system is to provide adequate internal controls. Internal controls are designed to provide reasonable, but not absolute, assurance regarding the safeguarding of assets against loss from unauthorized use or disposition and the reliability of financial Mr. Tom Hart October 31, 1989 Page 6 records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived and the evaluation of costs and benefits requires estimates and judgment by management. We believe that the City's internal controls adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions. Budgetary control is accomplished by the adoption of an annual operating budget for the general governmental functions and the Water and Sewer Enterprise Fund. Detail control is accomplished by maintaining expenditures by line item account within each operating department within each operating fund. Further explanation of the basis of accounting for all fund types and the City's budgetary controls are furnished in the accompanying Notes to Financial Statements. GENERAL GOVERNMENTAL FUNCTIONS Revenues for general governmental functions and general debt service totaled $10,099,214 in 1989, an increase of 3.52 percent over 1988. The increase in revenues is primarily attributable to increased general property tax rates and increased general sales taxes. Revenues were hindered slightly by the expiration of an inter -city fire service contract. The amount of revenue from various sources and the changes from the previous year are reflected in the following table: Revenue Source General property taxes Gross receipts taxes General sales taxes Licenses and permits Fines and fees Interest income Intergovernmental Other Percent Amount of total $ 5,117,180 1,140,932 2,136,541 222,424 506,748 419,945 265 658,797 Increase (decrease) from 1988 50.15% $ 36,353 11.18 (4,627) 20.94 318,025 2.18 58,393 4.97 5,597 4.12 77,139 (380,347) 6.46 336,477 $10,202,832 100.00% XI $ 447,010 Percent of increase (decrease) .72% (.40) 17.49 35.60 1.12 22.50 (99.93) 104.39 Mr. Tom Hart October 31, 1989 Page 7 In addition to the above general revenue, $1,145,592 was trans- ferred from the Water and Sewer Enterprise Fund and $121,000 was transferred from the Capital Projects Fund to the General Fund. Expenditures for general governmental purposes and general debt service totaled $10,848,320 an increase of 3.97 percent over 1988. 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 and recreation Bonded debt retirement Bonded debt interest and fees Nondepartmental Percent Amount of total $ 1,385,187 5,643,811 480,722 361,417 970,633 589,342 768,347 648,861 $10,848,320 12.77% 52.02 4.43 3.33 8.95 5.43 7.08 5.99 Increase (decrease) from 1988 $(50,945) 140,663 84,150 15,348 99,171 39,610 4,781 81,066 100.00% $413,844 Percent of increase (decrease) (3.55)% 2.56 21.22 4.43 11.38 7.21 .63 14.8 The increase in public safety expenditures is due primarily to increased expenditures for police and fire protection in the current year. The increase in streets is due primarily to increased expenditures for repairs in the current year. The increase in parks and recreation is due primarily to increased recreational classes. WATER AND SEWER ENTERPRISE FUND The City's water and sewer utility showed a gain in sewer service revenues and in number of customers in the current year. There was a decrease in water revenue due to excessive rainfall during the summer months. Comparative data for the past two fiscal years are presented in the following table. XII Mr. Tom Hart October 31, 1989 Page 8 Net income (loss) Add (deduct): Amortization of capitalized water and sewer facility contract rights Depreciation Interest on revenue bonds Transfers to other funds - net Principal payments on obligations under capital lease 1989 1988 $ 8,263 $ (695,044) 623,112 737,392 347,301 1,145,592 (576,834) 495,843 802,767 367,888 523,345 (354,551) Net revenue available for debt service $2,2841826 $1,140,248 Average annual debt service $ 478,722 $ 490,072 Coverage 4.77 times 2.33 times Net income increased primarily due to a refund received from the Trinity River authority for less water usage during the prior year, net of increased transfers to other funds. Increased amortization of capitalized water and sewer facility contract rights is due to a $4,676,039 increase in contract rights. During the year, $310,000 of regularly maturing revenue bonds were retired in the Water and Sewer Enterprise Fund. All reserve and accounting requirements have been met in accordance with the ordinances authorizing the issuance of the City's Water and Sewer Revenue Bonds. DEBT ADMINISTRATION General obligation debt, which is directly tax supported, totaled $11,475,440 at September 30, 1989. The ratio of net bonded debt per capita are useful indicators of the City's debt position for municipal management, citizens and investors. These data for the City at September 30, 1989 were as follows: XIII Mr. Tom Hart October 31, 1989 Page 9 Net bonded debt Ratio of net bonded debt to assessed value $10,906,633 1.01 Net bonded debt per capita $270.97 Revenue bonds, which are secured by the net revenues of the Water and Sewer Enterprise Fund, totaled $4,935,000 at September 30, 1989. Tables 8-11 in the Statistical Section of this report present more detailed information about the debt position of the City. The City's bonds are currently rated by Moody's Investor Services and Standard & Poor's as follows: General obligation bonds Revenue bonds CASH MANAGEMENT Moody's Standard & Poor's A-1 A+ A A The City maintains cash accounts on a consolidated basis for investment purposes. These short-term investments consist of certificates of deposit and government securities which are stated at cost. Interest income from the investments was allocated to various funds based primarily on the average cash balances of the funds. RISK MANAGEMENT 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 insurance policy covers individual claims in excess of $40,000. 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 $500,000. XIV Mr. Tom Hart October 31, 1989 Page 10 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, 1989, the general fixed assets of the City amounted to $9,752,003. 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. INDEPENDENT AUDIT The City Charter requires an annual audit to be made of the books of account, financial records and transactions of all administra- tive departments of the City by a certified public accounting firm selected by the City Council. This requirement has been complied with and the auditors' report 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, 1988. 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 submitting it to the GFOA to determine its eligibility for another certificate. ACKNOWLEDGEMENTS The preparation of this report on a timely basis could not he accomplished without the efficient and dedicated services of the entire staff of the Finance Department. I would like to express my appreciation to all members of the Department who assisted and contributed to its preparation. I would also like to thank your XV Mr. Tom Hart October 31, 1989 Page 11 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. Respectfully submitted, Jim Hickerson, CGFO XVI 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, 1988 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. President y#70,/i.oet Executive Director XVII City of Euless Organizational Chart Accounting Data Processing Budget Municipal Court George Boring City Judge Jim Nickerson, CGFO Asst. City Manager/Dir. of Finance Bob McFarland City Au. Randy Byers Jay Heilman Dir of Sir & Utl Dir of Comm Sery Water Waste Water Streets Service Center Traffic Safety Personnel Health Insurance Parks Recreation Library City Council Tom Hart City Manger K.B. Fuller Police Chief I 1 H. Kay Godbey, CMC/AAE City Secretary Steve Norwood Asst to CM/Eco. Dev. Dir. Police Admin Patrol Division Criminal Invst Service Division Pub Safety Dispatch E.O.C. Lee Koontz Fire Chief Fire Admin. Fire Suppression Jim Nickerson Court Clerk James Knight,P.E. Dir. Plan & Eng Engineering Planning Const. Inspection Capt. Improvements N. K. Godbey, CMC/AAE Asst. City Mgr./City Secretery Lynn Shackelford Dir of Admin Ser Facilities Maint Bldg. Const. Mgmt Risk Management Fleet Management John Craig Dir. Insp. Ser. Bldg Inspection Envrmt Health fire Marshals Off (This page left blank intentionally) XIX FINANCIAL SECTION 2200 Texas American Bank Building 500 Throckmorton Fort Worth, Texas 76102 Telephone: (817) 335-1900 Fax: (817) 335-5603 Telex: 758521 REPORT OF INDEPENDENT AUDITORS The Honorable Mayor and City Council City of Euless, Texas We have audited the accompanying general purpose financial statements of the City of Euless, Texas (the "City") at September 30, 1989 and for the year then ended, as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the City at September 30, 1989, the results of its operations for the year then ended and the cash flows of the Water and Sewer Enterprise Fund for the year then ended, in conformity with generally accepted accounting principles. 0ur audit has been made primarily for the purpose of expressing an opinion on the general purpose financial statements taken as a whole. The accompanying additional financial information listed as supplemental statements and schedules in the table of contents is presented for purposes of additional analysis and is not a required part of the general purpose financial statements of the City. Such information has been subjected to the procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly stated in all material respects in relation to the general purpose financial statements taken as a -1- whole. The statistical information listed in the statistical section of the table of contents (tables 1-14) has not been subjected to the procedures applied in the audit of the general purpose financial statements, and, accordingly, we express no opinion on it. October 31, 1989 (This page left blank intentionally) CITY OF EULESS, TEXAS COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS September 30, 1989 With comparative totals for September 30, 1988 ASSETS AND OTHER DEBITS Governmental fund types Special Debt Capital General Revenue Service Projects Fund Funds Fund Funds Cash and cash equivalents $2,222,461 $274,787 $640,376 $2,239,869 Receivables: Delinquent property taxes, net of allowance for doubtful collections of $188,302 99,895 43,694 Accounts receivable 4,086 Unbilled water and sewer revenue Deposits 8,628 Accrued interest receivable 51,750 3,369 Due from other funds (Note 10) 146,103 775 Due from other governments 131,084 Restricted assets (Notes 2, 3 and 4) General fixed assets (Note 6) Net utility plant in service (Note 6) Capitalized water and sewer facility contract rights less accumulated amortization of $3,904,918 (Note 5) Amount available for retirement of general long-term debt Amount to be provided for retirement of general long-term debt $2,664t007 $274,787 $684,070 $2,244,013 EXHIBIT 1 Proprietary fund type Water and Sewer Enterprise Fund $ 1,774,902 683,049 339,038 36,005 132,000 3,208,503 19,916,136 20,562,707 Fiduciary fund type Agency Funds $1,320,616 68,958 Account groups General fixed assets 9,752,003 General long-term debt Totals (memorandum only) 1989 1988 - $ 8,473,011 $ 7,797,382 568,807 10,906,633 $46,652,340 $1,389,574 $9,752,003 $11,475,440 143,589 143,007 687,135 635,571 339,038 339,038 8,628 91,124 92,450 347,836 748,774 131,084 109,609 3,208,503 3,506,202 9,752,003 8,760,181 19,916,136 20,040,770 20,562,707 16,509,780 568,807 383,429 10,906,633 10,181,354 $75,136,234 $69,247,547 -5- (Continued) CITY OF EULESS, TEXAS COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS September 30, 1989 With comparative totals for September (Continued) LIABILITIES AND FUND EQUITY Liabilities: Accounts payable Accrued salaries and wages Customer and escrow deposits Accrued interest Due to other funds (Note 10) Obligations under capitalized water and sewer facility contract rights (Note 5) Bonds payable (Note 3) Deferred revenue Commitments and contingent liabilities (Notes 8 and 9) Total liabilities Fund equity: Investment in general fixed assets Contributed capital (Note 11) Fund balances: Reserved: For recreation equipment For public safety For park improvements For drug enforcement For recycling Unreserved: Designated for: Contingency Emergency Undesignated Retained earnings: Reserved for debt service (Notes 3 and 4) Unreserved Total fund balances/ retained earnings Total equity General Fund 30, 1988 Governmental fund types Special Revenue Funds Debt Service Fund $ 152,570 $ 66,504 $ 84,306 Capital Projects Funds 59,671 41,000 76,112 132,000 89,511 39,151 386,058 107,504 115,263 132,000 24,717 119,759 539 103,561 2,812 628,125 500,000 898,436 167,283 568,807 2,112,013 2,277,949 167,283 568,807 2,112,013 2,277,949 167,283 568,807 2,112,013 $2,664,007 $274,787 $684,070 $2,244,013 See notes to financial statements. -6- Proprietary Fiduciary fund type fund type Water and Sewer Enterprise Agency Fund Funds $ 8,303 $ 181,082 $ 13,120 490,518 1,207,717 70,845 38,278 775 21,713,627 4,935,000 135,073 27,404,764 1,389,574 13,786,857 2,396,315 3,064,404 Account groups General fixed assets General long-term debt EXHIBIT 1 (continued) Totals (memorandum only) 1989 408,459 $ 97,426 1,698,235 70,845 347,836 1988 848,162 103,274 1,705,812 75,219 748,774 21,713,627 17,614,422 11,475,440 16,410,440 15,809,783 263,735 273,110 - 11,475,440 41,010,603 37,178,556 - 9,752,003 5,460.719 - - - 19,247,576 - 9,752,003 - $46,652,340 $1,389,574 $9,752,003 $111475,440 9,752,003 8,760,181 13,786,857 13,694,612 24,717 119,759 539 103,561 2,812 628,125 500,000 3,746,539 2,396,315 3,064,404 10,586,771 34,125,631 $75,136,234 10,943 153,969 5,129 21,452 665,347 500,000 2,804,902 2,395,610 3,056,846 9,614,198 32,068,991 $69,247,547 -7- CITY OF EULESS, TEXAS COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES Year ended September 30, 1989 With comparative totals for year ended September 30, 1988 Governmental fund types Special Debt Capital General Revenue Service Projects Fund Funds Fund Funds Revenues: General property tax $3,574,113 $ - $1,543,067 $ Gross receipts tax 1,140,932 131,978 General sales tax 2,136,541 Licenses and permits 222,424 Fines and fees 506,748 Interest income 419,945 23,203 Intergovernmental 265 Other revenues 658,797 924,425 17,253 Total revenues 8,659,765 1,056,403 1,543,067 40,456 Expenditures: Current: City Council 33,159 - General government 435,762 Civil Service 114,971 Police Department 3,156,658 Legal and Corporation Court 233,922 Fire Department 2,011,991 Street Department 480,722 Traffic Safety Planning and development 117,961 117,344 Library 361,417 Recreation Department 181,004 Swimming pools 27,227 Civic Center 352,430 Code enforcement 121,658 Health and animal shelter 181,978 Jail fund 27,268 Recreation classes 200,645 Insurance claims and fees 770,090 Nondepartmental 648,861 Parks Department 561,757 Debt service: Principal retirement 589,342 Interest and service charges 768,347 EXHIBIT 2 Totals (memorandum only) 1989 $ 5,117,180 1,272,910 2,136,541 222,424 506,748 443,148 265 1,600,475 11,299,691 1988 $ 5,080,827 1,256,495 1,818,516 164,031 501,151 386,612 380,612 1,095,004 10,683,248 33,159 18,316 435,762 443,947 114,971 91,164 3,156,658 2,876,512 233,922 195,377 2,011,991 1,833,741 480,722 396,572 79,372 235,305 236,090 361,417 346,069 181,004 163,067 27,227 37,633 352,430 335,959 121,658 127,154 181,978 163,313 27,268 122,883 200,645 145,240 770,090 669,150 648,861 567,795 561,757 525,522 589,342 549,732 768,347 763,566 CITY OF EULESS, TEXAS COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES Year ended September 30, 1989 With comparative totals for year ended September 30, 1988 Expenditures (continued): Debt service (continued): Capital outlay and main- tenance Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Sale of general obligation bonds (Note 3) Operating transfers in Operating transfers out Total other financing sources (uses) Excess of revenues and other financing sources over expenditures and other financing uses Fund balances, beginning of year Fund balances, end of year (Continued) General Fund Governmental Special Revenue Funds fund types Debt Capital Service Fund Projects Funds $ 241,240 $ - $ - $ 1,225,773 9,490,631 887,434 1,357,689 1,225,773 (830,866) 168,969 1,198,676 (197,771) (133,688) 1,000,905 (133,688) 185,378 (1,185,317) - 1,480,554 399,375 (121,000) - 1,758,929 170,039 35,281 185,378 2,107,910 132,002 383,429 $2,277,949 $ 167,283 $ 568,807 See notes to financial statements. 573,612 1,538,401 $ 2,112,013 -10- EXHIBIT 2 (continued) Totals (memorandum only) 1989 $ 1,467,013 12,961,527 (1,661,836) 1,480,554 1,598,051 (452,459) 2,626,146 1988 $ 2,523,406 13,211,580 (2,528,332) 430,000 768,345 (245,000) 953,345 964,310 (1,574,987) 4,161,742 5,736,729 $ 5,126,052 $ 4,161,742 CITY OF EULESS, TEXAS COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - GENERAL FUND Year ended September 30, 1989 General property tax: Current and delinquent taxes Penalty and interest Gross receipts tax: Southwestern Bell Telephone Company Texas Power and Light Company Lone Star Gas Company Cable TV Tarrant County Waste Disposal Others General sales tax Licenses and permits: Building permits Street inspections Miscellaneous permits Electric licenses Fines and fees: Corporation Court fines Dog licenses and pound fees Ambulance fees Actual $3,505,092 69,021 3,574,113 252,452 642,007 105,543 54,792 26,342 59,796 1,140,932 2,136,541 118,592 95,281 8,551 222,424 413,147 8,734 84,867 506,748 EXHIBIT 3 Variance favorable Budget (unfavorable) $3,480,608 $ 50,000 3,530,608 250,000 625,000 130,000 62,000 27,500 65,750 1,160,250 1,805,000 85,000 10,000 71,150 9,500 175,650 480,000 9,000 75,000 564,000 24,484 19,021 43,505 2,452 17,007 (24,457) (7,208) (1,158) (5,954) (19,318) 331,541 33,592 (10,000) 24,131 (949) 46,774 (66,853) (266) 9,867 (57,252) CITY OF EULESS, TEXAS COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - GENERAL FUND Year ended September 30, 1989 Interest income Intergovernmental Other revenues: Library receipts Rental income Miscellaneous income Texas Court cost service fee Swimming pools Total revenues 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 Nondepartmental Parks Department Capital outlay and maintenance Total expenditures (Continued) EXHIBIT 3 (continued) Variance favorable Actual Budget (unfavorable) $ 419,945 $ 265 350,000 $ 69,945 265 13,060 15,000 (1,940) 5,703 40,000 (34,297) 615,744 202,000 413,744 14,278 12,000 2,278 10,012 15,000 (4,988) 658,797 284,000 374,797 8,659,765 7,869,508 790,257 33,159 29,000 (4,159) 435,762 420,781 (14,981) 114,971 110,239 (4,732) 3,156,658 3,229,744 73,086 233,922 239,460 5,538 2,011,991 1,955,500 (56,491) 480,722 521,988 41,266 117,961 120,250 2,289 361,417 374,766 13,349 181,004 267,505 86,501 27,227 52,200 24,973 352,430 449,135 96,705 121,658 137,368 15,710 181,978 175,823 (6,155) 27,268 (27,268) 200,645 (200,645) 648,861 710,311 61,450 561,757 561,129 (628) 241,240 (241,240) 9,490,631 9,355,199 (135,432) -13- (Continued) CITY OF EULESS, TEXAS COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - GENERAL FUND Year ended September 30, 1989 (Continued) Excess of expenditures over revenues Other financing sources (uses): Operating transfers in Operating transfers out Total other financing sources Excess (deficiency) of revenues and other financing sources over expendi- tures and other financing uses Fund balance, beginning of year Fund balance, end of year Actual Budget EXHIBIT 3 (continued) Variance favorable (unfavorable) $ (830,866) $(1,485,691) $ 654,825 1,198,676 (197,771) 1,000,905 170,039 2,107,910 1,132,230 1,132,230 (353,461) 2,107,910 $2,277,949 $ 1,754,449, See notes to financial statements. 66,446 (197,771) (131,325) 523,500 $ 523,500 -14- EXHIBIT 4 CITY OF EULESS, TEXAS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS - PROPRIETARY FUND TYPE - WATER AND SEWER ENTERPRISE FUND Year ended September 30, 1989 Operating revenues: Water service $ 4,178,004 Sewer service 2,446,837 Water and sewer tap fees 72,164 Service fees and miscellaneous 199,792 Total operating revenues 6,896,797 Operating expenses: General and administrative 328,012 Water production (160,762) Water distribution 322,186 Utility engineering 141,494 Sewage collection and treatment 527,279 Nondepartmental 672,460 Service center 389,775 Amortization of capitalized water and sewer facility contract rights (Note 5) 623,112 Depreciation 737,392 Total operating expenses 3,580,948 Operating income 3,315,849 Nonoperating revenues (expenses): Investment income 545,974 Loss on sale of equipment (5,184) Interest on revenue bonds (347,301) Interest on obligations under capitalized water and sewer facility contract rights (2,355,483) Total nonoperating expenses, net (2,161,994) Income before operating transfers 1,153,855 Operating transfers from other funds - Operating transfers to other funds (1,145,592) Net income 8,263 Retained earnings, beginning of year 5,452,456 Retained earnings, end of year $ 5,460,719 See notes to financial statements. -15- EXHIBIT 5 CITY OF EULESS, TEXAS STATEMENT OF CASH FLOWS - PROPRIETARY FUND TYPE - WATER AND SEWER ENTERPRISE FUND Year ended September 30, 1989 Cash flows from operating activities: Operating income $ 3,315,849 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation expense 737,392 Amortization of capital contract rights 623,112 Increase in accounts receivable (51,563) Increase in due from other funds (132,000) Decrease in accounts payable (69,679) Decrease in accrued salaries and wages (747) Increase in customer deposits 14,518 Increase in interfund payables 276 Decrease in deferred revenue (7,800) Total adjustments 1,113,509 Net cash provided by operating activities 4,429,358 Cash flows from noncapital financing activities: Interest paid on revenue bonds (351,675) Reduction in revenue bonds payable (310,000) Operating transfers to other funds (1,145,592) Net cash used for noncapital financing activities (1,807,267) Cash flows from capital financing activities: Contributions in aid to construction Principal payments on obligations under capital lease 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 92,245 (576,834) (2,355,483) (621,041) 3,099 Net cash used for capital financing activities i(3,458,014) Cash flows from investing activities: Decrease in restricted assets Interest received on investments 297,699 543,773 CITY OF EULESS, TEXAS STATEMENT OF CASH FLOWS - PROPRIETARY FUND TYPE - WATER AND SEWER ENTERPRISE FUND Year ended September 30, 1989 (Continued) Net cash provided by investing activities Net increase in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year Noncash investing, capital, and financing activities: During the year, the City increased their capitalized water and sewer facility contract rights and the related obligation to the Trinity River Authority of Texas by $4,676,039. See notes to financial statements. EXHIBIT 5 (continued) $ 841,472 5,549 1,769,353 $ 1,774,902 -17- CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS September 30, 1989 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 principles. The City's significant accounting policies are described below. A. REPORTING ENTITY The combined financial statements of the City include all government activities and entities for which the City exercises oversight responsibility. The criteria considered in determining governmental activities and entities to be reported within the City's combined financial statements include the degree of oversight responsibility (e.g. financial interdepen- dency, selection of governing authority, designation of management, ability to significantly influence operations) exercised by the City over a government activity or entity, the City's accountability for the activity'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 contemplated 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; -18- (Continued) CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS September 30, 1989 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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. 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, proprietary 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 disbursement of earmarked monies (special revenue funds), the acquisition or construction of general fixed assets (capital projects funds) and the -19- (Continued) CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS September 30, 1989 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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). Fiduciary funds are used to account for assets held on behalf of outside parties, including other governments, or on behalf of other funds within the City. Agency funds generally are used to account for assets that the City holds on behalf of others as their agent. 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 current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures 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., net total assets) is segregated into contributed capital and -20- (Continued) CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS September 30, 1989 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES retained earnings components. Proprietary fund -type operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets. The modified accrual basis of accounting is used by all governmental 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 availability period is used for revenue recognition for all other governmental fund revenues. Expenditures are recorded when the related fund liability is incurred. Principal and interest on general long-term debt are recorded as fund liabilities when due or when amounts have been accumulated in the debt service fund for payments to be made early in the following year. Those revenues 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 susceptible 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. 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 the current period. Deferred revenues also arise when resources are -21- (Continued) CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS September 30, 1989 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 management 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 principles. Budgeted amounts are as -22- (Continued) CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS September 30, 1989 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES originally adopted and amended by the City Council. Appropriations and encumbrances lapse at year-end. (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) Budgetary data for the Water and Sewer Enterprise Fund has not been presented since the reporting on such budget is not legally required. (11) Expenditures exceeded appropriations in the general fund for the year ended September 30, 1989. Differences were covered with transfers from the Water and Sewer Enterprise Fund authorized by the City Manager. E. CASH, CASH EQUIVALENTS AND INVESTMENTS Substantially all operating cash, restricted cash and cash equivalents are maintained in consolidated cash and cash equivalent accounts. Cash equivalents consist solely of certificates of deposits. -23- (Continued) CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS September 30, 1989 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Investments consist solely of U.S. Government securities and 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 appropria- tion for the fiscal year beginning on October 1, are due October 1, and become delinquent on February 1. Prop- erty 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 are limited by the Texas Constitution to $2.50 per $100 of assessed valuation. The City's current tax rate is $.46 per $100 of assessed valuation and assessed valuation is approximately 100 percent 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 con- sisting 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. -24- (Continued) CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS September 30, 1989 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures for utility plant are capitalized in the Water and Sewer Enterprise Fund. Depreciation is recorded on each class of depreciable property in the Water and Sewer Enterprise Fund utilizing the straight- line method over the following estimated useful lives of the assets: Equipment Waterworks and sanitary sewer system 5 - 15 years 33-1/3 years Costs related to repairs and maintenance are recorded as expenditures or expenses. Significant renovations and improvements are capitalized. H. EMPLOYEES' VACATION AND SICK LEAVE Employees may accumulate a maximum of 20 days of vacation. 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. RESERVES 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. 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 and operations. Complete comparative data (i.e. presentation of prior year totals by fund type in each of the statements) have not been presented since their inclusion would make the statements unduly complex and difficult to read. -25- (Continued) CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS September 30, 1989 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES K. TOTALS (MEMORANDUM ONLY) COLUMN ON COMBINED STATEMENTS The totals column on combined statements are captioned Memorandum Only to indicate that they are pre- sented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations, or changes in financial position in conformity with generally accepted accounting princi- ples. Neither is such data comparable to a consolida- tion. Interfund eliminations have not been made in the aggregation of this data. L. INTERFUND TRANSACTIONS Quasi -external transactions are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expendi- tures/expenses initially made from it that are properly applicable to another fund, are recorded as expendi- tures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. All other interfund transactions, except quasi -external transactions 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. 2. 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. 3. BONDS PAYABLE During 1989, the City issued $1,500,000 in general obligation bonds, in the form of certificates of obligation, for the Capital Projects Fund. Bonds were recorded net of -26- (Continued) CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS September 30, 1989 3. BONDS PAYABLE discount. Outstanding bonds were payments of $589,342 and $310,000 Bonds and Water and Sewer Revenue reduced by principal on General Obligation Bonds, respectively. Bonded debt outstanding at September 30, 1989, consists of the following: General Obligation Bonds Range of interest rates Outstanding balance Current Long-term maturities maturities 6.00 to 10% $11,475,440 $639,281 $10,836,159 Water and Sewer Revenue Bonds 4.5 to 10.75% 4,935,000 320,000 4,615,000 $16,410,440 $959,281 $15,451,159 The bonds mature serially through the year 2007 and have various call options whereby they may be redeemed during certain periods prior to maturity. A schedule of bond and interest maturities is as follows: 1990 1991 1992 1993 1994 1995-1999 2000-2004 2005-2007 Less interest Principal as General Obligation Bonds $ 1,497,978 1,521,336 1,421,663 1,417,510 1,437,123 6,891,090 5,063,684 446,250 19,696,634 8,221,194 $11,475,440 Water and Sewer Revenue Bonds $ 651,225 602,825 553,900 547,700 544,925 2,689,625 1 ,938 ,725 130,625 7,659,550 2,724,550 $4,935,000 General Obligation Bonds of September 30, 1989, amounted Total $ 2,149,203 2,124,161 1,975,563 1,965,210 1,982,048 9,580,715 7,002,409 576,875 27,356,184 10,945,744 $16,410,440 authorized and unissued to $300,000. Water and (Continued) -27- CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS September 30, 1989 3. BONDS PAYABLE Sewer Revenue Bonds authorized and unissued as of September 30, 1989, amounted to $1,200,000. 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 principal and interest requirements of the bonds outstanding. Reserve for emergency - to be used for payment of extraordinary repairs or replacements to the system necessitated by an emergency for which no other funds are available. Should the reserve for bond debt service and/or reserve for bond retirement prove deficient, the reserve for emergency shall be used for the purpose of meeting principal and/or interest requirements of the bonds. All requirements for funding of the above reserves were met at September 30, 1989. Investments of funds included in the bond reserve and emergency accounts are restricted to direct obligations of or obligations unconditionally guaranteed by the United States of America having maturities not in excess of ten and five years, respectively. -28- (Continued) CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS September 30, 1989 4. PROPERTY SALE PROCEEDS ACCOUNTS 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 equal to 32.33 percent of the $5,800,000 of revenue bonds issued by the City for the original purchase of the combined system. The property sale proceeds must be applied solely to the prepayment or prior redemption of the revenue bonds and investment income of the funds may be applied to current revenue bond interest in an amount not to exceed 32.33 percent of the requirement on the amount of bonds then outstanding. As of September 30, 1989, the balance in the property sales proceeds account was $439,622 and is included in restricted assets in the accompanying balance sheet. 5. WATER AND SEWER FACILITY CONTRACT RIGHTS Under the City's long-term contracts with the Trinity River Authority of Texas (TRA) for sewer treatment services and water supply, the City is obligated for the next 34 years to share in the costs of operations, maintenance and debt service of TRA. Payments under these contracts approximated $3,838,183 in 1989. The amounts under the contracts representing debt service have been capitalized and the related obligation included in the accompanying balance sheet. The capitalized water and sewer facility contract rights are being amortized on a straight-line basis over the original 50 year agreement. The City's share of the related TRA debt service is adjusted each year based on the City's usage compared to that of other users. The City's obligation is amortized based on its current usage. The following is a schedule by years of estimated future minimum requirements under the contracts (debt service portion) together with the present value of the net minimum requirements as of September 30, 1989: -29- (Continued) CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS September 30, 1989 5. WATER AND SEWER FACILITY CONTRACT RIGHTS Year ending September 30: 1990 1991 1992 1993 1994 Thereafter Less amount representing interest Present value of minimum requirements 6. FIXED ASSETS The general fixed $ 2,957,758 3,089,146 3,113,835 3,104,436 3,117,277 30,241,529 45,623,981 23,910,354 $21 ,713,627 following is a summary of changes in the assets account group during the fiscal year: Land Buildings Improvements other than buildings Machinery and equipment Construction in progress Total general fixed assets The following Enterprise Fund utility 1989: Balance September 30, 1988 $ 869,571 3,583,107 476,943 3,491,827 338,733_ Additions Deductions $ 808 $ 987,945 106,072 334,040 98,310 338,733 Balance September 30, 1989 $ 870,379 4,571,052 583,015 3,727,557 $8,760,181 $1,428,865 $437,043 $9,752,003 is a summary of Water and Sewer plant in service at September 30, Land Equipment Waterworks and sanitary sewer Less accumulated depreciation system $ 1,528,966 847,020 24,971,104 27,347,090 7,430,954 $19,916,136 -30- (Continued) CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS September 30, 1989 7. SERVICE CENTER The Water and Sewer Enterprise Fund historically bears the major portion of the operating costs of the City's service center which provides services to all city departments. 8. COMMITMENTS AND CONTINGENCIES The City has participated in a number of State and Federally assisted grant programs, principal of which was Federal Revenue Sharing. These programs were subject to financial and compliance audits by the grantors or their representatives, the purpose of which was to insure compliance with conditions precedent to the granting of funds. Any liability for reimbursement which may arise as the result of these audits is not believed to he material. At September 30, 1989, the City did not have any significant long-term lease agreements. 9. LITIGATION The City is involved in a number of lawsuits arising in the ordinary course of business. In the opinion of the City's legal counsel and management, any liability resulting from such suits would not be material in relation to the City's financial position. 10. INTERFUND ASSETS/LIABILITIES Due from/to other funds: Receivable fund General Capital projects: Street and drainage Payable fund Insurance Debt service Water and sewer Developers' escrow Amount $ 41,000 76,112 28,991 775 -31- (Continued) CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS September 30, 1989 10. INTERFUND ASSETS/LIABILITIES (continued) Receivable fund Payable fund Amount Agency: Social Security General $ 59,671 Social Security Water and sewer 9,287 Water and sewer Capital projects 132,000 $347,836 11. CONTRIBUTED CAPITAL During the current year, contributed capital of the Water and Sewer Enterprise Fund increased by developer's contributions in aid to construction in the amount of $92,245. 12. DEPOSITS AND INVESTMENTS At September 30, 1989, the carrying amount of the City's deposits was $9,765,313 and the bank balance was $10,030,741. The City's deposits are categorized as either (1) insured or collateralized with securities held by the City or by its agent in the City's name, (2) collateralized with securities held by the pledging financial institution's trust department in the City's name or (3) uncollateralized, as follows: Category Deposit amount 1 $ 6,552,550 2 3,282,494 3 195,697 $10,0301741 -32- (Continued) CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS September 30, 1989 12. DEPOSITS AND INVESTMENTS At September 30, 1989, the carrying amount of the City's investments was $1,855,851 and the market value was $1,833,934. All of the investments were held by the City's agent in the City's name. 13. RISK MANAGEMENT The City participates in the Texas Municipal League Joint Self Insurance Fund ("TMLIF") to provide both general liability and property insurance. The City, along with other participating entities, contribute 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 $40,000. During 1989, the City and the City's employees paid premiums amounting to approximately $549,000 and $192,000, respectively. 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, 1989. The City also maintains self-insurance for workmen's compen- sation. 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 $500,000. During 1989, the City contributed approximately $183,000 to the fund. 14. 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 -33- (Continued) CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS September 30, 1989 14. EMPLOYEE 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 substantially 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. Benefits depend upon the sum of the employee's 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%a, 150%o, or 200%o) of the employee's accumulated contributions. In addition, the City can grant as often as annually another type of monetary credit referred to as an updated service credit. This credit is a theoretical amount which, when added to the employee's accumulated contributions and the monetary credits for service since the plan began, would be the total monetary credits and employee contributions accumulated with interest if the current employee contribution rate and 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 the employer -financed monetary credits, even if he was vested. 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. -34- (Continued) CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS September 30, 1989 14. EMPLOYEE RETIREMENT SYSTEM Contributions - The contribution rate for the employees is 7% of their salaries, and the City matching percent is currently 11.09%, both as adopted by the governing body of the City. Under the state law governing TMRS, the City contribution rate is annually determined by the actuary. Part of the City contribution rate (the normal cost) is to fund the currently accruing monetary credits, with the other part (the prior service contribution rate) calculated as the level percent of payroll needed to amortize the unfunded actuarial liability over the remainder of the plan's 25-year amortization period. When the City periodically adopts updated service credits and increases in annuities in effect, the increased unfunded actuarial liability is to be amortized over a new 25-year period. Currently, the unfunded actuarial liability is being amortized over the 25-year period which began January, 1989. The unit credit actuarial cost method is used for determining the city contribution rate. Contributions are made monthly by both the employees and the City. Since the City needs to know its contribution rate in advance to budget for it, 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 1989 was $6,956,588, and the City's contributions were based on a payroll of 6,781,968. Both the City and the covered employees made the required contributions, amounting to $733,986 (10.04% of covered payroll for the months in calendar year 1988 and 11.09% for the months in calendar year 1989) for the City and $474,740 (7%) for the employees. The City adopted changes in the plan since the previous actuarial valuation, which had the effect of increasing the City's contribution rate for 1989 by 0.20% of payroll. 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 due to the monetary credits -35- (Continued) CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS September 30, 1989 14. EMPLOYEE RETIREMENT SYSTEM granted by the City for past services rendered and which can have additions to the unfunded pension benefit obligation through the periodic adoption of increases in benefit credits and benefits. Statement No. 5 of the Governmental Accounting Standards Board (GASB 5) defines 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 sufficient assets to pay benefits when due, and make comparisons among public employee pension plans. The City's 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, 1988. Because of the money -purchase 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 103.6% of book value as of December 31, 1988. Pension benefit obligation - Annuitants currently receiving benefits Terminated employees Current employees: Accumulated employee contributions including allocated invested earnings Employer -financed vested Employer -financed nonvested $ 474,700 551,100 3,383,500 5,462,200 1,423,800 Total $11,295,300 -36- (Continued) CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS September 30, 1989 14. EMPLOYEE RETIREMENT SYSTEM Net assets available for benefits, at book value Unfunded pension benefit obligation $ 8,594,400 $ 2,700,900 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 changes in actuarial assumptions since the previous actuarial valuation, which had the effect of decreasing the pension benefit obligation by $1,359,300. Because of the one-year lag between the actuarial valuation date and the calendar year when the newly calculated rate goes into effect, the new actuarial assumptions will first affect the 1990 contribution rate for the City. The amounts above also reflect the adoption of changes in the plan since the previous actuarial valuation which had the effect of increasing the pension benefit obligation by $441,800. (This page left blank intentionally) SPECIAL REVENUE FUNDS Industrial Development Fund - to account for the revenues and expenditures used in developing new industry in the City. Future activity of this type will be accounted for in the General Fund. 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. 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 expenditures from providing self-insurance for workmen's compensation. ASSETS CITY OF EULESS, TEXAS SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET September 30, 1989 Industrial Hotel/ Totals Development Motel Insurance Workmen's Fund Fund Fund Compensation 1989 1988 A-1 Cash and cash equivalents $ - $12,948 $142,373 $119,466 $274,787 $173,002 Due from other funds 66,504 $12,948 $142,373 $119,466 $274,787 $239,506 LIABILITIES AND FUND EQUITY Accounts pay- able $ - $ - $ 66,504 $ - $ 66,504 $ 66,504 Due to other funds 41,000 41,000 41,000 Total liabilities Fund balances - - 107,504 - 107,504 107,504 12,948 34,869 119,466 167,283 132,002 $ - $12,948 $142,373 $119,466 $274,787 $239,506 A-2 CITY OF EULESS, TEXAS SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES Year ended September 30, 1989 Industrial Development Fund Revenues: Gross receipts tax $ Other revenues Expenditures: Planning and development Insurance claims and fees Capital out- lay and maintenance Excess of revenues over expendi- tures Other financing sources (uses): Net operating transfers out Excess (defi- ciency) of revenues over expenditures and other financing uses Fund balances, beginning of year Fund balances, end of year Hotel/ Motel Insurance Workmen's Fund $ 131,978 $ Fund Compensation 741,133 - 131,978 741,133 117,344 $ 183,292 183,292 706,264 63,826 117,344 706,264 63,826 14,634 34,869 119,466 (1,605) (132,083) (1,605) (117,449) 34,869 119,466 1,605 130,397 - $ 12,948 $ 34,869 Totals 1989 1988 $ 131,978 924,425 1,056,403 117,344 770,090 887,434 168,969 $ 110,936 670,755 781,691 102,694 669,150 4,454 776,298 5,393 (133,688) (55,000) 35,281 132,002 (49,607) 181,609 $119,466 $ 167,283 $ 132,002 -41- (This page left blank intentionally) CAPITAL PROJECTS FUNDS Park and Recreation Fund - to account for the financing and construction of park facilities. Financing was provided primarily by the sale of general obligation bonds of $1,500,000 in 1986 and $430,000 in 1988. Street Improvement and Drainage Fund - to account for the financing and 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. 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. Equipment Certificates Fund - 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. 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. Certificates of Obligation Fund - to account for the construction on Texas Highway 10. Financing was provided from the sale of Certificates of Obligation of $1,500,000 in 1989. ASSETS Cash and cash equivalents Accrued interest receivable Due from other funds LIABILITIES AND FUND EQUITY Accounts payable Due to other funds Fund balances CITY OF EULESS, TEXAS CAPITAL PROJECTS FUNDS COMBINING BALANCE SHEET September 30, 1989 Street Park and Improvement Revenue Equipment Recreation and Drainage Sharing Certificates Fund Fund Fund Fund $205,481 $205,481 205,481 $205,481 $254,003 $4,323 $71,933 3,369 775 $258,147 $4,323 $71,933 $ - 258,147 $258,147 $ - $ 4,323 71,933 $4,323 $71,933 Conference Center Construction Fund $251,586 $251,586 $ 132,000 119,586 $251,586 Certificates of Obligation Fund 1989 Totals 1988 $1,452,543 $2,239,869 $1,474,358 3,369 775 7,465 469,475 $1,452,543 $2,244,013 $1,951,298 1,452,543 $1,452,543 $2,244,013 $1,951,298 $ - $ 412,897 132,000 2,112,013 1,538,401 CITY OF EULESS, TEXAS CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES Year ended September 30, 1989 Revenues: Investment income Other revenues Expenditures: Capital outlay and maintenence Excess (defi- ciency) of reve- nues over expenditures Other financing sources: Sale of general obligation bonds Net operating transfers in (out) Total other financing sources (uses) Excess (deficiency) of revenues and other financing sources over ex- penditures and other financing (uses) Fund balances, beginning of year Fund balances, end of year Park and Recreation Fund 719,719 (719,719) 280,000 280,000 (439,719) 645,200 $ 205,481 Street Improvement and Drainage Fund $ 23,203 17,042 40,245 432,662 (392,417) (121,000) (121,000) (513,417) 771,564 $ 258,147 -46- Revenue Sharing Fund 5,904 Equipment Certificates Fund 39,477 (5,904) (39,477) (5,904) (39,477) 10,227 111,410 $ 4,323 $ 71,933 Conference Certificates Center of Totals Construction Obligation Fund Fund 1989 1988 $ 23,203 $ 43,806 17,042 101,929 40,245 145,735 28,011 1,225,773 2,000,806 28,011 (1,185,528) (1,855,071) 1,480,554 1,480,554 430,000 119,586 278,586 119,586 1,480,554 1,759,140 430,000 119,586 1,452,543 573,612 1,538,401 (1,425,071) 2,963,472 $119,586 $1,452,543. $ 2,112?013 $ 1,538,401 -47- (This page left blank intentionally) WATER AND SEWER ENTERPRISE FUND To account for the acquisition, operation and maintenance of a municipal utility, supported primarily by user charges to the public. CITY OF EULESS, TEXAS WATER AND SEWER ENTERPRISE FUND COMPARATIVE BALANCE SHEET September 30, 1989 and 1988 ASSETS Current assets: Cash and cash equivalents Accounts receivable, less allowance for estimated uncollectible accounts of $1,463 in 1989 and 1988 Unbilled water and sewer revenue Accrued interest receivable Due from other funds Total current assets Restricted assets: Revenue bond debt service: Cash with paying agent Revenue bond retirement: Investments with paying agent, at cost Revenue bond emergency: Cash and short-term investments Property sale proceeds account: Investments with paying agent, at cost Capital projects account: Cash and short-term investments Customer deposits: Short-term investments Interest receivable on investments Total restricted assets Utility plant in service, at cost: Land Equipment Waterworks and sanitary sewer system Less accumulated depreciation Net utility plant in service Capitalized water and sewer facility contract rights less accumulated amortization of $3,904,918 in 1989 and $3,281,806 in 1988 1989 1988 $ 1,774,902 $ 1,769,353 683,049 339,038 36,005 132,000 2,964,994 52,551 1,416,229 500,000 439,622 250,824 490,518 58,759 3,208,503 1,528,966 847,020 24,971,104 27,347,090 7,430,954 19,916,136 631,486 339,038 33,804 2,773,681 59,191 1,413,257 500,000 439,622 559,373 476,000 58,759 3,506,202 1,528,966 822,966 24,388,803 26,740,735 6,699,965 20,040,770 20,562,707 16,509,780 $46,652,340 $42,830,433 -50- 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 Current portion of revenue bonds payable Payable from restricted assets: Customer deposits Accrued interest Total current liabilities Obligations under capitalized water and sewer facility contract rights Revenue bonds payable Deferred revenue Total liabilities Fund equity: Contributions: From subdividers From Environmental Protection From Trinity River Authority Total contributions Agency Retained earnings: Reserved: For revenue bond debt service, next maturing For revenue bond retirement For emergency Total for debt service Unreserved Total retained earnings Total fund equity 1989 $ 21,423 $ 38,278 644,376 320,000 490,518 70,845 1,585,440 21,069,251 4,615,000 135,073 27,404,764 13,532,240 239,617 15,000 13,786,857 52,551 1,843,764 500,000 2,396,315 3,064,404 5,460,719 19,247,576 $46,652,340 1988 91,849 38,002 435,728 310,000 476,000 75,219 1,426,798 17,178,694 4,935,000 142,873 23,683,365 13,439,995 239,617 15,000 13,694,612 59,191 1,836,419 500,000 2,395,610 3,056,846 5,452,456 19,147,068 $42,830,433 -51- C-2 CITY OF EULESS, TEXAS WATER AND SEWER ENTERPRISE FUND COMPARATIVE SCHEDULE OF OPERATING EXPENSES Years ended September 30, 1989 and 1988 General and administrative: Salaries and wages Employee benefits Postage and supplies Maintenance of office machinery Contractual services Bad debts Water production: Salaries and wages Employee benefits Operating supplies and expense Maintenance of structures and equipment Water - Trinity River Authority Water distribution: Salaries and wages Employee benefits Operating supplies and expense Maintenance of structures and equipment Contractual services Other Utility engineering: Salaries and wages Employee benefits Operating supplies and expenses Maintenance of structures and equipment Contractual services 1989 1988 $ 174,125 $ 110,014 68,030 33,424 21,469 18,452 14,513 13,899 17,618 18,315 32,257 54,157 328,012 248,261 171,666 67,797 8,871 14,194 (423,290) (160,762) 155,966 70,589 9,696 79,472 4,851 1,612 322,186 95,412 27,017 2,265 2,803 13,997 141,494 223,360 66,656 10,270 41,472 1,644,536 1,986,294 236,082 89,301 12,458 53,731 7,962 1,807 401,341 CITY OF EULESS, TEXAS WATER AND SEWER ENTERPRISE FUND COMPARATIVE SCHEDULE OF OPERATING EXPENSES Years ended September 30, 1989 and 1988 (Continued) Sewage collection and treatment: Salaries and wages Employee benefits Operating supplies and expense Maintenance of structures and equipment Contractual services Treatment fees - Trinity River Authority Other Nondepartmental: Employee benefits Operating supplies and expense Contractual services Service center: Salaries Employee benefits Motor fuel and supplies Maintenance of structures and equipment Other Amortization of capitalized water and sewer facility contract rights Depreciation Total operating expenses 1989 $ 106,429 49,297 4,315 14,551 3,278 343,454 5,955 527,279 8,880 491,983 171,597 672,460 99,405 29,830 128,759 117,413 14,368 389,775 623,112 737,392 $3,580,948 C-2 (continued) 1988 $ 140,152 53,974 3,869 6,101 3,942 450,193 3,171 661,402 7,116 491,737 127,066 625,919 95,555 23,931 100,260 101,397 14,187 335,330 495,843 802,767 $5,557,157 (This page left blank intentionally) ALL AGENCY FUNDS Social Security Fund - to account for the liability of various payroll taxes deducted from the City's payroll. Developers' Escrow Fund - to account for funds held in escrow for the purpose of making improvements to new development areas within the City. D-1 ASSETS Cash and cash equivalents Due from other funds LIABILITIES Payroll related payables Escrow deposits Due to other funds CITY OF EULESS, TEXAS ALL AGENCY FUNDS COMBINING BALANCE SHEET September 30, 1989 Social Developers' Security Escrow Fund Fund $112,124 $1,208,492 68,958 $181,082 $1,208,492 $181,082 $ 1,207,717 775 $181,082 $1,208,492 Totals 1989 $1,320,616 68,958 $1,389,574 1988 $1,802,001 66,692 $1,868,693 $ 181,082 $ 169,406 1,207,717 1,229,812 775 469,475 $1,389,574 $1,868,693 D-2 CITY OF EULESS, TEXAS ALL AGENCY FUNDS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES Year ended September 30, 1989 SOCIAL SECURITY FUND Assets Cash and cash equivalents Due from other funds Liabilities Payroll related payables DEVELOPERS' ESCROW FUND Assets Cash and cash equivalents Liabilities Escrow deposits Due to other funds TOTAL ALL AGENCY FUNDS Assets Cash and cash equivalents Due from other funds Liabilities Payroll related payables Escrow deposits Due to other funds Balance September 30, 1988 Additions $ 102,714 66,692 $ 169,406 $ 169,406 $1,699,287 $1,229,812 469,475 $1,6991287 $2,637,139 2,266 $2,639,405 $2,639,405 $ 160,693 $ 133,393 27,300 $ 160,693 $1,802,001 $2,797,832 66,692 2,266 $1,868,693 $2,800,098 $ 169,406 $2,639,405 1,229,81E 133,393 469,475 27,300 $1,8681693 $2,800,098 Balance September 30, Deductions 1989 $2,627,729 $2,627,729 $2,627,729 $ 651,488 $ 155,488 496,000 $ 651,488 $3,279,217 $3,279,217 $2,627,729 155,488 496,000 $3,279,217 $ 112,124 68,958 $ 181,082 $ 181,082 $1,208,492 $1,207,717 775 $1,208,492 $1,320,616 68,958 $1,389,574 $ 181,082 1,207,717 775 $1,389,574 (This page left blank intentionally) GENERAL FIXED ASSETS ACCOUNT GROUP To account for fixed assets not used in proprietary fund operations. E-1 CITY OF EULESS, TEXAS COMPARATIVE SCHEDULE OF GENERAL FIXED ASSETS BY SOURCE September 30, 1989 and 1988 General fixed assets: Land Buildings Improvements other than buildings Machinery and equipment Construction in progress Total general fixed assets Investment in general fixed assets by source: General fund Special revenue funds Capital projects funds Total investment in general fixed assets 1989 $ 870,379 4,571,052 583,015 3,727,557 $9,752,003 $4,749,483 83,249 4,919,271 $9,752,003 1988 $ 869,571 3,583,107 476,943 3,491,827 338,733 $8,760,181 $4,442,059 152,797 4,165,325 $8,760,181 E-2 CITY OF EULESS, TEXAS SCHEDULE OF GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY September 30, 1989 Function and activity General government Public saftey Culture and recrea- tion Highways and streets Land Buildings $269,088 $1,382,874 234,325 976,250 366,966 2,211,928 $870,379 $4,571,052 Improvements other than buildings 583,015 $583,015 Machinery and equipment 494,122 2,239,129 570,696 423,610 $3,727,557 Total $2,146,084 3,449,704 3,732,605 423,610 $9,752,003 E-3 CITY OF EULESS, TEXAS SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY Year ended September 30, 1989 Function and activity General government Public safety Culture and recreation Highways and streets Construction in progress General fixed assets 9-30-88 $2 , 067 , 247 3,298,877 2,626,339 428,985 338,733 $8,7601181 Additions $ 95,816 208,264 1,112,900 11,885 $1,428,865 Deductions $ 16,979 57,437 6,634 17,260 338,733 $437,043 General fixed assets 9-30-89 $2,146,084 3,449,704 3,732,605 423,610 $9,752,003 STATISTICAL SECTION TABLE 1 CITY OF EULESS, TEXAS GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION (1) Last ten fiscal years (Unaudited) Fiscal General year government 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 $ 680,381 739,346 737,311 741,825 905,018 1,060,047 1,197,589 1,316,296 1,436,132 1,385,187 Public safety $1,539,987 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 Culture - Streets recreation $266,714 $ 545,733 255,642 530,593 332,829 644,703 323,104 667,854 364,058 859,754 401,902 947,590 424,806 1,015,965 402,974 1,034,905 396,572 1,217,531 480,722 1,332,050 (1) Includes General and Debt Service Funds. Debt service Other $ 430,350 427,658 429,364 425,799 506,439 780,540 964,011 1,341,171 1,313,298 1,357,689 $395,736 418,557 458,351 480,838 509,600 592,995 760,176 593,150 567,795 648,861 Total $ 3,858,901 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 TABLE 2 Fiscal year 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 Taxes $2,763,651 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 CITY OF EULESS, TEXAS GENERAL GOVERNMENTAL REVENUES BY SOURCE (1) Last ten fiscal years (Unaudited) Licenses Inter- Charges Fines and governmental for and Miscel- permits revenues services fees laneous $119,383 $126,671 $46,512 $210,772 $291,721 187,263 206,722 34,590 208,746 443,065 191,551 312,553 37,714 259,293 375,297 379,549 288,355 38,254 200,793 457,210 601,181 402,107 38,484 265,800 594,673 429,929 521,896 51,401 356,381 702,740 330,136 601,988 60,466 423,482 664,199 201,468 535,814 52,890 413,120 729,595 164,031 380,612 54,682 501,151 610,444 222,424 265 43,053 506,748 932,071 (1) Includes General and Debt Service Funds. Total $ 3,558,710 4,309,781 4,785,826 5,684,314 6,870,216 7,964,685 8,454,626 9,383,580 9,755,822 10,099,214 (This page left blank intentionally) CITY OF EULESS, TEXAS PROPERTY TAX LEVIES AND COLLECTIONS Last ten fiscal years (Unaudited) Fiscal Total tax year levy 1980 $1,683,564 1981 1,966,178 1982 2,133,114 1983 2,597,676 1984 2,808,055 1985 3,298,386 1986 3,814,110 1987 4,845,209 1988 5,001,323 1989 4,975,719 Current tax collections $1,598,304 1,889,920 2,045,992 2,543,591 2,745,623 3,182,483 3,575,594 4,704,417 4,921,426 4,926,213 Percent of levy collected 94.94% 96.12 95.92 97.92 97.78 96.49 93.75 97.09 98.40 99.00 Delinquent tax collections $ 93,789 101 ,408 71,417 39,762 77,156 127,288 76,236 167,892 174,978 165,469 Total tax collections $1,692,093 1,991,328 2,117,409 2,583,353 2,822,779 3,309,771 3,651,830 4,872,309 5,096,404 5,091,682 TABLE 3 Percent of total tax collections to tax levy 100.51% 101.28 99.26 99.45 100.52 100.35 95.75 100.56 101 .90 102.33 Outstanding delinquent taxes at year-end $213,555 188,405 202,081 246,369 268,760 256,955 393,256 428,865 355,562 331,891 Percent of delinquent taxes to tax levy 12.68% 9.58 9.47 9.48 9.57 7.79 10.31 8.85 7.11 6.67 Fiscal year 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 (1) (1) (2) (2) (2) (2) (2) (2) (2) (2) CITY OF EULESS, TEXAS ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY Last ten fiscal years (Unaudited) Real property Assessed value $ 158,125,200 248,902,180 265,109,240 332,750,708 343,084,060 697,008,884 779,704,042 1,080,231,222 1,024,645,236 968,871,391 Estimated actual value $ 243,269,538 248,902,180 265,109,240 332,750,708 343,084,060 697,008,884 779,704,042 1,080,231,222 1,024,645,236 968,871,391 Personal Assessed value $ 20,977,300 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 property Estimated actual value $ 32,272,769 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 (1) Source: Hurst -Euless -Bedford Independent School District. (2) Source: Tarrant County Appraisal District. TABLE 4 Total Assessed value $ 179,102,500 280,882,530 304,730,630 390,181,030 401,889,801 765,356,327 868,463,818 1,181,375,746 1,136,652,954 1,081,667,059 Estimated actual value $ 275,542,307 280,882,530 304,730 ,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 Ratio of total assessed to total estimated actual value 65% 100 100 100 100 100 100 100 100 100 TABLE 5 CITY OF EULESS, TEXAS PROPERTY TAX RATES - ALL OVERLAPPING GOVERNMENTS (PER $100 OF ASSESSED VALUE) Last ten fiscal years (Unaudited) Fiscal City School County year (4) (2) (1) 1980 $.94 $1.76 1981 .70 1.24 1982 .70 1.24 1983 .70 1.24 1984 .70 1.24 1985 .44 .74 1986 .44 .82 1987 .42 .78 1988 .44 .9169 1989 .46 1.02 NOTES: $.95 . 285 .204 .202 . 125 .125 .09866 .11772 . 11772 . 156509 State (3) $.10 Hospital (1) $.56 .31 . 168 .178 . 104 .104 . 09634 . 11125 . 11125 . 13300 Junior college (1) Total $.35 .095 .048 .052 .031 .031 . 03165 .03153 . 03153 .03148 $4 .66 2.63 2.36 2.37 2.20 1.44 1.48665 1.46050 1.6174 1.80098 (A) General property taxes for cities are limited by the Texas Constitution 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 Independent School District and are distributed to the City as collected. Sources: (1) (2) (3) (4) Tarrant County Hurst -Euless -Bedford Independent School District State of Texas City Records TABLE 6 CITY OF EULESS, TEXAS PRINCIPAL TAXPAYERS September 30, 1989 (Unaudited) Taxpayer Sunbelt Savings Associa- tion of Texas Robert S. Folsom, et. al. Southwestern Bell Tele- phone Company Texas Utilities Electric Company Crossmark Partners II, Ltd. Prudential Reality Group Sky Chef, Inc. Misty Hollow Apartments, Ltd. Courage Point Apartments George Basil First Southwest Equity Corp. Type of business Land Apartments Utility Utility Apartments Retail Food service Apartments Apartments Land Apartments 1989 Assessed valuation $ 29,592,687 20,317,492 Percentage of total assessed valuation 2.74% 1.89 16,905,459 1.56 14,434,870 1.33 10,517,005 .97 8,058,295 .74 7,516,250 .69 7,344,674 .68 7,159,129 .66 7,010,766 .65 $128,856,627 11.91% TABLE 7 CITY OF EULESS, TEXAS COMPUTATION OF LEGAL DEBT MARGIN September 30, 1989 (Unaudited) 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 taxable 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 1989 was established at $.46 per $100 of assessed valuation based on 100% of appraised value. (This page left blank intentionally) CITY OF EULESS, TEXAS RATIO OF NET GENERAL BONDED DEBT TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA Last ten fiscal years (Unaudited) General Fiscal Assessed bonded Less debt Net bonded year Population (1) value (2) debt service funds debt 1980 24,000 $ 179,102,500 $ 5,370,000 $156,522 $ 5,213,478 1981 26,250 280,882,530(A) 5,225,000 173,872 5,051,128 1982 26,100 304,730,630 5,070,000 171,395 4,898,605 1983 28,200 390,181,030 5,520,000 235,147 5,284,853 1984 32,500 401,889,801 7,825,000 285,142 7,539,858 1985 37,950 765,356,327 9,095,000 348,633 8,746,367 1986 37,650 868,463,818 10,396,586 313,522 10,083,064 1987 38,700 1,181,375,746 10,684,514 318,010 10,366,504 1988 40,250 1,136,652,954 10,564,783 383,429 10,181,354 1989 40,250 1,081,667,059 11,475,440 568,807 10,906,633 (1) Source: Estimates by North Central Texas Council of Governments as adjusted for 1980 census data. (2) Source: Tarrant County Appraisal District. NOTE: (A) Increased basis of assessment from 65 percent to 100 percent. TABLE 8 Ratio of net Net bonded bonded debt to debt assessed value per capita 2.91% $217.23 1.80 192.42 1.61 187.68 1.35 187.41 1.88 232.00 1.14 230.47 1.16 267.81 . 88 267.87 . 90 252.95 1.01 270.97 TABLE 9 CITY OF EULESS, TEXAS RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL OBLIGATION BONDED DEBT TO TOTAL GENERAL EXPENDITURES Fiscal year Principal 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 $140,000 145,000 155,000 165,000 195,000 230,000 290,000 60,428 549,732 589,342 Last ten fiscal years (Unaudited) Interest $ 290,350 282,658 274,364 260,799 311,439 550,540 674,011 1,280,743 763,566 768,347 Ratio of debt service Total to total Total debt general general service expenditures expenditures $ 430,350 427,658 429,364 425,799 506,439 780,540 964,011 1,341,171 1,313,298 1,357,689 $ 3,858,901 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 11.15% 10.42 8.78 8.37 7.59 10.08 10.35 14.36 12.59 12.52 TABLE 10 CITY OF EULESS, TEXAS COMPUTATION OF DIRECT AND OVERLAPPING DEBT September 30, 1989 (Unaudited) Jurisdiction City of Euless Grapevine - Colleyville Independent School District Hurst -Euless -Bedford Independent School District Tarrant County Tarrant County Junior College District Tarrant County Hospital District Total direct and overlapping debt Net debt outstanding $ 10,906,633 41,201,389 47,334,000 109,791,637 39,385,167 45,750,000 Percent applicable to City of Euless 100.00% 2.12 26.79 2.72 2.72 2.72 Amount applicable to City of Euless $10,906,633 873,469 12,680,779 2,986,333 1,071,277 1,244,400 $29,762,891 Fiscal year 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 CITY OF EULESS, TEXAS REVENUE BOND COVERAGE WATER AND SEWER BONDS Last ten fiscal years (Unaudited) Gross revenues (1) $2,993,063 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 Direct operating expenses (2) $1,923,578 2,289,427 2,557,799 2,897,770 3,100,233 3,691,945 4,865,806 5,595,639 6,133,001 5,152,761 Net revenue available for debt service $1,069,485 963,122 1,052,783 1,240,886 2,097,155 2,909,172 1,303,680 2,081,986 1,140,248 2,290,010 (1) Includes operating revenues and interest on investments. (2) Excludes amortization and depreciation and includes debt service payments to the Trinity River Authority treated as operating expense for bond coverage purposes. TABLE 11 Debt service requirements Principal Interest Total Coverage $ 140,000 $190,175 $330,175 3.24 145,000 183,800 328,800 2.93 155,000 177,138 332,138 3.17 160,000 170,075 330,075 3.76 165,000 475,323 640,323 3.28 250,000 422,923 672,923 4.32 255,000 406,625 661,625 1.97 275,000 390,012 665,012 3.13 305,000 372,300 677,300 1.68 310,000 347,301 657,301 3.48 TABLE 12 Fiscal year 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 CITY OF EULESS, TEXAS DEMOGRAPHIC STATISTICS Last ten fiscal years (Unaudited) Population (1) 24,000 26,250 26,100 28,200 32,500 37,950 37,650 38,700 40,250 40,250 Per capita income (2) $ 9,362 10,226 11,184 12,091 13,006 13,940 14,828 15,739 16,650 17,560 Sources: (1) Estimates by North Central Texas (2) Estimates by City (3) Hurst -Euless -Bedford Independent (4) Texas Employment Commission School Unemployment enrollment (3) rate (4) 14,765 14,845 15,003 15,172 15,606 15,248 16,067 16,818 16,887 17,011 4.4% 4.4 5.7 4.9 4.2 5.0 6.7 6.9 5.7 5.8 Council of Governments School District TABLE 13 CITY OF EULESS, TEXAS PROPERTY VALUE, CONSTRUCTION AND BANK DEPOSITS Last ten fiscal years (Unaudited) Construction (1) Fiscal Number year of permits 1980 394 1981 410 1982 741 1983 1,178 1984 1,139 1985 879 1986 443 1987 314 1988 405 1989 392 (1) Source: (2) Source: (3) Source: (4) Source: Estimated value $ 17,755,469 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 Ban k deposits (4) (000's) $ 33,851 33,029 34,651 36,219 44,872 48,834 72,689 93,681 186,022 182,305 Property value $ 275,542,307 280,882,530 304,730,630 390,181,030 401,889,801 765,356,327 868,463 ,818 1,181,375,746 1,136,652,954 1,081,667,059 City Records Tarrant County Appraisal District Hurst -Euless -Bedford Independent School District Bank Records (3) (3)(A) (2) (2) (2) (2) (2) (2) (2) (2) NOTE: (A) Increased basis of assessment from 65 percent to 100 percent. TABLE 14 CITY OF EULESS, TEXAS MISCELLANEOUS STATISTICS September 30, 1989 (Unaudited) 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 251 Police protection: Number of stations Number of certified officers Fire protection: Number of stations Number of certified firefighters 1 56 3 42 Parks and recreation: Number of swimming pools 3 Number of parks 13 Area of parks 184 acres Community buildings 2 Library holdings 51,136 CITY OF EULESS, TEXAS MISCELLANEOUS STATISTICS September 30, 1989 (Unaudited) (Continued) Education: Elementary Schools Junior High Schools High School 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 14 (continued) 7 2 1 17,774 14,000,000 gallons 4,000,000 gallons 18,000,000 gallons 11,393,000 gallons 6,480,000 gallons 148 miles 1,115 3,671,000 gallons 17,301 125 miles 120 miles 17.2 miles