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HomeMy WebLinkAboutFY 1996 Comprehensive Annual Financial Report* Inf. EULESS 11 fl II MEI €ui.ess Pvnuc Lick.yny _ _ • Comprehensive Annual Financial Report Fiscal Year 1995/96 WEAVER TIDWELL L.I.. P. CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS 307 %I'1st Seventh Street Suite 1500 Port IKrth. Texas 76102 817.332.7905 F 817.429.5936 DALLAS OFFICE 12221 Merit Drive Suite 1700 Dallas. Texas 75251 WORLDWIDE AFFILIATIONS THROUGH SUMMIT INTERNATIONAL ASSOCIATES. INC. December 6, 1996 To the Honorable Mayor, City Council, and City Manager City of Euless, Texas In planning and performing our audit of the financial statements of City of Euless, Texas, for the year ended September 30, 1996, we considered its internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control structure. At the request of management, we performed a review of the recreation operations in order to provide recommendations for improvement. We have the following comments related to our current year review: Internal Control The Softball World operations do not have written internal control policies and procedures. We recommend that the internal control policies and procedures that are being developed for the Softball World operations be written and distributed to personnel. This will familiarize employees with the policies and procedures of which they should be aware as they are performing their duties and provide a source of information for future employees. Bank Deposits The responsibilities of recording and making the deposit for the Softball World concessions are not segregated. We recommend that the recording and deposit functions be performed by different people. This segregation of duties provides more accountability for the completeness and accuracy of the deposit. A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the financial statements being audited may occur and not be City of Euless, Texas December 6, 1996 Page 2 detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be a material weakness as defined above. However, none of the items described above is believed to be a material weakness. This report is intended solely for the information and use of management. We would be pleased to discuss this letter with you at greater length and assist you in the implementation of the recommendations should you so desire. We would like to express our appreciation for the excellent cooperation and assistance received from your staff during the course of the audit and the related operations review. WEAVER AND TIDWELL, L.L.P. /cm CITY OFFICIALS MARY LIB SALEH, MAYOR CARL TYSON, COUNCIL MEMBER PLACE ONE LEON HOGG, COUNCIL MEMBER PLACE TWO BOBBY BAKER, COUNCIL MEMBER PLACE THREE AND MAYOR PRO TEM CHARLES MILLER, COUNCIL MEMBER PLACE FOUR GLENN WALKER, COUNCIL MEMBER PLACE FIVE KATIE EDWARDS, COUNCIL MEMBER PLACE SIX TOM HART, CITY MANAGER Joe Hennig Diana G. Ortiz Assistant City Manager Director of finance CITY OF EULESS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 1996 TABLE OF CONTENTS INTRODUCTORY SECTION Page(s) Letter of transmittal I-VII GFOA certificate of achievement VIII Organizational chart IX FINANCIAL SECTION Independent Auditor's Report General Purpose Financial Statements 1 Combined balance sheet - all fund types and account groups 2 - 5 Combined statement of revenues, expenditures and changes in fund balances - all govern- mental fund types Combined statement of revenues, expenditures and changes in fund balances - budget and actual - general and special revenue funds Combined statement of revenues, expenses and changes in retained earnings - all proprietary fund types Combined statement of cash flows - all proprietary fund types Notes to financial statements Supplemental Statements and Schedules Special revenue funds Combining balance sheet Combining statement of revenues, expenditures and changes in fund balances 6-7 8-9 10 11-12 13-31 32 33 CITY OF EULESS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 1996 TABLE OF CONTENTS - Continued Supplemental Statements and Schedules - continued Statement of revenues, expenditures and changes in fund balances - budget and actual Capital projects funds Combining balance sheet Combining statement of revenues, - expenditures and changes in fund balances Enterprise funds Combining balance sheet Combining statement of revenues, expenses and changes in retained earnings Combining statement of cash flows Water and sewer fund --comparative balance sheets Water and sewer fund --comparative statements - of revenues, expenses, and changes in retained earnings Water and sewer fund --comparative schedule of operating expenses Water and sewer fund --comparative statements of cash flows Water and sewer fund --aggregating schedule of balance sheet accounts Water and sewer fund --aggregating schedule of revenues, expenses and changes in retained earnings accounts Drainage utility funds --aggregating schedule of balance sheet accounts Page(s) 34 - 35 36 - 37 38 - 39 40-43 44 - 45 46-47 48 - 49 50 51 - 52 53 54 - 57 58-59 60 CITY OF EULESS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 1996 TABLE OF CONTENTS - Continued Supplemental Statements and Schedules - continued Paoe(s) Drainage utility funds --aggregating schedule of revenues, expenses and changes in retained earnings accounts Internal service funds 61 Combining balance sheet 62 Combining statement of revenues, expenses and changes in retained earnings 63 Combining statement of cash flows 64 Aaencv funds Combining balance sheet 65 Statements of changes in assets and liabilities 66 General fixed assets account group Comparative schedule of general fixed assets - by source 67 Schedule of general fixed assets by function and activity 68 Schedule of changes in general fixed assets by function and activity 69 Table Page(s). STATISTICAL SECTION (Unaudited) General governmental expenditures by function 1 70 General governmental revenues by source 2 71 Property tax levies and collections 3 72 CITY OF EULESS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 1996 TABLE OF CONTENTS - Continued STATISTICAL SECTION (UNAUDITED) - continued Table Page(s) Assessed and estimated actual value of taxable property 4 73 - 74 Property tax rates - all direct and overlapping governments per $100 of assessed value 5 75 Ratio of net general bonded debt to assessed value and net bonded debt per capita 6 76 Computation of direct and overlapping debt 7 77 Ratio of annual debt service expenditures for net general bonded debt to total general expenditures 8 78 Schedule of revenue bond coverage - Water and Sewer Bonds 9 79 Schedule of revenue bond coverage - Drainage Utility Bonds 10 80 Demographic statistics 11 81 Principal taxpayers 12 82 TMRS defined contribution plan - analysis of funding progress 13 83 Property value and construction 14 84 Computation of legal debt margin 15 85 Miscellaneous statistics 16 86 - 87 INTRODUCTORY SECTION January 23, 1997 Honorable Mayor & City Council, City Manager, & Citizens of Euless: T H E CI T Y OF EULESS t The Finance Department of the City of Euless is pleased to submit the Comprehensive Annual Financial Report of the City of Euless, Texas for the fiscal year ended September 30, 1996. 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 is reported in a manner designed to present fairly the financial position, results of operations, and cash flows of the various funds and account groups of the City. All disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included. The Comprehensive Annual Financial Report is presented in three sections: Introductory, Financial and Statistical. The Introductory section includes this transmittal letter, the City's organizational chart and a list of principal officials. The financial section includes the general purpose financial statements and supplemental statements and schedules, as well as the report of independent auditors. The Statistical section includes selected financial and demographic information, generally presented on a multi -year basis. GENERAL INFORMATION Euless was settled about 1881 and named for Elisha Adams Euless, a cotton farmer and pioneer. In 1915 the population was 25 and in 1960, 4235. Euless has changed significantly from a rural farming community to a progressive urban area of approximately 40,000. The City of Euless is located in Northeast Tarrant County directly between the cities of Dallas and Fort Worth. Euless is also adjacent to the world's largest and second busiest airport --Dallas/Fort Worth International. The City provides to its citizens those services which have proven to be necessary and which can be provided by the City at the least cost. Included in these services under general government and proprietary funds are traditional city functions such as police and fire protection, emergency ambulance service, road and traffic signal maintenance, water and sewer operations, drainage system, parks and recreational facilities, courts, and library services. Other services include planning land use, building inspection, and traffic control. Internal services of the City include Insurance, Risk Management, Equipment Replacement, and Cash/Debt Management. 201 N. Ector Drive, Euless, Texas 76039-3595 817/685-1400 • Metro 817/267-4403 • FAX 817/685-1416 All funds and account groups are discussed in depth in the notes to the financial statements. Even though associations with other entities such as Hurst -Euless -Bedford Independent School District exist, the City Council has no financial accountability, or control over the school district or the other entities referred to in Note 1 of the financial statements. Accordingly, financial data for the school district and others are not included in the combined financial statements in this report. The Euless Development Corporation, established in Fiscal Year 93 and the Crime Control and Prevention District established in Fiscal Year 96 are presented as blended component units of the City of Euless. ECONOMIC CONDITIONS AND OUTLOOK As our City Manager stated in his 1996 reflections in his report entitled Share The Vision: Euless has experienced quite an exciting year during 1996. We have made a lot of things happen in this city, including the opening of the largest library in Northeast Tarrant County, the construction of one of the largest athletic complexes in the state, the building of a premier, championship golf course and executive center, and the expansion of retail stores and subdivisions located throughout the city. Next year will be a big year for Euless with the opening of Texas Star, Executive Center at Texas Star and Parks at Texas Star. We are all very excited about the prospects of these projects and the positive impact they will have on Euless. Although I am proud of all of these projects, I am also proud that we still focus on the basics of serving citizens. Our commitment to providing excellent service was evident throughout this past year not only to our citizens, but to other organizations as well, which is why we received recognition by Texas Business Magazine as the second best managed city in Texas with a population under 50,000. In 1996, Euless welcomed numerous new businesses to our community including: MacFrugels, Luxury Linens, Mid -Cities Deli, Euless Kitchen, Gators, Eberle Manufacturing and Hardcoat Technologies. Also, approximately 157 certificates of occupancy were issued for new and expanding business in Euless in 1996. Our Highway 10 corridor experienced phenomenal growth with over 175,000 square feet of new business space! Enhanced growth opportunities in the Euless area are projected as we progress through the 1990's as the opening of a new Albertson's prototype of 65,000 square feet kicks off this trend. A new hotel "MicroTel" has also announced plans to locate in Euless. 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 Budget. During preparation of the 1996 fiscal budget, both elected and appointed officials worked together to identify and address several key programs needed to adequately serve the public, either through quality of life issues or technological advancements. Building upon the strategic committees that were created in 1990 by utilizing a vast number of citizens for ii assistance in the development of Euless' goals and objectives, the Budget was developed. Specific objectives may be summarized as follows: Maintenance of service levels to citizens; continuation of competitiveness in the employee pay plan; absorption of legislative mandates; and continuation of City Council directives, including repair and/or replacing deteriorating infrastructures; identifying alternative sources of funds; and improving external and internal communications. Progress Report. Fiscally, the year 1996 has proven successful. City Council members were able to maintain the current rates for water and sewer services while decreasing the tax rate to .606 per $100 valuation. Furthermore, a merit -based raise package, as well as, no increases in the City's or the employees' costs for health care was achieved. These benefits were made possible through the low rate of claims filed by employees and a positive safety record. Individual and departmental successes have improved city services and enhanced growth in our community. Among the many accomplishments during 1996, the new Euless Library opened July 1; Public Works completed three fourths of the meter change -out program; Fire Department installed new Micro Siren Warning Systems in local elementary schools; Street Department personnel overlaid approximately 921,470 square feet of streets and installed approximately 5,400 linear feet of sidewalk; Softball World hosted the largest Mixed World USSSA Softball Championship in October with over 35 states represented; Police Department significantly increased Neighborhood Watch Groups to over 75 active groups; the Certificate of Excellence for Investment Policy was awarded to the Finance Department by the National Government Treasurers Organization; Parks Department personnel recycled over 4,000 Christmas trees; and EMS improved the collections program with on-line technology. FINANCIAL INFORMATION General. Management of the City is responsible for establishing and maintaining an internal control structure designed to ensure that the City's assets are protected from loss, theft or misuse and to ensure that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the evaluation of costs and benefits requires estimates and judgments by management. The City's accounting records for the Enterprise and Internal Service Funds are maintained on an accrual basis whereby revenues and expenses are recorded in the accounting period in which they are earned or incurred. The remainder of the City's funds are maintained on the modified accrual basis whereby revenue is recorded when measurable and available, and expenditures are recorded when the liability is incurred, except for interest on general long-term debt, which is recognized when due. As set forth in the City's charter Article VII Sections 2-9, the City Council adopts an annual budget. Detail control is accomplished by maintaining expenditures by line item account within each operating department within each operating fund at the authorization of the City Manager. Financial reports are available to division managers monthly. iii Further explanations of the basis of accounting for all fund types, account groups, and the City's budgetary controls are furnished in the accompanying Notes to the Financial Statements. General Governmental Functions. Revenues for general governmental functions and general debt service totaled $16,017,192 in 1996, an increase of 8.37% over 1995. The increase in revenues is primarily attributable to: increased activity in Municipal Courts and its court of record; property taxes, sales tax receipts, license -permits for new development and grant monies. The amount of revenue from various sources and the changes from the previous year are reflected in the following table: Revenue Source Property tax Gross receipts tax General sales tax Fines and fees Licenses and permits Interest income I ntergovernmental/Other Percent Amount % of Total 6,564,483 40.98 1,975,059 12.33 3,612,731 22.56 2,233,554 13.49 459,553 2.87 389,712 2.43 782,100 5.34 Increase Percent of (decrease) increase from 1995 (decrease) 412,494 6.71 (196,996) (9.07) 574,361 18.9 292,049 15.04 38,929 9.26 (15,578) (3.84) 132.275 20.36 TOTAL REVENUES $16.017.192 100.00 $1.237.534 In addition to the above general revenue, $635,619 was transferred from various funds, primarily Enterprise funds for general and administrative cost reimbursement. Expenditures for general governmental purposes and general debt service totaled $15,494,114, an increase of 13.55% over 1995. 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 Parks/Rec./Library Debt Service Nondepartmental Increase Percent of Percent (decrease) increase Amount % of Total from 1995 (decrease) 2,409,115 15.55 215,602 9.83 7,445,910 48.06 737,854 11.00 619,098 3.99 43,490 7.36 1,527,718 9.86 96,763 6.76 1,658,291 10.7 8,095 0.5 1,833.982 11.84 748, 292 68.92 TOTAL EXPENDITURES $15.494.114 100.00 $1.850.096 The increase in Streets is primarily due to increased personnel and materials costs associated with the street maintenance overlay program. Parks/Recreation/Library increased due to increased personnel costs. Nondepartmental expenditures increased primarily due to the iv funding of non -recurring capital items, including computer equipment, fire truck reserve, transfer to parks CIP and city-wide building remodeling projects. Revenues 5.3%) Irde rgov./Of r (2.4%) Interest income _. (2.9%) Licenses & permits Expenditures (11.8%) Nondept (13.5%) Fines end fees „'s's%<ss 0.7%) Debt service (22.6%) General sales tax (41.0%) Property tax (12.3%) Gross receipts tax (9.9%) Parks/R (4.0%) Streets (15.5%) General government (48.1%) Public safety Enterprise Funds. While the number of water and sewer customers was relatively constant with prior years, the City's water and sewer utility showed an increase in water revenues as a result of a dry year and more accurate meter reading (meter change -out program). Comparative data for the past two fiscal years are presented in the following table. 1996 1995 Income before operating transfers $1,331,796 $ 676,104 Net revenue available for debt service $2,402,055 $1,760,109 Debt service requirements $ 521,480 $ 518,430 Coverage 4.61 times 3.40 times The Drainage Utility System was created in FY91 in compliance with new legislation designed to address drainage issues in the communities across the state. Fees were effective January 1, 1991. In FY96, $550,152 of revenue was generated and $52,876 of the costs were incurred. Capital improvements were initiated in FY92 relating to the Drainage Utility System and continue through FY96. The Recreation Fund has been segregated from the general operating budget of the City to allow the Midway Recreation Center and the class structures to operate as an enterprise. Revenue of $729,346 was generated, while class expenses were $709,975. Both experienced an increase from prior year activity, yet a small reserve remains. Euless' Arbor Daze is funded in this account. Softball World Fund was added this fiscal year to promote adult softball programs through league, tournament, and special events. Revenue of $655,691 was collected for league fees, concession sales, and sale of sporting goods. Expenses were $490,597. Capital improvements were incurred during FY96 to enhance and maintain the recently acquired complex and promote major tournament activity. The Golf Course Fund and Athletic Complex have been established as enterprise funds and are expected to start generating revenue in fiscal year 1997. Debt Administration. General obligation debt, which is directly tax supported, totaled $7,261,586 at September 30, 1996. Certain ratios are useful indicators of the City's debt position for municipal management, citizens and investors. Data for the City is as follows: Net bonded debt - $6,994,974; ratio of net bonded debt to assessed value is 0.62 and net bonded debt per capita is $171. Tables 8-12 in the Statistical Section of this report present more detailed information about the debt position of the City. Sales Tax Revenue Bonds, secured by the January 1993 referendum for half cent sales tax for parks, library and economic development, were issued in 1994 and 1996 for a total of $10,340,000. Revenue bonds, which are secured by the net revenues of the Water and Sewer Enterprise Fund, totaled $17,605,426 at September 30, 1996. The City has maintained its A+ and A Ratings on general obligation and revenue debt from Standard and Poors and has maintained its Al and A Ratings on this debt from Moody's Investors Service. Cash Management. Compliance, safety, liquidity and yield are the program goals. Safety and security of the City's funds are of primary importance in all investment activities, with staff following policies and laws when investing funds. Interest income generated for the year for all funds was $1,972,468. Interest is an important non -tax revenue for the City. Throughout 1996, every $1.00 the City had to invest, approximately $1.01 was invested. The program continues to provide a positive revenue source for the City. Insurance and Benefits. The City provides employee medical coverage on a self -insured basis. Premiums are paid into the 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 $60,000 and aggregate claims in excess of $1,083,333. The City maintains self-insurance for worker's compensation. Contributions are made to the Risk Management Fund by other funds and are available to pay claims, claims reserves and administrative costs of the program. An excess coverage insurance policy covers individual claims in excess of $300,000. vi General Fixed Assets. The general fixed assets of the City are used in the performance of general governmental functions and exclude the fixed assets of the Enterprise and Internal Service Funds. As of September 30, 1996, the general fixed assets of the City amounted to $20,391,610. This amount represents the original cost of the assets and is considerably less than their replacement value. Depreciation of general fixed assets is not recognized in the City's accounting system. OTHER INFORMATION Independent Audit. The City Charter per Article VII Section 11 requires an annual audit to be made of the books of account, financial records and transactions of all administrative departments of the City by a certified public accounting firm. This requirement has been complied with and the report of independent auditors has been included in this report. Award. The Government Finance Officers Association of the United States and Canada ("GFOA") awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its comprehensive annual financial report for the fiscal year ended September 30, 1995. The Certificate of Achievement is the highest form of recognition given in the area of government reporting by the GFOA. In order to be awarded a Certificate of Achievement, the City published an easily readable and efficiently organized comprehensive annual financial report whose contents conform to program standards. Such reports must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. Acknowledgments. The preparation of this report on a timely basis could not be accomplished without the efficient and dedicated services of many individuals. I would like to express my appreciation to all members of the Finance Department, especially those in the Accounting Office, who assisted and contributed to its preparation. I would also like to thank the City Manager's Office and the members of the City Council for their interest and support in planning and conducting the financial operations of the City in a responsible and progressive manner. Acknowledgment is also given to the representatives of Weaver and Tidwell, L.L.P. for their invaluable assistance in producing this document. Respectfully submitted, -i(,_ b 64--Z-- Diana G. Ortiz, CGFO, CMFA Director of Finance vii 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 of Euless, Texas for its comprehensive annual financial report for the fiscal year ended September 30, 1995. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report, whose contents conform to program standards. Such CAFR must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. The City of Euless has received a Certificate of Achievement for the last 19 consecutive years. We believe our current report continues to conform to the Certificate of Achievement program requirements, and we are submitting it to GFOA." 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, 1995 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. Preside Executive Director viii Tom Hart, City Manager November, 1996 Bob McFarland City Attorney Gary McKamie Police Chief Patrol Crim. Invest. Services: Jail Communications Records Community Service Scott Campbell Administrative Assistant Susan Crim City Secretary Tom Cox !: Randy Byers • Dir. of f• • Dir. of Support Services Public Works Fleet Services Facility Maint. Library Personnel Risk/Benefits Info. Services Purchasing Recycling Franchises Streets Water Wastewater Animal Control Meter Reading CITIZENS MAYOR and COUNCIL TOM HART City Manager Joe Hennig Assistant City Manager eroid -11 Dir. of Community Services Parks Green House Recreation Texas Star Sports Complex Athletic Complex Golf Course Conference Center Softball World Paul • Kruckemeyer .f!, Diana Ortiz ..f. City Engineer Director of Finance Organizational Chart Bo Bass Dir. of Planning & Development Municipal Court of Record Director of Economic Development Economic Construction Iuspeiioa Utthty Billf4::Code:EnforeeMent Development Health t•:::',.gP4400Tiii$•••••••:;',-:•:?r.A5q)Otili•g-',-.....:;•q,PIOnniiig', • Tra*•'$ Building 4:- • ,, DraT4P Cash 111 Mgnit. Inspections Lee Koontz Fire Chief Suppression Ambulance Fire Educ. & Prevent. Fire Marshal Emergency Mgmt. Jenny Kratz Mun. Relations Coordinator FINANCIAL SECTION i i WEAVER TIDWELL L. i.. P. CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS 3(/7 Welt Seventh Street Suite 1500 Pert Ufu7h. Twat 76102 8/7.332.7995 /' 817.429.5936 DALLAS OFFICE 12221 Molt D,irr Suite 170(I 1)allas. Texas 7525/ WORLDWIDE AFFILIATIONS THROUGH SUMMIT INTERNATIONAL ASSOCIATES. INC. INDEPENDENT AUDITOR'S REPORT To the Honorable Mayor, City Council and City Manager City of Euless, Texas We have audited the accompanying general purpose financial statements of the City of Euless, Texas as of and for the year ended September 30, 1996, as listed in the table of contents. These general purpose financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and Govemment Auditing Standards, issued by the Comptroller General of the United States. 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 general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Euless, Texas at September 30, 1996, and the results of its operations and cash flows of its proprietary fund types for the year then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated December 6, 1996 on our consideration of the City of Euless, Texas' internal control structure, and a report dated December 6, 1996 on its compliance with laws and regulations. Our audit was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The combining and individual fund and account group statements and schedules and the statistical section listed in the table of contents are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the City of Euless, Texas. The combining and individual fund and account group statements and schedules have been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, are fairly stated in all material respects in relation to the general purpose financial statements taken as a whole. The statistical section has not been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, accordingly, we express no opinion on such data. WEAVER AND TIDWELL, L.L.P. Fort Worth, Texas December 6, 1996 COMBINED FINANCIAL STATEMENTS - OVERVIEW CITY OF EULESS, TEXAS COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS SEPTEMBER 30, 1996 WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1995 ASSETS AND OTHER DEBITS Deposits and investments at cost —Note 2 Investments at market --Notes 2 and 12 Receivables: Property taxes Accounts receivable and unbilled revenue Accrued interest Due from other funds --Note 8 Due from other governments Prepaids and deposits Inventories, at cost Restricted assets —Notes 2 and 4 General fixed assets —Note 6 Net utility plant and equipment in service —Note 6 Net bond issuance costs Amount available for retirement of general long-term debt Amount to be provided for retirement of general long-term debt Total assets and other debits General Fund $5,408,268 268,740 182,263 62,255 250,923 48,414 12,026 Revenue Funds $3,163,242 9,363 117,537 $6,232,889 $3,290,142 Governmental Fund Types Special Debt Service Fund $227,789 86,012 812 Projects Funds $7,316,852 1,461,438 60,355 $314,613 $8,838,645 The Notes to the Financial Statements are an integral part of this statement. 2 Enterprise Funds $10, 860, 022 1,307,145 75,186 87,299 6,928 37,672 3,556,372 Proprietary Fund Types Internal Service Funds $1,275,274 3,553 28,989,926 908,394 273,802 $45,194,352 $2,187,221 Fiduciary Fund Types Agency Funds $62,441 2,875,009 Account Groups General General Fixed Long-term Assets Debt 20,391,610 $2,937,450 $20,391,610 1,075,900 22,115, 341 $23,191,241 (1 of 2) Totals (Memorandum only) 1996 1995 $28,313,888 $21,308,072 2,875,009 2,654,685 354,752 334,393 2,954,399 1,519,311 207,159 399,090 88,111 250,716 368,460 1,568 55,342 35,624 49,698 13,721 3,556,372 2,661,802 20, 391, 610 16, 019, 888 29,898,320 21,447,778 273,802 137,918 1,075,900 1,103,280 22,115, 341 17, 732, 009 $112,578,163 $85,619,855 3 CITY OF EULESS, TEXAS COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS SEPTEMBER 30, 1996 WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1995 LIABILITIES, FUND EQUITY AND OTHER CREDITS Liabilities: Accounts payable Accrued insurance claims Accrued salaries and wages Restricted customer and escrow deposits Accrued interest Due to other funds —Note 8 Bonds and certificates of obligation payable —Notes 3 and 4 Capital leases payable --Notes 3 and 14 Deferred revenue Compensated absences --Note 3 Deferred compensation benefits payable --Note 12 Due to other governments Total liabilities Fund equity and other credits: Investment in general fixed assets Net contributed capital —Note 9 Retained earnings: Reserved for: Debt service and construction --Notes 3 and 4 Insurance Workers' Compensation Risk Management Computer Emergency Recycling Unreserved Fund balances: Reserved for: Debt service Computer Park improvements Recycling Development agreements Prepaids Betterment Unreserved: Designated for: Contingency Emergency Undesignated Total fund equity and other credits Total liabilities, fund equity and other credits General Fund $536,993 306,630 88,111 254,340 1,186,074 75,000 1,094 3,183 48,414 23,106 Governmental Fund Types Special Debt Revenue Service Funds Fund $1,569 1,569 Capital Projects Funds $500 $206,215 47,501 48,001 809,288 266,612 500,000 500,000 3,896,018 2,479,285 5,046,815 3,288,573 1,982 208,197 1,374,610 7,255,838 266,612 8,630,448 $6,232,889 $3,290,142 $314,613 $8,838,645 The Notes to the Financial Statements are an integral part of this statement. 4 Proprietary Fund Types Internal Service Funds Enterprise Funds $940,886 $29,753 70,000 107,220 917,396 179,993 17,605,426 80,473 19,831,394 8,759,786 792,266 175,000 500,000 19,712 15,116,194 25,362,958 $45,194,352 Fiduciary Fund Type Agency Funds 2,875,009 62,441 99,753 2,937,450 41,000 200,000 200,000 1,646,468 2,087,468 $2,187,221 $2,937,450 Account Groups General General Fixed Long-term Assets Debt 22,471,039 51,926 668,276 23,191,241 20,391,610 (2 of 2) Totals (Memorandum only) 1996 1995 $1,715,916 $2,151,825 70,000 70,000 413,850 358,880 919,378 848,050 179,993 61,919 88,111 250,716 40,076,465 23,576,586 51,926 68,967 382,314 388,327 668,276 499,736 2,875,009 2,654,685 62,441 61,346 47,503,679 30,991,037 20,391,610 16,019,888 8,759,786 9,253,944 792,266 894,479 41,000 41,000 200,000 200,000 200,000 200,000 175,000 75,000 500,000 500,000 19,712 4,773 16,762,662 13,637,212 1,075,900 1,103,280 75,000 75,000 1,094 1,094 3,183 3,183 1,374,610 1,296,601 48,414 34,982 23,106 22,092 500,000 510,000 500,000 500,000 13,631,141 10,256,290 20,391,610 65,074,484 54,628,818 $20,391,610 $23,191,241 $112,578,163 $85,619,855 5 CITY OF EULESS, TEXAS COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES YEAR ENDED SEPTEMBER 30, 1996 WITH COMPARATIVE TOTALS FOR YEAR ENDED SEPTEMBER 30, 1995 Special General Revenue Fund Funds Revenues: General property tax $4,951,124 Gross receipts tax 1,975,059 622,947 General sales tax 3,612,731 1,806,264 Fines and fees 2,233,554 Licenses and permits 459,553 Interest income 372,160 26,656 Intergovernmental 84,447 Other revenues 697,653 54,181 Total revenues 14,386,281 2,510,048 Expenditures: Current: City council/administrative 352,733 Finance 576,991 Police department 4,500,463 Fire department 2,945,447 Administrative services 481,058 Planning and development 644,167 613,693 Parks/recreation/library 1,527,718 Street maintenance 619,098 Betterment 23,660 Staff services 354,166 Nondepartmental 1,810,322 Debt service: Principal 260,000 Interest and fiscal charges 549,288 Capital outlay and maintenance 292,433 Total expenditures —17,835;ES_ 1,715,414 Excess (deficiency) of revenues over expenditures 550,458 794,634 Other financing sources (uses) Net proceeds from issuance of sales tax revenue bonds Operating transfers in 635,619 Operating transfers out (570,000) (200,000) Total other financing sources (uses) 65,619 (200,000) Excess (deficiency) of revenues and other financing sources over expenditures and other financing uses 616,077 594,634 Fund balances, beginning of year 4,430,738 7,235,425 Equity transfer —Note 15 (4,541,486) Fund balances, end of year $5,046,815 $3,288,573 The Notes to the Financial Statements are an integral part of this statement. 6 Totals (Memorandum Only) Debt Capital Service Projects Fund Funds 1996 1995 $1,613,359 $6,564,483 $6,151,989 2,598,006 2,822,597 5,418, 995 4,557,555 2,233,554 1,941,505 459,553 420,624 17,552 614,439 1,030,807 1,074,691 84,447 90,980 117,713 869,547 809,513 1,630,911 732,152 19, 259, 392 1 7, 869, 454 352, 733 331,479 576,991 544,834 4,500,463 4,146, 084 2,945,447 2,561,972 481,058 459,165 3,230,441 4,488,301 3,219,008 1,527,718 551,605 619,098 1,430,955 23,660 53,485 354,166 306,429 1,810,322 1,032,205 1,245,000 1,505,000 1,150, 000 413,291 962,579 1,116, 619 _ 722,409 1,014,842 3,181, 827 1,658,291 3,952,850 21,162,378 20,085,66 /— (27, 380) (3,220,698) (1,902,986) (2,216,213) 5,601,677 5,601,677 635,619 807,119 (874, 384) (1,644, 384) (270, 951) 4,727,293 4,592,912 . 536,168 " (27, 380) 1,506,595 2,689,926 (1,680,045) 293,992 1,842,367 13, 802, 522 15, 482, 567 5,281,486 740,000 $266.612 $8, 630, 448 $17, 232,448 $13, 802, 522 CITY OF EULESS, TEXAS COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED SEPTEMBER 30, 1996 Actual (1 of 2) General Fund Special Revenue Funds Variance rVarianlce FdVUldl)Ie f dVU1dUIe Budget (Unfavorable) Actual Budget (Unfavorable) General property tax: Current and delinquent taxes $4,911,217 $4,850,971 $60,246 Penalty and interest 39,907 36,000 3,907 4,951,124 4,886,971 64,153 Gross receipts tax: Southwestern Bell Telephone Company 346,430 346,432 (2) Texas Utilities Electric Company 1,204,573 1,204,573 Lone Star Gas Company 131,337 130,000 1,337 Cable TV 152,474 156,023 (3,549) City Garbage Service 80,848 79,006 1,842 Others 59,397 57,991 1,406 622,947 580,676 42,271 1,975,059 1,974,025 1,034 622,947 580,676 42,271 General sales tax 3,612,731 3,318,546 294,185 1,806,264 1,660,000 146,264 Fines and fees: Franchise fees 525,432 525,973 (541) Municipal Court fines 1,498,867 1,392,004 106,863 Dog licenses and pound fees 12,529 10,955 1,574 Ambulance fees 196,726 194,111 2,615 2,233,554 2,123,043 110,511 Licenses and permits: Building permits 264,688 160,000 104,688 Miscellaneous permits 161,018 158,895 2,123 Electric licenses 33,847 32,497 1,350 459,553 351,392 108,161 Interest income 372,160 340,696 31,464 Intergovernmental 84,447 86,975 (2,528) 26,656 24,243 2,413 Other revenues: Library receipts 10,486 12,368 (1,882) Rental income 31,069 26,200 4,869 Texas Court cost service fees 60,868 47,996 12,872 Jail income 169,322 155,000 14,322 Swimming pools 14,743 19,907 (5,164) Miscellaneous income 411,165 384 477 26,688 54,181 48,991 5,190 697,653 645,948 51,705 54,181 48,991 5,190 Total revenues $14,386,281 $13,/2/,596 $658,685 $2,510,048 $2,313,910 $196,138 The Notes to the Financial Statements are an integral part of this statement. 8 CITY OF EULESS, TEXAS COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED SEPTEMBER 30, 1996 Actual (2 of 2) General Fund Special Revenue Funds Variance Vanance f•avurd Ie Favurdble Budget (Unfavorable) Actual Budget (Unfavorable) Expenditures: Current: City council/administration $352,733 $361,766 $9,033 Finance 576,991 594,283 17,292 Police department 4,500,463 4,624,680 124,217 Fire department 2,945,447 2,979,509 34,062 Administrative services 481,058 510,321 29,263 Planning and development 644,167 676,928 32,761 613,693 1,086,519 472,826 Parks/recreation/library 1,527,718 1,603,568 75,850 Street maintenance 619,098 629,212 10,114 Betterment 23,660 47,500 23,840 Staff services 354,166 364,041 9,875 Nondepartmental 1,810,322 2,376,550 566,228 Debt Service Principal payments 260,000 260,000 Interest payments 549,288 549,288 Capital Outlay and maintenance 292,433 334,677 42,244 Total expenditures -1'3 5 7_ 14,/65,355 932,535 1,715,414 2,230,484 515,U/U Excess (deficiency) of revenues over expenditures 550,458 (1,040,762) 1,591,220 794,634 83,426 711,208 Other financing sources (uses): Operating transfers in 635,619 638,365 (2,746) 539,592 539,592 Operating transfers out (570,000) (70,000) (500,000) (200,000) (6,509,051) (6,309,051) Total other financing sources (uses) 65,619 568,365 (502,746) (200,000) (5,969,459) (5,769,459) Excess (deficiency) of revenues and other financing sources over expenditures and other financing uses 616,077 (472,397) 1,088,474 594,634 (5,886,033) 6,480,667 Fund balance, beginning of year 4,430,738 4,430,738 7,235,425 7,235,425 Equity transfer -Note 15 (4,541,486) (4,541,486) Fund balance, end of year $5,04E5,815 $3,958,341 $1,055,4/4 $3,285,573 $1,349,392 $1,939,151 The Notes to the Financial Statements are an integral part of this statement. 9 COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS - ALL PROPRIETARY FUND TYPES YEAR ENDED SEPTEMBER 30, 1996 WITH COMPARATIVE TOTALS FOR YEAR ENDED SEPTEMBER 30, 1995 Operating revenues: Water service Sewer service Drainage fees Recreation fees Insurance premiums Service fees and miscellaneous Total operating revenues Operating expenses: General and administrative Water production Water distribution Utility engineering Sewage collection and treatment Nondepartmental Geographic info Service center -Note 7 Drainage Recreation classes Golf course Athletic complex Softball complex Insurance costs -Note 10 Depreciation Amortization Total operating expenses Operating income Enterprise Funds Internal Service Funds $6,412,077 3,358,542 550,152 729,346 1,822,356 1,081,009 273,454 12,131,126 2,095,810 358,432 3,499,893 407,178 179,475 1,502,901 1,565,960 129,338 534,134 52,876 709,975 164,858 9,035 490,597 921,829 18,254 10,544,735 1,586,391 Nonoperating revenues (expenses): Investment income 864,269 Interest on bonds (878,107) Rental income Total nonoperating revenues, net (13,838) Income before operating transfers 1,572,553 Operating transfers in 1,724,384 Operating transfers out (752,841) Net income 2,544,096 Add depreciation on fixed assets acquired with contributed capital -Note 9 Increase in retained earnings Retained earnings, beginning of year Retained earnings, end of year 371,295 1,451,289 255,947 2,078,531 17,279 99,889 18,317 118,206 135,485 80,000 (42,778) 172,707 421,373 2,965,469 172,707 13,637,703 1,914,761 $16,603,172 $2,087,468 Totals (Memorandum Only) 1996 1995 $6,412,077 3,358,542 550,152 729,346 1,822,356 1,354,463 14,226,936 729,727 3,499,893 407,178 179,475 1,502,901 1,565,960 129,338 534,134 52,876 709,975 164,858 9,035 490,597 1,451,289 1,177,776 18,254 1,603,670 964,158 (878,107) 18,317 104,368 1,708,038 1,804,384 (795,619) 2,716,803 421,373 3,138,176 15,552,464 $18,690,640 $5,466,477 3,072,367 337,163 614,128 1,731,000 677,607 11,898,742 762,861 3,436,407 403,616 152,557 1,163,696 1,410,328 83894 513,183 101,286 628,319 1,448,465 1,153,221 13,732 11,271,565 627,177 503,518 (311,523) 65,133 257,128 884,305 54,534 (590,702) 348,137 417,871 766,008 14,786,456 $15,552,464 The Notes to the Financial Statements are an integral part of this statement. 10 CITY OF EULESS, TEXAS COMBINED STATEMENT OF CASH FLOWS - ALL PROPRIETARY FUND TYPES YEAR ENDED SEPTEMBER 30, 1996 WITH COMPARATIVE TOTALS FOR YEAR ENDED SEPTEMBER 30, 1995 (1 of 2) Internal Totals Enterprise Service (Memorandum only) Funds Funds 1996 1996 OPERATING ACTIVITIES: Operating income $1,586,391 $17,279 $1,603,670 $627,177 Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation and amortization expenses 940,083 255,947 1,196,030 1,166,953 (Increase) decrease due to net changes in: Accounts Receivable and unbilled revenue (8,253) (3,553) (11,806) 115,710 Due from other funds 131,302 (62,605) 68,697 Prepaids and deposits (6,286) (6,286) 997 Inventory (37,672) (37,672) Increase (decrease) due to net change in: Accounts payable 192,960 (29,272) 163,688 236,679 Accrued salaries and wages 28,589 28,589 (11,027) Customer and escrow deposits 70,096 70,096 77,695 Deferred revenue (7,800) (7,800) (7,800) Total adjustments 1,303,019 160,517 1,463,536 1,579,207 Net cash provided by operating activities 2,889,410 177,796 3,067,206 2,206,384 NONCAPITAL FINANCING ACTIVITIES : Interest paid on bonds (760,003) (760,003) (315,291) Principal paid on bonds (390,000) (390,000) (360,000) Proceeds from issuance of bonds 12,531,288 12,531,288 Operating transfers in 1,724,384 80,000 1,804,384 54,534 Operating transfers out (752,841) (42,778) (795,619) (590,702) Net cash provided by (used in) noncapital financing activities 12,352,828 37,222 12,390,050 (1,211,459) CAPITAL AND RELATED FINANCING ACTIVITIES: Contributions in aid to construction 667,185 667,185 815,147 Contribution in aid refunded (740,000) (740,000) Purchase of utility plant and equipment in service (9,220,094) (423,808) (9,643,902) (1,484,140) Proceeds from sale of utility plant in service 33,900 33,900 34,941 Net cash used in capital and related financing activities (9,292,909) (389,908) (9,682,817) (634,052) The Notes to the Financial Statements are an integral part of this statement. 11 CITY OF EULESS, TEXAS COMBINED STATEMENT OF CASH FLOWS - ALL PROPRIETARY FUND TYPES YEAR ENDED SEPTEMBER 30, 1996 WITH COMPARATIVE TOTALS FOR YEAR ENDED SEPTEMBER 30, 1995 (2 of 2) Internal Totals Enterprise Service (Memorandum only) Funds Funds 1 y lb 1995 INVESTING ACTIVITIES: Purchase of investment securities ($818,691) $ ($818,691) ($894,873) Proceeds from sale or maturity of investment securities 1,280,677 (Increase) decrease due to net change in Short term investments 3,810 Interest received on investments 899,317 99,889 999,206 465,821 Net cash provided by (used in) investing activitives 80,626 99,889 180,515 855,435 Net decrease in cash and cash equivalents 6,029,955 (75,001) 5,954,954 1,216,308 Cash and cash equivalents, beginning of year 5,883,391 1,350,275 7,233,666 6,017,358 Cash and cash equivalents, end of year $11,913,346 $1,275,274 $13,188,620 $7,233,666 Reconciliation of cash to balance sheet: Cash - current $10,860,022 Cash - restricted assets 1,053,324 Cash and cash equivalents $11,913,346 Restricted assets: Cash $1,053,324 Investments 2,483,847 Interest receivable 19,201 Total restricted assets $3,556,372 The Notes to the Financial Statements are an integral part of this statement, 12 CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the City of Euless (the "City") have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard -setting body for establishing governmental accounting and financial reporting principles. The City's significant accounting policies are described below: Reporting Entity The combined financial statements of the City include the primary government organizations, for which the primary government is financially accountable, and other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete. The definition of the reporting entity is based primarily on the notion of financial accountability. A primary government is financially accountable for the organizations that make up its legal entity. It is also financially accountable for legally separate organizations if its officials appoint a voting majority of an organization's governing body and either it is able to impose its will on that organization or there is a potential for the organization to provide specific financial benefits to, or to impose specific financial burdens on, the primary government. A primary government may also be financially accountable for governmental organizations that are fiscally dependent on it. A primary government has the ability to impose its will on an organization if it can significantly influence the programs, projects, or activities of, or the level of services performed or provided by, the organization. A financial benefit or burden relationship exists if the primary government (a) is entitled to the organization's resources; (b) is legally obligated or has otherwise assumed the obligation to finance the deficits of, or provide financial support to, the organization; or (c) is obligated in some manner for the debt of the organization. Some organizations are included as component units because of their fiscal dependency on the primary government. An organization is fiscally dependent on the primary government if it is unable to adopt its budget, levy taxes or set rates or charges, or issue bonded debt without approval by the primary government. The following entities were found to be component units of the City and are included in the combined financial statements: Euless Development Corporation - The City created the Corporation for the purpose of promoting parks, library services, and economic development within the City. The Corporation's governing body is substantially the same as the governing body of the City of Euless. There are seven directors, four of whom are members of the City Council. The remaining three members are residents of the City. All Board members are appointed by the City Council. The Corporation is authorized to sell bonds or other forms of indebtedness. Upon dissolution of the Corporation, the assets of the Corporation shall be distributed to the City of Euless, Texas. The Corporation provides all of its services to the City of Euless, Texas. 13 CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued Reporting Entity - continued A blended presentation has been used to report the financial information of this component unit. The financial statements for the Corporation were obtained from the Board of Directors. Crime Control District - The City created the District for the purpose of proactively combating rising crime rates by setting up additional crime prevention and rehabilitation programs within the City. The District's governing body is substantially the same as the governing body of the City of Euless. There are seven directors, four of whom are members of the City Council. The remaining three members are residents of the City. All Board members are appointed by the City Council. The District is authorized to sell bonds or other forms of indebtedness. Upon dissolution of the District, the assets of the District shall be distributed to the City of Euless, Texas. The District provides all of its services to the City of Euless, Texas. A blended presentation has been used to report the financial information of this component unit. The financial statements for the District were obtained from the Board of Directors. Fund Accounting The City uses funds and account groups to report its financial position, the results of its operations and its cash flows. 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 moneys (special revenue funds), the acquisition or construction of general fixed assets (capital projects funds) and the servicing of general long- term debt (debt service funds). The general fund is used to account for all activities of the City not accounted for in some other fund. Proprietary funds are used to account for activities similar to those found in the private sector, where the determination of net income is necessary or useful to sound financial administration. Goods or services from such activities can be provided either to outside parties (enterprise funds) or to other departments or agencies within the City (internal service funds). 14 CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued 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 in 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., assets net of liabilities) is segregated into contributed capital and retained earnings components. Proprietary fund -type operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net assets. The proprietary funds are accounted for using the accrual basis of accounting. Revenues are recognized when they are earned, and expenses are recognized when they are incurred. The City applies all GASB pronouncements, FASB Statements and interpretations, APB Opinions and ARB's issued on or before November 30, 1989. The City has elected to apply only GASB pronouncements issued after November 30, 1989 for proprietary activity. 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). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Expenditures are recorded when the related fund liability is incurred. Interest on general long-term debt is recorded as a fund liability when due or when amounts have been accumulated in the debt service fund for payments to be made early in the following year. Revenues considered susceptible to accrual are property taxes, gross receipts tax and interest revenue. Sales taxes collected and held by the state at year-end on behalf of the City also are recognized as revenue. Fine and permit revenues are not 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 or estimated. The City reports deferred revenue on its combined balance sheet. Deferred revenues arise when a potential revenue does not meet both the "measurable" and "available" criteria for recognition in the current period. Deferred revenues also arise when resources are received by the government before it has legal claim to them, such as grant monies received prior to qualifying expenditures being incurred. 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. Deferred revenues primarily include delinquent property taxes and unexpended revenues for capital projects. 15 CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued 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 means of financing them. 2. Public hearings are conducted to obtain taxpayers' comments. 3. Prior to September 21, the budget is legally enacted through passage of an ordinance and a budgetary report is prepared. 4. The City Manager is authorized to transfer budgeted amounts between departments within any fund; however, any revision that alters the total expenditures of any fund must be approved by the City Council. The budget presented reflects revisions made by the City Manager during the year. Total expenditures approved by the City Council have not been altered. The legal level of control is at the fund level. 5. A budget is legally adopted for the General Fund and Special Revenue Funds on a basis consistent with generally accepted accounting principles. Formal budgetary integration is employed as a management control device during the year for the General Fund and Special Revenue Funds. Appropriations and encumbrances lapse at year-end. 6. Formal budgetary integration is not employed for the Debt Service Funds because effective budgetary control is alternatively achieved through general obligation bond indenture provisions. 7. Budgetary data for the Capital Projects Funds has not been presented in the accompanying 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. 8. Appropriated budgets for the Proprietary Funds are also adopted, but have not been presented since reporting on such budgets is not legally required. 16 CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued Deposits and Investments Substantially all operating cash, deposits, and short-term investments are maintained in consolidated cash and investment accounts. Related interest income is allocated to the various funds based primarily on ownership by each fund of specific investments. Cash equivalents consist of highly liquid investments with original maturities of three months or Tess. For purposes of the combined statement of cash flows, the City considers all highly liquid investments (including cash equivalents reported as restricted assets of $1,053,324 and $977,445 at September 30, 1996 and 1995, respectively) as set forth above to be cash equivalents. Short-term investments consist of certificates of deposits and U.S. Government securities with original maturities of three months or more. These investments are stated at cost or amortized cost. State statutes authorize the City to invest in obligations of the U.S. Government or its agencies; obligations of the State of Texas or its agencies; and certain other obligations, repurchase agreements, money market mutual funds and certificates of deposits within established criterion. Taxes Property taxes attach as an enforceable lien on property as of January 1, are levied for appropriation for the fiscal year beginning on October 1, are due October 1, and become delinquent on February 1. Property taxes are accrued based on the period for which they are levied and available. Delinquent taxes estimated to be not available are treated as deferred revenue. Property taxes for cities, including those applicable to debt service, are limited by the Texas Constitution to $2.50 per $100 of assessed valuation. The City's current tax rate is $.606 per $100 of assessed valuation ($.616 per $100 last year) and assessed valuation is approximately 100% of estimated value. Inventories Inventories, which are recognized as expenditures as they are consumed, are stated at cost (first -in, first -out method) for the General Fund. Inventories consist primarily of expendable supplies. 17 CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued 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, Special Revenue Funds, and Capital Projects Funds at the time of purchase or construction and are capitalized in the General Fixed Assets Account Group at cost. Public domain ("infrastructure") general fixed assets consisting of certain improvements other than buildings, including roads, bridges, curbs and gutters, streets and sidewalks, drainage systems and lighting systems are not capitalized in the general fixed assets account group. No depreciation is recorded on general fixed assets. Expenditures for utility plant and equipment are capitalized in the Proprietary Fund Types. Depreciation is recorded on each class of depreciable property in the proprietary funds beginning the year following the year of acquisition and utilizing the straight-line method over the following estimated useful lives of assets: Equipment Waterworks and sanitary sewer system Compensated Absences 5 - 15 years 33 1/3 years Employees may accumulate a maximum of two times their annual vacation. The City's policy is to pay the employee accumulated vacation upon termination. The City does not pay employees for accumulated sick leave upon termination. Accumulated vacation in the proprietary funds has been accrued as incurred and reported as accrued salaries and wages (a current liability). The accumulated vacation of the governmental fund type, representing an estimate of the amounts not expected to be liquidated with expendable available financial resources, has been recorded in the General Long -Term Debt Account Group. The estimated vacation liability expected to be satisfied with available financial resources is included in accrued salaries and wages in the General Fund. Fund Equity Certain assets that are restricted to a specific future use or are not available for appropriation or expenditure are offset by fund balance reserve accounts. Designated fund balances represent tentative plans for future use of financial resources. Comparative Data Comparative total data for the prior year have been presented in the accompanying combined financial statements in order to provide an understanding of the changes in the City's financial position, operations and cash flows. Complete comparative data (i.e., presentation of prior year totals by fund type in each of the statements) have not been presented since its inclusion would make the statements unduly complex and difficult to read. 18 CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued Memorandum Totals The totals column on the combined statements are captioned Memorandum Only to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations or cash flows in conformity with generally accepted accounting principles. Neither is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Interfund Transactions Quasi -external transactions are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as a reduction of expenditures/expenses in the fund reimbursed. All other interfund transactions, except quasi -external transactions and reimbursements, are recorded as transfers. Nonrecurring or nonroutine permanent transfers of equity are reported as residual equity transfers. All other interfund transfers are reported as operating transfers. Reclassifications Certain 1995 amounts have been reclassified to conform to the 1996 presentation. NOTE 2. DEPOSITS AND INVESTMENTS Deposits At September 30, 1996, the bank balances were $333,842 and the ledger balances of the City's book cash deposits were $1,077,880. Of the bank balances, $1,077,880 were protected by federal depository insurance or by collateral held by the City's agent in the City's name. Investments At September 30, 1996, the City's investments are categorized as either (1) insured or registered or for which the securities are held by the City or its agent in the City's name; (2) collateralized with securities held by the pledging financial institution's trust department or agent in the City's name; or (3) uncollateralized for which the securities are held by the financial institution, or by its trust department or agent but not in the City's name, as follows: U. S. Securities 1 Categories Carrying 2 3 Amount $3,112,858 $27,660,321 $30,773,179 Market Value $30,971,273 19 CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 2. DEPOSITS AND INVESTMENTS - continued tinued Categories 1 2 3 Carrying Amount Market Value Deferred Compensation Agency Fund Investments 2,875,009 2,875,009 $8.3.548.188. $33.846,282 The Deferred Compensation Agency Fund investments are held by independent investment managers for the ultimate benefit of the City employees and are not covered by the state statutes restricting investment instruments and requiring collateralization. NOTE 3. LONG-TERM DEBT A summary of long-term debt transactions for the year ended September 30, 1996, is as follows: General Long -Term Debt Account Group: General Obligation Bonds Certificates of Obligation Sales tax revenue bonds Capital leases Compensated absences Balance Beginning of Year $ 8,311,586 1,100, 000 8,855,000 68,967 499,736 $18.888.28Q Increase 4,224,453 1,485,000 168,540 Decrease Balance End of Year $1,050,000 $ 7,261,586 195,000 5,129, 453 260,000 10, 080, 000 17,041 51,926 668,276 $5 87Z_ 11,5 224441 ., t 441. 20 CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 3. LONG-TERM DEBT - continued Proprietary Fund Types: Water and Sewer Revenue Bonds Drainage Utility Revenue Bonds Tax and Golf Course Surplus Revenue Certificates of Obligation Tax and Softball Works Park Surplus Revenue Certificates of Obligation Tax and Waterworks and Sewer System Revenue Certificates of Obligation Balance Beginning of Year Increase $ 3,285,000 $ 2,025,000 9,700,000 2,000,000 985,426 Decrease $ 365,000 25,000 $ 5. 14.9QQ $12.685.426 $_ 390,000 Debt outstanding at September 30, 1996 consists of the following: General Obligation Bonds Certificates of Obligation Sales Tax Revenue Bonds Capital leases Water and Sewer Revenue Bonds Drainage Utility Revenue Bonds Tax and Golf Course Surplus Revenue Certificates of Obligation Tax and Softball World Park Surplus Revenue Certificates of Obligation Tax and Waterworks and Sewer System Revenue Certificates of Obligation Range of Interest Rates 2.80 to 9.20% 5.40 to 7.13% 5.20 to 8.10% 5.97 to 13.96% 4.50 to 6.50% 4.75 to 6.70% 5.25 to 5.90% 4.10 to 5.25% 5.20 to 5.85% Outstanding Balance Current Maturities $7,261,586 $1,135,000 5,129,453 205,000 10, 080, 000 310,000 51,926 17,488 2,920,000 370,000 2,000,000 9,700,000 2,000,000 985,426 30,000 65,000 Balance End of Year $ 2,920,000 2,000,000 9,700,000 2,000,000 985,426 $17.6Q5.42$ Long -Term Maturities $6,126,586 4,924,453 9,770,000 34,438 2,550,000 1,970,000 9,700,000 1,935,000 985,426 21 CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 3. LCNG-TERM DEBT - continued The debt matures serially through the year 2027 and has various call options whereby it may be redeemed during certain periods prior to maturity. A schedule of principal and interest maturities follows. Due to the nature of the obligation for compensated absences, annual requirements to amortize such obligations are not determinable and have not been included in the following summary. General Obligation Bonds 1997 $ 1,416,890 1998 1,303,987 1999 1,219,060 2000 1,144,455 2001 1,162,065 2002-2006 4,110,791 2007-2011 486,588 2012-2016 10,843,836 Less interest 3.582.250 Principal S_7 261.586 1997 1998 1999 2000 2001 2002-2006 2007-2011 2012-2016 2017-2021 2022-2026 2027 Utility Drainage Revenue Bonds $ 155,732 224,082 223,432 222,342 225,852 1,148,438 931,636 Certifi- cates of Obligation Sales Tax Revenue Bonds $ 681,815 $ 935,203 610,156 927,673 611,676 910,588 529,715 897,693 419,279 888,583 1,848,074 4,420,240 1,794,442 4,424,785 1.806,670 3,690,270 8,301,827 17,095,035 3.172.374 7.015.035 $5122.45 S10 Q Q-00Q $_5.9.926 Tax and Golf Course Surplus Revenue Certs. of Obligation $ 553,466 578,466 602,152 624,528 645,590 3,561,150 3,552,480 3,562,054 3,565,900 3,560,982 714.826 3,131,514 21,521,594 Less interest 1.131,514 11.821.594 Tax and Tax and Softball Waterworks World Park and Sewer Surplus System Revenue Revenue Certs. of Certs. of Obligation Obligation $ 146,361 158,776 161,009 158,139 160,166 800,249 818,678 841,387 3,244,765 1,244,765 Principal S2.000.100 $-9_1Q0..Q1:11:1 S2.000.000 $ 99,662 84,896 85,116 85,238 84,335 420,227 420,918 423,787 1,704,179 718.753 985.426. Capital Leases Water and Sewer Revenue Bonds Subtotal $17,488 $ 521,480 $ 3,572,876 19,711 527,355 3,388,882 19,711 496,641 3,257,676 505,871 3,077,734 513,625 2,983,552 990,700 11,369,805 6,705,815 5,496,940 56,910 3,555,672 39,853,280 4.984 635.672 14.410.315 $2 2Q_QQQ 121442.25.5 Subtotal $ 955,221 1,046,220 1,071,709 1,090,247 1,115,943 5,930,064 5,723,712 4,827,228 3,565,900 3,560,982 714.826 29,602,052 14.916,626 114 6i5.426 Grand Total $ 4,528,097 4,435,102 4,329,385 4,167,981 4,099,495 17,299,869 12,429,527 10,324,168 3,565,900 3,560,982 714.826 69,455,332 29,326,941 S40.12&327, 22 CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 3. LONG-TERM DEBT - continued General Obligation Bonds authorized and unissued as of September 30, 1996, amounted to $300,000. Water and Sewer Revenue Bonds authorized and unissued as of September 30, 1996, amounted to $1,200,000. The water and sewer bonds were authorized in 1970 and currently the City Council has no intent to issue these bonds. At September 30, 1996, $1,500,000 of the defeased bonds in the 1991 refunding are still outstanding. Water and Sewer Revenue Bonds and Refunding Bonds and Drainage Utility Revenue Bonds are payable solely from and equally secured by a first lien on and pledge of the net revenue of the City's combined waterworks and sanitary sewer system and the net revenues of the City's drainage utility system, respectively. In accordance with the water and sewer revenue and refunding bond ordinances, the following special reserves were established: Reserve for revenue bond debt service - to be used for retirement of the current portion of principal and interest payments due. Reserve for 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 funding requirements for the above reserves were met at September 30, 1996. The amounts reserved are reported as restricted assets of the Enterprise Funds. Investments of funds included in the bond reserve and emergency accounts are restricted to direct obligations unconditionally guaranteed by the United States of America having maturities not in excess of ten and five years, respectively. The City issued Tax and Water and Sewer Revenue Certificates of Obligation, Series 1995, and Golf Course Surplus Revenue Certificates of Obligation, Series 1995, for $5,200,000 and $9,700,000, respectively, on November 13, 1995. Bond issuance costs were $98,036. In addition, the City issued Tax and Softball Works Park Surplus Revenue Certificates of Obligation, Series 1996, and Sales Tax Revenue Bonds, Series 1996, for $2,000,000 and $1,485,000, respectively, on February 1, 1996 and August 27, 1996, respectively. Bond issuance costs were $42,879. 23 CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 4. RESTRICTED ASSETS Restricted assets consist of cash, investments and accrued interest primarily restricted for Water and Sewer Enterprise Fund debt service and water and sewer system replacements. The City sold certain of the waterworks and sanitary sewer system properties situated within the City of Bedford to that City in 1968. The proceeds were restricted to the prepayment or redemption of certain revenue bonds; investment income of the funds may be applied to current revenue bond interest up to stipulated amounts. As of September 30, 1996, the balance in the property sales proceeds account was $159,784 and is included in restricted assets in the accompanying balance sheet. NOTE 5. COMMITMENTS AND CONTINGENT LIABILITIES The City entered into a 50 year contract dated September 25, 1973, with the Trinity River Authority of Texas (the "TRA") whereby the TRA agrees to provide supplemental water and sewage treatment for consideration. Payments by the City are based on metered usage at rates designed to charge the City a prorata share of the TRA's annual operating and maintenance expenses, principal and interest requirement on bonds issued by the TRA. Payments under this contract approximated $4,475,000 in 1996 and are included as operating expenses of the water and sewer fund. The payments increased approximately $180,000 in comparison to 1995. The City is involved in a number of lawsuits arising in the ordinary course of business. In the opinion of the City's legal counsel and management, any liability resulting from such litigation would not be material in relation to the City's financial position. NOTE 6. FIXED ASSETS The following is a summary of changes in the general fixed assets account group during the fiscal year: Land Buildings Improvements other than buildings Machinery and equipment Balance September 30, 1995 $ 3,091,217 5,967,286 Additions $ 198,202 2,828,661 2,546,081 825,546 4.415.304 519,313 11.1Q12.$$$3Z1.Z22. Balance September 30, Deletions 1996 $ $ 3,289,419 8,795,947 3,371,627 4,934,617 $ 224.1.514 24 CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 6. FIXED ASSETS - continued The following is a summary of utility plant and equipment in service at September 30, 1996 included in the proprietary funds: Enterprise Funds Internal Water and Drainage Golf Course Softball Athletic Service Sewer Fund Utility Fund Fund Complex Complex Funds Land and building $1,528,966 $ $348,135 $1,358,679 $ $ Equipment 1,258,177 6,510 14,207 1,632,314 Improvements 10,794 40,390 Waterworks and sanitary sewer system 28,168,535 2,439,078 Construction in progress 5.930.947 1.277.794 30,955,678 2,445,588 6,279,082 1,383,680 1,277,794 1,672,704 Less accumulated depreciation 13.289.517 62.379 764,310 $17.666.161_ $2.383.209 $5.2Z8.Qfl2, $1..$1.fi$Q $1.277.794 1-2111 NOTE 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. NOTE 8. INTERFUND ASSETS/LIABILITIES Receivable Fund Payable Fund Amount Water and Sewer Debt Service NOTE 9. CONTRIBUTED CAPITAL General $ 87,299 General 812 1_11111. During fiscal 1996, contributed capital of the Enterprise Funds increased by developer's and other funds contributions in aid to construction of $667,215 and decreased $421,373 representing current year depreciation on assets acquired with contributed capital and $740,000 refunded to the Capital Projects Fund. 25 CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 10. RISK MANAGEMENT The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City participates in the Texas Municipal League Joint Self Insurance Fund ("TMLIF") to provide both general liability and property insurance. The City, along with other participating entities, contributes annual amounts determined by TMLIF management. As claims arise they are submitted to and paid by TMLIF. The City is not liable for payments beyond their annual contributions to TMLIF. The City provides employee medical insurance coverage on a self -insured basis. Premiums are paid into a separate Insurance Fund by other funds, by the City's employees, and by retirees and are available to pay claims, claim reserves and administrative costs of the program. An excess coverage insurance policy covers individual claims in excess of $60,000 and aggregate claims in excess of $1,083,333. During fiscal 1996, the City and City's employees contributed approximately $917,625 and $396,617, respectively, for medical coverage. The City's contributions are accounted for as quasi -external transactions. Claims incurred but not reported have been considered by the City in determining the claims liability at September 30, 1996 and are accounted for in the Internal Service Fund. The City is also self -insured for workers' compensation claims. Contributions are made to a separate Risk Management Fund by other funds 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 $300,000. During 1996, the City contributed approximately $268,114 to the fund for workers' compensation. The City had no significant reductions in insurance coverage from the year ended September 30, 1995. Settlement amounts have not exceeded insurance coverage for the year ended September 30, 1996 or any of the three preceding years ended September 30. At September 30, 1996 and 1995, the City had no change in the aggregate amount of estimated claims liabilities. NOTE 11. 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 a state-wide Texas Municipal Retirement System (TMRS), one of over 670 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 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 City -financed monetary credits, with interest. At the date the plan began, the City granted monetary credits for service rendered before the plan began of a theoretical amount equal to 26 CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 11. EMPLOYEE RETIREMENT SYSTEM - continued two times what would have been contributed by the employee with interest, prior to establishment of the plan. Monetary credits for service since the plan began are a percent (100%, 150%, or 200%) of the employee's accumulated contributions. In addition, the City can grant as often as annually another type of monetary credit referred to as an updated service credit which is a theoretical amount which, when added to the employee's accumulated contributions and the monetary credits for service since the plan began, would be the total monetary credits and employee contributions accumulated with interest if the current employee contribution rate and the City matching percent had always been the average of his salary in the last three years that are one year before the effective date. At retirement, the benefit is calculated as if the sum of the employee's accumulated contributions with interest and the employer -financed monetary credits with interest were used to purchase an annuity. Members can retire at ages 60 and above with 10 years or more 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. Contributions The contribution rate for the employees is 7%, and the City matching percent is currently 200%, 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. This rate consists of the normal cost contribution rate and the prior service contribution rate, both of which are calculated to be a level percent of payroll from year to year. The normal cost contribution rate finances the currently accruing monetary credits due to city matching percent, which are the obligation of the city as of an employee's retirement date, not at the time the employee's contributions are made. The normal cost contribution rate is the actuarially determined percent of payroll necessary to satisfy the obligation of the City to each employee at the time his retirement becomes effective. The prior service contribution rate amortizes the unfunded actuarial liability over the remainder of the plan's 25 year amortization period. When the City periodically adopts updated 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 in January 1996. 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 1996 was $10,235,696 and the City's contributions were based on a payroll of $9,884,244. Both the City and the covered employees made the required contributions, amounting to $1,256,549 (11.92% of covered payroll for the months in calendar year 1995, 9.03% normal cost plus 2.89% to amortize the unfunded actuarial liability, and 27 CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 11. EMPLOYEE RETIREMENT SYSTEM - continued 13.01 % for the months in calendar year 1996, 9.67% normal cost plus 3.34% to amortize the unfunded actuarial liability) for the City and $691,820 (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 1996 by 0.06% of payroll. There were no related -party transactions. 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 has an initial unfunded pension benefit obligation due to monetary credits granted by the City for services rendered before the plan began 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 Boards (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 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, 1995. Because of the money -purchase nature of the plan, the interest rate assumption, currently 8.0% per year, does not have as much impact on the results as it does for a defined benefit plan. Market value of the assets is not determined for each City's plan, but market value of assets of TMRS as a whole was 114.2% of book value as of December 31, 1995. Pension Benefit Obligation Annuitants currently receiving benefits $ 2,316,304 Terminated employees 3,457,533 Current Employees Accumulated employee contributions including allocated invested earnings 8,265,912 Employer -financed vested 14,716,735 Employer -financed nonvested 1,692,726 Total $30.449.210 Net Assets Available for Benefits, at Book Value $22$48.116 Unfunded Pension Benefit Obligation $_6.OQ11Q74 28 CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 11. EMPLOYEE RETIREMENT SYSTEM - continued Funding Status and Progress - continued 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 numbers above reflect the adoption of changes in the plan since the previous actuarial valuation, which had the effect of increasing the pension benefit obligation by $105,232. Trend information for the past three years for TMRS is as follows: Year Net Assets Available For Benefits as a Percent of Pension Benefit Obligation 1994 76.62% 1995 77.16% 1996 78.32% Unfunded Pension Benefit Obligation as a Percent of Covered Pavroll 62.43% 66.47% 66.78% City Contribution as a Percent of Covered Payroll 11.31% 11.37% 12.71% Historical trend information for TMRS is presented in the Statistical Section, Table 13 of the City's Comprehensive Annual Financial Report. This table provides information about progress made in accumulating sufficient assets to pay benefits when due. NOTE 12. DEFERRED COMPENSATION PLAN The City offers its employees a Non-contributory Deferred Compensation Plan (the "Plan") consistent with Internal Revenue Code Section 457. Plan asset ownership remains with the City until the employee terminates with the City, retires or experiences an unforeseeable emergency. Employees may contribute voluntarily to the Plan up to $7,500 annually. Assets of the plan are invested primarily in various mutual funds. The current market value of the funds' investments at September 30, 1996 was $2,875,009. The Plan has no unfunded liabilities. All contributions to the Plan are remitted bi-weekly to the administrator of the Plan. All amounts of compensation deferred under the Plan, all assets purchased with these amounts, and all income attributable to these amounts, are (until paid or made available to the employee or other beneficiary) solely the property and rights of the City subject only to the claims of the City's general creditors. The City has no legal liability for losses of the plan, but does have the duty of due care that would be required of an ordinary prudent investor. The City believes it is unlikely that it will use the assets to satisfy the claims of general creditors in the future. The Plan is reported as a fiduciary fund in the accompanying financial statements. 29 CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 13. SEGMENTS OF ENTERPRISE ACTIVITIES The City maintains six Enterprise Funds. The Water and Sewer Fund provides water distribution and wastewater collection services and contractually secures water supply and wastewater treatment services from the Trinity River Authority. The Drainage Utility Fund provides drainage services. The Recreation Classes, Golf Course, Softball Complex, and Athletic Complex provide various recreational services and activities. Segment information for the Water and Sewer Fund Operating revenues $10,194,331 Depreciation 892,293 Operating income (loss) 1,116,966 Operating transfers out 560,432 Net income (loss) 796,364 Current capital contributions 478,675 Property, plant and equipment: Additions 810,474 Total Assets 27,314,730 Net working capital 5,669,538 Long-term debt, including current portion 2,920,000 Total Equity 22,985,318 NOTE 14. CAPITAL LEASES City's Enterprise Funds is as follows: Drainage Utility Fund Recreation Golf Classes Course Softball Complex Athletic Complex Total $ 550,152 $729,346 $ 1,606 $ 655,691 $ $12,131,126 29,536 921,829 461,769 19,371 ( 165,904) 163,818 ( 9,629) 1,586,391 28,073 16,016 23,320 125,000 752,841 319,757 3,355 61,876 104,355 1,258,389 2,544,096 188,540 667,215 20,523 2,967,172 503,003 2,000,000 937,642 5,727,622 18,344 10,137, 295 15,378 3,388,446 1,383,680 2,186,542 742,309 1,277,794 9,220,093 2,570,269 45,194,352 1,007,472 11, 326,146 9,700,000 2,000,000 985,426 17,605,426 15,378 61,876 104,355 1,258,389 25, 362, 958 The City has entered into lease agreements as lessee for financing the acquisition of computer hardware, software, communications equipment, and a copier. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception. These assets are stated on the balance sheet at their capitalized cost of $247,412. The following is a schedule of the future minimum lease payments under these capital leases, and the present value of the net minimum lease payments at September 30, 1996. 1997 1998 1999 Total minimum lease payments Less: amount representing interest Present value of future minimum lease payments $17,488 19,711 19,711 56,910 4,984 $51.926 30 CITY OF EULESS, TEXAS NOTES TO FINANCIAL STATEMENTS NOTE 15. EQUITY TRANSFER Effective October 1, 1995, the City's blended component unit, the Euless Development Corporation, established a capital projects fund to account for the expenditure of the proceeds from a 1994 bond issue. The fund was established by transferring $4,541,486 from fund balance of the component units' general fund. The amount transferred represents the residual of the bond proceeds remaining to be expended at October 1, 1995. Since the transfer, the expenditure of bond proceeds are recorded in the Capital Projects Fund. The component's general fund is blended into the City's Special Revenue Funds and the component's Capital Projects Fund is blended with the City's Capital Projects Funds. In fiscal 1996, the City's Golf Course Enterprise Fund elected to refund $740,000 of contibution in aid of construction to the Euless Development Corporation's Half -Penny Sales Tax Fund, which is a blended component unit of the City's Capital Projects Fund. The contribution had been made by Euless Development Corporation during fiscal 1995 and 1996 to aid in development of the Golf Course. The refund has been recorded as an equity transfer to the Half -Penny Sales Tax Fund and a reduction in Contributions in Aid of Construction in the Golf Course Enterprise Fund. 31 • . • 1 ♦ ♦ • • E * INDIVIDUAL FUND AND ACCOUNT GROUP STATEMENTS AND SCHEDULES SPECIAL REVENUE FUNDS Special revenue funds are used to account for specific revenues that are legally restricted to expenditures for particular purposes. Hotel/Motel Fund - to account for the operations and expenditures for which hotel/motel occupancy taxes are used. Occupancy tax revenues are used primarily for advertising and promotion of the City. Police Drug Enforcement Fund - to account for proceeds from sale of assets seized in connection with drug arrests. Revenues are used solely for police department expenditures. Half -Penny Sales Tax Fund - to account for the sales tax revenues and expenditures of the Euless Development Corporation, a component unit of the City of Euless. The expenditures of the half -penny sales tax can only be spent on parks, library, debt service, and economic development activities within the City of Euless. Fort Worth DEA Task Force Fund - to account for the revenues and expenditures received from collection of confiscated drug money. Money is distributed to various other cities that are also involved in the collection process. Crime Control and Prevention District Fund - to account for the revenues and expenditures of this component unit of the City of Euless. The revenues are collected from sales taxes and expenditures can only be spent on new operating and capital activities specifically for approved crime control and prevention programs. CITY OF EULESS, TEXAS SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET SEPTEMBER 30, 1996 WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1995 Police Crime Drug Half DEA Control and Hotel/ Enforce- Penny Task Prevention Motel ment Sales Tax Force District Totals Fund Fund Fund Fund Fund 1996 1995 ASSETS Deposits and investments $423,694 $232,137 $2,317,889 $6,244 $183,278 $3,163,242 $7,717,663 Accrued interest receivable 9,363 9,363 185,796 Due from other governments 117,537 117,537 Total assets $423,694 $232,137 $2,444,789 $6,244 $183,278 $3,290,142 $7,903,459 LIABILITIES AND FUND EQUITY LIABILITIES: Accounts payable $1,181 $388 $1,569 $668,034 Total liabilities 1,181 388 1,569 668,034 FUND EQUITY: Fund Balances: Reserve for debt service 809,288 809,288 809,288 Unreserved, undesignated 422,513 231,749 1,635,501 6,244 183,278 2,479,285 6,426,137 Total fund equity 422,513 231,749 2,444,789 6,244 183,278 3,288,573 7,235,425 Total liabilities and fund equity $423,694 $232,137 $2,444,789 $6,244 $183,278 $3,290,142 $7,903,459 32 CITY OF EULESS, TEXAS SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES YEAR ENDED SEPTEMBER 30, 1996 WITH COMPARATIVE TOTALS FOR YEAR ENDED SEPTEMBER 30, 1995 Revenues: Gross receipts tax General sales tax Interest income Other revenues Total revenues Expenditures: Planning and development Debt service Principal Interest and fiscal charges Capital outlay and maintenance Total expenditures Other financing sources (uses): Operating transfers out Total other financing sources (uses) Excess of revenues and other financing sources (uses) over expenditures Fund balance, beginning of year Equity transfer Fund balance, end of year $422,513 $231,749 Hotel/ Motel Fund $288,806 14,118 986 303,910 71,589 26,274 97,863 (200,000) (200,000!. Police Drug Half Enforce- Penny ment Sales Tax Fund Fund $129,084 1,806,264 10,832 139,916 1,806,264 36,940 428,913 260,000 549,288 266,159 303,099 1,238,201 6,047 (163,183) 568,063 416,466 394,932 6,418,212 (4,541,486) $2,444,789 DEA Task Force Fund Crime Control and Prevention District Fund $ 205,057 472 1,234 53,195 53,667 206,291 53,238 23,013 53,238 23,013 429 183,278 Totals 1996 1995 $622,947 1,806,264 26,656 54,181 2,510,048 613,693 260,000 549,288 292,433 1,715,414 (200,000) (200,000) $650,542 1,519,185 587,697 105,776 2,863,200 2,643,400 616,423 2,855,658 6,115,481 594,634 (3,252,281) 5,815 7,235,425 10,487,706 (4,541,486) $6,244 $183,278 $3,288,573 $7,235,425 33 CITY OF EULESS, TEXAS SPECIAL REVENUE FUNDS STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL YEAR ENDED SEPTEMBER 30, 1996 Hotel/Motel Fund Police/Drug Enforcement Fund Variance rVariance FdVUfdbI r dVUfdble Actual Budget (Unfavorable) Actual Budget (Unfavorable Revenues: Gross receipts tax $288,806 $300,000 ($11,194) $129,084 $105,676 $23,408 General sales tax Interest income 14,118 13,577 541 10,832 10,199 633 Other revenues 986 986 Total revenues 303,910 314,563 (10,653) 139,916 115,875 24,041 Expenditures: Planning and development 71,589 89,582 17,993 36,940 37,000 60 Debt Service Principal Debt Service Interest Capital outlay and maintenance 26,274 37,000 10,726 266,159 297,677 31,518 Total expenditures 97,863 126,582 28,719 303,099 334,677 31,578 Other financing sources (uses): Operating transfers in 237,000 (237,000) 302,592 (302,592) Operating transfers out (200,000) (200,000) Total other financing sources (uses) (200,000) 37,000 (237,000) 302,592 (302,592) Excess of revenues and other financing sources over expenditures 6,047 224,981 (218,934) (163,183) (218,802) 55,619 Fund balance, beginning of year 416,466 416,466 394,932 394,932 Equity transfer Fund balance, end of year $422,513 $641,447 ($218,934) $231,749 $176,130 $55,619 Half Penny Sales Tax Fund DEA Task Force Fund Crime Control and Prevention District Fund Variance Variance Variance Favu'able Fdvulable FdVU abld Actual Budget (Unfavorable) Actual Budget (Unfavorable) Actual Budget (Unfavorable) $205,057 $ 175,000 30,057 1,806,264 1,660,000 146,264 472 467 5 1,234 1,234 53,195 48,005 5,190 1,806,264 1,660,000 146,264 53,667 48,472 5,195 206,291 175,000 31,291 428,913 849,244 420,331 53,238 53,238 23,013 57,455 34,442 549,288 549,288 260,000 260,000 1,238,201 1,658,532 420,331 53,238 53,238 23,013 57,455 34,442 (6,309,051) 6,309,051 (6,309,051) 6,309,051 568,063 (6,307,583) 6,875,646 429 (4,766) 5,195 183,278 117,545 65,733 6,418,212 6,418,212 5,815 5,815 (4,541,486) (4,541,486) $2,444,789 $110,629 $2,334,160 _ $6,244 $1,049� $5,195 $183,278 $117,545 $65,733 35 1 M• • I T♦• I ]Es CAPITAL PROJECTS FUNDS Capital projects funds are used to account for the acquisition and construction of major capital facilities other than those financed by proprietary funds and trust funds. Park Improvements Certificates of Obligation Fund (1990) - to account for the construction of park facilities. Financing was provided from the sale of Certificates of Obligation of $2,000,000 in 1990. Street Assessments Fund - to account for receipt of funds for special assessment collection and subsequent construction of improvements to various street and drainage projects. Street Improvement and Drainage Certificates of Obligation Fund (1990) - to account for the construction of improvements to various street and drainage projects. Financing was provided by the sale of Certificates of Obligation in 1990. Half -Penny Sales Tax Construction in Progress Fund - to account for bond proceeds to be expended for construction projects funded by the Euless Development Corporation, a component unit of the City of Euless. Developers' Contribution Fund - to account for funds received for the purpose of making new and future improvements to various development areas within the City. CITY OF EULESS, TEXAS CAPITAL PROJECTS FUND COMBINING BALANCE SHEET SEPTEMBER 30, 1996 WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1995 Street Park Improvement Improvements and Drainage Certificates of Street Certificates Obligation Assessments of Obligation Fund (1990) Fund Fund (1990) ASSETS Deposits and investments $17,687 $38,658 $4,397,252 Bond proceeds receivable Accrued interest receivable 28,293 Total assets $17,687 $38,658 $4,425,545 LIABILITIES AND FUND EQUITY Accounts payable $168,503 Customer and escrow deposits Total liabilities 168,503 Fund Balances: Reserve for development Agreements Unreserved, undesignated 17,687 38,658 4,257,042 Total fund equity 17,687 38,658 4,257,042 Total liabilities and fund equity $17,687 $38,658 $4,425,545 36 Half -Penny Sales Tax Developers' Construction Contribution Totals in Progress Fund 1996 1995 $1,223,951 $1,639,304 $7,316,852 $1,835,062 1,461,438 1,461,438 32,062 60,355 28,373 2,685,389 $1,671,366 $8,838,645 $1,863,435 $37,712 206,215 $20,318 1,982 1,982 750 37,712 1,982 208,197 21,068 1,374,610 1,374,610 1,296,601 2.647.677 294,774 7,255,838 545,766 2.647,677 1,669,384 8,630,448 1,842,367 $2.685,389 $1,671,366 $8,838,645 $1,863,435 CITY OF EULESS, TEXAS CAPITAL PROJECTS FUND COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES YEAR ENDED SEPTEMBER 30, 1996 WITH COMPARATIVE TOTALS FOR YEAR ENDED SEPTEMBER 30, 1995 Revenues: Interest income Intergovernmental Assessments Total revenues Street Park Improvement Improvements and Drainage Certificates of Street Certificates Obligation Assessments of Obligation Fund (1990) Fund Fund (1990) $216,606 39,704 39,704 216,606 Expenditures: Planning and development Capital outlay and maintenance 395,107 Excess (deficiency) of revenues over expenditures 39,704 (178,501) Other financing sources (uses): Net proceeds from issuance of certificates of obligation Operating transfers in Operating transfers out 4,140,239 Total other financing sources (uses) 4,140,239 Excess (deficiency) of revenues and other financing sources over expenditures and other financing uses 39,704 3,961,738 Fund balances, beginning of year 17,687 (1,046) 295,304 Equity transfer Fund balances, end of year $17,687 $38,658 $4,257,042 38 Half -penny Sales tax Developers' Construction Contribution Totals in Progress Fund 1996 1995 $336,880 $60,953 $614,439 $81,704 40,068 78,009 117,713 104,824 336,880 138,962 732,152 226,596 3,230,441 3,230,441 327,302 722,409 326,169 (3,220,863) 138,962 (3,220,698) (99,573) 1,461,438 5,601,677 270,000 (874,384) (874,384) (85,000) 587,054 4,727,293 185,000 (2,633,809) 138,962 1,506,595 1,530,422 1,842,367 5,281,486 5,281,486 85,427 1,756,940 $2,647,677 $1,669,384 $8,630,448 $1,842,367 E • ENTERPRISE FUNDS Enterprise funds are used to account for operations that are financed and operated in a manner similar to private business enterprises - where the intent of the government's council is that the costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or where the government's council has decided that periodic determination of net income is appropriate for accountability purposes. Water and Sewer Fund - to account for the acquisition, operation and maintenance of a municipal water and sewer utility, supported primarily by user charges to the public. Drainage Utility Fund - to account for the acquisition, operation and maintenance of a municipal drainage utility, supported primarily by user charges. Recreation Classes - to account for the operation of recreational programs and activities which are offered to groups and individuals on a fee basis. Golf Course Fund - to account for the operation and maintenance of the golf course, supported primarily by user charges. Softball Complex Fund - to account for the operation and maintenance of the softball complex, supported primarily by user charges. Athletic Complex Fund - to account for the operation and maintenance of the athletic complex, supported primarily by user charges. CITY OF EULESS, TEXAS ENTERPRISE FUNDS COMBINING BALANCE SHEET SEPTEMBER 30, 1996 WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1995 Water and Drainage Sewer Fund Utility Fund ASSETS Current assets: Deposits and investments $4,650,768 $466,867 Accounts and unbilled revenue less allowance for uncollectibles of $1,463 for water and sewer and $141,080 for drainage utility 1,267,667 39,478 Accrued interest receivable 32,967 Prepaids and deposits 6,928 Inventory Due from other funds 87,299 Total current assets 6,045,629 506,345 Restricted assets: Revenue bond debt service: Cash with paying agent 6,676 Revenue bond retirement: Investment with paying agent, at cost 642,057 Revenue bond emergency: Short-term investments 500,000 Property sale proceeds account: Investment with paying agent, at cost 159,784 Capital projects account: Cash and cash equivalents 129,252 Short-term investments 1,182,006 Customer deposits: Cash and cash equivalents 917,396 Interest receivable on investments 19,201 Total restricted assets 3,556,372 Bond issuance cost 85,373 107,473 Less accumulated amortization 38,805 29,855 Net bond issuance cost 46,568 //,618 Utility plant and equipment in service, at cost Land and Building 1,528,966 Equipment 1,258,177 Waterworks and sanitary sewer system 28,168,535 Construction in progress 2,445,588 30,955,678 2,445,588 Less accumulated depreciation 13,289,517 62,379 Net utility plant and equipment in service 17,666,161 2,383,209 TOTAL ASSETS $27,314,730 $2,967,172 40 (1 of 2) Recreation Golf Course Softball Athletic Totals Classes Fund Complex Complex 1996 1995 $18,344 $3,732,266 $723,587 $1,268,190 $10,860,022 $4,905,946 1,307,145 1,298,892 31,599 10,620 75,186 110,234 6,928 642 37,672 37,672 87,299 218,601 � dd� 3,763,865 761,259 1,278,810 12,3!4,2b2 6,534,315 6,676 8,638 642,057 609,227 500,000 500,000 159,784 346,641 129,252 121,507 1,182,006 209,288 917,396 847,300 19,201 19,201 3,556,3/2 2,661,802_ 97,000 42,879 14,259 346,984 192,846 2,652 1,276 594 73,182 54,928 94,348 41,603 13,665 273,802 137,918- 348,135 1,369,473 3,246,574 1,868,966 14,207 1,272,384 2,096,909 28,168,535 26,375,668 5,930,947 1,277,794 9,654,329 2,780,186 6,279,082 1,383,680 1,277,794 42,341,822 33,121, 129 13,351,896 12,430,067 6,279,082 1,383,680 1,277,794 28,989,926 20,691,662 $18,344 $10,137,295 $2,186,542 $2,570,269 $45,194,352 $30,025,697 41 CITY OF EULESS, TEXAS ENTERPRISE FUNDS COMBINING BALANCE SHEET SEPTEMBER 30, 1996 WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1995 Water and Drainage Sewer Fund Utility Fund LIABILITIES AND FUND EQUITY Current liabilities: current assets: Accounts payable $268,871 Accrued salaries and wages 107,220 Total current liabilities $3,342 376,091 3,342 Current obligations payable from restricted assets: Customer and escrow deposits 917,396 Current portion of bonds payable 370,000 30,000 Accrued interest 35,452 26,188 Bonds payable 2,550,000 1,970,000 Deferred revenue 80,473 Total liabilities 4,329,412 2,029,530 Fund equity: Contributed capital: From Euless Development Corporation From subdividers From Enviornmental Protection Agency From Trinity River Authority Accumulated depreciation on assets acquired with contributed capital Net contributed capital 14,850,073 239,617 15,000 15,104,690 6,344,904 8,759,786 Retained earnings: Reserved for: Computer 175,000 Revenue bond retirement 792,266 Emergency 500,000 Recycling 19,712 Total reserved 1,486,978 Unreserved 12,738,554 937,642 Total Retained earnings (deficit) 14,225,532 937,642 Total fund equity 22,985,318 937,642 TOTAL LIABILITIES AND FUND EQUITY $27,314,730 $2,967,172 (2 of 2) Recreation Golf Course Softball Athletic Totals Classes Fund Complex Complex 1996 1995 $2,966 $375,419 $18,950 $271,338 $940,886 $747,927 107,220 78,631 2,966 375,419 18,950 271,338 1,048,106 826,558 917,396 847,300 400,000 390,000 63,237 55,116 179,993 61,919 9,700,000 2,000,000 985,426 17,205,426 4,920,000 80,473 88,273 2,966 10,075,419 2,082,187 1,311,880 19,831,394 7,134,050 551,460 14,850,073 14,371,398 239,617 239,617 15,000 15,000 15,104,690 15,1 1 i ,4/ b 6,344,904 5,923,531 8,759,786 9,253,944 175,000 75000 792,266 894,479 500,000 500,000 19,712 4,773 1,486,978 1,474,252 15,378 61,876 104,355 1,258,389 15,116,194 12,163,451 Ts, 7 61,876 104,355 1,258,389 16,603,1 /2 13,637,703- 15,378 61,876 104,355 1,258,389 25,362,958 22,891,647 $18,344 $10,137,295 $2,186,542 $2,570,269 $45,194,352 $30,025,697 43 CITY OF EULESS, TEXAS ENTERPRISE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN RETAINED EARNINGS YEAR ENDED SEPTEMBER 30, 1996 WITH COMPARATIVE TOTALS FOR YEAR ENDED SEPTEMBER 30, 1995 Water and Drainage Recreation Sewer Fund Utility Fund Classes Operating revenues: Water service $6,412,077 Sewer service 3,358,542 Drainage fees 550,152 Recreation fees 729,346 Service fees and miscellaneous 423,712 Total operating revenues 10,194,331 550,152 729,346 Operating expenses: General and administrative 358,432 Water production 3,499,893 Water distribution 407,178 Utility engineering 179,475 Sewage collection and treatment 1,502,901 Nondepartmental 1,565,960 Geographic information 129,338 Service center 534,134 Drainage 52,876 Recreation classes 709,975 Golf course Athletic complex Softball complex Depreciation 892,293 29,536 Amortization 7,761 5,971 Total operating expenses 9,077,365 88,383 709,975 Operating income (loss) 1,116,966 461,769 19,371 Nonoperating revenues (expenses) Investment income 385,035 12,852 Interest on bonds (170,205) (126,791) Total nonoperating revenues (expenses), net 214,830 (113,939) Income (loss) before operating transfers 1,331,796 347,830 19,371 Operating transfers in 25,000 Operating transfers out (560,432) (28,073) (16,016) Net income (loss) 796,364 319,757 3,355 Add depreciation on fixed assets acquired with contributed capital 421,373 Increase (decrease) in retained earnings 1,217,737 319,757 3,355 Retained earnings, beginning of year 13,007,795 617,885 12,023 Retained earnings (deficit), end of year $14,225,532 $937,642 $15,378 44 Golf Course Fund Softball Complex 1606 655,691 1,606 655,691 Athletic Complex 164,858 9,035 490,597 2,652 1,276 594 167,510 491,873 9,629 (165,904) 163,818 (9,629) 365,538 27,094 73,750 (462,758) (63,237) (55,116) (97,220) (36,143) 18,634 (263,124) 127,675 9,005 325,000 1,374,384 (23,320) (125,000) 61,876 104,355 1,258,389 61,876 104,355 1,258,389 $61,876 $104,355 $1,258,389 Totals 1996 1995 $6,412,077 3,358,542 550,152 729,346 1,081,009 12,131,126 358,432 3,499,893 407,178 179,475 1,502,901 1,565,960 129,338 534,134 52,876 709,975 164,858 9,035 490,597 921,829 18,254 10,544,735 1,586,391 864,269 (878,107) (13,838) 1,572,553 1,724,384 (752,841) 2,544,096 421,373 2,965,469 13,637,703 $16,603,172 $5,466,477 3,072,367 337,163 614,128 414,179 9,904,314 424,448 3,436,407 403,616 152,557 1,163,696 1,410,328 83,894 513,183 101,286 628,319 922,350 13,732 9,253,816 650,498 409,010 (311,523) 97,487 747,985 (494,046) 253,939 417,871 671,810 12,965,893 $13,637,703 CITY OF EULESS, TEXAS ENTERPRISE FUNDS COMBINING STATEMENT OF CASH FLOWS YEAR ENDED SEPTEMBER 30, 1996 WITH COMPARATIVE TOTALS FOR YEAR ENDED SEPTEMBER 30, 1995 Water and Drainage Recreation Sewer Fund Utility Fund Classes OPERATING ACTIVITIES Operating income (loss) $1,116,966 $461,769 $19,371 Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation 900,054 35,507 (Increase) decrease due to changes in: Accounts receivable and unbilled revenue 12,391 (20,644) Due from other funds 131,302 Prepaids and deposits (6,286) Inventory Due from other governments Increase (decrease) due to net changes in: Accounts payable (476,063) 3,313 2 Accrued salaries and wages 28,589 Customer and escrow deposits 70,096 Deferred revenue (7,800) Total adjustments 652,283 18,176 2 Net cash provided by (used in) operating activities 1,769,249 479,945 19,373 NONCAPITAL FINANCING ACTIVITIES Interest paid on bonds (633,212) (126,791) Reduction in bonds payable (365,000) (25,000) Proceeds from issuance of bonds Operating transfer in 25,000 Operating transfer out (560,432) (28,073) (16,016) Net cash provided by (used in) noncapital financing activities (1,533,644) (179,864) (16,016) CAPITAL AND RELATED FINANCING ACTIVITIES Contributions in aid to construction Contribution in aid refunded Purchase of utility plant and equipment in service Net cash used in capital and related financing activities INVESTING ACTIVITIES Purchase of investment securities Proceeds from sale or maturity of investment securities Interest received on investments Net cash provided by (used in) investing activities Net increase in cash and cash equivalents Cash and cash equivalents, beginning of year 667,185 (810,475) (20,523) (143,290) (20,523) (818,691) 736,800 12,573 (81,891) 12,573 10,424 292,131 3,357 5,693,668 174,736 14,987 Cash and cash equivalents, end of year $5,704,092 $466,867 $18,344 46 Golf Course Fund Softball Complex ($165,904) $163,818 2,652 1,276 (37,672) Athletic Complex 1996 ($9,629) $1,586,391 Totals 1995 594 940,083 (8,253) 131,302 (6,286) (37,672) $650,498 936,082 115,710 997 11,250 375,420 18,950 271,338 192,960 217,469 28,589 (11,027) 70,096 77,695 (7,800) (7,800) S78072_ (17,446): 271,932 1,303,019 1,340,376- 21 ,168 ----T4Z72 262,303 2,889,410 1,990,874- 9,603,000 1,957,121 971,167 325,000 1,374,384 _ (23,320) (125,000) 3?S28;b5-i5 1,933,801 2,220,551 (740,000) 5,727,622)_ (1,383,680) (6,467,622) (1,383,680) 59,720 5 2r 3,732,266 (760,003) (390,000) 12,531,288 1,724,384 (752,841) 12,352,828- 667,185 (740,000) (1,277,794) (9,220,094) (1,277,794) 9,292,909) (818,691) 27,094 63,130 899,317 27,094 63,130 80,626 723,587 1,268,190 6,029,955 5,883,391 $3,732,266 723,587 1,268,190 $11,913,346 (315,291) (360,000) (494,046) -(1,169, 33 7)" 815,147 (1,358,757) (894,873) 1,280,677 371,313 %51,11 , 1,035,044 4,848,347 $5,883,391 CITY OF EULESS, TEXAS WATER AND SEWER FUND COMPARATIVE BALANCE SHEETS SEPTEMBER 30, 1996 WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1995 (1 of 2) 1996 1995 ASSETS Current assets: Deposits and investments $4,650,768 $4,716,223 Accounts receivable and unbilled revenue less allowance for estimated uncollectible accounts of $1,463 in 1995 and 1994 1,267,667 1,280,058 Accrued interest receivable 32,967 110,234 Prepaids and deposits 6,928 642 Due from other funds 87,299 218,601 Total current assets 6,045,629 6,325,758 Restricted assets: Revenue bond debt service: Cash with paying agent Revenue bond retirement: Investments with paying agent, at cost Revenue bond emergency: Short-term investments Property sale proceeds account: Investments with paying agent, at cost Capital projects account: Cash and cash equivalents Short-term investments Customer deposits: Cash and cash equivalents Interest receivable on investments Total restricted assets Bonds issuance cost Less accumulated amortization Net bond issuance cost 6,676 8,638 642,057 609,227 500,000 500,000 159,784 346,641 129,252 121,507 1,182,006 209,288 917,396 847,300 19,201 19,201 3,556,372 2,661,802 85,373 85,373 38,805 31,044 46,568 54,329 Utility plant and equipment in service, at cost: Land 1,528,966 1,528,966 Equipment 1,258,177 1,160,629 Waterworks and sanitary sewer system 28,168,535 26,375,668 Construction in progress 1,079,941 30,955,678 30,145,204 Less accumulated depreciation 13,289,517 12,397,224 Net utility plant and equipment in service 17,666,161 17,747,980 TOTAL ASSETS $27,314,730 $26,789,869 48 CITY OF EULESS, TEXAS WATER AND SEWER FUND COMPARATIVE BALANCE SHEETS SEPTEMBER 30, 1996 WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1995 (2 of 2) 1996 1995 LIABILITIES AND FUND EQUITY Current liabilities: Payable from current assets: Accounts payable $268,871 $744,934 Accrued salaries and wages 107,220 78,631 Total current liabilities 376,091 823,565 Current obligations payable from restricted assets: Customer and escrow deposits 917,396 847,300 Current portion of bonds payable 370,000 365,000 Accrued interest 35,452 35,452 Bonds payable 2,550,000 2,920,000 Deferred revenue 80,473 88,273 Total liabilities 4,329,412 5,079,590 Fund equity: Contributed capital: From subdividers From Environmental Protection Agency From Trinity River Authority Accumulated depreciation on assets acquired with contributed capital Net contributed capital 14,850,073 14,371,398 239,617 239,617 15,000 15,000 15,104,690 14,626,015 6,344,904 5,923,531 8,759,786 8,702,484 Retained earnings: Reserved for: Computer 175,000 75,000 Revenue bond retirement 792,266 894,479 Recycling 19,712 4,773 Emergency 500,000 500,000 Total reserved 1,486,978 1,474,252 Unreserved 12,738,554 11,533,543 Total retained earnings 14,225,532 13,007,795 Total fund equity 22,985,318 21,710,279 TOTAL LIABILITIES AND FUND EQUITY $27,314,730 $26,789,869 49 CITY OF EULESS, TEXAS WATER AND SEWER FUND COMPARATIVE STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS YEAR ENDED SEPTEMBER 30, 1996 WITH COMPARATIVE TOTALS FOR YEAR ENDED SEPTEMBER 30, 1995 1996 1995 Operating revenues: Water service $6,412,077 $5,466,477 Sewer service 3,358,542 3,072,367 Service fees and miscellaneous 423,712 414,179 Total operating revenues 10,194,331 8,953,023 Operating expenses: General and administrative 358,432 424,448 Water production 3,499,893 3,436,407 Water distribution 407,178 403,616 Utility engineering 179,475 152,557 Sewage collection and treatment 1,502,901 1,163,696 Nondepartmental 1,565,960 1,410,328 Geographic information 129,338 83,894 Service center 534,134 513,183 Depreciation 892,293 892,814 Amortization 7,761 7,761 Total operating expenses 9,077,365 8,488,704 Operating income 1,116,966 464,319 Nonoperating revenues (expenses) Investment income 385,035 395,215 Interest on bonds (170,205) (183,430) Total nonoperating revenues (expenses), net 214,830 211,785 Income before operating transfers 1,331,796 676,104 Operating transfers in 25,000 Operating transfers out (560,432) (461,637) Net income 796,364 214,467 Add depreciation on fixed assets acquired with contributed capital 421,373 417,871 Increase in retained earnings 1,217,737 632,338 Retained earnings, beginning of year 13,007,795 12,375,457 Retained earnings, end of year $14,225,532 $13,007,795 50 CITY OF EULESS, TEXAS WATER AND SEWER FUND COMPARATIVE SCHEDULE OF OPERATING EXPENSES YEAR ENDED SEPTEMBER 30, 1996 WITH COMPARATIVE TOTALS FOR YEAR ENDED SEPTEMBER 30, 1995 (1 of 2) 1996 1995 General and administrative: Salaries and benefits $259,001 $251,748 Postage and supplies 48,508 48,337 Maintenance of office machinery 4,261 6,455 Bad debts 18,477 25,326 Other 28,185 92,582 358,432 424,448 Water production: Salaries and benefits 290,221 272,199 Operating supplies and expense 49,117 52,035 Maintenance of structures and equipment 8,007 14,200 Contracts - Trinity River Authority (170,048) (174,848) Water - Trinity River Authority 3,322,596 3,272,821 3,499,893 3,436,407 Water distribution: Salaries and benefits 313,250 297,880 Operating supplies and expenses 22,908 22,833 Maintenance of structures and equipment 38,106 51,655 Sewer - Trinity River Authority 32,914 31,248 407,178 403,616 Utility engineering: Salaries and benefits 148,071 125,697 Operating supplies and expenses 31,404 26,610 Contractual services 250 179,475 152,557 Sewage collection and treatment: Salaries and benefits 246,712 210,891 Operating supplies and expenses 38,619 53,443 Maintenance of structures and equipment 1,062 591 Treatment fees - Trinity River Authority 1,216,508 898,771 1,502,901 1,163,696 Nondepartmental: Salaries and benefits 417,803 364,301 Operating supplies and expenses 466,840 586,264 Contractual services 155,885 Franchise fees 525,432 459,763 1,565,960 1,410,328 51 CITY OF EULESS, TEXAS WATER AND SEWER FUND COMPARATIVE SCHEDULE OF OPERATING EXPENSES YEAR ENDED SEPTEMBER 30, 1996 WITH COMPARATIVE TOTALS FOR YEAR ENDED SEPTEMBER 30, 1995 (2 of 2) 1996 1995 Information system: Salaries and benefits 78,795 48604 Operating supplies and expenses 13,158 3819 Maintenance of machinery and equipment 35,602 28588 Contractual services 1,783 2883 129,338 83,894 Service center: Salaries and benefits 192,466 191,367 Motor fuel and supplies 266,288 213,519 Maintenance of structures and equipment 47,723 56,160 Other 27,657 52,137 534,134 513,183 Depreciation and amortization 900,054 900,575 Total operating expenses $ 9,077,365 $ 8,488,704 CITY OF EULESS, TEXAS WATER AND SEWER FUND COMPARATIVE STATEMENTS OF CASH FLOWS YEAR ENDED SEPTEMBER 30, 1996 WITH COMPARATIVE TOTALS FOR YEAR ENDED SEPTEMBER OPERATING ACTIVITIES Operating income Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation and amortization expenses (Increase) decrease due to net changes in: Accounts receivable and unbilled revenue Due from other funds Prepaids and deposits Due from other governments Increase (decrease) due to net changes in: Accounts payable Accrued salaries and wages Customer and escrow deposits Deferred revenue Total adjustments Net cash provided by operating activities NONCAPITAL FINANCING ACTIVITIES Interest paid on bonds Reduction in bonds payable Operating transfers in Operating transfers out Net cash used in noncapital financing activities CAPITAL AND RELATED FINANCING ACTIVITIES Contributions in aid to construction Purchase of utility plant and equipment in service Net cash used in capital and related financing activities INVESTING ACTIVITIES Purchase of investment securities Proceeds from sale or maturity of investment securities Interest received on investments Net cash provided by (used in) investing activities Net increase in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year 30, 1995 1996 $1,116,966 900,054 12,391 131,302 (6,286) (476,063) 28,589 70,096 (7,800) 652,283 1,769,249 (633,212) (365,000) 25,000 (560,432) (1,533,644) 667,185 (810,475) (143,290) (818,691) 736,800 (81,891) 10,424 5,693,668 $5,704,092 1995 $464,319 900,575 106,289 997 11,250 435,918 (11,027) 77,695 (7,800) 1,513,89i 1,978,216 (186,920) (335,000) (461,637) (983,557) 263,687 (712,832) (449,145) (894,873) 985,000 354,288 444,415 989,929 4,703,739 $5,693,668 CITY OF EULESS, TEXAS WATER AND SEWER FUND AGGREGATING SCHEDULE OF BALANCE SHEET ACCOUNTS SEPTEMBER 30, 1996 Capital Operating Projects Account Account ASSETS Current assets: Deposits and investments $3,407,062 Accounts receivable and unbilled revenue less allowance for estimated uncollectible accounts of $1,463 1,267,667 Accrued interest receivable 26,719 Prepaids and deposits 6,928 Due from other funds 87,299 Total current assets 4,/95,675 Restricted assets: Revenue bond debt service: Cash with paying agent Revenue bond retirement: Investments with paying agent, at cost Revenue bond emergency: Short-term investments 500,000 Property sale proceeds account: Investments with paying agent, at cost Capital projects account: Cash and cash equivalents 129,252 Short-term investments 1,182,006 Customer deposits: Cash and cash equivalents 917,396 Interest receivable on investments Total restricted assets 1,417,396 1,311,258 Bonds issuance cost 85,373 Less accumulated amortization 38,805 Net bond issuance cost 46,568 Utility plant and equipment in service, at cost: Land 1,528,966 Building and equipment 1,198,230 4,280 Waterworks and sanitary sewer system 28,168,535 30,895,731 4,280 Less accumulated depreciation i a,Loy,a I / Net utility plant and equipment in service 17,606,214 4,280 TOTAL ASSETS $23,865,853 $1,315,538 54 (1 of 2) Bond Service Impact Debt Total Reserve Center Fees Service September 30, Account Account Account Account Eliminations 1996 $43,289 $1,200,417 $4,650,768 1,267,667 6,248 32,967 6,928 87,299 43,289 1,206,665 6,045,629 6,676 6,676 642,057 642,057 500,000 159,784 159,784 129,252 1,182,006 917,396 19,201 19,201 827,718 3,556,372 85,373 38,805 46,568 1,528,966 55,667 1,258,177 28,168,535 55,667 30,955,678 13,289,517 55,667 17,666,161 $827,718 $98,956 $1,206,665 $27,314,730 55 CITY OF EULESS, TEXAS WATER AND SEWER FUND AGGREGATING SCHEDULE OF BALANCE SHEET ACCOUNTS SEPTEMBER 30, 1996 Capital Operating Projects Account Account LIABILITIES AND FUND EQUITY Current liabilities: PayaVa iron current assets: Accounts payable $219,250 Accrued salaries and wages 107,220 Total current liabilities 326,470 Current obligations payable from restricted assets: Customer and escrow deposits 917,396 Current portion of bonds payable 370,000 Accrued interest Bonds payable 2,550,000 Deferred revenue 80,473 Total liabilities 4,244,339 Fund equity: Contributed capital: From subdividers 13,789,751 From Environmental Protection Agency 239,617 From Trinity River Authority 15,000 14,044,368 Accumulated depreciation on assets acquired with contributed capital 6,344,904 Net contributed capital 7,699,464 $18,866 18,866 18,866 Retained earnings: Reserved for: Computer 175,000 Revenue bond retirement Recycling 19,712 Emergency 500,000 Total reserved 694,712 Unreserved 11,«i,soo 1,296,672 Total retained earnings 11,922,050 1,296,672 Total fund equity 19,621,514 1,296,672 TOTAL LIABILITIES AND FUND EQUITY $23,865,853 $1,315,538 56 (2 of 2) Bond Service Impact Debt Total Reserve Center Fees Service September 30, Account Account Account Account Eliminations 1996 $30,755 30,755 $268,871 107,220 376,091 917,396 370,000 35,452 35,452 2,550,000 80,473 35,452 30,755 4,329,412 1,060,322 14,850,073 239,617 15,000 1,060,322 15,104,690 6,344,904 1,060,322 8,759,786 175,000 792,266 792,266 19,712 500,000 792,266 1,486,978 68,201 1,206,665 1,060,322 1 z, / 30,004 792,266 68,201 1,206,665 (1,060,322) 14,225,532 792,266 68,201 1,206,665 22,985,318 $827,718 $98,956 $1,206,665 $27,314,730 57 CITY OF EULESS, TEXAS WATER AND SEWER FUND AGGREGATING SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS ACCOUNTS YEAR ENDED SEPTEMBER 30,1996 Capital Operating Projects Account Account Operating revenues: Water service $6,412,077 Sewer service 3,358,542 Service fees and miscellaneous 410,775 Total operating revenues 10,181,394 Operating expenses: General and administrative 273,405 83,819 Water production 3,499,893 Water distribution 407,178 Utility engineering 179,475 Sewage collection and treatment 1,502,901 Nondepartmental 1,565,960 Geographic information 129,338 Service center Depreciation 892,293 Amortization 7,761 Total operating expenses 8,458,204 83,819 Operating income (loss) 1,723,190 (83,819) Nonoperating revenues (expenses) Investment income 277,606 23,462 Interest on bonds Total nonoperating revenues (expenses), net 277,606 23,462 Income (loss) before operating transfers 2,000,796 (60,357) Operating transfers from other funds or other water and sewer accounts 135,000 Operating transfers to other funds or other water and sewer accounts (1,242,755) (37,891) Net income (loss) 893,041 (98,248) Add depreciation on fixed asset acquired with contributed capital 421,373 Increase (decrease) in retained earnings 1,314,414 (98,248) Retained earnings (deficit), beginning of year 10,607,636 1,394,920 Retained earnings, end of year $11,922,050 $1,296,672 Bond Service Impact Debt Year Ended Reserve Center Fees Service September 30, Account Account Account Account Eliminations 1996 $6,412,077 3,358,542 12,937 478,675 (478,675) 423,712 12,937 478,675 (478,675) 10,194,331 1,208 358,432 3,499,893 407,178 179,475 1,502,901 1,565,960 129,338 534,134 534,134 892,293 7,761 534,134 1,208 9,0 % %,:365 (521,197) 478,675 (1,208) (478,675) 1,116,966 48,986 34,981 385,035 (69,975) (100,230) (170,205) (20,989) 34,981 (100,230) 214,830 (20,989) (521,197) 513,656 (101,438) (478,675) 1,331,796 590,000 155,214 (855,214) 25,000 (135,000) 855,214 (560,432) (155,989) 68,803 513,656 53,776 (478,675) 796,364 421,373 (155,989) 68,803 513,656 53,776 (478,675) 1,217,737 948,255 (602) 693,009 (53,776) (581,647) 13,007,795 $792,266 $68,201 $1,206,665 ($1,060,322), $14,225,532 59 CITY OF EULESS, TEXAS DRAINAGE UTILITY FUNDS AGGREGATING SCHEDULE OF BALANCE SHEET ACCOUNTS SEPTEMBER 30, 1996 Total Operating Construction Elimi- September 30, Account in Progress nations 1996 ASSETS Current assets: Deposits and investments $247,992 $218,875 $466,867 Accounts and unbilled revenue less allowance for uncollectibles of $43,854 for drainage utility 39,478 39,478 Total current assets 287,470 218,875 506,345 Bond issuance cost 107,473 107,473 Less accumulated amortization 29,855 29,855 Net bond issuance cost 77,618 77,618 Utility plant and equipment in service, at cost: Equipment 2,445,588 2,445,588 2,445,588 2,445,588 Less accumulated depreciation 62,379 62,379 Net utility plant and equipment in service 2,383,209 2,383,209 TOTAL ASSETS $2,670,679 $296,493 $2,967,172 LIABILITIES AND FUND EQUITY Current liabilities: Hayable $3,342 $3,342 Total current liabilities 3,342 3,342 Current portion of bonds payable 30,000 30,000 Accrued interest 26,188 26,188 Bonds payable 1,970,000 1,970,000 Total liabilities 3,342 2,026,188 2,029,530 Retained earnings: Unreserved 2,667,337 (1,729,695) 937,642 Total fund equity 2,667,337 (1,729,695) 937,642 TOTAL LIABILITIES AND FUND EQUITY $2,670,679 $296,493 $2,967,172 60 CITY OF EULESS, TEXAS DRAINAGE UTILITY FUNDS AGGREGATING SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS ACCOUNTS YEAR ENDED SEPTEMBER 30, 1996 Year Ended Operating Construction Elimi- September 30, Account in Progress nations 1996 Operating revenues: Drainage fees $550,152 $550,152 Total operating revenues 550,152 550,152 Operating expenses: Drainage 52,876 52,876 Depreciation 29,536 29,536 Amortization 5,971 5,971 Total operating expenses 82,412 5,971 88,383 Operating income (loss) 467,740 (5,971) 461,769 Nonoperating revenues (expenses): Investment income Interest on bonds Total nonoperating revenues (expenses), net Income (loss) before operating transfers Operating transfers in Operating transfers out (Decrease) increase in retained earnings Retained earnings (deficit), beginning of year Retained earnings (deficit), end of year 11,299 1,553 12,852 (126,791) (126,791) 11,299 (125,238) (113,939) 479,039 (131,209) 347,830 1,157,239 (1,157,239) (28,073) (1,157,239) 1,157,239 (28,073) 1,608,205 (1,288,448) 319,757 1,059,132 (441,247) 617,885 $2,667,337 ($1,729,695) $937,642 61 •• .1t • • • INTERNAL SERVICE FUNDS Internal service funds are used to account for the financing of goods or services provided by one department to other departments of the government and to other government units, on a cost reimbursement basis. Equipment Replacement Fund - to account for the accumulation of funds planned to be used in replacing existing equipment. Funding is provided annually by the user departments. Insurance Fund - to account for the revenue and expenses resulting from providing health insurance to the City's employees. Risk Management Fund - to account for the revenue and expenses applicable to the self- insurance program for worker's compensation and for general liability and property claims. Cash and Debt Management Fund - to account for the revenues and expenses incurred in providing cash and debt management services to all funds. Funding is provided by a predetermined amount of earned investment income, not to exceed total fund expenses. CITY OF EULESS, TEXAS INTERNAL SERVICE FUND COMBINING BALANCE SHEET SEPTEMBER 30, 1996 WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1995 Risk Cash and Equipment Manage- Debt Replacement Insurance ment Manage- Total Fund Fund Fund ment Fund 1996 1995 ASSETS Deposits and investments $362,033 $132,946 $770,595 $9,700 $1,275,274 $1,350,275 Receivables 3,553 3,553 Total current assets 362,033 132,946 774,148 9,700 1,278,827 1,350,275 Equipment, at cost, net of accumulated depreciation of $764,310 in 1996 908,394 908,394 756,116 TOTAL ASSETS $1,270,427 $132,946 $774,148 $9,700 $2,187,221 $2,106,391 LIABILITIES AND RETAINED EARNINGS Accounts payable $8,782 $11,271 $9,700 $29,753 $59,025 Accrued insurance claims 70,000 70,000 70,000 Due to other funds 62,605 Total current liabilities 78,782 11,271 9,700 99,753 191,630 Retained earnings: Reserved: Insurance 41,000 41,000 41,000 Workers' compensation 200,000 200,000 200,000 Risk management 200,000 200,000 200,000 Total reserved 41,000 400,000 441,000 441,000 Unreserved 1,270,427 13,164 362,8 / / 1,646,468 1,473,761 Total retained earnings 1,270,427 54,164 762,877 2,087,468 1,914,761 TOTAL LIABILITIES AND RETAINED EARNINGS $1,270,427 $132,946 $774,148 $9,700 $2,187,221 $2,106,391 62 CITY OF EULESS, TEXAS INTERNAL SERVICE FUND COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS YEAR ENDED SEPTEMBER 30, 1996 WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 1995 Risk Cash and Equipment Manage- Debt Replacement Insurance ment Manage- Total Fund Fund Fund ment Fund 1996 1995 Operating revenues: Insurance premiums $1,234,242 $588,114 $1,822,356 $1,731,000 Service fees and miscellaneous 273,454 273,454 263,428 Total operating revenues 273,454 1,234,242 588,114 2,095,810 1,994,428 Operating expenses: General and administrative 75,029 238,837 57,429 371,295 338,413 Insurance costs 1,216,620 234,669 1,451,289 1,448,465 Depreciation 255,947 255,947 230,871 Total operating expenses 255,947 1,291,649 473,506 57,429 2,078,531 2,017,749 Operating income (loss) 17,507 (57,407) 114,608 (57,429) 17,279 (23,321) Non -operating revenues: Investment income 14,357 28,103 57,429 99,889 94,508 Gain on sale of fixed assets 18,317 18,317 65,133 Total nonoperating revenues, net 32,674 28,103 57,429 118,206 159,641 Income (loss) before operating transfers 50,181 (57,407) 142,711 135,485 136,320 Operating transfers in 80,000 80,000 54,534 Operating transfers out (26,390) (16,388) (42,778) (96,656) Net income (loss) 50,181 (3,797) 126,323 172,707 94,198 Retained Earnings, beginning of Year 1,220,246 57,961 636,554 1,914,761 1,820,563 Retained Earnings, end of Year $1,270,427 $54,164 $762,877 $2,087,468 $1,914,761 63 CITY OF EULESS, TEXAS INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS YEAR ENDED SEPTEMBER 30, 1996 WITH COMPARATIVE TOTALS FOR YEAR ENDED SEPTEMBER 30, 1995 Risk Cash and Equipment Manage- Debt Replacement Insurance ment Management Total Fund Fund Fund Fund 1996 1995 OPERATING ACTIVITIES Operating income (loss) $17,507 ($57,407) $114,608 ($57,429) $17,279 ($23,321) Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation expense 255,947 255,947 230,871 Increase in receivables (3,553) (3,553) Increase (decrease) in accounts payable (7,169) (25,865) (5,938) 9,700 (29,272) 19,210 Increase in due from other funds 62,605) 62,605) Total adjustments 248,778 (25,865) (72,096) 9,700 160,517 250,081 Net cash provided by (used in) operating activities 266,285 (83,272) 42,512 (47,729) 177,796 226,760 NONCAPITAL FINANCING ACTIVITIES Operating transfers in 80,000 80,000 54,534 Operating transfers out (26,390) (16,388) (42,778) (96,656) Net cash provided by (used in) noncapital financing activities 53,610 (16,388) 37,222 (42,122) CAPITAL AND RELATED FINANCING ACTIVITIES Purchase of equipment (423,808) (423,808) (125,383) Sale of equipment 33,900 33,900 34,941 Net cash used in capital and related financing activities (389,908) (389,908) (90,442) INVESTING ACTIVITIES Decrease in short term investments 3,810 Interest received on investments 14,357 28,103 57,429 99,889 94,508 Net increase (decrease) in cash and cash equivalents (109,266) (29,662) 54,227 9,700 (75,001) 192,514 Cash and cash equivalents, beginning of year 471,299 162,608 716,368 1,350,275 1,157,761 Cash and cash equivalents, end of year $362,033 $132,946 $770,595 $9,700 $1,275,274 $1,350,275 64 AGENCY FUNDS Agency funds are used to account for assets held by the government as an agent for individuals, private organizations, other governments and/or other funds. Deferred Compensation - To account for assets held for employees in accordance with the provisions of Internal Revenue Code Section 457. DEA Task Force - To account for assets and liabilities received from the DEA task force. CITY OF EULESS, TEXAS AGENCY FUNDS COMBINING BALANCE SHEET SEPTEMBER 30, 1996 WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1995 Deferred DEA Compensation Task Agency Force Total Fund Fund 1996 1995 Assets: Deposits and investments $ 62,441 $ 62,441 $ 58,145 Investments at market 2,875,009 2,875,009 2,654,685 Total assets $ 2,875,009 $ 62,441 $ 2,937,450 $ 2,712,830 Liabilities: Deferred compensation benefits payable $2,875,009 $2,875,009 $2,654,685 Due to other governments 62,441 62,441 58,145 Total liabilities $2,875,009 $62,441 $2,937,450 $2,712,830 65 CITY OF EULESS, TEXAS AGENCY FUNDS STATEMENTS OF CHANGES IN ASSETS AND LIABILITIES YEAR ENDED SEPTEMBER 30, 1996 DEFERRED COMPENSATION: Assets: Investments at market Balance Balance September 30, September 30, 1995 Additions Deletions 1996 $2,654,685 $423,141 $202,817 $2,875,009 Liabilities: Deferred compensation benefits payable $2,654,685 $423,141 $202,817 $2,875,009 DEA TASK FORCE FUND: Assets: Deposits and investments $58,145 $4,296 $58,145 $4,296 $62,441 $62,441 Liabilities: Due to other governments $58,145 $55,367 $51,071 $62,441 66 E * GENERAL FIXED ASSETS ACCOUNT GROUP To account for fixed assets not used in proprietary fund operations. CITY OF EULESS, TEXAS SCHEDULE OF GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY SEPTEMBER 30, 1996 Function and Activity General government Public safety Culture and recreation Highways and streets Construction -in -progress Total General Fixed Assets Land Building $2,489,926 $2,422,165 234,325 1,315,968 565,168 5,057,814 Improvements Other than Buildings $538,928 36,758 1,642,611 1,153, 330 Machinery and Equipment Total $1,321,051 $6,772,070 2,536,725 4,123,776 652,417 7,918,010 325,957 325,957 98,467 1,251,797 $3,289,419 $8,795,947 $3,371,627 $4,934,617 $20,391,610 67 CITY OF EULESS, TEXAS SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY YEAR ENDED SEPTEMBER 30, 1996 General Fixed General Fixed Assets Assets Function September 30, September 30, and Activity 1995 Additions Deletions 1996 General government $6,386,057 $386,013 $6,772,070 Public safety 3,979,498 144,278 4,123,776 Culture and recreation 4,076,579 3,841,431 7,918,010 Highways and streets 325,957 325,957 Construction -in -progress 1,251,797 1,251,797 $16,019,888 $4,371,722 $20,391,610 68 CITY OF EULESS, TEXAS COMPARATIVE SCHEDULE OF GENERAL FIXED ASSETS - BY SOURCE SEPTEMBER 30, 1996 AND 1995 1996 1995 General fixed assets: Land $3,289,419 $3,091,217 Building 8,795,947 5,967,286 Improvements other than buildings 3,371,627 2,546,081 Machinery and equipment 4,934,617 4,415,304 Total general fixed assets $20,391,610 $16,019,888 Investment in general fixed assets by source: General fund $5,858,983 $5,508,542 Special revenue funds 5,023,508 4,587,117 Capital projects funds 9,509,119 5,924,229 Total investment in general fixed assets $20,391,610 $16,019,888 69 STATISTICAL SECTION (unaudited) CITY OF EULESS, TEXAS GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION LAST TEN FISCAL YEARS (Unaudited) Table 1 General Fiscal Govern- Public Culture- Debt Year ment Safety Streets Recreation Service Other Total 1987 1,316,296 4,649,517 402,974 1,034,905 1,341,171 593,150 9,338,013 1988 1,436,132 5,503,148 396,572 1,217,531 1,313,298 567,795 10,434,476 1989 1,385,187 5,643,811 480,722 1,332,050 1,357,689 648,861 10,848,320 1990 1,535,020 5,633,042 541,013 1,371,962 1,486,417 1,011,379 11,578,833 1991 1,560,800 5,723,750 507,226 1,231,257 1,772,314 1,208,755 12,004,102 1992 2,020,872 5,616,915 454,150 1,348,652 1,617,947 946,839 12,005,375 1993 2,054,992 5,968,815 487,759 1,397,600 1,683,671 965,820 12,558,657 1994 2,160,916 6,595,803 526,136 1,514,311 1,640,120 1,041,424 13,478,710 1995 2,193,512 6,708,056 575,608 1,430,955 1,650,196 1,085,690 13,644,017 1996 2,409,115 7,445,910 619,098 1,527,718 1,658,291 1,833,982 15,494,114 Note: Includes General Fund and Debt Service Fund. 70 CITY OF EULESS, TEXAS GENERAL GOVERNMENTAL REVENUES BY SOURCE LAST TEN FISCAL YEARS (Unaudited) Table 2 Interest Licenses Inter- Charges Income Fiscal and govern- far Fines and Other Year Taxes Permits mental Service and Fees Revenues Total 1987 7,450,693 201,468 535,814 52,890 413,120 729,595 9,383,580 1988 8,044,902 164,031 380,612 54,682 501,151 610,444 9,755,822 1989 8,394,653 222,424 265 43,053 904,238 1,035,689 10,600,322 1990 8,529,240 290,944 19,078 55,163 1,158,986 929,589 10,983,000 1991 9,262,024 237,400 91,064 54,399 971,875 740,796 11,357,558 1992 9,550,034 210,525 46,405 64,601 1,291,629 448,765 11,611,959 1993 10,274,743 312,660 54,797 59,042 1,353,196 413,151 12,467,589 1994 10,847,785 364,617 227,464 81,311 1,592,194 420,641 13,534,012 1995 11,362,414 420,624 50,912 88,036 1,941,505 916,167 14,779,658 1996 12,049,604 459,553 84,447 102,669 2,233,554 1,087,365 16,017,192 Note: Includes General Fund and Debt Service Fund. 71 CITY OF EULESS, TEXAS PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (Unaudited) Table 3 Percent of Ratio of Percent of Current Delinquent Total Tax Outstanding Delinquent Fiscal Total Current Tax Taxes Tax Total Tax Collections Delinquent Taxes to Year Tax Levy Collections Collected Collections Collections to Tax Levy Taxes Tax Levy 1987 4,485,209 4,704,417 104.89% 167,892 4,872,309 108.63% 428,865 9.56% 1988 5,001,323 4,921,426 98.40% 174,978 5,096,404 101.90% 355,562 7.11% 1989 4,975,719 4,926,213 99.01% 165,469 5,091,682 102.33% 331,891 6.67% 1990 5,162,838 5,150,783 99.77% 175,439 5,326,222 103.16% 329,745 6.39% 1991 5,717,223 5,586,764 97.72% 106,503 5,693,267 99.58% 349,226 6.11% 1992 5,889,411 5,765,733 97.90% 147,498 5,913,231 100.40% 577,695 9.81% 1993 5,943,537 5,880,688 98.94% 73,853 5,954,541 100.19% 239,370 4.03% 1994 6,259,282 5,874,486 93.85% 38,770 5,913,256 94.47% 355,032 5.67% 1995 6,113,427 6,037,510 98.76% 96,556 6,134,066 100.34% 334,393 5.47% 1996 6,517,809 6,404,089 98.26% 72,683 6,476,772 99.37% 354,752 5.44% Source: Tarrant County Tax Assessor/Collector 72 CITY OF EULESS, TEXAS ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS (Unaudited) Real Property Personal Property Estimated Fiscal Assessed Actual Assessed Actual Year Value Value Value Value 1987 1, 080, 231, 222 1, 080, 231, 222 101,144, 524 101,144, 524 1988 1, 024, 645, 236 1, 024, 645, 236 112, 007, 718 112, 007, 718 1989 968, 871, 391 968, 871, 391 112, 795, 668 112, 795, 668 1990 967, 682, 949 967, 682, 949 117, 494, 828 117, 494, 828 1991 1, 050, 436, 076 1, 050, 436, 076 108, 768, 428 108, 768, 428 1992 872, 811, 737 872, 811, 737 127, 990, 604 127, 990, 604 1993 835, 211,175 835, 211,175 137, 913, 007 137, 913, 007 1994 818, 330, 766 818, 330, 766 147, 978, 520 147, 978, 520 1995 908, 760, 987 908, 760, 987 166, 784, 893 166, 784, 893 1996 955, 692, 304 955, 692, 304 172, 885,117 172, 885,117 Source: Tarrant Appraisal District 73 Table 4 Ratio of Total Assessed Total to Estimated Assessed Actual Actual Value Value Value 1,181,375,746 1,181,375,746 100% 1,136,652,954 1,136,652,954 100% 1,081,667,059 1,081,667,059 100% 1,085,177,777 1,085,177,777 100% 1,159,204,504 1,159,204,504 100% 1,000,802,341 1,000,802,341 100% 973,124,182 973,124,182 100% 966,309,286 966,309,286 100% 1,075,545,880 1,075,545,880 100% 1,128,577,421 1,128,577,421 100% CITY OF EULESS, TEXAS PROPERTY TAX RATES ALL DIRECT AND OVERLAPPING GOVERNMENTS PER $100 OF ASSESSED VALUE LAST TEN FISCAL YEARS (Unaudited) Table 5 Fiscal Junior Year City (1) School (2) County (3) Hospital (1 College (3) Total 1987 0.4200000% 0.7800% 0.117720% 0.111250% 0.031530% 1.4605000% 1988 0.4400000% 0.9169% 0.117720% 0.111250% 0.031530% 1,6174000% 1989 0.4600000% 1.0200% 0.156509% 0.133000% 0.031480% 1.8009890% 1990 0.4875000% 1.0600% 0.182000% 0.153000% 0.033000% 1.9155000% 1991 0.5408500% 1.1300% 0.196000% 0.177500% 0.034700% 2.0790500% 1992 0.5685000% 1.3200% 0.236800% 0.205800% 0.038400% 2.3695000% 1993 0.5985637% 1.5050% 0.277100% 0.229100% 0.043292% 2.6530557% 1994 0.6186170% 1.5150% 0.271880% 0.242100% 0.046710% 2.6943070% 1995 0.6160000% 1.5350% 0,271870% 0.244640% 0.056510% 2.7240200% 1996 0.6060000% 1.5345% 0.266603% 0.239840% 0.055460% 2.7023630% Notes: 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 and interest are assessed on late payments. There are no discounts. C. The City's taxes are collected by Tarrant County and are distributed to the City as collected. Sources: (1) City records (2) Hurst -Euless -Bedford Independent School District (3) Tarrant County 75 CITY OF EULESS, TEXAS RATIO OF NET GENERAL BONDED DEBT TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS (Unaudited) Table 6 Net Bonded Net Estimated Net Debt to Bonded Fiscal Population Assessed General Assessed Debt Per Year (1) Value (2) Debt (3) Value Capita 1987 38,700 1,181,375,746 10,366,504 0.88% 268 1988 39,750 1,136,652,954 10,181,354 0.90% 256 1989 40,250 1,081,667,059 10,906,633 1.01% 271 1990 38,149 1,085,177,777 12,243, 552 1.13% 321 1991 38,369 1,159, 204, 504 11, 521, 321 0.99% 300 1992 38,760 1,000,802,341 11,281,740 1.13% 291 1993 38,778 973,124,182 11,321,467 1.16% 292 1994 39,650 966,309,286 10,277,666 1.06% 259 1995 39,750 1,075,545,880 9,117,594 0.85% 229 1996 40,850 1,128,577,421 12,124,427 1.07% 297 (1) Estimates by North Central Texas Council of Governments as of January 1, 1996. (2) Tarrant Appraisal District (3) Includes General Obligation Bonds and Certificates of Obligation. 76 CITY OF EULESS, TEXAS COMPUTATION OF DIRECT AND OVERLAPPING DEBT SEPTEMBER 30, 1996 (Unaudited) Table 7 Percentage Amount Applicable Applicable Net Debt to City to City Jurisdiction Outstanding of Euless of Euless City of Euless $12,124,427 100.00% $12,124,427 Grapevine-Colleyville Independent School District 134,602,430 2.12% 2,853,572 Hurst -Euless -Bedford Independent School District 93,441,513 26.79% 25,032,981 Tarrant County 136,955,000 2.72% 3,725,176 Tarrant County Hospital County 48,004,185 2.72% 1,305,714 Tarrant County Junior College District 92,119,962 2.72% 2,505,663 Total direct and overlapping debt $47,547,533 Ratio of direct and overlapping bonded debt to taxable assessed valuation 4.21% Per capita direct and overlapping bonded debt $1,164 77 CITY OF EULESS, TEXAS RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR NET GENERAL BONDED DEBT TO TOTAL GENERAL EXPENDITURES LAST TEN FISCAL YEARS (Unaudited) Table 8 Ratio of Debt Service Interest to and Total Total General Fiscal Fiscal Debt General Expendi- Year Principal Charges Service Expenditures tures 1987 60,428 1,280,743 1,341,171 9,338,013 14.36% 1988 549,732 763,566 1,313,298 10,434,476 12.59% 1989 589,342 768,347 1,357,689 10,848,320 12.52% 1990 639,281 847,136 1,486,417 11,578,833 12.84% 1991 804,572 967,742 1,772,314 12, 004,102 14.76% 1992 765,000 852,947 1,617,947 12, 005, 375 13.48% 1993 855,000 828,671 1,683,671 12,558,657 13.41% 1994 1,085,406 554,714 1,640,120 13,478,710 12.17% 1995 1,150,000 500,196 1,650,196 13,644,017 12.09% 1996 1,245,000 413,291 1,658,291 15,494,114 10.70% 78 CITY OF EULESS, TEXAS SCHEDULE OF REVENUE BOND COVERAGE WATER AND SEWER BONDS LAST TEN FISCAL YEARS (Unaudited) Table 9 Net Direct Revenue Interest Gross Operating Available and Fiscal Revenue Expenses for Debt Fiscal Coverage Year (1) (2) & (3) Services Principal Charges Total Ratio 1987 7,677,625 5,595,639 2,081,986 275,000 390,012 665,012 3.13 1988 7,273,249 6,133,001 1,140,248 305,000 372,300 677,300 1.68 1989 7,442,771 5,550,251 1,892,520 310,000 347,301 657,301 2.88 1990 8,022,688 6,759,516 1,263,172 320,000 327,288 647,288 1.95 1991 7,796,635 6,314,851 1,481,784 290,000 312,925 602,925 2.46 1992 8,342,993 7,127,092 1,215,901 335,000 199,341 534,341 2.28 1993 9,615,195 7,391,235 2,223,960 305,000 185,808 490,808 4.53 1994 9,278,791 7,359,988 1,918,803 325,000 199,875 524,875 3.66 1995 9,348,238 7,588,129 1,760,109 335,000 183,430 518,430 3.40 1996 10,579,366 8,177,311 2,402,055 365,000 170,205 535,205 4.49 Notes: 1. Operating revenues and investment interest of Water and Sewer Fund. 2. Total operating expenses of Water and Sewer Fund exclusive of depreciation and amortization. 3. Excludes amortization and depreciation and includes theoretical debt service payments made to Trinity River Authority treated as operating expense for bond coverage purposes through 1989; subsequent to fiscal year 1989, accounting for Trinity River Authority payments was changed and is consistent with the debt service treatment above. 79 CITY OF EULESS, TEXAS SCHEDULE OF REVENUE BOND COVERAGE DRAINAGE UTILITY BONDS LAST FOUR FISCAL YEARS (Unaudited) Table 10 Net Direct Revenue Interest Gross Operating Available and Fiscal Revenue Expenses for Debt Fiscal Coverage Year (1) (2) Services Principal Charges Total Ratio 1993 $371,241 $65,326 $305,915 $25,000 $142,552 $167,552 1.83 1994 367,912 98,796 269,116 25,000 129,360 154,360 1.74 1995 345,524 101,286 244,238 25,000 128,093 153,093 1.60 1996 563,004 52,876 510,128 25,000 126,791 151,791 3.36 Note: The Drainage Utility Fund had no outstanding debt or debt service prior to 1992. (1) Includes operating revenue and interest earned on investments. (2) Total operating expenses exclusive of depreciation and amortization. 80 CITY OF EULESS, TEXAS DEMOGRAPHIC STATISTICS LAST TEN FISCAL YEARS (Unaudited) Table 11 Per Capita School Unemployment Fiscal Population Income Enrollment Rate Year (1) (2) (3) (4) 1987 38,700 15,739 16,818 6.9% 1988 39,750 16,650 16,887 5.7% 1989 40,250 17,560 17,011 5.8% 1990 38,149 18,471 18,700 5.6% 1991 38,369 19,382 18,707 7.0% 1992 38,760 20,293 18,720 7.4% 1993 38,778 20,303 18,981 5.6% 1994 39,650 20,601 19,236 5.1% 1995 39,750 20,750 19,235 4.7% 1996 40,850 22,223 19,205 3.3% Notes: 1. Estimates by North Central Texas Council of Governments as adjusted for 1990 census data. 2. Estimates by City Economic Development 3. Hurst -Euless -Bedford Independent School District 4. Texas Employment Commission 81 CITY OF EULESS, TEXAS PRINCIPAL TAXPAYERS SEPTEMBER 30, 1996 (Unaudited) Table 12 Percentage 1995 of Total Type of Assessed Assessed Taxpayer Business Valuation Valuation Southwestern Bell Telephone Company Telephone Utility $ 21,597,160 1.91% Somerset Village Partners, LP Apartments 20,709,172 1.83% EFW Association Land 25,684,715 2.28% TU Electric Electric Utility 18,144,792 1.61% Southwest Properties Apartments 12,758,000 1.13% Bear Creek Apartments, Inc. Apartments 10,494,015 0.93% Home Depot USA, Inc. Retail 9,855,074 0.87% AMLI SW Retail 8,745,099 0.77% Ferguson Enterprises, Inc. Manufacturing 8,076,140 0.72% Sky Chef, Inc. Commercial 8,499,948 0.75% 144,564,115 12.81% 82 CITY OF EULESS, TEXAS TMRS DEFINED CONTRIBUTION PLAN ANALYSIS OF FUNDING PROGRESS LAST EIGHT FISCAL YEARS - NOTE 1 (Unaudited) Table 13 Unfunded Pension Book Value Obligation of Net Unfunded as a Assets Pension Annual Percentage Available Pension Percent- Benefit Covered of Fiscal for Benefit age Obligation Payroll Covered Year Benefits Obligation Funded (3) (2) Payroll (4) 1989 $8,594,400 $11,295,300 76.09% $2,700,900 $6,781,968 39.82% 1990 9,732,600 12,706,000 76.60% 2,973,400 6,756,115 44.01% 1991 11,109,700 14,290,100 77.74% 3,180,400 7,059,604 45.05% 1992 13,044,900 16,259,300 80.23% 3,214,400 7,567,856 42.47% 1993 15,660,032 19,351,466 80.92% 3,691,434 7,982,120 46.25% 1994 18,545,269 24,205,730 76.62% 5,660,461 9,066,344 62.43% 1995 20,958,598 27,160,804 77.16% 6,202,206 9,331,144 66.47% 1996 23,848,136 30,449,210 78.32% 6,601,074 9,884,244 66.78% Notes: 1. Pension benefit obligation information is unavailable prior to fiscal year ended 1989. 2. City records 3. Texas Municipal Retirement System 4. After an actuarial study for the 5 year period of 1988-1992, revised assumptions were adopted by the TMRS Board to increase the rate of funding due to significantly lower rates of withdrawal (turnover) by active members during the study period. 83 CITY OF EULESS, TEXAS PROPERTY VALUE AND CONSTRUCTION LAST TEN FISCAL YEARS (Unaudited) Table 14 Construction (1) Property Number Fiscal Value of Year (2) Permits Value 1987 1,181, 375, 746 314 14,128, 587 1988 1,136, 652, 954 405 27, 937, 240 1989 1, 081, 667, 059 392 23, 231, 436 1990 1,085,177,777 559 23,370,614 1991 1,159,204, 504 289 17, 505,423 1992 1, 000, 820, 341 276 16,126, 487 1993 1,102,146, 265 331 21, 224, 743 1994 1,117, 816, 828 360 21, 437, 599 1995 1, 223, 919, 265 373 34, 020, 060 1996 1,256,556,148 391 22,907,680 Notes: 1. City Records 2. Tarrant Appraisal District CITY OF EULESS, TEXAS COMPUTATION OF LEGAL DEBT MARGIN SEPTEMBER 30, 1996 (Unaudited) Article XI, Section 5 of the State of Texas Constitution states in part: Table 15 "... 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 1996 was established at $.606 per $100 of assessed valuation on 100% of appraised value. 85 CITY OF EULESS, TEXAS MISCELLANEOUS STATISTICS SEPTEMBER 30, 1996 (Unaudited) Table 16 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 Six Council Members Area 16.9 Square Miles Full time City employees budgeted 289 Fire protection: Number of stations Number of certified firefighters Police protection: Number of stations Number of certified officers 3 46 1 68 Parks and recreation: Number of swimming pools 3 Number of parks 14 Area of parks 605 acres Community buildings 3 Ampitheater 1 Library holdings: Books 61,632 Education: Elementary Schools 7 Junior High Schools 2 High School 1 86 CITY OF EULESS, TEXAS MISCELLANEOUS STATISTICS SEPTEMBER 30, 1996 (Unaudited) Table 16 City Water and Sewer service: Water Service: Number of Customers 19,053 Maximum daily capacity available from Trinity River Authority 29,000,000 Maximum daily capacity from City water wells 5,760,000 Total daily capacity 34,760,000 Maximum daily consumption 9,843,424 Average daily consumption 5,328,787 Water mains 153 miles Fire hydrants 1,135 Sewer Service: Average daily flow of wastewater 2,935,435 Number of customers 18,617 Sewer mains 130 miles Streets: Improved 155 miles State highways 17.2 miles 87