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Home My WebLink About1981 09 30 Audited Financial Report - City of Friendswood I I 1 I I 1 AUDITED FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION tCITY OF FRIENDSWOOD, TEXAS FRIENDSWOOD, TEXAS September 30, 1981 I I I 1 1 1 1 I I 1 I I CONTENTS Page Audited Financial Statements Accountants' Report 3 ' Combined Balance Sheet - All Fund Types and Account Groups 4 Combined Statement of Revenues, Expenditures and Fund Balances - All Governmental Fund Types and Expendable Trust Funds 8 ' Combined Statement of Revenues, Expenditures, and Changes in Fund Balances - Budgeted and Actual - General, Special Revenue and Debt Service Fund Types 10 Combined Statement of Revenues, Expenses and Changes in Retained Earnings/Fund Balance - Proprietary Fund Type and Similiar Trust Fund 13 Combined Statement of Changes in Financial Position - 1 Proprietary Fund Type and Similar Trust Fund 15 Notes to Financial Statements 17 1 I I 1 1 -2- 1 1 11 1 CONTENTS - 2 Page Other Financial Information 29 Principal Officials 30 ' General Fund - Statement of Revenues - Budgeted and Actual 31 General Fund - Statement of Expenditures - Budgeted and Actual By Function 32 1 General Fund - Statement of Expenditures - Budgeted and Actual - By Object 34 Enterprise Fund (Water and Sewer Fund) - Statement of Revenue and Expenditures - Budgeted and Actual 39 1 1 1 1 1 1 1 1 -3- F1IRL LMRSON 8 COMP1IVY CERTIFIED PUBLIC ACCOUNTANTS MEMBERS 1425 FIRST WESTERN BLDG. AMERICAN INSTITUTE OF 1300 MAIN STREET CERTIFIED PUBLIC ACCOUNTANTS HOUSTO N,TEXAS 77002 TEXAS SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS 713-658-1745 Honorable Mayor and ' Members of City Council City of Friendswood, Texas I We have examined the combined financial statements of the City of Friends- wood, Texas for the year ended September 30, 1981 as listed in the table of contents. Our examination was made in accordance with generally accepted ' auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the combined financial statements referred to above present fairly the financial position of the City of Friendswood, Texas, at September 30, 1981 , and the results of its operations and the changes in financial position of its proprietary fund type for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. ' Our examination was made for the purpose of forming an opinion on the combined financial statements taken as a whole. The accompanying other ' financial information listed in the table of contents is presented for purposes of additional analysis and is not a required part of the combined financial statements of the City of Friendswood, Texas. The information has been subjected to the auditing procedures applied in the examination ' of the combined financial statements and, in our opinion, is fairly stated in all material respects in relation to the combined financial statements taken as a whole. /5e;gell 4/1441.-q° 611r2r Houston, Texas ' January 6, 1982 1 ' -4- 11 COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS CITY OF FRIENDSWOOD, TEXAS I! September 30, 1981 GOVERNMENTAL FUND TYPES I Special Debt 11 ASSETS General Revenue Service CASH - unrestricted $ 424,520/ $57,757 $ 98,761 II II CASH - restricted (including time deposits of $111,781) 11 DELINQUENT TAXES RECEIVABLE 98,552 37,204 GRANTS RECEIVABLE ADVANCES TO JOINT VENTURE ACCOUNTS RECEIVABLE 1 Less allowance for doubtful accounts of $7 ,000 76,167/ 22,369 1 DUE FROM OTHER FUNDS 584,328 44,407 PREPAID EXPENSES AND OTHER 1 ASSETS 21,830 INVESTMENT IN11 JOINT VENTURE - Note 5 LAND PLANT AND EQUIPMENT - at cost Less allowance for depreciation AMOUNT AVAILABLE IN DEBT SERVICE FUND AMOUNT TO BE PROVIDED FOR RETIREMENT OF GENERAL LONG-TERM DEBT $1,205,397 $80,126 $180,372 c=ca=e.a 111 The notes to the financial statements are an integral part of this statement. -5- 1 1 !! II 1 PROPRIETARY FIDUCIARY TOTAL FUND TYPE FUND TYPE ACCOUNT GROUPS (Memorandum Only) General General I Trust and Fixed Long-Term Enterprise Agency Assets Debt 1981 1980 1 $ 80,619 $133,385 $ 795,042 $ 397,539 1 138,246 115,864 254,110 230,855 135,756 97 ,819 1 - 1,033,340 411,697 411,697 - II II 118,153 216,689 222,001 20,858 649,593 588,988 II18,600 754 41 ,184 96,559 II8,811 ,586 8,811,586 7,537,545 II 105,765 57 ,200 $ 269,906 432,871 375,871 5,504,447 5,245,691 10,750,138 10,464,415 1,082,153 1,082,153 961,614 II4,422,294 5,245,691 9,667,985 9,502,801 $ 180,372 180,372 117,551 1 II _ 3,035,681 3,035,681 3,101,449 14 127 818 $307 ,203 $5,515,597 $3,216,053 $24,632,566 $23,302,318 1 1 11 -6- I COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS - 2 GOVERNMENTAL FUND TYPES Special Debt General Revenue Service LIABILITIES AND FUND EQUITY LIABILITIES Accounts payable $ - 51 ,658 Due to other funds Customer meter deposits Due to joint venture Note payable Lease Obligations General obligation bonds and certificates of obligation Revenue bonds and combination revenue and tax bonds payable Bail bonds and warrants - 5,716 Accrued salaries and wages - 80,822 Matured bonds and interest payable Deferred tax revenues 98,552 $ 37,204 TOTAL LIABILITIES 236,748 37,204 FUND EQUITY Contributed capital Investment in general fixed assets Retained earnings Reserved for revenue bond collateral requirements Reserved for authorized construction Reserved for encumbrances Unreserved Fund balance Reserved for endowments Reserved for performance deposit Reserved for encumbrances 9,800 1 Unreserved Designated for debt service 143,168 Undesignated 958,849 $80,126 TOTAL FUND EQUITY 968,649 80,126 143,168 $1,205,397 $80, 126 $180,372 The notes to the financial statements are an integral part of this statement -7- 1 I! IIPROPRIETARY FIDUCIARY TOTAL FUND TYPE FUND TYPE ACCOUNT GROUPS (Memorandum Only) I Trust and General General Fixed Long-Term Enterprise Agency Assets Debt 1981 1980 I $ 40,001 $ 91,659 $ 17,195 516,048 $133,545 649,593 588,988 11 44,296 44,296 32,983 678,223 300,000 300,000 11 $ 84,053 84,053 3,132,000 3,132,000 3,219,000 II 3,555,000 3,555,000 3,515,000 5,716 4,352 il 6,740 87,562 31,613 13,554 i 135,756 97,819 4,462,085 133,545 3,216,053 8,085,635 8,198,727 I7,817 ,412 7,817,412 7,118,710 $5,515,597 5,515,597 5,262,359 II115,084 115,084 91,084 II 175,581 175,581 181,182 437 437 1,557,219 1,557,219 1,469,113 II71 ,428 71,428 70,396 102,230 102,230 89,396 1 9,800 143,168 117,551 II 1,038,975 703,800 9,665,733 173,658 5,515,597 16,546,931 15,103,591 1 $14,127,818 $307,203 $5,515,597 $3,216,053 $24,632,566 $23,302,318 I -8- II II IIPROPRIETARY FIDUCIARY TOTAL FUND TYPE FUND TYPE ACCOUNT GROUPS (Memorandum Only) 1 Trust and General General Fixed Long-Term Enterprise Agency Assets Debt 1981 1980 II $ 40,001 $ 91,659 $ 17,195 516,048 $133,545 649,593 588,988 II44,296 44,296 32,983 678,223 300,000 300,000 II $ 84,053 84,053 3,132,000 3,132,000 3,219,000 II3,555,000 3,555,000 3,515,000 II5,716 4,352 6,740 87,562 31,613 13,554 ' 135,756 97,819 4,462,085 133,545 3,216,053 8,085,635 8,198,727 1 7,817,412 7,817,412 7,118,710 $5,515,597 5,515,597 5,262,359 II 115,084 115,084 91,084 II 175,581 175,581 181,182 437 437 1,557,219 1,557,219 1,469,113 II71 ,428 71,428 70,396 102,230 102,230 89,396 1 9,800 143,168 117,551 1 9 _ 1 ,038,975 703,800 ,b65,733 173,658 5,515,597 16,546,931 15,103,591 II $14,127,818 $307,203 $5,515,597 $3,216,053 $24,632,566 $23,302,318 1 -8- I COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUNDS CITY OF FRIENDSWOOD, TEXAS Year ended September 30, 198111 GOVERNMENTAL FUND TYPES Special Debt Capital II General Revenue Service Projects REVENUES Taxes $1,969,963 $ 446,142 Sanitation fees 275,870II Fines and forfeitures 129,824 Licenses and permits 49,580 Intergovernmental revenue 54,293 $89,467II Interest and other income 81 ,003 3,426 21 ,993 TOTAL REVENUES 2,560,533 92,893 468,135 -0- EXPENDITURES 1 General government 625,083 1,037 Public safety 754,259 Public works 384,103 68,213II Sanitation 292,896 Culture and recreation 208,292 $ 6,350 Health and welfare 58,179II Debt service Principal retirement 99,336 Interest expense 203,396 TOTAL EXPENDITURES 2,322,812 68,213 303, 769 6,350 II REVENUES OVER (UNDER) EXPENDITURES 237, 721 24,680 164,366 (6,350) OTHER FINANCING SOURCES (USES) Proceeds of certificates of I obligation Operating transfer in 186,113 22,457 1, 726 Operating transfer out (98,915) (161 ,206) I TOTAL OTHER FINANCING SOURCES 87,198 _ _ (138,749) 1 ,726 REVENUES AND OTHER 1 SOURCES OVER (UNDER) EXPENDITURES AND OTHER USES 324,919 24,680 25,617 (4,624) II Fund balances at Oct. 1 , 1980 643, 730 55,446 117,551 4,624 FUND BALANCES AT SEPT. 30, 1981 $ 968,649 $80,126 $ 143,168 $ -0- I The notes to the financial statements are an integral part of this statement. I -9- 1 I I FIDUCIARY TOTAL FUND TYPE (Memorandum Only) I Expendable Trusts 1981 1980 I $2,416,105 $1 ,780,798 275,870 268,481 129,824 103,447 I 49,580 43,399 143,760 220,470 $ 12,834 119,256 110,219 12,834 3,134,395 2,526,814 626,120 462,461 ' 754,259 876,028 452,316 543,978 292,896 261,471 1 214,642 406,765 58,179 123,200 99,336 78,000 I 203,396 196,096 2,701 ,144 2,947,999 1 12,834 433,251 (421 ,185) I60,000 1,032 211 ,328 38,199 I (260,121) (49,765) 1 ,032 (48,793) 48,434 I I13,866 384,458 (372,751) 92,592 913,943 1 ,286,694 I $106,458 $1 ,298,401\ $ 913,943 I I -10- :I COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGETED AND ACTUAL - GENERAL, SPECIAL !I REVENUE AND DEBT SERVICE FUND TYPES CITY OF FRIENDSW00D, TEXAS Year ended September 30, 1981 General Fund Special Revenue Fund Variance Variance Favorable Favorable II Budget Actual (Unfavorable) Budget Actual (Unfavorable) REVENUES Taxes $1,742,730 $1,969,963 $227,233 Sanitation fees 267,778 275,870 8,092 Fines and forfeitures 114,000 129,824 15,824 Licenses and permits 32,000 49,580 17,580 Intergovernmental revenue 31,910 54,293 22,383 $72,000 $89,467 $17,467II Interest and other income 20,000 81,003 61,003 3,426 3,426 TOTAL REVENUES 2,208,418 2,560,533 352,115 72,000 92,893 20,893 EXPENDITURES General government 592,595 625,083 (32,488) Public safety 701,333 744,872 (43,539) Public works 458,539 384,103 74,436 72,000 68,213 3,787 Sanitation 279,625 292,896 (13,271) II Culture and recreation 196,572 208,292 (11,720) Health and welfare 60,603 67,566 (6,963) Debt service _ TOTAL EXPENDITURES 2,289,267 2,322,812 (33,545) 72,000 68,213 3,787 II REVENUES OVER (UNDER) EXPENDITURES (80,849) 237,721 318,570 -0- 24,680 24,680 II OTHER FINANCING SOURCES (USES) Operating transfers in 89,808 186,113 96,305 Operating transfers out (98,915) (98,915) 89,808 87,198 (2,610) REVENUES AND OTHER SOURCES OVER (UNDER) EXPENDITURES AND OTHER USES $ 8,959 324,919 $315,960 $ -0- 24,680 $24,680 II Fund balances at October 1, 1980 643,730 55,446 FUND BALANCE AT II SEPTEMBER 30, 1981 $ 968,649 $80,126 II 1 1 1 1 -11- 1 1 It II 1 Total 1 Debt Service Fund (Memorandum Only) Variance Variance Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) II $ 440,742 $ 446,142 $ 5,400 $2,183,472 $2,416,105 $ 232,633 267,778 275,870 8,092 114,000 129,824 15,824 II 32,000 49,580 17,580 103,910 143,760 39,850 21,993 21,993 20,000 106,422 86,422 440,742 468,135 27,393 2,721,160 3,121,561 400,401 II 1,037 (1,037) 592,595 626,120 (33,525) 701,333 744,872 (43,539) 1 530,539 452,316 78,223 279,625 292,896 (13,271) 196,572 208,292 (11,720) 60,603 67,566 (6,963) II 285,849 302,732 (16,883) 285,849 2 302,732 (16,883) 285,849 303,769 (17,920) ,647,116 2,694,794 (47,678) 154,893 164,366 9,473 74,044 426,767 352,723 II I 22,457 22,457 89,808 208,570 118,762 (154,800) (161,206) (6,406) (154,800) (260,121) (105,321) 154,800) (138,749) 16,051 67 4,992) (51,551) 13,441 II $ 93 25,617 $ 25,524 $ 9,052 375,216 $ 366,164 11 117,551 816,727 $ 143,168 $1,191,943 =======s= _II II II I 1 -12- I I I I TOTALS (Memorandum Only). I 1981 1980 $ 973,520 $ 829,072 I 126,294 73,745 3,278 16,324 6,204 1 ,852 1,109,296 920,993 75,973 120,694 62,713 68,250 62,369 63,050 1 ,134 483 I 202,189 252,477 80,506 111 ,659 42,819 94,669 I 82,305 75,548 425 1 ,506 345,106 28,641 I551,161 312,023 355,946 356,493 I 120,539 95,665 235,407 260,828 32,289 23,005 (228,852) (223,101) (5,000) (5,000) (201,563) (205,096) I33,844 55,732 74,130 I (1 ,032) (710) 106,942 55,022 1 1 ,808,579 1 ,753,557 $1 ,915,521 $1 ,808,579 I I -14- II 11 COMBINED STATEMENT OF CHANGES IN FINANCIAL POSITION - PROPRIETARY FUND TYPE AND SIMILAR TRUST FUND IICITY OF FRIENDSWOOD, TEXAS II Year ended September 30, 1981 and 1980 SOURCE OF FUNDS 1981 1980 I Operations Net income for the year $ 106,942 $ 55,022 Expenses not requiring current outlay of I financial resources - depreciation Working120,539 95,665 capital provided from operations 227,481 150,687 I Contributed capital 698, 702 4,944,563 Residual equity transfers 96,706 Sale of revenue bonds 155,000 850,000 1 ,081 ,183 6,041 ,956 II APPLICATION OF FUNDS Acquisition of property, plant and equipment 32,285 1,157,399 Investment in joint-venture 297,901 3,988,374 I Retirement of long-term debt 115,000 260,000 445,186 5,405,773 I INCREASE IN WORKING CAPITAL $ 635,997 $ 636,183 INCREASE (DECREASE) IN COMPONENTS OF WORKING I CAPITAL Cash $ (76,000) $ 49,693 Accounts receivable (16,066) 1,014,566 I Prepaid expenses (5,000) 23,600 Due from other funds (15,346) (42,160) Advances to joint venture 1,089,920 (678,223) IIAccounts payable (34,578) 117,043 Customer meter deposits (11 ,313) 3,017 Note payable (300,000) I Due to other funds 7,126 152,641 Accrued expenses (2,746) (3,994) I INCREASE IN WORKING CAPITAL $ 635,997 $ 636,183 __________ = 1 1 IThe notes to the financial statements are an integral part of this statement. I -15- 11 NOTES TO FINANCIAL STATEMENTS CITY OF FRIENDSWOOD, TEXAS September 30, 1981 1 . ORGANIZATION The City of Friendswood adopted a "Home Rule Charter" on October 15, 1960 which provides for a "Council-Manager" form of city government. 2. SIGNIFICANT ACCOUNTING POLICIES AND DESCRIPTION OF FUNDS ' A. DESCRIPTION OF FUNDS General Fund ' The General Fund is used to account for all financial transactions which are not accounted for in another fund. The primary sources of revenue of the General Fund are property taxes, franchises, sanitation income, and fines and forfeitures. Primary expenditures are for general government, public safety, streets and drainage, sanitation, culture and recreation, and health and welfare. ' Special Revenue Fund The Special Revenue Fund (Revenue Sharing Fund) is used to account for revenue received from the federal government under the State and Local Fiscal Assistance Act of 1972. Revenues from the federal government may be used only for "priority expenditures" as defined in the Act. ' Capital improvements are charged to expenditures in the accounts of the fund and capitalized in either the Water and Sewer Fund or General Fixed Assets Account Group. Debt Service Fund The Debt Service Fund is used to account for the payment of interest and principal of general bonded debt of the City, which is accounted for in the General Long Term Debt Account Group. The primary source of revenue of the Debt Service Fund is general property ' taxes. The payment of interest and principal on revenue bonds and combination revenue and tax bonds of the Enterprise (Water and Sewer) Fund are accounted for in the Enterprise (Water and Sewer) Fund. Capital Projects Fund The Capital Projects Fund is used to account for the receipt and ' expenditure of resources used for acquisition of designated fixed assets except those financed by the Enterprise (Water and Sewer) Fund. 1 -16- 11 NOTES TO FINANCIAL STATEMENTS - 2 2. SIGNIFICANT ACCOUNTING POLICIES (continued) ' DESCRIPTION OF FUNDS (continued) Enterprise Fund The Enterprise Fund (Water and Sewer Fund) is used to account for the operations of the Water and Sewer Department. The Enterprise Fund operations are financed and operated in a manner similar to private business enterprises where the intent is that the costs (expenses, including depreciation) of providing goods and services to the general public on a continuing basis be financed or recovered primarily through user charges. Trust Funds ' The Trust Funds are used to account for assets held by the City in a trustee capacity for individuals and private organizations. ' The Non-Expendable Trust Fund (1776 Park Trust Endowment Principal Fund) is used to account for the legally restricted non-expendable 1776 Park land trust corpus and the legally restricted non-expendable 1776 ' Park maintenance endowment cash trust corpus. The Expendable Trust Funds consist of the 1776 Park Trust Endowment tRevenue Fund and the Performance Deposit Fund. The 1776 Park Trust Endowment Revenue Fund is used to account for the ' expenditures of the legally restricted income earned on the 1776 Park maintenance endowment cash trust corpus. The trust corpus reverts to a third party in the event that the City does not maintain compliance with the trust agreements. The Performance Deposit Fund is used to account for a performance cash deposit and the income from the deposit. The deposit is being held by ' the City for the performance of a street construction contract. Agency Funds The Agency Funds are used to account for assets held by the City as an agent for other City funds. Agency Funds are custodial in nature and do not involve measurements of results of operations. 1 1 -17- NOTES TO FINANCIAL STATEMENTS - 3 1 2. SIGNIFICANT ACCOUNTING POLICIES (continued) B. DESCRIPTION OF ACCOUNT GROUPS General Fixed Assets Account Group IThe General Fixed Assets Account Group is a listing of the City's general fixed assets - those assets not employed in commercial type ' activities (Enterprise Fund) or held in trust (Trust Fund) - balanced by accounts showing the sources by which such assets were financed. Such assets are recorded at cost or at market value at date of donation. ' General Long-Term Debt Account Group The General Long-Term Debt Account Group is used to account for ' general obligation bonds and certificates of obligation that are not a specific liability of the Enterprise (Water and Sewer) Fund. ' C. MEASUREMENT FOCUS Governmental (General, Special Revenue, Debt Service, and Capital Projects) fund types are accounted for on a "spending" or "financial ' flow" measurement focus. Accordingly, only current assets and current liabilities are included on their balance sheets and the reported fund balance (total reported assets less total reported liabilities) pro- vides an indication of available spendable or appropriable resources. Operating statements for governmental fund types (on a spending measurement focus) report increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in available spendable resources. ' -18- I NOTES TO FINANCIAL STATEMENTS - 4 2. SIGNIFICANT ACCOUNTING POLICIES (continued) ' MEASUREMENT FOCUS (continued) Proprietary (Enterprise) fund types are accounted for on an "income ' determination" or "cost of services" measurement focus. Accordingly, all assets and all liabilities are included in their balance sheets, and the reported fund equity (total reported assets less total reported ' liabilities) provides an indication of the economic net worth of the fund. Operating statements for proprietary fund types (on an income determination measurement focus) report increases (revenues) and ' decreases (expenses) in total economic net worth. Fiduciary funds are accounted for as either governmental or pro- prietary, depending upon their nature. Non-expendable Trust Funds are ' accounted for as proprietary fund types, while Expendable Trust Funds are accounted for as governmental fund types. Agency Funds report only financial position. Since Agency Funds are custodial in nature ' they are not concerned with measurement of results of operations as such. ' Fixed assets which are not used in proprietary fund operations, are accounted for in a separate self-balancing General Fixed Assets Account Group. Long-term debts which are not intended to be financed through proprietary funds are all accounted for in a separate self-balancing ' General Long-Term Debt Account Group. Depreciation is reported on the operating statements of proprietary ' fund types (on an income determination measurement focus) . Depre- ciation is not reported on the operating statements of governmental fund types (on a spending measurement focus) . ' D. BASIS OF ACCOUNTING "Basis of accounting" refers to the time that revenues and expenditures or ' expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measure- ments, regardless of the measurement focus applied. Proprietary fund types and Non-expendable Trust Funds use the accrual method of accounting. On the accrual method, revenues are recognized in the accounting period in which they are earned and expenses are recog- nized in the accounting period incurred. ' -19- NOTES TO FINANCIAL STATEMENTS - 5 2. SIGNIFICANT ACCOUNTING POLICIES (continued) ' BASIS OF ACCOUNTING (continued) Governmental fund types and Expendable Trust Funds use the modified ' accrual basis of accounting. On the modified accrual basis, revenues are recognized in the accounting period in which they become available and measurable ("susceptible to accrual"), and expenditures are recog- nized in the accounting period in which the fund liability is incurred, except for unmatured interest on general long-term debt. The agency fund assets and liabilities use the modified accrual basis of account- ' ing. On the modified accrual basis, receivables are recognized as soon as a legal "right to receive" exists, regardless of the revenue recog- nition treatment applied. ' The following revenue sources have been treated as susceptible to accrual under the modified accrual basis: i Sales taxes Federal revenue sharing and grants Industrial district taxes ' Interest on investments Sanitation revenue The following revenue sources have not been treated as susceptible to ' accrual under the modified accrual basis: Franchises ' Licenses and permits Fines and forfeitures Beverage taxes General property taxes E. ENCUMBRANCES ' Encumbrances are obligations which are chargeable to an appropriation and for which a part of the appropriation is reserved. The encum- brance ceases when the obligation is paid, when the actual liability is incurred, or when the appropriation lapses. Encumbrances outstanding at the end of the year have not been reported as expenditures or liabilities. i 1 -20- NOTES TO FINANCIAL STATEMENTS - 6 r 2. SIGNIFICANT ACCOUNTING POLICIES (continued) F. BUDGETS The original budget is adopted by the City Council prior to the beginning ' of the fiscal year. Amendments are made during the year by City Council and the final amended budget is set forth in this report. ' The budget should not be exceeded in any major expenditure category under city requirements. Unused appropriations lapse at the end of each fiscal year. G. TIME DEPOSITS Time deposits consist of certificates of deposit which are valued at cost. H. FIXED ASSETS ' Fixed assets are stated at original cost. Donated assets are valued at their fair market value on the date donated. Costs incurred for the pur- chase or construction of general fixed assets are recorded as capital out- lay expenditures in the General, Special Revenue and Capital Projects Funds. All such costs are capitalized in the General Fixed Assets Account Group. Amounts expended for property, plant and equipment in the Enterprise Fund are capitalized in the fixed asset accounts within that fund. Public domain infrastructure fixed assets such as bridges, roads, drainage systems, etc. are capitalized along with other general fixed assets. I. DEPRECIATION Depreciation of all exhaustible fixed assets used by the Enterprise Fund is charged as an expense against its operations. Allowance for depreciation ' is reported in the Enterprise Fund balance sheet. Depreciation has been provided over the estimated useful lives using the straight-line method. The estimated useful lives are as follows: ' Assets Life Equipment 3-10 years Water and Sewer System 50 years No depreciation is provided for the general fixed assets of the City. i ' -21- 1 NOTES TO FINANCIAL STATEMENTS - 7 1. I 2. SIGNIFICANT ACCOUNTING POLICIES (continued) J. VACATION AND SICK PAY Accumulated unpaid vacation and other employee benefits are accrued in both the General and Enterprise Funds. Sick pay is recorded only when paid by the City. As of September 30, 1981 accrued vacation and other employee benefits were as follows: ' General Fund $36,661 Enterprise Fund 2,025 3. INTERFUND RECEIVABLES AND PAYABLES The following is a summary of amounts due from and due to other funds: Due From Due To General Fund Enterprise Fund $451 ,296 Trust and Agency Funds 133,032 TOTAL GENERAL FUND 584,328 Debt Service Fund Enterprise Fund 44,407 TOTAL DEBT SERVICE FUND 44,407 Enterprise Fund General Fund 20,845 $471,641 Debt Service Fund 44,407 Trust and Agency Funds 13 TOTAL ENTERPRISE FUND 20,858 516,048 Trust and Agency Funds General Fund 133,532 Enterprise Fund 13 TOTAL TRUST AND AGENCY FUNDS 133,545 TOTAL ALL FUNDS $649,593 $649,593 I ' -22- 1 11 NOTES TO FINANCIAL STATEMENTS - 8 11 4. PENSION PLAN ' The City participates in the Texas Municipal Retirement System. All fulltime employees are covered by the pension plan. The total pension ' payments for the year ended September 30, 1981 were $21,827, which includes amortization of prior service cost over 25 years. The City's policy is to fund pension cost accrued. The total of the pension fund and balance sheet accruals less pension prepayments and deferred charges ' at December 31 , 1981 exceeded the actuarially computed value of vested benefits by approximately $43,237 . The unfunded prior service liability was $68,209 at December 31, 1980. 5. INVESTMENT IN JOINT VENTURE At September 30, 1981 the City was a partner in a joint venture formed to construct the Blackhawk regional sewage treatment plant. The City's ownership in the plant, based on its share of reserve capacity, is 57.69%. ' The plant was substantially complete and in operation at September 30, 1981 . The Gulf Coast Waste Disposal Authority owns the land on which the plant is located. The Authority has the jurisdiction for the service area and has contracts with the partners to operate the plant. A condensed bal- ance sheet of the joint venture as of September 30, 1981 follows: 1 1 1 1 -23- 1 1 NOTES TO FINANCIAL STATEMENTS - 9 ' BALANCE SHEET (unaudited) 1 ASSETS Cash $ 101 ,136 Grants 437,228 ' Blackhawk regional sewage treatment plant - at cost 13,038,252 Less allowance for depreciation (266,405) 12,771,847 ' $13,310,211 LIABILITIES AND PARTNERS' EQUITY ' LIABILITIES Accounts payable $ 126,667 Due to partner 411,697 538,364 ' PARTNERS' EQUITY City of Friendswood 8,811,586 Clearwood Improvement District 1,662,127 Harris County M.U.D. #55 1,560,041 ' Harris County M.U.D. #142 WCID623,530 #108 114,563 ' TOTAL PARTNERS' EQUITY 12,771,847 $13,310,211 The City' s investment in the joint venture has been recorded in the Enterprise (Water and Sewer) Fund. 1 1 1 1 -24- II II NOTES TO FINANCIAL STATEMENTS - 10 II II 6. LONG-TERM DEBT IChanges in Long-Term Debt of the City during the year ended September 30, 1981 are summarized as follows: I General Water & Sewer Long-Term Revenue Debt Bonds Total IIBalance at October 1, 1980 $3,219,000 $3,515,000 $6,734,000 Obligations issued 155,000 155,000 1 Obligations retired 87,000 115,000 202,000 BALANCE AT SEPTEMBER 30, 1981 $3,132,000 $3,555,000 $6,687,000 IIThe total debt of the City (governmental and proprietary funds) by maturity date is as follows: IFiscal Year General Water and Sewer Ending Long-Term Debt Revenue Bonds Sept. 30 Principal Interest Principal Interest I1982 $ 97,000 $ 188,691 $ 130,000 $ 217,425 1983 107,000 183,073 130,000 208,975 I 1984 112,000 176,907 135,000 200,525 1985 132,000 170,288 190,000 191,650 1986 118,000 162,376 195,000 180,975 I 1987 123,000 155,714 205,000 210,000 168,338 1988 129,000 148,829 155,287 1989 140,000 141,295 215,000 152,900 1990 150,000 132,876 225,000 138,463 II 1991 160,000 123,816 230,000 122,056 1992 164,000 114,278 205,000 106,303 1993 175,000 104,148 155,000 92,047 II 1994 190,000 92,530 160,000 79,128 1995 205,000 80,266 175,000 67,256 1996 220,000 66,825 185,000 55,344 II 1997 230,000 52,881 200,000 49,303 1998 205,000 39,201 220,000 37 ,707 1999 215,000 25,649 230,000 25,131 2000 260,000 15,600 160,000 14,600 IITOTAL $3,132,000 $2,175,243 $3,555,000 $2,263,413 1 II -25- II II NOTES TO FINANCIAL STATEMENTS - 11 II II 7. GENERAL FIXED ASSETS IIA summary of the changes in general fixed assets for the year ended Sept- ember 30, 1981 follows: I Balance at Balance at Oct. 1 , 1980 Additions Retirements Sept. 30, 1981 I Land Buildings $ 212,906 $ 57 ,000 $ 269,906 808,875 70,000 878,875 Improvement 3,334,040 1,196 $ 1 ,328 3,333,908 II Equipment 879,510 171,119 17,721 1,032,908 Construction in progress 27,028 - 27,028 - I $5,262,359 $299,315 $46,077 $5,515,597 IA summary of the changes in Enterprise Fund property, plant and equipment for the year ended September 30, 1981 follows: I Land $ 105,765 $ 105,765 Plant and equipment 4,649,111 $ 13,217 4,662,328 Water and sewer lines - 204,448 204,448 I Storm sewers 637 ,671 - 637,671 Construction in progress 185,380 - $185,380 - ' TOTAL 5,577,927 217 ,665 185,380 5,610,212 Less allowance for depreciation 961 ,614 120,539 - 1,082,153 II NET PROPERTY, PLANT AND I EQUIPMENT $4,616,313 $ 97,126 $185,380 $4,528,059 I8. NOTE PAYABLE The unsecured note payable of the Enterprise Fund, dated September 16, I 1981 , bears interest at 10%. The note is payable to a bank on January 14, 1982. II I -26- NOTES TO FINANCIAL STATEMENTS - 12 9. LEASE COMMITMENTS The City leases a fire truck under arrangements which qualifies it as a capital lease. The fire truck has been capitalized in the General Fixed Assets Account Group at $96,389, the net present value of the lease commitment. The following is a schedule of minimum annual lease commitments outstanding at September 30, 1981: 1982 $ 22,457 1983 1984 22,457 22,457 1985 22,457 1986 22,457 Total payments 112,285 Interest portion 28,232 Total minimum lease commitments $ 84,053 I -27- OTHER FINANCIAL INFORMATION 1 1 I 1 1 ' -28- I PRINCIPAL OFFICIALS CITY OF FRIENDSWOOD, TEXAS September 30, 1981 ' MAYOR Dale Whittenburg Councilwoman Councilman Position No. 1 Position No. 4 Mary Brown Loren E. Wood ' Councilman Mayor Pro-Tem Councilman Position No. 2 Position No. 5 Robert Wicklander Paul W. Schrader ' Councilman Councilman Position No. 3 Position No. 6 Edward 0. Zeitler Todd Stewart City Manager James C. Morgan City Secretary Director of Finance Tax Assessor Bobbie C. Henry David Quick Alta Carbone I 1 t -29- 1 I I! GENERAL FUND 1 I IISTATEMENT OF REVENUES - BUDGETED AND ACTUAL CITY OF FRIENDSWOOD, TEXAS IIYears ended September 30, 1981 and 1980 II1981 Actual (Over) 1 (Under) 1980 Budget Actual Budget Actual II Taxes General property $ 959,730 $ 999,929 $ (40,199) $ 940,590 Industrial districts 370,000 371,622 (1 ,622) 186,678 I Sales 275,000 415,228 (140,228) 275,675 Franchise 134,000 178,789 (44,789) 107, 731 Other 4,000 4,395 (395) 4,443 1,742,730 1,969,963 (227,233) 1,515,117 IISanitation 267,778 275,870 (8,092) 268,481 IIFines and forfeitures 114,000 129,824 (15,824) 103,447 Licenses and permits 32,000 49,580 (17,580) 43,399 II Inter-governmental revenues 31,910 54,293 (22,383) 140,002 I Interest on investments 20,000 49,753 (29,753) 27,209 Other - 31,250 (31,250) 42,168 ITOTAL REVENUES 2,208,418 2,560,533 (352,115) 2,139,823 I Other financing sources - - - Proceeds of certificates of obligation 60,000 I TOTAL REVENUES AND OTHER FINANCIAL SOURCES $2,208,418 $2,560,533 $(352,115) $2,199,823 I I I 1 -30- 1 I GENERAL FUND IISTATEMENT OF EXPENDITURES - BUDGETED AND ACTUAL - BY FUNCTION CITY OF FRIENDSWOOD, TEXAS IIYears ended September 30, 1981 and 1980 I1981 Actual (Over) I Under 1980 Budget Actual Budget Actual I General Government Administration $ 478,394 $ 514,060 $(35,666) $ 343,940 Municipal court 41,253 37,811 3,442 45,115 I Engineering 22,910 26,380 (3,470) 25,085 Inspections 42,651 42,797 (146) 36,801 Planning and zoning 7,387 4,035 3,352 4,363 TOTAL GENERAL GOVERNMENT 592,595 625,083 32,488) 455,304 IPublic Safety ,. Police 578,203 609,896 (31,693) 550,481 I Fire 80,626 103,775 (23,149) 196,291 Humane 30,754 28,600 2,154 15,853 Civil defense 1,750 2,601 (851) 2,400 TOTAL PUBLIC SAFETY 691,333 744,872 (53,539) 765,025 I Public Works Streets 417,950 339,218 78,732 255,541 I Drainage 40,589 44,885 (4,296) 11,641 TOTAL PUBLIC WORKS 458,539 384,103 74,436 267,182 I Sanitation TOTAL SANITATION 279,625 292,896 (13,271) 261,471 279,625 292,896 1271)3, 261,471 1 Culture and Recreation Library 109,419 112,320 (2,901) 96,756 Parks and recreation 83,854 92,791 (8,937) 104,438 Youth needs and opportunity I commission 2,299 1,312 987 2,256 Community appearance 1,000 1,869 (869) 298 TOTAL CULTURE AND I RECREATION 196,572 208,292 (11,720) 203,748 Health and Welfare Community counseling center 50,381 48,307 2,074 45,844 Ambulance 10,000 9,387 613 15,829 I Health and welfare 10,222 9,872 350 61,527 TOTAL HEALTH AND WELFARE 70,603 67,566 3,037 123,200 IITOTAL EXPENDITURES 2,289,267 2,322,812 (33,545) 2,075,930 11 -31- 1 I GENERAL FUND STATEMENT OF EXPENDITURES - BUDGETED AND ACTUAL - BY FUNCTION - 2 ' _1981 Actual I (Over) Under 1980 Budget Actual Budget Actual ' Other Financing Sources (Uses) Operating transfers in 89,808 186,113 96,305 ' Operating transfers out (98,915) (98,915) (37,489) 89,808 87,198 2,610) (37,489) TOTAL EXPENDITURES AND' OTHER SOURCES $2,199,459 $2,235,614 $ (36,155) $2,113,491 ' Summary of Expenditures Operating expenditures $2,159,267 $2,280,262 $(120,995) $1,827,831 Capital outlay 130,000 42,550 87,450 248,099 ' Operating transfers out (in) (89,808) (87,198) (2,610) 37,489 TOTAL $2,199,459 $2,235,614 $ (36,155) $2,113,419 1 -32- I 1 GENERAL FUND 1 STATEMENT OF EXPENDITURES - BUDGETED AND ACTUAL - BY OBJECT CITY OF FRIENDSWOOD, TEXAS 1 Years ended September 30, 1981 and 1980 II1981 Actual (Over) 1 Under 1980 Budget Actual Budget Actual 1 General Government Administration Personal services $195,029 $202,319 ' $ (7,290) $117,020 1 Supplies and maintenance 35,200 27,041 8,159 20,584 Other services and charges 242,815 274,834 (32,019) 196,954 Travel and training 5,350 9,401 (4,051) 3,768 Capital outlay - 465 (465) 5,614 II 478,394 514,060 35,666) 343,940 Municipal Court 1 Personal services 35,025 34,957 68 36,001 Supplies and maintenance 4,503 1,241 3,262 3,356 Other services and charges 1,175 860 315 867 Travel and training 550 753 (203) 468 1 Capital outlay - - - 4,423 41 ,253 37,811 3,442 45,115 1 Engineering Personal services - 3,164 (3,164) - Supplies and maintenance 1,810 83 1,727 1,255 1 Other services and charges 21,100 22,910 23,133 (2,033) 23,830 26,380 (3,470) 25,085 Inspections I Personal services 37,201 37,171 30 30,085 Supplies and maintenance 4,400 4,486 (86) 3,932 Other services and charges 350 466 (116) 388 II Travel and training 700 674 26 566 Capital outlay - - - 1,830 42,651 42,797 146) 36,801 1 1 1 1 -33- 1 1 GENERAL FUND 1 STATEMENT OF EXPENDITURES - BUDGETED AND ACTUAL - BY OBJECT - 2 I 1 1981 Actual (Over) Under 1980 I Budget Actual Budget Actual General Government - continued 1 Planning and Zoning Personal services 1,137 770 367 912 Supplies and maintenance 450 377 73 307 II Other services and charges 5,250 2,888 2,362 3,019 Travel and training 550 550 - Capital outlay - - - 125 7 387 4,035 3,352 4,363 1 TOTAL GENERAL GOVERNMENT 592,595 625,083 (32,488) 455,304 II Public Safety Police Service 1 Personal services Supplies and maintenance 467,080 490,109 (23,029) 431,176 92,733 99,385 (6,652) 85,005 Other services and charges 10,770 8,571 2,199 8,330 Travel and training 2,620 2,418 202 1,703 1 Capital outlay 5,000 9,413 (4,413) 24,267 578,203 609,896 31 ,693) 550,481 1 Fire Personal services 21,576 19,075 2,501 17,946 Supplies and maintenance 36,165 48,936 (12,771) 53,052 Other services and charges 6,025 17,173 (11,148) 8,852 1 Travel and training 6,860 8,775 (1 ,915 6,696 Capital outlay 10,000 9,816 184 109,745 80,626 103,775 23,149) 196,291 II 1 1 1 1 -34- 1 1 GENERAL FUND 1 STATEMENT OF EXPENDITURES - BUDGETED AND ACTUAL - BY OBJECT - 3 II 1981 II Actual (Over) Under 1980 I Budget Actual Budget Actual Humane Personal services 12,319 12,277 42 12,018 I Supplies and maintenance 2,555 2,241 314 1,9521,823 Other services and charges 15,880 13,928 2,012 Travel and training - 154 (154) - ' 30,754 28,600 2,154 15,853 Civil Defense Supplies and maintenance 1,750 1,355 395 2,400 I Other services and charges - 468 (468) Travel and training 8 (8) Capital outlay - 770 (770) - ' 1,750 2,601 851) 2,400 TOTAL PUBLIC SAFETY 691,333 744,872 (53,539) 765,025 IPublic works Streets Personal services 77,200 57,136 20,064 99,559 II Supplies and maintenance 85,100 103,958 (18,858) 95,256 Other services and charges 155,450 176,878 (21 ,428) 21,334 Travel and training 200 50 150 40 1 Capital outlay 100,000 1,196 98,804 39,352 417,950 339,218 78,732 255,541 IIDrainage Personal services 19,639 22,658 (3,019) - Supplies and maintenance 17,900 8,846 9,054 10,289 Other services and charges 3,050 13,381 (10,331) - I Capital outlay - - - 1,352 40,589 44,885 4,296) 11,641 IITOTAL PUBLIC WORKS 458,539 384,103 74,436 267,182 II 1 I -35- II GENERAL FUND 1 STATEMENT OF EXPENDITURES - BUDGETED AND ACTUAL - BY OBJECT - 4 II 1981 I Actual (Over) Under 1980 Budget Actual Budget Actual I Sanitation Sanitation 1 Personal services 168,455 168,954 (499) 155,950 Supplies and maintenance 82,550 82,961 (411) 69,733 Other services and charges 28,600, 37,884 (9,284) 32,716 ' Travel and training 20 41 (21) - Capital outlay - 3,056 (3,056) 3,072 TOTAL SANITATION 279,625 292,896 (13,271) 261,471 Culture and Recreation II Library Personal services 72,814 74,791 (1,977) 65,414 Supplies and maintenance 13,655 9,833 3,822 5,172 I Other services and charges 4,930 9,280 (4,350) 6,355 Travel and training 3,020 2,735 285 672 Capital outlay 15,000 15,681 (681) 19,143 109,419 112,320 2,901) 96,756 IIParks and Recreation Personal services 46,958 54,686 (7,728) 41 ,652 1 Supplies and maintenance 26,261 24,014 2,247 22,138 Other services and charges 10,135 11 ,381 (1,246) 6,562 Travel and training 500 556 (56) 631 Capital outlay - 2,154 (2,154) 33,455 II83,854 92,791 8,937) 104,438 Youth Needs and Opportunity 11 Personal services 1,599 961 638 1,357 Supplies and maintenance 300 164 136 576 Other services and charges 400 187 213 107 II Travel and training - - - 216 2,299 1,312 987 2,256 II II 1 -36- II 11 GENERAL FUND ISTATEMENT OF EXPENDITURES - BUDGETED AND ACTUAL - BY OBJECT - 5 I 1981 I Actual (Over) Under 1980 I Budget Actual Budget Actual Community Appearance Personal services 1,000 226 (226) 45 I Supplies and maintenance _ 1,286 (286) -253 Other services and charges 357 (357) 1,000 1,869 869) 298 I TOTAL CULTURE AND RECREATION 196,572 208,292 (11,720) 203,748 Health and Welfare IICommunity Counseling Center Personal services 39,061 38,147 914 31,600 Supplies and maintenance 2,099 1,478 621 6,039 1 Other services and charges 6,980 3,814 3,166 5,219 Travel and training 2,241 4,868 (2,627) 2,487 Capital outlay - - - 499 I 50,381 48,307 2,074 45,844 Ambulance Supplies and maintenance 9,000 8,236 764 9,480 I Other services and charges - 651 (651) 120 Travel and training 1,000 500 500 1,007 Capital outlay - - - 5,222 I10,000 9,387 613 15,829 Health and Welfare 1 Supplies and maintenance - - - 52,552 Other services and charges 10,222 9,872 350 8,975 10,222 9,872 350 61,527 TOTAL HEALTH AND IIWELFARE 70,6O3 67,566 3,037 123,200 TOTAL EXPENDITURES 2,289,267 2,322,812 (33,545) 2,075,930 IIOther Financing Sources (Uses) II Operating transfers in 89,808 186,113 96,305 - Operating transfers out (98,915) (98,915) 37,489 TOTAL $2,199,459 $2,235,614 $(36,155) $2,113,419 II II -37 1 ENTERPRISE FUND (WATER AND SEWER FUND) II STATEMENT OF REVENUE AND EXPENDITURES - BUDGETED AND ACTUAL 1 CITY OF FRIENDSWOOD, TEXAS IYears ended September 30, 1981 and 1980 I 1981 Actual (Over) II (Under) 1980 Budget _ Actual Budget Actual I Operating revenues Water and sewer charges $ 999,670 $ 973,520 $ 26,150 $829,072 Fees and penalties 15,150 3,278 11,872 16,324 I WCID #108 sewer fee - 82,600 126,294 (43,694) 73,745 Other income 6,204 (6,204) 1,852 TOTAL OPERATING REVENUES 1,097,420 1,109,296 (11 ,876) 920,993 IOperating expenses Water Department I Personal services 81,073 75,973 5,100 120,694 Supplies and maintenance 44,000 62,713 (18,713) 68,250 Other services and charges 60,471 62,369 (1 ,898) 63,050 I Travel and training 850 1,134 _ (284) 483 186,394 202,189 (15,795) 252,477 Sewer Department I Personal services 83,345 80,506 2,839 111 ,659 Supplies and maintenance 53,050 42,819 10,231 94,669 Other services and charges 48,971 82,305 (33,334) 75,548 II Travel and training 1,050 425 625 1,506 Waste disposal fees 330,000 345,106 (15,106) 28,641 516,416 551,161 (34,745) 312,023 1 Depreciation - 120,539 (120,539) 95,665 TOTAL OPERATING EXPENSES 702,810 873,889 (171,079) 660,165 II OPERATING REVENUES OVER EXPENSES 394,610 235,407 (159,203) 260,828 1 1 1 I -38- ENTERPRISE FUND (WATER AND SEWER FUND) STATEMENT OF REVENUE AND EXPENDITURES - BUDGETED AND ACTUAL - 2 1981 Actual ' Over (Under) 1980 Budget Actual Budget Actual Non-operating revenue (expenses) - Interest income 31,257 31,257 22,295 Interest expense (258,738) (228,852) 29,886 (223,101) ' Bond cost amortization - (5,000) (5,000) (5,000) (258,738) 202,595) 56,143 205,806) INCOME (LOSS) BEFORE OPERATING TRANSFERS 135,872 32,812 (103,060) 55,022 Operating transfers in - 163,938 163,938 - ' Operating transfers out (114,808) (89,808) (25,000) - 114,808) 74,130 188,938 55,022 NET INCOME $ 21,064 $ 106,942 $ 85,878 $ 55,022 I 1 1 ' -39-