HomeMy WebLinkAbout1996 09 30 Annual Report - City of Friendswood I
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Comprehensive
Annual Financial Report
of the
City of Friendswood, Texas
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Fiscal Year Ended
September 30, 1996
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Officials Issuing Report
Ronald E. Cox
City Manager
1 Roger C. Roecker
Director of Administrative Services
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CITY OF FRIENDSWOOD, TEXAS
ICOMPREHENSIVE ANNUAL FINANCIAL REPORT
Year Ended September 30, 1996
ITABLE OF CONTENTS
IExhibit Page
INTRODUCTORY SECTION
ILetter of Transmittal 1-10
Organization Chart 11
Certificate of Achievement for Excellence in
I Financial Reporting 12
Principal Officials 13
IFINANCIAL SECTION
IIndependent Auditors' Report 14
GENERAL PURPOSE FINANCIAL STATEMENTS
I Combined Balance Sheet —All Fund Types and Account Groups A-1 15-18
Combined Statement of Revenues,Expenditures and Changes in
Fund Balances — All Governmental Fund Types A-2 19-20
I Combined Statement of Revenues,Expenditures and Changes in
Fund Balances—Budget(GAAP Basis)and Actual—General,
Special Revenue,and Debt Service Funds A-3 21-22
I Combined Statement of Revenues, Expenses and Changes in
Retained Earnings/Fund Balance — Proprietary Fund Type
and Non—Expendable Trust Fund A-4 23-24
Combined Statement of Cash Flows — Proprietary Fund Type
I and Non—Expendable Trust Fund A-5 25-26
Notes to Financial Statements A-6 27-49
I COMBINING, INDIVIDUAL FUND AND ACCOUNT GROUP
STATEMENTS AND SCHEDULES
IGovernmental Fund Types
General Fund:
Comparative Balance Sheet B-1 50
I Statement of Revenues, Expenditures and Changes in
Fund Balance — Budget and Actual B-2 51-57
Special Revenue Funds:
Combining Balance Sheet C-1 58-59
Combining Statement of Revenues, Expenditures and
IChanges in Fund Balance C-2 60-61
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CITY OF FRIENDSWOOD, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
Year Ended September 30, 1996
TABLE OF CONTENTS
Exhibit Page
FINANCIAL SECTION(continued)
COMBINING, INDIVIDUAL FUND AND ACCOUNT GROUP
STATEMENTS AND SCHEDULES (continued)
Governmental Fund Types (continued)
Special Revenue Funds: (continued)
Statement of Revenues,Expenditures,and Changes in Fund
Balance — Budget and Actual (Police Investigation) C-3 62
Statement of Revenues,Expenditures,and Changes in Fund
Balance — Budget and Actual (Fire/EMS Donations) C-4 63
Statement of Revenues,Expenditures,and Changes in Fund
Balance — Budget and Actual (Centennial) C-5 64
Debt Service Fund:
Comparative Balance Sheet D-1 65
Statement of Revenues,Expenditures and Changes in Fund
Balance — Budget and Actual D-2 66
Capital Projects Funds:
Combining Balance Sheet E-1 67
Combining Statement of Revenues, Expenditures and
Changes in Fund Balance E-2 68
Proprietary Fund Type
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Enterprise Fund:
Comparative Balance Sheet F-1 69
Schedule of Revenues, Expenses and Changes in Retained
Earnings — Budget and Actual(Non—GAAP Budgetary
Basis) F-2 70-71
Schedule of Bonds Payable by Maturity Date F-3 72
Schedule of Certificates of Obligation by Maturity Date F-4 73
Fiduciary Fund Types
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Trust and Agency Funds:
Combining Balance Sheet G-1 74
Comparative Statements of Revenues and Changes in Fund
Balance G-2 75
Schedule of Changes in Assets and Liabilities G-3 76
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CITY OF FRIENDSWOOD, TEXAS
ICOMPREHENSIVE ANNUAL FINANCIAL REPORT
Year Ended September 30, 1996
ITABLE OF CONTENTS
Exhibit/
Table Page
FINANCIAL SECTION(continued)
COMBINING, INDIVIDUAL FUND AND ACCOUNT GROUP
STATEMENTS AND SCHEDULES (continued)
I Account Groups
General Fixed Assets:
Comparative Schedules of General Fixed Assets by Source H-1 77
I Schedule of General Fixed Assets by Function and Activity H-2 78-79
Schedule of Changes in General Fixed Assets by Function
and Activity H-3 80
I General Long—Term Debt:
Comparative Schedules of General Long—Term Debt I-1 81
Schedule of Changes in General Long—Term Debt I-2 82-83
I Schedule of General Long—Term Debt Service
Requirements to Maturity I-3 84-85
IUNAUDITED STATISTICAL SECTION
General Government Revenues By Source 1 86-87
General Governmental Expenditures by Function — Last Ten Fiscal
I Years 2 88-89
Property Tax Levies and Collections — Last Ten Fiscal Years 3 90-91
Assessed and Estimated Actual Value of Taxable Property — Last
I Ten Fiscal Years 4 92
Direct and overlapping Property Tax Rates — Last
Ten Fiscal Years 5 93-94
I Tax Rate Distribution — Last Ten Fiscal Years 6 95
Principal Taxpayers 7 96
Revenue Bond Coverage 8 97-98
Ratio of Net General Bonded Debt to Assessed Value and Net
I Bonded Debt Per Capita — Last Ten Fiscal Years 9 99-100
Ratio of Annual Debt Service Expenditures for General Bonded
Debt to Total General Expenditures — Last Ten Fiscal Years 10 101
I Computation of Legal Debt Margin 11 102
Computation of Direct and Overlapping Debt 12 103
Demographic Statistics — Last Ten Fiscal Years 13 104
I Property Value and Construction — Last Ten Fiscal Years 14 105
Schedule of Insurance Coverage 15 106
Texas Municipal Retirement System Analysis of Funding Progress -
Last Ten Calendar Years 16 107-108
ISchedule of Impact Fee Project Changes 17 109-110
Miscellaneous Statistical Data 18 111-112
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°�� ��.°off111 .
`; City of Friendswood
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7'EXA_-
__ � February 20, 1997
To the Honorable Mayor and
Members of the City Council
The comprehensive annual financial report of the City of Friendswood, Texas, for the fiscal year
ended September 30, 1996, is hereby submitted. Responsibility for both the accuracy of the data and
the completeness and fairness of the presentation, including all disclosures, rests with the City. To
the best of our knowledge and belief, the enclosed data is accurate in all material respects and is
reported in a manner designed to present fairly the financial position and results of operations of the
various funds and account groups of the City. All disclosures necessary to enable the reader to gain
an understanding of the City's financial activities have been included.
The comprehensive annual financial report is presented in three sections: introductory,financial,and
statistical. The introductory section includes this transmittal letter, the City's organizational chart,
and a list of principal officials. The financial section includes the general purpose financial
statements and the combining and individual fund and account group financial statements and
schedules, as well as the auditors' report on the financial statements and schedules. The statistical
section includes selected financial and demographic information, generally presented on a
multi—year basis.
The Single Audit Act is not applicable for fiscal year ended September 30, 1996. There are no major
or nonmajor Federal Financial Assistance programs.
The financial reporting entity of the City includes all the funds and account groups of the primary
government. The City of Friendswood does not have any component units for which the City is
financially accountable. Other governmental entities operating in the City include: Friendswood
Independent School District, Clear Creek Independent School District, Galveston County, Harris
County, Clear Creek Drainage District, and Friendswood Volunteer Fire Department. These
entities are legally separate which do not meet the established criteria for inclusion with the City as
the primary governmental reporting entity and,accordingly,are excluded from this report.
The City is involved in two cost sharing projects for the operation of the Blackhawk Regional Waste
Treatment Plant and the Southeast Water Purification Plant with the Gulf Coast Waste Disposal
Authority and the City of Houston, respectively. The City's share of ownership in the Blackhawk
Waste Treatment Plant is 52.47%and the City paid operating and management fees during the year
in the amount of $785,177. The City's share of production pumping cost in the Southeast Water
Purification Plant was 3.75% and the City paid operating fees in the amount of$388,895 during the
year.
The City provides a full range of services, including City administration, traffic planning, inspection
services, municipal court services, and a library. However, the services that affect most citizens on a
day—to—day basis are described as follows:
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Administrative Services • 910 S.Friendswood Dr. • Friendswood,TX 77546-4856 • (713)996-3200 • Fax(713)482-6491
Computer Services • Finance • Human Resources • Municipal Court • Utility Billing
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Water and Sewer
The City provides water and sewer services for residential and commercial locations. Eighteen
employees are responsible for maintaining the system, as well as billing and collecting for the 3
services.
Police
Twenty—four hour coverage is provided by the City's Police Department, which consists of
Administration, Patrol, Investigative, Communications, and Animal Control. A goal of the
department's fifty—five full and part—time personnel is to actively involve the citizens in its
community safety efforts.
Fire
Although the City does not employ its own fire department, it purchases fire trucks and other
equipment for the more than ninety members of the Friendswood Volunteer Fire Department.
The City employs a Fire Marshal, two part—time deputy fire marshals, one full—time fire fighter,
one clerk, and funds six fire fighter, paramedic and emergency medical technician positions
through a pool of part—time employees. The Fire Marshal is responsible for the emergency
management function,as well as fire prevention,education and investigation duties.
Streets I
The street department is responsible for the repair and maintenance of all city streets and
roadside drainage. This department consists of twelve employees.
Sanitation
The City's solid waste services, including curbside pickup of recyclable materials, are contracted
to a private firm. Residential pickup is twice weekly.
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Parks
The parks and recreation department oversees 110.5 acres of parkland, including four tennis 1
courts, a swimming pool, picnic areas and 57.45 acres for future development. The staff consists
of nine full—time employees, as well as part—time and seasonal employees for the swimming
pool, summer camp,sports activities and other park functions.
ECONOMIC CONDITION AND OUTLOOK
The City of Friendswood, Texas, is located 20 miles southeast of downtown Houston in Harris and
Galveston Counties. The City's 1990 census was 22,814. The population is currently estimated at
28,602. The City's economy is linked closely to that of Houston and the Clear Lake area. The Clear
Lake Area Economic Development Foundation is charged with retaining current businesses and
associated jobs,as well as recruiting other corporations to the area.
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In February, 1996, NASA Headquarters announced that it was shifting primary responsibility for
program management of the International Space Station and the space shuttle from NASA
Headquarters to the Johnson Space Center, located in Clear Lake. This shift in authority will bring
economic stability to the region and eventually will bring more jobs to the region.
In addition the encouraging news from NASA, 13 companies have either relocated or expanded
into the Clear Lake region in 1996. These companies will bring more than 350 new jobs to the Clear
Lake area. In addition, since these companies are all from non—aerospace industries, they have
brought added diversification to the Clear Lake region.
MAJOR INITIATIVES
For The Year
During the 1995-96 budget preparation, the City identified several important programs needed to
meet citizens' needs for services and to safeguard the environment, in conformity with applicable
federal and state standards. The following items will provide a summary of these programs.
Streets
1995-96 was the twelfth year of the City's concrete street improvement program. The
following streets were a part of this project: Laurel, Dawn and Mustang Drive. $312,000 was
budgeted for these streets,with the actual cost being$298,993.
The City has also improved several other streets through an interlocal agreement with
Galveston County. These streets include: Oak Drive from FM 518 to Airline; Moore Road
from FM 528 to the Friendswood City Limits; Thomas Drive and Butler Street. The 1995
asphalt street improvement program costs totaled$91,465. Melody Lane,which was originally
a part of the 1992 asphalt street improvement program was also completed, with its cost
totaling$208,523.
The City also completed work on a hike and bike lane along Sunset Drive. This is an
eight—foot—wide asphalt lane on Sunset between FM 528 and Falling Leaf Drive. The cost of
this improvement was$45,616.
Water and Sewer
The City established its infiltration and inflow program in 1991. In fiscal year 1995-96, 280
manholes were repaired and sealed to reduce the amount of rainwater intrusion. The
manhold rehabilitation project has taken place in Wedgewood Village, Village Green, Dunbar
Estates, Whitehall, Annalea and part of Sunmeadow subdivision. Approximately $252,074
was spent on these projects. To continue the program, an additional $125,000 is included in
the 1996-97 budget. Other water and sewer improvements included the following projects:
2,000 feet of the Shady Oaks sanitary sewer line was rehabilitated at a cost of$145,025. The
3 City used the "cured—in—place" process to repair this 18—inch sewer line. This is a
trenchless process that eliminates the more traditional digging and pipe replacement
method.
3 The South Friendswood waterline was completed in November,1995. The project consisted of
installing a new 12—inch waterline from FM 518 to San Miguel at a cost of$332,222.
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A series of wastewater diversions which will redirect flow for more efficient use of our sewer
system was completed in January, 1996. This project consisted of three segments: (1)
diversion of the Tower Estates and Sun Meadow lift station to the San Joaquin lift station;
(2) diversion of Fox Meadows and Falcon Ridge lift stations to a 36—inch sanitary trunk
line;and(3)diversion of Eagle Point and Eagle Lakes lift stations to a 36—inch trunk line.
The total cost was$272,447.
The City contracted with Wayne Smith & Associates and Brown and Gay Engineering for
design of the Rancho Viejo Collection System. This improvement will provide sewer
service to the area of Friendswood extending from Century Oaks subdivision to Rancho
Viejo, at a cost of$938,076. A large property owner is sharing in the cost of this project,
reducing the City's share to$754,525.
The Forest Bend lift station force main rehabilitation was completed in March, 1996,
costing $121,145. This project consisted of installing a new 12—inch force main between
The Park subdivision on FM 528 and the Deepwood lift station.
The wastewater treatment plant,known as the Blackhawk Plant, recently underwent major
modifications to bring the plant into compliance with new EPA mandates. Friendswood
owns over 52 percent of this plant and shares it with three other participants; Municipal
Utiltiy District (MUD) 55, MUD 1 and the City of Houston. Friendswood's share of the
project was$1,728,607.
Other water and wastewater projects include: rehabilitation of three Sun Meadow lift
stations,$180,000; and cleaning and sealing the Deepwood lift station,$52,439.
Parks and Recreation 1
57.45 acres is now available to begin development of the City's new Centennial Park. This
property will be developed into a multipurpose complex that the entire community can enjoy.
The new park will provide a mixture of open space, natural space, recreational facilities and
athletic facilities, including: two playground areas, jogging/walking trail, basketball facilities,
soccer and football fields, park pavilions, concession stand,restrooms and parking. Discussion
is ongoing between the City and the Friendswood Independent School District regarding a
possible interlocal agreement, in which a new FISD Jr. High School would be built on an
adjoining 20 acres. The City and School District would then share facilities and maximize the
use of our citizens'tax dollars. $266,206 was budgeted for development purposes.
For the Future
Streets
The City has budgeted $450,000 for the construction of concrete streets and sidewalks, with
another $50,000 of improvements planned for asphalt streets. In addition, $25,000 in sidewalk
improvements are also planned.
Water and Sewer
A section of 24 inch sanitary sewer lines located along Cowarts Creek was indentified for
repair.The estimated cost of this project is$75,000.
The City has again budgeted $125,000 to fight infiltration and inflow of rainwater into the
sanitary sewer system. Reducing or eliminating this problem will result in less water going to
the Blackhawk waste treatment plant,thus reducing the City's cost of operating the plant.
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Three lift stations located around the golf course in the Sun Meadow subdivision are in need of
major renovation. The City budgeted$60,000 each for this work, for a total of$180,000.
Parks and Recreation
$314,350 was budgeted for development of the Centennial Park complex. The new park will
provide a mixture of open space, recreational and athletic facilities, including. two playground
areas, jogging/walking trail, basketball facilities, soccer and football fields, park pavilions,
concession stand,restrooms and parking.
Phase II of the public library renovation is scheduled for completion in 1996-97. The project
totals $108,824, and will include additional space for the children and reference areas.
Additional study rooms were also added, giving students more access to quiet areas in which
to do research,and complete school projects or homework.
Fire
The need for replacements for Engine number 84 and Rescue 70 was identified. These two
trucks will be replaced with one fire pumper with the necessary tools and equipment to also
perform the functions of Rescue 70. Placing this new pumper at Fire Station#1 will allow the
relocation of two existing pumpers to provide better fire protection in other parts of the City.
$235,052 was budgeted for this purpose in 1996-97. -
DEPARTMENT FOCUS.
Each year the City will select a department to highlight for its efforts and accomplishments. For
1995-96 the Community Services Department has been chosen for review.
The Friendswood Community Services Department (formerly known as the Parks and Recreation
Department) was formed in 1976 through a grant program by the Galveston County CETA
Program. The department has grown from one temporary person to eighteen full—time employees
and ten part—time seasonal employees. The Community Services Department specializes in
presenting community activities for the entire family,and because of this,has been the focal point of
great civic pride over recent years. In addition to maintaining the City's parks and other facilities,the
department is responsible for all City recreation programs and Senior Citizens program,coordinates
a number of special events and operates the Friendswood Public Library.
The Department's most successful program is the Annual Fourth of July Program. The 1995 Fourth
of July Program marked the 100th consecutive annual celebration. Another popular program
administered by the Community Services Department is summer day camp. This program was
developed to provide a quality daytime activity for children who have working parents. The 1996
camp saw 306 children between the ages of five and thirteen enjoy a summer full of exciting outdoor
activities, such as, arts and crafts, hiking, nature, study, map and compass, swimming and values
education.
The Community Services Department is working to ensure the City's park facilities are improved and
expanded to keep pace with the growing community. Development of the newly acquired
Centennial Park property will be a priority for this department in the immediate future. These
programs and new facilities, in addition to the established annual activities, help to enhance the
quality of life for the citizens of Friendswood and the surrounding area.
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FINANCIAL INFORMATION
Management of the City is responsible for establishing and maintaining an internal control structure
designed to ensure that the assets of the City 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 valuation of costs and benefits requires estimates and judgments by
management. I
In addition, the City maintains budgetary controls. The objective of these budgetary controls is to
ensure compliance with legal provisions embodied in the annual appropriated budget approved by
City Council. The City legally adopts annual budgets for the General, Special Revenue, and Debt
Service Funds. Annual and project budgets are also adopted for the Proprietary and Capital Projects
Funds,respectively.
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The level of budgetary control (that is, the level at which expenditures cannot legally exceed the
appropriated amount) is established by department within a fund. The City also maintains an
encumbrance accounting system as one technique of accomplishing budgetary control. Encumbered
amounts lapse at year end. However, encumbrances generally are reappropriated as part of the
following year's budget.
As demonstrated by the statements and schedules included in the financial section of this report,the I
City continues to meet its responsibility for sound financial management.
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General Government Functions
Revenues for general government functions (General, Special Revenue and Debt Service Funds)
totaled approximately $10.2 million in 1995-96, an increase of approximately $289,000 over
1994-95 revenues. The amount of revenue from various sources and the increase (decrease) over
the preceding year are shown in the following tabulation:
Increase
(Decrease)
Amount Percent from 1995
Revenue Source (000's) of Total (000's)
General property taxes $ 5,661 55.4 % $ (205)
Sales taxes 1,439 14.1 410
Franchise taxes 852 8.3 (11)
Sanitation 1,017 9.9 (68)
Fines and forfeitures 354 3.5 88
Donations 128 1.3 (17)
Permits and fees 402 3.9 167
Intergovernmental revenue 40 0.4 (5)
Interest on investments 238 2.3 44
Other revenue 96 0.9 (114)
Total $ 10,227 100.0 % $ 289
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Assessed valuations of approximately $911 million represented an increase of 4.8 percent over the
preceding year. The net taxable assessed valuations are set at 100% of market value as determined
1 by the Galveston County and Harris County Appraisal Districts, less exemptions or abatements. For
the 1996 fiscal year, the City's sales tax rate was increased by .5% and the property tax rate was
reduced by.0474 per$100 valuation to offset the increase in the sales tax rate.As a result,sales taxes
increased and the adjusted tax levy for the 1996 fiscal year of approximately$5.61 million, decreased
by approximately $205,00 or 3.0 percent over the prior year tax levy. Current tax collections of
approximately$5.6 million, or 98.9 percent of the tax levy, are down approximately$149,415 (2.6%)
I from last year. The ratio of total collections (current and delinquent) to the current tax levy was
100.23 percent.
The City had approximately$231,973 in delinquent taxes outstanding as of September 30, 1996 which
I represents 4.13 percent of the current tax levy. Delinquent tax collections were down approximately
$35,135 from the prior fiscal year. However, the percentage of delinquent taxes to current levy also
declined by 0.17 percent.
IAllocations of property tax levy for the 1996 fiscal year and the preceding two fiscal years are as
follows(tax rate per$100 of assessed value):
IPurpose 1995-96 1994-95 1993-94
General Fund $ 0.4680 $ 0.5140 $ 0.5025
General Obligation Debt 0.1476 0.1490 0.1605
ITotal Tax Rate $ 0.6156 $ 0.6630 $ 0.6630
IThe City's sales taxes increased by approximately $410,000. This increase is atributable to the
adoption of an additional .5% sales tax rate and the growth in commercial establishments within the
City. As noted above the property tax revenues decreased as a result of the adoption of additional
Isales tax to reduce the property tax rate.
An increase in new home and commercial construction contributed to an increase in permits and
I fees.Permits and fess increased by approximately$167,000 due to a change in the fee structure and
an increase in residental and commercial development. The total amount of new construction for the
current fiscal year was approximately $42.4 million, up from $34.7 million for 1995-96, an increase
of 22.3 percent.
Expenditures for general government functions (General, Special Revenue and Debt Service Funds)
I totaled approximately$10.01 million in 1995-96,a decrease of approximately$87,000 over 1994-95
expenditures. Increases or (decreases) over the preceding year in the levels of expenditures for
major functions of the City are shown in the following tabulation:
Increase
(Decrease)
Amount Percent from 1995
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Function (000's) of Total (000's)
General Government $ 1,616 16.0 % $ 134
Public Safety 3,330 33.0 124
I Public Works 1,806 17.9 14
Community Development 451 4.5 (13)
Community Services 1,687 16.7 31
I Debt Service 1,202 11.9 (377)
Total $ 10,092 100.0 % $ (87)
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40.
T.
General government expenditures increased by approximately S134,000 due to increases in
expenditures for insurance and personnel. ill i
Public safety expenditures increased by approximately $124,000 or 3.8% over the prior year. A
portion of the increase is due to filling vacant positions and additional personnel cost in the
department. Additionally, the increase in personnel costs and other expenditures was offset by a
decrease in capital acquisitions. This is due to the purchase of vehicles and other equipment in the
prior year that were not required in 1996.Also, $84,000 was due to the acquisition of an ambulance.
Debt Service expenditures decreased byapproximately $377,000. The decrease is due to the notes
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payable for land purchased for Centennial Park being reduced and a reduction in principal and
interest payments for the year.
Fund balances in the major operating funds were maintained at budgeted levels. Net changes in
these fund balances are tabulated below:
(In 000's)
Fund Balance Net Increase Fund Balance
Beginning (Decrease) Ending -
General Fund $ 1,445 $ 176 $ 1,621
Special Revenue Fund 124 13 137
Debt Service Fund 57 241 298
Capital Projects Fund 1,088 (309) 779
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Enterprise Fund Operations
The water and sewer utility operation continued to show gains in number of customers. Comparative
data for the past two fiscal years are presented in the following tabulation:
1996 1995
(000's) (000's)
Operating revenue $ 4,995 $ 4,394
Operating expenses before depreciation 2,731 2,136
Net Revenue Available for Debt Service $ 2,264 $ 2,258
Revenue Bond Debt Service $ 55 $ 156
Coverage(income available for revenueI
bond debt service divided by annual
revenue bond debt service) 41.16 14.47
Number of customers — Sewer 8,382 7,878
Number of customers — Water 8,043 8,210
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Non—Expendable Trust Fund Operation
3 The Non—Expendable Trust Fund is comprised of assets held by the City for the 1776 Park. Activity
in this fund resulted solely from interest earnings during the year. Fund balance was $81,367 as of
September 30, 1996.
Debt Administration
The ratio of net general obligation debt paid from governmental fund resources to assessed valuation
and the amount of bonded debt per capita are useful indicators of the City's debt position to
municipal management,citizens and investors. At year end,these indicators were as follow:
Percent of
Debt to
Assessed Debt per
Description Amount Value Capita
Net direct bonded debt $ 3,919,462 0.43 % $ 137
Overlapping debt 18,754,724 2.06 656
Total Direct and
Overlapping Debt $ 22,674,186 2.49 % $ 793
The City's latest bond issues were rated Aaa by Moody's Investors Service and AAA by Standard and
Poor's. The City did not have any new debt issuances in fiscal year ending 1996. During the year
the City's debt retirements amounted to $963,271 of General Long Term Debt Group debt and
$898,400 of Enterprise Fund debt.
Cash Management
Cash temporarily idle during the year was invested in Texpool and Lone Star Investment Pool
(LSIP). Yields on Texpool ranged from 4.4 percent to 5.7 percent during the year ended
September 30, 1996, the City earned $150,878 from Texpool.The City's investments in LSIP earned
$60,363. The City also invested in US governmental securities, T—Bills and Notes. The City earned
approximately $192,484 on these investments. Interest earned for the year was approximately
$403,725.
The City's investment policy is to minimize credit and market risks while maintaining a competitive
yield on its portfolio. Accordingly, deposits were either insured by federal depository insurance or
collateralized. All collateral on deposits were held by a financial institution's trust department in the
City's name. All investments held by the City during the year end at September 30, 1996 which were
subject to categorization are classified in the category of lowest credit risk as defined by the
Governmental Accounting Standards Board. The investments in Texpool and LSIP are not
evidenced by securities that exist in physical or book entry form and accordingly are not subject to
credit risk categorization.
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Risk Management
The City has a risk management program to protect the City from exposure 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 risk management program encompasses obtaining property
and liability insurance through third party commercial insurance carriers to cover the City for the
various risks of loss.
OTHER INFORMATION 1
Independent Audit
The City Charter requires an annual audit of the financial statements of all of the various funds of
the City by independent certified public accountants. The accounting firm of Null&Associates,P.C.
was selected and their opinion has been included in this report.
Awards
The Government Finance Officers Association ("GFOA") awarded a Certificate of Achievement for
Excellence in Financial Reporting to the City of Friendswood for its comprehensive annual financial
report for the fiscal year ended September 30, 1995. This was the ninth consecutive year that the
City has received this prestigious award. In order to be awarded a Certificate of Achievement, the
City published an easily readable and efficiently organized comprehensive annual financial report.
This report satisfied 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
requirements, and we are submitting it to the GFOA to determine its eligibility for another
certificate.
Acknowledgments
The preparation of this comprehensive annual financial report was made possible by the dedicated i
service of the entire staff of the Administrative Services Department. Each member of the
department has my sincere appreciation for the contributions made in the preparation of this report.
In closing, I also express my thanks to the Mayor, members of the City Council, and the City
Manager for their leadership, interest and support in conducting the financial operations of the City
in a responsible and progressive manner.
Sincerely,
Roger C. Roecker
Director of Administrative Services
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CITY OF FRIENDSWOOD
ORGANIZATION CHART
MAYOR
AND
COUNCIL
APPOINTED FRIENDSWOOD CITY
BOARDS AND VOLUNTEER SECRETARY CITY MUNICIPAL
ATTORNEY
JUDGE CITY
PROSECUTOR
AD HOC FIRE
COMMITTEES DEPARTMENT
CITY MANAGER
ADMINISTRATIVE COMMUNITY POLICE FIRE PUBUC COMMUNITY
SERVICES DEVELOPMENT MARSHAL/ WORKS SERVICES
EMERGENCY
MANAGEMENT
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Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Friendswood,
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.
SCE OFR
0a74FF
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Preside
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Executive Director
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CITY OF FRIENDSWOOD, TEXAS
3 PRINCIPAL OFFICIALS
September 30, 1996
3
Term
City Officials Elective Position Expires
Evelyn B. Newman Mayor May 1997
I
Kitten Hajecate Council Member — Position No. 1 May 1997
IJerry Erickson Council Member — Position No.2 May 1999
Tom Manison Council Member — Position No.3 May 1997
1 Mel Austin Council Member — Position No.4 May 1998
IAline Dickey Council Member — Position No.5 May 1999
Janis Lowe Council Member — Position No.6 May 1998
I
Key Staff Appointive Position
IRonald E. Cox City Manager
IDeloris McKenzie City Secretary
Jon Branson Director of Community Services
IRebecca Carbone Tax Assessor—Collector
Douglas K.Kneupper Community Development Director
IMelvin L.. Meinecke Director of Public Works
IOlson&Olson City Attorney
Mary Perroni Library Director
ITerry Byrd Fire Marshal/Emergency Management Coordinator
Roger C. Roecker Director of Administrative Services
IJared D.Stout Police Chief
IJames W.Woltz Judge — Municipal Court
1 13
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11,1 r131 NM MEI OEN INN NM IAN
Null&Associates Houston Fort Bend County
Professional Corporation 11 Greenway Plaza,Suite 1515 One Sugar Creek Center Blvd.,Suite 1150
Ce e Public Accountants Houston,Texas 77046 Sugar Land,Texas 77478
Cl1rUU (713)621-1515•FAX:621-1570 (281)242-8600•FAX:242-7333
Independent Auditors' Report
To the Honorable Mayor and
Members of the City Council
City of Friendswood,Texas
3
We have audited the accompanying general purpose financial statements of the City of Friendswood,
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
Iaudit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the general
purpose financial statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the general purpose financial
statements. An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall general purpose 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 Friendswood,Texas, as of September 30, 1996,
and the results of its operations and the cash flows of its proprietary fund type and non—expendable
trust fund for the year then ended in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the general purpose financial
statements taken as a whole. The combining, individual fund and account group financial statements
and schedules 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 Friendswood, Texas.
Such information has been subjected to the auditing procedures applied in the audit of the general
1 purpose financial statements and, in our opinion, is fairly presented in all material respects in
relation to the general purpose financial statements taken as a whole.
--)1 u1 >1 45 ,c .
Houston,Texas
January 24, 1997
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CITY OF FRIENDSWOOD, TEXAS t1�A
COMBINED BALANCE SHEET —
ALL FUND TYPES AND ACCOUNT GROUPS
September 30, 1996
Governmental Fund Types
Special Debt Capital
General Revenue Service Projects
Assets and Other Debits
Assets
Cash and cash equivalents $ 1,039,380 $ 52,793 $ 113,587 $ 307,414
Investments 1,648,831 84,258 181,283 490,394
Receivables
Taxes 170,863 61,110
Customer accounts 154,745
Interest 28,947 3,183 8,609
Other 43,897 1,479
Investments with fiscal agent
Due from other governments 52,313
Due from other funds 44,037
Inventory 8,195
Prepaids and other assets 44,715 2,383
Restricted cash and investments
Fixed Assets:
General Fixed Assets
Enterprise system property,plant
and equipment at cost,less
accumulated depreciation
Non—expendable trust assets
Other Debits2
Amount available for debt service
Amount to be provided for retirement
of general long—term debt
Total Assets and Other Debits $ 3,235,923 $ 138,530 $ 359,163 $ 808,800
I
See Notes to Financial Statements.
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15 i
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Exhibit A-1
Page 1 of 2
3
Proprietary Fiduciary Totals
Fund Type Fund Type Account Groups (Memorandum Only)
Trust and General General Long- September 30, September 30,
Enterprise Agency Fixed Assets Term Debt 1996 1995
$ 559,853 $ 9,208 $ $ $ 2,082,235 S 6087,827
676,694 14,701 3,096,161
231,973 263,532
685,549 840,294 914,102
1 17,951 258 58,948
21 45,397 61,113
729,374 729,374 586,995
I
81,250 52,313
125,287 19,794
8,195
72,272 119,370 176,962
346,026 346,026 179,637
28,049,373 28,049,373 27,967,545
24,397,084 24,397,084 25,509,719
57,200 57,200
I
298,053 298,053 56,968
1 4,320,476 4,320,476 5,326,980
$ 26,836,700 S 810,741 S 28,049,373 S 4,618,529 $ 64,857,759 S 67,151,174
I
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1 16
CITY OF FRIENDSWOOD, TEXAS is
Z
COMBINED BALANCE SHEET —
ALL FUND TYPES AND ACCOUNT GROUPS in
I
September 30, 1996
Governmental Fund Types
Special Debt Capital
General Revenue Service Projects
Liabilities, Equity, and Other Credits
Liabilities
Accounts payable $ 370,217 $ 1,485 $ $ 29,864
Accrued liabilities 186,784
Compensated absences 683,097
Customer deposits
Deferred revenue 293,590 61,110
Deferred compensation benefits payable
Bonds payable
Certificates of obligation payable
Notes payable
Obligations under capital leases
Due to other funds 81,250
Accretion on premium compound interest
bonds
Total Liabilities 1,614,938 1,485 61,110 29,864
Equity and Other Credits
Investment in general fixed assets
Contributed capital
Retained earnings
Fund Balances
Reserved for encumbrances 62,343 227,493
Reserved for inventory 8,195
Reserved for debt services 298,053
Reserved for prepaids and other 44,715
Unreserved:
Designated 900,000 137,045 551,443
Undesignated 605,732
Total Equity and Other Credits 1,620,985 137,045 298,053 778,936
Total Liabilities,Equity,and
Other Credits $ 3,235,923 $ 138,530 $ 359,163 $ 808,800
See Notes to Financial Statements.
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17
a
tt Exhibit A-1
Page 2 of 2
1
Proprietary Fiduciary Totals
Fund Type Fund Type Account Groups (Memorandum Only)
Trust and General General Long- September 30, September 30,
Enterprise Agency Fixed Assets Term Debt 1996 1995
I
$ 286,798 S $ $ $ 688,364 S 1,039,437
98,122284
,906
74,578 757,675 802,211
171,055 171,055 184,523
354,700 371,732
729,374 729,374 586,995
4,925,301 1,835,477 6,760,778 7,895,778
1 6,170,000 2,100,000 8,270,000 8,630,000
181,805 181,805 384,642
219,209 219,209 223,043
44,037 125,287 19,794
230,758 282,038 512,796 443,975
12,000,649 729,374 4,618,529 19,055,949 20,582,130
28,049,373 28,049,373 27,967,545
11,761,849 11,761,849 13,140,148
3,074,202 3,074,202 2,658,169
67,200 357,036 215,948
I 8,195
298,053
44,715
111
14,167 1,602,655 2,133,625
11 05,732 453,609
14,836,051 81,367 28,049,373 45,801,810 46,569,044
S 26,836,700 $ 810,741 S 28,049,373 $ 4,618,529 S 64,857,759 $ 67,151,174
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18
CITY OF FRIENDSWOOD, TEXAS1100
COMBINED STATEMENT OF REVENUES,EXPENDITURES, AND
CHANGES IN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES
Year Ended September 30, 1996
Governmental Fund Types
Special Debt Capital
General Revenue Service Projects
Revenues
Property taxes S 4„303,607 S S 1,357,090 S
Sales taxes 1,439,030
Franchise fees 852,091
Sanitation 1,017,028
Fines and forfeitures 353,742
Permits and fees 401,720
Donations 10,087 118,172 2,050
Intergovernmental 40,055 9,184
Interest on investments 202,771 5,624 29,614 41,112
Other 95,172 666 60,966
Total Revenues 8,715,303 124,462 1,386,704 113,312
Expenditures
Current:
General government 1,615,770
Public safety 3,238,069 91,891
Public works 1,805,947
Community development 450,916
Community services 1,658,465 28,444
Capital outlay 912,833
Debt Service:
Principal retirement 963,272
Interest and fiscal charges 238,920
Total Expenditures 8,769,167 120,335 1,202,192 912,833
Revenues Over (Under)
Expenditures (53,864) 4,127 184,512 (799,521)
Other Financing Sources (Uses)
Operating transfers in 229,460 56,573 390,152
Operating transfers(out) (840) (59,823)
Proceeds from sale of equipment 9,600
Proceeds from issuance of debt 160,000
Total Other Financing
Sources (Uses) 229,460 8,760 56,573 490,329
Revenues and Other Financing Sources
Over (Under) Expenditures
and Other Financing (Uses) 175,596 12,887 241,085 (309,192) 1
Fund balances- Beginning 1,445,389 124,158 56,968 1,088,128
Fund Balances - Ending $ 1,620,985 S 137,045 S 298,053 S 778,936_
114
See Notes to Financial Statements. il
19
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IExhibit A-2
I
ITotals
(Memorandum Only)
September 30, September 30,I
1996 1995
S 5,660,697 S 5,865,855
1 1,439,030 852,091 1,028,528
863,183
1,017,028 1,085,149
353,742 266,287
I 401,720 234,518
130,309 151,411
49,239 325,399
279,121 269,455
156,804 268,684
10,339,781 10,358,469
I
1,615,770 1,481,710
3,329,960 3,206,222
I 1,805,947 1,792,014
450,916 463,813
1,686,909 1,656,146
1 912,833 2,400,940
963,272 1,184,592
238,920 394,898
1 11,004,527 12,580,135
I (664,746) (2,221,866)
676,185 2,060,943
I (60,663)9,600 (447,957)
160,000 117,176
I785,122 1,730,162
I120,376 (491,704)
2,714,643 3,206,347
S 2.835.019 S 2.714.643
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1 20
CITY OF FRIENDSWOOD, TEXAS S
COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES - BUDGET(GAAP BASIS) AND ACTUAL
GENERAL, SPECIAL REVENUE, AND DEBT SERVICE FUNDS
Year Ended September 30, 1996
General Fund
Variance
Favorable
Budget Actual (Unfavorable)
Revenues
Property taxes $ 4,301,223 $ 4,303,607 $ 2,384
Sales taxes 1,371,590 1,439,030 67,440
Franchise fees 826,574 852,091 25,517
Sanitation 1,029,935 1,017,028 (12,907)
Fines and forfeitures 232,088 353,742 121,654
Permits and fees 283,555 401,720 118,165
Donations 7,280 10,087 2,807
Intergovernmental 34,654 40,055 5,401
Interest on investments 156,500 202,771 46,271
Other 73,112 95,172 22,060
Total Revenues 8,316,511 8,715,303 398,792
Expenditures
Current:
General government 1,772,988 1,615,770 157,218
Public safety 3,231,676 3,238,069 (6,393)
Public works 1,841,310 1,805,947 35,363
Community development 466,074 450,916 15,158
Community services 1,692,506 1,658,465 34,041
Debt Service:
Principal retirement
Interest and fiscal charges
Total Expenditures 9,004,554 8,769,167 235,387
Revenues Over (Under)Expenditures (688,043) (53,864) 634,179
Other Financing Sources (Uses)
Operating transfers in 229,460 229,460
Operating transfers(out)
Proceeds from the sale of equipment
Proceeds from issuance of long-term debt
Total Other Financing
Sources (Uses) 229,460 229,460
Revenues and Other Financing Sources Over
(Under) Expenditures and Other
Financing(Uses) (688,043) 175,596 863,639
Fund balances- Beginning 1,445,389 1,445,389
Fund Balances - Ending S 757 346 S 1,620.985 S 863.639
See Notes to Financial Statements.
21
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41
I)
Ili Exhibit A-3
I
Special Revenue Fund Debt Service Fund
Variance Variance
Favorable Favorable
Budget Actual (Unfavorable) Budget Actual (Unfavorable)
$ $ $ $ 1,358,055 $ 1,357,090 $ (965)
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125,252 118,172 (7,080)
2,525 5,624 3,099 16,221 29,614 13,393
10,000 666 (9,334)
137,777 124,462 (13,315) 1,374,276 1,386,704 12,428
I
103,969 91,891 12,078
1,928 28,444 (26,516)
1,137,273 963,272 174,001
252,097 238,920 13,177
105,897 120,335 (14,438) 1,389,370 1,202,192 187,178
31,880 4,127 (27,753) (15,094) 184,512 199,606
56,573 56,573
(840) 840)
, 600 9 600 (5,000)
1 3,760 8,760 (5,000) 56,573 56,573
35,640 12,887 (22,753) 41,479 241,085 199,606
124,158 124,158 56,968 56,968
41
41 $ 159.798 $ 137.045 $ (22,753) $ 98,447 $ 298,053 $ 199,606
fil
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IP 22
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2
CITY OF FRIENDSWOOD, TEXAS w
COMBINED STATEMENT OF REVENUES,EXPENSES,AND
CHANGES IN RETAINED EARNINGS/FUND BALANCE — 10
PROPRIETARY FUND TYPE AND NON—EXPENDABLE TRUST FUND
Year Ended September 30, 1996
Proprietary Fiduciary
Fund Type Fund Type
Non—Expendable
Enterprise Trust
Operating Revenues
Water charges S 2,796,977 S
Sewer charges 1,919,924
Fees and penalties 114,460
Other 163,758
Interest on investments 1,428
Total Operating Revenues 4,995,119 1,428
Operating Expenses
Water operations 989,535
Sewer operations 1,325,931
Operation administration 100,825
Finance administration 208,935 8,600
Computer services 5,403
Insurance 42,077111
Engineering 58,013
Depreciation 873,217
Total Operating Expenses 3,603,936 8,600
Operating Income (Loss) 1,391,183 (7,172)
Nonoperating Revenues (Expenses)
Interest revenue 124,604
Impact fees 241,725
Gain on sale of property 1,317
Interest expense (727,274)
Total Nonoperating
Revenues (Expenses) (359,628)
Income (Loss) Before Operating Transfers 1,031,555 (7,172)
Operating Transfers In (Out)
Operating transfers(out) (615,522)
Net Income (Loss) 416,033 (7,172)
Retained earnings/Fund balance— Beginning of Year 2,658,169 88,539
Retained Earnings/Fund Balance — End of
Year S 3,074.202 S 81367
See Notes to Financial Statements.
23 i
0
Exhibit A-4
ilio
Totals
(Memorandum Only)
September 30, September 30,
1996 1995
$ 2,796,977 $ 2,690,353
1,919,924 1,574,347
I 114,460 107,204
163,758 22,385
1,428 1,485
I4,996,547 4,395,774
I 989,535 766,975
1,325,931 990,890
100,825 97,627
217,535 191,740
5,403 6,047
42,077 25,980
58,013 55,968
873,217 744,370
I
3,612,536 2,879,597
1,384,011 1,516,177
124,604 152,306
I 241,725
1,317
(727,274) (361,359)
(359,628) (209,053)
1,024,383 1,307,124
(615,522) (1,612,986)
I408,861 (305,862)
2,746,708 3,052,570
$ 3.155,569 $ 2.746.708
24
III
CITY OF FRIENDSWOOD, TEXAS IP
COMBINED STATEMENT OF CASH FLOWS —
PROPRIETARY FUND TYPE AND NON—EXPENDABLE TRUST FUND
Year Ended September 30, 1996 l
Proprietary Fiduciary
Fund Type Fund Typo
Non—Expendable
Enterprise Trust
Cash Flows from Operating Activities
Operating Income (Loss) $ 1,391,183 $ (7,172)
Adjustments to Reconcile Operating
Income (Loss) to Net Cash
Provided(Used) by Operating Activiites:
Depreciation and amortization 873,217
(Increase)Decrease in accounts receivable 54,184
(Increase)Decrease in due from other funds (81,250) I
(Increase)Decrease in prepaids and other assets 18,254
Increase(Decrease)in accounts
payable and accrued liabilities 74,495
Increase(Decrease) in due to other funds 44,037
Increase(Decrease)in customer deposits (13,468)
Increase(Decrease)in compensated absences (8,743)
Net Cash Provided (Used) by
Operating Activities 2,351,909 (7,172)
Cash Flows from Noncapital Financing Activities
Operating transfers (out) (615,522)
Net Cash (Used) by Noncapital
Financing Activities (615,522)
Cash Flows from Capital and Related Financing
Activities
Contributed capital
Impact fees 241,725
Capital expenditures for property,plant,
and equipment (1,234,320)
Proceeds from the sale of equipment 1,317
Issuance of long—term debt
Principal payments on long—term debt (898,400)
Interest payments on long—term debt (661,133)
Net Cash(Used) by Capital and Related
Financing Activities (2,550,811)
Cash Flows from Investing Activities
Purchase of investments (673,627) (14,632)
Interest on investments 124,604 (327) v
Net Cash(Used) by Investing Activities (549,023) _ (14,959)
Net Increase (Decrease) in Cash
and Cash Equivalents (1,363,447) (22,131)
Cash and cash equivalents,beginning of year 2,269,326 31,339
Cash and Cash Equivalents, End of Year $ 905.879 $ 9208
Unrestricted cash and cash equivalents $ 559,853 $ 9,208
Restricted cash and cash equivalents 346,026
Cash and Cash Equivalents, End of Year $ 905,879_ $ 9.208
See Notes to Financial Statements.
25 1
•
.. Exhibit A-5
1 Totals
(Memorandum Only)
September 30, September 30,
1996 1995
3 $ 1,384,011 $ 1,516,177
3
873,217 744,370
54,184 (96,661)
I (81,250)
18,254 (37,052)
74,495 (94,845)
44,037
(13,468) 19,673
(8,743) 11,265
2,344,737 2,062,927
(615,522) (1,612,986)
(615,522) (1,612,986)
I
167,438
241,725
(1,234,320) (2,852,286)
1,317
3,200,000
(898,400) (375,000)
(661,133) (361,359)
(2,550,811) (221,207)
(688,259)
I 124,277 152,306
(563,982) 152,306
1 (1,385,578) 381,040
2,300,665 1,919,625
$ 915,087 $ 2300.665
$ 569,061 2,121,028
346,026 179,637
f $ 915.087 2300.665
26
CITY OF FRIENDSWOOD, TEXAS
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3 The City of Friendswood, Texas (the City), was incorporated on October 15, 1960. The City charter
provides for a City Council—City Manager form of government.The Mayor and six Council Members are
elected from the City at large serving three year terms. Currently,the City charter provides for a Council
Iterm limitation of three terms.
The City Council is the principal legislative body of the City. The City Manager is appointed by a
majority vote of the City Council and is responsible to the Council for the administration of all the affairs
I of the City. The City Manager is responsible for law enforcement, appointment and removal of
department directors and employees,supervision and control of all City departments, and preparation of
the annual budget. The Mayor presides at meetings of the City Council and can vote.
I The City provides the following services: public safety, streets, parks and recreation, library, water and
sewer,sanitation, planning and zoning,building inspection,code enforcement,and general administrative
services.
I
A. Reporting Entity
P° g
I The City is an independent political subdivision of the State of Texas governed by an elected six
member council and a mayor and is considered a primary government. As required by generally
accepted accounting principles, these general purpose financial statements have been prepared based
on considerations regarding the potential for inclusion of other entities,organizations,or functions as
part of the City's financial reporting entity. Based on these considerations, no other entities have been
included in the City's reporting entity. Additionally, as the City is considered a primary government
for financial reporting purposes, its activities are not considered a part of any other governmental or
Iother type of reporting entity.
Considerations regarding the potential for inclusion of other entities,organizations,or functions in the
I City's financial reporting entity are based on criteria prescribed by generally accepted accounting
principles. These same criteria are evaluated in considering whether the City is a part of any other
governmental or other type of reporting entity. The overriding elements associated with prescribed
criteria considered in determining that the City's financial reporting entity status is that of a primary
I government are that it has a separately elected governing body; it is legally separate;and it is fiscally
independent of other state and local governments. Additional prescribed criteria under generally
accepted accounting principles include considerations pertaining to organizations for which the
I primary government is financially accountable; and considerations pertaining to 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.
I As indicated in Note 13, the City participates in a joint venture (Blackhawk Regional Waste
Treatment Plant) with three other entities, under the authority of the Gulf Coast Waste Disposal
Authority. This venture is accounted for under the equity method in the City's Enterprise Fund.
I
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27
CITY OF FRIENDSWOOD, TEXAS
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
B. Fund Accounting
The accounts of the City are organized on the basis of funds or account groups, each of which is
considered to be a separate accounting entity. The operations of each fund are accounted for by
providing a set of self—balancing accounts which consist of each fund's assets, liabilities, fund equity,
revenues, and expenditures or expenses, as appropriate. The following paragraphs describe the
various fund types and account groups.
Governmental Fund Types
General Fund(Budgeted)
The General Fund accounts for the resources used to finance all the operations of the City not
properly includable in other funds. The principal sources of revenue of the General Fund include
property taxes, sales and use taxes, franchise taxes, fines and forfeitures, permits and fees, and
charges for sanitation services. Expenditures include general government, public safety, public
works,community development,and community services.
Special Revenue Funds(Budgeted)
The Special Revenue Funds are used to account for the proceeds of specific revenue sources that
are legally restricted or designated for specified activities.
Debt Service Fund(Budgeted)
The Debt Service Fund is used to account for the accumulation of resources for the retirement of
general long—term debt and related costs. The primary source of revenue of the Debt Service
Fund is property taxes.
Capital Projects Funds(Unbudgeted)
The Capital Projects Funds are used to account for the financial resources to be used for the
acquisition or construction of major capital facilities financed principally by proceeds of long—term
debt. Capital Project Funds are budgeted on a project rather than an annual basis.
Proprietary Fund Type (Unbudgeted)
Enterprise Fund
The Enterprise Fund is used to account for the operations that provide water and wastewater
utility services to the public. These services are financed and operated in a manner similar to
private business enterprises where the intent of the Council is that costs (expenses, including
depreciation) of providing goods or services to the general public on a continuing basis will be
financed or recovered primarily through user charges. Proprietary fund types follow generally
accepted accounting principles prescribed by the Governmental Accounting Standards Board
(the GASB), and all Financial Accounting Standards Board's standards issued prior to November
30, 1989. Subsequent to this date, the City accounts for its proprietary funds as presented by the
GASB.
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28
3 CITY OF FRIENDS WOOD, TEXAS
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING PO
LICIES (continued)
B. Fund Accounting(continued)
Fiduciary Fund Types (Unbudgeted)
Trust Fund
The Non—Expendable Trust Fund (1776 Park) is used to account for assets held by the City in a
trustee capacity or as an agent for individuals, private organizations, other governments and/or
other funds. This fund is accounted for on the same basis as proprietary funds.
Agency Fund
The Agency Fund(Deferred Compensation Fund) is used to account for assets held for employees
in accordance with the provisions of Internal Revenue Code Section 457. The Agency Fund is
custodial in nature (assets equal liabilities) and does not involve measurement of results of
operations.
Account Groups
General Fired Assets
The General Fixed Assets Account Group is used to account for the City's land, buildings,
improvements,and equipment,except those recorded in proprietary and fiduciary fund types.
General Long—Term Debt
This account group is used to account for the City's liability for general obligation bonds,
certificates of obligation, notes payable, and capital leases which are payable from governmental
fund resources. The debt is offset by the amount available in the Debt Service Fund and the
amount to be provided in future years.
C. Basis of Accounting
The basis of accounting is the method by which revenues and expenditures or expenses are recognized
in the accounts and reported in the financial statements. The accounting and financial reporting
treatment applied to a fund is determined by its measurement focus. All Governmental Fund Types
are accounted for using a current financial resources measurement focus. With this measurement
focus,only current assets and current liabilities generally are included on the balance sheet. Operating
statements of these funds present increases (i.e., revenues and other financing sources) and decreases
(i.e.,expenditures and other financing uses)in net current assets.
The Proprietary Fund Type and the Non—expendable Trust Fund are accounted for on a flow of
economic resources measurement focus. With this measurement focus, all assets and liabilities
associated with the operation of this fund are included on the balance sheet. Fund equity (i.e., net
total assets) is segregated into contributed capital and retained earnings components. Operating
statements for these funds present increases (i.e., revenues)and decreases (e.g.,expenses) in net total
assets.
29
CITY OF FRIENDSWOOD, TEXAS
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
C. Basis of Accounting(continued)
The modified accrual basis of accounting is used by the Governmental Fund Types and Agency Fund.
Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual,
i.e., 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. Most types of revenue are recorded as revenues when
received in cash because they are generally not measurable until actually received. Revenues
susceptible to accrual are property taxes, franchise taxes, sales taxes, licenses, interest revenues, and
charges for services. Property taxes, sales taxes, and franchise taxes collected after the fiscal year end
which should be available to finance current operations are immaterial and remain deferred. Fines
and permits are not susceptible to accrual because generally they are not measurable until received.
Investment earnings are recorded as earned since they are measurable and available.
Under the modified accrual basis of accounting, expenditures (including capital outlay) are recorded
when the liability is incurred, except for general obligation debt principal and interest which are
recorded when paid rather than when incurred.
The Proprietary Fund Type and Non—expendable Trust Fund are accounted for using the accrual
basis of accounting, whereby revenues are recognized in the period in which they are earned and
expenses are recognized in the period in which they are incurred. I
D. Budgets
Procedures in establishing budgetary data reflected in the financial statements are as follows:
1. On or before the first day of August of each year, the City Manager shall submit to the Council a
proposed budget and an accompanying message. The Council shall review the proposed budget
and revise as deemed appropriate prior to general circulation for public hearing.The Council shall
adopt the budget by ordinance on one reading on or before the 15th day of September or as soon
thereafter as practical. Adoption of the budget shall require an affirmative vote of at least a
majority of all members of the Council. Adoption of the budget shall constitute appropriations of
the amounts specified therein as expenditures from the funds indicated. If, during the fiscal year,
the City Manager certifies that there are funds available for appropriation, revenues in excess of
those estimated in the budget, the Council may make supplemental appropriation for the year up
to the amount of such excess.
2. At any time during the fiscal year, the City Manager may transfer part or all of any unencumbered
appropriation balance among programs within a department, division, or office, and, upon written
request by the City Manager, the Council may by ordinance transfer part or all of any
unencumbered appropriation balance from one department,office,or agency to another.
3. Limitations: No appropriation for debt service may be reduced or transferred and no
appropriation may be reduced below any amount required by law to be appropriated or by more
than the amount of the unencumbered balance thereof.
30 1
3
CITY OF FRIENDSWOOD, TEXAS
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3 D. Budgets(continued)
4. Lapse of Appropriations: Every appropriation, except an appropriation for a capital expenditure,
shall lapse at the close of the fiscal year to the extent that it has not been expended or encumbered.
An appropriation for a capital expenditure shall continue in force under the purpose for which it
was made until it has been accomplished or abandoned. The purpose of any such appropriation
shall be deemed abandoned if three years pass without disbursement from or encumbrance of the
appropriation.
5. Annual appropriations budgets are adopted for the General, Special Revenue, and Debt Service
Funds and are prepared on a basis consistent with generally accepted accounting principles
(GAAP) at the departmental level, the legal level of budgetary control. An annual
non—appropriated budget is adopted for the City's Water and Sewer Enterprise Fund on a
non—GAAP basis for managerial control. Project length budgets are adopted for Capital Projects
Funds and amended on an annual basis to reflect the uncompleted portion of the projects.
6. Encumbrances represent commitments related to unperformed contracts for goods or services.
Encumbrance accounting — under which purchase orders, contracts, and other commitments for
the expenditure of resources are recorded to reserve that portion of the applicable appropriation
— is utilized in the governmental funds. Encumbrances outstanding at year end are reported as
reservations of fund balances and do not constitute expenditures or liabilities because the
commitments will be honored during the subsequent year. Encumbrances that lapse are
reappropriated in the ensuing years budget.
Budget amendments were adopted for various funds during the year to increase expenditures and
other uses. The amounts reported in the accompanying financial statements represent the original
budgeted amounts plus all supplemental appropriations.
During the 1996 fiscal year,expenditures exceeded appropriations at the departmental level(the legal
level of compliance) in the General Fund — Public Safety by $6,393 and the Centennial Special
Revenue Fund by S26,516.
E. Cash and Temporary Investments
All investments are stated at cost which approximates market value except for assets in a deferred
compensation plan which are stated at market value. The City holds all investments until maturity
I date.
The City maintains a pooled cash and investments account for all funds of the City. Each fund's
positive equity in the pooled cash account is presented as "Cash and Cash Equivalents" in the
financial statements. Negative equity balances have been reclassified and are reflected as interfund
accounts payable. Interest income and interest expense are allocated to each respective individual
fund monthly based on their respective fund balances.
For the purpose of the Statement of Cash Flows, all highly liquid temporary investments and
investments with a maturity of three months or less when purchased are considered to be cash
equivalents.
31
I
CITY OF FRIENDS WOOD, TEXAS
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
3
NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
F. Interfund Transactions
Interfund transactions that would be treated as revenues, expenditures, or expenses if they involved
organizations external to the governmental unit are accounted for as revenues, expenditures, or
expenses in the funds involved. Transactions which constitute reimbursements of a fund for
expenditures or expenses initially made from that fund which are properly attributable to another
fund are recorded as expenditures or expenses in the reimbursing fund and primarily as reductions of
the expenditure or expense in the fund that is reimbursed.
Non—recurring or non—routine transfers of equity between funds are reported as additions to or
reductions of the fund balance of Governmental Funds. Transfers of equity to the Enterprise Fund
are treated as contributed capital, and such transfers from the Enterprise Fund are reported as
reductions of retained earnings or contributed capital, as is appropriate in the circumstances. All
other legally authorized transfers are treated as operating transfers and are included in the results of
operations of both the Governmental and Proprietary Fund Types.
G. Fund Equity
Contributed capital is recorded in the Enterprise Fund which has received capital grants,
contributions from developers and customers,and/or other funds of the City. Reserved fund balances
represent those portions of fund balance not appropriable for expenditure or legally segregated for a
specific future use. Designated fund balances represent management's tentative plans for future use
of financial resources.
H. Compensated Employee Absences I
The City's employees earn vacation and sick leave which may either be taken or accumulated, up to
certain amounts,until paid upon termination or retirement.
The City accrues vacations and sick leave based on criteria established by the Governmental
Accounting Standards Board. For all funds, this liability reflects amounts attributable to cumulative
employee services previously rendered, where the payment is probable and can be reasonably
estimated. The liability for accumulated vacation and sick leave, as of September 30, 1996, has been
recorded in the General and Enterprise Funds since the liability is to be liquidated with expendable
available resources.
I. Encumbrances
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the
expenditure of funds are recorded in the accounting system in order to reserve the portion of the
applicable appropriation, is employed in the governmental funds. Appropriations lapse at fiscal
year—end. Encumbrances which have not been liquidated are reported as reservations of fund
balances since they do not constitute expenditures or liabilities.
J. Inventories
Inventories are recorded in the General and Enterprise Funds and are stated at cost, using the
first—in, first—out method. Inventories consist of expendable supplies held for consumption, and the
cost thereof is recorded as an expense/expenditure at the time the inventory items are issued
(Consumption method).
32
3 CITY OF FRIENDSWOOD, TEXAS
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
3
NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3 K. Fixed Assets
General Fixed Assets
General fixed assets have been acquired or constructed for general governmental purposes. Such
fixed assets are recorded as expenditures in the Governmental Funds and capitalized at historical cost
in the General Fixed Assets Account Group. Gifts or contributions of general fixed assets are
recorded at estimated fair market value upon receipt. 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 capitalized as general fixed
assets. No depreciation has been provided on general fixed assets.
Enterprise Fund Fixed Assets
The land,buildings, and equipment owned by the Enterprise Fund are recorded at historical cost or at
estimated fair market value for contributed assets. Interest costs during construction are capitalized
when the effects of capitalization materially impact the financial statements. Some of the assets on
which such interest was capitalized are still under construction and are classified as construction in
progress in the Enterprise Fund. Depreciation of buildings and equipment is provided using the
straight—line method over the following estimated useful lives:
Years
Water and sewer system 40-50
Equipment 5-10
Additions to the water and sewer systems are financed principally from sources other than Enterprise
Fund operating revenues such as long—term debt and contributed capital. The costs of normal
maintenance and repairs are charged to operations as incurred. Improvements and betterments which
extend the useful lives of the assets are capitalized.
L. Total Columns on Combined Statements
Total columns presented in the combined financial statements are captioned(Memorandum Only) to
indicate that they are presented only to facilitate financial analysis. Data in these columns do not
represent financial position, results of operations, or cash flows on a consolidated basis in conformity
with generally accepted accounting principles. Interfund eliminations have not been made in the
aggregation of this data. Certain reclassifications have been made to the prior year totals to conform
with the current year presentation.
M.Estimates
The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date of financial statements and
the reported amounts of revenues and expenditures during the reporting period.Actual results could
differ from those estimates.
33
a
CITY OF FRIENDSWOOD, TEXAS
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 2 — CASH AND INVESTMENTS
Cash
The City's cash and investments are classified as: cash and cash equivalents, investments, and
restricted cash and investments. The cash and cash equivalents include cash on hand, deposits with
financial institutions, short term investments in a state—managed public funds investment pool
account (Texpool), and a privately—managed public funds investment pool (Lone Star). The
Investments, which have maturities at purchase of greater than three months, consist mainly of US
government treasury bills, treasury notes and other US government obligations. The restricted cash
and investments are the assets restricted for specific use.The restricted cash includes cash on deposit
with financial institutions,Texpool and cash for the Blackhawk operations of$346,026.
Cash and cash equivalents consisted of:
' Carrying Market
Amount Value
Cash on hand $ 34,600 $ 34,600
Petty cash 2,859 2,859
Blackhawk operating 191,763 191,763
Texpool 1,175,662 1,175,662
Lone Star Investment Pool 1,023,377 1,023,377
Total cash and cash equivalents 2,428,261 2,428,261
Less restricted cash and cash equivalents 346,026 346,026
Unrestricted cash and cash equivalents $ 2.082.235 $ 2.082,235
Credit Risk Categorization for Deposits
Cash deposits held at financial institutions can be categorized according to three levels of risk. These
three levels of risk are:
Category 1 — Deposits which are insured or collateralized with securities held by the City or
by its agent in the City's name.
Category 2— Deposits which are collateralized with securities held by the pledging financial
institution's trust department or agent in the City's name.
Category 3— Deposits which are not collateralized or collateralized with securities held by the
pledging financial institution or by its trust department or agent but not in the
City's name.
At September 30, 1996,the carrying amount of the City's cash deposited in bank was S34,600 of which
all is covered by federal depository insurance. For seven days during the year due to large tax receipts,
the deposits were not collateralized in accordance with state law. The City did not suffer any losses
during this period.During the year,cash deposited in the bank were under category 2 above.
The TexPool and Lone Star amounts of$1.2 million and S1 million, respectively, are not evidenced
by securities that exist in physical or book entry form and, accordingly are not categorized by risk.
However, the nature of these funds requires that they be used to purchase investments authorized by
the Public Funds Investment Act of 1995. The primary objective of these investment pools is to
provide a safe environment for the placement of public funds in short—term, fully collateralized
investments.
34
3
CITY OF FRIENDSWOOD, TEXAS
3 Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 2 — CASH AND INVESTMENTS (continued)
Investments
Under provisions of state and local statutes, the City's investment policies, and provisions of the City's
depository contracts with an area financial institution, the City is authorized to place available
Ideposits and investments in the following:
1. Obligations of the U.S.,its agencies and instrumentalities,
I 2. Certificates of Deposit issued by state and national banks or savings or loan associations
domiciled in this state that are:
—guaranteed or insured by the Federal Deposit Insurance Corporation;
I or
—collateralized in accordance with Section 2256.010, the Texas Government Code, in face
amount not to exceed$100,000,
I3. No—load money market mutual funds,
4. Texas Local Government Investment Pool, Lone Star Investment Pool, and the Local
Government Investment Cooperative (LOGIC).
I
City council has adopted a written investment policy regarding the investments of its funds as defined
I by the Public Funds Investment Act of 1995 (Chapter 2256, Texas Government Code). The
Investments of the City are in compliance with the council's investment policies. The City did not
have any derivative investment products during the current year. All significant legal and contractual
provisions for investments were complied with during the year. Investments at year end are
Irepresentative of the types of investments maintained by the City during the year.
The carrying amounts and market values of the City's investments can be categorized according to
I three levels of risk. These credit risk categories are as follows:
Category 1 — Insured or registered, or securities held by the entity or its agent in the entity's
name,
I Category 2— Uninsured and unregistered, with securities held by the counterparty's trust
department or agent in the entity's name,
I Category 3— Uninsured and unregistered, with securities held by counterparty,or by its trust
department or agent but not in the entity's name.
At year—end,the City's investment balances were as follows:
I
Carrying Market
U.S.Government Securities Category Amount Value
FNMA discount notes 1 $ 645,396 $ 645,442
I FNMA term notes 1 2,450,765 2,445,097
3,096,161 3,090,539
Investments not subject to categorization:
Deferred compensation mutual fund 729,374 729,374
ITotal Investments $ 3.825.535 $ 3.819.913
I
35
CITY OF FRIENDSWOOD, TEXAS
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 3 — PROPERTY TAXES
The City's property taxes are levied annually in October on the basis of the Appraisal District's assessed
values as of January 1 of that calendar year. Appraised values are established by the Appraisal District at
market value and assessed at 100% of appraised value. The City's property taxes are billed and collected
by the City's Tax Assessor/Collector. Such taxes are applicable to the fiscal year in which they are levied
and become delinquent with an enforceable lien on property on February 1 of the subsequent calendar
year.
Property taxes are prorated between operations and debt service based on rates adopted for the year of
the levy. For the current year, the City levied property taxes of $.6156 per $100 of assessed valuation
which were prorated between operations and debt service in the amounts of $.4680 and S.1476,
respectively.The resulting adjusted tax levies were approximately$43 and$13 million for operations and
debt service, respectively, based on a total adjusted taxable valuation of approximately $911 million for
the 1995 tax year.
Property taxes receivable,at September 30, 1996,consists of the following:
Debt
General Service
Tax Year Fund Fund Total
1995 $ 40,464 $ 12,762 $ 53,226
1994 23,338 6,765 30,103
1993 14,042 4,485 18,527
1992 13,604 4,377 17,981
1991 8,849 3,234 12,083
1990 and prior 70,566 29,487 100,053
$ 170.863 S 61.110 $ 231,973
NOTE 4 — LAND, BUILDINGS, AND EQUIPMENT
A summary of changes in the General Fixed Assets Account Group, for the year ended September 30,
1996,follows:
Transfers,
Balance, Adjustments Balance,
October 1, and Retirements September 30,
1995 Additions In (Out) 1996
Land $ 2,951,139 $ $ 213,043 $ 3,164,182
Buildings 3,482,953 879,785 4,362,738
Improvements other
than buildings 14,308,969 2,061,510 16,370,479
Furniture and equipment 4,480,157 221,376 (590,144) 4,111,389
Construction in progress 2,744,327 898,473 (3,602,215) 40,585
Total S 27.967.545 $ 1,119.849 $ (1,038,021) $ 28.049373
36
3
CITY OF FRIENDSWOOD, TEXAS
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 4 — LAND, BUILDINGS, AND EQUIPMENT(continued)
Construction in progress and remaining commitments under related construction contracts for general
government construction projects at September 30, 1996 is as follows:
Total in
Project Description Progress
Library Renovations $ 11,782
Activity Building Renovations 4,761
Panic Alarm System 1,944
Eagle Lake's Street Drainage 3,645
Master Plan Centennial Park 8,078
Old City Park Improvements 1,775
1776 Park Improvements 8,600
Total $ 40.585
A summary of Enterprise Fund fixed assets at September 30, 1996,follows:
Land $ 643,097
Plant and equipment 17,664,561
Water and sewer lines 14,934,426
Construction in progress 367,238
33,609,322
Less accumulated depreciation (9,212,238)
Total $ 24.397.084
Construction in progress and remaining commitments under related construction contracts for water and
sewer construction projects at September 30, 1996 is as follows:
Total in
Project Description Progress
Shady Oaks' 18 inch Sewer Line $ 87,588
Rancho Viejo Collection System 267,752
Sunmeadow Lift Station 11,898
$ 367.238
3
3
1§.
37
r
CITY OF FRIENDSWOOD, TEXAS
Exhibit A-6 7
NOTES TO FINANCIAL STATEMENTS
9
NOTE 5 — LONG—TERM DEBT
The City issues a variety of long—term debt instruments in order to acquire and/or construct major
capital facilities and equipment for general government and enterprise fund activities. These instruments
include general obligation bonds, certificates of obligation, revenue bonds, notes payable, and capital
leases. These debt obligations are secured by either future tax revenues, water and sewer system
revenues, or liens on property and equipment. Debt obligations which are intended to be repaid from
water and sewer system revenues have been recorded in the City's Enterprise Fund. All other long—term
obligations of the City have been recorded in the General Long—Term Debt Account Group.
Bonds Payable and Certificates of Obligation
A summary of the terms of general obligation bonds,combination tax and revenue bonds,and certificates
of obligation outstanding and their corresponding allocations to the General Long—Term Debt Account
Group and the Enterprise Fund at September 30, 1996 follows: I
General
Series and Original Final Interest Long—Term Enterprise
Issue Amount Maturity Rate (%) Debt Fund
General Obligation Bonds
1986 Refunding Bonds
10,650,777 2004 4.25 — 7.90 $ 242,427 $
1993 Refunding Bonds
6,555,000 2004 2.25 — 4.625 1,543,750 4,631,250
1,786,177 4,631,250
Combination Tax and Revenue
Certificates of Obligation
1988 Series 4,400,000 1997 7.0 — 8.375 285,000
1992 Series 5,000,000 2008 5.30 — 6.75 2,100,000 2,685,000
1995 Series 3,200,000 2010 5.375 — 7375 3,200,000
2,100,000 6,170,000
Revenue Bonds
1969 Series 700,000 1999 5.5 — 6.125 49,300 95,700
1979 Series 1,750,000 1996 5.5 — 6.125 198,351
49,300 294,051
Total Bonds and Certificates of Obligation $ 3,935.477 $ 11.095.301
I
3
38
I
CITY OF FRIENDSWOOD, TEXAS
3 Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 5 — LONG—TERM DEBT(continued)
Annual debt service requirements for bonds and certificates of obligation are as follows:
I General
Long—Term Enterprise
Fiscal Year Debt Fund
I 1997 $ 509,160 $ 1,838,749
1998 563,831 1,565,987
1999 554,016 1,547,760
2000 807,211 1,296,477
I
2001 408,361 977,951
Thereafter 2,732,354 8,077,270
5,574,933 15,304,194
Iless interest portion 1,639,456 4,208,893
Total requirements S 3.935.477 S 11.095.301
IAccretion on Premium Compound Interest Bonds
A portion of the bonds sold in the Series 1986 refunding bond issue were premium compound interest
I bonds. These obligations have par values of$440,777 and maturity values of S1,305,000.The interest on
these obligations will be paid upon maturity in the fiscal years ending September 30, 2000, through 2004.
The accreted values of these bonds at September 30, 1996, is approximately $953,573,of which S429,108
has been allocated to the Enterprise Fund and$524,465 has been allocated to the the General Long—Term
I Debt Account Group. Accordingly,accretion on these bonds of$230,758 and$282,038 has been recorded
in the Enterprise Fund and the General Long—Term Debt Account Group,respectively.
Note Payable
During the year ended September 30, 1994, the City entered into an agreement to purchase a tract of
land for building a sports complex. As a result of this agreement, the City issued a note to the seller of
I the property for approximately S598,567. The Note is secured by a first lien Deed of Trust against the
property and is payable in three annual installments bearing an interest rate of 6 percent. The
installments are due on or before September 15,each year. Anticipated future debt service requirements
for this note are as follows:
I
Debt Service
Fiscal Year Requirements
1997 $ 192,713
Total 192,713
less interest portion 10,908
INote Payable S 181.805
I
I
39
r
CITY OF FRIENDSWOOD, TEXAS
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 5 — LONG—TERM DEBT(continued)
r
Obligations Under Capital Leases
The City entered into capital lease agreements in order to purchase management information system
equipment for City Hall and the police and fire departments. Following is a summary of future lease
payments due on this equipment:
Lease
Fiscal Year Obligation
1997 $ 93,812
1998 93,814
1999 59,819
2000 2,200
Total 249,645
less interest portion 30,436
Obligations under capital leases $ 219,209
Prior Year Defeasance of Debt
In prior years, the City defeased certain general obligation and revenue bonds by placing the proceeds of
the 1986 and 1993 refunding bonds in an irrevocable trust to provide for all future debt service payments
on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not
included in the City's financial statements. On September 30, 1996, approximately $7.5 million of bonds
outstanding are considered defeased.
Changes in Long—Term Debt
The following are summaries of long—term debt transactions of the City for the year ended
September 30, 1996.
General Long—Term Debt Account Group
Balance, Balance,
October 1, September 30,
1995 Additions Retirements 1996
General obligation bonds $ 2,339,177 $ $ (553,000) $ 1,786,177
Revenue bonds 62,900 (13,600) 49,300
Certificates of obligation 2,130,000 (30,000) 2,100,000
Notes payable 384,642 (202,837) 181,805
Obligations under capital
leases 223,043 160,000 (163,834) 219,209
Accreted interest on premium
compound interest bonds 244,186 37,852 282,038
$ 5383,948 $ 197,852 $ (963.271) $ 4.618.529
I
40
3
CITY OF FRIENDSWOOD, TEXAS
3 Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
11 NOTE 5 — LONG—TERM DEBT(continued)
Enterprise Fund Long—Term Debt
Balance, Balance,
I October 1, September 30,
1995 Additions Retirements 1996
Revenue bonds $ 127,100 $ $ (31,400) $ 294,051
I General obligation bonds 5,366,601 (537,000) 4,631,250
Certificates of obligation 6,500,000 (330,000) 6,170,000
Accreted interest on premium
Icompound interest bonds 199,789 30,969 230,758
$ 12.193.490 $ 30.969 $ (898,400) $ 11.326.059
I
Summary of Long—Term Debt Requirements
I The annual requirements to amortize all long—term debt outstanding at September 30, 1996, including
interest payments are as follows:
I
General
Fiscal Long—Term Enterprise
Year Debt Fund Total
1997 $ 795,685 $ 1,838,749 $ 2,634,434
1998 657,645 1,565,987 2,223,632
1999 613,835 1,547,760 2,161,595
2000 809,411 1,296,477 2,105,888
2001 408,361 977,951 1,386,312
2002 441,304 937,868 1,379,172
2003 442,039 941,121 1,383,160
2004 445,052 935,744 1,380,796
2005 346,320 873,494 1,219,814
2006 350,238 871,064 1,221,302
2007 352,913 867,935 1,220,848
2008 354,488 872,488 1,226,976
2009 884,175 884,175
2010 893,381 893,381
$ 6.017.291 $ 15.304.194 $ 21.321.485
I
I
I
41
7
CITY OF FRIENDSWOOD, TEXAS
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 6 — FUND EQUITY
Retained Earnings
A portion of retained earnings in the Enterprise Fund is reserved for the following:
Water and sewer construction $ 1,953,908
Central service area construction 191,763
Debt service 115,924
$ 2.261.595
Contributed Capital
The following is a schedule of changes in contributed capital for the Enterprise Fund for the year ended
September 30, 1996:
Contributed capital at beginning of year $ 13,140,148
Reductions
Reclassification of contributed capital
to retained earnings (1,378,299)
Contributed Capital at End of Year $ 11.761.849
Fund Balance
Fund Balances in the various Governmental Fund Types are reserved or designated as follows:
Special Capital
General Revenue Debt Service Projects
Reserved for:
Encumbrances $ 62,343 $ $ $ 227,493
Inventories 8,195
Prepaids and other assets 44,715
Debt service 298,053
Total reserved fund
balance 115.253 298.053 227.493
Designated for.
Emergency
operations 900,000
Police investigations 8,000
Centennial observance 4,175
Fire/EMS 124,870
Authorized
construction 551,443
Total designated fund
balance $ 900,000 $ 137.045 $ $ 551,443
In the Non—expendable Trust Fund,$67,200 of the fund balance is reserved for an endowment.
42 1
3
3 CITY OF FRIENDSWOOD, TEXAS
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
3
NOTE 7 — INTERFUND OPERATING TRANSFERS
IOperating transfers between funds during the 1996 year were as follows:
Operating Operating
ITransfer From Transfer To Amounts
Special Revenue Fund Capital Projects Fund $ 840
Capital Projects Fund Debt Service Fund 56,573
I Enterprise Fund General Fund 229,460
Enterprise Fund Capital Projects Fund 348,550
Enterprise Fund Capital Projects Fund 37,512
I Capital Project Facitilies Capital Projects Fund 3,250
$ 676,185
INOTE 8 — INTERFUND RECEIVABLES AND PAYABLES
At September 30, 1996 interfund receivable and payable balances consisted of the following:
I
Fund Due From (To) Due From Due To
General Fund Enterprise Fund $ 44,037 $ 81,250
IEnterprise Fund General Fund 81,250 44,037
Total Due From (To) $ 125.287 125.287
I
NOTE 9 —IMPACT FEES
IOn April 27, 1990, the City, in conformance with the provisions of Senate Bill 336 and House Bill 1786,
adopted a Capital Improvements Plan for Water Supply and Distribution Improvements and for
Wastewater Treatment and Collection Improvements that were needed to serve new developments. An
IImpact Fee Structure to defray the costs of these improvements was also adopted.
In recent years the City has committed funds to the construction of surface water facilities and wastewater
I capacity necessary to provide service to current residents, as well as for projected development within the
City. The cost of water and wastewater capacity that has been constructed to support new growth is
reflected in the City Wide impact fees.
I Based on population growth projections, two areas (Melody Lane and Central Service Area) within the
City were identified for the proposed extension of water distribution and wastewater collection systems
and are included in the impact fee structure. An impact fee was also included to defray the costs of water
I distribution facilities extended to the Bay Area Boulevard Service Area under the terms of a contractual
agreement with Bay Area Land Company,Ltd.
The Capital Improvements Plan and Impact Fee structure was amended by City Council on January 7,
I 1991, to include an impact fee for sanitary sewer collection system costs serving the area known as Mills,
Murphy,and Briarmeadow Avenue between Sunset Drive and Greenbriar.
I
I 43
S
CITY OF FRIENDSWOOD, TEXAS
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 9 —IMPACT FEES (continued)
The following is a summary of the Impact Fees that apply on a City Wide Basis and for each of the
designated service areas. The fees represent the charge for single equivalent service units as defined in
the Capital Improvement Plan.
Fee Per Single
Equivalent
Service Unit
City Wide Impact Fees
Surface water facilities $ 685
Wastewater treatment facilities 69
Impact fee study and update study 36
Total City Wide Impact Fee $ 790
Water Distribution Impact Fees
Melody Lane service area $ 854
Bay Area Boulevard service area 294
South Friendswood service area 293
Wastewater Collection Impact Fees
Melody Lane service area $ 450
Mills, Murphy,Briarmeadow Avenue 2,532
South Friendswood Service Area
Area A 378
Area B-1 378
Area B-2 378
Area C 285
Area D 161
Area E-1 784
Area E-2 784
Area E-3 161
Area E-4 161
Area F 378
The impact fees are deposited into a separate, interest bearing bank account in compliance with the
referenced legislation and transferred to the Enterprise Fund cash account as needed. The impact fees
and interest income for each service area are maintained in separate equity schedules.Interest is applied
based on a percentage of the daily equity balance of each service area.
The portion of City Wide Impact Fees collected for Surface Water Facilities are used to meet the current
debt service obligations for the 1988 Certificates of Obligations issued to fund the surface water facilities
capital improvements. The remaining City Wide Impact Fees collected for Wastewater Treatment
Facilities and Impact fee study and Update Study are used to fund other water and wastewater system
improvements. All Impact Fees collected for specific service areas are used to fund new capital
improvements for those designated areas.
44
3
CITY OF FRIENDSWOOD, TEXAS
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
z
NOTE 10 — RETIREMENT PLANS
A. Texas Municipal Retirement System
Plan Description and Provisions
The City provides pension benefits for all of its full—time employees through a non—traditional,joint
contributory, defined contribution plan in the state—wide Texas Municipal Retirement System
('TMRS"), one of over 570 administered by TMRS, an agent multiple—employer public employee
retirement system. It is the opinion of TMRS management that the plans in TMRS are substantially
defined contribution plans, but they have elected to provide additional voluntary disclosure to help
foster a better understanding of some of the non—traditional characteristics of the plan.
Benefits depend upon the sum of the employee's contributions to the plan, with interest, and the
City—financed monetary credits, with interest. At the inception of the plan, the City granted
monetary credits for service rendered before the plan began of a theoretical amount equal to two
times what would have been contributed by the employee,with interest, prior to establishment of the
plan. Monetary credits for service since initiation of the plan are a percent(100%, 150%,or 200%)of
1 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
A since the plan began, would be the total monetary credits and employee contributions accumulated,
with interest if the current employee contribution rate and the City matching percent had always been
in existence and if the employee's salary had always been the average of his salary in the last three
years that are one year before the effective date. At retirement,the benefit is calculated as if the sum
of the employee's accumulated contributions with interest and the employer—financed monetary
credits with interest were used to purchase an annuity.
Members can retire at age 60 and above with ten or more years of service or with 25 years of service
regardless of age. The plan also provides for death and disability benefits. A member is vested after
ten 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 6%, and the City's matching percent is currently 150% of
that contribution, 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, the increased unfunded actuarial liability is to be amortized over a new
25—year period. Currently, the unfunded actuarial liability is being amortized over the 25—year
period which began January 1991. The unit credit actuarial cost method is used for determining the
111 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.
45
CITY OF FRIENDSWOOD, TEXAS
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 10 — RETIREMENT PLANS (continued)
A. Texas Municipal Retirement System (continued)
Contributions (continued)
The City's total payroll in fiscal year 1995 was$4,519,116,and the City's contributions were based on a
payroll of $4,150,533. Both the City and the covered employees made the required contributions
which amounted to $284,653 for the City and $249,032 for the employees. The City's portion of
$284,653 is broken down as follows:
for the months in calendar year 1995 — 6.50% ($66,216) of covered payroll; 5.61% ($57,150)
normal cost plus 0.89% ($9,066)to amortize the unfunded actuarial liability.
for the months in calendar year 1996 — 6.97% ($218,437) of covered payroll; 6.16% ($193,052)
normal cost plus 0.81% ($25,385)to amortize the unfunded actuarial liability.
The City adopted changes in the plan subsequent to the previous actuarial valuation, which had the
effect of increasing the City's contribution rate for 1996 by 0.03% 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 non—traditional nature of the defined
contribution plan which had an initial unfunded pension benefit obligation due to the 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 Board (GASB 5)
defines pension benefit obligation as a standardized disclosure measure of the actuarial present value
of pension benefits, adjusted for the effects of projected salary increases, estimated to be payable in
the future as a result of employee service to date. The measure is intended to help users assess the
funding status of public employee pension plans, assess progress made in accumulating sufficient
assets to pay benefits when due,and make comparisons among public employee pension plans.
The 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 assets is not determined for each City's plan, but the market value of assets for TMRS as a whole
was 114.2%of book value as of September 31, 1995.
Pension Benefit Obligation
Annuitants currently receiving benefits $ 512,197
Terminated employees 564,080
Current Employees:
Accumulated employee contributions,including allocated invested earnings 2,330,904
Employer—financed vested 2,622,153
Employer—financed nonvested 530,131
Total Pension Benefit Obligation 6,559,465
Net assets available for benefits,at book value 5,838,306
Unfunded Pension Benefit Obligation $ 721.159
3
46 3
3
CITY OF FRIENDSWOOD, TEXAS
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 10 — RETIREMENT PLANS (continued)
A. Texas Municipal Retirement System(continued)
Funding Status and Progress (continued)
Unfunded Pension Benefit Obligation
The book value of assets is amortized cost for bonds and original cost for short—term securities and
stocks. The 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$16,094.
Trend Information
Trend information gives an indication of the progress made in accumulating sufficient assets to pay
1 benefits when due. Ten—year historical trend information presenting the progress in accumulating
sufficient assets to pay benefits when due is presented in the statistical section (Table 16)of the City's
Comprehensive Annual Financial Report. Trend information for the last three calendar years follows:
I 1993 Calendar Year
1994 1995
Net assets available for
benefits as a percentage
of pension benefit
obligation 84% 87% 89%
1 Unfunded pension benefit
obligation as a percentage
of annual covered payroll 25% 17% 17%
Employer contribution as a
percentage of annual covered
payroll 6% 6% 7%
NOTE 11 — DEFERRED COMPENSATION PLAN
The City offers its employees a tax—deferred compensation plan meeting the requirements of Internal
Revenue Code Section 457. The plan was established by City Ordinance which appointed ICMA
Retirement Corporation as plan administrator. The City's fiduciary responsibility is to remit
employee deferred compensation to the administrator on a regular basis. The deferred compensation
is not available to employees until termination, retirement, death, or emergency. At September 30,
1996,the plan assets had a market value of$729,374.
All amounts of compensation deferred under the plan, all property and rights purchased with those
amounts, and all income attributable to those amounts, property, or rights are (until paid or made
available to the employee or other beneficiary) solely the property and rights of the City (without
being restricted to the provisions of the benefits under the plan), subject only to the claims of the
City's general creditors. Participants' rights under the plan are equal to those of general creditors of
the City in an amount equal to the fair market value of the deferred account for each participant.
I
47
CITY OF FRIENDSWOOD, TEXAS
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
3
NOTE 12 — SOUTHEAST WATER PURIFICATION PLANT
The City has entered into a contract with the City of Houston for constructing, operating, and
maintaining a water purification plant known as Southeast Water Purification Plant. The City's pro
rata share of the actual production construction costs of the project is 3.75 percent. The City's pro
rata share of the actual pumping construction costs is 1.33 percent.
The City began receiving water from the plant on October 15, 1990. The City is billed on a monthly
basis for the actual gallons of water received times the City's pro rata share of actual costs. At the end
of each quarter, the City of Houston computes the total operation and maintenance expense for the
quarter just ended, recalculates the cost per one thousand gallons, and adjusts previous billings on the
next invoice.
The relationship of the parties is of a fiduciary character. No partnership or joint venture is created by
this contract.
NOTE 13 — BLACKHAWK REGIONAL WASTE TREATMENT PLANT
The City has entered into an arrangement with the Gulf Coast Waste Disposal Authority for the
operation and maintenance of a joint treatment plant known as Blackhawk Regional Waste Treatment
Plant. The City of Friendswood,the City of Houston, Harris County MUD No. 55,and Baybrook MUD
1, (the "participants") share in the expense of operation and maintenance based on their respective usage
on a monthly basis. The percentages of equity in the joint venture based on their respective capacity
rights at September 30, 1996 are as follows:
City of Friendswood 52.47 %
City of Houston 16.18
Harris County MUD No.55 20.27
Baybrook MUD No. 1 11.08
100.00 %
An annual budget for operations is submitted to the Gulf Coast Waste Disposal Authority each year. The
Gulf Coast Waste Disposal Authority is the governing authority and consists of nine members (three
appointed by the governor, three appointed by Harris County, Galveston County, and Chambers County,
and three appointed by the participants).
Separate financial statements for the joint venture were available in the December 31, 1995 audited
financial statements of the Gulf Coast Waste Disposal Authority and are summarized below:
Joint
Venture
Total assets $ 375,397
Total liabilities (375,397)
Total fund equity
Total revenues 1,247,293
Total expenditures/expenses (1,247,293)
Net Decrease
$ —0—
48
1
CITY OF FRIENDSWOOD, TEXAS
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 14 — 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's risk management program
encompasses obtaining property and liability insurance through Texas Municipal League (TML), an
Intergovernmental Risk—Pool. The City has not had any significant reduction in insurance coverage and
the amounts of insurance settlements have not exceeded insurance coverage for any of the last three
years. The participation of the City in TML is limited to payment of premiums. During the year ended
September 30, 1996 the City paid premiums of approximately$110,996 to TML for provisions of various
liability,property and casualty insurance.The City has various deductible amounts ranging from$1,000 to
$5,000 on various policies.At year end the City did not have any significant claims.
The City also provides workers compensation insurance on its employees through TML. The Workers
compensation premiums for the year ended September 30, 1996 was approximately $178,851. Workers
compensation is subject to change when audited by TML. At year end September 30, 1996 the City
believed the amounts paid on workers compensation would not change significantly from the amounts
recorded.
During the year ended September 30, 1996, employees of the City were covered by a health and dental
' insurance plan (the plan) with TML. The City paid premiums of approximately $200 per month per
employee plus $413 per month per employee for 70% of the dependents coverage to the plan. All
premiums were paid to TML. The City does not retain any risk of loss on health and dental insurance.
1
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COMBINING, INDIVIDUAL FUND AND ACCOUNT GROUP
iSTATEMENTS AND SCHEDULES
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CITY OF FRIENDSWOOD, TEXAS i
Exhibit B-1
GENERAL FUND #
COMPARATIVE BALANCE SHEET40
September 30, 1996 and 1995 0
lip
1996 1995
ii
Assets
Cash and cash equivalents $ 1,039,380 $ 2,461,306
Investments 1,648,831
Receivables
Taxes 170,8,63 195,088
Customer accounts 154,745 156,397
Interest receivable 28,947
Other 43,897 46,113
Due from other governments 52,313
Due from other funds 44,037
Inventory 8,195
Prepaids and other assets 44,715 71,240
Total Assets $ 3,235,923 $ 2,930,144
1
Liabilities and Fund Balance
Liabilities 7
Accounts payable $ 370,217 462,577
Accrued liabilities 186,784
Compensated absences 683,097 718,890
Due to other funds 81,250
Deferred revenue 293,590 303,288
Total Liabilities 1,614,938 1,484,755
Fund Balance
Reserved for encumbrances 62,343 91,780
Reserved for inventories 8,195
Reserved for prepaids and other assets 44,715
Unreserved:
Designated for emergency operations 900,000 900,000
Undesignated 605,732 453,609
Total Fund Balance 1,620,985 1,445,389 1
Total Liabilities and Fund Balance $ 3,235,923 $ 2,930,144 1
I
50
C
CITY OF FRIENDSWOOD, TEXAS
Exhibit B-2
GENERAL FUND Page 1 of 7
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE -
BUDGET AND ACTUAL
Year Ended September 30, 1996
with comparative actual balances for the Year Ended September 30, 1995
1996
Variance
Favorable 1995
Budget Actual (Unfavorable) Actual
Revenues
I Property taxes $ 4,301,223 $ 4,303,607 $ 2,384 $ 4,544,589
Sales taxes 1,371,590 1,439,030 67,440 1,028,528
Franchise fees 826,574 852,091 25,517 863,183
Sanitation 1,029,935 1,017,028 (12,907) 1,085,149
If Fines and forfeitures 232,088 353,742 121,654 266,287
Permits and fees 283,555 401,720 118,165 234,518
Donations 7,280 10,087 2,807 10,083
I Intergovernmental 34,654 40,055 5,401 46,060
Interest on investments 156,500 202,771 46,271 173,781
Other 73,112 95,172 22,060 152,543
Total Revenues 8,316,511 8,715,303 398,792 8,404,721
Expenditures
General Government:
• Mayor and Council:
is Personnel services 289 268 21 428
Supplies 1,600 1,519 81 1,601
Other services and charges 45,653 37,787 7,866 30,905
Total Mayor and Council 47,542 39,574 7,968 32,934
• City Manager:
Personnel services 211,650 189,798 21,852 185,186
Supplies 4,152 4,810 (658) 3,338
Repairs and maintenance 909 (909) 461
Other services and charges 25,499 20,280 5,219 22,084
Total City Manager 241,301 215,797 25,504 211,069
City Secretary:
Personnel services 124,463 124,734 (271) 118,796
Supplies 2,650 3,100 (450) 5,374
Repairs and maintenance 1,450 2,285 (835) 1,310
Other services and charges 28,237 26,237 2,000 25,938
II Capital outlay 8,500 2,234 6,266
Capital equipment reserve
WA Total City Secretary 165,300 158,590 6,710 151,418
11
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CITY OF FRIENDSWOOD, TEXAS
Exhibit B-2
GENERAL FUND Page 2 of 7
STATEMENT OF REVENUES, EXPENDITURES, AND fs
CHANGES IN FUND BALANCE -
BUDGET AND ACTUAL 0
Year Ended September 30, 1996
with comparative actual balances for the Year Ended September 30, 1995
110
1996
Variance
Favorable 1995 1.
Budget Actual (Unfavorable) Actual
Expenditures (continued)
General Government: (continued)
Administration:
Finance:
Personnel services $ 270,720 $ 262,177 $ 8,543 $ 247,751
Supplies 10,185 9,198 987 9,815
Repairs and maintenance 250 428 (178) 195
Other services and charges 46,832 39,266 7,566 29,033
Total Finance 327,987 311,069 16,918 286,794
Human Resources:
Personnel services 111,644 106,271 5,373 88,299
Supplies 7,062 3,844 3,218 3,599
Repairs and maintenance 1,350 993 357 290
Other services and charges 19,637 15,339 4,298 13,815
Total Human Resources 139,693 126,447 13,246 106,003
1111,
Tax: ii
Other services and charges 132,723 121,613 11,110 129,696
Economic Development
Other services and charges 14,400 12,742 1,658
Legal:
Other services and charges 159,251 119,261 39,990
Public utilities services and charges 103,550 106,101 (2,551)
Total Legal 262,801 225,362 37,439 129,696
Municipal Court:
Personnel services 136,620 148,457 (11,837) 96,489
Supplies 3,900 3,909 (9) 2,470
Repairs and maintenance 100 100
Other services and charges 12,408 13,264 (856) 12,568
Capital oulays 1,300 1,567 (267)
Total Municipal Court 154,328 167,197 (12,869) 111,527
Computer Services:
Personnel services 49,683 48,242 1,441 42,498
Supplies 15,587 14,909 678 12,228
Repairs and maintenance 48,988 44,774 4,214 43,716
Other services and charges 81,750 39,541 42,209 82,238
Capital outlay 13,864 18,343 (4,479) 141,893
Capital equipment reserve
Total Computer Services 209,872 165,809 44,063 322,573
52
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41 CITY OF FRIENDSWOOD, TEXAS
Exhibit B-2
GENERAL FUND Page 3 of 7
iih STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE -
IBUDGET AND ACTUAL
Year Ended September 30, 1996
with comparative actual balances for the Year Ended September 30, 1995
1996
Variance
Favorable 1995
Budget Actual (Unfavorable) Actual
Expenditures (continued)
I Risk Management:
Supplies $ 1,300 $ 943 $ 357 $
Insurance 69,261 67,275 1,986
I Other services and charges 6,480 3,352 3,128
Total Risk Management 77,041 71,570 5,471
Total General Government 1,772,988 1,615,770 157,218 1,481,710
Public Safety:
Police Services:
I Personnel services $ 1,847,788 $ 1,925,198 $ (77,410) $ 1,706,578
Supplies 100,625 109,161 (8,536) 95,023
Repairs and maintenance 85,191 77,368 7,823 87,876
Other services and charges 89,574 76,778 12,796 73,658
Capital outlay 14,808 20,829 (6,021) 205,310
Total Police Services 2,137,986 2,209,334 (71,348) 2,168,445
I Communications:
Personnel services 432,866 409,809 23,057 352,552
Supplies 6,475 4,246 2,229 4,472
Repairs and maintenance 3,350 3,998 (648) 2,968
Other services and charges 7,355 6,194 1,161 5,093
Capital outlay 2,668 2,913 (245) 795
I Total Communications 452,714 427,160 25,554 365,880
Animal Control:
Personnel services 90,212 68,669 21,543 74,159
Supplies 6,350 5,967 383 8,183
Repairs and maintenance 2,150 1,896 254 1,744
Other services and charges 4,064 3,687 377 4,098
Trucks 2,100 2,100 12,954
ITotal Animal Control 104,876 80,219 24,657 101,138
Fire and EMS:
I Personnel services 161,562 158,771 2,791 138,226
Supplies 77,900 1,348 76,552 12,174
Repairs and maintenance 65,250 24,896 40,354 9,855
Other services and charges 96,373 210,500 (114,127) 230,998
Total Fire and EMS 401,085 395,515 5,570 391,253
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ii
CITY OF FRIENDSWOOD, TEXAS
Exhibit B-2
GENERAL FUND Page 4 of 7 I
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE -
BUDGET AND ACTUAL
Year Ended September 30, 1996
with comparative actual balances for the Year Ended September 30, 1995
1996
Variance $
Favorable 1995
Budget Actual (Unfavorable) Actual
Expenditures (continued)
Public Safety: (continued) I
Fire Marshal:
Personnel services $ 106,748 $ 96,083 $ 10,665 $ 74,957
Supplies 5,726 6,271 (545) 3,440
Repairs and maintenance 2,270 1,801 469 984
Other services and charges 7,985 12,360 (4,375) 9,530
Capital outlay 3,921
Total Fire Marshal 122,729 116,515 6,214 92,832
Emergency Management:
Personnel services 5,674 2,817 2,857 40,451 II
Supplies 1,668 1,588 80 7,292
Repairs and maintenance 2,550 2,485 65 1,762
Other services and charges 2,394 2,436 (42) 7,8612
Total Emergency Management 12,286 9,326 2,960 57,366
Total Public Safety 3,231,676 3,238,069 (6,393) 3,176,914
Public Works:
Administration:
Personnel services 121,156 119,782 1,374 132,400
Supplies 2,350 2,011 339 2,040 3
Repairs and maintenance 1,150 401 749 503
Other services and charges 4,520 4,081 439 3,449
Capital Outlay 6,100 650 5,4503
Reserves and contingencies 7,243 (7,243)
Total Administration 135,276 134,168 1,108 138,392
Streets:
Personnel services 238,920 207,108 31,812 225,294
Supplies 86,900 68,696 18,204 53,078
Repairs and maintenance 64,050 83,742 (19,692) 90,4493
Other services and charges 194,503 204,597 (10,094) 203,141
Capital outlay 5,799 (5,799) 1,188
Total Streets 584,373 569,942 14,431 573,150
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CITY OF FRIENDS WOOD, TEXAS
Exhibit B-2
IP GENERAL FUND Page 5 of 7
wit STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE -
BUDGET AND ACTUAL
Year Ended September 30, 1996
with comparative actual balances for the Year Ended September 30, 1995
I
1996
Variance
Favorable 1995
Budget Actual (Unfavorable) Actual
Expenditures (continued)
I Drainage:
Personnel services $ 108,361 $ 111,513 $ (3,152) $ 102,490
Supplies 800 812 (12) 1,048
I Repairs and maintenance 17,000 24,199 (7,199) 26,957
Other services and charges 33,000 6,300 26,700 3,517
Capital outlays 4,995 (4,995)
I Total Drainage 159,161 147,819 11,342 134,012
Sanitation:
Other services and charges 962,500 954,018 8,482 946,460
ITotal Sanitation 962,500 954,018 8,482 946,460
Total Public Works 1,841,310 1,805,947 35,363 1,792,014
Community Development:
Administration:
I Personnel services 86,408 88,516 (2,108) 84,716
Supplies 600 213 387 549
Other services and charges 2,200 864 1,336 2,534
ITotal Administration 89,208 89,593 (385) 87,799
Planning and Zoning:
I Personnel services 72,007 70,937 1,070 66,577
Supplies 1,350 1,020 330 1,268
Repairs and maintenance 225 29 196 87
Other services and charges 7,588 3,364 4,224 27,963
ITotal Planning and Zoning: 81,170 75,350 5,820 95,895
Engineering:
Personnel services 56,453 57,130 (677) 53,084
Supplies 2,750 2,106 644 3,711
Repairs and maintenance 2,600 2,114 486 2,356
I Other services and charges 9,698 7,251 2,447 3,871
Capital outlay 2,070 2,070
Total Engineering: 73,571 70,671 2,900 63,022
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CITY OF FRIENDSWOOD, TEXAS
Exhibit B-2
GENERAL FUND Page 6 of 7 !
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE -
BUDGET AND ACTUAL
Year Ended September 30, 1996
with comparative actual balances for the Year Ended September 30, 1995
1
1996
Variance
Favorable 1995
Budget Actual (Unfavorable) Actual
Expenditures (continued)
Inspection: 2
Personnel services $ 191,991 $ 176,926 $ 15,065 $ 196,224
Supplies 6,225 5,068 1,157 4,085
Repairs and maintenance 14,214 1,358 12,856 2,824
Other services and charges 9,695 28,323 (18,628) 13,964
Capital Outlay 3,627 (3,627)
Total Inspection 222,125 215,302 6,823 217,097
Total Community Development 466,074 450,916 15,158 463,813
Community Services: I
Health Services:
Supplies 6
Other services and charges 65,354 62,572 2,782 56,3942
Total Health Services 65,354 62,572 2,782 56,400
Library:
Personnel services 372,064 339,343 32,721 344,415
Supplies 102,451 86,803 15,648 86,667
Repairs and maintenance 775 520 255 520
Other services and charges 20,850 20,777 73 7,245
Capital Outlay 2,933 2,933 534
Total Library 499,073 450,376 48,697 439,381
Parks and Recreation2
Personnel services 211,899 220,669 (8,770) 209,550
Supplies 27,744 26,655 1,089 36,795
Repairs and maintenance 30,960 23,338 7,622 46,205
Other services and charges 108,222 139,841 (31,619) 111,622
Capital Outlay 20,898 26,063 (5,165) 9,306
Total Parks and Recreation 399,723 436,566 (36,843) 413,478
Community Activities:
Personnel services 108,894 102,416 6,478 97,941
Supplies 32,723 15,602 17,121 34,040
Repairs and maintenance 7,150 2,569 4,581 21,339
Other services and charges 54,031 54,063 (32) 67,639
Capital Outlay 25,418 14,588 10,830 6,395
Total Community Activities 228,216 189,238 38,978 227,354
56 oil
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CITY OF FRIENDSWOOD, TEXAS
Exhibit B-2
IN GENERAL FUND Page 7 of 7
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE -
1 BUDGET AND ACTUAL
Year Ended September 30, 1996
with comparative actual balances for the Year Ended September 30, 1995
1996
Variance
Favorable 1995
Budget Actual (Unfavorable) Actual
Expenditures (continued)
Community Services: (continued)
Swimming Pool:
Personnel services $ 32,530 $ 33,725 $ (1,195) $ 36,355
I Supplies 8,211 10,646 (2,435) 8,471
Repairs and maintenance 3,575 4,421 (846) 6,049
Other services and charges 9,150 14,512 (5,362) 13,262
Capital Outlay 1,724 1,724 1,411
ITotal Swimming Pool 55,190 63,304 (8,114) 65,548
Building Operations:
Personnel services 42,315 27,804 14,511 31,924
Supplies 22,075 32,459 (10,384) 24,192
Repairs and maintenance 47,081 44,462 2,619 40,865
I Other services and charges 309,214 337,855 (28,641) 296,180
Capital Outlay 24,265 13,829 10,436 9,730
Total Building Operations 444,950 456,409 (11,459) 402,891
ITotal Community Services 1,692,506 1,658,465 34,041 1,605,052
Total Expenditures 9,004,554 8,769,167 235,387 8,519,503
Revenues Over(Under)
Expenditures (688,043) (53,864) 634,179 (114,782)
Other Financing Sources(Uses)
Proceeds from capital leases 117,176
Operating transfers in 229,460 229,460 509,844
IOperating transfers(out) (399,257)
Total Other Financing
Sources(Uses) 229,460 229,460 227,763
Revenues and Other Financing Sources
Over(Under)Expenditures and
Other Financing(Uses) (688,043) 175,596 863,639 112,981
Fund balance - Beginning 1,445,389 1,445,389 1,332,408
IFund Balance - Ending $ 757346 $ 1,620,985 $ 863,639 $ 1.445,389
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3
SPECIAL REVENUE FUNDS
I
These funds are used to account for the proceeds of specific revenue sources that are legally restricted to financing
specific purposes. The following describes the various types of Special Revenue Funds used by the City:
Police Investigation Fund
This fund receives funds that are restricted to police investigation.
Centenial Fund
This fund receives donations that are restricted for the comemoration of the 1995-96 centennial for the City.
Fire/EMS Donation Fund
This fund receives funds that are restricted for Fire/EMS capital outlays.
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II
CITY OF FRIENDSWOOD, TEXAS `
SPECIAL REVENUE FUNDS S
COMBINING BALANCE SHEET S
September 30, 1996
with comparative totals for September 30, 1995
Police Fire/EMS I
Investigation Donations Centennial
Assets a
Cash and cash equivalents $ 3,169 $ 47,658 $ 1,966
Investments 5,059 76,061 3,138
Interest receivable
Miscellaneous receivables 89 1,335 55
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Total Assets $ 8,317 $ 125,054 $ 5,159
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Liabilities and Fund Balance
Liabilities
Accounts payable and accrued liabilities $ 317 $ 184 $ 984
Fund Balances 3
Unreserved:
Designated for police investigations 8,000
Designated for Fire/EMS 124,870
Designated for centennial observance 4,175
Total Fund Balances 8,000 124,870 4,175
Total Liabilities and Fund Balances $ 8,317 $ 125,054 $ 5,159
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Exhibit C-1
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Totals
1996 1995
Is 52,793
84,258 131,126
1,479 15,000
138,530 146,126
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1,485 21,968
• 8,000
8,248
1 124,870
85,937
4,175 29,973
137,045 124,158
138,530 146,126
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CITY OF FRIENDSWOOD 4
SPECIAL REVENUE FUNDS l'
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE
Year Ended September 30, 1996
with comparative totals for the Year Ended September 30, 1995
I
Police Fire/EMS
Investigation Donations Centennial
Revenues
Donations $ 6,624 $ 109,480 $ 2,068
Interest 519 4,353 752
Other 666
Total Revenues 7,143 113,833 3,486
Expenditures
Current:
Public safety 7,391 84,500
Community services 28,444
Total Expenditures 7,391 84,500 28,444
Revenues Over (Under)
Expenditures (248) 29,333 (24,958)
Other Financing Sources
Proceeds from the sale of equipment 9,600
Operating transfers in
Operating transfers (out) (840)
Total Other Financing Sources 9,600 (840)
Revenues and Other Financing Sources
Over (Under) Expenditures (248) 38,933 (25,798)
Fund balances,beginning of year 8,248 85,937 29,973
Fund Balances, End of Year $ 8,000 $ 124,870 $ 4,175
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F
F
Exhibit C-2
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Totals
1996 1995
$ 118,172
5,624 $ 135,095
6,536
666 56,906
124,462 198,537
II 91,891 29,308
28,444 51,094
f120,335 80,402
4•I ii, 4,127 118,135
ft
9,600 11,024
(840) (48,700)
t8,760 (372676)
12,887 80,459
124,158 43,699
$ 137,045 $ 124,158
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4
CITY OF FRIENDSWOOD, TEXAS
Exhibit C-3
SPECIAL REVENUE FUND (POLICE INVESTIGATION)
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE —
BUDGET AND ACTUAL
3
Year Ended September 30, 1996
with comparative actual balances for the Year Ended September 30, 1995
1996
Variance
Favorable 1995
Budget Actual (Unfavorable) Actual
Revenues
Donations $ 18,714 $ 6,624 $ (12,090) $ 11,249
Interest on investments 519 519 535
Other 202
Total Revenues 18,714_ 7,143_ (11,571) 11,986
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Expenditures
Public safety 19,174 7,391 11,783 11,203
Revenues Over (Under)
Expenditures (460) (248) 212 783
Fund balances — Beginning 8,248 8,248 7,465
Fund Balances — Ending $ 7,788 $ 8,000 $ 212 $ 8,248
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CITY OF FRIENDSWOOD, TEXAS
Exhibit C-4
1 SPECIAL REVENUE FUND (FIRE/EMS DONATIONS)
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE -
BUDGET AND ACTUAL
Year Ended September 30, 1996
with comparative actual balances for the Year Ended September 30, 1995
3 1996
Variance
Favorable 1995
Budget Actual (Unfavorable) Actual
Revenues
Donations $ 104,900 $ 109,480 $ 4,580 $ 123,806
Intergovernmental 5,000 (5,000)
IInterest on investments 2,525 4,353 1,828 3,236
Total Revenues 112,425 113,833 1,408 127,042
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Expenditures
IPublic safety 84,795 84,500 295 18,105
Total Expenditures 84,795 84,500 295 18,105
0
lii Revenues Over
Expenditures 27,630 29,333 1,703 108,937
Other Financing Sources
Proceeds from the sale
I of equipment 4,600 9,600 5,000
Operating transfers in(out) (23,000)
I Total Other Financing
Source 4,600 9,600 5,000 (23,000)
I Revenues and Other
Financing Sources Under
Expenditures 32,230 38,933 6,703 85,937
Fund balances - Beginning 85,937 85,937
Fund Balances - Ending $ 118,167 $ 124,870 $ 6,703 $ 85,937
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IDEBT SERVICE FUND
IThe Debt Service Fund is used to account for property taxes levied for payment of principal and interest on all
general long—term debt of the City.
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CAPITAL PROJECTS FUNDS
The Capital Funds account for financial resources used for the acquisition and/or construction of major
P Projects �l
capital facilities.
Capital Projects — Used to account for non—building capital projects and infrastructure.
Capital Facility— Used to account for building related projects.
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CITY OF FRIENDSWOOD, TEXAS 3
Exhibit E-1
CAPITAL PROJECTS FUNDS 011
COMBINING BALANCE SHEET
September 30, 1996
with comparative totals for September 30, 1995
P
Capital Capital Totals
P
Projects Facility 1996 1995
Assets
Cash and cash equivalents $ 238,517 $ 68,897 $ 307,414 $ 1,347,302
Investments 380,670 109,724 490,394
Accrued interest receivable 6,683 1,926 8,609
Other assets 2,383 2,383 5,087
Total Assets $ 628,253 $ 180,547 $ 808,800 $ 1352,389 3
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Liabilities and Fund Balances
3
Liabilities
Accounts payable and
accrued liabilities $ 29,864 $ $ 29,864 $ 244,467 110,
Due to other funds 19,794 III
Total Liabilities 29,864 29,864 264,261
Fund Balances
Reserved for encumbrances 137,521 89,972 227,493
Unreserved:
Designated for authorized construction 460,868 90,575 551,443 1,088,128
598,389 180,547 778,936 1,088,128
Total Liabilities and
Fund Balances $ 628,253 $ 180,547 $ 808,800 $ 13523893
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1
CITY OF FRIENDSWOOD TEXAS
Exhibit E-2
1 CAPITAL PROJECTS FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE
IYear Ended September 30, 1996
with comparative totals for the Year Ended September 30, 1995
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Capital Capital Totals
Projects Facility 1996 1995
Revenues
Donations $ 2,050 $ $ 2,050 $ 6,233
II Intergovernmental 9,184 9,184 279,339
Interest 30,522 10,590 41,112 75,867
Other 267 60,699 60,966 59,235
ITotal Revenues 42,023 71,289 113,312 420,674
Expenditures
I Capital Outlay:
Public Works:
Streets 697,638 697,638 443,315
Drainage 3,645 3,645 10,842
1 Community Services:
Parks and recreation 15,638 15,638 316,280
Building operations 195,912 195,912 1,630,503
3 Total Expenditures 716,921 195,912 912,833 2,400,940
Revenues (Under)
IExpenditures (674,898) (124,623) (799,521) (1,980,266)
Other Financing Sources (Uses)
I Operating transfers in ,390 9 40,762 390,152 1,285,435
Operating transfers (out) 34(3,250) (56,573) (59,823)
Proceeds from the sale of notes payable 160,000 160,000
3 Total Other
Financing Sources 346,140 144,189 490,329 1,285,435
IIRevenues and Other Financing
Sources Over(Under)
Expenditures (328,758) 19,566 (309,192) (694,831)
a
Fund balances- Beginning 927,147 160,981 1,088,128 1,782,959
Fund Balances - Ending $ 598389 $ 180,547 $ 778,936 $ 1,088,128
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1
ENTERPRISE FUND
The Enterprise Fund is used to account for the acquisition,operation,and maintenance of governmental facilities and
services which are entirely or predominantly self—supporting by user charges. The operations of the water and sewer
system are accounted for in the Enterprise Fund to reflect the results of operations similar to private enterprises.
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FRIENDSWOOD 3
CITY OF , TEXAS
Exhibit F-1
ENTERPRISE FUND
COMPARATIVE BALANCE SHEET
7 September 30, 1996 and 1995
1996 1995
I
Assets
Current Assets
Cash and cash equivalents $ 559,853 $ 2,089,689
I Investments 676,694
Receivables:
Customer accounts 685,549 757,705
Interest 17,951
I Other 21
Due from other funds 81,250
Prepaids and other assets 72,272 90,526
Total Current Assets 2,093,590 2,937,920
IRestricted Assets
Investment in Blackhawk joint venture 191,763 179,637
I Deposits and impact fees 154,263
346,026 179,637
Land,buildings,and equipment,at cost 33,609,322 33,839,373
I Less accumulated depreciation (9,212,238) (8,386,854)
Land, Buildings, and Equipment, Net 24,397,084 25,452,519
Total Assets $ 26,836,700 $ 28,570,076
ILiabilities and Fund Equity
Current Liabilities
Accounts payable $ 286,798 $ 310,425
I Accrued liabilities 98,122
Compensated absences 74,578 83,321
Customer deposits 171,055 184,523
I Due to other funds 44,037
Bonds payable,current portion 880,950 568,400
Certificates of obligation payable,current portion 430,000 330,000
Total Current Liabilities 1,985,540 1,476,669
I Long-Term Liabilities
Bonds payable,less current portion 4,044,351 4,925,301
Certificates of obligation payable,less current portion 5,740,000 6,170,000
I Accreted interest on premium compound interest bonds 230,758 199,789
Total Long-Term Liabilities 10,015,109 11,295,090
Total Liablities 12,000,649 12,771,759
I Fund Equity
Contributed capital 11,761,849 13,140,148
Retained Earnings:
I Reserved for water and sewer construction 1,953,908 387,539
Reserved for surface water construction 38,254
Reserved for central service area construction 191,763 791,407
I Reserved for debt service 115,924 199,643
Unreserved 812,607 1,241,326
Total Retained Earnings 3,074,202 2,658,169
I Total Fund Equity 14,836,051 15,798,317
Total Liabilities and Fund Equity $ 26,836,700 $ 28,570,076
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CITY OF FRIENDSWOOD, TEXAS
Exhibit F-2
ENTERPRISE FUND Page 1 of 2
SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN
RETAINED EARNINGS - BUDGET AND ACTUAL
(NON-GAAP BUDGETARY BASIS) 0
Year Ended September 30, 1996
with comparative actual balances for the Year Ended September 30, 1995
1996
Variance
Favorable 1995
Budget Actual (Unfavorable) Actual
Operating Revenues
Water charges $ 2,618,895 $ 2,796,977 $ 178,082 $ 2,690,353
Sewer charges 1,998,994 1,919,924 (79,070) 1,574,347
Fees and penalties 107,300 114,460 7,160 107,204
Other 200,901 163,758 (37,143) 22,385
Total Operating Revenues 4,926,090 4,995,119 69,029 4,394,289
Operating Expenses
Water Operations:
Personnel services 238,962 231,608 7,354 232,416
Supplies 43,400 46,241 (2,841) 50,360
Repairs and maintenance 159,737 146,515 13,222 78,814
Other services and charges 576,382 565,171 11,211 405,385
Capital outlay 168,480 49,106 119,374 817,760 3
Total Water Operations 1,186,961 1,038,641 148,320 1,584,735
Sewer Operations:
Personnel services 190,900 183,686 7,214 168,764 3
Supplies 13,750 14,916 (1,166) 9,075
Repairs and maintenance 87,244 236,871 (149,627) 92,515
Other services and charges 1,165,293 872,870 292,423 720,536
Reserves and contingencies 24,000 17,588 6,412 3
Capital outlay 1,933,792 1,109,131 824,661 1,779,987
Total Sewer Operations 3,414,979 2,435,062 979,917 2,770,877
Operation Administration:
Personnel services 101,225 98,050 3,175 94,190
Supplies 1,500 1,496 4 2,040
Repairs and maintenance 700 123 577 147
Other services and charges 1,795 1,156 639 1,250
Capital outlay 1,011 (1,011)
Total Operation Administration 105,220 101,836 3,384 97,627
Finance Administration: 3
Personnel services 157,217 158,923 (1,706) 138,555
Supplies 8,850 6,380 2,470 7,627
Repairs and maintenance 5,475 4,301 1,174 5,564
Other services and charges 28,714 23,329 5,385 39,994
Bad debt expense 10,000 16,002 (6,002)
Capital outlay 7,948 7,948
Total Finance Administration 218,204 208,935 9,269_ 191,740
Computer Services:
Supplies 1,500 1,809 (309) 223
Repairs and maintenance 3,928 2,639 1,289 3,395
Other services and charges 3,050 955 2,095 2,429
Capital outlay 640 505 135 7,497
Total Computer Services 9,118 5,908 3,210 13,544
70
CITY OF FRIENDSWOOD TEXAS
Exhibit F-2
I ENTERPRISE FUND Page 2 of 2
SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN
RETAINED EARNINGS - BUDGET AND ACTUAL
II (NON-GAAP BUDGETARY BASIS)
Year Ended September 30, 1996
with comparative actual balances for the Year Ended September 30, 1995
I1996
Variance
I Favorable 1995
Budget Actual (Unfavorable) Actual
Operating Expenses(continued)
Insurance:
I Other services and charges 45,736
42,077 3,659 25,980
Total Insurance 45,736 42,077 3,659 25,980
Engineering:
I Personnel services 58,727 54,090 4,637 52,298
Supplies 2,100 1,987 113 1,637
Repairs and maintenance 1,500 1,476 24 1,483
I Other services and charges 22,680 460 22,220 550
Total Engineering 85,007 58,013 26,994 55,968
Total Operating Expenses 5,065,225 3,890,472 1,174,753 4,740,471
IOperating Income (Loss) (139,135) 1,104,647 1,243,782 (346,182)
I Nonoperating Revenues (Expenses)
Interest revenue 41,678 124,604 82,926 152,306
Impact fees 182,270 241,725 59,455
Gain on sales of property 1,317 1,317
I Proceeds from obligation debt
Principal retirement (795,000) (898,400) (103,400) (375,000)
Interest expense (692,486) (727,274) (34,788) (361,359)
Total Nonoperating
IRevenues (Expenses) (1,263,538) (1,258,028) 5,510 (584,053)
Operating Transfers (Out)
I Operating transfers in
Operating transfers (out) (615,522) (615,522) (1,612,986)
(615,522) (615,522) (1,612,986)
I Net Income (Loss)
(Budgetary Basis) $ (2.018.195) (768,903) $ 1,249292 (2,543,221)
I Adjustments
Depreciation expense (873,217) (744,370)
Capital outlay 1,159,753 2,605,244
Proceeds from obligation debt
I Principal retirement 898,400 375,000
Net Adjustments 1,184,936 2,235,874
I Net Income (Loss) (GAAP Basis) 416,033 (307,347)
Retained earnings,beginning of year 2,658,169 2,965,516
IRetained Earnings, end of year $ 3,074,202 $ 2,658.169
II 71
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CITY OF FRIENDSWOOD, TEXAS
Exhibit F-3
ENTERPRISE FUND 1110
SCHEDULE OF BONDS PAYABLE -
BY MATURITY DATE
September 30, 1996
Due During Annual Requirements for All Series Series 1969
Fiscal Year Total Total Total Principal Interest Due
Ending Principal Interest Principal and Due November 1,
Sept. 30, Due Due Interest Due November 1 May 1 Total
1997 S 880,950 $ 178,279 $ 1,059,229 $ 29,700 $ 4,952 $ 34,652
1998 940,500 143,127 1,083,627 33,000 3,032 36,032
1999 966,750 104,735 1,071,485 33,000 1,011 34,011
2000 492375 329,448 821,823
2001 396,405 114,052 510,457
2002 398,494 74,577 473,071
2003 416,247 57,964 474,211
2004 433,580 38,219 471,799 3
Totals $ 4,925 301 $ 1,040 401 $ 5.965.702 $ 95,700 $ 8.995 $ 104,695
Due During Series 1986 Series 1993
Fiscal Year Principal Interest Due Principal Interest Due
Ending Due November 1, Due March 1,
Sept. 30, November 1 May 1 Total March 1 September 1 Total
1997 $ $ $ $ 851,250 5 173327 $ 1,024,577
1998 907,500 140,095 1,047,595
1999 933,750 103,724 1,037,474
2000 139,875 251,625 391,500 352,500 77,823 430323
2001 25,155 51,345 76,500 371,250 62,707 433,957
2002 12,244 28,256 40,500 386,250 46,321 432,571
2003 11,247 29,253 40,500 405,000 28,711 433,711
2004 9,830 28,420 38,250 423,750 9,799 433,549
Totals $ 198351 $ 388,899 $ 587,250 $ 4,631,250 $ 642507 $ 5,273,757
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CITY OF FRIENDSWOOD, TEXAS
Exhibit F-4
3 ENTERPRISE FUND
SCHEDULE OF CERTIFICATES OF OBLIGATION -
BY MATURITY DATE
September 30, 1996
Due During Annual Requirements for All Series Series 1988
Fiscal Year Total Total Total Principal Interest Due
I Ending Principal Interest Principal and Due November 1,
Sept. 30, Due Due Interest Due November 1 May 1 Total
1997 $ 430,000 S 349,520 $ 779,520 $ 285,000 $ 11,613 $ 296,613
1998 155,000 327,360 482,360
I 1999 160,000 316,275 476,275
2000 170,000 304,654 474,654
2001 175,000 292,494 467,494
2002 185,000 279,797 464,797
I 2003 200,000 266,910 466,910
2004 210,000 253,945 463,945
2005 645,000 228,494 873,494
I 2006 680,000 191,064 871,064
2007 715,000 152,935 867,935
2008 760,000 112,488 872,488
2009 815,000 69,175 884,175
2010 870,000 23,381 893,381
Totals $ 6,170,000 $ 3,168,492 $ 9338,492 $ 285.000 $ 11,613 $ 296,613
Due During Series 1992 Series 1995
I Fiscal Year Principal Interest Due Principal Interest Due
Ending Due November 1, Due November 1,
Sept. 30, November 1 May 1 Total November 1 May 1 Total
1997 $ 80,000 $ 150,678 $ 230,678 $ 65,000 $ 187,229 $ 252,229
I 1998 85,000 145,109 230,109 70,000 182,251 252,251
1999 85,000 139,371 224,371 75,000 176,904 251,904
2000 90,000 133,465 223,465 80,000 171,189 251,189
II 2001 90,000 127,390 217390 85,000 165,104 250,104
2002 95,000 121,146 216,146 90,000 158,651 248,651
2003 100,000 115,265 215,265 100,000 151,645 251,645
2004 110,000 109,675 219,675 100,000 144,270 244,270
I 2005 490,000 93,530 583,530 155,000 134,964 289,964
2006 490,000 66,825 556,825 190,000 124,239 314,239
2007 485,000 40,012 525,012 230,000 112,923 342,923
I 2008 485,000 13,338 498,338 275,000 99,150 374,150
2009 815,000 69,175 884,175
2010 870,000 23,381 893,381
Totals $ 2,685,000 $ 1,255,804 $ 3,940,804 $ 3.200.000 $ 1,901,075 $ 5,101.075
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Oa SO MO Ell ea all la 1111. Ma all ON IMO ME all all
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TRUST AND AGENCY FUNDS
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I 1776 Park Trust Fund
This fund has been established by the City to account for 1776 Park assets held in Trust.
I Deferred Compensation Agency Fund
This fund is used to account for assets held for employees in accordance with the provisions of Internal Revenue
Code Section 457.
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CITY OF FRIENDSWOOD, TEXAS
Exhibit G-1
TRUST AND AGENCY FUNDS illl
COMBINING BALANCE SHEET
September 30, 1996
with comparative totals for September 30, 1995
Non—
Expendable
Trust Agency
1776 Deferred Totals
Park Compensation 1996 1995
Assets
Cash and cash equivalents $ 9,208 $ 729,374 $ 738,582 $ 618,334
Investments 14,701 14,701
Accrued interest receivable 258 258
Land 57,200 57,200 57,200
Total Assets $ 81.367 $ 729.374 $ 810.741 $ 675.534
Liabilities and Fund Balances
kil
Liabilities
Deferred compensation benefits payable $ $ 729,374 $ 729,374 $ 586,995
Fund Balances
Reserved for endowments 67,200 67,200 67,200
Unreserved:
Designated for park improvements 14,167 14,167 21,339
Total Fund Balances 81,367 81,367 88,539
Total Liabilities and
Fund Balances $ 81,367 $ 729,374 $ 810,741 $ 675,534 LI
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CITY OF FRIENDSWOOD, TEXAS
Exhibit G-2
1776 PARK TRUST FUND (NON—EXPENDABLE TRUST)
COMPARATIVE STATEMENTS OF REVENUES AND
CHANGES IN FUND BALANCE
Year Ended September 30, 1996
with comparative totals for the Year Ended September 30, 1995
I
1996 1995
Revenue
Interest on investments $ 1,428 $ 1,485
Expenses
Community services 8,600
' Revenues Over(Under)Expenditures (7,172) 1,485
Fund balances,beginning of year 88,539 87,054
Fund Balances, End of Year $ 81,367 $ 88,539
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C�
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Os UM ter OM I NM MI MI MS r — MI M — r O OM N 1111111
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GENERAL FIXED ASSETS
This account group is established to account for the fixed assets ownedby the Cityexcluding those relating to
Enterprise Fund operations. Expenditure transactions to acquire general fixed assets occur in the Governmental
Fund Types.
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CITY OF FRIENDSWOOD, TEXAS
Exhibit G-3
DEFERRED COMPENSATION AGENCY FUND
SCHEDULE OF CHANGES IN ASSETS AND LIABILITIES
Year Ended September 30, 1996
Balance Balance
October 1, September 30,
1995 Additions Deletions 1996
Assets
Deferred compensation
investments $ 586,995 $ 154.489 $ 12.110 $ 729374 3
Liabilities
Deferred compensation
benefits payable $ 586,995 $ 154.489 $ 12.110 $ 729,374
76 0
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I CITY OF FRIENDS WOOD, TEXAS
Exhibit H-1
I GENERAL FIXED ASSETS
COMPARATIVE SCHEDULES OF GENERAL FIXED ASSETS —
BY SOURCE
ISeptember 30, 1996 and 1995
I1996 1995
I General Fixed Assets
Land $ 3,164,182 $ 2,951,139
Buildings 4,362,738 3,482,953
Improvements 16,370,479 14,308,969
I Equipment
4,111,389
Construction in progress
40,585 4,480,157
2,744,327
IITotal General Fixed Assets $ 28.049373 $ 27.967.545
I Investment in General Fixed Assets From
General obligation bonds $ 4,591,258 $ 4,575,234
Time warrants and certificates of
•I obligation 4,861,441
Federal,state,and local obligations
3,198,287 2,050,917
3,124,864
Municipality 13,272,429 16,090,572
Donations 2,125,958 2,125,958
ITotal Investment in
General Fixed Assets $ 28.049.373 $ 27.967.545
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I 77
I
CITY OF FRIENDSWOOD, TEXAS
GENERAL FIXED ASSETS
SCHEDULE OF GENERAL FIXED ASSETS —
BY FUNCTION AND ACTIVITY
September 30, 1996
1
Function and Activity Land Buildings
General Government
City Manager $ $
City Secretary
Administrative Services
Total General Government
Public Safety
Police 10,542 728,007
Fire 18,000 267,322
Emergency managementI
Total Public Safety 28,542_ 995,329
Public Works I
Streets and drainage 375,408 141,816
Total Public Works 375,408 141,816
Community Services
Library 28,838 485,355
Parks and recreation 1,735,778 318,564
Community activities 308,914
Swimming pool 552,700
Buildings 442,916 2,112,760
Total Community Services 2,760,232 3,225,593
Construction in progress
Total General Fixed Assets $ 3,164.182 $ 4.362,738 I
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78 1
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I
Exhibit H-2
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I
Construction
Improvements Equipment In Progress Total
I
$ $ 23,605 $ $ 23,605
I 38,415 38,415
746,473 746,473
808,493 808,493
I
915,618 1,654,167
1,278,641 1,563,963
61,745 61,745
2,256,004 3,279,875
I
14,466,869 345,906 15,329,999
14,466,869 345,906 15,329,999
I164,020 678,213
1,064,003 292,394 3,410,739
308,914
I 717,819 15,269 1,285,788
121,788 229,303 2,906,767
I1,903,610 700,986 8,590,421
40,585 40,585
I $ 16370,479 $ 4,111,389 $ 40,585 $ 28,049,373
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I79
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I
GENERAL LONG—TERM DEBT
111 This account group is established to account for the principal outstanding on general obligation bonds and other
long—term liabilities.
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1
CITY OF FRIENDSWOOD, TEXAS 3
Exhibit H-3
GENERAL FIXED ASSETS
SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS —
BY FUNCTION AND ACTIVITY
Year Ended September 30, 1996
General General
Fixed Assets Fixed Assets
Function and October 1, Tansfers and September 30,
Activity 1995 Additions Retirements 1996
General Government
City Manager $ $ 23,605 $ $ 23,605
City Secretary 38,415 38,415
Inspections 24,202 (24,202)
Administrative Services 1,870,505 (1,124,032) 746,473
Total General Government 1,894,707 62,020 (1,148,234) 808,493
Public Safety I
Police 1,247,155 407,012 1,654,167
Fire 1,789,650 (225,687) 1,563,963
Animal control 108,716 (108,716)
Emergency management 39,917 21,828 61,745
Total Public Safety 3,185,438 428,840 (334,403) 3,279,875
Public Works
Streets and drainage 13,880,908 1,449,091 15,329,999
Sanitation 289,011 (289,011)
Total Public Works 14,169,919 1,449,091 (289,011) 15,329,999
Community Services
Library 1,638,672 (960,459) 678,213
Parks and recreation 3,630,505 (219,766) 3,410,739
Community activities 308,914 308,914
Swimming pool 703,977 581,811 1,285,788
Buildings 2,906,767 2,906,767
Total Community Services 5,973,154 3,797,492 (1,180,225) 8,590,421 1
Construction in progress 2,744,327 (2,703,742) 40,585
Total General Fixed Assets $ 27,967,545 $ 5,737,443 $ (5,655,615) $ 28,049373 I
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80 I
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CITY OF FRIENDSWOOD, TEXAS
Exhibit I—1
3 COMPARATIVE SCHEDULES OF
GENERAL LONG—TERM DEBT
3 September 30, 1996 and 1995
I1996 1995
Amount Available and to be Provided for
Ithe Payment of General Long—Term Debt
Amount available in Debt Service Fund $ 298,053 $ 56,968
IAmount to be provided for retirement of general long—term
debt 4,320,476 5,326,980
1 Total Amount Available and to be Provided $ 4,618.529 $ 5,383,948
I
General Long—Term Debt Payable
IAccretion on premium compound interest bonds $ 282,038 $ 244,186
Notes payable 181,805 384,642
I
Obligations under capital leases 219,209 223,043
ICertificates of obligation 2,100,000 2,130,000
General obligation bonds 1,835,477 2,402,077
3
Total General Long—Term Debt Payable $ 4,618,529 $ 5383,948
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81
CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF CHANGES IN GENERAL LONG—TERM DEBT
September 30, 1996 and 1995
Amounts
Date of Interest Originally
Issue Description Rate Payable Issued
1969 Revenue Bonds — Series 1969 5.5%-6.125% $ 700,000
08/15/86 Refunding Bonds — Series 1986 4.25% 7.9% 10,650,777
10/19/92 Certificates of Obligation Series 1992 5.5% 6.75% 2,160,000
04/14/93 Refunding Bonds — Series 1993 2.25% — 4.625% 3,480,000
Notes payable 598,567
Obligations under capital leases 195,924
Accretion on premium compound interest bonds
Totals
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82 1
F
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Exhibit I-2
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I
Amounts Reallocated Amounts
I Outstanding Issued Retired (To)/From Outstanding Interest
October 1, Current Current Enterprise September 30, Current
1995 Year Year Fund 1996 Year
1 $ 62,900 $ $ 13,600 $ $ 49,300 $ 3,436
756,677 514,250 242,427 18,513
I2,130,000 30,000 2,100,000 121,808
1 1,582,500 38,750 1,543,750 63,613
4,532,077 596,600 3,935,477 207,370
1 384,642 202,837 181,805
223,043 160,000 163,834 219,209
I244,186 37,852 282,038
I $ 5,383,948 $ 197,852 $ 963,271 $ $ 4,618,529 $ 207,370
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3
1
83
CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF GENERAL LONG-TERM DEBT ?
SERVICE REQUIREMENTS TO MATURITY Vo
September 30, 1996
ilk
Refunding Bonds
Due During Annual Requirements for All Series Series 1986
Fiscal Year Total Total Total Principal Interest Due
Ending Principal Interest Principal and Due March 1,
Sept.30, Due Due Interest Due March 1 September 1 Total
1997 $ 591,897 $ 203,788 $ 795,685 $ $ $
1998 481,692 175,953 657,645
1999 462,272 151,563 613,835
2000 370,411 439,000 809,411 170,958 307,542 * 478,500
2001 224,494 183,867 408361 30,744 62,756 * 93,500
2002 298,715 142,589 441304 14,965 34,535 * 49,500
2003 313,746 128,293 442,039 13,746 35,754 * 49,500
2004 333,264 111,788 445,052 12,014 34,736 * 46,750
2005 285,000 61320 346320
2006 305,000 45,238 350,238
2007 325,000 27,913 352,913
2008 345,000 9,488 354,488
Totals $ 4,336,491 $ 1,680,800 $ 6,017,291 $ 242,427 $ 475 323 $ 717,750
1
Due During
Fiscal Year
Ending Notes Payable Obligations Under Capital Leases
Sept.30, Principal Interest Total Principal Interest Total
1997 $ 181,805 $ 10,908 $ 192,713 $ 81,042 $ 12,770 $ 93,812
1998 82,192 11,622 93,814
1999 54,022 5,797 59,819
2000 1,953 247 2,200
2001
2002
2003
2004
2005
2006
2007
2008
Totals $ 181.805 $ 10,908_ $ 192,713 $ 219209 $ 30,436 $ 249,645 1
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* Includes accretion on premium compound interest bonds.
84 1
I
Exhibit I-3
I
Certificates of Obligation Refunding Bonds
I Due During Series 1992 Series 1993
Principal
Fiscal Year Principal Interest Due Interest Due
Ending Due March 1, Due March 1,
I Sept.30, March 1 September 1 Total March 1 September 1 Total
1997 $ 30,000 $ 119,783 $ 149,783 S 283,750 $ 57,776 $ 341,526
1998 80,000 116,070 196,070 302,500 46,699 349,199
1999 80,000 110,670 190,670 311,250 34.575 345,825
I 2000 80,000 105,270 185,270 117,500 25,941 143,441
2001 70,000 100,208 170,208 123,750 20,903 144,653
2002 155,000 92,614 247,614 128,750 15,440 144,190
2003 165,000 82,969 247,969 135,000 9,570 144,570
1
2004 180,000 73,785 253,785 141,250 3,267 144,517
2005 285,000 61,320 346 320
2006 305,000 45,238 350,238
I 2007 325,000 27,913 352,913
2008 345,000 9,488 354,488
Totals $ 2,100,000 $ 945328 $ 3.045 328 $ 1,543,750 $ 214,171_ $ 1,757,921
IRevenue Bonds
Due During Series 1969
I Fiscal Year Principal Interest Due
Ending Due March 1,
Sept. 30, March 1 September 1 Total
1997 $ 15,300 $ 2,551 $ 17,851
I 1998 17,000
17,000 1,562 18,562
1999 521 17,521
2000
I 2001
2002
2003.
2004
I 2005
2006
2007
2008 I
Totals $ 49.300 $ 4,634 S 53.934
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85
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CITY OF FRIENDSWOOD, TEXAS
GENERAL GOVERNMENT REVENUES BY SOURCE
7
Last Ten Fiscal Years
Function 1987 1988 1989 1990
General property taxes $ 4,421,343 $ 4,442,540 $ 4,562,856 $ 4,557,133
Sales taxes 518,939 510,574 607,349 690,327
Franchise taxes 332,432 375,755 400,986 419,062
Sanitation 525,592 545,130 542,911 595,244
Fines and forfeitures 184,359 142,516 190,106 166,982
Permits and fees 124,913 125,083 143,105 240,294
Intergovernmental revenue 94,015 48,985 53,464 50,984
Interest on investments 91,011 196,647 185,037 222„328
Other revenue 45,342 106,057 118,539 115,107
$ 6,337.946 $ 6,493,287 $ 6,804.353 $ 7,057.461
Includes General,Special Revenue,and Debt Service Funds.
Source - Accounting records of the City.
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86 1
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Table 1
F
I
1991 1992 1993 1994 1995 1996
r $ 4,749,173 $ 4,958,863 $ 5,249,517 $ 5,553,218 $ 5,865,855 $ 5,660,697
f742,725 808,405 979,890 1,001,832 1,028,528 1,439,030
456,566 541,841 530,059 570,031 863,183 852,091
733,245 780,604 838,542 966,066 1,085,149 1,017,028
166,355 171,154 174,487 217,411 266,287 353,742
286,421 337,539 319,384 296,003 234,518 401,720
28,641 34,006 32,273 48,101 46,060 40,055
232,773 153,558 154,195 107,089 193,588 238,009
139,525 208,466 219,615 330,313 354,627 224,097
$ 7,535,424 $ 7,994,436 $ 8,497,962 $ 9,090,064 $ 9,937,795 $ 10,226,469
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87
CITY OF FRIENDSWOOD, TEXAS
GENERAL GOVERNMENT EXPENDITURES BY FUNCTION
Last Ten Fiscal Years
Function 1987 1988 1989 1990
General government $ 1,473,875 $ 1,143,024 $ 1,167,194 $ 1,258,050
Public safety 1,870,538 1,934,317 2,038,066 2,173,685
Public works 1,237,644 1,128,195 1,108,423 1,196,889
Community development 249,684 257,750 281,723
Community services 727,525 814,380 768,533 949,048
Debt service 1,314,714 1,344,693 1,305,728 1,304,597
$ 6,624,296 $ 6,614,293 $ 6,645,694 $ 7,163,992
t
Includes General,Special Revenue,and Debt Service Funds.
Source — Accounting records of the City.
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88 1
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1
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IUNAUDITED STATISTICAL SECTION
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2
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Table 2
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1991 1992 1993 1994 1995 1996
$ 1,085,683 $ 1,112,882 $ 1,149,344 $ 1,478,817 $ 1,481,710 $ 1,615,770
111
2,478,564 3,061,016 2,814,658 2,846,169 3,206,222 3,329,960
1,521,841 1,537,447 1,621,896 1,783,738 1,792,014 1,805,947
289,501 326,854 386,976 413,489 463,813 450,916
1,048,606 1,087,039 1,319,689 1,426,792 1,656,146 1,686,909
1,301,928 1,315,242 1,434,052 1,427,360 1,579,490 1,202,192
$ 7,726.123 $ 8.440.480 $ 8.726,615 $ 9,376,365 $ 10.179,395 $ 10.091,694
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89
0
a.
IIII
CITY OF FRIENDSWOOD, TEXAS iik
PROPERTY TAX LEVIES AND COLLECTIONS le
0
Last Ten Fiscal Years
Fiscal Year Percent
Ended Tax Tax Total Current Tax of Levy
Sept. 30, Year Rate Tax Levy Collections Collected
1987 1986 $ 0.6950 $ 4,369,541 $ 4,245,550 97.16 %
1988 1987 0.6950 4,351,363 4,248,363 97.63
1989 1988 0.6950 4,553,066 4,433,139 97.37
1990 1989 0.6950 4,531,537 4,427,153 97.70
1991 1990 0.6950 4,636,066 4,561,109 98.38
1992 1991 0.6950 4,869,697 4,782,350 98.21
1993 1992 0.6630 5,179,275 5,081,084 98.10
1994 1993 0.6630 5,450,155 5,384,023 98.79
1995 1994 0.6630 5,779,760 5,717,509 98.92
2
1996 1995 0.6156 5,610,277 5,568,094 99.25
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1
Source — Tax assessor/collector's records.
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90
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Table 3
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Total Outstanding
I
Collections Delinquent
Delinquent as Percent Outstanding Taxes as
Tax Total Tax of Current Delinquent Percent of
I
Collections Collections Levy Taxes Levy
$ 133,831 $ 4,379,381 100.23 % $ 318,441 7.29 %
I119,687 4,368,050 100.38 301,754 6.93
79,695 4,512,834 99.12 341,986 7.51
I74,484 4,501,637 99.34 371,886 8.21
107,112 4,668,221 100.69 339,731 7.33
1 120,660 4,903,010 100.68 306,418 6.29
91,531 5,172,615 99.87 313,078 6.04 I
103,113 5,487,136 100.68 276,097 5.07
I89,977 5,807,486 100.48 248,371 4.30
54,842 5,622,936 100.23 231,973 4.13
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91
111
CITY OF FRIENDSWOOD, TEXAS
Table 4
ASSESSED AND ESTIMATED
ACTUAL VALUE OF TAXABLE PROPERTY
Last Ten Fiscal Years
I Ratio of
Fiscal Year Estimated Assessed Value
Ended Tax Assessed Actual to Estimated
ISept. 30, Year Value Value Actual Value
1987 1986 $ 628,710,940 $ 760,787,760 82.64 %
II1988 1987 626,095,422 763,454,517 82.01
1989 1988 634,729,000 729,914,210 86.96
I1990 1989 653,106,888 759,841,760 85.95
1991 1990 667,059,850 761,569,171 87.59
I1992 1991 700,373,270 806,261,160 86.87
I1993 1992 781,187,783 917,420,470 85.15
1994 1993 825,111,643 976,268,953 84.52
1995 1994 869,085,848 1,021,248,848 85.10
1996 1995 911,351,022 1,165,107,496 78.22
I
Source — Tax assessor/collector's records.
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92
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aw
CITY OF FRIENDSWOOD, TEXAS
DIRECT AND OVERLAPPING S
PROPERTY TAX RATES
Last Ten Fiscal Years
Friendswood Clear Creek
Independent Independent Clear Creek
Tax City of School School Drainage
Fiscal Year Year Friendswood District District District
Tax Rates (*)
1987 1986 $ 0.6950 $ 1.4100 $ 0.9200 $ 0.1500
1988 1987 0.6950 1.4100 0.9500 0.1500
1989 1988 0.6950 1.4100 0.9500 0.1500
1990 1989 0.6950 1.5500 1.0750 0.1500
1991 1990 0.6950 1.5500 1.2890 0.1500
1992 1991 0.6950 1.6500 1.2990 0.1500
1993 1992 0.6630 1.7200 1.4256 0.1500
1994 1993 0.6630 1.6180 1.4600 0.1450
1995 1994 0.6630 1.6090 1.4700 0.1430 3
1996 1995 0.6156 1.5900 1.4700 0.1410
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Source - Tax Department records of the various taxing authorities.
(*) Per$100 valuation.
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93
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ITable 5
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Port of Harris County
Harris Galveston Houston Harris County Hospital
ICounty County Authority Flood Control District
I $ 0.26786 $ 0.3850 $ 0.00800 $ 0.06400 $ 0.13500
I 0.29316 0.3850 0.00715 0.03720 0.13700
0.29455 0.3540 0.01091 0.03760 0.14600
0.32600 0.3965 0.01267 0.05130 0.16600
I0.31483 03965 0.01327 0.06190 0.16621
0.32188 0.4251 0.01531 0.05280 0.19621
I0.32909 0.4300 0.01496 0.05590 0.19621
0.33854 0.4650 0.01222 0.05565 0.18975
0.36281 0.4850 0.01316 0.06252 0.18350
0.04680 0.5200 0.01290 0.07600 0.12380
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94
3
CITY OF FRIENDSWOOD, TEXAS
Table 6
TAX RATE DISTRIBUTION
Last Ten Fiscal Years
I
Fiscal Year Debt Total
Ended Tax General Service Tax
Sept. 30, Year Fund Fund Rate
1987 1986 $ 0.48100 $ 0.21400 $ 0.69500
3
1988 1987 0.52000 0.17500 0.69500
1989 1988 0.50746 0.18754 0.69500
1990 1989 0.53330 0.16170 0.69500
1991 1990 0.50876 0.18624 0.695003
1992 1991 0.50900 0.18600 0.69500
1993 1992 0.50160 0.16140 0.66300 2
1994 1993 0.50250 0.16050 0.66300
1995 1994 0.51400 0.14900 0.66300
1996 1995 0.46800 0.14760 0.61560
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Source — City's tax ordinances.
Tax rates are per$100 valuation. I
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95
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CITY OF FRIENDSWOOD, TEXAS
Table 7
IPRINCIPAL TAXPAYERS
September 30, 1996
I
Percent I
of Total
Assessed Assessed
Taxpayer Type of Property Valuation Valuation
I1 . Exxon Corporation Oil and Gas $ 18,085,000 1.98 %
2 . Southwestern Bell Telephone Utility Company 13,013,860 1.43
I3 . Texas New Mexico Power Utility Company 8,928,510 0.98
I4 . Property Trust of America(Seahawk Apts.)Apartments 6,883,260 0.76
5 . Friendswood Retirement Living Ltd. Retirement Home 6,757,745 0.74
I6 . Hausman—Banfield Interests Apartments;Commercial 5,966,630 0.65
7 . Frontier Land VPLL(Salem Square) Apartments 3,300,000 036
I8 . Houston Lighting&Power Utility Company 3,183,100 0.35
9 . H.U.D. Multi Family Homes Apartments 3,030,540 0.33
10 . Bellaire Capital Partnership (Kroger 2351) Shopping Center 2,692,110 0.30
71,840,755 7.88
All other taxpayers 839,510,267 92.12
ITotals 911,351.022 100.00 %
IlSource — Tax assessor/collector's records.
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96
0
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CITY OF FRIENDSWOOD, TEXAS
REVENUE BOND COVERAGE IP
Last Ten Fiscal Years
Operating Net Operating
Number Number Expenses Revenue
Fiscal of Water of Sewer Operating Before Available for
Year Customers Customers Revenue Depreciation Debt Service
1987 6,514 6,324 $ 3,066,581 $ 1,487,668 $ 1,578,913
1988 6,626 6,432 3,071,181 1,526,297 1,544,884
1989 6,731 6,539 3,034,892 1,443,986 1,590,906
1990 6,968 6,719 3,472,772 1,597,064 1,875,708
1991 7,336 6,983 3,378,322 1,857,809 1,520,513
1992 7,521 7,171 3,567,379 2,063,694 1,503,685
1993 7,781 7,475 3,808,566 2,246,969 1,561,597
1994 8,031 7,709 3,896,444 2,305,953 1,590,4913
1995 8,210 7,878 4,394,289 2,135,227 2,259,062
1996 8,382 8,043 4,995,119 2,730,719 2,264,400
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Note A— The amounts only include Revenue bonds and do not include amounts paid by 3
the Enterprise Fund for Combination Tax and Revenue Bonds which are
secured by Tax Revenues
Source Accounting records of the City.
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97
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Table 8
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I Revenue Bond
Debt Service Requirements
Principal Interest Total Coverage
I $ 125,000 $ 77,566 $ 202,566 7.79
125,000 69,720 194,720 7.93
I125,000 61,900 186,900 8.51
I130,000 56,275 186,275 10.07
130,000 46,906 176,906 8.60
I135,000 38,916 173,916 8.65
135,000 31,022 166,022 9.41
I135,000 25,710 160,710 9.90
140,000 15,581 155,581 14.52
I45,000 10,244 55,244 (A) 40.99
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II 98
A
CITY OF FRIENDSWOOD, TEXAS
RATIO OF NET GENERAL BONDED DEBT TO ASSESSED 11,
VALUE AND NET BONDED DEBT PER CAPITA
Last Ten Fiscal Years
Fiscal Year
Ended Assessed Gross
Sept. 30, Population Value Bonded Debt
1987 23,000 $ 760,787,760 $ 10,065,778
1988 22,500 763,454,517 9,405,7781
1989 23,500 729,914,210 8,750,778
1990 22,710 759,841,760 8,080,7787
1991 22,814 761,569,171 7,365,778
1992 25,680 806,261,160 6,575,778 3
1993 26,333 781,187,783 9,061,649
1994 27,356 825,111,643 8,160,895
1995 27,700 869,085,848 4,776,263 (1)
2
1996 28,602 911,351,022 4,217,515
Source — Tax assessor/collector and accounting records of the City.
(1) Reflects reallocation of debt to Enterprise Funds in 1994-95 in the amount of$2.5 million.
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Table 9
I
1 Ratio of Net
Less Debt Bonded Debt Net Bonded
Service Net to Assessed Debt
IFunds Bonded Debt Value Per Capita
$ 518,998 $ 9,546,780 1.25 % 415
I325,894 9,079,884 1.19 404
280,793 8,469,985 1.16 360
1 57,308 8,023,470 1.06 353
50,854 7,314,924 0.96 321
I78,244 6,497,534 0.81 253
I 45,501 9,016,148 1.15 342
47,281 8,113,614 0.98 297
I56,968 4,719,295 0.54 (1) 170
298,053 3,919,462 0.43 137
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I 100
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41
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CITY OF FRIENDSWOOD, TEXAS
Table 10
RATIO OF ANNUAL DEBT SERVICE EXPENDITURES A
FOR GENERAL BONDED DEBT
TO TOTAL GENERAL EXPENDITURES
tip
Last Ten Fiscal Years
II
Ratio of
Interest Total Debt Total Debt Service
Fiscal and Fiscal Service General Requirements
Year Principal Charges Requirements Expenditures to Expenditures
1987 $ 620,386 $ 694,328 $ 1,314,714 $ 6,624,296 19.85 %
1988 690,323 654,370 1,344,693 6,614,293 20.33
1989 687,029 618,699 1,305,728 6,645,694 19.65
1990 721,245 583,352 1,304,597 7,163,992 18.21
1991 763,192 538,736 1,301,928 7,726,061 16.85
1992 830,000 485,242 1,315,242 8,440,480 15.58
1993 945,000 489,052 1,434,052 8,726,615 16.433
1994 960,000 433,270 1,393,270 9,376,365 14.86
1995 910,000 358,551 1,268,551 10,179,395 12.46 1
1996 963,272 238,920 1,202,192 10,091,694 11.91
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CITY OF FRIENDSWOOD, TEXAS
Table 11
ICOMPUTATION OF LEGAL DEBT MARGIN
September 30, 1996
I
Net assessed value $ 911,351,022
I
Plus exempt property 253,756,474
ITotal appraised value $ 1.165,107,496
Debt limit — $2.50 per$100 valuation* 29,127,687
I Amount of debt applicable to debt limit:
Total bonded debt 4,618,529
I Less:
Assets in debt service funds available for payment
of principal 298,053
ITotal amount of debt applicable to debt limit 4,320,476
Legal debt margin $ 24.807.211
I
I
* The City of Friendswood has no general obligation legal debt limit other than a ceiling on the
I tax rate as specified by the State of Texas. The prescribed maximum is $2.50 per $100
valuation.The calculation is the maximum amount that the City could levy for debt payments
for one year. The maximum tax amount is substantially more than the total outstanding debt
for the City which will be paid out over the next 12 years.
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it
CITY OF FRIENDSWOOD, TEXAS 7
Table 12
COMPUTATION OF DIRECT AND OVERLAPPING DEBT V
it
September 30, 1996
Percentage
Applicable City of
Net Debt Outstanding to City of Friendswood's
Name of Governmental Unit Outstanding as of Friendswood Share of Debt
Friendswood Independent
School District $ 12,610,309 08/_31/96 100.00 % $ 12,610,309
Clear Creek Independent
School District 124,235 08/31/95 3.94 4,895
Galveston County 40,000,000 12/31/95 5.68 2,272,000
Harris County 2,235,827,000 2/28/96 0.15 3,353,741
Harris County Flood
Control District 228,198,000 2/28/96 0.15 342,297
Port of Houston Authority 114,322,000 2/28/96 0.15 171,483
Total Net Overlapping Debt 18,754,724
City of Friendswood 3,919,462
Total Net Direct and Overlapping Debt $ 22.674,186
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CITY OF FRIENDSWOOD, TEXAS
Table 13
DEMOGRAPHIC STATISTICS
Last Ten Fiscal Years
I
I Fiscal Per Capita Median Unemployment
Year Population Income Age Rate (A)
I1987 23,000 $ 29,273 29.7 10.3 %
1988 22,500 29,743 29.7 6.8
I1989 23,500 20,409 32.9 6.4
1990 22,710 N.A. N.A. 5.0
1 1991 22,814 N.A. N.A. 7.4
1992 25,680 N.A. N.A. 8.9
I1993 26,333 N.A. N.A. 7.6
I 1994 27,356 N.A N.A 7.8
1995 27,700 N.A. N.A 7.8
I1996 28,602 N.A. N.A. 3.7 (B)
N.A. — Not Available
I
(A) Source — Texas Employment Commission
I (B) For the year 1996 the unemployment rate is for the City of Friendswood.For years prior to 1996 the rate
was for Galveston County since rates were not available for the City of Friendswood.
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CITY OF FRIENDSWOOD, TEXAS 3
Table 14
PROPERTY VALUE AND CONSTRUCTION
Last Ten Fiscal Years
Fiscal Property
Year Value Construction
1987 $ 760,787,760 $ 17,337,714
1988 763,454,517 19,712,294
1989 729,914,210 14,998,749
1990 759,841,760 37,068,554
1991 761,569,171 46,975,722
1992 806,261,160 63,126,050
1993 917,420,470 61,604,061
1994 976,268,953 64,653,799
1995 1,021,248,848 34,680,410
1996 1,165,107,496 42,440,747
Source:City's Permits Department.
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CITY OF FRIENDSWOOD, TEXAS
Table 15
ISCHEDULE OF INSURANCE COVERAGE
September 30, 1996
I
IAmount of Term
Type Company Policy# Coverage Deductible From To Premium
I
All Risk �
Coverage includes
Flood and Earthquake)
I Real and personal property T M L * 6435-96 $ 12,672,601 5,000 10/1/95 9/30/96 $ 13,832
Boiler and machinery T M L 6435-96 1,000,000 5,000 10/1/95 9/30/96 3,122
Mobil equipment T M L 6435-96 595,838 5,000 10/1/95 9/30/96 2,157
I
Liability
I Law enforcement Automobile liability Nat Casualty TBD 1,000,000 5,000 10/1/95 9/30/96 26,528
T M L 6435—96 1,000,000 1,000 10/1/95 9/30/96 41,808
Automobile physical damage T M L 6435-96 1,553,988 1,000 10/1/95 9/30/96 15,431
I Automobile catastrophe T M L 6435-96 500,000 10,000 10/1/95 9/30/96 1,100
Public officials and employee
liability—errors/omissions Nat Casualty TBD 1,000,000 7,000 10/1/95 9/30/96 20,397
General liability T M L 6435-96 2,000,000 1,000 10/1/95 9/30/96 33,546
I
Fidelity
I Surety—Finance director Truman 801674 50,000 5/26/96 5/26/97 250
Surety—City manager Truman 400IiX 50,000 1/5/96 1/5/97 250
Surety—Tax Assesser/
I Collector Truman EX801603 50,000 7/1/96 7/1/97 175
Notary errors/omissions Truman 18200783 20,000 2/17/96 2/17/97 257
I Catastrophe Property
Windstorm and hail AmGrip 169199-01 6,928,411 5,000 4/14/96 4/14/97 18,395
Flood Truman 420007625177 256,500 500 4/7/96 4/7/97 464
111 AD & D
FVFD—accidental&ADD Truman 3242 up to 25,000 3/27/96 3/27/97 3,672
I
* T M L — Texas Municipal League Intergovernmental Risk Pool
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i&
CITY OF FRIENDSWOOD, TEXAS
REQUIRED SUPPLEMENTARY INFORMATION 0
TEXAS MUNICIPAL RETIREMENT SYSTEM
ANALYSIS OF FUNDING PROGRESS
Last Ten Calendar Years 7
Plan Net Assets Pension Unfunded
Calendar Available Benefit Percentage Pension
Year for Benefits Obligation Funded Obligation
1986 $ 979,872 $ 1,321,465 74.2 % $ 341,593
1987 1,265,501 1,632,280 77.5 366,779
1988 1,582,085 1,878,557 84.2 296,472
1989 1,866,216 2,204,025 84.7 337,809
1990 2,223,461 2,978,946 74.6 755,485
1991 3,323,037 3,606,837 92.1 283,800
1992 3,954,115 4,245,973 93.1 291,858
1993 4,547,707 5,418,187 83.9 870,480
1994 5,190,936 5,862,152 88.6 671,216
1995 5,838,306 6,559,465 89.0 721,159
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N.A. — Not Available
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Table 16
I
IUnfunded
Pension
I Benefit as a
Annual Percentage City Average
Covered of Covered Contribution City
I Payroll Payroll to TMRS Rate
$ 2,132,015 16.0 % $ 73,092 3.4 %
I2,516,687 14.6 85,739 3.4
2,615,976 11.3 86,290 3.3
I2,617,976 12.9 97,716 3.7
2,955,563 25.6 171,244 5.8
1 3,051,394 9.3 210,370 6.9
3,339,878 8.7 208,440 6.2
I3,469,512 25.1 207,130 6.0
3,892,013 17.2 257,192 6.6
4,150,533 17.4 284,653 6.9
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I 108
CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF IMPACT FEE PROJECT CHANGES
Year Ended September 30, 1996
South South
Friendswood Friendswood
Surface Water Service Area Service Area
Facilities Water Wastewater
Improvements Improvements Improvements
Increases
Impact fees $ 179,860 $ 7,618 $ 26,030
Interest 3,273 1,550 474
183,133 9,168 26,504
Decreases
Improvements:
Manhole rehabilitation
Transfer for Debt Service
Payments:
1988 Certificate of Obligation 142,800
1992 Certificate of Obligation 12,915
1995 Refunding Bonds 83,931
142,800 83,931 12,915
Net Increase (Decrease) 40,333 (74,763) 13,589
Balance,beginning of year 77,534
Balance, End of Year $ 40.333 $ 2371 $ 13,589
Source — Citysubsidiary records tracking project information regarding impact fees received bythe
Enterprise Fund. Impact fees are recorded as additions to contributed capital in the Enterprise
Fund.
(1) Interest allocated on percentage of beginning equity and impact fee revenues.
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1
Table 17
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1
' Other
Water and
Wastewater
Improvements Totals
$ 28,217 $ 241,725
513 5,810 (1)
28,730 247,535
1
26,501 26,501
142,800
12,915
' 83,931
26,501 266,147
' 2,229 (18,612)
' 77,534
' $ 2229 $ 58,922
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CITY OF FRIENDSWOOD, TEXAS
Table 18
MISCELLANEOUS STATISTICAL DATA Page 1 of 2
September 30, 1996
Date of incorporation October 15, 1960
Date of present charter Adopted Home Rule Charter
October 16, 1971
Form of government Council— Manager
Area 22.70 square miles
Miles of Streets
Streets — Paved 111.95 miles
Streets — Unpaved 2.12 miles
Fire Protection
Number of stations 3
Number of employees(Full—time equivalent) 6.00
Number of volunteers 98
Fire Prevention
Number of employees(Full—time equivalent) 2.80
Number of volunteers —
Police Protection
Number of stations 1
Number of sworn officers(Full—time equivalent) 38.48
Number of patrol units 12
Recreation
Number of parks 6
Size of parks 110.5 acres
Number of golf courses —
Number of swimming pools 1
Number of tennis courts 4
Miles of storm sewers 84.74 milesOP
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CITY OF FRIENDSWOOD, TEXAS
Table 18
MISCELLANEOUS STATISTICAL DATA Page 2 of 2
September 30, 1996
I
I Education
Friendswood Independent School District:
Number of teachers 340
Number of students 4,517
IClear Creek Independent School District:
Number of teachers 1,600
Number of students 27,600
1
City Employees
I Department heads 6
Employees:
Full—time 120.00
Part—time(Full—time equivalent) 28.03
ITotal 154.03
I Election
Number of Votes Cast:
Last City Election — Regular Election 2,075
Water
Source Ground Water Surface Water
I Average daily consumption 1,144,799 gallons 2,437,683 gallons
Maximum daily consumption 3,595,000 gallons 4,093,000 gallons
Water mains 115 miles
Number of connections 8,382
I
Sewer Blackhawk
I Average daily flow 2,635,478 gallons
Maximum daily flow 8,699,000 gallons
Sanitary sewer mains 115 miles
Number of connections 8,043
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112