HomeMy WebLinkAbout1999 09 30 Comprehensive Annual Financial Report - City of Friendswood ' Comprehensive p e
' Annual Financial Report
' of the
' City of Friendswood, Texas
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Fiscal Year Ended
September 30, 1999
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tOfficials Issuing Report
Ronald E. Cox
City Manager
' Roger C.Roecker
Director of Administrative Services
ICITY OF FRIENDSWOOD, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
I Year Ended September 30, 1999
TABLE OF CONTENTS
IExhibit
/Table Pane
INTRODUCTORY SECTION
I Letter of Transmittal 1
Organization Chart 11
Certificate of Achievement for Excellence in Financial Reporting 12
IPrincipal Officials 13
FINANCIAL SECTION
Independent Auditors' Report 17
IGENERAL PURPOSE FINANCIAL STATEMENTS
Combined Balance Sheet-All Fund Types and Account Groups A-1 20
Combined Statement of Revenues, Expenditures and Changes in Fund
Balances- All Governmental Fund Types A-2 24
Combined Statement of Revenues,Expenditures and Changes in Fund
Balances—Budget(GAAP Basis)and Actual—General, Special
IRevenue,and Debt Service Funds A-3 26
Combined Statement of Revenues,Expenses and Changes in Retained
Earnings/Fund Balance-Proprietary Fund Type and Non-
, Expendable Trust Fund A-4 28
Combined Statement of Cash Flows-Proprietary Fund Type and Non-
Expendable Trust Fund A-5 30
I Notes to Financial Statements A-6 32
Required Pension System Supplementary Information A-7 52
I COMBINING,INDIVIDUAL FUND AND ACCOUNT GROUP
STATEMENTS AND SCHEDULES
111 Governmental Fund Types
General Fund:
1 Comparative Balance Sheet B-1 56
Statement of Revenues,Expenditures and Changes in Fund Balance -
Budget and Actual B-2 57
1 Special Revenue Funds:
Combining Balance Sheet C-1 66
Combining Statement of Revenues, Expenditures and Changes in Fund
IBalance C-2 67
Statement of Revenues, Expenditures, and Changes in Fund Balance-
Budget and Actual (Police Investigation) C-3 68
IStatement of Revenues, Expenditures, and Changes in Fund Balance-
Budget and Actual (Fire/EMS Donations) C-4 69
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CITY OF FRIENDSWOOD, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
Year Ended September 30, 1999
TABLE OF CONTENTS
Exhibit 1
/Table Pace
FINANCIAL SECTION(continued)
COMBINING,INDIVIDUAL FUND AND ACCOUNT GROUP
STATEMENTS AND SCHEDULES(continued) I
Governmental Fund Types(continued)
Debt Service Fund:
Comparative Balance Sheet D-1 72
Statement of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual D-2 73
Proprietary Fund Type
Enterprise Fund:
Comparative Balance Sheet E-1 76
Schedule of Revenues, Expenses and Changes in Retained Earnings-
Budget and Actual (Non-GAAP Budgetary Basis) E-2 77
Schedule of Bonds Payable by Maturity E-3 78
Schedule of Certificates of Obligation by Maturity Date E-4 79
Account Groups
General Fixed Assets:
Comparative Schedules of General Fixed Assets by Source F-1 83
Schedule of General Fixed Assets by Function and Activity F-2 84
Schedule of Changes in General Fixed Assets by Function and Activity F-3 86
General Long-Term Debt: 1
Comparative Schedules of General Long-Term Debt G-1 89
Schedule of Changes in General Long-Term Debt G-2 90
Schedule of General Long-Term Debt Service Requirements to
Maturity G-3 92
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CITY OF FRIENDSWOOD, TEXAS
1 COMPREHENSIVE ANNUAL FINANCIAL REPORT
Year Ended September 30, 1999
TABLE OF CONTENTS
111
Exhibit
/Table Page
UNAUDITED STATISTICAL SECTION
General Government Revenues By Source 1 96
General Governmental Expenditures by Function 2 98
Property Tax Levies and Collections 3 100
I Assessed and Estimated Actual Value of Taxable Property 4 102
Tax Rate Distribution 5 103
Direct and overlapping Property Tax Rates 6 104
Principal Taxpayers 7 106
Ratio of Annual Debt Service Expenditures for General Bonded Debt to
Total General Expenditures 8 107
Revenue Bond Coverage 9 108
1 Ratio of Net General Bonded Debt to Assessed Value and Net Bonded
Debt Per Capita 10 110
Computation of Direct and Overlapping Debt 11 112
Miscellaneous Statistical Data 14 113
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City of Friendswood
1 N `1
��, 1• .l y
March 30,2000
To the Honorable Mayor and
Members of the City Council
The comprehensive annual financial report of the City of Friendswood for the fiscal year ended
September 30, 1999, 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 are accurate in all material respects and are
1 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 auditor's 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, 1999. The City did not
expend more than $300,000 in Federal or State funds during 1998-99.
This report includes all funds and account groups of the City. Friendswood Independent School
District, Clear Creek Independent School District, Galveston County, Harris County, Clear Creek
Drainage District and Friendswood Volunteer Fire Department have not met the established criteria
for inclusion in the 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 paid operating and management fees during the year in the
1 amount of$806,177. The City's share of production pumping cost in the Southeast Water Purification
Plant was 3.75% and paid operating fees in the amount of$353,283 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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RANGE OF CITY SERVICES PROVIDED
Water and Sewer
The City provides water and sewer services for residential and commercial locations. 20 employees
are responsible for maintaining the system, as well as billing and collecting for the 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
56 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 members of the Friendswood Volunteer Fire Department. The City employs a Fire Marshal, an
Assistant Fire Marshal, one Administrative Secretary, one full-time fire fighter 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 1
The street department is responsible for the repair and maintenance of all city streets and roadside
drainage. This department consists of twelve employees. I
Sanitation
The city's solid waste services, including curbside pickup of recyclable materials, are contracted to a
private firm. Residential pickup is twice weekly.
Parks
The Parks and Recreation Division of the Community Services Department oversees 110.5 acres of
parkland, including four tennis courts, a swimming pool, picnic areas and 35.45 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 southern Harris
and northern Galveston Counties.The City's population is currently estimated at 30,465. The economy is
linked closely to that of Houston and the Clear Lake area. The City of Friendswood is a member of the
Clear Lake Area Economic Development Foundation (CLAEDF). CLAEDF is charged with retaining
current businesses and associated jobs, as well as recruiting other corporations to the area.
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1 The Clear Lake area's economy has become more diverse, featuring aerospace, petrochemical, tourism,
boating and recreation industries. The NASA/Johnson Space Center, the Bayport petrochemical complex,
Ellington Field and the University of Houston-Clear Lake are key players in the area's economy.
According to CLAEDF estimates, "750,000 people work within a 45-mile drive time of the Clear Lake
area. The local economic base, comprised of an estimated 7,000 establishments and 93,000 employees,
rests solidly on four supports and a bedroom community linkage to Houston. The first support is the
aerospace industry. An equally large and stable second support is the specialty chemical industry. The
third and growing component is tourism, and the fourth is the boating and recreation sector. The region's
high-tech work force, strategically located between the Texas Medical Center and the University of Texas
' Medical Branch at Galveston, attracts many new bio-technology, computer software, engineering and
special chemical services companies." With a unique blend of high-tech aerospace and specialty
chemical industry base, upscale commercial,retail and boating facilities,and a sought-after quality of life,
the region continues to be a robust part of Houston's regional economic expansion.
MAJOR INITIATIVES
For the Year.
' During the 1998-99 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 and Drainage
The main street improvement project consisted of San Joaquin Parkway for 1998-99. The street and
sidewalk improvements were completed at a combined cost of$960,547. In addition, Magnolia Street
was reconstructed and improved from an asphalt street with open ditches, to a concrete street with curbs
and gutters. The City's "speed hump" program was continued with construction occurring on the
following streets: Lucian, Whittier Oaks, South Shadowbend, Tanglewood, West Castlewood, Mary Ann
and Quaker. These improvements were budgeted at $12,500. Traffic lights were installed on Sunset at
1 West Castlewood and at Falling Leaf. The City and Friendswood Independent School District (FISD)
partnered on these lights to improve traffic safety around Friendswood High School. FISD agreed to pay
$100,000 of the $209,000 project cost.
Facilities
The Activities Building renovation was completed at a total cost of$199,212. The City received partial
funding for this project from Galveston County ($35,000) and the Texas Parks and Wildlife Commission
($50,540). In addition,roofs were replaced on the Activities Building and the Public Safety Building, at a
budgeted cost of $57,600. The Stevenson Park swimming pool was resurfaced for approximately
1 $60,000. $60,000 was also earmarked to remove the Public Works underground fuel tanks. These were
replaced with above ground tanks.
1 Water and Sewer
$50,000 is set aside for the repair of various water and sewer lines within the City's neighborhoods. No
1 specific lines were identified. The City will continue the annual water meter replacement program of
about $25,000. Two lift stations were added to the City's Supervisory Control And Data Acquisition
(SCADA) monitoring system at a projected cost of$10,000 each.
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Management Information Systems 1
A Citywide local area network was the last major component of the City's first master plan for its
Management Information Systems. Fiber optic cabling and network hardware were installed to connect1
all personal computers and printers in the City's four major sites: City Hall, Public Safety, Public Works
and the Library. Three servers were installed to provide the following services: firewall security, E-mail,
E-fax, Internet, virus protection, file and print. All new personal computers were replaced and Microsoft
Office software was standardized throughout the City. Networked peripheral hardware, including
printers, scanners and CD towers were installed. City employees were trained in Microsoft Windows,
Word and Excel. The cost of this project was $435,000. One of the benefits of this project was to bring
the City's hardware and software into Y2K compliance. The City's computer systems survived our
entrance into the new millennium with no significant problems.
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FOR THE FUTURE
Streets
The funds typically budgeted for the street improvement program will be used construct the road entering
into Centennial Park. $300,000 is budgeted for streets and drainage in the park. $35,000 is budgeted for
the asphalt street program. The sidewalk improvement program will continue with a budget of$25,000.
Parks and Recreation
Parking at City Hall will be expanded to provide additional visitor parking for City Hall and Stevenson
Park visitors. The estimated cost is$60,000.
City Facilities
Facility improvements will include a roof replacement at the Library at an estimated cost of$40,000. The
park bleachers will be replaced at Renwick Park at a cost of$19,200. The open balconies at the City
Hall building will be enclosed to provide additional office space at an estimated cost of$175,000. 1
Fire
A Pierce Dash 100' aerial platform fire truck will be acquired in the next fiscal year. The total cost of
this piece of equipment is $635,000 and will be financed over an eight-year period.
Water and Sewer 1
$50,000 is set aside for the repair of various water and sewer lines within the City's neighborhoods. No
specific lines were identified. The City will continue the water meter replacement program. The funding
for this program is increasing by $15,000 for a total of$40,000.
A number of water and sewer improvements are planned for 1999-00. These include: replacing the
Coward's Creek 24" sanitary trunkline; constructing the Moore/Mandale waterline system loop; replacing
the E. Heritage 8" sanitary line; installing a 16" waterline from Melody to Sunset; replacing the
Blackhawk waterline from FM 2351; constructing a new sewerline to service the Autumn Creek
subdivision and rehabilitating two ground storage tanks. The projected cost of these improvements is
$4,900,000. I
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' DEPARTMENT FOCUS
Each year the City will select a department to highlight for its efforts and accomplishments. For 1998-99
the police department has been chosen for review.
The department is organized in three divisions: Patrol, Special Operations and Staff Services. The
department is authorized 40 full time peace officers: 16 full time and 0.97 part time civilians.
The police department is a 24-hour a day, year-round service. Primary activities provide uniformed
patrol, specialized investigative and crime scene service, and selective enforcement of traffic laws. On
demand, the department is ready to manage critical incidents arising from man-made or weather-related
disasters; to contain and minimize risks from persons who threaten violence against others or who are out
of control from emotional, drug, alcohol or other substance related problems. A 24-hour communications
center in the department supports police, fire and emergency medical units in both day-to-day and
emergency incidents, and the delivery of animal control services. Center staff is the voice of all city
' departments after normal working hours, on weekends and holidays.
Department efforts go beyond answering citizen calls for service. A problem-solving component within
' the patrol division is part of a large effort to maintain and expand a community-police partnership in the
neighborhood level. This includes making available a broad range of anti-crime presentations, which
emphasize both personal safety for adults, child safety and the protection of home and property. It also
includes support for citizen-run Neighborhood Watch groups and for parents who seek to concentrate on
child safety in light of recent events with the City. The department also delivers the Drug Awareness
Resistance Education(DARE)program to three elementary school serving Friendswood students.
' As the City's growth continues into the 2000's, the police department's commitment to personal, caring
service will remain its hallmark.
FINANCIAL INFORMATION
Management of the City is responsible for establishing and maintaining an internal control structure
1 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.
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.
1 Annual and project budgets are also adopted for the Proprietary and Capital Projects Funds,respectively.
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 City
continues to meet its responsibility for sound financial management.
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General Government Functions 1
Revenues for general government functions (General, Special Revenue and Debt Service Funds) totaled
approximately $12.2 million in 1999,an increase of approximately$556,724 over 1997-98 revenues. The
amount of revenue from various sources and the increase(decrease) over the preceding year are shown in
the following tabulation:
Increase I
Percent of (Decrease) Percent
Revenue Source Amounts Total from 1998 Change I
Property taxes $ 6,310,919 51.7% $ 353,433 5.9%
Sales taxes 1,855,121 15.2% 49,330 2.7% 1
Franchise tax 821,943 6.7% 20,234 2.5%
Sanitation 1,013,415 8.3% 30,983 3.2% I
Fines and forfeitures 332,659 2.7% 28,642 9.4%
Permits and fees 635,905 5.2% (63,527) -9.1%
Intergovernmental 553,352 4.5% 206,473 59.5%
Earnings on investments 292,886 2.4% 70,300 31.6%
Other 386,084 3.2% (139,144) -26.5%
$ 12,202,284 100.0% $ 556,724 4.8% 1
Assessed valuations of approximately $1.028 billion represented an increase of 4 percent over the
preceding year. The net taxable assessed valuations are set at 100%of market value as determined by the 111
Galveston County and Harris County Appraisal Districts, less exemptions or abatements. The adjusted
tax levy for the 1999 fiscal year of approximately $6.3 million, increased by approximately $400,000 or
6.9 percent over the prior year tax levy. Current tax collections of approximately $6.2 million, or 99
percent of the tax levy, are up approximately $385,000 (6.6%) from last year. The ratio of total
collections (current and delinquent)to the current tax levy was 100.38 percent.
The City had approximately $207,000 in delinquent taxes outstanding as of September 30, 1999, which I
represents 3.3 percent of the current tax levy. Delinquent tax collections were $3,324 less than the prior
fiscal year.
Allocations of property tax levy for the 1999 fiscal year and the preceding two fiscal years are as follows
(tax rate per$100 of assessed value):
Purpose 1998-99 1997-98 1996-97 I
General Fund $ 0.5610 $ 0.5276 $ 0.4961 I
General Obligation Debt 0.0515 0.0685 0.1084
Total Tax Rate $ 0.6125 $ 0.5961 $ 0.6045
The City's sales taxes increased by approximately $49,330. This increase is attributable to the growth in
both population and commercial establishments within the City.
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I New home and commercial construction remained approximately the same as in prior year with a slight
decline in building permits and fees. Permits and fees decreased by approximately $63,000. The total
amount of new construction for the current fiscal year was approximately$74.5 million, down from$90.7
Imillion for 1997-98, a decrease of 18 percent.
Expenditures for general government functions (General, Special Revenue and Debt Service Funds)
I totaled approximately $12.2 million an increase of approximately $70,000 over 1997-98 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:
IIncrease
Percent of (Decrease) Percent
IFunction Amounts Total from 1998 Change
General government $ 2,051,684 16.8% $ 114,588 5.9%
I Public safety 4,166,008 34.1% 122,216 3.0%
Public works 1,601,048 13.1% (345,855) -17.8%
Sanitation 980,681 8.0% (7,741) -0.8%
I Community development 522,128 4.3% 109,104 26.4%
Community services 2,193,860 18.0% 288,934 15.2%
Debt service 698,546 5.7% (210,823) -23.2%
I $ 12,213,955 100.0% $ 70,423 0.6%
1 General government expenditures increase resulted primarily from the addition of a Senior Accountant
position in Administrative Services at a cost of about $42,000. The City Secretary's Office also
purchased an automated filing system for$46,225.
IThe Public Safety increase in expenditures was due to an implementation of a pay increase for the part-
time firefighter pool of$48,279. New recording equipment for the Communications Office was acquired
I at a cost of $36,510. $10,402 was expended to purchase an AM radio transmitter for Emergency
Management. This office also acquired two handheld radios and a base unit at a cost of$10,361.
I Public works expenditures reflect a decrease of $345,855. This variance comes from our Street
Improvement Program. The prior year expenditures totaled $1,036,565 compared to 1998-99
expenditures of$550,907. The prior year expenditures included unexpended street capital funds from
1 1996-97, in effect almost doubling the amount expended in 1997-98.
Expenditures in Community Development grew by $109,104. Most of this growth came from two
sources: $40,289 for a new Building Inspector position and$45,300 to purchase three new trucks.
ICommunity Services increased by $288,934. A new Parks Laborer position was added for$29,004. The
Stevenson Park swimming pool was resurfaced at a cost of $59,057 and the Activities Building was
1 renovated, including a new roof. The total of this renovation was$231,212.
Debt service expenditures declined by $210,823 reflecting a reduction in the City's general obligation
I debt.
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Fund Balance Levels
Fund balances in the major operating funds were maintained at budgeted levels. Net changes in these
fund balances are tabulated below:
Net
Beginning Increase Ending Fund I
Fund Fund Balance (Decrease) Balance
General $ 2,609,959 $ 727,645 $ 3,337,604
Special Revenue (515) 12,209 11,694 I
Debt Service 187,908 (114,564) 73,344
Enterprise Fund Operations I
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: I
1999 1998 I
Operating and investment revenues $5,482,707 $ 5,815,425
Operating expenses before depreciation 2,781,480 2,679,707
Net Revenue Available for Debt Service $2,701,227 $ 3,135,718
Revenue Bond Debt Service $ 36,032 $ 36,032
Coverage(income available for revenue
bond debt service divided by annual I
revenue bond debt service) 75.0 87.0
Number of customers
Water 9,123 8,893
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Sewer 8,679 8,377
Non-Expendable Trust Fund Operation
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 approximately $78,000
as of September 30, 1999.
Cash Management I
Cash temporarily idle during the year was invested in Texpool, Lone Star, MBIA,and LOGIC investment
pools as well as U.S. government securities. The City earned approximately $302,000 on these
investments during fiscal year 1999.
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. 1
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Debt Administration
The ratio of net general obligation debt paid from governmental fund resources to assessed valuation and
e 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:
1 Percent of
Debt to
Assessed Debt Per
Description Amount Value Capita
Net direct bonded debt $ 2,725,333 0.3% $ 87
Overlapping debt 43,940,131 4.3% 1,409
Total Direct and
Overlapping Debt $ 46,665,464 4.5% $ 1,496
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 1999. During the year the
City's debt retirements amounted to $935,706 of General Long Term Debt Group debt and $1,645,010 of
Enterprise Fund debt.
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
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 Lairson, P.C., Has performed
such an audit 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, 1998. This was the eleventh 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's
requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.
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Acknowledgments I
The preparation of the comprehensive annual financial report was made possible by the dedicated 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. I
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, I
Roger C. Roecker
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Director of Administrative Services
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I CITY OF FRIENDSWOOD,TEXAS
ORGANIZATION CHART
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I MAYOR
AND
COUNCIL
II I I I I I I
Appointed Friendswood City City City Municipal City
Boards and Volunteer Secretary Manager Attorney Judge Prosecutor I
AD HOC Fire
Committees Department
I I I I I I I
Administrative Community Police Fire Marshal Public Community
Services Development Emergency Works Services
IManagement
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Certificate of
Achievement 1
for Excellence 1
in Financial
Reporting
Presented to
iof Fri n w 1
City e ds ood,
Texas 1
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
September 30, 1998 1
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.
1
WGE OFF
Can. '��-�: /✓
OU . ` President
'� cowe�u� s
•fes SEAL
anus
tor,„t
Executive Director
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CITY OF FRIENDSWOOD, TEXAS
IPRINCIPAL OFFICIALS
September 30, 1999
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Elected Officials Position Term
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Expires
Harold L. Whitaker Mayor May 2000
I Kitten Hajecate Council Member—Position No. 1 May 2000
Jerry Erickson Council Member—Position No.2 May 2002
Tom Manison Council Member—Position No. 3 May 2000
IKim Wayne Brizendine Council Member—Position No. 4 May 2001
Larry Taylor Council Member—Position No. 5 May 2002
1 Mel P. Measeles Council Member—Position No. 6 May 2001
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Appointed Officials Position
IRonald E. Cox City Manager
Deloris McKenzie City Secretary
IJon Branson Director of Community Services
Rebecca Carbone Tax Assessor-Collector
I Mickiel G. Hodge Community Development Director
Melvin L. Meinecke Director of Public Works
Olson& Olson City Attorney
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Terry Byrd Fire Marshal/ Emergency Management
Coordinator
IRoger C. Roecker Director of Administrative Services
Jared D. Stout Police Chief
IJames W. Woltz Judge—Municipal Court
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FINANCIAL SECTION
15
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IlLt
11 Greenway Plaza,Suite 1515 Null A' airson One Sugar Creek Blvd.,Suite 1150
Houston,TX 77046 Null 1 I�G1 1 l Sugar Land,TX 77478
' (713)621-1515 CERTIFIED PUBLIC ACCOUNTANTS (281)242-8600
Fax:(713)621-1570 PROFESSIONAL CORPORATION Fax:(281)242-7333
1 Independent Auditors' Report
To the Honorable Mayor and Members
of the City Council
City of Friendswood, Texas
We have audited the accompanying general-purpose financial statements of the City of Friendswood,
Texas, as of and for the year ended September 30, 1999. These general-purpose financial statements are
the responsibility of the City's management. Our responsibility is to express an opinion on these general-
purpose financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards
' require that we plan and perform the audit to obtain reasonable assurance about whether the general-
purpose-financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the general-purpose financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall 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, 1999, and the
results of its operations and the cash flows of its proprietary fund type and similar 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 and 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 City's general-purpose financial statements. Such information has been subjected to
' the auditing procedures applied in the audit of the general-purpose financial statements and, in our
opinion, is fairly presented in all material respects in relation to the general-purpose fmancial statements
taken as a whole.
The Required Pension System supplementary Information listed in the table of contents is not a required
part of the general-purpose financial statements but is supplementary information required by the
Government Accounting Standards Board. We have applied certain limited procedures, which consisted
principally of inquiries of management regarding the methods of measurement and presentation of the
additional information. However, we did not audit the information and express no opinion on it.
Houston, Texas
March 12, 2000
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IGENERAL PURPOSE FINANCIAL STATEMENTS
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CITY OF FRIENDSWOOD, TEXAS
COMBINED BALANCE SHEET-
ALL FUND TYPES AND ACCOUNT GROUPS
September 30, 1999
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Proprietary
Governmental Fund Types Fund Type
Special Debt
General Revenue Service Enterprise
Assets and Other Debits
Assets
Cash and temporary investments $ 4,462,861 $ 15,395 $ 73,344 $ 806,847
Receivables
Taxes 172,338 35,079
Customer accounts 72,505 909,370
Other 70,060 20,934 82,624
Due from other governments 62,730 4,655
Inventory 4,129
Prepaid and other assets 16,043 7,885
Restricted cash and investments 464,299
Fixed Assets:
General Fixed Assets
Enterprise system property,plant
and equipment at cost, less
accumulated depreciation 24,094,850
Non-expendable trust assets I
Other Debits
Amount available for debt service
Amount to be provided for retirement
of general long-term debt
Total Assets and Other Debits $ 4,860,666 $ 40,984 $ 108,423 $26,365,875 I
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See Notes to Financial Statements.
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IExhibit A-1
Page 1 of 2
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Fiduciary
I Fund Type Account Groups
Totals
Trust and General General Long-
(Memorandum Only)
Agency Fixed Assets Term Debt 1999 1998
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$ 21,358 $ $ $ 5,379,805 $ 4,577,434
I207,417 237,656
981,875 927,201
173,618 263,579
I67,385 53,781
4,129 5,488 I
23,928 78,690
464,299 548,020
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31,629,373 31,629,373 30,414,780
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24,094,850 24,512,580
I57,200 57,200 57,200
I73,344 73,344 187,908
3,338,218 3,338,218 3,539,077
I $ 78,558 $31,629,373 $ 3,411,562 $ 66,495,441 $ 65,403,394
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CITY OF FRIENDSWOOD,TEXAS
COMBINED BALANCE SHEET- 3
ALL FUND TYPES AND ACCOUNT GROUPS
September 30, 1999
Proprietary I
Governmental Fund Types Fund Type
Special Debt
General Revenue Service Enterprise
Liabilities.Equity.and Other Credits 1
Liabilities
Accounts payable $ 390,926 $ 8,126 $ $ 312,622
Accrued liabilities 49,372 149,378
Accrued compensated absences 809,292 96,222
Customer deposits 255,810
Deferred revenue 273,472 21,164 35,079
Bonds payable 2,091,213
Certificates of obligation payable 5,425,000
Obligations under capital leases
Accretion on premium compound interest
bor. '; 338,888
Total Liabilities 1,523,062 29,290 35,079 8,669,133
Equity and Other Credits
Investment in general fixed assets
Contributed capital 12,435,358
Retained earnings 5,261,384
Fund Balances
Reserved 650,599 73,344
Unreserved
Designated 2,141,691 11,694
Undesignated 545,314
Total Equity and Other Credits 3,337,604 11,694 73,344 17,696,742
Total Liabilities,Equity,and I
Other Credits $ 4,860,666 $ 40,984 $ 108,423 $26,365,875
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See Notes to Financial Statements.
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Exhibit A-1
IPage 2 of 2
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1 Fiduciary
Fund Type Account Groups Totals
I Trust and General General Long- (Memorandum Only)
Agency Fixed Assets Term Debt 1999 1998
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I $ $ $ $ 711,674 $ 626,060
198,750 341,066
905,514 649,029
I 255,810 230,065
329,715 335,384
888,677 2,979,890 4,320,778
I 1,910,000 7,335,000 7,575,000
198,688 198,688 153,252
414,197 753,085 666,920
3,411,562 13,668,126 14,897,554
31,629,373 31,629,373 30,414,780
12,435,358 12,435,358
5,261,384 4,780,641
I67,200 791,143 703,176
I 2,153,385 2,057,110
11,358 556,672 114,775
78,558 31,629,373 52,827,315 50,505,840
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$ 78,558 $31,629,373 $ 3,411,562 $ 66,495,441 $ 65,403,394
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CITY OF FRIENDSWOOD, TEXAS
COMBINED STATEMENT OF REVENUES,EXPENDITURES,ANDI
CHANGES IN FUND BALANCES-ALL GOVERNMENTAL FUND TYPES
Year Ended September 30, 1999
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Governmental Fund Types
Special Debt
General Revenue Service
Revenues
Property taxes $ 5,774,453 $ $ 536,466
Sales taxes 1,855,121
Franchise fees 821,943
Sanitation 1,013,415
Fines and forfeitures 332,659
Permits and fees 635,905
Intergovernmental 534,775 18,577
Interest on investments 271,359 5,158 16,369
Other 222,894 163,190
Total Revenues 11,462,524 186,925 552,835
Expenditures
Current:
General government 2,051,684
Public safety 3,967,451 198,557
Public works 1,601,048
Sanitation 980,681
Community development 522,128
Community services 2,193,860
Capital outlay
Debt Service:
Principal retirement 512,594
Interest and fiscal charges 185,952
Total Expenditures 11,316,852 198,557 698,546
Revenues Over(Under)Expenditures 145,672 (11,632) (145,711)
Other Financing Sources(Uses)
Operating transfers in 737,181 23,841 31,147
Operating transfers(out) (304,988)
Proceeds from issuance of debt 149,780
Total Other Financing
Sources(Uses) 581,973 23,841 31,147
Revenues and Other Financing Sources
Over(Under)Expenditures
and Other Financing(Uses) 727,645 12,209 (114,564) 1
Fund balances-Beginning 2,609,959 (515) 187,908
Fund Balances-Ending $ 3,337,604 $ 11,694 $ 73,344
See Notes to Financial Statements.
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IExhibit A-2
ITotals
(Memorandum Only)
I September 30,1999 September 30,
1998
$ 6,310,919 $ 5,957,486
I 1,855,121 1,805,791
821,943 801,709
1,013,415 982,432
I 332,659 304,017
635,905 699,432
553,352 346,879
I 292,886 222,586
386,084 525,228
12,202,284 11,645,560
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2,051,684 1,937,096
4,166,008 4,043,792
I 1,601,048 1,946,903
980,681 988,422
522,128 413,024
I2,193,860 1,904,926
I 512,594 709,094
185,952 200,275
12,213,955 12,143,532
I (11,671) (497,972)
792,169 557,983
I (304,988)
149,780 96,325
I636,961 654,308
I625,290 156,336
2,797,352 2,641,016
I $ 3,422,642 $ 2,797,352
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CITY OF FRIENDSWOOD, TEXAS
COMBINED STATEMENT OF REVENUES,EXPENDITURES,ANDI
CHANGES IN FUND BALANCES-BUDGET(GAAP BASIS)AND ACTUAL
GENERAL,SPECIAL REVENUE,AND DEBT SERVICE FUNDS
Year Ended September 30, 1999
General Fund
Variance
Favorable
Budget Actual (Unfavorable)
Revenues
Property taxes $ 5,756,908 $ 5,774,453 $ 17,545
Sales taxes 1,756,200 1,855,121 98,921
Franchise fees 800,870 821,943 21,073 111
Sanitation 1,015,526 1,013,415 (2,111)
Fines and forfeitures 296,106 332,659 36,553
Permits and fees 557,328 635,905 78,577
Intergovernmental 542,792 534,775 (8,017)
Interest on investments 188,500 271,359 82,859
Other 70,474 222,894 152,420
Total Revenues 10,984,704 11,462,524 477,820
Expenditures
Current: I
General government 2,355,217 2,051,684 303,533
Public safety 3,921,885 3,967,451 (45,566)
Public works 2,213,409 1,601,048 612,361 1
Sanitation 980,681 980,681
Community development 526,253 522,128 4,125
Community services 3,049,009 2,193,860 855,149
Debt Service:
Principal retirement
Interest and fiscal charges
Total Expenditures 13,046,454 11,316,852 1,729,602
Revenues Over(Under)Expenditures (2,061,750) 145,672 2,207,422
Other Financing Sources(UsesZ
Operating transfers in 739,110 737,181 (1,929)
Operating transfers(out) (304,989) (304,988) 1
Proceeds from issuance of long-term debt 50,087 149,780 99,693
Total Other Financing Sources(Uses) 484,208 581,973 97,765
Revenues and Other Financing Sources Over
(Under)Expenditures and Other
Financing(Uses) (1,577,542) 727,645 2,305,187
Fund balances- Beginning 2,609,959 2,609,959 1
Fund Balances-Ending $ 1,032,417 $ 3,337,604 $ 2,305,187
See Notes to Financial Statements. I
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II
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IExhibit A-3
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I Special Revenue Fund Variance Debt Service Fund
Variance
Favorable Favorable
Budget Actual (Unfavorable) Budget Actual (Unfavorable)
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$ $ $ $ 530,447 $ 536,466 $ 6,019
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1 18,577 18,577
2,525 5,158 2,633 16,369 16,369
I 135,252 163,190 27,938
137,777 186,925 49,148 530,447 552,835 22,388
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291,496 198,557 92,939
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I1,928 1,928
512,594 512,594
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218,498 185,952 32,546
293,424 198,557 94,867 731,092 698,546 32,546
(155,647) (11,632) 144,015 (200,645) (145,711) 54,934
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23,841 23,841 31,147 31,147
I (840) 840
(840) 23,841 24,681 31,147 31,147
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(156,487) 12,209 168,696 (169,498) (114,564) 54,934
I (515) (515) 187,908 187,908
$ (157,002) $ 11,694 $ 168,696 $ 18,410 $ 73,344 $ 54,934
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CITY OF FRIENDSWOOD, TEXAS
COMBINED STATEMENT OF REVENUES,EXPENSES,AND II
CHANGES IN RETAINED EARNINGS/FUND BALANCE-
PROPRIETARY FUND TYPE AND NON-EXPENDABLE TRUST FUND
Year Ended September 30, 1999
Proprietary Fiduciary
Fund Type Fund Type
II
Non-Expendable
Enterprise Trust
Operating Revenues
Water charges $ 3,344,067 $
Sewer charges 2,060,073
Interest on investments 849
Total Operating Revenues 5,404,140 849
Operating Expenses I
Personnel services 801,776
Supplies 159,969
Repairs and maintenance 291,171
III
Other services and charges 1,528,564
Depreciation 826,282
Total Operating Expenses 3,607,762 - I
Operating Income(Loss) 1,796,378 849
Non Operating Income(Expenses) I
Interest Income 78,567
Interest Expense (539,692) I
(461,125)
Income Before Operating Transfers 1,335,253 849 I
Operating Transfers(Out)
Operating transfers in 250,000 I
Operating transfers(out) (737,181)
(487,181)
Net Income(Loss) 848,072 849 III
Retained Earnings/Fund Balance- Beginning of Year 4,413,312 77,709
Retained Earnings /Fund Balance-End of Year $ 5,261,384 $ 78,558 I
See Notes to Financial Statements.
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IExhibit A-4
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Totals I
(Memorandum Only)
September 30, September 30,
1999 1998
I $ 3,344,067 $ 3,761,896
2,060,073 2,027,557
I849 1,074
5,404,989 5,790,527
1 801,776 696,098
159,969 91,804
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291,171 241,219
1,528,564 1,650,586
826,282 817,601
I3,607,762 3,497,308
1,797,227 2,293,219
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78,567 25,972
I (539,692) (549,510)
(461,125) (523,538)_
I1,336,102 1,769,681
I 250,000
(737,181) (557,983)
(487,181) (557,983)
I848,921 1,211,698
4,491,021 3,279,323
I $ 5,339,942 $ 4,491,021
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CITY OF FRIENDSWOOD, TEXAS
COMBINED STATEMENT OF CASH FLOWS-
PROPRIETARY FUND TYPE AND NON-EXPENDABLE TRUST FUND
Year Ended September 30, 1999
Proprietary Fiduciary
Fund Type Fund Type
Non-Expendable
Enterprise TrustI
Cash Flows from Operating Activities
Operating Income $ 1,796,378 $ 849
Adjustments to Reconcile Operating Income(Loss)to
Net Cash Provided(Used)by Operations
Depreciation and amortization 826,282
(Increase)Decrease in accounts receivable 60,315
(Increase)Decrease in prepaid and other assets (54,296)
Increase in accounts payable and accrued liabilities (119,425)
Increase(Decrease)in compensated absences (21,280) I
Increase(Decrease)in customer deposits (25,745)
Net Cash Provided(Used)by Operating Activities 2,462,229 849
Cash Flows from Noncapital Financing Activities
Operating transfers in 250,000
Operating transfers(out) (737,181)
Net Cash(Used)by Noncapital Financing Activities (487,181) I
Cash Flows from Capital and Relayed Financing
Activities
Capital expenditures for property,plant,and equipment (508,021)
Principal payments on long-term debt (1,126,750)
Interest payments on long-term debt (493,804)
Net Cash(Used)by Capital and Related Financing Activities (2,128,575)
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Cash Flows from Investing Activities
Interest on investments 78,567
Net Cash(Used)by Investing Activities 78,567
Net Increase(Decrease)in Cash and Cash Equivalents (74,960) 849
Cash and cash equivalents, beginning of year 1,346,106 20,509
Cash and Cash Equivalents,End of Year $ 1,271,146 $ 21,358
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Unrestricted cash and cash equivalents $ 806,847 $ 21,358
Restricted cash and cash equivalents 464,299
Cash and Cash Equivalents,End of Year $ 1,271,146 $ 21,358
See Notes to Financial Statements.
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' Exhibit A-5
Totals
(Memorandum Only)
I1999 1998
$ 1,797,227 $ 2,293,219
826,282 817,601
60,315 (150,867)
(54,296) 808
(119,425) (149,061)
(21,280) 3,028
(25,745) 211,323
2,463,078 3,026,051
250,000
(737,181) (557,983)
1 (487,181) (557,983)
(508,021) (487,260)
(1,126,750) (1,095,500)
(493,804) (513,531)
(2,128,575) (2,096,291)
78,567 25,972
78,567 25,972
(74,111) 397,749
1,366,615 948,357
$ 1,292,504 $ 1,346,106
$ 828,205 $ 798,086
' 464,299 548,020
$ 1,292,504 $ 1,346,106
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CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 term limitation j
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 affair 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.
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.
A. Reporting Entity 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 other type of
reporting entity.
Considerations regarding the potential for inclusion of other entities, organizations, or functions in the
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
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 primary
government
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.
As indicated in Note 12, 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.
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ICITY OF FRIENDSWOOD
Exhibit A-6
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NOTES TO FINANCIAL STATEMENTS
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)
IB. Fund Accounting
I 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
I expenditures or expenses, as appropriate. The following paragraphs describe the various fund types and
account groups.
IGovernmental Fund Types
General Fund(Budgeted)
The General Fund accounts for the resources used to finance all the operations of the City not properly
Iincluded 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
Idevelopment, and community services.
Special Revenue Funds(Budgeted)
I The Special Revenue Funds are used to account for the proceeds of specific revenue sources that are
legally restricted or designated for specified activities.
I 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
Iproperty taxes.
Proprietary Fund Type(Unbudgeted)
IEnterprise 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
I 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
I principles prescribed by the Governmental Accounting Standards Board(the GASB), and all Financial
Accounting Standards Board's standards issued before November 30, 1989. After this date, the City
accounts for its proprietary funds as presented by the GASB.
IFiduciary Fund Type(Unbudgeted)
I 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.
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CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)
B. Fund Accounting(continued)
Account Groups I
General Fixed 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 I
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 lin
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 I
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. II
The modified accrual basis of accounting is used by the Governmental Fund Types. 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 are111
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 I
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.
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CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)
D. Budgets
1 Procedures in establishing budgetary data reflected in the financial statements are as follows:
1 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.
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 lapse at year end and are
reappropriated in the ensuing years budget.
35
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)
D. Budgets (continued)
Budget amendments were adopted for various funds during the year to increase expenditures and other I
uses. The amounts reported in the accompanying financial statements represent the original budgeted
amounts plus all supplemental appropriations.
During the 1999 fiscal year, expenditures exceeded appropriations at the departmental level (the legal 1
level of compliance) in the General Fund—Public Safety by approximately$45,000.
E. Cash and Temporary Investments I
All investments are stated at cost, which approximates fair value. The City holds all investments until
maturity 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 temporary investments" 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. I
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. I
F. Interfund Transactions
Interfund transactions that would be treated as revenues, expenditures, or expenses if they involved I
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. I
G. Fund Equity
Contributed capital is recorded in the Enterprise Fund which has received capital grants, contributions I
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.
I
36 i
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
H. Compensated Employee Absences
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, 1999, 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. j
Encumbrances that have not been liquidated are reported as reservations of fund balances since they do
not constitute expenditures or liabilities.
J. Inventories I
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).
K. Fixed Assets I
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 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. I
Enterprise Fund Fixed Assets
The land, buildings, and equipment owned by the Enterprise Fund are recorded at historical cost or at
estimated fair 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:
I
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37
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)
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 that 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 an the
reported amounts of revenues and expenditures during the reporting period. Actual results could differ
from those estimates.
NOTE 2 - CASH AND TEMPORARY INVESTMENTS
The City's cash and investments are classified as: cash and temporary investments and restricted cash and
temporary investments. Cash and temporary investments include cash on hand, deposits with financial
institutions, short term investments in a state-managed public funds investment pool account (Texpool,),
two privately-managed public funds investment pools (Lone Star and MBIA) and a Local Government
Investment Cooperative (LOGIC). The Investments, which have a maturity 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 and Texpool. At year-end, the carrying value of
cash and cash equivalents(which approximated fair value)consisted of:
1
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1
38
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 2—CASH AND I TEMPORARY NVESTMENTS(continued)
Credit Risk Carrying
Category Amount
Demand and time deposits 1 $ 993,758
U.S.Government Securities 1 1,932,568
Balances in Public Investment Pools
MBIA 725,415
Texpool 837,450 1
LOGIC 468,172
Lone Star Investment Pool 886,741
Total cash and cash equivalents 5,844,104
Less restricted cash and cash equivalents 464,299
Unrestricted cash and cash equivalents $ 5,379,805
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. I
At September 30, 1999, all of the City's cash deposits were insured or collateralized as described under
category 1 above.
Credit Risk Categorization for Investments
The carrying amounts and fair values of the City's investments can be categorized according to 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 counter-parry's trust department
or agent in the entity's name,
Category 3- Uninsured and unregistered, with securities held by counter-party or by its trust
department or agent but not in the entity's name. I
39
1
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 2—CASH AND I TEMPORARY NVESTMENTS (continued)
TexPool, Lone Star, MBIA, and LOGIC balances 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 Texas 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.
IThe State Comptroller of Public Accounts exercises oversight responsibility over TexPool, the Texas
Local Government Investment Pool. Oversight includes the ability to significantly influence operations,
designation of management and accountability for fiscal matters. Additionally, the State Comptroller has
established an advisory board composed of both Participants in TexPool and other persons who do not
have a business relationship with TexPool. The Advisory Board members review the investment policy
and management fee structure. Finally, TexPool is rated AAAm by Standard& Poors. As a requirement
to maintain the rating weekly portfolio, information must be submitted to Standard&Poors, as well as the
office of the Comptroller of Public Accounts for review.
TexPool operates in a manner consistent with the SEC's Rule 2a7 of the Investment Company Act of
1940. TexPool uses amortized cost rather than market value to report net assets to compute share prices.
Accordingly, the fair value of the position in TexPool is the same as the value of TexPool shares.
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 deposits
and investments in the following:
1. Obligations of the U.S., its agencies and instrumentalities,
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; or
' -collateralized in accordance with Section 2256.010,the Texas Government Code, in face amount not
to exceed$100,000,
3. No-load money market mutual funds,
4. Texpool, Lone Star Investment Pool, MBIA, and the Local Government Investment Cooperative
(LOGIC).
City council has adopted a written investment policy regarding the investments of its funds as defined by
1 the Public Funds Investment Act of 1995 (Chapter 2256, Texas Government Code). The Investments of
the City are in compliance with the council's investment policies. The City did not have any derivative
investment products during the current year. All significant legal and contractual provisions for
I investments were complied with during the year. Investments at year end are representative of the types
of investments maintained by the City during the year.
1
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40
CITY OF FRIENDSWOOD
Exhibit A-6
INOTES TO FINANCIAL STATEMENTS
INOTE 3 - PROPERTY TAXES
The City's property taxes are levied annually in October on the basis of the Appraisal District's assessed
I values as of January 1 of that calendar year. Appraised values are established by the Appraisal District at
market value and assessed at 100% of appraised value less exemptions. The City's property taxes are billed
and collected by the City's Tax Assessor/Collector. Such taxes are applicable to the fiscal year in which they
are levied and become delinquent with an enforceable lien on property on February 1 of the subsequent
Icalendar year.
Property taxes are prorated between operations and debt service based on rates adopted for the year of the
I levy. For the current year, the City levied property taxes of$..6125 per $100 of assessed valuation which
were prorated between operations and debt service in the amounts of$.5610 and $.0515, respectively. The
resulting adjusted tax levies were approximately $5.8 and $.5 million for operations and debt service,
I respectively, based on a total adjusted taxable valuation of approximately $1,027 million for the 1998 tax
year.
IProperty taxes receivable, at September 30, 1999,consists of the following:
Debt
General Service I
Tax Year Fund Fund Total
1998 $ 71,444 6,560 $ 78,004
I
1997 22,206 2,883
2,789 25,089
1996 12,763 15,552
1995 8,674 2,736 11,410
I 1994 8,370 2,426 10,796
1993 6,514 2,081 8,595
1991 and prior 42,367 15,604 57,971
I $ 172,338 $ 35,079 $ 207,417
I
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41
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 4- LAND, BUILDINGS, AND EQUIPMENT
A summary of changes in the General Fixed Assets Account Group, for the year ended September 30, 1999,
follows:
Transfers,
Balance, Adjustments Balance,
October 1, and Retirements September 30,
1998 Additions In(Out) 1999 I
Land $ 3,337,140 $ 3,337,140
Buildings 4,535,249 197,039 (6,237) 4,726,051
Improvements other
than buildings 16,772,657 263,726 897,486 17,933,869
Furniture and equipment 4,872,248 468,940 (32,138) 5,309,050
Construction in progress 897,486 323,263 (897,486) 323,263
Total $ 30,414,780 $ 1,252,968 $ (38,375) $ 31,629,373
Construction in progress and remaining commitments under related construction contracts for general
government construction projects at September 30, 1999 is as follows:
Total in Remaining
Project Description Progress Commitment
City hall balcony reconstruction $ 8,447 $ 4,305
New public safety center 16,005 8
Sunset blvd. traffic lights 182,561 27,370
Centennial park 116,250 34,274
Total $ 323,263 $ 65,957
A summary of Enterprise Fund fixed assets at September 30, 1999, follows: I
Land $ 643,097
Plant and equipment 18,038,645
Water and sewer lines 16,446,586
Construction in progress 603,639
35,731,967
Less accumulated depreciation (11,637,117)
Total $ 24,094,850
The Trust and Agency fund accounts for its own land and improvements in the amount of$57,200.
I
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42
1
ICITY OF FRIENDSWOOD
Exhibit A-6 I
NOTES TO FINANCIAL STATEMENTS
INOTE 5-LONG-TERM DEBT
The City issues a variety of long-term debt instruments in order to acquire and/or construct major capital
I 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
Iliens on property and equipment. Debt obligations that 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.
I 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
IGroup and the Enterprise Fund at September 30, 1999 follows:
I
General
Series and Original Final Interest Long-Term Enterprise
Issue Amount Maturity Rate(%) Debt Fund
I General Obligation Bonds
1986 Refunding Bonds
10,650,777 2004 4.25-7.90 $ 242,427 $ 198,351
1993 Refunding Bonds I
6,555,000 2004 2.25-4.625 646,250 1,938,750
Less unamortized bond issuance costs (45,888)
888,677 2,091,213
ICombination Tax and Revenue
Certificates of Obligation
1992 Series 5,000,000 2008 5.30-6.75 1,910,000 2,435,000
I 1995 Series 3,200,000 2010 5.375-7.375 2,990,000
1,910,000 5,425,000
I
Total Bonds and Certificates of Obligation $ 2,798,677 $ 7,516,213
I
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43
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
I
NOTE 5-LONG-TERM DEBT (continued)
Annual debt service requirements for bonds and certificates of obligation are as follows:
General I
Obligation Certificates of
Fiscal Year Bonds Obligation
2000 $ 1,443,764 $ 659,924
2001 748,610 637,702
2002 666,761 712,411
2003 668,281 714,879I
2004 663,066 717,730
2005 1,219,814
2006 1,221,302
2007 1,220,848
2008 1,226,976
2009 884,175
2010 893,381
Total requirements 4,190,482 10,109,142
less interest portion (1,210,592) (2,774,142)
$ 2,979,890 $ 7,335,000
Accretion on Premium Compound Interest Bonds 1
A portion of the bonds sold in the Series 1986 refunding bond issue were premium compound interest bonds.
These obligations have par values of$440,777 and maturity values of$1,305,000. The interest 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, 1999, is approximately $1,193,863 of which $537,238 has been allocated to the
Enterprise Fund and $656,625 has been allocated to the General Long-Term Debt Account Group. Accordingly, I
accretion on these bonds of$338,888 and $414,197 has been recorded in the Enterprise Fund and the General
Long-Term Debt Account Group, respectively.
Obligations Under Capital Leases I
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: I
Lease
Fiscal Year Obligation
2000 $ 78,328 1
2001 45,367
2002 33,816
2003 33,816
2004 33,819
Total 225,147
less interest portion 26,459I
Obligations under capital leases $ 198,688
1
44 I
ICITY OF FRIENDSWOOD
Exhibit A-6
I
NOTES TO FINANCIAL STATEMENTS
NOTE 5-LONG-TERM DEBT(continued)
Changes in Long-Term Debt
I The following are summaries of long-term debt transactions of the City for the year ended September 30,
1999.
General Long-Term Debt Account Group
I
Balance, Balance,
October 1, September 30,
I1998 Additions Retirements 1999
General obligation bonds $ 1,199,927 $ $ 311,250 $ 888,677
Revenue bonds 17,000 17,000
ICertificates of obligation 1,990,000 80,000 1,910,000
Obligations under capital
leases 153,252 149,780 104,344 198,688
I Accreted interest on premium
compound interest bonds 366,806 47,391 414,197
$ 3,726,985 $ 197,171 $ 512,594 $ 3,411,562
I
IEnterprise Fund Long-Term Debt
Balance, Balance,
I October 1, September 30,
1998 Additions Retirements 1999
Revenue bonds $ 33,000 $ $ (33,000) $
I General obligation bonds 3,070,851 (907,500) 2,091,213
Certificates of obligation 5,585,000 (155,000) 5,425,000
I
$ 8,688,851 $ $ (1,095,500) $ 7,516,213
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45
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 6-FUND EQUITY 1
Reservations and Designations of Fund Balance
Fund Balances in the various Governmental Fund Types and Non-Expendable Trust Fund are reserved or
designated as follows:
General Revenue Debt Service Trust
Reserved for:
Encumbrances $ 650,599 $ $
Endowment 67,200
Debt service 73,344
Total reserved fund
balance $ 650,599 $ 73,344 $ 67,200
Designated for:
Emergency
operations $ 825,706 $
Future projects 116,134 11,694
Authorized
construction 1,199,851
Total designated fund
balance $ 2,141,691 $ 11,694
NOTE 7-INTERFUND TRANSFERS
During the year ended September 30, 1999 the following operating transfers were made:
Transfer From Transfer To Amounts
Enterprise Fund General Fund $ 737,181
General Fund Special Revenue 23,841
General Fund Debt Service Fund 31,147
General Fund Enterprise Fund 250,000
1
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46
CITY OF FRIENDSWOOD
Exhibit A-6
I
NOTES TO FINANCIAL STATEMENTS
INOTE 8-IMPACT FEES
On April 27, 1990, the City, in conformance with the provisions of Senate Bill 336 and House Bill 1786,
I 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 Impact Fee
Structure to defray the costs of these improvements was also adopted.
IIn recent years, the City has committed funds to the construction of surface water facilities and wastewater
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
Iin the City Wide impact fees.
Based on population growth projections, two areas (Melody Lane and Central Service Area) within the City
I 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
distribution facilities extended to the Bay Area Boulevard Service Area under the terms of a contractual
Iagreement with Bay Area Land Company, Ltd.
The Capital Improvements Plan and Impact Fee structure was amended by City Council on January 7, 1991,
I 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.
The following is a summary of the Impact Fees that apply on a City Wide Basis and for each of the
Idesignated service areas. The fees represent the charge for single equivalent service units as defined in the
Capital Improvement Plan.
Equivalent
I
Service Unit
City Wide Impact Fees
Surface water facilities $ 685
I Wastewater treatment facilities 69
Impact fee study and update study 36
Total City Wide Impact Fee $ 790
I Water Distribution Impact Fees
Melody Lane service area $ 854
Bay Area Boulevard service area 294
South Friendswood service area 293
IWastewater Collection Impact Fees
Melody Lane service area $ 450
I
Mills,Murphy,Briarmeadow Avenue 2,532
South Friendswood Service Area
Area A 378
Area B-1 378
I Area B-2 378
Area C 285
Area D 161
Area E-1 784
I Area E-2 784
Area E-3 161
Area E-4 161
IArea F 378
I 47
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 8-IMPACT FEES(continued)
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.
NOTE 9-EMPLOYEE RETIREMENT SYSTEM
Plan Description
The City provides pension benefits for all of its full-time employees through a nontraditional, joint
contributory, defined contribution plan in the state-wide Texas Municipal Retirement System (TMRS). The
City is one of 717 municipalities having the plan administered by the by TMRS. Each of the 717
municipalities has an annual, individual actuarial valuation performed. All assumptions for the 12-31-98
valuations are contained in the 1998 TMRS Comprehensive Annual Financial Report, a copy of which may
be obtained by writing P.O. Box 149153,Austin,Texas 78714-9153.
Benefits depend upon the sum of the employee's contributions to the plan, with interest, and the City
financed monetary credits, with interest. At the date the plan began, the City granted monetary credits for
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 the plan began are a percent(100%, 150%, or 200%) of the employee's accumulated contributions. In
addition, the City can grant as often as annually another type of monetary credit referred to as an updated
service credit which is a theoretical amount which, when added to the employee's accumulated contributions
and the monetary credits for service since the plan began, would be the total monetary credits and employee
contributions, accumulated with interest, if the current employee contribution rate and 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 10 or more years of service or with 20 years of service
regardless of age. A member is vested after 10 years. 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
contraints also in the statutes.
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48 1
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
111
NOTE 9-EMPLOYEE RETIREMENT SYSTEMS(continued)
Contributions
The contribution rate for the employees is 7%, and the City matching ratio is currently 2 to 1, both as
adopted by the governing body of the City. Under the state law governing TMRS, the actuary annually
determines the City contribution rate. 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 the City matching
percent, which are the obligation of the City as of an employee's retirement date, not at the time the
I 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/her retirement
becomes effective. The prior service contribution rate amortizes the unfunded (overfunded) actuarial
liability (asset) over the remainder of the plan's 25-year amortization period. When the City periodically
adopts updated service credits and increases its annuities in effect, the increased unfunded actuarial liability
is to be amortized over a new 25-year period. The unit credit actuarial cost method is used for determining
the City contribution rate. Both the employees and the City make contributions monthly. Since the City
1 needs to know its contribution rate in advance to budget for it, there is a one-year delay between the
actuarial valuation that is the basis for the rate and the calendar year when the rate goes into effect (i.e.
December 31, 1998 valuation is effective for rates beginning in January 2000).
Annual Pension Cost
The City's annual pension cost of $597,548 was equal to the City's required and actual contributions.
Three-year trend information for the City's TMRS plan follows:
Fiscal Year Annual
Ending Sep. Pension Cost Percentage Net Pension
30 (APC) Contributed Obligation
' 1997 $ 324,151 100% $ -
1998 358,205 100%
1999 597,548 100% -
I
NOTE 10 -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 that 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.
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49
i
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS I
NOTE 11 -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. I
The relationship of the parties is of a fiduciary character. No partnership or joint venture is created by this
contract. I
NOTE 12 -BLACKHAWK REGIONAL WASTE TREATMENT PLANT
The City has entered into an arrangement with the Gulf Coast Waste Disposal Authority for the operation 1
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, 1998 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%
1
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, 1998 audited financial
statements of the Gulf Coast Waste Disposal Authority and are summarized below:
Venture Ij
Total assets $ 414,625
Total liabilities (414,625)
Total fund equity $
Total revenues $ 1,517,822
Total expenditures (1,517,822)
Net increase/decrease $
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CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
1 NOTE 13 -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,
1999 the City paid premiums to TML for provisions of various liability, property and casualty insurance. The
City has various deductible amounts ranging from $500 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.. Workers
compensation is subject to change when audited by TML. At year end September 30, 1999 the City believed
the amounts paid on workers compensation would not change significantly from the amounts recorded.
' During the year ended September 30, 1999 employees of the City were covered by a health and dental
insurance plan. Employees have the option to select either a HMO or a Point of Service (POS) plan. If
individual employees chooses to cover only their selves, the city pays 90% of the monthly premium. If
' individual employees desire to cover themselves and their dependents, the city pays 70% of the monthly
premium.
NOTE 14—SUBSEQUENT EVENT (ISSUANCE OF REVENUE BONDS)
Subsequent to year-end, the City issued Waterworks and Sewer system Revenue Bonds Series 1999 dated
October 1, 1999 in the amount of $4,945,000. The individual bonds mature annually through fiscal year
2019 and bear interest rates ranging from 5.3% to 7.3%. the bonds are payable from and are secured by a
first lien on the revenues of the City's waterworks and sewer system remaining after deduction of the
' operating and maintenance expenses of the system.
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CITY OF FRIENDSWOOD, TEXAS
REQUIRED PENSION SYSTEM SUPPLEMENTARY INFORMATION Exhibit A-7
September 30,1999
TEXAS MUNICIPAL RETIREMENT SYSTEM(UNAUDITED)
Schedule of Funding Progress
Unfunded
Actuarial (UAAL)as a
Actuarial Actuarial Accrued Annual Percentage of
Valuation Actuarial Accrued Percentage Liability Covered Covered
Date Dec.31 Value of Assets Liability Funded (UAAL) Payroll Payroll
1993 $ 4,547,707 $ 5,418,187 83.9% $ 870,480 $ 3,469,512 25.1% 1
1994 5,190,936 5,862,152 88.6% 671,216 3,892,013 17.2%
1995 5,838,306 6,559,465 89.0% 721,159 4,150,533 17.4% 1
1996 6,820,691 7,531,703 90.6% 711,012 4,455,830 16.0%
1997 7,798,961 8,694,662 89.7% 895,701 4,471,928 20.0%
1998 8,967,149 11,467,709 78.2% 2,500,560 5,148,362 48.6% I
Schedule of Annual Pension Costs
Annual
Calendar Pension Cost Percentage
Year (APC) Contributed
1994 $ 207,130 100%
1995 257,192 100%
1996 284,653 100%
1997 324,151 100%
1998 358,205 100%
1999 597,548 100%
The City's annual covered payroll and annual pension cost are presented on a calendar year basis to coincide
with the actuarial valuation dates. Because the City's makes all of the annual required contributions, no net
pension obligation exists. The information presented in the required supplementary schedules was determined
as part of the actuarial valuations at the dates indicated.
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COMBINING, INDIVIDUAL FUND AND ACCOUNT GROUP
STATEMENTS AND SCHEDULES
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IGENERAL FUND
I The General Fund accounts for the resources used to finance the
fundamental operations of the City. It is the basic fund of the City and
covers all activities for which a separate fund has not been established.
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3
CITY OF FRIENDSWOOD, TEXAS
GENERAL FUND Exhibit B-1
COMPARATIVE BALANCE SHEET
September 30, 1999 and 1998
1999 1998 I
Assets
Cash and temporary investments $ 4,462,861 $ 3,564,159 I
Receivables
Taxes 172,338 184,605 I
Customer accounts 72,505 78,336
Other 70,060 180,765
Due from other governments 62,730 53,781 1
Inventory 4,129 5,488
Prepaid and other assets 16,043 16,509
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Total Assets $ 4,860,666 $ 4,083,643
I
Liabilities and Fund Balance
Liabilities 1
Accounts payable $ 390,926 $ 396,911
Accrued liabilities 49,372 220,353
Compensated absences and payroll liabilities 809,292 574,087
Deferred revenue 273,472 282,333
Total Liabilities 1,523,062 1,473,684 111
Fund Balance
Reserved for encumbrances 650,599 448,068
Unreserved:
Designated for emergency operations 825,706 825,706
Designated for construction 1,199,851 1,226,913
Designated for projects 116,134 ` tH,ti 1 2
Undesignated 545,314 1,336,185
Total Fund Balance 3,337,604 2,609,959
Total Liabilities and Fund Balance $ 4,860,666 $ 4,083,643
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CITY OF FRIENDSWOOD, TEXAS
IGENERAL FUND Exhibit B-2
STATEMENT OF REVENUES,EXPENDITURES,AND Page 1 of 8
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
IYear Ended September 30, 1999
with comparative actual balances for the Year Ended September 30, 1998
I 1999
Variance
Favorable 1998
IBudget Actual (Unfavorable) Actual
Revenues
Property taxes $ 5,756,908 $ 5,774,453 $ 17,545 $ 5,257,813
I Sales taxes 1,756,200 1,855,121 98,921 1,805,791
Franchise fees 800,870 821,943 21,073 801,709
Sanitation 1,015,526 1,013,415 (2,111) 982,432
I Fines and forfeitures p 296,106 332,659 36,553 304,017
Permits and fees ( cw.:ts i'� t i,g for serawes 557,328 635,905 78,577 699,432
foe_ s4.."itp'07.0
Intergovernmental 542,792 534,775 (8,017) 346,807
I Earnings on investments 188,500 271,359 82,859 216,917
Other 70,474 222,894 152,420 331,451
Total Revenues 10,984,704 11,462,524 477,820 10,746,369
IExpenditures
General Government:
Mayor and Council:I
Personnel services 170 170 185
Supplies 1,932 1,915 17 1,846
Other services and charges 56,288 42,307 13,981 38,817
ITotal Mayor and Council 58,390 44,392✓ 13,998 40,848
City Manager:
I Personnel services 201,284 192,700 8,584
(931) 186,089
Supplies 4,636 5,567 5,762
Repairs and maintenance 1,315 (1,315) 947
I Other services and charges 32,838 32,141 697 18,123
Total City Manager 238,758 231,723 / 7,035 210,921
City Secretary:
I Personnel services 140,239 142,819 (2,580) 130,118
Supplies 4,729 5,582 (853) 8,043
Repairs and maintenance 1,678 2,872 (1,194) 2,610
I Other services and charges 22,827 31,688 (8,861) 24,524
Capital outlay 46,488 46,225 263
Total City Secretary 215,961 229,186v (13,225) 165,295
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CITY OF FRIENDSWOOD, TEXAS
GENERAL FUND Exhibit B-2
STATEMENT OF REVENUES,EXPENDITURES,AND Page 2 of 8
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
Year Ended September 30, 1999
with comparative actual balances for the Year Ended September 30, 1998
1999
Variance
Favorable 1998
Budget Actual (Unfavorable) Actual
Expenditures(continued)
General Government: (continued) I
Administration:
Finance:
Personnel services $ 361,046 $ 350,383 $ 10,663 $ 321,800
Supplies 11,442 7,516 3,926 7,843
Repairs and maintenance 254 129 125 150
Other services and charges 27,599 25,510 2,089 23,683
5,850 / 5,850
Total Finance 406,191 383,538✓ 22,653 353,476
Human Resources:
Personnel services 120,948 115,114 5,834 113,992
Supplies 6,750 6,335 415 5,122
Repairs and maintenance 992 992
Other services and charges 34,005 40,837 J (6,832) 39,022
Total Human Resources 162,695 162,286 409 158,136
Tax: 1
Other services and charges 129,484 102,197 27,287 105,408
Economic Development
Personnel services 14,524 (14,524)
Supplies 37 (37)
Other services and charges 82,160 34,205 47,955 56,138
Capital outlay 5,006 i (5,006)
Total Economic Development 82,160 53,772 4 28,388 56,138
Legal: I
Other services and charges 164,934 64,125 100,809 172,293
Total Legal 164,934 64,125 1 100,809 172,293
Municipal Court:
Personnel services 156,019 158,890 (2,871) 148,411
Supplies 5,974 5,695 279 3,064
Repairs and maintenance 102 102 77
Other services and charges 11,383 6,423 4,960 9,020
Total Municipal Court 173,478 171,008 f 2,470 160,572
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CITY OF FRIENDSWOOD, TEXAS
I GENERAL FUND Exhibit B-2
STATEMENT OF REVENUES,EXPENDITURES,AND Page 3 of 8
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
IYear Ended September 30, 1999
with comparative actual balances for the Year Ended September 30, 1998
I 1999
Variance
I
Favorable 1998
Budget Actual (Unfavorable) Actual
Expenditures (continued)
I General Government: (continued)
Computer Services:
Personnel services $ 114,240 $ 115,836 $ (1,596) $ 49,622
I Supplies 18,476 17,372 1,104 26,024
Repairs and maintenance 39,054 16,866 22,188 20,845
Other services and charges 375,791 275,454 100,337 236,987
I Capital outlay 33,000 115,563 (82,563) 100,258
Reserves and contingencies 58,760 58,760
Total Computer Services 639,321 541,091 98,230 433,736
IRisk Management:
Personnel services 5,408 2965.00 2,443
Supplies 305 42 263 181
IOther services and charges-insurance 78,132 65,359 12,773 80,092
Total Risk Management 83,845 68,366 15,479 80,273
ITotal General Government 2,355,217 2,051,684 303,533 1,937,096
Public Safety:
I
Police Services:
Personnel services 2,187,143 2,286,554 (99,411) 2,249,891
Supplies 105,957 90,874 15,083 107,228 I
Repairs and maintenance 113,062 126,567 (13,505) 87,287
Other services and charges 110,007 123,448 (13,441) 70,556
Capital outlay 32,470 29,360 3,110 98,361
ITotal Police Services 2,548,639 2,656,803 (108,164) 2,613,323
Communications:
I Personnel services 508,436 493,930 14,506 481,347
Supplies 7,969 7,059 910 5,794
Repairs and maintenance 20,069 16,831 3,238 4,953
I Other services and charges 4,661 3,748 913 5,887
Capital outlay 36,501 36,510 (9)
Total Communications 577,636 558,078 19,558 497,981
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CITY OF FRIENDSWOOD, TEXAS
GENERAL FUND Exhibit B-2
STATEMENT OF REVENUES,EXPENDITURES,AND Page 4 of 8
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
Year Ended September 30, 1999
with comparative actual balances for the Year Ended September 30, 1998
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1999
Variance
Favorable 1998
Budget Actual (Unfavorable) Actual
Expenditures(continued)
Public Safety: (continued)
Animal Control:
Personnel services $ 106,776 $ 114,104 $ (7,328) $ 75,389
Supplies 7,185 6,166 1,019 5,432
Repairs and maintenance 2,084 803 1,281 2,639
Other services and charges 4,583 3,006 1,577 4,279
Capital outlay 15,700 15,529 171
Total Animal Control 136,328 139,608 (3,280) 87,739
Fire and EMS:
Personnel services 311,817 296,848 14,969 282,467
Supplies 14,264 9,710 4,554 3,998
Repairs and maintenance 1,815 173 1,642 2,613
Other services and charges 250,168 247,387 2,781 241,381
Capital outlay 19,342 19,342
Total Fire and EMS 597,406 554,118 43,288 530,459
Emergency Management: I
Personnel services 29,584 28,090 1,494 1,669
Supplies 1,526 1,774 (248) 1,780
Repairs and maintenance 3,736 3,255 481 3,612
Other services and charges 1,556 1,701 (145) 1,744
Capital outlay 25,474 24,024 1,450 1,999
Total Emergency Management 61,876 58,844 3,032 10,804
Total Public Safety 3,921,885 3,967,451 (45,566) 3,740,306
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CITY OF FRIENDSWOOD, TEXAS
IGENERAL FUND Exhibit B-2
STATEMENT OF REVENUES,EXPENDITURES,AND Page 5 of 8
I CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
Year Ended September 30, 1999
with comparative actual balances for the Year Ended September 30,1998
I 1999
Variance
I Favorable 1998
Budget Actual (Unfavorable) Actual
Expenditures(continued)
I Public Works:
Administration:
Personnel services $ 121,926 $ 121,228 $ 698 $ 122,869
I Supplies 2,390 1,834 556 1,997
Repairs and maintenance 904 324 580 177
Other services and charges 2,480 2,915 (435) 1,138
I Capital outlay 25,100 24,466 634
Total Administration 152,800 150,767 2,033 126,181
I Streets:
Personnel services 267,367 282,231 (14,864) 259,959
Supplies 40,238 45,555 (5,317) 31,468
I Repairs and maintenance 122,030 123,612 (1,582) 118,864
Other services and charges 219,783 246,505 (26,722) 237,196
Capital outlay 1,187,840 550,907 636,933 1,036,565
ITotal Streets 1,837,258 1,248,810 588,448 1,684,052
Drainage:
I Personnel services Supplies 142,203 150,952 (8,749)
65 110,742
814 749 11
Repairs and maintenance 45,116 41,405 3,711 25,752
I Other services and charges 31,018 4,390 26,628 165
Capital outlays 4,200 3,975 225
Total Drainage 223,351 201,471 21,880 136,670
Sanitation:
I
Other services and charges 980,681 980,681 988,422
Total Sanitation 980,681 980,681 988,422
ITotal Public Works 3,194,090 2,581,729 612,361 2,935,325
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CITY OF FRIENDSWOOD, TEXAS
GENERAL FUND Exhibit B-2
STATEMENT OF REVENUES,EXPENDITURES,AND Page 6 of 8
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
Year Ended September 30,1999
with comparative actual balances for the Year Ended September 30, 1998
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1999
Variance
Favorable 1998
Budget Actual (Unfavorable) Actual
Expenditures(continued)
Community Development:
Administration:
Personnel services $ 76,412 $ 83,633 $ (7,221) $ 105,618
Supplies 813 658 155 811
Other services and charges 1,985 3,624 (1,639) 2,316
Total Administration 79,210 87,915 (8,705) 108,745
Planning and Zoning:
Personnel services 95,200 92,545 2,655 59,219
Supplies 2,486 2,710 (224) 1,571
Repairs and maintenance 229 229
Other services and charges 7,445 3,090 4,355 2,384
Total Planning and Zoning: 105,360 98,345 7,015 63,174 I
Engineering:
Personnel services 36,870 37,132 (262) 51,799
Supplies 3,083 3,369 (286) 1,748
Repairs and maintenance 2,543 2,508 35 979
Other services and charges 4,912 5,414 (502) 4,206
Capital outlay 1,700 1,585 115
Total Engineering: 49,108 50,008 (900) 58,732
Inspection:
Personnel services 209,149 198,085 11,064 154,320
Supplies 5,510 8,913 (3,403) 4,843
Repairs and maintenance 3,000 3,091 (91) 3,005
Other services and charges 44,716 49,877 (5,161) 20,205
Capital Outlay 30,200 25,894 4,306 -
Total Inspection 292,575 285,860 6,715 182,373
Total Community Development 526,253 522,128 4,125 413,024
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CITY OF FRIENDSWOOD, TEXAS
IGENERAL FUND Exhibit B-2
STATEMENT OF REVENUES,EXPENDITURES,AND Page 7 of 8
I CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
Year Ended September 30, 1999
with comparative actual balances for the Year Ended September 30, 1998
1999
I Variance
Favorable 1998
Budget Actual (Unfavorable) Actual
I Expenditures(continued)
Community Services:
Library:
I Personnel services $ 416,034 $ 399,682 $ 16,352 $ 364,435
Supplies 126,788 107,034 19,754 118,261
Repairs and maintenance 2,766 1,825 941 2,410
I Other services and charges 13,903 11,575 2,328 12,349
Capital Outlay 14,196 1,090 13,106 50,033
Reserves and contingencies 9,176 9,176
ITotal Library 582,863 521,206 61,657 547,488
Parks and Recreation
I Personnel services Supplies 309,968 298,870 11,098 290,454
55,961 40,841 15,120 42,872
Repairs and maintenance 59,757 49,564 10,193 58,154
Other services and charges 199,383 221,036 (21,653) 186,543
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Capital Outlay 937,391 139,270 798,121 91,469
Total Parks and Recreation 1,562,460 749,581 812,879 669,492
I Community Activities:
Personnel services 114,358 115,362 (1,004) 65,002
Supplies 2,499 2,571 (72) 12,720
I Repairs and maintenance 930
Other services and charges 9,511 11,968 (2,457) 47,962
Capital Outlay 6,071 6,071 23,083
Total Community Activities 132,439 129,901 2,538 149,697
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CITY OF FRIENDSWOOD,TEXAS
GENERAL FUND Exhibit B-2
STATEMENT OF REVENUES,EXPENDITURES,AND Page 8 of 8
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
Year Ended September 30,1999
with comparative actual balances for the Year Ended September 30, 1998
1999
Variance I
Favorable 1998
Budget Actual (Unfavorable) Actual
Expenditures(continued)
Swimming Pool:
Personnel services $ 36,140 $ 29,260 $ 6,880 $ 28,986
Supplies 12,697 11,539 1,158 7,057
Repairs and maintenance 5,950 5,418 532 7,105
Other services and charges 15,153 12,359 2,794 19,759
Capital Outlay 60,000 59,057 943
Total Swimming Pool 129,940 117,633 12,307 62,907
Building Operations:
111
Personnel services 27,221 26,204 1,017 14,618
Supplies 13,758 18,637 (4,879) 17,113
Repairs and maintenance 114,884 99,338 15,546 82,852
Other services and charges 350,134 338,725 11,409 358,109
Capital Outlay 135,310 192,635 (57,325) 2,650
Total Building Operations 641,307 675,539 (34,232) 475,342
Total Community Services 3,049,009 2,193,860 855,149 1,904,926
Total Expenditures 13,046,454 11,316,852 1,729,602 10,930,677 1
Revenues Over(Under)
Expenditures (2,061,750) 145,672 2,207,422 (184,308)
Other Financing Sources(Uses)
Proceeds from capital leases 50,087 149,780 99,693 96,325
Operating transfers in 739,110 737,181 (1,929) 557,983
Operating transfers(out) (304,989) (304,988) 1
Total Other Financing Sources(Uses) 484,208 581,973 97,765 654,308
Revenues and Other Financing Sources
Over(Under)Expenditures and
Other Financing(Uses) (1,577,542) 727,645 2,305,187 470,000
Fund balance-Beginning 2,609,959 2,609,959 1,142,798
Residual equity transfer in 997,161
Fund Balance-Ending $ 1,032,417 $ 3,337,604 $ 2,305,187 $ 2,609,959
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jSPECIAL REVENUE FUNDS
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.
Fire/EMS Donation Fund
This fund receives funds that are restricted for Fire/EMS capital outlays.
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CITY OF FRIENDSWOOD, TEXAS
SPECIAL REVENUE FUNDS Exhibit C-1 I
COMBINING BALANCE SHEET
September 30, 1999
with comparative totals for September 30, 1998
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Police Fire/EMS Totals
Investigation Donations 1999 1998
Assets
Cash and cash equivalents $ 15,395 $ $ 15,395 $ 4,572
Accounts receivable 20,934 20,934
Due from other governments 4,655 4,655
Total Assets $ 15,395 $ 25,589 $ 40,984 $ 4,572
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Liabilities and Fund Balance I
Liabilities
Accounts payable and accrued liabilities $ 3,701 $ 4,425 $ 8,126 $ 5,087
Deferred revenues 21,164 21,164
Total Liabilities 3,701 25,589 29,290 5,087
Fund Balances
Unreserved:
Designated for police investigations 11,694 11,694 4,491
Undesignated (5,006)
Total Fund Balances 11,694 11,694 (515)
Total Liabilities and Fund Balances $ 15,395 $ 25,589 $ 40,984 $ 4,572
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CITY OF FRIENDSWOOD
ISPECIAL REVENUE FUNDS Exhibit C-2
COMBINING STATEMENT OF REVENUES,EXPENDITURES,AND
ICHANGES IN FUND BALANCE
Year Ended September 30,1999
1 with comparative totals for the Year Ended September 30,1998
IPolice Fire/EMS Totals
Investigation Donations 1999 1998
1 Revenues
Earnings on investments $ 503 $ 4,655 $ 5,158 $ 285
1 Intergovernmental 18,176 401 18,577 72
Other 163,190 163,190 193,777
Total Revenues 18,679 168,246 186,925 194,134
IExpenditures
Current:
IPublic safety 11,476 187,081 198,557 303,486
Total Expenditures 11,476 187,081 198,557 303,486
1 Revenues Over(Under)
Expenditures 7,203 (18,835) (11,632) (109,352)
IOther Financing Sources
Operating transfers in 23,841 23,841
ITotal Other Financing Sources 23,841 23,841
I Revenues and Other Financing Sources
Over(Under)Expenditures 7,203 5,006 12,209 (109,352)
1 Fund balance,beginning of year 4,491 (5,006) (515) 108,837
Fund Balance(Deficit),End of Year $ 11,694 $ $ 11,694 $ (515)
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CITY OF FRIENDSWOOD, TEXAS
SPECIAL REVENUE FUND(POLICE INVESTIGATION) Exhibit C-3 I
STATEMENT OF REVENUES,EXPENDITURES,AND
CHANGES IN FUND BALANCE-
BUDGET AND ACTUAL
Year Ended September 30, 1999
with comparative actual balances for the Year Ended September 30, 19981
1999 1
Variance
Favorable 1998 1
Budget Actual (Unfavorable) Actual
Revenues
Interest on investments $ $ 503 $ 503 $ 285 1
Intergovernmental 15,500 18,176 2,676 72
Total Revenues 15,500 18,679 3,179 357
Expenditures i
Public safety 16,343 11,476 4,867 2,378
Revenues Over(Under) 1
Expenditures (843) 7,203 8,046 (2,021)
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Fund balances-Beginning 4,491 4,491 6,512 1
Fund Balances-Ending $ 3,648 $ 11,694 $ 8,046 $ 4,491 1
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CITY OF FRIENDSWOOD, TEXAS
ISPECIAL REVENUE FUND(FIRE/EMS DONATIONS) Exhibit C-4
STATEMENT OF REVENUES,EXPENDITURES,AND
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CHANGES IN FUND BALANCE-
BUDGET AND ACTUAL
Year Ended September 30, 1999
1 with comparative actual balances for the Year Ended September 30,1998
1
1999
Variance
IFavorable 1998
Budget Actual (Unfavorable) Actual
Revenues
1 Intergovernmental $ $ 4,655 $ 4,655 $
Interest on investments 401 401
Other 156,000 163,190 7,190 193,777
ITotal Revenues 156,000 168,246 12,246 193,777
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Expenditures
Public safety 180,068 187,081 (7,013) 301,108
ITotal Expenditures 180,068 187,081 (7,013) 301,108
111 Revenues Over(Under)
Expenditures (24,068) (18,835) 5,233 (107,331)
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Other Financing Sources
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Operating transfers in 23,841 23,841
Total Other Financing
ISource 23,841 23,841
I Revenues and Other
Financing Sources Under
Expenditures (227) 5,006 5,233 (107,331)
IFund balances-Beginning (5,006) (5,006) 102,325
1 Fund Balances-Ending $ (5,233) $ - $ 5,233 $ (5,006)
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DEBT SERVICE FUND
The 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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CITY OF FRIENDSWOOD, TEXAS
DEBT SERVICE FUND Exhibit D-1
COMPARATIVE BALANCE SHEET
September 30, 1999 and 1998
1999 1998
Assets
Cash and temporary investments $ 73,344 $ 190,108 ,
Taxes receivable 35,079 53,051
Total Assets $ 108,423 $ 243,159
Liabilities and Fund balance ,
Liabilities
Accounts payable and accrued liabilities $ $ 2,200
Deferred revenue 35,079 53,051
Total Liabilities 35,079 55,251
Fund Balance
Reserved for debt service 73,344 187,908
Total Fund Balance 73,344 187,908
Total Liabilities and Fund Balance $ 108,423 $ 243,159
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CITY OF FRIENDSWOOD,TEXAS
IDEBT SERVICE FUND Exhibit D-2
STATEMENT OF REVENUES,EXPENDITURES,AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
Year Ended September 30,1999
with comparative actual balances for the Year Ended September 30,1998
I
1999
IVariance
Favorable 1998
Budget Actual (Unfavorable) Actual I
Revenues
Property taxes $ 530,447 $ 536,466 $ 6,019 $ 699,673
Interest on investments 16,369 16,369 5,384
ITotal Revenues 530,447 552,835 22,388 705,057
IExpenditures
Principal retirement 512,594 512,594 709,094
IInterest retirement 218,498 185,952 32,546 200,275
Total Expenditures 731,092 698,546 32,546 909,369
IRevenues Over
(Under)Expenditures (200,645) (145,711) 54,934 (204,312)
I
Other Financing Sources
IOperating transfers in 31,147 31,147
Total Other Financing Sources 31,147 31,147
I
Revenues and Other Financing
ISources Over Expenditures (169,498) (114,564) 54,934 (204,312)
IIFund balances-Beginning 187,908 187,908 392,220
Fund Balances-Ending $ 18,410 $ 73,344 $ 54,934 $ 187,908
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I
ENTERPRISE FUND
I
The Enterprise Fund is used to account for the acquisition, operation, and
I maintenance of governmental facilities and services that 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
Ioperations similar to private enterprise.
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CITY OF FRIENDSWOOD, TEXAS
ENTERPRISE FUND Exhibit E-1I
COMPARATIVE BALANCE SHEET
September 30, 1999 and 1998 I
1999 1998
Assets
III
Current Assets
Cash and cash equivalents $ 806,847 $ 798,086
Receivables: I
Customer accounts 909,370 848,865
Other 82,624 82,814
Prepaid and other assets 7,885 62,181
Total Current Assets 1,806,726 1,791,946
Restricted Assets
Investment in Blackhawk joint venture 255,531 255,531 1
Deposits and impact fees 208,768 292,489
464,299 548,020
Land,buildings,and equipment,at cost 35,731,967 34,956,086 1
Less accumulated depreciation (11,637,117) (10,810,835)
Land,Buildings,and Equipment,Net 24,094,850 24,145,251
Total Assets $ 26,365,875 $ 26,485,217
Liabilities and Fund Equity
Current Liabilities
Accounts payable $ 312,622 $ 221,862
Accrued liabilities 149,378 120,713
Compensated absences 96,222 74,942
Customer deposits 255,810 230,065
Bonds payable,current portion 492,375 966,750
Certificates of obligation payable,current portion 170,000 160,000
Total Current Liabilities 1,476,407 1,774,332
Long-Term Liabilities
Bonds payable, less current portion 1,598,838 2,137,101
Certificates of obligation payable,less current portion 5,255,000 5,425,000
Accreted interest on premium compound interest bonds 338,888 300,114
Total Long-Term Liabilities 7,192,726 7,862,215
Total Liabilities 8,669,133 9,636,547
Fund Equity
Contributed capital 12,435,358 12,435,358 1
Retained Earnings 5,261,384 4,413,312
Total Fund Equity 17,696,742 16,848,670 1
Total Liabilities and Fund Equity $ 26,365,875 $ 26,485,217
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76 1
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CITY OF FRIENDSWOOD,TEXAS
I ENTERPRISE FUND Exhibit E-2
SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN
WORKING CAPITAL -BUDGET AND ACTUAL(NON-GAAP BUDGETARY BASIS)
IYear Ended September 30,1999
with comparative actual balances for the Year Ended September 30, 1998
I1999 1998
Variance
Favorable'
Budget Actual (Unfavorable Actual
Revenues
Water charges $ 3,251,254 $ 3,344,067 $ 92,813 $ 3,761,896
I Sewer charges 2,059,140 2,060,073 933 2,027,557
Interest revenue 23,001 78,567 55,566 25,972
Total Revenues 5,333,395 5,482,707 149,312 5,815,425
I expenditures
Water Operations:
Personnel services 303,393 328,877 (25,484) 295,993
I Supplies 71,610 90,585 (18,975) 53,812
Repairs and maintenance 127,767 140,738 (12,971) 123,799
Other services and charges 523,037 526,258 (3,221) 522,643
I Capital outlay 738,722 634,947 103,775 187,663
Debt Service 955,986 1,027,518 (71,532) 1,125,688
Total Water Operations 2,720,515 2,748,923 (28,408) 2,309,598
I Sewer Operations:
Personnel services 256,841 224,554 32,287 163,950
Supplies 13,532 18,873 (5,341) 6,552
I Repairs and maintenance 85,656 118,166 (32,510) 86,658
Other services and charges 1,186,021 900,720 285,301 1,008,312
Capital outlay 319,485 162,557 156,928
I Debt Service 629,907 638,924 (9,017) 538,063
Total Sewer Operations 2,491,442 2,063,794 427,648 1,803,535
Administration:
I Personnel services 210,346 248,345 (37,999) 236,155
Supplies 22,934 50,511 (27,577) 31,440
Repairs and maintenance 6,102 2,600 3,502 7,500
I Other services and charges 107,271 101,586 5,685
(8,045) 119,631
Capital outlay 8,045 3,054
Total Administration 346,653 411,087 (64,434) 397,780
ITotal Expenditures 5,558,610 5,223,804 334,806 4,510,913
•
Other Financing Sources and(Uses1
I Operating transfers in 250,000 250,000
Operating transfers(out) (739,110) (737,181) 1,929 (557,983)
(489,110) (487,181) 1,929 (557,983)
INet Increase(Decrease)in Working Capital (714,325) (228,278) 486,047 746,529
Working Capital-Beginning of Year 1,429,740 1,429,740 - 683,211
IWorking Capital-End of Year $ 715,415 $ 1,201,462 $ 486,047 $ 1,429,740
77
I
CITY OF FRIENDSWOOD,TEXAS
ENTERPRISE FUND Exhibit E-3
SCHEDULE OF BONDS PAYABLE-
BY MATURITY DATE
September 30, 1999
I
Due During Annual Requirements for All Series
Fiscal Year Total Total Total 111
Ending Principal Interest Principal and
Sept.30, Due Due Interest Due
2000 $ 492,375 $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
Totals $ 2,137,101 $614,260 $ 2,751,361
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
2000 $ 139,875 $251,625 $ 391,500 $ 352,500 $ 77,823 $ 430,323 1
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 28,711 433,711111
2004 9,830 28,420 38,250 423,750 9,799 433,549
Totals $ 198,351 $388,899 $ 587,250 $ 1,938,750 $ 225,361 $ 2,164,111
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78 1
I
CITY OF FRIENDSWOOD,TEXAS
IENTERPRISE FUND Exhibit E-4
SCHEDULE OF CERTIFICATES OF OBLIGATION-
I BY MATURITY DATE
September 30, 1999
I
Due During Annual Requirements for All Series Series 1995
I 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
I 2000 $ 170,000 $ 304,654 $ 474,654 $ 80,000 $ 171,189 $ 251,189
2001 175,000 292,494 467,494 85,000 165,104 250,104
2002 185,000 279,797 464,797 90,000 158,651 248,651
I 2003 200,000 266,910 466,910 100,000 151,645 251,645
2004 210,000 253,945 463,945 100,000 144,270 244,270
2005 645,000 228,494 873,494 155,000 134,964 289,964
I 2006 680,000 191,064 871,064 190,000 124,239 314,239
2007 715,000 152,935 867,935 230,000 112,923 342,923
2008 760,000 112,488 872,488 275,000 99,150 374,150
2009 815,000 69,175 884,175 815,000 69,175 884,175
I2010 870,000 23,381 893,381 870,000 23,381 893,381
Totals $ 5,425,000 $ 2,175,337 $ 7,600,337 $ 2,990,000 $ 1,354,691 $ 4,344,691
I
I Due During Series 1992
Fiscal Year Principal Interest Due
Ending Due November 1,
Sept.30, November 1 May 1 Total
I2000 $ 90,000 $ 133,465 $ 223,465
2001 90,000 127,390 217,390
I 2002 95,000 121,146 216,146
2003 100,000 115,265 215,265
2004 110,000 109,675 219,675
I 2005 490,000 93,530 583,530
2006 490,000 66,825 556,825
2007 485,000 40,012 525,012
2008 485,000 13,338 498,338
2009
2010
ITotals $ 2,435,000 $ 820,646 $ 3,255,646
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79
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1
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I
I
GENERAL FIXED ASSETS
This account group is established to account for the fixed assets owned by the City
excluding those relating to Enterprise Fund operations. Expenditure transactions to
acquire general fixed assets occur in the Governmental Fund Types.
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81
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I
CITY OF FRIENDSWOOD, TEXAS
I GENERAL FIXED ASSETS Exhibit F-1
COMPARATIVE SCHEDULES OF GENERAL FIXED ASSETS-
BY SOURCE
ISeptember 30, 1999 and 1998
II1999 1998
I General Fixed Assets
Land $ 3,337,140 $ 3,332,864
Buildings 4,726,051 4,535,249
I Improvements 17,933,869 16,776,933
Equipment 5,309,050 4,872,248
Construction in progress 323,263 897,486
' Total General Fixed Assets $ 31,629,373 $ 30,414,780
I
Investment in General Fixed Assets From
I General obligation bonds $ 4,591,258 $ 4,591,258
Time warrants and certificates of
obligation 4,861,440 4,861,440
I Federal,state,and local grants 3,571,378 3,546,509
Municipality 15,849,762 14,864,601
Donations 2,755,535 2,550,972
ITotal Investment in
General Fixed Assets $ 31,629,373 $ 30,414,780
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83
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I
CITY OF FRIENDSWOOD,TEXAS
GENERAL FIXED ASSETS
SCHEDULE OF GENERAL FIXED ASSETS-
BY FUNCTION AND ACTIVITY
September 30, 1999 1
I
Function and Activity Land Buildings Improvements
General Government
City Manager $ $ $
City Secretary I
Administrative Services
Total General Government
Public Safety
Police 10,542 728,007 I
Fire 18,000 267,322
Emergency management
Total Public Safety 28,542 995,329 1
Public Works
111
Streets and drainage 375,408 141,816 15,838,980
Total Public Works 375,408 141,816 15,838,980
Community Development
Planning and zoning
Engineering
Inspection
Total Community Development I
Community Services
Library 28,838 591,760
Parks and recreation 1,908,737 382,726 1,196,225
Community activities 308,914
Swimming pool 552,700 776,877
Buildings 442,915 2,305,506 121,787 I
Total Community Services 2,933,190 3,588,906 2,094,889
Construction in progress
I
Total General Fixed Assets $ 3,337,140 $ 4,726,051 $ 17,933,869
I
84 1
I
I
Exhibit F-2
1
IConstruction
Equipment In Progress Total
i
$ 28,611 $ $ 28,611
1 90,929 90,929
954,716 954,716
1 1,074,256 1,074,256
I
1,073,668 1,812,217
1,818,193 2,103,515
85,769 85,769
1 2,977,630 4,001,501
1 377,550 16,733,754
1 377,550 16,733,754
I
1,406 1,406
2,368 2,368
25893.00 25893.00
111
29,667 29,667
1 219,287 839,885
322,807 3,810,495
54,624 363,538
I
15,268 1,344,845
237,961 3,108,169
1 849,947 9,466,932
323,263 323,263
1
$ 5,309,050 $ 323,263 $ 31,629,373
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85
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I
CITY OF FRIENDSWOOD, TEXAS
GENERAL FIXED ASSETS Exhibit F-3
SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS-
BY FUNCTION AND ACTIVITY
Year Ended September 30, 1999 1
General General I
Fixed Assets Fixed Assets
Function and October 1, Transfers and September 30,
Activity 1998 Additions Retirements 1999
General Government
City Manager $ 23,605 $ 5,006 $ $ 28,611
City Secretary 44,704 46,225 90,929
Administrative Services 941,822 12,894 954,716
Total General Government 1,010,131 64,125 1,074,256
public Safety I
Police 1,678,898 155,776 (22,457) 1,812,217
Fire 1,960,441 143,074 2,103,515
Emergency management 61,745 24,024 85,769
Total Public Safety 3,701,084 322,874 (22,457) 4,001,501
Public Works
Streets and drainage 15,615,010 230,939 887,805 16,733,754
Total Public Works 15,615,010 230,939 887,805 16,733,754
Community Development I
Planning and zoning 1,406 1,406
Engineering 783 1,585 2,368
Inspection 25,893 25,893
111
Total Community Development 2,189 27,478 29,667
Community Services
Library 838,795 1,090 839,885
Parks and recreation 3,787,475 23,020 3,810,495
Community activities 363,538 363,538
Swimming pool 1,285,788 59,057 1,344,845
Buildings 2,913,284 201,122 (6,237) 3,108,1693
Total Community Services 9,188,880 284,289 (6,237) 9,466,932
Construction in progress 897,486 323,263 (897,486) 323,263
Total General Fixed Assets $ 30,414,780 $ 1,252,968 $ (38,375) $ 31,629,373
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86 1
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GENERAL LONG—TERM DEBT
IThis account group is established to account for the principal outstanding on
general obligation bonds and other long-term liabilities.
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87
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CITY OF FRIENDSWOOD,TEXAS
I COMPARATIVE SCHEDULES OF Exhibit G-1
GENERAL LONG-TERM DEBT
September 30, 1999 and 1998
1
1 1999 1998
I Amount Available and to be Provided for
the Payment of General Long-Term Debt
Amount available in Debt Service Fund $ 73,344 $ 187,908
Amount to be provided for retirement of general long-term
' debt 3,338,218 3,539,077
Total Amount Available and to be Provided $ 3,411,562 $ 3,726,985
1
IGeneral Long-Term Debt Payable
Accretion on premium compound interest bonds $ 414,197 $ 366,806
Obligations under capital leases 198,688 153,252
' Certificates of obligation g 1,910,000 1,990,000
' Revenue Bonds 17,000
General obligation bonds 888,677 1,199,927
Total General Long-Term Debt Payable $ 3,411,562 $ 3,726,985
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89
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CITY OF FRIENDSWOOD,TEXAS
SCHEDULE OF CHANGES IN GENERAL LONG-TERM DEBT
September 30, 1999 and 1998
1
Amounts I
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 1
04/14/93 Refunding Bonds- Series 1993 2.25% -4.625% 3,480,000
Obligations under capital leases 195,924
Accretion on premium compound interest bonds 1
Totals
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1
90
1
' Exhibit G-2
Amounts Amounts
I
Outstanding Issued Retired Outstanding
October 1, Current Current September 30,
' 1998 Year Year 1999
$ 17,000 $ $ 17,000 $
' 242,427 - 242,427
1,990,000 80,000 1,910,000
957,500 311,250 646,250
3,206,927 408,250 2,798,677
' 153,252 149,780 104,344 198,688
' 366,806 47,391 414,197
I $3,726,985 $ 197,171 $ 512,594 $ 3,411,562
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91
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CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF GENERAL LONG-TERM DEBT
SERVICE REQUIREMENTS TO MATURITY
September 30, 1999
I
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
2000 437,139 448,400 885,539 170,958 307,542 * 478,500 1
2001 263,240 190,488 453,728 30,744 62,756 * 93,500
2002 327,526 147,594 475,120 14,965 34,535 * 49,500
2003 344,136 131,719 475,855 13,746 35,754 * 49,500
2004 365,323 113,548 478,871 12,014 34,736 * 46,750
2005 285,000 61,320 346,320
2006 305,000 45,238 350,238
2007 325,000 27,913 352,913
2008 345,000 9,488 354,488
Totals $ 2,997,365 $ 1,175,708 $ 4,173,073 $ 242,427 $ 475,323 $ 717,750 1
Due During
Fiscal Year
Ending Obligations Under Capital Leases
Sept.30, Principal Interest Total
2000 $ 68,681 $ 9,647 $ 78,328
2001 38,746 6,621 45,367
2002 28,811 5,005 33,816
2003 30,390 3,426 33,816
2004 32,059 1,760 33,819
2005
2006
2007
2008
Totals $ 198,688 $ 26,459 $ 225,147
* Includes accretion on premium compound interest bonds.
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92
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IExhibit G-3
I
Certificates of Obligation Refunding Bonds
Series 1992 Series 1993
IPrincipal Interest Due Principal Interest Due
Due March 1, Due March 1,
March 1 September 1 Total March 1 September 1 Total
I80,000 105,270 185,270 117,500 25,941 143,441
70,000 100,208 170,208 123,750 20,903 144,653
I 155,000 92,614 247,614 128,750 15,440 144,190
165,000 82,969 247,969 135,000 9,570 144,570
180,000 73,785 253,785 141,250 3,267 144,517
285,000 61,320 346,320 I
305,000 45,238 350,238
325,000 27,913 352,913
345,000 9,488 354,488
I $ 1,910,000 $ 598,805 $ 2,508,805 $ 646,250 $ 75,121 $ 721,371
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93
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UNAUDITED STATISTICAL SECTION
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95
I
CITY OF FRIENDSWOOD, TEXAS
GENERAL GOVERNMENT REVENUES BY SOURCE I
Last Ten Fiscal Years
I
Function 1989 1991 1992 1993 1994 1
General property taxes $ 4,562,856 $ 4,557,133 $ 4,749,173 $ 4,958,863 $ 5,249,517
Sales taxes 607,349 690,327 742,725 808,405 979,890 1
Franchise taxes 400,986 419,062 456,566 541,841 530,059
Sanitation 542,911 595,244 733,245 780,604 838,542 1
Fines and forfeitures 190,106 166,982 166,355 171,154 174,487
Permits and fees 143,105 240,294 286,421 337,539 319,384 1
Intergovernmental revenue 53,464 50,984 28,641 34,006 32,273
Interest on investments 185,037 222,328 232,773 153,558 154,195 1
Other revenue 118,539 115,107 139,525 208,466 219,615
$ 6,804,353 $ 7,057,461 $ 7,535,424 $ 7,994,436 $ 8,497,962 1
I
Includes General, Special Revenue,and Debt Service Funds.
Source-Accounting records of the City. I
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96 I
I
ITable 1
I
I1995 1996 1997 1998 1999
$ 5,553,218 $ 5,865,855 $ 5,660,697 $ 5,957,486 $ 6,310,919
I
1,001,832 1,028,528 1,439,030 1,805,791 1,855,121
570,031 863,183 852,091 801,709 821,943
I966,066 1,085,149 1,017,028 982,432 1,013,415
217,411 266,287 353,742 304,017 332,659
I 296,003 234,518 401,720 699,432 635,905
48,101 46,060 40,055 346,879 553,352
107,089 193,588 238,009 222,586 292,886
I
330,313 354,627 224,097 525,228 386,084
I $ 9,090,064 $ 9,937,795 $ 10,226,469 $ 11,645,560 $ 12,202,284
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97
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I
CITY OF FRIENDSWOOD, TEXAS
GENERAL GOVERNMENT EXPENDITURES BY FUNCTIONI
Last Ten Fiscal Years
I
Function 1990 1991 1992 1993 1994
General government $ 1,167,194 $ 1,258,050 $ 1,085,683 $ 1,112,882 $ 1,149,344
Public safety 2,038,066 2,173,685 2,478,564 3,061,016 2,814,658 1
Public works 1,108,423 1,196,889 1,521,841 1,537,447 1,621,896
Sanitation 592,819 730,710 752,763 823,028 953,186 I
Community development 257,750 281,723 289,501 326,854 386,976
Community services 768,533 949,048 1,048,606 1,087,039 1,319,689 '
Debt service 1,305,728 1,304,597 1,301,928 1,315,242 1,434,052
$ 6,645,694 $ 7,163,992 $ 7,726,123 $ 8,440,480 $ 8,726,615 I
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Includes General, Special Revenue,and Debt Service Funds.
Source-Accounting records of the City. I
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98 1
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ITable 2
I
1995 1996 1997 1998 1999
I $ 1,478,817 $ 1,481,710 $ 1,615,770 $ 1,937,096 $ 2,051,684
I 2,846,169 3,206,222 3,329,960 4,043,792 4,166,008
1,783,738 1,792,014 1,805,947 1,946,904 1,601,048
946,460 954,018 939,395 988,422 980,681
I413,489 463,813 450,916 413,024 522,128
1,426,792 1,656,146 1,686,909 1,904,926 2,193,860
I1,427,360 1,579,490 1,202,192 909,369 698,546
$ 9,376,365 $ 10,179,395 $ 11,031,089 $ 12,143,533 $ 12,213,955
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99
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CITY OF FRIENDSWOOD,TEXAS
PROPERTY TAX LEVIES AND COLLECTIONSI
Last Ten Fiscal Years
I
Percent of I
Fiscal Year Tax Total Tax Current Tax Levy
Ended Sept.30, Year Tax Rate Levy Collections Collected
1990 1989 $ 0.6950 $ 4,531,537 $ 4,427,153 97.70% I
1991 1990 0.6950 4,636,066 4,561,109 98.38%
1992 1991 0.6950 4,869,697 4,782,350 98.21% 1
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 5,762,039 5,717,509 99.23%
1996 1995 0.6156 5,610,277 5,568,094 99.25%
1997 1996 0.6045 5,692,451 5,652,357 99.30%
1998 1997 0.5961 5,886,162 5,844,583 99.29%
1999 1998 0.6125 6,292,040 6,229,896 99.01%
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Source-Tax assessor/collector's records.
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100 I
I
ITable 3
Outstanding
Total Delinquent
I
Delinquent Collections as Outstanding Taxes as
Tax Total Tax Percent of Delinquent Percent of
Collections Collections Current Levy # Taxes Levy
I $ 74,484 $4,501,637 99.34% $ 371,886 8.21%
107,112 4,668,221 100.69% 339,731 7.33%
120,660 4,903,010 100.68% 306,418 6.29%
91,531 5,172,615 99.87% 313,078 6.04%
I103,113 5,487,136 100.68% 276,097 5.07%
89,977 5,807,486 100.79% 230,650 4.00%
I 54,842 5,622,936 100.23% 231,973 4.13%
53,927 5,706,284 100.24% 230,990 4.06%
I 89,625 5,934,208 100.82% 237,656
207,417 4.04%
50,435 6,280,331 99.81% 3.30%
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101
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CITY OF FRIENDSWOOD,TEXAS
ASSESSED AND ESTIMATED Table 4
ACTUAL VALUE OF TAXABLE PROPERTY
Last Ten Fiscal Years
I
Ratio of
Fiscal Year Estimated Assessed Value
Ended Tax Assessed Actual to Estimated New
Sept.30, Year Value Value Actual Value Construction I
1990 1989 $ 653,106,888 $ 759,841,760 86% $ 37,068,554
1991 1990 667,059,850 761,569,171 88% 46,975,722
1992 1991 700,373,270 806,261,160 87% 63,126,050
1993 1992 781,187,783 917,420,470 85% 61,604,061
1994 1993 825,111,643 976,268,953 85% 64,653,799
1995 1994 869,085,848 1,021,248,848 85% 34,680,410
1996 1995 911,351,022 1,165,107,496 78% 42,440,747 1
1997 1996 941,679,232 1,207,803,598 78% 41,528,406
1998 1997 987,445,395 1,265,399,421 78% 90,683,060 1
1999 1998 1,027,271,860 1,322,329,377 78% 74,555,875
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Source-Tax assessor/collector's records.
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CITY OF FRIENDSWOOD, TEXAS
I TAX RATE DISTRIBUTION Table 5
Last Ten Fiscal Years
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Fiscal year Debt Service
Ended Sep.30, Tax Year General Fund Fund Total Tax Rate
1990 1989 $ 0.53330 $ 0.16170 $ 0.69500
1991 1990 0.50876 0.18624 0.69500
1992 1991 0.50900 0.18600 0.69500
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1993 1992 0.50160 0.16140 0.66300
1994 1993 0.50250 0.16050 0.66300
I1995 1994 0.51400 0.14900 0.66300
1996 1995 0.46800 0.14760 0.61560
I 1997 1996 0.49610 0.10840 0.60450
1998 1997 0.52760 0.06850 0.59610
1999 1998 0.56100 0.05150 0.61250
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ISource-City's tax ordinances.
Tax rates are per$100 valuation.
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CITY OF FRIENDSWOOD, TEXAS
PROPERTY TAX RATES PER$100 VALUATION I
DIRECT AND OVERLAPPING
Last Ten Fiscal Years
Friendswood Clear Creek
Independent Independent Clear Creek
Tax City of School School Drainage Harris
Fiscal Year Year Friendswood District District District County
Tax Rates per$100 valuation
1990 1989 $ 0.6950 $ 1.5500 $ 1.0750 $ 0.1500 $ 0.32600
1991 1990 0.6950 1.5500 1.2890 0.1500 0.31483
1992 1991 0.6950 1.6500 1.2990 0.1500 0.32188
1993 1992 0.6630 1.7200 1.4256 0.1450 0.32909
1994 1993 0.6630 1.6180 1.4600 0.1450 0.33854
1995 1994 0.6630 1.6090 1.4700 0.1430 0.36281
1996 1995 0.6156 1.5900 1.4700 0.1410 0.43330
1997 1996 0.6045 1.5900 1.5150 0.1430 0.42760
1998 1997 0.5961 1.5750 1.5900 0.1425 0.41660
1999 1998 0.6125 1.6720 1.6415 0.1500 0.39480
Source-Tax Department records of the various taxing authorities. I
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ITable 6
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Port of Harris County
Galveston Houston Harris County Hospital
County Authority Flood Control District
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$ 0.4450 $ 0.01267 $ 0.05130 $ 0.16600 I
0.4650 0.01327 0.06190 0.16621
0.4251 0.01531 0.05280 0.19621
I 0.4650 0.01496 0.05590 0.19621
0.4650 0.01222 0.05565 0.18975
0.4850 0.01316 0.06252 0.18350
0.5200 0.01300 0.07424 0.12381
0.5472 0.01600 0.07420 0.12380
0.5200 0.02130 0.08000 0.12380
0.5200 0.02040 0.08000 0.14650
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CITY OF FRIENDSWOOD,TEXAS
PRINCIPAL TAXPAYERS Table 7
September 30, 1998
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Percent I
of Total
Assessed Assessed
Taxpayer Type of Property Valuation Valuation I
1 . Exxon Corporation Oil and Gas $ 24,477,740 2.38%
2 . Southwestern Bell Telephone Utility Company 13,058,690 1.27%
3 . Texas New Mexico Power Utility Company 11,353,480 1.11% II
4 . Blackhawk Apartments Quail Crossing Apartments 8,766,020 0.85%
5 . Friendswood Retirement Living Ltd. Retirement Home 8,346,695 0.81%
6 . Autumn Creek Developer 7,842,820 0.76%
7 . Southwest Properties Seahawk Properties 7,539,980 0.73% I
8 . Albertson's Albertson's Shopping Center 5,592,330 0.54%
9 . MaxiBan The Bedford Condominiums 4,930,620 0.48%
10 . Mystic, Ltd. Nursing Home 3,933,640 0.38%
95,842,015 9.33% 1
All other taxpayers 931,429,845 90.67% 111
Totals $ 1,027,271,860 100.00% 1
Source-Tax assessor/collector's records.
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CITY OF FRIENDSWOOD, TEXAS
I RATIO OF ANNUAL DEBT SERVICE EXPENDITURES Table 8
FOR GENERAL BONDED DEBT
TO TOTAL GENERAL EXPENDITURES
' Last Ten Fiscal Years
IRatio of
Interest Total Debt Total Debt Service
I Fiscal and Fiscal Service General Requirements
Year Principal Charges Requirements Expenditures to Expenditures
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%
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1992 830,000 485,242 1,315,242 8,440,480 15.58%
1993 945,000 489,052 1,434,052 8,726,615 16.43%
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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%
I 1996 963,272 238,920 1,202,192 10,091,694 11.91%
1997 733,568 202,138 935,706 11,187,677 8.36%
1998 709,094 200,275 909,369 12,143,533 7.49%
I1999 512,594 185,952 698,546 12,213,955 5.72%
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CITY OF FRIENDSWOOD,TEXAS
REVENUE BOND COVERAGE
Last Ten Fiscal Years
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Operating Net Operating
Number Number Expenses Revenue
Fiscal of Water of Sewer Operating Before Available for
Year Customers Customers Revenue Depreciation Debt Service
1990 6,968 6,719 $ 3,472,772 $ 1,597,064 $ 1,875,708 1
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 1
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 1,590,491
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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 I
1997 8,534 8,199 4,744,557 2,802,914 1,941,643
1998 8,893 8,377 5,815,425 2,679,707 3,135,718
1999 9,123 8,679 5,482,707 2,781,480 2,701,227 1
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Note A- The amounts only include Revenue bonds and do not include amounts paid by
the Enterprise Fund for Combination Tax and Revenue Bonds which are
secured by Tax Revenues
Source- Accounting records of the City. I
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Table 9
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I Revenue Bond(A)
Debt Service Requirements
Principal Interest Total Coverage
I $ 130,000 $ 56,275 $ 186,275 10.07
130,000 46,906 176,906 8.60
' 135,000 38,916 173,916 8.65
135,000 31,022 166,022 9.41
135,000 25,710 160,710 9.90
' 140,000 15,581 155,581 14.52
45,000 10,244 55,244 40.99
I45,000 7,503 52,503 36.98
33,000 3,032 36,032 86.35
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33,000 3,032 36,032 74.97
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CITY OF FRIENDSWOOD, TEXAS
RATIO OF NET GENERAL BONDED DEBT TO ASSESSED
VALUE AND NET BONDED DEBT PER CAPITA
Last Ten Fiscal Years
1
Fiscal Year Less Debt I
Ended Assessed Gross Service Net
Sept.30, Population Value Bonded Debt Funds Bonded Debt I
1990 22,710 $ 667,059,850 $ 8,080,778 $ 57,308 $ 8,023,470
1991 22,814 700,373,270 7,365,778 50,854 7,314,924 I
1992 25,680 781,187,783 6,575,778 78,244 6,497,534
1993 26,333 825,111,643 9,061,649 45,501 9,016,148 I
1994 27,356 869,085,848 8.160,895 47,281 8,113,614
1995 27,700 911,351,022 4,776,263 56,968 4,719,295
1996 28,602 941,679,232 3,935,477 298,053 3,637,424 1
1997 28,902 987,445,395 3,606,427 392,220 3,214,207
1998 30,787 987,445,395 3,206,927 187,908 3,019,019 1
1999 31,192 1,027,271,860 2,798,677 73,344 2,725,333
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Source-Tax assessor/collector and accounting records of the City. I
(1) Reflects reallocation of debt to Enterprise Funds in 1994-95 in the amount of$2.5 million.
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ITable 10
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Ratio of Net
Bonded Debt Net Bonded
to Assessed Debt
IValue Per Capita
1.20% 353
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1.04% 321
0.83% 253
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1.09% 342
0.93% 297
0.52% (1) 170
1 0.39% 127
0.33% 111
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0.31% 98
0.27% 87
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CITY OF FRIENDSWOOD, TEXAS
COMPUTATION OF DIRECT AND OVERLAPPING DEBT Table 11
September 30, 1999
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Percentage
Applicable City of 1
Net Debt to City of Friendswood's
Name of Governmental Unit Outstanding Friendswood Share of Debt
Friendswood Independent
School District $ 29,274,746 100.00% $ 29,274,746
Clear Creek Independent
School District 169,392,525 6.81% 11,535,631 I
Galveston County 24,456,287 5.68% 1,389,117
Harris County 828,454,546 0.15% 1,242,682
Harris County Flood
Control District 161,025,087 0.15% 241,538
Port of Houston Authority 170,945,000 0.15% 256 418
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Total Net Overlapping Debt 43,940,131 1
City of Friendswood 2,725,333 1
Total Net Direct and Overlapping Debt $ 46,665,464
Total overlapping debt per capita 1,496
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CITY OF FRIENDSWOOD, TEXAS
I MISCELLANEOUS STATISTICAL DATA Table 12
September 30, 1999 Page 1 of 2
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Date of incorporation October 15, 1960
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Date of present charter Adopted Home Rule Charter
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October 16, 1971
IForm of government Council-Manager
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Area 22.70 square miles
I Miles of Streets
Streets-Paved 98.1 miles
Streets-Unpaved 2.12 miles
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Fire Protection
I Number of stations 3
Number of employees(Full-time equivalent) 6.00
Number of volunteers 98
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Fire Prevention
INumber of employees(Full-time equivalent) 2.80
Number of volunteers
Ipolice Protection
Number of stations 1
Number of sworn officers(Full-time equivalent) 38.48
INumber of patrol units 12
I Recreation
Number of parks 6
Size of parks 110.5 acres
I Number of swimming pools 1
Number of tennis courts 4
IMiles of storm sewers 84.74 miles
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CITY OF FRIENDSWOOD, TEXAS
MISCELLANEOUS STATISTICAL DATA Table 12
September 30, 1999 Page 2 of 2
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Education
Friendswood Independent School District:
Number of teachers 317
Number of students 4,891
Clear Creek Independent School District:
Number of teachers 1,776
Number of students 28,790
City Employees
Department heads 6
Employees:
Full-time 132
Part-time(Full-time equivalent) 21
Total 159
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Election
Number of Votes Cast:
Last City Election-Regular Election 2,497
Water
Source Ground Water Surface Water
Average daily consumption 1,515,000 gallons 2,475,000 gallons
Maximum daily consumption 7,215,000 gallons 5,121,000 gallons
Water mains 120 miles
Number of connections 9,123
Sewer Blackhawk
Average daily flow 2,305,000 gallons
Maximum daily flow 8,750,000 gallons
Sanitary sewer mains 120 miles
Number of connections 8,679
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