HomeMy WebLinkAbout2001 09 30 Annual Comprehensive Financial Report - City of Friendswood COMPREHENSIVE
ANNUAL FINANCIAL REPORT
City of Friendswood, Texas
LL; Fiscal Year Ended
September 30, 2001
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Officials Issuing Report
Ronald E. Cox
City Manager
Roger C. Roecker
Director of Administrative Services
CITY OF FRIENDSWOOD,TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS
Exhibit Page •
INTRODUCTORY SECTION
Letter of Transmittal 1
Organization Chart 16
Certificate of Achievement for Excellence in Financial Reporting 17
Principal Officials 18
FINANCIAL SECTION
Independent Auditors' Report 21
GENERAL PURPOSE FINANCIAL STATEMENTS
Combined Balance Sheet-All Fund Types and Account Groups A-1 24
Combined Statement of Revenues,Expenditures and Changes in Fund
Balances-All Governmental Fund Types A-2 28
Combined Statement of Revenues,Expenditures and Changes in Fund
Balances—Budget and Actual (Budgetary Basis)—General, Certain
Special Revenue, and Debt Service Funds A-3 30
Combined Statement of Revenues,Expenses and Changes in Retained
Earnings/Fund Balance-Proprietary Fund Type and Non-Expendable
Trust Fund A-4 32
Combined Statement of Cash Flows-Proprietary Fund Type and Non-
Expendable Trust Fund A-5 34
Notes to Financial Statements A-6 36
{ Required Pension System Supplementary Information A-7 58
COMBINING,INDIVIDUAL FUND AND ACCOUNT GROUP
STATEMENTS AND SCHEDULES
General Fund: •
Comparative Balance Sheet B-1 62
Statement of Revenues,Expenditures and Changes in Fund Balance-Budget
and Actual (Budgetary Basis) B-2 63
Special Revenue Funds:
Combining Balance Sheet C-1 72
Combining Statement of Revenues,Expenditures and Changes in Fund
Balance C-2 74
Statement of Revenues,Expenditures,and Changes in Fund Balance-Budget
and Actual (Fire/EMS Donations) C-3 76
Debt Service Fund:
Comparative Balance Sheet D-1 78
Statement of Revenues,Expenditures and Changes in Fund Balance-Budget
and Actual D-2 79
Enterprise Fund:
Comparative Balance Sheet E-1 83
Schedule of Bonds Debt Service Requirements to Maturity E-2 84
Schedule of Certificates of Obligation Debt Service Requirements to Maturity E-3 86
CITY OF FRIENDSWOOD, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS
Exhibit, Page
FINANCIAL SECTION (continued)
COMBINING,INDIVIDUAL FUND AND ACCOUNT GROUP
STATEMENTS AND SCHEDULES(continued)
General Fixed Asset Account Group:
Comparative Schedules of General Fixed Assets by Source F-1 89
Schedule of General Fixed Assets by Function and Activity F-2 90
Schedule of Changes in General Fixed Assets by Function and Activity F-3 92
General Long-Term Debt Account Group:
Comparative Schedules of General Long-Term Debt G-1 95
Schedule of General Long-Term Debt Service Requirements to Maturity G-2 96
UNAUDITED STATISTICAL SECTION
General Government Revenues By Source 1 100
General Governmental Expenditures by Function 2 102
Property Tax Levies and Collections 3 104
Assessed and Estimated Actual Value of Taxable Property 4 106
Tax Rate Distribution 5 107
Direct and overlapping Property Tax Rates 6 108
Principal Taxpayers 7 110
Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total
General Expenditures 8 111
Revenue Bond Coverage 9 112
Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt
Per Capita 10 114
Computation of Direct and Overlapping Debt 11 116
Miscellaneous Statistical Data 14 117
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H Ci of Friendswood
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March 28,2002
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, 2001, 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 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.
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 amount of$927,503. 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$541,573 during the year. The City is participating in expansion of the
Southeast Water Purification plant increasing the City's share of production pumping costs from 3.75%to
5%. The expansion target completion date is December 31,2002.
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RANGE OF CITY SERVICES PROVIDED
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.
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 _
64 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, one
Assistant and one Deputy Fire Marshals, one Administrative Secretary, one full-time fire captain 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
The street department is responsible for the repair and maintenance of all city streets and roadside
drainage. This department consists of thirteen employees.
Sanitation
The city's solid waste services, including curbside pickup of recyclable materials and green waste
recycling, 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.
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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 31,761. 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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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 8,500 establishments and 100,000 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. During 2001
CLAEDF "successfully recruited seven new companies to the Clear Lake region, which will create 834
new jobs, 592 indirect jobs and contribute approximately $53.6 million each year to the local economy."
MAJOR INITIATIVES
For the Year.
During the fiscal year 2001 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
During the fiscal year 2001 budget preparation the main focus on street construction shifted from concrete
to asphalt streets and $500,000 was budgeted for reconstruction. Council approved a multi-year plan to
overlay with asphalt a number of streets in the city that are not prime for reconstructing with concrete,yet
need to be resurfaced to protect their integrity and provide a smooth riding surface. The first year of that
multi-year project was to have begun during the summer of 2001; however, due to the intense work
required over a long period of time by city staff on Tropical Storm Allison flood cleanup,the project was
delayed. On December 10, 2001 a bid was awarded, in the amount of $400,042 and work begun on
fourteen streets identified in Phase I: 1) Street Overlays: Chester Drive, Cowards Creek Court, Cowards
Creek Drive, Falling Leaf Drive, Laurel Drive, Meadowlark Avenue, East Shadowbend Avenue,
_ I Whispering Pines Avenue and Briar Creek; 2) Street Reclaims: Clover Ridge Avenue, Fence Post Road,
Meadowlark Avenue,Rustic Lane and Westfield Lane.
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$39,032 was budgeted for new sidewalk construction for fiscal year 2001. This amount was combined
with unappropriated prior year budgeted sidewalk funds and a bid awarded for $57,645 on October 1,
2001 to construct 3,260 LF of sidewalks on the Safe School Route Sidewalk Program: W. Shadowbend
from Woodlawn to FM 518,E. Shadowbend from Quaker to FM 518 and Quaker from E. Shadowbend to
Skyview.
In addition, $114,032 was budgeted for one-half- the City's matching cost towards preliminary
engineering and environmental assessment on two Harris county road projects;Brittany Bay Boulevard,
$89,932; and Friendswood Link Road extension, 24,100. The remaining one-half City match is budgeted
in fiscal year 2002. .
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Additional funding during the 2001 fiscal year was appropriated for the City's matching contribution to
Clear Creek Drainage District towards Baker Road bridge in the amount of$50,763.
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In an emergency appropriation June 18, 2001, after Tropical Storm Allison, City Council appropriated
$30,000 to replace a 42 inch ruptured storm sewer pipe on Dorado Street in Sun Meadow, between St.
Cloud and St. Andrews.
Parks
Phase I development of the new Centennial Park, begun in fiscal year 1999-00, continued full force
during fiscal year 2001. Construction included street and drainage infrastructure, parking lots, six soccer
fields and turf for the soccer fields as well as common areas. An additional $21,830 was budgeted
towards installation of an irrigation system for the park. Additional funding during the 2001 fiscal year,
in the amount of$143,248, was appropriated from cellular tower rental revenue. Centennial Park, Phase
I, is scheduled for completion during fiscal year 2001-02. Other Parks equipment included in the fiscal
year 2001 budget was automation of FM 518 sprinkler irrigation system, $16,800; replace crew cab truck,
$26,600, and mower with attachments, $20,000; weight and cardio equipment for Activity Center
exercise room, $15,000; and pool lift for Stevenson Park Pool, $4,100.
Facilities
$372,202 was set aside to construct an employee lunch room, storage facility, wash bay, sign shop and a ;P
six foot electronic security gate, as well as replace the roof, at the Public Works facility. A preliminary i
study was begun for a new Public Safety facility, $16,005. Other facility improvements included a new
roof for Stevenson Park Pool pump room, $2,500; replace restroom fixtures at Renwick Park, $6,400;
plumbing repairs at Fire Station #1, $5,000; replace air conditioning units at Fire Stations #2 and #3, t
$3,500 each, and two units at Public Safety Building, $8,000; and, miscellaneous repairs to the Animal
Control facility, $4,200. $20,000 was budgeted to purchase an electronic reader board sign for City Hall.
Police and Fire Marshal
The fiscal year 2001 police budget included replacing two patrol division cruisers, $51,550; one truck for
criminal investigation division, $21,000; and, replacement of two 100-watt Ultra High Frequency (UHF) L--�
radio repeaters which were 20-plus years old, $13,541. The repeaters insure the integrity and strength of
signal on two police frequencies that are used daily. One replacement vehicle for Fire Marshal fl
department was budgeted at$18,500.
Fire Department
During fiscal year 2001 a new three-quarter ton pick-up was added to the fire department fleet of vehicles
for $40,000. $25,000 was budgeted to replace Medic vehicle, M44. Additional budgeted equipment
included miscellaneous equipment for the new aerial platform fire truck, purchased in 1999-00, $20,000;
automatic external defibrillator, $7,000; and, three new stretchers, $3,000. A multi-year program was
begun to expand radio capabilities in order to communicate with surrounding fire departments using an
800-megahertz radio trunk system. $5,000 was budgeted for the first year to purchase three or four hand-
held radios.
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Water and Sewer
During fiscal year 2001 $32,500 was set aside for conversion of four lift stations to variable speed pumps:
Eagle's Cove (#5), $10,000; Whittier Oaks (#18), $15,000; Forest Bend (#22),. $4,000; and Imperial
Estates (#1), $3,500. $8,000 was budgeted to construct a chlorine room for Water Well#6 and $5,000 to
add an air conditioning system to the Blackhawk Water Plant. The fiscal year 2001 budget included
replacing three pieces of construction equipment: 14 yard dump truck, $61,000; backhoe, $57,925; and,
mini-excavator, $30,000. Four pickup trucks were also budgeted for replacement as scheduled on the
vehicle replacement plan, $60,000. Other budgeted water and sewer equipment included a pan and tilt
camera for sewer line maintenance, $20,000; and, surveying equipment, $11,000.
The City continued the scheduled multi-year water and sewer improvements which were funded by two
Water and Sewer Revenue Bond issues in fiscal year 1999-00. The 1999 bond issue included: replacing
the Coward's Creek 24 inch sanitary trunk line (completed;) constructing the Moore/Mandale waterline
system loop (completed;) replacing the E. Heritage 8 inch sanitary sewer line; installing a 16 inch
waterline on FM 2351 from Melody to Sunset; and, replacing two ground storage tanks at Water Wells
#3, (replace a 500,000 gallon tank with a 500,000 gallon tank)and#4 (replace a 210,000 gallon tank with
a 500,000 gallon tank.) Completion of all projects is scheduled for 2001-02.
The 2000 Water and Sewer Revenue bonds were issued to increase our capacity in the Southeast Water
Purification Plant. These improvements included: purchasing an additional 1.5 million gallons per day
(MGD) surface water capacity when City of Houston expands the plant; the City's share of pumping and
distribution costs for the additional capacity; and, acquire an additional 1.5 MGD capacity by purchasing
excess capacity from other participants in the Southeast Water Purification Plant. Acquiring this
additional surface water capacity is a major accomplishment and will help ensure the City's water supply
needs are met, as more restrictions are placed on the amount of groundwater the City is allowed to utilize.
The projected cost of these improvements is $3,464,618.
In 1992,the Harris-Galveston Coastal Subsidence District(Subsidence District) adopted a regulatory plan
that required any water producer in Area 2, which includes Friendswood, to supply 80 percent of its total
production from surface water sources. The remaining 20 percent could come from groundwater.
Entities within Area 2 could maintain that 80 percent amount at a constant level and use more
groundwater until 2010, when they would again be required to obtain 80 percent of their total production
from surface water sources. This process allowed us to "grow on groundwater." Our circumstances have
changed.
The Subsidence District adopted a revised regulatory plan which went into effect January 1, 2001. The
- City is now required to have sufficient surface water available to supply 80 percent of its needs each year.
Friendswood will no longer be able to grow on groundwater, but will be required to provide a constant
supply of surface water to meet 80 percent of the City's annual needs. Should the City not meet the new
requirements, the Subsidence District's revised regulatory plan calls for a severe, financial disincentive
fee. The fee is $3 per 1,000 gallons of groundwater used over the allowable 20 percent. This represents a
large amount when applied against the City's average surface-to-groundwater ratio of 62:38 percent over
the past 5 years.
As a part of responding to the Subsidence District's requirements, during fiscal year 2001 the City
prepared a Groundwater Reduction Plan (GRP). The GRP is a plan that shows the Subsidence District
how and when we will meet the new requirements. The Subsidence District approved the City's GRP and
the disincentive fee was waived, saving a substantial amount of money. A key item in the GRP was to
identify and negotiate contracts with surface water sources, proving our ability to meet the 80 percent
requirement as soon as possible. In addition to acquiring additional surface water capacity, purchased
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with the 2000 Water and Sewer Revenue bond proceeds referenced above, several water system capital
improvements will be required to take this amount of water into the City's distribution system. These
include a second pump station; a 24-inch trunk main; and, additional elevated and ground storage. The
City sold additional Water and Sewer Revenue Bonds June 1, 2001, in the amount of$6,100;000,to fund
these improvements. The land was purchased for the second pump station and ground storage and design
• engineering began in August 2001 for all projects. Projected completion date for all 2001 bond projects is
fiscal year 2002-03.
Tropical Storm Allison
On June 5-9, 2001 Tropical Storm (TS)Allison struck the Houston metropolitan area leaving a wake of
death and destruction from torrential rainfall, causing$6 billion in damage and 24 deaths in the greater -I
Houston and outlying areas. TS Allison formed in the northwest Gulf of Mexico on June 5,2001 only
five days into the 2001 hurricane season. In Friendswood,this intense storm set an all time record for
rainfall on June 9 surpassing 1979's Tropical Storm Claudette. The five-day rainfall totals registered on
Cowards Creek(a tributary of Clear Creek) at Baker Road Bridge totaled 27.95 inches. This resulted in
Clear Creek cresting at 20.4 feet where the normal level is three to five feet. A total of 25 subdivisions
were affected by flooding and totaled $23,565,357 in damages. 534 homes were damaged or destroyed:
minor damage, 333; major damage, 128; destroyed, 73.
The City's Emergency Operations Center coordinated response and recovery, according to the City's
Emergency Preparedness Plans. Emergency management preparedness meetings have been conducted
each spring since 1995 for just such a disaster. In addition to all City departments, Friendswood
Volunteer Fire Department, Clear Creek Drainage District, Friendswood Independent School District,
Harris County Flood Control District, American Red Cross, Southwestern Bell, utility companies and
Waste Management personnel participated in the meetings. Additional debris removal and landfill
contracts were executed and personnel with those companies participated in meetings during the spring of
2001. This level of preparedness greatly enhanced the City's ability to respond and recover to the disaster
quickly, without loss of life, and begin the process of recovery.
During the storm 69 civilian volunteers worked 875.75 hours. 66 members of the Friendswood
Volunteer Fire Crew and EMS contributed 1,532 hours of service. Approximately 300 rescues were
made with high water rescue vehicles and boats. An emergency shelter was opened at Westwood
Elementary. Mutual aid was given by surrounding agencies as well as the National Guard. City
personnel worked 2,019 overtime hours at an expense of$47,182.
During the recovery phase, the American Red Cross set up a service center at the Friendswood Activity
building on June 7 and continued in operation until June 29. The Westwood Elementary shelter opened
on June 9 and closed on June 10. A total of 168 individuals stayed at the shelter. Over 100 homes
received assistance with over 1,000 volunteers supplying work relief to those in need. Four donation sites
were set up at the First Baptist Church of Friendswood, Friendswood Friends Church,Friendswood Hope
Lutheran Church, and Friendswood Church of Christ. These sites opened on June 11 and remained open
until June 14 processing food, clothing and cleaning supplies for distribution to the flood victims. The
Federal Emergency Management Agency (FEMA) set up a Disaster Relief Center at the Friendswood
Junior High School on June 16 and remained in operation through July 21. Over 500 people attended
three informational meetings on permitting processes, rules for repair, FEMA buyout possibilities, and
FEMA's role and responsibilities.
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More than 11,000 cubic yards of debris were accumulated. That does not count the household hazardous
materials and white goods that were collected separately. City personnel, using City dump trucks and
construction equipment, as well as debris contractors began picking up storm debris on June 12 and
continued through July 14. In addition, Galveston County Road and Bridge crews as well as the Clear
Creek Drainage District crews assisted with debris pickup. Direct damage costs to the City amounted to
over $527,000. The city's portion, after insurance and FEMA reimbursements, will be just over
$105,000. The city's volunteer efforts were tremendous. By accounting for those volunteer hours the
city received $27,000 in credit to its matching requirements for FEMA reimbursement.
Application was made to FEMA for a Hazard Mitigation Grant to purchase homes with 50% or more
structural damage. 225 applications were received of which 171 were eligible for FEMA Buyout. 33
homeowners declined participation, leaving a total of 138 homeowners with an appraised value of
$7,405,000. Under the guidelines of the grant, FEMA will fund 75% of the market value of the home
with the local match being 25%. Once purchased, the homes become the property of the City, must be
demolished and the land returned to unimproved open space. In addition to the City, the following
areparticipating in the local match: GalvestonCounty, Harris CountyFlood
entities part p g 25% oca atc ou ty, $350,000;
Control District, $1,111,088; Clear Creek Drainage District, $100,000; and, State of Texas with a •
$350,000 Community Development Block Grant. The response and recovery phases of the city's
activities were completed in the first quarter of fiscal year 2001-02. The FEMA Hazard Mitigation Grant
Buyout program continues and is projected for completion by September 30,2002.
FOR THE FUTURE
Streets and Drainage
Funding for the multi-year Asphalt Overlay and Reclaim Street Program, begun in fiscal year 2001, was
__- continued in 2001-02 with $570,000 appropriated for Phase II. The ongoing Sidewalk Improvement
Program was budgeted with $30,000 for Safe School Routes and FM Roads. In addition, the remaining
one-half preliminary engineering and environmental assessment costs was budgeted for the Harris County
street projects,Brittany Bay Boulevard,$89,932, and Friendswood Link Road, $24,100.
Three drainage projects were budgeted for 2001-02 for a total of$82,360. Preliminary studies will be
conducted to identify the causes of localized flooding and recommend improvements to help alleviate
these problems. $40,000 was allocated for Sun Meadow subdivision. $42,360 was allocated for the
Clover Acres,Annalea and Kingspark/Whitehall subdivisions.
Parks
Phase I development of the City's new Centennial Park, begun in fiscal year 2001, is expected to be
completed during 2001-02, as well as two new Phase I projects budgeted in 2001-02: installation of
lighting at soccer fields #4 and #5, $110,000; and, fencing for Phase 1 area, $55,000. The lighting
improvements will be funded with a $30,000 donation from the Friendswood Soccer Association and
$80,000 from a new Park Dedication Ordinance, Community Parks Fee, implemented in April,2000.
Centennial Park Phase II development is budgeted in 2001-02 for a total of$1,000,000. $500,000 will be
set aside for 50% grant match funding. The City will apply for a Texas Parks and Wildlife grant to fund
the remaining 50%. Phase II development includes a restroom and picnic pavilion, $245,000; a basketball
pavilion, $205,000; an amphitheatre structure, $155,000; an eight foot concrete hike and bike trail,
$106,000; playground, $65,000; pedestrian trail, $19,233; park benches, picnic tables, trees, turf,
irrigation and signs, $30,910; and, electrical and sewer connections, $29,320. Construction plans and
specifications, grant application, site planning and contingency total $144,537.
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Facility Improvements
Facility improvements for 2001-02 include a feasibility study for a new fire station (#4), $18,000; new air
conditioner for the telephone equipment room at Public Safety building, $7,500; fire training field
engineering study, $6,000; and, fund $15,000 in alternate bids on the Public Works building addition
begun in fiscal year 2001.
Water and Sewer
$50,000 is budgeted in 2001-02 for two waterlines, under the Neighborhood Waterline Program, to
extend the 8 inch Wilderness Trails waterline approximately 600 feet to connect to an existing 8 inch
waterline, $25,000; and, replace an existing 2 inch waterline on Rustic Lane with a 6 inch waterline,
$25,000. $46,000 is budgeted for two sewer line projects: $21,000 to reroute a 4 inch force main from
Wedgewood subdivision directly to the lift station on Deepwood to prevent the flow going through three
lift stations; $25,000 to construct a new 12 inch sewer line from the Friendswood Sports Complex grinder
pump system to the main sewer trunk line on FM 528 at the intersection of Moore Rd. This will allow the
aging grinder pump system to be shut down thereby eliminating operation and maintenance costs.
Funding for the water meter replacement program was increased from $40,000 to $100,000.
Major improvements to the City's water and sewer system, begun in 1999-00, will be ongoing during
2001-02. Reference these improvements in the major initiatives section above.
Vehicle Replacement Fund
In fiscal year 1997-98 an analysis of the City's fleet was undertaken to evaluate the condition of each
vehicle and determine a replacement schedule. The analysis revealed that of the total 92 City vehicles, 19
were used by the Friendswood Volunteer Fire Department (FVFD) with their own replacement schedule.
The FVFD vehicles are also-purchased with funds donated by the citizens thru water bill donations rather
than with General Fund revenues; therefore,these vehicles were excluded from the funding plan. 1
Of the remaining 73 City vehicles, the analysis revealed 50, or 68.5%, had 60,000 miles or more and 19,
or 26%, had 100,000 miles or more. In addition, maintenance costs for the 73 vehicles was projected to j
reach $141,757 by the end of fiscal year 1997-98,up 66% from the $85,000 expended in fiscal year 1990- i
91 and budgeted for 1997-98. Of critical concern was the aging police patrol fleet.
The vehicles were divided into four life cycle classes and a Vehicle Replacement Plan ("the Plan")
developed. Criteria used to determine the replacement schedule was vehicle type, usage type, average
annual mileage and maintenance costs.
Life Description
3 Police Patrol Vehicles
8 Police Non-Patrol
10 Cars,Light Trucks, SUVs
15 Heavy Duty Trucks
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In order to bring the police patrol fleet up to the scheduled life cycle, the Plan recommended the City
enter into a five year lease program whereby four police patrol vehicles would be replaced each year for
three years. Each four-vehicle lease would be for a three year period, or the life cycle of a patrol vehicle.
This would accomplish three goals: 1)replace twelve patrol vehicles over a five year period at the cost of
purchasing 9.5 vehicles; 2) enable the City to use a limited capital vehicle budget during the first three
-- fiscal years of the Plan, 1998-99 thru fiscal year 2001, $123,800, $123,400 and $177,650 respectively, to
"catch up" on replacing much needed other City vehicles; and, 3) allow the City a three year period in
which to implement a Vehicle Replacement Fund(VRF).
During fiscal year 2001-02 budget preparation,the Plan was further refined to exclude City vehicles with
a replacement cost of more than $50,000. The new VRF will be created and ownership of all City
vehicles, except those excluded above, will be transferred to the new fund. The VRF will receive lease
revenue from each department for each vehicle in an amount equal to the Plan schedule based on the life
cycle of the vehicle. During the first year, start-up funds will be borrowed from General Fund to make up
any lease revenue shortfall in the VRF. The VRF is projected to repay the General Fund during the 2002-
03 and 2003-04 fiscal years and maintain a fund balance sufficient to purchase replacements for the next
ten years.
DEPARTMENT FOCUS
Each year the City will select a department to highlight for its efforts and accomplishments. For fiscal
year 2001,the Public Works Department has been chosen for review.
The Public Works Facility is located at 1306 Deepwood. This department is responsible for the operation
and maintenance of the city's streets, signage, drainage, water and wastewater systems. The goal of the •
Public Works Department is to provide the best possible service to the citizens of Friendswood in an
_efficient,..professional and safe manner. _
The Public Works administration is comprised of the department director and a senior administrative
secretary. This division is responsible for the overall coordination and supervision of the entire Public
Works Department. It also coordinates and administers any special capital projects prepared by
consulting engineers,as well as planning for future needs.
The Water and Sewer administrative staff, consisting of a utilities superintendent and administrative
secretary, works directly with the department director. They are responsible for the.operation and
maintenance of all water and wastewater facilities. This group makes sure the city complies with all
federal and state rules and regulations regarding water and wastewater operations.
Our Street Operations division, staffed by 11 employees, is responsible for the daily maintenance and
repair of all city-owned streets and sidewalks, drainage infrastructure, mowing of ditches and city
easements and all street and traffic signage. Over 114 miles of streets are maintained in the city. Drainage
crews clean and excavate ditches to help alleviate flooding and standing water. Worn, damaged and
vandalized signage is repaired or replaced by the city's sign technician.
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The 15 employees who staff the water and sewer operations division are responsible for the operation and
maintenance of all water and wastewater facilities. Their responsibilities include:
• Operation and maintenance of water production facilities, including six water wells and
one surface water booster station - These facilities are inspected daily, 365 days each year.
The water plant operators must deliver water that is free of pathogenic organisms. Samples
are collected daily from our system and sent to the Galveston County Health Department in
• La Marque for testing. As well as ensuring water quality, this division also maintains proper
records covering water pumpage, chemical usage and pump and motor maintenance.
• Operation and maintenance of wastewater collection facilities, including 30 sewer lift
stations.
• Meter reading, new connections and disconnection of water services, meter
replacements and inspection of all new water accounts - There are 10,088 water
connections within the city and this number continues to grow. Meter reading is
accomplished via a contract with ECO Resources; however, our employees are responsible
for re-reads, customer service of all kinds and meter change-outs. Billing for commercial
accounts is done by this company as well. Residential billing is the responsibility of the
utility billing section of Administrative Services.
FINANCIAL INFORMATION
Management of the City is responsible for establishing and maintaining an internal control structure
designed to ensure that the assets of the City are protected from loss, theft or misuse and to ensure that
adequate accounting data are compiled to allow for the preparation of financial statements in conformity
with generally accepted accounting principles. The internal control structure is designed to provide
reasonable,but not absolute, assurance that these objectives are met. The concept of reasonable assurance
recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the
valuation of costs and benefits requires estimates and judgments by management.
In addition, the City maintains budgetary controls. The objective of these budgetary controls is to ensure
compliance with legal provisions embodied in the annual appropriated budget approved by City Council.
The City legally adopts annual budgets for the General, Special Revenue, and Debt Service Funds.
Annual and project budgets are also adopted for the Proprietary and Capital Projects Funds,respectively.
The level of budgetary control (that is, the level at which expenditures cannot legally exceed the �1
g rY P g Y
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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__ Revenues for general government functions(General, Special Revenue and Debt Service Funds)totaled
approximately $15.7 million in 2001, an increase of approximately $1.5 million over fiscal year 2000
revenues. The amount of revenue from various sources and the increase (decrease)over the preceding
year are shown in the following table:
General Government Functions
Increase
Percent of (Decrease) Percent
Revenue Source Amounts Total from 2000 Change
Property taxes $ 8,006,906 51.0% $ 780,701 10.8%
Sales taxes 2,419,071 15.4% 297,964 14.0%
Franchise tax 988,608 6.3% 117,770 13.5%
Sanitation 1,065,400 6.8% 38,372 3.7% '
I Fines and forfeitures 550,854 3.5% 53,385 10.7%
Permits and fees 1,192,899 7.6% 222,031 22.9%
Intergovernmental 580,561 3.7% (27,402) -4.5%
Earnings on investments 424,412 2.7% 24,700 6.2%
Other 483,063 3.1% 1,010 ' 0.2%
_ $ 15,711,774 100.0% $ 1,508,531 10.6%
- Assessed valuations of approximately $1.23 8 billion represented an increase of 9 percent over the
preceding year. The net taxable assessed valuations are set at 100% of market value as determined by the
Galveston County and Harris County Appraisal Districts, less exemptions or abatements. _The adjusted
__ tax levy for the 2001 fiscal year of approximately $7.9 million, increased by approximately $667,000 or
i 9.2 percent of the tax levy. The ratio of total collections (current and delinquent) to the current tax levy
was 101 percent.
-
The City had approximately $308,000 in delinquent taxes outstanding as of September 30, 2001, which
represents 2.99 percent of the current tax levy.
Allocations of property tax levy for the 2001 fiscal year and the preceding two fiscal years are as follows
(tax rate per$100 of assessed value):
Purpose 2000-2001 1999-2000 1998-99
General Fund $ 0.5547 $ 0.5542 $ 0.5610
General Obligation Debt 0.0838 0.0843 0.0515
- Total Tax Rate $ 0.6385 $ 0.6385 $ 0.6125
The City's sales taxes increased by approximately $298,000 over fiscal year 2000. This increase is
attributable to the growth in both population and commercial establishments within the City.
__ 11
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New home and commercial construction remained approximately the same as in prior year with a slight Li
decline in building permits and fees. Permits and fees increased by approximately $222,000. The total
amount of new construction for the current fiscal year was approximately $117 million, down from
$121.2 million for fiscal year 2000, a decrease of 4 percent.
Expenditures for general government functions (General, Special Revenue and Debt Service Funds)
totaled approximately $14.1 million a decrease of approximately $64,000 or 4.3% from fiscal year 2000.
Increases or (decreases) over the preceding year in the levels of expenditures for major functions of the -�
City are shown in the following table:
Increase
Percent of (Decrease) Percent
Function Amounts Total from 2000 Change
General government $ 2,196,226 15.6% $ (109,690) -4.8%
Public safety 5,115,933 36.2% 850,183 19.9%
Public works 1,201,584 8.5% (1,439,404) -54.5%
Sanitation 998,603 7.1% (29,862) -2.9%
Community development 641,047 4.5% 105,963 19.8%
Community services 2,738,557 19.4% 383,371 16.3%
Capital outlay 98,987 0.7% (553,219) -84.8% -
Debt service 1,127,645 8.0% 150,986 15.5%
$ 14,118,582 100.0% $ (641,672) -4.3%
(_r
General government expenditures decreased $109,000 during fiscal year 2001. Capital outlay in
Computer Services decreased $53,000. Legal costs decreased $107,000 due to resolution of outstanding .
charges in fiscal year 2000.
The Public Safety increase in expenditures was due to costs attributed to Tropical Storm Allison in the
amount of$354,000. Police services increased by $336,000 due to the addition of two school resource
officers, vehicle replacement and radio equipment replacement. The Fire and EMS expenditures '_�
increased due to a pay rate increase for the pool of certified fire fighters, increased fuel and medical
supply costs and capital outlay.
•
Public Works expenditures reflect a decrease of$1.4 million from the prior fiscal year. This variance
comes from out Street Improvement Program. The expenditures for the prior year included unexpended 1
street capital funds from the prior year. 1
Expenditures in Community Development grew by $105,963. The increase is due to additional personnel
in the inspection division to management increased residential construction.
Community Services increased by $383,371. The increase is due to capital outlay in the parks division.
Capital outlay decreased by $553,219. This decrease is due to the purchase of a fire truck during 2000.
•
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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:
Beginning Net Increase Ending Fund
Fund Fund Balance (Decrease) Balance
General $ 4,443,857 $ 1,996,542 $ 6,440,399
Special Revenue 77,039 251,637 328,676
Debt Service 68,627 8,548 77,175
Enterprise Fund Operations
The water and sewer utility operation continued to show gains in number of customers. Comparative data
for the past two fiscal years are presented in the following table:
2001 2000
Operating and investment revenues $ 6,599,787 $ 7,212,907
Operating expenses before depreciation 3,253,593 3,310,375
Net Revenue Available for Debt Service $ 3,346,194 $ 3,902,532
Revenue Bond Debt Service: $ 871,621 $ 441,600
Coverage(income available for revenue
bond debt service divided by annual
revenue bond debt service) 3.8 8.8
Number of customers
Water 10,088 9,423
Sewer 9,415 8,979
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 $81,000
as of September 30,2001.
Cash Management
Cash temporarily idle during the year was invested in TexPool,Lone Star, and MBIA investment pools as
well as U.S. government securities. The City earned approximately $993,000 on these investments during
fiscal year 2001.
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.
13
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Debt Administration
The ratio of net general obligation debt paid from governmental fund resources to assessed valuation and
the amount of bonded debt per capita are useful indicators of the City's debt position to municipal
management, citizens and investors. At year end,these indicators were as follow:
Percent of �
Debt to
Assessed Debt Per
Description Amount Value Capita
Net direct bonded debt $ 2,128,550 , 0.2% $ 65 _
Overlapping debt 51,468,819 4.2% 1,573
Total Direct and
Overlapping Debt $ 53,597,369 4.3% $ 1,638
The City's latest bond issues were rated Aaa by Moody's Investors Service and AAA by Standard and
Poor's. During the year,the City issued Waterworks and Sewer System Revenue Bonds in the amount of
$6.1 million. The City's debt retirements amounted to $384,000 of general long-term debt t and $928,000
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, 2000. This was the fourteenth 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.
14 •
Acknowledgments
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.
In closing,I also express my thanks to the Mayor, members of the City Council and the City Manager for
their leadership, interest and support in conducting the financial operations of the City in a responsible
and progressive manner.
Sincerely,
Roger C.Roecker
��
Director of Administrative Services
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CITY OF FRIENDSWOOD,TEXAS
ORGANIZATION CHART Li
•
MAYOR
AND �-
COUNCIL
I I I I I I
i t 1
Appointed Friendswood City City City Municipal City
Boards and Volunteer Secretary Manager Attorney Judge Prosecutor
AD HOC Fire
Committees Department
Administrative Community, Police Fire Marshal Public Community .
Services Development Emergency, Works Services
• Management
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Certificaten.
of
. .„
Achievement
"
;
"
. • • Excellence
Financialin - • -
Reporting' : •:,
Presented to
City of Friendswood
Texas
For its Comprehensive Annual
Financial Report
, ..
• •
for the Fiscal Year Ended
September 30 .2000::
•46ertificate-d Achievement Tor Excellence in Financial
Reriortingispr4ented-by the Government Finance Officerss
Association of the United States and Canada to •
governmentOnits and public employee retirement
systems whose cOmprenensive,ffinual.finariaial
- reports (CAFRs)achieve the highest
standards in government accounting
'and financial reporting.
-
- osAts.oN4
- CANADA 1.3
mom* z iklent
sr .. .ttk
flittA0
- •
Executive•Director
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CITY OF FRIENDSWOOD, TEXAS _
PRINCIPAL OFFICIALS
September 30,2001
Elected Officials Position Term
Expires
Harold L. Whitaker Mayor May 2003
Kitten Brizedine Council Member—Position No. 1 May 2003
Jerry Erickson Council Member—Position No. 2 May 2002
Tracy Goza Council Member—Position No. 3 May 2003
Kim Wayne Brizendine Council Member—Position No. 4 May 2004
Larry Taylor Council Member—Position No. 5 May 2002
Mel P. Measeles Council Member—Position No. 6 May 2004
Appointed Officials Position
Ronald E. Cox City Manager
Deloris McKenzie City Secretary
Jon Branson Director of Community Services
Rebecca Carbone Tax Assessor-Collector
Mickiel G. Hodge Community Development Director
Kaz Hamidian Acting Director of Public Works
Olson& Olson City Attorney
Terry Byrd Fire Marshal/ Emergency Management
Coordinator
Roger C.Roecker Director of Administrative Services
Luther Loeser Acting Police Chief
James W. Woltz Judge—Municipal Court
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FINANCIAL SECTION
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11 Greenway Plaza,Suite 1515 - NulIAI..Uurs0n One Sugar Creek Blvd.,Suite 1150
Houston,TX 77046 Sugar Land,TX 77478
(713)621-1515 CERTIFIED PUBLIC ACCOUNTANTS (281)242-8600
Fax:(713)621-1570 PROFESSIONAL CORPORATION Fax:(281)242-7333
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, 2001. 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 auditing standards generally accepted in the United States of
America. 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, 2001, 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 accounting principles generally accepted in the United States of America.
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 financial 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.
6v6(4 ,?4tA:5011 RC
Houston, Texas
March 1,2002
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GENERAL PURPOSE FINANCIAL STATEMENTS
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CITY OF FRIENDSWOOD, TEXAS •
COMBINED BALANCE SHEET-
ALL FUND TYPES AND ACCOUNT GROUPS
September 30,2001
Proprietary
Governmental Fund Types Fund Type
Special Debt
Genera l Revenue Service Enterprise
Assets and Other Debits
Assets
Cash and temporary investments $6,552,243 $ 245,358 $ 79,994 $ 4,048,399
Receivables, less allowance for
uncollectibles
Taxes 259,671 48,806
Customer accounts 77,746 959,330
Other 477,378 24,089 5,007
Due from other governments s 688,974 k
Inventory 13,480 5,575
Prepaid and other assets 3,304 585
Restricted cash and investments 8,838,843 '
Fixed Assets:
General Fixed Assets
Enterprise system property,plant
and equipment at cost, less
accumulated depreciation 25,633,214
Non-expendable trust assets
Water Rights 3,464,619
Other Debits 1 1
Amount available for debt service
Amount to be provided for retirement
of general long-term debt
Total Assets and Other Debits $8,072,796 $ 269,447 $ 128,800 $ 42,955,572
See Notes to Financial Statements.
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Exhibit A-1
Page 1 of 2
Fiduciary
Fund Type Account Groups Totals
Trust and General General Long- (Memorandum Only)
Agency Fixed Assets Term Debt 2001 2000
$ 23,892 $ $ $ 10,949,886 $ 7,432,252
308,477 269,184
1,037,076 1,111,231 •
506,474 492,500
688,974 449,502
19,055 9,841
3,889 26,768
8,838,843 7,415,325
35,013,219 35,013,219 33,922,077
25,633,214 23,791,943
57,200 57,200 57,200
3,464,619 850,000
77,175 77,175 68,627
2,931,740 2,931,740 3,276,573
$ 81,092 $ 35,013,219 $3,008,915 $ 89,529,841 $ 79,173,023
25
CITY OF FRIENDSWOOD, TEXAS _
COMBINED BALANCE SHEET-
ALL FUND TYPES AND ACCOUNT GROUPS
September 30,2001
Proprietary
Governmental Fund Types Fund Type
Special Debt
General Revenue Service Enterprise
Liabilities,Equity,and Other Credits
Liabilities
Accounts payable $ 330,389 $ 1,200 $ 2,819 $ 600,958
Accrued liabilities 165,386 179,217
Accrued compensated absences 863,035 86,063
Customer deposits 232,167
Deferred revenue 273,587 48,806
Bonds payable 15,321,714
Certificates of obligation payable 5,080,000
Obligations under capital leases
Accretion on premium compound interest
bonds 73,440
Total Liabilities 1,632,397 1,200 51,625 21,573,559
Equity and Other Credits
Investment in general fixed assets
Contributed capital 13,066,394
Retained earnings 8,315,619
Fund Balances
Reserved for encumbrances 434,509
Reserved for inventory and prepaids 16,784
Reserved for debt services 77,175
Reserved for endowment
Unreserved
Designated for construction 876,656
Designated for projects 137,018 268,247
Undesignated 4,975,432
Total Equity and Other Credits 6,440,399 268,247 77,175 21,382,013
Total Liabilities,Equity,and
Other Credits $8,072,796 $ 269,447 $ 128,800 $ 42,955,572 •—'
See Notes to Financial Statements.
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Exhibit A-I
Page 2 of 2
it
Fiduciary
Fund Type Account Groups Totals
Trust and General General Long- (Memorandum Only)
Agency Fixed Assets Term Debt 2001 2000
$ $ $ $ 935,366 $ 573,323
344,603 307,630
949,098 956,647
232,167 262,143
322,393 381,215
445,725 15,767,439 10,592,752
1,760,000 6,840,000 7,085,000
713,430 713,430 775,443
89,760 163,200 253,705
3,008,915 26,267,696 21,187,858
35,013,219 35,013,219 33,922,077
13,066,394 12,435,358
8,315,619 6,958,458
434,509 820,966
16,784 28,942
77,175 68,627
67,200 67,200 67,200
876,656 169,267
405,265 157,589
13,892 4,989,324 3,356,681
81,092 35,013,219 63,262,145 57,985,165
$ 81,092 $ 35,013,219 $3,008,915 $ 89,529,841 $ 79,173,023
27
CITY OF FRIENDSWOOD, TEXAS
COMBINED STATEMENT OF REVENUES,EXPENDITURES,AND
CHANGES IN FUND BALANCES-ALL GOVERNMENTAL FUND TYPES
Year Ended September 30,2001
Governmental Fund Types
Special Debt
General Revenue Service
Revenues
Property taxes $ 6,949,269 $ $1,057,637
Sales taxes 2,419,071
Franchise fees 988,608
Sanitation 1,065,400
Fines and forfeitures 550,854
Permits and fees 1,192,899
Intergovernmental 576,291 4,270
Interest on investments
397,539 8,746 18,127
Other 120,839 362,224
Total Revenues 14,260,770 375,240 1,075,764
Expenditures
Current:
General government 2,196,226
Public safety 5,091,317 24,616
Public works 1,201,584
Sanitation 998,603
Community development 641,047
Community services 2,738,557
Capital outlay 98,987
Debt Service:
Principal retirement 23,144 593,326
Interest and fiscal charges 37,285 473,890
Total Expenditures 12,867,334 123,603 1,067,216
Revenues Over(Under)Expenditures 1,393,436 251,637 8,548
Other Financing Sources(Uses)
Operating transfers in 555,713
Operating transfers(out)
Proceeds from issuance of debt 47,393
Total Other Financing
Sources(Uses) 603,106
Revenues and Other Financing Sources Over(Under)
Expenditures and Other Financing(Uses) 1,996,542 251,637 8,548
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Fund balances-Beginning, as restated 4,443,857 77,039 68,627
Fund Balances-Ending $ 6,440,399 $ 328,676 $ 77,175
See Notes to Financial Statements.
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Exhibit A-2
Totals
(Memorandum Only)
2001 2000 -
__I $ 8,006,906 $ 7,226,205
2,419,071 2,121,107
988,608 870,838
1,065,400 1,027,028
550,854 497,469
1,192,899 970,868
580,561 607,963
424,412 399,712
483,063 482,053
15,711,774 14,203,243
2,196,226 2,305,916
5,115,933 4,265,750
1,201,584 2,640,988
998,603 1,028,465
641,047 535,084
2,738,557 2,355,186
98,987 652,206
616,470 525,897
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511,175 450,762
14,118,582 14,760,254
1,593,192 (557,011)
555,713 546,113
47,393 574,856
603,106 1,120,969
2,196,298 563,958
4,589,523 4,025,565
$ 6,785,821 $ 4,589,523
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CITY OF FRIENDSWOOD,TEXAS
COMBINED STATEMENT OF REVENUES,EXPENDITURES,AND
CHANGES IN FUND BALANCES-BUDGET AND ACTUAL (BUDGETARY BASIS)
GENERAL, CERTAIN SPECIAL REVENUE,AND DEBT SERVICE FUNDS
Year Ended September 30,2001
General Fund
Actual Variance
(Budgetary Favorable
Budget Basis) (Unfavorable)
Revenues
Property taxes $ 6,860,062 $ 6,949,269 $ 89,207 y'
• Sales taxes 2,009,200 2,419,071 409,871
Franchise fees 858,306 988,608 130,302
Sanitation 66,000 69,154 3,154
Fines and forfeitures 351,500 550,854 199,354
Permits and fees 814,244 1,192,899 378,655
Intergovernmental 256,464 576,291 319,827
Interest on investments 188,500 397,539 209,039
Other 62,470 120,839 58,369
Total Revenues 11,466,746 13,264,524 1,797,778
Expenditures
Current:
General government 2,660,764 2,196,226 464,538
Public safety 4,865,817 5,091,317 (225,500)
Public works 2,052,301 1,201,584 850,717
Sanitation 2,550 2,357 193
Community development 695,774 641,047 54,727 ; G
Community services 2,817,784 2,738,557 79,227
Capital Outlay -
Debt Service:
Principal retirement
Interest and fiscal charges
Total Expenditures 13,094,990 11,871,088 1,223,902 1_i
Revenues Over(Under)Expenditures (1,628,244) 1,393,436 3,021,680
Other Financing Sources(Uses)
Operating transfers in 555,713 555,713
Proceeds from issuance of long-term debt 47,393 47,393
Total Other Financing Sources (Uses) 555,713 603,106 47,393 Li
Revenues and Other Financing Sources Over
(Under)Expenditures and Other j
Financing(Uses) (1,072,531) 1,996,542 3,069,073
Fund balances-Beginning, as restated 4,443,857 4,443,857
Fund Balances-Ending, $ 3,371,326 $ 6,440,399 $3,069,073
See Notes to Financial Statements.
30
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Exhibit A-3
Special Revenue Fund Debt Service Fund
Actual Variance Variance
(Budgetary Favorable Favorable
Budget Basis) (Unfavorable) Budget Actual (Unfavorable)
$ $ $ $1,043,695 $1,057,637 $ 13,942
8,544 4,270 (4,274)
5,831 5,831 18,127 18,127
180,000 261,317 81,317
188,544 271,418 82,874 1,043,695 1,075,764 32,069
20,214 24,616 (4,402)
106,000 98,987 7,013
23,017 23,144 (127) 568,926 593,326 (24,400)
37,413 37,285 128 475,392 473,890 1,502
186,644 184,032 2,612 _ 1,044,318 1,067,216 (22,898)
1,900 87,386 85,486 (623) 8,548 9,171
1,900 87,386 85,486 (623) 8,548 9,171
65,583 65,583 68,627 68,627
$ 67,483 $ 152,969 $ 85,486 $ 68,004 $ 77,175 $ 9,171
31
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CITY OF FRIENDSWOOD,TEXAS
COMBINED STATEMENT OF REVENUES,EXPENSES,AND t--<
CHANGES IN RETAINED EARNINGS/FUND BALANCE-
PROPRIETARY FUND TYPE AND NON-EXPENDABLE TRUST FUND
Year Ended September 30,2001 1
Proprietary Fiduciary
Fund Type Fund Type
Non-Expendable
Enterprise Trust
Operating Revenues
Water and sewer charges $ 6,031,245 $
r-�
Operating Expenses
Personnel services 839,130
Supplies 184,623
Repairs and maintenance 283,369
Other services and charges 1,946,471
Depreciation 937,304
Total Operating Expenses 4,190,897
Operating Income (Loss) 1,840,348
Non Operating Income(Expenses)
Interest Income 567,199 1,343
Interest Expense (494,673)
72,526 '1,343
Income Before Operating Transfers 1,912,874 1,343
Operating Transfers (Out)
Operating transfers(out) (555,713)
(555,713)
Net Income(Loss) 1,357,161 1,343
Retained Earnings/Fund Balance-Beginning of Year 6,958,458 79,749
Retained Earnings/Fund Balance-End of Year $ 8,315,619 $ 81,092
See Notes to Financial Statements.
32
Exhibit A-4
Totals
(Memorandum Only)
7-12001 2000
l_f $ 6,031,245 $ 6,845,695
L)
839,130 928,522
184,623 221,632
283,369 459,870
1,946,471 1,700,351
937,304 950,796
4,190,897 4,261,171
f 1,840,348 2,584,524
E 568,542 367,212
(494,673) (707,358)
73,869 (340,146)
1,914,217 2,244,378
(555,713) (546,113)
(555,713) (546,113)
1,358,504 1,698,265
7,038,207 5,339,942
$ 8,396,711 $ 7,038,207
33
I
1�
CITY OF FRIENDSWOOD, TEXAS
COMBINED STATEMENT OF CASH FLOWS- IJ
PROPRIETARY FUND TYPE AND NON-EXPENDABLE TRUST FUND
Year Ended September 30,2001
Proprietary Fiduciary
Fund Type Fund Type
Non-Expendable
Enterprise Trust
Cash Flows from Operating Activities
Operating Income $ 1,840,348 $
Adjustments to Reconcile Operating Income(Loss) to
Net Cash Provided (Used) by Operations
Depreciation and amortization 905,174
Decrease in accounts receivable 103,821
(Increase)Decrease in due from other funds
(Increase)Decrease in prepaid and other assets 1,507
Increase in accounts payable and accrued liabilities 250,372
(Decrease) in compensated absences (15,808)
(Decrease) in customer deposits (29,976)
Net Cash Provided (Used) by Operating Activities 3,055,438
Cash Flows from Noncapital Financing Activities
Operating transfers(out) (555,713)
Net Cash (Used) by Noncapital Financing Activities (555,713)
Cash Flows from Capital and Related Financing
Activities
Proceeds from issuance of long-term debt 6,1 17,175
Purchase of water rights (2,614,619)
Capital expenditures for property, plant, and equipment (2,828,925)
Principal payments on long-term debt (727,945)
Interest payments on long-term debt (441,939)
Net Cash Provided (Used) by Capital and Related Financing
Activities 134,783
Cash Flows from Investing Activities
Interest on investments 542,362 1,343
Net Cash Provided (Used) by Investing Activities 542,362 1,343
Net Increase(Decrease) in Cash and Cash Equivalents 3,176,870 1,343
Cash and cash equivalents,beginning of year 9,878,831 22,549
Cash and Cash Equivalents,End of Year $12,887,242 $ 23,892
Unrestricted cash and cash equivalents $ 4,048,399 $ 23,892
Restricted cash and cash equivalents 8,838,843
Cash and Cash Equivalents,End of Year $12,887,242 $ 23,892
See Notes to Financial Statements.
34
1
Exhibit A-S
Totals
(Memorandum Only)
2001 2000
$ 1,840,348 $ 2,585,715
905,174 950,796
103,821 76,164
1,507 (5,793)
250,372 (15,069)
(15,808) (5,649)
(29,976) (6,333)
3,055,438 3,579,831
(555,713) (546,113)
(555,713) (546,113)
6,117,175 8,489,200
(2,614,619) (850,000)
(2,828,925) (601,034)
(727,945) (662,375)
(441,939) (1,166,654)
134,783 5,209,137
543,705 366,021
543,705 366,021
3,178,213 8,608,876
9,901,380 1,292,504
$12,911,134 $ 9,901,380
$ 4,072,291 $ 828,205
8,838,843 464,299
ti $12,911,134 $ 1,292,504
35
L
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
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
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 is financially accountable; and considerations pertaining to other organizations for which the
nature and significance of their relationship with the primary government are such that exclusion would
cause the reporting entity's financial statements to be misleading or incomplete.
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.
36
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
B. Fund Accounting
The accounts of the City are organized on the basis of funds or account groups, each of which is
considered to be a separate accounting entity. The operations of each fund are accounted for by providing
a set of self-balancing accounts which consist of each fund's assets, liabilities, fund equity, revenues, and
expenditures or expenses, as appropriate. The following paragraphs describe the various fund types and
account groups.
Governmental Fund Types
General Fund(Budgeted)
The General Fund accounts for the resources used to finance all the operations of the City not properly
---` included in other funds. The principal sources of revenue of the General Fund include property taxes,
sales and use taxes, franchise taxes, fines and forfeitures, permits and fees, and charges for sanitation
services. Expenditures include general government, public safety, public works, community
development, and community services.
Special Revenue Funds(Budgeted)
The Special Revenue Funds are used to account for the proceeds of specific revenue sources that are
legally restricted or designated for specified activities.
•
Debt Service Fund(Budgeted)
The Debt Service Fund is used to account for the accumulation of resources for the retirement of
general long-term debt and related costs. The primary source of revenue of the Debt Service Fund is
property taxes.
Proprietary Fund Type(Unbudgeted)
Enterprise Fund
The Enterprise Fund is used to account for the operations that provide water and wastewater utility
services to the public. These services are financed and operated in a manner similar to private
business enterprises where the intent of the Council is that costs (expenses, including depreciation) of
providing goods or services to the general public on a continuing basis will be financed or recovered
primarily through user charges. Proprietary fund types follow generally accepted accounting
principles prescribed by the Governmental Accounting Standards Board (the GASB), and all Financial
Accounting Standards Board's standards issued before November 30, 1989. After this date, the City
accounts for its proprietary funds as presented by the GASB.
Fiduciary Fund Type(Unbudgeted)
Trust Fund
The Non-Expendable Trust Fund (1776 Park) is used to account for assets held bythe Cit
y 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.
37
it
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
B. Fund Accounting(continued)
Account Groups
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-Tern Debt
This account group is used to account for the City's liability for general obligation bonds, certificates
of obligation, notes payable, and capital leases which are payable from governmental fund resources. _
The debt is offset by the amount available in the Debt Service Fund and the amount to be provided in
future years.
C. Basis of Accounting
The basis of accounting is the method by which revenues and expenditures or expenses are recognized 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
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.
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 are
generally not measurable until actually received. Revenues susceptible to accrual are property taxes,
franchise taxes, sales taxes, licenses, interest revenues, and charges for services. Property taxes collected
after the fiscal year end which should be available to finance current operations are immaterial and remain
deferred. 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.
38
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
D. Budgets
1l Procedures in establishing budgetary data reflected in the financial statements are as follows:
1. On or before the first day of August of each year, the City Manager shall submit to the Council a
proposed budget and an accompanying message. The Council shall review the proposed budget and
- revise as deemed appropriate prior to general circulation for public hearing. The Council shall adopt
the budget by ordinance on one reading on or before the 15th day of September or as soon thereafter
as practical. Adoption of the budget shall require an affirmative vote of at least a majority of all
members of the Council. Adoption of the budget shall constitute appropriations of the amounts
specified therein as expenditures from the funds indicated. If, during the fiscal year, the City
Manager certifies that there are funds available for appropriation, revenues in excess of those
estimated in the budget, the Council may make supplemental appropriation for the year up to the
amount of such excess.
2. At any time during the fiscal year, the City Manager may transfer part or all of any unencumbered
appropriation balance among programs within a department, division, or office, and, upon written
request by the City Manager, the Council may by ordinance transfer part or all of any unencumbered
appropriation balance from one department, office, or agency to another.
3. Limitations: No appropriation for debt service may be reduced or transferred and no appropriation
may be reduced below any amount required by law to be appropriated or by more than the amount of
the unencumbered balance thereof.
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, the Fire/EMS Donations 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 thegovernmental funds. Encumbrances outstandingat
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.
39
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS L )l_
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
uses. The amounts reported in the accompanying financial statements represent the original budgeted
amounts plus all supplemental appropriations.
During the 2001 fiscal year, expenditures exceeded appropriations at the departmental level (the legal
level of compliance) in the General Fund — Public Safety by approximately $225,500. Unbudgeted
expenditures of$354,289 for tropical storm Allison caused the unfavorable variance in the General Fund-
Public Safety. Expenditures in the Debt Service Fund exceeded appropriations by approximately $23,000
or 2%.
Budget Basis to GAAP Basis Reconciliation
The City uses a different basis of accounting for budgeting general fund activities relating to sanitation
operations. Because the City has outsourced sanitation operations to include billing of sanitation fees as
well as curbside collection activities, the City's does not budget the corresponding revenues or
expenditures.
The City adopts an annual budget for the Fire/EMS Donations Special Revenue Fund. The remaining
special revenue funds are controlled through program guidelines and regulations. A reconciliation
between general and special revenue fund budgetary basis and GAAP basis operations follows:
Budgetary Unbudgeted
Basis Exhibit Funds / GAAP Basis
A-3 Activities Exhibit A-2 L
General Fund
Revenues $13,264,524 $ 996,246 $ 14,260,770
Expenditures 11,871,088 996,246 12,867,334
Revenue Over(Under)
Expenditures 1,393,436 1,393,436
Other Financing Sources 603,106 603,106
Revenues and Other Financing
Sources Over Expenditures 1,996,542 1,996,542
Beginning Fund Balance 4,443,857 4,443,857
Ending Fund Balance $ 6,440,399 $ $ 6,440,399
Special Revenue Funds
Revenues $ 271,418 $ 103,822 $ 375,240
Expenditures 184,032 (60,429) 123,603
Expenditures 87,386 164,251 251,637
Beginning Fund Balance 65,583 11,456 77,039
Ending Fund Balance $ 152,969 $ 175,707 $ 328,676
40 '
Li
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
E. Cash and Temporary Investments
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.
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.
F.Interfund Transactions
Interfund transactions that would be treated as revenues, expenditures, or expenses if they involved
organizations external to the governmental unit are accounted for as revenues, expenditures, or expenses
} in the funds involved. Transactions which constitute reimbursements of a fund for expenditures or
expenses initially made from that fund which are properly attributable to another fund are recorded as
expenditures or expenses in the reimbursing fund and primarily as reductions of the expenditure or
expense in the fund that is reimbursed.
Non-recurring or non-routine transfers of equity between funds are reported as additions to or reductions
of the fund balance of Governmental Funds. Transfers of equity to the Enterprise Fund are treated as
contributed capital, and such transfers from the Enterprise Fund•are reported as reductions of retained
earnings or contributed capital, as is appropriate in the circumstances. All other legally authorized
transfers are treated as operating transfers and are included in the results of operations of both the
Governmental and Proprietary Fund Types.
G. Fund Equity
Contributed capital is recorded in the Enterprise Fund which has received capital grants, contributions
from developers and customers, and/or other funds of the City. Reserved fund balances represent those
portions of fund balance not appropriable for expenditure or legally segregated for a specific future use.
Designated fund balances represent management's tentative plans for future use of financial resources.
H. Compensated Employee Absences
_.y 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, 2001, has been recorded in the
General and Enterprise Funds since the liability is to be liquidated with expendable available resources.
41
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
I. Encumbrances
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the
expenditure of funds are recorded in the accounting system in order to reserve the portion of the
applicable appropriation, is employed in the governmental funds. Appropriations lapse at fiscal year-end. •
Encumbrances that have not been liquidated are reported as reservations of fund balances since they do
not constitute expenditures or liabilities.
J. Inventories
Inventories are recorded in the General and Enterprise Funds and are stated at cost,using the first-in,first-
out method. Inventories consist of expendable supplies held for consumption, and the cost thereof is
recorded as an expense/expenditure at the time the inventory items are issued (Consumption method).
K. Fixed Assets
General Fixed Assets
General fixed assets have been acquired or constructed for general governmental purposes. Such fixed
assets are recorded as expenditures in the Governmental Funds and capitalized at historical cost in the
General Fixed Assets Account Group. Gifts or contributions of general fixed assets are recorded at
estimated fair value upon receipt. Public domain ("infrastructure") general fixed assets consisting of
certain improvements other than buildings, including roads, bridges, curbs and gutters, streets and
sidewalks, drainage systems, and lighting systems are capitalized as general fixed assets. No depreciation
has been provided on general fixed assets.
Enterprise Fund Fixed Assets
The land, buildings, and equipment owned by the Enterprise Fund are recorded at historical cost or at
estimated fair value for contributed assets. Interest costs during construction are capitalized when the
effects of capitalization materially impact the financial statements. Some of the assets on which such
interest was capitalized are still under construction and are classified as construction in progress in the
Enterprise Fund. Depreciation of buildings and equipment is provided using the straight-line method over
the following estimated useful lives: _{
Years
Water and sewer system 40-50
Equipment 5-10
Additions to the water and sewer systems are financed principally from sources other than Enterprise
Fund operating revenues such as long-term debt and contributed capital. The costs of normal maintenance
and repairs are charged to operations as incurred. Improvements that extend the useful lives of the assets
are capitalized.
42
f
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
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),
and two privately-managed public funds investment pools (Lone Star and MBIA). Other investments
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:
Carrying
Amount
Demand and time deposits $ 3,428,649
Temporary Investments:
U.S. Government Securities 1,904,413
Balances in Public Investment Pools
MBIA -Texas CLASS 10,513,600
TexPool 2,069,638
Lone Star Investment Pool 1,872,429
Total cash and temporary investments 19,788,729
Less restricted cash and temporary investments 8,838,843
Unrestricted cash and temporary investments $ 10,949,886
43
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 2—CASH AND TEMPORARY INVESTMENTS (continued)
Credit Risk Categorization for Deposits
Cash deposits held at financial institutions can be categorized according to three levels of risk. These
three levels of risk are:
Category 1- Deposits which are insured or collateralized with securities held by the City or by its
agent in the City's name.
Category 2- Deposits which are collateralized with securities held by the pledging financial
institution's trust department or agent in the City's name.
Category 3- Deposits which are not collateralized or collateralized with securities held by the
pledging financial institution or by its trust department or agent but not in the City's
name.
At September 30, 2001, 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,
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.
At September 30, 2001, all of the City's temporary investments were insured or registered as described
under category 1 above.
TexPool, Lone Star, and MBIA 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.
44
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
•
NOTE 2—CASH AND TEMPORARY INVESTMENTS (continued)
1
The 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
f
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 fair 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 fmancial 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
the Public Funds Investment Act of 1995 (Chapter 2256, Texas Government Code). The Investments of
the City are in compliance with the council's investment policies. The City did not have any derivative
investment products during the current year. All significant legal and contractual provisions for
investments were complied with during the year. Investments at year end are representative of the types
of investments maintained by the City during the year.
•
45
J
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 3 -PROPERTY TAXES
The City's property taxes are levied annually in October on the basis of the Appraisal District's assessed
values as of January 1 of that calendar year. Appraised values are established by the Appraisal District at
market value and assessed at 100% of appraised value 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
calendar year.
Property taxes are prorated between operations and debt service based on rates adopted for the year of the iP
levy. For the current year,the City levied property taxes of$0.6385 per$100 of assessed valuation that were
prorated between operations and debt service in the amounts of $0.5547 and $0.0838, respectively. The
resulting adjusted tax levies were approximately $6.9 and $1.0 million for operations and debt service,
respectively, based on a total adjusted taxable valuation of approximately $1.238 billion for the 2000 tax
year.
Property taxes receivable, at September 30,2001, consists of the following:
Tax Year General Fund Debt Service Total
2000 $ 117,559 $ 17,760 $ 135,319
1999 51,000 7,758 58,758
1998 20,911 1,920 22,831
1997 15,048 1,954 17,002
1996 9,518 2,081 11,599
Prior 45,635 17,333 62,968
$ 259,671 $ 48,806 $ 308,477
_J.
46
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, 2001,
follows:
Balance Balance
October 1, Retirements September 30,
2000 Additions , and Transfers 2001
Land $ 3,401,991 $ $ $ 3,401,991
Buildings 4,917,177 4,917,177
Improvements other
than buildings 18,710,363 84,244 18,794,607
Furniture and equipment 5,678,421 610,682 (133,780) 6,155,323
Construction in progress 1,214,125 614,240 (84,244) 1,744,121
Total $ 33,922,077 $ 1,224,922 $ (133,780) $ 35,013,219
A summary of changes in Enterprise Fund fixed assets for the year ended September 30,2001,follows:
Balance Balance
October 1, Retirements September 30,
2000 Additions and Transfers 2001
Land $ 675,565 $ $ $ 675,565
} Plant and equipment 18,087,999 207,858 (17,165) 18,278,692
Water and sewer lines 17,353,874 1,379,228 18,733,102
Construction in progress 257,418 2,563,054 (1,379,228) 1,441,244
36,374,856 2,770,912 (17,165) 39,128,603
Less accumulated depreciation (12,582,913) (937,304) 24,828 (13,495,389)
Total $ 23,791,943 $ 1,833,608 $ 7,663 $ 25,633,214
The Trust and Agency fund accounts for its own land and improvements in the amount of$57,200.
Construction Commitments
Commitments for construction projects in progress were$527,000 at September 30,2001.
47
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTSLi
NOTE 5-LONG-TERM DEBT
The City issues a variety of long-term debt instruments in order to acquire and/or construct major capital
facilities and equipment for general government and enterprise fund activities. These instruments include
general obligation bonds, certificates of obligation, revenue bonds, notes payable, and capital leases.
These debt obligations are secured by either future tax revenues, water and sewer system revenues, or
liens on property and equipment. Debt obligations 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.
Bonds Payable and Certificates of Obligation
A summary of the terms of general obligation bonds, combination tax and revenue bonds, and certificates
of obligation outstanding and their corresponding allocations to the General Long-Term Debt Account
Group and the Enterprise Fund at September 30,2001 follows:
Series and Original Issue Interest Rate General Long- Enterprise
Amount Final Maturity (%) Term Debt Fund
General Obligation Bonds
1986 Refunding Bonds I
$ 10,650,777 2004 4.25 -7.90 $ 40,725 $ 33,321
1993 Refunding Bonds
$ 6,555,000 2004 2.25-4.625 405,000 1,215,000
Less unamortized bond issuance costs (1,494)
445,725 1,246,827 Ls
Revenue Bonds
1999 Waterworks and Sewer System Revenue Bonds
$ 4,945,000 2019 4.2-5.55 4,620,000
2000 Waterworks and Sewer System Revenue Bonds
$ 3,515,000 2019 4.2-6.5 3,515,000
2001 Waterworks and Sewer System Revenue Bonds
$ 6,100,000 2021 4.7-6.5 6,100,000
Less unamortized bond issuance costs (160,113)
14,074,887
Combination Tax and Revenue --
Certificates of Obligation
1992 Series $ 5,000,000 2008 5.30-6.75 1,760,000 2,255,000
1995 Series $ 3,200,000 2010 5.375-7.375 2,825,000
1,760,000 5,080,000
Total Bonds and Certificates of Obligation $ 2,205,725 $ 20,401,714
! 1
i f
48
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
7 NOTE 5-LONG-TERM DEBT(Continued)
Annual debt service requirements for bonds and certificates of obligation are as follows:
General
Obligation Certificates of
Fiscal Year Bonds Obligation Revenue Bonds
2002 $ 667,141 $ 712,766 $ 875,874
2003 665,478 720,695 796,761
2004 471,799 810,265 794,936
2005 1,223,732 904,273
2006 1,223,977 904,448
2007 1,222,423 903,973
2008 872,488 893,173
2009 884,175 882,373
2010 893,381 871,573
2011 1,722,005
2012 1,704,963
2013 1,721,940
2014 1,724,585
2015 1,730,148
2016 1,742,428
2017 1,742,331
2018 1,747,045
2019 1,751,275
2020 700,930
2021 697,340
Total requirements 1,804,418 8,563,902 24,115,034
less interest portion (110,372) (1,723,902) (9,880,034)
$ 1,694,046 $ 6,840,000 $ 14,235,000
Accretion on Premium Compound Interest Bonds
A portion of the bonds sold in the Series 1986 refunding bond issue were premium compound interest bonds.
These obligations have par values of$74,046 and maturity values of$265,000. The interest these obligations
will be paid upon maturity in the fiscal years ending September 30, 2001 through 2004. The accreted values of
these bonds at September 30, 2001, is approximately $237,247 of which $106,762 has been allocated to the
Enterprise Fund and $130,485 has been allocated to the General Long-Term Debt Account Group. Accordingly,
accretion on these bonds of approximately $73,440 and $89,760 has been recorded in the Enterprise Fund and
the General Long-Term Debt Account Group, respectively.
49
f
CITY OF FRIENDSWOOD 1
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
U
NOTE 5-LONG-TERM DEBT (Continued)
t .
Obligations Under Capital Leases
The City entered into capital lease agreements in order to purchase equipment for City Hall, public works, and
the police and fire departments. Following is a summary of future lease payments due on this equipment:
Lease -
Fiscal Year Obligation
2002 $ 244,284
2003 154,917
2004 91,981
2005 80,571
2006 80,572
2007 80,572
2008 80,574
2009 20,071
Total 833,542
less interest portion (120,112) i f
Obligations under capital leases $ 713,430
Changes in Long-Terns Debt
The following are summaries of long-term debt transactions of the City for the year ended September 30,
2001.
General Long-Term Debt Account Group
Balance, Balance,
October 1, September 30,
2000 Additions Retirements 2001
General obligation bonds $ 600,219 $ $ (154,494) $ 445,725
Certificates of obligation 1,830,000 (70,000) 1,760,000
Obligations under capital
leases 775,443 47,393 (109,406) 713,430
Accreted interest on premium 1
compound interest bonds 139,538 (49,778) 89,760
$ 3,345,200 $ 47,393 $ (383,678) $ 3,008,915
I f
50
7
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 5-LONG-TERM DEBT (Continued)
Enterprise Fund Long-Term Debt
Balance, Balance,
October 1, September 30,
2000 Additions Retirements 2001
General obligation bonds $ 1,603,691 $ $ (356,864) $ 1,246,827
Revenue bonds 8,388,842 6,041,987 (355,942) 14,074,887
Certificates of obligation 5,255,000 (175,000) 5,080,000
Accreted interest on premium
compound interest bonds 114,167 (40,727) 73,440
$ 15,361,700 $ 6,041,987 $ (928,533) $ 20,475,154
NOTE 6-FUND EQUITY
Contributed Capital
A summary of changes in the Enterprise Fund contributed capital, for the year ended September 30, 2001,
follows:
Contributed Capital,beginning balance $ 12,435,358
Current year impact fees 631,036
Contributed Capital,ending balance $ 13,066,394
Implementation of New Accounting Principle
For the year ended September 30, 2001, the City implemented Governmental Accounting Standards Board
Statement (GASB) 33 "Accounting and Financial Reporting for Nonexchange Transactions. In
implementing this Statement, the City has recognized sales taxes, franchise taxes, and certain fines, in the
period in which the underlying transaction takes place where the City will derive the taxes in a later period.
The City has restated general fund beginning fund balance as indicated below. The effect of the change on
the general fund is as follows:
Beginning fund balance as previously stated $ 3,687,950
Prior period adjustment 755,907
Fund balance as restated $ 4,443,857
51
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 7-INTERFUND TRANSFERS
During the year ended September 30, 2001 the following operating transfers were made:
Operating Operating
Transfer From Transfer To Amounts
Enterprise Fund General Fund $ 555,713
NOTE 8-IMPACT FEES
On April 27, 1990, the City, in conformance with the provisions of Senate Bill 336 and House Bill 1786,
adopted a Capital Improvements Plan for Water Supply and Distribution Improvements and for Wastewater f
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.
In 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
in the City Wide impact fees.
Based on population growth projections, two areas (Melody Lane and Central Service Area) within the City
were identified for the proposed extension of water distribution and wastewater collection systems and are
included in the impact fee structure. An impact fee was also included to defray the costs of water
distribution facilities extended to the Bay Area Boulevard Service Area under the terms of a contractual
agreement with Bay Area Land Company,Ltd.
The Capital Improvements Plan and Impact Fee structure was amended by City Council on January 7, 1991,
to include an impact fee for sanitary sewer collection system costs serving the area known as Mills, Murphy,
and Briarmeadow Avenue between Sunset Drive and Greenbriar.
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.
52
J CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 8-IMPACT FEES(continued)
The following is a summary of the Impact Fees that apply on a City Wide Basis and for each of the
designated service areas. The fees represent the charge for single equivalent service units as defined in the
Capital Improvement Plan.
Fee Per Single
Equivalent
Service Unit
City Wide Impact Fees
Surface water facilities $ 685
Wastewater treatment facilities 69
Impact fee study and update study 36
7 Total City Wide Impact Fee 790
Water Distribution Impact Fees
Melody Lane service area 854
Bay Area Boulevard service area 294
South Friendswood service area 293
Wastewater Collection Impact Fees
Melody Lane service area 450
Mills,Murphy,Briarmeadow Avenue 2,532
South Friendswood Service Area
Area A 378
Area B-1 378
Area B-2 378
Area C 285
Area D 161
Area E-1 784
Area E-2 784
Area E-3 161
Area E-4 161
Area F 378
53
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 9-EMPLOYEE RETIREMENT SYSTEM
Plan Description
The City provides pension benefits for all of its full-time employees through a nontraditional, joint
contributory, hybrid defined benefit plan in the statewide Texas Municipal Retirement System (TMRS). The
City is one of 745 municipalities having the plan administered by the by TMRS, an agent multiple employer
public employee retirement system. Each of the 745 municipalities has an annual, individual actuarial
valuation performed. All assumptions for the 12-31-00 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
constraints also in the statutes.
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
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
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 31,2000 valuation is effective for rates beginning in January 2002).
54
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 9-EMPLOYEE RETIREMENT SYSTEM(continued)
Annual Pension Cost
The City's annual pension cost of $754,983 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
1999 $ 597,548 100% -
2000 701,196 100% -
2001 754,983 100% -
Required Supplemental Information
A schedule of funding progress for TMRS for the three most recent actuarial valuations may be found in the
required supplementary information section of the City's Comprehensive Annual Financial Report.
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.
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.
The relationship of the parties is of a fiduciary character. No partnership or joint venture is created by this
contract.
55
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
NOTE 12-BLACKHAWK REGIONAL WASTE TREATMENT PLANT
The City has entered into an arrangement with the Gulf Coast Waste Disposal Authority for the operation
and maintenance of a joint treatment plant known as Blackhawk Regional Waste Treatment Plant. The City
of Friendswood, the City of Houston, Harris County MUD No. 55, and Baybrook MUD 1, (the
"participants") share in the expense of operation and maintenance based on their respective usage on a
monthly basis. The percentages of equity in the joint venture based on their respective capacity rights at
September 30, 2001 are as follows:
L
City of Friendswood 52.47%
City of Houston 16.18%
Harris County MUD No. 55 20.27%
Baybrook MUD No. 1 11.08%
100.00%
An annual budget for operations is submitted to the Gulf Coast Waste Disposal Authority each year. The '-1
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, 2001 audited financial
statements of the Gulf Coast Waste Disposal Authority and are summarized below:
Venture
Total assets $ 495,793
Total liabilities (495,793)
Total fund equity $
Total revenues $ 1,600,510
Total expenditures (1,600,510) I
Net increase/decrease $
1
a _y
LJ
J
56 ?
CITY OF FRIENDSWOOD
Exhibit A-6
NOTES TO FINANCIAL STATEMENTS
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,
—' 2001 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, 2001 the City believed
the amounts paid on workers compensation would not change significantly from the amounts recorded.
During the year ended September 30, 2001 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 an
individual employee chooses to cover only their selves, the city pays 90% of the monthly premium. If an
individual employee desire to cover themselves and their dependents, the city pays 70% of the monthly
premium.
57
CITY OF FRIENDSWOOD,TEXAS
REQUIRED PENSION SYSTEM SUPPLEMENTARY INFORMATION Exhibit A-7
September 30,2001
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
1995 $ 5,838,306 $ 6,559,465 89% $ 721,159 $ 4,150,533 17% j
1996 6,820,691 7,531,703 91% 711,012 4,455,830 16%
.' 1997 7,798,961 8,694,662 90% 895,701 4,471,928 20%
1998 8,967,149 11,467,709 78% 2,500,560 5,148,362 49%
1999 8,967,149 11,467,709 78% 2,500,560 5,148,363 49% L
2000 10,377,128 13,169,487 79% 2,792,359 5,215,264 54%
2001 11,512,297 14,942,827 77% 3,430,530 5,662,296 61%
Schedule of Annual Pension Costs
Annual
Calendar Pension Cost Percentage 1
Year (APC) Contributed
1995 $ 257,192 100%
1996 284,653 100% _
1997 324,151 100%
1998 358,205 100%
1999 — 597,548 100%
2000 701,196 100%
2001 754,983 100%
` '
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.
Valuation date 12/31/2000
Actuarial cost method Unit credit !
Amortization method Level percent of payroll
Remaining amortization period 25 years-Open
Asset valuation method Amortized cost
Actuarial assumptions:
Investment rate of return 8.00%
Projected salary increase None i
Includes inflation at None
cost-of-living adjustments None I-
58 - €
f
ti
COMBINING, INDIVIDUAL FUND AND ACCOUNT GROUP
STATEMENTS AND SCHEDULES
59
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1 '
1
Li
(this page intentionally left blank)
60
•
•
•
GENERAL FUND
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.
•
•
•
—f�
61
I
I
CITY OF FRIENDSWOOD,TEXAS n
GENERAL FUND Exhibit B-1 1
COMPARATIVE BALANCE SHEET L..�
September 30,2001 and 2000
1
2001 2000
Assets
Cash and temporary investments $ 6,552,243 $ 4,802,848 �,
Receivables, less allowance for uncollectibles i,,...
Taxes 259,671 225,874
Customer accounts 77,746 80,144
Other 477,378 431,544
Due from other governments 688,974 449,502
Inventory 13,480 4,266
Prepaid and other assets 3,304 24,677
Total Assets $ 8,072,796 $ 6,018,855
i ;.
Liabilities and Fund Balance
Liabilities
Accounts payable $ 330,389 $ 222,737
Accrued liabilities 165,386 181,147 _�
Accrued compensated absences 863,035 854,775
Deferred revenue 273,587 316,339
1
Total Liabilities 1,632,397 1,574,998
Fund Balance
Reserved for encumbrances . 434,509 820,966
I
16,784 28,943
Reserved for inventories and prepaids '
Unreserved:
Designated for construction 876,656 169,267
Designated for projects 137,018 80,550 �.
Undesignated 4,975,432 3,344,131
Total Fund Balance 6,440,399 4,443,857
Total Liabilities and Fund Balance $ 8,072,796 $ 6,018,855
62
J
CITY OF FRIENDSWOOD,TEXAS
GENERAL FUND Exhibit B-2
STATEMENT OF REVENUES,EXPENDITURES,AND Page 1 of 8
--7 CHANGES IN FUND BALANCE-BUDGET AND ACTUAL(BUDGETARY BASIS)
Year Ended September 30,2001
with comparative actual balances for the Year Ended September 30,2000
2001 2000
- Actual Variance Actual
(Budgetary Favorable (Budgetary
Budget Basis) (Unfavorable) Basis)
Revenues
Property taxes $ 6,860,062 $ 6,949,269 $ 89,207 $ 6,267,686
Sales taxes 2,009,200 2,419,071 409,871 2,121,107
Franchise fees 858,306 988,608 130,302 870,838
Sanitation 66,000 69,154 3,154
--1 Fines and forfeitures 351,500 550,854 199,354 497,469
Permits and fees 814,244 1,192,899 378,655 970,872
- Intergovernmental 256,464 576,291 319,827 607,658
Interest on investments 188,500 397,539 209,039 377,012
Other 62,470 120,839 58,369 224,800
Total Revenues 11,466,746 13,264,524 1,797,778 11,937,442
r-- Expenditures
s
General Government:
Mayor and Council:
,� Personnel services 143 126 17 143
Supplies 1,985 1,533 452 1,629
Other services and charges 57,810 28,957 28,853 29,747
Total Mayor and Council 59,938 30,616 29,322 31,519
City Manager:
Personnel services 215,606 226,592 (10,986) 204,186
Supplies 4,668 5,061 (393) 5,556
7 Repairs and maintenance 414 (414) 1,138
Other services and charges 59,162 40,184 18,978 26,263
Total City Manager 279,436 272,251 7,185 237,143
City Secretary:
Personnel services 191,292 190,614 678 171,940
Supplies 5,867 5,385 482 5,758
Repairs and maintenance 1,295 2,482 (1,187) 865
-� Other services and charges 45,948 23,827 22,121 23,270
Capital outlay 2,400 2,400
Total City Secretary 246,802 224,708 22,094 201,833
n
63
•
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 (BUDGETARY BASIS)
Year Ended September 30,2001
with comparative actual balances for the Year Ended September 30,2000
2001 2000
Actual Variance Actual
(Budgetary Favorable (Budgetary
Budget Basis) (Unfavorable) Basis) ,
Expenditures(continued)
General Government: (continued)
Administration:
Finance:
Personnel services $ 397,185 $ 399,592 $ (2,407) $ 387,955
Supplies 14,060 7,560 6,500 7,671
Repairs and maintenance 261 261 120 -
Other services and charges 37,057 27,415 9,642 31,219 _
Total Finance 448,563 434,567 13,996 426,965
Human Resources:
Personnel services 189,386 138,038 51,348 124,090
Supplies 10,468 7,333 3,135 6,862
Repairs and maintenance 130 125 5
Other services and charges 59,735 50,263 9,472 56,413
Total Human Resources 259,719 195,759 63,960 187,365
Tax:
Other services and charges 143,737 125,593 18,144 104,190
Economic Development ,
Personnel services 68,954 71,215 (2,261) 70,705
Supplies 1,570 1,223 347 1,415
Other services and charges 97,896 50,095 47,801 26,100
Capital outlay 1,174
Total Economic Development 168,420 122,533 45,887 99,394
r
Legal: 1
Other services and charges 122,349 83,764 38,585 191,694
Total Legal 122,349 83,764 38,585 191,694 I -
Municipal Court: ,
Personnel services 163,544 168,957 (5,413) 180,019
Supplies 9,271 6,371 2,900 6,786
Repairs and maintenance 995 726 269 32
Other services and charges 10,388 10,182 206 7,921
Total Municipal Court 184,198 186,236 (2,038) 194,758
64
i
CITY OF FRIENDSWOOD, TEXAS
j GENERAL FUND Exhibit B-2
_J STATEMENT OF REVENUES,EXPENDITURES,AND Page 3 of 8
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL(BUDGETARY BASIS)
Year Ended September 30,2001
with comparative actual balances for the Year Ended September 30,2000
__ 2001 2000
Actual Variance Actual
R�' (Budgetary Favorable (Budgetary
Budget Basis) (Unfavorable) Basis)
Expenditures (continued)
General Government:(continued)
Computer Services:
Personnel services $ 132,307 $ 133,309 $ (1,002) $ 132,068
-- Supplies 23,289 21,096 2,193 24,675
Repairs and maintenance 17,194 17,193 1 17,669
Other services and charges 283,106 224,338 58,768 258,865
Capital outlay 59,065 58,998 67 112,804
j Reserves and contingencies 157,700 157,700 7,336
_J Total Computer Services 672,661 454,934 217,727 553,417
Risk Management:
Personnel services 5,352
Supplies 509 509 171
Other services and charges-insurance 74,432 65,265 9,167 72,111
Total Risk Management 74,941 65,265 9,676 77,634
Total General Government 2,660,764 2,196,226 464,538 2,305,912
Public Safety:
Police Services:
Personnel services 2,602,809 2,532,400 70,409 2,411,035
Supplies 152,982 158,452 (5,470) 99,958
-� Repairs and maintenance 92,558 60,880 31,678 79,602
Other services and charges 196,984 228,830 (31,846) 141,131 ,
Capital outlay 116,606 135,535 (18,929) 66,638
Total Police Services 3,161,939 3,116,097 45,842 2,798,364
Communications:
Personnel services 578,304 535,112 43,192 541,192
Supplies 9,109 5,070 4,039 3,651
Repairs and maintenance 4,097 198 3,899 848
Other services and charges 5,307 22,010 (16,703) 6,172
Capital outlay 10,324 9,987 337
Total Communications 607,141 572,377 34,764 551,863
'1
65
I
1
CITY OF FRIENDSWOOD,TEXAS
GENERAL FUND Exhibit B-2 1 1
STATEMENT OF REVENUES,EXPENDITURES,AND Page 4 of 8 J
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL(BUDGETARY BASIS)
Year Ended September 30,2001
with comparative actual balances for the Year Ended September 30,2000 •
2001 2000
Actual Variance Actual
(Budgetary Favorable (Budgetary
• Budget Basis) (Unfavorable) Basis)
Expenditures(continued)
Public Safety: (continued) •
Animal Control:
Personnel services $ 129,647 $ 133,669 $ (4,022) $ 126,739 +
Supplies 6,728 7,722 (994) 9,930 ;__�.
Repairs and maintenance 1,141 608 533 3,345
Other services and charges 4,450 5,187 (737) 2,632
Capital outlay 5,000 4,850 150 15,633
Total Animal Control 146,966 152,036 (5,070) 158,279
Fire and EMS:
Personnel services 427,834 406,576 21,258 352,664
Supplies 104,183 105,546 (1,363) 84,410
Repairs and maintenance 80,922 66,478 14,444 39,751
Other services and charges 114,472 107,017 7,455 132,732
Capital outlay 31,291 39,080 (7,789) 40,438
Total Fire and EMS 758,702 724,697 34,005 649,995
Emergency Management:
Personnel services 31,138 26,601 4,537 28,716
Supplies 7,576 6,463 1,113 2,270
• Repairs and maintenance 2,665 438 2,227 3,445 ;
Other services and charges 2,600 5,186 (2,586) 2,488
Capital outlay 147,090 133,133 13,957 21,050
Total Emergency Management 191,069 171,821 19,248 57,969
Tropical Storm Allison j
Personnel services 96,563 (96,563)
Supplies 15,477 (15,477)
Other services and charges 242,249 (242,249)
Total Tropical Storm Allison _ 354,289 (354,289)
Total Public Safety 4,865,817 _ 5,091,317 (225,500) 4,216,470 -
1
LJ
66
-- GENERAL FUND Exhibit B-2
STATEMENT OF REVENUES,EXPENDITURES,AND Page 5 of 8
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL(BUDGETARY BASIS)
1 Year Ended September 30,2001
__l with comparative actual balances for the Year Ended September 30,2000
2001 2000
}
Actual Variance Actual
(Budgetary Favorable . (Budgetary
Budget Basis) (Unfavorable) Basis)
Expenditures(continued)
Public Works:
Administration:
Personnel services $ 127,984 $ 156,405 $ (28,421) $ 129,345
Supplies 2,700 1,432 1,268 1,652
7 Repairs and maintenance 929 156 773 2,526
Other services and charges 2,549 3,048 (499) 3,050
Total Administration 134,162 161,041 (26,879) 136,573
Streets:
7 Personnel services 300,164 289,179 10,985 289,976
Supplies 44,594 34,416 10,178 46,001
Repairs and maintenance 137,699 70,113 67,586 105,822
Other services and charges 247,871 314,824 (66,953) 262,927
Capital outlay 961,122 140,600 820,522 1,623,879
Total Streets 1,691,450 849,132 842,318 2,328,60.5
- Drainage:
Personnel services 161,002 174,045 (13,043) 158,614
Supplies 817 120 697 664
Repairs and maintenance 33,014 17,196 15,818 16,106
_ Other services and charges 31,856 50 31,806 425
- Total Drainage 226,689 191,411 35,278 175,809
Total Public Works 2,052,301 1,201,584 850,717 2,640,987
Sanitation:
Other services and charges 2,550 2,357 193 1,437
Total Sanitation 2,550 2,357 193 _- 1,437
67
_
1
CITY OF FRIENDSWOOD, TEXAS
1
GENERAL FUND Exhibit B-2 ' I,
STATEMENT OF REVENUES,EXPENDITURES,AND Page 6 of 8
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL (BUDGETARY BASIS) I
Year Ended September 30,2001 L!
with comparative actual balances for the Year Ended September 30,2000
2001 2000
Actual Variance Actual
(Budgetary Favorable (Budgetary
Budget Basis) (Unfavorable) Basis)
Expenditures(continued)
Community Development:
Administration:
Personnel services $ 125,295 $ 119,775 $ 5,520 $ 88,717
Supplies 933 1,222 (289) 951
Other services and charges 2,746 2,808 (62) 2,662 _
Total Administration 128,974 123,805 5,169 92,330
Planning and Zoning: -
Personnel services 98,913 96,060 2,853 101,802
Supplies 2,242 2,682 (440) 2,586
Repairs and maintenance 236 236
Other services and charges 38,186 3,202 34,984 4,186
Capital outlay 10,319 L
Total Planning and Zoning: 139,577 101,944 37,633 118,893
Engineering:
Personnel services 62,494 64,124 (1,630) 32,342 _
Supplies 2,069 3,082 (1,013) 2,789
Repairs and maintenance 2,361 1,848 513 99
Other services and charges 22,471 19,978 2,493 3,576 I
Capital outlay 2,220 2,220
Total Engineering: 91,615 91,252 363 38,806
Inspection: ;
Personnel services 271,071 284,746 (13,675) 242,554
Supplies 10,647 10,418 229 8,112
Repairs and maintenance 1,350 2,474 (1,124) 1,162
Other services and charges 48,697 21,341 27,356 33,231 -1
Capital Outlay 3,843 5,067 (1,224) -
Total Inspection 335,608 324,046 11,562 285,059
Total Community Development 695,774 641,047 54,727 535,088 _i
_
68
CITY OF FRIENDSWOOD,TEXAS
GENERAL FUND Exhibit B-2
STATEMENT OF REVENUES,EXPENDITURES,AND Page 7 of 8
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL(BUDGETARY BASIS)
Year Ended September 30,2001
with comparative actual balances for the Year Ended September 30,2000
2001 2000
--- Actual Variance Actual
(Budgetary Favorable (Budgetary
Budget Basis) (Unfavorable) Basis)
Expenditures(continued)
Community Services:
Library:
Personnel services $ 467,608 $ 444,474 $ 23,134 $ 417,486
Supplies 140,102 112,939 27,163 103,368
Repairs and maintenance 3,125 1,458 1,667 1,025
Other services and charges 20,080 32,922 (12,842) 28,155
Capital Outlay 5,719 2,314 3,405 55,129
Reserves and contingencies 9,176 9,176
Total Library _ 645,810 594,107 51,703 605,163
Parks and Recreation
Personnel services 382,043 376,908 5,135 334,271
Supplies 78,350 64,929 13,421 53,346
Repairs and maintenance 87,065 82,006 5,059 75,164
Other services and charges 245,104 274,954 (29,850) 259,614
Capital Outlay 579,779 567,166 12,613 128,281
Total Parks and Recreation 1,372,341 1,365,963 6,378 850,676
�.? Community Activities:
Personnel services 128,998 127,753 1,245 122,209
Supplies 2,680 3,487 (807) 2,889
Other services and charges 20,832 24,416 (3,584) 16,468
Total Community Activities 152,510 155,656 (3,146) 141,566
- 69
r1
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 (BUDGETARY BASIS)
•
Year Ended September 30,2001
with comparative actual balances for the Year Ended September 30,2000
2001 2000
Actual Variance Actual
(Budgetary Favorable (Budgetary
Budget Basis) (Unfavorable) Basis)
Expenditures(continued)
Swimming Pool: 't
Personnel services $ 38,209 $ 33,760 $ 4,449 $ 28,841
Supplies 10,784 10,942 (158) 11,574
Repairs and maintenance 8,758 5,017 3,741 3,652
I
Other services and charges 15,145 24,913 (9,768) 11,191 �,
Capital Outlay 4,100 4,739 (639)
Total Swimming Pool 76,996 79,371 (2,375) 55,258
Building Operations:
Personnel services 29,944 30,807 (863) 25,186
Supplies 14,552 16,119 (1,567) 14,860
Repairs and maintenance 107,111 77,085 30,026 151,255
Other services and charges 390,891 411,949 (21,058) 324,137
Capital Outlay 27,629 7,500 20,129 187,086
Total Building Operations 570,127 543,460 26,667 702,524
Total Community Services 2,817,784 2,738,557 79,227 2,355,187
Total Expenditures 13,094,990 11,871,088 1,223,902 12,055,081
Revenues Over(Under)Expenditures (1,628,244) 1,393,436 3,021,680 (117,639)
Other Financing Sources(Uses) _
Proceeds from capital leases 47,393 47,393 74,856
' Operating transfers in 555,713 555,713 546,113
Total Other Financing Sources(Uses) 555,713 603,106 47,393 620,969
Revenues and Other Financing Sources ,_
Over(Under)Expenditures and
Other Financing(Uses) (1,072,531) 1,996,542 3,069,073 503,330 ,
Fund balance-Beginning,as restated 4,443,857 4,443,857 3,940,527
Fund Balance-Ending $ 3,371,326 $ 6,440,399 $ 3,069,073 $ 4,443,857
I
70 ,
--i
SPECIAL 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 is used to accounts for revenues that are restricted to police
investigation expenditures
Fire/EMS Donation Fund
This fund is used to accounts for revenues that are restricted for Fire/EMS capital
outlays and debt repayments.
Park Land Dedication Fund
This fund is used to accounts for receipts from developers to build or enhance
neighborhood parks.
1
71
CITY OF FRIENDSWOOD, TEXAS
SPECIAL REVENUE FUNDS
COMBINING BALANCE SHEET
September 30, 2001
with comparative totals for September 30,2000
Police Fire/EMS Park Land
Investigation Donations Dedication
Assets
Cash and cash equivalents $ 7,705 $ 121,175 $ 116,478
Accounts receivable 24,089
Total Assets $ 7,705 $ 145,264 $ 116,478
Liabilities and Fund Balance
•
Liabilities
Accounts payable and accrued liabilities $ $ $ 1,200
Deferred revenues
Total Liabilities 1,200
Fund Balances
Unreserved:
Designated for police investigations 7,705
Designated for Fire/EMS 145,264
Designated for park projects 115,278
Total Fund Balances 7,705 145,264 115,278 )
Total Liabilities and Fund Balances $ 7,705 $ 145,264 $ 116,478
t
72
Exhibit C-I
Totals
2001 2000
$ 245,358 $ 74,720
24,089 23,885
$ 269,447 $ 98,605
$ 1,200 $
21,566
1,200 21,566
7,705 6,052
145,264 59,531
115,278 11,456
268,247 77,039
$ 269,447 $ 98,605
73
CITY OF FRIENDSWOOD
SPECIAL REVENUE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,AND
CHANGES IN FUND BALANCE
Year Ended September 30, 2001
with comparative totals for the Year Ended September 30, 2000
Police Fire/EMS Park Land
Investigation Donations Dedication
Revenues
Permits and fees $ $ $ 100,907
Earnings on investments 444 5,387 2,915
Intergovernmental 4,270
Other 261,317
Total Revenues 4,714 266,704 103,822
Expenditures
Current:
Public safety 3,061 21,555
Capital Outlay 98,987
Debt Service:
Principal 23,144
Interest 37,285
Total Expenditures 3,061 120,542
Revenues Over (Under)
Expenditures 1,653 85,733 103,822
Other Financing Sources
Proceeds from issuance of long-term debt
Total Other Financing Sources
Revenues and Other Financing Sources
Over Expenditures 1,653 85,733 103,822
Fund Balance-Beginning 6,052 59,531 11,456
Fund Balance-Ending $ 7,705 $ 145,264 $ 115,278
74 ,
Exhibit C-2
7
Totals
2001 2000
$ 100,907 $ 11,300
8,746 9,276
4,270 304
261,317 245,954
375,240 266,834
24,616 49,283
98,987 652,206
23,144
37,285- —
! 123,603 701,489
251,637 (434,655)
500,000
500,000
251,637 65,345
77,039 11,694
$ 328,676 $ 77,039
75
I
CITY OF FRIENDSWOOD,TEXAS _
SPECIAL REVENUE FUND(FIRE/EMS DONATIONS) Exhibit C-3
STATEMENT OF REVENUES,EXPENDITURES,AND
CHANGES IN FUND BALANCE-
BUDGET AND ACTUAL
Year Ended September 30,2001
with comparative totals for the Year Ended September 30,2000
2001 2000
Variance
Favorable
Budget Actual (Unfavorable) Actual
Revenues
Intergovernmental $ 8,544 $ $ (8,544) $ 8,544
Interest on investments 5,387 5,387 304
Other 180,000 261,317 81,317 245,954
Total Revenues 188,544 266,704 78,160 254,802
Expenditures
Current
Public safety 20,214 21,555 (1,341) 43,065
Capital Outlay 106,000 98,987 7,013 652,206
Debt Service:
Principal 23,017 23,144 (127)
Interest 37,413 37,285 128
Total Expenditures 186,644 180,971 5,673 695,271 ^�
E
Revenues Over(Under)
Expenditures 1,900 85,733 83,833 (440,469)
Other Financing Sources
Proceeds from issuance of long-term debt 500,000
Total Other Financing Sources 500,000
Revenues and Other
Financing Sources Over
Expenditures 1,900 85,733 83,833 59,531
Fund balances-Beginning 59,531 59,531
Fund Balances-Ending $ 61,431 $ 145,264 $ 83,833 $ 59,531
76
•
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.
•
7 77
CITY-OF FRIENDSWOOD, TEXAS
DEBT SERVICE FUND Exhibit D-1
COMPARATIVE BALANCE SHEET
September 30,2001 and 2000
2001 2000
Assets
Cash and temporary investments $ 79,994 $ 68,627
Taxes receivable,less allowance for uncollectibles 48,806 43,310
Total Assets $' 128,800 $ 111,937
Liabilities and Fund balance
Liabilities
Accounts payable and accrued liabilities $ 2,819
Deferred revenue 48,806 43,310
Total Liabilities 51,625 43,310
Fund Balance
Reserved for debt service 77,175 68,627
Total Fund Balance 77,175 68,627
Total Liabilities and Fund Balance $ 128,800 $ 111,937
78
CITY OF FRIENDSWOOD,TEXAS
J DEBT SERVICE FUND Exhibit D-2
STATEMENT OF REVENUES,EXPENDITURES,AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
Year Ended September 30,2001
with comparative actual balances for the Year Ended September 30,2000
2001
Variance
Favorable _ 2000
Budget Actual (Unfavorable) Actual
Revenues
} Property taxes $ 1,043,695 $ 1,057,637 $ 13,942 $ 958,519
Interest on investments 18,127 18,127 13,423
Total Revenues 1,043,695 1,075,764 32,069 971,942
Expenditures
Principal retirement 568,926 593,326 (24,400) 525,897
Interest retirement 475,392 473,890 1,502 450,762
Total Expenditures 1,044,318 1,067,216 (22,898) 976,659
Revenues Over
(Under)Expenditures (623) 8,548 9,171 (4,717)
Fund balances-Beginning 68,627 68,627 73,344
Fund Balances-Ending $ 68,004 $ 77,175 $ 9,171 $ 68,627
79
•
left blank)
(this page intentionally
SO
III
•
ENTERPRISE FUND
The Enterprise Fund is used to account for the acquisition, operation, and
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
operations similar to private enterprise.
81
(this page intentionally left blank)
g2
CITY OF FRIENDSWOOD,TEXAS
ENTERPRISE FUND Exhibit E-1
COMPARATIVE BALANCE SHEET
September 30,2001 and 2000
2001 2000
Assets
Current Assets
Cash and cash equivalents $ 4,048,399 $ 2,463,506
Receivables:
Customer accounts 959,330 1,031,086
} Other 5,007 37,072
Inventory 5,575 5,575
Prepaid and other assets 585 2,092
Total Current Assets 5,018,896 3,539,331 -
Restricted Assets
Investment in Blackhawk joint venture 255,531 255,531
Deposits and impact fees 8,583,312 7,159,794
8,838,843 7,415,325
Land,buildings,and equipment,at cost 39,128,603 36,374,856
Less accumulated depreciation (13,495,389) (12,582,913)
Land,Buildings,and Equipment,Net 25,633,214 23,791,943
Other Assets-Water rights 3,464,619 850,000
Total Assets $ 42,955,572 $ 35,596,599
Liabilities and Fund Equity
Current Liabilities - - -
Accounts payable $ 600,958 $ 350,586
Accrued liabilities 179,217 126,483
Compensated absences 86,063 101,871
Customer deposits 232,167 262,143
Bonds payable,current portion 423,494 721,405
Certificates of obligation payable,current portion 185,000 175,000
Total Current Liabilities 1,706,899 1,737,488
Long-Term Liabilities
Bonds payable,less current portion 14,898,220 9,271,128
Certificates of obligation payable,less current portion 4,895,000 5,080,000
Accreted interest on premium compound interest bonds 73,440 114,167
Total Long-Term Liabilities 19,866,660 14,465,295
Total Liabilities 21,573,559 16,202,783
Fund Equity
Contributed capital 13,066,394 12,435,358
Retained Earnings 8,315,619 6,958,458
Total Fund Equity 21,382,013 19,393,816
Total Liabilities and Fund Equity $ 42,955,572 $ 35,596,599
83
1
CITY OF FRIENDSWOOD, TEXAS
ENTERPRISE FUND
SCHEDULE OF BONDS PAYABLE-
DEBT SERVICE REQUIREMENTS TO MATURITY
September 30,2001
Fiscal Year
Ending Annual Requirements for All Series Series 1986
Sept.30, Principal Interest Total Principal Interest Total
2002 $ 423,494 $ 925,451 $ 1,348,945 $ 12.244 $ 28,256 $ 40,500
2003 441,247 829,725 1,270,972 11,247 29,253 40,500
2004 458,580 808,155 1,266,735 9,830 28,420 38,250
2005 140,000 764,272 904,272
2006 150,000 754,448 904,448
2007 160,000 743,973 903,973
2008 160,000 733,173 893,173
2009 160,000 722,373 882,373
2010 160,000 711,583 871,583
2011 1,050,000 672,005 1,722,005
2012 1,095,000 609,963 1,704,963
2013 1,170,000 551,940 1,721,940
2014 1,235,000 489,585 1,724,585
2015 1,305,000 425,148 1,730,148
2016 1,390,000 352,428 1,742,428
2017 1,465,000 277,331 1,742,331
2018 1,550,000 197,045 1,747,045
2019 1,640,000 111,275 1,751,275
2020 650,000 50,930 700,930 `
2021 680,000 17,340 697,340
Totals $ 15,483,321 $ 10,748,143 $ 26,231,464 $ 33.321 $ 85,929 $ 119,250
Fiscal Year Wastewater Sanitary Sewer Revenue Bonds Series Wastewater Sanitary Sewer Revenue Bonds Series
Ending 1999 2000
Sept.30, Principal Interest Total Principal Interest Total
2002 $ 25.000 $ 255,948 $ 280,948 $ 208,485 $ 208,485
2003 25,000 . 254,123 279,123 208,485 208,485
2004 25,000 252,298 277,298 208,485 208,485
2005 50,000 249,560 299,560 40.000 207,185 247,185
2006 50,000 245,910 295,910 50.000 204,260 254,260
2007 50,000 242,260 292,260 60,000 200,685 260,685
2008 50,000 238,610 288,610 60.000 196,785 256,785 ,
2009 50,000 234,960 284,960 60.000 192,885 252,885 ; j
2010 50,000 231,310 281,310 60,000 188,985 248,985
2011 375,000 217,298 592,298 275,000 177,754 452,754
2012 395,000 194,642 589,642 290,000 160,498 450,498
2013 420,000 173,045 593,045 310,000 143,842 453,842
2014 445,000 150,122 595,122 330.000 125,675 455,675
2015 465,000 126,007 591,007 350,000 108,038 458,038
2016 495,000 100,567 595,567 370,000 85,250 455,250
2017 520,000 73,670 593,670 395,000 63,256 458,256
2018 550,000 45,315 595,315 420,000 39,300 459,300
2019 580,000 15,370 595,370 445,000 13,350 458,350 j
2020
2021
Totals $ 4,620,000 $ 3,301,015 $ 7,921,015 $ 3,515,000 $ 2,733,203 $ 6,248,203
84
Exhibit E-2
Series 1993
Principal Interest Total
$ 386,250 $ 46,321 $ 432,571
( 405,000 28,711 433,711
423,750 9,799 433,549
$ 1,215,000 $ 84,831 $ 1,299,831
Wastewater Sanitary Sewer Revenue Bonds Series
2001
Principal Interest Total
$ 386,441 $ 386,441
309,153 309,153
309,153 309,153
50,000 307,527 357,527
50,000 304,278 354,278
50,000 301,028 351,028
50,000 297,778 347,778
50,000 294,528 344,528
50,000 291,288 341,288
400,000 276,953 676,953
410,000 254,823 664,823
440,000 235,053 675,053
460,000 213,788 673,788
490,000 191,103 681,103
525,000 166,611 691,611
550,000 140,405 690,405
580,000 112,430 692,430
615,000 82,555 697,555
650,000 50,930 700,930
680,000 17,340 697,340
$6,100,000 $ 4,543,165 $ 10,643,165
85
CITY OF FRIENDSWOOD,TEXAS
ENTERPRISE FUND Exhibit E-3
SCHEDULE OF CERTIFICATES OF OBLIGATION-
DEBT SERVICE REQUIREMENTS TO MATURITY
September 30,2001 !
Fiscal Year
Ending Annual Requirements for All Series Series 1995
Sept.30, Principal Interest Total Principal Interest Total
2002 185,000 279,797 464,797 90,000 158,651 248,651
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
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
2010 870,000 23,381 893,381 870.000 23,381 893,381
Totals $ 5,080,000 $ 1,578,189 $ 6,658,189 $ 2.825.000 $ 1,018,398 $ 3,843,398
Fiscal Year
Ending Series 1992
Sept.30, Principal Interest Total
2002 95,000 121,146 216,146
2003 100,000 115,265 215,265
2004 110,000 109,675 219,675
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
Totals $ 2,255,000 $ 559,791 $ 2,814,791 `-'
i I
-
86
•
GENERAL FIXED ASSETS
_n
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.
i
i
87
age intentionally left blank)
(this 88
CITY OF FRIENDSWOOD, TEXAS
GENERAL FIXED ASSETS Exhibit F-1
COMPARATIVE SCHEDULES OF GENERAL FIXED ASSETS-
BY SOURCE
September 30,2001 and 2000
2001 2000
General Fixed Assets -
Land $ 3,401,991 $ 3,337,140
Buildings 4,917,177 4,726,051
Improvements 18,794,607 17,933,869
Equipment 6,155,323 5,309,050
Construction in progress 1,744,121 323,263
Total General Fixed Assets $ 35,013,219 $ 31,629,373
Investment in General Fixed Assets From
General obligation bonds $ 4,638,651 $ 4,591,258
Time warrants and certificates of
obligation 5,594,986 4,861,440
Federal,state,and local grants 3,571,378 3,571,378
— Municipality 18,549,759 15,849,762
Donations 2,658,445 2,755,535
Total Investment in
General Fixed Assets $ 35,013,219 $ 31,629,373
89
CITY OF FRIENDSWOOD, TEXAS
GENERAL FIXED ASSETS
SCHEDULE OF GENERAL FIXED ASSETS-
BY FUNCTION AND ACTIVITY
September 30,2001
Function and Activity Land Buildings Improvements Equipment
General Government
City Manager $ $ $ $ 33,231
City Secretary 92,103
Administrative Services 736,478
Total General Government 861,812
Public Safety
Police 10,542 728,007 1,088,795
Fire 18,000 267,322 2,647,748
Emergency management 115,992
Total Public Safety 28,542 995,329 3,852,535
Public Works
Streets and drainage 375,408 141,816 16,660,020 385,538
Total Public Works 375,408 141,816 16,660,020 385,538
Community Development
Planning and zoning 1,406
Engineering 17,754
Inspection 25,893
Total Community Development 45,053
Community Services
Library 93,689 591,760 256,718
Parks and recreation 1,908,737 382,726 1,235,923 445,814
rli
Community activities 308,914 54,624
Swimming pool 552,700 776,877 15,268
Buildings 442,915 2,496,632 121,787 237,961
Total Community Services 2,998,041 3,780,032 2,134,587 1,010,385
Construction in progress
Total General Fixed Assets $ 3,401,991 $ 4,917,177 $ 18,794,607 $ 6,155,323
90
Exhibit F-2
Total
$ 33,231
92,103
736,478
861,812
1,827,344
2,933,070
115,992
4,876,406
17,562,782
17,562,782-- ---- --- ---- - —
1,406
17,754
25,893
45,053
942,167
3,973,200
363,538
1,344,845
3,299,295
9,923,045
1,744,121
—1 $ 35,013,219
91
f
CITY OF FRIENDSWOOD, TEXAS
GENERAL FIXED ASSETS Exhibit F-3
SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS-
BY FUNCTION AND ACTIVITY
Year Ended September 30,2001
General General
Fixed Assets Fixed Assets
Function and October 1, Transfers and September 30,
Activity 2000 Additions Retirements 2001
General Government
City Manager $ 28,611 4,620 $ $ 33,231
City Secretary 92,103 92,103
Administrative Services 677,480 58,998 736,478
Total General Government 798,194 63,618 861,812 `
Public Safety
Police 1,700,137 150,871 (23,664) 1,827,344
Fire 2,776,633 252,823 (96,386) 2,933,070
Emergency management 85,769 30,223 115,992 '
Total Public Safety 4,562,539 433,917 (120,050) 4,876,406
Public Works
Streets and drainage 17,485,738 77,044 17,562,782
Total Public Works 17,485,738 77,044 17,562,782
Community Development
Planning and zoning 1,406 1,406
Engineering 12,687 5,067 17,754
Inspection 25,893 25,893
Total Community Development 39,986 5,067 45,053
Community Services 1
Library 939,853 2,314 942,167
Parks and recreation 3,873,964 105,766 (6,530) 3,973,200
Community activities 363,538 363,538
Swimming pool 1,344,845 1,344,845
Buildings 3,299,295 3,299,295
Total Community Services 9,821,495 108,080 (6,530) 9,923,045
Construction in progress 1,214,125 614,240 (84,244) 1,744,121
Total General Fixed Assets $ 33,922,077 $ 1,224,922 $ (133,780) $ 35,013,219
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GENERAL LONG—TERM DEBT
This account group is established to account for the principal outstanding on
general obligation bonds and other long-term liabilities.
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CITY , TEXAS
COMPARATIVE SCHEDULES OF Exhibit G-1
GENERAL LONG-TERM DEBT •
September 30,2001 and 2000
2001 2000
-� Amount Available and to be Provided for
the Payment of General Long-Term Debt
Amount available in Debt Service Fund $ 77,175 $ 68,627
Amount to be provided for retirement of general long-term
debt 2,931,740 3,276,573
—1 Total Amount Available and to be Provided $ 3,008,915 $ 3,345,200
General Long-Term Debt Payable
General obligation bonds $ 445,725 $ 600,219
} Certificates of obligation 1,760,000 1,830,000
Obligations under capital leases 713,430 775,443
_ 1
Accretion on premium compound interest bonds 89,760 139,538
Total General Long-Term Debt Payable $ 3,008,915 $ 3,345,200
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CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF GENERAL LONG-TERM DEBT
SERVICE REQUIREMENTS TO MATURITY
September 30,2001
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
2002 $ 508,287 $ 177,301 $ 685,588 $ 14,965 $ 34,535 * $ 49,500
2003 442,685 154,271 596,956 13,746 35,754 * 49,500
2004 405,527 131,596 537,123 12,014 34,736 * 46,750
2005 349,916 76,975 426,891
2006 373,640 57,170 430,810
2007 397,577 35,908 433,485
2008 421,732 13,330 435,062
2009 19,791 280 20,071
Totals $ 2,919,155 $ 646,831 $ 3,565,986 $ 40,725 $ 105,025 $ 145,750
Due During
Fiscal Year
Ending Obligations Under Capital Leases
Sept.30, Principal Interest Total
2002 $ 209,572 $ 34,712 $ 244,284
2003 128,939 25,978 154,917
2004 72,263 19,718 91,981
2005 64,916 15,655 80,571
2006 68,640 11,932 80,572 -
2007 72,577 7,995 80,572
2008 76,732 3,842 80,574
2009 19,791 280 20,071
Totals $ 713,430 $ 120,112 $ 833,542
{_
* Includes accretion on premium compound interest bonds.
96
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Exhibit G-2
Certificates of Obligation Refunding Bonds
Series 1992 Series 1993
Principal Interest Due Principal Interest Due
Due March 1, Due March 1,
March 1 September 1 Total March 1 September 1 Total
$ 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 73,875 253,875 141,250 3,267 144,517
285,000 61,320 346,320
305,000 45,238 350,238
325,000 27,913 352,913
345,000 9,488 354,488
$ 1,760,000 $ 393,417 $ 2,153,417 $ 405,000 $ 28,277 $ 433,277
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UNAUDITED STATISTICAL SECTION
99
CITY OF FRIENDSWOOD, TEXAS
GENERAL GOVERNMENT REVENUES BY SOURCE
Last Ten Fiscal Years
Function 1992 1993 1994 1995 1996
General property taxes $ 4,749,173 $ 4,958,863 $ 5,249,517 $ 5,553,218 $ 5,865,855
Sales taxes 792,876 799,252 1,007,932 996,943 1,097,996
Franchise taxes 456,566 541,841 530,059 570,031 863,183
Sanitation 733,245 780,604 838,542 966,066 1,085,149
Fines and forfeitures 166,355 171,154 174,487 217,411 266,287
Permits and fees 286,421 337,539 319,384 296,003 234,518
Intergovernmental revenue 28,641 34,006 32,273 48,101 46,060
Interest on investments 232,773 153,558 154,195 107,089 193,588
Other revenue 139,525 208,466 219,615 330,313 354,627
$ 7,585,575 $ 7,985,283 $ 8,526,004 $ 9,085,175 $10,007,263
Includes General, Special Revenue,and Debt Service Funds.
Source-Accounting records of the City.
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100
Table 1
1997 1998 1999 2000 2001
$ 5,660,697 $ 5,957,486 $ 6,310,919 $ 7,226,205 $ 8,006,906
1,477,554 1,826,462 1,842,430 2,121,107 2,419,071
} 852,091 801,709 821,943 870,839 988,608
1,017,028 982,432 1,013,415 1,027,028 1,065,400
353,742 304,017 332,659 497,467 550,854
401,720 699,432 635,905 . 970,868 1,192,899
40,055 346,879 553,352 607,963 580,561
238,009 222,586 292,886 399,712 424,412
224,097 525,228 386,084 484,724 483,063
$ 10,264,993 $ 11,666,231 $ 12,189,593 $ 14,205,913 $ 15,711,774
—� 101
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CITY OF FRIEND SWOOD, TEXAS
GENERAL GOVERNMENT EXPENDITURES BY FUNCTION
Last Ten Fiscal Years
Function 1992 1993 1994 1995 1996
General government $ 1,085,683 $ 1,112,882 $ 1,149,344 $ 1,478,817 $ 1,481,710
Public safety 2,478,564 3,061,016 2,814,658 2,846,169 3,206,222
Public works 1,521,841 1,537,447 1,621,896 1,783,738 1,792,014
Sanitation 752,763 823,028 953,186 946,460 954,018
Community development 289,501 326,854 386,976 413,489 463,813
Community services 1,048,606 1,087,039 1,319,689 1,426,792 1,656,146
Capital outlay
Debt service 1,301,928 1,315,242 1,434,052 1,427,360 1,579,490
$ 7,726,123 $ 8,440,480 $ 8,726,615 $ 9,376,365 $ 10,179,395
Includes General, Special Revenue,and Debt Service Funds.
Source-Accounting records of the City.
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Table 2
1997 1998 1999 2000 2001
$ 1,615,770 $ 1,937,096 $ 2,051,684 $ 2,305,916 $ 2,196,226
1 3,329,960 4,043,792 4,166,008 4,265,750 5,115,933
H 1,805,947 1,946,904 1,601,048 2,640,988 1,201,584
939,395 988,422 980,681 1,028,465 998,603
450,916 413,024 522,128 535,084 641,047
1,686,909 1,904,926 2,193,860 2,355,186 2,738,557
{ 652,206 98,987
1,202,192 909,369 698,546 976,659 1,127,645
1 $ 11,031,089 $ 12,143,533 $ 12,213,955 $ 14,760,254 $ 14,118,582
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CITY OF FRIENDSWOOD, TEXAS
PROPERTY TAX LEVIES AND COLLECTIONS
Last Ten Fiscal Years
Percent of
Fiscal Year Tax Total Tax Current Tax Levy
Ended Sept.30, Year Tax Rate Levy Collections Collected
1992 1991 $ 0.6950 $ 4,869,697 $ 4,782,350 98.2%
1993 1992 0.6630 5,179,275 5,081,084 98.1%
1994 1993 0.6630 5,450,155 5,384,023 98.8%
1995 1994 0.6630 5,762,039 5,717,509 99.2%
1996 1995 0.6156 5,610,277 5,568,094 99.2%
1997 1996 0.6045 5,692,451 5,652,357 99.3%
1998 1997 0.5961 5,886,162 5,844,583 99.3%
1999 1998 0.6125 6,292,040 6,229,896 99.0%
2000 1999 0.6385 7,239,468 7,125,877 98.4%
2,001 2,000 0.6385 7,906,786 7,809,643 98.8%
Source-Tax assessor/collector's records.
104
Table 3
H
Outstanding
Total Delinquent
Delinquent Collections as Outstanding Taxes as
Tax Total Tax Percent of Delinquent Percent of
Collections Collections Current Levy # Taxes Levy
$ 120,660 $ 4,903,010 100.7% $ 306,418 6.3%
91,531 5,172,615 99.9% 313,078 6.0%
103,113 5,487,136 100.7% 276,097 5.1%
89,977 5,807,486 100.8% 230,650 4.0%
54,842 • 5,622,936 100.2% 231,973 4.1%
53,927 5,706,284 100.2% 230,990 4.1%
89,625 5,934,208 100.8% 237,656 4.0%
50,435 6,280,331 99.8% 207,417 3.3%
129,563 7,255,440 100.2% 269,184 3.7%
158,585 7,968,228 100.8% 308,477 3.9%
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CITY OF FRIENDSWOOD,TEXAS
ASSESSED AND ESTIMATED Table 4
ACTUAL VALUE OF TAXABLE PROPERTY
Last Ten Fiscal Years
Ratio of
Fiscal Year Estimated Assessed Value
Ended Tax Assessed Actual to Estimated New
Sept.30, Year Value Value Actual Value Construction
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
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
1999 1998 1,027,271,860 1,322,329,377 78% 74,555,875
2000 1999 1,133,824,245 1,458,851,565 78% 121,249,420 •
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2001 2000 1,238,337,688 1,597,212,470 78% 116,968,791 t y
Source-Tax assessor/collector's records.
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CITY OF FRIENDSWOOD,TEXAS
TAX RATE DISTRIBUTION Table 5
Last Ten Fiscal Years
•
Fiscal year Debt Service
Ended Sep.30, Tax Year General Fund Fund Total Tax Rate
1992 1991 $ 0.50900 $ 0.18600 $ 0.69500
1993 1992 0.50160 0.16140 0.66300
1994 1993 0.50250 0.16050 0.66300
1995 1994 0.51400 0.14900 0.66300
1996 1995 0.46800 0.14760 0.61560
1997 1996 0.49610 0.10840 0.60450
1998 1997 0.52760 0.06850 0.59610
1999 1998 0.56100 0.05150 0.61250
2000 1999 0.55420 0.08430 0.63850
2001 2000 0.55470 0.08380 0.63850
_ Source-City's tax ordinances. •
-- Tax rates are per$100 valuation.
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CITY OF FRIENDSWOOD,TEXAS
PROPERTY TAX RATES PER$100 VALUATION 1
DIRECT AND OVERLAPPING L'
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(A)
Tax Rates per$100 valuation
1992 1991 $ 0.6950 $ 1.6500 $ 1.2990 $ 0.1500 $ 0.58620 ,
1993 1992 0.6630 1.7200 1.4256 0.1450 0.59616
1994 1993 0.6630 1.6180 1.4600 0.1450 0.59616
1995 1994 0.6630 1.6090 1.4700 0.1430 0.62199
1996 1995 0.6156 1.5900 1.4700 0.1410 0.64435
1997 1996 0.6045 1.5900 1.5150 0.1430 0.64160
1998 1997 0.5961 1.5750 1.5900 0.1425 0.64170 I
1999 1998 0.6125 1.6720 1.6415 0.1500 0.64170
2000 1999 0.6385 1.5350 1.5986 0.1500 0.64802
2001 2000 0.6385 1.5850 1.7008 0.0155 0.64802
Source-Tax Department records of the various taxing authorities.
(A)-Includes Port of Houston Authority,Harris County Flood Control,and Harris County Hospital District.
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Table 6
Galveston
County
$ 0.4251
0.4650
0.4650
0.4850
0.5200
0.5472
0.5200
0.5200
0.5450
0.5450
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CITY OF FRIENDSWOOD, TEXAS
PRINCIPAL TAXPAYERS Table 7 {l
September 30,2001 U
Percent
of Total
Assessed Assessed
Taxpayer Type of Property Valuation Valuation
1 . Exxon Corporation Oil and Gas $ 27,842,580 2.25%
2 . Southwestern Bell Telephone Utility Company 13,003,400 1.05%
3 . Texas New Mexico Power Utility Company 10,296,420 0.83%
4 . Autumn Creek Developer 8,487,230 0.69%
5 . Friendswood Retirement Living Ltd. Retirement Home 8,369,445 0.68%
6 . Blackhawk Apartments Quail Crossing Apartments 8,212,470 0.66%
7 . Southwest Properties Seahawk Properties 7,800,000 0.63%
8 . Albertson's Albertson's Shopping Center 5,509,370 0.44%
9 . Mystic,Ltd. Nursing Home 3,933,640 0.32%
10 . Coastal Bend Property Developers Developer 3,415,650 0.28% •
is
96,870,205 7.82%
I
All other taxpayers 1,141,467,483 92.18%
Totals $ 1,238,337,688 100.00%
Source-Tax assessor/collector's records.
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CITY OF FRIENDSWOOD,TEXAS
RATIO OF ANNUAL DEBT SERVICE EXPENDITURES Table 8
FOR GENERAL BONDED DEBT
TO TOTAL GENERAL EXPENDITURES
Last Ten Fiscal Years
Ratio of
Interest Total Debt Total Debt Service
Fiscal and Fiscal Service General Requirements
Year Principal Charges Requirements Expenditures to Expenditures
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%
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%
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%
1999 512,594 185,952 698,546 12,213,955 5.72%
2000 525,897 450,762 976,659 14,760,254 6.62%
2001 616,470 511,175 1,127,645 14,118,582 7.99%
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CITY OF FRIENDSWOOD, TEXAS 1
REVENUE BOND COVERAGE
Last Ten Fiscal Years
Operating Net Operating
Number Number. Expenses Revenue
Fiscal of Water of Sewer Operating Before Available for
Year Customers Customers Revenue Depreciation Debt Service
1992 7,521 7,171 $ 3,567,379 $ 2,063,694 $ 1,503,685
1993 7,781 7,475 3,808,566 2,246,969 1,561,597
199'4 8,031 7,709 3,896,444 2,305,953 1,590,491
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
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
2000 9,423 8,979 7,211,716 3,310,375 3,901,341
2001 10,088 9,415 6,599,787 3,253,593 3,346,194
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.
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Table 9
Revenue Bond(A)
Debt Service Requirements
Principal Interest Total Coverage
$ 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
45,000 7,503 52,503 36.98
33,000 3,032 36,032 86.35
33,000 3,032 36,032 74.97
441,600 441,600 8.83
325,000 546,621 871,621 3.84
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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
Fiscal Year Less Debt
Ended Assessed Gross Service Net
Sept.30, Population Value Bonded Debt Funds Bonded Debt
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
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
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
1999 31,192 1,027,271,860 2,798,677 73,344 2,725,333
2000 31,761 1,133,824,245 2,430,219 68,627 2,361,592
2001 32,720 1,238,337,688 2,205,725 77,175 2,128,550
Source-Tax assessor/collector and accounting records of the City.
(1) Reflects reallocation of debt to Enterprise Funds in 1994-95 in the amount of$2.5 million.
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Table 10
Sx Ratio of Net
Bonded Debt Net Bonded
to Assessed Debt
Value Per Capita
0.83% 253
•
1.09% 342
0.93% 297
0.52% (1) 170
0.39% 127
0.33% 111
0.31% 98
0.27% 87
0.21% 74
0.17% 65
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CITY OF FRIENDSWOOD, TEXAS
COMPUTATION OF DIRECT AND OVERLAPPING DEBT Table 11
September 30,2001
Estimated
Percentage
Net Debt Applicable to Debt Applicable
Name of Governmental Unit Outstanding City to City
Friendswood Independent
School District $ 26,879,800 100.00% $ 26,879,800
Clear Creek Independent
School District 290,370,381 6.81% .19,774,223
Galveston County 60,512,062 5.68% 3,437,085
Harris County * 918,474,212 0.15% 1,377,711 �-
Total Net Overlapping Debt 51,468,819 i
City of Friendswood 2,128,550 100.00% 2,128,550
Total Direct and Overlapping Debt $ 53,597,369
* Harris County includes the Harris County Flood Control District,Port of Houston Authority,
Harris County Hospital District and the Harris County Board of Education
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CITY OF FRIENDSWOOD,TEXAS
MISCELLANEOUS STATISTICAL DATA Table 12
September 30,2001 Page 1 of 2
Date of incorporation October 15, 1960
._1
Date of present charter Adopted Home Rule Charter
October 16, 1971
_-. Form of government Council-Manager
Area 22.70 square miles
Miles of Streets
Streets-Paved 105 miles
Streets-Unpaved 1.09 miles
Fire Protection
Number of stations 3
Number of employees(Full-time equivalent) 9.90
Number of volunteers 103
I Fire Prevention
Number of employees(Full-time equivalent) 4.00
Number of volunteers -
Police Protection
Number of stations 1
Number of sworn officers(Full-time equivalent) 40.00
Number of patrol units 14
Recreation
Number of parks 8
Size of parks 189.00
Number of swimming pools 1
Number of tennis courts 4
Miles of storm sewers 84.74 miles
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CITY OF FRIENDSWOOD, TEXAS
MISCELLANEOUS STATISTICAL DATA Table 12
September 30,2001 Page 2 of 2 Li
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Education
Friendswood Independent School District:
Number of teachers 325 _
Number of students 5,261
Clear Creek Independent School District:
Number of teachers 1,585
Number of students 31,043
City Employees
Department heads 6
Employees:
Full-time 156
Part-time(Full-time equivalent) 20 i~;
Total 182
Election
Number of Votes Cast:
Last City Election-Regular Election 2,497
Water - _- _
Source Ground Water Surface Water _
Average daily consumption 449,000 gallons 3,354,000 gallons
Maximum daily consumption 2,913,000 gallons 5,736,000 gallons
Water mains 155 miles
Number of connections 10,088 '
Sewer Blackhawk
Average daily flow 3,050,000 gallons
Maximum daily flow 13,913,000 gallons
Sanitary sewer mains 155 miles 4
Number of connections 9,415
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