HomeMy WebLinkAboutComprehensive Annual Financial Report - FY2009
CITY OF FRIENDSWOOD, TEXAS
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
YEAR ENDED
SEPTEMBER 30, 2009
Officials Issuing Report:
Roger C. Roecker
City Manager
Cindy Edge
Director of Administrative Services
CITY OF FRIENDSWOOD, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED SEPTEMBER 30, 2009
C O N T E NT S
Page(s)
INTRODUCTORY SECTION
Letter of Transmittal i-iv
Principal Officials v
GFOA Certificate of Achievement vi
Organizational Chart vii
FINANCIAL SECTION
Independent Auditor's Report 1-2
Management’s Discussion and Analysis (Unaudited) 3-11
Basic Financial Statements
Government-wide Financial Statements
Statement of Net Assets 12
Statement of Activities 13
Fund Financial Statements
Governmental Funds
Balance Sheet 14
Reconciliation of the Governmental Funds Balance Sheet to
the Statement of Net Assets 15
Statement of Revenues, Expenditures and Changes in Fund Balances 16
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of Governmental Funds to the Statement
of Activities 17
Proprietary Funds
Statement of Net Assets 18-19
Statement of Revenues, Expenses and Changes in Fund Net Assets 20
Statement of Cash Flows 21-22
Notes to Basic Financial Statements 23-50
Required Supplementary Information
Schedule of Funding Progress for Participation in
Texas Municipal Retirement System 51
Schedule of Revenues, Expenditures, and Changes in Fund Balance
Budget and Actual – General Fund 52-57
Notes to Required Supplementary Information 58-59
Combining and Individual Fund Statements and Schedules
Non-major Governmental Funds 60
Combining Balance Sheet 61-62
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances 63-64
CITY OF FRIENDSWOOD, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED SEPTEMBER 30, 2009
C O N T E NT S – CONTINUED
Page(s)
Combining and Individual Fund Statements and Schedules – Continued
Schedule of Revenues, Expenditures and Changes in Fund Balance –
Budget and Actual
Fire/EMS Donation Fund 65
Debt Service Fund 66
STATISTICAL SECTION (Unaudited) Table Page(s)
Financial Trends
Net Assets by Component 1 67
Changes in Net Assets 2 68-69
Fund Balances, Governmental Funds 3 70
Changes in Fund Balances, Governmental Funds 4 71
Revenue Capacity
Assessed Value and Actual Value of Taxable Property 5 72
Direct and Overlapping Property Tax Rates 6 73
Principal Property Tax Payers 7 74
Property Tax Levies and Collections 8 75
Debt Capacity
Ratios of Outstanding Debt by Type 9 76
Ratios of Net General Bonded Debt Outstanding 10 77
Direct and Overlapping Governmental Activities Debt 11 78
Legal Debt Margin Information 12 79
Pledged-Revenue Coverage 13 80
Demographic and Economic Information
Demographic and Economic Statistics 14 81
Principal Employers 15 82
Operating Information
Full-Time Equivalent City Government Employees
by Function/Program 16 83
Operating Indicators by Function/Program 17 84
Capital Asset Statistics by Function/Program 18 85
INTRODUCTORY SECTION
i
ii
iii
iv
v
CITY OF FRIENDSWOOD, TEXAS
PRINCIPAL OFFICIALS AS OF
SEPTEMBER 30, 2009
David J.H. Smith Mayor May-12
Michael E. Barker Council Member - Position No. 1 May-12
Jim Barr Council Member - Position No. 2 May-11
Jim Hill Council Member - Position No. 3 May-12
Leslie Reid Council Member - Position No. 4 May-10
Bill Holbert Council Member - Position No. 5 May-11
Andy Rivera Council Member - Position No. 6 May-10
Roger C. Roecker City Manager
Olson & Olson City Attorney
Deloris McKenzie City Secretary
Cindy S. Edge Director of Administrative Services
James Toney Community Services Director
Morad Kabiri Community Development Director
Terry Byrd Fire Marshal/Emergency Management Coordinator
James W . W oltz Judge - Municipal Court
Robert B. W einers Police Chief
Kazem Hamidian Public W orks Director
vi
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Friendswood
Texas
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
September 30, 2008
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
Executive Director
vii
FINANCIAL SECTION
AN INDEPENDENT
MEMBER OF BAKER TILLY
INTERNATIONAL
WEAVER AND TIDWELL LLP 1
CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS
WWW.WEAVERLLP.COM
HOUSTON
24 GREENWAY PLAZA, SUITE 1800, HOUSTON, TX 77046
P: (713) 850 8787 F: (713) 850 1673
INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor,
City Council and City Manager
City of Friendswood, Texas
We have audited the accompanying financial statements of the governmental activities, the
business-type activities, the discretely presented component unit, each major fund, and the
aggregate remaining fund information of the City of Friendswood, Texas (the City) as of and for
the year ended September 30, 2009, which collectively comprise the City’s basic financial
statements as listed in the table of contents. These financial statements are the responsibility of
the City’s management. Our responsibility is to express an opinion on these financial
statements based on our audit. W e did not audit the financial statements of the West Ranch
Management District, which represents 100 percent of the assets, net assets and revenues of
the discretely presented component unit. Those financial statements were audited by other
auditors whose report thereon has been furnished to us, and our opinion, insofar as it relates to
the amounts included for the West Ranch Management District, is based on the report of the
other auditors.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The financial statements of the West
Ranch Management District were not audited in accordance with Governmental Auditing
Standards. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a reasonable basis
for our opinions.
In our opinion, based on our audit and the report of other auditors, the financial statements
referred to above present fairly, in all material respects, the respective financial position of the
governmental activities, the business-type activities, the discretely presented component unit,
each major fund, and the aggregate remaining fund information of the City of Friendswood,
Texas as of September 30, 2009, and the respective changes in financial position and cash
flows, where applicable, thereof for the year then ended in conformity with accounting principles
generally accepted in the United States of America.
2
To the Honorable Mayor,
City Council and City Manager
City of Friendswood, Texas
Page 2
In accordance with Government Auditing Standards, we have also issued our report dated
March 24, 2010, on our consideration of the City’s internal control over financial reporting and
our tests of its compliance with certain provisions of laws, regulations, contracts and grant
agreements and other matters. The purpose of that report is to describe the scope of our testing
of internal control of financial reporting and compliance and the results of that testing, and not to
provide an opinion on the internal control over financial reporting or on compliance. That report
is an integral part of an audit performed in accordance with Government Auditing Standards and
should be considered in assessing the results of our audit.
The management’s discussion and analysis (on pages 3 through 11), the Schedule of Funding
Progress for Participation in Texas Municipal Retirement System (on page 51) and the
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual –
General Fund (on pages 52 through 57) are not a required part of the basic financial statements
but are supplementary information required by accounting principles generally accepted in the
United States of America. W e and the other auditors have applied certain limited procedures,
which consisted principally of inquiries of management regarding the methods of measurement
and presentation of the required supplementary information. However, we did not audit the
information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City’s basic financial statements. The introductory section, combining
and individual nonmajor fund statements and schedules, and statistical section are presented
for purposes of additional analysis and are not a required part of the basic financial statements.
The combining and individual nonmajor fund statements and schedules have been subjected to
the auditing procedures applied in the audit of the basic financial statements and, in our opinion,
are fairly stated in all material respects in relation to the basic financial statements taken as a
whole. The introductory and statistical sections have not been subjected to the auditing
procedures applied in the audit of the basic financial statements and, accordingly, we express
no opinion on them.
WEAVER AND TIDW ELL, L.L.P.
Houston, Texas
March 24, 2010
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Management’s Discussion and Analysis
As Management of the City of Friendswood, we offer readers of the City’s financial statements
this narrative overview and analysis of the financial activities of the City for the fiscal year ended
September 30, 2009. This information is not intended to be a complete statement of the City’s
financial condition. We recommend and encourage readers to consider the information
presented here in conjunction with the accompanying transmittal letter and basic financial
statements.
FINANCI AL HIGHLIGHTS
• The assets of the City of Friendswood exceeded its liabilities at the close of the
most recent fiscal year by $109,613,917 (net assets). Of this amount, $9,892,077
is unrestricted net assets for governmental activities and $6,730,812 for business-
type activities.
• The City’s net assets increased by $1,070,523. This resulted in an increase of
$1,847,507 in unrestricted net assets offset by a decrease of $246,120 in
restricted assets and a decrease of $530,864 in net assets invested in capital
assets net of related debt.
• As of the close of the current fiscal year, the City of Friendswood’s governmental
funds reported combined ending fund balances of $12,689,709. Of the ending
fund balance, $2,415,006 is restricted under laws external to the City for specific
purposes (e.g., capital projects, debt service); $227,246 is designated by the City
for specific purposes; $1,089,113 reserved for encumbrances and prepaid items;
and $8,958,344 is unreserved and available to meet the government’s ongoing
obligations in accordance with the City’s fund designation and fiscal policies.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City’s basic financial
statements. The City’s basic financial statements comprise three components: 1) government-
wide financial statements, 2) fund financial statements, and 3) notes to the financial statements.
This report also contains other supplementary information in addition to the basic financial
statements themselves.
Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad
overview of the City’s finances, in a manner similar to a private-sector business.
The Statement of Net Assets presents information on all of the City’s assets and liabilities, with the
difference between the two reported as net assets. Over time, increases or decreases in net
assets may serve as a useful indicator of whether the financial position of the City is improving or
deteriorating. This statement combines and consolidates governmental funds current financial
resources (short-term spendable resources) with capital assets and long-term obligations. Other
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non-financial factors should also be taken into consideration, such as changes in the City’s
property tax base and the condition of the City’s infrastructure (i.e. roads, drainage improvements,
storm sewer and water lines, etc.), to assess the overall financial condition of the City.
The Statement of Activities presents information showing how the City’s net assets changed during
the fiscal year. All of the current year’s revenues and expenses are taken into account regardless
of when cash is received or paid. Thus, revenues and expenses are reported in this statement for
some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and
earned but not used compensated absences). Both the statement of net assets and the statement
of activities are prepared utilizing the accrual basis of accounting as opposed to the modified
accrual basis used in prior reporting models.
Both of the government-wide financial statements distinguish functions of the City that are
principally supported by taxes and intergovernmental revenues (governmental activities) from
functions that are intended to recover all or a significant portion of their costs through user fees
(business-type activities).
• Governmental activities include most of the City’s basic services, (general
government, public safety, community development and public works and
community services). Property taxes, sales taxes, and franchise fees primarily
finance these activities.
• Business-type activities include the City’s water and sewer system. Charges
for services covers all or most of the cost for these services.
• Component Unit activities include activities of The W est Ranch Management
District.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that
have been segregated for specific activities or objectives. Fund accounting is used by state and
local governments to control and manage money for particular purposes and to ensure finance-
related legal requirements. The City uses two fund types – governmental and proprietary.
• Governmental funds – Similar to the governmental activities in the
government-wide financial statements. However, unlike the government-wide
financial statements, governmental funds focus on current sources and uses of
spendable resources. The governmental fund statement provides a detailed
short-term view of the City’s general government operations and helps you
determine whether resources are available in the near future to finance City
programs. Comparing the information presented for governmental funds with
the information presented for governmental activities in the government-wide
financial statements will help the reader to better understand the long-term
impact of the government’s near-term financing decisions. The governmental
funds balance sheet, statement of revenue and expenditures, and changes in
fund balances include a reconciliation to provide such comparison.
5
The City maintains nine governmental funds. Information is presented
separately in the governmental funds balance sheet and the governmental
fund statement of revenues, expenditures, and changes in fund balances for
the General Fund and the Debt Service Fund; these funds are considered to
be major funds. The other seven funds are combined into a single,
aggregated presentation. Individual fund data for each of these non-major
governmental funds is provided in the form of combining statements found in
this report.
• Proprietary funds – The City maintains two types of proprietary funds. The
City uses the Enterprise Fund for water and sewer operations. The Enterprise
Fund reports the same functions presented as business-type activities in the
government-wide financial statement. The second proprietary fund is the
Internal Service Fund. This fund is used to account for fleet management
services. The Internal Service Fund is included within the governmental
activities in the government-wide financial statements.
Proprietary fund financial statements provide the same type of information as
the government-wide financial statements, with more detail and include the
Internal Service Fund type activity.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data
provided in the government-wide and fund financial statements.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents
combining and individual fund statements and schedules that further support the information in the
financial statements. These statements are presented immediately following the notes to the
financial statements.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
The City’s assets exceeded liabilities by $109.6 million as of September 30, 2009. The largest
portion of the City’s net assets (82.5%) reflects its investments in capital assets (e.g., land,
buildings, equipment, improvements, construction in progress and infrastructure); less any
related debt used to acquire those assets that are still outstanding. The City uses these capital
assets to provide services to citizens; therefore, these assets are not available for future
spending. It should be noted that the resources needed to repay this debt must be provided
from other sources, since the capital assets themselves cannot be used to liquidate these
liabilities.
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CITY OF FRIENDSWOOD’S NET ASSETS
2009 2008 2009 2008 2009 2008
Current and other assets 15,174,508$ 19,980,784$ 21,713,510$ 9,481,699$ 36,888,018$ 29,462,483$
Capital assets 85,543,163 86,102,752 52,697,045 48,303,304 138,240,208 134,406,056
Total assets 100,717,671 106,083,536 74,410,555 57,785,003 175,128,226 163,868,539
Long-term liabilities 16,437,012 16,117,119 42,162,606 31,176,917 58,599,618 47,294,036
Other liabilities 2,613,724 6,053,142 4,300,967 1,977,967 6,914,691 8,031,109
Total liabilities 19,050,736 22,170,261 46,463,573 33,154,884 65,514,309 55,325,145
Net assets:
Invested in capital assets,
net of related debt 69,313,348 70,591,236 21,122,644 20,375,620 90,435,992 90,966,856
Restricted 2,461,510 2,773,910 93,526 27,246 2,555,036 2,801,156
Unrestricted 9,892,077 10,548,129 6,730,812 4,227,253 16,622,889 14,775,382
Total net assets 81,666,935$ 83,913,275$ 27,946,982$ 24,630,119$ 109,613,917$ 108,543,394$
Governmental Activities Business-type Activities Totals
Combined governmental and business-type activities increased the City’s net assets by
$1,070,523 in 2009. The following table provides a summary of the City’s operations for the
year ended September 30, 2009. The Governmental activities decreased the City of
Friendswood’s net assets by ($2,246,340). Business-type activities increased the City’s net
assets by $3,316,863. The most significant decrease in governmental activities and increase in
the business type activities net assets is related to the transfer of funds of $1,372,468 from the
tax debt service fund to the water sewer debt service fund. The principal and interest payments
for the 2005 refunding bonds are budgeted and expended out of the tax debt service fund.
However, the liability for the debt is recorded in the water sewer debt service fund.
The remaining decrease of ($873,872) in the governmental net assets is related to the increase
in the City’s net pension obligation of ($224,845) and to the City implementing GASB 45 in the
current fiscal year resulting in an Other Post-Employment Benefit (OPEB) obligation of
($272,634). The remaining decrease can be attributed to expenditures from Hurricane Ike that
were not 100% reimbursable. The remaining increase of $1,944,395 in the business-type net
assets is due to revenue collections for future capital projects and debt reduction.
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CITY OF FRIENDSWOOD’S CHANGES IN NET ASSETS
2009 2008 2009 2008 2009 2008
Revenues:
Program revenues:
Charges for services 2,387,729$ 2,170,183$ 12,028,895$ 8,624,546$ 14,416,624$ 10,794,729$
Operating grants
and contributions 5,755,038 4,021,908 - - 5,755,038 4,021,908
Capital grants
and contributions - - - - - -
General revenues:
Property taxes 13,481,500 12,512,950 - - 13,481,500 12,512,950
Sales taxes 3,871,995 3,767,526 - - 3,871,995 3,767,526
Franchise taxes 1,363,221 1,317,166 - - 1,363,221 1,317,166
Other taxes 28,859 25,429 - - 28,859 25,429
Investment earnings 166,492 648,301 128,338 531,758 294,830 1,180,059
Miscellaneous 218,804 73,026 48,678)( - 170,126 73,026
Total revenues 27,273,638 24,536,489 12,108,555 9,156,304 39,382,193 33,692,793
Expenses:
General government 5,164,623 4,339,620 - - 5,164,623 4,339,620
Public safety 14,929,941 12,652,812 - - 14,929,941 12,652,812
Community development
and public works 5,292,000 4,921,298 - - 5,292,000 4,921,298
Community services 4,002,165 3,841,387 - - 4,002,165 3,841,387
Water and sewer - - 6,640,062 6,523,501 6,640,062 6,523,501
Interest on long-term
debt 678,705 803,733 1,604,174 1,543,859 2,282,879 2,347,592
Total expenses 30,067,434 26,558,850 8,244,236 8,067,360 38,311,670 34,626,210
Increases/(Decrease) in net assets
before transfers 2,793,796)( 2,022,361)( 3,864,319 1,088,944 1,070,523 933,417)(
Transfers 547,456 981,016 547,456)( 981,016)( - -
Change in net assets 2,246,340)( 1,041,345)( 3,316,863 107,928 1,070,523 933,417)(
Net assets, beginning 83,913,275 84,954,620 24,630,119 24,522,191 108,543,394 109,476,811
Prior period adjustment - - - - - -
Net assets, ending 81,666,935$ 83,913,275$ 27,946,982$ 24,630,119$ 109,613,917$ 108,543,394$
Governmental Activities Business-type Activities Totals
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FINANCIAL ANALYSIS OF THE GOVERNMENT’S FUNDS
Governmental Funds
At the end of the current fiscal year, the City’s governmental funds reported combined ending
fund balances of $12,689,709. Approximately 71% of this amount, $8,958,344, is unreserved,
undesignated fund balance; however, $5.0 million is set aside for the 90-day operating reserve,
as set forth in the City’s financial policies. $3,731,365 is reserved or designated as follows:
Reserves (16%)
• Encumbrances $1,009,047
• Prepaid expense 80,066
• Debt service 982,556
Designations (2%)
• Projects $227,246
Legally restricted (11%)
• Special revenue funds $1,075,343
• Capital projects 326,600
• Permanent Funds 30,507
In the General Fund, fund balance decreased by ($342,675). This decrease is due primarily to
a decrease in investment earnings of ($348,463). In the Capital Projects Fund, fund balance
decreased by ($203,102) as a result of capital outlay of ($214,685). In the Debt Service Fund,
fund balance decreased by ($1,121,820). This decrease is a result of a transfer to the water
sewer debt service fund to cover the principal and interest payments on the 2005 refunding
bonds which are budgeted in the tax debt service fund.
Proprietary Fund
Unrestricted net assets of the respective proprietary funds are Enterprise, (water and sewer), of
$6,730,812 and Internal Service Fund (vehicle replacement fund), of $510,600. The net assets
of the water and sewer fund increased $3,316,863. This increase is due to an increase in
charges for services of $3,404,349 and an increase in transfers in of $1,367,468 offset by an
increase in the amount transferred to the governmental funds of ($938,908) and a decrease in
investment earnings of ($403,420). The net assets of the internal service fund increased
$206,953.
General Fund Budgetary Highlights
The City made revisions to the original appropriations approved by the City Council. These
changes resulted in an increase in budgeted expenditures from the original budget of
$1,052,036 or 5.14%. The majority of this increase was the appropriation of encumbrances
($962,956) from the prior year.
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CAPITAL ASSETS
The City of Friendswood’s investment in capital assets (net of accumulated depreciation) for its
governmental and business-type activities as of September 30, 2009, is $138,240,208 The
investment in capital assets includes land, buildings and improvements, equipment,
infrastructure, water rights and construction in progress.
This year’s major capital events during the current fiscal year included the following:
• The Glenshannon Drainage project had reached substantial completion. The
total cost of the project as of September 30, 2009 was approximately
$930,000.
• Completed construction of the Fire Station #4 for a total of $1.8 million
• Completed Clover Acres Drainage with current year costs of $165,695 and
prior cost year cost of $1,033,021.
• Construction phase began on the following water and sewer projects:
Deepwood Force Main ($2,254,791), Deepwood Lift Station ($1,556,103) and
the 16” waterline from Sunset to water well #4 ($1,870,667).
• The following water and sewer projects were completed during the year: South
Friendswood Force Main Diversion ($265,530), Sunmeadow Lift Station
($787,118) and Blackhawk Blvd W aterline Replacement ($235,000).
CITY OF FRIENDSWOOD’S CAPITAL ASSETS AT YEAR-END
2009 2008 2009 2008 2009 2008
Land 24,007,398$ 23,950,721$ 716,818$ 718,493$ 24,724,216$ 24,669,214$
Buildings and
improvements 20,250,990 17,733,705 - - 20,250,990 17,733,705
Equipment 3,220,055 2,166,274 430,143 506,460 3,650,198 2,672,734
Infrastructure 35,178,077 36,636,913 25,754,439 25,814,124 60,932,516 62,451,037
Water rights - - 19,716,695 19,717,545 19,716,695 19,717,545
Construction in progress 2,886,643 5,615,139 6,078,950 1,546,682 8,965,593 7,161,821
Total capital assets 85,543,163$ 86,102,752$ 52,697,045$ 48,303,304$ 138,240,208$ 134,406,056$
Governmental Activities Business-type Activities Totals
Additional information on the City’s capital assets can be found in the notes on pages 35 and 36
of this report.
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DEBT ADMINISTRATION
At the end of the current fiscal year, the City of Friendswood had a total bonded debt and capital
lease obligation of $59,552,518.
CITY OF FRIENDSWOOD’S OUTSTANDING DEBT AT YEAR-END
2009 2008 2009 2008 2009 2008
General obligations 15,445,000$ 16,065,000$ 865,000$ 1,680,000$ 16,310,000$ 17,745,000$
Revenue bonds payable - - 42,260,000 30,355,000 42,260,000 30,355,000
Capital leases 982,518 16,351 - - 982,518 16,351
16,427,518$ 16,081,351$ 43,125,000$ 32,035,000$ 59,552,518$ 48,116,351$
Governmental Activities Business-type Activities Totals
The City’s General Obligation and Revenue Bond ratings are listed below:
Standard
& Poor's
General Obligation Bonds AA-
Revenue Bonds AA-
Additional information on the City’s outstanding debt can be found on pages 37 through 41 of
this report.
ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES
The entire area surrounding Friendswood continues to experience unprecedented growth. The
City’s current population is estimated to be 37,653. Friendswood is expected to reach build out
sometime before 2020 with an estimated population of 57,000. The City is continuing to focus
on Economic Development initiatives, including the revitalization of downtown and a new large
residential and commercial development called W est Ranch. The West Ranch residential
development is currently under way, with commercial construction scheduled to follow as the
area’s residential population grows.
The City’s largest single source of revenue in the General Fund continues to be ad valorem
taxes. The tax rate remained constant at $.5797 for fiscal year 2010. This rate consists of a
maintenance and operations (M&O) tax rate of $.4997 and an Interest and Sinking (debt
service) tax rate of $.0800. The rate was set based on a net assessed value of $2,271,459,062.
This is an increase of $29,280,767 in taxable value. This increase is a result of new
construction in the City. This additional value results in an M&O levy increase of $169,175. The
City’s financial management policy sets the guideline to maintain the fund balance and retained
earnings of the various operating funds at levels sufficient to protect the City’s creditworthiness
as well as its financial position from unforeseeable emergencies.
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The City’s second largest source of revenue in the General Fund is Sales Tax. The City
anticipates an increase in this revenue stream from the prior year and has adjusted the budget
from $3,750,000 to $3,923,944. The other significant general fund revenues are also expected
to show positive growth. Franchise fees budget has been increased from $1,345,700 to
$1,350,440 and the budget for municipal court fines has been adjusted from $1,080,000 to
$1,125,051. If all projections are accurate, the total General Fund undesignated fund balance is
estimated to be approximately $5.8 million at September 30, 2010.
Water revenues are budgeted at $5,365,040, which is an additional $653,328 in revenues, or
13.9%. Sewer revenues are budgeted at $3,937,341. This represents an increase of $105,299
or 2.7%. W ater and sewer working capital is expected to be $5.46 million at the end of fiscal
year 2010.
Pursuant to the City’s financial management policy, funds in excess of the 90-day operating
reserve are designated for future capital improvements.
CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, customers, investors, and creditors with
a general overview of the City’s finances and to show the City’s accountability for the money it
receives. If you have questions about this report or need additional information, contact
Administrative Services, P. O. Box 1288, Friendswood, Texas 77549-1288, or call Cindy S.
Edge 281-996-3224, or email cedge@friendswood.com.
BASIC FINANCIAL STATEMENTS
CITY OF FRIENDSWOOD, TEXAS
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2009
The Notes to the Basic Financial Statements
are an integral part of these statements.
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Primary Government
Governmental Business-type Component
Activities Activities Total Unit
ASSETS
Cash and investments 8,978,315$ 6,579,973$ 15,558,288$ 243,267$
Receivables (net of allowances for uncollectibles)
Taxes 1,384,613 - 1,384,613 4,379
Customer accounts 183,278 1,877,653 2,060,931 -
Other 278,354 13,889 292,243 788
Due from other governments 4,068,578 - 4,068,578 -
Prepaid items 80,066 32,408 112,474 4,313
W orking capital deposit - 288,862 288,862 -
Deferred charges 201,304 531,402 732,706 -
Restricted cash and investments - 12,389,323 12,389,323 -
Deferred contributions - - - 2,356,939
Capital assets
Land 24,007,398 716,818 24,724,216 -
Buildings and improvements 29,740,200 - 29,740,200 -
Machinery and equipment 9,303,063 2,957,043 12,260,106 -
Infrastructure 67,671,399 - 67,671,399 -
W ater and sewer system - 47,084,957 47,084,957 -
Construction in progress 2,886,643 6,078,950 8,965,593 -
W ater rights - 19,716,695 19,716,695 -
Accumulated depreciation (48,065,540) (23,857,418) (71,922,958) -
Total capital assets, net 85,543,163 52,697,045 138,240,208 -
Total assets 100,717,671$ 74,410,555$ 175,128,226$ 2,609,686$
LIABILITIES
Accounts payable 524,975$ 2,379,143$ 2,904,118$ 14,402$
Accrued liabilities 663,908 319,937 983,845 -
Accrued interest 76,478 210,662 287,140 -
Customer deposits - 289,349 289,349 -
Net pension obligation 224,845 - 224,845 -
Net OPEB obligation 272,634 - 272,634 -
Noncurrent liabilities:
Due within one year 850,884 1,101,876 1,952,760 -
Due in more than one year 16,437,012 42,162,606 58,599,618 3,154,670
Total liabilities 19,050,736 46,463,573 65,514,309 3,169,072
NET ASSETS
Invested in capital assets, net of related debt 69,313,348 21,122,644 90,435,992 -
Restricted for:
Debt service 952,951 - 952,951 -
Public safety 320,472 - 320,472 -
Community development and public works 1,188,087 - 1,188,087 -
Capital improvements - 93,526 93,526 -
Unrestricted 9,892,077 6,730,812 16,622,889 (559,386)
Total net assets 81,666,935$ 27,946,982 109,613,917$ (559,386)$
CITY OF FRIENDSWOOD, TEXAS STATEMENT OF ACTIVITIES YEAR ENDED SEPTEMBER 30, 2009 The Notes to the Basic Financial Statements are an integral part of these statements. 13 Program RevenuesOperating Capital Primary GovernmentCharges forGrants andGrants andGovernmentalBusiness - TypeComponentProgram ActivitiesExpensesServicesContributionsContributionsActivitiesActivitiesTotalUnitPrimary governmentGovernmental activitiesGeneral government5,164,623$ 1,327,484$ - $ - $ (3,837,139)$ - $ (3,837,139)$ - $ Public safety14,929,941 46,773 5,740,242 - (9,142,926) - (9,142,926) - Community development and public works5,292,000 602,265 - - (4,689,735) - (4,689,735) - Community services4,002,165 411,207 14,796 - (3,576,162) - (3,576,162) - Interest on long-term debt678,705 - - - (678,705) - (678,705) - Total governmental activities30,067,434 2,387,729 5,755,038 - (21,924,667) - (21,924,667) - Business-type activitiesWater and sewer8,244,236 12,028,895 - - - 3,784,659 3,784,659 - Total business-type activities8,244,236 12,028,895 - - - 3,784,659 3,784,659 - Total primary government38,311,670$ 14,416,624$ 5,755,038$ - $ (21,924,667)$ 3,784,659$ (18,140,008)$ - $ Component unitWest Ranch Management District139,780 - - 581,890 - - - 442,110 139,780$ - $ - $ 581,890$ - $ - $ - $ 442,110$ GENERAL REVENUESTaxes:Property taxes, levied for general purposes11,869,886$ - $ 11,869,886$ 313,887$ Property taxes, levied for debt service1,611,614 - 1,611,614 - Sales taxes3,871,995 - 3,871,995 - Franchise taxes1,363,221 - 1,363,221 - Other28,859 - 28,859 - Penalties and interest- - - - Interest on investments166,492 128,338 294,830 1,007 Gain (loss) on sale of capital assets4,320 (48,678) (44,358) - Miscellaneous214,484 - 214,484 - Transfers547,456 (547,456) - - Total general revenues and transfers19,678,327 (467,796) 19,210,531 314,894 Change in net assets(2,246,340) 3,316,863 1,070,523 757,004 NET ASSETS, beginning of year83,913,275 24,630,119 108,543,394 (1,316,390) NET ASSETS, end of year81,666,935$ 27,946,982$ 109,613,917$ (559,386)$ Changes in Net AssetsNet (Expense) Revenue and
CITY OF FRIENDSWOOD, TEXAS
BALANCE SHEET – GOVERNMENTAL FUNDS
SEPTEMBER 30, 2009
The Notes to the Basic Financial Statements
are an integral part of these statements.
14
Other Total
General Debt Governmental Governmental
Fund Service Funds Funds
Cash and investments 5,536,598$ 981,570$ 1,949,908$ 8,468,076$
Receivables, net of allowance
Taxes 1,337,740 46,873 - 1,384,613
Customer accounts 153,661 - 29,617 183,278
Other 272,694 986 4,313 277,993
Receivable from other governments 4,068,578 - - 4,068,578
Prepaids and deposits 80,066 - - 80,066
Total assets 11,449,337$ 1,029,429$ 1,983,838$ 14,462,604$
Liabilities
Accounts payable 430,453$ - $ 94,522$ 524,975$
Accrued liabilities 613,794 - 50,114 663,908
Deferred revenue 533,096 46,873 4,043 584,012
Total liabilities 1,577,343 46,873 148,679 1,772,895
Fund Balances
Reserved for
Encumbrances 606,338 - 402,709 1,009,047
Prepaid items 80,066 - - 80,066
Debt service - 982,556 - 982,556
Unreserved, reported in
General fund
Designated for projects 227,246 - - 227,246
Undesignated 8,958,344 - - 8,958,344
Capital projects fund - - 326,600 326,600
Special revenue funds - - 1,075,343 1,075,343
Permanent fund - - 30,507 30,507
Total fund balances 9,871,994 982,556 1,835,159 12,689,709
Total liabilities and fund balances 11,449,337$ 1,029,429$ 1,983,838$ 14,462,604$
ASSETS
LIABILITIES AND FUND BALANCES
CITY OF FRIENDSWOOD, TEXAS
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
SEPTEMBER 30, 2009
The Notes to the Basic Financial Statements
are an integral part of these statements.
15
Total fund balances - governmental funds 12,689,709$
Capital assets used in governmental activities are not current financial
resources and therefore are not reported in the governmental funds
balance sheet.84,936,776
Costs associated with the issuance of governmental long term debt
are expensed when incurred in the fund statements and capitalized
and amortized over the life of the debt in the government-wide
financial statements.201,304
The accruals for net other post employment benefits and net pension
obligation do not require the use of current financial resources and
are therefore not recorded in the governmental fund financial
statements.(497,479)
Interest payable on long term debt does not require current financial
resources;therefore,interest payable is not reported as a liability in
the governmental funds balance sheet.(76,478)
An internal service fund is used by management to charge the cost of
certain activities,such as fleet management,to individual funds.The
assets and liabilities of the internal service fund are included in the
governmental activities in the statement of net assets.1,116,987
Revenues earned but not available within sixty days of the year end
are not recognized as revenue on the fund financial statements.584,012
Long-term liabilities,including bonds payable,capital leases payable,
bond premiums and compensated absences are not due and payable
in the current period and therefore are not reported in the fund
financial statements.(17,287,896)
Net assets of governmental activities 81,666,935$
Amounts reported for governmental activities in the statement of net
assets are different because:
CITY OF FRIENDSWOOD, TEXAS
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES – GOVERNMENTAL FUNDS
YEAR ENDED SEPTEMBER 30, 2009
The Notes to the Basic Financial Statements
are an integral part of these statements.
16
Other Total
General Debt Governmental Governmental
Fund Service Funds Funds
Revenues
Property taxes 11,881,805$ 1,618,118$ - $ 13,499,923$
Sales and alcohol taxes 3,900,854 - - 3,900,854
Franchise taxes 1,363,221 - - 1,363,221
Fines and forfeitures 1,096,329 - 46,773 1,143,102
Permits and fees 807,315 - 159,482 966,797
Intergovernmental 5,779,507 - 14,796 5,794,303
Investment earnings 119,164 33,019 8,923 161,106
Donations 38,200 - 234,711 272,911
Miscellaneous 34,273 - 175 34,448
Total revenues 25,020,668 1,651,137 464,860 27,136,665
Expenditures
Current
General government 4,172,150 - 5,912 4,178,062
Public safety 14,524,882 - 192,522 14,717,404
Community development
and public works 3,406,881 - - 3,406,881
Community services 3,438,275 - 1,200 3,439,475
Capital outlay 2,211,975 - 277,870 2,489,845
Debt service
Principal - 716,676 70,617 787,293
Interest and fiscal charges - 683,813 7,825 691,638
Total expenditures 27,754,163 1,400,489 555,946 29,710,598
Excess (deficiency) of
revenues over expenditures (2,733,495) 250,648 (91,086) (2,573,933)
Other financing sources (uses)
Insurance recoveries 123,707 - - 123,707
Capital lease proceeds 1,133,460 - - 1,133,460
Transfers in 1,188,405 - 910,000 2,098,405
Transfers out (54,752) (1,372,468) (186,750) (1,613,970)
Total other financing
sources (uses)2,390,820 (1,372,468) 723,250 1,741,602
Net change in fund balances (342,675) (1,121,820) 632,164 (832,331)
Fund balances, beginning of year 10,214,669 2,104,376 1,202,995 13,522,040
Fund balances, end of year 9,871,994$ 982,556$ 1,835,159$ 12,689,709$
CITY OF FRIENDSWOOD, TEXAS
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
YEAR ENDED SEPTEMBER 30, 2009
The Notes to the Basic Financial Statements
are an integral part of these statements.
17
Net change in fund balances - total governmental funds (832,331)$
Governmental funds report capital outlays as expenditures.However,
in the statement of activities the cost of those assets is allocated over
their estimated useful lives and reported as depreciation expense.
This is the amount of capital assets recorded in the current period.2,221,712
Depreciation expense on capital assets is reported in the statement of
activities but does not require the use of current financial resources.
Therefore,depreciation expense is not reported as expenditures in the
governmental funds.(2,947,114)
The issuance of long term debt (e.g.bonds,capital leases)provides
current financial resources to governmental funds,while the
repayment of the principal of long-term debt consumes the current
f inancial resources of governmental funds.Neither transaction,
however,has any effect on net assets.Also,governmental funds
report the effect of issuance costs,premiums,discounts,and similar
items when debt is first issued,whereas the amounts are deferred
and amortized in the statement of activities.This amount is the net
effect of these differences in the treatment of long-term debt and
related items.(313,892)
Current year changes in long term liability for compensated absences
do not require the use of current financial resources;therefore,are
not reported as expenditures in governmental funds.(52,453)
Current year changes in accrued interest payable do not require the
use of current financial resources;therefore,it is not reported as an
expenditure in the governmental funds.(19,342)
Certain unearned revenues in the government-wide statement of
activities that do not provide current financial resources are not
reported as revenue in the governmental funds.(12,394)
The accruals for net other post employment benefits and net pension
obligation do not require the use of current financial resources and are
therefore not recorded in the governmental fund financial statements.(497,479)
An internal service fund is used by management to charge the cost of
f leet management to individual funds.The net revenue of the internal
service fund is included in the governmental activities in the statement
of net assets.206,953
Change in net assets of governmental activities 2,246,340)($
Amounts reported for governmental activities in the statement of activities
are different because:
CITY OF FRIENDSWOOD, TEXAS
STATEMENT OF NET ASSETS – PROPRIETARY FUNDS
SEPTEMBER 30, 2009
(1 of 2)
The Notes to the Basic Financial Statements
are an integral part of these statements.
18
Business Type
Activities Governmental
Enterprise Fund Activities
Water and Sewer Internal Service
Current assets
Cash and investments 6,579,973$ 510,239$
Accounts receivable, net of allowance
Customer accounts 1,877,653 -
Other 13,889 361
Prepaids and other assets 32,408 -
Restricted cash and investments 12,389,323 -
Total current assets 20,893,246 510,600
Noncurrent assets
W orking capital deposit 288,862 -
Deferred charges 531,402 -
Capital assets
Land 716,818 -
Machinery and equipment 2,957,043 1,509,785
W ater and sewer system 47,084,957 -
Construction in progress 6,078,950 -
W ater rights 19,716,695 -
Accumulated depreciation (23,857,418) (903,398)
Net capital assets 52,697,045 606,387
Total noncurrent assets 53,517,309 606,387
Total assets 74,410,555 1,116,987
ASSETS
CITY OF FRIENDSWOOD, TEXAS
STATEMENT OF NET ASSETS – PROPRIETARY FUNDS
SEPTEMBER 30, 2009
(2 of 2)
The Notes to the Basic Financial Statements
are an integral part of these statements.
19
Business Type
Activities Governmental
Enterprise Fund Activities
Water and Sewer Internal Service
Current liabilities
Accounts payable 2,379,143$ - $
Accrued liabilities 319,937 -
Accrued interest 210,662 -
Deposits 289,349 -
Compensated absences 15,414 -
Bonds and other long-term debt payable 1,086,462 -
Total current liabilities 4,300,967 -
Noncurrent liabilities
Compensated absences 74,706 -
Bonds and other long-term debt payable 42,087,900 -
Total noncurrent liabilities 42,162,606 -
Total liabilities 46,463,573 -
Invested in capital assets, net of related debt 21,122,644 606,387
Restricted for capital improvements 93,526 -
Unrestricted 6,730,812 510,600
Total net assets 27,946,982$ 1,116,987$
LIABILITIES
NET ASSETS
CITY OF FRIENDSWOOD, TEXAS
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
YEAR ENDED SEPTEMBER 30, 2009
The Notes to the Basic Financial Statements
are an integral part of these statements.
20
Business Type
Activities Governmental
Enterprise Fund Activities
Water and Sewer Internal Service
Operating revenues
Charges for services 12,028,895$ 318,825$
Total operating revenues 12,028,895 318,825
Operating expenses
Personnel services 1,625,858 -
Sewer operations 1,295,729 -
W ater purchases 879,366 -
Repairs and maintenance 578,938 -
Supplies 129,584 16,967
Other services and charges 739,913 -
Depreciation 1,390,674 167,632
Total operating expenses 6,640,062 184,599
Operating income 5,388,833 134,226
Nonoperating revenues (expenses)
Investment income 128,338 5,386
Gain (loss) on sale of capital assets (48,678) 4,320
Interest expense and fiscal charges (1,604,174) -
Total nonoperating revenues (expenses)(1,524,514) 9,706
Income before transfers 3,864,319 143,932
Transfers in 1,372,468 63,021
Transfers out (1,919,924) -
Change in net assets 3,316,863 206,953
Net assets, beginning of year 24,630,119 910,034
Net assets, end of year 27,946,982$ 1,116,987$
CITY OF FRIENDSWOOD, TEXAS
STATEMENT OF CASH FLOWS – PROPRIETARY FUNDS
YEAR ENDED SEPTEMBER 30, 2009
The Notes to the Basic Financial Statements
are an integral part of these statements.
21
Business Type
Activities Governmental
Enterprise Fund Activities
Water and Sewer Internal Service
OPERATING ACTIVITIES
Cash received from customers 11,772,173$ 321,404$
Cash payments to suppliers for goods
and services (1,480,853) (17,345)
Cash payments to employees for services (1,610,910) -
Net cash provided by operating activities 8,680,410 304,059
NONCAPITAL FINANCING ACTIVITIES
Transfer in 1,372,468 63,021
Transfer out (1,919,924) -
Net cash provided by (used in)
noncapital financing activities (547,456) 63,021
CAPITAL AND RELATED FINANCING ACTIVITIES
Proceeds from the issuance of debt 11,904,997 -
Capital expenditures (5,833,060) (329,126)
Repayment of debt (1,030,000) -
Interest paid on debt (1,502,350) -
Net cash provided by (used in)
capital and related financing activities 3,539,587 (329,126)
INVESTING ACTIVITIES
Investment income 142,552 5,026
Net cash provided by investing activities 142,552 5,026
Net change in cash and cash equivalents 11,815,093 42,980
Cash and cash equivalents, beginning of year 7,154,203 467,259
Cash and cash equivalents, end of year 18,969,296$ 510,239$
CITY OF FRIENDSWOOD, TEXAS
STATEMENT OF CASH FLOWS – PROPRIETARY FUNDS
YEAR ENDED SEPTEMBER 30, 2009
(CONTINUED)
The Notes to the Basic Financial Statements
are an integral part of these statements.
22
Governmental
Total Activities -
Enterprise Internal
Funds Service Funds
Reconciliation of operating income
to net cash provided by operating activities
Operating income 5,388,833$ 134,226$
Adjustments to reconcile operating income
to net cash provided by operating activities
Depreciation and amortization 1,390,674 167,632
Change in assets and liabilities
Accounts receivable (268,747) 2,579
Prepaids and other assets (30,702) -
W orking capital deposits (3,923) -
Accounts payable 1,908,525 (378)
Accrued liabilities 283,725 -
Deposits 12,025 -
Net cash provided by operating activities 8,680,410$ 304,059$
Reconciliation of cash to statement of net assets
Cash and investments 6,579,973$ 510,239$
Restricted cash and investments 12,389,323 -
Cash and cash equivalents 18,969,296$ 510,239$
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2009
23
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 four terms. The City Council is the
principal legislative body of the City. The City Manager is appointed by a majority vote of
the City Council and is responsible to the Council for the administration of all the affairs 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.
Financial Reporting Entity
The City is an independent political subdivision of the State of Texas governed by an
elected six-member Council and Mayor and is considered a primary government. As
required by generally accepted accounting principles, these 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, the W est Ranch Management District (the District) has been
included in the City’s reporting entity as a discretely presented component unit.
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.
Consideration regarding the potential for inclusion of other entities, organizations, or
functions in the City’s financial reporting entity is 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 financially 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.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
24
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Financial Reporting Entity – Continued
The W est Ranch Management District (the District), a discretely presented component
unit, was created under Section 59, Article XVI of the Texas Constitution added by an
Act of the 79th Legislature of the State of Texas, effective June 17, 2005, in accordance
with the Texas Water Code, Chapter 54. The District operates in accordance with
Chapter 49 and 54 of the Texas Water Code and is subject to the continuing supervision
of the Texas Commission on Environmental Quality. The District was created to
promote and encourage employment and the public welfare within the District. The
affairs of the District are managed by a Board of Directors composed of three directors
from a list of persons nominated by the Board and appointed by the City Council and two
directors appointed by the City Council. The City is financially accountable for the
District because City Council must approve any debt issuances. Complete financial
statements from the component may be obtained at the District’s administrative office.
Basis of Presentation
The government-wide financial statements (i.e., the statement of net assets and the
statement of activities) report information on all activities of the primary government and
its component unit. For the most part, the effect of interfund activity has been removed
from these statements. Governmental activities, which normally are supported by taxes
and intergovernmental revenue, are reported separately from business-type activities,
which rely to a significant extent on fees and charges for support. Likewise, the primary
government is reported separately from certain legally separate component units for
which the primary government is financially accountable.
The statement of activities demonstrates the degree to which the direct expenses of a
given function or segment are offset by program revenue. Direct expenses are those
that are clearly identifiable with a specific function or segment. Program revenue
includes 1) charges to customers or applicants who purchase, use, or directly benefit
from goods, services, or privileges provided by a given function or segment, and 2)
grants and contributions that are restricted to meeting the operational or capital
requirements of a particular function or segment. Taxes and other items not properly
included among program revenue are reported instead as general revenue.
Separate financial statements are provided for governmental funds and proprietary
funds. Major individual governmental funds and major individual enterprise funds are
reported as separate columns in the fund financial statements.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
25
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Measurement Focus/Basis of Accounting
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund
financial statements. Revenues are recorded when earned and expenses are recorded
when a liability is incurred, regardless of the timing of related cash flows. Property
taxes are recognized as revenue in the year for which they are levied. Grants and
similar items are recognized as revenue as soon as all eligibility requirements imposed
by the provider have been met.
Governmental fund financial statements are reported using the current financial
resources measurement focus and the modified accrual basis of accounting. Revenues
are recognized as soon as they are both measurable and available. Revenues are
considered to be available when they are collectible within the current period or soon
enough thereafter to pay liabilities of the current period. For this purpose, the
government considers revenue to be available if collected within 60 days of the end of
the current fiscal period. Expenditures generally are recorded when a liability is
incurred, as under accrual accounting. However, debt service expenditures, as well as
expenditures related to compensated absences and claims and judgments, are
recorded only when payment is due.
Property taxes, franchise taxes, sales taxes, and interest associated with the current
fiscal period are all considered to be susceptible to accrual and, accordingly, have been
recognized as revenue of the current fiscal period. All other revenue items are
considered to be measurable and available only when cash is received by the City.
The City reports the following major governmental funds:
The General Fund is the City’s primary operating fund. It accounts for all financial
resources of the general government, except those required to be accounted for in
another fund.
The Debt Service Fund is used to account for the property taxes levied for payment
of principal and interest on all governmental debt of the City.
Other governmental funds is a summarization of all the non-major governmental funds.
The City reports the following major enterprise fund:
The Water and Sewer Fund is used to account for the activities of the City’s water
and wastewater operations.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
26
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Measurement Focus/Basis of Accounting – Continued
Additionally, the City reports the following fund type:
The Internal Service Fund is used to account for fleet management services
provided to other departments of the City on a cost reimbursement basis.
Private-sector standards of accounting and financial reporting issued prior to
December 1, 1989, generally are followed in both the government-wide and enterprise
fund financial statements to the extent that those standards do not conflict with or
contradict guidance of the Governmental Accounting Standards Board. Governments
also have the option of following subsequent private-sector guidance for their business-
type activities and Enterprise Funds, subject to this same limitation. The City has
elected not to follow subsequent private-sector guidance.
As a general rule, the effect of interfund activity has been eliminated from the
government-wide financial statements. Exceptions to this general rule are charges
between the City’s water and sewer function and various other functions of the
government. Elimination of these charges would distort the direct costs and program
revenue reported for the various functions concerned.
Proprietary funds distinguish operating revenues and expenses from nonoperating
items. Operating revenues and expenses generally result from providing services and
producing and delivering goods in connection with a proprietary fund’s principal ongoing
operations. The principal operating revenues of the W ater and Sewer enterprise fund
and of the City’s internal service fund are charges to customers for sales and services.
Operating expenses for the enterprise fund and internal service fund include the cost of
sales and services, administrative expenses, and depreciation on capital assets. All
revenue and expenses not meeting this definition are reported as nonoperating revenue
and expenses.
When both restricted and unrestricted resources are available for use, it is the City’s
policy to use restricted resources first, then unrestricted resources as they are needed.
Cash and Investments
Cash and 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 U. S. government treasury bills, treasury notes and other
U. S. 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 investment pools.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
27
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Cash and Investments – Continued
In accordance with GASB Statement No. 31, the City’s general policy is to report money
market investments and short-term participating interest-earning investment contracts
at amortized cost and to report nonparticipating interest-earning investment contracts
using a cost-based measure. However, if the fair value of an investment is significantly
affected by the impairment of the credit standing of the issuer or by other factors, it is
reported at fair value. All other investments are reported at fair value unless a legal
contract exists which guarantees a higher value. The term “short-term” refers to
investments, which have a remaining term of one year or less at time of purchase. The
term “nonparticipating” means that the investment’s value does not vary with market
interest rate changes.
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
investments” in the financial statements. Negative equity balances are reclassified and
are reflected as interfund accounts payable. Interest income and interest expense are
allocated to each respective individual fund monthly based on their representative fund
balances.
The City’s cash and cash equivalents are considered to be cash on hand, demand
deposits, and short-term investments with original maturities of three months or less
from the date of acquisition.
Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements
outstanding at the end of the fiscal year are referred to as either “due to/from other
funds” (i.e., the current portion of interfund loans) or “advances to/from other funds”
(i.e., the noncurrent portion of interfund loans). All other outstanding balances between
funds are reported as “due to/from other funds.” Any residual balances outstanding
between the governmental activities and business-type activities are reported in the
government-wide financial statements as “internal balances.” Advances between funds,
as reported in the fund financial statements, are offset by a fund balance reserve
account in applicable governmental funds to indicate that they are not available for
appropriation and are not expendable available financial resources. The City had no
interfund loans or internal balances at September 30, 2009.
All trade and property tax receivables are shown net of an allowance for uncollectible
accounts. Management estimates an allowance for trade accounts receivable based on
past experience, historical losses, and other pertinent factors. The property tax
receivable allowance is equal to 10 percent of outstanding property taxes at September
30, 2009.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
28
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Receivables and Payables – Continued
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
Galveston County. Such taxes are applicable to the fiscal year in which they are levied
and become delinquent with an enforceable lien on property on February 1 of the
subsequent calendar year.
Property taxes are prorated between operations and debt service based on rates
adopted for the year of the levy. For the current year, the City levied property taxes of
$0.5797 per $100 of assessed valuation that were prorated between operations and
debt service in the amounts of $0.5097 and $0.0700, respectively. The resulting tax
levies were approximately $11.7 and $1.6 million for operations and debt service,
respectively, based on a total taxable valuation of approximately $2.3 billion for the
2008 tax year.
At an election held November 8, 2005, voters of the W est Ranch Management District,
a discretely presented component unit, authorized a maintenance tax not to exceed
$0.65 per $100 valuation on all property within the District subject to taxation. The
District levied an ad valorem maintenance tax at the rate of $0.6500 per $100 of
assessed valuation, which resulted in a tax levy of $309,811 on the taxable valuation of
$47,663,107 for the 2008 tax year. The maintenance tax is being used by the District to
pay operating expenditures.
Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and
are recorded as prepaid items in both government-wide and fund financial statements.
Restricted Assets
Certain proceeds of the City’s enterprise fund revenue bonds, as well as certain
resources set aside for their repayment, are classified as restricted assets on the
balance sheet because their use is limited by applicable bond covenants.
Deferred Contributions
Deferred contributions include the costs of land and infrastructure within the W est Ranch
Management District that will be contributed upon completion to the primary government.
Upon completion of the project, these assets will be transferred to the primary
government and expensed in the Statement of Activities.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
29
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Deferred Contributions – Continued
The District approved a contract with the City effective August 15, 2005, as amended.
Under the terms of the contract, the District is to pay for construction of water
distribution, sanitary sewer, drainage, transportation, education and recreation facilities
to serve the District.
The District shall be the owner of the system until the system is completed, approved by
the City and conveyed to it, at which time ownership will vest in the City. The District will
own and operate detention facilities to serve the District. Pursuant to the contract, the
District shall have a security interest therein until all bonds issued by the District are
retired.
Capital Assets
Capital assets, which include property, plant, equipment, infrastructure, and water rights,
are reported in the applicable governmental or business-type activities columns in the
government-wide financial statements. The City defines capital assets as assets with an
initial, individual cost of more than $5,000 and an estimated useful life in excess of one
year. Such assets are recorded at historical cost or estimated historical cost if actual
historical cost is not available. Donated capital assets are recorded at estimated fair
market value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or
materially extend assets’ lives are not capitalized.
Property, plant and equipment is depreciated using the straight-line method over the
following useful lives:
Buildings and improvements 20 - 50 years
Machinery and equipment 5 - 10 years
Infrastructure 40 - 50 years
W ater and sewer system 40 - 50 years
Compensated Absences
The City’s employees earn vacation and sick leave, which may either be taken or
accumulated, up to certain amounts, until paid upon resignation or retirement. All
vacation and sick leave pay is accrued when incurred in the government-wide and
proprietary fund financial statements. A liability for these amounts is reported in
governmental funds only if they have matured, for example, as a result of employee
resignations and retirements.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
30
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Long-Term Obligations
In the government-wide financial statements and proprietary fund types in the fund
financial statements, long-term debt and other long-term obligations are reported as
liabilities in the applicable governmental activities, business-type activities, or proprietary
fund type statement of net assets. Bond premiums and discounts, as well as issuance
costs, are deferred and amortized over the life of the bonds using the straight-line
method, which approximates the effective interest method. Bonds payable are reported
net of the applicable bond premium or discount. Bond issuance costs are reported as
deferred charges and amortized over the term of the related debt.
In the fund financial statements, governmental fund types recognize bond premiums and
discounts, as well as bond issuance costs during the current period. The face amount of
debt issued is reported as other financing sources. Premiums received on debt
issuances are reported as other financing sources while discounts on debt issuances are
reported as other financing uses. Issuance costs, whether or not withheld from the
actual debt proceeds received, are reported as debt service expenditures.
Fund Equity
In the fund financial statements, governmental funds report reservations of fund balance
for amounts that are not available for appropriation or are legally restricted by outside
parties for use for a specific purpose. Designations of fund balance represent tentative
management plans that are subject to change.
Net Assets
Net assets represent the difference between assets and liabilities. Net assets invested
in capital assets, net of related debt consists of capital assets, net of accumulated
depreciation, reduced by the outstanding balances of any borrowing used for the
acquisition, construction or improvements of those assets, and adding back unspent
proceeds. Net assets are reported as restricted when there are limitations imposed on
their use either through the enabling legislations adopted by the City or through external
restrictions imposed by creditors, grantors, or laws or regulations of other governments.
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 disclosures of contingent
liabilities at the date of the financial statements and the reported amounts of revenue
and expenses during the reporting period. Actual amounts could differ from those
estimates.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
31
NOTE 2. DEPOSITS AND INVESTMENTS
Under provisions of state and local statutes, the City’s investment policies, and provisions of
the City’s depository contracts with an area financial institution, the City is authorized to
place available 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 $100,000;
3. No-load money market mutual funds; and
4. TexPool, Lone Star Investment Pool and MBIA Class.
The City Council has adopted a written investment policy regarding the investments of its
funds as defined by the Public Funds Investment Act of 1995 (Chapter 2256, Texas
Government Code). The investments of the City are in compliance with the Council’s
investment policies. The City did not have any derivative investment products during the
current year. All significant legal and contractual provisions for investments were complied
with during the year.
Deposits and investments as of September 30, 2009 are classified in the accompanying
financial statements as follows:
Governmental Activities 8,978,315$
Business-type Activities 18,969,296
27,947,611$
Deposits and investments as of September 30, 2009 consist of the following:
Deposits with financial institutions 1,765,819$
Investments 26,181,792
27,947,611$
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
32
NOTE 2. DEPOSITS AND INVESTMENTS – CONTINUED
As of September 30, 2009, the City had the following investments:
W eighted Average
Fair Value Maturity (Days)
MBIA Class 15,834,700 42
Lone Star 3,919,177 49
Tex Pool 3,920,753 44
U.S. Agency Securities:
Federal Home Loan Bank 1,503,892 376
Freddie Mac 502,955 531
Farm Credit Note 500,315 566
Total U.S. Agency Securities 2,507,162
Total portfolio 26,181,792$
Investment Type
The City’s investment pools are 2a7-like pools. A 2a7-like pool is one which is not
registered with the Securities and Exchange Commission (“SEC”) as an investment
company, but nevertheless has a policy that it will, and does, operate in a manner
consistent with the SEC’s Rule 2a7 of the Investment Company Act of 1940.
Interest Rate Risk. In accordance with its investment policy, the City manages its
exposure to declines in fair market values by limiting 30% of its portfolio to be invested
for a period of more than two years. As of September 30, 2009, all of the City’s
investments were invested for a period less than two years.
Custodial Credit Risk. In the case of deposits, this is the risk that in the event of a bank
failure, the City’s deposits may not be returned. State statutes require that all deposits in
financial institutions be fully collateralized by U. S. Government obligations or its
agencies and instrumentalities or direct obligations of Texas or its agencies and
instrumentalities that have a fair value of not less than the principal amount of deposits.
As of September 30, 2009, all of the City’s $2,283,651 balance on deposit with financial
institutions was collateralized with securities held by the pledging financial institution in
the City’s name.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
33
NOTE 2. DEPOSITS AND INVESTMENTS – CONTINUED
Credit Risk. It is the City’s policy to limit its investments to investment types with an
investment quality rating not less than A or its equivalent by a nationally recognized
statistical rating organization. The City’s investments as of September 30, 2009, were
rated as follows:
Rating Rating Agency
MBIA Class AAA Fitch
Lone Star AAAm Standard & Poor's
TexPool AAAm Standard & Poor's
U.S. Agency Securities:
Freddie Mac Aaa Moody's Investor Service
Federal Home Loan Bank Aaa Moody's Investor Service
Federal Farm Credit Bank Aaa Moody's Investor Service
Investment Type
NOTE 3. ACCOUNTS RECEIVABLE AND DEFERRED REVENUE
Receivables as of year-end for the City’s individual major funds, nonmajor funds in the
aggregate and the Internal Service Fund including the applicable allowances for
uncollectible accounts, are as follows:
Debt W ater and Internal
General Service Nonmajor Sewer Service Total
Receivables:
Property taxes 347,529$ 52,081$ -$ -$ -$ 399,610$
Sales taxes 670,327 - - - - 670,327
Franchise taxes 354,637 - - - - 354,637
Customer accounts 155,661 - 29,617 1,887,653 - 2,072,931
Accrued interest 5,385 986 257 6,047 361 13,036
Court fines 531,759 - - - - 531,759
Intergovernmental 4,068,578 - - - - 4,068,578
Other 19,111 - 4,056 7,842 - 31,009
Gross receivables 6,152,987 53,067 33,930 1,901,542 361 8,141,887
Less: allowance for
uncollectibles 320,314 5,208 - 10,000 - 335,522
Net total receivables 5,832,673$ 47,859$ 33,930$ 1,891,542$ 361$ 7,806,365$
Governmental Funds Proprietary Funds
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
34
NOTE 3. ACCOUNTS RECEIVABLE AND DEFERRED REVENUE – CONTINUED
Governmental funds report deferred revenue in connection with receivables for revenue
that is not considered to be available to liquidate liabilities of the current period.
Governmental funds also defer revenue recognition in connection with resources that
have been received, but not yet earned. At the end of the current fiscal year, the various
components of deferred revenue reported in the governmental funds were as follows:
Deferred revenue
General Fund
Delinquent property taxes 312,776$
Court fines 207,027
Miscellaneous 13,293
Total General Fund 533,096
Court Security and Technology Fund
Miscellaneous 4,043
Total Court Security and Technology Fund 4,043
Debt Service Fund
Delinquent property taxes 46,873
Total Debt Service Fund 46,873
Total Governmental Funds 584,012$
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
35
NOTE 4. CAPITAL ASSETS
Capital asset activity for the year ended September 30, 2009, was as follows:
Beginning Reclassifications/Ending
Balance Increases Decreases Balance
Governmental activities
Capital assets not being depreciated
Land 23,950,721$ 56,677$ -$ 24,007,398$
Construction in progress 5,615,139 1,171,839 (3,900,335) 2,886,643
Total capital assets not
being depreciated 29,565,860 1,228,516 (3,900,335) 26,894,041
Capital assets being depreciated
Buildings and improvements 26,180,629 3,559,571 - 29,740,200
Machinery and equipment 7,750,474 1,674,655 (122,066) 9,303,063
Infrastructure 67,671,399 - - 67,671,399
Total capital assets
being depreciated 101,602,502 5,234,226 (122,066) 106,714,662
Less accumulated depreciation
Buildings and improvements 8,446,924 1,042,286 - 9,489,210
Machinery and equipment 5,584,200 498,808 - 6,083,008
Infrastructure 31,034,486 1,573,652 (114,816) 32,493,322
Total accumulated
depreciation 45,065,610 3,114,746 (114,816) 48,065,540
Total capital assets
being depreciated, net 56,536,892 2,119,480 (7,250) 58,649,122
Governmental activities
capital assets, net 86,102,752$ 3,347,996$ (3,907,585)$ 85,543,163$
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
36
NOTE 4. CAPITAL ASSETS – CONTINUED
Beginning Reclassifications/Ending
Balance Increases Decreases Balance
Business Type Activities
Capital assets not being depreciated
Land 718,493$ -$ (1,675)$ 716,818
W ater rights 19,717,545 - (850) 19,716,695
Construction in progress 1,546,682 5,867,263 (1,334,995) 6,078,950
Total capital assets not
being depreciated 21,982,720 5,867,263 (1,337,520) 26,512,463
Capital assets being depreciated
Machinery and equipment 3,063,036 16,180 (122,173) 2,957,043
W ater and sewer system 45,799,462 1,285,495 - 47,084,957
Total capital assets
being depreciated 48,862,498 1,301,675 (122,173) 50,042,000
Less accumulated depreciation:
Machinery and equipment 2,556,576 45,494 (75,170) 2,526,900
W ater and sewer system 19,985,338 1,345,180 - 21,330,518
Total accumulated
depreciation 22,541,914 1,390,674 (75,170) 23,857,418
Total capital assets
being depreciated, net 26,320,584 (88,999) (47,003) 26,184,582
Business-type activities
capital assets, net 48,303,304$ 5,778,264$ (1,384,523)$ 52,697,045$
Depreciation expense was charged to functions/programs of the primary government as
follows:
Governmental activities
General government 154,332
Public safety 328,451
Community development and public works 1,896,020
Community services 568,311
Capital assets held by the City's internal service fund are
charged to the various functions based on their usage 167,632
Total depreciation expense - Governmental Activities 3,114,746$
Business-Type activities
Water and sewer 1,390,674$
Total depreciation expense - Business-Type Activities 1,390,674$
Commitments for construction projects in progress were $1,346,133 at September 30, 2009.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
37
NOTE 5. INTERFUND TRANSFERS
The following schedule briefly summarizes the City’s transfer activity:
Transfers In Transfers Out Amount
General Park land dedication 186,750$ Fund miscellaneous projects
General W ater and sewer 1,001,655 To fund indirect costs for
administrative expenditures
Vehicle replacement General 44,752 To fund vehicle purchase
Vehicle replacement W ater and sewer 18,269 To fund vehicle purchase
EDA Grant W ater and sewer 900,000 To cover City's matching
portion of grant
W ater and sewer Debt service 1,372,468 2005 refunding bonds funded
by debt service
Capital projects General 10,000 Reimbursement for capital
expenditure
3,533,894$
Purpose
NOTE 6. 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 governmental and business-type
activities. These instruments include general obligation bonds, certificates of obligation,
revenue bonds, and capital leases. These debt obligations are secured by either future
tax revenue, water and sewer system revenue, or liens on property and equipment. Debt
obligations that are intended to be repaid from water and sewer system revenue have
been recorded as business-type activities. All other long-term obligations of the City are
considered to be governmental type activities.
Federal Arbitrage
General obligation bonds, combination tax and revenue bonds, and certificates of
obligation are subject to the provisions of the Internal Revenue Code of 1986 related to
arbitrage and interest income tax regulations under those provisions.
Bonds Payable and Certificates of Obligation
The following schedule summarizes the terms of general obligation bonds, combination
tax and revenue bonds, and certificates of obligation outstanding and their
corresponding allocations to the governmental and business-type activities at September
30, 2009:
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
38
NOTE 6. LONG-TERM DEBT – CONTINUED
Bonds Payable and Certificates of Obligation – Continued
Final Governmental Business-Type
Maturity Interest Rate Activities Activities
General Obligation Bonds
2003 Permanent Improvement $ 8,700,000 2026 3.65% - 5.5%8,025,000$ -$
2005 Permanent Improvement
and Refunding 9,800,000 2020 2.85% - 4.375%7,420,000 865,000
15,445,000 865,000
Revenue Bonds
2000 Waterworks and Sewer System 3,515,000 2019 4.2% - 6.5%- 60,000
2001 W aterworks and Sewer System 6,100,000 2021 4.7% - 6.5%- 5,850,000
2006 Waterworks and Sewer System
Revenue and Refunding 24,285,000 2031 4.0% - 5.0%- 24,230,000
2009 Waterworks and Sewer System 12,120,000 2028 2.0% - 4.8%- 12,120,000
- 42,260,000
Total Bonds and Certificates of Obligation 15,445,000$ 43,125,000$
Series and Original Issue Amount
Annual debt service requirements for bonds and certificates of obligation are as follows:
Year Ending
September 30,Principal Interest Principal Interest Total
2010 645,000$ 639,084$ 1,080,000$ 2,004,936$ 4,369,020$
2011 675,000 606,806 1,440,000 1,904,689 4,626,495
2012 705,000 576,318 1,500,000 1,844,388 4,625,706
2013 730,000 547,881 1,560,000 1,783,355 4,621,236
2014 755,000 518,229 1,625,000 1,717,793 4,616,022
2015 - 2019 4,255,000 2,090,161 9,240,000 7,471,944 23,057,105
2020 - 2024 5,245,000 1,102,211 9,860,000 5,201,633 21,408,844
2025 - 2029 2,435,000 106,237 11,220,000 2,744,090 16,505,327
2030 - 2034 - - 5,600,000 522,012 6,122,012
15,445,000$ 6,186,927$ 43,125,000$ 25,194,840$ 89,951,767$
Governmental Activities Business -Type Activities
Prior Year Defeasance of Bonds
In prior years, the City defeased certain bonds by placing the proceeds of new bonds in
an irrevocable trust to provide future debt service payments on the old bonds.
Accordingly, the trust account assets and liabilities for the defeased bonds are not
included in the City’s financial statements. On September 30, 2009, $8,350,000 of bonds
considered defeased are still outstanding.
Obligations Under Capital Leases
The City has entered into capital lease agreements in order to purchase machinery and
equipment for public works, police and fire departments. The assets acquired through
these lease agreements are as follows:
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
39
NOTE 6. LONG-TERM DEBT – CONTINUED
Obligations Under Capital Leases – Continued
Governmental
Asset:Activities
Machinery and equipment 1,133,460$
Less: accumulated depreciation (50,755)
Total 1,082,705$
The following is a summary of future lease payments due on this machinery and
equipment:
Year Ending Lease
September 30,Obligation
2010 171,547$
2011 171,547
2012 171,547
2013 171,547
2014 171,547
2015 - 2016 300,359
Total 1,158,094
Less: interest portion (175,576)
Obligations under capital leases 982,518$
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
40
NOTE 6. LONG-TERM DEBT – CONTINUED
Changes in Long-term Liabilities
Long-term liability activity of the primary government for the year ended September 30,
2009, was as follows:
Balance Balance Due
Beginning End of W ithin One
of Year Increase Decrease Year Year
Governmental Type Activities
General obligation bonds 16,065,000$ -$ (620,000)$ 15,445,000$ 645,000$
Premium on bond issuance 136,478 - (7,582) 128,896 7,582
Capital lease obligations 16,351 1,133,460 (167,293) 982,518 142,590
Compensated absences 679,029 595,047 (542,594) 731,482 55,712
Total governmental
type activities 16,896,858 1,728,507 (1,337,469) 17,287,896 850,884
Business Type Activities
General obligation bonds 1,680,000 - (815,000) 865,000 865,000
Revenue bonds 30,355,000 12,120,000 (215,000) 42,260,000 215,000
Discount on bond issuance - (62,443) - (62,443) (2,498)
Premium on bond issuance 374,906 - (24,314) 350,592 24,313
Deferred loss on refunding bonds (254,140) - 15,353 (238,787) (15,353)
Compensated absences 75,139 64,774 (49,793) 90,120 15,414
Total business type activities 32,230,905 12,122,331 (1,088,754) 43,264,482 1,101,876
Total primary government
activities 49,127,763$ 13,850,838$ (2,426,223)$ 60,552,378$ 1,952,760$ 27,701,676$
The compensated absence liability attributable to the governmental activities will be
liquidated primarily by the General Fund.
Long-term liability activity of the West Ranch Management District for the year ended
July 31, 2009, was as follows:
Balance Balance Due
Beginning End of W ithin One
of Year Increase Decrease Year Year
Component Unit
Developer advances 145,000$ 15,000$ -$ 160,000$ -$
Due to developer 3,576,560 - (581,890) 2,994,670 -
Total component unit 3,721,560$ 15,000$ (581,890)$ 3,154,670$ -$
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
41
NOTE 6. LONG-TERM DEBT – CONTINUED
Changes in Long-term Liabilities - continued
A developer of the W est Ranch Management District has advanced $160,000 to the
District for operating expenses. The District has agreed to repay this amount plus
interest. The District is currently unable to estimate when bonds will be issued to pay this
liability.
Developers of the West Ranch Management District have constructed underground
utilities and have made land improvements on behalf of the District. The District is
maintaining and operating the land improvements and has agreed to reimburse the
developers for these construction costs and interest. The District estimates reimbursable
costs for completed projects are $2,994,670.
NOTE 7. RESTRICTED ASSETS
The balances of the restricted asset accounts in the enterprise fund are as follows:
Cash and investments:
Customer deposits 289,349
Construction 93,435
Construction - 2006 bonds 5,366,919
Construction - 2009 bonds 6,639,620
Total restricted assets 12,389,323$
NOTE 8. EMPLOYEE RETIREMENT SYSTEM
Plan Description
The City provides pension benefits for all of its full-time employees through a
non-traditional, joint contributory, hybrid defined benefit plan in the state-wide Texas
Municipal Retirement System (TMRS), one of 827 currently administered by TMRS, an
agent multiple-employer public employee retirement system.
TMRS issues a publicly available comprehensive annual financial report that includes
financial statements and required supplementary information (RSI) for TMRS; the report
also provides detailed explanations of the contributions, benefits and actuarial methods
and assumptions used by the System. This report may be obtained by writing to TMRS,
P.O. Box 149153, Austin, TX 78714-9153 or by calling 800-924-8677; in addition, the
report is available on TMRS’ website at www.TMRS.com.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
42
NOTE 8. EMPLOYEE RETIREMENT SYSTEM – CONTINUED
Benefits
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 at least 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%) of the employee's accumulated contributions. In
addition, the City can grant, as often as annually, another type of monetary credit
referred to as an updated service credit, which is a theoretical amount which, when
added to the employee's accumulated contributions and the monetary credits for service
since the plan began, would be the total monetary credits and employee contributions
accumulated with interest if the current employee contribution rate and the City matching
percent had always been 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 ages 60 and above with 5 or more years of service or with 20
years of service regardless of age. A member is vested after 5 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.
Plan provisions for the City were as follows:
Plan Year Plan Year
2008 2009
Employee deposit rate 7.00%7.00%
Matching ratio (city to employee) 2 to 1 2 to 1
Years required for vesting 5 5
Service retirement eligibility
(expressed as age / years of 60/5,0/20 60/5,0/20
service)
100% Repeating, 100% Repeating,
Updated Service Credit Transfers Transfers
70% of 70% of
Annuity Increase (to retirees) CPI Repeating CPI Repeating
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
43
NOTE 8. EMPLOYEE RETIREMENT SYSTEM – CONTINUED
Contributions
Under the state law governing TMRS, the contribution rate for each city is determined
annually by the actuary, using the Projected Unit Credit actuarial cost method. This rate
consists of the normal cost contribution rate and the prior service cost contribution rate,
which is calculated to be a level percent of payroll from year to year. The normal cost
contribution rate finances the portion of an active member’s projected benefit allocated
annually; the prior service contribution rate amortizes the unfunded (overfunded)
actuarial liability (asset) over the applicable period for that city. Both the normal cost and
prior service contribution rates include recognition of the projected impact of annually
repeating benefits, such as Updated Service Credits and Annuity Increases.
The City contributes to the TMRS Plan at an actuarially determined rate. Both the
employees and the City make contributions monthly. Since the City needs to know its
contribution rate in advance for budgetary purposes, there is a one-year delay between
the actuarial valuation that serves as the basis for the rate and the calendar year when
the rate goes into effect. The annual pension cost and net pension obligation/(asset) are
as follows:
Annual Required Contribution (ARC) 1,690,675$
Interest on Net Pension Obligation -
Adjustment to the ARC -
Annual Pension Cost (APC) 1,690,675
Contributions Made (1,465,830)
Increase (decrease) in net pension obligation 224,845
Net Pension Obligation/(Asset), beginning of year -
Net Pension Obligation/(Asset), end of year 224,845$
City historical data is as follows:
Annual Percentage of Net Pension Obligation
Fiscal Year Pension Cost (APC) APC Contributed at September 30
2007 1,036,959$ 100%-$
2008 1,085,937 100%-
2009 1,690,675 87%224,845
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
44
NOTE 8. EMPLOYEE RETIREMENT SYSTEM – CONTINUED
Contributions – Continued
The required contribution rates for fiscal year 2009 were determined as part of the
December 31, 2006 and 2007 actuarial valuations. Additional information as of the latest
actuarial valuation, December 31, 2008, also follows:
Valuation date 12/31/2006 12/31/2007 12/31/2008
Actuarial cost method Unit Credit Projected Unit
Credit
Projected Unit
Credit
Level Percent Level Percent Level Percent
of Payroll of Payroll of Payroll
25 years:30 years:29 years:
open period closed period closed period
Asset valuation method Amortized Cost Amortized Cost Amortized Cost
Actuarial assumptions:
Investment rate of return 7.00%7.00%7.50%
Varies by age Varies by age Varies by age
and service and service and service
Included inflation rate 3.00%3.00%3.00%
Cost-of-living adjustments 0.00%2.10%2.10%
Amortization method
Remaining amortization period
Projected salary increases
The funded status as of December 31, 2008, the most recent actuarial valuation date, is
as follows:
Actuarial UAAL as a
Actuarial Actuarial Accrued Unfunded Percentage
Valuation Value of Liability Funded AAL Covered of Covered
Date Assets (AAL) Ratio (UAAL) Payroll Payroll
(1) (2) (3) (4) (5) (6)
(1) / (2) (2) - (1) (4) / (5)
12/31/2008 $22,413,171 $35,257,980 63.60%$12,844,809 $10,885,990 118%
The schedule of funding progress, presented as Required Supplementary Information
following the notes to the financial statements, presents multi-year trend information
about whether the actuarial value of plan assets is increasing or decreasing over time
relative to the actuarial accrued liability of benefits.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
45
NOTE 9. POST EMPLOYMENT BENEFITS OTHER THAN PENSIONS
Retiree Insurance Coverage
The City Council has established a medical, dental, and vision insurance benefit plan for
retirees. Eligible retirees are provided insurance benefits at a set premium rate equal to the
City’s employees’ rate. Eligible retirees may also cover their dependents. Retirees are
responsible for paying the premium cost associated with their coverage. A retiree is defined
as a person who is receiving lifetime monthly TMRS pension benefit payments and retired
directly from active employment at the City. The City will stop insurance coverage on the
retiree and all dependents on the last day of the month the retiree fails to submit the
required premium payment or upon death of the employee.
Retirement Benefit Eligibility
The retiring employee must be 60 years of age with 5 years of service or have 20 years
of service at any age. Employees terminating before normal retirement conditions are
met are not eligible for retiree health plans. Retirees are not required to enroll in
Medicare Parts A and B once eligible.
Plan Participants
Permanent full-time employees and any dependents covered on the employee’s last
date of employment are eligible for coverage. Dependents are not eligible for coverage
unless the retired employee is covered. Should the retiring employee reject any of the
plans he/she is never eligible to re-enroll in the rejected plans. At the time of coverage
election, the retiring employee has the option of cancelling coverage on any dependent
with the understanding that that dependent can never be re-enrolled; new dependents
cannot be added to the plan.
Medical HMO and/or POS Plan
The retiring employee is eligible to retain whichever medical plan the employee had on
the last day of employment. Any dependents covered at that time may remain on the
retired employee’s plan as long as the retired employee remains active on the plan. The
only time the retiree’s plan choice can be changed is at open enrollment. All terms and
conditions of the plan are the same as active employees.
Dental DMO and/or PPO Plan
The retiring employee is eligible to retain whichever dental plan the employee had on the
last day of employment. Any dependents covered at that time may remain on the retired
employee’s plan as long as the retired employee remains active on the plan. The only
time the retiree’s plan choice can be changed is at open enrollment. All terms and
conditions of the plan are the same as active employees.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
46
NOTE 9. POST EMPLOYMENT BENEFITS OTHER THAN PENSIONS – CONTINUED
Retiree Insurance Coverage – Continued
Vision Plan
The retiring employee is eligible to retain the vision plan the employee had on the last
day of employment. Any dependents covered at that time may remain on the retired
employee’s plan as long as the retired employee remains active on the plan. All terms
and conditions of the plan are the same as active employees.
Premiums Paid
All premiums are 100% paid monthly by the retiree. The City does not contribute to any
of the plans once an employee retires.
Funding Policy and Annual OPEB Cost
The City’s annual other post employment benefits (OPEB) cost is calculated based on
the annual required contribution of the employer (ARC), an amount actuarially
determined in accordance with the parameters of GASB Statement No. 45. The ARC
represents a level of expense that, if recognized on an ongoing basis, is projected to
cover normal cost each year and to amortize the unfunded actuarial liabilities over a
period not to exceed thirty years. The City had its first OPEB actuarial valuation
performed for the fiscal year beginning October 1, 2008 as required by GASB. The City’s
annual OPEB cost for the current year is as follows:
Annual required contribution 290,842$
Interest on OPEB obligation -
Adjustment to ARC -
Annual OPEB cost (expense) end of year 290,842
Net estimated employer contributions 18,208
Increase in net OPEB obligation 272,634
Net OPEB obligation – as of beginning of the year -
Net OPEB obligation (asset)– as of end of year 272,634$
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
47
NOTE 9. POST EMPLOYMENT BENEFITS OTHER THAN PENSIONS – CONTINUED
Retiree Insurance Coverage – Continued
Funding status and funding progress
The funded status of the City’s retiree health care plan, under GASB Statement No. 45
as of December 31, 2008 is as follows:
Actuarial
Actuarial Actuarial Accrued Unfunded
Valuation Value of Liability Funded AAL
Date Assets (AAL) Ratio (UAAL)
(1) (2) (3) (4)
(1) / (2) (2) - (1)
12/31/2008 $0 $2,426,788 0.00%$2,426,788
Under the reporting parameters, the City’s retiree health care plan is 0% funded with an
estimated actuarial accrued liability exceeding actuarial assets by $2,426,788 at
December 31, 2008.
Actuarial methods and assumptions
The Projected Unit Credit actuarial cost method is used to calculate the GASB ARC for
the City’s retiree health care plan. Using the plan benefits, the present health premiums
and a set of actuarial assumptions, the anticipated future payments are projected. The
projected unit credit method then provides for a systematic funding for these anticipated
payments. The yearly ARC is computed to cover the cost of benefits being earned by
covered members as well as to amortize a portion of the unfunded accrued liability.
Projections of health benefits are based on the plan as understood by the City and
include the types of benefits in force at the valuation date and the pattern of sharing
benefit costs between the City and the City’s employees to that point. Actuarial
calculations reflect a long-term perspective and employ methods and assumptions that
are designed to reduce short-term volatility in actuarial accrued liabilities and the
actuarial value of assets. Significant methods and assumptions were as follows:
Investment rate of return 4.5%, net of expenses
Actuarial cost method Projected Unit Credit Cost Method
Amortization method Level Percentage of Payroll
Payroll Growth Rate 3.00%
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
48
NOTE 9. POST EMPLOYMENT BENEFITS OTHER THAN PENSIONS – CONTINUED
Retiree Insurance Coverage – Continued
Actuarial valuations involve estimates of the value of reported amounts and assumptions
about the probability of events in the future. Amounts determined regarding the funded
status and the annual required contributions of the City’s retiree health care plan are subject
to continual revision as actual results are compared to past expectations and new estimates
are made about the future. The required schedule of funding progress presented as required
supplementary information provides multiyear trend information that shows whether the
actuarial value of plan assets is increasing or decreasing over time relative to the actuarial
accrued liability for benefits.
Supplemental Death Benefits Fund
Plan Description
The City also participates in the cost sharing multiple-employer defined benefit group-
term life insurance plan operated by the Texas Municipal Retirement System (“TMRS”)
known as the Supplemental Death Benefits Fund (“SDBF”). The City elected, by
ordinance, to provide group-term life insurance coverage to both current and retired
employees. The City may terminate coverage under and discontinue participation in the
SDBF by adopting an ordinance before November 1 of any year to be effective the
following January 1.
The death benefit for active employees provides a lump-sum payment approximately
equal to the employee’s annual salary (calculated based on the employee’s actual
earnings, for the 12-month period preceding the month of death); retired employees are
insured for $7,500; this coverage is an OPEB.
Funding Policy
The funding policy for the SDBF program is to assure that adequate resources are
available to meet all death benefit payments for the upcoming year; the intent is not to
pre-fund retiree term life insurance during employees’ entire careers. Contributions are
utilized to fund active member deaths on a pay-as-you-go basis. Any excess
contributions over payments then become net assets available for OPEB.
Contributions
Contribution requirements of the participating employers are established and may be
amended by the TMRS Board of Trustees. The City is required to contribute at a rate
assessed each year by the TMRS Board of Trustees, currently 0.23% of covered payroll.
The TMRS Board of Trustees sets the employer contribution rate based on the mortality
and service experience of all employees by the plan and the demographics specific to
the workforce of the City. There is a one-year delay between the actuarial valuation that
serves as the basis for the employer contribution rate and the calendar year when the
rate goes into effect.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
49
NOTE 9. POST EMPLOYMENT BENEFITS OTHER THAN PENSIONS – CONTINUED
Supplemental Death Benefits Fund – Continued
Contributions – Continued
Contributions are made monthly based on covered payroll of employee members of the
City. The City contributes to the SDBF at the contractually required rate as determined
by the annual actuarial valuation. The rate is equal to the cost of providing one-year
term life insurance. The City’s contributions to the TMRS SDBF for the years ended
September 30, 2009, 2008 and 2007 were $24,533, $19,388 and $18,396, respectively,
which equaled the annual required contribution each year.
NOTE 10. RISK MANAGEMENT
The City is exposed to various risks of loss related to torts; theft of, damage to, and
destruction of assets; errors and omissions; injuries to employees; and natural disasters.
The City’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, 2009, 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 open
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, 2009, the City believed the amounts paid on workers’ compensation would not change
significantly from the amounts recorded.
During the year ended September 30, 2009, 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 themselves through an
HMO plan, the City pays 90% of the monthly premium. If an individual employee chooses to
cover themselves and their dependents through an HMO plan, the City pays 70% of the
monthly premium. If an employee chooses insurance coverage through the POS plan for
themselves or for themselves and their dependents then the City pays up to 90% or 70%,
respectively, of the HMO plan monthly premium.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO FINANCIAL STATEMENTS
50
NOTE 11. COMMITMENTS AND CONTINGENCIES
Southeast Water Purification Plant
The City has entered into a contract with the City of Houston for constructing, operating
and maintaining a water purification plan known as Southeast W ater Purification Plant.
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. As of September
30, 2009, the City has purchased water capacity with an indefinite life of $19,716,695
The relationship of the parties is of a fiduciary character. No partnership or joint venture
is created by this contract.
West Ranch Management District
The District's developers own the majority of the taxable property in the District. The
District's ability to meet its obligations is dependent on the developers' ability to pay
property taxes or make advances to the District. Since inception, a developer has
advanced $160,000 to the District for operations. The District does not have sufficient
funds or anticipated revenues sufficient to liquidate these advances during the
forthcoming fiscal year. Due to the uncertain reimbursement date and in accordance with
standards adopted by the Governmental Accounting Standards Board, these advances
are considered long-term and have been recorded as liabilities in the government-wide
financial statements.
Federal and State Programs
The City recognizes as revenue grant monies received as reimbursement for costs
incurred in certain federal and state programs it administers. Amounts received or
receivable from grantor agencies are subject to audit and adjustment by grantor
agencies. Any disallowed claims, including amounts already collected, may constitute a
liability of the applicable funds. The amount, if any, of expenditures which may be
disallowed by the grantor cannot be determined at this time although the City expects
such amounts, if any, to be immaterial.
Litigation
The City is a defendant in various lawsuits. The outcome and the impact of these
lawsuits is not presently determinable.
REQUIRED SUPPLEMENTARY
INFORMATION
CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF FUNDING PROGRESS FOR PARTICIPATION
IN TEXAS MUNICIPAL RETIREMENT SYSTEM
SEPTEMBER 30, 2009
51
Actuarial Actuarial UAAL as a
Actuarial Value of Accrued Unfunded AAL Covered Percentage of
Valuation Date Assets Liability (AAL) Funded Ratio (UAAL)Payroll Covered Payroll
(1)(2)(3)(4)(5)(6)
(1) / (2) (2) - (1) (4) / (5)
12/31/2006 18,730,279$ 24,313,786$ 77.0%5,583,507$ 7,998,107$ 69.8%
12/31/2007 20,112,856 30,397,880 66.2 10,285,024 8,429,619 122.0
12/31/2008 22,413,171 35,257,980 63.6 12,844,809 10,885,990 118.0
CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL
GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2009
52
Variance With
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues
Property taxes 11,428,949$ 11,428,949$ 11,881,805$ 452,856$
Sales taxes 3,771,600 3,771,600 3,900,854 129,254
Franchise taxes 1,345,700 1,345,700 1,363,221 17,521
Fines and forfeitures 1,124,200 1,124,200 1,096,329 (27,871)
Permits and fees 820,614 820,614 807,315 (13,299)
Intergovernmental 220,311 351,167 5,779,507 5,428,340
Investment earnings 456,088 456,088 119,164 (336,924)
Donations 17,920 45,269 38,200 (7,069)
Miscellaneous 10,700 16,104 34,273 18,169
Total revenues 19,196,082 19,359,691 25,020,668 5,660,977
Expenditures
General government
Mayor and council
Personnel services 299 299 0 299
Supplies 5,611 5,611 2,989 2,622
Other services and charges 236,101 288,277 321,843 (33,566)
Total mayor and council 242,011 294,187 324,832 (30,645)
City manager
Personnel services 435,603 435,603 448,840 (13,237)
Supplies 5,969 5,969 4,023 1,946
Other services and charges 92,193 110,579 79,737 30,842
Capital outlay 10,000 10,000 10,052 (52)
Total city manager 543,765 562,151 542,652 19,499
City secretary
Personnel services 366,467 366,467 354,510 11,957
Supplies 17,126 17,126 6,637 10,489
Repairs and maintenance 140 140 0 140
Other services and charges 56,698 56,698 33,715 22,983
Total city secretary 440,431 440,431 394,862 45,569
Administrative services
Personnel services 654,008 654,008 561,301 92,707
Supplies 6,592 6,592 4,254 2,338
Other services and charges 218,469 218,469 186,920 31,549
Total administrative services 879,069 879,069 752,475 126,594
Budgeted Amounts
CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL
GENERAL FUND - CONTINUED
FOR THE YEAR ENDED SEPTEMBER 30, 2009
53
Variance With
Final Budget
Actual Positive
Original Final Amounts (Negative)
Human resources
Personnel services 274,443 274,443 293,610 (19,167)
Supplies 15,065 15,065 10,158 4,907
Other services and charges 87,585 87,585 60,872 26,713
Total human resources 377,093 377,093 364,640 12,453
Tax
Other services and charges 209,478 209,478 212,290 (2,812)
Total tax 209,478 209,478 212,290 (2,812)
Economic development
Personnel services 126,610 126,610 128,484 (1,874)
Supplies 19,453 20,953 10,949 10,004
Other services and charges 101,590 148,587 137,300 11,287
Total economic development 247,653 296,150 276,733 19,417
Municipal court
Personnel services 499,735 499,735 498,074 1,661
Supplies 28,189 28,201 14,027 14,174
Repairs and maintenance 1,480 1,480 0 1,480
Other services and charges 39,250 39,250 53,543 (14,293)
Capital outlay 1,545 1,545 0 1,545
Total municipal court 570,199 570,211 565,644 4,567
Computer services
Personnel services 279,786 279,786 288,205 (8,419)
Supplies 15,631 15,631 8,215 7,416
Repairs and maintenance 71,374 71,374 68,361 3,013
Other services and charges 326,233 300,389 283,640 16,749
Capital outlay 45,000 45,000 44,980 20
Total computer services 738,024 712,180 693,401 18,779
Risk management
Personnel services 80,180 80,180 81,601 (1,421)
Supplies 13,388 13,388 7,542 5,846
Other services and charges 16,541 16,541 10,510 6,031
Total risk management 110,109 110,109 99,653 10,456
Total general government 4,357,832 4,451,059 4,227,182 223,877
Budgeted Amounts
CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL
GENERAL FUND - CONTINUED
FOR THE YEAR ENDED SEPTEMBER 30, 2009
54
Variance With
Final Budget
Actual Positive
Original Final Amounts (Negative)
Public safety
Police services
Personnel services 5,156,902 5,177,573 5,412,605 (235,032)
Supplies 379,477 381,395 270,524 110,871
Repairs and maintenance 120,443 123,635 129,684 (6,049)
Other services and charges 365,084 382,156 423,680 (41,524)
Capital outlay 42,655 41,412 0 41,412
Total police services 6,064,561 6,106,171 6,236,493 (130,322)
Communications
Personnel services 838,440 839,062 876,675 (37,613)
Supplies 9,077 8,813 7,009 1,804
Repairs and maintenance 12,102 13,764 16,318 (2,554)
Other services and charges 15,890 16,700 14,262 2,438
Total communications 875,509 878,339 914,264 (35,925)
Animal control
Personnel services 232,622 233,522 187,480 46,042
Supplies 21,844 21,377 18,599 2,778
Repairs and maintenance 2,373 2,373 1,995 378
Other services and charges 15,937 15,504 13,627 1,877
Capital outlay 27,550 20,306 1,064 19,242
Total animal control 300,326 293,082 222,765 70,317
Fire and EMS
Personnel services 483,806 512,703 548,991 (36,288)
Supplies 34,025 194,698 72,224 122,474
Repairs and maintenance 9,119 7,457 3,795 3,662
Other services and charges 1,211,881 1,215,214 6,527,414 (5,312,200)
Capital outlay 0 23,746 880,012 (856,266)
Total fire and EMS 1,738,831 1,953,818 8,032,436 (6,078,618)
Total public safety 8,979,227 9,231,410 15,405,958 (6,174,548)
Budgeted Amounts
CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL
GENERAL FUND - CONTINUED
FOR THE YEAR ENDED SEPTEMBER 30, 2009
55
Variance With
Final Budget
Actual Positive
Original Final Amounts (Negative)
Community development and public works
Administration
Personnel services 580,058 580,058 534,020 46,038
Supplies 15,783 15,783 9,248 6,535
Repairs and maintenance 637 637 1,196 (559)
Other services and charges 16,420 11,420 7,302 4,118
Total administration 612,898 607,898 551,766 56,132
Planning and zoning
Personnel services 125,948 125,948 128,417 (2,469)
Supplies 1,589 1,589 417 1,172
Other services and charges 10,280 27,780 9,361 18,419
Total planning and zoning 137,817 155,317 138,195 17,122
Engineering
Personnel services 61,546 61,546 50,034 11,512
Supplies 1,167 1,167 52 1,115
Repairs and maintenance 530 530 141 389
Other services and charges 9,922 14,922 11,617 3,305
Total engineering 73,165 78,165 61,844 16,321
Inspection
Personnel services 417,099 417,099 365,176 51,923
Supplies 13,771 13,771 8,373 5,398
Repairs and maintenance 1,167 1,167 446 721
Other services and charges 59,242 68,462 23,856 44,606
Capital outlay 15,000 15,000 0 15,000
Total inspection 506,279 515,499 397,851 117,648
Streets
Personnel services 472,010 472,010 437,222 34,788
Supplies 71,684 71,684 74,979 (3,295)
Repairs and maintenance 640,963 646,993 1,000,563 (353,570)
Other services and charges 440,113 440,113 412,950 27,163
Capital outlay 210,000 592,265 561,681 30,584
Total streets 1,834,770 2,223,065 2,487,395 (264,330)
Drainage
Personnel services 308,056 308,056 306,377 1,679
Supplies 6,725 6,725 3,225 3,500
Repairs and maintenance 46,639 33,770 1,458 32,312
Other services and charges 6,377 13,256 11,077 2,179
Capital outlay 13,945 49,875 175,272 (125,397)
Total drainage 381,742 411,682 497,409 (85,727)
Budgeted Amounts
CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL
GENERAL FUND - CONTINUED
FOR THE YEAR ENDED SEPTEMBER 30, 2009
56
Variance With
Final Budget
Actual Positive
Original Final Amounts (Negative)
Sanitation
Other services and charges - 9,375 9,375 -
Total sanitation - 9,375 9,375 -
Total community development
and public works 3,546,671 4,001,001 4,143,835 (142,834)
Community services
Administration
Personnel services 175,917 175,917 179,179 (3,262)
Supplies 3,789 3,789 2,555 1,234
Other services and charges 22,121 25,567 24,903 664
Total administration 201,827 205,273 206,637 (1,364)
Library
Personnel services 718,188 718,188 741,774 (23,586)
Supplies 156,760 174,480 159,558 14,922
Repairs and maintenance 2,575 2,825 220 2,605
Other services and charges 25,357 16,777 16,240 537
Total library 902,880 912,270 917,792 (5,522)
Parks and recreation
Personnel services 631,972 631,972 611,194 20,778
Supplies 109,845 115,564 97,609 17,955
Repairs and maintenance 112,552 127,822 206,547 (78,725)
Other services and charges 561,845 614,577 583,058 31,519
Capital outlay 66,150 42,056 39,250 2,806
Total parks and recreation 1,482,364 1,531,991 1,537,658 (5,667)
Swimming pool
Personnel services 65,813 65,813 51,366 14,447
Supplies 15,199 15,199 12,871 2,328
Repairs and maintenance 11,972 11,972 8,196 3,776
Other services and charges 24,627 24,627 37,760 (13,133)
Total swimming pool 117,611 117,611 110,193 7,418
Building operations
Supplies 19,983 19,983 24,178 (4,195)
Repairs and maintenance 87,959 94,010 104,037 (10,027)
Other services and charges 578,695 578,695 577,030 1,665
Capital outlay 175,500 359,282 499,663 (140,381)
Total building operations 862,137 1,051,970 1,204,908 (152,938)
Total community services 3,566,819 3,819,115 3,977,188 (158,073)
Total expenditures 20,450,549 21,502,585 27,754,163 (6,251,578)
Excess (deficiency) of
revenues over expenditures (1,254,467) (2,142,894) (2,733,495) (590,601)
Budgeted Amounts
CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL
GENERAL FUND - CONTINUED
FOR THE YEAR ENDED SEPTEMBER 30, 2009
57
Variance With
Final Budget
Actual Positive
Original Final Amounts (Negative)
Other financing sources (uses)
Insurance recoveries 16,963 21,155 123,707 102,552
Capital lease proceeds - - 1,133,460 1,133,460
Transfers in 1,237,504 1,237,504 1,188,405 (49,099)
Transfers out - (264,595) (54,752) 209,843
Total other financing
sources (uses)1,254,467 994,064 2,390,820 1,396,756
Net change in fund balances - (1,148,830) (342,675) 806,155
Fund balance, beginning of year 10,214,669 10,214,669 10,214,669 -
Fund balance, end of year 10,214,669$ 9,065,839$ 9,871,994$ 806,155$
Budgeted Amounts
CITY OF FRIENDSWOOD, TEXAS
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
58
NOTE 1. BUDGETARY CONTROL
The City’s Code of Ordinances establishes the following framework for the preparation and
format of the City’s annual budget:
Content
The budget shall provide a complete financial plan of all City funds and activities and,
except as required by law or this Charter, shall be in such form as the City Manager
deems desirable or the Council may require. The budget shall begin with a clear general
summary of its contents; shall show in detail all estimated income, the proposed property
tax levy, and all proposed expenditures for the ensuing fiscal year, including debt service
and an itemized estimate of the expense of conducting each Department of the City. The
proposed budget expenditures shall not exceed the total of estimated income. It shall
also include, in separate sections:
(1) Tax levies, rates, and collections for the preceding five years.
(2) The amount required for interest on the City's debts, for sinking fund and for
maturing serial bonds.
(3) The total amount of outstanding City debts, with a schedule of maturities on
bond issues.
(4) Anticipated net surplus or deficit for the ensuing fiscal year of each utility
owned or operated by the City and the proposed method of its disposition,
subsidiary budgets for each such utility giving detailed income and expenditure
information shall be attached as appendices to the budget.
(5) A capital program, which may be revised and extended each year to indicate
capital improvements pending or in process of construction or acquisition, and
shall include the following items which shall be attached as appendices to the
budget:
(a) A summary of proposed programs;
(b) A list of all capital improvements which are proposed to be
undertaken during the five fiscal years next ensuing, with appropriate
supporting information as to the necessity for such improvements;
(c) Cost estimates, method of financing and recommended time
schedules for each such improvement; and
(d) The estimated annual cost of operating and maintaining the facilities
to bid constructed or acquired.
(6) Such other information as may be required by the Council.
Submission
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.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
59
NOTE 1. BUDGETARY CONTROL – CONTINUED
Public notice and hearing
The Council shall post in the City Hall and publish in the official newspaper a general
summary of their [its] proposed budget and a notice stating:
(1) The times and places where copies of the message and budget are
available for inspection by the public; and
(2) The time and place, not less than ten nor more than 30 days after
such publication, for a public hearing on the budget.
Amendment before adoption
After the public hearing, the Council may adopt the budget with or without amendment.
In amending the budget, it may add or increase programs or amounts and may delete or
decrease any programs or amounts, except expenditures required by law or for debt
service or for estimated cash deficit, provided that no amendment to the budget shall
increase the authorized expenditures to an amount greater than the total of estimated
income plus funds available from prior years.
Adoption
The Council shall adopt its annual budget by ordinance, on one reading, by the 15th day
of September or as soon thereafter as practical. If the Council fails to adopt an annual
budget before the start of the fiscal year to which it applies, appropriations of the last
budget adopted shall be considered as adopted for the current fiscal year on a month to
month, pro rata basis, until the annual budget is adopted. 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.
Amendments after adoption
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.
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. The City Council made supplemental
budgetary appropriation changes during the fiscal year. The reported budgetary data
has been revised for these amendments legally authorized during the year.
COMBINING AND INDIVIDUAL
FUND STATEMENTS AND SCHEDULES
60
NON MAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
Special revenue funds are used to account for specific revenues that are legally restricted to
expenditures for particular purposes.
Police Investigation Fund – This fund is used to account for revenues that are
restricted to police investigation expenditures.
Fire/EMS Donation Fund – This fund accounts for revenues that are restricted for
Fire/EMS capital expenditures.
EDA Grant Fund – This fund is used to account for receipts and expenditures related to
the Economic Development Administration grant awarded to the City.
Park Land Dedication Fund – This fund is used to account for receipts from developers
to build or enhance neighborhood and community parks.
Court Security and Technology Fund – This fund accounts for revenues that are
restricted for court technology and building security. In 1999, the state legislature
authorized a court technology and court security fee for municipal court fines.
CAPITAL PROJECT FUNDS
Capital project funds are used to account for the acquisition and construction of major
capital facilities other than those financed by proprietary funds and trust funds.
2003 and 2005 Bond Construction Fund – This fund is used to account for the
construction of public safety facilities, and park, streets and drainage improvements that
are funded by the Permanent Improvement Bonds, Series 2003 and 2005.
PERMANENT FUND
The Permanent Fund is used to report resources that are legally restricted to the extent that
only earnings, not principal, may be used for purposes that support the City’s programs.
1776 Park Fund – This fund is used to account for assets held by the City in a trustee
capacity and the earnings benefit this City Park.
CITY OF FRIENDSWOOD, TEXAS
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
SEPTEMBER 30, 2009
61
Court
Police Fire/EMS EDA Park Land Security and
Investigation Donation Grant Dedication Technology
Cash and investments 30,221$ 55,149$ 900,000$ 302,413$ 255,036$
Receivables, net of allowance
Customer accounts - 29,617 - - -
Other 18 - - 217 4,057
Total assets 30,239$ 84,766$ 900,000$ 302,630$ 259,093$
LIABILITIES
Accounts payable 7,772$ 40,900$ 45,050$ - $ 800$
Accrued liabilities - - - - 111
Deferred revenue - - - - 4,043
Total liabilities 7,772 40,900 45,050 - 4,954
FUND BALANCES
Reserved for encumbrances - - 340,950 7,435 54,324
Unreserved, undesignated 22,467 43,866 514,000 295,195 199,815
Total fund balances 22,467 43,866 854,950 302,630 254,139
Total liabilities and fund balances 30,239$ 84,766$ 900,000$ 302,630$ 259,093$
ASSETS
LIABILITIES AND FUND BALANCES
Special Revenue Funds
62
Capital Projects Permanent
2003 and 2005 Total Nonmajor
Bond Governmental
Construction 1776 Park Funds
376,603$ 30,486$ 1,949,908$
- - 29,617
- 21 4,313
376,603$ 30,507$ 1,983,838$
- $ - $ 94,522$
50,003 - 50,114
- - 4,043
50,003 - 148,679
- - 402,709
326,600 30,507 1,432,450
326,600 30,507 1,835,159
376,603$ 30,507$ 1,983,838$
CITY OF FRIENDSWOOD, TEXAS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED SEPTEMBER 30, 2009
63
Court
Police Fire/EMS EDA Park Land Security and
Investigation Donation Grant Dedication Technology
Revenues
Fines and forfeitures - $ - $ - $ - $ 46,773$
Permits and fees - - - 159,482 -
Intergovernmental 14,796 - - - -
Investment earnings 247 513 - 5,045 -
Donations - 234,711 - - -
Miscellaneous 175 - - - -
Total revenues 15,218 235,224 - 164,527 46,773
Expenditures
Current:
General government - - - - 4,814
Public safety 5,400 157,225 - - 29,897
Community services - - - 1,200 -
Capital outlay - - 45,050 18,135 -
Debt service:
Principal - 70,617 - - -
Interest and fiscal charges - 7,825 - - -
Total expenditures 5,400 235,667 45,050 19,335 34,711
Other financing sources (uses)
Transfers in - - 900,000 - -
Transfers out - - - (186,750) -
Total other
financing sources (uses)- - 900,000 (186,750) -
Net change in fund balances 9,818 (443) 854,950 (41,558) 12,062
Fund balances, beginning of year 12,649 44,309 - 344,188 242,077
Fund balances, end of year 22,467$ 43,866$ 854,950$ 302,630$ 254,139$
Special Revenue Funds
64
Capital Projects Funds Permanent
2003 and 2005 Total Nonmajor
Bond Governmental
Construction 1776 Park Funds
- $ - $ 46,773$
- - 159,482
- - 14,796
2,681 437 8,923
- - 234,711
- - 175
2,681 437 464,860
1,098 - 5,912
- - 192,522
- - 1,200
214,685 - 277,870
-
- - 70,617
- - 7,825
215,783 - 555,946
10,000 - 910,000
- - (186,750)
10,000 - 723,250
(203,102) 437 632,164
529,702 30,070 1,202,995
326,600$ 30,507$ 1,835,159$
CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE – BUDGET AND ACTUAL
FIRE/EMS DONATION FUND
YEAR ENDED SEPTEMBER 30, 2009
65
Variance With
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues
Interest income 932$ 932$ 513$ (419)$
Donations 186,585 186,585 234,711 48,126
Total revenues 187,517 187,517 235,224 47,707
Expenditures
Current:
Public safety 105,765 105,765 157,225 (51,460)
Debt service:
Principal 73,757 73,757 70,617 3,140
Interest and fiscal charges 7,995 7,995 7,825 170
Total expenditures 187,517 187,517 235,667 (48,150)
Net change in fund balance - - (443) (443)
Fund balance, beginning of year 44,309 44,309 44,309 -
Fund balance, end of year 44,309$ 44,309$ 43,866$ (443)$
Budgeted Amounts
CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE – BUDGET AND ACTUAL
DEBT SERVICE FUND
YEAR ENDED SEPTEMBER 30, 2009
66
Variance With
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues
Property taxes 1,569,525$ 1,569,525$ 1,618,118$ 48,593$
Interest income 73,712 73,712 33,019 (40,693)
Total revenues 1,643,237 1,643,237 1,651,137 7,900
Expenditures
Debt service
Principal 1,595,081 1,595,081 716,676 878,405
Interest and fiscal charges 750,615 750,615 683,813 66,802
Total expenditures 2,345,696 2,345,696 1,400,489 945,207
Excess (deficiency) of revenues
over expenditures (702,459) (702,459) 250,648 953,107
Other financing sources (uses)
Transfers Out - - (1,372,468) (1,372,468)
Net change in fund balance (702,459) (702,459) (1,121,820) (419,361)
Fund balance, beginning of year 2,104,376 2,104,376 2,104,376 -
Fund balance, end of year 1,401,917$ 1,401,917$ 982,556$ (419,361)$
Budgeted Amounts
STATISTICAL SECTION
(Unaudited)
This part of the City of Friendswood, Texas’ comprehensive annual financial report
presents detailed information as a context for understanding what the information in the
financial statements, note disclosures, and required supplementary information says about
the government’s overall financial health.
FINANCIAL TRENDS INFORMATION - information to help the reader understand how the City's
financial performance and well-being have changed over time.
1 Net assets by component
2 Changes in net assets
3 Fund balances, governmental funds
4 Changes in fund balances, governmental funds
REVENUE CAPACITY INFORMATION - information to help the reader assess the City's most
significant local revenue source, the property tax.
5 Assessed value and actual value of taxable property
6 Direct and overlapping property tax rates
7 Principal property tax payers
8 Property tax levies and collections
DEBT CAPACITY INFORMATION - information to help the reader assess the affordability of the
City's current levels of outstanding debt and the City's ability to issue additional debt in the future.
9 Ratios of outstanding debt by type
10 Ratios of general bonded debt outstanding
11 Direct and overlapping governmental activities debt
12 Legal debt margin information
13 Pledged-revenue coverage
DEMOGRAPHIC AND ECONOMIC INFORMATION - information to help the reader understand the
environment within which the City's financial activities take place, and to help make comparisons over
time and with other governments.
14 Demographic and economic statistics
15 Principal employers
OPERATING INFORMATION - service and infrastructure data to help the reader understand how the
information in the City's financial report relates to the services the City provides and the activities it
performs.
16 Full-time equivalent city government employees by function/program
17 Operating indicators by function/program
18 Capital asset statistics by function/program
Sources: Unless otherwise noted, the information in these schedules is derived from the
comprehensive annual financial reports for the relevant year.
STATISTICAL SECTION
(Unaudited)
67 Table 1City of FriendswoodNet Assets by ComponentLast Seven Fiscal Years(accrual basis of accounting)(unaudited)2003200420052006200720082009Governmental activitiesInvested in capital assets, net of related debt49,742,075$ 29,632,831$ 32,533,863$ 32,849,446$ 71,777,140$ 70,591,236$ 69,313,348$ Restricted585,080 1,271,568 1,576,829 2,034,157 2,391,482 2,773,910 2,461,510 Unrestricted5,468,870 7,125,997 7,527,573 10,391,123 10,785,998 10,548,129 9,892,077 Total governmental activities net assets55,796,025$ 38,030,396$ 41,638,265$ 45,274,726$ 84,954,620$ 83,913,275$ 81,666,935$ Business-type activitiesInvested in capital assets, net of related debt17,656,296$ 17,174,525$ 16,823,526$ 16,815,130$ 16,884,376$ 20,375,620$ 21,122,644$ Restricted305,660 444,548 445,086 41,057 162,218 27,246 93,526 Unrestricted4,058,223 4,337,137 5,228,802 6,574,920 7,475,597 4,227,253 6,730,812 Total business-type activities net assets22,020,179$ 21,956,210$ 22,497,414$ 23,431,107$ 24,522,191$ 24,630,119$ 27,946,982$ Primary governmentInvested in capital assets, net of related debt67,398,371$ 46,807,356$ 49,357,389$ 49,664,576$ 88,661,516$ 90,966,856$ 90,435,992$ Restricted890,740 1,716,116 2,021,915 2,075,214 2,553,700 2,801,156 2,555,036 Unrestricted9,527,093 11,463,134 12,756,375 16,966,043 18,261,595 14,775,382 16,622,889 Total primary government net assets77,816,204$ 59,986,606$ 64,135,679$ 68,705,833$ 109,476,811$ 108,543,394$ 109,613,917$ Note:Accrual-basis financial information for the city as a whole is only available back to fiscal year 2003,the year GASB Statement 34 was implemented.Fiscal Year
68 Table 2City of FriendswoodChanges in Net AssetsLast Seven Fiscal Years(accrual basis of accounting)(unaudited)2003200420052006200720082009ExpensesGovernmental activities:General government2,923,552$ 3,375,283$ 3,438,849$ 3,330,439$ 4,472,602$ 4,339,620$ 5,164,623$ Public safety5,760,097 6,026,272 7,318,886 7,060,800 7,565,797 12,652,812 14,929,941 Community development and public works3,383,229 2,569,356 2,576,447 2,813,857 5,475,447 4,921,298 5,292,000 Community services2,747,438 3,081,717 3,075,023 3,098,013 3,420,244 3,841,387 4,002,165 Interest and fiscal charges128,192 465,770 478,495 857,602 835,511 803,733 678,705 Total governmental activities expenses14,942,508 15,518,398 16,887,700 17,160,711 21,769,601 26,558,850 30,067,434 Business-type activities:Water and sewer5,457,496$ 5,614,077$ 6,251,251$ 6,078,881$ 5,711,063$ 6,523,501$ 6,640,062$ Interest and fiscal charges1,063,940 999,219 963,355 962,989 1,583,551 1,543,859 1,604,174 Total business-type activities expenses6,521,436 6,613,296 7,214,606 7,041,870 7,294,614 8,067,360 8,244,236 Total primary government expenses21,463,944$ 22,131,694$ 24,102,306$ 24,202,581$ 29,064,215$ 34,626,210$ 38,311,670$ Program RevenuesGovernmental activities:Charges for services General government647,958$ 958,665$ 1,176,086$ 1,238,631$ 1,353,160$ 1,178,523$ 1,327,484$ Public safety9,433 9,141 15,013 54,653 23,267 21,356 46,773 Community development and public works1,865,086 822,927 758,487 805,710 998,625 838,060 602,265 Community services66,862 65,850 66,281 112,681 219,944 132,244 411,207 Operating grants and contributions661,568 778,261 1,271,119 771,477 489,707 4,021,908 5,755,038 Capital grants and contributions749,772 239,200 235,300 - - - - Total governmental activities program revenues4,000,679 2,874,044 3,522,286 2,983,152 3,084,703 6,192,091 8,142,767 Business-type activities:Charges for services Water and sewer7,275,746$ 7,203,736$ 8,390,761 8,392,277 8,021,040 8,624,546 12,028,895 Total business-type activities program revenues7,275,746 7,203,736 8,390,761 8,392,277 8,021,040 8,624,546 12,028,895 Total primary government program revenues11,276,425$ 10,077,780$ 11,913,047$ 11,375,429$ 11,105,743$ 14,816,637$ 20,171,662$ Net (Expense)/RevenuesGovernmental activities(10,941,829)$ (12,644,354)$ (13,365,414)$ (14,177,559)$ (18,684,898)$ (20,366,759)$ (21,924,667)$ Business-type activities754,310 590,440 1,176,155 1,350,407 726,426 557,186 3,784,659 Total primary government net expense(10,187,519)$ (12,053,914)$ (12,189,259)$ (12,827,152)$ (17,958,472)$ (19,809,573)$ (18,140,008)$ (Continued)Fiscal Year
69 2003200420052006200720082009General Revenues and Other Changes in Net AssetsGovernmental activities:Taxes Property 9,706,202$ 10,931,393$ 11,352,598$ 11,304,684$ 11,876,246$ 12,512,950$ 13,481,500$ Sales 2,875,071 1,119,328 3,199,136 3,658,699 3,904,436 3,767,526 3,871,995 Franchise1,058,726 2,833,290 1,176,460 1,220,581 1,239,167 1,317,166 1,363,221 Other79,691 71,028 53,790 11,940 16,186 25,429 28,859 Investment earnings 154,558 219,085 376,435 915,710 1,063,715 648,301 166,492 Gain (loss) on sale of capital assets - - - - 345,976 - 4,320 Miscellaneous30,826 - 51,503 21,556 4,152 73,026 214,484 Transfers664,102 714,278 763,361 680,850 875,616 981,016 547,456 Total governmental activities14,569,176 15,888,402 16,973,283 17,814,020 19,325,494 19,325,414 19,678,327 Business-type activities:Investment earnings 160,629$ 59,869$ 114,932$ 262,761$ 1,236,092$ 531,758$ 128,338$ Gain (loss) on sale of capital assets - - - - - - (48,678)$ Miscellaneous12,777 - 13,478 1,375 4,182 - - Extraordinary item100,000 - - - - - - Transfers(664,102) (714,278) (763,361) (680,850) (875,616) (981,016) (547,456) Total business-type activates(390,696) (654,409) (634,951) (416,714) 364,658 (449,258) (467,796) Total primary government14,178,480$ 15,233,993$ 16,338,332$ 17,397,306$ 19,690,152$ 18,876,156$ 19,210,531$ Change in Net AssetsGovernmental activities3,627,347$ 3,244,048$ 3,607,869$ 3,636,461$ 640,596$ (1,041,345)$ (2,246,340)$ Business-type activities363,614 (63,969) 541,204 933,693 1,091,084 107,928 3,316,863 Total primary government3,990,961$ 3,180,079$ 4,149,073$ 4,570,154$ 1,731,680$ (933,417)$ 1,070,523$ (Concluded)Note:Accrual-basis financial information for the city as a whole is only available back to fiscal year 2003,the year GASB Statement 34 was implemented.Fiscal Year
70 Table 3City of FriendswoodFund Balances, Governmental FundsLast Ten Fiscal Years(modified accrual basis of accounting)(unaudited)2000200120022003200420052006200720082009General FundReserved 849,908$ 451,293$ 1,196,255$ 683,459$ 635,182$ 511,197$ 1,313,829$ 601,646$ 1,037,279$ 686,404$ Unreserved2,838,042 5,989,106 2,766,577 5,055,679 5,971,319 7,032,843 8,973,646 9,926,479 9,177,390 9,185,590 Total general fund3,687,950$ 6,440,399$ 3,962,832$ 5,739,138$ 6,606,501$ 7,544,040$ 10,287,475$ 10,528,125$ 10,214,669$ 9,871,994$ All Other Governmental FundsReserved 68,627$ 77,175$ 109,799$ 254,568$ 829,701$ 1,395,767$ 4,220,225$ 3,575,592$ 2,310,481$ 1,385,265$ Unreserved, reported in:- - - - - - - - - - Special revenue funds77,039 268,247 177,390 263,242 411,229 175,192 404,749 558,653 643,223 1,075,343 Capital projects funds- - - 7,342,304 5,171,662 8,584,781 3,943,654 1,957,116 323,597 326,600 Permanent fund22,549 23,892 24,707 25,232 25,587 26,292 27,477 28,901 30,070 30,507 Total all other governmental funds168,215$ 369,314$ 311,896$ 7,885,346$ 6,438,179$ 10,182,032$ 8,596,105$ 6,120,262$ 3,307,371$ 2,817,715$ Fiscal Year
71 Table 4City of FriendswoodChanges in Fund Balances, Governmental FundsLast Ten Fiscal Years(modified accrual basis of accounting)(unaudited)2000200120022003200420052006200720082009RevenuesTaxes10,145,912$ 11,414,585$ 12,515,917$ 13,688,737$ 14,843,855$ 15,779,126$ 16,190,756$ 16,961,818$ 17,606,273$ 18,763,998$ Fines and penalties416,722 550,854 631,066 639,678 879,369 1,112,916 1,163,984 1,288,794 1,161,903 1,143,102 Licenses and permits970,868 1,192,899 922,808 856,721 807,041 717,607 769,352 1,017,502 944,756 966,797 Intergovernmental607,963 580,561 16,294,283 526,316 795,325 985,339 535,074 248,702 3,801,013 5,794,303 Investment earnings399,712 424,412 269,109 153,848 218,419 375,123 906,552 1,054,698 639,402 161,106 Donations- - - 235,749 215,535 213,381 219,353 229,939 265,535 272,911 Other revenues482,054 483,063 509,560 794,228 152,616 414,923 277,995 279,788 37,876 34,448 Total revenues13,023,231 14,646,374 31,142,743 16,895,277 17,912,160 19,598,415 20,063,066 21,081,241 24,456,758 27,136,665 ExpendituresGeneral government2,305,916 2,196,226 2,897,613 3,042,541 3,249,965 3,420,274 3,315,844 4,605,245 4,114,662 4,178,062 Public safety4,265,750 5,115,933 4,961,812 5,530,953 5,810,503 7,127,975 6,903,806 7,482,603 12,404,745 14,717,404 Community development and public works- - - 4,987,392 2,511,125 2,436,359 2,579,398 3,600,798 3,045,904 3,406,881 Public works2,640,988 1,201,584 2,092,488 - - - - - - - Community development535,084 641,047 19,464,924 - - - - - - - Community services 2,355,186 2,738,557 4,250,205 2,751,993 2,655,315 2,626,329 2,630,094 2,866,388 3,266,250 3,439,475 Capital outlay652,206 98,987 195,385 1,442,339 4,033,197 7,040,173 4,292,854 3,711,569 4,339,546 2,489,845 Debt principal payment525,897 616,470 548,205 468,987 469,930 459,422 608,184 658,073 774,584 787,293 Interest and fiscal agent charges450,762 511,175 188,958 213,741 476,207 594,076 757,402 739,487 704,136 691,638 Total expenditures13,731,789 13,119,979 34,599,590 18,437,946 19,206,242 23,704,608 21,087,582 23,664,163 28,649,827 29,710,598 Excess of revenuesOver (under) expenditures(708,558) 1,526,395 (3,456,847) (1,542,669) (1,294,082) (4,106,193) (1,024,516) (2,582,922) (4,193,069) (2,573,933) Other Financing Sources (Uses)Sale of capital assets- - - 15,826 - - 187,345 785,942 22,600 - Insurance recoveries- - - - - - - - 63,106 123,707 Issuance of debt574,856 47,393 229,460 8,701,495 - 8,024,224 - - - - Capital lease proceeds- - - - - - - - - 1,133,460 Refunding bonds issued- - 1,629,707 - - - - - - - Payment to refunding bond escrow agent- - (1,611,304) - - - - - - - Premium on issuance of debt- - - - - - - - - - Transfer in546,113 555,713 17,225,350 1,955,635 853,073 923,361 904,955 1,226,304 992,586 2,098,405 Transfer out- - (16,621,918) (1,382,860) (138,795) (160,000) (224,105) (350,688) (11,570) (1,613,970) Total other financing sources (uses)1,120,969 603,106 851,295 9,290,096 714,278 8,787,585 868,195 1,661,558 1,066,722 1,741,602 Net change in fund balance412,411$ 2,129,501$ (2,605,552)$ 7,747,427$ (579,804)$ 4,681,392$ (156,321)$ (921,364)$ (3,126,347)$ (832,331)$ Debt service as a percentage of noncapital expenditures7.5%8.7%2.1%4.0%6.2%6.3%8.1%7.0%6.1%5.4%Note:From 1997 to 2002, Public Works and Community Development were two separate departments. From 2003 to 2009, the departments were combined. In 2001 and 2002,the City participated in the FEMA Hazard Mitigation Grant Buyout Program. The City's participation costs resulted in a reduction of fund balance. In 2002, the Cityadopted a Financial Policy. Based on this policy, undesignated fund balance shall be allowed to accumulate to establish a 90-day operating reserve. After the reserve isestablished, additional undesignated funds are allowed to accumulate for future capital projects.Fiscal Year
72 Table 5City of FriendswoodAssessed Value and Actual Value of Taxable PropertyLast Ten Fiscal Years(Unaudited)FiscalTotalEstimatedYearCommercialTotal Taxable DirectActualEndedResidentialand IndustrialOtherTax ExemptAssessedTaxTaxableSeptember 30,PropertyPropertyPropertyPropertyValueRateValue20001,115,454,667$ 80,732,240$ 182,202,628$ 81,388,930$ 1,459,778,465$ 0.63850 1,378,389,535$ 20011,235,737,251 88,524,370 185,220,540 88,005,650 1,597,487,811 0.63850 1,509,482,161 20021,418,354,411 101,081,380 170,988,340 90,631,200 1,781,055,331 0.63850 1,690,424,131 20031,549,261,881 109,659,080 176,329,200 96,366,250 1,931,616,411 0.63850 1,835,250,161 20041,770,911,545 116,739,133 186,106,639 105,017,040 2,178,774,357 0.63850 2,073,757,317 20051,868,119,395 119,696,390 173,923,130 121,988,410 2,283,727,325 0.63850 2,161,738,915 20061,984,426,335 122,337,518 167,808,785 125,184,070 2,399,756,708 0.60400 2,274,572,638 20072,147,192,985 151,086,039 193,971,876 147,461,610 2,639,712,510 0.58210 2,492,250,900 20082,289,027,422 154,237,707 202,571,688 149,658,030 2,795,494,847 0.57640 2,645,836,817 20091,923,530,682 135,428,527 169,686,128 108,171,840 2,336,817,177 - 2,228,645,337 Source: Galveston County Tax Assessor/Collector and City of Friendswood records.Note: Property in the City of Friendswood is reassessed once every two years on average. (Source: Galveston Central Appraisal District)Tax rates per $100 of assessed value.Residential property includes both single-family and multi-family properties.
73 Table 6City of FriendswoodDirect and Overlapping Property Tax RatesLast Ten Fiscal Years(unaudited)(rate per $100 of assessed value)FiscalYearFriendswoodClear CreekGalveston CountyEndedDebtTotalIndependentIndependentDrainageGalvestonHarrisSeptember 30,General ServiceDirectSchool DistrictSchool DistrictDistrictCountyCounty20000.5542$ 0.0843$ 0.6385$ 1.5350$ 1.5986$ 0.1500$ 0.5450$ 0.64173$ 20010.5547 0.0838 0.6385 1.5850 1.7008 0.1500 0.5400 0.64173 20020.5547 0.0838 0.6385 1.6170 1.7250 0.1500 0.5654 0.63998 20030.5547 0.0838 0.6385 1.6370 1.7400 0.1550 0.6063 0.63998 20040.5547 0.0838 0.6385 1.6370 1.7300 0.1500 0.6063 0.63998 20050.5547 0.0838 0.6385 1.6370 1.7450 0.1483 0.6388 0.63998 20060.5243 0.0797 0.6040 1.5070 1.7750 0.1450 0.5874 0.63998 20070.5120 0.0701 0.5821 1.5700 1.6300 0.1450 0.5874 0.63998 20080.5016 0.0748 0.5764 1.1770 1.3200 0.1425 0.5686 0.62998 20090.5097 0.0700 0.5797 1.3670 1.3600 0.1425 0.5586 0.62998 Source: Galveston County Tax Assessor/Collector and City of Friendswood records.Note:Overlapping rates are those of local and county governments that apply to property owners within the City of Friendswood. Not all overlapping rates applyto all property owners. Overlapping rates for Friendswood Independent School District, Galveston County Consolidated Drainage District and GalvestonCounty apply only to residents whose property is in Galveston County. Overlapping rates for Clear Creek Independent School District and Harris Countyapply only to residents whose property is in Harris County.City Direct RatesOverlapping Rates
74
Table 7
City of Friendswood
Principal Property Tax Payers
Current Year and Nine Years Ago
(Unaudited)
Percentage Percentage
of Total City of Total City
Taxable Taxable Taxable Taxable
Assessed Assessed Assessed Assessed
Taxpayer Value Value Value Value
Texas-New Mexico Power Co. 11,519,630$ 0.49%11,353,480$ 1.00%
H.E. Butt Grocery Company 8,731,630 0.37%- -
Southwestern Bell Telephone Co. 7,874,300 0.34%12,177,530 1.07%
HCP Friendswood LLC 6,995,240 0.30%- -
Buzbee Family LTD Partnership 6,170,820 0.26%- -
Friendswood Retirement 5,564,197 0.24%8,346,695 0.74%
MB Friendswood Parkwood LP 4,638,250 0.20%- -
Kroger Texas, LP 4,000,010 0.17%- -
Comcast of Houston LLC 3,952,610 0.17%- -
Raton Plaza Shop Cntr Investors LTD 3,800,000 0.16%- -
Autumn Creek Dev LTD 5,085,520 0.22%7,842,820 0.69%
Friendswood Huntington W oods 3,612,300 0.15%- -
Maxi-Ban LTD 3,572,840 0.15%4,930,620 0.43%
Howard, Jack A 3,524,260 0.15%- -
HEB Pantry Foods 3,516,943 0.15%- -
Mystic LTD 3,414,847 0.15%3,933,640 0.35%
Clover Gate Inc 2,912,920 0.12%- -
GP Tabani Akron LLC 2,776,230 0.12%- -
Frontier Land V P L L 2,652,925 0.11%- -
McKinney Real Estate 2,645,380 0.11%- -
Exxon Corporation - - 24,477,740 2.16%
Blackhawk Apartments - - 8,766,020 0.77%
Southwest Properties - - 7,539,980 0.67%
Albertson's - - 5,592,330 0.49%
Total 96,960,852$ 4.15%94,960,855$ 8.38%
All other taxpayers 2,239,856,325$ 95.85%1,038,863,390$ 91.62%
2,336,817,177$ 100.00%1,133,824,245$ 100.00%
Source: Galveston County Appraisal District
2009 2000
75
Table 8
City of Friendswood
Property Tax Levies and Collections
Last Ten Fiscal Years
(Unaudited)
Fiscal Collections
Year Taxes Levied (adjustments)
Ended for the Percentage in Subsequent Percentage
September 30,Fiscal Year Amount of Levy Years Amount of Levy
2000 7,239,468 7,125,877 98.43%108,976 7,234,853 99.94%
2001 7,906,786 7,809,643 98.77%92,313 7,901,956 99.94%
2002 8,863,904 8,721,196 98.39%133,765 8,854,961 99.90%
2003 9,642,413 9,496,887 98.49%132,116 9,629,003 99.86%
2004 10,785,308 10,630,820 98.57%136,812 10,767,632 99.84%
2005 11,221,282 11,078,265 98.73%126,680 11,204,945 99.85%
2006 11,151,572 11,019,314 98.81%107,446 11,126,760 99.78%
2007 11,740,541 11,532,882 98.23%155,247 11,688,129 99.55%
2008 12,351,183 12,193,715 98.73%136,340 12,330,055 99.83%
2009 13,230,005 13,113,928 99.12%- 13,113,928 99.12%
Source: Galveston County Tax Assessor/Collector and City of Friendswood records.
Collected within the
Fiscal Year of the Levy Total Collections to Date
76 Table 9City of FriendswoodRatios of Outstanding Debt by TypeLast Ten Fiscal Years(Unaudited)GeneralCertificatesGeneralCertificatesWaterTotalPercentage ofFiscalObligationofRevenueCapitalObligationofRevenuePrimaryPersonalPerYearBondsObligationBondsLeasesBondsObligationBondsGovernmentIncomeCapita 2000600,219 1,830,000 - 775,443 1,603,691 5,255,000 8,388,842 18,453,195 0.25%581$ 2001445,725 1,760,000 - 713,430 1,246,827 5,080,000 14,074,887 23,320,869 0.30%713 20021,915,518 - - 713,060 2,994,109 2,714,826 14,091,221 22,428,734 0.28%670 200310,375,891 - - 510,858 2,468,558 2,635,000 14,185,000 30,175,307 0.36%893 200410,059,865 - - 362,154 1,830,135 2,535,000 14,160,000 28,947,154 0.33%848 200517,590,000 - - 237,597 3,310,000 470,000 14,020,000 35,627,597 0.39%1,040 200617,150,000 - - 168,957 2,855,000 280,000 30,665,000 51,118,957 0.50%1,490 200716,660,000 - - 96,380 2,375,000 50,000 30,515,000 49,696,380 0.46%1,430 200816,065,000 - - 16,351 1,680,000 - 30,355,000 48,116,351 N/A1,355 200915,445,000 - - 982,518 865,000 - 42,260,000 59,552,518 N/A1,582 Notes:Details regarding the City's outstanding debt can be found in the notes to the financial statements.See Table 14 for personal income and population data. These ratios are calculated using personal income and population for the prior calendar year.Personal income data provided on Table 14 is for the County of Galveston. Data was not available specific to the City of Friendswood and therefore is notinclulded on this table.N/A - Information is not available.Governmental ActivitiesBusiness-Type Activities
77 Table 10City of FriendswoodRatios of Net General Bonded Debt OutstandingLast Ten Fiscal Years(Unaudited)Percentage ofGeneralLess Debt NetActual TaxableFiscalAssessedObligationServiceGeneralValue ofPerYearPopulationValueBondsFundsBonded DebtProperty Capita 200031,761 1,459,778,465$ 2,430,219$ 68,627$ 2,361,592$ 0.16%74$ 200132,720 1,597,487,811 2,205,725 77,175 2,128,550 0.13%65 200233,500 1,781,055,331 1,915,518 109,799 1,805,719 0.10%54 200333,800 1,931,616,411 10,375,891 254,568 10,121,323 0.52%299 200434,152 2,178,774,357 10,059,865 829,701 9,230,164 0.42%270 200534,272 2,283,727,325 17,590,000 1,395,767 16,194,233 0.71%473 200634,306 2,399,756,708 17,150,000 1,595,397 15,554,603 0.65%453 200734,759 2,639,712,510 16,660,000 1,813,320 14,846,680 0.56%427 200835,500 2,795,494,847 16,065,000 2,104,376 13,960,624 0.50%393 200937,653 2,336,817,177 15,445,000 2,355,024 13,089,976 0.56%348 Note:Details regarding the City's outstanding debt can be found in the notes to the financial statements.General Bonded Debt Outstanding
78
Table 11
City of Friendswood
Direct and Overlapping Governmental Activities Debt
As of September 30, 2009
(Unaudited)
Estimated
Estimated Share of
Debt Percentage Overlapping
Governmental Unit Outstanding Applicable Debt
Debt repaid with property taxes
Friendswood Independent School District 118,484,978$ 100.00%118,484,978$
Clear Creek Independent School District 700,303,790 2.329%16,310,075
Galveston County 319,844,000 4.37%13,961,191
Harris County 3,413,038,000 0.520%17,744,385
Subtotal, overlapping debt 166,500,629$
City direct debt 16,427,518$
Total direct and overlapping debt 182,928,147$
Sources: Information was obtained from either the governmental unit's website or the finance department of the
governmental unit.
Notes: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City.
This schedule estimates the portion of the outstanding debt of those overlapping governm ents that is borne by
the residents and businesses of the City of Friendswood. This process recognizes that, when considering the
City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses
should be taken into account. However, this does not imply that every taxpayer is a resident--and therefore
responsible for repaying the debt--of each overlapping government.
79
Table 12
City of Friendswood
Legal Debt Margin Information
(Unaudited)
As a City Council-City Manager form of government, the City of Friendswood is not limited by law in the amount
of debt it may issue. The City's charter states:
"In keeping with the Constitution of the State of Texas and not contrary thereto, the City of Friendswood
shall have the power to borrow money on the credit of the City for any public purpose not now or hereafter
prohibited by the Constitution and laws of the State of Texas, and shall have the right to issue all tax bonds,
revenue bonds, funding and refunding bonds, time warrants and other evidence of indebtedness as now
authorized or as may hereafter be authorized to be issued by cities and towns by the laws of the State of
Texas."
Article 11, Section 5 of the State of Texas Constitution States in part:
"but no tax for any pose shall ever be lawful for any one year, which shall exceed two and one-half percent
of the taxable property of such city"
The tax rate for fiscal year ending September 30, 2009, is $.5797 per $100 of assessed valuation with assessed
valuation being 100% of market value.
80
Table 13
City of Friendswood
Pledged-Revenue Coverage
Last Ten Fiscal Years
(Unaudited)
Utility Less:Net
Fiscal Service Operating Available Debt Service
Year Charges Expenses Revenue Principal Interest Coverage
2000 7,211,716 3,310,375 3,901,341 - 441,600 8.83$
2001 6,599,787 3,253,593 3,346,194 325,000 546,621 3.84
2002 7,506,333 3,797,453 3,708,880 25,000 850,874 4.23
2003 7,275,746 4,401,694 2,874,052 25,000 772,351 3.60
2004 7,203,736 4,238,810 2,964,926 25,000 769,936 3.73
2005 8,390,761 4,769,885 3,620,876 140,000 766,788 3.99
2006 8,392,277 4,660,868 3,731,409 160,000 445,351 6.16
2007 8,021,040 4,338,819 3,682,221 150,000 1,441,234 2.31
2008 8,624,546 5,143,516 3,481,030 160,000 1,416,465 2.21
2009 12,028,895 5,249,388 6,779,507 215,000 1,986,015 3.08
Notes:Details regarding the City's outstanding debt can be found in the notes to the financial statements.
Operating expenses do not include interest, depreciation or amortization expenses.
Waterworks and Sewer Revenue Bonds
81
Table 14
City of Friendswood
Demographic and Economic Statistics
Last Ten Calendar Years
(Unaudited)
Per
Personal Capita
Calendar Estimated Income Personal Unemployment
Year Population (thousands)Income Rate
2000 31,761 7,384,627,000$ 29,449$ 2.8%
2001 32,720 7,677,185,000 30,116 3.1%
2002 33,500 7,964,860,000 30,537 3.4%
2003 33,800 8,356,254,000 31,313 3.8%
2004 34,152 8,719,688,000 32,055 3.5%
2005 34,272 9,192,246,000 33,146 3.9%
2006 34,306 10,144,967,000 36,284 3.0%
2007 34,759 10,913,785,000 38,553 3.4%
2008 35,500 - - 4.9%
2009 37,653 - - 6.2%
Sources:Population information was provided from past financial reports. Unemployment rates
were obtained from the U. S. Department of Labor Bureau of Labor Statistics website
or the Texas W orkforce Commission website. Personal Income and Per Capita
Personal Income were obtained from the U.S. Bureau of Economic Analysis website.
Note:Personal Income and Per Capita Personal Income numbers are for Galveston County;
2008 and 2009 numbers were not available.
82
Table 15
City of Friendswood
Principal Employers
Current Year and Ten Years Ago
(Unaudited)
Percentage Percentage
Estimated of Total City Estimated of Total City
Employer Employees Workforce Employees Workforce
Friendswood ISD 692 28.73%628 51.06%
HEB 349 14.49%80 6.50%
City of Friendswood 233 9.67%132 10.73%
Kroger 225 9.34%52 4.23%
Clear Creek ISD 177 7.35%2 - 0.00%1
Friendship Haven Nursing Home 145 6.02%100 8.13%
McDonalds 80 3.32%- 0.00%
Friendswood Healthcare (Autumn Hills) 70 2.91%85 6.91%
Emeritus 69 2.86%40 3.25%
Timber Creek Golf Club 65 2.70%- 0.00%
U.S. Post Office 64 2.66%70 5.69%
Sonic 62 2.57%- 0.00%
UTMB 56 2.32%- 0.00%
Perry & Sons Market and Grille 42 1.74%- 0.00%1
Gary Greene Realtors 40 1.66%- 0.00%
Village on the Park 40 1.66%43 3.50%
- -
Total 2,409 100.00%1,230 100.00%
Source: City Economic Development Division
1 Data was not available for fiscal year 1999.
2 Includes W edgewood Elementary and Brookside Intermediate.
2009 1999
83 Table 16City of FriendswoodFull-time Equivalent City Government Employees by Function/ProgramLast Ten Fiscal Years(Unaudited)2000200120022003200420052006200720082009Function/ProgramGeneral Government:City Manager4.50 4.50 5.50 5.50 5.50 5.50 5.50 5.50 5.50 5.50 City Secretary4.00 4.00 4.00 4.00 4.00 4.00 4.00 5.00 5.00 5.00 Administrative Services18.64 19.64 20.64 21.70 22.72 24.44 25.81 26.19 27.20 27.20 Public Safety:Police56.94 59.94 62.94 65.06 67.40 70.07 72.06 81.41 83.90 79.40 Fire marshall and fire12.50 12.50 12.50 12.58 12.85 12.85 4.50 6.11 6.10 6.10 Public Works:17.00 17.00 17.00 - - - - - - - Community Development:14.00 14.00 15.00 - - - - - - - Community Development andPublic Works:- - - 34.00 34.00 34.00 35.00 36.00 36.00 36.70 Community Services:29.86 29.92 30.42 30.43 30.43 30.43 31.01 32.18 32.20 32.20 Water:6.00 6.00 9.00 9.00 9.00 9.00 9.00 9.00 9.00 10.30 Sewer:5.00 5.00 6.00 6.00 7.00 7.00 8.00 8.00 8.00 9.00 Total City Employees:168.44172.50183.00188.27192.90197.29194.88209.39212.90211.40Source: City of Friendswood Budget DocumentsNotes: Beginning with fiscal year 2006, the fulltime equivalent for Fire Marshal and Fire include only the Fire Marshal Department. The Cityhas a contract with the Friendswood Volunteer Fire Department and there are no employees paid directly by the City.From 1998 to 2002, public works and community development were two separate departments. From 2003 to 2009, the departments werecombined.Full-time Equivalent Employees as of September 30
84 Table 17City of FriendswoodOperating Indicators by Function/ProgramLast Ten Fiscal Years(Unaudited)2000200120022003200420052006200720082009Function/ProgramGeneral Government:Building permits issued1,125 1,252 1,266 1,048 851 1,129 882 975 872 1,189 Building inspections conducted11,121 15,576 12,554 10,841 10,051 12,641 12,264 11,135 11,472 6,673 Police:- Physical arrests463 556 625 752 1,189 1,041 1,804 1,923 1,868 1,794 Parking violations30 31 34 74 45 22 30 34 46 33 Traffic violations4,436 6,117 6,387 9,754 11,196 12,053 12,623 11,374 7,897 7,821 Fire Marshall:Inspections671 451 383 1,065 812 731 668 1,300 1,312 1,653 Fire:Emergency responses2,051 2,283 2,264 2,285 2,395 2,453 2,497 2,723 2,794 2,950 Fires extinguished110 105 84 79 82 93 75 74 118 102 Parks and Recreation:Recreation participantsNANANANANANANANA7,547 12,283 Facility reservationsNANANANANANANA1,115 1,065 1,727 Library:Volumes in collection87,357 87,181 87,639 88,185 88,737 90,163 92,633 93,028 96,100 94,512 Total volumes borrowed263,374 274,204 279,850 290,044 280,520 281,060 300,241 308,718 323,323 350,892 Water:New connections300 665 242 270 388 208 209 289 202 46 Water main breaks- - - 10 54 76 105 44 73 73 Average daily consumption5,257 3,803 4,008 4,172 3,957 4,094 3,886 3,472 4,217 4,209 (thousands of gallons)Peak daily consumption11,479 8,649 10,081 11,491 10,718 9,935 7,030 6,358 11,004 7,187 Sewer:Average daily sewage treatment2,107 3,050 3,050 3,332 3,258 3,081 3,064 3,425 3,120 2,950 (thousands of gallons)Maximum daily flow6,117 13,913 13,913 10,180 8,563 10,587 10,484 10,484 7,520 9,537 (thousands of gallons)Source: Various City departments and prior year CAFRsNA - Information is not available.Fiscal YearFiscal Year
85 Table 18City of FriendswoodCapital Asset Statistics by Function/ProgramLast Ten Fiscal Years(Unaudited)2000200120022003200420052006200720082009Function/ProgramPoliceStations1111111111Patrol units14141415151618282724FireStations3333333334Public WorksStreets - paved (miles)98105105105157157179150159160Streets - unpaved (miles)2111441022Traffic signals0000333333Parks and RecreationAcreage189189189189189189189189189189Parks8888888888Swimming pool1111111111Tennis courts4444444444Library1111111111WaterWater mains (miles)151155157160160165179180180181Fire hydrants1,2501,2501,2501,2501,2501,2501,2501,2751,2751,275Connections9,42310,08810,33010,60010,98811,19611,40511,74811,98212,057Storage capacity 5,9935,9935,9935,9935,9935,9935,9935,9935,9935,993(thousands of gallons)SewerSanitary sewers (miles)151155155160160165153155155156Connections8,9799,4149,65810,24010,33110,53710,68210,90211,11511,256Storm sewers (miles)85858586929292959596Treatment capacity4,8504,8504,8504,8504,8504,8504,8504,8504,8504,850(thousands of gallons)Source: Various City departments and prior year CAFRsFiscal Year