HomeMy WebLinkAboutComprehensive Annual Financial Report - FY2011
CITY OF FRIENDSWOOD, TEXAS
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
YEAR ENDED
SEPTEMBER 30, 2011
Officials Issuing Report:
Roger C. Roecker
City Manager
Cindy S. Edge
Director of Administrative Services
CITY OF FRIENDSWOOD, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED SEPTEMBER 30, 2011
C O N T E N T 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 23-55
Required Supplementary Information
Schedule of Funding Progress for Participation in
Texas Municipal Retirement System 56
Schedule of Funding Progress – Post Employment Benefits Plan Other
Than Pensions 57
Schedule of Revenues, Expenditures, and Changes in Fund Balance
Budget and Actual – General Fund 58-64
Notes to Required Supplementary Information 65-67
Combining and Individual Fund Statements and Schedules
Non-major Governmental Funds 68
Combining Balance Sheet 69
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances 70
CITY OF FRIENDSWOOD, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED SEPTEMBER 30, 2011
C O N T E N T 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 71
Debt Service Fund 72
STATISTICAL SECTION (Unaudited) Table Page(s)
Financial Trends
Net Assets by Component 1 73
Changes in Net Assets 2 74-75
Fund Balances, Governmental Funds 3 76
Changes in Fund Balances, Governmental Funds 4 77
Revenue Capacity
Assessed Value and Actual Value of Taxable Property 5 78
Direct and Overlapping Property Tax Rates 6 79
Principal Property Tax Payers 7 80
Property Tax Levies and Collections 8 81
Debt Capacity
Ratios of Outstanding Debt by Type 9 82
Ratios of Net General Bonded Debt Outstanding 10 83
Direct and Overlapping Governmental Activities Debt 11 84
Legal Debt Margin Information 12 85
Pledged-Revenue Coverage 13 86
Demographic and Economic Information
Demographic and Economic Statistics 14 87
Principal Employers 15 88
Operating Information
Full-Time Equivalent City Government Employees
by Function/Program 16 89
Operating Indicators by Function/Program 17 90
Capital Asset Statistics by Function/Program 18 91
INTRODUCTORY SECTION
v
CITY OF FRIENDSWOOD, TEXAS
PRINCIPAL OFFICIALS AS OF
SEPTEMBER 30, 2011
Elected Officials Position Term Expires
David J.H. Smith Mayor May-12
Michael E. Barker Council Member - Position No. 1 May-12
Billy J. Enochs Council Member - Position No. 2 May-14
Jim Hill Council Member - Position No. 3 May-12
Patrick J. McGinnis, MD Council Member - Position No. 4 May-13
John H. Scott Council Member - Position No. 5 May-14
Deirdre Carey Brown Council Member - Position No. 6 May-13
Key Staff Position
Roger C. Roecker City Manager
Ross, Banks, May, Cron & Cavin, P.C.City Attorney
Melinda Welsh 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. Woltz Judge - Municipal Court
Robert B. Weiners Police Chief
Kazem Hamidian Public Works Director
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vii
CITY OF FRIENDSWOOD
ORGANIZATIONAL CHART
FINANCIAL SECTION
AN INDEPENDENT
MEMBER OF BAKER TILLY
INTERNATIONAL
WEAVER AND TIDWELL LLP
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, 2011, 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 opinions on these financial statements
based on our audit. We 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 and the report of the other
auditors provide a reasonable basis for our opinions.
In our opinion, based on our audit and the report of the 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 as of September 30,
2011, 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.
As discussed in Note 1 to the basic financial statements, the City implemented Governmental
Accounting Standards Board (GASB) Statement No. 54, Fund Balance Reporting and
Governmental Fund Type Definitions, for the year ended September 31, 2011.
To the Honorable Mayor,
City Council and City Manager
City of Friendswood, Texas
Page 2
2
In accordance with Government Auditing Standards, we have also issued our report dated
March 28, 2012, on our consideration of the City’s internal control over financial reporting and
on 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 over financial reporting and compliance and the results of that testing,
and not to provide an opinion on 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 56), the Schedule of
Funding Progress – Post Employment Benefits Other Than Pensions (on page 57), and the
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual –
General Fund (on pages 58 through 64) 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. We 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 info rmation 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 as a whole. The introductory section,
combining and individual nonmajor fund financial statements 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 financial statements 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 TIDWELL, L.L.P.
Houston, Texas
March 28, 2012
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Management’s Discussion and Analysis
(Unaudited)
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, 2011. 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.
FINANCIAL HIGHLIGHTS
The assets of the City of Friendswood exceeded its liabilities at the close of the most recent
fiscal year by $114,086,244 (net assets). Of this amount, $8,227,254 is unrestricted net
assets for governmental activities and $11,373,311 for business-type activities.
The City’s net assets increased by $4,343,695. This resulted in an increase of $2,475,504
in unrestricted net assets and an increase of $2,785,305 in net assets invested in capital
assets net of related debt offset by a decrease of $917,114 in restricted assets.
As of the close of the current fiscal year, the City of Friendswood’s governmental funds
reported combined ending fund balances of $13,108,696. Of the ending fund balance,
$4,260,151 is restricted for specific purposes (e.g., capital projects, debt service); $1,085,527
is assigned by the City for specific purposes; $251,020 is nonspendable and $7,511,998 is
unassigned 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
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, water distribution and sewer collection lines, etc.), to assess the overall financial
condition of the City.
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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 the governmental fund statements.
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 West 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.
The City maintains eleven 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 nine 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.
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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 net assets exceed liabilities by $114.1 million as of September 30, 2011. The largest
portion of the City’s net assets (81%) reflects its investments in capital assets (e.g., land,
buildings, equipment, improvements, construction in progress and infrastructure), less any
related debt used to acquire those assets that are still outstanding. The City uses these capital
assets to provide services to citizens; therefore, these assets are not available for future
spending. It should be noted that the resources needed to repay this debt must be provided
from other sources, since the capital assets themselves cannot be used to liquidate these
liabilities.
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CITY OF FRIENDSWOOD’S NET ASSETS
2011 2010 2011 2010 2011 2010
Current and other assets 16,625,116$ 14,377,943$ 21,479,959$ 19,981,212$ 38,105,075$ 34,359,155$
Capital assets 87,380,310 86,241,576 54,283,911 52,501,312 141,664,221 138,742,888
Total assets 104,005,426 100,619,519 75,763,870 72,482,524 179,769,296 173,102,043
Long-term liabilities 24,450,283 16,644,650 34,093,976 40,724,281 58,544,259 57,368,931
Other liabilities 3,824,966 3,069,555 3,313,827 2,921,008 7,138,793 5,990,563
Total liabilities 28,275,249 19,714,205 37,407,803 43,645,289 65,683,052 63,359,494
Net assets:
Invested in capital assets,
net of related debt 66,580,049 70,480,334 26,251,346 19,565,756 92,831,395 90,046,090
Restricted 922,874 1,977,801 731,410 593,597 1,654,284 2,571,398
Unrestricted 8,227,254 8,447,179 11,373,311 8,677,882 19,600,565 17,125,061
Total net assets 75,730,177$ 80,905,314$ 38,356,067$ 28,837,235$ 114,086,244$ 109,742,549$
Governmental Activities Business-type Activities Totals
Combined governmental and business-type activities increased the City’s net assets by
$4,343,695 in 2011. The following table provides a summary of the City’s operations for the
year ended September 30, 2011. The Governmental activities decreased the City of
Friendswood’s net assets by ($5,175,137). This decrease is primarily related to the transfer
($5,529,943) from the Debt Service fund to the Water and Sewer fund to refund the Series 2001
Waterworks and Sewer System revenue bonds. Business-type activities increased the City’s
net assets by $9,518,832. This increase is related primarily to the following: charges for
services exceeded operating expenses ($5,771,431) as a result of increased water revenue due
to extreme drought conditions while expenses remained fairly constant and the transfer
($5,529,943) discussed above from the Debt Service fund to the Water and Sewer fund to
refund the Series 2001 Waterworks and Sewer System revenue bonds.
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CITY OF FRIENDSWOOD’S CHANGES IN NET ASSETS
2011 2010 2011 2010 2011 2010
Revenues:
Program revenues:
Charges for services 2,311,298$ 2,115,519$ 12,726,936$ 9,854,083$ 15,038,234$ 11,969,602$
Operating grants
and contributions 3,150,808 2,819,418 - - 3,150,808 2,819,418
Capital grants
and contributions - - - - - -
General revenues:
Property taxes 13,944,725 13,664,765 - - 13,944,725 13,664,765
Sales taxes 4,002,740 3,853,161 - - 4,002,740 3,853,161
Franchise taxes 1,598,407 1,510,794 - - 1,598,407 1,510,794
Other taxes 28,883 28,859 - - 28,883 28,859
Investment earnings 110,863 93,018 55,163 87,056 166,026 180,074
Miscellaneous 150,059 165,192 - 182,198)( 150,059 17,006)(
Total revenues 25,297,783 24,250,726 12,782,099 9,758,941 38,079,882 34,009,667
Expenses:
General government 4,876,064 5,145,447 - - 4,876,064 5,145,447
Public safety 10,548,568 10,175,028 - - 10,548,568 10,175,028
Public Works 3,517,707 3,853,685 - - 3,517,707 3,853,685
Community development 1,284,188 1,203,204 - - 1,284,188 1,203,204
Community services 3,058,313 3,034,523 - - 3,058,313 3,034,523
Library 979,978 979,084 - - 979,978 979,084
Water and sewer - - 6,955,505 6,663,308 6,955,505 6,663,308
Interest on long-term
debt 871,790 789,652 1,644,074 2,037,104 2,515,864 2,826,756
Total expenses 25,136,608 25,180,623 8,599,579 8,700,412 33,736,187 33,881,035
Increases/(Decrease) in net assets
before transfers 161,175 929,897)( 4,182,520 1,058,529 4,343,695 128,632
Transfers 5,336,312)( 168,276 5,336,312 168,276)( - -
Change in net assets 5,175,137)( 761,621)( 9,518,832 890,253 4,343,695 128,632
Net assets, beginning 80,905,314 81,666,935 28,837,235 27,946,982 109,742,549 109,613,917
Net assets, ending 75,730,177$ 80,905,314$ 38,356,067$ 28,837,235$ 114,086,244$ 109,742,549$
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 $13,108,696. Approximately 57% of this amount ($7,511,998) is unassigned
fund balance; however, $5.1 million is set aside for the 90-day operating reserve, as set forth in
the City’s financial policies. $5,596,698 is nonspendable, restricted or assigned as follows:
Nonspendable (2%)
Prepaid items $220,151
Permanent fund 30,869
Restricted (33%)
Authorized construction $3,203,056
State and/or federal statutes 300,674
Fire/EMS Donations 60,238
City ordinances 290,224
Debt Service 308,231
Public education and
government channels 97,728
Assigned (8%)
Encumbrances $1,085,527
In the General Fund, fund balance decreased by $214,869. This decrease is a result of use of
undesignated fund balance for street maintenance and capital improvements. In the Debt
Service Fund, fund balance decreased by $286,191. This decrease is a result of property taxes
collected exceeding debt service payments by $508,700 offset by other financing sources of
$222,509 related to the issuance of the 2010B Permanent Improvement and Refunding bonds.
Proprietary Fund
Unrestricted net assets of the respective proprietary funds are Enterprise, (water and sewer),
$11,373,311 and Internal Service Fund (vehicle replacement fund), $434,173. The net assets
of the water and sewer fund increased $9,518,832. Water revenue increased due to extreme
drought conditions while expenditures remained fairly constant allowing for operating income of
$5,771,431. The remaining increase in water and sewer fund net assets is related to the
transfer in from the Debt Service fund of $5,529,943 to refund the Series 2001 Waterworks and
Sewer System revenue bonds. The net assets of the internal service fund increased by
$20,965 primarily as a result of gains recognized on sales of capital assets.
General Fund Budgetary Highlights
The City made revisions to the original appropriations approved by the City Council. Budgeted
revenues increased by $162,064 or 0.8% and expenditures were increased by $4,890,270 or
23.3%. In addition to the appropriation for prior year encumbrances totaling $1.7 million, the
expenditure budget increased by $2.7 million as a result of fund balance uses for capital
improvement projects.
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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, 2011, is $141,664,221. 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 Downtown Drainage Improvement project was completed. The total cost of the
project was approximately $3.0 million. The City’s cost of this project was approximately
$1.5 million and the remaining $1.5 million was paid for by Galveston County.
The Construction phase of the Beamer Road Water and Sewer Project began in fiscal
year 2011. The total cost to date is approximately $1.3 million. This project is being
funded by a grant received from the Department of Commerce’s Economic Development
Administration (EDA).
In fiscal year 2010, the City was awarded a $2.3 million Community Development Block
Grant to purchase and install emergency generators to critical infrastructure.
Construction began on this project in fiscal year 2011. The total project cost to date is
approximately is $1.3 million.
The following water and sewer projects are in construction in progress at the end of
fiscal year 2011: Water Plant # 2 Rehabilitation ($773,000), Water Plant Rehabilitation
#6 (total cost to $1.0 million), and Water Plant #5 Rehabilitation ($1.8 million).
CITY OF FRIENDSWOOD’S CAPITAL ASSETS AT YEAR-END
2011 2010 2011 2010 2011 2010
Land 24,007,398$ 24,007,398$ 716,818$ 716,818$ 24,724,216$ 24,724,216$
Buildings and
improvements 22,953,911 20,708,083 - - 22,953,911 20,708,083
Equipment 3,461,722 3,653,914 356,220 385,840 3,817,942 4,039,754
Infrastructure 32,066,832 33,618,179 29,816,407 31,263,014 61,883,239 64,881,193
Water rights - - 19,716,695 19,716,695 19,716,695 19,716,695
Construction in progress 4,890,447 4,254,002 3,677,771 418,945 8,568,218 4,672,947
Total capital assets 87,380,310$ 86,241,576$ 54,283,911$ 52,501,312$ 141,664,221$ 138,742,888$
Governmental Activities Business-type Activities Totals
Additional information on the City’s capital assets can be found in the notes on pages 38 and 39
of this report.
DEBT ADMINISTRATION
At the end of the current fiscal year, the City of Friendswood had a total bonded debt and capital
lease obligation of $58,800,023.
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CITY OF FRIENDSWOOD’S OUTSTANDING DEBT AT YEAR-END
2011 2010 2011 2010 2011 2010
General obligations 22,885,000$ 14,800,000$ -$ -$ 22,885,000$ 14,800,000$
Revenue bonds payable - - 35,205,000 42,045,000 35,205,000 42,045,000
Capital leases 710,023 839,928 - - 710,023 839,928
23,595,023$ 15,639,928$ 35,205,000$ 42,045,000$ 58,800,023$ 57,684,928$
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 40 through 45 of
this report.
ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES
Friendswood continues to experience moderate growth. The City’s current population is
estimated to be 37,247. Friendswood is expected to reach build out 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 West 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 was increased .0051 cents from $.5851 to $.5902. This rate consists of a
maintenance and operations (M&0) tax rate of $.5218 and an Interest and Sinking (debt service)
tax rate of $.0684. The rate was set based on a net assessed value of $2,362,929,430. This is
an increase of $26,810,958 in taxable value. This increase is a result of new construction in the
City. This additional value results in a total levy increase of $278,586. 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.
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 $3,748,428 to $3,965,020. Franchise fees budget has been increased from $1,433,742 to
$1,511,334 and the budget for municipal court fines has been adjusted from $1,047,212 to
$952,020. If all projections are accurate, the total General Fund unassigned fund balance net of
the 90-day operating requirement ($5.2 million) is estimated to be approximately $1.7 million at
September 30, 2012.
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Water revenues are budgeted at $5,120,000 which is an increase of $105,000 in revenues, or
2.1%. Sewer revenues are budgeted at $3,840,000. This represents an increase of $25,000 or
0.7%. Water and sewer retained earnings net of the 90-day operating requirement ($2.1 million)
is expected to be $6.9 million at the end of fiscal year 2012.
Pursuant to the City’s financial management policy, funds in excess of the 90-day operating
reserve are designated for future capital improvements.
CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, customers, investors, and creditors with
a general overview of the City’s finances and to show the City’s accountability for the money it
receives. If you have questions about this report or need additional information, contact
Administrative Services, P. O. Box 1288, Friendswood, Texas 77549-1288, or call Cindy S.
Edge 281-996-3224, or email cedge@friendswood.com.
BASIC FINANCIAL STATEMENTS
CITY OF FRIENDSWOOD, TEXAS
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2011
The Notes to the Basic Financial Statements
are an integral part of these statements.
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Primary Government
Governmental Business-type Component
Activities Activities Total Unit
ASSETS
Cash and investments 12,768,719$ 10,170,046$ 22,938,765$ 1,585,751$
Receivables (net of allowances for uncollectibles)
Taxes 1,456,579 - 1,456,579 10,267
Customer accounts 186,273 2,422,037 2,608,310 -
Other 1,689,851 61,611 1,751,462 1,883
Internal balances (900,000) 900,000 - -
Due from other governments 835,563 - 835,563 -
Prepaid items 220,151 37,732 257,883 -
Working capital deposit - 290,154 290,154 -
Deferred charges 367,980 414,174 782,154 494,993
Restricted cash and investments - 7,184,205 7,184,205 -
Capital assets
Land 24,007,398 716,818 24,724,216 5,929,737
Buildings and improvements 34,779,590 - 34,779,590 -
Machinery and equipment 10,357,862 2,978,193 13,336,055 -
Infrastructure 67,671,399 - 67,671,399 401,265
Water and sewer system 53,934,137 53,934,137 -
Construction in progress 4,890,447 3,677,771 8,568,218 -
Water rights - 19,716,695 19,716,695 -
Accumulated depreciation (54,326,386) (26,739,703) (81,066,089) -
Total capital assets, net 87,380,310 54,283,911 141,664,221 6,331,002
Total assets 104,005,426 75,763,870 179,769,296 8,423,896
LIABILITIES
Accounts payable 972,842 1,564,772 2,537,614 77,865
Accrued liabilities 1,226,658 225,118 1,451,776 8,208
Accrued interest 103,933 134,127 238,060 170,725
Customer deposits - 298,347 298,347 -
Noncurrent liabilities:
Due within one year 1,521,533 1,091,463 2,612,996 -
Due in more than one year 24,450,283 34,093,976 58,544,259 11,649,655
Total liabilities 28,275,249 37,407,803 65,683,052 11,906,453
NET ASSETS (DEFICIT)
Invested in capital assets, net of related debt 66,580,049 26,251,346 92,831,395 -
Restricted for:
Debt service 240,869 - 240,869 125,490
Public safety 360,912 - 360,912 -
Community development 321,093 - 321,093 -
Capital improvements - 731,410 731,410 2,828
Unrestricted 8,227,254 11,373,311 19,600,565 (3,610,875)
Total net assets (deficit)75,730,177$ 38,356,067$ 114,086,244$ (3,482,557)$
CITY OF FRIENDSWOOD, TEXAS
STATEMENT OF ACTIVITIES
YEAR ENDED SEPTEMBER 30, 2011
The Notes to the Basic Financial Statements
are an integral part of these statements.
13
Program Revenues
Operating Capital Primary Government
Charges for Grants and Grants and Governmental Business - Type Component
Program Activities Expenses Services Contributions Contributions Activities Activities Total Unit
Primary government
Governmental activities
General government 4,876,064$ 1,158,392$ - $ - $ (3,717,672)$ - $ (3,717,672)$ - $
Public safety 10,548,568 39,914 3,088,370 - (7,420,284) - (7,420,284) -
Public works 3,517,707 158,858 - - (3,358,849) - (3,358,849) -
Community development 1,284,188 643,150 - - (641,038) - (641,038) -
Community services 3,058,313 267,837 62,438 - (2,728,038) - (2,728,038) -
Library 979,978 43,147 - - (936,831) - (936,831) -
Interest on long-term debt 871,790 - - - (871,790) - (871,790) -
Total governmental activities 25,136,608 2,311,298 3,150,808 - (19,674,502) - (19,674,502) -
Business-type activities
Water and sewer 8,599,579 12,726,936 - - - 4,127,357 4,127,357 -
Total business-type activities 8,599,579 12,726,936 - - - 4,127,357 4,127,357 -
Total primary government 33,736,187$ 15,038,234$ 3,150,808$ - $ (19,674,502) 4,127,357 (15,547,145) -
Component unit
West Ranch Management District (3,730,309) - - - - - - (3,730,309)
(3,730,309)$ - $ - $ - $ - - - (3,730,309)
GENERAL REVENUES
Taxes:
Property taxes, levied for general purposes 12,392,254 - 12,392,254 604,783
Property taxes, levied for debt service 1,552,471 - 1,552,471 -
Sales taxes 4,002,740 - 4,002,740 -
Franchise taxes 1,598,407 - 1,598,407 -
Other taxes 28,883 - 28,883 -
Penalties and interest - - - 3,736
Interest on investments 110,863 55,163 166,026 9,384
Gain (loss) on sale of capital assets 23,831 - 23,831 -
Miscellaneous 126,228 - 126,228 32,419
Transfers (5,336,312) 5,336,312 - -
Total general revenues and transfers 14,499,365 5,391,475 19,890,840 650,322
Change in net assets (5,175,137) 9,518,832 4,343,695 (3,079,987)
NET ASSETS, beginning of year 80,905,314 28,837,235 109,742,549 (402,570)
NET ASSETS, end of year 75,730,177$ 38,356,067$ 114,086,244$ (3,482,557)$
Changes in Net Assets
Net (Expense) Revenue and
CITY OF FRIENDSWOOD, TEXAS
BALANCE SHEET – GOVERNMENTAL FUNDS
SEPTEMBER 30, 2011
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 7,009,382$ 307,755$ 5,017,683$ 12,334,820$
Receivables, net of allowance
Taxes 1,420,008 36,571 - 1,456,579
Customer accounts 155,452 - 30,821 186,273
Other 200,637 476 1,488,464 1,689,577
Due from other funds 1,495,557 - - 1,495,557
Receivable from other governments 835,563 - - 835,563
Prepaids and other assets 220,151 - - 220,151
Total assets 11,336,750$ 344,802$ 6,536,968$ 18,218,520$
Liabilities
Accounts payable 854,152$ - $ 118,690$ 972,842$
Accrued liabilities 1,093,538 - 133,120 1,226,658
Due to other funds - - 2,395,557 2,395,557
Deferred revenue 473,656 36,571 4,540 514,767
Total liabilities 2,421,346 36,571 2,651,907 5,109,824
Fund Balances
Nonspendable
Prepaid items 220,151 - - 220,151
Permanent fund - - 30,869 30,869
Restricted for
Public education and
government channels 97,728 - - 97,728
Debt service - 308,231 - 308,231
Authorized construction - - 3,203,056 3,203,056
State and/or federal statute 300,674 300,674
Fire/EMS donations 60,238 60,238
City ordinances - 290,224 290,224
Assigned 1,085,527 - - 1,085,527
Unassigned 7,511,998 - - 7,511,998
Total fund balances 8,915,404 308,231 3,885,061 13,108,696
Total liabilities and fund balances 11,336,750$ 344,802$ 6,536,968$ 18,218,520$
ASSETS
LIABILITIES AND FUND BALANCES
CITY OF FRIENDSWOOD, TEXAS
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
SEPTEMBER 30, 2011
The Notes to the Basic Financial Statements
are an integral part of these statements.
15
Total fund balances - governmental funds 13,108,696$
Capital assets used in governmental activities are not current financial
resources and therefore are not reported in the governmental funds
balance sheet.86,594,293
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.367,980
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.(1,203,222)
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.(103,933)
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.1,220,190
Revenues earned but not available within sixty days of the year end
are not recognized as revenue on the fund financial statements.514,767
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.(24,768,594)
Net assets of governmental activities 75,730,177$
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, 2011
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 12,404,793$ 1,557,269$ - $ 13,962,062$
Sales and alcohol taxes 4,031,623 - - 4,031,623
Franchise taxes 1,598,407 - - 1,598,407
Fines and forfeitures 972,678 - 39,914 1,012,592
Permits and fees 1,017,625 - 52,220 1,069,845
Intergovernmental 647,070 - 2,462,575 3,109,645
Investment earnings 99,116 2,968 7,188 109,272
Donations 27,546 - 248,663 276,209
Miscellaneous 78,243 - - 78,243
Total revenues 20,877,101 1,560,237 2,810,560 25,247,898
Expenditures
Current
General government 4,324,499 - 73,359 4,397,858
Public safety 9,875,842 - 218,122 10,093,964
Public works 1,637,237 - - 1,637,237
Community development 1,284,188 - - 1,284,188
Community services 2,472,015 - - 2,472,015
Library 979,978 - - 979,978
Capital outlay 1,715,340 - 2,539,242 4,254,582
Debt service
Principal - 1,019,562 46,303 1,065,865
Interest and fiscal charges - 849,148 15,598 864,746
Bond issuance costs and fees - 200,227 - 200,227
Total expenditures 22,289,099 2,068,937 2,892,624 27,250,660
Excess (deficiency) of
revenues over expenditures (1,411,998) (508,700) (82,064) (2,002,762)
Other financing sources (uses)
Proceeds from bond issuance - - 3,460,000 3,460,000
Issuance of refunding bonds - 5,460,000 - 5,460,000
Premium on issuance of bonds - 200,191 117,261 317,452
Proceeds from sale of capital assets 8,992 - - 8,992
Insurance recoveries 45,334 - - 45,334
Transfers in 1,143,631 92,261 - 1,235,892
Transfers out (828) (5,529,943) (1,042,261) (6,573,032)
Total other financing
sources (uses)1,197,129 222,509 2,535,000 3,954,638
Net change in fund balances (214,869) (286,191) 2,452,936 1,951,876
Fund balances, beginning of year 9,130,273 594,422 1,432,125 11,156,820
Fund balances, end of year 8,915,404$ 308,231$ 3,885,061$ 13,108,696$
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, 2011
The Notes to the Basic Financial Statements
are an integral part of these statements.
17
Net change in fund balances - total governmental funds 1,951,876$
4,254,414
(3,176,588)
Proceeds from issuance of long term debt (9,237,452)
Long term debt issuance costs 200,227
Amortization of bond issuance costs (23,698)
Amortization of premium on bonds payable 30,472
Repayment of long term debt 964,905 (8,065,546)
7,508
(13,818)
(20,871)
(133,077)
20,965
Change in net assets of governmental activities (5,175,137)$
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.
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.
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.
An internal service fund is used by management to charge the cost of fleet
management to individual funds. The change in net assets of the internal service
fund is included in the governmental activities in the statement of net assets.
Amounts reported for governmental activities in the statement of activities are different
because:
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.
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.
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 financial 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. The effect of these differences in the treatment of long-term debt and
related items was:
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.
CITY OF FRIENDSWOOD, TEXAS
STATEMENT OF NET ASSETS – PROPRIETARY FUNDS
SEPTEMBER 30, 2011
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 10,170,046$ 433,899$
Accounts receivable, net of allowance
Customer accounts 2,422,037 -
Other 61,611 274
Due from other funds 900,000 -
Prepaids and other assets 37,732 -
Restricted cash and investments 7,184,205 -
Total current assets 20,775,631 434,173
Noncurrent assets
Working capital deposit 290,154 -
Deferred charges 414,174 -
Capital assets
Land 716,818 -
Machinery and equipment 2,978,193 1,956,021
Water and sewer system 53,934,137 -
Construction in progress 3,677,771 -
Water rights 19,716,695 -
Accumulated depreciation (26,739,703) (1,170,004)
Net capital assets 54,283,911 786,017
Total noncurrent assets 54,988,239 786,017
Total assets 75,763,870 1,220,190
ASSETS
CITY OF FRIENDSWOOD, TEXAS
STATEMENT OF NET ASSETS – PROPRIETARY FUNDS
SEPTEMBER 30, 2011
(CONTINUED)
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 1,564,772 -
Accrued liabilities 225,118 -
Accrued interest 134,127 -
Deposits 298,347 -
Compensated absences 15,044 -
Bonds and other long-term debt payable 1,076,419 -
Total current liabilities 3,313,827 -
Noncurrent liabilities
Compensated absences 87,752 -
Bonds and other long-term debt payable 34,006,224 -
Total noncurrent liabilities 34,093,976 -
Total liabilities 37,407,803 -
Invested in capital assets, net of related debt 26,251,346 786,017
Restricted for capital improvements 731,410 -
Unrestricted 11,373,311 434,173
Total net assets 38,356,067$ 1,220,190$
LIABILITIES
NET ASSETS
CITY OF FRIENDSWOOD, TEXAS
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
YEAR ENDED SEPTEMBER 30, 2011
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 12,726,936$ 318,852$
Total operating revenues 12,726,936 318,852
Operating expenses
Personnel services 1,610,261 -
Sewer operations 1,348,531 -
Water purchases 1,047,333 -
Repairs and maintenance 485,634 -
Supplies 164,040 50,018
Other services and charges 754,698 -
Depreciation 1,545,008 265,180
Total operating expenses 6,955,505 315,198
Operating income 5,771,431 3,654
Nonoperating revenues (expenses)
Investment income 55,163 1,591
Gain (loss) on sale of capital assets - 14,892
Interest expense and fiscal charges (1,644,074) -
Total nonoperating revenues (expenses)(1,588,911) 16,483
Income before transfers 4,182,520 20,137
Transfers in 6,429,943 828
Transfers out (1,093,631) -
Change in net assets 9,518,832 20,965
Net assets, beginning of year 28,837,235 1,199,225
Net assets, end of year 38,356,067$ 1,220,190$
CITY OF FRIENDSWOOD, TEXAS
STATEMENT OF CASH FLOWS – PROPRIETARY FUNDS
YEAR ENDED SEPTEMBER 30, 2011
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 12,176,477$ 319,046$
Cash payments to suppliers for goods
and services (3,018,983) (53,368)
Cash payments to employees for services (1,607,051) -
Net cash provided by operating activities 7,550,443 265,678
NONCAPITAL FINANCING ACTIVITIES
Transfer in - 828
Transfer out (1,093,632) -
Net cash provided by (used in)
noncapital financing activities (1,093,632) 828
CAPITAL AND RELATED FINANCING ACTIVITIES
Proceeds from the sale of capital assets - 23,990
Capital expenditures (3,327,606) (335,187)
Proceeds from the issuance of debt - -
Repayment of debt (1,440,000) -
Interest paid on debt (1,653,336) -
Net cash used in capital and related
financing activities (6,420,942) (311,197)
INVESTING ACTIVITIES
Investment income 10,862 1,591
Net cash provided by investing activities 10,862 1,591
Net change in cash and cash equivalents 46,731 (43,100)
CASH AND CASH EQUIVALENTS, beginning of year 17,307,520 476,999
CASH AND CASH EQUIVALENTS, end of year 17,354,251$ 433,899$
CITY OF FRIENDSWOOD, TEXAS
STATEMENT OF CASH FLOWS – PROPRIETARY FUNDS
YEAR ENDED SEPTEMBER 30, 2011
(CONTINUED)
The Notes to the Basic Financial Statements
are an integral part of these statements.
22
Business Type
Activities Governmental
Enterprise Fund Activities
Water and Sewer Internal Service
Reconciliation of operating income
to net cash provided by operating activities
Operating income 5,771,431$ 3,654$
Adjustments to reconcile operating income
to net cash provided by operating activities
Depreciation and amortization 1,545,008 265,180
Change in assets and liabilities
Accounts receivable (554,202) 194
Prepaids and other assets (4,642) -
Working capital deposits (1,292) -
Accounts payable 633,876 (3,350)
Accrued liabilities 156,521 -
Deposits 3,743 -
Net cash provided by operating activities 7,550,443$ 265,678$
Reconciliation of cash to statement of net assets
Cash and investments 10,170,046$ 433,899$
Restricted cash and investments 7,184,205 -
CASH AND CASH EQUIVALENTS 17,354,251$ 433,899$
CITY OF FRIENDSWOOD, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
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 West Ranch Management 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 BASIC FINANCIAL STATEMENTS
24
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Financial Reporting Entity – Continued
The West 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
Chapters 3837, Texas Special District Local Laws Code, Chapters 49 and 54 of the
Texas Water Code and Chapter 375 of the Texas Local Government 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 BASIC 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 BASIC 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 (GASB).
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 Water and Sewer enterprise f und
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.
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 Texas Class).
Other investments consist mainly of U. S. government treasury bills, treasury notes and
other U. S. government obligations. Restricted cash and investments are assets
restricted for specific use. Restricted cash includes cash on deposit with financial
institutions and investment pools.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO BASIC 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.”
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, 2011.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO BASIC 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
$0.5851 per $100 of assessed valuation that were prorated between operations and
debt service in the amounts of $0.5198 and $0.0653, respectively. The resulting tax
levies were approximately $12.3 and $1.5 million for operations and debt service,
respectively, based on a total taxable valuation of approximately $2.4 billion for the 2010
tax year.
At an election held November 8, 2005, voters of the West 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 $604,783 on the taxable valuation of
$93,043,423 for the 2010 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.
The City applies the consumption method in accounting for prepaid items in the
governmental funds.
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.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
29
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Contract with West Ranch Management District
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
Water 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 BASIC 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 Balances and Net Assets
Government-Wide Financial Statements:
Net assets on the Statement of Net Assets includes the following categories:
Invested in capital assets, net of related debt – the component of net assets that
reports the difference between capital assets less both the accumulated depreciation
and the outstanding balance of debt, net of premiums and discounts, excluding
unspent proceeds, that is directly attributable to the acquisition, construction or
improvement of these capital assets.
Restricted – Net assets are reported as restricted when there are limitations imposed
on their use either through the enabling legislation adopted by the City or through
external restrictions imposed by creditors, grantors, or laws or regulations of other
governments.
Unrestricted – the difference between the assets and liabilities that is not reported in
any of the classifications above.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
31
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Fund Balances and Net Assets – Continued
Governmental Fund Financial Statements:
During the year ended September 30, 2011 the City adopted the provisions of GASB
Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions
(GASB 54). The objective of the statement is to enhance the usefulness of fund balance
information by providing clearer fund balance classifications that can be more
consistently applied and by clarifying the existing government fund type definitions. The
statement establishes fund balance classifications that comprise a hierarchy based
primarily on the extent to which a government is bound to observe constraints imposed
upon the use of the resources reported in governmental funds. Fund balance
classifications, under GASB 54 are non-spendable, restricted, committed, assigned, and
unassigned. These classifications reflect not only the nature of funds, but also provide
clarity to the level of restriction placed upon fund balance. Fund balance can have
different levels of constraint, such as external versus internal compliance requirements.
Unassigned fund balance is a residual classification within the general fund. The
general fund should be the only fund that reports a positive unassigned balance. In all
other funds, unassigned is limited to negative residual fund balance.
In accordance with GASB 54, the City classifies governmental fund balances as follows:
Non-spendable – includes amounts that cannot be spent because they are either not
in spendable form, or, for legal or contractual reasons, must be kept intact. This
classification includes prepaid items and the fund balance of the City’s permanent
fund.
Restricted – includes fund balance amounts that are constrained for specific
purposes which are imposed by providers, such as creditors or amounts restricted
due to constitutional provisions or enabling legislation. This classification includes
retirement of long term debt, construction programs, City ordinances, and other
federal and state grants.
Committed – includes fund balance amounts that are constrained for specific
purposes that are internally imposed by the City through formal action in an open
meeting of the highest level of decision making authority. Committed fund balance is
reported pursuant to resolution passed by the City Council. At September 30, 2011,
the City had no committed fund balance amounts.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
32
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Fund Balances and Net Assets – Continued
Governmental Fund Financial Statements – Continued:
Assigned – includes fund balance amounts that are self-imposed by the City to be
used for a particular purpose. Fund balance can be assigned by the City Council,
the City Manager, or the City Manager’s designee pursuant to the City’s fund
balance policy. At September 30, 2011, the City’s assigned fund balance included
amounts assigned for encumbrances.
Unassigned – includes residual positive fund balance within the general fund which
has not been classified within the other above mentioned categories. Unassigned
fund balance may also include negative balances for any governmental fund if
expenditures exceed amounts restricted, committed, or assigned for those specific
purposes.
When both restricted and unrestricted fund balances are available for use, it is the City’s
policy to use restricted fund balance first, then unrestricted fund balance. Furthermore,
committed fund balances are reduced first, followed by assigned amounts and then
unassigned amounts when expenditures are incurred for purposes for which amounts in
any of those unrestricted fund balance classifications are available.
The City has established a minimum fund balance policy whereby the City’s unassigned
general fund balance will be maintained at levels sufficient to protect the City’s
creditworthiness, as well as its financial position, from unforeseeable emergencies. The
City will strive to maintain the unassigned general fund balance at a minimum of 90 days
of prior year audited operating expenditures.
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 BASIC FINANCIAL STATEMENTS
33
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
New Accounting Pronouncements
In November 2010, the GASB issued Statement No. 61, The Financial Reporting Entity:
Omnibus an Amendment of GASB Statement No. 14 and No. 34 (GASB 61). This
statement modifies certain requirements for inclusion of component units in the financial
reporting entity, amends criteria for reporting component units as if they were part of the
primary government and clarifies the reporting of equity interests in legally separate
organizations. The requirements of this statement are effective for financial statements
for periods beginning after June 15, 2012. The City will adopt GASB 61 in the fiscal year
ending September 30, 2013 and is currently evaluating the impact of this standard on its
financial statements.
In December 2010, the GASB issued Statement No. 62, Codification of Accounting and
Financial Reporting Guidance Contained in Pre-November 30, 1989 Financial
Accounting Standards Board (FASB) and American Institute of Certified Public
Accountants (AICPA) Pronouncements (GASB 62). This statement incorporates into
GASB authoritative literature, certain accounting and financial reporting guidance issued
by the FASB and AICPA on or before November 30, 1989, which does not conflict or
contradict GASB pronouncements. The requirements of this statement are effective for
financial statements for periods beginning after December 15, 2011. The City will adopt
GASB 62 in the fiscal year ending September 30, 2013 and is currently evaluating the
impact of this standard on its financial statements.
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 $100,000;
3. No-load money market mutual funds; and
4. TexPool, Lone Star Investment Pool and Texas Class.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
34
NOTE 2. DEPOSITS AND INVESTMENTS – CONTINUED
The City Council has adopted a written investment policy regarding the investments of its
funds as defined by the Public Funds Investment Act of 1995 (Chapter 2256, Texas
Government Code). The investments of the City are in compliance with the Council’s
investment policies. The City did not have any derivative investment products during the
current year. All significant legal and contractual provisions for investments were complied
with during the year.
Deposits and investments as of September 30, 2011 are classified in the accompanying
financial statements as follows:
Governmental Activities 12,768,719$
Business-type Activities 17,354,251
30,122,970$
Deposits and investments as of September 30, 2011 consist of the following:
Deposits with financial institutions 3,927,229$
Investments 26,195,741
30,122,970$
As of September 30, 2011, the City had the following investments:
Fair Value
Texas Class 11,332,994$
Lone Star Corporate Overnight Fund 2,434,149
Tex Pool 1,932,039
U.S. Agency Securities:
Federal Farm Credit Bank 6,495,969 634
Federal National Mortgage Association 2,500,670 816
Federal Home Loan Mortgage Corporation 1,000,155 736
Federal Home Loan Bank 499,765 677
Total U.S. Agency Securities 10,496,559
Total portfolio 26,195,741$
Investment Type
Weighted Average
Maturity (Days)
CITY OF FRIENDSWOOD, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
35
NOTE 2. DEPOSITS AND INVESTMENTS – CONTINUED
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. The City’s investments in these
pools are the same as the value of the pool shares, which are valued based on quoted
market rates.
The City invests in Texas Local Government Investment Pool (TexPool), which was created
under the Interlocal Cooperation Act, Texas Government Code Ann. Chapter 791 and the
Texas Public Funds Investment Act. The Texas Treasury Safekeeping Trust Company (the
Trust) is trustee of TexPool and is a limited purpose trust company authorized pursuant to
Texas Government Code Ann. Section 404.103 for which the Texas State Comptroller is
sole officer, director and shareholder. The advisory board of TexPool is composed of
members appointed pursuant to the requirements of the Texas Public Funds Investment
Act.
The City invests in Texas Class Investment Pool which was established in 1996 pursuant to
the Texas Public Funds Investment Act. The pool is governed by a 7-member board of
trustees, who are elected by pool participants. The Cutwater Investor Services Corp. serves
as the pools program administrator and Wells Fargo Bank Texas, NA, serves as custodian.
The City invests in Lone Star Investment Pool pursuant to the Texas Public Funds
Investment Act. This pool is governed by an 11-member board of trustees all of which are
pool participants. The Bank of New York Mellon acts as custodian and provides valuation
services.
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, 2011, 13% of the City’s investments were
invested for a period of more 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,
2011, all of the City’s $3,927,229 balance on deposit with financial institutions was
collateralized with securities held by the pledging financial institution in the City’s name.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
36
NOTE 2. DEPOSITS AND INVESTMENTS – CONTINUED
Credit Risk. It is the City’s policy to limit its investments to investment types with an
investment quality rating not less than A or its equivalent by a nationally recognized
statistical rating organization. The City’s investments as of September 30, 2011, were rated
as follows:
Rating Rating Agency
Texas Class AAAm Standard & Poor's
Lone Star Corporate Overnight Fund AAAf Standard & Poor's
TexPool AAAm Standard & Poor's
U.S. Agency Securities:
Federal Farm Credit Bank Aaa Moody's Investor Service
Federal National Mortgage Association Aaa Moody's Investor Service
Federal Home Loan Mortgage Corporation Aaa Moody's Investor Service
Federal Home Loan Bank Aaa Moody's Investor Service
Investment Type
NOTE 3. ACCOUNTS RECEIVABLE AND DEFERRED REVENUE
Receivables as of September 30, 2011 for the City’s individual major funds, nonmajor funds
in the aggregate and the Internal Service Fund including the applicable allowances for
uncollectible accounts, are as follows:
Debt Water and Internal
General Service Nonmajor Sewer Service Total
Receivables:
Property taxes 287,438$ 40,634$ -$ -$ -$ 328,072$
Sales taxes 760,845 - - - - 760,845
Franchise taxes 400,469 - - - - 400,469
Customer accounts 157,452 - 30,821 2,432,037 - 2,620,310
Accrued interest 7,450 476 331 7,438 274 15,969
Court fines 458,650 - 4,554 - - 463,204
Intergovernmental 835,563 - 1,483,579 - - 2,319,142
Other 18,098 - - 54,173 - 72,271
Gross receivables 2,925,965 41,110 1,519,285 2,493,648 274 6,980,282
Less: allowance for
uncollectibles 314,305 4,063 - 10,000 - 328,368
Net total receivables 2,611,660$ 37,047$ 1,519,285$ 2,483,648$ 274$ 6,651,914$
Governmental Funds Proprietary Funds
CITY OF FRIENDSWOOD, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
37
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 258,695$
Court fines 199,417
Miscellaneous 15,544
Total General Fund 473,656
Court Security and Technology Fund
Court fines 4,540
Total Court Security and Technology Fund 4,540
Debt Service Fund
Delinquent property taxes 36,571
Total Debt Service Fund 36,571
Total Governmental Funds 514,767$
CITY OF FRIENDSWOOD, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
38
NOTE 4. CAPITAL ASSETS
Capital asset activity for the year ended September 30, 2011, was as follows:
Beginning Reclassifications/Ending
Balance Increases Decreases Balance
Governmental activities
Capital assets not being depreciated
Land 24,007,398$ -$ -$ 24,007,398$
Construction in progress 4,254,002 3,991,962 (3,355,517) 4,890,447
Total capital assets not
being depreciated 28,261,400 3,991,962 (3,355,517) 28,897,845
Capital assets being depreciated
Buildings and improvements 31,374,231 3,405,359 - 34,779,590
Machinery and equipment 10,078,459 554,039 (274,636) 10,357,862
Infrastructure 67,671,399 - - 67,671,399
Total capital assets
being depreciated 109,124,089 3,959,398 (274,636) 112,808,851
Less accumulated depreciation
Buildings and improvements 10,666,148 1,159,531 - 11,825,679
Machinery and equipment 6,424,545 730,890 (259,295) 6,896,140
Infrastructure 34,053,220 1,551,347 - 35,604,567
Total accumulated
depreciation 51,143,913 3,441,768 (259,295) 54,326,386
Total capital assets
being depreciated, net 57,980,176 517,630 (15,341) 58,482,465
Governmental activities
capital assets, net 86,241,576$ 4,509,592$ (3,370,858)$ 87,380,310$
CITY OF FRIENDSWOOD, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
39
NOTE 4. CAPITAL ASSETS – CONTINUED
Beginning Reclassifications/Ending
Balance Increases Decreases Balance
Business Type Activities
Capital assets not being depreciated
Land 716,818$ -$ -$ 716,818$
Water rights 19,716,695 - - 19,716,695
Construction in progress 418,945 3,296,254 (37,428) 3,677,771
Total capital assets not
being depreciated 20,852,458 3,296,254 (37,428) 24,111,284
Capital assets being depreciated
Machinery and equipment 2,923,388 68,779 (13,974) 2,978,193
Water and sewer system 53,934,135 2 - 53,934,137
Total capital assets
being depreciated 56,857,523 68,781 (13,974) 56,912,330
Less accumulated depreciation:
Machinery and equipment 2,537,548 98,399 (13,974) 2,621,973
Water and sewer system 22,671,121 1,446,609 - 24,117,730
Total accumulated
depreciation 25,208,669 1,545,008 (13,974) 26,739,703
Total capital assets
being depreciated, net 31,648,854 (1,476,227) - 30,172,627
Business-type activities
capital assets, net 52,501,312$ 1,820,027$ (37,428)$ 54,283,911$
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental activities
General government 251,562$
Public safety 457,854
Public works 1,880,790
Community services 586,382
Capital assets held by the City's internal service fund are
charged to the various functions based on their usage 265,180
Total depreciation expense - Governmental Activities 3,441,768$
Business-Type activities
Water and sewer 1,545,008$
Total depreciation expense - Business-Type Activities 1,545,008$
Unexpended commitments for construction projects in progress were $2,865,396 at September 30, 2011.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
40
NOTE 5. INTERFUND BALANCES AND ACTIVITIES
Interfund balances (net) at September 30, 2011 consisted of the following individual fund
balances:
Due to Fund Due from Fund Amount
General TDRA 1,495,557$ Balance of TDRA fund expenditures
funded by the general fund, pending
grant reimbursements
Water and sewer EDA 900,000 Return of excess amount previously
transferred, upon decrease in City's
obligation under grant award
2,395,557$
Purpose
All amounts due are scheduled to be repaid within one year.
During the year ended September 30, 2011 transfers between funds occurred as described
below:
Transfers In Transfers Out Amount
General Water and sewer 1,093,631$ To fund indirect costs for
administrative expenditures
General Park land dedication 50,000 To fund miscellaneous projects
Debt service Capital projects 92,261 To fund Series 2010A bond
issuance costs
Water and sewer Debt service 5,529,943 To refund Series 2001 Waterworks
and Sewer System revenue bonds
Water and sewer EDA 900,000 Return of excess amount previously
transferred, upon decrease in City's
obligation under grant award
Internal service General 828 Transfer of insurance reimbursement
7,666,663$
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.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
41
NOTE 6. LONG-TERM DEBT – CONTINUED
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 the City’s 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, 2011:
Final Governmental Business-Type
Maturity Interest Rate Activities Activities
General Obligation Bonds
2003 Permanent Improvement $ 8,700,000 2026 3.65% - 5.5%7,420,000$ -$
2005 Permanent Improvement
and Refunding 9,800,000 2020 2.85% - 4.375%6,705,000 -
2010A Permanent Improvement 3,460,000 2035 1.0% - 4.75%3,385,000
2010B Permanent Improvement
and Refunding 5,460,000 2021 1.0% - 4.0%5,375,000
22,885,000 -
Revenue Bonds
2006 Waterworks and Sewer System
Revenue and Refunding 24,285,000 2031 4.0% - 5.0%- 23,390,000
2009 Waterworks and Sewer System 12,120,000 2028 2.0% - 4.8%- 11,815,000
- 35,205,000
Total Bonds and Certificates of Obligation 22,885,000$ 35,205,000$
Series and Original Issue Amount
Annual debt service requirements for the City’s bonds and certificates of obligation are
as follows:
Year Ending
September 30,Principal Interest Principal Interest Total
2012 1,265,000$ 843,193$ 1,090,000$ 1,589,565$ 4,787,758$
2013 1,310,000 806,156 1,120,000 1,548,303 4,784,459
2014 1,355,000 764,704 1,165,000 1,504,006 4,788,710
2015 1,400,000 721,393 1,205,000 1,457,771 4,784,164
2016 1,455,000 676,122 1,240,000 1,409,734 4,780,856
2017 - 2021 8,175,000 2,524,321 7,020,000 6,208,957 23,928,278
2022 - 2026 6,485,000 1,029,519 9,715,000 4,253,229 21,482,748
2027 - 2031 730,000 244,025 10,330,000 1,670,865 12,974,890
2032 - 2036 710,000 69,350 2,320,000 177,750 3,277,100
22,885,000$ 7,678,783$ 35,205,000$ 19,820,180$ 85,588,963$
Governmental Activities Business -Type Activities
CITY OF FRIENDSWOOD, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
42
NOTE 6. LONG-TERM DEBT – CONTINUED
Defeasance of Bonds
On November 1, 2010, the City issued $5.460 million in Series 2010B Permanent
Improvement Refunding Bonds with an average interest rate of 3.093 percent to
advance refund $5.400 million of outstanding Series 2001 Waterworks and Sewer
System bonds (the Refunded Bonds) with an average interest rate of 4.957 percent.
The net proceeds of $5.526 million (after payment of $134,337 in underwriting fees,
insurance, and other issuance costs) plus an additional $5,000 of Refunded Bonds
sinking fund monies were used to purchase U.S. government securities. Those
securities were deposited in an irrevocable trust with an escrow agent to provide for all
future debt service payments on the Refunded Bonds. As a result, the Refunded Bonds
are considered to be defeased and the liability for those bonds has been removed from
the government-wide Statement of Net Assets.
The advance refunding resulted in a difference between the reacquisition price and the
net carrying amount of the old debt of $161,850. This difference, reported in the
accompanying financial statements as a deduction from bonds payable, is being
charged to operations through the year 2021 using the effective-interest method. The
City completed the advance refunding to reduce its total debt service payments over the
next 10 years by $654,824 and to obtain an economic gain (difference between the
present values of the old and new debt service payments) of $558,948.
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, 2011, $12,180,000 of
bonds considered defeased are still outstanding.
Obligations Under Capital Leases
The City has entered into capital lease agreements in order to purchase machinery and
equipment for public works, police and fire departments. The assets acquired through
these lease agreements are as follows:
Governmental
Asset:Activities
Machinery and equipment 1,133,460$
Less: accumulated depreciation (190,047)
Total 943,413$
CITY OF FRIENDSWOOD, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
43
NOTE 6. LONG-TERM DEBT – CONTINUED
Obligations Under Capital Leases – Continued
The following is a summary of future lease payments due on this machinery and
equipment:
Year Ending Lease
September 30,Obligation
2012 171,547$
2013 171,547
2014 171,547
2015 171,547
2016 128,812
Total 815,000
Less: interest portion (104,977)
Obligations under capital leases 710,023$
Changes in Long-term Liabilities
Long-term liability activity of the primary government for the year ended September 30,
2011, was as follows:
Balance Balance Due
Beginning End of Within One
of Year Increase Decrease Year Year
Governmental Type Activities
General obligation bonds 14,800,000$ 8,920,000$ (835,000)$ 22,885,000$ 1,265,000$
Premium on bond issuance 121,314 317,452 (30,472) 408,294 30,472
Capital lease obligations 839,928 - (129,905) 710,023 129,904
Net pension obligation 529,869 96,587 - 626,456 -
Net OPEB obligation 540,276 36,490 - 576,766 -
Compensated absences 772,785 658,363 (665,871) 765,277 96,157
Total governmental
type activities 17,604,172 10,028,892 (1,661,248) 25,971,816 1,521,533
Business Type Activities
Revenue bonds 42,045,000 - (6,840,000) 35,205,000 1,090,000
Discount on bond issuance (59,945) - 2,498 (57,447) (2,498)
Premium on bond issuance 326,279 - (16,278) 310,001 16,274
Deferred loss on refunding bonds (224,237) (161,850) 11,176 (374,911) (27,357)
Compensated absences 99,586 63,661 (60,451) 102,796 15,044
Total business type activities 42,186,683 (98,189) (6,903,055) 35,185,439 1,091,463
Total primary government
activities 59,790,855$ 9,930,703$ (8,564,303)$ 61,157,255$ 2,612,996$ 19,861,406$
CITY OF FRIENDSWOOD, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
44
NOTE 6. LONG-TERM DEBT – CONTINUED
West Ranch Management District
The following schedule summarizes the terms of the West Ranch Management District’s
general obligation bonds at July 31, 2011:
Road
Series 2010 Series 2010A
Amounts outstanding, July 31, 2011 $6,740,000 $1,815,000
Interest rates 3.25% to 5.25%3.50% to 5.00%
Maturity dates, serially beginning/ending September 1, 2012/2040 September 1, 2012/2040
Interest payment dates September 1/March 1 September 1/March 1
Callable dates*September 1, 2020 September 1, 2020
*Or any date thereafter; callable at par plus accrued interest to the date of redemption.
Annual debt service requirements for the District’s bonds are as follows:
Year Ending
July 31,Principal Interest Total
2012 -$ 410,741$ 410,741$
2013 125,000 408,491 533,491
2014 135,000 403,785 538,785
2015 140,000 398,792 538,792
2016 145,000 393,860 538,860
2017 - 2021 875,000 1,883,939 2,758,939
2022 - 2026 1,145,000 1,677,001 2,822,001
2027 - 2031 1,490,000 1,363,402 2,853,402
2032 - 2036 1,950,000 926,381 2,876,381
2037 - 2041 2,550,000 345,850 2,895,850
8,555,000$ 8,212,242$ 16,767,242$
The District’s bonds are payable from the proceeds of an ad valorem tax levied upon all
property within the District subject to taxation, without limitation as to rate or amount.
The compensated absences liability attributable to the governmental activities will be
liquidated primarily by the General Fund.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
45
NOTE 6. LONG-TERM DEBT – CONTINUED
West Ranch Management District – Continued
Long-term liability activity of the West Ranch Management District for the year ended
July 31, 2011, was as follows:
Balance Balance Due
Beginning End of Within One
of Year Increase Decrease Year Year
Component Unit
General obligation bonds -$ 8,555,000$ -$ 8,555,000$ -$
Discount on bond issuance - (215,690) 3,385 (212,305) -
Bond anticipation note 2,405,000 - (2,405,000) - -
Developer advances 160,000 - (120,000) 40,000 -
Due to developer 845,175 6,213,785 (3,792,000) 3,266,960 -
Total component unit 3,410,175$ 14,553,095$ (6,313,615)$ 11,649,655$ -$
A developer of the West Ranch Management District has advanced $40,000 to the
District for operating expenses. The District has agreed to repay these amounts plus
interest to the extent approved by the Texas Commission on Environmental Quality from
the proceeds of future bond sales. These amounts have been recorded in the financial
statements as long-term liabilities. 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 on behalf of the District. The District has agreed to reimburse the developers for
these construction costs and interest to the extent approved by the Texas Commission
on Environmental Quality. The District estimates reimbursable costs for completed
projects are $3,266,960. These amounts have been recorded in the financial statements
as long-term liabilities.
NOTE 7. RESTRICTED ASSETS
The balances of the restricted asset accounts in the enterprise fund are as follows:
Cash and investments:
Customer deposits 298,347$
Construction 730,888
Construction - 2006 bonds 1,896,303
Construction - 2009 bonds 3,893,628
Debt service reserve 365,039
Total restricted assets 7,184,205$
CITY OF FRIENDSWOOD, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
46
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), an agent multiple-employer public employee
retirement system. The plan provisions that have been adopted by the City are within
the options available in the governing state statutes of TMRS.
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 from TMRS’ website
at www.TMRS.com.
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.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
47
NOTE 8. EMPLOYEE RETIREMENT SYSTEM
Benefits – Continued
Plan provisions for the City were as follows:
Plan Year Plan Year
2010 2011
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 30% of
Annuity Increase (to retirees) CPI Repeating CPI Repeating
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.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
48
NOTE 8. EMPLOYEE RETIREMENT SYSTEM
Contributions – Continued
The annual pension cost and net pension obligation/(asset) are as follows:
Annual Required Contribution (ARC) 1,851,292$
Interest on Net Pension Obligation 39,740
Adjustment to the ARC (32,747)
Annual Pension Cost (APC) 1,858,285
Contributions made (1,761,698)
Increase in net pension obligation 96,587
Net Pension Obligation, beginning of year 529,869
Net Pension Obligation, end of year 626,456$
City historical data is as follows:
Fiscal Annual Actual Percentage of Net Pension Obligation
Year Pension Cost (APC) Contribution Made APC Contributed at September 30
2009 1,690,675$ 1,465,830$ 87%224,845$
2010 1,950,342 1,645,318 84%529,869
2011 1,858,285 1,761,698 95%626,456
The required contribution rates for fiscal year 2011 were determined as part of the
December 31, 2008 and 2009 actuarial valuations. Additional information as of the latest
actuarial valuation, December 31, 2010, also follows:
Valuation date 12/31/2008 12/31/2009
12/31/2010 - Prior
to restructuring
12/31/2010 -
Restructured
Actuarial cost method Projected Unit
Credit
Projected Unit
Credit
Projected Unit
Credit
Projected Unit
Credit
Actuarial assumptions:
Investment rate of return * 7.50%7.50%7.50%7.00%
* Includes inflation at 3.00%3.00%3.00%3.00%
Cost-of-living adjustments 2.10%2.10%0.90%0.90%
Varies by age
and service
30 years 30 years
Level Percent
of Payroll
27.2 years:
closed period
30 years
10-year
Smoothed Market
Level Percent of
Payroll
Level Percent
of Payroll
10-year Smoothed
Market
10-year Smoothed
Market
Varies by age
and service
Varies by age and
service
Varies by age
and service
29.0 years:
closed period
28.1 years:
closed period
27.1 years:
closed period
Amortization method
GASB 25 Equivalent Single
Amortization Period
Projected salary increases *
Asset valuation method Amortized Cost
Level Percent
of Payroll
Amortization Period for new
Gains/Losses 30 years
CITY OF FRIENDSWOOD, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
49
NOTE 8. EMPLOYEE RETIREMENT SYSTEM – CONTINUED
Funded Status and Funding Progress
In June, 2011, SB 350 was enacted by the Texas Legislature, resulting in a restructure
of the TMRS funds. This legislation provided for the actuarial valuation to be completed,
as if restructuring had occurred on December 31, 2010. In addition, the actuarial
assumptions were updated for the new fund structure, based on an actuarial experience
study that was adopted by the TMRS Board at their May, 2011 meeting (the review
compared actual to expected experience for the four-year period of January 1, 2006
through December 31, 2009). For a complete description of the combined impact of the
legislation and new actuarial assumptions, including the effects on TMRS city rates and
funding ratios, please see the December 31, 2010 TMRS Comprehensive Annual
Financial Report (CAFR).
The funded status as of December 31, 2010, under the two separate actuarial
valuations, is presented 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)
12/31/20101 $27,135,892 $37,169,128 73.0%$10,033,236 $11,160,286 89.9%
12/31/20102 $35,257,370 $43,612,777 80.8%$8,355,407 $11,160,286 74.9%
(1)Actuarial valuation performed under the original fund structure
(2)Actuarial valuation performed under the new fund structure
Actuarial valuations involve estimates of the value of reported amounts and assumptions
about the probability of events far into the future. Actuarially determined amounts are
subject to continual revision as actual results are compared to past expectations and
new estimates are made about the future.
Actuarial calculations are based on the benefits provided under the terms of the
substantive plan in effect at the time of each valuation, and reflect a long-term
perspective. Consistent with that perspective, actuarial methods and assumptions used
include techniques that are designed to reduce short-term volatility in actuarial accrued
liabilities and the actuarial value of assets.
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 BASIC FINANCIAL STATEMENTS
50
NOTE 9. POST EMPLOYMENT BENEFITS OTHER THAN PENSIONS
Retiree Insurance Coverage
The City Council has established a single-employer medical, dental, and vision
insurance defined 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. The retiree health plan does not issue a publicly available
financial report.
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 emp loyee 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 BASIC FINANCIAL STATEMENTS
51
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’s annual OPEB cost for
the current year is as follows:
Annual required contribution 72,428$
Interest on OPEB obligation 24,312
Adjustment to ARC (13,740)
Annual OPEB cost (expense) end of year 83,000
Net estimated employer contributions 46,510
Increase in net OPEB obligation 36,490
Net OPEB obligation – as of beginning of the year 540,276
Net OPEB obligation – as of end of year 576,766$
City historical data is as follows:
Fiscal Annual OPEB Actual Percentage of OPEB Net OPEB Obligation
Year Cost Contribution Made Cost Contributed at September 30
2009 290,842$ 18,208$ 6%272,634$
2010 305,150 37,508 12%540,276
2011 83,000 46,510 56%576,766
CITY OF FRIENDSWOOD, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
52
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, 2010, the most recent 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)
12/31/2010 $0 $610,795 0.00%$610,795 $11,160,286 5.47%
Under the reporting parameters, the City’s retiree health care plan is 0% funded with
an estimated actuarial accrued liability exceeding actuarial assets by $610,795 at
December 31, 2010.
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.
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.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
53
NOTE 9. POST EMPLOYMENT BENEFITS OTHER THAN PENSIONS – CONTINUED
Retiree Insurance Coverage – Continued
Actuarial Methods and Assumptions – Continued
Significant methods and assumptions were as follows:
Investment rate of return 4.5%, net of expenses
Inflation rate 1.50%
Healthcare cost trend rates 4.5% to 9.0%
Actuarial cost method Projected Unit Credit Cost Method
Amortization method Level Percent of Payroll over an
open period of 30 years
Payroll Growth Rate 3.00%
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.
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 “other postemployment benefit,” or OPEB.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
54
NOTE 9. POST EMPLOYMENT BENEFITS OTHER THAN PENSIONS – CONTINUED
Supplemental Death Benefits Fund – Continued
Contributions
The City contributes to the SDBF at a contractually required rate as determined by
an annual actuarial valuation. The rate is equal to the cost of providing one-year
term life insurance. 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.
The City’s contributions to the TMRS SDBF for the years ended September 30,
2011, 2010 and 2009 were $25,107, $22,282, and $24,533, respectively, which
equaled the required contributions 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, 2011, 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, 2011, the City believed the amounts paid on workers’ compensation would
not change significantly from the amounts recorded.
During the year ended September 30, 2011, 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 BASIC FINANCIAL STATEMENTS
55
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 Water 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, 2011, the City has purchased water capacity with an indefinite life of
$19,716,695.
The relationship of the parties is of a fiduciary character. No partnership or joint venture
is created by this contract.
Federal and State Programs
The City recognizes as revenue grant monies received as reimbursement for costs
incurred in certain federal and state programs it administers. Amounts received or
receivable from grantor agencies are subject to audit and adjustment by grantor
agencies. Any disallowed claims, including amounts already collected, may constitute a
liability of the applicable funds. The amount, if any, of expenditures which may be
disallowed by the grantor cannot be determined at this time although the City expects
such amounts, if any, to be immaterial.
Litigation
The City is a defendant in various lawsuits. The outcome and the impact of these
lawsuits is not presently determinable.
REQUIRED SUPPLEMENTARY
INFORMATION
(Unaudited)
CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF FUNDING PROGRESS FOR PARTICIPATION
IN TEXAS MUNICIPAL RETIREMENT SYSTEM
SEPTEMBER 30, 2011
56
Actuarial Actuarial UAAL as a
Actuarial Value of Accrued Unfunded AAL Covered Percentage of
Valuation Date Assets Liability (AAL) Funded Ratio (UAAL)Payroll Covered Payroll
(1)(2)(3)(4)(5)(6)
(1) / (2) (2) - (1) (4) / (5)
12/31/2008 22,413,171$ 35,257,980$ 63.6%12,844,809$ 10,885,990$ 118.0%
12/31/2009 24,941,996 34,979,418 71.3 10,037,422 11,194,824 89.7
12/31/20101 27,135,892 37,169,128 73.0 10,033,236 11,160,286 89.9
12/31/20102 35,257,370 43,612,777 80.8 8,355,407 11,160,286 74.9
(1)Actuarial valuation performed under the original fund structure
(2)Actuarial valuation performed under the new fund structure
CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF FUNDING PROGRESS
POST EMPLOYMENT BENEFITS PLAN OTHER THAN PENSIONS
SEPTEMBER 30, 2011
57
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)
12/31/2008 -$ 2,426,788$ 0.0%2,426,788$ 10,885,990$ 22.3%
12/31/2009 *- 2,426,788 0.0 2,426,788 10,885,990 22.3
12/31/2010 - 610,795 0.0 610,795 11,160,286 5.5
*In accordance with GASB Statement No. 45, the City has an actuarial valuation performed every 2 years,
which was performed as of 12/31/08 and as of 12/31/10. Therefore data for 2009 is the same as 2008.
CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL
GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2011
58
Variance With
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues
Property taxes 12,242,920$ 12,242,920$ 12,404,793$ 161,873$
Sales taxes 3,777,287 3,777,287 4,031,623 254,336
Franchise taxes 1,404,742 1,437,913 1,598,407 160,494
Fines and forfeitures 1,047,212 1,047,212 972,678 (74,534)
Permits and fees 836,094 843,339 1,017,625 174,286
Intergovernmental 135,922 228,321 647,070 418,749
Investment earnings 100,000 100,000 99,116 (884)
Donations 30,000 46,460 27,546 (18,914)
Miscellaneous 9,720 14,182 78,243 64,061
Total revenues 19,583,897 19,737,634 20,877,101 1,139,467
Expenditures
General government
Mayor and council
Personnel services 299 299 - 299
Supplies 3,421 3,221 2,353 868
Other services and charges 290,708 296,408 321,040 (24,632)
Total mayor and council 294,428 299,928 323,393 (23,465)
City manager
Personnel services 482,668 484,128 493,084 (8,956)
Supplies 6,170 19,475 14,216 5,259
Other services and charges 97,262 115,588 90,151 25,437
Capital outlay - - - -
Total city manager 586,100 619,191 597,451 21,740
City secretary
Personnel services 349,977 349,977 350,125 (148)
Supplies 12,826 14,544 5,723 8,821
Repairs and maintenance 140 140 - 140
Other services and charges 60,273 58,555 34,744 23,811
Total city secretary 423,216 423,216 390,592 32,624
Administrative services
Personnel services 680,603 681,403 674,847 6,556
Supplies 6,592 6,592 5,050 1,542
Other services and charges 197,873 197,073 185,194 11,879
Total administrative services 885,068 885,068 865,091 19,977
Budgeted Amounts
CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL
GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2011
(CONTINUED)
59
Variance With
Final Budget
Actual Positive
Original Final Amounts (Negative)
Human resources
Personnel services 321,825 317,975 302,316 15,659
Supplies 15,065 13,065 7,823 5,242
Other services and charges 57,436 63,504 51,197 12,307
Total human resources 394,326 394,544 361,336 33,208
Tax
Other services and charges 214,478 214,478 208,885 5,593
Total tax 214,478 214,478 208,885 5,593
Economic development
Personnel services 136,984 136,984 137,989 (1,005)
Supplies 19,453 21,152 7,280 13,872
Other services and charges 101,590 118,588 97,795 20,793
Total economic development 258,027 276,724 243,064 33,660
Municipal court
Personnel services 516,836 516,836 531,243 (14,407)
Supplies 23,929 23,929 10,398 13,531
Repairs and maintenance 1,480 1,480 848 632
Other services and charges 40,646 40,646 27,963 12,683
Capital outlay - - - -
Total municipal court 582,891 582,891 570,452 12,439
Computer services
Personnel services 295,307 295,307 305,490 (10,183)
Supplies 15,631 19,226 7,250 11,976
Repairs and maintenance 71,724 72,113 68,479 3,634
Other services and charges 314,633 336,973 275,982 60,991
Capital outlay - - - -
Total computer services 697,295 723,619 657,201 66,418
Risk management
Personnel services 85,159 85,159 83,481 1,678
Supplies 9,438 11,915 10,142 1,773
Other services and charges 16,541 16,323 13,411 2,912
Total risk management 111,138 113,397 107,034 6,363
Total general government 4,446,967 4,533,056 4,324,499 208,557
Budgeted Amounts
CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL
GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2011
(CONTINUED)
60
Variance With
Final Budget
Actual Positive
Original Final Amounts (Negative)
Public safety
Police services
Personnel services 5,774,115 5,796,379 5,867,494 (71,115)
Supplies 318,799 312,375 334,322 (21,947)
Repairs and maintenance 117,629 137,963 123,289 14,674
Other services and charges 397,198 406,464 392,542 13,922
Capital outlay 41,412 65,018 7,115 57,903
Total police services 6,649,153 6,718,199 6,724,762 (6,563)
Communications
Personnel services 892,020 892,020 924,444 (32,424)
Supplies 6,149 5,899 4,565 1,334
Repairs and maintenance 17,764 18,263 23,692 (5,429)
Other services and charges 17,300 17,550 19,173 (1,623)
Total communications 933,233 933,732 971,874 (38,142)
Animal control
Personnel services 241,461 241,461 205,279 36,182
Supplies 16,583 19,842 21,961 (2,119)
Repairs and maintenance 2,373 6,051 4,518 1,533
Other services and charges 14,660 16,160 14,933 1,227
Capital outlay - 4,271 - 4,271
Total animal control 275,077 287,785 246,691 41,094
Fire and EMS
Personnel services 528,781 528,781 538,550 (9,769)
Supplies 34,288 53,208 48,540 4,668
Repairs and maintenance 4,957 9,957 4,431 5,526
Other services and charges 1,287,476 1,357,038 1,348,109 8,929
Capital outlay - 182,895 167,353 15,542
Total fire and EMS 1,855,502 2,131,879 2,106,983 24,896
Total public safety 9,712,965 10,071,595 10,050,310 21,285
Budgeted Amounts
CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL
GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2011
(CONTINUED)
61
Variance With
Final Budget
Actual Positive
Original Final Amounts (Negative)
Public works
Administration
Personnel services 212,005 212,005 216,037 (4,032)
Supplies 1,801 1,621 709 912
Other services and charges 1,749 1,929 1,523 406
Total administration 215,555 215,555 218,269 (2,714)
Streets
Personnel services 525,272 525,272 505,410 19,862
Supplies 69,980 70,081 76,088 (6,007)
Repairs and maintenance 169,350 169,350 91,395 77,955
Other services and charges 439,296 439,321 405,551 33,770
Capital outlay 50,000 320,367 236,367 84,000
Total streets 1,253,898 1,524,391 1,314,811 209,580
Drainage
Personnel services 292,004 292,004 312,523 (20,519)
Supplies 6,725 9,435 7,020 2,415
Repairs and maintenance 46,639 41,029 3,526 37,503
Other services and charges 5,978 5,978 3,255 2,723
Capital outlay - 269,478 137,383 132,095
Total drainage 351,346 617,924 463,707 154,217
Sanitation
Other services and charges 11,300 14,200 14,200 -
Total sanitation 11,300 14,200 14,200 -
Total public works 1,832,099 2,372,070 2,010,987 361,083
Budgeted Amounts
CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL
GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2011
(CONTINUED)
62
Variance With
Final Budget
Actual Positive
Original Final Amounts (Negative)
Community development
Administration
Personnel services 598,930 601,930 605,335 (3,405)
Supplies 9,315 8,621 5,604 3,017
Repairs and maintenance 637 675 586 89
Other services and charges 14,193 10,446 6,774 3,672
Total administration 623,075 621,672 618,299 3,373
Planning and zoning
Personnel services 132,582 132,582 139,406 (6,824)
Supplies 1,585 1,585 308 1,277
Other services and charges 11,274 27,774 25,475 2,299
Total planning and zoning 145,441 161,941 165,189 (3,248)
Engineering
Personnel services 61,267 62,287 61,580 707
Supplies 1,167 1,667 917 750
Repairs and maintenance 530 492 201 291
Other services and charges 9,205 7,062 5,338 1,724
Total engineering 72,169 71,508 68,036 3,472
Inspection
Personnel services 416,615 416,615 405,044 11,571
Supplies 10,265 10,945 12,272 (1,327)
Repairs and maintenance 1,167 1,871 1,870 1
Other services and charges 43,119 24,631 13,478 11,153
Total inspection 471,166 454,062 432,664 21,398
Total community development 1,311,851 1,309,183 1,284,188 24,995
Budgeted Amounts
CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL
GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2011
(CONTINUED)
63
Variance With
Final Budget
Actual Positive
Original Final Amounts (Negative)
Community services
Administration
Personnel services 236,702 236,702 243,507 (6,805)
Supplies 3,789 4,808 4,104 704
Other services and charges 23,021 22,790 24,500 (1,710)
Total administration 263,512 264,300 272,111 (7,811)
Parks and recreation
Personnel services 655,368 660,175 660,485 (310)
Supplies 118,869 110,403 100,062 10,341
Repairs and maintenance 101,652 163,353 142,668 20,685
Other services and charges 582,726 544,003 505,965 38,038
Capital outlay 6,000 132,718 32,970 99,748
Total parks and recreation 1,464,615 1,610,652 1,442,150 168,502
Swimming pool
Personnel services 69,735 66,461 51,425 15,036
Supplies 15,199 13,699 10,839 2,860
Repairs and maintenance 11,972 7,897 6,052 1,845
Other services and charges 26,127 25,202 25,444 (242)
Total swimming pool 123,033 113,259 93,760 19,499
Building operations
Supplies 19,983 30,337 22,597 7,740
Repairs and maintenance 184,318 194,910 174,588 20,322
Other services and charges 563,414 552,989 499,779 53,210
Capital outlay 75,000 2,321,496 1,134,152 1,187,344
Total building operations 842,715 3,099,732 1,831,116 1,268,616
Total community services 2,693,875 5,087,943 3,639,137 1,448,806
Library
Personnel services 784,733 784,733 821,669 (36,936)
Supplies 156,761 174,722 143,346 31,376
Repairs and maintenance 2,575 2,575 290 2,285
Other services and charges 25,357 25,191 14,673 10,518
Total library 969,426 987,221 979,978 7,243
Interest and fiscal charges - - - -
Total expenditures 20,967,183 24,361,068 22,289,099 2,071,969
Deficiency of
revenues over expenditures (1,383,286) (4,623,434) (1,411,998) 3,211,436
Budgeted Amounts
CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL
GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2011
(CONTINUED)
64
Variance With
Final Budget
Actual Positive
Original Final Amounts (Negative)
Other financing sources
Proceeds from sale of capital assets - - 8,992 8,992
Insurance recoveries 39,632 47,959 45,334 (2,625)
Transfers in 1,143,631 1,143,631 1,143,631 -
Transfers out - (1,496,385) (828) 1,495,557
Total other financing sources 1,183,263 (304,795) 1,197,129 1,501,924
Net change in fund balances (200,023) (4,928,229) (214,869) 4,713,360
Fund balance, beginning of year 9,130,273 9,130,273 9,130,273 -
Fund balance, end of year 8,930,250$ 4,202,044$ 8,915,404$ 4,713,360$
Budgeted Amounts
CITY OF FRIENDSWOOD, TEXAS
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
65
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 informat ion 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
66
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 inclusive of all governmental and proprietary
funds by ordinance, on one reading, by the 15th day of September or as soon thereafter
as practical. The City legally adopts annual budgets for the general, special revenue
and debt service funds. The budgets are adopted on a basis consistent with generally
accepted accounting principles.
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.
CITY OF FRIENDSWOOD, TEXAS
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
67
NOTE 1. BUDGETARY CONTROL – CONTINUED
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
NON MAJOR GOVERNMENTAL FUNDS
68
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 outlays and debt repayments.
EDA Grant Fund – This fund is used to account for receipts and expenditures related to
the U.S. Department of Commerce Economic Development Administration grant
awarded to the City in fiscal year 2008-2009.
TDRA Grant Fund – This fund is used to account for receipts and expenditures related
to the Texas Community Development Block Grant awarded to the City in fiscal year
2009-2010.
Sidewalk Installation Fund – This fund is used to account for receipts from developers
to install sidewalks in neighborhood developments.
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.
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
proceeds from Permanent Improvement Bonds.
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, 2011
69
Capital Projects Permanent
Court Total Nonmajor
Police Fire/EMS EDA TDRA Sidewalk Park Land Security and Bond Governmental
Investigation Donation Grant Grant Installation Dedication Technology Construction 1776 Park Funds
Cash and investments 38,441$ 75,342$ 619,525$ 480,891$ 11$ 289,977$ 264,104$ 3,218,545$ 30,847$ 5,017,683$
Receivables, net of allowance
Customer accounts - 30,821 - - - - - - - 30,821
Other 40 33 328,064 1,155,515 4 232 4,554 - 22 1,488,464
Total assets 38,481$ 106,196$ 947,589$ 1,636,406$ 15$ 290,209$ 268,658$ 3,218,545$ 30,869$ 6,536,968$
LIABILITIES
Accounts payable 1,699$ 45,958$ - $ 55,544$ - $ - $ - $ 15,489$ - $ 118,690$
Accrued liabilities - - 47,589 85,305 - - 226 - - 133,120
Due to other funds - - 900,000 1,495,557 - - - - - 2,395,557
Deferred revenue - - - - - - 4,540 - - 4,540
Total liabilities 1,699 45,958 947,589 1,636,406 - - 4,766 15,489 - 2,651,907
FUND BALANCES
Nonspendable - - - - - - 30,869 30,869
Restricted
Authorized construction - - - - - - - 3,203,056 - 3,203,056
State and/or federal statute 36,782 - - - - - 263,892 - - 300,674
Fire/EMS donations - 60,238 - - - - - - - 60,238
City ordinances - - - - 15 290,209 - - - 290,224
Total fund balances 36,782 60,238 - - 15 290,209 263,892 3,203,056 30,869 3,885,061
Total liabilities and fund balances 38,481$ 106,196$ 947,589$ 1,636,406$ 15$ 290,209$ 268,658$ 3,218,545$ 30,869$ 6,536,968$
ASSETS
LIABILITIES AND FUND BALANCES
Special Revenue Funds
CITY OF FRIENDSWOOD, TEXAS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED SEPTEMBER 30, 2011
70
Capital
Projects
Funds Permanent
Total
Court Nonmajor
Police Fire/EMS EDA TDRA Sidewalk Park Land Security and Bond Governmental
Investigation Donation Grant Grant Installation Dedication Technology Construction 1776 Park Funds
Revenues
Fines and forfeitures - $ - $ - $ - $ - $ - $ 39,914$ - $ - $ 39,914$
Permits and fees - - - - - 52,220 - - - 52,220
Intergovernmental 62,438 - 1,090,038 1,310,099 - - - - - 2,462,575
Investment earnings 223 156 - - 15 1,537 - 5,108 149 7,188
Donations - 248,663 - - - - - - - 248,663
Total revenues 62,661 248,819 1,090,038 1,310,099 15 53,757 39,914 5,108 149 2,810,560
Expenditures
Current:
General government - - - 66,725 - - 6,634 - - 73,359
Public safety 38,641 179,481 - - - - - - - 218,122
Capital outlay 20,000 - 981,816 1,243,374 - 7,000 - 287,052 - 2,539,242
Debt service:
Principal - 46,303 - - - - - - - 46,303
Interest and fiscal charges - 15,598 - - - - - - - 15,598
Total expenditures 58,641 241,382 981,816 1,310,099 - 7,000 6,634 287,052 - 2,892,624
Other financing sources (uses)
Proceeds from bond issuance - - - - - - - 3,460,000 - 3,460,000
Premium on issuance of bonds - - - - - - - 117,261 - 117,261
Transfers out - - (900,000) - - (50,000) - (92,261) - (1,042,261)
Total other
financing sources (uses)- - (900,000) - - (50,000) - 3,485,000 - 2,535,000
Net change in fund balances 4,020 7,437 (791,778) - 15 (3,243) 33,280 3,203,056 149 2,452,936
Fund balances, beginning of year 32,762 52,801 791,778 - - 293,452 230,612 - 30,720 1,432,125
Fund balances, end of year 36,782$ 60,238$ - $ - $ 15$ 290,209$ 263,892$ 3,203,056$ 30,869$ 3,885,061$
Special Revenue Funds
CITY OF FRIENDSWOOD, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE – BUDGET AND ACTUAL
FIRE/EMS DONATION FUND
YEAR ENDED SEPTEMBER 30, 2011
71
Variance With
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues
Interest income 100$ 100$ 156$ 56$
Donations 251,209 251,209 248,663 (2,546)
Total revenues 251,309 251,309 248,819 (2,490)
Expenditures
Current
Public safety 189,408 189,408 179,481 9,927
Debt service
Principal 46,303 46,303 46,303 -
Interest and fiscal charges 15,598 15,598 15,598 -
Total expenditures 251,309 251,309 241,382 9,927
Net change in fund balance - - 7,437 7,437
Fund balance, beginning of year 52,801 52,801 52,801 -
Fund balance, end of year 52,801$ 52,801$ 60,238$ 7,437$
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, 2011
72
Variance With
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues
Property taxes 1,550,719$ 1,519,822$ 1,557,269$ 37,447$
Interest income 6,813 6,813 2,968 (3,845)
Total revenues 1,557,532 1,526,635 1,560,237 33,602
Expenditures
Debt service
Principal 880,453 934,764 1,019,562 (84,798)
Interest and fiscal charges 652,658 749,272 849,148 (99,876)
Bond issuance costs - 225,460 200,227 25,233
Total expenditures 1,533,111 1,909,496 2,068,937 (159,441)
Excess (deficiency) of revenues
over expenditures 24,421 (382,861) (508,700) (125,839)
Other financing sources (uses)
Issuance of refunding bonds - 265,192 5,460,000 5,194,808
Premium on issuance of bonds - - 200,191 200,191
Payments to escrow agent - (129,943) - 129,943
Transfers in - 92,261 92,261 -
Transfers out - - (5,529,943) (5,529,943)
Total other financing sources - 227,510 222,509 (5,001)
Net change in fund balance 24,421 (155,351) (286,191) (130,840)
Fund balance, beginning of year 594,422 594,422 594,422 -
Fund balance, end of year 618,843$ 439,071$ 308,231$ (130,840)$
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)
73
Table 1
City of Friendswood
Net Assets by Component
Last Nine Fiscal Years
(accrual basis of accounting)
(unaudited)
2003 2004 2005 2006 2007 2008 2009 2010 2011
Governmental activities
Invested in capital assets,
net of related debt 49,742,075$ 29,632,831$ 32,533,863$ 32,849,446$ 71,777,140$ 70,591,236$ 69,313,348$ 70,480,334$ 66,580,049$
Restricted 585,080 1,271,568 1,576,829 2,034,157 2,391,482 2,773,910 2,461,510 1,977,801 922,874
Unrestricted 5,468,870 7,125,997 7,527,573 10,391,123 10,785,998 10,548,129 9,892,077 8,447,179 8,227,254
Total governmental activities net assets 55,796,025$ 38,030,396$ 41,638,265$ 45,274,726$ 84,954,620$ 83,913,275$ 81,666,935$ 80,905,314$ 75,730,177$
Business-type activities
Invested in capital assets,
net of related debt 17,656,296$ 17,174,525$ 16,823,526$ 16,815,130$ 16,884,376$ 20,375,620$ 21,122,644$ 19,565,756$ 26,251,346$
Restricted 305,660 444,548 445,086 41,057 162,218 27,246 93,526 593,597 731,410
Unrestricted 4,058,223 4,337,137 5,228,802 6,574,920 7,475,597 4,227,253 6,730,812 8,677,882 11,373,311
Total business-type activities net assets 22,020,179$ 21,956,210$ 22,497,414$ 23,431,107$ 24,522,191$ 24,630,119$ 27,946,982$ 28,837,235$ 38,356,067$
Primary government
Invested in capital assets,
net of related debt 67,398,371$ 46,807,356$ 49,357,389$ 49,664,576$ 88,661,516$ 90,966,856$ 90,435,992$ 90,046,090$ 92,831,395$
Restricted 890,740 1,716,116 2,021,915 2,075,214 2,553,700 2,801,156 2,555,036 2,571,398 1,654,284
Unrestricted 9,527,093 11,463,134 12,756,375 16,966,043 18,261,595 14,775,382 16,622,889 17,125,061 19,600,565
Total primary government net assets 77,816,204$ 59,986,606$ 64,135,679$ 68,705,833$ 109,476,811$ 108,543,394$ 109,613,917$ 109,742,549$ 114,086,244$
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
74
Table 2
City of Friendswood
Changes in Net Assets
Last Nine Fiscal Years
(accrual basis of accounting)
(unaudited)
2003 2004 2005 2006 2007 2008 2009 2010 2011
Expenses
Governmental activities:
General government 2,923,552$ 3,375,283$ 3,438,849$ 3,330,439$ 4,472,602$ 4,339,620$ 5,164,623$ 5,145,447$ 4,876,064$
Public safety 5,760,097 6,026,272 7,318,886 7,060,800 7,565,797 12,652,812 14,929,941 10,175,028 10,548,568
Community development and public works 3,383,229 2,569,356 2,576,447 2,813,857 5,475,447 4,921,298 5,292,000 - -
Public works - - - - - - - 3,853,685 3,517,707
Community development - - - - - - - 1,203,204 1,284,188
Community services 2,747,438 3,081,717 3,075,023 3,098,013 3,420,244 3,841,387 4,002,165 3,034,523 3,058,313
Library - - - - - - - 979,084 979,978
Interest and fiscal charges 128,192 465,770 478,495 857,602 835,511 803,733 678,705 789,652 871,790
Total governmental activities expenses 14,942,508 15,518,398 16,887,700 17,160,711 21,769,601 26,558,850 30,067,434 25,180,623 25,136,608
Business-type activities:
Water and sewer 5,457,496 5,614,077 6,251,251 6,078,881 5,711,063 6,523,501 6,640,062 6,663,308 6,955,505
Interest and fiscal charges 1,063,940 999,219 963,355 962,989 1,583,551 1,543,859 1,604,174 2,037,104 1,644,074
Total business-type activities expenses 6,521,436 6,613,296 7,214,606 7,041,870 7,294,614 8,067,360 8,244,236 8,700,412 8,599,579
Total primary government expenses 21,463,944 22,131,694 24,102,306 24,202,581 29,064,215 34,626,210 38,311,670 33,881,035 33,736,187
Program Revenues
Governmental activities:
Charges for services
General government 647,958 958,665 1,176,086 1,238,631 1,353,160 1,178,523 1,327,484 1,072,289 1,158,392
Public safety 9,433 9,141 15,013 54,653 23,267 21,356 46,773 38,438 39,914
Community development and public works 1,865,086 822,927 758,487 805,710 998,625 838,060 602,265 - -
Public works - - - - - - - 152,163 158,858
Community development - - - - - - - 550,286 643,150
Community services 66,862 65,850 66,281 112,681 219,944 132,244 411,207 258,030 267,837
Library - - - - - - - 44,313 43,147
Operating grants and contributions 661,568 778,261 1,271,119 771,477 489,707 4,021,908 5,755,038 2,819,418 3,150,808
Capital grants and contributions 749,772 239,200 235,300 - - - - - -
Total governmental activities program revenues 4,000,679 2,874,044 3,522,286 2,983,152 3,084,703 6,192,091 8,142,767 4,934,937 5,462,106
Business-type activities:
Charges for services
Water and sewer 7,275,746 7,203,736 8,390,761 8,392,277 8,021,040 8,624,546 12,028,895 9,854,083 12,726,936
Total business-type activities program revenues 7,275,746 7,203,736 8,390,761 8,392,277 8,021,040 8,624,546 12,028,895 9,854,083 12,726,936
Total primary government program revenues 11,276,425 10,077,780 11,913,047 11,375,429 11,105,743 14,816,637 20,171,662 14,789,020 18,189,042
Net (Expense)/Revenues
Governmental activities (10,941,829) (12,644,354) (13,365,414) (14,177,559) (18,684,898) (20,366,759) (21,924,667) (20,245,686) (19,674,502)
Business-type activities 754,310 590,440 1,176,155 1,350,407 726,426 557,186 3,784,659 1,153,671 4,127,357
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)$ (19,092,015)$ (15,547,145)$
(Continued)
Fiscal Year
75
2003 2004 2005 2006 2007 2008 2009 2010 2011
General Revenues and Other Changes in Net Assets
Governmental activities:
Taxes
Property 9,706,202$ 10,931,393$ 11,352,598$ 11,304,684$ 11,876,246$ 12,512,950$ 13,481,500$ 13,664,765$ 13,944,725$
Sales 2,875,071 1,119,328 3,199,136 3,658,699 3,904,436 3,767,526 3,871,995 3,853,161 4,002,740
Franchise 1,058,726 2,833,290 1,176,460 1,220,581 1,239,167 1,317,166 1,363,221 1,510,794 1,598,407
Other 79,691 71,028 53,790 11,940 16,186 25,429 28,859 28,859 28,883
Investment earnings 154,558 219,085 376,435 915,710 1,063,715 648,301 166,492 93,018 110,863
Gain (loss) on sale of capital assets - - - - 345,976 - 4,320 33,647 23,831
Miscellaneous 30,826 - 51,503 21,556 4,152 73,026 214,484 131,545 126,228
Transfers 664,102 714,278 763,361 680,850 875,616 981,016 547,456 168,276 (5,336,312)
Total governmental activities 14,569,176 15,888,402 16,973,283 17,814,020 19,325,494 19,325,414 19,678,327 19,484,065 14,499,365
Business-type activities:
Investment earnings 160,629 59,869 114,932 262,761 1,236,092 531,758 128,338 87,056 55,163
Gain (loss) on sale of capital assets - - - - - - (48,678) (182,198) -
Miscellaneous 12,777 - 13,478 1,375 4,182 - - - -
Extraordinary item 100,000 - - - - - - - -
Transfers (664,102) (714,278) (763,361) (680,850) (875,616) (981,016) (547,456) (168,276) 5,336,312
Total business-type activities (390,696) (654,409) (634,951) (416,714) 364,658 (449,258) (467,796) (263,418) 5,391,475
Total primary government 14,178,480 15,233,993 16,338,332 17,397,306 19,690,152 18,876,156 19,210,531 19,220,647 19,890,840
Change in Net Assets
Governmental activities 3,627,347 3,244,048 3,607,869 3,636,461 640,596 (1,041,345) (2,246,340) (761,621) (5,175,137)
Business-type activities 363,614 (63,969) 541,204 933,693 1,091,084 107,928 3,316,863 890,253 9,518,832
Total primary government 3,990,961$ 3,180,079$ 4,149,073$ 4,570,154$ 1,731,680$ (933,417)$ 1,070,523$ 128,632$ 4,343,695$
(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. Community Development and Publics Works were shown
as one department from 2003 to 2009. From 2003 to 2009, the Library was included with Community Services.
Fiscal Year
76
Table 3
City of Friendswood
Fund Balances, Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
(unaudited)
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
General Fund
Reserved 1,196,255$ 683,459$ 635,182$ 511,197$ 1,313,829$ 601,646$ 1,037,279$ 686,404$ 1,731,056$ -$
Unreserved 2,766,577 5,055,679 5,971,319 7,032,843 8,973,646 9,926,479 9,177,390 9,185,590 7,399,217 -
Nonspendable - - - - - - - - - 220,151
Restricted - - - - - - - - - 97,728
Assigned - - - - - - - - - 1,085,527
Unassigned - - - - - - - - - 7,511,998
Total general fund 3,962,832$ 5,739,138$ 6,606,501$ 7,544,040$ 10,287,475$ 10,528,125$ 10,214,669$ 9,871,994$ 9,130,273$ 8,915,404$
All Other Governmental Funds
Reserved 109,799$ 254,568$ 829,701$ 1,395,767$ 4,220,225$ 3,575,592$ 2,310,481$ 1,385,265$ 667,682$ -$
Unreserved, reported in:- - - - - - - - - -
Special revenue funds 177,390 263,242 411,229 175,192 404,749 558,653 643,223 1,075,343 1,328,145 -
Capital projects funds - 7,342,304 5,171,662 8,584,781 3,943,654 1,957,116 323,597 326,600 - -
Permanent fund 24,707 25,232 25,587 26,292 27,477 28,901 30,070 30,507 30,720 -
Nonspendable - - - - - - - - - 30,869
Restricted - - - - - - - - - 4,162,423
Total all other governmental funds 311,896$ 7,885,346$ 6,438,179$ 10,182,032$ 8,596,105$ 6,120,262$ 3,307,371$ 2,817,715$ 2,026,547$ 4,193,292$
Note: In fiscal year 2011, the City implemented GASB 54 which changed the fund balance classifications to nonspendable, restricted,
committed, assigned and unassigned. See Note 1 to the Basic Financial Statements.
Fiscal Year
77
Table 4
City of Friendswood
Changes in Fund Balances, Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
(unaudited)
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Revenues
Taxes 12,515,917$ 13,688,737$ 14,843,855$ 15,779,126$ 16,190,756$ 16,961,818$ 17,606,273$ 18,763,998$ 19,104,625$ 19,592,092$
Fines and penalties 631,066 639,678 879,369 1,112,916 1,163,984 1,288,794 1,161,903 1,143,102 1,043,126 1,012,592
Licenses and permits 922,808 856,721 807,041 717,607 769,352 1,017,502 944,756 966,797 960,479 1,069,845
Intergovernmental 16,294,283 526,316 795,325 985,339 535,074 248,702 3,801,013 5,794,303 2,652,037 3,109,645
Investment earnings 269,109 153,848 218,419 375,123 906,552 1,054,698 639,402 161,106 90,337 109,272
Donations - 235,749 215,535 213,381 219,353 229,939 265,535 272,911 280,223 276,209
Other revenues 509,560 794,228 152,616 414,923 277,995 279,788 37,876 34,448 81,366 78,243
Total revenues 31,142,743 16,895,277 17,912,160 19,598,415 20,063,066 21,081,241 24,456,758 27,136,665 24,212,193 25,247,898
Expenditures
General government 2,897,613 3,042,541 3,249,965 3,420,274 3,315,844 4,605,245 4,114,662 4,178,062 4,224,384 4,397,858
Public safety 4,961,812 5,530,953 5,810,503 7,127,975 6,903,806 7,482,603 12,404,745 14,717,404 9,799,372 10,093,964
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 works 2,092,488 - - - - - - - 1,956,479 1,637,237
Community development 19,464,924 - - - - - - - 1,208,899 1,284,188
Community services 4,250,205 2,751,993 2,655,315 2,626,329 2,630,094 2,866,388 3,266,250 3,439,475 2,458,422 2,472,015
Library - - - - - - - - 979,084 979,978
Capital outlay 195,385 1,442,339 4,033,197 7,040,173 4,292,854 3,711,569 4,339,546 2,489,845 3,799,303 4,254,582
Debt principal payment 548,205 468,987 469,930 459,422 608,184 658,073 774,584 787,293 787,590 1,065,865
Interest and fiscal agent charges 188,958 213,741 476,207 594,076 757,402 739,487 704,136 691,638 773,744 864,746
Bond issuance costs and fees - - - - - - - - - 200,227
Total expenditures 34,599,590 18,437,946 19,206,242 23,704,608 21,087,582 23,664,163 28,649,827 29,710,598 25,987,277 27,250,660
Excess of revenues
under expenditures (3,456,847) (1,542,669) (1,294,082) (4,106,193) (1,024,516) (2,582,922) (4,193,069) (2,573,933) (1,775,084) (2,002,762)
Other Financing Sources (Uses)
Sale of capital assets - 15,826 - - 187,345 785,942 22,600 - 23,340 8,992
Insurance recoveries - - - - - - 63,106 123,707 50,579 45,334
Issuance of debt 229,460 8,701,495 - 8,024,224 - - - - - 3,460,000
Capital lease proceeds - - - - - - - 1,133,460 - -
Refunding bonds issued 1,629,707 - - - - - - - - 5,460,000
Payment to refunding bond escrow agent (1,611,304) - - - - - - - - -
Premium on issuance of debt - - - - - - - - - 317,452
Transfer in 17,225,350 1,955,635 853,073 923,361 904,955 1,226,304 992,586 2,098,405 1,512,987 1,235,892
Transfer out (16,621,918) (1,382,860) (138,795) (160,000) (224,105) (350,688) (11,570) (1,613,970) (1,344,711) (6,573,032)
Total other financing sources (uses)851,295 9,290,096 714,278 8,787,585 868,195 1,661,558 1,066,722 1,741,602 242,195 3,954,638
Net change in fund balance (2,605,552)$ 7,747,427$ (579,804)$ 4,681,392$ (156,321)$ (921,364)$ (3,126,347)$ (832,331)$ (1,532,889)$ 1,951,876$
Debt service as a percentage of
noncapital expenditures 2.1%4.0%6.2%6.3%8.1%7.0%6.1%5.4%7.0%8.4%
Note:From 1997 to 2002, Public Works and Community Development were two separate departments. From 2003 to 2009, the departments were combined. In 2010,
they are shown as separate departments.
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 City adopted 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 is established, additional undesignated funds are allowed to accumulate for future capital projects.
Fiscal Year
78
Table 5
City of Friendswood
Assessed Value and Actual Value of Taxable Property
Last Ten Fiscal Years
(Unaudited)
Fiscal Total Estimated
Year Commercial Total Taxable Direct Actual
Ended Residential and Industrial Other Tax Exempt Assessed Tax Taxable
September 30,Property Property Property Property Value Rate Value
2002 1,418,354,411$ 101,081,380$ 170,988,340$ 90,631,200$ 1,781,055,331$ 0.63850 1,690,424,131$
2003 1,549,261,881 109,659,080 176,329,200 96,366,250 1,931,616,411 0.63850 1,835,250,161
2004 1,770,911,545 116,739,133 186,106,639 105,017,040 2,178,774,357 0.63850 2,073,757,317
2005 1,868,119,395 119,696,390 173,923,130 121,988,410 2,283,727,325 0.63850 2,161,738,915
2006 1,984,426,335 122,337,518 167,808,785 125,184,070 2,399,756,708 0.60400 2,274,572,638
2007 2,147,192,985 151,086,039 193,971,876 147,461,610 2,639,712,510 0.58210 2,492,250,900
2008 2,289,027,422 154,237,707 202,571,688 149,658,030 2,795,494,847 0.57640 2,645,836,817
2009 1,923,530,682 135,428,527 169,686,128 108,171,840 2,336,817,177 0.57970 2,228,645,337
2010 1,971,335,722 136,962,495 172,946,410 111,507,506 2,392,752,133 0.57970 2,281,244,627
2011 2,010,938,042 136,878,595 158,702,975 113,790,301 2,420,309,913 0.58510 2,306,519,612
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.
79
Table 6
City of Friendswood
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
(unaudited)
(rate per $100 of assessed value)
Fiscal
Year Friendswood Clear Creek Galveston County
Ended Debt Total Independent Independent Drainage Galveston Harris
September 30,General Service Direct School District School District District County County
2002 0.5547$ 0.0838$ 0.6385$ 1.6170$ 1.7250$ 0.1500$ 0.5654$ 0.63998$
2003 0.5547 0.0838 0.6385 1.6370 1.7400 0.1550 0.6063 0.63998
2004 0.5547 0.0838 0.6385 1.6370 1.7300 0.1500 0.6063 0.63998
2005 0.5547 0.0838 0.6385 1.6370 1.7450 0.1483 0.6388 0.63998
2006 0.5243 0.0797 0.6040 1.5070 1.7750 0.1450 0.5874 0.63998
2007 0.5120 0.0701 0.5821 1.5700 1.6300 0.1450 0.5874 0.63998
2008 0.5016 0.0748 0.5764 1.1770 1.3200 0.1425 0.5686 0.62998
2009 0.5097 0.0700 0.5797 1.3670 1.3600 0.1425 0.5586 0.62998
2010 0.4997 0.0800 0.5797 1.3670 1.3600 0.1425 0.6186 0.62998
2011 0.5198 0.0653 0.5851 1.3670 1.3600 0.1425 0.6198 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 apply
to all property owners. Overlapping rates for Friendswood Independent School District, Galveston County Consolidated Drainage District and Galveston
County apply only to residents whose property is in Galveston County. Overlapping rates for Clear Creek Independent School District and Harris County
apply only to residents whose property is in Harris County.
City Direct Rates Overlapping Rates
80
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. 10,225,400$ 0.43%7,772,680$ 0.56%
H.E. Butt Grocery Company 8,489,480 0.36%- -
HCP Friendswood LLC 6,995,240 0.29%- -
Autumn Creek Dev LTD 5,762,590 0.14%7,701,520 0.55%
Buzbee Family LTD Partnership 5,679,200 0.24%- -
MB Friendswood Parkwood LP 5,383,320 0.22%- -
Friendswood Retirement 5,379,393 0.22%8,369,445 0.60%
Comcast of Houston LLC 4,413,130 0.18%- -
Creekwood Associates LLC 4,367,180 0.18%- -
HEB Pantry Foods 3,544,905 0.14%- -
Kroger Texas, LP 3,486,520 0.15%- -
Friendswood Huntington Woods 3,470,400 0.16%- -
Friendswood Realty LP 3,419,464 0.14%- -
Rebescher, J Michael & TR 3,295,830 0.14%- -
Maxi-Ban LTD 3,184,380 0.15%- -
Frontier Land V P L L 2,891,265 0.12%- -
Howard, Jack A 2,636,610 0.15%- -
Raton Plaza Shop Cntr Investors LTD 2,558,050 0.10%- -
Buzbee Family Limited Partnership 2,509,010 0.11%- -
Stuart, Edward F, Jr 2,583,220 0.11%- -
Exxon Corporation - - 12,059,180 0.87%
Southwestern Bell Telephone Co. - - 13,190,740 0.95%
Blackhawk Apartments - - 9,235,710 0.67%
Southwest Properties - - 7,907,970 0.57%
Albertson's - - 5,880,495 0.42%
Mystic LTD - - 3,933,640 0.28%
ACMC Friendswood Inc.- - 4,929,600 0.36%
Total 90,274,587 3.73%80,980,980 5.83%
All other taxpayers 2,330,035,326 96.27%1,307,257,768 94.17%
2,420,309,913$ 100.00%1,388,238,748$ 100.00%
Source: Galveston County Appraisal District
2011 2002
81
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
2002 8,863,904$ 8,721,196$ 98.39%137,121$ 8,858,317$ 99.94%
2003 9,642,413 9,496,887 98.49%134,973 9,631,860 99.89%
2004 10,785,308 10,630,820 98.57%144,308 10,775,128 99.91%
2005 11,221,282 11,078,265 98.73%132,051 11,210,316 99.90%
2006 11,151,572 11,019,314 98.81%133,099 11,152,413 100.01%
2007 11,740,541 11,532,882 98.23%191,793 11,724,675 99.86%
2008 12,351,183 12,193,715 98.73%203,267 12,396,982 100.37%
2009 13,230,005 13,113,928 99.12%145,400 13,259,328 100.22%
2010 13,482,173 13,395,543 99.36%80,102 13,475,645 99.95%
2011 13,680,511 13,608,076 99.47%- 13,608,076 99.47%
Source: Galveston County Tax Assessor/Collector and City of Friendswood records.
Collected within the
Fiscal Year of the Levy Total Collections to Date
82
Table 9
City of Friendswood
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(Unaudited)
General Certificates General Certificates Water Total Percentage of
Fiscal Obligation of Revenue Capital Obligation of Revenue Primary Personal Per
Year Bonds Obligation Bonds Leases Bonds Obligation Bonds Government Income Capita
2002 1,915,518$ -$ -$ 713,060$ 2,994,109$ 2,714,826$ 14,091,221$ 22,428,734$ 0.28%670$
2003 10,375,891 - - 510,858 2,468,558 2,635,000 14,185,000 30,175,307 0.36%893
2004 10,059,865 - - 362,154 1,830,135 2,535,000 14,160,000 28,947,154 0.33%848
2005 17,590,000 - - 237,597 3,310,000 470,000 14,020,000 35,627,597 0.39%1,040
2006 17,150,000 - - 168,957 2,855,000 280,000 30,665,000 51,118,957 0.50%1,490
2007 16,660,000 - - 96,380 2,375,000 50,000 30,515,000 49,696,380 0.46%1,430
2008 16,065,000 - - 16,351 1,680,000 - 30,355,000 48,116,351 0.41%1,355
2009 15,445,000 - - 982,518 865,000 - 42,260,000 59,552,518 0.50%1,582
2010 14,800,000 - - 839,928 - - 42,045,000 57,684,928 N/A 1,516
2011 22,885,000 - - 710,023 - - 35,205,000 58,800,023 N/A 1,579
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 not
included on this table.
N/A - Information is not available.
Governmental Activities Business-Type Activities
83
Table 10
City of Friendswood
Ratios of Net General Bonded Debt Outstanding
Last Ten Fiscal Years
(Unaudited)
Percentage of
General Less Debt Net Actual Taxable
Fiscal Assessed Obligation Service General Value of Per
Year Population Value Bonds Funds Bonded Debt Property Capita
2002 33,500 1,781,055,331$ 1,915,518$ 109,799$ 1,805,719$ 0.10%54$
2003 33,800 1,931,616,411 10,375,891 254,568 10,121,323 0.52%299
2004 34,152 2,178,774,357 10,059,865 829,701 9,230,164 0.42%270
2005 34,272 2,283,727,325 17,590,000 1,395,767 16,194,233 0.71%473
2006 34,306 2,399,756,708 17,150,000 1,595,397 15,554,603 0.65%453
2007 34,759 2,639,712,510 16,660,000 1,813,320 14,846,680 0.56%427
2008 35,500 2,795,494,847 16,065,000 2,104,376 13,960,624 0.50%393
2009 37,653 2,336,817,177 15,445,000 2,355,024 13,089,976 0.56%348
2010 38,057 2,392,752,133 14,800,000 594,422 14,205,578 0.59%373
2011 37,247 2,420,309,913 22,885,000 308,231 22,576,769 0.93%606
Note:Details regarding the City's outstanding debt can be found in the notes to the financial statements.
General Bonded Debt Outstanding
84
Table 11
City of Friendswood
Direct and Overlapping Governmental Activities Debt
As of September 30, 2011
(Unaudited)
Estimated
Estimated Share of
Debt Percentage Overlapping
Governmental Unit Outstanding Applicable Debt
Debt repaid with property taxes
Friendswood Independent School District 113,589,978$ 100.00%113,589,978$
Clear Creek Independent School District 665,840,613 3.437%22,884,942
Galveston County 297,854,000 7.68%22,885,016
Harris County 3,338,619,000 0.548%18,285,616
Subtotal, overlapping debt 177,645,552
City direct debt 23,595,023
Total direct and overlapping debt 201,240,575$
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 governments that is borne
by the residents and businesses of the City of Friendswood. The City’s share of the debt of the overlapping
governments is based on the ratio of the assessed value of the City’s own property to that of each of the
other governments. 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.
85
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 purpose 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 ended September 30, 2011, is $.5851 per $100 of assessed valuation with assessed
valuation being 100% of market value.
86
Table 13
City of Friendswood
Pledged-Revenue Coverage
Last Ten Fiscal Years
(Unaudited)
Utility Less:Net
Fiscal Service Operating Available Debt Service
Year Charges Expenses Revenue Principal Interest Coverage
2002 7,506,333$ 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
2010 9,854,083 5,184,330 4,669,753 215,000 1,904,689 2.20
2011 12,726,936 5,410,497 7,316,439 1,440,000 1,640,437 2.38
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
87
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
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 11,744,572,000 40,711 4.9%
2009 37,653 11,937,436,000 41,621 6.2%
2010 38,057 - - 7.1%
2011 37,247 - - 6.8%
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 Workforce 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;
2010 and 2011 numbers were not available.
88
Table 15
City of Friendswood
Principal Employers
Current Year and Five Years Ago
(Unaudited)
Percentage Percentage
Estimated of Total City Estimated of Total City
Employer Employees Workforce Employees Workforce
Friendswood ISD 676 26.57%675 34.84%
HEB 350 13.76%275 14.19%
Kroger 305 11.99%234 12.07%
City of Friendswood 233 9.16%222 11.46%
Clear Creek ISD 201 7.90%2 - 0.00%1
Friendship Haven Nursing Home 140 5.50%135 6.97%
Friendswood Healthcare (Autumn Hills) 91 3.58%90 4.64%
McDonalds 89 3.50%33 1.70%
Emeritus 70 2.75%- 0.00%
U.S. Post Office 57 2.24%70 3.61%
UTMB 52 2.04%- 0.00%1
Timber Creek Golf Club 45 1.77%41 2.12%
Melange 43 1.69%- 0.00%
Sonic 42 1.65%49 2.53%
Madre's Mexican Restaurant 41 1.61%- 0.00%
Luna's Mexican Restaurant 40 1.57%40 2.06%
Perry & Sons Market and Grille 35 1.38%- 0.00%1
Village on the Park 34 1.34%34 1.75%
Gary Greene Realtors - 0.00%40 2.06%
Total 2,544 100.00%1,938 100.00%
Source: City Economic Development Division
Note: Principal Employer data was not available for fiscal year 2001 - 2005.
1 Data was not available for fiscal year 2006.
2 Includes Wedgewood Elementary and Brookside Intermediate.
2011 2006
89
Table 16
City of Friendswood
Full-time Equivalent City Government Employees by Function/Program
Last Ten Fiscal Years
(Unaudited)
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Function/Program
General Government:
City Manager 5.50 5.50 5.50 5.50 5.50 5.50 5.50 5.50 5.50 5.50
City Secretary 4.00 4.00 4.00 4.00 4.00 5.00 5.00 5.00 5.00 5.00
Administrative Services 20.64 21.70 22.72 24.44 25.81 26.19 27.20 27.20 27.20 27.20
Public Safety:
Police 62.94 65.06 67.40 70.07 72.06 81.41 83.90 79.40 79.40 80.40
Fire marshall and fire 12.50 12.58 12.85 12.85 4.50 6.11 6.10 6.10 6.10 6.10
Public Works:17.00 - - - - - - - 19.00 19.00
Community Development:15.00 - - - - - - - 17.70 17.70
Community Development and
Public Works:- 34.00 34.00 34.00 35.00 36.00 36.00 36.70 - -
Community Services:30.42 30.43 30.43 30.43 31.01 32.18 32.20 32.20 18.95 18.95
Library - - - - - - - - 14.72 14.72
Water:9.00 9.00 9.00 9.00 9.00 9.00 9.00 10.30 10.30 10.30
Sewer:6.00 6.00 7.00 7.00 8.00 8.00 8.00 9.00 9.00 9.00
Total City Employees:183.00 188.27 192.90 197.29 194.88 209.39 212.90 211.40 212.87 213.87
Source: City of Friendswood Budget Documents
Notes: Beginning with fiscal year 2006, the fulltime equivalent for Fire Marshal and Fire include only the Fire Marshal Department. The City
has a contract with the Friendswood Volunteer Fire Department and there are no employees paid directly by the City.
In 2002, public works and community development were two separate departments. From 2003 to 2009, the departments were
combined. In 2010 and 2011, they are shown as two separate departments.
Beginning in fiscal year 2010, the fulltime equivalent for Library is shown separate from Community Services. In previous years, the fulltime
equivalent is included with Community Services.
Full-time Equivalent Employees as of September 30
90
Table 17
City of Friendswood
Operating Indicators by Function/Program
Last Ten Fiscal Years
(Unaudited)
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Function/Program
General Government:
Building permits issued 1,266 1,048 851 1,129 882 975 872 1,189 984 1,222
Building inspections conducted 12,554 10,841 10,051 12,641 12,264 11,135 11,472 6,673 8,744 9,514
Police:
Physical arrests 625 752 1,189 1,041 1,804 1,923 1,868 1,794 2,002 1,962
Parking violations 34 74 45 22 30 34 46 33 27 82
Traffic violations 6,387 9,754 11,196 12,053 12,623 11,374 7,897 7,821 7,000 7,291
Fire Marshall:
Inspections 383 1,065 812 731 668 1,300 1,312 1,653 1,509 1,444
Fire:
Emergency responses 2,264 2,285 2,395 2,453 2,497 2,723 2,794 2,950 2,737 2,818
Fires extinguished 84 79 82 93 75 74 118 102 110 108
Parks and Recreation:
Recreation participants NA NA NA NA NA NA 7,547 12,283 13,792 13,894
Facility reservations NA NA NA NA NA 1,115 1,065 1,727 1,451 503
Library:
Volumes in collection 87,639 88,185 88,737 90,163 92,633 93,028 96,100 94,512 99,880 97,622
Total volumes borrowed 279,850 290,044 280,520 281,060 300,241 308,718 323,323 350,892 356,787 349,223
Water:
New connections 242 270 388 208 209 289 202 46 160 173
Water main breaks - 10 54 76 105 44 73 73 64 516
Average daily consumption 4,008 4,172 3,957 4,094 3,886 3,472 4,217 4,209 3,408 6,406
(thousands of gallons)
Peak daily consumption 10,081 11,491 10,718 9,935 7,030 6,358 11,004 7,187 7,606 13,698
Sewer:
Average daily sewage treatment 3,050 3,332 3,258 3,081 3,064 3,425 3,120 2,950 3,465 2,787
(thousands of gallons)
Maximum daily flow 13,913 10,180 8,563 10,587 10,484 10,484 7,520 9,537 11,393 10,833
(thousands of gallons)
Source: Various City departments and prior year CAFRs
NA - Information is not available.
Fiscal Year Fiscal Year
91
Table 18
City of Friendswood
Capital Asset Statistics by Function/Program
Last Ten Fiscal Years
(Unaudited)
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Function/Program
Police
Stations 1 1 1 1 1 1 1 1 1 1
Patrol units 14 15 15 16 18 28 27 24 26 26
Fire
Stations 3 3 3 3 3 3 3 4 4 4
Public Works
Streets - paved (miles)105 105 157 157 179 150 159 160 161 162
Streets - unpaved (miles)1 1 4 4 1 0 2 2 2 2
Traffic signals 0 0 3 3 3 3 3 3 3 3
Parks and Recreation
Acreage 189 189 189 189 189 189 189 189 189 189
Public Safety:Parks 8 8 8 8 8 8 8 8 8 8
Swimming pool 1 1 1 1 1 1 1 1 1 1
Tennis courts 4 4 4 4 4 4 4 4 4 4
Library 1 1 1 1 1 1 1 1 1 1
Water
Water mains (miles)157 160 160 165 179 180 180 181 183 184
Fire hydrants 1,250 1,250 1,250 1,250 1,250 1,275 1,275 1,275 1,305 1,324
Connections 10,330 10,600 10,988 11,196 11,405 11,748 11,982 12,057 12,231 12,476
Storage capacity 5,993 5,993 5,993 5,993 5,993 5,993 5,993 5,993 5,993 7,500
(thousands of gallons)
Sewer
Sanitary sewers (miles)155 160 160 165 153 155 155 156 158 159
Connections 9,658 10,240 10,331 10,537 10,682 10,902 11,115 11,256 11,404 11,563
Storm sewers (miles)85 86 92 92 92 95 95 96 98 99
Treatment capacity 4,850 4,850 4,850 4,850 4,850 4,850 4,850 4,850 4,850 4,850
(thousands of gallons)
Source: Various City departments and prior year CAFRs
Fiscal Year