CAFR FY 2008-2009CITY OF SCHERTZ, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FISCAL YEAR ENDED SEPTEMBER 30, 2009
OFFICIALS ISSUING REPORT
Don E. Taylor
City Manager
Juan F. Santoya
Director of Finance
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CITY OF SCHERTZ, TEXAS
TABLE OF CONTENTS
SEPTEMBER 30, 2009
PAGE
FINANCIAL SECTION
INDEPENDENT AUDITOR'S REPORT ..................................................................... ............................... 2
MANAGEMENTS DISCUSSION AND ANALYSIS ................................................... ............................... 4
BASIC FINANCIAL STATEMENTS ......................................................................... .............................13
STATEMENT OF NET ASSETS .................................................................................. .............................14
STATEMENT OF ACTIVITIES ................................................................................... .............................16
BALANCE SHEET - GOVERNMENTAL FUNDS ...................................................... .............................18
RECONCILIATION OF BALANCE SHEET ................................................................ .............................20
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES -
GOVERNMENTALFUNDS ...................................................................................... .............................21
RECONCILIATION OF THE STATEMENT OF REVENUES, GOVERNMENTAL FUNDS TO THE
STATEMENT OF ACTIVITIES ................................................................................. .............................23
STATEMENT OF NET ASSETS - PROPRIETARY FUNDS
.24
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS ........................................................................................... .............................26
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS
NOTES TO BASIC FINANCIAL STATEMENTS
.28
.29
REQUIRED SUPPLEMENTARY INFORMATION ................................................. .............................49
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES -
BUDGETAND ACTUAL .......................................................................................... .............................50
NOTES TO SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -
BUDGETAND ACTUAL .......................................................................................... .............................52
TEXAS MUNICIPAL RETIREMENT SYSTEM ANALYSIS OF FUNDING PROGRESS -
LAST FIVE FISCAL YEARS .................................................................................... .............................53
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CITY OF SCHERTZ, TEXAS
TABLE OF CONTENTS (CONTINUED)
SEPTEMBER 30, 2009
FINANCIAL SECTION (CONTINUED)
OTHER SUPPLEMENTARY INFORMATION ....................................................... .............................54
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES .......... .............................55
COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS ......... .............................57
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND
BALANCES - NONMAJOR GOVERNMENTAL FUNDS ........................................ .............................59
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -
BUDGET TO ACTUAL - HOTEL OCCUPANCY FUND .......................................... .............................61
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET
TO ACTUAL - PARK FUND ..................................................................................... .............................62
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -
BUDGET TO ACTUAL - RECYCLING FUND ......................................................... .............................63
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -
BUDGET TO ACTUAL - POLICE FORFEITURES FUND ....................................... .............................64
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
BUDGET TO ACTUAL - LIBRARY GRANT FUND ................................................ .............................65
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -
BUDGET TO ACTUAL - PARKS AND WILDLIFE FUND ...................................... .............................66
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -
BUDGET TO ACTUAL - HISTORICAL COMMITTEE FUND ................................ .............................67
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -
BUDGET TO ACTUAL - DEBT SERVICE FUND .................................................... .............................68
COMPARATIVE BALANCE SHEETS - GENERAL FUND
Moll
COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND
BALANCE - GENERAL FUND ................................................................................. .............................70
DISCRETELY PRESENTED COMPONENT UNITS
71
COMBINING BALANCE SHEETS - DISCRETELY PRESENTED COMPONENT UNITS .....................72
COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND
BALANCE - DISCRETELY PRESENTED COMPONENT UNITS ........................... .............................73
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CITY OF SCHERTZ, TEXAS
TABLE OF CONTENTS (CONTINUED)
SEPTEMBER 30, 2009
STATISTICAL SECTION
NET ASSETS, BY COMPONENT - LAST SEVEN FISCAL YEARS - (ACCRUAL BASIS OF
ACCOUNTING) ........................................................................................................ .............................76
CHANGE IN NET ASSETS - LAST SEVEN FISCAL YEARS - (ACCRUAL BASIS OF
FUND BALANCES - GOVERNMENTAL FUNDS -LAST TEN FISCAL YEARS - (MODIFIED ACCRUAL
BASISOF ACCOUNTING) ....................................................................................... .............................82
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS - LAST TEN FISCAL YEARS -
(MODIFIED ACCRUAL BASIS OF ACCOUNTING) ............................................... .............................84
TAX REVENUE BY SOURCE - GOVERNMENTAL FUNDS - LAST SEVEN YEARS .........................86
TOTAL WATER AND SEWER CONSUMPTION AND RATES - LAST TEN FISCAL YEARS .............87
PRINCIPAL WATER AND SEWER CONSUMERS - CURRENT AND NINE YEARS AGO ..................88
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY - LAST
TENFISCAL YEARS ................................................................................................ .............................89
DIRECT AND OVERLAPPING PROPERTY TAX RATES - LAST TEN FISCAL YEARS .....................90
PRINCIPAL PROPERTY TAX PAYERS - CURRENT YEAR AND NINE YEARS AGO ........................91
PROPERTY TAX LEVIES AND COLLECTIONS - LAST TEN FISCAL YEARS ...... .............................92
ASSESSED VALUE - ACT TP - LAST SIX FISCAL YEARS
93
RATIOS OF OUTSTANDING DEBT BY TYPE - LAST TEN FISCAL YEARS .......... .............................94
RATIOS OF GENERAL BONDED DEBT OUTSTANDING - LAST TEN FISCAL YEARS ....................96
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT .................. .............................97
DEBT MARGIN INFORMATION - LAST TEN FISCAL YEARS
PLEDGED REVENUE COVERAGE - LAST TEN FISCAL YEARS
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100
DEMOGRAPHIC AND ECONOMIC STATISTICS - LAST TEN FISCAL YEARS ... ............................101
TOP TEN PRINCIPAL EMPLOYERS - CURRENT YEAR AND NINE YEARS AGO ...........................102
FULL -TIME EQUIVALENT CITY GOVERNMENTAL EMPLOYEES BY FUNCTION - LAST
EIGHTFISCAL YEARS ............................................................ ............................... ............................103
OPERATING INDICATORS BY FUNCTION /PROGRAM - LAST TEN FISCAL YEARS ....................104
CAPITAL ASSET STATISTICS BY FUNCTION /PROGRAM - LAST TEN FISCAL YEARS ...............106
III
CITY OF SCHERTZ, TEXAS
TABLE OF CONTENTS (CONTINUED)
SEPTEMBER 30, 2009
STATISTICAL SECTION (CONTINUED)
COMPLIANCE SECTION
REPORT ON COMPLIANCE AND INTERNAL CONTROL OVER FINANCIAL REPORTING
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENTAUDITING STANDARDS
SCHEDULE OF FINDINGS AND RESPONSES
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INTRODUCTORY SECTION
February 22, 2010
1400 SCHERTZ PARKWAY
SCIIERTZ, TEXAS 78154 -1634
PHONE (210) 619 -1000
FAX (210) 619 -1050 DON E. TAYLOR
CITY MANAGER
To the Honorable Mayor, City Council, and the Citizens of City of Schertz:
State law requires that local governments publish a complete set of financial statements presented in conformity
with generally accepted accounting principles in the United States of America (U.S. GAAP) and audited in
accordance with generally accepted auditing standards in the United States of America by a firm licensed certified
public accountants. Pursuant to that requirement, we hereby issue the comprehensive annual financial report of
the City of Schertz for the fiscal year ended September 30, 2009.
This report consists of management's representations concerning the finances of the City of Schertz.
Consequently, management assumes full responsibility for the completeness and reliability of all the information
presented in this report. To provide a reasonable basis for making these representations, management of the City
of Schertz has established a comprehensive internal control framework that is designed both to protect the
government's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation
of the City of Schertz's financial statements in conformity with U.S. GAAP. Because the cost of internal controls
should not outweigh their benefits, the City of Schertz comprehensive framework of internal controls has been
designed to provide reasonable rather than absolute assurance that the financial statements will be free from
material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial
report is complete and reliable in all material respects.
The City of Schertz's financial statements have been audited by Armstrong, Vaughan & Associates P.C. a firm of
licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that
the financial statements of the City of Schertz for the fiscal year ended September 30, 2009, are free of material
misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements; assessing the accounting principles used and significant estimates made by
management; and evaluating the overall financial statement presentation. The independent auditor concluded,
based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the City of
Schertz's financial statements for the fiscal year ended September 30, 2009, are fairly presented in conformity
with U.S. GAAP. The independent auditor's report is presented as the first component of the financial section of
this report.
GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic
financial statements in the form of Management's Discussion and Analysis (MD &A). This letter of transmittal is
designed to complement MD &A and should be read in conjunction with it. The City of Schertz's MD &A can be
found immediately following the report of the independent auditors.
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Profile of the Government
The City of Schertz, incorporated in 1958, is located in the central part of Texas, which is considered to be a top
growth area in the state, and one of the top growth areas in the country. The City of Schertz currently occupies a
land area of 28.64 square miles and serves a population of 32,730. The City of Schertz is empowered to levy a
property tax on both real and personal properties located within its boundaries. It also is empowered by state
statue to extend its corporate limits by annexation, which occurs periodically when deemed appropriate by the
governing body.
The City of Schertz has operated under the council - manager form of government since 30 November 1972.
Policymaking and legislative authority are vested in a City Council consisting of the mayor and 5 other members.
The City Council is responsible for establishing public policy on City matters by the passage of appropriate
ordinances and resolutions. The City Manager is responsible for overseeing the day -to -day operations of the
government, implementing policy established by City Council, and for appointing the heads of the various
departments. The council is elected on a non - partisan basis. Council members serve two -year staggered terms,
with two council members elected every two years. The mayor is elected to serve a two -year term. The mayor
and all five council members are elected at large.
The City of Schertz provides a full range of services, including police and fire protection, the construction and
maintenance of streets, recreational facilities, cultural events, water and sewer services and EMS services.
The annual budget serves as the foundation for the City of Schertz's financial planning and control. All
departments of the City of Schertz are required to submit requests for appropriation to the City Manager by June
of each year. The City Manager uses these requests as the starting point for developing a proposed budget. The
City Manager then presents this proposed budget to the council for review prior to 1 August. The council then
holds public hearings on the proposed budget and to adopt a final budget by no later than September 30th, the
close of the City of Schertz's fiscal year. The appropriated budget is prepared by each department (e.g. police).
Department heads may make transfers of appropriations within a department. The City Manager may make
transfers between and among departments if the total single transfer does not exceed $50,000. If such a transfer
occurs the City Manager shall inform City Council within 30 days. In no case shall money be transferred between
funds without City Council approval. Budget to actual comparisons are provided in this report for each individual
governmental fund for which an appropriated annual budget has been adopted. For the general fund, this
comparison is presented on pages 48 -50 as part of the required supplementary information.
Factors Affecting Financial Condition
The information presented in the financial statements is perhaps best understood when it is considered from the
broader perspective of the specific environment within which the City of Schertz operates.
Local economy. The City of Schertz currently enjoys a favorable economic environment and local indicators
point to continued stability, despite the more turbulent national climate. In the housing market, local indicators
point to a seller's market trend for the first time in over 18 months and the average days to sell are coming down
towards the last quarter of 2009. The region has a manufacturing and industrial base that adds to the relative
stability of the unemployment rate, which currently stands at approximately 5.1 %. The Local labor force has
increased from 14,000 in January 2006 to over 15,000 people during the second quarter of 2009. Businesses with
headquarters or divisions located within the city's boundaries or in close proximity include Eye Care Centers of
America, Brandt Engineering, Cal -Tex Protective Coatings, Inc., Valero, FedEx Freight, Marshall Shredding
Company, Kraft Nabisco and Republic National Distributing Company. The region has a labor force of
approximately 946,000, and this number is expected to increase as the region continues to experience population
and business growth.
Long -term financial planning. In 2006, the citizens approved bond propositions for streets and drainage
improvements, a new library and additional recreational facilities. Streets and drainage improvements are
ongoing. The library was completed and opened in August 2009. The projected completion date of the recreation
center is March 2010. Total projected cost to the City of Schertz is $ 38,500,000.
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Cash management policies and practices. During the year, temporarily idle cash was invested through State
local investment pools. Cash available for longer term investments was invested in agency bonds and Certificates
of Deposit. Cash in the State local investment pools are essentially liquid. Longer term investments had an
average maturity of 3 years. The average yield on investments was about 1.5 percent. Active involvement in
investment vehicles was limited due to extremely low interest rates and market uncertainty. The rate of return was
simply not sufficient to justify the management expense.
Risk Management. During 2009, the City continued a risk management program for worker's compensation.
Various control techniques, including employee accident prevention training, have been implemented during the
year to minimize accident - related losses. Third -parry coverage is currently maintained for individual worker's
compensation claims and all other potential losses. Additional information on the City of Schertz's risk
management activity can be found in the notes to the financial statements.
Pension bcnclits. The City of Schertz sponsors an agent multiple- employer defined benefit pension plan for its
employees. Each year, an independent actuary engaged by the pension plan calculates the amount of the annual
contribution the City of Schertz must make to the pension plan to ensure the plan will be able to fully meet its
obligations to retired employees on a timely basis. As a matter of policy, the City of Schertz fully funds each
year's annual required contribution to the pension plan as determined by the actuary. The remaining unfunded
amount is being systematically funded as part of the annual required contribution calculated by the actuary.
Awards and Acknowledgements
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of
Achievement for Excellence in Financial Reporting to the City of Schertz for its comprehensive annual financial
report for the fiscal year ended September 30, 2008. This was the 211h consecutive year that the City has received
this prestigious award. In order to be awarded a Certificate of Achievement, the City must publish an easily
readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally
accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe our current comprehensive annual
financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting it
to the GFOA to determine its eligibility for another certificate.
The preparation of this report would not have been possible without the efficient and dedicated services of the
entire staff of the finance department. We would like to express our appreciation to all members of the
department who assisted and contributed to the preparation of this report.
In addition, without the assistance of each and every department head on staff, we would have none of the
successes we've enjoyed. Credit also must be given to the Mayor and the City Council for their unfailing support
for the City Manager and staff.
Respectfully submitted,
Don E. Taylor
City Manager
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MAYOR
CITY COUNCIL
CITY MANAGER
DIRECTOR OF FINANCE
CITY AUDITOR
CITY OF SCHERTZ, TEXAS
CITY OFFICIALS
HONORABLE HAL BALDWIN
DAVID SCAGLIOLA
JIM FOWLER
TONY WILENCHIK
(10 -01 -08 THRU 09- 16 -09)
JOHN TRAYHAN
MICHAEL CARPENTER
DON E. TAYLOR
JUAN F. SANTOYA, JR.
ARMSTRONG, VAUG14AN & ASSOCIATES, P.C.
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FINANCIAL SECTION
INDEPENDENT AUDITOR'S REPORT
To the Honorable Mayor and
Members of the City Council
City of Schertz, Texas
We have audited the accompanying financial statements of the governmental activities, the business -
type activities, the aggregate discretely presented component units, each major fund, and the aggregate
remaining fund information of the City of Schertz, Texas, as of and for the year ended September 30, 2009,
which collectively comprise the City's basic financial statements, as listed in the table of contents. These
financial statements are the responsibility of the City of Schertz, Texas' management. Our responsibility is to
express an opinion on these financial statements based on our audit.
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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.
In our opinion, 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 aggregate
discretely presented component units, each major fund, and the aggregate remaining fund information of the
City of Schertz, Texas, as of September 30, 2009, and the respective changes in financial position and cash
flows, where applicable, thereof for the year then ended in conformity with accounting principles generally
accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated
February 22, 2010 on our consideration of City of Schertz, Texas' 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 the internal control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be considered in assessing the
results of our audit.
The management's discussion and analysis and budgetary comparison information on pages 4 through 12 and
49 through 53, 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
information and express no opinion on it.
Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively
comprise the City of Schertz, Texas, basic financial statements. The introductory section, combining and
individual nonmajor fund financial statements, other schedules, and statistical tables 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 and other schedules have been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a whole. The introductory section and
statistical tables 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.
Armstrong, Vaughan & Assoc., P.C.
February 22, 2010
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MANAGEMENTS DISCUSSION AND ANALYSIS
As management of the City of Schertz, we offer readers of the City's financial statements this narrative
overview and analysis of the financial activities of the City of Schertz for the fiscal year ended
September 30, 2009. We encourage readers to consider the information presented here in conjunction with
additional information that we have furnished in our letter of transmittal, which can be found in the
introductory section of this report.
Financial Highlights
The assets of the City of Schertz exceeded its liabilities at the close of the most recent fiscal year by
$114,193,390 (net assets). Of this amount, $5,650,821 (unrestricted net assets) may be used to meet the
City's ongoing obligations to citizens and creditors.
The City's total net assets increased by $8,199,302. One - hundred percent of the increase is attributable to
capital contributions from developers.
As of the close of the current fiscal year, the City's governmental funds reported combined ending fund
balances of $17,601,165, a decrease of $6,686,111 in comparison with the prior year.
At the end of the current fiscal year, unreserved fund balance for the general fund was $1,508,497 or 8.1%
of total general fund expenditures, including capital outlay.
The City's total debt increased by $9,500,000 during the current fiscal year. The key factor in this increase
was the issuance of general obligation bonds in the amount of $9,500,000 which included refunding of
general obligation bonds of $2,900,000.
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 of Schertz is improving or
deteriorating.
The statement of activities presents information showing how the City's net assets changed during the most
recent fiscal year. All changes in net assets are reported as soon as the underlying event giving to the
change occurs, regardless of the timing of related cash flows. 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 unused vacation leave).
Both of the government -wide financial statements distinguish functions of the City of Schertz that are
principally supported by taxes and intergovernmental revenues (governmental activities) from other
functions that are intended to recover all or a significant portion of their costs through user fees and
charges (business -type activities). The governmental activities of the City of Schertz include general
government, public safety, streets and parks, health, and culture and recreation. The business -type
activities of the City of Schertz include a water and sewer department and an emergency medical services
department.
The government -wide financial statements include not only the City of Schertz itself (known as the
primary government) but also legally separate component units for which the City is financially
accountable. Financial information for these component units is reported separately from the primary
government.
The government -wide financial statements can be found on pages 14 through 17 of this report.
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. The City of Schertz, like other
state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-
related legal requirements. The funds of the City of Schertz can be divided into two categories:
governmental and proprietary.
Governmental funds. Governmental funds are used to account for essentially the same functions reported
as governmental activities in the government -wide financial statements. However, unlike the government -
wide financial statements, governmental fund financial statements focus on near term inflows and outflows
of spendable resources, as well as on balances of spendable resources available at the end of the fiscal
year. Such information is useful in evaluating a government's near -term financing requirements.
Because the focus of governmental funds is narrower than that of the government -wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government -wide financial statements. By doing
so, readers may better understand the long -term impact of the government's near -term financing decisions.
Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures,
and changes in fund balances provide a reconciliation to facilitate this comparison between governmental
funds and governmental activities.
The City of Schertz maintains eleven individual governmental funds. Information is presented separately
in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures,
and changes in fund balances for the general fund, the debt service fund, and the capital projects fund, all
of which are considered to be major funds. Data from the other eight governmental 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 elsewhere in this report.
The basic governmental fund financial statements can be found on pages 18 through 23 of this report.
Proprietary funds. The City of Schertz maintains one type of proprietary fund. Enterprise funds are used to
report the same functions presented as business -type activities in the government -wide financial
statements. The City of Schertz uses enterprise funds to account for its water and sewer department and
for its emergency medical services department.
Proprietary funds provide the same type of information as the government -wide financial statements, only
in more detail. The proprietary fund financial statements provide separate information for the water and
sewer department and for the emergency medical services department, both of which are considered to be
major funds of the City of Schertz.
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The basic proprietary fund financial statements can be found on pages 24 through 28 of this report.
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. The notes to the
financial statements can be found on pages 29 through 48 of this report.
Other information. In addition to the basic financial statements and accompanying notes, this report also
presents certain required supplementary information concerning the City's general fund budgetary
schedule. The City of Schertz adopts an annual appropriated budget for its general fund. A budgetary
comparison schedule has been provided for the general fund to demonstrate compliance with this budget.
Required supplementary information can be found on pages 49 through 53 of this report.
The combining statements referred to earlier in connection with non -major governmental funds are
presented immediately following the required supplementary information. Combining and individual fund
statements and schedules can be found on pages 55 through 67 of this report.
Government -wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a government's financial position.
In the case of the City of Schertz, assets exceeded liabilities by $114,193,390 at the close of the most
recent fiscal year.
The largest portion of the City's total net assets (94 %) reflects its investment in capital assets (e.g., land,
buildings, machinery, and equipment) less any related debt used to acquire those assets that is still
outstanding, plus bond proceeds that have not yet been signed. The City of Schertz uses these capital
assets to provide services to citizens; consequently, these assets are not available for operational type of
future spending. Although the City's investment in its capital assets is reported net of related debt, 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.
Current and Other Assets
Capital Assets
Total Assets
Long -Term Liabilities:
Outstanding
Other Liabilities
Total Liabilities
Net Assets:
Invested in Capital Assets,
Net of Related Debt
Restricted
Unrestricted
Total Net Assets
NET ASSETS
Governmental Activities
2009
2008
$ 24,019,488
$ 31,225,785
92,756,957
75,479,661
116, 776, 44 5
106,705,446
Business -Type Activities
2009 2008
$ 12,238,696 $ 16,675,990
55,958,362 50,262,433
68,197,058 66,938,423
Total
2009
2008
$ 36,258,184
$ 47,901,775
148,715,319
125,742,094
184,973,503
173,643,869
49,832,864 44,784,797 11,739,156 12,484,488 61,572,020 57,269,285
6,430,736 7,563,192 2,777,357 2,817,304 9,208,093 10,380,496
56,263,600 52,347,989 14,516,513 15,301,792 70,780,113 67,649,781
57,324,482 44,206,232 50,047,301 41,350,184 107,371,783 85,556,416
1,170,786 1,058,514 - - 1,170,786 1,058,514
2,017,577 9,092,711 3,633,244 10,286,447 5,650,821 19,379,158
$ 60,512,845 $ 54,357,457 $ 53,680,545 $ 51,636,631 $ 114,193,390 $ 105,994,088
Table A -1
An additional portion of the City's total net assets (1 %) represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net assets, $5,650,821 may
be used to meet the government's ongoing obligations to citizens and creditors.
At the end of the current fiscal year, the City of Schertz is able to report positive balances in all three
categories of net assets, both for the government as a whole, as well as for its separate governmental and
business -type activities. The same situation held true for the prior fiscal year.
The government's net assets increased by $8,199,302 during the current fiscal year. One - hundred percent
of this increase represents capital contributions from developers and the Economic Development
Corporation.
The following table indicates changes in net assets for governmental and business -type activities:
Revenues:
Program Revenues:
Charges for Services
Operating Grants and Contributions
Capital Grants and Contributions
General Revenues
Property Taxes
Other Taxes
Unrestricted Investment Earnings
Miscellaneous
Total Revenues
Expenses:
General Government
Public Safety
Streets and Parks
Health
Culture and Recreation
Interest and Other Fees
Water and Sewer
EMS
Total Expenses
INCREASE IN NET ASSETS
BEFORE TRANSFERS
TRANSFERS
CHANGE IN NET ASSETS
NET ASSETS, BEGINNING
NET ASSETS, ENDING
Governmental Activities
Business -Type Activities
Total
2009
2008
2009
2008
2009
2008
$ 4,521,705
$ 4,146,388
$ 17,557,655
$ 16,770,868
$ 22,079,360
$ 20,917,256
797,659
526,839
-
-
797,659
526,839
6,184,328
8,750,859
2,241,726
5,190,039
8,426,054
13,940,898
8,980,102
7,841,928
-
-
8,980,102
7,841,928
5,816,022
5,668,491
-
-
5,816,022
5,668,491
339,403
1,310,310
128,233
409,972
467,636
1,720,282
605,503
342,770
110,516
179,121
716,019
521,891
27,244,722
28,587,585
20,038,130
22,550,000
47,282,852
51,137,585
7,695,768
7,305,115
-
-
7,695,768
7,305,115
7,697,131
7,093,301
7,697,131
7,093,301
3,815,342
3,177,145
3,815,342
3,177,145
360,604
306,764
360,604
306,764
800,305
681,440
800,305
681,440
1,780,791
1,982,984
-
-
1,780,791
1,982,984
-
-
13,568,065
12,379,584
13,568,065
12,379,584
-
-
3,365,544
2,976,112
3,365,544
2,976,112
22,149,941
20,546,749
16,933,609
15,355,696
39,083,550
35,902,445
5,094,781
8,040,836
3,104,521
7,194,304
8,199,302
15,235,140
1,060,607
-
(1,060,607)
-
-
6,155,388
8,040,836
2,043,914
7,194,304
8,199,302
15,235,140
54,357,457
46,316,621
51,636,631
44,442,327
105,994,088
90,758,948
$ 60,512,845
$ 54,357,457
$ 53,680,545
$ 51,636,631
$ 114,193,390
$ 105,994,088
Table A -2
VA
9000000
8000000
7000000
6000000
5000000
4000000
3000000
2000000
1000000
0
Below is a graph showing total revenues by type for the City:
Total Revenues - Government -Wide
Charges for Operating Capital Grants Property Taxes Other Taxes Unrestricted Miscellaneous
Services Grants and and Investment
Contributions Contributions Earnings
Governmental activities accounted for 75.1% of the growth in the net assets of the City of Schertz. Most
of this increase is the result of capital contributions from developers. For the most part, increases in
expenses closely paralleled inflation and growth in the demand for services.
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
Total Expenses- Government -Wide
General Public Safety Streets and Health Culture and Interest and
Government Parks Recreation Other Fees
8
Revenues - Governmental Activities (Continued)
General Revenue by Source - Governmental Activities
Occupancy Tax, 2%
Franchise Tax, 9%
Miscellaneous, 4%
J Investment Earnings,
/ //_ 2%
Tax, 26%
Revenues - Business -Type Activities
Property Tax, 57010
Charges for services increased by $786,787. This increase was due to higher water consumption. Capital
grants and contributions decreased by $2,948,313. This decrease was due to decreased capital
contributions from developers.
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
2009 2008
Expenses- Business -Type Activities
$16,000,000
$14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
Water and Sewer EMS
Utilities
Financial Analysis of the Government's Funds
Program Revenue
Program Expense
Nonoperating Revenues
Capital Contributions and
Transfers
As noted earlier, the City of Schertz uses fund accounting to ensure and demonstrate compliance with
finance- related legal requirements.
Governmental funds. The focus of the City's governmental funds is to provide information on near -term
inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's
financing requirements. In particular, unreserved fund balance may serve as a useful measure of a
government's net resources available for spending at the end of the fiscal year.
As of the end of the current fiscal year, the City's governmental funds reported combined ending fund
balances of $17,601,165. Of this total amount, $2,103,313 constitutes unreserved fund balance, which is
available for spending at the government's discretion. The remainder of fund balances is reserved of
designated to indicate that it is not available for new spending because it has already been committed to
pay debt service, for capital improvement projects, and other restricted purposes.
The general fund is the chief operating fund of the City of Schertz. At the end of the current fiscal year,
unreserved fund balance of the general fund was $1,508,497, while total fund balance is $2,027,593, a
decrease of $3,026,432 from the prior year. The majority of this decrease was from capital outlay. As a
measure of the general fund's liquidity, it may be useful to compare both unreserved fund balance and total
fund balance to total fund expenditures. Unreserved fund balance represents 8.1% of total general fund
expenditures, including capital, while total fund balance represents 10.9% of that same amount.
The debt service fund has a total fund balance of $444,369 all of which is reserved for the payment of debt
service. The net decrease in fund balance during the current year in the debt service fund was minimal.
10
The capital projects fund has a total fund balance of $14,342,553, a decrease of $3,105,770. This decrease
was from the expenditure of funds for various construction projects.
Proprietary funds. The City's proprietary funds provide the same type of information found in the
government -wide financial statements, but in more detail.
Unrestricted net assets of the water and sewer fund at the end of the year amounted to $2,979,609 and
those for the Schertz EMS fund amounted to $653,635.
General Fund Budgetary Highlights
Differences between the original budget and the final amended budget and the final budget and actual
expenditures can be briefly summarized as follows:
• The shortfall in Legal was due to annexation, updates to the Unified Development Code and
revisions of ordinances.
• The Finance /Purchasing & Asset Management shortfall was due to the creation of an Asset
Management Department for tracking assets.
• Special Events shortfall was due to inaugural event and enhanced activities.
• The Police Department shortfall was a result of a lower personnel turnover rate.
• The Transfer Out shortfall was due to designated funds for the Library project.
During the year, the over - expenditures were funded by the unrestricted fund balance, as intended.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital assets. The City's investment in capital assets for its governmental and business -type activities as
of September 30, 2009, amounts to $148,715,319 (net of accumulated depreciation).
Major capital asset events during the current fiscal year included the following:
The City completed construction and opened the Library in August 2009. Construction on the new
recreation center is underway and is expected to be completed in March 2010.
CAPITAL ASSETS
(Net of Depreciation)
Governmental
Activities
Business -Type
Activities
Total
Table A -3
Additional information on the City's capital assets can be found in Note 5 on pages 38 and 39 of this
report.
11
2009
2008
2009
2008
2009
2008
Land
$ 6,975,895
$ 6,363,542
$ 608,638
$ 557,972
$ 7,584,533
$ 6,921,514
Buildings and Improvements
23,310,335
14,601,094
48,420,285
38,570,748
71,730,620
53,171,842
Machinery, Equipment,
and Vehicles
2,453,102
2,255,282
1,043,461
1,179,971
3,496,563
3,435,253
Infrastructure
48,617,124
41,314,355
-
-
48,617,124
41,314,355
Construction in Progress
11,400,501
10,945,388
5,885,978
9,748,051
17,286,479
20,693,439
TOTALS
$ 92.756.957
$ 75.479.661
$ 55.958.362
$ 50.056.742
$ 148.715.319
$ 125.536.403
Table A -3
Additional information on the City's capital assets can be found in Note 5 on pages 38 and 39 of this
report.
11
Long -Term Debt. At the end of the current fiscal year, the City of Schertz had total bonded debt
outstanding of $63,242,000. Of this amount, $57,430,000 comprises debt backed by the full faith and
credit of the government. The remainder of the City's debt represents bonds secured solely by specified
revenue sources, i.e., revenue bonds.
TOTALS $ 50.858.850 $ 46.055.778 $ 12.383.150 $ 13.040.300 $ 63.242.000 $ 59.096.078
Table A -4
The City's total debt increased by 7% during the current fiscal year.
The key factor in the increase is the City of Schertz issued general obligation bonds in the amount of
$9,500,000 for major capital projects and refunding of general obligation bonds.
The City of Schertz's general fund maintains a "AA" rating and its water and sewer fund maintains an
"A +" rating from Standard and Poor's.
Additional information on the City's long -term debt can be found in Note 8 on pages 40 through 43 of this
report.
Economic Factors and Next Year's Budgets and Rates
During the current fiscal year, unreserved fund balance in the general fund decreased to $1,508,497. The
City of Schertz has not appropriated any portion of this amount for spending in the 2010 fiscal year
budget. The intention is to build up the unreserved fund balance to 3 to 6 months of operating expenses.
Water and sewer rates are expected to remain stable. A portion of the debt service fund balance will be
used to offset the debt service ad valorem rate.
Requests for Information
This financial report is designed to provide a general overview of the City's finances for all those with an
interest in the government's finances. Questions concerning any of the information provided in this report
or requests for additional financial information should be addressed to the Office of the Finance Director,
City of Schertz, 1400 Schertz Parkway, Schertz, Texas 78154.
12
Governmental
Business -Type
Activities
Activities
Total
2009 2008
2009 2008
2009
2008
General Obligation Bonds
$ 38,485,000 $ 32,790,000
$ - $ -
$ 38,485,000 $
32,790,000
Certificates of Obligation
12,373,850 13,158,700
6,571,150 6,796,300
18,945,000
19,955,000
Revenue Bonds
- -
5,805,000 6,230,000
5,805,000
6,230,000
Other Debt
107,078
7,000 14,000
7,000
121,078
TOTALS $ 50.858.850 $ 46.055.778 $ 12.383.150 $ 13.040.300 $ 63.242.000 $ 59.096.078
Table A -4
The City's total debt increased by 7% during the current fiscal year.
The key factor in the increase is the City of Schertz issued general obligation bonds in the amount of
$9,500,000 for major capital projects and refunding of general obligation bonds.
The City of Schertz's general fund maintains a "AA" rating and its water and sewer fund maintains an
"A +" rating from Standard and Poor's.
Additional information on the City's long -term debt can be found in Note 8 on pages 40 through 43 of this
report.
Economic Factors and Next Year's Budgets and Rates
During the current fiscal year, unreserved fund balance in the general fund decreased to $1,508,497. The
City of Schertz has not appropriated any portion of this amount for spending in the 2010 fiscal year
budget. The intention is to build up the unreserved fund balance to 3 to 6 months of operating expenses.
Water and sewer rates are expected to remain stable. A portion of the debt service fund balance will be
used to offset the debt service ad valorem rate.
Requests for Information
This financial report is designed to provide a general overview of the City's finances for all those with an
interest in the government's finances. Questions concerning any of the information provided in this report
or requests for additional financial information should be addressed to the Office of the Finance Director,
City of Schertz, 1400 Schertz Parkway, Schertz, Texas 78154.
12
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BASIC FINANCIAL STATEMENTS
13
ASSETS
Current Assets:
Cash and Cash Equivalents
Investments
Receivables
Delinquent Taxes, Net of
Allowance for Uncollectible
Accounts
Accounts and Other
Due from Primary Government
Accrued Interest Income
Inventories
Internal Balances
Total Current Assets
Noncurrent Assets:
Restricted Assets:
Cash and Cash Equivalents
Investments
Deferred Charges
Capital Assets:
Land
Buildings and Improvements
Machinery, Equipment, and
Vehicles
Infrastructure
Construction in Progress
Accumulated Depreciation
Total Noncurrent Assets
TOTAL ASSETS
CITY OF SCHERTZ, TEXAS
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2009
Primary Government
Governmental Business -Type Component
Activities Activities Total Units
$ 911,419 $ 142,010 $ 1,053,429 $ 146,841
1,646,872 4,330,834 5,977,706 1,964,865
1,184,202
1,400,790
2,224,450
13,758
22,050
44,217
94,536
(3,097,488)
3,097,488
2,103,770
9,911,368
1,184,202
315,703
3,625,240
100
-
217,547
35,808
6,140
138,753
-
12,015,138
2,651,196
158,788
785,713
944,501 -
21,136,057
1,349,670
22,485,727 -
620,873
191,945
812,818 7,924
6,975,895
608,638
7,584,533 -
27,260,602
62,653,319
89,913,921 -
4,977,910
2,380,609
7,358,519 -
59,399,055
-
59,399,055 -
11,400,501
5,885,978
17,286,479 -
(17,257,006)
(15,570,182)
(32,827,188) -
114,672,675
58,285,690
172,958,365 7,924
$ 116,776,445 $ 68,197,058 $184,973,503 $ 2,659,120
See Accompanying notes to basic financial statements.
14
CITY OF SCHERTZ, TEXAS
STATEMENT OF NET ASSETS (CONTINUED)
SEPTEMBER 30, 2009
LIABILITIES
Current Liabilities Payable from
Unrestricted Assets:
Withdrawals in Excess of Deposits
Accounts Payable
Accrued Liabilities
Due to Component Unit
Due to Other Governments
Compensated Absences
Deferred Revenue
Accrued Interest Payable
Current Portion of Long -Term Debt
Total Current Liabilities Payable
From Unrestricted Assets
Current Liabilities Payable from
Restricted Assets:
Customer Deposits
Total Current Liabilities Payable
From Restricted Assets
Total Current Liabilities
Noncurrent Liabilities:
Long -Term Debt
Compensated Absences
Total Noncurrent Liabilities
TOTAL LIABILITIES
Net Assets:
Invested in Capital Assets,
Net of Related Debt
Restricted For:
Debt Service
Tree Mitigation
LEOSE
Technology
Court Security
Writing Next Chapter
Unrestricted
TOTAL NET ASSETS
TOTAL LIABILITIES &
NET ASSETS
Primary Government
Governmental Business -Type Component
Activities Activities Total Units
$ 1,393,975
$ 173,313
$ 1,567,288 $
-
1,708,077
1,164,471
2,872,548
36,093
585,827
222,420
808,247
14,132
217,547
-
217,547
-
244,662
-
244,662
-
116,095
38,258
154,353
4,736
3,000
-
3,000
-
374,050
75,200
449,250
6,449
1,766,313
771,977
2,538,290
125,000
6,409,546
2,445,639
8,855,185
186,410
21,190
331,718
352,908
-
11,832
21,190
331,718
352,908
-
- 95,275 -
6,430,736
2,777,357
9,208,093
186,410
60,512,845
49,368,483
11,586,122
60,954,605
840,000
464,381
153,034
617,415
-
49,832,864
11,739,156
61,572,020
840,000
56,263,600
14,516,513
70,780,113
1,026,410
57,324,482 50,047,301 107,371,783 -
504,073
- 504,073 -
191,834
- 191,834 -
11,832
- 11,832 -
236,842
- 236,842 -
95,275
- 95,275 -
130,930
- 130,930 -
2,017,577
3,633,244 5,650,821 1,632,710
60,512,845
53,680,545 114,193,390 1,632,710
$ 116,776,445 $ 68,197,058 $ 184,973,503 $ 2,659,120
See Accompanying notes to basic financial statements.
15
CITY OF SCHERTZ, TEXAS
STATEMENT OF ACTIVITIES
SEPTEMBER 30, 2009
Functions and Programs Expenses
Primary Government:
Governmental Activities:
General Government
Public Safety
Streets and Parks
Health
Culture and Recreation
Interest and Other Fees
Total Governmental Activities
Business -Type Activities
Water and Sewer
EMS
Total Business -Type Activities
Total Primary Government
Component Unit:
Program Revenues
Operating Capital
Charges for Grants and Grants and
Services Contributions Contributions
$ 7,695,768 $ 2,045,321 $ - $ 6,184,328
7,697,131 2,026,108 - -
3,815,342 213,758 35,749 -
360,604 28,875 - -
800,305 207,643 7,988 -
1,780,791 - 753,922 -
22,149,941 4,521,705 797,659 6,184,328
13,568,065 14,668,137 - 2,241,726
3,365,544 2,889,518 - -
16,933,609 17,557,655 - 2,241,726
$ 39,083,550 $ 22,079,360 $ 797,659 $ 8,426,054
$ 6,209,143 $ 77,067 $ 57,296 $ 603,011
General Revenues:
Taxes:
Ad Valorem
Sales
Franchise Fees
Hotel/Motel
Mixed Drink
Bingo
Unrestricted Investment Earnings
Gain (Loss) on Disposal of Capital Assets
Miscellaneous
Total General Revenues
Transfers
Change in Net Assets
Net Assets at Beginning of Year
Net Assets at End of Year
See Accompanying notes to basic financial statements.
16
Net (Expense) Revenue and
-
8,980,102
Changes in Net Assets
4,011,855
-
Primary Government
2,005,927
1,462,199
-
Governmental
Business -Type
Component
Activities
Activities
Total Units
31,790
-
31,790
$ 533,881
$ - $
533,881 $ -
(5,671,023)
-
(5,671,023) -
(3,565,835)
-
(3,565,835) -
(331,729)
-
(331,729) -
(584,674)
-
(584,674) -
(1,026,869)
-
(1,026,869) -
(10,646,249)
-
(10,646,249) -
1,060,607
(1,060,607)
-
-
3,341,798
3,341,798 -
-
(476,026)
(476,026) -
-
2,865,772
2,865,772 -
$ 60,512,845
$ 53,680,545
$ 114,193,390
(10,646,249)
2,865,772
(7,780,477) -
8,980,102
-
8,980,102
-
4,011,855
-
4,011,855
2,005,927
1,462,199
-
1,462,199
-
305,073
-
305,073
-
31,790
-
31,790
-
5,105
-
5,105
-
339,403
128,233
467,636
25,245
17,714
(94,978)
(77,264)
-
587,789
205,494
793,283
15,749
15,741,030
238,749
15,979,779
2,046,921
1,060,607
(1,060,607)
-
-
6,155,388
2,043,914
8,199,302
(3,424,848)
54,357,457
51,636,631
105,994,088
5,057,558
$ 60,512,845
$ 53,680,545
$ 114,193,390
$ 1,632,710
17
CITY OF SCHERTZ, TEXAS
BALANCE SHEET — GOVERNMENTAL FUNDS
SEPTEMBER 30, 2009
ASSETS
Cash and Cash Equivalents
Investments
Receivables
Taxes, Net
Accounts and Other
Due from Other Funds
Due from Component Unit
Accrued Interest
Inventory
Restricted Assets:
Cash and Cash Equivalents
Investments
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
Liabilities:
Withdrawals in Excess of Deposits
Accounts Payable
Accrued Salaries and Benefits
Customer Deposits
Due to Other Governments
Due to Other Funds
Due to Component Unit
Deferred Revenues
Accrued Interest Payable
Total Liabilities
Fund Balances:
Reserved for:
Inventory
Debt Service
Tree Mitigation
LEOSE
Technology
Court Security
Writing Next Chapter
Unreserved
Designated for Capital Improvement
Unreserved, Reported in
General Fund
Special Revenue Funds
Total Fund Balances
TOTAL LIABILITIES
AND FUND BALANCES
See Accompanying notes to basic financial statements.
General
Capital
Debt
Fund
Projects
Service
$ 846,717
$ -
$ -
1,568,165
-
-
1,099,118
-
59,704
1,400,790
-
-
2,742
32,450
35,054
-
-
9,195
5,569
8,189
-
44,217
-
-
-
-
35,107
-
20,180,932
407,622
S 4.967.318
S 20221.571
S 546.682
$ -
$ 1,359,042 $ -
534,737
1,134,950 -
585,827
- -
21,190
- -
244,662
- -
32,450
3,135,284 -
-
246,742 -
1,520,859
3,000 59,704
-
- 42,609
2,939,725
5,879,018 102,313
44,217 - -
- - 444,369
11,832 - -
236,842 - -
95,275 - -
130,930 - -
- 14,342,553 -
1,508,497 - -
S 4.967.318 S 20221.571 S 546.682
18
Other
Nonmajor
Total
Governmental
Governmental
Funds
Funds
$ 64,702
$ 911,419
78,707
1,646,872
25,380 1,184,202
- 1,400,790
- 70,246
20,000 29,195
- 13,758
- 44,217
123,681 158,788
547,503 21,136,057
$ 859.973 $ 26.595.544
$ 34,933 $ 1,393,975
38,390 1,708,077
- 585,827
- 21,190
- 244,662
- 3,167,734
- 246,742
- 1,583,563
- 42,609
73,323 8,994,379
- 44,217
- 444,369
191,834 191,834
- 11,832
- 236,842
- 95,275
- 130,930
- 14,342,553
- 1,508,497
594,816 594,816
786,650 17,601,165
$ 859.973 $ 26.595.544
19
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CITY OF SCHERTZ, TEXAS
RECONCILIATION OF BALANCE SHEET
SEPTEMBER 30, 2009
TOTAL FUND BALANCE - TOTAL GOVERNMENTAL FUNDS
Amounts reported for governmental activities in the Statement of Net Assets
are different because:
Capital Assets used in governmental activities are not financial resources
and, therefore, are not reported in the funds.
Other long -term assets are not available to pay for current -period expenditures
and, therefore, are deferred in the funds.
Deferred charges, consisting of debt issue costs, are amortized over the life
of the bond in the governmental activities, but were recognized in full in
the governmental funds:
Long -term liabilities, including bonds payable and capital leases, are not due and
payable in the current period and therefore, not reported in the funds:
Bonds Payable (50,858,850)
Issuance Premium (to be Amortized as Interest Expense) (288,456)
Issuance Discount (to be Amortized as Interest Expense) 12,510
$ 17,601,165
92,756,957
1,580,563
620,873
Accrued Interest Payable (331,441)
Compensated Absences (580,476) (52,046,713)
TOTAL NET ASSETS OF GOVERNMENTAL ACTIVITIES
See accompanying notes to basic financial statements.
20
$ 60,512,845
CITY OF SCHERTZ, TEXAS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES —
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2009
REVENUES
Taxes
Permits and Fees
Service Fees
Fines and Fees
Sale of Property Forfeitures
Intergovernmental
Investment Earnings
Miscellaneous
TOTAL REVENUES
EXPENDITURES
Current:
General Government
Public Safety
Streets and Parks
Health
Culture and Recreation
Debt Service:
Principal
Interest and Fiscal Charges
Bond Issue Costs
Capital Outlay
TOTAL EXPENDITURES
Excess (Deficiency) of Revenues
Over (Under) Expenditures
OTHER FINANCING SOURCES (USES)
Issuance of Debt
Transfers In
Transfers (Out)
TOTAL OTHER FINANCING
SOURCES (USES)
Net Change in Fund Balance
Fund Balances at Beginning of Year
Prior Period Adjustment
Fund Balances at End of Year
General
Fund
$ 11,200,940
800,381
1,891,856
1,517,821
13,000
137,050
580,904
16,141,952
Capital
Proiects
255,155
182,087
Debt
Service
Fund
$ 3,274,650
485,767
11,337
437,242 3,771,754
6,123,741 4,778 -
7,235,501 - -
1,655,204 - -
348,448 - -
786,860 - -
2,436,546
18,586,300
181,678
12,338,876
12,525,332
4,696,928
1,950,358
9,388
6,656,674
(2,444,348) (12,088,090) (2,884,920)
567,951
(1,150,035)
6,781,678 2,900,000
2,200,642 -
(582,084) 8,982,320 2,900,000
(3,026,432)
6,085,908
(1,031,883)
$ 2,027,593
See accompanying notes to basic financial statements.
21
(3,105,770)
16,416,440
1,031,883
$ 14,342,553
15,080
429,289
$ 444,369
Other
Nonmaj or
Governmental
Funds
$ 305,073
21,724
12,847
104,741
43,737
8,929
55
497,106
319,616
188,528
508,144
Total
Governmental
Funds
$ 14,780,663
822,105
1,904,703
1,517,821
104,741
797,659
339,403
580,959
20,848,054
6,448,135
7,235,501
1,655,204
348,448
786,860
4,696,928
1,950,358
191,066
14,963,950
38,276,450
(11,038) (17,428,396)
10,000
(567,951)
(557,951)
(568,989)
1,355,639
9,681,678
2,778,593
(1,717,986)
10,742,285
(6,686,111)
24,287,276
$ 786,650 $ 17,601,165
22
iv
s
n
CITY
m
CITY OF SCHERTZ, TEXAS
RECONCILIATION OF THE STATEMENT OF REVENUES,
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2009
NET CHANGE IN FUND BALANCES - GOVERNMENTAL FUNDS $ (6,686,111)
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 by which capital outlays exceeded
depreciation in the current period.
Current Year Additions 33,274,868
Additions Previously Reported
as Construction in Progress (12,738,959)
Current Period Depreciation (3,033,324)
17,502,585
The net effect of various miscellaneous transactions involving capital assets (i.e., sales,
trade -ins, and donations) is to decrease net assets. (225,289)
Revenues in the Statement of Activities that do not provide current financial resources
are not reported as revenues in the funds. 212,338
The issuance of long -term debt (e.g. bonds, leases) provides current financial resources
to governmental funds, which the repayment of the principal of long -term debt consumes
the current financial reources of governmental funds. Neither transaction, however, has
any affect on net assets. This amount is the net effect of these differences in the
treatment of long -term debt and related items.
Issuance of Bonds (9,500,000)
Principal Repayments 4,696,928
Deferred Charge on
Issuance Cost 191,066
Amortization of Premium /Discount (21,262)
Premium/Discount on Issuance (181,679) (4,814,947)
Some expenses reported in the Statement of Activities do not require the use of
current financial resources and, therefore, are not reported as expenditures in
governmental funds:
Compensated Absences (24,018)
Accrued Interest 190,830 166,812
CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES $ 6,155,388
See accompanying notes to basic financial statements.
23
CITY OF SCHERTZ, TEXAS
STATEMENT OF NET ASSETS - PROPRIETARY FUNDS
SEPTEMBER 30, 2009
ASSETS
Current Assets:
Cash and Cash Equivalents
Investments
Accounts Receivable, Net of Allowance:
Customer Accounts
Due from Other Funds
Accrued Interest
Inventory
Total Current Assets
Noncurrent Assets:
Restricted Assets:
Cash and Cash Equivalents
Investments
Deferred Charges
Capital Assets:
Land
Buildings and Improvements
Machinery, Equipment, and Vehicles
Construction in Progress
Less: Accumulated Depreciation
Total Noncurrent Assets
TOTAL ASSETS
See accompanying notes to basic financial statements.
Business -Type Activities - Enterprise Funds
Water
and Sewer Schertz
System EMS Total
$ 142,010
$ - $
142,010
4,229,374
101,460
4,330,834
1,399,607
824,843
2,224,450
3,062,748
60,976
3,123,724
22,050
-
22,050
35,948
58,588
94,536
8,891,737
1,045,867
9,937,604
785,713
-
785,713
1,349,670
-
1,349,670
185,970
5,975
191,945
608,638
-
608,638
62,646,819
6,500
62,653,319
1,203,080
1,177,529
2,380,609
5,885,978
-
5,885,978
(14,969,437)
(600,745)
(15,570,182)
57,696,431
589,259
58,285,690
$ 66,588,168
$ 1,635,126
$ 68,223,294
24
CITY OF SCHERTZ, TEXAS
STATEMENT OF NET ASSETS - PROPRIETARY FUNDS (CONTINUED)
SEPTEMBER 30, 2009
LIABILITIES
Current Liabilities:
Withdrawals in Excess of Deposits
Accounts Payable
Accrued Liabilities
Customer Deposits
Accrued Interest Payable
Due to Other Funds
Compensated Absences
Revenue Bonds Payable - Current
Certificates of Obligation - Current
Public Facility Loan - Current
Total Current Liabilities
Noncurrent Liabilities:
Compensated Absences
Revenue Bonds Payable (Net of
Unamortized Discounts)
Certificates of Obligation
Total Noncurrent Liabilities
TOTAL LIABILITIES
Net Assets:
Investment in Capital Assets
Unrestricted
Total Net Assets
TOTAL LIABILITIES & NET ASSETS
Business -Type Activities - Enterprise Funds
Water
and Sewer Schertz
System EMS Total
$ -
$ 173,313
$ 173,313
1,152,054
12,417
1,164,471
97,043
125,377
222,420
331,718
-
331,718
72,025
3,175
75,200
24,940
1,296
26,236
21,733
16,526
38,258
343,177
-
343,177
270,400
151,400
421,800
7,000
-
7,000
2,320,090
483,504
2,803,593
86,930
66,103
153,034
5,436,772
-
5,436,772
5,827,900
321,450
6,149,350
11,351,602
387,553
11,739,156
13,671,692
871,057
14,542,749
49,936,867
110,434
50,047,301
2,979,609
653,635
3,633,244
52,916,476
764,069
53,680,545
$ 66.588.168
See accompanying notes to basic financial statements.
25
$ 1.635.126 $ 68,223,294
CITY OF SCHERTZ, TEXAS
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2009
OPERATING REVENUES
Fees Charged to Users
Other Charges
TOTAL OPERATING REVENUES
OPERATING EXPENSES
Personnel Services
Sewage Treatment
General and Administrative
Contractual Services
Supplies and Maintenance
Depreciation
TOTAL OPERATING EXPENSES
OPERATING INCOME (LOSS)
NONOPERATING REVENUES (EXPENSES)
Investment Earnings
Lease Income
Gain (Loss) on Disposal of Capital Assets
Miscellaneous
Interest Expense
Contributions to Joint Venture
Amortization of Bond Issue Costs
TOTAL NONOPERATING
REVENUES (EXPENSES)
INCOME BEFORE CONTRIBUTIONS
AND TRANSFERS
Transfers Out
Capital Contributions
CHANGE IN NET ASSETS
NET ASSETS AT BEGINNING OF YEAR
NET ASSETS AT END OF YEAR
See accompanying notes to basic financial statements.
Business -Type Activities - Enterprise Funds
Water
and Sewer Schertz
System EMS Total
$ 14,491,009
$ 2,889,518
$ 17,380,527
42,381
-
42,381
14,533,390
2,889,518
17,422,908
1,866,505
2,390,492
4,256,997
4,396,525
-
4,396,525
3,298,501
199,014
3,497,515
182,969
198,970
381,939
229,440
416,163
645,603
1,458,152
136,410
1,594,562
11,432,092
3,341,049
14,773,141
3,101,298
(451,531)
2,649,767
126,352
1,881
128,233
134,747
-
134,747
(94,978)
-
(94,978)
3,586
201,908
205,494
(530,714)
(24,143)
(554,857)
(1,590,042)
-
(1,590,042)
(15,217)
(352)
(15,569)
(1,966,266)
179,294
(1,786,972)
1,135,032
(272,237)
862,795
(331,986)
(728,621)
(1,060,607)
2,241,726
-
2,241,726
3,044,772
(1,000,858)
2,043,914
49,871,704
1,764,927
51,636,631
Le
$ 52,916,476 $ 764,069 $ 53,680,545
CITY OF SCHERTZ, TEXAS
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2009
Cash Flows From Operating Activities:
Cash Received From Customers and Users
Other Cash Received From Nonoperating Activity
Cash Paid to Employees for Services
Cash Paid to Supplier for Goods & Services
Net Cash Provided (Used) by
Operating Activities
Cash Flows From Noncapital Financing Activities:
Cash Advances From /(To) Other Funds
Contributions to Joint Venture
Cash Advances From Component Unit
Net Cash Provided (Used) by
Noncapital Financing Activities
Cash Flows From Capital and Related
Financing Activities:
Acquisition and Construction of Capital Assets
Payments Toward Projects in Progress
Interest Payments paid on Long -Term Debt
Principal paid on Long -Term Debt
Net Cash Provided (Used) by Capital and
Related Financing Activities
Cash Flows From Investing Activities:
Proceeds from Sale/Maturity of Investments
Payments from Capital Lease
Payments from Lease
Interest and Investment Earnings
Net Cash Provided (Used) by Investing Activities
Net Increase (Decrease) in Cash
and Cash Equivalents
See accompanying notes to basic financial statements.
27
Business -Type Activities - Enterprise Funds
Water
and Sewer Schertz
System EMS Total
$ 14,582,631 $ 3,040,829 $ 17,623,460
3,586 201,908 205,494
(1,826,866) (2,337,682) (4,164,548)
(8,295,988) (659,998) (8,955,986)
4,463,363 245,057 4,708,420
987,248
(1,590,042)
35,153
(100,816)
886,432
(1,590,042)
35,153
(567,641) (100,816) (668,457)
(90,104)
(55,865) (145,969)
(5,140,464)
- (5,140,464)
(534,634)
(25,112) (559,746)
(692,400)
(144,750) (837,150)
(6,457,602) (225,727) (6,683,329)
2,509,055
59,305
134,747
104,302
2,807,409
798
798
2,509,055
59,305
134,747
105,100
2,808,207
$ 245,529 $ (80,688) $ 164,841
CITY OF SCHERTZ, TEXAS
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2009
Cash and Cash Equivalents at Beginning of Year:
Cash and Cash Equivalents
Restricted Cash and Cash Equivalents
Cash and Cash Equivalents at End of Year:
Cash and Cash Equivalents
Restricted Cash and Cash Equivalents
Reconciliation of Operating Income
to Net Cash Provided (Used) by
Operating Activities:
Operating Income
Adjustments to Reconcile Operating
Income to Net Cash Provided (Used)
by Operating Activities:
Depreciation
Miscellaneous Income from Nonoperating Activity
Changes in Assets and Liabilities:
Decrease (Increase) in Assets:
Customer Receivable
Inventory
Increase (Decrease) in Liabilities:
Withdrawals in Excess of Deposits
Accounts Payable
Accrued Liabilities
Customer Deposits
Compensated Absences
NET CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES
Transactions Not Affecting Cash and
Cash Equivalents:
Contributions - Capital Assets
Net Book Value of Transferred Assets
See accompanying notes to basic financial statements.
28
Business -Type Activities - Enterprise Funds
Water
and Sewer Schertz
System EMS Total
$ 476,807 $ 80,688 $ 557,495
205,387 - 205,387
682,194 80,688 762,882
142,010 - 142,010
785,713 - 785,713
$ 927,723 $ - $ 927,723
3,101,298 (451,531) 2,649,767
1,45 8,152
136,410
1,594,562
3,586
201,908
205,494
35,426
151,311
186,737
12,517
4,408
16,925
-
173,313
173,313
(201,070)
(23,572)
(224,642)
26,083
35,338
61,421
13,815
-
13,815
13,556
17,472
31,028
$ 4,463,363
$ 245,057
$ 4,708,420
$ 2,241,726 $
$ 41,814 $
$ 2,241,726
$ 41,814
NOTES TO BASIC FINANCIAL STATEMENTS
29
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2009
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The City of Schertz is a municipal corporation governed by an elected mayor and five- member council. The
accompanying financial statements present the City and its discretely presented component units, entities for
which the City is considered to be financially accountable. The discretely presented component units are
reported in a separate column in the government -wide financial statements to emphasize that they are legally
separate from the City.
Discretely presented component units - The component units' column in the government -wide financial
statements includes the financial data of the component units of the City of Schertz, Texas. The component
units are presented as governmental fund types. Following is a summary of the component units:
1. Schertz Economic Development Corporation - The Corporation was organized for the purpose of
promoting economic development in order to eliminate unemployment and underemployment and to
promote and encourage employment and public welfare of, for, and on behalf of the City. The board of
directors consists of seven (7) members appointed by the city council. The City is financially
accountable for the Corporation because the city council approves the corporation's budget.
2. Library Advisory Board - The library provides services to the citizens of the City of Schertz as well as
surrounding communities. The function of the library board is to work cooperatively with City
management to provide funding and oversight for special projects of the library. All projects must be
approved by the city council. The library's governing board is appointed by the city council.
3. Parks and Recreation Foundation — The Corporation was organized to improve and expand the
community parks, trails, venues, and recreational programs providing adventure and opportunities for all.
Complete financial statements for the Schertz Economic Development Corporation may be obtained at City
Hall located at 1400 Schertz Parkway, Schertz, Texas 78154. Separate financials are not issued for the
Library.
B. Government -Wide and Fund Financial Statements
The government -wide financial statements (i.e., the statement of net assets and the statement of activities)
report information on all of the activities of the primary government and its component units. 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 revenues, 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 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 is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific
function or segment. Program revenues include 1) charges of 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 revenues are reported instead as
general revenues.
30
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2009
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
B. Government -Wide and Fund Financial Statements (Continued)
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.
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
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 revenues 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 thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be
available if they are 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 and sales taxes, utility franchises, and interest associated with the current fiscal period are all
considered to be susceptible to accrual and so have been recognized as revenues 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 which accounts for all financial
resources of the general government, except those required to be accounted for in another
fund.
The Debt Service Fund accounts for the resources accumulated and payments made for
principal and interest on long -term general obligation debt of governmental funds.
The Capital Proiects Fund accounts for financial resources to be used for the acquisition
and construction of major capital facilities and is principally financed by the sale of bonds or
certificates of obligation and grants.
31
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2009
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)
The government reports the following major proprietary funds:
The Water and Sewer System Fund accounts for the water and sewer services provided to
the citizens through user charges.
The EMS Fund accounts for the emergency medical services provided to the citizens of the
City and other participating governments through user charges.
Private - sector standards of accounting and financial reporting issued prior to December 1, 1989, generally
are followed in both the government -wide and proprietary 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 are charges between the City's general government function and various other
functions of the City. Eliminations of these charges would distort the direct costs and program revenues
reported for the various functions concerned.
Amounts reported as program revenues include 1) charges to customers or applications for goods, services,
or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions. General
revenues include all taxes and investment earnings.
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 fund and the EMS enterprise fund are charges to customers for sales and services.
Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and
depreciation on capital assets. All revenues and expenses not meeting this definition are reported as
nonoperating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted
resources first, then unrestricted resources as they are needed.
D. Cash and Cash Equivalents
The City's cash and cash equivalents are considered to be cash on hand and demand deposits.
32
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2009
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
E. Investments
The City is authorized to invest in (1) obligations of the United States or its agencies and
instrumentalities; (2) direct obligations of the State of Texas or its agencies; (3) other obligations, the
principal of and interest on which are unconditionally guaranteed or insured by the State of Texas of the
United States; (4) obligations of states, agencies, counties, cities, and other political subdivisions of any
state having been rated of not less than "AA" or its equivalent; (5) certificates of deposit issued by state
and national banks domiciled in Texas that are guaranteed or insured by the Federal Deposit Insurance
Corporation (FDIC) or its successor, or secured by obligations mentioned above; and (6) fully
collateralized direct repurchase agreements having a defined termination date. In addition, the City is
authorized to invest in local government investment pools. The investment pools operate in accordance
with appropriate state laws and regulations and have regulatory oversight from the Texas Public Funds
Investment Act Sec. 2256.0016. The fair value of the City's position in each pool is the same as the fair
value of the pool shares.
F. Receivables and Pavables
Activities between the funds that are representative of interfund loans outstanding at the end of the fiscal
year are referred to 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 ".
Accounts receivable are reported net of allowances for uncollectible accounts. The allowance account
represents management's estimate of uncollectible accounts based upon experience and historical trends.
Property taxes for the City are levied each October 1 on the taxable value as of the preceding January 1,
the date a lien attaches, for all taxable real and personal property located in the City. Taxes are due by
January 31 following the October 1 assessment date and become delinquent on February 1, at which time
they begin accruing penalty and interest. The enforceable legal claim date for property taxes is the
assessment date; therefore, the City did not record a receivable for accrual of future taxes at year end.
Accordingly, no current taxes receivable are reported. Delinquent taxes have been reported in the
financial statements net of the allowance for uncollectible taxes. Tax revenues are recognized as they
become available. Accordingly, an amount equal to taxes not yet available has been reported as deferred
revenue at the government fund level.
G. Inventories
All inventories are valued at cost using the first -in /first -out (FIFO) method. Inventories of governmental
funds are recorded as expenditures when consumed rather than when purchased.
H. 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 they are maintained in
separate bank accounts and their use is limited by applicable bond covenants.
33
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2009
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
L Capital Assets
Capital assets, which include land, buildings and improvements, machinery, equipment, vehicles, and
infrastructure assets (i.e., roads, bridges, sidewalks, and similar items), are reported in the applicable
governmental or business -type activities columns in the government -wide financial statements. Capital
assets are defined by the City as assets with an initial, individual cost of more than $5,000 and an
estimated useful life in excess of one year. When capital assets are purchased, they are capitalized and
depreciated in the government -wide financial statements and the proprietary fund statements. Capital
assets are recorded as expenditures of the current period in the governmental fund financial statements.
Capital assets are valued at cost where historical records are available and at an estimated cost where no
records exist. Donated capital assets are valued at their 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
asset lives are not capitalized.
Improvements to capital assets that materially extend the life of the asset or add to the value are
capitalized. Major outlays for capital assets and improvements are capitalized as projects are
constructed. Interest incurred during construction will not be capitalized in the governmental activities on
the government -wide financial statements; however capitalization of interest is required for business-
type activities. There was no capitalized interest during the current fiscal year.
Capital assets are depreciated over their useful lives on a straight -line basis as follows:
Assets
Buildings and Improvements
Machinery, Equipment, and Vehicles
Infrastructure
J. Compensated Absences
Useful Lives
(Years)
10 -50
2 -20
15 -30
It is the City's policy to permit employees to accumulate earned but unused vacation and compensatory
time benefits. There is no liability for unpaid accumulated sick leave since the City does not have a
policy to pay any amounts when employees separate from service with the City. All vacation and
compensatory time 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.
34
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2009
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
K. 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, losses on defeasance, as well as issuance costs, are deferred and amortized over the life of the
bonds using the effective interest method. Bonds payable are reported net of the applicable bond
premium or discount and losses on defeasance. 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.
L. Fund Equity
In the fund financial statements, governmental funds report reservations of fund balance for amounts that
are not available for appropriation or are legally restricted by outside parties for use for a specific
purpose. Designations of fund balance represent tentative management plans that are subject to change.
M. Net Assets
Net assets represent the difference between assets and liabilities. Net assets invested in capital assets, net
of related debt consist of capital assets, net of accumulated depreciation, reduced by the outstanding
balances of any borrowing used for the acquisition, construction or improvements of those assets, and
adding back unspent proceeds. Net assets are reported as restricted when there are limitations imposed
by creditors, grantors, or laws or regulations of other governments.
N. 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.
L. Budgetary Information
Annual budgets are adopted on a basis consistent with generally accepted accounting principles for all
governmental funds except the library grant special revenue fund, police department forfeiture special
revenue fund and the capital projects fund, which adopts project - length budgets.
35
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2009
NOTE 2 - CASH, CASH EQUIVALENTS, AND INVESTMENTS
As of September 30, 2009, the City had the following pooled investment funds:
Investment Type
LOGIC
Lone Star Investment Pool
MBIA Municipal Investors
Federated Money Market
Schertz Bank & Trust -
Certificate of Deposit
Chase
Capital One -
U.S. Agency Securities
Total
Book Value
Primary
Component
Government
Unit
$ 14,970,189
$ -
4,061,676
-
344,071
390,388
4,272,419
30,563
3,517,894 1,500,000
- 43,914
1,297,184 -
$ 28,463,433 $ 1,964,865
Fair Value
Weighted
Primary
Component
Average
Government
Unit
Maturity
$ 14,970,189
$ -
1.000
4,061,676
-
1.000
344,071
390,388
1.000
4,272,419
30,563
1.000
3,517, 894
1,500,000
1.000
-
43,914
0.250
1,297,184
-
2.762
$ 28,463,433
$ 1964,865
8.012
Interest Rate Risk. As a means of limiting its exposure to fair value losses arising from rising interest rates,
the City's investment policy limits the City's investment portfolio to highly liquid investments to meet
unanticipated cash requirements, and /or to redeploy cash into other investments expected to outperform
current holdings.
Credit Risk. State law limits investments in certificates of deposit to guaranteed or insured by the Federal
Deposit Insurance Corporation, or its successor or the National Credit Union Share Insurance Fund, or its
successor and investment pools continuously rated no lower than AAA or an equivalent rating by at least one
nationally recognized rating service. The City's investment policy does not further limit its investment
choices. As of September 30, 2009, the City's investments in the pooled investment funds were rated AAA
by Standard & Poor's. The City has invested in Federal Home Loan Mortgage Corporation and Federal
National Mortgage Association.
Custodial Credit Risk - Deposits. In the case of deposits, this is the risk that in the event of a bank failure,
the government's deposits may not be returned to it. As of September 30, 2009, the City's petty cash on
hand was $1,775. The carrying amount of cash and cash equivalents (including withdrawals in excess of
deposits and certificates of deposit) were $3,948,536 and the bank balance was $1,747,755. Of the bank
balance, $250,000 was covered by federal deposit insurance at each Chase Bank and Schertz Bank and Trust
and the City's depository had pledged securities having a face value of $6,903,977 and a market value of
$6,158,837 as collateral forthe City's deposits. Funds were fully insured and collateralized. All collateral is
held in the City's name.
As of September 30, 2009, the Economic Development Corporation (Component Unit) held funds of $99,246
in the pooled cash of the primary government.
Custodial Credit Risk - Investments. For an investment, this is the risk that, in the event of the failure of the
counterparty, the government will not be able to recover the value of its investment or collateral securities
that are in the possession of an outside party. All of the government securities owned by the City are held by
its agent in the City's name.
M
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2009
NOTE 3 - RECEIVABLES
Receivables as of year -end for the government's individual major funds and nonmajor funds and enterprise
fund in the aggregate, including the applicable allowances for uncollectible accounts, are as follows:
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 and unearned revenue reported in the
governmental funds were as follows:
Unavailable
General Fund
Delinquent Property Taxes Receivable $ 122,855
Court Fines 1,398,004
Total General Fund 1,520,859
Capital Projects Fund
Unearned Revenue 3,000
Total Capital Projects Fund 3,000
Debt Service Fund
Delinquent Property Taxes Receivable 59,704
Total Debt Service Fund 59,704
Total Governmental Funds S 1.583.563
NOTE 4 - PROPERTY TAX
Taxes are levied on and payable as of October 1. The City has contracted with the Guadalupe County Tax
Assessor - Collector to collect taxes on its behalf. Current taxes become delinquent February 1. Current year
delinquent taxes not paid by July 1 are turned over to attorneys for collection action. The total taxable value
as of October 1, 2008, upon which the fiscal 2009 levy was based, was $1,891,409,716 (i.e., market value
less exemptions). The estimated market value was $2,026,485,784, making the taxable value 93.33% of the
estimated market value.
37
Governmental Funds
Proprietary
Funds
Other
Water and
Schertz
General
Funds
Sewer Fund
EMS
Total
Receivables:
Property Taxes
$ 130,697
$ 63,515
$ -
$ -
$ 194,212
Sales Taxes
631,406
-
-
-
631,406
Occupancy Taxes
-
25,380
-
-
25,380
Franchise Taxes
344,857
-
-
-
344,857
Customer Accounts
2,785
-
1,446,716
1,618,485
3,067,986
Court Fines
3,434,902
-
-
-
3,434,902
Gross Receivables
4,544,647
88,895
1,446,716
1,618,485
7,698,743
Less: Allowance for
Uncollectibles
2,044,739
3,811
47,109
793,642
2,889,301
Net Total Receivables
$ 2,499,908
$ 85,084
$ 1,399,607
$ 824,843
$ 4,809,442
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 and unearned revenue reported in the
governmental funds were as follows:
Unavailable
General Fund
Delinquent Property Taxes Receivable $ 122,855
Court Fines 1,398,004
Total General Fund 1,520,859
Capital Projects Fund
Unearned Revenue 3,000
Total Capital Projects Fund 3,000
Debt Service Fund
Delinquent Property Taxes Receivable 59,704
Total Debt Service Fund 59,704
Total Governmental Funds S 1.583.563
NOTE 4 - PROPERTY TAX
Taxes are levied on and payable as of October 1. The City has contracted with the Guadalupe County Tax
Assessor - Collector to collect taxes on its behalf. Current taxes become delinquent February 1. Current year
delinquent taxes not paid by July 1 are turned over to attorneys for collection action. The total taxable value
as of October 1, 2008, upon which the fiscal 2009 levy was based, was $1,891,409,716 (i.e., market value
less exemptions). The estimated market value was $2,026,485,784, making the taxable value 93.33% of the
estimated market value.
37
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2009
NOTE 4 - PROPERTY TAX (Continued)
The City is permitted by the Constitution of the State of Texas to levy taxes up to $2.50 per $100 of taxable
assessed valuation for all governmental purposes. Pursuant to a decision of the Attorney General of the State
of Texas, up to $1.50 per $100 of assessed valuation may be used for the payment of long -term debt. The
combined tax rate to finance general governmental services, including the payment of principal and interest
on long -term debt for the year ended September 30, 2009, was $0.409 per $100 of assessed value, which
means that the City has a tax margin of $2.091 for each $100 value and could increase its annual tax levy by
approximately $39,549,377 based upon the present assessed valuation of $1,891,409,716 before the limit is
reached. However, the City may not adopt a tax rate that exceeds the tax rate calculated in accordance with
the Texas Property Tax Code without holding a public hearing. The Property Tax Code subjects an increase
in the effective tax rate to a referendum election, if petitioned by registered voters, when the effective tax rate
increase is more than eight percent (8 %) of the previous year's effective tax rate.
Property taxes are recorded as receivables and deferred revenues at the time the taxes are assessed. In
governmental funds, revenues are recognized as the related ad valorem taxes are collected. Additional
amounts estimated to be collectible in the time to be a resource for payment of obligations incurred during
the fiscal year and therefore susceptible to accrual in accordance with generally accepted accounting
principles have been recognized as revenue. In the government -wide financial statements, the entire levy is
recognized as revenue, net of estimated uncollectible amounts (if any), at the levy date.
NOTE 5 - CAPITAL ASSETS
Capital asset activity for the year ended September 30, 2009 was as follows:
Beginning Transfers/ Ending
Balance Increases Deletions Balance
Governmental Activities:
Capital Assets, Not Being Depreciated
Land
$ 6,363,542
$ 908,164
$ (295,811)
$ 6,975,895
Construction in Progress
10,945,388
13,194,072
(12,738,959)
11,400,501
Total Capital Assets Not Being Depreciated
17,308,930
14,102,236
(13,034,770)
18,376,396
Capital Assets, Being Depreciated:
Buildings and Improvements
17,888,868
9,402,265
(30,531)
27,260,602
Machinery, Equipment, and Vehicles
4,215,119
640,458
122,333
4,977,910
Streets and Infrastructure
50,269,146
9,129,909
-
59,399,055
Total Capital Assets Being Depreciated
72,373,133
19,172,632
91,802
91,637,567
Accumulated Depreciation
Buildings and Improvements
(3,287,774)
Machinery, Equipment, and Vehicles
(1,959,837)
Streets and Infrastructure
(8,954,791)
Total Accumulated Depreciation
(14,202,402)
Total Capital Assets Being Depreciated, Net 58,170,731
Governmental Activities Capital Assets, Net $ 75.479.661
38
(681,429)
18,936 (3,950,267)
(524,755)
(40,216) (2,524,808)
(1,827,140)
- (10,781,931)
(3,033,324)
(21,280) (17,257,006)
16,139,308
$ 30241.544
70,522
$(12.9642481
74,380,561
$ 92.756.957
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2009
NOTE 5 - CAPITAL ASSETS (Continued)
Business -Type Activities:
Capital Assets, Not Being Depreciated:
Land
Construction in Progress
Total Assets Not Being Depreciated
Capital Assets, Being Depreciated:
Buildings and Improvements
Machinery, Equipment, and Vehicles
Total Capital Assets Being Depreciated
Accumulated Depreciation:
Buildings and Improvements
Machinery, Equipment, and Vehicles
Total Accumulated Depreciation
Total Capital Assets Being Depreciated, Net
Business -Type Activities Capital Assets, Net
Discretely Presented Component Unit Table:
Beginning Transfers/ Ending
Balance Increases Deletions Balance
$ 557,972 $ 63,419 $ (12,753) $ 608,638
9,748,051 5,140,464 (9,002,537) 5,885,978
10,306,023 5,203,883 (9,015,290) 6,494,616
51,522,115 11,035,310 95,894 62,653,319
1,931,098 144,843 304,668 2,380,609
53,453,213 11,180,153 400,562 65,033,928
(12,951,367) (1,389,315) 107,648 (14,233,034)
(751,127) (205,247) (380,774) (1,337,148)
(13,702,494) (1,594,562) (273,126) (15,570,182)
39,750,719 9,585,591 127,436 49,463,746
$ 50.056.742 $14.789.474 $ (8.887.8541 $ 55.958.362
Beginning Transfers/ Ending
Balance Increases Deletions Balance
Economic Development Corporation:
Capital Assets, Not Being Depreciated:
Construction in Progress $ 3,750,962 $ - $ (3,750,962) $ -
Total Assets Not Being Depreciated $ 3,750,962 $ - $ (3,750,962) $ -
Depreciation expense was charged to functions /programs of the primary government as follows:
Governmental Activities
General Government
$ 583,202
Public Safety
461,630
Streets and Parks
1,962,890
Culture and Recreation
13,445
Health
12,157
Total Depreciation Expense - Governmental Activities
$ 3.033.324
Business -Type Activities:
Water and Sewer System
$ 1,458,152
EMS
136,410
Total Depreciation Expense - Business Type Activities
$ 1.594.562
39
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2009
NOTE 6 - INTERFUND BALANCES AND TRANSFERS
The composition of interfund balances as of September 30, 2009 is as follows:
Receivable Fund
General Fund
General Fund
Capital Projects Fund
Debt Service Fund
Water & Sewer Fund
Schertz EMS
Payable Fund
Amount
Water & Sewer Fund
$ 1,446
Schertz EMS
1,296
General Fund
7,308
Capital Projects Fund
35,054
Capital Projects Fund
3,039,254
Capital Projects Fund
60,976
Balances resulted from the lag time between dates that 1) interfund goods and services are provided or
reimbursable expenditures occur, and 2) transactions are recorded in the accounting system, and 3) payments
between funds are made.
The following schedule briefly summarizes the City's transfer activity:
Transfers In
Transfers Out
Amount
Purpose
General
Nonmajor Governmental
$ 567,951
Subsidy for Administrative Expenditures
Nonmajor Governmental
General
10,000
Funding for Improvements
Capital Projects
General
1,140,035
Funding for Previous Capital Projects
Capital Projects
Water & Sewer
331,986
Funding for Previous Capital Projects
Capital Projects
Schertz EMS
728,621
Funding for Previous Capital Projects
NOTE 7 - OPERATING LEASE
The City made agreements with the following telecommunication companies for cellular tower space. The
following are the minimum lease receivables.
AT &T
Sprint
Verizon
Total
2010 $ 37,386
$ 24,720
$ 37,544
$ 99,650
2011 38,507
25,462
38,670
102,639
2012 39,663
26,225
39,830
105,718
2013 40,853
27,012
41,025
108,890
$ 156,409
$ 103,419
$ 157,069
$ 416,897
NOTE 8 - 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 activities. These instruments include general obligation bonds,
certificates of obligation, and capital leases. These debt obligations are secured by either future property or
hotel tax revenue or liens on property and equipment.
40
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2009
NOTE 8 - LONG TERM DEBT (CONTINUED)
Bonds Payable and Certificates of Obligation
A summary of the terms of general obligation bonds and combination of tax and revenue certificates of
obligation outstanding at September 30, 2009, follows:
Series and Original
Final
Interest
Issue Amount
Maturity
Rate
Balance
Primary Government
General Obligation Bonds
2006 Series
$
15,000,000
2031
4.0%-5.25%
$ 13,855,000
2007 Series
6,000,000
2027
4.07%
5,525,000
2008 Series
9,900,000
2028
4.13%
9,605,000
2009 Series
9,500,000
2033
2.0%-5.50%
9,500,000
Certificates of Obligation
2001 Series
$
4,500,000
2021
4.1%-6.0%
3,250,000
2003 Series
3,360,000
2018
2.0%-3.9%
1,925,000
2004 Series
7,750,000
2023
4.0%-4.7%
6,440,000
2007 Series CIB 2
438,900
2016
4.01%
326,700
2007 Series CIB 4
569,500
2016
4.01%
432,150
Total Governmental Long -Term Obligations
$ 50,858,850
Revenue Bonds
2001 Series
$
5,550,000
2021
3.4%-5.2%
$ 3,060,000
2005 Series
3,200,000
2025
3.0%-4.0%
2,745,000
Certificates of Obligation
2007 Series CIB 1
$
6,600,000
2026
4.01%
5,930,000
2007 Series CIB 2
226,100
2016
4.01%
168,300
2007 Series CIB 3
500,000
2011
4.01%
260,000
2007 Series CIB 4
280,500
2016
4.01%
212,850
Public Facility Loan
$
142,000
2010
5.00%
7,000
Total Business -Type Long -Term Obligations
$ 12,383,150
Economic Development Corporation
Certificates of Obligation
2007 Series CIB 5 $ 1,300,000 2016 4.01% $ 965,000
Total Economic Development Corporation Long -Term Obligations $ 965,000
41
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2009
NOTE 8 - LONG -TERM DEBT (CONTINUED)
Debt Service Requirements
Annual debt service requirements of bonded debt as of September 30, 2009, are as follows:
Fiscal Year Ending
September 30,
2010
2011
2012
2013
2014
2015-2019
2020-2024
2025-2029
2030-2033
Principal
$ 1,753,200
1,889,850
2,043,200
2,209,850
2,373,150
12,794,600
12,990,000
10,405,000
4,400,000
Governmental Activities
Interest
$ 2,183,676
2,085,953
2,012,621
1,933,376
1,848,442
7,758,646
5,016,232
2,265,628
346,781
Total
$ 3,936,876
3,975,803
4,055,821
4,143,226
4,221,592
20,553,246
18,006,232
12,670,628
4,746,781
Total
$ 50.858.850
$ 25.451.355 $
76.310205
Fiscal Year Ending
Business -Type Activities
September 30,
Principal
Interest
Total
2010
$ 773,800
$ 521,943 $
1,295,743
2011
805,150
490,591
1,295,741
2012
696,800
457,652
1,154,452
2013
725,150
428,497
1,153,647
2014
756,850
397,732
1,154,582
2015-2019
3,930,400
1,478,512
5,408,912
2020-2024
3,545,000
636,880
4,181,880
2025-2026
1,150,000
60,833
1,210,833
Total
$ 12.383.150
$ 4.472.640 $
16.855.790
Fiscal Year Ending
Economic Development Corporation
September 30,
Principal
Interest
Total
2010
$ 125,000
$ 38,697 $
163,697
2011
125,000
33,684
158,684
2012
130,000
28,672
158,672
2013
135,000
23,459
158,459
2014
145,000
18,045
163,045
2015-2016
305,000
18,446
323,446
Total
$ 965.000
$ 161.003 $
1.126.003
42
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2009
NOTE 8 - LONG -TERM DEBT (CONTINUED)
Changes in Long -Term Debt
Total Business -Type Activities $13.353.690 $ 63.080 $ 867.379 $12.549.391 $ 810,235
Economic Development Corporation:
Certificates of Obligation $ 1,085,000 $ - $ 120,000 $ 965,000 $ 125,000
Compensated Absences 3,348 4,736 3,348 4,736 4,736
Total Economic Development $ 1,088,348 $ 4,736 $ 123,348 $ 969,736 $ 129,736
During the year, the City issued $9,500,000 of general obligation bonds, with the payment of the related
principal and interest to be made from an annual ad valorem tax levied against all taxable property within the
City and revenues from the proprietary funds. $6,600,000 of the bonds were issued to provide funds for
various construction projects. The City refunded the 1998 General Obligation bonds with principal
remaining of $2,900,000. The bonds were called for cancellation and redemption on August 10, 2009.
Additionally, the economic gain on the current refunding was $167,366. In the government -wide financial
statements, bond issuance costs are deferred and amortized over the life of the bonds. Bond issuance costs
are reported as deferred charges.
Bonded debt of the City consists of various series of general obligation bonds, revenue bonds, certificates of
obligation, and a public facility loan. General obligation bonds and certificates of obligation are direct
obligations of the City for which its full faith and credit are pledged, and are payable from taxes levied on all
taxable property located within the City. Revenue bonds are generally payable from pledged revenues
generated by the water and sewer fund. The debenture agreement for water and sewer bonds requires that
funds be available for 1 /12th of the principal and 1 /6th of the interest requirements of the next fiscal year.
The City is required to accumulate a reserve fund in an amount equal to the average principal and interest on
the revenue bonds. The City has purchased a surety bond through MBIA Insurance Corporation to fund the
required reserve amount.
43
Balance
Balance
Due Within
9/30/2008
Additions
Reductions
9/30/2009
One Year
Governmental Activities:
General Obligation Bonds
$ 32,790,000
$ 9,500,000
$ 3,805,000
$ 38,485,000
$ 955,000
Premium
113,213
181,679
6,436
288,456
10,989
Certificates of Obligation
13,158,700
-
784,850
12,373,850
798,200
Discount
(13,403)
-
(893)
(12,510)
(893)
Compensated Absences
556,457
135,310
111,291
580,476
116,095
Capital Lease
107,078
-
107,078
-
-
Total Governmental Activities
$46,712,045
$ 9,816,989
$4,813,762
$51,715,272
$1,879,391
Business -Type Activities:
Revenue Bonds
$ 6,230,000
$ -
$ 425,000
$ 5,805,000
$ 345,000
Unamortized Discount
(26,874)
-
(1,823)
(25,051)
(1,823)
Certificates of Obligation
6,976,300
-
405,150
6,571,150
421,800
Public Facility Loan
14,000
-
7,000
7,000
7,000
Compensated Absences Payable
160,264
63,080
32,052
191,292
38,258
Total Business -Type Activities $13.353.690 $ 63.080 $ 867.379 $12.549.391 $ 810,235
Economic Development Corporation:
Certificates of Obligation $ 1,085,000 $ - $ 120,000 $ 965,000 $ 125,000
Compensated Absences 3,348 4,736 3,348 4,736 4,736
Total Economic Development $ 1,088,348 $ 4,736 $ 123,348 $ 969,736 $ 129,736
During the year, the City issued $9,500,000 of general obligation bonds, with the payment of the related
principal and interest to be made from an annual ad valorem tax levied against all taxable property within the
City and revenues from the proprietary funds. $6,600,000 of the bonds were issued to provide funds for
various construction projects. The City refunded the 1998 General Obligation bonds with principal
remaining of $2,900,000. The bonds were called for cancellation and redemption on August 10, 2009.
Additionally, the economic gain on the current refunding was $167,366. In the government -wide financial
statements, bond issuance costs are deferred and amortized over the life of the bonds. Bond issuance costs
are reported as deferred charges.
Bonded debt of the City consists of various series of general obligation bonds, revenue bonds, certificates of
obligation, and a public facility loan. General obligation bonds and certificates of obligation are direct
obligations of the City for which its full faith and credit are pledged, and are payable from taxes levied on all
taxable property located within the City. Revenue bonds are generally payable from pledged revenues
generated by the water and sewer fund. The debenture agreement for water and sewer bonds requires that
funds be available for 1 /12th of the principal and 1 /6th of the interest requirements of the next fiscal year.
The City is required to accumulate a reserve fund in an amount equal to the average principal and interest on
the revenue bonds. The City has purchased a surety bond through MBIA Insurance Corporation to fund the
required reserve amount.
43
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2009
NOTE 9 - RETIREMENT PLAN
A. Plan Description
The City provides pension benefits for its eligible employees through a nontraditional, 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 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
contribution, benefits and actuarial methods and assumptions used by the System. This report may be
obtained by writing TMRS, P.O. Box 149153, Austin, Texas 78714 -9153 or by calling 800 - 924 -8677; in
addition, the report is available on TMRS' website at wN% w.TMRS.com.
The plan provisions are adopted by the governing body of the City, within the options available in the state
statutes governing TMRS. Plan provisions for the City were as follows:
B. 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 contribution rate, both of which are calculated to be a level percent of
payroll from year to year. The normal cost contribution rate finances the 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 the 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 is the basis for the rate and the calendar year when the rate goes into effect. (i.e. December 31, 2008,
valuation is effective for rates beginning January 2009.) The annual pension cost and net pension obligation/
(asset) are as follows:
Plan Year 2008
Plan Year 2009
Employee deposit rate
7.0%
7.0%
Matching ratio (City to Employee)
2 to 1
2 to 1
Years required for vesting
5
5
Service retirement eligibilty (expressed as
1,380,930
1,380,930
age / years of service)
60/5,0/20
60/5,0/20
Updated Service Credit
100% Repeating,
100% Repeating,
Annuity Increase (to retirees)
70% of CPI Repeating
70% of CPI Repeating
B. 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 contribution rate, both of which are calculated to be a level percent of
payroll from year to year. The normal cost contribution rate finances the 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 the 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 is the basis for the rate and the calendar year when the rate goes into effect. (i.e. December 31, 2008,
valuation is effective for rates beginning January 2009.) The annual pension cost and net pension obligation/
(asset) are as follows:
44
Annual
Actual
Percentage of Net Pension
Fiscal Year
Pension Cost
Contribution Made
APC Contribution Obligation
2009
$ 1,738,696
$ 1,738,696
100% -
2008
1,380,930
1,380,930
100% -
2007
954,490
954,490
100% -
44
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2009
NOTE 9 - RETIREMENT PLAN (CONTINUED)
B. Contributions (Continued)
The required contribution rates for fiscal year 2009 were determined as part of the December 31, 2006 and
2007 actuarial valuations. Additional information as of the latest actuarial valuation, December 31, 2008,
also follows:
Valuation Date
Acturial Cost Method
Amortization Method
Remaining Amortization Period
Asset Valuation Method
Acturial Assumptions:
Investment Rate of Return*
Projected Salary Increases*
* Includes Inflation at
Cost -of- Living Adjustments
December 31, 2006
Unit Credit
Level Percent of Payroll
25 years - Open Period
Amortized Cost
7.0%
Varies by age and service
3.0%
N/A
December 31, 2007
Projected Unit Credit
Level Percent of Payroll
30 years - Closed Period
Amortized Cost
7.0%
Varies by age and service
3.0%
2.1%
December 31, 2008
Projected Unit Credit
Level Percent of Payroll
29 years - Closed Period
Amortized Cost
7.5%
Varies by age and service
3.0%
2.1%
The funded status as of December 31, 2008, the most recent actuarial valuation date, is as follows:
Actuarial UAAL as a
Actuarial Actuarial Accrued Unfunded Percentage of
Valuation Date Value of Assets Liability (AAL) Funded Ratio AAL (UAAL) Covered Payroll Covered Payroll
12/31/2008 $ 11,216,663 $ 22,068,312 50.8% $ 10,851,649 $ 11,626,232 93.3%
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.
C. Other Post - Employment Benefits
The City also participates in the cost sharing multiple - employer defined benefit group -term life insurance
plan operated by TMRS known as 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.
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 life insurance during the employees' entire careers.
45
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2009
NOTE 9 - RETIREMENT PLAN (CONTINUED)
C. Other Post - Employment Benefits (Continued)
The City's contributions to the TMRS SDBF for the years ended 2009, 2008, and 2007 were $22,389,
$21,067, and $18,030, respectively, which equaled the required contributions each year.
NOTE 10 - COMMITMENTS AND CONTINGENCIES
Construction Commitments
The City of Schertz has entered into commitments for various projects as follows:
Primary Government:
Governmental Activities:
Recreation Center
Rural Roads
Schertz Pkwy Improvement
Weiderstein - Chelsea
Doerr Lane Reconstruction
Northcliff
Main Street
GreenValley Road
West Dietz Creek Upstream
Drainage Elbel
Drainage Projects
Total Governmental Commitments
Business -Type Activities:
East Live Oak Water Plant Improvements
Aviation Heights Waterline
FM 3009 W &S Relocation
Ground Storage
Schaefer Road Water
Town Creek Project Ph2
Total Business -Type Activities
Total Estimated Future Commitments
Tar Increment Financing (the "Zone')
Estimated Project Expended to Estimated Future
Cost to City Date Commitment
7,070,978
2,050,000
3,863,332
753,436
2,23 9,165
4,754,028
737,264
290,576
1,823,135
337,217
1,446,259
25,365,390
3,569,135
384,284
1,410,000
3,200,000
51,200
6,880,245
15,494,864
$ 40.860254
3,298,106
469,071
3,558,649
389,486
1,845,161
418,817
16,782
71,337
1,155,178
11,168
166,745
11,400,500
249,796
163,422
558,996
3,080,192
46,539
1,780,783
5,879,728
$ 17280228
3,772,872
1,580,929
304,683
363,950
394,004
4,335,211
720,482
219,239
667,957
326,049
1,279,514
13,964,890
3,319,339
220,862
851,004
119,808
4,661
5,099,462
9,615,136
$ 23.580.026
The City is a principal in the City of Schertz Tax Increment Reinvestment Zone 42, pursuant to Chapter 311
of the Texas Tax Code. Under the terms of the Zone agreement, the City of Schertz, Bexar County, and San
Antonio River Authority are funding infrastructure improvements through tax increment financing to the
Sedona Development Project.
At the time the Zone was created, the property tax base was "frozen" and increment taxes resulting from the
increases to property tax base are being used to finance Zone improvements. The total projected cost is a
combined figure of $45,000,000. Project costs of the developer will be funded up to 100% of the tax
increment generated by the City of Schertz, Bexar County, and San Antonio River Authority. The Zone has
a statutory termination date of December 31, 2027.
M1
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2009
NOTE 10 - COMMITMENTS AND CONTINGENCIES (CONTINUED)
Schertz /Seguin Local Government Corporation
The City of Schertz is jointly liable, together with the City of Seguin, for operating deficits and long -term
debt of the Schertz /Seguin Local Government Corporation. Following is a summary of financial data as
reported in the Corporation's audited financial statements dated September 30, 2008:
ASSETS:
Current Assets $ 3,062,697
Restricted Cash and Cash Equivalents 5,659,660
Property, Plant & Equipment 49,255,115
Other Assets 2,188,572
TOTAL ASSETS —E-60,166,044
LIABILITIES & NET ASSETS:
Current Liabilities $ 2,271,128
Revenue Bonds (Less Current Maturities and Unamortized Discounts) 54,056,656
TOTAL LIABILITIES 56,327,784
NET ASSETS:
Invested in Capital Assets, Net of Related Debt -
Restricted 1,319,046
Unrestricted 2,519,214
TOTAL NET ASSETS 3,838,260
TOTAL LIABILITIES AND NET ASSETS $ 60.166.044
The Corporation had revenue bonds outstanding in the amount of $57,985,000 (as of September 30, 2008) to
provide funds to build, improve, extend, enlarge and repair the Corporation's utility system, fund a reserve,
and pay the costs of bond issuance. The bond resolution pledges interngovernmental contract revenues from
the cities of Schertz and Seguin (the participating governments) to bond holders. Under the
intergovernmental water supply contract, the participating governments are unconditionally obligated to pay
their respective shares of annual contract revenue bond debt service from the operation of their respective
utility systems.
RiskManagement
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets;
errors and omissions; and natural disasters. The City contracts with the Texas Municipal League
Intergovernmental Risk Pool, a public entity risk pool currently operating as a common risk management and
insurance program providing insurance coverage in the following areas: general liability, automobile liability
and physical damage, law enforcement liability, worker's compensation, real and personal property, mobile
equipment, and errors and omissions liability. TML is a multi - employer group that provides for a
combination of risk sharing among pool participants and stop loss coverage. Contributions are set annually
by the provider. Liability by the City is generally limited to the contributed amounts. Annual contributions
for the year ended September 30, 2009 were $498,112 for property and casualty and workers compensation
coverage. There were no significant increases or decreases in coverage from fiscal year 2008.
47
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2009
NOTE 10 - COMMITMENTS AND CONTINGENCIES (CONTINUED)
Litigation
The City is the subject of various claims and litigation that have arisen in the course of its operations.
Management is of the opinion that the City's liability in these cases, if decided adversely to the City, will not
have a material effect on the City's financial position.
NOTE 11 - JOINT VENTURE
A joint venture is a legally separate entity that results from a contractual arrangement and that is owned,
operated, or governed by two or more participating governments. The following entity meets the criteria as a
joint venture:
Schertz /Seguin Local Government Corporation
The Schertz /Seguin Local Government Corporation is a public, nonprofit corporation organized to aid, assist,
and act on behalf of the cities of Schertz and Seguin in acquiring, constructing, maintaining, and operating a
water utility system. The participating governments have an ongoing financial responsibility to fund the
operation of the corporation through either purchase of services or by subsidizing the operations.
Contributions to the corporation are reflected as "nonoperating expenses" in the water and sewer fund and
totaled $1,590,042 for the year ended September 30, 2009.
Separate financial statements for the Schertz /Seguin Local Government Corporation may be obtained from
the City of Seguin, 210 East Gonzales Street, Seguin, Texas 78156.
NOTE 12 - SUBSEQUENT EVENT
Subsequent to year end, the following contracts for projects were awarded by the City:
Project
Green Valley Road Improvements
West Dietz/Weiderstein Road Project
NOTE 13 - PRIOR PERIOD ADJUSTEMENT
Amount
$ 175,941
251,632
$ 427,573
The following adjustment was necessary to correct certain errors and classifications in the financial
statements for the period ending September 30, 2008:
Beginning Fund Balances
Interfund Receivable (Overstated) Understated
Restated Beginning Fund Balances
48
General Fund
6,085,908
Capital
Projects Fund
$ 16,416,440
(1,031,883) 1,031,883
$ 5,054,025 $ 17,448,323
REQUIRED SUPPLEMENTARY INFORMATION
49
CITY OF SCHERTZ, TEXAS
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
YEAR ENDED SEPTEMBER 30, 2009
(WITH COMPARATIVE ACTUAL TOTALS FOR 2008)
Public Safety
Police Department
3,979,207
3,979,207
4,091,859
Variance With
*Restated
Fire Department
2,297,126
2,297,126
2009
Final Budget -
2008
Inspection
Budgeted Amounts
Actual
Positive
Actual
499,342
Original
Final
Amounts
(Negative)
Amounts
REVENUES
Property Taxes
$ 5,519,684
$ 5,519,684
S 5,689,992
$ 170,308
$4,985,907
Sales Tax
4,432,000
4,432,000
4,011,855
(420,145)
4,117,173
Franchise Taxes
1,203,288
1,203,288
1,462,199
258,911
1,240,642
Beverage Taxes
37,000
37,000
36,894
(106)
37,115
Permits and Fees
1,252,595
1,252,595
800,381
(452,214)
951,746
Service Fees
2,294,299
2,294,299
1,891,856
(402,443)
1,568,600
Fines and Fees
1,410,830
1,410,830
1,517,821
106,991
1,387,677
Intergovernmental
-
-
13,000
13,000
27,880
Investment Earnings
202,500
202,500
137,050
(65,450)
381,426
Miscellaneous
451,050
452,050
580,904
128,854
318,661
TOTAL REVENUES
16,803,246
16,804,246
16,141,952
(662,294)
15,016,827
EXPENDITURES
Current:
General Government:
City Council
41,825
43,825
31,111
12,714
23,977
City Manager
726,958
726,958
671,567
55,391
694,869
Planning and Zoning
248,787
248,787
188,602
60,185
280,134
Legal
254,000
254,000
331,154
(77,154)
299,411
Customer Relations
125,967
140,374
111,694
28,680
94,477
Municipal Court
250,674
250,674
238,217
12,457
378,600
Facilities Maintenance
715,199
714,649
734,277
(19,628)
671,918
Purchasing
103,471
103,020
202,476
(99,456)
115,564
City Secretary
170,489
170,489
166,405
4,084
150,872
Finance
449,056
449,056
430,266
18,790
383,739
Information Technology
614,445
614,445
502,923
111,522
723,143
Human Resources
281,151
289,047
231,872
57,175
213,665
Records Management
216,962
195,790
163,786
32,004
178,153
Engineering
272,718
272,718
287,689
(14,971)
250,561
Fleet Services
293,259
293,259
275,457
17,802
247,804
Special Events
15,372
16,372
67,934
(51,562)
102,125
Public Information
488,744
488,744
484,784
3,960
432,351
Other
997,866
992,235
1,003,527
(11,292)
887,431
Total General Government
6,266,943
6,264,442
6,123,741
140,701
6,128,794
Public Safety
Police Department
3,979,207
3,979,207
4,091,859
(112,652)
3,899,253
Fire Department
2,297,126
2,297,126
2,345,033
(47,907)
2,239,757
Inspection
848,082
847,932
798,609
49,323
499,342
Total Public Safety
$ 7,124,415
$ 7,124,265
S 7,235,501
$ (111,236)
$6,638,352
50
CITY OF SCHERTZ, TEXAS
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL (CONTINUED)
YEAR ENDED SEPTEMBER 30, 2009
(WITH COMPARATIVE ACTUAL TOTALS FOR 2008)
EXPENDITURES (continued)
Current: (Continued)
Streets and Parks:
Streets
Parks
Swimming Pool
Total Streets and Parks
Health:
Animal Control
Total Health
Culture and Recreation:
Library
Civic Center
Total Culture and Recreation
Capital Outlay
TOTAL EXPENDITURES
Budgeted Amounts
Original Final
2009
Actual
Amounts
Variance With
*Restated
Final Budget -
2008
Positive
Actual
(Negative)
Amounts
$ 891,410
$ 894,567
$ 856,502
$ 38,065
$ 740,091
560,873
560,873
568,507
(7,634)
579,963
230,803
230,803
230,195
608
225,332
1,683,086
1,686,243
1,655,204
31,039
1,545,386
1,611,039
(582,084)
(2,193,123)
(332,294)
341,457
341,457
348,448
(6,991)
295,156
341,457
341,457
348,448
(6,991)
295,156
FUND BALANCE - BEGINNING
5,054,025
5,054,025
5,054,025
-
595,372
595,372
593,528
1,844
416,409
184,100
199,615
193,332
6,283
251,586
779,472
794,987
786,860
8,127
667,995
1,139,537 1,813,485 2,436,546 (623,061) 3,176,638
17,334,910 18,024,879 18,586,300 (561,421) 18,452,321
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (531,664) (1,220,633) (2,444,348) (1,223,715) (3,435,494)
OTHER FINANCING SOURCES (USES)
Transfers In
922,070
1,611,039
567,951
(1,043,088)
130,500
Transfers Out
-
-
(1,150,035)
(1,150,035)
(462,794)
Total Other Financing Sources (Uses)
922,070
1,611,039
(582,084)
(2,193,123)
(332,294)
NET CHANGE IN FUND BALANCE
390,406
390,406
(3,026,432)
(3,416,838)
(3,767,788)
FUND BALANCE - BEGINNING
5,054,025
5,054,025
5,054,025
-
8,821,813
FUND BALANCE - ENDING
$ 5,444,431
$ 5,444,431
$ 2,027,593
$(3,416,838)
$ 5,054,025
*Restated for the effects of a prior period adjustment
51
CITY OF SCHERTZ, TEXAS
NOTES TO SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE — BUDGET AND ACTUAL
SEPTEMBER 30, 2009
Budgetary Information — The budget is prepared in accordance with accounting principles generally
accepted in the United States of America. The City maintains strict budgetary controls. The objective of
these controls is to ensure compliance with legal provision embodied in the annual appropriated budget
approved by the City Council and as such is a good management control device. Annual budgets are
adopted for all governmental funds except Capital Projects. Project - length financial plans are adopted for
capital projects funds.
Budgetary preparation and control is exercised at the department level. Actual expenditures may not
legally exceed appropriations at the fund level. The City Manager may transfer budgeted amounts up to
$50,000 between and among departments within any fund without approval by City Council.
The City exceeded the general fund budgeted expenditures during 2009.
Encumbrances represent commitments related to unperformed contracts for goods or services. Encumbrance
accounting, under which purchase orders, contracts and other commitments for the expenditure of resources
are recorded to reserve that portion of the applicable appropriation, is utilized in the governmental funds.
Encumbrances lapse at year -end and do not constitute expenditures or liabilities because the commitments
must be reappropriated and honored during the subsequent year.
52
CITY OF SCHERTZ, TEXAS
REQUIRED SUPPLEMENTARY INFORMATION
TEXAS MUNICIPAL RETIREMENT SYSTEM
ANALYSIS OF FUNDING PROGRESS
LAST FIVE FISCAL YEARS
UNFUNDED
FUNDING ACTUARIAL
RATIO
(1)/(2)
ACTUARIAL
ACTUARIAL
FISCAL
VALUE OF
ACCRUED
YEAR
ASSETS"
LIABILITY*
2004
$ 5,122,816
$ 7,950,619
2005
6,042,437
9,003,970
2006
7,290,175
11,798,002
2007
8,811,205
19,057,935
2008
11,216,663
22,068,312
UNFUNDED
FUNDING ACTUARIAL
RATIO
(1)/(2)
ACCRUED
LIABILITY
64.4%
$ 2,827,803
67.1%
2,961,533
61.8%
4,507,827
46.2%
10,246,730
50.8%
10,851,649
*As of December 31 of the preceding year, the date of the actuarial valuation.
* *Assets are stated cost as of December 31 of the preceding year.
53
ANNUAL
COVERED
PAYROLL
$ 6,144,053
7,662,928
8,478,634
10,047,726
11,626,232
UNFUNDED
ACTUARIAL
ACCRUED
LIABILITY
AS A
PERCENTAGE
OF COVERED
PAYROLL
46.0%
38.6%
53.2%
102.0%
93.3%
iv
s
n
CITY
m
OTHER SUPPLEMENTARY INFORMATION
54
COMBINING AND INDIVIDUAL FUND
STATEMENTS AND SCHEDULES
55
NONMAJOR GOVERNMENTAL FUNDS
Nonmajor Governmental Funds (Special Revenue Funds) are used to account for the proceeds of specific
revenue sources that are legally restricted to expenditure for specified purposes.
Hotel Occupancy Fund - will account for proceeds of hotel occupancy taxes to be used strictly for those
kinds of programs that promote the tourism industry.
Sedona TIRZ Fund - will account for funds and distribute funds according to the terms of the agreement of
the Tax Incremental Financing Zone.
Park Fund - will account for revenues from developers' fees (in lieu of park land dedication), grants, and
donations and is designed to monitor and manage improvement of park system and tree mitigation.
Recycling Fund - will account for revenues received from the recycling fee on all residential water bills and
the sale of recyclable material used to buy down solid waste collection costs.
Police Forfeitures Fund - will account for revenue received from drug related cases in conjunction with other
law enforcement agencies.
Library Grant Fund - will account for funds from a state grant to be used for purchasing computers at the
library to be used for access to the internet.
Parks and Wildlife Fund - will account for funds received for the preservation of parks and wildlife.
Historical Committee Fund - will account for funds received for the preservation of the history of the city.
M
CITY OF SCHERTZ, TEXAS
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
SEPTEMBER 30, 2009
ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable, Net of Allowance
Taxes
Due from Component Unit
Restricted Assets:
Cash and Cash Equivalents
Investments
TOTAL ASSETS
LIABILITIES AND FUND BALANCE
Liabilities
Withdrawals in Excess of Deposits
Accounts Payable
Total Liabilities
Fund Balance
Reserved for:
Tree Mitigation
Unreserved:
Total Fund Balances
TOTAL LIABILITIES AND
FUND BALANCE
Special Revenue Funds
Hotel Sedona Police
Occupancy T1RZ Park Recycling Forfeitures
Fund Fund Fund Fund Fund
$ - $ 36,000 $ 18,553 $ - $ -
- 78,707
25,380 - - - -
20,000 - - - -
57,472 - - - 65,808
77,858 - 191,834 - 277,811
$ 180,710 $ 36,000 $ 289,094 $ - $ 343,619
$ - $ - $ - $ 24,912 $
36,000 2,390 -
36,000 2,390 24,912
- - 191,834 - -
180,710 - 94,870 (24,912) 343,619
180,710 - 286,704 (24,912) 343,619
$ 180,710 $ 36,000 $ 289,094 $ - $ 343,619
57
Special Revenue Funds
Library Parks and Historical
Grant Wildlife Committee
Fund Fund Fund Totals
$ - $ - $ 10,149 $ 64,702
78,707
- - - 25,380
- - - 20,000
401 - - 123,681
- - - 547,503
$ 401 $ - $ 10,149 $ 859,973
$ - $ 10,021 $ - $ 34,933
- - - 38,390
- 10,021 - 73,323
- - - 191,834
401 (10,021) 10,149 594,816
401 (10,021) 10,149 786,650
$ 401 $ - $ 10,149 $ 859,973
58
CITY OF SCHERTZ, TEXAS
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2009
REVENUES
Occupancy Tax
Developer Fees
Tree Mitigation
Sale of Recycling Materials
Sale of Property Forfeitures
Sale of Merchandise
Operating Grants
Investment Earnings
Miscellaneous
TOTAL REVENUES
EXPENDITURES
Current:
General and Administrative
Contractual Services
Capital Outlay
TOTAL EXPENDITURES
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Special Revenue Funds
Hotel Sedona Police
Occupancy TIRZ Park Recycling Forfeitures
Fund Fund Fund Fund Fund
$ 305,073 $ - $ - $ - $ -
- - 2,402 - -
19,322 - -
- 5,812 -
- 104,741
2,586 - 3,537 - 2,806
- - 55 - -
307,659 - 25,316 5,812 107,547
18,637
- 130,655 -
20,631
75,444
- - 45,472
-
46,754
- 48,557 -
47,447
140,835
- 179,212 45,472
68,078
166,824
- (153,896) (39,660)
39,469
OTHER FINANCING SOURCES (USES)
Transfers In - - - - -
Transfers Out (488,997) - - - (78,954)
TOTAL OTHER FINANCING
SOURCES (USES) (488,997) - - - (78,954)
Net Change in Fund Balance (322,173) - (153,896) (39,660) (39,485)
Fund Balances/Equity, October 1 502,883 - 440,600 14,748 383,104
Fund Balances /Equity (Deficit),
September 30 $ 180,710 $ - $ 286,704 $ (24,912) $ 343,619
59
Special Revenue Funds
Library Parks and Historical
Grant Wildlife Committee
Fund Fund Fund Totals
$ - $ - $ - $ 305,073
- - - 2,402
- - - 19,322
- - - 5,812
- - - 104,741
- - 7,035 7,035
7,988 35,749 - 43,737
- - - 8,929
- - - 55
7,988 35,749 7,035 497,106
21,891 - 6,886 198,700
- - - 120,916
- 45,770 - 188,528
21,891 45,770 6,886 508,144
(13,903) (10,021) 149 (11,038)
- - 10,000 10,000
- - - (567,951)
- - 10,000 (557,951)
(13,903) (10,021) 10,149 (568,989)
14,304 - - 1,355,639
$ 401 $ (10,021) $ 10,149 $ 786,650
•1
CITY OF SCHERTZ, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
BUDGET TO ACTUAL
HOTEL OCCUPANCY FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2009
(WITH COMPARATIVE ACTUAL TOTALS FOR 2008)
OTHER FINANCING SOURCES
(USES)
Transfers Out (173,500) (173,500) (488,997) (315,497) (130,500)
TOTAL OTHER FINANCING
SOURCES (USES) (173,500) (173,500) (488,997) (315,497) (130,500)
Net Change in Fund Balance
85,000
85,000
(322,173) (407,173)
Variance with
FUND BALANCE, BEGINNING
502,883
502,883
502,883 -
2009
Final Budget-
2008
FUND BALANCE, ENDING
Budgeted Amounts
Actual
Positive
Actual
Original
Final
Amounts
(Negative)
Amounts
REVENUES
Occupancy Tax
$ 436,000
$ 436,000
$ 305,073
$ (130,927)
$ 273,558
Investment Earnings
18,100
18,100
2,586
(15,514)
14,478
Miscellaneous
-
-
-
-
403
TOTAL REVENUES
454,100
454,100
307,659
(146,441)
288,439
EXPENDITURES
Current:
General and Administrative
4,800
48,800
18,637
30,163
21,953
Contractual Services
135,500
91,500
75,444
16,056
89,810
Capital Outlay
55,300
55,300
46,754
8,546
14,036
TOTAL EXPENDITURES
195,600
195,600
140,835
54,765
125,799
Excess (Deficiency) of Revenues
Over (Under) Expenses
258,500
258,500
166,824
(91,676)
162,640
OTHER FINANCING SOURCES
(USES)
Transfers Out (173,500) (173,500) (488,997) (315,497) (130,500)
TOTAL OTHER FINANCING
SOURCES (USES) (173,500) (173,500) (488,997) (315,497) (130,500)
Net Change in Fund Balance
85,000
85,000
(322,173) (407,173)
32,140
FUND BALANCE, BEGINNING
502,883
502,883
502,883 -
470,743
FUND BALANCE, ENDING
$ 587,883
$ 587,883
$ 180,710 $ (407,173)
$ 502,883
61
CITY OF SCHERTZ, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
BUDGET TO ACTUAL
PARK FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2009
(WITH COMPARATIVE ACTUAL TOTALS FOR 2008)
REVENUES
Developer Fees
Tree Mitigation
Investment Earnings
Miscellaneous
TOTAL REVENUES
EXPENDITURES
Current:
General and Administrative
Capital Outlay
TOTAL EXPENDITURES
OTHER FINANCING SOURCES
(USES)
Transfers In
TOTAL OTHER FINANCING
SOURCES (USES)
Net Change in Fund Balance
FUND BALANCE, BEGINNING
FUND BALANCE, ENDING
65,500 130,655 (65,155) 22,344
- 48,557 (48,557) 44,405
65,500 179,212 (113,712) 66,749
20,000
20,000
(20,000)
- (20,000)
29,900 (153,896) (183,796) (10,694)
440,600 440,600 - 451,294
$ 470,500 $ 286,704 $ (183,796) $ 440,600
CL
Variance with
Original and
2009
Final Budget-
2008
Final
Actual
Positive
Actual
Budget
Amounts
(Negative)
Amounts -
$ 50,000
$ 2,402
$ (47,598)
$ 25,088
10,000
19,322
9,322
16,119
15,400
3,537
(11,863)
14,848
65,500 130,655 (65,155) 22,344
- 48,557 (48,557) 44,405
65,500 179,212 (113,712) 66,749
20,000
20,000
(20,000)
- (20,000)
29,900 (153,896) (183,796) (10,694)
440,600 440,600 - 451,294
$ 470,500 $ 286,704 $ (183,796) $ 440,600
CL
CITY OF SCHERTZ, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
BUDGET TO ACTUAL
RECYCLING FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2009
(WITH COMPARATIVE ACTUAL TOTALS FOR 2008)
63
Variance with
Original and
2009
Final Budget-
2008
Final
Actual
Positive
Actual
Budget
Amounts
(Negative)
Amounts
REVENUES
Sale of Recycling Materials
$ 18,000
$ 5,812
$ (12,188)
$ 23,472
TOTAL REVENUES
18,000
5,812
(12,188)
23,472
EXPENDITURES
Current:
General and Administrative
-
-
-
341
Contractual Services
18,000
45,472
(27,472)
15,163
TOTAL EXPENDITURES
18,000
45,472
(27,472)
15,504
Net Change in Fund Balance
-
(39,660)
(39,660)
7,968
FUND BALANCE, BEGINNING
14,748
14,748
-
6,780
FUND BALANCE (DEFICIT), ENDING
$ 14,748
$ (24,912)
$ (39,660)
$ 14,748
63
CITY OF SCHERTZ, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
BUDGET TO ACTUAL
POLICE FORFEITURES FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2009
(WITH COMPARATIVE ACTUAL TOTALS FOR 2008)
OTHER FINANCING SOURCES
(USES)
Transfers Out - (78,954) (78,954) -
TOTAL OTHER FINANCING
SOURCES (USES) - (78,954) (78,954) -
Net Change in Fund Balance - (39,485) (39,485) 41,123
FUND BALANCE, BEGINNING
383,104
Variance with
- 341,981
FUND BALANCE, ENDING
Original and 2009
Final Budget-
2008
Final Actual
Positive
Actual
Budget Amounts
(Negative)
Amounts
REVENUES
Sale of Property Forfeitures
$ - $ 104,741
$ 104,741
$ 122,879
Investment Earnings
- 2,806
2,806
9,908
TOTAL REVENUES
- 107,547
107,547
132,787
EXPENDITURES
General and Administrative
- 20,631
(20,631)
34,011
Capital Outlay
- 47,447
(47,447)
57,653
TOTAL EXPENDITURES
- 68,078
(68,078)
91,664
OTHER FINANCING SOURCES
(USES)
Transfers Out - (78,954) (78,954) -
TOTAL OTHER FINANCING
SOURCES (USES) - (78,954) (78,954) -
Net Change in Fund Balance - (39,485) (39,485) 41,123
FUND BALANCE, BEGINNING
383,104
383,104
- 341,981
FUND BALANCE, ENDING
$ 383,104
$ 343,619
$ (39,485) $ 383,104
64
CITY OF SCHERTZ, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
BUDGET TO ACTUAL
LIBRARY GRANT FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2009
(WITH COMPARATIVE ACTUAL TOTALS FOR 2008)
65
Variance with
Original and
2009
Final Budget-
2008
Final
Actual
Positive
Actual
Budget
Amounts
(Negative)
Amounts
REVENUES
Operating Grants
$ -
$ 7,988
$ 7,988
$ 8,211
TOTAL REVENUES
-
7,988
7,988
8,211
EXPENDITURES
Current:
General and Administrative
-
21,891
(21,891)
-
TOTAL EXPENDITURES
-
21,891
(21,891)
-
Net Change in Fund Balance
-
(13,903)
(13,903)
8,211
FUND BALANCE, BEGINNING
14,304
14,304
-
6,093
FUND BALANCE, ENDING
$ 14,304
$ 401
$ (13,903)
$ 14,304
65
CITY OF SCHERTZ, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
BUDGET TO ACTUAL
PARKS AND WILDLIFE FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2009
(WITH COMPARATIVE ACTUAL TOTALS FOR 2008)
FUND BALANCE, BEGINNING
FUND BALANCE (DEFICIT), ENDING $ - $ (10,021) $ (10,021) $ -
.:
Variance with
Original and 2009
Final Budget- 2008
Final Actual
Positive Actual
Budget Amounts
(Negative) Amounts
REVENUES
Operating Grants
$ - $ 35,749
$ 35,749 $ -
TOTAL REVENUES
- 35,749
35,749 -
EXPENDITURES
Capital Outlay
- 45,770
(45,770) -
TOTAL EXPENDITURES
- 45,770
(45,770) -
Net Change in Fund Balance
- (10,021)
(10,021) -
FUND BALANCE, BEGINNING
FUND BALANCE (DEFICIT), ENDING $ - $ (10,021) $ (10,021) $ -
.:
CITY OF SCHERTZ, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
BUDGET TO ACTUAL
HISTORICAL COMMITTEE FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2009
(WITH COMPARATIVE ACTUAL TOTALS FOR 2008)
67
Variance with
Original and
2009
Final Budget- 2008
Final
Actual
Positive Actual
Budget
Amounts
(Negative) Amounts
REVENUES
Sale of Merchandise
$ -
$ 7,035
$ 7,035 $ -
TOTAL REVENUES
-
7,035
7,035 -
EXPENDITURES
General and Administrative
-
6,886
(6,886) -
TOTAL EXPENDITURES
-
6,886
(6,886) -
OTHER FINANCING SOURCES
(USES)
Transfers In
-
10,000
10,000 -
TOTAL OTHER FINANCING
SOURCES (USES)
-
10,000
10,000 -
Net Change in Fund Balance
-
10,149
10,149 -
FUND BALANCE, BEGINNING
-
-
- -
FUND BALANCE, ENDING
$ -
$ 10,149
$ 10,149 $ -
67
CITY OF SCHERTZ, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
BUDGET TO ACTUAL
DEBT SERVICE FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2009
(WITH COMPARATIVE ACTUAL TOTALS FOR 2008)
OTHER FINANCING SOURCES
Transfers In
338,632
338,632
-
Variance with
Issuance of Debt
-
-
2,900,000
2009
Final Budget-
2008
Budgeted Amounts
Actual
Positive
Actual
338,632
Original
Final
Amounts
(Negative)
Amounts
REVENUES
(218,791) (127,595)
FUND BALANCE, BEGINNING
429,289
429,289
429,289
Property Taxes
$ 4,088,759
$ 4,088,759
$ 3,274,650
$ (814,109)
$ 2,870,077
Intergovernmental
-
-
485,767
485,767
490,748
Investment Earnings
49,300
49,300
11,337
(37,963)
41,801
TOTAL REVENUES
4,138,059
4,138,059
3,771,754
(366,305)
3,402,626
EXPENDITURES
Debt Service:
Principal
2,470,000
2,111,516
4,696,928
(2,585,412)
1,910,043
Interest and Fiscal Charges
1,772,820
2,131,304
1,950,358
180,946
1,620,178
Bond Issue Costs
-
-
9,388
(9,388)
-
TOTAL EXPENDITURES
4,242,820
4,242,820
6,656,674
(2,413,854)
3,530,221
EXCESS (DEFICIENCY) OF
REVENUES OVER (UNDER)
EXPENDITURES
(104,761)
(104,761)
(2,884,920)
(2,780,159)
(127,595)
OTHER FINANCING SOURCES
Transfers In
338,632
338,632
-
(338,632) -
Issuance of Debt
-
-
2,900,000
2,900,000 -
TOTAL OTHER FINANCING
SOURCES
338,632
338,632
2,900,000
2,561,368 -
Net Change in Fund Balance
233,871
233,871
15,080
(218,791) (127,595)
FUND BALANCE, BEGINNING
429,289
429,289
429,289
- 556,884
FUND BALANCE, ENDING
$ 663,160
$ 663,160 1
$ 444,369 1
$ (218,791) $ 429,289
68
CITY OF SCHERTZ, TEXAS
COMPARATIVE BALANCE SHEETS
GENERAL FUND
SEPTEMBER 30, 2009 AND 2008
LIABILITIES AND FUND BALANCE
Liabilities:
Restated
Withdrawals in Excess of Deposits
2009
2008
ASSETS
534,737
614,836
Cash and Cash Equivalents
$ 846,717
$ 1,100
Investments
1,568,165
5,468,624
Receivables:
244,662
288,578
Ad Valorem Taxes (Net of Allowance for
32,450
12,838
Uncollectibles of $7,842 and $7,314)
122,855
114,592
Sales Taxes
631,406
740,307
Franchise Taxes
344,857
325,157
Other (Net of Allowance for Uncollectibles
Reserved for:
of $2,036,897 and $1,747,485)
1,400,790
1,203,048
Due from Other Funds
2,742
-
Due from Component Unit
-
1,412
Accrued Interest
5,569
38,246
Inventory
44,217
46,014
TOTAL ASSETS
$ 4,9671318
$ 7,938,500
LIABILITIES AND FUND BALANCE
Liabilities:
Withdrawals in Excess of Deposits
$ -
$ 232,783
Accounts Payable
534,737
614,836
Accrued Liabilities
585,827
403,673
Customer Deposits
21,190
16,050
Due to Other Governments
244,662
288,578
Due to Other Funds
32,450
12,838
Deferred /Unearned Revenue
1,520,859
1,315,717
Total Liabilities
2,939,725
2,884,475
Fund Balance:
Reserved for:
Inventory
44,217
46,014
LEOSE
11,832
11,018
Technology
236,842
212,561
Court Security
95,275
57,400
Writing Next Chapter
130,930
-
Unreserved:
Undesignated
1,508,497
4,727,032
Total Fund Balance
2,027,593
5,054,025
TOTAL LIABILITIES AND FUND BALANCE
$ 4,967,318
$ 7,938,500
.'
CITY OF SCHERTZ, TEXAS
COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
GENERAL FUND
FOR THE YEARS ENDED SEPTEMBER 30, 2009 AND 2008
EXPENDITURES
Current:
General Government
6,123,741
Restated
Public Safety
2009
2008
REVENUES
1,655,204
1,545,386
Property Taxes
$ 5,689,992
$ 4,985,907
Sales Taxes
4,011,855
4,117,173
Franchise Taxes
1,462,199
1,240,642
Beverage Taxes
36,894
37,115
Permits and Fees
800,381
951,746
Service Fees
1,891,856
1,568,600
Fines and Fees
1,517,821
1,387,677
Intergovernmental
13,000
27,880
Investment Earnings
137,050
381,426
Miscellaneous
580,904
318,661
TOTAL REVENUES
16,141,952
15,016,827
EXPENDITURES
Current:
General Government
6,123,741
6,128,794
Public Safety
7,235,501
6,638,352
Streets and Parks
1,655,204
1,545,386
Health
348,448
295,156
Culture and Recreation
786,860
667,995
Capital Outlay
2,436,546
3,176,638
TOTAL EXPENDITURES
18,586,300
18,452,321
Excess (Deficiency) of Revenues
Over (Under) Expenditures
(2,444,348)
(3,435,494)
OTHER FINANCING SOURCES (USES)
Transfers In 567,951 130,500
Transfers Out (1,150,035) (462,794)
TOTAL OTHER FINANCING
SOURCES (USES) (582,084) (332,294)
Net Change in Fund Balance (3,026,432) (3,767,788)
Fund Balance at Beginning of Year 5,054,025 8,821,813
Fund Balance at End of Year S 2,027,593 $ 5.054.025
70
iv
s
n
CITY
m
DISCRETELY PRESENTED COMPONENT UNITS
Discretely presented component units consist of separate entities whose governing bodies are not
substantively the same as the governing body of the primary government. The discretely presented
component units also provide services to areas other than the primary government.
71
CITY OF SCHERTZ, TEXAS
COMBINING BALANCE SHEET
DISCRETELY PRESENTED COMPONENT UNITS
SEPTEMBER 30, 2009
ASSETS
Cash and Cash Equivalents
Investments
Taxes Receivable
Accounts Receivable - Other
Accrued Interest Receivable
Due from Primary Government
TOTAL ASSETS
LIABILITIES AND FUND BALANCE
Liabilities
Accounts Payable
Accrued Liabilities
Due to Primary Government
Total Liabilities
Fund Balance
Unreserved
Total Fund Balances
TOTAL LIABILITIES
AND FUND BALANCE
Total Fund Balances
Amounts reported in the statement of net assets
are different because:
Deferred charges, consisting of debt issue costs, are
amortized over the life of the bond in the governmental
activities, but were recognized in full in the governmental
funds:
Long -term liabilities (including employee compensated
absences) are not payable in the current period and,
therefore, are deferred in the funds
Total Net Assets
Net Assets are presented on pages 14 -15.
Schertz
The
Economic
Library
Development
Advisory
Corporation
Board
Parks and
Recreation
Foundation Total
$ 99,446 $ 1,864 $ 45,531 $ 146,841
1,934,302 30,563 - 1,964,865
315,703 - - 315,703
- - 100 100
6,140 - - 6,140
237,547 - - 237,547
$ 2.593.138 $ 32.427 $ 45.631 $ 2.671.196
$ 35,996 $
14,132
50,128
97 $ - $ 36,093
- - 14,132
- 20,000 20,000
97 20,000 70,225
2,543,010 32,330 25,631 2,600,971
2,543,010 32,330 25,631 2,600,971
$ 2.593.138 $ 32.427 $ 45.631 $ 2.671.196
$ 2,543,010 $ 32,330 $ 25,631 $ 2,600,971
7,924 - - 7,924
(976,185) - - (976,185)
$ 1.574.749 $ 32.330 $ 25.631 $ 1.632.710
72
CITY OF SCHERTZ, TEXAS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE
DISCRETELY PRESENTED COMPONENT UNITS
FOR THE YEAR ENDED SEPTEMBER 30, 2009
REVENUES
Sales Taxes
Capital Grants and Contributions
Operating Grants and Contributions
Charges for Services
Investment Earnings
Miscellaneous Income
TOTAL REVENUES
EXPENDITURES
Current:
Administrative
Culture and Recreation
Economic Development
Debt Service:
Principal
Interest and Fiscal Charges
TOTAL EXPENDITURES
Excess (Deficiency) of Revenues
Over (Under) Expenditures
OTHER FINANCING SOURCES (USES)
Contibutions to Primary Government
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCE
FUND BALANCE, BEGINNING
FUND BALANCE, ENDING
Schertz
The
Economic
Library
Development
Advisory
Corporation
Board
Parks and
Recreation
Foundation Total
$ 2,005,927 $
- $
-
$ 2,005,927
603,011
-
-
603,011
-
830
56,466
57,296
-
11,386
65,681
77,067
24,754
399
92
25,245
14,237
-
1,512
15,749
2,647,929
12,615
123,751
2,784,295
424,554
-
-
424,554
-
34,188
98,120
132,308
1,842,290
-
-
1,842,290
120,000
-
-
120,000
37,026
-
-
37,026
2,423,870
34,188
98,120
2,556,178
224,059
(21,573)
25,631
228,117
(13,000)
-
-
(13,000)
73
(13,000)
211,059
- - (13,000)
(21,573) 25,631 215,117
2,331,951 53,903 - 2,385,854
$ 2.543.010 $ 32.330 $ 25.631 $ 2.600.971
CITY OF SCHERTZ, TEXAS
COMBINING STATEMENTS OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE
DISCRETELY PRESENTED COMPONENT UNITS (CONTINUED)
FOR THE YEAR ENDED SEPTEMBER 30, 2009
Net Change in Fund Balance
Amounts reported in the statement of activities are
different because:
The issuance of long -term debt provides current
financial resouces to governmental funds, which the
repayment of the principal of long -term debt consumes
the current financial resources of governmental
funds. Neither transaction, however has any affect
on net assets. This amount is the net effect of these
differences in the treatment of long -term debt and
related items.
Principal Repayments
Amortization of Bond Issue Costs
Contribution to Primary Government of Construction
in Progress recognized in Prior Year
Some expenses reported in the Statement of Activities
do not require the use of current financial resources
and, therefore, are not reported as expenditures in
the funds (Accrued Compensated Absences)
Change in Net Assets
Change in Net Assets is presented on pages 16 -17.
Schertz
The
Economic
Library
Parks and
Development
Advisory
Recreation
Corporation
Board
Foundation Total
$ 211,059
$ (21,573)
$ 25,631 $ 215,117
74
120,000 - - 120,000
(1,167) - - (1,167)
(3,750,962) - - (3,750,962)
(7,836) - - (7,836)
$ (3.428.906) $ (21.573) $ 25.631 $ (3.424.848)
STATISTICAL SECTION
This part of the City of Schertz's 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 City's overall financial health.
Financial Trends (Tables I through 4)
Net Assets by Component
Change in Net Assets
Fund Balances, Governmental Funds
Changes in Fund Balances, Governmental Funds
These schedules contain trend information to help reader understand how the City's
financial performance and well -being have changed over time.
Revenue Capacity (Tables 5 through 12)
Tax Revenues by Source, Governmental Funds
Total Water and Sewer Consumption and Rates
Principal Water and Sewer Consumers
Assessed Value and Estimated Actual Value of Taxable Property
Direct and Overlapping Property Tax Rates
Principal Property Taxpayers
Property Tax Levies and Collections
Assessed Value — ACT TP
These schedules contain information to help readers assess the factors affecting the City's
ability to generate its property and sales tax.
Debt Capacity (Tables 13 through 17)
Ratios of Outstanding Debt by Type
Ratios of General Bonded Debt Outstanding
Direct and Overlapping Governmental Activities Debt
Debt Margin Information
Pledged Revenue Coverage
These schedules present 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.
Demographic and Economic Information (Tables 18 through 19)
Demographic and Economic Statistics
Principal Employers
These schedules offer demographic and economic indicators to help the reader understand
how the City's financial activities take place and to help make comparisons over time and
with other governments.
Operating Information (Tables 20 through 22)
Full -time Equivalent City Government Employees by Function
Operating Indicators by Function /Program
Capital Asset Statistics by Function /Program
These schedules contain information about the City's operations and resources to help the
reader understand how the City's financial information relates to the services the City
provides and the activities itperforms.
75
CITY OF SCHERTZ, TEXAS
NET ASSETS, BY COMPONENT
LAST SEVEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
Governmental Activities
Invested in Capital Assets,
Net of Related Debt
Restricted
Unrestricted
Total Governmental Activities
Net Assets
Business -Type Activities
Invested in Capital Assets,
Net of Related Debt
Restricted
Unrestricted
Total Business -Type Activities
Net Assets
Primary Government
Invested in Capital Assets,
Net of Related Debt
Restricted
Unrestricted
Total Primary Government Net Assets
Fiscal Year
2003 2004 2005 2006
$ 11,380,173 $ 16,228,134 $ 17,699,797 $ 13,257,031
491,313 7,037,607 4,813,496 15,888,549
7,448,061 985,750 6,957,173 8,759,630
S 19.319.547 S 24.251.491 S 29.470.466 S 37.905.210
$ 21,806,626 $ 22,901,982 $ 24,970,976 $ 24,783,839
1,384,083 1,010,662 428,712 1,253,711
5,294,283 3,988,006 5,377,968 9,879,126
S 28.484.992 S 27.900.650 S 30.777.656 S 35.916.676
$ 33,186,799 $ 39,130,116 $ 42,670,773 $ 38,040,870
1,875,396 8,048,269 5,242,208 17,142,260
12,742,344 4,973,756 12,335,141 18,638,756
S 47.804.539 S 52.152.141 S 60.248.122 S 73.821.886
NOTE: Financial data prior to fiscal year 2003 was not available.
76
Fiscal Year
2007 2008 2009
$ 32,932,355 $ 44,206,232 $ 57,324,482
663,973 1,058,514 1,170,786
12,720,293 9,092,711 2,017,577
$ 46.316.621 $ 54.357.457 $ 60.512.845
$ 18,788,933 $ 41,350,184 $ 50,047,301
1,995,213 - -
23,658,181 10,286,447 3,633,244
$ 44.442.327 $ 51.636.631 $ 53.680.545
$ 51,721,288 $ 85,556,416 $ 107,371,783
2,659,186 1,058,514 1,170,786
36,378,474 19,379,158 5,650,821
$ 90.758.948 $ 105.994.088 $ 114.193.390
77
TABLE 1
CITY OF SCHERTZ, TEXAS
CHANGE IN NET ASSETS
LAST SEVEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
Fiscal Year
2003 2004 2005 2006
Expenses
Governmental Activities
General Government $ 2,630,450
Public Safety 3,705,722
Streets and Parks 1,182,993
Health 156,927
Culture and Recreation 451,215
Interest and Other Fees 499,011
Total Governmental Activities Expenses 8,626,318
Business -Type Activities
$ 2,873,573
4,586,498
1,019,101
192,506
310,013
707,090
9,688,781
$ 3,612,084
5,558,596
1,134,281
221,950
339,124
862,744
11,728,779
$ 3,957,693
6,403,122
1,240,956
231,149
396,078
823,818
13,052,816
Water and Sewer
8,300,590
8,302,505
8,937,553
9,821,823
EMS
2,248,651
2,509,858
3,789,791
3,474,249
Total Business -Type Activities
10,549,241
10,812,363
12,727,344
13,296,072
Total Primary Government Expenses
S 19.175.559
S 20.501.144
S 24.456.123
S 26.348.888
Program Revenues
Governmental Activities
Charges for Service:
General Government
Public Safety
Streets and Parks
Health
Culture and Recreation
Operating Grants and Contributions
Capital Grants and Contributions
Total Governmental Aactivities
Program Revenues
Business -Type Activities
Charges for Service:
Water and Sewer
EMS
Capital Grants and Contributions
Total Business -Type Activities
Program Revenues
Total Primary Government
Program Revenues
$ 1,461,361 $ 1,381,802
1,033,713
1,118,241
34,248
203,579
117,983
36,095
155,644
180,707
2,788,821
2,280,629
-
2,153,213
$ 1,575,236
1,475,618
141,523
44,611
146,429
1,789,763
3,808,133
$ 1,310,142
1,684,786
143,254
44,178
149,225
1,567,164
5,382,779
5,591,770
7,354,266
8,981,313
10,281,528
8,135,299
7,534,841
9,308,362
11,223,658
2,014,126
1,723,611
3,443,429
3,904,818
279,913
1,045,334
2,055,366
3,148,100
10,429,338
S 16.021.108
10,303,786
S 17.658.052
NOTE: Financial data prior to fiscal year 2003 was not available.
78
14,807,157
S 23.788.470
18,276,576
S 28.558.104
Fiscal Year
2007 2008 2009
$ 5,603,855
$ 7,305,112
$ 7,695,768
5,920,046
7,093,301
7,697,131
2,702,102
3,177,145
3,815,342
272,730
306,764
360,604
450,974
681,440
800,305
1,412,066
1,982,984
1,780,791
16,361,773
20,546,746
22,149,941
10,995,554
13,424,086
9,502,039
12,379,584
13,568,065
5,114,911
2,976,112
3,365,544
14,616,950
15,355,696
16,933,609
$ 30.978.723
$ 35.902.442
$ 39.083.550
$ 3,123,184
$ 1,968,046
$ 2,045,321
1,307,295
1,760,063
2,026,108
196,436
170,872
213,758
33,148
37,096
28,875
201,779
210,311
207,643
493,281
526,839
797,659
5,640,431
8,750,859
6,184,328
10,995,554
13,424,086
11,503,692
13,007,618 13,620,440 14,668,137
5,017,343 3,150,428 2,889,518
2,755,376 5,190,039 2,241,726
20,780,337 21,960,907 19,799,381
$ 31.775.891 $ 35.384.993 $ 31.303.073
Wei
TABLE 2
CITY OF SCHERTZ, TEXAS
CHANGE IN NET ASSETS (CONTINUED)
LAST SEVEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
Fiscal Year
2003 2004 2005 2006
Net (Expenses) Revenue
Governmental Activities $ (3,034,548) $ (2,334,515) $ (2,747,466) $ (2,771,288)
Business -Type Activities (119,903) (508,577) 2,079,813 4,980,504
Total Primary Government Net Expenses S (3.154.451) S (2.843.0921 S (667.6531 S 2.209.216
Governmental Revenues and Other
Changes in Net Assets
Governmental Activities
Taxes:
Ad Valorem
Sales
Franchise Fees
Hotel /Motel
Mixed Drink
Bingo
Unrestricted Investment Earnings
Gain Sale of Capital Asset
Miscellaneous
Transfers
Total Governmental Activities
Business -Type Activities
Interest and Investment Earnings
Gain Sale of Capital Asset
Miscellaneous
Transfers
Total Business -Type Activities
Total Primary Government
Changes In Net Assets
Government Activities
Business -Type Activities
Total Primary Government
$ 3,984,262
$ 4,410,567
$ 4,908,108
$ 5,705,805
2,035,655
1,703,994
2,227,282
3,136,970
671,009
659,847
786,298
961,462
43,177
37,688
42,982
202,108
4,243
5,064
6,437
20,068
4,528
4,749
4,946
5,124
93,690
114,323
356,080
552,091
16,028
58,770
83,337
112,306
410,802
584,733
199,123
510,098
7,263,394
7,579,735
8,614,593
11,206,032
94,731
158,372
(410,802)
(157,699)
S 7.105.695
$ 4,228,846
(277,602)
$ 3.951.244
61,025
327,900
120,043
(584,733)
(75,765)
S 7.503.970
$ 5,245,220
(584,342)
S 4.660.878
NOTE: Financial data prior to fiscal year 2003 was not available.
80
170,610
177,554
(199,123)
149,041
S 8.763.634
$ 5,867,127
2,228,854
S 8.095.981
473,205
195,409
(510,098)
158,516
S 11.364.548
$ 8,434,744
5,139,020
S 13.573.764
Fiscal Year
2007 2008 2009
$ (5,366,219) $ (7,122,660) $(10,646,249)
6,163,387 6,605,211 2,865,772
$ 797.168 $ (517.4491 $ (7.780.4771
$ 7,309,127
$ 7,841,928
$ 8,980,102
4,016,381
4,117,173
4,011,855
1,004,116
1,240,642
1,462,199
259,176
273,558
305,073
29,451
32,364
31,790
6,781
4,751
5,105
1,453,645
1,310,310
339,403
-
23,706
17,714
923,574
319,064
587,789
(1,224,621)
-
1,060,607
13,777,630
15,163,496
16,801,637
976,595
409,972
128,233
-
57,527
(94,978)
161,048
121,594
205,494
1,224,621
-
(1,060,607)
2,362,264
589,093
(821,858)
16.139.894
S 15.752.589
S 15.979.779
$ 8,411,411
$ 8,040,836
$ 6,155,388
8,525,651
7,194,304
2,043,914
16.937.062
15.235.140
S 8.199.302
81
TABLE 2 (Continued)
GENERAL FUND
Reserved
Unreserved
CITY OF SCHERTZ, TEXAS
FUND BALANCES - GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
Fiscal Year
2000 2001 2002 2003
$ 58,232 $ 163,210 $ 122,355 $ -
3,015,959 3,260,866 2,863,146 5,499,836
TOTAL GENERAL FUND $
3,074,191
$ 3,424,076
$ 2,985,501
$ 5,499,836
ALL OTHER GOVERNMENTAL FUNDS
Reserved $
105,019
$ 156,200
$ 299,074
$ 491,313
Unreserved, Reported In:
Special Revenue Funds
659,930
886,961
740,647
665,281
Capital Project Funds
1,087,077
4,632,762
1,939,678
1,212,118
Total All Other Governmental Funds $
1,852,026
$ 5,675,923
$ 2,979,399
$ 2,368,712
NOTE: 2008 has been restated to reflect prior period adjustments (see Note 13).
82
TABLE 3
Fiscal Year
2004
2005
2006
2007
2008 (Restated)
2009
$ 65,551
$ 10,571
$ 232,555
$ 269,806
$ 326,993
$ 519,096
4,319,428
4,864,647
7,202,709
9,583,890
4,727,032
1,508,497
$ 4,384,979
$ 4,875,218
$ 7,435,264
$ 9,853,696
$ 5,054,025
$ 2,027,593
$ 414,357
$ 590,007
$ 690,830
$ 556,884
$ 700,360
$ 636,203
794,729
660,151
871,305
1,276,891
1,084,568
594,816
8,792,947
5,135,834
15,134,814
17,612,092
17,448,323
14,342,553
$ 10,002,033
$ 6,385,992
$ 16,696,949
$ 19,445,867
$ 19,233,251
$ 15,573,572
83
CITY OF SCHERTZ, TEXAS
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
REVENUES
Taxes
Permits and Fees
Service Fees
Fines and Fees
Intergovernmental
Other Revenue
TOTAL REVENUES
EXPENDITURES
General Government
Public Safety
Streets and Parks
Health
Culture and Recreation
Economic Development
Management Services
Capital Outlay
Debt Service:
Principal
Interest and Fiscal Charges
Bond Issue Costs
TOTAL EXPENDITURES
Excess (Deficiency) of Revenues
Over (Under) Expenditures
OTHER FINANCING
SOURCES (USES)
Bonds Issued
Premium on Bond Issue
Discount on Bond Issue
Tax Notes Issued
Capital Lease
Transfers In
Transfers (Out)
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCE
Debt Service as a percentage of
Noncapital Expenditures
Fiscal Year
2000 2001 2002 2003
$ 4,088,491
$ 4,452,964
$ 5,305,902
$ 6,747,330
731,488
620,652
663,682
941,515
626,464
659,145
883,126
944,506
444,331
749,201
538,831
646,613
280,026
186,382
45,362
2,003,743
422,700
368,260
877,544
287,865
6,593,500
7,036,604
8,314,447
11,571,572
1,558,650
1,792,396
2,735,142
2,554,675
2,212,924
2,561,055
2,963,924
3,530,470
793,700
627,110
689,150
675,687
155,814
175,048
120,530
156,927
259,848
270,437
328,404
415,834
83,273
98,683
-
-
1,835,461
1,688,451
4,079,385
4,767,695
365,820
257,410
937,000
783,000
302,111
280,774
511,811
508,166
-
-
-
46,272
7,567,601
7,751,364
12,365,346
13,438,726
(974,101) (714,760) (4,050,899) (1,867,154)
4,500,000
3,360,000
- - 400,000 -
598,405 388,542 551,720 467,502
(218,386) - (31,156) (56,700)
380,019 4,888,542 920,564 3,770,802
S (594.0821 S 4.173.782 S (3.130.3351 S 1.903.648
11.7% 8.9% 17.5% 14.9%
84
TABLE 4
Fiscal Year
2004 2005 2006 2007 2008 2009
$ 7,322,727
$ 8,569,435
$ 10,587,264
$ 13,083,505
$ 13,524,472
$ 14,780,663
852,577
1,421,575
1,475,619
1,062,054
992,953
822,105
793,096
872,286
1,820,940
1,807,098
1,592,072
1,904,703
842,322
915,704
1,157,480
1,397,101
1,387,677
1,517,821
1,710,277
956,791
19,278
153,349
526,839
797,659
490,266
659,430
710,580
2,460,832
1,752,254
1,025,103
12,011,265
13,395,221
15,771,161
19,963,939
19,776,267
20,848,054
2,772,024
3,471,560
3,817,778
5,389,340
11,607,551
6,448,135
3,833,243
4,542,384
5,020,684
5,665,671
6,638,352
7,235,501
942,942
1,043,501
1,162,541
1,392,923
1,545,386
1,655,204
181,074
208,499
216,655
263,918
295,156
348,448
298,179
325,498
384,127
439,767
667,995
786,860
3,827,879
4,360,483
6,127,735
5,504,679
10,281,603
14,963,950
1,233,000
1,236,000
1,155,000
1,458,000
1,910,043
4,696,928
609,522
884,069
803,664
1,377,961
1,620,178
1,950,358
111,802
-
165,125
52,300
122,290
191,066
13,809,665
16,071,994
18,853,309
21,544,559
34,688,554
38,276,450
(1,798,400) (2,676,773) (3,082,148) (1,580,620) (14,912,287) (17,428,396)
7,750,000 - 15,000,000 8,076,733 9,900,000 9,681,678
- - 123,057 - - -
(17,869) - - - - -
- - 319,996 (104,142) - -
2,275,896 583,126 529,598 354,150 593,294 2,778,593
(1,691,163) (384,003) (19,500) (1,578,771) (593,294) (1,717,986)
8,316,864 199,123 15,953,151 6,747,970 9,900,000 10,742,285
$ 6.518.464 $ (2.477.6501 $ 12.871.003 $ 5.167.350 $ (5.0122871 $ (6.686.1111
18.5% 18.1% 15.4% 18.2% 15.0% 29.3%
85
CITY OF SCHERTZ, TEXAS
TAX REVENUE BY SOURCE — GOVERNMENTAL FUNDS
LAST SEVEN FISCAL YEARS
TABLE 5
Fiscal
Mixed
Total
Year
Property
Sales & Use
Franchise
Beverage
Bingo
Occupancy
Revenue
2009
$8,964,642
$ 4,011,855
$1,462,199
$ 31,789
$ 5,105
$ 305,073
$ 14,780,663
2008
7,855,984
4,117,173
1,240,642
32,364
4,751
273,558
13,524,472
2007
7,767,600
4,016,381
1,004,116
29,451
6,781
259,176
13,083,505
2006
6,261,532
3,136,970
961,462
20,068
5,124
202,108
10,587,264
2005
5,501,490
2,227,282
786,298
6,437
4,946
42,982
8,569,435
2004
4,911,385
1,703,994
659,847
5,064
4,749
37,688
7,322,727
2003
3,988,718
2,035,655
671,009
4,243
4,528
43,177
6,747,330
*Property tax is the largest revenue source of the City.
NOTE: Financial data prior to fiscal year 2003 was not available.
86
CITY OF SCHERTZ, TEXAS
TOTAL WATER AND SEWER CONSUMPTION AND RATES
LAST TEN FISCAL YEARS
(UNAUDITED)
Fiscal
Year
Ended
September 30,
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
Total
Water & Sewer
Consumption
$ 15,115,679
8,557,792
6,145,081
7,142,304
5,287,665
4,894,003
4,941,716
3,774,089
3,234,262
2,684,968
87
Water &
Sewer
Base Rate
$ 18.94
15.94
15.94
15.94
15.94
13.70
13.70
11.70
7.70
3.70
TABLE 6
Water & Sewer
Rate Per
1,000 Gallons
$ 2.16
1.92
1.72
1.69
1.52
1.47
1.47
1.40
1.25
1.25
CITY OF SCHERTZ, TEXAS
PRINCIPAL WATER AND SEWER CONSUMERS
CURRENT YEAR AND NINE YEARS AGO
(UNAUDITED)
TABLE 7
Note: Data from nine years ago was not available.
88
2009
2000
Total
Percentage of
Total
Percentage of
Water
Total City
Water
Total City
Consumption
Water
Consumption
Water
TAXPAYERS
(In Hundreds)
Rank
Consumption
(In Hundreds)
Rank
Consumption
AOH- Vantage at Schertz, LLC
135,443
1
0.90%
-
Beck Readymix
132,329
2
0.88%
-
Wal -Mart Supercenters
101,686
3
0.67%
-
Riata Land LTD
80,168
4
0.53%
-
Pecan Grove Investments
61,892
5
0.41%
-
Prologis Trust
56,458
6
0.37%
57,623
5
2.15%
Landscape of Texas
51,167
7
0.34%
56,125
6
2.09%
Lowe's Home Improvement
46,920
8
0.31%
-
Legacy Oaks Apartments
43,155
9
0.29%
-
Val Verde Apartments
42,051
10
0.28%
-
Samuel Clemens High School
-
0.00%
116,666
2
4.35%
Sebastian Apartments
-
0.00%
1,031,567
1
38.42%
North American Composites
-
0.00%
104,245
3
3.88%
Holbrook, Jack W.
-
0.00%
91,779
4
3.42%
Riedel's Apartments
-
0.00%
38,839
7
1.45%
Samuel Clemens Stadium
-
0.00%
35,545
8
1.32%
Autumn Winds /Sterling Care
-
0.00%
27,725
9
1.03%
Denny's 46771
-
0.00%
24,731
10
0.92%
TOTAL
751,269
4.97%
1,584,845
59.03%
Total City Water Consumption
15,115,679
2,684,968
Note: Data from nine years ago was not available.
88
CITY OF SCHERTZ, TEXAS
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
(UNAUDITED)
TABLE 8
Fiscal
Year
Ended
September 30,
Total Taxable
Assessed Value
Total Direct
Tax Rate
2009
$ 1,891,409,716
0.4090%
2008
1,939,016,982
0.4090%
2007
1,423,205,878
0.4090%
2006
1,397,297,729
0.3977%
2005
1,292,156,353
0.3760%
2004
1,139,992,157
0.3825%
2003
1,024,412,713
0.3825%
2002
827,142,321
0.3825%
2001
731,305,433
0.3405%
2000
636,157,284
0.3455%
Source: Guadalupe County Tax Office
NOTES: Property in the City of Schertz is reassessed every year at estimated actual value. For this reason, assessed
value is equal to estimated actual value. Tax rates are per $100 of assessed value.
Property tax is the largest revenue source of the City.
.
CITY OF SCHERTZ, TEXAS
DIRECT AND OVERLAPPING PROPERTY TAX RATES
LAST TEN FISCAL YEARS
(UNAUDITED)
TABLE 9
Source: Guadalupe County Tax Office
NOTE: Overlapping rates are those of local and county governments that apply within the City of Schertz. Not all
overlapping rates apply to all City of Schertz property owners.
•i
City Direct Rates
Overlapping Rates
Schertz-
Cibolo-
Fiscal
Basic
Debt
Universal
Guadalupe
County
Year
Rate
Service
Total
City ISD
County
Road
2009
0.2590
0.1500
0.4090
1.3850
0.3295
0.0600
2008
0.2590
0.1500
0.4090
1.3150
0.3295
0.0600
2007
0.2805
0.1512
0.4317
1.6100
0.3481
0.0550
2006
0.3005
0.0972
0.3977
1.7200
0.3531
0.0500
2005
0.2888
0.0872
0.3760
1.7400
0.3531
0.0500
2004
0.2946
0.0879
0.3825
1.7800
0.3654
0.0477
2003
0.3091
0.0734
0.3825
1.7300
0.3668
0.0463
2002
0.3208
0.0617
0.3825
1.7100
0.3499
0.0420
2001
0.3147
0.0258
0.3405
1.6267
0.3193
0.0630
2000
0.3151
0.0304
0.3455
1.4945
0.3417
0.0582
Source: Guadalupe County Tax Office
NOTE: Overlapping rates are those of local and county governments that apply within the City of Schertz. Not all
overlapping rates apply to all City of Schertz property owners.
•i
CITY OF SCHERTZ, TEXAS
PRINCIPAL PROPERTY TAX PAYERS
CURRENT YEAR AND NINE YEARS AGO
(UNAUDITED)
TABLE 10
Source: Guadalupe County Tax Office
91
2009
2000
Percentage
Percentage
of
of
Total City
Total City
Taxable
Taxable
Taxable
Taxable
Assessed
Assessed
Assessed
Assessed
Taxpayer
Value
Rank
Value
Value
Rank
Value
San Antonio MTA LP
$ 23,049,000
1
1.22%
$ -
-
AOH- Vantage at Schertz LLC
16,884,584
2
0.89%
-
-
EM Limited Partnership
15,880,110
3
0.84%
-
-
Sprint Spectrum LP
15,461,600
4
0.82%
-
-
Wal -Mart Real Estate Business Trust
14,529,843
5
0.77%
-
-
H.E.Butt Grocery Co.
11,849,626
6
0.63%
9,411,683
5
1.48%
Eye Care Centers of America Inc.
11,298,734
7
0.60%
-
-
Lowe's Home Center Inc
9,258,951
8
0.49%
-
-
Prologis North American Properties Fund
9,104,240
9
0.48%
6,299,014
7
0.99%
Atlantic Financial Group LTD
8,408,771
10
0.44%
10,386,995
4
1.63%
Sanfilippo John B & Son Inc
-
-
23,818,757
1
3.74%
Dynapac
-
-
14,649,791
2
2.30%
Southwestern Bell Telephone
-
-
11,549,800
3
1.82%
Williams Scotsman Inc
-
-
6,707,916
6
1.05%
Gillman Companies
-
-
6,167,411
8
0.97%
C & W Ranches LTD
-
-
6,027,928
9
0.95%
Sycamore Apartment LTD
-
-
5,003,434
10
0.79%
TOTALS
$ 135,725,459
7.18%
$100,022,729
15.72%
TOTAL TAXABLE ASSESSED VALUE
$1,891,409,716
$ 636,157,284
Source: Guadalupe County Tax Office
91
CITY OF SCHERTZ, TEXAS
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
(UNAUDITED)
Source: Guadalupe County Tax Office
92
TABLE 11
Total Collections
To Date
Amount
$ 8,703,978
7,711,714
7,025,936
5,635,302
4,850,582
4,350,309
3,914,968
3,161,434
2,488,597
2,197,171
% of
Levy
98.90%
98.95%
99.68%
99.82%
99.84%
99.77%
99.91%
99.92%
99.94%
99.94%
Collected Within
Fiscal Year
Taxes Levied
Fiscal Year of Levy
Collections In
Ended
for the
% of
Subsequent
September 30,
Fiscal Year
Amount
Levy
Years
2009
$ 8,800,927
$ 8,703,978
98.90%
$ -
2008
7,793,405
7,711,714
98.95%
55,103
2007
7,048,818
6,957,827
98.71%
68,109
2006
5,645,611
5,576,559
98.78%
58,743
2005
4,858,508
4,796,062
98.71%
54,520
2004
4,360,470
4,252,349
97.52%
97,960
2003
3,918,379
3,881,204
99.05%
33,764
2002
3,163,819
3,107,209
98.21%
54,225
2001
2,490,095
2,459,900
98.79%
28,697
2000
2,198,381
2,153,542
97.96%
43,629
Source: Guadalupe County Tax Office
92
TABLE 11
Total Collections
To Date
Amount
$ 8,703,978
7,711,714
7,025,936
5,635,302
4,850,582
4,350,309
3,914,968
3,161,434
2,488,597
2,197,171
% of
Levy
98.90%
98.95%
99.68%
99.82%
99.84%
99.77%
99.91%
99.92%
99.94%
99.94%
CITY OF SCHERTZ, TEXAS
ASSESSED VALUE
LAST SIX FISCAL YEARS
Fiscal
0.4090
1,939,016,982
0.4090
2,195,057,857
0.4317
Year
Taxable
1,589,745,469
0.3760
1,433,017,426
0.3825
Ended
Value
Residential
Commercial
Tax - Exempt
Other
September 30,
January 1
Property
Property
Property
Property
2009
2008
S 1,147,403,041
S 656,276,237
S (86,062,834)
S 173,793,272
2008
2007
1,074,280,935
728,323,513
(125,049,238)
261,461,772
2007
2006
1,392,720,883
423,317,359
(21,195,965)
400,215,580
2006
2005
1,201,285,889
344,827,561
(16,046,859)
340,912,535
2005
2004
1,068,235,628
262,553,018
(11,646,100)
270,602,923
2004
2003
985,774,636
248,629,342
(10,777,023)
209,390,471
NOTE: Financial data prior to fiscal year 2004 was not available.
93
TABLE 12
Total Taxable Total
Assessed Direct
Value* Tax Rate
S 1,891,409,716
0.4090
1,939,016,982
0.4090
2,195,057,857
0.4317
1,870,979,126
0.3977
1,589,745,469
0.3760
1,433,017,426
0.3825
Fiscal
Year
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
CITY OF SCHERTZ, TEXAS
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
(UNAUDITED)
Governmental Activities
General
Certificates
Obligation
of
Bonds
Obligation
-
215,854 6,645,000
$ 38,485,000
$12,373,850 $
32,790,000
13,158,700
23,950,000
14,032,893
18,740,000
13,560,000
4,045,000
14,250,000
4,456,000
14,785,000
4,844,000
7,600,000
5,222,000
4,375,000
5,129,000
4,585,000
5,321,410
150,000
Tax
Notes
Business -Type Activities
Public
Capital Revenue Facility
Lease Bonds Loan
-
$ - $ 5,805,000
$ 7,000
-
107,078 6,230,000
14,000
-
215,854 6,645,000
21,000
-
319,996 7,055,000
28,000
160,000
- 7,445,000
34,000
450,000
- 4,625,000
40,000
730,000
- 4,990,000
46,000
1,000,000
- 5,275,000
52,000
-
- 5,550,000
57,000
-
- 785,000
62,000
NOTES: a Details regarding the City's outstanding debt can be found in Note 8 to the current financial statements.
b. The City issued $9,500, 000 ofnew general obligation bonds in 2009.
c. See Table 18 for personal income and population data for the City. These ratios are calculated using
personal income and population for the prior calendar year.
94
TABLE 13
Busines -Type Activities
Certificates
Total
Refunding
of Note
Primary
Percent of
*Per
Bonds
Obligation Payable
Government
Gross Income
Capita
$ -
$ 6,571,150 $ -
$63,242,000
6.92%
1,932
-
6,976,300 -
59,276,078
7.06%
1,849
-
7,237,107 -
52,101,854
5.88%
1,639
-
- -
39,702,996
1.56%
1,262
-
- -
25,934,000
1.35%
968
64,000
- -
24,420,000
2.43%
923
126,000
- -
18,336,000
2.01%
764
193,000
60,000 -
16,177,000
1.93%
703
211,000
120,000 34,564
15,686,564
1.95%
713
543,590
130,000 66,670
7,058,670
1.19%
378
95
CITY OF SCHERTZ, TEXAS
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
LAST TEN FISCAL YEARS
(UNAUDITED)
TABLE 14
NOTE: Details regarding the City's outstanding debt can be found in Note 8 to the current financial statements. See
Table 5 for the City's property tax value data. City population data can be found in Table 18.
o
General Bonded Debt Outstanding
Percentage of
General
Certificates
Actual Taxable
Fiscal
Obligation
of
Tax
Value of
Per
Year
Bonds
Obligation
Notes
Total
Property
Capita
2009
$ 38,485,000
$ 12,373,850
$ -
$50,858,850
2.69%
1,554
2008
32,790,000
13,158,700
-
45,948,700
2.37%
1,433
2007
23,950,000
21,271,000
-
45,221,000
2.06%
1,423
2006
18,740,000
13,560,000
-
32,300,000
1.73%
1,027
2005
4,045,000
14,250,000
160,000
18,455,000
1.16%
689
2004
4,456,000
14,785,000
450,000
19,691,000
1.37%
744
2003
4,844,000
7,600,000
730,000
13,174,000
1.29%
549
2002
5,222,000
4,375,000
1,000,000
10,597,000
1.28%
461
2001
5,129,000
4,585,000
-
9,714,000
1.33%
442
2000
5,321,410
150,000
-
5,471,410
0.86%
293
NOTE: Details regarding the City's outstanding debt can be found in Note 8 to the current financial statements. See
Table 5 for the City's property tax value data. City population data can be found in Table 18.
o
CITY OF SCHERTZ, TEXAS
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
(UNAUDITED)
Governmental Unit
Debt repaid with property taxes:
Debt
Outstanding
Estimated
Percentage
Applicable*
TABLE 15
Estimated
Share of
Overlapping
Debt
Alamo CCD
$ 537,313,778
0.08%
$ 429,851
Bexar County
716,410,000
0.08%
573,128
Bexar County Hospital District
559,700,000
0.08%
447,760
Comal County
45,760,000
2.71%
1,240,096
ComalISD
543,984,141
2.68%
14,578,775
Guadalupe County
19,980,000
20.58%
4,111,884
San Antonio River Authority
42,015,000
0.08%
33,612
Schertz - Cibolo- Universal
285,330,515
56.48%
161,154,675
Subtotal, Overlapping Debt
City Governmental Activities Direct Debt
TOTAL NET OVERLAPPING DEBT
182,569,781
49,233,593
$ 231,803,374
NOTES: The overlapping debt was received from the Municipal Advisory Council of Texas. Details regarding the City's
outstanding debt can be found in Note 8 to the current financial statements.
97
CITY OF SCHERTZ, TEXAS
DEBT MARGIN INFORMATION
LAST TEN FISCAL YEARS
(UNAUDITED)
Assessed Value, 2008 Tax Roll
Debt Limit - Texas statues do not provide a
legal debt limit for cities; however, through
accepted practice a practical "economic" debt
limit is considered to be 10% of the assessed value.
Amount of Applicable Debt:
Bonded Debt - General Obligation Bonds
Less Debt Service Fund Balance
DEBT MARGIN
Total Net Debt as a Percentage
of Debt Margin
$1,891,409,716
$ 189,140,972
$ 50,858,850
(444,369) 50,414,481
$ 138,726,491
36.34%
98
Fiscal Year
2000
2001
2002
2003
Assessed Value
$ 636,157,284
$ 731,305,433 $
827,142,321
$1,024,412,713
Debt Margin
$ 63,615,728
$ 73,130,543 $
82,714,232
$ 102,441,271
Total Net Debt Applicable to Limit
5,216,391
4,972,800
4,922,926
4,520,834
Total Debt Margin
$ 58,399,337
$ 68,157,743 $
77,791,306
$ 97,920,437
98
TABLE 16
Fiscal Year
2004 2005 2006 2007 2008 2009
$1,139,992,157 $ 1,292,156,383 $ 1,397,297,729 $ 1,423,205,878 $ 1,939,016,982 $ 1,891,409,716
$ 113,999,216 $ 129,215,638
4,208,707 3,781,530
$ 109,790,509 $ 125,434,108
$ 139,729,773 $ 142,320,588
18,392,261 23,488,500
$ 121,337,512 $ ]18,832,088
e
$ 193,901,698 $ 189,140,972
45,466,903 50,414,481
$ 148,434,795 $ 138,726,491
CITY OF SCHERTZ, TEXAS
PLEDGED REVENUE COVERAGE
LAST TEN FISCAL YEARS
(UNAUDITED)
TABLE 17
NOTE: Details regarding the City's outstanding debt can be found in Note 8 to the current financial
statements. Operating expenses do not include depreciation, interest, amortization or joint venture
expenses.
100
Water Revenue Bonds
Utility
Less:
Net
Debt Service
Fiscal
Service
Operating
Available
Year
Charges
Expenses
Revenue
Principal
Interest
Coverage
2009
$14,533,390
$ 9,973,940
$ 4,559,450
$ 685,400
$ 532,534
3.74%
2008
13,620,440
9,040,264
4,580,176
665,400
558,569
3.74%
2007
13,476,288
7,896,319
5,579,969
645,800
501,397
4.86%
2006
11,289,876
6,955,000
4,334,876
390,000
354,965
5.82%
2005
9,381,042
6,136,390
3,244,652
380,000
213,290
5.47%
2004
7,583,136
5,653,184
1,929,952
365,000
226,795
3.26%
2003
8,228,571
5,359,309
2,869,262
285,000
236,913
5.50%
2002
4,663,584
3,061,327
1,602,257
275,000
246,263
3.07%
2001
4,260,109
3,115,427
1,144,682
35,000
55,750
12.61%
2000
3,958,054
2,717,774
1,240,280
35,000
58,375
13.28%
NOTE: Details regarding the City's outstanding debt can be found in Note 8 to the current financial
statements. Operating expenses do not include depreciation, interest, amortization or joint venture
expenses.
100
Year
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
Population
32,730
32,057
31,788
31,452
26,780
26,463
24,000
23,000
22,000
18,694
CITY OF SCHERTZ, TEXAS
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
(UNAUDITED)
Personal
Income
$ 913,919,790
839,701,058
885,836,196
2,543,051,460
1,926,713,880
1,005,594,000
912,000,000
838,994,000
802,516,000
593,870,992
TABLE 18
Unemployment
Rate
5.1%
5.0%
4.0%
4.4%
3.6%
4.1%
2.4%
2.4%
2.4%
3.9%
Sources: Population, personal income, median age and education level information provided by City Economic
Development Corporation. School enrollment provided by Schertz- Cibolo - Universal City Independent
School District. Unemployment data provided by the Texas Workforce Commission.
101
Education
Per Capita
Level In
Personal
Median
Years of
School
Income
Age
Schooling
Enrollment
$ 27,923
36.5
13.9
11,700
26,194
35.1
14.0
10,991
27,867
36.3
14.0
9,470
80,855
36.1
18.0
8,380
71,946
35.1
15.9
7,712
38,000
32.7
15.0
7,257
38,000
35.1
14.6
7,245
36,478
35.1
14.6
6,440
36,478
35.1
14.6
6,440
31,768
35.1
14.6
6,186
Unemployment
Rate
5.1%
5.0%
4.0%
4.4%
3.6%
4.1%
2.4%
2.4%
2.4%
3.9%
Sources: Population, personal income, median age and education level information provided by City Economic
Development Corporation. School enrollment provided by Schertz- Cibolo - Universal City Independent
School District. Unemployment data provided by the Texas Workforce Commission.
101
CITY OF SCHERTZ, TEXAS
TOP TEN PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO
(UNAUDITED)
TABLE 19
Source: City Economic Development Corporation
Note: Nine year principal employer history is not available.
102
2009
2000
Percentage
Percentage
of Total City
of Total City
Employer
Employees
Employment
Employees
Employment
Schertz /Cibolo /UC ISD
1,400
4.28%
N/A
N/A
Brandt Engineering
400
1.22%
N/A
N/A
City of Schertz
325
0.99%
N/A
N/A
EyeCare Centers of America
320
0.98%
N/A
N/A
H.E.B. Grocery Co.
300
0.92%
N/A
N/A
Lowe's
250
0.76%
N/A
N/A
Republic National Distributing
220
0.67%
N/A
N/A
Valero Energy
200
0.61%
N/A
N/A
Theis Distributing Co.
125
0.38%
N/A
N/A
Federal Express Freight
120
0.37%
N/A
N/A
Manco
120
0.37%
N/A
N/A
Source: City Economic Development Corporation
Note: Nine year principal employer history is not available.
102
CITY OF SCHERTZ, TEXAS
FULL -TIME EQUIVALENT CITY GOVERNMENTAL EMPLOYEES BY FUNCTION
LAST EIGHT FISCAL YEARS
(UNAUDITED)
TABLE 20
Full-Time Equivalent Employees as of September 30,
Function 2002 2003 2004 2005 2006 2007 2008 2009
General Government
City Manager
4
3
4
4
3
4
7
7
Court Support
3
3
4
4
4
4
0
0
Municipal Court
2
2
2
2
3.5
5
6
4
Customer Relations
0
0
0
0
0
2
4
4
Planning and Zoning
3
2
2
2
3
4
5
4
Facility Maintenance
5
5
6
6
6.5
9
11
10
City Secretary
2
2
2
2
2
2
2
2
Media Relations
1
1
1
1
1
2
3
3
Records Management
0
0
1
15
2
2
3
3
Engineer
0
0
0
0
0
1
3
1
GIS
0
0
0
0
0
0
0
4
Information Tecynology
1
2
2
2
3
3
3
3
Human Resources
1
2
2
2
2
2
3
3
Finance
4
4
5
5
5
5
6
6
Purchasing
0
0
0
0
0
1
2
2
Fleet Service
2
2
2
3
3
3
3
3
Public Safetv
Police
44.5
46.5
50.5
53.5
62
66
69
70
Fire
24
24
30
31
32
32
32
32
Inspections
5
6
6
6
6
8
8
7
Marshal Services
0
0
0
0
0
0
0
5
Health
Animal Control 5 5.5 5 5 5 5 6 6
Parks and Culture
Parks
4
5
6
7
7
9
8
8
Pools
7.5
8
14.5
15
12.5
12.5
0
0
Civic and Community Centers
0
0
0
0
0
1
1
1
Library
7.5
7
8.5
8.5
9.5
9.5
14
15
Public Environment
Streets
9
9
13
12
11
11
13
13
Public Works
Public Works
6
6
6
6
6
6
6
6
Business Office
11
12
11
9
10
9
10
10
Water and Sewer
11
14
15
15
17
19
14
16
Drainage
0
0
0
0
0
5
6
7
EMS
27
27.5
28
32
32.5
33.5
50
54
Economic Development
2
1
2
2
3
3
3
4
TOTAL
191.5
199 5
228 5
250
251 5
278 5
301
313
Source: City Adopted Budgets
NOTES: Less than 10 years of data is available. The information will be presented on a prospective basis.
103
CITY OF SCHERTZ, TEXAS
OPERATING INDICATORS BY FUNCTION /PROGRAM
LAST TEN FISCAL YEARS
(UNAUDITED)
Fiscal Year
Function
2000
2001
2002
2003
General Government
Building Permits Issued
3,716
2,754
2,812
7,119
Police
CFS
N/A
N/A
10,743
11,089
Arrests
N/A
N/A
666
670
Traffic Violations
N/A
N/A
8,863
9,157
Accidents
N/A
N/A
857
875
N/A
N/A
Fire
N/A
N/A
Numer of Rescue /Other Responses
N/A
N/A
1,058
929
Number of Fire Responses
N/A
N/A
76
89
Number of Inspections
N/A
N/A
202
254
Number of Training Classes Conducted
N/A
N/A
87
186
Number of Pre -Plan Inspections
N/A
N/A
N/A
N/A
Marshal Service
Warrants Issued
N/A
N/A
N/A
N/A
Warrants Cleared
N/A
N/A
N/A
N/A
Food Establishment Permits
N/A
N/A
N/A
N/A
Food Establishment Inspection
N/A
N/A
N/A
N/A
Foster /Adoption Inspections
N/A
N/A
N/A
N/A
Parks
Facility Reservations
205
174
178
300
Civic Center
-
-
-
-
Library
Annual Circulation
123,897
131,293
183,467
225,573
Library Visits
98,515
99,541
142,258
162,263
Library Program Attendance
4,946
2,050
3,607
4,328
Registered Users
11,471
5,370
9,320
12,779
Water
New Connections
N/A
545
1,241
439
Water Main Breaks
54
35
21
18
Total Consumption (thousands of gallons)
11,097,642
10,977,327
10,177,465
10,747,349
Daily Average Consumption
(thousands of gallons)
30,827
30,492
28,271
29,854
Peak Daily Consumption
(thousands of gallons)
5,562
6,375
5,616
6,757
Total Customers
6,837
7,103
7,311
8,045
Average Use Per Connection
9,606
8,942
4,682
3,565
Sewer
Total Customers
5,814
6,185
6,511
7,261
Source: Various City Departments
NOTE: Indicators are not available for the police
or EMS function.
104
TABLE 21
Fiscal Year
2004 2005 2006 2007 2008 2009
3,055
3,434
9,948
5,811
2,869
5,181
11,875
12,770
16,642
25,478
37,829
36,319
631
729
526
608
719
873
9,652
11,157
10,487
13,461
18,820
20,452
1,127
1,169
1,192
1,484
1,475
1,491
1,082
1,131
1,216
1,459
978
1,536
90
128
129
103
141
135
301
331
356
302
461
447
213
136
136
694
595
264
N/A
N/A
N/A
N/A
N/A
452
N/A
N/A
N/A
N/A
N/A
5,974
N/A
N/A
N/A
N/A
N/A
3,836
N/A
N/A
N/A
N/A
N/A
134
N/A
N/A
N/A
N/A
N/A
209
N/A
N/A
N/A
N/A
N/A
34
333
294
416
516
983
671
-
-
-
-
-
484
238,602
257,765
276,873
292,909
278,826
263,131
171,811
175,976
181,603
179,630
175,435
188,118
5,170
5,254
5,064
6,680
7,444
10,499
14,492
17,101
19,342
19,595
23,327
20,360
425
425
532
91
1,474
2,024
26
39
46
29
72
72
10,373,621
11,030,621
13,322,380
11,535,927
14,460,239
15,115,679
28,816
30,639
37,007
31,606
39,617
38,550
6,869
6,939
10,540
5,379
5,804
7,520
9,389
9,673
10,118
10,598
10,900
10,198
6,329
5,957
7,060
1,089
6,378
6,913
7,887
8,664
8,990
9,391
6,378
9,974
105
Function
CITY OF SCHERTZ, TEXAS
CAPITAL ASSET STATISTICS BY FUNCTION /PROGRAM
LAST TEN FISCAL YEARS
(UNAUDITED)
Fiscal Year
2000 2001 2002
Police
1
21
26
Stations
1
1
1
Patrol Units
5
8
11
Fire
Stations
1
1
1
Training Facility
1
1
1
Fire Vehicles
6
7
9
Streets
Streeets, paved (miles)
97
100
100
Streets, unpaved (miles)
7
7
9
Sidewalks (miles)
17
17
17
Parks and Recreation
Parks
7
7
7
Playground
65
117
117
Swimming Pools
-
-
-
Baby Pools
-
-
-
Baseball /Softball Diamonds
5
8
8
Soccer Fields
-
-
-
Community Centers
1
1
1
Animal Control
Control Vehicle
-
1
1
Library
Facility
1
1
1
Volumes in Collection
37,610
36,259
39,062
Water
Number of Reservoirs
-
-
-
Number of Pump Stations
-
-
-
Water Mains (Miles)
139
144
149
Sewer
Sanitary Sewers (Miles)
48
51
54
Storm Sewers (Miles)
3
4
4
Source: Various City Departments
NOTES: No Capital Asset indicators are
available for the General Government or EMS function.
106
2003 2004
1
1
21
26
1
1
1
1
11
11
102 102
9 9
17 17
7
7
20
20
1
1
1
1
12
12
1 1
2 2
1 1
41,275 46,961
- 1
- 1
155 159
54 54
4 4
Fiscal Year
2005 2006 2007 2008 2009
1
27
2
1
11
102
9
21
7
20
1
1
12
1
2
1
49,289
1
1
166
54
4
1
34
2
1
12
102
9
32
7
20
1
1
12
1
2
1
52,818
1
1
171
54
4
1
33
2
1
12
107
9
32
7
20
1
1
12
1
3
1
56,282
1
33
2
1
14
122
7
50
7
20
2
2
12
2
3
1
60,650
1
23
2
13
124
7
50
11
20
2
2
12
12
2
3
1
64,400
2
- 5
177
182 188
59
71 78
6
8 9
107
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COMPLIANCE SECTION
108
REPORT ON COMPLIANCE AND INTERNAL CONTROL OVER
FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT A UDITING STANDARDS
The Honorable Mayor and Members of the City Council
City of Schertz, Texas
We have audited the 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 Schertz, Texas, as of and for the year ended September 30, 2009, which collectively comprise the
City of Schertz, Texas, basic financial statements and have issued our report thereon dated
February 22, 2010. We conducted our audit in accordance with generally accepted auditing standards and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City of Schertz's internal control over financial
reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the
financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City of
Schertz's internal control over financial reporting. Accordingly, we do not express an opinion on the
effectiveness of the City of Schertz's internal control over financial reporting.
Our consideration of the internal control over financial reporting was for the limited purpose described in the
preceding paragraph and would not necessarily identify all discrepancies in internal control over financial
reporting that might be significant deficiencies or material weaknesses. However, as discussed below, we
identified certain deficiencies in internal control over financial reporting that we consider to be significant
deficiencies.
A control deficiency exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent or detect misstatements
on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies,
that adversely affects the City of Schertz, Texas's ability to initiate, authorize, record, process, or report
financial data reliably in accordance with generally accepted accounting principles such that there is more
than a remote likelihood that a misstatement of the City of Schertz's financial statements that is more than
inconsequential will not be prevented or detected by the City of Schertz Texas's internal control. We
consider the deficiencies described in the accompanying schedule of findings and responses to be significant
deficiencies in internal control over financial reporting.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in
more than a remote likelihood that a material misstatement of the financial statements will not be prevented
or detected by the City of Schertz, Texas's internal control.
„._
Our consideration of the internal control over financial reporting was for the limited purpose described in the
first paragraph of this section and would not necessarily identify all deficiencies in the internal control that
might be significant deficiencies, and accordingly, would not necessarily disclose all significant deficiencies
that are also considered to be material weaknesses. However, we believe that none of the significant
deficiencies described above is a material weakness.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City of Schertz's financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material affect on the
determination of the financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance or other matters that are required to be reported
under Government Auditing Standards.
We noted certain matters that we reported to management of the City of Schertz, Texas, in a separate letter
dated February 22, 2010.
City of Schertz, Texas's response to the findings identified in our audit is described in the accompanying
schedule of findings and responses. We did not audit the City of Schertz, Texas' response and, accordingly,
we express no opinion on it.
This report is intended solely for the information and use of management, City Council and is not intended to
be and should not be used by anyone other than these specified parties.
PG.
Armstrong, Vaughan & Assoc., P.C.
February 22, 2010
110
CITY OF SCHERTZ, TEXAS
SCHEDULE OF FINDINGS AND RESPONSES
SEPTEMBER 30, 2009
Summary of Auditor's Results
1. The auditor's report expresses an unqualified opinion on the financial statements of the City of
Schertz, Texas
2. Three control deficiencies disclosed during the audit of the financial statements are reported in the
Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based
on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards.
The conditions are significant deficiencies in internal control.
3. No instances of noncompliance material to the financial statements of the City of Schertz, Texas,
were disclosed during the audit.
Findings — Financial Statement Audit
Significant Deficiency:
2009 -01 Compliance with Contracts
Condition: Approved contract invoices are submitted for payment to the Finance Department from the
City Engineering Department. The project tracking and payment system did not track payments
previously made to a contractor which resulted in overpayment and non compliance with the contract
and the contract terms which required the final payment to be made after certification of the completed
contract by the City Engineering Department.
Criteria: The City should implement a system to track compliance with contracts and corresponding
payments made for service of those contracts throughout the project.
Effect: Without adequate procedures for tracking contracts, the city could overpay the contractor and not
comply with the requirements of the contract.
Recommendation: Implement a system that enables the City Engineering Department to track invoices
and payments approved to prevent overpayment of invoices. The project should be marked if there is a
special provision in the contract to withhold payment until the project is completed. Consider having all
contractors submit applications for progress payments.
City Response: For invoices related to construction projects, the City Engineer's Office will only accept
and process invoices for payment that must be in standard format to include:
• Original Contract Price
• Net Change Orders
• Current Contract Price
• Work to be Done including Retainage
• Work to Date
• Amount Retained
• Sub -Total Previous Payments
• Amounts Due This Payment
111
CITY OF SCHERTZ, TEXAS
SCHEDULE OF FINDINGS AND RESPONSES (CONTINUED)
SEPTEMBER 30, 2008
2009 -02 Significant Journal Entries
Condition: Significant adjustments were made to the Financial Statements during the course of the audit
to record capital contributions, transfers of property and disposal of Water /Sewer capital assets, accounts
payable for construction projects, and correction of the interfund receivables and payables.
Criteria: The City should have a procedure for recording year end journal entries.
Effect: The lack of reconciliation procedures did not ensure that the financial statements were materially
correct.
Recommendation: Develop a list of entries that may be considered at year end as part of the closing
process to enable the City to ensure that they have adequately recorded all year end entries. Consider
recording the retainage on construction in progress as the invoices are received.
City Response: The City of Schertz (City) will be preparing a list of potential journal entries for the year
end close to enable them to encompass recording all journal entries required by generally accepted
accounting principles before year end.
2009 -03 Emergency Medical Services Accounts Receivable
Condition: The Emergency Medical Services department is recording the billing, write -offs, payments
and other adjustments in a separate software developed specifically for emergency services. The
payments are recorded by EMS directly to Incode. The charges and write -offs are sent to Finance in a
summary report from the Emergency Services Department and the information is recorded in to Incode
from these supplied reports. The aging report supplied by EMS at year end does not agree with the
balance in Incode at year end. The EMS software system applies the payments and resets the Accounts
Receivable report as if the receivable is no longer outstanding as of the specific cutoff date.
Additionally, the write -offs and adjustments are not properly flowing on the EMS system resulting in a
moving target for the Accounts Receivable at any given point in time.
Criteria: The EMS billing system should accurately record charges, payments, adjustments and provide
accurate reporting information to be transferred to the City's financial system.
Effect: The EMS Accounts Receivable were not accurately reflected on the financial statements of the
City.
Recommendation: Print the Accounts Receivable aging report the last day of the month after all data
entry has been accomplished. Send this report to the Finance Department. Review the current problems
with the EMS software provider to determine how to correct the problem and obtain additional training
on the system. Determine the correct way to record adjustments and write -offs to enable the software to
give the most accurate report.
112
CITY OF SCHERTZ, TEXAS
SCHEDULE OF FINDINGS AND RESPONSES (CONTINUED)
SEPTEMBER 30, 2008
City Response: EMS agrees that what we show for Accounts Receivables does not match that amount as
shown by the Finance Department in INCODE. The reasons for this include normal fluctuations in
patient's accounts balances as we work with insurance companies to obtain payments, accounts being
sent and retrieved from our collections vendor for a variety of reasons, and confusion on our part in
exactly which aging report should have been prepared and when it should have been run and delivered to
Finance. In response to the findings of the City's auditing contractor, the EMS Department is doing the
following:
• We are now printing an Account Receivable report at the end of every month as of close of
business on the last day of business of every month. This report is being saved electronically
and in print in case it is ever needed for historical review.
• We are working with our software vendor to develop a historical report on Account Receivables
that can be used recreate any period when and if needed.
• EMS will be working with the Finance Department monthly to reconcile Accounts Receivables
against charges, cash collections, accounts referred to our collections agency and other revenue
adjustments.
• EMS is reviewing all billing procedures and processes to help clarify the Accounts Receivables
fluctuations that occur due to unusual and customary billing procedures and to develop a
procedures for properly accounting for these fluctuations.
• EMS will implement a software interface for direct exchange of deposits between EMS Billing
software and INCODE and will explore a method to daily report Account Receivable balances
through this same interface.
113
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