CAFR FY 2010-2011CITY OF SCHERTZ, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED SEPTEMBER 30, 2011 OFFICIALS ISSUING REPORT John C. Kessel City Manager Juan F. Santoya Director of Finance
i CITY OF SCHERTZ, TEXAS TABLE OF CONTENTS SEPTEMBER 30, 2011 PAGE INTRODUCTORY SECTION..........................................................................................................
v LETTER OF TRANSMITTAL ........................................................................................................................ vi CITY OFFICIALS.....................................
...................................................................................................... x ORGANIZATIONAL CHART .........................................................................
.............................................. xi 2010 CERTIFICATE OF ACHIEVEMENT....................................................................................................
xi 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 – GOVERNMENTAL FUNDS..............................................................................................................
........ 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..................................................................... 27 NOTES TO BASIC FINANCIAL STATEMENTS......................................................................................
. 29 REQUIRED SUPPLEMENTARY INFORMATION ................................................................................ 52 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
– BUDGET AND ACTUAL ........................................................................................................................... 53 NOTES TO SCHEDULE OF OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL .................................................................................................... 55 TEXAS MUNICIPAL RETIREMENT SYSTEM
ANALYSIS OF FUNDING PROGRESS ....................... 56
ii CITY OF SCHERTZ, TEXAS TABLE OF CONTENTS SEPTEMBER 30, 2011 FINANCIAL SECTION (Continued) OTHER SUPPLEMENTARY INFORMATION ..........................................................................
............ 57 COMPARATIVE BALANCE SHEETS -GENERAL FUND ....................................................................... 58 COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE -GENERAL FUND.................................................................................................................. 60 SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE -BUDGET TO ACTUAL -DEBT SERVICE FUND..................................................................................................... 61 COMBINING AND
INDIVIDUAL FUND -STATEMENTS AND SCHEDULES ..................................... 62 NONMAJOR GOVERNMENTAL FUNDS.........................................................................................
......... 63 COMBINING BALANCE SHEET -NONMAJOR GOVERNMENTAL FUNDS ....................................... 64 COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
– NONMAJOR GOVERNMENTAL FUNDS....................................................................... 66 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -BUDGET TO ACTUAL
-HOTEL OCCUPANCY FUND.......................................................................................... 68 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -BUDGET
TO ACTUAL -PARK FUND...................................................................................................................... 69 SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE -BUDGET TO ACTUAL -RECYCLING FUND.......................................................................................................... 70 SCHEDULE OF REVENUES,
EXPENDITURES, AND CHANGES IN FUND BALANCE -BUDGET TO ACTUAL -POLICE FORFEITURES FUND ....................................................................................... 71 SCHEDULE
OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -BUDGET TO ACTUAL -LIBRARY GRANT FUND ................................................................................................
72 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -BUDGET TO ACTUAL -HISTORICAL COMMITTEE FUND ................................................................................
73 DISCRETELY PRESENTED COMPONENT UNITS................................................................................... 74 COMBINING STATEMENT OF NET ASSETS -DISCRETELY PRESENTED
COMPONENT UNITS . 75 COMBINING STATEMENT OF ACTIVITIES -DISCRETELY PRESENTED COMPONENT UNITS... 76 COMBINING BALANCE SHEET -DISCRETELY PRESENTED COMPONENT UNITS .......................
77 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -DISCRETELY PRESENTED COMPONENT UNITS.......................................................... 78
iii CITY OF SCHERTZ, TEXAS TABLE OF CONTENTS SEPTEMBER 30, 2011 STATISTICAL SECTION NET ASSETS, BY COMPONENT...........................................................................................
..................... 81 CHANGE IN NET ASSETS ........................................................................................................................... 83 FUND BALANCES
-GOVERNMENTAL FUNDS .............................................................................................. 87 CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS ....................................
......................... 89 TAX REVENUE BY SOURCE – GOVERNMENTAL FUNDS................................................................... 91 TOTAL WATER AND SEWER CONSUMPTION AND RATES..............
........................................... 92 PRINCIPAL WATER AND SEWER CONSUMERS ............................................................................... 93 ASSESSED VALUE AND
ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY ....................... 94 DIRECT AND OVERLAPPING PROPERTY TAX RATES ........................................................................
95 PRINCIPAL PROPERTY TAX PAYERS...................................................................................................... 96 PROPERTY TAX LEVIES AND COLLECTIONS .........................
............................................................. 97 TAXABLE ASSESSED VALUE................................................................................................................
... 98 RATIOS OF OUTSTANDING DEBT BY TYPE ......................................................................................... 99 RATIOS OF GENERAL BONDED DEBT OUTSTANDING.......................
....................................... 101 DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT....................................... 102 DEBT MARGIN INFORMATION.....................................
......................................................................... 103 PLEDGED REVENUE COVERAGE.................................................................................................
......... 105 DEMOGRAPHIC AND ECONOMIC STATISTICS................................................................................... 106 TOP TEN PRINCIPAL EMPLOYERS...................................
..................................................................... 107 FULL-TIME EQUIVALENT CITY GOVERNMENTAL EMPLOYEES BY FUNCTION ....................... 108 OPERATING INDICATORS
BY FUNCTION/PROGRAM ....................................................................... 109 CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM...........................................................
...... 111
iv CITY OF SCHERTZ, TEXAS TABLE OF CONTENTS SEPTEMBER 30, 2011 COMPLIANCE SECTION......................................................................................................................
. 113 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 .................................................. 114 REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL
CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133................................................... 116 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS .........................................
............................... 118 SCHEDULE OF FINDINGS AND QUESTIONED COSTS – FEDERAL AWARDS -FOR THE YEAR ENDED SEPTEMBER 30, 2011..................................................................
............................................. 119 SCHEDULE OF EXPENDITURES OF FEDERAL AND NON-FEDERAL AWARDS -FOR THE YEAR ENDED SEPTEMBER 30, 2011....................................................
............................................... 120 NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AND NON-FEDERAL AWARDS FOR THE YEAR ENDED SEPTEMBER 30, 2011 .........................................
........................................ 121
v INTRODUCTORY SECTION
vi March 13, 2012 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, 2011. 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, 2011, 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, 2011, 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.
vii 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 29.85 square miles and serves a population of 31,465. 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 53-54 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.
viii Local economy. The City of Schertz enjoys a favorable economic environment and indicators point to favorable growth. Local indicators point to a strong and growing housing market.
The region has a manufacturing and industrial base that adds to the relative stability of the unemployment rate, which currently stands at 5.6%. The City planned well and has an abundant
water supply for meeting its future growth. Employment in the area should continue to be strong with the completion of the new SYSCO regional distribution center in Schertz with 600
jobs. In addition, Caterpillar built a new facility to accommodate its engine business. The region has a labor force of approximately 990,000, and this number is expected to increase
in the next several years as the region continues to experience population and business growth. 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. Long-term financial planning. In 2006, the citizens approved bond propositions for $38.5 million in streets and drainage improvements, a new library and additional
recreational facilities. The Library, Recreation Center and Drainage projects have been completed. Most of the streets projects have been completed. 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 2 years. The average yield on investments was .51 percent.
Active involvement in investment instruments was limited due to the continuation of extremely low interest rates and market uncertainty. The rate of return was simply not sufficient
to justify the management expense. Risk Management. During 2011, 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-party 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 benefits.
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.
ix 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, 2010. This was the 23nd 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, John C. Kessel Juan F. Santoya City Manager Finance Director
x CITY OF SCHERTZ, TEXAS CITY OFFICIALS MAYOR HONORABLE HAL BALDWIN MAYOR PRO-TEM JIM FOWLER CITY COUNCIL DAVID SCAGLIOLA GEORGE ANTUNA, JR. CEDRIC EDWARDS, SR. MICHAEL CARPENTER CITY
MANAGER JOHN C. KESSEL DIRECTOR OF FINANCE JUAN F. SANTOYA, JR. CITY ATTORNEY MICHAEL SPAIN, FULBRIGHT & JAWORSKI, L.L.P CITY AUDITOR ARMSTRONG, VAUGHAN & ASSOCIATES, P.C.
xi
xii
1 FINANCIAL SECTION
2 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, 2011, which collectively comprise the City's basic financial statements, as listed in the table of contents. These financial statements are
the responsibility of the City of Schertz, Texas’ management. Our responsibility is to express opinions 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 opinions. 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, 2011, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted
in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated March 13, 2012 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.
3 Accounting principles generally accepted in the United States of America require that management’s discussion and analysis, and budgetary comparison information and analysis of funding
progress on pages 4 through 12 and 52 through 56 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is
required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted
in the United States of America, which consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s
response to our inquiries, the basic financial statements, and other knowledge we obtained obtained during our audit of the basic financial statements. We do not express an opinion or
provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted
for the purpose of forming opinions on the financial statements that collectively comprise the City of Schertz, Texas, financial statements taken as a whole. 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 financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget
Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is also not a required part of the financial statements. The combining and individual nonmajor
fund financial statements, the schedule of expenditures of federal awards, and other schedules are the responsibility of management and were derived from and relate directly to the underlying
accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements
and certain additional procedures, including comparing and reconciling such information directly to the underlying financial statements themselves, and other additional procedures in
accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the 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 do not express an opinion or provide any assurance on them. Armstrong, Vaughan & Associates, P.C. March 13, 2012
4 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, 2011. 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 $122,456,510 (net
assets). Of this amount, $12,922,601 (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
$6,506,542. A majority of this increase, 80%, 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 $14,802,157, an increase of $7,211,040 in comparison with the prior year. At the end of the current fiscal year, the general fund balance was $3,203,200
which is 17.7% of the total general fund expenditures not including capital outlay. The unassigned fund balance for the general fund was $1,899,105 or 10.5% of total general fund expenditures,
not including capital outlay. During the fiscal year, the City issued $8.25 million in general obligation debt for voter approved community projects. The related principal and interest
payments for the debt are from an annual ad valorem tax levied against all taxable property within the City. In addition, the City had two debt refundings due to the favorable rate environment.
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).
5 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 financerelated 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 governmentwide
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
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.
6 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
51 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 52 through 56 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 57 through 73 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 $122,456,510 at the close of the most recent fiscal year. The largest portion of the City's total net assets (87.6%)
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 other sources, since the capital assets themselves cannot be used to liquidate these liabilities. TABLE A-1 NET ASSETS 2011 2010* 2011 2010* 2011 2010* Current and Other Assets
$ 19,189,682 $ 12,518,142 $ 12,904,183 $ 11,316,172 $ 32,093,865 $ 23,834,314 Capital Assets 102,897,959 101,646,687 60,061,493 58,246,342 162,959,452 159,893,029 Total Assets 122,087,641
114,164,829 72,965,676 69,562,514 195,053,317 183,727,343 Long-Term Liabilities: Outstanding 54,297,127 48,038,998 10,336,424 11,165,385 64,633,551 59,204,383 Other Liabilities 4,614,315
5,180,308 3,348,941 3,293,312 7,963,256 8,473,620 Total Liabilities 58,911,442 53,219,306 13,685,365 14,458,697 72,596,807 67,678,003 Net Assets: Invested in Capital Assets, Net of Related
Debt 55,415,699 54,010,139 51,838,589 50,778,490 107,254,288 104,788,629 Restricted 2,279,621 1,067,599 --2,279,621 1,067,599 Unrestricted 5,480,879 5,867,785 7,441,722 4,325,427 12,922,601
10,193,212 Total Net Assets $ 63,176,199 $ 60,945,523 $ 59,280,311 $ 55,103,917 $ 122,456,510 $ 116,049,440 *2010 has been restated to reflect the results of prior period adjustments
(See Note 13). Governmental Activities Business-Type Activities Total
7 An additional portion of the City's total net assets (1.86%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted
net assets, $12,922,601 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 $6,506,542 during the current fiscal year. Eighty percent of this increase represents capital contributions
from developers. The following table indicates changes in net assets for governmental and business-type activities: TABLE A-2 CHANGES IN NET ASSETS FOR GOVERNMENTAL AND BUSINESS-TYPE
ACTIVITIES Revenues: 2011 2010* 2011 2010* 2011 2010* Program Revenues: Charges for Services $ 5,789,632 $ 5,555,638 $ 20,637,927 $ 18,208,746 $ 26,427,559 $ 23,764,384 Operating Grants
and Contributions 523,029 534,267 --523,029 534,267 Capital Grants and Contributions 2,998,115 1,248,646 2,175,889 973,437 5,174,004 2,222,083 General Revenues Property Taxes 10,280,768
9,715,645 --10,280,768 9,715,645 Other Taxes 6,671,247 5,994,057 --6,671,247 5,994,057 Unrestricted Investment Earnings 35,008 92,208 37,950 36,824 72,958 129,032 Miscellaneous 518,861
648,169 457,094 236,173 975,955 884,342 Total Revenues 26,816,660 23,788,630 23,308,860 19,455,180 50,125,520 43,243,810 Expenses: General Government 8,493,721 7,996,952 --8,493,721
7,996,952 Public Safety 8,260,411 7,829,350 --8,260,411 7,829,350 Streets and Parks 4,423,393 4,113,949 --4,423,393 4,113,949 Health 365,009 344,588 --365,009 344,588 Culture and Recreation
946,607 897,946 --946,607 897,946 Interest and Other Fees 2,189,935 2,188,588 --2,189,935 2,188,588 Water and Sewer --15,280,871 14,434,709 15,280,871 14,434,709 EMS --3,659,031 3,581,678
3,659,031 3,581,678 Total Expenses 24,679,076 23,371,373 18,939,902 18,016,387 43,618,978 41,387,760 INCREASE IN NET ASSETS BEFORE TRANSFERS 2,137,584 417,257 4,368,958 1,438,793 6,506,542
1,856,050 TRANSFERS 84,235 15,421 (84,235) (15,421) --CHANGE IN NET ASSETS 2,221,819 432,678 4,284,723 1,423,372 6,506,542 1,856,050 NET ASSETS, BEGINNING 60,945,523 60,512,845 55,103,917
53,680,545 116,049,440 114,193,390 Prior Period Adjustment 8,857 -(108,329) -(99,472) -NET ASSETS, ENDING $ 63,176,199 $ 60,945,523 $ 59,280,311 $ 55,103,917 $ 122,456,510 $ 116,049,440
*2010 has been restated to reflect the results of prior period adjustments (See Note 13). Governmental Activities Business-Type Activities Total
8 Below is a graph showing total revenues by type for the City: TOTAL REVENUES-GOVERNMENT-WIDE $-$2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 Charges for Services
Operating Grants and Contributions Capital Grants and Contributions Property Taxes Other Taxes Unrestricted Investment Earnings Miscellaneous 2011 2010 Business-Type activities accounted
for 66.3% of the growth in the net assets of the City of Schertz. Of this increase, 68% 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. TOTAL EXPENSES-GOVERNMENT-WIDE -1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000
General Government Public Safety Streets and Parks Health Culture and Recreation Interest and Other Fees 2011 2010
9 Revenues-Governmental Activities (Continued) Property Tax, 59% Sales and Use Tax, 27% Franchise Tax, 9% Occupancy Tax, 2% M iscellaneous, 3% Investment Earnings, 0% General Revenue
by Source -Governmental Activities Revenues-Business-Type Activities Charges for services increased by $2,429,181. This increase was due to higher revenues from Water and Sewer and EMS
Operations. Capital grants and contributions increased by $1,202,452. This increase was due to increased capital contributions from developers. -5,000,000 10,000,000 15,000,000 20,000,000
25,000,000 2011 2010 Revenues Expenses
10 Expenses-Business-Type Activities $-$2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 $16,000,000 $18,000,000 Water and Sewer Utilities EMS Program Revenue
Program Expense Nonoperating Revenues Capital Contributions and Transfers Financial Analysis of the Government's Funds 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 $14,802,157. Of this total amount, $1,899,105 constitutes unassigned fund balance, which is available for spending at the government's discretion. The remainder of fund balance
is non-spendable, restricted, or assigned 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 assigned purposes. The general fund is the chief operating fund of the City of Schertz. At the end of the current fiscal year, unassigned fund balance of the general fund was
$1,899,105, while total fund balance was $3,203,200, an increase of $816,298 from the prior year. The majority of this increase was from increased revenues from sales taxes and permit
revenues. As a measure of the general fund's liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance
represents 10.5% of total general fund expenditures, not including capital, while total fund balance represents 17.7% of that same amount. The debt service fund has a total fund balance
of $117,250 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 $168,965.
11 The capital projects fund has a total fund balance of $10,381,413 an increase of $6,647,112. This increase was from the proceeds of a voter approved bond issue for various community
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 $7,389,583 and those for the Schertz EMS fund amounted to $52,139. 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 increased
planning for future growth. ? The Fleet shortfall was due to increased repairs from vehicle accidents. Some of these shortfalls were offset by reimbursements from the insurance pool.
? Purchasing Department shortfall was due to office supplies. ? I.T. Department shortfall was due to software maintenance being more than anticipated. ? Public Affairs shortfall was
due to personnel costs. ? The Library shortfall was due to higher than expected personnel costs and utilities. Most of the personnel shortfall was offset by a grant. During the year,
the over-expenditures were funded by the increased revenues. 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, 2011, amounts to $162,959,452 (net of accumulated depreciation). Major capital asset events during the current fiscal year included the following: The
City completed Northcliffe Streets, Phase 2, Aviation Heights Water lines, Phase 3, Live Oak Water plant, Solar Project at Library, and infrastructure improvements near SYSCO in 2011.
TABLE A-3 CAPITAL ASSETS (Net of Depreciation) 2011 2010 2011 2010 2011 2010 Land $ 7,442,117 $ 7,291,922 $ 910,413 $ 729,749 $ 8,352,530 $ 8,021,671 Buildings and Improvements 35,037,432
34,508,230 71,829,995 62,872,054 106,867,427 97,380,284 Machinery, Equipment, and Vehicles 5,717,322 5,590,437 2,667,463 2,440,753 8,384,785 8,031,190 Infrastructure 77,314,528 66,274,863
--77,314,528 66,274,863 Construction in Progress 1,552,178 8,582,255 3,697,506 9,423,289 5,249,684 18,005,544 Accumulated Depreciation (24,165,618) (20,601,020) (19,043,884) (17,219,503)
(43,209,502) (37,820,523) TOTALS $ 102,897,959 $ 101,646,687 $ 60,061,493 $ 58,246,342 $ 162,959,452 $ 159,893,029 Activities Activities Total Governmental Business-Type Additional information
on the City's capital assets can be found in Note 6 on pages 40 and 41 of this report.
12 Long-Term Debt. At the end of the current fiscal year, the City of Schertz had total bonded debt outstanding of $66,632,188. Of this amount, $63,795,000 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. TABLE A-4 2011 2010 2011
2010 2011 2010 General Obligation Bonds $ 44,715,000 $ 37,530,000 $ -$ -$ 44,715,000 $ 37,530,000 Certificates of Obligation 7,910,800 11,575,650 5,704,200 6,149,350 13,615,000 17,725,000
Revenue Bonds --2,490,000 5,460,000 2,490,000 5,460,000 Refunding Bonds 2,790,000 -2,675,000 -5,465,000 -Other Debt 97,188 133,408 250,000 310,000 347,188 443,408 TOTALS $ 55,512,988
$ 49,239,058 $ 11,119,200 $ 11,919,350 $ 66,632,188 $ 61,158,408 Activities Activities Total Governmental Business-Type The City's total debt increased by 9 % during the current fiscal
year from the issuance of bonds for community projects approved by the voters in November 2010. During the fiscal year, the City issued $8,250,000 in general obligation debt. The related
principal and interest payment for the tax notes are from an annual ad valorem tax levied against all taxable property within the City. In addition, the City also had two debt refundings
to take advantage of favorable interest rates. The City of Schertz's general fund maintains a "AA" rating from Standard and Poors and Fitch Ratings while 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 9 on pages 42 through 45 of this report. Economic Factors and Next Year's
Budgets and Rates During the current fiscal year, unassigned fund balance in the general fund increased to $1,899,105. The City of Schertz has not appropriated any portion of this amount
for spending in the 2012 fiscal year budget. The intention is to build up the unassigned 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.
13 BASIC FINANCIAL STATEMENTS
See Accompanying notes to basic financial statements. 14 CITY OF SCHERTZ, TEXAS STATEMENT OF NET ASSETS SEPTEMBER 30, 2011 Governmental Business-Type Component ASSETS Activities Activities
Total Units Current Assets: Cash and Cash Equivalents $ 868,664 $ 955,289 $ 1,823,953 $ 1,002,884 Investments 2,810,210 3,236,448 6,046,658 2,091,763 Receivables Delinquent Taxes, Net
of Allowance for Uncollectible Accounts 1,488,113 -1,488,113 446,315 Accounts and Other 1,732,534 3,741,782 5,474,316 506 Accrued Interest Income -8,388 8,388 2,135 Inventories 43,504
176,984 220,488 -Internal Balances (795,130) 795,130 --Total Current Assets 6,147,895 8,914,021 15,061,916 3,543,603 Noncurrent Assets: Restricted Assets: Cash and Cash Equivalents 231,325
771,626 1,002,951 -Investments 12,024,849 3,035,391 15,060,240 -Note Receivable ---120,080 Deferred Charges 785,613 183,145 968,758 20,590 Capital Assets: Land 7,442,117 910,413 8,352,530
-Buildings and Improvements 35,037,432 71,829,995 106,867,427 -Machinery, Equipment, and and Vehicles 5,717,322 2,667,463 8,384,785 -Infrastructure 77,314,528 -77,314,528 -Construction
in Progress 1,552,178 3,697,506 5,249,684 -Accumulated Depreciation (24,165,618) (19,043,884) (43,209,502) -Total Noncurrent Assets 115,939,746 64,051,655 179,991,401 140,670 TOTAL ASSETS
$ 122,087,641 $ 72,965,676 $ 195,053,317 $ 3,684,273 Primary Government
See Accompanying notes to basic financial statements. 15 CITY OF SCHERTZ, TEXAS STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2011 Governmental Business-Type Component Activities
Activities Total Units LIABILITIES Current Liabilities Payable from Unrestricted Assets: Withdrawals in Excess of Deposits $ 60,285 $ 444,832 $ 505,117 $ -Accounts Payable 1,268,831
1,402,677 2,671,508 38,819 Accrued Liabilities 216,868 73,530 290,398 3,032 Due to Other Governments 129,444 -129,444 -Unearned Revenue 74,480 176,309 250,789 -Accrued Interest Payable
505,882 68,372 574,254 8,399 Compensated Absences 120,467 33,622 154,089 4,801 Current Portion of Long-Term Debt 2,217,258 772,325 2,989,583 380,000 Total Current Liabilities Payable
From Unrestricted Assets 4,593,515 2,971,667 7,565,182 435,051 Current Liabilities Payable from Restricted Assets: Customer Deposits 20,800 377,274 398,074 -Total Current Liabilities
Payable From Restricted Assets 20,800 377,274 398,074 -Total Current Liabilities 4,614,315 3,348,941 7,963,256 435,051 Noncurrent Liabilities: Compensated Absences 481,867 134,490 616,357
-Long-Term Debt 53,815,260 10,201,934 64,017,194 1,360,000 Total Noncurrent Liabilities 54,297,127 10,336,424 64,633,551 1,360,000 TOTAL LIABILITIES 58,911,442 13,685,365 72,596,807
1,795,051 Net Assets: Invested in Capital Assets, Net of Related Debt 55,415,699 51,838,589 107,254,288 -Restricted For: Police and Municipal Court 863,043 -863,043 -Library 181,013
-181,013 -PEG Capital Fees 317,453 -317,453 -Debt Service 224,846 -224,846 -Hotel Occupancy 301,517 -301,517 -Parks and Tree Mitigation 391,749 -391,749 -Unrestricted 5,480,879 7,441,722
12,922,601 1,889,222 TOTAL NET ASSETS 63,176,199 59,280,311 122,456,510 1,889,222 TOTAL LIABILITIES & NET ASSETS $ 122,087,641 $ 72,965,676 $ 195,053,317 $ 3,684,273 Primary Government
See Accompanying notes to basic financial statements. 16 CITY OF SCHERTZ, TEXAS STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2011Operating Capital Charges for Grants and
Grants and Functions and Programs Expenses Services Contributions Contributions Primary Government: Governmental Activities: General Government $ 8,493,721 $ 3,461,608 $ 414,325 $ 2,998,115
Public Safety 8,260,411 1,718,866 93,285 -Streets and Parks 4,423,393 367,796 --Health 365,009 33,750 --Culture and Recreation 946,607 207,612 15,419 -Interest and Other Fees 2,189,935
---Total Governmental Activities 24,679,076 5,789,632 523,029 2,998,115 Business-Type Activities Water and Sewer 15,280,871 17,073,075 -2,175,889 EMS 3,659,031 3,564,852 --Total Business-Type
Activities 18,939,902 20,637,927 -2,175,889 Total Primary Government $ 43,618,978 $ 26,427,559 $ 523,029 $ 5,174,004 Component Unit: $ 2,550,172 $ 221,123 $ 167,254 $ -General Revenues:
Taxes: Ad Valorem Sales Franchise Fees Hotel/Motel Mixed Drink Bingo Unrestricted Investment Earnings Miscellaneous Total General Revenues Transfers Change in Net Assets Net Assets at
Beginning of Year Prior Period Adjustment Net Assets at End of Year Program Revenues
17 Governmental Business-Type Component Activities Activities Total Units $ (1,619,673) $ -$ (1,619,673) $ -(6,448,260) -(6,448,260) -(4,055,597) -(4,055,597) -(331,259) -(331,259) -(723,576)
-(723,576) -(2,189,935) -(2,189,935) -(15,368,300) -(15,368,300) --3,968,093 3,968,093 --(94,179) (94,179) --3,873,914 3,873,914 -(15,368,300) 3,873,914 (11,494,386) -(2,161,795) 10,280,768
-10,280,768 -4,702,217 -4,702,217 2,352,177 1,542,046 -1,542,046 -391,181 -391,181 -33,630 -33,630 -2,173 -2,173 -35,008 37,950 72,958 13,227 518,861 457,094 975,955 13,396 17,505,884
495,044 18,000,928 2,378,800 84,235 (84,235) --2,221,819 4,284,723 6,506,542 217,005 60,945,523 55,103,917 116,049,440 1,672,217 8,857 (108,329) (99,472) -$ 63,176,199 $ 59,280,311 $
122,456,510 $ 1,889,222 Primary Government Net (Expense) Revenue and Changes in Net Assets
See Accompanying notes to basic financial statements. 18 CITY OF SCHERTZ, TEXAS BALANCE SHEET – GOVERNMENTAL FUNDS SEPTEMBER 30, 2011 General Capital Debt ASSETS Fund Projects Service
Cash and Cash Equivalents $ 814,125 $ -$ -Investments 2,557,520 --Receivables Taxes, Net 1,387,743 -58,017 Accounts and Other 1,659,317 73,217 -Due from Other Funds 4,485 -66,486 Inventory
43,504 --Restricted Assets: Cash and Cash Equivalents --11,696 Investments -11,372,726 88,647 TOTAL ASSETS $ 6,466,694 $ 11,445,943 $ 224,846 LIABILITIES AND FUND BALANCES Liabilities:
Withdrawals in Excess of Deposits $ -$ 60,285 $ -Accounts Payable 1,095,463 140,975 -Accrued Salaries and Benefits 216,868 --Accrued Interest Payable --57,695 Customer Deposits 20,800
--Due to Other Governments 129,444 --Due to Other Funds 2,831 863,270 -Unearned/Deferred Revenues 1,798,088 -49,901 Total Liabilities 3,263,494 1,064,530 107,596 Fund Balances: Nonspendable:
Inventory 43,504 --Restricted for: Police and Municipal Court 472,248 --Library 174,720 ---PEG Capital Fees 317,453 --Capital Improvement -10,219,300 -Debt Service --117,250 Hotel Occupancy
---Parks and Tree Mitigation ---Assigned for: Property Replacement 202,723 --Special Events 93,447 --Capital Improvement -162,113 -Historical Committee ---Unassigned 1,899,105 --Total
Fund Balances 3,203,200 10,381,413 117,250 TOTAL LIABILITIES AND FUND BALANCES $ 6,466,694 $ 11,445,943 $ 224,846
19 Other Nonmajor Total Governmental Governmental Funds Funds $ 54,539 $ 868,664 252,690 2,810,210 42,353 1,488,113 -1,732,534 -70,971 -43,504 219,629 231,325 563,476 12,024,849 $ 1,132,687
$ 19,270,170 $ -$ 60,285 32,393 1,268,831 -216,868 -57,695 -20,800 -129,444 -866,101 -1,847,989 32,393 4,468,013 -43,504 390,795 863,043 6,293 181,013 -317,453 -10,219,300 -117,250 301,517
301,517 391,749 391,749 -202,723 -93,447 -162,113 9,940 9,940 -1,899,105 1,100,294 14,802,157 $
1,132,687 $ 19,270,170
See accompanying notes to basic financial statements. 20 CITY OF SCHERTZ, TEXAS RECONCILIATION OF BALANCE SHEET SEPTEMBER 30, 2011 TOTAL FUND BALANCE -TOTAL GOVERNMENTAL FUNDS $ 14,802,157
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. 102,897,959 Other long-term assets are not available to pay for current-period expenditures and, therefore, are deferred in the funds. 1,773,509 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. 785,613 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 (55,415,800) Issuance Premium
(to be Amortized as Interest Expense) (530,253) Issuance Discount (to be Amortized as Interest Expense) 10,723 Capital Lease Payable (97,188) Accrued Interest Payable (448,187) Compensated
Absences (602,334) (57,083,039) TOTAL NET ASSETS -GOVERNMENTAL ACTIVITIES $ 63,176,199
See accompanying notes to basic financial statements. 21 CITY OF SCHERTZ, TEXAS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS FOR THE YEAR ENDED
SEPTEMBER 30, 2011 Debt General Capital Service REVENUES Fund Projects Fund Taxes $ 13,132,675 $ -$ 3,433,642 Permits and Fees 1,674,094 --Service Fees 2,490,112 --Fines and Fees 1,452,610
--Sale of Property Forfeitures ---Intergovernmental 143,285 525,928 364,325 Investment Earnings 17,103 14,978 1,320 Miscellaneous 517,625 --TOTAL REVENUES 19,427,504 540,906 3,799,287
EXPENDITURES Current: General Government 7,094,188 173,853 -Public Safety 7,885,119 --Streets and Parks 1,804,659 --Health 360,746 --Culture and Recreation 919,608 --Debt Service: Principal
36,220 -1,964,850 Interest and Fiscal Charges 2,585 -2,005,529 Bond Issue Costs -155,884 88,353 Capital Outlay 642,631 2,214,510 -TOTAL EXPENDITURES 18,745,756 2,544,247 4,058,732 Excess
(Deficiency) of Revenues Over (Under) Expenditures 681,748 (2,003,341) (259,445) OTHER OTHER FINANCING SOURCES (USES) Proceeds from Issuance of Debt -8,250,000 -Proceeds from Refunding
Bonds --2,865,000 Premium on Bonds Issued -155,884 127,116 Payment to Refund Agent --(2,908,428) Transfers In 209,119 71,339 6,792 Transfers (Out) (74,569) (6,792) -TOTAL OTHER FINANCING
SOURCES (USES) 134,550 8,470,431 90,480 Net Change in Fund Balance 816,298 6,467,090 (168,965) Fund Balances at Beginning of Year 2,386,902 3,734,301 286,215 Prior Period Adjustment
-180,022 -Fund Balances at End of Year $ 3,203,200 $ 10,381,413 $ 117,250
22 Other Nonmajor Total Governmental Governmental Funds Funds $ 391,181 $ 16,957,498 121,573 1,795,667 717 2,490,829 -1,452,610 23,642 23,642 15,419 1,048,957 1,607 35,008 600 518,225
554,739 24,322,436 237,098 7,505,139 -7,885,119 -1,804,659 -360,746 -919,608 -2,001,070 -2,008,114 -244,237 99,370 2,956,511 336,468 25,685,203 218,271 (1,362,767) -8,250,000 -2,865,000
-283,000 -(2,908,428) 61,596 348,846 (183,250) (264,611) (121,654) 8,573,807 96,617 7,211,040 1,003,677 7,411,095 -180,022 $ 1,100,294 $ 14,802,157
See accompanying notes to basic financial statements. 23 CITY OF SCHERTZ, TEXAS RECONCILIATION OF THE STATEMENT OF REVENUES, GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE
YEAR ENDED SEPTEMBER 30, 2011 NET CHANGE IN FUND BALANCES -GOVERNMENTAL FUNDS $ 7,211,040 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 15,244,639 Additions Previously Reported as Construction
in Progress (10,265,783) Current Period Depreciation (3,715,219) 1,263,637 The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, and
donations) is to decrease net assets. (12,365) Revenues in the Statement of Activities that that do not provide current financial resources are not reported as revenues in the funds.
21,402 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 Debt (11,115,000) Payment to Refund Agent 2,908,428 Premiums on Issuance of Debt (283,000) Bond Issue Costs 244,237 Principal Repayments
2,001,070 Amortization of Premium, Discount and Issuance Costs 84,312 (6,159,953) 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 (6,973) Accrued Interest (94,969) (101,942) CHANGE IN NET ASSETS -GOVERNMENTAL ACTIVITIES
$ 2,221,
819See accompanying notes to basic financial statements. 24 CITY OF SCHERTZ, TEXAS STATEMENT OF NET ASSETS -PROPRIETARY FUNDS SEPTEMBER 30, 2011 Governmental Activities Water Internal
and Sewer Schertz Service ASSETS System EMS Total Fund Current Assets: Cash and Cash Equivalents $ 955,289 $ -$ 955,289 $ -Investments 3,236,448 -3,236,448 -Accounts Receivable, Net
of Allowance: Customer Accounts 1,902,020 798,762 2,700,782 -Due from Other Governments 1,041,000 -1,041,000 -Due from Other Funds 841,106 2,831 843,937 -Accrued Interest 8,388 -8,388
-Inventory 103,296 73,688 176,984 -Total Current Assets 8,087,547 875,281 8,962,828 -Noncurrent Assets: Restricted Assets: Cash and Cash Equivalents 771,626 -771,626 -Investments 2,734,643
300,748 3,035,391 -Deferred Charges 171,874 11,271 183,145 -Capital Assets: Land 910,413 -910,413 -Buildings and Improvements 71,823,495 6,500 71,829,995 -Machinery, Equipment, and Vehicles
1,358,716 1,308,747 2,667,463 -Construction in Progress 3,697,506 -3,697,506 -Less: Accumulated Depreciation (18,154,456) (889,428) (19,043,884) -Total Noncurrent Assets 63,313,817 737,838
64,051,655 -TOTAL ASSETS $ 71,401,364 $ 1,613,119 $ 73,014,483 $ -Business-Type Activities -Enterprise Funds
See accompanying notes to basic financial statements. 25 CITY OF SCHERTZ, TEXAS STATEMENT OF NET ASSETS -PROPRIETARY FUNDS (CONTINUED) SEPTEMBER 30, 2011 Governmental Activities Water
Internal and Sewer Schertz Service System EMS Total Fund LIABILITIES Current Liabilities: Withdrawals in Excess of Deposits $ -$ 444,832 $ 444,832 $ -Accounts Payable 1,206,046 196,631
1,402,677 -Accrued Liabilities 29,860 43,670 73,530 -Customer Deposits 377,274 -377,274 -Accrued Interest Payable 66,418 1,954 68,372 -Due to Other Funds 4,485 44,322 48,807 -Unearned
Revenue 176,309 -176,309 -Compensated Absences 14,872 18,750 33,622 -Current Portion of Long-Term Debt 682,625 89,700 772,325 Total Current Liabilities 2,557,889 839,859 3,397,748 -Noncurrent
Liabilities: Compensated Absences 59,488 75,002 134,490 -Long-Term Debt (Net of Unamortized Premiums, Discounts, and Deferred Loss) 9,883,234 318,700 10,201,934 -Total Noncurrent Liabilities
9,942,722 393,702 10,336,424 -TOTAL LIABILITIES 12,500,611 1,233,561 13,734,172 -Net Assets: Investment in Capital Assets 51,511,170 327,419 51,838,589 -Unrestricted 7,389,583 52,139
7,441,722 -Total Net Assets 58,900,753 379,558 59,280,311 -TOTAL LIABILITIES & NET ASSETS $ 71,401,364 $ 1,613,119 $ 73,014,483 $ -Business-Type Activities -Enterprise Funds
See accompanying notes to basic financial statements. 26 CITY OF SCHERTZ, TEXAS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER
30, 2011 Governmental Activities Water Internal and Sewer Schertz Service System EMS Total Fund OPERATING REVENUES Fees Charged to Users $ 16,772,745 $ 3,564,852 $ 20,337,597 $ -Charges
for Premiums ---1,551,144 Other Charges 71,035 -71,035 -TOTAL OPERATING REVENUES 16,843,780 3,564,852 20,408,632 1,551,144 OPERATING EXPENSES Personnel Services 1,926,741 2,661,939 4,588,680
1,551,024 Water Purchase 1,594,536 -1,594,536 -Sewage Treatment 5,227,864 -5,227,864 -General and Administrative 3,970,372 193,292 4,163,664 120 Contractual Services 187,751 231,058
418,809 -Supplies and Maintenance 321,773 397,480 719,253 -Depreciation 1,630,850 154,585 1,785,435 -TOTAL OPERATING EXPENSES 14,859,887 3,638,354 18,498,241 1,551,144 OPERATING INCOME
(LOSS) 1,983,893 (73,502) 1,910,391 -NONOPERATING REVENUES (EXPENSES) Investment Earnings 37,395 555 37,950 -Lease Income 229,295 -229,295 -Grant Revenues -Capital 220,000 -220,000 -Miscellaneous
278,920 178,174 457,094 -Interest Expense (407,752) (18,325) (426,077) -Amortization of Bond Issue Costs (13,232) (2,352) (15,584) -TOTAL NONOPERATING REVENUES (EXPENSES) 344,626 158,052
502,678 -INCOME BEFORE CONTRIBUTIONS AND TRANSFERS 2,328,519 84,550 2,413,069 -Transfers Out (84,235) -(84,235) -Capital Contributions 1,955,889 -1,955,889 -CHANGE IN NET ASSETS 4,200,173
84,550 4,284,723 -NET ASSETS AT BEGINNING OF YEAR 54,700,580 403,337 55,103,917 -Prior Period Adjustment -(108,329) (108,329) -NET ASSETS AT END OF YEAR $ 58,900,753 $ 379,558 $ 59,280,311
$ -Business-Type Activities -Enterprise Funds
See accompanying notes to basic financial statements. 27 CITY OF SCHERTZ, TEXAS STATEMENT OF CASH FLOWS -PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2011 Governmental Activities
Water Internal and Sewer Schertz Service System EMS Total Fund Cash Flows From Operating Activities: Cash Received From Customers and Users $ 16,650,730 $ 3,426,154 $ 20,076,884 $ 1,551,144
Other Cash Received From Nonoperating Activity 278,920 178,174 457,094 -Cash Paid to Employees for Services (2,014,216) (2,708,972) (4,723,188) (1,551,144) Cash Paid to Supplier for
Goods & Services (11,542,465) (651,660) (12,194,125) -Net Cash Provided (Used) by Operating Activities 3,372,969 243,696 3,616,665 -Cash Flows From Noncapital Financing Activities: Cash
Advances From/(To) Other Funds 70,710 70,065 140,775 -Net Cash Provided (Used) by Noncapital Financing Activities 70,710 70,065 140,775 -Cash Flows From Capital and Related Financing
Activities: Acquisition and Construction of Capital Assets (327,586) (71,074) (398,660) -Payments Toward Projects in Progress (1,315,339) -(1,315,339) -Proceeds from Revenue Refunding
Bonds 2,610,059 -2,610,059 -Payments to Escrow Agent for Refunded Bonds (2,674,276) -(2,674,276) -Interest Payments paid on Long-Term Debt (409,801) (19,637) (429,438) -Principal paid
on Long-Term Debt (577,824) (223,050) (800,874) -Net Cash Provided (Used) by Capital and Related Financing Activities (2,694,767) (313,761) (3,008,528) -Cash Flows From Investing Activities:
Purchase of Investments (2,200,710) (555) (2,201,265) -Payments from Lease 229,295 -229,295 -Interest and Investment Earnings 39,783 555 40,338 -Net Cash Provided (Used) by Investing
Activities (1,931,632) -(1,931,632) -Net Increase (Decrease) in Cash and Cash Equivalents (1,182,720) -(1,182,720) -Cash and Cash Equivalents at Beginning of Year: Cash and Cash Equivalents
895,260 -895,260 -Restricted Cash and Cash Equivalents 2,014,375 -2,014,375 -2,909,635 -2,909,635 -Cash and Cash Equivalents at End of Year: Cash and Cash Equivalents 955,289 -955,289
-Restricted Cash and Cash Equivalents 771,626 -771,626 -$ 1,726,915 $ -$ 1,726,915 $ -Business-Type Activities -Enterprise Funds
See accompanying notes to basic financial statements. 28 CITY OF SCHERTZ, TEXAS STATEMENT OF CASH FLOWS -PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2011 Governmental Activities
Water Internal and Sewer Schertz Service System EMS Total Fund Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating Income $ 1,983,893 $
(73,502) $ 1,910,391 $ -Adjustments to Reconcile Operating Income to Net Cash Provided (Used) by Operating Activities: Depreciation 1,630,850 154,585 1,785,435 -Miscellaneous Income
from Nonoperating Activity 278,920 178,174 457,094 -Changes in Assets and Liabilities: Decrease (Increase) in Assets: Customer Receivable (425,564) (114,854) (540,418) -Inventory (36,289)
(3,212) (39,501) -Increase (Decrease) in Liabilities: Withdrawals in Excess of Deposits -250,318 250,318 -Accounts Payable (203,880) (76,936) (280,816) -Accrued Liabilities (71,033)
(65,852) (136,885) -Customer Deposits 80,616 -80,616 -Unearned Revenue 151,898 (23,844) 128,054 -Compensated Absences (16,442) 18,819 2,377 NET CASH PROVIDED BY (USED FOR) OPERATING
ACTIVITIES $ 3,372,969 $ 243,696 $ 3,616,665 $ -Transactions Not Affecting Cash and Cash Equivalents: Contributions -Capital Assets $ 1,955,889 $ -$ 1,955,889 $ -Business-Type Activities
-Enterprise Funds
29 NOTES TO BASIC FINANCIAL STATEMENTS
30 CITY OF SCHERTZ, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2011 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. The majority of the foundation’s governing board are employees
of the City, the accounting records are maintained by the finance department, cash is pooled with City funds, and the City provides financing for the foundation and includes the Foundation
as part of the City budget process. The City and its citizens are the sole beneficiaries of the Foundation. 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 Advisory Board or Parks and Recreation Foundation.
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.
31 CITY OF SCHERTZ, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2011 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) B. Government-Wide and Fund
Financial Statements (Continued) 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. 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.
32 CITY OF SCHERTZ, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2011 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis
of Accounting, and Financial Statement Presentation (Continued) The Capital Projects 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. 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. Internal Service Fund accounts for the City’s group medical insurance program. 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
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.
33 CITY OF SCHERTZ, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2011 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 Payables 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 unearned 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.
34 CITY OF SCHERTZ, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2011 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) I. 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:Useful Lives
Assets (Years) Buildings and Improvements 10 -50 Machinery, Equipment, and Vehicles 2 -20 Infrastructure 15 -30 J. Compensated Absences 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.
35 CITY OF SCHERTZ, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2011 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 Fund balances in governmental funds are classified
as follows: Nonspendable – Represents amounts that cannot be spent because they are either not in spendable form (such as inventory or prepaid items) or legally required to remain intact.
Restricted – Represents amounts that are constrained by external parties, constitutional provisions or enabling legislation. Committed – Represents amounts that can only be used for
a specific purpose because of a formal action by the City Council. Committed amounts cannot be used for any other purpose unless the City Council removes those constraints through the
same formal action. Assigned – Represents amounts which the City intends to to use for a specific purpose but do not meet the criteria of restricted or committed. The City Council is
the only entity that may make assignments at this time as the Council has not designated any other individuals with the authority to make assignments. Unassigned – Represents the residual
balance that may be spent on any other purpose of the City. When an expenditure is incurred for a purpose in which multiple classifications are available, the City considers restricted
balances spent first, committed second, and assigned third.
36 CITY OF SCHERTZ, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2011 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 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. O. 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. NOTE 2 -CASH, CASH EQUIVALENTS AND INVESTMENTS As of September 30, 2011, the City had the following
pooled investment funds: Weighted Primary Component Primary Component Average Investment Type Government Unit Government Unit Maturity LOGIC $ 3,368,430 $ -$ 3,368,430 $ --Lone Star
Investment Pool 11,512,614 -11,512,614 --MBIA Municipal Investors 815,007 1,015,675 815,007 1,015,675 -Federated Money Market 1,324,826 44,681 1,324,826 44,681 -Schertz Bank & Trust
-Certificate of Deposit 1,044,420 1,031,407 1,044,420 1,031,407 0.180 Capital One -U.S. Agency Securities 3,041,601 -3,041,601 -1.110 Total $ 21,106,898 $ 2,091,763 $ 21,106,898 $ 2,091,763
1.290 Book Value Fair Value 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.
37 CITY OF SCHERTZ, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2011 NOTE 2 -CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued) 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, 2011, 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, 2011, the City’s petty cash on hand was $2,750. The carrying amount of cash and cash equivalents (including withdrawals
in excess of deposits and certificates of deposit) were $2,319,037 and the bank balance was $3,207,231. Of the bank balance, $250,000 was covered by federal deposit insurance at Schertz
Bank and Trust and the City’s depository had pledged securities having a face value of $8,133,633 and a market value of $8,461,765 as collateral for the City’s deposits. Funds were fully
insured and collateralized. All collateral is held in the City’s name. As of September 30, 2011, the Economic Development Corporation (Component Unit) held funds of $433,650 in the pooled
cash of the primary government, $200 in petty cash on hand, and $506,692 in certificates of deposit with a term less than three months. The Corporation’s funds are fully secured under
City’s pledged securities. As of September 30, 2011, the Library Advisory Board and the Parks and Recreation Foundation (Component Units) held funds of $6,113 and $56,229, respectively.
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. NOTE
3 -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, 2010, upon
which the fiscal 2011 levy was based, was $1,968,808,829 (i.e., market value less exemptions). The estimated market value was $2,135,847,349, making the taxable value 92.18% of the estimated
market value. The City is permitted by the Constitution of the State of Texas to levy taxes 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, 2011, was $0.4493 per $100 of assessed value, which
means that the City has a tax margin of $2.0507 for each $100 value and could increase its annual tax levy by approximately $40,374,363 based upon the present assessed valuation of $1,968,808,829
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.
38 CITY OF SCHERTZ, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2011 NOTE 3 -PROPERTY TAX (Continued) Property taxes are recorded as receivables and unearned
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 4 -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: Other Water and Schertz General Funds Sewer Fund EMS Total Receivables: Property Taxes $ 128,503 $ 61,367 $ -$ -$ 189,870 Sales Taxes 892,629
---892,629 Occupancy Taxes -42,353 --42,353 Franchise Taxes 373,536 ---373,536 Customer Accounts 13,400 -1,950,951 1,196,452 3,160,803 Court Fines 3,975,485 ---3,975,485 Grant Reimbursement
2,894 26,676 --29,570 Other 25,000 46,541 1,041,000 29,143 1,141,684 Gross Receivables 5,411,447 176,937 2,991,951 1,225,595 9,805,930 Less: Allowance for Uncollectibles 2,364,387 3,350
48,931 426,833 2,843,501 Net Total Receivables $ 3,047,060 $ 173,587 $ 2,943,020 $ 798,762 $ 6,962,429 Governmental Funds Proprietary Funds 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 unearned/deferred revenue and unavailable revenue
reported in the governmental funds were as follows: Unavailable General Fund Delinquent Property Taxes Receivable $ 105,585 Court Fines 1,618,023 Permits 31,727 Library 20,000 Other
22,753 Total General Fund 1,798,088 Debt Service Fund Delinquent Property Taxes Receivable 49,901 Total Debt Service Fund 49,901 Total Governmental Funds $1,847,989
39 CITY OF SCHERTZ, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2011 NOTE 4 -RECEIVABLES (Continued) The Schertz Economic Development Corporation approved a loan
to SPV Ventures for $150,000 for twenty years at 0%. Management considers the loan to be fully collectible. Additionally, there is no imputed interest included in the face amount of
the Note Receivable. The balance of the note as of September 30, 2011 was $120,080. NOTE 5 -INTERFUND BALANCES AND TRANSFERS The composition of interfund balances as of September 30,
2011 is as follows: Receivable Fund Payable Fund Amount General Fund Water & Sewer Fund $ 4,485 Debt Service Capital Projects Fund 66,486 Water & Sewer Fund Capital Projects Fund 796,784
Water & Sewer Fund Schertz EMS 44,322 Schertz EMS General Fund 2,831 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 $ 183,250 Subsidy for Administrative Expenditures Capital Projects General 71,339 Funding for Previous Capital
Projects General Water & Sewer 25,869 Subsidy for Administrative Expenditures Nonmajor Governmental General 3,230 Supplement Funding Debt Service Capital Projects 6,792 Contribution
in Support of Debt Nonmajor Governmental Water & Sewer 58,366 Supplement Funding
40 CITY OF SCHERTZ, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2011 NOTE 6 -CAPITAL ASSETS Capital asset activity for the year ended September 30, 2011 was as
follows: Beginning Ending Balance Increases Deletions Transfers Balance Governmental Activities: Capital Assets, Not Being Depreciated: Land $ 7,291,922 $ 150,195 $ -$ -$ 7,442,117 Construction
in Progress 8,582,255 3,235,706 (10,265,783) -1,552,178 Total Capital Assets Not Being Depreciated 15,874,177 3,385,901 (10,265,783) -8,994,295 Capital Assets, Being Depreciated: Buildings
and Improvements 34,508,230 529,202 --35,037,432 Machinery, Equipment, and Vehicles 5,590,437 289,871 (114,066) (48,920) 5,717,322 Streets and Infrastructure 66,274,863 11,039,665 --77,314,528
Total Capital Assets Being Depreciated 106,373,530 11,858,738 (114,066) (48,920) 118,069,282 Accumulated Depreciation: Buildings and Improvements (4,804,842) (947,337) --(5,752,179)
Machinery, Equipment, and Vehicles (2,926,238) (537,665) 112,198 38,423 (3,313,282) Streets and Infrastructure (12,869,940) (2,230,217) --(15,100,157) Total Accumulated Depreciation
(20,601,020) (3,715,219) 112,198 38,423 (24,165,618) Total Capital Assets Being Depreciated, Net 85,772,510 8,143,519 (1,868) (10,497) 93,903,664 Governmental Activities Capital Assets,
Net $ 101,646,687 $11,529,420 $(10,267,651) $ (10,497) $102,897,959 Beginning Ending Balance Increases Deletions Transfers Balance Business-Type Activities: Capital Assets, Not Being
Depreciated: Land $ 729,749 $ 180,664 $ -$ -$ 910,413 Construction in Progress 9,423,289 1,315,339 (7,041,122) -3,697,506 Total Assets Not Being Depreciated 10,153,038 1,496,003 (7,041,122)
-4,607,919 Capital Assets, Being Depreciated: Buildings and Improvements 62,872,054 8,957,941 --71,829,995 Machinery, Equipment, and Vehicles 2,440,753 177,267 (17,051) 66,494 2,667,463
Total Capital Assets Being Depreciated 65,312,807 9,135,208 (17,051) 66,494 74,497,458 Accumulated Depreciation: Buildings and Improvements (15,670,329) (1,537,187) --(17,207,516) Machinery,
Equipment, and Vehicles (1,549,174) (248,248) 17,051 (55,997) (1,836,368) Total Accumulated Depreciation (17,219,503) (1,785,435) 17,051 (55,997) (19,043,884) Total Capital Assets Being
Depreciated, Net 48,093,304 7,349,773 -10,497 55,453,574 Business-Type Activities Capital Assets, Net $ 58,246,342 $ 8,845,776 $ (7,041,122) $ 10,497 $ 60,061,493
41 CITY OF SCHERTZ, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2011 NOTE 6 -CAPITAL ASSETS (Continued) Depreciation expense was charged to functions/programs
of the primary government as follows: Governmental Activities: General Government Public Safety Streets and Parks Culture and Recreation Health Total Depreciation Expense -Governmental
Activities Business-Type Activities: Water and Sewer System EMS Total Depreciation Expense -Business Type Activities 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 Clearwire Sprint Verizon Total 2012 $ 52,218 $ 31,014 $ 26,225 $ 43,321 $
152,778 2013 53,785 31,945 27,012 44,621 157,363 2014 -32,903 --32,903 $ 106,003 $ 95,862 $ 53,237 $ 87,942 $ 343,044 NOTE 8 -CAPITAL LEASE The City has entered into a lease agreement
to finance equipment. The lease agreement qualifies as a capital lease for accounting purposes and, therefore, has been recorded at the present value of the future minimum lease payments
at the inception date. The assets acquired through capital leases are as follows: Assets: Equipment $ 148,294 Less Accumulated Depreciation (22,244) Total $ 126,050 Future minimum obligations
and the net present value of these minimum lease payments as of September 30, 2011 are as follows: Year Ending September 30, 2012 $ 38,705 2013 38,705 2014 22,578 Total Payments 99,988
Less: Amount Representing Interest (2,800) Present Value of Minimum Lease Payments $ 97,188
42 CITY OF SCHERTZ, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2011 NOTE 9 -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. A summary of the terms of general obligation bonds and combination
of tax and revenue certificates of obligation outstanding at September 30, 2011, follows: Maturity Rate Balance Primary Government General Obligation Bonds 2006 Series $ 15,000,000 2031
4.0% -5.25% $ 13,755,000 2007 Series 6,000,000 2027 4.07% 5,000,000 2008 Series 9,900,000 2028 4.13% 9,015,000 2009 Series 9,500,000 2033 2.0% -5.50% 8,695,000 2010 Series 8,250,000
2036 3.0% -6.0% 8,250,000 2011 Series, Refunding 2,865,000 2021 2.0% -4.0% 2,790,000 Certificates of Obligation 2003 Series $ 3,360,000 2018 2.0% -3.9% 1,555,000 2004 Series 7,750,000
2023 4.0% -4.7% 5,790,000 2007 Series CIB 2 438,900 2016 4.01% 244,200 2007 Series CIB 4 569,500 2016 4.01% 321,600 Total Governmental Long-Term Obligations $ 55,415,800 Revenue Bonds
2005 Series $ 3,200,000 2025 3.0% -4.0% $ 2,490,000 2011 Series, Refunding 2,675,000 2021 2.0% -3.0% 2,675,000 Certificates of Obligation 2007 Series CIB 1 $ 6,600,000 2026 4.01% $ 5,420,000
2007 Series CIB 2 226,100 2016 4.01% 125,800 2007 Series CIB 4 280,500 2016 4.01% 158,400 2010 Tax Notes $ 310,000 2015 1.20% -2.55% 250,000 Total Business-Type Long-Term Obligations
$ 11,119,200 Economic Development Corporation Certificates of Obligation 2007 Series CIB 5 $ 1,300,000 2016 4.01% $ 715,000 2010 Tax Notes $ 1,270,000 2015 1.20% -2.55% 1,025,000 Total
Economic Development Corporation Long-Term Obligations $ 1,740,000 Issue Amount
43 CITY OF SCHERTZ, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2011 NOTE 9 -LONG-TERM DEBT (Continued) Debt Service Requirements Annual debt service requirements
of bonded debt as of September 30, 2011, are as follows: September 30, Principal Interest Total 2012 $ 2,148,200 $ 2,569,871 $ 4,718,071 2013 2,424,850 2,310,047 4,734,897 2014 2,593,150
2,214,875 4,808,025 2015 2,711,450 2,113,468 4,824,918 2016 2,818,150 2,005,757 4,823,907 2017 -2021 14,040,000 8,312,864 22,352,864 2022 -2026 13,705,000 5,134,294 18,839,294 2027 -2031
11,355,000 2,212,233 13,567,233 2032 -2036 3,620,000 388,125 4,008,125 Total $ 55,415,800 $ 27,261,534 $ 82,677,334 Governmental Activities September 30, Principal Interest Total 2012
$ 786,800 $ 333,916 $ 1,120,716 2013 820,150 314,586 1,134,736 2014 846,850 294,115 1,140,965 2015 883,550 272,646 1,156,196 2016 836,850 250,939 1,087,789 2017 -2021 3,905,000 938,952
4,843,952 2022 -2026 3,040,000 345,614 3,385,614 Total $ 11,119,200 $ 2,750,768 $ 13,869,968 13,869,968 Business-Type Activities Fiscal Year Ending September 30, Principal Interest Total
2012 $ 380,000 $ 48,330 $ 428,330 2013 390,000 38,504 428,504 2014 400,000 27,671 427,671 2015 415,000 15,610 430,610 2016 155,000 6,216 161,216 Total $ 1,740,000 $ 136,331 $ 1,876,331
Economic Development Corporation
44 CITY OF SCHERTZ, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2011 NOTE 9 -LONG-TERM DEBT (Continued) Changes in Long-Term Debt Balance Balance Due Within 9/30/2010
Additions Reductions 9/30/2011 One Year Governmental Activities: General Obligation Bonds $37,530,000 $ 8,250,000 $1,065,000 $44,715,000 $1,290,000 Unamortized Premium 274,450 155,884
16,604 413,730 20,241 General Obligation Refunding Bonds -2,865,000 75,000 2,790,000 240,000 Unamortized Premium -127,116 10,593 116,523 12,712 Certificates of Obligation 11,575,650
-3,664,850 7,910,800 618,200 Unamortized Discount (11,616) -(893) (10,723) (893) Capital Lease 133,408 -36,220 97,188 36,998 Compensated Absences 595,361 126,045 119,072 602,334 120,467
Total Governmental Activities $50,097,253 $11,524,045 $4,986,446 $56,634,852 $2,337,725 Business-Type Activities: Revenue Bonds $ 5,460,000 $ -$2,970,000 $ 2,490,000 $ 135,000 Unamortized
Discount (23,227) -(9,907) (13,320) (975) Revenue Refunding Bonds -2,675,000 -2,675,000 270,000 Unamortized Premium -9,682 242 9,440 968 Deferred Loss on Refunding -(144,678) (3,617)
(141,061) (14,468) Certificates of Obligation 6,149,350 -445,150 5,704,200 321,800 Tax Notes 310,000 -60,000 250,000 60,000 Compensated Absences Payable 165,735 35,524 33,147 168,112
33,622 Total Business-Type Activities $12,061,858 $ 2,575,528 $3,495,015 $11,142,371 $ 805,947 Economic Development Corporation: Certificates of Obligation $ 840,000 $ -$ 125,000 $ 715,000
$ 130,000 Tax Notes 1,270,000 -245,000 1,025,000 250,000 Compensated Absences 3,654 4,801 3,654 4,801 4,801 Total Economic Development $ 2,113,654 $ 4,801 $ 373,654 $ 1,744,801 $ 384,801
Compensated absences for governmental activities are generally liquidated by the general fund. During the year, the City issued $8,250,000 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. The bonds were issued to provide funds to construct
athletic fields and a natatorium. 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. During the year ended September 30, 2011, the City issued $2,865,000 of revenue bonds to provide resources to pay the 2001 Utility Revenue Bonds in full. As a result,
the refunded portion of the Revenue Bonds has been removed from the Statement of Net Assets and is considered defeased. The current refunding was undertaken to result in an economic
gain (difference between the present values of the debt service payments on the old and new debt) of $276,368. Although the City refunded revenue bonds with General Obligation bonds,
it is the intent of the City to pay the bonds with proprietary revenues.
45 CITY OF SCHERTZ, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2011 NOTE 9 -LONG-TERM DEBT (Continued) During the year ended September 30, 2011, the City issued
$2,675,000 of general obligation refunding bonds to provide resources to pay the 2001 Certificates of Obligation in full. As a result, the refunded portion of the Certificates of Obligation
has been removed from the Statement of Net Assets and is considered defeased. The current refunding was undertaken to result in an economic gain (difference between the present values
of the debt service payments on the old and new debt) of $270,021. Bonded debt of the City consists of various series of general obligation bonds, revenue bonds, certificates of obligation,
and tax notes. 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. NOTE 10 -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 www.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: Plan
Year 2010 Plan Year 2011 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 eligibility (expressed as age/years
of service) 60/5, 0/20 60/5, 0/20 Updated Service Credit 100% Repeating, Transfers 100% Repeating, Transfers Annuity Increase (to retirees) 70% of CPI Repeating 70% of CPI Repeating
46 CITY OF SCHERTZ, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2011 NOTE 10 -RETIREMENT PLAN (Continued) 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.
The annual pension cost and net pension obligation (asset) are as follows: Annual Actual Percentage of Net Pension Fiscal Year Pension Cost Contribution Made APC Contribution Obligation
2011 $ 2,089,658 $ 2,089,658 100% $ -2010 1,926,623 1,926,623 100% -2009 1,738,696 1,738,696 100% -The required contribution rates for fiscal year 2011 were determined as part of the
December 31, 2008 and 2009 actuarial valuations. Additional information as of the latest actuarial valuation, December 31, 2010, also follows: Actuarial Valuation Date December 31, 2008
December 31, 2009 December 31, 2010 -prior to restructuring Actuarial Cost Method Projected Unit Credit Projected Unit Credit Projected Unit Credit Amortization Method Level percent
of payroll payroll Level percent of payroll Level percent of payroll Remaining Amortization Period 29 years -Closed Period 28.1 years -Closed Period 27.1 years -Closed Period Asset Valuation
Method Amortized Cost 10-year Smoothed Market 10-year Smoothed Market Investment Rate of Return 7.5% 7.5% 7.5% Projected Salary Increases Varies by age and service Varies by age and
service Varies by age and service Inflation Rate 3.0% 3.0% 3.0% Cost-of-Living Adjustments 2.1% 2.1% 2.1% Actuarial Valuation Date December 31, 2010 -Restructured Actuarial Cost Method
Projected Unit Credit Amortization Method Level Percent
of Payroll Remaining Amortization Period 27.1 years -Closed Period Asset Valuation Method 10-year Smoothed Market Investment Rate of Return 7.0% Projected Salary Increases Varies by
age and service Inflation Rate 3.0% Cost of Living Adjustments 2.1%
47 CITY OF SCHERTZ, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2011 NOTE 10 -RETIREMENT PLAN (Continued) B. Contributions (Continued) Funded Status and Funding
Progress – In June 2011, SB 350 was enacted by the Texas Legislature, resulting in a restructure of the TMRS funds. The legislation provided for the actuarial valuation to be completed,
as if restructuring had occurred on December 31, 2010. In addition, the actuarial assumptions were updated for the new fund structure, based on the actuarial experience study that was
adopted by the TMRS Board at their May 2011 meeting (the review compared actual to expected experience for the four-year period of January 1, 2006 through December 31, 2009). For a complete
description of the combined impact of the legislation and the new actuarial assumptions, including the effects on TMRS city rates and funding ratios, please see the December 31, 2010
TMRS Comprehensive Annual Financial Report (CAFR). The funded status as of December 31, 2010, the most recent actuarial valuation date, is as follows: Actuarial UAAL as a Actuarial Actuarial
Value Accrued Unfunded Percentage of Valuation Date of Assets Liability (AAL) Funded Ratio AAL (UAAL) Covered Payroll Covered Payroll 12/31/2010 (1) $ 16,956,736 $ 28,752,522 59.0% $
11,795,786 $ 12,612,346 93.5% 12/31/2010 (2) $ 18,696,437 $ 31,792,634 58.8% $ 13,096,197 $ 12,612,646 103.8% (1) Actuarial valuation performed under the original fund structure (2)
Actuarial valuation performed under the new fund structure Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far
into the future. Actuarially determined amounts are subject to continual revisions as actual results are compared to past expectations and new estimates are made about the future. Actuarial
calculations are based on the benefits provided under the terms of the substantive plan in effect at the time of each valuation, and reflect a long-term perspective. Consistent with
that perspective, actuarial methods and assumptions used to include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value
of assets. The schedule of funding progress, presented as Required Supplementary Information following the notes to the financial statements, presents multi-year 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.
48 CITY OF SCHERTZ, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2011 NOTE 10 -RETIREMENT PLAN (Continued) C. Other Post-Employment Benefits (Continued) 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. The City’s contributions to the TMRS SDBF for the years ended 2011, 2010, and 2009 were $25,723, $21,794, and $22,389, respectively,
which equaled the required contributions each year. 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 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 “operating expenses” in the water and sewer fund and totaled $1,594,536 for the year ended September
30, 2011. 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. 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, 2010: ASSETS: Current Assets $ 3,654,995 Restricted Cash and Cash Equivalents 26,773,001
Property, Plant & Equipment 49,656,555 Other Assets 2,387,394 TOTAL ASSETS $ 82,471,945 LIABILITIES & NET ASSETS: Current Liabilities $ 2,964,912 Revenue Bonds (Less Current Maturities
and Unamortized Discounts) 74,596,381 TOTAL LIABILITIES 77,561,293 NET ASSETS: Invested in Capital Assets, Net of Related Debt (2,784,130) Restricted 3,577,890 Unrestricted 4,116,892
TOTAL NET ASSETS 4,910,652 TOTAL LIABILITIES AND NET ASSETS $ 82,471,945
49 CITY OF SCHERTZ, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2011 NOTE 11 -JOINT VENTURE (Continued) Schertz/Seguin Local Government Corporation (Continued)
The Corporation had revenue bonds outstanding in the amount of $78,480,000 (as of September 30, 2010) 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. NOTE 12 -COMMITMENTS AND CONTINGENCIES Tax Increment Financing (the “Zone”) The City is a principal
in the City of Schertz Tax Increment Reinvestment Zone #2, 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. The TIRZ has collected $146,569 as of September 30, 2011. Amounts collected in 2010 and 2011 are $38,884 and $91,847, respectively,
which will be used to reimburse the developer for infrastructure improvements. 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.
Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; 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, 2011 were $503,145 for property and casualty
and workers compensation coverage. There were no significant increases or decreases in coverage from fiscal year 2010.
50 CITY OF SCHERTZ, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2011 NOTE 12 -COMMITMENTS AND CONTINGENCIES (Continued) Construction Commitments The City of Schertz
has entered into commitments for various projects as follows: Primary Government: Estimated Project Expended to Estimated Future Cost to City Date Commitment Governmental Activities:
Rural Roads $ 2,212,523 $ 299,820 $ 1,912,703 Northcliffe 1,182,738 1,128,459 54,279 Main Street 720,482 -720,482 Ware-Seguin Road 128,382 -128,382 Total Governmental Commitments 4,244,125
1,428,279 2,815,846 Business-Type Activities: Town Creek Project Ph2 3,666,629 453,013 3,213,616 Total Business-Type Activities 3,666,629 453,013 3,213,616 Total Estimated Future Commitments
$ 7,910,754 $ 1,881,292 $ 6,029,462 NOTE 13 -PRIOR PERIOD ADJUSTMENT The following adjustments are necessary to correct certain errors in the financial statements for the period ending
September 30, 2010: Governmental Business Type Activities Activities Beginning Net Assets 60,945,523 55,103,917 Accounts Payable Overstated (Understated) 8,857 (108,329) Restated Beginning
Net Assets $ 60,954,380 $ 54,995,588 Government-Wide Capital Projects Fund Beginning Fund Balances $ 3,734,301 Overstated Accounts Payable 180,022 Restated Beginning Fund Balances $
3,914,323 Schertz EMS Beginning Net Assets $ 403,337 Understated Accounts Payable (108,329) Restated Beginning Net Assets $ 295,008
51 CITY OF SCHERTZ, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2011 NOTE 14 -SUBSEQUENT EVENTS Subsequent to year end, the City approved issuing City of Schertz,
Texas General Obligation Refunding Bonds, Series 2011 for $6,745,000 with an interest rate of 2.330% to be paid over 13 years The bond issue was an advanced refunding for all callable
maturities of 2003 and 2004 Certificates of Obligation.
52 REQUIRED SUPPLEMENTARY INFORMATION
53 CITY OF SCHERTZ, TEXAS REQUIRED SUPPLEMENTARY INFORMATION GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL YEAR ENDED SEPTEMBER 30,
2011 (WITH COMPARATIVE ACTUAL TOTALS FOR 2010) Variance With 2011 Final Budget -2010 Actual Positive Actual Original Final Amounts (Negative) Amounts REVENUES Property Taxes $ 6,804,566
$ 6,804,566 $ 6,852,609 $ 48,043 $6,374,190 Sales Tax 4,071,590 4,071,590 4,702,217 630,627 4,160,495 Franchise Taxes 1,521,000 1,521,000 1,542,046 21,046 1,448,620 Beverage and Bingo
Taxes 36,500 36,500 35,803 (697) 36,795 Permits and Fees 1,246,460 1,246,460 1,674,094 427,634 1,056,716 Service Fees 2,322,946 2,322,946 2,490,112 167,166 2,296,451 Fines and Fees 2,067,840
2,067,840 1,452,610 (615,230) 1,655,183 Intergovernmental 50,000 50,000 143,285 93,285 50,000 Investment Earnings 31,100 31,100 17,103 (13,997) 34,228 Miscellaneous 549,584 549,584 517,625
(31,959) 514,653 TOTAL REVENUES 18,701,586 18,701,586 19,427,504 725,918 17,627,331 EXPENDITURES Current: General Government: City Council 60,500 60,500 53,400 7,100 36,922 City Manager
746,407 791,833 773,929 17,904 723,636 Planning and Zoning 305,305 305,305 230,476 74,829 159,693 Legal 258,000 258,000 340,355 (82,355) 213,812 Customer Relations 90,533 90,533 85,304
5,229 88,837 Municipal Court 351,503 351,503 303,308 48,195 287,414 Facilities Maintenance 905,186 904,236 898,375 5,861 850,784 Purchasing and Asset Management 244,770 244,770 255,581
(10,811) 237,246 City Secretary 184,872 178,880 176,568 2,312 173,120 Finance 437,838 438,468 430,568 7,900 419,397 Information Technology 767,180 779,168 863,899 (84,731) 760,106 Human
Resources 303,095 299,098 272,714 26,384 285,402 Records Management 63,717 72,019 70,136 1,883 52,495 Schertz Tales 379,926 388,426 383,230 5,196 -Engineering 200,026 200,026 193,808
6,218 175,767 Geographic Information Systems 123,708 123,708 118,734 4,974 113,757 Fleet Services 306,818 308,368 352,825 (44,457) 303,428 Special Events 106,300 106,300 102,111 4,189
91,153 Public Affairs 184,796 178,796 190,372 (11,576) 539,692 Other 1,038,659 1,016,830 998,495 18,335 1,152,647 Total General Government 7,059,139 7,096,767 7,094,188 2,579 6,665,308
Public Safety: Police Department 4,394,887 4,396,987 4,369,466 27,521 4,281,040 Fire Department 2,684,576 2,676,576 2,630,460 46,116 2,389,640 Inspection 406,444 406,205 376,910 29,295
361,847 Marshal Service 563,492 527,500 508,283 19,217 377,193 Total Public Safety $ 8,049,399 $ 8,007,268 $ 7,885,119 $ 122,149 $7,409,720 Budgeted Amounts
54 CITY OF SCHERTZ, TEXAS REQUIRED SUPPLEMENTARY INFORMATION GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL (CONTINUED) YEAR ENDED
SEPTEMBER 30, 2011 (WITH COMPARATIVE ACTUAL TOTALS FOR 2010) Variance With 2011 Final Budget -2010 Actual Positive Actual Original Final Amounts (Negative) Amounts EXPENDITURES (Continued)
Current: (Continued) Streets and Parks: Streets $ 879,036 $ 872,331 $ 840,964 $ 31,367 $ 817,800 Parks 735,112 739,412 733,383 6,029 697,492 Swimming Pool 243,003 243,003 230,312 12,691
241,442 Total Streets and Parks 1,857,151 1,854,746 1,804,659 50,087 1,756,734 Health: Animal Control 378,083 379,083 360,746 18,337 331,860 Total Health 378,083 379,083 360,746 18,337
331,860 Culture and Recreation: Library 736,017 736,017 758,745 (22,728) 691,033 Civic Center 187,146 184,446 160,585 23,861 151,556 Senior Center --278 (278) 23,852 Total Culture and
Recreation 923,163 920,463 919,608 855 866,441 Capital Outlay 697,741 710,820 642,631 68,189 602,398 Debt Service: Principal --36,220 (36,220) 14,886 Interest and Fiscal Charges 150
150 2,585 (2,435) 1,311 Total Debt Service 150 150 38,805 (38,655) 16,197 TOTAL EXPENDITURES 18,964,826 18,969,297 18,745,756 223,541 17,648,658 EXCESS (DEFICIENCY) OF REVENUES OVER
(UNDER) EXPENDITURES (263,240) (267,711) 681,748 949,459 (21,327) OTHER FINANCING SOURCES (USES) Proceeds from Issuance of Debt ----148,294 Transfers In 299,496 397,682 209,119 (188,563)
232,426 Transfers Out (5,150) (103,336) (74,569) 28,767 (84) TOTAL OTHER FINANCING SOURCES (USES) 294,346 294,346 134,550 (159,796) 380,636 NET CHANGE IN FUND BALANCE 31,106 26,635 816,298
789,663 359,309 FUND BALANCE -BEGINNING 2,386,902 2,386,902 2,386,902 -2,027,593 FUND BALANCE -ENDING $ 2,418,008 $ 2,413,537 $ 3,203,200 $ 789,663 $2,386,902 Budgeted Amounts
55 CITY OF SCHERTZ, TEXAS NOTES TO SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL SEPTEMBER 30, 2011 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
the general fund; debt service fund; special revenue funds; hotel motel tax, park fund, recycling fund, police forfeiture fund, library grant fund, and the historical committee fund.
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
did not exceed the general fund budgeted expenditures during 2011. 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.
56 CITY OF SCHERTZ, TEXAS REQUIRED SUPPLEMENTARY INFORMATION TEXAS MUNICIPAL RETIREMENT SYSTEM ANALYSIS OF FUNDING PROGRESS LAST SEVEN CALENDAR YEARS UNFUNDED ACTUARIAL ACCRUED LIABILITY
UNFUNDED AS A ACTUARIAL ACTUARIAL FUNDING ACTUARIAL ANNUAL PERCENTAGE CALENDAR VALUE OF ACCRUED RATIO ACCRUED COVERED OF COVERED YEAR ASSETS ** LIABILITY* (1)/(2) LIABILITY PAYROLL PAYROLL
2004 $ 5,122,816 $ 7,950,619 64.4% $ 2,827,803 $ 6,144,053 46.0% 2005 6,042,437 9,003,970 67.1% 2,961,533 7,662,928 38.6% 2006 7,290,175 11,798,002 61.8% 4,507,827 8,478,634 53.2% 2007
8,811,205 19,057,935 46.2% 10,246,730 10,047,726 102.0% 2008 11,216,663 22,068,312 50.8% 10,851,649 11,626,232 93.3% 2009 13,946,029 25,584,067 54.5% 11,638,038 12,321,349 94.5% 2010
(1) 16,956,736 28,752,522 59.0% 11,795,786 12,612,346 93.5% 2010 (2) 18,696,437 31,792,634 58.8% 13,096,197 12,612,346 103.8% * 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. (1) Actuarial valuation performed under the original fund structure (2) Actuarial valuation performed
under the new fund structure
57 OTHER SUPPLEMENTARY INFORMATION
58 CITY OF SCHERTZ, TEXAS COMPARATIVE BALANCE SHEETS GENERAL FUND SEPTEMBER 30, 2011 AND 2010 2011 2010 ASSETS Cash and Cash Equivalents $ 814,125 $ 981,538 Investments 2,557,520 2,097,587
Receivables: Ad Valorem Taxes (Net of Allowance for Uncollectibles of $6,925 and $6,925) 121,578 108,487 Sales Taxes 892,629 669,406 Franchise Taxes 373,536 369,021 Grant Reimbursements
2,894 -Other (Net of Allowance for Uncollectibles of $2,357,462 and $2,318,291) 1,656,423 1,608,411 Due from Other Funds 4,485 15,977 Accrued Interest -2,316 Inventory 43,504 46,473
TOTAL ASSETS $ 6,466,694 $ 5,899,216
59 CITY OF SCHERTZ, TEXAS COMPARATIVE BALANCE SHEETS GENERAL FUND (CONTINUED) SEPTEMBER 30, 2011 AND 2010 LIABILITIES AND FUND BALANCE Liabilities: Accounts Payable $ 1,095,463 $ 984,372
Accrued Liabilities 216,868 566,690 Customer Deposits 20,800 27,123 Due to Other Governments 129,444 234,504 Due to Other Funds 2,831 -Unearned Revenue 1,798,088 1,699,625 Total Liabilities
3,263,494 3,512,314 Fund Balance: Nonspendable: Inventory 43,504 46,473 Restricted for: LEOSE 13,004 12,353 Technology 295,942 269,739 Court Security 163,302 133,005 Writing Next Chapter
174,720 149,381 PEG Capital Fees 317,453 -Assigned for: Vehicle Replacement 7,075 7,062 Equipment Replacement 195,648 195,279 Special Events 93,447 142,465 Unassigned 1,899,105 1,431,145
Total Fund Balance 3,203,200 2,386,902 TOTAL LIABILITIES AND FUND BALANCE $ 6,466,694 $ 5,899,216
60 CITY OF SCHERTZ, TEXAS COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GENERAL FUND FOR THE YEARS ENDED SEPTEMBER 30, 2011 AND 2010 2011 2010 REVENUES
Property Taxes $ 6,852,609 $ 6,374,190 Sales Taxes 4,702,217 4,160,495 Franchise Taxes 1,542,046 1,448,620 Beverage and Bingo Taxes 35,803 36,795 Permits and Fees 1,674,094 1,056,716
Service Fees 2,490,112 2,296,451 Fines and Fees 1,452,610 1,655,183 Intergovernmental 143,285 50,000 Investment Earnings 17,103 34,228 Miscellaneous 517,625 514,653 TOTAL REVENUES 19,427,504
17,627,331 EXPENDITURES Current: General Government 7,094,188 6,665,308 Public Safety 7,885,119 7,409,720 Streets and Parks 1,804,659 1,756,734 Health 360,746 331,860 Culture and Recreation
919,608 866,441 Capital Outlay 642,631 602,398 Debt Service: Principal 36,220 14,886 Interest and Fiscal Charges 2,585 1,311 TOTAL EXPENDITURES 18,745,756 17,648,658 Excess (Deficiency)
of Revenues Over (Under) Expenditures 681,748 (21,327) OTHER FINANCING SOURCES (USES) Issuance of Debt -148,294 Transfers In 209,119 232,430 Transfers Out (74,569) (88) TOTAL OTHER FINANCING
SOURCES (USES) 134,550 380,636 Net Change in Fund Balance 816,298 359,309 Fund Balance at Beginning of Year 2,386,902 2,027,593 Fund Balance at End of Year $ 3,203,200 $ 2,386,902
61 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, 2011 (WITH COMPARATIVE ACTUAL
TOTALS FOR 2010) Variance with 2011 Final Budget-2010 Actual Positive Actual Original Final Amounts (Negative) Amounts REVENUES Property Taxes $ 3,368,794 $ 3,368,794 $ 3,433,642 $ 64,848
$ 3,363,046 Intergovernmental --364,325 364,325 372,480 Investment Earnings 3,000 3,000 1,320 (1,680) 3,364 TOTAL REVENUES 3,371,794 3,371,794 3,799,287 427,493 3,738,890 EXPENDITURES
Debt Service: Principal 1,594,567 1,594,567 1,964,850 (370,283) 1,753,200 Interest and Fiscal Charges 2,019,757 2,019,757 2,005,529 14,228 2,143,844 Bond Issue Costs --88,353 (88,353)
-TOTAL EXPENDITURES 3,614,324 3,614,324 4,058,732 (444,408) 3,897,044 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (242,530) (242,530) (259,445) (16,915) (158,154) OTHER
FINANCING SOURCES Transfers In 243,000 243,000 6,792 (236,208) -Proceeds from Refunding Bonds ---2,865,000 2,865,000 -Premium on Bonds Issued --127,116 127,116 -Payment to Refund Agent
--(2,908,428) (2,908,428) -TOTAL OTHER FINANCING SOURCES 243,000 243,000 90,480 (152,520) -Net Change in Fund Balance 470 470 (168,965) (169,435) (158,154) FUND BALANCE, BEGINNING 286,215
286,215 286,215 -444,369 FUND BALANCE, ENDING $ 286,685 $ 286,685 $ 117,250 $ (169,435) $ 286,215 Budgeted Amounts
62 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
63 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. 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. Historical Committee Fund -will account for funds received for
the preservation of the history of the city.
64 CITY OF SCHERTZ, TEXAS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2011 Hotel Police Occupancy Park Recycling Forfeitures Fund Fund Fund Fund ASSETS Cash and
Cash Equivalents $ -$ 44,521 $ -$ -Investments -252,690 --Accounts Receivable, Net of Allowance Taxes 42,353 ---Restricted Assets: Cash and Cash Equivalents 181,656 --31,680 Investments
78,126 126,235 -359,115 TOTAL ASSETS $ 302,135 $ 423,446 $ -$ 390,795 LIABILITIES AND FUND BALANCE Liabilities Withdrawals in Excess of Deposits $ -$ -$ -$ -Accounts Payable 618 31,697
--Total Liabilities 618 31,697 --Fund Balance Restricted for: Hotel Occupancy 301,517 ---Tree Mitigation -173,999 --Park Fund -217,750 --Police Forfeiture ---390,795 Library ----Assigned
for: Historical Committee ----Total Fund Balances 301,517 391,749 -390,795 TOTAL LIABILITIES AND FUND BALANCE $ 302,135 $ 423,446 $ -$ 390,795 Special Revenue Funds
65 Library Historical Grant Committee Fund Fund Totals $ -$ 10,018 $ 54,539 --252,690 --42,353 6,293 -219,629 --563,476 $ 6,293 $ 10,018 $ 1,132,687 $ -$ -$ --78 32,393 -78 32,393 --301,517
--173,999 --217,750 --390,795 6,293 -6,293 -9,940 9,940 6,293 9,940 1,100,294 $ 6,293 $ 10,018 $ 1,132,687 Special Revenue Funds
66 CITY OF SCHERTZ, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2011 Hotel Police
Occupancy Park Recycling Forfeitures REVENUES Fund Fund Fund Fund Occupancy Tax $ 391,181 $ -$ -$ -Developer Fees -78,053 --Tree Mitigation -43,520 --Sale of Merchandise ----Sale of
Property Forfeitures ---23,642 Operating Grants ----Investment Earnings 385 639 -583 Miscellaneous 600 ---TOTAL REVENUES 392,166 122,212 -24,225 EXPENDITURES Current: General and Administrative
168,307 62,344 --Contractual Services 2,500 ---Capital Outlay -57,028 -42,342 TOTAL EXPENDITURES 170,807 119,372 -42,342 Excess (Deficiency) of Revenues Over (Under) Expenditures 221,359
2,840 -(18,117) OTHER FINANCING SOURCES (USES) Transfers In --58,366 -Transfers Out (170,221) ---TOTAL OTHER FINANCING SOURCES (USES) (170,221) -58,366 -Net Change in Fund Balance 51,138
2,840 58,366 (18,117) Fund Balances (Deficit), Beginning 250,379 388,909 (58,366) 408,912 408,912 Fund Balances, Ending $ 301,517 $ 391,749 $ -$ 390,795 Special Revenue Funds
67 Library Historical Grant Committee Fund Fund Totals $ -$ -$ 391,181 --78,053 --43,520 -717 717 --23,642 15,419 -15,419 --1,607 --600 15,419 717 554,739 -3,947 234,598 --2,500 --99,370
-3,947 336,468 15,419 (3,230) 218,271 -3,230 61,596 (13,029) -(183,250) (13,029) 3,230 (121,654) 2,390 -96,617 3,903 9,940 1,003,677 $ 6,293 $ 9,940 $ 1,100,294 Special Revenue Funds
68 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, 2011 (WITH COMPARATIVE
ACTUAL TOTALS FOR 2010) Variance with 2011 Final Budget-2010 Actual Positive Actual Original Final Amounts (Negative) Amounts REVENUES Occupancy Tax $ 385,000 $ 385,000 $ 391,181 $ 6,181
$ 348,147 Investment Earnings 550 550 385 (165) 425 Miscellaneous 5,000 5,000 600 (4,400) 4,394 TOTAL REVENUES 390,550 390,550 392,166 1,616 352,966 EXPENDITURES Current: General and
Administrative 143,493 189,243 168,307 20,936 69,519 Contractual Services 2,500 2,500 2,500 -902 Capital Outlay -9,250 -9,250 -TOTAL EXPENDITURES 145,993 200,993 170,807 30,186 70,421
Excess (Deficiency) of Revenues Over (Under) Expenses 244,557 189,557 221,359 31,802 282,545 OTHER FINANCING SOURCES (USES) Transfers In -55,000 -(55,000) -Transfers Out (231,485) (231,485)
(170,221) 61,264 (212,876) TOTAL OTHER FINANCING SOURCES (USES) (231,485) (176,485) (170,221) 6,264 (212,876) Net Change in Fund Balance 13,072 13,072 51,138 38,066 69,669 FUND BALANCE,
BEGINNING 250,379 250,379 250,379 -180,710 FUND BALANCE, ENDING $ 263,451 $ 263,451 $ 301,517 $ 38,066 $ 250,379 Budgeted Amounts
69 CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET TO ACTUAL PARK FUND FOR THE YEAR ENDED SEPTEMBER 30, 2011 (WITH COMPARATIVE ACTUAL TOTALS
FOR 2010) Variance with Original and 2011 Final Budget-2010 Final Actual Positive Actual Budget Amounts (Negative) Amounts REVENUES Developer Fees $ 40,000 $ 78,053 $ 38,053 $ 220,000
Tree Mitigation 40,000 43,520 3,520 53,756 Investment Earnings 340 639 299 691 Miscellaneous 65 -(65) 2,790 TOTAL REVENUES 80,405 122,212 41,807 277,237 EXPENDITURES Current: General
and Administrative 44,000 62,344 (18,344) 160,878 Capital Outlay 36,000 57,028 (21,028)
-TOTAL EXPENDITURES 80,000 119,372 (39,372) 160,878 OTHER FINANCING SOURCES (USES) Transfers Out ---(14,154) TOTAL OTHER FINANCING SOURCES (USES) ---(14,154) Net Change in Fund Balance
405 2,840 2,435 102,205 FUND BALANCE, BEGINNING 388,909 388,909 -286,704 FUND BALANCE, ENDING $ 389,314 $ 391,749 $ 2,435 $ 388,909
70 CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET TO ACTUAL RECYCLING FUND FOR THE YEAR ENDED SEPTEMBER 30, 2011 (WITH COMPARATIVE ACTUAL
TOTALS FOR 2010) Variance with Original and 2011 Final Budget-2010 Final Actual Positive Actual Budget Amounts (Negative) Amounts REVENUES Sale of Recycling Materials $ 25,000 $ -$ (25,000)
$ -TOTAL REVENUES 25,000 -(25,000) -EXPENDITURES Current: Contractual Services 56,000 -56,000 33,454 TOTAL EXPENDITURES 56,000 -56,000 33,454 OTHER FINANCING SOURCES (USES) Transfers
In 31,000 58,366 27,366 -TOTAL OTHER FINANCING SOURCES (USES) 31,000 58,366 27,366 -Net Change in Fund Balance -58,366 58,366 (33,454) FUND BALANCE (DEFICIT), BEGINNING (58,366) (58,366)
-(24,912) FUND BALANCE (DEFICIT), ENDING $ (58,366) $ -$ 58,366 $ (58,366) FUND BALANCE (DEFICIT), ENDING
71 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, 2011 (WITH COMPARATIVE
ACTUAL TOTALS FOR 2010) Variance with Original and 2011 Final Budget-2010 Final Actual Positive Actual Budget Amounts (Negative) Amounts REVENUES Sale of Property Forfeitures $ 85,000
$ 23,642 $ (61,358) $ 100,173 Investment Earnings 500 583 83 721 TOTAL REVENUES 85,500 24,225 (61,275) 100,894 EXPENDITURES General and Administrative 1,300 -1,300 3,622 Capital Outlay
66,000 42,342 23,658 31,979 TOTAL EXPENDITURES 67,300 42,342 24,958 35,601 Net Change in Fund Balance 18,200 (18,117) (36,317) 65,293 FUND BALANCE, BEGINNING 408,912 408,912 -343,619
FUND BALANCE, ENDING $ 427,112 $ 390,795 $ (36,317) $ 408,912
72 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, 2011 (WITH COMPARATIVE
ACTUAL TOTALS FOR 2010) Variance with Original and 2011 Final Budget-2010 Final Actual Positive Actual Budget Amounts (Negative) Amounts REVENUES Operating Grants $ 10,000 $ 15,419 $
5,419 $ 10,426 TOTAL REVENUES 10,000 15,419 5,419 10,426 EXPENDITURES Current: General and Administrative ---6,924 TOTAL EXPENDITURES ---6,924 OTHER FINANCING SOURCES (USES) Transfers
Out (10,000) (13,029) (3,029) -TOTAL OTHER FINANCING SOURCES (USES) (10,000) (13,029) (3,029) -Net Change in Fund Balance -2,390 2,390 3,502 FUND BALANCE, BEGINNING 3,903 3,903 -401
FUND BALANCE, ENDING $ 3,903 $ 6,293 $ 2,390 $ 3,903
73 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, 2011 (WITH COMPARATIVE
ACTUAL TOTALS FOR 2010) Variance with Original and 2011 Final Budget-2010 Final Actual Positive Actual Budget Amounts (Negative) Amounts REVENUES Sale of Merchandise $ 1,000 $ 717 $
(283) $ 1,126 TOTAL REVENUES 1,000 717 (283) 1,126 EXPENDITURES General and Administrative 5,150 3,947 1,203 1,335 TOTAL EXPENDITURES 5,150 3,947 1,203 1,335 OTHER FINANCING SOURCES
(USES) Transfers In 5,150 3,230 (1,920) -TOTAL OTHER FINANCING SOURCES (USES) 5,150 3,230 (1,920) -Net Change in Fund Balance 1,000 -(1,000) (209) FUND BALANCE, BEGINNING 9,940 9,940
-10,149 FUND BALANCE, ENDING $ 10,940 $ 9,940 $ (1,000) $ 9,940
74 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.
75 CITY OF SCHERTZ, TEXAS COMBINING STATEMENT OF NET ASSETS DISCRETELY PRESENTED COMPONENT UNITS SEPTEMBER 30, 2011 Schertz The Economic Library Parks and Development Advisory Recreation
Corporation Board Foundation Total ASSETS Current Assets: Cash and Cash Equivalents $ 940,542 $ 6,113 $ 56,229 $ 1,002,884 Investments 2,047,082 44,681 -2,091,763 Accounts Receivable
-Sales Tax 446,315 --446,315 Accounts Receivable -Other 506 --506 Accrued Interest Receivable 2,135 --2,135 Total Current Assets 3,436,580 50,794 56,229 3,543,603 Other Assets: Notes
Receivable 120,080 --120,080 Deferred Charges 20,590 20,590 Total Other Assets 140,670 --140,670 TOTAL ASSETS $ 3,577,250 $ 50,794 $ 56,229 $ 3,684,273 LIABILITIES AND NET ASSETS Liabilities
Current Liabilties: Accounts Payable $ 38,698 $ 121 $ -$ 38,819 Accrued Liabilities 3,032 --3,032 Accrued Interest Payable 8,399 --8,399 Compensated Absences 4,801 --4,801 Current Portion
of Long-Term Debt 380,000 -380,000 Total Current Liabilities 434,930 121 -435,051 Long-Term Liabilities: Long-Term Debt 1,360,000 --1,360,000 Total Long-Term Liabilities 1,360,000 --1,360,000
Net Assets Unrestricted Net Assets 1,782,320 50,673 56,229 1,889,222 Total Net Assets 1,782,320 50,673 56,229 1,889,222 TOTAL LIABILITIES AND NET ASSETS $ 3,577,250 $ 50,794 $ 56,229
$ 3,684,273
76 CITY OF SCHERTZ, TEXAS COMBINING STATEMENT OF ACTIVITIES DISCRETELY PRESENTED COMPONENT UNITS FOR THE YEAR ENDED SEPTEMBER 30, 2011 Schertz The Economic Library Parks and Development
Advisory Recreation Corporation Board Foundation Total EXPENSES Administrative Expenses $ (384,099) $ -$ -$ (384,099) Culture and Recreation -(18,003) (236,662) (254,665) Economic Development
(466,638) --(466,638) Contributions to Primary Government -In support of debt (1,383,233) --(1,383,233) Interest and Fiscal Charges on L/T Debt (61,537) --(61,537) TOTAL EXPENSES (2,295,507)
(18,003) (236,662) (2,550,172) REVENUES Program Revenues: Charges for Services -21,347 199,776 221,123 Operating Contributions and Grants 100,000 174 67,080 167,254 Total Program Revenues
100,000 21,521 266,856 388,377 General Revenues: Nonproperty (Sales) Taxes 2,352,177 -2,352,177 Interest Revenues 13,078 80 69 13,227 Miscellaneous Revenue 12,537 -859 13,396 Total General
Revenues 2,377,792 80 928 2,378,800 Change in Net Assets 182,285 3,598 31,122 217,005 Beginning Net Assets 1,600,035 47,075 25,107 1,672,217 Ending Net Assets $ 1,782,320 $ 50,673 $
56,229 $ 1,889,222
77 CITY OF SCHERTZ, TEXAS COMBINING BALANCE SHEET DISCRETELY PRESENTED COMPONENT UNITS SEPTEMBER 30, 2011 Schertz The Economic Library Parks and Development Advisory Recreation Corporation
Board Foundation Total ASSETS Cash and Cash Equivalents $ 940,542 $ 6,113 $ 56,229 $ 1,002,884 Investments 2,047,082 44,681 -2,091,763 Accounts Receivable -Sales Tax 446,315 --446,315
Accounts Receivable -Other 506 --506 Note Receivable 120,080 --120,080 Accrued Interest Receivable 2,135 --2,135 TOTAL ASSETS $ 3,556,660 $ 50,794 $ 56,229 $ 3,663,683 LIABILITIES AND
FUND BALANCE Liabilities Accounts Payable $ 38,698 $ 121 $ -$ 38,819 Accrued Liabilities 3,032 --3,032 Total Liabilities 41,730 121 -41,851 Fund Balance Nonspendable: Long-Term Note
Receivable 120,080 --120,080 Unassigned 3,394,850 50,673 56,229 3,501,752 Total Fund Balances 3,514,930 50,673 56,229 3,621,832 TOTAL LIABILITIES AND FUND BALANCE $ 3,556,660 $ 50,794
$ 56,229 $ 3,663,683 Total Fund Balances $ 3,514,930 $ 50,673 $ 56,229 $ 3,621,832 Amounts reported 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: 20,590 --20,590 Long-term liabilities
(including employee compensated absences) are not payable in the current period and, therefore, are deferred in the funds Principal (1,740,000) --(1,740,000) Accrued Interest Payable
(8,399) --(8,399) Compensated Absences (4,801) --(4,801) Total Net Assets $ 1,782,320 $ 50,673 $ 56,229 $ 1,889,222
78 CITY OF SCHERTZ, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE DISCRETELY PRESENTED COMPONENT UNITS FOR THE YEAR ENDED SEPTEMBER 30, 2011 Schertz
The Economic Library Parks and Development Advisory Recreation Corporation Board Foundation Total REVENUES Sales Taxes $ 2,352,177 $ -$ -$ 2,352,177 Operating Grants and Contributions
100,000 174 67,080 167,254 Charges for Services -21,347 199,776 221,123 Investment Earnings 13,078 80 69 13,227 Miscellaneous Income 12,537 -859 13,396 TOTAL REVENUES 2,477,792 21,601
267,784 2,767,177 EXPENDITURES Current: Administrative 396,179 --396,179 Culture and Recreation -18,003 236,662 254,665 Economic Development 1,836,643 --1,836,643 Debt Service: Principal
370,000 --370,000 Interest and Fiscal Charges 58,107 --58,107 TOTAL EXPENDITURES 2,660,929 18,003 236,662 2,915,594 Net Change in Fund Balance (183,137) 3,598 31,122 (148,417) FUND BALANCE,
BEGINNING 3,698,067 47,075 25,107 3,770,249 FUND BALANCE, ENDING $ 3,514,930 $ 50,673 $ 56,229 56,229 $ 3,621,832
79 CITY OF SCHERTZ, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE DISCRETELY PRESENTED COMPONENT UNITS (CONTINUED) FOR THE YEAR ENDED SEPTEMBER 30,
2011 Schertz The Economic Library Parks and Development Advisory Recreation Corporation Board Foundation Total Net Change in Fund Balance $ (183,137) $ 3,598 $ 31,122 $ (148,417) 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 370,000 --370,000 Amortization of Bond Issue Costs (5,167) --(5,167) Some expenses reported in the Statement
of Activities do not require the use of current financial resources and, therefore, are are not reported as expenditures in the funds: Compensated Absences (1,147) --(1,147) Accrued
Interest 1,736 --1,736 Change in Net Assets $ 182,285 $ 3,598 $ 31,122 $ 217,005
80 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 1 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
Taxable Assessed Value 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 it performs.
81 CITY OF SCHERTZ, TEXAS NET ASSETS, BY COMPONENT LAST NINE FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) 2003 2004 2005 2006 Governmental Activities Invested in Capital Assets, Net of
Related Debt $ 11,380,173 $ 16,228,134 $ 17,699,797 $ 13,257,031 Restricted 491,313 7,037,607 4,813,496 15,888,549 Unrestricted 7,448,061 985,750 6,957,173 8,759,630 Total Governmental
Activities Net Assets $ 19,319,547 $ 24,251,491 $ 29,470,466 $ 37,905,210 Business-Type Activities Invested in Capital Assets, Net of Related Debt $ 21,806,626 $ 22,901,982 $ 24,970,976
$ 24,783,839 Restricted 1,384,083 1,010,662 428,712 1,253,711 Unrestricted 5,294,283 3,988,006 5,377,968 9,879,126 Total Business-Type Activities Net Assets $ 28,484,992 $ 27,900,650
$ 30,777,656 $ 35,916,676 Primary Government Invested in Capital Assets, Net of Related Debt $ 33,186,799 $ 39,130,116 $ 42,670,773 $ 38,040,870 Restricted 1,875,396 8,048,269 5,242,208
17,142,260 Unrestricted 12,742,344 4,973,756 12,335,141 18,638,756 Total Primary Government Net Assets $ 47,804,539 $ 52,152,141 $ 60,248,122 $ 73,821,886 Fiscal Year NOTE: 2010 has
been restated to reflect prior period adjustments in Note 13. Financial data prior to fiscal year 2003 was not available.
82 TABLE 1 2007 2008 2009 2010 (Restated) 2011 $ 32,932,355 $ 44,206,232 $ 57,324,482 $ 54,010,139 $ 55,415,699 663,973 1,058,514 1,170,786 1,067,599 2,279,621 12,720,293 9,092,711 2,017,577
5,876,642 5,480,879 $ 46,316,621 $ 54,357,457 $ 60,512,845 $ 60,954,380 $ 63,176,199 $ 18,788,933 $ 41,350,184 $ 50,047,301 $ 50,778,490 $ 51,838,589 1,995,213 ----23,658,181 10,286,447
3,633,244 4,217,098 7,441,722 $ 44,442,327 $ 51,636,631 $ 53,680,545 $ 54,995,588 $ 59,280,311 $ 51,721,288 $ 85,556,416 $ 107,371,783 $ 104,788,629 $ 107,254,288 2,659,186 1,058,514
1,170,786 1,067,599 2,279,621 36,378,474 19,379,158 5,650,821 10,093,740 12,922,601 $ 90,758,948 $ 105,994,088 $ 114,193,390 $ 115,949,968 $ 122,456,510 Fiscal Year
83 CITY OF SCHERTZ, TEXAS CHANGE IN NET ASSETS LAST NINE FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) 2003 2004 2005 2006 Expenses Governmental Activities General Government $ 2,630,450
$ 2,873,573 $ 3,612,084 $ 3,957,693 Public Safety 3,705,722 4,586,498 5,558,596 6,403,122 Streets and Parks 1,182,993 1,019,101 1,134,281 1,240,956 Health 156,927 192,506 221,950 231,149
Culture and Recreation 451,215 310,013 339,124 396,078 Interest and Other Fees 499,011 707,090 862,744 823,818 Total Governmental Activities Expenses 8,626,318 9,688,781 11,728,779 13,052,816
Business-Type Activities 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 $ 19,175,559 $ 20,501,144 $ 24,456,123 $ 26,348,888 Program Revenues Governmental Activities Charges for Service: General Government $ 1,461,361
$ 1,381,802 $ 1,575,236 $ 1,310,142 Public Safety 1,033,713 1,118,241 1,475,618 1,684,786 Streets and Parks 34,248 203,579 141,523 143,254 Health 117,983 36,095 44,611 44,178 Culture
and Recreation 155,644 180,707 146,429 149,225 Operating Grants and Contributions 2,788,821 2,280,629 1,789,763 1,567,164 Capital Grants and Contributions -2,153,213 3,808,133 5,382,779
Total Governmental Aactivities Program Revenues 5,591,770 7,354,266 8,981,313 10,281,528 Business-Type Activities Charges for Service: Water and Sewer 8,135,299 7,534,841 9,308,362 11,223,658
EMS 2,014,126 1,723,611 3,443,429 3,904,818 Capital Grants and Contributions 279,913 1,045,334 2,055,366 3,148,100 Total Business-Type Activities Program Revenues 10,429,338 10,303,786
14,807,157 18,276,576 Total Primary Government Program Revenues $ 16,021,108 $ 17,658,052 $ 23,788,470 $ 28,558,104 Fiscal Year NOTE: 2010 has been restated to reflect prior period adjustments
in Note 13. Financial data prior to fiscal year 2003 was not available.
84 TABLE 2 2007 2008 2009 2010 (Restated) 2011 $ 5,603,855 $ 7,305,112 $ 7,695,768 $ 7,988,095 $ 8,493,721 5,920,046 7,093,301 7,697,131 7,829,350 8,260,411 2,702,102 3,177,145 3,815,342
4,113,949 4,423,393 272,730 306,764 360,604 344,588 365,009 450,974 681,440 800,305 897,946 946,607 1,412,066 1,982,984 1,780,791 2,188,588 2,189,935 16,361,773 20,546,746 22,149,941
23,362,516 24,679,076 9,502,039 12,379,584 13,568,065 14,434,709 15,280,871 5,114,911 2,976,112 3,365,544 3,690,007 3,659,031 14,616,950 15,355,696 16,933,609 18,124,716 18,939,902 $
30,978,723 $ 35,902,442 $ 39,083,550 $ 41,487,232 $ 43,618,978 $ 3,123,184 $ 1,968,046 $ 2,045,321 $ 2,608,285 $ 3,461,608 1,307,295 1,760,063 2,026,108 2,159,182 1,718,866 196,436 170,872
213,758 511,641 367,796 33,148 37,096 28,875 29,636 33,750 201,779 210,311 207,643 246,894 207,612 493,281 526,839 797,659 534,267 523,029 5,640,431 8,750,859 6,184,328 1,248,646 2,998,115
10,995,554 13,424,086 11,503,692 7,338,551 9,310,776 13,007,618 13,620,440 14,668,137 15,147,332 17,073,075 5,017,343 3,150,428 2,889,518 3,061,414 3,564,852 2,755,376 5,190,039 2,241,726
973,437 2,175,889 20,780,337 21,960,907 19,799,381 19,182,183 22,813,816 $ 31,775,891 $ 35,384,993 $ 31,303,073 $ 26,520,734 $ 32,124,592 Fiscal Year
85 CITY OF SCHERTZ, TEXAS CHANGE IN NET ASSETS (CONTINUED) LAST NINE FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) 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 $ (3,154,451) $ (2,843,092) $ (667,653)
$ 2,209,216 Governmental Revenues and Other Changes in Net Assets Governmental Activities Taxes: Ad Valorem $ 3,984,262 $ 4,410,567 $ 4,908,108 $ 5,705,805 Sales 2,035,655 1,703,994
2,227,282 3,136,970 Franchise Fees 671,009 659,847 786,298 961,462 Hotel/Motel 43,177 37,688 42,982 202,108 Mixed Drink 4,243 5,064 6,437 20,068 Bingo 4,528 4,749 4,946 5,124 Unrestricted
Investment Earnings 93,690 114,323 356,080 552,091 Gain Sale of Capital Asset ----Miscellaneous 16,028 58,770 83,337 112,306 Transfers 410,802 584,733 199,123 510,098 Total Governmental
Activities 7,263,394 7,579,735 8,614,593 11,206,032 Business-Type Activities Interest and Investment Earnings 94,731 61,025 170,610 473,205 Gain Sale of Capital Asset -327,900 --Miscellaneous
158,372 120,043 177,554 195,409 Transfers (410,802) (584,733) (199,123) (510,098) Total Business-Type Activities (157,699) (75,765) 149,041 158,516 Total Primary Government $ 7,105,695
$ 7,503,970 $ 8,763,634 $ 11,364,548 Changes In Net Assets Government Activities $ 4,228,846 $ 5,245,220 $ 5,867,127 $ 8,434,744 Business-Type Activities (277,602) (584,342) 2,228,854
5,139,020 Total Primary Government $ 3,951,244 $ 4,660,878 $ 8,095,981 $ 13,573,764 Fiscal Year NOTE: 2010 has been restated to reflect prior period adjustments in Note 13. Financial
data prior to fiscal year 2003 was not available.
86 TABLE 2 (Continued) 2007 2008 2009 2010 (Restated) 2011 $ (5,366,219) $ (7,122,660) $(10,646,249) $(16,023,965) $(15,368,300) 6,163,387 6,605,211 2,865,772 1,057,467 3,873,914 $ 797,168
$ (517,449) $ (7,780,477) $(14,966,498) $(11,494,386) $ 7,309,127 $ 7,841,928 $ 8,980,102 $ 9,715,645 $ 10,280,768 4,016,381 4,117,173 4,011,855 4,160,495 4,702,217 1,004,116 1,240,642
1,462,199 1,448,620 1,542,046 259,176 273,558 305,073 348,147 391,181 29,451 32,364 31,790 32,144 33,630 6,781 4,751 5,105 4,651 2,173 1,453,645 1,310,310 339,403 92,208 35,008 -23,706
17,714 20,910 -923,574 319,064 587,789 627,259 518,861 (1,224,621) -1,060,607 15,421 84,235 13,777,630 15,163,496 16,801,637 16,465,500 17,590,119 976,595 409,972 128,233 36,824 37,950
-57,527 (94,978) --161,048 121,594 205,494 236,173 457,094 1,224,621 -(1,060,607) (15,421) (84,235) 2,362,264 589,093 (821,858) 257,576 410,809 $ 16,139,894 $ 15,752,589 $ 15,979,779
$ 16,723,076 $ 18,000,928 $ 8,411,411 $ 8,040,836 $ 6,155,388 $ 441,535 $ 2,221,819 8,525,651 7,194,304 2,043,914 1,315,043 4,284,723 $ 16,937,062 $ 15,235,140 $ 8,199,302 $ 1,756,578
$ 6,506,542 Fiscal Year
87 CITY OF SCHERTZ, TEXAS FUND BALANCES -GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) 2002 2003 2004 2005 Nonspendable Fund Balance: Inventory $ 15,080
$ 8,128 $ 7,464 $ 10,571 Prepaid Items 56,060 60,825 58,087 -Total Nonspendable Fund Balance 71,140 68,953 65,551 10,571 Restricted Fund Balance: LEOSE ----Court Technology ----Court
Security ----Writing Next Chapter ----PEG Capital Fees ----Capital Improvement 1,939,678 1,212,118 8,792,947 5,135,834 Debt Service 299,074 323,166 247,293 263,740 Hotel Occupancy Fund
245,603 272,482 290,688 187,953 Tree Mitigation -168,147 167,064 326,267 Park Fund 151,483 83,671 82,835 134,275 Police Forfeiture 206,751 215,591 325,181 327,212 Library Grant 422 3,905
422 702 Tax Increment Financing 134,529 88,376 88,829 -Total Restricted Fund Balance 2,977,540 2,367,456 9,995,259 6,375,983 Assigned Fund Balance: Vehicle Replacement ----Equipment
Replacement ----Special Events ----Capital Improvement 2,704,133 1,311,429 --Recycling 1,859 1,256 1,256 6,774 10,009 Historical Committee ----Forfeited Property 19,814 ---Municipal
Court Renovation 31,401 ---Total Assigned Fund Balance 2,757,207 1,312,685 6,774 10,009 Unassigned Fund Balance 159,013 4,119,454 4,319,428 4,864,647 Total Governmental Funds $ 5,964,900
$ 7,868,548 $ 14,387,012 $ 11,261,210 Fiscal Year NOTE: 2010 has been restated to reflect prior period adjustments in Note 13.
88 TABLE 3 2006 2007 2008 2009 2010 (Restated) 2011 $ 16,706 $ 67,333 $ 46,014 $ 44,217 $ 46,473 $ 43,504 ------16,706 67,333 46,014 44,217 46,473 43,504 10,505 10,810 11,018 11,832
12,353 13,004 130,956 168,864 212,561 236,842 269,739 295,942 74,388 22,799 57,400 95,275 133,005 163,302 ---130,930 149,381 174,720 -----317,453 15,134,814 17,612,092 16,416,440 14,342,553
3,914,323 10,219,300 347,739 556,884 429,289 444,369 286,215 117,250 378,823 470,743 502,883 180,710 250,379 301,517 343,091 271,071 271,071 191,834 164,424 173,999 179,601 180,223 169,529
94,870 224,485 217,750 293,873 341,981 383,104 343,619 408,912 390,795 6,275 6,093 14,304 401 3,903 6,293 ------16,900,065 19,641,560 18,467,599 16,073,235 5,817,119 12,391,325 -199,816
206,941 7,044 7,062 7,075 -379,892 193,306 194,806 195,279 195,648 -127,500 88,778 62,263 142,465 93,447 -----162,113 12,733 6,780 14,748 ------10,149 9,940 9,940 ------------12,733
713,988 503,773 274,262 354,746 468,223 7,202,709 8,876,682 5,269,890 1,209,451 1,372,779 1,899,105 $ 24,132,213 $ 29,299,563 $ 24,287,276 $ 17,601,165 $ 7,591,117 $ 14,802,157 Fiscal
Year
89 CITY OF SCHERTZ, TEXAS CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) 2002 2003 2004 2005 REVENUES Taxes $ 5,305,902 $ 6,747,330
$ 7,322,727 $ 8,569,435 Permits and Fees 663,682 941,515 852,577 1,421,575 Service Fees 883,126 944,506 793,096 872,286 Fines and Fees 538,831 646,613 842,322 915,704 Intergovernmental
45,362 2,003,743 1,710,277 956,791 Other Revenue 877,544 287,865 490,266 659,430 TOTAL REVENUES 8,314,447 11,571,572 12,011,265 13,395,221 EXPENDITURES General Government 2,735,142 2,554,675
2,772,024 3,471,560 Public Safety 2,963,924 3,530,470 3,833,243 4,542,384 Streets and Parks 689,150 675,687 942,942 1,043,501 Health 120,530 156,927 181,074 208,499 Culture and Recreation
328,404 415,834 298,179 325,498 Capital Outlay 4,079,385 4,767,695 3,827,879 4,360,483 Debt Service: Principal 937,000 783,000 1,233,000 1,236,000 Interest and Fiscal Charges 511,811
508,166 609,522 884,069 Bond Issue Costs -46,272 111,802 -TOTAL EXPENDITURES 12,365,346 13,438,726 13,809,665 16,071,994 Excess (Deficiency) of Revenues Over (Under) Expenditures (4,050,899)
(1,867,154) (1,798,400) (2,676,773) OTHER FINANCING SOURCES (USES) Bonds Issued -3,360,000 7,750,000 -Premium on Bond Issue ----Discount on Bond Issue --(17,869) -Tax Notes Issued 400,000
---Capital Lease ----Transfers In 551,720 467,502 2,275,896 583,126 Transfers (Out) (31,156) (56,700) (1,691,163) (384,003) TOTAL OTHER FINANCING SOURCES (USES) 920,564 3,770,802 8,316,864
199,123 NET CHANGE IN FUND BALANCE $ (3,130,335) $ 1,903,648 $ 6,518,464 $ (2,477,650) Debt Service as a percentage of Noncapital Expenditures 17.5% 14.9% 18.5% 18.1% Fiscal Year NOTE:
2010 has been restated to reflect prior period adjustments in Note 13.
90 TABLE 4 2006 2007 2008 2009 2010 (Restated) 2011 $ 10,587,264 $ 13,083,505 $ 13,524,472 $ 14,780,663 $ 15,731,293 $ 16,957,498 1,475,619 1,062,054 992,953 822,105 1,330,472 1,795,667
1,820,940 1,807,098 1,592,072 1,904,703 2,297,577 2,490,829 1,157,480 1,397,101 1,387,677 1,517,821 1,655,183 1,452,610 19,278 153,349 526,839 797,659 534,267 1,048,957 710,580 2,460,832
1,752,254 1,025,103 975,925 576,875 15,771,161 19,963,939 19,776,267 20,848,054 22,524,717 24,322,436 3,817,778 5,389,340 11,607,551 6,448,135 7,072,608 7,505,139 5,020,684 5,665,671
6,638,352 7,235,501 7,409,720 7,885,119 1,162,541 1,392,923 1,545,386 1,655,204 1,756,734 1,804,659 216,655 263,918 295,156 348,448 331,860 360,746 384,127 439,767 667,995 786,860 866,441
919,608 6,127,735 5,504,679 10,281,603 14,963,950 11,347,876 2,956,511 1,155,000 1,458,000 1,910,043 4,696,928 1,768,086 2,001,070 803,664 1,377,961 1,620,178 1,950,358 2,145,155 2,008,114
165,125 52,300 122,290 191,066 -244,237 18,853,309 21,544,559 34,688,554 38,276,450 32,698,480 25,685,203 (3,082,148) (1,580,620) (14,912,287) (17,428,396) (10,173,763) (1,362,767) 15,000,000
8,076,733 9,900,000 9,681,678 -8,206,572 123,057 ----283,000 ------------319,996 (104,142) --148,294 -529,598 354,150 593,294 2,778,593 242,539 348,846 (19,500) (1,578,771) (593,294)
(1,717,986) (227,118) (264,611) 15,953,151 6,747,970 9,900,000 10,742,285 163,715 8,573,807 $ 12,871,003 $ 5,167,350 $ (5,012,287) $ (6,686,111) $(10,010,048) $ 7,211,040 15.4% 18.2%
15.0% 29.3% 19.4% 20.5% Fiscal Year
91 CITY OF SCHERTZ, TEXAS TAX REVENUE BY SOURCE – GOVERNMENTAL FUNDS LAST NINE FISCAL YEARS TABLE 5 Fiscal Mixed Hotel Total Year Property Sales & Use Franchise Beverage Bingo Occupancy
Revenue 2011 $ 10,286,251 $ 4,702,217 $1,542,046 $ 33,630 $ 2,173 $ 391,181 $ 16,957,498 2010 9,737,236 4,160,495 1,448,620 32,144 4,651 348,147 15,731,293 2009 8,964,642 4,011,855 1,462,199
31,790 5,105 305,073 14,780,664 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.
92 CITY OF SCHERTZ, TEXAS TOTAL WATER AND SEWER CONSUMPTION AND RATES LAST TEN FISCAL YEARS (UNAUDITED) TABLE 6 Fiscal Year Total Water & Water & Water & Sewer Ended Sewer Consumption
Sewer Rate Per September 30, (In Gallons) Base Rate 1,000 Gallons 2011 16,763,239 $ 18.94 $ 2.34 2010 12,313,766 18.94 2.25 2009 15,115,679 18.94 2.16 2008 8,557,792 15.94 1.92 2007
6,145,081 15.94 1.72 2006 7,142,304 15.94 1.69 2005 5,287,665 15.94 1.52 2004 4,894,003 13.70 1.47 2003 4,941,716 13.70 1.47 2002 3,774,089 11.70 1.40
93 CITY OF SCHERTZ, TEXAS PRINCIPAL WATER AND SEWER CONSUMERS CURRENT YEAR AND NINE YEARS AGO (UNAUDITED) TABLE 7 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 City of Schertz (Soccer Field) 234,035 1 1.40% -Beck Readymix 95,819
2 0.57% 105,704 2 1.04% Wal-Mart Supercenters 93,084 3 0.56% -Tri-County 35 Business Park 71,782 4 0.43% -SYSCO 57,052 5 0.34% Val Verde Apartments 44,628 6 0.27% 31,237 9 0.31% Riata
Oaks Apartments 44,606 7 0.27% Legacy Oaks Apartments 43,577 8 0.26% -Landscape of Texas 43,489 9 0.26% 59,917 6 0.59% Lennar/Newmark 42,513 10 0.25% -Comal County Senior Center -300,979
1 2.97% Ronnie Adams -100,821 3 0.99% Stan Crowley -100,220 4 0.99% Samuel Clemens High School -81,160 5 0.80% Sebastian Apartments -37,219 7 0.37% Republic Beverage Company -35,073
8 0.35% H2 Auto Inc. -30,651 10 0.30% TOTAL 770,585 4.60% 882,981
8.70% Total City Water Consumption 16,763,239 10,145,275 2011 2002
94 CITY OF SCHERTZ, TEXAS ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS (UNAUDITED) TABLE 8 Fiscal Year Ended Total Taxable Total Direct September
30, Assessed Value Tax Rate 2011 $ 1,968,808,829 0.4493 2010 1,933,159,122 0.4342 2009 1,891,409,716 0.4090 2008 1,939,016,982 0.4090 2007 1,423,205,878 0.4317 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 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.
95 CITY OF SCHERTZ, TEXAS DIRECT AND OVERLAPPING PROPERTY TAX RATES LAST TEN FISCAL YEARS (UNAUDITED) TABLE 9 Schertz-Cibolo-Fiscal Basic Debt Universal Guadalupe County Year Rate Service
Total City ISD County Road 2011 0.2993 0.1500 0.4493 1.4350 0.3449 0.5500 2010 0.2842 0.1500 0.4342 1.4200 0.3345 0.5500 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 City Direct Rates Overlapping Rates 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.
96 CITY OF SCHERTZ, TEXAS PRINCIPAL PROPERTY TAX PAYERS CURRENT YEAR AND NINE YEARS AGO (UNAUDITED) TABLE 10 Percentage Percentage of of Total City Total City Taxable Taxable Taxable
Taxable Assessed Assessed Assessed Assessed Taxpayer Value Rank Value Value Rank Value Republic Beverage Co. Distribution $ 51,762,770 1 2.63% $ 22,050,000 1 3.02% AOH-Vantage at Schertz
LLC 17,367,333 2 0.88% --San Antonio MTA LP 17,153,935 3 0.87% --Wal-Mart Real Estate Business Trust 14,529,843 4 0.74% --City Bank 14,108,720 5 0.72% --Eye Care Centers of America Inc.
13,293,056 6 0.68% --H.E.Butt Grocery Co. 12,040,678 7 0.61% 9,425,244 2 1.29% Atlantic Financial Group LTD 10,313,859 8 0.52% 7,087,559 3 0.97% EM Limited Partnership 9,857,599 9 0.50%
--Lowe's Home Center Inc. 8,284,756 10 0.42% -C & W Ranches LTD --6,354,626 4 0.87% Sycamore Apartment LTD --5,026,690 5 0.69% AER Manufacturing Inc. --4,647,442 6 0.64% Negley Paint
Co. Inc. --4,147,184 7 0.57% Guadalupe Valley Electric CO-OP --3,961,790 8 0.54% Garden Ridge Pottery --3,262,687 9 0.45% TADCO/Tri-County LTD --3,086,244 10 0.42% TOTALS $ 168,712,549
8.57% $ 69,049,466 9.44% TOTAL TAXABLE ASSESSED VALUE $ 1,968,808,829 $ 731,305,433 2011 2002 Source: Guadalupe County Tax Office
97 CITY OF SCHERTZ, TEXAS PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (UNAUDITED) TABLE 11 Fiscal Year Taxes Levied Collections In Ended for the % of Subsequent % of September
30, Fiscal Year Amount Levy Years Amount Levy 2011 $ 9,978,430 $9,895,240 99.17% $ -$9,895,240 99.17% 2010 9,639,945 9,559,899 99.17% 44,204 9,604,103 99.63% 2009 8,800,927 8,703,978
98.90% 76,047 8,780,025 99.76% 2008 7,793,405 7,711,714 98.95% 71,966 7,783,680 99.88% 2007 7,048,818 6,957,827 98.71% 77,249 7,035,076 99.81% 2006 5,645,611 5,576,559 98.78% 61,938
5,638,497 99.87% 2005 4,858,508 4,796,062 98.71% 56,798 4,852,860 99.88% 2004 4,360,470 4,252,349 97.52% 103,541 4,355,890 99.89% 2003 3,918,379 3,881,204 99.05% 34,895 3,916,099 99.94%
2002 3,163,819 3,107,209 98.21% 54,683 3,161,892 99.94% Fiscal Year of Levy Collected Within Total Collections To Date Source: Guadalupe County Tax Office
98 CITY OF SCHERTZ, TEXAS TAXABLE ASSESSED VALUE LAST EIGHT FISCAL YEARS (UNAUDITED) TABLE 12 Fiscal Year Taxable Total Taxable Total Ended Value Residential Commercial Tax-Exempt Other
Assessed Direct September 30, January 1 Property Property Property Property Value* Tax Rate 2011 2010 $ 1,223,205,066 $ 695,993,491 $ (127,667,327) $177,277,599 $ 1,968,808,829 0.4493
2010 2009 1,193,345,347 692,030,966 (126,198,829) 173,981,638 1,933,159,122 0.4342 2009 2008 1,147,403,041 656,276,237 (86,062,834) 173,793,272 1,891,409,716 0.4090 2008 2007 1,074,280,935
728,323,513 (125,049,238) 261,461,772 1,939,016,982 0.4090 2007 2006 1,392,720,883 423,317,359 (21,195,965) 400,215,580 2,195,057,857 0.4317 2006 2005 1,201,285,889 344,827,561 (16,046,859)
340,912,535 1,870,979,126 0.3977 2005 2004 1,068,235,628 262,553,018 (11,646,100) 270,602,923 1,589,745,469 0.3760 2004 2003 985,774,636 248,629,342 (10,777,023) 209,390,471 1,433,017,426
0.3825 NOTE: Financial data prior to fiscal year 2004 was not available.
99 CITY OF SCHERTZ, TEXAS RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS (UNAUDITED) General Certificates Fiscal Obligation of Tax Capital Refunding Year Bonds Obligation Notes
Lease Bonds 2011 $ 44,715,000 $ 7,910,800 $ -$ 97,188 $2,790,000 2010 37,530,000 11,575,650 -133,408 -2009 38,485,000 12,373,850 ---2008 32,790,000 13,158,700 -107,078 -2007 23,950,000
14,032,893 -215,854 -2006 18,740,000 13,560,000 -319,996 -2005 4,045,000 14,250,000 160,000 --2004 4,456,000 14,785,000 450,000 --2003 4,844,000 7,600,000 730,000 --2002 5,222,000 4,375,000
1,000,000 --Governmental Activities NOTES: a Details regarding the City's outstanding debt can be found in Note 9 to the current financial statements. b. 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.
100 TABLE 13 Certificates Public Total Revenue of Facility Refunding Tax Primary Percent of *Per Bonds Obligation Loan Bonds Notes Government Gross Income Capita $ 2,490,000 $ 5,704,200
$ -$ 2,675,000 $ 250,000 $ 66,632,188 7.84% 2,002 5,460,000 6,149,350 --310,000 61,158,408 7.14% 1,944 5,805,000 6,571,150 7,000 --63,242,000 6.92% 1,932 6,230,000 6,976,300 14,000 --59,276,078
7.06% 1,849 6,645,000 7,237,107 21,000 --52,101,854 5.88% 1,639 7,055,000 -28,000 --39,702,996 1.56% 1,262 7,445,000 -34,000 --25,934,000 1.35% 968 4,625,000 -40,000 64,000 -24,420,000
2.43% 923 4,990,000 -46,000 126,000 -18,336,000 2.01% 764 5,275,000 60,000 52,000 193,000 -16,177,000 1.93% 703 Business-Type Activities
101 CITY OF SCHERTZ, TEXAS RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS (UNAUDITED) TABLE 14 Percentage of General Certificates Actual Taxable Fiscal Obligation of
Tax Refunding Value of Year Bonds Obligation Notes Bonds Total Property 2010 $44,715,000 $ 7,910,800 $ -$ 2,790,000 $55,415,800 2.81% 2009 37,530,000 11,575,650 --49,105,650 2.54% 2008
38,485,000 12,373,850 --50,858,850 2.69% 2007 32,790,000 13,158,700 --45,948,700 2.37% 2006 23,950,000 14,032,893 --37,982,893 1.73% 2005 18,740,000 13,560,000 --32,300,000 1.73% 2004
4,045,000 14,250,000 160,000 -18,455,000 1.16% 2003 4,456,000 14,785,000 450,000 -19,691,000 1.37% 2002 4,844,000 7,600,000 730,000 -13,174,000 1.29% 2001 5,222,000 4,375,000 1,000,000
-10,597,000 1.28% General Bonded Debt Outstanding NOTE: Details regarding the City's outstanding debt can be found in Note 9 to the current financial statements. See Table 8 for the
City's property tax value data. City population data can be found in Table 18.
102 CITY OF SCHERTZ, TEXAS DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT (UNAUDITED) TABLE 15 Estimated Estimated Share of Debt Percentage Overlapping Governmental Unit Outstanding
Applicable* Debt Debt repaid with property taxes: Alamo CCD $ 542,561,545 0.11% $ 596,818 Bexar County 584,984,786 0.11% 643,483 Bexar County Hospital District 744,835,000 0.11% 819,319
Comal County 47,053,782 2.68% 1,261,041 Comal ISD 512,180,991 2.89% 14,802,031 Guadalupe County 16,964,785 19.13% 3,245,363 San Antonio River Authority 34,256,000 0.08% 27,405 Schertz-Cibolo-Universa
ISD 272,675,515 50.98% 139,009,977 Subtotal, Overlapping Debt 160,405,437 City Governmental Activities Direct Debt 55,298,550 TOTAL NET OVERLAPPING DEBT $ 215,703,987 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 9 to the current financial statements.
103 CITY OF SCHERTZ, TEXAS DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS (UNAUDITED) Assessed Value, 2010 Tax Roll $1,968,808,829 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. $ 196,880,883 Amount of Applicable Debt: General
Bonded Debt $ 55,415,800 Less Debt Service Fund Balance (117,250) 55,298,550 DEBT MARGIN $ 141,582,333 Total Net Debt as a Percentage of Debt Margin 39.06% 2002 2003 2004 2005 Assessed
Value $ 827,142,321 $1,024,412,713 $1,139,992,157 $1,292,156,383 Debt Margin $ 82,714,232 $ 102,441,271 $ 113,999,216 $ 129,215,638 Total Net Debt Applicable to Limit 4,922,926 4,520,834
4,208,707 3,781,530 Total Debt Margin $ 77,791,306 $ 97,920,437 $ 109,790,509 $ 125,434,108 Fiscal Year
104 TABLE 16 2006 2007 2008 2009 2010 2011 $ 1,397,297,729 $ 1,423,205,878 $ 1,939,016,982 $ 1,891,409,716 $ 1,933,159,122 $ 1,968,808,829 $ 139,729,773 $ 142,320,588 $ 193,901,698 $
189,140,972 $ 193,315,912 $ 196,880,883 18,392,261 23,488,500 45,466,903 50,414,481 48,819,435 55,298,550 $ 121,337,512 $ 118,832,088 $ 148,434,795 $ 138,726,491 $ 144,496,477 $ 141,582,333
Fiscal Year
105 CITY OF SCHERTZ, TEXAS PLEDGED REVENUE COVERAGE LAST TEN FISCAL YEARS (UNAUDITED) TABLE 17 Utility Less: Net Fiscal Service Operating Available Year Charges Expenses Revenue Principal
Interest Coverage 2011 $16,843,780 $13,229,037 $ 3,614,743 $ 577,824 $ 409,801 3.66 2010 14,993,648 12,399,880 2,593,768 615,400 502,629 2.32 2009 14,533,390 9,973,940 4,559,450 685,400
534,634 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 Water Revenue Bonds Debt Service NOTE: Details regarding the City's outstanding debt can be found in Note 9 to the current financial statements.
Operating expenses do not include depreciation, interest, amortization or joint venture expenses
.106 CITY OF SCHERTZ, TEXAS DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS (UNAUDITED) TABLE 18 Education Per Capita Level In Personal Personal Median Years of School Unemployment
Year Population Income Income Age Schooling Enrollment Rate 2011 33,276 $ 850,069,800 $ 27,016 37.8 15.4 12,533 5.6% 2010 31,465 856,236,720 27,212 34.4 15.4 12,330 5.7% 2009 32,730
913,919,790 27,923 36.5 13.9 11,700 5.1% 2008 32,057 839,701,058 26,194 35.1 14.0 10,991 5.0% 2007 31,788 885,836,196 27,867 36.3 14.0 9,470 4.0% 2006 31,452 2,543,051,460 80,855 36.1
18.0 8,380 4.4% 2005 26,780 1,926,713,880 71,946 35.1 15.9 7,712 3.6% 2004 26,463 1,005,594,000 38,000 32.7 15.0 7,257 4.1% 2003 24,000 912,000,000 38,000 35.1 14.6 7,245 2.4% 2002 23,000
838,994,000 36,478 35.1 14.6 6,440 2.4% 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.
107 CITY OF SCHERTZ, TEXAS TOP TEN PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO (UNAUDITED) TABLE 19 Percentage Percentage of Total City of Total City Employer Employees Employment
Employees Employment Schertz/Cibolo/UC ISD 1,615 10.39% N/A N/A Wal-Mart Stores 350 2.25% N/A N/A EyeCare Centers of America 321 2.07% N/A N/A City of Schertz 320 2.06% N/A N/A H.E.B.
Grocery Co. 300 1.93% N/A N/A Republic Beverage Company 220 1.42% N/A N/A Valero Energy 200 1.29% N/A N/A Caterpillar Inc. 154 0.99% N/A N/A Theis Distributing Co. 125 0.80% N/A N/A
Federal Express Freight 120 0.77% N/A N/A 2011 2002 Source: City Economic Development Corporation Note: Nine year principal employer history is not available.
108 CITY OF SCHERTZ, TEXAS FULL-TIME EQUIVALENT CITY GOVERNMENTAL EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS (UNAUDITED) TABLE 20 Function 2002 2003 2004 2005 2006 2007 2008 2009 2010
2011 General Government City Manager 4 3 4 4 3 4 7 7 6 6 Court Support 3 3 4 4 4 4 0 0 0 0 Municipal Court 2 2 2 2 3.5 5 6 4 5 5 Customer Relations 0 0 0 0 0 2 4 4 4 3.5 Planning and
Zoning 3 2 2 2 3 4 5 4 4 4 Facility Maintenance 5 5 6 6 6.5 9 11 10 13.5 14.7 City Secretary 2 2 2 2 2 2 2 2 2 2 Media Relations 1 1 1 1 1 2 3 3 3 3 Records Management 0 0 1 15 2 2 3
3 1 1 Engineer 0 0 0 0 0 1 3 1 2 2 GIS 0 0 0 0 0 0 0 4 2 2 Information Tecynology 1 2 2 2 3 3 3 3 3 4 Human Resources 1 2 2 2 2 2 3 3 4 4 Finance 4 4 5 5 5 5 6 6 6 6 Purchasing 0 0 0
0 0 1 2 2 5 5 Fleet Service 2 2 2 3 3 3 3 3 3 4 Public Safety Police 44.5 46.5 50.5 53.5 62 66 69 70 67 69.1 Fire 24 24 30 31 32 32 32 32 32 32 Inspections 5 6 6 6 6 8 8 7 6 7 Marshal
Services 0 0 0 0 0 0 0 5 5 8 Health Animal Control 5 5.5 5 5 5 5 6 6 6 6 Parks and Culture Parks 4 5 6 7 7 7 9 8 8 8 8.5 Pools 7.5 8 14.5 15 12.5 12.5 0 0 0 0 Civic and Community Centers
0 0 0 0 0 1 1 1 1 2 Library 7.5 7 8.5 8.5 9.5 9.5 14 15 14 14.5 Public Environment Streets 9 9 13 12 11 11 13 13 13 14 Public Works Public Works 6 6 6 6 6 6 6 6 6 4 Business Office 11
12 11 9 10 9 10 10 10 10 Water and Sewer 11 14 15 15 17 19 14 16 15 17 Drainage 0 0 0 0 0 5 6 7 7 7 EMS 27 27.5 28 32 32.5 33.5 50 54 44 36.2 Economic Development 2 1 2 2 3 3 3 4 4 3
TOTAL 191.5 199.5 228.5 250 251.5 278.5 301 313 301.5 304.5 Full-Time Equivalent Employees as of September 30, Source: City Adopted Budgets
109 CITY OF SCHERTZ, TEXAS OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS (UNAUDITED) Function 2002 2003 2004 2005 2006 General Government Building Permits Issued 2,812
7,119 3,055 3,434 9,948 Schertz Tales Number of Magazines printed -----Police CFS 10,743 11,089 11,875 12,770 16,642 Arrests 666 670 631 729 526 Traffic Violations 8,863 9,157 9,652
11,157 10,487 Accidents 857 875 1,127 1,169 1,192 Fire Numer of Rescue/Other Responses 1,058 929 1,082 1,131 1,216 Number of Fire Responses 76 89 90 128 129 Number of Inspections 202
254 301 331 356 Number of Training Classes Conducted 87 186 213 136 136 Number of Pre-Plan Inspections N/A N/A N/A N/A N/A Marshal Service Warrants Issued N/A N/A N/A N/A N/A Warrants
Cleared N/A N/A N/A N/A N/A Food Establishment Permits N/A N/A N/A N/A N/A Food Establishment Inspection N/A N/A N/A N/A N/A Foster/Adoption Inspections N/A N/A N/A N/A N/A Parks Facility
Reservations 178 300 333 294 416 Community and Civic Centers Civic Center -----Community Center Rentals -----North Community Center Rentals N/A N/A N/A N/A N/A Animal Services Number
of Animals Handled N/A N/A N/A N/A N/A Number of Adoptions N/A N/A N/A N/A N/A Number of Return to Owners N/A N/A N/A N/A N/A Number of Transfers N/A N/A N/A N/A N/A Library Annual Circulation
183,467 225,573 238,602 257,765 276,873 Library Visits 142,258 162,263 171,811 175,976 181,603 Library Program Attendance 3,607 4,328 5,170 5,254 5,064 Registered Users 9,320 12,779
14,492 17,101 19,342 Water New Connections 1,241 439 425 425 532 Water Main Breaks 21 18 26 39 46 Total Consumption (thousands of gallons) 10,177,465 10,747,349 10,373,621 11,030,621
13,322,380 Daily Average Consumption (thousands of gallons) 28,271 29,854 28,816 30,639 37,007 Peak Daily Consumption (thousands of gallons) 5,616 6,757 6,869 6,939 10,540 Total Customers
7,311 8,045 9,389 9,673 10,118 Average Use Per Connection 4,682 3,565 6,329 5,957 7,060 Sewer Total Customers 6,511 7,261 7,887 8,664 8,990 Facilities Maintenance Number of Buildings
Maintained 8 8 9 9 12 Square Footage 73,505 73,505 89,452 89,452 111,642 Fiscal Year Source: Various City Departments NOTE: Indicators are not available for EMS function.
110 TABLE 21 2007 2008 2009 2010 2011 5,811 2,869 5,181 4,806 4,950 72,000 108,000 120,000 144,000 168,000 25,478 37,829 36,319 37,269 26,205 608 719 873 790 762 13,461 18,820 20,452
19,259 13,231 1,484 1,475 1,491 1,606 1,575 1,459 978 1,536 1,671 1,657 103 141 135 76 110 302 461 447 425 616 694 595 264 107 142 N/A N/A 452 642 536 N/A N/A 5,974 5,444 4,141 N/A N/A
3,836 4,023 3,985 N/A N/A 134 129 118 N/A N/A 209 202 244 N/A N/A 34 27 18 516 983 671 719 237 --484 594 354 ---635 666 N/A N/A N/A N/A 241 N/A N/A 1,804 2,021 1,802 N/A N/A 255 249
257 N/A N/A 252 279 313 N/A N/A 415 451 300 292,909 278,826 263,131 392,528 414,074 179,630 175,435 188,118 257,235 254,934 6,680 7,444 10,499 10,610 13,767 19,595 23,327 20,360 24,628
28,589 91 1,474 446 509 439 29 72 72 25 76 11,535,927 14,460,239 15,115,679 12,313,766 16,763,239 31,606 39,617 38,550 33,736 45,927 5,379 5,804 7,520 7,040 11,000 10,598 10,900 10,198
10,134 12,234 1,089 6,378 6,913 5,054 5,725 9,391 6,378 9,974 9,499 10,907 14 16 19 19 19 127,589 135,091 166,591 166,591 166,591 Fiscal Year
111 CITY OF SCHERTZ, TEXAS CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS (UNAUDITED) Function 2002 2003 2004 2005 2006 Police Stations 1 1 1 1 1 Patrol Units 11
21 26 27 34 Fire Stations 1 1 1 2 2 Training Facility 1 1 1 1 1 Fire Vehicles 9 11 11 11 12 Marshal Service Vehicles N/A N/A N/A N/A N/A Streets Streeets, paved (miles) 100 102 102 102
102 Streets, unpaved (miles) 9 9 9 9 9 Sidewalks (miles) 17 17 17 21 32 Parks and Recreation Parks 7 7 7 7 7 Playground 117 20 20 20 20 Swimming Pools -1 1 1 1 Baby Pools -1 1 1 1 Baseball/Softball
Diamonds 8 12 12 12 12 Soccer Fields -----Community Centers 1 1 1 1 1 Animal Control Control Vehicle 1 2 2 2 2 Library Facility 1 1 1 1 1 Volumes in Collection 39,062 41,275 46,961 49,289
52,818 Water Number of Reservoirs --1 1 1 Number of Pump Stations --1 1 1 Water Mains (Miles) 149 155 159 166 171 Sewer Sanitary Sewers (Miles) 54 54 54 54 54 Storm Sewers (Miles) 4
4 4 4 4 Facilities Maintenance Vehicles 4 4 4 4 4 Generators 2 2 2 3 3 Fiscal Year Source: Various City Departments NOTES: No Capital Asset indicators are available for the General Government
or EMS function.
112 TABLE 22 2007 2008 2009 2010 2011 1 1 1 1 1 33 33 38 40 42 2 2 2 2 2 1 1 ---12 14 13 13 13 N/A N/A 5 7 8 107 122 124 125 132 9 7 7 7 5 32 50 50 50 100 7 7 11 12 17 20 20 20 19 15
1 2 2 2 2 1 2 2 2 2 12 12 12 12 9 --12 12 12 1 2 2 4 4 3 3 3 3 3 1 1 1 1 1 56,282 60,650 64,400 71,929 73,904 -----2 -5 5 5 177 182 188 190 192 59 71 78 78 84 6 8 9 9 10 4 4 5 5 5 3
3 3 3 3 Fiscal Year
113 COMPLIANCE SECTION
114 INDEPENDENT AUDITOR’S REPORT 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 To the Board of Directors City of Schertz We have audited the financial statements of the City of Schertz, as of and for the year ended September 30,
2011 and have issued our report thereon dated March 13, 2012. 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. 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 opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of 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. A deficiency in internal control 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
material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the City of Schertz’s
financial statements will not be prevented or detected and corrected on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described
in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be significant deficiencies or material
weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above.
115 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 effect on the determination
of 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 in a separate letter dated March 13, 2012. This report is intended for the information and use of management, City Council, Audit Committee,
State and Federal Awarding Agencies and others within the organization and is not intended to, and should not, be used by anyone other than these specific parties. Armstrong, Vaughan
& Associates, P.C. March 13, 2012
116 INDEPENDENT AUDITOR’S REPORT REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN
ACCORDANCE WITH OMB CIRCULAR A-133 March 13, 2012 To the Board of Directors City of Schertz Compliance We have audited the City of Schertz compliance with the types of compliance requirements
described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that could have a direct and material effect on each of the City of Schertz’s major federal
programs for the year ended September 30, 2011. The City of Schertz’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of
findings and questioned costs. Compliance with requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of the City
of Schertz’s management. Our responsibility is to express an opinion on the City of Schertz’s compliance based on our audit. We conducted our audit of compliance in accordance with auditing
standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General
of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform
the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major
federal program occurred. An audit includes examining, on a test basis, evidence about the City of Schertz’s compliance with those requirements and performing such other procedures as
we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the City of Schertz’s
compliance with those requirements. In our opinion, the City of Schertz complied, in all material respects, with the compliance requirements referred to above that could have a direct
and material effect on each of its major federal programs for the year ended September 30, 2011.
117 Internal Control Over Compliance The management of the City of Schertz is responsible for establishing and maintaining effective internal control over compliance with requirements
of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered the City of Schertz’s internal control over compliance
with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance,
but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City
of Schertz’s internal control over compliance. A deficiency in internal control over compliance 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 and correct noncompliance with a type of compliance requirement of a federal program on a timely basis.
A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance such that there is a reasonable possibility
that material noncompliance with a type of compliance requirement of a federal program will not be prevented or detected and corrected, on a timely basis. Our consideration of internal
control over compliance was for the limited purpose described in the first paragraph of this section was not designed to identify all deficiencies in internal control that might be deficiencies,
significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above.
This report is intended for the information and use of management, City Council, Audit Committee, State and Federal Awarding Agencies and others within the organization and is not intended
to, and should not, be used by anyone other than these specific parties. Respectfully submitted, Armstrong, Vaughan & Associates, P.C. March 13, 2012
118 CITY OF SCHERTZ SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS SEPTEMBER 30, 2011 FINDINGS -None
119 CITY OF SCHERTZ SCHEDULE OF FINDINGS AND QUESTIONED COSTS – FEDERAL AWARDS FOR THE YEAR ENDED SEPTEMBER 30, 2011 Summary of Auditor’s Results A. Summary of Auditor’s Results 1. The
auditor’s report expresses an unqualified opinion on the financial statements of the City of Schertz. 2. There were no deficiencies, significant deficiencies or material weaknesses disclosed
during the audit of the City of Schertz. 3. No instances of noncompliance material to the financial statements of the City of Schertz were disclosed during the audit. 4. The auditor’s
report on compliance with requirements that could have a direct and material effect on each major program and on internal control over compliance in accordance with OMB Circular A-133
for the City of Schertz expresses an unqualified opinion on all major federal programs. 5. Major programs tested are as follows: A) United States Department of Energy Pass thru Comptroller
of Public Accounts 1. ARRA – Energy Efficiency and Conservation Block Grant/CFDA No. 81.128 2. ARRA Distribution Renewable Energy Grant/CFDA No. 81.041 6. The threshold used to distinguish
between Type A and Type B federal programs was $300,000. 7. The City of Schertz was classified as a high-risk auditee in the context of OMB Circular A-133. B. Findings Relating to the
Financial Statement Which are Required to be Reported in Accordance with Generally Accepted Auditing Standards None. C. Federal Award Findings and Questioned Costs for Federal Awards
None.
120 CITY OF SCHERTZ SCHEDULE OF EXPENDITURES OF FEDERAL AND NON-FEDERAL AWARDS FOR THE YEAR ENDED SEPTEMBER 30, 2011 Federal Federal Grantor/Pass-through CFDA Federal Grantor/Program
Title Number Expenditures UNITED STATES DEPARTMENT OF JUSTICE Bullet Proof Vests Partnership Program 16.607 $ 3,543 U.S. DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT PASS THROUGH AGENCY: COUNTY OF BEXAR Community Development Block Grant 14.218 220,000 U.S. DEPARTMENT OF ENERGY PASS THROUGH AGENCY: TEXAS COMPTROLLER OF PUBLIC ACCOUNTS
ARRA -Energy Efficiency and Conservation Block Grant 81.128 35,000 ARRA Distribution Renewable Energy Grant 81.041 490,928 TOTAL FEDERAL AWARDS EXPENDED $ 749,471
121 CITY OF SCHERTZ NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AND NON-FEDERAL AWARDS FOR THE YEAR ENDED SEPTEMBER 30, 2011 Basis of Presentation The accompanying schedule of expenditures
of federal awards includes the federal grant activity of the City of Schertz and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance
with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts
presented in, or used in the preparation of, the general purpose financial statements.