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CAFR FY 1987-88 I I I I I I . . J I ,. I I I I I ,I City of Schertz, Texas Comprehensive Annual Fmandal Report For The Fiscal Year Ended September 30, 1988 t' , let-- IO()!C ~~ jJP~ MELICK, ARMSTRONG & VAUGHAN, P.C. CEATlFIEC PUBLIC ACCOUNT"NTS 433 KITTY HAWK. SUITE 113 UNIVERSA~ CITY, TEXAS 78148 TE~EPHONE (512) 658-6229 HONORABLE CITY COUNCIL CITY OF SCHERTZ Our examination of the financial statements of the various funds and account gr!,ups of the City of Schertz for the year ended September 30, 1988, included seiected reviews ,and tests of management procedures and internal accounting controls. Attachment 1 to this letter defines internal accounting controls and the purpose and extent of our evaluation of these controls. Generally, the areas we examined evidenced good management and strong initiative. City officials forecast continual growth in the city operations. This justifies and emphasizes continuing improvements on controls, organization and management systems in areas where the city can streamline operations and increase productivity. We discuss Some of these areas below: PURCHASING Our review of disbursements indicated that most were supported by purchase orders or otherwise evidenced approval for payment. However, invoices billed against ongoing contracts with the city did not always evidence this review and approval before payment. For example, the city receives periodical billings against contracts for solid waste disposal, legal fees, engineering fees, and insurance coverage. While such services were originally authorized in contracts, there is a need to review individual invoices before payment. Procedures followed by the city cause such invoices to flow through the City Secretary and City Manager before delivery to bookkeeping' for payment. Such invoices were not always initialed to indicate approval for payment. REVENUE BOND RESERVE ACCOUNT Correspondence from NCNB and discussions with bank officials indicate they were not. aware that balances held in Schertz's reserve account were covering more than the 1968 issue. This resulted in the use of reserve account funds to make a principal and interest payment on a bond' ($32,187.50) and return of Schertz's check for the same amount. City officials should assure bank officials are aware of total reserve requirements. NCNB has moved all of Schertz'S funds into an AIM Treasury Fund. Although the AIK Treasury Fund invests in government securities, this may not fully comply with the revenue bond reserve requirements. This matter has been referred to . the city's financial advisor on bond debenture agreements to determine whether investment in this fund is authorized. +N~ ~pS l3.etl t;;'>/c<L u)/S Lff\S E. 'S AT"!! et\o, +i:>r ~ J SAFES ACCOUNTS RECEIVABLE WRITE-OFFS SAFES write-offs of uncollectible accounts have been increasing in recent years. During fiscal year 1986/87 such write-offs totalled $15,300, or 19% of revenues ($81,000). Fiscal year 1987/88 write-offs were $20,244 or 25% of revenues ($81,107). As of September 30, 1988, $7,246 in accounts were one year old and collection of these accounts was improbable. At that rate, the fiscal year 1988/89 write-offs will exceed $28,000. We attempted to confirm a statistical sample of the September 30, 1988 accounts less than a year old. Our sample had an unbillable address for 20% of these accounts. Collection efforts for the remaining 80% of the 9-20-88 accounts $30,547 and future accounts could be improved. Individually, the accounts are for such small amounts ($9 to $200) that use of a collection agency or attorney may not be practical. However, the Retail Merchants of San Antonio offer a low cost credit bureau collection approach which might be appropriate. The city is reviewing information provided by this organization. ANIMAL SHELTER CASH CONTROLS The animal shelter collects fees related to its operations (sale of pet licenses, impoundment fees, etc.). While we were able to account for receipts recorded by shelter personnel, controls could be improved. Funds collected were not always deposited with the city in a prompt manner. In our sample month, monies received from the customers on the 12th of the month were not deposited until the 31st, even though there were deposits made on the 19th and 21st of the month. Refunds were made from cash receipts. City policy is to pay all refunds by separate check. Proceeds from the sale of pet licenses were not deposited promptly. The receipt used to deposit these monies did not reference the license numbers sold. BUDGETING FOR CAPITAL OUTLAYS Accounting for purchases of equipment and other fixed assets has improved significantly due to the implementation and continued improvements of the computer software package designed for this purpose. However, the purchase of substantial amounts of equipment from expense accounts rather than capital outlay accounts complicates accounting and budgeting control. Better projections of such purchases in the 'budget and use of capital outlay accounts in accounting for purchases would simplify the process and enhance budgeting control. POLICE PROPERTY ROOM At the request of the city's audit committee, we 'performed a review of the police property room. We noted that the police department has in its possession a large number of items, some of which could be related to a specific case and some whose origin was unknown. In order to improve control over items of evidence we recommended: I 1. The city obtain a court order, if possible; to sell at auction all items of evidence not required to prosecute a case and place the proceeds in the general fund. 2. The" city adopt November 29, implementation. detailed property 1988 letter) and control procedures (outlined in our train police officers in their LIBRARY PETTY CASH The library was maintaining an informal cash fund. A portion of the revenues for this fund were from fines, copy charges, and fees for duplicate library cards. These fees related to the use of city owned equipment, but were generated by both city employees and volunteers. Funds were used for supplies, postage, travel, books and refunds. Generally, when funds on hand exceeded $100, the excess was deposited with the city. Cash controls would be improved by the city's establishment of a $100 petty cash fund at the library. All cash proceeds should be deposited as received. All expenditures should be documented, either as petty cash or check disbursements. The Council may want to adjust the budget to reflect these revenues and expenditures and to insure excess revenues are retained for use by the library. GASOLINE CONTROLS The September 30, 1988, physical inventory of gasoline supplies resulted in a $2,006 adjustment for fiscal year 1987/88. While some variances are anticipated over a 12 month period, and this adjustment is less than in previous years, it is still too high. A city employee, on his own initiative, further analyzed FY 87/88 gasoline consumption and noted that most losses occurred on leaded gasoline, During this 12 month period, he had carefully monitored unleaded fuel operations, including the observation of deliveries. Subsequent to this analysis he started monitoring leaded fuel operations and is also observing deliveries of leaded fuel. A meeting with the distributor resulted in other suggested controls which the city is considering. Yours truly, Melick, Armstrong & Vaughan, P.C. , ATTACHMENT 1 As part of our examination of the financial statements of the various funds and account groups of the City of Schertz for the year ended September 30, 1988, we made a study and evaluation of the Cities system of internal accounting control to the extent we considered necessary to evaluate the system as required by generally accepted auditing standards. Under these standards, the purposes of such an evaluation are to establish a basis for reliance on the system of internal accounting control in determining the nature, timing, and extent of other auditing procedures that are necessary for expressing an opinion on the financial statements and to assist the auditor in planning and performing his examination of the financial statements. The objective of internal accounting control is to provide reasonable, but not absolute, assurances as to the safeguarding of ,assets against loss from unauthorized use or disposition, and the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of a system of internal accounting control should not exceed the benefits derived and also recognizes that the evaluation of these factors necessarily requires estimates , and judgements by managements. There are inherent limitations that should be recognized in considering the potential effectiveness of any system of internal accounting control. In the performance of most control procedures, errors can result from misunderstanding of instruction, mistakes of judgement, carelessness, or other pJrsonal factors. Control procedures whose effectiveness depends upon s+gregation of duties can be circumvented by collusion. Similarly, control procedures can be circumvented intentionally by management either with respect t6 the estimates and judgements required in the preparation of financial statements. Further, projection of any evaluation of internal accounting c6ntrol to future periods is subject to the risk that the procedures may b~come inadequate because of changes in conditions and that the degree of cI'mpliance with the procedures may deteriorate. Our examination of the financial statements was made in accordance with g~nerally accepted auditing standards. It included a study and evaluation of t~e Cities system of internal accounting control for the year ended September 3ID, 1988, and was made for the purposes set forth in the first paragraph of t~is report. This examination would not necessarily disclose all weaknesses in the system because it was based on selective tests of accounting records abd related data. I "r . . ~~w~"\ ~>\4 ~9 ~ RlIl TIE DIRECf DEPOSIT Of' PAnEJaS FI!al TIE STATE OF TEXAS: PIlOf I'llOQWl This Agreement for Direct Deposit of pa.,ments fraJI the State of Texas: Pilot Progr.am (her~inafter referred to as the "Agrement.) is entered into between the Carptroller of Ptbl ic ACCCUlts (hereinafter referred to as "Comptrollertl)6 the Texas State Treasury Department (hereinafter referred to 8S "TreaSury"), and (hereinafter referred to as "Vendo,...,. The tenas ard i:orditions of the Agreement are as follows. SECTI(JrI'. RECITALS. WHEREAS. Conptroller has been authorized to establish and operate an electronic furds transfer system U'lder TEX. GOV'T cooe: ANN. ! 403.016(8)(4) (Vernon 1988) for the purpose, 8mOf"Q others, of directly depositing payments from the State of Texas to vendors; \lHEREAS. Carptroller .-ld Treasury have decided to operate _ pilot progr.. for the direct deposit of pa-yments fran the State of Texas in order to test the electronic: transfer of fln:fs system before begirning a. full scale direct deposit program; WHEREAS, Conptrotler and Treasury have contracted with a financial institution for the purpose of originating electronic flllds trar'6fers thrOugh the Automated Clearing House Of" the Federal Reserve's wire transfer system.. or both; 1JHEREA$, C~troller has contracted with certain state agencies for the purpose of initiating Credit Entries in payment of sorrr or all of their obligations to Vendor; \lHEREAS, Vendor wishes to participate in" the" pilot progrcn al'd have CoRptroller initiate Credit Entries to Vendorls checking accOUlt in pa~t of obl igations owed by state agencies to Vendor pursuant to the terms of the Agreement; and \lHEREAS, CorrptroUer is willing to initiate such Credit Entries in accordance with the Agreenent. NCU, THeReF~E.. in consideration of the lUtual proalises contained in the Agreement" and other good and valuable consideration, the receipt and sufficiency of which is ac~tedged, the parties agree as follows. SECJ'10Il 2. DEFINITIONS. The following words ard tenns shall have the meanings indicated in the A9reement~ AccCUlt - A checking accOUlt mintained by Vendor at a financial institution that is lA8intained solely for business purposes and that has been designated by VIIl!'J'ldor in accordanc:e with the Agreement to receive credit entries fronl Participating State Agencies. Credit Entry - An electronic t.-.,sfer- of funds fl'Ul the State Treasury to the ACCCUlt. Custodial State Agency - The Participating State Agency that Vendor contacted to set.up the Accomt for receiving, Credit Entries in. accordance with the Agreeatent.. Debi t Entry . A reversal of . Cred; t Entry. ~articipllting State Agency - A state agency w~th W'aicb C~rol,rer" .-d Treasury have contracted to ~ I; r- .initiate Credit Entries in payment of that agencyls c:Ci igations to certain vendors. Paying ,state Agency" - A Participating State Agency th.at is the payor concerning a Credit Entry. Rules. The rules an::I requirements of the National Automated Clearing House Association (MACHA) concerning Cash Con:::entration Disbursement, the Federel Reserve System's Regulation E, an:! C~roller. SECrllJl 3. WTIDlIZATllJI. Vendor authorizes Carptroller to initiate Credit and Debit Entries to the AecOl.llt in accordance with the Rules and the tenrs of the Agreement for obligations owing fran time to time by Participating State Agenc:ies to Ven:Jor. Vendor understands and acknowledqes that by siqninq the Aqreetrent. Vendor consents to beim oaid ciJrinq the duration of the AQreement via Credit Entries for all BmOII1tS owinq to Vendor'''' frail aU Particioatinq State- AQencies. Verdor shall .not have the OO\.Ier to revoke this consent exceot bv contactinq the CustodiaL State Aqency to cancel the eliqibil itv of the ACCOU'lt to receive Credit Entries. A list of Participating State Agencies and their agency rurbers is attached to the Agreement as Exhibit 1. Notwithstandi~ anything else in the Agreenent# neither Cc:mptroller nor a Paying Stat~ Agency is recpJired to pay Vendor via ~redit Entries. C~troller ard Paying State Agencies specifically reserve the option to pay Vendor via a state warrant.. In addition. Cafll"troller reserves the right to issue a state warrant to Vendor even if a Paying State Agency desires Cooptroller to initiate Credit Entries to Vendor. Catytrolter shall not be required to initiate a Credit Entry in an arI'lOU"lt equal to or greater than S100 .illion. SECTION ,. COA..IAJICE VITH RlJ..ES. Vendor shall coq>ly with and be bolrd by the Rules as in effect from time to time inclu::Hng. without li.ntation. Part 8# section VI of the MACHA Operating Rules. SECrllJl 5. .oa:a>TAIltE NIl RElUIII OF ClEIlIT ElnRIES. Neither Vendor nor its financial institution is req.Jired to accepc any Credit Entry initiated U"Ider the Agreement. However. 8f'rt/ Credit Entry that Vendor or its financial institution rejects IJIJSt be returned in accordance with the Rules. Neither Coontroller. Treasury. nor any Pavinq State AQenCV shall be liable for the cons~es of Verdor's finandal institution.s" failure to COflt)ly with this oaraqradt. _ The State of Texas and its Participating ~tate Agencies shall not be deemed in default on any' obligation. suffer any loss of discount# or incur'any penalty. inte"rest.oor late charge by reason of the retum of lIn'f Credit Entry. so long as the entry was initiat~ in accordance with the teflllS of the Ag~t. This paragraph specifically awlies to the interest that .ight otherwise be payable lIder the Texas Pr~ p~ Act. TEX. REV. ClV. STAT. ,ANN. art. 601f (Vernon s,w. 1981ll.. Notwithst.-.fing eny statement contained in or IItlT'f infonnation transmitted with: any Credit Entry and notwithstanding the failure to return IItf( Credit Entry in accordance with the Rules, Verdor shall not be deemed to have accepted ~ Credit-Entry as being in the correct amot.nt if. within 30 days after receipt of the credit Entry by Vendor., financial institution, .Vendor prOVides written notice to the Pay.ing State AQenc:y of the di screpency. SECrllJl 6_ CIIBIIT RlR ElnRIES. Unless a Credit Entry is returned in accordancllit with the Rules, Ven:Ior shall# as of the date" the aru..rlt of suc:II Credit 'Entry is credited' to the Acc,ou>t, credit the l'llyil'Q S'tate Ager<:y with' the ...,..,t of each Credit Entry receiwd. The accrual of interest or other charges payable with respect to the amor.ntof such 2 - ,. Credit Entry, if any, shalt cease at that tilDl!' ~en if Vendor's finaric:ial institution fails. refuses. or is t.nable to oass on the credit entry information to Vendor. SECfllJl 7. CI1EIIIT ElfTRY IMRRMATllJI. Each Credit Entry initiated \.I"Ider- the Agreement shall be acconpanied by the following information: 1. verdor1s invoice nutber- t.p to seven digits (if ard as StWlied to Conl>tr-oller- by the Paying State Agency); 2. the vou;:her rUDer of the Paying State Agency (if supplied to Cc:lnptroller by that agency); 3.- the agency runber of the payil'll State Agency (Exhibit t to the Agreement has a table of agency names and rurbers); and 4. the telep,one ruber of the Payi~ State Agercy. Neither Conptroller. Treasury. nor any Pavinq State Aqency shall be liable for the failure. inability. or refusal of vendor1s financial institution to qiYe ven:for the Df"Kedim credit entrv infonnation. SECTllJI 8_ TIlE Aa:DMT. Before. CCIq)troller- can Imtlate Credit Entries in accordance with the Agreement, Vendor IWSt provide certain information conc:eming the checking ac:cOUlt ven::tor- wants to !,eceiYe those entries. Dlce that informatiOfl has been provided, the chec:k.ing 8CCOlnt becoIAes the AcCOUlt for the purposes of the Agreement. Vendor shall provide the reqJired information concerning the chKk.i~ &CCOU1t by executing the Vend::tr Direct Deposit Application fonn. This fo..... can be obtained only fraa Partic.ipating State Agencies. The.form rrust be H.led with. a Participating State Agency and lUSt not be sent d"irectly to C~troller or Treasury. Vendor may delete or nx:Iify the information concerning the ACC:Ol.I1t only by contacting the CUstodial State Agency. The CUstodial State Agency will require Vendor to execute a Verdor Direct Deposit Appl ication fom. The Custodial State Agency will traflSllit the infonnation on that fOral to Conptroller. The establishment 0,. deletion of the Acc.oult, or the nx:Iification of information concerning the ACCOlX1t, will be effective according to the following sched.de. If C~roHerr'feceiYe$ the information contained on the-Vendo,. Oirect Deposit Application fona by no later than the 1~th of . IlIClOth, then the changes will be effective on the.....12th of the fOllowing IIJI'lth. If Cotrptrolle,. recei't'eS that information after the 15th of a IOOI'lth, then the changes will be effective on the 12th of the second IlIOrlth thereafter. The preceding schedule is necessary in order to allow sufficient tilRe for C~roller to ~rify the infOfTlBtion on the Vendor Direct DeposH AppI. ication fo.... in accordance with the MACHA. ~ating Rules. ff Verdor' is a natural person, Vender Ekes the followiru representation to ~tf'Oller. The Accotnt shall, at all tillleS, consist solely of . checking acCOU'lt that vilt be lMintained exclusively for b.Jsiness purposes and not for personal, f_lly, household, or ant other non-business purpose. SECTllJI 9. llJESTllJIS aJlCBtIIl"" CI1EIIIT lJt DBIIT ElfTRIES lJt TIE _. Vendor shall contact the Paying State Agency if it has questions concerning a Credit or Debit Entry. However, if Vendo,. receives: .. .....identified Credit or Debit" Entry, Vendor shall first contact its financial instituticn to obtain infOf'Ntion canceming that entry. If the financial institution is l..nable to provide that infonution,. then Vendo,. IMY contact Conptroller directly as follows. 3 0:.:";, COMPTROLLER OF PUBLIC ACCOUNTS P.O. BOX 13528 AUSTIN, TEXAS 78711 Attention: JOYCE BALLARD or GARY GRISWOLD Telephone nult>er: 512/463-4535 or 512/463-4455 Vendor _y contact IIrrf Participating State Agency if Verdor has any questions concerning the Agreement.. ~roller shall contact either a Participating State Agency or Vendor if he has any qJe$tions concerning Credit or Debit Entries or the Agreement.. Vendor can be contacted as follows.. Attention: Telephone nult>er: Vendor shall notify Cmptrolter in writing at the ad:fress listed in this- sect.ion when Vendor's address 01" telephone nurber 01" the identity of the per~ .Conptroller should contact c~. Verdor shall ensure that C~roller receives this notice no later than ten days after the aforementioned changes.. SECTIOIl 10. LIABILITY OF THE PAIlTIES. Vendor, the State of Texas, and ~articipatjng State Agencies,. inch.ding Caf1:>troller and Treasury. shall not be liable for the act or Cl'Qission of any Autanated ctearing House, financial institution, or other person Z- except as specified in the Agreement. Vendor agrees that Corrptrolter and Treasury shall not ~ liable for damages arising out of delays caused OI"_errol"$ CCllmlitted by . Participating State Agency, a Paying State Agency, or a Custodial State Agen:y regarding the addition or deletion of the ACCOlnt, or the modification of infonAation concerning the Ac:coc.nt. SECTIOIl 11. Sf... PAnerrs OF CRSlIT EIIT1lIES; DEBIT E1fTl1IES. Cccptroller.. on the behalf of the State of' Texas, reserves the same ri!tlt to stop payment of Credit Entries that would have existed if individJal warrants had instead been issued ard delivered to Vendor. V~ consents to such stop payments. Vendor also. consents to Calptroller initiating Debit Entries to.the Accou1t whenever. in the jl.dgment of CoIJptroller or- ~ Paying State ~._ en erroneous Credit Entry has been Made to the AccoI.nt.. Carptroller .-y initiate Debit Entries without notice to Vendor. SECTIIII 12. EFFECrI'IE DATE _ 1EIlOI1....T101l. " The Agreeooent becaoes effective <.p:ln the sil7ling thereof by Verdor so long as none of the te.... of the Agreellent are changed without the expressed written consent ..of COlIptroller. No ParticiDetim State _Mencv._ 4 ..... " cuStcxlfal State Aqenc:v. PayinQ-State Aqencv. or arw other oerson or entity has the authority to alter or add additional terms;-to. the Aqr~t on Carotrollef"s or Treasury's behalf. VendorcarvlOt tenainatethe Agreement itself. However, Verdor' my rescir'd its consent for Credit Entries bt 'notifying the Custodia.l State Agency that Vendor Wa"'Its to cancel the eligibfl ity of the AeCOU'lt to receive Credit Entries. The Custodial State Agency will, in turn, have Vencbr execute the Vendor Direct Deposit Awlicaticn fonn and transmit the infonnetion on that form to C~roller. The Agreement shall tenainate no later than the date on which the pilot progr8lll shall erd as detemined bt tonptroller. Conptroller or Treasury may terminate the Agreement at any time withClUt prior notice to Ven::Ior. The Agreement is contingent upon the availability of sufficient aFPf'OPl"iated fU"ds. Notwithstanding Vendor'S deletion of the AcCOUlt, . Conptroller's or Treasuryls tena:ination of the Agreement, or the end of the pilot program, the Agreement sI1all remain in force concerning all- transactions that have occurred prior to the date of such deletion, tennination, orerding. SECTION B. HEADINCS. The headings used in the Agreement are for reference p.n-pose5 only and shall not be deemed a part of the Agreenent. SECTION 14. IDIERl/ltIG LW. The Agreement shall be construed in !ccordarce with am governed by the l8t.ls of the State of Texas.. ,SECTION 15. EIlTIRE ~T. The Agreement eutx:dies the entire agreement of the parties with r~pect to and s~rsedes. all previous negotiations, representations, ard agreem::nts, if any, concerning the stbjeet matter hereof. The Agreement shall be binding I.4JO" the parties and their respective successors and assigns. The Agreement May be amended only by a writing signed by all parties. Name of Vendor: Ele.en-digit Identification Number of Vendor: Signature of Vendor's Authorized Representat ive: Naue of Signer: Adjress of Signer: Date: 5 ' . ....- . ~ ' .. \:\ \"~,L. ,~~ , ~~\)~ Ot?,) ~ ' J Direct Deposit of Vendor Payments Pilot Program - Vendor Information Packet " '. DIRECT DEPOSIT OF VENDOR PAYMENTS VENDOR INFORMATION PACKET I. Introduction to Project ........................ 1 II. Requirements and Responsibilities .............. 2 III. Addendum Record. Layout ........~................ 4 IV. Exhibits A. Vendor Direct Deposit Application B. Vendor Direct Deposit Agreement I. INTRODUCTION TO DIRECT DEPOSIT OF VENDOR PAYMENTS The Comptroller's Office has been working on developing a system for electronically depositing payments to ,vendors from the State of Texas. Development of such a system would eliminate the need to produce paper checks and reduce the overall time needed to process purchase vouchers. Currently, the project consists of a pilot program involving a limited number of agencies and vendors. (Local governments rece1v1ng flales tax allocation payments in this pilot program are included in the definition of "vendors".) These limitations have been imposed because of the need to develop both a method of auto- matically scheduling payments and a new vendor database. The pilot program provides a controlled environment in resolve any problems we may encounter with the banking The pilot is scheduled to continue until both the above systems have been implemented. which to community. referenced The primary goal of the pilot program is to address communication with the banking community. Three aspects of this project directly affect the banking community. First, transfers of credit informa- tion will occur on a daily basis in addition to the monthly payroll transmittal. Second, the credits will be accompanied by "nnpnnnm ..info~ation (see page 4) to ass1st the vendor in identifying the source and reason for the payment. Finally, debits will be elec- tronically generated to recover payments made in error. 1 -, II. REQUIREMENTS AND RESPONSIBILITIES To participate in the direct deposit program, a "Vendor Direct Deposit Application" must be completed, and the "Agreement for the Direct Deposit of Payments From the State of Texas" must be signed. (See Exhibits A and B, respectively.) Tax Allocation section of Revenue Accounting Division will be the "custodian" of your direct deposit payments during the pilot program. Any changes to the direct deposit instructions must be submitted on a "Vendor Direct Deposit Application" to Tax Alloca- tion Section. ,A vendor will only have to submit one application and sign a single agreement in order to be eligible to receive any payments from participating state agencies via direct deposit. Even though only one state agency will be allowed to set up a particular vendor for direct deposit, all state agencies partici- pating in the pilot program will' be able to direct deposit pay- ments to that vendor. In other words, a vendor doing business with several pilot state agencies will be able to receive direct deposit payments without having to submit additional paperwork. Durin the ilot ro ram the vendor must be willin to receive all direct de osit a ents from the state of Texas to a.sin~le checkinq accountJ Multiple direct deposit instructions for a sinqle vendor will not be allowed durinq the pilot. In addition. the only bank account type acceptable for direct deposit at this time is a checkinq account. When a participating state agency submits the proper documentation to issue a payment, a direct deposit transaction will be gener- ated. Payment information will be collected on a magnetic tape for transmittal through the Federal Reserve System to the vendor's financial institution. Checks will be produced for all payments from nonparticipating state agencies, In addition to the payment, the t . tal ta e w contain addendYm__informatioll-descr.i!:1i:ng,_e;;l.<:;lJ._G.r..€l.!ti.t transactj,.;m,..(.S.e.ELPa 4):-The addendum information will enable the vendor to identify a payment's source and/or reason. The vendor must realize that financial institutions are not required to pass on this additional information but that the state will be providing it along with all credit transactions. Payments made via direct deposit should be available to the vendor approximately two bankinq days after beinq processed by the Comp- troller's Office. However, financial institutions' policies for posting d~rect deposits vary. Vendors should contact their finan- cial institutions to determine its policy for posting direct deposit credits. 2 The Vendor Direct Deposit Application: - sets up the direct deposit instructions, changes the direct deposit bank account, - changes the financial institution, - cancels the direct deposit instructions. To make changes to your direct deposit instructions, you must send a Vendor Direct Deposit Application with the appropriate changes to tpe Tax Allocation Section of the Comptroller's Office. You will receive a check for at least one month while the change is being processed. To stop direct deposit, complete a Vendor Direct Deposit Applica- tion indicating cancellation and send to the Tax Allocation Sec- tion. (During the pilot program, local governments may have only one set of direct deposit instructions for all state payments.) Unlike the setups and changes, cancellations take effect immedi- ately for those payments processed after the cancellation. Participating state agencies may pay local governments who are set up for direct deposit with a check. If you prefer to receive a particular payment by check or if you have questions about a spe- cific payment, contact the state agency responsible for the pay- ment. 3 III. ADDENDUM RECORD INFORMATION The addendum record is information that will be transmitted through the automated clearing house network which identifies payments to a vendor from a paying state agency. The layout and size of the addendum record is controlled by the rules of the National Automated Clearing House Association (NACHA). Information contained in the' record will include: o seven-digit vendor invoice number, o agency voucher number, o agency, number, /~here is on:g:c:r::tOenee :::er~he addendum information will be ~transmitted to the venQcr Q~tlle financial instit~tion. This will not.,. affect the timeliness of the deposit nor the amount being credited to the vendor. It simply me~ns that the vendor may not be able ':0, easHL2d~~.!.Hy.....the-payment.) - - ~ We anticipate vendors initiating requests to their financial institutions to provide some means of providing them with the addendum information. 4 DIRECT DEPOSIT OF PAYMENTS EXHIBITS am'lll::'74-151 _ ~"=" (8..88) 12_ .. .' EXHIBIT A (For ComplrOller Use Only) VENDOR DIRECT DEPOSIT APPLICATION Section A: Agency Information _"""'" . - ....- . I , , I - , I~ I Slate ZIP code - ............. I Ale I T-..,. ....- , , 1-1 I I 1-1 I I I I Section B: Vendor Information o Initial setUp o Change account number o Change financial institution o CanCellation v..-"""'" I FB}SSN I , , , , I , , I I - I~ l5mm I ZJP code By signing this form. I certify that I am an authorized representative of the vendor and that I have the authority to request the changes. additions, or deletions noted. In addition, I certify that the information on this form is correct. that I personally compJeted or directed the completion of the form, and that. when I signed the form, all of the applicable blanks had been filled in. Vender representative IT" I A/C T-..., ....- I I I 1-1 I , 1-1 I I I I sign~ I Date here , Section C: Financial Institution Information Name of financial institution . Transit (ABA) number I I I , H , , , I-U Addn>ss I~ 5mm . I ZIP code Customer checkI'lg ac::ca.nt nt.mber A.C.H. eoordinator , I AIC I number I I 1-1 I , I-I , , I I sign~ I Date here Section D: For Agency Accounting Office Use Only 3. Vendor numbee' MAI~ AGENCY , TRANSIT .1 I I I I I I , I I I I . CODE . NUMBER . CODE . ACCOUNT NUMBER 0 SET UP DIRECT DEPOSIT 4. 5. 6. 7. . ,. 02750 IPL041 I I I I I I I I I , I , , I I I I I 0 CHANGE TRANSIT CODE 4. 5. 6. . 1. 02752 IPL041 I , I I 1 , I I I , , , , I I I I I 0 CHANGE ACCOUNT NUMBER 4. 5- 6. . ,. 02753 IpL041 ,I I I I , , , , . 0 CANCE~ DIREcT DEPOSIT 4. 5- , . '. . 1_ 02754 IPL041 I I , 1 I I , I .. .. EXHIBIT B AGREBIEIIT rot TIlE DIRECr DEPOSIT CW PAYIlEJfTS FllOI TIlE STAlE CW 1ElfAS: PILar _ This Agreement for Oirect Deposit of Payments fronl the State of Texas: Pilot Program (hereinafter r-eferred to as the .'Agreement.) is entered into between the COOptroller of Pt.blic AccCU1ts <hereinafter referred to as -CaJptn>ller"), the Texas State Treasury Department (hereinafter referred to as "TreasurY'), aneI (hereinafter referred to as HVendorM).. The terms and corditions of ~e Agreement are as follows. SECTICJI 1. RECITALS. ~EREAS. Coaptroller has been authorized to establish an:f operate an electrcrnic hnds transfer system U'lder TEX.. COV'Y o:oe ANN.. ~ 403.016(8)(4) (Vernon 1988) for the purpose, SIIIOfliJ others, of directly depositing payments fran the State of Texas to vendors; WHEREAS, CaJPtroller and Treasury have decided to operate a pilot program for the' direct ~it of p8)ments frorathe State of Texas in order to test the electronic transfer of funds system before begirning a full scale direct deposit program; WEREAS, Conptrolter and Treasury have contracted with a financial institution for the purpose of originating electronic fU"lds transfers through the Autanated Clearing House or .the Federal Reserve's wire transfer system, or both; UHEREAS, ~troller has contracted with certain state agencies f~r the purpose of initiating Credit Entries in payment of some or all of their obligations to Vendor; UHEREAS. Vendor wishes to participate in. the pilot program and have Comptroller initiate Credit Entries to Vendor'S check.ing account in pa~t of obl igations owed by state agencies to Vendor pursuant to the terms of the Agreement; and UHEREAS. Comptroller is willing to initiate such Credit Entries in accordance with the Agreement. HCU. THEREf~e, in consideration of the rotual promises contained in the Agreement end other goo:f and valuable consideration, the receipt and sufficiency of which is acknowledged, the parties agree as follOtJS. SECTIoN Z. DEFINITIONS. The following words ard terms shall have the meanings indicated in the Agreement. Account - A 'checking account maintained by Vendor at a financial institution that is maintained solely for business purposes and that has been designated by Vendor in accordance with. the Agreement to receive Credit Entries fn:MII Participating State Agencies. Credit Entry. An electronic transfer of fU1ds fran the State Treasury to the Account. CUstodial State Agency. The Participating State Agency that Vendor contacted to set.up the Account for receiving Credit Entries in accordance with the Agreement. Debit Entry- A reversal of a Credit Entry. Participating State Agency. A state agency with Wiich Comptroller and Treasury have contracted to " initiate Credit Entries in payment of that agency's obligations to certain vendors. Paying State. Agency - A Participating State Agency'that is the payor concerning a Credit Entry. Rules - The rules ard requirements of the National AutOllBted' Clearing House Association (NACHA) con:em;,'~ Cash Concentration Disbursement. the Federal Reserve System's Regulation E,. ad CCDptroller. SECTIIlII 3_ AUrHCIlllATlIlII_ Vencbr authorizes C01{rt:roller to initiate Credit and Debit Entries to the AccOUlt in accordance with the Rules and the terms of the Agreement for obligations owing from time .to time by Participating State Agencies to Ven:Jor. Vendor understands and ack:nowledCles that. by sicJnim the AQreement. Vendor consents to beim oaid dJrim the duration of the "(freemen! via Credit Entries for all ~ts owim to Vendor fran all par-ticioatinq State Aqencies. Verdor shall not have the cower to revoke this consent exceot by contactinQ the Custodial State Aqency to cancel the eliqibil frv of the Account to receive Credit Entries. A list of Participating State Agencies and their agency rurbers is attached to the Agreement as Exhibit 1. Notwith$tandi~ anything else in the Agreement, neither CaJPtroller nor a Paying State Agency is req.sired to pay Vendor via Credit Entries. Carptroller and Paying State Agencies. specifically reserve the option to pay Vendor via a state warrant. In addition,' Cafl)troller resenres the right to issue a state warrant to Vendor even if a Paying State Agency desires carptroller to initiate Credit Entries to Vendor. C~roller shall not be reqJired'to initiate a Credit Entry in an aIDOU'lt equal to or greater than $100 million.. SECTION 4.. aH'LIAJICE UITH RULES_ Vendor shall conply with and be boun:::! by the Rules as in effect fran time to time inclu::Hng, without limitation, Part B, section VI of the NACHA Operating Rules. SECTJt:Jt 5.. AttEPTAIKE All) REllRN OF [REDIT EMTRIES. Neither Ven::for nor its financial institution is reqJired to accept any Credit Entry initiated Lnder the Agreement. However, any Credit Entry that Vendor or its financial institution rejects rrust be returned in acco~ with the Rules.. Neither Comotroller. Treasury. nor any PaviOQ State AQencv shall be liable for the conseouenc:es of Vendor's financial instituti.on's failure to cocroly with this oaraqradt. The State of Texas an::I its Participating State Agencies shall not be deemed in default on any obligation, suffer eny loss of disCOl.nt, or incur any penalty, interest, or late charge by reason of the return of any Credit Entry, so long as the entry was initiated in accordance with the terms of the Agreement. This paragraph specifically awlies to the interest that might otherwise be payable Ulder the Texas Prompt Payment Act. TEX. REV. CIV. STAT. ANN. art. 601f (Vernon Supp. 1988>. Notwithstanc:ling I!InY statement contained in or any information tr-ansmitted with any Credit Entry and notwithstarding the failure to ,.eturn any Credit Entry in accon:lan::e with the Rules, Verdot' shall not be deemed to haye accepted any Credit Entry as being in the correct am;)U1t if, within 30 days after receipt of the Credit Entry by Vendor's financial institution, Verdof" provides written notice to the Paying State Agency of the di screpancy. SECTIIlII 6_ CRBlIT FOR EN1IlIES. Unless. Credit Entry is returned in accordance with the- Rules, Verdor'- shall.. as of the date the amxnt of such Credit Entry is credited to the AccOl.rIt.. credit the'paying State Agency with the 8InOU'1t of each Credit Entry received. The 8CCMJ81 of interest or other charges payable with respect to -the _8lOOU"It of suCh 2 Credit Entry.. if any.. shall cease at that time even if verdor's financial institution fails". refuses. or is mable to DB" on the credit entry information to Verdaf"'. SECTIOI 7. CREDIT ENTRY INRIlMTlCIf. Each Credit Entry initiated U1der the Agreement shall be 8CCCllJp8I1ied by the following infonration: 1. vendor's invoice nuOOer ~ to seven digits (if and as sur.plied to Conptf"'oUer by the Paying State Agency); 24 the voucher rurDer of the Paying State Agency (if SLf4)lied to ~tl'"Oller by that agency); 34 the agency nl.ri:er of the Paying State Agency (Exhibit 1 to the Agreement has . table of agency names and ruriJers); and 4~ the telephone number of the Paying State Agency. Neither Corrotroller. Treasurv~ nor any PaviM State AeJencv shall be liable for the failure. inability. or refusal of Vendor's financial .institution to qive Vendor the a-ecediOCl credit entry information~ SECTION 8. THE ACCX:IMT. Before CCff1Jtroller can initiate Credit Entries in accordance with the Agreement. Ven.ior nust provide certain information concerning the cheek.ing 8CCOt6'It Verdor- wants to receive those entries. Once that information has been provided.. the checking 8CCOU'lt becomes the AcCOU\t for the PJrposes of the Agreement. verrlor shall provide the ~ired information concerning the checking accot.nt by executing the Vendor Direct Deposit AWlication fonn. This form can be obtained only frCIII Participating State A9encies~ The form fTJ.lst be filed with a Participating State Agency and lUSt not be sent directly to Corrptroller or Treasury. Vendor may delete or ..ooify the infornation concerning the Ac:cot.rlt only by contacting the CUstodial State Agency. The Custodial State Agency will require Vendor to execute a Vendor Direct Deposit Application fonn. The Custodial State Agency will transmit the information on that fOnR to Cocrptroller. The establishment or deletion of the AccOUlt. or the tIOdification of infon8tion concerning the Account, will be effective according to the following sched.ile. If Carptroller receives the information contained on the-Verdar Direct DepJsit Application fonn by no later than the 15th of a IAOflth.. then the changes will be effective on the 12th of the following ~h_ If Comptroller receiyesthat information after the 15th of a IOOnth, then the changes will be effective on the 12th of the second I'IOnth thereafter. The preceding schedule is necessary in order to allow sufficient time for Conptroller to verify the infOrmation on the Vendor Direct Deposit Application form in accordance with the MACHA Operating Rules. If Vencfor is a natural person, Ven::Ior mafees the following representation to Corrptroller. The AccOt.nt shall. at all times. consist solely of II checking ecCOUlt that will be maintained exclusively for b.asiness purposes and not for personal.. family. household, or any other" non-business purpose. SECTIIJI 9. (Q;STlOIIS aJIICERN11IG CRBlIT 01 DEBIT ElmlIES 01 THE __. Vendor shall contact the Paying State Agency if it has questions C<IOCeming a Credit or Oebit Entry. However. if vendor receives an. Ulidentified Credit or Debit" Entry.. Vencbr shall first contact its financial institution to obtain information concerning that entry. If the financial institution is lSlable to provide that infCN"mi!ltion, then Vendor ABY contect Comptroller directly as follows. 3 ! Attention: Telephone nuli:Je" Vendor IIBY contact any Participating State Agency if vendor has 8f'f'f questions concerning the Agreement.. Carptroller shall contact either a Participating State Agency or Vendor if he has any qJeStfons concerning Credit or Debit Entries or the Agreement. Vendor can be contacted as follows4 Attention: Telephone nuli:Jer: Vencbr shall notify Conptroller in writing at the ad:fress listed in this section when Vendor's address or telephone nurber or the identity of the person Cooptr-oller should c.ontact changes. Vendor shall ensure that CCllffItroller receiws this notice no tater than ten days after the aforementioned changes. SECTIOM 10. LIABILITY Of THE PARneS. Vencbr, the State of Texas, and Participating State Agencies, including COIrptroller and Treasury, shall not be liable for the act or omission of any Autanated Clearing House, financial institution, or other person except as specified in the Agreement.. Vendor agrees that Corrptroller and Treasury shall not be liable for dcwnages arlSH19 out of delays caused or -errors conmitted by a Participating State Agency, a Paying State Agency, or a Custodial State Agency regarding the addition or deletion of the Account, or the modification of informat1en' concerning the Acc~t. SEcrlDl 11. STIP PAnEIITS Of. CREDIT EJITRJES~ DEBIT EJ([RIES. Carptroller, on the behalf of, the State of Texas, reserves the same right to stop payment of Cr~it Entries that would have existed if irdividual warrants had instead been issued and delivered to Vendor. Ven::Sor consents to sl.x::h stop payments.. Vendor also consents to C~roller initiating Debit Entries to the ACCOlnt whenever, in the judgment of Coeyptroller Of" . Paying State Agency, an erroneous credit Entry has been made to the AcCOUlt.. Cooptroller my initiate Debit Entries without notice to Vendor. SECTllJI 12. EFFECTIVE DATE _ TERIIIIlATllJI. The Agreement becomes effective '4'0" the signing thereof by Vendor so long as none of the teras of the Agf'eement are changed without the expf"essed written consent- of .Coaptroller. -No partidoatinq State ACJencv. 4 .. CUstocfial State A<renCV. Payinq State AClencv. 01" anv other oerson or entity has the authority to alter or add additfonal terIIB to the Aqreement on CaTDtroller's or Treasurvls ~alf.. Vendor cannot terminate the Agreement itself. However, Vendor may rescind its consent for Credit EntrieS I:1t notifying the Custodial State Agency that Vendor wants to cancel the eligibil ity of the AccOUlt to receh'e Credit Entries. The Custodial State Agency will, in turn, have Vendor execute the Vendor Direct Deposit AppLicatim foraa and transmit the information on that fona to CClrfJtroller.. The Agreement shall terminate no later than the date on ..nich the pilot program shall end as determined by Colq:)troller.. Colrptrolter ~r Treasury may terminate the Agreement at any time without prior notice to Ven:Ior. The Agreement is contingent UJXX1 the availability of sufficient appropr-iated fU"lds. Notwithstanding Vendor-Is deletion of the ACCOU'lt, COnptroller's or Treasuryls termination of the Agreement, Of' the en:f of the pilot program, the Agreement shalt remain in-force concerning all transactions that have occurred pdor to the date of such deletion. tenninatia1. or ending. SECfllII 13. HEAD IJIGS. The headings used in the Agreenent are for reference purposes only and shall not be deemed a part of the Agreement. SECTION 1-'_ GOVERNING lAU_ The Agreement sh~ll be construed in accordance with and governed by the laws of the State. of Texas. SECTllII 15. EIlTIRE ACREEIElIT. The Agreement enbodies the entire agreeoent of the parties with respect to and sl..persedes all previous negotiations, representations. ard agreements, if any. concerning the subject matter hereof. The Agreement shall be binding t..pon the parties and their respective successors and assigns. The Agreement may be amended a1ly by a writing signed by all parties. Name of Vendor: Eleven-digit Identification Number of Vendor: Signature of Vendor's Authorized Representative: Name of Signer: Address of Signer: Date: 5 "'-, "-....j MELICK, ARMSTRONG & VAUGHAN, P.C. CERTIFIED PUBLIC ACCOUNTANTS 433 KITTY HAWK. SUITE 113 UNIYERSA~ CITY, TEXAS 76148 TE~EPHONE 1512) 656-6229 HONORABLE CITY COUNCIL CITY OF SCHERTZ Our examination of the financial statements of the various funds and account groups of the City of Schertz for the year ended September 30, 1988, included selected' reviews and tests of management procedures and internal accounting controls. Attachment 1 to this letter defines internal accounting controls and the purpose and extent of our evaluation of these controls. Generally, the areas we examined evidenced good management and strong initiative. City officials forecast continual growth in the City operations. This justifies and emphasizes continuing improvements on controls, organization and management systems in areas where 'the City can streamline operations and increase productivity. We discuss some of these areas below: tf' PURCHASING Our review of disbursements indicated that most were supported by purchase orders or otherwise evidenced approval for payment. However, invoices billed against ongoing contracts with the City did not always evidence this review and approval before payment. For example, the City receives periodical billings against contracts for solid waste disposal, legal fees, engineering fees, and insurance coverage. While such services were originally authorized in contracts, there is a need to review individual invoices before payment. Procedures followed by the City cause such invoices to flow through the City Secretary and City Manager before delivery to bookkeeping for payment. Such ,invoices were not always initialed to indicate approval for payment. REVENUE BOND RESERVE ACCOUNT Correspondence from were not aware that more than the 1968 to make a principal return of Schertz's NCNB and discussions with bank officials balances held in Schertz's reserve account issue. This resulted in the use of reserve and interest payment on a bond ($32,187.50) check for the same amount. indicate they were covered account funds and erroneous NCNB has moved all of Schertz's funds into an AIM Treasury Fund and, as of 9-30-88, had no funds invested directly in government securities. This matter has been referred to the City's financial advisor on bond debenture agreements to determine whether investment in this fund is authorized. . SAFES ACCOUNTS RECEIVABLE WRITE-OFFS SAFES write-offs of uncollectible accounts have been increasing in recent years. During fiscal year 1986/87 such write-offs totalled $15,300, or 19% of revenues ($81,000). Fiscal year 1987/88 write-offs were $20,244 or 25% of revenues ($81,107). As of September 30, 1988, $7,246 in accounts were one year old and collection of these accounts was improbable. At that rate, the fiscal year 1988/89 write-offs will exceed $28,000. We attempted to confirm a statistical sample of the September 30, 1988 accounts less than a year old. Our sample had unbillable address for 20% of these accounts. Collection efforts for the remaining 80% of the 9-20-88 accounts $30,547 and future accounts could be improved. Individually, the accounts are for such small amounts ($9 to $200) that use of a collection agency or attorney may not be practical. However, the Retail Merchants of San Antonio offer a low cost credit bureau collection approach which might be appropriate. The City is reviewing information provided by this organization. ANIMAL SHELTER CASH CONTROLS The animal shelter collects fees related to its operations (sale of pet licenses, impoundment fees, etc.). While we were able to account for receipts recorded by shelter personnel, controls could be improved. Funds collected were not always deposited with the City in a prompt manner. In our sample month, monies received from the customers on the 12th of the month were not deposited until the 31st, even though' there were deposits made on the 19th and 21st of the month. Refunds were made from cash receipts. City policy is to pay all refunds by separate check.' Proceeds from the sale of pet licenses were not deposited promptly. The receipt used to deposit these monies did not reference the license numbers sold. BUDGETING FOR CAPITAL OUTLAYS Accounting for purchases of equipment and other fixed assets has improved significantly due to the implementation and continued improvements of the computer software package designed for this purpose. However, the purchase of substantial amounts of equipment from expense accounts rather than capital outlay accounts complicates accounting and budgeting control. Better projections of such purchases in the budget and use of capital outlay accounts in accounting for purchases would simplify the process and enhance budgeting control. Yours truly, Melick, Armstrong & Vaughan, P.C. . . ATTACHMENT 1 As part of our examination of the financial statements of the various funds and account groups of the City of Schertz for the year ended September 30, 1988, we made a study and evaluation of the Cities system of internal accounting control to the extent we considered necessary to evaluate the system as required by generally accepted auditing standards. Under these standards, the purposes of such an evaluation are to establish a basis for reliance on the system of internal accounting control in determining the nature, timing, and extent of other auditing procedures that are necessary for expressing an opinion on the financial statements and to assist the auditor in planning and performing his examination of the financial statements. The objective of internal accounting control is to provide reasonable, but not absolute, assurances as to the safeguarding of assets against loss from unauthorized use or disposition, and the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of a system of internal accounting control should not exceed the benefits derived and also recognizes that the evaluation of these factors necessari,ly requires estimates and judgements by managements. There are inherent limitations that should be recognized in considering the potential effectiveness of any system of internal accounting control. In the performance of most control procedures, errors can result from misunderstanding of instruction, mistakes of judgement, carelessness, or other personal factors. Control procedures whose effectiveness depends upon segregation of duties can be circumvented by collusion. Similarly, control procedures can be circumvented intentionally by management either with respect to the estimates and judgements required in the preparation of financial statements. Further, proj ection of any evaluation of internal accounting control to future periods is subject to the risk that the procedures may become inadequate because of changes in conditions and that the degree of compliance with the procedures may deteriorate. Our examination of the financial statements was made in accordance with generally accepted auditing standards. It included a study and evaluation of the Cities system of internal accounting control for the year ended September 30, 1988, and was made for the purposes set forth in the first paragraph of this report. This examination would not necessarily disclose all weaknesses in the system because it was based on selective tests of accounting records and related data. I I I. I I I I I I I I I I I I I I I I ~, CITY OF SCHERTZ, TEX4S COMPREHENSIVE ANNUAL FINANCIAL REPORT Year Ended September 30, 1988 Prepared by the Finance Department D. Williams Finance Director i I I City of Schertz, Texas Comprehensive Annual Financial Report I For the Year Ended September 30, 1988 TABLE OF CONTENTS I Page No. INTRODUCTORY SECTION I I Letter of Transmittal vii-xii Organization Chart xiii I FINANCIAL SECTION I Independent Auditor's Report 1 General Purpose Financial Statements I Combined Balance Sheet - All Fund Types and Account Groups 3 I Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types and Expendable Trust Fund 9 I Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - General and Special Revenue Fund Types 11 I Combined Statement of Revenues, Expenses, and Changes in Retained Earnings - All Proprietary Fund Types and Similar Trust Funds 13 I Combined Statement of Changes in Financial Position _ All Proprietary Fund Types and Similar Trust Funds 15 I Notes to the Financial Statements 17 I I I Hi I I I I I Trust and Agency Funds: Combining Balance Sheet I Expendable Trust Funds - Combining Statement of Revenues, Expenditures and Changes in Fund Balances I I Combining Statement of Changes in Assets and Liabilities _ All Agency Funds General Fixed Assets Account Group: Comparative Schedule of General Fixed Assets - By Source I Schedule of General Fixed Assets - By Function and Activity STATISTICAL SECTION I General Government Expenditures by Function I General Government Revenues by Source Property Tax Levies and Collections I Assessed and Estimated Actual Value of Property I Property Tax Rates - Direct and Overlapping Governments Ratio of Net General Obligation Bonded Debt to Assessed Value and Net General Obligation Bonded Debt Per. Capita I Overlapping Debt I Legal Debt Margin General Bonded Debt Summary of Debt Service Requirements - Fiscal Years 1988-2002 I Utility System Junior Lien Revenue Certificates of Obligation Debt Service Requirements - Fiscal Years 1988-2001 I Utility System Revenue Bonds Summary of Debt Service Requirements - Fiscal Years 1988-2007 I Public Facility Loan H.U.D. Summary of Debt Service Requirements Fiscal Years 1988-2010 I v I I Table No. Page No, 56 57 58 62 63 1 65 2 66 3 67 4 68 5 69 6 70 7 71 8 72 8-1 73 8-2 74 8-3 75 8-4 76 I I I February 23, 1989 I To the Citizens of the City of Schertz I I The comprehensive annual financial report of the City of Schertz, Texas, as of September 30, 1988, and for the year then ended is submitted herewith. Responsibility for both the accuracy of the presentation including all disclosures rests with the city. The data, as presented, is accurate to the best of our ability in all material aspects. The report is presented in a manner designed to set forth the financial position and the results of its various funds. We have attempted to provide all disclosures necessary to enable the reader to gain the maximum understanding of the city's financial activity. I I This letter and accompanying report consists of three major subsections including: I 1. Introduction - Included within this letter of transmittal is our Table of Organization, comments regarding economic conditions and outlook, major occurrences of FY 87-88, and major initiatives for FY 88-89. 2. Financial - Begins with the review of accounting system and controls and follows with commentary and statistical tables regarding: (a) general government, (b) debt administration, (c) cash management, (d) fixed assets, (e) proprietary functions; (f) SAFES operation, and (g) trust and agency funds. 3. Statistical Consists of selected information that reflects both financial and non-financial data for the purpose of presenting economic information, financial trends, and fiscal capacity of the city. I I I I I The city is located in the Northeast portion of the San Antonio standard statistical metropolitan area which continues to rank as one of the highest tourist attraction communities in the Southwest, and is leading the economic recovery in the State of Texas. While the economic condition and outlook of the area has decreased from that of the "boom" land development times of 1985 and 1986, attributable to a general decline in the State of Texas economy, the overall outlook is very positive as evidenced by employment data reflected elsewhere in this report. With a renewed interest, on the part of the community, in economical development initiatives, including the formation of a revised organization to target new development opportunities as well as enhance existing businesses, it is felt a major improvement in the community economy will be felt within the next twelve to eighteen months. Since September 1988, the city has received five inquiries concerning potential plant sites from major companies. Accordingly, a positive outlook is shared by all persons involved in the communities Economic Development Task Force activities. I I I vii I I I I Budgetary control is maintained by the use of purchase order procedures that require encumbrance of the estimated purchase amounts prior to the release of purchase orders to vendors. Open encumbrances are reported as reservations of fund balance at September 30, 1988. I General Governmental Functions. Revenues which include General, Special Revenue" and Debt Service for~al governmental function totalled $1,806,856 in 1988, an increase 0 9.7 from 1987. Taxes produced 72.4% of general revenues compared to 69.9% ast year. The amount of revenues from various sources and the increase/decrease from last year are shown in the following tabulation: I I I I Taxes (Property, Sales, etc. ) Licenses and Permits Intergovernmental Revenues Charges for Services Fines and Forfeits Other Revenues Percent Increase Of (Decrease) Amount Total From 1987 $ 1,308,600 72.4% $ 156,492 54,627 3.0% (22,194) (6,601) 32,391 1. 8% (68) 139,008 7.7% (20,275) 272,230 15.1% 52,127 ----------- ----------- ------------ $ 1,806,856 100.0% $ 159,481 I I I Expenditures. For $e~ral governmental purposes, expenditures totaled $1,878,246, an increase,(~_ 6~ from 1987. Increases in levels of expenditures for major functions of ~city over the preceding year are shown in the following tabulation: I I Percent Increase Of (Decrease) Function Amount Total From 1987 General Government $ 807,754 43.1% $ 92,512 Public Safety 523,000 27.5% 34,464 Streets and Parks 283,323. 15.1% (35,396) Health Services 47,507 2.5% (8,150) Recreation 80,945 4.3% 7,358 Capital Outlay 38,221 2.3% 259 Debt Service 97,496 5.2% 20,852 ----------- ----------- ------------ $ 1,878,246 100.0% $ 111,899 I I I I I ix I I I I The city is self insured on physical damage to certain city vehicles. In order to provide coverage for this risk funds are maintained in a self insurance fund which had a balance of $31,758 at September 30, 1988. I Water and Sewer System. During the fiscal year ended September 30, 1988, net revenues in the water sewer system increased. The coverage ratio of 2.04 still meets the revenue bond debenture agreement requirement that net revenues be at least 1.5 times the average annual debt requirement. Net revenues, as used here, is an amount derived in accordance with the bond indenture agreement. Comparative data for the past two fiscal years is presented below: I I I Total operating revenue Operating income (gross revenues less operating expenses) Net revenues (operating income plus depreciation less solid waste revenues) Average annual debt requirements Coverage ratio 1988 1987 $ 1,502,210 $ 1,339,061 140,178 155,616 397,868 408,916 194,957 196,269 2.04 2.08 I I During the year, $65,000 of regularly maturing revenue bonds and $40,000 in certificates of obligation and $3,000 in Public Facility Bond from HUn were retired in the Water and Sewer Fund. I Schertz Area Facility for Emergency Services (SAFES). During the fiscal year ended September 30, 1988, SAFES increased its revenue 19% and increased operating expenses by 15%. SAFES is fully dependent on income fees generated from services rendered and the cities' support to cover all operations costs. In this fifth year of self-supporting operation, SAFES had an operating income before depreciation of $30,310. County contingency funding and other miscellaneous revenue offset depreciation expense resulting in a net income of $1,596. I I I Trust and Agency Funds. Trust and Agency Funds are established to account for assets held by the governmental unit in a trustee capacity or as an agent for individuals, private organizations, and other governmental units, and/or' other funds. The city has two trust funds, Self Insurance and Equipment Replacement, with total assets of $85,313. The city has five agency funds which are Payroll, Industrial Development and Schertz Housing Finance Corporation, Library and State Fines, These funds have assets of $57,578 and serve various purposes in the best interest of the city. I I During the general fund to in addition to allocated share year the water and sewer fund transferred $205,938 to the help defrey general fund operating expenses. This transfer is $200,000 paid to the general fund for reimbursement of its of general and administrative expenses. I I I xi I I ~~ tI:I:)l,I:jO '~f tlOy.1031110Sg,lVS . ...- :'.- , .. tlOS1^ll:ldnS T tlOSl MBdns V .f)N't'W ^:>N3!ltl~Wa ,-N, 'l'11I~1' V,l,:IIH~>g~l,l j .' ;. , . , " ~lf' lIOI.'I'll.lSINIWQ'I' 1WJ~ BY 1I3!lVNVW HI:> HOd:lO '!y, ~'" , ~ ~W' I 'IONnOO HI:) I .... .... '... x ------------- -~~~~ I I MELICK, ARMSTRONG & VAUGHAN, P.C. CERTIFIED PUBLIC ACCOUNTANTS 433 KITTY HAWK, SUITE 113 UN1VERSA~ CITY, TEXAS 78148 TE~EPHONE (512) 656-6229 I INDEPENDENT AUDITOR'S REPORT I March 9, 1989 I I To the City Council and audit committee of the City of Schertz, Texas: We have audited the accompanying general purpose financial statements of the City of Schertz, Texas, as of and for the year ended September 30, 1988, as listed in the table of contents. These financial statements are the responsibility of the City of Schertz' s management. Our responsibility is to express an opinion on these financial statements based on our audit. I I We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. I I I In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Schertz, Texas, at September 30, 1988, and the results of its operations and the changes in financial position of its proprietary and similar trust fund types for the year then ended, in conformity with generally accepted accounting principles. I I Our audit was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The combining, individual fund, and individual account group financial statements and schedules are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the City of Schertz, Texas. Such information has been subjected to the auditing procedures applied in the examination of the general purpose financial statements and, in our opinion. is fairly stated in all material respects in relation to the general purpose financial statements taken as a whole. I I I January 15, 1989 ,lY\ ~ .L--w>l.-~ ; J ~ l~ I I 1 I I I I I I I I I I I I I I I I I I I I GENERAL PURPOSE FINANCIAL STATEMENTS 2 I I I I I I I I I I I I I I I I I I I Proprietary Fund Tvpes Fiduciary Fund Tvoes Trust and A"ency Account General Fixed Assets 1988 1987 Enterurise GrOUDS General Long-Term Debt Totals (Memorandum Only) $ 177,315 $ 13 ,554 $ $ $ 227,637 $ 33,333 88,438 129,337 538,635 901,082 49,969 35,289 115,334 115,334 196,374 312,807 312,807 89 14,355 46,021 49,345 60,724 54,969 1,629,446 1,629,446 2,353,963 5,092,667 8,890,028 13,982,695 9,261,448 1,051 1,051 1,099 103,831 103,831 130,202 760,169 760,169 757,798 44,828 44,828 46,292 ---------- ------------ ----------- ------------ ------------ ------------ $7,466,492 $ 142,891 $ 8,890,028 $ 908,828 $ 17,841,481 $ 13,817,870 4 I I I I I I I I I I I I I I I I I I I Proprietary Fund Tvnes Enternrise $ 159,391 112,185 73,000 40,000 10,757 13,647 1,975,000 1,180,000 105,000 $3,668,980 Fiduciary Fund TVDes Trust and Agency $ 69,078 1,830 $ 70,908 Account General Fixed Assets $ $ / Grouos General Long-Term Debt Totals (Memorandum Only) 1988 1987 $ $ 269,758 $ 274,912 112,185 102,055 73,000 65,000 40,000 40,000 14,355 83,000 13,647 13,513 49,969 35289 864,000 864,000 888,000 44,828 $ 908,828 6 1,975,000 1,180,000 105,000 44,828 2,045,000 1,220,000 111,000 46,292 $ 4,741,742 $ 4,924,061 I I I I I I I I I I I I I I I I I I I Proprietary Fund Tvoes Enterorise $2,670,111 211,035 92,197 824,109 1,127,341 3,797,512 $7,466,492 Fiduciary Fund Tvoes Trust and Agency $ 40,225 31,758 11,983 11,983 $ 142,891 A~count GrOUDS General General Fixed Long-Term Assets Debt $ $ 8,890,028 8,890,028 $ 8,890,028 $ 908,828 8 I I Totals (Memorandum Only) 1988 1987 $ 2,670,111 $ 2,665,183 8,890,028 4,619,181 211,035 204,346 92,197 335,428 824,109 421,407 9,948 11,379 103,831 6,815 130,202 40,225 31,758 215,058 60,005 28,032 423,210 1,539,540 1,609,445 13,099,739 8,893,809 $ 17,841,481 $ 13,817,870 I I I I I I I I I I I I I I I I I I I Debt Service $ 6,540 6,540 24,000 73,496 97,496 Capital Proiects $ 274,346 274,346 Fiduciary Fund Tvoe Expendable Trust $ 22,780 22,780 720 50,834 51,554 Totals (Memorandum Onlv) 1988 $ 1,308,600 54,627 32,391 139,008 295,010 1,829,636 808,474 523,000 283,323 47,507 80,945 363,401 24,000 73,496 2,204,146 1987 $ 1,152,108 76,821 6,601 32,459 159,283 240,482 1,667,754 715,242 ,488,536 318,719 55,657 73,587 212,502 22,000 54,644 1,940,887 (90,956) (274,346) (28,774) (374,510) (273,133) ---------- ------------ ----------- ------------ ------------ 133,001 480,643 12,720' 859,866 147,931 (68,416) (722,344) (199,347) ---------- ------------ ----------- ------------ ------------ 64,585 480,643 12,720 137,522 (51,416) ---------. ------------ ----------- ------------ ------------ (26,371) 206,297 (16,054) (236,988) 135,451 130,202 88,037 649,187 513,734 ---------- ------------ ----------- ------------ ------------ $ 103,831 $ 206,297 $ 71,983 $ 412,199 $ 649,185 10 I I I I I I I I I I I I I I I I I I I Special Revenue (Revenue Sharing Fund Fund) Variance Favorable (Unfavorable) Budget Actual $ $ $ 1,414 1,414 ----------- 1,414 1,414 ---------- ------------ ---------- ------------ ---------- ------------ 1,414 1,414 (45,000) (27,564) (17,436) ---------- ------------ ----------- (45,000) (27,564) 17,436 ---------- ------------ ----------- (45,000) (26,150) 16,022 33,688 33,688 ---------- ------------ ----------- $ (11,312) $ 7,538 $ 16,022 12 I I I I I I I I I I I I I I I I I I I City of Schertz, Texas Combined Statement of Revenues, Expenses and changes in Retained Earnings - All Proprietary Fund Types (Continued) For the Year Ended September 30, 1988 (With comparative totals for the year ended September 30, 1987) 1988 Enterprise Funds Totals Nonoperating revenues (expenses): Interest income Interest expense Amortization Bond expenses County cpntingency funding Loss on trade or sale of assets Lawsuit legal fees Recovery from lawsuit $ 139,195 $ (276,755) (48) 4,800 (475) (9,764) 312,807 Total nonoperating revenues (expenses) 169,760 Net income before operating inter fund transfers 303,682 Operating transfers in Operating transfers out 68,416 (205,938) Net income/(loss) 166,160 Retained earnings, October 1 961,181 Retained earnings, September 30 $ 1,127,341 14 1987 120,868 (178,248) (48) (59,910) 22,667 (2,335) (138,474) (235,480) (100,802) 40,000 (60,802) 1,021,983 $ 961,181 I I I I I I I I I I I I I I I I I I I City of Schertz, Texas Combined Statement of Changes in Financial Position _ All Proprietary Fund Types (Continued) For the Year Ended September 30, 1988 (With comparative totals for the year ended September 30, 1987) 1988 Enterprise Funds Totals Uses of working capital: Acquisition of property, plant and equipment Reduction in long-term debt Increase in restricted assets Total uses of working capital Net increase in working capital Elements of net increase (decrease) in working capital: Cash Certificate of deposit Accounts receivable Receivable from lawsuit Due from other funds Inventory of supplies Vouchers payable Due to other funds Accrued vacation and sick leave Net increase in working capital 16 $ 785,109 116,000 6,795 907,904 $ 347,443 $ $ 152,076 $ (42,501) (81,040) 312,807 (44,911) 1,191 60,612 (10,657) (134) $ 347,443 1987 $ 144,743 88,000 1,077 ,828 1,310,571 12,895 (15,540) 66,487 43,678 45,000 (3,365) (122,244) 304 (1,425) $ 12,895 I I I I I I NOTES TO FINANCIAL STATEMENTS I I The notes to the financial statements contain a summary accounting policies and other notes considered necessary understanding of the financial statements. I I I I I I I I I I 17 I of significant for a clear I I Excluded from the reporting entity: I Schertz Volunteer Fire Department Board. This board of local citizens works to provide private additional funding for fire equipment, This board is made up of private citizens not appointed by the City Council and has no management control or direct influence over operations of the Schertz Volunteer Fire Department. All funds obtained by the board are used as the board sees fit with the city having no authority, responsibility or obligation. I I I B. Fund Accounting The government uses funds and account groups to report on its financial position and the results of its operations. Fund accounting is designed to 'demonstrate legal compliance and to aid financial management by segregating transactions related to certain government functions or activities. I A fund is a separate accounting entity with a self-balancing set of accounts. An account group, on the other hand, is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect net expendable available financial resources. I I Funds are classified into three fiduciary. Each category, in types." categories: governmental, proprietary and turn, is divided into separate "fund I Governmental funds are used to account for all or most of a government's general activities, including the collection and disbursement of earmarked monies (special revenue funds), the acquisition or construction of general fixed assets (capital projects funds), and the servicing of general long-term debt (debt service funds). The general fund is used to account for all activities of the general government not accounted for in some other fund. I I Proprietary funds are used to account for activities similar to those found in the private sector, where the determination of net income is necessary or useful to sound financial administration. Goods or services from such activities can be provided either to outside parties (enterprise funds) or to other departments or agencies primarily within the government (internal service funds). Fiduciary funds are used to account for assets held on behalf of outside parties, including other governments, or on behalf of other funds within the government. When these assets are held under the terms of a formal trust agreement, either a pension trust fund, a nonexpendable trust fund or an expendable trust fund is used. The terms "nonexpendable" and "expendable" refer to whether or not the government is under an obligation to maintain the trust principal. Agency funds generally are used to account for assets that the government holds on behalf of others as their agent. I I I I I I 19 I I I I I I I I I I I I I I I I I I I I D. Budgets Budgets are adopted on a basis consistent with generally accepted accounting principles. Annual appropriated budgets are adopted for the general, special revenue and debt service funds. All annual appropriations lapse at fiscal year end. Project-length financial plans are adopted for all capital projects funds. Encumbrances represent committments related to unperformed contracts for goods or services. Encumbrance accounting-under which purchase orders, contracts and other committments for the expenditure of resources are recorded to reserve that portion of the applicable appropriation-is utilized in the governmental funds. Encumbrances outstanding at year end are reported as reservations of fund balances and do not constitute expenditures or liabilities because the committments will be honored during the subsequent year. E. Cash and Investments Cash' includes amounts in demand deposits as well as short-term Certificates of Deposits with a maturity date within three months of the date acquired by the government. F. Short-Term Interfund Receivables/Payables During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. These receivables and payables are classified as "due from other funds" or "due to other funds" on the balance sheet. Short-term interfund loans are classified as "interfund receivables/payables." G. Inventories Inventories are valued at cost, which approximates market, using the first-in/first-out (FIFO) method. The costs of governmental fund-type inventories are recorded as expenditures when consumed rather than when purchased. H. Prepaid Items Payments made to vendors for services that will benefit periods beyond September 30, 1988. I. Restricted Assets Certain proceeds of enterprise fund revenue bonds, as well as certain resources set aside for their repayment, are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants. Funds are segregated to report those proceeds of revenue bond issuances that are restricted for use in construction. Funds are also segregated to provide for debt service as provided under bond indenture agreements. 21 I I K. Fund Equity I Contributed capital is recorded in proprietary funds that have received capital grants or contributions from developers, customers or other funds. Reserves represent those portions of fund equity not appropriate for expenditure or legally segregated for a specific future use. DeSignated fund balances represent tentative plans for future use of financial resources. I N. Bond Discounts/Issuance Costs I In governmental fund types, bond discounts and issuance costs are recognized in the current period. Bond discounts and issuance costs for proprietary fund types are deferred and amortized Over the term of the bonds using the bonds-outstanding method, which approximates the effective interest method. Bond discounts are presented as a reduction I I of the face as deferred amount of bonds charges. payable whereas issuance costs are recorded I O. Interfund Transactions I Quasi-external transactions are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that are properly applicable to another fund, are recorded as expenditures/expenss in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. I All other interfund reimbursements, are permanent transfers All other interfund transactions, reported as of equity are transfers are except quasi-external transactions and transfers. Nonrecurring or nonroutine reported as residual equity transfers. reported as operating transfers. I I P. Memorandum Only - Total Columns I Total columns on the general purpose financial statements are captioned "memorandum only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations or changes in financial position in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. I I Q. Comparative Data I Comparative total data for the prior year have been presented in the accompanying financial statements in order to provide an understanding of changes in the government's financial position and operations. However, comparative data have not been presented in all statements because their inclusion would make certain statements unduly complex and difficult to understand. I I 23 I I I I I I I I I I I I I I I I I I I I The delinquent uncollected tax equal. amount. taxes receivable account represents past levies and is also reflected as a deferred years of revenue of Property taxes are levied as of October 1st on property values assessed as of January 1st. The receivable from a lawsuit involves a claim against a utilities contractor and its bonding com~any. The receivable of $312,807 was collected in November by the city in settlement of the claim. Note 5. ,General Fixed Assets The following is a Balances At October 1, 1987 summary of changes in general Additions Deductions fixed assets. Balances At September 1988 30, Land $ Buildings Improvements ,Other than Buildings Vehicles Equipment 240,210 966,740 $ 2,565 46,363 $ $ 242,775 1,013,103 2,540,670 398,024 473,537 3,988,016 89,969 169,346 23,403 2,009 6,528,686 464,590 640,874 $ 4,619,181 $ 4,296,259 $ 25,412 $ 8,890,028 The following is a summary of the property, plant, and equipment of the Pro~rietary Funds at September 30, 1988. Enterurise Funds Water/Sewer SAFES Total Buildings Improvements Other than Buildings Machinery and Equipment Land Construction in Progress $ 73,054 $ 26,656 $ 99,710 6,387,071 6,387,071 302,657 234,872 537,529 ------------ ------------ ------------ 6,762,782 261,528 7,024,310 (2,324,331) (139,223) (2,463,554) ------------ ------------ ------------ 4,438;451 122,305 4,560,756 78,628 78,628 453,283 453,283 ------------ ------------ ------------ $ 4,970,362 $ 122,305 $ 5,092,667 Accumulated Depreciation 25 I I I I I I I I I I I I I I I I I I I The annual requirements to amortize all debt outstanding as of September 30, 1988, including interest payments, are as follows: Year Public Ending General Revenue Certificates Facility Sent. 30 Obli!!:ation Bonds ' of Oblie:at:ion Loan HOD 1989 $ 93,758 $ 221,285 $ 151,258 $ 8,400 1990 97,049 221,023 157,007 8,250 1991 94,067 220,472 157,008 8,100 1992 92,084 214,473 162,075 7,950 1993 99,832 218,672 156,605 8,800 Thereafter 828,374 2,608,264 1,403,727 138,000 ------------ ----------- ------------ ------------ $ 1,305,164 $ 3,704,189 $ 2,187,680 $ 179,500 Principal $ 864,000 $ 2,045,000 $ 1,220,000 $ 108,000 Interest 441,164 1,659,189 967,680 71,500 ------------ ----------- ------------ ------------ $ 1,305,164 $3,704,189 $ 2,187,680 $ 179,500 Original Amount Revenue Bonds: 1968 Series $ 579,000 1973 Series 165,000 1975 Series 325,000 1981 Series 475,000 1988 Series 1,020,000 Certificates of Obligation: 1981 Series 150,000 1983 Series 1,250,000 Public Facility Loan HOD 142,000 Interest Rates Balance Outstanding October 1, 1987 Retirements 4.00%-5.75% $ 250,000 5.75%-6.10% 165,000 7.00%-7.75% 280,000 9.00%-10.00% 395,000 6.30%-8.30% 1,020,000 $ 25,000 5,000 20,000 15,000 Balance Outstanding September 30, 1988 $ 225,000 165,000 275,000 375,000 1,005,000 9.30%-10.00% 125,000 5,000 120,000 8.20%-10.00% 1,135,000 35,000 1,100,000 5.00% 111,000 3,000 108,000 ------------ ------------ ------------ $ 3,481,000 $ 108,000 $ 3,373,000 27 I I Note 10. Segment Information - Enterprise Funds I The city has two enterprise operations which provide emergency ambulance services. Segment information for period ended September 30, 1988, is as follows: water/sewer and the twelve month I Water/Sewer SAFES Total Operating Revenues $ 1,502,210 $ 226,308 $ 1,728,518 Operating Expenses, Exclusive of Depreciation 1,056,619 195,998 1,252,617 Depreciation 305,413 36,566 341,979 Operating Income (Loss) 140,178 (6,256) 133,922 Other Income 161,908 7,852 169,760 Operating Transfers In (Out) (137,522) (137,522) Net Income 164,564 1,596 166,160 Total Assets 7,239,978 226,514 7,466,492 Total Equity 3,575,225 222,287 3,797,512 Working Capital 481,718 77 ,815 559,533 Additions to Fixed Assets 781,071 4,038 785,109 Outstanding Long-Term Debt 3,260,000 3,260,000 I I I I Note 11. Commitements to Contingencies I As of September 30, 1988, the City of Schertz, Texas, had no material committments or contingent liabilities. I Note 12. Receivable from Lawsuit I The city sued a utility contractor for nonperformance on a suit . was settled between the parties in July 1988 and the $312,807 in full settlement in November 1988. contract. The city received Note 13. Pension Plan I Substantially all full time employees of the city are covered by a defined contribution pension trust. Under' this single employer plan, the city's only responsibility is to contribute 4% of each employee's salary on a monthly basis to the insurance company having complete fiduciary responsibility. Accordingly, the contributions were not acutarially computed and an actuary is not engaged by the city. The city's contribution for employees vested as follows: I I I Less than Five Years Five Years Six to Ten Years Eleven to Fifteen Years -0- 25% 5% per year 10% per year I I I 29 I I I I I I I I I I I I I I I I I I I I COMBINING AND INDIVIDUAL FUND STATEMENTS AND ACCOUNT GROUPS SUPPLEMENTAL STATEMENTS 31 I I I I I I GENERAL FUND I The General Fund accounts for the resources used to finance operations of the city. It is the basic fund of the city activities for which a separate fund has not been established. I I I I I I I I I I I 32 I the fundamental and covers all I I I I I I I I I I I I I I I I I I I City of Schertz, Texas General Fund Comparative Balance Sheet September 30, 1988 and 1987 Assets Cash Certificat~s of deposit Delinquent taxes receivable Due from other funds Inventory of supplies, at cost Total Assets Liabilities and fund balances Liabilities: Vouchers payable Deferred revenue Due to other funds Total liabilities Fund balances: Reserved for encumberances Reserved for inventory of supplies Undesignated Total fund balances Total liabilities and fund balances 33 1988 1987 $ 36,768 $ 2,443 458,345 41,915 29,594 14,266 1,021 11,379 6,815 ------------ ------------ $ 104,328 $ 498,218 $ 39,863 41,915 81,778 9,948 11,379 1,223 22,550 $ 104,328 $ 26,364 29,594 45,000 100,958 6,815 390,445 397,260 $ 498,218 I I I I I I I I I I I I I I I I I I I Revenues: Taxes: Ad valorem Tax penalty City sales tax Utility franchise Other Total taxes Licen3es and permits Charges for services: Swlum1na pool Animal shelter Other Total charges for services FInes and forfeitures City of Schertz, Texas General Fund Comparative Statement of Revenues, Expenditures and Changes in Fund B.lances - Budget and Actual For the Year Ended September 3D, 1988 (With comparative actual amounts for the year ended September 3D, 1987) Variance Variance 1988 1988 Paverable 1987 1987 Favorable Bud2et ~ (Unfavorable ) Budll:et Actual (Unfavorable) $ 664,995 $ 694,017 $ 29,022 $ 604,028 $ 599,374 $ (4,654) 3,300 12,315 9,015 4,100 4,951 851 405,000 455,087 50,087 402,072 423,721 21,649 124,500 Ul,833 17,333 125,100 121,277 (:3,823) 6,200 5,3.48 (852) 6,200 2,785 (3,U5) ------------ ----------- ------------ ------------ ------------ ------------ 1,203,995 l,308,,?00 10,(j,605 1,1U,500 1,152,108 10,608 ------------ ----------- ------------ ------------ ------------ ------------ 81,200 54,627 (26,573) 77 ,878 76,821 (1,057) ------------ ----------- ------------ ------------ ------------ ------------ :2:3,:2:00 15,103 (8,097) 23,200 17,6li6 (5,554) 5,300 6,710 1,410 5,850 6,763 913 13,900 10,578 (3,322) 8,300 8,050 (250) ------------ ----------- ------------ ------------ ------------ ------------ 42,400 32,391 (10,009) 37,350 3:2:,459 (4,891) ------------ ----------- ------------ ------------ ------------ ------------ 101,500 139,008 37,508 145,200 159,283 14,083 ------------ ----------- ------------ ------------ ------------ ------------ Other sources: Bulldlna rental :2:,600 1,921 (679) 2,600 2,298 (302) Hiscellaneous 10,883. 10,883 9,500 12,632 3,132 SAFES-municipal Support 4,800 4,800 4,800 4,800 Retirement reversion 11,49,(j 11,494 5,000 2,102 (2,898) Cibolo Creek Municipal Author"it)!' 6,200 6,117 (83) 6,200 6,254 54 Interest 18,000 :2:1,371 3,371 18,000 14,735 (3,265) Indirect cost reLmbursement: Water and se~r fund. 200,000 200,000 151,048 153,144 2,096 Dlscoun't.s 100 89 (11) 100 57 (43) Emergency management coordinator 9,000 7,601 (1,399) 9,000 7,815 (1,185) ------------ ----------- ------------ ------------ ------------ ------------ Total other sources Total revenues 240,700 264,276 23,576 206,248 203,837 (2,411) $ 1,669,795 $ 1,798,902 $ 129,107 $ 1,608,176 $ 1,624,508 $ 16,332 35 I I I Cl~y of Schertz~ Texas General Fund Comparative Statement of Revenue., Expenditures and Changes in Fund Balances' - Budget and Actual (Continued) For the Year Ended September ~O, 1988 (with comparative actual amounts for the year ended September 30, 1987) Var1.ance I 1988 Budll.et 1988 Favorable CUnfavorable) 1987 BudRet 1987 Variance Favorable CUnfavorable) Actual ~ Excess (deficiency) of I revenues over expenditures $ (163,360) $ 18,152 $ (181.512) $ (91,561) $ (53,779) $ 37,782 I Other financing sources (uses) : Operating transfers in Operat~ transfers out 45,000 (125,000) 233,502 (188,S02) 44,OCO 37,617 (6,383) (626,364) 501,364 (108,455) (121,730) (13,275) ------------ ------------ ------------ ------------ ------------ (392,862) 312,862 (64,455) (8lt,113) (19,658) ------------ ------------ ------------ ------------ ------------ I Total other financing sources (uses) (80,000) I I Excess (deficiency) of revenues and other financing sources over (under) expenditures and otherfinanclns uses (243,360) (374,710) 131,350 (156,016) (137,892) 18,124 I Fund balances, October 1 397,260 397,260 535,152 535,152 I Fund balances, September 30 $153,900 $ 22,550 $ 131,350 $ 379,136 $ 397,260 $ 18,124 I I I I I I I 37 I I I I I I I SPECIAL REVENUE FUND I Special Revenue Funds are used to account for the proceeds of special revenue sources that are legally restricted to expenditures for specific purposes. The revenue sharing fund was established to account for the receipt and disbursement of Federal Reserve Sharing Funds. I I I I I I I I I I I 38 I I I City of Schertz, Texas Special Revenue Fund Comparative Statement of Rev.nuea, Expenditures and Chanses in Fund Balances - Budget and Actual For the Year Ended September 30. 1988 (with comparative actual amounts for the year ended September 30, 1987) I I I 1988 BudRet I Revenues: Intergovernmental revenues $ I Other sources I Total revenues $ I Other .fitkinCing. (uses): Operating transfers (out) (45,000) I Total other financial (use:s) (05,000) $ $ I Excess (deficiency) of ~evenues over (under) other financing sources (45,000) I Fund balances. October 1 33,686 I Fund balances, September 30 (11,314) $ $ I I I I I I 1988 Actual $ I,U4 $ I,H4 $ (27.564) (27,564) $ (26,150) 33,686 7,536 Variance Favorable (Unfavorable) $ 1,414 $ 1,414 $ (17,436) (17,436) $ 18,8S0 $ 18,850 40 1987 Budfl.et $ $ $ (44,000) (44,000) $ (44,000) 61,756 $ 17.756 $ 1987 Actual $ 6,601 2,946 $ 9,547 $ (37.617) (37,617) $ (28,070) 61.756 33.686 Variance Favorable (Unfavorable) $ (6.601) (2.946) $ (9.547) $ (81.617) (81,617) 15.930 $ 15,930 I I I I I I I I This fund payment of the city. I I I I I I I I I I I DEBT SERVICE FUND is used to account for the accumulation of resources for and the principal, interest, and related costs on general long-term debt of 41 I I I I I I I I I I I I I I I I I I I City of Schertz, Texas Debt Service Fund Comparative Statement of Revenues, Expenditures and Changes in Fund For the Years Ended September 30, 1988 and 1987 1988 Revenues: Interest income $ 6,540 Total revenues 6,540 Expenditures: Bond principal 24,000 Bond interest 72,900 Agent fees 596 Total expenditures 97,496 Excess of expenditures over revenues (90,956) Other financing sources (uses): Operating transfers in Operating transfers out 133,001 (68,416) Total other finacing sources (uses) 64,585 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses ' (26,371) Fund balance, October 1 130,202 Fund balance, September 30 $ 103,831 43 Balances 1987 $ 13,319 13,319 22,000 54,042 602 76,644 (63,325) 107,878 (40,000) 67,878 4,553 125,649 $ 130,202 I I I I I I I The Capital acquisition financed by I I I I I I I I I I I I CAPITAL PROJECTS FUND Projects Fund accounts for or construction of major proprietary fund types.) financial resources to be used for the capital facilities (other than those 44 I I City of Schertz, Texas Capital Projects Fund Comparative Statement of Revenues, Expenditures and Changes in Fund Balance For the Year Ended September 30, 1988 (With comparative actual amounts for the year ended September 30, 1987) I I 1988 1987 Revenues: $ $ I I Expenditures: Capital projects 274,346 Total expenditures 274,346 I Other financing sources (uses): Operating transfers in 480,643 I Total other financing sources (uses) 480,643 I Excess of other financing sources over (under) expenditures 206,297 I Fund balance, October 1 I Fund balance, September 30 $ 206,297 $ I I I I I I I 46 I I I I I PROPRIETARY FUND TYPES ENTERPRISE FUNDS I I Enterprise Funds are established to account to be self-supporting through user charges. Water/Sewer System and the Schertz Area (SAFES) on this basis. I I I I I I I I I I I I 47 I for operations which are intended The City of Schertz operates the Facility for Emergency Services I I I I I I I I I I I I I I I I I I I City of Schertz, Texas Enterprise Funds Combining Balance Sheet (Continued) September 30, 1988 (With comparative totals for the year ended September 30, 1987) Liabi11tes and equity Current liabilities: Vouchers payable Due to other funds Accrued vacation and sick leave Total current liabilities Current liabilities payable from restricted assets: Customer deposits ,Revenue bonds Cert. of obligation Total current liabilities payable from restricted assets Noncurrent liabilities: Revenue bonds payable, less current maturities Cert, of obli, payable less current maturities Public facility loan HUD Total noncurrent liabil'ities Total liabilities Water/Sewer System $ 159,391 10,757 9,420 179,568 112,185 73,000 40,000 225,185 1,975,000 1,180,000 105,000 ' 3,260,000 3,664,753 SAFES Totals 1988 $ $ 159,391 10,757 1987 $ 220,003 100 4,227 13,647 13,513 ----------- ------------ ------------ 4,227 183,795 233,616 ----------- ------------ ------------ 112,185 102,055 73 ,000 65,000 40,000 40,000 ----------- ------------ ------------ 225,185 1,975,000 1,180,000 105,000 3,260,000 4,227 3,668,980 49 207,055 2,045,000 1,220,000 111,000 3,376,000 3,583,055 I I I I I I I I I I I I I I I I I I I City of Schertz, Texas Combining Statement of Revenues, Expenses and Changes in Retained Earnings For the Year Ended September 30, 1988 {With comparative totals for the year ended September 30, 1987) Enterorise Funds Water/Sewer System SAFES 1,056,619 195,998 1,252,617 1,059,369 ------------ ------------ ------------ ------------ 445,591 30,310 475,901 469,842 ------------ ------------ ------------ ------------ 305,413 36,566 341,979 335,164 Operating revenue: Fees charged to users $ 1,502,210 Operating expenses before depreciation: Personal services Sewage treatment Reimbursement of general and administrative Expenses Contractual services Supplies Bad debts 202,380 418,686 200,000 170,179 64,840 534 Total operating ex- penses before depreciation Operating income before depreciation Depreciation Operating income (loss) $ 140,178 Totals 1988 1987 $ 226,308 $ 1,728,518 $ 1,529,211 57,549 259,929 253,485 418,686 327,752 4,800 204,800 157,944 77,510 247,689 219,835 32,710 97,550 81,317 23,429 23,963 19,036 ------------ ------------ ------------ $ (6,256) $ 133,922 $ 186,182 51 I I I I I I I I I I I I I I I I I I I City of Schertz, Texas Combining Statement of Changes in Financial Position _ All Proprietary Fund Types For the Year Ended September 30, 1988 (With comparative totals for the year ended September 30, 1987) Sources of working capital Operations: Net income (loss) $ Items not requiring working capital: Depreciation Amortization Loss on disposal of assets Sale of revenue bonds Reduction in restricted assets Contributions received Customer deposits Total sources of working capital EnterDrise Funds Water/Sewer Svstem SAFES Totals 1987 1988 164,564 $ 1,596 $ 166,160 $ 305,413 48 36,566 341,979 48 (475) (475) 470,025 37,687 507,712 8,000 720,770 8,000 3,747 4,988 724,517 4,988 10,130 10,130 $ 1,208,925 $ 46,422 $ 1,255,347 53 (60,802) 335,164 48 2,335 276,745 1,020,000 12,724 3,967 $ 1,313,436 I I I I FIDUCIARY FUND TYPES I TRUST AND AGENCY FUNDS I Expendable Trust Funds I Self Insurance Fund - to account for the receipt of other funds' contributions to defray uninsured losses. Equipment Replacement Fund - to account for contributions for the replacement of major equipment items as they are retired from service. I A~encv Funds I Payroll Fund - to account for the collection and payment of salaries, insurance and pension premiums, and federal taxes for each city employee. I Library Fund - to account for the funds provided by the city for support of the community library. I State Fines Funds - to account for the collection and payment to the state, the state's portion of traffic fines. I Industrial Development- Industrial Development expenditures. to account for fees earned upon the issuance of bonds, interest earnings and economic development I Schertz Housing Finance Corporation - to account for funds earned from Schertz Housing Finance corporation. I I I I I 55 I I I I I I I I I I I I I I I I I I I I City of Schertz, Texas Expendable Trust Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances For the Year Ended September 30, 1988 (With comparative totals for the year ended September 30, 1987) Self Insurance Fund Equipment Replacement Fund Totals 1988 1987 Revenues: Interest Donations $ 1,726 $ 4,660 16,394 $ 6,386 16,394 $ 12,446 7,933 ------------ ----------- ------------ ------------ 1,726 21,054 22,780 20,379 Expenditures: Repairs 720 720 Capital outlay 50,834 50,834 185,956 ------------ ----------- ------------ ------------ Excess of revenues over expenditures 1,006 (29,780) (28,774) (165,577) Other finacing sources (uses): Operating transfers in Operating transfers out 2,720 10,000 12,720 2,436 Total other financing sources (uses): 2,720 10,000 12,720 2,436 Excess (deficiency) of revenue and other financial sources over (under) expenditures and other financial sources (uses) 3,726 (19,780) (16,054) (163,141) Fund balance, October 1 28,032 60,005 88,037 251,178 Fund balance, Sept. 30 $ 31,758 $ 40,225 $ 71,983 $ 88,037 57 I I I I I I I I I I I I I I I I I I I City of Schertz, Texas Combining Statement of Changes in Assets and Liabilities _ All Agency Funds (Continued) For the Year Ending September 30, 1988 Agency Balance October 1, 1987 Additions Deductions Balance September 30, 1988 State Fines Fund: Assets Cash $ Certificates of deposit 1, 341 $ 6,930 43,881 $ 35,783 6930 $ 9,439 ------------ ----------- --~--------- ------------ Total assets $ 8,271 $ 43,881 $ 42,713 $ 9,439 Liabilities Due to state of Texas $ 8,271 $ 43,881 $ 42,713 $ 9,439 ------------ ----------- ------------ ------------ Liabilities: Due to industrial dev. $ 4, 214 $ 251 $ $ 4,465 Total liabilities $ 4,214 $ 251 $ $ 4,465 59 I I I I I I GENERAL FIXED ASSETS I This account group is established to account for the fixed assets city exclusive of those relating to Proprietary Fund operations. transactions to acquire general fixed assets occur in the General I I I I I I I I I I I 61 I owned by the Expenditure Fund. I I I I I I I I I I I I I I I I I I I City of Schertz, Comparative Schedule of General September 30, 1988 ASSETS General fixed assets: Land Buildings Improvements other than buildings Vehicles Equipment Investment in general fixed assets by source: General fund Capital projects: General obligation bonds Time warrants Contributed 62 Texas Fixed Assets - By Source and 1987 1988 1987 $ 242,775 $ 240,210 1,013,103 966,740 6,528,686 2,540,670 464,590 398,024 640,874 373,537 ------------ -----------~ $ 8,890,028 $ 4,519,181 $ 1,495,117 $ 1,482,607 309,276 300,000 317,005 47,169 2,789,405 6,768,630 $ 8,890,028 $ 4,619,181 I I I I I I I I I I I I I I I I I I I Land $ 21 , 914 12,000 182,662 3,168 23,031 $ 242,775 Components of General Fixed Assets Improvements Other Than Buildin~s Buildin~s Vehicles $ 623,236 $ 2,219 $ 9,648 31,965 65,000 2,318 268,087 14,833 127,632 1,349 5,856,667 527,492 128,990 5,697 193,810 5,284 124,424 11,000 6,728 $ 1,013,103 $ 6,528,686 $ 464,590 , 64 Equipment $ 59,022 132,945 141,688 7,498 155,807 10,209 58,117 13,728 61,860 $ 640,874 I I I I I I I I I I I I I I I I I I I City of Schertz, Texas General Governmental Expenditures By Function TABLE 1 65 I I I I I I I I I I I I I I I I I I I City of Schertz, Texas Property Tax Levies! and Collections TABLE 3 Ratio Rates Of Of Total Out Delin- Percent Tax stand- quent Of Current Delin- Total Collec- ing Taxes Levy quent Tax tions Delin- To Fiscal Total Current Tax Collect- Collec- Collec- To Total quent Tax ~ Tax Levy Collections ed tions tions Tax Levy Taxes ~ 1979 $244,187 $243,451 99.7% $ 2,057 $245,508 100.5% $ 1,427 .6% 1980 255,125 252,928 99.1% 1,069 253,997 99.6% 2,384 .9% 1981 353,056 341,102 96.6% 700 341,802 100.2% 11,711 3.3% 1982 367,928 366,344 99.6% 12,120 378,464 102.9% 2,551 .7% 1983 420,897 414,341 98.4% 1,379 415,720 98.8% 7,810 1. 9% 1984 448,860 443,070 98.7% 10,977 454,047 101.1% 9,497 2.1% 1985 486,515 481,502 98.9% 2,629 484,131 99.5% 14,165 2.9% 1986 545,931 532,537 97.5% 4,193 536,730 98.3% 19,523 3.6% 1987 610,784 592,291 97.0% 7,083 599,374 100.3% 29,594 4.8% 1988 706,369 674,931 95.6% 18 , 548 694,017 98.25% 41,915 5.9% 67 I I I I I I I I I I I I I I I I I I I City of Schertz, Texas TABLE 5 Property Tax Rates - All Overlapping Governments County Year***, ~ School Countv State Road 50% 50% 25% 25% 25% Assessment Assessment Assessment Assessment Assessment Rate* Rate* Rate ~ Rate 1979 1.00 1.30 .80 .10 .30 1980 1.00 1.37 .80 .30 .30 1981 1.00 1.37 .80 .30 1982 .64** .81** .28** .06** 1983 .44** .78** .25** 0 1984 .42** .74** .24** 0 .04** 1985 .440** , .97** .2457** 0 .04** 1986 .436** 1.11 .3450 0 .0425 1987 .4128** 1.14 .3875 0 .04 1988 .24705 .783 .2852 0 .0820 * All rates shown are per $100 assessed valuation. ** All taxing authorities adopted a 100% assessment for 1982 and after. *** Year shown is the fiscal year of collection. previous calendar year. Taxes were levied the 69 I I I I I I I I I I I I I I I I I I I City of Schertz, Texas TABLE 7 Overlapping Debt For the Year Ended September 30, 1988 Percent Amount Net Debt Over- Over- Taxing Body Amount M...Q! Lanninl! Lanning * Alamo Comm. College Dist.$40,OOO,000 4-15-88 .02% $ 8,000 * Bexar County 10,090,116 1-31-88 .02% 29,767 * Comal County 10,090,116 09-30-87 .09% 9,081 * Comal County Flood Control Bonds 163,341 09-30-87 .09% 147 * Comal Independent School District 25,698,767 8-31-86 .12% 30,839 * Guadalupe County 2,912,528 10-31-87 14.75% 429,598 * Schertz-Cibolo-Universal City Independent School District 3,653,250 9-1-87 51. 88% 1,895,306 * San Antonio River Authority 28,696,908 6-30-87 .02% 5,739 ------------ Total Net Overlapping Debt 2,408,477 City of Schertz 758,401 9-30-88 100.00% 758,401 ------------ Total Direct and Overlap- ping debt (1.09% of Assessed Value- $404.26 Per Capita) $ 3,166,878 * Source of Data - Texas Municipal Reports, City of Schertz, Sept. 15, 1988 compiled and published by Municipal Advisory Council of Texas. 71 I I I I I I I I I I I I I I I I I I I Fiscal Year Endine: 9-30-88 9-30-89 9-30-90 9-30-91 9-30-92 9-30-93 9-30-94 9-30-95 9-30-96 9-30-97 9-30-98 9-30-99 9-30-00 9-30-01 9-30-02 Totals City of Schertz, Texas General Bonded Debt Summary of Debt Service Requirements Fiscal Years 1988-2002 Outstanding Cash Requirements Principal Principal Interest Total Balance $ 864,000 $ 39,000 $ 54,758 $ 93,758 825,000 45,000 52,049 97,049~ 780,000 45,000 49,067 94,067 735,000 46,000 46,084 92,084 689,000 57,000 42,832 99,832 632,000 58,000 38,976 96,976 574,000 60,000 35,128 95,128 514,000 67,000 31,115 98,115 447,000 67,000 27,049 94,049 380,000 73,000 22,726 95,726 307,000 78,000 17,975 95,975 229,000 79,000 13,082 92,082 150,000 85,000 8,211 93,211 65,000 65,000 2,112 67,112 0 ----------- ------------ ----------- $ 864,000 $ 441,164 $ 1,305,164 73 TABLE 8-1 I I I I I I I I I I I I I I I I I I I Fiscal Year Endinsr 9-30-88 9-30-89 9-30-90 9-30-91 9-30-92 9-30-93 9-30-94 9-30-95 9-30-96 9-30-97 9-30-98 9-30-99 9-30-00 9-30-01 9-30-02 9-30-03 9-30-04 9-30-05 9-30-06 9-30-07 Totals City of Schertz, Texas Utility Syste~ Revenue Bonds Summary of Debt Service Requirements Fiscal Years 1988 - 2007 Outstanding Cash Reauirements Principal Principal Interest Total Balance $ 2,045,000 $ 70,000 $ 151,285 $ 221,285 1,975,000 75,000 146,023 221,023 1,900,000 80,000 140,472 220,472 1,820,000 80,000 134,473 214,473 1,740,000 90,000 128,672 218,672 1,650,000 95,000 122,105 217,105 1,555,000 100,000 115,028 215,028 1,455,000 100,000 107,587 207,587 1,355,000 105,000 99,938 204,938 1,250,000 105,000 91,832 196,832 1,145,000 135,000 83,798 218,798 1,010,000 100,000 73,475 173,475 910,000 60,000 65,000 125,000 850,000 150,000 60,525 210,525 700,000 150,000 48,050 198,050 550,000 150,000 37,763 187,763 400,000 150,000 27,475 177,475 250,000 125,000 17,125 142,125 125,000 125,000 8,563 133,563 0 ------------ ------------ ----------- $ 2,045,000 $ 1,659,189 $ 3,704,189 Average annual requirement $ 194,957 75 TABLE 8-3 I I I I I I I I I I I I I I I I I I I City of Schertz, Texas TABLE 9 Ratio of Annual Debt Service Expenditures For General Obligation Bonded Debt to Total General Expenditures Last Ten Fiscal Years Ratio Debt Service Of Debt Total Service To Fiscal Service General Governmenta Year Principal Interest Debt Expenditures* Exoenditures 1979 $17,000 $32,827 $49,827 $671,677 7.4% 1980 18,000 31,953 49,953 982,544 5.1% 1981 18,000 31,035 49,035 775,445 6.3% 1982 18,000 30,131 48,131 885,568 5.4% 1983 19,000 29,227 48,227 913,082 5.3% 1984 20,000 28,577 48,577 1,099,520 4.4% 1985 21,000 27,878 48,878 1,237,610 3.9% 1986 21,000 26,233 47,233 1,466,855 3.2% 1987 22,000 25,169 47,169 1,766,347 2.7% 1988 24,000 72,900 96,900 1,878,246 5.2% * Includes General, Special Revenue,' and Debt Service Funds. 77 I I I I I I I I I I I I I I I I I I I TABLE 10-1 Debt Service Reauirements Number of Customers Princiual Interest Total Coveral!e Water Sewer $20,000 $56,480 $76,480 1. 68: 1 2,146 2,041 25,000 55,417 80,417 2.50:1 2,203 2,201 25,000 81,098 106,098 1. 56: 1 2,207 2,060 35,000 99,073 134,073 1. 76: 1 2,214 2,151 40,000 111,360 151,360 1. 98: 1 2,246 2,055 70,000 274,977 344,977 1.13:1 2,785 2,133 75,000 224,036 299,036 1. 19: 1 2,877 2,231 83,000 217,379 300,379 1. 53: 1 3,208 2,333 105,000 271,454 376,454 1. 20: 1 3,498 2,639 113,000 262,543 375,543 1. 19: 1 3,692 2,662 79 I I City of Schertz, Texas TABLE 10-2 Waterworks and Sewer System Fund Revenue Bond Requirements and Restricted Funds (Continued) For the Year Ended September 30, 1988 I I Reserve Fund Reouirement I I I The Revenue Bond Reserve Fund requirement increased by over $100,000 with the 1987 issue. The city is required to make monthly deposits sufficient to meet the total reserve fund requirement within 60 months of the closing date for the 1987 issue. City monthly deposits through September 30, 1988 met these requirements. 1 1/2 Times Average Annual Principal and Interest Requirement $194,957 $ 292,436 I Investments (At Cost) Held By First International Bank of San Antonio I AIM Treasury Fund $ Principal Cash 209,075 1,960 211,035 Funds Available Over (Under) Requirement $ (81,401) I I REVENUE BOND COVERAGE Year Ended Operating Income Add Denreciation Deduct Solid Waste Revenue "Net Revenues" Bonded Debt Reouirement Coverage Ratio I I 1988 $140,178 $305,413 $47,723 $397,868 $194,957 2.04 I I I I I 81 I I I I I I I I I I I I I I I I I I I I Fiscal Year 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 Sources: Population 6,874 7,260 7,672 9,180 est. 9,250 est. 9,600 est. 11,400 est. 12,500 est. 12,500 est. 12,580 est. City of Schertz, Texas Demographic Statistics Last Ten Fiscal Years Per Capita Income (2) Level In Years Of Formal Education ill Median A~e (3) 41 12 $6,714 41 12 40 12 7,145 40 12 40 12 7,240 40 12 40 12 7,400 41 12 12 8,300 41 12 (1) 1970 and 1980 Bureau of the Census Department of Planning, University of Texas School Enrollment ill. 1,118 1,182 1,193 2,047 2,092 2,049 2,064 2,154 2,306 2,334 TABLE 12 Unemployment Rate (3) 5.7 6.6 5.7 7.0 6.7 5.7 5.4 6.3 5.7 6.2 (2) Department of Economics, University of Texas U.S. Department of Labor (Information not available for odd years) (3) Texas Employment Commission, (4) Schertz-Cibolo-Universal City Independent School District 83 I I I I I I I I I I I I I I I I I I I TABLE 13 Total Bank Deposits Commercial Property Value* Residential Nontaxable $11,934,000 $6,633,643 $46,019,088 $3,485,200 14,642,000 7,061,640 48,148,602 3,505,100 19,047,000 11,139,943 48,800,602 3,710,200 26,664,000 12,050,973 49,708,602 3,770,200 29,743,000 13,249,751 50,960,220 4,120,300 31,842,000 14,285,782 91,817,653 10,457,515 34,089,000 15,006,912 91,817,653 10,828,092 40,357,000 15,205,126 95,683,981 10,828,092 56,924,876 15,348,150 102,787,953 10,828,092 64,197,486 53,591,069 148,425,176 10,828,092 Sources: City Building Inspection Records City Tax Records S. W. T. Research Center * Estimated Actual Value 85 I I I I I I I I I I I I I I I I I I I City of Schertz, Texas Miscellaneous Statistics For the Year Ended September 30, Date of Incorporation: Date First Charter Adopted: Date Present Charter Adopted: Form of Government: Area - Square Miles: 1988 1987 1986 1985 1984 1983 1980 1970 1960 1950 Miles of Streets and Alleys: Streets, paved Streets, unpaved Alleys Sidewalks Miles of Sewer: Storm Sanitary Building Permits: Permits Issued 1988 1987 1986 1985 1984 1983, 1982 1981 1980 1979 368 430 270 378 367 400 375 186 181 173 Fire Protection: Number of stations Number of employees (full Number of volunteers and part-time) 87 TABLE 15 1988 December 1958 April 1974 Amended April 1979 Council-Manager 22.37 22.38 21. 32 13.14 12.82 10.53 9.90 8.99 0.80 0.80 85 miles 17 miles 11.6 miles 3.8 miles 1.2 miles 35 miles Value of Buildings $ 7,752,335 9,725,569 16,349,884 10,697,985 14,218,408 5,411,680 2,470,000 1,444,500 725,977 2,057,214 1 14 35 I I I I I I I I I I I I I I I I I I I City of Schertz, Texas Miscellaneous Statistics Year Ended September 30, 1988 (CONTINUED) Age distribution: 1980 1970 8.4 10.3 21.4 24.0 17.3 18.0 29.1 27.4 15.3 11.6 9.5 8.6 1960 Under 5 5-14 15-24 25-44 45-60 60 + 12.2 26.3 19.1 25.0 9.3 8.1 Source: 1980 Census and Economic Research Associates Current population estimate Source: Texas Industrial Commission Retail Sales: 1988 1987 1986 1985 1984 1983 1982 1981 ,1980 1979 Source: State Comptroller TABLE 15 1950 12.8 26.7 20.9 25.3 7,1 7.2 12,580 $46,182,400 41,628,900 30,510,100 23,867,300 20,742,300 18,635,100 16,057,717 13,295,400 12,622,600 10,790,600 Per Capita Income: 1988 $ 8,300 1987 7,400 1986 7,400 1985 7,240 1984 7,240 Source: U.S. Bureau of Economic Analysis Texas Employment Commission 89 I I I I I I I I I I I I I I I I I I I City of Schertz, Texas Miscellaneous Statistics Year Ended September 30, 1988 (CONTINUED) TRANSPORTATION Railroads: 1.S.P.T.C. Service Available: Piggyback? Mtr. Frt. Carriers: 3 Total number of Truck Lines Serving the Area: 10 Air: 2. M.P.R.C. Yes Switching? TABLE 15 Yes Nearest Airport: SAN ANTONIO INTERNATIONAL AIRPORT Runway Length (ft): 8,500 Nearest Airport w/Commercial Service: SAN ANTONIO/Distance - 18 mi. Bus Service: 1 Greyhound Parcel Service: 1 U.P.S'. UTILITIES Electricity Distributor: 1. G.V.E,C. 2. C.P.S.C. 3. N.B.U. Water: Schertz Source: Wells Max. Daily Capacity (MGPD): 8.50 Peak Load (MGPD): 3.0 Overhead Storage: (MG): 1.215 Basic Rate Per 1000 Gallons: $1.01 Sewer: Type of Treatment Plant-ADVANCED/SECONDARY Capacity (MGPD): 6.2 Present Load: 42% Basic Rate Per 1000 Gallons: $1.40 Type of Solid Waste Disposal: LANDFILL Natural Gas Distributor: 1. Entex 2. CPS FINANCIAL INSTITUTIONS Banks: 1 Savings & Loan: 1 Total Deposits: $46,215,605 Total Deposits: $18,041,580 INDUSTRIAL PROPERTIES AVAILABLE Name 1. Tri-County Ind. Park 2. Park 35 Bus./Ind, Park 3. Schertz Industrial Park Acres 562 220 73 TAXES (1988) Real Prooertv City: County: School: Rate/S100 .2576 .2472 .8882 Assessment Ratio 100.00% 100.00% 100.00% 91