CAFR FY 2006-2007CITY OF SCHERTZ, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FISCAL YEAR ENDED SEPTEMBER 30, 2007
OFFICIALS ISSUING REPORT
Don E. Taylor
City Manager
Juan F. Santoya
Director of Finance
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CONTENTS
INTRODUCTORY SECTION
PAGE
NUMBER
Letter of Transmittal ix
City Officials xiii
Organizational Chart xv
2006 Certificate of Achievement xvii
FINANCIAL SECTION
Independent Auditor's Report 3
Management's Discussion and Analysis 7
Basic Financial Statements
Statement of Net Assets 24
Statement of Activities 26
Balance Sheet - Governmental Funds 27
Reconciliation of Balance Sheet - Governmental
Funds to Statement of Net Assets 28
Statement of Revenues, Expenditures,
and Changes in Fund Balances - Governmental
Funds 29
Reconciliation of Change in Fund Balances -
Governmental Funds to Change in Net Assets -
Governmental Activities
30
Statement of Net Assets - Proprietary Funds
31
Statement of Revenues, Expenses, and Changes
In Fund Net Assets - Proprietary Funds
33
Statement of Cash Flows - Proprietary Funds
34
Notes to Basic Financial Statements
37
Required Supplementary Information
Schedule of Revenues, Expenditures, and
Changes in Fund Balances - Budget and
Actual - General Fund
56
Notes to Required Supplementary Information
58
CONTENTS
PAG E
TABLE NUMBER
Combining And Individual Fund Statements
and Schedules
Nonmajor Governmental Funds (Special Revenue Funds)
Combining Balance Sheet 62
Combining Statement of Revenues, Expenditures,
and Changes in Fund Balances 64
Park Special Revenue Fund - Schedule of Revenues,
Expenditures, and Changes in Fund Balance -
Budget to Actual 66
Recycling Special Revenue Fund - Schedule of
Revenues, Expenditures, and Changes in Fund
Balance - Budget to Actual 67
Hotel Occupancy Tax Special Revenue Fund -
Schedule of Revenues, Expenditures, and
Changes in Fund Balance - Budget to Actual 68
Debt Service Fund - Schedule of Revenues,
Expenditures, and Changes in Fund Balance -
Budget to Actual 69
Discretely Presented Component Units
Combining Statement of Net Assets 72
Combining Statement of Activities 73
STATISTICAL SECTION
Net Assets, by Component, Last Five Fiscal Years 1 76
Change in Net Assets, Last Five Fiscal Years 2 77
Fund Balances, Governmental Funds,
Last Five Fiscal Years 3 80
Changes in Fund Balances, Governmental Funds, Last Ten
Fiscal Years 4 82
Total Water and Sewer Consumption and Rates, Last Ten
Fiscal Years 5 84
Principal Water and Sewer Consumers 6 85
iv
CONTENTS
PAGE
TABLE NUMBER
Assessed Value and Estimated Actual Value of
Taxable Property, Last Ten Fiscal Years
7 86
Direct and Overlapping Property Tax Rates, Late Ten
Fiscal Years
8 87
Principal Property Taxpayers, Current Year
and Nine Years Ago
9 88
Property Tax Levies and Collections,
Last Ten Fiscal Years
10 89
Ratios of Outstanding Debt by Type,
Last Ten Fiscal Years
11 90
Ratios of General Bonded Debt Outstanding,
Last Ten Fiscal Years
12 91
Direct and Overlapping Governmental Activities Debt,
as of September 30, 2007
13 92
Debt Margin Information, Last Ten Fiscal Years
14 93
Pledged Revenue Coverage, Last Ten Fiscal Years
15 94
Demographic and Economic Statistics - Last Ten Fiscal Years
16 95
Top Ten Employers, Current Year
17 96
Full -Time Equivalent City Employees by Function /Program
Last Five Fiscal Years
18 97
Operating Indicators by Function /Program,
Last Ten Fiscal Years
19 98
Capital Asset Statistics by Function /Program,
Last Ten Fiscal Years
20 99
Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an
Audit of Financial Statements Performed in Accordance
with Government Auditing Standards
101
Schedule of Findings and Responses
105
v
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vi
INTRODUCTORY SECTION
vii
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viii
April 29, 2008
1400 SCHERTZ PARKWAY
SCHERTZ, TEXAS 78154 -1634
(210) 619 -1020
FAX (210) 659 -3204
www.schertz.com
To the Honorable Mayor, City Council, and the Citizens of City of Schertz:
DON E. TAYLOR
CITY MANAGER
State law requires that local governments publish a complete set of financial statements presented in
conformity with generally accepted accounting principles in the United States of America (U.S. GAAP)
and audited in accordance with generally accepted auditing standards in the United States of America
by a firm licensed certified public accountants. Pursuant to that requirement, we hereby issue the
comprehensive annual financial report of the City of Schertz for the fiscal year ended September 30,
2007.
This report consists of management's representations concerning the finances of the City of Schertz.
Consequently, management assumes full responsibility for the completeness and reliability of all the
information presented in this report. To provide a reasonable basis for making these representations,
management of the City of Schertz has established a comprehensive internal control framework that is
designed both to protect the government's assets from loss, theft, or misuse and to compile sufficient
reliable information for the preparation of the City of Schertz's financial statements in conformity with
U.S. GAAP. Because the cost of internal controls should not outweigh their benefits, the City of Schertz
comprehensive framework of internal controls has been designed to provide reasonable rather than
absolute assurance that the financial statements will be free from material misstatement. As
management, we assert that, to the best of our knowledge and belief, this financial report is complete
and reliable in all material respects.
The City of Schertz's financial statements have been audited by Thompson, Williams, Biediger, Kastor
and Young, L.C., a firm of licensed certified public accountants. The goal of the independent audit was
to provide reasonable assurance that the financial statements of the City of Schertz for the fiscal year
ended September 30, 2007, are free of material misstatement. The independent audit involved
examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements; assessing the accounting principles used and significant estimates made by management;
and evaluating the overall financial statement presentation. The independent auditor concluded, based
upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the City of
Schertz's financial statements for the fiscal year ended September 30, 2007, are fairly presented in
conformity with U.S. GAAP. The independent auditor's report is presented as the first component of the
financial section of this report. The independent audit of the financial statements of the City of Schertz
was part of a broader, federally mandated "Single Audit" designed to meet the special needs of federal
grantor agencies. The standards governing Single Audit engagements require the independent auditor
to report not only on the fair presentation of the financial statements, but also on the audited
government's internal controls and compliance with legal requirements, with special emphasis on
internal controls and legal requirements involving the administration of federal awards.
GAAP requires that management provide a narrative introduction, overview, and analysis to
accompany the basic financial statements in the form of Management's Discussion and Analysis
(MD&A). This letter of transmittal is designed to complement MD &A and should be read in conjunction
with it. The City of Schertz's MD&A can be found immediately following the report of the independent
auditors.
ix
Profile of the Government
The City of Schertz, incorporated in 1958, is located in the central part of Texas, which is considered to
be a top growth area in the state, and one of the top growth areas in the country. The City of Schertz
currently occupies a land area of 28 square miles and serves a population of 31,788. The City of
Schertz is empowered to levy a property tax on both real and personal properties located within its
boundaries. It also is empowered by state statue to extend its corporate limits by annexation, which
occurs periodically when deemed appropriate by the governing body.
The City of Schertz has operated under the council- manager form of government since 30 November
1972. Policymaking and legislative authority are vested in a City Council consisting of the mayor and 5
other members. The City Council is responsible, for establishing public policy on City matters by the
passage of appropriate ordinances and resolutions. The City Manager is responsible for overseeing
the day -to -day operations of the government, implementing policy established by City Council, and for
appointing the heads of the various departments. The council is elected on a non - partisan basis.
Council members serve two -year staggered terms, with two council members elected every two years.
The mayor is elected to serve a two -year term. The mayor and all five council members are elected at
large.
The City of Schertz provides a full range of services, including police and fire protection, the
construction and maintenance of streets, recreational activities, cultural events, water and sewer
services and EMS services.
The annual budget serves as the foundation for the City of Schertz's financial planning and control. :All
departments of the City of Schertz are required to submit requests for appropriation to the City
Manager in June of each year. The City Manager uses these requests as the starting point for
developing a proposed budget. The City Manager then presents this proposed budget to the council for
review prior to 1 August. The council then holds public hearings on the proposed budget and to adopt a
final budget by no later than 30 September, the close of the City of Schertz's fiscal year. The
appropriated budget is prepared by each department (e.g. police). Department heads may make
transfers of appropriations within a department. Transfers of appropriations between departments,
however, require a special approval of the City Council. Budget to actual comparisons are provided in
this report for each individual governmental fund for which an appropriated annual budget has been
adopted. For the general fund, this comparison is presented on pages 56 -57 as part of the required
supplementary information.
Factors Affecting Financial Condition
The information presented in the financial statements is perhaps best understood when it is considered
from the broader perspective of the specific environment within which the City of Schertz operates.
Local economy. The City of Schertz currently enjoys a favorable economic environment and local
indicators point to continued stability. The region has a growing manufacturing and industrial base that
adds to the relative stability of the unemployment rate. Major industries with headquarters or divisions
located within the government's boundaries or in close proximity include Verizon, Sprint, Nabisco,
Block Distributing, and WalMart. The region has a labor force of approximately 820,000 which is
anticipated to grow at a rate of 2.0 percent each year for the next few years. Meanwhile, there
continues to be a trend toward steady residential growth.
Long -term financial planning. The City Council has approved plans to add a new state of the art
library and additional recreational facilities. Preliminary estimates point to a project timetable of one to
three years with a projected total cost to the City of Schertz of $9,000,000.
x
Cash management policies and practices. Cash temporarily idle during the year was invested
through State local investment pools. These funds are essentially liquid. The average yield on
investments is about 3 percent. Active involvement in investment vehicles was limited due to extremely
low interest rates. The rate of return was simply not sufficient to justify the management expense.
Risk Management. During 2007, the City continued a risk management program for worker's
compensation. Various control techniques, including employee accident prevention training, have been
implemented during the year to minimize accident - related losses. Third -party coverage is currently
maintained for individual worker's compensation claims and all other potential losses. Additional
information on the City of Schertz's risk management activity can be found in the notes to the financial
statements.
Pension benefits. The City of Schertz sponsors an agent multiple - employer defined benefit pension
plan for its employees. Each year, an independent actuary engaged by the pension plan calculates the
amount of the annual contribution the City of Schertz must make to the pension plan to ensure that the
plan will be able to fully meet its obligations to retired employees on a timely basis. As a matter of
policy, the City of Schertz fully funds each year's annual required contribution to the pension plan as
determined by the actuary. The remaining unfunded amount is being systematically funded as part of
the annual required contribution calculated by the actuary.
Awards and Acknowledgements
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a
Certificate of Achievement for Excellence in Financial Reporting to the City of Schertz for its
comprehensive annual financial report for the fiscal year ended September 30, 2006. This was the 19th
consecutive year that the City has received this prestigious award. In order to be awarded a Certificate
of Achievement, the City must publish an easily readable and efficiently organized comprehensive
annual financial report. This report must satisfy both generally accepted accounting principles and
applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe our current
comprehensive annual financial report continues to meet the Certificate of Achievement Program's
requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.
The preparation of this report would not have been possible without the efficient and dedicated services
of the entire staff of the finance department. We would like to express our appreciation to all members
of the department who assisted and contributed to the preparation of this report.
In addition, without the assistance of each and every department head on staff, we would have none of
the successes we've enjoyed. Credit also must be given to the Mayor and the City Council for their
unfailing support for the City Manager and staff.
Respectfully submitted,
Don E. Taylor
City Manager
Juan F. Santoya
Finance Director
xi
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xii
CITY OF SCHERTZ, TEXAS
CITY OFFICIALS
MAYOR HONORABLE HAL BALDWIN
CITY COUNCIL DAVID SCAGLIOLA
MAYOR PRO -TEM
JOHN TRAYHAN
JIM FOWLER
MICHAEL CARPENTER
TONY WILENCHIK
CITY MANAGER DON E. TAYLOR
DIRECTOR OF FINANCE JUAN F. SANTOYA, JR.
INDEPENDENT AUDITORS
Thompson, Williams, Biediger, Kastor & Young, L.C.
San Antonio, Texas
xiii
1 CITY ATTORNEY 1
POLICE
ANIMAL
CONTROL
PROSECUTING
ATTORNEY
ASSISTANT
CITY MANAGER
HUMAN
RESOURCES
FINANCE 1
PURCHASING
x
c
EMS III FIRE
COURT SUPPORT
GENERAL
SERVICES
RISK
MANAGER
PUBLIC �
INFORMATION
OFFICER
BUSINESS
OFFICE
Appendix I
MAYOR AND CITY COUNCIL
CITY MANAGER (CM)
ASSISTANT
CITY MANAGER
IINFORMATION I
TECHNOLOGY
As of 20 Sep 2006
' CITY SECRETARY
MUNICIPAL COURT JUDGE
RECORDS
MANAGEMENT
WARRANT
SERVICES OFFICER
BAILIFF
PUBLIC
WORKS
COMMUNITY
SERVICES
Schertz
Economic Dev
Corp
ENGINEERING
DRAINAGE
PARKS
(4 -B
CORP)
PLANNING
& ZONING
WATERISWR
LIBRARY
INSPECTIONS/
STREETS
CODE
ENFORCEMENT
FLEET SVS
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xvi
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Schertz
Texas
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
September 30, 2006
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
xvii
Of TH
a�u ! �YfEO STATES
AND
co s�
a�aA=
L
President
Executive Director
xvii
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xviii
FINANCIAL SECTION
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Independent Auditor's Report
To the Honorable Mayor and
Members of the City Council
City of Schertz, Texas
CERTIFIED PUBLIC ACCOUNTANTS
MEMBERS zWERICAN INSTITUTE OF
CERTIFIED PUBLIC ACCOUNTANTS
We have audited the accompanying financial statements of the governmental activities,
the business -type activities, the aggregate discretely presented component units, each major
fund, and the aggregate remaining fund information of the City of Schertz, Texas, as of and
for the year ended September 30, 2007, which collectively comprise the City's basic financial
statements, as listed in the table of contents. These financial statements are the
responsibility of the City of Schertz, Texas', management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in
the United States of America and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States.
Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the respective financial position of the governmental activities, the business -type
activities, the aggregate discretely presented component units, each major fund, and the
aggregate remaining fund information of the City of Schertz, Texas, as of September 30,
2007, and the respective changes in financial position and cash flows, where applicable,
thereof for the year then ended in conformity with accounting principles generally accepted in
the United States of America.
In accordance with Government Auditing Standards, we have also issued our report
dated March 31, 2008 on our consideration of City of Schertz, Texas' internal control over
financial reporting and on our tests of its compliance with certain provisions of laws,
regulations, contracts and grant agreements and other matters. The purpose of that report is
to describe the scope of our testing of internal control over financial reporting and
compliance and the results of that testing and not to provide an opinion on the internal
control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be considered in
assessing the results of our audit.
3
THOMPSON, WILLIAMS, BIEDIGER. MSTOR W YOUNG. L.C.
Thompson,
Williams,
Biediger,
N.T LOOP 4111, SUITF.
KastOr,
1,
SAN -55
SAN ANTONIO, TEAS 58224) -:5308
210/541-2581
EV\ 210/341 -2588
1 i
cpas @twbky.com
Young,
L.C.
Independent Auditor's Report
To the Honorable Mayor and
Members of the City Council
City of Schertz, Texas
CERTIFIED PUBLIC ACCOUNTANTS
MEMBERS zWERICAN INSTITUTE OF
CERTIFIED PUBLIC ACCOUNTANTS
We have audited the accompanying financial statements of the governmental activities,
the business -type activities, the aggregate discretely presented component units, each major
fund, and the aggregate remaining fund information of the City of Schertz, Texas, as of and
for the year ended September 30, 2007, which collectively comprise the City's basic financial
statements, as listed in the table of contents. These financial statements are the
responsibility of the City of Schertz, Texas', management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in
the United States of America and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States.
Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the respective financial position of the governmental activities, the business -type
activities, the aggregate discretely presented component units, each major fund, and the
aggregate remaining fund information of the City of Schertz, Texas, as of September 30,
2007, and the respective changes in financial position and cash flows, where applicable,
thereof for the year then ended in conformity with accounting principles generally accepted in
the United States of America.
In accordance with Government Auditing Standards, we have also issued our report
dated March 31, 2008 on our consideration of City of Schertz, Texas' internal control over
financial reporting and on our tests of its compliance with certain provisions of laws,
regulations, contracts and grant agreements and other matters. The purpose of that report is
to describe the scope of our testing of internal control over financial reporting and
compliance and the results of that testing and not to provide an opinion on the internal
control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be considered in
assessing the results of our audit.
3
THOMPSON, WILLIAMS, BIEDIGER. MSTOR W YOUNG. L.C.
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The management's discussion and analysis and budgetary comparison information on
pages 7 through 21 and 56 through 57, are not a required part of the basic financial
statements but are supplementary information required by accounting principles generally
accepted in the United States of America. We have applied certain limited procedures, which
consisted principally of inquiries of management regarding the methods of measurement and
presentation of the required supplementary information. However, we did not audit the
information and express no opinion on it.
Our audit was conducted for the purpose of forming an opinion on the financial
statements that collectively comprise the City of Schertz, Texas, basic financial statements.
The introductory section, combining and individual nonmajor fund financial statements,
other schedules, and statistical tables are presented for purposes of additional analysis and
are not a required part of the basic financial statements. The combining and individual
nonmajor fund financial statements and other schedules have been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic financial statements taken as a
whole. The introductory section and statistical tables have not been subjected to the auditing
procedures applied in the audit of the basic financial statements, and accordingly, we express
no opinion on them.
Certified Public Accountants
San Antonio, Texas
March 31, 2008
5
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MANAGEMENT'S DISCUSSION AND ANALYSIS
As management of the City of Schertz, we offer readers of the City's financial statements this
narrative overview and analysis of the financial activities of the City of Schertz for the fiscal year
ended September 30, 2007. We encourage readers to consider the information presented here in
conjunction with additional information that we have furnished in our letter of transmittal, which
can be found in the introductory section of this report.
Financial Highlights
The assets of the City of Schertz exceeded its liabilities at the close of the most recent fiscal year
by $88,800,252 (net assets). Of this amount, $34,430,856 (unrestricted net assets) may be used to
meet the City's ongoing obligations to citizens and creditors.
The City's total net assets increased by $14,978,366. Approximately 56% increase is attributable to
capital contributions from developers.
As of the close of the current fiscal year, the City's governmental funds reported combined ending
fund balances of $25,762,566, an increase of $1,630,353 in comparison with the prior year. The
key factor in this increase was issuance of general obligation bonds for construction projects.
At the end of the current fiscal year, unreserved fund balance for the general fund was $9,210,610,
or 66.8% of total general fund expenditures, including capital outlay.
The City's total debt increased by $14,615,000 during the current fiscal year. The key factor in
this increase was the issuance of general obligation bonds in the amount of $6,000,000 and
certificates of obligation of $8,615,000.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City's basic financial
statements. The City's basic financial statements comprise three components: 1) government -wide
financial statements, 2) fund financial statements, and 3) notes to the financial statements. This
report also contains other supplementary information in addition to the basic financial statements
themselves.
Government -wide financial statements. The government -wide financial statements are designed
to provide readers with a broad overview of the City's finances, in a manner similar to a private -
sector business.
The statement of net assets presents information on all of the City's assets and liabilities, with the
difference between the two reported as net assets. Over time, increases or decreases in net assets
may serve as a useful indicator of whether the financial position of the City of Schertz is improving
or deteriorating.
The statement of activities presents information showing how the City's net assets changed during
the most recent fiscal year. All changes in net assets are reported as soon as the underlying event
giving to the change occurs, regardless of the timing of related cash flows. Thus, revenues and
expenses are reported in this statement for some items that will only result in cash flows in future
fiscal periods (e.g. uncollected taxes and earned but unused vacation leave).
7
Both of the government -wide financial statements distinguish functions of the City of Schertz that
are principally supported by taxes and intergovernmental revenues (governmental activities) from
other functions that are intended to recover all or a significant portion of their costs through user
fees and charges (business -type activities). The governmental activities of the City of Schertz
include general government, public safety, streets and parks, health, and culture and recreation.
The business -type activities of the City of Schertz include a water and sewer department and an
emergency medical services department.
The government -wide financial statements include not only the City of Schertz itself (known as the
primary government) but also legally separate component units for which the City is financially
accountable. Financial information for these component units is reported separately from the
primary government.
The government -wide financial statements can be found on pages 24 through 26 of this report.
Fund financial statements. A fund is a grouping of related accounts that is used to maintain
control over resources that have been segregated for specific activities or objectives. The City of
Schertz, like other state and local governments, uses fund accounting to ensure and demonstrate
compliance with finance - related legal requirements. The funds of the City of Schertz can be divided
into two categories: governmental and proprietary.
Governmental funds. Governmental funds are used to account for essentially the same functions
reported as governmental activities in the government -wide financial statements. However, unlike
the government -wide financial statements, governmental fund financial statements focus on near -
term inflows and outflows of spendable resources, as well as on balances of spendable resources
available at the end of the fiscal year. Such information may be useful in evaluating a government's
near -term financing requirements.
Because the focus of governmental funds is narrower than that of the government -wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government -wide financial statements. By
doing so, readers may better understand the long -term impact of the government's near -term
financing decisions. Both the governmental fund balance sheet and the governmental fund
statement of revenues, expenditures, and changes in fund balances provide a reconciliation to
facilitate this comparison between governmental funds and governmental activities.
The City of Schertz maintains eight individual governmental funds. Information is presented
separately in the governmental fund balance sheet and in the governmental fund statement of
revenues, expenditures, and changes in fund balances for the general fund, the debt service fund,
and the capital projects fund, all of which are considered to be major funds. Data from the other
five governmental funds are combined into a single, aggregated presentation. Individual fund data
for each of these non -major governmental funds is provided in the form of combining statements
elsewhere in this report.
The basic governmental fund financial statements can be found on pages 27 through 30 of this
report.
Proprietary funds. The City of Schertz maintains one type of proprietary fund. Enterprise funds are
used to report the same functions presented as business -type activities in the government -wide
financial statements. The City of Schertz uses enterprise funds to account for its water and sewer
department and for its emergency medical services department.
E
Proprietary funds provide the same type of information as the government -wide financial
statements, only in more detail. The :proprietary fund financial statements provide separate
information for the water and sewer department and for the emergency medical services
department, both of which are considered to be major funds of the City of Schertz.
The basic proprietary fund financial statements can be found on pages 31 through 35 of this
report.
Notes to the financial statements. The notes provide additional information that is essential to a
full understanding of the data provided in the government -wide and fund financial statements. The
notes to the financial statements can be found on pages 37 through 54 of this report.
Other information. In addition to the basic financial statements and accompanying notes, this
report also presents certain required supplementary information concerning the City's general fund
budgetary schedule. The City of Schertz adopts an annual appropriated budget for its general fund.
A budgetary comparison schedule has been provided for the general fund to demonstrate
compliance with this budget. Required supplementary information can be found on pages 56
through 58 of this report.
The combining statements referred to earlier in connection with non -major governmental funds are
presented immediately following the required supplementary information. Combining and
individual fund statements and schedules can be found on pages 62 through 69 of this report.
Government -wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a government's financial
position. In the case of the City of Schertz, assets exceeded liabilities by $88,800,252 at the close
of the most recent fiscal year.
The largest portion of the City's total net assets (58 %) reflects its investment in capital assets (e.g.,
land, buildings, machinery, and equipment), less any related debt used to acquire those assets that
is still outstanding. The City of Schertz uses these capital assets to provide services to citizens;
consequently, these assets are not available for future spending. Although the City's investment in
its capital assets is reported net of related debt, it should be noted that the resources needed to
repay this debt must be provided from other sources, since the capital assets themselves cannot be
used to liquidate these liabilities.
The remainder of this page is left blank intentionally.
9
GOVERNMENTAL
ACTIVITIES
2007 2006
NET ASSETS
BUSINESS -TYPE
ACTIVITIES TOTAL
2007 2006 2007 2006
Current and
Other Assets
$ 31 ,753,940
$ 25,974,328
$ 26,949,427
$ 13,174,444
$ 58,703,367
$ 39,148,772
Capital Assets
54.1 87.722
46.231 .571
36.363.275
31.873.405
90.550.997
78.104.976
TOTAL ASSETS
$ 85.941.662
$ 72.205.899
$ 63.312.702
$ 45.047.849
$ 149.254.364
$ 11 7.253.748
Long -Term Liabilities
Outstanding
34,687,865
31,656,735
15,240,026
6,753,086
49,926,891
38,409,821
Other Liabilities
6.494.165
2.643.954
4.019.303
2.378.087
9.232.323
5.022.041
TOTAL LIABILITIES
$ 41 .182.030
$ 34.300,689
$ 19.259.329
$ 9.131.1 73
$ S9,159,214
$ 43.431.862
Net Assets
Invested in Capital
Assets, Net of
Related Debt 32,921,277 13,257,031 18,788,933 24,783,839 51,710,210 38,040,870
Restricted 663,973 15,888,549 1,995,213 1,253,711 2,659,186 17,142,260
Unrestricted 11,161,629 8.759.630 23.269.227 9.879.126 34_,430,856 18.638.756
TOTAL NET ASSETS $ 44,746,879 $ 37,905,210 $ 44,053,373 $ 35,916,676 $ 88,800,252 $ 73,821,886
Table AA
An additional portion of the City's total net assets (3.0%) represents resources that are subject to
external restrictions on how they may be used. The remaining balance of unrestricted net assets,
($34,430,856) may be used to meet the government's ongoing obligations to citizens and
creditors.
At the end of the current fiscal year, the City of Schertz is able to report positive balances in all
three categories of net assets, both for the government as a whole, as well as for its separate
governmental and business -type activities. The same situation held true for the prior fiscal year.
There was a decrease of $15,224,576 in restricted net assets reported in connection with the City's
governmental activities. This decrease is due to a reclassification of GFOA.
The government's net assets increased by $14,978,366 during the current fiscal year. About 56%
of this increase represents capital contributions from developers.
The remainder of this page is left blank intentionally.
10
The following table indicates changes in net assets for governmental and business -type activities:
GOVERNMENTAL BUSINESS -TYPE
ACTIVITIES ACTIVITIES TOTAL
Revenues
Program Revenues
Charges for Services
Operating Grants
and Contributions
Capital Grants
and Contributions
General Revenues
Property Taxes
Other Taxes
Unrestricted
Investment
Earnings
Miscellaneous
Total Revenue
Expenses
General Government
Public Safety
Streets and Parks
Health
Culture and Recreation
Interest and Other Fees
Water and Sewer
EMS
Total Expenses
Increase in Net
Assets before
Transfers
Transfers
Change in Net
Assets
Net Assets - Beginning
NET ASSETS -
ENDING
2007
2006 2007
2006
2007 2006
$ 4,861,842
$ 3,331,585
$ 18,455,816
$ 15,128,476
$ 23,317,658
$ 18,460,061
493,281
1,567,164
-
493,281
1,567,164
5,640,431
5,382,779
2,755,376
3,148,100
8,395,807
8,530,879
7,309,127
5,705,805
-
-
7,309,127
5,705,805
4,942,625
4,325,732
-
-
4,942,625
4,325,732
1,453,645
552,091
976,595
473,205
2,430,240
1,025,296
923,574
112,306
161 ,048
195,409
1,084,622
307,715
25,624,525
20,977,462
22,348,835
18,945,190
47,973,360
39,922,652
6,704,483
3,957,693
-
-
6,704,483
3,957,693
5,920,046
6,403,122
5,920,046
6,403,122
2,702,102
1,240,956
2,702,102
1,240,956
272,730
231,149
272,730
231,149
450,974
396,078
450,974
396,078
1,507,900
823,818
-
-
1,507,900
823,818
-
-
10,594,731
9,821,823
10,594,731
9,821,823
-
-
4,842,028
3,474,249
4,842,028
3,474,249
17,558,235
13,052,816
15,436,759
13,296,072
32,994,994
26,348,888
8,066,290
7,924,646
6,912,076
5,649,118
14,978,366
13,573,764
(1,224,621)
510,098
1,224,621
(510,098)
6,841,669
8,434,744
8,136,697
5,139,020
14,978,366
13,573,764
37,905,210
29,470,466
35,916,676
30,777,656
73,821,885
60,248,122
$ 44,746,879
$ 37,905,210
$ 44,053,373
$ 35,916,676
$ 88,800,252
$ 73,821,886
Table A -2
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12
Below is a graph showing total revenues by source for the City:
Total Revenues- Government -Wide
$24,000.000
$22,000,000
$20,000,000
$18,000,000
$16,000,000
$14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
Charges for Operating Capital Grants Property Taxes Other Taxes Unrestricted Other
Services Grants & & Contributions Investment
Contributions Earnings
■ 2007
■ 2006
Governmental Activities. Governmental activities accounted for 46% of the growth in the net
assets of the City of Schertz. Most of this increase is the result of capital contributions from
developers. For the most part, increases in expenses closely paralleled inflation and growth in the
demand for services.
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
Revenues - Governmental Activities
Charges for Operating Capital Grants Property Taxes Other Taxes Unrestricted Other
Services Grants & & Contributions Investment
Contributions Earnings
■ 2007
■ 2006
13
(This Page Intentionally Left Blank)
14
7,000,000
6,000,000
5,000,000
4,000,000
Expenses - Governmental Activities
3,000,000 -t'
2,000,000
1,000,000
General Public Safety Streets and Parks Health
Government
■ 2007
■ 2006
Business -type activities. Charges for services increased by $3,327,340. This increase was due to
a water rate increase. Capital grants and contributions decreased by $392,724. This decrease was
due to decreased capital contributions from developers.
Revenues - Business -Type Activities
$20,000,000
$18,000,000
$16,000,000
$14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
Charges for Services Capital Grants & Unrestricted Investment Other
Contributions Earnings
■ 20 07
■ 2006
15
Culture and
Interest and Other
Recreation
Fees
■ 2007
■ 2006
Business -type activities. Charges for services increased by $3,327,340. This increase was due to
a water rate increase. Capital grants and contributions decreased by $392,724. This decrease was
due to decreased capital contributions from developers.
Revenues - Business -Type Activities
$20,000,000
$18,000,000
$16,000,000
$14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
Charges for Services Capital Grants & Unrestricted Investment Other
Contributions Earnings
■ 20 07
■ 2006
15
(This Page Intentionally Left Blank)
16
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
Expenses- Business -Type Activities
Water and Sewer EMS
Financial Analysis of the Government's Funds
■ 2007
■ 2006
As noted earlier, the City of Schertz uses fund accounting to ensure and demonstrate compliance
with finance - related legal requirements.
The remainder of this page is left blank intentionally.
17
(This Page Intentionally Left Blank)
In
Governmental funds. The focus of the City's governmental funds is to provide information on
near -term inflows, outflows, and balances of spendable resources. Such information is useful in
assessing the City's financing requirements. In particular, unreserved fund balance may serve as a
useful measure of a government's net resources available for spending at the end of the fiscal year.
As of the end of the current fiscal year, the City's governmental funds reported combined ending
fund balances of $25,762,566. Of this total amount, $10,487,501 constitutes unreserved fund
balance, which is available for spending at the government's discretion. The remainder of fund
balances is reserved or designated to indicate that it is not available for new spending because it
has already been committed to pay debt service, for capital improvement projects, and other
restricted purposes.
The general fund is the chief operating fund of the City of Schertz. At the end of the current fiscal
year, unreserved fund balance of the general fund was $9,210,610, while total fund balance
reached $9,480,416, an increase of $2,045,152 from the prior year. The majority of this increase
was from property tax and City sales tax collections. As a measure of the general fund's liquidity,
it may be useful to compare both unreserved fund balance and total fund balance to total fund
expenditures. Unreserved fund balance represents 66.8% of total general fund expenditures,
including capital, while total fund balance represents 68.7% of that same amount.
The debt service fund has a total fund balance of $461,500, all of which is reserved for the
payment of debt service. The net increase in fund balance during the current year in the debt
service fund was minimal.
The capital projects fund has a total fund balance of $14,543,759, a decrease of $591,055. This
decrease was from the expenditure of funds for various construction projects.
Proprietary funds. The City's proprietary funds provide the same type of information found in the
government -wide financial statements, but in more detail.
Unrestricted net assets of the water and sewer fund at the end of the year amounted to
$21,450,899 and those for the Schertz EMS fund amounted to $1,423,887.
General Fund Budgetary Highlights
Differences between the original budget and the final amended budget and the final budget and
actual expenditures can be briefly summarized as follows:
• The street department's shortfall resulted from the increasing cost of fuel and utility
costs.
• The fire department's shortfall resulted from the increasing cost of fuel, utility costs, and
personnel.
• The shortfall in the legal department resulted from legal work on county election,
advertising and a bond proposition.
• The shortfall in the swimming pool department resulted from the increasing cost of
chemicals and utility costs.
• The shortfall in special events resulted from adding the Dinosaur exhibit, 911 events,
and the 5011 Anniversary events.
During the year, revenues exceeded budgetary estimates and funded the overexpenditures in
various departments.
19
Capital Asset and Debt Administration
Capital assets. The City's investment in capital assets for its governmental and business -type
activities as of September 30, 2007, amounts to $90,550,997 (net of accumulated depreciation).
Major capital asset events during the current fiscal year included the following:
The City has completed construction on the new civic center and athletic fields. Construction on a
new library is underway and a new recreation center is due to start building in July.
Land
Buildings and Improvements
Machinery, Equipment,
and Vehicles
Infrastructure
Construction in Progress
TOTALS
CAPITAL ASSETS
(Net of Depreciation)
GOVERNMENTAL BUSINESS -TYPE
ACTIVITIES ACTIVITIES TOTAL
2007 2006 2007 2006 2007 2006
$ 5,254,030 $ 3,676,634 $ 557,972 $ 520,619 $ 5,812,002 $ 4,197,253
6,744,901 7,001,252 32,825,229 30,701,277 39,570,130 37,702,529
1,763,031 1,585,421 1,247,148 320,710 3,010,179 1,906,131
32,845,594 28,081,830 - 32,845,594 28,081,830
7,567,413 5,886,434 1,732,926 330,799 9,300,339 6,217,233
$ 54.174.969 _$ 46.231.571 $ 36.363.275 $ 31.873.405 _$ 90.538.244 $ 78.104.976
Table A -3
Additional information on the City's capital assets can be found in Note 4 on pages 46 through 47
of this report.
Long -Term debt. At the end of the current fiscal year, the City of Schertz had total bonded debt
outstanding of $52,102,854. Of this amount, $36,066,054 comprises debt backed by the full faith
and credit of the government. The remainder of the City's debt represents bonds secured solely by
specified revenue sources, i.e., revenue bonds.
TOTALS 5 36.066.054 $ 32.519.996 $ 16.036.800 $ 7.083.000 $ 52.102.854 $ 39202.996
Table A -4
The City's total debt increased by 31.2% during the current fiscal year.
The key factor in the increase is the City of Schertz issued general obligation bonds in the amount
of $6,000,000, and 8,615,000 of certificates of obligation for the major capital projects.
FW
GOVERNMENTAL
BUSINESS -TYPE
ACTIVITIES
ACTIVITIES
TOTAL
2007 2006
2007 2006
2007
2006
General Obligation Bonds
$ 21,950,000 $ 18,740,000
$ 2,000,000 $
$ 23,950,000 $
18,740,000
Certificates of Obligation
13,900,200 13,560,000
7,370,800
21,271,000
13,560,000
Revenue Bonds
- -
6,645,000 7,055,000
6,645,000
7,055,000
Other Debt
215,854 319,996
21,000 28,000
236,854
347,996
TOTALS 5 36.066.054 $ 32.519.996 $ 16.036.800 $ 7.083.000 $ 52.102.854 $ 39202.996
Table A -4
The City's total debt increased by 31.2% during the current fiscal year.
The key factor in the increase is the City of Schertz issued general obligation bonds in the amount
of $6,000,000, and 8,615,000 of certificates of obligation for the major capital projects.
FW
The City of Schertz's general fund maintains a "AA -" rating and its water and sewer fund maintains
an "AA -" rating from Standard and Poor's.
Additional information on the City's long -term debt can be found in Note 7 on pages 48 through
50 of this report.
Economic Factors and Next Year's Budgets and Rates
During the current fiscal year, unreserved fund balance in the general fund increased to
$9,210,610. The City of Schertz has not appropriated any of this amount for spending in the 2008
fiscal year budget. It is intended that the available fund balance can be utilized to avoid the need to
raise taxes or charges during the 2008 fiscal year. Water and sewer rates are expected to remain
stable. A portion of the debt service fund balance will be used to offset the debt service ad
valorem rate.
Requests for Information
This financial report is designed to provide a general overview of the City's finances for all those
with an interest in the government's finances. Questions concerning any of the information
provided in this report or requests for additional financial information should be addressed to the
Office of the Finance Director, City of Schertz, 1400 Schertz Parkway, Schertz, Texas 78154.
21
(This Page Intentionally Left Blank)
22
BASIC FINANCIAL STATEMENTS
23
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents
Investments
Receivables
Delinquent Taxes, Net of
Allowance for Uncollectible
Accounts
Accounts and Other
Inventories
Capital Lease Receivable
Deferred Charges
Investments - Restricted
Internal Balances
Total Current Assets
NONCURRENT ASSETS
Capital Lease Receivable
Deferred Charges
Total
Capital Assets:
Land
Buildings and Improvements
Machinery, Equipment, and
Vehicles
Infrastructure
Construction in Progress
Accumulated Depreciation
Total Capital Assets
Total Noncurrent Assets
TOTAL ASSETS
CITY OF SCHERTZ, TEXAS
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2007
PRIMARY GOVERNMENT
GOVERNMENTAL BUSINESS -TYPE
ACTIVITIES ACTIVITIES TOTAL
COMPONENT
UNITS
$ 201,216
$ 384,963
$ 586,179
$ 213,602
38,980,300
3,255,925
42,236,225
4,589,276
181,153
-
181,153
-
1 ,706,1 1 1
2,045,287
3,751,398
1,498,210
67,333
90,326
157,659
-
-
56,742
56,742
-
15,264
11,761
27,025
1,412
-
11,101,337
11,101,337
-
(9,714,438)
9,714,438
-
-
31,436,939
26,660,779
58,097,718
6,302,500
59,305 59,305 -
317,001 229,343 546,344 8,845
317,001 288,648 605,649 8,845
5,254,030 557,972
9,607,405 44,696,685
3,469,121
40,291 ,701
7,567,413
(12,014,701)
54,174,969
54,491,970
$ 85,928,909
3,584,792
1,732,926
(14,209,100)
36,363,275
36,651 ,923
$ 63,312,702
5,812,002
54,304,090
7,053,913
40,291,701
9,300,339
(26,223,801)
90,538,244
91,143,893
$ 149,241,611
8,845
$6,311,345
(The Accompanying Notes are an Integral Part of these Financial Statements) 24
LIABILITIES
CURRENT LIABILITIES PAYABLE FROM
UNRESTRICTED ASSETS
Cash Overdraft
Accounts Payable and Accrued
Liabilites
Compensated Absences
Accrued Interest Payable
Current Portion of Long -Term Debt
Total Current Liabilities Payable
from Unrestricted Assets
CURRENT LIABILITIES PAYABLE
FROM RESTRICTED ASSETS
Current Deposits
Accrued Interest Payable
Current Portion of Long -Term Debt
Total Current Liabilities Payable
from Restricted Assets
Total Current Liabilities
NONCURRENT LIABILITIES
Long -Term Debt
Compensated Absences
Total Noncurrent Liabilities
TOTAL LIABILITIES
NET ASSETS
Invested in Capital Assets, Net
of Related Debt
Restricted for:
Construction
Debt Service
Tree Mitigation
LEOSE
Technology
Court Security
Unrestricted
TOTAL NET ASSETS
CITY OF SCHERTZ, TEXAS
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2007
PRIMARY GOVERNMENT
GOVERNMENTAL BUSINESS -TYPE
ACTIVITIES ACTIVITIES TOTAL
COMPONENT
UNITS
$ 1,245,756 $ - $ 1,245,756 $
3,016,503 2,701,173 5,717,676 120,553
119,921 36,311 156,232 -
270,196 - 270,196 -
1,841,789 - 1,841,789
6,494,165 2.737,484 9.231,649 120.553
-
320,959
320,959
-
-
83,850
83,850
-
-
877,010
877,010
115,000
-
1,281 ,819
1,281,819
115,000
6,494,165
4,019,303
10,513,468
235,553
34,328,104
15,131,092
49,459,196
1,085,000
359.761
108,934
468,695
-
34,687,865
15,240,026
49,927,891
1,085,000
$41,182,030
$19,259,329
$60,441,359
$1,320,553
32,921,277 20,355,173 53,276,450
461,500
144,835
10,810
168,864
22,799
016.794
$ 44, 746, 879
1,995,213
21,702,987
$ 44,053,373
2,456,713
144,835
10,810
168,864
22,799
32.719.781
$ 88,800,252
3,365,847
1,624.945
$ 4,990,792
(The Accompanying Notes are an Integral Part of these Financial Statements) 25
CITY OF SCHERTZ, TEXAS
STATEMENT OF ACTIVITIES
YEAR ENDED SEPTEMBER 30, 2007
rn (The Accompanying Notes are an Integral Part of these Financial Statements)
NET (EXPENSE) REVENUE AND
CHANGES
IN NET ASSETS
PROGRAM REVENUES
PRIMARY GOVERNMENT
CHARGES OPERATING
CAPITAL
BUSINESS -
FOR GRANTS AND
GRANTS AND
GOVERNMENTAL
TYPE
COMPONENT
FUNCTIONS /PROGRAMS
EXPENSES SERVICES CONTRIBUTIONS
CONTRIBUTIONS
ACTIVITIES
ACTIVITIES
TOTAL
UNITS
Primary Government
Governmental Activities
General Government
$ 6,704,483 $ 3,123,184 $ 489,932
$
$ (3,091,367)
$
$ (3,091,367)
Public Safety
5,920,046 1 ,307,295 -
(4,612,751)
(4,612,751)
Streets and Parks
2,702,102 196,436
5,640,431
3,134,765
3,134,765
Health
272,730 33,148 -
-
(239,582)
(239,582)
Culture and Recreation
450,974 201,779 3,349
(245,846)
(245,846)
Interest and Other Fees
1,507,900 -
(1,507,900)
(1,507,900)
Total Governmental Activities
17,558,235 4,861,842 493,281
5,640,431
(6,562,681)
(6,562,681)
Business -Type Activities
Water and Sewer
10,594,731 13,438,473 -
2,755,376
5,599,118
5,599,1 18
EMS
4,842,028 5,017,343
-
175,315
175,315
Total Business -Type Activities
15,436,759 18,455,816 -
2,755,376
5,774,433
5,774,433
Total Primary Government
$ 32,994,994 $23,317,658 $ 493,281
$ 8,395,807
(6,562,681)
5,774,433
(788,248)
Component Units
$ 1,975,789 $ 8,688 $ 3,938
$ 3,365,847
$ 1,402,684
General Revenues
Taxes
Ad Valorem
7,309,127
7,309,127
-
Sales
3,643,101
3,643,101
1,821,140
Utility Franchise
1,004,116
1,004,116
-
Hotel /Motel
259,176
259,176
Bingo
6,781
6,781
Mixed Drink
29,451
29,451
Unrestricted Investment Earnings
1,453,645
976,595
2,430,240
153,331
Sale of Land
664,120
-
664,120
Miscellaneous
259,454
161,048
420,502
-
Transfers between Governmental Activities
and Business -Type Activities
(1,224,621)
1,224,621
-
-
Total General Revenues and Transfers
13,404,350
2,362,264
15,766,614
1,974,471
Change in Net Assets
6,841,669
8,136,697
14,978,366
3,377,155
Net Assets - Beginning
37,905,210
35,916,676
73,821,886
1,613,637
NET ASSETS - ENDING
$ 44,746,879
$44,053,373
$88,800,252
$ 4,990,792
rn (The Accompanying Notes are an Integral Part of these Financial Statements)
CITY OF SCHERTZ. TEXAS
BALANCE SHEET - GOVERNMENTAL FUNDS
SEPTEMBER 30, 2007
MAJOR FUNDS
OTHER TOTAL
DEBT CAPITAL GOVERNMENTAL GOVERNMENTAL
GENERAL SERVICE PROJECTS FUNDS FUNDS
ASSETS
Cash and Cash Equivalents
$ 1,220
$ 26,638
$ - $
173,358 $
201,216
Investments
9,373,847
495,419
28,018,935
1,092,099
38,980,300
Receivables
Taxes, Net
131,142
50,011
-
-
181,153
Accounts and Other
1,686,988
-
-
19,123
1,706,111
Due from Other Funds
1,012,632
34,827
55,124
-
1,102,583
Inventory
67.333
-
-
-
67.333
TOTAL ASSETS
$ 12,273,162
$ 606,895
$ 28,074,059 $
1,284,580 $
42,238,696
LIABILITIES
Cash Overdraft
$ 569,980
$ -
$ 675,776 $
- $
1,245,756
Accounts Payable
630,504
-
2,037,503
7,689
2,675,696
Accrued Salaries and
Benefits
340,807
-
-
-
340,807
Accrued Interest Payable
-
95,384
-
-
95,384
Due to Other Funds
-
-
10,817,021
-
10,817,021
Deferred Revenue
1.251.455
50.011
1.301,466
Total Liabilities
2.792.746
145.395
13.530.300
7.689
16.476.130
FUND BALANCES
Reserved for
Inventory
67,333
-
-
-
67,333
Debt Service
-
461,500
-
-
461,500
LEOSE
10,810
-
-
-
10,810
Technology
168,864
-
-
-
168,864
Court Security
22,799
-
-
-
22,799
Unreserved
Designated for
Capital Improvement
-
-
14,543,759
-
14,543,759
Unreserved, Reported in
General Fund
9,210,610
-
-
-
9,210,610
Special Revenue Funds
-
-
-
1,276.891
1.276.891
Total Fund Balances
9,480,416
461.500
14.543.759
1.276.891
25.762.566
TOTAL LIABILITIES AND
FUND BALANCES $ 12,273,162 $ 606,895 $ 28,074,059 $ 1,284,580 $ 42,238,696
(The Accompanying Notes are an Integral Part of these Financial Statements) 27
CITY OF SCHERTZ, TEXAS
RECONCILIATION OF BALANCE SHEET
GOVERNMENTAL FUNDS TO STATEMENT OF NET ASSETS
SEPTEMBER 30, 2007
TOTAL FUND BALANCES - GOVERNMENTAL FUNDS $ 25,762,566
Amounts reported for governmental activities in the statement of
net assets are different because:
Capital assets used in governmental activities are not financial
resources and therefore are not reported as assets in
governmental funds. 54,174,969
Certain receivables are not available, and therefore, are deferred
in governmental funds. 1,120,313
Certain receivables will be collected this year, but are not available
soon enough to pay for the current period's expenditures, and
therefore are deferred in the funds. 181,153
Long -term liabilities, including bonds payable and capital leases, are
not due and payable in the current period and therefore are not
reported as liabilities in the funds:
Bonds Payable
(35,850,200)
Capital Leases
(215,854)
Issuance Premium (to be Amortized as Interest Expense)
(1 18,1 35)
Issuance Discount (to be Amortized as Interest Expense)
14,296
Deferred Charge for Issuance Cost (to be Amortized as
Interest Expense)
332,265
Accrued Interest Payable
(174,812)
Compensated Absences
(479.682)
TOTAL NET ASSETS - GOVERNMENTAL ACTIVITIES $ 44,746,879
(The Accompanying Notes are an Integral Part of these Financial Statements) 28
CITY OF SCHERTZ, TEXAS
STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES -
GOVERNMENTAL FUNDS
YEAR ENDED SEPTEMBER 30, 2007
REVENUES
Taxes
Licenses and Permits
Charges for Services
Fines and Forfeitures
Grants
Other Revenue
Total Revenues
EXPENDITURES
Current
General Government
Public Safety
Streets and Parks
Health
Culture and Recreation
Capital Outlay
Debt Service
Principal
Interest and Fiscal Charges
Bond Issue Costs
Total Expenditures
Excess (Deficiency) of
Revenues Over (Under)
Expenditures
OTHER FINANCING SOURCES (USES)
Issuance of Bonds
Premium on Bond Issue
Transfers In
Transfers Out
Total Other Financing
Sources (Uses)
Net Change in
Fund Balances
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
GENERAL
MAJOR FUNDS
DEBT
SERVICE
OTHER TOTAL
CAPITAL GOVERNMENTAL GOVERNMENTAL
PROJECTS FUNDS FUNDS
$ 9,466,502
$ 2,984,547
$
$ 259,176
$ 12,710,225
937,581
-
124,473
1,062,054
1,784,277
22,821
1,807,098
1,208,038
189,063
1,397,101
-
-
150,000
3,349
153,349
1,498,080
92,701
786,241
83,810
2,460,832
14,894,478
3,077,248
936,241
682,692
19,590,659
5,066,980
-
55,785
266,575
5,389,340
5,665,671
-
-
5,665,671
1,392,923
1,392,923
263,918
263,918
439,767
-
-
439,767
955,350
-
4,394,207
155,122
5,504,679
-
1,562,342
-
-
1,562,342
-
1,473,145
-
1,473,145
8,967
-
43,333
-
52,300
13,793,576
3,035,487
4,493,325
421,697
21,744,085
1,100,902
41,761
(3,557,084)
260,995
(2,153,426)
1,008,400
-
4,000,000
-
5,008,400
19,500
72,000
262,650
354,150
(83,650)
-
(1,296,621)
(198,500)
(1,578,771)
944,250
72,000
2,966,029
(198,500)
3,783,779
2,045,152
113,761
(591,055)
62,495
1,630,353
7,435,264
347,739
15,134,814
1,214,396
24,132,213
$ 9,480,416
$ 461,500
$ 14,543,759
$ 1,276,891
$ 25,762,566
(The Accompanying Notes are an Integral Part of these Financial Statements) 29
CITY OF SCHERTZ, TEXAS
RECONCILIATION OF CHANGE IN FUND BALANCES - GOVERNMENTAL FUNDS TO
CHANGE IN NET ASSETS - GOVERNMENTAL ACTIVITIES
SEPTEMBER 30, 2007
NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $1,630,353
Amounts reported for governmental activities in the statement of
activities are different because:
Governmental funds report capital outlays as expenditures.
However, in the statement of activities the cost of those
assets is allocated over their estimated useful lives and
reported as depreciation expense.
Capital Outlay 5,504,679
Depreciation Expense (1,845,441)
Revenues and contributed assets in the statement of
activities that do not provide current financial resources
are not reported as revenues in the funds. 4,900,532
Certain long -term liabilities (compensated absences)
are accrued at the government -wide level but not at the
fund level. This is the current year change in those
liabilities, reported as expense in the statement of activities. 80,059
Bonds and capital leases provide current financial resources to
governmental funds, but issuing debt increases long -term liabilities
in the statement of net assets. Repayment of bond principal is an
expenditure in the governmental funds, but reduces long -term
liabilities in the statement of net assets. Also, governmental
funds report the effect of issuance costs, premiums and discounts
when the debt is first issued, whereas this amount is deferred
and amortized in the statement of activities.
Issuance of General Obligation Bonds
(5,008,400)
Capital Lease
104,142
General Obligation Bond Payments
790,000
Certificates of Obligation Payments
668,200
Bond Issue Costs
52,300
Interest Expense
(34.755)
CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES $6,841,669
(The Accompanying Notes are an Integral Part of these Financial Statements) 30
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
Due from Other Funds
Inventory
Investments - Restricted Assets
Capital Lease Receivable
Deferred Charges
Total Current Assets
NONCURRENT ASSETS
Capital Lease Receivable
Deferred Charges
Totals
Capital Assets
Land
Buildings and Improvements
Machinery, Equipment,
and Vehicles
Construction in Progress
Totals
Accumulated Depreciation
Total Capital Assets
Total Noncurrent Assets
TOTAL ASSETS
CITY OF SCHERTZ, TEXAS
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
SEPTEMBER 30, 2007
BUSINESS -TYPE ACTIVITIES - ENTERPRISE FUNDS
WATER AND
-
59,305
SEWER
SCHERTZ
229,343
SYSTEM
EMS
TOTAL
$ 238,399
$ 146,564 $
384,963
3,255,925
-
3,255,925
1,414,373
630,914
2,045,287
8,987,560
800,778
9,788,338
41,711
48,615
90,326
11,101,337
-
11,101,337
56,742
-
56,742
11,409
352
1 1 ,761
25,107,456
1,627,223
26,734,679
59,305
-
59,305
223,015
6,328
229,343
282,320
6,328
288,648
557,972
-
557,972
44,696,685
-
44,696,685
1,610,981
1,973,811
3,584,792
1,732,926
-
1,732,926
48,598,564
1,973,811
50,572,375
_(13,274,094)
(935,006)
(14,209,100)
35,324,470
1,038,805
36,363,275
35,606,790
1,045,133
36,651 ,923
$ 60,714,246 $ 2,672,356 $ 63,386,602
(continued)
(The Accompanying Notes are an Integral Part of these Financial Statements) 31
CITY OF SCHERTZ, TEXAS
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
SEPTEMBER 30, 2007
LIABILITIES
CURRENT LIABILITIES PAYABLE FROM
UNRESTRICTED ASSETS
Accounts Payable and Accrued Liabilities
Accrued Salaries and Benefits
Due to Other Funds
Compensated Absences
Total Current Liabilities Payable from
Unrestricted Assets
CURRENT LIABILITIES PAYABLE
FROM RESTRICTED ASSETS
Customer Deposits
Revenue Bonds
General Obligation Bonds
Certificate of Obligation Payable
Public Facility Loan
Accrued Interest
Total Current Liabilities Payable
from Restricted Assets
Total Current Liabilities
NONCURRENT LIABILITIES
Revenue Bonds Payable
General Obligation Bonds
Certificate of Obligation Payable
Public Facility Loan
Compensated Absences
Total Noncurrent Liabilities
TOTAL LIABILITIES
NET ASSETS
Invested in Capital Assets, Net of
Related Debt
Restricted for Debt Service
Unrestricted
TOTAL NET ASSETS
BUSINESS -TYPE ACTIVITIES - ENTERPRISE FUNDS
WATER AND
SEWER SCHERTZ
SYSTEM EMS
$ 2,563,593 $ 24,502
51,031 62,047
191,244 23,601
22,887 13,424
TOTAL
$ 2,588,095
113,078
214,845
36,311
2,828,755 123,574 2.952.329
320,959
-
320,959
413,177
-
413,177
63,333
-
63,333
250,400
143,100
393,500
7,000
-
7,000
78,766
5,084
83,850
1 ,l 33,635
148,184
1,281,819
3,821,445
271,758
4,093,203
6,203,125
-
6,203,125
1,936,667
-
1,936,667
6,358,700
618,600
6,977,300
14,000
-
14,000
68,661
40,273
108,934
14,581,153
658,873
15,240,026
$ 18,402,598
$ 930,631
$ 19.33 3,229
20,078,068 277,105 20,355,173
1,995,213 - 1,995,213
20,238,367 1,464,620 21 ,702,987
$ 42,31 1,648 $1,741,725 $ 44,053,373
(The Accompanying Notes are an Integral Part of these Financial Statements) 32
CITY OF SCHERTZ, TEXAS
STATEMENT OF REVENUES EXPENSES, AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
YEAR ENDED SEPTEMBER 30, 2007
OPERATING REVENUES
Fees Charged to Users
Reimbursements
Other
Total Operating Revenues
OPERATING EXPENSES
Personnel Services
Sewage Treatment
General and Administrative
Contractual Services
Supplies /Maintenance
Bad Debts
Depreciation
Total Operating Expenses
Operating Income
NONOPERATING REVENUES (EXPENSES)
Investment Income
Interest Expense
Contributions to Joint Venture
Amortization of Bond Costs
Total Non - Operating Revenues (Expenses)
Income before Transfers and
Capital Contributions
OTHER FINANCING SOURCES (USES)
Transfers In
Transfers Out
Total Other Financing (Uses)
CAPITAL CONTRIBUTIONS
Change in Net Assets
NET ASSETS - BEGINNING
TOTAL NET ASSETS - ENDING
BUSINESS -TYPE ACTIVITIES - ENTERPRISE FUNDS
WATER AND
SEWER SCHERTZ
SYSTEM EMS TOTAL
$ 13,438,473
4,060
33,755
13,476,288
1,431,235
4,243,101
1,397,247
558,337
266,399
973,293
8,869,612
4.606,676
$ 5,017,343
123,234
5.140.577
1,669,352
133,569
118,513
302,648
2,507,127
87.257
4,818,466
322,1 1 1
$ 18,455,816
4,060
156,989
18,616,865
3,100,587
4,243,101
1,530,816
676,850
569,048
2,507,127
1.060,550
13,688,078
4.928,787
942,678
33,917
976,595
(499,456)
(23,211)
(522,667)
(1,213,408)
-
(1,213,408)
(12,255)
(352)
(12,607)
(782,441)
10,354
(772,087)
3.824,235
332,465
4,156,699
513,359
513,359
2.75 5.376
7,092,970
783,262
(72,000)
711,262
1,043,727
1,296,621
(72,000
1,224,621
2.755,376
8,136,696
35,218,678 697,998 35,916,676
$ 42,31 1,648 $ 1,741,725 $ 44,053,372
(The Accompanying Notes are an Integral Part of these Financial Statements) 33
CITY OF SCHERTZ, TEXAS
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS
YEAR ENDED SEPTEMBER 30, 2007
CASH FLOWS FROM OPERATING ACTIVITIES
Cash Received from Customers
Cash Payments to Suppliers for Goods and Services
Cash Payments to Employees for Services
Cash Payments to Other Funds
Cash Received for Reimbursements and Other
Net Cash Provided by (Used in) Operating Activities
CASH FLOWS FROM NON - CAPITAL FINANCING
ACTIVITIES
Transfers In
Transfers Out
Capital Contributed to Joint Venture
Net Cash Provided by (Used in) Non - Capital
Financing Activities
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition and Construction of Capital Assets
Proceeds from Bond Issued
Principal Payments on Long -Term Debt
Interest Paid on Long -Term Debt
Net Cash Provided by (Used in) Capital and
Related Financing Activities
CASH FLOWS FROM INVESTING ACTIVITIES
BUSINESS -TYPE ACTIVITIES - ENTERPRISE FUNDS
WATER AND
SEWER SCHERTZ
SYSTEM EMS TOTAL
$ 13,713,850
(5,496,500)
(1,391,821)
(8,826,094)
37.815
(1.962.750)
$ 4,905,462
(3,126,364)
(1,604,821)
(688,065)
123.233
(390.555)
$ 18,619,312
(8,622,864)
(2,996,642)
(9,514,159)
161.048
(2.353,305)
513,359 783,262 1,296,621
- (72,000) (72,000)
(1,213,408) - (1,213.408)
(700.049) 711.262 11.213
(1,837,974)
(954,1 1 1)
(2,792,085)
8,799,389
772,269
9,571,658
(627,000)
(18,800)
(645,800)
(470,032)
(16.927)
(486.959)
5.864,383
(217,569)
5.646.814
Interest on Investments
942,678
33,917
976,595
Sale of Investments
2,699,127
-
2,699,127
Purchase of Investments
(6.727,675)
-
(6, 27,675)
Net Cash Provided by (Used in) Investing Activities
(3,085.870)
33,917
(3,051.953)
Net Increase in Cash
115,714
137,055
252,769
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR
122.685
9,509
132,194
CASH AND CASH EQUIVALENTS - END OF YEAR $
238,399
$ 146,564 $
384,963
(Continued)
(The Accompanying Notes are an Integral Part of these Financial Statements) 34
CITY OF SCHERTZ, TEXAS
STATEMENT OF CASH FLOWS- PROPRIETARY FUNDS
YEAR ENDED SEPTEMBER 30, 2007
BUSINESS -TYPE ACTIVITIES - ENTERPRISE FUNDS
WATER AND
SEWER SCHERTZ
SYSTEM EMS TOTAL
RECONCILIATION OF OPERATING INCOME TO
NET CASH PROVIDED BY OPERATING ACTIVITIES
Operating Income
$ 4,606,676
$ 322,111
$ 4,928,787
Adjustments to Reconcile Operating
Income to Net Cash Provided by
Operating Activities
Depreciation
973,293
87,257
1,060,550
(Increase) Decrease in the Following Assets
Accounts Receivable
244,175
(1 1 1,881)
132,294
Inventory
(5,590)
(10,297)
(15,887)
Due from Other Funds
(8,833,011)
(692,796)
(9,525,807)
Increase (Decrease) in the Following
Liabilities
Accounts Payable and Accrued Liabilities
1,025,205
27,466
1,052,671
Due to Other Funds
6,917
(14,899)
(7,982)
Compensated Absences
(11,617)
2,484
(9,133)
Customer Deposits
31,202
-
31,202
NET CASH USED IN OPERATING ACTIVITIES
$ (1,962,750)
$ (390,555)
$ (2,353,305)
NONCASH OPERATING, CAPITAL AND RELATED
FINANCING ACTIVITIES
Contributions of Capital Assets from Developers
$ 2,755,376
$ -
$ 2,755,376
Amortization of Bond Issuance Costs
10,366
-
10,366
Amortization of Bond Discount
1,823
-
1,823
(The Accompanying Notes are an Integral Part of these Financial Statements) 35
NOTES TO BASIC FINANCIAL STATEMENTS
36
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2007
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The City of Schertz is a municipal corporation governed by an elected mayor and five -
member council. The accompanying financial statements present the City and its
discretely presented component units, entities for which the City is considered to be
financially accountable. The discretely presented component units are reported in a
separate column in the government -wide financial statements to emphasize that they are
legally separate from the City.
Discretely presented component units - The component units' column in the
government -wide financial statements includes the financial data of the component units
of the City of Schertz, Texas. The component units are presented as governmental fund
types. Following is a summary of the component units:
1. Schertz Economic Development Corporation - The corporation was organized for the
purpose of promoting economic development in order to eliminate unemployment
and underemployment and to promote and encourage employment and public
welfare of, for, and on behalf of the City. The board of directors consists of seven (7)
members appointed by the city council. The City is financially accountable for the
corporation because the city council approves the corporation's budget.
2. Libra - The library provides services to the citizens of the City of Schertz as well as
surrounding communities. The function of the library board is to work cooperatively
with City management to provide funding and oversight for special projects of the
library. All projects must be approved by the city council. The library's governing
board is appointed by the city council.
Schertz Development Foundation - The foundation was organized to assist the City in
developing and implementing plans for economic viability for the City. The board of
directors is appointed by the city council and the executive director is employed by
the City. The City is financially accountable for the foundation because the city
council approves the foundation's budget. The Development foundation was
dissolved in the fiscal year ended September 30, 2007.
Complete financial statements for each of the individual component units may be
obtained at City Hall located at 1400 Schertz Parkway, Schertz, Texas 78154.
B. Government -Wide and Fund Financial Statements
The government -wide financial statements (i.e., the statement of net assets and the
statement of activities) report information on all of the activities of the primary
government and its component units. For the most part, the effect of interfund activity
has been removed from these statements. Governmental activities, which normally are
supported by taxes and intergovernmental revenues, are reported separately from
business -type activities, which rely to a significant extent on fees and charges for support.
Likewise, the primary government is reported separately from legally separate component
units for which the primary government is financially accountable.
37
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2007
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
B. Government -Wide and Fund Financial Statements (Continued)
The statement of activities demonstrates the degree to which the direct expenses of a
given function or segment are offset by program revenues. Direct expenses are those
that are clearly identifiable with a specific function or segment. Program revenues include
1) charges of customers or applicants who purchase, use, or directly benefit from goods,
services, or privileges provided by a given function or segment and 2) grants and
contributions that are restricted to meeting the operational or capital requirements of a
particular function or segment. Taxes and other items not properly included among
program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds and proprietary funds.
Major individual governmental funds and major individual enterprise funds are reported
as separate columns in the fund financial statements.
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government -wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund
financial statements. Revenues are recorded when earned and expenses are recorded
when a liability is incurred, regardless of the timing of related cash flows. Property taxes
are recognized as revenues in the year for which they are levied. Grants and similar items
are recognized as revenue as soon as all eligibility requirements imposed by the provider
have been met.
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are
recognized as soon as they are both measurable and available. Revenues are considered
to be available when they are collectible within the current period or soon thereafter to
pay liabilities of the current period. For this purpose, the City considers revenues to be
available if they are collected within 60 days of the end of the current fiscal period.
Expenditures generally are recorded when a liability is incurred, as under accrual
accounting. However, debt service expenditures, as well as expenditures related to
compensated absences and claims and judgments, are recorded only when payment is
due.
Property and sales taxes, utility franchises, and interest associated with the current fiscal
period are all considered to be susceptible to accrual and so have been recognized as
revenues of the current fiscal period. All other revenue items are considered to be
measurable and available only when cash is received by the City.
The City reports the following major governmental funds:
The general fund is the City's primary operating fund. It accounts for all financial
resources of the general government, except those required to be accounted for
in another fund.
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2007
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
(Continued)
The debt service fund accounts for the resources accumulated and payments
made for principal and interest on long -term general obligation debt of
governmental funds.
The capital projects fund accounts for financial resources to be used for the
acquisition and construction of major capital facilities and is principally financed
by the sale of bonds or certificates of obligation and grants.
The government reports the following major proprietary funds:
The water and sewer fund accounts for the water and sewer services provided to
the citizens through user charges.
The EMS fund accounts for the ambulance services provided to the citizens of the
City and other participating governments through user charges.
Private - sector standards of accounting and financial reporting issued prior to December 1,
1989, generally are followed in both the government -wide and proprietary fund financial
statements to the extent that those standards do not conflict with or contradict guidance
of the Governmental Accounting Standards Board (GASB). Governments also have the
option of following subsequent private- sector for their business -type activities and
enterprise funds, subject to this same limitation. The City has elected not to follow
subsequent private- sector guidance.
As a general rule the effect of interfund activity has been eliminated from the
government -wide financial statements. Exceptions to this are charges between the City's
general government function and various other functions of the City. Eliminations of
these charges would distort the direct costs and program revenues reported for the
various functions concerned.
Amounts reported as program revenues include 1) charges to customers or applications
for goods, services, or privileges provided, 2) operating grants and contributions, and 3)
capital grants and contributions. General revenues include all taxes and investment
earnings.
Proprietary funds distinguish operating revenues and expenses from nonoperating items.
Operating revenues and expenses generally result from providing services and producing
and delivering goods in connection with a proprietary fund's principal ongoing
operations. The principal operating revenues of the water and sewer enterprise fund and
the EMS enterprise fund are charges to customers for sales and services. Operating
expenses for enterprise funds include the cost of sales and services, administrative
expenses, and depreciation on capital assets. All revenues and expenses not meeting
this definition are reported as nonoperating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the City's
policy to use restricted resources first, then unrestricted resources as they are needed.
39
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30. 2007
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. Cash and Cash Equivalents
The City's cash and cash equivalents are considered to be cash on hand and demand
deposits.
E. Investments
The City is authorized to invest in (1) obligations of the United States or its agencies and
instrumentalities; (2) direct obligations of the State of Texas or its agencies; (3) other
obligations, the principal of and interest on which are unconditionally guaranteed or
insured by the State of Texas of the United States; (4) obligations of states, agencies,
counties, cities, and other political subdivisions of any state having been rated of not less
than "AA" or its equivalent; (5) certificates of deposit issued by state and national banks
domiciled in Texas that are guaranteed or insured by the Federal Deposit Insurance
Corporation (FDIC) or its successor, or secured by obligations mentioned above; and (6)
fully collateralized direct repurchase agreements having a defined termination date. In
addition, the City is authorized to invest in local government investment pools. The
investment pools operate in accordance with appropriate state laws and regulations and
have regulatory oversight from the Texas Public Funds Investment Act Sec. 2256.0016.
The fair value of the City's position in each pool is the same as the fair value of the pool
shares.
F. Receivables and Payables
Activity between the funds that are representative of interfund loans outstanding at the
end of the fiscal year are referred to as due to /from other funds. Any residual balances
outstanding between the governmental activities and business -type activities are reported
in the government -wide financial statements as "internal balances."
Accounts receivable are reported net of allowances for uncollectible accounts. The
allowance account represents management's estimate of uncollectible accounts based
upon experience and historical trends.
Property taxes for the City are levied each October 1 on the taxable value as of the
preceding ,January 1, the date a lien attaches, for all taxable real and personal property
located in the City. Taxes are due by January 31 following the October 1 assessment date
and become delinquent on February 1, at which time they begin accruing penalty and
interest. The enforceable legal claim date for property taxes is the assessment date,
therefore, the City did not record a receivable for accrual of future taxes at year end.
Accordingly, no current taxes receivable are reported. Delinquent taxes have been
reported in the financial statements net of the allowance for uncollectible taxes. Tax
revenues are recognized as they become available. Accordingly, an amount equal to
taxes not yet available has been reported as deferred revenue at the government fund
level.
.H
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2007
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
G. Inventories
All inventories are valued at cost using the first -in /first -out (FIFO) method. Inventories of
governmental funds are recorded as expenditures when consumed rather than when
purchased.
H. Restricted Assets
Certain proceeds of the City's enterprise fund revenue bonds, as well as certain resources
set aside for their repayment, are classified as restricted assets on the balance sheet
because they are maintained in separate bank accounts and their use is limited by
applicable bond covenants.
I. Capital Assets
Capital assets, which include land, buildings and improvements, machinery, equipment,
vehicles, and infrastructure assets (i.e., roads, bridges, sidewalks, and similar items), are
reported in the applicable governmental or business -type activities columns in the
government -wide financial statements. Capital assets are defined by the City as assets
with an initial; individual cost of more than $5,000 and an estimated useful life in excess
of one year. When capital assets are purchased, they are capitalized and depreciated in
the government -wide financial statements and the proprietary fund statements. Capital
assets are recorded as expenditures of the current period in the governmental fund
financial statements.
Capital assets are valued at cost where historical records are available and at an estimated
cost where no records exist. Donated capital assets are valued at their estimated fair
market value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or
materially extend assets lives are not capitalized.
Improvements to capital assets that materially extend the life of the asset or add to the
value are capitalized. Major outlays for capital assets and improvements are capitalized
as projects are constructed. Interest incurred during construction will not be capitalized
in the governmental activities on the government -wide financial statements; however
capitalization of interest is required for business -type activities. There was no capitalized
interest during the current fiscal year.
Capital assets are depreciated over their useful lives on a straight -line basis as follows:
ASSETS YEARS
Buildings and Improvements 10-50
Machinery, Equipment, and Vehicles 2 -20
Infrastructure 15 - 30
41
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2007
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
J. Compensated Absences
It is the City's policy to permit employees to accumulate earned but unused vacation and
compensatory time benefits. There is no liability for unpaid accumulated sick leave since
the City does not have a policy to pay any amounts when employees separate from
service with the City. All vacation and compensatory time pay is accrued when incurred
in the government -wide and proprietary fund financial statements. A liability for these
amounts is reported in governmental funds only if they have matured, for example, as a
result of employee resignations and retirements.
K. Long -Term Obligations
In the government -wide financial statements, and proprietary fund types in the fund
financial statements, long -term debt and other long -term obligations are reported as
liabilities in the applicable governmental activities, business -type activities, or proprietary
fund type statement of net assets. Bond premiums and discounts, losses on defeasance,
as well as issuance costs, are deferred and amortized over the life of the bonds using the
effective interest method. Bonds payable are reported net of the applicable bond
premium or discount and losses on defeasance. Bond issuance costs are reported as
deferred charges and amortized over the term of the related debt.
In the fund financial statements, governmental fund types recognize bond premiums and
discounts, as well as bond issuance costs, during the current period. The face amount of
debt issued is reported as other financing sources. Premiums received on debt issuances
are reported as other financing sources while discounts on debt issuances are reported
as other financing uses. Issuance costs, whether or not withheld from the actual debt
proceeds received, are reported as debt service expenditures.
L. Fund Equity
In the fund financial statements, governmental funds report reservations of fund balance
for amounts that are not available for appropriation or are legally restricted by outside
parties for use for a specific purpose. Designations of fund balance represent tentative
management plans that are subject to change.
M. Budgetary Information
Annual budgets are adopted on a basis consistent with generally accepted accounting
principles for all governmental funds except the library grant special revenue fund, police
department forfeiture special revenue fund and the capital projects fund, which adopts
project - length budgets.
NOTE 2: CASH, CASH EQUIVALENTS, AND INVESTMENTS
Custodial Credit Risk - Cash and Cash Equivalents - Custodial credit risk is the risk that in the
event of a bank failure, the City's deposits may not be returned to it. As of September 30,
2007, $456,824 of the City's bank balance of $556,824 was not covered by depository
42
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2007
NOTE 2: CASH, CASH EQUIVALENTS, AND INVESTMENTS (CONTINUED)
insurance (FDIC). Per the City's policy, these deposits were collateralized by securities held by
the pledging financial institution with a market value of $5,075,347 at September 30, 2007.
As of September 30, 2007, the City had the following pooled investment funds:
WEIGHTED AVERAGE
INVESTMENT TYPE FAIR VALUE MATURITY (YEARS)
Lone Star Investment Pool
LOGIC
MBIA Municipal Investors
Schertz Bank & Trust
Chase
TOTAL
Portfolio Weighted Average Maturity
$14,357,262 $ -
21 ,004,625 -
17,352,870 -
520,084
102,720
$53.337,561
LZI
Credit Risk: State law limits investments in certificates of deposit to guaranteed or insured
by the Federal Deposit Insurance Corporation, or its successor or the National Credit Union
Share Insurance Fund, or its successor and investment pools continuously rated no lower than
AAA or an equivalent rating by at least one nationally recognized rating service. The City's
investment policy does not further limit its investment choices. As of September 30, 2007,
the City's investments in the pooled investment funds were rated AAA by Standard & Poor's.
Interest Rate Risk: As a means of limiting its exposure to fair value losses arising from rising
interest rates, the City's investment policy limits the City's investment portfolio to highly
liquid investments to meet unanticipated cash requirements, and /or to redeploy cash into
other investments expected to outperform current holdings.
NOTE 3: RECEIVABLES
The following is a summary of the gross delinquent taxes receivable and the allowances for
uncollectible taxes:
ALLOWANCE FOR
UNCOLLECTIBLE NET
TAXES TAXES TAXES
Delinquent Taxes
General Fund $139,512 $ 8,370 $131,142
Debt Service Fund 53,203 3,192 50,011
$192,715 $11,562 181 1 53
43
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2007
NOTE 3: RECEIVABLES (CONTINUED)
Other receivables as of year end for the City's individual major funds and other governmental
funds, including the applicable allowances for uncollectible accounts are as follows:
Fines and Forfeitures
Sales Tax
Utility Franchise
Hotel Occupancy Tax
Accounts - Customers
Schertz- Seguine Local
Government Corporation
Other
Gross Receivables
Less: Allowance
OTHER
GOVERNMENTAL WATER AND
GENERAL FUNDS SEWER EMS TOTAL
$ 2,240,376 $ - $ - $ - $ 2,240,376
335,467 - - - 335,467
226,766 - - - 226,766
- 19,123 - - 19,123
- 973,289 1,479,687 2,452,976
4,693
2,807,302
(1,120,314)
430,856 - 430,856
- 33,051 2,811 40,555
1 9,123 1,437,196 1,482,498 5,746,119
- (22,823) (851,584) (1,994,721)
NET TOTAL RECEIVABLES $ 1,686,988 $ 19,123 $1,414,373 $ 630,914 $ 3,751,398
NOTE 4: CAPITAL ASSETS
Capital asset activity for the year ended September 30, 2007 was as follows:
Primary Government
Governmental Activities
Capital Assets, not being Depreciated
Land
Construction in Progress
Total Capital Assets, not
being Depreciated
Capital Assets, being Depreciated
Buildings and Improvements
Machinery, Equipment, and Vehicles
Infrastructure
Total Capital Assets being
Depreciated
BEGINNING
ENDING
BALANCE
INCREASE
DECREASE BALANCE
$ 3,676,634
$1,663,086
$ (72,937) $ 5,266,783
5,886,435
1,680,978
- 7,567,413
9,563,069
3,344,064
(72,937) 12,834,196
9,601 ,261
6,144
- 9,607,405
2,950,858
518,263
- 3,469,121
34,285,644
6,006,057
- 40,291,701
46,837,763
6,530,464
- 53,368,227
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2007
NOTE 4: CAPITAL ASSETS (CONTINUED)
Primary Government (Continued)
Governmental Activities (Continued)
Less Accumulated Depreciation for
Buildings and Improvements
Machinery, Equipment, and Vehicles
Infrastructure
Total Accumulated Depreciation
Total Capital Assets, being
Depreciated - Net
GOVERNMENTAL ACTIVITIES
CAPITAL ASSETS - NET
Business -Type Activities
Capital Assets, not being Depreciated
Land
Construction in Progress
Total Capital Assets, not
being Depreciated
Capital Assets, being Depreciated
Buildings and Improvements
Machinery, Equipment, and Vehicles
Total Capital Assets, being
Depreciated
Accumulated Depreciation for
Buildings and Improvements
Machinery, Equipment, and Vehicles
Total Accumulated Depreciation
Total Capital Assets, being
Depreciated - Net
BUSINESS -TYPE ACTIVITIES
CAPITAL ASSETS - NET
BEGINNING
ENDING
BALANCE
INCREASE
DECREASE
BALANCE
(2,600,009)
(262,495)
-
(2,862,504)
(1,365,437)
(340,653)
-
(1,706,090)
(6,203,814)
(1,242,293)
-
(7,446,107)
(10,169,260)
_(1,845,441)
-
(12,014,701)
36,668,503
4,685,023
-
41,353,526
$46,231,572
$8,029,087
$ (72,937)
$54,187,722
$ 520,619
$ 37,353
$ -
$ 557,972
330,799
1,402,1 27
-
1,732,926
851,418
1,439,480
2,290,898
41,671,941
3,024,744
44,696,685
2,501 ,556
1,083,236
-
3,584,792
44,173,497
4,107,980
-
48,281,477
(10,970,664)
(900,792)
-
(11,871,456)
(2,180,846)
(156,798)
-
(2,337,644)
(13,1 51 ,510)
(1,057,590)
(14,209,100)
31,021,987
3,050,390
34,072,377
$31,873,405
$4,489,870
$
$36,363,275
45
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2007
NOTE 4: CAPITAL ASSETS (CONTINUED)
Depreciation expense was charged to functions /programs of the primary government as
follows:
Governmental Activities
General Government $ 202,346
Public Safety 302,914
Streets and Parks 1,316,724
Culture and Recreation 13,445
Health 10,012
TOTAL DEPRECIATION EXPENSE - GOVERNMENTAL ACTIVITIES $1,845,441
Business -Type Activities
Water and Sewer $ 973,293
EMS 87.257
TOTAL DEPRECIATION EXPENSE - BUSINESS -TYPE ACTIVITIES $1,060,550
NOTE 5: INTERFUND BALANCES AND TRANSFERS
In the fund financial statements, interfund receivables and payables consist primarily of items
related to eliminating deficit cash balances in the funds pooled cash account.
The composition of interfund balances as of September 30, 2007, is as follows:
INTERFUND BALANCES
RECEIVABLE FUND
PAYABLE FUND
AMOUNT
General Fund
Water and Sewer
$ 6,917
General Fund
Capital Projects
1,000,106
General Fund
EMS
5,609
Capital Projects
Water and Sewer
43,382
Capital Projects
EMS
11,742
Debt Service
EMS
34,827
Water and Sewer
Capital Projects
8,981,310
Water and Sewer
Capital Projects
6,250
EMS
Capital Projects
800,778
Balances between governmental funds and enterprise funds are eliminated in the
government -wide financial statements.
W.
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2007
NOTE 5: INTERFUND BALANCES AND TRANSFERS (CONTINUED)
INTERFUND TRANSFERS
TRANSFER IN
GENERAL DEBT CAPITAL WATER
FUND SERVICE PROJECTS & SEWER EMS TOTAL
TRANSFER OUT
General Fund $ $ $ 83,650 $ - $ - $ 83,650
Capital Projects. Fund - 513,359 783,262 1,296,621
Other Governmental Funds 19,500 179,000 - - 198,500
EMS - 72,000 - 72.000
TOTALS $ 19,500 $ 72,000 $ 262,650 $ 513,359 $ 783,262 $1,650,771
The capital project fund transferred $513,359 to the water and sewer fund and $783,262 to
the EMS fund for the construction of capital improvements and for the purchase of vehicles
and equipment. The remaining transfers are the result of normal transactions between
funds.
NOTE 6: CAPITAL LEASE RECEIVABLE
During 2004 the City entered into a capital lease /purchase agreement for the sale of various
water wells, water well motors and pumps, water storage tanks and all connecting lines,
valves and pipes, to another local government entity. This lease was classified as direct
financing lease.
The following lists the components of the net investment in the lease as of September 30,
2007:
Total Minimum Lease Payments to be Received $ 123,928
Less: Amounts Representing Executory and -
Net Minimum Lease Payments Receivable 123,928
Less: Unearned Income (7,881)
NET INVESTMENT IN DIRECT FINANCING LEASES $ 116,047
At September 30, 2007, minimum lease payments for each of the two (2) succeeding fiscal
years are as follows:
FISCAL YEAR
2008 $ 56,742
2009 59,305
$ 116,047
There are no estimated residual values or contingent rentals related to the leased property.
CS
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2007
NOTE 7: LONG -TERM DEBT
The City had the following changes in long -term debt outstanding for the year ended
September 30, 2007:
ORIGINAL INTEREST
AMOUNT RATES
Governmental Activities
$ 5,550,000 3.4 -5.2%
$ 3,955,000
General Obligation Bonds
AMOUNTS
OUTSTANDING
1992 Series
$ 620,000
5.2 -7.2%
1998 Series
4,930,000
4.37 -5.375
2006 Series
15,000,000
4.0 -5.25
2007 Series
4,000,000
4.07
Premium
YEAR
Total Bonds
Certificates of Obligation
$ 170,000
$
2001 Series
4,500,000
4.1 -6.0
2003 Series
3,360,000
2.0 -3.9
2004 Series
7,750,000
4.0 -4.7
2007 Series CIB 2
432,300
401
2007 Series CIB 4
566,667
4.01
Discount
Total Certificates
of Obligation
Capital Lease - Fire Truck 319,996 4.6
TOTAL GOVERNMENTAL
ACTIVITIES
Business -Type Activities
Revenue Bonds
BALANCE
$ 5,550,000 3.4 -5.2%
$ 3,955,000
BALANCE
AMOUNTS
OUTSTANDING
Unamortized Discounts
OUTSTANDING
DUE
OCTOBER 1,
7.024.479
General Obligation Bonds
SEPTEMBER 30,
IN ONE
2006
ISSUED
RETIRED
2007
YEAR
$ 170,000
$
$ 100,000
$ 70,000
$ 70,000
3,570,000
215,000
3,355,000
230,000
15,000,000
-
475,000
14,525,000
570,000
-
4,000,000
-
4,000,000
126,667
123.057
-
4.922
118.135
4.922
18.863 057
4.000.000
794.922
22.068 135
1,001.589
3,790,000
-
170,000
3,620,000
180,000
2,460,000
200,000
2,260,000
165,000
7,310,000
-
225,000
7,085,000
310,000
-
438,900
33,000
405,900
39,600
569,500
40,200
529,300
46,900
(15.189)
(893)
(14.296)
(893)
13.544.811
1.008.400
667.307
13.885.904
740.607
319.996
-
104.142
215,854
106.645
$ 32,727,864
$ 5,008,400
$ 1,566,371
$ 36,169,893
$ 1,848,841
2001 Series
$ 5,550,000 3.4 -5.2%
$ 3,955,000
2005 Series
3,200,000 3 -4.0
3,100,000
Unamortized Discounts
(30.521)
Economic Development Corporation
7.024.479
General Obligation Bonds
1,300,000 4.01
2007 Series
2,000,000 4.01
Certificates of Obligation
2007 Series
7,606,600 4.07
Other Debt
Public Facility Loan (HUD)
142,000 5.0
TOTAL BUSINESS -TYPE
ACTIVITIES
Economic Development Corporation
2007 Series CIB 5
1,300,000 4.01
$ $ 295,000 $ 3,660,000 S 295,000
115,000 2,985,000 120,000
(1.823) (28,698) (1.823)
408.177 6,616,302 413.177
2.000.000 2.000.000 63.333
7.606.600 235.800 7.370.800 393,500
28.000 7.000 21.000 7.000
$ 7,052,479 $ 9,606,600 $ 650,977 $ 16,008,102 $ 877,010
$ $ 1,300,000 $ 100,000 $ 1,200,000 $ 115,000
The remainder of this page is left blank intentionally.
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2007
NOTE 7: LONG -TERM DEBT (CONTINUED)
Annual debt service requirements as of September 30, 2007, are as follows:
$36,066,054 $18,730,388 $54,796,442 $16,036,800 $6,509,207 $22,546,007
GOVERNMENTAL ACTIVITIES
FISCAL YEAR
BUSINESS -TYPE ACTIVITIES
INTEREST
FISCAL YEAR
PRINCIPAL
INTEREST
TOTAL
PRINCIPAL
INTEREST
TOTAL
2008
$ 1,844,812
$ 1,519,305 $
3,364,117
$ 878,833
$ 657,572 $
1,536,405
2009
1,424,059
1,476,354
2,900,413
932,150
634,889
1,567,039
2010
1,319,867
1,421,091
2,740,958
857,133
595,202
1,452,335
2011
1,278,183
1,370,348
2,648,531
896,817
560,290
1,457,107
2012
1,378,200
1,318,428
2,696,628
771,800
523,959
1,295,759
2013 -2017
8,635,933
5,644,810
14,280,743
4,324,067
2,098,901
6,422,968
2018 -2022
8,701,667
3,742,737
12,444,404
4,298,333
1,145,825
5,444,158
2023 -2027
7,088,333
1,819,099
8,907,432
3,077,667
292,569
3,370,236
2028 -2032
4,395,000
418.216
4.813.216
-
-
$36,066,054 $18,730,388 $54,796,442 $16,036,800 $6,509,207 $22,546,007
2018 -2022
2023 -2027
2028 -2032
$ 1,200,000 $ 252,630 $ 1,452,630
During the year, the City issued $8,615,000 of general obligation bonds and $6,000,000 of
certificates of obligation, with the payment of the related principal and interest to be made
from an annual ad valorem tax levied against all taxable property within the City and
revenues from the proprietary funds. The bonds were issued to provide funds for various
construction projects. In the government -wide financial statements, bond issuance costs are
deferred and amortized over the life of the bonds. Bond issuance costs are reported as
deferred charges.
Bonded debt of the City consists of various series of general obligation bonds, revenue
bonds, certificates of obligation, and a public facility loan. General obligation bonds and
certificates of obligation are direct obligations of the City for which its full faith and credit are
pledged, and are payable from taxes levied on all taxable property located within the City.
Revenue bonds are generally payable from pledged revenues generated by the water and
sewer fund. The debenture agreement for water and sewer bonds require that funds be
i •
ECOMOMIC DEVELOPMENT CORP,
FISCAL YEAR
PRINCIPAL
INTEREST
TOTAL
2008
$ 115,000
$ 48,120
$ 163,120
2009
120,0.00
43,509
163,509
2010
125,000
38,697
163,697
2011
125,000
33,684
158,684
2012
130,000
28,671
158,671
2013 -2017
585,000
59,949
644,949
2018 -2022
2023 -2027
2028 -2032
$ 1,200,000 $ 252,630 $ 1,452,630
During the year, the City issued $8,615,000 of general obligation bonds and $6,000,000 of
certificates of obligation, with the payment of the related principal and interest to be made
from an annual ad valorem tax levied against all taxable property within the City and
revenues from the proprietary funds. The bonds were issued to provide funds for various
construction projects. In the government -wide financial statements, bond issuance costs are
deferred and amortized over the life of the bonds. Bond issuance costs are reported as
deferred charges.
Bonded debt of the City consists of various series of general obligation bonds, revenue
bonds, certificates of obligation, and a public facility loan. General obligation bonds and
certificates of obligation are direct obligations of the City for which its full faith and credit are
pledged, and are payable from taxes levied on all taxable property located within the City.
Revenue bonds are generally payable from pledged revenues generated by the water and
sewer fund. The debenture agreement for water and sewer bonds require that funds be
i •
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2007
NOTE 7: LONG -TERM DEBT (CONTINUED)
available for 1/1211 of the principal and 1/6t' of the interest requirements of the next fiscal
year.
The City is required to accumulate a reserve fund in an amount equal to the average principal
and interest on the revenue bonds. The City has purchased a surety bond through MBIA
Insurance Corporation to fund the required reserve amount.
There are no amounts outstanding at the end of the current fiscal year related to bonds that
were considered defeased.
Compensated Absences
Changes in compensated absences for the year ended September 30, 2007, were as follows:
GOVERNMENTAL BUSINESS -TYPE
ACTIVITIES ACTIVITIES
Balances at October 1, 2006 $559,741 $ 154,378
Additions 302,476 91,881
Deletions (382.535) (101,011)
BALANCES AT SEPTEMBER 30, 2007 $ 479,682 $ 145.248
Of these balances $119,921 is due in the current year in governmental activities and $36,311
is due in the current year in business -type activities. Compensated absences are paid from
the fund responsible for the employee's compensation. Claims and judgments. are generally
liquidated by the general fund.
NOTE 8: RETIREMENT PLAN
Plan Description
The City provides pension benefits for all of its full -time employees through a nontraditional,
joint contributory, hybrid defined benefit plan in the state -wide Texas Municipal Retirement
System (TMRS), one of 821 currently administered by TMRS, an agent multiple - employer
public employee retirement system. TMRS issues a publicly available financial report that
includes financial statements and required supplementary information for TMRS. That report
may be obtained by writing to Texas Municipal Retirement System, Post Office Box 149153,
Austin, Texas 78714.
Benefits
Benefits depend upon the sum of the employee's contributions to the plan, with interest, and
the City- financed monetary credits, with interest. At the date the plan began, the City
granted monetary credits for service rendered before the plan began of a theoretical amount
50
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2007
NOTE 8: RETIREMENT PLAN (CONTINUED
Benefits (Continued)
at least equal to two times what would have been contributed by the employee, with interest,
prior to establishment of the plan. Monetary credits for service since the plan began are a
percent (100 %, 150%, or 200 %) of the employee's accumulated contributions. In addition, the
City can grant, as often as annually, another type of monetary credit referred to as an
updated service credit which is a theoretical amount which, when added to the employee's
accumulated contributions and the monetary credits for service since the plan began, would
be the total monetary credits and employee contributions accumulated with interest if the
current employee contribution rate and City matching percent had always been in existence
and if the employee's salary had always been the average of his salary in the last three (3)
years that are one year before the effective date. At retirement, the benefit is calculated as if
the sum of the employee's accumulated contributions with interest and the employer- financed
monetary credits with interest were used to purchase an annuity.
Members can retire at age 60 and above with 5 or more years of service or with 20 years of
service, regardless of age. A member is vested after 5 years. The plan provisions are
adopted by the governing body of the City, within the options available in the state statutes
governing TMRS.
Contributions
The contribution rate for the employees is 6 %, and the City matching percent is currently 2 to
1, both as adopted by the governing body of the City. Under the state law governing TMRS,
the City contribution rate is annually determined by the actuary. This rate consists of the
normal cost contribution rate and the prior service cost contribution rate, both of which are
calculated to be a level percent of payroll from year to year. The normal cost contribution
rate finances the currently accruing monetary credits due to the City matching percent, which
are the obligation of the City as of an employee's retirement date, not at the time the
employee's contributions are made. The normal cost contribution rate is the actuarially
determined level percent of payroll necessary to satisfy the obligation of the City to each
employee at the time his /her retirement becomes effective. The prior service contribution
rate amortizes the unfunded (overfunded) actuarial liability (asset) over the remainder of the
plan's 25 -year open amortization period. The unit credit actuarial cost method is used for
determining the City contribution rate. Contributions are made monthly by both the
employees and the City. Since the City needs to know its contribution rate in advance for
budgetary purposes, there is a one -year delay between the actuarial valuation that serves as
the basis for the rate and the calendar year when the rate goes into effect (i.e., December 31,
2006 valuation is effective for rates beginning January 2008).
The actuarial assumptions included (a) 7% investment rate of return, (b) no projected salary
increases, (c) 3.5% inflation and (d) no cost of living adjustments. The asset valuation method
was determined based on amortized cost.
51
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2007
NOTE 8: RETIREMENT PLAN (CONTINUED)
Schedule of Actuarial Liabilities and Funding Progress
Actuarial Value of Assets
Actuarial Accrued Liability
Percentage Funded
Unfunded (Overfunded) Actuarial Accrued
Liability (UAAL)
Annual Covered Payroll
UAAL as a Percentage of Covered Payroll
ACTUARIAL VALUATION DATE
DECEMBER 31, DECEMBER 31, DECEMBER 31,
2006 2005 2004
$ 7,290,175 $6,042,437 $5,122,816
11,798,002 9,003,970 7,950,619
61.79% 67.1% 64.4%
4,507,827 2,961,533
8,478,634 7,662,928
53.17% 38.6%
TREND INFORMATION
FOR THE RETIREMENT PLAN FOR THE EMPLOYEES OF CITY OF SCHERTZ
FISCAL
YEAR ENDING
September 30, 2007
September 30, 2006
September 30, 2005
NOTE 9: RISK MANAGEMENT
ANNUAL
PENSION COST (APC)
$719,745
734,436
573,969
PERCENTAGE OF
APC CONTRIBUTED
100%
100
100
2,827,803
6,144,053
46.0%
NET PENSION
OBLIGATION
The City is exposed to various risks of loss related to torts; theft of, damage to, and
destruction of assets; errors and omissions; and natural disasters. The City contracts with
the Texas Municipal League Intergovernmental Risk Pool, a public entity risk pool currently
operating as a common risk management and insurance program providing insurance
coverage in the following areas: general liability, automobile liability and physical damage,
law enforcement liability, worker's compensation, real and personal property, mobile
equipment, and errors and omissions liability. The agreement for formation of the Texas
Municipal League Intergovernmental Risk Pool provides that the pool will be self sustaining
through member premiums and will be adjusted annually through an experience modifier.
The City continues to carry commercial insurance for all other risks of loss including public
official bond, employee dishonesty blanket bond, and underground tank pollution liability.
Settled claims resulting from these risks have not exceeded coverage for each of the past four
(4) years.
The pooling agreement requires the pool to be self- sustaining. It is not possible to estimate
the amount of any losses for which the City might be liable. The Texas Municipal League
Intergovernmental Risk Pool has published its own financial report for the year ended
September 30, 2007, which can be obtained from the Texas Municipal League.
52
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2007
NOTE 10: CONTINGENT LIABILITIES
Amounts received or receivable from grant agencies are subject to audit and adjustment by
grantor agencies, principally the federal government. Any disallowed claims, including
amounts already collected, may constitute a liability of the applicable funds. The amount, if
any, of expenditures that may be disallowed by the grantor cannot be determined at this
time, although the City expects such amounts, if any, to be immaterial.
The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not
presently determinable, in the opinion of management the resolution of these matters will not
have a material adverse effect on the financial condition of the City.
NOTE 11: JOINT VENTURE
Schertz /Seguin Local Government Corporation
The corporation was created to aid, assist, and act on behalf of the cities of Schertz and
Seguin in acquiring, constructing, maintaining, and operating a water utility system. The City
of Schertz is jointly liable, together with the City of Seguin, for operating deficits and long-
term debt of the Schertz /Seguin Local Government Corporation. The corporation has issued
revenue and revenue refunding bonds in the amount of $97,965,000 to provide funds to
build, improve, extend, enlarge, and repair the corporation's utility system, fund a reserve,
and pay the costs of bond issuance. As of September 30, 2007, $55,436,516 remained
outstanding on the bonds and the corporation has accumulated approximately $1,946,263 in
unrestricted net assets. The bond resolution pledges intergovernmental contract revenues
from the cities of Schertz and Seguin. Under the intergovernmental water supply contract,
the cities are unconditionally obligated to pay their respective shares of annual contract
revenue bond debt service as expenses from their respective utility systems. Contributions to
the corporation are reflected as "nonoperating expenses" in the water and sewer fund and
totaled $1,213,408 for the year ended September 30, 2007.
Separate financial statements for the Schertz /Seguin Local Government Corporation may be
obtained from the City of Seguin, 210 East Gonzales Street, Texas 78156.
NOTE 12: DISCRETELY PRESENTED COMPONENT UNITS INFORMATION
Condensed Statement Of Net Assets
Total Assets
Total Liabilities
TOTAL NET ASSETS, UNRESTRICTED
SCHERTZ
ECONOMIC SCHERTZ
DEVELOPMENT THE DEVELOPMENT
CORPORATION LIBRARY FOUNDATION TOTAL
$6,270,619 $40,726
1,320,518 35
$ - $6,311,345
$1,320,553
$4,950,101 $40,691 $ - $4,990,792
53
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2007
NOTE 12: DISCRETELY PRESENTED COMPONENT UNITS INFORMATION (CONTINUED)
Condensed Statement Of Activities
SCHERTZ
ECONOMIC SCHERTZ
DEVELOPMENT THE DEVELOPMENT
CORPORATION LIBRARY FOUNDATION TOTAL
TOTAL EXPENSES $1,865,224 $ 3,688 $ 106,877 $1,975,789
PROGRAM REVENUES
Charges for Services - 8,688 - 8,688
Operating Grants and Contributions - 3,938 - 3,938
Capital Grants and Contributions 3,365,847 - - 3,365,847
Net Program (Expense) Revenue 1,500,623 8,938 (106,877) 1,402,684
GENERAL REVENUES
Sales Tax
1,821,140
-
-
1,821,140
Unrestricted Investment Earnings
1 51,1 58
1,767
406
153,331
Total General Revenues
1,972,298
1,767
406
1,974,471
Change in Net Assets
3,472,921
10,705
(106,471)
3,377,1 55
NET ASSETS - BEGINNING
1,477,1 80
29,986
106,471
1,613,637
NET ASSETS - ENDING
$4,950,101
$40,691
$ -
$4,990,792
54
REQUIRED SUPPLEMENTARY INFORMATION
55
CITY OF SCHERTZ, TEXAS
GENERAL FUND
SCHEDULE OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
YEAR ENDED SEPTEMBER 30, 2007
REVENUES
Taxes
Ad Valorem
Tax Penalty
City Sales Tax
Utility Franchise
Other
Total Taxes
Licenses and Permits
Charges for Services
Administration
Swimming Pool
Animal Shelter
Building Rental
Library and Fire
Interfund
Other
Total Charges for Services
Fines and Forfeitures
Other Revenue
Interest
Sale of Land
Miscellaneous
Total Other Revenue
Total Revenues
EXPENDITURES
Current
General Government
City Council
City Manager
Planning and Zoning
Legal
Municipal Court
Facility Maintenance
City Secretary
Finance
Court Support
Information Technology
Human Resources
ORIGINAL
BUDGET
$ 4,052,093
38,000
3,300,000
911,650
25,000
8,326,743
FINAL
BUDGET ACTUAL
VARIANCE
WITH FINAL
BUDGET
POSITIVE
(NEGATIVE)
$4,635,093
$4,744,527
$ 109,434
38,000
38,526
526
3,400,000
3,643,101
243,101
943,150
1,004,1 16
60,966
30,000
36,232
6,232
9,046,243
9,466,502
420,259
698,100
738,300
937,581
199,281
318,067
236,622
1,498,080
550,900
615,700
678,769
63,069
58,000
78,000
50,733
(27,267)
34,000
34,000
36,120
2,120
30,600
30,600
64,721
34,121
363,018
363,018
365,112
2,094
625,655
625,655
585,152
(40,503)
24,950
23,500
3,670
(19,830)
1,687,123
1,770,473
1,784,277
13,804
969,490 969,490
268,000 418,000
81,445 81,445
349,445 499,445
1,208,038 238,548
515,893
97,893
664,120
664,120
318,067
236,622
1,498,080
998,635
12,030,901 13,023,951 14,894,478 1,870,527
31,600
31,600
34,894
(3,294)
451,471
549,655
536,951
12,704
270,613
346,827
291,527
55,300
189,000
189,000
315,868
(126,868)
314,693
318,582
306,007
12,575
592,073
595,309
529,651
65,658
131,314
133,023
1 31 ,1 59
1,864
364,277
371,463
361,079
10,384
154,887
157,080
153,732
3,348
557,071
821,995
794,431
27,564
179,210
177,354
161,657
15,697
(continued)
56
CITY OF SCHERTZ, TEXAS
GENERAL FUND
SCHEDULE OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
YEAR ENDED SEPTEMBER 30, 2007
EXPENDITURES (CONTINUED)
Current (Continued)
General Government (Continued)
Records Management
Engineering
Fleet Services
Special Events
Public Information
Other - Unclassified
Total General Government
Public Safety
Police Department
Fire Department
Inspection
Total Public Safety
Streets and Parks
Streets
Parks
Swimming Pool
Total Streets and Parks
Health
Animal Control
Culture and Recreation
Library
CAPITAL OUTLAY
BOND ISSUE COSTS
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
OTHER FINANCING SOURCES (USES)
Transfer In
Transfer Out
Issuance of Bonds
Total Other Financing
Sources (Uses)
Net Change in Fund Balance
FUND BALANCE - OCTOBER 1, 2006
FUND BALANCE -
SEPTEMBER 30, 2007
ORIGINAL
BUDGET
VARIANCE
WITH FINAL
BUDGET
FINAL POSITIVE
BUDGET ACTUAL (NEGATIVE)
$ 100,820
$ 112,156
$ 114,033
$ (1,877)
165,218
165,218
136,247
28,971
208,910
281,751
269,723
12,028
-
-
58,342
(58,342)
163,596
165,386
163,165
2,221
678,447
704,205
708,514
(4,309)
4,553,200
5,120,604
5,066,980
53,624
3,277,121
3,353,716
3,229,562
124,154
1,964,074
1,984,679
2,052,411
(67,732)
388,186
390,862
383,698
7,164
5,629,381
5,729,257
5,665,671
63,586
640,136
643,603
655,930
(12,327)
588,877
608,571
598,021
10,550
160,703
160,803
138,972
21,831
1,389,716
1,412,977
1,392,923
20,054
257,794
260,859
263,918
(3,059)
441,295
445,716
439,767
5,949
187,294
841,330
955,350
(114,020)
8,967
(8,967)
12,458,680
13,810,743
13,784,609
26,134
(427,779)
(786,792) 1,109,869 323,077
1 9, 500 1 9, 500
(83,650) (83,650)
1,008,400 1,008,400
944,250 944,250
$ (427,779) $ (786,792) 2,054,119 $1,267,3 7
7,43 5,264
$ 9,489,383
57
CITY OF SCHERTZ, TEXAS
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
SEPTEMBER 30, 2007
NOTE 1: BUDGETARY INFORMATION
The budget for the general fund is adopted on a basis consistent with generally accepted
accounting principles. Annual appropriations lapse at fiscal year end.
The original budget for the general fund is adopted by the city council by September 30.
Budgetary preparation and control is exercised at the department level. The city manager is
authorized to transfer budget amounts between line items within a department; however, any
transfer or supplemental appropriation that amends the total expenditures of a department or total
budget requires city council approval. Both the original and final amended budget are included.
NOTE 2: EXCESS OF EXPENDITURES OVER APPROPRIATIONS
For the year ended September 30, 2007, expenditures exceeded appropriations in the City Council,
legal, records management, special events, other - unclassified, fire department, streets, and animal
control departments and capital outlay of the general fund by $3,294, $126,868, $1,877, $58,342,
$13,276, $67,732, $12,327, $3,059 and $114,020, respectively. These overexpenditures were
funded by greater than anticipated revenues in the general fund.
M
COMBINING AND INDIVIDUAL FUND
STATEMENTS AND SCHEDULES
59
(This Page Intentionally Left Blank)
m
NONMAJOR GOVERNMENTAL FUNDS
Nonmajor Governmental Funds (Special Revenue Funds) are used to account for the proceeds of
specific revenue sources that are legally restricted to expenditure for specified purposes.
Park Fund - will account for revenues from developers' fees (in lieu of park land dedication),
grants, and donations and is designed to monitor and manage improvement of park system.
Recycling Fund - will account for revenues received from the recycling fee on all residential water
bills and the sale of recyclable material and used to buy down solid waste collection costs.
Hotel Occupancy Tax Fund - will account for proceeds of hotel occupancy taxes to be used strictly
for those kinds of programs that promote the tourism industry.
Library Grant Fund - will account for funds from a state grant to be used for purchasing computers
at the library to be used for access to the internet.
Police Department Forfeitures Fund - will account for revenue received from drug related cases in
conjunction with other law enforcement agencies.
61
CITY OF SCHERTZ, TEXAS
COMBINING BALANCE SHEET
NONMAIOR GOVERNMENTAL FUNDS
SEPTEMBER 30, 2007
ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts Payable
FUND BALANCES
Unreserved
TOTAL LIABILITIES AND FUND BALANCES
SPECIAL REVENUE
HOTEL
PARK RECYCLING OCCUPANCY
FUND FUND TAX
$ 37,873 $ 8,309
416,034 -
$ 453,907 $ 8,309
$ 53,200
401,967
19,123
$ 474,290
$ 2,613 $ 1,529 $ 3,547
451,294 6,780 470,743
$ 453,907 $ 8,309 $ 474,290
MM
FUNDS
POLICE
LIBRARY DEPARTMENT
GRANT FORFEITURES
FUND FUND
$ 6,093 $ 67,883
- 274,098
TOTAL
OTHER
GOVERNMENTAL
FUNDS
$ 173,358
1,092,099
19,123
$ 6,093 $ 341,981 $ 1,284,580
$ - $ - $ 7,689
6,093 341,981 1,276,891
$ 6,093 $ 341,981 $ 1,284,580
63
CITY OF SCHERTZ, TEXAS
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAIOR GOVERNMENTAL FUNDS
YEAR ENDED SEPTEMBER 30, 2007
EXPENDITURES
General and Administrative
53,032
SPECIAL REVENUE
Contractual Services
14,106
HOTEL
Capital Outlay
PARK
RECYCLING OCCUPANCY
Total Expenditures
FUND
FUND TAX
REVENUES
Taxes
$ -
$ - $ 259,176
Developer Fees
124,473
- -
Grants
-
Property Forfeitures
-
- -
Sale of Recycling /Materials
-
22,821 -
Miscellaneous Revenue
25,000
- -
Interest
25,267
- 20,927
Total Revenues
174,740
22,821 280,103
EXPENDITURES
General and Administrative
53,032
- 83,950
Contractual Services
14,106
28,774 34,607
Capital Outlay
-
- 50,126
Total Expenditures
67,138
28,774 168,683
Excess (Deficiency) of Revenues
Over (Under) Expenditures
107,602
(5,953) 1 1 1,420
OTHER FINANCING SOURCES (USES)
Transfer Out
Net Change in Fund Balance
FUND BALANCES - OCTOBER 1, 2006
FUND BALANCES - SEPTEMBER 30, 2007
(179,000) - (19,500)
(71,398) (5,953) 91,920
522,692 12,733 378,823
$ 451,294 $ 6,780 $ 470,743
64
FUNDS
POLICE
TOTAL
LIBRARY
DEPARTMENT
OTHER
GRANT
FORFEITURES
GOVERNMENTAL
FUND
FUND
FUNDS
$ - $ - $ 259,176
124,473
3,349 - 3,349
- 189,063 189,063
- 22,821
- 25,000
- 12,616 58,810
3,349 201,679 682,692
3,531 48,575 189,088
- - 77,487
- 104,996 155,122
3,531 153,571 421,697
(182) 48,108 260,995
- - (198,500)
(182) 48,108 62,495
6,275 293,873 1,214,396
$ 6,093 $ 341,981 $ 1,276,891
65
CITY OF SCHERTZ, TEXAS
PARK SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
BUDGET TO ACTUAL
YEAR ENDED SEPTEMBER 30, 2007
ORIGINAL
BUDGET
REVENUES
FINAL
BUDGET ACTUAL
Developer Fees
$ 72,225
$ 72,225
Tree Mitigation
70,000
70,000
Miscellaneous Revenue
-
25,000
Interest Income
17,000
17,000
Total Revenues
159,225
184,225
EXPENDITURES
General and Administrative
50,000
50,000
Professional Services
30,000
30,000
Capital Outlay
21,000
21,000
Total Expenditures
101,000
101,000
Excess of Revenues
Over Expenditures
58,225
83,225
OTHER FINANCING SOURCES (USES)
Transfer Out - -
Net Change in Fund Balance $ 58,225 $ 83,225
FUND BALANCE - OCTOBER 1, 2006
FUND BALANCE - SEPTEMBER 30, 2007
VARIANCE WITH
FINAL BUDGET
POSITIVE
(NEGATIVE)
$ 79,312 $ 7,087
45,161 (24,839)
25,000 -
25,267 8,267
174,740 (9,485)
53,032 3,032
14,106 (15,894)
(21,000)
67,138 (33,862)
107,602 24,377
(179,000) (179,000)
(71,398) $ (154,623)
522,692
$ 451,294
..
CITY OF SCHERTZ, TEXAS
RECYCLING SPECIAL REVENUE FUND
SCHEDULE OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET TO ACTUAL
YEAR ENDED SEPTEMBER 30, 2007
REVENUES
Sale of Recycling Materials
EXPENDITURES
Contractual Services
Net Change in Fund Balance
FUND BALANCE - OCTOBER 1, 2006
FUND BALANCE - SEPTEMBER 30, 2007
ORIGINAL
VARIANCE WITH
AND
FINAL BUDGET
FINAL
POSITIVE
BUDGET
ACTUAL (NEGATIVE)
$ 15,000 $ 22,821
15,000 28,774
$ - $ (5,953)
12,733
$ 6,780
$ 7,821
13,774
$ (5,953)
67
CITY OF SCHERTZ, TEXAS
HOTEL OCCUPANCY TAX SPECIAL REVENUE FUND
SCHEDULE OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET TO ACTUAL
YEAR ENDED SEPTEMBER 30, 2007
VARIANCE WITH
EXPENDITURES
General and Administrative
70,000
84,984
83,950
FINAL BUDGET
Contractual Services
ORIGINAL
FINAL
34,607
POSITIVE
Capital Outlay
BUDGET
BUDGET
ACTUAL
(NEGATIVE)
REVENUES
81,700
169,930
168,683
1,247
Occupancy Tax
$ 150,000
$150,000
$259,176
$ 109,176
Interest Income
8,900
8,900
20,927
12,027
Total Revenues
158,900
158,900
280,103
121,203
EXPENDITURES
General and Administrative
70,000
84,984
83,950
1,034
Contractual Services
1,000
24,120
34,607
(10,487)
Capital Outlay
10,700
60,826
50,126
10,700
Total Expenditures
81,700
169,930
168,683
1,247
Excess (Deficiency) of Revenues
Over (Under) Expenditures
77,200
(11,030)
111,420
122,450
OTHER FINANCIAL SOURCES (USES)
Transfer In - 22,986 - (22,986)
Transfer Out - - (19,500) 19,500
Total Other Financial Sources - 22,986 (19,500) (3,486)
Net Change in Fund Balance $ 77,200 $ 1 1,956 91,920 $ 1 18,964
FUND BALANCE - OCTOBER 1, 2006 378,823
FUND BALANCE - SEPTEMBER 30, 2007 $470,743
.:
CITY OF SCHERTZ, TEXAS
DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET TO ACTUAL
YEAR ENDED SEPTEMBER 30, 2007
REVENUES
Taxes
Interest Income
Total Revenues
EXPENDITURES
Debt Service
Principal
Interest
Fiscal Agent Fees
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
OTHER FINANCING SOURCES
Transfer In
Net Change in Fund Balance
FUND BALANCE - OCTOBER 1, 2006
FUND BALANCE - SEPTEMBER 30, 2007
ORIGINAL
AND
FINAL
BUDGET
$ 2,413,894
37,000
2,450,894
1,248,368
1,277,675
5,000
2,531,043
(80,149)
ACTUAL
$ 2,984,547
92,701
3,077,248
1,562,342
1,469,995
3,150
3,035,487
41,761
VARIANCE WITH
FINAL BUDGET
POSITIVE
(NEGATIVE)
$ 570,653
55,701
626,354
(313,974)
(192,320)
1,850
(504,444)
121,910
277,500 72,000 (205,500)
$ 197,351 113,761
347,739
$ 461,500
$ (83,590)
.•
(This Page Intentionally Left Blank)
70
DISCRETELY PRESENTED COMPONENT UNITS
Discretely presented component units consist of separate entities whose governing bodies
are not substantively the same as the governing body of the primary government. The
discretely presented component units also provide services to areas other than the primary
government.
71
CITY OF SCHERTZ, TEXAS
DISCRETELY PRESENTED COMPONENT UNITS
COMBINING STATEMENT OF NET ASSETS
SEPTEMBER 30, 2007
LIABILITIES
CURRENT LIABILITIES
Accounts Payable and Accrued
Liabilities $ 120,518 $ 35 - $ 120,553
Accrued Salaries and Benefits 115,000 - - 115,000
Total Current Liabilities 235.518 35 - 235.553
NONCURRENT LIABILITIES
Long -Term Debt 1,085,000 - = 1,085,000
Total Liabilities 1,320,518 35 = 1,320,553
NET ASSETS
Restricted for
Construction 3,365,847 - - 3,365,847
Unrestricted 1.584,254 4.691 - 1.624.945
TOTAL NET ASSETS $4,950,101 $ 40,691 $4,990,792
72
SCHERTZ
ECONOMIC
SCHERTZ
DEVELOPMENT
THE
DEVELOPMENT
CORPORATION
LIBRARY
FOUNDATION
TOTAL
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents
$ 196,880
$ 16,722
$ -
$ 213,602
Investments
4,565,272
24,004
-
4,589,276
Accounts Receivable
1,498,210
-
-
1,498,210
Deferred Charges
1,412
-
=
1,412
Total Current Assets
6.261,774
40,726
-
6.302,500
NON - CURRENT ASSETS
Deferred Charges
8.845
-
=
8,845
TOTAL ASSETS
$6,270,619
$ 40,726
$6,311,345
LIABILITIES
CURRENT LIABILITIES
Accounts Payable and Accrued
Liabilities $ 120,518 $ 35 - $ 120,553
Accrued Salaries and Benefits 115,000 - - 115,000
Total Current Liabilities 235.518 35 - 235.553
NONCURRENT LIABILITIES
Long -Term Debt 1,085,000 - = 1,085,000
Total Liabilities 1,320,518 35 = 1,320,553
NET ASSETS
Restricted for
Construction 3,365,847 - - 3,365,847
Unrestricted 1.584,254 4.691 - 1.624.945
TOTAL NET ASSETS $4,950,101 $ 40,691 $4,990,792
72
CITY OF SCHERTZ, TEXAS
DISCRETELY PRESENTED COMPONENT UNITS
COMBINING STATEMENT OF ACTIVITIES
YEAR ENDED SEPTEMBER 30, 2007
SCHERTZ
73
ECONOMIC
SCHERTZ
DEVELOPMENT
THE
DEVELOPMENT
CORPORATION
LIBRARY
FOUNDATION
TOTAL
EXPENSES
Culture and Recreation
$ -
$ 3,688
$ -
$ 3,688
Economic Development
1,865,224
-
106,877
1,972,101
Total Expenses
1,865,224
3,688
106,877
1,975,789
REVENUES
Program Revenues
Charges for Services
-
8,688
-
8,688
Operating Grants and Contributions
-
3,938
-
3,938
Capital Grants and Contributions
3,365,847
-
-
3,365,847
Net Program (Expense) Revenue
1,500,623
8,938
(106,877)
1,402,684
General Revenues
Sales Tax
1,821,140
-
-
1 ,821 ,140
Unrestricted Investment Earnings
1 51,1 58
1,767
406
153,331
Total General Revenues
1,972,298
1,767
406
1,974,471
Change in Net Assets
3,472,921
10,705
(106,471)
3,377,155
NET ASSETS - BEGINNING
1,477,180
29,986
106,471
1,613,637
NET ASSETS - ENDING
$ 4,950,1 01
$40,691
$ -
$ 4,990,792
73
(This Page Intentionally Left Blank)
74
STATISTICAL SECTION
This part of the City of Schertz's comprehensive annual financial report presents detailed
information as a context for understanding what the information in the financial statements,
note disclosures, and required supplementary information says about the City's overall
financial health.
CONTENTS
Financial Trends - These schedules contain trend information to help
readers understand how the City's financial performance and well -being
have changed over time.
Revenue Capacity - These schedules contain information to help readers
assess the City's most significant local revenue source - its water and
property taxes.
Debt Capacity - These schedules present information to help readers
assess the affordability of the City's current levels of outstanding debt
and the City's ability to issue additional debt in the future.
Demographic and Economic Information - These schedules offer
demographic and economic indicators to help readers understand the
environment within which the City's financial activities take place.
Operating Information - These schedules contain service and
infrastructure data to help readers understand how the information
in the City's financial report relates to the services the City provides
and the activities it performs.
SCHEDULES
1 through 4
5 through 10
11 through 15
16 through 18
19 through 20
Except where noted, the information in these schedules is derived from the City of Schertz
comprehensive annual financial reports for the relevant year. The City implemented GASB
Statement 34 in 2003; schedules presenting government -wide information include
information beginning that year.
75
CITY OF SCHERTZ, TEXAS
NET ASSETS, BY COMPONENT
LAST FIVE FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING) TABLE 1
TOTAL GOVERNMENTAL
ACTIVITIES NET ASSETS $44.746.879 $37.905.210 $29.470.466 524.251.491 $19,319,547
Business -Type Activities
Invested in Capital Assets, Net of
Related Debt $18,788,933 $24,783,839 $24,970,976 $22,901,982 $21,806,626
Restricted 1,995,213 1,253,711 428,712 1,010,662 1,384,083
Unrestricted 23.269.227 9.879.126 5.377,968 3.988.006 5.294.283
TOTAL BUSINESS -TYPE ACTIVITES
NET ASSETS $44,053,373 $35,916,676 $30,777,656 $27,900,650 $28,484,992
Primary Government
Invested in Capital Assets, Net of
Related Debt $51,710,210 $38,040,870 $42,670,773 $39,130,116 $33,186,799
Restricted 2,659,186 17,142,260 5,242,208 8,048,269 1,875,396
Unrestricted 34.430.856 18.638.756 12.33 5.141 4.973.756 12.742.344
TOTAL PRIMARY GOVERNMENT
NET ASSETS $88,800,252 $73,821,886 $60,248,122 $52,152,141 $47,804,539
NOTE: Less than ten (10) years of data has been presented because this is the fifth year of
implementation of GASB 34. The information will be presented on a prospective basis.
76
2007
2006
2005
2004
2003
Governmental Activities
Invested in Capital Assets, Net of
Related Debt
$32,921,277
$13,257,031
$17,699,797
$16,228,134
$11,380,173
Restricted
663,973
15,888,549
4,813,496
7,037,607
491,313
Unrestricted
11.161.629
8.759.630
6.957.173
985.750
7.448.061
TOTAL GOVERNMENTAL
ACTIVITIES NET ASSETS $44.746.879 $37.905.210 $29.470.466 524.251.491 $19,319,547
Business -Type Activities
Invested in Capital Assets, Net of
Related Debt $18,788,933 $24,783,839 $24,970,976 $22,901,982 $21,806,626
Restricted 1,995,213 1,253,711 428,712 1,010,662 1,384,083
Unrestricted 23.269.227 9.879.126 5.377,968 3.988.006 5.294.283
TOTAL BUSINESS -TYPE ACTIVITES
NET ASSETS $44,053,373 $35,916,676 $30,777,656 $27,900,650 $28,484,992
Primary Government
Invested in Capital Assets, Net of
Related Debt $51,710,210 $38,040,870 $42,670,773 $39,130,116 $33,186,799
Restricted 2,659,186 17,142,260 5,242,208 8,048,269 1,875,396
Unrestricted 34.430.856 18.638.756 12.33 5.141 4.973.756 12.742.344
TOTAL PRIMARY GOVERNMENT
NET ASSETS $88,800,252 $73,821,886 $60,248,122 $52,152,141 $47,804,539
NOTE: Less than ten (10) years of data has been presented because this is the fifth year of
implementation of GASB 34. The information will be presented on a prospective basis.
76
CITY OF SCHERTZ, TEXAS
CHANGE IN NET ASSETS
LAST FIVE FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
EXPENSES
Governmental Activities
General Government
Public Safety
Streets and Parks
Health
Culture and Recreation
Interest and Other Fees
Total Governmental Activities
Business -Type Activities
Water and Sewer
EMS
Total Business -Type Activities
Total Primary Government
Expenses
PROGRAM REVENUES
Governmental Activities
Charges for Service
General Government
Public Safety
Streets and Parks
Health
Culture and Recreation
Operating Grants and Contributions
Capital Grants and Contributions
Total Governmental Activities
Program Revenues
Business -Type Activities
Charges for Service
Water and Sewer
EMS
Capital Grants and Contributions
Total Business -Type Activities
Program Revenues
Total Primary Government
Program Revenues
2007 2006
2005 2004
TABLE 2
2003
$ 6,704,483 $ 3,957,693 $ 3,612,084 $ 2,873,573 $2,630,450
5,920,046
6,403,122
5,558,596
4,586,498
3,705,722
2,702,102
1,240,956
1,134,281
1,019,101
1,182,993
272,730
231,149
221,950
192,506
156,927
450,974
396,078
339,124
310,013
451,215
1,507,900
823,818
862,744
707,090
499,011
17,558,235
13,052,816
11,728,779
9,688,781
8,626,318
5,640,431
5,382,779
3,808,133
2,153,213
10,594,731
9,821,823
8,937,553
8,302,505
8,300,590
4,842,028
3,474,249
3,789,791
2,509,858
2,248,651
15,436,759
13,296,072
12,727,344
10,812,363
10,549,241
8,135,299
5,017,343
3,904,818
3,443,429
1,723,611
32,994,994
26,348,888
24,456,123
20,501,144
19,175.559
3,123,184
1,310,142
1,575,236
1,381,802
1,461,361
1,307,295
1,684,786
1,475,618
1,1 18,241
1,033,713
196,436
143,254
141,523
203,579
34,248
33,148
44,178
44,611
36,095
117,983
201,779
149,225
146,429
180,707
155,644
493,281
1,567,164
1,789,763
2,280,629
2,788,821
5,640,431
5,382,779
3,808,133
2,153,213
10,995,554
10,281,528
8,981,313
7,354,266
5,591,770
13,438,473
11,223,658
9,308,362
7,534,841
8,135,299
5,017,343
3,904,818
3,443,429
1,723,611
2,014,126
2,755,376
3,148,100
2,055,366
1,045,334
279,913
21,21 1,192
18,276,576
14,807,157
10,303,786
10,429,338
32,206,746
28,558,104
23,788,470
17,658,052
16,021,108
(CONTINUED)
77
(This Page Intentionally Left Blank)
CITY OF SCHERTZ, TEXAS
CHANGES IN NET ASSETS
LAST FIVE FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING) TABLE 2
(CONTINUED)
GOVERNMENTAL REVENUES AND OTHER
2007
2006
2005
2004
2003
Net (Expense) Revenues
Taxes
Governmental Activities
$ (6,562,681)
$ (2,771,288)
$ (2,747,466)
$ (2,334,515)
$(3,034,548)
Business -Type Activities
5.774.433
4.980.507
2.079.813
(508,577)
(119,903)
Total Primary
6,781
5,124
Mixed Drink
29,451
20,068
Government Net Expenses
(788.248)
2.209.219
(667,653)
(2.843.092)
(3,154,451)
GOVERNMENTAL REVENUES AND OTHER
976,595
473,205
CHANGES IN NET ASSETS
161,048
195,409
Governmental Activities
Taxes
Ad Valorem
7,309,127
5,705,805
Sales
3,643,101
3,1 36,970
Utility Franchise
1,004,1 16
961,462
Hotel /Motel
259,176
202,108
Bingo
6,781
5,124
Mixed Drink
29,451
20,068
Unrestricted Investment Earnings
1,453,645
552,091
Miscellaneous
923,574
112,306
Transfers
(1.224,621)
510.098
Total Governmental Activities
13.404.350
11.206.032
Business -Tvpe Activities
Interest and Investment Earnings
976,595
473,205
Miscellaneous
161,048
195,409
Special Item - Gain on Sale of
Capital Asset
Transfers
1,224,621
Total Business -Type Activities
2.362.264
4,908,108
2,227,282
786,298
42,982
4,946
6,437
356,080
83,337
199.123
8.614.593
170,610
177,554
4,410,567
1,703,994
659,847
37,688
4,749
5,064
114,323
58,770
584.733
7.579.735
61,025
120,043
3,984,262
2,035,655
671,009
43,177
4,528
4,243
93,690
16,028
410.802
7.263.394
94,731
158,372
327,900
(510,098) (199,123) (584,733) (410.802)
158,516 149.041 (75,765) (157.699)
TOTAL PRIMARY GOVERNMENT 15,766,614 11,364,548 8,763,634 7,503,970 7,105,695
CHANGES IN NET ASSETS
Governmental Activities 6,841,669 8,434,744 5,867,127 5,245,220 4,228,846
Business -Type Activities 8.136.697 5.139,023 2.228,854 (584,342) (277.602)
TOTAL PRIMARY GOVERNMENT $ 14,978,366 $ 13,573,767 $ 8,095,981 $ 4,660,878 $ 3,951,244
NOTE: Less than ten (10) years of data has been presented because this is the fifth year of
implementation of GASB 34. The information will be presented on a prospective basis.
79
CITY OF SCHERTZ, TEXAS
FUND BALANCES, GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
ALL OTHER GOVERNMENTAL FUNDS
Reserved
$ 461,500
$ 690,830
$ 590,007
FISCAL
Unreserved, Reported In:
2007
2006
2005
2004
GENERAL FUND
1,276,891
871,305
660,151
794,729
Reserved
$ 269,806
$ 232,555
$ 10,571
$ 65,551
Unreserved
9,210,610
7,202,709
4,864,647
4,319,428
TOTAL GENERAL FUND
$ 9,480,416
$ 7,435,264
$4,875,218
$ 4,384,979
ALL OTHER GOVERNMENTAL FUNDS
Reserved
$ 461,500
$ 690,830
$ 590,007
$ 414,357
Unreserved, Reported In:
Special Revenue Funds
1,276,891
871,305
660,151
794,729
Debt Service Fund
-
-
-
Capital Project Funds
14,543,759
1 5,134,814
5,135,834
8,792,947
TOTAL ALL OTHER
GOVERNMENTAL FUNDS
$ 16,282,150
$ 16,696,949
$6,385,992
$ 10,002,033
.E
TABLE 3
YEAR ENDED SEPTEMBER 30,
2003 2002
2001
2000
1999
1998
450,018
1,212,1 18
1,939,678
4,632,762
$ - $ 122,355
$ 163,210
$ 58,232
$ 36,066
$ 58,715
5,499,836 2,863,146
3,260,866
3,015,959
2,606,701
2,652,300
$ 5,499,836 $ 2,985,501
$ 3,424,076
$ 3,074,191
$2,642,767
$ 2,71 1,01 5
$ 491,313 $ 299,074 $ 156,200 $ 105,019 $ 170,444 $ 171,987
665,281
740,647
886,961
659,930
533,291
450,018
1,212,1 18
1,939,678
4,632,762
1,087,077
2,077,276
4,779,428
$ 2,368,712 $ 2,979,399 $ 5,675,923 $1,852,026 $2,781,011 $ 5,401,433
CITY OF SCHERTZ, TEXAS
CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
FISCAL
NET CHANGE IN FUND BALANCES $ 1,630,353 $ 12,871 ,003 $ (2,477,650) $ 6,51 8,464
Debt Service as a Percentage of
Noncapital Expenditures 18.2% 15.4% 18.1% 18.5%
2007
2006
2005
2004
REVENUES
Taxes
$ 12,710,225
$10,587,264
$ 8,569,435
$ 7,322,727
Licenses and Permits
1,062,054
1,475,619
1 ,421 ,575
852,577
Charges for Services
1,807,098
1,820,940
872,286
793,096
Fines and Forfeitures
1,397,101
1,157,480
915,704
842,322
Grants
153,349
19,278
956,791
1,710,277
Other Revenue
2,460,832
710,580
659,430
490,266
Total Revenues
19,590,659
15,771,161
13,395,221
12,01 1,265
EXPENDITURES
General Government
5,389,340
3,817,778
3,471,560
2,772,024
Public Safety
5,665,671
5,020,684
4,542,384
3,833,243
Streets and Parks
1,392,923
1,162,541
1,043,501
942,942
Health
263,918
216,655
208,499
181,074
Culture and Recreation
439,767
384,127
325,498
298,179
Economic Development
-
-
-
Management Services
-
-
-
CapitalOutlay
5,504,679
6,127,735
4,360,483
3,827,879
Debt Service
Principal
1,458,000
1,1 55,000
1,236,000
1,233,000
Interest and Fiscal Charges
1,473,345
803,664
884,069
609,522
Bond Issue Costs
52,300
165,125
-
1 1 1 ,802
Total Expenditures
21,639,943
18,853,309
16,071,994
13,809,665
Excess (Deficiency) of Revenues
Over (Under) Expenditures
_ (2,049,284)
(3,082,148)
(2,676,773)
(1,798,400)
OTHER FINANCING SOURCES (USES)
Bonds Issued
5,008,400
15,000,000
-
7,750,000
Premium on Bond Issue
-
123,057
Discount on Bond Issue
-
-
(17,869)
Tax Notes Issued
-
-
-
Capital Lease
(104,142)
319,996
-
-
Transfers In
354,150
529,598
583,126
2,275,896
Transfers Out
(1,578,771)
(19,500)
(384,003)
(1,691,163)
Total Other Financing
Sources (Uses)
3,679,637
1 5,953,1 51
199,123
8,316,864
NET CHANGE IN FUND BALANCES $ 1,630,353 $ 12,871 ,003 $ (2,477,650) $ 6,51 8,464
Debt Service as a Percentage of
Noncapital Expenditures 18.2% 15.4% 18.1% 18.5%
TABLE 4
YEAR
2003 2002 2001 2000 1999 1998
$ 6,747,330
$ 5,305,902
$ 4,452,964
$ 4,088,491
$ 3,671,516
$ 3,168,926
941,515
663,682
620,652
731,488
680,316
610,943
944,506
883,126
659,145
626,464
558,904
472,366
646,613
538,831
749,201
444,331
379,584
343,943
2,003,743
45,362
186,382
280,026
-
-
287,865
877.544
368,260
422.700
1,292,198
837,917
1 1.571 ,572
8.314,447
7,036.604
6.593.500
6.582,518
5,434,095
2,554,675
2,735,142
1,792,396
1,558,650
1,307,488
1,067,448
3,530,470
2,963,924
2,561,055
2,212,924
2,061,488
1,853,782
675,687
689,150
627,110
793,700
806,029
408,461
156,927
120,530
175,048
155,814
142,287
127,065
415,834
328,404
270,437
259,848
274,865
260,004
-
-
-
-
279,058
268,770
-
-
98,683
83,273
-
-
4,767,695
4,079,385
1,688,451
1,835,461
4,244,176
673,242
783,000
937,000
257,410
365,820
338,770
179,000
508,166
511,811
280,774
302,111
326,950
255,923
46.272
-
-
-
-
53.943
13,438,726
12,365,346
7,751 ,364
7.567,601
9.781 ,1 1 1
5.147,638
(1,867,154) (4,050,899) (714,760) (974,101) (3,198,593) 286,457
3,360,000
-
4,500,000
-
-
4,930,000
400,000
-
-
-
-
467,502
551,720
388,542
598,405
1,089,936
625,450
(5000)
(31 ,1 56)
-
(218,386)
(686,032)
(469.942)
3.770.802
920.564
4,888,542
380.019
403.904
5.085,508
$ 1,903,648
$(3,130,335)
$ 4,173,782
$ (594,082)
$ (2,794,689)
$ 5,371 ,965
14.9%
17.5%
8.9%
11.7%
12.0%
9.7%
83
FISCAL
YEAR
ENDED
SEPTEMBER 30,
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
CITY OF SCHERTZ, TEXAS
TOTAL WATER AND SEWER CONSUMPTION AND RATES
LAST TEN FISCAL YEARS
TOTAL
WATER & SEWER
CONSUMPTION
$ 4,478,391
4,231,965
3,968,807
3,461,747
3,641,105
2,610,325
2,237,708
1,686,290
1,448,011
1 ,481 ,620
WATER &
SEWER
BASE RATE
TABLE 5
WATER & SEWER
RATE PER
1,000 GALLONS
7.70 $
7.70
7.70
7.70
7.70
7.70
7.70
3.70
3.70
3.70
1.10
1.10
1.10
1.10
1.10
1.10
1.10
1.25
1.25
1.25
WE
TAXPAYERS
CITY OF SCHERTZ, TEXAS
PRINCIPAL WATER AND SEWER CONSUMERS
TOTAL
WATER
CONSUMPTION
(IN HUNDREDS)
TABLE 6
2007
PERCENTAGE
OF
TOTAL CITY
WATER
RANK CONSUMPTION
Wal -Mart Supercenters
10,786,800
1
0.09%
City of Schertz Ballfields
9,692,300
2
0.08
Prologis Trust
8,815,000
3
0.08
Beck Readymix
8,568,700
4
0.07
Landscape of Texas
6,624,700
5
0.06
Pecan Grove Investments
5,753,000
6
0.05
Legacy Oaks Apartments
5,652,500
7
0.05
Cibolo Creek Municipal Authority
5,327,400
8
0.05
Manco Structures
4,337,100
9
0.04
Sycamore Creek Apartments
4,061,000
10
0.04
TOTAL
69,618, 500
0.60%
Total City Water Consumption
11,535,927,000
CITY OF SCHERTZ, TEXAS
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS TABLE 7
FISCAL YEAR
ENDED
SEPTEMBER 30,
TOTAL TAXABLE
ASSESSED VALUE
TOTAL DIRECT
TAX RATE
2007
$ 1,423,205,878
0.4090%
2006
1,397,297,729
0.3977
2005
1 ,292,1 56,383
0.3760
2004
1,139,992,157
0.3825
2003
1,024,412,713
0.3825
2002
827,142,321
0.3825
2001
731,305,433
0.3405
2000
636,1 57,284
0.3455
1999
534,039,183
0.3544
1998
450,199,212
0.3554
Source: Guadalupe County Tax Office
NOTES: Property in the City of Schertz is reassessed every year at estimated actual value. For
this reason, assessed value is equal to estimated actual value. Tax rates are per
$100 of assessed value.
:.
Source: Guadalupe County Tax Office
NOTE: Overlapping rates are those of local and county governments that apply within the
City of Schertz. Not all overlapping rates apply to all City of Schertz property
owners.
M
CITY OF SCHERTZ,
TEXAS
DIRECT AND OVERLAPPING PROPERTY TAX RATES
LAST TEN FISCAL YEARS
TABLE 8
CITY DIRECT RATES
OVERLAPPING RATES
SCH ERTZ-
CIBOLO-
FISCAL
BASIC
DEBT
UNIVERSAL
GUADALUPE
COUNTY
YEAR
RATE
SERVICE
CITY ISD
COUNTY
ROAD
2007
0.2805 %
0.1512 %
1.6100%
0.3481 %
0.0500
2006
0.0030
0.0972
1.7200
0.3481
0.0500
2005
0.2888
0.0872
1.7200
0.3531
0.0500
2004
0.2946
0.0879
1.7800
0.3654
0.0477
2003
0.3091
0.0734
1.7300
0.3668
0.0463
2002
0.3208
0.0617
1.7100
0.3499
0.0420
2001
0.3147
0.0258
1.6267
0.3193
0.0630
2000
0.3151
0.0304
1.4945
0.3417
0.0582
1999
0.3169
0.0375
1.6923
0.3192
0.0600
1998
0.3049
0.0505
1.4299
0.3040
0.0730
Source: Guadalupe County Tax Office
NOTE: Overlapping rates are those of local and county governments that apply within the
City of Schertz. Not all overlapping rates apply to all City of Schertz property
owners.
M
CITY OF SCHERTZ, TEXAS
PRINCIPAL PROPERTY TAXPAYERS
CURRENT YEAR AND NINE YEARS AGO
TAXPAYERS
San Antonio MTA, LP
Republic Beverage Co.
Sprint Spectrum, LP
H.E.B. Grocery Co.
Wal -Mart Real Estate Business Trust
EM Limited Partnership
Eye Care Centers of America, Inc.
Schertz Holdings, Ltd
Wal -Mart Stores, Texas, LP
CMH Parks, Inc.
Eric W. White
PSP Industries
Negley Paint Co., Inc.
American Freightways Corp.
Sycamore Creek Partners
Garden Ridge Pottery
Guadalupe Valley Electric Co -Op
Riedel Family Partners, Ltd.
Southwestern Bell Telephone Co.
TOTALS
TOTAL TAXABLE ASSESSED VALUE
TABLE 9
2007
1997
PERCENTAGE
PERCENTAGE
OF
OF
TOTAL CITY
TOTAL CITY
TAXABLE
TAXABLE
TAXABLE
TAXABLE
ASSESSED
ASSESSED
ASSESSED
ASSESSED
VALUE
RANK
VALUE
VALUE
RANK
VALUE
$ 41,958,330
1
3.00%
$ -
26,757,240
2
1.91
-
17,217,890
3
1.23
-
-
13,850,898
4
0.99
-
-
13,846,702
5
0.99
-
-
12,653,669
6
0.91
-
-
10,971,126
7
0.79
-
-
8,839,629
8
1.63
-
-
8,615,430
9
0.62
-
-
8,591,548
10
0.61
2,289,493
9
0.60
-
-
5,720,267
1
1.51
4,597,492
2
1.21
3,599,250
3
0.95
-
3,424,614
4
0.90
3,359,231
5
0.89
3,059,174
6
0.81
-
2,453,730
7
0.65
-
2,403,202
8
0.63
-
-
2.023.510
10
0.53
$ 163,302,462
11.69%
$ 32,929,963
8.69%
$1,397,297,729
Source: Guadalupe County Tax Office
$ 378,784,051
I
FISCAL
YEAR TAXES LEVIED
ENDED FOR THE
SEPTEMBER 30, FISCAL YEAR
CITY OF SCHERTZ, TEXAS
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
TABLE 10
COLLECTED WITHIN THE
FISCAL YEAR OF THE LEVY COLLECTIONS TOTAL COLLECTIONS TO DATE
PERCENTAGE IN SUBSEQUENT PERCENTAGE
AMOUNT OF LEVY YEARS AMOUNT OF LEVY
2007
$ 7,048,818
$ 6,957,827
98.71%
n/a
$ 7,023,297
99.64%
2006
5,645,611
5,576,559
98.78
$65,470
5,576,188
98.77
2005
4,858,508
4,796,062
98.71
38,684
4,834,746
99.51
2004
4,360,470
4,252,349
97.52
81,521
4,333,870
99.39
2003
3,91 8,379
3,881,204
99.05
27,492
3,908,696
99.75
2002
3,163,819.
3,107,209
98.21
44,396
3,151,605
99.61
2001
2,490,095
2,459,900
98.79
26,354
2,486,254
99.85
2000
2,198,381
2,153,542
97.96
41,888
2,195,430
99.87
1999
1,892,640
1,869,557
98.78
17,095
1,886,652
99.68
1998
1,600,008
1,565,295
97.83
32,574
1,597,869
99.87
Source: Guadalupe County Tax Office
0
CITY OF SCHERTZ, TEXAS
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
TABLE 1 1
PERCENTAGE
GOVERNMENTAL ACTIVITIES
a
OF
BUSINESS -TYPE ACTIVITIES
PERSONAL
a
GOVERNMENT
GENERAL
CERTIFICATES
$ 52,102,854
5.88%
$ 1,705
PUBLIC
1.56%
CERTIFICATES
GENERAL
1.35%
FISCAL
OBLIGATION
OF
TAX
CAPITAL
REVENUE
FACILITY
REFUNDING
OF
OBLIGATION
NOTE
YEAR
BONDS b
OBLIAGATIONS
NOTES
LEASE
BONDS
LOAN
BONDS
OBLIGATION
BONDS
PAYABLE
2007
$ 21,950,000
$ 13,900,200
$
$ 215,854
$ 6,645,000
$ 21,000
$
$ 7,370,800
$ 2,000,000
$
2006
18,740,000
13,560,000
319,996
7,055,000
28,000
-
-
2005
4,045,000
14,250,000
160,000
-
7,445,000
34,000
2004
4,456,000
14,785,000
450,000
4,625,000
40,000
64,000
2003
4,844,000
7,600,000
730,000
4,990,000
46,000
126,000
-
2002
5,222,000
4,375,000
1,000,000
5,275,000
52,000
193,000
60,000
2001
5,129,000
4,585,000
-
5,550,000
57,000
211,000
120,000
34,564
2000
5,321,410
150,000
785,000
62,000
543,590
130,000
66,670
1999
5,622,230
215,000
820,000
67,000
741,770
140,000
96,491
1998
5,901,000
275,000
900,000
72,000
896,000
150,000
124,191
TABLE 1 1
NOTE: a Details regarding the City's outstanding debt can be found in Note 7 to the current financial statements.
b The City issued $15,000,000 of new general obligation bonds in 2007.
c See Table 4 for personal income and population data for the City. These ratios are calculated using personal income and
population for the prior calendar year.
PERCENTAGE
TOTAL
OF
PRIMARY
PERSONAL
PER
GOVERNMENT
INCOME c
CAPITA c
$ 52,102,854
5.88%
$ 1,705
39,702,996
1.56%
1,262
25,934,000
1.35%
968
24,420,000
2.43%
923
18,336,000
2.01%
764
16,177,000
1.93%
703
15,686,564
1.95%
713
7,058,670
1.19%
378
7,702,491
2.59%
428
8,318,191
2.88%
475
NOTE: a Details regarding the City's outstanding debt can be found in Note 7 to the current financial statements.
b The City issued $15,000,000 of new general obligation bonds in 2007.
c See Table 4 for personal income and population data for the City. These ratios are calculated using personal income and
population for the prior calendar year.
CITY OF SCHERTZ, TEXAS
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
LAST TEN FISCAL YEARS
GENERAL BONDED DEBT OUSTANDING
GENERAL CERTIFICATES
FISCAL OBLIGATION OF
YEAR BONDS OBLIGATION
2007
$ 23,950,000
2006
18,740,000
2005
4,045,000
2004
4,456,000
2003
4,844,000
2002
5,222,000
2001
5,129,000
2000
5,321,410
1999
5,622,230
1998
5,901,000
$ 21,271,000
13,560,000
14,250,000
14,785,000
7,600,000
4,375,000
4,585,000
150,000
215,000
275,000
TABLE 12
PER
CAPITA
$ 1,423
1,027
689
744
549
461
442
293
324
353
NOTE: Details regarding the City's outstanding debt can be found in Note 7 to the current
financial statements. See Table 5 for the City's property tax value data. City
population data can be found in Table 14.
91
PERCENTAGE OF
ACTUAL TAXABLE
TAX
VALUE OF
NOTES
TOTAL
PROPERTY
$ -
$ 45,221,000
3.18%
-
32,300,000
2.31
160,000
1 8,45 5,000
1.43
450,000
19,691 ,000
1.73
730,000
13,174,000
1.29
1,000,000
10,597,000
1.28
-
9,714,000
1.33
-
5,471,410
0.86
-
5,837,230
1.09
-
6,176,000
1.37
PER
CAPITA
$ 1,423
1,027
689
744
549
461
442
293
324
353
NOTE: Details regarding the City's outstanding debt can be found in Note 7 to the current
financial statements. See Table 5 for the City's property tax value data. City
population data can be found in Table 14.
91
CITY OF SCHERTZ, TEXAS
DIRECT AND OVERLAPPING GOVERNMENTAL
AS OF SEPTEMBER 30, 2007
DEBT
GOVERNMENTAL UNIT OUTSTANDING
Debt Repaid with Property Taxes
ACTIVITIES DEBT
TABLE 13
ESTI MATED
ESTIMATED SHARE OF
PERCENTAGE OVERLAPPING
APPLICABLE DEBT
Alamo CCD
$ 555,042,709
0.04%
$ 222,017
Bexar Co.
162,690,014
0.10%
162,590
Comal Co.
23,947,279
3.26%
780,681
ComalISD
338,988,439
2.68%
9,084,890
Guadalupe Co.
11,610,000
28.04%
3,255,444
San Antonio RA
49,175,000
0.10%
49,175
Schertz - Cibolo- Universal
288,463,383
1.57%
4.528,875
Subtotal, Overlapping Debt
18,083,672
City Governmental Activities Direct Debt
37,771,301
TOTAL NET OVERLAPPING DEBT
$ 55,854,973
NOTES: The overlapping debt was received from the Municipal Advisory Council of Texas.
Details regarding the City's outstanding debt can be found in Note 7 to the current
financial statements.
92
Assessed Value, 2006 Tax Roll
Debt Limit - Texas statues do not provide a legal debt limit for cities
however, through accepted practice a practical "economic"
debt limit is considered to be 10% of the assessed value
Amount of Applicable Debt:
Bonded Debt - General Obligation Bonds
Less Net Assets in Debt Service Fund
DEBT MARGIN
Total Net Debt as
a Percentage of
Debt Margin
Assessed Value
Debt Margin
Total Applicable Debt, net
Total Debt Margin
Total Net Debt as
a Percentage of
Debt Margin
tip
W
CITY OF SCHERTZ, TEXAS
DEBT MARGIN INFORMATION
LAST TEN FISCAL YEARS
FISCAL YEAR
TABLE 14
$ 1,423,205,878
142,320,588
$ 23,950,000
(461.500) 23.488.500
118,832,088
19.77%
2006
2005
2004
2003
2002
2001
2000
1999
1998
$1,397,297,729
$1,292,156,383
$ 1,139,992,157
$1,024,412,713
$827,142,321
$731,305,433
$636,157,284
$534,039,183
$ 450,199,212
$ 139,729,773
$ 129,215,638
$ 113,999,216
$ 102,441,271
$ 82,714,232
$ 73,130,543
$ 63,615,728
$ 53,403,918
$ 45,019,921
18,392,261
3.781.530
4.208.707
4.520.834
4.922.926
4.972.800
5.216.391
5.183.556
5.405.013
$ 121,337,512
$ 125,434,108
$ 109,790,509
$ 97,920,437
$ 77,791,306
$ 68,157,743
$ 58,399,337
$ 48,220,362
$ 39,614,908
13.16% 2.93% 3.69% 4.41% 5.95% 6.80% 8.20% 9.71% 12.01%
CITY OF SCHERTZ, TEXAS
PLEDGED REVENUE COVERAGE
LAST TEN FISCAL YEARS
TABLE 15
NOTE: Details regarding the City's outstanding debt can be found in Note 7 to the current financial
statements. Operating expenses do not include depreciation, interest, amortization or joint
venture expenses.
94
WATER REVENUE BONDS
UTILITY
LESS:
NET
DEBT SERVICE
FISCAL
SERVICE
OPERATING
AVAILABLE
YEAR
CHARGES
EXPENSES
REVENUE
PRINCIPAL
INTEREST
COVERAGE
2007
$13,476,288
$ 7,896,319
$ 5,579,969
$ 645,800
$ 501,397
4.86%
2006
11,289,876
6,955,000
4,334,876
390,000
354,965
5.82
2005
9,381,042
6,136,390
3,244,652
380,000
213,290
5.47
2004
7,583,136
5,653,184
1,929,952
365,000
226,795
3.26
2003
8,228,571
5,359,309
2,869,262
285,000
236,913
5.50
2002
4,663,584
3,061,327
1,602,257
275,000
246,263
3.07
2001
4,260,109
3,115,427
1,144,682
35,000
55,750
12.61
2000
3,958,054
2,717,774
1,240,280
35,000
58,375
13.28
1999
3,250,589
2,145,249
1,105,340
80,000
63,588
7.70
1998
3,316,900
1,71 1,388
1,605,512
55,000
67,013
13.16
NOTE: Details regarding the City's outstanding debt can be found in Note 7 to the current financial
statements. Operating expenses do not include depreciation, interest, amortization or joint
venture expenses.
94
CITY OF SCHERTZ, TEXAS
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
PER
PERSONAL
YEAR
POPULATION
INCOME
2007
31,788
$ 885,836,196
2006
31,452
2,543,051 ,460
2005
26,780
1,926,713,880
2004
26,463
1,005,594,000
2003
24,000
912,000,000
2002
23,000
838,994,000
2001
22,000
802,516,000
2000
18,694
593,870,992
1999
18,000
297,000,000
1998
17,500
288,750,000
PER
EDUCATION
CAPITA
LEVEL IN
PERSONAL
MEDIAN
YEARS OF
SCHOOL
INCOME
AGE
SCHOOLING
ENROLLMENT
$ 27,867
36.3
14.0
9,470
80,855
36.1
18.0
8,380
71,946
35.1
15.9
7,712
38,000
32.7
15.0
7,257
38,000
35.1
14.6
7,245
36,478
35.1
14.6
6,440
36,478
35.1
14.6
6,440
31,768
35.1
14.6
6,186
16,500
32.6
14.6
5,777
16,500
32.6
14.6
5,951
TABLE 16
UNEMPLOYMENT
RATE
4.0%
4.8
4.4
3.6
4.1
2.4
2.4
2.4
3.9
3.9
Sources: Population, personal income, median age and education level information provided by City
Economic Development Corporation. School enrollment provided by Schertz- Cibolo-
Universal City Independent School District. Unemployment data provided by Texas
Workforce Commission.
95
CITY OF SCHERTZ, TEXAS
TOP TEN EMPLOYERS
CURRENT YEAR
EMPLOYER
Schertz /Cibolo /UC ISD
Wal -Mart Stores
City of Schertz
H.E.B. Grocery Co.
Valero Energy
Federal Express Freight
Metro Ambulance LP
Manco
Republic Beverage
Lowe's
Source: City Economic Development Corporation
TABLE 17
2007
PERCENTAGE
OF TOTAL CITY
EMPLOYEES EMPLOYMENT
Note: Nine year principal employer history is not available.
1,300
420
232
220
167
165
110
100
100
83
f
0.09476%
0.03061
0.01691
0.01604
0.01217
0.01203
0.00802
0.00729
0.00729
0.00605
CITY OF SCHERTZ, TEXAS
FULL -TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION
LAST TEN FISCAL YEARS TABLE 18
FULL -TIME EQUIVALENT EMPLOYEES AS OF SEPTEMBER 30
2007 2006 2005 2004 2003 2002
Function /Proaram
General Government
City Manager
4
3
4
4
3
4
Court Support
4
4
4
4
3
3
Municipal Court
5
3.5
2
2
2
2
Planning and Zoning
4
3
2
2
2
3
Facility Manintenance
9
6.5
6
6
5
5
City Sercretary
2
2
2
2
2
2
Public Information
2
1
1
1
1
1
Records Management
2
2
1.5
1
-
-
information Technology
3
3
2
2
2
1
Human Resources
2
2
2
2
2
1
Finance
5
5
5
5
4
4
Fleet Service
3
3
3
2
2
2
Purchasing
1
0
0
0
0
0
Engineer
1
0
0
0
0
0
Public Safety
Police
66
62
53.5
50.5
46.5
44.5
Fire
32
32
31
30
24
24
Inspections
8
6
6
6
6
5
Health
Animal Control
5
5
5
5
5.5
5
Parks and Culture
Parks
9
7
7
6
5
4
Pools
12.5
12.5
15
14.5
8
7.5
Library
9.5
9.5
8.5
8.5
7
7.5
Public Environment
Streets
11
11
12
13
9
9
Public Works
Public Works
6
6
6
6
6
6
Business Office
9
10
9
11
12
11
Water and Sewer
19
17
15
15
14
11
EMS
33.5
32.5
32
28
27.5
27
Economic Development
3
3
2
2
1
2
TOTAL
270.5
251.5
236.5
228.5
199.5
189.5
Source: City Adopted Budgets
NOTES: Less than 10 years of data is available. The information will be presented on a
prospective basis.
97
CITY OF SCHERTZ, TEXAS
OPERATING INDICATORS BY FUNCTION /PROGRAM
LAST TEN FISCAL YEARS TABLE 19
Water
New connections
91
532
425
425
FISCAL YEAR
1,241
545
N/A
Water main breaks
29
46
2007
2006
2005
2004
2003
2002
2001
2000
1999
1996
Function /Program
10,747,349
10,177,465
10,977,327
11,097,642
Daily average consumption
General Government
(thousands of gallons)
31,606
37,007
30,639
28,816
29,854
28,271
30,492
Building permits issued
5,811
9,948
3,434
3,055
7,119
2,812
2,754
3,716
3,690
3,767
Police
10,540
6,939
6,869
6,757
5,616
6,375
5,562
Total customers
10,598
10,118
CFS
25,479
16,642
12,770
11,875
11,089
10,743
N/A
N/A
N/A
N/A
Arrests
608
526
729
631
670
666
N/A
N/A
N/A
N/A
Traffic Violations
13,461
10,487
11,157
9,652
9,157
8,863
N/A
N/A
N/A
N/A
Accidents
1,484
1,192
1,169
1,127
875
857
N/A
N/A
N/A
N/A
Fire
Number of rescue /other responses
1,459
1,216
1,131
1,082
929
1,058
N/A
N/A
N/A
N/A
Number of fire responses
103
129
128
90
89
76
N/A
N/A
N/A
N/A
Number of inspections
302
356
331
301
254
202
N/A
N/A
N/A
N/A
Number of training classes conducted
694
136
136
213
186
87
N/A
N/A
N/A
N/A
Parks
Facility reservations
516
416
294
333
300
178
174
205
N/A
N/A
Libra
Annual circulation
292,909
276,873
257,765
238,602
225,573
183,467
131,293
123,897
120,602
120,020
Library visits
179,630
181,603
175,976
171,811
162,263
142,258
99,515
98,541
94,616
90,571
Library program attendance
6,680
5,064
5,254
5,170
4,328
3,607
2,050
4,946
3,385
2,697
Registered users
19,595
19,342
17,101
14,492
12,779
9,320
5,370
11,471
10,115
8,694
Water
New connections
91
532
425
425
439
1,241
545
N/A
Water main breaks
29
46
39
26
18
21
35
54
Total consumption (thousands of gallons)
11,535,927
13,322,380
11,030,621
10,373,621
10,747,349
10,177,465
10,977,327
11,097,642
Daily average consumption
(thousands of gallons)
31,606
37,007
30,639
28,816
29,854
28,271
30,492
30,827
Peak dally consumption
(thousands of gallons)
5;379,000
10,540
6,939
6,869
6,757
5,616
6,375
5,562
Total customers
10,598
10,118
9,673
9,389
8,045
7,311
7,103
6,837
Average use per connection
1,089
7,060
5,957
6,329
3,565
4,682
8,942
9,606
Sewer
Total customers
9,391
8,990
8,664
7,887
7,261
6,511
6,185
5,814
Source: Various City Departments
NOTE: Indicators are not available for the police or EMS function.
N/A N/A
51 59
N/A N/A
N/A N/A
N/A N/A
7,351 6,914
4,951 4,696
6,226 5,767
ORN
CITY OF SCHERTZ, TEXAS
CAPITAL ASSET STATISTICS BY FUNCTION /PROGRAM
LAST TEN FISCAL YEARS TABLE 20
FISCAL YEAR
2007 2006 2005 2004 2003 2002 2001 2000 1999 1998
Function /Program
Police
Stations
1
1
1
1
1
1
1
1
1
Patrol units
33
34
27
26
21
11
8
5
3
1
Fire
Stations
2
2
2
1
1
1
1
1
1
1
Training facility
1
1
1
1
1
1
1
1
1
Fire vehicles
12
12
11
1 1
11
9
7
6
5
5
Streets
Streets, paved (miles)
107
102
102
102
102
100
100
97
95
95
Streets, unpaved (miles)
9
9
9
9
9
9
7
7
7
7
Sidewalks (miles)
17
17
17
17
17
17
17
17
17
17
Parks and Recreation
Parks
7
7
7
7
7
7
7
7
7
7
Playground
20
20
20
20
20
117
117
65
65
65
Swimming pools
1
1
1
1
1
-
-
-
_
_
Baseball /softball diamonds
12
12
12
12
12
8
8
5
5
5
Community centers
1
1
1
1
1
1
1
1
1
1
Animal Control
Control vehicle
3
2
2
2
2
1
1
-
-
-
Library
Facility
1
1
1
1
1
1
1
1
1
1
Volumes in collection
56,282
52,818
49,289
46,961
41,275
39,062
36,259
37,610 36,891
31,532
Water
Number of reservoirs
1
1
1
-
_
_
_
-
Number of pump stations
2
1
1
1
-
-
-
-
-
-
Water mains (miles)
41
36
30
27
27
22
19
16
12
3
Sewer
Sanitary sewers (miles)
59
54
54
54
54
54
51
48
41
41
Storm sewers (miles)
6
4
4
4
4
4
4
3
2
2
Source: Various City Departments
NOTES: No Capital Asset
indicators are available
for the General Government or EMS function.
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100
4801 NA\'. LOOP 410, SUITE 725
SAN ANTONIO, TEKAS 782241 -5508
210/341-2581
FAX 210/341 -2:588
cpas @twbky.com
Thompson,
Williams,
Biediger,
KasW tor
Young,
L.C.
CERTIFIED PUBLIC .ACCOUNTANTS
MEMBERS AMERICAN INSTITUTE OF
CERTIFIED PUBLIC ACCOUNTANTS
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
The Honorable Mayor and
Members of the City Council
City of Schertz, Texas
We have audited the accompanying financial statements of the business -type activities as of and for the
year ended September 30, 2007, which collectively comprise the City of Schertz, Texas basic financial
statements and have issued our report thereon dated March 31, 2008. We conducted our audit in
accordance with auditing standards generally accepted in the United States of America and the
standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City of Schertz, Texas's internal control over
financial reporting as a basis for designing our auditing procedures for the purpose of expressing our
opinion on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of the City of Schertz, Texas's internal control over financial reporting. Accordingly, we
do not express an opinion on the effectiveness of the City's internal control over financial reporting.
Our considerations of internal control over financial reporting was for the limited purpose described in
the first paragraph of this section and would not necessarily identify all deficiencies in internal control
that might be significant deficiencies or material weaknesses. However, as described below, we
identified certain deficiencies in internal control over financial reporting that we consider to be
significant deficiencies.
A control deficiency exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned function, to prevent or detect
misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of
control deficiencies, that adversely affects the organization's ability to initiate, authorize, record,
process, or report financial data reliably in accordance with generally accepted accounting principles
such that there is more than a remote likelihood that a misstatement of the organization's financial
statements that is more than inconsequential will not be prevented or detected by the organization's
internal control. We consider the deficiencies described in the accompanying schedule of findings and
responses to be significant deficiencies in internal control over financial reporting. See 2007 -1 and
2007 -2 on the Schedule of Findings and Responses.
101
THOMPSON, WILLIAMS, BIEDIGER. KASTOR `cf? YOUNG. L.C.
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102
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS (CONTINUED)
A material weakness is a significant deficiency, or combination of significant deficiencies, that results
in more than a remote likelihood that a material misstatement of the financial statements will not be
prevented or detected by the City's internal control.
Our consideration of the internal control over financial reporting was for the limited purpose described
in the first paragraph of this section and would not necessarily identify all deficiencies in the internal
control that might be significant deficiencies and, accordingly, would not necessarily disclose all
significant deficiencies that are also considered to be material weaknesses. The City of Schertz,
Texas's responses to the findings identified in our audit is described in the accompanying schedule of
findings and responses. We did not audit the City of Schertz, Texas's responses and, accordingly, we
express no opinion on it.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City of Schertz, Texas's financial
statements are free of material misstatement, we performed tests of its compliance with certain
provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have
a direct and material effect on the determination of financial statement amounts. However, providing
an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we
do not express such an opinion. The results of our tests disclosed no instances of noncompliance or
other matters that are required to be reported under Government Auditing Standards.
We noted certain matters that we reported to management of the City of Schertz, Texas in a separate
letter dated March 31, 2008.
The City of Schertz, Texas's response to the findings identified in our audit is described in the
accompanying schedule of findings and responses. We did not audit the City of Schertz, Texas's
responses and, accordingly, we express no opinion on it.
This report is intended solely for the information and use of management and the City Council, and
federal and state awarding agencies and pass- through entities and is not intended to be, and should
not be, used by anyone other than these specified parties.
Certified Public Accountants
San Antonio, Texas
March 31, 2008
103
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104
CITY OF SCHERTZ, TEXAS
SCHEDULE OF FINDINGS AND RESPONSES
SEPTEMBER 31, 2007
REFERENCE NUMBER FINDINGS
2007 -1 Condition Found - The City had not reconciled it's bank
accounts correctly.
Cause - Controls were not being followed.
Effect - The cash balance in the General Fund was not
properly stated and journal entries of $90,681, $8,499, and
$183,350 were proposed and recorded.
Response - Management has identified the problem and will
reconcile the cash accounts correctly each month.
2007 -2 Condition Found - The City had not recorded it's accounts
payable correctly.
Cause - Controls were not being followed
Effect - Costs and Expenses were not recorded in the proper
periods. Audit adjustments were proposed and recorded in
several funds.
Response - Management has identified the problem and
controls have been put into place to record accounts payable
timely.
105
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M.