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CAFR FY 1993-1994COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1994 0 Wit `®q Cix CITY OF SCHERTZ, TEXAS CITY OF SCHERTZ, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 1994 CITY OFFICIALS MAYOR HONORABLE HAROLD D. BALDWIN CITY COUNCIL KENNETH GREENWALD MAYOR PRO -TEM (May, 1993 to October, 1993) MARY MARSH BARBARA STANHOPE JOE POTEMPA MAYOR PRO -TEM (November, 1993 to November, 1994) CHARLES MCDONALD CITY MANAGER KERRY R. SWEATT INDEPENDENT AUDITORS Thompson, Williams, Biediger, Kastor & Young, L.C. San Antonio, Texas OFFICIALS ISSUING REPORT Kerry R. Sweatt City Manager Debra Kline Finance Director i C O N T E N T S INTRODUCTORY SECTION PAGE NUMBER Letter of Transmittal viii Organization Chart xv GFOA Certificate of Achievement Zvi FINANCIAL SECTION Independent Auditor's Report 3 General Purpose Financial Statements Combined Balance Sheet - All Fund Types and Account Groups 8 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types 12 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - General and Debt Service Fund Type 15 Combined Statement of Revenues, Expenses, and Changes in Retained Earnings - All Proprietary Fund Types 16 Combined Statement of Cash Flows - All Proprietary Fund Types 17 Notes to Financial Statements 19 Combining, Individual Fund and Account Group Statements and Schedules General Fund Comparative Balance Sheets 41 Comparative Schedules of Revenues, Expenditures, and Changes in Fund Balances (GAAP Basis) - Budget and Actual 42 Schedule of Revenues Compared to Budget 43 Schedule of Expenditures Compared to Budget (GAAP Basis) 44 ii C O N T E N T S PAGE TABLE NUMBER Special Revenue Fund Combining Balance Sheet 46 Combining Statement of Revenue, Expenditures and Changes in Fund Balances 47 Debt Service Fund Comparative Balance Sheets 50 Comparative Statements of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual 51 Capital Projects Funds Combining Balance Sheet 54 Combining Statements of Revenue, Expenditures, and Changes in Fund Balance 55 Enterprise Funds Combining Balance Sheet 58 Combining Statement of Revenues, Expenses, and Changes in Retained Earnings 60 Combining Statement of Cash Flows - All Proprietary Fund Types 61 General Fixed Assets Account Group Schedules of General Fixed Assets - By Source 65 Schedules of General Fixed Assets - By Function and Activity 66 STATISTICAL INFORMATION General Governmental Expenditures by Function 1 70 General Government Revenues by Source 2 71 Property Tax Levies and Collections 3 72 Assessed and Estimated Actual Value of Property 4 74 iii C O N T E N T S Property Tax Rates - Direct and Overlapping Governments Ratio of Net General Obligation Bonded Debt to Assessed Value and Net General Bonded Debt Per Capita Computation of Direct and Overlapping Debt Legal Debt Margin Ratio of Annual Debt Service Expenditures for General Obligation Bonded Debt to Total General Expenditures - Last Ten Fiscal Years Water and Sewer Fund Revenue Bond Coverage Waterworks and Sewer System Fund Revenue Bond Requirements and Restricted Funds Demographic Statistics - Last Ten Fiscal Years Property Value, Construction, and Bank Deposits - Last Ten Fiscal Years Principal Taxpayers Miscellaneous Statistics SINGLE AUDIT REPORTS Independent Auditor's Report on Schedule of Federal Financial Assistance Schedule of Federal Financial Assistance Notes to Schedule of Federal Financial Assistance Independent Auditor's Report on Internal Control Structure Based on an Audit of General Purpose Financial Statements Performed in Accordance with Government Auditing Standards Independent Auditor's Report on Compliance Based on an Audit of General Purpose Financial Statements Performed in Accordance with Government Auditing Standards iv PAGE TABLE NUMBER 5 75 6 76 7 77 8 78 9 79 10 80 11 82 12 83 13 84 14 86 15 87 91 92 94 95 99 C O N T E N T S PAGE TABLE NUMBER Independent Auditor's Report on the City's Internal Control Structure Used in Administering Federal Financial Assistance Programs 101 Independent Auditor's Report on Compliance with the General Requirements Applicable to Federal Financial Assistance Programs 107 Independent Auditor's Report on Compliance with Specific Requirements Applicable to Nonmajor Federal Financial Assistance Program Transactions 109 v (This Page intentionally Left Blank) Vi INTRODUCTORY SECTION vii 1400 SCHERTZ PARKWAY P. O. DRAWER I SCHERTZ, TEXAS 78154 -0890 AC (210) 658 -3510 FAX (210) 659 -3204 Febxuary 20, 1995 To the Citizens of the City of Schertz, Texas KERRY R. SWEATT QTY MANAGER The comprehensive annual financial report (CAFR). of the city of Schertz, Texas, (The City) for the year ending September 30, 1994 is submitted herewith. Responsibility for both the accuracy of the presentation including all disclosures rests with the City. The data, as presented, is accurate to the best of our ability in all material aspects. The report is presented in a manner . designed to set forth the financial position of the City and a review of various funds. we have attempted to provide all disclosures necessary to enable the reader to gain maximum understanding of the City's financial activity. The accompanying CAFR is presented in the following three (3) sections: 1. Introduction - Includes this letter of transmittal, Table of Organization, comments regarding economic conditions and outlook, major occurrences of fiscal year 1993 -94, and major initiatives for fiscal year 1994 -95. 2. Financial - This section consists of: The Independent Auditors' Report, General Purpose Financial Statements including combined balance sheets and combined statements of revenue and expenditures and changes in fund balance, notes to financial statements, and individual fund statements and account group with supplemental statements. Within information contained in this section is a review of the accounting system, and controls and includes commentary thereto. 3.. Statistical - This section includes selected financial and demographic information, generally presented on a multi -year basis. 4. Single Audit Reports This report includes all funds and account groups of the City of Schertz. The City provides a full range, of services including: police, emergency medical transportation, and fire protection; water and sewer services; waste collection; code enforcement; comprehensive planning; street maintenance and recreational activities as well as economic development efforts. while the Schertz Public Library is an operating department of City government, the Library Board serves as an advisory board and maintains a small amount of funds, derived from private sources, as a means to fund specific improvements /additions to the library outside viii 11 I U I 11 [] U IJ City resources. The Schertz Development Foundation is a nonprofit corporation organized and operated for charitable purposes, including, but not limited to, assisting the City of Schertz, Texas, develop and implement economic viability to the City. The operations of the Development Foundation have been blended into the ' City's CAFR. The Schertz Volunteer Fire Department Board does not meet the criteria for inclusion in the reporting entity, and accordingly, is excluded from this report. ECONOMIC CONDITION AND OUTLOOK ' The City is located near the center of the San Antonio standard statistical metropolitan area which continues to rank as one of the highest tourist attraction areas in the Southwest. The economic condition and outlook of the area has improved substantially over the last year and signs of recovery appear in a number ' of areas. While housing starts indicated by 92 single family residential permits issued this year through September are lower as compared to 245 for the comparable period of 1993; and total permit values of $144,238,582 (commercial and residential) as compared to $25,705,848 for 1993 indicate substantial capital investment in the next year. Over 1,450 new single family lots recently master planned clearly indicate major improvement in our economy and strength of the local housing market. CURRENT YEAR PROJECTS ' Recent new developments as well as enhancement of existing businesses shows a renewed enthusiasm, and the attitude that "nothing breeds success like success" seems to effect relocation and growth activity for our area. A positive outlook ' is shared by all involved in the community's Economic Development Commission activities. The City is currently working with several substantial prospects to relocate to the area. We continue to receive an ever larger number of inquiries which is another positive economic sign. one of the major strengths of the City ' is an abundance of land available for development along the San Antonio /Austin corridor of IH -35 and similarly available land for development along the corridor between Houston /San Antonio of IH -10. MAJOR EVENTS ' The major events for fiscal year 1993 -94 can be categorized into three major areas. The first is housing construction and master planning. The City continues to grow to a point where very few platted residential lots were available at mid- year. By the end of the fiscal year over 1,079 additional residential lots had t been master planned. Greenshire Unit II was completed, Dove Meadows Unit II began construction, and Gxeenshire Unit III began construction. We continue to see a strong trend toward residential construction as RAYCO homes has purchased property ' along Schertz Parkway and is expected to begin construction in the spring of 1995. Finally, we have seen a significant interest in multi - family housing over the last year. Several are in preliminary stages. ' Substantial increase in commercial construction has also occurred. Technos Corporation has completed construction on a $500,000 building on FM 3009, and opened for business in April, 1994. American Freightways broke ground on a 3.50 ' million dollar facility, expected to be completed in May of 1995. Pro -Tech Manufacturing also broke ground on a new facility in September. Wendy's opened on FM 3009 as well as several smaller businesses in various locations throughout the ' City. ix Public Capital Projects - Several capital projects got underway this fiscal year. The first was a major project in the Mobile Villa subdivision. The project included installation of a new sanitary sewer system, replacement of the water system, and reconstruction of the streets throughout the subdivision. This project was funded in part by a CDBG grant from Bexar County, the balance by city bonds. A major part of this project was the extension of sewer service across IH -35, which will end up servicing a much larger area than Mobile Villa itself. We also received $148,000 in CDBG funds to begin a major ADA project of curb depression, and an upgrade of restrooms in the city park to meet ADA standards. Several major streets in the city were repaved and in some cases reconstructed. The repaving projects included parts of Schertz Parkway, Main Street, and oak Street. oak Street required major work to improve drainage. Other street work included complete reconstruction of Pfeil Road. The City completed a water system looping project on Schertz Parkway and IH -35 and major utility system adjustments on both FM 78 and FM 3009 due to roadway construction. Several other capital additions of importance were the purchase of an emergency generator for the Municipal Complex, a new ambulance unit for SAFES, and continuation of the Police Replacement Vehicle Program. The public works building was improved by redesigning office and work spaces. Finally, installation was completed on a project to fence the softball fields at the city park. MAJOR INITIATIVES During the coming year we believe the City will benefit from the generally positive outlook. Renewed interest and emphasis in community development in the form of revisions to the City's comprehensive plan further enhance that sense of optimism and tend to compliment economic development activities. FINANCIAL INFORMATION The City's accounting records for general governmental operations are maintained on a modified accrual basis, with revenues being recognized when they become both measurable and available and expenditures being recognized when the services or goods are received and the liabilities are incurred. Accounting records for the City's utilities and other enterprises are maintained on the accrual basis of accounting. In developing and altering the City's accounting systems, consideration has been given to the adequacy of internal accounting controls. Internal accounting controls have been designed to provide reasonable assurance regarding: * The safeguarding of assets against loss from unauthorized use of disposition and * The reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that: * The cost of control should not exceed the benefits likely to be derived ' and, x ' U L * The evaluation of costs and benefits required estimates and judgments by management. All internal control evaluations occur within the above framework. The City's internal accounting controls adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions. Budgetary control is maintained by the use of purchase order procedures that require encumbrance of the estimated purchase amounts prior to the release of purchase orders to vendors. open encumbrances, if any, are reported as reservations of fund balance at September 30, 1994. General Governmental Functions - Revenues which include general, special revenue, debt service, and capital projects for general governmental function totaled $3,222,693 in 1994, an increase of 8.70% from 1993. Taxes produced 65.50% of general revenues compared to 63.90% last year. The amount of revenues from various sources and the increase /decrease from last year are shown in the following tabulation: PERCENT INCREASE OF (DECREASE) AMOUNT TOTAL FROM 1993 Taxes (Property, Sales, Etc.) $2,109,202 65.50% $213,869 Licenses and Permits 145,229 4.50 (28,081) Charges for Services 343,731 10.70 16,297 Fines and Forfeitures 195,964 6.00 (236) Other Revenues 428,567 13.30 55,832 $3,222,693 100.00% $257,681 Expenditures - For general governmental purposes, expenditures totaled $2,943,764, an increase of 2.20% from 1993. Changes in levels of expenditures for major functions of the City over the preceding year are shown in the following tabulation: $2,943,764 100.00% 6$ 4,469 As reflected in the financial statements, general fund revenues including sales tax as well as ad valorem taxes have generally increased. Through cooperative agreements with Guadalupe County, specific intergovernmental payments for services such as library, fire, and SAFES have increased. Other major fluctuations include: an increase in construction permits and related items due xi PERCENT INCREASE OF (DECREASE) FUNCTION AMOUNT TOTAL FROM 1993 General Government $ 744,801 25.30% $ 3,496 Public Safety 978,121 33.20 53,899 Streets and Parks 308,126 10.50 (65,087) Health Services 80,494 2.70 5,053 Recreation 161,095 5.50 23,867 Economic Development 52,476 1.80 15,050 Capital outlay 320,388 10.90 (73,753) Debt Service 298,263 10.10 101,944 $2,943,764 100.00% 6$ 4,469 As reflected in the financial statements, general fund revenues including sales tax as well as ad valorem taxes have generally increased. Through cooperative agreements with Guadalupe County, specific intergovernmental payments for services such as library, fire, and SAFES have increased. Other major fluctuations include: an increase in construction permits and related items due xi to an increase in total construction. General Fund expenditures have increased in a number of areas including overall personnel costs resulting from step increases and related items. We believe overall realignments in budget accounts more correctly reflect actual cost centers by activity and function than in years prior. General obligation bonded debt data for the City of Schertz at the end of 1994 fiscal year was as follows: AMOUNT Net General Obligation Bonded Debt (Principal) $1,132,128 General Obligation Bonds Revenue Bonds RATIO OF DEBT TO ASSESSED VALUE (100%) OF PRESENT DEBT PER MARKET CAPITA .43% $90.57 MOODY'S INVESTORS SERVICE Baa -1 A Property Taxes - Current tax collections are 98.4% of the tax levy. This is the seventeenth consecutive year in which current property tax collections have exceeded 97.0 %. The ratio of total collections (current and delinquent) to the current tax levy was 99.6 %. Allocations of property tax levy by purpose for 1994 and the preceding two fiscal years are as follows (amounts per $100 assessed value): PURPOSE General Fund General Obligation Debt 1994 1993 1992 .3731 .3512 .3185 .0953 .0743 .0704 .4684 .4255 .3889 Cash Management - cash temporarily idle during the year was invested in short - term time deposits. The interest earned on such deposits during the year was $131,107, an increase of $49,477 interest compared to earnings during 1993. This increase was due to additional funds from the 1992 bond issue being available. Bank deposits and certificates of deposit are secured by FDIC insurance and governmental securities pledged by Schertz Bank and Trust and held in safekeeping by Frost Bank. General Fixed Assets - The general fixed assets of the City are those fixed assets used in the performance of general governmental functions and exclude the fixed assets of Enterprise Funds. As of September 30, 1994, the general fixed assets of the City amounted to $10,388,595. This amount represents the original cost, or an estimate of the original cost of the assets. Depreciation of general fixed assets is not recognized in the City's accounting system. Refer to Notes 1 (I) and 5 in the notes to the financial statements. The City is self - insured on physical damage to specific vehicles. In order to provide coverage for this, risk funds are designated in the General Fund with a balance of $45,000 at September 30, 1994. xii ' Water and Sewer System - During the fiscal year ended September 30, 1994, net revenues in the water -sewer system increased substantially with the adoption of an inverted block rate. Comparative data for the past two fiscal years is presented below: 1994 1993 ' Total Operating Revenue _ $1,997,654 $1,617,768 Operating Income (Gross Revenues Less Operating Expenses) 418,820 (159,272) ' Net Revenues (Operating Income Plus Depreciation Less Solid Waste Revenues) 733,759 177,825 Average Annual Debt Requirements 273,227 279,458 ' During the year, $95,000 of revenue bonds, $80,000 in certificates of obligation, $4,000 in Public Facility HUD Bond, and $19,151 of a note payable (New Braunfels Utilities) were retired in the Water and Sewer Fund. Schertz Area Facility for Emergency Services (SAFES) - During the fiscal year ended September 30, 1994, SAFES increased its revenue 20.3% and increased operating ' expensed by 2.1 %. SAFES is fully dependent on income fees generated from services rendered and the contracted cities' support to cover operations costs. This year SAFES had an operating income before depreciation of $127,326. This is net of a charge for future uncollectible accounts of $71,660 that was taken against the operating expenses fox the current year. OTHER INFORMATION Awards - 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 for its comprehensive annual financial report for the fiscal year ended September 30, 1993. The Certificate of Achievement is the highest form of recognition for excellence in state and local government financing reporting. ' In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report, whose contents conform to program standards. Such reports must satisfy both ' generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. The City of Schertz has received a Certificate of Achievement for the last six (6) consecutive years. We believe our current report continues to conform to the Certificate of Achievement program requirements, and we are submitting it to GFOA. ' xiii The City Council has selected the firm of Thompson, Williams, Biediger, Kastor & Young, L. C. of San Antonio, Texas, to perform the independent audit for the fiscal year 1993 -94. We find the background experience and interest of the firm will assure the accomplishment of the audit function in an outstanding manner and will provide educational training opportunities for our staff. Acknowledgements - I want to extend my thanks to the Mayor and members of the City council for their interest and support in planning and conducting the financial operations of the city in an effective and efficient manner. Ms. Debra Kline of our staff and representatives of the audit firm of Thompson, Williams, Biediger, Kastor & Young, L.C. have provided a high degree of expertise and assistance for the preparation of the report and I wish to express my personal thanks and appreciation for their help. Respectively Submitted, Kerr R eatt City Manager DebrA Kline Finance Officer xiv ANK, I 1. Planning Secretary Pt1oil WoWent. I - Director I - Asst. Director I - Secretary I - Clerk I 90—MM 110", 11V I - Supervisor 1 - Supervisor I - Foreman I - Foreman 2 - Worker 11 3 - Servicemen 11 4 - Worker 1 4 - Servicemen I I - PT Pool Mgr. I - Meter Reader 11 2 - PT Shift Chts 12 - Meter Reader I 6 - PT lifeguard FarKwo,0010" I - Foreman I - Worker 11 I - Worker I 1 - Supervisor I -A/C Officer 1 - Shelter Op. 1- Inspector 1 - Asst. Inspector "'i, 1 - Supervisor 1 - Custodian 1 - PT Custodian I - Facilities Repair 1 - Mechanic Services F_ I - Finance Officer 2 - Finance Clerk I - Dpty City Secretary I - PT Finance Clark 1 - Librarian 2 - Clerks 2 - PT Clerks I SOWN I - EMS Director I - Asst. Director 3 - EMT Attendants 4 - PT Attendants FIMPOW I - Chief 3 - Lieutenant 3 - Firemen I - Fire Inspector 9 - PT Fireflghter I - Office Manager/ Data System Adm. 1 - Court Clerk 1 - Clerk Typist 1 - Receptionist 2 - Utility Clerk MOWN I - Tax Collector 1 - Tax Clerk I - Chief I - Lieutenant 3 - Sergeant I - Sgt/Juvehlle Off. I - Warrant Officer 13- Patrolmen I - Office Manager 6 - Dispatcher 2 - PT Crossing Guard 97 - Full Time Employees 36 - Part Time Employees 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, 1993 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. President Y Executive Director xvi u 1 F FINANCIAL SECTION (This Page Intentionally Left Blank) 2 j ® NORTH TOWER 800 N.W. LOOP 410. SUITE 300 SAN ANTONIO, TEXAS 78P188611 1 FAX 2 FAX 2100/34/34 6P588 To the Honorable Mayor and Members of the City Council City of Schertz, Texas Thompson, Williams, Biediger, Kas or Young, L.C. Independent Auditor's Report CERTIFIED PUBLICACCOUNTANTS MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS We have audited the accompanying general purpose financial statements of the City of Schertz, Texas, and the combining financial statements of the City of Schertz, Texas, as of and for the year ended September 30, 1994, as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of the City of Schertz, Texas, as of September 30, 1993 were audited by other auditors whose report dated January 21, 1994, expressed an unqualified opinion on those statements. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States and the provisions of Office of Management and Budget Circular A -128, Audits of State and Local Governments. 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 general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Schertz, Texas, at September 30, 1994, and the results of its operations and cash flows of its proprietary fund types for the year then ended, in conformity with generally accepted accounting principles. Also, in our opinion, the combining financial statements referred to above present fairly, in all material respects, the financial position of each of the individual funds of the City of Schertz, Texas, at September 30, 1994, and the results of operations of such funds and the changes in individual proprietary funds for the year then ended, in conformity with generally accepted accounting principles. R.LARRYTHOMPSON,C.PA. / PAULE. WILLIAMS, CPA. / JAMES L. BIEDIGER,JR., C.P.A. / GTFD KASTOR, C.P.A. / CHARLIE E. YOUNG, JR., C. P. A. JOHNLFIEC.PA, / H. LEE SCHWARTZMAN, C. P. k / F. GLENN CRAVFY, C.P.A. / FRED J. TIMMONS, C.P.A. / JOHN W GREEN, C.P.A. JAMES T McCARTY, C. PA. (RETIRED) 3 THOMPSON, WILLIAMS, BIEDIGER. K.ASTOR `R YOUNG, L.C. (This Page Intentionally Left Blank) 4 Our audit was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole and on the combining financial statements. The accompanying financial information listed as supporting schedules in the table of contents is presented for purposes of additional analysis and is not a required part of the financial statements of the City of Schertz, Texas. The information in these schedules has been subjected to the auditing procedures applied in the audit ' of the general purpose and combining financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements of each of the respective individual funds, taken as a whole. I ' San Antonio, Texas February 15, 1995 [] H 1 1 I I F 5 Public Accountants 'eee (This Page Intentionally Left Blank) 6 ' GENERAL PURPOSE FINANCIAL STATEMENTS I I 1 11 CITY OF SCHERT2, TEXAS COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS SEPTEMBER 30, 1994 ASSETS Cash and Cash Equivalents Investments Receivables (Net of Allowances) Interest Taxes Accounts Due from Other Funds Inventory of Supplies, at Cost Other Receivables Prepaid Costs Restricted Assets Cash and Cash Equivalents Investments Fixed Assets (Net of Accumulated Depreciation) Organization Costs (Net of Accumulated Amortization) Other Debits Amount Available in Debt Service Fund Amount to be Provided fox Retirement of General Long -Term Debt Amount to be Provided for Employee Compensated Absences TOTAL ASSETS GOVERNMENTAL FUND TYPES SPECIAL DEBT CAPITAL GENERAL REVENUE SERVICE PROJECTS $431,772 $13,962 - 29,157 23,494 200,594 1,194,953 - - - 3,013 55,537 - 12,066 - 12,282 - - - 351,531 - - - 14,378 - - - 4,500 - - $894.657 $41,956 $216,541 $1,197,966 (See Accompanying Notes to Financial Statements) 8 ' PROPRIETARY FUND TYPES ACCOUNT GROUPS GENERAL GENERAL TOTALS INTERNAL FIXED LONG -TERM (MEMORANDUM ONLY) ' ENTERPRISE SERVICE ASSETS DEBT 1994 1993 ' $ 34,208 $ 89 $ - $ - $ 483,912 $ 469,964 253,362 1,701,560 1,869,724 t - - - - 3,013 3,013 67,603 81,582 336,672 - - - 348,954 294,118 15,690 1,083 = = 368,304 93,415 ' 118,848 3,085 136,311 103,291 - - - - - 33 4,500 ' 19,851 - - - 19,851 29,021 1,211,302 - - - 1,211,302 712,691 5,543,283 60,993 10,388,595 - 15,992,871 15,263,175 ' 763 - - - 763 811 1 - - - 61,872 61,872 43,965 - -, - 1,907,128 1,907,128 2,058,035 102,248 102,248 83,790 ' $7,533,979 $65,250 $10,388,595 $2,071,248 522,410,192 $21,106,628 (Continued) ' 9 CITY OF SCHERT2, TEXAS COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS SEPTEMBER 30, 1994 GOVERNMENTAL FUND TYPES SPECIAL DEBT CAPITAL GENERAL REVENUE SERVICE PROJECTS LIABILITIES AND FUND EQUITY LIABILITIES Vouchers Payable $ 18,013 $ - $ - $ - Notes Payable 35,333 - - - Compensated Absences Payable Payable from Restricted Assets Deposits - - - - Revenue Bond - - - - Certificates of obligation - - - - Public Facility Loan - - - - Due to Other Funds - 882 142,603 97,660 Deferred Revenue 55,537 - 12,066 - General Obligation Bonds Payable - - - - Revenue Bonds Payable - - - - Certificates of Obligation Payable - - - - Contractual Obligations Bonds Payable - - - - Public Facility Loan - - - - Note Payables (Less Current Maturities) - - - - Accrued Expenses - 2,645 - - Total Liabilities $108,083 3,527 $154,669 S 97,660 FUND EQUITY Contributed Capital $ - - Investment in General Fixed Assets - - - - Retained Earnings Reserved for Revenue Bond Retirement - - - - Reserved for Equipment Replacement - - - - Unreserved - - - - Fund Balances Reserved for Park Improvements 13,293 - - - Reserved for Forfeited Property 3,309 - - - Reserved fox Inventory of Supplies 14,378 _ - Reserved for Debt Service - - 61,872 - Unreserved —� Designated for Economic Development 18,821 - - 1,100,306 Designated for Equipment Replacement 15,144 - - - Designated for Self- Insurance 45,000 - - - Undesignated 675,829 38,429 - Total Fund Equity $785,774 $38,429 $ 61,872 $1,100,306 TOTAL LIABILITIES AND FUND EQUITY $894,657 $41,956 $216,541 $161976966 (See Accompanying Notes to Financial Statements) 10 1 1 t t PROPRIETARY FUND TYPES INTERNAL ENTERPRISE SERVICE ACCOUNT GROUPS GENERAL GENERAL FIXED LONG -TERM ASSETS DEBT TOTALS (MEMORANDUM ONLY) 1994 1993 $ 90,479 $ - $ - $ - $ 108,492 $ 101,088 50,619 - - - 85,952 55,114 23,318 1,470 - 102,248 127,036 107,692 119,539 - - - 119,539 128,170 100,000 - - - 100,000 95,000 85,000 - - - 85,000 30,000 4,000 - - - 4,000 4,000 111,469 15,690 - - 368,304 93,415 - - - - 67,603 81,582 - - - 1,194,000 1,194,000 1,252,000 1,455,000 - - - 1,455,000 1,555,000 980,000 - - 740,000 1,720,000 1,895,000 - - - 35,000 35,000 70,000 84,000 - - - 84,000 88,000 196,017 - - - 196,017 216,636 48,097 - - - 50,742 47,575 $3,347,538 $17,160 $ -0- $2,071,248 $ 5,800,685 $ 5,820,272 $3,766,824 $63,577 $ - $ - $ 3,830,401 $ 3,622,068 - - 10,388,595 - 10,388,595 9,902,939 382,368 - - - 382,368 341,141 100,667 - - - 100,667 123,447 (63,418) (15,487) - - (78,905) (817,082) - - - - 13,293 - - - - - 3,309 - - - - - 14,378 18,605 - - - - 61,872 43,965 1,119,127 18,821 15,144 15,144 - - - 45,000 45,000 714,258 1,972,308 $4,186, $48,090 $10,388,595 $ -0- $16,609,507 $15,286,356 $7,533,979 $65,250 $10,388,595 $2,071,248 $22,410,192 $21,106,628 11 CITY OF SCHERTZ, TEXAS COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED SEPTEMBER 30, 1994 (WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1993) G O V E R N M E N T A L GENERAL SPECIAL REVENUE REVENUES Taxes $2,109,202 $ - Licenses and Permits 145,229 - Charges for Services 343,731 - Fines and Forfeitures 195,964 - Other Sources 133,344 61,687 Total Revenues $2,927,470 $61,687 EXPENDITURES Current General Government $ 744,801 $ - Public Safety 978,121 - Streets and Parks 305,633 2,493 Health 80,494 - Recreation 157,437 3,658 Economic Development 41,887 10,589 Capital Outlay 133,229 - Debt Service Principal Retirement - - Interest and Fiscal Charges - 3,305 Total Expenditures $2,441,602 $20,045 Excess (Deficiency) of Revenues Over (Under) Expenditures $ 485,868 $41,642 OTHER FINANCING SOURCES (USES) Proceeds of Contractual Obligation $ - $ - Operating Transfers In - - operating Transfers (Out) (245,176) - Total Other Financial Sources (Uses) $ (245,176) $ -0- Excess of Revenues and Other Financing Sources Over Expenditures and Other Financing Uses $ 240,692 $41,642 FUND BALANCES (DEFICIT) - OCTOBER 1, 1993 545,082 (3,213) FUND BALANCES - SEPTEMBER 30, 1994 $ 785,774 $38,429 (See Accompanying Notes to Financial Statements) 12 I 1 1 $(294,669) 312,576 $ 312,576 $ 17,907 43,965 $ 61,872 $ 46,088 $ 278,929 $ 85,717 $ - $ - $ 620,000 312,576 384,792 (245,176) (184,792 $ -0- $ 67,400 $ 435,208 $ 46,088 $ 346,329 520,925 1.054.218 1.640,052 1,208,126 $1,100,306 $1,986,381 $1,7299051 13 TOTALS F U N D S (MEMORANDUM ONLY) DEBT SERVICE CAPITAL PROJECTS 1994 1993 $ - $ - $2,109,202 $1,895,333 - - 145,229 173,310 - - 343,731 327,434 - - 195,964 196,200 289 233,247 428,567 372,735 $ 289 $ 233,247 $3,222,693 $2,965,012 $ - $ - $ 744,801 $ 741,305 - - - 978,121 924,222 - - 308,126 373,213 - - 80,494 75,441 - - 161,095 137,228 - - 52,476 37,426 - 187,159 320,388 394,141 133,000 - 133,000 101,660 161,958 - 165,263 94,659 $ 294,958 $ 187,159 $2,943,764 $2,879,295 $(294,669) 312,576 $ 312,576 $ 17,907 43,965 $ 61,872 $ 46,088 $ 278,929 $ 85,717 $ - $ - $ 620,000 312,576 384,792 (245,176) (184,792 $ -0- $ 67,400 $ 435,208 $ 46,088 $ 346,329 520,925 1.054.218 1.640,052 1,208,126 $1,100,306 $1,986,381 $1,7299051 13 (This Page Intentionally Left Blank) 14 1 CITY OF 9CHERTE, TEXAS ' COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - GENERAL AND DEBT SERVICE FUND TYPE ' YEAR ENDED SEPTEMBER 30, 1994 1 REVENUES ' Tares Licenses and Permits Charges for Services Fines and Forfeitures Other Total Revenues 'EXPENDITURES Current General Government Public safety ' Streets and Parks Health Recreation ' Economic Development Capital Outlay Debt Service Principal ' Interest Total Expenditures Excess of Revenues Over $2,620,340 $2,441,602 (Under) Expenditures $ 248,938 $ 485,868 ' OTHER FINANCING SOURCES (USES) Operating Tramsfexa (Out) (241,885) (245,176) ' Excess (Deficiency) of Revenues and Other Financing Sources Over Expenditures and ' Other Financing Uses $ 7,053 $ 240,692 FUND BALANCES - OCTOBER 1, 1993 545,082 545,082 133,000 133,000 - 161,958 161,958 - $178,738 $ 294,958 $ 294,958 $ -0- $236,930 $(294,958) $(294,669) $ 289 (3,291) 241,885 312,576 70,691 $233,639 $ (53,073) $ 17,907 93,965 43,965 $70,980 ' FUND BALANCES - SEPTEMBER 30, 1994 $ 552,135 $ 785,774 $233,639 $ (9,108) $ 61,872 $70,980 [1 (See Accompanying Notes to Financial Statements) 15 GENERAL FUND DEBT SERVICE FUND VARIANCE VARIANCE FAVORABLE FAVORABLE BUDGET ACTUAL (UNFAVORABLE) BUDGET ACTUAL (UNFAVORABLE) $2,038,945 $2,109,202 $ 70,257 $ - $ 289 $ 289 118,000 145,229 27,229 - - - 340,725 343,731 3,006 - - - 205,200 195,964 (9,236) - - - 166,408 133,344 (33,064) - - - $2,869,278 $2,927,470 $ 58,192 $ -0- $ 289 $ 289 $ 783,171 $ 744,801 6 38,370 $ - 6 - $ - 1,045,896 978,121 67,775 - - - 360,099 305,633 54,466 - - - 84,967 80,494 4,473 - - - 168,784 157,437 11,347 - - - 39,707 41,887 (2,180) - - - 137,716 133,229 4,487 - - - $2,620,340 $2,441,602 (Under) Expenditures $ 248,938 $ 485,868 ' OTHER FINANCING SOURCES (USES) Operating Tramsfexa (Out) (241,885) (245,176) ' Excess (Deficiency) of Revenues and Other Financing Sources Over Expenditures and ' Other Financing Uses $ 7,053 $ 240,692 FUND BALANCES - OCTOBER 1, 1993 545,082 545,082 133,000 133,000 - 161,958 161,958 - $178,738 $ 294,958 $ 294,958 $ -0- $236,930 $(294,958) $(294,669) $ 289 (3,291) 241,885 312,576 70,691 $233,639 $ (53,073) $ 17,907 93,965 43,965 $70,980 ' FUND BALANCES - SEPTEMBER 30, 1994 $ 552,135 $ 785,774 $233,639 $ (9,108) $ 61,872 $70,980 [1 (See Accompanying Notes to Financial Statements) 15 , CITY OF SCHERTZ, TEXAS COMBINED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN RETAINED EARNINGS ALL PROPRIETARY FUND TYPES ' YEAR ENDED SEPTEMBER 30, 1994 (WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1993) TOTALS . ENTERPRISE INTERNAL SERVICE (MEMORANDUM ONLY) , 1994 1993 OPERATING REVENUE Fees Charged to Users $2,492,936 $ 61,104 $2,554,040 $2,059,938 ' OPERATING EXPENSES BEFORE DEPRECIATION Personal Services $ 484,749 $ 21,938 $ 506,687 $ 516,182 ' Sewage Treatment 464,118 - 464,118 414,719 General and Administrative Contractual Services 228,185 209,770 - 30,634 228,185 240,404 204,133 266,881 t Supplies /Maintenance 116,144 31,555 147,699 343,987 Bad Debts 71,660 71,660 53,375 Total Operating Expenses ' before Depreciation $1,574,626 $ 84,127 $1,658,753 $1,799,277 Operating Income before Depreciation $ 918,310 $(23,023) $ 895,287 $ 260,661 ' Depreciation 388,907 2,439 391,346 414,759 Operating Income (Loss) $ 529,403 $(25,462) $ 503,941 $ (154,098) ' NONOPERATING REVENUES (EXPENSES) Interest Income $ 49,975 $ - $ 49,975 $ 33,186 Interest Expense (209,217) - (209,217) (298,382) Amortization (48) - (48) (48) , Reimbursements 31,293 - 31,293 48,568 Other Total Nonoperating Revenues 1,198 - 1,198 - ' (Expenses) $ (126,799) $ -0- $ (126,799) $ (216,567) Net Income (Loss) before Operating Interfund Transfers $ 402,604 $(25,462) $ 377,142 $ (370,665) ' OPERATING TRANSFERS - IN (OUT) (67,400) - (67,400) (200 -,000) Net Income (Loss) $ 335,204 $(25,462) $ 309,742 $ (570,665) ' RETAINED EARNINGS (DEFICIT) - OCTOBER 1, 1993 $ (362,469) $ 9,975 $ (352,494) $ 218,171 , Prior Period Adjustment 446,882 - 446,882 Retained Earnings As Restated $ 84,413 $ 9,975 S 94,388 $ 218,171 RETAINED EARNINGS (DEFICIT) - SEPTEMBER 30, 1994 S 419,617 15 487) S 404,130 S (352,994) 1 ' (See Accompanying Notes to Financial Statements) 16 ' CITY OF SCHERTZ, TEXAS COMBINED STATEMENT OF CASH FLOWS - ALL PROPRIETARY FUND TYPES YEAR ENDED SEPTEMBER 30, 1994 (WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1993) ENTERPRISE FUNDS CASH FLOWS FROM OPERATING $ (633,775) ACTIVITIES $ (330,322) Cash Received from Customers $2,551,781 Cash Payments to Suppliers for Goods and Services (1,096,589) Cash Payments to Employees (169,523) for Services (484,155) Other 32,449 Net Cash Provided by (Used in) 30,000 Operating Activities $1,003,486 CASH FLOWS FROM NON- CAPITAL FINANCING ACTIVITIES Residual Equity Transfer $ - Operating Transfers in (Out) (67,400) Net Cash Provided by (Used in) Non - Capital Financing TOTALS INTERNAL (MEMORANDUM ONLY) SERVICE 1994 1993 $ 75,518 $2,627,299 $1,982,589 (62,657) (1,159,246) (1,427,143) (21,646) (505,801) (516,546) 32,449 51,368 $ (8,785) $ 994,701 $ 90,268 (67,400) (200,000) Activities $ (67,400) $ -0- S (67,400) $ (200,000) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and Construction of Capital Assets $ (633,775) $ (1,611) $ (635,386) $ (330,322) Principal Payments on Long - Term Debt (198,151) - (198,151) (169,523) Proceeds from Issuance of Long -Term Debt 30,000 - 30,000 473,000 Interest Paid on Long -Term Debt (208,695) - (208,695) (298,382) Capital Contributed for Capital Assets 208,333 208,333 Net Cash Used in Capital and Related Financing Activities $ (802,288) $ (1,611) $ (803,899) $ (325,227) CASH FLOWS FROM INVESTING ACTIVITIES Interest on Investments $ 49,866 Net Increase (Decrease) in Cash $ 183,664 CASH AND CASH EQUIVALENTS - OCTOBER 1, 1993 1,335,059 CASH AND CASH EQUIVALENTS - SEPTEMBER 30, 1994 $16518,723 Comprised of Current Assets $ 287,570 Restricted Assets 1,231,153 51,518,723 (See Accompanying Notes to Financial Statements) 17 $ $ 49,866 $ 33,186 $(10,396) $ 173,260 $ (401,773) 10,485 1,345,544 1,283,045 89 ILL. 8812 S 881,272 $ 89 $ 287,659 $ 139,560 1,231,153 741,712 89 $1,518,812 S 881,272 (Continued) CITY OF SCHERTZ, TEXAS COMBINED STATEMENT OF CASH FLOWS - ALL PROPRIETARY FUND TYPES YEAR ENDED SEPTEMBER 30 1994 (WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1993) RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating Income (Loss) Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided by Operating Activities Depreciation /Amortization Provision for Uncollectible Accounts Other Change in Assets and Liabilities Decrease (Increase) in Accounts Receivable Increase in Inventory Increase (Decrease) in Vouchers Payable Increase (Decrease) in Due to Other Funds Decrease (Increase) in Due from Other Funds Increase (Decrease) in Accrued Vacation Increase (Decrease) in Accrued Interest Payable Increase (Decrease) in Customer Deposits Supplemental Disclosure Non -Cash Capital and Related Financing Transactions Equipment from Other Funds Acquisition and Construction of Capital Assets Cost of Facility Note Payable Issued Federal Financial Assistance Contributed Capital TOTALS ENTERPRISE INTERNAL (MEMORANDUM ONLY) FUNDS SERVICE 1994 1993 $ 529,403 $(25,462) $503,941 $(154,098) 388,907 2,439 391,346 414,807 71,660 - 71,660 - 51,368 (111,752) - (111,752) (33,790) (36,779) (468) (37,247) (10,914) 38,958 - 38,958 (7,696) 104,055 15,498 119,553 (209,610) 26,549 (1,084) 25,465 26,823 594 292 886 (366) 522 - 522 (2,626) (8,631) - (8,631) 16,370 $1,003,486 $(8,785) $994,701 $ 90,268 $ - $ - $ - $ 35,048 633,775 - 633,775 - - - - 273,000 (30,000) - (30,000) (273,000) (69,864) - (69,864) - (138,469) - (138,469) - 18 P 11 n P L I 1 CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1994 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the City of Schertz, Texas, (the City), have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to government units. The Government Accounting Standards Board (GASB) is the accepted standard - setting body for establishing governmental accounting and financial reporting principles. The more significant of the City's accounting policies are described below. A. Reporting Entity In evaluating how to define the city, for financial purposes, management has considered all potential component units. The decision to include a potential component unit in the reporting entity was made by applying the criteria set forth in Governmental Accounting Standards Board (GASH) No. 14, "The Financial Reporting Entity ". The basic, but not the only, criterion for including a potential component unit with the reporting entity is the governing body's ability to exercise oversight responsibility. The most significant manifestation of this ability is financial interdependency. Other manifestations of the ability to exercise oversight responsibility include, but are not limited to, the selection of governing authority, the designation of management, the ability to significantly influence operations, and accountability for fiscal matters. A second criterion used in evaluating potential component units is the scope of public service. Application of this criterion involves considering whether the activity benefits the city and /or its citizens, or whether the activity is conducted within the geographic boundaries of the city and is generally available to its citizens. A third criterion used to evaluate potential component units for inclusion or exclusion from the reporting entity is the existence of special financing relationships, regardless of whether the city is able to exercise oversight responsibilities. Based upon the applicability of these criteria, the following is a brief review of each potential component unit addressed in defining the City's reporting entity. Included within the reporting entity: Schertz Public Library. Schertz Public Library governing board is appointed by the Schertz City Council and provides the majority of its funding. The Library Fund reflects the activity of this entity and has been reported in the Special Revenue Fund of this report. The Schertz Development Foundation is a nonprofit corporation organized and operated for charitable purposes, including, but not limited to, assisting the City of Schertz, Texas, develop and implement economic viability to the City. The operations of the foundation are also reported as a Special Revenue Fund in the ' report. Annual reports of the Schertz Development Foundation for fiscal year ended September 30, 1994 are available upon request from City Hall. 1 19 Excluded from the reporting entity: Schertz Volunteer Fire Department Board. This board of local citizens works to ' provide private private additional funding fox fire equipment. citizens not appointed by the City Council and has This board is made up of no management control or 1 19 CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1994 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) A. Reporting Entity (Continued) direct influence over operations of the Schertz Volunteer Fire Department. All funds obtained by the board are used as the board sees fit with the City having no authority, responsibility, or obligation. For the year ending September 30, 1994, the comprehensive annual financial report for the City of Schertz, Texas, has been prepared in accordance with Governmental Accounting Standards Board Statement (GASH) No. 14, "The Financial Reporting Entity ". B. Fund Accounting The City uses funds and account groups to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain City functions or activities. A fund is a separate accounting entity with a self - balancing set of accounts. An account group, on the other hand, is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect net expendable available financial resources. Funds are classified into two categories: governmental and proprietary. Each category, in turn, is divided into separate "fund types ". Governmental funds are used to account for all or most of a government's general activities, including the collection and disbursement of earmarked monies (Special Revenue Funds), the acquisition or construction of general fixed assets (Capital Project Funds), and the servicing of general long -term debt (Debt Service Funds). The General Fund is used to account for all activities of the City not accounted for in some other fund. Proprietary funds are used to account for activities similar to those found in the private sector, where the determination of net income is necessary or useful to sound financial administration. Goods or services from such activities can be provided either to outside parties (enterprise funds) or to other departments. C. Basis of Accounting The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. 20 ' CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS ' SEPTEMBER 30, 1994 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Basis of Accounting (Continued) All proprietary funds are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and all liabilities associated with the opexation of these funds are included on the balance sheet. Fund equity (i.e., ' net total assets) is segregated into contributed capital and retained earnings components. Proprietary fund -type operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets. ' The modified accrual basis of accounting is used by all governmental fund types. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The City considers property taxes as available if they are collected within sixty (60) days after year end. A one -year availability period is used for revenue recognition for all other governmental fund revenues. Expenditures are recorded when the related fund liability is incurred. Principal and interest on general long -term debt are recorded as fund liabilities when due or when amounts have been accumulated in the Debt Service Fund for payments to be made early in the following year. ' Those revenues susceptible to accrual are property taxes, franchise taxes, special assessments, interest revenue, and charges for services. Licenses, fines, and permits are not susceptible to accrual because generally they axe not measurable until received in cash. The accrual basis of accounting is utilized by proprietary fund types. Under this ' method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. The City reports deferred revenue on its combined balance sheet. Deferred revenues arise when a potential revenue does not meet both the "measurable" and "available" criteria for recognition in the current period. Delinquent taxes are reported as deferred revenue as they are not available for current use. D. Budgets ' The City Charter establishes requirements for the adoption of budgets and related budgetary control. Budgetary preparation and control is exercised at the departmental level. The City Council must approve over- expenditures of appropriations or transfers of appropriated amounts between departments. Amendments ' to budget total are made only by the City Council. The city manager is authorized to amend the budget without City council approval by transferring budget amounts between line items within a department. During the year amendments were necessary, ' all complied with city charter requirements. Annual appropriated budgets are adopted for the general and debt service funds. The ' budgets are prepared using the modified accrual basis of accounting. All annual appropriations lapse at fiscal year end. Project - length financial plans are adopted 21 CITY OF SCHERT2, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1994 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. Budgets (Continued) for all capital projects funds. In addition, as part of the overall budget process, budgets are adopted for the proprietary fund; however, the City does not require a reporting as part of the comprehensive annual financial report. Encumbrances represent commitments related to unperformed contracts for goods or services. Encumbrance accounting - under which purchase orders, contracts and other commitments for the expenditure of resources are recorded to reserve that portion of the applicable appropriation - is utilized in the governmental funds. Any encumbrances outstanding at year end are reported as reservations of fund balances and do not constitute expenditures or liabilities because the commitments will be honored during the subsequent year. E. Cash and Investments Cash includes amounts in demand deposits as well as short -term certificates of deposit with a maturity date within three (3) months of the date acquired by the City. Investments generally consists of certificates of deposit with a maturity date greater than three (3) months of the date acquired by the City and are recorded at cost, which approximates market value. F. Short -Term Interfund Receivables /Pavables During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. These receivables and payables are classified as "due from other funds" or "due to other funds" on the balance sheet. Short -term interfund loans are classified as "interfund receivables /payables ". G. Inventories Inventories are valued at cost, which approximates market, using the first -in first - out (FIFO) method. The costs of governmental fund -type inventories are recorded as expenditures when consumed rather than when purchased. H. Restricted Assets Certain proceeds of Enterprise Fund revenue bonds, as well as certain resources set aside for their repayment are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants. Funds are segregated to report those proceeds of revenue bond issuances that are restricted for use in construction. Funds are also segregated to provide for debt services as provided under bond indenture agreements. 22 CITY OF SCHERTZ, TEXAS ' NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1994 ' NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) I. Fixed Assets ' General fixed assets are not capitalized in the funds used to acquire or construct them. Instead, capital acquisition and construction are reflected as expenditures The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Improvements are capitalized and depreciated over the remaining useful lives of the related fixed assets, as applicable. ' Public domain ( "infrastructure ") general fixed assets consisting of roads, bridges, curbs and gutters, streets and sidewalks, drainage system, and lighting systems are capitalized. Assets in the general fixed assets account group are not depreciated. Depreciation of buildings, equipment, and vehicles in the proprietary fund types is computed using the straight -line method. Interest is capitalized on proprietary fund assets acquired with tax - exempt debt. ' The amount of interest to be capitalized is calculated by offsetting interest expense incurred from the date of the borrowing until completion of the project with interest earned on invested proceeds over the same period. ' J. Compensated Absences Vested or accumulated vacation leave that is expected to be liquidated with ' expendable available financial resources is reported as an expenditure and a fund liability of the governmental fund that will pay it. Amounts of vested or accumulated vacation leave that are not expected to be liquidated with expendable ' available financial resources are reported in the general long -term debt account group. No expenditure is reported for these amounts. Vested or accumulated vacation leave of proprietary funds is recorded as an expense and liability of those funds as the benefits accrue to employees. In accordance with the provisions of ' Statement of Financial Accounting Standards No. 43, "Accounting for Compensated Absences ", no liability is recorded for nonvesting accumulating rights to receive sick pay benefits. K. Short -Term Obligation ' Short -term debt, debt of less than a year duration, is recognized as a liability of the governmental fund that incurred the obligation when the intent is to liquidate the obligation from expendable available resources. 1 23 in governmental funds, and the related assets are reported in the general fixed assets account group. All purchased fixed assets are valued at cost where historical records are available and at an estimated historical cost where no historical records exist. Donated fixed assets are valued at their estimated fair market value on the date received. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Improvements are capitalized and depreciated over the remaining useful lives of the related fixed assets, as applicable. ' Public domain ( "infrastructure ") general fixed assets consisting of roads, bridges, curbs and gutters, streets and sidewalks, drainage system, and lighting systems are capitalized. Assets in the general fixed assets account group are not depreciated. Depreciation of buildings, equipment, and vehicles in the proprietary fund types is computed using the straight -line method. Interest is capitalized on proprietary fund assets acquired with tax - exempt debt. ' The amount of interest to be capitalized is calculated by offsetting interest expense incurred from the date of the borrowing until completion of the project with interest earned on invested proceeds over the same period. ' J. Compensated Absences Vested or accumulated vacation leave that is expected to be liquidated with ' expendable available financial resources is reported as an expenditure and a fund liability of the governmental fund that will pay it. Amounts of vested or accumulated vacation leave that are not expected to be liquidated with expendable ' available financial resources are reported in the general long -term debt account group. No expenditure is reported for these amounts. Vested or accumulated vacation leave of proprietary funds is recorded as an expense and liability of those funds as the benefits accrue to employees. In accordance with the provisions of ' Statement of Financial Accounting Standards No. 43, "Accounting for Compensated Absences ", no liability is recorded for nonvesting accumulating rights to receive sick pay benefits. K. Short -Term Obligation ' Short -term debt, debt of less than a year duration, is recognized as a liability of the governmental fund that incurred the obligation when the intent is to liquidate the obligation from expendable available resources. 1 23 CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1994 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) L. Long -Term Obligation Long -term debt is recognized as a liability of a governmental fund when due, or when resources have been accumulated in the debt service fund for payment early in the following year. For other long -term obligations, only that portion expected to be financed from expendable available financial resources is reported as a fund liability of a governmental fund. The remaining portion of such obligations is reported in the general long -term debt account group. Long -term liabilities expected to be financed from proprietary fund operations are accounted for in those funds. M. Fund Equity Contributed capital is recorded in proprietary funds that have received capital grants or contributions from developers, customers, or other funds. Reserves represent those portions of fund equity not appropriate for expenditure or legally segregated for a specific future use. Designated fund balances represent tentative plans for future use of financial resources. N. Bond Discounts /Issuance Costs In governmental fund types, bond discounts and issuance costs are recognized in the current period. Bond discounts and issuance costs for proprietary fund types are deferred and amortized over the term of the bonds using the bonds - outstanding method, which approximates the effective interest method. Bond discounts are presented as a reduction of the face amount of bonds payable whereas issuance costs are recorded as deferred charges. O. Interfund Transactions Quasi - external transactions are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures /expenses initially made from it that are properly applicable to another fund, are recorded as expenditures /expenses in the reimbursing fund and as reductions of expenditures /expenses in the fund that is reimbursed. All other interfund transactions, except quasi - external transactions and reimbursements, are reported as transfers. Nonrecurring or non - routine permanent transfers of equity are reported as residual equity transfers. All other interfund transfers are reported as operating transfers. P. Cash Flows Statement For purposes of the statement of cash flows, the City considers all highly liquid investments with an original maturity of approximately ninety days or less to be cash equivalents. 24 L u CITY OF SCHERT2, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1994 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Q. Memorandum Only - Total Columns Total columns on the general purpose financial statements are captioned "memorandum only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations or changes in cash flows in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. R. Comparative Data Comparative total data for the prior year has been presented in the accompanying financial statements in order to provide an understanding of changes in the government's financial position and operations. S. Reclassification Certain 1993 amounts have been reclassified to conform to 1994 presentations. NOTE 2: LEGAL COMPLIANCE - BUDGETS On or before July each year, all agencies of the City submit request for appropriation to the City Manager so that a budget may be prepared. The budget is prepared by fund, department, function, and activity, and includes information on the past year, current year estimates and requested appropriations for the next fiscal year. Before September 30, the proposed budget is presented to the City Council for review, modification, and approval. By state statute budgeted expenditures may not exceed budgeted revenues. Expenditures may not legally exceed budgeted appropriations at the fund level. NOTE 3: DEPOSITS WITH FINANCIAL INSTITUTIONS The City maintains demand deposit and savings accounts that axe available for the individual funds from which they are generated. The funds accounts are displayed on the combined balance sheet under the captions "Cash and Cash Equivalents or Investments." At September 30, 1994, the bank balance of the City's deposits was $3,546,098 and the bank balance per books was $3,416,625. This entire amount was covered by $300,000 federal depository insurance and pledged assets. The collateral for the City's deposits is categorized to give an indication of the level of risk assumed by the City at year end. Category 1 includes deposits that are insured or registered or for which the securities are held by the City or its agent in the 25 CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1994 NOTE 3: DEPOSITS WITH FINANCIAL INSTITUTIONS (CONTINUED) City's name. Category 2 includes uninsured and unregistered deposits for which the securities are held by the counterparty's trust department or agent in the City's name. Category 3 includes uninsured and unregistered deposits for which the securities are held by the counterparty's trust department or agent, but not in the City's name. BANK COLLATERAL DEPOSITS CATEGORY BANK BANK COVERED BY 1 2 3 BALANCE VALUE FDIC Insurance $ 300,000 $ -0- $ -0- $ 300,000 $ 300,000 U. S. Treasury Notes and Municipal Bonds 3,116,625 -0- -0- 3,116,625 4,131,157 TOTAL DEPOSITS - CASH AND CASH EQUIVALENTS AND $3,416,625 $ -0- $ _0_ $3,416,625 $4,431,157 The City is allowed 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 or the United States; (4) obligations of states, agencies, counties, cities, and other political subdivisions of any state having been rated as to investment quality by a nationally recognized investment rating firm and having received a rating of not less than "AA" or its equivalent; (5) certificates of deposits issued by state and national banks domiciled in Texas that are guaranteed or insured by the Federal Deposit Insurance Corporation or its successor, or secured by obligations mentioned above; and (6) fully collateralized direct repurchase agreements having a defined termination date. For fiscal year September 30, 1994, the City invested in demand deposits, U. S. Treasury Notes, or certificates of deposit. NOTE 4: RECEIVABLES Receivables at September 30, 1994 consist of the following: RECEIVABLES Taxes Account Interest Gross Receivables Less: Allowance for Uncollectible NET TOTAL RECEIVABLES DEBT CAPITAL GENERAL SERVICE PROJECTS ENTERPRISE TOTAL $58,460 $12,701 $ - $ - $ 71,161 12,282 - - 449,032 461,314 3,013 3,013 $70,742 $12,701 $3,013 $449,032 $535,488 2,923 635 112,360 115,918 67 819 JIL6066 $3,013 $336,672 $419,570 The delinquent taxes receivable account represents past years of uncollected tax levies and is also reflected as a deferred revenue of equal amount. 26 I U I I F 1 1 CITY OF SCHERT2, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30 1994 NOTE 4: RECEIVABLES (CONTINUED) Property taxes are levied as of October 1 on property values assessed as of January 1. Property taxes are payable on or before January 31 following the levy date without penalty or interest. Unpaid property taxes attach as an enforceable lien on property as of February 1 with penalty and interest. On July 1, unpaid taxes are forwarded fox collection and are subject to additional penalties for collection expenses. NOTE 5: GENERAL FIXED ASSETS The following is a summary of changes in general fixed assets: $9,924,652 $539,065 75,122 BALANCES AT SEPTEMBER 30, 1994 $ 403,589 1,114,290 7,197,121 704,390 969,205 $10,388,595 *Adjusted to Include Land of $21,713 in the Schertz..Development Foundation The following is a summary of the pxopexty, plant, and equipment of the Proprietary Funds at September 30, 1994: Buildings Improvements Other than Buildings Machinery and Equipment Construction in Progress Accumulated Depreciation Land ENTER] WATER /SEWER $ 195,724 8,980,331 501,946 88,602 $9,766,603 4,535,176 $5,231,427 160,521 )RISE INTERNAL SAFES SERVICE TOTAL $ 26,656 $58,804 $ 281,184 - - 8,980,331 357,910 23,076 882,932 88,602 $384,566 $81,880 $10,233,049 233,231 20,887 4,789,294 $151,335 $60,993 $ 5,443,755 - - 160,521 $5,391,948 $151,335 $60,993 S 5,604,276 In the proprietary and internal service funds, the following useful lives are used to compute depreciation: ' Buildings Sewer and Water Lines Equipment U 30 Years 50 Years 5 - 10 Years 27 BALANCES AT OCTOBER 1, 1993 ADDITIONS DEDUCTION: Land $ 409,563* $ - $ 5,974 Buildings 1,114,290 - - Improvements Other than Buildings 6,822,748 374,373 - Vehicles 698,940 51,460 46,010 Equipment 879,111 113,232 23,138 $9,924,652 $539,065 75,122 BALANCES AT SEPTEMBER 30, 1994 $ 403,589 1,114,290 7,197,121 704,390 969,205 $10,388,595 *Adjusted to Include Land of $21,713 in the Schertz..Development Foundation The following is a summary of the pxopexty, plant, and equipment of the Proprietary Funds at September 30, 1994: Buildings Improvements Other than Buildings Machinery and Equipment Construction in Progress Accumulated Depreciation Land ENTER] WATER /SEWER $ 195,724 8,980,331 501,946 88,602 $9,766,603 4,535,176 $5,231,427 160,521 )RISE INTERNAL SAFES SERVICE TOTAL $ 26,656 $58,804 $ 281,184 - - 8,980,331 357,910 23,076 882,932 88,602 $384,566 $81,880 $10,233,049 233,231 20,887 4,789,294 $151,335 $60,993 $ 5,443,755 - - 160,521 $5,391,948 $151,335 $60,993 S 5,604,276 In the proprietary and internal service funds, the following useful lives are used to compute depreciation: ' Buildings Sewer and Water Lines Equipment U 30 Years 50 Years 5 - 10 Years 27 CITY OF SCNERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1994 NOTE 6: LONG -TERM DEBT A. General Long -Term Debt The following is a summary of changes in general long -term debt for the year ended September 30, 1994: Certificates of Obligation 1990 Series Public Property Finance Contractual Obligation 1991 Series TOTAL GENERAL OBLIGATION BONDS, CERTIFICATES OF OBLIGA- TION AND CON- TRACTUAL OBLIGATION 850,000 7 - 9.0% $ 780,000 $ _0_ $40,000 $ 740,000 125,000 Compensated Absences Payable 7.25% $ 70,000 $ -0- $ 35,000 $ 35,000 $2,102,000 $ -0- $133,000 $1,969,000 BALANCE OUTSTANDING OCTOBER 1, 1993 ADDITIONS $83,790 $102,248 28 BALANCE OUTSTANDING SEPTEMBER 30, DEDUCTIONS 1994 $83,790 $102,248 BALANCE BALANCE OUTSTANDING OUTSTANDING ORIGINAL INTEREST OCTOBER 1, DURING YEAR SEPTEMBER 30, AMOUNT RATE 1993 ISSUED RETIRED 1994 General Obligation Bonds 1962 Series $301,000 3.63% $ 97,000 $ - $11,000 $ 86,000 1972 Series 150,000 3.63% 25,000 - 12,000 13,000 1975 Series 175,000 6.2 - 7.0% 150,000 - 10,000 140,000 1987 Series 445,000 6.2 - 8.3% 360,000 - 25,000 335,000 1992 Series 620,000 5.2 - 7.2% 620,000 - - 620,000 $1,252,000 $ -0- $58,000 $1,194,000 Certificates of Obligation 1990 Series Public Property Finance Contractual Obligation 1991 Series TOTAL GENERAL OBLIGATION BONDS, CERTIFICATES OF OBLIGA- TION AND CON- TRACTUAL OBLIGATION 850,000 7 - 9.0% $ 780,000 $ _0_ $40,000 $ 740,000 125,000 Compensated Absences Payable 7.25% $ 70,000 $ -0- $ 35,000 $ 35,000 $2,102,000 $ -0- $133,000 $1,969,000 BALANCE OUTSTANDING OCTOBER 1, 1993 ADDITIONS $83,790 $102,248 28 BALANCE OUTSTANDING SEPTEMBER 30, DEDUCTIONS 1994 $83,790 $102,248 1 CITY OF SCRERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1994 ' NOTE 6: LONG -TERM DEBT (CONTINUED) 1 29 A. General Long -Term Debt (Continued) 1 PUBLIC PROPERTY FINANCE ' YEAR ENDED SEPTEMBER 30, GENERAL OBLIGATION CERTIFICATE OF OBLIGATION CONTRACTUAL OBLIGATION 1995 $ 159,139 $ 98,848 $36,269 ' 1996 160,314 94,797 - 1997 154,435 95,523 1998 154,298 96,347 - 1999 152,736 97,293 - t 2000 -2004 562,617 504,656 Thereafter 372,520 93,262 ' TOTAL $1,716,059 $1,080,726 $36,269 Principal $1,194,000 $ 740,000 $35,000 Interest 522,059 340,726 1,269 TOTAL $1,716,059 $1,080,726 $36,269 ' B. Proprietary Long -Term Debt The following is a summary of changes in proprietary long -term debt for the year ended ' September 30, 1994: BALANCE BALANCE OUTSTANDING OUTSTANDING ' ORIGINAL INTEREST OCTOBER 1, SEPTEMBER 30, AMOUNT RATE 1993 ISSUED RETIRED 1994 Revenue Bonds 1968 Series $ 579,000 4.0 - 5.75% $ 75,000 $ - $35,000 $ 40,000 1973 Series 165,000 5.75 - 6.10% 165,000 - - 165,000 ' 1975 Series 325,000 7.0 - 7.75% 225,000 - 10,000 215,000 1981 Series 475,000 9.0 - 10.0% 255,000 35,000 220,000 1980 Series 1,020,000 6.3 - 8.30% 930,000 15,000 915,000 ' $1,650,000 $ -0- $95,000 $1,555,000 ' Certificates of Obliga- tion 1981 Series $ 150,000 9.3 - 10.00% $ 75,000 $ - $10,000 $ 65,000 1983 Series 1,250,000 8.2 - 10.00% 870,000 - 60,000 810,000 1992 Series 200,000 200,000 10,000 190,000 ' $1,145,000 $ -0- $80,000 $1,065,000 1 29 1 CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1994 NOTE 6: LONG -TERM DEBT (CONTINUED) ' B: Proprietary Long -Term Debt (Continued) BALANCE BALANCE OUTSTANDING OUTSTANDING ORIGINAL AMOUNT INTEREST OCTOBER 1, RATE 1993 ISSUED SEPTEMBER 30, RETIRED 1994 , Public Facility Loan (HUD) $ 142,000 5% $ 92,000 $ -0- 4,000 $ 88,000 ' Note Payable $ 273,000 7.6% $ 235,787 $ - $19,151 $ 216,636 Note Payable $ 30,000 8.25% - 30,000 - 30,000 ' $ 235,787 $30,000 $19,151 $ 246,636 The annual requirements to amortize all debt outstanding as of September 30, 1994 ' including interest payments are as follows: HUD CERTIFICATES PUBLIC YEAR ENDED REVENUE OF FACILITY NOTES SEPTEMBER 30, BONDS OBLIGATION LOAN PAYABLE t 1995 $ 215,028 $ 175,985 $ 8,400 $ 69,687 1996 - 207,587 183,338 8,200 37,212 1997 204,938 189,220 8,000 37,212 ' 1998 196,832 193,870 7,800 37,212 1999 218,797 168,200 7,600 37,212 2000 -2004 894,813 601,090 35,000 111,636 Thereafter 453,162 - 63,600 - ' $2,391,157 $1,511,703 $138,600 $330,171 , Pxincipal $1,555,000 $1,065,000 $ 88,000 $246,636 Interest 836,157 446,703 50,600 83,535 $2,391,157 $1,511,703 $138,600 $330,171 Bonded debt of the City consists of various series of general obligation bonds, revenue bonds, certificates of obligation, public facility loan (HUD), public property finance contractual obligations, and two notes payable. General obligation bonds 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 water and sewer fund. The debenture agreement for water and sewer bonds require funds be available for 1 /12th the principal and 1 /6th the interest requirements of the next fiscal year. Certificates of obligation axe payable from a levy of ad valorem taxes upon all taxable property within the City, and axe further payable from certain net revenues derived from the operation of the City's combined water and sewer systems after payments of first lien revenue bonds. The public 30 k k n C' r 1 I [1 1 1 I 1 1 F CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1994 NOTE 6: LONG -TERM DEBT (CONTINUED) B: Proprietary Long -Term Debt (Continued) loan is payable from gross revenue derived from operations of the water and sewer systems and has equal status with first lien revenue bonds. Public property finance contractual obligations are payable from a levy of ad valorem taxes upon all taxable property within the City. The notes payable are payable from revenues generated by the water and sewer fund. The City is mandated to maintain revenue reserves at least 1.5 times the average annual revenue bond debt service requirements. The City was in compliance. NOTE 7: INTERFUND ASSETS /LIABILITIES The following is a summary of amounts due from and due to other funds as of September 30, 1994: DUE FROM DUE TO OTHER FUNDS OTHER FUNDS General Fund $351,531 $ - Special Revenue Funds Library - 115 Forestry - 767 Debt Service - 142,603 Capital Projects 16,743 388,907 Bond Issues - 97,660 Enterprise Funds Other Income (Expenses) (131,595) Water and Sewer System 15,690 109,736 SAFES - 1,733 Internal Revenue Fund 1,083 15,690 $368,304 $368,304 NOTE 8: SEGMENT INFORMATION - ENTERPRISE FUNDS The City has two (2) enterprise operations which provide water /sewer and emergency ambulance services. Segment information for the twelve month period ended September 30, 1994, is as follows: _ WATER /SEWER SAFES TOTAL Operating Revenues $1,997,654 $495,282 $2,492,936 Operating Expenses, Exclusive of Depreciation 1,206,670 367,956 1,574,626 Depreciation 372,164 16,743 388,907 Operating Income $ 418,820 $110,583 $ 529,403 Other Income (Expenses) (131,595) 4,796 (126,799) Operating Transfers - Out (67,400) - (67,400) NET INCOME 31 $ 219,825 $115,379 $ 335,204 CITY OF SCRERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1994 NOTE 8: SEGMENT INFORMATION - ENTERPRISE FUNDS (CONTINUED) Total Assets - $7,087,843 $446,136 $7,533,979 Total Equity $3,782,081 $404,360 $4,186,441 Working Capital $ 229,870 $253,025 $ 482,895 Additions to Fixed Assets $ 568,114 26,077 $ 594,191 Outstanding Long -Term Debt $2,924,636 30,000 $2,954,636 NOTE 9: CONTRIBUTED CAPITAL During the year, contributed capital increased by the following amounts: SOURCE Developers - Federal Financial Assistance Volunteers Total Additions Contributed Capital, October 1 CAPITAL, SEPTEMBER 30 NOTE 10: OPERATING TRANSFERS WATER AND SEWER SAFES FUND FUND $ 136,654 $ - 69,864 - 1,815 $ 206,518 $ 1,815 3,333,537 224,954 INTERNAL SERVICE FUND TOTAL $ - $ 136,654 69,864 1,815 $ -0- $ 208,333 63,577 3,622,068 $3,540,055 226,769 $63,577 $3,830,401 ' Operating transfers are comprised as follows: IN OUT General Fund $ - $245,176 Debt Service Fund 312,576 - Enterprise - Water and Sewer - 67,400 $312,576 JILL576 NOTE 11: DEFICIT RETAINED EARNINGS For the year ended September 30, 1994, the Internal Service Fund has a deficit retained earnings balance of $15,487. This occurred because sufficient transfers were not made from other funds to supplement revenue in order to exceed expenditures. This will be corrected in the coming fiscal year. NOTE 12: PENSION PLAN Description The City provides pension benefits for all of its full -time employees through a nontraditional, joint contributory, defined contribution plan in the state -wide Texas Municipal Retirement System (TMRS), one of over 613 administered by TMRS, an agent multiple - employer public employee retirement system. It is the opinion of the TMRS management that the plans in TMRS are substantially defined contribution plans, but they have elected to provide additional voluntary disclosure to help foster a better understanding of some of the nontraditional characteristics of the plan. 32 I [1 f1 CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1994 NOTE 12: PENSION PLAN (CONTINUED) Description (Continued) 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 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 contribution 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 years that are one year before the effective date. At retirement, the benefit is calculated as if the sum of the employee's accumulated contributions with interest and the employer- financed monetary credits with interest were used to purchase an annuity. Members can retire at ages sixty (60) and above with ten (10) or more years of service or with twenty -five (25) years of service regardless of age. The plan also provides death and disability benefits. A member is vested after ten (10) yeaxs, but he must leave his accumulated contributions in the plan. If a member withdraws his own money, he is not entitled to the employer- financed monetary credits, even if he was vested. The plan provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS and within the actuarial constraints also in the statutes. Contributions The contribution rate for the employees is 5 %, and the City matching percent is currently 100 %, 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 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 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 percent of payroll necessary to satisfy the obligation of the City to each employee at the time his retirement becomes effective. The prior service contribution rate amortizes the unfunded actuarial liability over the remainder of the plan's twenty -five (25) year amortization period. When the City periodically adopts updated service credits and increases in annuities in effect, the increased unfunded actuarial liability is to be amortized over a new twenty -five (25) year period. Currently, the unfunded actuarial liability is being amortized over the twenty -five (25) year period which began February, 1993. 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 to budget for it, there is a one (1) year lag between the actuarial valuation that is the basis for the rate and the calendar year when the rate goes into effect. 33 CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1994 NOTE 12: PENSION PLAN (CONTINUED) The City's total payroll in fiscal year 1994 was $1,736,372 and the City's contributions were based on a payroll of $1,633,256. Both the City and the covered employees made the required contributions, amounting to $70,991, (4.33% for the months in calendar year 1994, 2.45% normal cost plus 1.88% to amortize the unfunded actuarial liability) for the City and $81,666 (5%) for the employees. There were no related -party transactions. Funding Status and Progress Even though the substance of the City's plan is not to provide a defined benefit in some form, some additional voluntary disclosure is appropriate due to the nontraditional nature of the defined contribution plan which had an initial unfunded pension benefit obligation due to the monetary credits granted by the City for services rendered before the plan began and which can have additions to the unfunded pension benefit obligation through the periodic adoption of increases in benefit credits and benefits. Statement No. 5 of the Governmental Accounting Standards Board (GASB 5) defines pension benefit obligation as a standardized disclosure measure of the actuarial present value of pension benefits, adjusted for the effects of projected salary increases, estimated to be payable in the future as a result of employee service to date. The measure is intended to help users assess the funding status of public employee pension plans, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among public employee pension plans. The pension benefit obligation shown below is similar in nature to the standardized disclosure measure required by GASB 5 for defined benefit plans except that there is no need to project salary increases since the benefit credits earned for service to date are not dependent upon future salaries. The calculations were made as part of the annual actuarial valuation as of December 31, 1993. Because of the money- purchase nature of the plan the interest rate assumption, currently 8.5% per year, does not have as much impact on the results as it does for a defined benefit plan. Market value of assets is not determined for each city's plan, but the market value of assets for TMRS as a whole was 118.0% of book value as of December 31, 1993. Pension Benefit Obligation Annuitants Currently Receiving Benefits $ 41,436 Terminated Employees - Current Employees Accumulated Employee Contributions Including Allocated Invested Earnings 69,845 Employer- Financed Vested 387,674 Employer - Financed Nonvested 155.427 TOTAL JE1jJB2 Net Assets Available for Benefits, at Book Value $133,346 Unfunded Pension Benefit Obligation $521,036 34 L P u 1 1 H n 11 1 CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 1994 NOTE 12: PENSION PLAN (CONTINUED) The book value of assets is amortized cost for bonds and original cost for short -term securities and stocks. The actuarial assumptions used to compute the actuarially determined city contribution rate are the same as those used to compute the pension benefit obligation. Trend Information The three (3) year historical trend information is being developed prospectively. Because the City joined the Texas Municipal Retirement System (TMRS) during 1993, only information for year ended September 30, 1994 is available as follows: YEAR ENDED SEPTEMBER 30, 1994 Net Assets Available for Benefits as a Percentage of the Pension Benefit obligation 20.38% Unfunded (Assets in Excess of) Pension Benefit Obligation as a Percentage of covered Payroll 31.90% Employer Contributions as a Percentage of Covered Payroll 4.35% The ten year historical trend information can be found in the annual reports of the TMRS The TMRS annual report contains detailed pension information on each of its members. NOTE 13: PRIOR PERIOD ADNSTMENT Prior period adjustments occurred in two (2) funds. For the year ended September 30, 1994, the Water and Sewer System has been restated to include the Capital Recovery Fund which in previous years had been reported as a capital projects fund. Capital recovery revenues are earmarked for specific capital improvements in the Water and Sewer System. For the statement of cash flows, cash and cash equivalents at October 1, 1993 has been restated to include the Capital Recovery Funds of $464,272. The SAFES fund was restated for the reconciliation of accounts receivable as of October 1, 1993. 35 (This Page Intentionally Left Blank) 36 iI [I H INDIVIDUAL FUND AND ' ACCOUNT GROUP STATEMENTS AND SCHEDULES p 11 1 C' 1 1 37 (This Page Intentionally Left Blank) 38 FUND t The General Fund accounts fox the resources used to finance the fundamental operations of the City. It is the basic fund of the City and covers all activities for which a separate fund has not been established. 1 1 1 1 h 1 39 (This Page Intentionally Left Blank) 40 ' CITY OF SCHERTZ, TEXAS GENERAL FUND COMPARATIVE BALANCE SHEETS ' SEPTEMBER 30, 1994 AND 1993 ' (See Accompanying Notes to Financial Statements) ' 41 SEPTEMBER 30, t1994 1993 ASSETS ' Cash and Cash Equivalents $431,772 $ 54,992 Investments 29,157 482,306 ' Accounts Receivable Delinquent Taxes Receivable (Net of Allowances) 12,282 55,537 13,624 67,758 Due from Other Funds 351,531 51,176 Inventory of Supplies, at Cost 14,378 18,605 ' Other Receivables - 33 TOTAL ASSETS $894,657 $688,494 LIABILITIES AND FUND BALANCES LIABILITIES ' Vouchers Payable $ 18,013 $ 39,691 Notes Payable 35,333 35,963 Deferred Revenue 55,537 67,758 ' Total Liabilities $108,883 $143,412 FUND BALANCES Reserved for Park Improvements $ 13,293 $ ' Reserved for Forfeited Property 3,309 Reserved for Inventory of Supplies 14,378 18,605 Unreserved ' Designated for Economic Development 18,821 18,821 Designated for Equipment Replacement 15,144 15,144 Designated for Self - Insurance 45,000 45,000 Undesignated 675,829 447,512 ' Total Fund Balances $785,774 $545,082 TOTAL LIABILITIES AND FUND BALANCES 112it.657 $688,494 ' (See Accompanying Notes to Financial Statements) ' 41 CITY OF SCHERTZ, TEXAS GENERAL FUND COMPARATIVE SCHEDULES. OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL (GAAP BASIS) YEAR ENDED SEPTEMBER 30, 1994 REVENUES Taxes Licenses and Permits Charges for Services Fines and Forfeitures Other Sources Total Revenues Current General Government Public Safety Streets and Parks Health Recreation Economic Development Capital Outlay Total Expenditures Excess of Revenues over Expenditures OTHER FINANCIAL SOURCES (USES) Operating Transfers - (Out) Excess of Revenues and Other Financing Sources over Expenditures and Other Financing Uses FUND BALANCES - OCTOBER 1 FUND BALANCES SEPTEMBER 30 $ 783,171 1994 $ 38,370 $ 741,305 1,045,896 978,121 VARIANCE 924,222 360,099 305,633 FAVORABLE 373,213 BUDGET ACTUAL (UNFAVORABLE) 1993 $2,038,945 $2,109,202 $ 70,257 $1,895,333 118,000 145,229 27,229 173,310 340,725 343,731 3,006 327,434 205,200 195,964 (9,236) 196,200 166,408 133,344 (33,064) 104,023 $2,869,278 $2,927,470 $ 58,192 $2,696,300 $ 783,171 $ 744,801 $ 38,370 $ 741,305 1,045,896 978,121 67,775 924,222 360,099 305,633 54,466 373,213 84,967 80,494 4,473 75,441 168,784 157,437 11,347 135,546 39,707 41,887 (2,180) 37,426 137,716 133,229 4,487 108,863 $2,620,340 $2,441,602 $178,738 $2,396,016 $ 248,938 $ 485,868 $236,930 $ 300,284 (241,885) (245,176) (3,291) (184,792) $ 7,053 $ 240,692 $233,639 $ 115,492 545,082 545,082 429,590 $ 552,135 $ 785,774 k233,639 $ 545,082 (See Accompanying Notes to Financial Statements) 42 ' CITY OF SCHERTZ, TEXAS ' GENERAL FUND SCHEDULE OF REVENUES COMPARED TO BUDGET ' YEAR ENDED SEPTEMBER 30, 1994 ' 1994 VARIANCE FAVORABLE 1993 ' BUDGET ACTUAL (UNFAVORABLE) ACTUAL REVENUES Taxes ' Ad Valorem $1,213,507 $1,207,203 $ (6,304) $1,100,837 Tax Penalty 13,000 11,235 (1,765) 10,519 City Sales Tax 590,000 653,126 63,126 563,677 Utility Franchise 221,038 225,839 4,801 217,103 other 1,400 11,799 10,399 3,197 Total Taxes $2,030,945 $2,109,202 $ 70,257 $1,895,333 Licenses and Permits $ 118,000 $ 145,229 $ 27,229 $ 173,310 Charges for Services ' Utility Administration $ 210,000 $ 210,0000 $ - $ 198,333 Swimming Pool 31,375 28,421 (2,954) 29,156 Animal Shelter 3,000 4,166 1,166 3,036 ' Building Rental 7,500 8,835 1,335 6,782 Library and Fire 68,650 72,226 3,576 67,245 Other 20,200 20,083 (117) 22,882 ' Total Charges for Services $ 340,725 $ 343,731 $ 3,006 $ 327,434 Fines and Forfeitures $ 205,200 $ 195,964 $ (9,236) $ 196,200 ' Other Sources Reimbursements $ 15,000 $ - $(15,000) $ 11,002 Substance Abuse 21,000 22,661 1,661 20,480 Retirement Reversions - - - 14,699 ' Cibolo Creek Municipal Authority 6,200 6,560 360 5,.694 Interest 7,500 14,495 6,995 8,853 Emergency Management Coordinator 7,000 6,859 (141) 11,142 ' Sale of Assets 4,800 1,523 (3,277) 2,778 Insurance Proceeds 3,000 27,293 24,293 - Miscellaneous 101,908 53,953 (47,955) 29,375 ' Total Other Sources $ 166,408 $ 133,344 $(33,064) $ 104,023 TOTAL REVENUES $2,869,278 $2,927,470 5$ 8,192 - $2,696,300 (See Accompanying Notes to Financial Statements) 1 43 ' CITY OF SCHERTZ, TEXAS GENERAL FUND , SCHEDULE OF EXPENDITURES COMPARED TO BUDGET (GAAP BASIS) ' YEAR ENDED SEPTEMBER 30, 1994 1994 VARIANCE ' FAVORABLE 1993 BUDGET ACTUAL (UNFAVORABLE) ACTUAL CURRENT , General Government City Council $ 19,000 $ 14,119 $ 4,881 $ 14,543 City Manager 151,450 155,059 (3,609) 138,735 ' Tax 79,988 78,089 1,899 89,213 Planning and Zoning 112,820 108,634 4,186 81,879 Legal 55,100 76,468 (21,368) 74,384 ' Municipal Court 59,122 52,619 6,503 53,239 Municipal Building 98,984 93,250 5,734 100,146 General Administration 97,887 95,901 1,986 96,668 Other - Unclassified 108,820 70,662 38,158 92,498 ' Total General Government $ 783,171 $ 744,801 $ 38,370 $ 741,305 PUBLIC SAFETY ' Police Department $ 730,367 $ 681,915 $ 48,452 $ 655,303 Fire Department 260,268 244,413 15,855 215,640 Inspection 55,261 51,793 3,468 53,279 Total Public Safety $1,045,896 $ 978,121 $ 67,775 $ 924,222 ' STREETS AND PARKS Streets $ 269,012 $ 220,829 $ 48,183 $ 280,292 , Parks 91,087 84,804 6,283 92,921 Total Streets and Parks $ 360,099 $ 305,633 $ 54,466 $ 373,213 ' HEALTH Animal control S 84,967 $ 80,494 $ 4,473 $ 75,441 RECREATION ' Swimming Pool $ 57,101 $ 46,416 $ 10,685 $ 53,564 Library Total Recreation 111,683 S 168,784 111,021 662 $ 11,347 81,982 $ 135,546 $ 157,437 ECONOMIC DEVELOPMENT S 39,707 $ 41,887 $ (2,180) $ 37,426 $ 137,716 $ 133,229 $ 4,487 $ 108,863 ' CAPITAL OUTLAY TOTAL EXPENDITURES $2,620,340 52,441,602 .178,738 52,3964016 , ' (See Accompanying Notes to Financial Statements) 44 ' P SPECIAL REVENUE FUNDS Special Revenue Funds account for the proceeds of specific revenue sources (other than expendable trusts or for major capital projects) that are legally restricted to ' expenditure for specified purposes. 1 F P I n I 1 45 CITY OF SCHERTZ, TEXAS SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET YEAR ENDED SEPTEMBER 30, 1994 (WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1993) ASSETS Cash and Cash Equivalents Investments Prepaid Expenses TOTAL ASSETS LIABILITIES AND FUND BALANCES LIABILITIES Accrued Taxes Due to Other Funds Total Liabilities FUND BALANCES Unreserved Undesignated TOTAL LIABILITIES AND FUND BALANCES SCHERTZ DEVELOPMENT TOTALS LIBRARY FORESTRY FOUNDATION 1994 1993 $ 5,699 $ - $ 8,263 $13,962 $ 4,753 12,620 780 10,094 23,494 12,216 4,500 4,500 $18,319 780 $22,857 $41,956 $16,969 $ - $ - $ 2,645 $ 2,645 $ - 115 767 882 115 $ 115 $767 $ 2,645 $ 3,527 $ 115 18,204 13 20,212 38,429 16,854 $18,319 $780 $22,857 $41,956 $16,969 (See Accompanying Notes to Financial Statements) 46 1 1 1 1 1 1 1 CITY OF SCHERTZ, TEXAS SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES YEAR ENDED SEPTEMBER 30, 1994 (WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1993) REVENUES Other Donations State Grant Gain on Sale of Land Interest Total Revenues General and Administrative Contractual Services Supplies /Maintenance Interest Total Expenditures Excess of Revenues Over Expenditures FUND BALANCES (DEFICIT) - OCTOBER 1 FUND BALANCES - SEPTEMBER 30 SCHERTZ DEVELOPMENT TOTALS LIBRARY FORESTRY FOUNDATION 1994 1993 $ 4,600 $ - $ - $ 4,600 $ 4,723 - 2,500 - 2,500 - - - 53,894 53,894 - 408 6 279 693 5 008 $2,506 $54,173 $61,687 4,723 $ - $ - $ 3,949 $ 3,949 $ - - 588 4,640 5,228 - 3,658 1,905 2,000 7,563 1,681 3,305 3,305 3,658 $2,493 $13,894 $20,045 1,681 $ 1,350 $ 13 $40,279 $41,642 $ 3,042 16,854 - (20,067) (3,213) 13,812 $18,204 S 13 $20,212 $38,429 $16,854 (See Accompanying Notes to Financial Statements) 47 (This Page Intentionally Left Blank) 48 P DEBT SERVICE FUND ' This fund is used to account for the accumulation of resources for and the payment of principal, interest, and related costs on general long -term debt of the City. I I F I 1 11 1 49 CITY OF SCHERTZ, TEXAS DEBT SERVICE FUND COMPARATIVE BALANCE SHEETS SEPTEMBER 30, 1994 ASSETS Cash and Cash Equivalents Delinquent Taxes Receivable (Net of Allowances) Investments TOTAL ASSETS LIABILITIES AND FUND BALANCE LIABILITIES Due to Other Funds Deferred Revenue Ad Valorem Taxes Total Liabilities FUND BALANCE Reserved fox Debt Service TOTAL LIABILITIES AND FUND BALANCE (See Accompanying Notes to Financial Statements) 50 SEPTEMBER 30, 1994 1993 $ 3,881 $61,351 12,066 13,824 200,594 $216,541 $75,175 $142,603 $17,386 12,066 13,824 $154,669 $31,210 61,872 43,965 $216,541 $75,175 1 CITY OF SCHERTZ, TEXAS DEBT SERVICE FUND COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL YEAR ENDED SEPTEMBER 30, 1994 REVENUES Interest Income Debt Service Bond Principal -Bond Interest Fiscal Agent Fees Total Expenditures Excess of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES) Operating Transfers In Excess of Revenues (Deficiency) and Other Financing Sources Over (Under) Expenditures and Other Financing Uses FUND BALANCES - OCTOBER 1 FUND BALANCES - SEPTEMBER 30 1994 VARIANCE FAVORABLE BUDGET ACTUAL (UNFAVORABLE) 1993 S S 289 $ 133,000 $ 133,000 158,972 158,972 2,986 2,986 $ 294,958 $ 294,958 289 $ 3,502 $ - $ 101,660 90,123 4,536 $ -0- $ 196,319 $(294,958) $(294,669) $ 289 $(192,817) 241,885 312,576 $ (53,073) $ 17,907 43,965 43,965 $ (9,108) $ 61,872 (See Accompanying Notes to Financial Statements) 51 70,691 184,792 $70,980 $ (8,025) 51,990 $70,980 $ 43,965 (This Page Intentionally Left Blank) 52 P h h F 11 CAPITAL PROJECTS FUNDS The Capital Projects Fund accounts for financial resources to be used for the acquisition ' or construction of major capital facilities (other than those financed by proprietary fund types.) [1 fl 1 53 CITY OF SCHERTZ, TEXAS CAPITAL PROJECTS FUND COMBINING BALANCE SHEET SEPTEMBER 30, 1994 (WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1993) ASSETS Cash and Cash Equivalents Investments Accrued Interest TOTAL ASSETS LIABILITIES AND FUND BALANCES LIABILITIES Due to Other Funds FUND BALANCES Unreserved - Designated for Capital Improvements TOTAL LIABILITIES AND FUND BALANCES ANIMAL TOTALS BOND ISSUES CONTROL 1994 1993 $ - $ - $ - $ 138,974 1,194,953 - 1,194,953 981,264 3,013 - 3,013 3,013 $1,197,966 $ -0- $1,197,966 $1,123,251 $ 97,660 $ - $ 97,660 $ 69,033 1,100,306 - 1,100,306 1,054,218 $1,197,966 $ -0- $1,197,966 $1,123,251 (See Accompanying Notes to Financial Statements) 54 CITY OF SCHERTZ, TEXAS CAPITAL PROJECTS FUND COMBINING STATEMENTS OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE YEAR ENDED SEPTEMBER 30, 1994 (WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1993) REVENUES other Private Grant Interest Income Litigation Settlement Total Revenues EXPENDITURES Capital Outlay Capital Projects Animal Control Total Expenditures Excess of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES) Certificate of Obligation Proceeds Operating Transfers - In Total Other Financing Sources (Uses) Excess of Revenues (Deficiency) and Other Financing Sources Over (Under) Expenditures and Other Financing Uses FUND BALANCES - OCTOBER 1. 1993 FUND BALANCES - SEPTEMBER 30, 1994 ANIMAL TOTALS BOND ISSUES CONTROL 1994 1993 $ - S - S - $ 49,200 65,655 - 65,655 25,763 167,592 167,592 $ 233,247 $ -0- $ 233,247 $ 74,963 $ 174,083 $ - $ 174,083 $ 215,559 13,076 13,076 36,124 $ 174,083 $ 13,076 $ 187,159 $ 251,683 $ 59,164 $(13,076) $ 46,088 $ (176,720) $ - $ - $ - $ 620,000 - - 200,000 $ -0- $ -0- $ -0- S 820,000 $ 59,164 $(13,076) $ 46,008 $ 643,280 1,041,142 13,076 1,054,218 410,938 $1,100.306 $ -0- $1,100,306 $1.054,218 (See Accompanying Notes to Financial Statements) 55 (This Page Intentionally Left Blank) 56 F I PROPRIETARY FUND TYPE ENTERPRISE FUNDS ' Enterprise Funds are established to account for operations that are financed and operated in a manner similar to private business enterprises - where the intent of the governing body is that costs (expenses, including depreciation) of providing goods or services to ' the general public on a continuing basis be financed or recovered primarily through user charges. The City operates the Water and Sewer System and the Schertz Area Facility for Emergency Services (SAFES) on this basis. C I C' 1 1 57 CITY OF SCHERTZ, TEXAS ENTERPRISE FUND COMBINING BALANCE SHEET SEPTEMBER 30, 1994 (WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1993) ASSETS CURRENT ASSETS Cash and Cash Equivalents Investments Accounts Receivable (Net) Due from Other Funds Inventory of Supplies, at Cost Total Current Assets RESTRICTED ASSETS Cash and Cash Equivalents Investments Total Restxicted Assets FIXED ASSETS Land and Improvements Buildings Improvements Other than Buildings Machinery and Equipment Construction in Progress Totals Less: Accumulated Depreciation Total Fixed Assets WATER AND SEWER SYSTEM SAFES I C TOTALS 1994 1993 ' $ 15,300 $ 18,908 $ 34,208 $ 62,085 68,813 184,549 253,362 66,990 276,988 59,684 336,672 280,494 15,690 - 15,690 42,239 87,188 31,660 118,848 82,069 $ 463,979 $294,801 $ 758,780 $ 533,877 $ 19,851 $ - $ 19,851 $ 29,021 , 1,211,302 Organizational Costs 1,211,302 712,691 $ 1,900 $1,231,153 $ -0- $ 1,231,153 $ 741,712 Amortization (1,137) - $ 160,521 195,724 $ - 26,656 $ 160,521 222,380 $ 160,521 222,380 , 8,980,331 - 8,980,331 8,502,236 TOTAL ASSETS 501,946 357,910 859,856 817,799 , 88,602 88,602 14,563 $9,927,124 $384,566 $10,311,690 $9,717,499 4,535,176 233,231 4,768,407 4,419,083 t $5,391,948 $151,335 $ 5,543,283 $5,298,416 u OTHER ASSETS Organizational Costs $ 1,900 $ - $ 1,900 $ 1,900 ' Accumulated Amortization (1,137) - (1,137) (1,089) Total Other Assets 5 763 $ -0- $ 763 $ 811 ' TOTAL ASSETS $7,087,843 446 136 J_7,533,..979 $6,574,816 1 (See Accompanying Notes to Financial Statements) 58 ' P I J I LIABILITIES AND EQUITY CURRENT LIABILITIES Vouchers Payable Note Payable Due to Other Funds Accrued Vacation and Sick Leave Total Current Liabilities CURRENT LIABILITIES PAYABLE FROM RESTRICTED ASSETS Customer Deposits Revenue Bonds Certificates of Obligation Public Facility Loan Accrued Interest Total Current Liabilities Payable from Restricted Assets NONCURRENT LIABILITIES Revenue Bonds Payable (Less Current Maturities) Certificate of Obligation Payable (Less Current Maturities) Public Facility Loan Note Payable (Less Current Maturities) Total Noncurrent Liabilities Total Liabilities EQUITY Contributed Capital Retained Earnings Reserved for Revenue Bond Retirement Reserved for Equipment Replacement and Capital Improvements Unreserved Total Equity TOTAL LIABILITIES AND EQUITY WATER AND SEWER TOTALS SYSTEM SAFES 1994 1993 $ 87,156 $ 3,323 $ 90,479 $ 51,397 20,619 30,000 50,619 19,151 109,736 1,733 111,469 6,141 16.598 6.720 23.318 22.724 $ 234.109 $ 41.776 $ 275.885 $ 99.413 $ 119,539 $ - $ 119,539 $ 128,170 100,000 - 100,000 95,000 85,000 - 85,000 30,000 4,000 - 4,000 4,000 48,097 - 48,097 47,575 $ 356,636 $ -0- $ 356,636 $ 304,745 $1,455,000 $ - $1,455,000 $1,555,000 980,000 - 980,000 1,115,000 84,000 - 84,000 88,000 196,017 196,017 216,636 $2,715,017 $ -0- $2,715,017 $2,974,636 $3,305,762 $ 41,776 $3,347,538 $3,378,794 $3,540,055 $226,769 $3,766,824 $3,558,491 302,368 - (j,3:68) 100,667 - 100,667 (241,009) 177,591 (63,418) $3,782,081 $404,360 $4,186,441 $7,087,843 $446,136 $7,533,979 1 59 341,141 123,447 (827,057) $3,196,022 $6,574,816 CITY OF SCHERTZ, TEXAS ENTERPRISE FUND ' COMBINING STATEMENT OF REVENUES EXPENSES AND CHANGES IN RETAINED EARNINGS YEAR ENDED SEPTEMBER 30, 1994 (WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1993) ' WATER AND TOTALS SEWER SYSTEM SAFES 1994 1993 ' OPERATING REVENUES Fees Charged to Users OPERATING EXPENSES BEFORE DEPRECIATION Personal Services Sewage Treatment General and Administrative Contractual Services Supplies /Maintenance Bad Debts Total Operating Expenses before Depreciation Operating Income before Depreciation Depreciation Operating Income (Loss) NONOPERATING REVENUES (EXPENSES) Interest Income Interest Expenses Amortization Reimbursements Other Total Nonoperating Revenues (Expenses) Net Income (Loss) before Operating Transfers OPERATING TRANSFERS (OUT) Net Income (Loss) RETAINED EARNINGS (DEFICIT) AT BEGINNING OF YEAR Prior Period Adjustment RETAINED EARNINGS AT BEGINNING OF YEAR - AS RESTATED RETAINED EARNINGS (DEFICIT) AT END OF YEAR $1,997,654 $495,282 $2,492,936 $2,029,454 $ 292,944 $191,805 $ 484,749 $ 492,576 464,118 - 464,118 414,719 222,385 5,800 228,185 204,133 174,410 35,360 209,770 254,201 52,813 63,331 116,144 328,590 - 71.660 71.660 53.375 $1,206,670 $367,956 $1,574,626 $1,747,594 $ 790,984 $127,326 $ 918,310 $ 281,860 372,164 16,743 388,907 411,968 $ 418,820 $110,583 $ 529,403 $ (130,108) $ 45,221 $ 4,754 $ 49,975 $ 33,186 (209,217) - (209,217) (298,382) (48) - (48) (48) 31,293 - 31,293 48,568 1,156 42 11198 109 $ (131,595) $ 4,796 $ (126,799) $ (216,567) $ 287,225 $115,379 $ 402,604 $ (346,675) (67,400) - (67,400) (227,341) $ 219,825 $115,379 $ 335,204 $ (574,016) $ (408,746) $ 46,277 $ (362,469) $ 211,547 430,947 15,935 446,882 - $ 22,201 $ 62,212 $ 84,413 $ 211,547 S 242,026 177,591 2 419,617 $ (362,469) (See Accompanying Notes to Financial Statements) 60 I I I I I i I LJ I I I I I u I CITY OF SCHERTZ, TEXAS ENTERPRISE FUND COMBINING STATEMENT OF CASH FLOWS - ALL PROPRIETARY FUND TYPES YEAR ENDED SEPTEMBER 30, 1994 (WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1993) CASH FLOWS FROM OPERATING ACTIVITIES Cash Received from Customers Cash Payments to Suppliers for Goods and Services Cash Payments to Employees for Services Other Net Cash Provided by Operating Activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Operating Transfers out to Other Funds CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and Construction of Capital Assets Principal Payments on Long -Term Debt Proceeds from Issuance of Long -Term Debt Interest Paid on Long -Term Debt Capital Contributed for Capital Assets Net Cash Used in Capital and Related Financing Activities CASH FLOWS FROM INVESTING ACTIVITIES Interest on Investments Net Increase (Decrease) in Cash CASH AND CASH EQUIVALENTS - OCTOBER 1, 1993 CASH AND CASH EQUIVALENTS - SEPTEMBER 30, 1994 Comprised of Current Assets Restricted Assets WATER AND $ 92,287 TOTALS SEWER SYSTEM SAFES 1994 1993 $2,132,673 $419,108 $2,551,781 $1,952,105 (988,429) (108,160) (1,096,589) (1,398,632) (294,695) (189,460) (484,155) (492,441) 32,449 516315,266 32,449 51,368 $ 881,998 $121,488 $1,003,486 $ 112,400 $ (67,400) $ - $ (67,400) $ (227,341) $ (568,114) $(65,661) $ (633,775) $ (329,622) (198,151) - (198,151) (169,523) - 30,000 30,000 473,000 (208,695) - (208,695) (298,382) 206,518 11815 208,333 $ (768,442) $(33,846) $ (802,288) $ (324,527) $ 45,221 $ 4,645 $ 49,866 $ 33,186 $ 91,377 $ 92,287 $ 183,664 $ (406,282) 1,223,889 111,170 1,335,059 1,277,069 $1,315,266 $203,457 $1,518,723 $ 870,787 $ 84,113 $203,457 $ 287,570 $ 129,075 1,231,153 - 1,231,153 741,712 516315,266 jjjj,6457 $1,518,723 $ 870,787 (Continued) (See Accompanying Notes to Financial Statements) 61 CITY OF SCHERTZ, TEXAS ENTERPRISE FUND COMBINING STATEMENT OF CASH FLOWS - ALL PROPRIETARY FUND TYPES YEAR ENDED SEPTEMBER 30, 1994 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING INCOME Operating Income (Loss) Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided by Operating Activities Depreciation /Amortization Provision for Uncollectible Accounts Other Change in Assets and Liabilities Decrease (Increase) in Accounts Receivable Increase in Inventory Increase (Decrease) in Vouchers Payable Increase (Decrease) in Due to Other Funds Decrease (Increase) in Due from Other Funds Increase (Decrease) in Accrued Vacation Increase (Decrease) in Accrued Interest Payable Increase (Decrease) in Customers Deposits NET CASH PROVIDED BY OPERATING ACTIVITIES WATER AND TOTALS SEWER SYSTEM SAFES 1994 1993 $ 418,820 $110,583 $ 529,403 $ (130,108) 372,164 16,743 388,907 412,016 - 71,660 71,660 53,375 - - - 51,368 (37,094) (74,658) (111,752) (87,165) (29,904) (6,875) (36,779) (10,547) 35,752 3,206 38,958 (7,654) 105,571 (1,516) 104,055 (209,585) 26,549 - 26,549 26,823 (1,751) 2,345 594 133 522 - 522 (2,626) (8,631) - (8,631) 16,370 $ 881,998 $121,488 $1,003,486 $ 112,400 Supplemental Disclosures Non -Cash Capital and Related Financing Transactions Equipment from Other Funds $ Acquisition and Construction of Capital Assets Cost of Facility Note Payable Issued Federal Financial Assistance Contributed Capital 568,114 (69,864) (136,654) 62 - $ - $ 34,363 65,661 633,775 - - - 273,000 (30,000) (30,000) (273,000) - (69,864) - (1,815) (208,333) - I GENERAL FIXED ASSETS ' This account group is established to account for the fixed assets owned by the City exclusive of those relating to Proprietary Fund operations. Expenditure transactions to acquire general fixed assets occur in the General Fund. L 1 1 1 f1 L 1 63 (This Page Intentionally Left Blank) 64 P P F 11 r CITY OF SCHERTZ, TEXAS SCHEDULES OF GENERAL FIXED ASSETS - BY SOURCE GENERAL FIXED ASSETS Land Buildings Improvements Other than Buildings Vehicles Equipment Construction in Progress TOTAL INVESTMENT IN GENERAL FIXED ASSETS BY SOURCE General Fund Capital Projects General Obligation Bonds Certificates of Obligation Time Warrants Contractual Obligations Grant Contributed Special Revenue - Development Foundation TOTAL (See Accompanying Notes to Financial Statements) 65 SEPTEMBER 30, 1994 1993 $ 403,589 $ 387,850 1,114,290 1,114,290 7,197,121 6,822,748 694,477 698,940 979,118 879,111 $10,388,595 $9,902,939 $ 1,978,599 $1,914,517 678,523 491,364 182,686 182,686 317,005 317,005 113,614 113,614 36,124 36,124 7,066,305 6,847,629 15.739 - $10,388,595 $9,902,939 CITY OF SCHERTZ, TEXAS SCHEDULES OF GENERAL FIXED ASSETS - BY FUNCTION AND ACTIVITY YEAR ENDED SEPTEMBER 30, 1994 (See Accompanying Notes to Financial Statements) 66 BALANCE TRANSFERS BALANCE OCTOBER 1, BETWEEN SEPTEMBER 30, 1993 ADDITIONS DEPARTMENTS DEDUCTIONS 1994 General Government $ 856,420 $ 52,776 $ 1,699 $ 160 $ 910,735 Public Safety Police 337,535 62,872 (14,888) 44,810 340,709 Fire 598,414 33,173 - 8,200 623,387 inspection 21,302 - 13,866 11,113 24,055 Street and Park Street 6,429,234 351,311 - 70 6,780,475 Pool 540,806 967 - - 541,773 Parks 657,330 17,092 - 3,000 671,422 Health Animal Control 204,336 20,874 (677) 1,795 222,738 Library 257,562 - - - 257,562 Development Foundation 21,713 5,974 15,739 TOTALS $9,924,652 $539,065 $ -0- 75 122 510,388,595 (See Accompanying Notes to Financial Statements) 66 COMPONENTS OF GENERAL FIXED ASSETS IMPROVEMENTS OTHER THAN LAND BUILDINGS BUILDINGS VEHICLES EQUIPMENT $ 63,769 $ 623,236 $ 48,310 $ 6,676 $168,744 - - - 190,569 150,140 12,000 65,000 5,670 309,366 231,351 - - 139 18,031 5,885 83,227 400 6,309,646 145,109 242,093 - - - 530,309 - 11,464 182,662 195,159 202,906 17,998 72,697 23,161 106,071 - 65,274 6,728 21,504 23,031 124,424 34,867 - 75,240 15,739 k403,589 $1,1141290 $7,197,121 $694,477 $979,118 67 (This Page Intentionally Left Blank) 68 I 1 1 1 1 1 0 0 0 1 STATISTICAL INFORMATION 69 CITY OF SCHERTZ, TEXAS GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION TABLE 1 FISCAL GENERAL PUBLIC STREETS TOTAL (1) YEAR GOVERNMENT SAFETY AND PARKS HEALTH OTHER EXPENDITURE: 1985 $566,490 $353,023 $173,251 $45,076 $ 99,770 $1,237,610 1986 620,680 416,578 202,929 43,929 182,739 1,466,855 1987 715,242 488,536 318,719 55,657 188,193 1,766,347 1988 807,754 523,000 283,323 47,507 216,662 1,878,246 1989 934,517 582,673 289,539 50,243 189,199 2,046,171 1990 654,009 796,823 327,797 56,150 339,241 2,174,020 1991 659,815 836,031 342,974 65,816 436,419 2,341,055 1992 689,082 843,582 352,093 66,646 393,138 2,344,541 1993 741,305 924,222 373,213 75,441 479,836 2,594,017 1994 744,801 978,121 305,633 80,494 647,556 2,756,605. (1) Includes General, Special Revenue and Debt Service Funds (See Accompanying Notes to Financial Statements) 70 CITY OF SCHERTZ, TEXAS GENERAL GOVERNMENT REVENUES BY SOURCE TABLE 2 *Includes General, Special Revenue and Debt Service Funds * *Reclassification Among These Categories Performed in 1991 (See Accompanying Notes to Financial Statements) 71 LICENSES CHARGES FINES FISCAL AND FOR AND YEAR TAXES PERMITS SERVICES FORFEITURES OTHER TOTAL* 1985 $ 926,883 $ 73,521 $ 30,440 $ 92,437 $200,701 $1,323,982 1986 1,068,305 117,685 30,717 121,054 173,894 1,511,655 1987 1,152,108 76,821 32,459 159,837 203,837 1,625,062 1988 1,308,600 54,627 32,391 139,008 272,230 1,806,856 1989 1,360,611 53,045 31,235 145,830 305,348 1,896,069 1990 1,540,027 42,194 72,781 217,311 305,977 2,178,290 1991 1,746,053 43,826 276,508 201,512 ** 156,737 2,424,636 ** 1992 1,811,941 53,316 326,184 221,856 113,261 2,526,558 1993 1,895,333 173,310 327,434 196,200 112,248 2,704,525 1994 2,109,202 145,229 343,731 195,964 195,320 2,989,446 *Includes General, Special Revenue and Debt Service Funds * *Reclassification Among These Categories Performed in 1991 (See Accompanying Notes to Financial Statements) 71 CITY OF SCHERTZ, TEXAS PROPERTY TAX LEVIES AND COLLECTIONS (See Accompanying Notes to Financial Statements) 72 % OF TOTAL CURRENT CURRENT TAX TAX LEVY FISCAL YEAR LEVY COLLECTIONS COLLECTED September 30, 1985 $ 486,515 $ 481,502 98.9% September 30, 1986 545,931 532,537 97.5 September 30, 1987 610,784 592,291 97.0 September 30, 1988 706,369 674,931 95.6 September 30, 1989 748,602 715,970 95.6 September 30, 1990 914,388 864,723 94.6 September 30, 1991 1,005,598 975,352 97.0 September 30, 1992 1,042,914 1,014,564 97.0 September 30, 1993 1,102,209 1,083,800 98.3 September 30, 1994 1,212,063 1,192,569 98.4 (See Accompanying Notes to Financial Statements) 72 1 t 1 t 1 1 DELINQUENT COLLECTIONS $ 2,629 4,193 7,083 18,548 14,943 19,324 37,972 19,995 17,037 14,634 TOTAL TAX COLLECTION $ 484,131 536,730 599,374 694,017 730,913 884,047 1,013,324 1,034,559 1,100,837 1,207,203 RATIO OF TOTAL TAX COLLECTIONS TO TOTAL TAX LEVY 73 99.5 % 98.3 100.3 98.25 97.64 96.7 101.0 99.0 99.9 99.6 TABLE 3 OUTSTANDING RATES OF STANDING DELINQUENT DELINQUENT TAXES TO TAXES TAX LEVY $14,165 2.9% 19,523 3.6 29,594 4.8 41,915 5.9 56,270 7.5 86,122 9.4 70,396 7.8 84,843 8.1 85,876 7.8 71,161 5.9 CITY OF SCHERTZ, TEXAS ASSESSED AND ESTIMATED ACTUAL VALUE OF PROPERTY TABLE 4 (See Accompanying Notes to Financial Statements) 74 FISCAL ESTIMATED LEVY YEAR ACTUAL ASSESSMENT ASSESSED TAX TAX YEAR ENDED VALUES PERCENTAGE VALUATIONS RATE LEVY 1985 09 -30 -85 $122,414,101 100% $111,586,009 .436 $481,515 1986 09 -30 -86 132,968,582 100 125,018,837 .436 545,931 1987 09 -30 -87 153,457,116 100 147,961,601 .4128 610,784 1988 09 -30 -88 379,674,429 100 285,978,200 .24705 706,369 1989 09 -30 -89 284,253,725 100 290,606,339 .2576 748,602 1990 09 -30 -90 376,676,293 100 287,272,356 .3183 914,388 1991 09 -30 -91 340,903,727 100 272,593,690 .3689 1,005,598 1992 09 -30 -92 269,351,284 100 268,170,123 .3889 1,042,914 1993 09 -30 -93 256,861,608 100 259,038,486 .4255 1,102,209 1994 09 -30 -94 264,286,116 100 258,766,426 .4684 1,212,063 (See Accompanying Notes to Financial Statements) 74 t 1 1 CITY OF SCHERTZ, TEXAS PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS TABLE 5 All rates shown are per $100 assessed valuation. Year shown is the fiscal year of collection. Taxes were levied the previous calendar year. (See Accompanying Notes to Financial Statements) 75 COUNTY YEAR ** CITY SCHOOL COUNTY ROAD 100% 100% 100% 100% ASSESSMENT ASSESSMENT ASSESSMENT ASSESSMENT RATE* RATE* RATE RATE 1985 $.440 $ .97 $.2457 $.04 1986 .436 1.11 .3450 .0425 1987 .4128 1.14 .3875 .04 1988 .24705 .783 .2852 .0820 1989 .2576 .8882 .1522 .0950 1990 .3183 1.00561 .1418 .0977 1991 .3689 1.20513 .2720 .0850 1992 .3889 1.4777 .3599 .0850 1993 .4255 1.4499 .3036 .0950 1994 .4684 1.3095 .2995 .0867 All rates shown are per $100 assessed valuation. Year shown is the fiscal year of collection. Taxes were levied the previous calendar year. (See Accompanying Notes to Financial Statements) 75 CITY OF SCNERTZ, TEXAS RATIO OF NET GENERAL OBLIGATION BONDED DEBT TO ASSESSED VALUE AND NET GENERAL BONDED DEBT PER CAPITA TABLE 6 *Based on Preliminary 1990 Census. This estimate has been challenged by the City. * *Includes General Bonded Debt Issued During Current Year (See Accompanying Notes to Financial Statements) 76 NET RATIO GENERAL OF NET BONDED BONDED DEBT DEBT PER FISCAL YEAR ESTIMATED ASSESSED NET GENERAL TO ASSESSED CAPITA September 30, 1985 11,400 $ 11,586,009 $ 345,035 .31% $30.27 September 30, 1986 12,500 125,213,487 324,351 .26 25.92 September 30, 1987 12,500 147,961,601 757,790 .51 60.62 September 30, 1988 12,580 285,978,200 758,401 .27 60.29 September 30, 1989 12,580 290,606,339 755,115 .26 60.03 September 30, 1990 10,681* 287,272,356 732,510 .25 68.58 September 30, 1991 10,900 272,593,690 715,300 .26 65.62 September 30, 1992 11,500 268,170,123 687,715 .26 59.80 September 30, 1993 12,000 259,038,486 1,190,649 ** .46 99.22 September 30, 1994 12,500 258,766,426 1,132,128 .43 90.57 *Based on Preliminary 1990 Census. This estimate has been challenged by the City. * *Includes General Bonded Debt Issued During Current Year (See Accompanying Notes to Financial Statements) 76 1 t 1 1 1 1 CITY OF SCHERTZ, TEXAS COMPUTATION OF DIRECT AND OVERLAPPING DEBT YEAR ENDED SEPTEMBER 30, 1994 *Alamo Community College District *Bexar County *COmal County *Comal Independent School District *Guadalupe County * Schertz- Cibolo- Universal City Independent School District *San Antonio River Authority Total Net Overlapping Debt. *City of Schertz TOTAL DIRECT AND OVERLAPPING DEBT (2.94% OF ASSESSED VALUE - $713.80 PER CAPITA) *Source of Data - Texas Municipal Repoxts, City of Schertz, 1993 (Latest Available) Compiled and Published by Municipal Advisory Council of Texas TABLE 7 (See Accompanying Notes to Financial Statements) 77 $7,534,097 NET DEBT PERCENT AMOUNT AS OF OVER- OVER - AMOUNT 08 -31 -93 LAPPING LAPPING $77,713,418 08 -31 -93 .02% $ 15,543 155,605,436 07 -31 -93 .02 31,121 5,941,449 12 -31 -94 .09 5,347 26,754,568 08 -31 -93 .12 32,105 1,881,027 03 -31 -93 14.75 277,451 8,698,462 08 -31 -93 51.88 4,512,762 57,430,000 01 -01 -94 .02 11,486 $4,885,815 2,648,282 09 -30 -93 100.00 2,648,282 (See Accompanying Notes to Financial Statements) 77 $7,534,097 CITY OF SCHERTZ, TEXAS LEGAL DEBT MARGIN YEAR ENDED SEPTEMBER 30, 1994 I 1 u 1 TABLE 8 ' Texas municipalities are not bound by any direct constitutional or statutory maximums as to the amount of general obligation bonds which may be issued; however, all local bonds must be submitted to and approved by the State Attorney General. It is the established practice of the Attorney General not to approve prospective bond issue if it will result in the levy of a tax for bonded debt of over $1.00 for cities under 5,000 population or $1.50 for cities over 5,000 population. (See Accompanying Notes to Financial Statements) 78 CITY OF SCRERTZ, TEXAS RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL OBLIGATION BONDED DEBT TO TOTAL GENERAL EXPENDITURES LAST TEN FISCAL YEARS FISCAL YEAR September 30, 1985 September 30, 1986 September 30, 1987 September 30, 1988 September 30, 1989 September 30, 1990 September 30, 1991 September 30, 1992 September 30, 1993 September 30, 1994 *Includes General, Special Revenue, and Debt Service Funds (See Accompanying Notes to Financial Statements) 79 TABLE 9 RATIO OF DEBT SERVICE TO GENERAL 3.9% 3.2 2.7 5.2 4.3 4.5 4.0 4.0 3.9 5.6 DEBT SERVICE PRINCIPAL INTEREST TOTAL EXPENDITURES* $21,000 $27,878 $48,878 $1,237,610 21,000 26,233 47,233 1,466,855 22,000 25,169 47,169 1,766,347 24,000 72,900 96,900 1,878,246 39,000 54,758 93,758 2,197,023 45,000 52,049 97,049 2,174,020 45,000 49,067 94,067 2,341,055 46,000 46,084 92,084 2,344,541 57,000 42,830 99,830 2,594,017 58,000 97,493 155,493 2,756,605 *Includes General, Special Revenue, and Debt Service Funds (See Accompanying Notes to Financial Statements) 79 TABLE 9 RATIO OF DEBT SERVICE TO GENERAL 3.9% 3.2 2.7 5.2 4.3 4.5 4.0 4.0 3.9 5.6 CITY OF SCHERTZ, TEXAS WATER AND SEWER FUND REVENUE BOND COVERAGE (See Accompanying Notes to Financial Statements) 80 TOTAL OPERATING OPERATING EXPENSES INCOME OPERATING BEFORE BEFORE FISCAL ENDED REVENUE DEPRECIATION DEPRECIATI September 30, 1985 $1,172,755 $ 815,805 $356,950 September 30, 1986 1,309,269 849,677 459,592 September 30, 1987 1,339,061 888,916 450,145 September 30, 1988 1,502,210 1,056,619 445,591 September 30, 1989 1,729,271 1,045,290 683,981 September 30, 1990 1,557,554 1,087,074 470,480 September 30, 1991 1,515,854 1,139,935 375,919 September 30, 1992 1,487,049 1,203,574 283,475 September 30, 1993 1,617,768 1,387,165 230,603 September 30, 1994 1,997,654 1,206,670 790,984 (See Accompanying Notes to Financial Statements) 80 DEBT SERVICE OF REQUIREMENTS CUSTOMERS PRINCIPAL INTEREST TOTAL $ 75,000 $224,036 $299,036 83,000 217,379 300,379 105,000 271,454 376,454 113,000 262,543 375,543 128,000 267,943 395,943 138,000 247,580 385,580 83,000 139,423 222,423 80,000 134,473 214,473 90,000 128,672 218,672 95,000 122,106 217,106 81 TABLE 10 NUMBER OF CUSTOMERS COVERAGE WATER SEWER 1.19:1 2,877 2,231 1.53:1 3,208 2,333 1.20:1 3,498 2,639 1.19:1 3,692 2,662 1.73:1 3,859 2,906 1.22:1 3,712 3,028 1.69:1 3,751 3,086 1.32:1 3,859 3,177 1.06:1 4,074 3,377 3.64:1 4,231 3,488 CITY OF SCHERTZ, TEXAS WATERWORKS AND SEWER SYSTEM FUND REVENUE BOND REQUIREMENTS AND RESTRICTED FUNDS YEAR ENDED SEPTEMBER 30, 1994 SERIES 1968 Principal Payment, Due September 1, 1995 Interest Payment, Due March 1, 1995 UTILITY SYSTEM REVENUE BONDS, SERIES 1973: Principal Payment, Due September 1, 1995 Interest Payment, Due March 1, 1995 UTILITY SYSTEM REVENUE BONDS. SERIES 1975: Principal Payment, Due September 1, 1995 Interest Payment, Due March 1, 1995 UTILITY SYSTEM REVENUE BONDS, SERIES 1981: Principal Payment, Due September 1, 1995 Interest Payment, Due March 1, 1995 UTILITY SYSTEM REVENUE BONDS. SERIES 1987: Principal Payment, Due September 1, 1995 Interest Payment, Due March 1, 1995 Total Requirements CASH - RESTRICTED UNDER REQUIREMENTS 1 TABLE 11 ' ANNUAL REQUIREMENT PRINCIPAL/ AT SEMI - ANNUAL SEPTEMBER 30, INTEREST BASIS 1994 $40,000 1 /12th 1,150 1 /6th - 1 /12th 4,884 1 /6th $ 3,333 192 814 10,000 1 /12th 833 7,940 1 /6th 1,323 35,000 1 /12th 2,917 10,790 1 /6th 1,798 15,000 1 /12th 1,250 32,750 1 /6th 5,458 $ 17,918 6,915 $(11,003) RESERVE FUND REQUIREMENT The City is required to make monthly deposits sufficient to meet the total reserve fund requirement within sixty (60) months of the closing date for the 1987 issue. City monthly deposits through September 30, 1994 met these requirements. 1 '.2 Time Average Annual Principal and Interest Requirement (Annual $183,912) Cash and Investments FUNDS AVAILABLE OVER (UNDER) REQUIREMENT (See Accompanying Notes to Financial Statements) 82 $275,868 355,950 s5 0,082 t 1 1 1 CITY OF SCHERTZ, TEXAS Source: (1) 1990 Bureau of the Census Department of Planning, University of Texas (2) Department of Economics, University of Texas United States Department of Labor (Information not Available for Odd Years) (3) Texas Employment Commission (4) Schertz - Cibolo- Universal City Independent School District (See Accompanying Notes to Financial Statements) 83 LAST TEN FISCAL YEARS TABLE 12 LEVEL IN PER. YEARS OF CAPITA MEDIAN FORMAL SCHOOL UNEMPLOYMENT FISCAL INCOME AGE EDUCATION ENROLLMENT RATE IN % YEAR POPULATION (2) (3) (3) (4) (3) 1985 11,400 Est. $ - 40 12 2,064 5.4% 1986 12,500 Est. 7,400 41 12 2,154 6.3 1987 12,500 Est. - 41 12 2,306 5.7 1988 12,580 Est. 8,300 41 12 2,334 6.2 1989 12,580 Est. 8,300 41 12 3,980 7.3 1990 10,597 Act. 9,600 42 12 4,175 4.6 1991 10,900 Est. 13,436 35 14 4,309 6.3 1992 12yOOO Est. 13,500 33 14 4,619 4.0 1993 12,000 Est. 13,500 32 14 4,700 3.9 1994 12,500 Est. 13,600 32 14 4,576 3.9 Source: (1) 1990 Bureau of the Census Department of Planning, University of Texas (2) Department of Economics, University of Texas United States Department of Labor (Information not Available for Odd Years) (3) Texas Employment Commission (4) Schertz - Cibolo- Universal City Independent School District (See Accompanying Notes to Financial Statements) 83 CITY OF SCHERTZ, TEXAS PROPERTY VALUE, CONSTRUCTION, AND BANK DEPOSITS LAST TEN FISCAL YEARS COMMERCIAL CONSTRUCTION NUMBER VALUE CONSTRUCTION NUMBER OF UNITS VALUE 1985 64 $2,779,063 132 $ 7,918,922 1986 15 1,600,154 229 14,590,154 1987 16 1,056,074 132 7,834,243 1988 17 325,577 78 5,726,906 1989 2 478,000 62 5,051,217 1990 22 1,988,605 37 3,408,220 1991 11 938,564 33 2,377,438 1992 11 664,016 50 4,140,140 1993 9 235,825 245 22,537,308 1994 21 4,868,688 92 8,323,846 Sources: City Building Inspection Records City Tax Records S. W. T. Research Center Schertz State bank Pacific Southwest *Estimated Actual Value (See Accompanying Notes to Financial Statements) 84 TABLE 13 TOTAL P R O P E R T Y V A L U E• BANK DEPOSITS COMMERCIAL RESIDENTIAL NONTAXABLE $34,089,000 $15,006,912 $ 91,817,653 $10,828,092 40,357,000 15,205,126 95,683,981 10,828,092 56,924,876 15,348,150 102,787,953 10,828,092 64,197,486 53,591,069 148,425,176 10,828,092 62,102,393 64,778,035 202,135,618 4,556,627 81,995,393 50,527,552 205,228,770 498,074 62,714,417 32,198,188 177,354,060 430,425 61,074,204 30,327,586 178,353,991 5,086,170 63,487,855 31,626,493 182,817,263 5,360,890 65,363,928 33,775,788 216,454,372 5,374,948 85 CITY OF SCHERTZ, TEXAS PRINCIPAL TAXPAYERS YEAR ENDED SEPTEMBER 30, 1994 TABLE 14 86 _ 1993 PERCENTAGE OF ASSESSED TOTAL ASSESSED PRINCIPAL TAXPAYERS TYPE OF BUSINESS VALUATION VALUATION 1. Eric W. White Real Estate $ 6,461,781 22.00% 2. PSPI Corp. Machine Fabricating 4,149,170 14.12 3. Sycamore Creek Partners Apartments 3,100,000 10.55 4. Negley Paint Co. industrial 3,028,512 10.31 5. Garden Ridge Pottery Mercantile 2,508,724 8.54 6. Riedel's Family Partners Furniture Store/ Apartments 2,384,176 8.12 7. Guadalupe Valley Electric Utility 2,375,962 8.09 8. Tri -Con Business and Industrial Park Commercial 2,205,578 7.51 9. CHH Parks Commercial 1,792,239 6.10 10. Southwestern Bell Telephone Utility 1,371,240 4.66 TOTAL (11.45% OF 1993 ASSESSED VALUATION $29.377,382 100.00% 86 1 1 1 CITY OF SCHERTZ, TEXAS MISCELLANEOUS STATISTICS YEAR ENDED SEPTEMBER 30, 1994 TABLE 15 Date of Incorporation: December, 1958 Date First Charter Adopted: April, 1974 Date Present Charter Adopted: Amended March, 1989 Form of Government: Council- Manager YEAR SOUARE MILES 1994 24.15 1993 24.15 1992 24.15 1991 23.75 1989 22.42 1988 22.42 1987 22.38 1986 21.51 1985 13.14 1984 12.82 1983 10.53 Miles of Highways, Streets and Alleys Streets and Highways, Paved G` 90.20 Miles Streets, Unpaved 6.78 Miles Alleys / 3.44 Miles Sidewalks / 11.60 Miles Miles of Sewer: Storm 1.8 Miles Sanitary 37.0 Miles Building Permits: VALUE OF -SEAR - 1994 2,771 $18,917,416 1993 2,167 25,705,848 1992 873 6,702,823 1991 545 7,667,699 1990 392 6,652,769 1989 407 6,762,584 1988 368 7,752,335 1987 430 9,725,569 1986 270 16,349,884 1985 378 10,697,985 1984 367 14,218,408 1983 400 5,411,680 (Continued) (See Accompanying Notes to Financial Statements) 87 CITY OF SCHERT2, TEXAS MISCELLANEOUS STATISTICS YEAR ENDED SEPTEMBER 30, 1994 TABLE 15 Fire Protection: Number of Stations 1 Number of Employees (Full and Part -Time) 17 Number of Volunteers 30 Recreation: Parks: 7 Playgrounds 64 Other Recreational Facilities: Baseball Fields 3 Softball Fields 2 Large Pavilion 10,000 Square Feet Covered Small Pavilion 600 Square Feet Covered Picnic Tables: Uncovered 50 Restrooms: Male 6 Female 6 Concessions Stands 1 Community Center 1 City Employees: September 30, 1994 124 Elections: Number of Registered Voters 6,767 Number of Votes in: Last Municipal Election 702 Percentage of Registered Voters Voting in: Last Municipal Election 10.40% Source: Municipal Election Records Population: Census Population Count 1992 (Estimate) 12,000 1990 10,597 1980 7,260 1970 4,061 1960 2,281 1950 1,200 1940 600 (See Accompanying Notes to Financial Statements) 88 SINGLE AUDIT REPORTS 89 (This Page Intentionally Left Blank) 90 d H 11 1 H H 11 The Honorable Mayor and Members of the City Council City of Schertz, Texas Independent Auditor's Report on Schedule of Federal Financial Assistance We have audited the general purpose financial statements of City of Schertz, Texas, as of and for the year ended June 30, 1994, and have issued our report thereon dated February 15, 1995. These general purpose financial statements are the responsibility of the City of Schertz, Texas, management. our responsibility is to express an opinion on these general purpose statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States and the provisions of Office of Management and Budget (OMB) Circular A -1281 Audits of State and Local Governments. Those standards and OMB Circular A -128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose 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. Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements of City of Schertz, Texas, taken as a whole. The accompanying Schedule of Federal Financial Assistance is presented for purposes of additional analysis and is not a required part of the general purpose financial statements. The information in this schedule has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. Certified Public Accountants San Antonio, Texas February 15, 1995 R. LARRYTHOMPSON, C.P.A. / PAUL E. WILLIAMS, C.P.A. / JAMES L. BIEDIGER, JR., C.PA. / CTED KASTOR,CPA. / CHARLIE E.YOUNG, JR., C.P.A. JOHNLEIEC.PA. / H. LEE SCHWARTZMAN, C. P.A. / F.GLENNCRAVEY,C.P.A. / FREDJ.TIMMONS,C.P.A. / JOHN W. GREEN,C.PA. JAMES T McCARTY, C. RA. (RETIRED) 91 THOMPSON, WILLIAMS, MEDIGER, KASTOR0 YOUNG, L.C. Thompson, Williams, Biediger, NORTH TOWER CERTIFIED PUBLICACCOUNTANTS Kastor 800 SA TEXAS N.W. LOOP SUITE 300 SAN ANTONIO, TEXAS 78216 5611 581 ® MEMBERS AMERICAN INSTITUTE OF FAX 210 /8912588 FAX PIO CERTIFIED PUBLIC ACCOUNTANTS Young, L. C. The Honorable Mayor and Members of the City Council City of Schertz, Texas Independent Auditor's Report on Schedule of Federal Financial Assistance We have audited the general purpose financial statements of City of Schertz, Texas, as of and for the year ended June 30, 1994, and have issued our report thereon dated February 15, 1995. These general purpose financial statements are the responsibility of the City of Schertz, Texas, management. our responsibility is to express an opinion on these general purpose statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States and the provisions of Office of Management and Budget (OMB) Circular A -1281 Audits of State and Local Governments. Those standards and OMB Circular A -128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose 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. Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements of City of Schertz, Texas, taken as a whole. The accompanying Schedule of Federal Financial Assistance is presented for purposes of additional analysis and is not a required part of the general purpose financial statements. The information in this schedule has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. Certified Public Accountants San Antonio, Texas February 15, 1995 R. LARRYTHOMPSON, C.P.A. / PAUL E. WILLIAMS, C.P.A. / JAMES L. BIEDIGER, JR., C.PA. / CTED KASTOR,CPA. / CHARLIE E.YOUNG, JR., C.P.A. JOHNLEIEC.PA. / H. LEE SCHWARTZMAN, C. P.A. / F.GLENNCRAVEY,C.P.A. / FREDJ.TIMMONS,C.P.A. / JOHN W. GREEN,C.PA. JAMES T McCARTY, C. RA. (RETIRED) 91 THOMPSON, WILLIAMS, MEDIGER, KASTOR0 YOUNG, L.C. CITY OF SCHERTZ. TEXAS SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE YEAR ENDED SEPTEMBER 30, 1994 FEDERAL /GRANTOR/ PASS- THROUGH GRANTOR/ PROGRAM TITLE Department of Housina and Urban Development Texas Department of Housing and Community Affairs Community Development Block Grant Subrecipient of Bexar County, Texas Project Number B- 93 -UC -48 -0500 RECONCILIATION OF GRANT REVENUES BY FUNDS Water and Sewer System - Contributed Capital 92 FEDERAL PASS - THROUGH CFDA GRANTORS PROGRAM NUMBER NUMBER AMOUNT 14.228 $100,000 1 1 1 t UNEXPENDED FUNDS AT OCTOBER 1, GRANT GRANT 1993 REVENUES EXPENDITURES $ -0- $69,864 $69,864 $69,864 UNEXPENDED FUNDS AT SEPTEMBER 30, 1994 $ -0- CITY OF SCHERTZ, TEXAS NOTES TO SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE YEAR ENDED SEPTEMBER 30, 1994 1. GENERAL The accompanying Schedule of Federal Financial Assistance presents the activity of all federal financial assistance programs of the City of Schertz, Texas. The City of Schertz, Texas, reporting entity is defined in Note 1 to the City's general purpose financial statements. All federal financial assistance passed through other government agencies are included on the schedule. 2. BASIS OF ACCOUNTING The accompanying Schedule of Federal Financial Assistance is presented using the modified accrual basis of accounting, which is described in Note 1 to the City's general purpose financial statements. u 11 The Honorable Mayor and Members of the City Council City of Schertz, Texas Independent Auditor's Report on Internal Control Structure Based on an Audit of General Purpose Financial Statements Performed in Accordance with Government Auditing Standards We have audited the general purpose financial statements of City of Schertz, Texas, as of and for the year ended September 30, 1994, and have issued our report thereon dated February 15, 1995. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States and the provisions of Office of Management and Budget (OMB) Circular A -128, Audits of State and Local Governments. Those standards and OMB Circular A -128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. In planning and performing our audit of the general purpose financial statements of City of Schertz, Texas, for the year ended September 30, 1994, we considered this internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide assurance of the internal control structure. The management of City of Schertz, Texas, is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to asses the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. R. LA RRY THOMPSON, C. P.A. / PAUL E. WILLIAMS, C.P. A. / JAMES L. BIEDIGER, JR., C.P. A. / C. TED KASTOR, C. P. A. / CHARLIE E. YOUNG, JR., C. P. A. JOHN LEIS C PA. / H. LEE SCHWARTZMAN. C. P. k / E GLENN CRAVEY, CPA. / FRED J. TIMMONS, C. PA. / JOHN W GREEN, C. P. A. JAMES T McCARTY, C. PA. (RETIRED) 95 TI- IOMPSON. WILLIAMS. BIEDIGFR, KASTORWYOUNG, L.C. Thompson, Williams, Biediger, NORTH TOWER CERTIFIED PUBLIC ACCOUNTANTS Kastor 800 N.W. LOOP 410, SUITE 300 SAN ANTONIO, TEXAS 782185611 ® MEMBERS AMERICAN INSTITUTE OF FAX 210/3412588 FAX210/54 Young CERTIFIED PUBLIC ACCOUNTANTS L. C. The Honorable Mayor and Members of the City Council City of Schertz, Texas Independent Auditor's Report on Internal Control Structure Based on an Audit of General Purpose Financial Statements Performed in Accordance with Government Auditing Standards We have audited the general purpose financial statements of City of Schertz, Texas, as of and for the year ended September 30, 1994, and have issued our report thereon dated February 15, 1995. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States and the provisions of Office of Management and Budget (OMB) Circular A -128, Audits of State and Local Governments. Those standards and OMB Circular A -128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. In planning and performing our audit of the general purpose financial statements of City of Schertz, Texas, for the year ended September 30, 1994, we considered this internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide assurance of the internal control structure. The management of City of Schertz, Texas, is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to asses the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. R. LA RRY THOMPSON, C. P.A. / PAUL E. WILLIAMS, C.P. A. / JAMES L. BIEDIGER, JR., C.P. A. / C. TED KASTOR, C. P. A. / CHARLIE E. YOUNG, JR., C. P. A. JOHN LEIS C PA. / H. LEE SCHWARTZMAN. C. P. k / E GLENN CRAVEY, CPA. / FRED J. TIMMONS, C. PA. / JOHN W GREEN, C. P. A. JAMES T McCARTY, C. PA. (RETIRED) 95 TI- IOMPSON. WILLIAMS. BIEDIGFR, KASTORWYOUNG, L.C. Independent Auditors Report on Internal Control Structure Based on an Audit of General Purpose Financial Statements Performed in Accordance with Government Audi.ti.n<r Standards (Continued) For the purpose of this report, we have classified the significant internal control structure policies and procedures in the following categories: ' Cash and Cash Equivalents Payables and Accrued Liabilities • Receivables Debt • Inventory Fund Balance ' Property and Equipment For all of the control categories listed above, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk. Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a condition in which the design or operation of one or more of the ' specific internal control structure elements does not reduce to a relatively low level the risk that errors and irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected ' within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control structure and its operations that we consider to be material weaknesses as defined above. This report is intended for the information of management and the city council. This restriction is not intended to limit the distribution of this report, which is a matter of public record. Certified Public Accountaat�i% ' San Antonio, Texas February 15, 1995 1 97 d The Honorable Mayor and Members of the City Council City of Schextz, Texas Independent Auditor's Report on Compliance Based on an Audit of General Purpose Financial Statements Performed in Accordance with Government Auditinv Standards We have audited the general purpose financial statements of City of Schertz, Texas, as of and for the year ended September 30, 1994, and have issued our report thereon dated February 15, 1995, We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States and the provisions of Office of Management and Budget (OMB) Circular A -128, Audits of State and local Governments. Those standards and OMB Circular A -128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. Compliance with laws, regulations, contracts, and grants applicable to City of Schertz, Texas, is the responsibility of the City's management. As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we performed tests of the City's compliance with certain provisions of laws, regulations, contracts, and grants. However, the objective of our audit of the general purpose financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion. The results of our tests indicate that, with respect to the items tested, City of Schertz, Texas, complied, in all material respects, with the provisions referred to in the preceding paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that City of Schertz, Texas, had not complied, in all material respects, with those provisions. This report is intended for the information of management and the city council. This restriction is not intended to limit the distribution of this report, which is a matter of public record. Cert�.fied Public Accountants San Antonio, Texas February 15, 1995 R. LARRY THOMPSON, C.P.A. / PAUL E. WILLIAMS, C.P.A. / JAMES L. BIEDIGER, JR., C. PA. / C.TEDKASTOR,C.P.A. / CHARLIE E. YOUNG, JR., C.P.A. JOHN LEIS C PA. / H. LEE SCHWARTZMAN, C. P.A. / F. GLENN CRAVEY, C.P.A. / FRED J. TIMMONS, C.P.A. / JOHN W. GREEN, C.P.A. JAMES T. McCARTY, C.PA. (RETIRED) 99 THOMPSON, WILLIAMS. BIEDIGER KASTOR d7 YOUNG, L.C. Thompson, Williams, Biediger, NORTH TOWER CERTIFIED PUBLIC ACCOUNTANTS K s or 800 N.W. LOOP 410. SUITE 300 SAN ANTONIO, TEXAS 78216 -5611 210/3442581 MEMBERS AMERICAN INSTITUTE OF FAX 210/341 -2588 491 CERTIFIED PUBLICACCOUNTANTS The Honorable Mayor and Members of the City Council City of Schextz, Texas Independent Auditor's Report on Compliance Based on an Audit of General Purpose Financial Statements Performed in Accordance with Government Auditinv Standards We have audited the general purpose financial statements of City of Schertz, Texas, as of and for the year ended September 30, 1994, and have issued our report thereon dated February 15, 1995, We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States and the provisions of Office of Management and Budget (OMB) Circular A -128, Audits of State and local Governments. Those standards and OMB Circular A -128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. Compliance with laws, regulations, contracts, and grants applicable to City of Schertz, Texas, is the responsibility of the City's management. As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we performed tests of the City's compliance with certain provisions of laws, regulations, contracts, and grants. However, the objective of our audit of the general purpose financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion. The results of our tests indicate that, with respect to the items tested, City of Schertz, Texas, complied, in all material respects, with the provisions referred to in the preceding paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that City of Schertz, Texas, had not complied, in all material respects, with those provisions. This report is intended for the information of management and the city council. This restriction is not intended to limit the distribution of this report, which is a matter of public record. Cert�.fied Public Accountants San Antonio, Texas February 15, 1995 R. LARRY THOMPSON, C.P.A. / PAUL E. WILLIAMS, C.P.A. / JAMES L. BIEDIGER, JR., C. PA. / C.TEDKASTOR,C.P.A. / CHARLIE E. YOUNG, JR., C.P.A. JOHN LEIS C PA. / H. LEE SCHWARTZMAN, C. P.A. / F. GLENN CRAVEY, C.P.A. / FRED J. TIMMONS, C.P.A. / JOHN W. GREEN, C.P.A. JAMES T. McCARTY, C.PA. (RETIRED) 99 THOMPSON, WILLIAMS. BIEDIGER KASTOR d7 YOUNG, L.C. 11 11 1 11 The Honorable Mayor and Members of the City Council City of Schertz, Texas Independent Auditor's Report on the City's Internal control Structure Used in Administering Federal Financial Assistance Programs We have audited the general purpose financial statements of City of Schertz, Texas, as of and for the year ended September 30, 1994, and have issued our report thereon dated February 15, 1995, We conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and Office of Management and Budget (OMB) Circular A -128, Audits of State and Local Governments. Those standards and OMB Circular A -128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. In planning and performing our audit for the year ended September 30, 1994, we considered the City's internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the City's general purpose financial statements and to report on the internal control structure in accordance with OMB Circular A -128. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requixements applicable to federal financial assistance programs. We have addressed internal control structure policies and procedures relevant to our audit of the general purpose financial statements in a separate report dated February 15, 1995, The management of City of Schertz, Texas, is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles, and that federal financial assistance programs are managed in compliance with applicable laws and regulations. Because of inherent limitations in any internal control structure, errors, irregularities, or instances of noncompliance may nevertheless occur R. LARRY THOMPSON, C. P. A. / PAUL E. WILLIAMS, CPA. / JAMES L. BIEDIGER, JR., C. RA. / C. TED KASTOR, C. PA. / CHARLIE E. YOUNG, JR., C. PA. JOHN LEIF, C. PA. / H. LEE SCHWARTZMAN, C. PA. / F. GLENN CRAVEY, C. PA. / FRED J. TIMMONS, C P. A. / JOHN W GREEN, C. P. A. JAMES T MCCARTY, C, RA. (RE77RED) 101 THOMPSON, WILLIAMS. BIEDIGER. KASTOR A YOUNG, LC. Thompson, Williams, Biediger, NORTH TOWER CERTIFIED PUBLICACCOUNTANTS Kasstor 800 N.W. LOOP 410, SUITE 300 SAN ANTONIO, TEXAS 78216 56 11 MEMBERS AMERICAN INSTITUTE OF Y You CERTIFIED PUBLIC ACCOUNTANTS FAX 210/341 FAX 210/341 -P888 Y L.C. The Honorable Mayor and Members of the City Council City of Schertz, Texas Independent Auditor's Report on the City's Internal control Structure Used in Administering Federal Financial Assistance Programs We have audited the general purpose financial statements of City of Schertz, Texas, as of and for the year ended September 30, 1994, and have issued our report thereon dated February 15, 1995, We conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and Office of Management and Budget (OMB) Circular A -128, Audits of State and Local Governments. Those standards and OMB Circular A -128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. In planning and performing our audit for the year ended September 30, 1994, we considered the City's internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the City's general purpose financial statements and to report on the internal control structure in accordance with OMB Circular A -128. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requixements applicable to federal financial assistance programs. We have addressed internal control structure policies and procedures relevant to our audit of the general purpose financial statements in a separate report dated February 15, 1995, The management of City of Schertz, Texas, is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles, and that federal financial assistance programs are managed in compliance with applicable laws and regulations. Because of inherent limitations in any internal control structure, errors, irregularities, or instances of noncompliance may nevertheless occur R. LARRY THOMPSON, C. P. A. / PAUL E. WILLIAMS, CPA. / JAMES L. BIEDIGER, JR., C. RA. / C. TED KASTOR, C. PA. / CHARLIE E. YOUNG, JR., C. PA. JOHN LEIF, C. PA. / H. LEE SCHWARTZMAN, C. PA. / F. GLENN CRAVEY, C. PA. / FRED J. TIMMONS, C P. A. / JOHN W GREEN, C. P. A. JAMES T MCCARTY, C, RA. (RE77RED) 101 THOMPSON, WILLIAMS. BIEDIGER. KASTOR A YOUNG, LC. 11 Independent Auditor's Report on the City's Internal Control Structure Used in Administering Federal Financial Assistance Programs (Continued) and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. For the purpose of this report, we have classified the significant internal control structure policies and procedures used in administering federal financial assistance programs in the following categories: Specific Requirements • Types of Services • Eligibility General Requirements • Political Activity • Davis -Bacon Act • Civil Rights • Cash Management • Federal Financial Reports • Allowable Cost /Cost Principles • Drug -Free Work -Place Act • Administrative Requirements For all of the internal control structure categories listed above, we obtained an understanding of the design of relevant policies and procedures and determined whether they have been placed in operation, and we assessed control risk. During the year ended September 30, 1994, City of Schertz, Texas, had no major federal financial assistance program and expended 100 percent of its total federal financial assistance under its nonmajor federal financial assistance program: • Texas Department of Rousing and Community Affairs We performed tests of controls, as required by OMB Circular A -128, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we have considered relevant to preventing or detecting material noncompliance with specific requirements, general requirements, and requirements governing claims for advances and reimbursements and amounts claimed or used for matching that are applicable to the aforementioned nonmajor programs. our procedures were less in scope than would be necessary to render an opinion on these internal control structure policies and procedures. Accordingly, we do not express such an opinion. Our consideration of the internal control structure policies and procedures used ' in administering federal financial assistance would not necessarily disclose all matters in the internal control structure that might constitute material weaknesses under standards established by the American Institute of Certified Public Accountants. ' A material weakness is a condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the 103 Independent Auditor's Report on the City's Internal Control Structure Used in Administering Federal Financial Assistance Programs (Continued) risk that noncompliance with laws and regulations that would be material to a federal financial assistance program may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control structure and its operations that we consider to be material weaknesses as defined above. This report in intended for the information of management and the city council. This restriction is not intended to limit the distribution of this report, which is a matter of public record. San Antonio, Texas February 15, 1995 [1 certified Accountants " 105 Thompson, Williams, NORTH TOWER Biediger, CERTIFIED PUBLICACCOUNTANTS K 800 N.W. LOOP 910, SUITE 300 I1aSt + r SAN ANTONIO. TEXAS 782165811 �CD1lL MEMBERS AMERICAN INSTITUTE OF 210/341 -2581 FAX 210/341 -2588 You CERTIFIED PUBLIC ACCOUNTANTS The Honorable Mayor and Members of the City Council City of Schertz, Texas ' Independent Auditor's Report on Compliance with the General Requirements Applicable to Federal Financial Assistance Programs We have audited the general purpose financial statements of City of Schertz, Texas, as of and for the year ended September 30, 1994, and have issued our report thereon ' dated February 15, 1995. We have applied procedures to test City of Schertz, Texas, compliance with the ' following requirements applicable to its federal financial assistance programs which are identified in the Schedule of Federal Financial Assistance for the year ended September 30, 1994: political activity, Davis -Bacon Act, civil rights, cash management, federal financial reports, allowable costs /cost principles, Drug -free Work- ' place Act, and administrative requirements. Our procedures were limited to the applicable procedures described in the Office ' of Management and Budget's Compliance Supplement for Single Audits of State and Local Governments. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion of City of Schertz, Texas, ' compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion. With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph of this report. With respect to items not tested, nothing came to our attention that caused us to believe that City of Schertz, Texas, had not complied, in all material respects, with those requirements. This report is intended for the information of management and the city council. ' This restriction is not intended to limit the distribution of this report, which is a matter of public record. *al- qe�ay-, 61"f Certified Public Accountants ' San Antonio, Texas ' February 15, 1995 R. LARRYTHOMPSON, C.P.A. / PAUL E. WILLIAMS, C.PA. / JAMFSL.BIFDIGER,JR.,C.P.A. / C.TFDKASTOR,CPA. / CHARLIE E. YOUNG, JR., CPA. JOHNLEIEC.PA. / H.LFESCHWARTZMAN,C.P.A. / F. GLENN CRAVEY, C.P.A. / FRFDJ.TIMMONS,C.P.A. / JOHN W. GREEN, C.P.A. ' JAMFS T. MCCARTY, C.P.A. (RETIRFD) 107 THOMPSON, WILLIAMS, BIEDIGER, KASTOR'A> YOUNG. L.C. Cl 1 11 1 H ® NORTH TOWER 800 N.W. LOOP 410. SUITE 300 SAN ANTONIO, TEXAS 782165611 1 FAX 2 FAX 210//3434 42588 To the Honorable Mayor and Members of the City Council City of Schertz, Texas Thompson, Williams, Biediger, Kastor Young, L.C. MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS We have audited the general purpose financial statements of the City of Schextz, Texas, as of and for the year ended September 30, 1994, and have issued our report thereon dated February 15, 1995. In connection with our audit on the general purpose financial statements of the City of Schertz, Texas, and with our consideration of the City of Schertz, Texas, internal control structure used to administer federal financial assistance programs, as required by Office of Management and Budget (OMB) Circular A -128, Audits of State and Local Governments, we selected certain transactions applicable to certain nonmajor federal financial assistance programs for the year ended September 30, 1994. As required by OMB Circular A -128, we have performed auditing procedures to test compliance with the requirements governing types of services allowed or unallowed and eligibility that are applicable to those transactions. Our procedures were substantially less in scope than an audit, the objective of which is the expression on an opinion on the City of Schertz, Texas, with these requirements. Accordingly, we do not express such an opinion. With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the preceding paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the City of Schertz, Texas, had not complied, in all material respects, with those requirements. This report is intended for the information of the management and city council. This restriction is not intended to limit the distribution of this report which is a matter of public record. Certified Public Accountants San Antonio, Texas February 15, 1995 R. LARRYTHOMPSON, C.P.A. / PAULE. WILLIAMS, CPA. / JAMES L. BIEDIGER, JR.,C.PA. / C.TED KASTOR, C.P.A. / CHARLIE E. YOUNG,JR., C.P.A. JOHN LFIF,C.PA. / H. LEESCHWARTZMAN, C.P.A. / F. GLENNCRAVEY, CPA. / FRED J. TIMMONS, C. P.A. / JOHN W GREEN,C.BA. JAMES T. McCARTY, OPA. (RETIRED) 109 THOMPSON, W ILI,IAMS, BIEDIGER KASTOR W YOUNG, L..C.