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CAFR FY 1994-95■ COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1995 14EP 0 tp err [ -35 r2� r� CITY OF SCHERTZ, TEXAS To the Mayor and Members of the City Council City of Schertz, Texas Post Office Drawer I Schertz, Texas 78154 In planning and performing our audit of the financial statements of the City of Schertz, Texas, for the year ended September 30, 1995, we considered its internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control structure. However, we noted certain matters involving the internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the City of Schertz, Texas' ability to record, process, summarize, and report financial data consistent with the assertions of management in the financial statements. Finding The books and records of the City were not timely posted and reconciled. This occurred because of a lot of turnover of personnel which was due to illnesses and advancement. Recommendation The City should consider hiring an additional person for the finance department bringing total personnel in that department to four (4) full time and one part -time. R. LARRY THOMPSON, C. P.A. / PAUL E. WILLIAMS, C. PA. / JAMES L. BIEDIGER, JR., C.P.A. / C. TED KASTOR, C. PA. / CHARLIE E. YOUNG, JR., C. P. A. JOHNLEIF,C.P.A. / H. LEE SCHWARTZMAN, C.PA. / F. GLENN CRAVEY, C.PA. / FREDJ TIMMONS,C.P.A. / JOHN W GREEN, C.PA. JAMES T. McCARTY, C. PA. (RETIRED) Thompson, Williams, Biedig iedig er, NORTH TOWER 800 r CERTIFIED PUBLIC ACCOUNTANTS N.W. LOOP 410, SUITE 300 SAN ANTONIO, TEXAS 782165611 210/341 -2581 FAX 210/341 -2588 MEMBERS AMERICAN INSTITUTE OF Young, CERTIFIED PUBLIC ACCOUNTANTS L. C. To the Mayor and Members of the City Council City of Schertz, Texas Post Office Drawer I Schertz, Texas 78154 In planning and performing our audit of the financial statements of the City of Schertz, Texas, for the year ended September 30, 1995, we considered its internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control structure. However, we noted certain matters involving the internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the City of Schertz, Texas' ability to record, process, summarize, and report financial data consistent with the assertions of management in the financial statements. Finding The books and records of the City were not timely posted and reconciled. This occurred because of a lot of turnover of personnel which was due to illnesses and advancement. Recommendation The City should consider hiring an additional person for the finance department bringing total personnel in that department to four (4) full time and one part -time. R. LARRY THOMPSON, C. P.A. / PAUL E. WILLIAMS, C. PA. / JAMES L. BIEDIGER, JR., C.P.A. / C. TED KASTOR, C. PA. / CHARLIE E. YOUNG, JR., C. P. A. JOHNLEIF,C.P.A. / H. LEE SCHWARTZMAN, C.PA. / F. GLENN CRAVEY, C.PA. / FREDJ TIMMONS,C.P.A. / JOHN W GREEN, C.PA. JAMES T. McCARTY, C. PA. (RETIRED) Finding When the office manager, Alice Austin, passed away, it was discovered that some parts of the computer system were known only to her. Recommendation Two or more personnel should be familiar with every system of the City. Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, none of the reportable conditions described above is believed to be a material weakness. This report is intended solely for the information and use of the Mayor, City Council, and management within the administration. However, this report is a matter of public record and its distribution is not limited. Certified Public Accountants San Antonio, Texas April 4, 1996 MAYOR CITY COUNCIL CITY OF SCHERTZ, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 1995 CITY OFFICIALS HONORABLE HAROLD D. BALDWIN KENNETH GREENWALD TIM SWINNEY MAYOR PRO -TEM (May, 1995 to October, 1995) EARL SAWYER 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 (This Page Intentionally Left Blank) ii C O N T E N T S PAGE NUMBER INTRODUCTORY SECTION Letter of Transmittal ix Organization Chart xvii GFOA Certificate of Achievement xviii 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 11 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - General and Debt Service Fund Type 13 Combined Statement of Revenues, Expenses, and Changes in Retained Earnings - All Proprietary Fund Types 15 Combined Statement of Cash Flows - All Proprietary Fund Types 16 Notes to Financial Statements 18 Combining, Individual Fund and Account Group Statements and Schedules General Fund Comparative Balance Sheets 39 Comparative Schedules of Revenues, Expenditures, and Changes in Fund Balances (GAAP Basis) - Budget and Actual 40 Schedule of Revenues Compared to Budget 41 Schedule of Expenditures Compared to Budget (GAAP Basis) 42 iii C 0 N T E N T S PAGE TABLE NUMBER Special Revenue Funds Combining Balance Sheet 45 Combining Statement of Revenue, Expenditures and Changes in Fund Balances 46 Debt Service Fund Comparative Balance Sheets 49 Comparative Statements of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual 50 Capital Projects Funds Comparative Balance Sheets 53 Comparative Statements of Revenue, Expenditures, and Changes in Fund Balances 54 Enterprise Funds Combining Balance Sheet 56 Combining Statement of Revenues, Expenses, and Changes in Retained Earnings 59 Combining Statement of Cash Flows - Al1 Proprietary Fund Types 61 General Fixed Assets 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 73 Assessed and Estimated Actual Value of Property 4 74 iv 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 v PAGE TABLE NUMBER 5 75 6 76 7 77 8 78 9 79 10 81 11 82 12 83 13 85 14 86 15 87 91 93 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 105 Independent Auditor's Report on Compliance with Specific Requirements Applicable to Nonmajor Federal Financial Assistance Program Transactions vi 107 INTRODUCTORY SECTION vii (This Page Intentionally Left Blank) viii 1101clow TO TI�� 1400 SCHERTZ PARKWAY P. O. DRAWER I SCHERTZ, TEXAS 78154 -0890 AC (210) 658 -3510 KERRY R. SWEATT FAX (210) 659-3204 QTY MANAGER April 16, 1996 To the Citizens of the City of Schertz, Texas The comprehensive annual financial report (CAFR) of the City of Schertz, Texas, (The City) for the year ending September 30, 1995 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 1994 -95, and major initiatives for fiscal year 1995 -96. 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. 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 ix (This Page Intentionally Left Blank) City resources. 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 continues to improve and statistical data for fiscal year 1994 -95 economic indicators include: Housing starts were 126 for 1994 -95 as compared to 92 for the previous year. Total permits were valued at $21,150,682 for 1994 -95 compared to $18,917,416 for last year. 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 1994 -95 can be categorized into two words, growth and growth in housing contruction and master planning, the City continues to grow to a point where very few platted residential lots were avaliable at mid -year. By the end of the fiscal year over 303 additional residential lots had been platted. Greenshire Unit II, Dove Meadows Unit II, and Ashley Place Unit I were completed. Dove Meadows Unit III, Greenshire Unit III, Woodland Oaks 5A, 6A, 10 and Ashley Place Unit II began construction. Substantial increase in commercial construction has also occurred including: A new hotel /motel is under construction planning and new commercial food service locations are developing in the IH -35 /FM 3009 area. MAJOR INITIATIVES During the coming year we believe the City will continue to benefit from the generally positive outlook. Renewed interest and emphasis in community development in the form of revisions to the City's comprehensive plan and the development of a Unified Development Code further enhance that sense of optimism and tend to compliment economic development activities. xi 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 a control should not exceed the benefits likely to be derived and, * 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, 1995. General Governmental Functions: Revenues which include General, Special Revenue, Debt Service, and Capital Projects for general governmental function totaled $3,468,746 in 1995, an increase of 7.64% from 1994. Taxes produced 65.90% of general revenues compared to 65.50% 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 1994 Taxes (Property, Sales, Etc.) $2,285,735 65.90% $176,533 Licenses and Permits 134,391 3.87 (10,838) Charges for Services 353,050 10.17 9,319 Fines and Forfeitures 209,719 6.05 13,755 Other Revenues 485,851 14.01 57,284 $3.468,746 100.00% $246,053 xii Expenditures. For general governmental purposes, expenditures totaled $3,686,865, an increase of 25.24% from 1994. Changes in levels of expenditures for major functions of the City over the preceding year are shown in the following tabulation: $3,686,865 100.00% $743,101 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 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 1995 fiscal year was as follows: Net General Obligation Bonded Debt (Principal) General Obligation Bonds Revenue Bonds AMOUNT $1,056,611 RATIO OF DEBT TO ASSESSED VALUE (100 %) OF PRESENT MARKET .34% DEBT PER CAPITA 78.27% MOODY'S INVESTORS SERVICE Baa -1 A In October 1995, the City issued $1,700,000 of General Obligation Refunding Bonds. This refunding bond issue will replace a total of seven bond issues from the water and sewer and general long -term debt. The issuance of theses bonds was given an A rating. xiii PERCENT INCREASE OF (DECREASE) FUNCTION AMOUNT TOTAL FROM 1994 General Government $ 813,789 22.07`k $ 68,988 Public Safety 1,059,331 28.74 81,210 Streets and Parks 349,659 9.48 41,533 Health Services 80,324 2.18 (170) Recreation 176,062 4.78 14,967 Economic Development 66,176 1.79 13,700 Capital Outlay 845,179 22.92 524,791 Debt Service 296,345 8.04 (1,918) $3,686,865 100.00% $743,101 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 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 1995 fiscal year was as follows: Net General Obligation Bonded Debt (Principal) General Obligation Bonds Revenue Bonds AMOUNT $1,056,611 RATIO OF DEBT TO ASSESSED VALUE (100 %) OF PRESENT MARKET .34% DEBT PER CAPITA 78.27% MOODY'S INVESTORS SERVICE Baa -1 A In October 1995, the City issued $1,700,000 of General Obligation Refunding Bonds. This refunding bond issue will replace a total of seven bond issues from the water and sewer and general long -term debt. The issuance of theses bonds was given an A rating. xiii Property Taxes. Current tax collections are 96.5% of the tax levy. This is the fifth consecutive year in which current property tax collections have exceeded 95.0%. The ratio of total collections (current and delinquent) to the current tax levy was 97.5 %. Allocations of property tax levy by purpose for 1995 and the preceding two fiscal years are as follows (amounts per $100 assessed value): PURPOSE General Fund General Obligation Debt 1995 1994 1993 .3478 .3731 .3512 .0797 .0953 .0743 .4275 .4684 .4255 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 $160,099, an increase of $28,992 interest compared to earnings during 1994. This increase was due to additional funds from the General Fund 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, 1995, the general fixed assets of the City amounted to $11,228,539. 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, 1995. Water and Sewer System. Comparative data for the past two fiscal years is presented below: Total Operating Revenue Operating Income (Gross Revenues Less Operating Expenses) Net Revenues (Operating Income Plus Depreciation Less Solid Waste Revenues) Average Annual Bonded Debt Requirements 1995 1994 $1,967,127 $1,997,654 289,089 608,414 292,654 418,820 733,759 300,200 During the year, $185,000 of maturing revenue bonds and $4,000 in Public Facility HUD Bond, and $20,619 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, 1995, SAFES increased its revenue 11.2% and increased operating expenses by 18.9 %. SAFES is fully dependent on income fees generated from services rendered and the contracted citiesf support to cover operations costs. This year SAFES had an operating income before depreciation of $113,382. This is net of a charge for future uncollectible accounts of $69,853 that was taken against the operating expenses for the current year. xiv 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, 1994. 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. 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 1994 -95. 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, Kerry R. Sweatt City Manager Debra Kline Finance Officer xv &. 'B 0 cX XX Is. 1 0 Ef 99 ..off omgqQ pal -0 0 O f o u C" c COO Sri a W c :e W o IL -j 9 1 a. • C� TNN 0 6 Z1. ca a c c c a O CL CL E E W W 00 E E P 0 L. &. a c so C c ZQ s n is ca Eft O ouccm &. 'B 0 cX XX Is. 1 0 Ef 99 ..off omgqQ pal -0 0 O f o u C" c COO Sri a W c :e W o IL -j 9 1 a. • C� TNN 0 6 Z1. ca a c c c a O CL CL E E W W 00 E E P b- 0 CL ai mas A, low in m AW: o ec 03 c E 23 I MO Em le .2 Inc. 02 cl U*. al CA I a 9 1 6 1 V) IV V- 914 C. V- V- W- j! CL. AD. c 0 C LC cm E mo CL cc = 0 0 0 in u. a. 12 40 Q Tr T xvi 0 L. &. a c so C c c s n b- 0 CL ai mas A, low in m AW: o ec 03 c E 23 I MO Em le .2 Inc. 02 cl U*. al CA I a 9 1 6 1 V) IV V- 914 C. V- V- W- j! CL. AD. c 0 C LC cm E mo CL cc = 0 0 0 in u. a. 12 40 Q Tr T xvi Certificate of Achievement for Excellence in Financial Repofting Presented to City of Schertz, Texas For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 1994 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. Y��0/ President o 4 AO*I Executive Director xvii (This Page Intentionally Left Blank) %viii FINANCIAL SECTION (This Page Intentionally Left Blank) NORTH TOWER 800 N.W. LOOP 410. SUITE 30ON SAN ANTONIO, TEXAS 78216 -5611 210/341 -2581 FAX 210/341 -2588 To the Honorable Mayor and Members of the City Council City of Schertz, Texas Thompson, Williams, Biediger, Kantor Young, L.C. Independent Auditor's Report CERTIFIED PUBLIC ACCOUNTANTS 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, 1995, as listed in the table of contents. These financial statements are the responsibility of the CityFs management. our responsibility is to express an opinion on these financial 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 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, 1995, 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, 1995, 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. LARRY THOMPSON, C.P.A. / PAUL E. WILLIAMS, C. PA. / JAMES L BIEDIGER. JR., C.P.A. / C. TED KASTOR. C. P. A. / CHARLIE E. YOUNG, JR.. C. PA. JOHN LEIF. C. PA. / H. LEE SCHWARTZMAN, C. P.A. / F. GLENN CRAVEY. C. P. A. / FRED J. TIMMONS. C. PA. / JOHN W. GREEN, C. PA. JAMES T. MCCARTY. C. P.A. (RETIRED) 3 (This Page Intentionally Left Blank) 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. San Antonio, Texas April 4, 1996 Certified Public Accountants 5 (This Page Intentionally Left Blank) GENERAL PURPOSE FINANCIAL STATEMENTS N O M M V• v rl O .•1 N .-1 M N OD 0 N .-I 10 .-I O Y1 O .•1 O u1 O n 10 h N 'M a 01 In O 10 O1 M M N at M at h OD rl N 1114 �1 M rl M h 00 0 w w CI .-1 C4 .4 n N O H 01 OD O 10 r' w M .-1 .4 01 10 O I�1 H 01 M .4 N OI 01 .-I H N .4 N q 1 N 0 N H QH F H .-1 �1• 1 'w In 0 0 1 N 01 n V4 In E4 O In M ON w ID N N In -I O O 0 M Ip p OD M In .-1 O M 01 In n O O p0i1 v1 OD 0 1� 10 .-1 O 10 n1 M In O/ /D O W 01 N m h 0 O .-1 10 h OD .4 0 O 1D Dd 01 01 v1 In h .-1 h 10 �4 w .d H r. 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IO n n o .-1 h M F7 n 1 O n 00 n n M 10 1 O .•1 .•1 O M W .-1 CO CO 1 .-1 .-1 1 PpY��I Q RI In ! M O1 N Co M 01 01 O ID 1D to In .-1 10 Co N N co a0 0 .•TT.. co M In O %D .-1 In ! 7D n lO ! ID M co .-1 ! ! .•1 1D In Hp O W N .-1 M N ! ! CO O M .4 w ri .-1 10 N N N N 01 n H a N v O .Y. CJ M yr t* r/ N M N Vr N m yr .-t .4 Vr• y H W r r r r ON a r r r I I 1 0 1 r o .4 1 r 1 .-t 1D In h .4 .4 w m ID o ID o ! 0 tD IO .a .•1 In I In M n 0 a 1n In o o ! w o In 1-1 ! ! .-j .4 In h In n 0 ID o 1O O .•1 rn v H .4 V w .. ,. U I 1 I 1 ! 1 I 1 1 1 1 1 O In N 01 N y H O1 O!! 1n O M M n ED 00 W W I In .i \O 01 N N IO .1 In k1 W 10 M 01 m ! ! ! .•1 N N N N I� E-4 >w I I I I!! 1 1 1 1 1 h I I I h N N N N In M I-] CD CD o D .-1 H H tn• /? N U W a w N 14 O 01 ! M 01 .1 01 ! N M 0 1 1 M 10 1 M 01 h ! H M 01 In H ID N O M N N 0 o0 o In O h h N h O Ia n M O n Ol n n M 1D M O O o1 1 Io co DD n n In Ip�d In ! M 01 '.4 ! M 01 01 O tD N ! h n N N ! In O (�7 OD M 1n o m n .-1 1n ! OD 1•. In 01 N ! ! ! O m 01 N .4 M N N N OD O M rl tp 1p N N ! n I (9 N M .•i N .4 t? t? y d N 01 0 0 V W •• •1•I y d b o ri ^J a q M .•1 QQI d qN QI pA to w N M % b N D m "m °b 1wn -•ro o t" w W 0q 4aJ a W o H C p W U W W H r d Itl I UUq U U M 0 p N d Dp d FU1 •U Id W �pU1 U VI l H 41 H -A � 41 a N ow > 0 d 41 p � b M wd a 0 d M 40 tP M O 0 td T N w a 4J > 9 11 b id 0 w •� 41 al M 10 0 0 v IM V O 0 of 0 w 0 H 0 W O 0 1 RR��II b4 ow U ° O M • U H ° W m .4 b y .i 0 M SAG Itl y•H O d1 d0 U 0 ■ ro a p .04 a to 41 d 0 tl RU 1 IFFw11 1W FA 0 N U t ■ H 0 40 0 10 U F 0 -1 0 N E W O ■ 0 V �4 d U 4) �A q � �A N H N U � U 10 M N M 4) .0 0 U 0 14 $3 11 W m o0 w a H li d 41 W i i � Pd w O ut .i (This Page Intentionally Left Blank) 12 CITY OF SCHERT2, TEXAS COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL, - GENERAL AND DEBT SERVICE FUND TYPE YEAR ENDED SEPTEMBER 30, 1995 GENERAL FUND DEBT SERVICE FUND VARIANCE VARIANCE FAVORABLE FAVORABLE BUDGET ACTUAL (UNFAVORABLE) BUDGET ACTUAL (UNFAVORABLE) REVENUES Taxes $2,249,765 $2,285,735 Licenses and Permits 114,600 134,391 Charges for Services 356,200 353,050 Fines and Forfeitures 192,500 209,719 Other 189,049 291,864 Total Revenues $3,102,114 $3,274,759 EXPENDITURES Current General Government $ 841,992 $ 813,789 Public Safety 1,156,755 1,059,331 Streets and Parks 400,912 349,659 Health 90,980 80,324 Recreation 186,852 176,062 Economic Development 58,021 52,989 Capital Outlay 102,851 94,999 Debt Service Principal - - Interest Total Expenditures $2,838,363 $2,627,153 Excess of Revenues Over (Under) Expenditures $ 263,751 $ 647,606 OTHER FINANCING SOURCES (USES) Operating Transfers (Out) (243,582) (242,879) Excess (Deficiency) of Revenues and other Financing Sources Over Expenditures and Other Financing Uses $ 20,169 5 404,727 FUND BALANCES - OCTOBER 1, 1994 785,774 FUND BALANCES - SEPTEMBER 30, 1995 $1,190,501 (See Accompanying Notes to Financial Statements) 13 $ 35,970 - 19,791 - - - (3,150) - - - 17,219 - - - 102,815 6,594 6,594 $172,645 $ -0- $ 6,594 $6,594 $28,203 $ - $ - S 97,424 - - - 51,253 - - - 10,656 - - - 10,790 - - - 5,032 - - - 7,852 - - - 165,000 165,000 - 131,345 131,345 $211,210 $ 296,345 S 296,345 $ -0- $383,855 $(296,345) $(289,751) $6,594 703 243,582 242,879 (703) $3846558 S (52,763) $ (46,872) $5,891 61,872 $ 15,000 (This Page Intentionally Left Blank) 14 CITY OF SCHERTZ, TEXAS COMBINED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN RETAINED EARNINGS - ALL PROPRIETARY FUND TYPES YEAR ENDED SEPTEMBER 30, 1995 (WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1994) OPERATING REVENUE 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 Expense Amortization Reimbursements Other Total Nonoperating Revenues (Expenses) Net Income (Loss) before Operating Interfund Transfers OPERATING TRANSFERS - IN (OUT) Net Income (Loss) TOTALS INTERNAL (MEMORANDUM ONLY) ENTERPRISE SERVICE 1995 1994 $2,517,892 $ 48,396 $2,566,288 $2,554,040 $ 561,845 $22,079 $ 583,924 $ 506,687 411,336 - 411,336 464,118 229,800 - 229,800 228,185 215,337 14,517 229,854 240,404 2410,711 27,305 269,016 147,699 69,853 - 69,853 71,660 $1,729,882 $63,901 $1,793,783 $1,658,753 $ 788,010 $(15,505) $ 772,505 $ 895,287 408,993 2,765 411,758 391,346 $ 379,017 $(18,270) $ 360,747 $ 503,941 $ 93,416 $ - (224,648) - (48) - 40,746 12,000 4,280 - $ (86,254) $ 12,000 $ 93,416 $ 49,975 (224,648) (209,217) (48) (48) 52,746 31,293 4,280 11198 $ (74,254) $ (126,799) $ 292,763 $ (6,270) $ 286,493 $ 377,142 - - - (67,400) $ 292,763 $ (6,270) $ 286,493 $ 309,742 RETAINED EARNINGS (DEFICIT) - OCTOBER 1 $ 419,617 $(15,487) $ 404,130 $ (352,494) Prior Period Adjustment - - - 446,882 Retained Earnings As Restated $ 419,617 $(15,487) $ 404,130 $ 94,388 RETAINED EARNINGS (DEFICIT) - SEPTEMBER 30 $ 712,380 $(21,757) $ 690,623 $ 404,130 (See Accompanying Notes to Financial Statements) i CITY OF SCHERTZ, TEXAS COMBINED STATEMENT OF CASH FLOWS - ALL PROPRIETARY FUND TYPES YEAR ENDED SEPTEMBER 30, 1995 (WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1994) CASH AND CASH EQUIVALENTS OCTOBER 1, 1994 1,518,723 89 TOTALS 1,345,544 ENTERPRISE INTERNAL (MEMORANDUM ONLY) FUNDS SERVICE 1995 1994 $1,539,306 CASH FLOWS FROM OPERATING Comprised of ACTIVITIES Current Assets $ 698,963 $ 90 $ 699,053 Cash Received from Customers $ 2,240,947 $ 54,364 $ 2,295,311 $2,627,299 Cash Payments to Suppliers for Goods and Services (1,168,425) (42,036) (1,210,461) (1,159,246) Cash Payments to Employees for Services (559,001) (22,204) (581,205) (505,801) Other 45,026 12,000 57,026 32,449 Net Cash Provided by Operating Activities $ 558,547 $ 2,124 $ 560,671 $ 994,701 CASH FLOWS FROM NON - CAPITAL FINANCING ACTIVITIES Operating Transfers in (Out) $ - $ - $ - $ (67,400) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and Construction of Capital Assets $ (203,745) $ (2,123) $ (205,868) $ (635,386) Principal Payments on Long - Term Debt (239,619) - (239,619) (198,151) Proceeds from Issuance of Long -Term Debt 30,020 - 30,020 30,000 Interest Paid on Long -Term Debt (228,402) - (228,402) (208,695) Capital Contributed for Capital Assets 10,125 - 10,125 208,333 Net Cash Used in Capital and Related Financing Activities $ (631,621) $ (2,123) $ (633,744) $ (803,899) CASH FLOWS FROM INVESTING ACTIVITIES Interest on Investments 93,567 - 93,567 $ 49,866 Net Increase in Cash $ 20,493 $ 1 $ 20,494 $ 173,268 CASH AND CASH EQUIVALENTS OCTOBER 1, 1994 1,518,723 89 1,518,812 1,345,544 CASH AND CASH EQUIVALENTS - SEPTEMBER 30, 1995 $ 1,539,216 $ 90 $1,539,306 $1,518,812 Comprised of Current Assets $ 698,963 $ 90 $ 699,053 $ 287,659 Restricted Assets 840,253 - 840,253 1,231,153 $ 1,539,216 1 90 $1,539,306 $1,518,812 (Continued) (See Accompanying Notes to Financial Statements) 16 CITY OF SCHERTZ, TEXAS COMBINED STATEMENT OF CASH FLOWS - ALL PROPRIETARY FUND TYPES YEAR ENDED SEPTEMBER 30, 1995 (WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1994) TOTALS ENTERPRISE INTERNAL (MEMORANDUM ONLY) FUNDS SERVICE 1995 1994 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 Change in Assets and Liabilities (Increase) Decrease in Accounts Receivable (Increase) Decrease in Inventory (Increase) Decrease in Due from Other Funds Increase (Decrease) in Vouchers Payable Increase (Decrease) in Due to Other Funds Increase (Decrease) in Accrued Vacation Increase (Decrease) in Accrued Interest Payable Increase (Decrease) in Customer Deposits NET CASH PROVIDED BY OPERATING ACTIVITIES Supplemental Disclosure Non -Cash Capital and Related Financing Transactions Acquisition and Construction of Capital Assets Note Payable Issued Federal Financial Assistance Contributed Capital $292,763 $(6,270) $286,493 $503,941 409,041 2,765 411,806 391,346 69,853 - 69,853 71,660 (61,627) - (61,627) (111,752) 25,137 (214) 24,923 (37,247) (760,397) 1,084 (759,313) 25,465 6,276 - 6,276 38,958 578,265 4,634 582,899 119,553 2,844 125 2,969 886 (3,754) - (3,754) 522 146 - 146 (8,631) $558,547 2,124 $560,671 $994,701 $203,745 $2,123 $205,868 $635,386 30,020 - 30,020 30,000 10,125 - 10,125 69,864 - - - 138,469 it CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1995 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. Financial Reporting Entity The city of Schertz is a city in which citizens elect the mayor and council members at large. The accompanying financial statements present the City's primary government and component units over which the City exercises significant influence. Significant influence or accountability is based primarily on operational or financial relationships with the city. 1. Blended Component Unit: 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, 1995 are available upon request from City Hall. 2. Discretely Presented Component Unit: The Library Fund's governing board is appointed by the Schertz city Council and provides the majority of its funding. The Library provides a service to citizens outside of the City of Schertz. 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 Projects Funds), and the servicing of general long -term debt (Debt Service Funds). The General Fund is used to account for all activities of the City not accounted for in some other fund. 18 CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30-1995 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) B. Fund Accounting (Continued) 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. 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 operation 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 are 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. CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1995 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Basis of Accounting (Continued) Government funds include the following fund types: The general fund is the government's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The special revenue funds account for revenue sources that are legally restricted to expenditure for specific purposes (not including expendable trusts or major capital projects). The debt service fund accounts for the servicing of general long -term debt not being financed by proprietary or nonexpendable trust funds. The capital projects funds account for the acquisition of fixed assets or construction of major capital projects not being financed by proprietary or nonexpendable trust funds. Enterprise funds are used to account for those operations that are financed and operated in a manner similar to private business or where the board has decided that the determination of revenues earned, costs incurred, and /or net income is necessary for management accountability. Internal service funds account for the operations that provide services to other departments or agencies of the government, or to other governments, on a cost - reimbursement basis. Account Group. The general fixed assets account group is used to account for fixed assets not accounted for in proprietary or trust funds. The general long -term debt account group is used to account for general long -term debt and certain other liabilities that are not specific liabilities of proprietary or trust funds. 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. 20 CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1995 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. Budgets (Continued) 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 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 /Payables During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. These receivables and payables are classified as "due from other funds" or "due to other funds" on the balance sheet. Short -term interfund loans are classified as "interfund receivables /payables ". G. Inventories Inventories are valued at cost, which approximates market, using the first -in first - out (FIFO) method. The costs of governmental fund -type inventories are recorded as expenditures when consumed rather than when purchased. H. 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. 21 CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1995 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 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. 22 CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1995 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. 23 CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1995 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. 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, savings accounts, and certificate of deposit that are 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, 1995, cash deposits with financial institutions amounted to $3,362,108. Bank balances totaled $3,610,686 and were entirely collateralized by securities held by the City's agent in the City's name. There are three (3) categories of risk that apply to the City's bank balances: 1. Insured or collateralized with securities held by the City or by the City's agent in the City's name. 2. Collateralized with securities held by pledging financial institution's trust department of the City's agent in the City's name. 3. Uncollateralized. 24 CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1995 NOTE 3: DEPOSITS WITH FINANCIAL INSTITUTIONS (CONTINUED) Deposits, categorized by level of risk are: PRIMARY GOVERNMENT Cash and Cash Equivalents Investments TOTALS COMPONENT UNIT Cash and Cash Equivalents Investments TOTALS BANK CATEGORY CARRYING BALANCE 1 2 3 AMOUNT $1,228,933 $ - $1,228,933 $ - $ 987,701 2,361,337 - 2,361,337 - 2,361,337 $3,590,270 $_0_ $3,590,270 $_0_ $3,349,038 $ 13,970 $ - $ 13,970 $ - $ 6,624 6,446 - 6,446 - 6,446 $ 20,416 $ -0- $ 20,416 $ -0- $ 13,070 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, 1995, the City invested in demand deposits and certificates of deposit. NOTE 4: RECEIVABLES Receivables at September 30, 1995 consist of the following: RECEIVABLES Taxes Account Gross Receivables Less: Allowance for Uncollectible NET TOTAL RECEIVABLES DEBT CAPITAL GENERAL SERVICE PROJECTS ENTERPRISE TOTAL $66,756 $14,648 $ - $ - $ 81,404 13,341 - 80,356 510,565 604,262 $80,097 $14,648 $80,356 $510,565 $685,666 3,338 732 - 97,667 101,737 76 759 1$ 3,916 $80,356 $412,898 $583,929 The delinquent taxes receivable account represents past years of uncollected tax levies and is also reflected as a deferred revenue of equal amount. 25 CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1995 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 for 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: $10,388,595 $845,179 $5,235 $11,228,539 *Adjusted to Include Land of $15,739 in the Schertz Development Foundation The following is a summary of the property, plant, and equipment of the Proprietary Funds at September 30, 1995: Buildings Improvements Other than Buildings Machinery and Equipment Construction in Progress Accumulated Depreciation Land ENTER] WATER /SEWER $ 195,724 8,879,069 544,197 341,125 $9,960,115 4,920,715 $5,039,400 160,521 ?RISE INTERNAL SAFES SERVICE TOTAL $ 26,656 $58,804 $ 281,184 - - 8,879,069 425,024 25,198 994,419 - - 341,125 $451,680 $84,002 $10,495,797 256,685 23,652 5,201,052 $194,995 $60,350 $ 5,294,745 - - 160,521 $5,199,921 $194,995 $60,350 $ 5,455,266 In the proprietary and internal service funds, the following useful lives are used to compute depreciation: Buildings Sewer and Water Lines Equipment 30 Years 50 Years 5 - 10 Years M BALANCES AT BALANCES AT OCTOBER 1, SEPTEMBER 30, 1994 ADDITIONS DEDUCTIONS 1995 Land $ 403,589* $ 25,106 $5,235 $ 423,460 Buildings 1,114,290 - - 1,114,290 Improvements Other than Buildings 7,197,121 725,074 - 7,922,195 Vehicles 694,477 46,175 - 740,652 Equipment 979,118 48,824 - 1,027,942 $10,388,595 $845,179 $5,235 $11,228,539 *Adjusted to Include Land of $15,739 in the Schertz Development Foundation The following is a summary of the property, plant, and equipment of the Proprietary Funds at September 30, 1995: Buildings Improvements Other than Buildings Machinery and Equipment Construction in Progress Accumulated Depreciation Land ENTER] WATER /SEWER $ 195,724 8,879,069 544,197 341,125 $9,960,115 4,920,715 $5,039,400 160,521 ?RISE INTERNAL SAFES SERVICE TOTAL $ 26,656 $58,804 $ 281,184 - - 8,879,069 425,024 25,198 994,419 - - 341,125 $451,680 $84,002 $10,495,797 256,685 23,652 5,201,052 $194,995 $60,350 $ 5,294,745 - - 160,521 $5,199,921 $194,995 $60,350 $ 5,455,266 In the proprietary and internal service funds, the following useful lives are used to compute depreciation: Buildings Sewer and Water Lines Equipment 30 Years 50 Years 5 - 10 Years M CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1995 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, 1995: Certificates of Obligation 1990 Series 850,000 Public Property Finance Contractual Obligation 1991 Series 125,000 TOTAL GENERAL OBLIGATION BONDS, CERTIFICATES OF OBLIGA- TION AND CON- TRACTUAL OBLIGATION Compensated Absences Payable 7 - 9.0% 740,000 7.25% 35,000 45,000 695,000 - 35,000 - $1,969,000 $ -0- $165,000 $1,804,000 BALANCE BALANCE OUTSTANDING OUTSTANDING OCTOBER 1, SEPTEMBER 30, 1994 ADDITIONS DEDUCTIONS 1995 $102,248 $108,856 $102,248 S108,856 27 BALANCE BALANCE OUTSTANDING OUTSTANDING ORIGINAL INTEREST OCTOBER 1, DURING YEAR SEPTEMBER 30, AMOUNT RATE 1994 ISSUED RETIRED 1995 General Obligation Bonds 1962 Series $301,000 3.63% $ 86,000 $ - $ 12,000 $ 74,000 1972 Series 150,000 3.63% 13,000 - 13,000 - 1975 Series 175,000 6.2 - 7.0% 140,000 - 10,000 130,000 1987 Series 445,000 6.2 - 8.3% 335,000 - 25,000 310,000 1992 Series 620,000 5.2 - 7.2% 620,000 - 25,000 595,000 $1,194,000 $ -0- $ 85,000 $1,109,000 Certificates of Obligation 1990 Series 850,000 Public Property Finance Contractual Obligation 1991 Series 125,000 TOTAL GENERAL OBLIGATION BONDS, CERTIFICATES OF OBLIGA- TION AND CON- TRACTUAL OBLIGATION Compensated Absences Payable 7 - 9.0% 740,000 7.25% 35,000 45,000 695,000 - 35,000 - $1,969,000 $ -0- $165,000 $1,804,000 BALANCE BALANCE OUTSTANDING OUTSTANDING OCTOBER 1, SEPTEMBER 30, 1994 ADDITIONS DEDUCTIONS 1995 $102,248 $108,856 $102,248 S108,856 27 CITY OF SCHERT2, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1995 NOTE 6: LONG -TERM DEBT (CONTINUED) A. General Long-Term Debt (Continued) YEAR ENDED GENERAL CERTIFICATE OF SEPTEMBER 30, OBLIGATION OBLIGATION 1996 $ 160,314 $ 94,797 1997 154,435 95,523 1998 154,298 96,347 1999 152,736 97,293 2000 147,125 97,806 2001 -2005 485,623 500,113 Thereafter 302,390 - TOTAL $1,556,921 $981,879 Principal $1,109,000 $695,000 Interest 447,921 286,879 TOTAL $1,556,921 $981,879 B. Proprietary Long -Term Debt The following is a summary of changes in proprietary long -term debt for the year ended September 30, 1995: $1,555,000 $ -0- $100,000 $1,455,000 Certificates of obliga- tion 1981 Series $ 150,000 9.3 - 10.00% $ 65,000 $ - $ 10,000 $ 55,000 1983 Series 1,250,000 8.2 - 10.00% 810,000 - 65,000 745,000 1992 Series 200,000 190,000 - 10,000 180,000 $1,00 $ _0_ 85,000 $ 980,000 28 BALANCE BALANCE OUTSTANDING OUTSTANDING ORIGINAL INTEREST OCTOBER 1, SEPTEMBER 30, AMOUNT RATE 1994 ISSUED RETIRED 1995 Revenue Bonds 1968 Series $ 579,000 4.0 - 5.75`k $ 40,000 $ - $ 40,000 $ - 1973 Series 165,000 5.75 - 6.10% 165,000 - - 165,000 1975 Series 325,000 7.0 - 7.75`is 215,000 - 10,000 205,000 1981 Series 475,000 9.0 - 10.0% 220,000 - 35,000 185,000 1988 Series 1,020,000 6.3 - 8.30% 915,000 - 15,000 900,000 $1,555,000 $ -0- $100,000 $1,455,000 Certificates of obliga- tion 1981 Series $ 150,000 9.3 - 10.00% $ 65,000 $ - $ 10,000 $ 55,000 1983 Series 1,250,000 8.2 - 10.00% 810,000 - 65,000 745,000 1992 Series 200,000 190,000 - 10,000 180,000 $1,00 $ _0_ 85,000 $ 980,000 28 CITY OF SCHERT2, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1995 NOTE 6: LONG -TERM DEBT (CONTINUED) B: Proprietary Long -Term Debt (Continued) BALANCE BALANCE OUTSTANDING OUTSTANDING ORIGINAL INTEREST OCTOBER 1, SEPTEMBER 30, AMOUNT RATE 1994 ISSUED RETIRED 1995 Public Facility Loan (HUD) $142,000 5% Note Payable $273,000 7.6% Note Payable $ 30,000 8.25% $ 88,000 $ _0_ 4,000 $ 84,000 $ 216,636 $ - $20,619 $196,017 30,000 30,020 30,000 30,020 $ 246,636 $30,020 $50,619 $226,037 The annual requirements to amortize all debt outstanding as of September 30, 1995 including interest payments are as follows: $2,176,129 $1,335,718 $130,200 $293,365 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 are payable from a levy of ad valorem taxes upon all taxable property within the City, and are 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 29 CERTIFICATES PUBLIC YEAR ENDED REVENUE OF FACILITY NOTES SEPTEMBER 30, BONDS OBLIGATION LOAN PAYABLE 1996 $ 207,587 $ 183,338 $ 8,200 $ 70,092 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 - 213,040 7,400 37,212 2001 -2005 - 388,050 34,000 74,425 Thereafter - - 57,200 - $2,176,129 $1,335,718 $130,200 $293,365 Principal $1,455,000 $ 980,000 $ 84,000 $226,037 Interest 721,129 355,718 46,200 67,328 $2,176,129 $1,335,718 $130,200 $293,365 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 are payable from a levy of ad valorem taxes upon all taxable property within the City, and are 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 29 CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1995 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, 1995: General Fund Special Revenue Funds Development Foundation Forestry Debt Service Capital Projects Bond Issues Enterprise Funds Water and Sewer System SAFES Internal Service Fund Component Unite - Library NOTE 8: SEGMENT INFORMATION - ENTERPRISE FUNDS DUE FROM DUE TO OTHER FUNDS OTHER FUNDS $ 540,391 $ 272,439 218 292,154 867,481 879 25 763 124,137 494,840 741,534 46,971 20,324 140 $1.701.148 $1,701,148 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, 1995, is as follows: NET INCOME 30 $ 188,667 $104,096 $ 292,763 WATER /SEWER SAFES TOTAL Operating Revenues $1,967,127 $550,765 $2,517,892 Operating Expenses, Exclusive of Depreciation 1,292,499 437,383 1,729,882 Depreciation 385,539 23,454 408,993 Operating Income $ 289,089 $ 89,928 $ 379,017 Other Income (Expenses) (100,422) 14,168 (86,254) NET INCOME 30 $ 188,667 $104,096 $ 292,763 CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1995 NOTE 8: SEGMENT INFORMATION - ENTERPRISE FUNDS (CONTINUED) NOTE 9: CONTRIBUTED CAPITAL During the year, contributed capital increased by the following amounts: WATER /SEWER SAFES TOTAL Total Assets $7,713,817 $595,999 $8,309,816 Total Equity $3,980,873 $508,456 $4,489,329 Working Capital $ 796,831 $313,461 $1,110,292 Additions to Fixed Assets $ 193,512 $$ 67,114 $$ 260,626 Outstanding Long -Term Debt $2,715,017 $ 30,020 $2,745,037 NOTE 9: CONTRIBUTED CAPITAL During the year, contributed capital increased by the following amounts: CONTRIBUTED CAPITAL, SEPTEMBER 30 $3,550,180 $226,769 $63,577 $3,840,526 NOTE 10: OPERATING TRANSFERS Operating transfers are comprised as follows: IN OUT General Fund $ - $242,879 Debt Service Fund 242,879 - $242,879 $242,879 NOTE 11: DEFICIT RETAINED EARNINGS For the year ended September 30, 1995, the Internal Service Fund has a deficit retained earnings balance of $21,757. This occurred again because sufficient transfers were not made from other funds to supplement revenue in order to exceed expenditures. Transfers from other funds will be adjusted in 1996 to offset this deficit balance. NOTE 12: PENSION PLAN Descrivtion 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. 31 WATER AND INTERNAL SEWER SAFES SERVICE SOURCE FUND FUND FUND TOTAL Developers - $ - $ - $ - $ - Federal Financial Assistance 10,125 - - 10,125 Volunteers - - - - Total Additions $ 10,125 $ -0- $ -0- $ 10,125 Contributed Capital, October 1 3,540,055 226,769 63,577 3,830,401 CONTRIBUTED CAPITAL, SEPTEMBER 30 $3,550,180 $226,769 $63,577 $3,840,526 NOTE 10: OPERATING TRANSFERS Operating transfers are comprised as follows: IN OUT General Fund $ - $242,879 Debt Service Fund 242,879 - $242,879 $242,879 NOTE 11: DEFICIT RETAINED EARNINGS For the year ended September 30, 1995, the Internal Service Fund has a deficit retained earnings balance of $21,757. This occurred again because sufficient transfers were not made from other funds to supplement revenue in order to exceed expenditures. Transfers from other funds will be adjusted in 1996 to offset this deficit balance. NOTE 12: PENSION PLAN Descrivtion 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. 31 CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1995 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 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) years, 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`k, 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 September, 1994. 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. 32 CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1995 NOTE 12: PENSION PLAN (CONTINUED) The City's total payroll in fiscal year 1995 was $1,966,061 and the City's contributions were based on a payroll of $1,844,503. Both the City and the covered employees made the required contributions, amounting to $91,702, (4.53% for the months in calendar year 1994, 2.56% normal cost plus 1.97% to amortize the unfunded actuarial liability and 5.12% for the months in calendar year 1995, 3.15% normal cost plus 1.97% to amortize the unfunded actuarial liability) for the City and $92,364 (5%) for the employees. The City adopted changes in the plan since the previous actuarial valuation which had the effect of increasing the City's contribution rate for 1995 by .20% of payroll. 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, 1994. 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 98.6_% of book value as of December 31, 1994. Pension Benefit Obligation Annuitants Currently Receiving Benefits $134,123 Terminated Employees 3,378 Current Employees Accumulated Employee Contributions Including Allocated Invested Earnings 173,218 Employer- Financed Vested 396,511 Employer- Financed Nonvested 169,640 TOTAL $876,870 Net Assets Available for Benefits, at Book Value 5320,126 Unfunded Pension Benefit Obligation S556,744 33 CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 1995 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. The numbers above reflect the adoption of changes in the plan since the previous actuarial valuation, which had the effect of increasing the pension benefit obligation by $24,780. 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, 1995 and 1994 is available as follows: YEAR ENDED SEPTEMBER 30, 1995 1994 Net Assets Available for Benefits $320,126 $133,346 Pension Benefit Obligation $876,870 $654,382 Percentage Funded 36.51% 20.38% Unfunded (Assets in Excess of) Pension Benefit Obligation $556,744 $521,036 Annual Covered Payroll $1,844,503 $1,633,320 Unfunded Pension Benefit Obligation as a `k to Payroll 30.18% 31.90% City Contribution to TMRS $91,702 $70,991 Average City Rate 4.97% 4.35% NOTE 13: SUBSEQUENT EVENT In October 1995, the City issued $1,700,000 of General Obligation Refunding Bonds to consolidate the payout of bonds from both the water and sewer fund and general long -term debt account group. A toal of seven bonds were included in the refunding issue. NOTE 14: COMMITMENTS AND CONTINGENCIES Vehicles owned by the City that are older than four years are covered only by liability insurance. The City has designated $45,000 of general fund equity in the event it is needed. To date, no claims have been made on this reserve and none exists as of September 30, 1995. 34 COMBINING, INDIVIDUAL FUND AND ACCOUNT GROUP STATEMENTS AND SCHEDULES 35 (This Page Intentionally Left Blank) 36 GENERAL FUND The General Fund accounts for 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. 37 (This Page Intentionally Left Blank) 38 CITY OF SCHERTZ, TEXAS GENERAL FUND COMPARATIVE BALANCE SHEETS SEPTEMBER 30, 1995 AND 1994 ASSETS Cash and Cash Equivalents Investments Accounts Receivable Delinquent Taxes Receivable (Net of Allowances) Due from Other Funds Inventory of Supplies, at Cost Other Receivables TOTAL ASSETS LIABILITIES AND FUND BALANCES LIABILITIES Accounts Payable Due to Other Funds Notes Payable Deferred Revenue Total Liabilities FUND BALANCES Reserved for Park Improvements Reserved for Forfeited Property Reserved for Inventory of Supplies Unreserved Designated for Economic Development Designated for Equipment Replacement Designated for Self- Insurance Undesignated Total Fund Balances TOTAL LIABILITIES AND FUND BALANCES (See Accompanying Notes to Financial Statements) 39 SEPTEMBER 30, 1995 1994 $ 617,498 $431,772 329,739 29,157 13,172 12,282 63,418 55,537 540,391 351,531 13,058 14,378 169 - $1,577,445 $894,657 $ 51,087 $ 18,013 272,439 - - 35,333 63,418 55,537 $ 386,944 $108,883 $ 1,073 $ 13,293 3,489 3,309 13,059 14,378 18,821 18,821 15,144 15,144 45,000 45,000 1,093,915 675,829 $1,190,501 $785,774 $1,577,445 $894,657 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, 1995 OTHER FINANCIAL SOURCES (USES) Operating Transfers - (Out) (243,582) 1995 703 (245,176) Excess of Revenues and VARIANCE over Expenditures and FAVORABLE 1994 BUDGET ACTUAL (UNFAVORABLE) ACTUAL FUND BALANCES - OCTOBER 1 REVENUES 785,774 545,082 FUND BALANCES - Taxes $2,249,765 $2,285,735 $ 35,970 $2,109,202 Licenses and Permits 114,600 134,391 19,791 145,229 Charges for Services 356,200 353,050 (3,150) 343,731 Fines and Forfeitures 192,500 209,719 17,219 195,964 Other Sources 189,049 291,864 102,815 133,344 Total Revenues $3,102,114 $3,274,759 $172,645 $2,927,470 EXPENDITURES Current General Government $ 841,992 $ 813,789 $ 28,203 $ 744,801 Public Safety 1,156,755 1,059,331 97,424 978,121 Streets and Parks 400,912 349,659 51,253 305,633 Health 90,980 80,324 10,656 80,494 Recreation 186,852 176,062 10,790 157,437 Economic Development 58,021 52,989 5,032 41,887 Capital Outlay 102,851 94,999 7,852 133,229 Total Expenditures $2,838,363 $2,627,153 $211,210 $2,441,602 Excess of Revenues over Expenditures $ 263,751 $ 647,606 $383,855 $ 485,868 OTHER FINANCIAL SOURCES (USES) Operating Transfers - (Out) (243,582) (242,879) 703 (245,176) Excess of Revenues and Other Financing Sources over Expenditures and Other Financing Uses $ 20,169 $ 404,727 $384 $ 240,692 FUND BALANCES - OCTOBER 1 785,774 545,082 FUND BALANCES - SEPTEMBER 30 $1,190,501 $ 785,774 (See Accompanying Notes to Financial Statements) 40 CITY OF SCHERTZ, TEXAS GENERAL FUND SCHEDULE OF REVENUES COMPARED TO BUDGET YEAR ENDED SEPTEMBER 30, 1995 REVENUES Taxes Ad Valorem Tax Penalty City Sales Tax Utility Franchise Other Total Taxes Licenses and Permits Charges for Services Utility Administration Swimming Pool Animal Shelter Building Rental Library and Fire Other Total Charges for Services Fines and Forfeitures Other Sources Reimbursements Substance Abuse Proceeds from Litigation Cibolo Creek Municipal Authority Interest Emergency Management Coordinator Sale of Assets Sale of Recycled Materials Insurance Proceeds Miscellaneous Total Other Sources TOTAL REVENUES 1995 VARIANCE FAVORABLE 1994 BUDGET ACTUAL (UNFAVORABLE) ACTUAL $1,331,561 $1,303,562 $(27,999) $1,207,203 12,000 11,976 (24) 11,235 655,000 697,713 42,713 653,126 239,804 242,218 2,414 225,839 11,400 30,266 18,866 11,799 $2,249,765 $2,285,735 $ 35,970 $2,109,202 $ 114,600 $ 134,391 $ 19,791 $ 145,229 $ 210,000 $ 210,000 $ - $ 210,0000 33,000 27,087 (5,913) 28,421 3,800 4,575 775 4,166 6,800 6,423 (377) 8,835 79,200 81,761 2,561 72,226 23,400 23,204 (196) 20,083 $ 356,200 $ 353,050 $ (3,150) $ 343,731 $ 192,500 $ 209,719 $ 17,219 S 195,964 $ 17,500 $ 25,630 $ 8,130 $ - - - - 22,661 - 155,534 155,534 - 6,200 6,289 89 6,560 11,708 25,121 13,413 14,495 7,000 - (7,000) 6,859 31,000 25,000 (6,000) 1,523 20,000 22,371 2,371 - - - - 27,293 95,641 31,919 (63,722) 53,953 $ 189,049 $ 291,864 $102,815 $ 133,344 $3,102,114 $3,274,759 $172,645: $2,927,470 (See Accompanying Notes to Financial Statements) 41 CITY OF SCHERTZ, TEXAS GENERAL FUND SCHEDULE OF EXPENDITURES COMPARED TO BUDGET (GAAP BASIS) YEAR ENDED SEPTEMBER 30, 1995 (See Accompanying Notes to Financial Statements) 42 1995 VARIANCE FAVORABLE 1994 BUDGET ACTUAL (UNFAVORABLE) ACTUAL CURRENT General Government City Council $ 20,487 $ 18,645 $ 1,842 $ 14,119 City Manager 178,408 178,606 (198) 155,059 Tax 86,156 78,626 7,530 78,089 Planning and Zoning 113,213 108,402 4,811 108,634 Legal 43,488 80,821 (37,333) 76,468 Municipal Court 60,495 53,723 6,772 52,619 Municipal Building 109,461 100,865 8,596 93,250 General Administration 98,490 96,302 188 95,901 Other - Unclassified 131,794 95,799 35,995 70,662 Total General Government $ 841,992 $ 813,789 $ 28,203 $ 744,801 PUBLIC SAFETY Police Department $ 816,966 $ 742,916 $ 74,050 $ 681,915 Fire Department 282,976 263,430 19,546 244,413 Inspection 56,813 52,985 3,828 51,793 Total Public Safety $1,156,755 $1,059,331 $ 97,424 $ 978,121 STREETS AND PARRS Streets $ 282,392 $ 245,334 $ 37,058 $ 220,829 Parks 118,520 104,325 14,195 84,804 Total Streets and Parks $ 400,912 $ 349,659 $ 51,253 $ 305,633 HEALTH Animal Control $ 90,980 $ 80,324 $ 10,656 $ 80,494 RECREATION Swimming Pool $ 59,277 $ 50,498 $ 8,779 $ 46,416 Library 127,575 125,564 2,011 111,021 Total Recreation $ 186,852 $ 176,062 $ 10,790 $ 157,437 ECONOMIC DEVELOPMENT $ 58,021 $ 52,989 $ 5,032 $ 41,887 CAPITAL OUTLAY $ 102,851 $ 94,999 $ 7,852 $ 133,229 TOTAL EXPENDITURES $2,838,363 $2,627,153 $211,210 $2,441,602 (See Accompanying Notes to Financial Statements) 42 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. 43 (This Page Intentionally Left Blank) 44 CITY OF SCHERTZ, TEXAS SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET YEAR ENDED SEPTEMBER 30, 1995 (WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1994) SCHERTZ DEVELOPMENT TOTALS FORESTRY FOUNDATION 1995 1994 ASSETS Cash and Cash Equivalents $ - $ 7,278 $ 7,278 $13,962 Investments 819 41,000 41,819 23,494 Prepaid Expenses - - - 4,500 Due from Other Funds - 218 218 - TOTAL ASSETS 819 $48,496 $49,315 $41,956 LIABILITIES AND FUND BALANCES LIABILITIES Accrued Taxes $ - $ - $ - $ 2,645 Due to Other Funds 763 - 763 882 Total Liabilities $763 $ -0- $ 763 $.3,527 FUND BALANCES Unreserved Undesignated 56 48,496 48,552 38,429 TOTAL LIABILITIES AND FUND BALANCES 819 $48,496 $49,315 $41,956 (See Accompanying Notes to Financial Statements) 45 CITY OF SCHERTZ, TEXAS SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES YEAR ENDED SEPTEMBER 30, 1995 (WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1994) REVENUES Other Donations State Grant Sale of Land Interest Total Revenues EXPENDITURES 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 FORESTRY FOUNDATION 1995 1994 $ - $ 6,050 $ 6,050 $ 4,600 - - - 2,500 - 34,002 34,002 53,894 43 1,679 1,722 693 $ 43 $41,731 $41,774 $61,687 $ - $ - $ - $ 3,949 - 11,169 11,169 5,228 - 2,278 2,278 7,563 - - - 3,305 $ -0- $13,447 $13,447 $20,045 $ 43 $28,284 $28,327 $41,642 13 20,212 20,225 (3,213) $ 56 $48,496, $48,552 $38,429 (See Accompanying Notes to Financial Statements) 46 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. 4 ', (This Page Intentionally Left Blank) 48 CITY OF SCHERT2, TEXAS DEBT SERVICE FUND COMPARATIVE BALANCE SHEETS SEPTEMBER 30, 1995 ASSETS Cash and Cash Equivalents Delinquent Taxes Receivable (Net of Allowances) Investments TOTAL ASSETS LIABILITIES AND FUND BALANCES LIABILITIES Due to Other Funds Deferred Revenue Ad Valorem Taxes Total Liabilities FUND BALANCES Reserved for Debt Service TOTAL LIABILITIES AND FUND BALANCE (See Accompanying Notes to Financial Statements) 49 SEPTEMBER 30, 1995 1994 $ 34,271 $ 3,881 13,916 12,066 104,866 200,594 $153,053 $216,541 $124,137 $142,603 13,916 12,066 $138,053 $154,669 15,000 61,872 $153,053 $216,541 CITY OF SCHERTZ, TEXAS DEBT SERVICE FUND COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL YEAR ENDED SEPTEMBER 30, 1995 (See Accompanying Notes to Financial Statements) 50 1995 VARIANCE FAVORABLE 1994 BUDGET ACTUAL (UNFAVORABLE) ACTUAL REVENUES Interest Income $ - $ 6,594 $6,594 $ 289 EXPENDITURES Debt Service Bond Principal $ 165,000 $ 165,000 $ - $ 133,000 Bond Interest 129,255 129,255 - 158,972 Fiscal Agent Fees 2,090 2,090 - 2,986 Total Expenditures S 296,345 $ 296,345 $ -0_ $ 294,958 Excess of Revenues Over (Under) Expenditures $(296,345) $(289,751) $6,594 $(294,669) OTHER FINANCING SOURCES (USES) Operating Transfers In 243,582 242,879 (703) 312,576 Excess of Revenues (Deficiency) and Other Financing Sources Over (Under) Expenditures and Other Financing Uses $$ (5�2,763�) $ (46,872) $5,891 $ 17,907 FUND BALANCES - OCTOBER 1 61,872 43,965 FUND BALANCES - SEPTEMBER 30 $ 15,000 $$ 61,872 (See Accompanying Notes to Financial Statements) 50 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.) 51 (This Page Intentionally Left Blank) 52 CITY OF SCH_ERTZ, TEXAS CAPITAL PROJECTS FUND COMPARATIVE BALANCE SHEETS SEPTEMBER 30, 1995 ASSETS Cash and Cash Equivalents Investments Accounts Receivable Accrued Interest Due from Other Funds TOTAL ASSETS LIABILITIES AND FUND BALANCES LIABILITIES Due to Other Funds Accounts Payable Total Liabilities FUND BALANCES Unreserved - Designated for Capital Improvements TOTAL LIABILITIES AND FUND BALANCES TOTALS 1995 1994 $ 183,797 $ _ 490,464 1,194,953 80,356 - 3,013 292,154 _ $1,046,771 $1,197,966 $ 494,840 $ 97,660 56,186 _ $ 551,026 $ 97,660 495,745 1,100,306 11046,771 $1,li 97,96 6 (See Accompanying Notes to Financial Statements) 53 CITY OF SCHERTZ, TEXAS CAPITAL PROJECTS FUND COMPARATIVE STATEMENTS OF REVENUEr EXPENDITURES AND CHANGES IN FUND BALANCES YEAR ENDED SEPTEMBER 30, 1995 REVENUES Other Federal Financial Assistance Interest Income Litigation Settlement Other Total Revenues EXPENDITURES Capital Outlay Capital Projects Animal Control Total Expenditures Excess of Revenues Over (Under) Expenditures FUND BALANCES - OCTOBER 1, 1993 FUND BALANCES - SEPTEMBER 30, 1995 TOTALS 1995 1994 $ 110,713 33,246 1.660 $ 145,619 $ 750,180 $ 750,180 65,655 167,592 $ 233,247 $ 174,083 13,076 $ 187,159 $ (604,561) $ 46,088 1,100,306 $ 495,745 (See Accompanying Notes to Financial Statements) 54 1,054.218 $1,10306 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. CITY OF SCHERTZ, TEXAS ENTERPRISE FUND WATER AND TOTALS SEWER 1994 SYSTEM SAFES 1995 ASSETS $ 160,521 $ - $ 160,521 Cash and Cash CURRENT ASSETS $ - $ 66,324 $ 19,851 Equivalents 773 929 Cash and Cash $ 17,010 $ 61,433 $ 78,443 $ 34,208 Equivalents 354,725 265,795 620,520 253,362 Investments Accounts Receivable 361,260 51,638 412,898 336,672 (Net) 867,481 879 868,360 15,690 Due from Other Funds 341,125 - 341.125 88.602 Inventory of Supplies, 72,452 21,259 93,711 118.848 at Cost Total Current $ 1,672,928 $401,004 $ 2,073,932 $ 758,780 Assets $ 5,199,921 $194,995 $ 5,394, 916 $ 5,543,283 RESTRICTED ASSETS $ 160,521 $ - $ 160,521 Cash and Cash $ 66,324 $ - $ 66,324 $ 19,851 Equivalents 773 929 _ 773.929 1,211,302 Investments Improvements Other Total Restricted $ 840,253 $ -0- $ 840,253 $ 1,231,153 Assets FIXED ASSETS $ 160,521 $ - $ 160,521 $ 160,521 Land and Improvements 195,724 26,656 222,380 222,380 Buildings Improvements Other 8,579,069 - 8,879,069 8,980,331 than Buildings Machinery and 544,197 425,024 969,221 859,856 Equipment Construction in 341,125 - 341.125 88.602 Progress $10,120,636 $451,680 $10,572,316 $10,311,690 Totals Less: Accumulated 4,920.715 256.685 5' 177,400 4,768.407 Depreciation $ 5,199,921 $194,995 $ 5,394, 916 $ 5,543,283 Total Fixed Assets OTHER ASSETS $ 1,900 $ - $ 1,900 $ 1,900 Organizational Costs Accumulated 1,185 - 1,185 (1,137) Amortization $ 715 $ -07 $ 715 $ 763 Total Other Assets TOTAL ASSETS $ 7,713,817 $59� 599 1 8,309,816 $ 7,533,979 (See Accompanying Notes to Financial Statements) 56 57 WATER AND SEWER SYSTEM SAFES TOTALS 1995 1994 LIABILITIES AND EQUITY CURRENT LIABILITIES Vouchers Payable Note Payable $ 92,230 $ 4,525 $ 96,755 $ 90,479 Due to Other Funds Accrued 22,198 741,534 30,020 46,971 52,218 50,619 Vacation and 788,505 111 , 469 Sick Leave Total Current 20,135 6.027 26,162 23,318 Liabilities $ 876,097 87 543 $ 963,640 275,885 CURRENT LIABILITIES PAYABLE FROM RESTRICTED ASSETS Customer Deposits $ 119,685 $ Revenue Bonds 100000 $ 119,685 $ 119,539 Certificates of , - 100,000 100,000 Obligation Public Facility Loan 100,000 4,000 - 100,000 85,000 Accrued Interest 44,343 - 4,000 4,000 Total Current - _ 44,343 48,097 Liabilities Payable from Restricted Assets $ 368,028 $ i�-0= $ 368,028 356,636 NONCURRENT LIABILITIES Revenue Bonds Payable (Less Current Maturities) $1,355,000 $ Certificate of - $1,355,000 $1,455,000 Obligation Payable (Less Current Maturities) Public Facility Loan 880,000 80,000 - 880,000 980,000 Note Payable (Less - 80,000 84,000 Current Maturities) 173,819 Total Noncurrent - - 173,819 _ 196,017 Liabilities $2,488,819 0- $2,488,819 $2,715,017 Total Liabilities ,$3,732,944 87,543 _ ,$3,820,487 $3,347,538 E UITY Contributed Capital $3,550,180 $226,769 $3,776,949 $3,766,824 Retained Earnings Reserved for Revenue Bond Retirement 382,368 Reserved for Equipment - 382,368 382,368 Replacement and Capital Improvements Unreserved 40,000 - 40,000 100,667 Total Equity 8 "325 $3,980,873 281.687 _ 290,012 508 456 $4,489,329 (63,418) $4,186,441 TOTAL LIABILITIES AND EQUITY $7,713,817 $595,999 $8,309,816 $7,5i33� 979 57 (This Page Intentionally Left Blank) 58 CITY OF SCHERTZ, TEXAS ENTERPRISE FUND COMBINING STATEMENT OF REVENUES EXPENSES AND CHANGES IN RETAINED EARNINGS YEAR ENDED SEPTEMBER 30 1995 (WITH COMPARATIVE TOTALS FOR SEPTEMBER 30 1994) (See Accompanying Notes to Financial Statements) 59 WATER AND TOTALS SEWER SYSTEM SAFES 1995 1994 OPERATING REVENUES Fees Charged to Users $1,967,127 $550,765 $2,517,892 $2,492,936 OPERATING EXPENSES BEFORE DEPRECIATION Personal Services Sewage Treatment $ 327,075 $234,770 $ 561,845 $ 484,749 General and Administrative 411,336 222,000 - 411,336 464,118 Contractual Services 173,446 7,800 229,800 228,185 Supplies /Maintenance 41,891 215,337 209,770 Bad Debts 158,642 83,069 241,711 116,144 Total Operating Expenses - 69,853 69,853 71,660 before Depreciation $1,292,499 $437,383 _ $1,729,882 $1,574,626 Operating Income before Depreciation $ 674,628 $113,382 $ 788,010 $ 918,310 Depreciation Operating Income 385,539 23,454 - 408,993 _ 388,907 $ 289,089 $ 89,928 $ 379,017 $ 529,403 NONOPERATING REVENUES (EXPENSES) Interest Income Interest Expenses $ 79,248 $ 14,168 $ 93,416 $ 49,975 Amortization (224,648) _ (224,648) (209,217) Reimbursements (48) (48) (48) Other 40,746 - 40,746 31,293 Total Nonoperating Revenues 4,280 - 4,280 - 1,198 (Expenses) $ (100,422) $ 14,168 (86,254) $ (126,799) Net Income before Operating Transfers $ 188,667 $104,096 $ 292,763 $ 402,604 OPERATING TRANSFERS (OUT) _ - (67,400) Net Income 1881667 $104,096 $ 292,763 $ 335,204 RETAINED EARNINGS AT BEGINNING OF YEAR Prior Period Adjustment $ 242,026 _ $177,591 $ 419,617 S (362,469) ' - 446,882 RETAINED EARNINGS AT BEGINNING OF YEAR - AS RESTATED $ 242,026 $177,591 $ 419,617 $ 84,413 RETAINED EARNINGS AT END OF YEAR $ 430,693 $281,687 $ 712,380 $ 419,617 (See Accompanying Notes to Financial Statements) 59 (This Page Intentionally Left Blank) 60 CITY OF SCHERT2, TEXAS ENTERPRISE FUND COMBINING STATEMENT OF CASH FLOWS - ALL PROPRIETARY FUND TYPES YEAR ENDED SEPTEMBER 30 1995 (WITH COMPARATIVE TOTALS FOR SEPTEMBER 30 1994) 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 E UIVALENTS - OCTOBER 1, 1994 CASH AND CASH EQUIVALENTS - SEPTEMBER 30, 1995 Comprised of Current Assets Restricted Assets WATER AND TOTALS SEWER SYSTEM SAFES 1995 1994 $1,623,178 $617,769 $2,240,947 $2,551,781 (962,665) (205,760) (1,168,425) (1,096,589) (323,538) (235,463) (559,001) (484,155) 45,026 - 45,026 32,449 $ 382,001 $176,546 $ 558,547 $1,003,486 $ (67,400) $ (136,631) $(67,114) $ (203,745) $ (633,775) (209,619) (30,000) (239,619) (198,151) 30,020 30,020 30,000 (228,402) - (228,402) (208,695) 10,125 - 10,125 208,333 (564,527) $ 79,248 $ (103,278) 1,315,266 $1,211,988 $ 371,735 840,253 $1,211,988 (See Accompanying Notes to Financial Statements) 61 $(67,094) $ (631,621) $ (802,288) $ 14,319 $ 93,567 $ 49,866 $123,771 $ 20,493 $ 183,664 203,457 1,518,723 1,335,059 $327,228 $1,539,216 $1,518,723 $327,228 $ 698,963 $ 287,570 - 840,253 1,231,153 $327,228 $1,539,216 $1,518,723 (Continued) CITY OF SCHERTZ, TEXAS ENTERPRISE FUND COMBINING STATEMENT OF CASH FLOWS - ALL PROPRIETARY FUND TYPES YEAR ENDED SEPTEMBER 30, 1995 WATER AND TOTALS SEWER SYSTEM SAFES 1995 1994 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING INCOME $188,667 $104,096 $292,763 $ 529,403 Operating Income (Loss) Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided by Operating Activities 385,587 23,454 409,041 388,907 Depreciation /Amortization Provision for Uncollectible - 69,853 69,853 71,660 Accounts Change in Assets and Liabilities (Increase) Decrease in (84,272) 22,645 (61,627) (111,752) Accounts Receivable 14,736 10,401 25,137 (36,779) (Increase) Decrease in Inventory (Increase) Decrease in (759,518) 879) (760,397) 26,549 Due from Other Funds Increase (Decrease) in 5,074 1,202 6,276 38,958 Vouchers Payable Increase (Decrease) in 631,798 (53,533) 578,265 104,055 Due to Other Funds Increase (Decrease) in 3,537 693j 2,844 594 Accrued Vacation Increase (Decrease) in Accrued (3,754) ' (3,754) 522 Interest Payable Increase (Decrease) in 146 - 146 (8,631) Customers Deposits NET CASH PROVIDED BY $ 38'� $176,546 $ 55�� $1.003,486 OPERATING ACTIVITIES Supplemental Disclosures Non -Cash Capital and Related Financing Transactions Acquisition and Construction $ _ $203,745 $633,775 of Capital Assets $ - _ - _ Cost of Facility _ 30,020 30,020 (30,000) Note Payable Issued 10,125 - 10,125 (69,864) Federal Financial Assistance _ - (208,333) Contributed Capital - 62 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. 63 (This Page Intentionally Left Blank) 64 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 1995 1994 $ 423,460 $ 403,589 1,114,290 1,114,290 7,922,195 7,197,121 740,652 694,477 1,027,942 979,118 $11,228,539 110,388,595 $ 2,073,598 $ 1,978,599 1,317,990 678,523 182,686 182,686 317,005 317,005 113,614 113,614 146,837 36,124 7,066,305 7,066,305 10,504 15,739 $11,228,539 $10,388,595 CITY OF SCHERTZ, TEXAS SCHEDULES OF GENERAL FIXED ASSETS - BY FUNCTION AND ACTIVITY YEAR ENDED SEPTEMBER 30, 1995 General Government Public Safety Police Fire Inspection Street and Park Street Pool Parks Health Animal Control Library Development Foundation TOTALS BALANCE BALANCE OCTOBER 1, SEPTEMBER 30, 1994 ADDITIONS DEDUCTIONS 1995 $ 910,735 $ 15,307 $ - $ 926,042 340,709 32,570 - 373,279 623,387 20,687 - 644,074 24,055 - - 24,055 6,780,475 750,180 - 7,530,655 541,773 - - 541,773 671,422 13,830 - 685,252 222,738 1,210 - 223,948 257,562 11,395 - 268,957 15,739 - 5,235 10,504 $10,388,595 $84� 5 $5,235 $11,228,539 (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 $184,051 12,000 - 65,000 - 5,670 221,259 324,851 152,020 236,553 - - 139 18,031 5,885 108,333 400 7,034,720 145,109 242,093 - - 530,309 - 11,464 182,662 195,159 202,906 17,998 86,527 23,161 106,071 65,274 6,728 22,714 23,031 124,424 34,867 - 86,635 10,504 _ 423 460 $1,114,290 $7,922,195 2740,652 $1,027,942 G*A (This Page Intentionally Left Blank) 68 STATISTICAL INFORMATION Wj CITY OF SCHERTZ, TEXAS GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION TAB_ LE 1 FISCAL YEAR GENERAL GOVERNMENT PUBLIC SAFETY STREETS AND PARKS HEALTH OTHER TOTAL (1) EXPENDITURE 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 1995 813,789 1,059,331 349,659 80,324 633,842 2,936,685 (1) Includes General, Special Revenue and Debt Service Funds 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 71 LICENSES CHARGES FINES FISCAL AND AND FOR AND YEAR TAXES SERVICES FORFEITURES OTHER TOTAL* 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 1995 2,285,735 134,391 353,050 209,719 340,232 3,323,127 *Includes General, Special Revenue and Debt Service Funds * *Reclassification Among These Categories Performed in 1991 71 (This Page Intentionally Left Blank) 72 M n H O W E W YD oo o� ul a' co � m rn .a H z w a f" � �r �n n a n w L4 �o H w E E P4 A u z A W V1 M N d' Ln O N 1D Z r7 W `r' in 01 N rl M OD �d a x r1 eM H z a H 01 0% N ri a 10 LM 1p co aD er u1 r E-4 a n co co n w A W O A m w a 0 04> M M ry O H H EE w n o 0 at N H O a o a U E-H co (M o ON ON a H E O cM Ch (M rw7 O ^' 1-4 H H E-4 U x z M n ,-4 O H H n . M C a1 O M Ln u'f M m O N 10 u1 H a U M a1 01 x p H a Ln � f•1 n co .a O M O O .I o N O M H U � W a U a w w o U H z H z O W H M 01 M ao M d' N Ln n a A A H a U -4 O fn 01 CN7 n im 0% ai M o M �D co N N xH H a n ono n M w w a a yr .�-{ en .� .� U ; w o A U � w w a o x dp >4 E Gw w > U � O lD lD tp O O M er LM o a w w cx U W P4 a z M aH1 r'ni N O 41 M H p Z Ln N a1 a1 n LO M lD u7 O pD 1D LM N H w x E4 = 4 U N M N a► n Ln Ln eh M N O P4 [-E Ln in .-� a� at a U a O to U a -4 M V m a1 tD N O co co co 01 r-i a1 O M o 0i x % CITY OF SCHERTZ, TEXAS ASSESSED AND ESTIMATED ACTUAL VALUE OF PROPERTY TABLE 4 LEVY YEAR FISCAL YEAR ENDED ESTIMATED ACTUAL VALUES ASSESSMENT PERCENTAGE ASSESSED VALUATIONS TAX RATE TAX LEVY 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 1995 09 -30 -95 362,247,758 100 312,676,505 .4275 1,337,010 74 CITY OF SCHERTZ, TEXAS PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS TABLE 5 YEAR ** COUNTY CITY SCHOOL COUNTY ROAD 100% 100% 100% 100% ASSESSMENT ASSESSMENT ASSESSMENT ASSESSMENT RATE* RATE* RATE RATE _ 1986 .436 % 1.11 .3450 .0425 1987 .4128 1.14 .3875 .04 1988 .24705 .783 .2852 .0820 1989 .2576 .8862 .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 1995 .4275 1.3712 .3018 .0833 All rates shown are per $100 assessed valuation. Year shown is the fiscal year of collection. Taxes were levied the previous calendar year. 75 CITY OF SCHERTZ, 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 76 NET RATIO GENERAL OF NET BONDED BONDED DEBT DEBT PER FISCAL YEAR ESTIMATED ASSESSED NET GENERAL TO ASSESSED CAPITA September 30, 1986 $12,500 $125,213,487 $324,351 .26% 25.92$ September 30, 1987 12,500 147,961,601 757,798 .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 September 30, 1995 13,500 312,676,505 1,056,611 .34 78.27 *Based on Preliminary 1990 Census. This estimate has been challenged by the City. * *Includes General Bonded Debt Issued During Current Year 76 CITY OF SCHERTZ TEXAS COMPUTATION OF DIRECT AND OVERLAPPING DEBT YEAR ENDED SEPTEMBER 30 1995 *Bexar County *Corral County *Corral 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 Reports, City of Schertz, 1993 (Latest Available) Compiled and Published by Municipal Advisory Council of Texas 77 TABLE 7 $6,569,221 NET DEBT PERCENT AMOUNT AS OF OVER- OVER - AMOUNT 08 -31 -93 LAPPING LAPPING $166,634,597 04 -30 -94 .02% $ 33,327 5,111,449 12 -31 -94 .09 4,600 34,036,886 08 -31 -94 .12 40,844 1,881,027 03 -31 -93 14.75 277,451 8,039,015 08 -31 -94 51.88 4,170,641 57,430,000 01 -01 -94 .02 11,486 $4,538,349 2,030,872 09 -30 -94 100.00 2,030,872 $6,569,221 CITY OF SCHERTZ, TEXAS LEGAL DEBT MARGIN YEAR ENDED SEPTEMBER _30, 1995 TABLE S 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. 78 *Includes General, Special Revenue, and Debt Service Funds 79 CITY OF SCHERTZ, TEXAS RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL OBLIGATION BONDED DEBT TO TOTAL GENERAL EXPENDITURES LAST TEN FISCAL YEARS TABLE 9 RATIO OF DEBT SERVICE TO FISCAL YEAR PRINCIPAL DEBT INTEREST SERVICE TOTAL EXPENDITURES* GENERAL EXPENDITURES September 30, 1986 $21,000 $26,233 $47,233 $1,466,855 3.2% September 30, 1987 22,000 25,169 47,169 1,766,347 2.7 September 30, 1988 24,000 72,900 96,900 1,878,246 5.2 September 30, 1989 39,000 54,758 93,758 2,197,023 4.3 September 30, 1990 45,000 52,049 97,049 2,174,020 4.5 September 30, 1991 45,000 49,067 94,067 2,341,055 4.0 September 30, 1992 46,000 46,084 92,084 2,344,541 4.0 September 30, 1993 57,000 42,830 99,830 2,594,017 3.9 September 30, 1994 58,000 97,493 155,493 2,756,605 5.6 September 30, 1995 85,000 74,139 159,139 2,936,685 5.4 *Includes General, Special Revenue, and Debt Service Funds 79 (This Page Intentionally Left Blank) SO -4 m O r-4 a M M 01 M N %0 1a O ao N 1a w r n 0o ar ko a o o .i M Ln a O a W N N N N M M M M M M E+ W O Po E z w a ao o m o, N o, a1 N +-1 01 -w C4 O O W N 10 Ln Go .4 n Ln r Ln r M Go Z U E ft ft OD O N N 3 M M M M M M . 40 W cn M P. N 01 N M M U ^4 .-i ri .-1 .--1 M M i4 r Ln a �, co M N M N 10 co Qi E M q to r r O N O O E O O 10 n to r Ln a1 in ao N •! m r In M M M M M N N N N ry ry E a1 r d' N M d' M O co M cn N 1p Op W a M v N Q> Ln N a r e! n 10 O N W Cn U E w E n .-a r-1 r N �D r n 0% aT co N Le) H z > W z N N N a z M yr w w m a a o 0 0 0 0 0 0 0 0 0 A E � O M O O O p C O O O O O O O O O O W E O w w W A a U z M co LO o M m °D o � O . i N ri co ao oi o a o> a `? H 3 U w vwi A z z U U7 A z O O �% Z O W W E N o, ut c .-I o, .-1 co Ln lw co H v: 'n o� co .4 o� r O oo E O O d' a� �o 0% �o O a W O w U w U o% o in a �i o Ln ai o o a � E > W a N m 9 a -W � �' � n a n M N N M 01 n iEi 3 W o w yr v x A z C7 O U] N r r a -4 of . � o a1 v r cn n � Or .4 N m a a 01 N O M 01 u1 .I ON H E w w U a m ;D `n r cl M O 04 W W co c, O �' O co O M .-a O N m O a E w x ao a M N N P4 O W a w yr 1-4 r4 14 -4 A C7 r a� in er � co r z W N o N N Ln Ln N E z 04 W O M N O ON r, Ln ' a > M M Ln N r Ln Ln .4 co ,,,4 W W in a' 10 a1 a1 o yr 1a 0 n 0o QJ co 01 co O .1 a, N M v Ln a1 01 a1 a1 D> a1 01 a1 w A z w 0 M 0 M 0 0 0 0 0 0 0 0 M M M M M -7 Li H L4 H La H t`I }4 is H 4 44 4-1 41 y y a m w cn a°i m aai m cn a°i m a04i cn ai cn -4 m CITY OF SCHERTZ, TEXAS WATERWORKS AND SEWER SYSTEM FUND REVENUE BOND REQUIREMENTS AND RESTRICTED FUNDS YEAR ENDED SEPTEMBER 30, 1995 TABLE 11 RESERVE FUND REOUIREMENT 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, 1995 met these requirements. 1 � Time Average Annual Principal and Interest Requirement (Annual $181,344) Cash and Investments FUNDS AVAILABLE OVER (UNDER) REQUIREMENT 82 $272,016 334,847 $ 62,831 ANNUAL REQUIREMENT PRINCIPAL/ AT SEMI - ANNUAL SEPTEMBER 30, INTEREST BASIS 1995 UTILITY SYSTEM REVENUE BONDS SERIES 1973: $40,000 1 /12th $ 3,333 Principal Payment, Due September 1, 1996 1 /6th 814 Interest Payment, Due March 1, 1996 4,884 UTILITY SYSTEM REVENUE BONDS SERIES 1975: 10,000 1 /12th 833 Principal Payment, Due September 1, 1996 7 578 1 /6th 1,263 Interest Payment, Due March 1, 1996 UTILITY SYSTEM REVENUE BONDS SERIES 1981: 35,000 1 /12th 2,917 Principal Payment, Due September 1, 1996 9,145 1 /6th 1,524 Interest Payment, Due March 1, 1996 UTILITY SYSTEM REVENUE BONDS SERIES 1987: 15,000 1 /12th 1 250 , Principal Payment, Due September 1, 1996 32,188 1 /6th 5,365 Interest Payment, Due March 1, 1996 $17,299 Total Requirements 8,028 CASH - RESTRICTED $(9,271) UNDER REQUIREMENTS RESERVE FUND REOUIREMENT 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, 1995 met these requirements. 1 � Time Average Annual Principal and Interest Requirement (Annual $181,344) Cash and Investments FUNDS AVAILABLE OVER (UNDER) REQUIREMENT 82 $272,016 334,847 $ 62,831 CITY OF SCHERTZ, TEXAS DEMOGRAPHIC STATISTICS LAST TEN FISCAL YEARS TABLE 12 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 83 LEVEL IN PER YEARS OF FISCAL CAPITA MEDIAN FORMAL SCHOOL UNEMPLOYMENT INCOME AGE EDUCATION ENROLLMENT RATE IN % YEAR POPULATION (2) (3) (3) (4) (3) 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 12,000 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 1995 13,500 Est. 13,600 32 14 4,678 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 83 (This Page Intentionally Left Blank) 84 W E N E a w x U w 0 >+ E H U LM m N 0, N 01 N 0, n N eP Ln O O m r w a o o o � o � n ,� 01 m V� o, 01 m a A co N N N Ln D1 M H��„� m m m LM V' co O to M r- M O t0 * O LM Ln Ln Ln w z yr 0 a a .-1 m M Ln to p O O to .-i c+f N co H01 O1 .-1 t0 I� O a, 01 �o N M to > E z M m r m Ln N Ln M co N WA t0 n V' .I N Ln LM M LM M ..i m Ln o Ln H LyM m N LM 1, m N to •N -i .1 N N .-a i ro E a r a �+ W a to N O Ln ON to LM M N Ln m m t0 ao co ro .� -4 O O Ln -4 Ln 01 V' m r, n N � O U a Ln o co a o, m n to LM a, a a W N M Ln r ` N in o, N N n o b a O ,n .4 Ln '-I M Ln a 10 O N O .-I M a ro U yr LM M M M M Ln U) w E H O o t0 to m M ON M o, V' Ln m m W a o ° m a M M , i V o N Ln m N 0, a Ln U) E a W n Ln � N r O1 c i O Ln 01 v d. r M r p; E A M 01 .-1 -4 01 —4 I� O co eP t0 M 1, 1 W O LO VW N -4 N -4 M Ln Ln H�+ Ln t0 to co t0 t0 %0 t0 m H a as W a' O U a w w H A f+� z LM M V O V t0 Ri E-4 A a z a o O, V' M 1D N .4 Ln O r N o r, M In E M H ; Ln m r- O V M a .--1 M Ln N M -4 m Z U to r: LM M N er N m N F�� N —4 A a H E U) W W z a o M W E Go W H 0, N N M m n N to r M Ln V N r 0 O 0 N H M M 01 N U z r4 z a o 0) .4 4J d V LM -W to Ln co U w Ln .i o r, Ln O o o to to LM N m p y U z o o m tD a GL at a o a a o p to Ln Ln N m co m m z � �, a +� NU> t0 O M n v m 01 M O, Lo Lo H oroq N m N 3 as yr d d' q U m4.1 +.) 4J �O a a m O z w U) ooa U U W ro U LM N ^a M E 4-1 •.� a N —4 N > >r 3 � •rU z � +I •^a .d U ro U J U) U) W t0 m r m m co D1 m O a+ , .� N !.,� Ln U � a ON O, a a m a a+ a a rn 0+ a ON a z O -4 -4 -4 .-4 .4 -4 m LM m CITY OF SCHERTZ, TEXAS PRINCIPAL TAXPAYERS YEAR ENDED SEPTEMBER 30, 1995 TABLE 14 86 1994 PERCENTAGE OF ASSESSED TOTAL ASSESSED PRINCIPAL TAXPAYERS TYPE OF BUSINESS VALUATION VALUATION 1. Eric W. White Real Estate $5,667,669 23.08% 2. Sycamore Creek Partners Apartments 3,359,231 13.68 3. Garden Ridge Pottery Mercantile 3,356,049 13.67 4. Riedelfs Family Partners Furniture Store/ Apartments 2,241,364 9.13 5. Guadalupe Valley Electric Utility 2,078,600 8.47 6. PSP Industries Manufacturing 1,598,600 6.51 7. Southwestern Bell Telephone Utility 1,404,310 5.72 Telephone Co. 8. Negley Paint Co., Inc. Industrial 2,674,205 10.89 9. PSPI, Inc. Machine Fabricating 1,132,090 4.61 10. CMA Parks, Inc. Commercial 1,040.659 4.24 TOTAL (7.85% OF 1994 $24,552,777 10 0� ASSESSED VALUATION) 86 CITY OF SCHERTZ TEXAS MISCELLANEOUS STATISTICS YEAR ENDED SEPTEMBER 30 1995 TABLE 15 Date of Incorporation: PERMITS ISSUED VALUE OF December, 1958 Date First Charter Adopted: BUILDINGS 1995 April, 1974 Date Present Charter Adopted: 1994 2,066 Amended March, 1989 Form of Government: 2,771 18,917,416 Council- Manager YEAR 25,705,848 1991 SQUARE MILES 1995 1990 1994 7,667,699 1993 24.15 1992 24.15 1991 24.15 1989 23.75 1988 22.42 1987 22.42 1986 22.38 1985 21.51 1984 13.14 1983 12.82 14,218,408 10.53 Miles of Highways, Streets and Alleys 5,411,680 Streets and Highways, Paved Streets, Unpaved 93.69 Miles Alleys 6.78 Miles Sidewalks 3.44 Miles 15.09 Miles Miles of Sewer: Storm Sanitary 2.18 Miles 41.04 Miles Building Permits: YEAR PERMITS ISSUED VALUE OF BUILDINGS 1995 1994 2,066 $21,150,682 1993 2,771 18,917,416 1992 2,167 25,705,848 1991 6,702,823 1990 545 7,667,699 1989 392 6,652,769 1988 6,762,584 1987 368 7,752,335 1986 430 9,725,569 1985 270 16,349,884 1984 8 10,697,985 1983 14,218,408 400 5,411,680 (Continued) 87 CITY OF SCHERTZ, TEXAS MISCELLANEOUS STATISTICS YEAR ENDED SEPTEMBER 30, 1995 TABLE 15 Fire Protection: 1 Number of Stations 17 Number of Employees (Full and Part -Time) 30 Number of Volunteers Recreation: 7 Parks: 64 Playgrounds 7,260 Other Recreational Facilities: 3 Baseball Fields 2 Softball Fields 10,000 Square Feet Covered Large Pavilion 600 Square Feet Covered Small Pavilion Picnic Tables: 50 Uncovered Restrooms: 6 Male 6 Female 1 Concessions Stands 1 Community Center City Employees: 157 September 30, 1995 Elections: 6,783 Number of Registered Voters Number of Votes in: 774 Last Municipal Election Percentage of Registered Voters Voting in: 11.4% Last Municipal Election Source: Municipal Election Records Population: Census Population Count 12,000 1992 (Estimate) 10,597 1990 7,260 1980 4,061 1970 2,281 1960 1,200 1950 600 1940 88 SINGLE AUDIT REPORTS 89 (This Page Intentionally Left Blank) 90 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 September 30, 1995, and have issued our report thereon dated April 4, 1996. 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 -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. 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 April 4, 1996 R. LARRY THOMPSON, C. PA. / PAUL E. WILLIAMS. C. PA. / JAMES L BIEDIGER JR.. C. PA. / C. TED KASTOR C.P.A. / CHARLIE E. YOUNG, JR, C. PA. JOHN LEIF, C. PA. / H. LEE SCHWARTZMAN. C. PA. / F. GLENN CRAVEY. C. P.A. / FRED J. TIMMONS, C. PA. / JOHN W. GREEN, C. PA JAMES T. MCCARTY. C. PA. (RETIRED) 91 Thompson, Williams, Biediger, NORTH TOWER 800 N.W. LOOP 410, SUITE 3WN Kastor CERTIFIED PUBLIC ACCOUNTANTS SAN ANTONIO, TEXAS 78216 -5611 210/341.2581 T MEMBERS AMERICAN INSTITUTE OF FAX 210/341 -2588 Young, CERTIFIED PUBLIC ACCOUNTANTS 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 September 30, 1995, and have issued our report thereon dated April 4, 1996. 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 -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. 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 April 4, 1996 R. LARRY THOMPSON, C. PA. / PAUL E. WILLIAMS. C. PA. / JAMES L BIEDIGER JR.. C. PA. / C. TED KASTOR C.P.A. / CHARLIE E. YOUNG, JR, C. PA. JOHN LEIF, C. PA. / H. LEE SCHWARTZMAN. C. PA. / F. GLENN CRAVEY. C. P.A. / FRED J. TIMMONS, C. PA. / JOHN W. GREEN, C. PA JAMES T. MCCARTY. C. PA. (RETIRED) 91 (This Page Intentionally Left Blank) 92 W H N E a w uc U w 4w 0 E H H U rA O o _ _ I N I N W H M ON x 04 pWq Ln Ot W M E wrw W W W In r. Go Go E H N M n M H '4 d• co z O %0 M ra O o N w H W N In co co 'J N M n M x ' N V Go M O kk:all ai -I N A W H r4 Q 99 x a W M w 0% O O Wal zzA M 0% I 1 D E ra tit W U O E-4 as 7 ao 01 Go 01 Ln to Wvi ri .n1 pq C7 f!1 O • o a a a o W H I W � x a a N Go co N W A w N N wU 'P.{ '- -4 1 O o O O o O O Ln ?4 N O 0 b ?C N N o q O N ao q O N co b� U b I N. Ix q rO 4) V •ri ri N a► •rq H 4) a P4 H b 04 m I to 0q 0q I W m 0q I O W b 0 04 H +J 4 5 O W 4J W O 0 CO 4J '44 Li pq N 0 I E4 rq e W 4J 0% O H a O IV O G o 91, AI�� i pE�qjI a •Qrl I w G � a 4) d 44 0 44 0 >i > ° aN i >0 •rI A N > a 4J q4 . H a 0 a a IA qN di 0 rbi q a a q x Z � 0 MHz w +J p, • e07 A U q � 0 A 0 a w >y u g 0 q W >4 u W P4 H N b ro q •n w O +� ► I U U +3 $3 d g 0 N O N N g 0 m 0 H N roq 0 H 0 N E 0 H b U C� U W H b U C7 U CL H g 0 0 0 LL M o► CITY OF SCHERTZ, TEXAS NOTES TO SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE YEAR ENDED SEPTEMBER 30, 1995 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. 3. RECONCILIATION OF FEDERAL FINANCIAL ASSISTANCE Federal Financial Assistance was received in the following funds: Water and Sewer System Fund Capital Projects Fund 94 $ 10,125 110,713 $120,838 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, 1995, and have issued our report thereon dated April 4, 1996. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. 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. In planning and performing our audit of the general purpose financial statements Of City of Schertz, Texas, for the year ended September 30, 1995, we obtained an understanding of the internal control structure. With respect to the internal control structure, 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 in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide an opinion on the internal control structure. Accordingly, we do not express such an opinion. R LARRY THOMPSON, C. P.A. / PAUL E. WILLIAMS, C. PA. / JAMES L. BIEDIGER, JR.. C. PA. / C. TED KASTOR, C. PA. / CHARLIE E. YOUNG, JR.. C. PA. JOHN LEIF, C.P.A. / H. LEE SCHWARTZMAN, C. PA. / E GLENN CRAVEY, C. PA. / FRED J. TIMMONS, C. PA. / JOHN W. GREEN, C. PA. 95 JAMES T. MCCARTY, C. PA. (RETIRED) Thompson, Williams, NORTH TOWER 800 N.W. LOOP 410, SUITE 30ON Biediger, Kasstor CERTIFIED PUBLIC ACCOUNTANTS SAN ANTONIO, TEXAS 78216 -5611 210/341 -2581 T MEMBERS AMERICAN INSTITUTE OF FAX 210/341 -2588 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, 1995, and have issued our report thereon dated April 4, 1996. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. 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. In planning and performing our audit of the general purpose financial statements Of City of Schertz, Texas, for the year ended September 30, 1995, we obtained an understanding of the internal control structure. With respect to the internal control structure, 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 in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide an opinion on the internal control structure. Accordingly, we do not express such an opinion. R LARRY THOMPSON, C. P.A. / PAUL E. WILLIAMS, C. PA. / JAMES L. BIEDIGER, JR.. C. PA. / C. TED KASTOR, C. PA. / CHARLIE E. YOUNG, JR.. C. PA. JOHN LEIF, C.P.A. / H. LEE SCHWARTZMAN, C. PA. / E GLENN CRAVEY, C. PA. / FRED J. TIMMONS, C. PA. / JOHN W. GREEN, C. PA. 95 JAMES T. MCCARTY, C. PA. (RETIRED) (This Page Intentionally Left Blank) 0 Independent Auditorfs Report on Internal Control Structure Based on an Audit of General Purvose Financial Statements Performed in Accordance with Government Auditing Standards (Continued) 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. San Antonio, Texas April 4, 1996 Certified Public Accou �� %% U ntants 97 (This Page Intentionally Left Blank) 98 The Honorable Mayor and Members of the City Council City of Schertz, Texas Independent Auditor's Report on Compliance 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, 1995, and have issued our report thereon dated April 4, 1996. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the 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 disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. 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 Accountants San Antonio, Texas April 4, 1996 R. LARRY THOMPSON, C. PA. / PAUL E. WILLIAMS, C. PA. / JAMES L. BIEDIGER, JR.. C. PA. / C. TED KASTOR, C. PA. / CHARLIE E. YOUNG, JR, C. P.A. JOHN LEIF C. PA. / H. LEE SCHWARTZMAN, C. PA. / F. GLENN CRAVEY, C. PA. / FRED J. TIMMONS. C. PA. / JOHN W. GREEN, C. PA. JAMES T. MCCARTY. C-PA. (RETIRED) 99 Thompson, Williams, NORTH TOWER 800 N.W. LOOP 410. SUITE 30ON Biediger, K s CERTIFIED PUBLIC SAN ANTONIO, TEXAS 78216 -5611 210/341 -2581 FAX 210/341 -2588 or ACCOUNTANTS MEMBERS AMERICAN INSTITUTE OF Young, CERTIFIED PUBLIC ACCOUNTANTS L. C. The Honorable Mayor and Members of the City Council City of Schertz, Texas Independent Auditor's Report on Compliance 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, 1995, and have issued our report thereon dated April 4, 1996. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the 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 disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. 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 Accountants San Antonio, Texas April 4, 1996 R. LARRY THOMPSON, C. PA. / PAUL E. WILLIAMS, C. PA. / JAMES L. BIEDIGER, JR.. C. PA. / C. TED KASTOR, C. PA. / CHARLIE E. YOUNG, JR, C. P.A. JOHN LEIF C. PA. / H. LEE SCHWARTZMAN, C. PA. / F. GLENN CRAVEY, C. PA. / FRED J. TIMMONS. C. PA. / JOHN W. GREEN, C. PA. JAMES T. MCCARTY. C-PA. (RETIRED) 99 (This Page Intentionally Left Blank) Ij() 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, 1995, and have issued our report thereon dated April 4, 1996. 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, 1995, 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 requirements applicable to federal financial assistance programs. 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, C. PA. / JAMES L. BIEDIGER, JR, C. PA. / C. TED KASTOR, C. P.A. / CHARUE E. YOUNG, JR. C. P. A. JOHN LEIF. C. PA. / H. LEE SCHWARTZMAN, C. PA. / F. GLENN CRAVEY, C. PA. / FRED d TIMMONS, C. PA. /JOHN W. GREEN, C. PA. JAMES T. MCCARTY, C. PA. (RETIRED) 101 Thompson, Williams, NORTH TOWER 800 N.W. LOOP 410, SUITE 30ON Biediger, Kantor CERTIFIED PUBLIC ACCOUNTANTS SAN ANTONIO, TEXAS 78216 -5611 210/341.2581 FAX 210/341 -2588 T MEMBERS AMERICAN INSTITUTE OF Young, CERTIFIED PUBLIC ACCOUNTANTS 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, 1995, and have issued our report thereon dated April 4, 1996. 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, 1995, 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 requirements applicable to federal financial assistance programs. 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, C. PA. / JAMES L. BIEDIGER, JR, C. PA. / C. TED KASTOR, C. P.A. / CHARUE E. YOUNG, JR. C. P. A. JOHN LEIF. C. PA. / H. LEE SCHWARTZMAN, C. PA. / F. GLENN CRAVEY, C. PA. / FRED d TIMMONS, C. PA. /JOHN W. GREEN, C. PA. JAMES T. MCCARTY, C. PA. (RETIRED) 101 (This Page Intentionally Left Blank) 102 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: Claims for Advances and Reimbursements 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 Specific Requirements • Types of Services • Eligibility 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, 1995, 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 programs: • Texas Department of Housing 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 Administerin 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 April 4, 1996 Certified Public Accountants 104 ROW "W**� NORTH TOWER 800 N.W. LOOP 410, SUITE 30ON SAN ANTONIO, TEXAS 78216 -5611 210/341.2581 FAX 210/341 -2588 The Honorable Mayor and Members of the City Council City of Schertz, Texas Thompson, Williams, Biediger, Kastor T Young, L.C. CERTIFIED PUBLIC ACCOUNTANTS MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS 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, 1995, and have issued our report thereon dated April 4, 1996. 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, 1995: 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. Certified Public Accountants San Antonio, Texas April 4, 1996 R. LARRY THOMPSON. C. P.A. / PAUL E. WILLIAMS, C. PA. / JAMES L. BIEDIGER, JR., C PA / C. TED KASTOR. C. PA. / CHARLIE E. YOUNG, JR., C. PA. JOHN LEIF, C. PA. / H. LEE SCHWARTZMAN, C.P.A. / F. GLENN CRAVEY, C. PA. / FRED J. TIMMONS. C. PA. / JOHN W. GREEN, CPA. 105 JAMES T. MCCARTY. C. PA. (RETIRED) (This Page Intentionally Left Blank) 100 Thompson, Williams, NORTH TOWER Biediger, 800 N.W. LOOP 410, SUITE 3WN Kastor SAN ANTONIO, TEXAS 78216 -5611 210/341 -2581 FAX 210/341 -2588 Young, L.C. To the Honorable Mayor and Members of the City Council City of Schertz, Texas CERTIFIED PUBLIC ACCOUNTANTS MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS Independent Auditor's Report on Compliance with Specific Requirements Applicable to Nonmaior Federal Financial Assistance Program Transactions We have audited the general purpose financial statements of the City of Schertz, Texas, as of and for the year ended September 30, 1995, and have issued our report thereon dated April 4, 1996. 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, 1995. 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. �4 d1A 1012 1 0 AO: Certified Public Accountants San Antonio, Texas April 4, 1996 R. LARRY THOMPSON. C. PA./ PAUL E. WILLIAMS. C. PA. /JAMES L. BIEDIGER, JR.. C. PA. / C. TED KASTOR, C. PA. /CHARLIE E. YOUNG, JR, C.PA JOHN LEIF. C. PA. / H. LEE SCHWARTZMAN, C. PA. / F. GLENN CRAVEY, C. EA. / FRED J. TIMMONS, C.PA. / JOHN W. GREEN, C.EA. JAMES T. MCCARTY, C. PA. (RETIRED) 107 (This Page Intentionally Left Blank) 1 :: 3