HomeMy WebLinkAbout2005 CAFR
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED
SEPTEMBER 30, 2005
PREPARED BY
FINANCE DEPARTMENT
CITY OF STEPHENVILLE, TEXAS
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CITY OF STEPHENVILLE, TEXAS
TABLE OF CONTENTS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
Page
Number
INTRODUCTORY SECTION
Letter of Transmittal..................................................................................................... i – iv
GFOA Certificate of Achievement............................................................................... v
Organizational Chart..................................................................................................... vi
Principal City Officials................................................................................................. vii
FINANCIAL SECTION
Independent Auditors’ Report....................................................................................... 1 – 2
Management’s Discussion and Analysis...................................................................... 3 – 10
Basic Financial Statements
Government-wide Financial Statements
Statement of Net Assets.......................................................................................... 11
Statement of Activities............................................................................................ 12
Fund Financial Statements
Balance Sheet – Governmental Funds.................................................................... 13
Statement of Revenues, Expenditures and Changes in
Fund Balances – Governmental Funds................................................................ 14
(continued)
CITY OF STEPHENVILLE, TEXAS
TABLE OF CONTENTS
(Continued)
FOR THE YEAR ENDED SEPTEMBER 30, 2005
Page
Number
FINANCIAL SECTION (Continued)
Fund Financial Statements (Continued)
Reconciliation of the Statement of Revenues, Expenditures
and Changes in Fund Balances of Governmental Funds to the
Statement of Activities......................................................................................... 15
Statement of Revenues, Expenditures and Changes in
Fund Balances – Budget and Actual – General Fund.......................................... 16 – 18
Statement of Net Assets – Proprietary Funds......................................................... 19
Statement of Revenues, Expenses and Changes in
Fund Net Assets – Proprietary Funds.................................................................. 20
Statement of Cash Flows – Proprietary Funds........................................................ 21 – 22
Statement of Fiduciary Net Assets.......................................................................... 23
Notes to Financial Statements.................................................................................... 24 – 45
Combining Fund Statements and Schedules
Nonmajor Governmental Funds
Combining Balance Sheet....................................................................................... 46
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances................................................................................... 47
(continued)
CITY OF STEPHENVILLE, TEXAS
TABLE OF CONTENTS
(Continued)
FOR THE YEAR ENDED SEPTEMBER 30, 2005
Page
Number
FINANCIAL SECTION (Continued)
Combining Fund Statements and Schedules (Continued)
Nonmajor Special Revenue Funds
Schedule of Revenues, Expenditures and Changes in
Fund Balance – Budget and Actual – Hotel/Motel
Occupancy Tax Fund........................................................................................... 48
Schedule of Revenues, Expenditures and Changes in
Fund Balance – Budget and Actual – Child Safety Fund.................................... 49
Schedule of Revenues, Expenditures and Changes in
Fund Balance – Budget and Actual – Public Safety Fund................................... 50
Nonmajor Debt Service Fund
Schedule of Revenues, Expenditures and Changes in
Fund Balances – Budget and Actual.................................................................... 51
Nonmajor Enterprise Funds
Combining Balance Sheet....................................................................................... 52
Combining Statement of Revenues, Expenses and
Changes in Fund Net Assets................................................................................ 53
Combining Statement of Cash Flows..................................................................... 54 – 55
(continued)
CITY OF STEPHENVILLE, TEXAS
TABLE OF CONTENTS
(Continued)
FOR THE YEAR ENDED SEPTEMBER 30, 2005
Page
Number
FINANCIAL SECTION (Continued)
Combining Fund Statements and Schedules (Continued)
Agency Funds
Combining Statement of Changes in Assets and Liabilities................................... 56
Table Page
NumberNumber
STATISTICAL SECTION (Unaudited)
Government-wide Expenses by Function...................................................... 1 57
Government-wide Revenues.......................................................................... 2 58
General Governmental Expenditures by Function......................................... 3 59
General Governmental Revenue by Source................................................... 4 60
General Governmental Tax Revenue by Source............................................ 4A 61
Property Tax Levies and Collections............................................................. 5 62
Assessed and Estimated Actual Value of Property........................................ 6 63 – 64
Property Tax Rates – Direct and Overlapping Governments
(Per $100 Assessed Value)......................................................................... 7 65
Principal Taxpayers....................................................................................... 8 66
(continued)
CITY OF STEPHENVILLE, TEXAS
TABLE OF CONTENTS
(Continued)
FOR THE YEAR ENDED SEPTEMBER 30, 2005
Table Page
NumberNumber
STATISTICAL SECTION (Unaudited)
Computation of Legal Debt Margin............................................................... 9 67
Ratio of Net General Obligation Bonded Debt to Assessed
Value and Net General Obligation Bonded Debt Per Capita...................... 10 68
Ratio of Annual Debt Service Expenditures for General Obligation
Bonded Debt to Total Governmental Fund Expenditures........................... 11 69
Computation of Direct and Overlapping Bonded Debt
General Obligation Bonds........................................................................... 12 70
Revenue Bond Coverage – Water and Wastewater Bonds............................ 13 71
Demographic Statistics.................................................................................. 14 72
Property Value, Construction and Bank Deposits......................................... 15 73 – 74
Miscellaneous Statistics................................................................................. 16 75
Schedule of Insurance in Force...................................................................... 17 76
Pension Trend Data – Texas Municipal Retirement System......................... 18 77
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INTRODUCTORY SECTION
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November 18, 2005
The Honorable Mayor, City Council and the Citizens of the City of Stephenville
The City of Stephenville (the “City”) Financial Management Policies requires that the City’s Finance
Departmentprepare a completeset of financial statements presented in conformity with generally accepted
accounting principles (GAAP) and audited in accordance with generally accepted auditing standards by a firm
of licensed certified publicaccountants.Accordingly,the Comprehensive Annual Financial Report for the City
of Stephenville, Texas for the fiscal year ended September 30, 2005, is hereby issued.
This report consists of management’s representations concerning the finances of the City. Consequently,
management assumes full responsibility for the completeness and reliability of all the informationpresented in
this report. To provide a reasonable basis for making representations, the City has established a comprehensive
internal control framework that is designed both to protect the City’s assets from loss, theft, or misuse and to
compile sufficient reliable information for the preparation of the City’s financial statements in conformity with
GAAP. Because the cost of internal controls should not outweigh their benefits, the City’s comprehensive
framework of internal controls has beendesigned to provide reasonable, rather than absolute, assurance that the
financial statementswill be free frommaterialmisstatements.Asmanagement, we assert that, to the best of our
knowledge and belief, this financial report is completeand reliable in all material respects.
The City’s financial statements have been audited by Pattillo, Brown and Hill LLP, Independent Certified Public
Accountants. The goal of the independent audit is to provide reasonable assurance that the financial statements
of the City for the fiscal year ended September 30, 2005, are free of materialmisstatements. The independent
audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements; assessing the accounting principles used and significant estimatesmade by management; and
evaluating the overall financial statement presentation. The independent auditor concluded, based upon the
audit, that there was a reasonable basis for rendering an unqualified opinion that the City’s financial statements
for the fiscal year ended September 30, 2005, are fairlypresented in conformitywith GAAP. The independent
auditors’ report is presented as the first component of the financial section of this report.
GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the
basic financial statements in the formof a Management’s Discussion and Analysis (MD&A). This letter of
transmittal is designed to complement the MD&A and should be read in conjunction with it. The City’s MD&A
can be found immediately following thereport of the independent auditor.
Profile of the City
The City was incorporated in 1889 andchartered a home-rule city under Texas law in 1961. The City occupies
approximately10.26square milesand serves a populationof about 16,300. The City is empowered by state
statute to levy a tax on both real and business personal property located within its boundaries. The City also has
the power by state statute to extend its corporate citylimits by annexation, which is done periodicallywhen
deemed appropriate by the City Council.
i
The City operates under the mayor-council form of government. Policy-making and legislative authority are
vested in a governing Council consisting of the Mayor and eight (8) Council members. The City Council is
responsible for, among other things, passing ordinances, adopting the budget, appointing committees, and hiring
the City Administrator. The City Administrator is responsiblefor carrying out the policies and ordinances of the
City Council, for overseeing the day-to-dayoperations of the City,and appointing head of various departments.
The Mayor and City Council members serve two (2) yearterms. All elected officials are elected at-large.
The basic financial statements of the Cityinclude all governmental activities, organizations and functions for
which the City is financially accountable as defined by the Government Accounting Standards Board (GASB).
Based on these criteria, no other governmental organizations are included in this report.
Services Provided. The City provides a full range of services, including public safety (police, fire and
emergencymedical),maintenance of streets and infrastructure, sanitation services, maintenance of the treated
water distribution systemand both sanitary and storm sewer collection and transmission systems, recreational
activities and cultural events, landfill operations, and airport facility maintenance as well as general
administrative services.
Economic Conditions and Outlook
The information presented in the financial statements isperhaps best understood when it is considered from the
broader of the specific environment within which the City operates.
Local Economy.TheCity currently enjoys a favorable economic environment, bolstered by the strength of
both Cross Timbers area and the State of Texas. Stephenville continues to act as a retail hub of the area. While
many cities in the state are seeing the effect of a downturn in their economy, Stephenville has maintained its
strong economic position. Strong propertyvalues, sales tax receipts and building activity are keyindicators of
the strength of the City’s economic position.
The following facts reflect Stephenville’s economic condition and outlook:
Property valuations increased by about $61,500,000 (10.5%)in 2005 to$645,500,000. Residential and
commercialactivity continues to be strong. With newresidential building lots going on line this year and
commercial buildings currently under construction, all signs point to property valuations continuing to increase.
The propertytax rate of $.4850 was the same that it had been for the past three (3) years.
Sales tax collections continue to experience growth this year showing a 3.3% increase over the previous year.
ASSESSED PROPERTYVALUATIONS
SALES TAXCOLLECTIONS
$4
$700
$600
$3
$500
in millions
in millions
$400
$2
$300
$200
$1
$100
$0
$0
20012002200320042005
20012002200320042005
ii
Accounting System and Budgetary Control
The City’s accounting records for general governmental operations are maintained on a modified accrual basis,
with the revenues being recorded when available andmeasurable and expenditures being recorded when the
services or goods are received and the liabilities incurred. Accounting records for the City’s utilities are
maintained on the accrual basis.
In developing and maintaining the City’s accounting system, consideration is given to the adequacy of the
internal control structure. Internal accounting controls are designed to provide reasonable, but not absolute,
assurance regarding: (1) the safeguarding of assets against loss from unauthorized use or disposition; and (2) the
reliabilityoffinancial records for preparing financial statements and maintaining accountabilityof assets. The
concept of reasonable assurance recognizes that: (1) the cost of a control shouldnot exceed the benefits likely to
be derived; and (2) the evaluation of costs and benefits requires estimates and judgments by management.
All internal control evaluations occur within the above framework. We believe that the City’s internal controls
adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions.
The annual budget serves as the foundation of the City’sfinancial planning and control. The City Charter
provides that the City Council shall adopt the annual budget prepared by the City Administrator. The proposed
st
budget mustbe submitted to the City Secretary no later than August 1 with the adoption taking place no later
rd
than September 23. The City Administrator is authorized to transfer budgeted amounts between line items and
departmentswithin any fund; however any revisions that alter the total expenditures of any fund must be
approved by the City Council.
Budgetary control has been established at the departmental level. Financial reports are produced showing
budget and actual expenditures by line item, and are distributed monthly to the departmentalmanagement and to
others upon request.
Individual line items are reviewed and analyzedfor budgetary compliance. Personnel expenditures are
monitored and controlled at a position level and capital expenditures are monitored and controlled item by item.
Revenue budgets are reviewed monthly.
Budget-to-actual comparisons are provided in this report for the General Fund on pages 16 –18.
Debt Management. The City has been funding its capital program fromcurrent revenues and surplus working
capital since 1996.
Cash Management. The Cityutilizes its bank depository contract and its investment policyin the management
of all cash.Under the bank depository contract, the City operating account earns the bank’s public fund interest
rate. During the fiscal year ended September 30, 2005, the average rate on the operating account balances was
2.39 percent. The City’s investment policy embracescurrent state regulations on the investment of public funds
and authorizes the City to invest in certificates of deposits from the bank depository, direct obligations of the
United States Government, obligations of an agency of the United States Government and local government
investment pools. The combination of these investmentvehicles provided a weighted average return of 2.57
percent over the fiscal year. The Cityrequires that alldeposits be collateralized with securities held in joint
accounts at First Financial Bank of Stephenville. Collateral is monitored monthly to ensure that the market
value of the pledged securities equals or exceeds the related deposit or investment balance. Investments are
always executed delivery-versus-payment method.Thatis, funds are not wired or paid until verification has
beenmade that the correct security has been received. Securities are held on behalf of the Cityby the City’s
agent. All collateral shallbe subject to verification andaudit by the Finance Director and the City’s independent
auditors.
iii
v
CITY OF STEPHENVILLE, TEXAS
ORGANIZATION CHART
Citizens of Stephenville
Mayor and City
Council
Boards & Commissions
City Attorney
City AdministratorMunicipal Judge City Secretary
CommunityFinance/Community
FireUtilitiesPolice
DevelopmentAdministrationServices
PlanningFireAccounting
WaterCriminal
Parks
Suppression
ProductionInvestigation
InspectionsFireUtility Billing
Water
PatrolRecreation
Prevention
Distribution
CodeEmergency
Purchasing
Wastewater
CommunicationsCemeteries
EnforcementMedical Services
Collection
Budget
WastewaterRecordsLibrary
Treatment
Audit
LandfillAnimal ControlStreets
Investments
Airport
Customer
Service
Insurance
Senior Citizens
Water Pollution
Control
Human
Resources
vi
CITY OF STEPHENVILLE, TEXAS
PRINCIPAL CITY OFFICIALS
SEPTEMBER 30, 2005
MayorRussell E. Jergins
Council Members Dr. Malcolm L. Cross
Barry Ratliff
Alan Nash
Cyndi Godwin
Todd McEvoy
Andrew Johnson
Mark Murphy
Nancy Hunter
City Administrator Mark A. Kaiser
Director of Finance/AdministrationDonald A. Ives
Director of Utilities Vacant
Director of Community Development Betty Chew
Acting Police Chief Mark Johnson
Interim Fire Chief Jimmy Chew
Director of Community Services Drew Wells
City Secretary Cindy Stafford
vii
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FINANCIAL SECTION
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INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and
Members of City Council
City of Stephenville, Texas
We have audited the accompanying financial statements of the governmental activities, the
business-type activities, each major fund, and the aggregate remaining fund information of City of
Stephenville, Texas, as of and for the year ended September 30, 2005, which collectively comprise the
City’s basic financial statements as listed in the table of contents. These financial statements are the
responsibility of the City of Stephenville’s management. Our responsibility is to express opinions on
these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the business-type activities, each major
fund, and the aggregate remaining fund information of the City of Stephenville, Texas, as of September
30, 2005, and the respective changes in financial position and cash flows, where applicable, and the
budgetary comparison for the General Fund for the year then ended in conformity with accounting
principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated
November 18, 2005, on our consideration of the City’s internal control over financial reporting and on
our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements
and other matters. The purpose of that report is to describe the scope of our testing of internal control
over financial reporting and compliance and the results of that testing, and not to provide an opinion on
the internal control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards, and should be considered in conjunction
with this report in considering the results of our audit.
1
401 WEST HIGHWAY 6 P. O. BOX 20725 WACO, TX 76702-0725 (254) 772-4901FAX: (254) 772-4920 www.pbhcpa.com
AFFILIATE OFFICES:BROWNSVILLE, TX (956)544-7778HILLSBORO, TX (254)582-2583
TEMPLE, TX (254)791-3460 ALBUQUERQUE, NM (505) 266-5904
The management’s discussion and analysis on pages 3 through 10 are not a required part of the
basic financial statements but are supplementary information required by accounting principles
generally accepted in the United States of America. We have applied certain limited procedures, which
consisted principally of inquiries of management regarding the methods of measurement and
presentation of the required supplementary information. However, we did not audit the information and
express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of Stephenville, Texas’ basic financial statements. The introductory
section, combining and individual nonmajor fund financial statements and schedules, and statistical
tables are presented for purposes of additional analysis and are not a required part of the basic financial
statements. The combining and individual nonmajor fund financial statements and schedules have been
subjected to the auditing procedures applied in the audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a
whole. The introductory section and statistical tables have not been subjected to the auditing procedures
applied in the audit of the basic financial statements and, accordingly, we express no opinion on them.
November 18, 2005
2
MANAGEMENT’S
DISCUSSION AND ANALYSIS
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Management's Discussion and Analysis
As management of the City of Stephenville, we offer readers of the City's financial statements this
narrative overview and analysis of the financial activities of the City for the fiscal year ended September
30, 2005. We encourage readers to consider the information presented here in conjunction with
additional information that we have furnished in our letter of transmittal, which can be found in the
introductory section of this report. .
FINANCIAL HIGHLIGHTS
The assets of the City exceed its liabilities as of September 30, 2005, by $40,922,632
(net assets). Of this amount, $14,850,501 (unrestricted net assets) may be used to
meet the City’s ongoing obligations to citizens and creditors in accordance with the
City’s fund designation and fiscal policies.
The City's total net assets increased by $4,409,214.
As of the close of the current fiscal year, the City's governmental funds reported
combined ending fund balances of $9,736,101. Approximately 99 percent of this
total amount, $9,672,189, is unreserved fund balance available for use within the
City’s fund designation and fiscal policies.
As of September 30, 2005, unreserved fund balance for the General Fund was
$8,374,765 or 99 percent of total general fund expenditures.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis are intended to serve as an introduction to the City's basic financial
statements. The City's basic financial statements comprise three components: 1) government-wide
financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report
also contains other supplementary information in addition to the basic financial statements themselves.
Government-wide Financial Statements. The government-wide financial statements, which begin on
page 11 of this report, are designed to provide readers with a broad overview of the City's finances, in a
manner similar to a private-sector business.
The statement of net assets presents information on all of the City's assets and liabilities, with the
difference between the two reported as net assets. Over time, increases or decreases in net assets may
serve as a useful indicator of whether the financial position of the City is improving or deteriorating.
3
The statement of activities presents information showing how the City's net assets changed during the
most recent fiscal year. All changes in net assets are reported when the underlying event giving rise to
the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are
reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g.,
uncollected taxes and earned but unused compensation absences.)
Both of the government-wide financial statements distinguish functions of the City that are principally
supported by taxes and intergovernmental revenues (governmental activities) from functions that are
intended to recover all or a significant portion of their cost through user fees and charges (business-type
activities). The governmental activities of the City include general government, public safety, streets,
library, cemetery, culture and recreation, and community development. The business-type activities of
the City include water, wastewater, solid waste, and airport operations.
The government-wide financial statements can be found on pages 11 – 12 of this report.
Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control
over resources that have been segregated for specific activities or objectives.The City, like other state
and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related
legal requirements. All of the funds of the City can be divided into two categories – governmental funds
and proprietary funds.
Governmental Funds.Governmental funds are used to account for essentially the same functions
reported as governmental activities in the government-wide financial statements. However, unlike the
government-wide financial statements, governmental fund financial statements focus on current sources
and uses of spendable resources, as well as on balances of spendable resources available at the end of
the fiscal year. Such information may be useful in evaluating a government's near-term financing
requirements.
Because the focus on governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements. By
doing so, readers may better understand the long-term impact of the government's near-term financing
decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues,
expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison
between governmental funds and governmental activities.
A budgetary comparison statement has been provided for the General Fund to demonstrate compliance
with the annual appropriated budget. Data for the other governmental funds are combined into a single,
aggregated presentation. Individual fund data for each of these nonmajor governmental funds is
provided in the form of combining fund statements and schedules elsewhere in this report.
Proprietary Funds. The City maintains one type of proprietary fund. Enterprise Funds are used to
report the same functions presented as business-type activities in the government-wide financial
statements. The City uses the Enterprise Funds to account for water, wastewater, storm water drainage,
solid waste, and airport operations.
4
Proprietary funds provide the same type of information as the government-wide financial statements,
only in more detail.
The basic proprietary fund financial statements can be found on pages 19 – 22 of this report.
Notes to the Financial Statements.The notes provide additional information that is essential to a full
understanding of the data provided in the government-wide and fund financial statements. The notes to
the financial statements can be found on pages 24 – 45 of this report.
Other Information. In addition to the basic financial statements and accompanying notes, this report
also presents combining fund statements and schedules that further support the information in the
financial statements.
The combining fund statements and schedules for nonmajor funds are presented immediately following
the notes to the financial statementsbeginning on page 46 of this report.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net assets may serve over time as a useful indicator of a government's financial
position. In the case of the City, assets exceeded liabilities by $40,922,632 as of September 30, 2005.
A large portion of the City's net assets (62 percent) reflects its investments in capital assets (e.g., land,
buildings, equipment and infrastructure), less any outstanding debt used to acquire those assets. The
investments in capital assets net of related debt increased by $2,154,921 mainly due to the acquisition
and depreciation of capital assets. The City uses these capital assets to provide services to citizens;
consequently, these assets are not available for future spending. Although the City’s investment in its
capital assets is reported net of related debt, it should be noted that the resources needed to repay this
debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate
these liabilities.
CITY OF STEPHENVILLE’S NET ASSETS
Governmental ActivitiesBusiness-type ActivitiesTotals
200520042005200420052004
Current and other assets$10,336,824$9,639,363$13,403,902$12,784,572$23,740,726$22,423,935
11, 10,095,652 28,958,228 27,824,738 39,497,348 38,920,390455,576
Capital assets
21, 20,432,476 42,597,591 40,228,640 63,281,920 60,661,116879,511
Total assets
Liabilities311,136312,135907,493928,9381,218,6291,241,073
2, 2,205,990 19,607,035 20,313,865 21,517,985 23,519,855125,020
Noncurrent liabilities
2, 2,517,126 20,919,170 21,221,358 22,446,923 24,738,484366,093
Total liabilities
Net assets:
Invested in capital assets,
net of related debt9,070,6528,877,24116,190,91614,229,40625,261,56823,106,647
Restricted295,721620,104514,842470,750810,5631,090,854
9, 8,548,977 5,181,076 4,301,524 14,134,841 12,850,501315,917
Unrestricted
$18, 17,915,350$ 22,678,421$ 18,007,282$ 40,834,997$ 36,922,632$513,418
Total net assets
5
An additional portion of the City’s assets (5percent) represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net assets, $14,850,501,
may be used to meet the government's ongoing obligations to citizens and creditors.
As of September 30, 2005, the City is able to report positive balances in all three categories of net assets,
both for the government as a whole, as well as for its separate governmental and business-type activities.
The same held true for the prior fiscal year. Overall, the City had an increase in net assets of
$4,409,214.
Governmental Activities. Governmental activities increased the City’s net assets by $1,236,929 or 28
percent of the total growth in net assets. The net assets invested in capital assets, net of related debt
decreased by $193,411 or 2 percent due to pay down of annual debt service. Unrestricted net assets
increased by $1,367,901 or 16 percent.
Total revenues for governmental activities increased from the previous year by $587,732. General
revenue had a net increase of $547,479 or 7 percent.
Business-type Activities. Net Assets from business-type activities increased by $3,172,285 or 17
percent from $18,834,997 to $22,007,282 accounting for the other 72 percent of the total growth in net
assets. This increase is primarily due to the excess of operating revenues over operating expenditures
and net transfers.
The following table provides a summary of the City’s operations for the year ended September 30, 2005,
with comparative totals for the year ended September 30, 2004.
6
CITY OF STEPHENVILLE’S CHANGES IN NET ASSETS
Governmental ActivitiesBusiness-type ActivitiesTotals
200520042005200420052004
Revenues:
Pro
gram revenues:
Charges for services$976,894$901,999$5,945,434$5,239,417$6,922,328$6,141,416
Operatinggrants125,068189,805--125,068189,805
Capitalgrants
and contributions556,425366,4781,513,020411,4742,069,445777,952
General revenues:
Property taxes2,896,2732,790,389--2,896,2732,790,389
Sales taxes3,654,2323,538,100--3,654,2323,538,100
Franchise taxes1,264,2981,017,370--1,264,2981,017,370
Other taxes292,447262,467--292,447262,467
Investment earnings286,30187,990305,559100,773591,860188,763
54, 12,068 -158 26, 54,429 38,068587
Miscellaneous
10, 9,106,006 7,166,756 5,764,013 17,778,093 14,870,019944,849
Total revenues
Expenses:
Generalgovernment1,453,9861,421,563--1,453,9861,421,563
Public safety4,345,8464,026,402--4,345,8464,026,402
Streets979,051995,046--979,051995,046
Culture and recreation1,582,8641,574,032--1,582,8641,574,032
y development348,177296,244--348,177296,244
Communit
Interest on long-term
debt109,153130,388--109,153130,388
Water and wastewater--4,367,6714,231,1724,367,6714,231,172
ge--166,34635,462166,34635,462
Storm water draina
Sanitary landfill--99,078143,16199,078143,161
--8,633101,0828, 101,633082
Airport
8, 8,819,077 4,443,675 4,641,728 13,510,877 12,460,805954,552
Total expenses
Increases in net assets
before transfers1,286,929723,0813,122,2851,267,2164,409,2141,990,297
(50, 351,000) 50,518 351,000( -518) -
Transfers
Change in net assets1,236,9291,074,5993,172,285915,6984,409,2141,990,297
17, 16,678,421 18,603,822 17,834,997 36,919,299 34,513,418523,121
Net assets - beginning
$18, 17,915,350$ 22,678,421$ 18,007,282$ 40,834,997$ 36,922,632$513,418
Net assets - ending
FINANCIAL ANALYSIS OF THE GOVERNMENT’S FUNDS
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-
related legal requirements.
Governmental Funds. The focus of the City’s governmentalfunds is to provide information on near-
term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the
City’s financing requirements. In particular, unreserved fund balance may serve as a useful measure of
a government’s net resources available for spending at the end of the fiscal year.
As of the end of the current fiscal year, the City’s governmental funds reported combined ending fund
balances of $9,736,101. Approximately 99 percent of this total amount, $9,672,189, constitutes
unreserved fund balance. Refer to page 13 of this report for a more detailed presentation of
governmental fund balances.
7
In the General Fund, the City budgeted for a decrease in the fund balance on a budget basis of $833,690
but due to actual revenues being more than budgeted and actual expenditures being less than budgeted, the
fund balance actually increased by $352,728 during the current fiscal year. This was mainly due to higher
than projected sales tax collections. Sales tax collections increased by 3.3% from the previous year and
the City collected $410,207 more than budgeted. Other actual revenues collected were also higher than
budgeted: 1) current year and delinquent property taxes were collected at higher rates than projected to
generate $30,018; 2) franchise fees were $106,939; 3) licenses and permit fees were $77,273 more than
budgeted; and 4) service charges were also higher because ambulance fees collected were $58,409 higher
than budgeted. Expenditures were lower than budgeted mainly because street department costs were
$154,210 lower, fire department costs were $77,376 lower, and community development costs were
$98,961 lower than budgeted.
The fund balance of the City’s General Fund increased by $352,728 during the current fiscal year.
Proprietary Funds. The City's proprietary funds provide the same type of information found in the
government-wide financial statements, but in more detail.
Unrestricted net assets of the City's Enterprise Funds at the end of the year amounted to $3,754,024.
The increase in net assets was $3,172,285. Other factors concerning the finances of these funds have
already been addressed in the discussion of the City's business-type activities.
General Fund Budgetary Highlights
Differences between the original budget and the final amended budget amounted to $473,580. The most
significant changes were for $250,000 to fund acquisitions of rights-of-way for the proposed Ollie/Mary
Street expansion and $91,200 for additional parks maintenance and projects. The remaining portion of
the budget difference was used mainly to cover adjustments for unexpected maintenance and personnel
costs.
Even with these increases in appropriations, the excess in revenues during the year was sufficient to
fund these increases without reducing the budgeted General Fund fund balance.
Capital Assets. The City's investment in capital assets for its governmental and business-type activities
as of September 30, 2005, amounts to $25,261,568 (net of accumulated depreciation). This investment
in capital assets includes land, buildings, improvements, machinery and equipment, park facilities and
infrastructure.
Major capital asset events occurring during the current fiscal year included the following:
Purchase of new advanced life support ambulance for $83,844;
Elevated storage tank renovations for $223,647;
Park improvements for $101,345;
Continuation of street improvement program for $283,756;
Rights-of-way acquisitions for the Ollie/Mary Streets expansion at $127,273;
Water and sewer line replacement programs for $572,132;
Acquired vehicles and other equipment for approximately $186,125;
Purchased new firefighting equipment for $62,207.
8
CITY OF STEPHENVILLE’S CAPITAL ASSETS AT YEAR-END
Governmental ActivitiesBusiness-typeActivitiesTotals
200520042005200420052004
Land$1,831,885$1,738,556$799,177$798,082$2,631,062$2,536,638
Buildings and
improvements2,445,9471,759,0903,804,3683,922,0176,250,3155,681,107
Equipment1,206,0331,245,209416,506436,9611,622,5391,682,170
Infrastructure5,611,7876,215,37323,454,85322,067,75529,066,64028,283,128
Construction in
-- 349 272,53,834 3493 272,53,8343
progress
$11,09 105,652$ 28,824,73,958,228$ 28$ 39,9207,497,348$ 3,390$8,455,576
Total capitalassets
Additional information on the City's capital assets can be found on page 37 – 38 of this report.
DEBT ADMINISTRATION
At the end of the current fiscal year, the City had total bonded debt of $21,185,233. Of this amount,
$2,025,000 represents bonded debt backed by the full faith and credit of the City, $18,929,000
represents utility revenue bonds secured by water and sewer revenues and $231,233 represents revenue
bonds secured by airport revenues.
OUTSTANDING DEBT AT YEAR-END
Governmental ActivitiesBusiness-type ActivitiesTotals
200520042005200420052004
General obligation$945,000$1,235,000$-$-$945,000$1,235,000
Certificates of
obligations1,080,0001,210,000--1,080,0001,210,000
Revenue bonds
-- 1 20,469,239,160,233 193 20,469,23,160,2333
payable
$ 2,4452,025,000$ 1,000$ 20,469,239,160,233$ 213$ 22,914,23,185,233$3
The City's General Obligation, Tax and Certificates of Obligation Bond ratings are listed below.
Moody'sStandard
Investors Serviceand Poor's
General Obligation BondsA3A
Additional information on the City’s long term-debt can be found in pages 39 – 41 this report.
9
ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES
In the fiscal year 2006-07 budget, General Fund revenues and transfers are budgeted to increase by 4.0%
from the 2004-05 final budget with ad valorem taxes making up 30.5% and sales tax collections making
up 41.3% of the General Fund revenues. Certified assessed property valuations increased by 10.5% over
the preceding year. Factors that were considered in preparing the City’s budget for the 2006 fiscal year
were an increase in personnel costs by about 6.5%.
During the current fiscal year, unreserved fund balance in the General Fund increased to $8,374,765.
The City uses reserves from the General Fund to supplement capital projects (e.g. street paving, code
enforcement demolition costs, park improvements, rights-of-way acquisitions, capital replacement)
during the year as the needs arise and where favorable unit pricing is received on such projects.
Additionally, the City’s Financial Management Practices call for the designation of any surplus of
revenues over expenses at fiscal year-end as a means of providing resources for major capital projects.
There are ample funds for transfers during 2006, should the City Council so desire, and still retain the
minimum fund balance provisions established by the Financial Management Practices.
Requests for Information
This financial report is designed to provide a general overview of the City's finances for all those with
an interest in the government's finances. Questions concerning any of the information provided in this
report or requests for additional information should be addressed to Donald A. Ives, Director of Finance
and Administration, 298 West Washington, Stephenville, Texas 76401-4257 or call (254) 918-1211.
10
BASIC
FINANCIAL STATEMENTS
THIS PAGE LEFT BLANK INTENTIONALLY
CITY OF STEPHENVILLE, TEXAS
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2005
Primary Government
GovernmentalBusiness-type
ActivitiesActivitiesTotal
ASSETS
Cash and investments17,107,607$ 3,347,868$ 20,455,475$
Receivables (net of allowances for uncollectibles)
Taxes804,392 - 804,392
Accounts295,372 960,212 1,255,584
Special assessments213,714 - 213,714
Other46,376 - 46,376
Internal balances8,143,986)( 8,143,986 -
Inventories13,349 - 13,349
Restricted investments- 747,711 747,711
Deferred charges- 204,125 204,125
Capital assets
Land1,831,885 799,177 2,631,062
Buildings and improvements3,191,028 4,621,200 7,812,228
Machinery and equipment4,233,138 1,624,761 5,857,899
Infrastructure/water and wastewater distribution9,270,814 38,052,203 47,323,017
Construction in progress- 349,834 349,834
(7,431,213)( 24,053,650)(
Less: accumulated depreciation
28,824,73811,095,652 39,920,390
Total capital assets
42,228,64021,432,476 63,661,116
Total assets
LIABILITIES
Accounts payable145,060 594,053 739,113
Accrued liabilities153,470 20,013 173,483
Accrued interest payable12,606 236,307 248,913
Customer deposits- 57,120 57,120
Noncurrent liabilities:
Due within one year466,198 1,293,360 1,759,558
1,739,792 19,760,297
Due in more than one year
2,517,126 22,738,484
Total liabilities
NET ASSETS
Invested in capital assets, net of related debt9,070,652 16,190,916 25,261,568
Restricted for:
Hotel/motel economic development233,917 - 233,917
Child and public safety13,826 - 13,826
Debt service47,978 514,842 562,820
9,548,977 5,301,524 14,850,501
Unrestricted
$ 22,007,28218,915,350$ 40,922,632$
Total net assets
The notes to the financial statements are an integral part of this statement.
11
CITY OF STEPHENVILLE, TEXAS
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2005
Net (Expense) Revenue and
Program RevenuesChanges in Net Assets
OperatingCapital
Charges forGrants andGrants andGovernmentalBusiness-type
Functions/ProgramsExpensesServicesContributionsContributionsActivitiesActivitiesTotal
Governmental activities
General government$ 172,2921,453,986$ 48,899$ -$ 1,232,795$( -)$ 1,232,795$()
Public safety 488,2924,345,846 52,715 2,500 3,802,339( -) 3,802,339()
Streets 17,213979,051 - 506,963 454,875( -) 454,875()
Culture and recreation 135,6071,582,864 23,454 46,962 1,376,841( -) 1,376,841()
Community developmen 163,490348,177 - - 184,687( -) 184,687()
-109,153 - - 109,153)( - 109,153)(
Interest on long-term debt
976,8948,819,077 125,068 556,425 7,160,690)( - 7,160,690)(
Total governmental activities
Business-type activities
Water and wastewater 5,245,9014,367,671 - 1,509,390 - 2,387,620 2,387,620
Sanitary landfill 174,845166,346 - - - 8,499 8,499
Airport99,078 39,088 - 3,630 - 56,360)( 56,360)(
485,6008,633 - - - 476,967 476,967
Storm water drainage
5,945,4344,641,728 - 1,513,020 - 2,816,726 2,816,726
Total business-type activities
$ 13,460,805 6,922,328$ 125,068$ 2,069,445$ 7,160,690)( 2,816,726 4,343,964)(
Total
General revenues:
Taxes:
Property - generalpurpose2,447,610 - 2,447,610
Property - debt service -448,663 448,663
Sales -3,654,232 3,654,232
Franchise -1,264,298 1,264,298
Other -292,447 292,447
Investment earnings 305,559286,301 591,860
Miscellaneous 54,068 - 54,068
( 50,00050,000) -
Transfers
8,397,619 355,559 8,753,178
Total general revenues and transfers
Change in net assets 3,172,2851,236,929 4,409,214
17,678,421 18,834,997 36,513,418
Net assets, beginning
$ 18,915,350 22,007,282$ 40,922,632$
Net assets, ending
The notes to the financial statements are an integral part of this statement.
12
CITY OF STEPHENVILLE, TEXAS
BALANCE SHEET
GOVERNMENTAL FUNDS
SEPTEMBER 30, 2005
OtherTotal
CapitalGovernmentalGovernmental
GeneralProjectsFundsFunds
ASSETS
Cash and investments7,812,242$ 8,993,302$ 302,063$ 17,107,607$
Receivables (net of allowance for uncollectibles)
Taxes747,498 - 56,894 804,392
Accounts116,099 - - 116,099
Intergovernmental44,753 - 1,623 46,376
Special assessment- 213,714 - 213,714
-13,349 - 13,349
Inventories
8,733,941 9,207,016 360,580 18,301,537
Total assets
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable87,748 - 52,253 140,001
Accrued liabilities153,470 - - 153,470
Due to other funds5,059 8,143,986 - 8,149,045
-112,899 10,021 122,920
Deferred revenue
8,143,986359,176 62,274 8,565,436
Total liabilities
Fund balances:
Reserved for:
Inventories13,349 - - 13,349
Debt service- - 50,563 50,563
Unreserved, reported in:
General fund8,361,416 - - 8,361,416
Special revenue funds- - 247,743 247,743
1,063,030- - 1,063,030
Capital projects fund
8,374,765 1,063,030 298,306
Total fund balances 9,736,101
$ 8,733,941 9,207,016$ 360,580$
Total liabilities and fund balances
Capitalassetsusedingovernmentalactivitiesarenotfinancialresourcesand,therefore,arenotreportedinthe
funds.
11,095,652
Otherlong-termassetsarenotavailabletopayforcurrent-periodexpendituresand,therefore,aredeferredinthe
funds.
302,193
Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds.
(2,218,596)
$ 18,915,350
Net assets of governmental activities
The notes to the financial statements are an integral part of this statement.
13
CITY OF STEPHENVILLE, TEXAS
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
OtherTotal
CapitalGovernmentalGovernmental
GeneralProjectsFundsFunds
REVENUES
Taxes:
Property$ -2,444,354$ 447,803$ 2,892,157$
Sales3,654,232 - - 3,654,232
Franchise1,264,298 - - 1,264,298
Other32,347 - 260,100 292,447
Special assessment- 402,789 - 402,789
Licenses and permits168,523 - - 168,523
Fines and forfeitures205,372 - 2,035 207,407
Intergovernmental 46,96253,503 3,763 104,228
Service charges651,021 - - 651,021
Investment earnings236,584 40,057 9,659 286,300
108,222 - - 108,222
Miscellaneous
489,8088,818,456 723,360 10,031,624
Total revenues
EXPENDITURES
Current:
General government1,002,181 - 229,528 1,231,709
Public safety -4,133,744 6,994 4,140,738
Streets578,126 - - 578,126
Culture and recreation1,412,305 - - 1,412,305
Community development -346,969 - 346,969
Debt service:
Principal - - 420,000 420,000
Interest and fiscal charges- - 111,582 111,582
942,403 71,969 - 1,014,372
Capital outlay
71,9698,415,728 768,104 9,255,801
Total expenditures
EXCESS(DEFICIENCY) OF REVENUES
402,728 417,839 44,744)( 775,823
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in - - 90,000 90,000
(50,000) 90,000)( - 140,000)(
Transfers out
(50,000) 90,000)( 90,000 50,000)(
Total other financing sources (uses)
327,839352,728 45,256 725,823
NET CHANGE IN FUND BALANCES
735,1918,022,037 253,050 9,010,278
FUND BALANCES, BEGINNING
$ 1,063,0308,374,765$ 298,306$ 9,736,101$
FUND BALANCES, ENDING
The notes to the financial statements are an integral part of this statement.
14
CITY OF STEPHENVILLE, TEXAS
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2005
AmountsreportedforgovernmentalactivitiesintheStatementofActivities(page12)are
different because:
Net change in fund balances - total governmental funds (page 14)725,823$
Governmentalfundsreportcapitaloutlaysasexpenditures.However,inthestatementof
activitiesthecostofthoseassetsisallocatedovertheirestimatedusefullivesandreportedas
depreciation expense. 98,476
Theneteffectofvariousmiscellaneoustransactionsinvolvingcapitalassets(i.e.,sales,trade-
ins, and donations) is to increase net assets.38,948
Revenuesinthestatementofactivitiesthatdonotprovidecurrentfinancialresourcesarenot
reported as revenues in the funds.( 29,792)
Theissuanceoflong-termdebt(e.g.,bonds,leases)providescurrentfinancialresourcesto
governmentalfunds,whiletherepaymentoftheprincipaloflong-termdebtconsumesthe
current financial resources of governmental funds. 420,000
Someexpensesreportedinthestatementofactivitiesdonotrequiretheuseofcurrentfinancial
resources and, therefore, are not reported as expenditures in governmental funds.
(16,526)
$ 1,236,929
Change in net assets of governmental activities (page 12)
The notes to the financial statements are an integral part of this statement.
15
CITY OF STEPHENVILLE, TEXAS
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2005
Variance with
Final Budget
Budgeted Amounts
ActualPositive
OriginalFinalAmounts(Negative)
REVENUES
Taxes5,537,947$ 5,681,972$ 6,130,933$ 448,961$
Franchise1,142,359 1,157,359 1,264,298 106,939
Licenses and permits91,250 91,250 168,523 77,273
Fines and forfeitures195,000 195,000 205,372 10,372
Intergovernmental45,512 51,932 53,503 1,571
Service charges591,468 619,132 651,021 31,889
Investment earnings90,000 80,000 236,584 156,584
32,25032,250 108,222 75,972
Miscellaneous
7,725,786 7,908,895 8,818,456 909,561
Total revenues
EXPENDITURES
Current:
General government:
City council46,674 49,674 37,546 12,128
City administrator110,201 110,201 104,077 6,124
City secretary 72,43667,436 72,332 104
Emergency management4,850 6,650 5,486 1,164
Municipal buildings197,220 197,220 174,338 22,882
Financial administration and accounting 286,806286,806 288,746 1,940()
Purchasing 46,98846,988 46,541 447
Tax assessment and collection81,250 81,250 59,537 21,713
Legal counsel65,713 65,713 61,530 4,183
Municipal court84,230 84,230 82,623 1,607
79,96076,060 69,425 10,535
Human resources
1,067,428 1,081,128 1,002,181 78,947
Total general government
Public safety:
Fire and ambulance administration110,382 108,482 109,151 669()
Fire prevention and investigation73,691 73,741 72,055 1,686
Fire suppression780,354 785,494 748,646 36,848
Emergency medical services725,921 746,761 731,537 15,224
Volunteer31,558 31,558 23,511 8,047
(continued)
16
CITY OF STEPHENVILLE, TEXAS
GENERAL FUND
STATEMENT OF REVENUE, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
(Continued)
FOR THE YEAR ENDED SEPTEMBER 30, 2005
Variance with
Final Budget
Budgeted Amounts
ActualPositive
OriginalFinalAmounts(Negative)
EXPENDITURES(Continued)
Current:
Public safety(continued):
Police administration106,040$ 103,840$ 106,776$ 2,936$()
Police patrol1,315,541 1,335,041 1,324,861 10,180
Police communications318,295 317,595 308,443 9,152
Police records119,558 119,808 117,325 2,483
Criminal investigation295,528 295,528 288,130 7,398
Police reserve55,104 55,104 55,095 9
Animal control98,537 99,237 99,240 3()
156,818146,818 148,974 7,844
Public safety facility
4,177,327 4,229,007 4,133,744 95,263
Total public safety
Streets:
656,771651,771 578,126 78,645
Street maintenance
656,771651,771 578,126 78,645
Total streets
Culture and recreation:
Recreation administration580,506 600,506 590,113 10,393
Park maintenance390,972 420,372 418,442 1,930
Cemeteries 109,124 109,124 105,872 3,252
Library 216,403186,403 185,995 30,408
111,826100,026 111,883 57)(
Senior citizens center
1,367,031 1,458,231 1,412,305 45,926
Total culture and recreation
Community development:
Community developmentplanning 389,529389,529 200,767 188,762
Community development inspection70,552 79,552 72,283 7,269
83,93880,938 73,919 10,019
Code enforcement
553,019541,019 346,969 206,050
Total community development
7,804,576 7,978,156 7,473,325 504,831
Total current
(continued)
17
CITY OF STEPHENVILLE, TEXAS
GENERAL FUND
STATEMENT OF REVENUE, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
(Continued)
FOR THE YEAR ENDED SEPTEMBER 30, 2005
Variance with
Final Budget
Budgeted Amounts
ActualPositive
OriginalFinalAmounts(Negative)
EXPENDITURES(Continued)
Capital outlay:
General government:
Municipal buildings-$ 30,000$ 35,778$ 5,778)$(
25,00025,000 12,564 12,436
Financial and administration and accounting
55,00025,000 48,342 6,658
Total general government
Public safety:
Emergency medical services171,500 171,500 151,129 20,371
75,50075,500 82,214 6,714)(
Police patrol
247,000247,000 233,343 13,657
Total public safety
Streets:
538,000288,000 450,156 87,844
Street maintenance
538,000288,000 450,156 87,844
Total highways and streets
Culture and recreation
Park maintenance164,900 184,900 188,722 3,822)(
5,0005,000 4,288 712
Library
189,900169,900 193,010 3,110)(
Total culture and recreation
Community development:
25,00025,000 17,552 7,448
Community development planning
25,00025,000 17,552 7,448
Total community and development
1,054,900754,900 942,403 112,497
Total capital outlay
8,559,476 9,033,056 8,415,728 617,328
Total expenditures
OTHER FINANCING SOURCES (USES)
50,000)-( 50,000)( -
Transfers out
50,000)-( 50,000)( -
Total other financing sources (uses)
( 1,174,161833,690)( 352,728) 1,526,889
NET CHANGE IN FUND BALANCES
8,022,037 8,022,037 8,022,037 -
FUND BALANCE, BEGINNING
$7,188,347 6,847,876$ 8,374,765$ 1,526,889$
FUND BALANCE, ENDING
The notes to the financial statements are an integral part of this statement.
18
CITY OF STEPHENVILLE, TEXAS
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
SEPTEMBER 30, 2005
Business-type Activities - Enterprise Funds
Water andOther
ASSETSWastewaterFundsTotal
Current assets:
Cash and investments1,668,625$ 1,679,243$ 3,347,868$
Accounts receivable - net of allowances for uncollectibles888,467 71,745 960,212
Due from other funds8,143,986 - 8,143,986
-747,711 747,711
Restricted investments
1,750,98811,448,789 13,199,777
Total current assets
Noncurrent assets:
Deferred charges204,125 - 204,125
Capital assets:
Land 635,456163,721 799,177
Buildings and improvements2,321,930 2,299,270 4,621,200
Equipment1,047,991 576,770 1,624,761
Water and wastewater distribution38,052,203 - 38,052,203
Construction in progress107,564 242,270 349,834
( 921,207)15,701,230)( 16,622,437)(
Less: accumulated depreciation
2,832,55925,992,179 28,824,738
Total capital assets
2,832,55926,196,304 29,028,863
Total noncurrent assets
4,583,54737,645,093 42,228,640
Total assets
LIABILITIES
Current liabilities:
Accounts payable593,483 570 594,053
Accrued liabilities17,703 2,310 20,013
Customer deposits57,120 - 57,120
Accrued interest232,869 3,438 236,307
Bonds payable1,278,038 9,000 1,287,038
1,9914,331 6,322
Compensated absences payable
17,3092,183,544 2,200,853
Total current liabilities
Long-term liabilities:
Revenue bonds payable17,580,766 - 17,580,766
Certificate of obligation- 236,233 236,233
Compensated absences payable17,327 - 17,327
186,179- 186,179
Liability for landfill closure
422,41217,598,093 18,020,505
Total long-term liabilities
439,72119,781,637 20,221,358
Total liabilities
NET ASSETS
Invested in capital assets, net of related debt13,594,590 2,596,326 16,190,916
Restricted for debt service514,842 - 514,842
1,547,5003,754,024 5,301,524
Unrestricted
$ 4,143,82617,863,456$ 22,007,282$
Total net assets
The notes to the financial statements are an integral part of this statement.
19
CITY OF STEPHENVILLE, TEXAS
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
Business-type Activities - Enterprise Funds
Water andOther
WastewaterFundsTotal
OPERATING REVENUES
Water sales3,115,409$ -$ 3,115,409$
Wastewater charges1,896,700 - 1,896,700
Tap and collection fees161,451 - 161,451
Delinquent charges32,953 - 32,953
Gate charges- 174,845 174,845
Hanger rental- 35,876 35,876
Storm water drainage fees- 485,600 485,600
3,21239,388 42,600
Other service charges
699,5335,245,901 5,945,434
Total operating revenues
OPERATING EXPENSES
Personnel services747,135 59,189 806,324
Contractual services762,145 1,986 764,131
Utilities424,414 18,398 442,812
Repairs and maintenance239,421 28,018 267,439
Other supplies and expenses377,790 41,408 419,198
114,545978,015 1,092,560
Depreciation
263,5443,528,920 3,792,464
Total operating expenses
435,9891,716,981 2,152,970
OPERATING INCOME (LOSS)
NONOPERATING REVENUES (EXPENSES)
Investment earnings265,685 39,874 305,559
Loss on sale of capital assets3,004( -) 3,004()
( 10,513)835,747)( 846,260)(
Interest and fiscal charges on debt
( 29,361573,066) 543,705)(
Total nonoperating revenues (expenses)
465,3501,143,915 1,609,265
INCOME (LOSS) BEFORE CONTRIBUTIONS
3,6301,509,390 1,513,020
CAPITAL CONTRIBUTIONS
- 50,000 50,000
TRANSFERS IN
518,9802,653,305 3,172,285
CHANGE IN NET ASSETS
3,624,84615,210,151 18,834,997
TOTAL NET ASSETS, BEGINNING
$ 4,143,82617,863,456$ 22,007,282$
TOTAL NET ASSETS, ENDING
The notes to the financial statements are an integral part of this statement.
20
CITY OF STEPHENVILLE, TEXAS
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
Business-type Activities - Enterprise Funds
Water andOther
WastewaterFundsTotal
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers5,104,785$ 693,232$ 5,798,017$
Cash payments to employees for services749,251)( 56,906)( 806,157)(
( 62,228)1,800,946)( 1,863,174)(
Cash payments to suppliers for goods and services
574,0982,554,588 3,128,686
Cash provided by operating activities
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Cash received from other funds- 50,000 50,000
( 36,554)7,982,894)( 8,019,448)(
Cash paid to other funds
( 13,4467,982,894) 7,969,448)(
Cash provided (used) by noncapital financing activities
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Principal repayments on bonds1,295,000)( 14,000)( 1,309,000)(
Interest and fiscal charges on debt776,510)( 10,513)( 787,023)(
Capital contributions1,509,390 3,630 1,513,020
( 276,444)2,146,510)( 2,422,954)(
Acquisition and construction of capital assets
Cash used by capital and
( 297,327)2,708,630)( 3,005,957)(
related financing activities
CASH FLOWS FROM INVESTING ACTIVITIES
265,685 39,874 305,559
Interest on investments
265,685 39,874 305,559
Cash provided by investing activities
NET INCREASE (DECREASE) IN CASH
( 330,0917,871,251) 7,541,160)(
AND CASH EQUIVALENTS
1,349,15210,287,587 11,636,739
CASH AND CASH EQUIVALENTS, BEGINNING
$ 1,679,2432,416,336$ 4,095,579$
CASH AND CASH EQUIVALENTS, ENDING
(Including $747,711 for the Water and Wastewater
fund in restricted investments)
(continued)
21
CITY OF STEPHENVILLE, TEXAS
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
(Continued)
FOR THE YEAR ENDED SEPTEMBER 30, 2005
Business-type Activities - Enterprise Funds
Water andOther
WastewaterFundsTotal
RECONCILIATION OF OPERATING INCOME (LOSS) TO
NET CASH PROVIDED BY OPERATING ACTIVITIES
Operating income (loss)1,716,981$ 435,989$ 2,152,970$
Adjustments to reconcile operating income (loss) to
net cash provided by operating activities:
Depreciation978,015 114,545 1,092,560
Change in assets and liabilities:
Decrease (increase) in accounts receivable143,106)( 6,308)( 149,414)(
Increase (decrease) in accounts payable2,824 2,477)( 347
Increase (decrease) in accrued liabilities1,821)( 1,145 676)(
Increase (decrease) in customer deposits1,990 - 1,990
Increase (decrease) in compensated absences295)( 1,138 843
30,066- 30,066
Increase (decrease) in liability for landfill closure
837,607 138,109 975,716
Total adjustments
$ 574,0982,554,588$ 3,128,686$
Net cash provided by operating activities
The notes to the financial statements are an integral part of this statement.
22
CITY OF STEPHENVILLE, TEXAS
STATEMENT OF FIDUCIARY NET ASSETS
AGENCY FUNDS
SEPTEMBER 30, 2005
Agency
Funds
ASSETS
$ 5,059
Due from other funds
5,059
Total assets
LIABILITIES
5,059
Due to others
$ 5,059
Total liabilities
The notes to the financial statements are an integral part of this statement.
23
CITY OF STEPHENVILLE, TEXAS
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2005
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Stephenville, Texas, was incorporated August 6, 1989, and operates as a home rule
City. The City operates under a mayor-council form of government and provides the following
services as authorized by its charter, general government, public safety (police, fire and EMS),
streets, community development (planning and zoning, licensing, permitting and inspection),
water and wastewater system, culture and recreation, airport and sanitary landfill.
A.Reporting Entity
The accompanying financial statements comply with the provisions of the GASB Statements
No. 14 and 39, “The Financial Reporting Entity,” in that the financial statements include all
organizations, activities, functions and component units for which the City (the “primary
government”) is financially accountable. Financial accountability is defined as the
appointment of a voting majority of a legally separate organization’s governing body and
either (1) the City’s ability to impose its will over the organization, or (2) the potential that
the organization will provide a financial benefit to or impose a financial burden on the City.
There are no component units which satisfy requirements for blending within the City’s
financial statements or for discrete presentation.
B.Government-wide Fund Financial Statements
The government-wide financial statements (i.e., the statement of net assets and the statement
of activities) report information on all of the nonfiduciary activities of the primary
government. For the most part, the effect of interfund activity has been removed from these
statements. Governmental activities, which normally are supported by taxes and
intergovernmental revenue, are reported separately from business-type activities, which rely
to a significant extent on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given
function or segment are offset by program revenue. Direct expenses are those that are clearly
identifiable with a specific function or segment. Program revenue includes 1) charges to
customers or applicants who purchase, use, or directly benefit from goods, services, or
privileges provided by a given function or segment, and 2) grants and contributions that are
restricted to meeting the operational or capital requirements of a particular function or
segment. Taxes and other items not properly included among program revenue are reported
instead as general revenue.
(continued)
24
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
B.Government-wide Fund Financial Statements (Continued)
Separate financial statements are provided for governmental funds, proprietary funds, and
fiduciary funds, even though the latter are excluded from the government-wide financial
statements. Major individual governmental funds and major individual Enterprise Funds are
reported as separate columns in the fund financial statements.
C.Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund and
fiduciary fund financial statements. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows. Property
taxes are recognized as revenue in the year for which they are levied. Grants and similar
items are recognized as revenue as soon as all eligibility requirements imposed by the
provider have been met.
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized
as soon as they are both measurable and available. Revenues are considered to be available
when they are collectible within the current period or soon enough thereafter to pay liabilities
of the current period. For this purpose, the government considers revenue to be available if
collected within 60 days of the end of the current fiscal period. Expenditures generally are
recorded when a liability is incurred, as under accrual accounting. However, debt service
expenditures, as well as expenditures related to compensated absences and claims and
judgments, are recorded only when payment is due.
Property taxes, franchise taxes, sales taxes, and interest associated with the current fiscal
period are all considered to be susceptible to accrual and so have been recognized as revenue
of the current fiscal period. All other revenue items are considered to be measurable and
available only when cash is received by the City.
Governmental Funds are those through which most governmental functions of the City are
financed. The acquisition, use, and balances of the City’s expendable financial resources and
the related liabilities (except those accounted for in the proprietary fund type) are accounted
for through governmental funds. The measurement focus is upon determination of changes
in financial position, rather than upon net income determination.
(continued)
25
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C.
Measurement Focus, Basis of Accounting and Financial Statement Presentation
(Continued)
The City reports the following major governmental fund:
TheGeneral Fund – is the general operating fund of the City. It is used to
account for all financial resources except those required to be accounted for in
another fund.
TheCapital Projects Fund is used to account for financial resources to be used
for the acquisition or construction of general major capital facilities. Financing is
provided primarily by the sale of general obligation bonds and developer
contributions.
The City reports the following major proprietary fund:
TheWater and Wastewater Fund– is used to account for the activities necessary
for the provisions of water and wastewater services.
Additionally, the City reports the following fund type:
Fiduciary Funds – Agency Fundsare used to account for assets held by the City
in a trustee capacity or as an agent on behalf of others. Agency funds are
custodial in nature and do not present results of operations or have a measurement
focus. The City has two agency funds: Fun Fair and Senior Citizens Funds.
Private-sector standards of accounting and financial reporting issued prior to December 1,
1989, generally are followed in both the government-wide and proprietary fund financial
statements to the extent that those standards do not conflict with or contradict guidance of the
Governmental Accounting Standards Board. Governments also have the option of following
subsequent private-sector guidance for their business-type activities and Enterprise Funds,
subject to this same limitation. The City has elected not to follow subsequent private-sector
guidance.
As a general rule, the effect of interfund activity has been eliminated from the government-
wide financial statements. Exceptions to this general rule are charges between the City’s
water and wastewater function and various other functions of the government. Elimination
of these charges would distort the direct costs and program revenue reported for the various
functions concerned.
Amounts reported as program revenues include: 1) charges to customers or applicants for
goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital
grants and contributions, including special assessments. Internally dedicated resources are
reported as general revenues rather than as program revenue. Likewise, general revenue
includes all taxes.
(continued)
26
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C.
Measurement Focus, Basis of Accounting and Financial Statement Presentation
(Continued)
Proprietary funds distinguish operating revenues and expenses from nonoperating items.
Operating revenues and expenses generally result from providing services and producing and
delivering goods in connection with a proprietary fund’s principal ongoing operations. The
principal operating revenues of the City’s Enterprise Funds are charges to customers for sales
and services. Operating expenses for Enterprise Funds include the cost of sales and services,
administrative expenses, and depreciation on capital assets. All revenue and expenses not
meeting this definition are reported as nonoperating revenue and expenses.
When both restricted and unrestricted resources are available for use, it is the City’s policy to
use restricted resources first, then unrestricted resources as they are needed.
D.
Assets, Liabilities and Net Assets or Equity
Cash and Cash Equivalents
For purpose of presenting the proprietary fund cash flow statement, cash and cash
equivalents include cash demand and time deposits and investments with a maturity date
within three months of the date acquired by the City.
Investments
State statutes authorize the City 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 “A” or its equivalent; (5) certificates of deposit by state and national
banks domiciled in this state that are (a) guaranteed or insured by the Federal Deposit
Insurance Corporation, or its successor; or, (b) secured by obligations that are described by
(1) – (4); or, (6) fully collateralized direct repurchase agreements having a defined
termination date, secured by obligations described by (1) pledged with third-party selected or
approved by the City, and placed through a primary government securities dealer.
Investments maturing within one year of date of purchase are stated at cost or amortized cost,
all other investments are stated at fair value, which is based on quoted market prices.
(continued)
27
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D.Assets, Liabilities and Net Assets or Equity (Continued)
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. Any residual balances
outstanding between the governmental activities and business-type activities are reported in
the government-wide financial statements as “internal balances.”
Inventories
All inventories are valued at cost (first-in, first-out method). Inventories of governmental
funds are recorded as expenditures when consumed rather than when purchased.
Restricted Assets
Certain bond proceeds, 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.
Capital Assets
Capital assets, which include property, plant, equipment and infrastructure assets (e.g. roads,
bridges, sidewalks and similar items) are reported in the applicable governmental or
business-type activities columns in the government-wide financial statements. The City
defines capital assets as assets with an initial, individual cost of more than $1,000 and an
estimated useful life in excess of one year. Such assets are recorded at historical cost or
estimated historical cost if purchased or constructed. Donated capital assets are recorded at
estimated fair market value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or
materially extend assets’ lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed.
(continued)
28
I.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D.Assets, Liabilities and Net Assets or Equity (Continued)
Capital Assets (Continued)
Property, plant and equipment is depreciated using the straight-line method over the
following estimated useful lives:
AssetsYears
Airport improvements40
Buildings20 to 40
Waterworks and sanitation systems33 1/3
Infrastructure20
Machinery and equipment7 to 10
Compensated Absences
The City permits employees to accumulate earned but unused vacation pay benefits. Certain
employees previously covered by civil service policies also have carried forward unused sick
leave benefits. No liability is reported for unpaid accumulatedsick leave for the remaining
employees. Vacation pay is accrued when incurred in the applicable governmental activities,
business-type activities, or proprietary fund type statement of net assets. A liability for these
amounts is reported in governmental funds only if they have matured for example, as a result
of employee resignations and retirements.
Long-term Obligations
In the government-wide financial statements and proprietary fund types in the fund financial
statements, long-term debt and other long-termobligations are reported as liabilities in the
applicable governmental activities, business-type activities, or proprietary fund type
statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred
and amortized over the life of the bonds using the straight-line method, which approximates
the effect interest method. Bonds payable are reported net of the applicable bond premium or
discount. Bond issuance costs are reported as deferred charges and amortized over the term
of the related debt.
(continued)
29
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D.Assets, Liabilities and Net Assets or Equity (Continued)
Long-term Obligations (Continued)
In the fund financial statements, governmental fund types recognize bond premiums and
discounts, as well as issuance costs during the current period. The face amount of debt
issued is reported as other financing sources. Premiums received on debt issuances are
reported as other financing sources while discounts are reported as other financing uses.
Issuance costs, even if withheld from the actual net proceeds received, are reported as
expenditures.
Fund Equity
In the fund financial statements, governmental funds report reservations of fund balance for
amounts that are not available for appropriation or are legally restricted by outside parties for
use for a specific purpose. Designations of fund balance represent tentative management
plans that are subject to change.
Net Assets
Net assets represent the difference between assets and liabilities. Net assets invested in
capital assets, net of related debt consists of capital assets, net of accumulated depreciation,
reduced by the outstanding balances of any borrowing used for the acquisition, construction
or improvements of those assets, and adding back unspent proceeds. Net assets are reported
as restricted when there are limitations imposed on their use either through the enabling
legislations adopted by the City or through external restrictions imposed by creditors,
grantors or laws or regulations of other governments.
Estimates
The preparation of financial statements, in conformity with generally accepted accounting
principles, requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent liabilities at the date of the
financial statements and the reported amounts of revenue and expenses during the reporting
period. Actual amounts could differ from those estimates.
30
II.RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
Explanation of Certain Differences Between the Governmental Fund Balance Sheet and the
Government-wide Statement of Net Assets
The governmental fund balance sheet includes a reconciliation between fund balance – total
governmental funds andnet assets – governmental activities as reported in the government-wide
statement of net assets. One element of that reconciliation explains, “Long-term liabilities are
not due and payable in the current period and therefore are not reported in the funds.” The
details of this $2,218,596 difference are as follows:
General obligations$2,025,000
Accrued interestpayable12,606
180,990
Compensated absences
Net adjustment to reducefund balance - total
governmentalfundsto arrive at net assets -
$2,218,596
governmental activities
Explanation of Certain Differences Between the Governmental Fund Statement of Revenue,
Expenditures and Changes in Fund Balances and the Government-wide Statement of
Activities
The governmental fund statement of revenue, expenditures and changes in fund balances
includes a reconciliation between net changes in fund balances – total governmental fund and
changes in net assets of governmental activities as reported in the government-wide statement of
activities. One element of that reconciliation explains, “Governmental funds report capital
outlays as expenditures. However, in the statement of activities the cost of those assets is
allocated over their estimated useful lives and reported as depreciation expense.” The details of
this $98,476 difference are as follows:
$1,017,654
Capital outlay
(919,178)
Depreciation expense
Net adjustment to increase net changes in fund
balances - total governmental funds to arrive at
$98,476
changes in net assets of governmental activities
Another element of that reconciliation states, “The net effect of various miscellaneous
transactions involving capital assets (i.e., sales, trade-ins, and donations) is to increase net
assets.” The details of this $38,948 difference are as follows:
Inthestatementofactivities,onlythelossofcapitalassetsisreported.However,
inthegovernmentalfunds,theproceedsfromthesaleincreasefinancialresources.
Thus,thechangenetassetsdiffersfromthechangeinfundbalancebythecostof
$(65,226)
capital assets sold.
Donationsofcapitalassetsincreasenetassetsinthestatementofactivities,butdo
not appear in the governmental funds because they are not financial resources.
104,174
$38,948
(continued)
31
II.RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
(Continued)
Explanation of Certain Differences Between the Governmental Fund Statement of Revenue,
Expenditures and Changes in Fund Balances and the Government-wide Statement of
Activities (Continued)
Another element of that reconciliation states, “Revenues in the statement of activities that do not
provide current financial resources are not reported as revenues in the funds.” The details of this
$29,792 difference are as follows:
Property taxes$4,116
(33,908)
Ambulance charges for services
Net adjustment to decrease net changes in fund balances -
total governmental funds to arrive atchanges in net
$(29,792)
assets of governmental activities
Another element of that reconciliation states, “The issuance of long-term debt (e.g., bonds,
leases) provides current financial resources to governmental funds, while the repayment of the
principal of long-term debt consumes the current financial resources of governmental funds.
Neither transaction, however, has any effect on net assets. The details of this $420,000
difference are as follows:
$420,000
Principal repayments
Net adjustment to increase net changes in fund balances -
total governmental funds to arrive atchanges in net
$420,000
assets of governmental activities
Another element of that reconciliation states that “Some expenses reported in the statement of
activities do not require the useof current financial resources and therefore are not reported as
expenditures in governmental funds.” The details of this $16,526 difference are as follows:
Compensated absences$(18,955)
2,429
Accrued interest
Net adjustment to decrease net changes in fund balances -
total governmental funds to arrive atchanges in net
$(16,526)
assets of governmental activities
32
III. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A.
Budgets
Budgets are adopted on a basis consistent with generally accepted accounting principles.
Annual appropriated budgets are adopted for the General Fund, Special Revenue Funds, and
the Debt Service Fund. All annual appropriations lapse at the end of each fiscal year.
Budgets are adopted for the proprietary funds annually only as a management tool. There are
no legally mandated budgetary constraints for the proprietary funds.
In May of each year, budget preparation packages are distributed to all City agencies. The
agencies of the City submit requests for appropriation to the City Administrator before June
15 so that a budget may be prepared. The budget is prepared by department and includes
information on the past year, current year estimates and requested appropriations for the next
fiscal year. During August, the proposed budget is presented to the City Council for review.
The City Council holds one public hearing before August 31 and may add to, subtract from,
or change appropriations. Any changes in the budget must be within the revenue and
reserves estimated as available by the City Administrator or the revenue estimates must be
changed by an affirmative vote of a majority of the City Council.
The appropriated budget is prepared by fund, function and department. The City’s
management may make transfers of appropriations within a department. Transfers of
appropriations between departments require the approval of the City Council. The legal level
of budgetary control is the department level. The City Council made several supplementary
budget appropriations that were not material during the year.
Encumbrances represent commitments related to unperformed contracts for goods or
services. Encumbrance accounting under which purchase orders, contracts and other
commitments for the expenditure of resources are recorded to reserve that portion of the
applicable appropriation, is utilized in the governmental funds. Encumbrances lapse at year-
end and do not constitute expenditures or liabilities because the commitments must be
reappropriated and honored during the subsequent year.
(continued)
33
III.STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (Continued)
B.
Expenditures over Appropriations
Expenditures exceeded appropriations in the General Fund in various departments. The
following overruns were funded by unexpected revenues.
Current:
General government:
Financial administration and accounting$1,940
Public safety:
Fire and ambulance administration669
Police administration2,936
Animal control3
Culture and recreation:
Senior Citizens Center57
Capital outlay:
General government:
Municipal buildings5,778
Public safety
Police patrol6,714
Culture and recreation:
Park maintenance3,822
IV.DETAILED NOTES ON ALL FUNDS
A.Deposits and Investments
Substantially all deposits and investments are maintained in consolidated cash and
investment accounts. Interest income relating to consolidated deposits and investments is
allocated to the individual funds monthly based on each fund’s prorate share of total
consolidated cash, deposits and investments.
Legal provisions generally permitthe City to invest in certificates of deposit, repurchase
agreements, public funds investment pools, direct obligations of the United States of America
or its subdivisions and state and local governmentsecurities. During the year ended September
30, 2005, the City did not own anytypes of securities other than those permitted by statute.
(continued)
34
IV.DETAILED NOTES ON ALL FUNDS (Continued)
A.Deposits and Investments (Continued)
As of September 30, 2005, the City had the following investments:
Weighted Average
Investment TypeFair ValueMaturity(Days)
Tex Pool$6,038,35128
13,441,778
127
U. S. Treasuries
$19,480,129
Total fair value
Portfolio weighted average maturity(days)88
The City’s investment pool is 2a7-like pool. A 2a7-like pool is one which is not registered
with the Securities and Exchange Commission (“SEC”) as an investment company, but
nevertheless has a policy that it will, and does, operate in a manner consistent with the SEC’s
Rule 2a7 of the Investment Company Act of 1940.
Interest Rate Risk. In accordance with its investmentpolicy, the City manages its exposure
to declines in fair market values by limiting the weighted average maturity of its investment
portfolios to a maximum of 180 days.
Custodial Credit Risk. In the case of deposits, this is the risk that in the event of a bank
failure, the City’s deposits may not be returned to it. State statues require that all deposits in
financial institutions be fully collateralized by U. S. Government obligations or its agencies
and instrumentalities or direct obligations of Texas or its agencies and instrumentalities that
have a fair value of not less than the principal amount of deposits. As of September 30,
2005, $1,937,149 of the City’s $1,737,149 deposit balance was collateralized with securities
held by the pledging financial institution.The remaining balance, $200,000, was covered by
FDIC insurance.
Credit Risk.It is the City’s policy to limit its investments to investment types with an
investment quality rating not less than A or its equivalent by a nationally recognized
statistical rating organization.The City’s investment pool was rated AAAm and the U. S.
Treasuries were rated AAA by Standardand Poor’s Investors Service.
(continued)
35
IV.DETAILED NOTES ON ALL FUNDS (Continued)
B.
Receivables
Receivables as of year-end for the government’s individual major funds and nonmajor funds
in the aggregate, including the applicable allowances for uncollectible accounts, are as
follows:
Governmental FundsEnterprise Funds
CapitalNonmajorWater andNonmajor
GeneralProjectsFundsWastewaterFundsTotal
Receivables:
Accounts:
Customers$-$-$-$1,153,713$71,745$1,225,458
Ambulance555,111----555,111
Taxes:
Property118,512-23,267--141,779
Sales tax693,530----693,530
Intergovernmental44,753-1,623--46,376
Other7,394-45,5663,000-55,960
213,71- -4 - - 213,714
Special Assessment
Gross receivables1,419,300213,71470,4561,156,71371,7452,931,928
Less: allowance for
(510,95 -0) 11,93( 268,9)( -246) 79(1,135)
uncollectibles
$908,35 213,710$ 58,514$ 888,7$ 71,7467$ 2,1445$0,793
Net Total Receivables
Governmental funds report deferred revenue in connection with receivables for revenue that
is not considered to be available to liquidate liabilities of the current period. Governmental
funds also defer revenue recognition in connection with resources that have been received,
but not yet earned. At the end of the current fiscal year, the various components of deferred
revenue and unearned revenue reported in the governmental funds were as follows:
UnavailableUnearned
Delinquentproperty taxes receivable(general fund)$47,172$-
Delinquentproperty taxes receivable(debt service)10,021-
65,727 -
Ambulance charges for services (general fund)
$122,920 -$
Total Governmental Funds
(continued)
36
IV.DETAILED NOTES ON ALL FUNDS (Continued)
C.Property Tax Calendar
Property taxes assessed on property valuations as of January 1 each year are levied on the
subsequent October 1. Property taxes attach as an enforceable lien on property at the time
levied. Property taxes are considered due when levied and become delinquent on the
following February 1. On this date, penalties and interest may be assessed by the City.
D.Capital Assets
Capital asset activity for the year ended September 30, 2005, was as follows:
BeginningEnding
BalanceIncreasesDecreasesBalance
Governmental activities:
Capital assets, not being depreciated:
$1,738,556 93,329$ -$ 1,831,885$
Land
1,738,556 93,329 - 1,831,885
Total assets not being depreciated
Capital assets, being depreciated:
Buildings and improvements3,122,02769,001-3,191,028
Machinery and equipment3,981,799400,011148,6724,233,138
8,721,211 549,603 - 9,270,814
Infrastructure
15,825,037 1,018,615 148,672 16,694,980
Total capital assets being depreciated
Accumulated depreciation:
Buildings and improvements679,71868,1192,756745,081
Machinery and equipment2,736,590377,51486,9993,027,105
3,189,057 473,545 3,575 3,659,027
Infrastructure
6,605,365 919,178 93,330 7,431,213
Total accumulated depreciation
9,219,672 99,437 55,342 9,263,767
Total capital assets being depreciated, net
$10,958,228 192,766$ 55,342$ 11,095,652$
Governmental activities capital assets, net
BeginningEnding
BalanceIncreasesDecreasesBalance
Business-type activities:
Capital assets, not being depreciated:
Land$798,082$1,095$-$799,177
272,533 2,691,862 2,614,561 349,834
Construction in progress
1,070,615 2,692,957 2,614,561 1,149,011
Total assets not being depreciated
Capital assets, being depreciated:
Buildings and improvements4,621,200--4,621,200
Machinery and equipment1,623,23649,52848,0031,624,761
35,789,947 2,262,256 - 38,052,203
Water and wastewater system
42,034,383 2,311,784 48,003 44,298,164
Total capital assets being depreciated
Accumulated depreciation:
Buildings and improvements699,183117,649-816,832
Machinery and equipment1,186,27599,75377,7731,208,255
13,722,192 875,158 - 14,597,350
Water and wastewater system
15,607,650 1,092,560 77,773 16,622,437
Total accumulated depreciation
26,426,733 1,219,224 29,770)( 27,675,727
Total capital assets being depreciated, net
$27,497,348 3,912,181$ 2,584,791$ 28,824,738$
Business-type activities capital assets, net
(continued)
37
IV.DETAILED NOTES ON ALL FUNDS (Continued)
D.Capital Assets (Continued)
Depreciation expense was charged to functions/programs of the government as follows:
Governmental activities:
Generalgovernment$109,646
Public safety229,505
Community development53,384
Culture and recreation186,107
340,536
Streets
$919,178
Total depreciation expense - governmental activities
Business-type activities:
Water and wastewater$978,015
Landfill63,814
50,731
Airport
$1,092,560
Total depreciation expense - business-type activities
Interfund Receivables, Payables and Transfers
E.
The composition of interfund balances as of September 30, 2005, is as follows:
Receivable FundPayable FundAmount
Agency General$5,059
8,143,986
Water and WastewaterCapital projects
$8,149,045
Total
Balances resulted from the time lag between the dates that 1) interfund goods and services
are provided on reimbursable expenditures occur, and 2) transactions are recorded in the
accounting system, and 3) payments between funds are made.
Interfund transfers during the year ended September 30, 2005, are as follows:
Transfers InTransfers OutAmount
CapitalprojectsNonmajorgovernmental$90,000
50,000
Nonmajor enterpriseGeneral
$140,000
Total Interfund Transfers
(continued)
38
IV.DETAILED NOTES ON ALL FUNDS (Continued)
E.Interfund Receivables, Payables and Transfers (Continued)
Transfers in the amount of $90,000 are used to move receipts restricted to debt service from
the funds collecting the receipts to the Debt Service Fund as debt service payments become
due. A transfer in the amount of $50,000 was used to move unrestricted revenues collected
in the General Fund to finance the Airport Fund in accordance with budgetary authorization.
F.Long-term Debt
Changes in Long-term Liabilities
Long-term liability activity from the year ended September 30, 2005, was as follows:
BalanceBalanceDue Within
r
09/30/04AdditionsReductions09/30/05One Yea
Governmental activities:
General obligation bonds$2,445,000$-$420,000$2,025,000$430,000
162,035 191,042 172,087 180,990 36,198
Compensated absences payable
$2,607,035 191,042$ 592,087$ 2,205,990$ 466,198$
Total governmental activities
ype activities:
Business-t
Revenue bonds/certificates
gation$20,469,233$-$1,309,000$19,160,233$1,349,000
of obli
Less deferred loss on
gs(130,167)-(75,962)(54,205)(61,962)
refundin
Estimated landfill closure
postclosure costs156,11330,066-186,179-
and
22,806 20,668 21,816 21,658 6,322
Compensated absences payable
$20,517,985 50,734$ 1,254,854$ 19,313,865$ 1,293,360$
Total business-type activities
The General Fund is generally used to liquidate compensated absences for governmental
activities.
General Obligation Bonds
The City issues general obligation bonds to provide funds for the acquisition and
construction of major capital facilities of governmental activities and to refund previous
issues. General obligation bonded debt of the City is as follows:
Governmental Activities:
$2,000,000CombinationTaxandRevenueCertificatesof
Obligation-Series1996,principaldueannuallyinseriesthrough
2016,interestduesemi-annuallyat4.8%to6.8%,certificates
callable February 15, 2006.$1,080,000
$2,700,000GeneralObligationBonds-Series1997,principaldue
annuallyinseriesthrough2008,interestduesemi-annuallyat
4.43%.
945,000
$2,025,000
(continued)
39
IV.DETAILED NOTES ON ALL FUNDS (Continued)
F.Long-term Debt (Continued)
Revenue Bonds
The City also issues revenue bonds to finance business-type activities, where it pledges net
income from service revenue to repay debt.Revenue bonds outstanding, net of deferred loss
on refunding as of September 30, 2005, are as follows:
Business-type Activities:
$2,720,000UtilitySystemRevenueRefundingBonds-Series
1998,principaldueannuallyinseriesthrough2006,interestdue
semi-annually at 5.25%.$410,000
$5,500,000UtilitySystemRevenueBonds-Series2001,principal
dueannuallyinseriesthrough2016,interestduesemi-annuallyat
4.59%.5,500,000
$1,150,000CombinationTaxandRevenueCertificatesof
Obligation-Series2002,principaldueannuallyinseriesthrough
2012, interest due semi-annually at 4.45%.850,000
$1,600,000CombinationTaxRevenueCertificatesofObligation,
Series2003B,principaldueannuallyinseriesthrough2018,
interest due semi-annually at 3.5%.1,475,000
$4,975,000CombinationTaxRevenueRefundingBonds-Series
2003,principaldueannuallyinseriesthrough2013,interestdue
semi-annually at 2.75%.3,520,000
$275,000CombinationTaxandRevenueCertificatesofObligation,
Series2003A,principaldueannuallyinSeriesthrough2021,
interest due semi-annually at 4.125%.245,233
$7,160,000CombinationTaxRevenueBonds-Series2004,
principaldueannuallyinseriesthrough2019,interestduesemi-
annually at 4.45%.
7,160,000
$19,160,233
Total Revenue Bonds
(continued)
40
IV.DETAILED NOTES ON ALL FUNDS (Continued)
F.Long-term Debt (Continued)
Defeasance of Bonds
In prior years, the City defeased certain certificates of obligation bonds by placing the
proceeds of new bonds in an irrevocable trust to provide for all future debt service payments
on the old bonds. Accordingly, the trust account assets and liabilities for the defeased bonds
are not included in the City’s financial statements. On September 30, 2005, bonds
considered defeased and still outstanding were in the amount of $5,010,000.
Debt Service Requirements
Annual debt service requirements to maturity for general obligation bonds are as follows:
Fiscal Year Ending
September 30,PrincipalInterestTotal
2006$430,000$90,819$520,819
2007455,00070,106525,106
2008475,00048,195523,195
2009150,00032,845182,845
2010165,00024,182189,182
2011 - 2015310,00040,478350,478
40,000 1,125 41,125
2016
$2,025,000 307,750$ 2,332,750$
Total
Annual debt service requirements to maturity for revenue bonds are as follows:
Fiscal Year Ending
September 30,PrincipalInterestTotal
2006$1,349,000$716,323$2,065,323
20071,090,169666,2541,756,423
20081,130,801626,5011,757,302
20091,171,459585,2461,756,705
20101,217,145543,2631,760,408
2011 - 20156,777,0612,032,3388,809,399
584,3766,424,598 7,008,974
2016 - 2019
$ 5,754,30119,160,233$ 24,914,534$
Total
(continued)
41
IV. DETAILED NOTES ON ALL FUNDS (Continued)
G.
Contingent Arbitrage Liabilities
The City has invested a portion of revenue bond proceeds as a reserve for the retirement of
the bonds. Any excess of interest revenue earned on invested proceeds over interest paid on
the bonds must be rebated to the federal government every five years.
V. OTHER INFORMATION
A.Risk Management
The City is exposed to various risks of loss related to torts; theft of, damage to, and
destruction of assets; errors and omissions; injuries to employees; employee health benefits;
and other claims of various nature. The City participates in the Texas Municipal League
Intergovernmental Risk Pool. As an insured, the City is not obligated to reimburse the pool
for losses. The City has not had any significant reductions in insurance coverage, nor have
insurance settlements for the last three fiscal years exceeded insurance coverage. Any losses
reported, but unsettled or incurred and not reported, are believed to be insignificant to the
City’s financial statements.
B.Commitments and Contingencies
The City is defendant in lawsuits occurring in the normal course of business. Although the
outcome of these maters is not presently determinable, in the opinion of the City’s attorney,
their resolution will not have a material adverse effect on the financial condition of the City.
Amounts received or receivable from grantor agencies are subject to audit and adjustment by
such agencies. Any disallowed claims, including amounts already collected may constitute a
liability of the applicable funds. The amount, if any, of expenditures which may be
disallowed by the grantor cannot be determined at this time although the City expects such
amounts, if any, to be immaterial.
C.Municipal Solid Waste Landfill Closure and Post Closure Cost
The City has constructed a Type IV sanitary landfill, which began operations on December 1,
1995. This facility is permitted to accept only brush and/or construction demolition wastes
and rubbish free of household wastes.
(continued)
42
V. OTHER INFORMATION (Continued)
C.Municipal Solid Waste Landfill Closure and Post Closure Cost (Continued)
State and federal laws and regulations require the City to place a final cover on the landfill
site when it stops accepting waste and to perform certain maintenance and monitoring
functions at the site for a period of five years after closure. Although closure and post
closure care costs will be paid only near or after the date that the landfill stops accepting
waste, the City will report a portion of these closure and post closure costs as an operating
expense in each period based on landfill capacity used to date. Estimated closure and 5-year
post closure costs are approximately $186,179. The landfill site has an estimated net
capacity of 248,000 cubic yards and is expected to be closed within the next 10 years;
approximately 54% of the landfill was used at year-end. Actual costs may be higher due to
inflation, changes in technology, or changes in regulations.
The City has received written authorization from the state that no annual contributions are
required, thus the intent of the City is to fund the required expenses as incurred.
D.Retirement Plan
Plan Description
The City provides pension benefits for all of its full-time employees through a nontraditional,
joint contributory, hybrid defined benefit plan in the statewide Texas Municipal Retirement
System (TMRS), one of 794 administered by TMRS, an agent multiple-employer public
employee retirement system. All assumptions for the December 31, 2004, valuations are
contained in the 2004 TMRS Comprehensive Annual Financial Report, a copy of which may
be obtained by writing to P. O. Box 149153, Austin, Texas 78714-9153.
Benefits depend upon the sum of the employee’s contributions to the plan, with interest, and
the City-financed monetary credits, with interest. At the date the plan began, the City
granted monetary credits for service rendered before the plan began of a theoretical amount
equal to two times what would have been contributed by the employee, with interest, prior to
establishment of the plan. Monetary credits for service since the plan began are a percent
(100%) of the employee’s accumulated contributions. In addition, the City can grant as often
as annually another type of monetary credit referred to as an updated service credit which is a
theoretical amount which, when added to the employee’s accumulated contributions and the
monetary credits for service since the plan began, would be the total monetary credits and
employee contributions accumulated with interest if the current employee contribution rate
and City matching percent had always been in existence and if the employee’s salary had
always been the average of his salary in the last three 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.
(continued)
43
V. OTHER INFORMATION (Continued)
D.Retirement Plan (Continued)
Plan Description (Continued)
Members can retire at ages 60 and above with 5 or more years of service or with 20 years of
service regardless of age. A member is vested after 5 years. The plan provisions are adopted
by the governing body of the City, within the options available in the state statutes governing
TMRS and within the actuarial constraints also in the statutes.
Contributions
The contribution rate for the employees is 6%, and the City matching ratio is currently 2 to 1,
both as adopted by the governing body of the City. Under the state law governing TMRS,
the actuary annually determines the City contribution rate. 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 the City matching percent, which are the
obligation of the City as of an employee’s retirement date, not at the time the employee’s
contributions are made. The normal cost contribution rate is the actuarially determined
percent of payroll necessary to satisfy the obligation of the City to each employee at the time
his/her retirement becomes effective. The prior service contribution rate amortizes the
unfounded (overfunded) actuarial liability (asset) over the remainder of the plan’s 25-year
amortization period. The unit credit actuarial cost method is used for determining the City
contribution rate. Both the employees and the City make contributions monthly. Since the
City needs to know its contribution rate in advance to budget for it, there is a one-year delay
between the actuarial valuation that is the basis for the rate and the calendar year when the
rate goes into effect. (i.e. December 31, 2003, valuation is effective for rates beginning
January 2005).
(continued)
44
V. OTHERINFORMATION (Continued)
D.Retirement Plan (Continued)
Contributions (Continued)
Assumptions and Schedule of Actuarial Liabilities and Funding Progress
Actuarial Cost MethodUnit Credit
Amortization MethodLevel Percent of Payroll
Remaining Amortization25 Years - Open Period
Asset Valuation MethodAmortized Cost(GASB-25,paragraphs 36e and 138)
Investment Rate of Return7%
Projected Salary IncreasesNone
Includes Inflation a
t3.5%
Cost of Living AdjustmentsNone
Actuarial Valuation Date12/31/0412/31/0312/31/02
Actuarial Value of Assets$11,127,229$9,980,272$9,213,332
Actuarial Accrued Liabilities13,865,46712,451,10711,159,643
Percentage Funded80.3%80.2%82.6%
Unfunded(Overfunded) Actuarial
Accrued Liability(UAAL)2,738,2382,470,8351,946,311
Annual Covered Payroll4,334,7824,099,3563,975,028
UAAL as a Percentage of Covered Payroll63.2%60.3%49.0%
gation(NPO)
Net Pension Obli
at the Beginning of Period---
Annual Pension Cost:
Annual Required Contribution(ARC)524,487472,242462,989
Interest on NPO---
-- -
Adjustment to the ARC
524,487472,242462,989
Contributions Made(100%)524,487472,242462,989
- -
-
Increase in NPO
$ --$ -$
NPO at the End of Period
45
THIS PAGE LEFT BLANK INTENTIONALLY
COMBINING FUND
STATEMENTS AND SCHEDULES
THIS PAGE LEFT BLANK INTENTIONALLY
NONMAJOR GOVERNMENTAL FUNDS
Special Revenue Funds are used to account for specific revenue that is legally
restricted to expenditures for particular purposes.
Hotel/Motel Occupancy Tax – This fund is used to account for hotel/motel
occupancy tax revenue to be used for enhancing and promoting tourism and
convention activity for the benefit of the hotel industry.
Child Safety – This fund is used to account for court costs used to operate a
City school crossing guard program, or programs designated to enhance child
safety, health, or nutrition; including child abuse prevention and intervention
and drug and alcohol abuse prevention.
Public Safety – This fund is used to account for court costs used to promote
various public safety programs.
TheDebt Service Fund is used to account for the accumulation of resources and
payment of general obligation bond principal and interest from governmental
resources.
CITY OF STEPHENVILLE, TEXAS
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
SEPTEMBER 30, 2005
Special Revenue Funds
Total
Hotel/MotelNonmajor
OccupancyChildPublicDebtGovernmental
TaxSafetySafetyTotalServiceFunds
ASSETS
Cash and investments240,604$ 4,218$ 9,608$ 254,430$ 47,633$ 302,063$
Receivables (net of allowance
for uncollectibles)
Property taxes- - - - 11,328 11,328
Intergovernmental- - - - 1,623 1,623
45,566 - - 45,566 - 45,566
Occupancy taxes
$ 286,170 4,218$ 9,608$ 299,996$ 60,584$ 360,580$
Total assets
LIABILITIES
Accounts payable52,253$ -$ -$ 52,253$ -$ 52,253$
-- - - 10,021 10,021
Deferred revenue
52,253 - - 52,253 10,021 62,274
Total liabilities
FUND BALANCES
Reserved for debt service- - - - 50,563 50,563
233,917 4,218 9,608 247,743 - 247,743
Unreserved
233,917 4,218 9,608 247,743 50,563 298,306
Total fund balances
Total liabilities
$ 286,170 4,218$ 9,608$ 299,996$ 60,584$ 360,580$
and fund balances
46
CITY OF STEPHENVILLE, TEXAS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
Special Revenue Funds
Total
Hotel/MotelNonmajor
OccupancyChildPublicDebtGovernmental
TaxSafety SafetyTotalServiceFunds
REVENUES
Taxes:
Property-$ -$ -$ -$ 447,803$ 447,803$
Other260,100 - - 260,100 - 260,100
Fines and forfeitures- 2,035 - 2,035 - 2,035
Intergovernmental- - 3,763 3,763 - 3,763
6,602 - - 6,602 3,057 9,659
Investment earnings
2,035266,702 3,763 272,500 450,860 723,360
Total revenues
EXPENDITURES
Current:
General government229,528 - - 229,528 - 229,528
Public safety- 2,200 4,794 6,994 - 6,994
Debt service:
Principal - - - - 420,000 420,000
-- - - 111,582 111,582
Interest and fiscal charges
2,200229,528 4,794 236,522 531,582 768,104
Total expenditures
EXCESS (DEFICIENCY) OF
REVENUES OVER (UNDER)
37,174 165)( 1,031)( 35,978 80,722)( 44,744)(
EXPENDITURES
OTHER FINANCING
SOURCES
-- - - 90,000 90,000
Transfers in
Total other financing
-- - - 90,000 90,000
sources
NET CHANGE IN
165)37,174( 1,031)( 35,978 9,278 45,256
FUND BALANCES
FUND BALANCES,
4,383196,743 10,639 211,765 41,285 253,050
BEGINNING
$ 4,218233,917$ 9,608$ 247,743$ 50,563$ 298,306$
FUND BALANCES, ENDING
47
CITY OF STEPHENVILLE, TEXAS
SPECIAL REVENUE FUND
HOTEL/MOTEL OCCUPANCY TAX FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2005
Variance
FinalPositive
BudgetActual(Negative)
REVENUES
Taxes - other263,500$ 260,100$ 3,400$()
6,6022,000 4,602
Interest
266,702265,500 1,202
Total revenues
EXPENDITURES
Current:
General government:
229,528263,500 33,972
Administrative
229,528263,500 33,972
Total general government
229,528263,500 33,972
Total expenditures
37,1742,000 35,174
NET CHANGE IN FUND BALANCE
196,743196,743 -
FUND BALANCE, BEGINNING
$ 233,917198,743$ 35,174$
FUND BALANCE, ENDING
48
CITY OF STEPHENVILLE, TEXAS
SPECIAL REVENUE FUND
CHILD SAFETY FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2005
Variance
FinalPositive
BudgetActual(Negative)
REVENUES
$ 3,000 2,035$ 965)$(
Fines and forfeitures
3,000 2,035 965)(
Total revenues
EXPENDITURES
Current:
2,500 2,200 300
Public safety
2,500 2,200 300
Total public safety
2,500 2,200 300
Total expenditures
165)500( 665)(
NET CHANGE IN FUND BALANCE
4,383 4,383 -
FUND BALANCE, BEGINNING
$ 4,883 4,218$ 665)$(
FUND BALANCE, ENDING
49
CITY OF STEPHENVILLE, TEXAS
SPECIAL REVENUE FUND
PUBLIC SAFETY FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2005
Variance
FinalPositive
BudgetActual(Negative)
REVENUES
$ 3,700 3,763$ 63$
Intergovernmental
3,700 3,763 63
Total revenues
EXPENDITURES
Current:
8,850 4,794 4,056
Public safety
8,850 4,794 4,056
Total public safety
8,850 4,794 4,056
Total expenditures
( 1,031)5,150)( 4,119
NET CHANGE IN FUND BALANCE
10,639 10,639 -
FUND BALANCE, BEGINNING
$ 5,489 9,608$ 4,119$
FUND BALANCE, ENDING
50
CITY OF STEPHENVILLE, TEXAS
DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2005
Variance
FinalPositive
BudgetActual(Negative)
REVENUES
Taxes - property 445,582$ 447,803$ 2,221$
1,000 3,057 2,057
Investment earnings
446,582 450,860 4,278
Total revenues
EXPENDITURES
Debt service:
Principal420,000 420,000 -
111,582 111,582 -
Interest and fiscal charges
531,582 531,582 -
Total general government
531,582 531,582 -
Total expenditures
EXCESS(DEFICIENCY) OF REVENUES
(85,000) 80,722)( 4,278
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
90,000 90,000 -
Transfers in
90,000 90,000 -
Total other financing sources (uses)
9,2785,000 4,278
NET CHANGE IN FUND BALANCE
41,285 41,285 -
FUND BALANCE, BEGINNING
$ 46,285 50,563$ 4,278$
FUND BALANCE, ENDING
51
THIS PAGE LEFT BLANK INTENTIONALLY
NONMAJOR ENTERPRISE FUNDS
Enterprise Funds are used to account for operations that are financed and operated in
a manner similar to private business enterprises – where the intent is that the costs of
providing goods or services to the general public on a continuing basis be financed or
recovered primarily through user charges; or where the City has decided that periodic
determination of net income is appropriate for accountability purposes.
Sanitary Landfill – This fund is used to account for solid waste collection
and disposal services provided to the residents of the City.
Airport – This fund is used to account for municipal airport services and to
support air transportation and charter services.
Storm Water Drainage – This fund is used to account for revenues collected and
project costs for mitigating storm water drainage problems throughout the City.
CITY OF STEPHENVILLE, TEXAS
COMBINING BALANCE SHEET
NONMAJOR ENTERPRISE FUNDS
SEPTEMBER 30, 2005
SanitaryStorm Water
LandfillAirportDrainageTotal
ASSETS
Current assets:
Cash and investments426,721$ 46,744$ 1,205,778$ 1,679,243$
15,438 833 55,474 71,745
Accounts receivable (net of allowances for uncollectibles)
442,159 47,577 1,261,252 1,750,988
Total current assets
Noncurrent assets:
Capital assets:
Land40,000 594,361 1,095 635,456
Buildings and improvements375,109 1,924,161 - 2,299,270
Equipment461,639 115,131 - 576,770
Construction in progress- - 242,270 242,270
(290,954)(630,253) - 921,207)(
Less: accumulated depreciation
246,495 2,342,699 243,365 2,832,559
Total noncurrent assets
688,654 2,390,276 1,504,617 4,583,547
Total assets
LIABILITIES
Current liabilities:
Accounts payable112 458 - 570
Accrued liabilities2,250 60 - 2,310
Accrued interest payable- 3,438 - 3,438
Certificate of obligations- 9,000 - 9,000
1,991 - - 1,991
Compensated absences payable
4,353 12,956 - 17,309
Total current liabilities
Long-term liabilities:
Certificate of obligations- 236,233 - 236,233
186,179 - - 186,179
Liability for landfill closure
186,179 236,233 - 422,412
Total long-term liabilities
190,532 249,189 - 439,721
Total liabilities
NET ASSETS
Invested in capital assets, net of related debt246,495 2,106,466 243,365 2,596,326
251,627 34,621 1,261,252 1,547,500
Unrestricted
$498,122 2,141,087$ 1,504,617$ 4,143,826$
Total net assets
52
CITY OF STEPHENVILLE, TEXAS
COMBINING STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET ASSETS
NONMAJOR ENTERPRISE FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
SanitaryStorm Water
LandfillAirportDrainageTotal
OPERATING REVENUES
Gate charges174,845$ -$ -$ 174,845$
Hanger rental- 35,876 - 35,876
Storm water drainage fee- - 485,600 485,600
3,212- - 3,212
Other service charges
39,088174,845 485,600 699,533
Total operating revenues
OPERATING EXPENSES
Personnel services59,189 - - 59,189
Contractual services1,986 - - 1,986
Utilities499 17,899 - 18,398
Repairs and maintenance8,317 11,068 8,633 28,018
Other supplies and expenses32,541 8,867 - 41,408
63,814 50,731 - 114,545
Depreciation
88,565166,346 8,633 263,544
Total operating expenses
49,477)8,499( 476,967 435,989
OPERATING INCOME (LOSS)
NONOPERATING REVENUES (EXPENSES)
Investment earnings10,042 639 29,193 39,874
10,513)-( - 10,513)(
Interest expense
10,042 9,874)( 29,193 29,361
Total nonoperating revenues (expenses)
59,351)18,541( 506,160 465,350
INCOME(LOSS) BEFORE CONTRIBUTIONS
3,630- - 3,630
CAPITAL CONTRIBUTIONS
50,000- - 50,000
TRANSFER IN
5,721)18,541( 506,160 518,980
CHANGE IN NET ASSETS
2,146,808479,581 998,457 3,624,846
TOTAL NET ASSETS, BEGINNING
$ 2,141,087498,122$ 1,504,617$ 4,143,826$
TOTAL NET ASSETS, ENDING
53
CITY OF STEPHENVILLE, TEXAS
COMBINING STATEMENT OF CASH FLOWS
NONMAJOR ENTERPRISE FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
SanitaryStorm Water
LandfillAirportDrainageTotal
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers169,428$ 39,923$ 483,881$ 693,232$
Cash payments to employees56,906)( - - 56,906)(
(15,809) 37,786)( 8,633)( 62,228)(
Cash payments to suppliers for goods and services
96,713 2,137 475,248 574,098
Cash provided by operating activities
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Cash received from other funds- 50,000 - 50,000
-- 36,554)( 36,554)(
Cash paid to other funds
Cash provided (used) by noncapital
50,000- 36,554)( 13,446
financing activities
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Principal payments on bonds- 14,000)( - 14,000)(
Interest and fiscal charges on debt- 10,513)( - 10,513)(
Capital contributions- 3,630 - 3,630
(33,079) - 243,365)( 276,444)(
Acquisition and construction of capital assets
Cash used by capital and
(33,079) 20,883)( 243,365)( 297,327)(
related financing activities
CASH FLOWS FROM INVESTING ACTIVITIES
10,042 639 29,193 39,874
Interest received
10,042 639 29,193 39,874
Cash provided by investing activities
NET INCREASE IN CASH
31,89373,676 224,522 330,091
AND CASH EQUIVALENTS
353,045 14,851 981,256 1,349,152
CASH AND CASH EQUIVALENTS, BEGINNING
$ 426,721 46,744$ 1,205,778$ 1,679,243$
CASH AND CASH EQUIVALENTS, ENDING
(continued)
54
CITY OF STEPHENVILLE, TEXAS
COMBINING STATEMENT OF CASH FLOWS
NONMAJOR ENTERPRISE FUNDS
(Continued)
FOR THE YEAR ENDED SEPTEMBER 30, 2005
Storm Water
Sanitary
Drainage
LandfillAirportTotal
RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Operating income (loss)8,499$ 49,477)$( 476,967$ 435,989$
Adjustments to reconcile operating income (loss) to
net cash provided by operating activities:
Depreciation63,814 50,731 - 114,545
Change in assets and liabilities:
Decrease (increase) in accounts receivable5,424)( 835 1,719)( 6,308)(
Increase (decrease) in accounts payable2,525)( 48 - 2,477)(
Increase (decrease) in accrued liabilities1,145 - - 1,145
Increase (decrease) in compensated absences1,138 - - 1,138
30,066 - - 30,066
Increase (decrease) in liability for landfill closure
88,214 51,614 1,719)( 138,109
Total adjustments
$ 96,713 2,137$ 475,248$ 574,098$
Net cash provided by operating activities
55
THIS PAGE LEFT BLANK INTENTIONALLY
FIDUCIARY FUNDS
Agency funds are used to account for assets held by the City as an agent for
individuals, private organizations, other governments and/or other funds.
Senior Citizens – This fund is used to account for assets held for the benefit of
a citizens’ group.
CITY OF STEPHENVILLE, TEXAS
COMBINING STATEMENT OF CHANGES
IN ASSETS AND LIABILITIES
ALL AGENCY FUNDS
YEAR ENDED SEPTEMBER 30, 2005
BalanceBalance
October 1,September 30,
2004AdditionsDeductions2005
SENIOR CITIZENS
Assets
$ -5,059$ -$ 5,059$
Due from other funds
$ -5,059$ -$ 5,059$
Total assets
Liabilities
$ -5,059$ -$ 5,059$
Due to others
$ -5,059$ -$ 5,059$
Total liabilities
56
STATISTICAL SECTION
THIS PAGE LEFT BLANK INTENTIONALLY
TABLE 1
CITY OF STEPHENVILLE, TEXAS
GOVERNMENT-WIDE EXPENSES BY FUNCTION
LAST TEN FISCAL YEARS *
(UNAUDITED)
Interest onWaterStorm
FiscalGeneralPublicCulture andCommunityLong-termandSanitaryWater
YearGovernmentSafetyStreetsRecreationDevelopmentDebtWastewaterLandfillAirportDrainageTotal
20031,262,164$ 4,028,747$ 894,193$ 1,522,896$ 317,743$ 153,445$ 3,790,830$ 211,159$ 99,847$ 14,034$ 12,281,024$
20041,421,563 4,092,087 995,046 1,508,347 296,244 130,388 4,582,690 151,309 101,082 35,462 13,278,756
20051,453,986 4,345,846 979,051 1,582,864 348,177 109,153 4,367,671 166,346 99,078 8,633 13,452,172
* The City implemented GASB 34 in fiscal year 2003, thus only three years of data are available.
57
TABLE 2
CITY OF STEPHENVILLE, TEXAS
GOVERNMENT-WIDE REVENUES
LAST TEN FISCAL YEARS *
(UNAUDITED)
ChargesOperatingCapital
Fiscalfor Grants andGrants andInvestment
YearServicesContributionsContributionsTaxesEarningsMiscellaneousTotal
20036,120,578$ 146,257$ 458,726$ 6,901,449$ 302,512$ 43,108$ 13,972,630$
20046,309,416 189,805 777,952 7,799,992 188,763 38,587 15,304,515
20056,922,328 125,068 2,069,445 8,107,250 591,860 54,068 17,870,019
* The City implemented GASB 34 in fiscal year 2003, thus only three years of data are available.
58
TABLE 3
CITY OF STEPHENVILLE, TEXAS
GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION (1)
LAST TEN FISCAL YEARS
(UNAUDITED)
FiscalGeneralPublic Culture -CommunityCapitalDebt
YearGovernmentSafetyStreetsRecreationDevelopmentOutlayServiceTotal
1996770,262$ 2,500,615$ 463,072$ 821,554$ 189,657$ 389,253$ 167,390$ 5,301,803$
1997803,012 2,666,287 509,448 910,317 175,319 971,287 376,553 6,412,223
1998842,761 2,954,391 500,218 957,735 178,310 628,926 362,196 6,424,537
1999938,789 2,885,336 513,046 973,529 188,246 641,906 750,287 6,891,139
2000947,835 3,146,946 562,728 1,081,294 182,517 619,263 654,674 7,195,257
2001942,036 3,325,599 588,038 1,243,096 236,431 386,919 630,415 7,352,534
20021,091,746 3,603,448 620,714 1,294,316 250,776 626,047 628,813 8,115,860
20031,113,323 3,821,859 561,646 1,357,624 317,746 366,753 627,032 8,165,983
20041,274,807 3,808,769 630,057 1,402,659 295,036 633,441 661,419 8,706,188
20051,231,709 4,140,738 578,126 1,412,305 346,969 942,403 531,582 9,183,832
Notes:
(1)Includes General, Special Revenue and Debt Service Funds.
59
TABLE 4
CITY OF STEPHENVILLE, TEXAS
GENERAL GOVERNMENTAL REVENUE BY SOURCE (1)
LAST TEN FISCAL YEARS
(UNAUDITED)
LicensesCharges
FiscalandforFines and
YearTaxesPermitsIntergovernmentalServicesForfeituresInterestMiscellaneousTotal
19964,983,477$ 72,759$ 173,742$ 490,116$ 153,453$ 294,460$ 41,248$ 6,209,255$
19975,375,901 85,776 192,539 596,914 246,898 363,353 36,213 6,897,594
19985,648,855 59,393 251,491 494,564 247,631 363,367 35,678 7,100,979
19996,158,011 78,228 231,738 349,452 174,225 361,545 38,287 7,391,486
20006,418,350 88,671 227,583 367,715 169,085 330,295 29,767 7,631,466
20016,689,180 64,408 207,050 408,757 168,271 406,277 68,242 8,012,185
20027,067,904 86,583 242,187 523,825 135,897 275,793 117,120 8,449,309
20036,891,072 84,669 249,564 545,763 248,426 194,772 125,027 8,339,293
20047,613,234 168,519 306,510 537,503 229,922 87,991 52,734 8,996,413
20058,103,134 168,523 57,266 651,021 207,407 246,243 108,222 9,541,816
Notes:
(1) Includes General, Special Revenue and Debt Service Funds.
60
TABLE 4A
CITY OF STEPHENVILLE, TEXAS
GENERAL GOVERNMENTAL TAX REVENUE BY SOURCE
LAST TEN FISCAL YEARS
(UNAUDITED)
Fiscal
YearPropertySalesFranchiseMotelMixed DrinkTotal
19961,573,062$ 2,411,005$ 846,535$ 129,081$ 23,794$ 4,983,477$
19971,745,484 2,635,583 847,273 131,685 15,876 5,375,901
19981,818,600 2,789,393 886,742 132,009 22,111 5,648,855
19992,204,331 2,806,108 938,209 187,185 22,178 6,158,011
20002,215,583 2,930,593 1,056,405 192,778 22,991 6,418,350
20012,244,831 3,109,190 1,112,285 199,252 23,622 6,689,180
20022,371,576 3,175,517 1,305,036 188,622 27,153 7,067,904
20032,529,903 3,217,670 1,101,713 182,127 26,407 7,057,820
20042,795,207 3,538,100 1,017,370 233,238 29,229 7,613,144
20052,892,157 3,621,885 1,264,298 292,447 32,347 8,103,134
61
TABLE 5
CITY OF STEPHENVILLE, TEXAS
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
(UNAUDITED)
PercentRatio ofPercent of
of CurrentDelinquentTotal TaxAdjustmentsOutstandingDelinquent
FiscalTotalCurrent TaxTaxesTaxTotal TaxCollectionto RollDelinquentTaxes to
YearTax LevyCollectionsCollectedCollectionsCollectionsto Tax Levyand OtherTaxesTax Levy
19961,570,390$ 1,533,037$ 97.62% 26,472$ 1,559,509$ 99.31% 7,140)$( 139,843$ 8.90%
19971,731,091 1,691,620 97.72% 22,760 1,714,380 99.03% 18,851)( 137,703 7.95%
19981,824,677 1,786,443 97.90% 28,665 1,815,108 99.48% 10,065)( 137,207 7.52%
19992,181,037 2,133,063 97.80% 40,029 2,173,092 99.64% 17,448)( 127,704 5.86%
20002,185,007 2,143,729 98.11% 44,706 2,188,435 100.16% 3,719)( 120,557 5.52%
20012,236,217 2,192,628 98.05% 32,162 2,224,790 99.49% 6,255)( 125,729 5.62%
20022,348,927 2,294,810 97.70% 44,918 2,339,728 99.61% 11,671)( 123,256 5.25%
20032,513,625 2,462,155 97.95% 46,558 2,508,713 99.80% 13,149 141,442 5.63%
20042,788,419 2,726,244 97.77% 62,175 2,788,419 100.00% 19,166)( 141,725 5.08%
20052,832,529 2,808,747 99.16% 52,752 2,861,499 101.02% 30,658 141,779 5.01%
62
CITY OF STEPHENVILLE, TEXAS
ASSESSED AND ESTIMATED ACTUAL VALUE OF PROPERTY (1)
LAST TEN FISCAL YEARS
(UNAUDITED)
Real PropertyPersonal Property
FiscalAssessedEstimatedAssessedEstimated
YearValueActual ValueValueActual Value
1996333,790,059$ 385,748,682$ 70,342,195$ 107,376,264$
1997346,266,305 414,014,326 75,304,382 112,338,451
1998319,628,417 434,746,722 123,803,628 190,384,541
1999317,046,999 433,343,757 164,773,088 218,318,847
2000327,826,916 438,651,314 155,631,203 219,245,906
2001347,108,409 459,021,122 145,616,370 207,455,895
2002356,633,782 483,460,062 151,363,633 195,351,535
2003387,901,914 548,902,350 149,617,585 191,012,036
2004432,195,022 599,957,900 162,277,253 207,075,170
2005465,836,512 648,904,856 150,345,717 196,537,422
Note:
(1)The tax roll will be dated the prior year.
63
TABLE 6
Ratio of
Total
Assessed
ExemptionsTotalTotalto Total
RealAssessedEstimatedEstimated
PropertyValueActual ValueActual Value
$ 381,347,02722,785,227$ 493,124,946$ 77.33%
402,594,34018,976,347 526,352,777 76.49%
421,280,61322,151,432 625,131,263 67.39%
460,710,97521,109,112 651,662,604 70.70%
462,533,20520,924,914 657,897,220 70.30%
473,373,46019,351,319 666,477,017 71.03%
489,359,70818,637,707 678,811,597 72.09%
518,434,19419,085,305 739,914,386 70.07%
559,676,81634,795,459 807,033,070 69.35%
592,209,89523,972,334 845,442,278 70.05%
64
TABLE 7
CITY OF STEPHENVILLE, TEXAS
PROPERTY TAX RATES--DIRECT AND OVERLAPPING GOVERNMENTS
(PER $1,000 OF ASSESSED VALUE) (1)
LAST TEN FISCAL YEARS
(UNAUDITED)
City of StephenvilleStephenville
Stephenville
FiscalGeneralDebt ServiceSchoolMiddle TrinityErath
YearFundFundTotalDistrictWater DistrictCountyTotal
1996$0.3867$0.0251$0.4118$1.1711N/A$0.4861$2.0690
19970.36430.07500.43931.2000N/A0.50002.1393
19980.36430.06700.43131.2000N/A0.47852.1098
19990.33770.13470.47241.3000N/A0.47852.2509
20000.33590.13650.47241.4500N/A0.47852.4009
20010.35520.11720.47241.7500N/A0.47852.7009
20020.36780.11220.48001.6900N/A0.47852.6485
20030.38120.10380.48501.69000.0150.47002.6600
20040.39130.09370.48501.67000.0150.45122.6212
20050.41070.07430.48501.66000.0150.44102.6010
Note:
(1)The tax roll will be dated the prior year.
65
TABLE 8
CITY OF STEPHENVILLE, TEXAS
PRINCIPAL TAXPAYERS
SEPTEMBER 30, 2005
(UNAUDITED)
Percentage
2004of Total
AssessedAssessed
Name Type of BusinessValuationValuation
FMC CompanyFluid Control Valve Manufacturer18,612,526$ 3.14%
Saint GobainManufacturing - Abrasives14,263,137 2.41%
Wal-Mart Stores, Inc. #1Retail Sales8,895,160 1.50%
Bosque River AssociationShopping Center8,800,000 1.49%
Wilmington Trust (Wal-Mart #2)Retail Sales6,682,150 1.13%
United Telephone CompanyTelecommunications Utility6,563,080 1.11%
Oncor Electric Delivery CompanyElectric Utility6,538,760 1.10%
Emerson Electric CompanyManufacturing Electric Boxes4,844,354 0.82%
RaylocManufacturing - Rebuilt Auto Parts4,561,523 0.77%
3,673,600 0.62%
Bruner MotorsAuto Sales and Service
Subtotal83,434,290 14.09%
508,775,605 85.91%
Remaining Roll
$ 592,209,895 100.00%
Total Roll
Source: State Property Tax Board Report
66
TABLE 9
CITY OF STEPHENVILLE, TEXAS
COMPUTATION OF LEGAL DEBT MARGIN
SEPTEMBER 30, 2005
(UNAUDITED)
As a home rule City, the City of Stephenville is not limited by law in the amount of debt it may issue.
The City’s charter (Article 9, Section 2 and 10) states:
All real and personal property within the City not expressly exempted by law shall be
subject to annual taxation, but never to exceed its true market value. Each person,
partnership and corporation owning property within the City limits of the City of
Stephenville, shall between the first day of January and the thirtieth day of April of each
year, hand to the City Assessor-Collector a full and complete sworn inventory of the
property possessed or controlled by him or her, or them, within said limits on the first day
of January of the current year. In all cases of failure to obtain a statement of real and
personal property for any cause, the Assessor-Collector shall ascertain the amount and
value of such property and assess the same, and such assessment shall be valid and
binding as if such property had been rendered by the owner thereof.
The City Council shall have the power and is hereby authorized to levy, assess, and
collect such taxes as may be authorized by the constitution and laws of the State of
Texas.
Article 11, Section 5 of the Texas Constitution states in part:
“but no tax for any purpose shall ever be lawful for any one year, which shall exceed two
and one-half percent of the taxable property of such city.”
The present tax rate is $.485 per $100 of assessed valuation with assessed valuation being 100% of
appraised valuation except for exemptions granted for veterans, owners over 65 years old, agricultural
use of land, Freeport and frozen property values and/or tax rates.
67
TABLE 10
CITY OF STEPHENVILLE, TEXAS
RATIO OF NET GENERAL OBLIGATION BONDED DEBT TO ASSESSED
VALUE AND NET GENERAL OBLIGATION BONDED DEBT PER CAPITA
LAST TEN FISCAL YEARS
(UNAUDITED)
Ratio of
DebtDebtNet BondedNet
ServicePayable fromNetDebt toBonded
FiscalEstimatedAssessed (2)Gross (3)FundEnterpriseBondedAssessedDebt Per
YearPopulation (1)Value (000's)Bonded DebtBalanceRevenueDebtValueCapita
199613,750 381,347,027$ 16,490,000$ 6,837$ 13,855,000$ 2,635,000$ 0.0069191.64$
199714,300 393,228,768 15,475,000 3,304 12,950,000 2,525,000 0.0064176.57
199814,600 421,280,613 17,045,000 - 11,975,000 5,070,000 0.0120347.26
199914,650 460,710,975 15,670,000 1,077 10,965,000 4,705,000 0.0102321.16
200014,921 462,533,205 14,215,000 12,873 9,920,000 4,295,000 0.0093287.85
200114,956 473,373,460 18,320,000 24,139 14,455,000 3,865,000 0.0082258.42
200215,097 489,359,708 18,020,000 30,336 14,605,000 3,415,000 0.0070226.20
200315,665 518,434,194 17,510,000 41,082 14,565,000 2,945,000 0.0057188.00
200415,884 559,676,816 22,922,000 41,285 20,477,000 2,445,000 0.0044153.93
200516,300 592,209,895 21,198,000 50,563 19,160,233 2,025,000 0.0034124.23
Notes:
(1) Source: North Central Texas Council of Governments
(2) From Table 4
(3) Includes all long-term general obligation debt and revenue bonds before bond discount.
68
TABLE 11
CITY OF STEPHENVILLE, TEXAS
RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL OBLIGATION
BONDED DEBT TO TOTAL GENERAL GOVERNMENTAL EXPENDITURES
LAST TEN FISCAL YEARS
(UNAUDITED)
Ratio of Debt
TotalTotalService to
FiscalDebtGeneralTotal General
YearPrincipalInterestServiceExpenditures (1)Expenditures
199685,000$ 36,826$ 121,826$ 5,596,323$ 2.18%
1997110,000 195,496 305,496 6,412,223 4.76%
1998155,000 136,239 291,239 6,424,537 4.53%
1999365,000 256,184 621,184 6,891,139 9.01%
2000410,000 221,383 631,383 7,195,257 8.77%
2001430,000 199,630 629,630 7,352,534 8.56%
2002450,000 177,828 627,828 7,285,037 8.62%
2003470,000 155,950 625,950 7,278,122 8.60%
2004429,000 129,272 558,272 7,591,669 7.35%
2005430,000 90,819 520,819 9,435,831 5.52%
Notes:
Includes General Fund, Special Revenue Funds and Debt Service Funds.
(1)
69
TABLE 12
CITY OF STEPHENVILLE, TEXAS
COMPUTATION OF DIRECT AND OVERLAPPING BONDED DEBT
GENERAL OBLIGATION BONDS
SEPTEMBER 30, 2005
(UNAUDITED)
Net General
ObligationPercentageAmount
Bonded DebtApplicable toApplicable to
JurisdictionOutstandingStephenvilleStephenville
Direct:
City of Stephenville2,025,000$ 100.00% 2,025,000$
Indirect:
Stephenville ISD15,490,968 79.97% 12,388,127
Middle Trinity Water District- 41.72% -
-
Erath County- 42.88%
12,388,127
Total Indirect
$ 14,413,127
Total Direct and Overlapping Bonded Debt
70
TABLE 13
CITY OF STEPHENVILLE, TEXAS
REVENUE BOND COVERAGE
WATER AND WASTEWATER BONDS
LAST TEN FISCAL YEARS
(UNAUDITED)
Net Revenue
DirectAvailable
Debt Service Requirements
FiscalGrossOperatingfor Debt
YearRevenue (1)Expenses (2)ServicePrincipalInterestTotalCoverage (3)
19964,155,884$ 1,737,759$ 2,418,125$ 890,000$ 752,749$ 1,642,749$ 1.47
19974,101,306 1,762,495 2,338,811 905,000 710,648 1,615,648 1.45
19984,422,142 1,921,867 2,500,275 995,000 668,930 1,663,930 1.50
19994,285,128 1,882,313 2,402,815 1,010,000 543,862 1,553,862 1.55
20004,664,232 3,906,752 757,480 1,045,000 500,290 1,545,290 0.49
20014,743,061 2,621,741 2,121,320 965,000 465,568 1,430,568 1.48
20024,578,747 2,459,300 2,119,447 1,000,000 641,944 1,641,944 1.29
20034,372,612 2,321,847 2,050,765 1,145,000 642,281 1,787,281 1.15
20044,556,045 2,569,643 1,986,402 1,240,000 559,001 1,799,001 1.10
20055,511,586 2,553,909 2,957,677 1,331,000 712,056 2,043,056 1.44
Notes:
(1)Includes operating revenue and nonoperating revenue.
(2)Includesoperatingexpensesexclusiveofdepreciation,nonoperatingexpensesexclusiveof
interest and amortization, and operating transfers out.
(3)In 2000, operating expenses include a one-time expenditure for a 50-year long-term water study.
71
TABLE 14
CITY OF STEPHENVILLE, TEXAS
DEMOGRAPHIC STATISTICS
LAST TEN FISCAL YEARS
(UNAUDITED)
FiscalSchoolCollegeUnemployment
YearPopulation (1)Enrollment (2)Enrollment (3)Rate (4)
199613,7503,3766,3692.70%
199714,3003,4266,3813.10%
199814,6003,3276,3333.10%
199914,6503,4196,1632.90%
200014,7003,3616,3592.70%
200114,9213,4776,5492.00%
200215,0003,4446,8273.30%
200315,6653,5307,1973.20%
200415,8843,4177,3472.70%
200516,3003,5127,5893.50%
Source:
(1)North Central Texas Council of Governments
(2)Stephenville Independent School District
(3)Tarleton State University
(4)Texas Workforce Commission (Erath County)
72
CITY OF STEPHENVILLE, TEXAS
PROPERTY VALUE, CONSTRUCTION, AND BANK DEPOSITS
LAST TEN FISCAL YEARS
(UNAUDITED)
CommercialResidential
Construction (1)Construction (1)
FiscalNumberNumberBank
Yearof PermitsValue (2)of PermitsValue (2)TotalDeposits (3)
1996731,967,720$ 3102,231,000$ 4,198,720$ 265,751$
1997924,965,555 2302,452,169 7,417,724 288,495
19987511,733,595 2501,525,500 13,259,095 299,560
1999131 8,034,851 1072,258,760 10,293,611 312,079
2000147 12,473,479 952,248,510 14,721,989 311,674
2001175 3,655,880 901,907,286 5,563,166 339,521
2002124 6,081,277 1106,037,139 12,118,416 343,222
20031102,072,422 1128,394,978 10,467,400 355,656
20045116,310,392 895,204,981 21,515,373 399,269
20056611,836,566 1066,605,768 18,442,334 531,642
*Estimated actual value
NOTES:
(1)Source: City issued building permits.
(2)Estimated actual value.
(3)Source: Local banks (in thousands).
(4)Source: County central appraisal district.
73
TABLE 15
Property Value (4)
CommercialResidentialExemptionsTotal
$ 213,548,411190,583,843$ 18,377,461$ 385,754,793$
220,285,032196,260,795 18,976,347 397,569,480
234,831,848278,998,515 88,607,478 425,222,885
250,932,656291,593,971 88,941,921 453,584,706
257,873,077294,311,186 88,620,644 463,563,619
256,628,452304,496,555 81,497,173 479,627,834
259,098,052298,234,985 69,458,161 487,874,876
280,588,120313,510,286 75,690,552 518,407,854
305,832,872357,358,565 88,259,744 574,931,693
322,026,233359,124,080 88,940,418 592,209,895
74
TABLE 16
CITY OF STEPHENVILLE, TEXAS
MISCELLANEOUS STATISTICS
SEPTEMBER 30, 2005
(UNAUDITED)
Date of IncorporationAugust 6,1889 Sewerage System:
Miles of sanitary sewers105
Form of GovernmentHome rule Number of treatment plants1
Number of service connections5,256
Number of Employees (excluding police and fire): Daily average treatment in gallons1,437,000
Full time58 Maximum daily capacity of plant in gallons9,000,000
Area in square miles10.26
City of Stephenville Facilities and Services:Water System:
Miles of streets92 Miles of water mains117
Number of street lights1,013 Number of service connections5,521
Number of fire hydrants670
Culture and Recreation: Daily average consumption in gallons1,971,990
Recreation center1 Maximum daily capacity of plant in gallons6,000,000
Parks2
Park acreage130
Swimming pools1 Facilities Not Included in the Reporting Entity:
Tennis courts4 Education:
Amphitheater1 Number of elementary schools4
Number of elementary school instructors118
Fire Protection: Number of secondary schools2
Number of stations2 Number of secondary school instructors112
Number of fire personnel and officers26 Number of universities1
Number of volunteer fire personnel13 Number of university faculty441
Number of fire calls answered238
Number of ambulance calls answered1,130
Number of inspections conducted132 Hospitals:
Number of hospitals1
Police Protection: Number of patient beds98
Number of stations1
Number of police personnel and officers41
Number of patrol units10
Number of law violations:
Physical arrests825
Traffic violations5,350
Parking violations324
Criminal offenses2,595
75
TABLE 17
CITY OF STEPHENVILLE, TEXAS
SCHEDULE OF INSURANCE IN FORCE
SEPTEMBER 30, 2005
(UNAUDITED)
Description of CoverageInsurerDate ExpiresLiability Limits
Package of general liabilityTexas Municipal League10/01/06$2,000,000-
Joint Self-InsuranceAnnual Aggregate
$1,000,000-Per Occurrence
Comprehensive LawTexas Municipal League10/01/06$2,000,000-
Enforcement LiabilityJoint Self-InsuranceAnnual Aggregate
$1,000,000-Per Occurrence
Public Official & EmployeesTexas Municipal League10/01/06$2,000,000-
Legal LiabilityJoint Self-InsuranceAnnual Aggregate
$1,000,000-Per Occurrence
Automotive LiabilityTexas Municipal League10/01/06$1,000,000 Per Occurence-$25,000
Auto Medical PaymentJoint Self-Insurance each person
Auto Physical Damage$1,071,613; Per Schedule
Real and Personal PropertyTexas Municipal League10/01/06$21,182,707-Blanket limit; valuation
Joint Self-Insurance method-replacement cost
Mobile EquipmentTexas Municipal League10/01/06$1,404,998-Blanket Actual Value
Joint Self-Insurance Replacement
Employee BondWestern Surety Company12/01/06$100,000 Per Occurrence
Group Health InsuranceBlue Cross/Blue Shield05/01/06$2,000,000 Major Medical (Managed
Health Care PPO and Rx Plan)
Supplemental Death BenefitTexas Municipal 12/31/06Annual Salary up to $100,000
Life InsuranceRetirement System
Workers' CompensationTexas Municipal League10/01/06Paid on $4,939,755 Estimated Payroll
InsuranceJoint Self-Insurance
76
TABLE 18
CITY OF STEPHENVILLE, TEXAS
PENSION TREND DATA-TEXAS MUNICIPAL RETIREMENT SYSTEM
LAST TEN FISCAL YEARS
(UNAUDITED)
Unfunded Pension
Benefit Obligation
Net AssetsPensionUnfundedAnnual
as a Percentage
FiscalAvailableBenefitPercentagePension BenefitCovered
of Covered Payroll
Yearfor BenefitsObligationFundedObligationPayroll
19964,369,005$ 5,689,224$ 76.79% 1,320,219$ 2,934,892$ 44.98%
19975,032,238 6,272,439 80.23% 1,240,201 3,011,851 41.18%
19985,885,559 7,250,728 81.17% 1,365,169 3,147,430 43.37%
19996,744,118 8,002,824 84.27% 1,258,706 3,149,031 39.97%
20007,456,256 9,219,696 80.87% 1,763,440 3,364,405 52.41%
20018,032,507 9,882,559 81.28% 1,850,052 3,467,070 53.36%
20028,674,092 10,376,404 83.59% 1,702,312 3,688,866 46.15%
20039,213,332 11,159,643 82.56% 1,946,311 3,975,028 48.96%
20049,980,272 12,451,107 80.16% 2,470,835 4,099,356 60.27%
200511,127,229 13,865,467 80.25% 2,738,238 4,334,782 63.17%
77