Item 4FM E M O R A N D U M
March 27, 2012
To:
Shana Yelverton, City Manager
From:
Sharen Jackson, Director of Finance
Subject:
Approval of the 2011 Comprehensive Annual Financial Report
Action
Requested:
Approval of September 30, 2011 Comprehensive Annual
Financial Report.
Background
Information:
City Charter requires the City at the close of each fiscal year
have an independent audit performed by a Certified Public
Accountant. Weaver and Tidwell L.L.P., Certified Public
Accountants, performed the audit for fiscal year 2011.
Shawn Parker, Partner, will present the report to the audit
committee on Tuesday during the committee meeting
scheduled at 5:00 prior to the city council meeting.
Financial
Considerations:
None required
Strategic Link:
F4 Establish and maintain effective internal controls
Citizen Input/
Board Review:
None required
Legal Review:
None required
Alternatives:
None required
Supporting
Documents:
2011 CAFR
Staff Recommendation:
Approval of 2011 Comprehensive Annual Financial
Report
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CITY OF SOUTHLAKE, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011
As Prepared By
Sharen Jackson, CPA
Director of Finance
I
CITY OF SOUTHLAKE,TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2011
TABLE OF CONTENTS
Exhibit Page
I. INTRODUCTORY SECTION
Letter of Transmittal i
Certificate of Achievement viii
Organizational Chart ix
List of Principal Officials x
II. FINANCIAL SECTION
Independent Auditor's Report 1
A. MANAGEMENT'S DISCUSSION AND ANALYSIS 3
B. BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements
Statement of Net Assets 1 15
Statement of Activities 2 16
Fund Financial Statements
Governmental Fund Financial Statements
Balance Sheet 3 17
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Assets 4 19
Statement of Revenues, Expenditures, and Changes in Fund Balance 5 20
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures
and Changes in Fund Balance to the Statement of Activities 6 22
Proprietary Fund Financial Statements
Statement of Net Assets 7 23
Statement of Revenues, Expenses, and Changes in Net Assets 8 24
Statement of Cash Flows 9 25
Fiduciary Fund Financial Statement
Statement of Fiduciary Net Assets 10 26
Notes to the Basic Financial Statements 27
CITY OF SOUTHLAKE,TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2011
TABLE OF CONTENTS
Exhibit Page
C. REQUIRED SUPPLEMENTARY INFORMATION
Budgetary Comparison Schedule-General Fund A-1 54
Budgetary Comparison Schedule-Crime Control District Special Revenue Fund A-2 55
Budgetary Comparison Schedule-Tax Increment Financing District Special
Revenue Fund A-3 56
Notes to Required Supplementary Information 57
Condition Rating of Street System A-4 58
D. COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES
Major Governmental Funds
Budgetary Comparison Schedule-General Obligation Debt Service Fund B-1 60
Nonmajor Governmental Funds
Combining Balance Sheet-Nonmajor Governmental Funds C-1 63
Combining Statement of Revenues, Expenditures, and Changes in Fund Balance-
Nonmajor Governmental Funds C-2 66
Budgetary Comparison Schedule-Parks Dedication Special Revenue Fund C-3 69
Budgetary Comparison Schedule-Southlake Parks Development
Corporation Special Revenue Fund C-4 70
Budgetary Comparison Schedule- Hotel Occupancy Special Revenue Fund C-5 71
Budgetary Comparison Schedule-Storm Water Utility Special Revenue Fund C-6 72
Budgetary Comparison Schedule-Red Light Camera Special Revenue Fund C-7 73
Budgetary Comparison Schedule-Southlake Parks Development Corporation
Debt Service Fund C-8 74
Agency Funds
Statement of Changes in Assets and Liabilities-Cash Escrow Agency Fund F-1 76
E. Capital Assets Used in the Operation of Governmental Funds
Comparative Schedules of Capital Assets by Source G-1 77
Schedule of Changes in Capital Assets by Function and Activity G-2 78
CITY OF SOUTHLAKE,TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2011
TABLE OF CONTENTS
Exhibit Page
III.STATISTICAL SECTION Table
Net Assets By Component 1 79
Changes in Net Assets 2 80
Fund Balances, Governmental Funds 3 82
Changes in Fund Balances, Governmental Funds 4 83
Assessed Value and Estimated Actual Value of Taxable Property 5 84
Direct and Overlapping Property Tax Rates 6 85
Principal Property Tax Payers 7 86
Ad Valorem Tax Levies and Collection 8 87
Ratio of Outstanding Debt By Type 9 88
Ratio of General Bonded Debt Outstanding 10 90
Direct and Overlapping Governmental Activities Debt 11 91
Pledged-Revenue Coverage 12 92
Demographic and Economic Statistics 13 93
Principal Employers 14 94
Full-Time Equivalent City Government Employees By Function/Program 15 95
Operating Indicators By Function/Program 16 96
Capital Asset Statistics By Function/Program 17 97
INTRODUCTORY SECTION
CITY OF
SOUTHLAKE
Q1
Finance Department
March 30, 2012
Honorable Mayor John Terrell and
Members of City Council
City of Southlake
Southlake, Texas
Honorable Mayor and Councilmembers:
It is with pleasure that we submit to you the Comprehensive Annual Financial Report
(CAFR) of the City of Southlake for the fiscal year ended September 30, 2011. This report
was prepared by the Finance Department in accordance with the Southlake Charter,
Statutes and generally accepted accounting principles for governments. In addition to
meeting legal requirements, this report reflects the City's commitment to full financial
disclosure. We encourage you to thoroughly read this report and take the opportunity to
discuss some of the important items it addresses.
The financial statements are presented in accordance with Governmental Accounting
Standards Board Statement 34, Basic Financial Statements-and Management's
Discussion and Analysis-For State and Local Governments. The presentation of the
City's financial information includes two financial statements that provide a government-
wide perspective using the accrual basis of accounting. The two government-wide
statements present governmental activities separately from business-type activities. The
inclusion of the government-wide statements in this format enables a more thorough
understanding of the financial operations and condition of the City.
The fund financial statements focus on individual major funds. Each major fund is
presented in a separate column in the fund financial statements. Nonmaj or funds are
aggregated and presented in a combined column. Budget to actual comparisons are
presented as required supplementary information and are limited to the general fund and
major special revenue funds. The comparisons are now more informative, including both
the original adopted budget and the final amended budget.
We believe the reporting model will assist in making economic, social and political
decisions and in assessing accountability to the residents by:
• comparing actual financial results with the legal adopted budget, where
appropriate;
• assessing financial condition and results of operations;
1400 Main Street, Suite 440, Southlake, TX 76092 (817) 748-8345
Innovation 0 Integrity 0 Accountability 0 Commitment to Excellence 0 Teamwork
i
• assisting in determining compliance with fiscally-oriented laws, rules and
regulations; and
• assisting in evaluating the efficiency and effectiveness of City operations
Responsibility for both the accuracy of the presented data and the completeness and
fairness of the presentation, including all disclosures, rests with the City. To the best of
our knowledge and belief, the data, as presented, is accurate in all material respects and is
reported in a manner designed to present fairly the financial position and results of
operations. All disclosures necessary to enable the reader to gain an understanding of the
City's financial activities have been included.
FINANCIAL STATEMENT FORMAT
This report has been prepared and organized to meet the requirements of the Government
Finance Officers Association (GFOA) Certificate of Achievement for Excellence in
Financial Reporting Program. By following the guidelines of this program, the report's
format facilitates understanding by the residents and provides information needed by the
most sophisticated and interested financial observers. The report is presented in three
sections: introductory, financial and statistical.
• The introductory section, which is unaudited, includes this transmittal letter,
GFOA certificate, the City's organizational chart, and a list of principal officials.
This section is designed to provide an overview and general understanding of the
report.
• The financial section provides a detailed presentation of the financial position and
results of operations for the fiscal year ended September 30, 2011. The financial
section is divided into four main subsections:
o Management's Discussion and Analysis
o Basic Financial Statements and related notes
o Required Supplementary Information
o Combining and Individual Fund Financial Statements
Readers are encouraged to pay particular attention to Management's Discussion
and Analysis and to the footnotes to the basic financial statements. These provide
valuable analysis and explanation of the financial statements.
• The statistical section, which is unaudited, includes a number of multi-year tables
and other data designed to present social, economic and financial trends of the
City, providing an overall view of the fiscal capacity of the City.
The financial reporting entity includes all the funds of the primary government, as well as
all of its component units in accordance with GASB Codification of Governmental
Accounting and Financial Reporting Standards, Section 2100, `Defining the Reporting
ii
Entity." Component units are legally separate entities for which the primary government
is financially accountable and for which the nature and significance of their relationship
with the primary government are such that exclusion would cause the City's basic
financial statements to be misleading or incomplete. The primary government is
considered financially accountable if it appoints a voting majority of an organization's
governing body and imposes its will on that organization. The primary government may
also be financially accountable if an organization is fiscally dependent on the primary
government regardless of the authority of the organization's governing board. Blended
component units, although legally separate entities, are, in substance, part of the primary
government's operations and are included as part of the primary government.
Accordingly, the Southlake Parks Development Corporation ("SPDC"), Southlake Crime
Control and Prevention District (the "District") and Tax Increment Reinvestment Zone
("TIF") are included in the governmental funds (special revenue) of the primary
government as blended component units. SPDC was formed in January 1994 pursuant to
a successful election in November 1993 to adopt an additional '/2 cent sales tax for park
and recreation facility development. SPDC is organized exclusively to act on behalf of
the City for the financing, development and operation of parks and recreation facilities.
Also included in this report is financial information for the District. In November 1997,
voters approved an additional '/2 cent sales tax for Crime Control and Prevention
initiatives. The District is organized exclusively to act on behalf of the City for the
financing, development and crime control throughout the City. Also, included are the
financial statements of the TIF which was created in 1997 to encourage quality
commercial growth. The TIF was formed to finance and make public improvements,
under the authority of the Tax Increment Financing Act.
PROFILE OF THE GOVERNMENT
General Information
Although Southlake has been a high-growth community for years, when the first settlers
arrived in 1845 they found only a vast area of land and trees where the grand prairie and
cross timbers merged. As the site of the first permanent settlement in Tarrant County, a
portion of present day Southlake was homesteaded in 1866, which consisted of 360 acres.
Keeping with the time, the primary industry was agriculture. Farmers grew peanuts,
grains and cotton, and families raised their own livestock.
The area that would become Southlake remained a rural farming community for more
than 100 years until the U.S. Army Corps of Engineers built Lake Grapevine in 1952.
The lake spurred much of the area's early growth and was the beginning of dramatic
change. The town officially incorporated on September 25, 1956 by a public vote of 30
in favor and 24 against. The original town contained 1.62 square miles and had a
population of just over 100. The residents chose to call this new town Southlake because
it was... south of Lake Grapevine! The Southlake Fire Department was launched in 1965
and the first piece of fire equipment was a 1950 Diamond T-Military unit with a tank
capacity of 1,000 gallons and an auxiliary pump. The first chief of police was hired in
1966, and the City purchased its first patrol car in 1967.
iii
City of Southlake Population The opening of the
Dallas-Fort Worth
International
30000 Airport in 1974
25000 served as the next
20000 catalyst of growth
in the area and
15000 Southlake residents
10000 adopted a home-
rule charter in
5000 April 1987, which
0 created the current
2000 2003 2006 2007 2008 2009 2010 2011 council-manager
Year form of
government with
six Council
Members and a Mayor who are elected at large on a non-partisan basis for staggered
three-year terms. But the single most important event in bringing residential subdivision
development to Southlake was the completion of water and sewer lines in the southern
portion of the city in the early 1990s.
Since that time, much like the area's first settlers were attracted to the area with its
endless possibilities, Southlake has continued to attract the suburban settler desiring a
high quality of life and the small town charm that has been preserved from Southlake's
past.
Services Provided
Services provided by the City under general governmental functions include public
events, public safety, planning and development, engineering, street maintenance, parks
operation and maintenance, recreation, library services, and general administrative
services. The City does not provide educational or welfare services.
Water and sewer services and solid waste collection are provided under an Enterprise
Fund concept, with user charges set by the City Council to ensure adequate coverage of
operating expenses and payments of outstanding debt.
Economic Condition and Outlook
The City of Southlake continues to be one of the major growth areas in Texas. The City is
in a prime location in Northeast Tarrant County, 5 minutes west of Dallas/Fort Worth
International Airport, and 10 minutes east of the Alliance Airport, a commercial aviation
and industrial complex in north Fort Worth. State Highway 114, FM1709, and FM1938,
the regional road arterials, serve the City.
iv
Single Family Residential Home Permits There were 90 single familyresidential permits issued in
2Dq Fiscal Year 2011 with an
1&U average new home
15U
construction value, excluding
12D land value, of more than
1U0
$660,000. Residential home
60 construction has slowed as
40 20 evidenced by the chart.
0
FY07 FY08 FY09 FY1U FY11
Water customers increased
Number of Water Customers from 9,346 in Fiscal Year
2010 to 9,466 in 2011, while
7100 wastewater customers
8-00 increased from 7,229 to 7,361
SO°° during the same year. The
9200 chart shows the five-year
13100
9000 trend of increasing water
8900 customers, the result of the
9800 building permit activity. The
9700 City has developed master
FY07 `'°.. F,,.s FY16 FY11 plans for land use, water,
sewer, parks, trails, and
thoroughfares, and has implemented regulatory controls that will maintain the anticipated
quality growth into the future.
Sales Tax Revenue The City of Southlake
experienced a slight increase
20,000,000 in sales tax collections
during the fiscal year as
15,000,000 indicated on the chart.
10,000,000
5,1300,000
2007 2008 2009 2010 2011
■General ❑SPEC ❑Crime
v
Future Development
During 2011, approximately 10 new construction commercial permits were issued by the
city representing over 70,000 square feet of future retail/office. Residential also
experienced an increase in activity; several subdivisions were approved for development
with an estimated average home value over $700,000.
Financial Management Principles
The City has strong financial management principles that provide the framework for the
City's financial sustainability.
• Tax rate management. The tax rate is allocated properly between
maintenance/operations and debt service.
• Structural balance. The City's ability to weather potential economic downturns or
other financial challenges is critical. The City does not use reserves to balance
the operating budget.
• Reserve management. The City's fund balance policy requires a minimum 15%
and optimum 25% balance. The City uses "excess" reserves as a means to fund
one-time, "pay-as-you-go" projects.
• Multi-year financial plan. The long-term effect of today's decisions on
tomorrow's financial situation is an important consideration during the budget
process.
• Quality service delivery. The City is committed to meeting the needs of our
community through high quality service delivery.
• Risk management. The City supports ongoing initiatives to safeguard the public
trust by internal audits and other initiatives to maintain a strong control
environment.
For fiscal year 2011, the property tax rate was held steady at $0.462 per $100 net taxable
valuation. In spite of the economic downturn the City did not use reserves to balance the
operating budget for fiscal years 2011 or 2012.
OTHER INFORMATION
Independent Audit
The City Charter requires an annual audit of the financial status of the City by independent
Certified Public Accountants selected by the City Council. This requirement has been met
and the auditor's report has been included in this report.
Awards
The Certificate of Achievement is a prestigious national award recognizing conformance
with the highest standards for preparation of state and local government financial reports.
In order to be awarded a Certificate of Achievement, a government unit must publish an
easily readable and efficiently organized comprehensive annual financial report, whose
contents conform to program standards. Such CAFR must satisfy both generally accepted
accounting principles and applicable legal requirements. A Certificate of Achievement is
valid for a period of one year only. The City of Southlake received a Certificate of
vi
Achievement for the year ended September 30, 2010, and believes our current report
conforms to the Certificate of Achievement program requirements, and we are submitting it
to GFOA.
Acknowledgments
The preparation of this report could not be accomplished without the dedication and
efficiency of the entire staff and our independent auditor. I would like to express my
sincere appreciation to all employees who contributed to its preparation. I would also
like to thank the Mayor and members of the City Council for their support in planning
and conducting the financial operations of the City in a responsible and efficient manner.
Respectfully submitted,
Sharen Jackson, CPA
Director of Finance
vii
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Southlake
Texas
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
September 30,2010
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers'
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports(CAFRs)achieve the highest
standards in government accounting
and financial reporting.
� OF
�STRTE OCAWFgj�
FS v
a
RA ION President
M
Executive Director
VIII
CITY OF SOLITHLAKE
ORGANIZATIONAL CHART
SOUTHLAKE
CITIZENS
MAYOR AND
CITY COUNCIL
CITY ATTORNEY - - - - CITY MANAGER CITY SECRETARY
L _ - - - - MUNICIPAL
JUDGE
ASST. CITY ASST. CITY
R
MANAGER I MANAGER
DPS DIRECTO
COMMUNITY ECONOMIC CITY MANAGERS INFORMATION
,SERVICES DEVELOPMENT OFFICE TECHNOLOGY
DEPARTMENT OF HUMAN FINANCE
PUBLIC SAFETY RESOURCES
POLICE PLANNING&DEVELOPMENT
SERVICES
FIRE
FPUBLIC WORKS
IX
LIST OF PRINCIPAL OFFICIALS
John Terrell Mayor
Brandon Bledsoe Mayor Protem
Pamela Muller Deputy Mayor Protem
Martin Schelling Council Member
Carolyn Morris Council Member
Al Zito Council Member
Jeff Wang Council Member
Shana K. Yelverton City Manager
Jim Blagg Assistant City Manager
Ben Thatcher Assistant City Manager
Alicia Richardson City Secretary
Jim Blagg Director of Public Safety
Sharen Jackson Director of Finance
Greg Last Director of Economic Development
Robert Price Director of Public Works
Chris Tribble Director of Community Services
Stacey Black Director of Human Resources
Ken Baker Director of Planning/Development
x
FINANCIAL SECTION
I
weaver
INDEPENDENT AUDITOR'S REPORT
To Members of the City Council
and City Manager
City of Southlake, 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 the City
of Southlake, Texas (the City) as of and for the year ended September 30, 2011, 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's management. Our responsibility is to
express opinions on these basic financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the basic financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
basic 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 basic financial statements referred to above present fairly, in all material
respects, the financial position of the governmental activities, the business-type activities, each
major fund, and the aggregate remaining fund information of the City of Southlake, Texas at
September 30, 2011, and the respective changes in financial position and cash flows, where
applicable, thereof, for the year then ended in conformity with accounting principles generally
accepted in the United States of America.
The accompanying management's discussion and analysis (pages 3 through 14), budgetary
comparison information (pages 54 through 57) and condition rating of the street system (page 58),
are not a required part of the basic financial statements but are supplementary information
required by the Governmental Accounting Standards Board. 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.
In accordance with Government Auditing Standards, we have issued a report dated March 30,
2012, on our consideration of the City's internal control over financial reporting and our tests of
compliance with certain provisions of laws, regulations, contracts and grants. The purpose of that
report is to describe the scope of testing of internal control over financial reporting and compliance
and the results of that testing, and not to provide an opinion on the internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards and should be considered in assessing the results of our
audit.
AN INDEPENDENT WEAVER AND 71DWELL LLP DALLAS
MEMBER OF BAILER TILLY CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS 12221 MERIT DRIVE,SUITE 1400,DALLAS,TX 75251
INTERNATIONAL WWW.WEAVERLLP.COM P:(972)430 1970 F:(972)702 8321
City of Southlake, Texas
Page 2
Our audit was made for the purpose of forming an opinion on the basic financial statements taken
as a whole. The introductory section, combining and individual major and non-major fund
financial statements and schedules, schedules of capital assets used in the operation of
governmental funds, and statistical section listed in the table of contents are presented for
purposes of additional analysis and are not a required part of the basic financial statements of the
City. The combining and individual major and non-major fund financial statements and schedules
and the schedules of capital assets used in the operation of governmental funds 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 section have not been subjected to the
auditing procedures applied in the audit of the basic financial statements and, accordingly, we
express no opinion on such data.
(J'tt�� a4w '��
WEAVER AND TIDWELL, L.L.P.
Dallas, Texas
March 30, 2012
2
MANAGEMENT'S DISCUSSION
AND ANALYSIS
I
MANAGEMENT'S DISCUSSION AND ANALYSIS
The City of Southlake's Management's Discussion and Analysis (MD&A) is designed to
provide an objective and easy to read analysis of the City's financial activities based on
currently known facts, decisions, and conditions. It is intended to provide a broad
overview and short-term analysis of the City's activities based on information presented
in the financial statements. Specifically, this information is designed to assist the reader
in focusing on significant financial issues, provide an overview of the City's financial
activity, identify changes in the City's financial position (its ability to address the next
and subsequent years' challenges), identify material deviations from the approved budget,
and identify individual fund issues.
The City presents its financial statements in accordance with the reporting model required
by Governmental Accounting Standards Board Statement 34, Basic Financial
Statements-and Management's Discussion and Analysis- for State and Local
Governments. This reporting model significantly changes not only the presentation of
financial data, but also the manner in which the information is recorded.
The information contained within this MD&A is only a component of the entire financial
statement report. Readers should take time to read and evaluate all sections of the report,
including the footnotes and the other Required Supplementary Information that is
provided in addition to this MD&A.
FINANCIAL HIGHLIGHTS
The assets of the City of Southlake exceeded its liabilities at September 30, 2011 by
$447,840,539 (net assets). Of this amount, $70,771,418 (unrestricted net assets) may be
used to meet the government's ongoing obligations to citizens and creditors.
The City's total net assets increased by $18,731,014. This increase can be attributed to
increases in ad valorem, sales tax revenue, fines and forfeitures, contributions, and
charges for services.
At September 30, 2011, the City's governmental funds reported combined ending fund
balances of $92,980,025. Approximately 13.3 percent of this amount, $12,400,379, is
available for spending at the government's discretion (unassigned fund balance).
At the end of the current fiscal year, unassigned fund balance for the General Fund was
$12,400,379 or 39.7 percent of total General Fund expenditures.
At the end of the current fiscal year, the City of Southlake outstanding debt totals
$179,266,907, a net decrease of$852,550 from the previous year.
3
OVERVIEW OF THE FINNCIAL STATEMENTS
The discussion and analysis is intended to serve as an introduction to the City's basic
financial statements. The new reporting focus is on the City as a whole and on individual
major funds. It is intended to present a more comprehensive view of the City's financial
activities.
The basic financial statements are comprised of 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 include the Statement of Net Assets and the
Statement of Activities. These statements are designed to provide readers with a broad
overview of the City's finances in a manner similar to a private-sector business. Both are
prepared using the economic resources focus and the accrual basis of accounting;
meaning that all the current year's revenues and expenses are included regardless of
when cash is received or paid.
The Statement of Net Assets presents information on all of the City's assets and
liabilities, including capital assets and long-term obligations. The difference between the
two is reported as net assets. Over time, the increases or decreases in net assets may
serve as a useful indicator of whether the financial position of the City is improving or
deteriorating. Other indicators of the City's financial position should be taken into
consideration, such as the change in the City's property tax base and condition of the
City's infrastructure (i.e., roads, drainage systems, water and sewer lines, etc.), in order to
more accurately assess the overall financial condition of the City.
The Statement of Activities presents information showing how the City's net assets
changed during the most recent fiscal year. It focuses on both the gross and net costs of
the government's various activities and thus summarizes the cost of providing specific
government services. This statement includes all current year revenues and expenses.
The Statement of Net Assets and the Statement of Activities divide the City's activities
into two types:
Governmental activities- Most of the City's basic services are reported here, including
general administration, debt services, public safety, public works, parks and community
services, public library, public events and facilities, planning and development and
finance. Property, sales and franchise taxes provide the majority of the financing for
these activities.
4
Business-]ype activities- Activities for which the City charges a fee to customers to pay
most or all of the costs of a service it provides are reported here. The City's business-
type activities include water distribution and wastewater collection and solid waste
collection and disposal.
The government-wide financial statements are found on pages 15-16 of this report.
FUND FINANCIAL STATEMENTS
The City of Southlake, like other state and local governments, uses fund accounting to
ensure and demonstrate compliance with finance-related legal requirements. 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. These statements focus on the most
significant funds and may be used to find more detailed information about the City's
most significant activities. All of the funds of the City can be divided into two
categories: governmental funds and proprietary funds.
Governmental Funds- These funds are used to account for the majority of the City's
activities, which are essentially the same functions reported as governmental activities in
the government-wide statements. However, unlike the government-wide financial
statements, governmental fund financial statements focus on near-term inflows and
outflows of spendable resources, as well as spendable resources available at the end of
the fiscal year for future spending. Such information may be useful in evaluating a
government's near-term financing requirements.
The focus of the governmental funds financial statements is narrower than that of the
government-wide financial statements. Therefore, 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 funds Balance Sheet and the governmental funds Statement of
Revenues, Expenditures and Changes in Fund Balances provided a reconciliation to
facilitate this comparison. The reconciliation explains the differences between the
government's activities as reported in the government-wide financial statements and the
information presented in the governmental funds financial statements.
The City maintains twenty-one individual governmental funds. Information is presented
separately in the governmental funds Balance Sheet and in the governmental funds
Statement of Revenues, Expenditures and Changes in Fund Balances for the General
Fund, General Obligation Debt Service Fund, General Capital Projects Fund, Crime
Control District, Southlake Parks Development Corporation Capital Projects Fund, Tax
Increment Financing District Fund, and Crime Control District Capital Projects Fund, all
of which are considered to be major funds. Data for the other governmental funds are
combined into a single, aggregated presentation. Individual fund data for each of the
non-major governmental funds is provided in the form of combining statements
elsewhere in this report.
5
The basic governmental funds financial statements can be found on pages 17-22 of this
report.
Proprietary Funds- When the City charges customers for services it provides, the
activities are generally reported in proprietary funds. The City of Southlake maintains
two different types of proprietary funds: enterprise and internal service funds.
Enterprise funds are used to report the same functions presented as business-type
activities in the government-wide financial statements. The City uses enterprise funds to
account for its water and sewer operations and solid waste. These services are primarily
provided to outside or non-governmental customers.
Internal service funds are an accounting device used to accumulate and allocate costs
internally among the City's various functions. The City uses internal service funds to
account for its vehicle fleet.
Proprietary funds financial statements provide the same type of information as the
government-wide financial statements, only in more detail. The proprietary funds
financial statements provide separate information for the water and sewer operations,
which is considered to be a major fund of the City.
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 27-53 of this report.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Total assets of the City at September 30, 2011 were $635,326,526 while total liabilities
were $187,485,987, resulting in a net asset balance of$447,840,539.
The largest portion of the City's net assets, $367,329,932 reflects its investment in capital
assets (land and improvements, building, infrastructure, machinery and equipment net of
accumulated depreciation); less any related debt used to acquire those assets that are still
outstanding. The City uses these assets to provide services to its citizens; consequently,
these assets are not available for future spending. Although the City reports its capital
assets net of related debt, 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.
6
Governmental Activities net assets increased by $16,076,826. This increase is primarily
attributable to increases in both property taxes and charges for services.
Business-type Activities net assets increased by $2,654,188. The majority of this change
can be attributed to an increase in charges for service which resulted from increased
consumption during the dry summer months.
The following analysis highlights the net assets as of September 30, 2011:
Governmental Business-Type 2011
Activities Activities Total
Current and other assets: $104,435,715 $ 38,311,211 $142,746,926
Capital assets 390,002,512 102,577,088 492,579,600
Total assets $494,438,227 $140,888,299 $635,326,526
Other liabilities $ 6,220,747 $ 1,998,333 $ 8,219,080
Long-term debt
outstanding 126,902,028 52,364,879 179,266,907
Total liabilities $133,122,775 $ 54,363,212 $187,485,987
Net assets:
Invested in capital
assets $298,418,769 $ 68,911,163 $367,329,932
Restricted-debt service 9,739,189 9,739,189
Unrestricted 53,157,494 17,613,924 70,771,418
Total net assets $361,315,452 $ 86,525,087 $447,840,539
The following analysis highlights the net assets as of September 30, 2010:
Governmental Business-Type 2010
Activities Activities Total
Current and other assets: $103,664,305 $ 36,746,389 $140,410,694
Capital assets 375,432,194 102,203,508 477,635,702
Total assets $479,096,499 $138,949,897 $618,046,396
Other liabilities $ 6,237,555 $ 2,579,859 $ 8,817,414
Long-term debt
outstanding 127,620,318 52,499,139 180,119,457
Total liabilities $133,857,873 $ 55,078,998 $188,936,871
Net assets:
Invested in capital
assets $277,985,305 $ 65,039,374 $343,024,679
Restricted-debt service 8,814,621 8,814,621
Unrestricted 58,438,700 18,831,525 77,270,225
Total net assets $345,238,626 $ 83,870,899 $429,109,525
7
The following analysis highlights the changes in net assets for the year ended September
30, 2011:
Governmental Business-Type 2011
Activities Activities Total
Revenues:
Program revenues:
Charges for services $ 6,891,186 $22,571,056 $29,462,242
Operating grants and
contributions 532,100 532,100
Capital grants and
contributions 2,309,613 1,433,278 3,742,891
General revenues:
Taxes 53,321,732 53,321,732
Interest on
investments 258,556 123,872 382,428
Gain on sale of
capital assets 26,741 26,741
Miscellaneous 658,902 42,463 701,365
Total revenues 63,998,830 24,170,669 88,169,499
Expenses:
General government 13,754,529 13,754,529
Public safety 15,144,173 15,144,173
Public works 6,279,687 6,279,687
Culture and recreation 7,897,173 7,897,173
Interest on long-term debt 5,638,272 5,638,272
Water and sewer 20,724,651 20,724,651
Total expenses 48,713,834 20,724,651 69,438,485
Increase in net assets
before transfers 15,284,996 3,446,018 18,731,014
Transfers 791,830 (791,830)
Increase in net assets 16,076,826 2,654,188 18,731,014
Net assets-beginning
of year, as restated 345,238,626 83,870,899 429,109,525
Net Assets-End of Year $361,315,452 $86,525,087 $447,840,539
8
The following analysis highlights the changes in net assets for the year ended September
30, 2010:
Governmental Business-Type 2010
Activities Activities Total
Revenues:
Program revenues:
Charges for services $ 6,811,321 $18,897,356 $25,708,677
Operating grants and
contributions 68 8,803 688,803
Capital grants and
contributions 5,994,206 2,578,400 8,572,606
General revenues:
Taxes 52,515,389 52,515,389
Interest on
investments 414,852 155,173 570,025
Gain on sale of
capital assets 21,465 21,465
Miscellaneous 428,804 71,871 500,675
Total revenues 66,874,840 21,702,800 88,577,640
Expenses:
General government 11,814,836 11,814,836
Public safety 14,885,499 14,885,499
Public works 5,767,688 5,767,688
Culture and recreation 7,287,434 7,287,434
Interest on long-term debt 6,515,269 6,515,269
Water and sewer 18,948,438 18,948,438
Total expenses 46,270,726 18,948,438 65,219,164
Increase in net assets
before transfers 20,604,114 2,754,362 23,358,476
Transfers 596,093 (596,093)
Increase in net assets 21,200,207 2,158,269 23,358,476
Net assets-beginning
of year, as restated 324,038,419 81,712,630 405,751,049
Net Assets-End of Year $345,238,626 $83,870,899 $429,109,525
9
FINANCIAL ANALYSIS OF THE GOVERNMENTAL FUNDS
Governmental Funds- The focus of the City of Southlake's governmental funds is to
provide information on near-term inflows, outflows and balances of spendable resources.
Such information is useful in assessing the City's financing requirements. In particular,
unreserved fund balance may serve as a useful measure of a government's net resources
available for spending at the end of the fiscal year.
As of the end of the current fiscal year, the City's governmental funds reported combined
fund balances of $92,980,025. Approximately 13.3 percent or $12,400,379 constitutes
unassigned fund balance, which is available for spending at the government's discretion.
The remainder of the fund balance is either restricted, committed or assigned for specific
purposes to pay for debt service ($11,885,706), recycling ($33,624), police expenditures
($7,490,292), parks ($6,411,344), capital projects ($43,779,957), inventories ($34,958),
prepaid expenditures ($1,561), reinvestment zone expenditures ($5,348,592), municipal
court expenditures ($738,259), oil and gas expenditures ($53,185), storm water
expenditures ($300,963), reforestation ($165,253), teen court ($17,954), senior center
($10,391), and strategic initiative expenditures ($4,303,823).
The General Fund is the chief operating fund of the City. At the end of the current fiscal
year, unassigned fund balance of the general fund was $12,400,379. As a measure of the
General Fund's liquidity, it may be useful to compare both the unassigned fund balance
and total fund balance to total fund expenditures. Unassigned fund balance represents
39.7 percent of total General Fund expenditures, while total fund balance represents 54.6
percent of total General Fund expenditures. The fund balance of the General fund
decreased $1,098,101 during the current fiscal year. Following are the key factors in this
decrease:
Increase in public safety expenditures ($202,707) and parks and recreation
expenditures ($243,389) and legal expenditures ($131,276).
The General Obligation Debt Service Fund has a fund balance of $10,363,056, all of
which is restricted for the payment of debt service. The fund balance increased during
the year by $1,096,730, primarily due to a $5,965,807 transfer from the Tax Increment
Financing District and Crime Control District Special Revenue Funds. The fund balance
in the General Capital Projects Funds ended the year at $32,676,917, a decrease of
$427,761.
FINANCIAL ANALYSIS OF THE PROPRIETARY FUNDS
The City's proprietary funds provide the same type of information found in the
government-wide financial statements, but in more detail.
10
Unrestricted net assets reported in the Proprietary Funds were: $17,613,924 in the Water
and Sewer Fund and $4,106,060 in the Vehicle Replacement Fund. Both the Water and
Sewer Fund and Vehicle Replacement Fund net assets increased by $2,654,188 and
$1,570,011, respectively. The increase in water, sewer and garbage sales and capital
contributions and transfers from the previous year are the primary reasons for the change
in net assets.
GENERAL FUND BUDGETARY HIGHLIGHTS
There was an increase in appropriations from the original budget to the final amended
budget of$167,035, which can be briefly summarized as follows:
• Increase in general operational cost(utilities, supplies, etc.)
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets- The City's investment in capital assets for its governmental and business-
type activities as of September 30, 2011 amount to $492,579,600 (net of accumulated
depreciation). This investment in capital assets includes land, buildings, improvements,
machinery and equipment, infrastructure and construction in progress.
The City has elected to use the modified approach for its street system in lieu of the
depreciation method. An up-to-date inventory of these infrastructure assets was
performed and the annual costs to maintain and preserve these assets was established and
disclosed through administrative policy. The current condition level of the street system
meets the target condition level established by the City. There were no significant
changes in the condition levels of infrastructure assets, and the differences between the
estimated amounts necessary to maintain and preserve the street system at target
conditions levels and the actual amount of expense incurred for that purpose for 2011 was
not material. Major capital projects completed during the current year included the
following:
• Dove and N White Chapel Roundabout
• White Chapel and Continental Roundabout
• Southlake Sports Complex lighting improvements
• Various water lines
• Pavement Management System—various overlays and rehab
• Various Sidewalks
11
Governmental Business-Type 2011
Activities Activities Total
Land and improvements $ 95,055,289 $ 14,633,263 $109,688,552
Buildings and improvements 55,730,470 471,459 56,201,929
Improvements 78,260,431 78,260,431
Infrastructure 214,052,892 214,052,892
Machinery and equipment 7,364,300 1,100,660 8,464,960
Construction in Progress 17,799,561 8,111,275 25,910,836
Total $390,002,512 102.577.088 492.579.600
Governmental Business-Type 2010
Activities Activities Total
Land and improvements $ 85,987,988 $ 14,471,242 $100,459,230
Buildings and improvements 56,026,555 452,898 56,479,453
Improvements 78,685,371 78,685,371
Infrastructure 207,014,670 207,014,670
Machinery and equipment 8,261,012 1,027,947 9,288,959
Construction in Progress 18,141,972 7,596,050 25,738,022
Total $375,432,194 $102,203,LO8
477,635,702
Additional information on the City's capital assets can be found in Note 4 on pages 42-43
of this report.
Long-term Debt- At the end of the current fiscal year, the City of Southlake had
$125,969,876 total long-term debt outstanding of bonds issued to finance capital
improvements for roadway, parks and recreation, public building and infrastructure.
$52,025,797 of Utility System bonds, which financed projects to increase capacity of the
Utility system, was also outstanding. An additional $1,006,666 was reported for
compensated absences at year-end.
12
Governmental Business-Type 2011
Activities Activities Total
Bonds payable $125,969,876 $52,025,797 $177,995,673
Unearned revenue 264,568 264,568
Compensated absences 932,152 74,514 1,006,666
Total $126,902,028 52,364,879 $179,266,907
Governmental Business-Type 2010
Activities Activities Total
Bonds payable $126,741,347 $52,164,653 $178,906,000
Unearned revenue 272,214 272,214
Compensated absences 878,971 62,272 941,243
Total 127,620,318 52,499,139 $180,119,457
The City's bonds are rated "AAA" by Standard and Poor's and Fitch Ratings. The City
is permitted by Article XI, Section 5, of the State of Texas Constitution to levy taxes up
to $2.50 per $100 of assessed valuation for general governmental services including the
payment of principal and interest on general obligation long-term debt. The current ratio
of tax-supported debt to the assessed value of all taxable property is 1.54 percent.
Additional information on the City's long-term debt can be found in Note 5 on pages 43-
48 of this report.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
The State of Texas, by constitution, does not have a personal income tax and therefore
the State operates primarily using sales and gasoline taxes. Local governments primarily
rely on property taxes and fees to fund their government activities.
While property taxes are important to the City, they represent 51.2% of total
governmental revenue. Sales tax continues to grow as the second largest governmental
resource representing 30.8% of total governmental revenue. The City monitors all of its
resources and determines the need for program adjustment or fee increases accordingly.
The FY 2012 Adopted Budget maintains the City's property tax rate at $0.462 per $100
net taxable valuation, which is unchanged from the FY 2011 rate. The City's property
tax roll on net taxable value increased $58,201,915 or 1.1 percent from the 2010 certified
roll to the 2011 certified roll. As a result, the City is projected to collect more in FY
2012 than in FY 2011, even without a tax rate increase.
13
The estimate of the FY 2012 tax roll is based on the certified roll as provided by the
Tarrant Appraisal District(TAD)in July. The assumed collection rate is 98 percent.
Requests for Information
This financial report is designed to provide a general overview of the City of Southlake's
finances for all those with an interest in the government's finances. Questions
concerning any of the information provided in this report or requests for additional
financial information should be addressed to the Office of the Finance Director, 1400
Main Street, 4th Floor Finance Department, Southlake, Texas 76092.
14
BASIC FINANCIAL STATEMENTS
I
GOVERNMENT-WIDE
FINANCIAL STATEMENTS
CITY OF SOUTHLAKE, TEXAS EXHIBIT 1
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2011
PRIMARY GOVERNMENT
GOVERNMENTAL BUSINESS-TYPE
ACTIVITIES ACTIVITIES TOTAL
ASSETS
Cash and cash equivalents $ 53,742,442 $ 8,572,169 $ 62,314,611
Investments 34,291,190 702,530 34,993,720
Receivables(net of allowance for uncollectibles) 4,532,706 3,714,410 8,247,116
Prepaid items 1,561 628 2,189
Inventories 34,958 - 34,958
Restricted assets
Cash and cash equivalents 7,577,209 19,548,340 27,125,549
Investments 2,791,993 5,045,299 7,837,292
Receivables 92,973 - 92,973
Capital assets:
Non-depreciable 281,195,164 22,744,538 303,939,702
Depreciable(net of depreciation) 108,807,348 79,832,550 188,639,898
Deferred charges 1,370,683 727,835 2,098,518
TOTAL ASSETS $ 494,438,227 $ 140,888,299 $ 635,326,526
LIABILITIES
Accounts payable $ 3,442,611 $ 1,304,336 $ 4,746,947
Accrued liabilities 1,544,229 229,094 1,773,323
Accrued interest payable - 286,102 286,102
Unearned revenue 523,911 - 523,911
Liabilities payable from restricted assets
Accrued interest 709,996 - 709,996
Customer meter deposits - 178,801 178,801
Non-current liabilities:
Due within one year 9,900,535 3,664,830 13,565,365
Due in more than one year 117,001,493 48,700,049 165,701,542
TOTAL LIABILITIES 133,122,775 54,363,212 187,485,987
NET ASSETS
Invested in capital assets(net of related debt) 298,418,769 68,911,163 367,329,932
Restricted for debt service 9,739,189 - 9,739,189
Unrestricted 53,157,494 17,613,924 70,771,418
TOTAL NET ASSETS $ 361,315,452 $ 86,525,087 $ 447,840,539
The Notes to Financial Statements are
an integral part of this statement.
15
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I
FUND FINANCIAL STATEMENTS
I
GOVERNMENTAL FUNDS
FINANCIAL STATEMENTS
CITY OF SOUTHLAKE, TEXAS
BALANCE SHEET
GOVERNMENTAL FUNDS
SEPTEMBER 30, 2011
GENERAL
OBLIGATION GENERAL CRIME
DEBT CAPITAL CONTROL
GENERAL SERVICE PROJECTS DISTRICT
ASSETS
Cash and cash equivalents $ 4,364,315 $ 7,577,209 $ 24,451,655 $2,162,252
Investments 13,632,152 2,791,993 9,386,527 3,891,064
Receivables,net of allowances for
uncollectibles:
Ad valorem taxes 211,238 86,380 - -
Franchise taxes 384,815 - -
Sales taxes 1,706,686 - - 799,323
Interest 65,606 6,593 11,959 9,359
Other 98,072 - 1,337 -
Due from other funds 4,038 -
Inventories 34,958
Prepaid items 1,561 - - -
TOTAL ASSETS $ 20,503,441 $ 10,462,175 $ 33,851,478 $ 6,861,998
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable $ 1,045,621 $ - $ 1,174,561 $ 31,203
Accrued liabilities 1,503,377 12,990 - -
Due to other funds - -
Deferred revenue 905,978 86,129 -
TOTAL LIABILITIES 3,454,976 99,119 1,174,561 31,203
FUND BALANCES
Nonspendable for:
Inventories 34,958 - - -
Prepaid expenditures 1,561 -
Restricted for:
Debt service - 10,363,056
Municipal court expenditures -
Reinvestment zone expenditures -
Capital projects - 32,676,917 -
Committed for:
Police expenditures 48,543 - 6,830,795
Parks and recreation - -
Oil and gas expenditures
Storm water expenditures
Library -
Assigned for:
Police expenditures 31,979
Teen Court expenditures 17,954
Senior Center expenditures 10,391
Recycling 33,624
Reforestation expenditures 165,253
Strategic initiatives 4,303,823
Unassigned 12,400,379 - - -
TOTAL FUND BALANCES 17,048,465 10,363,056 32,676,917 6,830,795
TOTAL LIABILITIES AND FUND BALANCES $ 20,503,441 $ 10,462,175 $ 33,851,478 $ 6,861,998
The Notes to Financial Statements are
an integral part of this statement.
17
EXHIBIT 3
SOUTHLAKE
PARKS CRIME
DEVELOPMENT CONTROL TAX
CORPORATION DISTRICT INCREMENT NON-MAJOR TOTAL
CAPITAL CAPITAL FINANCING GOVERNMENTAL GOVERNMENTAL
PROJECTS PROJECTS DISTRICT FUNDS FUNDS
$ 5,419,410 $ 598,958 $ 4,664,071 $ 8,707,223 $ 57,945,093
2,497,500 248,806 682,980 3,224,999 36,356,021
- - - - 297,618
- - - - 384,815
- - - 882,573 3,388,582
2,031 561 1,541 6,659 104,309
1,028 - - 345,578 446,015
- - - - 4,038
- - - - 34,958
- - - - 1,561
$ 7,919,969 $ 848,325 $ 5,348,592 $ 13,167,032 $ 98,963,010
$ 772,467 $ - $ - $ 418,759 $ 3,442,611
- - - 27,862 1,544,229
- - - 4,038 4,038
- - - - 992,107
772,467 - - 450,659 5,982,985
- - - - 34,958
- - - - 1,561
- - - 1,522,650 11,885,706
- - - 738,259 738,259
- - 5,348,592 - 5,348,592
7,147,502 848,325 - 3,107,213 43,779,957
- - - 578,975 7,458,313
- - - 6,411,344 6,411,344
- - - 53,185 53,185
- - - 300,963 300,963
- - - 3,784 3,784
- - - - 31,979
- - - - 17,954
- - - - 10,391
- - - - 33,624
- - - - 165,253
- - - - 4,303,823
- - - - 12,400,379
7,147,502 848,325 5,348,592 12,716,373 92,980,025
$ 7,919,969 $ 848,325 $ 5,348,592 $ 13,167,032 $ 98,963,010
18
CITY OF SOUTHLAKE, TEXAS EXHIBIT 4
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO THE STATEMENT OF NET ASSETS
AS OF SEPTEMBER 30, 2011
Total fund balances-governmental funds $ 92,980,025
Amounts reported for governmental activities in the statement of net assets
are different because:
Capital assets used in governmental activities are not current financial resources
and therefore are not reported in the governmental funds balance sheet.
(Less$1,154,483 in assets allocated to governmental activities from the internal
service fund). 388,848,029
Costs associated with the issuance of governmental long-term debt are expensed
when incurred in the fund statements and capitalized and amortized over the
life of the debt in the government-wide financial statements. 1,370,683
Interest payable on long-term debt does not require current financial resources;
therefore, interest payable is not reported as a liability in the governmental
funds balance sheet. (709,996)
Internal service funds are used by management to charge the cost of certain
activities, such as fleet management,to individual funds. This
amount represents the assets less the liabilities of the internal service
fund allocated to governmental activities. 5,260,543
Revenues earned but not available within sixty days of the year end are not
recognized as revenue on the fund financial statements. 468,196
Long-term liabilities, including bonds payable, are not due and payable in the
current period and therefore are not reported in the fund financial statements. (126,902,028)
Net assets of governmental activities $ 361,315,452
The Notes to Financial Statements are
an integral part of this statement.
19
I
CITY OF SOUTHLAKE, TEXAS
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2011
GENERAL
OBLIGATION GENERAL CRIME
DEBT CAPITAL CONTROL
GENERAL SERVICE PROJECTS DISTRICT
REVENUES
Ad valorem taxes,penalties and interest $ 17,473,558 $ 6,839,313 $ $
Franchise taxes 2,783,279 -
Municipal sales and mixed beverage taxes 8,796,001 4,644,808
Licenses,permits and fees 1,265,609 -
Charges for services 1,660,154
Fines and forfeitures 1,170,708
Grants 207,533
Capital recovery fees - - 645,022 -
Interest earned 35,993 49,687 122,184 10,235
Contributions - - 7,238 -
Miscellaneous 272,006
TOTAL REVENUES 33,664,841 6,889,000 774,444 4,655,043
EXPENDITURES
Current
General government
City secretary/mayor 359,848
City manager's office 567,911
Human resources 378,771
Support services 3,018,389
Economic development 193,702
Finance 1,132,671
Municipal court 593,251
Teen court 136,298
Information technology 1,717,808
Public safety -
Police services 5,520,833 318,673
Fire services 5,215,401 -
Public safety support 1,498,584
Building inspection 862,832 -
Public works
Public works administration 1,944,128 83,427
Streets and drainage 1,608,693 179,175
Planning 884,508 -
Cultural and recreation
Community services 594,690
Parks and recreation 4,294,693
Library services 677,178
Intergovernmental - -
Capital outlay - 8,637,444
Debt service:
Principal retirement 7,577,033 -
Interest and fiscal charges 4,181,044 79,169
TOTAL EXPENDITURES 31,200,189 11,758,077 8,979,215 318,673
Excess(deficiency)of revenues
over(under)expenditures 2,464,652 (4,869,077) (8,204,771) 4,336,370
OTHER FINANCING SOURCES(USES)
Issuance of long-term debt - 4,480,000 -
Premium on issuance of long-term debt 377,010
Proceeds from the sale of property - - -
Transfers from other funds 1,570,247 5,965,807 2,920,000
Transfers to other funds (5,133,000) (2,137,433)
TOTAL OTHER FINANCING SOURCES(USES) (3,562,753) 5,965,807 7,777,010 (2,137,433)
NET CHANGE IN FUND BALANCES (1,098,101) 1,096,730 (427,761) 2,198,937
FUND BALANCES,BEGINNING OF YEAR 18,146,566 9,266,326 33,104,678 4,631,858
FUND BALANCES,END OF YEAR $ 17,048,465 $ 10,363,056 $ 32,676,917 $ 6,830,795
The Notes to Financial Statements are
an integral part of this statement.
20
EXHIBIT 5
SOUTHLAKE
PARKS CRIME
DEVELOPMENT CONTROL TAX
CORPORATION DISTRICT INCREMENT NON-MAJOR TOTAL
CAPITAL CAPITAL FINANCING GOVERNMENTAL GOVERNMENTAL
PROJECTS PROJECTS DISTRICT FUNDS FUNDS
$ $ $ 7,251,434 $ $ 31,564,305
- 2,783,279
5,529,061 18,969,870
1,355,094 2,620,703
- 1,660,154
1,177,021 2,347,729
- 207,533
- - 645,022
15,955 28,680 17,776 280,510
- - 1,154 8,392
159,121 165,758 596,885
175,076 7,280,114 8,245,864 61,684,382
- - - 359,848
567,911
378,771
3,018,389
193,702
1,132,671
593,251
- 136,298
77,209 1,795,017
793,284 6,632,790
- 5,215,401
1,498,584
862,832
2,027,555
1,787,868
884,508
- 594,690
973,372 5,268,065
- 8,139 685,317
- - 3,349,211 - 3,349,211
8,000,794 586,279 - 628,019 17,852,536
- - 1,524,955 9,101,988
64,493 18,282 1,267,863 5,610,851
8,065,287 604,561 3,349,211 5,272,841 69,548,054
(7,890,211) (604,561) 3,930,903 2,973,023 (7,863,672)
3,285,000 - - 7,765,000
30,907 - 407,917
- 4,849 4,849
3,588,000 2,960,098 17,004,152
(4,047,906) (6,893,983) (18,212,322)
6,903,907 (4,047,906) (3,929,036) 6,969,596
(986,304) (604,561) (117,003) (956,013) (894,076)
8,133,806 1,452,886 5,465,595 13,672,386 93,874,101
$ 7,147,502 $ 848.3 5 -$ 5.348. 992 $ 12,716,373 $ 92,980. 225
21
CITY OF SOUTHLAKE, TEXAS EXHIBIT 6
RECONCILIATION OF THE STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES OF
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2011
Net change in fund balances-total governmental funds $ (894,076)
Amounts reported for governmental activities in the statement of activities
are different because:
Governmental funds report capital outlays as expenditures. However,
in the statement of activities the cost of those assets is allocated over
their estimated useful lives and reported as depreciation expense. This is
the amount of capital assets recorded in the current period.
(Does not include$208,177 allocated from internal service fund). 17,677,552
Depreciation expense on capital assets is reported in the statement of activities but
does not require the use of current financial resources. Therefore,depreciation
expense is not reported as expenditures in the governmental funds.
(Does not include$442,706 allocated from internal service fund). (5,167,858)
The issuance of long-term debt(e.g. bonds)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.Also,governmental funds
report the effect of issuance costs, premiums,discounts,and similar items when
debt is first issued,whereas the amounts are deferred and amortized in the
statement of activities.This amount is the net effect of the following items:
o Bond proceeds (7,765,000)
o Bond premiums (407,917)
o Debt issuance costs 146,027
o Repayments 9,101,988
o Amortization of deferred charges (127,005)
o Amortization of premiums 102,822
o Amortization of deferred loss
on refunding (260,422)
790,493
Current year changes in the long-term liability for compensated absences do not require
the use of current financial resources;and therefore,are not reported as expenditures
in governmental funds. (53,181)
Current year changes in accrued interest payable do not require the use of current
financial resources;and therefore,are not reported as expenditures
in governmental funds. (173,366)
Internal service funds are used by management to charge the costs of certain
activities,such as fleet management,to individual funds. The net loss
of the internal service fund is allocated entirelyto governmental activities. 1,570,011
Governmental funds do not recognize assets contributed by developers. However,
in the statement of activities the fair market value of those assets are
recognized as revenue,then allocated over their estimated useful lives and
reported as depreciation expense. 2,309,613
Loss on disposal of capital assets results in a decrease in net assets, but the
net effect is not reported in governmental funds. (14,460)
Certain revenues in the government-wide statement of activities that do not
provide current financial resources are not reported as revenue in the
governmental funds. 32,098
Change in net assets of governmental activities $ 16,076,826
The Notes to Financial Statements are
an integral part of this statement.
22
PROPRIETARY FUND
FINANCIAL STATEMENTS
I
CITY OF SOUTHLAKE, TEXAS EXHIBIT 7
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
SEPTEMBER 30, 2011
BUSINESS-TYPE GOVERNMENTAL
ACTIVITIES ACTIVITIES
WATERAND SEWER VEHICLE REPLACEMENT
ENTERPRISE INTERNAL SERVICE
FUND FUND
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 8,572,169 $ 3,374,558
Investments 702,530 727,162
Receivables,net of allowance for uncollectibles:
Trade accounts 2,428,316 -
Unbilled trade accounts 1,277,108 -
Interest 7,354 4,340
Special assessments 1,632 -
Prepaid expenses 628
Restricted assets
Cash restricted for capital 19,548,340
Investments restricted for customer meter deposits 178,801
Investments restricted for capital 4,866,498
Total current assets 37,583,376 4,106,060
NON-CURRENT ASSETS
Capital assets
Land and improvements 14,633,263 -
Buildings and improvements 935,501
Distribution system 111,221,196
Equipment 1,647,392 -
Vehicles 507,041 3,311,698
Capacity rights 9,190,988 -
Construction in progress 8,111,275
Total capital assets 146,246,656 3,311,698
Less:accumulated depreciation (43,669,568) (2,157,215)
Capital assets,net of accumulated depreciation 102,577,088 1,154,483
Deferred charges
Bond issuance costs,net of amortization 727,835
Total deferred charges 727,835
Total non-current assets 103,304,923 1,154,483
TOTAL ASSETS $ 140,888,299 $ 5,2 00,543
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES
Accounts payable $ 1,304,336 $ -
Accrued liabilities 229,094
Accrued interest 286,102
Current portion of general obligation debt 3,188,248
Current portion of contract obligation debt 305,000
Current portion of revenue bonds 230,000
Current portion of compensated absences 74,514
Current portion of deferred loss on refunding (181,488)
Current portion of deferred revenue 5,000
Current portion of bond premiums 43,556
Payable from restricted assets:
Customer meter deposits 178,801
Total current liabilities 5,663,163
NON-CURRENT LIABILITIES
Deferred revenue 259,568
Contract revenue obligations 1,755,000
General obligation debt 41,529,358
Bond premiums 584,666
Revenue bonds 5,345,000
Deferred loss on refunding (773,543)
Total non-current liabilities 48,700,049
TOTAL LIABILITIES 54,363,212
NET ASSETS
Invested in capital assets,net of related debt 68,911,163 1,154,483
Unrestricted 17,613,924 4,106,060
TOTAL NET ASSETS $ 86.525.087 $ 5,260.543
The Notes to Financial Statements are
an integral part of this statement.
23
CITY OF SOUTHLAKE, TEXAS EXHIBIT 8
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET ASSETS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2011
BUSINESS-TYPE GOVERNMENTAL
ACTIVITIES ACTIVITIES
WATER AND SEWER VEHICLE REPLACEMENT
ENTERPRISE INTERNAL SERVICE
FUND FUND
OPERATING REVENUES
Charges for sales and services:
Water, sewer and garbage $ 22,550,002 $ -
Service charges 21,054 -
Miscellaneous 42,530 -
Total operating revenues 22,613,586 -
OPERATING EXPENSES:
Personnel services 2,348,760 -
Contractual services 1,133,094 -
Lease payments 1,265 21,000
Supplies 90,300 -
Utilities 7,734,229 -
Administrative 72,402 -
Maintenance 2,010,891 -
Professional benefits 23,444 -
Depreciation and amortization 4,001,086 442,456
Total operating expenses 17,415,471 463,456
OPERATING INCOME(LOSS) 5,198,115 (463,456)
NON-OPERATING REVENUES (EXPENSES)
Gain on sale of capital assets - 26,741
Interest income 123,805 6,726
Interest expense (3,309,180) -
Total non-operating revenues (expenses) (3,185,375) 33,467
INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS 2,012,740 (429,989)
CAPITAL CONTRIBUTIONS AND TRANSFERS
Capital contributions-property owners 1,059,423 -
Contributions-impact fees 373,855 -
Transfers from other funds - 2,000,000
Transfers to other funds (791,830) -
Total capital contributions and transfers 641,448 2,000,000
CHANGE IN NET ASSETS 2,654,188 1,570,011
NET ASSETS, BEGINNING OF YEAR 83,870,899 3,690,532
NET ASSETS, END OF YEAR $ 86,525,087 $ 5,260,543
The Notes to Financial Statements are
an integral part of this statement.
24
CITY OF SOUTHLAKE, TEXAS EXHIBIT 9
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2011
BUSINESS-TYPE GOVERNMENTAL
ACTIVITIES ACTIVITIES
WATERANDSEWER VEHICLE REPLACEMENT
ENTERPRISE INTERNAL SERVICE
FUND FUND
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers and users $ 23,555,707 $
Cash payments to suppliers (11,609,217) (21,000)
Cash payments to employees (2,336,518)
Net cash provided by(used in)operating activities 9,609,972 (21,000)
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Capital expenditures (3,115,798) (202,357)
Principal payments on bonds (3,674,520)
Bond issue costs (65,992)
Proceeds from issuance of bonds 3,365,000
Premium on the issuance of bonds 31,740
Interest paid (3,339,241) -
Proceeds from sale of capital assets - 26,741
Contributions-impact fees 373,855 -
Net cash(used in)capital and related financing activities (6,424,956) (175,616)
CASH FLOWS FROM NON-CAPITAL
FINANCING ACTIVITIES
Transfers(to)from other funds (791,830) 2,000,000
Net cash provided by(used in)non-capital
financing activities (791,830) 2,000,000
CASH FLOWS FROM INVESTING ACTIVITIES
Net sales of investments 15,453,472 873,608
Interest received 188,085 2,780
Net cash provided by investing activities 15,641,557 876,388
NET CHANGE IN CASH AND CASH EQUIVALENTS 18,034,743 2,679,772
CASH AND CASH EQUIVALENTS,BEGINNING OF YEAR 10,085,766 694,786
CASH AND CASH EQUIVALENTS,END OF YEAR $ 28,120,509 $ 3,374,558
RECONCILIATION TO STATEMENT OF NET ASSETS
Cash and cash equivalents $ 8,572,169 $ 3,374,558
Cash restricted for capital 19,548,340 -
Total cash and cash equivalents $ 28,120,509 $ 3,374,558
RECONCILIATION OF OPERATING INCOME(LOSS)TO NET CASH
PROVIDED BY (USED IN)OPERATING ACTIVITIES
Operating income(loss) $ 5,198,115 $ (463,456)
Adjustments to reconcile operating income(loss)
to net cash provided by(used in)operating activities:
Depreciation and amortization 4,001,086 442,456
Decrease(increase)in assets
Receivables 957,640 -
Increase in liabilities
Payables and accruals (539,063)
Customer deposits (7,806)
Net cash provided by(used in)operating activities $ 9,609,972 $ (21,000)
NON-CASH FINANCING ACTIVITIES:
Contributions of capital assets from developers $ 1,059,423 $
The Notes to Financial Statements are
an integral part of this statement.
25
I
FIDUCIARY FUND
FINANCIAL STATEMENTS
I
CITY OF SOUTHLAKE, TEXAS EXHIBIT 10
CASH ESCROW AGENCY FUND
STATEMENT OF FIDUCIARY NET ASSETS
SEPTEMBER 30, 2011
Agency Fund
Cash
Escrow
ASSETS
Cash and cash equivalents $ 44,144
Investments 23,902
Accrued interest receivable 54
TOTAL ASSETS $ 68,100
LIABILITIES
Due to builders $ 68,100
TOTAL LIABILITIES $ 68,100
The Notes to Financial Statements are
an integral part of this statement.
26
I
NOTES TO FINANCIAL STATEMENTS
I
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General Statement
The City of Southlake (the City) operates under a Home Rule Council — Manager form of
government. All powers of the City are vested in an elected council, which enables local
legislation, adopts budgets, determines policies and appoints the City Manager. The City
Manager is responsible for executing the laws and administering the government of the City.
The accounting and reporting policies of the City relating to the funds included in the
accompanying basic financial statements conform to accounting principles generally accepted in
the United States of America applicable to state and local governments. Generally accepted
accounting principles for local governments include those principles prescribed by the
Governmental Accounting Standards Board (GASB), the American Institute of Certified Public
Accountants in the publication entitled Audits of State and Local Governmental Units and by the
Financial Accounting Standards Board (when applicable). As allowed in Section P80 of GASB's
Codification of Governmental Accounting and Financial Reporting Standards, the City has elected
not to apply Financial Accounting Standards Board Statements and Interpretations, Accounting
Principles Board Opinions, and Accounting Research Bulletins of the Committee of Accounting
Procedure issued after November 30, 1989. The more significant accounting policies of the City
are described below.
Financial Reporting Entity
The City is governed by an elected mayor and a six-member council and has the authority to
make decisions, appoint administrators and managers, and significantly influence operations. It
also has the primary accountability for fiscal matters. Therefore, the City is a financial reporting
entity as defined by the Governmental Accounting Standards Board ("GASB") in its Statement
No. 14, "The Financial Reporting Entity", as amended by GASB 39 "Determining Whether Certain
Organizations Are Component Units".
Under GASB 14 component units are organizations for which the City is financially accountable
and all other organizations for which the nature and significance of their relationship with the City
are such that exclusion would cause the reporting entity's financial statements to be misleading or
incomplete. Financial accountability exists if the City appoints a voting majority of an
organization's governing board and is either able to impose its will on that organization or there is
a potential for the organization to provide specific financial benefits to, or impose specific financial
burdens on, the City. The City may be financially accountable for governmental organizations
with a separately elected governing board, a governing board appointed by another government,
or a jointly appointed board that is fiscally dependent on the City. The financial statements of the
component units may be discretely presented in a separate column from the primary government
or blended with the financial statements of the primary government. GASB 39 added clarification
to GASB 14 by including entities which meet all three of the following requirements:
1. The economic resources received or held by the separate organization are entirely for the
direct benefit of the primary government, its component units, or its constituents.
2. The primary government, or its component units, is entitled to, or has the ability to
otherwise access, a majority of the economic resources received or held by the separate
organization.
27
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED
Financial Reporting Entity—Continued
3. The economic resources received or held by an individual organization that the specific
primary government, or its component units, is entitled to, or has the ability to otherwise
access, are significant to that primary government.
Based on these criteria the financial information of the following entities has been blended within
the reporting entity. Individual financial statements are not available for these component units.
Southlake Parks Development Corporation (the Corporation) - The Corporation is a nonprofit
industrial development corporation formed in January 1994 under the Development
Corporation Act of 1979. The Corporation is organized exclusively to act on behalf of the City
for the financing, development and operation of parks and recreation facilities. The affairs of
the Corporation are managed by a seven member board of directors, of which four are
members of the City Council. The annual corporate budget and issuance of debt must be
approved by the City Council. The Corporation is reported as if it were part of the primary
government as the City Council has sufficient representation on the Board to allow complete
control over the Corporation's activities.
Southlake Tax Increment Financing District (the TIF) - The TIF was formed to finance and
make public improvements, under the authority of the Tax Increment Financing Act. The TIF
is governed by a twelve member board of directors consisting of the eight members
appointed by the City Council, and one member each appointed by Carroll Independent
School District, Tarrant County, Tarrant County Junior College District, and the Tarrant
County Hospital District Board of Directors. The TIF is reported as if it were a part of the
primary government as the City Council has sufficient representation on the board to allow for
complete control over the TIF's activities.
Southlake Crime Control and Prevention District (the District) —The District was formed under
Chapter 363 of the Texas Local Government Code, the Crime Control and Prevention Act.
The District is organized exclusively to act on behalf of the City for the financing,
development and crime control throughout the City. The District is governed by a seven
member board appointed by the City Council. The annual budget and issuance of debt must
be approved by the City Council. The District is reported as a part of the primary government
as the City Council acts as the governing body for the District.
Basis of Presentation
The government-wide financial statements (the statement of net assets and the statement of
activities) report information on all of the activities of the City, except for fiduciary funds. The
effect of interfund activity, within the governmental and business-type activities columns, has
been removed from these statements. Governmental activities, which normally are supported by
taxes and intergovernmental revenues, are reported separately from business-type activities,
which rely to a significant extent on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given
program are offset by program revenues. Direct expenses are those that are clearly identifiable
with a specific program.
28
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED
Basis of Presentation—Continued
Program revenues include 1) charges to customers or applicants who purchase, use, or directly
benefit from goods, services, or privileges provided by a given program and 2) operating or
capital grants and contributions that are restricted to meeting the operational or capital
requirements of a particular program. Taxes and other items not properly included among
program revenues are reported instead as general revenues.
Fund Financial Statements:
The City segregates transactions related to certain functions or activities in separate funds in
order to aid financial management and to demonstrate legal compliance. Separate
statements are presented for governmental funds and proprietary funds. These statements
present each major fund as a separate column in the fund financial statements; all non-major
funds are aggregated and presented in a single column.
Governmental funds are those funds through which most governmental functions typically are
financed. The measurement focus of governmental funds is on the sources, uses and
balances of current financial resources.
Governmental Funds
The City reports the following major governmental funds:
General Fund-
The General Fund is the general operating fund of the City. It is used to account for all financial
resources not accounted for in other funds. All general tax revenues and other receipts that are
not restricted by law or contractual agreement to some other fund are accounted for in this fund.
General operating expenditures, fixed charges and capital improvement costs that are not paid
through other funds are paid from the General Fund.
General Obligation Debt Service Fund-
The General Obligation Debt Service Fund is used to account for the accumulation of financial
resources for the payment of principal, interest and related costs on general long-term debt paid
primarily from taxes levied by the City. The fund balance of the General Obligation Debt Service
Fund is restricted to signify the amounts that are restricted exclusively for debt service
expenditures.
General Capital Projects Fund-
The General Capital Projects Fund is used to account for resources used for the acquisition
and/or construction of capital facilities by the City, except those financed by proprietary funds and
not accounted for by another capital projects fund.
Crime Control District-
The Crime Control District Special Revenue Fund was established to account for the operations
of the Crime Control District, which was established for the financing and development of crime
control within the City. The Crime Control Fund is funded primarily through the receipt of
municipal sales taxes.
29
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED
Basis of Presentation—Continued
Southlake Parks Development Corporation Capital Projects Fund-
The Southlake Parks Development Corporation Capital Projects Fund is utilized to fund the
acquisition and construction of park recreational facilities as approved by the SPDC board of
directors. The fund has been financed through the issuance of general obligation debt.
Crime Control District Capital Projects Fund-
The Crime Control District Capital Projects Fund is utilized to account for the acquisition and
construction of capital assets as approved by the District's board of directors. The fund has been
funded primarily through the issuance of general obligation debt.
Tax Increment Financing District-
The Tax Increment Financing District Fund ("TIF") was established to account for the general
operations of the TIF, which was formed to finance and make public improvements. The TIF is
funded primarily through the assessment of ad valorem taxes.
In addition, the City reports the following non-major governmental funds:
Special Revenue Funds — The City's Special Revenue Funds are used to account for revenue
sources that are committed or restricted to expenditures for specified purposes, as follows:
Police Fund-
The Police Fund was established to account for the resources required to be utilized by the police
department.
Parks and Recreation Fund-
The Parks and Recreation Fund was established to account for resources restricted for use by
the parks and recreation department.
Parks Dedication Fund-
The Parks Dedication Fund was established to account for resources restricted for use by the
parks department. The primary source of revenue for the Parks Dedication Fund is user charges
for the use of City parks.
Southlake Parks Development Corporation-
The Southlake Parks Development Corporation Fund ("SPDC") was established to account for
the general operations of the non-profit corporation established to finance, develop and operate
park and recreational facilities. The SPDC is funded primarily through the receipt of municipal
sales taxes.
Hotel Occupancy-
The Hotel Occupancy Tax Fund accounts for all revenues and expenditures relating to the hotel
occupancy tax received by the City.
30
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED
Basis of Presentation—Continued
Storm Water Utility-
The Storm Water Utility Fund is used to account for fees collected for the purpose of improving,
upgrading and maintaining the City's drainage system.
Court Security Fund-
The Court Security Fund is used to account for Municipal Court fees assessed to provide for court
security.
Court Technology Fund-
The Court Technology Fund is used to account for Municipal Court fees assessed to provide for
court technology.
Library Fund-
The Library Fund was established to account for resources donated for use by City library
services.
Red Light Camera Fund-
The Red Light Camera Fund is used to account for fees assessed for red light violations captured
through the City's camera monitoring system.
Storm Water Maintenance Fund-
The Storm Water Maintenance Fund is used to account for the maintenance on storm water
infrastructure.
Oil and Gas Fund-
The Oil and Gas Fund is used to account for permit fees and the related expenditures for oil and
gas drilling.
Southlake Parks Development Corporation Debt Service Fund-
The Southlake Parks Development Corporation Debt Service Fund is utilized to account for the
accumulation of financial resources, primarily transfers from other funds, for the payment of long-
term principal and interest costs associated with the financing of improvements of the Southlake
Parks Development Corporation.
Capital Projects Funds — The City's Capital Projects Funds are utilized to account for financial
resources to be used for the acquisition or construction of specified capital improvements (other
than those financed by proprietary funds). Such resources are derived from proceeds of general
obligation debt, other sources designated for improvements and interest earned on such
proceeds. The City's non-major Capital Projects Fund is as follows:
Tax Increment Financing District Capital Projects Fund-
The Tax Increment Financing District Capital Projects Fund is utilized to fund the acquisition and
construction of public improvements as approved by the TIF board of directors. The fund has
been financed through the issuance of general obligation debt.
31
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED
Basis of Presentation—Continued
Proprietary Funds-
Proprietary Funds are accounted for using the economic resources measurement focus and the
accrual basis of accounting. The accounting objectives are determinations of net income,
financial position and cash flow. All assets and liabilities are included in the Statement of Net
Assets.
The City reports the following major proprietary fund:
Water and Sewer Enterprise Fund-
The Water and Sewer Enterprise Fund is used to account for the acquisition, operation and
maintenance of a municipal water and sewer utility, supported primarily by user charges to the
public.
Additionally, the City reports an Internal Service Fund which is used to account for vehicle
replacement provided to departments of the City.
Proprietary funds distinguish operating revenues and expenses from non-operating 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. Operating
expenses for the proprietary funds include the cost of personnel and contractual services,
supplies and depreciation on capital assets. All revenues and expenses not meeting this
definition are reported as non-operating revenues and expenses.
The City also presents one agency fund, the Cash Escrow Agency Fund. This fund is custodial in
nature and does not involve measurement of results of operations. Financial statements for the
Cash Escrow Agency Fund are prepared on the accrual basis of accounting.
Measurement Focus and Basis of Accounting
Measurement focus refers to what is being measured; basis of accounting refers to when
revenues and expenditures are recognized in the accounts and reported in the financial
statements. Basis of accounting relates to the timing of the measurement made, regardless of
the measurement focus applied.
The government-wide statements and fund financial statements for proprietary and fiduciary
funds are reported using the accrual basis of accounting. The government-wide and proprietary
fund financial statements are prepared using the economic resources measurement focus;
however, the fiduciary funds have no measurement focus. The economic resources
measurement focus means all assets and liabilities (whether current or non-current) are included
in the statement of net assets and the operating statements present increases (revenues) and
decreases (expenses) in net total assets. Under the accrual basis of accounting, revenues are
recognized when earned, including unbilled water and sewer services which are accrued.
Expenses are recognized at the time the liability is incurred.
Governmental fund financial statements are reported using the current financial resources
measurement focus and are accounted for using the modified accrual basis of accounting. Under
the modified accrual basis of accounting, revenues are recognized when susceptible to accrual;
i.e., when they become both measurable and available.
32
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED
Measurement Focus and Basis of Accounting—Continued
"Measurable" means the amount of the transaction can be determined and "available" means
collectible within the current period or soon enough thereafter to be used to pay liabilities of the
current period. The City considers all revenues as available if they are collected within 60 days
after year end. Expenditures are recorded when the related fund liability is incurred, except for
unmatured interest on general long-term debt which is recognized when due, and certain
compensated absences and claims and judgments which are recognized when the obligations are
expected to be liquidated with expendable available financial resources.
Property taxes, sales taxes, franchise taxes and interest are susceptible to accrual. Other
receipts become measurable and available when cash is received by the City and are recognized
as revenue at that time.
Cash, Cash Equivalents and Investments
In accordance with GASB Statement No. 31, the City's general policy is to report money market
investments and short-term participating interest-earning investment contracts at amortized cost
and to report nonparticipating interest-earning investment contracts using a cost-based measure.
However, if the fair value of an investment is significantly affected by the impairment of the credit
standing of the issuer or by other factors, it is reported at fair value. All other investments are
reported at fair value unless a legal contract exists which guarantees a higher value. The term
"short-term" refers to investments, which have a remaining term of one year or less at the time of
purchase. The term "nonparticipating" means that the investment's value does not vary with
market interest rate changes.
The City's cash and cash equivalents are defined as cash on hand, demand deposits, and short-
term investments with original maturities of three months or less from the date of acquisition for
classification in the statement of cash flows for proprietary fund types.
The City pools idle cash from all funds for the purpose of increasing income through coordinated
investment activities. As of September 30, 2011, the investments held by the City had a
remaining maturity of greater than one year from purchase and accordingly are carried at fair
value. Interest earnings are allocated to the respective funds based upon each fund's relative
balance in the pool.
Cash and cash equivalents and investments reported as restricted are restricted for the
acquisition and construction of capital assets, and for utility deposits held by the City.
Property Taxes
The City's property tax is levied each October 1 on the assessed value listed as of the prior
January 1 for all real and certain personal property located within the City. Appraised values are
established by the Central Appraisal District of Tarrant County at 100% of estimated market value
and certified by the Appraisal Review Board. The assessed value upon which the 2011 levy was
based on was $5,409,662,010. Taxes are due on October 1 and are delinquent after the
following January 31.
The City is permitted by Article XI, Section 5 of the State of Texas Constitution to levy taxes up to
$2.50 per $100 of assessed valuation for general governmental services, including the payment
of principal and interest on general obligation long-term debt. The combined tax rate to finance
general governmental services including the payment of principal and interest on long-term debt
for the year ended September 30, 2011 was $0.462 per$100 of assessed valuation.
33
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED
Property Taxes—Continued
In Texas, countywide central appraisal districts are required to assess all property within the
appraisal district on the basis of 100% of its appraised value and are prohibited from applying any
assessment ratios. The value of property within the appraisal district must be reviewed every five
years; however, the City may, at its own expense, require annual reviews of appraised values.
The City may challenge appraised values established by the appraisal district through various
appeals and, if necessary, legal action. Under this legislation, the City continues to set tax rates
on City property. However, if the effective tax rate, excluding tax rates for bonds and other
contractual obligations, adjusted for new improvements, exceeds the rate for the previous year by
more than 8%, qualified voters of the City may petition for an election to determine whether to
limit the tax rate to no more than 8% above the tax rate of the previous year.
Interfund Receivables and Payables
Activities between funds that are representative of lending/borrowing arrangements outstanding
at the end of the fiscal year are referred to as "due to/from other funds."
Any residual balances outstanding between the governmental activities and business-type
activities are reported in the government-wide financial statements as "internal balances".
Transactions Between Funds
Interfund services provided and used are accounted for as revenues, expenditures or expenses.
Transactions that constitute reimbursements to a fund for expenditures/expenses initially made
from it that are properly applicable to another fund, are recorded as expenditures/expenses in the
reimbursing fund and as a reduction of expenditures/expenses in the fund reimbursed. All other
interfund transactions, except interfund services provided and used and reimbursements, are
recorded as transfers.
Restricted Resources
When both restricted and unrestricted resources are available for use, it is the City's policy to use
restricted first, then unrestricted resources as required.
Inventories
Inventories are stated at cost (first-in, first-out) and are determined annually by taking a physical
inventory. Inventory in the general fund consists of gasoline and supplies held for consumption
and is reported on the consumption method. Under the consumption method the cost is recorded
as an expenditure at the time individual inventory items are utilized.
Prepaid Items
Certain payments reflect costs applicable to future periods and are recorded as prepaid in the
government-wide and fund financial statements. These items consist principally of postage and
building deposits.
Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets, are reported
in the applicable governmental or business-type activities columns in the government-wide
financial statements and in the fund financial statements for proprietary funds. All capital assets
are valued at historical cost or estimated historical cost if actual historical cost is not available.
Donated assets are valued at fair market value on the date donated.
34
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED
Capital Assets—Continued
The costs of normal repairs and maintenance that do not add to the value of the asset or
materially extend the asset lives are not capitalized. Renewals and betterments are capitalized.
Interest has not been capitalized during the construction period on property, plant and equipment.
Assets capitalized have an original cost of $5,000 or more and over one year of useful life.
Depreciation has been calculated on each class of depreciable property using the straight-line
method. Estimated useful lives are as follows:
Buildings 20- 50 Years
Water and Sewer distribution system 35- 50 Years
Water hydrants 10-15 Years
Water tanks 35 Years
Computer equipment 5 Years
Heavy equipment and vehicles 10- 20 Years
Light vehicles 2- 10 Years
Vehicles 5 Years
Improvements 25 Years
Infrastructure 10 Years
The street network is not depreciated. The City has elected to use the modified approach in
accounting for its street infrastructure. The modified approach allows governments to report as
expenses in lieu of depreciation, infrastructure expenditures which maintain the asset but do not
add to or improve the asset. Additions and improvements to the street network are capitalized.
The City uses an asset management system to rate street condition and quantify the results of
maintenance efforts.
The City has established the Vehicle Replacement Internal Service Fund to account for all City-
owned vehicles. Charges for use of the vehicle in the form of lease payments are made by the
City departments to the Vehicle Replacement Internal Service Fund to provide for future
acquisitions and replacement of City-owned vehicles.
Vacation and Sick Leave (Compensated Absences)
City employees earn vacation and sick leave, which may either be taken or accumulated, up to
certain amounts, until paid upon retirement or termination. Upon termination or retirement, an
employee is reimbursed up to a maximum number of hours of vacation pay and sick leave based
upon the years of service. All vacation and sick pay is accrued in the government-wide and
proprietary fund financial statements. A liability for these amounts is reported in the governmental
funds only if they have matured.
Long-Term Obligations
In the government-wide financial statements and proprietary fund financial statements, long-term
debt and other long-term obligations are reported as liabilities in the applicable governmental
activities, business-type activities, or proprietary fund statement of net assets. Bond premiums
and discounts, as well as issuance costs and any deferred loss on the refunding of bonds are
amortized over the life of the bonds using the effective 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.
35
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED
Long-Term Obligations—Continued
In the fund financial statements, governmental fund types recognize bond premiums and
discounts, as well as bond issuance costs, during the current period. The face amount of debt
issued is reported as other financing sources. Premiums and discounts received on debt
issuances are reported as other financing sources or uses. Issuance costs, whether or not
withheld from the actual debt proceeds received, are reported as debt service expenditures.
Fund Equity
The City has adopted the provisions of GASB Statement No. 54, Fund Balance Reporting and
Government Fund Type Definitions. The objective of the statement is to enhance the usefulness
of fund balance information by providing clearer fund balance classifications that can be more
consistently applied and by clarifying the existing government fund type definitions. The
statement establishes fund balance classifications that comprise a hierarchy based primarily on
the extent to which a government is bound to observe constraints imposed upon the use of the
resources reported in governmental funds. Fund balance classifications, under GASB 54 are
Nonspendable, Restricted, Committed, Assigned, and Unassigned. These classifications reflect
not only the nature of funds, but also provide clarity to the level of restriction placed upon fund
balance. Fund balance can have different levels of constraint, such as external versus internal
compliance requirements. The General Fund should be the only fund that reports a positive
unassigned balance. In all other funds, unassigned is limited to negative residual fund balance.
In accordance with GASB Statement No. 54, the City classifies governmental fund balances as
follows:
1. Nonspendable fund balance — includes amounts that are not in a spendable form or are
required to be maintained intact (example— inventory or permanent funds).
2. Restricted fund balance — includes amounts that can be spent only for the specific
purposes stipulated by external resource providers either constitutionally or through
enabling legislation (example—court technology and court security funds).
3. Committed fund balance — includes amounts that can only be used for specific purposes
determined by City Council (example— reforestation and park dedication).
4. Assigned fund balance — comprises amounts intended to be used by the City for specific
purposes. Intent can be expressed by the City Council or their designee. In governmental
funds other than the general fund, assigned fund balance represents the amount that is
not restricted or committed. This indicates that resources in other governmental funds
are, at a minimum, intended to be used for the purpose of that fund (example — Facility
Maintenance and Strategic Initiative Fund).
5. Unassigned fund balance — is the residual classification of the general fund and includes
all amounts not contained in other classifications.
In accordance with GASB 54, the City has also adopted the following policies:
Committed Fund Balance - The City Council is the City's highest level of decision-making
authority and approval by resolution is required to establish, modify, or rescind a fund
balance commitment. The resolution must either be approved or rescinded, as applicable,
prior to the last day of the fiscal year. The amount subject to the constraint may be
determined in the subsequent period.
Assigned Fund Balance - The City Council has authorized the City's Finance Director as the
official authorized to assign fund balance to a specific purpose as approved by this fund
balance policy.
36
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED
Fund Equity—Continued
Unassigned Fund Balance - It is the goal of the City to maintain a fund balance in the General
Fund, equal to a minimum of 15% of General Fund budgeted operating expenditures, with the
optimum goal of 25%. The City considers a balance of less than 15% to be cause for
concern, barring unusual or deliberate circumstances.
It is the goal of the City to maintain 60 days of working capital in the Enterprise Fund, with the
optimum goal of 90 days of working capital.
The City shall also maintain all Reserve funds for all statutorily required reserve funds to
guarantee debt service.
Order of Expenditure of Funds - When multiple categories of fund balance are available for
expenditures, the City will start with the most restricted category and spend those funds first
before moving to the next category with available funds (restricted, committed, assigned and
unassigned).
During fiscal year 2006, the City began designating funds for strategic initiatives. The source of
these funds is reserves in excess of 25% of general fund expenditures. The funds will be used
for one-time high impact projects involving infrastructure maintenance, community enhancement
and capital acquisition; and are reported as assigned fund balance in the general fund.
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 accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements, and the reported amounts of
revenues and expenses/expenditures during the reporting period. Actual results could differ from
those estimates.
37
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 2. CASH AND INVESTMENTS
The funds of the City must be deposited and invested under the terms of a contract, contents of which
are set out in the Depository Contract Law. The depository bank places approved pledged securities
for safekeeping and trust with the City's agent bank in an amount sufficient to protect City funds on a
day-to-day basis during the period of the contract. The pledge of approved securities is waived only
to the extent of the depository bank's dollar amount of Federal Deposit Insurance Corporation (FDIC)
insurance.
At September 30, 2011 the carrying amount of the City's deposits was $60,563,583 and the bank
balance was $63,945,711. As of September 30, 2011, none of the City's deposits were
uncollateralized.
Legal and contractual provisions governing deposits and investments:
The Public Funds Investment Act (Government Code Chapter 2256) contains specific provisions in
the areas of investment practices, management reports and establishment of appropriate policies.
Among other things, it requires the City to adopt, implement, and publicize an investment policy. That
policy must address the following areas: (1) safety of principal and liquidity, (2) portfolio
diversification, (3) allowable investments, (4) acceptable risk levels, (5) expected rates of return, (6)
maximum allowable stated maturity of portfolio investments, (7) maximum average dollar-weighted
maturity, allowed based on the stated maturity date for the portfolio, (8) investment staff quality and
capabilities, (9) and bid solicitation preferences for certificates of deposit. Statutes and the City's
investment policy authorized the City to invest in the following investments as summarized in the
table below:
Maximum Maximum
Authorized Maximum Percentage Investment
Investment Type Maturity of Portfolio In One Issuer
U.S. Government Securities 5 years 100% None
Commercial Paper 270 days 20% None
Eligible Investment Pools 365 days 100% None
The Act also requires the City to have independent auditors perform test procedures related to
investment practices as provided by the Act. The City is in substantial compliance with the
requirements of the Act and with local policies.
Cash and investments as of September 30, 2011 are classified in the accompanying financial
statements as follows:
Primary Government:
Cash and cash equivalents $ 62,314,611
Investments 34,993,720
Restricted cash and cash equivalents 27,125,549
Restricted investments 7,837,292
Total primary government 132,271,172
Fiduciary Funds:
Cash 44,144
Investments 23,902
Total fiduciary funds 68,046
Total cash and investments $ 132,339,218
38
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 2. CASH AND INVESTMENTS—CONTINUED
Cash and investments as of September 30, 2011 consist of the following:
Cash on hand $ 3,437
Deposits with financial institutions 60,563,583
Investments 71,772,198
Total cash and investments $ 132,339,218
Disclosures relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of
an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its
fair value to changes in market interest rates. One of the ways that the City manages its exposure to
interest rate risk is by investing mainly in investment pools which purchase a combination of shorter
term investments with an average maturity of less than 60 days, thus reducing the interest rate risk.
The City monitors the interest rate risk inherent in its portfolio by measuring the weighted average
maturity of its portfolio. The City has no specific limitations with respect to this metric.
As of September 30, 2011, the City had the following investments:
Weighted
Average
Investment Type Amount Maturity
Government agency securities $ 16,646,569 200 days
TexStar 14,182,464 48 days
TexPool 14,734,819 44 days
Certificates of Deposit 18,208,346 71 days
Commercial Paper 8,000,000 236 days
Total $ 71,772,198
As of September 30, 2011 the City did not invest in any securities which are highly sensitive to
interest rate fluctuations.
Disclosures relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder
of the investment. This is measured by the assignment of a rating by a nationally recognized
statistical rating organization. Presented below is the minimum rating required by (where applicable)
the Public Funds Investment Act, the City's investment policy, or debt agreements, and the actual
rating as of year-end for each investment type.
Minimum Rating as
Legal of Year
Investment Type Amount Rating End
Government agency securities $ 16,646,569 N/A Not rated
TexStar 14,182,464 N/A AAAm
TexPool 14,734,819 N/A AAAm
Certificates of Deposit 18,208,346 N/A AAAm
Commercial Paper 8,000,000 N/A Aa3
Total $ 71,772,198
39
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 2. CASH AND INVESTMENTS—CONTINUED
Concentration of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in any
one issuer. As of September 30, 2011, investments other than external investment pools that
represent 5% or more of the City's investments are as follows.
Issuer Investment Type Reported Amount
FHLMC Government agency securities $ 7,000,000
FNMA Government agency securities 6,170,000
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial
institution, a government will not be able to recover its deposits or will not be able to recover collateral
securities that are in the possession of an outside party. The custodial credit risk for investments is
the risk that, in the event of the failure of the counterparty to a transaction, a government will not be
able to recover the value of its investment or collateral securities that are in the possession of another
party. The Public Funds Investment Act and the City's investment policy do not contain legal or policy
requirements that would limit the exposure to custodial credit risk for deposits or investments, other
than the following provision for deposits: The Public Funds Investment Act requires that a financial
institution secure deposits made by state or local governmental units by pledging securities in an
undivided collateral pool held by a depository regulated under state law (unless so waived by the
governmental unit).
The market value of the pledged securities in the collateral pool must equal at least the bank balance
less the FDIC insurance at all times.
As of September 30, 2011, none of the City's cash deposits were uncollateralized.
Investment in State Investment Pools
The City is a voluntary participant in two investment pools: TexStar and TexPool.
The State Comptroller of Public Accounts exercises responsibility over TexPool. This oversight
includes the ability to significantly influence operations, designation of management, and
accountability for fiscal matters. Additionally, the State Comptroller has established an advisory
board composed of both participants in TexPool and other persons who do not have a business
relationship with TexPool. TexPool operates in a manner consistent with the SEC's Rule 2a7 of the
Investment Company Act of 1940. TexPool uses amortized costs rather than market value to report
net assets to compute share prices. Accordingly, the fair value of the position in TexPool is the same
as the value of TexPool shares.
TexStar is administered by First Southwest Asset Management, Inc. and JPMorgan Chase. Together
these organizations bring to the TexStar program the powerful partnership of two leaders in financial
services with a proven and noted track record in local government investment pool management.
TexStar is a local government investment pool created under the Interlocal Cooperation Act
specifically tailored to meet Texas state and local government investment objectives of preservation
of principal, daily liquidity, and competitive yield. TexStar uses amortized costs rather than market
value to report net assets to compute share prices. Accordingly, the fair value of the position in
TexStar is the same as the value of TexStar shares.
40
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 3. RECEIVABLES
Receivables at September 30, 2011, for the government's individual major, non-major, internal
service, and fiduciary funds in the aggregate, including the applicable allowances for uncollectible
accounts, consist of the following:
Southlake Parks
General Development Crime
Obligation General Crime Corporation Control District
Debt Capital Control Capital Capital
General Service Projects District Projects Projects
Receivables:
Property taxes $ 492,578 $ 196,497 $ $ - $
Sales taxes 1,706,686 - 799,323
Franchise taxes 384,815 - -
Accounts - 1,337 1,028
Special
assessments - - - - - -
Interest 65,606 6,593 11,959 9,359 2,031 561
Other 98,072 - - - - -
Gross
receivables 2,747,757 203,090 13,296 808,682 3,059 561
Less:allowance 281,340 110,117 - - - -
Net total
receivables $ 2,466,417 $ 92,973 $ 13,296 $ 808,682 $ 3,059 561
Tax Non-
Increment Major Water
Financing Govern- and Internal
District mental Sewer Service Agency Total
Receivables:
Property taxes $ $ - $ $ $ $ 689,075
Sales taxes 882,573 3,388,582
Franchise taxes - 384,815
Accounts 167,963 3,969,081 4,139,409
Special
assessments - 1,632 1,632
Interest 1,541 6,659 7,354 4,340 54 114,516
Other - 177,615 - - 275,687
Gross
receivables 1,541 1,234,810 3,978,067 4,340 54 8,993,716
Less:allowance - - 263,657 - 655,114
Net total
receivables $ 1,541 $ 1,234,810 $3,714,410 $ 4,340 $ 54 $ 8,340,143
The Water and Sewer Fund accounts receivable include unbilled charges for services rendered
through September 30, 2011 of$1,277,108 .
41
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 4. CAPITAL ASSETS
Capital asset activity for the year ended September 30, 2011, was as follows:
Beginning Capital Sales or Adjustments/ Ending
Balance Acquisitions Disposals Transfers Balance
Governmental Activities:
Capital assets not being depreciated:
Land $ 81,651,610 $ 344,347 $ $ 1,029,749 $ 83,025,706
Street infrastructure 175,548,115 809,277 4,012,505 180,369,897
Construction-in-progress 18,141,972 16,430,501 (16,772,912) 17,799,561
Total capital assets not
being depreciated 275,341,697 17,584,125 (11,730,658) 281,195,164
Capital assets being depreciated:
Land improvements 635,115 99,230 1,293,997 2,028,342
Buildings and building improvements 62,386,104 31,630 923,020 63,340,754
Public art 316,595 - - 316,595
Office equipment 1,805,703 19,291 1,824,994
Communications equipment 2,714,525 - 119,303 2,833,828
Field equipment 755,812 71,013 (17,627) - 809,198
Heavy equipment 1,506,818 496,943 (145,750) 1,858,011
Computer equipment 1,005,801 168,023 1,173,824
Computer software 3,247,379 91,720 - 3,339,099
Vehicles 7,475,779 453,380 (124,395) 122,704 7,927,468
Drainage 37,261,924 1,155,988 - 38,417,912
Bridges,road signs,and fiber
optic lines 1,076,650 28,701 1,154,964 2,260,315
Park improvements 8,305,054 - 6,899,030 15,204,084
Pathways 7,072,577 14,589 1,198,349 8,285,515
Total capital assets being depreciated 135,565,836 2,611,217 (287,772) 11,730,658 149,619,939
Accumulated depreciation:
Land improvements (539,732) (43,808) - (336) (583,876)
Buildings and building improvements (6,359,549) (1,532,032) - (7,891,581)
Public art (3,638) (31,660) (35,298)
Office equipment (298,366) (97,382) (395,748)
Communications equipment (2,267,672) (239,963) - (2,507,635)
Field equipment (538,789) (92,891) 14,739 (616,941)
Heavy equipment (1,015,077) (135,153) 139,750 (1,010,480)
Computer equipment (502,654) (180,007) - (682,661)
Computer software (1,701,736) (592,510) (2,294,246)
Vehicles (4,239,470) (773,764) 118,823 (4,894,411)
Drainage (10,464,276) (981,456) - - (11,445,732)
Bridges,road signs,and fiber
optic lines (817,267) (91,817) 336 (908,748)
Park improvements (4,064,059) (554,908) - (4,618,967)
Pathways (2,663,054) (263,213) (2,926,267)
Total accumulated depreciation (35,475,339) (5,610,564) 273,312 (40,812,591)
Total capital assets being depreciated,net 100,090,497 (2,999,347) (14,460) 11,730,658 108,807,348
Governmental activities capital assets,net $375,432,194 $14,584,778 $(14,460) $ - $390,002,512
42
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 4. CAPITAL ASSETS—CONTINUED
Beginning Capital Sales or Adjustments/ Ending
Balance Acquisitions Disposals Transfers Balance
Business Type Activities:
Capital assets not being depreciated:
Land $ 14,471,242 $ 162,021 $ $ - $ 14,633,263
Construction-In-Progress 7,596,050 2,711,334 (2,196,109) 8,111,275
Total capital assets not
being depreciated 22,067,292 2,873,355 (2,196,109) 22,744,538
Capital assets being depreciated:
Buildings and building improvements 887,424 - 48,077 935,501
Equipment 1,664,392 - (17,000) - 1,647,392
Vehicles 329,881 255,160 (78,000) 507,041
Capacity rights 9,190,988 - - 9,190,988
Distribution system 107,886,940 1,186,224 - 2,148,032 111,221,196
Total capital assets being depreciated 119,959,625 1,441,384 (95,000) 2,196,109 123,502,118
Accumulated depreciation:
Buildings and building improvements (434,526) (29,516) - - (464,042)
Equipment (679,877) (144,958) 17,000 (807,835)
Vehicles (286,449) (37,489) 78,000 (245,938)
Capacity rights (2,784,938) (183,820) - (2,968,758)
Distribution system (35,637,619) (3,545,376) - (39,182,995)
Total accumulated depreciation (39,823,409) (3,941,159) 95,000 - (43,669,568)
Total capital assets being depreciated,net 80,136,216 (2,499,775) - 2,196,109 79,832,550
Business type activities capital assets,net $102,203,508 $ 373,580 $ - $ - $ 102,577,088
Depreciation expense was charged as a direct expense to functions of the primary government as
follows:
Governmental activities:
General government $ 1,024,870
Public safety 1,064,623
Public works 1,899,438
Culture and recreation 1,621,633
Total depreciation expense-
governmental activities $ 5,610,564
Business-type activities:
Water and Sewer $ 3,941,159
NOTE 5. LONG-TERM DEBT
The City issues general obligation bonds, combination tax and revenue certificates of obligation and
tax notes to provide for the acquisition and construction of major capital facilities and infrastructure.
Combination tax and revenue certificates of obligation are issued for both governmental and
business-type activities. General obligation bonds, governmental revenue bonds and tax notes
pledge the full faith and credit of the City. Combination tax and revenue certificates of obligation are
payable from the net revenues of the water and sewer system and general debt service tax.
43
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 5. LONG-TERM DEBT—CONTINUED
In May 2011, the City issued $4,480,000 of Series 2011 A, Tax and Waterworks and Sewer System
(limited pledge) certificates of obligation bonds. The debt was issued to pay the costs of various
general capital project improvements. The obligations are payable over the next 7 years.
In May 2011, the City issued $3,365,000 of Series 2011 B, Tax and Waterworks and Sewer System
(limited pledge) certificates of obligation bonds, of which all was included as business-type activities.
The debt was issued to pay the costs of various water and sewer capital improvements. The
obligations are payable over the next 20 years.
In May 2011, the City issued $3,285,000 of Series 2011C, Tax and Waterworks and Sewer System
(limited pledge) certificates of obligation bonds. The debt was issued to pay the costs of various
general capital project improvements. The obligations are payable over the next 20 years.
General obligation bonds, combination certificates of obligation, tax notes and governmental revenue
bonds are as follows as of September 30, 2011:
Final Interest Business-
General Obligation Bonds and Certificates of Obligation Maturity Rates Governmental Type
$9,605,000 Series 2002,General Obligation Refunding 2018 1.65-4.35% $ 3,190,000 $
$30,275,000 Series 2004,General Obligation Refunding 2025 4.0-5.22% 27,230,000
$3,025,000 Series 2004,Tax and Waterworks and Sewer
System Revenue Certificates of Obligation 2023 2.0-5.0% 2,245,000 -
$35,700,000 Series 2005,General Obligation
Refunding Bonds 2026 4.2% 11,040,614 20,775,026
$6,075,000 Series 2006,Combination Tax and Waterworks
and Sewer System Revenue Certificates of Obligation 2026 3.75-4.375% 4,445,000
$6,540,000 Series 2007,Combination Tax and Waterworks
and Sewer System Revenue Certificates of Obligation 2018 4.0-5.0% 4,470,000
$14,015,000 Series 2008,Combination Tax and Waterworks
and Sewer System Revenue Certificates of Obligation 2028 3.5-4.625% 6,193,985 6,604,800
$24,835,000 Series 2009,Combination Tax and Waterworks
and Sewer System Revenue Certificates of Obligation 2029 2.0-5.0% 15,515,000 6,040,000
$26,730,000 Series 2010,General Obligation
Refunding Bonds 2023 3.0-4.0% 16,007,082 6,132,780
$15,745,000 Series 2010,Tax and Waterworks and Sewer
System(Limited Pledge)Certificates of Obligation 2030 3.0-4.25% 6,695,000 5,165,000
$4,480,000 Series 2011A,Tax and Waterworks and Sewer
System(Limited Pledge)Certificates of Obligation 2018 2.00-5.00% 4,480,000 -
$3,365,000 Series 2011 B,Tax and Waterworks and Sewer
System(Limited Pledge)Certificates of Obligation 2031 2.00-4.125% - 3,365,000
$ 101,511,681 $ 48,082,606
44
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 5. LONG-TERM DEBT—CONTINUED
Final Interest Business-
Governmental Revenue Bonds Maturity Rates Governmental Type
$9,220,000 Series 1997,Sales Tax and Revenue Bonds,
Refunding and Improvements 2021 3.50-5.38% $ 1,550,000 $
$1,155,000 Series 2005,SPDC Taxable Sales 2011 5.00% 45
Refunding Bonds
$17,695,000 Series 2005,SPDC Refunding Bonds 2027 4.30% 14,130,000
$4,425,000 Series 2006,Sales Tax and Revenue Bonds 2027 3.75-4.375% 3,560,000
$15,745,000 Series 2010,Tax and Waterworks and Sewer
System(Limited Pledge)Certificates of Obligation 2030 3.00-4.25% 3,165,000
$3,285,000 Series 2011C,Tax and Waterworks and Sewer
System(Limited Pledge)Certificates of Obligation 2031 2.00-4.125% 3,285,000
$ 25,690,045 $
The City issues revenue bonds to make improvements to the water and sewer system. Revenue bonds
are payable solely from the net revenues of the water and sewer system. Revenue bonds and
certificates of obligation outstanding as of September 30, 2011 are as follows:
Revenue Bonds and Combination Tax and Final Interest Business-
Revenue Certificates of Obligation Maturity Rates Governmental Type
$2,965,000 Series 2004-A,Tax and Waterworks and Sewer
System Revenue Certificates of Obligation 2023 2.0-5.0% $ - $ 2,210,000
The City has entered into various contractual agreements to unconditionally finance the principal and
interest or a fixed percentage of principal and interest of Trinity River Authority (TRA) Contract Revenue
Bonds. Under the agreements, the TRA utilized the bond proceeds to administer and construct various
sewer and wastewater treatment projects on the City's behalf. Such agreements provide the City title to
the assets upon retirement of the debt or capacity rights in the use of constructed assets. The City has
included in its financial statements its proportionate share of these obligations and its investment in
these assets as capacity rights. Contract revenue obligations at September 30, 2011 consist of the
following:
Final Business-
Contract Revenue Obligations Maturity Governmental Type
Series 2001,TRA-Denton Creek Wastewater Pressure
Interceptor-Refunding 2017 $ - $ 2,060,000
45
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 5. LONG-TERM DEBT—CONTINUED
The following is a summary of long-term transactions for the year ended September 30, 2011:
Amount
Beginning Ending Due within
Balance Additions Reductions Balance One year
Governmental activities:
General obligation bonds and
certificates of obligation $104,818,714 $ 4,480,000 $ (7,787,033) $101,511,681 $ 8,721,753
Sales tax revenue bonds 23,720,000 3,285,000 (1,314,955) 25,690,045 1,180,045
Bond premiums(discounts) 1,890,488 407,917 (102,822) 2,195,583 173,570
Deferred loss on refunding (3,687,855) - 260,422 (3,427,433) (258,726)
Total bonds payable 126,741,347 8,172,917 (8,944,388) 125,969,876 9,816,642
Compensated absences 878,971 53,181 932,152 83,893
Total governmental activities $127,620,318 $ 8,226,098 $ (8,944,388) $126,902,028 $ 9,900,535
The general fund has been used to liquidate capital lease liabilities with respect to acquisitions of
governmental capital assets and has also typically been used in prior years to liquidate the liability for
compensated absences.
Amount
Beginning Ending Due within
Balance Additions Reductions Balance One year
Business-type activities:
Revenue bonds and certificates
of obligation $ 49,996,226 $ 3,365,000 $ (3,068,620) $ 50,292,606 $ 3,418,248
Contract revenue obligations 2,665,900 - (605,900) 2,060,000 305,000
Bond premiums 639,046 31,740 (42,564) 628,222 43,556
Deferred loss on refunding (1,136,519) - 181,488 (955,031) (181,488)
Total bonds payable 52,164,653 3,396,740 (3,535,596) 52,025,797 3,585,316
Unearned revenue 272,214 - (7,646) 264,568 5,000
Compensated absences 62,272 12,242 - 74,514 74,514
Total business-type activities $ 52,499,139 $ 3,408,982 $ (3,543,242) $ 52,364,879 $ 3,664,830
46
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 5. LONG-TERM DEBT—CONTINUED
The annual aggregate maturities for each bond type are as follows:
General Obligation Bonds and Certificates of Obligation
Governmental Activities
Fiscal Year Ending
September 30, Principal Interest Total
2012 $ 8,721,753 $ 4,210,317 $ 12,932,070
2013 8,708,552 3,854,440 12,562,992
2014 8,684,610 3,514,795 12,199,405
2015 9,028,069 3,153,042 12,181,111
2016 7,696,156 2,811,613 10,507,769
2017-2021 29,332,351 9,784,321 39,116,672
2022-2026 24,918,370 3,967,405 28,885,775
2027-2031 4,421,820 300,180 4,722,000
Total $ 101,511,681 $ 31,596,113 $ 133,107,794
Sales Tax Revenue Bonds
Governmental Activities
Fiscal Year Ending
September 30, Principal Interest Total
2012 $ 1,180,045 $ 1,100,467 $ 2,280,512
2013 1,235,000 1,023,965 2,258,965
2014 1,285,000 973,347 2,258,347
2015 1,345,000 919,719 2,264,719
2016 1,395,000 862,944 2,257,944
2017-2021 7,920,000 3,390,225 11,310,225
2022-2026 8,610,000 1,582,581 10,192,581
2027-2031 2,720,000 221,039 2,941,039
Total $ 25,690,045 $ 10,074,287 $ 35,764,332
Revenue Bonds and Certificates of Obligation
Business-Type Activities
Fiscal Year Ending
September 30, Principal Interest Total
2012 $ 3,418,248 $ 2,009,395 $ 5,427,643
2013 3,975,794 1,835,987 5,811,781
2014 4,405,390 1,667,291 6,072,681
2015 4,591,931 1,482,288 6,074,219
2016 4,698,844 1,293,376 5,992,220
2017-2021 16,487,649 4,043,702 20,531,351
2022-2026 7,822,270 1,870,788 9,693,058
2027-2031 4,892,480 375,925 5,268,405
Total $ 50,292,606 $ 14,578,752 $ 64,871,358
47
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 5. LONG-TERM DEBT-CONTINUED
Contract Revenue Obligations
Business-Type Activities
Fiscal Year Ending
September 30, Principal Interest Total
2012 $ 305,000 $ 92,967 $ 397,967
2013 320,000 78,432 398,432
2014 335,000 62,956 397,956
2015 350,000 46,250 396,250
2016 365,000 28,375 393,375
2017 385,000 9,625 394,625
Total $ 2,060,000 $ 318,605 $ 2,378,605
In previous years, the City has legally defeased certain outstanding general obligation and revenue
debt by placing funds into irrevocable trusts pledged to pay all future debt service payments of the
refunded debt. Accordingly, a liability for the defeased debt issues is not included in the City's
financial statements. As of September 30, 2011, the following outstanding bonds were legally
defeased:
Series Type Amount
1994 Sales Tax Revenue Bonds $ 670,000
$ 670,000
NOTE 6. INTERFUND TRANSFERS
All interfund transfers between the various funds are approved supplements to the operations of
those funds. Individual fund transfers for fiscal year 2011 were as follows:
Transfer In Transfer Out Amount Purpose
Internal service fund General fund $ 2,000,000 To fund vehicle purchases
General capital projects fund General fund 120,000 To fund bronze statues at various roundabout
intersections
General capital projects fund General fund 2,500,000 To establish a project fund for a multi-purpose
facility
General capital projects fund General fund 300,000 To fund lighted signs of Southlake Blvd
SPDC Capital Projects Fund General fund 213,000 To supplement the cost of the Bicentennial Park
project
General fund Non major governmental funds 29,501 Fund indirect charges
General fund Non major governmental funds 110,623 Fund attractive spaces&future art projects
General fund Non major governmental funds 50,740 Fund indirect charges
Non major governmental funds Non major governmental funds 150,000 To fund various stormwater maintenance
General obligation debt service fund Non major governmental funds 193,895 For debt service and indirect charges
General fund TIF District operating fund 250,000 To fund indirect charges
General obligation debt service fund TIF District operating fund 3,797,906 To fund the debt repayment for bonds issued for
TIF projects
General fund Non major governmental funds 174,126 To fund indirect charges
SPDC capital projects fund Non major governmental funds 3,100,000 To assist with the funding of large park projects
Non major governmental funds Non major governmental funds 2,810,098
To pay the principal and interest on debt incurred
General fund Crime control district operating fund 163,427 To fund indirect charges
General obligation debt service fund Crime control district operating fund 1,974,006 To fund bonds issued on TIF's behalf
SPDC capital projects fund Non major governmental funds 200,000 To fund major park improvements for Koalty Park
&Bob Jones Park-South Playground
SPDC capital projects fund Non major governmental funds 75,000 To fund major park improvements,signage&
amenities
General fund Water and sewer fund 791,830 Fund indirect charges
$ 19,004,152
48
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 7. RETIREMENT PLAN
Plan Description
The City provides pension benefits for all of its full-time employees through a non-traditional,joint
contributory, hybrid defined benefit plan in the state-wide Texas Municipal Retirement System
(TMRS), an agent multiple-employer public employee retirement system. The plan provisions that
have been adopted by the City are within the options available in the governing state statutes of
TMRS.
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 (200%) of the
employee's accumulated contributions. In addition, the City can grant, as often as annually,
another type of monetary credit referred to as an updated service credit which is a theoretical
amount which, when added to the employee's accumulated contributions and the monetary
credits for service since the plan began, would be the total monetary credits and employee
contributions accumulated with interest if the current employee contribution rate and City
matching percent had always been in existence and if the employee's salary had always been the
average of his/her salary in the last three years that are one year before the effective date. At
retirement, the benefit is calculated as if the sum of the employee's accumulated contributions
with interest and the employer-financed monetary credits with interest were used to purchase an
annuity.
Members can retire at ages 60 and above with 5 or more years of service or with 25 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
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 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
unfunded (overfunded) actuarial liability (asset) over the remainder of the plan's 30-year
amortization period. The projected 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 for budgetary purposes, there is a one-year
delay between the actuarial valuation that serves as the basis for the rate and the calendar year
when the rate goes into effect. (i.e. December 31, 2010 valuation is effective for the rates
beginning January 2012).
Annual Pension Cost
Contributions by the City were $2,193,609 or 13.5% of the covered payroll of$16,272,225 as
required by the actuarial valuation. The total fiscal year 2011 payroll was $16,970,250.
49
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 7. RETIREMENT PLAN —CONTINUED
Annual City pension cost and related information for the last three years is as follows:
SCHEDULE OF ACTUARIAL LIABILITIES AND FUNDING PROGRESS
Actuarial Information: 12/31/2010 12/31/2009 12/31/2008
Actuarial cost method Projected Unit Credit Projected Unit Credit Projected Unit Credit
Amortization method Level% Level% Level%
27.2 years-closed 28.3 years-closed 29 years-closed
Amortization period period period period
10-year smoothed 10-year smoothed
Asset valuation method market market Amortized cost
Assumptions
Investment return 7.0% 7.5% 7.5%
varies by age varies by age varies by age
Projected salary increases and services and services and services
Inflation 3.0% 3.0% 3.0%
Cost-of-living adjustment 1.5%(3.0%CPI) 1.5%(3.0%CPI) 2.1%(3.0%CPI)
City specific assumptions
Payroll growth assumption 3.0% 3.0% 3.0%
Withdrawal rates for male/female Mid-High/Mid Mid-High/Mid Mid-High/Mid
(low,mid/low, mid, mid/high or high)
Schedule of Funding Information
Actuarial valuation date 12/31/10 12/31/09 12/31/08
Actuarial Value of Assets $ 41,253,618 $ 31,327,058 $ 27,171,220
Actuarial Accrued Liability $ 50,923,328 $ 42,184,877 $ 39,252,944
Unfunded (Overfunded)Actuarial
Accrued Liability(UAAL) $ 9,669,710 $ 10,857,819 $ 12,081,724
Funded ratio 81.0% 74.3% 69.2%
Annual Covered Payroll $ 16,272,225 $ 16,655,653 $ 14,968,247
UAAL as a Percentage of Covered Payroll 59.40% 65.20% 80.70%
The City's net pension obligation (NPO) for TMRS at September 30, 2011, 2010 and 2009 is
calculated as follows:
9/30/2011 9/30/2010 9/30/2009
NPO at the beginning of the period $ - $ - $ -
Annual required contribution 2,193,609 2,129,451 2,198,164
Contributions made(100%) 2,193,609 2,129,451 2,198,164
NPO at the end of the period $ - $ - $ -
The City adopted the Updated Service Credit provision in 1992, on a repeating basis. Additionally,
the City adopted annuity increases for its retirees, on a repeating basis in 1992 equal to 70% of the
change in consumer price index.
The City of Southlake is one of 842 municipalities having the benefit plan administered by TMRS.
Each of the 842 municipalities has an annual, individual actuarial valuation performed. All
assumptions for the December 31, 2010 valuations are contained in the 2010 TMRS Comprehensive
Annual Financial Report, a copy of which may be obtained by writing to P.O. Box 149153, Austin,
Texas 78714-9153.
50
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 8. OTHER POSTEMPLOYMENT BENEFITS
Plan Description
The City provides other postemployment benefits (OPEB) in the form of health insurance benefits
through a single-employer defined benefit medical plan. Regular full-time employees retiring from
the City of Southlake have the option to continue medical insurance coverage until the retiree
becomes eligible for Medicare or is eligible to be covered under another medical plan. The City
contributes $125 per month towards the premium for retiree insurance coverage or$225 towards
the premium for retirees and dependents. A third-party administrator is utilized to provide claims
administration and payment of claims. Insurance is purchased to provide specific stop loss and
aggregate stop loss protection.
The Plan does not issue a separate financial report.
Funding Policy
The City passed a resolution in September 2009, electing to participate in the PARS Public
Agencies Post-Retirement Health Care Plan Trust ("the Trust") to fund post-employment benefits
for its employees as specified in the City's policies and/or applicable collective bargaining
agreements. The Trust is a multiple employer trust arrangement established to provide
economies of scale and efficiency of administration to public agencies that adopt it to hold the
assets used to fund its OPEB obligation.
The City has made a determination to fund its annual required contribution. For fiscal year 2011,
the City contributed $180,000 to the Trust.
Annual OPEB Cost and Net OPEB Obligation
The City's annual other postemployment benefit (OPEB) cost (expense) is calculated based on
the annual required contribution of the employer (ARC), an amount actuarially determined in
accordance with the parameters of GASB Statement 45. The ARC represents a level of funding
that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any
unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years on an
open basis. The City's annual OPEB cost and net OPEB obligation (asset) for the prior two years
is shown below:
2011 2010 2009
Annual required contribution $ 155,999 $ 128,502 $ 128,502
Interest on prior year Net OPEB obligation - - -
Adjustment to annual required contribution - - -
Annual OPEB cost 155,999 128,502 128,502
Contributions made 180,000 180,000 128,502
Increase (decrease) in net OPEB obligation (24,001) (51,498) -
Net Obligation (asset) -beginning of year (51,498) -Net Obligation (asset)- end of year $ (75,499) $ (51,498) $ -
Percentage of OPEB costs contributed 115.39% 18.85% 58.40%
51
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 8. OTHER POSTEMPLOYMENT BENEFITS —CONTINUED
Funded Status and Funding Progress—Continued
The funded status of other postemployment benefits as of December 31, 2010, the date of the
latest actuarial valuation, was as follows:
Actuarial accrued liability $ 1,100,940
Actuarial value of plan assets (488,502)
Unfunded actuarial accrued liability $ 612,438
Funded ratio 44.4%
Covered payroll $16,272,225
Unfunded actuarial accrued liability
as a percentage of covered payroll 3.76%
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future. The unfunded
actuarial accrued liability is being amortized assuming 30 level annual payments on an open
basis. Examples include assumptions about future employment, mortality, and the healthcare
cost trend. Amounts determined regarding the funded status of the plan and the annual required
contributions of the employer are subject to continual revisions as actual results are compared
with past expectations and new estimates are made about the future.
Actuarial Methods and Assumptions
Projections of benefits for financial reporting purposes are based on the substantive plan and
include the types of benefits provided at the time of each valuation and the historical pattern of
sharing of benefit costs between the employer and plan members to that point. The actuarial
methods and assumptions used include techniques that are designed to reduce short-term
volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-
term perspective of the calculations.
In the December 31, 2010 actuarial valuation, the projected unit credit cost method was used.
Key actuarial assumptions include: (a) level percent of payroll amortization method; (b) a 6.0%
real rate of investment return; (c) a payroll growth rate for financing the Unfunded Actuarial
Accrued Liability assumed to be 3.0%; (d) a sliding scale of medical inflation from 9.0% in 2011 to
4.5% by 2026; and (e) general inflation assumed to be 3.0%.
NOTE 9. DEFERRED COMPENSATION PLAN
The City offers its employees a deferred compensation plan created in accordance with Internal
Revenue Code Section 457. The plan, available to all City employees, permits them to defer a portion
of their salary until future years. The deferred compensation is not available to employees until
termination, retirement, death, or unforeseeable emergency.
The laws governing 457 plans were changed to state that plans would not be considered eligible
plans unless all assets and income of the plans are held in trust for the exclusive benefit of the
participants and their beneficiaries. The City amended the plan documents to comply with these
requirements.
In accordance with GASB 32, the plans as amended are not included in the City's financial
statements.
52
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 10. RISK FINANCING AND INSURANCE
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; and natural disasters. During the fiscal year
1990, the City joined the Texas Municipal League Workers Compensation Joint Insurance Fund for
risks related to employees. Premiums are paid to the Pool, which retains a limit of loss. Reinsurance
companies insure the risks beyond those limits. The City retains, as a risk, only the deductible
amount of each policy. The City continues to carry commercial insurance with Texas Municipal
League provided by Mutual of Omaha for other risks including general liability, property, and errors
and omissions. There were no significant reductions in coverage in the past year and there were no
settlements exceeding insurance coverage in any of the past three years.
NOTE 11. COMMITMENTS AND CONTINGENCIES
The City has entered into various contracts with the Trinity River Authority (TRA) and other cities.
Terms of the agreements provide the City will pay an amount equal to its proportional share of
maintenance and operations and debt service based upon volumes of wastewater transported,
treated, or disposed of. The City's proportional share of future costs under these contracts is
indeterminable and has not been recorded. Payments to the TRA under these contracts for the year
ended September 30, 2011 were $1,169,897.
The City has authorized various contracts obligating future funds of the City as the contracted
services are performed. Significant amounts unexpended under such contracts at year end are
reflected as reserves for authorized contracts in the applicable funds.
The City has certain claims and litigation pending with respect to matters arising in the normal course
of operations. City management is of the opinion that the settlement of these matters will not have a
material adverse impact on the City's financial statements.
NOTE 12. SUBSEQUENT EVENTS
The City has evaluated all events or transactions that occurred after September 30, 2011 up through
March 30, 2012, the date the financial statements were available to be issued. During this period,
there were no subsequent events requiring disclosure.
53
REQUIRED SUPPLEMENTARY
INFORMATION
I
BUDGETARY COMPARISON
GENERALFUND
I
CITY OF SOUTHLAKE, TEXAS EXHIBIT A-1
GENERAL FUND
BUDGETARY COMPARISON SCHEDULE (GAAP BASIS)
FOR THE YEAR ENDED SEPTEMBER 30, 2011
VARIANCE WITH
BUDGETED AMOUNTS FINAL BUDGET-
POSITIVE
ORIGINAL FINAL ACTUAL (NEGATIVE)
REVENUES
Ad valorem taxes, penalties and interest $ 17,045,152 $ 17,243,864 $ 17,473,558 $ 229,694
Franchise taxes 2,700,576 2,655,881 2,783,279 127,398
Municipal sales and mixed beverage tax 7,521,095 8,120,000 8,796,001 676,001
License, permits and fees 672,300 1,115,500 1,265,609 150,109
Charges for services 1,422,185 1,481,655 1,660,154 178,499
Fines and forfeitures 1,015,000 1,015,000 1,170,708 155,708
Grants 130,020 208,000 207,533 (467)
Interest earned 190,500 105,500 35,993 (69,507)
Miscellaneous 250,000 255,200 272,006 16,806
TOTAL REVENUES 30,946,828 32,200,600 33,664,841 1,464,241
EXPENDITURES
Current:
General government
City secretary/mayor 413,155 409,879 359,848 50,031
City manager's office 556,111 576,156 567,911 8,245
Human resources 403,785 402,278 378,771 23,507
Support services 2,989,786 3,168,948 3,018,389 150,559
Economic development 210,936 210,936 193,702 17,234
Finance 1,137,795 1,139,080 1,132,671 6,409
Municipal court 618,541 624,166 593,251 30,915
Teen court 136,687 145,824 136,298 9,526
Information technology 1,816,644 1,816,644 1,717,808 98,836
Public safety
Police services 5,650,183 5,664,753 5,520,833 143,920
Fire services 5,280,251 5,350,036 5,215,401 134,635
Public safety support 1,535,401 1,535,401 1,498,584 36,817
Building inspection 929,419 890,064 862,832 27,232
Public works
Public works administration 2,296,393 2,294,565 1,944,128 350,437
Streets and drainage 1,618,725 1,674,773 1,608,693 66,080
Planning 977,293 898,981 884,508 14,473
Culture and recreation
Community services 638,369 618,457 594,690 23,767
Parks and recreation 4,462,387 4,417,788 4,294,693 123,095
Library services 663,745 663,912 677,178 (13,266)
TOTAL EXPENDITURES 32,335,606 32,502,641 31,200,189 1,302,452
Excess(deficiency)of revenues over expenditures (1,388,778) (302,041) 2,464,652 2,766,693
OTHER FINANCING SOURCES(USES)
Transfers from other funds 1,326,973 1,570,246 1,570,247 1
Transfers to other funds (2,713,000) (5,133,000) (5,133,000) -
TOTAL OTHER FINANCING SOURCES(USES) (1,386,027) (3,562,754) (3,562,753) 1
NET CHANGE IN FUND BALANCE (2,774,805) (3,864,795) (1,098,101) 2,766,694
FUND BALANCES, BEGINNING OF YEAR 18,146,566 18,146,566 18,146,566 -
FUND BALANCES,END OF YEAR $ 15,371,761 $ 14,281,771 $ 17,048,465 $ 2,766,694
See Notes to Required
Supplementary Information
54
CITY OF SOUTHLAKE, TEXAS EXHIBIT A-2
CRIME CONTROL DISTRICT SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE (GAAP BASIS)
FOR THE YEAR ENDED SEPTEMBER 30, 2011
VARIANCE WITH
BUDGETED AMOUNTS FINAL BUDGET-
POSITIVE
ORIGINAL FINAL ACTUAL (NEGATIVE)
REVENUES:
Municipal sales tax $4,065,675 $4,400,000 $4,644,808 $ 244,808
Interest 20,000 20,000 10,235 (9,765)
TOTAL REVENUES 4,085,675 4,420,000 4,655,043 235,043
EXPENDITURES
Police services 381,312 423,262 318,673 104,589
Excess of revenues
over expenditures 3,704,363 3,996,738 4,336,370 339,632
OTHER FINANCING SOURCES(USES)
Transfers to other funds (2,137,433) (2,137,433) (2,137,433) -
TOTAL OTHER FINANCING
SOURCES (USES) (2,137,433) (2,137,433) (2,137,433) -
Net change in fund balance 1,566,930 1,859,305 2,198,937 339,632
Fund balance at
beginning of year 4,631,858 4,631,858 4,631,858 -
Fund balance at
end of year $6,198,788 $6,491,163 $6,830,795 $ 339,632
See Notes to Required
Supplementary Information
55
CITY OF SOUTHLAKE, TEXAS EXHIBIT A-3
TAX INCREMENT FINANCING DISTRICT SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE (GAAP BASIS)
FOR THE YEAR ENDED SEPTEMBER 30, 2011
VARIANCE WITH
BUDGETED AMOUNTS FINAL BUDGET-
POSITIVE
ORIGINAL FINAL ACTUAL (NEGATIVE)
REVENUES
Ad valorem taxes, penalties and interest $3,067,968 $7,251,435 $7,251,434 $ (1)
Interest 35,000 16,000 28,680 12,680
Total revenues 3,102,968 7,267,435 7,280,114 12,679
EXPENDITURES:
Intergovernmental - 3,349,211 3,349,211 -
Total expenditures - 3,349,211 3,349,211 -
Excess of revenues
over expenditures 3,102,968 3,918,224 3,930,903 12,679
OTHER FINANCING SOURCES(USES)
Transfers to other funds (5,051,629) (4,047,906) (4,047,906) -
Total other financing sources(uses) (5,051,629) (4,047,906) (4,047,906) -
Excess(deficiency)of revenues over
expenditures and other financing uses (1,948,661) (129,682) (117,003) 12,679
Fund balance at
beginning of year 5,465,595 5,465,595 5,465,595 -
Fund balance at
end of year $3,516,934 $5,335,913 $5,348,592 $ 12,679
See Notes to Required
Supplementary Information
56
CITY OF SOUTHLAKE, TEXAS
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
YEAR ENDED SEPTEMBER 30, 2011
Budgetary Data
The City Council adheres to the following procedures in establishing the budgets reflected in the
financial statements:
1. Each year the City Manager is required to submit to the City Council, between sixty and
ninety days prior to the beginning of each fiscal year, a proposed budget for the fiscal year
beginning on the following October 1. The operating budget includes proposed expenditures
and the means of financing them.
2. Public hearings are conducted to obtain taxpayers' comments.
3. Prior to October 1, the budget is legally enacted by the City Council through passage of an
ordinance.
4. Annual budgets are legally adopted for the General Fund, the Tax Increment Financing
District, Crime Control, Parks Dedication, Hotel Occupancy, Storm Water Utility, Red Light
Camera, and Southlake Parks Development Corporation Special Revenue Funds and all
Debt Service Funds on a basis consistent with accounting principles generally accepted in
the United States of America. Formal budgetary integration is not employed for proprietary
funds. However, the City does adopt an annual budget for those funds for managerial control.
Control over expenditures for the capital projects funds are maintained through general
obligation bond indenture agreements, and authorized construction contracts. Accordingly,
formal budgetary integration is not employed for the capital projects funds.
5. During the fiscal year, the City Council may transfer funds allocated to a department to
another department or re-estimate revenues or expenditures. The City Manager may transfer
budgeted funds within a department. Expenditures should not exceed appropriations at the
department level.
6. Budgetary data for the Police, Parks and Recreation, Court Security, Court Technology,
Library, Storm Water Maintenance, Oil and Gas Special Revenue Funds and all Capital
Projects Funds are not presented, as such funds are budgeted over the life of the respective
grant or project, and not on an annual basis. Budgetary information for the Proprietary Funds
have not been presented since reporting on such budgets is not legally required.
7. Expenditures in excess of appropriations for the year ended September 30, 2011 were:
General Fund:
Library Services $(13,266)
57
EXHIBIT A-4
CITY OF SOUTHLAKE, TEXAS
CONDITION RATING OF STREET SYSTEM
SEPTEMBER 30, 2011
CONDITION OF ROADWAY SYSTEM
Index 2010 2007
RCI 6.4 6.5
SDI 9.3 9.3
PQI 8.5 8.3
COMPARISON OF NEEDED-TO-ACTUAL MAINTENANCE/PRESERVATION
Needed Actual Difference
2007 $1,250,000 1,414,597 164,597
2008 $1,250,000 1,068,540 (181,460)
2009 $1,250,000 1,457,572 207,572
2010 $1,250,000 936,158 (313,842)
2011 $1,250,000 1,025,665 22( 4,335)
Total SU50 000 5 902 532 347 468
The City hired a consultant to implement a pavement management system (PMS) to cover all public
streets within the City. The condition of street pavement is measured using the Asphalt Pavement Rating
Form as developed by the Asphalt Institute. The Asphalt Pavement Rating Form is based on a weighted
average of thirteen defects found in pavement surfaces. The consultant conducted a pavement condition
survey on all City owned streets. This consisted of a ride condition or roughness survey, a surface
distress survey and a deflection survey. A present status analysis was conducted using data obtained
from pavement condition survey to determine the Ride Condition Index (RCI and the Surface Distress
Index (SDI). These indices were then combined into the composite Pavement Quality Index (PQI).
Values of PQI can range from 0 to 10. Typical values for a newly constructed pavement range from 9.5
to 10.0. The PQI level at which a pavement becomes in need of rehabilitation is typically in the 5.0 to 7.0
range. It is the City's policy to maintain a PQI of 7.3. Needed maintenance is calculated based upon
inspections and the pavement quality index..
In accordance with GASB Statement No. 34, the City is required to report at least one complete condition
assessment at transition using the modified approach. The condition assessment was completed by the
City and documented that the eligible infrastructure assets are being preserved at or above the condition
level established by the City. A third of the city's public streets will be assessed annually to ensure all
public streets are assessed every three years.
The City calculates needed maintenance of its street system annually. However, the scheduling of these
road projects often crosses fiscal years. Therefore, actual maintenance may be less than the calculated
needed maintenance in one fiscal year and greater than the calculated needed maintenance in the
subsequent fiscal year.
58
I
COMBINING AND INDIVIDUAL FUND
FINANCIAL STATEMENTS AND SCHEDULES
MAJOR GOVERNMENTAL FUNDS
GENERAL OBLIGATION DEBT SERVICE FUND
The General Obligation Debt Service Fund is used to account for the accumulation of resources
for, and the payment of, general obligation bonds and interest from governmental resources.
59
CITY OF SOUTHLAKE, TEXAS EXHIBIT B-1
GENERAL OBLIGATION DEBT SERVICE FUND
BUDGETARY COMPARISON SCHEDULE (GAAP BASIS)
FOR THE YEAR ENDED SEPTEMBER 30, 2011
VARIANCE WITH
BUDGETED AMOUNTS FINAL BUDGET-
POSITIVE
ORIGINAL FINAL ACTUAL (NEGATIVE)
REVENUES:
Ad valorem taxes $ 6,690,951 $ 6,833,000 $ 6,839,313 $ 6,313
Interest 110,000 45,000 49,687 4,687
Total revenues 6,800,951 6,878,000 6,889,000 11,000
EXPENDITURES:
Principal retirement 7,577,067 7,577,067 7,577,033 34
Interest and fiscal charges 4,160,026 4,160,026 4,181,044 (21,018)
Total expenditures 11,737,093 11,737,093 11,758,077 (20,984)
Excess(deficiency)of
revenues over expenditures (4,936,142) (4,859,093) (4,869,077) (9,984)
OTHER FINANCING SOURCES
Transfers from other funds 5,965,807 5,965,807 5,965,807 -
Total other financing sources 5,965,807 5,965,807 5,965,807 -
Excess of revenues and other financing
sources over expenditures 1,029,665 1,106,714 1,096,730 (9,984)
Fund balance, beginning of year 9,266,326 9,266,326 9,266,326 -
Fund balance, end of year $ 10,295,991 $ 10,373,040 $ 10,363,056 $ (9,984)
60
NON-MAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
The Special Revenue Funds are used to account for revenue sources that are legally restricted to
expenditures for specified purposes.
Police Fund-- Established to account for resources required to be utilized by the police department.
Parks and Recreation Fund — Established to account for resources restricted for use by the parks
and recreation department.
Parks Dedication Fund — Established to account for resources restricted for use by the parks
department.
Southlake Parks Development Corporation Special Revenue Fund — Established to account for
the general operations of the non-profit corporation established to finance, develop and operate park
and recreational facilities.
Hotel Occupancy Fund - The Hotel Occupancy Tax Fund accounts for all revenues and
expenditures relating to the hotel occupancy tax received by the City.
Storm Water Utility Fund — This fund is used to account for fees collected for the purpose of
improving, upgrading and maintaining the City's drainage system. The City is mandated by the Texas
Commission on Environmental Quality (TCEQ) to develop and maintain a Storm Water Management
Plan in order to address capacity and quality issues and protect its residents and their properties from
possible flooding and pollution problems. Drainage fees are collected by residents to fund the
activities required to comply with TCEQ regulations.
Court Security Fund — Established to account for municipal court fees assessed to provide for court
security.
Court Technology Fund — Established to account for municipal court fees assessed to provide for
court technology.
Library Fund— Established to account for resources donated for use by library services.
Red Light Camera Fund —The Red Light Camera Fund is used to account for fees assessed for red
light violations captured through the City's camera monitoring system.
Storm Water Maintenance Fund-The Storm Water Maintenance Fund is used to account for the
maintenance on storm water infrastructure.
Oil and Gas Fund- The Oil and Gas Fund is used to account for permits fees and the related
expenditures for oil and gas drilling.
61
DEBT SERVICE FUNDS
The Debt Service Funds are utilized to account for the accumulation of financial resources for, and the
payment of, general long-term debt principal, interest, and related costs arising from the issuance of
bonds.
Southlake Parks Development Corporation Debt Service Fund — Established to accumulate
resources to finance the debt service of debt issues of the Southlake Parks Development
Corporation.
CAPITAL PROJECTS FUNDS
The Capital Projects Funds are utilized to account for financial resources to be used for the acquisition or
construction of specified capital improvements (other than those financed by proprietary funds).
Tax Increment Financing District Capital Projects Fund — The Tax Increment Financing District
capital projects fund was established to account for the financing and construction of projects of the
Tax Increment Financing District.
62
I
CITY OF SOUTHLAKE, TEXAS
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
SEPTEMBER 30, 2011
SPECIAL REVENUE
Southlake
Parks Parks
and Parks Development
Police Recreation Dedication Corporation
ASSETS
Cash and cash equivalents $12,495 $ 26,319 $ 86,120 $ 3,423,269
Investments 4,556 14,049 15,728 2,009,880
Accounts receivable 241 - - 25,637
Sales tax receivable - - - 818,118
Interest receivable 10 32 35 4,622
TOTAL ASSETS $17,302 $ 40,400 $ 101,883 $ 6,281,526
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable $ 6,459 $ - $ - $ 7,592
Accrued liabilities - - - 4,873
Due to other funds - - - -
TOTAL LIABILITIES 6,459 - - 12,465
FUND BALANCES
Restricted for:
Municipal court expenditures - - - -
Debt service - - - -
Capital projects - - - -
Committed for:
Police expenditures 10,843 - - -
Parks and recreation - 40,400 101,883 6,269,061
Storm water expenditures - - - -
Oil and gas drilling - - - -
Library - - - -
TOTAL FUND BALANCES 10,843 40,400 101,883 6,269,061
TOTAL LIABILITIES AND FUND BALANCES $17,302 $ 40,400 $ 101,883 $ 6,281,526
63
EXHIBIT C-1
CONTINUED
SPECIAL REVENUE
Storm
Hotel Water Court Court Red Light
Occupancy Utility Security Technology Library Camera
$ 728,821 $1,549,075 $301,368 $ 188,043 $ 1,597 $ 610,944
387,417 186,154 158,666 106,330 1,968 206,618
- 177,615 - - 215 141,633
64,455 - - - - -
874 420 358 240 4 -
$1,181,567 $1,913,264 $460,392 $ 294,613 $ 3,784 $ 959,195
$ 652 $ 2,157 $ 9,958 $ 2,750 $ - $ 389,191
6,519 4,823 - - - 1,872
- - - 4,038 - -
7,171 6,980 9,958 6,788 - 391,063
- - 450,434 287,825 - -
1,174,396 1,906,284 - - - -
- - - - - 568,132
- - - - 3,784 -
1,174,396 1,906,284 450,434 287,825 3,784 568,132
$1,181,567 $1,913,264 $460,392 $ 294,613 $ 3,784 $ 959,195
64
CITY OF SOUTHLAKE, TEXAS EXHIBIT C-1
NON-MAJOR GOVERNMENTAL FUNDS CONCLUDED
COMBINING BALANCE SHEET
SEPTEMBER 30, 2011
SPECIAL DEBT CAPITAL
REVENUE SERVICE PROJECTS
Southlake Tax TOTAL
Parks Increment NON-MAJOR
Storm Water Oil and Development Financing GOVERNMENTAL
Maintenance Gas Corporation District FUNDS
ASSETS
Cash and cash equivalents $ 195,450 $ 34,535 $ 1,532,425 $ 16,762 $ 8,707,223
Investments 105,276 18,608 - 9,749 3,224,999
Accounts receivable 237 - - 345,578
Sales tax receivable - - - 882,573
Interest receivable - 42 - 22 6,659
TOTAL ASSETS $ 300,963 $ 53,185 $ 1,532,425 $ 26,533 $ 13,167,032
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable $ - $ - $ - $ - $ 418,759
Accrued liabilities 9,775 27,862
Due to other funds - 4,038
TOTAL LIABILITIES 9,775 450,659
FUND BALANCES
Restricted for:
Municipal court expenditures - 738,259
Debt service 1,522,650 - 1,522,650
Capital projects - 26,533 3,107,213
Commited for:
Police expenditures - 578,975
Parks and recreation - 6,411,344
Storm water expenditures 300,963 - 300,963
Oil and gas drilling - 53,185 53,185
Library - - - - 3,784
TOTAL FUND BALANCES 300,963 53,185 1,522,650 26,533 12,716,373
TOTAL LIABILITIES AND
FUND BALANCES $ 300,963 $ 53,185 $ 1,532,425 $ 26,533 13,167,032
65
I
CITY OF SOUTHLAKE, TEXAS
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED SEPTEMBER 30, 2011
SPECIAL REVENUE
Southlake
Parks Parks
and Parks Development
Police Recreation Dedication Corporation
REVENUES
Municipal sales tax $ - $ - $ - $ 4,718,718
Licenses, permits and fees - - 70,462 -
Fines and forfeitures - - - -
Interest 6 - - -
Contributions - 1,154 - -
Miscellaneous - - - 153,824
Total revenues 6 1,154 70,462 4,872,542
EXPENDITURES
Current:
General government
Court technology - - - -
Public safety
Police services - - - -
Cultural and recreation
Parks and recreation - - 5,285 380,251
Library services - - - -
Capital outlay - - - -
Debt service:
Principal retirement - - - -
Interest and fiscal charges - - - -
Total expenditures - - 5,285 380,251
Excess (deficiency)of revenues over
expenditures 6 1,154 65,177 4,492,291
OTHER FINANCING SOURCES (USES)
Proceeds from the sale of property 4,849 - - -
Transfers from other funds - - - -
Transfers to other funds - - (200,000) (6,084,224)
Total other financing sources (uses) 4,849 - (200,000) (6,084,224)
NET CHANGE IN FUND BALANCES 4,855 1,154 (134,823) (1,591,933)
FUND BALANCES (DEFICIT),
BEGINNING OF YEAR 5,988 39,246 236,706 7,860,994
FUND BALANCES, END OF YEAR $ 10,843 $ 40,400 $ 101,883 $ 6,269,061
66
EXHIBIT C-2
CONTINUED
SPECIAL REVENUE
Storm
Hotel Water Court Court Red Light
Occupancy Utility Security Technology Library Camera
$ 810,343 $ - $ - $ - $ - $ -
- 1,275,883 - - - -
- - 35,189 46,787 - 1,095,045
4,084 10,144 - 153 - 2,230
- - - - 11,934 -
814,427 1,286,027 35,189 46,940 11,934 1,097,275
- - - 77,209 - -
- - - 15,765 - 777,519
587,836 - - - - -
- - - - 8,139 -
- 609,659 18,360 - - -
587,836 609,659 18,360 92,974 8,139 777,519
226,591 676,368 16,829 (46,034) 3,795 319,756
(140,124) (394,635) - - - (75,000)
(140,124) (394,635) - - - (75,000)
86,467 281,733 16,829 (46,034) 3,795 244,756
1,087,929 1,624,551 433,605 333,859 (11) 323,376
$ 1,174,396 $ 1,906,284 $ 450,434 $ 287,825 $ 3,784 $ 568,132
67
CITY OF SOUTHLAKE, TEXAS EXHIBIT C-2
NON-MAJOR GOVERNMENTAL FUNDS CONCLUDED
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED SEPTEMBER 30, 2011
SPECIAL DEBT CAPITAL
REVENUE SERVICE PROJECTS
Southlake Tax TOTAL
Parks Increment NON-MAJOR
Storm Water Oil and Development Financing GOVERNMENTAL
Maintenance Gas Corporation District FUNDS
REVENUES
Municipal sales tax $ $ - $ $ $ 5,529,061
Licenses,permits and fees 8,749 1,355,094
Fines and forfeitures - 1,177,021
Interest 963 196 17,776
Contributions - - 1,154
Miscellaneous - 165,758
Total revenues 963 8,945 8,245,864
EXPENDITURES
Current:
General government
Court technology 77,209
Public safety
Police services 793,284
Cultural and recreation
Parks and recreation 973,372
Library services 8,139
Capital outlay 628,019
Debt service:
Principal retirement 1,524,955 - 1,524,955
Interest and fiscal charges - 1,264,930 2,933 1,267,863
Total expenditures - 2,789,885 2,933 5,272,841
Excess(deficiency)of revenues over
expenditures 963 8,945 (2,789,885) (2,933) 2,973,023
OTHER FINANCING SOURCES(USES)
Proceeds from the sale of property - - - 4,849
Transfers from other funds 150,000 2,810,098 2,960,098
Transfers to other funds - (6,893,983)
Total other financing sources(uses) 150,000 2,810,098 (3,929,036)
NET CHANGE IN FUND BALANCES 150,963 8,945 20,213 (2,933) (956,013)
FUND BALANCES(DEFICIT),
BEGINNING OF YEAR 150,000 44,240 1,502,437 29,466 13,672,386
FUND BALANCES,END OF YEAR $ 300,963 $ 53,185 $ 1,522,650 $ 26,533 $ 12,716,373
68
CITY OF SOUTHLAKE, TEXAS EXHIBIT C-3
PARKS DEDICATION SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE (GAAP BASIS)
FOR THE YEAR ENDED SEPTEMBER 30, 2011
VARIANCE WITH
BUDGETED AMOUNTS FINAL BUDGET -
POSITIVE
ORIGINAL FINAL ACTUAL (NEGATIVE)
REVENUES:
Park fees $ 30,000 $ 58,000 $ 70,462 $ 12,462
Interest 5,000 1,500 - (1,500)
Total revenues 35,000 59,500 70,462 10,962
EXPENDITURES:
Parks and recreation - - 5,285 (5,285)
Total expenditures - - 5,285 (5,285)
Excess of revenues over expenditures 35,000 59,500 65,177 5,677
OTHER FINANCING SOURCES (USES):
Transfers to other funds (200,000) (200,000) (200,000) -
Total other financing sources(uses) (200,000) (200,000) (200,000) -
Excess (deficiency)of revenues
and other financing sources over
expenditures and other financing uses (165,000) (140,500) (134,823) 5,677
Fund balance at
beginning of year 236,706 236,706 236,706 -
Fund balance at
end of year $ 71,706 $ 96,206 $101,883 $ 5,677
69
CITY OF SOUTHLAKE, TEXAS EXHIBIT C-4
SOUTHLAKE PARKS DEVELOPMENT CORPORATION
SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE (GAAP BASIS)
FOR THE YEAR ENDED SEPTEMBER 30, 2011
VARIANCE WITH
BUDGETED AMOUNTS FINAL BUDGET-
POSITIVE
ORIGINAL FINAL ACTUAL (NEGATIVE)
REVENUES:
Municipal sales tax $4,094,340 $4,094,340 $4,718,718 $ 624,378
Miscellaneous 153,816 153,816 153,824 8
Interest 105,000 15,000 - (15,000)
Total revenues 4,353,156 4,263,156 4,872,542 609,386
EXPENDITURES
Parks and recreation 456,272 416,247 380,251 35,996
Excess of revenues
over expenditures 3,896,884 3,846,909 4,492,291 645,382
OTHER FINANCING SOURCES(USES):
Transfers to other funds (6,084,224) (6,084,224) (6,084,224) -
Excess (deficiency)of
revenues over expenditures
and other uses (2,187,340) (2,237,315) (1,591,933) 645,382
Fund balance at
beginning of year 7,860,994 7,860,994 7,860,994 -
Fund balance at
end of year $5,673,654 $5,623,679 $6,269,061 $ 645,382
70
CITY OF SOUTHLAKE, TEXAS EXHIBIT C-5
HOTEL OCCUPANCY SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE (GAAP BASIS)
FOR THE YEAR ENDED SEPTEMBER 30, 2011
VARIANCE WITH
BUDGETED AMOUNTS FINAL BUDGET-
POSITIVE
ORIGINAL FINAL ACTUAL (NEGATIVE)
REVENUES:
Municipal sales tax $ 646,313 $ 732,488 $ 810,343 $ 77,855
Interest 5,000 11,000 4,084 (6,916)
Total revenues 651,313 743,488 814,427 70,939
EXPENDITURES:
Parks and recreation 26,475 26,475 587,836 (561,361)
Excess of revenues
over expenditures 624,838 717,013 226,591 (490,422)
OTHER FINANCING SOURCES (USES):
Transfers to other funds - (140,124) (140,124) -
Excess of revenues over
expenditures and other uses 624,838 576,889 86,467 (490,422)
Fund balance at
beginning of year 1,087,929 1,087,929 1,087,929 -
Fund balance at
end of year $1,712,767 $1,664,818 $1,174,396 $ (490,422)
71
CITY OF SOUTHLAKE, TEXAS EXHIBIT C-6
STORM WATER UTILITY SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE (GAAP BASIS)
FOR THE YEAR ENDED SEPTEMBER 30, 2011
VARIANCE WITH
BUDGETED AMOUNTS FINAL BUDGET-
POSITIVE
ORIGINAL FINAL ACTUAL (NEGATIVE)
REVENUES:
Interest $ 17,000 $ 8,500 $ 10,144 $ 1,644
Licenses, permits and fees 1,230,000 1,260,000 1,275,883 15,883
Total revenues 1,247,000 1,268,500 1,286,027 17,527
EXPENDITURES:
Capital outlay 744,929 784,222 609,659 174,563
Excess of revenues
over expenditures 502,071 484,278 676,368 192,090
OTHER FINANCING SOURCES(USES):
Transfers to other funds (393,935) (394,635) (394,635) -
Excess of revenues over
expenditures and other uses 108,136 89,643 281,733 192,090
Fund balance at
beginning of year 1,624,551 1,624,551 1,624,551 -
Fund balance at
end of year $1,732,687 $1,714,194 $1,906,284 $ 192,090
72
CITY OF SOUTHLAKE, TEXAS EXHIBIT C-7
RED LIGHT CAMERA SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE (GAAP BASIS)
FOR THE YEAR ENDED SEPTEMBER 30, 2011
VARIANCE WITH
BUDGETED AMOUNTS FINAL BUDGET-
POSITIVE
ORIGINAL FINAL ACTUAL (NEGATIVE)
REVENUES:
Fines and forfeitures $ 1,075,696 $ 1,200,409 $ 1,095,045 $ (105,364)
Interest 2,500 3,500 2,230 (1,270)
Total revenues 1,078,196 1,203,909 1,097,275 (106,634)
EXPENDITURES:
Public safety 891,203 959,501 777,519 181,982
Total expenditures 891,203 959,501 777,519 181,982
Excess of revenues 186,993 244,408 319,756 75,348
over expenditures
OTHER FINANCING SOURCES (USES)
Transfers to other funds (75,000) (75,000) (75,000) -
Total other financing sources (75,000) (75,000) (75,000) -
Excess of revenues and other financing
sources over expenditures 111,993 169,408 244,756 75,348
Fund balance, beginning of year 323,376 323,376 323,376 -
Fund balance, end of year $ 435,369 $ 492,784 $ 568,132 $ 75,348
73
CITY OF SOUTHLAKE, TEXAS EXHIBIT C-8
SOUTHLAKE PARKS DEVELOPMENT CORPORATION
DEBT SERVICE FUND
BUDGETARY COMPARISON SCHEDULE (GAAP BASIS)
FOR THE YEAR ENDED SEPTEMBER 30, 2011
VARIANCE WITH
BUDGETED AMOUNTS FINAL BUDGET-
POSITIVE
ORIGINAL FINAL ACTUAL (NEGATIVE)
REVENUES:
Interest $ 33,000 $ 16,000 $ - $ (16,000)
Total revenues 33,000 16,000 - (16,000)
EXPENDITURES:
Principal retirement 1,525,000 1,525,000 1,524,955 45
Interest and fiscal charges 1,285,098 1,285,098 1,264,930 20,168
Total expenditures 2,810,098 2,810,098 2,789,885 20,213
Deficiency of revenues over expenditures (2,777,098) (2,794,098) (2,789,885) 4,213
OTHER FINANCING SOURCES:
Transfers from other funds 2,810,098 2,810,098 2,810,098 -
Total other financing sources 2,810,098 2,810,098 2,810,098 -
Excess of revenues and
other financing sources
over expenditures 33,000 16,000 20,213 4,213
Fund balance, beginning of year 1,502,437 1,502,437 1,502,437 -
Fund balance, end of year $1,535,437 $ 1,518,437 $1,522,650 $ 4,213
74
I
AGENCYFUNDS
The Agency Funds are used to account for resources held for others in a custodial capacity. The City
maintains the following Agency Fund:
Cash Escrow Agency Fund - accounts for the receipt and subsequent disbursement of deposits paid to
the City by builders/developers.
75
CITY OF SOUTHLAKE, TEXAS EXHIBIT F-1
CASH ESCROW AGENCY FUND
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2011
Balance at Balance at
Beginning End
of Year Additions Deletions of Year
ASSETS
Cash and cash equivalents $ 19,038 $ 25,106 $ - $ 44,144
Investments 48,907 25,005 23,902
Accrued interest receivable 262 - 208 54
TOTAL ASSETS $ 68,207 $ 25,106 $ 25,213 $ 68,100
LIABILITIES
Due to builders $ 68,207 $ (107) $ - $ 68,100
TOTAL LIABILITIES $ 68,207 $ (107) $ - $ 68,100
76
CITY OF SOUTHLAKE, TEXAS EXHIBIT G-1
COMPARATIVE SCHEDULES OF CAPITAL ASSETS BY SOURCE
SEPTEMBER 30, 2011 AND 2010
2011 2010
General capital assets
Land and improvements $ 100,258,130 $ 90,591,779
Buildings and improvements 63,657,352 62,702,699
Equipment 19,766,422 18,511,817
Infrastructure 229,333,636 220,959,266
Construction in progress 17,799,563 18,141,972
Total capital assets $ 430,815,103 $ 410,907,533
Investment in general capital assets
Capital projects funds $ 316,254,901 $ 294,598,025
General and other fund revenues 75,550,770 79,609,689
Gifts 39,009,432 36,699,819
Total investment in capital assets $ 430,815,103 $ 410,907,533
77
CITY OF SOUTHLAKE, TEXAS EXHIBIT G-2
SCHEDULE OF CHANGES IN CAPITAL ASSETS BY FUNCTION AND ACTIVITY
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011
Capital Capital
Assets Assets
October 1, September 30,
Function and Activity 2010 Additions Deductions 2011
General government $ 186,871,200 $ 290,691 $ - $ 187,161,891
Public safety 42,340,301 1,232,350 (360,637) 43,212,014
Public works 181,696,032 35,445,214 (16,700,048) 200,441,198
Total capital assets $410,907,533 $36,968,255 $ (17,060,685) $ 430,815,103
General Public Public
Government Safety Works Total
Land and improvements $ 2,418,798 $ 4,303,923 $ 93,535,409 $ 100,258,130
Buildings and improvements 25,818,684 33,093,377 4,745,291 63,657,352
Equipment 5,855,769 4,506,670 9,403,983 19,766,422
Infrastructure 153,068,640 114,414 76,150,582 229,333,636
Construction in Progress - 1,193,630 16,605,933 17,799,563
Total $ 187,161,891 $43,212,014 $200,441,198 $ 430,815,103
78
I
STATISTICAL SECTION
STATISTICAL SECTION
This part of the City of Southlake's comprehensive annual financial report presents detailed information as
a context for understanding what the information in the financial statements, notes disclosures, and required
supplementary information says about the City's overall financial health. This information has not been
audited by the independent auditor.
Contents Table #s
Financial Trends 1,2,3&4
These tables contain trend information to help the reader understand how the City's
financial performance and well-being have changed over time.
Revenue Capacity 5,6,7&8
These tables contain information to help the reader assess the City's two most significant
local revenue sources,the property and sales taxes.
Debt Capacity 9, 10, 11 & 12
These tables present information to help the reader assess the affordability of the City's
current levels of outstanding debt and the City's ability to issue additional debt in the future.
Economic and Demographic Information 13&14
These tables offer economic and demographic indicators to help the reader understand
the environment within which the City's financial activities take place.
Operating Information 15, 16&17
These tables contain service and infrastructure data to help the reader understand how the
information in the City's financial report relates to the services the City provides.
Source: Unless otherwise noted,the information in these tables is derived from the comprehensive annual
financial reports for the relevant year. The City implemented GASB Statement 34 in fiscal year 2003:tables
presenting government-wide information include information beginning in that year.
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CITY OF SOUTHLAKE, TEXAS
CHANGES IN NET ASSETS, LAST NINE FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(UNAUDITED)
Fiscal Year
2003 2004 2005 2006 2007
Expenses
Governmental activities:
General government $ 5,933,303 $ 5,587,931 $ 5,926,466 $ 8,465,930 $ 9,833,572
Public safety 10,252,829 10,493,951 10,548,265 10,965,357 11,729,107
Public works 3,348,517 3,318,138 3,470,227 3,707,519 4,813,692
Culture and recreation 3,848,090 3,937,540 4,463,075 5,085,976 5,510,247
Interest on long-term debt 3,448,154 4,916,955 5,003,130 5,052,472 5,804,295
Total governmental activities expenses 26,830,893 28,254,515 29,411,163 33,277,254 37,690,913
Business-type activities:
Water and sewer 13,852,605 13,781,499 14,130,259 16,168,430 14,729,469
Total business-type activities expenses 13,852,605 13,781,499 14,130,259 16,168,430 14,729,469
Total primary government expenses $ 40,683,498 $ 42,036,014 $ 43,541,422 $ 49,445,684 $ 52,420,382
Program Revenues
Governmental activities:
Charges for Services:
General government $ 1,226,438 $ 1,739,515 $ 1,321,236 $ 1,956,949 $ 1,778,215
Public safety 959,855 1,429,962 2,151,270 1,873,524 2,979,947
Public works 97,298 202,153 250,760 411,381 223,329
Culture and recreation 585,276 676,715 752,062 813,837 1,156,965
Operating grants and contributions 212,224 401,339 319,593 459,688 304,246
Capital grants and contributions 284,175 447,270 3,639,953 3,575,240 11,425,990
Total governmental activities program revenues 3,365,266 4,896,954 8,434,874 9,090,619 17,868,692
Business-type activities:
Charges for services:
Water and sewer 14,551,845 13,743,453 16,100,215 20,180,636 15,414,131
Capital grants and contributions 1,368,097 1,642,757 2,471,700 3,510,000 5,589,196
Total business-type activities program revenues 15,919,942 15,386,210 18,571,915 23,690,636 21,003,327
Total primary government program revenues $ 19,285,208 $ 20,283,164 $ 27,006,789 $ 32,781,255 $ 38,872,019
Net(Expenses)Revenue
Governmental activities $(23,465,627) $(23,357,561) $(20,976,289) $(24,186,635) $(19,822,221)
Business-type activities 2,067,337 1,604,711 4,441,656 7,522,206 6,273,858
Total primary government net expenses $(21,398,290) $(21,752,850) $(16,534,633) $(16,664,429) $(13,548,363)
General Revenues
and Other Changes in Net Assets
Governmental activities:
Taxes:
Property taxes $ 16,744,004 $ 18,694,986 $ 19,604,411 $ 21,439,614 $ 24,509,730
Sales taxes 10,299,692 10,788,469 12,503,357 16,040,418 16,931,180
Franchise taxes 1,781,115 1,933,250 2,015,893 1,983,381 2,435,803
Interest on investments 599,276 735,978 860,725 2,591,520 3,598,458
Gain(Loss)on sale of fixed assets 226,162 50,400 (33,071) 35,317 -
Transfers - 1,322,539 - - 275,595
Miscellaneous 653,876 51,512 7,008 166,789 8,688
Total governmental activities 30,304,125 33,577,134 34,958,323 42,257,039 47,759,454
Business-type activities:
Interest on investments 335,487 380,571 412,793 1,024,603 1,183,987
Gain(Loss)on sale of fixed assets - - - 930,138 (3,396)
Transfers (1,322,539) - (275,595)
Miscellaneous
Total business-type activities 335,487 (941,968) 412,793 1,954,741 904,996
Total primary government $ 30,639,612 $ 32,635,166 $ 35,371,116 $ 44,211,780 $ 48,664,450
Change in Net Assets
Governmental activities $ 6,838,498 $ 10,219,573 $ 13,982,034 $ 18,070,404 $ 27,937,233
Business-type activities 2,402,824 662,743 4,854,449 9,476,947 7,178,854
Total primary government $ 9,241,322 $ 10,882,316 $ 18,836,483 $ 27,547,351 $ 35,116,087
Source:Comprehensive Annual Financial Report
Note:Accrual-basis financial information for the city as a whole is only available back to 2003,the year GASB Statement 34 was implemented.
80
TABLE 2
2008 2009 2010 2011
$ 4,406,913 $ 11,068,965 $ 11,814,836 $ 13,754,529
12,770,012 12,920,263 14,885,499 15,144,173
8,669,156 5,840,432 5,767,688 6,279,687
5,911,730 6,439,100 7,287,434 7,897,173
5,506,967 5,854,931 6,515,269 5,638,272
37,264,778 42,123,691 46,270,726 48,713,834
17,689,865 18,066,346 18,948,438 20,724,651
17,689,865 18,066,346 18,948,438 20,724,651
$ 54,954,643 $ 60,190,037 $ 65,219,164 $ 69,438,485
$ 1,340,864 $ 1,949,993 $ 2,476,000 $ 2,616,321
2,843,923 2,633,437 2,706,847 2,818,913
199,833 68,369 240,916 71,129
1,269,571 1,369,725 1,387,558 1,384,823
241,144 239,364 688,803 532,100
5,690,613 1,833,160 5,994,206 2,309,613
11,585,948 8,094,048 13,494,330 9,732,899
18,543,025 19,321,095 18,897,356 22,571,056
3,748,161 2,212,867 2,578,400 1,433,278
22,291,186 21,533,962 21,475,756 24,004,334
$ 33,877,134 $ 29,628,010 $ 34,970,086 $ 33,737,233
$(25,678,830) $(34,029,643) $(32,776,396) $(38,980,935)
4,601,321 3,467,616 2,527,318 3,279,683
$(21,077,509) $(30,562,027) $(30,249,078) $(35,701,252)
$ 28,950,945 $ 30,911,161 $ 32,298,360 $ 31,568,583
18,781,043 17,256,272 17,610,781 18,969,870
2,654,701 2,816,111 2,606,248 2,783,279
3,128,226 1,703,418 414,852 258,556
- 167,127 21,465 26,741
229,436 339,510 596,093 791,830
52,023 341,957 428,804 658,902
53,796,374 53,535,556 53,976,603 55,057,761
594,891 953,739 155,173 123,872
(229,436) (339,510) (596,093) (791,830)
10,989 2,187 71,871 42,463
376,444 616,416 (369,049) (625,495)
$ 54,172,818 $ 54,151,972 $ 53,607,554 $ 54,432,266
$ 28,117,544 $ 19,505,913 $ 21,200,207 $ 16,076,826
4,977,765 4,084,032 2,158,269 2,654,188
$ 33,095,309 $ 23,589,945 $ 23,358,476 $ 18,731,014
81
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CITY OF SOUTHLAKE, TEXAS TABLE 14
PRINCIPAL EMPLOYERS
CURRENT YEAR AND FOUR YEARS AGO
(UNAUDITED)
2011 2007
Percentage of Percentage
Total City of Total City
Employer Employees Employment Employer Employees Employment
Sabre Holdings 2,700 19.58% Sabre Holdings 3,000 18.29%
CISD-Administration Building 1,072 7.77% Carroll ISD 874 5.33%
Verizon Wireless 619 4.49% Tri Dal Ltd. 450 2.74%
Central Market 350 2.54% Verizon Wireless 450 2.74%
City of Southlake 276 2.00% City of Southlake 275 1.68%
Hilton Dallas/Southlake Town Sq 218 1.58% Cheesecake Factory 200 1.22%
Tri Dal Ltd. 194 1.41% Costco Wholesale 180 1.10%
Variosystems Inc. 170 1.23% Hilton/Southlake Town Square 180 1.10%
Cheesecake Factory 161 1.17% Tom Thumb 140 0.85%
Lowe's Home Improvement 145 1.05% Home Depot 131 0.80%
Texas Health Harris Methodist 135 0.98% Variosystems Inc. 130 0.79%
Ameristar Information Network 125 0.91% Dallas Marriott Solana 122 0.74%
Stir Crazy Fresh Asian Grill 120 0.87% Lowe's Home Improvement 115 0.70%
Costco Wholesale 107 0.78% Kohls 100 0.61%
Kroger 100 0.73% Kroger 100 0.61%
Floors Inc. 100 0.73% Steak-n-Shake 100 0.61%
NumbersOnly,Inc. 100 0.73% Eagle Contracting L.P. 100 0.61%
Kohls 100 0.73% Floors Inc. 100 0.61%
Steak-n-Shake 100 0.74% Albertson's 100 0.61%
Wildwood American Grill 94 0.69% Darr Lift 90 0.55%
Buca di Beppo 75 0.46%
Century 21 Worldwide 70 0.43%
Snuffers Restaurant&Bar 70 0.43%
PetsMart 70 0.43%
Re/Max Masters 70 0.43%
Bear Creek Construction, LTD. 60 0.37%
Greater Metroplex Interiors 60 0.37%
Circuit City 55 0.34%
Timarron Country Club 55 0.34%
Ebby Halliday Realtors 51 0.31%
Total 6,986 50.71% Eklund's, Inc. 50 0.30%
IHOP 50 0.30%
Total Southlake Daytime Employees 13,790 Campania Pizza 50 0.30%
Blue Mesa Cafe 50 0.30%
David Winans GMAC Real Estate 50 0.30%
Realty Professionals of Texas 46 0.28%
Jack Edson Realtors 45 0.27%
McAlister's Deli 45 0.27%
Pei Wei Asian Diner 40 0.24%
Kirby's Steakhouse 40 0.24%
X's and O's Sporting Tavern 40 0.24%
The Melting Pot 40 0.24%
The Container Store 40 0.24%
White's Chapel United Methodist 38 0.23%
Michael's 38 0.23%
8,235 50.21%
Total Southlake Daytime Employees 16,402
Note:Information for 2002 was not available at the time,therefore,an alternate year was presented in its place.
Source: Southlake Economic Development
North Central Texas Council of Governments
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