Item 4CCITY OF
SOUTHLAKI
MEMORANDUM
March 13, 2013
To: Shana Yelverton, City Manager
From: Sharen Jackson, Chief Financial Officer
Subject: Approval of the 2012 Comprehensive Annual Financial Report
Action
Requested: Approval of September 30, 2012 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 L.L.P., Certified Public Accountants,
performed the audit for fiscal year 2012. 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: 2012 CAFR
Staff Recommendation: Approval of 2012 Comprehensive Annual Financial
Report
CITY OF SOUTHLAKE, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012
As Prepared By
Sharen Jackson, CPA
Chief Financial Officer
CITY OF SOUTHLAKE, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012
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
14
Statement of Activities
2
15
Fund Financial Statements
Governmental Fund Financial Statements
Balance Sheet
3
16
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Assets
4
18
Statement of Revenues, Expenditures, and Changes in Fund Balance
5
19
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures
and Changes in Fund Balance to the Statement of Activities
6
21
Proprietary Fund Financial Statements
Statement of Net Assets
7
22
Statement of Revenues, Expenses, and Changes in Net Assets
8
23
Statement of Cash Flows
9
24
Fiduciary Fund Financial Statement
Statement of Fiduciary Net Assets
10
25
Notes to the Basic Financial Statements
26
CITY OF SOUTHLAKE, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012
TABLE OF CONTENTS
Exhibit Page
C. REQUIRED SUPPLEMENTARY INFORMATION
Budgetary Comparison Schedule - General Fund
A-1 53
Budgetary Comparison Schedule - Crime Control District Special Revenue Fund
A-2 54
Budgetary Comparison Schedule - Tax Increment Financing District Special
Revenue Fund
A-3 55
Notes to Required Supplementary Information
56
Condition Rating of Street System
A-4 57
D. COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES
Major Governmental Funds
Budgetary Comparison Schedule - General Obligation Debt Service Fund B-1 59
Nonmajor Governmental Funds
Combining Balance Sheet - Nonmajor Governmental Funds
C-1
62
Combining Statement of Revenues, Expenditures, and Changes in Fund Balance -
Nonmajor Governmental Funds
C-2
65
Budgetary Comparison Schedule - Parks Dedication Special Revenue Fund
C-3
68
Budgetary Comparison Schedule - Southlake Parks Development
Corporation Special Revenue Fund
C-4
69
Budgetary Comparison Schedule - Hotel Occupancy Special Revenue Fund
C-5
70
Budgetary Comparison Schedule - Storm Water Utility Special Revenue Fund
C-6
71
Budgetary Comparison Schedule - Red Light Camera Special Revenue Fund
C-7
72
Budgetary Comparison Schedule - Southlake Parks Development Corporation
Debt Service Fund
C-8
73
Agency Funds
Statement of Changes in Assets and Liabilities - Cash Escrow Agency Fund F-1 75
E. Capital Assets Used in the Operation of Governmental Funds
Comparative Schedules of Capital Assets by Source G-1 76
Schedule of Changes in Capital Assets by Function and Activity G-2 77
CITY OF SOUTHLAKE, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012
TABLE OF CONTENTS
Exhibit
Page
III. STATISTICAL SECTION
Table
Net Assets By Component
1
78
Changes in Net Assets
2
79
Fund Balances, Governmental Funds
3
81
Changes in Fund Balances, Governmental Funds
4
82
Assessed Value and Estimated Actual Value of Taxable Property
5
83
Direct and Overlapping Property Tax Rates
6
84
Principal Property Tax Payers
7
85
Ad Valorem Tax Levies and Collection
8
86
Ratio of Outstanding Debt By Type
9
87
Ratio of General Bonded Debt Outstanding
10
89
Direct and Overlapping Governmental Activities Debt
11
90
Pledged -Revenue Coverage
12
91
Demographic and Economic Statistics
13
92
Principal Employers
14
93
Full -Time Equivalent City Government Employees By Function/Program
15
94
Operating Indicators By Function/Program
16
95
Capital Asset Statistics By Function/Program
17
96
INTRODUCTORY SECTION
CITY OF
SOUTHLAKE
9
Finance Department
March 19, 2013
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, 2012. 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. Nonmajor 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.
1400 Main Street, Suite 440, Southlake, TX 76092 (817) 748-8345
Innovation 0 Integrity 0 Accountability 0 Commitment to Excellence 0 Teamwork
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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;
• 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, 2012. 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.
ii
• 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
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
ui
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.
The opening of the Dallas -Fort Worth International Airport in 1974 served as the next
catalyst of growth in the area and Southlake residents adopted a home -rule charter in
April 1987, which created the current council-manager 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.
Single Family Residential Home Permits
160
140
124)
100
W
60
40
24)
0
2008 2009 2010 2011 2012
There were 105 single family
residential permits issued in
Fiscal Year 2012 with an
average new home
construction value, excluding
land value, of more than
$600,000. Residential home
construction has increased as
evidenced by the chart.
1V
Number of Water Customers
9601)
9501)
9401)
SON)
92N)
91 N) -
99flfl
:::V
2006 2099 2010 =: 2012
Water customers
increased from 9,466 in
Fiscal Year 2011 to
9,543 in 2012, while
wastewater customers
increased from 7,361 to
7,522 during the same
year. The chart shows
the five-year trend of
increasing water
customers, the result of
the building permit
activity. The City has
developed master 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
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
2008 2009 2010 2011 2012
■General 13SPDC oCrime
The City of Southlake
experienced an increase
in sales tax collections
during the fiscal year as
indicated on the chart.
Future Development
During 2012, approximately 14 new construction commercial permits were issued by the
City representing over 570,000 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.
v
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 2012, 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 2012 or 2013.
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 Achievement for the year ended September 30, 2011, and believes our
current report conforms to the Certificate of Achievement program requirements, and we
are submitting it to GFOA.
v1
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
Chief Financial Officer
vu
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presenlsd to
City of Southlake
Texas
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
September 30, 2011
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Dff]cers
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.
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CITY OF SOLITHLA K E
ORGANIZATIONAL CHART
SOUTHLAKF
CITIZENS
MAYOR AND
CITY COUNCIL
CITY ATTORNEY — — — CITY MANAGIIt — 1 CITY SECRETARY I
�- — — — — — MUNICIPAL
ASST. CITY
MANAGER I
DPS DIRECTOR
COMMUNITY I I I ECONOMIC II Q
GITYMAN GERI I 'S I TECHNOLOGY
SPRVICES DEVELoPIVIENT I I 1
PUSLDEP�IC SAFETY I I I RESOURCES
� OHUMANTMENT OF S
POLICE I PLANNING & DEVELdPMENT
FIRE,
PUBLIC VL olms
ix
LIST OF PRINCIPAL OFFICIALS
John Terrell Mayor
Brandon Bledsoe Mayor Protein
Pamela Muller Deputy Mayor Protein
Martin Schelling
Council Member
Carolyn Morris
Council Member
Al Zito
Council Member
Jeff Wang
Council Member
Shana K. Yelverton City Manager
Benjamin Thatcher Assistant City Manager
Alison Ortowski Assistant City Manager
Alicia Richardson City Secretary
Sharen Jackson
Chief Financial Officer
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
weave r,r-
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, 2012, 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 the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
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, 2012, and the respective changes in financial position and cash flows, where
applicable, thereof, for the year then ended in conformity with accounting principles generally
accepted in the United States of America.
In accordance with Government Auditing Standards, we have issued our report dated March 14,
2013, on our consideration of the City's internal control over financial reporting and our tests of its
compliance with certain provisions of laws, regulations, contracts and grant agreements and other
matters. The purpose of that report is to describe the scope of our testing of internal control over
financial reporting and compliance and the results of the 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 TIDWELL LLP DALLAS
MEMBER OF BAKER TILLY CERTIFIED PUBLICACCUUNTANTSAND CONSULTANTS 12221 MERIT DRIVE, SUITE 1400, DALLAS, TX 75251
INTERNATIONAL WWW.WEAVERLLP.CUM P: (972) d9U 1970 F: (972) 7U2 8321
City of Southlake, Texas
Page 2
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis (pages 3 through 13), budgetary comparison
information (pages 53 through 56) and condition rating of street system (page 57) be presented
to supplement the basic financial statements. Such information, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board, who
considers it to be an essential part of financial reporting for placing the basic financial
statements in an appropriate operational, economic, or historical context. We have applied
certain limited procedures to the required supplementary information in accordance with
auditing standards generally accepted in the United States of America, which consisted of
inquiries of management about the methods of preparing the information and comparing the
information for consistency with management's responses to our inquiries, the basic financial
statements, and other knowledge we obtained during our audit of the basic financial statements.
We do not express an opinion or provide any assurance on the information because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of Southlake's financial statements as a whole. The introductory
section, combining and individual fund financial statements and schedules, and statistical
section listed in the table of contents are presented for purposes of additional analysis and are
not a required part of the financial statements. The combining and individual fund financial
statements and schedules are the responsibility of management and were derived from and
relate directly to the underlying accounting and other records used to prepare the financial
statements. The information has been subjected to the auditing procedures applied in the audit
of the financial statements and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to
prepare the financial statements or to the financial statements themselves, and other additional
procedures in accordance with auditing standards generally accepted in the United States of
America. In our opinion, the information is fairly stated, in all material respects in relation to the
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 do not express an opinion or provide any assurance on them.
WEAVER AND TIDWELL, L.L.P.
Dallas, Texas
March 14, 2013
MANAGEMENT'S DISCUSSION
AND ANALYSIS
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, 2012 by
$462,688,538 (net assets). Of this amount, $35,635,287 (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 $14,847,999. This increase can be attributed to
increases in ad valorem, sales tax revenue, fines and forfeitures, contributions, and
charges for services.
At September 30, 2012, the City's governmental funds reported combined ending fund
balances of $102,401,261. Approximately 12.9 percent of this amount, $13,205,240, 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
$13,205,240 or 42.8 percent of total General Fund expenditures.
At the end of the current fiscal year, the City of Southlake outstanding debt totals
$177,728,512, a net decrease of $1,538,395 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 measurement 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.
E
Business -Type 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 14-15 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 provide 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 22 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, Crime
Control District Capital Projects Fund and Tax Increment Financing District 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
5
non -major governmental funds is provided in the form of combining statements
elsewhere in this report.
The basic governmental funds financial statements can be found on pages 16-21 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 26-52 of this report.
GOVERNMENT -WIDE FINANCIAL ANALYSIS
Total assets of the City at September 30, 2012 were $649,407,562 while total liabilities
were $186,719,024, resulting in a net asset balance of $462,688,538.
The largest portion of the City's net assets, $359,608,929 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 is 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.
M
Governmental Activities net assets increased by $14,545,751. This increase is primarily
attributable to increases in both property taxes and charges for services.
Business -type Activities net assets increased by $302,248. 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, 2012:
Governmental Business -Type 2012
Activities Activities Total
Current and other assets:
$112,780,382
$ 37,527,481
$150,307,863
Capital assets
394,773,322
104,326,377
499,099,699
Total assets
$507,553,704
$141,853,858
$649,407,562
Other liabilities
$ 5,478,534
$ 3,511,978
$ 8,990,512
Long-term debt
outstanding
Total liabilities
Net assets:
Invested in capital
assets
Restricted -debt service
Restricted -capital projects
Restricted -other
Unrestricted
Total net assets
126,213,967 51,514,545 177,728,512
$131,692,501 $ 55,026,523 $186,719,024
$291,690,099 $ 67,918,830 $359,608,929
10,519,159 10,519,159
51,436,227 51,436,227
5,488,936 5,488,936
16,726,782 18,908,505 35,635,287
$375,861,203 $ 86,827,335 $462,688,538
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
Total liabilities
Net assets:
Invested in capital
assets
Restricted -debt service
Unrestricted
Total net assets
126,902,028 52,364,879 179,266,907
$133,122,775 $ 54,363,212 $187,485,987
$298,418,769 $ 68,911,163 $367,329,932
9,739,189 9,739,189
53,157,494 17,613,924 70,771,418
$361,315,452 $ 86,525,087 $447,840,539
7
The following analysis highlights the changes in net assets for the year ended
September 30, 2012:
Governmental Business -Type 2012
Activities Activities Total
Revenues:
Program revenues:
Charges for services
$ 7,900,369
$22,451,738
$30,352,107
Operating grants and
contributions
200,434
200,434
Capital grants and
contributions
518,617
1,214,395
1,733,012
General revenues:
Taxes
53,841,399
53,841,399
Interest on
investments
232,722
46,212
278,934
Gain on sale of
capital assets
91,134
91,134
Miscellaneous
463,681
10,811
474,492
Total revenues
63,248,356
23,723,156
86,971,512
Expenses:
General government
13,277,006
13,277,006
Public safety
15,891,911
15,891,911
Public works
6,399,819
6,399,819
Culture and recreation
8,158,291
8,158,291
Interest on long-term debt
5,865,798
5,865,798
Water and sewer
22,530,688
22,530,688
Total expenses
49,592,825
22,530,688
72,123,513
Increase in net assets
before transfers
13,655,531
1,192,468
14,847,999
Transfers
890,220
(890,220)
Increase in net assets
14,545,751
302,248
14,847,999
Net assets -beginning
of year
361,315,452
86,525,087
447,840,539
Net Assets -End of Year
SMA17,335
S462,,688.538
N.
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
M,525.087
447.840.539
I
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 $102,401,261. Approximately 12.9 percent or $13,205,240 constitutes
unassigned fund balance, which is available for spending at the government's discretion.
Other portions of the fund balance is either restricted, committed or assigned for specific
purposes to pay for debt service ($12,657,819), recycling ($22,642), police expenditures
($6,002,918), parks ($6,381,618), capital projects ($51,436,227), reinvestment zone
expenditures ($4,718,865), municipal court expenditures ($770,071), oil and gas
expenditures ($53,211), storm water expenditures ($451,127), strategic initiative
expenditures ($6,517,692) and other ($146,040).
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 $13,205,240. 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
42.8 percent of total General Fund expenditures, while total fund balance represents 64.5
percent of total General Fund expenditures. The fund balance of the General fund
increased $2,911,142 during the current fiscal year. Following are the key factors in this
increase:
• Increase in tax revenues ($678,787), development revenues ($846,145) and
charges for services ($144,868).
The General Obligation Debt Service Fund has a fund balance of $11,103,423, all of
which is restricted for the payment of debt service. The fund balance increased during
the year by $740,367, primarily due to a $6,347,362 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 $33,444,359, an increase of
$767,442.
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.
Unrestricted net assets reported in the Proprietary Funds were: $18,908,505 in the Water
and Sewer Fund and $3,535,007 in the Vehicle Replacement Fund. . Total net assets in
the Water and Sewer Fund increased by $302,248 while Vehicle Replacement Fund net
10
assets decreased by $407,278. The increase in contributions -impact fees and decrease in
transfers from the previous year are the primary reasons for the change in net assets,
respectively.
GENERAL FUND BUDGETARY HIGHLIGHTS
There was a decrease in appropriations from the original budget to the final amended
budget of $84,167, which can be briefly summarized as follows:
• decrease in general operational cost (training, supplies, etc.)
CAPITAL ASSETS AND DEBT ADNIINISTRATION
Capital Assets- The City's investment in capital assets for its governmental and business -
type activities as of September 30, 2012 amount to $499,099,699 (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
condition levels and the actual amount of expense incurred for that purpose for 2012 was
not material. Major capital projects completed during the current year included the
following:
• North Park/Lacrosse Facility
• Southlake Blvd reconfiguration, medians
• Kirkwood, N. Carroll connector
• Various water and sewer lines
• Pavement Management System — various overlays and rehab
• Various Sidewalks
Governmental Business -Type 2012
Activities Activities Total
Land and improvements
$ 98,061,474
$ 14,642,328
$112,703,802
Buildings and improvements
55,836,415
441,141
56,277,556
Improvements
81,174,438
81,174,438
Infrastructure
219,560,510
219,560,510
Machinery and equipment
6,334,118
1,093,186
7,427,304
Construction in Progress
14,980,805
6,975,284
21,956,089
Total
394.773.322
J104,326,377
499.099.699
11
Governmental Business -Type 2011
Activities Activities Total
Land and improvements $ 95,055,289
Buildings and improvements 55,730,470
Improvements
Infrastructure 214,052,892
Machinery and equipment 7,364,300
Construction in Progress 17,799,561
Total �390002512
$ 14,633,263
471,459
78,260,431
1,100,660
8,111,275
SlJU. 77,088
$109,688,552
56,201,929
78,260,431
214,052,892
8,464,960
25,910,836
S492,579,600
Additional information on the City's capital assets can be found in Note 4 on pages 41-42
of this report.
Long-term Debt- At the end of the current fiscal year, the City of Southlake had
$125,251,377 total long-term debt outstanding of bonds issued to finance capital
improvements for roadway, parks and recreation, public building and infrastructure.
$51,181,130 of Utility System bonds, which financed projects to increase capacity of the
Utility system, was also outstanding. An additional $1,037,860 was reported for
compensated absences at year-end.
Bonds payable
Unearned revenue
Compensated absences
Total
Bonds payable
Unearned revenue
Compensated absences
Total
Business -
Governmental Type 2012
Activities Activities Total
$125,251,377
962,590
126,213,967
$51,181,130
258,145
75,270
51,514,545
$176,432,507
258,145
1,037,860
5177,728,512
Governmental Business -Type 2011
Activities Activities Total
$125,969,876
932,152
S126,0022,028
$52,025,797
264,568
74,514
S52J64 JM
$177,995,673
264,568
1,006,666
�179,266,907
The City's bonds are rated "AAA" by Standard and Poor's and FitchRatings. 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 1.37 percent.
12
Additional information on the City's long-term debt can be found in Note 5 on pages 42-
47 of this report.
ECONONUC 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 49.7% of total
governmental revenue. Sales tax continues to grow as the second largest governmental
resource representing 32.0% of total governmental revenue. The City monitors all of its
resources and determines the need for program adjustment or fee increases accordingly.
The FY 2013 Adopted Budget maintains the City's property tax rate at $0.462 per $100
net taxable valuation, which is unchanged from the FY 2012 rate. The City's property
tax roll on net taxable value increased $161,939,736 or 3.1 percent from the 2011
certified roll to the 2012 certified roll. As a result, the City is projected to collect more in
FY 2013 than in FY 2012, even without a tax rate increase. The estimate of the FY 2013
tax roll is based on the certified roll as provided by the Tarrant Appraisal District (TAD)
in July. The assumed collection rate is 99 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 Chief Financial Officer,
1400 Main Street, 4th Floor Finance Department, Southlake, Texas 76092.
13
BASIC FINANCIAL STATEMENTS
GOVERNMENT -WIDE
FINANCIAL STATEMENTS
CITY OF SOUTHLAKE, TEXAS
EXHIBIT 1
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2012
PRIMARY GOVERNMENT
GOVERNMENTAL
BUSINESS -TYPE
ACTIVITIES
ACTIVITIES
TOTAL
ASSETS
Cash and cash equivalents
$
61,025,454
$
6,745,658
$
67,771,112
Investments
34,319,717
3,420,818
37,740,535
Receivables (net of allowance for uncollectibles)
4,642,632
3,503,148
8,145,780
Prepaid items
37,791
628
38,419
Restricted assets
Cash and cash equivalents
7,073,450
12,697,885
19,771,335
Investments
4,027,455
10,437,556
14,465,011
Receivables
94,596
-
94,596
Capital assets:
Non -depreciable
282,705,837
21,617,612
304,323,449
Depreciable (net of depreciation)
112,067,485
82,708,765
194,776,250
OPEB asset
99,500
-
99,500
Deferred charges
1,459,787
721,788
2,181,575
TOTAL ASSETS
$
507,553,704
$
141,853,858
$
649,407,562
LIABILITIES
Accounts payable
$
2,747,999
$
2,702,261
$
5,450,260
Accrued liabilities
1,404,908
339,463
1,744,371
Accrued interest payable
-
261,789
261,789
Unearned revenue
649,285
-
649,285
Liabilities payable from restricted assets
Accrued interest
676,342
-
676,342
Customer meter deposits
-
208,465
208,465
Non -current liabilities:
Due within one year
10,704,175
4,412,754
15,116,929
Due in more than one year
115,509,792
47,101,791
162,611,583
TOTAL LIABILITIES
131,692,501
55,026,523
186,719,024
NET ASSETS
Invested in capital assets (net of related debt)
291,690,099
67,918,830
359,608,929
Restricted for debt service
10,519,159
-
10,519,159
Restricted for municipal court
770,071
-
770,071
Restricted for reinvestment zone
4,718,865
-
4,718,865
Restricted for capital projects
51,436,227
-
51,436,227
Unrestricted
16,726,782
18,908,505
35,635,287
TOTAL NET ASSETS
$
375,861,203
$
86,827,335
$
462,688,538
The Notes to Financial Statements are
an integral part of this statement.
14
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FUND FINANCIAL STATEMENTS
GOVERNMENTAL FUNDS
FINANCIAL STATEMENTS
CITY OF SOUTHLAKE, TEXAS
BALANCE SHEET
GOVERNMENTAL FUNDS
SEPTEMBER 30, 2012
GENERAL
OBLIGATION
GENERAL
CRIME
DEBT
CAPITAL
CONTROL
GENERAL
SERVICE
PROJECTS
DISTRICT
ASSETS
Cash and cash equivalents
$ 9,499,229
$ 7,073,450
$ 19,177,001
$ 4,297,257
Investments
11,230,361
4,027,455
14,726,627
282,406
Receivables, net of allowances for
uncollectibles:
Ad valorem taxes
234,937
92,330
-
-
Franchise taxes
400,824
-
-
Sales taxes
1,815,265
-
-
835,123
Interest
680
2,266
11,817
59
Other
79,093
-
10,065
-
Prepaid items
37,791
-
-
-
TOTAL ASSETS
$ 23,298,180
$ 11,195,501
$ 33,925,510
$ 5,414,845
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable
$ 913,028
$ -
$ 481,151
$ 252,266
Accrued liabilities
1,385,703
-
-
137
Deferred revenue
1,039,842
92,078
-
TOTAL LIABILITIES
3,338,573
92,078
481,151
252,403
FUND BALANCES
Nonspendable for:
Prepaid expenditures
37,791
-
-
-
Restricted for:
Debt service
-
11,103,423
Municipal court expenditures
-
Reinvestment zone expenditures
-
Capital projects
-
33,444,359
-
Committed for:
Police expenditures
33,624
-
5,162,442
Parks and recreation
-
-
Oil and gas expenditures
Storm water expenditures
Library
-
Assigned for:
Teen Court expenditures
18,314
Senior Center expenditures
10,397
Recycling
22,642
Reforestation expenditures
113,907
Strategic initiatives
6,517,692
Unassigned
13,205,240
-
-
-
TOTAL FUND BALANCES
19,959,607
11,103,423
33,444,359
5,162,442
TOTAL LIABILITIES AND FUND BALANCES
$ 23,298,180
$ 11,195,501
$ 33,925,510
$ 5,414,845
The Notes to Financial Statements are
an integral part of this statement.
16
SOUTHLAKE
PARKS
CRIME
DEVELOPMENT
CONTROL
CORPORATION
DISTRICT
CAPITAL
CAPITAL
PROJECTS
PROJECTS
EXHIBIT 3
TAX
INCREMENT NON -MAJOR TOTAL
FINANCING GOVERNMENTAL GOVERNMENTAL
DISTRICT FUNDS FUNDS
$ 8,936,995 $ 3,515,196 $ 4,224,222 $ 9,866,129 $ 66,589,479
2,494,500 180,158 494,539 2,885,655 36,321,701
- - - - 327,267
- - - - 400,824
- - - 940,683 3,591 ,071
- 38 104 1,969 16,933
- - - 311,864 401,022
- - - - 37,791
$ 11,431,495 $ 3,695,392 $ 4,718,865 $ 14,006,300 $ 107,686,088
$ 103,131 $ 547,346 $ - $ 451,077 $ 2,747,999
- - - 19,068 1,404,908
- - - - 1 ,131 ,920
103,131 547,346 - 470,145 5,284,827
37,791
- - - 1,554,396
12,657,819
- - - 770,071
770,071
- - 4,718,865 -
4,718,865
11,328,364 3,148,046 - 3,515,458
51,436,227
- - - 806,852
6,002,918
- - - 6,381,618
6,381,618
- - - 53,211
53,211
- - - 451,127
451,127
- - - 3,422
3,422
- - - - 18,314
- - - - 10,397
- - - - 22,642
- - - - 113,907
- - - - 6,517,692
- - - - 13,205,240
11,328,364 3,148,046 4,718,865 13,536,155 102,401,261
$ 11,431,495 $ 3,695,392 $ 4,718,865 $ 14,006,300 $ 107,686,088
17
CITY OF SOUTHLAKE, TEXAS EXHIBIT 4
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO THE STATEMENT OF NET ASSETS
AS OF SEPTEMBER 30, 2012
Total fund balances - governmental funds $ 102,401,261
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 $1,318,258 in assets allocated to governmental activities from the internal
service fund). 393,455,064
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.
1,459,787
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.
(676,342)
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.
4,853,265
OPEB asset has not been included in the governmental fund financial statements, as
these assets do not represent current financial resources.
99,500
Revenues earned but not available within sixty days of the year end are not
recognized as revenue on the fund financial statements.
482,635
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.
(126,213,967)
Net assets of governmental activities
$ 375,861,203
The Notes to Financial Statements are
an integral part of this statement.
18
CITY OF SOUTHLAKE, TEXAS
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2012
GENERAL
OBLIGATION
GENERAL
CRIME
DEBT
CAPITAL
CONTROL
GENERAL
SERVICE
PROJECTS
DISTRICT
REVENUES
Ad valorem taxes, penalties and interest
$ 17,690,312
$ 6,923,560
$
$
Franchise taxes
2,598,074
-
Municipal sales and mixed beverage taxes
9,443,239
4,724,779
Licenses, permits and fees
2,111 ,754
-
Charges for services
1,805,022
Fines and forfeitures
1,119,050
Grants
117,810
Capital recovery fees
-
-
435,406
-
Interest earned
61,622
15,980
70,318
1,053
Contributions
-
-
24,499
-
Miscellaneous
330,143
TOTAL REVENUES
35,277,026
6,939,540
530,223
4,725,832
EXPENDITURES
Current
General government
City secretary/mayor
361,488
City manager's office
594,713
Human resources
390,831
Support services
2,650,511
Economic development
193,915
Finance
1 ,091 ,833
Municipal court
559,154
Teen court
133,585
Information technology
1,772,117
Public safety
-
Police services
5,621 ,650
244,585
Fire services
5,597,946
-
Public safety support
1,516,999
Building inspection
816,771
-
Public works
Public works administration
1 ,361 ,600
46,223
Streets and drainage
1,776,764
662,471
Planning
815,391
-
Cultural and recreation
Community services
611,919
Parks and recreation
4,297,051
Library services
665,384
Intergovernmental
-
-
Capital outlay
-
5,008,020
Debt service:
Principal retirement
8,506,754
-
Interest and fiscal charges
4,228,285
44,891
TOTAL EXPENDITURES
30,829,622
12,735,039
5,761,605
244,585
Excess (deficiency) of revenues
over (under) expenditures
4,447,404
(5,795,499)
(5,231,382)
4,481,247
OTHER FINANCING SOURCES (USES)
Issuance of long-term debt
-
-
2,695,000
-
Proceeds from issuance of refunding bonds
9,690,000
-
Payment to refund bond escrow agent
(10,788,860)
-
Premium on issuance of long-term debt
-
1,287,364
203,824
Transfers from other funds
1,463,738
6,347,362
3,100,000
Transfers to other funds
(3,000,000)
(6,149,600)
TOTAL OTHER FINANCING SOURCES (USES)
(1,536,262)
6,535,866
5,998,824
(6,149,600)
NET CHANGE IN FUND BALANCES
2,911,142
740,367
767,442
(1,668,353)
FUND BALANCES, BEGINNING OF YEAR
17,048,465
10,363,056
32,676,917
6,830,795
FUND BALANCES, END OF YEAR
$ 19.959. 007
$ 11,103,423
$ 33.444.359
$ 5.162.442
The Notes to Financial Statements are
an integral part of this statement.
19
EXHIBIT 5
SOUTHLAKE
PARKS
CRIME
DEVELOPMENT
CONTROL
TAX
CORPORATION
DISTRICT
INCREMENT
NON -MAJOR
TOTAL
CAPITAL
CAPITAL
FINANCING
GOVERNMENTAL
GOVERNMENTAL
PROJECTS
PROJECTS
DISTRICT
FUNDS
FUNDS
$
$
$ 6,523,327
$
$ 31,137,199
-
2,598,074
5,908,460
20,076,478
1,319,846
3,431,600
-
1,805,022
1,188,357
2,307,407
-
117,810
-
-
435,406
22,586
387
1,063
25,592
198,601
-
-
-
2,194
26,693
29,117
162,338
521,598
51,703
387
6,524,390
8,606,787
62,655,888
361,488
594,713
390,831
2,650,511
193,915
1,091,833
559,154
- 133,585
8,500 1,780,617
894,165 6,760,400
- 5,597,946
1,516,999
816,771
1,407,823
2,439,235
815,391
- 611,919
1,007,019 5,304,070
- 8,879 674,263
- - 2,972,849 - 2,972,849
4,388,014 1,182,735 - 494,175 11,072,944
-
1,395,000
9,901,754
97,445
1,289,255
5,659,876
4,485,459
1,182,735
2,972,849
5,096,993
63,308,887
(4,433,756)
(1,182,348)
3,551,541
3,509,794
(652,999)
5,850,000
-
-
8,545,000
-
9,690,000
-
(10, 788,860)
246,687
-
-
1,737,875
2,517,931
4,000,000
2,863,835
20,292,866
(517,931)
(4,181,268)
(5,553,847)
(19,402,646)
8,614,618
3,482,069
(4,181,268)
(2,690,012)
10,074,235
4,180,862
2,299,721
(629,727)
819,782
9,421,236
7,147,502
848,325
5,348,592
12,716,373
92,980,025
$ 11,328,364
$ 3,148,046
$ 4,718,865 $
13,536, 555 $
102,401,261
20
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, 2012
Net change in fund balances - total governmental funds $ 9,421,236
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 $660,987 allocated from internal service fund). 9,892,041
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 $479,900 allocated from internal service fund). (5,803,422)
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 (18,235,000)
o Payment to refunded bond escrow 10,788,860
o Bond premiums (1,737,875)
o Deferred loss on refunding (net) 502,748
o Debt issuance costs 329,247
o Repayments 9,901,754
o Amortization of deferred charges (240,143)
o Amortization of premiums 123,603
o Amortization of deferred loss
on refunding (625,789)
807,405
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.
(30,441)
Changes in the other post employment benefit assets and liabilities are not reported
at the fund level; however they are reported at the government -wide level.
99,500
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.
33,654
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 entirely to governmental activities.
(407,278)
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.
518,617
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.
14,439
Change in net assets of governmental activities
$ 14,545,751
The Notes to Financial Statements are
an integral part of this statement.
21
PROPRIETARY FUND
FINANCIAL STATEMENTS
CITY OF SOUTHLAKE, TEXAS EXHIBIT 7
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
SEPTEMBER 30, 2012
BUSINESS -TYPE
GOVERNMENTAL
ACTIVITIES
ACTIVITIES
WATER AND SEWER
VEHICLE REPLACEMENT
ENTERPRISE
INTERNAL SERVICE
FUND
FUND
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
6,745,658
$
1,509,425
Investments
3,420,818
2,025,471
Receivables, net of allowance for uncollectibles:
Trade accounts
1,178,593
-
Unbilled trade accounts
2,304,626
Interest
19,064
111
Special assessments
865
Prepaid expenses
628
Restricted assets
Cash restricted for capital
12,697,885
Investments restricted for customer meter deposits
208,465
Investments restricted for capital
10,229,091
Total current assets
36,805,693
3,535,007
NON -CURRENT ASSETS
Capital assets
Land and improvements
14,642,328
-
Buildings and improvements
935,501
Distribution system
117,866,272
Equipment
1,731,273
-
Vehicles
572,041
3,621,439
Capacity rights
9,190,988
-
Construction in progress
6,975,284
Total capital assets
151,913,687
3,621,439
Less: accumulated depreciation
(47,587,310)
(2,303,181)
Capital assets, net of accumulated depreciation
104,326,377
1,318,258
Deferred charges
Bond issuance costs, net of amortization
721,788
Total deferred charges
721,788
Total non -current assets
105,048,165
1,318,258
TOTAL ASSETS
$
141,853,858
$
4, 553,265
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES
Accounts payable
$
2,702,261
$
-
Accrued liabilities
339,463
Accrued interest
261,789
Current portion of general obligation debt
3,944,749
Current portion of contract obligation debt
320,000
Current portion of revenue bonds
130,000
Current portion of compensated absences
75,270
Current portion of deferred loss on refunding
(114,559)
Current portion of deferred revenue
5,000
Current portion of bond premiums
52,294
Payable from restricted assets:
Customer meter deposits
208,465
Total current liabilities
7,924,732
NON -CURRENT LIABILITIES
Deferred revenue
253,145
Contract revenue obligations
1,435,000
General obligation debt
42,404,609
Bond premiums
683,135
Revenue bonds
3,130,000
Deferred loss on refunding
(804,098)
Total non -current liabilities
47,101,791
TOTAL LIABILITIES
55,026,523
NET ASSETS
Invested in capital assets, net of related debt
67,918,830
1,318,258
Unrestricted
18,908,505
3,535,007
TOTAL NET ASSETS
$
86,827,335
$
4,853,265
The Notes to Financial Statements are
an integral part of this statement.
22
CITY OF SOUTHLAKE, TEXAS EXHIBIT 8
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET ASSETS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2012
OPERATING REVENUES
Charges for sales and services:
Water, sewer and garbage
Service charges
Miscellaneous
Total operating revenues
OPERATING EXPENSES:
Personnel services
Contractual services
Lease payments
Supplies
Utilities
Administrative
Maintenance
Professional benefits
Depreciation and amortization
Total operating expenses
OPERATING INCOME (LOSS)
BUSINESS -TYPE
GOVERNMENTAL
ACTIVITIES
ACTIVITIES
WATER AND SEWER
VEHICLE REPLACEMENT
ENTERPRISE
INTERNAL SERVICE
FUND
FUND
$ 22,388,851
$ -
62,887
-
10,811
-
22,462,549
-
2,320,742
-
1,191,598
-
-
21,000
127,346
-
8,252,217
-
66,693
-
2,999,937
-
20,683
-
4,014,372
479,900
18,993,588
500,900
3,468,961 (500,900)
NON -OPERATING REVENUES (EXPENSES)
Gain (loss) on sale of capital assets (13,682)
Interest income 46,212
Interest expense (3,523,418)
91,138
2,484
Total non -operating revenues (expenses) (3,490,888) 93,622
LOSS BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS (21,927) (407,278)
CAPITAL CONTRIBUTIONS AND TRANSFERS
Capital contributions - property owners 607,356
Contributions - impact fees 607,039
Transfers to other funds (890,220)
Total capital contributions and transfers 324,175
CHANGE IN NET ASSETS
NET ASSETS, BEGINNING OF YEAR
NET ASSETS, END OF YEAR
The Notes to Financial Statements are
an integral part of this statement.
302,248 (407,278)
86,525,087 5,260,543
$ 86,827,335 $ 4,853,265
23
CITY OF SOUTHLAKE, TEXAS
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers and users
Cash payments to suppliers
Cash payments to employees
Net cash provided by (used in) operating activities
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Capital expenditures
Principal payments on bonds
Bond issue costs
Proceeds from issuance of bonds
Premium on the issuance of bonds
Interest paid
Proceeds from sale of capital assets
Contributions - impact fees
Net cash used in capital and related financing activities
CASH FLOWS FROM NON -CAPITAL
FINANCING ACTIVITIES
Transfers to other funds
Net cash used in non -capital
financing activities
CASH FLOWS FROM INVESTING ACTIVITIES
Net sales of investments
Interest received
Net cash used in investing activities
NET CHANGE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR
RECONCILIATION TO STATEMENT OF NET ASSETS
Cash and cash equivalents
Cash restricted for capital
Total cash and cash equivalents
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES
Operating income (loss)
Adjustments to reconcile operating income (loss)
to net cash provided by (used in) operating activities:
Loss on the sale of assets
Depreciation and amortization
Decrease (increase) in assets
Receivables
Increase in liabilities
Payables and accruals
Customer deposits
Net cash provided by (used in) operating activities
NON -CASH CAPITAL AND RELATED FINANCING:
Contributions of capital assets from developers
The Notes to Financial Statements are
an integral part of this statement.
24
EXHIBIT 9
BUSINESS -TYPE
GOVERNMENTAL
ACTIVITIES
ACTIVITIES
WATER AND SEWER
VEHICLE
REPLACEMENT
ENTERPRISE
INTERNAL SERVICE
FUND
FUND
$
22,695,013
$
(11 ,150,1 13)
(21, 000)
(2,319,986)
9,224,914
(21,000)
(5,106,973)
(643,675)
(4,018,248)
(51 ,195)
3,030,000
151,491
(3,547,731)
-
-
91,138
607,039
-
(8,935,617)
(552,537)
(890,220)
(890,220)
(8,110,545)
(1,298,309)
34,502
6,713
(8,076,043)
(1,291,596)
(8,676,966)
(1,865,133)
28,120,509
3,374,558
$
19,443,543
$
1,509,425
$
6,745,658
$
1,509,425
12,697,885
-
$
19,443,543
$
1 ,509,425
$
3,468,961
$
(500,900)
(13,682)
-
4,014,372
479,900
222,972
-
1,502,627
29,664
$
9,224,914
$
(21,000)
$ 607,356 $
FIDUCIARY FUND
FINANCIAL STATEMENTS
CITY OF SOUTHLAKE, TEXAS
CASH ESCROW AGENCY FUND
STATEMENT OF FIDUCIARY NET ASSETS
SEPTEMBER 30, 2012
ASSETS
Cash and cash equivalents
Investments
Accrued interest receivable
TOTAL ASSETS
Due to builders
TOTAL LIABILITIES
The Notes to Financial Statements are
an integral part of this statement.
EXHIBIT 10
Agency Fund
Cash
Escrow
$ 50,826
17,307
4
$ 68,137
$ 68,137
$ 68,137
25
NOTES TO FINANCIAL STATEMENTS
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
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.
26
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
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.
27
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
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 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.
28
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED
Basis of Presentation — Continued
Southlake Parks Development Corporation Capital Projects Fund -
The Southlake Parks Development Corporation ("SPDC") 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 ("TIF") District Fund 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 ("SPDC") Fund 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.
29
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
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.
Commercial Vehicle Enforcement Fund -
The Commercial Vehicle Enforcement Fund is used to account for the fees assessed for
commercial vehicle violations.
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:
30
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED
Basis of Presentation — Continued
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.
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.
31
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED
Measurement Focus and Basis of Accounting — Continued
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.
"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 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, 2012, 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 2012 levy was
based on was $5,462,579,683. Taxes are due on October 1 and are delinquent after the
following January 31.
32
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED
Property Taxes — Continued
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, 2012 was $0.462 per $100 of assessed valuation.
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.
33
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED
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.
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.
34
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED
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.
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.
35
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED
Fund Equity — Continued
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.
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.
36
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
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, 2012 the carrying amount of the City's deposits was $51,966,965 and the bank
balance was $54,007,090. As of September 30, 2012, 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:
Authorized Maximum
Investment Type Maturity
Maximum Maximum
Percentage Investment
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, 2012 are classified in the accompanying financial
statements as follows:
Primary Government
Cash and cash equivalents
$ 67,771,112
Investments
37,740,535
Restricted cash and cash equivalents
19,771,335
Restricted investments
14,465,011
Total primary government
139,747,993
Fiduciary Funds:
Cash
50,826
Investments
17,307
Total fiduciary funds
68,133
Total cash and investments
$ 139,816,126
37
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 2. CASH AND INVESTMENTS — CONTINUED
Cash and investments as of September 30, 2012 consist of the following:
Cash on hand $ 5,086
Deposits with financial institutions 51,966,965
Investments 87,844,075
Total cash and investments $ 139,816,126
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, 2012, the City had the following investments:
Investment Type
Government agency securities
TexStar
TexPool
Certificates of Deposit
Commercial Paper
Total
Amount
$ 20,038,364
23,080,004
12,541,219
13,184,488
19,000,000
$ 87,844,075
Weighted
Average
Maturity
347 days
46 days
44 days
96 days
154 days
As of September 30, 2012 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.
Investment Type
Government agency securities
TexStar
TexPool
Certificates of Deposit
Commercial Paper
Total
Amount
$ 20,038,364
23,080,004
12,541,219
13,184,488
19,000,000
$ 87,844,075
Minimum
Rating as
Legal
of Year
Rating
End
N/A
Not rated
N/A
AAAm
N/A
AAAm
N/A
AAAm
N/A
Aa3
38
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
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, 2012, investments other than external investment pools that
represent 5% or more of the City's investments are as follows:
Issuer
Investment Type Reported Amount
FNMA Government agency securities $ 16,000,000
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, 2012, 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.
39
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 3. RECEIVABLES
Receivables at September 30, 2012, 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:
General
Crime
Tax
Obligation
General
Crime
Control District
Increment
Debt
Capital
Control
Capital
Financing
General
Service
Projects
District
Projects
District
Receivables:
Property taxes
$
621,191
$ 243,135
$
$ -
$
$
Sales taxes
1,815,265
-
835,123
Franchise taxes
400,824
-
Accounts
-
10,065
Special
assessments
-
-
-
-
Interest
680
2,266
11,817
59
38
104
Other
79,093
-
-
-
Gross
receivables
2,917,053
245,401
21,882
835,182
38
104
Less: allowance
386,254
150,805
-
-
-
Net total
receivables
$
2,530,799
$ 94,596
$ 21,882
$ 835,182
$ 38
$ 104
Non -
Major
Water
Govern-
and
Internal
mental
Sewer
Service
Agency
Total
Receivables:
Property taxes
$
-
$
$
$
$ 864,326
Sales taxes
940,683
3,591,071
Franchise taxes
-
400,824
Accounts
3,784,433
3,784,433
Special
assessments
-
865
865
Interest
1,969
19,064
111
4
36,112
Other
311,864
-
390,957
Gross
receivables
1,254,516
3,804,362
111
4
9,078,653
Less: allowance
-
301,214
838,273
Net total
receivables
$
1,254,516
$ 3,503,148
$ 111
$ 4
$ 8,240,380
The Water and Sewer Fund accounts receivable include unbilled charges for services rendered
through September 30, 2012 of $2,304,626 .
:l
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 4. CAPITAL ASSETS
Capital asset activity for the year ended
September
30, 2012, was as follows:
Beginning
Capital Sales or
Adjustments/
Ending
Balance
Acquisitions Disposals
Transfers
Balance
Governmental Activities:
Capital assets not being depreciated:
Land
$ 83,025,706
$ 8,435 $
$ -
$ 83,034,141
Street infrastructure
180,369,897
246,197
4,074,797
184,690,891
Construction -in -progress
17,799,561
9,447,124
(12,265,880)
14,980,805
Total capital assets not
being depreciated
281,195,164
9,701,756
(8,191,083)
282,705,837
Capital assets being depreciated
Land improvements
2,028,342
3,748,063
5,776,405
Buildings and building improvements
63,340,754
-
1,199,739
64,540,493
Public art
316,595
57,826
485,381
859,802
Office equipment
1,824,994
-
-
1,824,994
Communications equipment
2,833,828
-
-
2,833,828
Field equipment
809,198
167,483
(15,092)
43,541
1,005,130
Heavy equipment
1,858,011
82,372
(25,000)
-
1,915,383
Computer equipment
1,173,824
83,487
(21,637)
1,235,674
Computer software
3,339,099
-
3,339,099
Vehicles
7,927,468
714,736
(526,830)
-
8,115,374
Drainage
38,417,912
263,984
40,811
38,722,707
Bridges, road signs, and fiber
optic lines
2,260,315
-
990,202
3,250,517
Park improvements
15,204,084
389,399
15,593,483
Pathways
8,285,515
1,293,947
9,579,462
Total capital assets being depreciated
149,619,939
1,369,888
(588,559)
8,191,083
158,592,351
Accumulated depreciation
Land improvements
(583,876)
(3,808)
(587,684)
Buildings and building improvements
(7,891,581)
(1,564,117)
(9,455,698)
Public art
(35,298)
(72,884)
(108,182)
Office equipment
(395,748)
(97,382)
(493,130)
Communications equipment
(2,507,635)
(184,438)
-
(2,692,073)
Field equipment
(616,941)
(74,979)
14,894
(677,026)
Heavy equipment
(1,010,480)
(142,308)
25,000
(1,127,788)
Computer equipment
(682,661)
(183,121)
21,635
(844,147)
Computer software
(2,294,246)
(593,314)
-
(2,887,560)
Vehicles
(4,894,411)
(828,747)
509,518
(5,213,640)
Drainage
(11,445,732)
(1,003,157)
-
(12,448,889)
Bridges, road signs, and fiber
optic lines
(908,748)
(54,637)
(963,385)
Park improvements
(4,618,967)
(1,135,904)
(5,754,871)
Pathways
(2,926,267)
(344,526)
-
(3,270,793)
Total accumulated depreciation
(40,812,591)
(6,283,322)
571,047 -
(46,524,866)
Total capital assets being depreciated, net
108,807,348
(4,913,434)
(17,512) 8,191,083
112,067,485
Governmental activities capital assets, net
$ 390,002,512
$ 4,788,322
$ (17,512) $ -
$ 394,773,322
41
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 4. CAPITAL ASSETS — CONTINUED
Business Type Activities:
Capital assets not being depreciated:
Land
Construction -In -Progress
Total capital assets not
being depreciated
Capital assets being depreciated:
Buildings and building improvements
Equipment
Vehicles
Capacity rights
Distribution system
Total capital assets being depreciated
Accumulated depreciation:
Buildings and building improvements
Equipment
Vehicles
Capacity rights
Distribution system
Total accumulated depreciation
Total capital assets being depreciated, net
Business type activities capital assets, net
Beginning
Capital
Sales or
Adjustments/
Ending
Balance
Acquisitions
Disposals
Transfers
Balance
$ 14,633,263
$ 9,065
$
$ -
$ 14,642,328
8,111,275
4,637,164
(5,773,155)
6,975,284
22,744,538
4,646,229
(5,773,155)
21,617,612
935,501
-
935,501
1,647,392
138,676
(54,795)
1,731,273
507,041
65,000
572,041
9,190,988
-
-
9,190,988
111,221,196
871,921
5,773,155
117,866,272
123,502,118
1,075,597
(54,795)
5,773,155
130,296,075
(464,042)
(30,318)
-
-
(494,360)
(807,835)
(154,571)
41,113
(921,293)
(245,938)
(42,897)
-
(288,835)
(2,968,758)
(183,820)
(3,152,578)
(39,182,995)
(3,547,249)
-
(42,730,244)
(43,669,568)
(3,958,855)
41,113
-
(47,587,310)
79,832,550
(2,883,258)
(13,682)
5,773,155
82,708,765
$ 102,577,088
$ 1,762,971
$(13,682)
$ -
$ 104,326,377
Depreciation expense was charged as a direct expense to functions of the primary government as
follows:
Governmental activities:
General government $ 1,147,761
Public safety 1,192,281
Public works 2,127,198
Culture and recreation 1,816,082
Total depreciation expense -
governmental activities $ 6,283,322
Business -type activities:
Water and Sewer $ 3,958,855
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.
42
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 5. LONG-TERM DEBT— CONTINUED
In September 2012, the City issued $11,300,000 of Series 2012, 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.
In September 2012, the City also issued $9,965,000 of Series 2012, General Obligation Refunding
Bonds, of which $275,000 is included as part of business -type activities. The debt was issued to
refund a portion of the City's outstanding debt to achieve a present value debt service savings. Net
proceeds from the sale of the bonds totaled $11,287,267. Of these proceeds, $10,788,860 was
placed with an escrow agent to provide for all future debt payments of the refunded bonds.
This refunding resulted in a decrease in the City's debt service payments of $1,761,394, which
resulted in an economic gain (difference between the present value of the debt service payments of
the old debt and new debt) of $1,528,050.
General obligation bonds, combination certificates of obligation, tax notes and governmental revenue
bonds are as follows as of September 30, 2012:
Final Interest Business -
General Obligation Bonds and Certificates of Obligation Maturity Rates Governmental Type
$30,275,000 Series 2004, General Obligation Refunding 2025 4.0 - 5.22% $ 22,550,000 $
$3,025,000 Series 2004, Tax and Waterworks and Sewer
System Revenue Certificates of Obligation 2023 2.0 - 5.0% 1,810,000 -
$35,700,000 Series 2005, General Obligation
Refunding Bonds 2026 4.2% 10,284,590 19,351,050
$6,075,000 Series 2006, Combination Tax and Waterworks
and Sewer System Revenue Certificates of Obligation 2026 3.75 - 4.375% 750,000 -
$6,540,000 Series 2007, Combination Tax and Waterworks
and Sewer System Revenue Certificates of Obligation 2018 4.0 - 5.0% 3,910,000 -
$14,015,000 Series 2008, Combination Tax and Waterworks
and Sewer System Revenue Certificates of Obligation 2028 3.5 - 4.625% 5,936,935 6,331,850
$24,835,000 Series 2009, Combination Tax and Waterworks
and Sewer System Revenue Certificates of Obligation 2029 2.0 - 5.0% 13,865,000 5,805,000
$26,730,000 Series 2010, General Obligation
Refunding Bonds 2023 3.0 - 4.0% 13,223,405 5,066,458
$4,480,000 Series 2011A, Tax and Waterworks and Sewer
System (Limited Pledge) Certificates of Obligation 2018 2.00 - 5.00% 3,915,000 -
$3,365,000 Series 2011 B, Tax and Waterworks and Sewer
System (Limited Pledge) Certificates of Obligation 2031 2.00 - 4.125% - 3,260,000
$15,745,000 Series 2010, Tax and Waterworks and Sewer
System (Limited Pledge) Certificates of Obligation 2030 3.0 - 4.25% 6,090,000 4,975,000
$11,300,000 Series 2012, Tax and Waterworks and Sewer
System (Limited Pledge) Certificates of Obligation 2032 3.0 - 4.25% 2,695,000 2,755,000
$9,965,000 Series 2012, General Obligation
Refunding Bonds 2026 3.0 - 4.25% 9,690,000 275,000
$ 94,719,930 $ 47,819,358
43
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 5. LONG-TERM DEBT— CONTINUED
Governmental Revenue Bonds
$9,220,000 Series 1997, Sales Tax and Revenue Bonds,
Refunding and Improvements
$1,155,000 Series 2005, SPDC Taxable Sales
Refunding Bonds
$17,695,000 Series 2005, SPDC Refunding Bonds
$4,425,000 Series 2006, Sales Tax and Revenue Bonds
$15,745,000 Series 2010, Tax and Waterworks and Sewer
System (Limited Pledge) Certificates of Obligation
$3,285,000 Series 2011 C, Tax and Waterworks and Sewer
System (Limited Pledge) Certificates of Obligation
$11,300,000 Series 2012, Tax and Waterworks and Sewer
System (Limited Pledge) Certificates of Obligation
Final
Interest
Business -
Maturity
Rates
Governmental Type
2021
3.50 - 5.38%
$ 1,430,000 $
2013
5.00%
45
2027
4.30%
13,490,000
2027
3.75 - 4.375%
3,365,000
2030
3.00 - 4.25%
3,045,000
2031
2.00 - 4.125%
3,180,000
2032 3.0 - 4.25% 5,850,000
$ 30,360,045 $
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, 2012 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% $ - $ 1,790,000
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, 2012 consist of the
following:
Contract Revenue Obligations
Series 2001, TRA - Denton Creek Wastewater Pressure
Interceptor - Refunding
Final Business -
Maturity Governmental Type
2017 $ $ 1,755,000
44
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 5. LONG-TERM DEBT— CONTINUED
The following is a summary of long-term transactions for the year ended September 30, 2012:
Amount
Beginning
Ending
Due within
Balance
Additions
Reductions
Balance
One year
Governmental activities:
General obligation bonds and
certificates of obligation
$101,511,681
$12,385,000
$(19,176,751)
$ 94,719,930
$ 9,209,597
Sales tax revenue bonds
25,690,045
5,850,000
(1,180,000)
30,360,045
1,450,045
Bond premiums (discounts)
2,195,583
1,737,875
(123,603)
3,809,855
321,770
Deferred loss on refunding
(3,427,433)
(836,809)
625,789
(3,638,453)
(334,992)
Total bonds payable
125,969,876
19,136,066
(19,854,565)
125,251,377
10,646,420
Compensated absences
932,152
799,950
(769,512)
962,590
57,755
Total governmental activities
$ 126,902,028
$19,936,016
$ (20,624,077)
$ 126,213,967
$ 10,704,175
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
$ 50,292,606
$ 3,030,000
$ (3,713,248)
$ 49,609,358
$ 4,074,749
Contract revenue obligations
2,060,000
-
(305,000)
1,755,000
320,000
Bond premiums
628,222
151,491
(44,284)
735,429
52,294
Deferred loss on refunding
(955,031)
(9,648)
46,022
(918,657)
(114,559)
Total bonds payable
52,025,797
3,171,843
(4,016,510)
51,181,130
4,332,484
Unearned revenue
264,568
-
(6,423)
258,145
5,000
Compensated absences
74,514
75,270
(74,514)
75,270
75,270
Total business -type activities
$ 52,364,879
$ 3,247,113
$ (4,097,447)
$ 51,514,545
$ 4,412,754
45
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 5. LONG-TERM DEBT— CONTINUED
The annual aggregate maturities for each bond type are as follows:
General Obligation Bonds and Certificates of Obligation
Fiscal Year Ending
September 30,
2013
2014
2015
2016
2017
2018-2022
2023-2027
2028-2032
Total
Sales Tax Revenue Bonds
Fiscal Year Ending
September 30,
2013
2014
2015
2016
2017
2018-2022
2023-2027
2028-2032
Total
Principal
Governmental Activities
Interest Total
$ 9,209,597
$ 3,802,590
$ 13,012,187
9,188,567
3,466,826
12,655,393
9,543,069
3,083,658
12,626,727
8,231,156
2,728,746
10,959,902
7,933,179
2,423,247
10,356,426
26,495,164
8,248,046
34,743,210
21,176,538
2,804,171
23,980,709
2,942,660
138,906
3,081,566
$ 94,719,930 $ 26,696,190 $ 121,416,120
Governmental Activities
Principal Interest
$ 1,450,045
$ 1,197,261
1,500,000
1,146,403
1,575,000
1,081,650
1,635,000
1,015,525
1,705,000
950,012
9,595,000
3,667,758
9,555,000
1,609,049
3,345,000
257,137
$ 30,360,045 $ 10,924,795
Revenue Bonds and Certificates of Obligation
Fiscal Year Ending
September 30,
2013
2014
2015
2016
2017
2018-2022
2023-2027
2028-2032
Total
Business -Type Activities
Principal Interest
$ 4,074,749
$ 1,911,788
4,506,435
1,743,566
4,701,931
1,553,563
4,808,844
1,360,751
4,881,821
1,171,674
13,894,836
3,719,660
8,474,102
1,726,105
4,266,640
263,989
$ 49,609,358 $ 13,451,096
Total
$ 2,647,306
2,646,403
2,656,650
2,650,525
2,655,012
13,262,758
11,164,049
3,602,137
$ 41,284,840
Total
$ 5,986,537
6,250,001
6,255,494
6,169,595
6,053,495
17,614,496
10,200,207
4,530,629
$ 63,060,454
46
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
NOTE 5. LONG-TERM DEBT— CONTINUED
Contract Revenue Obliaations
Business -Type Activities
Fiscal Year Ending
September 30,
Principal
Interest
Total
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
$ 1,755,000
$ 225,638 $
1,980,638
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, 2012, the following outstanding bonds were legally
defeased:
Series
Type
Amount
1994
Sales Tax Revenue Bonds
$ 460,000
2004
Certificates of Obligation
305,000
2004
G.O. Refunding Bonds
4,290,000
2004-A
Certificates of Obligation
295,000
2006
Certificates of Obligation
3,505,000
$ 8,855,000
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 2012 were as follows:
Transfer In
Transfer Out
Amount
Purpose
General capital projects fund
General fund
$ 3,000,000
To fund a reserve for a future multipurpose facility
General fund
Non major governmental funds
32,516
Fund indirect charges
General fund
Non major governmental funds
121,934
Fund attractive spaces & future art projects
General fund
Non major governmental funds
51,460
Fund indirect charges
Non major governmental funds
Non major governmental funds
150,000
To fund various stormwater maintenance
General capital projects fund
Non major governmental funds
100,000
To fund various drainage projects
General obligation debt service fund
Non major governmental funds
193,294
For debt service and indirect charges
To fund the debt repayment for bonds issued for
General obligation debt service fund
Tax increment financing district
4,181,268
TIF projects
General fund
Non major governmental funds
185,953
To fund indirect charges
SPDC capital projects fund
Non major governmental funds
2,000,000
To assist with the funding of large park projects
Non major governmental funds
Non major governmental funds
2,713,835
To pay the principal and interest on debt incurred
General fund
Non major governmental funds
4,855
To fund indirect charges
General fund
Crime control district operating fund
176,800
To fund indirect charges
Crime control district capital projects fund
Crime control district operating fund
4,000,000
To fund construction of DPS North
To pay the debt service for bonds issued on the
General obligation debt service fund
Crime control district operating fund
1,972,800
Districts' behalf
To fund shared portion of North Park
SPDC capital projects fund
Crime control district capital projects fund
517,931
parking/driveway
General fund
Water and sewer fund
890,220
Fund indirect charges
$ 20,292,866
47
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
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, 2011 valuation is effective for the rates
beginning January 2013).
Annual Pension Cost
Contributions by the City were $2,068,611 for the year ended September 30, 2012, or 12.4% of
the covered payroll of $16,708,049 as required by the actuarial valuation. The total fiscal year
2012 payroll was $17,451,039.
48
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
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 /2011
12/31 /2010
12/31 /2009
Actuarial cost method
Projected Unit Credit
Projected Unit Credit
Projected Unit Credit
Amortization method
Level %
Level %
Level %
26.2 years -closed
27.2 years -closed
28.3 years -closed
Amortization period
period
period
period
10-year smoothed
10-year smoothed
10-year smoothed
Asset valuation method
market
market
market
Assumptions
Investment return
7.0%
7.0%
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)
1.5% (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 Fundina Information
Actuarial valuation date
Actuarial Value of Assets
Actuarial Accrued Liability
Unfunded (Overfunded) Actuarial
Accrued Liability (UAAL)
Funded ratio
Annual Covered Payroll
UAAL as a Percentage of Covered Payroll
12/31 / 11
12/31 / 10
12/31 /09
$ 46,290,272
$
41,253,618
$
31,327,058
$ 55,624,216
$
50,923,328
$
42,184,877
$ 9,333,944
$
9,669,710
$
10,857,819
83.2%
81.0%
74.3%
$ 16,708,049
$
16,272,225
$
16,655,653
55.90%
59.40%
65.20%
The City's net pension obligation (NPO) for TMRS at September 30, 2012, 2011 and 2010 is
calculated as follows:
NPO at the beginning of the period
Annual required contribution
Contributions made (100%)
NPO at the end of the period
9/30/2012 9/30/2011 9/30/2010
2,068,611 2,193,609 2,129,451
2,068,611 2,193,609 2,129,451
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 847 municipalities having the benefit plan administered by TMRS.
Each of the 847 municipalities has an annual, individual actuarial valuation performed. All
assumptions for the December 31, 2011 valuations are contained in the 2011 TMRS Comprehensive
Annual Financial Report, a copy of which may be obtained by writing to P.O. Box 149153, Austin,
Texas 78714-9153.
49
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
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 2012,
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 three
years is shown below:
Annual required contribution
Interest on prior year Net OPEB obligation
Adjustment to annual required contribution
Annual OPEB cost
Contributions made
Increase (decrease) in net OPEB obligation
Net Obligation (asset) - beginning of year
Net Obligation (asset) - end of year
Percentage of OPEB costs contributed
2012 2011 2010
$ 155,999 $ 155,999 $ 128,502
(4,530) (3,090) -
4,530 3,090 -
155,999 155,999 128,502
180,000 180,000 180,000
(24,001) (24,001) (51,498)
(75,499) (51,498) -
$ (99,500) $ (75,499) $ (51,498)
115.39% 115.39% 18.85%
50
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
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 (668,502)
Unfunded actuarial accrued liability $ 432,438
Funded ratio 60.7%
Covered payroll $ 16,708,049
Unfunded actuarial accrued liability
as a percentage of covered payroll 2.59%
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.
51
CITY OF SOUTHLAKE, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
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 ("the
Pool") 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, 2012 were $1,130,363.
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, 2012 up through
March 14, 2013, the date the financial statements were available to be issued. During this period,
there were no subsequent events requiring disclosure.
NOTE 13. FUTURE REPORTING REQUIREMENTS
Statement No. 63, "Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of
Resources, and Net Position" and Statement No. 65 "Items Previously Reported as Assets and
Liabilities." — Statement No. 63 will standardize the presentation of deferred outflows of resources and
deferred inflows of resources and their effect on a government's net position. The objective of
Statement No. 65 is to either properly classify certain items that were previously reported as assets
and liabilities as deferred outflows of resources or deferred inflows of resources or to recognize
certain items that were previously reported as assets and liabilities as outflows of resources or inflows
of resources. These statements will become effective for the City in fiscal year 2013 and 2014,
respectively.
Statement No. 68, "Accounting and Financial Reporting for Pensions -an amendment of GASB
Statement No. 27." — This statement changes the focus of pension accounting for employers from
whether they are responsibly funding their plan over time to a point -in -time liability that is reflected in
the employer's financial statements for any actuarially unfunded portion of pension benefits earned to
date. This statement will become effective for the City in fiscal year 2015.
Management has not yet determined the effect of these statements on the financial statements.
52
REQUIRED SUPPLEMENTARY
INFORMATION
BUDGETARY COMPARISON
GENERALFUND
CITY OF SOUTHLAKE, TEXAS
GENERALFUND
BUDGETARY COMPARISON SCHEDULE (GAAP BASIS)
FOR THE YEAR ENDED SEPTEMBER 30, 2012
REVENUES
Ad valorem taxes, penalties and interest
Franchise taxes
Municipal sales and mixed beverage tax
License, permits and fees
Charges for services
Fines and forfeitures
Grants
Interest earned
Miscellaneous
TOTAL REVENUES
EXPENDITURES
Current:
General government
City secretary/mayor
City manager's office
Human resources
Support services
Economic development
Finance
Municipal court
Teen court
Information technology
Public safety
Police services
Fire services
Public safety support
Building inspection
Public works
Public works administration
Streets and drainage
Planning
Culture and recreation
Community services
Parks and recreation
Library services
BUDGETED AMOUNTS
EXHIBIT A-1
VARIANCE WITH
FINAL BUDGET -
POSITIVE
ACTUAL (NEGATIVE)
$ 17,433,230
$ 17,718,230
$ 17,690,312 $
(27,918)
2,693,282
2,651,751
2,598,074
(53,677)
8,120,000
9,020,000
9,443,239
423,239
753,300
1,944,900
2,111,754
166,854
1,541,580
1,727,530
1,805,022
77,492
1,015,000
1,015,000
1,119,050
104,050
104,070
104,070
117,810
13,740
108,500
85,000
61,622
(23,378)
250,000
281,500
330,143
48,643
32,018,962
34,547,981
35,277,026
729,045
417,879
390,143
361,488
28,655
610,092
603,318
594,713
8,605
408,666
402,449
390,831
11,618
2,842,111
2,949,312
2,650,511
298,801
216,744
211,744
193,915
17,829
1,141,146
1,105,334
1,091,833
13,501
638,871
627,701
559,154
68,547
151,554
145,573
133,585
11,988
2,001,109
1,989,719
1,772,117
217,602
5,771,074
5,897,432
5,621,650
275,782
5,693,953
5,764,622
5,597,946
166,676
1,544,657
1,542,639
1,516,999
25,640
1,139,644
873,830
816,771
57,059
1,545,932
1,546,026
1,361,600
184,426
1,741,729
1,750,479
1,776,764
(26,285)
910,916
913,002
815,391
97,611
664,229
654,611
611,919
42,692
4,603,839
4,610,705
4,297,051
313,654
686,127
667,466
665,384
2,082
TOTAL EXPENDITURES 32,730,272 32,646,105 30,829,622 1,816,483
Excess (deficiency) of revenues over expenditures (711,310) 1,901,876 4,447,404 2,545,528
OTHER FINANCING SOURCES (USES)
Transfers from other funds
Transfers to other funds
TOTAL OTHER FINANCING SOURCES (USES)
NET CHANGE IN FUND BALANCE
FUND BALANCES, BEGINNING OF YEAR
FUND BALANCES, END OF YEAR
See Notes to Required
Supplementary Information
1,366,303 1,495,632 1,463,738 (31,894)
(3,000,000) (3,000,000) (3,000,000)
(1,633,697) (1,504,368) (1,536,262) (31,894)
(2,345,007) 397,508 2,911,142 2,513,634
17,048,465 17,048,465 17,048,465
$ 14,703,458 $ 17,445,973 $ 19,959,607 $ 2,513,634
53
CITY OF SOUTHLAKE, TEXAS
CRIME CONTROL DISTRICT SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE (GAAP BASIS)
FOR THE YEAR ENDED SEPTEMBER 30, 2012
REVENUES:
Municipal sales tax
Interest
TOTAL REVENUES
EXPENDITURES
Police services
BUDGETED AMOUNTS
ORIGINAL FINAL
EXHIBIT A-2
VARIANCE WITH
FINAL BUDGET -
POSITIVE
ACTUAL (NEGATIVE)
$ 4,400,000 $ 4,850,000 $ 4,724,779 $ (125,221)
20,000 13,500 1,053 (12,447)
4,420,000 4,863,500 4,725,832 (137,668)
279,789 304,577 244,585 59,992
Excess of revenues
over expenditures
4,140,211
4,558,923
4,481,247
OTHER FINANCING SOURCES (USES)
Transfers to other funds
(2,149,600)
(6,149,600)
(6,149,600)
TOTAL OTHER FINANCING
SOURCES (USES)
(2,149,600)
(6,149,600)
(6,149,600)
Net change in fund balance
1,990,611
(1,590,677)
(1,668,353)
(77,676)
(77,676)
Fund balance at
beginning of year 6,830,795 6,830,795 6,830,795 -
Fund balance at
end of year $ 8,821,406 $ 5,240,118 $ 5,162,442 $ (77,676)
See Notes to Required
Supplementary Information
54
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, 2012
REVENUES
Ad valorem taxes, penalties and interest
Interest
Total revenues
EXPENDITURES:
Intergovernmental
Total expenditures
Excess of revenues
over expenditures
OTHER FINANCING SOURCES (USES)
Transfers to other funds
Total other financing sources (uses)
Excess (deficiency) of revenues over
expenditures and other financing uses
Fund balance at
beginning of year
Fund balance at
end of year
See Notes to Required
Supplementary Information
VARIANCE WITH
BUDGETED AMOUNTS FINAL BUDGET -
POSITIVE
ORIGINAL FINAL ACTUAL (NEGATIVE)
$ 6,753,057 $ 6,523,327 $ 6,523,327 $ -
15,000 8,500 1,063 (7,437)
6,768,057 6,531,827 6,524,390 (7,437)
- 2,972,849 2,972,849
- 2,972,849 2,972,849
6,768,057 3,558,978 3,551,541 (7,437)
(5,434,991) (4,181,268) (4,181,268) -
(5,434,991) (4,181,268) (4,181,268) -
1,333,066 (622,290) (629,727) (7,437)
5,348,592 5,348,592 5,348,592 -
$ 6,681,658 $ 4,726,302 $ 4,718,865 $ (7,437)
55
CITY OF SOUTHLAKE, TEXAS
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
YEAR ENDED SEPTEMBER 30, 2012
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.
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.
Budgetary data for the Police, Parks and Recreation, Court Security, Court Technology,
Library, Storm Water Maintenance, Oil and Gas Special Revenue Funds, Commercial
Vehicle Enforcement, 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, 2012 were:
General Fund:
Streets and drainage
($26,285)
56
EXHIBIT A-4
CITY OF SOUTHLAKE, TEXAS
CONDITION RATING OF STREET SYSTEM
SEPTEMBER 30, 2012
CONDITION OF ROADWAY SYSTEM
Index
2012
2010
RCI
11.0
6.4
SDI
10.0
9.3
PQI
9.4
8.5
COMPARISON OF NEEDED -TO -ACTUAL MAINTENANCE/PRESERVATION
Needed
Actual
Difference
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
(224,335)
2012
$1.250.000
1,252,394
2,394
Total
S6,250,000
S5,902,532
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 the 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 was the City's policy to maintain a PQI of 7.3 until 2012 when the City increased the
minimum PQI to 7.8 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.
57
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.
58
CITY OF SOUTHLAKE, TEXAS
GENERAL OBLIGATION DEBT SERVICE FUND
BUDGETARY COMPARISON SCHEDULE (GAAP BASIS)
FOR THE YEAR ENDED SEPTEMBER 30, 2012
REVENUES:
Ad valorem taxes
Interest
Total revenues
EXPENDITURES:
Principal retirement
Interest and fiscal charges
Total expenditures
Deficiency of revenues
over expenditures
OTHER FINANCING SOURCES (USES)
BUDGETED AMOUNTS
ORIGINAL FINAL ACTUAL
EXHIBIT B-1
VARIANCE WITH
FINAL BUDGET -
POSITIVE
(NEGATIVE)
$ 6,823,120 $ 6,988,120 $ 6,923,560 $ (64,560)
45,000 45,000 15,980 (29,020)
6,868,120 7,033,120 6,939,540 (93,580)
7,577,067 8,506,753 8,506,754 (1)
4,178,026 4,003,972 4,228,285 (224,313)
11,755,093 12,510,725 12,735,039 (224,314)
(4,886,973) (5,477,605) (5,795,499) (317,894)
Proceeds from refunding bonds - - 9,690,000
Payment to refund bond escrow agent - - (10,788,860)
Premium on bonds issued - - 1,287,364
Transfers from other funds 6,347,362 6,347,362 6,347,362
9,690,000
(10,788,860)
1,287,364
Total other financing sources (uses) 6,347,362 6,347,362 6,535,866 188,504
Excess of revenues and other financing
sources over expenditures 1,460,389 869,757 740,367 (129,390)
Fund balance, beginning of year 10,363,056 10,363,056 10,363,056 -
Fund balance, end of year $ 11,823,445 $11,232,813 $ 11,103,423 $ (129,390)
59
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.
Commercial Vehicle Enforcement Fund- The Commercial Vehicle Enforcement Fund is used to
account for the fees assessed for commercial vehicle violations.
.11
DEBT SERVICE FUNDS
The Debt Service Funds are utilized to account for the accumulation of financial resources for, and the
payment of, 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.
61
CITY OF SOUTHLAKE, TEXAS
NON -MAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
SEPTEMBER 30, 2012
ASSETS
Cash and cash equivalents
Investments
Accounts receivable
Sales tax receivable
Interest receivable
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable
Accrued liabilities
TOTAL LIABILITIES
FUND BALANCES
Restricted for:
Municipal court expenditures
Debt service
Capital projects
Committed for:
Police expenditures
Parks and recreation
Storm water expenditures
Oil and gas drilling
Library
TOTAL FUND BALANCES
TOTAL LIABILITIES AND FUND BALANCES
SPECIAL REVENUE
Southlake
Parks Parks
and Parks Development
Police Recreation Dedication Corporation
$ 9,154 $ 29,398 $ 107,451 $ 3,343,683
3,299 10,173 11,389 2,005,800
- - - 12,819
- - - 871,945
- - - 1,842
$12,453 $ 39,571 $ 118,840 $ 6,236,089
$ 6,459 $ - $ - $ 7,720
- - - 5,162
6,459 - - 12,882
5,994 - - -
- 39,571 118,840 6,223,207
5,994 39,571 118,840 6,223,207
$12,453 $ 39,571 $ 118,840 $ 6,236,089
62
SPECIAL REVENUE
EXHIBIT C-1
CONTINUED
Storm
Hotel
Water
Court
Court
Red Light
Occupancy
Utility
Security
Technology
Library
Camera
$ 920,963
$1,955,716
$344,258
$ 233,893
$ 2,566
$ 935,183
280,525
134,792
114,888
76,992
1,425
149,610
-
187,069
-
-
-
111,960
68,738
-
-
-
-
-
59
28
24
16
-
-
$ 1,270,285
$2,277,605
$459,170
$ 310,901
$ 3,991
$ 1,196,753
$ 17,212 $ 22,194 $
6,606 5,238
23,818 27,432
$ 569 $ 396,923
- 1,862
569 398,785
- - 459,170 310,901 - -
1,246,467 2,250,173 - - - -
- - - - - 797,968
- - - - 3,422 -
1,246,467 2,250,173 459,170 310,901 3,422 797,968
$ 1,270,285 $2,277,605 $459,170 $ 310,901 $ 3,991 $ 1,196,753
63
CITY OF SOUTHLAKE, TEXAS
NON -MAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
SEPTEMBER 30, 2012
EXHIBIT C-1
CONCLUDED
SPECIAL
DEBT
CAPITAL
REVENUE
SERVICE
PROJECTS
Southlake
Tax
TOTAL
Commercial
Parks
Increment
NON -MAJOR
Storm Water
Oil and
Vehicle
Development
Financing
GOVERNMENTAL
Maintenance
Gas
Enforcement
Corporation
District
FUNDS
ASSETS
Cash and cash equivalents
$
374,882
$ 39,737
$
3,090
$ 1,554,396
$ 11,759
$ 9,866,129
Investments
76,229
13,474
-
-
7,059
2,885,655
Accounts receivable
16
-
-
311,864
Sales tax receivable
-
940,683
Interest receivable
-
-
-
-
1,969
TOTAL ASSETS
$
451,127
$ 53,211
$
3,090
$ 1,554,396
$ 18,818
$ 14,006,300
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable
$
$
$
-
$
$
$ 451,077
Accrued liabilities
200
19,068
TOTAL LIABILITIES
200
470,145
FUND BALANCES
Restricted for:
Municipal court expenditures
-
770,071
Debt service
1,554,396
1,554,396
Capital projects
-
-
18,818
3,515,458
Commited for:
Police expenditures
2,890
-
806,852
Parks and recreation
-
6,381,618
Storm water expenditures
451,127
451,127
Oil and gas drilling
-
53,211
53,211
Library
-
-
-
-
3,422
TOTAL FUND BALANCES
451,127
53,211
2,890
1,554,396
18,818
13,536,155
TOTAL LIABILITIES AND
FUND BALANCES
$
451,127
$ 53,211
$
3,090
$ 1,554,396
$ 18,818
14,006,300
•,
CITY OF SOUTHLAKE, TEXAS
NON -MAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED SEPTEMBER 30, 2012
SPECIAL REVENUE
REVENUES
Municipal sales tax
Licenses, permits and fees
Fines and forfeitures
Interest
Contributions
Miscellaneous
Total revenues
EXPENDITURES
Current:
General government
Court technology
Public safety
Police services
Cultural and recreation
Parks and recreation
Library services
Capital outlay
Debt service:
Principal retirement
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues over
expenditures
OTHER FINANCING SOURCES (USES)
Transfers from other funds
Transfers to other funds
Total other financing sources (uses)
NET CHANGE IN FUND BALANCES
FUND BALANCES (DEFICIT),
BEGINNING OF YEAR
FUND BALANCES, END OF YEAR
Southlake
Parks Parks
and Parks Development
Police Recreation Dedication Corporation
$ - $ - $ - $ 5,061,008
- - 16,935 -
6 20 22 21,544
- 2,194 - -
- - - 153,824
6 2,214 16,957 5,236,376
- 3,043 - 382,442
- 3,043.00 - 382,442
6 (829) 16,957 4,853,934
(4,855) - - (4,899,788)
(4,855) - - (4,899,788)
(4,849) (829) 16,957 (45,854)
10,843 40,400 101,883 6,269,061
$ 5,994 $ 39,571 $ 118,840 $ 6,223,207
65
EXHIBIT C-2
CONTINUED
SPECIAL REVENUE
Storm
Hotel
Water
Court
Court
Red Light
Occupancy
Utility
Security
Technology Library
Camera
$ 847,452 $
-
$ -
$ - $ -
$ -
-
1,302,911
-
- -
-
-
-
30,377
40,457 -
1,114,633
603
290
247
165 3
322
-
-
-
- 8,514
-
848,055
1,303,201
30,624
40,622 8,517
1,114,955
- - - 8,500 - -
- - - 9,046 - 885,119
621,534 - - - - -
- - - - 8,879 -
- 464,558 21,888 - - -
621,534 464,558 21,888 17,546 8,879 885,119
226,521 838,643 8,736 23,076 (362) 229,836
(154,450) (494,754) - - - -
(154,450) (494,754) - - - -
72,071 343,889 8,736 23,076 (362) 229,836
1,174,396 1,906,284 450,434 287,825 3,784 568,132
$ 1,246,467 $ 2,250,173 $ 459,170 $ 310,901 $ 3,422 $ 797,968
CITY OF SOUTHLAKE, TEXAS
NON -MAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED SEPTEMBER 30, 2012
EXHIBIT C-2
CONCLUDED
SPECIAL
DEBT
CAPITAL
REVENUE
SERVICE
PROJECTS
Southlake
Tax TOTAL
Commercial
Parks
Increment NON -MAJOR
Storm Water Oil and
Vehicle
Development
Financing GOVERNMENTAL
Maintenance Gas
Enforcement
Corporation
District FUNDS
REVENUES
Municipal sales tax $ $
$
$
$ $ 5,908,460
Licenses, permits and fees
1,319,846
Fines and forfeitures
2,890
1,188,357
Interest 164 26
-
2,166
14 25,592
Contributions -
-
2,194
Miscellaneous
162,338
Total revenues 164 26
2,890
2,166
14 8,606,787
EXPENDITURES
Current:
General government
Court technology
Public safety
Police services
Cultural and recreation
Parks and recreation
Library services
Capital outlay
Debt service:
Principal retirement
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues over
expenditures
OTHER FINANCING SOURCES (USES)
Transfers from other funds
Transfers to other funds
Total other financing sources (uses)
NET CHANGE IN FUND BALANCES
FUND BALANCES (DEFICIT),
BEGINNING OF YEAR
FUND BALANCES, END OF YEAR
8,500
894,165
- 1,007,019
8,879
- 7,729 494,175
1,395,000 - 1,395,000
1,289,255 1,289,255
2,684,255 7,729 5,096,993
164
26
2,890 (2,682,089)
(7,715)
3,509,794
150,000
- 2,713,835
2,863,835
(5,553,847)
150,000
- 2,713,835
(2,690,012)
150,164
26
2,890 31,746
(7,715)
819,782
300,963
53,185
- 1,522,650
26,533
12,716,373
$ 451,127
$ 53,211 $
2,890 $ 1,554,396 $
18,818 $
13,536,155
67
CITY OF SOUTHLAKE, TEXAS
PARKS DEDICATION SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE (GAAP BASIS)
FOR THE YEAR ENDED SEPTEMBER 30, 2012
REVENUES:
Park fees
Interest
Total revenues
Excess of revenues over expenditures
Fund balance at
beginning of year
Fund balance at
end of year
BUDGETED AMOUNTS
ORIGINAL FINAL
EXHIBIT C-3
VARIANCE WITH
FINAL BUDGET -
POSITIVE
ACTUAL (NEGATIVE)
$ 30,000 $ 30,000 $ 16,935 $ (13,065)
1,500 1,500 22 (1,478)
31,500 31,500 16,957 (14,543)
31,500 31,500 16,957 (14,543)
101,883 101,883 101,883 -
$ 133,383 $133,383 $118,840 $ (14,543)
;
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, 2012
REVENUES:
Municipal sales tax
Miscellaneous
Interest
Total revenues
EXPENDITURES
Parks and recreation
Excess of revenues
over expenditures
OTHER FINANCING SOURCES (USES):
BUDGETED AMOUNTS
ORIGINAL FINAL ACTUAL
VARIANCE WITH
FINAL BUDGET -
POSITIVE
(NEGATIVE)
$ 4,480,000 $ 4,480,000 $ 5,061,008 $ 581,008
153,816 153,816 153,824 8
15,000 7,500 21,544 14,044
4,648,816 4,641,316 5,236,376 595,060
356,951 485,993 382,442 103,551
4,291,865 4,155,323 4,853,934 698,611
Transfers to other funds (4,899,788) (4,899,788) (4,899,788) -
Excess (deficiency) of
revenues over expenditures
and other uses (607,923) (744,465) (45,854) 698,611
Fund balance at
beginning of year 6,269,061 6,269,061 6,269,061 -
Fund balance at
end of year $ 5,661,138 $ 5,524,596 $ 6,223,207 $ 698,611
• •
CITY OF SOUTHLAKE, TEXAS
HOTEL OCCUPANCY SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE (GAAP BASIS)
FOR THE YEAR ENDED SEPTEMBER 30, 2012
BUDGETED AMOUNTS
ORIGINAL FINAL
EXHIBIT C-5
VARIANCE WITH
FINAL BUDGET -
POSITIVE
ACTUAL (NEGATIVE)
REVENUES:
Municipal sales tax
$ 741,105
$ 807,891
$ 847,452 $
39,561
Interest
5,000
5,000
603
(4,397)
Total revenues
746,105
812,891
848,055
35,164
EXPENDITURES:
Parks and recreation
697,488
678,488
621,534
56,954
Excess of revenues
over expenditures
48,617
134,403
226,521
92,118
OTHER FINANCING SOURCES (USES):
Transfers to other funds
(141,760)
(154,450)
(154,450)
-
Excess of revenues over
expenditures and other uses
Fund balance at
beginning of year
Fund balance at
end of year
(93,143) (20,047) 72,071
1,174,396 1,174,396 1,174,396
92,118
$ 1,081,253 $ 1,154,349 $ 1,246,467 $ 92,118
70
CITY OF SOUTHLAKE, TEXAS
STORM WATER UTILITY SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE (GAAP BASIS)
FOR THE YEAR ENDED SEPTEMBER 30, 2012
REVENUES:
Interest
Licenses, permits and fees
Total revenues
EXPENDITURES:
Capital outlay
Excess of revenues
over expenditures
OTHER FINANCING SOURCES (USES):
Transfers to other funds
Excess of revenues over
expenditures and other uses
Fund balance at
beginning of year
Fund balance at
end of year
BUDGETED AMOUNTS
ORIGINAL FINAL
EXHIBIT C-6
VARIANCE WITH
FINAL BUDGET -
POSITIVE
ACTUAL (NEGATIVE)
$ 8,500
$ 8,500 $
290 $
(8,210)
1,260,000
1,278,000
1,302,911
24,911
1,268,500
1,286,500
1,303,201
16,701
696,741
628,820
464,558
164,262
571,759 657,680 838,643
(494,034) (494,754) (494,754)
77,725 162,926 343,889
180,963
180,963
1,906,284 1,906,284 1,906,284 -
$1,984,009 $2,069,210 $2,250,173 $ 180,963
71
CITY OF SOUTHLAKE, TEXAS
RED LIGHT CAMERA SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE (GAAP BASIS)
FOR THE YEAR ENDED SEPTEMBER 30, 2012
EXHIBIT C-7
VARIANCE WITH
BUDGETED AMOUNTS
FINAL BUDGET -
POSITIVE
ORIGINAL
FINAL
ACTUAL
(NEGATIVE)
REVENUES:
Fines and forfeitures
$ 1,186,284
$ 1,186,284
$ 1,114,633
$ (71,651)
Interest
2,500
2,500
322
(2,178)
Total revenues
1,188,784
1,188,784
1,114,955
(73,829)
EXPENDITURES:
Public safety
1,060,837
1,060,837
885,119
175,718
Excess of revenues
over expenditures
127,947
127,947
229,836
101,889
Fund balance, beginning of year
568,132
568,132
568,132
-
Fund balance, end of year
$ 696,079
$ 696,079
$ 797,968
$ 101,889
72
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, 2012
VARIANCE WITH
BUDGETED AMOUNTS FINAL BUDGET -
POSITIVE
ORIGINAL FINAL ACTUAL (NEGATIVE)
REVENUES:
Interest $ 16,000 $ 16,000 $ 2,166 $ (13,834)
Total revenues 16,000 16,000 2,166 (13,834)
EXPENDITURES:
Principal retirement 1,525,000 1,525,000 1,395,000 130,000
Interest and fiscal charges 1,285,098 1,285,098 1,289,255 (4,157)
Total expenditures 2,810,098 2,810,098 2,684,255 125,843
Deficiency of revenues over expenditures (2,794,098) (2,794,098) (2,682,089) 112,009
OTHER FINANCING SOURCES:
Transfers from other funds
Total other financing sources
Excess (deficiency) of revenues
and other financing sources
over expenditures
Fund balance, beginning of year
Fund balance, end of year
2,713,835 2,713,835 2,713,835
2,713,835 2,713,835 2,713,835
(80,263) (80,263) 31,746
112,009
1,522,650 1,522,650 1,522,650 -
$ 1,442,387 $ 1,442,387 $ 1,554,396 $ 112,009
73
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.
74
CITY OF SOUTHLAKE, TEXAS
CASH ESCROW AGENCY FUND
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2012
FIT*] =11 V
Cash and cash equivalents
Investments
Accrued interest receivable
TOTAL ASSETS
LIABILITIES
Due to builders
TOTAL LIABILITIES
Balance at
Beginning
of Year Additions
Deletions
EXHIBIT F-1
Balance at
End
$ 44,144 $ 6,682 $ - $ 50,826
23,902 - 6,595 17,307
54 - 50 4
$ 68,100 $ 6,682 $ 6,645 $ 68,137
$
68,100
$
37
$
- $
68,137
$
68,100
$
37
$
- $
68,137
75
CITY OF SOUTHLAKE, TEXAS EXHIBIT G-1
COMPARATIVE SCHEDULES OF CAPITAL ASSETS BY SOURCE
SEPTEMBER 30, 2012 and 2011
General capital assets
Land and improvements
Buildings and improvements
Equipment
Infrastructure
Construction in progress
Total capital assets
Investment in general capital assets
Capital projects funds
General and other fund revenues
Gifts
Total investment in capital assets
2012
$ 104,404,030
65,400,298
20,269,481
236,243,574
14,980,805
2011
$ 100,258,130
63,657,352
19,766,422
229,333,636
17,799,563
$ 441,298,188 $ 430,815,103
$ 325,751,121
76,019,019
39,528,048
$ 316,254,901
75,550,770
39.009.432
$ 441,298,188 $ 430,815,103
76
CITY OF SOUTHLAKE, TEXAS EXHIBIT G-2
SCHEDULE OF CHANGES IN CAPITAL ASSETS BY FUNCTION AND ACTIVITY
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012
Capital
Capital
Assets
Assets
October 1,
September 30,
Function and Activity
2011
Additions
Deductions
2012
General government
$ 187,161,891
$ 138,424
$ -
$ 187,300,315
Public safety
43,212,014
1,576,425
(403,688)
44,384,751
Public works
200,441,198
25,118,600
(15,946,676)
209,613,122
Total capital assets
$ 430,815,103
$26,833,449
$ (16,350,364)
$ 441,298,188
General
Public
Public
Government
Safety
Works
Total
Land and improvements
$ 2,418,798
$ 4,303,924
$ 97,681,308
$ 104,404,030
Buildings and improvements
25,818,684
33,093,377
6,488,237
65,400,298
Equipment
5,994,193
4,561,944
9,713,344
20,269,481
Infrastructure
153,068,640
114,415
83,060,519
236,243,574
Construction in Progress
-
2,311,091
12,669,714
14,980,805
Total
$ 187,300,315
$44,384,751
$ 209,613,122
$ 441,298,188
77
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 TEN 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
-
-
-
-
Totalbusiness-typeactivities
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
79
TABLE 2
2008 2009 2010 2011 2012
$ 4,406,913
$ 11,068,965
$ 11,814,836
$ 13,754,529
13,277,006
12,770,012
12,920,263
14,885,499
15,144,173
15,891,911
8,669,156
5,840,432
5,767,688
6,279,687
6,399,819
5,911,730
6,439,100
7,287,434
7,897,173
8,158,291
5,506,967
5,854,931
6,515,269
5,638,272
5,865,798
37,264,778
42,123,691
46,270,726
48,713,834
49,592,825
17,689,865 18,066,346 18,948,438 20,724,651 22,530,688
17,689,865 18,066,346 18,948,438 20,724,651 22,530,688
$ 54,954,643 $ 60,190,037 $ 65,219,164 $ 69,438,485 $ 72,123,513
$ 1,340,864 $
1,949,993
$ 2,476,000 $
2,616,321
2,575,773
2,843,923
2,633,437
2,706,847
2,818,913
3,744,708
199,833
68,369
240,916
71,129
179,094
1,269,571
1,369,725
1,387,558
1,384,823
1,400,794
241,144
239,364
688,803
532,100
200,434
5,690,613
1,833,160
5,994,206
2,309,613
518,617
11,585,948
8,094,048
13,494,330
9,732,899
8,619,420
18,543,025 19,321,095 18,897,356 22,571,056 22,451,738
3,748,161 2,212,867 2,578,400 1,433,278 1,214,395
22,291,186 21,533,962 21,475,756 24,004,334 23,666,133
$ 33,877,134 $ 29,628,010 $ 34,970,086 $ 33,737,233 $ 32,285,553
$ (25,678,830) $ (34,029,643) $ (32,776,396) $ (38,980,935) $ (40,973,405)
4,601,321 3,467,616 2,527,318 3,279,683 1,135,445
$ (21,077,509) $ (30,562,027) $ (30,249,078) $ (35,701,252) $ (39,837,960)
$ 28,950,945
$ 30,911,161
$ 32,298,360
$ 31,568,583
31,166,847
18,781,043
17,256,272
17,610,781
18,969,870
20,076,478
2,654,701
2,816,111
2,606,248
2,783,279
2,598,074
3,128,226
1,703,418
414,852
258,556
232,722
-
167,127
21,465
26,741
91,134
229,436
341,957
596,093
791,830
890,220
52,023
339,510
428,804
658,902
463,681
53,796,374
53,535,556
53,976,603
55,057,761
55,519,156
594,891 953,739 155,173 123,872 46,212
(229,436) 2,187 (596,093) (791,830) (890,220)
10,989 (339,510) 71,871 42,463 10,811
376,444 616,416 (369,049) (625,495) (833,197)
$ 54,172,818 $ 54,151,972 $ 53,607,554 $ 54,432,266 $ 54,685,959
$ 28,117,544 $ 19,505,913 $ 21,200,207 $ 16,076,826 $ 14,545,751
4,977,765 4,084,032 2,158,269 2,654,188 302,248
$ 33,095,309 $ 23,589,945 $ 23,358,476 $ 18,731,014 $ 14,847,999
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CITY OF SOUTHLAKE, TEXAS TABLE 14
PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO
(UNAUDITED)
2012
Employer
Sabre Holdings
CISD - Administration Building
Verizon Wireless
Central Market
City of Southlake
IQ Pipeline, LLC
Hilton Dallas/Southlake Town Sq
Century 21 Mike Bowman, Inc.
Tri Dal Ltd.
Variosystems Inc.
Cheesecake Factory
Lowe's Home Improvement
Allied Oil & Gas Services
Texas Health Harris Methodist
Ameristar Information Network
Costco Wholesale
Total
Total Southlake Daytime Employees
Percentage of
Total City
Employees
Employment
2,700
19.58%
1,072
7.77%
619
4.49%
350
2.54%
310
2.25%
250
1.81%
218
1.58%
200
1.45%
194
1.41%
170
1.23%
161
1.17%
145
1.05%
140
1.02%
135
0.98%
125
0.91%
107
0.78%
6,896
50.01 %
Source: Southlake Economic Development
13.790
2003
Percentage
of Total City
Employer
Employees
Employment
Sabre, Inc.
1,500
17.68%
Carroll Independent School District
874
10.30%
Tri-Dal, LTD
450
5.31%
Verizon Wireless
450
5.31%
City of Southlake
260
3.07%
Wal-Mart
250
2.95%
Costco Wholesale
180
2.12%
Home Depot
131
1.54%
Lowe's Home Improvement
115
1.36%
Kroger
100
1.18%
Total 4,310 50.81 %
Total Southlake Daytime Employees 8,482
93
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