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Home My WebLink AboutTown Audit 09-30-1998TOWN OF WESTLAKE, TEXAS PRINCIPAL OFFICERS SEPTEMBER 30, 1998 MAYOR Scott Bradley ALDERMEN Charla Bradshaw, Mayor Pro -Tem Abe Bush Jerry Dinsmore David Loeser Fred Held CITY SECRETARY Ginger Crosswy it Charles Haynes CPA 1903 Central Drive, Suite 300 Bedford, Texas 76021 (817) 545-1300 / (214) 748-2222 INDEPENDENT AUDITOR'S REPORT To the Honorable Mayor and Aldermen Town of Westlake, Texas We have audited the accompanying general purpose financial statements of the Town of Westlake, Texas as of and for the year ended September 30, 1998. These financial statements are the responsibility of the entity's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Town of Westlake, Texas at September 30, 1998 and the results of its operations and changes in financial position for the year then ended in conformity with generally accepted accounting principles. Respectfully submitted, Charles Haynes CPA March 18, 1999 0) TOWN(]FWE,STLAKE, TEXAS COMBINED BALANCE SHEET ALL FUND TYPES SEPTEMBER 30, l998 September 3O, l99Q September 30` lVV7 PUBLIC FIXED ASSET { M GBNBItALFDNDG FACO~l7lB8 ACCOUNT ONLY) ONLY) Operating Development 7SHC CORP. GROUP TOTAL TOTAL� ASSETS Cash % 1,646`872 $ 2,172`862 $ 248,098 $ 10,268 $ ' $ 4.078,180 $ 2'402,476 Receivables Contracted Receipts - - 125,313 ' - 125'313 76,151 MieccUuoonno - - 3,500 - - 3,500 - Office Equipment 18`045 18,045 14,107 Utility Infrastructure Costs -___ -__. - __ - __ 45,382 45,382 45,382 TOTAL ASSETS $ 1,646,872 $ 2,172,862 $ 376,911 18,268 $ 63,427 $ 4,270,340 $ 2538 l96 LIABILITIES Accounts payable $ I29J10 $ - __$ 76,141 $ - $ -__ $ 205251 $ 20,830 TOTAL LIABILITIES 120,110 76,141 -__ - __ 205,251 20,830 FUND EQUITY Fund balances: Investment inFixed Assets - ' ' ' 63,427 63,427 59,560 I)omigootcd - 2,172,862 100,770 10'268 - 2,483,900 1,099,092 Undesignated |,5l7,762 - __ -__ - __ 1,517,762 1,358,705 TOTAL FUND EQUITY 1,517,762 2]72,862 300,778 10,268 63,427 4,065,088 2,517,366 TOTAL LIABILITIES AND FUND EQUITY $ 1,646,872 $ 2,172,862 $ 376,911 $ 10,268 $ 63,427 $ 4,270,340 $ 2,538,196 The accompanying notes are unintegral part oYthe finxnoiu( statements. TOWN OFWBSTLAB3E'TEXAS COMBINED STATEMENT ()F REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE ALL GOVERNMENTAL FUND TYPES YEAR ENDED SEPTEMBER 3O` 1998 September 30, 1998 September 30, 1997 Public (MEMORANDUM (MEMORANDUM G8NERALFOND3 Facilities ONLY) ONLY) Operating Zevelopmen ?SFIC {ow— TOTAL TOTAL REVENUES Ionoo Suioo $ 1,093.527 $ 1,084,893 $ ' * - $ 2,178'419 $ 1.530.280 Fmoo6iae 184.528 ' - - 184,528 161,407 Interest income 84.529 87.043 6.887 188 178'646 123`261 Building permits and fees 79`051 - - - 79,051 41`638 Fines and penalties 3.997 ' ' - 3.997 5^099 Contractual receipts from operations of Texas Student Housing Corporation faoJidno ' - 288,372 - 288,372 85`327 Other miscellaneous income 1,259 ' ' - 1259 18000 TOTAL REVENUES 1,446,890 1,171,936 295,259 188 2914272 1957012 OPERATING EXPENDITURES Current 6uueml Government 1,287,833 - __ 6,434 --- 1,294,267 1260719 TOTAL OPERATING EXPENDITURE S 1,287,833 -__ 6,434 - __ 1294267 1268719 OTHER EXPENDITURES Scholarships paid iocurrent year - __ -___ 76,141 - __ 76,141 20,830 TOTAL OTHER EXPENDITURES ' - 76j41 ' 76141 20,830 TOTAL EXPENDITURES 1,287,833 - __ 82,575 -__ 1370408 1281549 Excess nyrevenues over oxpcuJiiumo 150.057 1,171.936 212.684 188 1.543,864 675.469 Fund Balance'September 30. l9Y7 1,358,705 1,000,926 88,086 10\080 2,457,797 1782334 Fund Balance-September 30. (998 $ 1,517,762 $ 2,172,862 $ 300,770 $ 10,268 4001661 $ 2,457,797 The accompanying notes are oointegral part ofthe financial statements. 4 TOWN OF WESTLAKE, TEXAS GENERAL FUND BUDGET TO ACTUAL - SCHEDULE OF EXPENDITURES YEAR ENDED SEPTEMBER 30, 1998 Actual --------- Year ended September 30, 1998 ---------- Year Ended Operating Fund Budget Actual Variance September 30, 1997 City secretary $22,020 $18,076 $3,944 $17,538 Payroll taxes 1,680 1,517 163 1,745 Office supplies 4,500 2,997 1,503 4,123 Capital outlay - equipment 3,900 3,858 42 835 Capital outlay - road repairs 20,000 - 20,000 - Capital outlay - water line infrastructure oversizing - - - 11,794 Maintenance and repairs 3,125 354 2,771 3,398 Postage and courier 1,920 1,931 (11) 1,928 Miscellaneous 3,000 2,414 586 869 Accounting and consulting 27,000 5,000 22,000 35,593 Engineering 60,000 58,522 1,478 68,118 Professional consulting 18,000 46,369 (28,369) 73,936 Contracted services - police & fire 39,400 18,113 21,288 32,273 Legal 950,000 1,034,500 (84,500) 879,121 Interlocal funding - community service expense 8,000 8,250 (250) 4,500 Inspection 30,000 2,528 27,472 26,261 Dues, printed material, and video material 1,300 2,177 (877) 1,167 Election expense 750 71 679 1,151 Telephone & utilities 2,400 2,452 (52) 2,479 Planners fees 69,000 59,575 9,425 69,258 Insurance 3,500 3,209 291 374 Public notice 2,000 1,234 766 1,638 Training and seminars 2,500 1,784 716 1,573 Office & meeting location rent 17,616 12,902 4,714 16,154 Total Operating Fund 1,291,611 1,287,833 3,778 1,255,826 Westlake Development Corporation Legal Fees - - - 250 Miscellaneous expense - - - 5 Total Westlake Development Corporation - - - 255 Public Facilities Corporation Miscellaneous Expense - - - 5 Total Public Facilities Corporation - - - 5 Texas Student Housing Corporation (TSHC) f .__ Administrative and office expense 947 385 Postage and office supplies - 37 Travel expense 832 2,027 Legal and professional - 403 Meeting expense 4,655 1,781 6,434 4,633 { Scholarships paid in current year 76,141 20,830 Total Texas Student Housing Corporation (TSHC) s 82,575 25,463 The accompanying notes are an integral part of the financial statements. G", TOWN OF WESTLAKE, TEXAS NOTES TO FINANCIAL STATEMENTS Note 1 Summary of Significant Accounting Policies A summary of significant accounting policies applied in the preparation of the accompanying financial statements follows: Description of Funds The Town operates under a Board of Aldermen -Mayor -Secretary form of government and has established certain funds in conformity with generally accepted accounting principles. The following types of funds and groups of accounts are used by the Town in accounting for its financial activities: General Fund - The Town currently accounts for its financial activity in general funds: the Operating Fund and the Westlake Development Corporations - 4A and 4B (Development). The Operating Fund is a governmental fund used to account for all financial resources except those required to be accounted for in another fund or account group. The two Westlake Development Corporations receive funding from a one-half ('/2) percent sales tax for each development corporation; approved by the voters. The purpose of the two Development Corporations is to promote, for the public welfare, economic development for areas within the Town of Westlake as authorized by the State under the Texas Economic Development Act of 1979, as amended. Component units - Component unit entities consist of the Texas Student Housing Corporation ("TSHC") and the Lone Star Public Facilities Corporation ("Public Facilities Corporation"). The Texas Student Housing Corporation is a Texas non-profit corporation acting on behalf of the Town, that purchases and operates student -housing facilities. The contracts under which these facilities are operated are restrictive, however, they provide for funds to be made available, which the Town awards to local students in the form of college scholarships. Lone Star Public Facilities Corporation is a Texas non-profit corporation that acts on behalf of the Town to further the public purposes of the Public Facilities Corporation Act, as its duly constituted authority and instrumentality. Account Groups - The Fixed Asset Account Group accounts for the capital assets acquired by the Town. 7.1 TOWN OF WESTLAKE, TEXAS NOTES TO FINANCIAL STATEMENTS (Continued) Basis of Accounting The Town has prepared and approved an annual budget on the same basis that the Town maintains its accounts. The modified accrual and accrual basis of accounting, as appropriate, are utilized in measuring financial position and operating results as follows: Governmental fund revenues and expenditures are recognized on the modified accrual basis. Revenues are recognized in the accounting period in which they become available and measurable. Expenditures are recognized in the accounting period in which the fund liability is incurred, if measurable. Within the governmental funds, the more significant revenues which are not accrued are licenses, permits, fines and charges for other services provided by the Town. Budgets and the Budgetary Process The Board of Aldermen has adopted an annual operating budget, which can be amended by the Board throughout the year. The formal budgetary accounting is to be employed as a management control for all funds of the Town; however, legal budgets will be adopted only for General Fund groups. At the fund level, actual expenditures cannot exceed budgeted appropriations; however, with proper approval by the Board of Aldermen, budgetary transfers between departments can be made. Property. Plant, and Equipment Fixed assets used in governmental fund type operations are accounted for in the General Fixed Assets Account Group. Public domain (infrastructure) general fixed assets consisting of certain improvements other than buildings, such as roads, sidewalks, and bridges, are not capitalized. However, utility system engineering and ovesizing costs are maintained in this fund pending the creation of an Enterprise fund. Property, plant and equipment acquired or constructed for general governmental operations are recorded as an expenditure in the fund making the expenditure, and capitalized at cost in the General Fixed Assets Account Group, in accordance with the Town's capitalization criteria. Property, plant, and equipment is stated at cost. Where cost could not be determined from the available records, estimated historical cost was used to record the estimated value of the assets. Assets acquired by gift or bequest are recorded at their fair market value at the date of transfer. Fund Equity s The unreserved fund balances for governmental funds represent the amount available for budgeted future operations. The designated fund balances for governmental funds represent the amount that has been legally identified for specific purposes. 7 TOWN OF WESTLAKE, TEXAS NOTES TO FINANCIAL STATEMENTS (Continued) Revenues and expenditures/expenses Revenues for governmental funds are recorded when they are determined to be both measurable and available. Generally, tax revenues, fees and non -tax revenues are recognized when received. Grants from other governments, if any, are recognized when qualifying expenditures are incurred. Expenditures for governmental funds are recorded when the related liability is incurred. Property tax revenues The Town does not assess ad valorem taxes on real or personal property. Note 2 Cash and Required Deposits The cash balances at September 30, 1998 are composed of the following amounts: INTEREST ACCOUNT NAME NUMBER LOCATION RATE General Fund Operating Acct 6789085 Keller State Bank 1.5% TexPool 22008111000 TexPool 5.47% (Variable) Subtotal — Operating Funds Operating Acct. - Development Fund 6786289 Keller State Bank TexPool Account 22008750111 TexPool TexPool Account 22008750000 TexPool Subtotal — Development Corporation Public Facilities Corp. Operating Acct 6786461 Keller State Bank Subtotal - Public Facilities Corp. TSHC Operating Account 6762694 Keller State Bank TexPool Account 22008650000 TexPool Subtotal TSHC Total Cash N. 1.5% 5.47% (Variable) 5.47% (Variable) 1.5% 3.4% 5.47% (Variable) 3,057 1.643,815 1,646,872 2,134 920,213 1,250,515 2.172,862 10,268 10,268 17,062 231,036 248,098 $4,078,100 TOWN OF WESTLAKE, TEXAS NOTES TO FINANCIAL STATEMENTS (Continued) Note 3 Litigation At September 30, 1998, the Town was involved with several lawsuits involving property annexations, disannexation or other disputes. Subsequent to year end, most of these lawsuits were adjudicated, as discussed in the following two paragraphs. As a result of settlement agreements entered into on October 5, 1998, the Town had a substantial amount of undeveloped land returned to its exclusive jurisdiction. On December 1, 1998, another significant lawsuit was resolved in the Town's favor. This matter resulted in the return of approximately 500 acres of developed real estate to the exclusive jurisdiction of the Town. Finally, the Town is a party to a lawsuit which seeks to nullify its annexation of approximately 60 acres of undeveloped land. The Town is vigorously defending this legal action, which was pending at year end as well as the date of this report. The legal proceedings for this case has not progressed to a point that an assessment of the potential outcome can be determined at the date of this report. Note 4 Commitments and Contingencies The Town has commitments relative to municipal services, and contractual relationships concerning certain utilities and public safety resources, which are normal in its ongoing activity. Note 5 Subsequent Events As a result of the legal settlements noted in Note 3, above, the owners and developers of some of this property now have an agreement for the development of much of this undeveloped land. The development of this land could result in substantial increases in revenues, and associated costs of providing services, by the Town in future years. The Town has filed an application for a Certificate of Convenience and Necessity with the Texas Natural Resource Conservation Committee to provide water and sewer service within the corporate limits of the Town. Originally, this application had been protested. However, this opposition to the Town's application has been withdrawn. f 9