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HomeMy WebLinkAboutTown Audit 09-30-2000GHARLF5 HAYNtb, Ut-A Certified Public Accountants TOWN OF WESTLAKE, TEXAS MAYOR ALDERMEN CITY SECRETARY PRINCIPAL OFFICERS SEPTEMBER 30, 2000 E Scott Bradley Fred Held, Mayor Pro -Tem Don Redding Larry Sparrow Buddy Brown Bill Frey Ginger Crosswy Charles Haynes CPA 1903 Central Drive, Suite 304 Bedford, Texas 76021 (817) 545-1300 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, 2000. These general purpose financial statements are the responsibility of the Town of Westlake's management. Our responsibility is to express an opinion on these general purpose financial statements, based on our audit. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our 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, 2000 and the results of its operations for the year then ended in conformity with generally accepted accounting principles. Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements taken as a whole and on the combining and individual fund and account group financial statements. The accompanying financial information is presented for purposes of additional analysis and is not a required part of the financial statements of the Town of Westlake, Texas. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly presented in all material respects in relation to the financial statements of each of the respective individual funds and account groups taken as a whole. Respectfully submitted, Charles Haynes CPA March 18, 2001 2 TOWN OF WESTLAKE,TEXAS COMBINED BALANCE SHEET ALL FUND TYPES SEPTEMBER 30,2000 Governmental Fund Types ProprietaryFund Account Group Westlake TEXAS PUBLIC FIXED ASSET September 30,2000 September 30,1999 General 4A Development Development STUDENT FACILITIES Water and ACCOUNT Totals Totals Operating Corporation Corporation HOUSING CORP. CORP. Sewer GROUP (Memo Only) (Memo Only) ASSETS Cash $ 1,841,166 $ 2,081,030 $ 2,421,019 $ 222,833 $ 10,438 $ 12,627 $ $ 6,58.9,113 $ 5,020,222 Receivables 108,370 39,305 147,675 Contracted Receipts Miscellaneous Note Receivable 125,000 125,000 Property,plant and equipment 703,447 39,483 742,930 71,158 (net of accumulated depr. Proprietary funds only) TOTAL ASSETS $ 1,966,166 $ 2,081,030 $ 2,421,019 $ 331,203 $ 10,438 $ 755,379 $ 39,483 $ 7,604,718 $ 5,091,380 LIABILITIES Accounts Payable 59,145 3,485 62,630 Customer Deposits 4,230 4,230 98.574 TOTAL LIABILITIES 59,145 7,715 66,860 98.574 FUND EQUITY Fund Balances: Restricted 2,081,030 2,421,019 331,203 10,438 4,843,690 2,965,231 Undesignated 1,907,021 1,907,021 1,956,417 747664 747,664 Retained Earnings , Investment in Fixed Assets 39'483 39'483 71,158 TOTAL FUND EQUITY 1,907,021 2,081,030 2,421,019 331,203 10,438 747,664 39,483 7,537,858 4,992,806 TOTAL LIABILITIES AND FUND EQUITY $ 1,966,166 $ 2,081,030 $ 2,421,019 $ 331,203 $ 10,438 $ 755,379 $ 39,483 $ 7,604,718 $ 5,091,380 3 The accompanying notes are an integral part of the financial statements TOWN OFVVESTLAKETEXAS COMBINED STATEMENT oFREVENUES,EXPENDITURES AND CHANGES|NFUND BALANCE ALL FUND TYPES,EXCEPT PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER ao.000n Governmental Fund Types September Westlake_ T_' — PUBLIC Genera| 4A Development Development STUDENT FACILITIES Totals Totals Operating Corporation Corporation HOUSING CORP. CORP. (Memo Only) UMerrvo Only) REVENUES Taxes Sales $ 1.359.540 $ 679.770 $ 679.770 $ % $ 2,719,080 $ 1318.332 Mixed Beverage 9.747 S747 Hotel 121.283 121,293 236,498 210,054Frannhise 238.498 ' Interest income 118J89 98.467 113.169 12.730 100 349,321 212,330 Building permits and fees 477.849 477,849 516,609 7OE� 7�54 F��a�pe��� 7,867 . Scholarship revenue 51,819 51.813 3 Other miscellaneous income 1,389 172 50,561 TOTALREvENUE8 $ 2,332,972 $ 778,237 $ 798,939 $ 113,787 * 100 $ 4,024,035 $ 2,266,622 ^ OPERATING EXPENDITURES General government 1,738,277 2 13,009 ` 1,045,865 TOTAL OPERATING EXPENDITURES 1 /38 z 13,009 1,751,288 1,045,865 OTHER EXPENDITURES 83,453 83,453 Scholarships paid incurrent year TOTAL OTHER EXPENDITURES 8345" ~~-~~ OTHER FINANCING SOURCES(U8EG) Transfers in 83.366 83,366 Transfers out B TOTAL OTHER FINANCING SOURCES(UGEG) TOTAL EXPENDITURES 2382368 ' 30021 96,462 ' 2,508,851 1,045,865 Excess n[revenues over expenditures (48.396) 778.237 788.918 17.325 100 1.515.184 1,220J57 Prior Period Adjustment(Note 1m 58.018 3,700,892 Fund Balance-September 3O.1999 1,956,417 1,302,793 1,652,101 257,265 10,338 51 78,914 Fund Balance-September 3O.20DV $ 1,907,021 $ 2,081,030 % 2,421,019 $ 331.203 $ 10,438 $ 6,694,098 $ 4,921,648 The accompanying notes are onintegral part ofthe financial statements 4 TOWN OF WESTLAKE,TEXAS GENERALFUND SCHEDULE OF REVENUES AND EXPENDITURES BUDGET TO ACTUAL FOR THE YEAR ENDED SEPTEMBER 30,2000 (Memo Only) Actual ---•- --- Year ended September 30,2000 --- Year Ended Budget Actual Variance September 30 1999 Revenues: Taxes Sales 654,500 1,359,540 705,040 654,381 Mixed Beverage 9,516 9,747 231 9,516 Hotel - 121,293 121,293 Franchise 210,000 236,498 26,498 210,054 Interest Income 80,000 118,789 38,789 84,664 Building permits and fees 466,691 477,849 11,158 516,609 Fines and penalties 7,500 7,867 367 7,354 Scholarship revenue Other miscellaneous income 1,950 1,389 (561) 1,943 Total Revenue 1,430,157 2,332,972 902,815 1,484,521 Expenditures: City Secretary $ 46,000 S 44,999 S 1,001 $ 23,249 Payroll taxes 3,110 3,791 (681) 2,866 Office supplies 10,500 10,401 99 1,362 Capital outlay-equipment - 7,731 Capital outlay-road repairs - Capital outlay-water line infrastructure overs¢ing - - Maintenance and repairs 27,000 23,407 3,593 7,140 Postage and courier 4,000 3,978 22 3,301 Miscellaneous 4,850 3,249 1,601 210 Accounting and consulting 28,000 7,000 21.000 27,600 Engineering 375,000 421,243 (46,243) 146,627 Professional consulting - - 207,430 Contracted services-police and fire 455,000 455,040 (40) 37,050 Contracted services-administrative 120,000 120,000 - Contracted services-traffic 120,600 120,596 4 Legal 533,700 349,092 184,608 484,575 Interlocal funding-community service expense - - - 7,600 Inspection 9,500 42,821 (33,321) 12,640 Dues,printed material,and video material 9,250 9,242 8 2,448 Election expense 533 533 1,064 Telephone and utilities 12,400 10,571 1,829 2,712 Planners'fees 60,830 (60,830) 45,604 Insurance 3,564 3,557 7 3,424 Public notice 1,140 1,140 - 1,290 Training and seminars 840 840 - 2,353 Internet expense 1,768 1,883 (115) 433 Travel expense 6,000 607 5,393 1,807 Recycle expense 1,212 1,212 1,213 Office and meeting location rent 43,455 43,455 14,136 Total Expenditures S 1,817,422 S 1,738,277 $ 79,145 $ 1,045,865 Transfers In - 83,366 Transfers Out (727,457) Net Revenues in excess of expenditures (49,396) The accompanying notes are an integral part of the financial statements 5 TOWN OFVVESTLAKE' TEXAS STATEMENT OFREVENUES, EXPENDITURES AND CHANGES \NRETAINED EARNINGS BUDGET AND ACTUAL-PROPRIETARY FUND FOR THE YEAR ENDED SEPTEMBER 30, 2ODO Adjustment Actual to on Variance Budgetary Budgetary Favorable Revenues Actual Basis Basin Budget Water Sales 54.649 $ 54.649 $ 54.649 $ - Miscellaneous Income 46,347 46,347 46,347 - Total revenues 100996 100996 100998 ' Expenditures Bank charges 108 108 108 - Depreciation 5.530 (5.530) - - - Accounting 2.950 2.950 2.950 - Planning fees . 3.486 3.485 3.485 - Sewer charges 15.731 15.731 15.731 - Water charges 15.000 15.000 15.000 - Water rate study fees 30019 30019 30019 - Total expenditures 72,823 53 67293 67293 - Other revenue (expensea) Transfer In 719,492 5,530 - Net operating revenue (lnss) $ 747664 $ 5,530 67,293 07293 $ - Retained Eornings- beginning - F(etainedEornings- onding $ 747664 - The accompanying notes are an integral part of the financial statements. 6 TOWN OF WESTLAKE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2000 Note 1. Summary of Accounting Policies The Town of Westlake, Texas (the "Town") was incorporated under the provisions of the laws of the State of Texas. The Town operates under a Board of Alderman — Mayor — Manager form of government and has established certain funds in conformity with generally accepted accounting principles. The financial statements of the Town have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the government's accounting policies are described below. The Town's fiscal year begins on October 1 and ends on September 30`x' each year. A. The Reporting- Entit In evaluating how to define the Town for financial reporting purposes, management has considered all potential component units. The decision to include a potential component unit in the reporting entity was made by applying the criteria set forth in GAAP. The basic -but not the only criterion for including a potential component unit within the reporting entity is the governing body's ability to exercise oversight responsibility. The most significant manifestation of the ability is financial interdependency. Other manifestation of the ability to exercise oversight responsibility include, but are not limited to, the selection of governing authority, the designation of management, the ability to significantly influence operations and accountability for fiscal matters. The other criterion used to evaluate potential component units for inclusion or exclusion from the reporting entity is the existence of special financing relationships, regardless of whether the Town is able to exercise oversight responsibilities. The Component Units: Active component unit entities consist of the Texas Student Housing Corporation ("TSHC") and the Lone Star Public Facilities Corporation ("Public Facilities Corporation"). VA TOWN OF WESTLAKE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2000 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 under the Public Facilities Corporation Act, as its duly constituted authority and instrumentality. B. Fund Accounting The accounts of the Town are organized on the basis of funds or account groups, each of which is considered to be a separate accounting entity. '.- The operations of each fund or account group are accounted for by providing a separate set of self -balancing accounts which includes its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Government resources are allocated to and for individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds are grouped, in the financial statements of this report, into one generic fund type and one broad fund category and the component units, as follows: Governmental Fund Types The Town currently accounts for its financial activity in general funds: The Operating Fund and the Westlake Development Corporations — 4A and 4B (Development). The Town reports these Economic Development Corporations as one separate -column under the General Fund, because they are such a distinct and significant source of revenues. 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 (1/2) 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 TOWN OF WESTLAKE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2000 Development Act of 1979, as amended. These entities utilize a modified accrual basis of accounting for financial statement purposes. ACCOUNT GROUPS General Fixed Assets Account Group The General Fixed Assets Account Group is used to account for fixed assets used in governmental fund type operations for control purposes. All fixed assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Donated fixed assets are valued at their estimated fair value in the date of donation. No depreciation is recorded on general fixed assets. PROPRIETARY FUND TYPES Water and Sewer System Utility — Enterprise Fund Enterprise Funds are used to account for operation (a) that are financed and operated in a manner similar to private business enterprises — where the intent of the governing body is that the costs (expenses, including depreciation) of providing water and sewer services to the general public on a continuing basis be financed or recovered primarily through user charges or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. C. Basis of Accounting The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental fund types are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. The modified accrual basis of accounting is used by all governmental fund TOWN OF WESTLAKE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2000 types. Under the modified accrual basis of accounting, revenues are Y recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means that the amount of the transaction can be determined and "available" means that the amount of the j transaction is collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. A one-year availability period is used for revenue recognition for all governmental fund type revenues. Expenditures are recorded when the related fund liability is recorded as fund liabilities when due or when amounts have been accumulated in the debt service fund for payments to be made early in the following year. Those revenues susceptible to accrual are franchise taxes, special assessments, licenses, interest revenue and charges for services. Fines, permits and parking meter revenues are not susceptible to accrual because generally they are not measurable until received in cash. D. Budgets and Budgetary Accounting As set forth in the Town Charter, the Town's Board of Aldermen adopt an annual budget for the General Fund. The annual budget for the General Fund is prepared in accordance with the basis of accounting utilized by that fund and can be amended by the Board throughout the fiscal year. Any revisions that alter the total expenditures/expenses must be approved by the Town's Board of Aldermen. The amended budget for the General Fund is presented in the Statement of Revenues and Expenditures - Budget and Actual. 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. The amended budget for the Proprietary Fund is presented in the Statement of Revenues and Expenditures — Actual Compared to Budgetary Basis — Water Works and Sewer System Enterprise Fund. 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. 10 TOWN OF WESTLAKE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2000 E. Comparative Data Comparative totals for the prior year have been presented in the accompanying financial statements in order to provide an understanding of changes in the Town's financial position and operations. However, presentation of prior year totals by fund type have not been presented in each of the statements since their inclusion would make the statements unduly complex and difficult to read. F. Revenue Recognition - Property Taxes The Town does not currently assess ad valorem taxes on real estate or personal property. G. Deposits and Investments Deposits consist of cash demand deposits (principally interest bearing accounts. Investments are recorded at fair value, defined as the price at which two willing parties would exchange. H. Inventories Inventories, when applicable, are carried at cost using the first -in, first -out method. I. Property Plant and Equipment General Fixed Assets Account Group General fixed assets have been acquired for general governmental purposes. Assets purchases are recorded as expenditures in the General, Special Revenue, and Capital Projects Funds, as applicable, and recorded at historical cost in the General Fixed Asset Account Group. In the case of gifts or contributions, such assets are recorded in the General Fixed Assets Account Group at estimated fair market value on the date received. Generally, fixed assets contributed by subdividers or other contractors -- consisting of certain improvements other than buildings, including roads, bridges, curbs and gutters, streets and sidewalks, drainage systems and lighting systems, have not been capitalized. Such assets normally are it TOWN OF WESTLAKE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2000 immovable and of value only to the Town, therefore, the purpose of stewardship for these items is satisfied without recording these assets. No depreciation has been provided on general fixed assets. Enterprise Fund — Additions to the water/sewer system are recorded at cost or, if contributed property, at their estimated fair value at time of contribution. Repairs and maintenance are recorded as expenses; renewals and betterments are capitalized. The sale or disposal of fixed assets is recorded by removing cost and accumulated depreciation from the accounts and charging the resulting gain or loss to income. Depreciation has been calculated on each class of depreciable property using the straight-line method with pro -rata depreciation in the year of acquisiton. Estimated useful lives are as follows: Equipment 5-33 years Water system 10-50 years Sewer system 10-50 years J. Compensated Absences The Town allows employees to accumulate up to 10 days of vacation time each year. Carryover of earned vacation time is limited to 40 hours. Upon termination, the Town pays all accumulated vacation time not yet taken. Any accumulated vacation that was not allowed to be taken due to work- related assignments is also paid upon termination. The Town allows employees to earn "comp" time, however it is to be taken within 10 days of its occurrence. Any vested, unpaid amount is payable upon termination. No accumulated, unused sick time is payable upon termination or retirement. K. Restricted and Designated Fund Equity Restricted fund balances are legally required segregations which are required by state law, corporate charters, or by agreement with third parties. Designations of fiend balances are not legally required segregations but are 12 TOWN OF WESTLAKE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2000 segregated for a specific purpose. The City has designated a portion of the General Fund's and Capital Projects Funds' unreserved fund balances for construction projects, infrastructure improvements and self insurance claims. L. Total Columns on Combined Statements - Overview Total columns on the Combined Statements are captioned "memorandum only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations, or changes in financial position in conformity with generally accepted accounting principles. Neither is such data comparable to a consolidation. Interfund eliminations, if applicable, have not been made in the aggregation of this data. M. Comparative Data Comparative data for the prior year has been presented in the accompanying general purpose financial statements in order to provide an understanding of changes in the Town's financial position and operations. However, complete comparative data (i.e., presentation of prior year totals by fund type in each of the statements) have not been presented since their inclusion would make the statement unduly complex and difficult to read. Certain comparative data has been reclassified to conform to the current year presentation. Note 2. Cash and Investments The cash and investment policies of the Town are governed by State statutes and the adopted Town Investment Policy. Town policies governing bank deposits require depositories to be FDIC — insured institutions and depositories must fully collateralize all deposits in excess of FDIC insurance limits. Deposits - At September 30, 2000, the Town's bank account balances on deposit in the depository bank totaled $79,576. Of these bank balances, $100,000 was covered by federal insurance at Frost Bank as depository for the Town. 13 TOWN OF WESTLAKE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2000 The collateral for the Town's deposits is categorized to give an indication of the level of risk assumed by the Town at year end. Category 1 includes deposits that are issued or registered or for which the securities are held by the Town or its agent in the Town's name. Category 2 includes uninsured and unregistered deposits for which the securities are held by the counterparty's trust department or agent in the Town's name. Category 3 includes uninsured and unregistered deposits for which the securities are held by the counterparty's trust department or agent, but not in the Town's name. Bank z Deposit Covered By Cate ,ory of Collateral Bank Balance Market 1 2 & 3 Of Collateral Value FDIC Insurance 100,000 100,000 100,000 $100,000 $ - $100,000 $100,000 Investments - The Town is allowed to invest in (1) obligations of the United States or its agencies and instrumentalities; (2) direct obligations, of the State of Texas or its agencies; (3) other obligations, the principal of and interest on which are unconditionally guaranteed or insured by the State of Texas or the United States; (4) obligations of states, agencies, counties, cities and other political subdivisions of any state having been rated as to investment quality by a nationally recognized investment rating firm and having received a rating of not less than "AA' or its equivalent; (5) certificates of deposits issued by state and national banks domiciled in Texas that are guaranteed or insured by the Federal Deposit Insurance Corporation or its successor, or secured by obligations mentioned above; and (6) fully collateralized direct repurchase agreements having a defined termination date. For fiscal year 2000, the Town invested only in interest bearing accounts in state and national banks domiciled in Texas that are insured by FDIC or secured by qualified obligations. The Town records all interest revenue 14 TOWN OF WESTLAKE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2000 related to investment activities in the respective funds. At September 30, 2000, the Town's investments included investment pools in the name of the Town or its agent in the Town's name. The Town's investments were as follows: Market Value TEXPOOL (State investment pool) $6,509,537 The Town's investments are categorized to give an indication of level of risk assumed by the Town at year end. Category 1 includes investements that are insured or registered; or for which the securities are held by the City or its agent in the Town's name. Category 2 includes uninsured and unregistered investments for which the securities are held by the counterparty's trust department or agent, in the Town's name. Category 3 includes uninsured and unregistered investments for which the securities are held by the counterparty's trust department or agent, but not in the Town" name. Investments are stated at cost, and all investment activities are conducted through the depository bank and the Town's financial advisor. During 2000, the Town did not invest through any security brokers or dealers. The cash and investment balances by fund at September 30, 2000 are composed of the following amounts: Account Name Account Location Interest Book Number Rate Balance Genl Fund Optg.Acct. 6789085 Frost National Bank .5% $ 26,321 TexPool Fund 22008111000 TexPool 5.0424% 1,814,845 (Variable) Subtotal — General Operating $1.841,166, Development Fund Operating Account 6786289 Frost National Bank .5% $ 2,158 TexPool Fund 22008750111 TexPool 5.0424% 2,418,861 TexPool Fund 22008750000 TexPool 5.0424% 1 2,081,030 15 TOWN OF WESTLAKE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2000 Note 3 Litigation At September 30, 2000, the Town was involved with one lawsuit involving property annexations and other disputes. 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 t defending this legal action, which was pending at year end, as well as of the date of this report. The legal proceedings for this case have 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 Contin 7e�, ncies 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. Non -cancelable obligations consist of a lease of Town office space and agreements for services at September 30, 2000. Minimum Lease payments and contractual obligations under these non- cancelable leases and agreements as of September 30, 2000 are as follows: 16 (Variable) Subtotal — Development $4,504,049 Cor oration 4A&4B Public Facilities 6786461 Frost National Bank .5% $ 10,439 CorpOperating Act TSHC Operating Acct. 6762694 Frost National Bank .5% $28,032 TexPool Fund 22008650000 TexPool 5.0424% 194,801 (Variable) Water and Sewer Fund Operating — Frost 248056110 Frost National Bank .5% $12,626 Total Cash and $6,589,113 Investments -------- Note 3 Litigation At September 30, 2000, the Town was involved with one lawsuit involving property annexations and other disputes. 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 t defending this legal action, which was pending at year end, as well as of the date of this report. The legal proceedings for this case have 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 Contin 7e�, ncies 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. Non -cancelable obligations consist of a lease of Town office space and agreements for services at September 30, 2000. Minimum Lease payments and contractual obligations under these non- cancelable leases and agreements as of September 30, 2000 are as follows: 16 TOWN OF WESTLAKE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2000 Fiscal year end Payment September 30, Amount 2001 $207,553 2002 178,429 2003 178,429 2004 167,672 2005 1,000 thereafter 8.000 Total $741,083 Note 5. Trinity River Authority The Town has an agreement with the Trinity River Authority to provide wastewater treatment at the Denton Creek Regional Waste Water Treatment Facility. Rates are determined annually by the Trinity River Authority. Note 6. Wholesale Water Contract The Town has an agreement with the City of Fort Worth under which the Town purchases water when the Town's sources are not sufficient. The terms of the agreement provide that the Town will purchase an amount of treated potable water each year, at rates determined on a periodic basis. The rate is adjusted based on a water rate study which is conducted about every three years, on behalf of the wholesale water customers with the City of Fort Worth. Note 7. Retirement Plan The Town has elected to participate in the retirement plan sponsored by the Texas Municipal Retirement System. The plan covers all regular Town employees and requires contributions from both employees and the Town. It is the opinion of the TMRS management that the plans in TMRS are substantially defined contribution pians. Note 8. Property, Plant and Equipment Enterprise Fund The following is a summary of the property, plant and equipment asset 17 f TOWN OF WESTLAKE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2000 accounts in the Enterprise Fund as of September 30, 2000: October 1, Additions Retirements September 30, 1999 2600 Water / Sewer System $ - 708,977 - $708,977 Total cost $ - 708,977 $708 m Accumulated Depreciation (5,530) (5,530) Total net of depreciation 703.447 703 447 General Fixed Assets Account Group The general fixed assets account group balances at September 30, 2000 consists of the following: Office Equipment $39,483 Total 39 483 Note 9. Interlocal Agreement with Trophy Club/ Westlake Department of Public Safety_ On April 24, 2000 the Town approved an interlocal agreement with the Trophy Club/Westlake Department of Public Safety, which called for the Town of Westlake to participate in the financing of an emergency vehicle for the DPS. In the fiscal year 2000, the Town of Westlake recorded a note receivable of $125,000 based on the terms of the interlocal agreement. The Agreement calls for eight (8) principal and interest payments to the Town of Westlake, with the first payment due on June 1, 2001, with interest calculated at an interest rate stated at 63/4% simple interest. 18 TOWN OF WESTLAKE, TEXAS NOTES TO FINANCIAL STATEMENTS ' SEPTEMBER 30, 2000 The schedule of future collections by the Town of Westlake under this agreement, in each of the next eight fiscal years, is as follows: Fiscal year ended September 30, 2001 2002 2003 2004 2005 2006 2007 2008 Totals Amount of Scheduled Collection of Repayment_ Principal Interest Total 12,294 8,437 20,731 13,124 7,607 20,731 14,009 6,722 20,731 14,955 5,776 20,731 15,964 4,767 20,731 17,042 3,689 20,731 18,192 2,539 20,731 19.420 1,311 20,731 X25,000 $40848 16848 Note 10 Prior Period Adjustment In the current year, one of the active component units, Texas Student Housing Corporation, had a prior period adjustment to its net assets of $51,757. This increase in fund equity is due to the balance of contractual receivables from the properties having a positive adjustment. The adjustment was a result of the calculation of the internal cost of student scholarships, net of the amount of scholarships earned by the properties in prior years. These amounts were from prior years, therefore are shown as a prior period adjustment 19