HomeMy WebLinkAboutRes 17-04 Approving the Comprehensive Annual Financial Report for the year ending September 30, 2016 TOWN OF WESTLAKE
RESOLUTION NO. 17-04
A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF WESTLAKE,
TEXAS, ACCEPTING THE COMPREHENSIVE ANNUAL FINANCIAL REPORT
PRESENTED BY WEAVER AND TIDWELL, L.L.P., FOR THE FISCAL YEAR
ENDED SEPTEMBER 30,2016
WHEREAS, Section 103.001 of the Local Government Code requires that a
municipality shall have its records and accounts audited annually and shall have an annual
financial statement prepared based on the audit; and
WHEREAS, Section 103.002 of the Local Government Code requires that a
municipality shall employ at its own expense a certified public accountant who is licensed in
this state or a public accountant who holds a permit to practice from the Texas State Board of
Public Accountancy to conduct the audit and to prepare the annual financial statements; and
NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN
OF WESTLAKE:
SECTION 1: That, all matters stated in the Recitals hereinabove are found to be true
and correct and are incorporated herein by reference as if copied in their entirety.
SECTION 2: That the Town Council does hereby accept the Comprehensive Annual
Financial Report from Weaver and Tidwell, L.L.P., for the fiscal year ended September 30,
2016, attached as Exhibit "A".
SECTION 3: If any portion of this Resolution shall, for any reason, be declared
invalid by any court of competent jurisdiction, such invalidity shall not affect the remaining
provisions hereof and the Council hereby determines that it would have adopted this Resolution
without the invalid provision.
Resolution 17-04
Page 1 of 2
SECTION 4: That this resolution shall become effective from and after its date of
passage.
PASSED AND APPROVED ON THIS 27nd DAY OF FEBRUARY,2017.
Laura Wheat, Mayor
ATTEST:
. # .fi
KelO Edwa , Town Secretary Thomas E. Brymer, T J Manager
APPROVE SO F <<,
L. a ow T A neya:
T�CXA
Resolution 17-04
Page 2 of 2
TOWN OF WESTLAKE
TOWN OF WESTLAKE, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FISCAL YEAR ENDED SEPTEMBER 30, 2016
Prepared by:
Town of Westlake
Finance Department
1301 Solana Blvd, Building 4, Suite 4202
Westlake, Texas 76262
TOWN OF WESTLAKE
Exhibit Page
I.INTRODUCTORY SECTION
Letter of Transmittal i
GFOA Certificate of Achievement ix
Organization Chart x
Town Officials xi
II.FINANCIAL SECTION
Independent Auditor’s Report 1
A.MANAGEMENT'S DISCUSSION AND ANALYSIS 4
B.BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements
Statement of Net Position A-1 16
Statement of Activities A-2 17
Fund Financial Statements
Governmental Funds Financial Statements
Balance Sheet A-3 19
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position A-4 21
Statement of Revenues, Expenditures, and Changes in Fund Balance A-5 22
Reconciliation of the Statement of Revenues, Expendituresand Changes in
Fund Balances of Governmental Funds to the Statement of Activities A-6 24
Proprietary Funds Financial Statements
Statement of Net Position A-7 25
Statement of Revenues, Expenses, and Changes in Net Position A-8 26
Statement of Cash Flows A-9 27
Fiduciary Funds Financial Statements
Statement of Fiduciary Net Position A-10 28
Discretely Presented Component Units Financial Statements
Combining Statement of Net Position A-11 29
Combining Statement of Activities A-12 31
Notes to the Basic Financial Statements 33
C.REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Revenues, Expenditures, and Changes in Fund Balance-
Budget and Actual- General Fund B-1 79
Schedule of Revenues, Expentitures and Changes in Fund Balance -
Budget and Actual - Westlake Academy B-2 80
Notes to Budgetary Comparison Schedules 81
Schedule of Net Pension Liability and Related Ratios - TMRS B-3 82
Schedule of Contributions - TMRS B-4 83
Notes to TMRS Required Supplementary Information 84
Schedule of Academy's Proportionate Share of Net Pension Liability - TRS B-5 85
Schedule of Contributions - TRS B-6 86
TOWN OF WESTLAKE, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2016
TABLE OF CONTENTS
Table of Contents - Continued
Exhibit Page
D.COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
Major Governmental Funds
Schedule of Revenues, Expenditures and Changes in Fund Balances C-1 87
Budget and Actual - Debt Service Fund
Nonmajor Governmental Funds
Combining Balance Sheet C-2 89
Combining Statement of Revenues, Expenditures, and Changes in Fund Balance C-3 90
Nonmajor Special Revenue Funds
Budgetary Comparison Schedules:
Visitors Association Fund C-4 91
Lone Star Public Facilities Corporation Fund C-5 92
Economic Development Fund C-6 93
4B Economic Development Corporation Fund C-7 94
Agency Funds
Statement of Changes in Assets and Liabilities - PID Agency Fund C-8 96
III.STATISTICAL SECTION Exhibit
Net Position By Component S-1 98
Changes in Net Position S-2 99
Fund Balances, Governmental Funds S-3 101
Changes in Fund Balances, Governmental Funds S-4 102
Assessed Value and Estimated Actual Value of Taxable Property S-5 104
Principal Property Tax Payers S-6 105
Property Tax Levies and Collections S-7 106
Direct and Overlapping Property Tax Rates S-8 107
Taxable Sales by Industry Type S-9 108
Ratios of General Bonded Debt Outstanding S-10 109
Ratios of Outstanding Debt by Type S-11 110
Direct and Overlapping Governmental Activities Debt S-12 111
Demographic and Economic Statistics S-13 112
Principal Employers S-14 113
Full-Time Equivalent City Government Employees by Function/Program S-15 114
Operating Indicators by Function/Program S-16 115
Capital Asset Statistics by Function/Program S-17 116
3 Village Circle #202 Westlake, Texas 76262
Metro: 817-430-0941 Fax: 817-430-1812 www.westlake-tx.org
i
Town of Westlake
February 23, 2017
Honorable Mayor, Council Members and the Citizens of the Town of Westlake,
The Town of Westlake (the "Town") Fiscal and Budgetary Policies require that the Town's Finance
Department prepare a complete set of financial statements presented in conformity with generally
accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing
standards by a firm of licensed certified public accountants. Accordingly, the Comprehensive Annual
Financial Report (CAFR) for the Town of Westlake, Texas for the fiscal year ended September 30,
2016, is hereby issued.
This report consists of management's representations concerning the finances of the Town.
Consequently, management assumes full responsibility for the completeness and reliability of all the
information presented in this report. To provide a reasonable basis for making representations, the
Town established a comprehensive internal control framework that was designed both to protect the
Town's assets from loss, theft or misuse and to compile sufficient reliable information for the
preparation of the Town’s financial statements in conformity with GAAP. Because the cost of
internal controls should not outweigh their benefits, the Town's comprehensive framework of internal
controls has been designed to provide reasonable, rather than absolute, assurance that the financial
statements will be free from material misstatements. As management, we assert that, to the best of our
knowledge and belief, this financial report is complete and reliable in all material respects.
The Town's financial statements have been audited by Weaver and Tidwell, L.L.P. The goal of the
independent audit was to provide reasonable assurance that the financial statements of the Town for
the fiscal year ended September 30, 2016, were free of material misstatements. The independent audit
involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements; assessing the accounting principles used and significant estimates made by management;
and evaluating the overall financial statement presentation. The independent auditor concluded, based
upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the Town's
financial statements for the fiscal year ended September 30, 2016, were fairly presented in conformity
with GAAP. The independent auditors' report is presented as the first component of the financial
section of this report.
This report is presented in three sections: Introductory, Financial and Statistical. The Introductory
Section includes this transmittal letter, a listing of Town Officials, and an organizational chart of the
Town. The Financial Section includes the independent auditor’s report on the basic financial
statements, Management’s Discussion and Analysis (MD&A), basic financial statements, the notes to
ii
the basic financial statements, and combining and individual fund statements and schedules. The
MD&A is a narrative introduction, containing overview and analysis to accompany the basic
financial statements. This letter of transmittal is designed to complement, and should be read in
conjunction with the MD&A. The Town of Westlake’s MD&A can be found immediately following
the independent auditor’s report. The Statistical Section includes financial and demographic
information relevant to readers of the Town’s financial statements. The statistical data is generally
presented on a multi-year basis.
Profile of the Town
Westlake is an oasis of natural beauty that maintains open spaces in balance with distinctive
development, trails, and quality of life amenities amidst an ever-expanding urban landscape.
Nestled in the DFW Metroplex, Westlake is a Gold Level Scenic City and home to many small
independent businesses and several corporate campuses
Distinctive developments and architecturally vibrant corporate campuses find harmony among our
meandering roads and trails, lined with native oaks and stone walls. We are leaders in education,
known for our innovative partnerships between the Town-operated Charter school and our corporate
neighbors.
We strive to maintain strong aesthetic standards and preserve the natural beauty in our town.
Hospitality finds its home in Westlake, as a community, we are family friendly, welcoming, fully
involved and invested in our rich heritage, vibrant present and exciting, sustainable future.
Westlake is conveniently located between DFW Airport and Alliance Airport, on the south side of
State Highway 114, providing quick, easy access to all areas of the Dallas-Ft. Worth Metroplex.
The unique location of Westlake is ideal for many of its major corporate campuses and residential
communities. A common ideal shared by our corporate and individual residents is their support of
the existing character and charm of the community as well as a commitment to excellence in new
development.
Minutes from downtown Fort Worth, Texas and DFW International Airport, the Town of Westlake is
home to several upscale residential communities and Fortune 500 companies, all of which share a
unique character and charm, along with a commitment to excellence. The Town is located in
northeast Tarrant County and may be conveniently accessed by several major thoroughfares,
including SH 114 and US 377. The Town occupies approximately 7 square miles and serves a
population of approximately 1,270. In 2016, the average size of new home construction was 9,693
square feet with an average estimated construction cost of $1.82 million.
The Town, incorporated in 1956, is considered a Type A general-law municipality. The Town
operates under the Council-Manager form of government. The Council is comprised of a mayor and
five (5) council members and is responsible for, among other things, passing ordinances, adopting the
budget, appointing committees, and hiring the Town Manager. The Town Manager is responsible for
carrying out the policies and ordinances of the Council, for overseeing the day-to-day operations of
the Town and appointing and supervising heads of various departments. The Mayor and Town
Council members serve two (2) year terms. All elected officials are elected at-large for a two-year
staggered term each May.
iii
The financial reporting entity (the government) includes all funds of the primary government (i.e. the
Town of Westlake), as well as all its component units. Component units are legally separate entities
for which the primary government is financially accountable. The following entities are considered
blended component units:
Lone Star Public Facilities Corporation is a Texas nonprofit corporation that acts on behalf of the
Town to further the public purposes under the Public Facilities Corporation Act, as it’s duly
constituted authority and instrumentality. The board of directors, appointed by the Town’s governing
body, is comprised of seven members, of whom five must be members of the Town’s governing
body.
4B Economic Development Corporation is a Texas nonprofit industrial corporation under the
Development Corporation Act of 1979 formed to promote economic development within the Town
and the State of Texas to eliminate unemployment and underemployment, and to promote and
encourage employment and the public welfare of, for, and on behalf of the Town by developing,
implementing, financing, and providing one or more projects defined and permitted under Section 4B
of the Act. The board of directors is composed of seven persons appointed by the members of the
Town’s governing board. Four of the members of the board of directors are members of the Town’s
governing board.
Westlake Academy (Academy) is an open-enrollment charter school, as provided by Subchapter D,
Chapter 12, of the Texas Education Code. The Town of Westlake (“Charter Holder”) applied for and
became the first municipality in Texas to ever receive this special charter designation. The Academy
had 825 students in FY 15-16 and serves Kindergarten thru 12th grade. The Academy graduated their
first class in FY 09-10. The Board consists of six (6) trustees and is appointed by the Town’s
governing body. Currently, all members of the board of trustees are members of the Town’s
governing body. The Academy’s year-end is August 31.
Discretely presented component units are legally separate entities and not part of the primary
government’s operations. These component units are as follows: Texas Student Housing
Corporation-Denton Project, Texas Student Housing Authority-Jefferson Commons at Town Lake
Project, Texas Student Housing Corporation-College Station Project, and Texas Student Housing
Authority.
Services Provided
The Town provides to its citizens those services that have proven to be necessary and meaningful and
which the Town can provide for the least amount of cost. Major services provided under the general
government and enterprise functions are: Fire and emergency medical services, police, water and
sewer utility services, park and recreational facilities, street improvements, education and
administrative services. The Town utilizes a combination of direct service delivery along with out-
sourced services in its service delivery mix. The decision as to which service to deliver directly
versus out-sourcing is based on analysis of cost-effectiveness, citizen responsiveness, and customer
service quality.
iv
Economic Conditions and Outlook
The information presented in the financial statements is perhaps best understood when it is
considered from the broader perspective of the environment within which the Town operates.
The Town staff is aware that the Town of Westlake does not create wealth, but instead, is entrusted
with public dollars collected on behalf of our citizens. We are stewards who are fully vested in the
success of the Town of Westlake and Westlake Academy. We exist as a municipal corporation for
one reason and one reason only: to prioritize and deliver the best services possible with the resources
provided to achieve an exceptional quality of life. This is a challenge the Staff takes very seriously,
one that we pursue with vigor every day. Over the previous fiscal year, the Town has achieved
and/or is continuing to work toward important initiatives and projects that will allow us to balance
our “distinctive development, trails, and quality of life amenities amidst an ever-expanding urban
landscape.”
Short Term Trends, Challenges and Planning
Over the history of our Town, municipal budgets have been prepared with an eye toward being
fiscally conservative, while providing the high-quality customer service that our residents have come
to expect in Westlake. As a component of our budgets, we also identify current trends to be stewards
of our community. Some of these factors can be found below:
Westlake’s Permanent Population Growth: This is the portion of our population
considered to be our permanent residents. An increase in population of 185 in 1990 to 2016’s
population of approximately 1,270 represents an increase of 586% equal to 1,085 additional
residents. We will need to be monitor and plan for the continued increase in these numbers
considering Forging Westlake’s (the Town’s Comprehensive Plan) forecast of 7.12%
population growth between now and 2040.
Traffic Demands Due to Growth in Westlake and Surrounding Cities: The 4
municipalities surrounding Westlake (Keller, Southlake, Trophy Club, and Roanoke) are
projected to have a combined population of 215,000 people by 2040. The growth in these
communities will create traffic that passes through our Town. Westlake is estimated to grow
to 7,000 within the same time-period. Internally, current zoning entitlements, if executed,
would create an estimated 300,000 vehicle trips per day. Local impacts associated with this
level of growth affect our street infrastructure, water and sewer system capital investment
requirements, as well as demand for daily municipal services. Policies established in Forging
Westlake will be essential for addressing this issue via the Town’s thoroughfare plan as it
pertains to development which occurs in Westlake.
Balanced Growth to Impact Cost of Municipal Services: Likewise, the ability to pay for
municipal services utilizing a cost-effective revenue format requires balanced growth that
provides for commercial development and a diversified tax base, while maintaining the
community’s bucolic atmosphere. At the same time, we must continue to ensure the policy
direction of the Town is focused on growth paying for the infrastructure for which it creates
the demand.
Housing Start Increases: This past year, we continued to see strong single family residential
construction demand. This has been evidenced in the recently completed Granada Phase 1 as
well as in existing subdivisions such as Vaquero, Paigebrooke, and Terra Bella.
v
Further, three (3) new single family residential developments, Carlyle Court, Granada Phase II
and Quail Hollow have been platted. Construction of the infrastructure is either complete or
underway. Also, the mixed-use development called Entrada is underway with platting and
infrastructure construction in-process. Entrada’s infrastructure is being financed with a Town
approved Public Improvement District (PID), the bonds for which are paid back by assessments
on development within Entrada. When Entrada’s infrastructure is complete, it will add (over
time) a wide variety of 322 residential units to Westlake - ranging from single family homes, to
villas, to town homes. Once complete, these 4 developments will add 463 new lots to our
residential inventory.
Our residential construction activity shows a steady increase in building permits for housing
which has occurred since we have emerged from the ’08 - ‘09 recession. Housing starts in
Westlake, due to the high value of our homes, add taxable value to our tax base, but also impact
the demand for municipal services, especially the Town’s charter school, Westlake Academy.
As the area economy continues to perform well, and Westlake and our surrounding cities continue
to experience commercial development, this will attract individuals who work for and own these
businesses. In turn, these employees will need housing. As Westlake’s housing stock expands in
response to these forces, we will need to manage our distinctive housing developments to ensure
we maintain our community as an ‘oasis of natural beauty’ as outlined in our Vision statement,
and achieve high-end housing options as identified in the Housing element of Forging Westlake.
Commercial Development, Economic Development, and Daytime Population: Because
Westlake is the home of major corporate office campuses, its Monday-Friday daytime
population swells to approximately 11,000 - 12,000 individuals. These office complexes are
comprised of notable corporate clients that include Deloitte LLP and Fidelity Investments.
Fidelity has almost 5,900 employees at their Westlake campus, with expansion room for two
(2) more office buildings in addition to their two (2) existing office buildings.
Most recently the Charles Schwab Corporation, working with major Westlake land owner and
developer Hillwood Properties, announced their intention to build a regional headquarters
which will initially consist of a +/- 250,000 sq. ft. office building and a parking garage. It will
be adjacent to a mixed-use development that Hillwood will develop and be located near the
intersection of SH170 and SH114. Initially, the Charles Schwab Corporation plans to add 500
employees this year at its temporary Roanoke Road office building while it builds its
permanent Westlake campus over the next several years. Schwab’s stated goal is to ultimately
employee 5,000 at its permanent Westlake facility.
The Town has also pursued the ideas advanced in the Economic Development element of
Forging Westlake. That is, to pursue businesses that ultimately expand the Town’s tax base
with high quality office buildings, and at the same time, expands our financial services
business core which has already been created with the location of Fidelity and Deloitte.
Further, we pursue the types of businesses interested in high quality office campus
development and creating well-paying positions for employees. With the Schwab
announcement (and the start of construction of the TD AmeriTrade’s complex in Southlake)
we are well on our way to becoming a financial services corridor within the DFW Metroplex.
While offering economic development incentives for the Schwab project, the tax abatement
provided is in-line with incentives offered in our region, plus the company is also providing
vi
one-time funding for Westlake Academy. Staff will continue to monitor our corporate
stakeholders and attempt to identify avenues to strengthen these relationships and assist in
attracting new corporations to Westlake. The expansion of commercial development will
continue to grow Westlake’s daytime population.
The mixed-use development called Entrada, located at FM1938/Davis Blvd. and SH114, will
also create growth in our commercial tax base. During the past budget year, commercial
buildings totaling 55,000 sq. ft. have been approved by the Town for Entrada. A beautiful
CVS Pharmacy has been completed with others soon to follow.
Additionally, the Solana Office Complex was acquired by Equity Office (Blackstone)
approximately two (2) years ago. Their multi-million-dollar investment in the development to
improve its parking, landscaping and buildings has been a strong positive path for Westlake.
Equity’s investment is beginning to bear fruit with higher office occupancy levels in Solana
which are a direct result of their improvement efforts.
Continued Impact of Westlake Academy on Residential Growth: The number of Westlake
residents who are selecting Westlake Academy as the educational choice for their students has
doubled in the past five years. Resident surveys continually indicate that the Academy is one
of the main reasons our residents move to Westlake, and why they plan to remain in our
community. For example, the 2015 academic services survey results indicate 96% of the new
residents say enrollment at Westlake Academy was very/somewhat important to their decision
to live in the community. Planning for Academy growth in the face of residential
development continues to be a challenge. Wherever possible, the Town has entered economic
development agreements with residential developers to provide funding for Westlake
Academy facilities to lessen the impact of their residential development on the Academy’s
enrollment.
Westlake Academy has experienced steady enrollment growth from 491 students in SY 2009-
10 to a projected 866 in SY 2016-17. The current increase of student population is a result of
the Phase I expansion efforts on the Academy campus and our development. Our growth
requires that we carefully manage our student enrollment processes to provide adequate space
for children of Westlake residents. Approximately 39,000 sq. ft. of new facilities space was
opened at the Academy in SY 14/15. It was comprised of a secondary classroom building,
field house, and a primary years’ multi-use hall. These buildings increased our capacity and
allowed for decompression of our current school facilities. The lottery waiting list for student
admissions from our secondary boundaries continues to grow from 705 in 2011 to
approximately 2,250 students for this coming school year.
Public Education Funding Shortfall: State funding of public education was decreased by
the State Legislature in 2011. While it has increased somewhat since then, the allocation has
not kept pace with basic cost increases. This negatively impacts Westlake since it owns and
operates our public charter school, Westlake Academy, which receives 80% of its operational
funding from the State. The municipal government continues to allocate significant resources
to the Academy to deal with State funding limitations, maintain high quality educational
services, provide for the Academy’s facilities and support services, as well as preserve student
slots for Westlake residents as we grow residentially. Additionally, the Westlake Academy
Foundation (WAF) raises significant operating funds for the Academy, without which the
school could not operate. Recently the Texas Supreme Court upheld, after a multi-year
lawsuit, the constitutionality of Texas’ public school funding system. For most public
vii
schools, including a charter school like Westlake Academy, what the Court’s decision holds
for us in the future in terms of the State Legislature possibly increasing State public school
funding remains to be seen.
Implementation of the Comprehensive Plan: With adoption of the Town’s new
Comprehensive Plan, Forging Westlake, several of our ordinances need to be rewritten and
new ones drafted so that the Plan’s recommendations can be implemented. The task of
implementing the changes to the ordinances will require additional staff and consultant time
and oversight to ensure we reflect the direction of the Council and the Comp Plan. Progress
on the first phase of this work is being made in FY15-16, but will need to continue into FY16-
17.
Pursuit of Infrastructure and Services Reinvestment While Combating Certain Cost
Increases: We must reinvest in maintaining our infrastructure. However, with growth comes
the need to also invest through capital spending in new public buildings and our water and
sewer utility. An example of a key project needed to deal with the Town’s growth is a Phase 2
water transmission line to our wholesale water provider. This is a costly project which will
require significant dollars.
Staffing Levels, Insurance Costs, and Retention: Our infrastructure investment must be
facilitated in concert with the consideration of additional staffing needs to maintain our
current service levels in response to growth. This includes keeping our compensation/benefit
package competitive to attract and retain excellent employees so we can continue delivering
exceptional service. We have found this to be especially true as it relates to having adequate
staffing to deal with development review and construction. We have balanced all these
components considering maximizing staff efficiencies and processes to help contain large
expenditure drivers such as employee health insurance.
Continued Emphasis on Long-range Financial Planning: The FY16-17 budget contains an
updated Long-Range Financial Forecast which identifies key revenue and expenditure drivers
while assessing historical financial trends and their potential impact upon the town’s financial
stability. The forecast must be monitored and updated during the budget formulation process,
as well as reviewed with the Town Council as the budget is being prepared. Staff will also
continue to produce a quarterly financial report for the Council that monitors and analyzes
trends in the General Fund, Utility Fund, and Visitor Association Fund. The report serves as a
valuable tool to assist in developing a proactive, rather than reactive, approach to our
changing financial trends.
Users of this document, as well as others interested in the programs and services offered by the Town
of Westlake, are encouraged to read the Town's Fiscal Year 2016-17 Budget. The budget details the
Town's long-term goals and financial policies, and describes program accomplishments and
initiatives.
Other Information
The Government Finance Officers Association of the United States of America and Canada (GFOA)
awarded a Certificate of Achievement for Excellence in Financial Reporting to the Town of Westlake
for its comprehensive annual financial report (CAFR) for the fiscal year ended September 30, 2015.
viii
This was the ninth year the Town has received this prestigious award. To be awarded a Certificate of
Achievement, a government must publish an easily readable and efficiently organized comprehensive
annual financial report. This report must satisfy both generally accepted accounting principles and
applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current
comprehensive annual financial report (CAFR) continues to meet the Certificate of Achievement
Program's requirements and we are submitting it to GFOA to determine its eligibility for another
certificate.
In addition, we also received our ninth GFOA Distinguished Budget Presentation Award for the fiscal
year beginning October 1, 2015 for our municipal budget and the 7th year for our educational
services budget for Westlake Academy, a component unit of the Town. To qualify for the
Distinguished Budget Presentation Award, the Town and Academy budget documents had to be
judged proficient as a policy document, a financial plan, an operations guide, and a communications
device.
Westlake Academy has also received recognition from the Association of School Business Officials
International as a recipient of the International Award for Budget Excellence for the past seven years.
The Finance Department received its fourth Popular Annual Financial Report (PAFR) converting
much of the FY 2014-2015 audit document into an easy-to-read format for our residents. The goal is
to encourage resident awareness as it relates to Town finances through the condensed version of the
budget. The report provides an “overview of our financial position and policies, and conveys our
commitment to delivering responsive services and programs in a fiscally responsible manner.”
Acknowledgements
The preparation of this report could not be accomplished without the efficient and dedicated services
of the entire staff of the Finance Department. Appreciation is expressed to Town employees
throughout the organization, especially those employees who were instrumental in the successful
completion of this report.
The staff would also like to thank the Mayor and Town Council for their conservative leadership and
their support in planning and conducting the financial operations of the Town in a responsible and
progressive manner.
Respectfully Submitted,
Tom Brymer Debbie Piper, CPA
Town Manager Finance Director
ix
x
xi
TOWN OF WESTLAKE
ELECTED AND APPOINTED OFFICIALS
Laura
Wheat
Alesa
Belvedere
Michael
Barrett
Rick
Rennhack
Carol
Langdon
Wayne
Stoltenberg
ELECTED OFFICIALS
Mayor Laura Wheat
Mayor Pro-Tem Carol Langdon
Council Member Ales Belvedere
Council Member Michael Barrett
Council Member Rich Renhack
Council Member Wayne Stoltenberg
APPOINTED OFFICIALS
TOM BRYMER
Town Manager
AMANDA DEGAN GINGER AWTRY
Assistant Town Manager Director of Communications
and Community Affairs
DEBBIE PIPER KELLY EDWARDS
Director of Finance Town Secretary
RON RUTHVEN TODD WOOD
Director of Planning and
Development Director of Human Resources
and Administrative Services
JARROD GREENWOOD RICHARD WHITTEN
Director of Public Works Fire Chief
TROY MEYER JASON POWER
Director of Facilities Maintenance
and Parks and Recreation Director of Information
Technology
TOWN OF WESTLAKE
FINANCIAL SECTION
TOWN OF WESTLAKE
AN INDEPENDENT MEMBER OF BAKER TILLY INTERNATIONAL WEAVER AND TIDWELL, L.L.P. CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS 12221 MERIT DRIVE, SUITE 1400, DALLAS, TX 75251 P: 972.490.1970 F: 972.702.8321
1
INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor
and Members of Town Council
Town of Westlake, Texas
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the
business-type activities, the aggregate discretely presented component units, each major fund,
and the aggregate remaining fund information of the Town of Westlake (the Town) as of and for
the year ended September 30, 2016, and the related notes to the financial statements, which
collectively comprise the Town’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial
statements in accordance with accounting principles generally accepted in the United States of
America; this includes the design, implementation, and maintenance of internal control relevant
to the preparation and fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity’s internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinions.
Town of Westlake, Texas
Page 2
2
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the business-type activities, the
aggregate discretely presented component units, each major fund, and the aggregate remaining
fund information of the Town, as of September 30, 2016, and the respective changes in financial
position, and, where applicable, cash flows thereof for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
Emphasis of Matter Regarding Going Concern
The accompanying financial statements have been prepared assuming the discretely presented
component units will continue as going concerns. As discussed in Note 16 to the financial
statements, the discretely presented component units are in default on their bonds due to failure
to meet certain bond covenants. This gives bond holders the right to accelerate and demand
payment on the bonds in full. This condition raises substantial doubt about the discretely
presented component units’ ability to continue as going concerns. Management’s plans
regarding these matters are also described in Note 16. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty. Our opinion is not
modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis on pages 4 through 15 and budgetary comparison
information and pension schedules on pages 79 through 86 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.
Town of Westlake, Texas
Page 3
3
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Town’s basic financial statements. The introductory section, combining
and individual fund financial statements and schedules, and statistical section, are presented for
purposes of additional analysis and are not a required part of the financial statements.
The combining and individual fund 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 basic financial statements. Such 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 basic financial statements or to the basic
financial statements themselves, and other additional procedures in accordance with auditing
standards generally accepted in the United States of America. In our opinion, the combining and
individual fund statements and schedules are fairly stated in all material respects in relation to
the basic financial statements as a whole.
The introductory and statistical sections 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.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
February 23, 2017 on our consideration of the Town’s internal control over financial reporting
and on our tests of its compliance with certain provisions of laws, regulations, contracts, and
grant agreements and other matters. The purpose of that report is to describe the scope of our
testing of internal control over financial reporting and compliance and the results of that testing,
and not to provide an opinion on internal control over financial reporting or on compliance. That
report is an integral part of an audit performed in accordance with Government Auditing
Standards in considering the Town’s internal control over financial reporting and compliance.
WEAVER AND TIDWELL, L.L.P.
Dallas, Texas
February 23, 2017
TOWN OF WESTLAKE
MANAGEMENT’S DISCUSSION AND ANALYSIS
TOWN OF WESTLAKE
4
MANAGEMENT’S DISCUSSION AND ANALYSIS
Management of the Town of Westlake offers the readers of the Town’s financial statements this
narrative overview and analysis of the financial activities and financial position of the Town for the
fiscal year ended September 30, 2016. Financial reporting is limited in its ability to provide the “big
picture” but rather focuses on financial position and changes in financial position. In other words; are
revenues and/or expenditures higher or lower than the previous year? Has the net position
(containing both short- term and long-term assets and liabilities) or fund balances (the current
“spendable” assets less current liabilities) of the government been maintained? Readers are
encouraged to consider the information presented here in conjunction with the additional information
furnished in the letter of transmittal (pages i-viii of this report) and the statistical section (pages 98-
116 of this report) as well as information in the annual operating budget, along with other community
information found on the town’s website at www.westlake-tx.org. It should be noted that the
Independent Auditor’s Report describes the auditors’ association with the various sections of this
report and that all the additional information from the website and other Town sources are unaudited.
FINANCIAL HIGHLIGHTS
• The assets and deferred outflows of resources of the Town exceeded its liabilities and
deferred inflows of resources at the close of the most recent fiscal year by $57,051,960 (Net
position). This number must be viewed within the context that the vast majority of the Town's
net position of $44,343,700 (77.7%) is its investment in capital assets and that most capital
assets in a government entity do not directly generate revenue nor can they be sold to
generate liquid capital. The net position restricted for specific purposes totaled $7,489,048
(13.2%). The remaining amount, $5,219,212 (9.1%), represents unrestricted net position.
• As of the close of the current fiscal year, the Town of Westlake's governmental funds
reported combined ending fund balances of $20,395,822, which is a decrease of $7,789,659
in comparison with the prior year. Within this total, $11,303,101 is non-spendable, restricted,
committed or assigned by management or council.
• At the end of the current fiscal year, fund balance f or the general fund was $9,679,473, an
increase of $1,998,923 in comparison with the prior year. Of this total fund balance,
$9,092,721 is unassigned. This represents 134% of the total general fund expenditures and
is equivalent to 489 operating days.
• The Town's capital assets (net of accumulated depreciation) increased by $7,455,000. This is
due in large part to an increase of $9,148,608 in construction in progress accounts. This
increase is primarily due to the infrastructure construction expenditures related to the Public
Improvement District (PID) offset by accumulated depreciation in capital improvements
($567K), buildings ($660K), machinery and equipment ($433K).
• The Town's long-term debt decreased by $807,692 in total, due to the scheduled repayment
of principal on outstanding bonded debt.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the Town's basic financial
statements. The Town's basic financial statements are comprised of the following three components:
1) government-wide financial statements, 2) fund financial statements, and 3) notes to the
financial statements. This report also contains supplementary information in addition to the basic
financial statements themselves.
5
Government-wide financial statements
The government-wide financial statements are designed to provide readers with a broad overview of
the Town's finances, in a manner similar to a private-sector business. The government-wide financial
statements are prepared utilizing the economic resources measurement focus and the accrual basis
of accounting.
The statement of net position presents information on all the Town's assets and deferred outflows of
resources and liabilities and deferred inflows of resources with the difference between the two
reported as net position. Over time, increases or decreases in the Town's net position serves as a
useful indicator of whether the financial position of the Town is improving or weakening.
The statement of activities presents information showing how the government's net position changed
during the most recent fiscal year. All the revenues and expenses are reported as soon as the
underlying event giving rise to the change occurs, regardless of the timing of related cash flows.
Thus, revenues and expenses are reported in this statement for some items that will only result in
cash flows in future fiscal periods.
Both government-wide financial statements distinguish functions of the Town that are principally
supported by sales taxes, property taxes, and intergovernmental revenues (governmental activities)
from other functions that are intended to recover all or a significant portion of their costs through user
fees and charges (business-type activities). The governmental activities of the Town include general
government, public safety, culture and recreation, economic development, public works, visitor
services and education. The business-type activities of the Town include water/sewer and cemetery.
The government-wide financial statements include not only the Town (known as the primary
government), but also discretely presented component units including all the Texas Student Housing
entities. Financial information for these component units is reported separately from the financial
information presented for the primary government itself. See pages 33- 34 of the "Financial Section"
for detail on these entities. In addition, the Town has the following blended component units: Lone
Star Public Facilities Corporation, 4B Economic Development Corporation, and Westlake Academy,
an open enrollment charter school owned and operated by the Town of Westlake.
Fund Financial Statements
A fund is a grouping of related accounts used to maintain control over resources that have been
segregated for specific activities or objectives. The Town, like other state and local governments,
uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements. Below are the three types of funds.
Governmental funds - Governmental funds are used to account for essentially the same functions
reported as government activities in the government-wide financial 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 on balances of spendable resources
available at the end of the fiscal year. Such information may be useful in evaluating a government's
near-term financial requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements. By
doing so, the reader may better understand the long-term impact of the government's near-term
financing decisions. Both the governmental fund balance sheet and the governmental fund statement
6
of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this
comparison between governmental funds and governmental activities.
The Town maintains ten 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, Westlake Academy, Debt Service,
Capital Projects, Solana PID Capital Project, and Westlake Academy Expansion funds, all of which
are presented as major funds. Data from the other funds (Visitors Association, Economic
Development, Lone Star Public Facilities Corporation and Westlake 4B Economic Development
Corporation) are combined into a single, aggregate presentation. Individual fund data for each of
these non-major governmental funds is provided in the form of combining statements elsewhere in
this report.
The Town adopts an annual appropriated budget for all funds, except the Capital Projects, Solana
PID Capital Project, and Westlake Academy Expansion funds which are project-length based
budgets. A budgetary comparison statement has been provided for all appropriate funds to
demonstrate compliance with this budget.
The basic governmental fund financial statements can be found on pages 19 -24 of this report.
Proprietary funds - There are two types of proprietary funds, Enterprise Funds and Internal Service
Funds. An Enterprise Fund is the only proprietary fund currently maintained by the Town. Enterprise
funds are used to report the same functions presented as business-type activities in the government-
wide financial statements. The Town uses enterprise funds to account for its water and sewer
activities and its cemetery activities. All activities associated with providing such services are
accounted for in this fund, including administration, operation, maintenance, debt service, capital
improvements, billing and collection. The Town's intent is that the costs of providing the services to
the general public on a continuing basis is financed through user based charges in a manner similar
to a private enterprise. The Town has no Internal Service Funds (fund to report activities that provide
supplies and services for the Town's other programs and activities, i.e. self -insurance and fleet
management).
The basic proprietary fund financial statements can be found on pages 25 -27 on this report.
Fiduciary funds - Fiduciary funds are used to account for resources held for the benefit of parties
outside the government. Fiduciary funds are not reflected in the government-wide financial
statements because the resources of those funds are not available to support the Town's own
programs. The accounting used for fiduciary funds is similar to the accounting used for proprietary
funds. The Town of Westlake maintains one fiduciary fund, the PID Agency (debt service) Fund.
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 33 – 78 of this report.
Other information. In addition to the basic financial statements and accompanying notes, this
report also presents schedules that further support the information in the financial statements.
The schedules are presented immediately following the notes to the financial statements and can be
found on pages 79-96.
7
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of the government’s financial
position. In the case of the Town, assets exceeded liabilities by $57,051,960 at the close of the most
recent fiscal year.
The Town’s combined net position changed from a year ago, decreasing $1,318,848 from
$58,370,808 to $57,051,960. Our analysis below focuses on the net position (Table 1) and changes
in net position (Table 2) of the Town’s governmental and business-type activities.
The largest portion of the Town’s net position, $44,343,700 (77.7%), reflects its investment in capital
assets (e.g. land, buildings, equipment, improvements, construction in progress, and infrastructure),
less any debt used to acquire capital assets still outstanding. The Town uses these capital assets to
provide services to citizens; consequently, these assets are not available for future spending.
Although the Town’s investment in its capital assets is reported net of related debt, it should be noted
that the resources needed to repay this debt must be provided from other sources since the capital
assets themselves cannot be used to liquidate these liabilities.
An additional portion of the Town’s net position, $7,489,048 (13.2%), represents resources that are
subject to external or internal restrictions on how they may be used. The remaining balance of
$5,219,212 (9.1%) represents unrestricted net position which is available for the town’s ongoing
expenses.
Table 1
Condensed Statement of Net Position
At September 30, 2016 and 2015
2016 2015 2016 2015 2016 2015
Current and other assets 23,271,426$ 29,451,181$ 4,197,173$ 4,879,191$ 27,468,599$ 34,330,372$
Capital assets 62,414,763 54,470,449 12,173,674 12,662,988 74,588,437 67,133,437
Total Assets 85,686,189$ 83,921,630$ 16,370,847$ 17,542,179$ 102,057,036$ 101,463,809$
Deferred outflows of resources 2,546,463 1,549,467 84,021 42,985 2,630,484 1,592,452
Noncurrent liabilities 30,117,478 29,466,305 6,308,304 6,357,349 36,425,782$ 35,823,654$
Other liabilities 2,984,891 1,377,466 8,143,561 7,425,583 11,128,452 8,803,049
Total Liabilities 33,102,369 30,843,771 14,451,865 13,782,932 47,554,234$ 44,626,703$
Deferred inflows of resources 81,326 58,750 - - 81,326 58,750
Net investments in capital assets 38,299,337 29,633,298 6,044,363 6,410,547 44,343,700$ 36,043,845$
Restricted 7,489,048 17,827,177 - - 7,489,048 17,827,177
Unrestricted 9,260,572 7,108,101 (4,041,360)(2,608,315)5,219,212 4,499,786
Total Net Position 55,048,957$ 54,568,576$ 2,003,003$ 3,802,232$ 57,051,960$ 58,370,808$
Governmental Activities Business-type Activities Total
Assets
Liabilities
Net Position
8
Table 2
Changes in Net Position
For the years ended September 30, 2016 and 2015
2016 2015 2016 2015 2016 2015
Program revenues
Fees, fines and charges for services 3,794,327$ 2,466,032$ 3,979,201$ 3,563,395$ 7,773,528$ 6,029,427$
Operating grant and contributions 7,863,168 7,615,653 - - 7,863,168 7,615,653
Capital grants and contributions 269,185 19,983,078 - - 269,185 19,983,078
General revenues
Taxes
Sales taxes 4,609,523 4,925,428 - - 4,609,523 4,925,428
Property taxes 1,476,355 1,438,969 - - 1,476,355 1,438,969
Hotel occupancy taxes 822,490 872,179 - - 822,490 872,179
Mixed beverage taxes 61,476 59,184 - - 61,476 59,184
Franchise taxes 930,043 963,040 - - 930,043 963,040
Interest on investments 55,600 28,904 13,095 7,083 68,695 35,987
Miscellaneous 241,501 198,199 - - 241,501 198,199
Total revenues 20,123,668 38,550,666 3,992,296 3,570,478 24,115,964$ 42,121,144$
General governmental 4,491,557 3,145,716 - - 4,491,557 3,145,716
Public safety 2,737,084 2,381,437 - - 2,737,084 2,381,437
Culture and recreation 187,274 129,970 - - 187,274 129,970
Economic development 141,779 171,757 - - 141,779 171,757
Public works 1,102,636 1,081,996 - - 1,102,636 1,081,996
Visitor services 740,835 665,936 - - 740,835 665,936
Education 9,516,287 8,598,261 - - 9,516,287 8,598,261
Interest on long-term debt 990,413 1,022,201 - - 990,413 1,022,201
Water and sewer - - 5,519,116 4,861,529 5,519,116 4,861,529
Cemetery - - 7,831 7,297 7,831 7,297
Total expenses 19,907,865 17,197,274 5,526,947 4,868,826 25,434,812 22,066,100
Increase (decrease) in net
position before transfers 215,803 21,353,392 (1,534,651) (1,298,348) (1,318,848) 20,055,044
Transfers 264,578 323,100 (264,578)(323,100)- -
Change in net position 480,381 21,676,492 (1,799,229) (1,621,448) (1,318,848) 20,055,044
Net position, beginning
as previously stated 54,568,576 33,422,961 3,802,232 5,423,680 58,370,808 38,846,641
Cumulative effect of a change
in accounting principle - (530,877) - - - (530,877)
Net position, ending 55,048,957$ 54,568,576$ 2,003,003$ 3,802,232$ 57,051,960$ 58,370,808$
Governmental Activities Business-type Activities Total
Revenues:
Expenses:
9
Governmental activities: Governmental activities increased the Town's net position by $480,381
(0.9%), increasing net position from $54,568,576 to $55,048,957. Unrestricted net position, the part
of net position that can be used to finance day-to-day operations without constraints established by
debt covenants, enabling legislation, other legal requirements, and/or Council or management's
decision, increased by $2,152,471.
Total revenues for governmental activities decreased by $18,426,998 when compared to the prior
year. General revenue had a decrease of $288,915, while program revenues had a decrease of
$18,138,083.
Program revenues
• Fees, fines and charges for services increased $1,328,295. The Planning and
Development department realized the biggest increase in revenues with the majority
($1.4M) coming from inspection/plan review fees, reforestation, building permit fees and
PID inspection fees. The Fire/EMS department reflected a 20% decrease of $27K
primarily from EMS ambulance revenues and permit/inspection fees.
• Operating Grants and Contributions increased by $247,515 mostly due to the increase of
state funding because of increased enrollment at Westlake Academy as a result of the
campus expansion.
• Capital Grants and Contributions decreased by $19,713,893 with the major portion
($18M) being attributed to contribution of funds in the prior year related to the Public
Improvement District (PID).
General revenues
• Sales tax decreased by $315,905 mostly due to large audit collections and one-time
payments received in the prior fiscal year.
• Property tax receipts increased by $37,386.
• Hotel occupancy taxes decreased by $49,689. The Town received a reduced amount of
hotel receipts from Deloitte University.
• Franchise fees decreased by $32,997. Increases of $76,782 were reflected in AT&T,
Trinity Waste and Charter communications franchise fees. These were offset by
decreases of $109,782 in Tri-County Electric, One-Source, TXU Gas and Verizon
franchise fees.
• Miscellaneous income increased by $43,302 due to reimbursements. Certain PID related
contracted services are paid from town funds and reimbursement is sought from the PID.
These revenues are not taken against the expenditure to more clearly see the
expenditures related to this project.
Expenses
• Total expenses for governmental activities increased by $2,710,591 or approximately
16%.
• General Government expenditures reflected a 43% increase of $1.3M; Payroll and related
taxes/retirement increased with the addition of staff; increase in consultant fees was
10
related to local PID expenditures (offset by reimbursements); information technology
expenditures saw a slight increase; and, contracted and professional fees such as
attorney and consultants fees and feasibility studies increased.
• Education expenditures increased by 15% ($918K) which was created by several factors.
A new capital lease, as well as the remaining principal balance payable from previous
leases, was expensed during the current fiscal year; additional technology tot aling $125K
was purchased with designated fund balance; and, additional payroll related expenditures
were due to the addition of teachers and the realignment of salary scale to be within 3 of
the districts surveyed for market comparison purposes.
• Public Safety saw an 11% increase of $355K; payroll and related taxes/retirement
increased $102K; other operating and maintenance accounts increased $250K, with the
majority coming from various supply and service accounts such as the Keller Police
contract and communication services.
Business-type Activities: The net position of our business-type activities ended fiscal year 2016 at
$2,003,003 compared with $3,802,232 in 2015. This represents a decrease in net position of
$1,799,229, or 47% less than the prior fiscal year.
Revenues (Charges for Services) for business-type activities for the fiscal year ending September
30, 2016 were $3,992,296; an increase of $421,818 or 12%. Operating expenses for the business-
type activities for business-type activities for the fiscal year ending September 30, 2016 were
$5,526,947; an increase of $658,121 or 14%. This increase was primarily attributed to a payment to
the City of Fort Worth for the Town’s proportionate share of water system upgrades to provide
Westlake with future capacity needs. In FY 2015 payments of $1.082M were made and $1.114M in
FY2016. The business-type activities also had net transfers out of $264,578 in 2016 compared to
transfers out of $323,100 in the prior year.
FINANCIAL ANALYSIS OF THE TOWN'S FUNDS
As noted earlier, the Town uses fund accounting to ensure and demonstrate compliance with
finance-related legal requirements.
Governmental funds. The focus of the Town's governmental funds is to provide information on
near-term inflows, outflows, and balances of spendable resources. Such information is useful in
assessing the Town's financing requirements. In particular, unassigned fund balance may serve as a
useful measure of a town's net resources available for spending at the end of the fiscal year.
As of the end of the current fiscal year, the Town's governmental funds reported combined ending
fund balances of $20,395,822; a decrease of $7,789,659 in comparison with the prior year.
Approximately 45% of this total ($9,092,721) constitutes unassigned fund balance, which is available
for spending at the government's discretion. The remainder of fund balance is non-spendable,
restricted, committed or assigned to indicate that it is not available for new spending because it has
already been committed.
The following tables present a summary of general, special revenue, capital project, and debt service
fund revenues and expenditures for the fiscal year ended September 30, 2016, and the amount and
percentage of increases and decreases in relation to the prior year.
11
Table 3
Summary of Governmental Funds Revenues
Increase Percent
2015-16 Percent (Decrease)Increase
Amount Of Total From 2014-15 (Decrease)
Taxes
Sales taxes 4,609,523$ 23.1%(315,905)$ -6.4%
Property taxes 1,479,451 7.4%45,432 3.2%
Hotel occupancy taxes 61,476 0.3%2,292 3.9%
Mixed beverage taxes 822,490 4.1%(49,689)-5.7%
Franchise taxes 930,043 4.7%(32,997)-3.4%
Subtotal - Taxes 7,902,983 39.6%(350,867)-4.3%
State program 6,543,782 32.8%370,364 6.0%
Federal program 98,564 0.5%10,767 12.3%
Interest income 55,600 0.3%26,696 92.4%
Building permits and fees 2,715,236 13.6%1,514,446 126.1%
Fines and penalties 796,014 4.0%61,862 8.4%
Intergovernmental - 0.0%(3,810)-100.0%
Contributions 283,684 1.4%(18,502,269) -98.5%
Miscellaneous 1,542,835 7.8%(924,546)-37.5%
Total Revenues 19,938,698$ 100.0%(17,797,357)$ -47.2%
Revenues
Table 4
Summary of Governmental Funds Expenditures
Increase Percent
2015-16 Percent (Decrease)Increase
Amount Of Total From 2014-15 (Decrease)
General government 3,280,507$ 11.5%869,268$ 36.1%
Public safety 2,453,857 8.6%(36,694) -1.5%
Culture and recreation 185,923 0.7%55,601 42.7%
Economic development 141,779 0.5%(29,978) -17.5%
Public works 773,751 2.7%29,723 4.0%
Visitor services 725,971 2.6%55,814 8.3%
Education 9,245,592 32.5%1,307,091 16.5%
Capital outlay 9,561,954 33.6%7,058,969 282.0%
Debt services 2,097,901 7.3%(10,273) -0.5%
Total Expenditures 28,467,235$ 100.0%9,299,521$ 48.5%
Expenditures
12
Below are summaries and explanations of the changes in fund balances from fiscal year 2015 to
fiscal year 2016 of the Governmental Funds that are contained in the above totals.
General Fund - Fund balance increased $1,998,923 (26%). At the end of the current fiscal year,
fund balance for the general fund was $9,679,473, an increase of $1,998,923 in comparison with the
prior year. Of this total, $9,092,721 is unassigned. This represents 134% of the total general fund
expenditures and is equivalent to 489 operating days.
• Revenues increased $1.1M - The Planning and Development department realized the biggest
increase in revenues with the majority ($1.5M) coming from inspection/plan review fees,
reforestation, building permit fees and PID inspection fees. Transfers in decreased ($108K) due
to a one-time transfer from the PID capital project fund. Other revenues that presented an
increase were court revenues, interest income and property taxes. Decreases were seen in
Franchise fees and general sales tax. The sales tax decrease of $241K is primarily due to large
audit collections and one-time payments received in the prior fiscal year.
• Expenditures decreased 1.0M - Payroll and related taxes, insurance and retirement increased
$354K. Other expenditures decreased due to one-time transactions in the prior year.
Maintenance and replacement projects decreased approximately $1.0M due to fire department
equipment purchases of a ladder pumper truck and Westlake Academy playground equipment.
Westlake Academy - Fund balance decreased by $514,950 primarily due to the purchase of
technology with designated funds as well as the use of local grant funds provided in the prior year.
Visitors Association Fund - Fund balance decreased by $70,932 (7%) primarily due to the additional
funds paid to the Marriott based on an economic development agreement to bring more groups to
Westlake.
Capital Projects Fund - Fund balance increased by $16,178 largely due to contributions for Westlake
Academy Outdoor Science Center and Bleachers/Tower project. In addition, there were increases for
transportation projects relating to signalization at Dover Road, FM 1938 Solana Blvd and SH 114.
Westlake Academy Expansion Fund - Fund balance increased by $1,374 (from $395,753 to
$397,127). This fund was created to account for proceeds from long-term financing and revenue
and expenditures related to authorized construction related to the expansion of Westlake Academy
facilities. The original project for this fund was completed in FY2015. Transfers in will be recorded
for lot fee revenue based on an economic development agreement related to lot sales in several
residential sub-division in future years.
Solana Public Improvement District (PID) Capital Project Fund - Fund balance decreased by
$9,229,851 due to infrastructure construction on the project. This fund was created in FY 2015 to
detail the funds contributed based on bond proceeds for the construction of infrastructure for the
Entrada development. All infrastructure will be conveyed to the Town upon completion.
Proprietary Funds. - The Town's proprietary fund statements provide the same type of information
found in the government-wide financial statements with greater detail. Total net position of the
Proprietary Funds amounted to $2,003,003, a decrease of $1,799,229 which was primarily due to the
payment to the City of Fort Worth for the Town’s proportionate share of water system upgrades to
provide Westlake with future capacity needs.
13
General Fund Budgetary Highlights
The General Fund budget for fiscal year 2016 was amended in total to increase the net change in
fund balance from $1,108,690 to $1,740,078, a total increase of $631,388. The amended budget for
net revenues was increased by $308K (3%) based on anticipated increases in several categories.
The amended budget for net expenditures was decreased by $322K (4%). This was primarily due to
a decrease in reduction of transfers out to the Capital Project Fund.
The General Fund actual revenue collections/other sources were more than the amended budget by
$118K. Actual expenditure costs/other sources were less than the amended budget by $155K (3%)
due mostly to less than anticipated service expenditures.
Capital Assets and Debt Administration
Capital Assets. The Town's investment in capital assets for its governmental and business-type
activities as of September 30, 2016, totaled $74,588,437 (net of accumulated depreciation). The
investment in capital assets includes land, buildings, improvements, machinery and equipment,
infrastructure, and construction in progress. The net increase in the Town's investment in capital
assets for the current fiscal year was $7,455,000 or 11% mostly due to the additional construction in
progress related to the PID. Increase for governmental activities was 14.6% ($7,944,314) and 3.9%
($489,314) decrease in business-type activities.
Major capital asset events during the current fiscal year included the following:
• $9.4M - Construction in Progress (Primarily PID)
• $122K - Solana and Dove Road/FM 1938 Signalization
• $ 87K - Fire Station Complex
• $ 70K - E Dove Road Reconstruction/Drainage
• $ 56K - Stage Coach Hills Pavement Repair
• $131K - IT Network and Server Equipment
• $ 75K - Upgrade to audio/visual and furniture for Council Chambers and office staff
Table 5
Town’s Capital Assets
(Net of Accumulated Depreciation)
2016 2015 2016 2015 2016 2015
Land 11,896,664$ 11,896,664$ -$ -$ 11,896,664$ 11,896,664$
Capital improvements 10,335,819 10,539,908 10,097,620 10,461,290 20,433,439 21,001,198
Building 26,351,151 27,011,626 26,351,151 27,011,626
Machinery and equipment 1,614,268 1,914,727 1,669,017 1,802,085 3,283,285 3,716,812
W/W treatments rights 121,645 153,492 121,645 153,492
Construction in progress 12,216,861 3,107,524 285,392 246,121 12,502,253 3,353,645
Total capital assets 62,414,763$ 54,470,449$ 12,173,674$ 12,662,988$ 74,588,437$ 67,133,437$
Governmental Activities Business-type Activities Total
Additional information on the Town's capital assets can be found in Note 4 on pages 49- 52 of this
report.
14
Long-term liabilities - At the end of the current fiscal year, the Town had total long-term debt
outstanding of $34,116,309. Of this amount, $27,142,000 represents bonded indebtedness,
$563,045 capital leases, $275,101 in loans and $5,126,958 contractual obligations. During the fiscal
year 2015-2016, the Town's total debt payable decreased by $807,692. This decrease was due to
the scheduled repayment of principal and interest on outstanding bonded debt.
Standard & Poor's Ratings Services, a division of McGraw-Hill, Inc. has recently increased the
Town's rate from AA+/stable to AAA/stable. Additional information about the rating agency or the
significance of the rating provided may be obtained from Standard & Poor's web site. Additional
information on the Town's long-term debt can be found in Note 5 on pages 52- 61.
Table 6
Outstanding Debt at Year-End
2016 2015 2016 2015 2016 2015
General obligation bonds 16,685,000$ 17,480,000$ -$ -$ 16,685,000$ 17,480,000$
Certificates of obligation 9,485,700 9,759,250 971,300 992,750 10,457,000 10,752,000
Contractual obligations - 33,814 5,126,958 5,226,294 5,126,958 5,260,108
Capital leases 563,045 174,373 - - 563,045 174,373
Premium on bonds 657,912 701,120 31,053 33,397 688,965 734,517
Notes payable 275,101 323,227 275,101 323,227
Compensated absences 274,216 172,704 46,024 27,072 320,240 199,776
Total long-term debt 27,940,974$ 28,644,488$ 6,175,335$ 6,279,513$ 34,116,309$ 34,924,001$
Governmental Activities Business-type Activities Total
The Town’s net pension liability relative to its participation in Texas Municipal Retirement System
(TMRS) increased from $707,597 as of September 30, 2015 to $1,215,618 as of September 30,
2016. The Academy’s proportionate share of the Teacher Retirement System (TRS) net pension
liability increased from $192,056 as of August 31, 2015 to $1,093,865 as of August 31, 2016.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS
In the FY 2016-17 adopted budget, the General Fund balance is anticipated to decrease by $2.2M
(111%). Adopted revenue collections are budgeted to be less than the 2016 actuals by $486K (5%);
budgeted transfers in show a decrease of $313K (32%) with the majority coming from a one-time
transfer in the prior year from Utility Fund.
Anticipated expenditures/other uses are anticipated to be approximately $1M more than the prior
year. Total overall service expenditures are predicted to increase $379K (15%) with the majority
being from planning & development. Other accounts that the town has anticipated increases are
legal and legislative fees $46K; records management $49K; Police contract $27K; information
technology contracted services $43K; and $42K from engineering and consultant fees. Fire
department projects for the anticipated purchase of a new fire marshal vehicle and several accounts
related to Westlake Academy facility projects increased $127K (53%). Information Technology
accounts increased $38K (49%). Rent and utility expenditures increased $197K (52%) mainly due
to the anticipated relocation of the town hall and the associated increased rent and utility that will be
incurred with the larger building.
In this coming year, the Town’s budget continues to be impacted by encouraging economic signs.
Growth in Westlake, along the SH 114 corridor and with the progress of our new mixed-use
development, Entrada, should continue to increase the commercial revenue sources. Additionally,
increases are expected in residential-related revenues due to new housing developments on the
horizon.
15
The Utility Fund FY 2016-17 adopted budget projects a 21% decrease of $333,272 from prior year
actuals primarily due to the payment to the City of Fort Worth ($888K) for the Town’s proportionate
share of water system upgrades to provide Westlake with future capacity needs. $1.1M was paid
towards the project in the prior fiscal year.
CONTACTING THE TOWN'S FINANCE DEPARTMENT
This financial report is designed to provide our citizens, customers, and investors and creditors with
a general overview of the Town's finances and to demonstrate the Town's accountability for the
money it receives. If you have questions about this report or need additional financial information,
contact Debbie Piper, Town of Westlake Finance Director, at 817-490-5712 or email at
dpiper@westlake-tx.org.
BASIC FINANCIAL STATEMENTS
TOWN OF WESTLAKE
EXHIBIT A-1
TOWN OF WESTLAKE
STATEMENT OF NET POSITION
SEPTEMBER 30, 2016
The accompanying notes are
an integral part of this statement.
16
Primary Government
Discretely
Governmental Business-type Presented
Activities Activities Total Component Units
Cash and cash equivalents 13,423,371$ 2,786,259$ 16,209,630$ 5,087,498$
Receivables (net of allowance)1,738,899 1,048,008 2,786,907 901,817
Inventories - 95,893 95,893 -
Other assets 81,512 29,828 111,340 81,713
Restricted cash and cash equivalents 8,027,644 237,185 8,264,829 4,312,563
Capital assets:
Land and construction in progress 24,113,525 285,392 24,398,917 7,282,413
Buildings and improvements 47,170,122 14,899,416 62,069,538 69,554,153
Wastewater treatment rights - 635,199 635,199 -
Machinery and equipment 4,554,843 3,560,780 8,115,623 5,902,065
Less accumulated depreciation (13,423,727) (7,207,113) (20,630,840) (36,595,275)
Total capital assets 62,414,763 12,173,674 74,588,437 46,143,356
Total Assets 85,686,189 16,370,847 102,057,036 56,526,947
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows of resources - TRS pension 869,371 - 869,371 -
Deferred outflows of resources - TMRS pension 684,049 84,021 768,070 -
Deferred loss on refunding 993,043 - 993,043 -
Total Deferred Outflows of Resources 2,546,463 84,021 2,630,484 -
Accounts payable 2,870,128 596,206 3,466,334 1,331,686
Customer deposit payable - 237,185 237,185 -
Unearned revenue 2,520 254,719 257,239 1,390,973
Accrued interest payable 112,243 7,055,451 7,167,694 29,021,722
Noncurrent liabilities:
Due within one year 1,394,943 130,744 1,525,687 72,998,799
Due in more than one year 28,722,535 6,177,560 34,900,095 -
Total Liabilities 33,102,369 14,451,865 47,554,234 104,743,180
DEFERRED INFLOWS OF RESOURCES
Deferred inflows - TRS pension 81,326 - 81,326 -
Total Deferred Inflows of Resources 81,326 - 81,326 -
Net investment in capital assets 38,299,337 6,044,363 44,343,700 (26,855,443)
Restricted for:
Tourism 1,003,636 - 1,003,636 -
Construction 5,943,200 - 5,943,200 -
Court security and technology 238,636 - 238,636 -
Future projects 13,679 - 13,679 -
Education 289,897 - 289,897 -
Unrestricted 9,260,572 (4,041,360)5,219,212 (21,360,790)
Total net position 55,048,957$ 2,003,003$ 57,051,960$ (48,216,233)$
NET POSITION
ASSETS
LIABILITIES
TOWN OF WESTLAKE
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2016
The accompanying notes are
an integral part of this statement.
17
Program Revenues
Charges for Operating Grants Capital Grants
Expenses Services and Contributions and Contributions
Primary government:
Governmental activities:
General government 4,491,557$ 789,457$ -$ -$
Public safety 2,737,084 932,017 13,299 -
Cultural and recreation 187,274 - 1,200 -
Public works 1,102,636 1,789,776 - 269,185
Economic development 141,779 - - -
Visitor services 740,835 - - -
Education 9,516,287 283,077 7,848,669 -
Interest on long-term debt 990,534 - - -
Total governmental activities 19,907,865 3,794,327 7,863,168 269,185
Business-type activities:
Water and sewer 5,519,116 3,968,086 - -
Cemetery 7,831 11,115 - -
Total business-type activities 5,526,947 3,979,201 - -
Total primary government 25,434,812$ 7,773,528$ 7,863,168$ 269,185$
Reported Discretely Presented
Component Units 18,409,488$ 13,552,335$ -$ -$
GENERAL REVENUES AND TRANSFERS:
Taxes:
Sales taxes
Property taxes
Hotel occupancy taxes
Mixed beverage taxes
Franchise taxes
Interest Income
Miscellaneous
Transfers
Total general revenues and transfers
Change in net position
NET POSITION, beginning of year
NET POSITION, end of year
Functions/Programs
EXHIBIT A-2
18
Primary Government
Discretely
Governmental Business - Type Presented
Activities Activities Total Component Units
(3,702,100)$ -$ (3,702,100)$ -$
(1,791,768) - (1,791,768) -
(186,074) - (186,074) -
956,325 - 956,325 -
(141,779) - (141,779) -
(740,835) - (740,835) -
(1,384,541) - (1,384,541) -
(990,534) - (990,534) -
(7,981,185) - (7,981,185) -
- (1,551,030) (1,551,030) -
- 3,284 3,284
- (1,547,746) (1,547,746) -
(7,981,185) (1,547,746) (9,528,931) -
-$ -$ -$ (4,857,153)$
4,609,523 - 4,609,523 -
1,476,355 - 1,476,355 -
822,490 - 822,490 -
61,476 - 61,476 -
930,043 - 930,043 -
55,600 13,095 68,695 8,469
241,501 - 241,501 -
264,578 (264,578) - -
8,461,566 (251,483) 8,210,083 8,469
480,381 (1,799,229) (1,318,848) (4,848,684)
54,568,576 3,802,232 58,370,808 (43,367,549)
55,048,957$ 2,003,003$ 57,051,960$ (48,216,233)$
Net (Expense) Revenue and
Changes in Net Position
TOWN OF WESTLAKE
BALANCE SHEET
GOVERNMENTAL FUNDS
SEPTEMBER 30, 2016
The accompanying notes are
are an integral part of this statement.
19
Debt
Westlake Service
General Academy Fund
ASSETS:
Cash and cash equivalents 8,939,772$ 878,151$ 30,979$
Receivables :
Property taxes 2,674 - 282
Accounts receivable 991,831 448,254 -
Due from other funds 199,237 - -
Prepaid items 12,794 60,403 -
Restricted cash and cash equivalents - - -
TOTAL ASSETS 10,146,308$ 1,386,808$ 31,261$
LIABILITIES, DEFFERED INFLOWS OF
RESOURCES AND FUND BALANCE:
Liabilities:
Accounts payable 464,160$ 228,046$ 512$
Unearned revenue - - -
Due to other funds - - -
Total liabilities 464,160 228,046 512
DEFERRED INFLOWS OF RESOURCES:
Unavailable resources - property taxes 2,675 - 281
Total deferred inflows of resources 2,675 - 281
Fund Balances:
Nonspendable:
Prepaid items 12,794 60,403 -
Restricted for:
Tourism - - -
Capital items - - -
Court security and technology 238,636 - -
Debt service - - 30,468
Future projects - - -
Education - 1,098,359 -
Committed for:
Street and tree improvements 335,322 - -
Unassigned 9,092,721 - -
Total fund balances 9,679,473 1,158,762 30,468
TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES 10,146,308$ 1,386,808$ 31,261$
EXHIBIT A-3
.
20
Westlake Solana PID Nonmajor Total
Capital Academy Capital Governmental Governmental
Projects Expansion Projects Funds Funds
2,192,443$ 397,127$ -$ 984,899$ 13,423,371$
- - - - 2,956
- - - 295,858 1,735,943
- - - - 199,237
- - - 8,315 81,512
- - 8,027,644 - 8,027,644
2,192,443$ 397,127$ 8,027,644$ 1,289,072$ 23,470,663$
31,281$ -$ 2,084,444$ 61,685$ 2,870,128$
- - - 2,520 2,520
- - - 199,237 199,237
31,281 - 2,084,444 263,442 3,071,885
- - - - 2,956
- - - - 2,956
- - - 8,315 81,512
- - - 1,003,636 1,003,636
2,161,162 397,127 5,943,200 - 8,501,489
- - - - 238,636
- - - - 30,468
- - - 13,679 13,679
- - - - 1,098,359
- - - - 335,322
- - - - 9,092,721
2,161,162 397,127 5,943,200 1,025,630 20,395,822
2,192,443$ 397,127$ 8,027,644$ 1,289,072$ 23,470,663$
EXHIBIT A-4
TOWN OF WESTLAKE
RECONCILIATION OF THE GOVERMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION
SEPTEMBER 30, 2016
The accompanying notes are
are an integral part of this statement.
21
Total fund balance-governmental funds balance sheet 20,395,822$
Amounts reported for governmental activities in the statement of net position
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.62,414,763
Deferred losses on refunding are reported as deferred outlfows of resources
in the government-wide statement of net position.993,043
Revenues earned but not available within sixty days of the fiscal year-end are not
recognized as revenue in the fund financial statements.2,956
Deferred outflows of resources related to the Town's and Academy's net
pension liability increase net position by $684,049 and $869,371, respectively;
while the Academy's deferred resource outflows related to the net pension
liability decreases net position by $81,326. This amount is the net effect.1,472,094
Interest payable on long-term debt does not require current financial resources, therefore
interest payable is not reported as a liability in the governmental funds balance sheet.(112,243)
Long-term liabilities, including bonds payable, are not due and payable in the current
period, and therefore are not reported in the fund financial statements.(30,117,478)
NET POSITION OF GOVERNMENTAL ACTIVITIES - statement of net position 55,048,957$
TOWN OF WESTLAKE
TOWN OF WESTLAKE
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2016
The accompanying notes are
are an integral part of this statement.
22
Westlake Debt
General Academy Service Fund
REVENUES:
Taxes
Sales 3,345,688$ -$ -$
Property 1,318,058 - 161,393
Mixed beverage 61,476 - -
Hotel occupancy - - -
Franchise 930,043 - -
State program revenues - 6,543,782 -
Federal program revenues - 98,564 -
Interest income 18,911 3,126 -
Building permits and fees 2,715,236 - -
Fines and penalties 796,014 - -
Contributions 13,299 - -
Miscellaneous 227,886 1,301,334 -
Total revenues 9,426,611 7,946,806 161,393
EXPENDITURES:
Current
General government 3,280,507 - -
Public safety 2,453,857 - -
Cultural and recreation 185,923 - -
Public works 773,751 - -
Economic development - - -
Visitor services - - -
Education - 9,245,592 -
Capital outlay 50,563 - -
Debt service
Principal retirement 48,126 - 1,068,550
Interest and other fiscal charges 121 5,464 939,882
Total expenditures 6,792,848 9,251,056 2,008,432
Excess (deficiency) of revenues
Over (Under) Expenditures 2,633,763 (1,304,250) (1,847,039)
OTHER FINANCING SOURCES (USES)
Transfers in 277,878 315,000 1,856,591
Transfers out (912,718) - -
Capital lease proceeds - 474,300 -
Net other financing sources (uses)(634,840) 789,300 1,856,591
NET CHANGE IN FUND BALANCES 1,998,923 (514,950) 9,552
FUND BALANCES, AT BEGINNING OF YEAR 7,680,550 1,673,712 20,916
FUND BALANCES AT END OF YEAR 9,679,473$ 1,158,762$ 30,468$
EXHIBIT A-5
23
Westlake Solana PID Nonmajor Total
Capital Academy Capital Governmental Governmental
Projects Expansion Projects Funds Funds
-$ -$ -$ 1,263,835$ 4,609,523$
- - - - 1,479,451
- - - - 61,476
- - - 822,490 822,490
- - - - 930,043
- - - - 6,543,782
- - - - 98,564
7,272 1,374 21,261 3,656 55,600
- - - - 2,715,236
- - - - 796,014
269,185 - - 1,200 283,684
- - - 13,615 1,542,835
276,457 1,374 21,261 2,104,796 19,938,698
- - - - 3,280,507
- - - - 2,453,857
- - - - 185,923
- - - - 773,751
- - - 141,779 141,779
- - - 725,971 725,971
- - - - 9,245,592
260,279 - 9,251,112 - 9,561,954
- - - 33,814 1,150,490
- - - 1,944 947,411
260,279 - 9,251,112 903,508 28,467,235
16,178 1,374 (9,229,851) 1,201,288 (8,528,537)
- - - 35,758 2,485,227
- - - (1,307,931) (2,220,649)
- - - 474,300
- - - (1,272,173) 738,878
16,178 1,374 (9,229,851) (70,885) (7,789,659)
2,144,984 395,753 15,173,051 1,096,515 28,185,481
2,161,162$ 397,127$ 5,943,200$ 1,025,630$ 20,395,822$
EXHIBIT A-6
TOWN OF WESTLAKE
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, 2016
The accompanying notes are
are an integral part of this statement.
24
Net change in fund balances- total governmental funds.(7,789,659)$
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.9,585,607
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.(1,632,768)
Loss on sale of capital assets decreases net position in the government-wide financial
statements, but only proceeds from the sale are recorded in the governmental funds
financial statements. This amount represents the reduction in capital assets.(8,525)
The repayment of the principal of long term debt consumes the current financial resources of
governmental funds, but has no effect on net position. The amortization of bond premiums
and deferred gain/loss on refunding of long term debt is reported in the statement of
activities but does not require the use of current financial resources. Therefore, the
effect of the amortization of these various items are not reported in the statement of
revenues, expenditures, and changes in fund balance.
This amount represents the net effect of the following items:
Repayments 1,150,490
Amortization of premium on bonds 43,208
Amortization of deferred loss on refunding (100,853) 1,092,845
Governmental funds reflect the proceeds of capital leases as other financing sources and
payments as expenditures. However, in the government-wide statements, the proceeds
and payments are reflected as changes in liabilities. This amount represents the net
effect of proceeds ($474,300) and payments, $85,628.(388,672)
Current year changes in accrued interest payable does not require the use of current
financial resources; and therefore, are not reported as expenditures in governmental funds.5,575
Implementation of GASB 68 requires certain expenditures to be de-expended and recorded as deferred
outflows of resources. These contributions made after the measurement date caused the change in
net position to increase by $211,995. Contributions made before the measurement date, but after the
previous measurement date were reversed from deferred outflows and recorded as a current year
expense, causing a decrease in the change in net position of $188,615. In addition, the recording of
pension expense decreased the change in net position by $138,234. This amount is the net effect.(114,855)
Implementation of GASB 68 also affected the Academy. Contributions made to TRS after the
measurement date caused the change in net position to increase by $88,399. Contributions made
before the measurement period caused a decrease in the change in net position of $92,325.
The net share of the Academy's amount of deferred inflows and outflows of resources decreased (162,793)
the change in net position by $158,867. This amount is the net effect.
Current year changes in the long-term liability for compensated absences do not require
the use of current financial resources; and therefore, are not reported as expenditures in
governmental funds.(101,512)
Certain revenues in the government-wide statement of activities that do not provide current
financial resources are not reported as revenue in the governmental funds.(4,862)
CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES - statement of activities 480,381$
EXHIBIT A-7
TOWN OF WESTLAKE
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
SEPTEMBER 30, 2016
The accompanying notes are
are an integral part of this statement.
25
Utility Cemetery
Fund Fund Total
ASSETS:
Current Assets
Cash and cash equivalents 2,723,915$ 62,344$ 2,786,259$
Accounts receivable 1,048,008 - 1,048,008
Inventories - 95,893 95,893
Prepaid expenses 29,828 - 29,828
Restricted cash and investments 237,185 - 237,185
Total current assets 4,038,936 158,237 4,197,173
Noncurrent assets
Capital assets:
Construction in progress 285,392 - 285,392
Buildings and improvements 14,899,416 - 14,899,416
Wastewwater treatment rights 635,199 - 635,199
Machinery and equipment 3,560,780 - 3,560,780
Less: accumulated depreciation (7,207,113) - (7,207,113)
Total capital assets 12,173,674 - 12,173,674
Total noncurrent assets 12,173,674 - 12,173,674
TOTAL ASSETS 16,212,610 158,237 16,370,847
DEFERRED OUTFLOWS OF RESOURCES:
Deferred outflows - TMRS pension 84,021 - 84,021
TOTAL DEFERRED OUTFLOWS OF RESOURCES 84,021 - 84,021
LIABILITIES
Current liabilities:
Accounts payable 596,206 - 596,206
Customer deposits payable 237,185 - 237,185
Accrued interest payable 7,055,451 - 7,055,451
Unearned revenue 254,719 - 254,719
Compensated absences - current portion 4,601 4,601
Current portion of bonds payable 22,000 - 22,000
Contractual obligations 104,143 - 104,143
Total current liabilities 8,274,305 - 8,274,305
Long-term liabilities:
Bonds payable 949,300 - 949,300
Compensated absences 41,413 - 41,413
Contractual obligations 5,053,868 - 5,053,868
Net pension liability 132,979 - 132,979
Total long-term liabilities 6,177,560 - 6,177,560
TOTAL LIABILITIES 14,451,865 - 14,451,865
NET POSITION
Net investment in capital assets 6,044,363 - 6,044,363
Unrestricted (4,199,597) 158,237 (4,041,360)
TOTAL NET POSITION 1,844,766$ 158,237$ 2,003,003$
EXHIBIT A-8
TOWN OF WESTLAKE
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2016
The accompanying notes are
are an integral part of this statement.
26
Utility Cemetery
Fund Fund Total
OPERATING REVENUES:
Charges for services $3,830,533 11,115$ 3,841,648$
Miscellaneous revenue 137,553 - 137,553
Total operating revenues 3,968,086 11,115 3,979,201
OPERATING EXPENSES:
Payroll costs 423,436 - 423,436
Professional and contract services 1,186,445 6,685 1,193,130
Depreciation 496,738 - 496,738
Amortization of wastewater treatment rights 31,847 - 31,847
Water purchases 1,358,068 - 1,358,068
Cost of cemetary lots sold - 696 696
Other operating costs 1,203,193 450 1,203,643
Total operating expenses 4,699,727 7,831 4,707,558
Net operating income (loss)(731,641) 3,284 (728,357)
NON-OPERATING REVENUES(EXPENSES):
Interest income 12,880 215 13,095
Interest expense (819,389) - (819,389)
Total non-operating revenues (expenses)(806,509) 215 (806,294)
INCOME (LOSS) BEFORE TRANSFERS AND
CAPITAL CONTRIBUTIONS (1,538,150) 3,499 (1,534,651)
Transfer out (264,578) - (264,578)
Total transfers and capital contributions (264,578) - (264,578)
Change in net position (1,802,728) 3,499 (1,799,229)
Total net position, beginning of year 3,647,494 154,738 3,802,232
Total net position, end of year $1,844,766 158,237$ 2,003,003$
EXHIBIT A-9
TOWN OF WESTLAKE
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2016
The accompanying notes are
are an integral part of this statement.
27
Utility Cemetery
CASH FLOWS FROM OPERATING ACTIVITIES:Fund Fund Total
Receipts from customers 3,933,503$ 11,115$ 3,944,618$
Payments to employees (418,601) - (418,601)
Payments to suppliers (3,702,037) (8,760) (3,710,797)
Net cash provided by (used in) operating activities (187,135) 2,355 (184,780)
CASH FLOW FROM NONCAPITAL FINANCING
ACTIVITIES:
Transfer to other funds (264,578) - (264,578)
Net cash used in noncapital financing activities (264,578) - (264,578)
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Principal paid on debt (121,958) - (121,958)
Interest paid on debt (136,450) - (136,450)
Investment earnings 12,880 215 13,095
Purchase of property and equipment (39,271) - (39,271)
Net cash provided by (used in) capital and related financing activities (284,799) 215 (284,584)
Net increase (decrease) in cash (736,512) 2,570 (733,942)
Cash and cash equivalents at the
beginning of the year 3,697,612 59,774 3,757,386
Cash and cash equivalents at the
end of the year 2,961,100$ 62,344$ 3,023,444$
RECONCILIATION OF TOTAL CASH AND CASH EQUIVALENTS:
Cash and cash equivalents 2,723,915$ 62,344$ 2,786,259$
Restricted cash and cash equivalents 237,185 - 237,185
Total cash and cash equivalents 2,961,100 62,344 3,023,444
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Operating income (loss)(731,641) 3,284 (728,357)
Adjustments to reconcile operating income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 528,585 - 528,585
Pension expense 14,107 - 14,107
Changes in operating assets and liabilities:
Receivables (22,792) - (22,792)
Prepaid Items (29,828) - (29,828)
Inventory - 696 696
Compensated absences 18,942 - 18,942
Accounts payable 47,283 (1,625) 45,658
Customer deposits payable 18,025 - 18,025
Unearned revenue (29,816) - (29,816)
Net cash provided by (used in) operating activities (187,135)$ 2,355$ (184,780)$
TOWN OF WESTLAKE
EXHIBIT A-10
TOWN OF WESTLAKE
STATEMENT OF FIDUCIARY NET POSITION
AGENCY FUND
SEPTEMBER 30, 2016
The accompanying notes are
are an integral part of this statement.
28
PID Agency
Fund
ASSETS
Restricted cash and cash equivalents 2,769,575$
Total Assets 2,769,575$
LIABILITIES
Liability to bond holders 2,769,575$
Total Liabilities 2,769,575$
TOWN OF WESTLAKE
DISCRETELY PRESENTED COMPONENT UNITS
COMBINING STATEMENT OF NET POSITION
SEPTEMBER 30, 2016
The accompanying notes are
are an integral part of this statement.
29
Texas Student
Texas Student Housing Authority
Housing Jefferson Commons
Corporation at Town Lake
Denton Project Project
ASSETS
Cash and cash equivalents 451,153$ 231,575$
Accounts receivable (net of allowance)48,532 17,511
Prepaid rent 35,007 520
Restricted assets:Cash and cash equivalents 1,920,451 56,856
Capital assets:
Land 2,200,000 2,182,816
Buildings and improvements 25,705,000 16,963,841
Machinery and equipment 1,253,841 1,211,085
Less: accumulated depreciation (14,407,723) (8,512,377)
Total assets 17,206,261 12,151,827
LIABILITIES AND NET POSITION
LIABILITIES:
Accounts payable and accrued expenses 268,702 489,385
Unearned revenue 230,443 127,821
Accrued interest payable 7,803,016 4,887,748
Bonds payable 24,807,616 19,246,983
Total liabilities 33,109,777 24,751,937
NET POSITION:Net investment in capital assets (10,056,498) (7,401,618)
Unrestricted (5,847,018) (5,198,492)
Total net position (15,903,516)$ (12,600,110)$
EXHIBIT A-11
30
Texas Student
Housing
Corporation Texas Student
College Station Housing
Project Authority Total
3,424,156$ 980,614$ 5,087,498$
488,432 347,342 901,817
46,186 - 81,713
2,335,256 - 4,312,563
2,899,597 - 7,282,413
26,885,312 - 69,554,153
3,437,139 - 5,902,065
(13,675,175) - (36,595,275)
25,840,903 1,327,956 56,526,947
571,293 2,306 1,331,686
994,959 37,750 1,390,973
16,330,958 - 29,021,722
28,944,200 - 72,998,799
46,841,410 40,056 104,743,180
(9,397,327) - (26,855,443)
(11,603,180) 1,287,900 (21,360,790)
(21,000,507)$ 1,287,900$ (48,216,233)$
TOWN OF WESTLAKE
DISCRETELY PRESENTED COMPONENT UNITS
COMBINING STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2016
The accompanying notes are
an integral part of this statement.
31
Program Revenues
Charges for Operating Grants Capital Grants
Functions/Programs Expenses Services and Contributions and Contributions
Business-type activities:
Texas Student Housing Authority 241,645$ 580,855$ -$ -$
Texas Student Housing Authority:
College Station Project 8,189,891 4,590,864 - -
Jefferson Commons at Town Lake 4,402,259 3,309,222 - -
Denton Project 5,575,693 5,071,394 - -
Total business-type activities 18,409,488 13,552,335 - -
Total component units 18,409,488$ 13,552,335$ -$ -$
GENERAL REVENUES:
Interest Income
Total general revenues
Change in Net Postion
NET POSITION, beginning of year, as restated
NET POSITION, end of year
EXHIBIT A-12
32
Texas Student Texas Student
Texas Student Housing Authority Housing
Housing Jefferson Commons Corporation Texas Student
Corporation at Town Lake College Station Housing
Denton Project Project Project Authority Total
-$ -$ -$ 339,210$ 339,210$
- - (3,599,027) - (3,599,027)
- (1,093,037) - - (1,093,037)
(504,299) - - - (504,299)
(504,299) (1,093,037) (3,599,027) 339,210 (4,857,153)
(504,299)$ (1,093,037)$ (3,599,027)$ 339,210$ (4,857,153)$
4,340 - 954 3,175 8,469
4,340 - 954 3,175 8,469
(499,959) (1,093,037) (3,598,073) 342,385 (4,848,684)
(15,403,557) (11,507,073) (17,402,434) 945,515 (43,367,549)
(15,903,516)$ (12,600,110)$ (21,000,507)$ 1,287,900$ (48,216,233)$
TOWN OF WESTLAKE
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
33
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Town of Westlake, Texas (the Town) was incorporated under the provisions of the laws
of the State of Texas on December 26, 1956. The Town operates under a Council- Manager
form of government and provides the following services as authorized by the laws of the
State of Texas: public safety; cultural and recreation; and economic development.
The accounting and reporting policies of the Town conform to accounting principles
generally accepted in the United States of America for local governments. Generally
accepted accounting principles (GAAP) for local governments include those principles
prescribed by the Governmental Accounting Standards Board (GASB). The following is a
summary of the more significant accounting and reporting policies:
Financial Reporting Entity
The accompanying financial statements present the government and its component
units, entities for which the government is considered to be financially accountable.
Blended component units, although legally separate entities, are, in substance, part of
the Town's operations and are appropriately presented as funds of the primary
government. Discretely presented component units, on the other hand, are reported in a
separate column in the government-wide financial statements to emphasize it is legally
separate from the Town.
Based on these criteria, the financial information of the following entities have been
blended or discretely presented within the financial statements: Lone Star Public
Facilities Corporation, 4B Economic Development Corporation, Westlake Academy,
Texas Student Housing Authority, Texas Student Housing Authority – Jefferson
Commons at Town Lake Project, Texas Student Housing Corporation – College Station
Project and Texas Student Housing Corporation – Denton Project.
The Texas Student Housing Authority, Texas Student Housing Authority – Jefferson
Commons at Town Lake Project, Texas Student Housing Corporation – College
Station Project, and Texas Student Housing Corporation – Denton Project
(collectively, Texas Student Housing Entities) are Texas nonprofit organizations as a
duly constituted authority of the Town pursuant to Section 53.35(b) of the Texas
Education Code, as amended (Act). Texas Student Housing Entities' primary
purpose is to construct, own, and operate student housing facilities on college
campuses in Texas. The board consists of seven directors which are appointed by
the Town's governing body and has the ability to remove at will the appointed
members; thus, the governing body can impose its will on the organizations.
However, the board is not substantively the same as the Town’s governing body;
therefore, the Texas Student Housing Entities are reported as discretely presented
component units (enterprise funds). The Town is not responsible for the long-term
debt of the Texas Student Housing Entities. The Texas Student Housing Entities’
year-end is August 31.
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
34
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Component Units
Discretely Presented
Separately issued financial reports are available for the all the Texas Student
Housing Entities. These reports may be obtained by contacting the following office.
Texas Student Housing Authority
99 Trophy Club Drive
Trophy Club, Texas 76262
Blended
Lone Star Public Facilities Corporation is a Texas nonprofit corporation that acts on
behalf of the Town to further the public purposes under the Public Facilities
Corporation Act, as it’s duly constituted authority and instrumentality. The board of
directors, appointed by the Town's governing body, is comprised of seven members,
of whom five must be members of the Town's governing body. Since the board of
directors is substantively the same as the Town's governing body, and a financial
benefit relationship exists, the entity has been reported as a blended component unit
of the Town.
4B Economic Development Corporation is a Texas nonprofit industrial corporation
under the Development Corporation Act of 1979 formed to promote economic
development within the Town and the State of Texas in order to eliminate
unemployment and underemployment, and to promote and encourage employment
and the public welfare of, for, and on behalf of the Town by developing,
implementing, financing, and providing one or more projects defined and permitted
under Section 4B of the Act. The board of directors is composed of seven persons
appointed by the members of the Town's governing board. Four of the members of
the board of directors are members of the Town's governing board. Since the board
of directors is substantively the same as the Town's governing body, and a financial
benefit relationship exists, the entity has been reported as a blended component unit
of the Town.
Westlake Academy (Academy) is an open-enrollment charter school, as provided by
Subchapter D, Chapter 12, of the Texas Education Code. The Town of Westlake
(Charter Holder) applied for and became the first municipality in Texas to ever
receive this special charter designation. The board consists of six trustees and is
appointed by the Town's governing body. Currently, all the members of the board of
trustees are members of the Town's governing body. Since the board of directors is
substantively the same as the Town's governing body, and a financial benefit
relationship exists, the entity has been reported as a blended component unit of the
Town. The Academy's year-end is August 31.
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
35
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and the
Statement of Activities) report information on all of the non-fiduciary activities of the
Town. 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. Likewise, the primary
government is reported separately from certain legally separate component units for
which the primary government is financially accountable.
The statement of activities demonstrates the degree to which the direct expenses of a
given function or segment is offset by program revenues. Direct expenses are those that
are clearly identifiable with a specific function or segment. Program revenues include 1)
charges to customers or applicants who purchase, use, or directly benefit from goods,
services, or privileges provided by a given function or segment and 2) grants and
contributions that are restricted to meeting the operational or capital requirements of a
particular function or segment. Taxes and other items not properly included among
program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds and proprietary
funds. Major individual Governmental Funds and major individual Enterprise Funds are
reported as separate columns in the fund financial statements.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund
financial statements. Revenues are recorded when earned and expenses are recorded
when a liability is incurred, regardless of the timing of related cash flows. Grants and
similar items are recognized as revenue as soon as all eligibility requirements imposed
by the provider have been met.
Governmental fund financial statements are reported using the current financial
resources measurement focus and the modified accrual basis of accounting. Revenues
are recognized as soon as they are both measurable and available. Revenues are
considered to be available when they are collectible within the current period or soon
enough thereafter to pay liabilities of the current period. For this purpose, the Town
considers revenues to be available if they are collected within 60 days of the end of the
current fiscal period. Expenditures generally are recorded when a liability is incurred, as
under accrual accounting. However, debt service expenditures, as well as expenditures
related to compensated absences and claims and judgments, are recorded only when
payment is due.
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
36
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Measurement Focus, Basis of Accounting, and Financial Statement Presentation –
Continued
Sales taxes, franchise taxes, licenses, and interest associated with the current fiscal
period are all considered to be susceptible to accrual and so have been recognized as
revenues of the current fiscal period. All other revenue items are considered to be
measurable and available only when cash is received by the Town.
The Town uses funds to report on its financial position and the results of its operations.
Fund accounting is designed to demonstrate legal compliance and to aid financial
management by segregating transactions related to certain government functions or
activities. A fund is a separate accounting entity with a self-balancing set of accounts.
Governmental Funds are those through which most governmental functions of the
Town are financed. The acquisition, use, and balances of the Town's expendable
financial resources and the related liabilities (except those accounted for in the
proprietary fund type) are accounted for through governmental funds. The measurement
focus is upon determination of changes in financial position, rather than upon income
determination.
The Town reports the following major governmental funds:
General Fund - to account for all financial resources except those required to be
accounted for in another fund. The General Fund balance is available for any purpose,
provided it is expended or transferred in accordance with the legally adopted budget of
the Town. The General Fund includes the Town’s Major Maintenance and Replacement
Fund, Vehicle Replacement Fund, and PIF (local) Fund.
Westlake Academy Fund - to account for all local, state and federal revenue and
related educational expenditures of the Academy.
Debt Service Fund - to account for resources accumulated and payments made for
principal and interest on long-term general obligation debt of governmental funds.
Capital Projects Fund - to account for proceeds from long-term financing and revenue
and expenditures related to authorized construction and other capital asset acquisitions
other than those related to the expansion of Westlake Academy facilities.
Westlake Academy Expansion Fund – to account for proceeds from long-term
financing and revenue and expenditures related to authorized construction related to the
expansion of Westlake Academy facilities.
Solana Public Improvement District (PID) Capital Projects Fund – to account for the
acquisition or construction of capital facilities and improvements relating to the Solana
public improvement district.
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
37
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Measurement Focus, Basis of Accounting, and Financial Statement Presentation –
Continued
In addition, the Town reports the following nonmajor governmental funds:
Visitors Association Fund - to account for municipal hotel occupancy taxes collected
and expenditures to promote tourism and the convention and hotel industry.
Lone Star Public Facilities Corporation - to account for investment activity relating to
the Lone Star Public Facilities Corporation.
4B Economic Development Corporation - to account for sales tax collected to fund
the activities of the 4B Economic Development Corporation.
Economic Development Fund - to account for sales tax and hotel occupancy tax
collected to fund activity relating to Economic Development agreements.
The Town adopts an annual appropriated budget for all governmental funds except
capital projects, Solana PID capital projects, and Westlake Academy Expansion funds,
which are project-length based budgets. A budgetary comparison schedule has been
provided for all appropriate funds to demonstrate compliance with the budget.
Proprietary Funds distinguish operating revenues and expenses from nonoperating
items. Operating revenues and expenses generally result from providing services and
producing and delivering goods in connection with a proprietary fund's principal ongoing
operations. The principal operating revenues of the Town's Enterprise Fund are charges
to customers for sales and services. Operating expenses for the Enterprise Fund include
the cost of sales and services, administrative expenses, and depreciation on capital
assets. All revenue and expenses not meeting this definition are reported as
nonoperating revenue and expenses.
The Town reports the following major proprietary funds:
Utility Fund - to account for revenues and expenses related to providing water and
sewer services to the general public on a continuing basis. The Utility Maintenance and
Replacement fund is also included with the Utility Fund.
Cemetery Fund- to account for the operations of the Town's cemetery.
The Town reports the following fiduciary fund:
Solana PID Agency Fund – to account for bond proceeds, assessments, and related
debt associated with bonds issued by the Town as an agent for the Solana public
improvement district.
As a general rule, the effect of interfund activity has been eliminated from the
government-wide financial statements. Exceptions to this general rule are charges
between the Town's water and wastewater function and various other functions of the
government. Elimination of these charges would distort the direct costs and program
revenue reported for the various functions concerned.
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
38
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Measurement Focus, Basis of Accounting, and Financial Statement Presentation –
Continued
Amounts reported as program revenues include: 1) charges to customer or applicants
for goods, services, or privileges provided, 2) operating grants and contributions, and 3)
capital grants and contributions, including special assessments. Internally dedicated
resources are reported as general revenues rather than as program revenue. Likewise,
general revenue includes all taxes.
Assets, Liabilities, and Net Position or Equity
Cash and Cash Equivalents
Cash and investments of all funds, including restricted cash, are available upon
demand and are considered to be "cash equivalents."
For purposes of the statement of cash flows, the Town considers highly-liquid
investments (including restricted assets) with an original maturity of three months or
less when purchased to be cash equivalents.
State statutes authorize the Town to invest in (1) obligations of the United States or
its agencies and instrumentalities; (2) direct obligations of the State of Texas or its
agencies; (3) other obligations, the principal of, and interest on, which are
unconditionally guaranteed or insured by the State of Texas or the United States; (4)
obligations of states, agencies, counties, cities, and other political subdivisions of any
state having been rated as to investment quality by a nationally recognized
investment rating firm and having received a rating of not less than "A" or its
equivalent; (5) certificates of deposit by state or national banks domiciled in this state
that are (a) guaranteed or insured by the Federal Deposit Insurance Corporation, or
its successor; or, (b) secured by obligations that are described by (1) - (4); or (6) fully
collateralized direct repurchase agreements having a defined termination date,
secured by obligations described by (1) pledged with third-party selected or (2)
approved by the Town, and placed through a primary government securities dealer.
All investments are recorded at fair value based on quoted market prices. Fair value
is the amount at which a financial instrument could be exchanged in a current
transaction between willing parties.
Receivables and Payables
Transactions 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" (i.e., the current portion of interfund loans) or "advances to/from other
funds" (i.e., the non-current portion of interfund loans). All other outstanding
balances between funds are reported 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."
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
39
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Assets, Liabilities, and Net Position or Equity – Continued
Receivables and Payables – Continued
Advances between funds, as reported in the fund financial statements, are offset by
nonspendable fund balance in applicable governmental funds to indicate that they
are not available for appropriation and are not expendable available financial
resources.
The Town's property taxes are levied on October 1 on the assessed value listed as
of the prior January 1 for all real and business personal property located in the Town.
Assessed values are established at 100% of estimated market value. Property taxes
attach as an enforceable lien on property as of January 1. Taxes are due by
January 31 following the October 1 levy date and are considered delinquent after
January 31 of each year.
All property tax receivables are shown net of an allowance for uncollectibles. The net
property tax receivable allowance is equal to management’s estimate of uncollectible
outstanding property taxes at September 30, 2016.
Restricted Assets
Certain bond proceeds, as well as certain resources set aside for their repayment,
are classified as restricted assets on the balance sheet because their use is limited
by applicable bond covenants.
Inventories and prepaid items
Inventories, which are expended as they are consumed, are stated at the lower of
cost or market on a first-in, first-out basis.
Certain payments to vendors reflect costs applicable to future accounting periods
and are recorded as prepaid items in both the government-wide and fund financial
statements.
Fund Changes and Transactions Between Funds
Legally authorized transfers are treated as transfers in and out and are included as
other financing sources (uses) of both governmental and proprietary funds.
The Town allocates an indirect cost percentage of the salaries, wages and related
costs of personnel who perform administrative services as well as other indirect
costs necessary for the operation of various funds. Expenses are budgeted and paid
from the appropriate fund.
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
40
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Assets, Liabilities, and Net Position or Equity – Continued
Capital Assets
All capital assets are valued at historical cost or estimated historical cost if actual
historical cost is not available. The cost of nominal maintenance and repairs that do
not add value to the asset or materially extend assets' lives are not capitalized.
Donated assets are valued at their fair market value on the date donated. Assets
capitalized have an original cost of $5,000 or more and three years or more of life. All
infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), regardless
of the acquisition date or amount, have been included. Estimated historical cost for
initial reporting of infrastructure assets (those reported by governmental activities)
was valued by estimating the current replacement cost of the infrastructure and using
an index to deflate the cost to the estimated acquisition/construction year. As the
Town constructs or acquires additional capital assets, including infrastructure assets,
they are capitalized and reported at historical cost.
Depreciation has been calculated on each class of depreciable property using the
straight-line method. Estimated useful lives are as follows:
Years
Water and sewer system 10-50
Buildings 20-50
Machinery and equipment 3-30
Improvements 5-30
Information systems and software 3
Assets
Compensated Absences
The Town's policy allows employees to earn 5 days of vacation and 5 days of sick
leave between six months and one year of service, and 10 days of vacation and 10
days of sick leave between one year and two years of service and each successive
year through five years of service. After completion of 5 years of service, 15 days of
vacation and 15 days of sick leave per year are earned. After completion of 10 years
of service, 20 days of vacation and 20 days of sick leave per year are earned. The
Town makes sick and vacation time available in full at the beginning of each year,
and hours are actually earned throughout the year. Unused, earned vacation hours
are paid upon termination or retirement at the employee's normal hourly rate;
accumulated, unused sick time is only payable upon retirement, death of the
employee, or other circumstances when authorized by the Town Manager.
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
41
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Assets, Liabilities, and Net Position or Equity – Continued
Long-term Obligations
In the government-wide financial statements and proprietary fund types in the 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 type statement of net position. Bond premiums and discounts are
deferred and amortized over the life of the bonds using the straight-line method,
which approximates the effective interest method. Bonds payable are reported net of
the applicable bond premium or discount. In the fund financial statements,
governmental fund types recognize bond premiums and discounts, as well as
issuance costs during the current period. The face amount of the debt issued is
reported as other financing sources. Premiums received on debt issuances are
reported as other financing sources while discounts are reported as other financing
uses. Issuance costs, even if withheld from the actual proceeds, are reported as
expenditures.
Fund Equity and Net Position
The governmental fund financial statements present fund balances based on
classifications that comprise a hierarchy that is based primarily on the extent to
which the Town is bound to honor constraints on the specific purposes for which
amounts in the respective governmental funds can be spent.
The classifications used in the governmental fund financial statements are as
follows:
• Nonspendable: This classification includes amounts that cannot be spent
because they are either (a) not in spendable form or (b) are legally or
contractually required to be maintained intact. Nonspendable items are not
expected to be converted to cash or are not expected to be converted to cash
within the next year.
• Restricted: This classification includes amounts for which constraints have been
placed on the use of the resources either (a) externally imposed by creditors,
grantors, contributors, or laws or regulations of other governments, or (b)
imposed by law through constitutional provisions or enabling legislation.
• Committed: This classification includes amounts that can be used only for
specific purposes pursuant to constraints imposed by board resolution of the
Town council, the Town's highest level of decision making authority. These
amounts cannot be used for any other purpose unless the Town council removes
or changes the specified use by taking the same type of action that was
employed when the funds were initially committed. This classification also
includes contractual obligations to the extent that existing resources have been
specifically committed for use in satisfying those contractual requirements.
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
42
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Assets, Liabilities, and Net Position or Equity – Continued
Fund Equity and Net Position – Continued
• Assigned: This classification includes amounts that are constrained by the
Town's intent to be used for a specific purpose but are neither restricted nor
committed. In the General Fund, assigned amounts represent intended uses
established by the Town Council or the Town Finance Director who has been
delegated that authority.
• Unassigned: This classification includes the residual fund balance for the
General Fund. The unassigned classification also includes negative residual fund
balance of any other governmental fund that cannot be eliminated by offsetting of
assigned fund balance amounts.
In the government-wide financial statements, net position represents the difference
between assets and liabilities. Net investment in capital assets 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 position is reported as restricted when there
are limitations imposed on its use either though the enabling legislations adopted by
the Town or through external restrictions imposed by creditors, grantors or laws or
regulations of other governments.
The government-wide and fund level financial statements report restricted fund
balances for amounts not available for appropriation or legally restricted for specific
uses. When an expenditure is incurred for purposes for which both restricted and
unrestricted fund balance is available, it is the Town's policy to use restricted
resources first, then unrestricted resources as needed. When an expenditure is
incurred for which committed, assigned, or unassigned fund balances are available,
the Town considers amounts to have been spent first out of committed funds, then
assigned funds, and finally unassigned funds.
Summary of Significant Accounting Policies
Pensions - For purposes of measuring the net pension liability, deferred outflows of
resources and deferred inflows of resources related to pensions, and pension expense,
information about the Fiduciary Net Position of the Texas Municipal Retirement System
(TMRS) and additions to/deductions from TMRS’s Fiduciary Net Position have been
determined on the same basis as they are reported by TMRS. For this purpose, plan
contributions are recognized in the period that compensation is reported for the
employee, which is when contributions are legally due. Benefit payments and refunds
are recognized when due and payable in accordance with the benefit terms. Investments
are reported at fair value.
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
43
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Estimates
The preparation of financial statements, in conformity with U.S. generally accepted
accounting principles, requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures of contingent assets
and liabilities at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual amounts could differ from
those estimates.
Subsequent Events
The Town has evaluated all events or transactions that occurred after September 30,
2016 up through February 23, 2017, the date the financial statements were issued.
NOTE 2. CASH AND INVESTMENTS
Legal provisions generally permit the Town to invest in certificates of deposit, repurchase
agreements, public funds investment pools, direct obligations of the United States of
America or its subdivisions and state and local government securities.
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 Town to adopt, implement, and
publicize its 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, and (9) bid solicitation preferences for
certificates of deposit.
Statutes and the Town's investment policy authorized the Town to invest in the following
investments as summarized in the table below:
Maximum Maximum
Maximum Percentage Investment
Maturity of Portfolio In One Issuer
Obligations of the U.S. Government,
its agencies and instrumentalities 2 years None None
Certificates of deposit 1 year None None
Mutual funds 2 years 80%None
Investment pools -None None
Authorized
Investment Type
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
44
NOTE 2. CASH AND INVESTMENTS – CONTINUED
The Town did not engage in repurchase or reverse repurchase agreement transactions
during the current year.
At year end, the carrying amount of the Town’s deposits was $16,646,614 and the bank
balance was $16,919,579. The bank balance was completely covered by federal deposit
insurance and collateral held by the pledging financial institution in the Town’s name.
At year end, the carrying amount of the component units’ deposits was $9,400,061 and the
bank balance was $9,499,026. The bank balance was completely covered by federal
deposit insurance and collateral held by the pledging financial institution in the component
units’ names. The carrying amount consists of $5,087,498 in cash and cash equivalents and
$4,312,563 in restricted cash and cash equivalents.
At September 30, 2016, the Town's cash and cash equivalents consist of and are classified
in the accompanying financial statements are follows:
Primary government:
Cash and cash equivalents 16,209,630$
Restricted cash and investments 8,264,829
Total primary government 24,474,459
Fiduciary funds:
Restricted cash and cash equivalents 2,769,575
Total cash and investments 27,244,034$
Deposits with financial institutions 16,646,614$
Investments 10,597,420
Total cash and investments 27,244,034$
Disclosures Relating to Interest Rate Risk
This 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. In order to limit interest
and market rate risk from changes in interest rates, the Town's investment policy sets a
maximum stated maturity limit of two years for obligations of the United States
Government, its agencies and instrumentalities (excluding mortgage backed securities)
and one year for fully insured or collateralized certificates of deposit. No more than 80%
of the Town's monthly average balance may be invested in money market funds.
Additionally, the Town invests in an investment pool that purchases a combination of
shorter term investments with an average maturity of 48 days thus reducing the interest
rate risk. Information about the sensitivity of the fair values of the Town's investments to
market interest rate fluctuations is provided by the following table that shows the
distribution of the Town's Investments.
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
45
NOTE 2. DEPOSITS AND INVESTMENTS – CONTINUED
Disclosures Relating to Interest Rate Risk – Continued
As of September 30, 2016, the Town's investments were as follows:
Weighted
Carrying Average
Amount Fair Value Maturity (days)
TexPool 200$ 200$ 48 days
Mutual funds 10,597,220 10,597,220 1 day
Total 10,597,420$ 10,597,420$
Investment Type
Disclosures Relating to Credit Risk
This 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 Town's investment
policy, or debt agreements, and the actual rating as of year-end for each investment
type.
Minimum Rating
Carrying Fair Legal as of
Amount Value Rating Year-end
Investments:
TexPool 200$ 200$ N/A AAA-m
Mutual funds 10,597,220 10,597,220 N/A A-1
Total 10,597,420$ 10,597,420$
Primary government
Disclosures Relating to Concentration of Credit Risk
The Town’s investment policy is to avoid a concentration of assets in a specific maturity,
a specific issue, or a specific class of investments.
Disclosures Relating to 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 does 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.
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
46
NOTE 2. DEPOSITS AND INVESTMENTS – CONTINUED
Disclosures Relating to Custodial Credit Risk – Continued
The Town requires all deposits to be covered by Federal Depository Insurance
Corporation (FDIC) insurance and/or collateralized by qualified securities pledged by the
Town’s depository in the Town’s name and held by the depository’s agent.
As of September 30, 2016, the Town's entire cash deposits with financial institutions in
excess of federal depository insurance were fully collateralized.
The Town categorizes its fair value measurements within the fair value hierarchy
established by generally accepted accounting principles. GASB Statement No. 72, Fair
Value Measurement and Application, provides a framework for measuring fair value
which establishes a three-level fair value hierarchy that describes the inputs that are
used to measure assets and liabilities.
• Level 1 inputs are quoted prices (unadjusted) for identical assets or liabilities in
active markets that a government can access at the measurement date.
• Level 2 inputs are inputs – other than quoted prices included within Level 1 – that
are observable for an asset or liability, either directly or indirectly.
• Level 3 inputs are unobservable inputs for an asset or liability.
The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority
to Level 3 inputs. If a price for an identical asset or liability is not observable, a
government should measure fair value using another valuation technique that maximizes
the use of relevant observable inputs and minimizes the use of unobservable inputs. If
the fair value of an asset or a liability is measured using inputs from more than one level
of the fair value hierarchy, the measurement is considered to be based on the lowest
priority level input that is significant to the entire measurement.
The Town has recurring fair value measurements as presented in the table below. The
Town’s investment balances and weighted average maturity of such investments are as
follows:
Quoted
Prices in
Active Significant
Markets for Other Significant Weighted
Identical Observable Unobservable Percent of Average
Value at Assets Inputs Inputs Total Maturity
August 31, 2016 (Level 1)(Level 2)(Level 3)Investments (Days)
Investments not Subject to Fair Value:
Investment Pools:
TexPool 200$ -$ -$ -$ 0.00%48
Investments by Fair Value Level:
Mutual Funds 10,597,220 10,597,220 - - 100.00%NA
Total Value 10,597,420$ 10,597,220$ -$ -$
Fair Value Measurements Using
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
47
NOTE 2. DEPOSITS AND INVESTMENTS – CONTINUED
Disclosures Relating to Custodial Credit Risk – Continued
Mutual funds reported as Level 1 consist of shares of a money market funds government
portfolio and are valued at net asset value (NAV) of the assets held by the Town. The
NAV is a quoted price in an active market.
Investment in State Investment Pools
On September 1, 1989, local government investment pools became authorized
investments for the majority of public entities in Texas. The Interlocal Cooperation Act
was amended by the 71st Texas Legislature to facilitate the creation of local government
investment pools in Texas. This act permits the creation of investment pools to which a
majority of political subdivisions (local governments) may delegate, by contract, the
authority to make investments purchased with local investment funds and to hold legal
title as custodian of the investments. TexPool was organized to conform with the
Interlocal Cooperation Act, Chapter 791 of the Texas Government Code, and the Public
Funds Investment Act, Chapter 2256 of the Texas Government Code.
During the year ended September 30, 2016, the Town had investments with TexPool.
TexPool, a public funds investment pool created by the Treasurer of the State of Texas
acting by and through the Texas Treasury Safekeeping Trust Company, which is
empowered to invest funds and acts as custodian of investments purchased with local
investment funds. These investments are not required to be categorized because the
investor is not issued securities, but rather it owns an undivided beneficial interest in the
assets of the respective funds. The fair value of the position in TexPool is the same as
the value of the pool shares.
Restricted Cash
Proprietary Fund
Within the proprietary funds, the $237,185 of restricted cash represents customer
deposits received for water and sewer usage that are refundable upon termination of
service.
Discretely Presented Component Units
Within the discretely presented component units, the $4,312,563 in restricted cash
and cash equivalents represents funds held for debt service.
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
48
NOTE 3. RECEIVABLES
Governmental activities receivable balance consists of the following as of September 30,
2016:
Debt Total
Westlake Service Capital Nonmajor Governmental
General Academy Fund Projects Fund Funds
Receivables:
Sales tax 570,473$ -$ -$ -$ 226,476$ 796,949$
Property tax 3,566 - 375 - - 3,941
Other taxes 15,198 - - - 69,382 84,580
Franchise tax 214,347 - - - - 214,347
Accounts 42,817 - - - - 42,817
Other 161,227 448,254 - - - 609,481
Gross receivables 1,007,628 448,254 375 - 295,858 1,752,115
Less: allowance
for uncollectibles (13,123) - (93) - - (13,216)
Net total receivables 994,505$ 448,254$ 282$ -$ 295,858$ 1,738,899$
Governmental Funds
Business-type receivables balance consists of the following as of September 30, 2016:
Receivables:
Sales tax
Property tax
Other taxes
Franchise tax
Accounts
Other
Gross receivables
Less: allowance
for uncollectibles
Net total receivables
Utility Cemetery
Fund Fund Total
-$ -$ -$
- - -
- - -
- - -
1,048,008 - 1,048,008
- - -
1,048,008 - 1,048,008
- - -
1,048,008$ -$ 1,048,008$
Business-Type Activities
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
49
NOTE 4. CAPITAL ASSETS
Capital asset activity for the year ended September 30, 2016, was as follows:
Primary Government
Beginning Ending
Balance Increases Decreases Transfers Balance
Governmental activities:
Capital assets, not being depreciated:
Land 11,896,664$ -$ -$ -$ 11,896,664$
Construction in progress 3,107,524 9,445,564 (2,400) (333,827) 12,216,861
Total assets not being depreciated 15,004,188 9,445,564 (2,400) (333,827) 24,113,525
Capital assets, being depreciated:
Capital improvements 14,517,441 56,268 - 333,827 14,907,536
Buildings 32,262,586 - - - 32,262,586
Machinery and equipment 4,318,814 57,675 (11,105) (15,704) 4,349,680
Information systems and software 197,488 26,100 (18,425) - 205,163
Total capital assets being depreciated 51,296,329 140,043 (29,530) 318,123 51,724,965
Less accumulated depreciation:
Capital improvements (3,977,533) (594,184) - - (4,571,717)
Buildings (5,250,960) (660,475) - - (5,911,435)
Machinery and equipments (2,524,594) (330,586) 11,105 15,704 (2,828,371)
Information systems and software (76,981) (47,523) 12,300 - (112,204)
Total accumulated depreciation (11,830,068) (1,632,768) 23,405 15,704 (13,423,727)
Total capital assets being depreciated 39,466,261 (1,492,725) (6,125) 333,827 38,301,238
Governmental activities
capital assets, net 54,470,449$ 7,952,839$ (8,525)$ -$ 62,414,763$
Beginning Ending
Balance Increases Decreases Transfers Balance
Business-type activities:
Capital assets, not being depreciated:
Construction in progress 246,121$ 39,271$ -$ -$ 285,392$
Total assets not being depreciated 246,121 39,271 - - 285,392
Capital assets, being depreciated:
Capital improvements 14,899,416 - - - 14,899,416
Wastewater treatment rights 635,199 - - - 635,199
Machinery and equipment 3,566,595 - (21,519) 15,704 3,560,780
Total capital assets being depreciated 19,101,210 - (21,519) 15,704 19,095,395
Less accumulated depreciation:
Capital improvements (4,438,127) (363,669) - - (4,801,796)
Wastewater treatment rights (481,707) (31,847) - - (513,554)
Machinery and equipment (1,764,509) (133,069) 21,519 (15,704) (1,891,763)
Total accumulated depreciation (6,684,343) (528,585) 21,519 (15,704) (7,207,113)
Total capital assets being depreciated 12,416,867 (528,585) - - 11,888,282
Business-type activities
capital assets, net 12,662,988$ (489,314)$ -$ -$ 12,173,674$
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
50
NOTE 4. CAPITAL ASSETS – CONTINUED
Depreciation was charged to departments of the primary government as follows:
Governmental activities:
General government 837,155$
Public safety 244,041
Public works 551,572
Total depreciation expense - governmental activities 1,632,768$
Business-type activities:
Water and sewer 528,585$
A summary of discretely presented component units' capital assets at September 30, 2016
follows:
Texas Student Housing Corporation – Denton Project
Beginning Ending
Balance Increases Decreases Balance
Capital assets, not being depreciated:
Land 2,200,000$ -$ -$ 2,200,000$
Total assets not being depreciated 2,200,000 - - 2,200,000
Capital assets, being depreciated:
Buildings 25,705,000 - - 25,705,000
Furniture and fixtures 1,253,841 - - 1,253,841
Total capital assets being depreciated 26,958,841 - - 26,958,841
Less accumulated depreciation:
Buildings (12,352,680) (856,833) - (13,209,513)
Furniture and fixtures (1,189,760) (8,450) - (1,198,210)
Total accumulated depreciation (13,542,440) (865,283) - (14,407,723)
Total capital assets being depreciated 13,416,401 (865,283) - 12,551,118
Capital assets, net 15,616,401$ (865,283)$ -$ 14,751,118$
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
51
NOTE 4. CAPITAL ASSETS – CONTINUED
Texas Student Housing Authority – Jefferson Commons at Town Lake Project
Beginning Ending
Balance Increases Decreases Balance
Capital assets, not being depreciated:
Land 2,182,816$ -$ -$ 2,182,816$
Total assets not being depreciated 2,182,816 - - 2,182,816
Capital assets, being depreciated:
Building and improvements 13,270,150 - - 13,270,150
Capitalized purchase price 887,095 - - 887,095
Land improvements 2,806,596 - - 2,806,596
Unit appliances 295,134 - - 295,134
Furniture and fixtures 915,951 - - 915,951
Total capital assets being depreciated 18,174,926 - - 18,174,926
Less accumulated depreciation:
Building and improvements (5,418,645) (442,338) - (5,860,983)
Capitalized purchase price (341,810) (28,484) - (370,294)
Land improvements (976,461) (93,554) - (1,070,015)
Unit appliances (295,134) - - (295,134)
Furniture and fixtures (915,951) - - (915,951)
Total accumulated depreciation (7,948,001) (564,376) - (8,512,377)
Total capital assets being depreciated 10,226,925 (564,376) - 9,662,549
Capital assets, net 12,409,741$ (564,376)$ -$ 11,845,365$
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
52
NOTE 4. CAPITAL ASSETS – CONTINUED
Texas Student Housing Corporation –College Station Project
Beginning Ending
Balance Increases Decreases Balance
Capital assets, not being depreciated:
Land 2,899,597$ -$ -$ 2,899,597$
Total assets not being depreciated 2,899,597 - - 2,899,597
Capital assets, being depreciated:
Buildings 26,885,312 - - 26,885,312
Furniture and fixtures 3,437,138 - - 3,437,138
Total capital assets being depreciated 30,322,450 - - 30,322,450
Less accumulated depreciation:
Buildings (9,749,351) (896,177) - (10,645,528)
Furniture and fixtures (2,944,875) (84,771) - (3,029,646)
Total accumulated depreciation (12,694,226) (980,948) - (13,675,174)
Total capital assets being depreciated 17,628,224 (980,948) - 16,647,276
Capital assets, net 20,527,821$ (980,948)$ -$ 19,546,873$
NOTE 5. LONG-TERM DEBT
A summary of long-term debt transactions for the year ended September 30, 2016, was as
follows:
Amount
Beginning Ending Due within
Balance Additions Reductions Balance One year
Governmental activities:
General obligation bonds and
certificates of obligation 27,239,250$ -$ (1,068,550)$ 26,170,700$ 1,088,000$
Unamortized bond premium 701,120 - (43,208) 657,912 -
Notes payable 323,227 - (48,126) 275,101 36,677
Capital leases 174,373 474,300 (85,628) 563,045 242,844
Fidelity tax reimbursement 33,814 - (33,814) - -
Compensated absences 172,704 179,763 (78,251) 274,216 27,422
Net pension liability- TMRS 629,761 452,878 - 1,082,639 -
Net pension liability - TRS 192,056 901,809 - 1,093,865 -
Total governmental activities 29,466,305$ 2,008,750$ (1,357,577)$ 30,117,478$ 1,394,943$
Amount
Beginning Ending Due within
Balance Additions Reductions Balance One year
Business-type activities:
Certificates of obligation 992,750$ -$ (21,450)$ 971,300$ 22,000$
Contractual obligations 5,226,294 - (99,336) 5,126,958 104,142
Unamortized bond premium 33,397 - (2,344) 31,053 -
Compensated absences 27,072 27,832 (8,890) 46,014 4,602
Net pension liability - TMRS 77,836 55,143 - 132,979 -
Total business-type activities 6,357,349$ 82,975$ (132,020)$ 6,308,304$ 130,744$
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
53
NOTE 5. LONG-TERM DEBT – CONTINUED
General Obligation Bonds and Certificates of Obligation
General obligation bonds and certificates of obligation are as follows as of
September 30, 2016:
General Obligations Bonds and Final Business-
Certificates of Obligation Maturity Interest Rates Governmental Type
$7,465,000 General Obligation Refunding Bonds,
Series 2007 2032 3.75-4.20%6,755,000$ -$
$2,095,000 Combination Tax and Revenue
Certificates of Obligation, Series 2011 2031 3.25%1,627,000 -
$7,375,000 General Obligation Refunding Bonds,
Series 2011 2028 2.0-4.0%6,635,000 -
$9,320,000 Certificates of Obligation, Series 2013 2043 2.0-4.0%7,858,700 971,300
$2,200,000 General Obligation Refunding Bonds,
Series 2013 2028 2.0-2.5%1,755,000 -
$1,910,000 General Obligation Refunding Bonds,
Series 2014 2032 2.0-5.0%1,540,000 -
26,170,700$ 971,300$
Debt service requirements of certificates of obligation and general obligations to be
retired from governmental funds are as follows:
Total
Principal Interest Requirements
1,088,000$ 897,933$ 1,985,933$
1,127,000 858,170 1,985,170
1,160,450 826,679 1,987,129
1,198,350 794,008 1,992,358
1,232,350 759,825 1,992,175
6,770,100 3,233,156 10,003,256
8,014,600 1,985,487 10,000,087
2,981,050 703,711 3,684,761
1,780,000 341,218 2,121,218
818,800 33,108 851,908
26,170,700$ 10,433,295$ 36,603,995$
2021
2032-2036
2037-2041
2042-2043
2020
2022-2026
2027-2031
Year Ending
September 30,
2017
2018
2019
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
54
NOTE 5. LONG-TERM DEBT – CONTINUED
General Obligation Bonds and Certificates of Obligation – Continued
Debt service requirements of certificates of obligation to be retired from proprietary funds
are as follows:
Total
Principal Interest Requirements
22,000$ 33,461$ 55,461$
22,000 33,021 55,021
22,550 32,576 55,126
23,650 32,114 55,764
23,650 31,582 55,232
130,900 147,401 278,301
191,400 122,961 314,361
213,950 81,317 295,267
220,000 42,173 262,173
101,200 4,092 105,292
971,300$ 560,698$ 1,531,998$
2022-2026
2027-2031
2018
2021
2020
Total
2032-2036
2037-2041
2042-2043
2019
September 30,
2017
Year Ending
Notes Payable
In March 2014, the Town received a $366,774 loan from Bennett Benner Pettit, the
proceeds of which were used to fund a portion of the Westlake Academy expansion
project. The terms of the note call for ten annual payments at 0% interest.
In August 2014, the Town entered into a purchase agreement to acquire technology
equipment secured by a 3-year interest-free note in the amount of $34,710. As of
September 30, 2016, the note has been paid in full.
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
55
NOTE 5. LONG-TERM DEBT – CONTINUED
Notes Payable – Continued
Debt service requirements for the notes payable to be retired from governmental funds
are as follows:
36,677$
36,677
36,677
36,677
36,677
91,716
275,101$
2017
2020
2021
Year Ending
September 30,
2022-2024
Total
2018
2019
Capital Leases
The Westlake Academy has entered into lease agreements as lessee for financing the
acquisition of computer equipment and software. The lease agreements qualify as
capital leases for accounting purposes, and therefore, have been recorded at the
present value of its future minimum lease payments as of the inception date.
Equipment and software with a historical cost of $730,049 was under capital lease at
September 30, 2016. Because the cost of the individual items was below the Town’s
capitalization threshold, the entire cost was recorded as expense during the year ended
September 30, 2016.
The following schedule shows the future minimum lease payments under the capitalized
lease together with the present value of the net minimum lease payments as of
September 30, 2016:
Annual
Lease Payments
256,585$
166,168
166,038
Total minimum lease payments 588,791
Less: Amounts representing interest (25,746)
Present value of net minimum lease payments 563,045$
Year Ending
August 31,
2017
2019
2018
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
56
NOTE 5. LONG-TERM DEBT – CONTINUED
Fidelity Tax Reimbursement
On August 10, 1998, the Town entered into an economic development agreement with
Fidelity Texas Limited Partnership (Fidelity) which provided that Fidelity will receive a
rebate of one percent of local sales taxes collected by the Town and paid by Fidelity.
The agreement provided that the rebate will be paid to Fidelity within 30 days of each
calendar quarter from the sales taxes received by the Town. On November 13, 2000, the
agreement was amended to allow for a payment schedule of fifteen annual equal
installments for sales tax rebate due and payable to Fidelity. The amount due will not
bear interest. The loan is discounted to present value and amortized over the life of the
loan using the effective interest method. As of September 30, 2016, the rebate was paid
in full.
Contractual Obligations
Proprietary funds contractual obligations as of September 30, 2016 are as follows:
Business-
Maturity Interest Rate Type
Elevated Water Storage Facility 2020 5.0-5.65%447,014$
Limited pledge contractual obligation:
Dove Road Water Line and
West Pump Station 2028 6.75%4,679,944
5,126,958$
Contractual Obligations
Elevated Water Storage Facility - On October 9, 2000, the Town approved an interlocal
agreement with the City of Keller, which provided for the joint construction, operation,
maintenance and use of an elevated water storage facility and appurtenances. The
Town recorded a contractual obligation of $1,466,000 based on the terms of the
interlocal agreement, which requires 20 annual principal and interest payments to the
City of Keller, with payments due each September 30 at interest rates ranging from 5.0%
to 5.65%.
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
57
NOTE 5. LONG-TERM DEBT – CONTINUED
Contractual Obligations – Continued
Dove Road Water Line and West Pump Station - In April 2000, the Town approved an
agreement with the Hillwood Development Corporation (Hillwood). In the agreement,
Hillwood agreed to bear all initial costs for the design, engineering and constructions of
the Dove Road Water Line and the West Pump Station that will service the residents of
the Town. The Town agreed to reimburse Hillwood for the cost of the project upon
completion and the Town's acceptance of the project, which occurred in June 2001,
solely from a $.25 charge per 1,000 gallons of usage. The Town further agreed to
deposit debt service revenue of $.25 per 1,000 gallons of usage collected from Town
residents to fund its repayment to Hillwood. Debt service revenue will be allocated
between Hillwood service area and Town service area by 52% and 48%, respectively
and deposited into two separate debt service funds that will result in debt service
revenue to pay the respective share of the construction cost. The Town recorded a
limited pledge contractual obligation of $4,679,944 for the project cost based upon the
terms of the agreement, which requires 239 monthly principal and interest payments to
Hillwood, at an interest rate of 6.75%. If the Town collects insufficient funds to pay
current interest on the debt, the interest payment may be deferred. No portion of debt
payments will be applied to the principal component, until all current and deferred
interest is fully paid. The obligation of the Town to pay the purchase price and interest
thereon is not a general obligation of the Town but is a limited recourse obligation
payable solely from debt service revenue.
The schedule of future payments by the Town under these agreements is as follows:
Total
Principal Interest Requirements
-$ 7,051,241$ 7,051,241$
104,143 842,697 946,840
108,950 896,233 1,005,183
113,756 956,584 1,070,340
120,165 1,016,363 1,136,528
4,679,944 717,581 5,397,525
5,126,958$ 11,480,699$ 16,607,657$
Year Ending
Past Due
2019
2020
2021
September 30,
2017
2018
Total
Prior Year Defeasance of Debt
In prior years, the government defeased general obligations bonds by placing proceeds
of the new bonds in an irrevocable trust account to provide for all future debt service
payments on the old bonds. Accordingly, the trust account assets and the liability for the
defeased bonds are not included in the government's financial statements. At
September 30, 2016, there were no prior year defeased bonds outstanding.
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
58
NOTE 5. LONG-TERM DEBT – CONTINUED
Compensated Absences
Although compensated absences are liquidated by the fund to which they relate, the
significant portion of the governmental activities compensated absences has typically
been liquidated by the general fund.
Discretely Presented Component Units – Long-term Debt
Texas Student Housing Corporation –Denton Project
The long-term debt activity of the Denton Project is as follows:
Amounts
Beginning Ending Due Within
Balance Increases Decreases Balance One Year
Revenue Bonds:
2001 A Bonds 22,925,000$ -$ (835,000)$ 22,090,000$ 895,000$
2001 B Bonds 3,240,000 - - 3,240,000 1,295,000
Less discount on bonds (559,869) - 37,485 (522,384) -
Total 25,605,131$ -$ (797,515)$ 24,807,616$ 2,190,000$
The Bonds are payable solely from the revenues generated by the Denton Property and
are secured by the revenues pledged and assigned under the terms of the Trust
Indenture. The Town of Westlake does not have any liability for the payment of the
bonds as the bonds are non-recourse to both the Town of Westlake and Texas Student
Housing Authority. Interest rates on the bonds range from 5.00% to 11.00% and are
payable semi-annually on July 1 and January 1 of each year thereafter.
At September 30, 2016, the Project was not in compliance with certain covenants of the
Indenture including insufficient funds in some of the required funds discussed in Note 2
and a fixed charges ratio less than 1.0. In addition, all required principal payments on
the Series B bonds had not been made as of September 30, 2016. Upon certain events
of default either the trustee, or owners of not less than 25% in aggregate principal of the
bonds then outstanding, may declare the principal and all interest then due to be
immediately due and payable.
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
59
NOTE 5. LONG-TERM DEBT – CONTINUED
Discretely Presented Component Units – Long-term Debt – Continued
Texas Student Housing Corporation – Denton Project – Continued
The debt service requirements of the bonds are as follows:
Total
Principal Interest Requirements
1,240,000$ 7,515,007$ 8,755,007$
950,000 1,728,055 2,678,055
1,020,000 1,661,593 2,681,593
1,085,000 1,589,980 2,674,980
1,165,000 1,513,768 2,678,768
1,250,000 1,431,730 2,681,730
7,705,000 5,691,360 13,396,360
10,915,000 2,483,760 13,398,760
25,330,000$ 23,615,253$ 48,945,253$
2022-2026
2027-2031
2018
2020
2019
2017
Year Ending
2021
September 30,
Past Due
Texas Student Housing Authority – Jefferson Commons at Town Lake Project
Amounts
Beginning Ending Due Within
Balance Increases Decreases Balance One Year
Revenue Bonds:
2002 A-1 Bonds 14,538,279$ -$ (380,537)$ 14,157,742$ 416,258$
2002 A-2 Bonds 5,089,241 - - 5,089,241 -
Total 19,627,520$ -$ (380,537)$ 19,246,983$ 416,258$
The bonds are payable solely from the revenues generated by the Project and are
secured by the revenues pledged and assigned under the terms of the Trust Indenture.
Interest rates on the bonds range from 7.76% to 8.69% at present and principal and
interest payments are made monthly.
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
60
NOTE 5. LONG-TERM DEBT – CONTINUED
Discretely Presented Component Units – Long-term Debt – Continued
Texas Student Housing Authority – Jefferson Commons at Town Lake Project –
Continued
The future debt service requirements of the bonds are as follows:
Total
Principal Interest Requirements
2,461$ 4,641,441$ 4,643,902$
413,797 1,477,840 1,891,637
447,074 1,444,563 1,891,637
483,026 1,408,611 1,891,637
521,870 1,369,767 1,891,637
563,837 1,327,800 1,891,637
3,576,784 5,881,401 9,458,185
5,265,627 4,192,558 9,458,185
6,649,507 1,037,383 7,686,890
1,323,000 - 1,323,000
19,246,983$ 22,781,364$ 42,028,347$
2021
2037-2038
2017
2027-2031
Total
2022-2026
2032-2036
2020
September 30,
Past Due
2018
2019
Year Ending
Texas Student Housing Corporation – College Station Project
The Project's installment note payable is summarized as follows:
Rate Balance
Cambridge Student Housing Financing
Company, L.P.; substantially all
assets and assignment of rents:
due November 1, 2039 8.00%28,944,200$
Lender/Security/Due/Date
The following is a summary of long-term debt transactions of the Project for the year
ended August 31, 2016:
Amounts
Beginning Ending Due Within
Balance Increases Decreases Balance One Year
Revenue
Certificates 29,429,200$ -$ (485,000)$ 28,944,200$ 985,000$
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
61
NOTE 5. LONG-TERM DEBT – CONTINUED
Discretely Presented Component Units – Long-term Debt – Continued
Texas Student Housing Corporation – College Station Project – Continued
The debt is to be amortized through 2040 with varying payments. The annual
requirements to amortize the Project’s outstanding installment notes payable as of
September 30, 2016 are as follows:
Principal Interest Total
Past Due 385,000$ 15,661,202$ 16,046,202$
600,000 1,751,328 2,351,328
645,000 1,703,325 2,348,325
720,000 1,650,637 2,370,637
775,000 1,592,890 2,367,890
830,000 1,530,858 2,360,858
3,105,000 6,865,292 9,970,292
3,845,000 5,632,175 9,477,175
5,550,000 3,867,415 9,417,415
12,489,200 1,256,148 13,745,348
28,944,200$ 41,511,270$ 70,455,470$
2021
2022-2026
2027-2031
Year Ending
2019
2020
Governmental Activities
2032-2036
2017
2018
September 30,
2037-2040
Total
Class C and D bonds are in default and the property does not generate enough revenue
to pay the debt obligations. All of the Class C and D bonds issued remain outstanding as
of September 30, 2016.
Each class has certain rights and privileges, as contained in the private placement
memorandum. As a part of the offering, the Project entered into a trust agreement with
J. P. Morgan Trust Company, N.A. (the Trustee) for the purpose of determining that
each class is paid in accordance with the private placement memorandum.
At September 30, 2016, the Project was not in compliance with the fixed charge
coverage ratio. As a result, the lender may accelerate the maturity of the unpaid portion
of the principal payable under the installment sale agreement. However, the Authority
does not anticipate this event will occur, since foreclosure by private interests would
result in the loss of tax-exempt status for the Project.
The Town of Westlake does not have any liability for the payment of debt of the
discretely presented component units as the bonds are non-recourse to both the Town
and Texas Student Housing Authority.
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
62
NOTE 6. UNEARNED REVENUE / DEFERRED INFLOWS OF RESOURCES
Unearned revenue in the proprietary fund of $254,719 relates to the collection of the entire
amount due on eight Ductbank leases as follows: one 25-year lease with AT&T local
network services; five leases with Verizon Southwest ranging from 20 to 30 years; one 5-
year lease with MCI Metro; and one 5-year lease with L3 Communications for use of the
Town's Ductbank. Unearned revenue of $2,520 in the non-major governmental funds
represents sponsorship and registration fees received in advance of an event held in
October 2016.
Governmental funds report deferred inflows of resources in connection with receivables for
revenue that is not considered to be available to liquidate liabilities of the current period. At
the end of the current fiscal year, deferred inflows of resources reported in the governmental
funds consist of $2,675 and $281 of unavailable property taxes in the general fund and debt
service fund, respectively.
NOTE 7. INTERLOCAL AGREEMENT WITH THE CITY OF SOUTHLAKE
In August 1995, the Town entered into an agreement with the City of Southlake to allow the
Town to utilize capacity in a sewer line and to set forth their respective rights and obligations
with respect to the sewer line owned by the City of Southlake. The Town is obligated to
share in the cost of construction, operation and maintenance of the water sewer line. The
sewer line was constructed in 2000. Additionally, the Town must pay the City of Southlake
all transportation, treatment and related costs allocable to the metered flow of sewage from
the Town into the sewer line.
NOTE 8. FEDERAL AND STATE PROGRAM REVENUES
The Town received financial assistance from various federal and state governmental
agencies in the form of grants for Westlake Academy. The disbursement of funds received
under these programs generally requires compliance with terms and conditions specified in
the grant agreements and are subject to audit by the grantor agencies. Any unallowed
disbursement resulting from such audits becomes a liability of the Town. In the opinion of
the Town management, no material refunds will be required as a result of unallowed
disbursements (if any) by the grantor agencies. Sources of federal and state program
revenues for the year ended September 30, 2016, were as follows:
Westlake
Academy
Federal program revenues:
U.S. Department of Eduation - Passed
through State Department of Education
Total federal program revenues:98,564$
State program revenues:
State Department of Education 6,543,782$
Source
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
63
NOTE 9. INTERFUND BALANCES AND TRANSACTIONS
Interfund receivables and payables at September 30, 2016, were as follows:
Due from Due to
Other Funds Other Funds
General fund 199,237$ -$
Nonmajor governmental funds:
4B Economic Development Fund - 199,237
199,237$ 199,237$
The 4B Economic Development Corporation Fund amount of $199,237 payable to the
General Fund is related to debt service payment reimbursement.
Inter-fund transfers are reported in the governmental funds and proprietary fund financial
statements. In the government-wide statements, inter-fund transfers are eliminated
within the governmental activities column and business-type column, as appropriate.
Individual fund transfers for fiscal year 2016 were as follows:
Transfer out Transfer in Amount Purpose
General Fund Debt Service Fund 561,960$ Debt service payments
General Fund Nonmajor Governmental 35,758 Payment to Fidelity (Phase I)
Utility Fund General Fund 256,245 Loan payment for Ground Storage Tank project
Utility Fund General Fund 8,333 Annual transfer to the build fund
Nonmajor Governmental General Fund 13,300 Operating expenditures for Communications Department.
Nonmajor Governmental Debt Service 142,250 Debt service payments
Nonmajor Governmental Debt Service 1,152,381 Debt service payments
General Fund Westlake Academy 315,000 Student reserve funds
2,485,227$
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
64
NOTE 10. WATER PURCHASE AND WASTEWATER TREATMENT CONTRACTS
The Town has a contract with the City of Fort Worth, Texas, to purchase water. Under the
contract, the Town may obtain from the City of Fort Worth, a supply of potable water at a
reasonable rate based on water usage. The rate charges are subject to minimum annual
contract payments. Water expense for the year ended September 30, 2016 was $1,358,068.
NOTE 11. DEFINED BENEFIT PENSION PLAN - TMRS
Plan Description
The Town participates as one of 860 plans in the nontraditional, joint contributory, hybrid
defined benefit pension plan administered by the Texas Municipal Retirement System
(TMRS). TMRS is an agency created by the State of Texas and administered in
accordance with the TMRS Act, Subtitle G, Title 8, Texas Government Code (the TMRS
Act) as an agent multiple-employer retirement system for municipal employees in the
State of Texas. The TMRS Act places the general administration and management of
the System with a six-member Board of Trustees. Although the Governor, with the
advice and consent of the Senate, appoints the Board, TMRS is not fiscally dependent
on the State of Texas. TMRS’s defined benefit pension plan is a tax-qualified plan under
Section 401 (a) of the Internal Revenue Code. TMRS issues a publicly available
comprehensive annual financial report (CAFR) that can be obtained at www.tmrs.com.
All eligible employees of the city are required to participate in TMRS.
Benefits Provided
TMRS provides retirement, disability, and death benefits. Benefit provisions are adopted
by the governing body of the city, within the options available in the state statutes
governing TMRS.
At retirement, the benefit is calculated as if the sum of the employee’s contributions, with
interest, and the city-financed monetary credits with interest were used to purchase an
annuity. Members may choose to receive their retirement benefit in one of seven
payments options. Members may also choose to receive a portion of their benefit as a
Partial Lump Sum Distribution in an amount equal to 12, 24, or 36 monthly payments,
which cannot exceed 75% of the member’s deposits and interest.
Employees Covered By Benefit Terms
At the December 31, 2015 valuation and measurement date, the following employees
were covered by the benefit terms:
Inactive employees of beneficiaries currently receiving benefits 8
Inactive employees entitled to but not yet receiving benefits 19
Active employees 32
59
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
65
NOTE 11. DEFINED BENEFIT PENSION PLAN – TMRS - CONTINUED
Contributions
The contribution rates for employees in TMRS are either 5%, 6%, or 7% of employee
gross earnings, and the city matching percentages are either 100%, 150%, or 200%,
both as adopted by the governing body of the city. Under the state law governing TMRS,
the contribution rate for each city is determined annually by the actuary, using the Entry
Age Normal (EAN) actuarial cost method. The actuarially determined rate is the
estimated amount necessary to finance the cost of benefits earned by employees during
the year, with an additional amount to finance any unfunded accrued liability.
Employees for the Town were required to contribute 7% of their annual gross earnings
during the fiscal year. The contribution rates for the Town were 10.92% and 11.53% in
calendar years 2015 and 2016, respectively. The Town’s contributions to TMRS for the
year ended September 30, 2016, were $316,618, and were equal to the required
contributions.
Net Pension Liability
The Town’s Net Pension Liability (NPL) was measured as of December 31, 2015, and
the Total Pension Liability (TPL) used to calculate the Net Pension Liability was
determined by an actuarial valuation as of that date.
Actuarial Assumptions
The Total Pension Liability in the December 31, 2015 actuarial valuation was determined
using the following actuarial assumptions:
• Inflation 2.5% per year
• Overall payroll growth 3.0% per year
• Investment Rate of Return 6.75%, net of pension plan investment expense,
including inflation
Salary increases were based on a service-related table. Mortality rates for active
members, retirees, and beneficiaries were based on the gender-distinct RP2000
Combined Healthy Mortality Table, with male rates multiplied by 109% and female rates
multiplied by 103%. The rates are projected on a fully generational basis by scale BB to
account for future mortality improvements. For disabled annuitants, the gender-distinct
RP2000 Combined Healthy Mortality Tables with Blue Collar Adjustment are used with
males rates multiplied by 109% and female rates multiplied by 103% with a 3-year set-
forward for both males and females. In addition, a 3% minimum mortality rate is applied
to reflect the impairment for younger members who become disabled. The rates are
projected on a fully generational basis by scale BB to account for future mortality
improvements subject to the 3% floor.
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
66
NOTE 11. DEFINED BENEFIT PENSION PLAN - TMRS – CONTINUED
Actuarial Assumptions – Continued
Actuarial assumptions used in the December 31, 2015, valuation were based on the
results of actuarial experience studies. The experience study in TMRS was for the period
December 31, 2010 through December 31, 2014. Healthy post-retirement mortality rates
and annuity purchase rates were updated based on a Mortality Experience Investigation
Study covering 2009 through 2011, and dated December 31, 2013. These assumptions
were first used in the December 31, 2013 valuation, along with a change to the Entry
Age Normal (EAN) actuarial cost method. Assumptions are reviewed annually. No
additional changes were made for the 2014 valuation. After the Asset Allocation Study
analysis and experience investigation study, the Board amended the long-term expected
rate of return on pension plan investments from 7% to 6.75%. Plan assets are managed
on a total return basis with an emphasis on both capital appreciation as well as the
production of income, in order to satisfy the short-term and long-term funding needs of
TMRS.
The long-term expected rate of return on pension plan investments was determined
using a building-block method in which best estimate ranges of expected future real
rates of return (expected returns, net of pension plan investment expense and inflation)
are developed for each major asset class. These ranges are combined to produce the
long-term expected rate of return by weighting the expected future real rates of return by
the target asset allocation percentage and by adding expected inflation. In determining
their best estimate of a recommended investment return assumption under the various
alternative asset allocation portfolios, GRS focused on the area between (1) arithmetic
mean (aggressive) without an adjustment for time (conservative) and (2) the geometric
mean (conservative) with an adjustment for time (aggressive). At its meeting on July 30,
2015, the TMRS Board approved a new portfolio target allocation.
The target allocation and best estimates of arithmetic real rates of return for each major
asset class are summarized in the following table:
Long-Term Expected Real
Asset Class Target Allocation Rate of Return (Arithmetic)
Domestic Equity 17.5%4.55%
International Equity 17.5%6.10%
Core Fixed Income 10.0%1.00%
Non-Core Fixed Income 20.0%3.65%
Real Return 10.0%4.03%
Real Estate 10.0%5.00%
Absolute Return 10.0%4.00%
Private Equity 5.0%8.00%
Total 100.0%
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
67
NOTE 11. DEFINED BENEFIT PENSION PLAN – TMRS – CONTINUED
Discount Rate
The discount rate used to measure the Total Pension Liability was 6.75%. The projection
of cash flows used to determine the discount rate assumed that employee and employer
contributions will be made at the rates specified in statute. Based on that assumption,
the pension plan’s Fiduciary Net Position was projected to be available to make all
projected future benefit payments of current active and inactive employees. Therefore,
the long-term expected rate of return on pension plan investments was applied to all
periods of projected benefit payments to determine the Total Pension Liability.
Allocations
The Town’s net pension liability, pension expense, and deferred outflows of resources
related to TMRS have been allocated between governmental activities and business-
type activities using a contribution-based method.
Changes in the Net Pension Liability
Total Plan Net
Pension Fiduciary Pension
Liability Net Position Liability
(a)(b)(a) - (b)
Balance at 12/31/2014 4,344,173$ 3,636,576$ 707,597$
Changes for the year:
Service Cost 435,146 - 435,146
Interest 317,982 - 317,982
Change of benefit terms - - -
Difference between expected and
actual experience 96,226 - 96,226
Changes of assumptions 139,579 - 139,579
Contributions - employer - 290,278 (290,278)
Contributions - employee - 188,725 (188,725)
Net investment income - 5,368 (5,368)
Benefit payments, including refunds
of employee contributions (38,289) (38,289) -
Administrative expense (3,268) 3,268
Other changes - (191) 191
Net Changes 950,644 442,623 508,021
Balance at 12/31/15 5,294,817$ 4,079,199$ 1,215,618$
Increase (Decrease)
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
68
NOTE 11. DEFINED BENEFIT PENSION PLAN – TMRS – CONTINUED
Sensitivity of the Net Pension Liability to Changes in the Discount Rate
The following presents the net pension liability of the Town, calculated using the
discount rate of 6.75%, as well as what the Town ’s net pension liability would be if it
were calculated using a discount rate that is 1-percentage-point lower (5.75%) or 1-
percentage-point higher (7.75%) than the current rate:
1% Decrease
1% Decrease in 1% Increase in
Discount Rate (5.75%)Discount Rate (6.75%)Discount Rate (7.75%)
Net pension liability 2,083,089$ 1,215,618$ 504,978$
Pension Plan Fiduciary Net Position
Detailed information about the pension plan’s Fiduciary Net Position is available in a
separately-issued TMRS financial report. That report may be obtained on the Internet at
www.tmrs.com.
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pensions
For the year ended September 30, 2016, the Town recognized pension expense of
$445,492.
At September 30, 2016, the Town reported deferred outflows of resources and deferred
inflows of resources related to pensions from the following sources:
Deferred Deferred
Outflows of Resources Inflows of Resources
Difference between
expected and actual
economic experience 191,511$ -$
Changes in actuarial
assumptions 114,743 -
Difference between
projected and actual
investment earnings 223,783 -
Contributions subsequent to
the measurement date 238,033
Total 768,070$ -$
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
69
NOTE 11. DEFINED BENEFIT PENSION PLAN – TMRS – CONTINUED
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pensions – Continued
$238,033 reported as deferred outflows of resources related to pensions resulting from
contributions subsequent to the measurement date will be recognized as a reduction of
the net pension liability for the year ending September 30, 2017. Amounts reported as
deferred outflows and inflows of resources related to pensions will be recognized in
pension expense as follows:
Year ended
Sept. 30,
2017 132,218$
2018 132,218
2019 132,219
2020 107,367
2021 26,015
Total 530,037$
NOTE 12. DEFINED BENEFIT PENSION PLAN – TRS
Plan Description
The Academy participates in a cost-sharing multiple-employer defined benefit pension
that has a special funding situation. The plan is administered by the Teacher Retirement
System of Texas (TRS). TRS’s defined benef it pension plan is established and
administered in accordance with the Texas Constitution, Article XVI, Section 67 and
Texas Government Code, Title 8, Subtitle C. The pension trust fund is a qualified
pension trust under Section 401(a) of the Internal Revenue Code. The Texas
Legislature establishes benefits and contribution rates within the guidelines of the Texas
Constitution. The pension’s Board of Trustees does not have the authority to establish
or amend benefit terms.
All employees of public, state-supported educational institutions in Texas who are
employed for one-half or more of the standard work load and who are not exempted
from membership under Texas Government Code, Title 8, Section 822.002 are covered
by the system.
Pension Plan Fiduciary Net Position
Detailed information about the Teacher Retirement System’s fiduciary net position is
available in a separately-issued Comprehensive Annual Financial Report that includes
financial statements and required supplementary information. That report may be
obtained on the Internet at http://www.trs.state.tx.us/about/documents/cafr.pdf#CAFR;
by writing to TRS at 1000 Red River Street, Austin, TX, 78701-2698; or by calling (512)
542-6592.
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
70
NOTE 12. DEFINED BENEFIT PENSION PLAN – TRS – CONTINUED
Benefits Provided
TRS provides service and disability retirement, as well as death and survivor benefits, to
eligible employees (and their beneficiaries) of public and higher education in Texas. The
pension formula is calculated using 2.3 percent (multiplier) times the average of the five
highest annual creditable salaries times years of credited service to arrive at the annual
standard annuity except for members who are grandfathered, the three highest annual
salaries are used. The normal service retirement is at age 65 with 5 years of credited
service or when the sum of the member’s age and years of credited service equals 80 or
more years.
Early retirement is at age 55 with 5 years of service credit or earlier than 55 with 30
years of service credit. There are additional provisions for early retirement if the sum of
the member’s age and years of service credit total at least 80, but the member is less
than age 60 or 62 depending on date of employment, or if the member was
grandfathered in under a previous rule. There are no automatic post-employment
benefit changes; including automatic COLAs. Ad hoc post-employment benefit changes,
including ad hoc COLAs can be granted by the Texas Legislature as noted in the Plan
description in (A) above.
Contributions
Contribution requirements are established or amended pursuant to Article 16, section 67
of the Texas Constitution which requires the Texas legislature to establish a member
contribution rate of not less than 6% of the member’s annual compensation and a state
contribution rate of not less than 6% and not more than 10% of the aggregate annual
compensation paid to members of the system during the fiscal year. Texas Government
Code section 821.006 prohibits benefit improvements, if as a result of the particular
action, the time required to amortize TRS’ unfunded actuarial liabilities would be
increased to a period that exceeds 31 years, or, if the amortization period already
exceeds 31 years, the period would be increased by such action.
Employee contribution rates are set in state statute, Texas Government Code 825.402.
Senate Bill 1458 of the 83rd Texas Legislature amended Texas Government Code
825.402 for member contributions and established employee contribution rates for fiscal
years 2014 thru 2017. The 83rd Texas Legislature, General Appropriations Act (GAA)
established the employer contribution rates for fiscal years 2014 and 2015.
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
71
NOTE 12. DEFINED BENEFIT PENSION PLAN – TRS – CONTINUED
Contributions – Continued
Contribution Rates
2015 2016
Member
6.7% 7.2%
Non-Employer Contributing Entity (State) 6.8% 6.8%
Employers 6.8% 6.8%
2016 Employer Contributions $ 88,399
2016 Member Contributions $ 366,807
2015 NECE On-behalf Contributions $ 307,339
Contributors to the plan include members, employers and the State of Texas as the only
non-employer contributing entity. The State is the employer for senior colleges, medical
schools and state agencies including TRS. In each respective role, the State contributes
to the plan in accordance with state statutes and the General Appropriations Act (GAA).
As the non-employer contributing entity for public education and junior colleges, the
State of Texas contributes to the retirement system an amount equal to the current
employer contribution rate times the aggregate annual compensation of all participating
members of the pension trust fund during that fiscal year reduced by the amounts
described below which are paid by the employers. Employers (public school, junior
college, other entities or the State of Texas as the employer for senior universities and
medical schools) are required to pay the employer contribution rate in the following
instances:
• On the portion of the member's salary that exceeds the statutory minimum for
members entitled to the statutory minimum under Section 21.402 of the Texas
Education Code.
• During a new member’s first 90 days of employment.
• When any part or all of an employee’s salary is paid by federal funding sources,
a privately sponsored source, from non-educational and general, or local funds.
• When the employing district is a public junior college or junior college district, the
employer shall contribute to the retirement system an amount equal to 50% of
the state contribution rate for certain instructional or administrative employees;
and 100% of the state contribution rate for all other employees.
In addition to the employer contributions listed above, there are two additional
surcharges an employer is subject to:
• When employing a retiree of the Teacher Retirement System the employer shall
pay both the member contribution and the state contribution as an employment
after retirement surcharge
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
72
NOTE 12. DEFINED BENEFIT PENSION PLAN – TRS – CONTINUED
Contributions – Continued
• When a school district or charter school does not contribute to the Federal Old-
Age, Survivors and Disability Insurance (OASDI) Program for certain
employees, they must contribute 1.5% of the state contribution rate for certain
instructional or administrative employees; and 100% of the state contribution
rate for all other employees.
Actuarial Assumptions
The total pension liability in the August 31, 2015 actuarial valuation was determined
using the following actuarial assumptions:
Valuation Date August 31, 2015
Actuarial Cost Method Individual Entry Age Normal
Asset Valuation Method Market Value
Single Discount Rate 8.00%
Long-term expected Investment Rate of Return* 8.00%
Inflation 2.50%
Salary Increases including inflation 3.50% to 9.50%
Payroll Growth Rate 2.50%
Benefit Changes during the year None
Ad hoc post-employment benefit changes None
The actuarial methods and assumptions are primarily based on a study of actual
experience for the four year period ending August 31, 2014 and adopted on September
24, 2015.
Discount Rate
The discount rate used to measure the total pension liability was 8.0%. There was no
change in the discount rate since the previous year. The projection of cash flows used
to determine the discount rate assumed that contributions from plan members and those
of the contributing employers and the non-employer contributing entity are made at the
statutorily required rates. Based on those assumptions, the pension plan’s fiduciary net
position was projected to be available to make all future benefit payments of current plan
members.
Therefore, the long-term expected rate of return on pension plan investments was
applied to all periods of projected benefit payments to determine the total pension
liability. The long-term rate of return on pension plan investments is 8%. The long-term
expected rate of return on pension plan investments was determined using a building-
block method in which best-estimates ranges of expected future real rates of return
(expected returns, net of pension plan investment expense and inflation) are developed
for each major asset class.
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
73
NOTE 12. DEFINED BENEFIT PENSION PLAN – TRS – CONTINUED
Discount Rate – Continued
These ranges are combined to produce the long-term expected rate of return by
weighting the expected future real rates of return by the target asset allocation
percentage and by adding expected inflation. Best estimates of geometric real rates of
return for each major asset class included in the Systems target asset allocation as of
August 31, 2015 are summarized below:
Long-term
Expected
Portfolio
Target Real Return Real Rate of
Asset Class Allocation Geometric Basis Return*
Global Equity
U.S.18%4.6%1.0%
Non-U.S. Developed 13%5.1%0.8%
Emerging Markets 9%5.9%0.7%
Directional Hedge Funds 4%3.2%0.1%
Private Equity 13%7.0%1.1%
Stable Value
U.S. Treasuries 11%0.7%0.1%
Absolute Return 0%1.8%0.0%
Stable Value Hedge Funds 4%3.0%0.1%
Cash 1%-0.2%0.0%
Real Return
Global Inflation Linked Bonds 3%0.9%0.0%
Real Assets 16%5.1%1.1%
Energy and Natural Resources 3%6.6%0.2%
Commodities 0%1.2%0.0%
Risk Parity
Risk Parity 5%6.7%0.3%
Inflation Expectation 2.2%
Alpha 1.0%
Total 100.0%8.7%
* The Expected Contribution to Returns incorporates the volatility drag resulting from the
conversion between Arithmetic and Geometric mean returns.
Discount Rate Sensitivity Analysis
The following schedule shows the impact of the Net Pension Liability if the discount rate
used was 1% less than and 1% greater than the discount rate that was used (8%) in
measuring the 2015 Net Pension Liability.
1% Decrease in Discount 1% Increase in
Discount Rate (7.0%)Rate (8.0%)Discount Rate (9.0%)
Academy's proportionate share
of the TRS net pension liability 1,713,880$ 1,093,865$ 577,431$
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
74
NOTE 12. DEFINED BENEFIT PENSION PLAN – TRS – CONTINUED
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and
Deferred Inflows of Resources Related to Pensions
At August 31, 2015, the Academy reported a liability of $1,093,865 for its proportionate
share of the TRS’s net pension liability. This liability reflects a reduction for State
pension support provided to the Academy. The amount recognized by the Academy as
its proportionate share of the net pension liability, the related State support, and the total
portion of the net pension liability that was associated with the Academy were as follows:
Academy’s Proportionate share of the collective net pension liability $ 1,093,865
State’s proportionate share that is associated with Academy 3,667,893
Total $ 4,761,758
The net pension liability was measured as of August 31, 2015 and the total pension
liability used to calculate the net pension liability was determined by an actuarial
valuation as of that date. The employer’s proportion of the net pension liability was
based on the employer’s contributions to the pension plan relative to the contributions of
all employers to the plan for the period September 1, 2014 thru August 31, 2015.
At August 31, 2015 the employer’s proportion of the collective net pension liability was
0.0030945% which was an increase of 0.0023755% from its proportion measured as of
August 31, 2014.
Changes Since the Prior Actuarial Valuation
The following are changes to the actuarial assumptions or other inputs that affected
measurement of the total pension liability since the prior measurement period:
Economic Assumptions
1. The inflation assumption was decreased from 3.00% to 2.50%.
2. The ultimate merit assumption for long-service employees was decreased from
1.25% to 1.00%.
3. In accordance with the observed experience, there were small adjustments in the
service-based promotional/longevity component of the salary scale.
4. The payroll growth assumption was lowered from 3.50% to 2.50%.
Mortality Assumptions
5. The post-retirement mortality tables for non-disabled retirees were updated to
reflect recent TRS member experience. Mortality rates will be assumed to
continue to improve in the future using a fully generational approach and Scale
BB.
6. The post-retirement mortality tables for disabled retirees were updated to reflect
recent TRS member experience. Mortality rates will be assumed to continue to
improve in the future using a fully generational approach and Scale BB.
7. The pre-retirement mortality tables for active employees were updated to use
90% of the recently published RP-2014 mortality table for active employees.
Mortality rates will be assumed to continue to improve in the future using a fully
generational approach and Scale BB.
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
75
NOTE 12. DEFINED BENEFIT PENSION PLAN – TRS – CONTINUED
Changes Since the Prior Actuarial Valuation – Continued
Other Demographic Assumptions
1. Previously, it was assumed 10% of all members who had contributed in the past
5 years to be an active member. This was an implicit rehire assumption because
teachers have historically had a high incidence of terminating employment for a
time and then returning to the workforce at a later date. This methodology was
modified to add a more explicit valuation of the rehire incidence in the termination
liabilities, and therefore these 10% are no longer being counted as active
members.
2. There were adjustments to the termination patterns for members consistent with
experience and future expectations. The termination patterns were adjusted to
reflect the rehire assumption. The timing of the termination decrement was also
changed from the middle of the year to the beginning to match the actual pattern
in the data.
3. Small adjustments were made to the retirement patterns for members consistent
with experience and future expectations.
4. Small adjustments to the disability patterns were made for members consistent
with experience and future expectations. Two separate patterns were created
based on whether the member has 10 years of service or more.
5. For members that become disabled in the future, it is assumed 20% of them will
choose a 100% joint and survivor annuity option.
Actuarial Methods and Policies
6. The method of using celled data in the valuation process was changed to now
using individual data records to allow for better reporting of some items, such as
actuarial gains and losses by source.
There were no changes of benefit terms that affected measurement of the total pension
liability during the measurement period.
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
76
NOTE 12. DEFINED BENEFIT PENSION PLAN – TRS – CONTINUED
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and
Deferred Inflows of Resources Related to Pensions
For the year ended August 31, 2016, the Academy recognized pension expense of
$522,616 and revenue of $522,616 for support provided by the State.
At August 31, 2016, the Academy reported its proportionate share of the TRS’s deferred
outflows of resources and deferred inflows of resources related to pensions from the
following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Difference between expected
and actual economic
experience 2,470$ 42,038$
Changes in actuarial
assumptions 10,383 39,024
Changes in proportionate
share 542,750 264
Difference between projected
and actual investment
earnings 225,369 -
Contributions paid to TRS
subsequent to the
measurement date 88,399 -
Total 869,371$ 81,326$
The net amounts of the employer’s balances of deferred outflows and inflows of resources
related to pensions will be recognized in pension expense as follows:
Year ended
Aug. 31,
2017 133,442$
2018 133,442
2019 133,442
2020 148,115
2021 80,614
Thereafter 70,591
Total 699,646$
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
77
NOTE 13. RISK MANAGEMENT
The Town 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.
The Town's general liability, workers' compensation liability, law enforcement liability, errors
and omissions liability, and automobile liability coverage is insured by the Texas Municipal
League, a public entity risk pool. The Town's only responsibility to the Texas Municipal
League is to pay premiums for insurance and related deductible amounts of these policies.
Other risk of loss is covered by commercial insurance. Settlements of claims have not
exceeded coverage in the past three years.
NOTE 14. CONTINGENT LIABILITIES
Litigation
Various claims and lawsuits are pending against the Town. In the opinion of Town
management, after consultation with legal counsel, the potential loss on these claims
and lawsuits will not materially affect the Town's financial position.
Circle T Municipal Utility Districts
The Town and Hillwood are currently in discussions regarding the debt for Municipal
Utility District's (MUDs) #1 and #3 on the Circle T property in Westlake which is
controlled by AIL Investments, L.P. As this property develops, Hillwood agreed to de-
annex developed property from the MUDs in exchange for pro-rata payments on water
and sewer infrastructure installed by the MUDs at their inception.
To date, two projects, Chrysler Financial and Deloitte University, have been or are being
developed within these MUDs. Discussions regarding the Town's payment to AIL
Investments, L.P. in exchange for de-annexation of these two tracks from the Circle T
MUDs have taken place but have not come to a conclusion as to the settlement
amounts. These discussions are ongoing until the Town receives full documentation that
it determines is adequate to support the requested payments. The Town of Westlake
holds full rights and privileges under the State granted Certificate of Convenience and
Necessity (CCN) and can serve all water and sewer customers within these MUD
boundaries regardless of the status of these negotiations.
NOTE 15. SOLANA PUBLIC IMPROVEMENT DISTRICT
On February 24, 2014, the Town Council granted a petition by Maguire Partners-Solana
Land, LP in resolution 14-07 to authorize and provide for the creation of a public
improvement district, The Solana Public Improvement District (“the District”). The District
encompasses approximately 85 acres currently being developed as a master-planned
mixed-use development known as “Westlake Entrada” that is expected to include, among
other things, condominiums, residential villas, hotels, office, retail, commercial, institutional
and hospitality uses, and a wedding event center. The District was created in accordance
with Chapter 372 of the Texas Local Government Code.
TOWN OF WESTLAKE
NOTES TO THE FINANCI AL STATEMENTS
78
NOTE 15. SOLANA PUBLIC IMPROVEMENT DISTRICT – CONTINUED
On February 5, 2015, the Town Council approved issuance of $26,175,000 of Special
Assessment Revenue Bonds, Series 2015 related to the District. The Public Improvement
District Bonds (“The Bonds”) are special and limited obligations of the Town payable solely
from the pledged revenues and other funds comprising the Trust Estate, as and to the
extent provided in the indenture. The bonds do not give rise to a charge against the general
credit or taxing power of the Town and are payable solely from the sources identified in the
indenture. The owners of the bonds shall never have the right to demand payment thereof
out of money raised or to be raised by taxation, or out of any funds of the Town other than
the Trust Estate, as and to the extent provided in the indenture; and, no owner of the bonds
shall have the right to demand any exercise of the Town’s taxing power to pay the principal
of the bonds or the interest or redemption premium, if any, thereon. The Town shall have no
legal or moral obligation to pay the bonds out of any funds of the Town other than the Trust
Estate in accordance with the Texas Local Government Code.
The proceeds from the bond issue are to be used as follows: payment of a portion of the
costs of construction, acquisition, or purchase of certain water, wastewater and roadway
public improvements for the special benefit of the District; funding a reserve fund; funding
capitalized interest; payment of a portion of the costs incidental to the organization of the
District; and payment of the cost of issuance of the bonds. The Town is not, and will not be
obligated to provide any funds to finance construction of authorized improvements. All
design and construction costs of the District’s authorized public improvements will be paid
from the District assessments and from other sources of funds, if any, to the extent provided
in the Trust Indenture.
NOTE 16. GOING CONCERN
The 2016 financial statements were prepared assuming the Texas Student Housing entities
will continue as going concerns. The Texas Student Housing entities’ bonds payable are
considered to be in default due to not making full principal and interest payments and,
therefore, are reported as current liabilities. This is considered an event of default by the
Trustees, which gives the bondholders the right to accelerate and demand payment of the
bonds in full. Management and the property managers are in the process of developing and
implementing plans to increase occupancy and rental rates at the properties to improve their
financial performance.
NOTE 17. SUBSEQUENT EVENTS
On December 1, 2016, the Town issued $9,180,000 Combination Tax and Revenue
Certificates of Obligation, Series 2016. Proceeds of the certificates will be used to pay for
acquiring, constructing, installing and equipping fire-fighting facilities.
REQUIRED SUPPLEMENTARY INFORMATION
EXHIBIT B-1
TOWN OF WESTLAKE
SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL – GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2016
79
Variance
Favorable
Orginal Amended Actual (Unfavorable)
REVENUES:
Taxes
Sales 3,723,000$ 3,310,500$ 3,345,688$ 35,188$
Property 1,280,258 1,317,350 1,318,058 708
Mixed beverages 53,025 61,280 61,476 196
Franchise 849,733 928,177 930,043 1,866
Interest income 10,620 14,415 18,911 4,496
Building permits and fees 2,307,786 2,705,999 2,715,236 9,237
Fines and penalties 710,000 808,595 796,014 (12,581)
Contributions 10,000 - 13,299 13,299
Miscellaneous 32,750 124,418 227,886 103,468
Total revenues 8,977,172 9,270,735 9,426,611 155,876
EXPENDITURES:
Current
General government 3,102,146 3,330,015 3,280,507 49,508
Public safety 2,605,108 2,470,266 2,453,857 16,409
Cultural and recreation 207,707 191,293 185,923 5,370
Public works 769,937 729,006 773,751 (44,745)
Capital outlay 12,750 176,350 50,563 125,787
Debt service
Principal retirement 36,678 36,678 48,126 (11,448)
Interest and other fiscal charges - - 121 (121)
Total expenditures 6,734,326 6,933,608 6,792,848 140,760
Excess of revenues over expenditures 2,242,845 2,337,127 2,633,763 296,636
OTHER FINANCING SOURCES (USES)
Transfers in 315,378 315,378 277,878 (37,500)
Transfers out (1,449,534) (927,422) (912,718) 14,704
Insurance proceeds - 14,995 - (14,995)
Net other financing sources (uses)(1,134,156) (597,049) (634,840) (37,791)
NET CHANGE IN FUND BALANCE 1,108,690 1,740,078 1,998,923 258,845
FUND BALANCE AT BEGINNING OF YEAR 7,680,550 7,680,550 7,680,550 -
FUND BALANCE AT END OF YEAR 8,789,240$ 9,420,628$ 9,679,473$ 258,845$
General Fund
Budgeted Amounts
EXHIBIT B-2
TOWN OF WESTLAKE
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL – WESTLAKE ACADEMY
FOR THE YEAR ENDED SEPTEMBER 30, 2016
80
Variance
Favorable
Orginal Final Actual (Unfavorable)
REVENUES:
State program revenues 6,435,693$ 6,445,856$ 6,543,782$ 97,926$
Federal program revenues 90,000 98,564 98,564 -
Interest income 1,575 3,000 3,126 126
Miscellaneous 1,437,645 1,482,280 1,301,334 (180,946)
Total revenues 7,964,913 8,029,700 7,946,806 (82,894)
EXPENDITURES:
Education 8,282,960 9,229,616 9,245,592 (15,976)
Interest and other fiscal charges 5,993 5,993 5,464 529
Total expenditures 8,288,953 9,235,609 9,251,056 (15,447)
Excess (deficiency) of revenues over expenditures (324,040) (1,205,909) (1,304,250) (98,341)
OTHER FINANCING SOURCES
Transfers in 315,000 315,000 315,000 -
Capital lease proceeds - 482,425 474,300 (8,125)
Total other financing sources 315,000 797,425 789,300 (8,125)
NET CHANGE IN FUND BALANCE (9,040) (408,484) (514,950) (106,466)
FUND BALANCE AT BEGINNING OF YEAR 1,673,712 1,673,712 1,673,712 -
FUND BALANCE AT END OF YEAR 1,664,672$ 1,265,228$ 1,158,762$ (106,466)$
Westlake Academy
Budgeted Amounts
TOWN OF WESTLAKE
NOTES TO BUDGETARY COMPARISON SCHEDULES
81
Budgetary Information -The Town follows these procedures annually in establishing the
budgetary data reflected in the budgetary comparison schedules:
1. The Town Manager submits to the Town Council a proposed budget for the fiscal year
commencing the following October 1. The budget includes proposed expenditures and
the means of financing them.
2. Prior to October 1, the budget is legally adopted through passage of an ordinance. This
budget is reported as the Original Budget in the budgetary comparison schedules.
3. During the fiscal year, changes to the adopted budget may be authorized, as follows:
a. Items requiring Town Council action - appropriation of fund balance reserves;
transfers of appropriations between funds; new inter-fund loans or advances; and
creation of new capital projects or increases to existing capital projects.
b. Items delegated to the Town Manager - appropriation balances from an
expenditure account to another within a single fund.
4. Annual budgets are legally adopted and amended as required for the general, special
revenue and debt service funds. Project length budgets are adopted for the capital
projects funds. All budgets are adopted on a basis consistent with generally accepted
accounting principles. Budgets are adopted for the proprietary funds annually only as a
management tool. There are no legally mandated budgetary constraints for the
proprietary funds.
5. Budget amounts are reflected after all authorized amendments and revisions. This
budget is reported as the Final Budget in the budgetary comparison schedules.
6. The appropriated budget is prepared by fund, function and department. The Town's
management may make transfers of appropriations within a fund. Transfers of
appropriations between funds require the approval of the Town Council. The legal level
of budgetary control is the fund level. The Town Council made several supplementary
budget appropriations during the year.
7. Encumbrances represent commitments related to unperformed contracts for goods or
services. Encumbrance accounting under which purchase orders, contracts and other
commitments for the expenditure of resources are recorded to reserve that portion of the
applicable appropriation is utilized in the governmental funds. Encumbrances lapse at
year-end and do not constitute expenditures or liabilities because the commitments must
be re-appropriated and honored during the subsequent year.
8. Expenditures exceeded appropriations in public works and debt service of the General
Fund.
EXHIBIT B-3
TOWN OF WESTLAKE
SCHEDULE OF NET PENSION LIABILITY AND RELATED RATIOS
TEXAS MUNICIPAL RETIREMENT SYSTEM
LAST TWO MEASUREMENT YEARS
82
2015 2014
Total Pension Liability:
Service cost 435,146$ 288,923$
Interest 317,982 264,994
Change in benefit terms - -
Difference between expected and
actual experience 96,226 176,965
Change in assumptions 139,579 -
Benefit payments (38,289) (55,762)
Net change in total pension liability 950,644 675,120
Total Pension Liability-beginning 4,344,173 3,669,053
Total Pension Liability-ending 5,294,817 4,344,173
Plan Fiduciary Net Position
Contributions - employer 290,278 172,064
Contributions - nonemployer 188,725 152,077
Net investment income 5,368 182,430
Benefit payments (38,289) (55,762)
Administrative income (3,268) (1,904)
Other (191) (127)
Net change in plan fiduciary net position 442,623 448,778
Plan fiduciary net position -beginning 3,636,576 3,187,798
Plan fiduciary net position - ending 4,079,199 3,636,576
Town's net pension liability -ending 1,215,618$ 707,597$
Plan fiduciary net position as a %
of total pension liability 77.04%83.71%
Covered payroll 2,696,072$ 2,172,525$
Town's net pension liability as a %
of employee payroll 45.09%32.57%
Note: Only two years of data is presented in accordance with GASB #68, paragraph 138. “The
information for all period for the 10-year schedules that are required to be presented as required
supplementary information may be available initially. In these cases, during the transition period,
that information should be presented for as many periods as are available. The schedules
should not include information that is not measured in accordance with the requirements of this
statement. Additional years’ information will be displayed as it becomes available.”
EXHIBIT B-4
TOWN OF WESTLAKE
SCHEDULE OF CONTRIBUTIONS
TEXAS MUNICIPAL RETIREMENT SYSTEM
LAST TWO FISCAL YEARS
83
2016 2015
Actuarially Determined Contributions 316,618$ 277,651$
Contributions in relation to the actuarially
determined contributions (316,618) (277,651)
Contribution deficiency (excess)-$ -$
Covered employee payroll 2,821,349 2,778,776
Contributions as a percentage
of covered employee payroll 11.22%9.99%
Note: GASB #68, paragraph 81.2.b requires that the data in this schedule be presented as of the
Town’s fiscal year as opposed to the time period covered by the measurement date.
Note: Only two years of data is presented in accordance with GASB #68, paragraph 138. “The
information for all period for the 10-year schedules that are required to be presented as required
supplementary information may be available initially. In these cases, during the transition period,
that information should be presented for as many periods as are available. The schedules should
not include information that is not measured in accordance with the requirements of this statement.
Additional years’ information will be displayed as it becomes available.”
TOWN OF WESTLAKE
NOTES TO TEXAS MUNICIPAL RETIREMENT SYSTEM REQUIRED SUPPLEMENTARY
INFORMATION
FOR THE YEAR ENDED SEPTEMBER 30, 2016
84
VALUATION DATE:
Actuarial determined contribution rates are calculated as of December 31 each year and
become effective in January, 12 months and one day later.
METHODS AND ASSUMPTIONS USED TO DETERMINE CONTRIBUTION RATES:
Actuarial Cost Method Entry Age Normal
Amortization Method Level Percentage of Payroll, Closed
Remaining Amortization Period 28 years
Asset Valuation Method 10 Year smoothed market; 15% soft corridor
Inflation 2.50%
Salary Increases 3.50% to 10.50% including inflation
Investment Rate of Return 6.75%
Retirement Age Experience-based table of rates that are specific to
the City's plan of benefits. Last updated for the 2015
valuation pursuant to an experience study of the
period 2010 - 2014
Mortality RP2000 Combined Mortality Table with Blue Collar
Adjustment with male rates multiplied by 109% and
female rates multiplied by 103% and projected on a
fully generational basis with scale BB
TOWN OF WESTLAKE EXHIBIT B-5
SCHEDULE OF ACADEMY’S PROPORTIONATE SHARE
OF NET PENSION LIABILITY – TEACHER RETIREMENT SYSTEM
LAST TWO MEASUREMENT YEARS
85
2015 2014
Academy's proportion of the net pension liability 0.0030945%0.0007190%
Academy's proportionate share of net pension liability 1,093,865$ 192,056$
State's proportionate share of net pension liability
associated with the Westlake Academy 3,667,893 2,965,583
Total 4,761,758$ 3,157,639$
Academy's covered payroll 4,784,695$ 4,300,931$
Academy's proportionate share of net pension liability
as a percentage of its covered payroll 22.86%4.47%
Plan fiduciary net position as a
percentage of total pension liability 78.43%83.25%
Note: Only two years of data is presented in accordance with GASB #68, paragraph 138. "The
information for all periods for the 10-year schedules that are required to be presented as
required supplementary information may not be available initially. In these cases, during the
transition period, that information should be presented for as many years as are available. The
schedules should not include information that is not measured in accordance with the
requirements of this Statement."
EXHIBIT B-6
TOWN OF WESTLAKE
SCHEDULE OF CONTRIBUTIONS
TEACHER RETIREMENT SYSTEM
LAST TWO FISCAL YEARS
(UNAUDITED)
86
2016 2015
Statutorially required contributions 88,399$ 92,325$
Actual contributions in relation to
statutorially required contributions 88,399 92,325
Contribution deficiency (excess)-$ -$
Academy's covered payroll 5,094,571$ 4,784,694$
Contributions as a percentage
of Academy's covered payroll 1.74%1.93%
Note: GASB 68, Paragraph 81.2.b requires that the data in this schedule be presented as of the
Academy's current fiscal year as opposed to the time period covered by the measurement date.
Note: Only two years of data is presented in accordance with GASB #68, paragraph 138. "The
information for all periods for the 10-year schedules that are required to be presented as
required supplementary information may not be available initially. In these cases, during the
transition period, that information should be presented for as many years as are available. The
schedules should not include information that is not measured in accordance with the
requirements of this Statement."
TOWN OF WESTLAKE
COMBINING AND INDIVIDUAL FUND
STATEMENTS AND SCHEDULES
TOWN OF WESTLAKE EXHIBIT C-1
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL – DEBT SERVICE FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2016
87
Variance
Favorable
Original Amended Actual (Unfavorable)
REVENUES:
Taxes
Property 133,507$ 161,915$ 161,393$ (522)$
Total revenues 133,507 161,915 161,393 (522)
EXPENDITURES:
Debt service
Principal retirement 1,068,550 1,068,550 1,068,550 -
Interest and other fiscal charges 944,944 940,718 939,882 836
Total expenditures 2,013,494 2,009,268 2,008,432 836
Deficiency of revenues under expenditures (1,879,987) (1,847,353) (1,847,039) 314
OTHER FINANCING SOURCES (USES)
Transfers in 1,857,511 1,856,413 1,856,591 178
Net other financing sources (uses)1,857,511 1,856,413 1,856,591 178
NET CHANGE IN FUND BALANCE (22,476) 9,060 9,552 492
FUND BALANCE AT BEGINNING OF YEAR 20,916 20,916 20,916 -
FUND BALANCE AT END OF YEAR (1,560)$ 29,976$ 30,468$ 492$
Debt Service Fund
Budgeted Amounts
TOWN OF WESTLAKE
NONMAJOR GOVERNMENTAL FUNDS
88
Visitors Association Fund
To account for municipal hotel occupancy taxes collected and expenditures to promote tourism
and the convention and hotel industry.
Lone Star Public Facilities Corporation
To account for investment activity relating to the Lone Star Public Facilities Corporation.
Economic Development Fund
To account for sales tax and hotel occupancy tax collected to fund activity relating to Economic
Development agreements.
4B Economic Development Corporation
To account for sales tax collected to fund the activities of the 4B Economic Development
Corporation.
EXHIBIT C-2
TOWN OF WESTLAKE
COMBINING BALANCE SHEET
NON MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2016
89
Visitors
Association
Lone Star
Public
Facilities
Corporation
Fund
Economic
Development
Fund
4B Economic
Development
Corporation
Fund
Total
Nonmajor
Governmental
Funds
ASSETS
Cash and cash equivalents 969,343$ 13,679$ 1,877$ -$ 984,899$
Receivables: (net of allowances for uncollectibles)
Accounts receivable 66,102 - 30,519 199,237 295,858
Prepaid items 8,315 - - - 8,315
Total assets 1,043,760$ 13,679$ 32,396$ 199,237$ 1,289,072$
LIABILITIES AND FUND BALANCES
Accounts payable 29,289$ -$ 32,396$ -$ 61,685$
Unearned revenue 2,520 - - - 2,520
Due to other funds - - - 199,237 199,237
Total liabilities 31,809 - 32,396 199,237 263,442
FUND BALANCES
Nonspendable:
Prepaid items 8,315 - - - 8,315
Restricted for:
Tourism 1,003,636 - - - 1,003,636
Future projects - 13,679 - - 13,679
Total fund balances 1,011,951 13,679 - - 1,025,630
Total liabilities and fund balances 1,043,760$ 13,679$ 32,396$ 199,237$ 1,289,072$
EXHIBIT C-3
TOWN OF WESTLAKE
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES
NON MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2016
90
Visitors
Association
Lone Star
Public
Facilities
Corporation
Fund
Economic
Development
Fund
4B Economic
Development
Corporation
Fund
Total Nonmajor
Governmental
Funds
REVENUES
Sales -$ -$ 111,454$ 1,152,381$ 1,263,835$
Hotel occupancy 792,165 - 30,325 - 822,490
Interest income 3,609 47 - - 3,656
Contributions 1,200 - - - 1,200
Miscellaneous 13,615 - - - 13,615
Total revenues 810,589 47 141,779 1,152,381 2,104,796
EXPENDITURES
Current:
Economic development - - 141,779 - 141,779
Visitor services 725,971 - - - 725,971
Debt service
Principal retirement - - 33,814 - 33,814
Interest and other fiscal charges - - 1,944 - 1,944
Total expenditures 725,971 - 177,537 - 903,508
Excess of revenues
over expenditures 84,618 47 (35,758) 1,152,381 1,201,288
OTHER FINANCING SOURCES (USES)
Transfers in - - 35,758 - 35,758
Transfers out (155,550) - - (1,152,381) (1,307,931)
Total other financing
sources (uses)(155,550) - 35,758 (1,152,381) (1,272,173)
Net change in fund balances (70,932) 47 - - (70,885)
Fund balances, October 1 1,082,883 13,632 - - 1,096,515
Fund balances, September 30 1,011,951$ 13,679$ -$ -$ 1,025,630$
EXHIBIT C-4
TOWN OF WESTLAKE
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL – VISITORS ASSOCIATION FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2016
91
Variance
Favorable
Orginal Amended Actual (Unfavorable)
REVENUES:
Taxes
Hotel occupancy 825,000$ 789,000$ 792,165$ 3,165$
Interest income 2,900 2,900 3,609 709
Contributions 8,860 1,200 1,200 -
Miscellaneous 13,040 4,150 13,615 9,465
Total revenues 849,800 797,250 810,589 13,339
EXPENDITURES:
Visitor services 775,841 740,090 725,971 14,119
Total expenditures 775,841 740,090 725,971 14,119
Excess of revenues over expenditures 73,959 57,160 84,618 27,458
OTHER FINANCING USES
Transfers out (155,550) (155,550) (155,550) -
Total other financing uses (155,550) (155,550) (155,550) -
NET CHANGE IN FUND BALANCE (81,591) (98,390) (70,932) 27,458
FUND BALANCE AT BEGINNING OF YEAR 1,082,883 1,082,883 1,082,883 -
FUND BALANCE AT END OF YEAR $1,001,292 $984,493 $1,011,951 $27,458
Visitors Association Fund
Budgeted Amounts
EXHIBIT C-5
TOWN OF WESTLAKE
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL – LONE STAR PUBLIC FACILITIES CORPORATION FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2016
92
Variance
Favorable
Orginal Amended Actual (Unfavorable)
REVENUES:
Interest income 25$ 30$ 47$ 17$
Total revenues 25 30 47 17
EXPENDITURES:
Economic development - - - -
Total expenditures - - - -
NET CHANGE IN FUND BALANCE 25 30 47 17
FUND BALANCE AT BEGINNING OF YEAR 13,632 13,632 13,632 -
FUND BALANCE AT END OF YEAR $13,657 $13,662 $13,679 $17
Lone Star Public Facilities Corporation
Budgeted Amounts
EXHIBIT C-6
TOWN OF WESTLAKE
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL – ECONOMIC DEVELOPMENT FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2016
93
Variance
Favorable
Orginal Amended Actual (Unfavorable)
REVENUES:
Taxes
Sales 102,000$ 102,000$ 111,454$ 9,454$
Hotel occupancy 85,000 32,000 30,325 (1,675)
Miscellaneous 450,000 - - -
Total revenues 637,000 134,000 141,779 7,779
EXPENDITURES:
Economic development 187,000 134,000 141,779 (7,779)
Debt service
Principal retirement 30,236 30,236 33,814 (3,578)
Interest and other fiscal charges 5,522 5,522 1,944 3,578
Total expenditures 222,758 169,758 177,537 (7,780)
Excess of revenues over expenditures 414,242 (35,758) (35,758) -
OTHER FINANCING SOURCES (USES)
Transfers in 35,758 35,758 35,758 -
Transfers out (450,000) - - -
Total other financing sources (uses)(414,242) 35,758 35,758 -
NET CHANGE IN FUND BALANCE - - - -
FUND BALANCE AT BEGINNING OF YEAR - - - -
FUND BALANCE AT END OF YEAR -$ -$ -$ -$
Economic Development Fund
Budgeted Amounts
EXHIBIT C-7
TOWN OF WESTLAKE
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL – 4B ECONOMIC DEVELOPMENT CORPORATION FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2016
94
Variance
Favorable
Orginal Amended Actual (Unfavorable)
REVENUES:
Taxes
Sales 1,275,000$ 1,137,500$ 1,152,381$ 14,881$
Interest income 500 - - -
Total revenues 1,275,500 1,137,500 1,152,381 14,881
EXPENDITURES:
Economic development - - - -
Total expenditures - - - -
Excess of revenues over expenditures 1,275,500 1,137,500 1,152,381 14,881
OTHER FINANCING USES
Transfers out (1,275,500) (1,137,500) (1,152,381) (14,881)
Total other financing uses (1,275,500) (1,137,500) (1,152,381) (14,881)
NET CHANGE IN FUND BALANCE - - - -
FUND BALANCE AT BEGINNING OF YEAR - - - -
FUND BALANCE AT END OF YEAR -$ -$ -$ -$
4B Economic Development Corporation
Budgeted Amounts
TOWN OF WESTLAKE
AGENCY FUNDS
95
PID Agency Fund
To account for bond proceeds, assessments, and related debt associated with bonds issued by the
Town as an agent for the Solana public improvement district.
TOWN OF WESTLAKE EXHIBIT C-8
PID AGENCY FUND
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2016
96
Balance at Balance at
Beginning End
of Year Additions Deletions of Year
ASSETS
Restricted cash and cash equivalents 4,372,587$ 7,526$ (1,610,538)$ 2,769,575$
Total Assets 4,372,587$ 7,526$ (1,610,538)$ 2,769,575$
Liabilities
Liability to bond holders 4,372,587 7,526 (1,610,538)2,769,575
Total Liabilities 4,372,587$ 7,526$ (1,610,538)$ 2,769,575$
TOWN OF WESTLAKE
STATISTICAL SECTION
STATISTICAL SECTION
(UNAUDITED)
97
This part of the Town of Westlake, Texas' comprehensive annual financial report presents
detailed information as a context for understanding what the information in the financial
statements, note disclosures and required supplementary information says about the Town's
overall financial health.
Contents Page
Financial Trends
98-103
Revenue Capacity
104-108
Debt Capacity
109-111
Demographic and Economic Information
112-113
Operating Information
114-116
Sources:Unless otherwise noted, the information in these
schedules is derived from annual financial
reports for the relevant year.
These schedules offer demographic and economic indicators
to help the reader understand the environment within which
the Town's financial activities take place.
These schedules contain service and infrastructure data to
help the reader understand how the information in the
Town's financial report relates to the services the Town
provides and the activities it performs.
These schedules contain trend information to help the reader
understand how the Town's financial performance and well-
being have changed over time.
These schedules contain information to help the reader
assess the Town's most significant local revenue sources.
Although sales taxes are the Town's most significant local
revenue source,information about principal revenue payers
is confidential under Texas statutes,and;therefore,not
disclosed.Trend information about sales tax revenue is
provided in Exhibit S-9.
These schedules present information to help the reader
assess the affordability of the Town's current levels of
outstanding debt and the Town's ability to issue additional
debt in the future.
EXHIBIT S-1
TOWN OF WESTLAKE
NET POSITION BY COMPONENT
LAST TEN YEARS
(ACCRUAL BASIS OF ACCOUNTING – UNAUDITED)
98
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Governmental activities:
Invested in capital assets, net of related debt 9,646,644$ 10,313,743$ 13,244,690$ 13,633,485$ 12,658,921$ 14,866,299$ 21,177,426$ 32,048,991$ 29,633,298$ 38,299,337$
Restricted 1,719,771 2,004,763 1,761,067 1,564,868 7,137,362 4,726,376 4,243,239 2,284,947 17,827,177 7,489,048
Unrestricted 3,305,542 3,835,751 4,122,185 5,866,046 3,448,100 5,023,731 6,636,876 910,977)( 7,108,101 9,260,572
Total governmental activities net position 14,671,957$ 16,154,257$ 19,127,942$ 21,064,399$ 23,244,383$ 24,616,406$ 32,057,541$ 33,422,961$ 54,568,576$ 55,048,957$
Business-type activities:
Invested in capital assets, net of related debt 8,097,807$ 7,726,576$ 7,349,032$ 7,033,831$ 6,875,031$ 6,877,555$ 6,601,949$ 6,734,414$ 6,410,547$ 6,044,363$
Unrestricted 2,008,243)( 1,997,281)( 1,945,578)( 2,003,600)( 1,542,092)( 1,636,249)( 842,457)( 1,272,014)( 2,608,315)( 4,041,360)(
Total business-type activities net position 6,089,564$ 5,729,295$ 5,403,454$ 5,030,231$ 5,332,939$ 5,241,306$ 5,759,492$ 5,462,400$ 3,802,232$ 2,003,003$
Primary government:
Invested in capital assets, net of related debt 17,744,451$ 18,040,319$ 20,593,722$ 20,667,316$ 19,533,952$ 21,743,854$ 27,779,375$ 38,783,405$ 36,043,845$ 44,343,700$
Restricted 1,719,771 2,004,763 1,761,067 1,564,868 7,137,362 4,726,376 4,243,239 2,284,947 17,827,177 7,489,048
Unrestricted 1,297,299 1,838,470 2,176,607 3,862,446 1,906,008 3,387,482 5,794,419 (2,182,991) 4,499,786 5,219,212
Total primary government net position 20,761,521$ 21,883,552$ 24,531,396$ 26,094,630$ 28,577,322$ 29,857,712$ 37,817,033$ 38,885,361$ 58,370,808$ 57,051,960$
Source:Annual financial reports
Fiscal Year
EXHIBIT S-2 (CONTINUED)
TOWN OF WESTLAKE
CHANGES IN NET POSITION
LAST TEN YEARS
(ACCRUAL BASIS OF ACCOUNTING – UNAUDITED)
99
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
EXPENSES
Governmental activities:
General government 1,941,289$ 2,031,460$ 2,203,882$ 2,272,127$ 2,478,826$ 2,518,490$ 2,606,785$ 2,784,587$ 3,145,716$ 4,491,557$
Public Safety 1,738,080 1,795,782 1,939,441 1,698,164 1,801,585 1,883,424 1,978,803 2,190,050 2,381,437 2,737,084
Cultural and Recreation 86,560 129,641 115,770 105,997 122,400 111,765 113,924 123,541 129,970 187,274
Public Works 455,481 1,013,804 1,028,934 594,705 470,054 216,901 267,973 955,794 1,081,996 1,102,636
Economic Development 120,753 473,451 207,044 309,653 680,823 546,039 626,423 147,680 171,757 141,779
Visitor Services 217,992 312,777 341,270 420,270 356,365 475,719 521,521 493,087 665,936 740,835
Education 2,672,698 3,305,220 3,722,705 4,138,875 4,884,985 6,193,560 5,803,611 7,147,411 8,598,261 9,516,287
Interest on long-term debt 869,327 991,184 1,068,935 1,026,026 1,127,913 897,573 1,031,328 998,951 1,022,201 990,413
Total governmental activities expenses 8,102,180 10,053,319 10,627,981 10,565,817 11,922,951 12,843,471 12,950,368 14,841,101 17,197,274 19,907,865
Business-type activities:
Water and Sewer 2,206,618 2,410,765 2,694,407 2,567,675 2,794,235 3,098,466 3,356,466 3,690,137 4,861,529 5,519,116
Cemetery - 13,299 473 27,822 5,604 6,282 5,328 7,121 7,297 7,831
Total business-type activities expenses 2,206,618 2,424,064 2,694,880 2,595,497 2,799,839 3,104,748 3,361,794 3,697,258 4,868,826 5,526,947
Total primary government program expenses 10,308,798$ 12,477,383$ 13,322,861$ 13,161,314$ 14,722,790$ 15,948,219$ 16,312,162$ 18,538,359$ 22,066,100$ 25,434,812$
PROGRAM REVENUES
Governmental activities:
Fees, fines, and charges for services:
General Government 785,771$ 522,215$ 677,948$ 716,624$ 721,157$ 673,090$ 774,909$ 33,975$ 110,778$ 789,457$
Public Safety 165,255 113,755 107,634 80,665 140,600 142,402 182,154 848,772 887,919 932,017
Public Works 625,340 902,875 594,338 1,597,655 292,572 407,328 659,246 1,022,769 936,245 1,789,776
Education 85,925 42,839 98,314 102,406 99,638 195,059 182,220 222,270 531,090 283,077
Operating grants and contributions 1,257,058 1,296,378 1,522,935 853,151 728,242 5,269,841 4,907,472 6,592,642 7,615,653 7,863,168
Capital grants and contributions - - 2,059,624 83,250 425,900 - 5,897,456 80,472 19,983,078 269,185
Total governmental activities program revenues 2,919,349 2,878,062 5,060,793 3,433,751 2,408,109 6,687,720 12,603,457 8,800,900 30,064,763 11,926,680
Business-type activities:
Charges for services:
Water and Sewer 1,657,186 2,037,306 2,345,236 2,101,510 3,078,868 2,934,842 3,157,332 3,428,702 3,549,775 3,968,086
Cemetery 2,100 - 5,550 13,300 4,500 5,510 7,749 13,620 11,115
Operating grants and contributions - - - 46,810 - 24,423 - - - -
Capital grants and contributions - 169,034 - - - - - - - -
Total business-type activities program revenues 1,657,186 2,208,440 2,345,236 2,153,870 3,092,168 2,963,765 3,162,842 3,436,451 3,563,395 3,979,201
Total primary government program revenues 4,576,535$ 5,086,502$ 7,406,029$ 5,587,621$ 5,500,277$ 9,651,485$ 15,766,299$ 12,237,351$ 33,628,158$ 15,905,881$
Fiscal Year
EXHIBIT S-2 (CONCLUDED)
TOWN OF WESTLAKE
CHANGES IN NET POSITION
LAST TEN YEARS
(ACCRUAL BASIS OF ACCOUNTING – UNAUDITED)
100
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
NET (EXPENSE) REVENUES
Governmental activities 5,182,831)$( 7,175,257)$( 5,567,188)$( 7,132,066)$( 9,514,842)$( 6,155,751)$( 346,911)$( 6,040,201)$( 12,867,489$ 7,981,185)$(
Business-type activities 549,432)( 215,624)( 349,644)( 441,627)( 292,329 140,983)( 198,952)( 260,807)( 1,305,431)( 1,547,746)(
Total primary government net expense 5,732,263)( 7,390,881)( 5,916,832)( 7,573,693)( 9,222,513)( 6,296,734)( 545,863)( 6,301,008)( 11,562,058 9,528,931)(
GENERAL REVENUES AND OTHER
CHANGES IN NET POSITION
Governmental activities:
Taxes
Sales 2,197,756$ 3,590,575$ 3,664,409$ 3,790,533$ 4,609,626$ 3,657,274$ 4,375,397$ 4,725,845$ 4,925,428$ 4,609,523$
Property 1,260,112 1,441,238 1,366,633 1,367,069 1,438,969 1,476,355
Hotel Occupancy 458,471 527,662 497,769 457,693 527,261 590,853 709,578 796,481 872,179 822,490
Mixed Beverage 14,066 16,177 17,869 17,902 19,721 38,286 39,727 51,602 59,184 61,476
Franchise 560,312 649,108 624,401 603,233 586,836 664,991 734,935 795,322 963,040 930,043
Unrestricted grants and contributions 2,259,643 2,500,817 2,960,590 3,484,141 3,744,757 - - - - -
Investment earnings 261,622 188,459 61,224 38,383 46,248 33,353 24,218 26,713 28,904 55,600
Miscellaneous 466,654 564,973 568,782 676,638 691,345 1,112,858 1,023,149 246,633 198,199 241,501
Transfers 33,976 220,819 61,321 - 145,216 45,507 485,591)( 43,399 323,100 264,578
Extraordinary item 56,704 124,346)( - - - -
Special item - 67,760 - - - -
Gain on sale of capital assets - - - - 7,000 - - - - -
Total governmental activities 6,252,500 8,258,590 8,456,365 9,068,523 11,694,826 7,527,774 7,788,046 8,053,064 8,809,003 8,461,566
Business-type activities:
Investment earnings 46,158 32,103 7,858 8,334 9,929 10,077 6,552 7,114 7,083 13,095
Miscellaneous 36,936 44,071 77,266 60,070 145,666 84,780 224,995 - - -
Transfers 33,976)( 220,819)( 61,321)( - 145,216)( 45,507)( 485,591 43,399)( 323,100)( 264,578)(
Total business-type activities 49,118 144,645)( 23,803 68,404 10,379 49,350 717,138 36,285)( 316,017)( 251,483)(
Total primary government 6,301,618 8,113,945 8,480,168 9,136,927 11,705,205 7,577,124 8,505,184 8,016,779 8,492,986 8,210,083
CHANGE IN NET POSITION
Governmental activities 1,069,669 1,083,333 2,889,177 1,936,457 2,179,984 1,372,023 7,441,135 2,012,863 21,676,492 480,381
Business-type activities 500,314)( 360,269)( 325,841)( 373,223)( 302,708 91,633)( 518,186 297,092)( 1,621,448)( 1,799,229)(
Total primary government 569,355$ 723,064$ 2,563,336$ 1,563,234$ 2,482,692$ 1,280,390$ 7,959,321$ 1,715,771$ 20,055,044$ 1,318,848)$(
Source: Annual financial reports
Fiscal Year
EXHIBIT S-3
TOWN OF WESTLAKE
FUND BALANCES
GOVERNMENTAL FUNDS
LAST TEN YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING – UNAUDITED)
101
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
General fund
Reserved 563,176$ 303,639$ 193,105$ 214,750$ -$ -$ -$ -$ -$ -$
Unreserved 2,533,123 2,503,099 2,532,207 3,578,235 - - - - - -
Nonspendable:
Prepaid items 62,020 6,856 6,906 8,821 13,334 12,794
Restricted for:
Court security and technology 186,776 192,768 194,422 193,082 203,173 238,636
Committed for:
Future projects 219,687 49,941 74,941 80,442 80,442 335,322
Assigned for:
Future equipment 22,000 22,000 24,000 - - -
Unassigned - - - - 3,524,911 4,992,240 6,751,362 7,671,173 7,383,601 9,092,721
Total general fund 3,096,299$ 2,806,738$ 2,725,312$ 3,792,985$ 4,015,394$ 5,263,805$ 7,051,631$ 7,953,518$ 7,680,550$ 9,679,473$
All other governmental funds
Reserved
Special revenue funds 1,183,020$ 1,527,724$ 1,256,954$ 1,112,941$ -$ -$ -$ -$ -$ -$
Unreserved, reported in:
Special revenue funds 846,214 1,666,371 1,933,564 2,693,846 - - - - - -
Nonspendable:
Prepaid items 33,511 60,963 62,635 80,118 83,359 68,718
Restricted for:
Tourism 1,109,365 1,052,546 1,025,891 1,107,520 1,081,009 1,003,636
Future projects 4,647,863 3,594,379 10,370,914 1,751,405 13,632 13,679
Debt service 7,505 22,657 1,482 1,081 20,916 30,468
Education 885,365 758,127 931,094 993,998 1,592,227 1,098,359
Economic development 267,577 178,384 - - - -
Capital projects funds 102,376 3,233,471 323,009 237,177 - - - - 17,713,788 8,501,489
Unassigned - - - - - - - - - -
Total all other governmental funds 2,131,610$ 6,427,566$ 3,513,527$ 4,043,964$ 6,951,186$ 5,667,056$ 12,392,016$ 3,934,122$ 20,504,931$ 10,716,349$
Note:
further consideration, the 4B Economic Development Corporation and Lone Star Public Facility Corporation funds are now classified as blended component units.
The Town implemented GASB Statement No. 54 in fiscal year 2011.
Source: Annual financial reports
Economic Development Funds were classified as special revenue funds through FY 2002 and considered discretely presented component units through FY 2007. Upon
Fiscal Year
EXHIBIT S-4 (CONTINUED)
TOWN OF WESTLAKE
CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
LAST TEN YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING – UNAUDITED)
102
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
REVENUES
Taxes 3,230,605$ 4,783,522$ 4,804,448$ 4,869,361$ 7,000,690$ 6,393,472$ 7,226,180$ 7,722,606$ 8,252,748$ 7,902,983$
Licenses, fees and permits 900,121 1,108,083 860,697 1,746,954 530,646 598,394 944,735 1,175,075 1,200,790 2,715,236
Fines and penalties 651,090 554,376 523,515 647,170 605,705 622,338 695,167 730,441 734,152 796,014
State program revenues 2,387,733 2,673,680 3,163,129 3,687,706 3,945,658 4,369,635 4,696,540 5,269,641 6,173,418 6,543,782
Federal program revenues 49,200 75,207 56,134 199,436 337,508 152,351 81,958 80,103 87,797 98,564
Investment earnings 261,622 188,459 61,224 38,383 46,248 33,353 24,218 26,713 28,904 55,600
Contributions 1,079,768 1,048,308 1,264,262 533,400 - 732,535 5,916,014 82,446 18,785,953 283,684
Other revenues 552,579 607,812 673,400 779,044 980,816 1,323,237 1,274,826 1,665,003 2,471,191 1,542,835
Total revenues 9,112,718 11,039,447 11,406,809 12,501,454 13,447,271 14,225,315 20,859,638 16,752,028 37,734,953 19,938,698
EXPENDITURES
General government 1,385,492 1,516,346 1,519,600 1,644,587 1,733,324 1,878,885 1,910,545 2,236,360 2,411,239 3,280,507
Public safety 1,665,879 1,731,317 1,890,469 1,634,936 1,842,751 2,224,469 1,967,584 2,146,587 2,490,551 2,453,857
Cultural and recreation 86,560 129,641 115,770 105,997 122,400 111,765 113,924 123,541 130,322 185,923
Public works 276,789 846,604 841,822 333,831 326,749 391,115 532,675 615,781 744,028 773,751
Economic development 141,197 495,071 229,907 401,879 706,391 243,939 296,565 147,685 171,757 141,779
Visitor services 226,992 312,777 341,270 420,270 356,365 475,719 521,521 493,082 670,157 725,971
Education 2,672,698 3,305,220 3,722,705 4,138,875 4,884,985 6,193,560 5,762,652 7,143,678 7,938,501 9,245,592
Capital Outlay 836,787 463,918 4,335,114 682,103 1,023,772 1,110,476 7,601,631 9,964,047 5,274,282 9,561,954
Capital Project
Debt service
Principal 470,000 395,000 593,937 563,703 555,000 668,000 2,955,000 1,004,677 1,130,762 1,150,490
Interest and other fiscal charges 1,240,950 923,944 990,641 977,163 1,083,377 952,027 830,425 1,116,489 977,412 947,411
Bond issuance cost - 33,000 - - 36,446 148,891 185,699 69,283 - -
Total expenditures 9,003,344 10,152,838 14,581,235 10,903,344 12,671,560 14,398,846 22,678,221 25,061,210 21,939,011 28,467,235
EXCESS (DEFICIENCY)
OF REVENUES OVER
(UNDER) EXPENDITURES 109,374$ 886,609$ 3,174,426)$( 1,598,110$ 775,711$ 173,531)$( 1,818,583)$( 8,309,182)$( 15,795,942$ 8,528,537)$(
Fiscal Year
EXHIBIT S-4 (CONCLUDED)
TOWN OF WESTLAKE
CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
LAST TEN YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING – UNAUDITED)
103
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
OTHER FINANCING
SOURCES (USES):
Proceeds from sale of land -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
Sale of assets 7,000 - - - - -
Issuance of debt - 2,500,000 117,640 - 2,095,000 - 8,294,800 - - -
Premium on CO issued 284,437 - - -
Refunding bonds issued 7,465,000 - - - - 7,799,196 2,200,000 1,910,000 - -
Premium on refunding bonds issued 37,723 84,598 - -
Payments to bond escrow agent 7,088,706)( - - - - 7,650,305)( - (1,925,315) - -
Proceeds from capital lease 23,000 - - - - - - 239,009 16,740 474,300
Notes payable issued 50,000 - - 401,484 162,059 -
Special item - 67,760 40,959 - - -
Extraordinary item 56,704 124,346)( 40,959)( - - -
Transfers in 1,212,558 2,160,174 2,435,486 1,804,577 7,082,163 2,121,099 2,104,929 3,094,211 4,617,896 2,485,227
Transfers out 1,178,582)( 1,939,355)( 2,374,165)( 1,804,577)( 6,936,947)( 2,075,592)( 2,590,520)( (3,050,812)(4,294,796)(2,220,649)
Total other financing
sources (uses)433,270 2,720,819 178,961 - 2,353,920 137,812 10,331,369 753,175 501,899 738,878
Prior period adjustment - - - - - - - - - -
NET CHANGES IN
FUND BALANCES 542,644$ 3,607,428$ 2,995,465)$( 1,598,110$ 3,129,631$ 35,719)$( 8,512,786$ 7,556,007)$( 16,297,841$ 7,789,659)$(
DEBT SERVICE AS
A PERCENTAGE
OF NONCAPITAL
EXPENDITURES 20.9% 13.6% 15.4% 15.0% 14.1% 12.5% 25.3% 14.4% 12.8% 11.1%
Note: Economic Development Funds were classified as special revenue funds through FY 2002 and considered discretely presented component units through FY 2007. Upon
further consideration, the 4B Economic Development Corporation and Lone Star Public Facility Corporation funds are now classified as blended component units.
Source:Annual Financial Reports
Fiscal Year
EXHIBIT S-5
TOWN OF WESTLAKE
ASSESED VALUE AND ESTIMATED ACTUAL VAL UE OF TAXABLE PROPERTY
LAST SIX FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING – UNAUDITED)
104
Less:Total Taxable Total
Fiscal Real Personal Tax-Exempt Assessed Direct
Year Property Property Property Value Tax Rate
2011 951,070,355$ 70,569,170$ 143,856,142$ 877,783,383$ 0.16010
2012 1,016,474,604 85,329,823 156,315,552 945,488,875 0.15684
2013 1,099,249,031 122,792,343 335,814,215 886,227,159 0.15684
2014 1,091,142,760 151,927,427 346,730,543 896,339,644 0.15634
2015 1,123,354,430 139,936,507 342,248,275 921,042,662 0.15634
2016 1,175,230,336 107,537,466 336,770,136 945,997,666 0.15634
Note:No ad valorem taxes were assessed by the Town of Westlake prior to the fiscal year ended September 30, 2011.
Source:Tarrant County Appraisal District
Denton Central Appraisal District
Appraised Value
EXHIBIT S-6
TOWN OF WESTLAKE
PRINCIPAL PROPERTY TAX PAYERS
CURRENT AND FIVE YEARS AGO
(UNAUDITED)
105
Percentage Percentage
Taxable of Total Town Taxable of Total Town
Assessed Taxable Assessed Taxable
Taxpayer Value Rank Assessed Value Taxpayer Value Rank Assessed Value
BRE Solana LLC 164,977,385$ 1 17.44% Maguire Thomas Partners, etal 116,839,380$ 1 13.31%
FMR Texas, LLC/LTD Partnership 73,943,304 2 7.82% FMR Texas, LLC/LTD Partnership 148,569,643 2 16.93%
DCLI, LLC 51,201,275 3 5.41% Maguire Partners 39,117,985 3 4.46%
Fidelity Investments Inc.19,681,046 4 2.08% Lexington TNI Westlake LP 18,249,200 4 2.08%
Marsh USA Inc 15,402,374 5 1.63% First American Leasing/Real Estate 17,636,457 5 2.01%
Lexington TNI Westlake LP 12,750,000 6 1.35% DCLI, LLC 13,234,691 6 1.51%
Corelogic Solutions LLC 6,494,537 7 0.69% Fidelity Investments 12,277,810 7 1.40%
Prince Whipple Trust 5,802,272 8 0.61% Levi Strauss & Co.8,215,271 8 0.94%
Vaquero Club, Inc.5,383,416 9 0.57% Westlake Terra, LLC 7,400,002 9 0.84%
Wells Vernon III 5,310,200 10 0.56% EMC Corp 6,418,484 10 0.73%
Total 360,945,809$ 38.16% Total 387,958,923$ 44.20%
CY Taxable Value 945,997,666 877,783,383
Source: Tarrant County Appraisal District
Note: (1) Prior to fiscal year ended September 30, 2011, the Town of Westlake did not assess an ad valorem tax.
(2) Total Taxable Assessed Value including real and personal property for tax year 2010 (fiscal year 2011) is $877,783,383.
(3) Total Taxable Assessed Value including real and personal property for tax year 2015 (fiscal year 2016) is $945,997,666.
20112016
EXHIBIT S-7
TOWN OF WESTLAKE
PROPERTY TAX LEVIES AND COLLECTIONS
LAST SIX FISCAL YEARS
(UNAUDITED)
106
Taxes Levied Adjusted Collections
Fiscal for the Adjustments Taxes Levied Percent in Subsequent Percentage
Year Fiscal Year to Levy for Fiscal Year Amount of Levy Years Amount of Levy
2011 1,409,956$ 47,560$ 1,362,396$ 1,356,050$ 99.53%4,136$ 1,360,186$ 99.84%
2012 1,486,968 47,220 1,439,748 1,437,908 99.87%3,359 1,437,908 99.87%
2013 1,398,777 45,297 1,353,480 1,352,097 99.90%3,358 1,352,097 99.90%
2014 1,405,819 44,761 1,361,058 1,350,639 99.23%10,172 1,360,811 99.98%
2015 1,450,674 43,948 1,406,726 1,405,148 99.89%1,005 1,406,153 99.96%
2016 1,482,989 40,244 1,442,745 1,441,536 99.92%- 1,441,536 99.92%
Note: Prior to fiscal year ended September 30, 2011, the Town of Westlake did not assess an ad valorem tax.
Source: Tarrant County Appraisal District
Denton Central Appraisal District
of the Levy to Date
Collected within the
Fiscal Year Total Collections
EXHIBIT S-8
TOWN OF WESTLAKE
DIRECT AND OVERLAPPING PROPERTY TAX RATES
(PER $100 OF ASSESSED VALUE)
LAST SIX FISCAL YEARS
(UNAUDITED)
107
Operating/ Tarrant Tarrant Trophy Total
Fiscal General Debt Service Total (A)Carroll Northwest Keller Denton Tarrant County County Club Direct and
Year Fund Fund Direct ISD ISD ISD County County College Dist Hospital Dist.MUD #1 Overlapping
2011 0.15620 0.00390 0.16010 1.41500 1.37500 1.53060 0.27736 0.26400 0.13764 0.22790 0.19500 5.58260
2012 0.13835 0.01849 0.15684 1.41500 1.37500 1.54000 0.28287 0.26400 0.14897 0.22790 0.17500 5.58557
2013 0.14197 0.01487 0.15684 1.40000 1.37500 1.54000 0.28287 0.26400 0.14897 0.22790 0.13339 5.52896
2014 0.13710 0.01924 0.15634 1.40000 1.45250 1.54000 0.27220 0.26400 0.14950 0.22790 0.13339 5.59583
2015 0.13710 0.01924 0.15634 1.40000 1.45250 1.54000 0.27220 0.26400 0.14950 0.22790 0.13339 5.59583
2016 0.13947 0.01687 0.15634 1.40000 1.45250 1.54000 0.27220 0.26400 0.14950 0.22790 0.13339 5.59583
Notes:Prior to fiscal year ended September 30, 2011, the Town of Westlake did not assess an advalorem tax.
Overlapping rates are those of local and county governments that apply to property owners within the Town of Westlake. Not all overlapping rates apply to all
Town's property owners (e.g., the rates for the counties and school districts apply only to the proportion of the Town's property owners whose property is
located within the geographic boundaries of the county and school district)
Source:Tarrant County Appraisal District
Denton Central Appraisal District
School Districts Counties
City Direct Rates Overlapping Rates
EXHIBIT S-9
TOWN OF WESTLAKE
TAXABLE SALES BY INDUSTRY TYPE
LAST TEN FISCAL YEARS
(UNAUDITED)
108
NAICS Industry Type 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
11 Agriculture, Forestry, Fishing and Hunting 67$ 182$ 210$ $ - 60$ 38$ 163$ 731$ 775$ 2,083$
21 Mining - 2,109 20 400 4,260 3,050 335 15 714 655
22 Utilities 212,336 230,072 186,773 178,693 180,032 171,131 176,622 204,280 191,031 138,331
23 Construction 200,791 998,867 1,043,752 68,306 132,780 139,000 365,049 239,888 216,546 230,067
31-33 Manufacturing 360,010 371,193 430,515 386,492 402,062 526,755 295,660 375,905 234,651 209,128
42 Wholesale Trade 284,082 142,999 138,456 105,557 145,631 134,466 59,571 421,371 515,602 356,946
44-45 Retail 253,293 610,119 648,597 1,097,007 707,553 1,106,427 1,132,811 962,244 1,332,659 415,356
48-49 Transportation and Warehousing 491 791 556 316 1,156 3,662 1,962 3,550 1,107
51 Information 223,672 320,848 377,828 423,834 508,609 367,298 378,221 623,828 567,685 551,172
52 Financial and Insurance 343,446 107,319 68,936 87,188 73,455 27,857 75,529 505,585 295,622 754,386
53 Real Estate and Rental and Leasing 204,398 138,879 154,315 327,207 210,158 215,754 457,693 493,570 708,747 940,971
54 Professional, Scientific, and Technical Services 452,018 199,700 192,008 202,263 231,526 221,331 536,971 242,069 193,145 287,066
56 Admin and Support and Waste Mgmt & Rem Srv 45,809 127,779 22,319 39,539 65,045 39,027 110,686 103,340 50,264 125,033
61 Education Services 317 282 2,980 619,228 1,675,351 356,689 373,117 153,279 201,761 230,775
62 Health Care and Social Assistance - 238 - 170 106 251 11,018 2,887 228
71 Arts, Entertainment and Recreation 224,101 199,876 174,485 158,996 206,050 204,456 184,687 191,343 189,027 201,391
72 Accommodation and Food Services 57,084 130,923 140,344 140,996 175,938 93,123 204,044 221,061 246,755 230,615
81 Other Services (except Public Administration)130,392 18,576 1,756 4,462 4,632 9,805 13,156 17,412 8,965 3,167
92 Public Administration - - - 11 1 135 295 27,243 - -
2,992,307$ 3,599,960$ 3,584,084$ 3,840,735$ 4,723,628$ 3,617,604$ 4,368,521$ 4,796,144$ 4,960,386$ 4,678,477$
Town direct sales tax rate 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%
Note:
Source:Texas State Comptroller reports
Due to confidentiality issues, the names of the ten largest revenue payers are not available. The categories presented are intended to provide alternative information regarding the sources of the
Town's sales tax revenue
Fiscal Year
EXHIBIT S-10
TOWN OF WESTLAKE
RATIOS OF GENERAL BONDED DEBT OUSTANDING
LAST TEN FISCAL YEARS
109
Percentage
General Certificates of Actual
Fiscal Obligation of Taxable Per
Year Bonds Obligation Total Sales Capita
2007 7,365,000$ 11,755,000$ 19,120,000$ 13.05% 27,198$
2008 9,850,000 11,375,000 21,225,000 11.82% 27,038
2009 9,735,000 10,975,000 20,710,000 11.30% 25,791
2010 9,630,000 10,555,000 20,185,000 10.65% 23,831
2011 8,962,656 12,210,000 21,172,656 9.19% 21,343
2012 16,770,000 4,877,000 21,647,000 11.84% 20,369
2013 16,590,000 13,622,000 30,212,000 13.81% 27,251
2014 18,260,000 11,044,000 29,304,000 12.40% 24,748
2015 17,920,386 11,046,131 28,966,517 11.46% 23,527
2016 17,091,659 10,739,306 27,830,965 12.08% 21,760
Notes:Details regarding the Town's outstanding debt can be found in the notes to the financial statements.
There was no debt issued until fiscal year 2002.
See Table 13 for personal income and population data.
General Bonded Debt Outstanding
0
5
10
15
20
25
30
35
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016aillions
Deneral hbligation .onds Certificates of hbligation
EXHIBIT S-11
TOWN OF WESTLAKE
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
(UNAUDITED)
110
General Certificates Other Certificates Total Percentage
Fiscal Obligation of Capital Contractual of Primary of Personal Per
Year Bonds Obligation Leases Loans Obligations Obligation Government Income Capita
2007 7,365,000$ 11,755,000$ 23,000$ -$ 5,822,299$ 24,965,299$ 27%35,513
2008 9,850,000 11,375,000 15,264 - 5,763,022 27,003,286 23%34,399
2009 9,735,000 10,975,000 46,559 - 5,734,191 26,490,750 22%32,990
2010 9,630,000 10,555,000 - - 5,658,888 25,843,888 25%30,512
2011 8,962,656 12,210,000 - 50,000 5,580,380 26,803,036 21%27,019
2012 16,770,000 4,877,000 - 34,075 5,498,668 27,179,743 20%25,576
2013 16,590,000 13,622,000 - 18,150 5,412,149 35,642,299 24%32,150
2014 18,260,000 10,029,800 237,378 437,253 5,320,824 1,014,200 35,299,455 22%29,812
2015 17,480,000 10,199,636 154,347 357,041 5,226,294 1,286,881 34,704,199 21%28,920
2016 17,091,659 9,736,953 563,045 275,101 5,126,958 1,002,353 33,796,069 20%28,308
Note:
See Table 13 for personal income and population data.
Details regarding the Town's outstanding debt can be found in the notes to the financial statements. No debt was issued until fiscal year 2000.
Governmental Activities
Business-Type
Activities
EXHIBIT S-12
TOWN OF WESTLAKE
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
AS OF SEPTEMBER 30, 2016
(UNAUDITED)
111
Amount of
Debt Outstanding As of Percent (1)Amount
Carroll ISD 204,151,047$ 9/30/2016 5.67%11,575,364$
Denton County 602,995,000 9/30/2016 0.02%120,599
Keller ISD 728,705,387 9/30/2016 4.56%33,228,966
Northwest ISD 733,049,556 9/30/2016 1.37%10,042,779
Tarrant County 338,430,000 9/30/2016 0.78%2,639,754
Tarrant County Hospital District 22,335,000 9/30/2016 0.78%174,213
Trophy Club MUD#1 10,845,000 9/30/2016 18.76%2,034,522
Total Overlapping Debt 59,816,197
Town of Westlake Outstanding Debt 33,796,069
Total Direct & Overlapping Debt 93,612,266$
Source: Texas Municipal Report prepared by employees of the Municipal Advisory Council of Texas ("MAC")
Note:
(1)The percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were
estimated by determining the portion of the entity's taxable assessed value that is within the Town's boundaries and dividing it by the
entities' total taxable assessed value.
Overlapping
Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the Town. This schedule estimates
the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the Town of
Westlake. This process recognized that, when considering the Town's ability to issue and repay long-term debt, the entire debt burden
borne by the resident and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and
therefore responsible for repaying the debt, of each overlapping government.
Taxing Body
EXHIBIT S-13
TOWN OF WESTLAKE
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
(UNAUDITED)
112
Per Capita Tarrant County
Calendar Estimated Personal Personal Unemployment
Year Population Income Income Rate
2007 703 93,316,319$ 132,740$ 4.1%
2008 785 115,891,905 147,633 5.1%
2009 803 120,920,285 150,586 8.1%
2010 847 102,852,057 121,431 8.1%
2011 992 126,678,400 127,700 7.9%
2012 1,063 138,423,531 130,254 6.2%
2013 1,109 147,292,890 132,859 6.0%
2014 1,184 160,462,095 135,516 5.0%
2015 1,200 165,871,904 138,227 4.0%
2016 1,270 179,058,721 140,991 4.0%
Sources:
American Community Survey (ACS)
USA.com - Per Capita Income source
North Central Texas Council of Governments/US Census 2010
Tarrant County Unemployment Rate information taken from Texas Workforce Commission.
Population for 2000 is from the 2000 census. Fiscal Years 2001 through 2003 are estimated. The Town assumed the
utilility billing in 2004 and estimated the population by using number of residential water accounts and assuming a 2.5
average household size. 2010 Census shows median household income at $250,000. Due to the influx of residents
coming to Westlake Academy, surveys have shown that there are approximately 1.28 school-age children in each
household; therefore, we will use a 3.23 average household size to calculate population.
703 785 803 847 992 1,063 1,109 1,184 1,200 1,270
0
200
400
600
800
1000
1200
1400
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
9stimated topulation
EXHIBIT S-14
TOWN OF WESTLAKE
PRINCIPAL EMPLOYERS
CURRENT AND NINE YEARS AGO
(UNAUDITED)
113
2007
Percentage Percentage
of Estimated of Estimated
Total Town Total Town
Employer Employees Employment Employer Employees Employment
Fidelity Investments 5,864 49.06%Fidelity Investments 3,100 37.15%
Core Logic 1,790 14.98%First American/Core Logic 3,000 35.95%
Travelocity 880 7.36%Chrysler Financial/TD Auto Finance 325 3.89%
Wells Fargo 617 5.16%Wells Fargo 790 9.47%
Sabre JLL Facilities 500 4.18%McKesson Corporation 215 2.58%
Deloitte 486 4.07%Sonitrol/World Factory 165 1.98%
First American Title 262 2.19%Walco 150 1.80%
Verizon Wireless 446 3.73%Vaquero Club 140 1.68%
Sount Physicians 173 1.45%Marriott Solana Hotel 120 1.44%
Marriott Solana Hotel 143 1.20%Pfizer, Inc.115 1.38%
Vaquero Country Club 135 1.13%Town of Westlake/Westlake Academy 73 0.87%
Westlake Academy 95 0.79%Premier Academy 34 0.41%
All Other Business 562 4.70%Solara Healthcare 28 0.34%
Total 11,953 100% Total 8,255 99%
Note: Information on the Principal Employers from 1999 is not available. Information will be accumulated over the next ten years.
Comparisons will be made to the first available data until ten years can be compared.
Source: Cushman &Wakefield tenant records and contact with employers of the Town
2016
EXHIBIT S-15
TOWN OF WESTLAKE
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES
BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
(UNAUDITED)
114
Function/Program 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
General government
Town manager 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
Assistant Town Manager 0.75 0.90 1.00 0.90
Assistant to Town Manager 1.00 1.00 1.00 1.00 1.00 0.75 0.00 0.00 0.00 0.50
Administrative 0.00 0.00 0.75 0.50 0.75 0.75 1.00 0.50 0.50 0.00
Building official 1.00 1.00 1.33 1.33 1.33 1.33 1.50 1.66 1.66 3.17
Town secretary 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.25 1.25
Facilities/Grounds maintenance 0.50 0.75 1.08 1.08 1.08 0.83 1.00 1.09 1.34 1.58
Municipal 4.00 4.00 4.25 4.50 4.50 3.75 4.75 5.10 5.00 4.60
Finance 3.00 3.00 3.00 3.00 3.00 3.00 3.00 4.00 4.00 4.25
Payroll/Human Resources 0.00 1.00 1.33 1.33 1.33 1.33 2.00 2.00 2.00 2.00
Information Technology 1.00 1.00 1.00
Public safety (EMS)11.00 11.00 9.00 9.00 9.00 9.00 10.00 13.25 14.25 14.25
Culture and recreation 0.50 0.75 0.75 0.75 0.75 0.50 0.75 0.84 0.84 0.84
Public works 1.00 1.50 1.50 1.50 1.50 2.00 3.00 2.66 2.66 2.67
Marketing and public affairs 0.00 0.00 0.00 0.00 0.00 1.00 1.00 2.00 2.00 2.00
Education 36.40 43.00 48.10 55.62 59.44 67.48 76.18 91.18 93.65 95.31
Total 60.40 69.00 74.09 81.61 85.68 93.72 106.93 128.18 132.15 135.32
Source: Prior Town budgets and Academy personnel records
Note: A full time municipal employee is scheduled to work 2,080 hours per year (including vacation and sick leave). Fulltime equivalent employment is calculated by
dividing total labor hours by 2,080. A full time education employee is scheduled to work 1,122 hours per year.
Fiscal Year
EXHIBIT S-16
TOWN OF WESTLAKE
OPERATING INDICATORS
BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
(UNAUDITED)
115
Function/Program 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
General government
Permits issued 162 93 61 44 70 85 132 144 159 218
Permit values 67,101,543$ 188,578,581$ 21,051,297$ 190,388,737$ 21,173,592$ 29,481,047$ 50,544,048$ 59,358,904$ 80,011,354$ 87,307,794$
Police (Contract with Keller PD)
Motor vehicle stops 10,045 10,357 9,247 9,763 9,829 12,221 9,993 9,579 10,432 11,109
Traffic accident investigations 225 208 266 273 348 343 322 341 398 461
Part I crimes 25 26 23 19 30 39 9 15 20 13
DWI arrests 53 45 24 32 80 50 69 55 62 66
Fire/EMS
Fire runs 153 169 118 172 191 181 238 211 211 257
Ambulance runs 251 159 184 187 264 266 286 240 253 288
Inspections 96 132 15 71 71 54 96 286 261 246
Public Works - General
Street resurfacing (LF)5,333 - - - 3,800 30,000 - - - -
Potholes repaired 0.00 20.00 10.00 5.00 36.00 6.00 2.00 6.00 20.00 20.00
Public Works - Utility
Number of water accounts 386 419 437 478 500 568 614 651 713 752
Water main breaks 2 4 5 6 4 4 3 1 1
Avg daily consumption MG (water)0.729 0.999 1.020 0.889 1.200 1.100 1.090 1.045 1.021 1.122
Peak daily consumption MG (water)1.978 2.060 2.740 2.460 2.540 2.600 2.480 2.690 2.770 1.586
System capacity - MG (water)1.685 1.685 1.685 1.685 1.685 1.685 1.685 2.685 2.685 2.685
Water purchased (in gallons x 000)266,158 364,764 372,933 324,843 443,222 407,305 401,457 381,482 372,838 409,817
Water sold (in gallons x 1000)246,280 340,743 313,495 290,000 385,320 376,496 357,297 347,148 360,000 350,000
Wastewater
Number of new sewer connections 235 240 251 254 245 292 325 350 384 403
Avg daily sewage treatment 0.1370 0.124 0.101 0.063 0.163 0.136 0.151 0.208 0.166 0.132
(thousands of gallons)
Source: Various Town departments
Notes: N/A represents information that is unavailable.
Fiscal Year
EXHIBIT S-17
TOWN OF WESTLAKE
CAPITAL ASSET STATISTICS
BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
(UNAUDITED)
116
Function/Program 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Fire
Stations 1 1 1 1 1 1 1 1 1 1
Public Works - Utility
Pump station 1 1 1 1 1 1 1 1 1 1
Lift station 2 2 2 3 3 3 3 3 3 3
Telecommunications Duct Bank (LF)38,303 43,703 49,103 51,803 57,783 57,783 57,783 59,936 66,084 66,084
Telecommunications Duct Bank Manholes 95 104 113 122 122 122 122 122 140 140
Water
Water mains (LF)59,200 64,600 70,000 79,000 130,000 137,891 137,891 142,694 148,117 148,117
Fire hydrants 119 130 130 154 188 191 191 201 214 214
Storage capacity MG 1,685 1,685 1,685 1,685 1,685 1,685 1,685 2,685 2,685 3
Wastewater
Sanitary sewers (LF)35,000 39,300 39,300 49,900 94,000 94,000 94,000 98,964 104,373 104,373
Manholes 250 267 284 304 304 304 304 326 355 355
Public Works - Utility
Streets (miles)10.80 10.80 10.80 10.80 10.80 10.25 10.25 10.25 10.50 1.42
Traffic signals (school zone flashers)2 2 2 2 2 2 2 2 2 2.0
Parks and recreation
Open Space (acres)19 25 25 25 25 25 25 27 27 27.0
Playgrounds 2 2 2 2 2 2 2 2 2.0 2.0
Softball/soccer field 1 1 1 1 1 1 1 1 1.0 1.0
Football field - 1 1 1 1 1 1 1 1.0 1.0
Public trails (miles)3.5 3.5 3.5 3.5 5.0 5.0 5.0 7.0 8.5 8.5
Source: Various Town departments
Note: No capital asset indicators are available for the general government.
Note: The amount of roads decreased in FY 2011-2012 due to a portion of road being dedicated to TxDot
Fiscal Year