HomeMy WebLinkAboutRes 10-07 Approving the Comprehensive Annual Financial Report Year Ending September 30, 2009TOWN OF WESTLAKE
RESOLUTION NO. 10-07
ACCEPTANCE OF THE ANNUAL COMPREHENSIVE ANNUAL FINANCIAL
REPORT PRESENTED BY PATTILLO, BROWN & HILL, L.L.P., CERTIFIED
PUBLIC ACCOUNTANTS, FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009.
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
WHEREAS, the firm of Pattillo, Brown & Hill, L.L.P., Certified Public Accountants,
was selected and approved by the Board of Aldermen on July 12, 2006 for a five year
engagement to include the performance of the Town of Westlake's financial audit for the year
ended September 30, 2009.
NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN
OF WESTLAKE:
SECTION 1: That the Town Council does hereby accept the fiscal year 2008/2009
Comprehensive Annual Financial Report from Pattillo, Brown & Hill, L.L.P., Certified Public
Accountants.
SECTION is Resolution shall become effective upon the date of its passage.
,[ N OF yy
PASSED A '�-YPI2O THIS 22°d DAY OF MARCH, 2010.
ATTEST: �; . Laura Wheat, Mayor
� AS
Kelly�EdwarW, TRMC, Town Secretary Thomas E. BVr, Town Manager
APPROVEUAS TO FORM:
L`£anton Ldy, To Attorney
Town of Westlake,, Texas
Comprehensive Annual Financial Report
For the Fiscal Year Ended September 30, 2009
V 14
Town of Westlake * 3 Village Circle #202 * Westlake, Texas 76262 * www.westlake-tx.org
TOWN OF WESTLAKE
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 2009
Prepared by
Town of Westlake
Finance Department
3 Village Circle, Suite 202
Westlake, TX 76262
TOWN OF WESTLAKE, TEXAS
TABLE OF CONTENTS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009
Page
Number
INTRODUCTORY SECTION
Letter of Transmittal........................................................................... i — vi
Certificate of Achievement........................................................................... vii
Organizational Chart ........................................................................... viii
Principal Town Officials.......................................................................
ix
FINANCIAL SECTION
Independent Auditor's Report ........................................................................................
1-2
Management's Discussion and Analysis.......................................................................
3-12
Basic Financial Statements
Government -wide Financial Statements
Statement of Net Assets..................................................................................
13
Statement of Activities....................................................................................
14-15
Fund Financial Statements
Balance Sheet — Governmental Funds.............................................................
16-17
Statement of Revenues, Expenditures and Changes in
Fund Balances — Governmental Funds ......................................................
18-20
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental
Funds to the Statement of Activities.........................................................
21
Statement of Net Assets — Proprietary Funds ..................................................
22
Statement of Revenues, Expenses and Changes in
Fund Net Assets — Proprietary Funds ........................................................
23
(continued)
TOWN OF WESTLAKE, TEXAS
TABLE OF CONTENTS
(Continued)
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009
Page
Number
FINANCIAL SECTION (Continued)
Fund Financial Statements (Continued)
Statement of Cash Flows — Proprietary Funds ........................................................ 24
Discretely Presented Component Units Financial Statements:
Discretely Presented Component Units - Combining
Statement of Net Assets......................................................... 25 -26
Discretely Presented Component Units - Combining
Statement of Activities........................................................... 27-28
Notes to Financial Statements................................................................................. 29-64
Required Supplementary Information
Schedule of Revenues, Expenditures and Changes in
Fund Balance — Budget and Actual —
GeneralFund............................................................................................. 65
Schedule of Revenues, Expenditures and Changes in
Fund Balance — Budget and Actual —
Visitors Association Fund......................................................................... 66
Schedule of Revenues, Expenditures and Changes in
Fund Balance — Budget and Actual —
WestlakeAcademy.................................................................................... 67
Schedule of Revenues, Expenditures and Changes in
Fund Balance — Budget and Actual —
FM1938 Fund............................................................................... 68
Schedule of Revenues, Expenditures and Changes in
Fund Balance — Budget and Actual —
Property Tax Reduction Fund ....................................................... 69
Schedule of Revenues, Expenditures and Changes in
Fund Balance — Budget and Actual —
Lone Star Public Facility Corporation ........................................... 70
(continued)
TOWN OF WESTLAKE, TEXAS
TABLE OF CONTENTS
(Continued)
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009
Page
Number
FINANCIAL SECTION (Continued)
Required Supplementary Information (Continued)
Schedule of Revenues, Expenditures and Changes in
Fund Balance — Budget and Actual —
4B Economic Development Corporation ...................................... 71
Schedule of Revenues, Expenditures and Changes in
Fund Balance — Budget and Actual —
Vehicle/Equipment Replacement Fund ......................................... 72
Notes to Required Supplementary Information .......................................... 73
Individual Fund Schedule:
Schedule of Revenues, Expenditures and Changes in
Fund Balance — Budget and Actual —
Debt Service Fund......................................................................... 74
STATISTICAL SECTION (Unaudited)
Net Assets by Component.................................................................. 75
Changes in Net Assets........................................................................ 76-77
Fund Balances — Governmental Funds ..................................................... 78
Changes in Fund Balance — Governmental Funds ......................................... 79-80
Taxable Sales by Industry Type............................................................. 81
Ratios of General Bonded Debt Outstanding ............................................... 82
Ratios of Outstanding Debt by Type ......................................................... 83
Demographic and Economic Statistics........................................................ 84
Principal Employers............................................................................. 85
(continued)
TOWN OF WESTLAKE, TEXAS
TABLE OF CONTENTS
(Continued)
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009
Page
Number
STATISTICAL SECTION (Unaudited) (Continued)
Full-time Equivalent Town Government Employees by
Function/Program............................................................................. 86
Operating Indicators by Function/Program................................................... 87
Capital Asset Statistics by Function/Program................................................ 88
COMPLIANCE SECTION
Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance With
Government Auditing Standards............................................................................. 89-90
INTRODUCTORY SECTION
Town of Westlake
March 10, 2010
Honorable Mayor, Council Members and the Citizens of the Town of Westlake,
The Town of Westlake (the "Town") Fiscal and Budgetary Policies requires 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, 2009,
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 is 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 Pattillo, Brown and Hill LLP, Independent
Certified Public Accountants. 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, 2009, are 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 unqualified opinion that the Town's financial statements for the fiscal year ended September 30, 2009,
are 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 the basic
3 Village Circle #202 • Westlake, Texas 76262
Metro: 817-430-0941 • Fax: 817-430-1812 • www.westlake-tx.org
i
financial statements, and combining and individual fund statements and schedules. The MD&A is a
narrative introduction, overview and analysis to accompany the basic financial statements. This letter of
transmittal is designed to compliment, 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
Minutes from downtown Fort Worth, Texas and DFW
International Airport, the Town of Westlake is home to Tows, 4r
several upscale residential communities and Fortune 500 Westlake * , ,
qDallas
companies, all of which share a unique character and 3B 377 VFW 75charm, along with a commitment to excellence. The _ X20 Town is located in northeast Tarrant County and may be 3�°30conveniently accessed by several major thoroughfares, Fort Vk7brlh
including SH 114 and US 377. The Town occupies
approximately 7 square miles and serves a population of about 785 with the average appraised home value
at $1.2 million.
The Town, incorporated in 1956, is considered a Type A general -law municipality and has the power by
state statute to extend its corporate town limits by annexation, which is done periodically when deemed
appropriate by the Council. 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.
The financial reporting entity (the government) includes all funds of the primary government (i.e. the
Town of Westlake), as well as all of 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 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.
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
ii
became the first municipality in Texas to ever receive this special charter designation. The Academy
currently has 485 students and serves Kindergarten thru 12th grade. The Academy will be graduating their
first class during the current fiscal year. 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 Authority -
Ballpark Austin Project, Texas Student Housing Corporation -The Ridge at North Texas Project, Texas
Student Housing Authority -Town Lake Austin Project, Texas Student Housing Authority -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 at the least costs. Major services provided under the general government and
enterprise functions are: Fire and emergency medical services, water and sewer utility services, park and
recreational facilities, street improvements, education and administrative services.
Economic Conditions and Outlook
The information presented in the financial statements is perhaps best understood when it is considered
from the broader of the specific environment within which the Town operates.
Local Economy
There is no question that Texas, and especially the Fort Worth -Dallas Metroplex, has fared better than
most of the country in the current recession. Nonetheless, the Town of Westlake has been affected by the
current economic downturn, as have other municipalities across our area, state, and nation. This current
economic downturn has negatively affected our Town's budget due to our heavy reliance on sales tax
revenue to fund Town services and our debt obligations. Sales tax can be a very viable revenue source
during stable economic times. However, since it is a volitional tax i.e. - paid when someone decides to
buy a service or product), during economic down turn it often decreases.
We did, however, achieve the following milestones during the fiscal year 2008-2009:
• Fidelity Regional Headquarters Phase Il was completed during the current fiscal year. The
construction began during fiscal year 2007 and was completed in fiscal year 2009. This phase
includes a new building addition of approximately 600,000 sq. ft. and employees will be moving to
this Westlake location in the spring of 2010.
• The $5.1 Million Westlake Academy Arts & Sciences Center Construction was started and essentially
completed
• The $15 Million Phase I FM 1938 (Precinct Line Road) Project will begin construction Spring of
2010. All right of way has been acquired, and the utility companies have relocated or are in the
process of relocating their lines at this time. This is a great achievement for our area to serve
Westlake residents and businesses and to become a regional partner for citizens to travel.
• FM 1938 (Precinct Line Rd) Streetscape Concept Plan was completed
iii
• During FY 2007-2008 Deloitte selected Westlake as the site for their learning and leadership center,
Deloitte University. Zoning, economic development agreements, concept plans, and an off-site
development agreement have been approved to move this estimated $300 million project forward and
construction began during FY 2008-2009.
• Oil and Gas Drilling/Production Ordinance was completed and adopted by the Town Council.
• Stagecoach Hills Subdivision Drainage Improvement project was completed.
• Terra Bella Residential Subdivision Completed - This 54.7 acre high-end single family subdivision
was completed during this fiscal year. It features 28 lots along with 22.6 acres of open space
containing approximately one mile of public trails that will connect to public trails in the adjacent
Glenwyck Farms neighborhood.
Sales tax collections increased by 2% for fiscal year 2009. Approximately 10% of the total revenues
received were due to collections based on an economic development agreement and 24% was from audit
collections. When comparing "actual" sales tax revenues with fiscal year 2008, there was a decrease of
approximately 7%.
4,000,000
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
Local Sales and Use Tax by
DollarAmount
�, ��, 5:� 0 ;X 61
■ AucitAdjustments
■ Econ Dev Reccipts
■ salesJUseTax
Receipts
100%
80%
60%
40%
20%
0°%
Local Sales and Use Tax by
Percentage
o�A OD c'1 °rl°� °10�
41 F, 4'� 4�
Long -Term Financial Outlook
nudi(kdjustmerts
■ Econ Dev Receipts
■ 5a es/UseTax
Receipts
The Town of Westlake has developed a comprehensive capital improvements document as well as a
multi-year strategic plan. Such strategic planning assists both the Council and staff in establishing
priorities and allocating resources appropriately.
In the Fiscal Year 2009-2010 budget, the "current reality" of the Town of Westlake is as follows:
• The Town relies primarily on sales tax and one-time permits/fees to fund its operation and debt
service costs.
• Sales tax used to fund General Fund services is declining due to reduced business purchasing
activity and at least one significant business which had generated significant sales tax revenue
being purchased and closed.
iv
• Retail development that could help increase sales tax revenue has not occurred to date and based
on retail industry conditions, is unlikely to occur in the near to medium term.
• A significant source of sales tax is "situs agreements" that generate sales tax revenue from
construction materials purchased for major economic development projects such as Deloitte and
Fidelity, however, these sales tax revenues are one-time revenues.
• Hotel/motel occupancy tax revenue has not grown at an appreciable rate due primarily to
decreased business travel, even though the Marriott Solana expanded their room count two years
ago.
Residential building permits have decreased due to the current economic climate
• Large building permits from major economic development projects such as Fidelity and Deloitte
have helped fund Town services; however, those economic development projects take years to
develop and with the payment by Deloitte of its building permits, there are no further such projects
even in the preliminary planning stages. Again, these are one-time revenue sources.
• In FY 05-06 Westlake voters approved dissolving the Towns 4A half cent economic development
sales tax and replacing it with a half cent sales tax for "property tax reduction". This provided
$2.2 million that was transferred to the General Fund and significantly increased the fund balance.
This funding infusion, while increasing the General Fund's fund balance, has perhaps masked the
volatility and lack of diversity of the Town's on-going revenue structure.
• Fixed debt service costs are a significant part of the Town's cost and were increased in FY 07-08
with the issuance of $2.5 million of general obligation bonds for the new Sam and Margaret Lee
Arts & Sciences Center at Westlake Academy.
♦ Operating costs have increased to fund Town services, including Westlake Academy, as the
Town's population, as well as the Academy campus and enrollment grow. These costs have also
grown due to natural inflationary increases.
• Funding for capital projects identified in the Town's Five (5) Year Capital Improvement Plan are
inadequate to meet basic general government infrastructure needs for streets, drainage, parks,
trails, and public buildings.
• The Town's land use plan, and the zoning that implements that land use plan, features corporate
office campuses and large lot single family residential as the primary land use pattern that is
desired for Westlake. Both of these land uses, particularly the office land use, lend themselves
more to creating a strong ad valorem tax base, not a strong sales tax base. Westlake's certified
2009 taxable assessed valuation in Westlake is $920 million, a large ad valorem tax base for a
community 6.2 square miles in land area and a population of 703 residents.
Clearly, based on these facts, the Town's business model, while having worked previously, shows it will
no longer work based upon current and projected economic realities and assumptions. Under the Town's
present revenue stream, this business model is not sustainable beyond the next three (3) fiscal years.
Realigning this model becomes our critical challenge and choice.
Based on our financial forecast, FY 2009-2010 will be a pivotal year for the Town of Westlake. With a
conservative revenue forecast, conservative expenditures, and making use of some of the General Fund's
fund balance from the $1.4 Deloitte University building permit (one-time revenue), we can weather the
u
next fiscal year. And, if we make good use of FY 2010-2011 to engage Westlake citizens and businesses
in a conversation and dialogue regarding the choices in front of us, then FY 2010-2011 will be the time
where we can begin to position ourselves to achieve our strategic outcome of financial sustainability.
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 2009-2010 Budget. The budget details the
Town's long-term goals and financial policies, and describes program accomplishments and initiatives.
Other Information
Certificate of Achievement
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, 2008. This was
the second year the Town has received this prestigious award. In order 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, the government also received their second GFOA Distinguished Budget Presentation Award
for its annual budget document for the fiscal year beginning October 1, 2008. In order to qualify for the
Distinguished Budget Presentation Award, the Town's budget document had to be judged proficient as a
policy document, a financial plan, an operations guide, and a communications device.
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
Town Manager
A
f
Debbie Piper, CPA
Finance Director
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
Town of Westlake
Texas
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
September 30, 2008
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
E a -
k��ffr OF it 4cyfV
= UNITED STATES y
y
CANADA i o
s CORPORATION h'
y>o� SEAL
chimed President
Executive Director
Citizens of Westlake
Mayor and Council Members
Texas Student Town Town Town
Housing Attorney Manager Secretary
Executive Administrative
Manager Coordinator Planning and Administrative
Development Services/HR
----------------------------------------
Registrar
Receptionist
Assistant t0 the T. Staff
Town Manager
A/P Clerk
Dining Hall Facilities and Parks and
-------------------
Maintenance Recreation
Nurse
Head of Public Interim Fire
Primary Works Chief
PYP Coordinator Utility and Fire and
Town of PYP Teachers Building Tech EMS Staff
-------- --
Westlake PYP Counselors
Municipal Finance
Organizational PYPSpecia/ Ed. Court Department
Chart Librarian
Town Finance
Head of Marshal Assistant
Secondary
Deputy
Clerks
Records &
Revenue Clerk
TOWN OF WESTLAKE
ELECTED OFFICIALS AND APPOINTED OFFICIALS
September 30, 2009
STAN LOWRY
Town Attorney
DEBBIE PIPER, CPA
Finance Director
ELECTED OFFICIALS
Mayor
Mayor Pro -Tem
Council Member
Council Member
Council Member
Council Member
APPOINTED OFFICIALS
AMANDA DeGAN
Municipal Court Administrator
JARROD GREENWOOD
Director of Public Works
TROY MEYER
Facilities Director
Parks/Recreation Director
TOM BRYMER
Town Manager
ix
LAURA WHEAT
LARRY CORSON
TIM BRITTAN
CAROL LANGDON
RICK RENNHACK
REBECCA ROLLINS
KELLY EDWARDS, TRMC
Town Secretary
GINGER AWTRY
Assistant to the Town Manager
EDDIE EDWARDS
Director of Planning and Development
RICHARD WHITTEN
Interim Fire Chief
TODD WOOD, SPHR, IPMA-CP
Director of Human Resources
and Administrative Services
FINANCIAL SECTION
lk*Kl
PATTILLO, BROWN & HILL,L.L.P.
CERTIFIED PUBLIC ACCOUNTANTS ■ BUSINESS CONSULTANTS
INDEPENDENT AUDITOR'S REPORT
To the Honorable Mayor
and Town Council
Town of Westlake, Texas
We have audited the accompanying financial statements of the governmental activities, the
business -type activities, each major fund, and the aggregate discretely presented component units of
the Town of Westlake, Texas (the "Town"), as of and for the year ended September 30, 2009, which
collectively comprise the Town's basic financial statements as listed in the table of contents. These
financial statements are the responsibility of the Town's management. 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 includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit provides a reasonable basis for
our 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,
each major fund, and the aggregate discretely presented component units of the Town of Westlake,
Texas, as of September 30, 2009, and the respective changes in financial position and cash flows,
where applicable, for the year then ended in conformity with accounting principles generally
accepted in the United States of America.
In accordance with Government Auditing Standards, we have issued a report dated March 10,
2010, on our consideration of the Town's internal control over financial reporting and our tests of
compliance with certain provisions of laws, regulations, contracts, grants 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 and should be considered in assessing
the results of our audit.
1
115 SOUTH CHURCH STREET ■ HILLSBORO, TX 76645 ■ (254) 582-2583 ■ FAX: (254) 582-5731 ■ www.pbhcpa.com
AFFILIATE OFFICES: BROWNSVILLE, TX (956) 544-7778 ■ TEMPLE, TX (254) 791-3460 ■ WACO, TX (254) 772-4901
WHITNEY, TX (254) 694-46000 ALBUQUERQUE, NM (505) 266-5904
The Management's Discussion and budgetary comparison information on pages 3 through 12
and page 65 through 73 are not a required part of the basic financial statements but are supplementary
information required by accounting principles generally accepted in the United States of America.
We have applied certain limited procedures, which consisted principally of inquiries of management
regarding the methods of measurement and presentation of the required supplementary information.
However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Town of Westlake, Texas' basic financial statements. The introductory
section, schedules, and statistical section are presented for purposes of additional analysis and are not
a required part of the basic financial statements. The schedules have been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated
in all material respects in relation to the basic financial statements taken as a whole. The introductory
and statistical sections have not been subjected to the auditing procedures applied in the audit of the
basic financial statements and, accordingly, we express no opinion on them.
Pte, t 4mo-1 1 1a- , 1, 7. P,
March 10, 2010
N
MANAGEMENT'S
DISCUSSION AND ANALYSIS
MANAGEMENT'S DISCUSSION AND ANALYSIS
The Town of Westlake is pleased to present this overview and analysis of the financial activities of the
Town for the fiscal year ended September 30, 2009. We encourage readers to consider the information
presented here in conjunction with additional information that we have furnished in our letter of
transmittal, which can be found in the introductory section of this report.
FINANCIAL HIGHLIGHTS
■ The assets of the Town exceeded its liabilities at the close of the most recent fiscal year by
$24,531,396 (net assets). This number must be viewed in the context that the vast majority of
the Town's net assets of $20,593,721 (84%) are capital assets and that most capital assets in
government do not directly generate revenue nor can they be sold to generate liquid capital.
Those net assets restricted for specific purposes totaled $1,773,068 (7%). The remaining
$2,164,607 (9%) are unrestricted net assets and may be used to meet the government's ongoing
obligations to citizens and creditors in accordance with the Town's fund designation and fiscal
policies.
■ At of the close of the current fiscal year, the Town of Westlake's governmental funds reported
combined ending fund balances of $6,238,839, a decrease of $2,995,465 in comparison with
the prior year. Within this total, $1,773,068 is restricted or designated by management or
council.
■ At the end of the current fiscal year, fund balance for the general fund was $2,725,312, a
decrease of $81,426 in comparison with the prior year. Of this total fund balance, $2,532,207
is unreserved. This represents 60% of total general fund expenditures and is equivalent to 220
operating days.
■ The Town's capital assets (net of accumulated depreciation) increased by $5,145,098 which is
primarily attributed to the acquisition of land, equipment, construction of infrastructure and
buildings, and construction in progress.
■ The Town's bonds payable decreased by $515,000 or 2.4%, due to the scheduled repayment of
principal on outstanding bonded debt. The Town did not issue any new bonded debt during the
fiscal year.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis are intended to serve as an introduction to the Town's basic financial
statements. The Town's basic financial statements comprise 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.
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
3
statements are prepared utilizing the economic resources measurement focus and the accrual basis of
accounting.
The statement of net assets presents information on all of the Town's assets and liabilities with the
difference between the two reported as net assets. Over time, increases or decreases in the Town's net
assets serve 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 assets changed
during the most recent fiscal year. All of the revenues and expenses are reported as soon as the
underlying event giving rise to the change occurs, regardless of the timing of related cashflows. Thus
revenues and expenses are reported in this statement for some items that will only result in cash flows
in future fiscal periods.
Both of the government -wide financial statements distinguish functions of the Town that are
principally supported by sales 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 of 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 25-28 of the "Financial Section"
for detail on these entities. In addition, the Town has the following blended component units: Lone
Star Public Facility 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 that is 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. The Town had only "Governmental funds and Proprietary funds" for the
year ended September 30, 2009.
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
C!
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 fund balance sheet and in the governmental fund statement of revenues, expenditures,
and changes in fund balances for the General, Visitors Association, Westlake Academy, Debt Service,
Capital Projects, FM 1938, Property Tax Reduction, Lone Star Public Facility Corporation, Westlake
4B Economic Development Corporation and Vehicle/Equipment Replacement funds, all of which are
presented as major funds.
The Town adopts an annual appropriated budget for all funds, except the Capital Projects fund which
is a project -length based budget. 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 16-21 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 costs of providing the services to the general public on a
continuing basis is financed through user 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 22 - 24 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 does not currently have any fiduciary funds.
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 29 - 64 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 65 - 74.
5
GOVERNMENT -WIDE FINANCIAL ANALYSIS
As noted earlier, net assets may serve over time as a useful indicator of the government's financial
position. In the case of the Town, assets exceeded liabilities by $24,531,396 at the close of the most
recent fiscal year.
The largest portion of the Town's net assets, $20,593,721 (84%), 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 assets, $1,773,068 (7%), represents resources that are subject
to external restrictions on how they may be used. The remaining balance of unrestricted net assets,
$2,164,607 (9%), may be used to meet the government's ongoing obligations to citizens and creditors.
Condensed Statement of Net Assets
Governmental activities: Governmental activities increased the Town's net assets by $2,973,685. Net
assets invested in capital assets, net of related debt increased by $2,930,946 primarily due to the
addition of approximately $300 thousand for building improvements and machinery/equipment, and
$2,059,624 increase in land due to the contribution of Terra Bella open space and right of way related
to FM 1938.
C
Governmental Activities
Business -type
Activities
Totals
2009
2008
2009
2008
2009
2008
Current and other assets
$ 7,594,613
$ 10,728,885
$ 1,726,542
$ 1,394,559
$ 9,321,155
$ 12,123,444
Capital assets
33,197,958
27,646,486
13,083,223
13,489,597
46,281,181
41,136,083
Total Assets
40,792,571
38,375,371
14,809,765
14,884,156
55,602,336
53,259,527
Long-term liabilities
outstanding
19,721,208
20,233,906
5,658,888
5,698,939
25,380,096
25,932,845
Other liabilities
1,943,421
1,987,208
3,747,423
3,455,922
5,690,844
5,443,130
Total Liabilities
21,664,629
22,221,114
9,406,311
9,154,861
31,070,940
31,375,975
Net Assets:
Invested in capital assets,
net of related debt
13,244,689
10,313,743
7,349,032
7,726,576
20,593,721
18,040,319
Restricted
1,773,068
2,004,763
-
-
1,773,068
2,004,763
Unrestricted
4,110,185
3,835,751
(1,945,578)
(1,997,281)
2,164,607
1,838,470
Total Net Assets
$ 19,127,942
$ 16,154,257
$ 5,403,454
$ 5,729,295
$ 24,531,396
$ 21,883,552
Governmental activities: Governmental activities increased the Town's net assets by $2,973,685. Net
assets invested in capital assets, net of related debt increased by $2,930,946 primarily due to the
addition of approximately $300 thousand for building improvements and machinery/equipment, and
$2,059,624 increase in land due to the contribution of Terra Bella open space and right of way related
to FM 1938.
C
Change in Net Assets
Excess (deficiency)
before transfers
Governmental Activities
Business -type
Activities
Totals
2,563,336
723,064
2009
2008
2009
2008
2009
2008
Revenues:
Change in net assets
2,889,177
1,083,333
(325,841)
( 360,269)
2,563,336
Program revenues:
Prior period adjustment
84,508
398,967
-
-
84,508
Fees, fines and
Net assets, beg. of year
16,154,257
14,671,957
5,729,295
6,089,564
21,883,552
charges for services $
1,478,234 $
1,581,684
$ 2,345,236
$ 2,039,406 $
3,823,470 $
3,621,090
Operating grants
and contributions
1,522,935
1,296,378
-
-
1,522,935
1,296,378
Capital grants and
contributions
2,059,624
-
-
169,034
2,059,624
169,034
General revenues:
Taxes
Sales taxes
3,664,409
3,590,575
-
-
3,664,409
3,590,575
Hotel occupancy taxes
497,769
527,662
-
-
497,769
527,662
Mixed beverage taxes
17,869
16,177
-
-
17,869
16,177
Franchise taxes
624,401
649,108
-
-
624,401
649,108
Unrestricted grants
2,960,590
2,500,817
-
-
2,960,590
2,500,817
Interest on investments
61,224
188,459
7,858
32,103
69,082
220,562
Miscellaneous
568,782
564,973
77,266
44,071
646,048
609,044
Total revenues
13,455,837
10,915,833
2,430,360
2,284,614
15,886,197
13,200,447
Expenses:
General government
2,203,882
2,031,460
-
-
2,203,882
2,031,460
Public safety
1,939,441
1,795,782
-
-
1,939,441
1,795,782
Culture and recreation
115,770
129,641
-
-
115,770
129,641
Economic development
207,044
473,451
-
-
207,044
473,451
Public works
1,028,934
1,013,804
-
-
1,028,934
1,013,804
Visitor services
341,270
312,777
-
-
341,270
312,777
Education
3,722,705
3,305,220
-
-
3,722,705
3,305,220
Interest on long-term debt
1,068,935
991,184
-
-
1,068,935
991,184
Water and sewer
-
-
2,694,407
2,410,765
2,694,407
2,410,765
Cemetery
-
-
473
13,299
473
13,299
Total expenses
10,627,981
10,053,319
2,694,880
2,424,064
13,322,861
12,477,383
Excess (deficiency)
before transfers
2,827,856
862,514
(264,520)
( 139,450)
2,563,336
723,064
Transfers
61,321
220,819
(61,321)
( 220,819)
-
-
Change in net assets
2,889,177
1,083,333
(325,841)
( 360,269)
2,563,336
723,064
Prior period adjustment
84,508
398,967
-
-
84,508
398,967
Net assets, beg. of year
16,154,257
14,671,957
5,729,295
6,089,564
21,883,552
20,761,521
Net assets, end of year
$ 19,127,942 $
16,154,257
$ 5,403,454
$ 5,729,295 $
24,531,396
$ 21,883,552
Total revenues (including transfers) for governmental activities increased when compared to the prior
year by $2,380,506. General revenue had an increase of $357,273 while program revenues had an
increase of $2,182,731. These increases were primarily due to the following factors:
Program revenues - Charges for services decreased by $103,450; Operating Grants and
Contributions increased by $226,557 and Capital Grants and Contributions increased by
$2,059,624 which was made up of the conveyance of Terra Bella open space and FM 1938 right of
way.
General revenues - Sales tax increased by $73,834. This increase was made up of the following
components: decrease in "actual" sales taxes of $187,878, decrease of $534,035 in our economic
development revenue, and an increase of $795,747 in audit collections; Hotel occupancy taxes
7
decreased by $29,893; Franchise tax decreased by $24,707; Unrestricted grants related to the
Academy increased $459,773 due to the addition of students; Interest income decreased by $127,
235 due to decrease in rates as well as decrease in investments due to the completion of the Arts &
Sciences Center; and Miscellaneous increased by $3,809.
Expenses - Total expenses for governmental activities increased by $574,662 or approximately
6%. The components of this increase are as follows:
• General Government increase of $172,422 — major portion of this was payroll; Town
manager was here for 12 months in FY 2009 and only 5 months in FY 2008
• Public safety increase of $143,659 - Payroll expense
• Economic development decrease of $266,407 based on a contractual obligation
reimbursement. The project was nearing completion during the current fiscal year;
therefore, payment was not as much as in prior year.
• Visitor services increase of $28,493 — mostly due to contracted services with a Public
Relations firm
• Education increase of $417,485 due to more state funding based on the additional students
attending the Academy when one additional grade was added
• Interest on long-term debt increase of $77,751
Business -type activities: Business -type activities decreased the Town's net assets by $325,841.
Expenses exceeded revenues by $264,520 based on the following: additional accounts related to
water/sewer as well as additional water/sewer revenue due to a dryer summer during the current fiscal
year attributed to an increase in revenue of $145,746 in charges for services but expenses also
increased $270,816 of which $221,111 was attributed to bad debt expense related to several accounts.
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, unreserved fund balance may serve as a useful
measure of a town's net resources available for spending at the end of the fiscal year.
At the end of the current fiscal year, the Town's governmental funds reported combined ending fund
balances of $6,238,839 a decrease of $2,995,465 in comparison with the prior year. See below for the
major reasons for this decrease:
General Fund - Fund balance decreased by $81,426. Transfers to other operating funds totaled
$278,417. See page 58 of the "Notes to the Financial Statements" for detailed information.
Visitors Association Fund - The net decrease in fund balance of $206,208 was due primarily to the
budgeted transfer out to the Debt Service Fund.
Capital Projects Fund — The net decrease in fund balance is $2,910,462. The major portion of the
decrease was due to the completion of the Arts & Sciences Center.
Property Tax Reduction Fund — Fund balance increased by $562,369. This fund represents '/2
cent in sales tax revenues and is used to supplement various funds. Funds were transferred from
this account to General Fund and Capital Projects for FY 2009. Debt service payments were
supplemented from the Visitors Association Fund for FY 2009 when in prior years the Property
Tax Reduction Fund supplemented these payments.
413 Economic Development Corporation Fund — Fund balance decreased by $215,485. $1,132,726
was transferred to debt service for the annual bond payments.
Proprietary funds. The Town's proprietary fund statements provide the same type of information
found in the government -wide financial statements but in more detail.
General Fund Budgetary Highlights
The General Fund budget was amended in total to increase the net change in fund balance from
$58,305 to $1,147,749 a total of $1,089,444.
• Net revenues were increased by $910,799 (19%). A portion of this is attributed to the increase
of $937,395 in building permits and fees because fees were recalculated with actual numbers
based on a large project with the remaining decrease of $26,596 being the net effect of several
amendments to revenue accounts.
• Expenditures were decreased by $299,930 (6%) of which $289,453 was due to construction not
beginning on Deloitte University when anticipated.
• Transfers out were increased by $141,285 (87%) of which $149,185 represented restricted funds
that were transferred to the Capital Projects Fund.
The general fund's actual revenue collections fell short of the estimated by $1,606,012 million with the
major variance being the building permits & fees unfavorable variance of $1,698,873 which was due to
the fact a large payment was anticipated prior to year-end which wasn't received until FY 2010.
Actual year-end expenditures were $385,470 less that the revised budget total. The major variances
included $85,000 because the EMS was not fully staffed throughout the year, $57,000 for building
repairs not needed during FY 2009, $44,000 in building inspections and $42,000 in public works
engineering.
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, 2009, totaled $46,281,181 (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 $5,145,098 or 12%
Major capital asset events occurring during the current fiscal year included the following:
• Developers contributed $1,198,465 in open space
• $861,159 right of way was conveyed to the Town
• Arts & Sciences Center was completed and capitalized at $4,468,406
• Capital assets additions for governmental operations included, but are not limited to, audio
visual equipment for court/council chambers and Arts & Sciences Center totaled $93,940
• Furniture and fixture additions of $153,994 for the Arts & Sciences Center
E
• $55,000 was expensed to complete a portion of the Glenwyck Farms trail extension
• Capital asset additions for business -type activities included, but are not limited to, purchase of
water taps, a generator and the automation of water meters.
Capital Assets (Net of Accumulated Depreciation)
Total
2009 2008
$ 11,530,663 $ 9,386,531
12,153,827
Governmental Activities
Business -type
Activities
3,252,543
2009
2008
2009
2008
Land $
11,530,663 $
9,386,531
$ -
$ -
Capital improvements
1,839,904
1,969,796
10,313,923
10,616,292
Buildings
18,864,812
14,821,758
-
-
Machinery & equipment
827,309
837,080
2,425,234
2,458,349
W/W treatment rights
-
-
344,066
375,826
Information/Technology
-
17,476
-
-
Construction in progress
135,270
613,845
-
39,130
Total capital assets $
33,197,958 $
27,646,486
$ 13,083,223
$ 13,489,597
Total
2009 2008
$ 11,530,663 $ 9,386,531
12,153,827
12,586,088
18,864,812
14,821,758
3,252,543
3,295,429
344,066
375,826
-
17,476
135,270
652,975
$ 46,281,181 $ 41,136,083
Additional information on the Town's capital assets can be found in Note III on pages 42-43 of this
report.
Long-term debt - At the end of the current fiscal year, the Town had total long-term debt outstanding
of $26,051,136. Of this amount, $20,710,000 represents bonded indebtedness, $201,402 economic
development reimbursement; $46,559 represents capital leases, and $5,734,191 business -type debt.
During the fiscal year 2008-2009, the Town's total debt decreased by $491,063. This decrease is
primarily attributed to the principal payments on the bonded indebtedness and the lease of Apple
computers for Westlake Academy.
Standard & Poor's Ratings Services, a division of the McGraw-Hill, Inc. rates the Town's debt at AA-.
Additional information about the rating agency or the significance of the rating provided may be
obtained from each Standard & Poor's web site.
Additional information on the Town's long-term debt can be found in Note III on pages 47-50.
Total long-term debt $ 20,316,945 $ 20,779,177 $ 5,734,191 $ 5,763,022 $ 26,051,136 $ 26,542,199
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS
The Town continues its conservative budget approach in fiscal year 2009-2010. Due to the continued
uncertainty of commercial development in Westlake, there will be a continued emphasis of
maintaining basic service levels without implementing a property tax. This philosophy has enabled
Westlake staff to prioritize short and mid-term goals according to available resources.
10
Governmental Activities
Business -type Activities Total
2009
2008
2009 2008 2009
2008
General obligation bonds
$ 9,735,000 $
9,850,000 $
- $ - $ 9,735,000 $
9,850,000
Certificates of obligation
10,975,000
11,375,000
- - 10,975,000
11,375,000
Contractual obligations
201,402
224,265
5,734,191 5,763,022 5,935,593
5,987,287
Capital leases
46,559
15,264
- - 46,559
15,264
Deferred amounts
(641,016)
(685,352)
- - (641,016)
(685,352)
Total long-term debt $ 20,316,945 $ 20,779,177 $ 5,734,191 $ 5,763,022 $ 26,051,136 $ 26,542,199
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS
The Town continues its conservative budget approach in fiscal year 2009-2010. Due to the continued
uncertainty of commercial development in Westlake, there will be a continued emphasis of
maintaining basic service levels without implementing a property tax. This philosophy has enabled
Westlake staff to prioritize short and mid-term goals according to available resources.
10
GENERAL FUND
Revenue budget has decreased from the final 2009 audited revenues by approximately $629
thousand. The larger items contributing to this include:
o A decrease of $355 thousand in building permits and inspection plan reviews with a
major portion of this being due to housing start reduction of approximately 60%.
o A decrease of $70 thousand in development fees based on a reduction of anticipated
development activity.
o A reduction in estimated sales tax revenues of approximately $249 thousand based on
analysis and the fact that a $350 thousand audit (General Fund's 1% portion) was
received in the FY 2009. We are anticipating approximately $452 thousand based on an
economic development agreement for FY 2010.
Payroll amounts available for appropriation are $1.96 million, a decrease of approximately $48
thousand from the fiscal year audited expenditures of $2.0 million. The larger items
contributing to this include:
o A decrease of $40 thousand in Fire/Emergency Department due to moving a Lieutenant
to Interim Fire Chief and not hiring a Director of Public Safety.
Operating Expenditure amounts available for appropriation are $2.6 million, an increase of
approximately $496 thousand from the fiscal year audited expenditures of $2.1 million. The
larger items contributing to this include:
o An increase of $452 thousand in Economic Development for Deloitte. Construction
began and the Town is anticipating this one-time expenditure for FY 2010.
o An increase of $25 thousand in Planning and Development consultant fees due to the
Deloitte construction.
o An increase of $17 thousand in Public Works engineering fees.
VISITORS ASSOCIATION FUND
• Revenue budget has decreased from the final 2009 audited revenues by approximately $62
thousand. The larger items contributing to this include:
o A decrease of $47.7 thousand in hotel tax revenues. We had budgeted this revenue to be
flat based on FY 2009 budget of $450K but received $47.7 more than anticipated during
FY 2009.
o A reduction in Arbor Day income of $4.7 thousand. This amount is offset by a decrease
in anticipated expenditures. This reduction is due to the timing of the event. One event
was held on October 4, 2008 and another on September 26, 2009; therefore, the revenues
and expenditures were based on two events instead of one for FY 2009. FY 2010's
event will be held September 25, 2010.
o A reduction in Historical Board income of $7.1 thousand. This was the first year for the
sale of the history book; therefore, sales will subside in subsequent years.
o A reduction in interest earned of $4.1 thousand because of current interest rates and the
reduction of cash funds due to the supplemental payment of bonds in the prior fiscal
year.
Payroll amounts available for appropriation are $182 thousand, an increase of approximately
$48 thousand from the fiscal year audited expenditures of $134 thousand. The larger items
contributing to this include:
o Addition of administrative assistant to Facilities and Human Resources departments with
a portion of the payroll being allocated to Visitors Association Fund.
o Increase of allocation for the Finance Department personnel based on percentage of time
spent related to this fund.
11
• Operating Expenditure amounts available for appropriation are $242 thousand, an increase of
approximately $35 thousand from the fiscal year audited expenditures of $206 thousand. The
larger items contributing to this include:
o An increase of $60 thousand in Marriott Marketing/Transportation - no funds were
requested or expended in the prior year.
o A decrease of $29 thousand in Historical Board expenditures — purchase of history books
in the prior year.
• Transfers out have decreased by $170 thousand due to a portion of the debt service payment for
the Westlake Academy facility being made from this fund in FY 2009 and not allocated during
FY 2010. The current year anticipates a transfer out of $ l OOK for capital.
UTILITY FUND
• Revenue budget has increased from the final 2009 audited revenues by approximately $103
thousand. The larger items contributing to this include:
o An increase of $135 thousand in water revenue based on trend of previous years.
o A decrease of $37 thousand in sewer revenue based on projected revenue at time of
budget preparation; budget will be amended to increase this amount based on more
current revenue received.
• Payroll amounts available for appropriation are $224 thousand, an increase of approximately
$27 thousand from the fiscal year audited expenditures of $196 thousand. The larger items
contributing to this include:
o Addition of administrative assistant to Facilities and Human Resources departments with
a portion being allocated to the Utility Fund.
o Increase of allocation for Finance Department personnel based on percentage of time
spent on utility related business.
• Operating Expense amounts available for appropriation are $1.9 million, an increase of
approximately $500 thousand from the fiscal year. The larger items contributing to this
include:
o An increase of $148 thousand in TRA Wastewater treatment due to unit cost increase per
TRA documentation (new bond sale).
o An increase of $300,583 thousand in water purchases and peak payments based on
historical trends.
• Capital Projects budget increased approximately $500 thousand due to the following projects:
N-1 Sewer line inflow & infiltration repairs and transfer and Stagecoach Hills waterline
connection.
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.
12
BASIC FINANCIAL STATEMENTS
TOWN OF WESTLAKE, TEXAS
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2009
LIABILITIES
Accounts payable
928,086
Primary Government
1,027,462
3,510,741
Customer deposits payable
-
125,540
125,540
Discretely
Unearned revenue
Governmental
Business -type
438,052
Presented
Accrued interest payable
Activities
Activities
Total
Component Units
ASSETS
Cash and cash equivalents
$ 5,556,288
$ 1,267,660 $
6,823,948
$ 4,818,239
Accounts receivables (net of allowance)
1,270,576
582,090
1,852,666
884,516
Internal balances
339,179
( 339,179)
-
-
Inventories
-
99,371
99,371
-
Other assets
26,054
-
26,054
94,180
Restricted cash and cash equivalents
38,840
116,600
155,440
6,305,234
Deferred charges
363,676
-
363,676
-
Capital assets:
1,244,946
-
1,244,946
-
Land
11,530,663
-
11,530,663
12,070,678
Buildings and improvements
25,555,631
12,853,855
38,409,486
98,734,855
Wastewater treatment rights
-
635,199
635,199
-
Machinery and equipment
2,253,673
3,459,821
5,713,494
5,059,730
Construction in progress
135,270
-
135,270
-
Less: accumulated depreciation
( 6,277,279)
( 3,865,652) (
10,142,931)
( 28,458,282)
Total capital assets
33,197,958
13,083,223
46,281,181
87,406,981
Intangible assets:
Debt issue costs, net of amortization
-
-
-
4,156,791
Total assets
40,792,571
14,809,765
55,602,336
103,665,941
LIABILITIES
Accounts payable
928,086
99,376
1,027,462
3,510,741
Customer deposits payable
-
125,540
125,540
-
Unearned revenue
-
438,052
438,052
3,971,284
Accrued interest payable
419,598
3,009,152
3,428,750
11,876,396
Noncurrent liabilities:
Due within one year
595,737
75,303
671,040
62,181,016
Due in more than one year
19,721,208
5,658,888
25,380,096
56,631,792
Total liabilities
21,664,629
9,406,311
31,070,940
138,171,229
NET ASSETS
Invested in capital assets, net of related debt
13,244,689
7,349,032
20,593,721
( 29,945,827)
Restricted for:
Debt service
-
-
-
( 4,076,156)
Tourism
1,244,946
-
1,244,946
-
Future projects
361,857
-
361,857
-
Court security and technology
154,265
-
154,265
-
Capital expenses
12,000
-
12,000
-
Unrestricted
4,110,185
( 1,945,578)
2,164,607
( 483,305)
Total net assets
$ 19,127,942
$ 5,403,454
$ 24,531,396
$L_34,505,288)
The accompanying notes are an integral part of these financial statements.
13
TOWN OF WESTLAKE, TEXAS
STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009
Functions/Programs
Expenses
Primary government:
Governmental activities:
General government
$ 2,203,882
Public safety
1,939,441
Culture and recreation
115,770
Economic Development
207,044
Public works
1,028,934
Visitor Services
341,270
Education
3,722,705
Interest on long-term debt
1,068,935
Total governmental activities
10,627,981
Business -type activities:
Water utilities
Cemetery
Total business -type activities
Total primary government
Component units:
Business -type activities
Total component units
Program Revenues
Operating Capital
Charges for Grants and Grants and
$ 677,948 $ 886,400 $ 1,198,465
107,634 - -
594,338 377,862 861,159
98,314 258,673 -
1,T / U,GJ-f 1,JLL,JJJ G,VJ I,VL-f
2,694,407 2,345,236 -
2,694,880 2,345,236 - -
$ 13,322,861 $ 3,823,470 $ 1,522,935 $ 2,059,624
$ 24,479,122 $ 18,141,164 $ - $ -
$ 24,479,122 $ 18,141,164 $ - $ -
General revenues:
Sales taxes
Hotel occupancy taxes
Mixed beverage taxes
Franchise taxes
Unrestricted grants
Realized gain on liquidation
Interest income
Miscellaneous
Transfers
Total general revenues and transfers
Change in net assets
Net assets, beginning
Prior period adjustment
Net assets, ending
The accompanying notes are an integral part of these financial statements.
14
Net (Expense) Revenue and
Changes in Net Assets
Primary Government Discretely
Governmental Business -type Presented
Activities Activities Total Component Units
$ 558,931
$ -
$
558,931 $ -
( 1,831,807)
-
(
1,831,807) -
( 115,770)
-
(
115,770) -
( 207,044)
-
(
207,044) -
804,425
-
2,960,590
804,425 -
( 341,270)
-
(
341,270) -
( 3,365,718)
-
(
3,365,718) -
( 1,068,935)
-
(
1,068,935) -
( 5,567,188)
-
(
5,567,188) -
8,456,365
23,803
8,480,168
-
( 349,171)
(
349,171) -
-
( 473)
(
473) -
-
( 349,644)
(
349,644) -
( 5,567,188)
( 349,644)
(
5,916,832) -
$( 6,337,958)
$( 6,337,958)
3,664,409
-
3,664,409
-
497,769
-
497,769
-
17,869
-
17,869
-
624,401
-
624,401
-
2,960,590
-
2,960,590
-
-
-
-
9,571,664
61,224
7,858
69,082
90,101
568,782
77,266
646,048
-
61,321
( 61,321)
-
-
8,456,365
23,803
8,480,168
9,661,765
2,889,177
( 325,841)
2,563,336
3,323,807
16,154,257
5,729,295
21,883,552
( 37,829,095)
84,508
-
84,508
-
$ 19,127,942
$ 5,403,454
$ 24,531,396
$( 34,505,288)
15
TOWN OF WESTLAKE, TEXAS
BALANCESHEET
GOVERNMENTAL FUNDS
SEPTEMBER 30, 2009
Capital assets used in governmental activities are not financial resources and, therefore, are not reported in tl
funds.
Long-term liabilities are not due and payable in the current period and therefore are not reported in the fun(
Certain other long-term assets are not available to pay current period expenditures and therefore are n
reported in the funds
Net assets of governmental activities
The accompanying notes are an integral part of these financial statements
16
Debt
Visitors
Westlake Service
General
Association
Academy Fund
ASSETS:
Cash and cash equivalents
$ 2,067,774
$ 721,419
$ 498,726 $ -
Receivables
Accounts receivable
535,917
76,626
116,593 -
Due from other fundE
381,114
462,848
- -
Other assets
3,418
-
22,636 -
Restricted cash and investments
38,840
-
- -
TOTAL ASSETS
$ 3,027,063
$ 1,260,893
$ 637,955 $ -
LIABILITIES AND FUND BALANCE:
Liabilities:
Accounts payable
255,922
7,397
133,302 -
Due to other funds
45,829
8,550
-
Total liabilities
301,751
15,947
133,302 -
Fund Equity:
Fund balance
Reserved to promote tourisn
-
1,244,946
- -
Reserved for future project;
38,840
-
- -
Reserved for court securio
and technology
154,265
-
- -
Reserved for capital expenditure:
-
-
- -
Unreserved and undesignated
2,532,207
-
504,653 -
Total fund equity
2,725,312
1,244,946
504,653 -
TOTAL LIABILITIES AND FUND EQUITY
$ 3,027,063
$ 1,260,893
$ 637,955 $ -
Capital assets used in governmental activities are not financial resources and, therefore, are not reported in tl
funds.
Long-term liabilities are not due and payable in the current period and therefore are not reported in the fun(
Certain other long-term assets are not available to pay current period expenditures and therefore are n
reported in the funds
Net assets of governmental activities
The accompanying notes are an integral part of these financial statements
16
Capital FM 1938
Projects Fund
Property Lone Stay 4B Economic Vehicle/Equip.
Tax Reduction Public Facility Development Replacement
Fund Corporation Corporation Fund
Total
Governmental
Funds
$ 707,981 $ 8 $ 1,243,056 $ 13,569 $ 253,755 $ 50,000 $ 5,556,288
- 126,900 175,264 - 175,264 - 1,206,564
83,022 25,814 - - 297,308 12,000 1,262,106
- - - - - - 26,054
- - - - - - 38,840
$ 791,003 $ 152,722 $ 1,418,320 $ 13,569 $ 726,327 $ 62,000 $ 8,089,852
378,751 152,714 - - - - 928,086
89,243 - 350,286 - 429,019 - 922,927
467,994 152,714 350,286 - 429,019 - 1,851,013
1,244,946
323,009 8 - - - - 361,857
- - - - - - 154,265
- - - - 12,000 12,000
- - 1,068,034 13,569 297,308 50,000 4,465,771
323,009 8 1,068,034 13,569 297,308 62,000 6,238,839
$ 791,003 $ 152,722 $ 1,418,320 $ 13,569 $ 726,327 $ 62,000
33,197,958
( 20,372,867)
64,012
$ 19,127,942
17
TOWN OF WESTLAKE, TEXAS
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009
The accompanying notes are an integral part of these financial statements.
18
Visitors
Westlake
General
Association
Academy
REVENUES:
Taxes
Sales
$ 1,832,205
$ -
$ -
Mixed beverage
17,869
-
-
Hotel occupancy
-
497,769
-
Franchise
624,401
-
-
State program revenues
-
-
3,163,129
Federal program revenues
-
-
56,134
Interest income
21,155
7,835
4,617
Building permits and fee!
848,697
-
-
Fines and penalties
523,515
-
-
Contributions
38,840
-
-
Miscellaneous
98,242
34,019
534,375
Total revenues
4,004,924
539,623
3,758,255
EXPENDITURES:
Current
General government
1,519,600
-
-
Public safety
1,890,469
-
-
Culture and recreatior.
115,770
-
-
Public works
378,508
-
-
Economic Developmeni
229,907
-
-
Visitor services
-
341,270
-
Education
-
-
3,722,705
Capital outlay
62,278
-
-
Debt service
Principal retirement
-
-
78,937
Interest and other fiscal charges
-
-
4,054
Total expenditures
4,196,532
341,270
3,805,696
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
( 191,608)
198,353
( 47,441)
OTHER FINANCING SOURCES (USES)
Transfers in
388,599
-
-
Issuance of debt
-
-
117,640
Transfers out
( 278,417)
( 404,561)
( 200,000)
Total other financing sources (uses)
110,182
( 404,561)
( 82,360)
NET CHANGE IN FUND BALANCES
( 81,426)
( 206,208)
( 129,801)
FUND BALANCES, BEGINNING
2,806,738
1,451,154
634,454
FUND BALANCES, ENDING
$ 2,725,312
$ 1,244,946
$ 504,653
The accompanying notes are an integral part of these financial statements.
18
Debt
Property
Vehicle/Equip.
Lone Star
Service
Capital
FM 1938
Tax Reduction
Replacement
Public Facility
Fund
Projects
Fund
Fund
Fund
Corporation
$ -
$ 916,102
$ -
$ -
-
21,640
-
4,728
-
110
-
-
-
-
12,000
-
-
864,484
360,938
-
-
-
-
6,764
-
-
-
-
-
892,888
360,938
920,830
12,000
110
-
-
463,314
-
-
-
-
4,270,882
-
-
1,954
-
515,000
-
-
-
-
-
986,587
-
-
-
-
-
1,501,587
4,270,882
463,314
-
1,954
-
( 1,501,587)
( 3,377,994)
( 102,376)
920,830
10,046
110
1,501,587
467,532
25,814
-
51,954
-
-
-
-
( 358,461)
-
-
1,501,587
467,532
25,814
( 358,461)
51,954
-
-
( 2,910,462)
( 76,562)
562,369
62,000
110
-
3,233,471
76,570
505,665
-
13,459
$ -
$ 323,009
$ 8
$ 1,068,034
$ 62,000
$ 13,569
19
TOWN OF WESTLAKE, TEXAS
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009
(continued)
4B Economic
Development
Corporation
REVENUES:
Taxes
Sales
Mixed beverage
Hotel occupancy
Franchise
State program revenues
Federal program revenues
Interest income
Building permits and fee!
Fines and penalties
Contributions
Miscellaneous
Total revenues
EXPENDITURES:
Current
General governmem
Public safety
Culture and recreation
Public works
Economic Developmeni
Visitor services
Education
Capital outlay
Debt service
Principal retirement
Interest and other fiscal charges
Total expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Issuance of debt
Transfers out
Total other financing sources (uses)
NET CHANGE IN FUND BALANCES
FUND BALANCES, BEGINNING
FUND BALANCES, ENDING
The accompanying notes are an integral part of these financial statements.
20
$ 916,102
1,139
917,241
917,241
(1,132,726)
(1,132,726)
(215,485)
512,793
$ 297,308
Total
Governmental
$ 3,664,409
17,869
497,769
624,401
3,163,129
56,134
61,224
860,697
523,515
1,264,262
673,400
11,406,809
1,519,600
1,890,469
115,770
841,822
229,907
341,270
3,722,705
4,335,114
593,937
990,641
14,581,235
( 3,174,426)
2,435,486
117,640
2,374,165)
178,961
( 2,995,465)
9,234,304
$ 6,238,839
TOWN OF WESTLAKE, TEXAS
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, 2009
Amounts reported for governmental activities in the statement
of activities are different because:
Net change in fund balance - total governmental funds
$( 2,995,465)
Governmental funds report capital outlays as expenditures. However, in the statement of
activities, the cost of those assets is allocated over their estimated useful lives and reported as
depreciation expense. This is the amount by which depreciation exceeds capital outlays in the
current period. 5,466,964
The issuance of long-term debt (e.g., bonds, leases) provided current financial resources to
governmental funds, while repayment of the principal of long-term debt consumes the current
financial resources of governmental funds. Neither transaction, however, has any effect on net
assets. Also, governmental funds report the effect of issuance costs, premiums, discounts, and
similar items when debt is first issued, whereas these amounts are deferred and amortized in the
statement of activities. This amount is the net effect of these differences in the treatment of
long-term debt and related items.
500,264
Some expenses reported in the statement of activities do not require the use of current financial
resources and, therefore, are not reported as expenditures in governmental funds. ( 82,586)
Change in net assets of governmental activities
$ 2,889,177
The accompanying notes are an integral part of these financial statements.
21
TOWN OF WESTLAKE, TEXAS
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
SEPTEMBER 30, 2009
Business-tVDe Activities -Enterprise Funds
The accompanying notes are an integral part of these financial statements.
22
Utility
Cemetery
Fund
Fund
Total
ASSETS
Current assets:
Cash and cash equivalents
$ 1,203,634
$ 64,026
$ 1,267,660
Accounts receivable (net of allowance)
582,090
-
582,090
Inventories
-
99,371
99,371
Restricted cash and investments
116,600
-
116,600
Total current assets
1,902,324
163,397
2,065,721
Noncurrent assets
Capital assets:
Buildings and improvements
12,853,855
-
12,853,855
Wastewater treatment rights
635,199
-
635,199
Machinery and equipment
3,459,821
-
3,459,821
Less: accumulated depreciation
( 3,865,652)
-
( 3,865,652)
Total capital assets
13,083,223
-
13,083,223
Total noncurrent assets
13,083,223
-
13,083,223
Total assets
14,985,547
163,397
15,148,944
LIABILITIES
Current liablities:
Accounts payable
99,335
41
99,376
Customer deposits payable
125,540
-
125,540
Accrued interest payable
3,009,152
-
3,009,152
Due to other funds
339,179
-
339,179
Unearned revenue
438,052
-
438,052
Contractual obligations
75,303
-
75,303
Total current liabilities
4,086,561
41
4,086,602
Long-term liabilities:
Contractual obligations
5,658,888
-
5,658,888
Total long-term liabilities
5,658,888
-
5,658,888
Total liabilities
9,745,449
41
9,745,490
NET ASSETS
Invested in capital assets, net of related debt
7,349,032
-
7,349,032
Unrestricted
( 2,108,934)
163,356
( 1,945,578)
Total net assets
$ 5,240,098
$ 163,356
$ 5,403,454
The accompanying notes are an integral part of these financial statements.
22
TOWN OF WESTLAKE, TEXAS
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009
Business -tune Activities -Enterprise Funds
OPERATING EXPENSES:
Payroll costs
Utility
Cemetery
196,686
Professional and contract services
Fund
Fund
Total
OPERATING REVENUES:
427,362
-
427,362
Charges for services
$ 2,345,236
$ -
$ 2,345,236
Miscellaneous revenue
74,866
2,400
77,266
Total operating revenue
2,420,102
2,400
2,422,502
OPERATING EXPENSES:
Payroll costs
196,686
-
196,686
Professional and contract services
29,191
473
29,664
Depreciation
427,362
-
427,362
Amortization of wastewater treatment rights
31,760
-
31,760
Water purchases
781,017
-
781,017
Bad Debt
221,111
-
221,111
Other operating costs
427,124
-
427,124
Total operating expenses
2,114,251
473
2,114,724
OPERATING INCOME
305,851
1,927
307,778
NON-OPERATING REVENUES (EXPENSES):
Interest income
7,858
-
7,858
Interest expense
( 580,156)
- (
580,156)
Total non-operating revenues (expenses)
( 572,298)
- (
572,298)
INCOME (LOSS) BEFORE TRANSFERS AND
CAPITAL CONTRIBUTIONS
( 266,447)
1,927 (
264,520)
Transfer in
15,000
-
15,000
Transfer out
( 76,321)
- (
76,321)
Total transfers and capital contributions
( 61,321)
- (
61,321)
CHANGE IN NET ASSETS
( 327,768)
1,927 (
325,841)
TOTAL NET ASSETS, BEGINNING
5,567,866
161,429
5,729,295
TOTAL NET ASSETS, ENDING
$ 5,240,098 $
163,356 $
5,403,454
The accompanying notes are an integral part of these financial statements.
23
TOWN OF WESTLAKE, TEXAS
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009
Business -type Activities -Enterprise Funds
Utility Cemetery Total
Fund Fund Current Year
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers
Cash payments to employees/retirees
Cash payments for goods and services
Net cash provided by operating activities
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Net interfund borrowings
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Principal paid on debt
Interest paid on debt
Purchase of property and equipment
Net cash used by capital and related financing activities
CASH FLOWS FROM INVESTING ACTIVITIES
Investment earnings
NET INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING
CASH AND CASH EQUIVALENTS, ENDING
RECONCILIATION OF TOTAL CASH AND CASH EQUIVALENTS
$ 2,516,350 $ 2,400 $ 2,518,750
( 196,686) - ( 196,686)
( 1,583,434) ( 515) ( 1,583,949)
736,230 1,885 738,115
( 315,820) - ( 315,820)
( 28,830) - ( 28,830)
( 150,647) - ( 150,647)
( 52,748) - ( 52,748)
( 232,225) - ( 232,225)
7,858 - 7,858
196,043 1,885 197,928
1,124,191 62,141 1,186,332
$ 1,320,234 $ 64,026 $ 1,384,260
Cash and cash equivalents
$
1,203,634
Restricted cash and cash equivalents
116,600
Total cash and cash equivalents
$
1,320,234
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
Operating income
$
305,851
Adjustments to reconcile operating loss to net
cash provided by operating activities:
Depreciation and amortization
459,122
Changes in operating asets and liabilities:
Receivables
111,201
Other assets
9,243
Accounts payable
(
134,234)
Customer deposits payable
11,240
Deferred revenue
( 26,193)
Net cash provided by operating activities
$
736,230
The accompanying notes are an integral part of these financial statements.
24
$ 64,026 $ 1,267,660
116,600
$ 64,026 $ 1,384,260
$ 1,927 $ 307,778
( 42)
1,885
459,122
111,201
9,243
( 134,276)
11,240
( 26,193)
$ 738,115
TOWN OF WESTLAKE, TEXAS
DISCRETELY PRESENTED COMPONENT UNITS
COMBINING STATEMENT OF NET ASSETS
SEPTEMBER 30, 2009
LIABILITIES AND NET ASSETS
LIABILITIES
Accounts payable and accrued expneses
Texas Student
Texas Student
Texas Student
Texas Student
245,789
Housing
Housing
Housing
Housing
3,241,306
Authority -
Corporation -
Corporation -
Authority -
Ballpark Austin
The Ridge at
The Ridge
Town Lake
Due in more than one year
Project
North Texas
at San Marcos
Austin Project
ASSETS
34,874,142
16,229 22,566,001
Cash and cash equivalents
$ 494,319
$ 378,062
$ 16,229
$ 497,321
Accounts receivables (net of allowance)
30,740
67,241
-
19,043
Other assets
8,225
19,065
-
15,000
Restricted assets:
Cash and cash equivalents
1,165,637
2,490,522
-
679,298
Capital assets:
Land
4,788,265
2,200,000
-
2,182,816
Buildings and improvement
28,338,368
25,705,000
-
16,963,841
Machinery and equipment
-
1,253,841
-
1,211,085
Less: accumulated depreciation
( 9,116,597)
( 8,343,058)
-
( 4,241,653)
Intangible assets:
Debt issue costs, net of amortization
2,626,487
741,128
-
789,176
Total assets
28,335,444
24,511,801
16,229
18,115,927
LIABILITIES AND NET ASSETS
LIABILITIES
Accounts payable and accrued expneses
1,086,169
1,366,043
16,229 342,015
Unearned revenue
245,789
856,572
- 425,461
Accrued interest payable
4,756,275
3,241,306
- 414,032
Noncurrent liabilities:
Due within one year
755,000
29,410,221
- 240,795
Due in more than one year
35,488,094
-
- 21,143,698
Total liabilities
42,331,327
34,874,142
16,229 22,566,001
NET ASSETS
Invested in capital assets, net
of related debt
Restricted
Unrestricted
Total net assets
( 10,773,058) ( 8,594,438)
( 3,590,638) ( 750,784)
367,813 ( 1,017,119)
$( 13,995,883) $( 10,362,341)
The accompanying notes are an integral part of these financial statements.
25
W -
( 5,268,404)
265,266
553,064
$( 4,450,074)
Texas Student
Housing
Authority - Texas Student
College Station Housing
Project Authority Total
$ 2,976,164 $
456,144
$ 4,818,239
745,117
22,375
884,516
28,476
23,414
94,180
1,969,777
-
6,305,234
2,899,597
-
12,070,678
27,727,646
-
98,734,855
2,594,804
-
5,059,730
( 6,756,974)
-
( 28,458,282)
-
-
4,156,791
32,184,607
501,933
103,665,941
700,285
-
3,510,741
2,409,709
33,753
3,971,284
3,464,783
-
11,876,396
31,775,000
-
62,181,016
-
-
56,631,792
38,349,777
33,753
138,171,229
5,309,927) -
( 855,243) 468,180
$( 6,165,170) $ 468,180
( 29,945,827)
( 4,076,156)
( 483,305)
$( 34,505,288)
26
TOWN OF WESTLAKE, TEXAS
DISCRETELY PRESENTED COMPONENT UNITS
COMBINING STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009
General revenues:
Sales Tax
Realized gain on liquidation
Interest income
Miscellaneous
Total general revenues and transfers
Change in net assets
Net assets, beginning
Prior Period Adjustment
Net assets, ending
The accompanying notes are an integral part of these financial statements.
27
Program Revenues
Operating Capital
Charges for
Grants and Grants and
Functions/Programs
Expenses
Services
Contributions Contributions
Business -type activities:
Texas Student Housing Authority
$ 1,113,311
$ 1,241,213
$ - $ -
Texas Student Housing Authority:
College Station Project
7,062,999
5,598,433
- -
Ballpark Austin Project
5,779,490
3,512,050
- -
Town Lake Austin Project
3,977,650
2,887,751
- -
Texas Student Housing Corporation:
The Ridge at North Texas
5,940,931
4,253,414
- -
The Ridge at San Marcos
604,741
648,303
- -
Total business -type activities
24,479,122
18,141,164
- -
Total primary government
$ 24,479,122
$ 18,141,164
$ - $ -
General revenues:
Sales Tax
Realized gain on liquidation
Interest income
Miscellaneous
Total general revenues and transfers
Change in net assets
Net assets, beginning
Prior Period Adjustment
Net assets, ending
The accompanying notes are an integral part of these financial statements.
27
Net (Expense) Revenue and
Changes in Net Assets
Primary Government
Governmental Business -type
Activities Activities Total
$ - $ 127,902
$ 127,902
- ( 1,464,566)
( 1,464,566)
- ( 2,267,440)
( 2,267,440)
- ( 1,089,899)
( 1,089,899)
- ( 1,687,517)
( 1,687,517)
- 43,562
43,562
- ( 6,337,958)
( 6,337,958)
- ( 6,337,958)
( 6,337,958)
- 9,571,664
9,571,664
- 90,101
90,101
- 9,661,765
9,661,765
- 3,323,807
3,323,807
37,829,095) ( 37,829,095)
$ - $( 34,505,288) $( 34,505,288)
28
TOWN OF WESTLAKE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2009
I. 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 Board -
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.
A. Reporting Entity
The accompanying financial statements comply with the provisions of the GASB statements
No. 14 and 39. "The Financial Reporting Entity," in that the Town's basic financial
statements include the accounts of the Town's financial reporting entity, including the
primary government, organizations for which the Town is financially accountable and other
organizations for which the nature and significance of their relationship with the Town are
such that inclusion would cause the Town's financial statement to be misleading or
incomplete. The criteria for including organizations as component units within the Town's
reporting entity, includes whether:
■ The organization is legally separate (can sue and be sued in their own name);
■ The Town holds the corporate powers of the organization;
■ The Town appoints a voting majority of the organization's board;
■ The Town is able to impose its will on the organization;
■ The organization has the potential to impose a financial benefit/burden on the
Town; and
■ There is fiscal dependency by the organization on the Town.
Component units are blended with the balances and transactions of the Town if one of the
following criterion are met:
■ The component unit is substantially the same governing body as the Town; or
■ The component unit provides services entirely (or almost entirely) to the
Town or benefits the Town exclusively (or almost exclusively) ; or
■ The Town is able to impose its will on the component unit.
(continued)
29
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
A. Reporting Entity (Continued)
Based on the aforementioned criteria, the Town has the following component units: Lone
Star Public Facilities Corporation, 413 Economic Development Corporation, Westlake
Academy, Texas Student Housing Authority, Texas Student Housing Authority Ballpark
Austin Project; Texas Student Housing Authority Town Lake Austin Project, Texas Student
Housing Authority College Station Project, Texas Student Housing Corporation - The Ridge
at North Texas and Texas Student Housing Corporation - The Ridge at San Marcos Project.
B. Component Units
Discretely Presented
The Texas Student Housing Authority, Texas Student Housing Ballpark Austin Project,
Texas Student Housing Town Lake Austin Project, Texas Student Housing College Station
Project, Texas Student Housing Corporation — The Ridge at North Texas Project and
Texas Student Housing Corporation — San Marcos Project (collectively, "Texas Student
Housing') 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's 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, thus the governing body can impose its will on the organizations.
Housing entities are reported as Enterprise Funds. The Town is not responsible for the long-
term debt of the Texas Student Housing entities. All Texas Student Housing entities have
separately issued financial statements. These statements can be obtained by contacting the
Texas Student Housing Authority, 3 Village Circle, Suite 207, Westlake, Texas 76262.
The financial statements are formatted to allow the user to clearly distinguish between the
primary government and the discretely presented component units.
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.
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.
(continued)
30
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
B. Component Units (Continued)
Blended (Continued)
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. The Academy's year-end is August 31.
C. Government -wide and Fund Financial Statements
The government -wide financial statements (i.e., the Statement of Net Assets 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 includes 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.
D. 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.
(continued)
31
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)
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.
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.
Special Revenue Funds — to account for the proceeds of specific revenue sources
(other than special assessments, expendable trusts, or major capital projects) that
are legally restricted to expenditures for specified purposes.
Visitors Association Fund — to account for municipal hotel occupancy
taxes collected and expenditures to promote tourism and the convention
and hotel industry.
Property Tax Reduction Fund — to account for activity relating to the
Property Tax Reduction Fund.
Westlake Academy Fund — to account for all financial resources of the
Academy.
(continued)
32
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)
FM 1938 Fund — to account for activity relating to the FM 1938 Fund.
Vehicle and Equipment Replacement Fund — to account for activity
relating to the Vehicle and Equipment Replacement Fund.
Lone Star Public Facilities Corporation — to account for activity relating
to the Lone Star Public Facilities Corporation.
4B Economic Development Corporation — to account for activity relating
to 4B Economic Development Corporation.
Debt Service Fund — to account for resources accumulated and payments made
for principal and interest on long-term general obligation debt of governmental
funds in a Debt Service Fund.
Capital Proiects Fund —to account for proceeds from long-term financing and
revenue and expenditures related to authorized construction and other capital asset
acquisitions.
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 fund:
Utility Fund — to account for revenues and expenses related to providing water
and sewer services to the general public on a continuing basis. Enterprise Fund
equity is segregated into contributed capital and retained earnings.
Cemetery Fund — to account for the operations of the Town's cemetery.
Private -sector standards of accounting and financial reporting issued prior to December 1,
1989, generally are followed in both government -wide and proprietary fund financial
statements to the extent that those standards do not conflict with or contradict guidance of the
Governmental Accounting Standards Board. Governments also have the option of following
subsequent private -sector guidance for their business -type activities and Enterprise Funds,
subject to this same limitation. The Town has elected not to follow subsequent private -sector
guidance.
(continued)
33
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)
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.
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.
E. Assets, Liabilities, and Net Assets 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 statues 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 -parry selected or
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.
(continued)
34
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
E. Assets, Liabilities, and Net Assets or Equity (Continued)
Interfund Receivables and Payables
During the course of operations, numerous transactions occur between individual funds for
goods provided or services rendered. These receivables and payables are classified as "due
from other funds" or "due to other funds" on the balance sheet. Any residual balances
outstanding between the governmental activities and business -type activities are reported in
the government -wide financial statements as "internal balances."
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
Inventories, which are expended as they are consumed, are stated at the lower of cost or
market on a first -in, first -out basis.
Fund Changes and Transactions Between Funds
Legally authorized transfers are treated as operating transfers and are included in the results
of operations 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.
Capital Assets
All fixed assets are valued at historical cost or estimated historical cost if actual historical
cost is not available. 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 over three years of life.
The cost of nominal maintenance and repairs that do not add value to the asset or materially
extend assets' lives are not capitalized.
Depreciation has been calculated on each class of depreciable property using the straight-line
method. Estimated useful lives are as follows:
Assets Years
Water and sewer system 10-50
Buildings 20-50
Machinery and equipment 4-10
Improvements 5-30
Information systems and software 3
(continued)
35
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
E. Assets, Liabilities, and Net Assets or Equity (Continued)
Compensated Absences
The Town's policy allows employees to earn 5 days of vacation and 5 days of sick leave after
six months of service and 10 days of vacation and 10 days of sick leave upon completion of a
year 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. No accumulated, unused sick time or vacation
is payable upon termination or retirement.
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 assets. Bond premiums and discounts, as well as issuance costs, 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. Bond issuance costs are reported as deferred charges and amortized
over the term of the related debt. In the fund financial statements, governmental fund types
recognize bond premiums and discounts, as well as 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.
Reserved and Designated Fund Equity
Reserved fund balances are not appropriable for expenditure or are legally segregated for a
specific future use. Designated fund balances are established to indicate tentative plans for
financial resources utilization in a future period.
Net Assets
Net assets represent the difference between assets and liabilities. Net assets invested in
capital assets, net of related debt consists of capital assets, net of accumulated depreciation,
reduced by the outstanding balances of any borrowing used for the acquisition, construction
or improvement of those assets, adding back unspent proceeds. Net assets are reported as
restricted when there are limitations imposed on there use either through enabling legislations
adopted by the Town or through external restrictions imposed by creditors, grantors or laws
or regulations of other governments.
(continued)
36
I.
II.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
E. Assets, Liabilities, and Net Assets or Equity (Continued)
Estimates
The preparation of financial statements, in conformity with generally accepted accounting
principles, requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent 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.
RECONCILIATION OF GOVERNMENT -WIDE AND FUND FINANCIAL
STATEMENTS
Explanation of Certain Differences Between the Governmental Fund Balance Sheet and
the Government -wide Statement of Net Assets
The governmental fund balance sheet includes a reconciliation between fund balance — total
governmental funds and net assets — governmental activities as reported in the government -wide
statement of net assets. One element of that reconciliation explains, "Long-term liabilities are
not due and payable in the current period and therefore are not reported in the funds." The
details of this $20,372,867 difference are as follows:
Certificates of obligation bonds $ 20,911,402
Deferred charges for issuance costs (to be amortized
over life of debt) (1,004,692)
Capitalized lease obligations 46,559
Accrued interest payable 419,598
Net adjustment to reduce fund balance - total
governmental funds to arrive at net assets -
governmental activities $ 20,372,867
(continued)
37
II. RECONCILIATION OF GOVERNMENT -WIDE AND FUND FINANCIAL
STATEMENTS (Continued)
Explanation of Certain Differences Between the Governmental Fund Statement of
Revenue, Expenditures and Changes in Fund Balances and the Government -wide
Statement of Activities
The governmental fund statement of revenues, expenditures and changes in fund balances
includes a reconciliation between net changes in fund balances — total governmental fund and
changes in net assets of governmental activities as reported in the government -wide statement of
activities. One element of that reconciliation explains, "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." The details of
this $5,466,964 difference are as follows:
Capital contributions $ 2,059,624
Capital outlay ($42,348 reclassified to expense repairs) 4,292,766
Depreciation expense (885,426)
Net adjustment to decrease net changes in fund balances -
total governmental funds to arrive at changes in net
assets of governmental activities $ 5,466,964
Another element of that reconciliation states, "The issuance of long-term debt (e.g., bonds,
leases) provides current financial resources to governmental funds, while the repayment of the
principal of long-term debt consumes the current financial resources of governmental funds.
Neither transaction, however, has any effect on net assets. Also, governmental funds report the
effect of issuance costs, premiums, and similar items when debt is first issued, whereas these
amounts are deferred and amortized in the statement of activities. Details of this $500,264
difference are as follows:
Principal repayments:
General obligation debt
Capital lease
Deferred rebates
Debt issuance:
General obligation debt
Deferred expenses (refund)
Net adjustment to increase net changes in fund balances -
total governmental funds to arrive at changes in net
assets ofgovernmental activities
(continued)
38
$ 515,000
86,345
22,863
(117,640)
(6,304)
$ 500,264
II. RECONCILIATION OF GOVERNMENT -WIDE AND FUND FINANCIAL
STATEMENTS (Continued)
Explanation of Certain Differences Between the Governmental Fund Statement of
Revenue, Expenditures and Changes in Fund Balances and the Government -wide
Statement of Activities (Continued)
Another element of that reconciliation states, "Some expenses reported in the statement of
activities do not require the use of current financial resources and therefore are not reported as
expenditures in governmental funds." The details of this $82,586 difference are as follows:
Municipal court fines $ 4,292
Accrued interest 17,575
Amortization of deferred charge on refunding 44,336
Amortization of issuance costs 16,383
Net adjustment to decrease net changes in fund balances -
total governmental funds to arrive at changes in net
assets ofgovernmental activities $ 82,586
III. DETAILED NOTES ON ALL FUNDS
Deposits 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 Town did not engage in repurchase or reverse repurchase agreement transactions during the
current year.
During the year ended September 30, 2009, 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.
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.
(continued)
39
III. DETAILED NOTES ON ALL FUNDS (Continued)
Deposits and Investments (Continued)
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:
At September 30, 2009, the Town's investments included investment pools in the name of
the Town or its agent in the Town's name. The Town's investments were as follows:
Carrying
Primary government Amount
Investments:
TexPool $ 6,251,494
Cash 727,894
Total cash and investments $ 6,979,388
Minimum
Maximum
Maximum
Authorized
Maximum
Percentage
Investment
Investment Type
Maturity
of Portfolio
in One Issuer
Obligations of, or guaranteed by
N/A
N/A
Governmental entities
2 years
None
None
Certificates of deposit
1 year
None
None
Mutual funds
2 years
80%
None
Investment pools
-
None
None
At September 30, 2009, the Town's investments included investment pools in the name of
the Town or its agent in the Town's name. The Town's investments were as follows:
Carrying
Primary government Amount
Investments:
TexPool $ 6,251,494
Cash 727,894
Total cash and investments $ 6,979,388
$ 6,979,388
Reconciliation of total cash and investments at September 30, 2009, are as follows:
Cash and cash equivalents
Restricted cash and investments
Total cash and investments
(continued)
40
$ 6,823,948
155,440
$ 6,979,388
Minimum
Rating
Fair
Legal
as of
Value
Rating
Year-end
$ 6,251,494
N/A
AAA -m
727,894
N/A
N/A
$ 6,979,388
Reconciliation of total cash and investments at September 30, 2009, are as follows:
Cash and cash equivalents
Restricted cash and investments
Total cash and investments
(continued)
40
$ 6,823,948
155,440
$ 6,979,388
III. DETAILED NOTES ON ALL FUNDS (Continued)
Deposits and Investments (Continued)
The Town's entire cash deposits in the bank of $1,594,178 on September 30, 2009, were covered
by federal depository insurance or by collateral.
Component units
Investments:
Cash and cash equivalents
Total
Carrying
Amount
$ 4,818,239
$ 4,818,239
Fair Value
$ 4,818,239
$ 4,818,239
Weighted Average
Maturity (Days)
N/A
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. One of the ways that the Town
manages its exposure to interest rate risk is by investing in investment pools which purchase a
combination of shorter term investments with an average maturity of less than 29 days thus
reducing the interest rate risk. The Town monitors the interest rate risk inherent in its portfolio
by measuring the weighted average maturity of its portfolio. The Town has no specific
limitations with respect to this metric.
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 above 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.
(continued)
41
III. DETAILED NOTES ON ALL FUNDS (Continued)
Capital Assets
Capital asset activity for the year ended September 30, 2009, was as follows:
Primary Government
Governmental activities:
Capital assets, not being depreciated:
Land
Construction in progress
Total assets not being depreciated
Capital assets, being depreciated:
Capital improvements
Buildings
Machinery and equipment
Information systems and software
Total capital assets being depreciated
Less accumulated depreciation:
Capital improvements
Buildings
Machinery and equipment
Information systems and software
Total accumulated depreciation
Total capital assets being
depreciated, net
Governmental activities capital
assets, net
Business -type activities:
Capital assets, not being depreciated:
Construction in progress
Total assets not being depreciated
Capital assets, being depreciated:
Capital improvements
Wastewater treatment rights
Machinery and equipment
Total capital assets being depreciated
Less accumulated depreciation:
Capital improvements
Wastewater treatment rights
Machinery and equipment
Total accumulated depreciation
Total capital assets being
depreciated, net
Business -type activities capital
assets, net
Beginning
Balance Increases
Prior Period Ending
Decreases Adjustment Balance
$ 9,386,531 $
2,059,624 $ - $
84,508 $ 11,530,663
613,845
3,989,831 4,468,406
- 135,270
10,000,376
6,049,455 4,468,406
84,508 11,665,933
91,878
4,287,188
55,000 -
- 4,342,188
16,745,037
4,468,406
21,213,443
1,953,308
247,935
2,201,243
52,430
-
52,430
23,037,963
4,771,341
27,809,304
2,317,392
184,892
2,502,284
1,923,279
425,352
2,348,631
1,116,228
257,706
1,373,934
34,954
17,476
52,430
5,391,853
885,426
6,277,279
17,646,110
3,885,915 -
- 21,532,025
$ 27,646,486 $
9,935,370 $ 4,468,406 $
84,508 $ 33,197,958
$ 39,130 $
$ 39,130 $
39,130
39,130
12,853,855
-
635,199
3,367,943
91,878
16,856,997
91,878
2,237,563
302,369
259,373
31,760
909,594
124,993
3,406,530
459,122
13,450,467 (
367,244) -
$ 13,489,597 $(
367,244) $ 39,130 $
(continued)
42
12,853,855
635,199
3,459,821
16,948,875
2,539,932
291,133
1,034,587
3,865,652
13,083,223
- $ 13,083,223
III. DETAILED NOTES ON ALL FUNDS (Continued)
Capital Assets (Continued)
Depreciation was charged to departments of the primary government as follows:
Governmental activities:
General government $ 641,933
Public safety 56,380
Public works 187,113
Total depreciation expense - governmental activities $ 885,426
A summary of discretely presented component units' capital assets at September 30, 2009,
follows:
Texas Student Housing Authority - Ballpark Austin Project
Beginning Ending
Balance Additions Deletions Balance
Capital assets, not being depreciated:
Land
Total capital assets,
not being depreciated
Capital assets, being depreciated:
Building
Furniture and fixtures
Total capital assets,
being depreciated
Less accumulated depreciation for:
Building
Furniture and fixtures
Total accumulated depreciation
Total capital assets,
being depreciated, net
Capital assets, net
$ 4,788,265 $ - $ -
$ 4,788,265
4,788,265 - -
4,788,265
21,345,305 - -
21,345,305
6,993,063 - -
6,993,063
28,338,368 - -
28,338,368
4,743,401 711,510 -
5,454,911
3,434,200 227,486 -
3,661,686
8,177,601 938,996 -
9,116,597
20,160,767 938,996 - 19,221,771
$ 24,949,032 $( 938,996) $ - $ 24,010,036
(continued)
43
III. DETAILED NOTES ON ALL FUNDS (Continued)
Capital Assets (Continued)
Texas Student Housing Corporation - The Ridge at North Texas
Beginning Ending
Balance Additions Deletions Balance
Capital assets, not being depreciated:
Land
$ 2,200,000 $
- $
- $ 2,200,000
Total capital assets,
not being depreciated
2,200,000
-
- 2,200,000
Capital assets, being depreciated:
Building
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 for:
Building
5,131,041
856,833
- 5,987,874
Furniture and fixtures
2,332,540
22,644
- 2,355,184
Total accumulated depreciation
7,463,581
879,477
- 8,343,058
Total capital assets,
being depreciated, net
19,495,260 (
879,477)
- 18,615,783
Capital assets, net
$ 21,695,260 $(
879,477) $
- $ 20,815,783
Texas Student Housing Authority - The Ridge at San Marcos
Beginning
Ending
Balance Additions
Deletions
Adjustments Balance
Capital assets, not being depreciated
Land
Total capital assets,
not being depreciated
Capital assets, being depreciated:
Building
Furniture, fixtures and equipment
Total capital assets,
being depreciated
Less accumulated depreciation
Total capital assets,
being depreciated, net
Capital assets, net
$ 1,552,207 $ - $ - $ (1,552,207) $ -
1,552,207 - - (1,552,207) -
15,875,143 - - (15,875,143)
818,332 - - (818,332)
16,693,475 - - (16,693,475)
4,841,486 - - (4,841,486)
11,851,989 - - (11,851,989)
$ 13,404,196 $ - $ - $ (13,404,196) $
(continued)
44
III. DETAILED NOTES ON ALL FUNDS (Continued)
Capital Assets (Continued)
Texas Student Housing Authority - Town Lake Austin Project
Beginning
Ending
Balance
Additions Retirements
Balance
Capital assets, not being depreciated:
Land
$ 2,182,816
$ - $ -
$ 2,182,816
Total capital 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 costs
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 for:
Building and improvements
2,396,181
604,098 -
3,000,279
Capitalized purchase costs
146,764
28,484 -
175,248
Land improvements
374,212
- -
374,212
Unit appliances
168,648
- -
168,648
Furniture and fixtures
523,266
- -
523,266
Total accumulated depreciation
3,609,071
632,582 -
4,241,653
Total capital assets,
being depreciated, net
14,565,855
( 632,582) -
13,933,273
Capital assets, net
$ 16,748,671
$( 632,582) $ -
$ 16,116,089
(continued)
45
III. DETAILED NOTES ON ALL FUNDS (Continued)
Capital Assets (Continued)
Texas Student Housing Authority - College Station Project
Beginning
Balance Additions Retirements Reclass
Capital assets, not being depreciated:
Land
$ 2,899,597 $ - $
Total capital assets,
not being depreciated
2,899,597 -
Capital assets, being depreciated:
Building
27,727,646 -
Furniture and fixtures
2,594,804 -
Total capital assets,
being depreciated
30,322,450 -
Less accumulated depreciation for:
Building
3,610,527 896,176
Furniture and fixtures
1,764,191 486,080
Total accumulated depreciation
5,374,718 1,382,256
Total capital assets,
Ending
Balance
$ 2,899,597
2,899,597
27,727,646
2,594,804
30,322,450
- ( 134,416) 4,372,287
134,416 2,384,687
- - 6,756,974
being depreciated, net 24,947,732 ( 1,382,256) - - 23,565,476
Capital assets, net $ 27,847,329 $( 1,382,256) $ - $ - $ 26,465,073
Restricted Cash
General Fund
Within the governmental funds, $38,840 in cash and cash equivalents represents funds held to
assist in the financing of future projects.
Proprietary Fund
Within the proprietary funds, $116,600 of the fund 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, $6,305,234 in cash and cash equivalents
represents funds held for debt service.
(continued)
46
III. DETAILED NOTES ON ALL FUNDS (Continued)
Capital Leases
The Town entered into a lease agreement as lessee for financing the acquisition of a vehicle for
the warrant division of the municipal court. The lease agreement qualifies as a capital lease for
accounting purposes and, therefore, has been recorded at the present value of their future
minimum lease payments as of the inception date.
Governmental
Activities
Asset:
Machinery and equipment $ 23,000
Less: Accumulated depreciation (13,800)
Total $ 9,200
Westlake Academy entered into lease agreement as a lessee for financing the acquisition of
computers for student use. The lease agreement qualifies as a capital lease for accounting
purposes and, therefore, has been recorded at the present value of their future minimum lease
payments as of the inception date. The computers were not capitalized because the value of each
one was less than $5,000.
The future minimum lease obligations and the net present value of these minimum lease
payments as of September 30, 2009, were as follows:
Year Ending Sept. 30
2010
Total minimum lease payments
Less: amount representing interest
Present value of minimum lease payments
Governmental
Activities
$ 49,827
49,827
(3,268)
$ 46,559
(continued)
47
III. DETAILED NOTES ON ALL FUNDS (Continued)
General Long-term Debt
Long-term liability activity for the year ended September 30, 2009, was as follows:
Beginning
Ending Due Within
Balance Additions Reductions
Balance One Year
Combination tax and limited
Pledge Revenue Certificates
of Obligation, Series 2002 $ 5,395,000 $ - $ 250,000
$ 5,145,000 $ 265,000
Combination tax and limited
Pledge Revenue Certificates
of Obligation, Series 2003 5,980,000 - 150,000
5,830,000 155,000
General Obligation Refunding
Bonds, Series 2007 7,350,000 - 20,000
7,330,000 20,000
Less deferred amounts
on refunding ( 685,352) - ( 44,336)
( 641,016) -
General Obligation
Bonds, Series 2008 2,500,000 - 95,000
2,405,000 85,000
Capital leases 15,264 117,640 86,345
46,559 46,559
Fidelity Tax Reimbursement 224,265 - 22,863
201,402 24,178
$ 20,779,177 $ 117,640 $ 579,872
$ 20,316,945 $ 595,737
Debt service requirements of certificates of obligation and general obligations to be retired from
governmental funds are as follows:
Year Ending
Total
September 30, Principal Interest
Requirements
2010 525,000 973,250
1,498,250
2011 555,000 946,778
1,501,778
2012 580,000 918,450
1,498,450
2013 610,000 888,528
1,498,528
2014 640,000 856,906
1,496,906
2014-2018 3,710,000 3,792,848
7,502,848
2019-2023 4,710,000 2,792,179
7,502,179
2024-2028 5,755,000 1,558,377
7,313,377
2029-2033 3,625,000 327,315
3,952,315
Total $ 20,710,000 $ 13,054,631
$ 33,764,631
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 15 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.
(continued)
48
III. DETAILED NOTES ON ALL FUNDS (Continued)
General Long-term Debt (Continued)
Debt service requirements for deferred rebates to be retired from governmental funds are as
follows:
Year Ending
Total
September 30,
Principal
Interest
Requirements
2010
24,178
11,581
35,759
2011
25,568
10,190
35,758
2012
27,038
8,720
35,758
2013
28,593
7,165
35,758
2014
30,237
5,522
35,759
2015-2016
65,788
5,727
71,515
Total
$ 201,402
$ 48,905
$ 250,307
The Certificates of Obligation, Series 2002 and 2003 require the Town to provide certain
updated financial information and operating data to certain information vendors annually, as
permitted by SEC Rule 15c2-12 (the "Rule"). The issuer will provide the updated information
to each nationally recognized municipal securities information repository ("NRMSIR") and to
any state information depository ("SID") that is designated by the State of Texas and approved
by the staff of the United States Securities and Exchange Commission (the "SEC").
During the previous fiscal year, the Town issued General Obligation bonds of $2.5 million.
These bonds were used for the construction of an Arts & Sciences Center that was completed
during the current fiscal year.
Proprietary Long-term Debt
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%.
(continued)
49
III. DETAILED NOTES ON ALL FUNDS (Continued)
Proprietary Long-term Debt (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.
Proprietary long-term debt as of September 30, 2009, is as follows:
Description
Contractual obligations:
Elevated water storage
Outstanding Outstanding Current
9/30/2008 Issued Retired 9/30/2009 Portion
$ 1,083,078 $ - $ 28,831 $ 1,054,247 $ 753303
Limited pledge contractual
obligation:
Dove Road Water Line and
West Pump Station 4,679,944 - - 4,679,944 -
$ 5,763,022 $ - $ 28,831 $ 5,734,191 $ 75,303
The schedule of future payments by the Town under these agreements is as follows:
Year Ending
September 30, Principal
2010
75,303
2011
78,508
2012
81,712
2013
86,519
2014
91,325
2015-2019
520,715
2020-2024
120,165
2025
4,679,944
Total $ 5,734,191
(continued)
50
Total
Interest Requirements
576,126
651,429
610,613
689,121
647,482
729,194
686,868
773,387
728,930
820,255
4,388,221
4,908,936
1,791,996
1,912,161
-
4,679,944
$ 9,430,236 $ 15,164,427
DETAILED NOTES ON ALL FUNDS (Continued)
Discretely Presented Long-term Debt
Texas Student Housing Authority - College Station Project
The Project's installment note payable is summarized as follows:
Interest
Lender/Security/Due Date Rate Balance
Cambridge Student Housing Financing Company,
L.P.; substantially all assets and assignment of
rents; due November 1, 2039 8.00% $ 31,775,000
The Project's installment note is payable monthly with principal and interest payments of
$231,545 until November 1, 2039.
The following is a summary of long-term debt transactions of the Project for the year ended
August 31, 2009:
Amounts
Beginning Ending Due Within
Balance Increases Decreases Balance One Year
$ 32,070,000 $ - $ 295,000 $ 31,775,000 $ 31,775,000
The Project's original developer refinanced the installment note through a secondary offering
with Cambridge Student Housing Financing Company, L.P. The debt certificates were sold to
private investors in the following classes:
Class (Series) Offering Total
A 17,500,000
B 4,900,000
C 4,820,000
D 5,380,000
Total $ 32,600,000
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 August 31, 2009, the Project was not in compliance with the fixed charge coverage ratio,
which constitutes a default of the lending agreement. Upon default, 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.
(continued)
51
III. DETAILED NOTES ON ALL FUNDS (Continued)
Discretely Presented Long-term Debt (Continued)
Texas Student Housing Authority - Town Lake Austin Project
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 for the bonds
range from 7.76% to 8.69% at present and principal and interest payments are made monthly.
The future debt service requirements of the bonds are as follows:
Year Ending
Amounts Due
August 31,
Beginning
Interest
Within One
2010
Balance Increases
Decreases Ending Balance
Year
Revenue Bonds:
260,159
1,631,478
1,891,637
2002 A-1 Bonds
$ 16,516,812 $ -
$ 221,560 $ 16,295,252
$ 240,795
2002 A-2 Bonds
5,089,241 -
- 5,089,241
-
Total
$ 21,606,053 $ -
$ 221,560 $ 21,384,493
$ 240,795
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 for the bonds
range from 7.76% to 8.69% at present and principal and interest payments are made monthly.
The future debt service requirements of the bonds are as follows:
Year Ending
August 31,
Principal
Interest
Total
2010
240,795
1,650,842
1,891,637
2011
260,159
1,631,478
1,891,637
2012
281,080
1,610,557
1,891,637
2013
303,683
1,587,954
1,891,637
2014
328,105
1,563,532
1,891,637
2015-2019
2,081,386
7,376,799
9,458,185
2020-2024
3,064,148
6,394,037
9,458,185
2025-2029
4,510,942
4,947,243
9,458,185
2030-2033
10,314,195
2,467,629
12,781,824
Totals
$ 21,384,493
$ 29,230,071
$ 50,614,564
Texas Student Housing Authority - The Ridge at San Marcos
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. The annual interest rate is
8.2% and interest is due on the first of each month. In the case of default under the terms of the
indenture, the interest rate increases by 2%. During 2005, the Project defaulted on the bonds and
the interest rate increased to 10.2%.
During 2005, the Project ceased making the required principal and interest payments required by
the loan and financing agreement. This constitutes an event of the default under provisions of the
indenture and permits the trustee at the direction of the servicing agent to declare the principal and
all interest then due to be immediately due and payable. As a result, the outstanding principal at
August 31, 2009, has been shown as a current liability in the accompanying financial statements.
(continued)
52
III. DETAILED NOTES ON ALL FUNDS (Continued)
Discretely Presented Long-term Debt (Continued)
Texas Student Housing Authority - The Ridge at San Marcos (Continued)
The following is a summary of long-term debt transactions of the Project for the 12 -month
period ended August 31, 2009:
Amounts
Beginning Increases/ Ending Due Within
Balance Adjustments Decreases Balance One Year
Revenue Bonds:
2000 Bonds $ 19,580,869 $(19,580,869) $ - $ - $ -
On November 14, 2008, the Ridge at San Marcos was given a deed -in -lieu by the bondholders,
Muni Mae, and these assets and liabilities pertaining the facility are no longer under the control
of Texas Student Housing Authority. Therefore, the Project is no longer responsible for the
repayment of this debt issue.
Texas Student Housing Authority - Ballpark Austin Project
The long-term debt activity of the Ballpark Austin Project is as follows:
(continued)
53
Amounts
Beginning
Ending
Due Within
Balance Increases
Decreases
Balance
One Year
Revenue Bonds:
2001A Bonds
$ 31,345,000 $ -
$ 585,000
$ 30,760,000
$ 610,000
2001B Bonds
2,365,000 -
-
$ 2,365,000
145,000
2001C Bonds
3,000,000 -
-
$ 3,000,000
-
Less discounts
( 1,401,991) -
60,085
( 1,341,906)
-
Total
$ 35,308,009 $ -
$ 524,915
$ 34,783,094
$ 755,000
(continued)
53
III. DETAILED NOTES ON ALL FUNDS (Continued)
Discretely Presented Long-term Debt (Continued)
Texas Student Housing Authority - Ballpark Austin Project (Continued)
The bonds are payable solely from the revenues generated by the Project and secured by the
revenues pledged and assigned under the terms of the trust indenture. Interest rates on the bonds
range from 4.00% to 11.00% and are payable semi-annually. The debt service requirements of
the bonds are as follows:
Year Ending
Governmental Activities
August 31,
Principal
Interest
Total
Ending
2010
755,000
2,311,359
3,066,359
2011
680,000
2,280,294
2,960,294
2012
715,000
2,247,194
2,962,194
2013
755,000
2,208,144
2,963,144
2014
795,000
2,166,875
2,961,875
2015-2019
4,680,000
10,132,269
14,812,269
2020-2024
6,105,000
8,704,631
14,809,631
2025-2029
8,000,000
6,812,188
14,812,188
2030-2033
13,640,000
3,681,438
17,321,438
Totals
$ 36,125,000
$ 40,544,392 $
76,669,392
At August 31, 2009, the Project had not made interest payments on the Subordinate 2001C
Bond Series since July 2003, and the Subordinate 2001C Bond is in default. In addition, the
Project's fixed charges coverage ratio was not in compliance with the covenants of the
indenture. These events do not constitute an event of default that accelerates the bonds. As a
result, the maturities are presented under the original repayment terms.
Texas Student Housing Corporation - The Ridge at North Texas
The long-term debt activity of the Ridge at North Texas is as follows:
(continued)
54
Amounts
Beginning
Ending
Due Within
Balance Increases
Decreases
Balance
One Year
Revenue Bonds:
2001A Bonds
$ 27,495,000 $ -
$ 540,000
$ 26,955,000
$ 26,955,000
2001B Bonds
3,240,000 -
-
3,240,000
3,240,000
Less discounts
( 822,264) -
( 37,485)
( 784,779)
( 784,779)
Total
$ 29,912,736 $ -
$ 502,515
$ 29,410,221
$ 29,410,221
(continued)
54
III. DETAILED NOTES ON ALL FUNDS (Continued)
Discretely Presented Long-term Debt (Continued)
Texas Student Housing Corporation - The Ridge at North Texas (Continued)
The debt originally was to be amortized through 2031 with varying monthly principal payment
amounts ranging from $2,618,093 to $3,465,280 for interest and principal. The annual
requirements to amortize all debts outstanding as of August 31, 2009, are as follows and have not
been adjusted for the default of the bonds. Under the original terms of the Indenture, a total of
$540,000 in principal and $2,079,992 in interest is due in fiscal 2009. The total interest to be
paid will depend on the ultimate maturities of the bonds.
Year Ending
August 31,
2010
Principal
$ 29,410,221
Interest
$ 31,690,407
Total
$ 61,100,628
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.
Deferred Revenue
Deferred revenue in the proprietary fund of $438,052 relates to the collection of the entire
amount due on six Ductbank leases as follows: One 20 -year lease with AT&T local network
services and five 20, 25 and 30 -year leases with Verizon Southwest for use of the Town's
Ductbank.
Commitments and Contingencies
Lease Obligations
The Town has commitments relative to municipal services, and contractual relationships
concerning certain utilities and public safety resources, which are normal in its ongoing activity.
Noncancellable obligations consist of agreements for services at September 30, 2009.
Minimum lease payments and contractual obligations under these noncancellable leases and
agreements as of September 30, 2009, are as follows:
Year Ending
September 30, Amount
2010 228,286
2011 149,452
Total $ 377,738
Rental expenditures in 2009 were $228,037.
(continued)
55
III. DETAILED NOTES ON ALL FUNDS (Continued)
Commitments and Contingencies (Continued)
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.
Federal and State Program Revenues
The Town received financial assistance from various federal and state governmental agencies in
the form of grants. 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, 2009, were as
follows:
Source
Federal program revenues:
Department of Homeland Security
U. S. Department of Education - Passed
through State Department of Education
Total federal program revenues
State program revenues:
State Department of Education
(continued)
56
Westlake
Academy Total
56,134 56,134
$ 56,134 $ 56,134
$ 3,163,129 $ 3,163,129
M. DETAILED NOTES ON ALL FUNDS (Continued)
Interfund Balances and Transactions
Interfund receivables and payables at September 30, 2009, were as follows:
Due from
Other Funds
General fund:
Visitors Association fund
Vehicle & equipment replacement fund
Property tax reduction fund
Utility fund
Capital projects fund
Visitors Association fund:
General fund
Capital projects fund
4B Economic Development Corporation fund
Property tax reduction fund:
General fund
FM 1938 fund
Capital projects fund
Capital projects fund:
General fund
Visitors Association fund
Property tax reduction fund
FM 1938 fund:
Property tax reduction fund
4B Economic Development Corporation fund:
Visitors Association fund
Utility fund
Vehicle & equipment replacement fund:
General fund
Enterprise fund:
General fund
4B Economic Development Corporation fund
(continued)
57
250,000
41,871
89,243
33,829
429,019
8,550
74,472
25,814
297,308
12,000
$ 1,262,106
Due to
Other Funds
33,829
12,000
8,550
250,000
25,814
74,472
89,243
429,019
41,871
297,308
$ 1,262,106
III. DETAILED NOTES ON ALL FUNDS (Continued)
Interfund Balances and Transactions (Continued)
Interfund transfers between the primary government's funds consisted of:
Transfers
Transfers
To Funds
From Funds
Primary Government
General fund:
General PCM fund
$ 77,278
$ 77,278
Utility fund
-
61,321
Capital projects fund
149,185
-
Grant fund
-
-
Property Tax Reduction fund
-
250,000
Vehicle and equipment replacement fund
51,954
-
Debt Service fund:
Visitors Asscoiation fund
-
368,861
4B Economic Development Corporation fund
-
1,132,726
Visitors Association fund:
Cemetary fund
-
-
Debt service fund
368,861
-
Capital projects fund
35,700
-
FM 1938 fund:
Property Tax Reduction fund
-
25,814
Property Tax Reduction fund:
General fund
250,000
-
FM 1938 fund
25,814
-
Capital projects fund
82,647
-
Vehicle and equipment replacement fund:
General fund
-
51,954
4B Ecomonic Development Corporation fund:
Debt service fund
1,132,726
-
Capital Projects fund:
General fund
-
149,185
Visitors Asscoiation fund
-
35,700
Property Tax Reduction fund
-
82,647
Westlake Academy
-
200,000
Westlake Academy:
Capital projects fund
200,000
-
Utility fund:
General fund 61,321 -
Utility PCM fund 15,000 15,000
Totals $ 2,448,817 $ 2,448,817
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.
(continued)
58
III. DETAILED NOTES ON ALL FUNDS (Continued)
Interfund Balances and Transactions (Continued)
Transfers are used to (1) move revenues collected in the special revenue funds to finance various
programs in accordance with budgetary authorizations, (2) move receipts restricted for debt
service from the funds collecting the receipts to the debt service fund as debt service payments
become due, (3) reimburse one fund for services provided to another fund and (4) pay for
property purchased in advance of bond issuance.
Receivables
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, 2009 was $781,017.
IV. OTHER INFORMATION
Retirement Plan
Plan Description
The Town provides pension benefits for all of its eligible employees through a non-traditional,
joint contributory, hybrid defined benefit plan in the statewide Texas Municipal Retirement System
(TMRS), an agent multiple -employer public employee retirement system. The plan provisions that
have been adopted by the Town are within the options available in the governing state statutes of
TMRS.
(continued)
59
Governmental Funds
Enterprise Funds
Property Tax
Westlake
Visitors
Westlake
Reduction
FM 1938
4B
Utility
General
Association
Academy
Fund
Fund
Corporation
Fund
Total
Receivables:
Sales tax
$ 350,527
$ -
$ -
$ 175,264
$ 126,900
$ 175,264
$
$ 827,955
Other taxes
-
76,626
-
-
-
-
76,626
Franchise fees
143,639
-
-
-
-
-
143,639
Accounts
-
-
-
-
-
803,201
803,201
Other
41,751
-
116,593
-
-
158,344
Gross receivables
535,917
76,626
116,593
175,264
126,900
175,264
803,201
2,009,765
Less: Allowance
for uncollectibles
-
-
-
-
-
-
221,111
221,111
Net total receivables
$ 535,917
$ 76,626
$ 116,593
$ 175,264
$ 126,900
$ 175,264
$ 582,090
$ 1,788,654
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, 2009 was $781,017.
IV. OTHER INFORMATION
Retirement Plan
Plan Description
The Town provides pension benefits for all of its eligible employees through a non-traditional,
joint contributory, hybrid defined benefit plan in the statewide Texas Municipal Retirement System
(TMRS), an agent multiple -employer public employee retirement system. The plan provisions that
have been adopted by the Town are within the options available in the governing state statutes of
TMRS.
(continued)
59
IV. OTHER INFORMATION (Continued)
Retirement Plan (Continued)
Plan Description (Continued)
TMRS issues a publicly available comprehensive annual financial report that includes financial
statements and required supplementary information (RSI) for TMRS; the report also provides
detailed explanations of the contributions, benefits and actuarial methods and assumptions used
by the System. This report may be obtained by writing to TMRS, P. O. Box 149153, Austin,
Texas 78714-9153 or by calling 800-924-8677; in addition, the report is available on TMRS'
website at www.TMRS.com.
The plan provisions are adopted by the governing body of the Town, within the options available
in the state statutes governing TMRS. Plan provisions for the Town were as follows:
Plan Year 2008 Plan Year 2009
Employee deposit rate
7.0%
7.0%
Matching ratio (town to employee)
2 to 1
2 to 1
Years required for vesting
5
5
Service retirement eligibility
(expressed as age/years of service)
60/5, 0/20
60/5,0/20
Updated service credit
100% repeating,
100% repeating,
transfers
transfers
Annuity increase (to retirees)
0% of CPI
0% of CPI
repeating
repeating
Contributions
Under the state law governing TMRS, the contribution rate for each town is determined annually
by the actuary, using the Projected Unit Credit actuarial cost method. This rate consists of the
normal cost contribution rate and the prior service cost contribution rate, which is calculated to
be a level percent of payroll from year to year. The normal cost contribution rate finances the
portion of an active member's projected benefit allocated annually; the prior service contribution
rate amortizes the unfunded (overfunded) actuarial liability (asset) over the applicable period for
that city. Both the normal cost and prior service contribution rates include recognition of the
projected impact of annually repeating benefits, such as Updated Service Credits and Annuity
Increases.
(continued)
60
IV. OTHER INFORMATION (Continued)
Retirement Plan (Continued)
Contributions (Continued)
The Town contributes to the TMRS Plan at an actuarially determined rate. Both the employees
and the Town make contributions monthly. Since the Town needs to know its contribution rate
in advance for budgetary purposes, there is a one-year delay between the actuarial valuation that
serves as the basis for the rate and the calendar year when the rate goes into effect. The annual
pension cost and net pension obligation/(asset) are as follows:
Annual Required Contribution (ARC) $ 138,554
Interest on Net Pension Obligation -
Adjustment to the ARC -
Annual Pension Cost 138,554
Contributions Made ( 138,554)
Increase (Decrease) in Net Pension Obligation -
Net Pension Obligation/(Asset), beginning of year -
Net Pension Obligation/(Asset), ending of year $
Accounting
Annual
Actual
Percentage Net
Year
Pension
Contribution
of APC Pension
Ending
Cost (APC)
Made
Contributed Obligation
09/30/07
$ 98,030
$ 98,030
100% $ -
09/30/08
108,827
108,827
100% -
09/30/09
138,554
138,554
100% -
The required contribution rates for fiscal year 2009 were determined as part of the December 31,
2006 and 2007 actuarial valuations. Additional information as of the latest actuarial valuation,
December 31, 2008, also follows:
Actuarial Valuation Date
12/31/06
12/31/07
Actuarial cost method
Unit Credit
Projected Unit Credit
Amortization method
Level percent
Level percent
Inflation
of payroll
of payroll
Remaining amortization period
25 years - open
25 years - closed
Asset valuation method
Amortized cost
Amortized cost
Actuarial Assumptions
Investment rate of return
7%
7%
Projected salary increases
varies by age
varies by age
and service
and service
Inflation
3.0%
3.0%
Cost -of -living adjustments
N/A
0.0%
(continued)
61
12/31/08
Projected Unit Credit
Level percent
of payroll
24 years - closed
Amortized cost
7.5%
varies by age
and service
3.0%
0.0%
IV. OTHER INFORMATION (Continued)
Retirement Plan (Continued)
Contributions (Continued)
The schedule of funding progress presents multi-year trend information about whether the
actuarial value of plan assets is increasing or decreasing over time relative to the actuarial
accrued liability of benefits.
Actuarial
Actuarial
Actuarial
Actuarial
Annual
Accrued Liability
Valuation
Value of
Accrued
Percentage
Accrued
Covered
as a Percentage
Date
Assets
Liability
Funded
Liability
Payroll
of Covered Payroll
12/31/2006
$ 773,412
$ 821,401
94.2%
$ 47,989
$ 1,300,610
3.7%
12/31/2007
792,775
1,059,135
74.9%
266,360
1,257,653
21.2%
12/31/2008
1,052,148
1,445,196
72.8%
393,048
1,536,837
25.6%
Other Postemployment Benefits
Supplemental Death Benefits Fund
The Town also participates in the cost sharing multiple -employer defined benefit group term life
insurance plan operated by the Texas Municipal Retirement System (TMRS) known as the
Supplemental Death Benefits Fund (SDBF). The Town elected, by ordinance to provide group
term life insurance coverage to both current and retired employees. The Town may terminate
coverage under and discontinue participation in the SDBF by adopting an ordinance before
November 1 of any year to be effective the following January 1.
The death benefit for active employees provides a lump sum payment approximately equal to the
employee's annual salary (calculated based on the employee's actual earnings, for the 12 -month
period preceding the month of death); retired employees are insured for $7,500; this coverage is
an "other postemployment benefit," or OPEB.
The Town contributes to the SDBF at a contractually required rate as determined by an annual
actuarial valuation. The rate is equal to the cost of providing one-year term life insurance. The
funding policy for the SDBF program is to assure that adequate resources are available to meet
all death benefit payments for the upcoming year; the intent is not to pre -fund retiree term life
insurance during employees' entire careers.
(continued)
62
IV. OTHER INFORMATION (Continued)
Other Postemployment Benefits (Continued)
Supplemental Death Benefits Fund (Continued)
The Town's contributions to the TMRS SDBF for the fiscal year ended 2009 is $2,141, which
equaled the required contributions. Fiscal year 2009 is a transition year for the implementation
of GASB 45; therefore, one year of contributions is disclosed.
Schedule of Contribution Rates
Annual
Actual
Plan/ Required
Contribution Percentage
Calendar Contribution
Made of ARC
Year (Rate)
(Rate) Contributed
2007 0.18% 0.18% 100%
2008 0.17% 0.17% 100%
2009 0.12% 0.12% 100%
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.
Contingent Liabilities
Litigation
The Town and Academy are currently involved in a lawsuit for wrongful termination brought by
the former head of school and his wife, a former teacher. The Town and Academy deny liability.
The lawsuit is being handled by the Academy's insurance carrier and no additional liability to
the Academy is anticipated.
Various other 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 effect the Town's financial position.
(continued)
63
IV. OTHER INFORMATION (Continued)
Contingent Liabilities (Continued)
Circle T Municipal Utility Districts
The Town has agreements in place with 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, AIL Investments, L.P. agreed to de -annex developed property from the MUDS in
exchange for pro -rata payments on water and sewer infrastructure installed by the MUD 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.
Westlake Academy Building Site
In 2002, the Town purchased 24.59 acres for the site of Westlake Academy and executed a
Promissory Note in the amount of $1,475,400 with a rate of 6% interest. The $1,475,400 was
placed into escrow in July, 2002. In July, 2003 the Escrow Agent delivered total funds in the
amount of $1,495,665 to the "Seller", leaving a balance of $68,259 at that date. The "Seller" has
informed the Town that this amount plus accrued interest is now payable. The Town is in
negotiations with the "Seller" and contends that it has satisfied the terms and the intent of the
sales agreement.
Prior Period Adiustment
A prior period adjustment in the amount of $84,508 was made on the government -wide financial
statements. This adjustment was made in order to add land of $8,500 that had not previously
been capitalized and capitalize costs of $76,008 paid but not previously capitalized.
64
REQUIRED
SUPPLEMENTARY INFORMATION
TOWN OF WESTLAKE, TEXAS
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009
EXPENDITURES
Current
General government and administration
1,778,174
General Fund
1,519,600
151,004
Public safety
1,874,789
1,976,091
1,890,469
Variance
Cultural and recreational
Budgeted Amounts
125,154
Favorable
9,384
Original
Amended
Actual
(Unfavorable)
REVENUES
Economic development
500,211
210,758
229,907
Taxes
Capital Outlay
97,500
75,500
62,278
Sales
$ 1,664,352
$ 1,700,000 $
1,832,205
$ 132,205
Mixed beverages
13,300
17,750
17,869
119
Franchise
643,780
646,675
624,401
( 22,274)
Federal program revenues
5,865
180
-
( 180)
Interest income
54,500
21,950
21,155
( 795)
Building permits and fees
1,610,175
2,547,570
848,697
( 1,698,873)
Fines and penalties
650,883
547,460
523,515
( 23,945)
Contributions from others
-
38,840
38,840
-
Other miscellaneous income
57,282
90,511
98,242
7,731
Total revenues
4,700,137
5,610,936
4,004,924
( 1,606,012)
EXPENDITURES
Current
General government and administration
1,778,174
1,670,604
1,519,600
151,004
Public safety
1,874,789
1,976,091
1,890,469
85,622
Cultural and recreational
119,790
125,154
115,770
9,384
Public works
511,468
523,895
378,508
145,387
Economic development
500,211
210,758
229,907
( 19,149)
Capital Outlay
97,500
75,500
62,278
13,222
Total expenditures
4,881,932
4,582,002
4,196,532
385,470
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
( 181,795)
1,028,934
( 191,608)
( 1,220,542)
OTHER FINANCING SOURCES (USES)
Transfers in
402,500
422,500
388,599
( 33,901)
Transfers out
( 162,400)
( 303,685)
( 278,417)
25,268
Total other financing sources (uses)
240,100
118,815
110,182
( 8,633)
NET CHANGE IN FUND BALANCE
58,305
1,147,749
( 81,426)
( 1,229,175)
FUND BALANCE, BEGINNING
2,806,738
2,806,738
2,806,738
-
FUND BALANCE, ENDING
$ 2,865,043
$ 3,954,487
$ 2,725,312
$( 1,229,175)
65
TOWN OF WESTLAKE, TEXAS
VISITORS ASSOCIATION FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009
REVENUES
Taxes
Hotel occupancy
Interest income
Other miscellaneous income
Total revenues
EXPENDITURES
Visitors services
Total expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers out
Total other financing sources (uses)
NET CHANGE IN FUND BALANCE
FUND BALANCE, BEGINNING
FUND BALANCE, ENDING
Budgeted Amounts
Original Amended
$ 450,000
28,000
51,000
529,000
474,477
474,477
$ 450,000
8,200
53,275
511,475
496,617
496,617
Actual
$ 497,769
7,835
34,019
539,623
341,270
341,270
Variance
Favorable
(Unfavorable)
$ 47,769
( 365)
( 19,256)
28,148
155,347
155,347
54,523
14,858
198,353
183,495
(640,050)
( 663,626)
( 404,561)
259,065
( 640,050)
( 663,626)
( 404,561)
259,065
( 585,527)
( 648,768)
( 206,208)
442,560
1,451,154
1,451,154
1,451,154
-
$ 865,627
$ 802,386
$ 1,244,946
$ 442,560
66
TOWN OF WESTLAKE, TEXAS
WESTLAKE ACADEMY
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED AUGUST 31, 2009
REVENUES
State program revenues
Federal program revenues
Interest income
Other miscellaneous income
Total revenues
EXPENDITURES
Education
Debt Service
Principal Retirement
Interest
Total expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Proceeds from Capital Leases
Transfers out
Total other financing sources (uses)
NET CHANGE IN FUND BALANCE
FUND BALANCE, BEGINNING
FUND BALANCE, ENDING
Budgeted Amounts
Original
Amended
$ 3,125,666
$ 3,132,603
61,768
57,440
-
5,500
540,212
575,855
3,727,646
3,771,398
3,558,159
42,000
3,776,222
78,413
4,578
3,859,213
Actual
$ 3,163,129
56,134
4,617
534,375
3,758,255
3,722,705
78,937
4,054
3,805,696
Variance
Favorable
(Unfavorable)
$ 30,526
( 1,306)
( 883)
( 41,480)
( 13,143)
53,517
( 524)
127,487
( 87,815)
( 47,441) (
40,374)
-
124,487
117,640
6,847
-
( 212,500)
( 200,000)
12,500
-
( 88,013)
( 82,360) (
5,653)
127,487
( 175,828)
( 129,801)
46,027
634,454
634,454
634,454
-
S 761,941
$ 458,626
$ 504,653 $
46,027
67
TOWN OF WESTLAKE, TEXAS
FM 1938 FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009
REVENUES
Contributions
Total revenues
EXPENDITURES
Public Works
Total expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Total other financing sources (uses)
NET CHANGE IN FUND BALANCE
FUND BALANCE, BEGINNING
FUND BALANCE, ENDING
Budgeted Amounts
Original Amended
$ 218,211
218,211
Variance
Favorable
Actual (Unfavorable)
$ 360,938 $ 142,727
360,938 142,727
294,781 463,314 ( 168,533)
294,781 463,314 ( 168,533)
( 76,570) ( 102,376) ( 25,806)
- - 25,814 25,814
- 25,814 25,814
- ( 76,570) ( 76,562) 8
76,570 76,570 76,570 -
$ 76,570 $ - $ 8 $ 8
68
TOWN OF WESTLAKE, TEXAS
PROPERTY TAX REDUCTION FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009
REVENUES
Taxes
Sales
Interest income
Total revenues
EXPENDITURES
General government
Total expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers out
Total other financing sources (uses)
NET CHANGE IN FUND BALANCE
FUND BALANCE, BEGINNING
FUND BALANCE, ENDING
Variance
Budgeted Amounts Favorable
Original Amended Actual (Unfavorable)
$ 832,176 $ 850,000 $ 916,102 $ 66,102
7,500 5,000 4,728 ( 272)
839,676 855,000 920,830 65,830
839,676
855,000
920,830
65,830
( 325,000)
( 325,000)
( 358,461) (
33,461)
( 325,000)
( 325,000)
( 358,461) (
33,461)
514,676
530,000
562,369
32,369
505,665
505,665
505,665
-
$ 1,020,341
$ 1,035,665
$ 1,068,034 $
32,369
69
TOWN OF WESTLAKE, TEXAS
LONE STAR PUBLIC FACILITY CORPORATION
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009
REVENUES
Interest income
Total revenues
EXPENDITURES
General government
Total expenditures
NET CHANGE IN FUND BALANCE
FUND BALANCE, BEGINNING
FUND BALANCE, ENDING
Budgeted Amounts
Original Amended
Variance
Favorable
Actual (Unfavorable)
$ 110 $ 10
100 110 10
- 100 110 10
13,459 13,459 13,459 -
$ 13,459 $ 13,559 $ 13,569 $ 10
70
TOWN OF WESTLAKE, TEXAS
4B ECONOMIC DEVELOPMENT CORPORATION
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009
REVENUES
Taxes
Sales
Interest income
Total revenues
EXPENDITURES
General government
Total expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers out
Total other financing sources (uses)
NET CHANGE IN FUND BALANCE
FUND BALANCE, BEGINNING
FUND BALANCE, ENDING
71
Variance
Budgeted Amounts
Favorable
Original
Amended
Actual
(Unfavorable)
$ 832,176
$ 850,000
$ 916,102
$ 66,102
-
1,100
1,139
39
832,176
851,100
917,241
66,141
66,141
917,241
832,176
851,100
( 861,907)
( 880,731)
( 1,132,726)
( 251,995)
( 861,907)
( 880,731)
( 1,132,726)
( 251,995)
( 29,731)
( 29,631)
( 215,485)
( 185,854)
512,793
512,793
512,793
-
$ 483,062
$ 483,162
$ 297,308
$( 185,854)
71
TOWN OF WESTLAKE, TEXAS
VEHICLE/EQUIPMENT REPLACEMENT FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009
REVENUES
Building permits and fees
Total revenues
EXPENDITURES
Capital Outlay
Total expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Total other financing sources (uses)
NET CHANGE IN FUND BALANCE
FUND BALANCE, BEGINNING
FUND BALANCE, ENDING
Budgeted Amounts
Original Amended
6,900
6,900
14,000
14,000
Actual
$ 12,000
12,000
1,954
1,954
Variance
Favorable
(Unfavorable)
$ 12,000
12,000
12,046
12,046
( 6,900)
( 14,000)
10,046
24,046
56,900
64,000
51,954
( 12,046)
56,900
64,000
51,954
( 12,046)
50,000
50,000
62,000
12,000
$ 50,000
72
$ 50,000 $ 62,000 $ 12,000
TOWN OF WESTLAKE, TEXAS
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
SEPTEMBER 30, 2009
(Unaudited)
BUDGETARY INFORMATION - The Town follows these procedures annually in establishing
the budgetary data reflected in the budgetary comparison schedules:
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 accepting 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 recoded 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 reappropriated and
honored during the subsequent year.
Expenditures exceeded appropriations in the Economic Development function of the General
Fund. The excess was covered by unspent budget in other functions and available fund
balances. Expenditures exceeded appropriations in the FM 1938 Fund for the year. The
deficit was covered by operating transfers in from other funds and contributions. In addition,
transfers out exceeded appropriations in the Property Tax Reduction Fund and 4B Economic
Development Corporation Fund. These deficits were covered by additional collections of
revenue.
73
INDIVIDUAL FUND SCHEDULE
TOWN OF WESTLAKE, TEXAS
DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009
REVENUES
Contributions
Total revenues
EXPENDITURES
Debt service
Principal retirement
Interest and other fiscal charges
Total expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Total other financing sources (uses)
NET CHANGE IN FUND BALANCE
FUND BALANCE, BEGINNING
FUND BALANCE, ENDING
74
Final Budgeted
Amounts Actual
Variance
Favorable
(Unfavorable)
644,573
515,000
129,573
857,384
986,587 (
129,203)
1,501,957
1,501,587
370
( 1,501,957)
( 1,501,587)
370
1,501,957
1,501,587 (
370)
1,501,957
1,501,587
370)
STATISTICAL SECTION
STATISTICAL SECTION
(Unaudited)
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
These schedules contain trend information to help the reader understand
how the Town's financial performance and well-being have changed
over time. 75-80
Revenue Capacity
This schedule contains 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 Table 5. 81
Debt Capacity
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. 82-83
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the
reader understand the environment within which the Town's financial
activities take place. 84-85
Operating Information
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. 86-88
Sources: Unless otherwise noted, the information in these schedules is derived from annual
financial reports for the relevant year.
Governmental activities:
Invested in capital assets, net of related debt
Restricted
Unrestricted
Total governmental activities net assets
Business -type activities:
Invested in capital assets, net of related debt
Unrestricted
Total business -type activities net assets
Primary government:
Invested in capital assets, net of related debt
Restricted
Unrestricted
Total primary government net assets
Table I
TOWN OF WESTLAKE, TEXAS
NET ASSETS BY COMPONENT
LAST FIVE FISCAL YEARS
(Accrual Basis of Accounting- unaudited)
Fiscal Year
2005 2006 2007 2008 2009
$ 7,975,910
$
9,171,657
$
9,646,644
$
10,313,743
$
13,244,689
-
1,406,756
1,719,771
2,004,763
1,773,068
1,557,394
3,023,875
3,305,542
3,835,751
4,110,185
$ 9,533,304
$
13,602,288
$
14,671,957
$
16,154,257
$
19,127,942
$ 8,450,781
$
8,436,729
$
8,097,807
$
7,726,576
$
7,349,032
( 1,621,273)
(
1,846,851)
(
2,008,243)
( 1,997,281)
(
1,945,578)
$ 6,829,508
$
6,589,878
$
6,089,564
$
5,729,295
$
5,403,454
$ 16,426,691
$
17,608,386
$
17,744,451
$
18,040,319
$
20,593,721
-
1,406,756
1,719,771
2,004,763
1,773,068
( 63,879)
1,177,024
1,297,299
1,838,470
2,164,607
$ 16,362,812
$
20,192,166
$
20,761,521
$
21,883,552
$
24,531,396
Note: The Town began to report accrual information when it implemented GASB Statement 34 in fiscal year 2004.
Source: Annual financial reports
75
EXPENSES
Governmental activities:
General government
Public Safety
Cultural and Recreational
Economic Development
Public Works
Visitor Services
Education
Interest on long-term debt
Total governmental activities expenses
Business -type activities:
Water and Sewer
Cemetery
Total business -type activities expenses
Total primary government program expenses
PROGRAM REVENUES
Governmental activities:
Fees, fines, and charges for services:
General Government
Public Safety
Public Works
Education
Operating grants and contributions
Capital grants and contributions
Total governmental activities program revenues
Business -type activities:
Charges for services:
Water and Sewer
Cemetery
Operating grants and contributions
Capital grants and contributions
Total business -type activities program revenues
Total primary government program revenues
TOWN OF WESTLAKE, TEXAS
CHANGES IN NET ASSETS
LAST FIVE FISCAL YEARS
(Accrual basis of accounting - Unaudited)
2005
$ 2,162,365
1,592,962
96,617
349,208
342,500
448,604
2,166,256
1,028,104
8,186,616
Fiscal Year
2006 2007 2008
$ 1,811,281
1,705,528
91,444
35,759
613,956
393,115
2,249,998
1,021,779
7,922,860
$ 1,941,289
1,738,080
86,560
120,753
455,481
217,992
2,672,698
869,327
8,102,180
$ 2,031,460
1,795,782
129,641
473,451
1,013,804
312,777
3,305,220
991,184
10,053,319
1,888,064 2,137,831 2,206,618 2,410,765
- - - 13,299
1,888,064 2,137,831 2,206,618 2,424,064
$ 10,074,680 $ 10,060,691 $ 10,308,798 $ 12,477,383
Table 2
2009
$ 2,203,882
1,939,441
115,770
207,044
1,028,934
341,270
3,722,705
1,068,935
10,627,981
2,694,407
A-7'1
G,by4,bbU
$ 13,322,861
$ 1,039,214 $
742,176 $
785,771 $
522,215 $
677,948
45,213
13 6, 870
165,255
113,755
107,634
711,655
699,753
625,340
902,875
594,338
39,430
98,357
85,925
42,839
98,314
1,646,438
3,686,964
1,257,058
1,296,378
1,522,935
141,139
1,455,626
-
-
2,059,624
3,623,089
6,819,746
2,919,349
2,878,062
5,060,793
1,722,659
370,551
G,V7 J,G 1 V
$ 5,716,299
1,842,238
19,653
1,OV1,071
$ 8,681,637
76
1,657,186
1,VJ /,1 OV
$ 4,576,535
2,037,306
2,100
169,034
2,208,440
$ 5,086,502
2,345,236
G,JYJ,GJ V
$ 7,406,029
(Continued)
Note: The Town began to report accrual information when it implemented GASB Statement 34 in fiscal year 2004.
Source: Annual financial reports
77 (Concluded)
Table 2
TOWN OF WESTLAKE, TEXAS
CHANGES IN NET ASSETS
LAST FIVE FISCAL YEARS
(Accrual basis of accounting - Unaudited)
Fiscal Year
2005
2006
2007
2008
2009
NET (EXPENSE) REVENUES
Governmental activities
$( 4,563,527)
$( 1,103,114)
$( 5,182,831)
$( 7,175,257)
$( 5,567,188)
Business -type activities
205,146
( 275,940)
( 549,432)
( 215,624)
( 349,644)
Total primary government net expense
( 4,358,381)
( 1,379,054)
( 5,732,263)
( 7,390,881)
( 5,916,832)
GENERAL REVENUES AND OTHER
CHANGES IN NET ASSETS
Governmental activities:
Taxes
Sales
$ 994,606
$ 1,810,706
$ 2,197,756
$ 3,590,575
$ 3,664,409
Hotel Occupancy
381,221
415,544
458,471
527,662
497,769
Mixed Beverage
13,846
13,674
14,066
16,177
17,869
Franchise
352,115
457,004
560,312
649,108
624,401
Unrestricted grants and contributions
1,722,198
1,822,200
2,259,643
2,500,817
2,960,590
Investment earnings
41,802
98,824
261,622
188,459
61,224
Miscellaneous
64,047
448,827
466,654
564,973
568,782
Transfers
71,857
45,319
33,976
220,819
61,321
Total governmental activities
3,641,692
5,112,098
6,252,500
8,258,590
8,456,365
Business -type activities:
Investment earnings
2,416
25,604
46,158
32,103
7,858
Miscellaneous
-
56,025
36,936
44,071
77,266
Transfers
( 71,857)
( 45,319)
( 33,976)
( 220,819)
( 61,321)
Total business -type activities
( 69,441)
36,310
49,118
( 144,645)
23,803
Total primary government
3,572,251
5,148,408
6,301,618
8,113,945
8,480,168
CHANGE IN NET ASSETS
Governmental activities
( 921,835)
4,008,984
1,069,669
1,083,333
2,889,177
Business -type activities
135,705
( 239,630)
( 500,314)
( 360,269)
( 325,841)
Total primary government
$( 786,130)
$ 3,769,354
$ 569,355
$ 723,064
$ 2,563,336
Note: The Town began to report accrual information when it implemented GASB Statement 34 in fiscal year 2004.
Source: Annual financial reports
77 (Concluded)
Table 3
TOWN OF WESTLAKE, TEXAS
FUND BALANCES
GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(Modified Accrual Basis of Accounting - unaudited)
Fiscal Year
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
General fund
Reserved $ - $ - $ - $ - $ 329,608 $ 131,657 $ 434,375 $ 563,176 $ 303,639 $ 193,105
Unreserved 1,907,021 2,006,348 1,700,025 1,608,248 670,465 805,769 2,850,789 2,533,123 2,503,099 2,532,207
Total general fund $ 1,907,021 $ 2,006,348 $ 1,700,025 $ 1,608,248 $ 1,000,073 $ 937,426 $ 3,285,164 $ 3,096,299 $ 2,806,738 $ 2,725,312
All other governmental funds
Reserved
Special revenue funds
Capital projects funds
Unreserved, reported in:
Special revenue funds
$ 4,843,690 $ 6,002,623 $ 5,287,758 $ 539,019 $ 818,525 $ 779,244 $ 869,694 $ 1,183,020 $ 1,527,724 $ 1,256,954
- - 11,071,320 2,748,579 213,297 - 102,687 102,376 3,233,471 323,009
12,391 181,960 427,720 846,214 1,666,371 1,933,564
Total all other governmental funds $ 4,843,690 $ 6,002,623 $ 16,359,078 $ 3,287,598 $ 1,044,213 $ 961,204 $ 1,400,101 $ 2,131,610 $ 6,427,566 $ 3,513,527
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 413 Economic Development Corporation and Lone Star Public Facility Corporation funds are now classified as blended component units.
Source: Annual financial reports - no audits were available prior to fiscal year 2000.
78
Table 4
TOWN OF WESTLAKE, TEXAS
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(Modified Accrual Basis of Accounting - unaudited)
Fiscal Year
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
REVENUES
Taxes $ 3,086,618 $ 2,663,738 $
Licenses, fees and permits 477,849 700,313
Fines and penalties
7,867
748,016
State program revenues
1,108,083
860,697
Federal program revenues
1,007,142
751,036
Investment earnings
349,321
343,107
Contributions
1,597,362
1,925,043
Otherrevenues
102,380
1,475
Total revenues
4,024,035
3,708,633
EXPENDITURES
75,207
56,134
General government
1,834,741
857,217
Public safety
-
409,512
Cultural and recreational
-
5,967
Economic development
-
661,077
Public works
-
-
Protective inspection
-
-
Visitor services
-
-
Education
-
-
Debt service
131,395
172,542
Principal
-
-
Interest
-
-
Bond issuance cost
-
-
Capital outlay
-
174,959
Total expenditures
1,834,741
2,108,732
EXCESS (DEFICIENCY)
-
350,000
OF REVENUES OVER
395,000
593,937
(UNDER) EXPENDITURES $
2,189,294 $
1,599,901
1,863,255 $
253,919
401,755
351,243
1,874,312 $
508,154
548,375
53,309
311,298
151,591
233,675 16,099
3,103,847 3,463,138
1,656,628 $ 1,741,788 $ 2,696,928 $ 3,230,605 $ 4,783,522 $ 4,804,448
802,060
740,027
748,016
900,121
1,108,083
860,697
680,794
1,007,142
751,036
651,090
554,376
523,515
995,784
1,597,362
1,925,043
2,387,733
2,673,680
3,163,129
4625315
285,392
755662
49,200
75,207
56,134
33,180
41,786
98,824
261,622
188,459
61,224
1,286,611
1,324,264
4,964,085
1,079,768
1,048,308
1,264,262
184,221
292,690
547,184
552,579
607,812
673,400
6,101,593
7,030,451
11,806,778
9,112,718
11,039,447
11,406,809
1,592,597
1,087,368
1,725,211
2,243,162
2,542,295
1,385,492
1,516,346
1,519,600
1,007,589
1,282,112
1,547,857
1,554,115
1,627,641
1,665,879
1,731,317
1,890,469
10,472
14,043
95099
96,617
91,444
86,560
1295641
115,770
1,093,673
56,832
53,006
35,758
35,759
141,197
495,071
229,907
-
68,979
1255499
112,764
434,716
276,789
8465604
841,822
-
187,922
80,935
-
-
-
-
-
-
131,395
172,542
448,604
393,115
226,992
312,777
341,270
-
156,870
1,368,113
1,877,398
2,249,998
2,672,698
3,305,220
3,722,705
-
1,475,400
-
-
350,000
470,000
395,000
593,937
78,012
836,533
986,534
1,028,104
1,028,634
1,240,950
9235944
990,641
-
-
-
-
-
-
33,000
-
1,344,137
14,096,533
2,917,185
263,681
371,860
836,787
463,918
4,335,114
5,126,480
19,393,987
8,985,981
7,660,203
9,125,462
9,003,344
10,152,838
14,581,235
$( 2,022,633)
$(15,930,849)
$( 2,884,388)
$( 629,752) $
2,681,316 $
109,374
$ 886,609
$( 3,174,426)
79
(Continued)
Table 4
TOWN OF WESTLAKE, TEXAS
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(Modified Accrual Basis of Accounting - unaudited)
Fiscal Year
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
OTHER FINANCING
SOURCES (USES):
Proceeds from sale of land $ -
Issuance of debt -
Refunding bonds issued -
Payments to bond escrow age -
Cost to issue debt -
Proceeds from capital lease -
Transfer in from component i -
Transfers in 83,366
Transfers out ( 757,476)
Total other financing
sources (uses) ( 674,1 10)
$ - $ - $ - $ - $ 412,239 $ - $ - $ - $ -
12,400,000 6,351,613 - - - - 2,500,000 117,640
- - - - - 7,465,000 - -
- - - - ( 7,088,706) - -
( 451,613) - - - - - -
- - - - 23,000 - -
1,155,912 - - - - - -
588,852 225,000 - 172,010 704,577 1,212,558 2,160,174 2,435,486
( 588,852) ( 225,000) - ( 100,153) ( 659,258) ( 1,178,582) ( 1,939,355) ( 2,374,165)
12,400,000 7,055,912 - 484,096 45,319 433,270 2,720,819 178,961
Prior period adjustment - - - - 32,828 - 60,000 - - -
Correction of an error - - (327,235) - - - - - - -
NET CHANGES IN
FUND BALANCES $ 1,515,184 $ 1,599,901 $ 10,050,132 $( 8,874,937) $( 2,851,560) $( 145,656) $ 2,786,635 $ 542,644 $ 3,607,428 $( 2,995,465)
DEBT SERVICE AS
A PERCENTAGE
OF NONCAPITAL
EXPENDITURES - % - % 2.1% 43.6% 16.3% 13.9% 15.7% 21.0% 14.0% 15.5%
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 80 (Concluded)
TOWN OF WESTLAKE, TEXAS
TAXABLE SALES BY INDUSTRY TYPE
LAST FOUR FISCAL YEARS
(Unaudited)
Table 5
2009
210
20
185,819
411,718
95,395
72,034
445,839
2,784
355,603
64,994
123,191
156,385
15,102
2,984
175,517
54,416
1,490
$ 3,623,538 $ 2,992,308 $ 2,719,431 S 2,163,501
Town direct sales tax rate 2.00% 2.00% 2.00% 2.00%
Note: Information on sales tax by NAICS was not available prior to 2006. Comparison will be made to the prior
year until ten-year prior comparison can be made.
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.
Source: Texas State Comptroller reports
81
Fiscal Year
NAICS
Industry Type
2006
2007
2008
11
Agriculture, Forestry, Fishing and Hunting $
31 $
67
$ 54
21
Mining
2,321
-
1,012
22
Utilities
463,222
212,336
194,359
23
Construction
81,542
200,791
635,134
31-33
Manufacturing
1,120,328
360,010
186,128
42
Wholesale Trade
248,702
284,082
178,003
44-45
Retail
408,556
253,293
493,309
48-49
Transportation and Warehousing
63
491
-
51
Information
538,210
223,672
246,591
52
Financial and Insurance
10,162
343,446
120,187
53
Real Estate and Rental and Leasing
178,047
204,398
102,515
54
Professional, Scientific, and Technical Services
111,746
452,018
180,288
56
Admin and Support and Waste Mgmt & Remediation Sry
245,562
45,809
105,811
61
Education Services
895
317
85
62
Health Care and Social Assistance
10
-
109
71
Arts, Entertainment and Recreation
49,474
224,101
177,446
72
Accommodation and Food Services
34,021
57,084
65,779
81
Other Services (except Public Administration)
130,476
130,392
32,621
92
Public Administration
170
-
-
Table 5
2009
210
20
185,819
411,718
95,395
72,034
445,839
2,784
355,603
64,994
123,191
156,385
15,102
2,984
175,517
54,416
1,490
$ 3,623,538 $ 2,992,308 $ 2,719,431 S 2,163,501
Town direct sales tax rate 2.00% 2.00% 2.00% 2.00%
Note: Information on sales tax by NAICS was not available prior to 2006. Comparison will be made to the prior
year until ten-year prior comparison can be made.
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.
Source: Texas State Comptroller reports
81
Fiscal
Year
2002
2003
2004
2005
2006
2007
2008
2009
Note:
Table 6
TOWN OF WESTLAKE, TEXAS
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
LAST EIGHT FISCAL YEARS
General Bonded Debt Outstanding
Percentage
General
Certificates
of Actual
Obligation
of
Taxable
Per
Bonds
Obligation
Total
Sales
Capita
$ -
$ 12,400,000 $
12,400,000
21.00%
289 $
42,907
-
18,810,000
18,810,000
15.77%
303
62,079
-
18,810,000
18,810,000
21.31%
328
57,348
-
18,810,000
18,810,000
18.91%
355
52,986
-
18,460,000
18,460,000
10.19%
698
26,447
7,365,000
11,755,000
19,120,000
13.05%
703
27,198
9,850,000
11,375,000
21,225,000
11.82%
785
27,038
9,735,000
10,975,000
20,710,000
11.30%
785
26,382
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 8 for population data.
82
Table 7
TOWN OF WESTLAKE, TEXAS
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
(Unaudited)
83
Business -Type
Governmental Activities
Activities
General Certificates
Total
Percentage
Fiscal
Obligation of Capital
Other
Other
Primary
of Personal
Per
Year
Bonds Obligation Leases
Obligations
Obligations
Government
Income
Capita
2000
$ - $ - $ -
$ -
$ 4,679,944
$ 4,679,944
54%
$ 22,608
2001
- - -
-
6,145,944
6,145,944
55%
24,102
2002
- 12,400,000 -
373,230
6,113,904
18,887,134
146%
65,353
2003
- 18,810,000 -
287,417
6,100,577
25,197,994
180%
83,162
2004
- 18,810,000 -
303,943
6,027,387
25,141,330
161%
76,650
2005
- 18,810,000 -
285,662
5,980,921
25,076,583
144%
70,638
2006
- 18,460,000 -
266,329
5,878,381
24,604,710
70%
35,250
2007
7,365,000 11,755,000 24,993
245,885
5,822,299
25,213,177
69%
35,865
2008
9,850,000 11,375,000 16,662
240,927
5,763,022
27,245,611
65%
34,708
2009
9,735,000 10,975,000 8,331
201,402
5,734,192
26,653,925
62%
33,954
Note:
Details regarding the Town's outstanding debt can be found in the notes to the financial
statements.
No debt wa.,
issued until fiscal year 2000.
See Table 8 for personal income and population
data.
83
Calendar
Year
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Sources
Note:
Table 8
TOWN OF WESTLAKE, TEXAS
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
(Unaudited)
84
Per Capita
Tarrant County
Estimated Personal
Personal
Unemployment
Population Income
Income
Rate
207 $ 8,743,059 $
42,237
3.6%
255 11,093,548
43,504
4.5%
289 12,949,868
44,809
6.1%
303 13,984,514
46,154
6.3%
328 15,592,502
47,538
5.6%
355 17,382,312
48,964
5.1%
698 35,202,364
50,433
5.0%
703 36,518,166
51,946
4.5%
785 42,001,086
53,505
5.2%
785 43,261,118
55,110
7.7%
Population for 2000 is from the 2000 census. The Town took over
the utilility billing
in 2004 and
estimated the population by using number of residential water accounts
and assuming
a 2.5 average
household size. Fiscal Years 2001 through 2003 are estimated.
Tarrant County Unemployment Rate information taken from Texas Workforce Commission.
Due to the size of the Town, per capita personal income was not
available except for information taken
from the 2000 census. Estimates have been made based on a 3%
annual increase in cost of living.
84
Table 9
TOWN OF WESTLAKE, TEXAS
PRINCIPAL EMPLOYERS
CURRENT FISCAL YEAR
(Unaudited)
2009
Percentage
of Estimated
Total Town
Employer Employees Employment
Fidelity Investments
2,477
35.96%
First American Real Estate Solutions
2,000
29.03%
Wells Fargo
500
7.26%
Chrysler Financial
850
12.34%
McKesson Corporation
204
2.96%
Marriott Solana Hotel
131
1.90%
Walco International
150
2.18%
Vaquero Club
123
1.79%
Levi Strauss
83
1.20%
Town of Westlake/Westlake Academy
83
1.20%
Solana Club
50
0.73%
Pfizer, Inc.
50
0.73%
Total 6,651 97%
Note: Information on the Principal Employers from 1999 is not available. Information will be accumulated over the
next ten years until a ten-year prior comparison can be made.
Source: Maguire Partner's tenant records and contact with employers of the Town
85
Table 10
TOWN OF WESTLAKE, TEXAS
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES
BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
(Unaudited)
Function/Program 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
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 to town manager -
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
Administrative -
0.50
1.50
1.50
0.50
0.50
0.50
-
-
0.75
Building official -
-
-
-
1.00
1.00
1.00
1.00
1.00
1.33
Town secretary 0.50
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
Facilities/grounds maintenance -
-
-
-
0.50
0.50
0.50
0.50
0.75
1.08
Municipal -
-
2.00
2.00
3.50
3.75
3.75
4.00
4.00
4.25
Finance -
-
1.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
Payroll/human resources -
-
-
-
-
-
-
-
1.00
1.33
Public safety (EMS) -
-
1.00
10.00
10.00
10.00
11.00
11.00
11.00
10.00
Culture and recreation -
-
-
-
0.50
0.50
0.50
0.50
0.75
0.75
Public works -
-
-
-
1.00
1.00
1.00
1.00
1.50
1.50
Marketing and public affairs -
-
-
-
1.00
1.00
1.00
-
-
-
Education -
-
-
-
20.50
29.00
34.60
38.10
43.20
48.20
Total 1.50
3.50
8.50
19.50
44.50
53.25
59.85
62.10
69.20
75.19
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.
86
Table 11
TOWN OF WESTLAKE, TEXAS
OPERATING INDICATORS
BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
(Unaudited)
Function/Program
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
General govemmem
Building permits issued
N/A
13
19
27
54
53
36
64
60
49
Building permit values
N/A
$ 8,684,000
$ 12,495,020
$ 23,620,817
$ 46,698,935
$ 56,415,093
$ 42,910,780
$ 46,923,814
$ 180,707,159
$ 39,278,318
Police (Contract with Keller PD;
Motor vehicle stops
31968
3,968
3,968
9,993
9,237
9,586
8,992
10,045
10,357
9,247
Traffic accident investigation;
86
86
86
91
180
163
164
225
208
266
Part I crimes
16
16
16
46
19
26
30
25
26
23
DWI arrests
55
55
55
117
70
86
56
53
45
24
Fire/EMS
Fire runs
N/A
N/A
N/A
108
78
148
136
153
169
118
Ambulance runs
N/A
N/A
N/A
150
115
135
207
251
159
184
Inspections
N/A
N/A
N/A
N/A
N/A
89
161
96
132
15
Public Works - General
Street resurfacing (sq. footage:
-
-
-
1.65
1.30
-
1.35
1.01
-
-
Potholes repaired
-
-
-
-
40
40
20
0
20
10
Public Works - Utility
Number of water consumer;
N/A
67
102
130
177
271
338
386
419
437
Water main breaks
N/A
N/A
N/A
N/A
1
3
3
2
4
5
Avg daily consumption MG (water;
0.054
0.269
0.404
0.382
0.501
0.817
1.031
0.729
0.999
1
Peak daily consumption MG (water;
N/A
2.203
1.820
1.244
1.423
2.198
2.677
1.978
2.060
3
System capacity - MG (water;
0.685
0.685
0.685
0.685
1.685
1.685
1.685
1.685
1.685
2
Water purchased (in gallons x 000)
19,554
98,229
147,423
138,288
183,356
298,124
376,264
266,158
364,764
372,933
Water sold (in gallons x 1000)
N/A
N/A
154,702
127,998
150,869
230,657
338,085
246,280
340,743
313,495
Wastewater
Number of new sewer connection!
N/A
40
75
105
139
179
211
235
240
251
Avg daily sewage treatment
0.0302
0.0490
0.0630
0.0610
0.0710
0.0950
0.1270
0.1320
0.1370
0.124
(thousands of gallons)
Source: Various Town department:
Notes: N/A represents information
that is
unavailable
First year for the water/sewer system was fiscal year 2001
87
Table 12
TOWN OF WESTLAKE, TEXAS
CAPITAL ASSET STATISTICS
BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
(Unaudited)
Function/Program
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Fire
Stations
-
-
-
l
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
2
2
2
2
2
Telecommunications Duct Bank (LF)
-
-
21,573
24,073
36,703
38,303
38,303
38,303
43,703
49,103
Telecommunications Duct Bank Manholes
-
-
53
58
91
95
95
95
104
113
Water
Water mains (LF)
13,000
24,000
34,000
48,000
52,000
57,500
58,300
59,200
64,600
70,000
Fire hydrants
5
10
24
55
76
95
119
119
130
130
Storage capacity MG
0.685
0.685
0.685
0.685
1.685
1.685
1.684
1.685
1,685
1.685
Wastewater
Sanitary sewers (LF)
1,500
8,700
15,300
18,100
20,000
15,000
35,000
35,000
39,300
39,300
Manholes
10
20
50
115
160
200
250
250
267
284
Public Works - Utility
Streets (miles)
10.50
10.50
10.80
10.80
10.80
10.80
10.80
10.80
10.80
10.80
Highways (miles)
-
-
-
-
-
-
-
-
-
-
Streetlights
-
-
-
-
-
-
-
-
-
-
Traffic signals (school zone flashers)
-
-
-
2
2
2
2
2
2
2
Parks and recreation
Acreage
13.5
13.5
13.5
13.5
13.5
13.5
18.5
18.5
25.0
25.0
Playgrounds
-
-
2
2
2
2
2
2
2
2
Softball/soccer field
-
-
1
1
1
1
1
1
1
1
Football field
-
-
-
-
-
-
-
-
1
1
Source: Various Town departments
Note: No capital asset indicators are available for the general government.
88
COMPLIANCE SECTION
lvk�*Kl
PATTILLO, BROWN & HILL,L.L.P.
CERTIFIED PUBLIC ACCOUNTANTS ■ BUSINESS CONSULTANTS
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT A UDITING STANDARDS
Town Council
Town of Westlake, Texas
3 Village Circle, Suite 202
Westlake, Texas 76262
Members of the Council:
We have audited the financial statements of the governmental activities, the business -type
activities, each major fund, and the aggregate remaining fund information of the Town of Westlake,
Texas, (the "Town") as of and for the year ended September 30, 2009, which collectively comprise the
Town's basic financial statements and have issued our report thereon dated March 10, 2010. 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.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the Town's internal control over financial
reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on
the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the
Town's internal control over financial reporting. Accordingly, we do not express an opinion on the
effectiveness of the Town's internal control over financial reporting.
A control deficiency exists when the design or operation of a control does not allow management
or employees, in the normal course of performing their assigned functions, to prevent or detect
misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of
control deficiencies, that adversely affects the Town's ability to initiate, authorize, record, process, or
report financial data reliably in accordance with generally accepted accounting principles such that there
is more than a remote likelihood that a misstatement of the Town's financial statements that is more than
inconsequential will not be prevented or detected by the Town's internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that
results in more than a remote likelihood that a material misstatement of the financial statements will not
be prevented or detected by the Town's internal control.
89
115 SOUTH CHURCH STREET ■ HILLSBORO, TX 76645 ■ (254) 582-2583 ■ FAX: (254) 582-5731 ■ www.pbhcpa.com
AFFILIATE OFFICES: BROWNSVILLE, TX (956) 544-7778 ■ TEMPLE, TX (254) 791-3460 ■ WACO, TX (254) 772-4901
WHITNEY, TX (254) 694-46000 ALBUQUERQUE, NM (505) 266-5904
Our consideration of internal control over financial reporting was for the limited purpose
described in the preceding paragraph and would not necessarily identify all deficiencies in internal
control over financial reporting that might be significant deficiencies or material weaknesses. We did
not identify any deficiencies in internal control over financial reporting that we consider to be material
weaknesses, as defined above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Town's financial statements are free
of material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements, noncompliance with which could have a direct and material
effect on the determination of financial statement amounts. However, providing an opinion on
compliance with those provisions was not an objective of our audit, and accordingly, we do not express
such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that
are required to be reported under Government Auditing Standards.
This report is intended solely for the information and use of management, the Town Council, and
federal and state awarding agencies and pass-through entities and is not intended to be and should not be
used by anyone other than these specified parties.
P a W"
0
a 8_4� 1
March 10, 2010
90