HomeMy WebLinkAboutRes 08-17 Approving the Comprehensive Annual Financial Report Year Ending September 30, 2007II I[I1111,10[II WLIAII1 BPI 0
RESOLUTION NO. 08-17
APPROVING THE FISCAL YEAR 2006/2007 ANNUAL AUDIT REPORT FROM
PATTILLO, BROWN & HILL, L.L.P.
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. was selected and approved
by the Board of Aldermen on July 12, 2006 to perform the Town of Westlake's financial
audit for the year ended September 30, 2007;
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF ALDERMEN OF
THE TOWN OF WESTLAKE:
SECTION 1: That the Board of Aldermen does hereby approve the fiscal year
2006/2007 annual audit report from Pattillo, Brown & Hill, L.L.P., attached as Exhibit
"A",
SECTION 2: That this Resolution shall become effective upon the date of its
passage.
PASSED AND APPROVED ON THIS 24TH DAY OF MARCH 2008.
ATTEST:
izn Sutter, TRMC, Town Secretary
Scott Bradley, Mayor
J e ennig, rim own anag r
Resolution 08-17
Exhibit "A" Audit Report
Can be found in the Town Secretary Library
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FINANCE DEPARTMENT
TOWN OF WESTLAKE, TEXAS
19
TOWN OF WESTLAKE, TEXAS
TABLE OF CONTENTS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2007
(continued)
Page
Number
INTRODUCTORY SECTION
Letter of Transmittal...........................................................................
i — vi
Organizational Chart ...........................................................................
vii
Principal Town Officials.......................................................................
viii
FINANCIAL SECTION
Independent Auditors' Report ........................................................................................
1-2
Management's Discussion and Analysis.......................................................................
3-10
Basic Financial Statements
Government -wide Financial Statements
Statement of Net Assets..................................................................................
11
Statement of Activities....................................................................................
12-13
Fund Financial Statements
Balance Sheet — Governmental Funds.............................................................
14-15
Statement of Revenues, Expenditures and Changes in
Fund Balances — Governmental Funds ......................................................
16-17
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental
Funds to the Statement of Activities.........................................................
18
Statement of Revenues, Expenditures and Changes in Fund
Balance — Budget and Actual — General Fund ...............................
19
Statement of Net Assets — Proprietary Fund ...................................................
20
Statement of Revenues, Expenses and Changes in
Fund Net Assets — Proprietary Fund .........................................................
21
(continued)
TOWN OF WESTLAKE, TEXAS
TABLE OF CONTENTS
(Continued)
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2007
FINANCIAL SECTION (Continued)
Fund Financial Statements (Continued)
Statement of Cash Flows — Proprietary Fund.................................................................. 22
Discretely Presented Component Units Financial Statements:
Discretely Presented Component Units - Combining
Statement of Net Assets......................................................... 23-24
Discretely Presented Component Units - Combining
Statement of Activities........................................................... 25-26
Notes to Financial Statements................................................................................. 27-61
Required Supplementary Information
Schedule of Revenues, Expenditures and Changes in
Fund Balance — Budget and Actual —
Visitors Association Fund......................................................................... 62
Schedule of Revenues, Expenditures and Changes in
Fund Balance — Budget and Actual —
WestlakeAcademy.................................................................................... 63
Schedule of Revenues, Expenditures and Changes in
Fund Balance — Budget and Actual —
GrantFund..................................................................................... 64
Schedule of Revenues, Expenditures and Changes in
Fund Balance — Budget and Actual —
Property Tax Reduction Fund ....................................................... 65
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet — Westlake Academy ....................................... 66
Combining Statement of Revenues, Expenditures and
Changes in Fund Balance — Westlake Academy ............................. 67
(continued)
TOWN OF WESTLAKE, TEXAS
TABLE OF CONTENTS
(Continued)
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2007
FINANCIAL SECTION (Continued)
Combining and Individual Fund Statements and Schedules: (Continued)
Schedule of Revenues, Expenditures and Changes in
Fund Balance — Budget and Actual —
Debt Service Fund......................................................................... 68
Statistical Section (Unaudited)
Net Assets by Component.................................................................. 69
Changes in Net Assets........................................................................ 70-71
Fund Balances — Governmental Funds ..................................................... 72
Changes in Fund Balance — Governmental Funds ......................................... 73-74
Taxable Sales by Industry Type............................................................. 75
Ratios of General Bonded Debt Outstanding ............................................... 76
Ratios of Outstanding Debt by Type ......................................................... 77
Demographic and Economic Statistics........................................................ 78
Principal Employers............................................................................. 79
Full-time Equivalent Town Government Employees by
Function/Program............................................................................. 80
Operating Indicators by Function/Program................................................... 81
Capital Asset Statistics by Function/Program................................................ 82
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............................................................................. 83 -84
19
INTRODUCTORY SECTION
19
Town of Westlake
February 28, 2008
Honorable Mayor, Board of Aldermen 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 for the Town of Westlake, Texas for the fiscal year ended September 30, 2007, 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
has 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, 2007, 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,
2007, are fairly presented in conformity with GAAP. The independent auditors' report is presented as the
first component of the financial section of this report.
GAAP requires that management provide a narrative introduction, overview, and analysis to accompany
the basic financial statements in the form of a Management's Discussion and Analysis (MD&A). This
letter of transmittal is designed to complement the MD&A and should be read in conjunction with it.
The Town's MD&A can be found immediately following the report of the independent auditor.
3 Village Circle #202 * Westlake, Texas 76262
Metro: 817-430-0941 • Fax: 817-430-1812 * www.westlake-tx.org
Profile of the Town
Minutes from downtown Fort Worth, Texas and Town of
DFW International Airport, the Town of Westlake is Westlake ,T4
home to several upscale residential communities and
35 377 VFW 75
Fortune 500 companies, all of which share a unique 820 35
character and charm, along with a commitment to 360
excellence. The Town is located in northeast Tarrant 3° I}Jalla�
a
County and may be conveniently accessed by several Fort Werth
major thoroughfares, including SH 114 and US 377.
The Town occupies approximately 7 square miles and serves a population of about 703 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 Board of Aldermen. The Town operates under the Council -Manager form of
government. The Board of Aldermen is comprised of a mayor and five (5) board 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 Board of Aldermen, for overseeing the day-to-day operations of the Town and
appointing and supervising heads of various departments. The Mayor and Town Board 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. Westlake Academy is considered a
blended component unit and 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 (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: Lone Star Public Facilities
Corporation, Westlake 4B Corporation, Texas Student Housing Corporation, Texas Student Housing
Authority, Jefferson Commons at the Ballpark Project, Jefferson Commons at Town Lake Project,
College Station Cambridge Project, Texas Student Housing Corporation -Denton Project, Texas Student
Housing Corporation -San Marcos Project, and Texas Student Housing Corporation -MSU Project.
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.
ii
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
The Town is currently enjoying a favorable economic environment due to the following factors:
° Terra Bella, a new residential subdivision consisting of 28 lots, will begin construction during
the fiscal year 2008.
° Preliminary discussions have ensued regarding two large commercial developments for the
Town.
° Fidelity Investments — Phase II construction has begun and a fiscal year 2009 completion date is
planned. This includes a new building addition of approximately 600,000 sq. ft. and an
additional 2,500 employees to the Westlake location.
° Marriott Solana hotel renovations were completed in December 2007. This resulted in the
addition of 97 rooms, additional conference and breakout rooms, and an outdoor entertainment
venue.
Sales tax collections decreased 19% due to an anomaly of approximately $943 thousand in FY 2006.
With this fact taken into consideration, the sales tax collections increased approximately 9.4% over the
past fiscal year.
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
FY 2007 FY 2006 FY 2005 FY 2004 FY 2003
iii
Financial Information
Accounting System and Budgetary Control
The Town's accounting records for general governmental operations are maintained on a modified
accrual basis, with the revenues being recorded when available and measurable and expenditures being
recorded when the services or goods are received and the liabilities incurred. Accounting records for the
Town's utilities are maintained on the accrual basis.
In developing and maintaining the Town's accounting system, consideration is given to the adequacy of
the internal control structure. Internal accounting controls are designed to provide reasonable, but not
absolute, assurance regarding: (1) the safeguarding of assets against loss from unauthorized use or
disposition; and (2) the reliability of financial records for preparing financial statements and maintaining
accountability of assets. The concept of reasonable assurance recognizes that: (1) the cost of a control
should not exceed the benefits likely to be derived; and (2) the evaluation of costs and benefits requires
estimates and judgments by management.
All internal control evaluations occur within the above framework. We believe that the Town's internal
controls adequately safeguard assets and provide reasonable assurance of proper recording of financial
transactions.
The annual budget serves as the foundation of the Town's financial planning and control. The Board is
required to hold public hearings on the proposed budget and to adopt a final budget no later than
September 30, the close of the Town of Westlake's fiscal year. The Town Manager is authorized to
transfer budgeted amounts between line items and departments within any fund; however, any revisions
that alter the total expenditures of any fund must be approved by the Town Board of Aldermen.
Budgetary control has been established at the departmental level. Financial reports are produced
showing budget and actual expenditures by line item, and are distributed monthly to the departmental
management and to others upon request.
Individual line items are reviewed and analyzed for budgetary compliance. Personnel expenditures are
monitored and controlled at a position level and capital expenditures are monitored and controlled item
by item. Revenue budgets are reviewed monthly.
Budget -to -actual comparisons are provided in this report for each individual governmental fund for
which an appropriated annual budget has been adopted.
Long Range Planning
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 2007-2008 Budget. The document details the
Town's long-term goals and financial policies, describes program accomplishments and initiatives, and
outlines the Town's capital improvement program.
The Town's ability to respond to ongoing economic challenges will require careful long-range planning.
The Town has responded by fiscal conservatism and implementing operating budget efficiencies that
have resulted in its maintaining healthy fund balances in its General Fund, Visitors Association Fund
and Utility Fund.
iv
Cash Management
The Town utilizes its investment policy and its bank depository contract in the management of all cash.
Under the bank depository contract, the Town operating accounts earns 1.00% less than the bank's daily
fed funds rate. During the fiscal year ended September 30, 2007, the average rate on the operating
account balances was 3.99 percent. The Town's remaining cash is invested in a government investment
pool as allowed by State of Texas Statutes and by the Town's investment policy. The average rate
received on the funds invested in the government investment pool was 5.26 percent. The average
balance of the Town's investment portfolio for fiscal year 2007 was approximately $5.9 million. The
overall portfolio provided $307,780 in investment income.
The Town requires that all deposits be collateralized with securities being held in safekeeping by either
an approved, independent third party financial institution or the Town's designated depository.
Collateral is monitored monthly to ensure that the market value of the pledged securities equals or
exceeds the related deposit or investment balance. Investments are always executed delivery -versus -
payment method. That is, funds are not wired or paid until verification has been made that the correct
security has been received. Securities are held on behalf of the Town by the Town's agent. All collateral
shall be subject to verification and audit by the Finance Director and the Town's independent auditors.
Risk Management
The Town of Westlake is a member of the Texas Municipal League Intergovernmental Risk Pool (TML -
IRP), an inter -local agency offering workers' compensation, liability, and property protection to Texas
political subdivisions. TML -IRP provides Texas governmental entities with cost-effective and stable
option for risk financing and loss prevention services.
Risk Management is a joint effort involving the Town's Elected Officials, Town Departments, and
TML -IRP. Policies and procedures are implemented on an operational level to minimize risk exposure.
These policies and procedures provide emphasis on safety and training, financial transparency and
oversight, and compliance with all applicable laws. TML -IRP also conducts loss -prevention analysis of
the Town's policies, procedures and covered properties, and provides recommendations where
appropriate to reduce potential risk.
The Town's TML -IRP policy includes General Liability insurance coverage with an annual aggregate
limit of $2 million. This policy also includes Law Enforcement and Errors & Omissions Liability, each
with an annual aggregate limit of $6 million. In addition, the policy includes coverage for worker's
compensation, commercial crime, auto liability, and non -Westlake Academy property.
Other Information
Certificate of Achievement
The Government Finance Officers Association of the United States of America and Canada (GFOA)
awards the Certificate of Achievement for Excellence in Financial Reporting to state and local
governments. This Comprehensive Annual Financial Report for the fiscal year ended September 30,
2007 is the Town's first submission for this award.
VAI
The Certificate of Achievement is a prestigious national award -recognizing conformance with the
highest standards for preparation of state and local government financial reports. In order to be awarded
a Certificate of Achievement, a government unit must publish an easily readable and efficiently
organized comprehensive annual financial report. 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 our current
comprehensive annual financial report meets the Certificate of Achievement Program's requirements and
we are submitting it to GFOA to determine its eligibility for our first certificate.
Acknowledgements
The preparation of this report on a timely basis 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 Board of Aldermen 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,
oe Hennig
Interim Town Manager
vi
Debbie Piper, CPA
Finance Director
Town
Manager
Assistant to the
Town Manager
Planning &
Development
Facilities
Maintenance
Municipal
Court
Town
Marshal
Deputy
Clerks
i
Public
Works
Utility and
Building Tech
TOWN OF WESTLAKE
ORGANIZATION CHART
Citizens of Westlake
I
Town
Secretary
Administrative
Services
Parks and
Recreation
Finance
Department
Finance
Assistant
Records and
Revenue Clerk
Fire
C hief
Fire and
EMS Staff
Mayor and
Board of Aldermen
Texas Student
Housing
Executive
Manager
Finance
Manager
vii
I�.
Town Head of
Attorney School
Admin Asst to School
Head of School Receptionist
Librarian Dining Hall
Counselors
N urse
Special
Education
Primary Secondary
Head of School Head of School
School
High School
Secretary
Counselors
PYP
MYP
Teachers
Teachers
PYP
MYP
Counselors
Special Education
PYP
DP
Special Education
Teachers
PYP Coordinator
DP
of Education
Special Education
{ #Ace Tiow*v
Ve4t"e000
ELECTED OFFICIALS
Scott Bradley
Larry Corson
Alderman
Bob Timmerman
Alderman
Mayor
Don Redding
May ProTem
Pete Steger
Alderman
Kevin Maynard
Alderman
ADMINISTRATIVE OFFICIALS
Joe Hennig
Interim Town Manager
Debbie Piper, CPA
Finance Director
Jarrod Greenwood
Public Works Superintendent
Eddie Edwards
Director of Planning & Development
Ginger Awtry
Assistant to Town Manager
Kim Sutter
Town Secretary
Amanda Degan
Court Administrator
Don Wilson
Fire/EMS Coordinator
Todd Wood
Director of Administrative Services
Troy Meyer
Facilities/Grounds Director
Parks/Recreation Director
viii
The Town of Westlake * 3 Village Circle #202 * Westlake, Texas
FINANCIAL SECTION
19
lk*Ki
PATTILLO, BROWN & HILL,L.L.P.
CERTIFIED PUBLIC ACCOUNTANTS ■ BUSINESS CONSULTANTS
INDEPENDENT AUDITORS' REPORT
To the Honorable Mayor
and Board of Aldermen
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, 2007, 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 of Westlake, Texas' management. Our
responsibility is to express opinions on these financial statements based on our audit. We did not
audit the financial statements of Westlake Academy, which represent 12.5%, 13.2%, and 32.2%
respectively of the assets, net assets, and revenues of the governmental funds and Texas Student
Housing Corporation — MSU Project, which represent 9%, 4%, and 8% respectively, of the assets, net
assets, and revenues of the aggregate discretely presented component units of the Town of Westlake.
Those financial statements were audited by other auditors whose report thereon has been furnished to
us, and our opinion, insofar as it relates to the amounts included for Westlake Academy and Texas
Student Housing Corporation— MSU Project, is based on the report of the other auditors.
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 and the report of other
auditors provide a reasonable basis for our opinions.
In our opinion, based on our audit and the report of other auditors, 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, 2007, and the
respective changes in financial position and cash flows, where applicable, and the budgetary
comparison for the General Fund for the year then ended in conformity with accounting principles
generally accepted in the United States of America.
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 0 ALBUQUERQUE, NM (505) 266-5904
In accordance with Government Auditing Standards, we have issued a report dated February
28, 2008, 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.
The Management's Discussion and Analysis on pages 3 through 10, and budgetary schedules
on pages 62 through 65 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 and the other auditors 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.
February 28, 2008
2
MANAGEMENT'S
DISCUSSION AND ANALYSIS
19
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, 2007. The Town implemented Governmental Accounting
Standards Board Statement 34, Basic Financial Statements — and Management's Discussion and
Analysis — for State and Local Governments (Statement 34) for the first time for fiscal year 2004;
therefore, comparative data is shown in various tables within this report.
FINANCIAL HIGHLIGHTS
■ The Assets of the Town exceeded its liabilities at the close of the most recent fiscal year by
$20,761,521 (Net assets).
■ As of the close of the current fiscal year, the Town of Westlake's governmental funds reported
combined ending fund balances of $5,227,909, an increase of $542,644 in comparison with the
prior year.
■ At the end of the current fiscal year, fund balance for the general fund was $3,096,299, a
decrease of $188,865 in comparison with the prior year. Of this total fund balance, $2,533,123 is
unreserved. This represents 71% of total general fund expenditures and is equivalent to 261
operating days.
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
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
deteriorating.
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 cash flows. Thus
revenues and expenses are reported in this statement for some items that will only result in cash flows in
future fiscal periods.
3
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 and sewer.
The government -wide financial statements include not only the Town (known as the primary
government), but also discretely presented component units: the Lone Star Public Facility Corporation,
4B Economic Development Corporation and the Texas Student Housing entities. Financial information
for these component units is reported separately from the financial information presented for the primary
government itself. In addition, the Town has one blended component unit, 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 Propriety funds" for the year
ended September 30, 2007.
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 ou flows 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 of
revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this
comparison between governmental funds and governmental activities.
The Town maintains seven 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, Capital Projects,
Special Revenue Grant, Property Tax Reduction and Debt Service funds, all of which are presented as
major funds.
The Town adopts an annual appropriated budget for all funds. A budgetary comparison statement has
been provided for all funds to demonstrate compliance with this budget
The basic governmental fund financial statements can be found on pages 14-18 of this report.
4
Proprietary funds - There are two types of proprietary funds, Enterprise Funds and Internal Service
Funds. The Town maintains one type of proprietary fund — an enterprise fund. Enterprise funds are
used to report the same functions presented as business -type activities in the government -wide financial
statements. The Town uses an enterprise fund to account for its water and sewer 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 20 - 22 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 27 - 61 of this report.
Other information. In addition to the basic financial statements and accompanying notes, this report
also presents combining fund statements and schedules that further support the information in the
financial statements.
The combining fund statements and schedules are presented immediately following the notes to the
financial statements can be found on pages 62 - 68.
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 $20,761,521 at the close of the most
recent fiscal year.
By far the largest portion of the Town's net assets, $17,744,451 (85%), 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 may be provided from other sources since the capital assets
themselves cannot be used to liquidate these liabilities.
5
Condensed Statement of Net Assets
An additional portion of the Town's net assets, $1,848,572 (9%), represents resources that are subject to
external restrictions on how they may be used. The remaining balance of unrestricted net assets,
$1,168,498 (6%), may be used to meet the government's ongoing obligations to citizens and creditors.
Governmental activities: Governmental activities increased the Town's net assets by $1,069,669. Net
assets invested in capital assets, net of related debt increased by $474,987 primarily due to completion of
the renovation of Pod F of the Westlake Academy. Unrestricted net assets increased by $152,866.
Total revenues for governmental activities decreased when compared to the prior year by $2,759,995.
General revenue had an increase of $1,140,402 while program revenues had a decrease of $3,900,397.
These increases were primarily due to the following factors:
General revenues - Sales tax increased by $387,050 mostly due to an economic development
agreement; Franchise tax had an increase of $103,308; Unrestricted grants related to the Academy
increased approximately $437,443; Interest income increased by $162,798; and Miscellaneous increased
$17,827.
Program revenues - Charges for services decreased by $14,865; Operating Grants and Contributions
decrease of $2,429,906 is attributable to the contribution from 4A Development Fund upon its
dissolution during the fiscal year ended 2006; Capital Grants and Contributions decreased by $1,455,602
due to the anonymous donation to purchase land during the prior year.
Total expenses for governmental activities increased by $179,320 or approximately 2%.
Business -type activities: Business -type activities decreased the Town's net assets by $500,314. The
major component of this decrease are less water revenues due to a wet summer, additional capital
project expenses related to the TRA/SL sewer line, second water source and the Ottinger road waterline
project.
The following table provides a summary of the Town's operations for fiscal year ended September 30,
2007, with comparative totals for the fiscal year ended September 30, 2006.
6
Governmental Activities
Business Activities
Totals
2007
2006
2007
2006
2007
2006
Current and other assets
$ 6,509,131
$ 5,585,570
$ 1,267,534
$ 1,289,240
$ 7,776,665
$ 6,874,810
Capital assets
27,937,083
27,897,986
13,920,106
14,315,110
41,857,189
42,213,096
Total Assets
34,446,214
33,483,556
15,187,640
15,604,350
49,633,854
49,087,906
Long-term liabilities
18,234,841
18,335,885
5,763,022
5,822,299
23,997,863
24,158,184
Other liabilities
1,539,416
1,545,383
3,335,054
3,192,173
4,874,470
4,737,556
Total Liabilities
19,774,257
19,881,268
9,098,076
9,014,472
28,872,333
28,895,740
Net Assets:
Invested in capital assets,
net of related debt
9,646,644
9,171,657
8,097,807
8,436,729
17,744,451
17,608,386
Restricted
1,848,572
1,406,756
-
-
1,848,572
1,406,756
Unrestricted
3,176,741
3,023,875
(2,008,243)
(1,846,851)
1,168,498
1,177,024
Total Net Assets
$ 14,671,957
$ 13,602,288
$ 6,089,564
6,589,878
$ 20,761,521
$ 20,192,166
An additional portion of the Town's net assets, $1,848,572 (9%), represents resources that are subject to
external restrictions on how they may be used. The remaining balance of unrestricted net assets,
$1,168,498 (6%), may be used to meet the government's ongoing obligations to citizens and creditors.
Governmental activities: Governmental activities increased the Town's net assets by $1,069,669. Net
assets invested in capital assets, net of related debt increased by $474,987 primarily due to completion of
the renovation of Pod F of the Westlake Academy. Unrestricted net assets increased by $152,866.
Total revenues for governmental activities decreased when compared to the prior year by $2,759,995.
General revenue had an increase of $1,140,402 while program revenues had a decrease of $3,900,397.
These increases were primarily due to the following factors:
General revenues - Sales tax increased by $387,050 mostly due to an economic development
agreement; Franchise tax had an increase of $103,308; Unrestricted grants related to the Academy
increased approximately $437,443; Interest income increased by $162,798; and Miscellaneous increased
$17,827.
Program revenues - Charges for services decreased by $14,865; Operating Grants and Contributions
decrease of $2,429,906 is attributable to the contribution from 4A Development Fund upon its
dissolution during the fiscal year ended 2006; Capital Grants and Contributions decreased by $1,455,602
due to the anonymous donation to purchase land during the prior year.
Total expenses for governmental activities increased by $179,320 or approximately 2%.
Business -type activities: Business -type activities decreased the Town's net assets by $500,314. The
major component of this decrease are less water revenues due to a wet summer, additional capital
project expenses related to the TRA/SL sewer line, second water source and the Ottinger road waterline
project.
The following table provides a summary of the Town's operations for fiscal year ended September 30,
2007, with comparative totals for the fiscal year ended September 30, 2006.
6
Change in Net Assets
Revenues:
Program revenues:
Charges for services
Operating grants
and contributions
Capital grants and
contributions
Governmental Activities
2007 2006
$ 1,662,291 $ 1,677,156 $
1,257,058 3,686,964
- 1,455,626
General revenues:
Taxes
Sales taxes
Hotel occupancy taxes
Mixed beverage taxes
Franchise taxes
Unrestricted grants
Interest on investments
Miscellaneous
Transfers
Total revenues
Expenses:
General government
Public safety
Culture and recreation
Economic
Public works
Visitor services
Education
Interest on long-term debt
Water and sewer
Change in net assets
Prior period adjustment
Net assets, beg. of year
Net assets, end of year
Business Activities
2007 2006
Totals
2007 2006
1,657,186 $ 1,842,238 $ 3,319,477 $ 3,519,394
19,653 1,257,058 3,706,617
1,455,626
2,197,756
1,810,706
-
-
2,197,756
1,810,706
458,471
415,544
-
-
458,471
415,544
14,066
13,674
-
-
14,066
13,674
560,312
457,004
-
-
560,312
457,004
2,259,643
1,822,200
-
-
2,259,643
1,822,200
261,622
98,824
46,158
25,604
307,780
124,428
466,654
448,827
36,936
56,025
503,590
504,852
33,976
45,319
(33,976)
(45,319)
-
-
9,171,849
11,931,844
1,706,304
1,898,201
0,878,153
13,830,045
1,941,289
1,811,281
-
-
1,941,289
1,811,281
1,738,080
1,705,528
-
-
1,738,080
1,705,528
86,560
91,444
-
-
86,560
91,444
120,753
35,759
-
-
120,753
35,759
455,481
613,956
-
-
455,481
613,956
217,992
393,115
-
-
217,992
393,115
2,672,698
2,249,998
-
-
2,672,698
2,249,998
869,327
1,021,779
-
-
869,327
1,021,779
2,206,618
2,137,831
2,206,618
2,137,831
8,102,180
7,922,860
2,206,618
2,137,831
10,308,798
10,060,691
1,069,669
4,008,984
(500,314)
(239,630)
569,355
3,769,354
60,000
60,000
13,602,288
9,533,304
6,589,878
6,829,508
20,192,166
6,362,812
$ 14,671,957
$ 13,602,288 $
6,089,564 $
6,589,878 $
20,761,521
$ 20,196,166
FINANCIAL ANALYSIS OF THE TOWN'S FUNDS
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 $5,227,909 an increase of $542,644, in comparison with the prior year. During the current
year, the fund balance of the Town's General fund decreased by $188,865. The key factor to this
decrease was the transfer out to the Capital Projects fund for the renovation of Pod F of the Westlake
Academy.
rA
The Visitors Association fund's net increase in fund balance of $313,326 was primarily due to an
increase in the Town's hotel occupancy tax of $42,927; an increase of $12,687 from interest income and
a decrease of approximately $166 thousand in expenditures which was mostly due to the reduction of the
Marriott marketing and transportation appropriations for fiscal year 2007.
The fund balance of the Academy Fund increased by $264,020. This increase can be attributed to the
additional state aid for tax reduction plus the addition of 22 students. Prior year state revenue per
student was approximately $5.5 thousand with 324 students. Approximate revenue per student during
fiscal year 2007 was $6.5 thousand with an additional 22 students. The Academy will expand one grade
level until the Academy reaches K-12. This additional revenue net against the additional expenditures
needed for the additional grade makes up the major portion of this increase.
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 $769,382 net decrease in fund balance to
a decrease in fund balance of $644,192. The major cause of this increase to fund balance was a $200
thousand budget for the FM 1938 Pedestrian Crossing. After the original budget was adopted,
additional information was received from Texas Department of Transportation and the engineers. The
project will not be bid until September, 2008.
FISCAL YEAR 2007 EVENTS
■ The Westlake Academy completed its expansion into the Westlake Civic Campus in 2007. All
Town personnel were relocated to lease space in the Solana complex, just across the hall from
where the town offices were first located in 1999. The entire remodel of office space into
classroom space was paid for by the Town at a cost of $447,478. Capital expenses associated
with the move to the new space were approximately $45 thousand and the annual lease cost for
the new office space is $127 thousand per year.
■ The creation of the Property Tax Reduction Sales Tax Fund in 2006 allowed the Town to use
funds for general operations that were previously designated for economic development. This 1/2
cent sales tax was chosen for recommendation to the voters over creating a Crime Control
District (CCD), due to the less restrictive guidelines which govern how the funds can be used.
These funds were used to partially fund the debt service payments for the year ended September
30, 2007.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS
■ The Town continues its conservative budget approach in fiscal year 2007-2008. 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.
�'j
■ In the spring of 2007, Fidelity Investments announced a doubling of the current 600,000 sq. ft.
campus and the addition of another 2,500 employees to their Westlake location. Also in mid-
year, Maguire Partners announced the long awaited expansion of the Marriott Solana hotel which
was completed in December, 2007. This resulted in the addition of 97 rooms to total 295 guest
rooms, additional conference and breakout rooms, and an outdoor entertainment venue.
■ The fiscal year 2007-2008 contemplates funding of a $2.5 million debt for general obligation
bonds which were approved by the voters in November 2007. This will fund a portion of the
Westlake Arts and Sciences Center. The remaining funds will be raised by the Westlake
Academy Foundation. The source of the revenues to support the $2.5 million debt is budgeted to
come from the Hotel/Motel occupancy tax which funds the Westlake Visitors Association. This
facility will be used both by Westlake Academy and the Town of Westlake for school and civic
uses.
■ The revenue budget has increased from the final 2007 budget of $3.8 million to $5.0 million, an
approximate $1.2 million increase. Details of this increase include an approximate $750
thousand increase in building and code compliance due to the additional Fidelity building. The
remaining $400 thousand is primarily due to the sales tax revenue we expect to receive during
this construction.
■ Amounts available for appropriation in the general fund budget are $4.36 million, an increase of
$160 thousand from the final 2007 budget of $4.52 million. This increase is primarily made up
of the net amount of the following increase and decreases to the budget:
o Increase of $153 thousand in payroll and related expenditure items (fiscal year 2008)
o Increase in the Town's lease for a full year opposed to a portion of the year is
approximately $35 thousand (fiscal year 2008)
o Decrease of approximately $33 thousand for court and finance software purchased during
(fiscal year 2007)
o Net increase of $183 thousand due to Economic Development agreements
■ Transfers out relate to various anticipated capital projects:
o Decrease of $494 thousand for the renovation of the civic campus expansion (fiscal year
2007)
o $118 thousand decrease for the reconstruction of Roanoke & JT Ottinger Road (fiscal
year 2007)
o Increase of $126 thousand for Stagecoach Hills road reconstruction (fiscal year 2008)
If these estimates are realized, the Town's general fund's budgetary fund balance should increase by
$555 thousand.
9
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.
10
BASIC FINANCIAL STATEMENTS
19
N ICO]i i/►[e7 Ali./ xyl 0 W.1 m a110►:I�.y
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2007
Primary Government
Discretely
Governmental Business -type Presented
Activities Activities Total Component Units
ASSETS
Cash and cash equivalents
$ 5,072,196
$ 716,527
$ 5,788,723
$ 5,409,129
Accounts receivables (net of allowance)
857,476
507,666
1,365,142
915,877
Notes receivable
19,421
-
19,421
-
Internal balances
62,737
( 62,737)
-
-
Due from primary government
-
-
-
386,500
Due from component units
109,070
-
109,070
-
Other assets
19,473
9,828
29,301
83,402
Restricted cash and cash equivalents
-
96,250
96,250
10,262,374
Deferred charges
368,758
-
368,758
5,851,776
Capital assets:
Land
9,386,531
-
9,386,531
13,622,885
Buildings and improvements
21,032,225
12,853,855
33,886,080
125,910,712
Wastewater treatment rights
-
635,199
635,199
-
Machinery and equipment
2,007,674
3,367,943
5,375,617
6,512,061
Construction in progress
149,927
20,849
170,776
-
Less: accumulated depreciation
( 4,639,274)
( 2,957,740)
( 7,597,014)
( 26,666,339)
Total capital assets
27,937,083
13,920,106
41,857,189
119,379,319
Total assets
34,446,214
15,187,640
49,633,854
142,288,377
LIABILITIES
Accounts payable
720,546
111,776
832,322
4,536,716
Due to component units
-
386,500
386,500
-
Due to primary government
-
-
-
109,070
Customer deposits payable
-
102,680
102,680
-
Unearned revenue
-
490,438
490,438
5,020,219
Accrued interest payable
394,514
2,184,383
2,578,897
9,567,411
Noncurrent liabilities:
Due within one year
424,356
59,277
483,633
83,214,611
Due in more than one year
18,234,841
5,763,022
23,997,863
71,936,987
Total liabilities
19,774,257
9,098,076
28,872,333
174,385,014
NET ASSETS
Invested in capital assets, net of related debt
9,646,644
8,097,807
17,744,451
( 33,931,272)
Restricted
1,848,572
-
1,848,572
2,843,356
Unrestricted
3,176,741
( 2,008,243)
1,168,498
( 1,008,721)
Total net assets
$ 14,671,957
$ 6,089,564
$ 20,761,521
$( 32,096,637)
The accompanying notes are an integral part of these financial statements.
11
TOWN OF WESTLAKE, TEXAS
STATEMENT OF ACTIVITIES
SEPTEMBER 30, 2007
General revenues:
Sales taxes
Hotel occupancy taxes
Mixed beverage taxes
Franchise taxes
Unrestricted grants
Interest income
Miscellaneous
Transfers
Total general revenues and transfers
Change in net assets
Net assets, beginning
Net assets, ending
The accompanying notes are an integral part of these financial statements.
12
Program Revenues
Operating
Capital
Charges for
Grants and
Grants and
Functions/Programs
Expenses
Services
Contributions
Contributions
Primary government:
Governmental activities:
General government
$
1,941,289
$ 785,771
$ 346,353
$ -
Public safety
1,738,080
165,255
12,550
-
Culture and recreation
86,560
-
-
-
Economic Development
120,753
Public works
455,481
625,340
-
-
Visitor Services
217,992
-
-
-
Education
2,672,698
85,925
164,740
-
Interest on long-term debt
869,327
-
733,415
-
Total governmental activities
8,102,180
1,662,291
1,257,058
-
Business -type activities:
Water utilities
2,206,618
1,657,186
-
-
Total business -type activities
2,206,618
1,657,186
-
-
Total primary government
$
10,308,798
$ 3,319,477
$ 1,257,058
$ -
Component units:
Governmental activities
$
733,415
$ -
$ -
$ -
Business -type activities
27,513,528
20,066,938
-
-
Total component units
$
28,246,943
$ 20,066,938
$ -
$ -
General revenues:
Sales taxes
Hotel occupancy taxes
Mixed beverage taxes
Franchise taxes
Unrestricted grants
Interest income
Miscellaneous
Transfers
Total general revenues and transfers
Change in net assets
Net assets, beginning
Net assets, ending
The accompanying notes are an integral part of these financial statements.
12
Net (Expense) Revenue and
Chanties in Net Assets
Primary Government Discretely
Governmental Business -type Presented
Activities Activities Total Component Units
$( 809,165) $
- $( 809,165) $ -
( 1,560,275)
- ( 1,560,275) -
( 86,560)
- ( 86,560) -
169,859
- 169,859 -
( 217,992)
- ( 217,992) -
( 2,422,033)
- ( 2,422,033) -
( 135,912)
- ( 135,912) -
( 5,182,831)
- ( 5,182,831) -
2,259,643
- (
549,432) ( 549,432) -
- (
549,432) ( 549,432) -
( 5,182,831) (
549,432) ( 5,732,263) -
$( 733,415)
( 7,446,590)
$( 8,180,005)
2,197,756
-
2,197,756
732,585
458,471
-
458,471
-
14,066
-
14,066
-
560,312
-
560,312
-
2,259,643
-
2,259,643
-
261,622
46,158
307,780
533,894
466,654
36,936
503,590
14,604
33,976
( 33,976)
-
-
6,252,500
49,118
6,301,618
1,281,083
1,069,669
( 500,314)
569,355
( 6,898,922)
13,602,288
6,589,878
20,192,166
( 25,197,715)
$ 14,671,957
$ 6,089,564
$ 20,761,521
$( 32,096,637)
13
TOWN OF WESTLAKE, TEXAS
BALANCESHEET
GOVERNMENTAL FUNDS
SEPTEMBER 30, 2007
Debt
Visitors Westlake Service
General Association Academy Fund
ASSETS:
Cash and cash equivalents
$ 2,953,970
$ 1,088,641
$ 670,172
$ -
Receivables
Accounts receivable
390,390
78,745
88,184
-
Notes receivable
19,421
-
-
-
Due from other funds
132,183
27,965
-
-
Due from component unit
830
-
-
108,240
Other assets
2,257
-
17,216
-
TOTAL ASSETS
$ 3,499,051
$ 1,195,351
$ 775,572
$ 108,240
LIABILITIES AND FUND BALANCE:
Liabilities:
Accounts payable
285,707
12,331
83,832
-
Due to other funds
117,045
-
-
108,240
Total liabilities
402,752
12,331
83,832
108,240
Fund Equity:
Fund balance
Reserved to promote tourism
-
1,183,020
-
-
Reserved for future projects
424,185
-
-
-
Reserved for court security
and technology
138,991
-
-
-
Unreserved and undesignated
2,533,123
-
691,740
-
Total fund equity
3,096,299
1,183,020
691,740
-
TOTAL LIABILITIES AND FUND EQUITY
$ 3,499,051
$ 1,195,351
$ 775,572
$ 108,240
Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the
funds.
Long-term liabilities are not due and payable in the current period and therefore are noy reported in the funds
Certain other long-term assets are not available to pay current period expenditures and therefore are not
reported in the funds
Net assets of governmental activities
The accompanying notes are an integral part of these financial statements.
14
Capital
Proj ects
$ 359,065
95,318
338,676
13,331
352,007
102,376
102,376
$ 454,383
Property Total
Grant Tax Reduction Governmental
Fund Fund Funds
$ - $ 348 $ 5,072,196
108,239 665,558
- 19,421
45,887 301,353
- 109,070
- 19,473
$ - $ 154,474 $ 6,187,071
720,546
- 238,616
$ 959,162
1,183,020
526,561
- 138,991
154,474 3,379,337
154,474 5,227,909
$ - $ 154,474
27,937,083
( 18,684,953)
191,918
$ 14,671,957
15
TOWN OF WESTLAKE, TEXAS
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2007
REVENUES:
Taxes
Sales
Mixed beverage
Hotel occupancy
Franchise
State program revenues
Federal program revenues
Interest income
Building permits and fees
Fines and penalties
Contributions
Miscellaneous
Total revenues
EXPENDITURES:
Current
General government
Public safety
Culture and recreation
Public works
Economic Development
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)
1,385,492 - -
1,653,329 - -
86,560 - -
276,789 - -
141,197 - -
- 226,992 -
- 2,672,698
3,543,367 226,992 2,672,698
344,282 313,326 264,020
Transfers in
Visitors
Westlake
General
Association
Academy
Payments to bond escrow agent
$ 1,465,171
$ -
$ -
14,066
-
-
-
458,471
-
560,312
-
-
-
-
2,387,733
-
-
36,650
165,102
49,746
23,644
900,121
-
-
651,090
-
-
100,000
-
-
31,787
32,101
488,691
3,887,649
540,318
2,936,718
1,385,492 - -
1,653,329 - -
86,560 - -
276,789 - -
141,197 - -
- 226,992 -
- 2,672,698
3,543,367 226,992 2,672,698
344,282 313,326 264,020
Transfers in
43,976 - -
Proceeds from capital lease
23,000 - -
Refunding bonds issued
- - -
Payments to bond escrow agent
- - -
Transfers out
(600,123) - -
Total other financing sources (uses)
(533,147) - -
NET CHANGE IN FUND BALANCES
(188,865) 313,326 264,020
FUND BALANCES, BEGINNING
3,285,164 869,694 427,720
FUND BALANCES, ENDING
$ 3,096,299 $ 1,183,020 $ 691,740
The accompanying notes are an integral part of these financial statements.
16
Debt
-
Property
Total
Service
Capital
Grant
Tax Reduction
Governmental
Fund
Projects
Fund
Fund
Funds
$ -
$ -
$ -
$ 732,585
$ 2,197,756
-
-
-
-
14,066
-
-
-
-
458,471
-
-
-
-
560,312
-
-
-
-
2,387,733
-
-
12,550
-
49,200
22,782
-
-
348
261,622
-
-
-
-
900,121
-
-
-
-
651,090
733,415
246,353
-
-
1,079,768
-
-
-
-
552,579
756,197
246,353
12,550
732,933
9,112,718
1,385,492
12,550 - 1,665,879
- - 86,560
- - - 276,789
- - - 141,197
- - - 226,992
- - - 2,672,698
836,787 - - 836,787
470,000
-
470,000
1,240,950
-
- -
1,240,950
1,710,950
836,787
12,550 -
9,003,344
(954,753)
(590,434)
- 732,933
109,374
578,459
590,123
- -
1,212,558
-
-
23,000
7,465,000
-
-
7,465,000
(7,088,706)
-
-
( 7,088,706)
-
-
- (578,459)
( 1,178,582)
954,753
590,123
- (578,459)
433,270
-
(311)
- 154,474
542,644
-
102,687
- -
4,685,265
$ -
$ 102,376 $
- $ 154,474
$ 5,227,909
17
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, 2007
Amounts reported for governmental activities in the statement
of activities are different because:
Net change in fund balance - total governmental funds
542,644
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. 39,097
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.
435,890
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. 52,038
Change in net assets of governmental activities
$ 1,069,669
The accompanying notes are an integral part of these financial statements.
18
TOWN OF WESTLAKE, TEXAS
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2007
EXPENDITURES
Current
General government and administration
1,443,177
General Fund
1,385,492
90,699
Public safety
1,698,436
1,724,464
1,653,329
71,135
Cultural and recreational
Variance
97,982
Budgeted Amounts
11,422
Public works
Favorable
386,766
Original
Amended
Actual
(Unfavorable)
REVENUES
141,197
44,561
Total expenditures
3,840,258
3,871,161
Taxes
( 327,794)
EXCESS (DEFICIENCY) OF REVENUES
Sales
$ 1,500,000
$ 1,600,000
1,465,171
$(
134,829)
Mixed beverages
13,650
14,650
14,066
(
584)
Franchise
418,690
524,783
560,312
Proceeds from capital lease
35,529
Federal program revenues
3,000
3,000
0
(
3,000)
Interest income
61,239
147,039
165,102
( 594,174)
18,063
Building permits and fees
580,456
723,021
900,121
( 188,865)
177,100
Fines and penalties
1,060,580
689,288
651,090
(
38,198)
Contributions from others
100,000
100,000
100,000
-
Other miscellaneous income
80,435
19,362
31,787
12,425
Total revenues
3,818,050
3,821,143
3,887,649
66,506
EXPENDITURES
Current
General government and administration
1,443,177
1,476,191
1,385,492
90,699
Public safety
1,698,436
1,724,464
1,653,329
71,135
Cultural and recreational
104,241
97,982
86,560
11,422
Public works
408,646
386,766
276,789
109,977
Economic development
185,758
185,758
141,197
44,561
Total expenditures
3,840,258
3,871,161
3,543,367
( 327,794)
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
( 22,208)
( 50,018)
344,282
394,300
OTHER FINANCING SOURCES (USES)
Transfers in
87,000
50,000
43,976
( 6,024)
Proceeds from capital lease
-
-
23,000
23,000
Transfers out
( 834,174)
( 644,174)
( 600,123)
44,051
Total other financing sources (uses)
( 747,174)
( 594,174)
( 533,147)
61,027
NET CHANGE IN FUND BALANCE
( 769,382)
( 644,192)
( 188,865)
455,327
FUND BALANCE, BEGINNING
3,285,164
3,285,164
3,285,164
-
FUND BALANCE, ENDING $ 2,515,782 $ 2,640,972 $ 3,096,299 $ 455,327
The accompanying notes are an integral part of these financial statements.
19
TOWN OF WESTLAKE, TEXAS
STATEMENT OF NET ASSETS
19 t'111 919 1 DV V.1k"I'd10121C
SEPTEMBER 30, 2007
ASSETS
Current assets:
Cash and cash equivalents
Accounts receivable
Due from other funds
Other assets
Restricted cash and investments
Total current assets
Noncurrent assets
Capital assets:
Buildings and improvements
Wastewater treatment rights
Machinery and Equipment
Costruction in progress
Less: accumulated depreciation
Total capital assets
Total noncurrent assets
Total assets
LIABILITIES
Current liablities:
Accounts payable
Due to component units
Customer deposits payable
Accrued interest payable
Due to other funds
Unearned revenue
Contractual obligations
Total current liabilities
Long-term liabilities:
Contractual obligations
Total long-term liabilities
Total liabilities
NET ASSETS
Invested in capital assets, net of related debt
Unrestricted
Total net assets
$ 716,527
507,666
7,093
9,828
96,250
1,337,364
12,853,855
635,199
3,367,943
20,849
( 2,957,740)
13,920,106
13,920,106
15,257,470
111,776
386,500
102,680
2,184,3 83
69,830
490,438
59,277
3,404,884
5,763,022
5,763,022
9,167,906
8,097,807
( 2,008,243)
$ 6,089,564
The accompanying notes are an integral part of these financial statements.
20
TOWN OF WESTLAKE, TEXAS
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2007
OPERATING REVENUES:
Charges for services
Miscellaneous revenue
Total operating revenue
OPERATING EXPENSES:
Payroll costs
Professional and contract services
Depreciation
Amortization of wastewater treatment rights
Water purchases
Other operating costs
Total operating expenses
OPERATING INCOME
NON-OPERATING REVENUES (EXPENSES):
Interest income
Interest expense
Total non-operating revenues (expenses)
INCOME BEFORE TRANSFERS
Transfer in
Transfer out
Total transfers
CHANGE IN NET ASSETS
TOTAL NET ASSETS, BEGINNING
TOTAL NET ASSETS, ENDING
$ 1,657,186
36,936
1,694,122
111,296
204,887
417,339
31,760
561,106
426,873
1,753,261
( 59,139)
46,158
( 453,357)
( 407,199)
( 466,338)
10,000
( 43,976)
( 33,976)
( 500,314)
6,589,878
$ 6,089,564
The accompanying notes are an integral part of these financial statements.
21
19
TOWN OF WESTLAKE, TEXAS
STATEMENT OF CASH FLOWS
PROPRIETARY FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2007
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers
$ 1,687,930
Cash payments to employees/retirees
( 111,296)
Cash payments for goods and services
( 1,331,190)
Net cash provided by operating activities
245,444
CASH FLOWS FROM NONCAPITAL
Total cash and cash equivalents
FINANCING ACTIVITIES
812,777
Net interfund borrowings
16,906
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Principal paid on debt ( 56,082)
Interest paid on debt ( 132,080)
Purchase of property and equipment ( 54,095)
Net cash used by capital and related financing activities ( 242,257)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment earnings 46,158
NET INCREASE IN CASH AND CASH EQUIVALENTS 66,251
CASH AND CASH EQUIVALENTS, BEGINNING 746,526
CASH AND CASH EQUIVALENTS, ENDING $ 812,777
RECONCILIATION OF TOTAL CASH AND CASH EQUIVALENTS
Cash and cash equivalents
$
716,527
Restricted cash and cash equivalents
96,250
Total cash and cash equivalents
$
812,777
RECONCILIATION OF OPERATING INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
Operating income
$(
59,139)
Adjustments to reconcile operating loss to net
cash provided by operating activities:
Depreciation and amortization
449,099
Changes in operating asets and liabilities:
Receivables
7,271
Other assets
(9,828)
Accounts payable
(128,496)
Customer deposits payable
12,730
Deferred revenue
(
26,193)
Net cash provided by operating activities
$
245,444
The accompanying notes are an integral part of these financial statements.
22
TOWN OF WESTLAKE, TEXAS
DISCRETELY PRESENTED COMPONENT UNITS
COMBINING STATEMENT OF NET ASSETS
SEPTEMBER 30, 2007
The accompanying notes are an integral part of these financial statements.
23
Texas Student
Texas Student
Housing
Housing
Lone Star
Westlake
Authority -
Corporation -
Public Facility
4B
Ballpark Austin
The Ridge at
Corporation
Corporation
Project
North Texas
ASSETS
Cash and cash equivalents
$ 13,030
$ 267
$ 320,171
$ 454,504
Accounts receivables (net of allowance)
-
108,240
36,262
34,511
Due from primary government
-
386,500
-
-
Other assets
-
-
8,225
18,315
Restricted assets:
Cash and cash equivalents
-
-
2,120,077
2,523,559
Deferred charges
-
-
2,867,075
809,006
Capital assets:
Land
-
-
4,788,265
2,200,000
Buildings and improvement
28,338,368
25,705,000
Machinery and equipment
1,253,841
Less: accumulated depreciation
-
-
( 7,208,808)
( 6,459,127)
Total assets
13,030
495,007
31,269,635
26,539,609
LIABILITIES AND NET ASSETS
LIABILITIES
Accounts payable and accrued expneses
-
-
892,255
1,871,633
Due to primary government
-
109,070
-
-
Unearned revenue
-
-
241,653
631,047
Accrued interest payable
-
-
2,839,679
1,867,546
Noncurrent liabilities:
Due within one year
-
-
595,000
30,390,251
Due in more than one year
-
-
36,637,924
-
Totalliabilities
-
109,070
41,206,511
34,760,477
NET ASSETS
Invested in capital assets, net
of related debt
-
-
( 9,855,099)
( 7,690,537)
Restricted
-
-
( 719,602)
656,013
Unrestricted
13,030
385,937
637,825
( 1,186,344)
Total net assets
$ 13,030
$ 385,937
$( 9,936,876)
$( 8,220,868)
The accompanying notes are an integral part of these financial statements.
23
Texas Student
Housing
Corporation -
The Ridge
at San Marcos
Texas Student
$ 150,427
Texas Student
Housing
Texas Student
Housing
Authority -
Housing
Authority - Texas Student
Town Lake
Corporation -
College Station Housing
Austin Project
MSU Project
Project Authority
Total
$ 67,184
$ 150,427
$ 411,195
$ 3,369,881 $
622,470
$ 5,409,129
16,636
11,585
239,495
434,856
34,292
915,877
-
-
-
-
-
386,500
17,434
15,389
576
18,227
5,236
83,402
349,533
1,488,977
2,396,642
1,383,586
-
10,262,374
793,430
1,001,258
381,007
-
-
5,851,776
1,552,207
2,182,816
-
2,899,597
-
13,622,885
15,875,143
16,963,841
11,300,714
27,727,646
-
125,910,712
818,332
1,211,085
633,999
2,594,804
6,512,061
( 4,269,606)
( 2,952,674)
( 1,758,027)
( 4,018,097)
-
( 26,666,339
15,220,293
20,072,704
13,605,601
34,410,500
661,998
142,288,377
933,249
199,857
27,097
612,625
- 4,536,716
-
-
-
-
- 109,070
153,299
180,622
665,026
3,035,354
113,218 5,020,219
2,346,001
274,971
457,888
1,781,326
- 9,567,411
19,509,402
204,958
170,000
32,345,000
- 83,214,611
-
21,623,860
13,675,203
-
- 71,936,987
22,941,951
22,484,268
14,995,214
37,774,305
113,218 174,385,014
( 5,533,326) ( 4,423,750) ( 3,287,510) ( 3,141,050) - ( 33,931,272)
- 1,009,048 1,897,897 - - 2,843,356
( 2,188,332) 1,003,138 - ( 222,755) 548,780 ( 1,008,721)
$( 7,721,658) $( 2,411,564) $( 1,389,613) $( 3,363,805) $ 548,780 $( 32,096,637)
24
TOWN OF WESTLAKE, TEXAS
DISCRETELY PRESENTED COMPONENT UNITS
COMBINING STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2007
Functions/Programs
Governmental activities:
Lone Star Public Facility Corporation
Westlake 4B Corporation
Total governmental activities
Business -type activities:
Texas Student Housing Authority
Texas Student Housing Authority:
College Station Project
Ballpark Austin Project
Town Lake Austin Project
Texas Student Housing Corporation:
MSU Project
The Ridge at North Texas
The Ridge at San Marcos
Total business -type activities
Total primary government
Program Revenues
Operating Capital
Charges for Grants and Grants and
Expenses Services Contributions
733,415 - -
733,415 - -
1,027,894
1,070,536 -
6,502,300
5,157,621 -
5,210,595
3,359,388 -
3,749,693
2,790,825 -
2,045,938
1,626,555 -
5,631,328
3,999,846 -
3,345,780
2,062,167 - _
27,513,528
20,066,938 -
$ 28,246,943
$ 20,066,938 $ - $
General revenues:
Sales Tax
Interest income
Miscellaneous
Total general revenues and transfers
Change in net assets
Net assets, beginning
Net assets, ending
The accompanying notes are an integral part of these financial statements.
25
Net (Expense) Revenue and
Changes in Net Assets
Primary Government
Governmental Business -type
Activities Activities Total
$ 398,967 $( 32,495,604) $( 32,096,637)
26
( 733,415)
-
( 733,415)
( 733,415)
-
( 733,415)
-
42,642
42,642
-
( 1,344,679)
( 1,344,679)
-
( 1,851,207)
( 1,851,207)
-
( 958,868)
( 958,868)
-
( 419,383)
( 419,383)
-
( 1,631,482)
( 1,631,482)
-
( 1,283,613)
( 1,283,613)
-
( 7,446,590)
( 7,446,590)
( 733,415)
( 7,446,590)
( 8,180,005)
732,585
-
732,585
681
533,213
533,894
-
14,604
14,604
733,266
547,817
1,281,083
( 149)
( 6,898,773)
( 6,898,922)
399,116
( 25,596,831)
( 25,197,715)
$ 398,967 $( 32,495,604) $( 32,096,637)
26
19
TOWN OF WESTLAKE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2007
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).
(continued)
27
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
A. Financial Reporting Entity (Continued)
Based on the aforementioned criteria, the Town has the following component units: Lone
Star Public Facilities Corporation, Westlake 4B Corporation, Westlake Academy, Texas
Student Housing Corporation, 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, Texas Student Housing Corporation - The Ridge at
San Marcos Project, and Texas Student Housing Corporation - MSU Project.
B. Component Units
Discretely Presented
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.
Westlake 4B 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.
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, Texas
Student Housing Corporation — San Marcos Project, and Texas Student Housing
Corporation — MSU 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.
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.
(continued)
28
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
B. Component Units (Continued)
Discretely Presented (Continued)
The financial statements are formatted to allow the user to clearly distinguish between the
primary government and the discretely presented component units.
Blended
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.
For the most part, the effect of interfund activity has been removed from these statements.
Governmental activities, which normally are supported by taxes and intergovernmental
revenues, are reported separately from business -type activities, which rely to a significant
extent on fees and charges for support. 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.
(continued)
29
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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.
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.
(continued)
30
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)
Visitors Association Fund — to account for municipal hotel occupancy
taxes collected and expenditures to promote tourism and the convention
and hotel industry.
Grant Fund — to account for activity relating to various Grant Programs.
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.
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.
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)
31
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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 -party 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.
Interfund Receivables and Payables
Short-term amounts owed between funds are classified as "due to/from other funds."
Amounts owed between funds payable in more than one year are classified as "advances
to/from other funds."
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.
(continued)
32
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
E. Assets, Liabilities, and Net Assets or Equity(Continued)
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 to the Proprietary Fund an indirect cost percentage of the salaries and
wages and related costs of personnel who perform administrative services for that fund but
are paid through the General Fund along with other indirect costs deemed necessary for their
operations.
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 of 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)
33
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)
34
I. 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.
II. 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 $18,684,953 difference are as follows:
Certificates of obligation bonds $ 19,365,885
Deferred charges for issuance costs (to be amortized
over life of debt) (1,098,446)
Capitalized lease obligations 23,000
Accrued interest payable 394,514
Net adjustment to reduce fund balance - total
governmental funds to arrive at net assets -
governmental activities $ 18,684,953
(continued)
35
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 $39,097 differences are as follows:
Capital outlay $ 807,228
Depreciation expense (768,131)
Net adjustment to decrease net changes in fund balances -
total governmental funds to arrive at changes in net
assets of 'gobernmental activities $ 39,097
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 $435,890
difference are as follows:
Principal repayments:
General obligation debt
General obligation refunding
Debt issuance:
General obligation debt
Capital lease
Deferred expenses
Net adjustment to increase net changes in fund balances -
total governmental funds to arrive at changes in net
assets of governmental activities
(continued)
36
$ 490,444
6,335,000
(7,465,000)
(23,000)
1,098,446
$ 435,890
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
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 $52,038 difference are as follows:
Municipal court fines
Accrued interest
$ 25,155
26,883
Net adjustment to decrease net changes in fund balances -
total governmental funds to arrive at changes in net
assets ofgovernmental activities $ 52,038
III. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
Budgetary Information
The Board of Aldermen follows these procedures in establishing the budgets reflected in the
financial statements.
1. Prior to the beginning of each fiscal year, the Town Manager submits to the Board of
Aldermen a proposed budget for the fiscal year beginning on the following October 1.
The operating budget includes proposed expenditures and the means of financing them.
2. Public hearings are conducted at which all interested person's comments concerning
the budget are heard.
3. The budget is legally enacted by the Board of Aldermen through passage of a
resolution prior to the beginning of the fiscal year.
4. The Town Manager has the authority to transfer appropriation balances from one
expenditure account to another within a single fund. The Board of Aldermen, however,
must approve any transfer of unencumbered appropriation balances or portions thereof
from one fund to another as well as any increase in fund appropriations. At the end of
the fiscal year, all appropriations lapse.
5. Annual budgets are adopted for all funds. These budgets are adopted on a basis
consistent with generally accepted accounting principles ("GAAP")
(continued)
37
III. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (Continued)
Budtetary Information (Continued)
6. The budgetary data presented has been amended from the original budget by the Board
of Aldermen. There were no significant supplemental appropriations necessary during
the year.
7. Expenditures may not legally and did not exceed appropriations at the fund level.
IV. 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, 2007, 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 in vestments 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)
38
IV. 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, 2007, 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 $ 5,627,719
Cash 257,254
Total cash and investments $ 5,884,973
Minimum
Maximum
Maximum
Authorized
Maximum
Percentage
Investment
Investment Type
Maturity
of Portfolio
in One issuer
257,254
Obligations of, or guaranteed by
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, 2007, 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 $ 5,627,719
Cash 257,254
Total cash and investments $ 5,884,973
$ 5,884,973
Reconciliation of total cash and investments at September 30, 2007, are as follows:
Cash and cash equivalents
Restricted cash and investments
(continued)
39
$ 5,788,723
96,250
$ 5,884,973
Minimum
Rating
Fair
Legal
as of
Value
Rating
Year-end
$ 5,627,719
N/A
AAA -m
257,254
N/A
N/A
$ 5,884,973
Reconciliation of total cash and investments at September 30, 2007, are as follows:
Cash and cash equivalents
Restricted cash and investments
(continued)
39
$ 5,788,723
96,250
$ 5,884,973
IV. DETAILED NOTES ON ALL FUNDS (Continued)
Deposits and Investments (Continued)
The Town's entire cash deposits in the bank of $308,689 on September 30, 2007, were covered
by federal depository insurance or by collateral.
Component units
Investments:
TexPool
Cash
Total
Carrying
Amount Fair Value
$ 13,297 $ 13,297
15,658,206 15,65 8,206
$ 15,671,503 $ 15,671,503
Weighted Average
Maturity (Days)
6 months
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 of 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 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)
40
IV. DETAILED NOTES ON ALL FUNDS (Continued)
Capital Assets
Capital asset activity for the
year ended September
30, 2007, was as follows:
Primary Government
Beginning
Decreases/
Ending
Balance
Increases
Adjustment
Balance
Governmental activities:
Capital assets, not being depreciated:
Land
$ 9,386,531
$
$ $
9,386,531
Construction in progress
-
149,927
149,927
Total assets not being depreciated
9,386,531
149,927
9,536,458
Capital assets, being depreciated:
Capital improvements
4,153,924
133,264
4,287,188
Buildings
16,297,560
447,478
-
16,745,038
Machinery and equipment
1,936,760
23,000
4,516
1,955,244
Information systems and software
-
52,430
-
52,430
Total capital assets being depreciated
22,388,244
656,172
4,516
23,039,900
Less accumulated depreciation:
Capital improvements
1,915,902
200,745
-
2,116,647
Buildings
1,251,312
335,984
-
1,587,296
Machinery and equipment
709,575
213,925
5,645
917,855
Information systems and software
-
17,477
-
17,477
Total accumulated depreciation
3,876,789
768,131
5,645
4,639,275
Total capital assets being
depreciated, net
18,511,455
( 111,959)
( 1,129)
18,400,625
Governmental activities capital
assets, net
$ 27,897,986
$ 37,968
$( 1,129) $
27,937,083
Business -type activities:
Capital assets, not being depreciated:
Construction in progress
$ 48,800
$ 2,562
$ 30,513 $
20,849
Total assets not being depreciated
48,800
2,562
30,513
20,849
Capital assets, being depreciated:
Capital improvements
12,772,010
81,606
( 239)
12,853,855
Wastewater treatment rights
635,199
-
-
635,199
Machinery and equipment
3,367,742
-
( 200)
3,367,942
Total capital assets being depreciated
16,774,951
81,606
( 439)
16,856,996
Less accumulated depreciation:
Capital improvements
1,634,896
301,487
-
1,936,383
Wastewater treatment rights
677,892
31,760
482,039
227,613
Machinery and equipment
195,853
115,851
( 482,039)
793,743
Total accumulated depreciation
2,508,641
449,098
-
2,957,739
Total capital assets being
depreciated, net
14,266,310
( 367,492)
( 439)
13,899,257
Business -type activities capital
assets, net
$ 14,315,110
$( 364,930)
$ 30,074 $
13,920,106
(continued)
41
IV. DETAILED NOTES ON ALL FUNDS (Continued)
Capital Assets (Continued)
Depreciation was charged to departments of the primary government as follows:
Governmental activities:
General government $ 517,238
Public safety 72,201
Public works 178,692
Total depreciation expense - governmental activities $ 768,131
A summary of discretely presented component units' capital assets at September 30, 2007,
follows:
Texas Student Housing Authority - Ballpark Austin Project
Beginning Ending
Balance Additions Retirements Balance
Capital assets, not being depreciated:
Land $
4,788,265
$ $
- $ 4,788,265
Total capital assets,
not being depreciated
4,788,265
- 4,788,265
Capital assets, being depreciated:
Building
21,345,305
-
- 21,345,305
Improvements, furniture
and fixtures
6,993,063
- 6,993,063
Total capital assets,
being depreciated
28,338,368
-
- 28,338,368
Less accumulated depreciation for:
Building
3,320,380
711,510
- 4,031,890
Improvements, furniture
and fixtures
2,618,018
558,900
- 3,176,918
Total accumulated depreciation
5,938,398
1,270,410
- 7,208,808
Total capital assets,
being depreciated, net
22,399,970
( 1,270,410)
- 21,129,560
Capital assets, net $
27,188,235
$( 1,270,410) $
- $ 25,917,825
(continued)
42
IV. DETAILED NOTES ON ALL FUNDS (Continued)
Capital Assets (Continued)
Texas Student Housing Corporation - The Ridge at North Texas
Beginning
Balance Additions Deletions
Capital assets, not being depreciated:
Land $ 2,200,000 $ $ -
Total capital assets,
not being depreciated 2,200,000 -
Capital assets, being depreciated:
Building
25,705,000
Furniture and fixtures
1,253,841
-
Total capital assets,
being depreciated
26,958,841
-
Less accumulated depreciation for:
Building
3,422,375
851,833
Furniture and fixtures
1,993,514
191,405
Total accumulated depreciation
5,415,889
1,043,238
Total capital assets,
being depreciated, net
21,542,952
( 1,043,238)
Capital assets, net $
23,742,952
$( 1,043,238) $
Texas Student Housing Authority - The Ridge at San Marcos
Beginning
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
Ending
Balance
$ 2,200,000
2,200,000
25,705,000
1,253,841
26,958,841
4,274,208
2,184,919
6,459,127
20,499,714
- $ 22,699,714
Additions Deletions
Ending
Balance
$ 1,552,207
1,552,207
15,875,143 - - 15,875,143
818,332 - - 818,332
16,693,475 - - 16,693,475
3,624,031 645,575 - 4,269,606
13,069,444 (645,575) - 12,423,869
$ 14,621,651 $ (645,575) $ - $ 13,976,076
(continued)
43
IV. 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
-
- 21806,596
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
1,326,233
442,035
- 1,768,268
Capitalized purchase costs
88,710
29,570
- 118,280
Land improvements
280,659
93,553
- 374,212
Unit appliances
126,486
42,162
- 168,648
Furniture and fixtures
392,416
130,850
- 523,266
Total accumulated depreciation
2,214,504
738,170
- 2,952,674
Total capital assets,
being depreciated, net
15,960,422
( 738,170)
- 15,222,252
Capital assets, net $
18,143,238
$L_738,170) $
- $ 17,405,068
Texas Student Housing Corporation - MSU Project
Capital assets, being depreciated:
Building
Furniture and fixtures
Total capital assets,
being depreciated
Less accumulated depreciation:
Total capital assets,
being depreciated, net
Beginning Ending
Balance Additions Retirements Balance
$ 11,300,714 $ - $ - $ 11,300,714
633,999 - - 633,999
11,934,713 - - 11,934,713
1,318,854 439,173 - 1,758,027
$ 10,615,859 $( 439,173) $ - $ 10,176,686
(continued)
44
IV. DETAILED NOTES ON ALL FUNDS (Continued)
Capital Assets (Continued)
Texas Student Housing Authority - College Station Project
Restricted Net Assets
Proprietary Fund
Within the proprietary funds, $96,250 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, $10,262,374 in cash and cash equivalents
represents funds held for debt service.
Interlocal Agreement with Trophy Club/Westlake Department of Public Safety
On April 24, 2000, the Town approved an interlocal agreement with the Trophy Club/Westlake
Department of Public Safety ("DPS"), which called for the Town of Westlake to participate in
the financing of an emergency vehicle for the DPS. The Town recorded a note receivable of
$125,000 based on the terms of the interlocal agreement.
(continued)
45
Beginning
Ending
Balance
Additions Retirements
Balance
Capital assets, not being depreciated:
Land
$ 2,899,597
$ - $ - $
2,899,597
Total capital assets,
not being depreciated
2,899,597
- -
2,899,597
Capital assets, being depreciated:
Building
27,727,646
- -
27,727,646
Furniture and fixtures
2,591,427
3,377 -
2,594,804
Total capital assets,
being depreciated
30,319,073
3,377 -
30,322,450
Less accumulated depreciation for:
Building
1,783,245
955,553 -
2,738,798
Furniture and fixtures
851,877
427,422 -
1,279,299
Total accumulated depreciation
2,635,122
1,382,975 -
4,018,097
Total capital assets,
being depreciated, net
27,683,951
( 1,379,598) -
26,304,353
Capital assets, net
$ 30,583,548
$( 1,379,598) $ - $
29,203,950
Restricted Net Assets
Proprietary Fund
Within the proprietary funds, $96,250 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, $10,262,374 in cash and cash equivalents
represents funds held for debt service.
Interlocal Agreement with Trophy Club/Westlake Department of Public Safety
On April 24, 2000, the Town approved an interlocal agreement with the Trophy Club/Westlake
Department of Public Safety ("DPS"), which called for the Town of Westlake to participate in
the financing of an emergency vehicle for the DPS. The Town recorded a note receivable of
$125,000 based on the terms of the interlocal agreement.
(continued)
45
IV. DETAILED NOTES ON ALL FUNDS (Continued)
Interlocal Agreement with Trophy Club/Westlake Department of Public Safety
(Continued)
The Agreement calls for eight principal and interest payments to the Town, with interest
calculated at a stated rate of 6.75%. The schedule of future collections by the Town under this
agreement, in each of the next five fiscal years, is as follows:
Year Ending
September 30,
2007
Principal
$ 19,421
TntprPct
T„tni
$ 20,732
Effective June 1, 2002, the Trophy Club/Westlake Department of Public Safety was officially
dissolved. The Town of Trophy Club will continue to repay the remaining debt according to the
terms of the note.
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 (4,600)
Total $ 18,400
The future minimum lease obligations and the net present value of these minimum lease
payments as of September 30, 2007, were as follows:
Governmental
Year Ending Sept. 30 Activities
2016 $ 8,331
2017 8,331
2018 8,331
Total minimum lease payments 24,993
Less: amount representing interest 1,993
Present value of minimum lease payments $ 23,000
(continued)
46
IV. DETAILED NOTES ON ALL FUNDS (Continued)
General Long-term Debt
Long-term liability activity for the year ended September 30, 2007, was as follows:
Beginning
Rnlnnce Additions
Combination tax and limited
Pledge Revenue Certificates
of Obligation, Series 2002 $12,190,000
Combination tax and limited
Pledge Revenue Certificates
of Obligation, Series 2003 6,270,000
General Obligation Refunding
Bonds, Series 2007
Less deferred amounts:
On refunding
Fidelity Tax Reimbursement 266,329
7,465,000
(753,706)
Reductions
$6,560,000
145,000
100,000
(24,018)
Due
Ending Within
Balance One Year
$5,630,000 $235,000
6,125,000 145,000
7,365,000 15,000
(729,688)
20,444 245,885 21,620
$18,726,329 $6,711,294 $6,801,426 $18,636,197 $416,620
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
2008
$ 5,000
2009
420,000
2010
440,000
2011
465,000
2012
485,000
2013-2017
2,845,000
2018-2022
3,620,000
2023-2027
4,650,000
2028-2032
5,800,000
Total
$ 19,120,000
$ 13,823,538 $ 32,943,538
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)
47
Total
Interest
Requirements
$ 20,314
$ 1,315,314
900,524
1,320,524
878,974
1,318,974
855,834
1,320,834
831,034
1,316,034
3,738,460
6,583,460
2,972,842
6,592,842
1,931,488
6,581,488
794,068
6,594,068
$ 13,823,538 $ 32,943,538
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)
47
IV. 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
2008
$ 21,620
$ 14,138
$ 35,758
2009
22,863
12,895
35,758
2010
24,178
11,580
35,758
2011
25,568
10,190
35,758
2012
27,038
8,720
35,758
2013-2016
124,618
18,414
143,032
Total
$ 245,885
$ 75,937
$ 321,822
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").
Current Refundings
The Town issued $7,465,000 of general obligation bonds for the current refunding of
$6,335,000 of combination tax and limited pledge certificates of obligation. The refunding was
undertaken to reduce future debt service payments. The reacquisition price exceeded the net
carrying amount of the old debt by $753,706. This amount is being netted against the new debt
and amortized over the life of the old debt, which is shorter than the new debt. The transaction
also resulted in an economic gain of $535,745 and a reduction of $511,343 in future debt
payments.
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)
48
IV. 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, 2007, is as follows:
Outstanding Outsstanding Current
Description 09/30/06 Issued Retired 09/30/07 Portion
Contractual obligations:
Elevated water storage $ 1,198,437 $ - $ 56,082 $ 1,142,355 $ 59,277
Limited pledge contractual
obligation:
Dove Road Water Line and
West Pump Station 4,679,944 - - 4,679,944 -
$ 5,878,381 $ $ 56,082 $ 5,822,299 $ 59,277
The schedule of future payments by the Town under these agreements is as follows:
Year Ending
September 30,
Total
Principal Interest Requirements
2008
$ 59,277
$ 538,739
$ 598,016
2009
64,082
568,010
632,092
2010
67,298
599,829
667,127
2011
72,100
634,423
706,523
2012
75,304
671,426
746,730
2013-2017
456,615
4,007,256
4,463,871
2018-2022
347,678
3,796,822
4,144,500
2023
4,679,944
-
4,679,944
Total
$ 5,822,298
$ 10,816,505
$ 16,638,803
(continued)
49
IV.
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% $ 32,345,000
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, 2007:
Beginning Ending Due Within
Balance Increases Decreases Balance One Year
$ 32,600,000 $ - $ 255,000 $ 32,345,000 $ 32,345,000
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 $ 17,245,000
B 4,900,000
C 4,820,000
D 5,380,000
Total $ 32,345,000
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, 2007, 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)
50
IV. DETAILED NOTES ON ALL FUNDS (Continued)
Discretely Presented Long-term Debt (Continued)
Texas Student Housing Corporation - MSU Project
The long-term debt activity of the MSU Project is as follows:
Total
August 31,
Principal
Amounts
Beginning
2008
Ending
Due Within
Balance Increases
Decreases
Balance
One Year
Series 2002
2010
210,000
900,925
Revenue bonds $ 14,430,000 $ -
$ 145,000
$ 14,285,000
$ 170,000
Less discounts 463,786 -
23,989
439,797
-
$ 13,966,214 $ -
$ 121,011
$ 13,845,203
$ 170,000
The bonds are payable solely from the revenues generated by the property and are secured by the
revenues pledged and assigned under the terms of the trust indenture. Interest rates range from
5.5% to 6.5%. Future payments on the bonds are as follows:
Year Ending
Total
August 31,
Principal
Interest
Requirements
2008
$ 170,000
$ 919,763
$ 1,089,763
2009
200,000
911,100
1,111,100
2010
210,000
900,925
1,110,925
2011
220,000
889,650
1,109,650
2012
230,000
877,826
1,107,826
2013-2017
1,530,000
4,176,137
5,706,137
2018-2022
1,770,000
3,685,500
5,455,500
2023-2027
2,435,000
3,007,062
5,442,062
2028-2032
3,335,000
2,077,237
5,412,237
2033-2037
4,185,000
729,299
4,914,299
Total
$ 14,285,000
$ 18,174,499
$ 32,459,499
The bonds have numerous covenants which must be complied with annually. For the year ended
August 31, 2007, all of the covenants have been satisfactorily met, except the fixed charges coverage
ratio. Management does not believe this will impact the ability to continue to service the bonds.
Texas Student Housing Authority - Town Lake Austin Project
(continued)
51
Amounts
Beginning
Ending
Due Within
Balance Adjustments Increases
Decreases Balance
One Year
Revenue Bonds:
2002 A-1 Bonds
$ 16,929,280 $ - $ -
$ 189,703 $16,739,577
$ 204,958
2002 A-2 Bonds
5,089,241 - -
- 5,089,241
-
Total
$ 22,018,521 $ - $ -
$ 189,703 $21,828,818
$ 204,958
(continued)
51
IV. DETAILED NOTES ON ALL FUNDS (Continued)
Discretely Presented Long-term Debt (Continued)
Texas Student Housing Authority - Town Lake Austin Project (Continued)
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
Governmental Activities
August 31,
Principal
Interest
Total
2008
$ 204,958
$ 1,709,872 $
1,914,830
2009
221,441
1,693,389
1,914,830
2010
239,248
1,675,582
1,914,830
2011
257,979
1,656,851
1,914,830
2012
278,585
1,789,399
2,067,984
2013-2017
1,517,705
8,056,448
9,574,153
2018-2022
2,234,316
6,550,438
8,784,754
2023-2027
3,289,289
5,284,864
8,574,153
2028-2032
4,842,385
4,727,764
9,570,149
2033-2037
6,165,901
3,586,576
9,752,477
2038-2039
2,577,011
1,720,403
4,297,414
Totals
$ 21,828,818
$ 38,451,586 $
60,280,404
Texas Student Housing Authority - The Ridge at San Marcos
Amounts
Beginning Ending Due Within
Balance Increases Decreases Balance One Year
Revenue Bonds:
2000 Bonds $ 19,580,869 $ - $ 71,467 $ 19,509,402 $ 19,509,402
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, 2007, has been shown as a current liability in the accompanying financial statements.
In addition, the Project was not in compliance with certain debt covenants as of August 31, 2007.
(continued)
52
IV. DETAILED NOTES ON ALL FUNDS (Continued)
Discretely Presented Long-term Debt (Continued)
Texas Student Housing Authority - The Ridge at San Marcos (Continued)
Year Ending
August 31, Principal Interest Total
2008 $ 19,509,402 - $ 19,509,402
Texas Student Housing Authority - Ballpark Austin Project
The long-term debt activity of the Ballpark Austin Project is as follows:
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
August 31,
2008
2009
2010
2011
2012
2013-2017
2018-2022
2023-2027
2028-2032
2033
Totals
Principal
$ 595,000
620,000
650,000
680,000
715,000
4,210,000
5,485,000
7,175,000
9,420,000
7,685,000
$ 37,235,000
Governmental Activities
Interest
$ 2,367,341
2,340,339
2,311,359
2,280,294
2,247,194
10,605,181
9,321,463
7,635,888
5,392,488
750,525
$ 45,252,072
Total
$ 2,962,341
2,960,339
2,961,359
2,960,294
2,962,194
14,815,181
14,806,463
14,810,888
14,812,488
8,435,525
$ 82,487,072
At August 31, 2007, 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.
(continued)
53
Amounts
Beginning
Ending
Due Within
Balance Increases
Decreases
Balance
One Year
Revenue Bonds:
2001A Bonds
$ 32,440,000 $ -
$( 535,000)
$ 31,905,000
$ 560,000
2001B Bonds
2,365,000 -
( 35,000)
2,330,000
35,000
2001C Bonds
3,000,000 -
-
3,000,000
-
Less discounts
( 1,522,161) -
60,085
( 1,462,076)
-
Total
$ 36,282,839 $ -
$( 509,915)
$ 35,772,924
$ 595,000
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
August 31,
2008
2009
2010
2011
2012
2013-2017
2018-2022
2023-2027
2028-2032
2033
Totals
Principal
$ 595,000
620,000
650,000
680,000
715,000
4,210,000
5,485,000
7,175,000
9,420,000
7,685,000
$ 37,235,000
Governmental Activities
Interest
$ 2,367,341
2,340,339
2,311,359
2,280,294
2,247,194
10,605,181
9,321,463
7,635,888
5,392,488
750,525
$ 45,252,072
Total
$ 2,962,341
2,960,339
2,961,359
2,960,294
2,962,194
14,815,181
14,806,463
14,810,888
14,812,488
8,435,525
$ 82,487,072
At August 31, 2007, 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.
(continued)
53
IV. DETAILED NOTES ON ALL FUNDS (Continued)
Discretely Presented Long-term Debt (Continued)
Texas Student Housing Corporation - The Ridge at North Texas
The long-term debt activity of the Ridge at North Texas is as follows:
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, 2007, are as follows and have not
been adjusted for the default of the bonds. Under the original terms of the Indenture, a total of
$510,000 in principal and $2,110,593 in interest is due in fiscal 2008. The total interest to be
paid will depend on the ultimate maturities of the bonds.
Year Ending
August 31,
2008
Principal
$ 31,245,000
Interest
$ 33,990,402
Total
$ 65,235,402
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 $490,438 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 ContinEencies
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, 2007.
(continued)
54
Amounts
Beginning
Ending
Due Within
Balance Increases
Decreases
Balance
One Year
Revenue Bonds:
2001A Bonds
$ 28,490,000 $ -
$( 485,000)
$ 28,005,000
$ 28,005,000
2001B Bonds
3,240,000 -
-
3,240,000
3,240,000
Less discounts
( 897,234) -
37,485
( 859,749)
( 859,749)
Total
$ 30,832,766 $ -
$( 447,515)
$ 30,385,251
$ 30,385,251
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, 2007, are as follows and have not
been adjusted for the default of the bonds. Under the original terms of the Indenture, a total of
$510,000 in principal and $2,110,593 in interest is due in fiscal 2008. The total interest to be
paid will depend on the ultimate maturities of the bonds.
Year Ending
August 31,
2008
Principal
$ 31,245,000
Interest
$ 33,990,402
Total
$ 65,235,402
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 $490,438 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 ContinEencies
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, 2007.
(continued)
54
IV. DETAILED NOTES ON ALL FUNDS (Continued)
Commitments and Contingencies (Continued)
Lease Obligations (Continued)
Minimum lease payments and contractual obligations under these noncancellable leases and
agreements as of September 30, 2007, are as follows:
Year Ending
September 30,
Amount
2008
$ 126,703
2009
126,703
2010
126,703
2011
84,469
$ 464,578
Rental expenditures in 2007 were $137,761.
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.
(continued)
55
IV. DETAILED NOTES ON ALL FUNDS (Continued)
Commitments and Contingencies (Continued)
Federal and State Program Revenues (Continued)
Sources of federal and state program revenues for the year ended September 30, 2007, were as
follows:
Source
Federal program revenues:
Department of Homeland Security
U. S. Department of Education - Passed
through State Department of Education
State program revenues:
State Department of Education
Grant Westlake
Fund Academy Total
$ 12,550 $ - 12,550
- 36,650 36,650
$ 12,550 $ 36,650 $ 49,200
$ - $ 2,387,733 $ 2,387,733
Interfund Balances and Transactions
Interfund receivables and payables at September 30, 2007, were as follows:
(continued)
56
Due from
Due to
Other Funds
Other Funds
General fund:
Debt service
$ 62,353
$ -
Visitors Association fund
-
14,634
Enterprise fund
69,830
7,093
Capital projects fund
-
95,318
Visitors Association fund:
General fund
14,634
-
Capital projects fund
13,331
-
Property tax reduction fund:
Debt service
45,887
-
Capital projects fund:
General fund
95,318
-
Visitors Association
-
13,331
Debt service fund:
General fund
-
62,353
Property tax reduction fund
-
45,887
Enterprise fund:
General fund
7,093
69,830
$ 308,446
$ 308,446
(continued)
56
IV. DETAILED NOTES ON ALL FUNDS (Continued)
Interfund Balances and Transactions (Continued)
Receivable and payable balances between the Town and its component units consisted of the
following at September 30, 2007:
Primary Government
General fund:
Westlake 4B Corporation
Debt Service fund:
Westlake 4B Corporation
Enterprise Fund:
Westlake 4B Corporation
Component Units
Westlake 4B Corporation:
General fund
Debt service fund
Enterprise fund
Totals
Due from Due to
Other Funds Other Funds
$ 830 $ -
108,240 -
386,500
830
- 108,240
386,500 -
$ 495,570 $ 495,570
These balances represent advances from the component units for operations and capital expenditures.
Amounts totaling $386,500 represent advances for capital transactions to be repaid over a 15 -year
term.
Transactions between the primary government's funds and its component units for the year ended
September 30, 2007, consisted of the following:
Contribution from
Component units:
Westlake 4B Corporation
Debt
Service Total
$ 733,415 $ 733,415
Contributions from the Westlake 4B Corporation to the Debt Service Fund in the amount of
$733,415 represent principal and interest expense associated with debt for the construction of the
Academy and civic center as authorized in Section 4B of the Texas Revised Civil Statutes, Ann.
Sec. 5190.6.
(continued)
57
IV. DETAILED NOTES ON ALL FUNDS (Continued)
Interfund Balances and Transactions (Continued)
Interfund transfers between the primary government's funds consisted of:
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, 2007, was $561,106.
V. OTHER INFORMATION
Retirement Plan
Plan Description
The Town provides pension benefits for all of its fulltime employees through a nontraditional,
joint contributory, hybrid defined contribution plan in the statewide Texas Municipal Retirement
System ("TMRS"), one of 821 administered by TMRS, an agent multiple -employer public
employee retirement system. All assumptions for the December 31, 2006, valuations are
contained in the 2006 TMRS Comprehensive Annual Financial Report, a copy of which may be
obtained by writing to P. O. Box 149153, Austin, Texas 78714-9153.
(continued)
58
Transfers in
Transfers out
General fund:
Utility fund
$ 43,976
$ 10,000
Capital Projects fund
-
590,123
Debt Service fund:
Property Tax Reduction fund
578,459
-
Property Tax Reduction fund:
Debt Service fund
-
578,459
Capital projects fund:
General fund
590,123
-
Utility fund:
General fund
10,000
43,976
$ 1,222,558
$ 1,222,558
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, 2007, was $561,106.
V. OTHER INFORMATION
Retirement Plan
Plan Description
The Town provides pension benefits for all of its fulltime employees through a nontraditional,
joint contributory, hybrid defined contribution plan in the statewide Texas Municipal Retirement
System ("TMRS"), one of 821 administered by TMRS, an agent multiple -employer public
employee retirement system. All assumptions for the December 31, 2006, valuations are
contained in the 2006 TMRS Comprehensive Annual Financial Report, a copy of which may be
obtained by writing to P. O. Box 149153, Austin, Texas 78714-9153.
(continued)
58
V. OTHER INFORMATION (Continued)
Retirement Plan (Continued)
Plan Description (Continued)
Benefits depend upon the sum of the employee's contributions to the plan, with interest, and the
Town -financed monetary credits, with interest. At the date the plan began, the Town granted
monetary credits for service rendered before the plan began of a theoretical amount equal to two
times what would have been contributed by the employee, with interest, prior to establishment of
the plan. Monetary credits for service since the plan began are 100%, 150%, or 200% of the
employee's accumulated contributions.
In addition, the Town can grant, as often as annually, another type of monetary credit referred to
as updated service credit which is a theoretical amount which, when added to the employee's
accumulated contributions and the monetary credits for service since the plan began, would be
the total monetary credits and employee contributions accumulated with interest if the current
employee contribution rate and Town matching percent had always been in existence and if the
employee's salary had always been the average of his/her salary in the last three years that are
one year before the effective date. At retirement, the benefit is calculated as if the sum of the
employee's accumulated contributions with interest and the employer -financed monetary credits
with interest were used to purchase an annuity.
The plan provisions are adopted by the governing body of the Town, within the options available
in the state statutes governing TMRS and within the actuarial constraints also in the statutes.
Deposits are at a rate of 7%, and the Town matching ratio is currently 2 to 1. An employee is
vested after 5 years of service. Employees can retire at age 60 with 5 years of service or at any
age after 20 years of service with the Town.
Contributions
Under the state law governing TMRS, the actuary annually determines the Town contribution
rate. This rate consists of the normal cost contribution rate and the prior service contribution
rate, both of which are calculated to be a level percent of payroll from year to year. The normal
cost contribution rate finances the currently accruing monetary credits due to the Town matching
percent, which are the obligation of the Town as of an employee's retirement date, not at the
time the employee's contributions are made. The normal cost contribution rate is the actuarially
determined percent of payroll necessary to satisfy the obligation of the Town to each employee
at the time his/her retirement becomes effective. The prior service contribution rate amortizes
the unfunded (overfunded) actuarial liability (asset) over the remainder of the plan's 25 -year
amortization period. The unit credit actuarial cost method is used for determining the Town
contribution 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.
(continued)
59
V. OTHER INFORMATION
Retirement Plan (Continued)
Contributions (Continued)
Schedule of Actuarial Liabilities and Funding Progress
Actual Valuation Date
12/31/04
12/31/05
Actuarial value of assets $
412,742
$ 597,993
Actuarial accrued liability
423,569
635,973
Percent funded
97.4%
94.0%
Unfunded (overfunded) actuarial accrued liability (UAAL)
10,827
37,980
Annual covered payroll
1,299,091
1,243,374
UAAL as a percentage of covered payroll
0.8%
3.1%
Net pension obligation (NPO at the beginning of period
-
-
Annual required contribution (ARC)
105,663
98,388
Contributions made
105,663
98,388
NPO at the end of the period
Actuarial Cost Method
Amortization Method
Remaining Amortization Period
Asset Valuation Method
Amortzation Period
Investment Rate of Return
Projected Salary Increases
Includes Inflation at
Cost -of -living Adjustments
Risk Management
Actuarial Assumptions
12/31/06
773,412
821,401
94.2%
47,989
1,300,610
3.7%
98,030
98,030
- Unit Credit
- Level Percent of Payroll
- 25 Years - Open Period
- Amortized Cost (to accurately reflect the
requirements of GASB Statement No. 25,
paragraphs 36e and 138)
- Open
- 7%
- None
- 3.5%
- None
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.
(continued)
60
V. OTHER INFORMATION
Contingent Liabilities
Various claims and lawsuits are pending against the Town. In the opinion of Town management,
after consultation with legal counsel, the potential loss on all claims and lawsuits will not
materially effect the Town's financial position.
61
19
REQUIRED
SUPPLEMENTARY INFORMATION
19
TOWN OF WESTLAKE, TEXAS
VISITORS ASSOCIATION FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2007
62
Variance
Budgeted Amounts
Favorable
Original
Amended
Actual
(Unfavorable)
REVENUES
Taxes
Hotel occupancy
$ 400,000
$ 400,000
$ 458,471
$ 58,471
Interest income
40,000
45,000
49,746
4,746
Other miscellaneous income
11,000
13,000
32,101
19,101
Total revenues
451,000
458,000
540,318
82,318
EXPENDITURES
Visitors services
243,348
251,199
226,992
24,207
Total expenditures
243,348
251,199
226,992
24,207
NET CHANGE IN FUND BALANCE
207,652
206,801
313,326
106,525
FUND BALANCE, BEGINNING
869,694
869,694
869,694
-
FUND BALANCE, ENDING
$ 1,077,346
$ 1,076,495
$ 1,183,020
$ 106,525
62
TOWN OF WESTLAKE, TEXAS
WESTLAKE ACADEMY
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED AUGUST 31, 2007
REVENUES
State program revenues
Federal program revenues
Interest income
Other miscellaneous income
Total revenues
EXPENDITURES
Education
Total expenditures
NET CHANGE IN FUND BALANCE
FUND BALANCE, BEGINNING
FUND BALANCE, ENDING
63
Variance
Budgeted Amounts
Favorable
Original
Amended
Actual
(Unfavorable)
$ 2,249,742
$ 2,248,368
$ 2,387,733
$ 139,365
30,377
37,636
36,650
( 986)
23,644
23,644
23,644
-
480,107
479,644
488,691
9,047
2,783,870
2,789,292
2,936,718
147,426
2,791,133
2,757,835
2,672,698
85,137
2,791,133
2,757,835
2,672,698
85,137
( 7,263)
31,457
264,020
232,563
427,720
427,720
427,720
-
$ 420,457
$ 459,177
$ 691,740
$ 232,563
63
TOWN OF WESTLAKE, TEXAS
GRANT FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2007
Variance
Budgeted Amounts Favorable
Original Amended Actual (Unfavorable)
REVENUES
Federal program revenues $ - $ 12,550 $ 12,550 $ -
Total revenues - 12,550 12,550 -
EXPENDITURES
Public safety - 12,550 12,550 -
Total expenditures - 12,550 12,550 -
NET CHANGE IN FUND BALANCE - - - -
FUND BALANCE, BEGINNING - - - -
FUND BALANCE, ENDING $ - $ - $ - $ -
64
TOWN OF WESTLAKE, TEXAS
PROPERTY TAX REDUCTION FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2007
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)
$ 750,000 $ 800,000 $ 732,585 $( 67,415)
3,500 500 348 ( 152)
753,500 800,500 732,933 ( 67,567)
753,500
800,500
732,933
( 67,567)
( 598,953)
( 504,425)
( 578,459)
( 74,034)
( 598,953)
( 504,425)
( 578,459)
( 74,034)
154,547
296,075
154,474
( 141,601)
$ 154,547
$ 296,075
$ 154,474
$( 141,601)
65
COMBINING FUND
STATEMENTS AND SCHEDULES
19
TOWN OF WESTLAKE, TEXAS
COMBINING BALANCE SHEET
WESTLAKE ACADEMY
SEPTEMBER 30, 2007
66
Westlake
Westlake
Academy
Academy
Total
General
Special
Westlake
Fund
Revenue Fund
Academy
ASSETS:
Cash and cash equivalents
$ 666,542
$ 3,630
$ 670,172
Receivables
Accounts receivable
87,619
565
88,184
Other assets
17,216
-
17,216
TOTAL ASSETS
$ 771,377
$ 4,195
$ 775,572
LIABILITIES AND FUND BALANCE:
Liabilities:
Accounts payable
79,637
4,195
83,832
Total liabilities
79,637
4,195
83,832
Fund Equity:
Fund balance
Unreserved and undesignated
691,740
-
691,740
Total fund equity
691,740
-
691,740
TOTAL LIABILITIES AND FUND EQUITY
$ 771,377
$ 4,195
$ 775,572
66
TOWN OF WESTLAKE, TEXAS
WESTLAKE ACADEMY
COMBING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
FOR THE YEAR ENDED AUGUST 31, 2007
EXPENDITURES
Current
Education 2,615,511
Total expenditures 2,615,511
NET CHANGE IN FUND BALANCE 264,020
FUND BALANCE, BEGINNING 427,720
FUND BALANCE, ENDING $ 691,740
67
Westlake
Westlake
Academy
Academy
Special
General
Revenue Fund
Fund
REVENUES
$ 2,387,733
State program revenues
$ 2,367,196
Federal Program Revenue
-
Interest income
23,644
Other miscellaneous income
488,691
Total revenues
2,879,531
EXPENDITURES
Current
Education 2,615,511
Total expenditures 2,615,511
NET CHANGE IN FUND BALANCE 264,020
FUND BALANCE, BEGINNING 427,720
FUND BALANCE, ENDING $ 691,740
67
Westlake
Academy
Total
Special
Westlake
Revenue Fund
Academy
$ 20,537
$ 2,387,733
36,650
36,650
-
23,644
-
488,691
57,187
2,936,718
57,187
57,187
2,672,698
2,672,698
264,020
427,720
$ 691,740
TOWN OF WESTLAKE, TEXAS
DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2007
REVENUES
Interest income
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
Refunding bonds issued
Payments to bond escrow agent
Total other financing sources (uses)
NET CHANGE IN FUND BALANCE
FUND BALANCE, BEGINNING
FUND BALANCE, ENDING
68
470,000
470,000
Variance
Final Budgeted
1,240,950
Favorable
Amounts
Actual
(Unfavorable)
$ 33,068
$ 22,782
$( 10,286)
797,163
733,415
( 63,748)
830,231
756,197
( 74,034)
470,000
470,000
-
864,656
1,240,950
( 376,294)
1,334,656
1,710,950
( 376,294)
( 504,425)
( 954,753)
( 450,328)
504,425
578,459
74,034
-
7,465,000
7,465,000
-
( 7,088,706)
( 7,088,706)
504,425
954,753
450,328
19
STATISTICAL SECTION
19
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. 69
Revenue Capacity
These schedules contain information to help the reader assess the Town's
most significant local revenue sources. Although sales taxes are the
Town's most significant local revenue source, information about
principal revenue payers is confidential under Texas statutes, and;
therefore, not disclosed. Trend information about sales tax revenue is
provided in Table 5. 75
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. 76
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. 78
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. 80
Sources: Unless otherwise noted, the information in these schedules is derived from annual
financial reports for the relevant year.
19
Table 1
TOWN OF WESTLAKE, TEXAS
NET ASSETS BY COMPONENT
LAST FOUR FISCAL YEARS
(Accrual Basis of Accounting - unaudited)
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
Fiscal Year
2004 2005 2006 2007
$ 9,084,603 $ 7,975,910 $ 9,171,657 $ 9,646,644
124,185 - 1,406,756 1,719,771
1,246,351 1,557,394 3,023,875 3,305,542
$ 10,455,139 $ 9,533,304 $ 13,602,288 $ 14,671,957
$ 8,118,139 $ 8,450,781 $ 8,436,729 $ 8,097,807
( 1,462,451) ( 1,621,273) ( 1,846,851) ( 2,008,243)
$ 6,655,688 $ 6,829,508 $ 6,589,878 $ 6,089,564
$ 17,202,742 $ 16,426,691 $ 17,608,386 $ 17,744,451
124,185 - 1,406,756 1,719,771
( 216,100) ( 63,879) 1,177,024 1,297,299
$ 17,110,827 $ 16,362,812 $ 20,192,166 $ 20,761,521
Note: The Town began to report accrual information when it implemented GASB Statement 34 in fiscal year 2004
Source: Annual financial reports.
69
Table 2
TOWN OF WESTLAKE, TEXAS
CHANGES IN NET ASSETS
LAST FOUR FISCAL YEARS
(Accrual basis of accounting - Unaudited)
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
Operating grants and contributions
Capital grants and contributions
Total business -type activities program revenues
Total primary government program revenues
NET (EXPENSE) REVENUES
Governmental activities
Business -type activities
Total primary government net expense
$ 713,000
$ 1,039,214
Fiscal Year
$ 785,771
20,752
2004
2005
2006
2007
EXPENSES
699,753
625,340
38,947
39,430
Governmental activities:
85,925
1,605,091
1,646,438
3,686,964
General government
$ 1,862,863
$ 2,162,365
$ 1,811,281
$ 1,941,289
Public Safety
1,604,171
1,592,962
1,705,528
1,738,080
Cultural and Recreational
84,557
96,617
91,444
86,560
Economic Development
53,006
349,208
35,759
120,753
Public Works
533,290
342,500
613,956
455,481
Visitor Services
172,542
448,604
393,115
217,992
Education
1,655,212
2,166,256
2,249,998
2,672,698
Interest on long-term debt
1,012,982
1,028,104
1,021,779
869,327
Total governmental activities expenses
6,978,623
8,186,616
7,922,860
8,102,180
Business -type activities:
Water and Sewer
1,702,081
1,888,064
2,137,831
2,206,618
Total business -type activities expenses
1,702,081
1,888,064
2,137,831
2,206,618
Total primary government program expenses
$ 8,680,704
$ 10,074,680
$ 10,060,691
$ 10,308,798
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
Operating grants and contributions
Capital grants and contributions
Total business -type activities program revenues
Total primary government program revenues
NET (EXPENSE) REVENUES
Governmental activities
Business -type activities
Total primary government net expense
$ 713,000
$ 1,039,214
$ 742,176
$ 785,771
20,752
45,213
136,870
165,255
784,546
711,655
699,753
625,340
38,947
39,430
98,357
85,925
1,605,091
1,646,438
3,686,964
1,257,058
263,941
141,139
1,455,626
-
3,426,277
3,623,089
6,819,746
2,919,349
1,200,660
1,722,659
1,842,238
1,657,186
-
370,551
19,653
-
1,200,660
2,093,210
1,861,891
1,657,186
$ 4,626,937
$ 5,716,299
$ 8,681,637
$ 4,576,535
$( 3,552,346)
$( 4,563,527)
$( 1,103,114)
$( 5,182,831)
( 501,421)
205,146
( 275,940)
( 549,432)
( 4,053,767)
( 4,358,381)
( 1,379,054)
( 5,732,263)
70
(continued)
TOWN OF WESTLAKE, TEXAS
CHANGES IN NET ASSETS
LAST FOUR FISCAL YEARS
(Accrual basis of accounting - Unaudited)
GENERAL REVENUES AND OTHER
CHANGES IN NET ASSETS
Governmental activities:
Taxes
Sales
Hotel Occupancy
Mixed Beverage
Franchise
Unrestricted grants and contributions
Investment earnings
Miscellaneous
Transfers
Total governmental activities
Business -type activities:
Investment earnings
Miscellaneous
Transfers
Total business -type activities
Total primary government
CHANGE IN NET ASSETS
Governmental activities
Business -type activities
Total primary government
Table 2
Fiscal Year
2004 2005 2006 2007
$ 868,046
$ 994,606
$ 1,810,706
$ 2,197,756
440,849
381,221
415,544
458,471
10,511
13,846
13,674
14,066
337,222
352,115
457,004
560,312
937,187
1,722,198
1,822,200
2,259,643
33,180
41,802
98,824
261,622
134,717
64,047
448,827
466,654
-
71,857
45,319
33,976
2,761,712
3,641,692
5,112,098
6,252,500
3,245
2,416
25,604
46,158
-
-
56,025
36,936
-
( 71,857)
( 45,319)
( 33,976)
3,245
( 69,441)
36,310
49,118
2,764,957
3,572,251
5,148,408
6,301,618
( 790,634)
( 921,835)
4,008,984
1,069,669
( 498,176)
135,705
( 239,630)
( 500,314)
$( 1,288,810)
$( 786,130)
$ 3,769,354
$ 569,355
Note: The Town began to report accrual information when it implemented GASB Statement 34 in fiscal year 2004
Source: Annual financial reports.
71
TABLE 3
TOWN OF WESTLAKE, TEXAS
FUND BALANCES
GOVERNMENTAL FUNDS
LAST EIGHT FISCAL YEARS
(Modified Accrual Basis of Accounting - unaudited)
All other governmental funds
Reserved $ - $ - $ - $ - $ - $ - $ - $ -
Special revenue funds 4,843,690 6,002,623 5,287,758 539,019 818,525 779,244 869,694 1,183,020
Capital projects funds $ - $ - 11,071,320 2,748,579 213,297 - 102,687 102,376
Unreserved, reported in:
Special revenue funds - - - - 12,391 181,960 427,720 846,214
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
Note: Economic Development Funds were classified as Special Revenue Funds through fiscal year 2002. They are considered component units in subsequent years.
Source: Annual financial reports - no audits were available prior to fiscal year 2000.
72
Fiscal Year
2000 2001 2002 2003 2004
2005
2006
2007
General fund
Reserved
$ - $ - $ - $ - $ 329,608
$ 131,657
$ 434,375
$ 563,176
Unreserved
1,907,021 2,006,348 1,700,025 1,608,248 670,465
805,769
2,850,789
2,533,123
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
All other governmental funds
Reserved $ - $ - $ - $ - $ - $ - $ - $ -
Special revenue funds 4,843,690 6,002,623 5,287,758 539,019 818,525 779,244 869,694 1,183,020
Capital projects funds $ - $ - 11,071,320 2,748,579 213,297 - 102,687 102,376
Unreserved, reported in:
Special revenue funds - - - - 12,391 181,960 427,720 846,214
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
Note: Economic Development Funds were classified as Special Revenue Funds through fiscal year 2002. They are considered component units in subsequent years.
Source: Annual financial reports - no audits were available prior to fiscal year 2000.
72
Table 4
TOWN OF WESTLAKE, TEXAS
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS
LAST EIGHT FISCAL YEARS
(Modified Accrual Basis of Accounting - unaudited)
(Continued)
73
Fiscal Year
2000
2001
2002
2003
2004
2005
2006
2007
REVENUES
Taxes $
3,086,618
$ 2,663,738
$ 1,863,255
$ 1,874,312
$ 1,656,628
$ 1,741,788
$ 2,696,928
$ 3,230,605
Licenses, fees and permits
477,849
700,313
253,919
508,154
802,060
740,027
748,016
900,121
Fines and penalties
7,867
401,755
548,375
680,794
1,007,142
751,036
651,090
State program revenues
53,309
995,784
1,597,362
1,925,043
2,387,733
Federal program revenues
311,298
462,315
285,392
75,662
49,200
Investment earnings
349,321
343,107
351,243
151,591
33,180
41,786
98,824
261,622
Contributions
1,286,611
1,324,264
4,964,085
1,079,768
Otherrevenues
102,380
1,475
233,675
16,099
184,221
292,690
547,184
552,579
Total revenues
4,024,035
3,708,633
3,103,847
3,463,138
6,101,593
7,030,451
11,806,778
9,112,718
EXPENDITURES
General government
1,834,741
857,217
1,592,597
1,087,368
1,725,211
2,243,162
2,542,295
1,385,492
Public safety
-
409,512
1,007,589
1,282,112
1,547,857
1,554,115
1,627,641
1,665,879
Cultural and recreational
-
5,967
10,472
14,043
9,099
96,617
91,444
86,560
Economic development
-
661,077
1,093,673
56,832
53,006
35,758
35,759
141,197
Public works
-
-
-
68,979
125,499
112,764
434,716
276,789
Protective inspection
-
-
-
187,922
80,935
-
Visitor services
-
-
-
131,395
172,542
448,604
393,115
226,992
Education
-
-
-
156,870
1,368,113
1,877,398
2,249,998
2,672,698
Debt service
Principal
-
-
-
1,475,400
-
-
350,000
470,000
Interest
-
-
78,012
836,533
986,534
1,028,104
1,028,634
1,240,950
Capital outlay
-
174,959
1,344,137
14,096,533
2,917,185
263,681
371,860
836,787
Total expenditures
1,834,741
2,108,732
5,126,480
19,393,987
8,985,981
7,660,203
9,125,462
9,003,344
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES $
2,189,294
$ 1,599,901
$( 2,022,633)
$(15,930,849)
$(2,884,388)
$( 629,752)
$ 2,681,316
$ 109,374
(Continued)
73
Table 4
TOWN OF WESTLAKE, TEXAS
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS
LAST EIGHT FISCAL YEARS
(Modified Accrual Basis of Accounting - unaudited)
Note: Economic Development Funds were classified as special revenue funds through FY 2002. They are considered component units in subsequent years
Source: Annual Financial Reports. No audits were available prior to fiscal year 2000.
74
Fiscal Year
2000
2001 2002
2003 2004
2005
2006
2007
OTHER FINANCING SOURCES (USES):
Proceeds from sale of land $
-
$ - $ -
$ - $ - $
412,239
$ -
$ -
Bond proceeds
-
- 12,400,000
6,351,613 -
-
-
-
Refunding bonds issued
7,465,000
Payments to bond escrow agent
( 7,088,706)
Cost to issue debt
( 451,613)
-
Proceeds from capital lease
23,000
Transfer in from component unit
-
- -
1,155,912 -
-
-
-
Transfers in
83,366
- 588,852
225,000 -
172,010
704,577
1,212,558
Transfers out (
757,476)
- ( 588,852)
( 225,000) - (
100,153)
( 659,258)
(1,178,582)
Total other financing sources (uses) (
674,110)
- 12,400,000
7,055,912 -
484,096
45,319
433,270
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
DEBT SERVICE AS A PERCENTAGE OF
OF NONCAPITAL EXPENDITURES
- %
- % 2.1%
77.4% 19.4%
16.1%
18.7%
26.5%
Note: Economic Development Funds were classified as special revenue funds through FY 2002. They are considered component units in subsequent years
Source: Annual Financial Reports. No audits were available prior to fiscal year 2000.
74
Table 5
TOWN OF WESTLAKE, TEXAS
TAXABLE SALES BY INDUSTRY TYPE
LAST TWO FISCAL YEARS
(Unaudited)
Town direct sales tax rate 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.
75
Fiscal Year
NAICS
Industry Type
2006
2007
11
Agriculture, Forestry, Fishing and Hunting $
31
$ 67
21
Mining
2321
-
22
Utilities
463,222
212,336
23
Construction
81,542
200,791
31-33
Manufacturing
1,120,328
360,010
42
Wholesale Trade
248,702
284,082
44-45
Retail
408,556
253,293
48-49
Transportation and Warehousing
63
491
51
Information
538,210
223,672
52
Financial and Insurance
10,162
343,446
53
Real Estate and Rental and Leasing
178,047
204,398
54
Professional, Scientific, and Technical Services
111,746
452,018
56
Administrative and Support and Waste Management & Remediation Services
245,562
45,809
61
Education Services
895
317
62
Health Care and Social Assistance
10
-
71
Arts, Entertainment and Recreation
49,474
224,101
72
Accommodation and Food Services
34,021
57,084
81
Other Services (except Public Administration)
130,476
130,392
92
Public Administration
170
-
$
3,621,217
$ 2,992,308
Town direct sales tax rate 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.
75
Table 6
TOWN OF WESTLAKE, TEXAS
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
LAST SIX FISCAL YEARS
76
General Bonded Debt Outstanding
Percentage
General Certificates
of Actual
Fiscal
Obligation of
Taxable
Per
Year
Bonds Obligation
Total
Sales
Capita
2002
$ - $ 12,400,000 $
12,400,000
21.00%
$ 42,907
2003
- 18,810,000
18,810,000
15.77%
62,079
2004
- 18,810,000
18,810,000
21.31%
57,348
2005
- 18,810,000
18,810,000
18.91%
52,986
2006
- 18,460,000
18,460,000
10.19%
26,447
2007
7,365,000 11,755,000
19,120,000
13.05%
27,198
Note:
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.
76
Table 7
TOWN OF WESTLAKE, TEXAS
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST EIGHT FISCAL YEARS
(Unaudited)
77
Business -Type
Governmental Activities
Activities
General Certificates
Total
Percentage
Fiscal
Obligation of
Other
Other
Primary
of Personal
Per
Year
Bonds Obligation
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
2005
- 18,460,000
266,329
5,878,381
24,604,710
70%
35,250
2007
7,365,000 11,755,000
245,885
5,822,299
25,188,184
69%
35,830
Note:
Details regarding the Town's outstanding debt can
be found in the notes to the financial
statements.
No debt was
issued until fiscal year 2000
See Table 8 for personal income and population data.
77
Table 8
TOWN OF WESTLAKE, TEXAS
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST EIGHT FISCAL YEARS
(Unaudited)
Per Capita Tarrant County
Calendar Estimated Personal Personal Unemployment
Year Population Income Income Rate
2000 207 $ 8,743,059 $ 42,237 3.6%
2001 255 11,093,548 43,504 4.5%
2002 289 12,949,868 44,809 6.1%
2003 303 13,984,514 46,154 6.3%
2004 328 15,592,502 47,538 5.6%
2005 355 17,3 82,312 48,964 5.1%
2006 698 35,202,364 50,433 4.7%
2007 703 36,518,166 51,946 4.2%
Sources: 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
Note: 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.
78
Table 9
TOWN OF WESTLAKE, TEXAS
PRINCIPAL EMPLOYERS
CURRENT FISCAL YEAR
(Unaudited)
Total
8,120 97%
Note: Information on the Principal Employers from 1998 is not available. Comparison will be made to the prior
year until a ten-year prior comparison can be made.
Source: Maguire Partner's tenant records and contact with employers of the Town.
79
2007
Percentage
of Estimated
Total Town
Employer
Employees
Employment
Fidelity Investments
3,100
37.15%
First American Real Estate Solutions
3,000
35.95%
Wells Fargo
790
9.47%
Daimler Chrysler
325
3.89%
McKesson Corporation
215
2.58%
Sonitrol
165
1.98%
Walco
150
1.80%
Vaquero Club
140
1.68%
Marriott Solana Hotel
120
1.44%
Pfizer, Inc.
115
1.38%
Total
8,120 97%
Note: Information on the Principal Employers from 1998 is not available. Comparison will be made to the prior
year until a ten-year prior comparison can be made.
Source: Maguire Partner's tenant records and contact with employers of the Town.
79
Table 10
TOWN OF WESTLAKE, TEXAS
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES
BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
(Unaudited)
Function/Program 1998 1999
2000
2001
2002
2003
2004
2005
2006
2007
General government
Town manager - -
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
Administrative
0.50
1.50
1.50
0.50
0.50
0.50
Building - -
-
-
1.00
-
1.00
1.00
1.00
1.00
Town secretary 0.50 0.50
0.50
1.00
1.00
1.00
1.00
1.00
1.00
1.00
Municipal
3.00
3.00
4.50
4.75
4.75
5.00
Finance - -
-
-
1.00
3.00
3.00
3.00
3.00
3.00
Public safety (EMS)
1.00
10.00
10.00
10.00
11.00
11.00
Culture and recreation
1.00
1.00
1.00
1.00
Public works - -
-
-
-
1.00
1.00
1.00
1.00
Marketing and public affairs
1.00
1.00
1.00
Education
18.00
28.00
33.00
36.00
Total 0.50 0.50
1.50
3.50
10.50
20.50
43.00
53.25
59.25
61.00
Source: Prior Town budgets and Academy personnel records
Note: A full time employee is scheduled to work 2,080 hours per year (including
vacation and sick leave).
Fulltime equivalent employment is calculated
by dividing
total
total labor hours by 2,080.
80
Table 11
TOWN OF WESTLAKE, TEXAS
OPERATING INDICATORS
BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
(Unaudited)
Fiscal Year
Function/Program
1988
1999
2000
2001
2002
2003
2004
2005
2006
2007
General government
Building permits issued
N/A
N/A
N/A
57
19
115
168
219
192
150
Building permit values
N/A
N/A
N/A
$ 8,684,000
$ 12,495,020
$ 11,870,125
$ 46,698,935
$ 43,563,720
$ 42,910,780
$ 46,923,814
Police (Contract with Keller PD)
Motor vehicle stops
3,968
3,968
3,968
3,968
3,968
9,993
9,237
9,586
8,992
10,045
Traffic accident investigations
86
86
86
86
86
91
180
163
164
225
Part I crimes
16
16
16
16
16
46
19
26
30
25
DWI arrests
55
55
55
55
55
117
70
86
56
53
Fire/EMS
Fire runs
N/A
N/A
N/A
N/A
N/A
108
78
148
136
153
Ambulance runs
N/A
N/A
N/A
N/A
N/A
150
115
135
207
251
Inspections
N/A
N/A
N/A
N/A
N/A
N/A
N/A
89
161
96
Public Works - General
Street resurfacing (sq. footage)
0
0
0
0
0
1.65
1.30
-
1.35
1.01
Potholes repaired
0
0
0
0
0
0
40
40
20
0
Public Works - Utility
Number of water consumers
0
0
N/A
67
102
130
177
271
338
386
Water main breaks
0
0
N/A
N/A
N/A
N/A
1
3
3
2
Avg daily consumption MG (water)
0
0
0.054
0.269
0.404
0.382
0.501
0.817
1.031
0.729
Peak daily consumption MG (water)
0
0
N/A
2.203
1.820
1.244
1.423
2.198
2.677
1.978
System capacity - MG (water)
0
0
0.685
0.685
0.685
0.685
1.685
1.685
1.685
1.685
Water purchased (in gallons x 000)
0
0
19,554
98,229
147,423
138,288
183,356
298,124
376,264
266,158
Water sold (in gallons x 1000)
0
0
N/A
N/A
154,702
127,998
150,869
230,657
338,085
246,280
Wastewater
Number of new sewer connections
0
0
N/A
40
75
105
139
179
211
235
Avg daily sewage treatment
N/A
N/A
0.0302
0.0490
0.0630
0.0610
0.0710
0.0950
0.1270
0.1320
(thousands of gallons)
Source: Various City departments
Notes: N/A represents information
that is unavailable
First year for the water/sewer system was
fiscal year 2000
81
Table 12
TOWN OF WESTLAKE, TEXAS
CAPITAL ASSET STATISTICS
BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
(Unaudited)
Fiscal Year
Function/Program
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Fire
Stations
0
0
0
0
0
1
1
1
1
1
Public Works - Utility
Pump station
0
0
1
1
1
1
1
1
1
1
Lift station
2
2
2
2
2
2
Telecommunications Duct Bank (LF)
0
0
0
0
21,573
24,073
36,703
38,303
38,303
38,303
Telecommunications Duct Bank Manho
0
0
0
0
53
58
91
95
95
95
Water
Water mains (LF)
0
0
13,000
24,000
34,000
48,000
52,000
57,500
58,300
59,200
Fire hydrants
0
0
5
10
24
55
76
95
119
119
Storage capacity MG
0
0
0.685
0.685
0.685
0.685
1.685
1.685
1.684
1.685
Wastewater
Sanitary sewers (LF)
0
0
1,500
8,700
15,300
18,100
20,000
15,000
-
-
Manholes
10
20
50
115
160
200
250
250
Public Works - Utility
Streets (miles)
10.50
10.50
10.50
10.50
10.80
10.80
10.80
10.80
10.80
10.80
Highways (miles)
0
0
0
0
0
0
0
0
0
0
Streetlights
0
0
0
0
0
0
0
0
0
0
Traffic signals (school zone flashers)
0
0
0
0
0
2
2
2
2
2
Parks and recreation
Acreage
0
13.5
13.5
13.5
13.5
13.5
13.5
13.5
18.5
18.5
Playgrounds
0
0
0
0
2
2
2
2
2
2
Softball diamond
0
0
0
0
1
1
1
1
1
1
Soccer field
0
0
0
0
0
0
1
1
1
1
Source: Various City departments
Note: No capital asset indicators are available for the general government
82
COMPLIANCE SECTION
19
lvk�*Ki
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
Board of Aldermen
Town of Westlake, Texas
3 Village Circle, Suite 202
Westlake, Texas 76262
Members of the Board:
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, 2007, which collectively comprise the
Town's basic financial statements and have issued our report thereon dated February 28, 2008. 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.
83
401 WEST HIGHWAY 6 ■ P. O. BOX 20725 ■ WACO, TX 76702-0725 ■ (254) 772-4901 ■ FAX: (254) 772-4920 ■ www.pbhcpa.com
AFFILIATE OFFICES: BROWNSVILLE, TX (956) 544-7778 ■ HILLSBORO, TX (254) 582-2583
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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 Board of
Aldermen, 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.
fJ -a J &Vwv, + WJ � �, P
February 28, 2008
84