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02-24-14 TC Agenda Packet
The Regular Meeting of the Town of Westlake Town Council will begin immediately following the conclusion of the Town Council Workshop but not prior to the posted start time. Mission Statement On behalf of the citizens, the mission of the Town of Westlake is to be a one-of-a-kind community that blends our rural atmosphere with our vibrant culture and metropolitan location. Westlake, Texas – A Premier Knowledge Based Community Page 1 of 5 TOWN OF WESTLAKE, TEXAS Vision Points Sense of Place; Leadership; Caring Community; Exemplary Governance; and Service Excellence TOWN COUNCIL MEETING AGENDA February 24, 2014 WESTLAKE TOWN HALL 3 VILLAGE CIRCLE, 2ND FLOOR WESTLAKE, TX 76262 COUNCIL CHAMBERS or MUNICIPAL CONFERENCE ROOM Workshop Session: 5:00 p.m. Regular Session: 6:30 p.m. Page 2 of 5 Work Session 1. CALL TO ORDER 2. PLEDGE OF ALLEGIANCE 3. REVIEW OF CONSENT AGENDA ITEMS FOR THE FEBRUARY 24, 2014, TOWN COUNCIL REGULAR MEETING AGENDA. (10 min) 4. REPORTS are prepared for informational purposes and will be accepted as presented. (there will no presentations associated with the report items) There will be no separate discussion unless a Council Member requests that report be removed and considered separately. a. Keller Police Department’s 2013 State Required Racial Profiling Report. 5. DISCUSSION ITEMS a. Discussion and presentation of the annual Comprehensive Annual Financial Report (CAFR) presented by Pattillo, Brown & Hill, L.L.P., Certified Public Accountants, for the fiscal year ended September 30, 2013. (15 min) b. Presentation and discussion regarding SH 114/170 interchange construction and safety issues. (20 min) c. Standing Item: Update and discussion regarding Westlake Academy Phase I expansion project and enrollment projections. (15 min) d. Discussion of a proposal from the City of Keller regarding Library Service. (15 min) e. Discussion of the Process for Establishing a Public Improvement District (PID) for the Entrada Development, the Petition Submitted to Establish a PID for Entrada, and a Draft Service Assessment Plan for Same. (30 min) 6. EXECUTIVE SESSION The Council will conduct a closed session pursuant to Texas Government Code, annotated, Chapter 551, Subchapter D for the following: a. Section 551.087. Deliberation Regarding Economic Development Negotiations (1) to discuss or deliberate regarding commercial or financial information that the governmental body has received from a business prospect that the governmental body seeks to have locate, stay, or expand in or near the territory of the governmental body and with which the governmental body is conducting economic development negotiations; or (2) to deliberate the offer of a financial or other incentive to a business prospect described by Subdivision (1). Maguire Partners-Solana Land, L.P., related to Centurion’s development known as Entrada b. Section 551.071 (2) Consultation with Attorney on a matter in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with the Chapter including but are not limited to the following: Town of Westlake Certificate of Convenience & Necessity (CCN) for water and sewer service. Page 3 of 5 c. Section 551.071(2) Consultation with Attorney - to seek advice of counsel on legal matters involving pending or contemplated litigation, settlement offers, or other legal matters not related directly to litigation or settlement. Pending or contemplated litigation and settlement offers include but are not limited to the following: Trophy Club Municipal District Number 1 7. RECONVENE MEETING 8. TAKE ANY ACTION, IF NEEDED, FROM EXECUTIVE SESSION ITEMS. 9. COUNCIL RECAP / STAFF DIRECTION 10. ADJOURNMENT Regular Session 1. CALL TO ORDER 2. CITIZEN PRESENTATIONS AND RECOGNITIONS: This is an opportunity for citizens to address the Council on any matter whether or not it is posted on the agenda. The Council cannot by law take action nor have any discussion or deliberations on any presentation made to the Council at this time concerning an item not listed on the agenda. The Council will receive the information, ask staff to review the matter, or an item may be noticed on a future agenda for deliberation or action. Present Employee service awards. 3. CONSENT AGENDA: All items listed below are considered routine by the Town Council and will be enacted with one motion. There will be no separate discussion of items unless a Council Member or citizen so requests, in which event the item will be removed from the general order of business and considered in its normal sequence. a. Consider approval of the minutes from the January 27, 2014, meeting. b. Consider approval of Resolution 14-05, Accepting the annual Comprehensive Annual Financial Report (CAFR) for the fiscal year ended September 30, 2013. c. Consider approval of Resolution 1 4-06, Approving an Economic Development agreement regarding transportation with the Marriott Solana. 4. PUBLIC HEARING AND CONSIDERATION OF RESOLUTION 14-07, MAKING FINDINGS THAT THE PROPOSED SOLANA PUBLIC IMPROVEMENT DISTRICT AND THE PROPOSED PUBLIC IMPROVEMENTS WILL PROMOTE THE INTERESTS OF THE TOWN AND CONFER A SPECIAL BENEFIT ON A DEFINABLE PART OF THE TOWN; PROVIDING THAT THE DISTRICT AND THE PROPOSED PUBLIC IMPROVEMENTS AND ADVISABLE; PROVIDING FINDINGS WITH RESPECT TO Page 4 of 5 THE NATURE AND ESTIMATED COST OF THE PROPOSED PUBLIC IMPROVEMENTS, THE BOUNDARIES OF THE DISTRICT, THE METHOD OF ASSESSMENT, AND APPORTIONMENT OF COSTS BETWEEN THE DISTRICT AND THE TOWN; AUTHORIZING THE CREATION OF THE DISTRICT; DIRECTING THE TOWN SECRETARY TO PUBLISH NOTICE OF THE CREATION OF THE SOLANA PUBLIC IMPROVEMENT DISTRICT. 5. EXECUTIVE SESSION The Council will conduct a closed session pursuant to Texas Government Code, annotated, Chapter 551, Subchapter D for the following: a. Section 551.087. Deliberation Regarding Economic Development Negotiations (1) to discuss or deliberate regarding commercial or financial information that the governmental body has received from a business prospect that the governmental body seeks to have locate, stay, or expand in or near the territory of the governmental body and with which the governmental body is conducting economic development negotiations; or (2) to deliberate the offer of a financial or other incentive to a business prospect described by Subdivision (1). Maguire Partners- Solana Land, L.P., related to Centurion’s development known as Entrada b. Section 551.071 (2) Consultation with Attorney on a matter in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with the Chapter including but are not limited to the following: Town of Westlake Certificate of Convenience & Necessity (CCN) for water and sewer service. c. Section 551.071(2) Consultation with Attorney - to seek advice of counsel on legal matters involving pending or contemplated litigation, settlement offers, or other legal matters not related directly to litigation or settlement. Pending or contemplated litigation and settlement offers include but are not limited to the following: Trophy Club Municipal District Number 1 6. RECONVENE MEETING 7. TAKE ANY ACTION, IF NEEDED, FROM EXECUTIVE SESSION ITEMS. 8. FUTURE AGENDA ITEMS: Any Council member may request at a workshop and / or Council meeting, under “Future Agenda Item Requests”, an agenda item for a future Council meeting. The Council Member making the request will contact the Town Manager with the requested item and the Town Manager will list it on the agenda. At the meeting, the requesting Council Member will explain the item, the need for Council discussion of the item, the item’s relationship to the Council’s strategic priorities, and the amount of estimated staff time necessary to prepare for Council discussion. If the requesting Council Member receives a second, the Town Manager will place the item on the Council agenda calendar allowing for adequate time for staff preparation on the agenda item. 9. COUNCIL CALENDAR Page 5 of 5 10. ADJOURNMENT ANY ITEM ON THIS POSTED AGENDA COULD BE DISCUSSED IN EXECUTIVE SESSION AS LONG AS IT IS WITHIN ONE OF THE PERMITTED CATEGORIES UNDER SECTIONS 551.071 THROUGH 551.076 AND SECTION 551.087 OF THE TEXAS GOVERNMENT CODE. CERTIFICATION I certify that the above notice was posted at the Town Hall of the Town of Westlake, 3 Village Circle, February 19, 2014, by 5:00 p.m. under the Open Meetings Act, Chapter 551 of the Texas Government Code. _____________________________________ Kelly Edwards, TRMC, Town Secretary If you plan to attend this public meeting and have a disability that requires special needs, please advise the Town Secretary 48 hours in advance at 817-490-5710 and reasonable accommodations will be made to assist you. Town of Westlake Item # 2 – Pledge of Allegiance Texas Pledge: "Honor the Texas flag; I pledge allegiance to thee, Texas, one state under God, one and indivisible." CONSENT AGENDA: All items listed below are considered routine by the Town Council and will be enacted with one motion. There will be no separate discussion of items unless a Council Member or citizen so requests, in which event the item will be removed from the general order of business and considered in its normal sequence. a. Consider approval of the minutes from the January 27, 2014, meeting. b. Consider approval of Resolution 14-05, Accepting the annual Comprehensive Annual Financial Report (CAFR) for the fiscal year ended September 30, 2013. c. Consider approval of Resolution 14-06, Approving an Economic Development agreement regarding transportation with the Marriott Solana. Town of Westlake Item # 3 – Review of Consent Agenda Items REPORTS Reports are prepared for informational purposes and will be accepted as presented. (there will no presentations associated with the report items) There will be no separate discussion unless a Council Member requests that report be removed and considered separately. a. Keller Police Department’s 2013 State Required Racial Profiling Report. Town of Westlake Item # 4– Reports Page 1 of 2 estlake Town Council TYPE OF ACTION Workshop - Report Westlake Town Council Meeting Monday, February 24, 2014 TOPIC: Racial Profiling report from the Keller Police Department relative to police services for the Town of Westlake STAFF CONTACT: Amanda DeGan, Assistant to the Town Manager DECISION POINTS Start Date Completion Date Timeframe: February 24, 2014 N/A Funding: Amount – N/A Status - N/A Source - N/A Decision Alignment VVM Perspective Desired Outcome Service Excellence Customer Focus CF.Promote Community Health, Safety & Welfare Strategic Issue Outcome Strategy Staff Action N/A N/A N/A Strategy Map or VVM Connection Strategic Issue Connection Page 2 of 2 EXECUTIVE SUMMARY Each year, the police department provides the Town Council with an update and/or report regarding the enforcement activities and levels of service for the community. The requirement is also referenced in the Town’s Strategic Issues-focused Governance System (SIGS) as an important staff action item. The current report has been compiled by Chief Mark Hafner and contains the yearly information as well as a chart outlining the historical data for our contractual period with the agency. ORGANIZATIONAL HISTORY/RECOMMENDATION None ATTACHMENTS Annual Keller Police Department Service Report – Including Racial Profiling POLICE DEPARTMENT January 24, 2014 Mayor Laura Wheat and Town Council 3 Village Circle Suite #202 Westlake, TX. 76262 Dear Mayor Wheat and Westlake Town Council, Since we assumed the responsibility of police services in Westlake, the Keller Police Department in accordance with the Texas Racial Profiling Law has been collecting police contact data for the purpose of identifying and responding (if necessary) to concerns regarding racial profiling practices. Attached is a copy of the report filed with the State of Texas. The law also requires that we forward this report to the Town Council. Looking at the data for the past year, I was unable to detect any significant over representation of issuing citations, searching, or arresting of any particular race. During the past year we did not receive any complaints to our department alleging incidents of biased based policing actions by our officers. It is my goal to continue to be responsive to the community by implementing and monitoring the proper policies and safeguards to prevent racial profiling practices. As always, I am here for your questions and concerns. Mark R. Hafner Chief of Police cc:.Tom Brymer, Town Manager 330 RUFE SNOW DRIVE • P.O. BOX 770 1 KELLER, TEXAS 76244 • (817)743-4500 Fax (817)743-4590 Web: http://www.kellerpd.com Partial Exemption Racial Profiling Reporting (Tier 1) Department Name Agency Number Chief Administrator Name Reporting Name Contact Number E-mail Addess Keller Police Department (Town of Westlake) 439220 Chief Mark R. Hafner Chief Mark R. Hafner 817-743-4501 mhafner cz,kel Ierpd.com Certification to Report 2.132 (Tier 1) — Partial Exemption Policy Requirements (2.132(b) CCP): Each law enforcement agency in this state shall adopt a detailed written policy on racial profiling. The policy must: (1) clearly define acts constituting racial profiling; (2) strictly prohibit peace officers employed by the agency from engaging in racial profiling; (3) implement a process by which an individual may file a complaint with the agency if the individual believes that a peace officer employed by the agency has engaged in racial profiling with respect to the individual; (4) provide public education relating to the agency's complaint process; (5) require appropriate corrective action to be taken against a peace officer employed by the agency who, after an investigation, is shown to have engaged in racial profiling in violation of the agency's policy adopted under this article;; (6) require collection of information relating to motor vehicle stops in which a citation is issued and to arrests made as a result of those stops, including information relating to: (A) the race or ethnicity of the individual detained; (B) whether a search was conducted and, if so, whether the individual detained consented to the search; and (C) whether the peace officer knew the race or ethnicity of the individual detained before detaining that individual; and (7) require the chief administrator of the agency, regardless of whether the administrator is elected, employed, or appointed, to submit an annual report of the information collected under Subdivision (6) to: (A) the Commission on Law Enforcement Officer Standards and Education; and (B) the governing body of each county or municipality served by the agency, if the agency is an agency of a county, municipality, or other political subdivision of the state. These polices are in effect %I1�///l�L /-23-Jy ief Administrator Date Partial Exemption Racial Profiling Reporting —Tier 1 Page 1 of 4 Partial Exemption Racial Profiting Reporting (Tier 1) Video and Audio Equipment Exemption Partial Exemption Claimed by (2.135(a) CCP): all cars regularly used for motor vehicle stops are equipped with video camera and transmitter -activated equipment and each motor stop is recorded and the recording of the stop is retained for at least 90 days after the stop. OR ❑ In accordance with 2.135(a)(2) the agency has requested and not received funds to install the recording equipment I claim this „r � � Y it -/ exemption Chief Administrator Date Partial Exemption Racial Profiling Reporting — Tier 1 Page2of4 Partial Exemption Racial Profiling Reporting (Tier 1) (This is the TCLEOSE recommended form. The form is not mandatory. The information contained in this form, however, is mandatory. You may use your form, but all information must be provided.) If you claim a partial exemption you must submit a report that contains the following data or use this format to report the data. Instructions: Please fill out all boxes. If zero, use 0. 1. Total on lines 4, 11, 14, and 17 Must be equal 2. Total on line 20 Must equal line 16 Number of motor vehicle stops: 1. 5908 citation only Mark only 1 category per vehicle stop 2. arrest only 3. 3 both Race or Ethnicity: 5. 656 African 6. 119 Asian 7. 4509 Caucasian 8. 474 Hispanic 9. 54 Middle Eastern 10. 10 Native American 11. 29 Other Race or Ethnicity known prior to stop? 12. 3 Yes 13. 5908 No Search conducted? Was search consented? 15. 38 Yes 16. 5873 No 18. 7 Yes 19. 31 No 20. 38 Total Must equal #15 Partial Exemption Racial Profiling Reporting — Tier 1 Page 3 of 4 4. 591I Total 11. 5911 Total 14. 5911 Total 17. 5911 Total Partial Exemption Racial Profiling Reporting (Tier 1) Option to submit required data by utilizing agency report You must submit your report in PDF format Electronic Submission of data required by 2.132(b)(6) CCP (6) require collection of information relating to motor vehicle stops in which a citation is issued and to arrests made as a result of those stops, including information relating to: (A) the race or ethnicity of the individual detained; (8) whether a search was conducted and, if so, whether the individual detained consented to the search; and (C) whether the peace officer knew the race or ethnicity of the individual detained before detaining that individual; and This report meets the above requirements Chief Administrator —d3--) Date Send entire documents electronically to this website www.tcleose.state.tx.us Partial Exemption Racial Profiling Reporting — Tier 1 Page 4 of 4 KELLER, TEXAS POLICE DEPARTMENT Police Citation Data Collection by Race Calendar Year 2013 Town of Westlake, TX. e mail: mhafnera@keilerpd.com Prepared by Chief Mark R. Hafner 1/24/2014 Telephone # 817-743-4500 T Citations Issued Percentage of Searched Consent Percentage of Arrested 3 Percentage of total arrested 100.00% Race known Zip Code Percentage of total citations to Individuals total issued total searched before stop 76262 issued to Zip 76262 All races 5911 100.00% 38 7 100.00% 0 819 13.86% White 4569 77.30% 23 6 60.53% 1 33.33% 0 736 89.87% Black 6.56 11.10% 12 0 31.58% 1 33.33% 0 44 5.37% Indian 10 0A7% O 0 0.00% 0 0.00% 0 0 0.00% Asian 119 2.01% 0 0 0.00% 0 0.00% 0 8 0.98% Hispanic 474 8.02% 3 1 7.89% 1 33.33% 0 23 2.81% Middle E 54 0.91% 0 0 0.00% 0 0.00% 0 6 0.73% Other 29 0.49% 0 0 0.00% 0 0,00% 0 2 0.27% 2010 Census Information - Race by Percentage of Population 1 Hispanic Location Population White Black Indian Asian Other_ 0.00% Westlake 992 82.40% 51.80% 2.50% 0.50% 9.40% 4.80% 26.70% 1820% Tarrant 1,809,034 14.90% 0,70% 4.70% 1.20% 1.70% t60% I Denton 662,614 64.40% 8.40% 0.70% 6.60% DFW 6,539,950 50.40% 14.80% 0.70% 5.20% 2T30% - -o-- 1 2012 Data for Licensed Drivers by Race Location Licensed Drivers White Black Indian Asian Other Hispanic Zip 76262 27,273 90.80% 3.46%, 0.24% 3.46% 1.04% 1.04% e mail: mhafnera@keilerpd.com Prepared by Chief Mark R. Hafner 1/24/2014 Telephone # 817-743-4500 DISCUSSION ITEMS a. Discussion and presentation of the annual Comprehensive Annual Financial Report (CAFR) presented by Pattillo, Brown & Hill, L.L.P., Certified Public Accountants, for the fiscal year ended September 30, 2013. (15 min) b. Presentation and discussion regarding SH 114/170 interchange construction and safety issues. (20 min) c. Standing Item: Update and discussion regarding Westlake Academy Phase I expansion project and enrollment projections. (15 min) d. Discussion of a proposal from the City of Keller regarding Library Service. (15 min) e. Discussion of the Process for Establishing a Public Improvement District (PID) for the Entrada Development, the Petition Submitted to Establish a PID for Entrada, and a Draft Service Assessment Plan for Same. (30 min) Town of Westlake Item # 5 – Discussion Items Page 1 of 3 estlake Town Council TYPE OF ACTION Workshop - Discussion Item Westlake Town Council Meeting Monday, February 24, 2014 TOPIC: Comprehensive Annual Financial Report (CAFR) presented by Pattillo, Brown & Hill, L.L.P., Certified Public Accountants, for the fiscal year ended September 30, 2013. STAFF CONTACT: Debbie Piper, Finance Director DECISION POINTS Start Date Completion Date Timeframe: February 24, 2014 February 24, 2014 Funding: Amount - $27,000 Status- Funded Source- Allocated to General Fund, Utility Fund and Visitors Association Fund Decision Alignment VVM Perspective Desired Outcome Exemplary Governance Financial Stewardship FS.Maintain Excellence in Reporting and Financial Standards Strategic Issue Outcome Strategy Staff Action Fiscal Stewardship & Organizational Effectiveness 5. Budget according to established service level provisions within departments. SA 09B1: Financial Analysis Strategy Map or VVM Connection Strategic Issue Connection Page 2 of 3 EXECUTIVE SUMMARY The Town’s Fiscal and Budgetary Policies along with State law require that the Town be audited annually by outside independent accountants. The result of this independent audit is the receipt of an unqualified opinion or “clean” opinion again this year. This means the auditors have found that these financial statements present fairly, in all material respects, the financial position of the Town of West lake at September 30, 2013. We are also pleased that there were no “Management Letter” comments for the current year. As implemented in previous years, we have included the Texas Student Housing (TSH) audited information in our report. Because the Town Council may appoint and/or remove a director of the Texas Student Housing Board, it was determined that TSH should be considered a component unit of the Town. This information has been included in the financials and in the footnotes. It was also noted that the debt of TSH is not a liability of the Town. The inclusion of this information in the Town’s audit will not affect any future bond ratings nor have a negative impact on the Town’s overall debt ratio for the purpose of securing additional financing in the future. Along with the annual budget, the Comprehensive Annual Financial Report (CAFR) is one of the most important financial activities of the Town. This report represents and reflects upon the Town’s financial operations and condition to the Town’s residents, elected officials, management personnel, financial institutions, rating agencies, and all other parties interested in the financial affairs of the Town. Additionally, the Town began participating in the Government Finance Officer Association’s (GFOA) Certificate of Achievement for Excellence in Financial Reporting program for the fiscal year 2007. This award is highly regarded as the “Good Housekeeping Seal of Approval” for governmental financial reporting. Therefore, we are pleased to announce that the Town has recently received this award for our sixth submission. This award is presented based on the required contents of the CAFR document, and ensures that certain required financial disclosures are presented in the document. All gover nmental entities that participate in the program must include these disclosures in their CAFR. We believe the September 30, 2013 CAFR is in compliance with these disclosure requirements, and the Town will be awarded our 6th consecutive certificate. ORGANIZATIONAL HISTORY/RECOMMENDATION Acceptance of the annual CAFR ATTACHMENTS None (CAFR document is located in the consent portion of the agenda) Page 1 of 2 estlake Town Council TYPE OF ACTION Workshop - Discussion Item Westlake Town Council Meeting Monday, February 24, 2014 TOPIC: Presentation and discussion regarding SH 114/170 interchange construction and safety issues. STAFF CONTACT: Jarrod Greenwood, Director of Public Works DECISION POINTS Start Date Completion Date Timeframe: February 24, 2014 February 24, 2014 Funding: Amount - 0T Status- N/A Source- N/A Decision Alignment VVM Perspective Desired Outcome Exemplary Governance Customer Focus CF.Promote Community Health, Safety & Welfare Strategic Issue Outcome Strategy Staff Action Public Safety and Emergency Preparedness 6. Maximize the service provision level to our customers through the use of the shared services model, public/private partnerships, and implementation of innovative inter -governmental agreements. SA 01.4: FM 114/170 Interchange Strategy Map or VVM Connection Strategic Issue Connection Page 2 of 2 EXECUTIVE SUMMARY As you may have experienced during your travels in and around our community, TxDOT has opened all of the newly constructed main lanes on eastbound and westbound SH 114, as well as, the on/off ramps to and from SH 170. However, the contractor is still working on the bridge for Business 114. While all lanes are open, SH 114 continues to experience a large amount of congest ion during the morning and afternoon rush hours. Staff from Westlake, Roanoke, and Trophy Club met with TxDOT and the Denton County Commissioner, Andy Eads, on September 30, 2013, to discuss congestion and safety issues related to the newly constructed interchanges. As a group, we relayed our concerns and frustration with construction and traffic conditions, which included: • Vehicles attempting to enter and exit J. T. Ottinger Road at SH 170 and the negotiation of the newly constructed ramp from SH 114. • Entrance ramps on SH 114 are too short forcing vehicles onto the main lanes without room to merge. • The main lanes on SH 114 transition from three (3) lanes down to two (2) lanes then back to three (3) lanes leading to increased congestion. At the conclusion of this meeting, Commissioner Eads and the TxDOT representatives indicated that they would need to look into potential resolutions to these issues and respond accordingly. On February 11, 2014, the three (3) Mayors of the communities (Westlake, Roanoke, and Trophy Club), staff members, TxDOT, and the Denton County Commissioner met with State Representative Giovanni Capriglione, at the request of Westlake to again discuss the communities’ issues that were previously discussed and not resolved from the September meeting. The meeting concluded with TxDOT charged to look at options to provide a safer SH 170 and J. T. Ottinger crossing, safer and more intuitive on/off ramps, and an additional lane to eastbound SH 114. TxDOT indicated that some of the issues can be addressed by restriping the lanes, while other ‘fixes’ may take longer to construct . As we continue our discussions, it is important to remember that SH 170 is planned to be a “managed lane” roadway (toll road) with the North Texas Tollway Authority (NTTA) from SH 114 west to I-35. At this time, this project is not expected to be completed for at least anot her 15 to 20 years. The Town’s existing Thoroughfare and Comp Plan, in addition to the Comp Plan update with Mesa, must be incorporated into any resolution or proposed solution in order to mitigate any long term detrimental impact to mobility within our community. Staff will be including Mesa Planning in our discussions with TxDOT. ORGANIZATIONAL HISTORY/RECOMMENDATION Included above. ATTACHMENTS SH 114/170 interchange map Existing Comp Plan – Thoroughfare Plan SH 1 1 4 / 1 7 0 C o n g e s t i o n a n d S a f e t y I s s u e s Pr o p o s ed a d d i t i o n a l l a n e t o b e a d d e d t o e a s t b o u n d S H 1 1 4 Pr o p o s e d r e - a l i g n m e n t o f O t t i n g e r R o a d a t S H 1 7 0 Pr o p o s e d r e - r o u t i n g o f s o u t h b o u n d O t t i n g e r R o a d T r a f f i c Ar e a s o f s a f e t y c o n c e r n Council Workshop 2/24/14 Standing agenda item during the construction project c. Update and discussion regarding Westlake Academy Phase I expansion project and enrollment projections. (15 min) Town of Westlake Item # 5c – No Supporting documentation Page 1 of 2 estlake Town Council TYPE OF ACTION Workshop - Discussion Item Westlake Town Council Meeting Monday, February 24, 2014 TOPIC: Discussion of an intergovernmental partnership for library services STAFF CONTACT: Tom Brymer, Town Manager Amanda DeGan, Assistant Town Manager DECISION POINTS Start Date Completion Date Timeframe: N/A N/A Funding: Amount - 0 Status- Funded Source - N/A Decision Alignment VVM Perspective Desired Outcome Caring Community Customer Focus CF.Provide Outstanding Service and Program Delivery Strategic Issue Outcome Strategy Staff Action N/A N/A N/A Strategy Map or VVM Connection Strategic Issue Connection Page 2 of 2 EXECUTIVE SUMMARY Staff has recently fielded an inquiry at a neighborhood meeting regarding the provision of library services for our residents. As a result, we have discussed the possibility of entering into a partnership with the City of Keller to extend library privileges to our residents. The proposed agreement would be calculated based on our population size and would also provide access to the students of Westlake Academy. The initial discussions involved a period from October 1, 2014 thru September 30, 2017 and an annual fee of $12.50 per Westlake household for a total of approximately $4,650.00. The library offers a variety of options with access to computer terminals with WiFi, traditional hard copy books, electronic access to magazines, music, movies, summer reading programs, etc. The facility recently underwent an expansion project with the Keller voters authorizing a $4 million library bond expansion package in FY2007. This allowed for an additional 12,500 sq. feet of space, (for a total of 22,000 sq. ft) with indoor and outdoor reading areas. The facility also offers expanded access to the MetrOPAC library consortium – where the libraries of Fort Worth, Benbrook, Burleson, Haltom City, Richland Hills, and Watauga accepting the Keller library card for access to their resources. Staff requests direction on the merits of this plan of action and should the Council be interested in offering this service, we will work with the Keller staff members to create an inter-local agreement which would be reviewed and require the approval of both governing entities. ORGANIZATIONAL HISTORY/RECOMMENDATION Staff recommends the pursuit of this type of a proposal as a value added service to our residents and stakeholders. ATTACHMENTS Proposal, City of Keller Proposal Points – Interlocal Agreement for Library Services • The Keller Public Library agrees to assume the function of a free public library for the City of Westlake and to furnish library services to all citizens of Westlake and Westlake Academy Students without direct charge to them. • Services include a collection of books, music, books on CD, DVDs, large print book and magazines available for checkout. Additional services include Area Library borrowing privileges, eBooks and downloadable audiobooks, downloadable music, online language learning system, nationwide interlibrary loan, online magazines, programs for adults, teens and children including story time. Our annual library events are Tales at Twilight, Summer Reading Club for all ages, and Harvest Stew. o Radio Frequency Identification is being installed during the fiscal year of 2014. o The library has been awarded the Achievement of Excellence Award by the Texas Municipal Library Directors Association for four years and was one of 28 selected out of 560 libraries. • In consideration for such services, the City of Westlake agrees to pay the City of Keller $4,325 annually o Based on U.S. Census data of 346 households predicted for 2008-2012 o 2010 Census shows 302 households in Westlake o Library card for a family at the same address for non-residents at the Keller Public Library is $25. o Proposal is $12.50 per household • The term of this agreement shall be for the period of October 1, 2014 to September 30, 2017. This agreement may be renewed and extended. Page 1 of 2 estlake Town Council TYPE OF ACTION Workshop - Discussion Item Westlake Town Council Meeting Monday, February 24, 2014 TOPIC: Discussion of the Process for Establishing a Public Improvement District (PID) for the Entrada Development , the Petition Submitted to Establish a PID for Entrada, and a Draft Service Assessment Plan for Same. STAFF CONTACTS: Tom Brymer, Town Manager DECISION POINTS Start Date Completion Date Timeframe: October 28, 2013 TBD Funding: Amount - None. Status- N/A Source- N/A Decision Alignment VVM Perspective Desired Outcome Sense of Place Financial Stewardship Enhance and Maintain a Sense of Community Strategic Issue Outcome Strategy Staff Action Comprehensive Planning and Management of Natural Resources N/A SA 09D1: Ordinances Strategy Map or VVM Connection Strategic Issue Connection EXECUTIVE SUMMARY The owner of the development known as Entrada, located at the northeast corner of FM 1938 Page 2 of 2 (Davis Blvd) and Solana Boulevard, has submitted a petition to the Town of Westlake to establish a Public Improvement District (PID) for construction of public infrastructure in this development. Next steps would include discussion of a proposed Service and Assessment Plan (SAP) for this PID as well as a timeline for establishing the PID. ORGANIZATIONAL HISTORY/RECOMMENDATION Previously this property was zoned for office and retail uses. In April of last year, after much public input and meetings, the Town Council, with a unanimous recommendation from the Planning & Zoning Commission, approved a request by the owner to amend the zoning in this PD1-2 zoning district . Also in April of last year, prior to consideration of this zoning change request, the land use plan component of the Town’s Comprehensive Plan was amended to provide for the uses requested in the zoning change request for this property. The amended zoning adds certain residential and entertainment uses in order to allow development of a mixed use Planned Development on this tract. The zoning ordinance, as amended, is intended to achieve a design that emulates a European style village with a Spanish architectural theme. The development’s name is Entrada. During the re-zoning approval process it was pointed out by Staff, as well as discussed by Council, that if the zoning request was approved, the developer intended to submit to the Town a petition to create a Public Improvement District (PID) to fund the construction of the public infrastructure for this development. Further, in the Economic Development with the developer of Entrada, the Town agreed to consider creating a PID for this purpose. This Economic Development Agreement also was approved by the Town Council in April of this year. This agenda item is intended to continue discussion begun at the Council’s October 28, 2013 Workshop, the Council’s November 11, 2013 Workshop, and the Council’s December 9, 2013 Workshop regarding this proposed PID. The Staff has been reviewing various iterations of a draft Service and Assessment Plan (SAP ) since the petition to establish this PID was submitted by the owner of this tract. If the Council wishes to move forward on establishing this PID, a specific timeline for establishing the PID will need to be set for this as well. With the Development Plan and Preliminary Plat for Entrada now approved by the Town Council, the developer is ready to move forward on establishment of a PID for this property. After t he December 9, 2013 Council Workshop, it was determined that , due to IRS regulations related to issuance of bank qualified debt, modifications to the approach previously discussed with Council for issuance of PID bonds would need to be modified. The developer’s team discuss ed this at the Town Council’s January 27th workshop. The developer requested that the Council approve the resolution that begins the public notification process for hearings on these PID bonds at the Council’s January 27, 2014 Regular Meeting. The Town Council did approve this resolution at their January 27, 2014 setting the public hearing to consider creating a PID for the Council’s February 24, 2014 Regular Meeting. Approval of the bond issuance comes at a later point in the process and the process can be halted any time before then by the Council. ATTACHMENTS 1. Proposed Calendar for PID Establishment in Westlake on the Entrada Property. 2. PID Petition 10-18-13 for Entrada property. January 2014 1 February 2014 2 March 2014 3 S M T W Th F Sa S M T W Th F Sa S M T W Th F Sa 1 2 3 4 1 1 5 6 7 8 9 10 11 2 3 4 5 6 7 8 2 3 4 5 6 7 8 12 13 14 15 16 17 18 9 10 11 12 13 14 15 9 10 11 12 13 14 15 03/10-03/14 Spring Break 19 20 21 22 23 24 25 16 17 18 19 20 21 22 16 17 18 19 20 21 22 26 27 28 29 30 31 23 24 25 26 27 28 23 24 25 26 27 28 29 30 31 April 2014 4 May 2014 5 June 2014 6 S M T W Th F Sa S M T W Th F Sa S M T W Th F Sa 05/10 Election Day 1 2 3 4 5 1 2 3 1 2 3 4 5 6 7 05/15 Canvass if necessary 6 7 8 9 10 11 12 4 5 6 7 8 9 10 8 9 10 11 12 13 14 05/12 BOT Budget Wkshp 13 14 15 16 17 18 19 11 12 13 14 15 16 17 15 16 17 18 19 20 21 05/21 TC/BOT orientation (if necessary) 20 21 22 23 24 25 26 18 19 20 21 22 23 24 22 23 24 25 26 27 28 05/30 TC Planning Retreat 27 28 29 30 25 26 27 28 29 30 31 29 30 06/05 Last Day of School No TC meeting until Aug 25th School Board School & Town Holiday Budget / Meeting Retreats Town Council School Holiday Town Holiday New Council/BOT n Election Day / Orientation Special Meeting to Planning & Zoning Canvass Returns Meetings Date:Day Resp.Action:Responsibility Key: T=Town; D=Developer; I=Issuer; UW=Underwriter 27-Jan Mon T Council adopted resolution requiring newspaper notice and mail notice for PID creation Hearing Date 5-Feb Wed T Mail out property notices for PID creation public hearing/send newspaper notice for same 7-Feb Fri D Distribution to Working Group revised Preliminary SAP D Distribution to Working Group revised finance program schedule D Distribution to Working Group revised resolution creating PID 12-Feb Wed T Comments due on February 7th drafts and returned to Developer 14-Feb Fri D Submit to Town edited Preliminary SAP for council books D Submit to Town edited finance program schedule for council books D Submit to Town resolution creating PID for council books 19-Feb Wed T Council Board books sent out with the edited draft documents: Updated Preliminary SAP Financing program schedule Resolution Creating PID 24-Feb Mon T Open Public Hearing for PID creation T Consider Resolution creating PID D Present finance program schedule to Town Council 27-Feb Thr D Distribute to Working Group Draft Appraisal 7-Mar Fri D Distribution to Working Group updated draft Preliminary SAP D Distribution to Working Group Resolution determining cost of authorized improvements, setting levy and assessment hearing date I Distribution to Working Group 1st draft of Bond Documents (Issuer's Bond Counsel) Town of Westlake Solana Public Improvement District DEVELOPER Submittal and Meeting Schedule 10-Mar Mon D Distribution to Working Group updated Preliminary SAP based on DRAFT Appraisal 12-Mar Wed T Comments due on March 7th submittals AND Preliminary SAP 13-Mar Thr D Distribution to Working Group Final Appraisal 14-Mar Fri D Submit to Town (and Distributed to Working Group) final Preliminary SAP for council books D Submit to Town Resolution determine costs…levy…assessment hearing date I Submit to Town 1st draft of bond documents (Issuer's Bond Counsel) 19-Mar Wed T Council Board books sent out 24-Mar Mon D Presentation of Preliminary SAP based on draft appraisal I Distribution of 1st draft of Bond documents (Issuer's Bond Counsel) 25-Mar Tue D Distribution to Working Group update Preliminary SAP based on Final Appraisal 31-Mar Mon UW Distribution of 1st draft of Preliminary Official Statement (POS) (Underwriter's Counsel) 4-Apr Fri D Distribution to Working Group proposed finance cash-flows I Distribution of 2nd Bond Documents (Issuer's bond counsel) D Distribution to Working Group the PID Financing Agreement, including final SAP UW Distribution to Working Group the latest POS for the April 28th meeting I Distribution to Working Group the latest "Draft" bond documents D Distribution to Working Group Resolution authorizing distribution of POS 11-Apr Fri T Comments due on April 4 submittals 17-Apr Thr D Submit to Town final proposed finance cash-flows D Submit to Town of the PID financing agreement, including final SAP UW Submit to Town latest POS for council books I Submit to Town latest "Draft" bond documents for council books D Submit to Town final resolution authorizing distribution of POS 23-Apr Wed T Council Board books sent out 28-Apr Mon T Consider a Resolution authorizing the distribution of the POS D Presentation of the PID financing agreement, including Final SAP T Open a public hearing on Levy and Assessment; continue until May 22 29-Apr Tue UW POS electronically distributed 2-May Fri D Distribution to Working Group Ordinance for Levy and Assessments D Distribution to Working Group Resolution/Ordinance to approve PID pricing and final bond docs D Distribution to Working Group Resolution/Ordinance to approve PID Financing Agreement I Distribution to Working Group final Bond docs 9-May Fri T Comments due on May 2nd submittals returned to developer 14-May Wed I Submit to Town Resolution/Ordinance to approve PID pricing and final bond docs D Submit to Town Resolution/Ordinance to approve PID financing agreement I Submit to Town final bond documents for board books 16-May Fri T Council Books for May 22nd special meeting sent out Resolution/Ordinance to approve PID pricing and final bond documents Resolution/Ordinance to approve PID financing agreement Copies of final bond documents 19-May Mon T Posting of special board meeting on May 22nd to close public hearing and approve pricing and final bond docs 20-May Tue Pre-pricing the bonds 21-May Wed Pricing the bonds 22-May Thr T Special Council Meeting Close public hearing from April 28th Consider Ord/Res approving PID bond pricing and final bond docs Consider Ordinance setting levy EXECUTIVE SESSION a. Section 551.087. Deliberation Regarding Economic Development Negotiations (1) to discuss or deliberate regarding commercial or financial information that the governmental body has received from a business prospect that the governmental body seeks to have locate, stay, or expand in or near the territory of the governmental body and with which the governmental body is conducting economic development negotiations; or (2) to deliberate the offer of a financial or other incentive to a business prospect described by Subdivision (1). Maguire Partners-Solana Land, L.P., related to Centurion’s development known as Entrada b. Section 551.071 (2) Consultation with Attorney on a matter in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with the Chapter including but are not limited to the following: Town of Westlake Certificate of Convenience & Necessity (CCN) for water and sewer service. c. Section 551.071(2) Consultation with Attorney - to seek advice of counsel on legal matters involving pending or contemplated litigation, settlement offers, or other legal matters not related directly to litigation or settlement. Pending or contemplated litigation and settlement offers include but are not limited to the following: Trophy Club Municipal District Number 1 Town of Westlake Item # 6 – Executive Session Town of Westlake Item # 7 – Reconvene Meeting The Council will conduct a closed session pursuant to Texas Government Code, annotated, Chapter 551, Subchapter D for the following: a. Section 551.087. Deliberation Regarding Economic Development Negotiations (1) to discuss or deliberate regarding commercial or financial information that the governmental body has received from a business prospect that the governmental body seeks to have locate, stay, or expand in or near the territory of the governmental body and with which the governmental body is conducting economic development negotiations; or (2) to deliberate the offer of a financial or other incentive to a business prospect described by Subdivision (1). Maguire Partners-Solana Land, L.P., related to Centurion’s development known as Entrada b. Section 551.071 (2) Consultation with Attorney on a matter in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with the Chapter including but are not limited to the following: Town of Westlake Certificate of Convenience & Necessity (CCN) for water and sewer service. c. Section 551.071(2) Consultation with Attorney - to seek advice of counsel on legal matters involving pending or contemplated litigation, settlement offers, or other legal matters not related directly to litigation or settlement. Pending or contemplated litigation and settlement offers include but are not limited to the following: Trophy Club Municipal District Number 1 Town of Westlake Item # 8 – Take any Necessary Action, if necessary COUNCIL RECAP / STAFF DIRECTION Town of Westlake Item #9 Council Recap / Staff Direction Town of Westlake Item # 10 – Workshop Adjournment Back up material has not been provided for this item. CITIZEN PRESENTATIONS AND RECOGNITIONS: This is an opportunity for citizens to address the Council on any matter whether or not it is posted on the agenda. The Council cannot by law take action nor have any discussion or deliberations on any presentation made to the Council at this time concerning an item not listed on the agenda. The Council will receive the information, ask staff to review the matter, or an item may be noticed on a future agenda for deliberation or action. Present Employee service awards. Town of Westlake Item # 2 – Citizen’s Presentations and recognitions a. Consider approval of the minutes from the January 27, 2014, meeting. b. Consider approval of Resolution 14-05, Accepting the annual Comprehensive Annual Financial Report (CAFR) for the fiscal year ended September 30, 2013. c. Consider approval of Resolution 14-06, Approving an Economic Development agreement regarding transportation with the Marriott Solana. Town of Westlake Item # 3 – Discussion of Consent items Town Council Minutes 01/27/14 Page 1 of 6 MINUTES OF THE TOWN OF WESTLAKE, TEXAS TOWN COUNCIL MEETING January 27, 2014 PRESENT: Mayor Laura Wheat and Council Members, Michael Barrett, Carol Langdon and Rick Rennhack. Clif Cox arrived at 5:25 p.m. ABSENT: Wayne Stoltenberg OTHERS PRESENT: Town Manager Tom Brymer, Town Secretary Kelly Edwards, Assistant Town Manager Amanda DeGan, Town Attorney Stan Lowry, Finance Director Debbie Piper, Planning and Development Director Eddie Edwards , Facilities and Recreation Director Troy Meyer, Fire Chief Richard Whitten, Director of Public Works Jarrod Greenwood, Communications & Community Affairs Director Ginger Awtry, Public Works Director Jarrod Greenwood and Susan McFarland, Communications Specialist. Work Session 1. CALL TO ORDER Mayor Wheat called the work session to order at 5:17 p.m. 2. PLEDGE OF ALLEGIANCE Mayor Wheat led the pledge of allegiance to the United States and Texas flags. Town Council Minutes 01/27/14 Page 2 of 6 3. REVIEW OF CONSENT AGENDA ITEMS FOR THE JANUARY 27, 2014, TOWN COUNCIL REGULAR MEETING AGENDA. Town Secretary Edwards explained the revision to item b inserting language allowing Tarrant County’s Election Administrator or his successor named as the Early Voting Clerk per Tarrant County’s Attorney. Town Manager Brymer provided an overview of item f regarding the renewal of the Franchise Agreement with Atmos. Discussion ensued regarding the negotiation of the fees and length of the agreement. 4. REPORTS a. Quarterly Financial Dashboard and Analysis as well as Capital Projects for the Quarter ended December 31, 2013. Mayor Wheat asked for additional clarification regarding the sales tax income. 5. EXECUTIVE SESSION The Council convened into executive session at 5:25 p.m. The Council will conduct a closed session pursuant to Texas Government Code, annotated, Chapter 551, Subchapter D for the following: a. Section 551.087. Deliberation Regarding Economic Development Negotiations (1) to discuss or deliberate regarding commercial or financial information that the governmental body has received from a business prospect that the governmental body seeks to have locate, stay, or expand in or near the territory of the governmental body and with which the governmental body is conducting economic development negotiations; or (2) to deliberate the offer of a financial or other incentive to a business prospect described by Subdivision (1). Maguire Partners-Solana Land, L.P., related to Centurion’s development known as Entrada b. Section 551.071 (2) Consultation with Attorney on a matter in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with the Chapter including but are not limited to the following: Town of Westlake Certificate of Convenience & Necessity (CCN) for water and sewer service. c. Section 551.071(2) Consultation with Attorney - to seek advice of counsel on legal matters involving pending or contemplated litigation, settlement offers, or other legal matters not related directly to litigation or settlement. Pending or contemplated litigation and settlement offers include but are not limited to the following: Trophy Club Municipal District Number 1 Town Council Minutes 01/27/14 Page 3 of 6 6. RECONVENE MEETING Mayor Wheat reconvened the meeting at 6:47 p.m. 7. TAKE ANY ACTION, IF NEEDED, FROM EXECUTIVE SESSION ITEMS. No Action taken. Mayor Wheat recessed the work session at 6:47 p.m. to call the regular meeting to order . Mayor Wheat reconvened the work session at 6:52 p.m., to continue the work session. 8. DISCUSSION ITEMS a. Standing Item: Update and discussion regarding Westlake Academy Phase I expansion project and enrollment projections. Director Meyer provided a presentation and update regarding Phase I of construction. Discussion ensued regarding the construction deadlines, possible construction delays and alternatives, and budget savings. b. Discussion regarding an amendment to the Westlake Academy Campus Development Plan. Director Meyer provided a presentation and overview of the proposed amendment. Discussion ensued regarding the traffic flow and adding additional trees. c. Discussion of the Process for Establishing a Public Improvement District (PID) for the Entrada Development, the Petition Submitted to Establish a PID for Entrada, and a Draft Service Assessment Plan for Same. Town Manager Brymer provided an overview of the Public Improvement District item. Mr. Robert Miklos, Milby, P.L.L.C., and Mr. Kirk Wilson, T. Wilson & Associates, provided an overview of the process of establishing the Public Improvement District to move forward with creating the PID. Town Council Minutes 01/27/14 Page 4 of 6 Discussion ensued regarding the number of months the public hearing could be postponed and continued, notice publication requirements, and the alignment of financing for the PID. 9. COUNCIL RECAP / STAFF DIRECTION None 10. ADJOURNMENT Mayor Wheat adjourned the work session at 7:22 p.m. Regular Session 1. CALL TO ORDER Mayor called the regular session to order at 6:47 p.m. 2. CITIZEN PRESENTATIONS AND RECOGNITIONS Mr. Mike Land, Deputy City Manager City of Coppell, presented a Strategic Issues Focused Governance System award to Mayor Wheat, Town Manager Brymer and Assistant Town Manager DeGan. Mayor Wheat recessed the regular session at 6:52 p.m. to continue the work session. Mayor Wheat reconvened the regular session at 7:22 p.m. 3. CONSENT AGENDA a. Consider approval of the minutes from the December 16, 2013, meeting. b. Consider approval of Ordinance 722, Call the General Election for May 10, 2014, to elect a Mayor and two (2) Council Members for two (2) year terms. c. Consider approval of Resolution 14-01, Appointing two (2) members to the Westlake Historical Preservation Society. d. Consider approval of Resolution 14-02, Amending the Westlake Academy Campus Development Plan. e. Consider approval of Resolution 14-03, Approving a Co-op Purchasing Agreement with TXMAS. f. Consider approval of Ordinance 723, Approving a Franchise Agreement with Atmos Energy Corporation. Town Council Minutes 01/27/14 Page 5 of 6 MOTION: Council Member Cox made a motion to approve consent agenda with the revisions to Ordinance 722 adding the language to include Mr. Raborn or successor and Resolution 14-01 correcting the members name to read Robert A. Meyer. Council Member Langdon seconded the motion. The motion carried by a vote of 5-0. 4. CONSIDER APPROVAL OF RESOLUTION 14-04, REQUIRING THE REQUIRING NEWSPAPER NOTICE AND MAIL NOTICE FOR THE PUBLIC IMPROVEMENT DISTRICT (PID) CREATION HEARING, AND SETTING THE PID CREATION HEARING. MOTION: Council Member Cox made a motion to approve Resolution 14-04. Council Member Barrett seconded the motion. The motion carried by a vote of 4-0. 5. EXECUTIVE SESSION The Council did not convene into executive session. The Council will conduct a closed session pursuant to Texas Government Code, annotated, Chapter 551, Subchapter D for the following: a. Section 551.087. Deliberation Regarding Economic Development Negotiations (1) to discuss or deliberate regarding commercial or financial information that the governmental body has received from a business prospect that the governmental body seeks to have locate, stay, or expand in or near the territory of the governmental body and with which the governmental body is conducting economic development negotiations; or (2) to deliberate the offer of a financial or other incentive to a business prospect described by Subdivision (1). Maguire Partners - Solana Land, L.P., related to Centurion’s development known as Entrada b. Section 551.071 (2) Consultation with Attorney on a matter in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with the Chapter including but are not limited to the following: Town of Westlake Certificate of Convenience & Necessity (CCN) for water and sewer service. c. Section 551.071(2) Consultation with Attorney - to seek advice of counsel on legal matters involving pending or contemplated litigation, settlement offers, or other legal matters not related directly to litigation or settlement. Pending or contemplated litigation and settlement offers include but are not limited to the following: Trophy Club Municipal District Number 1 6. RECONVENE MEETING 7. TAKE ANY ACTION, IF NEEDED, FROM EXECUTIVE SESSION ITEMS. Town Council Minutes 01/27/14 Page 6 of 6 8. FUTURE AGENDA ITEMS None 9. COUNCIL CALENDAR Town Manager Brymer reviewed the upcoming items with the Council. 10. ADJOURNMENT There being no further business before the Council, Mayor Wheat asked for a motion to adjourn the meeting. MOTION: Council Member Rennhack made a motion to adjourn the meeting. Council Member Langdon seconded the motion. The motion carried by a vote of 4-0. Mayor Wheat adjourned the meeting at 7:29 p.m. APPROVED BY THE TOWN COUNCIL ON FEBRUARY 24 , 2014. ATTEST: _____________________________ Laura Wheat, Mayor _____________________________ Kelly Edwards, Town Secretary Page 1 of 2 estlake Town Council TYPE OF ACTION Regular Meeting - Consent Westlake Town Council Meeting Monday, February 24, 2014 TOPIC: Acceptance of the annual Comprehensive Annual Financial Report (CAFR) presented by Pattillo, Brown & Hill, L.L.P., Certified Public Accountants, for the fiscal year ended September 30, 2013. STAFF CONTACT: Debbie Piper, Finance Director DECISION POINTS Start Date Completion Date Timeframe: February 24, 2014 February 24, 2014 Funding: Amount - $27,000 Status- Funded Source- Allocated to General Fund, Utility Fund and Visitors Association Fund Decision Alignment VVM Perspective Desired Outcome Exemplary Governance Financial Stewardship FS.Maintain Excellence in Reporting and Financial Standards Strategic Issue Outcome Strategy Staff Action Fiscal Stewardship & Organizational Effectiveness 5. Budget according to established service level provisions within departments. SA 09B1: Financial Analysis Strategy Map or VVM Connection Strategic Issue Connection Page 2 of 2 EXECUTIVE SUMMARY The Town’s Fiscal and Budgetary Policies along with State law require that the Town be audited annually by outside independent accountants. The result of this independent audit is the receipt of an unqualified opinion or “clean” opinion again this year. This means the auditors have found that these financial statements present fairly, in all material respects, the financial position of the Town of West lake at September 30, 2013. We are also pleased that there were no “Management Letter” comments for the current year. As implemented in previous years, we have included the Texas Student Housing (TSH) audited information in our report. Because the Town Council may appoint and/or remove a director of the Texas Student Housing Board, it was determined that TSH should be considered a component unit of the Town. This information has been included in the financials and in the footnotes. It was also noted that the debt of TSH is not a liability of the Town. The inclusion of this information in the Town’s audit will not affect any future bond ratings nor have a negative impact on the Town’s overall debt ratio for the purpose of securing additional financing in the future. Along with the annual budget, the Comprehensive Annual Financial Report (CAFR) is one of the most important financial activities of the Town. This report represents and reflects upon the Town’s financial operations and condition to the Town’s residents, elected officials, management personnel, financial institutions, rating agencies, and all other parties interested in the financial affairs of the Town. Additionally, the Town began participating in the Government Finance Officer Association’s (GFOA) Certificate of Achievement for Excellence in Financial Reporting program for the fiscal year 2007. This award is highly regarded as the “Good Housekeeping Seal of Approval” for governmental financial reporting. Therefore, we are pleased to announce that the Town has recently received this award for our sixth submission. This award is presented based on the required contents of the CAFR document, and ensures that certain required financial disclosures are presented in the document. All gover nmental entities that participate in the program must include these disclosures in their CAFR. We believe the September 30, 2013 CAFR is in compliance with these disclosure requirements, and the Town will be awarded our 6th consecutive certificate. ORGANIZATIONAL HISTORY/RECOMMENDATION Acceptance of the annual CAFR ATTACHMENTS Resolution Comprehensive Annual Financial Report for the FY ended September 30, 2013 Resolution 14-05 Page 1 of 2 TOWN OF WESTLAKE RESOLUTION NO. 14-05 A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS, ACCEPTING THE ANNUAL COMPREHENSIVE ANNUAL FINANCIAL REPORT PRESENTED BY PATTILLO, BROWN & HILL, L.L.P., CERTIFIED PUBLIC ACCOUNTANTS, FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013. WHEREAS, Section 103.001 of the Local Government Code requires that a municipality shall have its records and accounts audited annually and shall have an annual financial statement prepared based on the audit; and WHEREAS, Section 103.002 of the Local Government Code requires that a municipality shall employ at its own expense a certified public accountant who is licensed in this state or a public accountant who holds a permit to practice from the Texas State Board of Public Accountancy to conduct the audit and to prepare the annual financial statements; and NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF WESTLAKE: SECTION 1: That, all matters stated in the Recitals hereinabove are found to be true and correct and are incorporated herein by reference as if copied in their entirety. SECTION 2: That the Town Council does hereby accept the fiscal year 2012-2013 Comprehensive Annual Financial Report from Pattillo, Brown & Hill, L.L.P., Certified Public Accountants attached as Exhibit “A”. SECTION 3: If any portion of this Resolution shall, for any reason, be declared invalid by any court of competent jurisdiction, such invalidity shall not affect the remaining provisions hereof and the Council hereby determines that it would have adopted this Resolution without the invalid provision. Resolution 14-05 Page 2 of 2 SECTION 4: That this resolution shall become effective from and after its date of passage. PASSED AND APPROVED ON THIS 24th DAY OF FEBRUARY, 2014. __________________________________ Laura Wheat, Mayor ATTEST: ____________________________________ __________________________________ Kelly Edwards, Town Secretary Thomas E. Brymer, Town Manager APPROVED AS TO FORM: ____________________________________ L. Stanton Lowry, Town Attorney TOWN OF WESTLAKE COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 Prepared by Town of Westlake Finance Department 3 Village Circle, Suite 202 Westlake, TX 76262 Town of Westlake February 17, 2014 Honorable Mayor, Council Members and the Citizens of the Town of Westlake, The Town of Westlake (the "Town ") Fiscal and Budgetary Policies require that the Town's Finance Department prepare a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants. Accordingly, the Comprehensive Annual Financial Report (CAFR) for the Town of Westlake, Texas for the fiscal year ended September 30, 2013, is hereby issued. This report consists of management's representations concerning the finances of the Town. Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making representations, the Town established a comprehensive internal control framework that was designed both to protect the Town's assets from loss, theft or misuse and to compile sufficient reliable information for the preparation of the Town's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the Town's comprehensive framework of internal controls has been designed to provide reasonable, rather than absolute, assurance that the financial statements will be free from material misstatements. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The Town's financial statements have been audited by 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, 2013, were free of material misstatements. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the Town's financial statements for the fiscal year ended September 30, 2013, were fairly presented in conformity with GAAP. The independent auditors' report is presented as the first component of the financial section of this report. This report is presented in three sections: Introductory, Financial and Statistical. The Introductory Section includes this transmittal letter, a listing of Town Officials, and an organizational chart of the Town. The Financial Section includes the independent auditor's report on the basic financial statements, Management's Discussion and Analysis (MD &A), basic financial statements, the notes to 3 Village Circle #202 • Westlake, Texas 76262 Metro: 817 -430 -0941 . Fax: 817- 430 -1812 • www.wcstlake- tx.org the basic financial statements, and combining and individual fund statements and schedules. The MD &A is a narrative introduction, containing overview and analysis to accompany the basic financial statements. This letter of transmittal is designed to complement, and should be read in conjunction with the MD &A. The Town of Westlake's MD &A can be found immediately following the independent auditor's report. The Statistical Section includes financial and demographic information relevant to readers of the Town's financial statements. The statistical data is generally presented on a multi -year basis. Profile of the Town Minutes from downtown Fort Worth, Texas and DFW International Airport, the Town of Westlake is home to several upscale residential communities and Fortune 500 companies, all of which share a unique character and charm, along with a commitment to excellence. The Town is located in northeast Tarrant County and may be conveniently accessed by several major thoroughfares, including SII 114 and US 377. The Town occupies approximately 7 square miles and serves a population appraised home value of $1.2 million. Town obf Westla�e 1 35 1 37'1 fat 4'1 y Iu7.U1; ?gd 135 l i t 111 1 Fort Worth of approximately 1,100 with an average The Town, incorporated in 1956, is considered a Type A general -law municipality. The Town operates under the Council- Manager form of government. The Council is comprised of a mayor and five (5) council members and is responsible for, among other things, passing ordinances, adopting the budget, appointing committees, and hiring the Town Manager. The Town Manager is responsible for carrying out the policies and ordinances of the Council, for overseeing the day -to -day operations of the Town and appointing and supervising heads of various departments. The Mayor and Town Council members serve two (2) year terms. All elected officials are elected at- large. The financial reporting entity (the government) includes all funds of the primary government (i.e. the Town of Westlake), as well as all of its component units. Component units are legally separate entities for which the primary government is financially accountable. The following entities are considered blended component units: Lone Star Public Facilities Corporation is a Texas nonprofit corporation that acts on behalf of the Town to further the public purposes under the Public Facilities Corporation Act, as it's duly constituted authority and instrumentality. The board of directors, appointed by the Town's governing body, is comprised of seven members, of whom five must be members of the Town's governing body. 4B Economic Development Corporation is a Texas nonprofit industrial corporation under the Development Corporation Act of 1979 formed to promote economic development within the Town and the State of Texas in order to eliminate unemployment and underemployment, and to promote and encourage employment and the public welfare of, for, and on behalf of the Town by developing, implementing, financing, and providing one or more projects defined and permitted under Section 4B of the Act. The board of directors is composed of seven persons appointed by the members of the Town's governing board. Four of the members of the board of directors are members of the Town's governing board. ii Westlake Academy (Academy) is an open - enrollment charter school, as provided by Subchapter D, Chapter 12, of the Texas Education Code. The Town of Westlake ( "Charter Holder ") applied for and became the first municipality in Texas to ever receive this special charter designation. The Academy had 658 students in FY 12 -13 and serves Kindergarten thru 12th grade. The Academy graduated their first class in FY 09 -10. The Board consists of six (6) trustees and is appointed by the Town's governing body. Currently, all members of the board of trustees are members of the Town's governing body. The Academy's year -end is August 31. Discretely presented component units are legally separate entities and not part of the primary government's operations. These component units are as follows: Texas Student Housing Authority - Ballpark Austin Project, Texas Student Housing Corporation -The Ridge at North Texas Project, Texas Student Housing Authority -Town Lake Austin Project, Texas Student Housing Authority - College Station Project, and Texas Student Housing Authority. Services Provided The Town provides to its citizens those services that have proven to be necessary and meaningful and which the Town can provide for the least amount of cost. Major services provided under the general government and enterprise functions are: Fire and emergency medical services, police, water and sewer utility services, park and recreational facilities, street improvements, education and administrative services. The Town utilizes a combination of direct service delivery along with out - sourced services in its service delivery mix. The decision as to which service to deliver directly versus out - sourcing is based on analysis of cost - effectiveness, citizen responsiveness, and customer service quality. Economic Conditions and Outlook The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the environment within which the Town operates. Local Economy While we clearly understand the nation as a whole continues to try and recover from the economic downturn, the Town remains committed to budgeting and forecasting projections based on a fiscally conservative formula. We have accomplished many great things this past year through our use of partnerships and inventive strategies to govern our community. We have begun the process of reinvesting in our infrastructure and will continue to do so over the next several years — paying special attention to unique cost sharing opportunities, both public and private. Our overall goal is to provide our residents with a living experience that is second -to -none. The Town staff is aware that the Town of Westlake does not create wealth, but instead, is entrusted with public dollars collected on behalf of our citizens. We are stewards who are fully vested in the success of the Town of Westlake and Westlake Academy. We exist as a municipal corporation for one reason and one reason only: to prioritize and deliver the best services possible with the resources provided to achieve an exceptional quality of life. This is a challenge the Staff takes very seriously, one that we pursue with vigor every day. Below, please find the milestones and strategic priorities that were achieved during FY 12 -13: iii • Received the International City /County Managers Association 2013 ICMA Strategic Leadership & Governance Award for the Town's Strategic Issues - Focused Governance Systems (SIGS). • Continued to receive recognition for the transparency and high quality of its financial reporting by receiving the following: • Distinguished Budget Presentation Award from the Governmental Finance Officers Association (GFOA) marking the 6th year in a row that we have received this honor for our municipal budget and the 4th year for our educational services budget (Westlake Academy). • International Award for Budget Excellence from the Association of School Business Officials International for the past four years. • Certificate of Achievement for Excellence in Financial Reporting for our Comprehensive Annual Financial Report (CAFR), also known as the annual audit which has also been recognized through GFOA for the last five years. • The Town's first Popular Annual Financial Report (PAFR) by converting much of the CAFR document into an easy -to -read format for our residents. • The Town's open enrollment charter school, Westlake Academy, completed its 10th year of operations with another strong showing of academic and extra - curricular results by our students. • Westlake Academy was also ranked among the best high schools in America. • Washington Post shows them as 20th out of 1,900 schools across the nation. • Newsweek listed the school as the 52nd best high school in the United States • U.S. News & World Report ranked the school as 41st in the nation, 6th in Texas and 11th in national charter schools. They further designated the Academy as a Gold Medal recipient; one of only 2% in the nation to receive this designation of top 500 schools based on highest college readiness. • Recognized by the Texas Economic Development Council with an award for Deloitte University being the top economic development project in Texas for cities of Westlake's size. • Completed construction on the State's $15 Million Phase 1 FM 1938 (Davis Blvd.) project • Began installation of streetscape improvements on FM 1938 (Davis Blvd) with median plantings. • Completed and adopted a facility plan for Westlake Academy, the Town's charter school that is integrated into the Towns 5 Year CIP. • Invested a total of $4.5M in the Town's infrastructure through the Town's CIP ($3.4M) as well as a public - private partnership with Hillwood Properties ($1.1 M) for improvements to Westlake's major roadways - Dove Road and JT Ottinger Road. This public - private partnership is a multi -year agreement in the amount of $53M. Following are short term trends of growth and investment in service excellence that we feel "Move us Forward Together". ♦ Complete the second of a two (2) year program to move municipal employees' compensation closer to market: this will move our municipal employees into the same compensation position per the same compensation policy that we utilize for Westlake Academy employees (i.e. to be within 3% of the market median) IV ♦ Housing Start Increases: Westlake is seeing an upswing of single family residential family residential home construction. It can be seen from the side -chart how we are approaching pre - recession (i.e. '05 -06) housing starts. Permanent Population Growth: The North Central Council of Govermnents has updated Westlake's 2010 Census from 992 to 1,040 as FY FY FY FY FY FY FY FY FY of January 1, 2013. Based on the Town's water 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13114 accounts, the calculated population is approximately 1,100 at the fiscal year -end. An increase in population of 210 in 1990 to the present estimated of 1,100 represents a 423% increase. .[-- C44 ♦ Daytime Population Growth: Because Westlake is the home of major corporate office campuses, its Monday- Friday 8AM -5PM population is in the 10,000 - 12,000 range. These office complexes are comprised of notable corporate clients that include Deloitte LLP, Core Logic and Fidelity Investments. Fidelity Investments expanded their office campus in 2008- 09 and is currently populating it. Impact of Westlake Academy on Westlake's Residential Growth: The number of Westlake residents that are sending their students to Westlake Academy has doubled in the past five years. Resident surveys show Westlake Academy as one of the main reasons they have moved to Westlake, and why they plan to remain here. Increase in Westlake Academy Enrollment: Westlake Academy, the Town's charter school, has shown a steady total enrollment growth from 491 in FY 2009 -10 to a projected 677 in FY 2013 -14. The number of these students that live in Westlake has increased as shown in the side- chart. Attendance from the school's secondary boundaries (i.e. outside Westlake) has increased as well. There has also been a corresponding increase in boundary waiting list students; year. Number of Westlake Students 254 In Westlake Academy FY 08/09 FY 09/10 FY 10/11 FY 11/12 FY 12/13 FY 13/14 Waiting List for Westlake Academy 2,079 1,241 1,265 1, ©z7 844 7(, - — FY 07/00 FY 08/09 FY 09/10 FY 10 /11 FY 11/12 FY 12/13 secondary from 700 in 2010 to over 2,000 students for this past school ♦ Beginning Phase I Facility Improvements: Construction has begun to add approximately 36,000 sq. ft. of new facilities comprised of 3 buildings (a secondary classroom building, field house, and primary years' multi -use building) for which $8.5 million in debt was issued in FY 2012 -13. v ♦ Comprehensive Plan: The Town's 1992 Comprehensive Plan is in need of total review and consideration for updating. The Comprehensive Plan serves as the "blue print" for planning the Town's growth and for that reason, is of paramount importance for the Town. To date, the current plan has had only had nominal review of the land use portion of the plan. However, a comprehensive plan has many elements and the financial resources proposed for FY 2013 -14 will allow for holistic review of the entire plan and all its elements, not just the land use plan element. The total cost of this project ($338,950) is budgeted in FY 2013 -14. ♦ Sales tax collections increased by 19% for FY 12 -13. This increase was primarily caused by a 24% increase in revenues due to collections based on the Town's "base" sales taxes. The remaining portions of the tax remained substantially flat. Bases on the analysis of the payers the Town anticipates this upswing to continue in subsequent years. $4.50 $4.25 $4.00 $3.75 $3.50 $3.25 $3.00 $2.75 $2.50 $2.25 0$2.00 $1.50 2$1.25 $1.00 $0.75 $0.50 $0.25 $0.00 Local Sales and Use Tax FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 ■ Base Sales Tax Economic Development Agreements ■ Audit Payments a Presumed One -time Payments Long -Term Financial Outlook The Town of Westlake has developed a comprehensive capital improvements document as well as a multi -year strategic plan. Such strategic planning assists both the Council and staff in establishing priorities and allocating resources appropriately. Over the course of the last several years, we have incorporated a `theme' into our budget document to help guide and focus our efforts on the critical issues facing us for the coming budget year. This has been an iterative process and can be seen in how we have progressed in our budgeting over the last 5 fiscal years: ♦ In FY 2009 -10, the budget theme was "Critical Challenges, Critical Choices" as we initiated community -wide dialogue on how best to achieve our community's vision for Westlake, ensure our quality of life, as well as begin the task of identifying our challenges as it related to our future financial sustainability. vi • In FY 2010 -11, the budget theme was "Securing the Vision. " After a lengthy community dialogue and Council discussions, the Council took the important step to institute our first ad valorem property tax to stabilize our revenue stream and shift from a revenue source that relied almost solely on general sales and use tax. The decision reversed the preceding trend of depleting the General Fund. • Decisions in FY 2010 -11 led to the FY 2011 -12 budget theme of "Investing in Our Future". This theme was derived by being able to assess a small property tax which would give us the ability to invest in the improvement of roadways and other infrastructure projects that would provide tremendous benefits to our residents and businesses over the next several years. • With our financial situation stabilized and investment in infrastructure occurring, the FY 2012 -13 theme of "Driving Service Excellence" focused on providing resources that will improve our ability to deliver excellent customer service, something that is integral to maintaining Westlake's quality of life and its status as a one -of -a -kind community. The selection of any budget theme is intended to bring into focus how resources are recommended to be prioritized and used in order to take the next step in achieving or creating our vision, mission and community values for Westlake. Over the history of our Town, budgets have been prepared with an eye towards being fiscally conservative, while providing for the highest quality of customer service that our residential population has come to expect in Westlake. In that light, the FY 2013 -14 theme of "Moving Forward Together: A Growing Community, A Growing School" is relating to the Town's attention to growth related issues both in Westlake as a municipality and at our Town owned charter school. At this juncture, the short-term trends identified above appear to be the trend for the foreseeable future, thus becoming long term trends. The long term factors that will shape Westlake appear at this point to be: ♦ Continued Westlake Permanent Population Growth: Housing starts do not appear to be slowing down any time soon. This is for two reasons. • First, existing lot inventory in developed Westlake subdivisions continues to be reduced through purchase by prospective Westlake residents. These include potential residents who are building in Westlake in order for their children to attend Westlake Academy. • Second, there are 2 developments slated to begin in the next 12 -24 months. The first is Granada, an 84 lot single family residential subdivision. The second is Entrada, an 84 acre mixed -use development that will be comprised of various types of residential development as well as commercial development. ♦ Completion of Phase I of Westlake Academy Facility Improvements: When these improvements are complete (scheduled for SY 2014 -15), Westlake Academy's enrollment will go from approximately 700 to 800. 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 2013 -2014 Budget. The budget details the Town's long -term goals and financial policies, and describes program accomplishments and initiatives. vii Other Information The Government Finance Officers Association of the United States of America and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Town of Westlake for its comprehensive annual financial report (CAFR) for the fiscal year ended September 30, 2012. This was the sixth year the Town has received this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report (CAFR) continues to meet the Certificate of Achievement Program's requirements and we are submitting it to GFOA to determine its eligibility for another certificate. In addition, we also received our sixth GFOA Distinguished Budget Presentation Award for the fiscal year beginning October 1, 2012 for our municipal budget and the 4th year for our educational services budget for Westlake Academy, a component unit of the Town. In order to qualify for the Distinguished Budget Presentation Award, the Town and Academy budget documents had to be judged proficient as a policy document, a financial plan, an operations guide, and a communications device. Westlake Academy has also received recognition from the Association of School Business Officials International as a recipient of the International Award for Budget Excellence for the past four years. The Finance Department received its second Popular Annual Financial Report (PAFR) converting much of the FY 2012 -2013 audit document into an easy -to -read format for our residents. The goal is to encourage resident awareness as it relates to Town finances through the condensed version of the budget. The report provides an "overview of our financial position and policies, and conveys our commitment to delivering responsive services and programs in a fiscally responsible manner." Acknowledgements The preparation of this report could not be accomplished without the efficient and dedicated services of the entire staff of the Finance Department. Appreciation is expressed to Town employees throughout the organization, especially those employees who were instrumental in the successful completion of this report. The staff would also like to thank the Mayor and Town Council for their conservative leadership and their support in planning and conducting the financial operations of the Town in a responsible and progressive manner. Respectfully Submitted, V2 9- 16 6 ��6} ,f Tom Brymer Town Manager viii Debbie Piper, CPA Finance Director M5L—1 PATTILI.,O, BROWN & HILL, I..I..1'. CERTIFIED PUBLIC ACCOUNTANTS EBUSINESS CONSULTANTS INDEPENDENT AUDITOR'S REPORT To the Honorable Mayor and Members of the Town Council Town of Westlake, Texas We have audited the accompanying financial statements of the governmental activities, the business- type activities, the aggregate discretely presented component units, and each major fund of the Town of Westlake, Texas, as of and for the year ended September 30, 2013, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. 115 SOUTH CFIURC14 S'rREE, N HILI.SI301Z0, TX 76645 0(254)582-2583 N FAX: (254) 582 -5731 E www.pbhcpB.com AFFILIATE OFFICES: 13ROWNSVILLE, TX (956) 544 -7778 ■ TEMPLE, TX (254) 791 -3460 WACO, TX (254) 772 -4901 ■ ALBUQUERQUE, NM (505) 266 -5904 Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, the aggregate discretely presented component units, and each major fund of the Town of Westlake, Texas, as of September 30, 2013, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and budgetary comparison information on pages 3 -15 and 63 -70 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Town of Westlake, Texas's basic financial statements. The introductory section, individual fund budgetary analysis schedules and statistical section are presented for purposes of additional analysis and are not a required part of the financial statements. The individual fund budgetary analysis schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. PW A- J &r. � V J 1, / P February 14, 2014 2 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, 2013. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found in the introductory section of this report. FINANCIAL HIGHLIGHTS • The assets of the Town exceeded its liabilities at the close of the most recent fiscal year by $37,817,033 (Net position). This number must be viewed within the context that the vast majority of the Town's net position of $27,779,375 (73.5 %) are capital assets and that most capital assets in a government entity do not directly generate revenue nor can they be sold to generate liquid capital. The net position restricted for specific purposes totaled $4,243,239 (11.2 %). The remaining $5,794,419 (15.3 %) is unrestricted net position and may be used to meet the government's ongoing obligations to citizens and creditors in accordance with the Town's fund designation and fiscal policies. • As of the close of the current fiscal year, the Town of Westlake's governmental funds reported combined ending fund balances of $19,443,647, which is an increase of $8,512,786 in comparison with the prior year. Within this total, $12,692,285 is non - spendable, restricted, committed or assigned by management or council. • At the end of the current fiscal year, fund balance for the general fund was $7,051,631, an increase of $1,787,826 in comparison with the prior year. Of this total fund balance, $6,751,362 is unassigned. This represents 148% of the total general fund expenditures and is equivalent to 539 operating days. • The Town's capital assets (net of accumulated depreciation) increased by $6,555,286. Eighty - four percent (84 %) of this increase ($5,444,623) is attributed to the completion of the Town's multi -year, public - private partnership with Hillwood Properties. Hillwood contributed materials and workmanship in the amount of $4,665,818 to help with the completion of the improvements to Dove and JT Ottinger Road. An additional $1.8M was added to construction in progress expense for the Westlake Academy Expansion and several road projects. In addition, three new portable buildings and three lease /purchased portable buildings located at the Westlake Academy campus totaling $379,404 were capitalized during the current year. • The Town's bonds payable increased by $8,565,000 in total, due to the issuance of Certificates of Obligation bonds in the amount of $9,320,000 for various projects, and the issuance of General Obligation Refunding Bonds in the amount of $2,200,000 offset by scheduled principal payments and bond refundings of $2,955,000. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the Town's basic financial statements. The Town's basic financial statements are comprised of the following three components: 3 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 position presents information on all of the Town's assets and liabilities with the difference between the two reported as net position. Over time, increases or decreases in the Town's net position serves as a useful indicator of whether the financial position of the Town is improving or weakening. The statement of activities presents information showing how the government's net position changed during the most recent fiscal year. All of the revenues and expenses are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cashflows. Thus revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods. Both of the government -wide financial statements distinguish functions of the Town that are principally supported by sales taxes, property taxes, and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the Town include general government, public safety, culture and recreation, economic development, public works, visitor services and education. The business -type activities of the Town include water /sewer and cemetery. The government -wide financial statements include not only the Town (known as the primary government), but also discretely presented component units including all of the Texas Student Housing entities. Financial information for these component units is reported separately from the financial information presented for the primary government itself. See pages 27 - 30 of the "Financial Section" for detail on these entities. In addition, the Town has the following blended component units: Lone Star Public Facility Corporation, 413 Economic Development Corporation, and Westlake Academy, an open enrollment charter school owned and operated by the Town of Westlake. Fund Financial Statements A fund is a grouping of related accounts used to maintain control over resources that have been segregated for specific activities or objectives. The Town, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. Below are the three types of funds. The Town had only Governmental and Proprietary funds for the year ended September 30, 2013. 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 M government -wide financial statements, governmental fund financial statements focus on near -term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near -term financial requirements. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, the reader may better understand the long -term impact of the government's near -term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The Town maintains nine individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General, Visitors Association, Westlake Academy, Debt Service, Capital Projects, Westlake Academy Expansion, Economic Development, Lone Star Public Facility Corporation and Westlake 4B Economic Development Corporation funds, all of which are presented as major funds. The Town adopts an annual appropriated budget for all funds, except the Capital Projects and Westlake Academy Expansion funds which are project - length based budgets. A budgetary comparison statement has been provided for all appropriate funds to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on pages 19 - 23 of this report. Proprietary funds - There are two types of proprietary funds, Enterprise Funds and Internal Service Funds. An Enterprise Fund is the only proprietary fund currently maintained by the Town. Enterprise funds are used to report the same functions presented as business -type activities in the government - wide financial statements. The Town uses enterprise funds to account for its water and sewer activities and its cemetery activities. All activities associated with providing such services are accounted for in this fund, including administration, operation, maintenance, debt service, capital improvements, billing and collection. The Town's intent is that costs of providing the services to the general public on a continuing basis is financed through user based charges in a manner similar to a private enterprise. The Town has no Internal Service Funds (fund to report activities that provide supplies and services for the Town's other programs and activities, i.e. self - insurance and fleet management.) The basic proprietary fund financial statements can be found on pages 24 - 26 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 31 - 62 of this report. 5 Governmental activities: Governmental activities increased the Town's net position by $7,441,135 (30 %), increasing net position from $24,616,406 to $32,057,541. Unrestricted net position, the part of net position that can be used to finance day -to -day operations without constraints established by debt covenants, enabling legislation, other legal requirements, and/or Council or management's decision, increased by $1,613,145 or 6.6% of total governmental net position. The majority of the total increase was due to the completion of the work to Dove and JT Ottinger Road which was supplemented by the materials and work connected to the Town's multi -year public private agreement with Hillwood Properties. The Town's fees, fines & charges for services increased $380K (26 %) primarily due to the increase of building permits /fees plus an increase ($718K) in sales tax revenues. Total revenues (including transfers) for governmental activities increased by $6,135,050 when compared to the prior year. General revenue had an increase of $791,370, while program revenues had an increase of $5,915,737. Program revenues — o Charges for services increased by $380,650 which was primarily due to an increase of building permits /fees (twice as many as previous year) • Operating Grants and Contributions decreased by $362,369 • Capital Grants and Contributions increased by $5,897,456 o $4,665,818 materials /work contribution from Hillwood Properties related to Dove and JT Ottinger Road o $1,000,000 contribution for the Westlake Academy Expansion Project o $149,622 from Roanoke and Trophy Club for Hwy 114/170 enhancements o $82,016 from Fidelity for FM 1938 landscape enhancements (median) General revenues — Increase of $791,370 was primarily made up of the following components: • Sales tax increased by $718,123 which appears to be attributed to the continued improvement in the local economy as well as several new technology and professional related companies and several one -time payments related to purchases and /or construction • Hotel occupancy taxes increased by $118,725 — includes an additional $82K receipt from Deloitte University in the current year • Transfers decreased by $531,098— represents the transfer of $500K to the Utility Fund for the ground storage tank Expenses — o Total expenses for governmental activities increased by $106,897 or approximately 0.8 %. The increase is made up of several components including the purchase of Laserfiche software for archiving purposes, increase in payroll and related expenditures due to Phase 2 market increases, increase in the Keller Police Contract and fire fighter equipment. In addition Economic Development increased due to the payment based on an economic development agreement related to hotel /motel tax receipts. Public works expenditures increased because of the growth in right -of -way irrigation costs. All these expenditures were offset by a reduction of approximately $350K due to the elimination of the contribution from the Town to Westlake Academy. Business -type Activities._ The net position of our business -type activities ended fiscal year 2013 at $5,759,492 compared with $5,241,306 in 2012. This represents an increase in net position of $518,186, or 10% more than the prior fiscal year. Revenues of the Town's business -type activities were $3,394,389 for the fiscal year ending September 30, 2013. Revenues increased $335,767 or 11% more than the prior year. Operating expenses for the business -type activities were $3,361,794 for the year, an increase of $257,046 or 8 %. The business- type activities also had net transfers in of $485,591 in 2013 compared to net transfers out of $45,507 in the prior year. The resulting increase in net position is due to several factors, including the following: o Increase in Charges for Services was $223,500. This 7.6% increase was primarily realized because FY 12/13 was a drier year than normal resulting in increased water billing revenues and other associated fees in addition to a utility rate increase effective 1/1/13. o The Town's increase in expenses of $257,046 is attributed to the additional water purchases experienced during the dry weather months. oThe General Fund transferred $500K to the Utility Fund to supplement the $1M bond proceeds received for the construction of the Town's second water storage tank. FINANCIAL ANALYSIS OF THE TOWN'S FUNDS As noted earlier, the Town uses fund accounting to ensure and demonstrate compliance with finance - related legal requirements. Governmental funds. The focus of the Town's governmental funds is to provide information on near- term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Town's financing requirements. In particular, unassigned fund balance may serve as a useful measure of a town's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the Town's governmental funds reported combined ending fund balances of $19,443,647; an increase of $8,512,786 in comparison with the prior year. Approximately 34.7% of this total ($6,751,362) constitutes unassigned fund balance, which is available for spending at the government's discretion. The remainder of fund balance is nonspendable, restricted, committed or assigned to indicate that it is not available for new spending because it has already been committed. The following tables present a summary of general, special revenue, capital project, and debt service fund revenues and expenditures for the fiscal year ended September 30, 2013, and the amount and percentage of increases and decreases in relation to the prior year. 7 Below are summaries and explanations of the changes in fund balances from FY 2012 to FY 2013 of the Governmental Funds that are contained in the above totals: General Fund - Fund balance increased $1,787,826 (34 %). Most General Fund revenue categories realized increases over the prior year and many surpassed budget estimates as well. Sales tax receipts, fines and fees, and building permits exceeded both budget and prior year. Sales taxes grew as a result of continued improvement in the local economy. Fines and fees increases as a result of increased collections in municipal court fines and fees and there were double the number of housing permits /fees issued in the current year. 4B Economic Development Corporation Fund - Fund balance decreased $178,384 due to the final reduction which was made related to a receivable from the Utility fund for an interfund loan made to the Utility Fund for several utility projects in past years Visitors Association Fund - Fund balance decreased by $25,907 primarily due to a budgeted transfer of funds for the partial payment of the bonds related to the Arts and Sciences Center. Debt Service Fund - Fund balance decreased $21,175 because property tax receipts were in excess of the debt serviced in the prior year and taken into consideration when setting tax rate for FY 2012 -2013. Capital Projects Fund - Fund balance decreased by $941,968 was largely due to the continuation of several street projects (FM 1938 and SH 114 /Hwy 170) and the completion of the Dove and JT Ottinger Road project. Westlake Academy Expansion Fund - Fund balance increased by $7,718,480 because bond proceeds of $8.2M were received in the current year for the expansion to the campus which was offset by project expenses through year -end Proprietary Funds. The Town's proprietary fund statements provide the same type of information found in the government -wide financial statements with greater detail. Total net position of the Proprietary Funds amounted to $5,759,492, an increase of $518,186. Operating income totaled $736,004 which was offset by a net non - operating revenues (expenses) total of $703,409. A transfer in the amount of $500K from the General Fund to supplement the construction costs of the ground storage tank constitutes the increase. General Fund Budgetary Highlights The General Fund budget for fiscal year 2013 was amended in total to increase the net change in fund balance from ($1,506,069) to $1,020,783, a total increase of $2,526,852. o The amended budget for net revenues was increased by $697,040 (13 %) • Sales Tax - $393,750 — received more taxes than anticipated • Property Tax - $41,486 - original budget was based on September values but then updated • Building permits and fees - $243,710 — the Town had more housing starts /permits than anticipated o The amended budget for expenditures increased by $1,088 11 o Transfers In budget was amended to increase by $36,398 which represents the reimbursement of funds used for the Westlake Academy Expansion project that was repaid upon receipt of the bond proceeds. oAmended budget for Transfers Out was decreased by $1,794,504 - originally budgeted to transfer $2M to Utility Fund for the construction of ground storage tank. Budget was amended to only transfer $500K due to receipt of bond proceeds. The General Fund actual revenue collections were more than the amended budget by $672,258 which can be attributed to the unanticipated increase in sales tax, building permits and fees, and municipal fines and penalties received. The final expenditures were $58,451 less than budgeted (1%). Capital Assets and Debt Administration • Capital Assets. The Town's investment in capital assets for its governmental and business -type activities as of September 30, 2013, totaled $53,245,124 (net of accumulated depreciation). The investment in capital assets includes land, buildings, improvements, machinery and equipment, infrastructure, and construction in progress. The net increase in the Town's investment in capital assets for the current fiscal year was $6,555,286 or 14 %. Eighty -four percent (84 %) of this increase ($5,444,623) is attributed to the completion of the Town's multi- year, public - private partnership with Hillwood Properties. Hillwood contributed materials and workmanship in the amount of $4,665,818 to help with the completion of the improvements to Dove and JT Ottinger Road. An additional $1.8M was added to construction in progress expense for the Westlake Academy Expansion and several road projects. In addition, three new portable buildings and three lease /purchased portable buildings located at the Westlake Academy campus totaling $379,404 were capitalized during the current year. Land Capital improvements Buildings Machinery & equipment W/W treatment rights Construction in progress Total capital assets Table 5 Town's Capital Assets (Net of Accumulated Depreciation) Governmental Activities Business -Type Activities Total 2013 2012 2013 2012 _ 2013 _ 2012 $ 11,896,663 $ 11,896,663 $ - $ - $ 11,896,663 $ 11,896,663 8,184,522 2,386,902 9,614,902 9,883,837 17,799,424 12,270,739 17,611,891 17,767,343 - - 17,611,891 17,767,343 594,715 710,703 1,948,389 2,069,390 2,543,104 2,780,093 - - 217,026 248,786 217,026 248,786 2,834,092 1,552,004 342,924 _ 174,210 3,177,016 1,726,214 $ 41,121,883 $ 34,313,615 $ 12,123,241 $ 12,376,223 $ 53,245,124 $ 46,689,838 Additional information on the Town's capital assets can be found in Note III on pages 43 - 44 of this report. 12 Long -term debt - At the end of the current fiscal year, the Town had total long -term debt outstanding of $35,344,832. Of this amount, $30,947,157 represents bonded indebtedness, $96,026 economic development reimbursement, and $5,412,149 business -type debt. During the fiscal year 2012 -2013, the Town's total debt payable increased by $8,882,468. This increase is primarily attributed to the issuance of Certificates of Obligation bonds in the amount of $9.32M for the Westlake Academy expansion project and the ground storage tank. This amount was offset by the scheduled repayment of principal and interest on outstanding bonded debt. Standard & Poor's Ratings Services, a division of the McGraw -Hill, Inc. has recently increased the Town's rate from AA to AA+ /stable. Additional information about the rating agency or the significance of the rating provided may be obtained from Standard & Poor's web site. Additional information on the Town's long -term debt can be found in Note III on pages 48 - 52. Table 6 Outstanding Debt at Year -End ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS While we clearly understand the nation as a whole continues to try and recover from the economic downturn, the Town remains committed to budgeting and forecasting projections based on a fiscally conservative formula. We have accomplished many great things this past year through our use of partnerships and inventive strategies to govern our community. We have begun the process of reinvesting in our infrastructure and will continue to do so over the next several years — paying special attention to unique cost sharing opportunities, both public and private. Our overall goal is to provide our residents with a living experience that is second -to -none. Below are long -term trends related to the FY 2013 -2014 budget: • Continued Westlake Permanent Population Growth: Housing starts do not appear to be slowing down any time soon. This is for two reasons. o First, existing lot inventory in developed Westlake subdivisions continues to be reduced through purchase by prospective Westlake residents. These include potential residents who are building in Westlake in order for their children to attend Westlake Academy. 13 2013 2012 2013 2012 2013 2012 General obligation bonds $ 17,010,892 $ 17,180,938 $ - $ - $ 17,010,892 $ 17,180,938 Certificates of obligation 12,876,496 4,877,000 1,059,769 - 13,936,265 4,877,000 Contractual obligations 96,026 124,618 5,412,149 5,498,668 5,508,175 5,623,286 Notes payable 17,420 34,075 - - 17,420 34,075 Compensated absences 106,404 81,905 13,527 11,428 119,931 93,333 Deferred amounts (1,24_7,851) (1,346,268) - _ - (1,247,851) (1,346,268) Total long -term debt $ 28,859,387 $ 20,952,268 $ 6,485,445 $ 5,510,096 $ 35,344,832 $ 26,462,364 ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS While we clearly understand the nation as a whole continues to try and recover from the economic downturn, the Town remains committed to budgeting and forecasting projections based on a fiscally conservative formula. We have accomplished many great things this past year through our use of partnerships and inventive strategies to govern our community. We have begun the process of reinvesting in our infrastructure and will continue to do so over the next several years — paying special attention to unique cost sharing opportunities, both public and private. Our overall goal is to provide our residents with a living experience that is second -to -none. Below are long -term trends related to the FY 2013 -2014 budget: • Continued Westlake Permanent Population Growth: Housing starts do not appear to be slowing down any time soon. This is for two reasons. o First, existing lot inventory in developed Westlake subdivisions continues to be reduced through purchase by prospective Westlake residents. These include potential residents who are building in Westlake in order for their children to attend Westlake Academy. 13 o Second, there are 2 developments slated to begin in the next 12 -24 months. The first is Granada, an 84 lot single family residential subdivision. The second is Entrada, an 84 acre mixed -use development that will be comprised of various types of residential development as well as commercial development. • Completion of Phase 1 of Westlake Academy Facility Improvements: When these improvements are complete (scheduled for SY 2014 -15), Westlake Academy's enrollment will go from approximately 700 to 800. GENERAL FUND In the FY 2013 -14 budget, General Fund revenues and transfers are budgeted to decrease by $394K o Budgeted revenues are $385,753 (6 %) less than the prior year actual ■ Sales tax revenue budget only increased by approximately $90K based on information we had at the time of the budget preparation (due to accruals). Based on the actual amounts received in FY 2012 -2013; we anticipate an increase in the FY 2013 -2014 budget. There was a reduction in permits and fees and fines and forfeitures based on prior year projections but again looking at the prior year actual amounts, we expect an increase in these budgeted revenues. Operating budgeted expenditures in the General Fund (which includes the General Major Maintenance Fund for audit purposes) are projected to increase by $1.4M. The larger components of this increase are related to the following: • Increase in Operating Expenditures ■ $338K - Comprehensive Plan update ■ $ 41 K - mandated bunker gear for part time fire /ems employees ■ $ 24K - new permitting software for the Planning and Development Department ■ $ 41K - increase to Keller Police contract services ■ $ 55K - increased building inspection costs related to the Entrada and Granada development. • Increase of $395K in Payroll Expenditures ■ This increase includes $115,000 in market pay increases (inclusive of taxes and insurance) for work force attraction and retention and is the second year of a 2 year program. A portion of this increased expenditure is subsidized by transfers in from the Utility Fund ($11.5K) and the Visitors Association Fund ($11.5K). An additional portion of this increase includes the personnel changes to include an additional full -time Lieutenant (Fire Department), additional full -time HR Generalist and the change from a part-time utility - person to a full -time position. Medical, dental and life insurance costs are predicted to increase by 18% ($50K) and an additional $52K (15 %) was budgeted for social security and Medicare taxes. • Purchase of a facilities /maintenance vehicle at $45K • Maintenance /repair towards facilities /technology for Westlake Academy in the amount of $90K 14 The Capital Project Fund balance reduction of $8.865M is a direct reflection of the construction of the following projects: • FM1938 Streetscape Project - $893K • SH114 /Hwy 170 Enhancement project - $390K • Trail Connection at 114 /Solana Project - $15K • Westlake Academy West Parking Improvement Project - $200K • Outdoor Warning System Project - $99K Westlake Academy Facility Expansion Project - $8.068M The Enterprise Funds have another large reduction in fund balance and is related specifically to the Utility Fund, totaling ($1.189M). This is primarily related to a construction project. The Town's second ground storage tank should be completed by the end of FY 2013 -14. During FY 2012 -13 the Utility Fund received bond proceeds of $1.0M and an inter -fund loan of $500K from the General Fund. The inter - fund loan amount is scheduled to be re -paid over two years starting in FY 2014 -15. 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. 15 TOWN OF WESTLAKE, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 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 Council - Manager form of government and provides the following services as authorized by the laws of the State of Texas: public safety; cultural and recreation; and economic development. The accounting and reporting policies of the City conform to accounting principles generally accepted in the United States of America for local governments. Generally accepted accounting principles (GAAP) for local governments include those principles prescribed by the Governmental Accounting Standards Board (GASB). The following is a summary of the more significant accounting and reporting policies: A. Reporting Entity The accompanying financial statements present the government and its component units, entities for which the government is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the Town's operations and are appropriately presented as funds of the primary government. Discretely presented component units, on the other hand, are reported in a separate column in the government -wide financial statements to emphasize it is legally separate from the Town. Based on these criteria, the financial information of the following entities have been blended or discretely presented within the financial statements: Lone Star Public Facilities Corporation, 4B Economic Development Corporation, Westlake Academy, Texas Student Housing Authority, Texas Student Housing Authority - Ballpark Austin Project; Texas Student Housing Authority - Town Lake Austin Project, Texas Student Housing Authority - College Station Project and Texas Student Housing Corporation - The Ridge at North Texas. 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, and Texas Student Housing Corporation — The Ridge at North Texas 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 and has the ability to remove at will the appointed members, thus the governing body can impose its will on the organizations. Housing entities are reported as Enterprise Funds. The Town is not responsible for the long -term debt of the Texas Student Housing entities. 31 Separately issued financial reports are available for the all the Texas Student Housing entities. These reports may be obtained by contacting the following office. Texas Student Housing Authority 3 Village Circle, Suite 202 Westlake, Texas 76262 Blended Lone Star Public Facilities Corporation is a Texas nonprofit corporation that acts on behalf of the Town to further the public purposes under the Public Facilities Corporation Act, as it's duly constituted authority and instrumentality. The board of directors, appointed by the Town's governing body, is comprised of seven members, of whom five must be members of the Town's governing body. Since a voting majority of the board of directors is on the Town's governing body, the Town can impose its will on the entity. 4B Economic Development Corporation is a Texas nonprofit industrial corporation under the Development Corporation Act of 1979 formed to promote economic development within the Town and the State of Texas in order to eliminate unemployment and underemployment, and to promote and encourage employment and the public welfare of, for, and on behalf of the Town by developing, implementing, financing, and providing one or more projects defined and permitted under Section 4B of the Act. The board of directors is composed of seven persons appointed by the members of the Town's governing board. Four of the members of the board of directors are members of the Town's governing board. Since a voting majority of the board of directors is on the Town's governing body, the Town can impose its will on the entity. Westlake Academy ( "Academy') is an open - enrollment charter school, as provided by Subchapter D, Chapter 12, of the Texas Education Code. The Town of Westlake ( "Charter Holder ") applied for and became the first municipality in Texas to ever receive this special charter designation. The board consists of six trustees and is appointed by the Town's governing body. Currently, all the members of the board of trustees are members of the Town's governing body. Since a voting majority of the board of directors is on the Town's governing body, the Town can impose its will on the entity. 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 Position and the Statement of Activities) report information on all of the non - fiduciary activities of the Town. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. 32 The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues includes 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and proprietary funds. Major individual Governmental Funds and major individual Enterprise Funds are reported as separate columns in the fund financial statements. D. Measurement Focus Basis of Accounting, and Financial Statement Presentation The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. 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. 33 The Town reports the following major governmental funds: General Fund — to account for all financial resources except those required to be accounted for in another fund. The General Fund balance is available for any purpose, provided it is expended or transferred in accordance with the legally adopted budget of the Town. Special Revenue Funds — to account for the proceeds of specific revenue sources (other than special assessments, expendable trusts, or major capital projects) that are legally restricted to expenditures for specified purposes. Visitors Association Fund — to account for municipal hotel occupancy taxes collected and expenditures to promote tourism and the convention and hotel industry. Westlake Academy Fund — to account for all local, state and federal revenue and related education expenditures of the Academy. Lone Star Public Facilities Corporation — to account for investment activity relating to the Lone Star Public Facilities Corporation. 4B Economic Development Corporation — to account for sales tax collected to fund the activities of the 4B Economic Development Corporation. Economic Development Fund — to account for sales tax and hotel occupancy tax collected to fund activity relating to Economic Development agreements. 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 Projects 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 funds: Utility Fund — to account for revenues and expenses related to providing water and sewer services to the general public on a continuing basis. Cemetery Fund — to account for the operations of the Town's cemetery. 34 As a general rule, the effect of interfund activity has been eliminated from the government - wide financial statements. Exceptions to this general rule are charges between the Town's water and wastewater function and various other functions of the government. Elimination of these charges would distort the direct costs and program revenue reported for the various functions concerned. Amounts reported as program revenues include: 1) charges to customer or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenue. Likewise, general revenue includes all taxes. E. Assets, Liabilities, and Net Position or Equity Cash and Cash Equivalents Cash and investments of all funds, including restricted cash, are available upon demand and are considered to be "cash equivalents." For purposes of the statement of cash flows, the Town considers highly - liquid investments (including restricted assets) with an original maturity of three months or less when purchased to be cash equivalents. State 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. Receivables and Payables Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as "due to /from other funds" (i.e., the current portion of interfund loans) or "advances to /from other funds" (i.e., the non - current portion of interfund loans. All other outstanding balances between funds are reported as "due to /from other funds." Any residual balances outstanding between the governmental activities and business -type activities are reported in the government -wide financial statements as "internal balances." 35 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 3 -30 Improvements 5 -30 Information systems and software 3 Compensated Absences The Town's policy allows employees to earn 5 days of vacation and 5 days of sick leave between six months and one year of service, and 10 days of vacation and 10 days of sick leave between one year and two years of service and each successive year through five years of service. After completion of 5 years of service, 15 days of vacation and 15 days of sick leave per year are earned. After completion of 10 years of service, 20 days of vacation and 20 days of sick leave per year are earned. The Town makes sick and vacation time available in full at the beginning of each year, and hours are actually earned throughout the year. Unused, earned vacation hours are paid upon termination or retirement at the employee's normal hourly rate; accumulated, unused sick time is not 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 position. 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. Fund Equity and Net Position The governmental fund financial statements present fund balances based on classifications that comprise a hierarchy that is based primarily on the extent to which the Town is bound to honor constraints on the specific purposes for which amounts in the respective governmental funds can be spent. 37 The classifications used in the governmental fund financial statements are as follows: • Nonspendable: This classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) are legally or contractually required to be maintained intact. Nonspendable items are not expected to be converted to cash or are not expected to be converted to cash within the next year. • Restricted: This classification includes amounts for which constraints have been placed on the use of the resources either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments, or (b) imposed by law through constitutional provisions or enabling legislation. • Committed: This classification includes amounts that can be used only for specific purposes pursuant to constraints imposed by board resolution of the Town council, the Town's highest level of decision making authority. These amounts cannot be used for any other purpose unless the Town council removes or changes the specified use by taking the same type of action that was employed when the funds were initially committed. This classification also includes contractual obligations to the extent that existing resources have been specifically committed for use in satisfying those contractual requirements. • Assigned: This classification includes amounts that are constrained by the Town's intent to be used for a specific purpose but are neither restricted nor committed. In the General Fund, assigned amounts represent intended uses established by the Town council or a Town official delegated that authority by Town Charter or ordinance. • Unassigned: This classification includes the residual fund balance for the General Fund. The unassigned classification also includes negative residual fund balance of any other governmental fund that cannot be eliminated by offsetting of assigned fund balance amounts. In the government -wide financial statements, net position represents the difference between assets and liabilities. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowing used for the acquisition, construction or improvements of those assets, and adding back unspent proceeds. Net position is reported as restricted when there are limitations imposed on its use either though the enabling legislations adopted by the Town or through external restrictions imposed by creditors, grantors or laws or regulations of other governments. The government -wide and fund level financial statements report restricted fund balances for amounts not available for appropriation or legally restricted for specific uses. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, it is the City's policy to use restricted resources first, then unrestricted resources as needed. When an expenditure is incurred for which committed, assigned, or unassigned fund balances are available, the City considers amounts to have been spent first out of committed funds, then assigned funds, and finally unassigned funds. 38 II. Estimates The preparation of financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual amounts could differ from those estimates. RECONCILIATION OF GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS Explanation of Certain Differences Between the Governmental Fund Balance Sheet and the Government -wide Statement of Net Position The governmental fund balance sheet includes a reconciliation between fund balance — total governmental funds and net position — governmental activities as reported in the government - wide statement of net position. 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 $28,571,420 difference are as follows: Certificates of obligation bonds General obligation bonds Bond premiums (to be amortized of life of debt) Notes payable Deferred loss on refunding bonds (to be amortized over life of debt) Deferred charges for issuance costs (to be amortized over life of debt) Compensated absences Accrued interest payable Net adjustment to reduce fund balance - total governmental funds to arrive at net position - governmental activities $ 12,596,800 16,590,000 700,588 113,446 (1,247,851) (647,443) 106,404 359,476 $ 28,571,420 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 position 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 $6,808,268 difference are as follows: 39 A summary of discretely presented component units' capital assets at September 30, 2013, follows: Texas Student Housing Authority - Ballpark Austin Project Beginning Ending Balance Additions Deletions Balance Capital assets, not being depreciated: Land Total capital assets, not being depreciated Capital assets, being depreciated: Building Furniture and fixtures Total capital assets, being depreciated Less accumulated depreciation for: Building Furniture and fixtures Total accumulated depreciation Total capital assets, being depreciated, net Capital assets, net $ 4,788,265 $ - $ - $ 4,788,265 4,788,265 - - 4,788,265 21,345,305 - - 21,345,305 6,993,063 - - 6,993,063 28,338,368 - - 28,338,368 7,589,442 711,510 - 8,300,952 4,109,184 149,166 - 4,258,350 11,698,626 860,676 - 12,559,302 16,639,742 860,676 - _ 15,779,066 $ 21,428,007 $ ( 860,676 $ - $ 20,567,331 Texas Student Housing Corporation - The Ridge at North Texas Beginning Balance Additions Deletions Capital assets, not being depreciated: Land Total capital assets, not being depreciated Capital assets, being depreciated: Building Furniture and fixtures Total capital assets, being depreciated Less accumulated depreciation for: Building Furniture and fixtures Total accumulated depreciation Total capital assets, being depreciated, net Capital assets, net $ 2,200,000 $ - 2,200,000 - 25,705,000 1,253,841 - 26,958,841 9,782,181 1,164,364 856,833 8,496 10,946,545 865,329 Ending Balance $ - $ X2,200',000 2,200,000 25,705,000 1,253,841 26,958,841 - 10,639,014 - 1,172,860 11,811,874 16,012,296 { 865,329) - _ 15,146,967 $ 18,212,296 ${ 865,329) $ - $ 17,346,967 45 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 Capitalized purchase costs 887,095 Land improvements 2,806,596 Unit appliances 295,134 Furniture and fixtures 915,951 Total capital assets, - - being depreciated 18,174,926 Less accumulated depreciation for: Total capital assets, Building and improvements 5,929,821 Capitalized purchase costs 256,356 Total accumulated depreciation 6,186,177 Total capital assets, 13,270,150 887,095 2,806,596 295,134 915,951 - - 18,174,926 604,588 - 6,534,409 28,484 - 284,840 633,072 - 6,819,249 being depreciated, net 11,988,749 ( 633,072 ) 11,355,677 Capital assets, net $ 14,171,565 $( 633,072) $ - $ 13,538,493 Texas Student Housing Authority - College Station Project Beginning Balance Additions Retirements Capital assets, not being depreciated: Land $ 2,899,597 $ - $ - Total capital assets, not being depreciated 2,899,597 Capital assets, being depreciated: Building 27,727,646 - - Furniture and fixtures 2,594,804_ - - Total capital assets, being depreciated 30,322,450 - Less accumulated depreciation for: Building 7,060,819 896,614 - Furniture and fixtures 2,682,668 88,561 - Total accumulated depreciation 9,743,487 985,175 Total capital assets, being depreciated, net 20,578,963 { 985,,175) - Capital assets, net $ 23,478,560 $( 985,175) $ - 46 Ending Balance $ 2,899,597 2,899,597 27,727,646 2,594,804 30,322,450 7,957,433 2,771,229 10,728,662 19,593,788 $ 22,493,385 Restricted Cash General Fund Within the governmental funds, $293,363 in cash and cash equivalents represents funds held to assist in the financing of future projects and court security and technology. Proprietary Fund Within the proprietary funds, $171,802 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, $5,349,906 in cash and cash equivalents represents funds held for debt service. 47 General Long -term Debt Long -term liability activity for the year ended September 30, 2013, was as follows: Beginning Ending Due Within Balance Additions Reductions Balance One Year Combination tax and limited Pledge Revenue Certificates of Obligation, Series 2002 $ 645,000 $ - $ 315,000 $ 330,000 $ 330,000 Combination tax and limited Pledge Revenue Certificates of Obligation, Series 2003 2,225,000 - 170,000 2,055,000 175,000 General Obligation Refunding Bonds, Series 2007 7,260,000 - 25,000 7,235,000 35,000 Less deferred amounts on refunding ( 508,008) - ( 44,336) ( 463,672) - General Obligation Bonds, Series 2008 2,135,000 - 2,135,000 - - Combination tax and Revenue Certificates of Obligation, Series 2011 2,007,000 - 90,000 1,917,000 93,000 General Obligation Refunding Bonds, Series 2011 7,375,000 - 100,000 7,275,000 100,000 General Obligation Refunding Bonds, Series 2011 Premium 410,938 - 26,512 384,426 - Less deferred amounts on refunding ( 838,260) - ( 54,081) ( 784,179) - Certificates of Obligation Series 2013 - 8,294,800 - 8,294,800 89,000 Certificates of Obligation Series 2013 Premium - 284,437 4,741 279,696 - General Obligation Refunding Bonds, Series 2013 2,200,000 120,000 2,080,000 105,000 General Obligation Refunding Bonds, Series 2013 Premium - 37,723 1,257 36,466 - Notes payable 34,075 - 16,655 17,420 17,420 Compensated absences 81,905 89,869 65,370 106,404 10,640 Fidelity Tax Reimbursement 124,618 - 28,592 96,026 30,237 $ 20,952,268 $ 10,906,829 $ 2,999,710 $ 28,859,387 $ 985,297 48 The Certificates of Obligation, Series 2002 and 2003 require the Town to provide certain updated financial information and operating data to certain information vendors annually, as permitted by SEC Rule 15c2 -12 (the "Rule "). The issuer will provide the updated information to each nationally recognized municipal securities information repository ( "NRMSIR ") and to any state information depository ( "SID ") that is designated by the State of Texas and approved by the staff of the United States Securities and Exchange Commission (the "SEC "). During the fiscal year ended September 30, 2008, the Town issued General Obligation bonds of $2.5 million. These bonds were used for the construction of an Arts & Sciences Center. During the fiscal year ended September 30, 2011, the Town issued Certificates of Obligation in the amount of $2,095,000 for various street projects. During the fiscal year ended September 30, 2013, the Town issued Certificates of Obligation in the amount of $9,320,000 for the Westlake Academy Expansion and ground storage tank. Current Refunding The government issued $2,200,000 in general obligation bonds for a current refunding of $2,135,000 of 2008 general obligation bonds. The refunding was undertaken to lower debt service requirements. The reacquisition price exceeded the net carrying amount of the old debt by $40,064. This amount is being netted against the new debt and amortized over the life of the refunding debt. The transaction also resulted in an economic gain of $218,480 and a reduction of $255,176 in future debt service payments. Prior year defeasance of debt. In prior years, the government defeased general obligations bonds by placing proceeds of the new bonds in an irrevocable trust account to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the government's financial statements. At September 30, 2013, $13,120,000 of defeased bonds remain outstanding. Debt service requirements of certificates of obligation and general obligations to be retired from governmental funds are as follows: Year Ending September 30, 2014 2015 2016 2017 2018 2019 -2023 2024 -2028 2029 -2033 2034 -2038 2039 -2043 Total 49 Total Principal Interest Requirements $ 927,000 $ 1,151,319 $ 2,078,319 1,050,550 1,015,923 2,066,473 1,073,550 992,507 2,066,057 1,083,000 982,751 2,065,751 1,122,000 940,726 2,062,726 6,148,100 4,165,669 10,313,769 7,211,850 3,086,441 10,298,291 7,050,800 1,543,879 8,594,679 1,593,100 598,547 2,191,647 1,926,850 222,749 2,149,599 $ 29,186,800 $ 14,700,511 $ 43,887,311 49 During the fiscal year ended September 30, 2011, the Town entered into a note payable in the amount of $50,000 for the purchase of two heart monitors for the EMS /Fire Department. Debt service requirements for the note payable to be retired from governmental funds are as follows: Year Ending Total September 30, Principal Interest Requirements 2014 $ 17,420 $ 800 $ 18,220 Total $ 17,420 $ 800 $ 18,220 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. Debt service requirements for deferred rebates to be retired from governmental funds are as follows: Year Ending Total September 30, Principal Interest Requirements 2014 $ 30,237 $ 5,521 $ 35,758 2015 31,975 3,783 35,758 2016 33,814 1,944 35,758 Total $ 96,026 $ 11,248 $ 107,274 Compensated absences are typically liquidated by the fund to which they relate. 50 Proprietary Long -term Debt Proprietary long -term debt as of September 30, 2013, is as follows: Outstanding Description 9/30/2U 12 Contractual obligations: Elevated water storage $ 818,724 $ Limited pledge contractual obligation: Dove Road Water Line and West Pump Station 4,679,944 2013 Certificates of Obligation 2013 Certificates of Outstanding Current 9/30/2013 Portion $ 86,519 $ 732,205 $ 91,325 4,679,944 - 1,025,200 - 1,025,200 11,000 Obligation Premiums 35,155 586 34,569 - Compensated absences 11.428 12,108 10,009 13,527 1,353 $ 5,510,096 $ 1,072,463 $ 97,114 $ 6,485,445 $ 103,678 Debt service requirements of certificates of obligation to be retired from proprietary funds are as follows: Year Ending Total September 30, Principal Interest Requirements 2014 $ 11,000 $ 44,787 $ 55,787 2015 21,450 34,325 55,775 2016 21,450 33,896 55,346 2017 22,000 33,461 55,461 2018 22,000 33,021 55,021 2019 -2023 119,900 157,536 277,436 2024 -2028 139,150 139,225 278,375 2029 -2033 233,200 107,112 340,312 2034 -2038 196,900 65,840 262,740 2039 -2043 238.150 _ 24,503 _ 262,653 Total $ 1,025,200 $ 673,706 $ 1,698,906 51 The schedule of future payments by the Town under these agreements is as follows: Year Ending Total September 30, Principal Interest Requirements 2014 $ 91,325 $ 716,830 $ 808,155 2015 94,530 761,423 855,953 2016 99,336 811,805 911,141 2017 104,143 861,283 965,426 2018 108,950 916,518 1,025,468 2019 -2023 233,921 2,752,024 2,985,945 2024 -2028 4,679,944 - 4,679,944 Total $ 5,412,149 $ 6,819,883 $ 12,232,032 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 %. Dove Road Water Line and West Pump Station In April 2000, the Town approved an agreement with the Hillwood Development Corporation ( "Hillwood "). In the agreement, Hillwood agreed to bear all initial costs for the design, engineering and constructions of the Dove Road Water Line and the West Pump Station that will service the residents of the Town. The Town agreed to reimburse Hillwood for the cost of the project upon completion and the Town's acceptance of the project, which occurred in June 2001, solely from a $.25 charge per 1,000 gallons of usage. The Town further agreed to deposit debt service revenue of $.25 per 1,000 gallons of usage collected from Town residents to fund its repayment to Hillwood. Debt service revenue will be allocated between Hillwood service area and Town service area by 52% and 48 %, respectively and deposited into two separate debt service funds that will result in debt service revenue to pay the respective share of the construction cost. The Town recorded a limited pledge contractual obligation of $4,679,944 for the project cost based upon the terms of the agreement, which requires 239 monthly principal and interest payments to Hillwood, at an interest rate of 6.75 %. If the Town collects insufficient funds to pay current interest on the debt, the interest payment may be deferred. No portion of debt payments will be applied to the principal component, until all current and deferred interest is fully paid. The obligation of the Town to pay the purchase price and interest thereon is not a general obligation of the Town but is a limited recourse obligation payable solely from debt service revenue. 52 Discretely Presented Long -term Debt Texas Student Housing Authority - College Station Project The Project's installment note payable is summarized as follows: 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% $ 30,310,000 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, 2013: Amounts Beginning Ending Due Within Balance Increases Decreases Balance One Year $ 30,720,000 $ _ $ 410,000 $ 30,310,000 $ 440,000 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 $ 16,530,000 B 3,990,000 C 4,820,000 D 55380,000 Total $ 30,720,000 Class C and D bonds are in default and the property does not generate enough revenue to pay the debt obligations so the maturity schedules are not included. All of the Class C and D bonds issued remain outstanding as of August 31, 2012. 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, 2013, the Project was in compliance with the fixed charge coverage ratio. Should the project 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 53 event will occur, since foreclosure by private interests would result in the loss of tax - exempt status for the Project. Texas Student Housing Authority - Town Lake Austin Project Amounts Due Beginning Within One Balance Increases Decreases Ending Balance Year Revenue Bonds: 2002 A -1 Bonds $ 15,518,242 $ - $ 301,733 $ 15,216,509 $ 328,105 2002 A -2 Bonds 5,089,241 - - 5,089,241 - Total $ 20,607,483 $ - $ 301,733 $ 20,305,750 $ 328,105 The bonds are payable solely from the revenues generated by the Project and are secured by the revenues pledged and assigned under the terms of the Trust Indenture. Interest rates on the bonds range from 7.76% to 8.69% at present and principal and interest payments are made monthly. The future debt service requirements of the bonds are as follows: Year Ending Amounts August 31, Principal Interest Total 2014 $ 328,105 $ 1,563,532 $ 1,891,637 2015 354,491 1,537,146 1,891,637 2016 382,998 1,508,639 1,891,637 2017 413,797 1,477,840 1,891,637 2018 447,074 1,444,563 1,891,637 2019 -2023 2,836,079 6,622,106 9,458,185 2024 -2028 4,175,185 4,102,458 8,277,643 2029 -2033 11,368,021 3,312,414 14,680,435 $ 705,000 The bonds are payable solely from the revenues generated by the Totals $ 20,305,750 $ 21,568,698 $ 41,874,448 Texas Student Housing Authority - Ballpark Austin Project The long -term debt activity of the Ballpark Austin Project is as follows: Amounts Beginning Ending Due Within Balance Increases Decreases Balance One Year Revenue Bonds: 2001A Bonds $ 28,840,000 $ - $ - $ 28,840,000 $ 705,000 2001B Bonds 2,365,000 - - 2,365,000 - 2001C Bonds 3,000,000 - - 3,000,000 - Deferred purchase price 1,460,000 - - 1,460,000 - Less discounts ( 1,161,651) - ( 60,085) ( 1,101,566) - Total $ 34,503,349 $ - $( 60,085) $ 34,563,434 $ 705,000 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 54 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, 2014 2015 2016 2017 2018 2019 -2023 2024 -2028 2029 -2033 2034 -2038 Totals Governmental Activities Pri ltc i pal Interest Total $ 1,035,000 $ 2,006,275 $ 3,041,275 800,000 1,962,856 2,762,856 845,000 1,916,950 2,761,950 890,000 1,868,556 2,758,556 940,000 1,817,406 2,757,406 5,510,000 8,218,281 13,728,281 7,210,000 6,433,000 13,643,000 12,470,000 4,062,075 16,532,075 4,505,000 - 4,505,000 $ 34,205,000 $ 28,285,399 $ _ 62,490,399 At August 31, 2013, the Project had not made interest payments on the Subordinate 2001C Bond Series since July 2003, and the Subordinate 2001C Bond is in default. In addition, the Project's fixed charges coverage ratio was not in compliance with the covenants of the indenture. These events do not constitute an event of default that accelerates the bonds. As a result, the maturities are presented under the original repayment terms. Texas Student Housing Corporation - The Ridge at North Texas The long -term debt activity of the Ridge at North Texas is as follows: 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, 2013, are as follows and have not been adjusted for the default of the bonds. Under the original terms of the Indenture, a total of $645,000 in principal and $1,976,793 in interest is due in fiscal 2013. The total interest to be paid will depend on the ultimate maturities of the bonds. Year Ending August 31, 2013 Principal $ 27,685,000 55 Interest $ 21,609,085 Total $ 49,294,085 Amounts Beginning Ending Due Within Balance Increases Decreases Balance One Year Revenue Bonds: 2001A Bonds $ 25,130,000 $ - $ 685,000 $ 24,445,000 $ 735,000 2001B Bonds 3,240,000 - - 3,240,000 - Trustee Fee 5,000 - - 5,000 - Payable Less discounts ( 672,324) - ( 37,485 634,839) { 37,485) Total $ 27,702,676 $ - $ 647,515 $ 27,055,161 $ 697,515 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, 2013, are as follows and have not been adjusted for the default of the bonds. Under the original terms of the Indenture, a total of $645,000 in principal and $1,976,793 in interest is due in fiscal 2013. The total interest to be paid will depend on the ultimate maturities of the bonds. Year Ending August 31, 2013 Principal $ 27,685,000 55 Interest $ 21,609,085 Total $ 49,294,085 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 $352,169 relates to the collection of the entire amount due on eight Ductbank leases as follows: One 25 -year lease with AT &T local network services, five 20, 25 and 30 -year leases with Verizon Southwest, one 5 -year lease with MCI Metro and one 5 -year lease with L3 Communications for use of the Town's Ductbank. 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 for Westlake Academy. The disbursement of funds received under these programs generally requires compliance with terms and conditions specified in the grant agreements and are subject to audit by the grantor agencies. Any unallowed disbursement resulting from such audits becomes a liability of the Town. In the opinion of the Town management, no material refunds will be required as a result of unallowed disbursements (if any) by the grantor agencies. Sources of federal and state program revenues for the year ended September 30, 2013, were as follows: Source Federal program revenues: U. S. Department of Education - Passed through State Department of Education Total federal program revenues: State program revenues: State Department of Education 56 Westlake Academy Total $ 81,958 $ 81,958 $ 81,958 $ 81,958 $ 4,696,540 $ 4,696,540 Interfund Balances and Transactions Interfund receivables and payables at September 30, 2013, were as follows: Due from Due to Other Funds Other Funds General fund: 4B Economic Development Corporation fund Visitors Association fund: Economic Development fund Economic Development fund: Visitors Association fund 4B Economic Development Corporation fund: General Fund $ 165,140 $ - 41,207 41,207 - - 165.140 $ 206,347 $ 206,347 The 4B Economic Development Corporation fund (4B) amount of $165,140 payable to the General Fund is related to debt service payment reimbursement. The $41,270 payable to the Economic Development fund from the Visitors Association fund is related to a portion of hotel /motel tax from an economic development agreement with a business. Interfund transfers between the primary government's funds consisted of: Primary Government General fund: Westlake Academy Expansion Visitors Association fund Economic Development fund Debt Service fund Utility fund General maintenance Visitors Association fund: General fund Debt service fund Debt Service fund: General fund Visitors Association fund 4B Economic Development Corporation fund Economic Development fund: General fund 4B Economic Development Corporation fund: Debt Service fund Westlake Academy Expansion: General fund Utility fund: General fund Utility PCM fund Totals 57 Transfers To Funds 35,758 4,634 500,000 550,000 9,019 182,143 1,272,568 36,398 Transfers From Funds $ 36,398 9,019 14,409 550,000 4,634 182,143 1,272,568 35,758 14,409 500,000 50,000 50,000 $ 2,654,929 $ 2,654,929 Inter -fund transfers are reported in the governmental funds and proprietary fund financial statements. In the government -wide statements, inter -fund transfers are eliminated within the governmental activities column and business -type column, as appropriate. Transfers are used to (1) move revenues collected in the special revenue funds to finance various programs in accordance with budgetary authorizations, (2) move receipts restricted for debt service from the funds collecting the receipts to the Debt Service fund as debt service payments become due, (3) reimburse one fund for services provided to another fund, (4) move unrestricted General fund revenues to Capital Project fund as determined by the Council for capital projects, and (5) transfer payment for economic development agreements to the Economic Development fund. Receivables Water Purchase and Wastewater Treatment Contracts The Town has a contract with the City of Fort Worth, Texas, to purchase water. Under the contract, the Town may obtain from the City of Fort Worth, a supply of potable water at a reasonable rate based on water usage. The rate charges are subject to minimum annual contract payments. Water expense for the year ended September 30, 2013 was $965,192. IV. OTHER INFORMATION Retirement Plan Plan Description The Town provides pension benefits for all of its eligible employees through a non - traditional, joint contributory, hybrid defined benefit plan in the statewide Texas Municipal Retirement System (TMRS), an agent multiple - employer public employee retirement system. The plan provisions that have been adopted by the Town are within the options available in the governing state statutes of TMRS. 58 Governmental Funds Enterprise Funds Debt Economic Westlake Visitors Westlake Service Development 4B Utility Cemetery General Association Academv Fund Fund Corporation Fund Fund Total Receivables: Sales tax $ 441,067 $ $ $ - $ 54,355 $ 165,140 $ $ $ 660,562 Property tax 2,615 221 2,836 Othertaxes 12,243 61,165 73,408 Franchise fees 189,140 - 189,140 Accounts 28,728 843,221 116 872,065 Other 40,109 - 242,095 - - - - 282,204 Gross receivables 713,902 61,165 242,095 221 54,355 165,140 843,221 116 2,080,215 Less: Allowance for uncollectibles 8,066 - 55 - 8,121 Net total receivables $ 705,836 $ 61,165 $ 242,095 $ 166 $ 54,355 $ 165,140 $ 843,221 $ 116 $ 2,072,094 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, 2013 was $965,192. IV. OTHER INFORMATION Retirement Plan Plan Description The Town provides pension benefits for all of its eligible employees through a non - traditional, joint contributory, hybrid defined benefit plan in the statewide Texas Municipal Retirement System (TMRS), an agent multiple - employer public employee retirement system. The plan provisions that have been adopted by the Town are within the options available in the governing state statutes of TMRS. 58 TMRS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information (RSI) for TMRS; the report also provides detailed explanations of the contributions, benefits and actuarial methods and assumptions used by the System. This report may be obtained from TMRS' website at www.TMRS.com. The plan provisions are adopted by the governing body of the Town, within the options available in the state statutes governing TMRS. Plan provisions for the Town were as follows: Contributions Under the state law governing TMRS, the contribution rate for each town is determined annually by the actuary, using the Projected Unit Credit actuarial cost method. This rate consists of the normal cost contribution rate and the prior service cost contribution rate, which is calculated to be a level percent of payroll from year to year. The normal cost contribution rate finances the portion of an active member's projected benefit allocated annually; the prior service contribution rate amortizes the unfunded (overfunded) actuarial liability (asset) over the applicable period for that city. Both the normal cost and prior service contribution rates include recognition of the projected impact of annually repeating benefits, such as Updated Service Credits and Annuity Increases. The Town contributes to the TMRS Plan at an actuarially determined rate. Both the employees and the Town make contributions monthly. Since the Town needs to know its contribution rate in advance for budgetary purposes, there is a one -year delay between the actuarial valuation that serves as the basis for the rate and the calendar year when the rate goes into effect. Accounting Annual Actual Percentage Net Year Pension Contribution of APC Pension Ending Cost (APC) Made Contributed Obliption 09/30/11 151,868 151,868 100% 09/30/12 132,882 132,882 100% 09/30/13 135,813 135,813 100% The required contribution rates for fiscal year 2013 were determined as part of the December 31, 2010 and 2011 actuarial valuations. Additional information as of the latest actuarial valuation, December 31, 2012, also follows: 59 Plan Year 2012 Plan Year 2013 Employee deposit rate 7.0% 7.0% Matching ratio (town to employee) 2 to 1 2 to 1 Years required for vesting 5 5 Service retirement eligibility (expressed as age /years of service) 60/5,0/20 60/5,0/20 Updated service credit 100% repeating, 100% repeating, transfers transfers Annuity increase (to retirees) 0% of CPI 0% of CPI repeating repeating Contributions Under the state law governing TMRS, the contribution rate for each town is determined annually by the actuary, using the Projected Unit Credit actuarial cost method. This rate consists of the normal cost contribution rate and the prior service cost contribution rate, which is calculated to be a level percent of payroll from year to year. The normal cost contribution rate finances the portion of an active member's projected benefit allocated annually; the prior service contribution rate amortizes the unfunded (overfunded) actuarial liability (asset) over the applicable period for that city. Both the normal cost and prior service contribution rates include recognition of the projected impact of annually repeating benefits, such as Updated Service Credits and Annuity Increases. The Town contributes to the TMRS Plan at an actuarially determined rate. Both the employees and the Town make contributions monthly. Since the Town needs to know its contribution rate in advance for budgetary purposes, there is a one -year delay between the actuarial valuation that serves as the basis for the rate and the calendar year when the rate goes into effect. Accounting Annual Actual Percentage Net Year Pension Contribution of APC Pension Ending Cost (APC) Made Contributed Obliption 09/30/11 151,868 151,868 100% 09/30/12 132,882 132,882 100% 09/30/13 135,813 135,813 100% The required contribution rates for fiscal year 2013 were determined as part of the December 31, 2010 and 2011 actuarial valuations. Additional information as of the latest actuarial valuation, December 31, 2012, also follows: 59 Valuation Date Actuarial Cost Method Amortization Method GASB 25 Equivalent Single Amortization Period Amortization Period for new Gains /Losses Asset Valuation Method Actuarial Assumptions: Investment Rate of Return* Projected Salary Increases * * Includes Inflation at Cost -of- Living Adjustments 12/31/10 Projected Unit Credit Level percent of payroll 21.6 years; closed period 25 years 10 -year Smoothed Market 7.0% Varies by age and service 3.0% 0.0% 12/31/11 Projected Unit Credit Level percent of payroll 21.3 years; closed period 25 years 10 -year Smoothed Market 7.0% Varies by age and service 3.0% 0.0% 12/31/12 Projected Unit Credit Level percent of payroll 20.9 years closed period 25 years 10 -year Smoothed Market 7.0% Varies by age and service 3.0% 0.0% The funded status as of December 31, 2012, under the actuarial valuation, is presented as follows: Actuarial Actuarial Valuation Value of Date Assets Unfunded Actuarial Actuarial Accrued Funded Accrued Covered Liability Ratio Liability Payroll 12/31/2012 $ 2,611,474 $ 3,086,228 84.6% $ 474,754 $ 1,869,500 Unfunded Actuarial Accrued Liability as a Percentage of Covered Payroll 25.4% Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. Actuarial calculations are based on the benefits provided under the terms of the substantive plan in effect at the time of each valuation, and reflect a long -term perspective. Consistent with that perspective, actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. The schedule of funding progress, presented as Required Supplementary Information following the notes to the financial statements, present multi -year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability of benefits. 60 Other Postemployinent Benefits Supplemental Death Benefits Fund The Town also participates in the cost sharing multiple - employer defined benefit group term life insurance plan operated by the Texas Municipal Retirement System (TMRS) known as the Supplemental Death Benefits Fund (SDBF). The Town elected, by ordinance to provide group term life insurance coverage to both current and retired employees. The Town may terminate coverage under and discontinue participation in the SDBF by adopting an ordinance before November 1 of any year to be effective the following January 1. The death benefit for active employees provides a lump sum payment approximately equal to the employee's annual salary (calculated based on the employee's actual earnings, for the 12 -month period preceding the month of death); retired employees are insured for $7,500; this coverage is an "other postemployment benefit," or OPEB. Contributions The Town contributes to the SDBF at a contractually required rate as determined by an annual actuarial valuation. The rate is equal to the cost of providing one -year term life insurance. The funding policy for the SDBF program is to assure that adequate resources are available to meet all death benefit payments for the upcoming year; the intent is not to pre -fund retiree term life insurance during employees' entire careers. The city's contributions to the TMRS SDBF for the years ended 2013 and 2012 were $491 and $2,240, respectively. Schedule of Contribution Rates (RETIREE -only portion of the rate) Risk Manallement 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. 61 Annual Actual Plan/ Required Contribution Percentage Calendar Contribution Made of ARC Year (Rate) (Rate) Contributed 2011 0.00% 0.00% 100% 2012 0.00% 0.00% 100% 2013 0.00% 0.00% 100% Risk Manallement 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. 61 Contingent Liabilities Litigation Various claims and lawsuits are pending against the Town. In the opinion of Town management, after consultation with legal counsel, the potential loss on these claims and lawsuits will not materially affect the Town's financial position. Circle T Municipal Utility Districts The Town and Hillwood are currently in discussions regarding the debt for Municipal Utility District's (MUDs) #1 and #3 on the Circle T property in Westlake which is controlled by AIL Investments, L.P. As this property develops, Hillwood agreed to de -annex developed property from the MUDS in exchange for pro -rata payments on water and sewer infrastructure installed by the MUD at their inception. To date, two projects, Chrysler Financial and Deloitte University, have been or are being developed within these MUDs. Discussions regarding the Town's payment to AIL Investments, L.P. in exchange for de- annexation of these two tracks from the Circle T MUDs have taken place but have not come to a conclusion as to the settlement amounts. These discussions are ongoing until the Town receives full documentation that it determines is adequate to support the requested payments. The Town of Westlake holds full rights and privileges under the State granted Certificate of Convenience and Necessity (CCN) and can serve all water and sewer customers within these MUD boundaries regardless of the status of these negotiations. Subsequent Events At the council meeting on October 28, 2013, the Council adopted a resolution authorizing the issuance of general obligation refunding bonds. On January 9, 2014, the Town issued $1.91 million GO Refunding Bonds, Series 2014 for the purpose of refunding selected maturities of the Town's outstanding Certificates of Obligation, Series 2003 in order to lower the debt service requirements. Total savings over the next 18 years equals $197,294. The present value of such savings using the yield on the 2014 Bonds, is $141,287 or 7.515% of the principal retired. 62 TOWN OF WESTLAKE, TEXAS GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 EXPENDITURES Current General government and administration 1,933,240 General Fund 1,910,545 21,691 Public safety 1,965,406 1,981,085 1,967,584 Variance Cultural and recreational Budgeted Amounts 139,879 Favorable 25,955 Original Amended Actual (Unfavorable) REVENUES Capital Outlay 69,500 58,085 50,014 Taxes Total expenditures 4,632,105 4,633,193 4,574,742 Sales $ 2,490,000 $ 2,883,750 $ 3,061,948 $ 178,198 Property 1,183,514 1,225,000 1,236,978 11,978 Mixed beverages 32,750 49,000 39,727 ( 9,273) Franchise 664,925 643,950 734,935 90,985 Interest income 15,220 10,420 9,286 ( 1,134) Building permits and fees 476,150 719,860 969,735 249,875 Fines and penalties 560,000 560,000 695,167 135,167 Intergovernmental - 10,350 10,331 ( 19) Contributions from others - 11,094 11,094 - Other miscellaneous income 51,277 57,452 73,933 16,481 Total revenues 5,473,836 6,170,876 6,843,134 672,258 EXPENDITURES Current General government and administration 1,933,240 1,932,236 1,910,545 21,691 Public safety 1,965,406 1,981,085 1,967,584 13,501 Cultural and recreational 139,879 139,879 113,924 25,955 Public works 524,080 521,908 532,675 { 10,767) Capital Outlay 69,500 58,085 50,014 8,071 Total expenditures 4,632,105 4,633,193 4,574,742 58,451 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 841,731 1,537,683 2,268,392 730,709 OTHER FINANCING SOURCES (USES) Transfers in 596,519 632,917 609,826 ( 23,091) Transfers out [ 244,319 1149,817) ( 1,090,392) 59,425 Total other financing sources (uses) ( 2,347,8, 00) ( 516,900) [ 480,566) 36,334 NET CHANGE IN FUND BALANCE ( 1,506,069) 1,020,783 1,787,826 767,043 FUND BALANCE, BEGINNING 5,263,805 5,263,805 _ 5,263,805 - FUND BALANCE, ENDING $_3,757,736 $_ 6,284,588 $ 7,051,631 $ 767,043 63 TOWN OF WESTLAKE, TEXAS ECONOMIC DEVELOPMENT FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 REVENUES Taxes Sales Hotel occupancy Total revenues EXPENDITURES Economic Development Total expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Total other financing sources (uses) NET CHANGE IN FUND BALANCE FUND BALANCE, BEGINNING FUND BALANCE, ENDING Variance Budgeted Amounts Favorable Original Amended Actual (Unfavorable) $ 180,000 $ 210,000 $ 219,600 $ 9,600 41,207 41,207 180,000 210,000 260,807 50,807 215,758 245,758 296,565 215,758 245,758 296,565 ( 35,758) ( 35,758) ( 35,758) 35,758 35,758 66 ( 50,807) ( 50,807) 35,758 35,758 - 35,758 35,758 - TOWN OF WESTLAKE, TEXAS 4B ECONOMIC DEVELOPMENT CORPORATION SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 68 Variance Budgeted_ Amounts Favorable Original Amended Actual (Unfavorable) REVENUES Taxes Sales $ 890,000 $ 1,031,250 $ 1,093,849 $ 62,599 Interest income 500 500 _ 335 ( 165) Total revenues 890,500 1,031,750 _1,094,184 62,434 EXPENDITURES General government " - Total expenditures - � - EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 890,500 1,031,750 1,094,184 62,434 OTHER FINANCING SOURCES (USES) Transfers out ( 920,230) ( 1,210,134) ( 1,272,56 ( 62,434) Total other financing sources (uses) 9 20,234) ( 1,210,134) ( 1,272,568 ( 62,434) NET CHANGE IN FUND BALANCE ( 29,730) ( 178,384) ( 178,384) - FUND BALANCE, BEGINNING _ 178,384 178,384 178,384 FUND BALANCE, ENDING $ 148,654 $ - _ _ $_ - $ 68 TOWN OF WESTLAKE, TEXAS NOTES TO REQUIRED SUPPLEMENTARY INFORMATION SEPTEMBER 30, 2013 (Unaudited) BUDGETARY INFORMATION - The Town follows these procedures annually in establishing the budgetary data reflected in the budgetary comparison schedules: The Town Manager submits to the Town Council a proposed budget for the fiscal year commencing the following October 1. The budget includes proposed expenditures and the means of financing them. 2. Prior to October 1, the budget is legally adopted through passage of an ordinance. This budget is reported as the Original Budget in the budgetary comparison schedules. 3. During the fiscal year, changes to the adopted budget may be authorized, as follows: a) Items requiring Town Council action - appropriation of fund balance reserves; transfers of appropriations between funds; new inter -fund loans or advances; and creation of new capital projects or increases to existing capital projects. b) Items delegated to the Town Manager — appropriation balances from an expenditure account to another within a single fund 4. Annual budgets are legally adopted and amended as required for the general, special revenue and debt service funds. Project length budgets are adopted for the capital projects funds. All budgets are adopted on a basis consistent with generally accepting accounting principles. Budgets are adopted for the proprietary funds annually only as a management tool. There are no legally mandated budgetary constraints for the proprietary funds. 5. Budget amounts are reflected after all authorized amendments and revisions. This budget is reported as the Final Budget in the budgetary comparison schedules. The appropriated budget is prepared by fund, function and department. The Town's management may make transfers of appropriations within a fund. Transfers of appropriations between funds require the approval of the Town Council. The legal level of budgetary control is the fund level. The Town Council made several supplementary budget appropriations during the year. Encumbrances represent commitments related to unperformed contracts for goods or services. Encumbrance accounting under which purchase orders, contracts and other commitments for the expenditure of resources are recoded to reserve that portion of the applicable appropriation, is utilized in the governmental funds. Encumbrances lapse at year -end and do not constitute expenditures or liabilities because the commitments must be re- appropriated and honored during the subsequent year. Expenditures exceeded appropriations in the public works department of the General Fund as well as in visitor services in the Visitors Association Fund and economic development in the Economic Development Fund for the year. These deficits were covered by additional collections of revenue, unspent budget in other functions and available fund balance. In addition, transfers out exceeded appropriations in the 4B Economic Development Corporation Fund. This excess was covered by additional revenue and available fund balance. 70 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. 72-77 Revenue Capacity These schedules contains information to help the reader assess the Town's most significant local revenue sources. Although sales taxes are the Town's most significant local revenue source, information about principal revenue payers is confidential under Texas statutes, and; therefore, not disclosed. Trend information about sales tax revenue is provided in Table 9. 78-82 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. 83-85 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. 86-87 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. 88-90 Sources: Unless otherwise noted, the information in these schedules is derived from annual financial reports for the relevant year. 'fable 10 TOWN OF WESTLAKE, TEXAS RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS 35 30 25 20 N 15 1= 2 10 G 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 ■ Serlesl ■ Serles2 83 General Honded Debt Outstanding Percentage c General Certificates of Actual Fiscal Obligation of 'Taxable Per Year Bonds Obligation "Dotal Sales i'�a L €ta 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 2008 9,850,000 11,375,000 21,225,000 11.82% 27,038 2009 9,735,000 10,975,000 20,710,000 11.30% 25,791 2010 9,630,000 10,555,000 20,185,000 10.65% 23,831 2011 9,515,000 12,210,000 21,725,000 9.43% 21,900 2012 16,770,000 4,877,000 21,647,000 11.84% 20,369 2013 16,590,000 12,596,800 29,186,800 13.34% 26,327 Notes: Details regarding; the'I'own's outstanding debt can be found in the notes to the financial statements. There was no debt issued until fiscal year 2002. See Table 13 for population data. 35 30 25 20 N 15 1= 2 10 G 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 ■ Serlesl ■ Serles2 83 Table 11 TOWN OF WESTLAKE, TEXAS RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS (Unaudited) 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 13 for personal income and population data. 84 Business -Type Governmental Activities Activities General Certificates Certificates Other Total Percentage Fiscal Obligation of Capital of Contractual Primary of Personal Per Year Bonds Obligation Leases Loans Obligation Obligations Government Income Capita 2004 12,400,000 6,027,387 18,427,387 45% 56,181 2005 18,810,000 5,980,921 24,790,921 55% 69,834 2006 18,460,000 5,878,381 24,338,381 27% 34,869 2007 7,365,000 11,755,000 23,000 5,822,299 24,965,299 27% 35,513 2008 9,850,000 11,375,000 15,264 5,763,022 27,003,286 23% 34,399 2009 9,735,000 10,975,000 46,559 5,734,191 26,490,750 22% 32,990 2010 9,630,000 10,555,000 - 5,658,888 25,843,888 25% 30,512 2011 9,515,000 12,210,000 50,000 5,580,380 27,355,380 22% 27,576 2012 16,770,000 4,877,000 34,075 - 5,498,668 27,179,743 20% 25,576 2013 16,590,000 12,596,800 17,420 1,025,200 5,412,149 35,641,569 24% 32,149 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 13 for personal income and population data. 84 Table 12 TOWN OF WESTLAKE, TEXAS DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT AS OF SEPTEMBER 30, 2013 (Unaudited) Source: Texas Municipal Report prepared by employees of the Municipal Advisory Council of Texas ( "MAC ") Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the Town. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the Town of Westlake. This process recognized that, when considering the Town's ability to issue and repay long -term debt, the entire debt burden borne by the resident and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. (1) The percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of the entity's taxable assessed value that is within the Town's boundaries and dividing it by the entities' total taxable assessed value. 85 Overlappimg Amount of Taxing Body Debt Outstanding As of Percent (1) Amount Carroll ISD $ 236,000,353 9/30/2013 5.41% $ 12,767,619 Denton County 583,697,026 9/30/2013 0.02% 116,739 Keller ISD 654,597,837 9/30/2013 4.65% 30,438,799 Northwest ISD 609,066,922 9/30/2013 1.08% 6,577,923 Tarrant County 313,450,474 9/30/2013 0.79% 2,476,259 Tarrant County College District 26,576,548 9/30/2013 0.79% 209,955 Tarrant County Hospital District 26,315,626 9/30/2013 0.79% 207,893 Trophy Club MUD #1 5,995,998 9/30/2013 19.70% 1,181.212 Total Overlapping Debt 53,976,399 Town of Westlake Outstanding Debt 22,753,000 Total Direct & Overlapping Debt $ 76,729,399 Source: Texas Municipal Report prepared by employees of the Municipal Advisory Council of Texas ( "MAC ") Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the Town. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the Town of Westlake. This process recognized that, when considering the Town's ability to issue and repay long -term debt, the entire debt burden borne by the resident and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. (1) The percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of the entity's taxable assessed value that is within the Town's boundaries and dividing it by the entities' total taxable assessed value. 85 Sources; Population for 2000 is from the 2000 census. Fiscal Years 2001 through 2003 are estimated. 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 sire. 2010 Census shows median household income at $250,000. Due to the influx of residenls coming to Westlake Academy, surveys have shown that there are approximately 1.28 school -age children in each household; therefore, we will use a 3.23 average household size to calculate population. Tarrant County Unemployment Rate information taken from Texas Workforce Commission, American Community Survey (ACS) USA.com - Per Capita Income source North Central Texas Council of Governments /US Census 2010 Estimated Population 1200 Table 13 TOWN OF WESTLAKE, TEXAS 785 803 84'7 —" DEMOGRAPHIC AND ECONOMIC STATISTICS ya8 T13, 600 LAST TEN FISCAL YEARS 400 311E (Unaudited) 200 Per Capita Tarrant County Calendar Estimated Personal Personal Unemployment Year Polrulr►tlou I►►come Income R to 2004 328 41,027,552 $ 125,084 5.3% 2005 355 45,292,916 127,586 5.1% 2006 698 90,835,901 130,137 4.6% 2007 703 93,316,319 132,740 4.3% 2008 785 115,891,905 147,633 5.1% 2009 803 120,920,285 150,586 8.1% 2010 847 102,852,057 121,431 8.1% 2011 992 126,678,400 127,700 7.9% 2012 1,063 138,423,531 130,254 6.2% 2013 1,109 147,292,890 132,859 6.0% Sources; Population for 2000 is from the 2000 census. Fiscal Years 2001 through 2003 are estimated. 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 sire. 2010 Census shows median household income at $250,000. Due to the influx of residenls coming to Westlake Academy, surveys have shown that there are approximately 1.28 school -age children in each household; therefore, we will use a 3.23 average household size to calculate population. Tarrant County Unemployment Rate information taken from Texas Workforce Commission, American Community Survey (ACS) USA.com - Per Capita Income source North Central Texas Council of Governments /US Census 2010 Estimated Population 1200 1000 785 803 84'7 —" 800 ya8 T13, 600 400 311E Hffl 200 0 -- 2004 2005 2006 2007 2008 2009 2010 2011 86 1.,Ilfi3 1,10 r< 2012 2013 Plifkl�ll PATTiLLO, BROWN & HILL, CERTIFIED PUBLIC ACCOUNTANTS NBUSINESS CONSULTANTS INDEPENDENT AUDITOR'S 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 To the IIonarable Mayor and Members of the Town Council Town of Westlake, Texas 3 Village Circle, Suite 202 Westlake, Texas 76262 We have audited, in accordance with the 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, the financial statements of the governmental activities, the business -type activities, the aggregate discretely presented component units, and each major fund of the Town of Westlake, Texas, as of and for the year ended September 30, 2013, and the related notes to the financial statements, which collectively comprise the Town of Westlake, Texas' basic Financial statements, and have issued our report thereon dated February 14, 2014. Internal Control Over Financial Renortint? In planning and performing our audit of the financial statements, we considered the Town of Westlake, Texas' internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances 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 of Westlake, Texas' internal control. Accordingly, we do not express an opinion on the effectiveness of the Town of Westlake, Texas' internal control. A deficiency in internal control 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 and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any 91 115 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 ■ ALBUQUERQUE, NM (505) 266 -5904 deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Town of Westlake, Texas' financial statements are free from 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. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. February 14, 2014 92 Page 1 of 3 estlake Town Council TYPE OF ACTION Regular Meeting - Action Item Westlake Town Council Meeting Monday, February 24, 2014 TOPIC: Consideration of a Resolution Approving an Economic Development Agreement between the Town of Westlake and the Marriott Solana Hotel. STAFF CONTACT: Debbie Piper, Finance Director DECISION POINTS Start Date Completion Date Timeframe: February 24, 2014 September 26, 2014 Funding: Amount - $60,000 Status- Funded Source- Visitors Association Fund Decision Alignment VVM Perspective Desired Outcome Service Excellence Financial Stewardship FS.Sustain Fiscal Health Strategic Issue Outcome Strategy Staff Action Fiscal Stewardship & Organizational Effectiveness 6. Maximize the service provision level to our customers through the use of the shared services model, public/private partnerships, and implementation of innovative inter - governmental agreements. SA 06.1: Seek Partnerships Strategy Map or VVM Connection Strategic Issue Connection Page 2 of 3 EXECUTIVE SUMMARY In February 2013, an economic development agreement with the Marriott Hotel pertaining to the “Shuttle Bus Transportation Cost” was approved. Ordinarily, this program was comprised of two components – the transportation and the incentive sections. During the February negotiations, we were in the process of reworking the “Incentive” portion of the agreement ; therefore, only the Transportation section was approved. Due to transitions in both the Manager and the Finance personnel at the Hotel, no action was taken regarding the “Incentive” portion until September of 2013. At that time, an agreement was renegotiated and put into place. In an effort to bring both agreements into alignment, we are proposing to end this bifurcated agreement on the same date, and consolidate the partnership making this a seven (7) month agreement. • Shuttle Bus Transportation Cost Participation. An amount of $80,000 was approved in February, 2013 for the Town’s participation in a portion of the operating cost of Marriott providing shuttle bus service to its guests. Marriott Solana management has shared with Council in previous meetings the importance of the shuttle bus service to maintain its comp etitive position in the local market, particularly competing with the Hilton at Southlake Town Center and the Marriott at the Texas World Speedway. They believe that this shuttle bus service is essential for this property to succeed; both in terms of maintaining existing business bookings and in terms of growing its income stream by marketing to new businesses. In addition to providing shuttle services to and from DFW airport for Marriott Solana guests, this bus service also provides hotel guests with transportation to area shopping/entertainment venues (Southlake Town Center) and corporate training centers. We have adopted a budget of $80,000 for FY 13-14 for transportation; therefore, based on timing, this agreement will be for $60,000 representing the last three (3) quarters of the fiscal year. The second portion of the bifurcated agreement is related to the Group Business Incentive Program which we approved in September, 2013. A summary is as follows: • Group Business Incentive Program. This portion of the agreement is $40,000 and was adopted in the FY 13-14 budget. The program is structured as follows: o Proposed group business shall book a minimum of $10,000 in room night revenue. o A maximum of $5,000 is available to each group; however, the amount provided is based on the following process: • 10% of the room night revenue calculates the amount allowed, up to a maximum of $5,000. • The Town of Westlake shall receive sponsor recognition in all correspondence and at the meeting/convention in an appropriate manner. It is important to recognize that, under State law, this is a grant of public dollars for economic development purposes. As such, this agreement also includes “claw back” provisions that, should the Town determine that the Marriott has not spent these grant funds for their intended purpose, the Town can require that those funds be repaid with interest. Page 3 of 3 The Town receives 7% of the 13% hotel/motel occupancy tax allowed by State law. The FY 13-14 Budget contains an estimate that the Town will receive $700,000 in the current fiscal year in the Visitors Association Fund. As of the first quarter of this fiscal year, we are on target to reach this amount. This revenue represents 3% of the total Town municipal revenue stream and is derived from the Town’s only hotel, the Marriott Solana, as well as a small portion from Deloitte University (8%). For that reason, it is important for the Town to take a strategic approach in maintaining and possibly growing this funding stream. In the past, the Town has utilized hotel/motel occupancy tax funds for many important programs including funding costs related to special events such as Arbor Day, Decoration Day, as well as the MasterWorks outdoor concert series at Solana. Additionally, because Westlake has broader stat utory authority under State law than most cities to spend hotel/motel occupancy tax funds for any municipal purpose, the Town has used these funds to cover costs of various municipal operational costs and capital projects (an example would be payment of a portion of the debt service for Westlake Academy related bonds). The Town Council adopted an economic development policy in 2006 (Resolution 06-19). This proposed agreement comports to that policy. Further, this economic development agreement fits with the Town’s Adopted Strategic Plan Vision Points. ORGANIZATIONAL HISTORY/RECOMMENDATION Recommend adoption of the resolution approving this economic development grant agreement ATTACHMENTS Resolution approving this Economic Development Grant Agreement between the Town and the Marriott Solana with the Agreement attached as “Schedule A”. Resolution 14-06 Page 1 of 2 TOWN OF WESTLAKE RESOLUTION 14-06 A RESOLUTION BY THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS, APPROVING AN ECONOMIC DEVELOPMENT AGREEMENT WITH THE MARRIOTT SOLANA. WHEREAS, the Westlake Town Council, in its current Strategic Plan, has identified “Service Excellence” as a Vision Point for that Strategic Plan as well as Financial Stewardship as a Strategic Issue that must be addressed to move the Town towards this Vision Point; and, WHEREAS, the Town of Westlake sales and use taxes are an important revenue source to support its general operations; and, WHEREAS, the Town Council desires to have new and existing businesses that maintain and grow their sales and use tax streams, which in turn, enhances the Town’s financial position and sustainability per its Strategic Plan; and WHEREAS, the Town Council acknowledges t hat the Town’s Visitors Association Fund is a key component of its financial structure and that an economic development grant to the Marriott Solana Hotel will help solidify and maintain that structure; and, WHEREAS, Town has an economic development policy adopted by Resolution 06 -19 and that this proposed economic development agreement with the Marriott Solana meets those policy guidelines and meets the requirements of State law for municipalities to grant 380 economic development grants to businesses located in their boundaries; and WHEREAS, the Town Council finds that the passage of this Resolution is in the best interest of the citizens of Westlake. NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS: SECTION 1: THAT, all matters stated in the Recitals hereinabove are found to be true and correct and are incorporated herein by reference as if copied in their entirety. SECTION 2: THAT, the Town Council of the Town of Westlake, Texas, hereby approves the Economic Development Grant Agreement with the Marriott Solana attached hereto as Exhibit “A”; and further authorizes the Town Manager to execute said agreement on behalf of the Town of Westlake. Resolution 14-06 Page 2 of 2 SECTION 3: If any portion of this Resolution shall, for any reason, be declared invalid by any court of competent jurisdiction, such invalidity shall not affect the remaining provisions hereof and the Council hereby determines that it would have adopted this Resolution without the invalid provision. SECTION 4: That this resolution shall become effective from and after its date of passage. PASSED AND APPROVED ON THIS 24TH DAY OF FEBRUARY, 2014. _____________________________ Laura Wheat, Mayor ATTEST: ________________________________ ______________________________ Kelly Edwards, Town Secretary Thomas E. Brymer, Town Manager APPROVED AS TO FORM: ________________________________ L Stanton Lowry, Town Attorney TOWN OF WESTLAKE RESOLUTION NO. 06-19 A RESOLUTION OF THE BOARD OF ALDERMEN OF THE TOWN OF WESTLAKE, TEXAS,ADOPTING AN ECONOMIC DEVELOPMENT INCENTIVE POLICY. WHEREAS, the Town of Westlake, Texas, relies upon the generation of Sales and Use Taxes for basic city operations; and WHEREAS, the Town of Westlakeaggressively pursues sales tax producing enterprises that meet the Town's high development standards; and WHEREAS, Chapter 312 of the Texas Tax Code requires that guidelines and criteria be adopted by the Board of Aldermen before entering into any Economic Development Agreement that provides reimbursement of taxes; and WHEREAS, Chapter 380 of the Texas Local Government Code allows the Board of Aldermen to create policies for economic development and any related grants or incentives. NOW, THEREFORE,BE IT RESOLVEDBY THE BOARD OF ALDERMEN OF THE TOWN OF WESTLAKE, TEXAS: SECTION 1: The above findings are hereby found to be true and correct and are incorporated herein in its entirety. SECTION 2: The Board of Aldermen of the Town of Westlake, Texas, adopts the attached Exhibit A, Town of Westlake EconomicDevelopmentIncentive Policy and directs the Town Manager to immediately submit an EconomicDevelopmentAgreement to the Board of Aldermen consistent with the terms of this policy. PASSED AND APPROVED ON THIS 8th DAY OF MAY, 2006. ATTEST: Scott Brad fey, Mayor T an Dwinnell, Tf)-,nSecretary Trent O. Petty, T,,4dn Manager APPRO F RM: L- o o Attorney EXHIBIT A Town of Westlake EconomicDevelopment Incentive Policy Section I. General Purpose and Objectives The Town of Westlake, Texas, ("Town") is committed to the promotion and retention of high quality development in all parts of the Town as park of an overall effort to improve the quality of life for itsresidents. Since these objectives can be served, in part, by the expansion of its commercial business, retail, and mixed use base, the Town will, on a case-by-case basis, give consideration to providing tax abatements, economic development grants, loans, and other incentives (collectively referred to as "Incentives") as may be allowed by law as stimulation for selected economic development within the community. It is the policy of the Town that consideration will be provided in accordance with the criteria set forth in this document. Nothing within this policy shall imply or suggest that the Town is underany obligation to provideIncentives to any applicant. All applicants ("Applicants") for any Incentives shall be consideredon a case- by-case basis. Section II. Applicability This Economic Development Incentive Policy (the "Policy") establishes guidelines and criteria for Incentives as allowed for by the provisions of Chapter 312 of the Texas Tax Code, and other economic grants, loans, or incentives as authorized by Chapter 380 of the Texas LocalGovernment Code, the Development Corporation Act, Article 5190.6, Tex. Rev. Civ. Stat., Article III, Section 52-a of the Texas Constitution, and other applicable laws. Any Incentive approved by the Town's Board of Aldermen ("Board of Aldermen") pursuant to the Policy must be memorialized in an agreement to be executed and approved by the Town and applicant (the "Incentive Agreement"). Section III. Tax Abatement Criteria A. Any application for tax abatement shall be reviewed and approved or disapproved by the Board of Aldermen and, if applicable, consider the recommendations of the Westlake DevelopmentCorporation and/or the Westlake 4A Corporation. In general, the application will be considered based upon the following: The `value added' to the community by the Applicant's proposed project; The likelihood of the development of the proposed project without abatements; The comparison of the use of abatements versus the use of other potential incentives. 1 B. Specific considerations for approvingtax abatement applications will bebased upon the degree to which the proposed project: Furthers the goalsand objectives of the Town as expressed in the Town's Comprehensive Plan, Planned Development District Ordinances, and infrastructure plans; Impacts the Town's costs and ability to provide municipal services; Impacts the local environment, housing market, and availableinfrastructure; Offerspotential for long term payback in tax and/orother revenues for the Town's investment; Potentially stimulates other desirableeconomic development within the Town. C. Term of the Abatement — A tax abatement may be granted for a maximum of ten years. The term of the abatement may be granted for a lesser number of years depending upon the anticipated `value added' to the Town. Section IV. Value of the Project The amount of the Incentive will be determined by the Board of Aldermen based upon the merits of the economic development project(the "Project'), including, but not limited to, the factors referenced in paragraph III, B. (above) and the following specific economic considerations: total capital investment; added employment; generation of other tax revenues. Incentives may be granted only for the additional value of eligible property improvements described in the Project and listed in the executed tax abatement agreement. Targetthresholds are established as expected qualifying levels for abatement consideration as indicated in paragraphs A and B as follows: A. For New Businesses or Development - The Project must be reasonably expected to produce anadded value of five million dollars ($5,000,000) in real and personal property improvements within the Town of Westlake; or to create a minimum of 200 fall- time jobs, or to generate annual sales tax revenues to the Town of at least $100,000. B. For Expansion or Modernization of Existing Businesses or Development — The Project must be reasonably expected to produce anadded value of two million dollars 2,000,000) in real and personal property improvements within the Town, or to create a minimum of 100 full time jobs, or to generate additional annual sales tax revenues to the Town of at least$50,000. Section V. Inspection, Verification and Incentive Modification The terms of an Incentive Agreement shall include the Town's right to: 2 a) require the submission of an annual certification of compliance for the property receiving an Incentive; (b) conduct an on-site inspection of the project in each year during the life of the Incentive to verify compliance with the terms of the Agreement and the Policy; and (e) reduce or eliminate the Incentive if the applicant has failed to comply with the requirements of the Incentive Agreement. Section VI. Evaluation Uponcompletion of the Project, the Town shall no less than annually evaluate each Project receiving an abatement to insure compliance with the terms of the agreement. Any incidents of non-compliance will be reported to all affected taxing units. Section VII. Severability and Limitation In the event that any section, clause, sentence, paragraph or any part of this Policy shall, for anyreason, be adjudged by any court of competent jurisdiction to be invalid, such invalidity shall notaffect, impair, or invalidate the remainder of the guidelines and criteria in this Policy. Section VIII. Expiration and Modification This Policy is effective upon the date of its adoption and will remain in force for two years, at which time Incentive Agreements created pursuant to its provisions will be reviewed by the Board of Aldermen to determine whether the objectives of the Policy are being achieved. Based uponthat review, this Policy may be modified, renewed or eliminated. However, any Incentive Contracts created pursuant tothis Policy will remain in effect according to their respective terms without regard to any change to this Policy unless mutually agreed by the parties. Section IX. Economic Development Grants,Loans, and Other Incentives A. Any application for economicdevelopment grants, loans, and other incentives shall be reviewed and approved'or disapproved by the Board of Aldermen. In the review process, the Board of Aldermen will, if applicable, consider the recommendations of the Westlake DevelopmentCorporation and/or the Westlake 4A Corporation. Any such economic development grants, loans, and other incentives may come from any one or combination of the following: Grants or loans as authorizedby Chapter 380 of the Texas Local Government Code; The general Sales andUse taxes of the Town; Sales and Usetaxes collected pursuant to section 4A and/or 4B of Article 5190.6, Tex. Rev. Civ. Stat.; and/or 3 Any other lawful source of revenue of the Town including, butnot limited to, bond or other debt financing which further the purpose of economic development. B. To be eligible to apply and qualifyfor consideration of any grants, loans, and otherincentives under this Section, the applicantmust submit documentation, and enter into an Incentive Agreement, which indicates the specific details of the Project and compliance with the Policy. HABoyle-Lowry\Wcst Lak6w1-agreements41-agr econ dev inc policy.doc 4 Resolution 14-06 Page 1 of 10 ECONOMIC DEVELOPMENT PROGRAM AGREEMENT This ECONOMIC DEVELOPMENT PROGRAM AGREEMENT (“Agreement”) is entered into by and between the TOWN OF WESTLAKE, TEXAS (the “Town”), a Type-A general law municipal corporation organized under the laws o f the State of Texas, and MARRIOTT HOTEL SERVICES, INC. D/B/A DALLAS/FT.WORTH MARRIOTT SOLANA, (“Marriott:), a Hotel. The Town and Marriott are collectively referred to as the “Parties”. RECITALS The Town and Marriott hereby agree that the following statements are true and correct and constitute the basis upon which the Town and Marriott have entered into this Agreement: A. Marrio tt owns and operates a 294 (288 plus 6 suites) room, full-service hotel located at 5 Village Circle, Westlake, Texas, (the “Hotel”) The Hotel provides a valuable catalyst for visitors, tourism, and economic development to the Town. B. In order to increase visitors and tourism, and to maximize the economic benefits that the Hotel can bring to the Town, the Town and Marriott desire to enter into this Agreement. C. In accordance with Resolution No. 06-19, adopted by the Town Council on May 8, 2006, attached hereto as Exhibit “A” and hereby made a part of this Agreement for all purposes, the Town has established an economic development incentive policy and program pursuant to which the Town will, on a case-by-case basis, offer economic incentive packages autho rized by Chapter 380 of the Texas Local Government Code, Article III, Section 52-a of the Texas Constitution, and other applicable laws, that include monetary loans and grants of public money, as well as the provision of personnel and services of the Town, to businesses and entities that the Town Council determines will promote State or local economic development and stimulate business and commercial activity in the Town in return for verifiable commitments from such businesses or entities to cause specific infrastructure, employment and other public benefits to be made or invested in the Town (the “380 Program”). D. The Town Council has determined that by entering into this Agreement, the potential increase of visitors and tourism and economic benefits that will accrue to the Town under the terms and conditions of this Agreement are consistent with the Town’s economic development objectives and the 380 Program and will further the goals for positive economic growth, visitors and tourism in the Town. This Agreement is authorized by Chapter 380 of the Texas Local Government Code and the 380 Program. NOW, THEREFORE, in consideration of the mutual benefits and promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows: Resolution 14-06 Page 2 of 10 AGREEMENT 1. INCORPORATION OF RECITALS. The Town Council has found at a duly-called and legally-noticed public meeting through the adoption of Town Resolution No. 14-06 attached hereto as Exhibit “B” and hereby made a part of this Agreement for all purposes, and the Town and Marriott hereby agree, that the recitals set forth above are incorporated herein and true and correct and form the basis upon which the Parties have entered into this Agreement. 2. DEFINITIONS. In addition to terms defined in the body of this Agreement, the following terms shall have the definitions ascribed to them as follows: 380 Program has the meaning ascribed to it in Recital C. Affiliate means all entities, incorporated or otherwise, under common control with, controlled by or controlling Marriott . For purposes of this definition, “control” means fifty percent (50%) or more of the ownership determined by either value or vote. Program Grants means the annual allowable economic development grants paid (whether in one or multiple installments) by the Town to Marriott in accordance with this Agreement and as part of the 380 Program. Program Source Funds means an amount of Town funds legally available for inclusion in a Program Grant that is payable to Marriott in a given Program Year, which shall be derived from hotel occupancy taxes generated by the Hotel and received by the Town pursuant to Chapter 351 of the Texas Tax Code, or other legally available funds of the Town. Program Year means the Town’s fiscal year (i.e. October 1 through September 30th) in which the Town is obligated pursuant to this Agreement to pay Marriott a Program Grant, beginning with the first fiscal year following the execution of this Agreement. Quarterly Report has the meaning ascribed to it in Section 4.2. Records have the meaning ascribed to it in Section 4.3. Term has the meaning ascribed to it in Section 3. Town of Westlake Hotel Support Program has the meaning ascribed to it in Section 4.1. Resolution 14-06 Page 3 of 10 3. TERM. This Agreement shall be effective as of the date of execution by the Parties (the “Effective Date”) and, unless terminated earlier in accordance with this Agreement, shall expire on September 26, 2014 in conjunction with the “Group Booking Incentive” agreement executed on September 26, 2013. 4. TOWN AND MARRIOTT’S OBLIGATIONS AND COMMITMENTS. 4.1. Town of Westlake Hotel Support Program The total amount to be granted by the Town to Marriott under the terms of this Agreement for the Town of Westlake Hotel Support Program shall not exceed $60,000 with said Town of Westlake Hotel Support Program, consisting of: (a.) Transportation Costs, for which a total sum of $60,000 shall be provided by the Town under this Agreement to cover a portion of the operating cost for bus transportation services provided by the Marriott for guests of the Hotel. Funds disbursed by the Town under this component of the Town’s Hotel Support Program shall be made at the end of each Town fiscal year quarter following submission by Marriott, and acceptance by the Town, of the Quarterly Report for the preceding quarter. The purpose of this component of the Town’s Hotel Support Program is to enhance the Marriott’s ability to increase room nights and retain exist ing room nights at the Hotel (as reported in Section 4.2 below), thus increasing economic development through tourism and business development activity in the Town. At all times during the term, the name “Westlake, Texas” shall be visibly reflected and marked on both sides of any shuttle buses or vehicles used by the Hotel. 4.2. Reports and Filings. On a quarterly basis during the Term, Marriott shall submit a written report to the Town specifically delineating its compliance with this Agreement (the “Quarterly Report”). The Quarterly Report shall be received by the Town Manager no later than thirty (30) days from the end of each quarter. Said Quarterly Report will contain, as a minimum, the following performance measure information for the reporting period in order for the Town to measure the effectiveness of its investment in this grant of public funds to Marriott for this Hotel: • Total funds paid to date aggregate under this Agreement during the contract term to Marriott for the Town’s Hotel Support Program described in Section 4.1 of this Agreement • Total funds spent to date by Marriott for the activities and purposes set out in Section 4.1(a) of this Agreement • Increases in average daily occupancy at the Hotel Resolution 14-06 Page 4 of 10 • Decreases in average daily occupancy at the Hotel • Number of room nights generated by new group bookings at the Hotel • Number of room nights generated by repeat group business bookings at the Hotel • Average number of bus transportation trips daily to DFW Airport for guests at the Hotel • Average number of bus transportation trips daily to off-premise meeting locations for guests at the Hotel • Average number of bus transportation trips daily to other off-premise locations (entertainment, shopping, etc) for guests at the Hotel • Operating costs incurred by the Hotel during the quarter for shuttle bus transportation services • The number of new group bookings made for the Hotel during the reporting period and the number of repeat group business bookings made for the Hotel during the reporting period. • A brief description of marketing/sales efforts made during the reporting period for the Hotel including: o the number and type of new group sales prospects identified, targeted, and group sales closed by Marriott sales staff during the reporting period o the number and type of new group sales made by contacts from outside the Hotel Marriott 4.3. Audits. Per the requirements of State law and the Town ordinance establishing the Town’s hotel-motel occupancy tax, the Town will have the right throughout the Term to audit any and all financial and business records of Marriott that relate to the performance of this Agreement and any other documents necessary to evaluate Marriott ’s compliance with this Agreement or with the goals set forth in this Agreement, including, but not limited to construction documents and invoices (collectively “Records”). Marriott shall make all Records available to the Town at the Hotel or at another location in the Town acceptable to both parties following reasonable advance notice by the Town and shall otherwise cooperate fully with the Town during any audit. 5. DEFAULT, TERMINATION AND FAILURE BY MARRIOTT TO MEET VARIOUS DEADLINES AND COMMITMENTS. 5.1. Continuous Operation. Following the Completion Date, if Marriott fails to continuously operate a full-service hotel at 5 Village Circle, Westlake, Texas, 76262, the Town shall have the right to terminate this Agreement by providing written notice to Marriott without further obligation to Marriott hereunder. Resolution 14-06 Page 5 of 10 5.2. Failure to Pay Town Taxes or Fees. An event of default shall occur under this Agreement if any legally-imposed Town taxes or fees owed on, or generated by, the hotel become delinquent and Marriott or the Affiliate does not either pay such taxes or follow the legal procedures for protest and/or contest of any such taxes. In this event, the Town shall notify Marriott in writing and Marriott shall have sixty (60) calendar days to cure such default. If the default has not been fully cured by such time, the Town shall have the right to terminate this Agreement immediately by providing written notice to Marriott and shall have all other rights and remedies that may be available to it under the law or in equity. 5.3 Violations of Town Code, State or Federal Law. An event of default shall occur under this Agreement if any written citation is issued to Marriott or an Affiliate due to the occurrence of a violation of a material provision of the Town Code at the Hotel (including, without limitat ion, any violation of the Town’s Building or Fire Codes and any other Town Code violations related to the environmental condition of the Hotel; or to matters concerning the public health, safety or welfare) and such citation is not paid or the recipient of such citation does not properly follow the legal procedures for protest and/or contest of any such citation. An event of default shall occur under this Agreement if the Town is notified by a governmental agency or unit with appropriate jurisdiction that Marriott or an Affiliate, or any successor in interest thereto, any third party with access to the Hotel pursuant to the express or implied permission of Marriott or an Affiliate, or any a successor in interest thereto, is in violation of any material state or federal law, rule or regulation on account of the Hotel, improvements on the Hotel or any operations thereon (including, without limitation, any violations related to the environmental condition of the Hotel; the environmental condition other land or waters which is attributable to operations on the Hotel; or to matters concerning the public health, safety or welfare). Upon the occurrence of such default, the Town shall notify Marriott in writing and Marriott shall have (i) thirty (30) calendar days to cure such default or (ii) if Marriott has diligently pursued cure of the default but such default is not reasonably curable within thirty (30) calendar days, then such amount of time that the Town reasonably agrees is necessary to cure such default. If the default has not been fully cured by such time, the Town shall have the right to terminate this Agreement immediately by providing written notice to Marriott and shall have all other rights and remedies that may be available to under the law or in equit y. 5.4. Unauthorized Use of Funds and Requirement for Repayment to Town. If, during an audit by the Town under the provisions of this Agreement, the Town determines that the proceeds of this grant have not been utilized by Marriott for the purposes outlined in this Agreement, Marriott will be given thirty (30) calendar days to cure (following written notice from the Town) and, if Marriott fails to cure per the written notice from the Town, Marriott shall immediately remit to the Town the entire amount under this Agreement paid by the Town to Marriott during the reporting period during which the Town has identified that Marriott was not in compliance with the terms of this Resolution 14-06 Page 6 of 10 Agreement. If said amount is not remitted to the Town within 30 calendar days fro m the end of the cure period, that amount demanded for repayment to the Town plus six (6) percent simple interest on the repayment amount shall be due, in full, to the Town. For the purposes of this Section, Simple Interest” is defined as a rate of interest applied to the aggregate amount of the Program Grants paid by the Town to Marriott during the reporting period in which Marriott was in violation of this Agreement . 5.5. Failure to Submit Reports. Without limiting the application of Section 5.6, if Marriott fails to submit any report required by and in accordance with Section 4.2, the Town’s obligation to pay any Program Grants at the time, if any, shall be suspended until Marriott has provided and is current on all reports. 5.6. General Breach. Unless stated elsewhere in this Agreement, Marriott shall be in default under this Agreement if Marriott breaches any term or condition of this Agreement. In the event that such breach remains uncured after thirty (30) calendar days following receipt of written notice from the Town referencing this Agreement (or, if Marriott has diligently and continuously attempted to cure following receipt of such written notice but reasonably requires more than thirty (30) calendar days to cure, then such additio nal amount of time as is reasonably necessary to effect cure, as determined by both parties mutually and in good faith), the Town shall have the right to terminate this Agreement immediately by providing written notice to Marriott . 6. NO INDEPENDENT CONTRACTOR OR AGENCY RELATIONSHIP. It is expressly understood and agreed that Marriott shall not operate as an independent contractor or as an agent, representative or employee of the Town. Marriott shall have the exclusive right to control all details and day-to-day operations relative to the Hotel Support Program and shall be solely responsible for the acts and omissions of its officers, agents, servants, employees, contractors, subcontractors, licensees and invitees. Marriott acknowledges that the doctrine of respondeat superior will not apply as between the Town and Marriott , its officers, agents, servants, employees, contractors, subcontractors, licensees, and invitees. Marriott further agrees that nothing in this Agreement will be construed as the creation of a partnership or joint enterprise between the Town and Marriott . 7. INDEMNIFICATION. MARRIOTT, AT NO COST OR LIABILITY TO THE TOWN, AGREES TO DEFEND, INDEMNIFY AND HOLD THE TOWN, ITS OFFICERS, AGENTS, ATTORNEYS, SERVANTS AND EMPLOYEES, HARMLESS AGAINST ANY AND ALL CLAIMS, LAWSUITS, ACTIONS, COSTS AND EXPENSES OF ANY KIND, INCLUDING, BUT NOT LIMITED TO, THOSE FOR PROPERTY DAMAGE OR LOSS (INCLUDING Resolution 14-06 Page 7 of 10 ALLEGED DAMAGE OR LOSS TO MARRIOTT’ BUSINESS AND ANY RESULTING LOST PROFITS) AND/OR PERSONAL INJURY, INCLUDING DEATH, THAT MAY RELATE TO, ARISE OUT OF OR BE OCCASIONED BY (i) MARRIOTT’ BREACH OF ANY OF THE TERMS OR PROVISIONS OF THIS AGREEMENT; OR (ii) ANY ACT OR OMISSION OR INTENTIONAL MISCONDUCT OF MARRIOTT, ITS OFFICERS, AGENTS, ASSOCIATES, EMPLOYEES, CONTRACTORS (OTHER THAN THE TOWN, OR ITS EMPLOYEES, OFFICERS, AGENTS, ASSOCIATES, CONTRACTORS OR SUBCONTRACTS), OR SUBCONTRACTORS DUE OR RELATED TO OR ARISING FROM OPERATION AND CONDUCT OF THE HOTEL SUPPORT PROGRAM OR OTHERWISE TO THE PERFORMANCE OR OBLIGATIONS OF THIS AGREEMENT. 8. NOTICES. All written notices called for or required by this Agreement shall be addressed to the following, or such other party or address as either party designates in writing, by certified mail, postage prepaid, or by hand delivery: Town: Marriott: Town of Westlake _______________________________ Attn: Town Manager _______________________________ 3 Village Circle, #202 _______________________________ Westlake, Texas 76262 ____________________________________ With Copies to (which shall not constitute notice): Boyle & Lowry, L.L.P. Attn: L. Stanton Lowry 4201 Wingren Dr., Suite 108 Irving, Texas 75062 9. ASSIGNMENT AND SUCCESSORS. Marriott may at any time assign, transfer or otherwise convey any of its rights or obligations under this Agreement to an Affiliate without the approval of the Town so long as Marriott , the Affiliate and the Town first execute an agreement approved by the Town Council of the Town of Westlake under which the Affiliate agrees to assume and be bound by all covenants and obligations of Marriott under this Agreement. Otherwise, Marriott may not assign, transfer or otherwise convey any of its rights or obligations under this Agreement to any other person or entity without the prior consent of the Town Council, conditioned on (i) the prior approval of the assignee or successor and a finding by the Town Council that the proposed assignee or successor is financially capable of meeting the terms and conditions of this Agreement and (ii) prior execution by the proposed assignee or successor of a written agreement with the Town under which the proposed assignee or successor agrees to assume and be bound by all covenants and obligations of Resolution 14-06 Page 8 of 10 Marriott under this Agreement. Any attempted assignment without the Town Council’s prior consent shall constitute a breach and be grounds for termination of this Agreement and following receipt of written notice from the Town to Marriott. Any lawful assignee or successor in interest of Marriott of all rights under this Agreement shall be deemed “Marriott” for all purposes under this Agreement. 10. COMPLIANCE WITH LAWS, ORDINANCES, RULES AND REGULATIONS. This Agreement will be subject to all applicable Federal, State and local laws, ordinances, rules and regulations, including, but not limited to, all provisions of the Town’s codes and ordinances, as amended. 11. GOVERNMENTAL POWERS. It is understood that by execution of this Agreement, the Town does not waive or surrender any of it governmental powers or immunities that are outside of the terms, obligations, and conditions of this Agreement . 12. NO WAIVER. The failure of either party to insist upon the performance of any term or provision of this Agreement or to exercise any right granted hereunder shall not constitute a waiver of that party’s right to insist upon appropriate performance or to assert any such right on any future occasion. 13. VENUE AND JURISDICTION. If any action, whether real or asserted, at law or in equity, arises on the basis of any provision of this Agreement, venue for such action shall lie in state courts located in Tarrant County, Texas or the United States District Court for the Northern District of Texas – Fort Worth Division. This Agreement shall be construed in accordance with the laws of the State of Texas. 14. NO THIRD PARTY RIGHTS. The provisions and conditions of this Agreement are solely for the benefit of the Town and Marriott , and any lawful assign or successor of Marriott , and are not intended to create any rights, contractual or otherwise, to any other person or entity. 15. FORCE MAJEURE. It is expressly understood and agreed by the Parties to this Agreement that if the performance of any obligations hereunder is delayed by reason of war, civil commotion, acts of God, inclement weather, or other circumstances which are reasonably beyond the control or knowledge of the party obligated or permitted under the terms of this Agreement to do or perform the same, regardless of whether any such circumstance is similar to any of those Resolution 14-06 Page 9 of 10 enumerated or not, the party so obligated or permitted shall be excused from doing or performing the same during such period of delay, so that the time period applicable to such requirement shall be extended for a period of time equal to the period such party was delayed. Notwithstanding anything to the contrary herein, it is specifically understood and agreed that Marriott’ failure to obtain adequate financing to complete the Required Improvements by the Completion Deadline shall not be deemed to be an event of force majeure and that this Section 15 shall not operate to extend the Completion Deadline in such an event. 16. INTERPRETATION. In the event of any dispute over the meaning or application of any provision of this Agreement, this Agreement shall be interpreted fairly and reasonably, and neither more strongly for or against any party, regardless of the actual drafter of this Agreement. 17. SEVERABILITY CLAUSE. It is hereby declared to be the intention of the Parties that sections, paragraphs, clauses and phrases of this Agreement are severable, and if any phrase, clause, sentence, paragraph or section of this Agreement shall be declared unconstitutional or illegal by the valid judgment or decree of any court of competent jurisdiction, such unconstitutionality or illegality shall not affect any of the remaining phrases, clauses, sentences, paragraphs or sections of this Agreement since the same would have been executed by the Parties without the incorporation in this Agreement of any such unconstitutional phrase, clause, sentence, paragraph or section. It is the intent of the Parties to provide the economic incentives contained in this Agreement by all lawful means. 18. CAPTIONS. Captions and headings used in this Agreement are for reference purposes only and shall not be deemed a part of this Agreement. 19. ENTIRETY OF AGREEMENT. This Agreement, including any exhibits attached hereto and any documents incorporated herein by reference, contains the entire understanding and agreement between the Town and Marriott , and any lawful assign and successor of Marriott , as to the matters contained herein. Any prior or contemporaneous oral or written agreement is hereby declared null and void to the extent in conflict with any provision of this Agreement. Notwithstanding anything to the contrary herein, this Agreement shall not be amended unless executed in writing by both parties and approved by the Town Council of the Town in an open meeting held in accordance with Chapter 551 of the Texas Government Code. Resolution 14-06 Page 10 of 10 20. COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which shall be considered an original, but all of which shall constitute one instrument. EXECUTED as of the last date indicated below: TOWN OF WESTLAKE: _______________________________ _______________________________ a Texas________________________ By: By: Thomas E. Brymer _____________________________ Town Manager _____________________________ Date: Date: APPROVED AS TO FORM AND LEGALITY: By: L. Stanton Lowry Town Attorney EXHIBITS “A” – Town of Westlake Resolution No. 06-19 “B” – Town of Westlake Resolution No. 14-XX Page 1 of 3 estlake Town Council TYPE OF ACTION Regular – Action Item Westlake Town Council Meeting Monday, February 24, 2014 TOPIC: Public Hearing and Consideration of Resolution 14-07, Making Findings that The Proposed Solana Public Improvement District and the Proposed Public Improvements will Promote the Interests of the Town and Confer a Special Benefit on A Definable Part of the Town; Providing that the District and the Proposed Public Improvements Are Advisable; Providing Findings With Respect to the Nature and Estimated Cost of the Proposed Public Improvements, the Boundaries of the District, the Method of Assessment, and Apportionment of Costs Between the District and the Town; Authorizing the Creation of the District; and Directing the Town Secretary to Publish Notice of the Creation of the Solana Public Improvement District. STAFF CONTACTS: Tom Brymer, Town Manager Decision Points Start Date Completion Date Timeframe: October 28, 2013 TBD Funding: Amount - None. Status- N/A Source- N/A Decision Alignment VVM Perspective Desired Outcome Sense of Place Financial Stewardship Enhance and Maintain a Sense of Community Strategic Issue Outcome Strategy Staff Action Comprehensive Planning and Management of Natural Resources N/A SA 09D1: Ordinances Strategy Map or VVM Connection Strategic Issue Connection Page 2 of 3 EXECUTIVE SUMMARY The owner of the development known as Entrada, located at the northeast corner of FM 1938 (Davis Blvd) and Solana Boulevard, has submitted a petition to the Town of Westlake to establish a Public Improvement District (PID) for construction of public infrastructure in this development. The next step to be considered at this meeting is holding a public hearing and following the close of the public hearing, consider a resolution establishing this PID. ORGANIZATIONAL HISTORY/RECOMMENDATION Previously this property was zoned for office and retail uses. In April of last year, after much public input and meetings, the Town Council, with a unanimous recommendation from the Planning & Zoning Commission, approved a request by the owner to amend the zoning in this PD1-2 zoning district . Also in April of last year, prior to consideration of this zoning change request, the land use plan component of the Town’s Comprehensive Plan was amended to provide for the uses requested in the zoning change request for this property. The amended zoning adds certain residential and entertainment uses in order to allow development of a mixed use Planned Development on this tract. The zoning ordinance, as amended, is intended to achieve a design that emulates a European style village with a Spanish architectural theme. The development’s name is Entrada. During the re-zoning approval process it was pointed out by Staff, as well as discussed by Council, that if the zoning request was approved, the developer intended to submit to the Town a petition to create a Public Improvement District (PID) to fund the construction of the public infrastructure for this development. Further, in the Economic Development with the developer of Entrada, the Town agreed to consider creating a PID for this purpose. This Economic Development Agreement also was approved by the Town Council in April of this year. This agenda item is intended to continue discussion begun at the Council’s October 28, 2013 Workshop, the Council’s November 11, 2013 Workshop, and the Council’s December 9, 2013 Workshop regarding this proposed PID. The Staff has been reviewing various iterations of a draft Service and Assessment Plan (SAP ) since the petition to establish this PID was submitted by the owner of this tract. If the Council wishes to move forward on establishing this PID, a specific timeline for establishing the PID will ne ed to be set for this as well. With the Development Plan and Preliminary Plat for Entrada now approved by the Town Council, the developer is ready to move forward on establishment of a PID for this property. Since the December 9, 2013 Council Workshop, it has been identified that due to IRS regulations related to issuance of bank qualified debt, modifications to the approach previously discussed with Council for issuance of PID bonds would need to be made. The developer’s team discussed their bond issuance plans in view of this bank qualified issue at the Jan. 27th workshop. The developer requested that the Council approve a resolution that would begin the public notification process for a public hearing to consider creating a PID on the petitioned property. The Town Council approved a resolution on Jan. 27th which set a public hearing on proposed PID creation for Feb. 24, 2014. This public hearing has been duly advertised as required by law and the affected property notified as well. Approval of the bond issuance comes at a later point in the process and the process can be halted any time before then by the Council. Page 3 of 3 Staff recommends holding a public hearing regarding this proposed PID. Then, following close of the public hearing, that the Town Council consider approval of this resolution establishing a PID on the petitioned property. Further, Staff notes that the approval of any PID bonds can only take place after the PID is established, which this is the first step in that process. If the PID is established by the Town Council at this Feb. 24th meeting, then issuance of PID bonds must be approved by the Town Council at a later point in the process, i.e. approving this resolution does not approve issuance of PID bonds, it only sets a public hearing for consideration of creating the PID. ATTACHMENTS 1. Proposed Calendar for PID Establishment in Westlake on the Entrada Property. 2. Resolution for the Creating a Public Improvement District on Certain Petitioned Property within the Town of Westlake, Texas. January 2014 1 February 2014 2 March 2014 3 S M T W Th F Sa S M T W Th F Sa S M T W Th F Sa 1 2 3 4 1 1 5 6 7 8 9 10 11 2 3 4 5 6 7 8 2 3 4 5 6 7 8 12 13 14 15 16 17 18 9 10 11 12 13 14 15 9 10 11 12 13 14 15 03/10-03/14 Spring Break 19 20 21 22 23 24 25 16 17 18 19 20 21 22 16 17 18 19 20 21 22 26 27 28 29 30 31 23 24 25 26 27 28 23 24 25 26 27 28 29 30 31 April 2014 4 May 2014 5 June 2014 6 S M T W Th F Sa S M T W Th F Sa S M T W Th F Sa 05/10 Election Day 1 2 3 4 5 1 2 3 1 2 3 4 5 6 7 05/15 Canvass if necessary 6 7 8 9 10 11 12 4 5 6 7 8 9 10 8 9 10 11 12 13 14 05/12 BOT Budget Wkshp 13 14 15 16 17 18 19 11 12 13 14 15 16 17 15 16 17 18 19 20 21 05/21 TC/BOT orientation (if necessary) 20 21 22 23 24 25 26 18 19 20 21 22 23 24 22 23 24 25 26 27 28 05/30 TC Planning Retreat 27 28 29 30 25 26 27 28 29 30 31 29 30 06/05 Last Day of School No TC meeting until Aug 25th School Board School & Town Holiday Budget / Meeting Retreats Town Council School Holiday Town Holiday New Council/BOT n Election Day / Orientation Special Meeting to Planning & Zoning Canvass Returns Meetings Date:Day Resp.Action:Responsibility Key: T=Town; D=Developer; I=Issuer; UW=Underwriter 27-Jan Mon T Council adopted resolution requiring newspaper notice and mail notice for PID creation Hearing Date 5-Feb Wed T Mail out property notices for PID creation public hearing/send newspaper notice for same 7-Feb Fri D Distribution to Working Group revised Preliminary SAP D Distribution to Working Group revised finance program schedule D Distribution to Working Group revised resolution creating PID 12-Feb Wed T Comments due on February 7th drafts and returned to Developer 14-Feb Fri D Submit to Town edited Preliminary SAP for council books D Submit to Town edited finance program schedule for council books D Submit to Town resolution creating PID for council books 19-Feb Wed T Council Board books sent out with the edited draft documents: Updated Preliminary SAP Financing program schedule Resolution Creating PID 24-Feb Mon T Open Public Hearing for PID creation T Consider Resolution creating PID D Present finance program schedule to Town Council 27-Feb Thr D Distribute to Working Group Draft Appraisal 7-Mar Fri D Distribution to Working Group updated draft Preliminary SAP D Distribution to Working Group Resolution determining cost of authorized improvements, setting levy and assessment hearing date I Distribution to Working Group 1st draft of Bond Documents (Issuer's Bond Counsel) Town of Westlake Solana Public Improvement District DEVELOPER Submittal and Meeting Schedule 10-Mar Mon D Distribution to Working Group updated Preliminary SAP based on DRAFT Appraisal 12-Mar Wed T Comments due on March 7th submittals AND Preliminary SAP 13-Mar Thr D Distribution to Working Group Final Appraisal 14-Mar Fri D Submit to Town (and Distributed to Working Group) final Preliminary SAP for council books D Submit to Town Resolution determine costs…levy…assessment hearing date I Submit to Town 1st draft of bond documents (Issuer's Bond Counsel) 19-Mar Wed T Council Board books sent out 24-Mar Mon D Presentation of Preliminary SAP based on draft appraisal I Distribution of 1st draft of Bond documents (Issuer's Bond Counsel) 25-Mar Tue D Distribution to Working Group update Preliminary SAP based on Final Appraisal 31-Mar Mon UW Distribution of 1st draft of Preliminary Official Statement (POS) (Underwriter's Counsel) 4-Apr Fri D Distribution to Working Group proposed finance cash-flows I Distribution of 2nd Bond Documents (Issuer's bond counsel) D Distribution to Working Group the PID Financing Agreement, including final SAP UW Distribution to Working Group the latest POS for the April 28th meeting I Distribution to Working Group the latest "Draft" bond documents D Distribution to Working Group Resolution authorizing distribution of POS 11-Apr Fri T Comments due on April 4 submittals 17-Apr Thr D Submit to Town final proposed finance cash-flows D Submit to Town of the PID financing agreement, including final SAP UW Submit to Town latest POS for council books I Submit to Town latest "Draft" bond documents for council books D Submit to Town final resolution authorizing distribution of POS 23-Apr Wed T Council Board books sent out 28-Apr Mon T Consider a Resolution authorizing the distribution of the POS D Presentation of the PID financing agreement, including Final SAP T Open a public hearing on Levy and Assessment; continue until May 22 29-Apr Tue UW POS electronically distributed 2-May Fri D Distribution to Working Group Ordinance for Levy and Assessments D Distribution to Working Group Resolution/Ordinance to approve PID pricing and final bond docs D Distribution to Working Group Resolution/Ordinance to approve PID Financing Agreement I Distribution to Working Group final Bond docs 9-May Fri T Comments due on May 2nd submittals returned to developer 14-May Wed I Submit to Town Resolution/Ordinance to approve PID pricing and final bond docs D Submit to Town Resolution/Ordinance to approve PID financing agreement I Submit to Town final bond documents for board books 16-May Fri T Council Books for May 22nd special meeting sent out Resolution/Ordinance to approve PID pricing and final bond documents Resolution/Ordinance to approve PID financing agreement Copies of final bond documents 19-May Mon T Posting of special board meeting on May 22nd to close public hearing and approve pricing and final bond docs 20-May Tue Pre-pricing the bonds 21-May Wed Pricing the bonds 22-May Thr T Special Council Meeting Close public hearing from April 28th Consider Ord/Res approving PID bond pricing and final bond docs Consider Ordinance setting levy Resolution 14-07 Page 1 of 7 TOWN OF WESTLAKE, TEXAS RESOLUTION NO. 14-07 A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS, MAKING FINDINGS THAT THE PROPOSED SOLANA PUBLIC IMPROVEMENT DISTRICT AND THE PROPOSED PUBLIC IMPROVEMENTS WILL PROMOTE THE INTERESTS OF THE TOWN AND CONFER A SPECIAL BENEFIT ON A DEFINABLE PART OF THE TOWN; PROVIDING THAT THE DISTRICT AND THE PROPOSED PUBLIC IMPROVEMENTS AND ADVISABLE; PROVIDING FINDINGS WITH RESPECT TO THE NATURE AND ESTIMATED COST OF THE PROPOSED PUBLIC IMPROVEMENTS, THE BOUNDARIES OF THE DISTRICT, THE METHOD OF ASSESSMENT, AND APPORTIONMENT OF COSTS BETWEEN THE DISTRICT AND THE TOWN; AUTHORIZING THE CREATION OF THE DISTRICT; DIRECTING THE TOWN SECRETARY TO PUBLISH NOTICE OF THE CREATION OF THE SOLANA PUBLIC IMPROVEMENT DISTRICT; AND PROVIDING AN EFFECTIVE DATE WHEREAS, the Town Council of the Town of Westlake, Texas (the “Town”), is authorized by Chapter 372, Texas Local Government Code, as amended (the “Act”), to create public improvement district s within the corporate limits and the extraterritorial jurisdiction of the Town; and WHEREAS, on October 18, 2013, Maguire Partners-Solana Land, L.P , a Texas limited partnership (the “Developer”), submitted and filed with the Town Secretary a petition (the “Petition”) requesting the establishment of a public improvement district (the “District”) for certain property within the Town; and WHEREAS, the Petition has been on file with the Town Secretary and available for public inspection at all times after it was submitted and filed; and WHEREAS, the Town Council has investigated and determined that the Petition complies with and is sufficient under the Act to create the District; and WHEREAS, the Town Council has investigated and determined that the matters set forth in the Petition are true and correct; and WHEREAS, the Town Council has investigated and determined that the public improvements described in the Petition (“Public Improvements”) are authorized by the Act and will confer a special benefit on the Property; and WHEREAS, the Town Council has investigated and determined that the District may be created without the appointment of an advisory body; and WHEREAS, the Town Council approved at their Januar y 27, 2014 Regular Meeting, a resolution authorizing the Town Secretary to publish notice of a public hearing for February 24, 2014 as well as notify property owners pursuant to the law; and Resolution 14-07 Page 2 of 7 WHEREAS, the request for the creation of the District was made at the Town Council’s regular meeting of February 24, 2014; and WHEREAS, a description and depiction of the Property which shall comprise the District (the “Property”) are attached hereto as Exhibit A; and WHEREAS, at least fifteen days before the February 24, 2014 public hearing, the Town caused notice of the February 24, 2014 public hearing, addressed to "Property Owner," to be mailed to the current address, as reflected on the tax rolls, of owners of property subject to assessment under the proposed District; and WHEREAS, at least fifteen days before the February 24, 2014 public hearing, the Town caused notice of the February 24, 2014 public hearing to be published in a newspaper of general circulation in the area where the proposed District is located; and WHEREAS, on February 24, 2014, the Town Council held a public hearing, pursuant to Section 372.009 of the Texas Local Government Code, to receive public testimony and input relative to the creation of said District in the Town; and WHEREAS, the Town Council has investigated and determined that the published and mailed not ices of the public hearing complied with the Act and were published and mailed before the 15th day before the date of the public hearing as required by the Act; and WHEREAS, the Town Council hereby determines that there has been full compliance with all requirements of the Act . NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS, THAT: SECTION 1: All of the above premises are hereby found to be true and correct legislative and factual findings of the Town of Westlake and they are hereby approved and incorporated into the body of this Resolution as if copied in their entirety. SECTION 2: All requirements of the Act with regard to the Petition and the mailed and published notices of the public hearing have been fully complied with, and are hereby ratified and approved. SECTION 3: The Town Council, after considering the Petition, the information provided by Town staff, and the evidence, information, and testimony presented at the public hearing, makes the following findings, each of which represents the exercise by the Town Council of its legislative authority and discretion: (1) The creation of the District and the undertaking of the Public Improvements will promote the interests of the Town. Resolution 14-07 Page 3 of 7 (2) The creation of the District and the undertaking of the Public Improvements will confer a special benefit on a definable part of the Town identified herein as the Property. (3) The purposes of the District include the design, acquisition, construction, and improvement of public improvement projects authorized by the Act that are necessary for the development of the Property, which public improvements will include: landscaping, entryway features, water, wastewater, sidewalks, streets, roadways, off-street parking, drainage system improvements, trails, parks and open space; special supplemental services for the improvement and promotion of the district; and payment of expenses incurred in the establishment, administration, and operation of the district. (4) The estimated cost of the proposed Public Improvements , including cost s related to the design, acquisition and construction of the Public Improvements, is $32,000,000.00. (5) The District is proposed to include approximately 85.90 acres of land generally located south of State Highway 114, east of Davis Boulevard, and north of Solana Boulevard, as more particularly described by a metes and bounds description attached as Exhibit A. (6) The Town shall levy assessments on each parcel in the District in a manner that will impose equal shares of the costs on property similarly benefited. All assessments may be paid in full or in part at any time, including accrued and unpaid interest; and if not paid in full, shall be paid in annual installments. If paid in installments, then the installments must be paid in amounts necessary to meet annual costs for the Public Improvements financed by the assessment, and must continue for a period necessary to retire any debt of those authorized Public Improvements, including interest . (7) The Town will not be obligated to provide any funds to finance the Public Improvements, other than from assessments levied on the public improvement district property, and possible tax increment reinvestment zone revenue. No municipal property in the public improvement district shall be assessed. Developer may also pay certain costs of the improvements from other funds available to the Developer. SECTION 4: The District is authorized, established, and created as a public improvement district under the Act . SECTION 5: The District shall be known as the Solana Public Improvement District. SECTION 6: This Resolution is consistent with the Petition, has been approved by majority vote of all members of the Town Council, and constitutes the improvement order under the Act authorizing, establishing and creating the District in accordance with the Act and in accordance with the findings set forth in this Resolution. SECTION 7: The Town Secretary is authorized and directed to this Resolution (together with Exhibit A)) to be published as required by the Act one (1) time in a newspaper of general Resolution 14-07 Page 4 of 7 circulation in the area where the District is located, and whereupon the authorization, establishment, and creation of the District shall take effect. SECTION 8: This Resolution shall take effect immediately from and after its passage and publication, as required by this Resolution and the Act. DULY PASSED AND APPROVED BY THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS, BY A VOTE OF ___ TO ___, ON THIS THE 24TH DAY OF FEBRUARY, 2014. ATTEST: _____________________________ Laura L. Wheat, Mayor ____________________________ ______________________________ Kelly Edwards, Town Secretary Thomas E. Brymer, Town Manager APPROVED AS TO FORM: ____________________________ L. Stanton Lowry, Town Attorney Resolution 14-07 Page 5 of 7 EXHIBIT A (Property Description and Depiction) LEGAL DESCRIPTION 85.90 Acres BEING a tract of land situated in the C.M. Throop Survey, Abstract No. 1510, the W. Medlin Survey, Abstract No. 1958, the William Pea Survey, Abstract No. 1246 and the Joseph Henry Survey, Abstract No. 742, Tarrant County, Texas and being a portion of Tract 2 as described in the Special Warranty Deed to MAGUIRE PARTNERS – SOLANA LAND, L.P. as recorded in Volume 16858, Page 176 of the Deed Records of Tarrant County, Texas and being more particularly described as follows: BEGINNING at a 5/8 inch iron rod found with “Huitt -Zollars” cap at the southwest corner of Lot 2, Block 1, Westlake/Southlake Park Addition No. 1, an addition to t he Town of Westlake, Texas as recorded in Volume 388-214, Page 78 of the Plat Records of Tarrant County, Texas, being on the northeasterly right -of-way line of Kirkwood Boulevard, a variable width right -of-way as dedicated by said Westlake/Southlake Park Addition No. 1 and being the beginning of a non- tangent curve to the left having a central angle of 9 degrees 13 minutes 11 seconds, a radius of 1428.00 feet and being subtended by a chord which bears North 47 degrees 49 minutes 50 seconds West a distance o f 229.54 feet; THENCE along the northeasterly right -of-way line of Kirkwood Boulevard, a variable with right -of-way, as described in Dedication Deed to the Town of Westlake as recorded under instrument No. D208427746, Deed Records of Tarrant County, Texas the following: Along said curve to the left an arc distance of 229.79 feet to a ½ inch rod found with Graham cap at the end of said curve; North 52 degrees 30 minutes 14 seconds west a distance of 32.60 feet to ½ inch iron rod found with Graham cup beginning of a curve to the right having a central angle of 18 degrees 54 minutes 48 seconds, a radius of 612.00 feet and being subtended by a chord which bears North 43 degrees 02 minutes 03 seconds West a distance of 201.11 feet; Along said curve to the right an arc distance of 202.02 feet to a ½ inch iron rod found with Graham cap at the beginning of a compound curve to the right having a central angle of 24 degrees 06 minutes 47 seconds, a radius of 812.00 feet and being subtended by a chord which bears North 21 degrees 32 minutes 03 seconds West a distance of 339.22 feet; Along said curve to the right an arc distance of 341.73 feet to a ½ inch iron rod found with Graham cap at the end of a said curve; Resolution 14-07 Page 6 of 7 North 09 degrees 28 minutes 39 seconds West a distance of 132.24 feet to a ½ inch iron rod found with Graham cap at the beginning of a curve to the left having a central angle of 45 degrees 43 minutes 19 seconds, a radius of 708.00 feet and being subtended by a chord which bears North 32 degrees 20 minutes 19 seconds West a distance of 550.11 feet; Along said curve to the left an arc distance of 564.98 feet to a ½ inch iron rod found with Graham cap at the end of said curve; North 55 degrees 11 minutes 58 seconds West a distance of 190.50 feet to a ½ inch iron rod found with Graham cap; North 08 degrees 56 minutes 27 seconds West a distance off 21.41 feet to a ½ inch iron rod found with Graham cap on the easterly right -of-way line of Precinct Line Road, a variable width right -of-way, as described in Dedication Deed to Town of Westlake as recorded under Instrument No. D208427746, Deed Records of Tarrant County, Texas and being the beginning of a non-tangent curve to the left having a central angle of 16 degrees 09 minutes 21 seconds, a radius of 1,432.50 feet and being subtended by a chord which bears North 27 degrees 07 minutes 42 seconds East a distance of 402.59 feet; THENCE along the easterly right -of-way line of Precinct Line Road, the following; Along said curve to the left an arc distance of 403.92 feet to a ½ inch iron rod found with Graham cap at the end of said curve; North 18 degrees 47 minutes 24 seconds East a distance of 185.36 feet to a ½ inch iron rod found with Graham cap; North 17 degrees 03 minutes 03 seconds East a distance of 322.64 feet to a ½ inch iron rod found on the southerly right -of-way line of State Highway 114 (a variable width ROW); THENCE along the southerly right -of-way line of State Highway 114, the following; North 60 degrees 06 minutes 26 seconds East a distance of 44.54 feet to a Texas Department of Transportation brass disk in concrete found; South 71 degrees 03 minutes 32 seconds East a distance of 254.55 feet to a point for corner from which a Texas Department of Transportation brass disk in concrete found bears North 10 degrees 48 minutes 28 seconds West a distance of 0.43 feet; South 77 degrees 26 minutes 06 seconds East a distance of 746.74 feet to a Texas Department of Transportation brass disk in concrete found; South 71 degrees 03 minutes 31 seconds East a distance of 1443.85 feet to a Texas Department of Transportation brass disk in concrete found; Resolution 14-07 Page 7 of 7 South 62 degrees 34 minutes 19 seconds East a distance of 404.34 feet to a Texas Department of Transportation brass disk in concrete found at the beginning of a curve to the right having a central angle of 08 degrees 19 minutes 09 seconds, a radius of 2,709.79 feet and being subtended by a chord which bears South 58 degrees 24 minutes 45 seconds East a distance of 393.11 feet; Along said curve to the right an arc distance of 393.45 feet to a Texas Department of Transportation brass disk in concrete found; South 54 degrees 15 minutes 11 seconds East a distance of 399.24 feet to a Texas Department of Transportation brass disk in concrete found; South 64 degrees 19 minutes 50 seconds East a distance of 56.55 feet to a 5/8 inch iron rod found with “Huitt -Zollars” cap at the beginning of a non-tangent curve to the right having a central angle of 02 degrees 13 minutes 56 seconds, a radius of 2,754.79 feet and being subtended by a chord which bears South 43 degrees 17 minutes 37 seconds East a distance of 107.32 feet; Along said curve to the right n arc distance of 107.33 feet to a ½ inch rod found with “Huitt - Zollars” cap for the northeast corner of Lot 1, Block 1, of the aforementioned Westla ke/Southlake Park Addition No. 1; THENCE departing the southerly right -of-way line of State Highway 114, North 90 degrees 00 minutes 00 seconds west along the north line of said Lot 1, Block 1, a distance of 2,132.54 feet to a 5/8 inch iron rod with “Carter-Burgess” cap found for the northwest corner of said Lot 2, Block 1, Westlake/Southlake Park Addition No. 1; THENCE South 52 degrees 00 minutes 00 seconds West along the northwesterly line said Lot 2, Block 1, a distance of 1000.00 feet to a 5/8 inch iron rod with “Carter & Burgess” cap found at an angle point in the west line of Lot 2, Block 1; THENCE along the west line of said Lot 2, Block 1, South 00 degrees 00 minutes 00 seconds East a distance of 168.55 feet to the POINT OF BEGINNING and containing 85.90 acres of land, more or less. EXECUTIVE SESSION a. Section 551.087. Deliberation Regarding Economic Development Negotiations (1) to discuss or deliberate regarding commercial or financial information that the governmental body has received from a business prospect that the governmental body seeks to have locate, stay, or expand in or near the territory of the governmental body and with which the governmental body is conducting economic development negotiations; or (2) to deliberate the offer of a financial or other incentive to a business prospect described by Subdivision (1). Maguire Partners-Solana Land, L.P., related to Centurion’s development known as Entrada b. Section 551.071 (2) Consultation with Attorney on a matter in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with the Chapter including but are not limited to the following: Town of Westlake Certificate of Convenience & Necessity (CCN) for water and sewer service. c. Section 551.071(2) Consultation with Attorney - to seek advice of counsel on legal matters involving pending or contemplated litigation, settlement offers, or other legal matters not related directly to litigation or settlement. Pending or contemplated litigation and settlement offers include but are not limited to the following: Trophy Club Municipal District Number 1 Town of Westlake Item # 5 – Executive Session Town of Westlake Item # 6 – Reconvene Meeting The Council will conduct a closed session pursuant to Texas Government Code, annotated, Chapter 551, Subchapter D for the following: a. Section 551.087. Deliberation Regarding Economic Development Negotiations (1) to discuss or deliberate regarding commercial or financial information that the governmental body has received from a business prospect that the governmental body seeks to have locate, stay, or expand in or near the territory of the governmental body and with which the governmental body is conducting economic development negotiations; or (2) to deliberate the offer of a financial or other incentive to a business prospect described by Subdivision (1). Maguire Partners-Solana Land, L.P., related to Centurion’s development known as Entrada b. Section 551.071 (2) Consultation with Attorney on a matter in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with the Chapter including but are not limited to the following: Town of Westlake Certificate of Convenience & Necessity (CCN) for water and sewer service. c. Section 551.071(2) Consultation with Attorney - to seek advice of counsel on legal matters involving pending or contemplated litigation, settlement offers, or other legal matters not related directly to litigation or settlement. Pending or contemplated litigation and settlement offers include but are not limited to the following: Trophy Club Municipal District Number 1 Town of Westlake Item # 7 – Take any Necessary Action, if necessary FUTURE AGENDA ITEMS: Any Council member may request at a workshop and / or Council meeting, under “Future Agenda Item Requests”, an agenda item for a future Council meeting. The Council Member making the request will contact the Town Manager with the requested item and the Town Manager will list it on the agenda. At the meeting, the requesting Council Member will explain the item, the need for Council discussion of the item, the item’s relationship to the Council’s strategic priorities, and the amount of estimated staff time necessary to prepare for Council discussion. If the requesting Council Member receives a second, the Town Manager will place the item on the Council agenda calendar allowing for adequate time for staff preparation on the agenda item. - None Town of Westlake Item #8 - Future Agenda Items COUNCIL CALENDAR Northeast Tarrant County 5th Annual Transportation Summit Friday, February 21, 2014; 8:30 am – 1:30 pm Hurst Conference Center Town Council Workshop & Meeting Monday, February 24, 2014 Comp Plan Steering Committee Meeting (not Public Input) Wednesday, February 26, 2014; 6:00 – 8:30 pm Town Council Chambers/Courtroom WA National Honor Society/Jr. Honor Society Induction Thursday, February 27, 2014 Performance Hall Last Day to File for a Place on the Ballot, Westlake General Election Friday, February 28, 2014 WA Foundation’s 11th Annual Gallery Night Saturday, March 1, 2014; 6:00 – 11:30 PM Texas Motor Speedway Comp Plan Public Input Workshop #2 Wednesday, March 5, 2014; 6:00 PM Westlake Academy – Performance Hall WA Spring Break - March 10 – 14, 2014 Town Council Workshop & Meeting Monday, March 24, 2014 Simply Westlake Resident Event/Restaurant Review Tuesday, March 25, 2014; 6:30 – 8:30 PM Compliments of Jack & Grill, Roanoke Alliance Development Forum Luncheon (3rd annual – Joint Regional Eco Devo promotion) Friday, March 28, 2014; 11:00 a.m. – 1:00 p.m. Marriott at Champions Circle (across from TMS) Town of Westlake Item # 9 – Council Calendar Town of Westlake Item # 10 – Adjournment Back up material has not been provided for this item.