HomeMy WebLinkAboutRes 05-12 Approving the Comprehensive Annual Financial Report Year Ending September 30, 2004TOWN OF WESTLAKE
RESOLUTION NO. 05-I2
A RESOLUTION OF THE BOARD OF ALDERMEN OF THE WESTLAKE
ACADEMY TO APPROVE THE FISCAL YEAR 200312004 ANNUAL AUDIT
REPORT FROM WEAVER & TIDWELL, LLP.
BE IT RESOLVED BY THE BOARD OF ALDERMEN OF THE TOWN OF
WESTLAKE:
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.
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF
ALDERMEN OF THE TOWN OF WESTLAKE:
SECTION 1: That the Board of Aldermen does hereby approve the fiscal year
2003/2004 annual audit report from Weaver and Tidwell, LLP.
SECTION 2: That this Resolution shall become effective upon the date of its
passage.
PASSED AND APPROVED ON THIS 14th DAY OF MARCH, 2005.
ATTEST:
J/fan Dwinnell, Secretary
Scott Brad y, Mayor
Trent O. Petty, Manager
TOWN OF WESTLAKE, TEXAS
FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2004
TOWN OF WESTLAKE, TEXAS
FINANCIAL STATEMENTS
SEPTEMBER 30, 2004
Table of Contents
Independent Auditor's Report
1
Management's Discussion and Analysis
2
Basic Financial Statements:
Government -wide Financial Statements:
Statement of Net Assets
$
Statement of Activities
9
Fund Financial Statements:
11
Balance Sheet — Governmental Funds
Reconciliation of the Governmental Funds Balance
Sheet to the Statement of Net Assets
12
Statement of Revenues, Expenditures, and Changes in
Fund Balances — Governmental Funds
13
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental
Funds to the Statement of Activities
14
Statement of Net Assets — Proprietary Funds
15
Statement of Revenues, Expenses, and Changes in
Fund Net Assets — Proprietary Funds
16
Statement of Cash Flows — Proprietary Funds
17
Notes to the Financial Statements
18
Required Supplementary Information:
Schedule of Revenues, Expenditures, and Changes in
Fund Balances — Budget and Actual — General Fund
36
Schedule of Revenues, Expenditures, and Changes in
Fund Balances — Budget and Actual —
Westlake Academy General Fund
37
Notes to Required Supplementary Information
38
INDEPENDENT AUDITOR'S REPORT
`,i
To the Honorable Mayor
and Board of Aldermen
TOWN OF W ESTLAKE, TEXAS
WEAVER
TIDWELL
We have audited the accompanying financial statements of the governmental activities, the business -
L 1, P 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, 2004, which collectively comprise the
CERTIFIED PUBLIC
ACCOUNTANTS Town's basic financial statements as listed in the table of contents. These financial statements are the
AND CONSULTANTS responsibility of the Town of Westlake, Texas management. Our responsibility is to express opinions
on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States
of America and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a reasonable basis for our
opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business -type activities, the aggregate
discretely presented component units, and each major fund of the Town of Westlake, Texas, as of
September 30, 2004, and the respective changes in financial position and cash flows, where
applicable, thereof for the year then ended in conformity with accounting principles generally accepted
in the United States of America.
As discussed in the notes to the financial statements financial statements, the Town implemented a
new financial reporting model, as required by the provisions of Governmental Accounting Standards
Board ("GASB") Statement No. 34, Basic Financial Statements -and Management's Discussion and
Analysis -for State and Local Governments, GASB Statement No. 37, Basic Financial Statements- and
Management's Discussion and Analysis -for State and Local Governments: Omnibus which provides
additional guidance for the implementation of GASB No. 34, and GASB Statement No. 38, Certain
Financial Statement Note Disclosures, which changes note disclosure requirements for Governmental
entities.
The management's discussion and analysis and budgetary comparison information on pages 2 through
7 and 36 through 38 are not a required part of the basic financial statements but are supplementary
information required by accounting principles generally accepted in the United States of America. We
have applied certain limited procedures, which consisted principally of inquires of management
regarding the methods of measurement and presentation of the required supplementary information.
However, we did not audit the information and express no opinion on it.
DALLAS
In accordance with Government Auditing Standards, we have issued a report dated February 18, 2005,
r I"t Plaza
on our consideration of the Town's internal control over financial reporting and our tests of compliance
12221 Merit n,rv,
with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an
'"" `' 1400
audit in accordance with Government Auditing Standards and should be read in conjunction
Dallas, 1rva,75251-2280
performed
with this report in considering the results of our audit.
972 490 2970
F 972 702.83321
FORT WORTH
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WEAVER AND TIDWELL, L.L.P.
Sent, 300
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Dallas, Texas
817 x32.7905
February 18, 2005
817429,9.36
WWW WEAVERANDTIDWELLCOM
1605
AN INDEPENDENT MEMBER OF
BAKER I ILLY
1
INTERNATIONAL
MANAGEMENT'S DISCUSSION AND ANALYSIS
As management of the Town of Westlake (the "Town"), we offer readers of the Town's financial statements this narrative
overview and analysis of the financial activities of the Town for the fiscal year ended September 30, 2004. We encourage
readers to consider the information presented here in conjunction with the Town's financial statements, which follow this
section. The Town implemented Governmental Accounting Standards Board Statement 34, Basic Financial Statements –
and Management's Discussion and Analysis –for State and Local Governments (Statement 34) for the first time for fiscal
year 2004.
FINANCIAL HIGHLIGHTS
• The Assets of the Town exceeded it's liabilities at the close of the most recent fiscal year by $17,110,827 (Net
assets).
• At the end of the current fiscal year, total fund balance for the general fund was $1,000,073.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis are intended to serve as an introduction to the Town's basic financial statements. The Town's
annual report consists of three parts-- management's discussion and analysis (this section), the basic financial statements,
and required supplementary information. The basic financial statements include two kinds of statements that present
different views of the Town:
• The first two statements are government -wide financial statements that provide both long-term and short-term
information about the Town's overall financial status.
• The remaining statements are fund financial statements that focus on individual parts of the government, reporting
the Town's operations in more detail than the government -wide statements.
• The governmental funds statements tell how general government services were financed in the short-term as well as
what remains for future spending.
The financial statements also include notes that explain some of the information in the financial statements and provide
more detailed data. The statements are followed by a section of required supplementary information that further explains
and supports the information in the financial statements.
Figure A-2 on the next page summarizes the major features of the Town financial statements, including the portion of the
Town government they cover and the types of information they contain. The remainder of this overview section of
management's discussion and analysis explains the structure and contents of each of the statements. The Town did not
have any "Fiduciary" funds at September 30, 2004.
Government -wide 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 Statement of Net Assets presents information on all of the Town's assets and liabilities, with the difference between the
two reported as net assets. All of the current year's revenues and expenses are accounted for in the statement of activities
regardless of when cash is received or paid.
The Statement of Activities presents information showing how the government's net assets changed during the most recent
fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs,
regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items
that will only result in cash flows in future fiscal periods.
The two government -wide statements report the Town's net assets and how they have changed. Net assets—the difference
between the Town's assets and liabilities—is one way to measure the Town's financial health or position.
2
• Over time, increases or decreases in the Town's net assets are an indicator of whether its financial health is
improving or deteriorating, respectively.
Both of the government -wide financial statements distinguish functions of the Town that are principally supported by sales
taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a
significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the
Town include general government, public safety, culture and recreation, economic development, public works, protective
inspection, visitor services and education. The business -type activities of the Town include water and sewer.
The government -wide financial statements include not only the Town itself (known as the primary government), but also
three discretely presented component units: the Lone Star Public Facility Corporation, 4A and 4B Economic Development
Corporations, which are legally separate but financially accountable to the Town. In addition, the Town has one blended
component unit, the Westlake Academy.
Figure A-2. Major Features of the Town's Government -wide and Fund Financial Statements
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for
specific activities or objectives. The Town, like other state and local governments, uses fund accounting to ensure and
demonstrate compliance with finance -related legal requirements. Below are the three types of funds. The Town had only
"Governmental funds and Propriety funds" for the year ended September 30, 2004.
Governmental funds—Governmental funds are used to account for essentially the same functions reported as governmental
activities in the government -wide financial statements. However, unlike the government -wide financial statements,
governmental fund financial statements focus on current sources and uses 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.
Most of the Town's basic services are included in governmental funds, which focus on (1) how cash and other financial
assets that can readily be converted to cash flow in and out and (2) the balances left at year-end that are available for
spending. Consequently, the governmental fund statements provide a detailed short-term view that helps you determine
whether there are more or fewer financial resources that can be spent in the near future to finance the Town's programs.
3
Fiduciary Funds
Type of Statements
Government -wide
Governmental Funds
Proprietary Funds
The Town has no Fiduciary Funds for
the year ended 9/30/2004.
Entire government (except
The activities of the Town that are
Activities of the Town that
Instances in which the Town is the
fiduciary funds) and the
not proprietary or fiduciary
operate similar to private
trustee or agent for someone else's
Scope
Town's component units
business, i.c Utility Fund.
resources
* Statement of net
*Balance Sheet
*Statement of net assets
*Statement of fiduciary net assets
Required financial
assets
* Statement of revenues,
*Statement of revenues,
*Statement of changes in fiduciary
statements
* Statement of activities
expenditures & changes in fund
expenses and changes in fund
net assets
balances
net assets
*Statement of cash flows
Accrual accounting and
Modified accrual accounting and
Accrual accounting and
Accrual accounting and economic
economic resources focus
current financial resources focus
economic resources focus
resources focus
Accounting basis and
measurement focus
All assets and liabilities,
Only assets expected to be used
All assets and liabilities both
All assets and liabilities, both short -
both financial and capital,
up and liabilities that come due
financial and capital, and
tern and long-term, the Agency's
Type of asset/liability
short -tern and long-term
during the year or soon thereafter,
short-term and long-term.
funds do not currently contain capital
information
no capital assets included
assets, although they can.
All revenues and expenses
Revenues for which cash is
All revenues and expenses
All revenues and expenses during
during year, regardless of
received during or soon after the
during year, regardless of
year, regardless of when cash is
Type of inflow/outflow
when cash is received or
end of the year, expenditures
when cash is received or paid
received or paid
information
paid,
when goods or services have been
received and payment is due
during the year or soon thereafter
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for
specific activities or objectives. The Town, like other state and local governments, uses fund accounting to ensure and
demonstrate compliance with finance -related legal requirements. Below are the three types of funds. The Town had only
"Governmental funds and Propriety funds" for the year ended September 30, 2004.
Governmental funds—Governmental funds are used to account for essentially the same functions reported as governmental
activities in the government -wide financial statements. However, unlike the government -wide financial statements,
governmental fund financial statements focus on current sources and uses 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.
Most of the Town's basic services are included in governmental funds, which focus on (1) how cash and other financial
assets that can readily be converted to cash flow in and out and (2) the balances left at year-end that are available for
spending. Consequently, the governmental fund statements provide a detailed short-term view that helps you determine
whether there are more or fewer financial resources that can be spent in the near future to finance the Town's programs.
3
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 five 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, Visitor's Association, Westlake Academy General, Westlake Academy Federal and the Capital Projects funds, all
of which are presented as major funds.
The Town adopts an annual appropriated budget for its general fund. A budgetary comparison statement has been provided
for the general fund to demonstrate compliance with this budget.
Proprietary funds— There are two types of Proprietary funds, Enterprise Funds and Internal Service Funds. The Town
maintains one type of proprietary fund – an enterprise fund. Enterprise funds are used to report the same functions
presented as business -type activities in the government -wide financial statements. The Town uses an enterprise fund to
account for its water and sewer activities. 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.)
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 has no 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.
GOVERNMENT -WIDE FINANCIAL ANALYSIS
As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. As of September
30, 2004, the Town's assets exceeded liabilities by $17,110,827.
With the first year implementation of GASB Statement No. 34, the Town is not presenting comparable columns in the
various comparisons and analyses for the prior year.
Statement of Net Assets
Net Assets:
Invested in Capital Assets, net of Related Debt 9,084,603 8,118,139 17,202,742
Restricted 124,185 124,185
Unrestricted 1,246,351 (1,462,451) (216,100)_
Total Net Assets $ 10,455,139 $ 6,655,688 $ 17,110,827
I.1
Governmental
Business -Type
Activities
Activities
Total
2004
2004
2004 _
Current and Other Assets
$ 2,935,269
$ 234,455
$ 3,169,724
27,894,603
14,657,530
42,552,133
Capital Assets
30,829,872
14,891,985
45,721,857
Total Assets
Long-term Liabilities Outstanding
19,113,943
5,931,254
25,045,197
Other Liabilities
1,260,790
2,305,043
3,565,833
Total Liabilities
20,374,733
8,236,297
28,611,030
Net Assets:
Invested in Capital Assets, net of Related Debt 9,084,603 8,118,139 17,202,742
Restricted 124,185 124,185
Unrestricted 1,246,351 (1,462,451) (216,100)_
Total Net Assets $ 10,455,139 $ 6,655,688 $ 17,110,827
I.1
Governmental activities: Governmental activities decreased the Town's net assets by $790,634. Key elements of this
decrease are noted in the "Change in Net Assets" on the next page.
• Sales taxes decreased by $324,984 during the year. The major portion of this decrease is due to the receipt of
approximately $608,000 in audit collections during fiscal year 2003 as opposed to $249,203 during the current
year.
• Operating grants for governmental activities increased by $1,458,100. This is due to the inception of Westlake
Academy with foundation funds from the state and the federal funds received from the start-up grant for charter
schools.
• The hotel occupancy taxes increased by $67,633 for the current year.
• The expense increase of $1,655,212 for Education is related to the first full year of operations for the Academy.
• Payroll and related items increased by approximately $320,000, a 34%, increase over the prior year.
Approximately $180,000 was due to the addition of new staff, as well as the total fiscal year (12 months) of
employment of the EMS department and several other employees hired mid -year in FY 2003.
Business -type activities: Business -type activities decreased the Town's net assets by $498,176. Below are the major
variances related to this decrease:
• The decrease in total "net operating loss" of $229,108 between fiscal years 2003 and 2004 can be explained by the
payment of $253,275 to Southlake related to the wastewater treatment settle -up during the 2003 fiscal year.
• The expenses only increased by $43,842 which can be attributed to the Public Works Superintendent being
employed for the entire year as opposed to 2 months in the previous year as well as the excess water purchases due
to the addition of customers.
Change in Net Assets
Expenses:
Governmental
Business -Type
General government
Activities
Activities
Total
Public safety
2004
2004
2004
Revenues:
3,622
3,622
Program revenues:
53,006
53,006
Charges for services
$ 1,557,245
$ 1,200,660
$ 2,757,905
Operating grants and contributions
1,605,091
1,605,091
Capital grants and contributions
263,941
263,941
General revenues:
1,655,212
1,655,212
Taxes:
1,012,982
1,012,982
Sales taxes
868,046
1,702,081
868,046
Hotel occupancy taxes
440,849
_ 1,702,081
440,849
Mixed beverage taxes
10,511
(498,176)
10,511
Franchise taxes
337,222
337,222
Unrestricted grants
937,187
7,153,864
937,187
Interest on investments
33,180
3,245
36,425
Miscellaneous
134,717
134,717
Total revenues
6,187,989
1,203,905
7,391,894
Expenses:
General government
1,862,863
1,862,863
Public safety
1;604,171
1,604,171
Culture and recreation
3,622
3,622
Economic development
53,006
53,006
Public works
533,290
533,290
Protective inspections
80,935
80,935
Visitor services
172,542
172,542
Education
1,655,212
1,655,212
Interest on long-term debt
1,012,982
1,012,982
Water and sewer
1,702,081
1,702,081
Total expenses
6,978,623
_ 1,702,081
8,680,704
Change in net assets
(790,634)
(498,176)
(1,288,810)
Prior period adjustment
32,828
32,828
Net assets, beginning of year
11,212,945
7,153,864
18,366,809
Net assets, end of year
$ 10,455,139 $
6,655,688
$ 17,110,827
FINANCIAL ANALYSIS OF THE TOWN'S FUNDS
Governmental funds. The focus of the Town's governmental funds is to provide information on near-term inflows,
outflows, and balances of spendable resources. Such information is useful in assessing the Town's financing requirements.
In particular, unreserved fund balance may serve as a useful measure of a Town's net resources available for spending at
the end of the fiscal year.
At the end of the current fiscal year, the Town's governmental funds reported combined ending fund balances of
$2,044,286, a decrease of $2,884,388 in comparison with the prior year. The majority of this decrease, $2,535,282 is due to
the completion of the civic campus project.
Proprietary funds. The Town's proprietary fund statements provide the same type of information found in the
government -wide financial statements but in more detail.
General Fund Budgetary Highlights
The General Fund budget was amended in total to increase the excess of revenues over expenditures to $821,856. This was
mostly due to the anticipation of mall development fees and the expenditures related to this along with an increase in
engineering, legal, personnel related expenses and utilities.
The actual year-end excess expenditures over revenues of $608,175 are due to the fact the Town did not dissolve the 4A
Economic Development Fund and create a Crime Control District which was anticipated in the adopted budget. The
transfer -in from these funds of $646,964 was to cover the Keller police contract.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS
• We anticipate that FY 2004/2005 will end with the ground breaking for the long awaited mall on the Circle T Ranch.
The mall is planned to open in May of 2007. While the mall generates substantial new development fees and promises
positive sales tax revenue, it prompts the beginning of a number of expanded level service packages from building
inspections to the Department of Public Safety that will begin gearing up during the FY 2004/2005.
• Public Safety in Westlake continues to grow due to the cross training of members of the Westlake DPS. All but one of
our certified fire fighter paramedics is also a peace officer. A number of our Fire/EMS employees have finished Police
Academy and are certified Public Safety Officers. This has helped to increase our citation and warrant revenue as well
as make our Public Safety division more flexible when crisis arise.
• Water rates will be going down in FY 2004/2005 for Town residents and businesses, but due to the increased number
of users, revenues should go up. New leases for the duct bank are also anticipated on additional duct bank to be
installed by the Town from Pearson Road to Vaquero on the north side of Dove Road.
• The Utility Fund will take on a new role during FY 2004/2005 as the billing process is brought in-house. A third party
will print the bills and mail them but the Town will be responsible for collecting the total amounts owed for each
account. This should allow for a much more personal level of service to customers when problems arise.
• During FY 2003/2004, the first official employee of the Visitor's Association was hired. This new position will assist
the Marriott marketing staff in increasing occupancy to the hotel, which in turn increases revenue to the Town's
Visitors Association fund. A significant new program proposed in the FY 2004/2005 budget is an airport
transportation shuttle to deliver and return Marriott visitors to DFW Airport. It is projected that this new program, for
which the town will expend from $170,000 to $200,000 depending upon success, will add room rate as well as room
nights.
• During FY 2004/2005, the 4A Development Fund will continue to honor its Fidelity Tax reimbursement requirement
as well as fund the SH 114 Commercial Growth program designed to improve the Town's ability to attract new and
quality commercial growth and the jobs that accompany them.
The FY 2004/2005 budget covers a much larger spectrum than any Westlake budget before. The Town is still emphasizing
reducing expenditures where possible and ensuring new expenditures, such as maintenance, are useful and cost effective.
We are also aggressively researching new revenue sources. From franchise fees to oil and gas royalties the Town is
searching for ways to maintain services and still avoid a property tax.
Westlake continues to be a challenging and rewarding community. Despite the delays of the mall, the Town has been able
to significantly expand services, lower water rates, and provide new quality facilities without adopting a property tax. The
staff is committed to researching new and innovative projects that will continue to bring in new revenue streams to support
these services and facilities long into the future.
These indicators were taken into account when adopting the general fund budget for 2005.
• The revenue budget has increased from the final 2004 budget of $5.0 million, which includes $421,805 of
contributions from others to $5.4. The 2004 amended budget had anticipated development fees for the mall of
$1.6 million, which were not received for FY 2004; therefore, the $1.6 million was made a part of the FY 2005
budget. The major increase to the FY 2005 budget is the expectation of additional sales taxes, building permits,
inspection/plan reviews, and citation revenue.
Amounts available for appropriation in the general fund budget are $3.59 million, a decrease of $61 thousand from
the final 2004 budget of $4.2 million, which included the $540,836 FM 1938 capital expenditures.
If these estimates are realized, the Town's budgetary general fund fund balance should increase by $1.8 million due mostly
to the development fees of the mall.
CONTACTING THE TOWN'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, customers, 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 the Town's Finance Director, Debbie Piper, at 817-490-5712.
7
ASSETS
Cash and Cash Equivalents
Accounts Receivable (net of allowance)
Notes Receivable
Internal Balances
Due from Primary Government
Prepaid Items
Restricted Assets:
Cash and Cash Equivalents
Capital Assets:
Land and Construction in Progress
Other Capital Assets, Net of Accumulated Depreciation
Total Assets and Other Debits
LIABILITIES AND NET ASSETS
LIABILITIES.
Accounts Payable
Due to Component Units
Deposits
Accrued Interest Payable
Deferred Revenue
Noncurrent liabilities:
Due within one year
Due in more than one year
Total Liabilities
NET ASSETS:
Invested in Capital Assets, net of related debt
Restricted
Unrestricted
Total Net Assets
The accompanying notes are
an integral part of this statement.
TOWN OF WESTLAKE
Statement of Net Assets
September 30, 2004
Primary Government Component Units
Lone Star Westlake Westlake
Governmental Business -type Public Facility 4A 4B
Activities Activities Total Corporation Corporation Corporation
$ 1,979,234
$ 272,344
$ 2,251,578 $
11,494 $ 902,312
$ 505,456
407,486
172,283
579,769
- 72,010
72,010
70,619
-
70,619
30,387
-
305,640
(274,222)
31,418
-
-
-
_
2,798
445,962
48,105
-
48,105
- -
-
124,185
64,050
188,235
-
8,524,588
-
8,524,588
-
19,370,015
14,657,530
34,027,545
-
$ 30,829,872
$ 14,891,985
$ 45,721,857 $
11,494 $ 1,007,507
$ 1,023,428
$ 829,740
$ 90,322
$ 920,062 $
2,798
445,962
448,760
-
64,050
64,050
428,252
1,179,656
1,607,908
-
428,920
428,920
-
96,133
96,133
19,113,943
5,931,254
25,045,197 _
20,374,733 8,236,297 28,611,030
$ 10,107 $ 20,717
10,107 20,717
9,084,603 8,118,139 17,202,742
124,185 - 124,185 - -
1,246,351 (1,462,451 (216,100) 11.494 997.400 1,002,711
$ 10,455,139 $ 6,655,688 $ 17,110,827 $ 11,494 $ 997,400 $ 1,002,711
0
TOWN OF WESTLAKE
Statement of Activities
For the fiscal year ended September 30, 2004
Functions/Programs
Primary government:
Governmental Activities:
General Government
Public Safety
Cultural and Recreational
Economic Development
Public Works
Protective Inspection
Visitor Services
Education
Interest on Long-term Debt
Total governmental activities
Business -type activities:
Water & Sewer
Total business -type activities
Total primary government
Component units:
Lone Star Facility Corporation
Westlake 4A Corporation
Westlake 4B Corporation
The accompanying notes are
an integral part of this statement.
Program Revenues
486,548 - -
1,113,804 - -
$ 1,600,352 $ - $ -
GENERAL REVENUES:
Taxes:
Sales Taxes
Hotel Occupancy Taxes
Mixed Beverage Taxes
Franchise Taxes
Unrestricted Grants
Interest on Investments
Miscellaneous
Total general revenues and transfers
Change in Net Assets
PRIOR PERIOD ADJUSTMENT
NET ASSETS, beginning of year
NET ASSETS, end of year
E
1) -
Charges for
Operating Grants
Capital Grants
Expenses
Services
and Contributions
and Contributions
$ 1,862,863
$ 713,000
$ 233,399
$ -
1,604,171
20,752
8,874
162,202
3,622
-
-
-
53,006
-
-
-
533,290
784,546
-
101,739
80,935
-
-
-
172,542
-
-
-
1,655,212
38,947
349,836
-
1,012,982
-
1,012,982
-
6,978,623
1,557,245
1,605,091
263,941
1,702,081
1,200,660
1,702,081
1,200,660
-
-
$ 8,680,704
$ 2,757,905
$ 1,605,091
$ 263,941
486,548 - -
1,113,804 - -
$ 1,600,352 $ - $ -
GENERAL REVENUES:
Taxes:
Sales Taxes
Hotel Occupancy Taxes
Mixed Beverage Taxes
Franchise Taxes
Unrestricted Grants
Interest on Investments
Miscellaneous
Total general revenues and transfers
Change in Net Assets
PRIOR PERIOD ADJUSTMENT
NET ASSETS, beginning of year
NET ASSETS, end of year
E
1) -
Net (Expense) Revenue and
Changes in Net Assets
Primary Government component units
Lone Star Westlake Westlake
Governmental Business - Type Public Facility 4A 4B
Activities Activities Total Corporation Corporation Corporation
$ (916,464) $ - $ (916,464) $ --
(1,412,343) - (1,412,343) - - -
(3,622) - (3,622) - -
(53,006) - (53,006) - -
352,995 - 352,995 - - -
(80,935) - (80,935) - - -
(172,542) - (172,542) - - -
(1,266,429) - (1,266,429) - -
(3,552,346) - (3,552,346) - -
(501,421) (501,421) - -
(501,421) (501,421) - -
(3,552,346) (501,421) (4,053,767) - - -
(486,548) -
(1,113,804)
(486,548) (1,113,804)
868,046
-
868,046
-
434,023
434,023
440,849
-
440,849
-
-
-
10,511
-
10,511
-
-
'
337,222
-
337,222
-
-
-
937,187
-
937,187
-
-
'
33,180
3,245
36,425
128
12,082
4,741
134,717
-
134,717
-
-
-
2,761,712
3,245
2,764,957
128
446,105
438,764
(790,634)
(498,176)
(1,288,810)
128
(40,443)
(675,040)
32,828
-
32,828
11,212,945
7,153,864
18,366,809
11,366
1,037,843
1,677,751
$ 10,455,139 $
6,655,688
$ 17,110,827 $
11,494
$ 997,400
$ 1,002,711
10
TOWN OF WESTLAKE, TEXAS
BALANCE SHEET
GOVERNMENTALFUNDS
SEPTEMBER 30, 2004
The accompanying notes are
an integral part of this statement.
11
Westlake
Westlake
Academy
Academy
Total
Visitor's
General
Federal
Capital
Govermental
General
Association
Fund
Fund
Projects
Funds
ASSETS:
Cash and cash equivalents $
1,131,241 $
843,082
$
4,911
$
-
$
- $
1,979,234
Receivables
Accounts receivable
299,243
33,171
58,505
16,567
-
407,486
Notes receivable, current
15,964
-
-
-
-
15,964
Due from other funds
403,878
-
26,224
1,398
213,297
644,797
Prepaid items
25,208
-
10,230
12,667
-
48,105
Restricted cash and investments
124,185
-
-
-
-
124,185
Notes receivable, non-current
54,655
-
-
-
54,655
TOTAL ASSETS $
2,054,374 $
876,253
$
99,870
$
30,632
$
213,297 $
3,274,426
LIABILITIES:
Liabilities:
Accounts payable $
725,815 $
50,802
$
48,715
$
4,408
$
- $
829,740
Due to other funds
267,243
6,926
38,764
26,224
-
339,157
Due to component units
2,798
-
-
-
-
2,798
Deferred revenue
58,445
-
-
-
-
58,445
Total liabilities
1,054,301
57,728
87,479
30,632
-
1,230,140
Fund Equity:
Fund balance
Restricted for improvements
124,185
-
-
-
124,185
Reserved to promote tourism
-
818,525
-
-
-
818,525
Reserved for court security
and technology
98,134
-
-
-
-
98,134
Designated for construction
107,289
-
-
-
-
107,289
Unreserved and undesignated
670,465
-
12,391
-
213,297
896,153
Total fund equity
1,000,073
818,525
12,391
-
213,297
2,044,286
TOTAL LIABILITIES AND FUND EQUITY $
2,054,374 $
876,253
$
99,870
$
30,632
$
213,297 $
3,274,426
The accompanying notes are
an integral part of this statement.
11
TOWN OF WESTLAKE
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Assets
Total fund balances -- governmental funds $ 2,044,286
Amounts reported for governmental activities in the statement of net assets
are different because:
Capital assets used in governmental activities are not financial resources
and therefore are not reported as assets in governmental funds. 27,894,603
Receivables for court fines are deferred at the fund level but are recognized
as revenues in the government wide statement of net assets. 58,445
Interest on long term debt is recognized when paid at the fund level but is
accrued when incurred in the government wide statement of net assets. (428,252)
Long-term liabilities, including bonds payable, are not due and payable
in the current period and therefore are not reported at the fund level. (19,113,943)
Total Net Assets - Governmental Activities $ 10.455.139
The accompanying notes are
an integral part of this statement.
12
TOWN OF WESTLAKE, TEXAS
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTALFUNDS
FOR YEAR ENDED SEPTEMBER 30, 2004
REVENUES:
Taxes
Sales
Mixed beverage
Hotel occupancy
Franchise
State program revenues
Federal program revenues
Interest income
Building permits and fees
Fines and penalties
Contributions
Miscellaneous
Total revenues
EXPENDITURES:
Current
General government and administration
Public safety
Cultural and recreational
Economic development
Public works
Protective inspection
Visitor services
Education
Capital outlay
Debt service
Interest - - - - 986,534 986,534
Total expenditures 3,804,486 214,194 1,068,857 299,256 3,599,188 8,985,981
Excess (deficiency) of revenues over expenditures (608,175) 233,318 25,751 - (2,535,282) (2,884,388)
Fund balances, at beginning of year, as previously
stated 1,608,248 585,207 (46,188) - 2,748,579 4,895,846
Prior period adjustment - - 32,828 - - 32,828
Fund balances, at beginning of year, restated 1,608,248 585,207 (13,360) - 2,748,579 4,928,674
Fund balances at end of year $ 1,000,073 $ 818,525 $ 12,391 $ - $ 213,297 $ 2,044,286
The accompanying notes are an
integral part of this statement.
13
Westlake
Westlake
Academy
Academy
Total
Visitor's
General
Federal
Capital
Governmental
General
Association
Fund
Fund
Projects
Funds
$ 868,046 $
- $
- $
- $
- $
868,046
10,511
-
-
-
-
10,511
-
440,849
-
-
-
440,849
337,222
-
-
-
-
337,222
-
-
987,767
8,017
-
995,784
171,076
-
-
291,239
-
462,315
13,306
6,663
-
-
13,211
33,180
802,060
-
-
-
-
802,060
680,794
-
-
-
-
680,794
235,916
-
-
-
1,050,695
1,286,611
77,380
-
106,841
-
-
184,221
3,196,311
447,512
1,094,608
299,256
1,063,906
6,101,593
1,579,124
-
-
-
146,087
1,725,211
1,547,857
-
-
-
-
1,547,857
9,099
-
-
-
-
9,099
53,006
-
-
-
-
53,006
125,499
-
-
-
-
125,499
80,935
-
-
-
-
80,935
-
172,542
-
-
-
172,542
-
-
1,068,857
299,256
-
1,368,1 13
408,966
41,652
-
-
2,466,567
2,917,185
Interest - - - - 986,534 986,534
Total expenditures 3,804,486 214,194 1,068,857 299,256 3,599,188 8,985,981
Excess (deficiency) of revenues over expenditures (608,175) 233,318 25,751 - (2,535,282) (2,884,388)
Fund balances, at beginning of year, as previously
stated 1,608,248 585,207 (46,188) - 2,748,579 4,895,846
Prior period adjustment - - 32,828 - - 32,828
Fund balances, at beginning of year, restated 1,608,248 585,207 (13,360) - 2,748,579 4,928,674
Fund balances at end of year $ 1,000,073 $ 818,525 $ 12,391 $ - $ 213,297 $ 2,044,286
The accompanying notes are an
integral part of this statement.
13
TOWN OF WESTLAKE
Reconciliation of the Statement of Revenues,
Expenditures, and Changes in Fund Balances of Governmental Funds
To the Statement of Activites
Amounts reported for governmental activities in the statement of activities
are different because:
Net changes in fund balances --total governmental funds
Governmental funds report capital outlays as expenditures. However,
in the statement of activities the cost of those assets is allocated over
their estimated useful lives and reported as depreciation expense. This
is the amount by which capital outlays ($2,816,731) exceeded
depreciation ($721,416) in the current period.
Revenues associated with court fines in the statement of activities are
reported on the accrual method and differ from amounts reported at
the fund level on the modified accrual basis.
Interest is accrued on outstanding debt in the government -wide financial
statements, but are recorded in governmental funds as expenditures
when due.
Change in net assets of governmental activities
The accompanying notes are
an integral part of this statement.
14
$ (2,884,388)
2,095,315
24,887
(26,448)
$ (790,634)
TOWN OF WESTLAKE, TEXAS
STATEMENT OF NET ASSETS
PROPRIETARY FUND
SEPTEMBER 30, 2004
General
ASSETS:
Cash and cash equivalents $ 272,344
Accounts receivable 172,283
Due from other funds 53,946
Restricted cash and investments 64,050
Capital assets, net of accumulated depreciation and amortization 14,657,530
TOTAL ASSETS $ 15,220,153
LIABILITIES
Accounts payable
$
90,322
Due to component units
445,962
Accrued interest payable
1,179,656
Due to other funds
328,168
Deferred revenue
428,920
Current liabilities payable from restricted assets
Customer deposits payable
64,050
Noncurrent liabilities
Due within one year
96,133
Due in more than one year
5,931,254
TOTAL LIABILITIES
$
8,564,465
NET ASSETS
Invested in capital assets, net of related debt
$
8,118,139
Unrestricted
(1,462,451)
TOTAL NET ASSETS
$
6,655,688
The accompanying notes are
an integral part of this statement.
15
TOWN OF WESTLAKE, TEXAS
STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET ASSETS
PROPRIETARY FUND
YEAR ENDED SEPTEMBER 30, 2004
OPERATING REVENUES:
Charges for services
OPERATING EXPENSES:
Payroll costs
Professional and contract services
Depreciation
Amortization of wastewater treatment rights
Water purchases
Other operating costs
Total operating expenses
Net operating loss
NON-OPERATING REVENUES(EXPENSES):
Interest income
Interest expense
Net loss
Total net assets, beginning of year
Total net assets, end of year
The accompanying notes are
an integral part of this statement.
16
$ 1,200,660
102,306
150,397
400,706
31,760
332,119
232,089
1,249,377
(48,717)
3,245
(452,704)
(498,176)
7,153,864
$ 6,655,688
TOWN OF WESTLAKE, TEXAS
STATEMENT OF CASH FLOWS
PROPRIETARY FUND
YEAR ENDED SEPTEMBER 30, 2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from customers
Payments to employees
Payments to suppliers
Net cash provided by operating activities
CASH FLOW FROM NONCAPITAL FINANCING
ACTIVITIES:
Net interfund borrowings
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Principal paid on debt
Interest paid on debt
Investment earnings
Purchase of property and equipment
Net cash used in capital and related financing activities
Net decrease in cash
and cash equivalents
Cash and cash equivalents at the
beginning of the year
Cash and cash equivalents at the
end of the year
RECONCILIATION OF TOTAL CASH AND CASH EQUIVALENTS:
Cash and cash equivalents
Restricted cash and cash equivalents
Total cash and cash equivalents
RECONCILIATION OF OPERATING INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Operating loss
Adjustments to reconcile operating loss to net
cash provided by operating activities:
Depreciation and amortization
Changes in operating assets and liabilities:
Receivables
Accounts payable
Customer deposits payable
Deferred revenue
Net cash provided by operating activities
The accompanying notes are
an integral part of this statement.
17
$ 1,295,085
(102,306)
(1,006,564)
186,215
(53,946)
(73,191)
(94,353)
3,245
(41,964)
(206,263)
(73,994)
410,388
$ 336,394
$
272,344
64,050
$ 336,394
$ (48,717)
432,466
(90,102)
(291,959)
20,290
164,237
$ 186,215
TOWN OF WESTLAKE, TEXAS
NOTES TO FINANCIAL STATEMENTS
Note 1. Summary of Significant Accounting Policies
General Statement
The Town of Westlake, Texas (the "Town") was incorporated under the provisions of the laws of
the State of Texas on December 26, 1956. The Town operates under a Board -Manager form of
government and provides the following services as authorized by the laws of the State of Texas:
public safety; cultural and recreation; and economic development.
The accounting and reporting policies of the Town conform with accounting principles generally
accepted in the United States of America applicable to state and local governments. Generally
accepted accounting principles for local governments include those principles prescribed by the
Governmental Accounting Standards Board ("GASB"), the American Institute of Certified Public
Accountants in Industry Audit Guide entitled Audits of State and Local Governmental Units and by
the Financial Accounting Standards Board (when applicable). As allowed in Section P80 of
GASB's Codification of Governmental Accounting and Financial Reporting Standards, the Town
has elected not to apply Financial Accounting Standards Board Statements and Interpretations,
Accounting Principles Board Opinions, and Accounting Research Bulletins of the Committee of
Accounting Procedure issued after November 30, 1989. The more significant accounting policies
of the Town are described below.
Financial Reporting Entity
The Town's combined financial statements include the accounts of the Town's financial reporting
entity, including the primary government, organizations for which the Town is financially
accountable and other organizations for which the nature and significance of their relationship
with the Town are such that exclusion would cause the Town's financial statement to be
misleading or incomplete. The criteria for including organizations as component units within the
Town's reporting entity, as set forth in Section 2100 of GASB's Codification of Governmental
Accounting and Financial Reporting Standards, includes whether:
• the organization is legally separate (can sue and be sued in their own name);
• the Town holds the corporate powers of the organization;
• the Town appoints a voting majority of the organization's board;
• the Town is able to impose its will on the organization;
• the organization has the potential to impose a financial benefit/burden on the Town; and,
• there is fiscal dependency by the organization on the Town.
Component units are blended with the balances and transactions of the Town if one of the
following criterion are met:
• the component unit is substantially the same governing body as the Town; or
• the component unit provides services entirely (or almost entirely) to the Town or benefits the
Town exclusively (or almost exclusively).
Based on the aforementioned criteria, the Town has three discretely presented component units;
Lone Star Public Facilities Corporation, Westlake 4A Corporation and Westlake 4B Corporation.
In addition the Town has one blended component unit, the Westlake Academy.
in
TOWN OF WESTLAKE, TEXAS
NOTES TO FINANCIAL STATEMENTS
Note 1. Summary of Significant Accounting Policies — continued
Component Units
Discretely Presented
Lone Star Public Facilities Corporation is a Texas non-profit corporation that acts on behalf of
the Town to further the public purposes under the Public Facilities Corporation Act, as its'
duly constituted authority and instrumentality. The board of directors, appointed by the
Town's governing body, is comprised of seven members; of whom five must be members of
the Town's governing body.
Westlake 4A Corporation is a Texas non-profit industrial development 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 using the proceeds of a sales and use tax for the promotion and development of
new and expanded business enterprises and any other lawful activities as defined and
permitted under Section 4A of the Act. The board of directors is composed of five persons
appointed by the Town's governing body; two of which are members of the Town's governing
board.
Westlake 4B Corporation is a Texas non-profit 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.
Blended
Westlake Academy ("Academy") is a Texas non-profit Corporation that acts on behalf of the
Town to acquire a charter, under Chapter 12, Subchapter D of the Education Code, provide
education services and acquire, finance, and operate educational facilities. The board
consists of seven directors and is appointed by the Town's governing body. Currently all the
members of the board of directors are members of the Town's governing body. The
Academy's year end is August 31.
Related Organizations
The governing body of the Town is responsible for appointing a voting majority of the board
members, but is not financially accountable for the Texas Housing Corporation, the Texas
Housing Corporation — San Marcus Project, the Texas Housing Corporation — Denton Project, the
Texas Housing Corporation — MSU Project, and the Westlake Academy Foundation.
Government -wide and Fund Financial Statements
The government -wide financial statements (i.e., the Statement of Net Assets and the Statement
of Changes in Net Assets) report information on all of the non -fiduciary activities of the Town. For
the most part, the effect of interfund activity has been removed from these statements. Govern-
mental 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.
19
TOWN OF WESTLAKE, TEXAS
NOTES TO FINANCIAL STATEMENTS
Note 1. Summary of Significant Accounting Policies — continued
Government -wide and Fund Financial Statements - continued
The statement of activities demonstrates the degree to which the direct expenses of a given
function or segment are offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or segment. Program revenues include 1) charges to
customers or applicants who purchase, use, or directly benefit from goods, services, or privileges
provided by a given function or segment and 2) grants and contributions that are restricted to
meeting the operational or capital requirements of a particular function or segment. Taxes and
other items not properly included among program revenues are reported instead as general
revenues.
Separate financial statements are provided for governmental funds and proprietary funds. Major
individual governmental funds are reported as separate columns in the fund financial statements.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government -wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund financial
statements. Revenues are recorded when earned and expenses are recorded when a liability is
incurred, regardless of the timing of related cash flows. Grants and similar items are recognized
as revenue as soon as all eligibility requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as
soon as they are both measurable and available. Revenues are considered to be available when
they are collectible within the current period or soon enough thereafter to pay liabilities of the
current period. For this purpose, the Town considers revenues to be available if they are collected
within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a
liability is incurred, as under accrual accounting. However, debt service expenditures, as well as
expenditures related to compensated absences and claims and judgments, are recorded only
when payment is due.
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.
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.
Me
TOWN OF WESTLAKE, TEXAS
NOTES TO FINANCIAL STATEMENTS
Note 1. Summary of Significant Accounting Policies — continued
Measurement Focus, Basis of Accounting, and Financial Statement Presentation — continued
Visitor's Association — To account for municipal hotel occupancy taxes collected and
expenditures to promote tourism and the convention and hotel industry.
Westlake Academy General Fund — To provide education services and acquire,
finance, and operate educational facilities.
Westlake Academy Federal Fund — To account for the proceeds of federal and state
sources that provide education services.
Capital Projects Fund — To account for proceeds from long-term financing and revenue
and expenditures related to authorized construction and other capital asset acquisitions
and for the accumulation of resources for and the payment of general long-term debt
principal, interest and related costs.
Proprietary Fund Types
Proprietary funds are those used to account for the Town's ongoing organizations and
activities, which are similar to those found in the private sector. The measurement focus is
upon capital maintenance and upon determination of net income, financial position and
changes in financial position. The following are the proprietary fund types maintained by the
Town:
Enterprise Fund — To account for revenues and expenses related to providing water and
sewer services to the general public on a continuing basis. Enterprise fund equity is
segregated into contributed capital and retained earnings.
Use of Estimates
The preparation of the general purpose financial statements in conformity with accounting
principles generally accepted in the United States of America requires the Town to make
estimates and assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results may differ from those estimates.
Cash and Investments
Cash and cash 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.
All investments are recorded at fair value based on quoted market prices. Fair value is the
amount at which a financial instrument could be exchanged in a current transaction between
willing parties.
Interfund Receivables and Payables
Short-term amounts owed between funds are classified as "due to/from other funds." Amounts
owed between funds payable in more than one year are classified as "advances to/from other
funds."
21
TOWN OF WESTLAKE, TEXAS
NOTES TO FINANCIAL STATEMENTS
Note 1. Summary of Significant Accounting Policies - continued
Fund Changes and Transactions Between Funds
Legally authorized transfers are treated as operating transfers and are included in the results of
operations of both governmental and proprietary funds.
The Town allocates to the Enterprise Funds an indirect cost percentage of the salaries and
wages and related costs of personnel who perform administrative services for those funds but are
paid through the general fund along with other indirect costs deemed necessary for their
operations.
Capital Assets
All fixed assets are valued at historical cost or estimated historical cost if actual historical cost
is not available. Donated assets are valued at their fair market value on the date donated.
Assets capitalized have an original cost of $5,000 or more and over three years of life.
Depreciation has been calculated on each class of depreciable property using the straight-
line method. Estimated useful lives are as follows:
Water and sewer system 10-50 years
Buildings 20-50 years
Machinery and equipment 4-10 years
Improvements 5-30 years
Compensated Absences
The Town's policy allows employees to earn 10 days of vacation per year of employment. After
completion of five years of service, 15 days per year are earned. After completion of 10 years of
service, 20 days per year are earned. No accumulated, unused sick time is payable upon
termination or retirement.
Reserved and Designated Fund Equity
Reserved fund balances are not appropriable for expenditure or are legally segregated for a
specific future use. Designated fund balances are established to indicate tentative plans for
financial resources utilization in a future period.
Note 2. Deposits and Investments
State statutes govern the Town's investment policies. Town funds are deposited in U.S. Federal
Deposit Insurance Corporation ("FDIC") insured banks located within the Town and in the State of
Texas Local Government Investment Pool ("TexPool"). Permissible investments include the
following:
1. Obligations of the U.S. or its agencies and instrumentalities;
2. Direct obligations of the State of Texas or its agencies;
3. Other obligations, the principal and interest of which are unconditionally guaranteed by
the State of Texas or the United States;
22
TOWN OF WESTLAKE, TEXAS
NOTES TO FINANCIAL STATEMENTS
Note 2. Deposits and Investments - continued
4. Obligations of states, agencies, counties, cities and other political subdivisions of any
state having been rated as to the investment quality by a nationally recognized
investment firm and having received a rating of not less than A or its equivalent;
5. Certificates of deposit issued by state and national banks domiciled in the State of Texas
that are guaranteed or insured by the FDIC or secured by other obligations that have a
market value of not less than the principal amount of the certificates; and,
6. Fully collateralized direct repurchase agreements having a defined termination date,
secured by direct obligations of the United States or its agencies and instrumentalities,
pledged with a third party selected or approved by the Town, and placed through a
primary government securities dealer, as defined by the Federal Reserve, or through a
bank domiciled in the State of Texas.
The Town did not engage in repurchase or reverse repurchase agreement transactions during the
current year.
Cash deposits held at financial institutions can be categorized according to three levels of risk. These
three levels of risk are:
Category 1 Deposits which are insured or collateralized with securities held by the Town or
by its agent in the Town's name.
Category 2 Investments that are uninsured and unregistered held by the pledging financial
institution's trust department or agent in the Town's name.
Category 3 Uninsured and unregistered investments held by the pledging financial
institution, its trust department or its agent, but not in the Town's name.
During the year ended September 30, 2004, the Town had investments with TexPool. TexPool, a
public funds investment pool created by the Treasurer of the State of Texas acting by and through the
Texas Treasury Safekeeping Trust Company, is empowered to invest funds and acts as custodian of
investments purchased with local investment funds. These investments are not required to be
categorized because the investor is not issued securities, but rather it owns an undivided beneficial
interest in the assets of the respective funds. The fair value of the position in TexPool is the same as
the value of the pool shares.
On September 1, 1989, local government investment pools became authorized investments for the
majority of public entities in Texas. The Interlocal Cooperation Act was amended by the 71s` Texas
Legislature to facilitate the creation of local government investment pools in Texas. This act permits
the creation of investment pools to which a majority of political subdivisions (local governments) may
delegate, by contract, the authority to make investments purchased with local investment funds and
to hold legal title as custodian of the investments. TexPool was organized to conform with the
Interlocal Cooperation Act, Chapter 791 of the Texas Government Code, and the Public Funds
Investment Act, Chapter 2256 of the Texas Government Code.
23
TOWN OF WESTLAKE, TEXAS
NOTES TO FINANCIAL STATEMENTS
Note 2. Deposits and Investments - continued
At September 30, 2004, the Town's investments included investment pools in the name of the Town
or its agent in the Town's name. The Town's investments were as follows:
Primary Government
Investments:
Government Pool
Cash
Total cash and investments
Carrying
Fair
Amount
Value
$ 1,730,736
$ 1,730,736
709.077
709,077
12-439 ,813 2 439 813
Reconciliation of total cash and investments at September 30, 2004 are as follows:
Cash and cash equivalents $ 2,251,578
Restricted cash and investments 188,235
2 439,813
The Town's entire cash deposits in the bank of $369,653 on September 30, 2004, were covered by
federal depository insurance or by collateral held by the Town's agent in the Town's name.
Component Units
Investments:
Government Pool
Carrying
Fair
Amount
Value
$ 1,419,262
$ 1,419,262
Note 3. Accounts Receivable
The Town's accounts receivable balances consist of the following at September 30, 2004:
Primary Government
24
Enterprise
Fund Total
$ - $144,019
- 82,499
- 33,171
- 85,872
- 58,445
172,283 172,283
- 3,480
172 m &579.769
Westlake
Westlake
Academy
Academy
General
General
Federal
Visitor's
Fund
Fund
Fund
Association
Taxes:
Sales
$144,019
$ -
$ -
$ -
Franchise
82,499
-
-
-
Hotel/Motel
-
-
33,171
Federal and state
10,800
58,505
16,567
-
programs
Court Fines
58,445
-
-
-
Charges for service
-
-
-
Miscellaneous
3.480
-
-
$299 243
$5 .505
$_1.6.51zZ
$_3 M71
24
Enterprise
Fund Total
$ - $144,019
- 82,499
- 33,171
- 85,872
- 58,445
172,283 172,283
- 3,480
172 m &579.769
TOWN OF WESTLAKE, TEXAS
NOTES TO FINANCIAL STATEMENTS
Note 3. Accounts Receivable - continued
Component Units
Westlake
4A
Corporation
Taxes:
Sales $ 72-10
Westlake
4B
Corporation
$ 72.010
Total _
$ 144.020
Note 4. Capital Assets
A summary of the changes in capital assets for the year ended September 30, 2004:
Beginning Ending
Balance Increases Decreases —Transfers Balance
General Capital Assets:
Capital Assets, not Being
Depreciated:
Land
$ 8,482,936
Construction in Progress
$ 8,482,936
Total General Capital Assets,
-
not Being Depreciated
_ 41,652
Capital Assets, Being
$ -__
Depreciated:
$_8.524.5$$
Capital Improvements
$ 3,853,220
Buildings
14,062,092
Machinery and Equipment
1,234,490
Total General Capital Assets
19,149,802
Being Depreciated
196,660
Less Accumulated
1862,784
Depreciation
1,833,450
Total General Capital Assets
$17 916x52
Being Depreciated, Net
196,660
Business -type Activities:
2,358,206
Construction in Progress
S 405,543
Capital Assets, Being
$-19,370.M
S
Depreciated:
$ -
Capital Improvements
$11,845,132
Wastewater Treatment Rights
635,199
Machinery and Equipment
3,346,424
Total General Capital Assets
15,826,755
Being Depreciated
3,346,424
Less Accumulated
1,184,264
Depreciation
16,274,260
Total General Capital Assets
$14.642,491
Being Depreciated, Net
1,616,730
$ -
$
$
$ 8,482,936
41,652
-
___
_ 41,652
41,652
$ -__
$_8.524.5$$
$ 61,508
$ -
$
$ 3,914,728
1,888,617
-
15,950,709
824.954
196,660
1862,784
2,775,079
196,660
-
21,728,221
721,416
196,660
2,358,206
$2,053=
$ _
$
$_ -
$-19,370.M
S
$ 41,962
$ _
$ -
$ 447,505
$12,292,637
-
-
635,199
3,346,424
-
447,505
16,274,260
432,466
=
_ -
1,616,730
X43. 2,4661
-
X447.895
$14,657 530
Depreciation was charged to departments of the primary government as follows:
General Government $ 157,846
Public Safety 56,314
Public Works 220,157
Education 287,099
Total _$ 721416
25
TOWN OF WESTLAKE, TEXAS
NOTES TO FINANCIAL STATEMENTS
Note 5. Restricted Assets/Net Assets
General Fund
Within the general fund, $124,185 represents funds contributed by a third party for trail and
underpass improvements, to be held in escrow until certain improvements are completed.
Proprietary Fund
Within the proprietary funds, $64,050 of the fund represents customer deposits received for water
and sewer usage that are refundable upon termination of service.
Note 6. Interlocal Agreement with Trophy Club/Westlake Department of Public Safety
On April 24, 2000, the Town approved an interlocal agreement with the Trophy Club/Westlake
Department of Public Safety ("DPS"), which called for the Town of Westlake to participate in the
financing of an emergency vehicle for the DPS. The Town recorded a note receivable of $125,000
based on the terms of the interlocal agreement.
The Agreement calls for eight principal and interest payments to the Town, with interest calculated at
a stated rate of 6.75%. The schedule of future collections by the Town under this agreement, in each
of the next five fiscal years, is as follows:
Fiscal Year Ended
September 30,
Principal
Interest
Total
2005
$ 15,964
$ 4,767
$ 20,731
2006
17,042
3,689
20,731
2007
18,192
2,539
20,731
2008
19,421
1,311
20,732
Total$—$
-2 925
Effective June 1, 2002, the Trophy Club/Westlake Department of Public Safety was officially
dissolved. The Town of Trophy Club will continue to repay the remaining debt according to the terms
of the note.
Note 7. General Long -Term Debt
On June 9, 2003, the Town issued approximately $6,410,000 in Combination Tax and Limited Pledge
Revenue Certificates of Obligation, Series 2003, with interest rates ranging from 2.00% to 5.00%
maturing in 2032. The proceeds from the sale of the Certificates were used to build a new municipal
complex in Westlake, Texas.
26
TOWN OF WESTLAKE, TEXAS
NOTES TO FINANCIAL STATEMENTS
Note 7. General Long -Term Debt - continued
A summary of the changes in general long-term debt for the year ended September 30, 2004 follows:
Description
Combination Tax
and Limited
Pledge Revenue
Certificates of
Obligation,
Series 2002
Combination Tax
and Limited
Pledge Revenue
Certificates of
Obligation,
Series 2003
Fidelity Tax
Reimbursement
Total
Interest Original Outstanding Outstanding
Rate Issue 10/01/03 Issued Retired 9/30/04 Current _
5.75%
to
6.50%
2.00%
to
5.00%
5.75%
$12,400,000 $12,400,000 $ - $ - $12,400,000 $ -
6,410,000 6,410,000 6,410,000
536,374 287,417 16,526 303,943
$19.097.417 $ 16 $ 19111943 $
Debt service requirements of certificates of obligation to be retired from governmental funds are as
follows:
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 thirty days of each calendar quarter from the sales taxes received by the Town. On
November 13, 2000, the agreement was amended to allow for a payment schedule of fifteen annual equal
installments for sales tax rebate due and payable to Fidelity. The amount due will not bear interest. The
loan is discounted to present value and amortized over the life of the loan using the effective interest
method.
27
Amount of Schedule Requirements
_
Fiscal Year Ended
Total
September 30,
Principal
Interest
Requirements
2005
$
$ 1,027,804
$ 1,027,804
2006
350,000
1,027,804
1,377,804
2007
370,000
1,011,354
1,381,354
2008
380,000
993,249
1,373,249
2009
400,000
974,059
1,374,059
2010-2014
2,310,000
4,528,624
6,838,624
2015-2019
2,935,000
3,819,383
6,754,383
2020—
2024
3,735,000
2,936,151
6,671,151
2025
—2029
4,805,000
1,801,060
6,606,060
2029
—2032
_ 3,525,000
397,060
3,922,060
Total
1$ 810 900
$ 18,516-548
$ 37,326 548
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 thirty days of each calendar quarter from the sales taxes received by the Town. On
November 13, 2000, the agreement was amended to allow for a payment schedule of fifteen annual equal
installments for sales tax rebate due and payable to Fidelity. The amount due will not bear interest. The
loan is discounted to present value and amortized over the life of the loan using the effective interest
method.
27
TOWN OF WESTLAKE, TEXAS
NOTES TO FINANCIAL STATEMENTS
Note 7. General Long -Term Debt — continued
Debt service requirements for deferred rebates to be retired from governmental funds are as follows:
The Certificates of Obligations, 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').
Note 8. Proprietary Long -Term Debt
Trinity River Authority Wastewater Treatment System
On February 14, 2000, the Town approved an agreement with the Trinity River Authority to buy
into a portion of the Denton Creek Regional Wastewater Treatment System for a sum of
$141,980. The Town recorded a contractual obligation based upon the terms of the agreement,
which required 5 annual principal and interest payments to the Trinity River Authority, with
payments due each February 16 at an interest rate of 6%. The debt was paid in full during the
year ended September 30, 2004.
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%.
W
Amount of Schedule Requirements
Fiscal Year Ended
Total
September 30,
Principal
Discount
Requirements
2005
$ 18,281
$ 17,477
$ 35,758
2006
19,333
16,425
35,758
2007
20,444
15,314
35,758
2008
21,620
14,138
35,758
2009
22,863
12,895
35,758
2010-2014
135,613
43,178
178,791
2015-2016
65,789
5,727
71.516
Total
X303 943
$125 154
429 097
The Certificates of Obligations, 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').
Note 8. Proprietary Long -Term Debt
Trinity River Authority Wastewater Treatment System
On February 14, 2000, the Town approved an agreement with the Trinity River Authority to buy
into a portion of the Denton Creek Regional Wastewater Treatment System for a sum of
$141,980. The Town recorded a contractual obligation based upon the terms of the agreement,
which required 5 annual principal and interest payments to the Trinity River Authority, with
payments due each February 16 at an interest rate of 6%. The debt was paid in full during the
year ended September 30, 2004.
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%.
W
TOWN OF WESTLAKE, TEXAS
NOTES TO FINANCIAL STATEMENTS
Note 8. Proprietary Long -Term Debt - continued
Dove Road Water Line and West Pump Station
In April 2000, the Town approved an agreement with the Hillwood Development Corporation
("Hillwood"). In the agreement, Hillwood agreed to bear all initial costs for the design, engineering
and constructions of the Dove Road Water Line and the West Pump Station that will serve the
residents of the Town. The Town agreed to reimburse Hillwood for the cost of the project upon
completion and the Town's acceptance of the project, which occurred in June 2001, solely from a
$.25 charge per 1,000 gallons of usage. The Town further agreed to deposit debt service
revenue of $.25 per 1,000 gallons of usage collected from Town residents to fund its repayment
to Hillwood. Debt service revenue will be allocated between Hillwood service area and Town
service area by 52% and 48%, respectively and deposited into two separate debt service funds
that will result in debt service revenue to pay the respective share of the construction cost. The
Town recorded a limited pledge contractual obligation of $4,679,944 for the project cost based
upon the terms of the agreement, which requires 239 monthly principal and interest payments to
Hillwood, at an interest rate of 6.75%. If the Town collects insufficient funds to pay current
interest on the debt, the interest payment may be deferred. No portion of debt payments will be
applied to the principal component, until all current and deferred interest is fully paid.
Proprietary long-term debt as of September 30, 2004 is as follows:
Description
Contractual Obligations:
Trinity River Authority
Wastewater Treatment
System
Elevated Water Storage
Facility
Limited Pledge Contractual
Obligation:
Dove Road Water Line and
West Pump Station
Outstanding
Amount of Schedule Requirements
Outstanding
Fiscal Year Ended
10/01/03 Issued
Retired
9/30/04
_-Current
Principal
Interest
Requirements
$ 28,331 $ -
$ 28,331
$ -
$ -
1,392.302 -
44,859
1,347,443
96,133
1,420,633 -
73,190
1,347,443
96,133
679,944 -
-
4,679,944
613,133
$6.109-577 $. -
$ 73.190
Sax—7m
548,262
The schedule of future payments by the Town under these agreements is as follows:
29
Amount of Schedule Requirements
Fiscal Year Ended
Total
September 30,
Principal
Interest
Requirements
2005
$ 96,133
$ 1,579,841
$ 1,675,974
2006
52,873
498,337
551,210
2007
56,082
525,082
581,164
2008
59,277
553,856
613,133
2009
64,082
484,180
548,262
2010-2014
381,322
3,469,264
3,850,586
2015-2019
514,299
4,647,858
5,162,157
2020 —2021
4,803,319
1,888,995
6,692,314
Total
$ 6027 387
$ 13 647.413
X9.,674,800
29
TOWN OF WESTLAKE, TEXAS
NOTES TO FINANCIAL STATEMENTS
Note 9. Deferred Revenue
Deferred revenue in the proprietary fund of $428,920 relates to the collection of the entire amount due
on a 25 and 20 year lease with Verizon Southwest and AT&T Local Network Services, respectively
for use of the Town's ductbank.
Note 10. Commitments and Contingencies
Lease Obligations
The Town has commitments relative to municipal services, and contractual relationships
concerning certain utilities and public safety resources, which are normal in its ongoing activity.
Non -cancelable obligations consist of agreements for services at September 30, 2004
Minimum lease payments and contractual obligations under these non -cancelable leases and
agreements as of September 30, 2004 are as follows:
Fiscal Year End,
September 30, Amount
2005
$ 11,121
2006
8,631
2007
2,431
Total
S2-2183
Rental expenditures in 2004 were $21,475.
Interlocal Agreement with City of Keller for Police Services
In June 2002, the Town entered into an agreement with the City of Keller to provide certain
services including police patrol units, 24-hour police dispatch, animal control and enforcement, jail
capacity and housing for prisoners, and human resources for certain personnel for an initial term
of 28 months commencing on June 1, 2002, and ending September 30, 2004.
Under the agreement, fiscal year 2004 annual payment amounts was based on the City of
Keller's budgeted amount for the police services being provided. Total payments under this
agreement for fiscal year 2004 were $646,772.
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.
30
TOWN OF WESTLAKE, TEXAS
NOTES TO FINANCIAL STATEMENTS
Note 11. Federal and State Program Revenues
The Town received financial assistance from various federal and state governmental agencies in the
form of grants. The disbursement of funds received under these programs generally requires
compliance with terms and conditions specified in the grant agreements and are subject to audit by
the grantor agencies. Any unallowed disbursement resulting from such audits becomes a liability of
the Town. In the opinion of the Town management, no material refunds will be required as a result of
unallowed disbursements (if any), by the grantor agencies.
Sources of federal and state program revenues for the year ended September 30, 2004, were as
follows:
General Westlake
Source CFDA # Fund Academy Total
Federal program revenues:
Federal Emergency Management Agency
U.S. Department of Education — passed
through State Department of Education
State program revenues:
State Department of Education
Note 12. Excess of Expenditures over Appropriations
General Fund
83.554 $ 171,076 $ $ 171,017
84.22A 291,239 291,239
$ 171,076 $291,239 $462,315
N/A $_._— 995 784 995 784
Excess of expenditures over appropriations in general government are a result of unanticipated
expenditures including engineering and legal fees due to accruals that were budgeted to be spent
in the previous year that were not paid until the current budget year because of project delays.
The excess in the public works division is related to right-of-way watering. Prior to July 2004, the
Town outsourced the meter reading and accounts payable process for water billing. Upon the
conversion to perform these duties in-house, the Town became aware of a meter that was being
billed incorrectly to a third party. This was rectified and is now being charged correctly to the
Town.
Note 13. Retirement Plan
Plan Description
The Town provides pension benefits for all of its full-time employees through a non-traditional,
joint contributory, hybrid defined contribution plan in the statewide Texas Municipal Retirement
System ("TMRS"), one of 794 administered by TMRS, an agent multiple -employer public
employee retirement system.
31
TOWN OF WESTLAKE, TEXAS
NOTES TO FINANCIAL STATEMENTS
Note 13. Retirement Plan — continued
Plan Description - continued
Benefits depend upon the sum of the employee's contributions to the plan, with interest, and the
Town -financed monetary credits, with interest. At the date the plan began, the Town granted
monetary credits for service rendered before the plan began of a theoretical amount equal to two
times what would have been contributed by the employee, with interest, prior to establishment of
the plan. Monetary credits for service since the plan began are 200% of the employee's
accumulated contributions.
In addition, the Town can grant, as often as annually, another type of monetary credit referred to
as updated service credit which is a theoretical amount which, when added to the employee's
accumulated contributions and the monetary credits for service since the plan began, would be
the total monetary credits and employee contributions accumulated with interest if the current
employee contribution rate and Town matching percent had always been in existence and if the
employee's salary had always been the average of his/her salary in the last three years that are
one year before the effective date. At retirement, the benefit is calculated as if the sum of the
employee's accumulated contributions with interest and the employer -financed monetary credits
with interest were used to purchase an annuity.
The plan provisions are adopted by the governing body of the Town, within the options available
in the state statues governing TMRS and within the actuarial constraints also in the statues.
Deposits are at a rate of 7%, and the Town matching ratio is currently 2 to 1. An employee is
vested after 5 years of service. Employees can retire at age 60 with 5 years of service or at any
age after 20 years of service with the Town.
Contributions
Under the state law governing TMRS, the actuary annually determines the Town contribution
rate. This rate consists of the normal cost contribution rate and the prior service contribution rate,
both of which are calculated to be a level percent of payroll from year to year. The normal cost
contribution rate finances the currently accruing monetary credits due to the Town matching
percent, which are the obligation of the Town as of an employee's retirement date, not at the time
the employee's contributions are made. The normal cost contribution rate is the actuarially
determined percent of payroll necessary to satisfy the obligation of the Town to each employee at
the time his/her retirement becomes effective. The prior service contribution rate amortizes the
unfunded (overfunded) actuarial liability (asset) over the remainder of the plan's 25 -year
amortization period. The unit credit actuarial cost method is used for determining the Town
contribution rate. Both the employees and the Town make contributions monthly. Since the
Town needs to know its contribution rate in advance for budgetary purposes, there is a one-year
delay between the actuarial valuation that serves as the basis for the rate and the calendar year
when the rate goes into effect.
Schedule of Actuarial Liabilities and Funding Progress
Actuarial valuation date
12/31/2003
12/31/2002
Actuarial value of assets
$
212,522
$
72,133
Actuarial accrued liability
$
230,684
$
94,105
Percentage funded
92.1%
76.7%
Unfunded actuarial accrued liability ("UAAL")
$
18,162
$
21,972
Annual covered payroll
$
844,639
$
376,635
UAAL as a percentage of covered payroll
2.2%
5.8%
Net pension obligation ("NPO") at the beginning
of the year
$
$
Annual required contribution
99,983
65,044
Contributions made
(
99,983)
(
65,044)
NPO at the end of the year
32
TOWN OF WESTLAKE, TEXAS
NOTES TO FINANCIAL STATEMENTS
Note 13. Retirement Plan — continued
Actuarial Assumptions
Actuarial cost method
Unit credit
Amortization method
Level percent of payroll
Remaining amortization period
25 years — open period
Asset valuation method
Amortized cost
Investment rate of return
7%
Projected salary increases
None
Includes inflation at
None
Cost of living adjustments
None
Note 14. Interfund Balances and Transactions
(1) Interfund receivables and payables at September 30, 2004 were as follows:
698 743
Due to
Other Funds
213,297
53,946
6,926
37,366
1,398
26,224
328,168
667,325
These balances represent timing differences related to routine advances from the Town for water
and sewer and academy operations and other capital transactions. Interfund receivables and
payables between the Westlake Academy General Fund and the Town differ by $31,418 as a
result of different fiscal year ends. Amounts totaling $66,043 represent advances for capital
expenditures and are to be repaid over a 15 year term.
33
Due from
Fund
Other Funds
General Fund
Visitor's Association
$ 6,926
Westlake Academy General Fund
68,784
Capital Projects Fund
Enterprise Fund
328,168
Special Revenue Funds:
Visitor's Association
General Fund
Westlake Academy General Fund
General Fund
Westlake Academy Federal Fund
26,224
Westlake Academy Federal Fund
Westlake Academy General Fund
1,398
Capital Projects Fund
General Fund
213,297
Enterprise Fund
General Fund
53,946
698 743
Due to
Other Funds
213,297
53,946
6,926
37,366
1,398
26,224
328,168
667,325
These balances represent timing differences related to routine advances from the Town for water
and sewer and academy operations and other capital transactions. Interfund receivables and
payables between the Westlake Academy General Fund and the Town differ by $31,418 as a
result of different fiscal year ends. Amounts totaling $66,043 represent advances for capital
expenditures and are to be repaid over a 15 year term.
33
TOWN OF WESTLAKE, TEXAS
NOTES TO FINANCIAL STATEMENTS
Note 14. Interfund Balances and Transactions - continued
(2) Receivable and payable balances between the Town and its component units consisted of the
following at September 30, 2004:
Fund
Component Units:
Westlake 4A Corporation
General Fund
Westlake 4B Corporation
Enterprise Fund
Primary Government:
General Fund
Westlake 4A Corporation
Enterprise Fund
Westlake 4B Corporation
Due from
Primary Government
$ 2,798
445,962
$ 448 760
Due to
Component Units
2,798
445,962
$ 448.760
These balances represent advances from the component units for operations and capital
expenditures. Amounts totaling $445,962 represent advances for capital transactions to be
repaid over a 15 year term.
(3) Transactions between the primary government's funds and its component units for the year
ended September 30, 2004 consisted of the following:
Contribution from (Fund)
Component Units
Westlake 4B Corporation
Westlake 4A Corporation
Total
Contribution to (Fund)
Primary Government
Capital
General Projects Total
$ - $ 1,050,695 $ 1,050,695
134,177 - 134,177
134,177 $ 1.050 695 $ 1,184,872
Contributions from the Westlake 4B Corporation to the Capital Project fund in the amount of
$1,050,695 represent costs for the completion of the Civic Center and interest expense
associated with debt for the construction of the civic center as authorized in Section 4B of the
Texas Revised Civil Statutes, Ann. Sec. 5190.6.
Contributions from the Westlake 4A Corporation to the General Fund in the amount of $134,177
represents engineering costs related to FM 1938 as authorized in Section 4A of the Texas
Revised Civil Statutes, Ann. Sec. 5190.6.
34
TOWN OF WESTLAKE, TEXAS
NOTES TO FINANCIAL STATEMENTS
Note 15. Water Purchase and Wastewater Treatment Contracts
The Town has a contract with the City of Fort Worth, Texas to purchase water when the Town does
not have and cannot provide economically and within a reasonable period of time, any other source of
water supply, fully adequate to meet its present and/or future needs or potential emergency needs.
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, 2004, was $332,119.
Note 16. Risk Management
The Town is exposed to various risk 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, worker's compensation liability, law enforcement liability, errors and omissions liability, and
automobile liability coverage is insured by the Texas Municipal League, a public entity risk pool. The
Town's only responsibility to the Texas Municipal League is to pay premiums for insurance and
related deductible amounts of these policies. Other risk of loss is covered by commercial insurance.
Settlements of claims have not exceeded coverage in the past three years.
Note 17. Contingent Liabilities
Various claims and lawsuits are pending against the Town. In the opinion of Town management,
after consultation with legal counsel, the potential loss on all claims and lawsuits will not materially
effect the Town's financial position.
Note 18. Prior Period Adjustment
Expenditures were recorded on the books of Westlake Academy for the year ended August 31, 2003
that were expenditures of the Town for the year ended September 30, 2004. A prior period
adjustment for $32,898 has been recorded to correct this error.
35
TOWN OF WESTLAKE, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL - GENERAL FUND
YEAR ENDED SEPTEMBER 30, 2004
REVENUES:
Taxes
Sales
Mixed beverages
Franchise
Federal program revenues
Interest income
Building permits and fees
Fines and penalties
Contributions from others
Other miscellaneous income
Total revenues
EXPENDITURES:
Current
General government and administration
Public safety
Cultural and recreational
Economic development
Public works
Protective inspection
Capital outlay
Total expenditures
Excess (deficiency) of revenues over expenditures
OTHER FINANCING SOURCES (USES)
Operating transfers in
Operating transfers out
Net other financing sources (uses)
General Fund
3,309,668
4,224,863 3,804,486
420,377
Variance
(601,813)
821,856 (608,175)
(1,430,031)
Favorable
Orginal
Final
Actual
(Unfavorable)
$ 750,000 $
1,080,000 $
868,046 $
(211,954)
8,000
8,000
10,511
2,511
351,860
325,904
337,222
11,318
-
172,940
171,076
(1,864)
24,560
13,726
13,306
(420 )
448,030
2,301,894
802,060
(1,499,834)
693,950
646,750
680,794
34,044
421,805
421,805
235,916
(185,889)
9,650
75,700
77,380
1,680
2,707,855
5,046,719
3,196,311
(1,850,408)
1,067,641
1,476,322
1,579,124
(102,802)
1,540,700
1,640,165
1,547,857
92,308
9,200
18,703
9,099
9,604
6,500
57,250
53,006
4,244
93,981
113,997
125,499
(11,502)
90,000
155,382
80,935
74,447
501,646
763,044
408,966
354,078
3,309,668
4,224,863 3,804,486
420,377
(601,813)
821,856 (608,175)
(1,430,031)
646,964
740,701 -
(740,701)
-
(360,000) -
360,000
646,964
380,701 -
(380,701)
Excess (deficiency) of revenues and other sources over
45,151 1,202,557 (608,175) (1,810,732)
expenditures and other uses
Fund balance at beginning of year 1,608,248 1,608,248 1,608,248 -
Fund balance at end of year $ 1,653,399 $ 2,810,805 $ 1,000,073 $ (1,810,732)
The accompanying notes are
an integral part of this statement.
TOWN OF WESTLAKE, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL - WESTLAKE ACADEMY GENERAL FUND
YEAR ENDED SEPTEMBER 30, 2004
Variance
Favorable
Orginal Final Actual (Unfavorable)
REVENUES:
State program revenues $ 46,350 $ 107,000 $ 106,841 $ (159)
Other miscellaneous income 934,610 978,614 987,767 9,153
Total revenues
980,960
1,085,614
1,094,608
8,994
EXPENDITURES:
Education
977,117
1,085,313
1,068,857
16,456
Total expenditures
977,117
1,085,313
1,068,857
16,456
Excess (deficiency) of revenues over expenditures
3,843
301
25,751
25,450
Fund balance at beginning of year
(46,188)
(46,188)
(46,188)
-
Prior period adjustment
32,828
32,828
Fund balance at end of year
$ (42,345)
$ (45,887) $
12,391 $
58,278
37
TOWN OF WESTLAKE, TEXAS
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
Budgetary Control
The Board of Aldermen adopts an annual budget prior to October 1 for the general and
proprietary funds. The annual budget for the general and proprietary funds is prepared in
accordance with the basis of accounting utilized by that fund and is legally enacted through
passage of an ordinance. The Board of Alderman throughout the fiscal year can amend the
budget.
The Combined Schedule of Revenues, Expenditures, and Changes in Fund Balances — Budget
and Actual — General Fund and Westlake Academy General Fund presents a comparison of
budgetary data to actual results of operations for which the annual operating budget is legally
adopted. The general fund utilizes the same basis of accounting for both budgetary purposes
and actual results. Formal budgetary accounting is to be employed as a management control for
all funds of the Town. The Town Manager is authorized to transfer budgeted amounts between
line items and departments within any fund; however, the Board of Aldermen must approve any
revisions that alter the total expenses/expenditures of any fund.
B'?