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Fy 2007-2008 -- Comprehensive Annual Financial Report the heart of the Research Valley Mission Statement On behalf of the citizens of College Station, home of Texas A&M University, we will promote and advance the community’s quality of life. www.cstx.gov CITY OF COLLEGE STATION, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2008 PREPARED BY THE CITY OF COLLEGE STATION FISCAL SERVICES DEPARTMENT JEFF KERSTEN, CHIEF FINANCIAL OFFICER JANET DUDDING, CPA, ASSISTANT DIRECTOR OF FISCAL SERVICES CITY OF COLLEGE STATION, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2008 Table of Contents Page i INTRODUCTORY SECTION Letter of Transmittal ................................................................................................................................vi GFOA Certificate of Achievement for Excellence in Financial Reporting.............................................xvi Organizational Chart............................................................................................................................xvii Principal City Officials .........................................................................................................................xviii FINANCIAL SECTION Independent Auditors' Report .................................................................................................................1 Management’s Discussion and Analysis (Unaudited).............................................................................3 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Assets..........................................................................................................23 Statement of Activities.............................................................................................................24 Fund Financial Statements: Balance Sheet – Governmental Funds ...................................................................................26 Reconciliation of Governmental Funds Balance Sheet to the Statement of Net Assets................................................................................................27 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds...............................................................................28 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities...............................29 Statement of Net Assets – Proprietary Funds.........................................................................30 Statement of Revenues, Expenses, and Changes in Fund Net Assets – Proprietary Funds .................................................................................31 Statement of Cash Flows – Proprietary Funds .......................................................................32 Notes to the Financial Statements.................................................................................................35 Required Supplementary Information: Schedule of Funding Progress – Texas Municipal Retirement System ........................................69 CITY OF COLLEGE STATION, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2008 Table of Contents Page ii Schedule of Revenues, Expenditures, and Changes in Fund Balances, Budget and Actual – General Fund...............................................................................70 Supplementary Information: Combining and Individual Fund Statements and Schedules: Combining Balance Sheet – Nonmajor Governmental Funds................................................73 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Governmental Funds..............................................................79 Schedules of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual: Special Revenue Funds: Community Development ..........................................................................................84 Convention Center......................................................................................................85 Hotel Occupancy Tax.................................................................................................86 Memorial Cemetery....................................................................................................87 Parks Escrow..............................................................................................................88 Red Light Camera ......................................................................................................89 Northgate Tax Increment Financing District...............................................................90 Wolf Pen Creek Tax Increment Financing District .....................................................91 Capital Projects Funds: Business Park.............................................................................................................92 Drainage Projects.......................................................................................................93 General Government Projects....................................................................................94 Parks and Recreation Projects...................................................................................95 Streets Projects..........................................................................................................96 Debt Service......................................................................................................................97 Nonmajor Enterprise Funds: Combining Statement of Net Assets ...............................................................................100 CITY OF COLLEGE STATION, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2008 Table of Contents Page iii Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets...................................................................................................101 Combining Statement of Cash Flows .............................................................................102 Internal Service Funds: Combining Statement of Net Assets ...............................................................................104 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets...................................................................................................106 Combining Statement of Cash Flows .............................................................................108 Capital Assets Used in the Operation of Governmental Funds: Schedule by Source........................................................................................................113 Schedule by Function and Activity..................................................................................114 Schedule of Changes by Function and Activity ..............................................................116 STATISTICAL SECTION Net Assets by Component ..................................................................................................................121 Changes in Net Assets........................................................................................................................122 Program Revenues by Function/Program...........................................................................................124 Fund Balances, Governmental Funds ................................................................................................125 Changes in Fund Balances, Governmental Funds.............................................................................126 Tax Revenue by Source, Governmental Funds ..................................................................................128 Assessed Value and Estimated Actual Value of Taxable Property ....................................................129 Direct and Overlapping Property Tax Rates.......................................................................................130 Principal Property Taxpayers..............................................................................................................131 Property Tax Levies and Collections ..................................................................................................132 Taxable Sales by Category.................................................................................................................133 Direct and Overlapping Sales Tax Rates............................................................................................134 Sales Tax Revenue Payers by Industry..............................................................................................135 Ratios of Outstanding Debt by Type...................................................................................................136 CITY OF COLLEGE STATION, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2008 Table of Contents Page iv Ratios of Net General Bonded Debt Outstanding...............................................................................137 Direct and Overlapping Governmental Activities Debt........................................................................138 Legal Debt Margin Information............................................................................................................139 Pledged-Revenue Coverage...............................................................................................................140 Demographic and Economic Statistics ...............................................................................................141 Principal Employers ............................................................................................................................142 Full-Time-Equivalent City Government Employees by Function/Program .........................................143 Operating Indicators by Function/Program.........................................................................................144 Capital Asset Statistics by Function/Program.....................................................................................146 v CITY OF COLLEGE STATION INTRODUCTORY SECTION vi     March 16, 2009 Honorable Mayor, Members of the City Council, and Citizens of the City of College Station, Texas The City Manager and the Fiscal Services Department are pleased to submit the Comprehensive Annual Financial Report for the City of College Station, Texas (the "City") for the fiscal year ended September 30, 2008. This report is published to provide to the City Council, City staff, our citizens, our bondholders and other interested parties detailed information concerning the financial condition of the City government. Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the data is accurate in all material aspects and is organized in a manner designed to fairly present the financial position and results of operations of the City as measured by the financial activity of its various funds. We also believe that all disclosures necessary to enable the reader to gain the maximum understanding of the City's financial affairs have been included. The Local Government Code, Section 103.001 (a) states: "A municipality shall have its records and accounts audited annually and shall have an annual financial statement prepared based on the audit." Likewise the Fiscal and Budgetary Policy Statements adopted annually by the City Council as a part of the City's Approved Budget include a requirement that the City shall annually have an audit performed by an outside, independent auditor. The City has complied with this requirement, and the Independent Auditors' Report has been included in this report. THE REPORT This report is comprised of three sections: Introductory, Financial and Statistical. The Introductory Section includes this transmittal letter, a listing of the principal City officials, and an organizational chart of the City. The Financial Section contains the Independent Auditors' Report on the basic financial statements, Management's Discussion and Analysis ("MD&A"), the basic financial statements with related notes, and combining and individual fund statements and schedules. The MD&A is a narrative introduction, overview, and analysis to accompany the basic financial statements. This letter of transmittal is designed to complement the MD&A and should be read in conjunction therewith. The City of College Station's MD&A may be found immediately vii following the Independent Auditors' Report. The Statistical Section provides financial and demographic information that is relevant to a financial statement reader. The Financial section described above is prepared in accordance with generally accepted accounting principles for governments as prescribed by the Governmental Accounting Standards Board ("GASB") and other professional associations, as applicable. CITY PROFILE Location The City of College Station, incorporated in 1938, is located in Brazos County in East Central Texas, approximately 140 miles north of the Gulf of Mexico, approximately 90 miles northwest of Houston, approximately 165 miles south of Dallas and approximately 100 miles east of Austin, in an area referred to as the Brazos Valley. The City currently has a land area of 47.2 square miles and a current estimated population of 89,903 as of August 2008. The City has the power, by state statute, to extend its corporate limits by annexation, which it has done periodically. Structure The City of College Station is a home rule municipality and utilizes a Council-Manager form of government organized under the Constitution and laws of the State of Texas. The City Council is composed of a mayor and six council members elected at large. The City Council appoints the City Manager, City Attorney, City Secretary, Municipal Court Judge and Internal Auditor. Almost all other City staff work under the direction of the City Manager. The Reporting Entity and Services Provided This report includes all government activities, organizations and functions for which the City is financially accountable as defined by the GASB. Based on these criteria, no other governmental organizations are included in the report. For additional information on the reporting entity, refer to Note I-A in the basic financial statements. The City provides a full range of municipal services as prescribed by statute or charter. These services include police, fire and emergency medical services, parks and recreational facilities, library services, street maintenance and construction, public improvements, general administrative services and electrical, water, sewer, and sanitation systems. Internal services of the City accounted for on a cost reimbursement basis are print/mail, risk management, employee health and disability, equipment replacement, fleet management, and communications. Accounting System and Budgetary Control The City's accounting records for general governmental operations are maintained on a modified accrual basis, with the revenues recorded when available and measurable, and expenditures recorded when the services or goods are received and the liabilities incurred. Accounting records for the City's utilities and other proprietary activities are maintained on a full accrual basis with revenues recorded when earned and expenses recorded as goods or services are provided to the user. In developing and maintaining the City's accounting system, consideration is given to the adequacy of the internal control structure. Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding: (1) the safeguarding of assets against loss from unauthorized use or disposition, and (2) the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived, and the evaluation of costs and benefits requires estimates and judgments by management. All internal accounting control evaluations occur within the above framework. We believe that the City's internal accounting controls adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions. The annual budget serves as the foundation for the City's financial planning and control. The City Charter provides that the City Manager will submit a proposed budget to the City Council between 30 and 90 days prior to the end of the fiscal year. The City's budget is prepared by function, fund and department. The City Council is required to hold a public hearing on the proposed budget and to adopt a budget no later than the 27th day of the last month of the fiscal year. The City's fiscal year begins on October 1 and ends on September 30. Controls of budgetary spending are at the department level within the City's General Fund and at the individual fund appropriation in all other funds. The City Council must authorize transfers between General Fund departments and all increases in total spending in any fund. The City's departments have direct access to review budgets as often as necessary. Monthly closing reports are prepared and reviewed by management showing revenues, expenditures, and balance sheets. Summarized financial reports and budget reports are provided to the City Council on a quarterly basis. FACTORS AFFECTING FINANCIAL CONDITION Economic Conditions College Station has seen continued growth in fiscal year 2008, despite the significant slowing of the national economy. The concentration of stable employment sectors such as government and higher education contribute to the steady growth that College Station has experienced over the last several years. This growth provides some of the additional resources needed to maintain service levels to the citizens and visitors of College Station. In 2005, the Bureau of Labor Statistics (BLS) significantly altered the methodology used to calculate unemployment. The new calculation method resulted in just over a one percent increase in the unemployment figure for College Station. In prior years, the unemployment rate was in the 1.6 percent to 2.6 percent range. As a result of the BLS change, the unemployment rate for fiscal year 2007 as of October was approximately 3.7 percent. In fiscal year 2008 the unemployment rate was approximately 3.7 percent. Sales tax collections in College Station continued to see growth in fiscal year 2008. This is consistent with growth in sales tax receipts the City has experienced over the last several years. In fiscal year 2008, sales tax revenue was up by 9.7 percent over fiscal year 2007 to $19,822,906. The rate of sales tax growth is anticipated to slow as a result of the challenges seen in the national economy. College Station continued to see housing and commercial development. There were 685 new housing starts during 2008. Total ad valorem assessed valuation increased by approximately $491 million or approximately 12 percent for fiscal year 2008 over fiscal year 2007. Commercial development continued to be strong with both new and redevelopment. Several new commercial businesses opened in College Station in 2008. The University Drive corridor continued to have new business and increased traffic. The rate of growth is anticipated to slow in the near future. One major asset of the City of College Station is that it is the home of Texas A&M University (TAMU). TAMU is located on an approximately 5,200 acre campus within the City. TAMU has a significant economic impact on the City, contributing over a billion dollars annually to the local economy. TAMU has consistently ranked among the top 50 universities in the United States. Each year, TAMU's approximately 2,500 faculty members conduct an estimated $450 million worth of sponsored research projects. Student enrollment at TAMU was 46,542 as of September 2008. TAMU employs more than 20,000 full-time and part-time staff. viii 2008 Major Accomplishments 2008 has been a year of significant accomplishment in College Station coupled with challenges both internally and externally. Internally, we continued to face the challenge of several vacancies in key positions within the organization. Most of those vacancies have now been filled with very qualified and experienced staff but there was impact on our staff during the year. Externally, we faced the challenge of the slowing economy and the threat of its impact locally. We continue to monitor the effect of the economy locally, but fortunately the impact has been minimal to date, Economic and fiscal indicators show the local economy has continued to grow in the last year, despite the slowing national economy. Below are a highlight of accomplishments for 2008: • Police Department Management Review – The FY 08 budget included funds for both the management review and additional funds in the amount of $600,000 for phase 1 implementation. The management review was completed and a report was presented to the City Council in December 2008. Upon completion of the consultant’s report, Chief Ikner made a presentation and recommendation on the Department’s philosophy of “Community – Oriented Policing and Geographical Accountability” and multi year improvement plan. • General Obligation Bond Election – One of the significant projects faced during 2008 was the preparation for the 2008 bond election. The staff worked with the City Council and the Capital Improvement Committee to formulate a list of projects and cost estimates along with financial analyses to determine the impact of bond issuances with various options. Voters approved 4 of 6 propositions on the November 4th, 2008 ballot totaling $76,950,000 for streets and transportation, city library, fire station and parks. The City Hall and Community Center propositions were defeated. Design work will begin on the first phase of the 7 year program immediately. • 2008 General Obligation Bond Sale - In 2008 the City sold over $35 million in General Obligation Bonds and Certificates of Obligation to fund City capital projects. This was a successful debt issue during a difficult economic environment. • Major New Executive Appointments – We are pleased that the Manager’s Office along with the City’s Human Resource Department has been able to attract several outstanding new executives to lead critical areas of the organization. This is an outstanding group of professionals who bring a new enthusiasm and energy to the organization. o Assistant City Manager – David Neeley o Police Chief – Michael A. Ikner o Director of Parks and Recreation – Marco (Tony) Cisneros o Director of Capital Projects - Chuck Gilman • Comprehensive Plan Update – We presented the draft of the revised Comprehensive plan – the first such effort in more than a decade. The projected adoption date is the summer of 2009. • Strong and Sustainable Neighborhoods – We accomplished several key council initiatives including: establishment and implementation of the single family overlay protection zones; establishment of a historic preservation ordinance; adoption of revised traffic impact analysis requirements; revision of Subdivision Regulations to better manage development in the extra-territorial jurisdiction (ETJ); amended the Code of Ordinances to require rental registration for all rental single family and duplex properties and establish party host responsibilities. ix • Management Planning System - The Management Planning System requires that all our departments build Strategic Business Plans to operationalize Council’s strategic planning efforts in our daily operations. All plans are now being updated in anticipation of the upcoming budget process. • Environmental Awareness o Green College Station – We established a citywide program to achieve long-term sustainability and resource conservation. The focus areas include: 1. Energy conservation and renewable energy resources; 2. Water conservation; 3. Solid Waste and hazardous waste reduction; 4. Land use/green and open space/development codes; 5. Air quality. The policy statement adopted by City Council on January 24, 2008 directed the Manager’s Office to develop the Green College Station Action Plan. The follow up report will be given to City Council at the Mini-retreat in January 2009. o CSU Begins Offering Renewable Power – We plan to offer CSU electric customers the opportunity to participate in renewable electric rates (wind power) beginning in 2009 through the Wind Watts program. o Performed Signal Coordination of Major Thoroughfares - The City of College Station conducts signal coordination studies of roadways which operate under signal control to ensure that the signals are properly timed to provide an optimum level of vehicle progression along the roadway. Research has shown that properly timed signals can reduce vehicle delay by up to 10 percent and reduce vehicle emission. o Enacted Conservation-Oriented Water Rates - Conservation-oriented water rate structures are a recognized Best Management Practice for water conservation because they provide a price signal discouraging the wasteful or inefficient use of water. City Council adopted a tiered water rate structure for Residential Single Family Customers effective October 1, 2008. o BVSWMA Hosts Two Household Hazardous Waste Collections - BVSWMA staff successfully conducted two Household Hazardous Waste Collection Events in 2008, resulting in the safe disposal of approximately 200,000 Lbs of electronic waste and hazardous materials. The events were open to all residents in the seven county region of the Brazos Valley at no charge. Acceptable materials included: paint thinners and paint, pool chemicals, car batteries, automobile waste, chemicals, gasoline and more. o Began Update of Bicycle, Pedestrian, and Greenways Master Plan - Greenways are becoming increasingly recognized as ways to connect people and places with alternative transportation choices, such as bicycling, skating, and walking. Updating these plans, and updating them in conjunction, will ensure alternative modes of transportation are available for the population • Economic and Community Development - Through the leadership of our Economic and Community Development staff, development and redevelopment of properties within the city have remained active during the past year. Examples of projects that our staff directly encouraged or facilitated are: the planning and development of Lynntech Science Park; the redevelopment of Central Station Shopping Center; Northgate redevelopment; the design and implementation of the Santour Court Development. • Fire Station # 3 - Fire Station #3 was completed in April 2008 and dedicated on August 16 with approximately 200 citizens in attendance. The station is designed to harmonize with the surrounding residential neighborhoods and blend with the environment. Fire Chief Magazine, x xi in its November 2008 issue, granted the station its highest award, the “gold satellite” award for the station design. The new station improved response time and coverage to citizens due to its geographic location. • Red Light Camera Program - In 2008 the City implemented a red light camera program at four intersections in College Station. This program required the cooperation and coordination of many different departments and divisions throughout the City. • Annexation – We annexed more than 1,500 acres with an additional 3,400 acres entering into non-annexation development agreements. The 2009 budget includes significant capital expenditures planned to service the newly annexed areas. • Safe Route to School Program – A new sidewalk was installed on Holik Street between George Bush Drive and Anna Street adjacent to Oakwood Intermediate School and A&M Consolidated Middle School. Other locations are being considered and evaluated for the program. • Community Emergency Operations Center (CEOC) – Construction was completed and the CEOC opened in downtown Bryan in June 2008. The CEOC is staffed with management personnel from College Station, Bryan, Brazos County and Texas A&M University. The first full activation of this new emergency facility occurred in response to Hurricane Ike in September 2008. • Electric Utility - Our Electric Utility continues to provide quality service at a low cost to our citizens while accommodating significant growth in the community. Major projects for the year were: 1. Completed the transmission line reconductor from Switch Station to Post Oak to South Substation, increasing the capacity of the transmission system to meet current and future growth. 2. Commissioned a new transmission line into switch station from Brazos Electric which increases reliability due to multiple transmission feeds. 3. Successfully completed a North American Electric Reliability Corporation (NERC) Compliance Audit with no penalties or violations. • Implementation of Communications Plan - Council authorized the implementation of a new approach to our Public Communications efforts last year. We are pleased to report we are making strides to implement various components of the Communication Plan. Listed are some of the elements of the Communication Plan completed in 2008. 1. Broadcast: TV 19 improvements – shows, scheduling, news crawl 2. Publications: new design for “Inside College Station” resident newsletter 3. Website: new features, including – radio podcasts, integrated content features 4. Community Relations: Citizen University, CS101 with TAMU 5. Marketing: supported city events (Starlight), and campaigns (CARES) • Municipal Court Security - In early 2008, the Municipal Court successfully implemented new security measures including the installation of a metal detector as well as an X-ray machine. These security improvements have helped make the Municipal court a safer place for customers and staff. • Utility Bill Payment System - With the cooperation of and coordination with Information Technology, the Utility Customer Service Division successfully implemented a new online Utility Bill payment system. As of April 2008, approximately 10,000 customers out of 35,000 customers were registered to be able to pay their bill online. Currently, 10% of College Station Utilities customers are receiving their utility bills electronically resulting in lower printing and postage costs. xii OTHER INFORMATION Independent Audit Section 37 of the City's Charter requires that not less than thirty (30) days prior to the end of each fiscal year, the City Council shall designate a qualified public accountant or accountants who, as of the end of the fiscal year, shall make an independent audit of accounts and other evidences of financial transactions of the city government and shall submit the report to the City Council. Such accountants shall have no personal interest, direct or indirect, in the fiscal affairs of the city government. They shall not maintain any account or record of the city business, but, within specifications approved by the City Council, shall post-audit the books and documents kept by the Department of Fiscal Services and any separate or subordinate accounts kept by any other office, department or agency of the city government. The City of College Station has engaged Ingram, Wallis & Company of Bryan, Texas to perform the audit, and their opinion has been included in this report. It should be noted that the auditors included all funds in their audit, performed their audit in accordance with U.S. generally accepted auditing standards, and concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the City of College Station's financial statements for the fiscal year ended September 30, 2008 are fairly presented in conformity with U.S. generally accepted accounting principals. The independent auditors' report is presented as the first component of the financial section of this report. Certificate of Achievement The Government Finance Officers Association of the United States and Canada ("GFOA") awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of College Station for its Comprehensive Annual Financial Report ("CAFR") for the Fiscal Year ended September 30, 2007. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized CAFR with contents that conform to program standards. Such reports must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. The City of College Station has received a Certificate of Achievement for twenty-six out of the last twenty-seven years. We believe our current report continues to conform to the Certificate of Achievement Program requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate. Responsibility for Financial Reporting The City's Senior Management, including the City Manager and Chief Financial Officer, accept the responsibility for the accuracy, integrity, consistency, and reliability of the financial statements. They also acknowledge their responsibility for assuring the continuous monitoring of the City's system of internal controls for compliance in order to prevent misappropriation of assets and fraudulent financial reporting. Additionally, they confirm their commitment to fostering a strong ethical climate and communicating those standards to employees through personnel rules, administrative regulations, and City law. xiv xv xvi CITIZENS OF COLLEGE STATION MAYOR AND COUNCIL CITY SECRETARY MUNICIPAL JUDGES CITY ATTORNEY CITY MANAGER FIRE POLICE PLANNING & DEVELOPMENT SERVICES PARKS & RECREATION PUBLIC WORKS WATER SERVICES FISCAL SERVICES ADMINISTRATION SUPPRESSION PREVENTION EMERGENCY MEDICAL SERVICES (EMS) ADMINISTRATION UNIFORM PATROL CRIMINAL INVESTIGATIONS SPECIAL SERVICES QUARTERMASTER COMMUNICATIONS / JAIL RECRUITING/ TRAINING INFORMATION SERVICES PLANNING ADMINISTRATION MAPPING COORDINATION DEVELOPMENT COORDINATION BUILDING INSPECTION ADMINISTRATION STREETS DRAINAGE FLEET TRAFFIC SIGNS/SIGNALS SANITATION ENGINEERING PLANT OPERATIONS INTERNAL AUDITOR PARKING FACILITIES MAINTENANCE FIELD OPERATIONS EMERGENCY MANAGEMENT ASSISTANT CITY MANAGER ASSISTANT CITY MANAGER ECONOMIC DEVELOPMENTCOMMUNITY DEVELOPMENT ELECTRIC UTILITY APPOINTED BOARDS AND COMMISSIONS BVSWMA GIS & ASSET MANAGEMENT ENVIROMENTAL SERVICES WATER RESOURCES INFORMATION TECHNOLOGY COMMUNICATION SERVICES ADMINISTRATION E-GOVERNMENT GEOGRAPHIC INFORMATION SERVICESMANAGEMENT INFORMATION SYSTEMS MAIL ADMINISTRATION RECREATION SPECIAL FACILITIES PARKS OPERATIONS PARKS OPERATIONS FORESTRY FORESTRY SPECIAL FACILITIES LIBRARY ASSISTANT DIRECTOR TREASURER ASSISTANT DIRECTOR ACCOUNTING OFFICE OF BUDGET & STRATEGIC PLANNING MUNICIPAL COURT PURCHASING UTILITY CUSTOMER SERVICE CAPITAL IMPROVEMENT PROJECTS PUBLIC COMMUNICATION AND MARKETING HUMAN RESOURCES ADMINISTRATION CODE ENFORCEMENT xvii City of College Station, Texas   Fiscal Year  2008  Principal City Officials  Elected Officials  City Administration  City Manager ..........................................................................................................................................................Glenn Brown  Assistant City Manager...........................................................................................................................................Kathy Merrill  Assistant City Manager.......................................................................................................................................... David Neeley  Chief Financial Officer...............................................................................................................................................Jeff Kersten  Director of Water Services Department ............................................................................................................. David  Coleman  Director of Electric Utility..................................................................................................................................... David Massey  Chief of Police........................................................................................................................................................Michael Ikner  Chief of Fire..........................................................................................................................................................Robert B. Alley  Director of Public Works...........................................................................................................................................Mark Smith  Director of Capital Projects................................................................................................................................. Charles Gilman  Director of Parks and Recreation................................................................................................................... Ma rco A. Cisneros  Director of Planning and Development Services.................................................................................................Bob  Cowell, Jr.  Director of Information Technology...........................................................................................................................Ben Roper   Director of Public Communications......................................................................................................................Wayne Larson  Director of Human Resources...........................................................................................................................................Vacant  Director of Economic and Community Development ..............................................................................................David Gwin  City Attorney....................................................................................................................................................Harvey Cargill, Jr.  City Secretary.....................................................................................................................................................Connie L. Hooks  Internal Auditor.............................................................................................................................................................Ty Elliott  Dennis  Maloney  Council ‐ Place 3  Lawrence Stewart  Council ‐ Place 5  David   Ruesink  Council ‐ Place 6  Ben White  Mayor  Lynn  McIlhaney  Mayor Pro Tem  John Crompton  Council ‐ Place 1  James  Massey  Council ‐ Place 2  xix CITY OF COLLEGE STATION FINANCIAL SECTION Management's Discussion and Analysis For the Fiscal Year Ended September 30, 2008 (Unaudited) This section of the City of College Station's (the “City”) Comprehensive Annual Financial Report presents a narrative overview and analysis of the financial activities of the City for the fiscal year ended September 30, 2008. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal. FINANCIAL HIGHLIGHTS • The assets of the City exceeded its liabilities at the close of the most recent fiscal year by $371,612,091 (net assets). Of this amount, $103,661,498 (unrestricted net assets) may be used to meet the government's ongoing obligations to citizens and creditors. • The City's total net assets increased by $19,230,336 during the fiscal year. • At the close of the current fiscal year, the City's governmental funds reported combined ending fund balances of $72,330,936, an increase of $2,877,233 when compared to the prior year. • Approximately 29 percent of the combined governmental funds ending fund balance, or $21,205,922 is available for spending at the City's discretion (unreserved-undesignated fund balance). • During fiscal year 2008, the City's total debt increased by approximately $35,895,000. Key factors in this increase were the issuance of $9,455,000 in General Obligation Improvement Bonds and $26,440,000 in business-purpose and governmental Certificates of Obligation. Wolf Pen Creek Trails Phase II OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the City's basic financial statements. The City's basic financial statements are comprised of three components: (1) Government-wide financial statements (2) Fund financial statements (3) Notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. City of College Station, Texas 3 Management's Discussion and Analysis For the Fiscal Year Ended September 30, 2008 (Unaudited) The following diagram illustrates the relationship between the different components of this report: Relationship Between Comprehensive Annual Financial Report (CAFR) and Basic Financial Statements and Required Supplementary Information (RSI) General information on the government Introductory structure, services, and environment Section Pages vi-xviii + Management's Discussion and Analysis Pages 3-20 Government-Wide Financial Statements Basic Pages 23-25 Financial Governmental Fund Financial Statements Statements Pages 26-29 And Proprietary Fund Financial Statements Financial RSI Pages 30-33 Section Notes to the Financial Statements Pages 35-67 Additional Required Supplementary Information Pages 69-70 Information on individual funds and other supplementary information not required by GAAP Pages 71-117 + Trend Data and Non-financial Data Pages 119-146 Statistical Section City of College Station, Texas 4 Management's Discussion and Analysis For the Fiscal Year Ended September 30, 2008 (Unaudited) Government-Wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of the City's finances, in a manner similar to a private-sector business. The statement of net assets presents information on all of the City's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether or not the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the City'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, such as revenues pertaining to uncollected taxes and expenses pertaining to earned but unused vacation. Both of the government-wide financial statements distinguish functions of the City that are principally supported by 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 City include general government, fiscal services, police, information systems, planning and development, fire, municipal services, parks and recreation, and citizen and neighborhood resources. The business-type activities of the City include electric, water, wastewater, sanitation, and the northgate parking garage. The government-wide financial statements can be found on pages 23- 25. 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 City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into governmental funds and proprietary funds. 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 near- term inflows and outflows of spendable resources as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in determining what financial resources are available in the near future to finance the City's programs. 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, readers 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. City of College Station, Texas 5 Management's Discussion and Analysis For the Fiscal Year Ended September 30, 2008 (Unaudited) The City maintains several individual governmental funds organized according to their type (special revenue, debt service, and capital projects). 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 Fund, Debt Service Fund, and Streets Projects Fund, all of which are considered to be major funds. Data from the remaining governmental funds are combined into a single, aggregated presentation. Individual fund data for each of the non-major governmental funds is provided in the form of combining statements elsewhere in this report. The governmental fund financial statements can be found on pages 26- 29. The City adopts an annual appropriated budget for its General Fund, Debt Service Fund, Special Revenue Funds, and Capital Projects Funds. A budgetary comparison statement has been provided for the General Fund, Debt Service Fund, Special Revenue Funds, and Capital Projects Funds to demonstrate compliance with their budgets. Proprietary Funds Proprietary funds are generally used to account for services for which the City charges customers--either outside customers or internal units or departments of the City. Proprietary funds provide the same type of information as shown in the government-wide financial statements, only in more detail. The City maintains the following two types of proprietary funds: Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for the operations of the electric, water, wastewater, sanitation, and parking activities of the City. The Electric, Water, and Wastewater funds are considered to be major funds of the City, while the remaining funds (Sanitation and Northgate Parking Garage) are presented in aggregate as non-major enterprise funds. Individual fund data for the non-major enterprise funds can be found in the form of combining statements elsewhere in this report. Internal service funds are used to report activities that provide supplies and services for certain City programs and activities. The City uses internal service funds to account for communication, fleet maintenance and utility customer services. It also uses internal service funds to account for equipment replacement; employee benefits; and unemployment, workers' compensation, and property and casualty insurance. All of these services, with the exception of utility customer service, predominantly benefit governmental rather than business-type functions and have been included within governmental activities in the government-wide financial statements. The Utility Customer Service Fund has been included with the business-type activities in the government-wide financial statements. The internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. The proprietary fund financial statements can be found on pages 30-33. Notes to the Financial Statements The notes to the financial statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. City of College Station, Texas 6 Management's Discussion and Analysis For the Fiscal Year Ended September 30, 2008 (Unaudited) Required Supplementary Information In addition to the basic financial statements and accompanying notes, this report presents on pages 69-70, certain required supplementary information concerning the City's progress in funding its obligation to provide pension benefits to its employees and the General Fund budget- to-actual comparison. Combining Statements The combining statements referred to earlier in connection with the non-major governmental funds, the non-major enterprise funds, and the internal service funds are presented on pages 71- 117 immediately following the required supplementary information. GOVERNMENT-WIDE FINANCIAL ANALYSIS As noted earlier, net assets may serve as a useful indicator of a government's financial position. For the City, assets exceeded liabilities by $371,612,091 at the close of the most recent fiscal year. The largest portion of the City's net assets (70 percent) reflects its investment of $260,002,603 in capital assets (e.g., land, buildings, and equipment), less any related outstanding debt used to acquire those assets. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be liquidated for these liabilities. Net Assets Governmental Activities Business-Type Activities Total 2008 2007 2008 2007 2008 2007 Assets Current and Other Assets 92,449,808$ 87,098,918$ 71,448,999$ 72,642,000$ 163,898,807$ 159,740,918$ Capital Assets 199,832,191 185,641,567 259,314,070 235,974,510 459,146,261 421,616,077 Total Assets 292,281,999 272,740,485 330,763,069 308,616,510 623,045,068 581,356,995 Liabilities Long-Term Liabilities Outstanding 103,022,575 100,223,951 123,854,880 105,499,997 226,877,455 205,723,948 Other Liabilities 8,262,912 7,709,172 16,292,610 15,542,120 24,555,522 23,251,292 Total Liabilities 111,285,487 107,933,123 140,147,490 121,042,117 251,432,977 228,975,240 Net Assets Invested in Capital Assets, Net of Related Debt 114,935,845 113,750,039 145,066,758 147,043,092 260,002,603 260,793,131 Restricted 6,357,013 5,089,422 1,590,977 3,056,356 7,947,990 8,145,778 Unrestricted 59,703,654 45,967,901 43,957,844 37,474,945 103,661,498 83,442,846 Total Net Assets 180,996,512$ 164,807,362$ 190,615,579$ 187,574,393$ 371,612,091$ 352,381,755$ An additional portion of the City's net assets, $7,947,990 (2 percent) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets, $103,661,498 (28 percent) may be used to meet the government's ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City was City of College Station, Texas 7 Management's Discussion and Analysis For the Fiscal Year Ended September 30, 2008 (Unaudited) able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for the business-type activities. The same situation held true for the prior fiscal year. The City's net assets increased by $19,230,336 as a result of fiscal year 2008 operations. The increase is primarily attributable to increases in ongoing revenues and relatively stable expenses. The following table provides a summary of the City's operations for the year ended September 30, 2008 and highlights key elements of the increase in the City's net assets: Changes in Net Assets For the Fiscal Year Ended September 30, 2008 Governmental Activities Business-Type Activities Total Revenues 2008 2007 2008 2007 2008 2007 Program Revenues: Charges for Services 11,668,838$ 10,755,338$ 110,299,679$ 96,245,479$ 121,968,517$ 107,000,817$ Operating Grants and Contributions 1,735,170 2,038,535 - - 1,735,170 2,038,535 Capital Grants and Contributions 3,055,501 5,271,090 5,349,125 4,041,105 8,404,626 9,312,195 General Revenues: Property Taxes 20,670,112 18,573,309 - - 20,670,112 18,573,309 Sales and Mixed Beverage Taxes 20,241,973 18,449,731 - - 20,241,973 18,449,731 Other Taxes 5,676,291 4,911,446 - - 5,676,291 4,911,446 Interest and Investment Income 3,385,844 4,512,575 1,330,785 1,932,624 4,716,629 6,445,199 Total Revenues 66,433,729 64,512,024 116,979,589 102,219,208 183,413,318 166,731,232 Expenses General Government 8,551,304 7,654,393 - - 8,551,304 7,654,393 Fiscal Services 2,977,362 2,442,439 - - 2,977,362 2,442,439 Police 13,395,874 12,299,698 - - 13,395,874 12,299,698 Fire 11,359,260 9,472,331 - - 11,359,260 9,472,331 Planning and Development Services 1,910,359 1,603,963 - - 1,910,359 1,603,963 Public Works 9,467,081 6,620,846 - - 9,467,081 6,620,846 Capital Projects 719,391 - - - 719,391 - Parks and Recreation 10,385,095 9,148,511 - - 10,385,095 9,148,511 Information Technology 2,749,327 2,689,720 - - 2,749,327 2,689,720 Interest on Long Term Debt 3,860,801 4,291,022 - - 3,860,801 4,291,022 Unallocated Depreciation 667,890 6,026,372 - - 667,890 6,026,372 Electric Utility - - 70,485,982 60,242,408 70,485,982 60,242,408 Water Utility - - 8,706,415 8,302,863 8,706,415 8,302,863 Sewer Utility - - 9,159,176 8,179,813 9,159,176 8,179,813 Sanitation Services - - 6,244,639 5,916,431 6,244,639 5,916,431 Parking Operations - - 668,237 591,980 668,237 591,980 Total Expenses 66,043,744 62,249,295 95,264,449 83,233,495 161,308,193 145,482,790 Increase in Net Assets Before Transfers 389,985 2,262,729 21,715,140 18,985,713 22,105,125 21,248,442 Transfers Net 7,559,165 10,090,589 (10,433,954) (10,090,589) (2,874,789) - Increase in Net Assets 7,949,150 12,353,318 11,281,186 8,895,124 19,230,336 21,248,442 Net Assets at Beginning of Year 164,807,362 152,454,044 187,574,393 178,679,269 352,381,755 331,133,313 Prior Period Adjustment 8,240,000 - (8,240,000) - - Net Assets at End of Year 180,996,512$ 164,807,362$ 190,615,579$ 187,574,393$ 371,612,091$ 352,381,755$ City of College Station, Texas 8 Management's Discussion and Analysis For the Fiscal Year Ended September 30, 2008 (Unaudited) Governmental activities. Governmental activities increased the City of College Station's net assets by $7,949,150 thereby accounting for 41 percent of the total growth in net assets. Key elements of this increase are as follows: • Property taxes increased $2,096,803 (11.3 percent) during the year. This is primarily the result of the total ad valorem assessed valuations increasing by $491 million or 12 percent over fiscal year 2007. • Sales and mixed beverage taxes increased $1,792,242 (9.7 percent) during the year. This is attributable to continued economic growth in the area. • Capital grants and contributions decreased $2,215,589. Interest and investment income decreased $1,126,731. The chart below illustrates the City's governmental revenues by source. For governmental activities overall without regard to program, property tax (28 percent) and sales tax (27 percent) are the largest sources of funds followed by charges for services (16 percent), and grants and contributions (6 percent). All other governmental revenues account for 23 percent of all governmental revenues. City of College Station, Texas Governmental Revenues By Source $73,992,894 15% 28% 27% 6% 4% 10% 10%Charges for Services Grants and Contributions Property Tax Sales Tax Other Taxes Investment Income Transfers City of College Station, Texas 9 Management's Discussion and Analysis For the Fiscal Year Ended September 30, 2008 (Unaudited) Another useful chart depicts governmental activity program revenues relative to program expenses. That data is presented below: Governmental Activities Comparison of Program Revenues to Program Expenses - 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000General GovernmentFiscal ServicesPoliceFirePlanning and Development ServicesPublic WorksCapital ProjectsParks and RecreationInformation TechnologyInterest on Long-Term DebtUnallocated DepreciationProgram Revenues Program Expenses Business-type activities. Business-type activities increased the City of College Station's net assets by $11,281,186, thereby accounting for 59 percent of the total growth in net assets. Key elements of this increase are as follows: • With the continued growth in the area, capital contributions continued to be a major source of revenue for the electric, water, and wastewater funds. In fiscal year 2008 capital contributions amounted to $5,349,125. • Electric utility expenses experienced an increase of $10,243,574 or 17 percent from fiscal year 2007. This is primarily attributable to purchased power expenses. • Charges for services increased by $14,054,200 or 15 percent from fiscal year 2007 due to utility rate increases. City of College Station, Texas 10 Management's Discussion and Analysis For the Fiscal Year Ended September 30, 2008 (Unaudited) Revenues for the City's business-type activities are presented in the following chart. Charges for services provided the largest share of revenues (94 percent) for the City's business-type activities. It was followed by grants and contributions (5 percent) and investment income (1 percent). Business-type Revenues $116,979,589 94% 5%1% Charges for Services Grants and Contributions Investment Income Another useful chart depicts business-type activity program revenues relative to program expenses. That data is presented below: Business-type Activities Comparison of Program Revenues to Program Expenses - 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 80,000,000 90,000,000 Electric Water Wastewater Sanitation Northgate Parking Program Revenues Program Expenses City of College Station, Texas 11 Management's Discussion and Analysis For the Fiscal Year Ended September 30, 2008 (Unaudited) FINANCIAL ANALYSIS OF THE CITY'S FUNDS As noted previously, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances of resources that are available for spending. Such information is useful in assessing the City's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. The types of governmental funds reported by the City include the General Fund, Debt Service Fund, and Streets Projects Fund. Other governmental funds of the City are reported as non-major funds. As of the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of $72,330,936. Approximately 29 percent ($21,205,922) of this total amount constitutes unreserved fund balance and is available for spending at the City's discretion. The remainder of fund balance is reserved to indicate that it is not available for new spending because it has already been committed as follows: (1) To pay debt service ($3,817,694), (2) To liquidate contracts and purchase orders of the prior period ($12,566,000), (3) For capital improvements ($31,639,361), (4) For permanent cemetery endowments ($1,756,167), (5) For police criminal investigation activity ($36,256), (6) For inventory ($163,063), (7) For prepaid expenses ($343,525), (8) For Juvenile Case Manager ($209,943), (9) For Court Technology ($265,212), (10) For Court Security ($291,628), and (11) For Court Efficiency ($36,165). Overall, revenues for governmental functions totaled $62,580,542 in the fiscal year ended September 30, 2008, an increase of 7 percent or $4,245,294 from the fiscal year ended September 30, 2007. Expenditures for governmental functions totaling $90,471,606 increased by approximately 16 percent ($12,624,809) from the fiscal year ended September 30, 2007. In fiscal year 2008, expenditures for governmental functions exceeded revenues by $27,891,064. That amount was 43 percent more than the previous year's amount of $19,511,549 and due to an increase in capital outlay expenditures in fiscal year 2008 over 2007. The City added a Capital Projects Department in fiscal year 2008 to expedite capital projects. City of College Station, Texas 12 Management's Discussion and Analysis For the Fiscal Year Ended September 30, 2008 (Unaudited) The General Fund is the chief operating fund of the City of College Station. At the end of the current fiscal year, the unreserved, undesignated fund balance was $9,679,913 while the total fund balance reached $11,985,389. The City's fiscal and budgetary policies require that the General Fund's undesignated fund balance be at least equal to 15 percent of budgeted expenditures, a percentage equal to 55 days of expenditures. The unreserved, undesignated fund balance is approximately 18 percent of fiscal year 2008 budgeted expenditures and exceeds the minimum requirement set by policy. As a measure of the fund's liquidity, it is useful to compare both unreserved and total fund balance to total fund actual expenditures. Unreserved fund balance represents 19 percent of total general fund expenditures, while total fund balance represents 23 percent. The fund balance continues to meet and exceed the Fiscal and Budgetary Policy of having 15 percent of expenditures available in fund balance. The General Fund’s fund balance decreased by $947,200 during the current fiscal year. The key factors in this change follow: • Overall expenditures were up by approximately 13 percent, due to an increase in fuel, transportation costs and petroleum based products, and • Personnel costs increased due to filling additional full time equivalent positions, including several top management positions. The Debt Service Fund ended the fiscal year with a fund balance of $3,817,694. This entire amount is reserved for the payment of debt service. The net increase in fund balance during the current fiscal year was $351,636. A $1,018,582 increase in debt service revenues and other financing sources was more than enough to cover principal retirements and interest payments. The Streets Projects fund ended the fiscal year with a fund balance of $24,388,395. This entire amount is either reserved for encumbrances related to current capital projects or reserved for future capital projects. The net increase in fund balance during the current fiscal year was $2,580,869. This increase is attributable to proceeds received from long term debt issued at the end of fiscal year 2008. Proprietary Funds The City's proprietary funds provide the same type of information found in the government-wide financial statements but in more detail. At the end of the current fiscal year, the City's proprietary funds reported combined ending net assets of $188,072,531. Approximately 22 percent ($41,922,769) of this total amount constitutes unrestricted net assets. The remainder of net assets for the proprietary funds, $146,149,762, is reported as follows: (1) Invested in capital assets, net of related debt ($144,558,785), and (2) Restricted for debt service ($1,590,977). Operating revenues for proprietary activities totaled $107,064,736 for the fiscal year, an increase of 12.7 percent or $12,052,161 from the previous fiscal year. Operating expenses increased City of College Station, Texas 13 Management's Discussion and Analysis For the Fiscal Year Ended September 30, 2008 (Unaudited) $10,956,560 or 13.9 percent for the same period causing operating income to increase $1,095,601 or 6.8 percent from the previous year. The proprietary funds reported net non- operating expenses of $537,409 at the end of fiscal year 2008 as compared to net non-operating expenses of $1,699,497 in the previous fiscal year. Net assets increased $11,574,164 in fiscal year 2008. This is $3,252,473 more than the increase reported in fiscal year 2007. Electric Fund At the end of the fiscal year, the unrestricted net assets for the Electric Fund totaled $11,707,235. The electric utility ended the fiscal year with working capital of $10,159,565, a decrease of 1.5 percent from fiscal year 2007. The City’s policy with regard to its enterprise funds is to maintain at least 15 percent of annual operating expenses in working capital, a percentage equal to 55 days of expenses. At September 30, 2008, Electric Fund working capital equaled approximately 14.8 percent of annual operating expenses. Electric Fund operating revenues increased by 13.8 percent ($9,298,776) during fiscal year 2008, while operating expenses increased 16.8 percent ($9,922,489) during the same period. This resulted in a 7.4 percent decrease ($623,713) in operating income. The decrease in operating income is also attributable to an increase in operating expense due to anticipated higher purchased power costs. The above resulted in an increase in net assets of $347,502 in the Electric Fund during the fiscal year. Water Fund Unrestricted net assets for the Water Fund at September 30, 2008 were $7,741,310. Working capital in the Water Fund at the end of fiscal year 2008 was $5,947,058, an increase of approximately 9.5 percent from fiscal year 2008. Water Fund working capital was 88 percent of total operating expense and exceeds the minimum 15 percent requirement under the Council's adopted policy. Water Fund operating revenues increased by 17 percent ($1,757,933) during fiscal year 2008. Operating expenses increased 3 percent ($213,829) over fiscal year 2007. This resulted in operating income increasing by $1,544,104 in fiscal year 2008. The Water Fund's net assets increased $4,467,419 during the fiscal year, an 89.5 percent increase over the previous year. Wastewater Fund The Wastewater Fund's unrestricted net assets at the end of fiscal year 2008 were $8,973,781. The Wastewater Fund ended the fiscal year with a working capital balance of $6,846,912, which was 3.8 percent under fiscal year 2007. Wastewater Fund working capital was 91.6 percent of total operating expenses and is well above the minimum requirement for the fund. Operating revenues in the Wastewater Fund were $11,184,565, a $642,603 (6 percent) increase over the previous fiscal year. Operating expenses increased from $6,791,966 to $7,476,022 or 10 percent while operating income decreased by 1 percent from $3,749,996 to $3,708,543. City of College Station, Texas 14 Management's Discussion and Analysis For the Fiscal Year Ended September 30, 2008 (Unaudited) BUDGETARY HIGHLIGHTS The final amended budget for fiscal year 2008 totaled $275,186,615 for all funds. Of this amount $218,873,072 (79.54 percent) was budgeted for operations and maintenance expenditures, and $56,313,543 (20.46 percent) was budgeted for capital improvement projects. In the General Fund the final revised budgeted change in fund balance was $1,469,981 lower than the original budgeted change and the significant items that comprise this difference can be briefly summarized as follows: • $242,377 - Encumbrances rolled over from prior fiscal year. • $141,407- Appropriation for Gain-sharing allocations to City of College Station employees. • $194,582 -Appropriation for CSTV-19 Improvements. • $ 72,856 -Appropriation for General Fund transfer to Print Mail to close fund. • $200,000 -Appropriation for General Fund’s share of Economic Development property. • $ 45,532 -Appropriation for additional personnel in Economic Development and Capital Projects Departments. In the General Fund the actual change in fund balance was $3,264,005 higher than the final revised budgeted change and the significant items that comprise this difference can be briefly summarized as follows: • $1,262,186 – Additional tax revenue generated primarily from higher sales tax and ad valorem revenues. • $1,531,149 – Lower expenditures related to economic development incentive outlays that were budgeted in fiscal year 2008. • $400,954 – Due in part to lower expenditures in the Public Works that were budgeted for and did not occur in fiscal year 2008. • $131,946 – Due in part to lower personnel expenditures than budgeted in the Human Resources Division related to unfilled staff positions. • $417,315 – Lower expenditures in the Planning and Development Services Department due to staff vacancies and for expenditures related to the professional services that did not occur. • $156,991 – Lower expenditures in the Parks and Recreation Department that were budgeted for and did not occur in fiscal year 2008. • ($367,209) – Higher expenditures in the Fire Department due in part to sending mutual aid assistance to communities affected by Hurricane Ike. Strategic planning is a driving force in the preparation of the City's budget. The City Council has identified the following five areas of strategic priority, under which are listed some of the key items in the fiscal year 2008 budget: City of College Station, Texas 15 Management's Discussion and Analysis For the Fiscal Year Ended September 30, 2008 (Unaudited) Core Services Core services include police, fire and emergency management services; traffic and drainage services; the City's administrative services; electric, water, sewer and sanitation services; and capital projects for each of these areas. Key items included in the 2008 fiscal year budget included: • Citywide Safety and Security Additional resources for the addition of two Police Communications Officers, seven Firefighter/Paramedics and the City of College Station portion of the Community Emergency Operations Center; • Effective Communications Additional resources for an additional Broadcast Media Specialist, equipment upgrades and website enhancements to improve communications; • Growing Sustainable Revenue Sources Balanced with Needs Additional resources to acquire a Fiscal Impact Model to assist in determining the fiscal impact of development activities in the City; • Exceptional Multi Modal Mobility Additional resources in the Streets Projects Fund to address transportation needs as well as additional resources in the Public Works operations budget for the maintenance of the traffic signal system as well as resources for re-timing portions of the traffic signal system; • Sustainable Quality City Workforce Additional resources for a citywide job classification study as well as the City’s approved pay plan which provides funds for the performance part of the pay plan and targeted pay adjustments for some public safety employees; • Exceptional Infrastructure and Core Services Additional resources to ensure the City’s infrastructure is well maintained, including $45 million in new appropriations for capital projects in fiscal year 2008. There were also resources from previous years capital budget appropriations that were projected to be spent in fiscal year 2008. The utility capital budget appropriation for the 2008 fiscal year were over $29 million, and over $42 million was projected to be spent on all utility projects. The budget also included an additional $350,000 for street rehabilitation projects. Additional resources established the Capital Projects Department to improve the capital project implementation system; • Diverse Growing Economy Additional resources for Economic Development activities, including meeting commitments made in prior years; • Destination Place to Live and Work Additional resources for both the operations and capital funds for the Parks and Recreation System in College Station, including resources for the newly completed phase of Veteran’s Park and Athletic Complex and resources for the construction and operation of the new Memorial Cemetery, a project the entire community will be proud to have. City of College Station, Texas 16 Management's Discussion and Analysis For the Fiscal Year Ended September 30, 2008 (Unaudited) CAPITAL ASSETS The City of College Station's investment in capital assets for its governmental and business-type activities as of September 30, 2008 amounted to $459,146,261 (net of accumulated depreciation). This investment in capital assets includes land, utility systems, buildings and building improvements, improvements other than buildings, machinery and equipment, infrastructure, and construction in progress. Capital Assets at Year End Net of Accumulated Depreciation Governmental Business-Type Activities Activities Total Land 29,957,616$ 690,707$ 30,648,323$ Utility Systems - 185,922,392 185,922,392 Buildings and Building Improvements 18,369,258 4,748,318 23,117,576 Improvements Other than Buildings 14,450,204 - 14,450,204 Machinery and Equipment 11,599,248 115,231 11,714,479 Infrastructure 96,710,635 - 96,710,635 Construction in Progress 28,745,230 67,837,422 96,582,652 199,832,191$ 259,314,070$ 459,146,261$ Major capital projects completed by the City during the 2008 fiscal year include the following: • West Park ($105,417), • Dartmouth Extension Phase II ($3.6 million), • Traffic Signal at Rock Prairie and Rio Grande ($87,257), • Traffic Signal at Welsh and Holleman ($87,905), • Pedestrian Improvements on 2818 ($714,774), • Pedestrian Improvements on University Drive ($217,957), • Bike Loop ($1,019,594), • Veterans’ Park Phase II ($657,921), • Oaks Park Basketball Pavilion ($287,540), • New Forestry Shop ($826,811), • Southwood Park Little League Lights ($345,747), • John Crompton Park Phase II ($168,650), • West Park (Southside) ($1,237,564), • Gabbard Park Improvements ($140,000), • Bee Creek to Southwest Parkway Drainage ($3,040,882), • West Park Drainage Improvements ($601,475), • Fire Station #3 Relocation ($2,303,101), • Court Security Upgrade ($134,308), • Automated Customer Service (187,864), • Automated Citations ($325,527). Of significance is $8,404,626 in developer capital contributions during fiscal year 2008. These contributions accounted for approximately 2 percent of the $45.915 million in capital assets. City of College Station, Texas 17 Management's Discussion and Analysis For the Fiscal Year Ended September 30, 2008 (Unaudited) Additional information on the City's capital assets can be found in Note IV-C to the financial statements on pages 49-50. DEBT ADMINISTRATION At the end of the 2008 fiscal year, the City of College Station had total debt outstanding of $224,040,000. Of this amount, $124,480,000 (56 percent) comprised debt backed by the full faith and credit of the City. Certain Certificate of Obligations fund business-type activities in the Electric, Water and Wastewater Funds. In fiscal year 2008, a prior period adjustment was made to reflect $8,240,000 in business-type activity 2004 Certificates of Obligation outstanding at October 1, 2007. The remaining debt is revenue bonds secured by specified revenue sources. Year-End Outstanding Debt Payable Governmental Business-Type Activities Activities Total General Obligation Bonds 60,695,000$ -$ 60,695,000$ Certificates of Obligation 39,965,000 23,820,000 63,785,000 Revenue Bonds - 99,560,000 99,560,000 100,660,000$ 123,380,000$ 224,040,000$ The City's total debt increased by $21,365,000 (10.5 percent) during the current fiscal year. The change in total debt was a result of the following: • Issuance of $9,455,000 in general obligation improvement bonds and $26,440,000 in certificates of obligation, which funded governmental and business-type activities; and • Retirement of $4,480,000 in general obligation bonds, $4,395,000 in certificates of obligation, and the retirement of $5,655,000 in utility revenue bonds. The City's General Obligation and Certificates of Obligation have an underlying rating of AA by Standard & Poors ("S&P") and Aa3 by Moody's Investors Service ("Moody's"). The underlying ratings for the City's revenue bonds are A+ by S&P and A1 by Moody's. Additional information on the City's long-term debt can be found in Note IV-G to the financial statements on pages 52-56 of this report. OTHER POST-EMPLOYMENT BENEFITS (“OPEB”) In June 2004, GASB issued Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, which provides guidance on all aspects of OPEB reporting by employers. The requirements of this statement are effective for fiscal periods beginning after December 15, 2007, for governments that were phase 2 for the implementation for SGAS 34. The City, a phase 2 government, is implementing GASB 45 for the fiscal year ending September 30, 2009. The City hired an outside consultant who conducted an actuarial valuation/liability assessment and estimated the annual costs of OPEB benefits under GASB 45. The initial study for the fiscal 2006 was expanded with different scenarios for fiscal 2009, using Projected Unit Credit – 30 year (PUC-30) as its cost method. City of College Station, Texas 18 Management's Discussion and Analysis For the Fiscal Year Ended September 30, 2008 (Unaudited) As noted in Note V.D., the City provides postretirement medical, dental, vision, drug and life insurance benefits for retired employees. Medical (including prescription drug and vision) and dental benefits are self-insured by the City and are currently operated on a pay-as-you-go basis. Life insurance benefits are fully insured. The City’s estimated annual OPEB cost for the fiscal year ending September 30, 2009 range from $9,890 if retirees pay the non-blended retiree rate (the life insurance obligation still exists) to $1,395,242 per year if retirees pay the group (blended) rate to $2,241,140 per year if retirees pay the current subsidized rate. City staff plans to 1) evaluate, with assistance of the actuary and our benefits consultant, the impact of changes to the current plan structure, 2) evaluate, with the assistance of the City’s financial advisor, possible funding options, and 3) prepare and present a comprehensive overview with recommendations and a funding strategy to the City Council. ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES The City of College Station has continued to grow, and indicators of that growth include the following: • An estimated population increase of 70 percent for the period of 1990 through 2008, • An approximate $491 million increase to the ad valorem tax base during the fiscal year, • A local economy that has maintained an annual unemployment rate of less than 5 percent since 1990, and • Sales and mixed drink beverage tax revenue that grew by 10 percent during the fiscal year. Part of the reason the City has been insulated from some of the effects of the slower national and state economy is due to the major influence of Texas A&M University on the local economy. The Fiscal Year 2009 budget was prepared with the key goal of focusing the resources of the organization to improve the quality of life in College Station at a reasonable cost. This is done by continuing a prudent approach to City finances, meeting strategic priorities identified by the City Council, maintaining service quality and excellence, and enhancing and maintaining infrastructure and public facilities needed to provide excellent services. The ad valorem tax rate for the 2009 fiscal year is $0.4394 per $100 valuation ($0.193352 for operations and maintenance and $0.246048 for debt service). This tax rate will meet the debt service obligations of the City and provide operations and maintenance funding in the General Fund. Current and anticipated growth in the community has resulted in increased demands for services and has put pressure on the City's utility systems. Consequently, the 2009 budget includes a 9 percent increase in the Electric Fund. This rate increase is needed to meet the operating, capital and debt service coverage requirements in the fund and to ensure continued high quality service is provided as the community continues to grow. The 2009 budget does not include a rate increase in the Wastewater Fund and Sanitation Fund. The Water Fund changed its rate structure to a conservation rate structure for fiscal year 2009. The Drainage Fund increased monthly residential rates from $3.50 to $5.00. City of College Station, Texas 19 Management's Discussion and Analysis For the Fiscal Year Ended September 30, 2008 (Unaudited) The fiscal year 2009 budget for capital improvements totals $47,939,073. The City anticipates significant expenditures for infrastructure projects throughout the city. These projects include rehabilitation of utilities, drainage ways, and streets. Some of the more significant projects are as follows (amounts presented reflect appropriations over the life of the project): • Discovery Drive Extension ($2 million), • Street Rehabilitation in the Southside Area ($2.5 million), • Street Rehabilitation in the Northgate Area ($2.3 million), • Rock Prairie Road Widening Design and Land ($2.9 million), • Barron Road Improvements ($3.0 million), • William D. Fitch Widening Phase II ($4.5 million), • Eagle Avenue Extension ($825 thousand), • Longmire Pedestrian Improvements ($981 thousand), • Adamson Pool Bathhouse ($1.3 million), • Municipal Facility Improvements ($2.0 million), • Radio System Replacement ($4.9 million), • Well #7 Collection Line ($3.7 million), • Parallel Wellfield Collection Line Phase I ($4.3 million), • Land Acquisition – Well Sites ($6.6 million), • Raymond Stotzer Water Line Extension ($1.5 million), • Raymond Stotzer Wastewater Extension (2.0 million), • Lick Creek – replace trunk line ($2.8 million), • Southside Water Rehabilitation ($4.9 million), • Southside Wastewater Rehabilitation ($4.3 million), • Well 8 ($4.2 million), • Well 8 Collection Line ($3.6 million), • Bee Creek Drainage Phase 4 and 5 ($1.4 million). The City plans to issue $1,095,000 in general obligation bonds from the 2003 bond authorization for the following: $540,000 for street improvements, $100,000 for sidewalk improvements and $455,000 for traffic signals and safety system improvement projects. The City also plans to issue $3,040,000 in certificates of obligations for the following: $2,490,000 for radio system replacement and $550,000 for technology projects. The City also plans to issue $24,255,000 in utility revenue bonds for the following: $9,725,000 for electric capital projects, $10,750,000 for water capital projects, and $3,750,000 for wastewater capital projects. REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the City of College Station's financial position for all who have an interest in the City's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to: City of College Station Fiscal Services Department ATTN: Chief Financial Officer P.O. Box 9960 College Station, Texas 77842-9960 or visit our website at http://www.cstx.gov. City of College Station, Texas 20 21 22 CITY OF COLLEGE STATION FINANCIAL STATEMENTS CITY OF COLLEGE STATION Statement of Net Assets September 30, 2008 Governmental Activities Business-type Activities Total ASSETS Cash and cash equialents 59,107,971$ 20,119,962$ 79,227,933$ Investments 28,213,600 9,603,722 37,817,322 Receivables (net of allowance for uncollectibles)4,596,843 14,771,032 19,367,875 Due from BVSWMA 149,379 -149,379 Internal balance (2,772,805)2,772,805 - Inventories 162,427 1,873,353 2,035,780 Prepaids 343,525 -343,525 Restricted assets: Temporarily restricted: Cash and cash equivalents 395,880 6,655,910 7,051,790 Investments 188,963 3,177,019 3,365,982 Accrued Interest Receivable -119,031 119,031 Permanently restricted: Cash and cash equivalents 1,182,547 -1,182,547 Investments 564,457 -564,457 Receivables, net 31,559 -31,559 Inventory 636 -636 Equity in Joint Venture -11,496,186 11,496,186 Deferred Issuance Costs, net 284,826 859,979 1,144,805 Capital assets (net of accumulated depreciation): Land and Construction in Progress 58,702,846 68,528,128 127,230,974 Other capital assets net of accumulated depreciation 141,129,345 190,785,942 331,915,287 Total assets 292,281,999 330,763,069 623,045,068 LIABILITIES Accounts payable and other current liabilities 3,100,396 12,695,456 15,795,852 Retainage Payable 611,988 496,791 1,108,779 Refundable Deposits 37,848 -37,848 Claims Payable 1,405,955 -1,405,955 Accrued liabilities 2,458,327 739,538 3,197,865 Customer Construction Advances 175,019 81,313 256,332 Unearned Revenues -113,186 113,186 Liabilities Payable from Restricted Assets: Accrued interest payable 562,640 658,700 1,221,340 Accrued Liabilities -16,619 16,619 Refundable deposits -1,665,611 1,665,611 Noncurrent liabilities: Due within one year: Compensated Absences 190,000 23,743 213,743 Bonds and Certificates of Obligation Payable 8,225,000 6,735,000 14,960,000 Due in more than one year: Bonds and Certificates of Obligation Payable 92,435,000 116,645,000 209,080,000 Deferred Charge - Refunding (363,270)-(363,270) Unamortized Premium/Discount on Bonds 274,009 (174,605)99,404 Compensated Absences 2,172,575 451,138 2,623,713 Total liabilities 111,285,487 140,147,490 251,432,977 NET ASSETS Invested in capital assets, net of related debt 114,935,845 145,066,758 260,002,603 Restricted for: Debt service 3,255,054 1,590,977 4,846,031 Perpetual care: Expendable 1,756,167 -1,756,167 Other purposes 1,345,792 -1,345,792 Unrestricted 59,703,654 43,957,844 103,661,498 Total net assets 180,996,512$ 190,615,579$ 371,612,091$ The notes to the financial statements are an integral part of this statement. 23 CITY OF COLLEGE STATION, TEXAS Statement of Activities For the Year Ended September 30, 2008 Program Revenues Operating Capital Charges for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Governmental activities: General Government $ 8,551,304 $ 1,331,581 $ 1,170,197 $ - Fiscal Services 2,977,362 684,666 - - Police 13,395,874 4,307,550 226,147 - Fire 11,359,260 820,690 317,069 - Planning and Development Services 1,910,359 1,357,037 - - Public Works 9,467,081 1,255,525 1,545 3,055,501 Capital Projects 719,391 - Parks and Recreation 10,385,095 1,911,789 20,212 - Information Technology 2,749,327 - - - Interest on long-term debt 3,860,801 - - - Unallocated Depreciation 667,890 - - - Total governmental activities 66,043,744 11,668,838 1,735,170 3,055,501 Business-type activities: Electric 70,485,982 76,787,412 - 632,029 Water 8,706,415 12,025,086 - 2,090,305 Sewer 9,159,176 11,184,565 - 2,626,791 Sanitation 6,244,639 9,628,798 - - Northgate Parking 668,237 673,818 - - Total business-type activities 95,264,449 110,299,679 - 5,349,125 Total primary government $ 161,308,193 $ 121,968,517 $ 1,735,170 $ 8,404,626 General Revenue: Property taxes Sales and Mixed Beverage taxes Franchise taxes Hotel taxes Unrestricted investment earnings Transfers (Note IV. D.) Total general revenues and transfers Change in net assets Net assets - beginning Prior Period Adjustment Net assets - ending The notes to the financial statements are an integral part of this statement. 24 Net Revenue (Expense) and Changes in Net Assets Governmental Business-type Activities Activities Total $ (6,049,526) $ - $ (6,049,526) (2,292,696) - (2,292,696) (8,862,177) - (8,862,177) (10,221,501) - (10,221,501) (553,322) - (553,322) (5,154,510) - (5,154,510) (719,391) - (719,391) (8,453,094) - (8,453,094) (2,749,327) - (2,749,327) (3,860,801) - (3,860,801) (667,890) - (667,890) (49,584,235) - (49,584,235) - 6,933,459 6,933,459 - 5,408,976 5,408,976 - 4,652,180 4,652,180 - 3,384,159 3,384,159 - 5,581 5,581 - 20,384,355 20,384,355 (49,584,235) 20,384,355 (29,199,880) 20,670,112 - 20,670,112 20,241,973 - 20,241,973 2,090,779 - 2,090,779 3,585,512 - 3,585,512 3,385,844 1,330,785 4,716,629 7,559,165 (10,433,954) (2,874,789) 57,533,385 (9,103,169) 48,430,216 7,949,150 11,281,186 19,230,336 164,807,362 187,574,393 352,381,755 8,240,000 (8,240,000) - $ 180,996,512 $ 190,615,579 $ 371,612,091 25 CITY OF COLLEGE STATION, TEXAS Balance Sheet Governmental Funds September 30, 2008 General Debt Service Streets Projects Other Governmental Funds Total Governmental Funds Assets Equity in Cash and Cash Equivalents 9,096,954$ 2,573,421$ 16,992,373$ 22,513,778$ 51,176,526$ Equity in Investments 4,342,186 1,228,353 8,110,852 10,746,347 24,427,738 Receivables Accrued Interest 57,390 15,920 105,864 138,136 317,310 Grants 131,073 --428,270 559,343 Letter of Credit 25,000 ---25,000 Accounts 1,556,347 -380,187 641,288 2,577,822 Taxes 2,109,857 280,204 --2,390,061 Other 20,547 ---20,547 Less Allowance for Uncollectible Accounts (895,492)-(373,234)(86,222)(1,354,948) Due from Other Funds 149,379 ---149,379 Inventories 62,919 --636 63,555 Prepaid Costs 27,792 -315,733 -343,525 Restricted Assets Equity in Cash and Cash Equivalents 395,880 ---395,880 Equity in investments 188,963 ---188,963 Total Assets 17,268,795$ 4,097,898$ 25,531,775$ 34,382,233$ 81,280,701$ Liabilities and Fund Balances Accounts Payable 939,552$ -$ 856,592$ 1,075,614$ 2,871,758$ Retainage Payable 16,483 -241,248 354,257 611,988 Interfund Payables 600,000 --200,000 800,000 Refundable Deposits 37,848 ---37,848 Accrued Liabilities 2,197,298 --215,509 2,412,807 Customer Construction Advances 129,757 -45,262 -175,019 Other Deferred Revenues 1,362,468 280,204 278 397,395 2,040,345 Total Liabilities 5,283,406 280,204 1,143,380 2,242,775 8,949,765 Fund Balances Reserved 2,305,476 3,817,694 24,388,395 20,613,449 51,125,014 Unreserved, Undesignated General Fund 9,679,913 ---9,679,913 Special Revenue Funds ---11,526,009 11,526,009 Total Fund Balances 11,985,389 3,817,694 24,388,395 32,139,458 72,330,936 Total Liabilities and Fund Balances 17,268,795$ 4,097,898$ 25,531,775$ 34,382,233$ 81,280,701$ The notes to the financial statements are an integral part of this statement. 26 CITY OF COLLEGE STATION, TEXAS Reconciliation of Governmental Funds Balance Sheet to the Statement of Net Assets September 30, 2008 Amounts reported for governmental activities in the statement of net assets are different because: Total Fund Balance per balance sheet: 72,330,936$ Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. 190,789,934 Other long-term assets are not available to pay for current-period expenditures and, therefore, are deferred in the funds. 2,048,398 Internal Service Funds are used by management to charge the costs of certain activities, such as insurance, fleet maintenance, equipment replacement and print/mail, to individual funds. The assets and liabilities of certain internal service funds are included in governmental activities in the statement of net assets. 18,987,445 Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds. (103,534,288) The issuance of debt is treated as an other financing source, and therefore is not capitalized and amortized over the life of the debt. The premium on issued debt is treated as an other financing source and thus is not amortized annually. Refunding debt is treated as an other financing use and is not treated as a deferred charge and amortized over the life of the debt. 374,087 Net Assets of governmental activities: 180,996,512$ The notes to the financial statements are an integral part of this statement. 27 General Debt Service Streets Projects Other Governmental Funds Total Governmental Funds Revenues Taxes 30,984,741$ 11,012,440$ -$ 4,591,195$ 46,588,376$ Licenses and Permits 1,154,902 - - - 1,154,902 Intergovernmental 536,215 - 1,545 1,170,197 1,707,957 Charges for Services 3,149,076 - - 641,071 3,790,147 Fines, Forfeits, and Penalties 3,412,827 - - 385,486 3,798,313 Special Assessment 914 - - 1,254,611 1,255,525 Investment Income 593,514 350,744 793,773 1,148,605 2,886,636 Rents and Royalties 279,004 - - - 279,004 Contributions 25,046 - - 2,167 27,213 Reimbursed Expenditures 426 - 38,932 6,680 46,038 Other 159,477 - 915 886,039 1,046,431 Total Revenues 40,296,142 11,363,184 835,165 10,086,051 62,580,542 Expenditures Current General Government 6,187,469 - 39,172 1,093,021 7,319,662 Fiscal Services 3,411,717 - 6,709 155,260 3,573,686 Police 13,219,117 - - - 13,219,117 Fire 11,251,400 - - - 11,251,400 Planning and Development Services 2,281,747 - - - 2,281,747 Public Works 7,157,121 - - 25,322 7,182,443 Capital Improvement Projects 715,707 - - - 715,707 Parks and Recreation 8,985,860 - - 85,338 9,071,198 Information Services 3,366,764 - - - 3,366,764 Library 993,102 - - - 993,102 Reimbursed Administration (6,497,466) - 805,667 1,919,437 (3,772,362) Contributions 657,592 - - 1,494,000 2,151,592 Other 173,637 - - 30,701 204,338 Capital Outlay - - 7,881,279 11,657,043 19,538,322 Debt Service Principal Retirement - 8,530,000 - - 8,530,000 Interest Payments - 3,892,490 - - 3,892,490 Fiscal Charges - 11,221 15,588 43,987 70,796 Intergovernmental - - 881,604 - 881,604 Total Expenditures 51,903,767 12,433,711 9,630,019 16,504,109 90,471,606 Deficiency of Revenues Under Expenditures (11,607,625) (1,070,527) (8,794,854) (6,418,058) (27,891,064) Other Financing Sources (Uses) Insurance of Debt - - 11,232,160 8,737,840 19,970,000 Sales of Capital Assets 10,981 - - - 10,981 Transfers In 11,591,668 1,422,163 143,563 671,020 13,828,414 Transfer Out (942,224) - - (2,098,874) (3,041,098) Total Other Financing Sources 10,660,425 1,422,163 11,375,723 7,309,986 30,768,297 Net Change in Fund Balances (947,200) 351,636 2,580,869 891,928 2,877,233 Fund Balances, October 1 12,932,589 3,466,058 21,807,526 31,247,530 69,453,703 Fund Balances, September 30 11,985,389$ 3,817,694$ 24,388,395$ 32,139,458$ 72,330,936$ The notes to the financial statements are an integral part of this statement. CITY OF COLLEGE STATION, TEXAS Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the Fiscal Year Ended September 30, 2008 28 CITY OF COLLEGE STATION, TEXAS Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Fiscal Year Ended September 30, 2008 Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balance - total governmental funds: 2,877,233$ 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 exceeded depreciation in the current period. 13,498,040 The effect of various miscellaneous transactions involving capital assets is to increase net assets. 3,044,520 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. 382,821 The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long- term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. This amount is the net effect of these differences in the treatment of long-term debt. (11,440,000) Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. (187,476) Internal Service Funds are used by management to charge the costs of certain activities, such as insurance, fleet maintenance, equipment replacement and print/mail, to individual funds. The net revenues of certain activities of internal service funds is reported within governmental activities. (225,988) Change in Net Assets of governmental activities: 7,949,150$ The notes to the financial statements are an integral part of this statement. 29 Governmental Activities Electric Water Wastewater Other Enterprise Funds Total Enterprise Funds Internal Service Funds Current Assets Equity in Cash and Cash Equivalents 9,329,040$ 4,846,191$ 4,868,744$ 963,891$ 20,007,866$ 9,226,088$ Equity in Investments 4,452,966 2,313,199 2,323,964 460,087 9,550,216 4,403,825 Restricted Assets Equity in Cash and Cash Equivalents 298,290 442,479 433,536 - 1,174,305 - Equity in Investments 142,380 211,205 206,936 - 560,521 - Accrued Interest Receivable - 119,031 - - 119,031 - Receivables Accrued Interest 64,914 32,257 32,860 6,206 136,237 56,229 Accounts 10,997,471 1,642,946 2,277,836 1,013,093 15,931,346 68,048 Other 1,097,873 2,000 - - 1,099,873 15,003 Less: Allowance for Uncollectible Accounts (2,066,777) (93,795) (181,188) (115,531) (2,457,291) (24,811) Due from Other Funds 40,000 40,000 40,000 - 120,000 - Intergovernmental Receivable 13,820 - - 17,792 31,612 8,053 Inventories 1,442,959 357,808 32,774 39,812 1,873,353 99,508 Prepaid items ------ Total Current Assets 25,812,936 9,913,321 10,035,462 2,385,350 48,147,069 13,851,943 Noncurrent Assets Restricted Assets Equity in Cash and Cash Equivalents 1,165,991 1,853,918 2,461,696 - 5,481,605 - Equity in Investments 556,555 884,918 1,175,025 - 2,616,498 - Total Restricted Assets 1,722,546 2,738,836 3,636,721 - 8,098,103 - Advance to Other Funds 360,000 160,000 160,000 - 680,000 - Equity in Joint Venture - - - 11,496,186 11,496,186 - Deferred Charges Bond Issuance Charges 377,199 420,426 420,373 - 1,217,998 - Accumulated Amortization (99,920) (119,510) (138,589) - (358,019) - Total Deferred Charges 277,279 300,916 281,784 - 859,979 - Property and Equipment Utility Plant 125,566,305 85,317,354 82,210,378 - 293,094,037 - Buildings - - - 5,743,755 5,743,755 786,525 Machinery and Equipment - - - 588,233 588,233 27,390,602 Accumulated Depreciation (53,493,322) (28,044,157) (26,142,138) (1,468,438) (109,148,055) (19,519,636) Construction in Progress 7,445,112 41,810,310 18,577,669 4,330 67,837,421 892,738 Land - - - 690,707 690,707 - Total Property and Equipment 79,518,095 99,083,507 74,645,909 5,558,587 258,806,098 9,550,229 Total Noncurrent Assets 81,877,920 102,283,259 78,724,414 17,054,773 279,940,366 9,550,229 Total Assets 107,690,856 112,196,580 88,759,876 19,440,123 328,087,435 23,402,172 Liabilities Current Liabilities Accounts Payable 11,782,604 650,228 169,717 71,172 12,673,721 250,373 Retainage Payable 76,493 415,761 4,537 - 496,791 - Interfund Payable ------ Accrued Liabilities 398,527 62,904 85,517 141,158 688,106 96,952 Customer Construction Advances 24,382 44,801 12,130 - 81,313 - Other Deferred Revenues 13,820 - - 99,366 113,186 8,053 Claims Payable -----1,405,955 Payable from Restricted Assets Accounts Payable 836 - - - 836 - Accrued Interest Payable 139,356 296,382 222,962 - 658,700 - Accrued Liablities 13,122 - 2,661 - 15,783 - Refundable Deposits 1,386,605 269,836 - 9,170 1,665,611 - Certificates of Obligation 424,862 235,000 240,138 - 900,000 - Revenue Bonds 1,392,764 1,991,351 2,450,885 - 5,835,000 - Total Current Liablities 15,653,371 3,966,263 3,188,547 320,866 23,129,047 1,761,333 Noncurrent Liabilities Certificates of Obligation 10,603,578 6,720,000 5,596,422 - 22,920,000 - Revenue Bonds 24,556,103 39,432,111 29,736,786 - 93,725,000 - Unamortized Discount on Certificates and Bonds (64,206) (26,691) (83,708) - (174,605) - Accrued Vacation 189,286 82,264 83,685 60,227 415,462 110,346 Total Noncurrent Liabilites 35,284,761 46,207,684 35,333,185 60,227 116,885,857 110,346 Total Liabilities 50,938,132 50,173,947 38,521,732 381,093 140,014,904 1,871,679 Net Assets Invested in Capital Assets, net of related debt 44,604,819 53,771,488 40,623,891 5,558,587 144,558,785 9,550,229 Restricted for: Debt service 440,670 509,835 640,472 - 1,590,977 - Unrestricted 11,707,235 7,741,310 8,973,781 13,500,443 41,922,769 11,980,264 Total Net Assets 56,752,724$ 62,022,633$ 50,238,144$ 19,059,030$ 188,072,531$ 21,530,493$ Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds: 2,543,048 Net assets business-type activites:190,615,579$ The notes to the financial statements are an integral part of this statement. Business-type Activities - Enterprise Funds CITY OF COLLEGE STATION, TEXAS Statement of Net Assets Proprietary Funds September 30, 2008 30 Governmental Activities Electric Water Wastewater Other Enterprise Funds Total Enterprise Funds Internal Service Funds Operating Revenues Charges for Services 74,975,691$ 11,314,839$ 10,979,881$ 7,367,822$ 104,638,233$ 8,179,835$ Premiums - - - - - 7,809,912 Other 1,637,643 497,694 204,684 86,482 2,426,503 257,727 Total Operating Revenues 76,613,334 11,812,533 11,184,565 7,454,304 107,064,736 16,247,474 Operating Expenses Electric Operations 63,743,046 - - - 63,743,046 - Salaries and Benefits - 1,281,681 2,120,886 2,023,931 5,426,498 2,532,650 Supplies - 79,924 393,977 582,360 1,056,261 915,131 Maintenance - 39,938 220,229 551,796 811,963 205,131 Purchased Professional Services - 63,851 197,182 508,562 769,595 77,094 Purchased Property Services - 1,246,413 776,983 1,637,992 3,661,388 71,465 Other Purchased Services - 167,686 353,069 694,580 1,215,335 638,142 Claims - - - - - 4,999,828 Administration Fees - - - - - 599,747 Contributions - - - - - 34,534 Premiums - - - - - 977,516 Reimbursed Administrative - 1,397,292 831,287 655,424 2,884,003 1,038,734 Depreciation 5,120,687 2,280,354 2,496,508 166,495 10,064,044 2,265,908 Other - 196,438 85,901 (8,845) 273,494 15,059 Total Operating Expenses 68,863,733 6,753,577 7,476,022 6,812,295 89,905,627 14,370,939 Operating Income 7,749,601 5,058,956 3,708,543 642,009 17,159,109 1,876,535 Nonoperating Revenues (Expenses) Investment Income 479,306 366,059 417,764 59,830 1,322,959 507,034 Reimbursed Expenses 174,078 212,553 - 135 386,766 20,748 Earnings in Joint Venture - - - 2,848,177 2,848,177 - Interest Expense 1,363,567 1,981,441 1,726,340 - 5,071,348 - Other, Net (153,019) 84,029 80,627 (35,600) (23,963) 342,160 Total Nonoperating Revenues (Expenses) (863,202) (1,318,800) (1,227,949) 2,872,542 (537,409) 869,942 Income Before Capital Contributions and Transfers 6,886,399 3,740,156 2,480,594 3,514,551 16,621,700 2,746,477 Capital Contributions and Transfers Capital Contributions 632,029 2,090,305 2,626,791 - 5,349,125 - Transfers In 470,156 - - - 470,156 116,878 Transfers Out (7,641,082) (1,363,042) (1,347,193) (515,500) (10,866,817) (3,382,322) Total Capital Contributions and Transfers (6,538,897) 727,263 1,279,598 (515,500) (5,047,536) (3,265,444) Change in Net Assets 347,502 4,467,419 3,760,192 2,999,051 11,574,164 (518,967) Beginning Net Assets 60,864,962 57,555,214 50,258,212 16,059,979 22,049,460 Prior Period Adjustment (4,459,740) - (3,780,260) - - Ending Net Assets 56,752,724$ 62,022,633$ 50,238,144$ 19,059,030$ 21,530,493$ Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds: (292,980) Change in net assets of business-type activities:11,281,184$ The notes to the financial statements are an integral part of this statement. Business-type Activities - Enterprise Funds CITY OF COLLEGE STATION, TEXAS Statement of Revenues, Expenses and Changes in Net Assets Proprietary Funds For the Fiscal Year Ended September 30, 2008 31 Governmental Activities Other Total Internal Enterprise Enterprise Service Electric Water Wastewater Funds Funds Funds Cash Flows from Operating Activities: Cash Received from Customers 76,285,762$ 11,619,422$ 10,370,790$ 7,323,078$ 105,599,052$ 16,238,495$ Cash Payments to Suppliers for Goods and Services (59,456,821) (2,934,548) (3,127,051) (4,641,035) (70,159,456) (9,821,106) Cash Payments to Employees for Services (3,403,132) (1,291,156) (2,118,133) (2,002,109) (8,814,529) (2,578,680) Customer Deposits Returned (178,670) (32,866) - (1,880) (213,416) - Cash Received/Paid for Reimbursed Expenses 206,755 26,561 (2,986) 135 230,465 20,748 Cash Received for Miscellaneous Revenues - 94,012 100,708 3,293 198,013 342,261 Cash Paid to Other Funds - - - - - (81,459) Cash Paid for Miscellaneous Expenses (153,019) (9,983) (20,081) (41,076) (224,159) (101) Net Cash Provided by Operating Activities 13,300,875 7,471,442 5,203,247 640,406 26,615,970 4,120,158 Cash Flows from Noncapital Financing Activities: Cash Paid to Other Funds (Due From / Advance to Other Funds) (200,000) (200,000) (200,000) - (600,000) - Transfers In from Other Funds 470,156 - - - 470,156 131,263 Transfers Out to Other Funds (7,641,082) (1,363,042) (1,347,193) (475,500) (10,826,817) (1,397,964) Net Cash Used by Noncapital Financing Activities (7,370,926) (1,563,042) (1,547,193) (475,500) (10,956,661) (1,266,701) Cash Flows from Capital and Related Financing Activities: Acquisition and Construction of Capital Assets (9,741,674) (14,366,138) (3,588,850) (79,224) (27,775,886) (1,963,943) Proceeds from Sale of Assets - - - - - 182,823 Principal Paid on Revenue Bonds (1,437,350) (1,929,684) (2,287,966) - (5,655,000) - Interest Paid on Revenue Bonds (1,206,671) (1,992,422) (1,554,865) - (4,753,958) - Principal Paid on Certificates of Obligation (186,300) (158,700) - - (345,000) - Interest Paid on Certificates of Obligation (187,320) (157,928) - - (345,248) - Proceeds from Certificates of Obligations 6,700,000 6,900,000 2,200,000 - 15,800,000 - Net Cash Used by Capital and Related Financing Activities (6,059,315) (11,704,872) (5,231,681) (79,224) (23,075,092) (1,781,120) Cash Flows from Investing Activities: Purchase of Investments (15,206,247) (11,086,813) (11,219,016) (1,289,711) (38,801,787) (12,819,019) Proceeds from Sale and Maturities of Investment Securities 16,332,473 14,219,385 12,683,557 1,380,649 44,616,064 13,349,434 Investment Income 488,346 388,650 431,558 58,623 1,367,177 495,889 Net Cash Provided by Investing Activities 1,614,572 3,521,222 1,896,099 149,561 7,181,454 1,026,304 Net Increase (decrease) in Cash and Cash Equivalents 1,485,206 (2,275,250) 320,472 235,243 (234,329) 2,098,641 Cash and Cash Equivalents, Oct. 1 9,308,115 9,417,838 7,443,504 728,648 26,898,105 7,127,447 Cash and Cash Equivalents, Sept. 30 10,793,321$ 7,142,588$ 7,763,976$ 963,891$ 26,663,776$ 9,226,088$ Business-type Activities - Enterprise Funds CITY OF COLLEGE STATION, TEXAS Statement of Cash Flows Proprietary Funds For the Fiscal Year Ended September 30, 2008 32 Governmental Activities Other Total Internal Enterprise Enterprise Service Electric Water Wastewater Funds Funds Funds Reconciliation of Operating Income to Net Cash Provided by Operating Activities: Operating Income 7,749,601$ 5,058,956$ 3,708,543$ 642,009$ 17,159,109$ 1,876,535$ Adjustment to Reconcile Operating Income to Net Cash Provided by Operating Activities: Depreciation, Bad Debt Expense, Inventory Loss 5,120,687 2,280,354 2,496,508 166,495 10,064,044 2,265,908 Provision for Uncollectible Accounts 228,602 15,086 28,252 16,315 288,255 543 Miscellaneous Nonoperating Revenues 206,755 120,573 97,722 3,428 428,478 363,009 Miscellaneous Nonoperating Expenses (153,019) (9,983) (267,081) (41,076) (471,159) (101) Changes in Assets and Liabilities: Change in Accounts Receivable (340,570) (193,111) (813,775) (135,987) (1,483,443) (8,979) Change in Deferred Revenues 12,998 - - 4,761 17,759 - Change in Inventory (35,105) (44,080) 12,544 (34,738) (101,379) 77,125 Change in Accounts Payable 619,860 285,987 (62,219) 5,641 849,269 (397,011) Change in Due from Other Funds - - - - - (81,459) Change in Claims Payable - - - - - 219,928 Change in Accrued Liabilities 53,164 (4,690) 132 3,336 51,942 (166,535) Change in Refundable Deposits (178,670) (32,866) - (1,880) (213,416) - Change in Accrued Vacation 16,572 (4,784) 2,621 12,102 26,511 (28,805) Total Adjustments 5,551,274 2,412,486 1,494,704 (1,603) 9,456,861 2,243,623 Net Cash Provided by Operating Activities 13,300,875$ 7,471,442$ 5,203,247$ 640,406$ 26,615,970$ 4,120,158$ Noncash Operating, Financing, Capital and Investing Activities: During the Fiscal Year the Enterprise Fund added contributed capital in the amount of $5,349,125. Adjustments at 9/30/08 to investments to record income accrual and fair value changes were as follows: Enterprise Fund $167,571 and Internal Service Funds 70,939. The notes to the financial statements are an integral part of this statement. Business-type Activities - Enterprise Funds CITY OF COLLEGE STATION, TEXAS Statement of Cash Flows Proprietary Funds For the Fiscal Year Ended September 30, 2008 33 34 CITY OF COLLEGE STATION NOTES TO THE FINANCIAL STATEMENTS Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 I. Summary of Significant Accounting Policies A. Financial Reporting Entity The City of College Station, Texas ("City"), the financial reporting entity presented in these financial statements, was incorporated in 1938 and is a municipal corporation incorporated under the provisions of H.B. 901 of the Texas Legislature. The City operates under a Council- Manager form of government and provides such services as authorized by its charter to advance the welfare, health, comfort, safety and convenience of the City and its inhabitants. The City of College Station entered into a joint venture in 1990 with the City of Bryan, Texas creating the Brazos Valley Solid Waste Management Agency ("BVSWMA"). BVSWMA was formed to combine landfill operations for the two cities. It is subject to joint control, and each City reports a 50% interest in BVSWMA. The City's equity interest in BVSWMA is reported in the Sanitation Fund. (See Note V-C). The financial statements of the City have been prepared in conformity with generally accepted accounting principles ("GAAP") as applied to state and local governments. The more significant of the City's accounting policies are described below. B. Government-Wide and Fund Financial Statements The government-wide financial statements (e.g., the statement of net assets and the statement of activities) report information on all of the nonfiduciary activities of the City. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses for 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 and major individual enterprise funds are reported as separate columns in the fund financial statements. C. 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. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements 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 City of College Station, Texas 35 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. The City considers revenues to be available if they are collected within 30 days of the end of the current fiscal period. Expenditures are generally recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to vacation, claims, and judgments, are recorded only when payment is due. Property taxes, other local taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and, therefore, have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when the City receives cash. The City reports the following major governmental funds: The General Fund is the City's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. All general tax revenues and other receipts that are not restricted by law or contractual agreement to some other fund are accounted for in this fund. General operating expenditures, fixed charges and capital improvement costs that are not paid through other funds are paid from the General Fund. The Debt Service Fund accounts for the financial resources accumulated for the payment of principal, interest and related costs on long-term debt paid primarily from taxes levied by the City. The fund balance of the Debt Service Fund is reserved to signify that the amounts are restricted exclusively for debt service expenditures. The Streets Projects Fund accounts for the costs of new street construction, street improvements, and traffic signalization made with funds provided by proceeds from the sale of general obligation bonds and by investing those proceeds. The City reports the following major proprietary funds: The Electric Fund accounts for the activities necessary to provide electric services to the residents of the City. These activities include administration, distribution system operations and maintenance, transmission system operations and maintenance, new construction, and financing and related debt service. Billing and collection services are accounted for as an internal service fund. The Water Fund accounts for the activities necessary to provide water services to the residents of the City. These activities include administrative services, water production and distribution system operations and maintenance, new construction, financing and related debt service. Billing and collection services are accounted for as an internal service fund. The Wastewater Fund accounts for the activities necessary to provide sewer collection and treatment services to the residents of the City. These activities include administrative services, wastewater system operations and maintenance, new construction, financing and related debt service. Billing and collection services are accounted for as an internal service fund. Additionally, the City reports the following fund types: Internal service funds account for activities related to the operation and maintenance of the City's radio and telephone systems; administration of health insurance provided to City employees; the City's risk management activities, including general liability, unemployment, City of College Station, Texas 36 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 and workers' compensation claims and associated administrative expenses on a cost reimbursement basis; utility billing and collection activities related to the City's electric, water, and wastewater utilities and residential and commercial garbage collection; activities related to the management of the City's vehicles and heavy equipment, including preventative maintenance and vehicle repair; and activities related to the purchase and replacement of vehicles and large motorized equipment, telephone and radio systems, and technological infrastructure equipment not budgeted in other funds. Private sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The City has elected to not follow subsequent private sector guidance. In general, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this rule are payments-in-lieu of taxes, indirect costs and franchise fees, and other charges between the City's Electric, Water, and Wastewater Funds because elimination of these charges would distort the direct costs and program revenues reported in the Statement of Activities. Amounts reported as 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. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services in connection with the fund's principal ongoing operations. The principal operating revenues of the City's enterprise and internal service funds are charges for customer services including electric, water, wastewater, and sanitation fees, equipment purchase amounts, and risk management charges. Operating expenses for enterprise funds and internal service funds include the cost of services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City's policy to use unrestricted resources first, and then restricted resources as they are needed. D. Assets, Liabilities, and Net Assets or Equity Cash and Cash Equivalents Cash and cash equivalents are short term highly liquid investments that are (a) readily convertible to known amounts of cash and (b) so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Therefore, for purposes of the statement of cash flows, cash and cash equivalents (including restricted assets) include demand accounts, investment pools, money market mutual funds, and agency securities notes with original maturities of three months or less when purchased. All cash, except for petty cash accounts, is deposited with the City's depository bank in interest bearing accounts or is invested. City of College Station, Texas 37 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 The City uses a pooling method to account for cash and cash equivalents. Equity in cash and cash equivalents and interest income from the cash pool is allocated to the participating funds on a monthly basis. The amount of the allocation is determined by calculating a ratio of each fund's equity in the pool to the total pool. Investments Investments are made in accordance with the City's Investment Policy which was adopted by the City Council in October 2007. This policy is applicable to all City funds and permits investment in obligations of the U.S. Government or its agencies, repurchase agreements, commercial paper, certificates of deposit, guaranteed investment contracts, public funds investment pools, and money market mutual funds. This policy states that the City Manager shall designate the City’s Investment Officer with whom responsibility and authority for investment transactions reside. The investments purchased under the provisions of the Investment Policy are managed to maintain liquidity for meeting the City's needs for cash and to limit potential market risks in periods of rising interest rates which depress the market value of securities. As a guideline, maturity of securities should not exceed five years for cash management purposes, with an optimum weighted average maturity of less than two years. Investments in securities of a longer maturity than two years are considered prudent for funds maintained for capital construction and debt service funds, if necessary to meet projected disbursement schedules. As a general guideline, the City’s cash management portfolio is designed with the objective of meeting, over the course of full market cycles, the average return on three-month U.S. Treasury Bills, or the average rate of federal funds, whichever is higher. These indices are considered benchmarks for riskless investment transactions and therefore comprise a standard for the portfolio's rate of return. The investment program seeks to augment rates of return above this level. In a diversified portfolio, measured losses are inevitable and must be considered within the context of the overall portfolio. The objective in investment of construction funds is at least to match inflation increases in construction costs. Active portfolio management includes the practice of selling securities prior to maturity and using the proceeds to purchase other securities. Such "swaps" are performed for a variety of valid reasons: to lengthen maturities as interest rates rise, to secure market profits and shorten maturities as interest rates fall, and to take advantage of the differences in relative yield between different types of securities and varying maturities. "Swap" analysis is the responsibility of the City's Investment Officer and the decision to execute the "swap" rests with her. To protect the portfolio from imprudent trading, no security may be sold until such time as the current market value of the security plus interest earned from date of purchase is at least equal to the purchase price of that security. State statutes authorize the City to invest in fully-insured time deposits, direct debt securities of the United States or its agencies, and fully collateralized repurchase agreements. The repurchase agreements must be purchased pursuant to a master repurchase agreement which specifies that the transaction be held in a safekeeping account subject to the control and custody of the City. Investments in security repurchase agreements may be made only with the City's depository bank, with state or national banks domiciled in the state of Texas, or with securities dealers reporting to the Federal Reserve Bank of New York ("Primary Dealers"). All securities are purchased delivery-vs.-payment and held in the City's name in a safekeeping account at The Bank of New York. City of College Station, Texas 38 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 Investments of all funds consist mainly of Agency securities, a money market mutual fund with Fidelity, and investments in Texpool’s public funds investment pool. Investments are stated at fair value in accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools. The City also uses a pooling method to account for investments. Equity in investments and interest income from the investment pool is allocated to the participating funds on a monthly basis and is determined by calculating a ratio of each fund's equity in the investment pool to the total pool. GASB Statement No. 31 provides that governmental entities may report all investments at fair value or they may elect to report certain money market investments and participating interest- earning investment contracts at amortized cost. The City has elected to report all investments at fair value. Inventories and Prepaid Costs Inventories are accounted for using the consumption method and are valued at year-end based on cost, with cost determined using an average cost method. Payments made to vendors for services that will benefit periods beyond September 30, 2008, are recorded as prepaid costs with a reserve for prepaid items recognized in the governmental funds in the fund level financial statements to signify that a portion of fund balance is not available for other subsequent expenditures. Interfund Transactions and Receivables/Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as "internal balances." Restricted Assets In the Enterprise Funds, proceeds of utility revenue bonds, as well as resources set aside for their repayment, are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants. In addition, customer utility deposits are classified as restricted assets because the deposit remains the property of the customer and is not available for operations. In the General Fund, restricted assets are comprised of Municipal Court cash bonds, Municipal Court technology funds, Municipal Court efficiency time payment fee funds, Municipal Court security funds, Municipal Court juvenile case manager funds, and police seizure funds, all of which are not available for operations. Investment in Joint Venture The Proprietary Funds' investment in joint venture is recorded using the equity method of accounting. Required disclosures concerning the joint venture are presented in Note V-C. City of College Station, Texas 39 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business- type activities columns in the government-wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of three years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. Assets owned by the electric utility are capitalized in accordance with Federal Energy Regulatory Commission (FERC) guidelines. Furthermore, assets owned by either the water or wastewater utilities are capitalized in accordance with the National Association of Regulatory Utility Commissioners (NARUC) guidelines. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend the asset's useful life are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. In accordance with Financial Accounting Standards Board Statement No. 71, interest is not capitalized during construction of capital assets of business-type activities because interest is recovered currently in the City's established rate. Depreciation of all assets is recorded and calculated using the straight-line method over the following estimated useful lives: Electric System 1-50 Years Water System 2-50 Years Wastewater System 2-50 Years Infrastructure 10-50 Years Buildings and Building Improvements 5-50 Years Land Improvements 10-45 Years Machinery and Equipment 5-20 Years Motor Vehicles 3-12 Years Furniture, Fixtures and Office Equipment 5-20 Years Compensated Absences Employees are credited with vacation at rates of 10 to 20 days per year, depending upon length of service. Carryover of unused vacation time from one year to the next is allowed for a maximum of two years. Upon termination, the respective employees are paid for any accrued vacation not taken (up to the two-year maximum). Accumulated vacation is accrued when earned in the government-wide and proprietary fund financial statements. No liability has been recorded in the governmental fund financial statements. Employees are credited with sick leave at the rate of one day per month. There is no maximum to the number of sick days that each employee can accumulate. Because the City does not pay employees for unused accumulated sick leave, no related liability has been recorded in the financial statements. Long-Term Obligations In the government-wide financial statements and in the fund financial statements for the proprietary fund types, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund statement City of College Station, Texas 40 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount and deferred amounts on refundings. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Fund Equity In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for specific purpose. Designations of fund balance represent tentative management plans that are subject to change. E. Budgetary Control The City follows these procedures in establishing the budgetary data: 1. Prior to September 1, the City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following October 1. The operating budget includes proposed expenditures and the means for financing them. 2. All budget requests are compiled by the Office of Budget and Strategic Planning and then presented with comparative and supporting data to the Mayor and City Council for review. 3. Public hearings are properly advertised and conducted at City Hall for taxpayer comments. 4. Prior to September 27, the budget is legally enacted through passage of an ordinance. 5. The City Council must approve all transfers of budgeted amounts between departments within any fund and any revision that alters the total expenditures of any fund. An amount is also budgeted each year for contingencies which may arise. The Council has authorized the City Manager to make budget transfers for contingencies if the amount does not exceed $15,000. All other transfers must be approved by City Council. City Council may transfer amounts among individual budget line items within major expenditure categories during the year, but no such transfer may increase the overall total budget. Budgeted amounts as originally adopted were not significantly changed by such transfers during the year. 6. In accordance with the City Charter, the budget may be amended after the following conditions are met: (a) The City Manager certifies that there are available revenues in excess of those estimated in the budget. (b) The City Council holds a public hearing on the supplemental appropriation. (c) The City Council approves the supplemental appropriation. Management may not amend the budget without seeking the approval of the City Council. City of College Station, Texas 41 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 II. Reconciliation of Government-Wide and Fund Financial Statements A. Explanation of Certain Differences Between the Governmental Fund Balance Sheet and the Government-Wide Statement of Net Assets The governmental fund balance sheet includes reconciliation between fund balance--total governmental funds and net assets--governmental activities as reported in the government- wide statement of net assets. The details of this $108,665,576 difference are as follows: When capital assets (land, buildings, equipment, etc.) that are to be used in governmental activities are purchased or constructed, the costs of those assets are reported as expenditures in governmental funds. However, the statement of net assets includes those capital assets among the assets of the City as a whole. Cost of Capital Assets 301,672,468$ Accumulated Depreciation (110,882,534) Net Capital Assets 190,789,934$ Long-term liabilities applicable to the City's governmental activities are not due and payable in the current period and, accordingly, are not reported as fund liabilities in the governmental funds. All liabilities, both current and long-term, are reported in the statement of net assets. Bonds Payable (100,660,000)$ Accrued Interest Payable (562,640) Compensated Absences (2,311,648) (103,534,288)$ Governmental funds report the issuance of debt as an other financing source in the governmental fund statement of revenues, expenditures, and changes in fund balances. In contrast, issuance costs should be capitalized and amortized over the life of the debt. Deferred issuance costs 311,453$ Amoritization of issuance costs (26,627) 284,826$ When a governmental entity issues debt at a discount or a premium, the discount/premium is ignored in recording interest expenditures in a governmental fund; however, the discount/premium must be amortized annually to report interest on an accrual basis in the government-wide financial statements. Premium on Bonds (342,511)$ Amortization of premium 68,502 (274,009)$ A refunding transaction essentially combines the issuance of new debt and the repayment of existing debt. The key difference is that the disparity between the net carrying value of the refunded debt and its reacquisition price is treated as a deferred charge (this amount is treated City of College Station, Texas 42 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 as a deduction from or an addition to the new debt liability) in the government-wide statement of net assets and subsequently amortized over the life of the refunding or refunded debt, whichever is shorter. Deferred charge - Refunding 454,088$ Accrued Interest Payable (90,818) 363,270$ Total Deferred/Capitalized Items 374,087$ Because the focus of governmental funds is on short-term financing, some assets will not be available to pay for current period expenditures. Those assets (for example, receivables) are offset by deferred revenues in the governmental funds and, thus, are not included in fund balance. Deferred revenue for emergency medical services, cemetery sales, and property taxes shown on the governmental fund statements is not deferred on the statement of net assets. Deferred Property Tax Revenue 515,657$ Deferred Hotel Tax Revenue 212,235 Deferred Emergency Medical Services Revenue 439,261 Deferred Fines/Penalties 584,843 Deferred Cemetery Sales Revenue 202,074 Deferred Intergovernmental Revenue 69,050 Other Deferred Revenue 25,278 2,048,398$ Internal service funds are used by management to charge certain activities, such as self insurance, print-mail services, and fleet maintenance, to individual funds. The assets and liabilities of certain internal service funds are included in governmental activities in the statement of net assets. 18,987,445$ B. Explanation of Certain Differences Between the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances and the Government-Wide Statement of Activities The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation between net changes in fund balances--total governmental funds and changes in net assets of governmental activities as reported in the government-wide statement of activities. One element of that reconciliation explains that "Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense." The details of this $13,498,040 difference are as follows: City of College Station, Texas 43 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 Capital Outlay 21,828,688$ Depreciation Expense (8,330,648) Net Adjustment to increase net changes in fund balances- total governmental funds to arrive at changes in net assets of governmental activities 13,498,040$ Another element of that reconciliation states that "The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, and donations) is to increase net assets." The details of the $3,044,520 difference are as follows: Donated Capital Assets 3,055,501$ Proceeds from Sale of Fixed Assets (10,981) The net effect of miscellaneous capital asset transactions increase net assets in the statement of activities, but do not appear in the governmental funds because they are not financial resources.3,044,520$ Another element of that reconciliation states that "The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities." The details of this ($11,440,000) difference are as follows: Debt issued or incurred: Issuance of General Obligation Bonds and Certificates of Obligation (19,970,000)$ Principal Retirement 8,530,000 Net Adjustment to decrease net changes in fund balances- total governmental funds to arrive at changes in net assets of governmental activities (11,440,000)$ Another element of that reconciliation states that "Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds." The details of this ($187,476) difference are as follows: City of College Station, Texas Compensated Absences (216,485)$ Accrued Interest & amortization (31,689) Issuance Costs Deferred 60,698 Net Adjustment to increase net changes in fund balances- total governmental funds to arrive at changes in net assets of governmental activities (187,476)$ 44 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 III. Stewardship, Compliance, and Accountability A. Budgetary Information The Council approved three budget amendments during fiscal year 2008. These budget amendments included the following appropriations: WD Fitch Widening Phase II 4,021,500$ Purchased Power 3,044,000 Economic Development Land Purchase 2,132,208 Memorial Cemetery 1,980,000 Eagle Drive Extension 800,000 Discovery Drive Extension 544,021 Wellborn Road Landscaping 478,913 Parks/Parkland Capital Projects 436,219 Bike Loop 400,000 Electric Training Room Facility Project 250,000 Fire Department Grants 245,400 University Drive TXDOT ROW 237,200 Gainsharing 205,711 CSTV-19 Improvements 194,582 Print Mail 117,510 Police Department - Grants 91,328 Police Department - Generators 76,000 Eisenhower Street Land Purchase 73,000 Legal Fees 70,000 Roadway Impact Fee Study 57,000 Red Light Camera 35,000 Fleet Purchases 27,297 Police Patrol Car 27,175 Economic Development Personnel 24,609 Water Services Personnel 20,923 Information Technology - E-911 17,000 Court Recording System 5,385 15,611,981$ 1. Budget appropriations are adopted at the fund level for all funds except the General Fund. In the General Fund, budget appropriations are adopted at the department level. Expenditures in excess of appropriations for each fund are prohibited by the City Charter. Appropriations that have not been expended or lawfully encumbered lapse at the end of the budget year. 2. Formal budgetary integration is legally enacted and employed as a management control device during the year for all funds. 3. Encumbrance accounting is employed in governmental funds. Encumbrances (e.g., purchase orders, contracts) outstanding at year end are reported as reservations of fund balances and do not constitute expenditures or liabilities. City of College Station, Texas 45 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 B. Excess of Expenditures Over Appropriations The amounts of any excesses of expenditures over appropriations during fiscal year 2008, and the funds in which they occurred are as follows: Fund Amount General Fund, Fire Department 367,209$ General Fund, Other 637 Convention Center 326 Business Park 81 General Government Projects 99,777 Parks and Recreation Projects 910,812 Hurricane Ike made landfall at Galveston, Texas on September 13, 2008, causing catastrophic damage to coastal Texas. The Fire Department responded through the Texas Task Force sending mutual aid to affected communities. The timing of the disaster precluded inclusion on the final budget amendment of the fiscal year. The expenditures in the Business Park, General Government Projects and Parks and Recreation Projects were budgeted in prior years. Overall, these projects remained within budget. IV. Detailed Notes on All Funds A. Cash and Investments Cash and investments are accounted for within the pooled cash fund of the City. The City records investments at fair value in accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools. Cash and cash equivalents, investment balances and interest income are allocated to the City’s participating funds on a monthly basis. The amount of the allocation is based on each fund's proportional equity to total pooled equity. Weighted Average Fair Value Maturity (days) Bank Demand Accounts 4,871,146$ 1 U.S. Agency Bonds 41,753,405 479 Texas Local Government Investment Pool 80,755,438 1 Fidelity Money Market Mutual Fund 1,830,042 1 129,210,031$ Portfolio Weighted Average Maturity 305 Interest rate risk. In accordance with the City's Investment Policy, interest rate risk is managed by limiting the weighted average maturity of the investment portfolio to two years (approximately City of College Station, Texas 46 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 720 days) or less and by limiting the maximum maturity of any security purchased to five years or less. Credit risk. Investments authorized by the City’s policy are those approved by the revised State of Texas Public Funds Investment Act of 1997 and the Texas Public Collateral Act of 1989. These investments include the following: ƒ Obligations of the United States or its agencies and instrumentalities; ƒ Direct obligations of the State of Texas or its agencies; ƒ Other obligations, the principal and interest on which is unconditionally guaranteed or insured by the State of Texas or the United States or its agencies; ƒ Obligations of states, agencies, counties, cities, and other political subdivisions of any state having been rated as to investment quality by a nationally recognized investment rating firm and having received a rating of not less than “A” or its equivalent; ƒ Certificates of deposit issued by state and national banks domiciled in Texas that are secured by obligations qualified as acceptable collateral; ƒ Certificates of deposit issued by savings and loan associations domiciled in Texas that are secured obligations qualified as acceptable collateral; ƒ Repurchase agreements or reverse repurchase agreements; ƒ Commercial paper with a stated maturity of 270 days or less from the date of issuance that is rated not less than “A-1,” “P-1,” or its equivalent; ƒ Money market mutual funds that are SEC registered no-load funds with dollar- weighted average portfolio maturity of 120 days or less; ƒ Guaranteed investment contracts; or ƒ Public funds investment pools. As of September 30, 2008 the City’s investments were rated by Standard & Poor's and Moody's as follows: S&P Moody's Texpool AAAm N/A* Fidelity Money Market Mutual Fund AAAm Aaa Federal Home Loan Bank AAA Aaa Federal National Mortgage Association AAA Aaa Federal Farm Credit Bank AAA Aaa *Texpool is only rated by S&P. Credit concentration. With the exception of U.S. Treasury securities and authorized pools, the City's Investment Policy limits the investment in a single security type or with a single financial institution to 30%. It also limits the overall investment in Federal Agency securities to 70%. At September 30, 2008 the issuers whose securities represented more than 5% of the City's investment portfolio were as follows: the Federal Home Loan Bank (19%) and the Federal Farm Credit Bank (12%). Custodian credit risk - deposits. In the case of deposits, this is the risk that in the event of a bank failure, the government's deposits may not be returned to it. The City of College Station's City Council has approved a depository services contract which governs its depository relationship. This contract requires that deposits not covered by depository insurance be collateralized at 105%. City of College Station, Texas 47 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 Custodian credit risk - investments. For an investment, this is the risk that, in the event of the failure of the counterparty, the government will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The City's investment portfolio requires that all security transactions be conducted on a Delivery-vs.- Payment basis and that all securities be held by a third party custodian and evidenced by safekeeping receipts. B. Receivables Receivables as of year end for the City's individual major funds and nonmajor and internal service funds in the aggregate, including the applicable allowances for uncollectible accounts, are as follows: Internal Governmental Activities:Debt Streets Service Fund General Service Projects Nonmajor Allocation Total Taxes: Property 235,453$ 280,204$ -$ -$ -$ 515,657$ Beverage 104,508 - - - - 104,508 Sales 1,769,896 - - - - 1,769,896 Subtotal Taxes 2,109,857 280,204 - - - 2,390,061 Accrued Interest 57,390 15,920 105,864 138,136 55,538 372,848 Grants 131,073 - - 428,270 - 559,343 Accounts/Charges for Services 1,556,347 - 380,187 641,288 29,676 2,607,498 Miscellaneous 20,547 - - - 1,494 22,041 Total Gross Governmental 3,875,214 296,124 486,051 1,207,694 86,708 5,951,791 Less Allowance for Uncollectible Accounts (895,492) - (373,234) (86,222) - (1,354,948) Net Total Receivables 2,979,722$ 296,124$ 112,817$ 1,121,472$ 86,708$ 4,596,843$ Business-type Activities:Internal Service Fund Electric Water Sewer Nonmajor Allocation Total Accrued Interest 64,914$ 32,257$ 32,860$ 6,206$ 691$ 136,928$ Accounts/Charges for Services 10,997,471 1,642,946 2,277,836 1,013,093 38,372 15,969,718 Miscellaneous 1,111,693 2,000 - 17,792 15,003 1,146,488 Total Gross Business-type 12,174,078 1,677,203 2,310,696 1,037,091 54,066 17,253,134 Less Allowance for Uncollectible Accounts (2,066,777) (93,795) (181,188) (115,531) (24,811) (2,482,102) Net Total Receivables 10,107,301$ 1,583,408$ 2,129,508$ 921,560$ 29,255$ 14,771,032$ Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received but not yet earned. As of fiscal year end, the various components of deferred revenue and unearned revenue reported in the governmental funds were as follows: Unavailable Unearned Total Property Tax 515,657$ -$ 515,657$ Intergovernmental 273,232 - 273,232 Fines and Penalties - 584,843 584,843 Emergency Services 439,261 - 439,261 Cemetery Plot Sales - 185,160 185,160 Other 25,245 25,000 50,245 1,253,395$ 795,003$ 2,048,398$ City of College Station, Texas 48 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 C. Capital Assets Capital asset activity for the year ended September 30, 2008 was as follows: Beginning Ending Governmental Activities Balance Increases Decreases Balance Capital Assets, Not Being Depreciated Land 28,010,449$ 1,947,167$ -$ 29,957,616$ Construction in Progress 27,616,670 19,536,925 (18,408,365) 28,745,230 Total Capital Assets, Not Being Depreciated 55,627,119 21,484,092 (18,408,365) 58,702,846 Capital Assets, Being Depreciated Buildings and Building Improvements 22,436,773 3,131,710 - 25,568,483 Improvements Other Than Buildings 22,670,145 1,452,423 - 24,122,568 Machinery and Equipment 34,275,667 3,450,602 (4,112,566) 33,613,703 Infrastructure 171,360,045 15,940,926 - 187,300,971 Total Capital Assets, Being Depreciated 250,742,630 23,975,661 (4,112,566) 270,605,725 Less Accumulated Depreciation for: Buildings and Building Improvements 6,551,340 647,885 - 7,199,225 Improvements Other Than Buildings 8,689,308 983,056 - 9,672,364 Machinery and Equipment 20,652,978 3,154,497 (1,793,020) 22,014,455 Infrastructure 84,834,556 5,755,780 - 90,590,336 Total Accumulated Depreciation 120,728,182 10,541,218 (1,793,020) 129,476,380 Total Capital Assets Being Depreciated, Net 130,014,448 13,434,443 (2,319,546) 141,129,345 Governmental Type Activities Capital Assets, Net 185,641,567$ 34,918,535$ (20,727,911)$ 199,832,191$ Beginning Ending Business-Type Activities Balance Increases Decreases Balance Capital Assets, Not Being Depreciated Land 690,707$ -$ -$ 690,707$ Construction in Progress 58,657,661 28,666,896 (19,487,135) 67,837,422 Total Capital Assets, Not Being Depreciated 59,348,368 28,666,896 (19,487,135) 68,528,129 Capital Assets, Being Depreciated Electric System 113,757,058 14,719,902 (1,476,893) 127,000,067 Water System 79,216,419 6,136,950 (36,015) 85,317,354 Wastewater System 79,065,420 3,156,870 (11,913) 82,210,377 Buildings and Building Improvements 5,743,755 - - 5,743,755 Machinery and Equipment 1,332,577 79,224 (823,568) 588,233 Total Capital Assets, Being Depreciated 279,115,229 24,092,946 (2,348,389) 300,859,786 Less Accumulated Depreciation for: Electric System 50,834,312 5,176,026 (1,591,226) 54,419,112 Water System 25,849,761 2,280,354 (85,959) 28,044,156 Wastewater System 23,680,135 2,496,508 (34,505) 26,142,138 Buildings and Building Improvements 851,778 143,659 - 995,437 Machinery and Equipment 1,273,101 22,836 (822,935) 473,002 Total Accumulated Depreciation 102,489,087 10,119,383 (2,534,625) 110,073,845 Total Capital Assets Being Depreciated, Net 176,626,142 13,973,563 186,236 190,785,941 Business Type Activities Capital Assets, Net 235,974,510$ 42,640,459$ (19,300,899)$ 259,314,070$ City of College Station, Texas 49 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 Depreciation expense was charged to governmental activities of the City as follows: Governmental Activities Planning and Development Services 6,204$ Fire 78,143 Fiscal Services 25,764 General Government 575,052 Information Services 164,424 Parks and Recreation 923,507 Police 57,278 Public Works 5,832,386 Non-departmental 667,890 Capital Assets Held by the City's Internal Service Funds 2,210,570 Total Depreciation Expense 10,541,218$ D. Interfund Transactions Transfers between funds during the year were as follows: Governmental Business-type Transfers In Transfers Out Activities, net Activities, net Governmental Purpose: General Fund 11,591,668$ (942,224)$ 10,649,444$ -$ Debt Service Fund 1,422,163 - 1,422,163 - Streets Projects 143,563 - 143,563 - Nonmajor Governmental Funds: Special Revenue Funds: Community Development - (528,166) (528,166) - Red Light Camera - (28,233) (28,233) - Wolf Pen Creek TIF - (1,042,475) (1,042,475) - Capital Projects Funds: Business Park Projects - (500,000) (500,000) - General Government 91,417 - 91,417 - Parks and Recreation Projects 579,603 - 579,603 - Business-type Activities: Enterprise Funds: Electric 470,156 (7,641,082) - (7,170,926) Water - (1,363,042) - (1,363,042) Wastewater - (1,347,193) - (1,347,193) Nonmajor Proprietary Funds: Sanitation - (515,500) - (515,500) Internal Service Funds: Equipment Replacement - (3,345,029) (3,345,029) - Print/Mail Services 116,878 - 116,878 - Utility Customer Service - (37,293) - (37,293) 14,415,448$ (17,290,237)$ 7,559,165$ (10,433,954)$ Adjust for transfer to Joint Venture from Equipment Replacement 2,874,789 2,874,789 14,415,448$ (14,415,448)$ 10,433,954$ (10,433,954)$ City of College Station, Texas 50 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 During the fiscal year ending September 30, 2008, the City made a transfer to the Brazos Valley Solid Waste Management Agency (BVSWMA), a joint venture with the City of Bryan. The transfer represented BVSWMA’s ownership in the City’s Equipment Replacement program, which BVSWMA has participated in since 2002 and the liquidation of the year’s participation in the fund. Transfers are used to (1) move revenues from the funds with collection authorization to the debt service fund as debt service principal and interest payments become due, (2) move revenues from enterprise funds to the general fund to record the return on the investment, (3) move revenues from enterprise funds to the general fund for economic development activity, (4) move unrestricted general fund revenues to finance various programs that the government must account for in other funds in accordance with budgetary authorizations. The composition of due to/due from balances as of September 30, 2008 is as follows: Due To Due From Amount Water Fund Economic Development 40,000$ Wastewater Economic Development 40,000$ Electric Fund Economic Development 40,000$ Electric Fund Hotel Tax Fund 200,000$ Advance From Advance To Amount Water Fund Economic Development 160,000$ Wastewater Economic Development 160,000$ Electric Fund Economic Development 160,000$ The outstanding balance between the general fund and the print/mail fund represents a working capital loan that the general fund expects to collect in the subsequent year. The outstanding balance between the electric fund and the hotel tax fund represents an amount related to an economic development project. The loan is expected to be liquidated in fiscal year 2009. Internal loans (interfund advances) of $200,000 each from the Water, Wastewater and Electric Funds to the Economic Development Fund were recorded during the fiscal year ended September 30, 2008. The loans partially funded the purchase of real property related to an economic development project and are repayable in even installments over five years. E. Deferred Charges See Note IV B. F. Prior Period Adjustment The City’s 2004 Certificates of Obligation funded business-type activities in the Electric and Wastewater Funds. A prior period adjustment was made to reflect $4,459,740 in Electric Fund and $3,780,260 in Wastewater Fund Certificates of Obligation in those funds and to reduce beginning net assets by those amounts. Long-term debt reflects this change as of the beginning of the fiscal year. City of College Station, Texas 51 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 G. Long-Term Debt A summary of long-term debt transactions, including current portion, for the year ended September 30, 2008 is as follows: Amounts Beginning Incurred/ Matured/ Ending Due Within Balance Issued Retired Balance One Year Governmental Activities: General Obligation Bonds 55,720,000$ 9,455,000$ 4,480,000$ 60,695,000$ 4,885,000$ Certificates of Obligation 33,500,000 10,515,000 4,050,000 39,965,000 3,340,000 Accrued Vacation 2,269,709 1,333,042 1,240,176 2,362,575 190,000 Governmental Activity Long Term Debt 91,489,709$ 21,303,042$ 9,770,176$ 103,022,575$ 8,415,000$ Business Type Activities: Certificates of Obligation 8,240,000$ 15,925,000$ 345,000$ 23,820,000$ 900,000$ Utility Revenue Bonds 105,215,000 5,655,000 99,560,000 5,835,000 Accrued Vacation: Electric Fund 172,714 176,355 159,782 189,287 9,463 Water Fund 87,048 72,046 76,830 82,264 4,113 Sewer Fund 81,066 83,934 81,315 83,685 4,184 Other 109,381 129,890 119,626 119,645 5,982 Business Type Activity Long Term Debt 113,905,209$ 16,387,225$ 6,437,553$ 123,854,881$ 6,758,743$ Internal service funds predominantly serve the governmental funds. All internal service funds, except for the utility customer service fund, are included as part of the above totals for governmental activities. At year end $50,927 of internal service funds’ accrued vacation was included in governmental activities, and $59,419 of accrued vacation for the utility customer service fund was included in business type activities. For the governmental activities, accrued vacation is generally liquidated by the general fund. City of College Station, Texas 52 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 Long-term debt at September 30, 2008 includes the following individual issues (not including unamortized premiums or discounts): Interest Issue Maturity Original Net Rate (%) Date Date Issue Retirement Outstanding General Obligation Bonds: 1996 Issue and Refunding 5.05-5.15 12/1/96 2/15/09 11,845,000$ 11,380,000$ 465,000$ 1998 Issue 4.65-4.85 4/1/98 2/15/11 6,200,000 5,120,000 1,080,000 1999 Issue 4.25-5.00 4/15/99 2/15/17 6,230,000 2,415,000 3,815,000 2000 Issue 5.00-5.20 4/1/00 2/15/11 8,460,000 7,195,000 1,265,000 2001 Issue 4.00-5.50 8/1/01 2/15/17 4,140,000 2,200,000 1,940,000 2002 Issue 4.25-5.125 3/1/02 2/15/21 6,445,000 1,795,000 4,650,000 2003 Issue 3.00-4.50 7/1/03 2/15/23 4,790,000 750,000 4,040,000 2004 Issue 2.875-5.00 5/1/04 2/15/24 12,940,000 3,110,000 9,830,000 2005 Issue 4.00-6.00 5/1/05 2/15/25 5,710,000 920,000 4,790,000 2006 Issue 4.375-6.375 7/1/06 2/15/26 7,375,000 1,005,000 6,370,000 2006 Issue - Refunding 4.00-5.00 12/1/06 2/15/18 10,255,000 40,000 10,215,000 2007 Issue 4.25-6.25 9/1/07 2/15/27 3,930,000 1,150,000 2,780,000 2008 Issue 4.0 - 5.0 9/1/08 215/28 9,455,000 - 9,455,000 97,775,000$ 37,080,000$ 60,695,000$ Certificates of Obligation - Governmental Activities: 2000 Issue 5.00-5.125 4/1/00 2/15/10 4,050,000$ 3,730,000$ 320,000$ 2000A Issue 4.75-5.50 8/1/00 2/15/20 8,100,000 3,280,000 4,820,000 2001 Issue 4.00-5.00 8/1/01 2/15/20 3,650,000 2,450,000 1,200,000 2002 Issue 4.25-5.125 3/1/02 2/15/20 14,480,000 6,120,000 8,360,000 2003A Issue 2.90-4.20 7/1/03 2/15/23 780,000 120,000 660,000 2004 Issue 2.875-5.00 5/1/04 2/15/24 500,000 500,000 - 2005 Issue 3.00-4.50 5/1/05 2/15/25 7,595,000 3,425,000 4,170,000 2006 Issue 4.375-6.375 7/1/06 2/15/26 8,325,000 1,215,000 7,110,000 2007 Issue 4.25-6.25 9/1/07 2/15/27 3,960,000 1,150,000 2,810,000 2008 Issue 3.25 - 5.0 9/1/08 2/15/28 10,515,000 - 10,515,000 61,955,000$ 21,990,000$ 39,965,000$ Certificates of Obligation - Business-type Activities: 2004 Issue 2.875-5.00 5/1/04 2/15/24 8,915,000 1,020,000 7,895,000$ 2008 Issue 3.25 - 5.0 9/1/08 2/15/28 15,925,000 - 15,925,000 24,840,000$ 1,020,000$ 23,820,000$ Utility Revenue Bonds: 1998 Issue 4.65-4.80 4/1/98 2/1/10 2,700,000 2,400,000 300,000$ 2000 Issue 5.00-5.25 4/1/00 2/15/12 10,500,000 8,105,000 2,395,000 2001 Issue 4.50-5.50 8/1/01 2/15/21 23,500,000 5,470,000 18,030,000 2002 Issue 4.00-6.00 3/1/02 2/15/22 18,215,000 3,625,000 14,590,000 2003 Issue - Refunding 3.50-4.25 12/1/02 2/1/14 11,160,000 4,070,000 7,090,000 2003A Issue 2.50-4.25 7/1/03 2/15/23 4,850,000 1,710,000 3,140,000 2005 Issue 4.00-5.50 5/1/05 2/1/25 8,035,000 640,000 7,395,000 2005A Issue - Refunding 3.00-5.25 8/1/05 2/1/18 12,995,000 440,000 12,555,000 2006 Issue 4.375-6.375 7/1/06 2/1/26 16,950,000 975,000 15,975,000 2007 Issue 4.00-5.75 9/1/07 2/1/27 18,665,000 575,000 18,090,000 127,570,000$ 28,010,000$ 99,560,000$ City of College Station, Texas 53 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 The annual requirements to amortize debt outstanding as of September 30, 2008 are as follows. Due to the nature of the obligation for accrued vacation, annual requirements to amortize such obligations are not determinable and have not been included in the following summary: Governmental Activities General Obligation Certificates of Obligation Year Ended September 30, Principal Interest Principal Interest 2009 4,885,000$ 2,605,790$ 3,340,000$ 1,740,215$ 2010 4,005,000 2,411,244 2,380,000 1,628,321 2011 4,325,000 2,211,104 1,960,000 1,529,689 2012 4,480,000 2,005,743 2,055,000 1,440,479 2013 4,405,000 1,810,095 2,175,000 1,348,273 2014-2018 19,870,000 6,261,200 12,125,000 5,119,789 2019-2023 12,100,000 2,854,244 9,820,000 2,328,597 2024-2029 6,625,000 586,366 6,110,000 597,080 60,695,000$ 20,745,786$ 39,965,000$ 15,732,443$ Business-Type Activities Utility Revenue Certificates of Obligation Year Ended September 30, Principal Interest Principal Interest 2009 5,805,000$ 1,392,764$ 900,000$ 973,470$ 2010 6,010,000 1,427,565 865,000 965,835 2011 6,220,000 1,504,420 910,000 931,236 2012 6,450,000 1,547,368 950,000 897,861 2013 6,700,000 1,764,296 995,000 861,785 2014-2018 32,305,000 8,037,032 5,715,000 3,647,151 2019-2023 25,515,000 7,227,189 7,260,000 2,254,609 2024-2029 10,555,000 3,064,907 6,225,000 676,794 99,560,000$ 25,965,541$ 23,820,000$ 11,208,741$ The City intends to retire all of its general long-term liabilities, plus interest, from ad valorem taxes. The proprietary fund type long-term debt will be repaid, plus interest, from the operating revenues of the Electric, Water, and Wastewater Funds. General Obligation Bonds and Certificates The City issues General Obligation Bonds and Certificates of Obligation to provide funds for the acquisition and construction of major capital facilities. These types of bonds have been issued by the City for both governmental activities as well as business-type activities. These bonds are reported in the proprietary funds if they are expected to be repaid from proprietary fund revenue. General Obligation Bonds are direct obligations, for which the City has pledged the full faith and credit of the City. These bonds generally are issued as 20-year serial bonds with varying amounts of principal maturing each year. The City is required by bond covenants to create from ad valorem tax revenues a sinking fund sufficient to pay the current interest and principal installments as they become due. In addition to the sinking fund, there are a number of limitations and restrictions contained in the various City of College Station, Texas 54 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 general obligation bonds and certificate indentures. The City is in compliance with the significant limitations and restrictions at September 30, 2008. On September 1, 2008, the City issued $9.455 million in General Obligation Bonds with a true interest cost of 4.3721%. The proceeds from the sale of the bonds will be used to (1) pay for costs of construction and acquisition of and improvements to City streets, sidewalks, hike and bike trails, traffic signals and control systems, parks and park facilities and (2) pay the costs incurred in connection with the issuance of the Bonds. On September 1, 2008, the City issued $26.440 million in Certificates of Obligation with a true interest cost of 4.3446%. The proceeds from the sale of the Certificates will be used to (1) pay for the costs of construction acquisition and improvements to City streets, park and recreation improvements, a new City-owned cemetery, public municipal facilities and technology projects; (2) fund electric, water, and wastewater system improvements and (3) to pay costs incurred in connection with the issuance of the Certificates. Revenue Bonds Utility system revenue bonds are secured by the net revenues of the Electric, Water, and Wastewater Funds as defined in the respective bond indentures. The City pledges income derived from the acquired or constructed assets to pay the debt service. In addition, the City is required to maintain debt service funds and bond reserve funds for all outstanding revenue bonds. Amounts in the reserve fund are to be used to pay principal and interest on outstanding bonds at any time sufficient funds are not available in the bond interest and redemption fund. The bond indentures require that the City accumulate reserves to an amount equal to the average annual principal and interest requirements of all outstanding bonds secured by the net revenues of the system. Arbitrage Compliance Arbitrage provisions of the Internal Revenue Tax Act of 1986 require the City to rebate to the federal government excess arbitrage earnings from bond proceeds. As of September 30, 2008, the City did not have an arbitrage rebate liability. Defeasance In prior years, the City defeased certain revenue and refunding bonds totaling $23,810,000 and certain general obligation bonds, refunding bonds and certificates of obligation totaling $10,185,000 by placing the proceeds of the refunding bonds in an irrevocable trust to provide for all future debt service on the refunded bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City's financial statements. The advanced refunding of Series 2006 was undertaken to reduce total general obligation and certificate of obligation debt service payments over 12 years by $651,000 and resulted in economic gain of $506,168. The advanced refunding of Utility System Revenue Series 2005A and 2003 were undertaken to reduce total utility revenue debt service payments over the next 10 and 6 years, respectively by $1,037,232 and $885,000, respectively and resulting in economic gains of $813,969 and $720,738 respectively. At September 30, 2008, the outstanding principal balance of the defeased revenue refunding bonds was $4,770,000 and the outstanding principal balance of the defeased general obligation bonds and certificates of obligation was $5,620,000. City of College Station, Texas 55 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 The tables below reflect refunded debt outstanding at September 30, 2008 and are net of any amounts to be paid or retired by the trustee on October 1, 2008: Refunded in Year Ended September 30, 2008 General Obligation Improvement Bonds, Series 1998 2,705,000$ Utility System Revenue Bonds, Series 1998 1,330,000 4,035,000$ Refunded in Prior Years Utility System Revenue & Refunding Bonds, Series 1993 2,500,000$ Utility System Revenue Bonds, Series 1994 8,250,000 Utility System Revenue Bonds, Series 1995 2,700,000 Utility System Revenue Bonds, Series 1996 4,260,000 General Obligation & Refunding Bonds, Series 1996 1,860,000 19,570,000$ H. Reservations of Fund Balances and Net Assets Fund balances for governmental funds have been reserved at September 30, 2008 as follows: General Fund: Reserved for Encumbrances 959,684$ Reserved for Inventory 163,063 Reserved for Prepaid 343,525 Reserved for Police Seizure 36,256 Reserved for Court Technology 265,212 Reserved for Court Security 291,628 Reserved for Court Efficiency Improvements 36,165 Reserved for Juvenile Case Manager 209,943 Streets Projects: Reserved for Encumbrances 3,698,400 Reserved for Capital Projects 20,689,995 Debt Service: Reserved for Bond Debt Service 3,817,694 Other Governmental Funds: Reserved for Encumbrances 7,907,916 Reserved for Capital Projects 10,949,366 Reserved for Endowment 1,756,167 Total 51,125,014$ City of College Station, Texas 56 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 V. Other Information A. Property Taxes Property tax is levied each October 1 on the assessed (appraised) value listed as of the prior January 1 for all real and business personal property located in the City. Taxable assessed value represents the appraisal value less applicable exemptions authorized by the City Council. Taxes are due October 1 and are delinquent after the following January 31. Tax liens are automatic and become enforceable as of January 1 of each year. Taxes become delinquent February 1 and are subject to interest and penalty charges. The tax rate to finance general governmental services including debt service was 43.94 cents per $100 of assessed valuation for the year ended September 30, 2008. Under current state statutes, the City's ability to increase the levy for property taxation is subject to a maximum rate of $2.50 per $100 valuation. The Brazos County Appraisal District ("Appraisal District") is responsible for the recording and appraisal of property for all taxing units in Brazos County. The Appraisal District is required to assess property at 100 percent of its appraised value. Real property must be reappraised at least every three years. The City may, at its own expense, require annual reviews by the Appraisal District through various appeals and, if necessary, legal action. Under this system, if the rate, excluding tax rates for bonds and other contractual obligations adjusted for new improvements, exceeds the rate for the previous year by more than eight (8) percent, qualified voters of the City may petition for an election to determine whether to limit the tax rate to no more than eight (8) percent above the tax rate of the previous year. Brazos County bills and collects the property taxes for the City. B. Risk Management A government entity, such as the City of College Station, is faced with many risks. These risks can be generally subdivided into four categories of loss: direct property loss, indirect property loss, liability loss, and personnel losses. The City employs a combination of risk management strategies to provide acceptable levels of protection regarding these potential risks. The City is self-insured for health benefits, and the plan is administered by Blue Cross Blue Shield. This activity is accounted for in the Employee Benefits Fund, which is funded monthly by contributions from employees and from the operating funds of the City. These contributions are determined based on an analysis of prior year claims and administrative costs and a forecast of future claims and administrative costs. The City has a stop-loss insurance policy that limits its liability to $100,000 per individual per year with an aggregate, annual liability of $1,000,000. The liability for outstanding losses includes $565,189 for claims incurred but not reported as of September 30, 2008. In fiscal year 2008 the City was insured by Affiliated FM for all of its real and personal property and mobile equipment. Affiliated FM is funded by calculated contributions from the City's operating funds and provides all of the claims handling for these lines of coverage. The City carries a deductible between $50,000 and $250,000 per occurrence on its property insurance policy with Affiliated FM. Property insurance covers all direct losses and some indirect losses. On all lines of liability coverage, the City is self-insured. The City has procured excess liability coverage through Star National Insurance Company that is A.M. Best rated A-VIII. The self- insured retention ("SIR") is $250,000 per claim. The claims are handled by Risk Management staff. City of College Station, Texas 57 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 The City is also self-insured on its workers' compensation coverage. The City opted for excess workers' compensation coverage with a SIR of $250,000 per claim feature. The City's carrier is Star National Insurance Company, and the TPA handles all of the workers' compensation claims. In the event of a simultaneous liability and workers' compensation claim, only one SIR applies. Liabilities in the property and casualty fund and the workers’ compensation fund are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported. Based upon the most recent actuarial study, the City has recorded the potential liability of $373,830 in the property and casualty fund and the potential liability of $466,936 in the workers’ compensation fund. The results of the process to estimate the claims liability is not an exact amount as it depends on many complex factors, such as inflation, changes in legal doctrines, and damage awards. Accordingly, claims are reevaluated periodically to consider the effects of inflation, recent claim settlement trends (including frequency and amount of pay-outs), and other economic and social factors. Lastly, the City also uses its Unemployment Fund to account for self-insurance activity involving claims filed under unemployment compensation laws. Monthly contributions based on a percentage of payroll are determined each year during the budget process and are used to fund this activity. Settlements have not exceeded self-insured retention for each of the past three fiscal years. The liabilities for insurance claims reported in each of the funds are based on Governmental Accounting Standards Board Statement No. 10, which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and if the amount of the loss can be reasonably estimated. These liabilities include an estimate for incurred but not reported claims. Changes in the balances of claims liabilities for the self- insurance funds that are accounted for as Internal Service Funds for fiscal years 2008 and 2007 are as follows: 2008 2007 Unpaid Claims, October 1 1,186,027$ 1,165,874$ Incurred Claims (including IBNR's) 4,532,452 4,569,605 Claims Paid (4,312,524) (4,549,452) Unpaid Claims, September 30 1,405,955$ 1,186,027$ C. Joint Venture The Brazos Valley Solid Waste Management Agency (“BVSWMA”) was formed under a joint solid waste management agreement between the Cities of College Station and Bryan. College Station and Bryan agreed to cooperatively operate a joint facility for the proper disposal of solid waste for the two cities and outside customers. Each city reports a 50% ownership in BVSWMA. BVSWMA has contracted with the City of College Station to serve as landfill operator for the facility. BVSWMA is governed by a Policy Advisory Board ("Board") which is charged with providing recommendations to the City Councils of College Station and Bryan regarding the joint venture. The Board is comprised of three voting members: the Mayors of College Station and Bryan, who alternate each year as Chair, and one City Council Member from the City that is not City of College Station, Texas 58 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 serving as Chair. The City Managers of each City and a representative of Grimes County designated by the Commissioners Court serve as non-voting or ex-officio members of the Board. Legal oversight of BVSWMA is vested in the City Councils of the two cities. The annual budget is prepared and approved by the BVSWMA Board and adopted by both City Councils. All contracts and expenditures in excess of $50,000 and contractual change orders in excess of $25,000 require the approval of both the Bryan and College Station City Councils. The City's share of BVSWMA's change in net assets for fiscal year 2008 was $2,848,177. State and federal laws and regulations require BVSWMA to place a final cover on its Rock Prairie landfill site when it stops accepting waste and to perform certain maintenance and monitoring functions at the site for thirty years after closure. Although closure and postclosure care costs will be paid only near or after the date that the landfill stops accepting waste, BVSWMA reports a portion of these closure and postclosure care costs as an operating expense in each period based on landfill capacity used as of each balance sheet date. The $3.9 million reported as accrued postclosure maintenance costs at September 30, 2008, represents the cumulative amount reported to date based on the use of 83 percent of the estimated capacity of the landfill. BVSWMA will recognize the remaining estimated cost of closure and postclosure care of $814,000 as the remaining estimated capacity is filled. These amounts are based on what it would cost to perform all closure and postclosure care in 2008. BVSWMA expects to close the landfill in the year 2010. Actual cost may be higher due to inflation, changes in technology, or changes in regulations. City of College Station, Texas 59 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 The following is a summary of information from the audited financial statements of BVSWMA as of September 30, 2008: 2008 2007 Assets: Current Assets 13,499,536$ 11,950,259$ Capital Assets (Net of $4,664,182 Accumulated Depreciation at 2008 and $4,287,156 at 2007)11,221,723 7,266,984 Deferred Landfill Permits (Net of $828,017 Accumulated Amortization at 2008 and $741,762 at 2007)2,803,321 2,458,540 27,524,580 21,675,783 Liabilities: Current Liabilities 628,228 694,021 Noncurrent Liabilities: Accrued Post Closure Maintenance Costs 3,903,979 3,685,746 Total Liabilities 4,532,207 4,379,767 Net Assets Invested In Capital Assets 11,221,723 7,266,984 Unrestricted 11,770,650 10,029,032 Total Net Assets 22,992,373$ 17,296,016$ Program Revenues 6,719,647$ 6,218,413$ Expenses 4,682,205 4,785,547 Transfers from the City of College Station 2,874,789 - 4,912,231 1,432,866 General Revenues 784,126 618,013 Change in Net Assets 5,696,357$ 2,050,879$ A copy of BVSWMA's separate audited financial statements may be obtained from the City's Fiscal Services Department. D. Retirement Plan Plan Description The City provides pension benefits for all of its full-time employees through a nontraditional, joint contributory, hybrid defined benefit plan in the state-wide Texas Municipal Retirement System ("TMRS"), one of 827 administered by TMRS, an agent multiple-employer public employee retirement system. Benefits Benefits depend upon the sum of the employee's contributions to the plan, with interest, and the City-financed monetary credits, with interest. At the date the plan began, the City granted monetary credits for service rendered before the plan began of a theoretical amount at least City of College Station, Texas 60 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 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 percent of the employee's accumulated contributions. In addition, the City can grant as often as annually, another type of monetary credit referred to as an 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 City matching percent had always been in existence and if the employee's salary had always been the average of his 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 City, within the options available in the state statutes governing TMRS. Plan provisions for the City were as follows: Deposit Rate:7% Matching Ratio (City to Employee): 2 to 1 Members Vested After:5 years Members can retire at age 60 and above with 5 or more years of service or with 20 years of service regardless of age. A member is vested after 5 years. The plan provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS and within the actuarial constraints also in the statutes. Contributions and Funding Policy Under the state law governing TMRS, the actuary annually determines the City contribution rate. This rate consists of the normal cost contribution rate and the prior service cost 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 City matching percent, which are the obligation of the City 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 City 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 City contribution rate. Both the employees and the City make contributions monthly. Since the City needs to know its contribution rate in advance for budgetary purposes, there is a one-year delay between the actuarial valuation that is the basis for the rate and the calendar year when the rate goes into effect. (i.e. December 31, 2007 valuation is effective for rates beginning January 2009). City of College Station, Texas 61 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 The following is a schedule of actuarial liabilities and funding progress for the last three years: Actuarial Valuation Date 12/31/2007 12/31/2006 12/31/2005 Actuarial Value of Assets 87,193,697$ 80,758,249$ 75,655,678$ Actuarial Accrued Liability 130,310,054 102,166,047 94,605,300 Percentage Funded 66.9%79.0%80.0% Unfunded (Overfunded) Actuarial Accrued Liability (UAAL)43,116,357 21,407,798 18,949,622 Annual Covered Payroll 36,703,161 34,143,239 31,987,028 UAAL as a Percentage of Covered Payroll 117.5%62.7%59.2% Net Pension Obligation (NPO) at Beginning of Period - - - Plus Annual Pension Cost: Annual Required Contribution (ARC)4,750,851 4,316,276 4,030,369 Less Contributions Made 4,750,851 4,316,276 4,030,369 NPO at the End of the Period -$ -$ -$ Actuarial assumptions for the last three years are as follows: 2007 2006 2005 Actuarial Cost Method:Projected Unit Credit Unit Credit Unit Credit Amortization Method:Level Percent of Payroll Level Percent of Payroll Level Percent of Payroll Remaining Amortization Period:30 Years--Closed Period 25 Years--Open Period 25 Years--Open Period Asset Valuation Method:Amortized Cost Amortized Cost Amortized Cost Investment Rate of Return:7%7%7% Projected Salary Increases:varies by age and service None None Includes Inflation at:3.00%3.50%3.50% Cost-of-Living Adjustments:2.1% (3.0% CPI) None None Each of the 827 Municipalities have an annual, individual actuarial valuation performed. All assumptions for the 12/31/07 valuations are contained in the 2007 TMRS Comprehensive Annual Financial Report, a copy of which may be obtained by writing to P.O. Box 149153, Austin, Texas 78714-9153. At its December 8, 2007 meeting, the TMRS Board of Trustees adopted actuarial assumptions to be used in the actuarial valuation for the year ended December 31, 2007. A summary of actuarial assumptions and definitions can be found in the December 31, 2007 TMRS Comprehensive Annual Financial Report (CAFR). Since its inception, TMRS has used the Unit Credit actuarial funding method. This method accounts for liability accrued as of the valuation date, but does not project the potential future liability of provisions adopted by a city. Two-thirds of the cities participating in TMRS have adopted the Updated Service Credit and Annuity Increases provisions on an annually repeating basis. For City of College Station, Texas 62 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 the December 31, 2007 valuation, the TMRS Board determined that the Projected Unit Credit (PUC) method should be used, which facilitates advance funding for future updated service credits and annuity increases that are adopted on an annually repeating basis. In addition, the Board also adopted a change in the amortization period from a 25-year “open” to a 25-year “closed” period. TMRS Board of Trustee rules provide that, whenever a change in actuarial assumptions or methods results in a contribution rate increase in an amount greater than 0.5%, the amortization period may be increased up to 30 years, unless a city requests that the period remain at 25 years. For cities with repeating features, these changes will likely result in higher required contributions and lower funded ratios. To assist in this transition to higher rates, the Board also approved an eight-year phase-in period, which will allow cities the opportunity to increase their contributions gradually (approximately 12.5% each year) to their full rate (or their required contribution rate). If the changes in actuarial funding method and assumptions had not been adopted for the 2007 valuation, the City’s unfunded actuarial liability would have been $24,327,300 and the funded ratio would have been 78.2%. In addition, TMRS is currently working on its legislative package for 2009. There is a possibility that the investment rate of return (IRR) assumption of 7% would need to be lowered if desired legislation for the 2009 session is unsuccessful. Maintaining a 7% IRR assumption is contingent in part on the continued diversification of the TMRS portfolio, from an almost exclusive bond portfolio to a portfolio that includes equities as well. If state legislation needed to facilitate the continued diversification is not enacted, TMRS may have to revisit the continued diversification of the portfolio and consider reducing the assumed IRR. A reduction in the IRR would result in increased actuarial accrued liabilities, thus causing further increases in city contribution rates, following the December 31, 2009 actuarial valuation. Trend Information Trend information gives an indication of the progress made in accumulating sufficient assets to pay benefits when due. Applicable historical trend information concerning this plan is presented below: Fiscal Year Annual Required Contributions Net Pension Ending Contribution (ARC) Made Obligation 1999 $1,965,749 $1,965,749 - 2000 2,154,204 2,154,204 - 2001 2,272,217 2,272,217 - 2002 2,511,159 2,511,159 - 2003 2,694,930 2,694,930 - 2004 3,204,948 3,204,948 - 2005 3,814,370 3,814,370 - 2006 4,030,369 4,030,369 - 2007 4,316,276 4,316,276 - 2008 $4,750,851 $4,750,851 - City of College Station, Texas 63 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 Accrued Accrued as a Percent of Actuarial Actuarial Actuarial Actuarial Pension Benefit Valuation Date Value of Assets Liability (AAL) Liability (UAAL) Obligation 12/31/1998 $38,759,223 $45,574,205 $6,814,982 85% 12/31/1999 43,010,803 49,987,308 6,976,505 86% 12/31/2000 47,880,750 55,811,761 7,931,011 86% 12/31/2001 52,927,528 61,856,550 8,929,022 86% 12/31/2002 57,742,291 68,424,249 10,681,958 84% 12/31/2003 63,223,606 80,476,343 17,252,737 79% 12/31/2004 70,336,601 87,906,815 17,570,214 80% 12/31/2005 75,655,678 94,605,300 18,949,622 80% 12/31/2006 80,758,249 102,166,047 21,407,798 79% 12/31/2007 $87,193,697 $130,310,054 $43,116,357 66.9% Annual UAAL as a Actuarial Covered Percentage of Valuation Date Payroll Covered Payroll 12/31/1998 $19,339,128 35% 12/31/1999 20,803,862 34% 12/31/2000 23,651,256 34% 12/31/2001 25,422,558 35% 12/31/2002 27,784,120 38% 12/31/2003 28,537,016 61% 12/31/2004 30,978,906 57% 12/31/2005 31,987,028 59% 12/31/2006 34,143,239 63% 12/31/2007 $36,703,161 117.5% Post Retirement/Employment Benefits In addition to providing pension benefits, the City provides postretirement medical, dental, vision, drug and life insurance benefits for retired employees. The City has the authority to amend the plan. This other post employment benefit (OPEB) plan was established by City Resolution No. 9-13-90-5.10, which was passed and approved by the City Council on September 13, 1990. According to this resolution, employees who retire while working for the City and their dependents are eligible to remain on the City’s health and dental plan as long as the employee makes monthly premium payments. Life insurance for eligible retirees is paid entirely by the employer, covers only the retiree (no spouse coverage) and ceases upon attainment of age 65. The City determines the employer and participant contribution rates annually based on recommendations of the staff and consulting actuary. The City currently subsidizes the retiree medical, dental, vision and drug premium so that the retiree premium is less than the full amount of premium for a full time employee. During fiscal year 2008, sixteen former employees were covered under this arrangement, with claims totaling $75,670. Prior to the passage of this resolution, employees who reached retirement while working for the City were eligible to remain on the City’s self-insured health plan and have their monthly premiums paid for by the City. During fiscal year 2008, one retiree was covered under this plan; however, claims filed by this retiree were not material. City of College Station, Texas 64 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 The City also provides health benefits as required by the Federal Government under the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"). COBRA requires employers that sponsor group health plans to provide continuation of group coverage to employees and their dependents under certain circumstances where coverage would otherwise end. Eligible participants who qualify under COBRA pay premium costs for themselves and dependents. COBRA participants are on the same health plan and are reimbursed at the same levels as active employees. The amount of expenditures related to COBRA claims for the year ended September 30, 2008 was $105,365. For the fiscal year ended September 30, 2008, the City had twenty-one COBRA participants. E. Deferred Compensation Plan The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code ("IRC") 457. The plan, as amended, is available to all employees and permits them to defer a portion of their salary until future years. The plan funds are not available to employees until termination, retirement, death, or emergency. All amounts of compensation deferred under the plan (until paid or made available to the employee or other beneficiary) were placed in trust for the exclusive benefit of the participants and the beneficiaries. This action is in accordance with changes made to IRC Section 457. Since the City is no longer the Plan Administrator or the trustee, the assets of the plan are no longer a reportable fund in the City's basic financial statements. F. Commitments and Contingencies Construction Commitments The City has contractual commitments of $11,597,573 in the Capital Projects Funds, $2,727,057 in the Water Fund, $1,369,077 in the Wastewater Fund and $1,080,272 in the Electric Fund. These commitments are for construction of various projects and will be funded primarily from long term debt. Contingencies The City participates in a number of federal and state assisted grant programs. These programs are subject to program compliance audits by the grantors or their representatives. Any liability for reimbursement which may arise as the result of these audits is not believed to be material. Litigation The City is a party to legal proceedings, many of which occur in the normal course of operations. It is not possible at the present time to estimate ultimate outcome or liability, if any, of the city with respect to the various proceedings. The City’s management believes that the ultimate outcome of the various lawsuits will not have a material adverse effect on the City’s financial position. On July 1, 2008, the City of Bryan filed suit regarding their oversight of the joint solid waste management agreement between the Cities of College Station and Bryan. The City of College Station is vigorously defending its position and is preparing to file a counterclaim asserting College Station’s ownership interest of between 97% to 50% of BVSWMA, based on the initial investment when BVSWMA was formed. City management believes that the ultimate outcome of the suit will not have a material adverse effect on the City’s financial position. City of College Station, Texas 65 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 G. Bonds Available for Sale Authorized general obligation bonds available for future issue are as follows: Year Unissued Authorized Amount Public Buildings 1984 700,000$ Street Improvements 1984 500,000 Street Improvements 2003 1,720,000 Traffic Management 2003 455,000 Municipal Complex Improvements 2003 3,655,000 Total 7,030,000$ H. Revenue Bond Coverage All the net revenues of the Electric, Water, and Wastewater Funds are pledged for the payment of debt service of the revenue bonds and other indebtedness payable from those revenues. Net revenues, as defined by the revenue bond resolutions, include substantially all of the revenues and expenses of the above named funds other than certain interest income and expense, and depreciation and amortization. These bond resolutions further require that the net revenues, as defined, equal at least 1.40 times the average annual debt service on all revenue bonds and other indebtedness payable from those revenues and 1.25 times the maximum annual debt service on all revenue bonds and other indebtedness payable from those revenues. The maximum annual debt service is defined as the maximum principal and interest payments to be paid in any one year remaining in the life of the bonds, and the average annual debt service is defined as the sum of all principal and interest payments due over the remaining life of the bonds divided by the remaining life of the bonds. The City is in compliance with these requirements. I. New Accounting Pronouncements In June 2004, GASB issued Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, which provides guidance on all aspects of OPEB reporting by employers. The requirements of this statement are effective for fiscal periods beginning after December 15, 2007, for governments that were phase 2 for the implementation for SGAS 34. The City, a phase 2 government, is implementing GASB 45 for the fiscal year ending September 30, 2009. The City hired an outside consultant who conducted an actuarial valuation/liability assessment and estimated the annual costs of OPEB benefits under GASB 45. The initial study for the fiscal 2006 was expanded with different scenarios for fiscal 2009, using Projected Unit Credit – 30 year (PUC-30) as its cost method. As noted in Note V.D., the City provides postretirement medical, dental, vision, drug and life insurance benefits for retired employees through a single-employer defined benefit plan. Medical (including prescription drug and vision) and dental benefits are self-insured by the City and are currently operated on a pay-as-you-go basis. Life insurance benefits are fully insured. The City’s estimated annual OPEB cost for the fiscal year ending September 30, 2009 range from $9,890 if retirees pay the non-blended retiree rate (the life insurance obligation still exists) to $1,395,242 per year if retirees pay the group (blended) rate to $2,241,140 per year if retirees City of College Station, Texas 66 Notes to the Financial Statements For the Fiscal Year Ended September 30, 2008 pay the current subsidized rate. City staff plans to 1) evaluate, with assistance of the actuary and our benefits consultant, the impact of changes to the current plan structure, 2) evaluate, with the assistance of the City’s financial advisor, possible funding options, and 3) prepare and present a comprehensive overview with recommendations and a funding strategy to the City Council. In December 2006, GASB issued Statement No. 49, Accounting and Financial Reporting for Pollution Remediation Obligations, which identifies situations in which a government is required to report obligations relating to pollution remediation, estimate expected outlays for the remediation, and disclose information about pollution obligations associated with clean up efforts. This statement is effective for the City’s financial statements for periods beginning after December 15, 2007. The City is in the process of reviewing and evaluating this statement and its potential impact on the City’s financial statements. In June 2007, GASB issued Statement No. 51, Accounting and Financial Reporting for Intangible Assets, which establishes accounting and financial reporting requirements for intangible assets to reduce inconsistencies in reporting of these types of assets. The statement requires that all intangible assets not specifically excluded by its scope and provisions be classified as capital assets. This statement is effective for financial statements for periods beginning after June 15, 2009. The City is amending its capital asset policy to address capitalizing intangible assets, including internally developed computer software. In November 2007, GASB issued Statement No. 52, Land and Other Real Estate Held as Investments by Endowments, which establishes accounting and financial reporting requirements for land and other real estate held as investments by endowments. This statement is effective for periods beginning after June 15, 2008. The City does not have endowments that invest in land and other real estate. In June 2008, GASB issued Statement No. 53, Accounting and Financial Reporting for Derivative Instruments, which establishes accounting and financial reporting requirements for derivative instruments. This statement is effective for periods beginning after June 15, 2008. The City does not own derivative instruments. City of College Station, Texas 67 68 CITY OF COLLEGE STATION REQUIRED SUPPLEMENTARY INFORMATION CITY OF COLLEGE STATION, TEXAS Schedule of Funding Progress Texas Municipal Retirement System Last Ten Fiscal Years UAAL as a Actuarial Actuarial Percentage Actuarial Value of Accrued Unfunded Funded Covered of Covered Valuation Assets Liability (AAL) AAL (UAAL) Ratio Payroll Payroll Date* (a) (b) (b-a) (a/b) (c) [(b-a)/c] 12/31/1999 38,759,223 45,574,205 6,814,982 85.0% 19,339,128 35.2% 12/31/2000 43,010,803 49,987,308 6,976,505 86.0% 20,803,862 33.5% 12/31/2001 47,880,750 55,811,761 7,931,011 85.8% 23,651,256 33.5% 12/31/2002 52,927,528 61,856,550 8,929,022 85.6% 25,422,558 35.1% 12/31/2003 57,742,291 68,424,249 10,681,958 84.4% 27,784,120 38.4% 12/31/2004 63,223,606 80,476,343 17,252,737 78.6% 28,537,016 60.5% 12/31/2005 70,336,601 87,906,815 17,570,214 80.0% 30,978,906 56.7% 12/31/2006 75,655,678 94,605,300 18,949,622 80.0% 31,987,028 59.2% 12/31/2007 80,758,249 102,166,047 21,407,798 79.0% 34,143,239 62.7% 12/31/2008 87,193,697 130,310,054 43,116,357 66.9% 36,703,161 117.5% *Assets are stated at cost as of December 31 of the preceding year. 69 Original Budget Final Budget Actual Variance Over (Under) Revenues Taxes 29,722,555$ 29,722,555$ 30,984,741$ 1,262,186$ Licenses and Permits 1,158,124 1,158,124 1,154,902 (3,222) Intergovernmental 298,484 622,319 536,215 (86,104) Charges for Services 3,178,889 3,178,889 3,149,076 (29,813) Fines, Forfeits, and Penalties 3,440,389 3,440,389 3,412,827 (27,562) Special Assessment - - 914 914 Investment Income 681,783 681,783 593,514 (88,269) Rents and Royalties 265,916 265,916 279,004 13,088 Contributions 31,723 31,723 25,046 (6,677) Reimbursed Expenditures 274 274 426 152 Other 228,300 228,300 159,477 (68,823) Total Revenues 39,006,437 39,330,272 40,296,142 965,870 Expenditures Current General Government 6,456,091 8,073,515 6,187,469 (1,886,046) Fiscal Services 3,480,169 3,518,998 3,411,717 (107,281) Police 12,956,436 13,311,241 13,219,117 (92,124) Fire 10,671,063 10,884,191 11,251,400 367,209 Planning and Development Services 2,532,244 2,697,844 2,281,747 (416,097) Public Works 7,541,210 7,555,446 7,157,121 (398,325) Capital Improvement Projects 738,769 910,490 715,707 (194,783) Parks and Recreation 9,141,025 9,146,447 8,985,860 (160,587) Information Services 3,284,938 3,501,200 3,366,764 (134,436) Library 994,954 994,954 993,102 (1,852) Reimbursed Administration (6,641,636) (6,662,559) (6,497,466) 165,093 Contributions 692,512 692,512 657,592 (34,920) Other 488,000 173,000 173,637 637 Total Expenditures 52,335,775 54,797,279 51,903,767 (2,893,512) Deficiency of Revenues Under Expenditures (13,329,338) (15,467,007) (11,607,625) 3,859,382 Other Financing Sources (Uses) Sales of Capital Assets 10,000 10,000 10,981 981 Transfers In 11,166,898 12,201,898 11,591,668 (610,230) Transfer Out (588,784) (956,096) (942,224) 13,872 Total Other Financing Sources 10,588,114 11,255,802 10,660,425 (595,377) Net Change in Fund Balances (2,741,224) (4,211,205) (947,200) 3,264,005$ Fund Balances, October 1 12,932,589 12,932,589 12,932,589 Fund Balances, September 30 10,191,365$ 8,721,384$ 11,985,389$ Notes to Required Supplementary Information: The City of College Station budgets using the modified accrual basis of accounting. Budget and Actual CITY OF COLLEGE STATION, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balances General Fund For the Fiscal Year Ended September 30, 2008 70 CITY OF COLLEGE STATION SUPPLEMENTARY INFORMATION COMBINING FINANCIAL STATEMENTS NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Special revenue funds are used to account for specific revenues that are legally restricted to expenditures for particular purposes. Community Development - to account for funds granted to the City by the Federal Department of Housing and Urban Development for use on various community improvement projects. Convention Center - to account for the receipt and expenditure of funds received by the City in the operation and maintenance of a convention center. Revenues associated with this fund are derived from the hotel and motel occupancy tax and convention center rentals. Hotel Occupancy Tax - to account for the receipt and expenditure of funds received by the City from the assessment of hotel and motel occupancy tax. Usage of funds is restricted to the construction and maintenance of convention and civic facilities and to the promotion of tourism and arts within the City. Memorial Cemetery – to account for sales of plots (and options of plots) in the planned Aggie Field of Honor & Municipal Cemetery. Parks Escrow - to account for the receipt and expenditure of funds received by the City from residential land developers, who dedicate land, or money in lieu of land, for use in the development of neighborhood parks in residential areas. Red Light Camera – to account for the receipt and expenditure of funds from the operation of red light cameras. Northgate Tax Increment Financing District - to account for the receipt and expenditure of funds received by the City from the creation of a tax increment financing district for the Northgate area. Wolf Pen Creek Tax Increment Financing District - to account for the receipt and expenditure of funds received by the City from the creation of a tax increment financing district for the Wolf Pen Creek area. CAPITAL PROJECTS FUNDS Capital Projects Funds are used to account for the acquisition and construction of major capital improvements other than those financed by proprietary funds and trust funds. Business Park - to account for the cost of street, water, and sewer improvements at the College Station Business Park. Drainage Projects - to account for the cost of drainage improvements made with funds provided by a drainage utility fee and proceeds from the sale of general obligation bonds. General Government Projects - to account for the cost of new building construction and building improvements made with funds provided by proceeds from the sale of general obligation bonds. Parks & Recreation Projects - to account for the costs of new parks and improvements to existing parks made with funds provided from the sale of general obligation bonds. PERMANENT FUNDS Permanent Funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support the City's programs. Cemetery Endowment Fund - to account for principal trust amounts received and related interest income for the College Station cemetery. Memorial Cemetery Endowment Fund - to account for principal trust amounts received and related interest income for the College Station Memorial cemetery. 71 72 CITY OF COLLEGE STATION, TEXAS Combining Balance Sheet Nonmajor Governmental Funds September 30, 2008 Special Revenue Funds Capital Projects Funds Permanent Funds Total Assets Equity in Cash and Cash Equivalents 8,408,117$ 12,923,114$ 1,182,547$ 22,513,778$ Equity in Investments 4,013,389 6,168,501 564,457 10,746,347 Receivables Accrued Interest 50,493 80,328 7,315 138,136 Grants 428,270 --428,270 Accounts 423,456 188,682 29,150 641,288 Less Allowance for Uncollectible Accounts (57,293)(24,023)(4,906)(86,222) Inventories --636 636 Total Assets 13,266,432$ 19,336,602$ 1,779,199$ 34,382,233$ Liabilities and Fund Balances Liabilities Accounts Payable 96,772$ 978,842$ -$ 1,075,614$ Retainage Payable 20,692 333,565 -354,257 Interfund Payables 200,000 --200,000 Accrued Liabilities 215,265 244 -215,509 Other Deferred Revenue 374,363 -23,032 397,395 Total Liabilities 907,092 1,312,651 23,032 2,242,775 Fund Balances Reserved Reserved for Encumbrances 833,331 7,074,585 -7,907,916 Reserved for Capital Projects -10,949,366 -10,949,366 Reserved for Perpetual care - nonexpendable --1,756,167 1,756,167 Unreserved 11,526,009 -11,526,009 Total Fund Balances 12,359,340 18,023,951 1,756,167 32,139,458 Total Liabilities and Fund Balances 13,266,432$ 19,336,602$ 1,779,199$ 34,382,233$ 73 CITY OF COLLEGE STATION, TEXAS Combining Balance Sheet Nonmajor Governmental Funds - Special Revenue Funds September 30, 2008 Community Development Convention Center Hotel Occupancy Tax Memorial Cemetery Current Assets Equity in Cash and Cash Equivalents 239,880$ 230,029$ 5,244,083$ 196,960$ Equity in Investments 114,500 109,798 2,503,122 94,014 Receivables Accrued Interest -1,424 32,441 1,218 Grants 428,270 --- Accounts --269,528 151,928 Less Allowance for Uncollectible Accounts --(57,293)- Total Assets 782,650$ 341,251$ 7,991,881$ 444,120$ Liabilities and Fund Balances Liabilities Accounts Payable 38,272$ -$ -$ 13,410$ Retainage Payable ---- Interfund Payable --200,000 - Accrued Liabilities 10,472 --- Other Deferred Revenues --212,235 162,128 Total Liabilities 48,744 -412,235 175,538 Fund Balances Reserved Reserved for Encumbrances 624,807 -3,500 12,140 Unreserved Undesignated 109,099 341,251 7,576,146 256,442 Total Fund Balances 733,906 341,251 7,579,646 268,582 Total Liabilities and Fund Balances 782,650$ 341,251$ 7,991,881$ 444,120$ 74 Parks Escrow Red Light Camera Northgate Tax Increment Financing District Wolf Pen Creek Tax Increment Financing District Total 1,129,992$ 261,043$ 36,748$ 1,069,382$ 8,408,117$ 539,371 124,602 17,541 510,441 4,013,389 6,953 1,615 227 6,615 50,493 ----428,270 -2,000 --423,456 ----(57,293) 1,676,316$ 389,260$ 54,516$ 1,586,438$ 13,266,432$ 45,090$ -$ -$ -$ 96,772$ 20,692 ---20,692 ----200,000 -204,793 --215,265 ----374,363 65,782 204,793 --907,092 184,574 8,310 --833,331 1,425,960 176,157 54,516 1,586,438 11,526,009 1,610,534 184,467 54,516 1,586,438 12,359,340 1,676,316$ 389,260$ 54,516$ 1,586,438$ 13,266,432$ 75 CITY OF COLLEGE STATION, TEXAS Combining Balance Sheet Nonmajor Governmental Funds- Capital Projects Funds September 30, 2008 Business Park Drainage Projects General Government Projects Parks and Recreation Projects Total Assets Equity in Cash and Cash Equivalents 570,026$ 2,025,588$ 9,024,455$ 1,303,045$ 12,923,114$ Equity in Investments 272,087 966,860 4,307,581 621,973 6,168,501 Receivables Accrued Interest 3,527 12,599 56,117 8,085 80,328 Accounts -163,667 19,803 5,212 188,682 Less Allowance for Uncollectible Accounts -(24,023)--(24,023) Total Assets 845,640$ 3,144,691$ 13,407,956$ 1,938,315$ 19,336,602$ Liabilities and Fund Balances Liabilities Accounts Payable -$ 81,637$ 839,681$ 57,524$ 978,842$ Retainage Payable -8,857 259,417 65,291 333,565 Accrued Liabilities ---244 244 Total Liabilities -90,494 1,099,098 123,059 1,312,651 Fund Balances Reserved Reserved for Encumbrances 23,945 345,612 6,597,215 107,813 7,074,585 Reserved for Capital Projects 821,695 2,708,585 5,711,643 1,707,443 10,949,366 Total Fund Balances 845,640 3,054,197 12,308,858 1,815,256 18,023,951 Total Liabilities and Fund Balances 845,640$ 3,144,691$ 13,407,956$ 1,938,315$ 19,336,602$ 76 CITY OF COLLEGE STATION, TEXAS Combining Balance Sheet Nonmajor Governmental Funds - Permanent Funds September 30, 2008 Cemetery Endowment Fund Memorial Cemetery Endowment Fund Total Current Assets Equity in Cash and Cash Equivalents 1,047,079$ 135,468$ 1,182,547$ Equity in Investments 499,795 64,662 564,457 Receivables Accrued Interest 6,477 838 7,315 Accounts 6,118 23,032 29,150 Less Allowance for Doubtful Accounts (4,906)-(4,906) Inventories 636 -636 Total Assets 1,555,199$ 224,000$ 1,779,199$ Liabilities and Fund Balances Liabilities Other Deferred Revenue -$ 23,032$ 23,032$ Total Liabilities -23,032 23,032 Fund Balances Reserved Reserved for Perpetual Care 1,555,199 200,968 1,756,167 Total Fund Balances 1,555,199 200,968 1,756,167 Total Liabilities and Fund Balances 1,555,199$ 224,000$ 1,779,199$ 77 78 Special Revenue Funds Capital Projects Funds Permanent Funds Total Revenues Taxes 4,591,195$ -$ -$ 4,591,195$ Charges for Services 299,150 77,415 264,506 641,071 Intergovernmental 1,170,197 - - 1,170,197 Special Assessment - 1,254,611 - 1,254,611 Fines, Forfeits and Penalties 385,486 - - 385,486 Investment Income 416,287 670,212 62,106 1,148,605 Contributions - - 2,167 2,167 Reimbursed Expenditures - 6,680 - 6,680 Other 882,960 3,036 43 886,039 Total Revenues 7,745,275 2,011,954 328,822 10,086,051 Expenditures Current General Government 1,091,110 1,911 - 1,093,021 Fiscal Services 150,470 4,790 - 155,260 Public Works 25,069 253 - 25,322 Parks and Recreation 23,171 60,250 1,917 85,338 Reimbursed Administrative 549,839 1,369,598 - 1,919,437 Contributions 1,494,000 - - 1,494,000 Other 785 29,278 638 30,701 Capital Outlay 613,957 11,043,086 - 11,657,043 Debt Issuance Cost - 43,987 - 43,987 Total Expenditures 3,948,401 12,553,153 2,555 16,504,109 Excess (Deficiency) of Revenues Over (Under) Expenditures 3,796,874 (10,541,199) 326,267 (6,418,058) Other Financing Sources (Uses) Issuance of Debt - 8,737,840 - 8,737,840 Transfers In - 671,020 - 671,020 Transfers Out (1,598,874) (500,000) - (2,098,874) Total Other Financing Sources (Uses) (1,598,874) 8,908,860 - 7,309,986 Net Change in Fund Balances 2,198,000 (1,632,339) 326,267 891,928 Fund Balances, October 1 10,161,340 19,656,290 1,429,900 31,247,530 Fund Balances, September 30 12,359,340$ 18,023,951$ 1,756,167$ 32,139,458$ CITY OF COLLEGE STATION, TEXAS Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Fiscal Year Ended September 30, 2008 79 Community Development Convention Center Hotel Occupancy Tax Memorial Cemetery Revenues Taxes -$ -$ 3,585,512$ -$ Charges for Services - - - 299,150 Intergovernmental 1,170,197 - - - Fines, Forfeits and Penalties ---- Investment Income - 13,389 284,054 1,923 Other 281,095 - 2,025 - Total Revenues 1,451,292 13,389 3,871,591 301,073 Expenditures Current General Governmnet 1,077,107 - 14,003 - Fiscal Services ---- Parks and Recreation - - - 23,171 Public Works ---- Reimbursed Administrative 111,343 - 428,696 9,800 Contributions - - 1,494,000 - Other ---- Capital Outlay - 326 - - Total Expenditures 1,188,450 326 1,936,699 32,971 Excess of Revenues Over Expenditures 262,842 13,063 1,934,892 268,102 Other Financing Uses Operating Transfer Out (528,166) - - - Total Other Financing Uses (528,166) - - - Net Changes in Fund Balances (265,324) 13,063 1,934,892 268,102 Fund Balances, October 1 999,230 328,188 5,644,754 480 Fund Balances, September 30 733,906$ 341,251$ 7,579,646$ 268,582$ CITY OF COLLEGE STATION, TEXAS Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds - Special Revenue Funds For the Fiscal Year Ended September 30, 2008 80 Parks Escrow Red Light Camera Northgate Tax Increment Financing District Wolf Pen Creek Tax Increment Financing District Total -$ -$ 53,837$ 951,846$ 4,591,195$ - - - - 299,150 - - - - 1,170,197 - 385,486 - - 385,486 63,096 2,753 679 50,393 416,287 599,840 - - - 882,960 662,936 388,239 54,516 1,002,239 7,745,275 - - - - 1,091,110 - 150,470 - - 150,470 - - - - 23,171 - 25,069 - - 25,069 - - - - 549,839 - - - - 1,494,000 785 - - - 785 610,131 - - 3,500 613,957 610,916 175,539 - 3,500 3,948,401 52,020 212,700 54,516 998,739 3,796,874 - (28,233) - (1,042,475) (1,598,874) - (28,233) - (1,042,475) (1,598,874) 52,020 184,467 54,516 (43,736) 2,198,000 1,558,514 - - 1,630,174 10,161,340 1,610,534$ 184,467$ 54,516$ 1,586,438$ 12,359,340$ 81 Business Park Drainage Projects General Government Projects Parks and Recreation Projects Total Revenues Charges for Services -$ -$ -$ 77,415$ 77,415$ Special Assessment - 1,254,611 - - 1,254,611 Investment Income 37,492 129,072 437,755 65,893 670,212 Reimbursed Expenditures - 6,680 - - 6,680 Other - 648 2,388 - 3,036 Total Revenues 37,492 1,391,011 440,143 143,308 2,011,954 Expenditures Current General Government - - 1,911 - 1,911 Fiscal Services - 449 2,641 1,700 4,790 Public Works - 253 - - 253 Parks and Recreation - - 60,250 - 60,250 Reimbursed Administrative - 1,177,531 170,647 21,420 1,369,598 Other - 10,098 19,180 - 29,278 Capital Outlay 81 643,009 7,696,730 2,703,266 11,043,086 Debt Issuance Cost - - 38,141 5,846 43,987 Total Expenditures 81 1,831,340 7,989,500 2,732,232 12,553,153 Excess (Deficiency) of Revenues Over (Under) Expenditures 37,411 (440,329) (7,549,357) (2,588,924) (10,541,199) Other Financing Sources (Uses) Issuance of Debt - - 7,257,310 1,480,530 8,737,840 Transfers In - - 91,417 579,603 671,020 Transfers Out (500,000) - - - (500,000) Total Other Financing Sources (Uses) (500,000) - 7,348,727 2,060,133 8,908,860 Net Change in Fund Balances (462,589) (440,329) (200,630) (528,791) (1,632,339) Fund Balances, October 1 1,308,229 3,494,526 12,509,488 2,344,047 19,656,290 Fund Balances, September 30 845,640$ 3,054,197$ 12,308,858$ 1,815,256$ 18,023,951$ CITY OF COLLEGE STATION, TEXAS Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds - Capital Projects Funds For the Fiscal Year Ended September 30, 2008 82 Cemetery Endowment Fund Memorial Cemetery Endowment Fund Total Revenues Sale of Cemetery Lots 64,965$ 199,541$ 264,506$ Investment Income 60,679 1,427 62,106 Contributions 2,167 - 2,167 Other 43 - 43 Total Revenues 127,854 200,968 328,822 Operating Expenses Maintenance 1,917 - 1,917 Other 638 - 638 Total Operating Expenses 2,555 - 2,555 Net Income 125,299 200,968 326,267 Fund Balances, October 1 1,429,900 - 1,429,900 Fund Balances, September 30 1,555,199$ 200,968$ 1,756,167$ CITY OF COLLEGE STATION, TEXAS Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds - Permanent Funds For the Fiscal Year Ended September 30, 2008 83 Original Budget Final Budget Actual Variance Over (Under) Revenues Intergovernmental 3,628,748$ 3,628,748$ 1,170,197$ (2,458,551)$ Other 10,000 10,000 281,095 271,095 Total Revenues 3,638,748 3,638,748 1,451,292 (2,187,456) Expenditures Current General Government 3,730,481 3,731,645 1,077,107 (2,654,538) Reimbursed Administrative 148,358 148,838 111,343 (37,495) Total Expenditures 3,878,839 3,880,483 1,188,450 (2,692,033) Excess (Deficiency) of Revenues Over (Under) Expenditures (240,091) (241,735) 262,842 504,577 Other Financing Uses Operating Transfer Out - - (528,166) (528,166) Total Other Financing Uses - - (528,166) (528,166) Net Changes in Fund Balances (240,091) (241,735) (265,324) (23,589)$ Fund Balances, October 1 999,230 999,230 999,230 Fund Balances, September 30 759,139$ 757,495$ 733,906$ For the Fiscal Year Ended September 30, 2008 CITY OF COLLEGE STATION, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Community Development Fund 84 Original Budget Final Budget Actual Variance Over (Under) Revenues Investment Income 6,000$ 6,000$ 13,389$ 7,389$ Total Revenues 6,000 6,000 13,389 7,389 Expenditures Capital Outlay - - 326 326 Total Expenditures - - 326 326 Net Changes in Fund Balances 6,000 6,000 13,063 7,063$ Fund Balances, October 1 328,188 328,188 328,188 Fund Balances, September 30 334,188$ 334,188$ 341,251$ For the Fiscal Year Ended September 30, 2008 CITY OF COLLEGE STATION, TEXAS Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual Convention Center Fund 85 Original Budget Final Budget Actual Variance Over (Under) Revenues Taxes 3,080,000$ 3,080,000$ 3,585,512$ 505,512$ Investment Income 227,325 227,325 284,054 56,729 Other - - 2,025 2,025 Total Revenues 3,307,325 3,307,325 3,871,591 564,266 Expenditures Current General Government 1,509,761 1,509,761 14,003 (1,495,758) Reimbursed Administrative 452,751 452,751 428,696 (24,055) Contributions 1,485,000 1,497,500 1,494,000 (3,500) Capital Outlay 142,000 142,000 - (142,000) Total Expenditures 3,589,512 3,602,012 1,936,699 (1,665,313) Excess (Deficiency) of Revenues Over (Under) Expenditures (282,187) (294,687) 1,934,892 2,229,579 Other Financing Uses Operating Transfer Out (1,840,000) (1,840,000) - 1,840,000 Total Other Financing Uses (1,840,000) (1,840,000) - 1,840,000 Net Changes in Fund Balances (2,122,187) (2,134,687) 1,934,892 4,069,579$ Fund Balances, October 1 5,644,754 5,644,754 5,644,754 Fund Balances, September 30 3,522,567$ 3,510,067$ 7,579,646$ For the Fiscal Year Ended September 30, 2008 CITY OF COLLEGE STATION, TEXAS Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual Hotel Occupancy Tax Fund 86 Original Budget Final Budget Actual Variance Over (Under) Revenues Charges for Services 1,385,000$ 1,385,000$ 299,150$ (1,085,850)$ Investment Income - - 1,923 1,923 Total Revenues 1,385,000 1,385,000 301,073 (1,083,927) Expenditures Current Parks and Recreation 75,000 75,000 23,171 (51,829) Reimbursed Administrative 9,800 9,800 9,800 - Total Expenditures 84,800 84,800 32,971 (51,829) Net Changes in Fund Balances 1,300,200 1,300,200 268,102 (1,032,098)$ Fund Balances, October 1 480 480 480 Fund Balances, September 30 1,300,680$ 1,300,680$ 268,582$ For the Fiscal Year Ended September 30, 2008 CITY OF COLLEGE STATION, TEXAS Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual Memorial Cemetery Fund 87 Original Budget Final Budget Actual Variance Over (Under) Revenues Investment Income 20,000$ 20,000$ 63,096$ 43,096$ Other 290,000 290,000 599,840 309,840 Total Revenues 310,000 310,000 662,936 352,936 Expenditures Current Other - - 785 785 Capital Outlay 710,963 788,682 610,131 (178,551) Total Expenditures 710,963 788,682 610,916 (177,766) Net Changes in Fund Balances (400,963) (478,682) 52,020 530,702$ Fund Balances, October 1 1,558,514 1,558,514 1,558,514 Fund Balances, September 30 1,157,551$ 1,079,832$ 1,610,534$ For the Fiscal Year Ended September 30, 2008 CITY OF COLLEGE STATION, TEXAS Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual Parks Escrow Fund 88 Original Budget Final Budget Actual Variance Over (Under) Revenues Fines, Forfeits and Penalties 654,687$ 654,687$ 385,486$ (269,201)$ Investment Income 20,000 20,000 2,753 (17,247) Total Revenues 674,687 674,687 388,239 (286,448) Expenditures Current Fiscal Services 223,750 223,750 150,470 (73,280) Public Works - - 25,069 25,069 Total Expenditures 223,750 223,750 175,539 (48,211) Excess of Revenues Over Expenditures 450,937 450,937 212,700 (238,237) Other Financing Uses Operating Transfer Out - (35,000) (28,233) 6,767 Total Other Financing Uses - (35,000) (28,233) 6,767 Net Changes in Fund Balances 450,937 415,937 184,467 (231,470)$ Fund Balances, October 1 - - - Fund Balances, September 30 450,937$ 415,937$ 184,467$ CITY OF COLLEGE STATION, TEXAS Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual Red Light Camera Fund For the Fiscal Year Ended September 30, 2008 89 Original Budget Final Budget Actual Variance Over (Under) Revenues Taxes 55,227$ 55,227$ 53,837$ (1,390)$ Investment Income 1,105 1,105 679 (426) Total Revenues 56,332 56,332 54,516 (1,816) Net Changes in Fund Balances 56,332 56,332 54,516 (1,816)$ Fund Balances, October 1 - - - Fund Balances, September 30 56,332$ 56,332$ 54,516$ For the Fiscal Year Ended September 30, 2008 CITY OF COLLEGE STATION, TEXAS Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual Northgate Tax Increment Financing District Fund 90 Original Budget Final Budget Actual Variance Over (Under) Revenues Taxes 839,000$ 839,000$ 951,846$ 112,846$ Investment Income 10,000 10,000 50,393 40,393 Total Revenues 849,000 849,000 1,002,239 153,239 Expenditures Capital Outlay 1,199,615 1,199,615 3,500 (1,196,115) Total Expenditures 1,199,615 1,199,615 3,500 (1,196,115) Excess (Deficiency) of Revenues Over (Under) Expenditures (350,615) (350,615) 998,739 1,349,354 Other Financing Uses Operating Transfer Out (1,042,475) (1,042,475) (1,042,475) - Total Other Financing Uses (1,042,475) (1,042,475) (1,042,475) - Net Changes in Fund Balances (1,393,090) (1,393,090) (43,736) 1,349,354$ Fund Balances, October 1 1,630,174 1,630,174 1,630,174 Fund Balances, September 30 237,084$ 237,084$ 1,586,438$ For the Fiscal Year Ended September 30, 2008 CITY OF COLLEGE STATION, TEXAS Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual Wolf Pen Creek Tax Increment Financing District Fund 91 Original Budget Final Budget Actual Variance Over (Under) Revenues Investment Income 33,000$ 33,000$ 37,492$ 4,492$ Total Revenues 33,000 33,000 37,492 4,492 Expenditures Capital Outlay - - 81 81 Total Expenditures - - 81 81 Excess of Revenues Over Expenditures 33,000 33,000 37,411 4,411 Other Financing Uses Transfers Out (500,000) (500,000) (500,000) - Total Other Financing Uses (500,000) (500,000) (500,000) - Net Change in Fund Balances (467,000) (467,000) (462,589) 4,411$ Fund Balances, October 1 1,308,229 1,308,229 1,308,229 Fund Balances, September 30 841,229$ 841,229$ 845,640$ CITY OF COLLEGE STATION, TEXAS For the Fiscal Year Ended September 30, 2008 Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual Business Park Fund 92 Original Budget Final Budget Actual Variance Over (Under) Revenues Special Assessment 1,236,800$ 1,236,800$ 1,254,611$ 17,811$ Investment Income 60,000 60,000 129,072 69,072 Reimbursed Expenditures - - 6,680 6,680 Other - - 648 648 Total Revenues 1,296,800 1,296,800 1,391,011 94,211 Expenditures Current Fiscal Services - - 449 449 Public Works 7,200 7,200 253 (6,947) Reimbursed Administrative 1,202,539 1,226,664 1,177,531 (49,133) Other - - 10,098 10,098 Capital Outlay 855,000 855,000 643,009 (211,991) Total Expenditures 2,064,739 2,088,864 1,831,340 (257,524) Net Change in Fund Balances (767,939) (792,064) (440,329) 351,735$ Fund Balances, October 1 3,494,526 3,494,526 3,494,526 Fund Balances, September 30 2,726,587$ 2,702,462$ 3,054,197$ For the Fiscal Year Ended September 30, 2008 CITY OF COLLEGE STATION, TEXAS Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual Drainage Projects Fund 93 Original Budget Final Budget Actual Variance Over (Under) Revenues Investment Income 154,000$ 154,000$ 437,755$ 283,755$ Other - - 2,388 2,388 Total Revenues 154,000 154,000 440,143 286,143 Expenditures Current General Government - - 1,911 1,911 Fiscal Services - - 2,641 2,641 Parks and Recreation - - 60,250 60,250 Reimbursed Administrative 170,647 170,647 170,647 - Other 20,000 20,000 19,180 (820) Capital Outlay 5,527,076 7,633,076 7,696,730 63,654 Debt Issuance Cost 66,000 66,000 38,141 (27,859) Total Expenditures 5,783,723 7,889,723 7,989,500 99,777 Deficiency of Revenues Under Expenditures (5,629,723) (7,735,723) (7,549,357) 186,366 Other Financing Sources Issuance of Debt 8,365,000 8,365,000 7,257,310 (1,107,690) Transfers In 23,552 99,552 91,417 (8,135) Total Other Financing Sources 8,388,552 8,464,552 7,348,727 (1,115,825) Net Change in Fund Balances 2,758,829 728,829 (200,630) (929,459)$ Fund Balances, October 1 12,509,488 12,509,488 12,509,488 Fund Balances, September 30 15,268,317$ 13,238,317$ 12,308,858$ For the Fiscal Year Ended September 30, 2008 CITY OF COLLEGE STATION, TEXAS Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual General Government Projects Fund 94 Original Budget Final Budget Actual Variance Over (Under) Revenues Charges for Services 72,500$ 72,500$ 77,415$ 4,915$ Investment Income 21,000 21,000 65,893 44,893 Total Revenues 93,500 93,500 143,308 49,808 Expenditures Current Fiscal Services - - 1,700 1,700 Reimbursed Administrative 21,420 21,420 21,420 - Capital Outlay 1,430,000 1,788,500 2,703,266 914,766 Debt Issuance Cost 11,500 11,500 5,846 (5,654) Total Expenditures 1,462,920 1,821,420 2,732,232 910,812 Deficiency of Revenues Under Expenditures (1,369,420) (1,727,920) (2,588,924) (861,004) Other Financing Sources Issuance of Debt 1,215,000 1,215,000 1,480,530 265,530 Transfers In 225,000 225,000 579,603 354,603 Total Other Financing Sources 1,440,000 1,440,000 2,060,133 620,133 Net Change in Fund Balances 70,580 (287,920) (528,791) (240,871)$ Fund Balances, October 1 2,344,047 2,344,047 2,344,047 Fund Balances, September 30 2,414,627$ 2,056,127$ 1,815,256$ For the Fiscal Year Ended September 30, 2008 CITY OF COLLEGE STATION, TEXAS Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual Parks and Recreation Projects Fund 95 Original Budget Final Budget Actual Variance Over (Under) Revenues Intergovernmental -$ -$ 1,545$ 1,545$ Investment Income 257,000 257,000 793,773 536,773 Reimbursed Expenditures - - 38,932 38,932 Other - - 915 915 Total Revenues 257,000 257,000 835,165 578,165 Expenditures Current General Government - - 39,172 39,172 Fiscal Services - - 6,709 6,709 Reimbursed Administration 805,667 805,667 805,667 - Capital Outlay 3,114,072 8,678,419 7,881,279 (797,140) Debt Service Fiscal Charges 25,000 25,000 15,588 (9,412) Intergovernmental - 1,047,287 881,604 (165,683) Total Expenditures 3,944,739 10,556,373 9,630,019 (926,354) Deficiency of Revenues Under Expenditures (3,687,739) (10,299,373) (8,794,854) 1,504,519 Other Financing Sources Insurance of Debt 5,604,000 5,604,000 11,232,160 5,628,160 Transfers In - - 143,563 143,563 Total Other Financing Sources 5,604,000 5,604,000 11,375,723 5,771,723 Net Change in Fund Balances 1,916,261 (4,695,373) 2,580,869 7,276,242$ Fund Balances, October 1 21,807,526 21,807,526 21,807,526 Fund Balances, September 30 23,723,787$ 17,112,153$ 24,388,395$ For the Fiscal Year Ended September 30, 2008 CITY OF COLLEGE STATION, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Streets Projects Fund 96 Original Budget Final Budget Actual Variance Over (Under) Revenues Taxes 11,131,227$ 11,131,227$ 11,012,440$ (118,787)$ Investment Income 275,000 275,000 350,744 75,744 Total Revenues 11,406,227 11,406,227 11,363,184 (43,043) Expenditures Debt Service Principal Retirement 8,875,000 8,875,000 8,530,000 (345,000) Interest Payments 4,237,740 4,237,740 3,892,490 (345,250) Fiscal Charges 16,000 16,000 11,221 (4,779) Total Expenditures 13,128,740 13,128,740 12,433,711 (695,029) Deficiency of Revenues Under Expenditures (1,722,513) (1,722,513) (1,070,527) 651,986 Other Financing Sources Transfers In 2,112,411 2,112,411 1,422,163 (690,248) Total Other Financing Sources 2,112,411 2,112,411 1,422,163 (690,248) Net Change in Fund Balances 389,898 389,898 351,636 (38,262)$ Fund Balances, October 1 3,466,058 3,466,058 3,466,058 Fund Balances, September 30 3,855,956$ 3,855,956$ 3,817,694$ For the Fiscal Year Ended September 30, 2008 CITY OF COLLEGE STATION, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Debt Service Fund 97 98 COMBINING FINANCIAL STATEMENTS NONMAJOR ENTERPRISE FUNDS Sanitation - to account for all sanitation collection and disposal activities by the City for both residential and commercial customers. Northgate Parking Garage - to account for revenues and expenses related to the operation and maintenance of the Northgate parking garage and parking lot. 99 Sanitation Northgate Parking Garage Total Enterprise Funds Current Assets Equity in Cash and Cash Equivalents 185,552$ 778,339$ 963,891$ Equity in Investments 88,568 371,519 460,087 Receivables Accrued Interest 1,440 4,766 6,206 Accounts 954,409 58,684 1,013,093 Less: Allowance for Uncollectible Accounts (115,336) (195) (115,531) Intergovernmental Receivable 17,792 - 17,792 Inventories 39,812 - 39,812 Total Current Assets 1,172,237 1,213,113 2,385,350 Noncurrent Assets Equity in Joint Venture 11,496,186 - 11,496,186 Property and Equipment Buildings - 5,743,755 5,743,755 Machinery and Equipment 338,043 250,190 588,233 Accumulated Depreciation (338,043) (1,130,395) (1,468,438) Construction in Progress - 4,330 4,330 Land - 690,707 690,707 Total Property and Equipment - 5,558,587 5,558,587 Total Noncurrent Assets 11,496,186 5,558,587 17,054,773 Total Assets 12,668,423 6,771,700 19,440,123 Liabilities Current Liabilities Accounts Payable 68,869 2,303 71,172 Accrued Liabilities 123,420 17,738 141,158 Other Deferred Revenues 17,792 81,574 99,366 Refundable Deposits - 9,170 9,170 Total Current Liablities 210,081 110,785 320,866 Noncurrent Liabilities Accrued Vacation 57,765 2,462 60,227 Total Noncurrent Liabilites 57,765 2,462 60,227 Total Liabilities 267,846 113,247 381,093 Net Assets Invested in Capital Assets, net of related debt - 5,558,587 5,558,587 Unrestricted 12,400,577 1,099,866 13,500,443 Total Net Assets 12,400,577$ 6,658,453$ 19,059,030$ CITY OF COLLEGE STATION, TEXAS Combining Statement of Net Assets Nonmajor Enterprise Funds September 30, 2008 100 Sanitation Northgate Parking Garage Total Enterprise Funds Operating Revenues Charges for Services 6,694,054$ 673,768$ 7,367,822$ Other 86,482 - 86,482 Total Operating Revenues 6,780,536 673,768 7,454,304 Operating Expenses Salaries and Benefits 1,742,471 281,460 2,023,931 Supplies 564,229 18,131 582,360 Maintenance 529,180 22,616 551,796 Purchased Professional Services 425,744 82,818 508,562 Purchased Property Services 1,590,765 47,227 1,637,992 Other Purchased Services 668,379 26,201 694,580 Reimbursed Administrative 621,732 33,692 655,424 Depreciation 8,690 157,805 166,495 Other (8,895) 50 (8,845) Total Operating Expenses 6,142,295 670,000 6,812,295 Operating Income 638,241 3,768 642,009 Nonoperating Revenues (Expenses) Investment Income 16,512 43,318 59,830 Reimbursed Expenses 85 50 135 Earnings in Joint Venture 2,848,177 - 2,848,177 Other, Net (38,893) 3,293 (35,600) Total Nonoperating Revenues 2,825,881 46,661 2,872,542 Income Before Capital Contributions and Transfers 3,464,122 50,429 3,514,551 Capital Contributions and Transfers Transfers Out (515,500) - (515,500) Total Capital Contributions and Transfers (515,500) - (515,500) Change in Net Assets 2,948,622 50,429 2,999,051 Beginning Net Assets 9,451,955 6,608,024 16,059,979 Ending Net Assets 12,400,577$ 6,658,453$ 19,059,030$ CITY OF COLLEGE STATION, TEXAS Combining Statement of Revenues, Expenses and Changes in Fund Net Assets Nonmajor Enterprise Funds For the Fiscal Year Ended September 30, 2008 101 Northgate Parking Sanitation Garage Total Cash Flows from Operating Activities: Cash Received from Customers 6,690,237$ 632,841$ 7,323,078$ Cash Payments to Suppliers for Goods and Services (4,408,423) (232,612) (4,641,035) Cash Payments to Employees for Services (1,722,468) (279,641) (2,002,109) Customer Deposits Returned - (1,880) (1,880) Cash Received for Reimbursed Expenses 85 50 135 Cash Received for Miscellaneous Revenues - 3,293 3,293 Cash Paid for Miscellaneous Expenses (41,076) - (41,076) Net Cash Provided by Operating Activities 518,355 122,051 640,406 Cash Flows from Noncapital Financing Activities: Transfers Out to Other Funds (475,500) - (475,500) Net Cash Used by Noncapital Financing Activities (475,500) - (475,500) Cash Flows from Capital and Related Financing Activities: Acquisition and Construction of Capital Assets - (79,224) (79,224) Net Cash Used by Capital and Related Financing Activities - (79,224) (79,224) Cash Flows from Investing Activities: Purchase of Investments (200,168) (1,089,543) (1,289,711) Proceeds from Sale and Maturities of Investment Securities 226,268 1,154,381 1,380,649 Investment Income 16,137 42,486 58,623 Net Cash Provided by Investing Activities 42,237 107,324 149,561 Net Increase in Cash and Cash Equivalents 85,092 150,151 235,243 Cash and Cash Equivalents, Oct. 1 100,460 628,188 728,648 Cash and Cash Equivalents, Sept. 30 185,552$ 778,339$ 963,891$ Reconciliation of Operating Income to Net Cash Provided by Operating Activities: Operating Income 638,241$ 3,768$ 642,009$ Adjustment to Reconcile Operating Income to Net Cash Provided by Operating Activities: Depreciation, Bad Debt Expense, Inventory Loss 8,690 157,805 166,495 Provision for Uncollectible Accounts 16,290 25 16,315 Miscellaneous Nonoperating Revenues 85 3,343 3,428 Miscellaneous Nonoperating Expenses (41,076) - (41,076) Changes in Assets and Liabilities: Change in Accounts Receivable (108,091) (27,896) (135,987) Change in Deferred Revenues 17,792 (13,031) 4,761 Change in Inventory (34,738) - (34,738) Change in Accounts Payable 5,225 416 5,641 Change in Accrued Liabilities 4,434 (1,098) 3,336 Change in Refundable Deposits - (1,880) (1,880) Change in Accrued Vacation 11,503 599 12,102 Total Adjustments (119,886) 118,283 (1,603) Net Cash Provided by Operating Activities 518,355$ 122,051$ 640,406$ CITY OF COLLEGE STATION, TEXAS Combining Statement of Cash Flows Nonmajor Enterprise Funds For the Fiscal Year Ended September 30, 2008 102 COMBINING FINANCIAL STATEMENTS INTERNAL SERVICE FUNDS Communication Services - to account for the activities related to the operation and maintenance of the City’s radio and telephone systems. Employee Benefits - to account for self-insurance activity related to administration of the City's health benefits plan. Equipment Replacement - to account for the purchase of City equipment such as vehicles and large motorized equipment, telephone and radio systems, and replacement assets for existing technological infrastructure equipment not budgeted in other funds. Fleet Maintenance - to account for all activities related to the management of the City’s vehicles and heavy equipment, including preventive maintenance and vehicle repair activities. Print/Mail Services - to account for the activities related to the City’s printing and mailing operations. Property and Casualty - to account for insurance activity relating to all claims filed for liability cases (both injury and property) and property losses incurred for City property. Unemployment - to account for self-insurance activity on claims filed under unemployment compensation laws. Utility Customer Service - to account for the billing and collection activities relating to the City’s electric, water, and sewer utilities and residential and commercial garbage collection. Workers' Compensation - to account for self-insurance activity relating to administration of the City's workers' compensation plan. 103 CITY OF COLLEGE STATION, TEXAS Combining Statement of Net Assets Internal Service Funds September 30, 2008 Communication Services Employee Benefits Equipment Replacement Fleet Maintenance Current Assets Equity in Cash and Cash Equivalents 50,190$ 3,998,977$ 2,909,544$ 21,631$ Equity in Investments 23,957 1,908,804 1,388,793 10,325 Receivables Accrued Interest 312 24,739 17,999 (711) Accounts -4,676 -- Other ---- Less Allowance for Uncollectible Accounts ---- Intergovernmental receivable ---- Inventories ---99,508 Total Current Assets 74,459 5,937,196 4,316,336 130,753 Property and Equipment Buildings ---786,525 Machinery and Equipment 1,113,293 -24,583,663 259,884 Accumulated Depreciation (1,011,918)-(17,083,350)(498,578) Construction in Progress --892,738 - Total Property and Equipment 101,375 -8,393,051 547,831 Total Assets 175,834$ 5,937,196$ 12,709,387$ 678,584$ Liabilities and Fund Equity Current Liabilities Accounts Payable 7,760$ 144,305$ 30,799$ 15,374$ Claims Payable -565,189 -- Accrued Liabilities 15,587 --29,933 Deferred Revenue ---- Total Current Liabilities 23,347 709,494 30,799 45,307 Noncurrent Liabilities Accrued Vacation 11,286 --39,641 Total Noncurrent Liabilities 11,286 --39,641 Total Liabilities 34,633 709,494 30,799 84,948 Net Assets Invested in Capital Assets 101,375 -8,393,051 547,831 Unreserved Retained Earnings (Deficits)39,826 5,227,702 4,285,537 45,805 Total Net Assets 141,201$ 5,227,702$ 12,678,588$ 593,636$ 104 Print/Mail Services Property and Casualty Unemployment Utility Customer Service Workers' Compensation Total -$ 925,045$ 158,640$ 112,096$ 1,049,965$ 9,226,088$ -441,545 75,723 53,506 501,172 4,403,825 -5,723 981 691 6,495 56,229 -25,000 -38,372 -68,048 ---15,003 -15,003 ---(24,811)-(24,811) -8,053 ---8,053 -----99,508 -1,405,366 235,344 194,857 1,557,632 13,851,943 -----786,525 ---1,433,762 -27,390,602 ---(925,790)-(19,519,636) -----892,738 ---507,972 -9,550,229 -$ 1,405,366$ 235,344$ 702,829$ 1,557,632$ 23,402,172$ -$ 28,950$ 1,261$ 21,735$ 189$ 250,373$ -373,830 --466,936 1,405,955 ---51,432 -96,952 -8,053 ---8,053 -410,833 1,261 73,167 467,125 1,761,333 ---59,419 -110,346 ---59,419 -110,346 - 410,833 1,261 132,586 467,125 1,871,679 ---507,972 -9,550,229 -994,533 234,083 62,271 1,090,507 11,980,264 -$ 994,533$ 234,083$ 570,243$ 1,090,507$ 21,530,493$ 105 Communication Services Employee Benefits Equipment Replacement Fleet Maintenance Operating Revenues Charges for Services 784,630$ -$ 3,329,940$ 1,744,865$ Premiums - 5,987,246 - - Other - 39,098 - - Total Operating Revenues 784,630 6,026,344 3,329,940 1,744,865 Operating Expenses Salaries and Benefits 404,408 - - 763,061 Supplies 53,727 - 10,325 758,559 Maintenance 115,408 - 21,132 22,890 Purchased Professional Services 2,770 3,008 - 160 Purchased Property Services 20,124 - - 17,146 Other Purchased Services 37,578 202 1,012 33,426 Claims - 4,598,807 - - Administration Fees - 497,773 - - Contributions - - 34,534 - Premiums - 599,607 - - Reimbursed Administrative 215,391 109,414 - 166,930 Depreciation 15,387 - 2,166,758 28,424 Other - 2,842 - 2,264 Total Operating Expenses 864,793 5,811,653 2,233,761 1,792,860 Operating Income (Loss) (80,163) 214,691 1,096,179 (47,995) Nonoperating Revenues (Expenses) Investment Income 3,790 236,927 159,907 (2,521) Reimbursed Expenses 12,462 - - - Other, Net 102 14 238,769 36 Total Nonoperating Revenues (Expenses) 16,354 236,941 398,676 (2,485) Income (Loss) Before Operating Transfers (63,809) 451,632 1,494,855 (50,480) Transfers Transfers In - - - - Transfers Out - - (3,345,029) - Total Operating Transfers - - (3,345,029) - Change in Net Assets (63,809) 451,632 (1,850,174) (50,480) Beginning Net Assets 205,010 4,776,070 14,528,762 644,116 Ending Net Assets 141,201$ 5,227,702$ 12,678,588$ 593,636$ CITY OF COLLEGE STATION, TEXAS Combining Statement of Revenues, Expenses and Changes in Fund Net Assets Internal Service Funds For the Fiscal Year Ended September 30, 2008 106 Print/Mail Property and Casualty Unemployment Utility Customer Service Workers' Compensation Total -$ -$ -$ 2,320,400$ -$ 8,179,835$ - 943,200 30,847 - 848,619 7,809,912 632 - - 213,825 4,172 257,727 632 943,200 30,847 2,534,225 852,791 16,247,474 - - - 1,365,181 - 2,532,650 - 51 - 63,969 28,500 915,131 - - - 45,701 - 205,131 - - - 59,156 12,000 77,094 - - - 34,195 - 71,465 - - - 565,924 - 638,142 - 246,130 8,405 - 146,486 4,999,828 - 51,974 - - 50,000 599,747 - - - - - 34,534 - 247,287 - - 130,622 977,516 - 52,223 - 442,553 52,223 1,038,734 - - - 55,339 - 2,265,908 - 62 - 9,891 - 15,059 - 597,727 8,405 2,641,909 419,831 14,370,939 632 345,473 22,442 (107,684) 432,960 1,876,535 - 39,263 8,852 7,826 52,990 507,034 - 8,286 - - - 20,748 - 103,340 - (101) - 342,160 - 150,889 8,852 7,725 52,990 869,942 632 496,362 31,294 (99,959) 485,950 2,746,477 116,878 - - - - 116,878 - - - (37,293) - (3,382,322) 116,878 - - (37,293) - (3,265,444) 117,510 496,362 31,294 (137,252) 485,950 (518,967) (117,510) 498,171 202,789 707,495 604,557 22,049,460 -$ 994,533$ 234,083$ 570,243$ 1,090,507$ 21,530,493$ 107 CITY OF COLLEGE STATION, TEXAS Combining Statement of Cash Flows Internal Service Funds For the Fiscal Year Ended September 30, 2008 Communication Employee Equipment Fleet Print/Mail Services Benefits Replacement Maintenance Services Cash Flows from Operating Activities: Cash Received from Customers 784,630$ 6,023,953$ 3,329,940$ 1,744,865$ 632$ Cash Payments to Suppliers for Goods and Services (496,174) (5,502,719) (474,648) (1,028,282) (20,485) Cash Payments to Employees for Services (404,016) - - (777,804) (29,951) Customer Deposits Received - - - - - Cash Received for Reimbursed Expenses 12,462 - - - - Cash Received for Miscellaneous Revenues 102 14 238,769 36 - Cash Paid to Other Funds - - - - (81,459) Cash Paid for Miscellaneous Expenses - - - - - Net Cash Provided (Used) by Operating Activities (102,996) 521,248 3,094,061 (61,185) (131,263) Cash Flows from Noncapital Financing Activities: Transfers In from Other Funds - - - - 131,263 Transfers Out to Other Funds - - (1,360,671) - - Net Cash Provided (Used) by Noncapital Financing Activities - - (1,360,671) - 131,263 Cash Flows from Capital and Related Financing Activities: Acquisition and Construction of Capital Assets - - (1,963,943) - - Proceeds from Sale of Assets - - 182,823 - - Net Cash Used by Capital and Related Financing Activities - - (1,781,120) - - Cash Flows from Investing Activities: Purchase of Investments (91,699) (5,542,625) (4,109,650) (39,660) - Proceeds from Sale and Maturities of Investment Securities 128,218 5,746,886 4,437,765 69,132 - Investment Income 4,193 231,458 157,465 (1,443) - Net Cash Provided (Used) by Investing Activities 40,712 435,719 485,580 28,029 - Net Increase in Cash and Cash Equivalents (62,284) 956,967 437,850 (33,156) - Cash and Cash Equivalents, Oct. 1 112,474 3,042,010 2,471,694 54,787 - Cash and Cash Equivalents, Sept. 30 50,190$ 3,998,977$ 2,909,544$ 21,631$ -$ Reconciliation of Operating Income (Loss) to Net Cash Provided by Operating Activities: Operating Income (Loss)(80,163)$ 214,691$ 1,096,179$ (47,995)$ 632$ Adjustment to Reconcile Operating Income to Net Cash Provided by Operating Activities: Depreciation, Bad Debt Expense, Inventory Loss 15,387 - 2,166,758 28,424 - Provision for Uncollectible Accounts - (14) - - - Miscellaneous Nonoperating Revenues 12,564 14 238,769 36 - Miscellaneous Nonoperating Expenses - - - - - Changes in Assets and Liabilities: Change in Accounts Receivable - (2,391) - - - Change in Inventory - - - 77,125 - Change in Prepaid Costs - - - - - Change in Accounts Payable (51,176) 28,759 (258,335) (104,032) (20,485) Change in Due to Other Funds - - - - (81,459) Change in Claims Payable - 280,189 - - - Change in Accrued Liabilities 1 - (149,310) (2,997) (14,340) Change in Accrued Vacation 391 - - (11,746) (15,611) Total Adjustments (22,833) 306,557 1,997,882 (13,190) (131,895) Net Cash Provided (Used) by Operating Activities (102,996)$ 521,248$ 3,094,061$ (61,185)$ (131,263)$ 108 Property and Utility Customer Workers' Casualty Unemployment Services Compensation Total 943,200$ 30,847$ 2,527,637$ 852,791$ 16,238,495$ (674,069) (7,144) (1,230,102) (387,483) (9,821,106) - - (1,366,909) - (2,578,680) - - - - - 8,286 - - - 20,748 103,340 - - - 342,261 - - - - (81,459) - - (101) - (101) 380,757 23,703 (69,475) 465,308 4,120,158 - - - - 131,263 - - (37,293) - (1,397,964) - - (37,293) - (1,266,701) - - - - (1,963,943) - - - - 182,823 - - - - (1,781,120) (1,239,270) (219,444) (177,326) (1,399,345) (12,819,019) 1,186,613 226,535 231,679 1,322,606 13,349,434 37,094 8,626 8,123 50,373 495,889 (15,563) 15,717 62,476 (26,366) 1,026,304 365,194 39,420 (44,292) 438,942 2,098,641 559,851 119,220 156,388 611,023 7,127,447 925,045$ 158,640$ 112,096$ 1,049,965$ 9,226,088$ 345,473$ 22,442$ (107,684)$ 432,960$ 1,876,535$ - - 55,339 - 2,265,908 - - 557 543 111,626 - - - 363,009 - - (101) (101) - - (6,588) - (8,979) - - - - 77,125 - - - - - 26,977 1,261 (9,270) (10,710) (397,011) - - - - (81,459) (103,319) - - 43,058 219,928 - - 111 - (166,535) - - (1,839) - (28,805) 35,284 1,261 38,209 32,348 2,243,623 380,757$ 23,703$ (69,475)$ 465,308$ 4,120,158$ 109 110 CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS 111 112 Governmental funds capital assets: Buildings and Building Improvements 24,781,958$ Improvements 24,122,568 Machinery and Equipment 7,656,863 Infrastructure 187,300,971 Construction in Progress 27,852,493 Land 29,957,616 301,672,469$ Investments in governmental funds capital assets by source: Capital Projects 284,513,746$ General Fund Revenues 7,063,872 Special Revenue Funds 7,039,350 Contributions 3,055,501 301,672,469$ This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally, the capital assets of internal service funds are included as governmental activities in the statement of net assets. CITY OF COLLEGE STATION, TEXAS Capital Assets Used in the Operation of Governmental Funds Schedule by Source As of September 30, 2008 113 Improvements Machine/Tool Function and Activity Total Buildings Land Other than Bldg Equipment Infrastructure Development Services: Development Services Administration 38,499$ 15,500$ -$ -$ 22,999$ -$ Inspection - - - - - - 38,499 15,500 - - 22,999 - Fire: Emergency Management 15,887 - - - 15,887 - Emergency Medical Services 376,934 - - - 376,934 - Fire Administration 324,799 - - - 324,799 - Fire Prevention - - - - - - Fire Suppression 302,955 - - - 302,955 - 1,020,575 - - - 1,020,575 - Fiscal Services: Accounting 38,900 - - - 38,900 - Budget/Research - - - - - - Fiscal Administration - - - - - - Municipal Court 292,349 - - 134,308 158,041 - Purchasing - - - - - - Risk Management - - - - - - 331,249 - - 134,308 196,941 - General Government: Community Development 26,054 - 20,840 - 5,214 - City Manager 79,322 - - - 79,322 - City Programs 1,437,504 - 1,437,504 - - - City Secretary - - - - - - Economic Development 27,065 - 14,470 - 12,595 - Human Resources - - - - - - Legal - - - - - - Capital Projects 24,320,427 398,660 20,967,167 753,545 2,201,055 - Public Relations 284,766 - - 37,725 247,041 - 26,175,138 398,660 22,439,981 791,270 2,545,227 - Office of Technology and Information Services: Geographic Information Systems 32,292 - - - 32,292 - Library Services 356,969 - 40,000 - 316,969 - Management Information Systems 1,903,023 - - - 1,903,023 - Mail 31,585 - - - 31,585 - OTIS Administration 286,884 - - - 286,884 - 2,610,753 - 40,000 - 2,570,753 - Police: Criminal Investigation 36,620 - - - 36,620 - Communications/Jail - - - - - - Police Administration 334,006 - - - 334,006 - Professional Standards - - - - - - Quartermaster 71,716 - - - 71,716 - Special Services 77,717 - - - 77,717 - Technical Services - - - - - - Uniform Patrol 177,648 - - - 177,648 - 697,707 - - - 697,707 - CITY OF COLLEGE STATION, TEXAS Capital Assets used in the Operation of Governmental Funds Schedule by Function and Activity 1 For the Fiscal Year Ended September 30, 2008 114 Improvements Machine/Tool Function and Activity Total Buildings Land Other than Bldg Equipment Infrastructure CITY OF COLLEGE STATION, TEXAS Capital Assets used in the Operation of Governmental Funds Schedule by Function and Activity 1 For the Fiscal Year Ended September 30, 2008 Parks and Recreation: Forestry 24,025 - - 13,735 10,290 - Parks Administration 207,050 - - 207,050 - - Parks Maintenance/Operations 278,632 - - 149,571 129,061 - Capital Projects 22,661,946 916,965 1,012,455 20,732,526 - - Recreation 5,199 - - - 5,199 - Special Facilities 60,502 - - 10,619 49,883 - 23,237,354 916,965 1,012,455 21,113,501 194,433 - Public Works: Drainage Maintenance 14,993 - - - 14,993 - Engineering 17,987 - - - 17,987 - Facilities Maintenance 117,858 70,238 32,900 - 14,720 - Public Works Administration 20,517 - - - 20,517 - Capital Projects 186,007,655 - 1,762,185 - - 184,245,470 Streets Maintenance 212,323 - - - 212,323 - Traffic Signs/Markings 5,689 - - - 5,689 - Traffic Signals 47,853 - - - 47,853 - 186,444,875 70,238 1,795,085 - 334,082 184,245,470 Other: Non-departmental 33,263,826 23,380,595 4,670,095 2,083,490 74,145 3,055,501 33,263,826 23,380,595 4,670,095 2,083,490 74,145 3,055,501 Construction in Progress 27,852,493 3,047,502 - 11,954,755 304,882 12,545,354 27,852,493 3,047,502 - 11,954,755 304,882 12,545,354 Total governmental funds capital assets 301,672,469$ 27,829,460$ 29,957,616$ 36,077,324$ 7,961,744$ 199,846,325$ 1 This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally, the capital assets of internal service funds are included as governmental activities in the statement of net assets. 115 Governmental Funds Governmental Funds Capital Assets Capital Assets Function and Activity 9/30/07 Additions Retirements Transfers/Other 9/30/08 Planning and Development Services: Development Services Administration 38,499$ -$ -$ -$ 38,499$ Inspection - - 38,499 - - - 38,499 Fire: Emergency Management 9,818 - - 6,069 15,887 Emergency Medical Services 312,952 63,982 - - 376,934 Fire Administration 310,024 14,775 - - 324,799 Fire Prevention - - - - - Fire Suppression 302,955 - - - 302,955 935,749 78,757 - 6,069 1,020,575 Fiscal Services: Accounting - 38,900 - - 38,900 Budget/Research - - - - - Fiscal Administration - - - - - Municipal Court 111,916 180,433 - - 292,349 Purchasing - - - - - Risk Management - - - - - 111,916 219,333 - - 331,249 General Government: Community Development 20,840 5,214 - - 26,054 City Manager 79,322 - - - 79,322 City Programs 1,437,504 - - - 1,437,504 City Secretary - - - - - Economic Development 14,470 - (8,000) 20,595 27,065 Human Resources - - - - - Legal - - - - - Capital Projects 24,916,613 55,760 (44,886) (607,061) 24,320,427 Public Communications 189,665 89,945 - 5,157 284,766 26,658,414 150,919 (52,886) (581,309) 26,175,138 Information Services: Geographic Information Systems 32,292 - - - 32,292 Library Services 316,969 40,000 - - 356,969 Management Information Systems 1,074,686 828,337 - - 1,903,023 Mail - - (26,573) 58,158 31,585 IS Administration 155,994 130,890 - - 286,884 1,579,941 999,227 (26,573) 58,158 2,610,753 Police: Criminal Investigation 36,620 - - - 36,620 Communications/Jail - - - - - Police Administration 324,006 - - 10,000 334,006 Professional Standards - - - - - Quartermaster 55,256 16,460 - - 71,716 Special Services 71,786 5,931 - - 77,717 Technical Services - - - - - Uniform Patrol 177,648 - - - 177,648 665,316 22,391 - 10,000 697,707 CITY OF COLLEGE STATION, TEXAS Capital Assets Used in the Operation of Governmental Funds Schedule of Changes by Function and Activity For the Fiscal Year Ended September 30, 2008 116 Governmental Funds Governmental Funds Capital Assets Capital Assets Function and Activity 9/30/07 Additions Retirements Transfers/Other 9/30/08 CITY OF COLLEGE STATION, TEXAS Capital Assets Used in the Operation of Governmental Funds Schedule of Changes by Function and Activity For the Fiscal Year Ended September 30, 2008 Parks and Recreation: Forestry 24,025 - - - 24,025 Parks Administration 207,050 - - - 207,050 Parks Maintenance/Operations 278,632 - - - 278,632 Capital Projects 21,382,921 1,280,389 - (1,364) 22,661,946 Recreation 5,199 - - 5,199 Special Facilities 60,502 - - - 60,502 21,958,329 1,280,389 - (1,364) 23,237,354 Public Works: Drainage Maintenance 14,993 - - - 14,993 Engineering 17,987 - - - 17,987 Facilities Maintenance 117,858 - - - 117,858 Public Works Administration 20,517 - - - 20,517 Capital Projects 51,749,183 13,163,686 - 121,094,786 186,007,655 Streets Maintenance 212,323 - - - 212,323 Traffic Signs/Markings 5,689 - - - 5,689 Traffic Signals 47,853 - - - 47,853 52,186,403 13,163,686 - 121,094,786 186,444,875 Other: Non-departmental 145,829,801 7,920,385 - (120,486,360) 33,263,826 145,829,801 7,920,385 - (120,486,360) 33,263,826 Construction in Progress 26,723,932 19,536,926 (18,408,365) - 27,852,493 26,723,932 19,536,926 (18,408,365) - 27,852,493 Total Governmental Funds Capital Assets 276,688,300$ 43,372,013$ (18,487,824)$ 99,980$ 301,672,469$ This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally, the capital assets of internal service funds are included as governmental activities in the statement of net assets. 117 118 CITY OF COLLEGE STATION STATISTICAL SECTION STATISTICAL SECTION - UNAUDITED This section of the City of College Station’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial condition. Contents Financial Trends These schedules contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time. (Pages 121-127) Revenue Capacity These schedules contain information to help the reader assess the factors affecting the City’s ability to generate its property and sales taxes. (Pages 128-135) Debt Capacity These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future. (Pages 136-140) Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place and to help make comparisons over time and with other governments. (Pages 141-142) Operating Information These schedules contain information about the City’s operations and resources to help the reader understand how the City’s financial information relates to the services the City provides and the activities it performs. (Pages 143-146) Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The City implemented GASB Statement 34 in 2003; schedules presenting government-wide information include information beginning in that year. 119 120 Fiscal Year 2003 2004 2005 2006 2007 2008 Governmental activities Invested in capital assets, net of related debt 86,587,535$ 100,066,963$ 106,460,949$ 108,287,795$ 113,750,039$ 114,935,845$ Restricted 12,031,989 4,289,623 4,289,531 4,564,184 5,089,422 6,357,013 Unrestricted 28,076,989 25,962,837 27,897,090 39,602,065 45,967,901 59,703,654 Total governmental activities net assets 126,696,513$ 130,319,423$ 138,647,570$ 152,454,044$ 164,807,362$ 180,996,512$ Business-type activities Invested in capital assets, net of related debt 109,857,913$ 130,810,275$ 132,001,489$ 142,778,246$ 147,043,092$ 145,066,758$ Restricted 2,466,731 2,651,325 2,797,735 2,920,980 3,056,356 1,590,977 Unrestricted 31,766,395 29,665,429 30,830,640 32,980,043 37,474,945 43,957,844 Total business-type activities net assets 144,091,039$ 163,127,029$ 165,629,864$ 178,679,269$ 187,574,393$ 190,615,579$ Primary government Invested in capital assets, net of related debt 196,445,448$ 230,877,238$ 238,462,438$ 251,066,041$ 260,793,131$ 260,002,603$ Restricted 14,498,720 6,940,948 7,087,266 7,485,164 8,145,778 7,947,990 Unrestricted 59,843,384 55,628,266 58,727,730 72,582,108 83,442,846 103,661,498 Total primary government net assets 270,787,552$ 293,446,452$ 304,277,434$ 331,133,313$ 352,381,755$ 371,612,091$ Source: City of College Station Note: The City began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003 LAST SIX FISCAL YEARS NET ASSETS BY COMPONENT CITY OF COLLEGE STATION, TEXAS (accrual basis of accounting) 121 CITY OF COLLEGE STATION, TEXAS CHANGES IN NET ASSETS LAST SIX FISCAL YEARS (accrual basis of accounting) Fiscal Year 2003 2004 2005 2006 2007 2008 Expenses Governmental activities: General government 7,857,618$ 7,536,427$ 6,457,556$ 7,755,725$ 7,654,393$ 8,551,304$ Fiscal services 1,834,859 1,953,189 2,467,187 2,452,442 2,442,439 2,977,362 Police 9,374,251 9,654,447 10,666,318 11,214,413 12,299,698 13,395,874 Fire 7,102,089 7,189,495 7,853,876 8,280,257 9,472,331 11,359,260 Planning and development services 1,651,761 1,586,114 1,580,317 1,449,327 1,603,963 1,910,359 Public works 5,242,162 5,004,976 5,401,568 6,227,707 6,620,846 9,467,081 Capital projects - - - - - 719,391 Parks and recreation 6,361,728 6,154,862 6,549,466 7,353,984 9,148,511 10,385,095 Information services 2,919,155 2,652,957 2,881,863 3,087,596 2,689,720 2,749,327 Interest on long-term debt 3,643,268 3,448,533 3,895,520 4,116,871 4,291,022 3,860,801 Unallocated depreciation 2,543,780 2,690,998 5,430,745 5,759,049 6,026,372 667,890 Total governmental activities expense 48,530,671 47,871,998 53,184,416 57,697,371 62,249,295 66,043,744 Business-type activities: Electric 43,299,695 41,120,750 47,815,339 51,250,110 60,242,408 70,485,984 Water 6,283,025 6,542,184 7,908,695 7,770,081 8,302,863 8,706,415 Sewer 7,347,315 7,214,296 7,262,208 7,973,677 8,179,813 9,159,176 Sanitation 4,419,352 4,848,591 4,931,079 5,421,624 5,916,431 6,244,639 Cedar Creek Condominiums - 61,150 - - - - Northgate parking 461,394 550,544 591,944 621,593 591,980 668,237 Total business-type activities expense 61,810,781 60,337,515 68,509,265 73,037,085 83,233,495 95,264,451 Total primary government expense 110,341,452$ 108,209,513$ 121,693,681$ 130,734,456$ 145,482,790$ 161,308,195$ Program Revenues Governmental activities: Charges for services: Fines, forfeitures and penalties 3,215,162$ 3,563,970$ 4,008,637$ 3,798,807$ 3,618,236$ 3,798,313$ Licenses and permits 1,104,793 1,215,924 1,043,672 1,091,848 1,306,690 1,154,902 Public works 1,237,447 1,784,694 1,110,686 1,290,935 1,199,565 1,255,525 Parks and recreation 1,399,390 1,346,580 1,044,134 1,244,476 1,420,284 1,911,789 Other activities 1,480,889 1,614,408 2,002,338 2,656,136 3,210,563 3,548,309 Operating grants and contributions 1,891,808 3,208,957 2,629,494 3,144,254 2,038,535 1,735,170 Capital grants and contributions 6,399,178 5,266,837 4,489,883 7,477,874 5,271,090 3,055,501 Total governmental activities program revenues 16,728,667 18,001,370 16,328,844 20,704,330 18,064,963 16,459,509 Business-type activities: Charges for services: Electric sales 46,592,459 47,431,497 51,467,169 60,217,421 67,462,075 76,787,412 Water sales 8,861,195 8,319,779 9,519,714 10,852,660 10,060,398 12,025,086 Sewer service 9,159,142 9,334,778 9,697,314 10,363,603 10,590,688 11,184,565 Garbage collection fees 5,986,207 4,829,150 5,151,204 6,419,446 7,512,194 9,628,798 Parking garage fees 545,566 603,465 480,627 576,892 620,124 673,818 Other activities 4,341 - - - - - Operating grants and contributions 50,700 - - - - - Capital grants and contributions 3,887,629 5,179,221 1,937,320 4,677,465 4,041,105 5,349,125 Total business-type activities program revenues 75,087,239 75,697,890 78,253,348 93,107,487 100,286,584 115,648,804 Total primary government program revenues 91,815,906$ 93,699,260$ 94,582,192$ 113,811,817$ 118,351,547$ 132,108,313$ 122 Fiscal Year 2003 2004 2005 2006 2007 2008 Net (Expense)/Revenue Governmental activities (31,802,004)$ (29,870,628)$ (36,855,572)$ (36,993,041)$ (44,184,332)$ (49,584,235)$ Business-type activities 13,276,458 15,360,375 9,744,083 20,070,402 17,053,089 20,384,355 Total primary government net expense (18,525,546)$ (14,510,253)$ (27,111,489)$ (16,922,639)$ (27,131,243)$ (29,199,880)$ General Revenues and Other Changes in Net Assets Governmental activities: Taxes Property taxes 13,441,000$ 14,668,641$ 15,888,475$ 16,646,519$ 18,573,309$ 20,670,112$ Sales and mixed beverage taxes 14,027,489 15,238,995 15,705,090 17,082,936 18,449,731 20,241,973 Franchise taxes 1,688,947 1,974,587 1,718,491 2,132,341 1,931,196 2,090,779 Hotel taxes 2,120,015 2,191,429 2,306,928 2,671,417 2,980,250 3,585,512 Unrestricted investment earnings 1,739,929 1,224,546 1,487,926 3,415,849 4,512,575 3,385,844 Gain (Loss) on sale of capital assets 19,563 4,386 (111,916) - - - Correction to value of capital assets 7,795,715 - - - - - Adjustment to claims payable - (904,263) - - - - Transfers 6,856,352 (904,783) 8,188,725 8,850,453 10,090,589 7,559,165 Total governmental activities 47,689,010 33,493,538 45,183,719 50,799,515 56,537,650 57,533,385 Business-type activities: Unrestricted investment earnings 1,126,900 662,359 947,477 1,829,456 1,932,624 1,330,785 Correction to value of capital assets - 2,108,473 - - - - Transfers (6,856,352) 904,783 (8,188,725) (8,850,453) (10,090,589) (10,433,954) Total business-type activities (5,729,452) 3,675,615 (7,241,248) (7,020,997) (8,157,965) (9,103,169) Total primary government 41,959,558$ 37,169,153$ 37,942,471$ 43,778,518$ 48,379,685$ 48,430,216$ Change in net assets Governmental activities 15,887,006$ 3,622,910$ 8,328,147$ 13,806,474$ 12,353,318$ 7,949,150$ Business-type activities 7,547,006 19,035,990 2,502,835 13,049,405 8,895,124 11,281,186 Total primary government 23,434,012$ 22,658,900$ 10,830,982$ 26,855,879$ 21,248,442$ 19,230,336$ Source: City of College Station Notes: The City began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003. Correction to value of capital assets in fiscal years 2003 and 2004 are prior period adjustments. Adjustment to claims payable in fiscal year 2004 is a prior period adjustment. CITY OF COLLEGE STATION, TEXAS CHANGES IN NET ASSETS - Continued LAST SIX FISCAL YEARS (accrual basis of accounting) 123 CITY OF COLLEGE STATION, TEXASPROGRAM REVENUES BY FUNCTION/PROGRAMLAST SIX FISCAL YEARS(accrual basis of accounting)Program Revenues200320042005200620072008Function/ProgramGovernmental activities: General government 1,979,207$ 3,618,878$ 3,121,430$ 4,357,597$ 3,343,904$ 2,501,778$ Fiscal services 327,188 333,043 508,810 547,790 409,100 684,666 Police 3,364,991 3,677,391 4,093,425 3,875,900 3,713,866 4,533,697 Fire 916,473 724,278 916,804 817,910 1,400,464 1,137,759 Planning and development services 1,104,793 1,215,924 1,043,672 1,091,848 1,306,690 1,357,037 Public works 7,636,625 7,051,531 5,600,569 8,768,809 6,470,655 4,312,571 Parks and recreation 1,399,390 1,380,325 1,044,134 1,244,476 1,420,284 1,932,001 Subtotal governmental activities 16,728,667 18,001,370 16,328,844 20,704,330 18,064,963 16,459,509 Business-type activities: Electric 47,018,072 48,032,185 52,780,914 62,284,935 69,033,816 77,419,441 Water 10,957,066 10,260,307 9,826,360 12,409,728 11,314,888 14,115,391 Sewer 10,575,987 11,972,783 10,014,243 11,416,486 11,805,562 13,811,356 Sanitation 5,986,207 4,829,150 5,151,204 6,419,446 7,512,194 9,628,798 Cedar Creek Condominiums 4,341 - - - - - Northgate parking 545,566 603,465 480,627 576,892 620,124 673,818 Subtotal business-type activities 75,087,239 75,697,890 78,253,348 93,107,487 100,286,584 115,648,804 Total primary government 91,815,906$ 93,699,260$ 94,582,192$ 113,811,817$ 118,351,547$ 132,108,313$ Source: City of College Station124 1999200020012002200320042005200620072008General Fund Reserved 346,038$ 543,396$ 660,488$ 989,028$ 1,728,294$ 1,089,510$ 1,132,180$ 1,523,619$ 1,108,449$ 2,305,476$ Unreserved 7,463,493 7,884,787 8,772,212 9,122,197 9,522,041 9,613,442 9,038,345 9,448,389 11,824,140 9,679,913 Total general fund 7,809,531$ 8,428,183$ 9,432,700$ 10,111,225$ 11,250,335$ 10,702,952$ 10,170,525$ 10,972,008$ 12,932,589$ 11,985,389$ All Other Governmental Funds Reserved 8,289,966$ 28,691,651$ 9,395,621$ 10,685,338$ 41,119,894$ 42,522,379$ 42,999,111$ 49,111,974$ 46,372,274$ 48,819,538$ Unreserved, reported in: Special revenue funds 7,356,274 7,655,383 12,749,505 12,460,155 10,851,935 6,085,255 6,244,225 7,462,140 10,148,840 11,526,009 Capital projects funds 10,244,405 - 25,443,167 33,275,222 - - - - - - Total all other governmental funds 25,890,645$ 36,347,034$ 47,588,293$ 56,420,715$ 51,971,829$ 48,607,634$ 49,243,336$ 56,574,114$ 56,521,114$ 60,345,547$ Source: City of College StationNote: Fiscal years 1998 through 2002 have been restated to include trust funds.Fiscal YearCITY OF COLLEGE STATION, TEXASFUND BALANCES, GOVERNMENTAL FUNDSLAST TEN FISCAL YEARS(modified accrual basis of accounting)125 1999200020012002200320042005200620072008RevenuesTaxes 23,465,240$ 25,429,183$ 27,254,701$ 29,499,644$ 31,277,451$ 34,073,652$ 35,618,984$ 38,533,213$ 41,934,486$ 46,588,376$ Licenses and permits 643,968 680,776 779,159 870,636 1,012,960 1,112,766 1,025,013 945,593 1,191,105 1,154,902 Intergovernmental 2,153,853 1,607,155 3,221,851 2,572,428 1,950,883 3,208,957 2,592,312 3,144,254 2,038,535 1,707,957 Charges for services 1,546,912 1,819,069 2,038,422 2,251,297 2,610,056 2,538,583 2,634,683 2,925,281 3,339,352 3,790,147 Fines, forfeitures and penalties 1,208,499 1,393,566 1,798,870 2,225,354 2,657,643 2,966,278 3,518,940 3,285,907 3,256,488 3,798,313 Special assessments 875,353 911,415 944,636 982,760 1,035,023 1,062,179 1,110,686 1,290,935 1,199,565 1,255,525 Investment income 1,522,837 2,642,328 3,487,814 2,615,798 1,543,026 1,062,069 1,269,201 3,066,642 3,864,797 2,886,636 Rents and royalties 166,723 167,927 213,832 228,392 233,026 256,023 243,831 244,864 261,225 279,004 Loan repayments 122,198 6,879 9,979 9,626 11,322 5,418 2,541 - - - Contributions 231,131 166,975 448,949 356,369 475,913 784,402 37,182 12,281 31,605 27,213 Reimbursed expenditures - - 531,307 32,803 7,258 28,393 - 145,749 479,675 46,038 Other revenues 340,669 546,935 551,280 437,359 335,405 679,349 631,192 447,432 738,415 1,046,431 Total revenues 32,277,383 35,372,208 41,280,800 42,082,466 43,149,966 47,778,069 48,684,565 54,042,151 58,335,248 62,580,542 ExpendituresGeneral government 1,735,592 1,775,494 2,909,436 3,801,250 3,765,079 4,187,972 4,480,075 4,216,582 4,699,159 7,319,662 Fiscal services 1,783,602 1,967,135 1,889,611 2,112,936 2,319,008 2,479,082 3,038,145 3,050,533 3,013,548 3,573,686 Police 6,903,838 7,567,620 8,273,632 8,829,060 9,143,331 9,803,577 10,829,081 11,559,669 12,556,678 13,219,117 Fire 4,844,031 5,179,104 5,702,804 6,340,775 6,989,125 7,275,289 7,964,785 8,493,228 9,622,195 11,251,400 Planning and development services 1,445,172 1,558,036 1,887,378 1,883,224 1,935,277 1,964,001 1,962,603 1,877,732 2,008,901 2,281,747 Public works 3,923,009 4,353,073 4,583,796 5,207,101 5,292,243 5,534,404 6,117,241 7,116,329 7,440,854 7,182,443 Capital projects - - - - - - - - - 715,707 Economic and community development 594,417 773,703 41,623 122,074 6,369 16,886 11,281 - - - Parks and recreation 4,592,990 5,185,392 5,200,809 5,862,938 6,279,342 6,388,099 6,778,196 7,520,189 8,167,857 9,071,198 Information systems 1,498,635 1,760,191 2,229,600 2,243,844 2,320,950 2,346,534 2,500,518 2,596,591 3,070,524 3,366,764 Library 571,742 600,778 581,768 670,818 681,350 665,291 694,445 870,203 912,527 993,102 Reimbursed administrative (2,769,942) (2,878,132) (3,538,877) (3,559,556) (3,703,529) (3,328,431) (3,485,807) (3,335,264) (3,305,040) (3,772,362) Contributions 1,528,615 1,829,125 1,541,173 1,348,885 1,573,651 2,504,589 1,895,742 1,995,564 1,855,961 2,151,592 Community development block grant - - - 538,901 222,169 201,099 275,775 340,399 215,707 - Home grant - - - 626,848 408,779 304,580 439,243 840,211 323,811 - Community development grant 1,110,610 480,865 763,303 - - - - - - - Claim settlements 270,000 - - - - - - - - - Other expenditures 95,648 269,786 577,606 183,450 624,837 253,270 296,344 108,527 147,860 204,338 Capital outlay 5,452,034 11,778,585 9,885,474 13,702,819 11,286,448 12,775,413 15,435,376 11,610,189 14,213,574 19,538,322 CITY OF COLLEGE STATION, TEXASCHANGES IN FUND BALANCES, GOVERNMENTAL FUNDSLAST TEN FISCAL YEARS(modified accrual basis of accounting)Fiscal Year126 1999200020012002200320042005200620072008Debt service Principal 2,845,000 3,463,614 4,475,000 5,950,000 5,820,000 10,110,000 6,190,000 7,285,000 7,820,000 8,530,000 Interest 2,147,653 2,117,480 3,213,770 3,425,390 3,647,529 3,376,538 3,885,075 4,078,635 4,212,245 3,892,490 Issuance costs 80,947 107,057 77,244 115,500 118,335 352,114 118,261 - - - Fiscal charges 7,839 8,016 8,926 8,752 12,500 15,332 13,871 152,729 527,806 70,796 Intergovernmental 70,000 405,660 - - 223,608 221,902 97,621 743,117 342,630 881,604 Total expenditures 38,731,432 48,302,582 50,304,076 59,415,009 58,966,401 67,447,541 69,537,871 71,120,163 77,846,797 90,471,606 Deficiency of revenues under expenditures(6,454,049) (12,930,374) (9,023,276) (17,332,543) (15,816,435) (19,669,472) (20,853,306) (17,078,012) (19,511,549) (27,891,064) Other Financing Sources (Uses)Proceeds from long-term debt 7,080,000 14,113,000 7,292,870 20,056,200 6,570,000 16,375,000 13,347,581 15,700,000 7,890,000 19,970,000 Proceeds from refunding bonds - - - - - 5,980,000 - - 10,255,000 - Payment to bond escrow agent - - - - - (6,260,371) - - (10,451,378) - Premium on bonds issued - - - - - 280,371 - - 373,648 - Sale of capital assets 307,267 55,403 580,909 30,106 19,563 4,386 12,182 17,500 318,103 10,981 Transfers in 6,724,409 11,724,310 14,945,966 8,764,250 7,910,690 10,945,210 11,476,019 11,864,435 15,054,935 13,828,414 Transfers out (1,324,234) (1,887,298) (1,550,693) (2,007,066) (1,993,594) (11,566,702) (3,879,201) (2,371,662) (2,021,178) (3,041,098) Total other financing sources 12,787,442 24,005,415 21,269,052 26,843,490 12,506,659 15,757,894 20,956,581 25,210,273 21,419,130 30,768,297 Net change in fund balances 6,333,393$ 11,075,041$ 12,245,776$ 9,510,947$ (3,309,776)$ (3,911,578)$ 103,275$ 8,132,261$ 1,907,581$ 2,877,233$ Debt services as a percentage of noncapital expenditures15.3% 15.6% 19.2% 20.8% 20.1% 25.3% 18.9% 19.4% 19.7% 17.6%Source: City of College StationNotes: Direct capital expenditures have been removed from departmental expenditure lines and included in the capital outlay line item. Fiscal years 1998 through 2001 Community Development expenditures are not split between CDBG and HOME. In these years, they are stated as one line item.Fiscal year 1998 investment income was restated to reflect an additional $128,885 as a result of GASB 31 implementation which requires investments to be reported at fair market value.Fiscal years 1998 through 2002 have been restated to include trust funds.Fiscal YearCITY OF COLLEGE STATION, TEXASCHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS - ContinuedLAST TEN FISCAL YEARS(modified accrual basis of accounting)127 Fiscal Year Property Sales Hotel Franchise Mixed Drink Total1999 8,528,764$ 11,489,702$ 1,750,194$ 1,523,736$ 172,844$ 23,465,240$ 2000 9,294,964 12,573,564 1,796,813 1,577,815 186,027 25,429,183 2001 10,735,576 12,773,722 1,843,419 1,644,627 257,357 27,254,701 2002 12,224,416 13,400,054 1,926,009 1,714,241 234,924 29,499,644 2003 13,441,000 13,780,639 2,120,015 1,688,947 246,850 31,277,451 2004 14,668,641 14,957,697 2,191,429 1,974,587 281,298 34,073,652 2005 15,888,475 15,445,404 2,306,928 1,718,491 259,686 35,618,984 2006 16,646,519 16,752,174 2,671,417 2,132,341 330,762 38,533,213 2007 18,573,309 18,077,973 2,980,250 1,931,196 371,758 41,934,486 2008 20,670,112 19,822,906 3,585,512 2,090,779 419,067 46,588,376 Change1999-2008 142.4% 72.5% 104.9% 37.2% 142.5% 98.5%Source: City of College StationNote: Property taxes include general fund, debt service fund, Melrose Apartment TIF (2000-2002), Northgate TIF(2008-present) and Wolf Pen Creek TIF (1996 - Present).CITY OF COLLEGE STATION, TEXASTAX REVENUE BY SOURCE, GOVERNMENTAL FUNDSLAST TEN FISCAL YEARS(modified accrual basis of accounting)128 Taxable AssessedCommercial Personal, InventoryValue as a Residential and Industrial and Other Less Exemptions Less TIF (1) Total Taxable Total Direct Estimated Actual Percentage ofFiscal Year Property Property Property and Abatements Captured Value Assessed Value Tax Rate Taxable Value Actual Taxable Value1999 $ 1,326,150,471 $ 427,342,143 $ 454,526,419 $ 276,453,209 $ 18,504,453 $ 1,913,061,371 $ 0.4293 $ 1,913,061,371 100.00%2000 1,394,367,040 532,743,286 493,708,598 308,471,247 37,318,353 2,075,029,324 0.4293 2,075,029,324 100.00%2001 1,574,451,660 565,368,046 521,295,544 345,752,888 41,698,188 2,273,664,174 0.4293 2,273,664,174 100.00%2002 1,721,906,078 596,567,968 552,036,938 380,950,901 39,379,860 2,450,180,223 0.4777 2,450,180,223 100.00%2003 1,910,284,688 634,030,921 607,645,557 428,395,713 30,625,663 2,692,939,790 0.4777 2,674,807,515 99.33%2004 2,144,406,477 723,887,327 653,978,324 493,364,734 39,971,363 2,988,936,031 0.4653 2,988,936,031 100.00%2005 2,339,284,129 770,194,254 738,376,045 556,722,986 45,182,585 3,245,948,857 0.4640 3,250,329,407 100.13%2006 2,530,659,165 931,255,843 798,179,118 614,609,545 45,750,172 3,599,734,409 0.4394 3,599,734,409 100.00%2007 2,849,558,106 1,020,242,352 828,757,366 643,387,278 50,131,743 4,005,038,803 0.4394 4,005,038,803 100.00%2008 3,200,809,497 1,141,458,255 881,095,548 677,645,852 68,644,309 4,477,073,139 0.4394 4,477,073,139 100.00%Source: Brazos County Appraisal DistrictNotes: Assessed value is 100% of the estimated actual value.(1) Tax increment financing district (TIF).CITY OF COLLEGE STATION, TEXASASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTYLAST TEN FISCAL YEARS129 General Total College Fiscal Basic Obligation Direct Station Brazos Year Rate Debt Service Rate ISD County 1999 0.1618 0.2675 0.4293 1.7500 0.4170 2000 0.1631 0.2662 0.4293 1.7500 0.4170 2001 0.1662 0.2631 0.4293 1.7500 0.4100 2002 0.1846 0.2931 0.4777 1.7900 0.4200 2003 0.1946 0.2831 0.4777 1.7900 0.4146 2004 0.1921 0.2732 0.4653 1.7700 0.4350 2005 0.1942 0.2698 0.4640 1.7700 0.4726 2006 0.1896 0.2498 0.4394 1.6750 0.4650 2007 0.1910 0.2484 0.4394 1.4800 0.4550 2008 0.1910 0.2484 0.4394 1.2411 0.4650 Source: Brazos County Appraisal District Notes: (1) Tax rates are established by each taxing jurisdiction on an annual basis for revenues to be collected in the following fiscal year. The City must publish its effective and rollback tax rates before adopting an actual tax rate. If the City adopts a rate that exceeds the rollback rate, voters may petition for an election to limit the rate to the rollback rate. If the City adopts a rate that exceeds its effective rate, additional public hearings and notices are required. Rates for debt service are set based on each year's requirements. (2) The date that taxes are due for all jurisdictions is October 1. Taxes for all jurisdictions become delinquent on February 1. The penalty is set by state law at 6% in February, and an additional 1% per month up to 12%. The interest is accrued at 1% per month. (3) The upper limit of the tax rate is set at $2.50/$100 of assessed value for each jurisdiction by State Statute. This limit is for both operations and debt service combined. City Direct Rates Overlapping Rates CITY OF COLLEGE STATION, TEXAS DIRECT AND OVERLAPPING PROPERTY TAX RATES LAST TEN FISCAL YEARS (rate per $100 of assessed value) 130 Percent of Percent of of Total City of Total CityTaxable Taxable Taxable TaxableAssessed Assessed Assessed AssessedTaxpayer Value Rank Value Value Rank ValueCollege Station Hospital LP 61,308,070$ 1 1.24% 15,907,526$ 8 0.83%C.B.L. & Associates (Post Oak Mall) 55,651,375 2 1.12% 50,059,180 1 2.62%Weinberg, Israel & David Alkosser 42,388,230 3 0.86% 23,349,060 4 1.22%Woodland of College Station LP 36,846,840 4 0.74%ACC OP (Callaway Villas) LP 30,736,980 5 0.62%Commonwealth Austin CH LP 30,628,460 6 0.62%Walmart/Sam's 28,803,300 7 0.58% 18,456,600 6 0.97%University Heights - College Station LP 28,789,920 8 0.58%Verizon Communications, Inc. 28,277,520 9 0.57% 34,424,740 2 1.80%SCI Gateway at CS Fund LLC Etal 27,246,180 10 0.55%Scott & White Hospital/Clinic21,756,530 5 1.14%W9/JP-M Real Estate Ltd24,417,115 3 1.28%WHG Treehouse L.P.11,850,000 10 0.62%Lane College Station Ltd.12,500,000 9 0.65%University Commons16,279,705 7 0.85%370,676,875$ 7.48% 229,000,456$ 11.98%Source: Brazos County Appraisal DistrictNotes: Verizon Communications was called GTE Southwest in fiscal year 1999. Weinberg, Israel & David Alkosser was called Alkosser, David Etal in fiscal year 1999. College Station Hospital, LP was called Columbia BVMC/BVMC, Inc. in fiscal year 1999.1999CITY OF COLLEGE STATION, TEXASPRINCIPAL PROPERTY TAXPAYERSCURRENT YEAR AND NINE YEARS AGO2008131 Fiscal Year Taxes Levied CollectionsEnded for the Percentage in Subsequent PercentageSept 30 Fiscal Year Amount of Levy Years Amount of Levy1999 $ 8,292,212 $ 8,235,356 99.31% $ 51,642 $ 8,286,998 99.94%2000 9,068,352 9,000,090 99.25% 59,062 9,059,152 99.90%2001 9,939,852 9,835,960 98.95% 93,658 9,929,618 99.90%2002 11,892,629 11,735,174 98.68% 147,652 11,882,826 99.92%2003 13,010,508 12,740,869 97.93% 257,029 12,997,898 99.90%2004 14,092,814 13,974,666 99.16% 103,884 14,078,550 99.90%2005 15,270,852 15,160,102 99.27% 96,924 15,257,026 99.91%2006 16,162,073 15,938,981 98.62% 122,602 16,061,583 99.38%2007 17,818,419 17,697,220 99.32% 7,345 17,704,565 99.36%2008 19,973,882 19,773,036 98.99% - 19,773,036 98.99%Sources: City Of College Station and Brazos County Tax OfficeFiscal Year of the LevyCITY OF COLLEGE STATION, TEXASLAST TEN FISCAL YEARSPROPERTY TAX LEVIES AND COLLECTIONSCollected within theTotal Collections to Date132 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Utilities 13,770$ 11,191$ 12,319$ 13,645$ 15,169$ 14,929$ 14,943$ 16,684$ 19,336$ 22,403$ Construction 5,821 5,338 4,465 5,805 6,240 5,500 6,510 12,095 13,908 15,816 Manufacturing 4,271 6,306 6,602 6,656 7,950 7,921 9,323 13,311 13,985 13,200 Wholesale Trade 4,728 4,460 5,419 7,069 18,918 12,332 11,078 13,062 28,686 30,387 Retail Trade 453,352 465,847 482,261 482,859 486,828 510,727 543,582 576,915 596,791 664,649 Information 3,338 2,464 2,613 2,330 10,755 15,312 16,102 14,409 14,079 12,148 Finance and Insurance 234 227 65 67 60 55 119 130 216 541 Real Estate and Rental/Leasing - - - - 10,462 11,032 12,258 12,034 15,689 16,249 Professional, Scientific and Tech Services - - - - 7,627 7,660 8,652 8,697 9,530 11,070 Administrative, Support, Waste Mgmt, Remediation - - - - 12,866 14,703 14,667 15,134 16,462 15,054 Educational Services - - - - 98 93 22,981 26,252 29,592 32,502 Health Care and Social Assistance - - - - 986 1,721 1,951 2,547 2,873 4,042 Arts, Entertainment and Recreation 3,511 3,034 3,071 3,588 5,382 5,480 6,174 6,781 6,949 7,399 Accommodation and Food Services 92,728 105,493 113,010 116,051 129,054 137,440 146,017 157,217 169,714 185,724 Other Services 74,518 80,432 88,939 90,845 19,312 20,774 16,690 14,024 12,877 13,651 Total 656,271$ 684,792$ 718,764$ 728,915$ 731,707$ 765,679$ 831,047$ 889,292$ 950,687$ 1,044,835$ City direct sales tax rate 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50%Source: Texas State Comptroller of Public AccountsNotes: Taxable sales information is not available on a fiscal-year basis. The state converted from reporting SICS classification of industries to NAICS classification of industries effective with the reporting year 2002.Data reported for the years 1998 through 2001 is classified under the old SICS codes and every effort was made to compare like industries. The categories listed with no sales for 1997 through 2001 are includedin Other Services for those years. This report includes data only from holders of sales tax permits. If fewer than four outlets reported in a quarter, the data is omitted as required by state disclosure laws.Calendar YearCITY OF COLLEGE STATION, TEXASTAXABLE SALES BY CATEGORYLAST TEN CALENDAR YEARS(in thousands of dollars)133 City Brazos State of Fiscal Year Direct Rate County Texas1999 1.50% 0.50% 6.25%2000 1.50% 0.50% 6.25%2001 1.50% 0.50% 6.25%2002 1.50% 0.50% 6.25%2003 1.50% 0.50% 6.25%2004 1.50% 0.50% 6.25%2005 1.50% 0.50% 6.25%2006 1.50% 0.50% 6.25%2007 1.50% 0.50% 6.25%2008 1.50% 0.50% 6.25%Source: Texas State Comptroller of Public AccountsCITY OF COLLEGE STATION, TEXASDIRECT AND OVERLAPPING SALES TAX RATESLAST TEN FISCAL YEARS134 Number Percentage Tax Percentage Number Percentage Tax Percentageof Outlets of Total Liability of Total of Outlets of Total Liability of TotalRetail trade 941 57.57% 8,191$ 83.21% 1,188 55.67% 12,756$ 81.39%Services 477 29.17% 732 7.43% 406 19.03% 1,032 6.59%Wholesale trade 36 2.20% 454 4.61% 62 2.91% 456 2.91%Utilities, transportation, communications 19 1.16% 257 2.61% 19 0.89% 337 2.15%Manufacturing 47 2.87% 64 0.65% 64 3.00% 198 1.26%Construction 52 3.18% 87 0.89% 101 4.73% 237 1.51%Agriculture, forestry, and fishing 43 2.63% 53 0.54% 37 1.73% 114 0.72%Finance, insurance, real estate 11 0.67% 4 0.04% 56 2.62% 252 1.61%All other outlets 9 0.55% 1 0.01% 201 9.42% 291 1.86%Total 1,635 100.00% 9,843$ 99.99% 2,134 100.00% 15,673$ 100.00%Source: Texas State Comptroller of Public AccountsNotes: Due to confidentiality issues, the names of the ten largest revenue payers are not available. The categories presented are intended to provide alternative information regarding the sources of the City's revenue.Calendar year 2007 is the most recent year for which data is available.Tax liability information is not available on a fiscal-year basis.The category labeled "All other outlets" is higher than normal in 2007 due to the State Comptroller's conversion from SIC classification codes to NAICS classification codes. The State reports in SIC classifications andnew outlets added since the conversion began are labeled within the SIC classification of "other". Calendar Year 1998 Calendar Year 2007CITY OF COLLEGE STATION, TEXASSALES TAX REVENUE PAYERS BY INDUSTRYCALENDAR YEARS 1998 AND 2007(dollars are in thousands)135 Public PropertyGeneral Finance Utility Utility Revenue Utility Revenue Total PercentageFiscal Obligation Certificates of Contractual Revenue Capital Certificates General Primary of Personal PerYear Bonds Obligation Obligations Bonds Leases of Obligation Obligation Bonds Government Income Capita1999 32,750,000$ 6,350,000$ 405,000$ 35,965,000$ -$ -$ -$ 75,470,000$ - 1,147$ 2000 38,700,000 17,955,000 - 42,870,000 - - - 99,525,000 - 1,466 2001 39,375,000 20,595,000 - 63,185,000 - - - 123,155,000 11.96% 1,710 2002 41,665,000 33,280,000 - 78,235,000 - - - 153,180,000 - 2,022 2003 43,170,000 32,525,000 - 79,680,000 - - - 155,375,000 - 1,984 2004 47,085,000 34,705,000 - 75,655,000 - - - 157,445,000 - 1,963 2005 49,800,000 30,195,000 - 79,215,000 - 8,910,000 - 168,120,000 - 2,052 2006 53,835,000 34,905,000 - 91,460,000 - 8,580,000 - 188,780,000 15.39% 2,244 2007 55,720,000 33,500,000 - 105,215,000 - 8,240,000 - 202,675,000 15.49% 2,330 2008 60,695,000 39,965,000 - 99,560,000 - 23,820,000 - 224,040,000 12.90% 2,481 Sources: City of College Station (outstanding debt, per capita) and the U.S. Census Bureau, American Community Survey (personal income)Notes: Details regarding the city's outstanding debt can be found in the notes to the financial statements.Personal income information for the City of College Station is only available for calendar years 2000, 2005 - 2008.A portion of the Governmental Certificates of Obligation are related to electric and sewer utility projects as follows: FY04 orginal issue $9,415,000; outstanding FY 08 - $7,895,000. FY08 orginal issue $15,925,000Governmental Activities Business-Type ActivitiesCITY OF COLLEGE STATION, TEXASRATIOS OF OUTSTANDING DEBT BY TYPELAST TEN FISCAL YEARS136 General Percentage ofObligation Less Debt Service Net Actual TaxableFiscal Year Bonds Cash Funds Bonded Debt Value of Property Per Capita1999 32,750,000$ 3,472,280$ 29,277,720$ 1.53% 4452000 38,700,000 4,202,042 34,497,958 1.66% 5082001 39,375,000 1,722,254 37,652,746 1.66% 5232002 41,665,000 1,287,038 40,377,962 1.65% 5332003 43,170,000 659,180 42,510,820 1.59% 5432004 47,085,000 585,336 46,499,664 1.56% 5802005 49,800,000 912,353 48,887,647 1.50% 5972006 53,835,000 1,645,563 52,189,437 1.45% 6222007 55,720,000 2,060,709 53,659,291 1.35% 6172008 60,695,000 2,573,421 58,121,579 1.17% 644Source: City of College StationNotes: Details regarding the City's outstanding debt can be found in the notes to the financial statements.CITY OF COLLEGE STATION, TEXASRATIOS OF NET GENERAL BONDED DEBT OUTSTANDINGLAST TEN FISCAL YEARS137 Estimated Estimated Share Debt Percentage of Direct and Governmental Unit Outstanding Applicablea Overlapping Debt Debt repaid with property taxes College Station I.S.D. 110,435,000$ 96.31% 106,359,949$ Brazos County 97,680,000 49.26% 48,117,168$ Bryan I.S.D. 136,595,000 5.39% 7,362,471$ Other debt College Station I.S.D. 543,410 96.31% 523,358$ Brazos County - 49.26% -$ Bryan I.S.D. Capital Lease 1,510,000 5.39% 81,389$ Subtotal, overlapping debt 162,444,335$ City direct debt 100,660,000$ Total direct and overlapping debt 263,104,335$ Sources: Debt outstanding data provided by each governmental unit. Assessed value data used to estimate applicable percentages provided by the Brazos County Appraisal District. Notes: Overlapping governments are those that coincide, at least in part, with the geographical boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of College Station. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident and therefore responsible for repaying the debt of each overlapping government. a For debt repaid with property taxes, the percentage of overlapping debt is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of another governmental unit's taxable assessed value that is within the City's boundaries and dividing it by each unit's total assessed value. CITY OF COLLEGE STATION, TEXAS DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT AS OF SEPTEMBER 30, 2008 138 The City has no general obligation legal debt limit other than a ceiling on the ad valorem tax rate as specified by the State of Texas. The prescribed maximum is $2.50 per $100 at 100% valuation. CITY OF COLLEGE STATION, TEXAS LEGAL DEBT MARGIN INFORMATION SEPTEMBER 30, 2008 139 Utility Less: Net Average MaximumService Operating Available Debt Service Annual Debt Service AnnualFiscal Year Charges Expenses Revenue Total Coverage Total Coverage1999 49,101,104$ 30,080,145$ 19,020,959$ 2,844,899$ 6.69 5,502,384$ 3.462000 52,932,584 41,925,412 11,007,172 3,472,421 3.17 5,687,161 1.942001 59,143,896 45,465,778 13,678,118 4,688,518 2.92 6,395,244 2.142002 62,141,066 46,274,555 15,866,511 5,825,064 2.72 8,048,707 1.972003 64,046,246 47,785,550 16,260,696 5,773,582 2.81 8,084,285 2.012004 64,785,122 44,719,241 20,065,881 5,651,966 3.55 7,998,465 2.512005 70,636,853 51,125,745 19,511,108 5,522,447 3.53 8,364,747 2.332006 80,787,029 54,432,847 26,354,182 6,423,582 4.10 9,163,574 2.882007 87,911,120 63,514,543 24,396,577 7,389,770 3.30 10,408,958 2.34 2008 99,610,432 73,195,783 26,414,649 8,620,759 3.06 12,245,949 2.16 Source: City of College StationNotes: Details regarding the City's outstanding debt can be found in the notes to the financial statements. Operating expenses do not include interest, depreciation, or amortization expense.The coverage ratios presented in this schedule are formulas required by bond resolutions. The bond resolutions require that net revenues equal at least 1.4 times the average annual debt service on all revenue bonds and other indebtedness payable from those revenues. The bond resolutionsalso require that net revenues equal at least 1.25 times the maximum annual debt service on all revenue bonds and other indebtedness payablefrom those revenues.Utility Revenue BondsPLEDGED-REVENUE COVERAGECITY OF COLLEGE STATION, TEXASLAST TEN FISCAL YEARS140 Personal Income Calendar (thousands Per Capita Unemployment Year Population of dollars)Personal Income Rate 1998 63,852 -$ -$ 1.8 1999 65,797 - - 1.8 2000 67,890 1,029,891 15,170 1.6 2001 72,020 - - 1.7 2002 75,752 - - 2.0 2003 78,309 - - 2.4 2004 80,214 - - 2.0 2005 81,930 1,226,974 14,976 3.7 2006 84,116 1,308,384 15,555 3.9 2007 86,982 1,736,221 19,961 3.8 Sources: City of College Station Planning Division (population) U. S. Census Bureau, American Community Survey (personal income) Texas Workforce Commission (unemployment rate) Notes: In 2005, the Bureau of Labor Statistics introduced a new methodology for calculating unemployment rates. Along with the new calculation method, Robertson and Grimes county were added to the Bryan/College Station MSA. The net result is an increase in the area's unemployment rate. Personal income information for the City of College Station is only available for calendar years 2000, 2005, 2006, and 2007. CITY OF COLLEGE STATION, TEXAS DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN CALENDAR YEARS 141 2008 2000 Employer Employer Brazos County Brazos County Bryan ISD Bryan ISD City of Bryan City of Bryan City of College Station City of College Station College Station ISD College Station ISD Reynolds & Reynolds (1)Reliant Building Products Inc Sanderson Farms Inc Sanderson Farms Inc St Joseph Hospital St Joseph Hospital Texas A&M University Texas A&M University Wal-Mart Associates Inc Wal-Mart Associates Inc Source: Texas Workforce Commission, Labor Market/Career Information Department, Research Valley Partnership (1) Recent name change from Universial Computer Systems Notes: Data includes principal employers in Brazos County. Employers are listed in alphabetical order and do not reflect any ranking. The TWC ranking and number of employees data is confidential. The TWC began tracking this data in 2000 therefore no earlier data is available. PRINCIPAL EMPLOYERS CURRENT YEAR AND EIGHT YEARS AGO CITY OF COLLEGE STATION, TEXAS 142 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008Function/ProgramGeneral Government 33.9 33.2 37.2 39.7 36.8 38.5 41.9 37.8 58.5 71.0Police 118.5 132.3 139.4 140.3 143.4 146.0 144.4 155.1 163.5 168.5Fire 87.0 91.3 98.1 103.9 105.9 108.5 111.4 110.6 119.0 125.0Public Works 87.1 88.3 95.0 104.4 104.5 106.8 112.2 112.6 114.5 106.5Parks and Recreation 103.8 106.8 111.3 115.4 120.1 116.2 120.0 119.8 123.5 131.0Planning and Development Services 27.4 29.2 27.8 29.0 28.3 28.5 25.8 27.1 24.5 34.0Information Services 40.3 41.5 39.2 39.1 40.0 40.3 37.5 36.6 28.5 33.0Fiscal Services 51.0 53.2 54.3 53.1 61.1 59.8 64.2 70.1 71.0 72.5Electric 44.1 48.8 57.1 57.5 56.9 53.4 56.6 56.0 56.5 58.0Water / Sewer Services 66.0 65.4 64.6 66.2 66.0 64.0 69.1 71.8 71.0 67.5BVSWMA 26.3 29.3 27.8 28.8 28.3 27.3 24.4 24.0 22.0 25.5Captial Project n/a n/a n/a n/a n/a n/a n/a n/a 10.0Total 685.4 719.3 751.8 777.4 791.3 789.3 807.5 821.5 852.5 902.5Source: City of College StationNotes: Full-time-equivalent employees include full time, part time, and seasonal/temporary employees on staff as of September 30.Capital Projects added in FY 2008.Full-Time-Equivalent Employees as of Sept 30CITY OF COLLEGE STATION, TEXASFULL-TIME-EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAMLAST TEN FISCAL YEARS143 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008Function/ProgramGeneral Government Open records requests 350 250 250 147 62 103 72 199 199 155 Economic development prospects * 29 17 15 29 17 20 31 19 18 Code enforcement cases processed * 3,503 4,209 4,525 6,280 9,341 2,848 5,984 4,838 5,148 Non-profit agencies/contracts monitored 11 8 8 12 11 10 9 13 7 10 Applicants receiving homebuyers assistance 7 22 12 25 14 16 2 9 6 3Police DUI/DWI arrests 551 522 351 311 341 418 387 414 493 458 Citations processed 35,752 40,712 44,305 36,945 43,407 42,957 39,416 34,134 38,046 10,384 Uniform patrol calls handled 47,662 50,459 50,034 56,388 61,821 60,405 57,605 60,159 58,303 57,661 Average response time on high priority calls 5:52 mins 6:10 mins 5:53 mins 6:01 mins 6:28 mins 5:58 mins 6:09 mins 6:15 mins 6:17 mins 6.06 mins Criminal investigation new cases assigned 2,010 2,041 1,810 1,970 2,292 2,259 2,300 2,368 2,256 2,635Note: In FY08 an e-citation program was implemented thus reducing the number of paper citations processed.Fire Fire incidents (fire, rescue, and haz mat) * 1,607 1,603 1,653 1,455 1,554 1,792 1,743 1,832 1,992 Business safety inspections 973 777 1,128 900 1,014 1,410 1,138 828 1,018 947 Parking citations issued 26,790 * 12,324 18,500 18,034 16,587 11,900 8,452 7,238 9,460 Community enhancement cases 7,352 9,224 12,077 12,550 11,637 15,086 7,016 7,384 8,631 11,885 EMS incidents * 2,495 2,704 2,554 2,754 2,800 3,241 3,048 3,773 4,718 EMS unit responses * 4,556 4,428 4,568 4,687 4,900 4,930 5,276 5,476 5,369 Notes: FY99 fire incidents include fire, rescue, hazardous material, and EMS incidents (EMS operations were assigned a separate division in FY00).Public Works Street overlay lane miles 23 21 12 1 20 18 19 19 19 15 Potholes repaired * * * * * * 24,696 24,778 21,506 20,546 Curb miles swept * * * * * * 6,338 7,235 6,040 6,955 Sign, marking, signal work orders 1,894 3,008 2,562 2,709 3,472 3,270 2,898 2,557 2,617 2,880Parks and Recreation Pavilion rentals 398 355 340 353 342 314 221 399 338 395 Adult participants in City leagues 9,787 12,574 9,480 10,642 8,529 8,307 10,774 822 611 786 Youth participants in City leagues 2,347 2,060 1,887 2,684 1,977 2,690 2,520 2,842 2,946 4,183 Special event participants 185,630 159,457 22,718 123,743 188,980 188,429 201,256 197,805 185,002 170,193 Instructional participants 3,987 2,912 3,148 3,546 3,447 3,581 3,579 3,075 3,432 3,538 Pool customers 98,958 114,319 119,329 130,113 142,154 145,879 132,549 146,805 128,206 142,605 Conference center customers 85,240 87,372 88,239 74,320 70,728 81,289 85,720 70,494 66,950 79,360 Lincoln center participants 51,947 49,071 67,665 68,919 72,794 81,629 82,624 98,869 100,952 93,501 Teen center participants 4,812 17,219 11,178 12,465 13,446 14,582 17,500 9,958 15,798 15,259 Notes: FY01 special event participants do not include Christmas in the Park counts. Adult participants in City leagues was changed in FY06 to adult teams participating in City leagues. FY05 pavilion rentals had the following changes: Thomas Park pavilion rentals were removed (no longer charging a fee) and W.A. Tarrow basketball pavilion was added. In FY06 Crompton Park pavilion was added to rentals.CITY OF COLLEGE STATION, TEXASOPERATING INDICATORS BY FUNCTION/PROGRAMLAST TEN FISCAL YEARSFISCAL YEAR144 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008Function/ProgramPlanning and Development Services Permits processed * * * 6,728 6,604 6,685 6,500 6,575 7,583 6,647 Building inspections performed 9,266 10,045 11,046 14,671 13,364 13,435 13,297 13,069 13,398 13,814Electric Number of connections 28,433 26,169 27,113 33,386 35,421 35,307 36,284 37,590 38,519 37,777 Residential job orders * 1,740 1,825 1,942 2,505 2,134 1,904 1,422 1,714 2,342 Customer service job orders * 2,022 2,079 2,144 2,078 2,496 1,561 1,678 1,717 1,928 Average monthly consumption (KWH) 47,217,068 51,604,230 51,409,703 52,466,218 54,820,470 55,673,526 60,413,524 61,910,063 60,766,805 64,724,128 Avg number of outages per customer 1.40 1.64 1.22 1.00 1.33 0.72 0.92 0.31 0.12 0.27Water Number of connections 20,165 21,017 15,524 23,210 29,358 31,038 32,266 33,491 34,763 37,075 New services completed * * 1,289 1,440 1,560 1,217 773 931 1,027 1,235 Average monthly consumption (MGW) 316,005 292,000 295,875 262,541 253,259 236,355 283,429 317,438 293,246 324,012 Water meters tested * * 893 950 1,025 768 732 1,254 1,174 732 Avg number of outages per customer * * * 0.190 0.003 0.160 0.016 0.039 0.013 0.007Sewer Number of connections * * * 28,399 27,977 28,594 29,694 31,051 32,034 34,743 Average daily sewage treatment 5,498 5,881 6,158 6,669 6,807 6,808 6,220 5,911 6,502 6,626 (thousands of gallons) New services completed * * 1,139 1,400 1,540 890 571 646 521 781 Avg number of stoppages per customer * * * 0.015 0.0001 0.003 0.003 0.003 0.003 0.002 Sanitation Number of users (units) 23,200 24,360 28,894 23,947 28,215 28,594 28,399 27,181 28,112 29,533 Residential tons collected 14,693 14,999 15,614 17,710 18,057 20,353 23,535 24,964 27,556 22,191 Residential tons recycled 925 1,129 978 941 826 1,082 923 983 1,060 1,199 Commercial tons collected 26,730 30,951 31,376 32,364 33,402 35,355 35,114 35,122 38,402 38,709Parking garage Active contract customers * * * * * * 449 432 472 464 Hourly cash customers * * * 65,612 106,935 97,904 127,608 108,893 109,028 107,584 Notes: Parking garage opened to customers in February 2002.Utility Customer Service Payments processed 326,166 369,001 379,439 388,579 404,742 408,348 401,891 413,088 423,299 443,766 Incoming calls 85,583 79,741 79,747 79,514 82,018 82,536 82,234 85,728 85,842 97,121 Meters read 459,270 482,920 501,175 525,412 552,949 577,773 598,660 618,676 640,554 670,913Source: City of College Station various departments* Data not measured for fiscal year indicated.FISCAL YEARCITY OF COLLEGE STATION, TEXASOPERATING INDICATORS BY FUNCTION/PROGRAM - ContinuedLAST TEN FISCAL YEARS145 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008Function/ProgramPolice Patrol units 24 25 25 25 25 25 26 26 29 29 Jail capacity 17 17 17 17 17 17 17 17 17 17 Note: The patrol units figure includes 1 K-9 unit.Fire stations 4 4 4 4 4 4 4 4 4 4 Note: The Fire Department operates an additional fire station located at the airport.Public Works Streets (linear miles) 711 711 711 711 733 353 385 395 429 438 Sidewalks (miles) 30 91 89 89 89 89 97 100 100 100 Traffic signals 49 53 55 57 60 62 62 62 65 66 Storm sewers (miles) * * * * * * * 72 72 72 Notes: Street measurement changed from lane miles to linear miles in FY04. Storm sewer mileage includes both underground pipes and valley gutters.Parks and Recreation Acreage 1,106 1,127 1,146 1,134 1,214 1,217 1,248 1,274 1,289 1,306 Playunits 35 35 35 35 35 35 35 46 48 47 Softball/baseball fields 19 16 19 19 19 19 25 32 32 35 Soccer fields 22 13 13 19 19 19 26 31 31 29 Jogging/walking trails 19 19 20 20 22 22 26 27 28 29 Community centers 3 3 3 3 3 3 3 3 3 3 Pools 3 3 3 3 3 3 3 3 3 3 Pavilions (rentable) 5 5 5 5 5 5 6 6 7 7 Notes: Some parks have multiple playunits. Softball/baseball fields include practice fields.Electric Maximum capacity (megawatts) 230 250 255 255 255 255 280 260 355 355 Number of substations 3 4 4 4 4 4 4 5 5 5 Distribution lines (miles) 285 290 333 400 414 414 450 394 411 411 Water Water mains (miles) 245 262 280 294 311 317 341 365 367 381 Fire hydrants * * * * * 2,070 2,165 2,232 2,380 2,453 Number of wells 5 5 5 6 6 6 6 8 8 8 Wells storage capacity 19,500 19,500 20,000 19,000 26,000 26,000 28,000 23,000 23,000 23,000 (thousands of gallons per day)Sewer Sanitary sewer lines (miles) 220 232 243 252 262 264 271 279 285 301 Treatment capacity 9,500 9,500 9,500 11,500 11,500 11,500 11,500 11,500 11,500 11,500 (thousands of gallons per day)Sanitation Collection trucks 21 21 21 22 23 24 24 24 25 25 Residential collection containers * * * * 14,413 15,207 15,958 16,647 18,135 19,549 Commercial collection containers 1,132 1,205 1,230 1,383 1,407 1,511 1,545 1,569 1,594 1,619Fleet number of vehicles * * * * 585 600 613 627 651 643 Source: City of College Station* Data not measured for fiscal year indicated.FISCAL YEARCITY OF COLLEGE STATION, TEXASCAPITAL ASSET STATISTICS BY FUNCTION/PROGRAMLAST TEN FISCAL YEARS146